What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-17 compared with 2025-02-24 · 796 added, 694 removed, 706 unchanged (68% of the section changed)

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Throughout this combined Form 10-K, references are made to various notes in the Consolidated Financial Statements which appear in Part II, Item 8 of this combined Form 10-K, and the information contained in such notes is incorporated by reference into the MD&A in the places where such references are made.

Xerox Holdings' other direct subsidiary is Xerox Ventures LLC, which was established in 2021 solely to invest in startups and early/mid-stage growth companies aligned with the Company’s innovation focus areas and targeted adjacencies.

The investments are primarily equity or equity-linked securities and for less than 20% ownership.

Xerox Ventures LLC had investments of approximately $40 million and $26 million at December 31, 2024 and 2023, respectively.

In January 2024, Myriad Ventures Fund I LP was established, and the investments held by Xerox Ventures LLC were transferred to this new entity, which will continue to be fully consolidated by Xerox Holdings.

Due to its immaterial impact to earnings and the balance sheet, and for ease of discussion, Xerox Ventures LLC's results are included within the following discussion.

Xerox Holdings' other direct subsidiary is Xerox Ventures LLC, which was established solely to invest in startups and early/mid-stage growth companies aligned with the Company’s innovation focus areas and targeted adjacencies.

In January 2024, Myriad Ventures Fund I LP (Myriad) was established, and the investments held by Xerox Ventures LLC were transferred to Myriad, which will continue to be fully consolidated by Xerox Holdings.

The investments are primarily equity or equity-linked and for less than 20% ownership.

At December 31, 2025 and 2024 Xerox's investment in Myriad was $41 million and $40 million, respectively.

The following discussion includes the results of Xerox Ventures LLC as they are immaterial to earnings and the balance sheet, and for ease of discussion.

Our results include Lexmark International II, LLC (Lexmark) from July 1, 2025, the effective date of the acquisition (the Lexmark Acquisition), as well as the results of ITsavvy LLC (ITsavvy), acquired on November 20, 2024.

In order to provide a clearer comparison of our results to the prior year, we are also providing a discussion and analysis on a pro forma basis.

See the “ Pro Forma Basis ” section below for further explanation and discussion of pro forma results.

In addition, the following discussion includes references to "legacy Xerox", which reflects the financial results of Xerox, excluding the impact of the Lexmark Acquisition and ITsavvy, as applicable.

Executive Overview

2024 was the second year of our Reinvention.

Reinvention is a multi-year strategy designed to transform the way Xerox operates.

Its objectives are to strengthen our core business and improve financial flexibility to enable investments in solutions, initiatives, and capabilities that will position Xerox to deliver long-term, sustainable growth in revenue and profits.

Total revenue for full year 2024 of $6.2 billion decreased 9.7% reflecting a 0.7-percentage point benefit from acquisitions, as well as a 0.2-percentage point adverse impact from currency.

2025 was a pivotal year for Reinvention, which is a multi-year strategy designed to transform the way Xerox operates.

Its objectives are to strengthen our core business and improve financial flexibility enabling investments in solutions, initiatives, and capabilities that will position Xerox to gain share in existing markets and mix shift into higher growth verticals beyond print, delivering long-term, sustainable growth in revenue and profits.

Total revenue for full year 2025 of $7.0 billion increased 12.9% reflecting a 15.5-percentage point benefit and 6.5-percentage point benefit from the Lexmark Acquisition and ITsavvy, respectively, as well as a 0.7-percentage point benefit from currency.

On a pro forma 1 basis total revenue declined 7.6%.

_____________

(1) Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITsavvy was acquired on January 1, 2023.

Refer to the "Pro Forma Basis" section for an explanation of this measure.

Recent Changes and Developments

In January 2024, we implemented a significant reorganization of our business, including the adoption of a business unit-led operating model, the re-alignment of our sales organization and the establishment of a Global Business Services (GBS) organization to centralize key business processes and enable enterprise-wide efficiencies and productivity gains.

These changes brought closer alignment between our sales, marketing and offering teams and the economic buyers of our products and services, improved operating efficiency and positioned the Company to acquire and integrate ITsavvy and Lexmark, two transactions we expect will accelerate our Reinvention by diversifying our mix of revenue and further strengthening our core businesses.

The focus of our Reinvention efforts in 2024 was threefold:

Geographic Simplification, Operational Simplification, and Commercial Optimization & Growth.

We made significant progress across each priority.

• Geographic Simplification:

– Replaced direct-to-end-customer with partner-led distribution models in Latin America and parts of Europe

On July 1, 2025, Xerox Corporation completed the acquisition of Lexmark International II, LLC (Lexmark) (the Lexmark Acquisition).

The addition of Lexmark is intended to enhance Xerox's operational resilience and cost structure.

Expected benefits include increased presence in the A4 color segment, entry into the APAC print market, potential reductions in product and tariff-related costs through the use of Lexmark’s manufacturing footprint, improved supply chain flexibility, and the ability to leverage Lexmark’s global capability centers and IT infrastructure to support customer satisfaction and operational efficiency.

The combined company also offers a wider portfolio of offerings and services to Lexmark’s large customer base.

During the year we also completed the integration of ITsavvy, forming our new Xerox IT Solutions organization (IT Solutions).

IT Solutions meaningfully expands Xerox’s reach of the typical IT budget by providing additional offerings as well as opportunities that strengthen our relationship with existing clients.

In 2025, growth of the IT Solutions business was driven primarily by ITsavvy as well as client demand for integrated infrastructure, cloud, security, and automation solutions.

Refer to Note 6 - Acquisitions and Divestitures in the Consolidated Financial Statements for additional information regarding our acquisitions and divestitures.

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During the first quarter of 2025, the Company updated its determination of reportable segments to align with a change in how the Chief Operating Decision Maker (CODM), our Chief Executive Officer (CEO), allocates resources and assesses performance against the Company’s key growth and Reinvention strategies.

As such, it was determined that there are two reportable segments - Print and Other, and IT Solutions.

Prior to this change, the Company had two reportable segments - Print and Other, and Xerox Financial Services (XFS).

As a result of this change, prior period reportable segment results and related disclosures have been conformed to reflect the Company’s current reportable segments.

As noted above, Lexmark was acquired during the third quarter of 2025.

The results of Lexmark are included in the Print and Other segment.

Refer to Note 4 - Segment and Geographic Area Reporting in the Consolidated Financial Statements for additional information regarding this change.

Our Reinvention efforts are focused on Operational Simplification, and Commercial Optimization and Growth.

During 2025, we made significant progress across each priority.

• Operational Simplification

– Implemented business-unit led operating model

– Established GBS

– Achieved gross savings target of more than $200 million in 2024

– Restructured commercial arrangements with technology and Business Process Outsourcing Partners to create flexibility and mutually aligned incentives to reduce operating costs

– Achieved cumulative run-rate gross cost savings of more than $500 million through year-end 2025, including Integration savings

– Eliminated duplicative systems, implemented more efficient systems and processes, and enhanced efficiency in procurement, warehousing, inventory management and demand planning

– Launched tools focused on digital transformation

• Commercial Optimization and Growth:

– Stopped manufacturing certain High-End production equipment to focus on Production submarkets with higher growth and return profiles

– Deployed A.I.-enabled pricing tools and revamped sales territory coverage

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– Closed the acquisition of ITsavvy, immediately enhancing Xerox’s IT Solutions offering and expanding Total Addressable Market (TAM) of Xerox's offerings

– Announced pending acquisition of Lexmark, providing greater exposure to growing Print markets

Refer to Note 6 - Acquisitions and Divestitures in the Consolidated Financial Statements for additional information regarding our acquisitions and divestitures.

Goodwill Impairment

During the third quarter 2024, we identified events and conditions that required a quantitative assessment of Goodwill, as operating results for the quarter, as well as updated forecasts for the full year, were below previous forecasts.

In addition, during 2024, the Company experienced a decline in its stock price and market capitalization, which became significant and sustained during the third quarter.

After completing our quantitative impairment test, we concluded that the estimated fair value of the Print and Other reporting unit (the only reporting unit with Goodwill) had declined below its carrying value and we recognized an after-tax, non-cash impairment charge of $1,015 million ($1,058 million pre-tax) related to our Goodwill in the third quarter 2024.

– Re-entered the growing mid-volume Production inkjet market through partnerships, with the launch of IJP900 and Proficio products

– Launched Inside Sales operations in U.S.

– Invested in partner programs and customer initiatives

– Integrated ITsavvy, enhancing Xerox’s IT Solutions offering and expanding Total Addressable Market (TAM) of Xerox's offerings

– Closed the Lexmark Acquisition, providing greater exposure to growing Print markets

Business Overview

With annual revenues of approximately $7.0 billion, we are a leading global provider of digital print technology and related services, software and solutions.

Our primary offerings span four main areas:

Workplace Solutions, Production Solutions, Xerox Services, and Xerox Financial Services (XFS).

Our business spans five primary offerings areas:

Workplace Solutions, Production Solutions, Xerox Services, Xerox Financial Services (XFS), all of which are included in the Print and Other segment, and IT Solutions.

• Workplace Solutions is comprised of two strategic product groups, Entry and Mid-Range , much of which share common solutions, apps and ConnectKey® software.

Workplace Solutions revenues include the sale of products (captured primarily as equipment sales) as well as software, supplies and the associated technical service and financing of those products through XFS (captured as post sale revenue).

• Production Solutions are designed for customers in the graphic communications, in-plant and production print environments with high-volume printing requirements.

• Production Solutions includes high-end solutions designed for customers in the graphic communications, in-plant and production print environments with high-volume printing requirements.

Our broad portfolio of presses and solutions provides black-and-white and full-color, as well as on-demand printing across a wide range of applications.

Production Solutions revenues include the sale of products (captured primarily in equipment sales) as well as, software, supplies and the associated technical service and financing of those products (captured as post sale revenue).

• Xerox® Services includes a continuum of solutions and services that helps our customers optimize their physical print and digital information infrastructures, apply automation and simplification to maximize productivity, and ensure the highest levels of security.

Our primary offerings in this area are Managed Print Services 1 (MPS), IT Solutions, Capture & Content Services (CCS) and Customer Engagement Services (CES).

Our primary offerings in this area are Managed Print Services 1 (MPS), Capture & Content Services (CCS) and Customer Engagement Services (CES).

CCS and CES encompass a range of Digital Services that leverage our software capabilities in Workflow Automation, Personalization and Communication Software, Content Management Solutions, and Digitization Services.

• XFS is a global financing solutions business and currently offers financing for direct channel customer purchases of Xerox equipment and solutions through bundled lease agreements and lease financing to end-user customers who purchase Xerox equipment and solutions through our indirect channels.

Headquartered in Norwalk, Connecticut, with approximately 16,800 employees, Xerox serves customers globally in North America, Latin America, Brazil, Europe, Eurasia, the Middle East, Africa and India.

• IT Solutions provides clients of all sizes integrated IT infrastructure solutions, delivering business outcomes through its suite of Device Lifecycle Solutions, and Managed IT Services.

The IT Solutions business leverages its professional services and engineering capabilities, along with an extensive partner ecosystem to design, develop and deliver comprehensive Network and Security Solutions, and Infrastructure and Cloud Solutions.

_____________

(1) Includes revenues from service, maintenance and rentals.

IT Solutions and digital services are not included in managed print services.

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Headquartered in Norwalk, Connecticut, with approximately 22,900 employees, Xerox serves customers globally in North America, Europe, Latin America, Brazil, APAC, the Middle East, Africa and India.

We have a broad and diverse base of customers by both geography and industry, ranging from small and mid-sized clients to printing production companies, governmental entities, educational institutions and Fortune 1000 corporations.

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Post Sale Based Business Model

In 2024, 78% of our total revenue was post-sale-based, is comprised, in part, of managed print services 1 , supplies and financing.

In 2025, 79% of our total revenue was post-sale-based and is comprised, in part, of managed print services 1 , supplies and financing.

These revenue streams generally follow equipment placements and provide stability to our revenue and cash flows.

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_____________

(1) Previously known as contractual print services, and includes revenues from service, maintenance and rentals.

(1) Includes revenues from service, maintenance and rentals.

IT Solutions and digital services are not included in managed print services.

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Financial Overview

Total revenue of $6.2 billion in 2024 decreased 9.7% and included a 0.7-percentage point benefit from acquisitions, as well as a 0.2-percentage point adverse impact from currency.

2024 total revenue reflected a decrease in Post sale revenue of 7.4%, which included a 0.9-percentage point benefit from acquisitions, as well as a 0.1-percentage point adverse impact from currency.

Equipment sales revenue decreased 16.7% and included a 0.2-percentage point adverse impact from currency.

Total revenue of $7.0 billion in 2025 increased 12.9% reflecting a 15.5-percentage point benefit and 6.5-percentage point benefit from the Lexmark Acquisition and ITsavvy, respectively, as well as a 0.7-percentage point benefit from currency.

On a pro forma 1 basis total revenue declined 7.6%.

Total revenue reflected the following:

• an increase in post sale revenue of 14.3%, reflecting a 15.2-percentage point benefit and 8.4-percentage point benefit from the Lexmark Acquisition and ITsavvy, respectively, as well as a 0.7-percentage point benefit from currency.

On a pro forma 1 basis post sale revenue declined 7.4%.

• an increase in equipment sales revenue of 8.0%, reflecting a 16.5-percentage point benefit from the Lexmark Acquisition, as well as a 0.9-percentage point benefit from currency.

On a pro forma 1 basis equipment sales revenue declined 8.7%.

Net (loss) income was as follows:

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Net (loss) income $ (1,029) $ (1,321) $ 1 $ 292 $ (1,322)

Adjusted (1) Net income

Adjusted (2) Net (loss) income

(62) 135 287 (197) (152)

Net loss for 2024 of $(1,321) million declined by $1,322 million as compared to Net income of $1 million in 2023.

The decrease in Net income primarily reflects the after-tax Goodwill impairment charge of $1,015 million ($1,058 million pre-tax) in 2024, as well as lower revenue and gross profit, higher Income tax expense, higher Other expenses, net, which includes the impacts of higher non-service retirement-related costs, the impact of Divestitures, and higher Amortization of intangible assets.

These negative impacts were partially offset by lower Selling, administrative and general expenses, Restructuring and related expenses, net, and Research, development and engineering expenses, as well as the favorable impact to the current year resulting from the after-tax PARC donation charge of $92 million ($132 million pre-tax) during 2023.

Adjusted 1 net income for 2024 of $135 million decreased $152 million as compared to 2023 primarily reflecting lower revenue and gross profit, as well as higher Other expenses, net.

These negative impacts were partially offset by lower Selling, administrative and general expenses, and lower Research, development and engineering expenses.

Net (loss) for 2025 was $(1,029) million and improved by $292 million as compared to the 2024 Net (loss) of $(1,321) million.

Net (loss) for 2024 reflects an after-tax Goodwill impairment charge of $1,015 million ($1,058 million pre-tax).

Net (Loss) for 2025 includes the results of ITsavvy and the Lexmark Acquisition from July 1, 2025, and primarily reflects higher Income tax expense, as a result of the establishment of valuation allowances of $537 million against certain deferred tax assets to reflect their realizability.

The change also reflected lower gross profit, and higher Other expenses, net, Selling, administrative and general expenses, RD&E and Amortization of intangible assets.

These negative impacts were partially offset by higher revenues, as well as lower Divestitures, as the prior year included the divestiture of certain direct business operations in Latin America, and lower Restructuring and related costs, net.

Adjusted 2 net (loss) for 2025 includes the results of ITsavvy and the Lexmark Acquisition from July 1, 2025 and was $(62) million as compared to adjusted 2 net income for 2024 of $135 million.

Adjusted 2 net (loss) increased $197 million primarily reflecting higher Other expenses, net, as well as higher Selling, administrative and general expenses, lower gross profit, higher RD&E, higher Income tax expense.

These negative impacts were partially offset by higher revenues.

_____________

(1) Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITsavvy was acquired on January 1, 2023.

Refer to the "Pro Forma Basis" section for an explanation of this measure.

(2) Refer to the "Non-GAAP Financial Measures" section for an explanation of this non-GAAP financial measure.

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A summary of our segment information is as follows:

Year Ended December 31, % Change % of Total

Year Ended December 31, % Change

(in millions) 2025 2024 2023 2025 2024

Print and Other $ 6,272 $ 5,864 $ 6,523 7.0 % (10.1) %

357 401 393 (11.0) % 2.0 % 6 % 6 %

IT Solutions 761 358 363 112.6 % (1.4) %

Total Segment revenue $ 7,033 $ 6,222 $ 6,886 13.0 % (9.6) %

Intersegment Elimination (1)

(71) (86) (90) (17.4) % (4.4) % (1) % (1) %

(11) (1) — NM NM

Corporate Other — — — NM NM

Total Revenue $ 7,022 $ 6,221 $ 6,886

Print and Other $ 5,993 5,468 6,038 9.6 % (9.4) %

323 372 376 (13.2) % (1.1) % 5 % 6 %

IT Solutions 719 358 358 100.8 % — %

Total Segment expenses $ 6,712 $ 5,826 $ 6,396 15.2 % (8.9) %

Intersegment Elimination (2)

(71) (86) (90) (17.4) % (4.4) % (1) % (1) %

Segment Expenses $ 5,919 $ 6,497 $ 6,832 (8.9) % (4.9) % 100 % 100 %

(11) (1) — NM NM

Corporate Other 73 94 101 (22.3) % (6.9) %

Total Expenses $ 6,774 $ 5,919 $ 6,497 14.4 % (8.9) %

Print and Other $ 279 $ 396 $ 485 (29.5) % (18.4) %

34 29 17 17.2 % 70.6 % 11 % 7 %

IT Solutions 42 — 5 NM NM

Total Segment profit $ 321 $ 396 $ 490 (18.9) % (19.2) %

Corporate Other (73) (94) (101) (22.3) % (6.9) %

Total Profit $ 248 $ 302 $ 389 (17.9) % (22.4) %

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(1) Intersegment revenue primarily reflect commissions and other payments, made by the XFS segment to the Print and Other segment for the lease of Xerox equipment placements, while Intersegment expense primarily reflect origination fees and commissions made by the Print and Other Segment to the XFS Segment who lease Xerox equipment to 3rd parties.

(1) Reflects primarily IT hardware, software solutions and services revenues, sold by the IT Solutions segment to the Print and Other segment.

(2) Reflects primarily costs related to the sale of IT hardware, software solutions and services by the IT Solutions segment, to the Print and Other segment.

Cash from operating activities was $224 million in 2025 as compared to $511 million in 2024.

The decrease of $175 million was primarily related to lower net income as well as higher payments for accrued compensation, pension contributions, and restructuring, partially offset by net proceeds of approximately $752 million from the on-going sales of finance receivables under the finance receivables funding agreement, as well as lower finance receivable originations, and improvements in cash for working capital 1 .

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The decrease of $287 million was primarily related to lower net proceeds from the on-going sales of finance receivables under the finance receivables funding agreements, the impacts of one-time cash costs related to the Lexmark Acquisition and higher pension contributions, all of which were partially offset by the timing of working capital 1 , lower finance receivable originations, lower payments for accrued compensation, and lower payments for restructuring.

Cash used in investing activities was $698 million in 2025 as compared to $198 million in 2024.

2024 primarily reflected the acquisition of ITsavvy, as well as capital expenditures of $44 million, $11 million related to the impact of the deconsolidation of an entity that is now accounted for using the equity method of accounting, and $16 million for investments in noncontrolling interests, all of which was partially offset by net cash proceeds of approximately $20 million from the sale of assets, and $7 million from the sales of our business operations in Argentina and Chile.

Cash used in financing activities was $271 million in 2024 as compared to $1,202 million in 2023.

2024 primarily reflected net payments of approximately $658 million on Senior Notes due in 2024 and 2025, $282 million on secured financing arrangements, $18 million for debt issuance costs, and $28 million on the Term Loan B facility.

Partially offsetting payments on debt were proceeds from the issuance of Senior Notes during first quarter 2024 of approximately $900 million.

Dividend payments were $141 million and purchases of capped calls were $23 million in connection with the issuance of Convertible Senior Notes.

2025 primarily reflected the Lexmark Acquisition of $676 million, net of cash acquired, as well as capital expenditures of $91 million, and the investment in a noncontrolling interest of $13 million, all of which were partially offset by $53 million related to the sales of land and three surplus facilities, $6 million related to lower payments for finance leases, $11 million from divestitures, and $7 million from the sale of patents.

Cash provided by financing activities was $404 million in 2025 as compared to cash used by financing activities of $271 million in 2024.

2025 primarily reflected proceeds from the issuance of our First Lien Senior Secured Notes of $400 million (First Lien Notes), the issuance of our Second Lien Senior Secured Notes of $500 million (Second Lien Notes), the issuance of $250 million of our Senior Notes due July 2030 (the 2030 Notes), the issuance of our $125 million Senior Unsecured Notes due June 2026 (the 2026 Notes), and $4 million from the Term Loan B Facility (the TLB), all of which was partially offset by deferred debt issuance costs of $44 million and discounts of $35 million.

Payments on debt reflected $388 million on the 5.00% Senior Notes due in August 2025, $144 million on the TLB, $110 million on secured promissory notes and $72 million on secured financing arrangements.

Dividend payments were $71 million and other financing, net was $29 million, reflecting $22 million for payments of financing commitment fees related to the Lexmark Acquisition, $6 million related to the settlement of stock-based compensation and $10 million related to finance leases, all of which was offset by $11 million for the issuance of warrants in connection with the issuance of the 2030 Notes.

_____________

(1) Working capital, net reflects Accounts receivable, net, Inventories and Accounts payable.

In 2025, we expect total Revenue to grow low single-digits in constant currency 1 , inclusive of a full year of revenue associated with the recent ITsavvy acquisition.

Revenue guidance includes approximately 400 basis points of headwinds associated with ongoing Reinvention actions, including the flow through of geographic simplification actions, reductions in High End equipment sales associated with our decision to stop manufacturing High End Production print equipment, the sale of our European paper business and the continued reduction of XFS revenue associated with a declining finance receivable portfolio.

Core, organic revenue is expected to decline, but at a lower rate than we experienced in 2024.

An improved core, organic revenue trajectory is expected to be driven primarily by market share gains in equipment, and growth in Digital Services and legacy IT Solutions.

In 2025, adjusted 1 operating income margin is expected to be at least 5.0%.

The slight year-over-year improvement reflects incremental gross cost savings, partially offset by higher product costs.

We expect Operating cash flows to be between $420 million and $470 million in 2025.

The year-over-year decline in operating cash is primarily due to lower finance receivables forward flow benefits, partially offset by improved adjusted 1 operating income and working capital.

Capital expenditures are expected to be approximately $70 million.

_____________

(1) Refer to the "Non-GAAP Financial Measures" section for an explanation of this non-GAAP financial measure.

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Currency Impact

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Dollar is normally not the functional currency.

As a result, foreign currency translation had a 0.2-percentage point adverse impact on revenue in 2024 and a 0.2-percentage point favorable impact on revenue in 2023.

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As a result, foreign currency translation had a 0.7-percentage point benefit on revenue in 2025 and a 0.2-percentage point adverse impact on revenue in 2024.

Critical Accounting Estimates

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These arrangements also typically include an incremental, variable component for page volumes in excess of the contractual page volume minimums, which are often expressed in terms of price-per-image or page.

Lease deliverables include the equipment and financing, while the non-lease deliverables generally consist of the services, which include supplies.

In certain arrangements, some elements, such as supplies, may be separately contracted and billed, while the remaining components are billed through a negotiated fixed monthly payment.

Lease deliverables include equipment and financing, while the non-lease deliverables generally consist of supplies and services.

Sales made under bundled lease arrangements directly to end customers comprise 31% or $454 million of our equipment sales revenue.

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Distributors and resellers participate in various discount, rebate, price-support, cooperative marketing and other programs, and we record provisions and allowances for these programs as a reduction to revenue when the sales occur.

Similarly, we also record estimates for sales returns and other discounts and allowances when the sales occur.

Similarly, we also record estimates for sales returns and

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other discounts and allowances when the sales occur.

We consider various factors, including a review of specific transactions and programs, historical experience and market and economic conditions when calculating these provisions and allowances.

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We recorded bad debt provisions of $39 million, $42 million and $28 million in Selling, administrative and general (SAG) expenses in our Consolidated Statements of (Loss) Income for the three years ended December 31, 2025, 2024 and 2023, respectively.

The reserves, as a percentage of trade and finance receivables, were 4.7% at

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December 31, 2024, as compared to 4.4% and 4.1% at December 31, 2023 and 2022, respectively.

The reserves, as a percentage of trade and finance receivables, were 4.5% at December 31, 2025, as compared to 4.7% and 4.4% at December 31, 2024 and 2023, respectively.

We continue to assess our receivables portfolio in light of the current macroeconomic environment and its impact on our estimation of the adequacy of the allowance for doubtful accounts.

In 2024, we recorded approximately $8 million of reserve reversals related to our finance receivable provision, primarily due to the additional write-offs of two large customer receivable balances in Canada.

In 2023, we recorded approximately $12 million of reserve reversals related to our finance receivable provision, primarily related to a reserve release in the U.S.

due to the favorable reassessment of the credit exposure on a large customer receivable balance after a contract amendment, which improved our credit position.

During the five-year period ended December 31, 2025, our reserve for doubtful accounts ranged from 4.1% to 4.7% of gross receivables.

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We sponsor defined benefit pension plans in various forms in several countries covering employees who meet eligibility requirements.

Where legally possible, we have amended our major defined benefit pension plans to freeze current benefits and eliminate benefit accruals for future service, including our U.S.

Where legally possible, we have amended our major defined benefit pension plans to freeze current benefits and eliminate benefit accruals for future service, including our legacy Xerox and Lexmark U.S.

defined benefit plans, the Canadian Salary Pension Plan and the U.K.

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Differences between these assumptions and actual experiences are reported as net actuarial gains and losses and are subject to amortization to net periodic benefit cost over future periods.

Cumulative net actuarial losses for our defined benefit pension plans of $2.1 billion as of December 31, 2024 decreased by $177 million from December 31, 2023, primarily due to the impact of higher discount rates and the resultant decrease of the Projected Benefit Obligation (PBO), the amortization of actuarial losses, and U.S.

settlement losses, as well as the impact of favorable currency, partially offset by the loss from actual returns.

Cumulative net actuarial losses for our defined benefit pension plans of $2.0 billion as of December 31, 2025 decreased by $121 million from December 31, 2024, primarily due to gains from actual returns, and amortization of actuarial losses as well as the impact of higher discount rates in the U.K.

and the resultant change to the projected benefit obligation (PBO), partially offset by the adverse impact of currency.

The total actuarial loss at December 31, 2025 is subject to offsetting gains or losses in the future due to both changes in actuarial assumptions and future experience and will be recognized in future periods through amortization or settlement losses.

We used a consolidated weighted average expected rate of return on plan assets of 5.6% for 2025, 5.2% for 2024 and 5.2% for 2023, on a worldwide basis.

During 2024, the actual return on plan assets was a loss of $98 million as compared to an expected return of $264 million, with the difference primarily due to lower returns than expected for fixed income holdings, most notably in the U.S.

Plans, and for the group annuity contracts held in our U.K.

Plan due to rising interest rates.

When estimating the 2025 expected rate of return, in addition to assessing recent performance, we considered the historical returns earned on plan assets, the rates of return expected in the future, particularly in light of current economic conditions, and our investment strategy and mix with respect to the plans' assets.

The weighted average expected rate of return on plan assets we will use in 2025 is 5.6% which is 0.4% higher as compared to 2024, as a result of the increase in yields on fixed income investments.

During 2025, the actual return on plan assets was $398 million as compared to an expected return of $320 million, primarily reflecting higher than expected returns on equity investments.

When estimating the 2026 expected rate of return, in addition to assessing recent performance, we

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considered the historical returns earned on plan assets, the rates of return expected in the future, particularly in light of current economic conditions, and our investment strategy and mix with respect to the plans' assets.

The weighted average expected rate of return on plan assets we will use in 2026 is 5.7% which is 0.1% higher as compared to 2025, as a result of the increase in yields on fixed income investments.

Another significant assumption affecting our defined benefit pension obligations and the net periodic benefit cost is the rate that we use to discount our future anticipated benefit obligations.

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The consolidated weighted average discount rate we used to measure our pension obligations as of December 31, 2025 and to calculate our 2026 expense was 5.0%;

the rate used to calculate our obligations as of December 31, 2023 and our 2024 expense was 4.4%.

The increase reflects higher interest rates in both the U.S.

the consolidated weighted average discount rate we used to calculate our obligations as of December 31, 2024 and our 2025 expense was 4.9%.

Holding all other assumptions constant, the following table summarizes the estimated impacts of a 0.25% change in the discount rate and a 0.25% change in the expected return on plan assets:

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Since settlement is dependent on an employee's decision and election, the level of settlements and the associated losses can fluctuate significantly from period to period.

During 2024, lump-sums under the U.S.

primary domestic plans became limited to less than the full benefit obligation, and as a result, settlement expense for 2024 was less than historic levels.

During 2024, lump-sums under the legacy Xerox U.S.

primary domestic plans became limited to less than the full benefit obligation, and as a result, settlement expense for 2025 and 2024 was less than historic levels.

During the three years ended December 31, 2025, 2024 and 2023, U.S.

plan settlements were approximately $20 million, $70 million and $240 million, respectively, and the associated settlement losses on those plan settlements were $5 million, $19 million and $56 million, respectively.

plan settlements were approximately $5 million, $20 million and $70 million, respectively.

For the year ended December 31, 2025, there was no associated settlement losses on those plan settlements.

For the years ended December 31, 2024 and 2023 the associated settlement losses on those plan settlements was $5 million and $19 million, respectively.

Settlements for the year ended December 31, 2025 only reflected settlements related to the legacy Lexmark U.S.

primary domestic plans.

The following is a summary of our benefit plan expenses for the three years ended December 31, 2025, 2024 and 2023, as well as estimated amounts for 2026:

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(2) Includes settlement expense of $0 million, $5 million and $19 million for the three years ended December 31, 2025, 2024 and 2023, respectively.

(3) The decrease in 2025 is due to the suspension of the full year employer matching contribution for the legacy Xerox U.S.

based 401(k) plan for salaried (non-union) employees.

The employer matching contribution was reinstated for 2026 and began to be paid on a per-pay-period basis.

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The following is a summary of our benefit plan funding for the three years ended December 31, 2025, 2024 and 2023, as well as estimated amounts for 2026:

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Total Benefit Plan Funding $ 205 $ 187 $ 185 $ 142

(1) The difference of $20 million between the 2022 funded amount of $17 million and the 2022 expense of $37 million is due to employer matching contributions for our U.S.

based 401(k) savings plans for salaried employees being expensed in 2022 as earned and contributed in January of 2023.

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(1) The decrease in 2025 is due to the suspension of the full year employer matching contribution for the legacy Xerox U.S.

based 401(k) plan for salaried (non-union) employees.

The employer matching contribution was reinstated for 2026 and began to be paid on a per-pay-period basis

Approximately $89 million of the U.S.

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However, once the next actuarial valuations and projected results are available, actual contributions required to meet minimum funding requirements will be determined and finalized and may change from the current estimate.

The decrease in non-U.S.

Defined benefit pension plan contributions in 2023 is due to no further contributions to our U.K.

defined benefit pension plan being required after October 2022 following agreement of the triennial valuation of the Plan with the Plan Trustees.

Refer to Note 18 - Employee Benefit Plans in the Consolidated Financial Statements for additional information regarding defined benefit pension plan assumptions, expense and funding.

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Refer to Note 19 - Income and Other Taxes in the Consolidated Financial Statements for additional information regarding the valuation allowance against our deferred tax assets.

Due to the lower-than-expected actual results for the third quarter 2024 combined with the lower-than-expected forecast for full-year results, a valuation allowance of approximately $161 million was recorded, primarily related to certain deferred tax assets in a non-U.S.

tax jurisdiction, as we concluded that it is more-likely-than-not that those deferred tax assets will not be realized in the ordinary course of operations.

This assessment was based on the available positive and negative evidence at September 30, 2024, including scheduling of deferred tax liabilities and projected income from operating activities.

Due to a change in certain tax planning strategies during the first quarter 2025 and lower than expected actual and estimated full year results as of the third quarter 2025, we concluded that certain deferred tax assets in the U.S.

are not more-likely-than-not to be realized.

This assessment was based on the available positive and negative evidence, including scheduling of deferred tax liabilities and projected income from operating activities.

Accordingly, a valuation allowance of approximately $59 million and $478 million was recorded in the first quarter 2025 and the third quarter 2025, respectively.

The amount of the net deferred tax assets considered realizable, however, could change in the near term if additional objective information becomes available in the future including if income or income tax rates are higher or lower than currently estimated, or if there are differences in the timing or amount of future reversals of existing taxable or deductible temporary differences.

In the event we were to determine that there is a change in the realizability of our deferred tax assets in the future, an adjustment to the valuation allowance would be recorded to income in the period such determination was made.

Our valuation allowance changed through income tax expense by approximately $195 million, $(4) million and $7 million for the years ended December 31, 2024, 2023 and 2022, respectively.

There were other changes to our valuation allowance, including the effects of currency, of $(59) million, $13 million and $2 million for the years ended December 31, 2024, 2023 and 2022, respectively.

These did not affect income tax expense in total as there was a corresponding adjustment to Deferred tax assets or Other comprehensive loss.

The following is a summary of gross deferred tax assets and the related valuation allowances for the years ended December 31, 2024, 2023 and 2022:

Our valuation allowance changed through income tax expense by approximately $618 million, $195 million and $(4) million for the three years ended December 31, 2025, 2024 and 2023, respectively.

There were other changes to our valuation allowance of $804 million, $(59) million and $13 million for the three years ended December 31, 2025, 2024 and 2023, respectively, including the effects of currency.

For the year ended December 31, 2025, the valuation allowance was also impacted by the Lexmark Acquisition.

These impacts did not affect income tax expense.

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The following is a summary of gross deferred tax assets and the related valuation allowances:

Year Ended December 31,

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Our ongoing assessments of the more-likely-than-not outcomes of the examinations and related tax positions require judgment and can materially increase or decrease our effective tax rate, as well as impact our operating results.

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Unrecognized tax benefits were $35 million, $95 million and $140 million at December 31, 2025, 2024 and 2023, respectively.

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Management’s estimates of fair value are based upon assumptions believed to be reasonable and when appropriate, include assistance from independent third-party valuation firms.

During the measurement period, which is up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to Goodwill.

In connection with the acquisition of Lexmark, management used estimates and assumptions to determine the fair values of the assets acquired and liabilities assumed as of the acquisition date.

These estimates are inherently uncertain and involve significant judgment about future events and circumstances.

Accordingly, actual results may differ from these estimates.

The most significant assumptions and estimates used in the valuation process included projected annual revenues which were derived from estimates of customer attrition, projected expenses, projected operating margins, and the discount rate.

During the measurement period, which is up to one year from the acquisition date, we have recorded and may continue to record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to Goodwill.

Upon the conclusion of the measurement period, any subsequent adjustments are recorded to earnings.

Refer to Note 6 - Acquisitions and Divestitures in the Consolidated Financial Statements for additional information regarding the allocation of the purchase price consideration for our acquisitions.

As a result of the Lexmark Acquisition in 2025 as well as other acquisitions including ITsavvy Acquisition Company, Inc (ITsavvy) in 2024, we have a significant amount of Goodwill.

Our Goodwill, net balance was $2.2 billion at December 31, 2025.

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A reporting unit is the same as, or one level below, an operating segment.

The Company has two operating/reportable segments - Print and Other, and XFS.

We determined that the Print and Other, and XFS operating segments were also our reporting units for Goodwill assessment purposes.

The Goodwill, net balance is fully allocated to the Print and Other reporting unit and no Goodwill has been allocated to the XFS reporting unit.

As such, it was determined that there are two reportable segments and two reporting units - Print and Other, and IT Solutions.

Prior to this change, the Company had two reportable segments - Print and Other, and Xerox Financial Services (XFS).

We determined that the Print and Other and IT Solutions operating segments were also our reporting units for Goodwill assessment purposes.

At December 31, 2025, $1,844 million and $378 million of Goodwill was allocated to the reporting units within our Print and Other and IT Solutions segments, respectively.

The process of evaluating the potential impairment of Goodwill is highly subjective and requires significant judgment.

Our review of impairment starts with an assessment of qualitative factors to determine whether events or circumstances lead to a determination that it is more-likely-than-not that the fair value of the Company is less than the net book value.

Our qualitative assessment of the recoverability of Goodwill, whether performed annually or based on specific events or circumstances, considers various macroeconomic, industry-specific and company-specific factors.

Our qualitative assessment of the recoverability of Goodwill, whether performed annually or

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based on specific events or circumstances, considers various macroeconomic, industry-specific and company-specific factors.

These factors include:

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The selected multiples consider our reporting units' growth, profitability, size and risk relative to those of the selected publicly traded companies.

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Goodwill Impairment and Annual Assessment

In addition, during 2024, the Company experienced a decline in its stock price and market capitalization, which became significant and sustained during the third quarter.

In estimating the fair value of the Print and Other reporting unit, we reconciled the fair value of the Company to the Company's market capitalization, and our analysis reflected a 75/25 allocation between the income and market approach, respectively, and the application of a discount rate applied to our projected cash flows of approximately 12.00%.

The weighting between the income and market approach was consistent with our assessment in the third quarter 2022 (the last time a quantitative assessment was completed), and reflects the inherent limitation of a market comparison.

The applied discount rate was 125 basis points higher than the rate applied in the third quarter 2022 assessment primarily due to higher market interest rates.

We believe that the discount rate applied was reasonable based on the estimated capital costs of applicable market participants and an appropriate company-specific risk premium that reflected current market and industry conditions.

In performing our quantitative assessment for the third quarter 2024, the Company believes it made reasonable estimates based on the facts and circumstances that were available as of the reporting date.

However, the assessment of fair value includes assumptions that are subject to risk and uncertainty.

Estimated forecasts are dependent on subjective factors including the timing and amount of future cash flows and the discount rate.

If the Company's future performance varies from current expectations, assumptions, or estimates, including those assumptions relating to interest rates, inflationary pressure on product and labor costs, execution of Reinvention, and geopolitical uncertainty, this may impact the impairment analysis and could reduce the underlying cash flows used to estimate fair values and result in a decline in fair value that may trigger future impairment charges.

Annual Assessment

In connection with the Company's 2025 annual Goodwill impairment test, management performed a qualitative assessment of our Goodwill and concluded that Goodwill was not impaired.

In performing the qualitative assessment, the Company considered the excess of fair value over carrying value that was determined as of January 1, 2025 - the date on which reporting units were reassessed - as well as relevant events and circumstances.

These factors included macroeconomic conditions, industry and market trends, overall financial performance, cost factors, company-specific developments, including the impacts of higher valuation allowances against our deferred tax assets, legal and regulatory factors, and the Company's market capitalization relative to its net book value.

Subsequent to the Company's annual Goodwill impairment test conducted in the fourth quarter of 2025, the Company did not identify events or changes in circumstances that would have required an additional impairment assessment.

Refer to Note 12 - Goodwill, Net and Intangible Assets, Net in the Consolidated Financial Statements for additional information regarding Goodwill.

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Revenue Results Summary

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Revenue for the three years ended December 31, 2025, 2024 and 2023 was as follows:

Revenue % Change CC % Change % of Total Revenue

Revenue % Change CC % Change Pro Forma % Change (1)

% of Total Revenue

(in millions) 2025 2024 2023 2025 2024 2025 2024 2025 2025 2024 2023

4 unchanged sentences

Sales $ 3,283 $ 2,378 $ 2,720 38.1 % (12.6) % 37.6 % (12.3) % (7.2) %

IT Products (2)

(523) (232) (256) 125.4 % (9.4) % 123.7 % (9.5) % (7.6) %

Supplies, paper and other sales (1,272) (768) (809) 65.6 % (5.1) % 65.9 % (5.0) % (5.8) %

Equipment sales $ 1,488 $ 1,378 $ 1,655 8.0 % (16.7) % 7.1 % (16.5) % (8.7) %

Services, maintenance and rentals $ 3,692 $ 3,975 $ 4,100 (7.1) % (3.0) % (7.1) % (3.0) %

Services, maintenance, rentals and other (3)(4)

$ 3,739 $ 3,843 $ 4,166 (2.7) % (7.8) % (3.5) % (7.7) % (8.1) %

IT Products (2)

523 232 256 125.4 % (9.4) % 123.7 % (9.5) % (7.6) %

Supplies, paper and other sales 1,272 768 809 65.6 % (5.1) % 65.9 % (5.0) % (5.8) %

Financing 151 191 207 (20.9) % (7.7) % (20.9) % (8.0) %

Post sale revenue $ 5,534 $ 4,843 $ 5,231 14.3 % (7.4) % 13.6 % (7.3) % (7.4) %

Print and Other $ 6,272 $ 5,864 $ 6,523 7.0 % (10.1) % 6.1 % (13.3) % (8.2) % 89 % 94 % 95 %

XFS 357 401 393 (11.0) % 2.0 % 6 % 6 % 5 %

IT Solutions 761 358 363 112.6 % (1.4) % 147.2 % (1.8) % (0.8) % 11 % 6 % 5 %

Intersegment elimination (5)

(71) (86) (90) (17.4) % (4.4) % (1) % (1) % (1) %

(11) (1) — NM NM NM NM NM — % — % — %

Total Revenue (6)

2 unchanged sentences

CC - See "Currency Impact" section for description of constant currency.

(1) Reflects revenue, primarily commissions and other payments, made by the XFS segment to the Print and Other segment for the lease of Xerox equipment placements.

(1) Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITsavvy was acquired on January 1, 2023.

Refer to the "Pro Forma Basis" section for an explanation of this measure.

(2) IT Products reflect IT hardware, software solutions and services provided by the IT Solutions segment.

Refer to Reportable Segments - IT Solutions for further information

(3) Includes financing revenue generated from direct and indirectly financed Xerox equipment sale transactions of $86 million, $106 million, $130 million for the three years ended December 31, 2025, 2024 and 2023, respectively.

(4) Services, maintenance, rentals and other revenue include IT services support of $227 million, $125 million and $107 million for the three years ended December 31, 2025, 2024 and 2023, respectively, provided by our IT Solutions segment.

(5) Primarily reflects IT hardware, software solutions and services sold by the IT Solutions segment to the Print and Other segment.

(6) Refer to the "Reportable Segments" section.

Total revenue increased 12.9% for the year ended December 31, 2025 including a 15.5-percentage point benefit and an 6.5-percentage point benefit from the Lexmark Acquisition and ITsavvy, respectively, as well as a 0.7-percentage point favorable impact from currency.

The increase was partially offset by lower equipment sales and post sale revenue for legacy Xerox.

Total revenue for legacy Xerox declined 9.1-percentage points in actual currency primarily due to lower installations, managed print services 1 , supplies revenue, and legacy IT Solutions revenue, as well as the adverse impact from Reinvention-related actions, and macroeconomic and policy-related uncertainty.

On a pro forma 2 basis, 2025 total revenue declined 7.6% as compared to 2024 due to the impacts noted above, as well as backlog 3 fluctuations.

Total revenue decreased 9.7% for the year ended December 31, 2024 reflecting a 0.7-percentage point benefit from acquisitions, as well as a 0.2-percentage point adverse impact from currency.

The decrease in total revenue was primarily due to lower post sale revenue, reflecting lower page volumes associated with our managed print services 1 contracts, intentional reductions in non-core revenue, including lower margin IT endpoint device placements, Fuji royalty income, paper sales, and Finance income, as well as the effects of Reinvention actions, including geographic and offering simplification, and lower PARC revenue.

These negative impacts to post sale revenue were in part offset by the benefits of a partial quarter of ITsavvy, as well as higher supplies and digital and legacy managed IT services revenue.

These negative impacts to post sale revenue were in part offset by the benefits of a partial quarter of ITsavvy, as well as higher supplies and digital and legacy

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managed IT services revenue.

The decrease in total revenue also reflects lower equipment sales, resulting from an unfavorable mix, the effects of backlog fluctuations in the current and prior year, the decision to stop manufacturing certain high-end equipment, the effects of geographic simplification, and the impacts from the implementation of organizational model changes in the first half of 2024.

Equipment revenue declined across all product groups, and was most pronounced in Mid-range.

Total revenue decreased 3.1% for the year ended December 31, 2023 and included a 0.8-percentage point benefit from acquisitions and a 0.2-percentage point benefit from currency.

The decrease in revenue was attributable to lower post sale revenue, reflecting the intentional reduction of non-strategic revenue - paper and IT endpoint device placement sales, as well as the termination of Fuji royalty income and the donation of PARC.

Contractual print services declined modestly, due to lower production print activity, our exit from Russ ia and a shift in distribution strategy for one of our European markets, partially offset by Digital and Managed IT Services revenue growth, which includes the benefits from an acquisition.

The decrease in Post sale revenue was partially offset by growth in equipment sales revenue, reflecting stable demand, higher pricing, and favorable mix, as well as improved product supply availability and the associated year-over-year reduction in backlog.

_____________

(1) Previously known as contractual print services, and includes revenues from service, maintenance and rentals.

(1) Includes revenues from service, maintenance and rentals.

IT Solutions and digital services are not included in managed print services.

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(2) Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITsavvy was acquired on January 1, 2023.

Refer to the "Pro Forma Basis" section for an explanation of this measure.

(3) Order backlog is measured as the value of unfulfilled sales orders, shipped and non-shipped, received from our customers waiting to be installed, including orders with future installation dates.

It includes printing devices as well as IT hardware.

Total revenues included the following:

Post sale revenue

Post sale revenue reflects revenues from managed print services 1 , supplies and financing.

Post sale revenue reflects revenues from managed print services 1 , supplies, paper and financing.

These revenues are associated not only with the population of devices in the field, which is affected by installs and removals, but also by the page volumes generated from the usage of such devices and the revenue per printed page.

Post sale revenue also includes revenues from IT Solutions, comprised of IT hardware and associated services, Digital services, as well as gains, commissions, and servicing revenue associated with the sale of finance receivables.

For the year ended December 31, 2024, Post sale revenue decreased 7.4% as compared to the prior year, which included a 0.9-percentage point benefit from the recent acquisition of ITsavvy, partially offset by a 0.1-percentage point adverse impact from currency.

For the year ended December 31, 2023, Post sale revenue decreased 4.6% as compared to the prior year and included a 1.1-percentage point benefit from an acquisition, as well as a 0.2-percentage point benefit from currency.

Post sale revenue is comprised of the following:

Services, maintenance and rentals revenue includes maintenance revenue (including bundled supplies), the services portion of our IT Solutions offering, digital services revenue and rentals, and other revenues.

Post sale revenue also includes revenues from IT Solutions, comprised of IT products and services, Digital services and gains, commissions, and servicing revenue associated with the sale of finance receivables.

Post sale revenue for the three years ended December 31, 2025, 2024 and 2023 reflected the following:

Services, maintenance, rentals and other revenue includes maintenance revenue (including bundled supplies), the services portion of our IT Solutions offering, digital services revenue, rentals, financing, and other revenues.

• For the year ended December 31, 2025, these revenues decreased 2.7% as compared to the prior year and included a 4.3-percentage point benefit and a 2.8-percentage point benefit from the Lexmark Acquisition and ITsavvy, respectively, as well as a 0.8-percentage point benefit from currency.

The decline in constant currency 3 for the year ended December 31, 2025 reflects declines of legacy Xerox, partially offset by the benefit of these acquisitions.

Excluding the impact of the acquisitions, revenue declined 9.8% in actual currency as compared to the prior year due primarily to managed print services 1 revenue which declined high-single digits, reflecting lower outsourcing, print services, and rental revenue, as well as the effects of geographic and offering simplification.

The decline is also due to lower financing revenue reflecting a continued reduction in the average finance receivables balance associated with the sales of finance receivables.

These negative impacts were partially offset by growth in digital services revenue.

On a pro forma 2 basis revenue for the year ended December 31, 2025 decreased 8.1% as compared to the prior year, due to the impacts noted above.

• For the year ended December 31, 2024, these revenues decreased 7.8% as compared to the prior year period and included no impact from currency.

Managed print services 1 revenue declined year-over year driven by lower outsourcing and print service revenue, including the effects of geographic simplification, as well as lower rental revenue, the termination of Fuji royalty income and the donation of PARC.

These impacts were partially offset by higher organic and inorganic managed IT Solutions revenue, including the benefits of a partial quarter of ITsavvy results, as well as higher digital services revenue, and gains, commission and servicing revenue associated with the sale of finance receivables.

• For the year ended December 31, 2023, these revenues decreased 3.0% as compared to the prior year period and included no impact from currency.

The decline in revenues was due in part to the termination of Fuji royalty income and the donation of PARC.

Contractual print services revenue decreased modestly as compared to the prior year period, primarily reflecting declines in production print activity, our exit from Russia and the shift in distribution strategy for one of our European markets.

These declines were partially offset by revenue growth in Digital and Managed IT Services, which includes the benefits of a recent acquisition, and price increases, as well as gains and commissions, and servicing revenue on sales of finance receivables.

Supplies, paper and other sales includes unbundled supplies, IT hardware and other sales.

• For the year ended December 31, 2024, these revenues decreased 6.1% as compared to the prior year, including a 2.1-percentage point benefit from the recent acquisition of ITsavvy, as well as a 0.4-percentage point adverse impact from currency.

The decline at constant currency 2 primarily reflecting lower sales of non-strategic, lower margin IT endpoint device placements and paper sales, as well as the effects of geographic simplification.

These declines were partially offset by the benefit of revenue from the ITsavvy acquisitions, and higher supplies revenue.

• For the year ended December 31, 2023, these revenues decreased 9.4% as compared to the prior year, including a 1.1-percentage point benefit from currency, primarily reflecting lower paper sales, as well as IT hardware, particularly endpoint devices, and unbundled supplies revenue.

Paper and IT endpoint sales are low margin and non-strategic, and are expected to be reduced further over time.

Financing revenue is generated from direct and indirect financing of Xerox equipment.

• For the year ended December 31, 2024, Financing revenue decreased 20.9% as compared to the prior year, including no impact from currency.

The decline reflects a continued reduction of the average finance receivables balance in 2024, resulting from the sales of finance receivables during 2023 and 2024 to HPS Investment Partners (HPS) and De Lage Landen Financial Services Canada Inc.

(DLL), as well as lower originations.

Finance receivables are approximately $800 million lower at December 31, 2024 as compared to December 31, 2023.

• For the year ended December 31, 2023, Financing revenue decreased 7.7% as compared to the prior year, including a 0.3-percentage point benefit from currency.

The decline at constant currency 2 reflects a reduction of the average finance receivables balance during 2023 as a result of the sales of finance receivables to HPS Investment Partners (HPS).

Finance receivables were approximately $600 million lower in December of 2023 as compared to December of 2022.

_____________

(1) Previously known as contractual print services, and includes revenues from service, maintenance and rentals.

IT solutions and digital services are not included in managed print services.

(2) See "Currency Impact" section for description of constant currency.

The decline is also due to lower financing revenue reflecting a continued reduction in the average finance receivables balance associated with the sales of finance receivables, and lower originations.

These impacts were partially offset by higher organic and inorganic IT Solutions revenue, including the benefits of a partial quarter of ITsavvy results, as well as higher digital services revenue, and gains, commission and servicing revenue associated with the sale of finance receivables.

IT products revenue includes the sale of notebooks, network communications and other endpoint devices, desktop computers and other IT hardware.

Software product sales include deployments of cloud and security solutions, endpoint security application suites, operating systems, other applications and network management solutions.

• For the year ended December 31, 2025, these revenues increased 125.4% as compared to the prior year, and included a 128.1-percentage point benefit from the acquisition of ITsavvy, and a 1.7-percentage point benefit from currency.

Excluding the impact of ITsavvy, revenue decreased 2.7% in actual currency as compared to the prior year due to a decline in the legacy Xerox IT Solutions business, which was partially attributable to the timing of large product placements in the prior year, a larger mix of revenue subject to net classification and revenue deferrals, the adverse impact to deals as a result of the government shutdown in 2025, and component cost increases.

On a pro forma 2 basis, revenue for the year ended December 31, 2025 decreased 7.6%.

• For the year ended December 31, 2024, these revenues decreased 9.4% as compared to the prior year period, and included a 13.9-percentage point benefit from the acquisition of ITsavvy, as well as a 0.1-percentage point benefit from currency.

Excluding the impact of ITsavvy, revenue decreased 23.3% in actual currency as compared to the prior year period due to a decline in the legacy Xerox IT Solutions business.

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Supplies, paper and other sales includes unbundled supplies, paper and other sales.

• For the year ended December 31, 2025, these revenues increased 65.6% as compared to the prior year period and included a 74.3-percentage point benefit from the Lexmark Acquisition and a 0.3-percentage point adverse impact from currency.

Excluding the impact of Lexmark, revenue declined 8.7% in actual currency as compared to the prior year due primarily to lower supplies revenue, as well as lower paper sales as a result of the sale of our European paper business.

On a pro forma 2 basis revenue for the year ended December 31, 2025 declined 5.8% as compared to the prior year.

• For the year ended December 31, 2024, these revenues decreased 5.1% as compared to the prior year, including a 0.1-percentage point adverse impact from currency.

The decline at constant currency 3 primarily reflects lower sales of non-strategic, lower margin IT endpoint device placements and paper sales, as well as the effects of geographic simplification.

These declines were partially offset by the benefit of revenue from the ITsavvy acquisition, and higher supplies revenue.

Equipment sales revenue

Equipment sales revenue decreased 16.7% for the year ended December 31, 2024 as compared to the prior year, including a 0.2-percentage point adverse impact from currency.

The decrease in constant currency 1 was primarily impacted by unfavorable mix, as well as the effects of backlog fluctuations in the current and prior year, the decision to stop manufacturing certain high-end equipment, the effects of geographic simplification, and the impacts from the organizational changes implemented in the first half of 2024.

Revenue declined across all product groups, and was most pronounced in Mid-range, reflecting declines in both black-and-white and color installations, with a mix toward lower-priced A3 color multi-function printers.

For the year ended December 31, 2023, Equipment sales revenue increased 1.9% as compared to the prior year, including a 0.2-percentage point benefit from currency.

The increase in constant currency 1 reflects improvement in product availability for higher-margin mid-range and high-end devices, in the Americas region, as well as recent pricing actions and stable demand conditions.

These increases were partially offset by lower revenue from the Entry product group, primarily in EMEA, as compared to the prior year period.

See Segment Review - Print and Other below for additional discussion on Equipment sales revenue.

Refer to the Segment Review - Print and Other discussion below for additional discussion on Equipment sales revenue.

_______________

(1) See "Currency Impact" section for description of constant currency.

(1) Includes revenues from service, maintenance and rentals.

IT Solutions and digital services are not included in managed print services.

(2) Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITsavvy was acquired on January 1, 2023.

Refer to the "Pro Forma Basis" section for an explanation of this measure.

(3) See "Currency Impact" section for a description of Constant Currency.

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Costs, Expenses and Other Income

3 unchanged sentences

(in millions) 2025 2024 2023 2025 B/(W)

2025 Pro Forma B/(W) (1)

Gross Profit $ 1,901 $ 1,960 $ 2,314 $ (59) $ (354) $ (314)

15 unchanged sentences

_____________

(1) 2024 includes a pre-tax non-cash Goodwill impairment charge of $1,058 million, 2023 includes the pre-tax PARC donation charge of $132 million, and 2022 includes a pre-tax non-cash Goodwill impairment charge of $412 million.

(1) Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITsavvy was acquired on January 1, 2023.

Refer to the "Pro Forma Basis" section for an explanation of this measure.

(2) 2024 includes a pre-tax non-cash Goodwill impairment charge of $1,058 million, and 2023 includes the pre-tax PARC donation charge of $132 million.

(3) Refer to the "Non-GAAP Financial Measures" section for an explanation of the non-GAAP financial measure.

Total gross margin for the year ended December 31, 2025 of 27.1% decreased 4.4-percentage points compared to 2024, and included an approximate 1.4-percentage point adverse impact and an approximate 0.5-percentage point adverse impact related to the Lexmark Acquisition and ITsavvy, respectively.

Excluding the impact of these acquisitions, gross margin declined 2.5-percentage points.

The decrease primarily reflects lower revenue and gross profit, including the adverse impact related to unfavorable product mix, primarily due to lower services, maintenance, rentals and other revenues, and lower page volumes, as well as product-related cost increases and the adverse impact related to tariffs.

These impacts were partially offset by the benefits associated with Reinvention-related cost and productivity actions, and recent pricing actions.

On a pro forma 1 basis, gross margin for the year ended December 31, 2025 of 28.6% decreased by 1.4-percentage points due to the impacts noted above.

Total gross margin for the year ended December 31, 2024 of 31.5% decreased 2.1-percentage points compared to 2023, primarily reflecting lower revenue and gross profit, primarily due to charges associated with the exit of certain production print manufacturing operations, which had a 0.8-percentage point unfavorable impact on gross margin, as well as higher transportation and product costs, an unfavorable equipment mix and lower print volumes.

These impacts were partially offset by the benefits associated with recent Reinvention-related cost and productivity actions and currency.

Total gross margin for the year ended December 31, 2023 of 33.6% increased 1.0-percentage points compared to 2022, primarily reflecting lower supply chain-related costs, favorable equipment mix, and the benefits associated with recent pricing and cost and productivity actions, as well as financing gains and commissions, and servicing revenues on sales of finance receivables.

These favorable impacts were partially offset by lower revenue, which includes the termination of Fuji royalty income, and price increases from a product supplier, as well as lower financing margin.

Equipment gross margin for the year ended December 31, 2024 of 30.2% decreased 3.5-percentage points compared to 2023, primarily reflecting lower revenue and gross profit, as well as higher product and transportation costs, the exit of certain production print manufacturing operations, and unfavorable product and channel mix.

Equipment gross margin for the year ended December 31, 2025 of 21.4% decreased 8.8-percentage points compared to 2024, and included a 3.1-percentage point adverse impact from the Lexmark Acquisition.

Excluding the impact of Lexmark, equipment gross margin declined 5.7-percentage points.

The decrease reflects lower revenue and gross profit, as well as the adverse impact related to product cost increases, incremental tariff-related costs, and unfavorable product mix.

These impacts were partially offset by recent pricing initiatives and lower freight costs.

On a pro forma 1 basis, equipment gross margin for the year ended December 31, 2025 of 19.7% increased 1.9 -percentage points.

Equipment gross margin for the year ended December 31, 2024 of 30.2% decreased 3.5-percentage points as compared to 2023, primarily reflecting lower revenue and gross profit, as well as higher product and transportation costs, the exit of certain production print manufacturing operations, and unfavorable product and channel mix.

These impacts were partially offset by currency.

Equipment gross margin for the year ended December 31, 2023 of 33.7% increased 8.6-percentage points as compared to 2022, reflecting higher revenue, a favorable product and channel mix, lower supply chain-related costs, and the benefits associated with recent pricing actions.

These favorable impacts were partially offset by price increases from a product supplier.

Post sale gross margin for the year ended December 31, 2024 of 31.9% decreased 1.7-percentage points compared to 2023, reflecting lower revenue, including lower page volumes, lower gross profit, and charges associated with the Company's Reinvention, primarily related to the exit of certain production print manufacturing operations, which had a 1.0-percentage point unfavorable impact on gross margin.

These impacts were partially offset by the benefits associated with recent Reinvention-related cost and productivity actions and favorable currency.

Post sale gross margin for the year ended December 31, 2023 of 33.6% decreased 1.3-percentage points compared to 2022, reflecting lower revenue due to the termination of Fuji royalty income, and lost revenues as a result of the donation of PARC, as well as a lower financing margin.

Financing margin decreased primarily due to higher interest costs.

These impacts were partially offset by the benefits of associated cost and productivity actions and lower supply chain-related costs, as well as gains, commissions, and servicing revenues on sales of finance receivables.

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Post sale gross margin for the year ended December 31, 2025 of 28.6% decreased 3.3-percentage points compared to 2024, which included an approximate 0.9-percentage point adverse impact and an approximate 0.8-percentage point adverse impact related to the Lexmark Acquisition and ITsavvy, respectively.

Excluding the impact of these acquisitions, post sale gross margin declined approximately 1.6-percentage points.

The decrease primarily reflects lower revenue and gross profit, including the adverse impact related to unfavorable revenue mix, primarily due to lower services, maintenance, rentals and other revenues and lower page volumes, as well as the adverse impact related to cost increases and incremental tariff-related costs.

Partially offsetting these impacts were benefits associated with Reinvention-related cost and productivity actions.

On a pro forma 1 basis, post sale gross margin for the year ended December 31, 2025 of 31.0% decreased 2.4-percentage points

These impacts were partially offset by the benefits associated with Reinvention-related cost and productivity actions and favorable currency.

_____________

(1) Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITsavvy was acquired on January 1, 2023.

Refer to the "Pro Forma Basis" section for an explanation of this measure.

Research, Development and Engineering Expenses (RD&E)

Year Ended December 31, Change

(in millions) 2024 2023 2022 2024 2023

R&D $ 142 $ 174 $ 246 $ (32) $ (72)

Sustaining engineering 49 55 58 (6) (3)

Total RD&E Expenses $ 191 $ 229 $ 304 $ (38) $ (75)

RD&E as a percentage of revenue for the year ended December 31, 2025 of 3.3% increased 0.2-percentage points as compared to 2024, and included a 0.5-percentage point adverse impact from the Lexmark Acquisition and a 0.2-percentage point benefit from ITsavvy.

The increase, as compared to the prior year, reflected spending that outpaced the increase in revenue.

RD&E of $230 million for the year ended December 31, 2025 increased $39 million as compared to 2024.

The increase was primarily due to Lexmark Acquisition, partially offset by lower spend in print and print services, as well as productivity and cost savings related to the Company's Reinvention.

On a pro forma 1 basis, RD&E decreased by $26 million for the year ended December 31, 2025 as compared to the prior year due to the impacts noted above.

RD&E as a percentage of revenue for the year ended December 31, 2024 of 3.1% decreased 0.2-percentage points as compared to 2023, and RD&E of $191 million for the year ended December 31, 2024, decreased $38 million as compared to 2023.

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The decrease also reflected the strategic decision to donate PARC in 2023.

RD&E as a percentage of revenue for the year ended December 31, 2023 of 3.3% decreased 1.0-percentage point as compared to 2022, and RD&E of $229 million for the year ended December 31, 2023, decreased $75 million as compared to 2022.

The decrease was primarily due to the strategic decision to donate PARC and the spin-off, exit, or shutdown of certain other RD&E related activities or businesses.

The lower spending in innovation reflects decisions which provide greater focus and financial flexibility to pursue growth opportunities adjacent to our core operations within Print, Digital and Managed IT services.

_____________

(1) Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITsavvy was acquired on January 1, 2023.

Refer to the "Pro Forma Basis" section for an explanation of this measure.

Selling, Administrative and General Expenses (SAG)

SAG as a percentage of revenue of 24.7% increased 0.1-percentage points for the year ended December 31, 2024 as compared to 2023, primarily due to lower revenue, as well as higher bad debt expense, which were partially offset by lower selling and other administrative and general expenses.

SAG expenses of $1,537 million for the year ended December 31, 2024 were $159 million lower than 2023, primarily reflecting productivity and cost savings related to the Company's Reinvention, as well as, lower incentive compensation expense, IT expenses, outsourcing costs, commission payments, litigation expense, and advertising costs, as well as the strategic decision to donate PARC in the prior year.

SAG as a percentage of revenue of 23.6% decreased 1.1-percentage points for the year ended December 31, 2025 as compared to 2024, including a 0.9-percentage point benefit from both the Lexmark Acquisition and ITsavvy, respectively.

The decrease reflects higher revenues, which outpaced the increase in SAG spending, and lower bad debt expense.

SAG expenses of $1,654 million for the year ended December 31, 2025 were $117 million higher than 2024, primarily due to expenses related to the Lexmark Acquisition and ITsavvy, including post-acquisition expenses, including the settlement of pre-existing employment agreements, as well as other Reinvention-related investments, higher expense related to sales enablement and advertising, and the adverse impact of currency.

These adverse impacts were partially offset by productivity and cost savings related to the Company's Reinvention, lower incentive compensation and benefits expenses, and lower outsourcing costs.

On a pro forma 1 basis, SAG decreased $91 million for the year ended December 31, 2025 due to the impacts noted above, as well as lower post-acquisition expenses.

SAG as a percentage of revenue of 24.7% increased 0.1-percentage points for the year ended December 31, 2024 compared to 2023 primarily due to lower revenue, as well as higher bad debt expense, which were partially offset by lower selling and other administrative and general expenses.

SAG expenses of $1,537 million for the year ended December 31, 2024 were $159 million lower than 2023 primarily reflecting productivity and cost savings related to the Company's Reinvention, as well as, lower incentive compensation expense, IT expenses, outsourcing costs, commission payments, litigation expense, and advertising costs, as well as the strategic decision to donate PARC in

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the prior year.

These favorable impacts were partially offset by higher bad debt expense, the inclusion of a partial quarter of ITsavvy results and transaction-related expenses related to the recent acquisition of ITsavvy and expected acquisition of Lexmark, as well as other Reinvention-related investments, and unfavorable currency.

Bad debt expense for the year ended December 31, 2024 of $42 million increased $14 million as compared to 2023.

The increase reflects a reserve release in 2023 of approximately $12 million due to a favorable reassessment of the credit exposure on a large customer receivable balance, as well as an increased provision for aged accounts receivables in the current year.

The adverse impacts were offset by a lower finance receivable balance, as a result of sales of finance receivables in recent quarters to HPS Investment Partners and De Lage Landen Financial Services Canada Inc.

SAG as a percentage of revenue of 24.6% decreased 0.2-percentage points for the year ended December 31, 2023 compared to 2022.

SAG expenses of $1,696 million for the year ended December 31, 2023 were $64 million lower than 2022 primarily reflecting the prior year stock compensation expense of $21 million associated with the accelerated vesting of all outstanding equity awards in connection with the passing of Xerox Holding's former CEO.

SAG also benefited from productivity and cost savings, including savings related to restructuring actions, the strategic decision to donate PARC and other dispositions as well as a reduced investment in new businesses.

Additionally, the decrease in SAG reflected lower bad debt expense, lower supply chain-related costs, and the favorable true-up of prior year shared services contract costs.

These benefits were partially offset by higher incentive compensation expense and marketing expenses, and the impact of an acquisition.

Bad debt expense for the year ended December 31, 2023 of $28 million decreased $15 million as compared to the prior year, primarily due a lower finance receivable provision of $20 million partially offset by higher provision for trade receivables of $5 million.

The decrease in the 2023 finance receivable provision reflected a reserve release of approximately $12 million as a result of a favorable reassessment of the credit exposure on a large customer receivable balance as well as the benefits related to the sale of finance receivables on a non-recourse basis as part of our on-going finance receivables funding agreement.

The increase in the trade receivable provisions is partly due to an increase in aged receivables in the U.S.

The adverse impacts were offset by a lower finance receivable balance, reflecting sales of finance receivables to various funding partners.

We continue to monitor developments in future economic conditions, and as a result, our reserves may need to be updated in future periods.

As of December 31, 2024, on a trailing twelve-month basis, bad debt expense (excluding

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the reserve release in 2024) was approximately 1.9% of total receivables, as compared to approximately 1.3% for the prior year comparable period (excluding the reserve release of approximately $12 million in 2023), primarily due to a lower finance receivables balance of approximately $800 million at December 31, 2024.

As of December 31, 2025, on a trailing twelve-month basis, bad debt expense was approximately 1.5% of total receivables, as compared to approximately 1.9% for the prior year comparable period (excluding the reserve release in 2024) primarily reflecting lower bad debt expense.

Refer to Note 7 - Accounts Receivable, Net and Note 8 - Finance Receivables, Net in the Consolidated Financial Statements for additional information regarding our bad debt provision and related reserves.

_____________

(1) Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITsavvy was acquired on January 1, 2023.

Refer to the "Pro Forma Basis" section for an explanation of this measure.

Restructuring and Related Costs, Net

We incurred restructuring and related costs, net of $66 million, $112 million and $167 million for the three years ended December 31, 2025, 2024 and 2023, respectively.

These costs were primarily related to the implementation of initiatives under our business transformation projects to reduce and realign our cost structure to the changing nature of our business.

Restructuring and related costs, net reflect the following components:

Charges incurred for restructuring actions were associated with Reinvention initiatives and other transformation programs to reduce and realign our cost structure to the changing nature of our business, as well as our efforts to integrate and consolidate certain operations of the legacy Xerox and Lexmark businesses, and included the following:

Year Ended December 31,

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Total Restructuring and related costs, net $ 66 $ 112 $ 167

_____________

(1) Reflects net headcount reductions of approximately 1,365, 1,100, and 2,125 for the three years ended December 31, 2025, 2024 and 2023, respectively.

2024 Restructuring and related costs, net are associated with strategic actions taken as a result of the Company's Reinvention, primarily related to optimizing operations, the exit of certain production print manufacturing operations, and geographic simplification, as well as consulting and other costs associated with our initiatives.

Restructuring and severance costs for the year ended December 31, 2025, includes approximately $89 million for worldwide headcount reductions as a result of our efforts to integrate and consolidate certain operations of the legacy Xerox and Lexmark businesses.

(2) Impairments are net of cash receipts.

2025 Restructuring and related costs, net are primarily associated with actions to integrate the legacy Xerox and Lexmark businesses, as well as actions associated with Reinvention including the impairment of an operating lease ROU asset, as well as the sales of facilities in the U.S.

2025 actions impacted several functional areas, with approximately 45% focused on gross margin improvements, approximately 50% focused on SAG reductions, and the remainder focused on RD&E enhancements.

We expect 2025 pre-tax savings of approximately $98 million from our 2024 restructuring actions.

We expect 2025 restructuring actions to generate annualized pre-tax savings of approximately $115 million beginning in 2026.

These estimates are based on current plans and assumptions and are subject to risks and uncertainties.

Actual savings may differ materially from these estimates.

The reserve balance for Restructuring and related costs, net as of December 31, 2025, was $130 million, of which $71 million is expected to be paid over the next twelve months.

Refer to Note 13 - Restructuring Programs in the Consolidated Financial Statements for additional information regarding our restructuring programs.

The restructuring reserve balance as of December 31, 2024, for all programs, was $113 million, of which $90 million is expected to be paid over the next twelve months.

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Amortization of Intangible Assets

Amortization of intangible assets for the three years ended December 31, 2025, 2024 and 2023 was $83 million, $73 million and $43 million, respectively.

The increased level of amortization of intangible assets in 2024, as compared to 2023, was primarily related to the strategic write-off of approximately $37 million of certain trade names in 2024, partially offset by the amortization expense associated with the intangible assets from the recent acquisition of ITsavvy.

Amortization expense increased in 2025 as compared to 2024, reflecting amortization expense associated with the intangible assets from the recent Lexmark Acquisition as well as a full year of amortization expense related to ITsavvy, both of which were partially offset by the higher level of accelerated amortization of certain trade names in the prior year.

The increased level of amortization of intangible assets in 2024, as compared to 2023, was primarily related to the strategic write-off of approximately $37 million of certain trade names in 2024, as well as the amortization expense associated with the intangible assets from the recent acquisition of ITsavvy.

Refer to Note 6 - Acquisitions and Divestitures, and Note 12 - Goodwill, Net and Intangible Assets, Net in the Consolidated Financial Statements for additional information regarding our intangible assets.

Worldwide Employment

Worldwide employment was approximately 16,800 as of December 31, 2024, a decrease of approximately 3,300 from December 31, 2023.

The decrease primarily relates to the Company's Reinvention, which includes the effects of workforce reduction decisions announced in January 2024, as well as net attrition (attrition net of gross hires).

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Worldwide employment was approximately 22,900 as of December 31, 2025, an increase of approximately 6,100 from December 31, 2024.

The increase primarily relates to the Lexmark Acquisition, partially offset by the net effects of workforce reduction decisions.

Other Expenses, Net

5 unchanged sentences

Gains on sales of businesses and assets (5) (8) (39)

Litigation matters 8 2 —

Currency losses, net 12 15 28

(Gain) Loss on early extinguishment of debt (2) 10 5

Transaction and related costs, net (38) — —

Contract termination costs - product supply — — 33

Loss (Gain) on early extinguishment of debt 5 (2) 10

Forfeitures from defined contribution plan (10) — —

Commitment fee expenses 22 — —

Gain on release of contingent consideration — (5) —

Transaction related costs, net — (38) —

Excess contribution refund — — (6)

6 unchanged sentences

Non-financing interest expense for the year ended December 31, 2025 of $248 million was $129 million higher than 2024.

The increase reflects the net increase in debt, primarily reflecting borrowings in support of the Lexmark Acquisition.

Also contributing to the increase is a lower debt level allocated to Xerox Financial Services, which reflects a continued reduction in the average finance receivables balance associated with the sales of finance receivables to our various funding affiliates, as well as lower originations.

When non-financing interest expense is combined with financing interest expense (Cost of financing), total interest expense of $334 million increased by $109 million from the prior year, primarily reflecting higher debt and interest rates on new debt issued in 2025.

Non-financing interest expense for the year ended December 31, 2024 of $119 million was $51 million higher than 2023.

The increase was primarily due to higher interest rates on new Senior Notes issued in 2024, lower financing debt, as well as a slightly higher average debt balance as a result of issuance of Senior Notes and promissory notes in 2024.

When non-financing interest expense is combined with financing interest expense (Cost of financing), total interest expense of $225 million increased by $27 million from the prior year period, primarily reflecting the impact of higher average interest rates.

Non-financing interest expense for the year ended December 31, 2023 of $68 million was $23 million lower than 2022.

The decrease was related to lower average non-financing debt as a result of the repayment of Senior Notes in 2022 and the first quarter 2023, partially offset by higher interest rates on new debt.

When non-financing interest expense is combined with financing interest expense (Cost of financing), total interest expense of $198 million decreased by $1 million from the prior year period primarily reflecting a lower average debt balance, mostly offset by the impact of higher average interest rates.

When non-financing interest expense is combined with financing interest expense (Cost of financing), total interest expense of $225 million increased by $27 million from the prior year, primarily reflecting the impact of higher average interest rates.

For the years ended December 31, 2025, 2024 and 2023, both Xerox Holdings and Xerox reported total interest expense of $334 million, $225 million and $198 million, respectively, however, the amount reported by Xerox includes interest expense of $136 million, $111 million and $80 million for the three years ended December 31, 2025, 2024 and 2023, respectively, paid to Xerox Holdings on an Intercompany Loan.

The Intercompany Loan represents a loan to Xerox of the net proceeds Xerox Holdings Corporation received from its Senior Notes, which was used to repay existing debt of Xerox Corporation.

The Intercompany Loan

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represents a loan to Xerox of the net proceeds Xerox Holdings Corporation received from its Senior Notes, which was used to repay existing debt of Xerox Corporation.

Xerox's interest expense on the Intercompany Loan matches the interest expense recognized by Xerox Holdings on its Senior Notes.

Refer to Note 15 - Debt in the Consolidated Financial Statements for additional information regarding the Xerox Holdings Corporation/Xerox Corporation Intercompany Loan, our debt activity and information regarding the allocation of interest expense.

Interest Income

Interest income for the year ended December 31, 2024 was $2 million lower than 2023, and for the year ended December 31, 2023 was $5 million higher than 2022.

The increase in interest income 2023 as compared to 2022 was due to higher interest rates, partially offset by a lower cash balance.

Non-Service Retirement-Related Costs

Non-service retirement-related costs increased $61 million for the year ended December 31, 2024 as compared to 2023.

The increase primarily reflects higher interest cost associated with an increase in actuarial losses subject to amortization, higher discount rates and a decrease in the expected return on plan assets, all of which were partially offset by lower settlement losses.

Non-service retirement-related costs increased $31 million for the year ended December 31, 2023 as compared to 2022.The increase primarily reflects higher interest cost associated with higher discount rates as well as a decrease in the expected return on plan assets, partially offset by lower settlement losses.

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Non-service retirement-related costs decreased $2 million for the year ended December 31, 2025 as compared to 2024.

The decrease was primarily due to the absence of settlement expense in the current year, as well as higher returns on plan assets, both of which were partially offset by costs associated with the Lexmark Acquisition.

Non-service retirement-related costs increased $61 million for the year ended December 31, 2024 as compared to 2023.The increase primarily reflects higher interest cost associated with an increase in actuarial losses subject to amortization, higher discount rates and a decrease in the expected return on plan assets, all of which were partially offset by lower settlement losses.

Service retirement-related costs, which are included in operating expenses, were $7 million, $6 million and $6 million for the years December 31, 2025, 2024 and 2023, respectively.

The decrease in service-related costs for the year ended December 31, 2023 as compared to 2022 was primarily due to the transition of our pension plan in the Netherlands to a Defined Contribution Plan for future service at the end of 2022.

Refer to Note 18 - Employee Benefit Plans in the Consolidated Financial Statements for additional information regarding service and non-service retirement-related costs.

Gains on Sales of Businesses and Assets

Gains on sales of businesses and assets for the year ended December 31, 2024 was $31 million lower than 2023, and for the year ended December 31, 2023 was $17 million lower than 2022.

The decrease in both years primarily relates to lower sales of non-core surplus business assets in the current year, as compared to the prior year.

Gains on sales of businesses and assets for the year ended December 31, 2025 was $3 million lower than 2024.

For the year ended December 31, 2024 gains on sales of businesses and assets was $31 million lower than 2023 reflecting lower sales of non-core surplus business assets in 2024, as compared to 2023.

Currency Losses, Net

Currency losses, net of $12 million for the year ended December 31, 2025 were $3 million lower as compared to 2024 primarily reflecting the sales of our direct business operations in Argentina, Chile & Peru in 2024, partially offset by the Lexmark Acquisition.

Currency losses, net of $15 million for the year ended December 31, 2024 were $13 million lower as compared to 2023 primarily due to the sale of our direct business operations in Argentina in 2024, as well as of the sale our Russian subsidiary in 2023

Currency losses, net of $28 million for the year ended December 31, 2023 were $15 million higher than 2022 due to continued volatility in the global exchange rates, particularly in the Middle East and Argentina, which could not be fully hedged, as well as an increase in the cost of hedging.

Refer to Note 16 - Financial Instruments in the Consolidated Financial Statements for additional information regarding our foreign currency derivatives.

(Gain) Loss on Early Extinguishment of Debt

During 2024, we recorded a $(4) million (gain) on the repayment of Senior Notes (through a tender offer) in the first quarter of 2024, partially offset by a loss of approximately $2 million on the write-off of deferred debt issuance costs.

Litigation Matters

2025 reflects legal fees and related expenses associated with various litigation and dispute matters which arise in the ordinary course of business.

Loss (Gain) on Early Extinguishment of Debt

During 2025, we recorded a $5 million loss reflecting the write-off of deferred debt issuance costs and unamortized discount, as well as other extinguishment costs related to the repayment of Senior Notes.

During 2024, we recorded a $(4) million (gain) on the repayment of Senior Notes (through a tender offer), partially offset by a loss of approximately $2 million on the write-off of deferred debt issuance costs

During 2023, we recorded losses of $10 million on the extinguishment of debt related to the early repayment on secured borrowings, the termination of our $250 million Credit Facility prior to entering into the new 5-year Asset Based Lending Facility (ABL), and the write-off of deferred debt issuance costs associated with the early extinguishment of the $555 million Bridge Loan Facility, that was replaced with the Term Loan B facility.

Refer to Note 15 - Debt in the Consolidated Financial Statements for additional information regarding our Senior Notes and Credit Facilities.

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Forfeitures from defined contribution plan

During 2025, we established a $10 million pension asset resulting from employee forfeitures impacting one of our defined contribution plans in Latin America.

This asset will be used to offset future employer contributions to the plan.

Commitment fee expenses

Commitment fee expenses for the year ended December 31, 2025 primarily reflects fees associated with financing transactions related to the Lexmark Acquisition.

Transaction and related costs, net

2024 activity reflects the insurance proceeds related to a legal settlement, for the reimbursement of certain legal and other professional costs, associated with a past potential merger.

Contract Termination Costs

For the year ended December 31, 2022, we recorded contract termination costs of $33 million ($25 million after-tax) associated with the early termination of a product supply agreement.

The charge primarily reflects the payment of the contractual cancellation fee plus interest and related legal fees.

Excess Contribution Refund

During 2023 and 2022, we received a refund of $6 million and $16 million, respectively, reflecting the return of excess employer contributions to a defined contribution plan for one of our Latin American subsidiaries as a result of employee forfeitures.

During 2023, we received a refund reflecting the return of excess employer contributions to a defined contribution plan for one of our Latin American subsidiaries as a result of employee forfeitures.

The excess contributions had accumulated over the past 20 plus years.

Refer to Note 18 - Employee Benefit Plans in the Consolidated Financial Statements for additional information regarding our defined contribution plans.

Tax Indemnification - Conduent

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The reversal of the offsetting IRS refund receivable is recorded as a charge in Income tax benefit.

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Pre-tax (Loss) Margin

Pre-tax (loss) margin for the year ended December 31, 2025 of (6.9)% decreased 12.6-percentage points from the pre-tax (loss) margin of (19.5)% in 2024 and included a 0.7-percentage point benefit from ITsavvy and a 1.0-percentage point adverse impact from the Lexmark Acquisition.

The improvement for the year ended December 31, 2025 is primarily due to the pre-tax non-cash goodwill impairment charge of $1,058 million in the third quarter 2024, as well as benefits associated with Reinvention-related cost and productivity actions, recent pricing initiatives, lower Restructuring and related costs, net, as well as lower incentive compensation and benefits costs.

In addition, the prior year reflected the sales of certain direct business operations in Latin America, resulting in a net disposal loss of $51 million.

These benefits were partially offset by higher Other expenses, net, which included higher non-financing interest expense related to recently completed borrowings in support of the Lexmark Acquisition, as well as commitment fees associated with those debt offerings and insurance proceeds related to a legal settlement 2024.

In addition, SAG increased due to the Lexmark Acquisition and ITsavvy, including post-acquisition expenses, as did RD&E.

Lower gross margin included the adverse impacts related to the Lexmark Acquisition, unfavorable product mix, the impact of product cost increases and incremental tariff-related costs.

On a pro forma 2 basis pre-tax (loss) margin improved by 12.6-percentage points mainly due to the impacts noted above.

Pre-tax (loss) margin for the year ended December 31, 2024 of (19.5)% increased 19.1-percentage points from the pre-tax (loss) margin of (0.4)% in 2023.

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These impacts were partially offset by the PARC donation charge in 2023, as well as lower Selling, administrative and general expenses, lower Restructuring and related costs, net, and lower RD&E expenses.

Pre-tax (loss) margin for the year ended December 31, 2023 of (0.4)% was a 4.2-percentage point improvement from the pre-tax (loss) margin of (4.6)% in 2022.

The improvement is primarily due to the Goodwill impairment charge of $412 million in 2022.

In addition, the improvement also reflects the impacts of lower supply chain-related costs and the benefits of price increases and favorable mix as well as lower RD&E expenses and Selling, administrative and general expenses.

These favorable impacts were partially offset by lower revenue, which includes the termination of Fuji royalty income, lost revenue associated with the donation of PARC and the intentional reduction in non-strategic revenue.

Pre-tax margin was also negatively impacted by the PARC donation charge of $132 million in the second quarter 2023, which had a 1.9-percentage point adverse impact on pre-tax margin, as well as higher Restructuring and related costs, net, which includes the workforce reduction announced in connection with Reinvention, and Other expenses, net.

Adjusted 1 operating margin for the year ended December 31, 2025 of 3.5% decreased 1.4-percentage points as compared to 2024 which included an approximate 1.0-percentage point benefit from the Lexmark Acquisition and an approximate 0.4-percentage point benefit from ITsavvy.

Excluding these acquisitions, the decrease reflects lower gross margin, due to unfavorable revenue mix, product cost increases and incremental tariff-related costs.

These impacts were partially offset by productivity and cost savings related to the Company's Reinvention, lower incentive compensation and benefits expenses, as well as price increases.

On a pro forma 2 basis adjusted 1 operating margin for the year ended December 31, 2025 of 4.3% decreased by 2.1-percentage points due primarily to the impacts noted above, as well as from the Lexmark Acquisition and ITsavvy.

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Adjusted 1 operating margin for the year ended December 31, 2024 of 4.9% decreased 0.7-percentage points as compared to 2023.

1 unchanged sentence

These impacts were partially offset by lower Selling, administrative and general expenses, including lower incentive compensation expenses, and the benefits from Reinvention related cost and productivity actions, benefits from the strategic decision to donate PARC in 2023, and the spin-off, exit, or shutdown of certain other RD&E related activities or businesses

Adjusted 1 operating margin for the year ended December 31, 2023 of 5.6% increased 1.7-percentage points as compared to 2022.

The increase primarily reflects higher gross margin, which includes the impacts of lower supply chain-related costs, the benefits of price increases and favorable mix.

The increase also reflects lower RD&E expense, and Selling, administrative and general expenses, which includes benefits associated with structural cost reductions and ongoing operating efficiencies.

Partially offsetting these benefits was lower revenue, which includes the termination of Fuji royalty income, lost revenue associated with the donation of PARC, and the intentional reduction in non-strategic revenue, as well as price increases from a product supplier, and higher Other expenses, net.

_____________

(1) Refer to the Adjusted Operating Income and Margin reconciliation table in the "Non-GAAP Financial Measures" section.

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(2) Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITsavvy was acquired on January 1, 2023.

Refer to the "Pro Forma Basis" section for an explanation of this measure.

Xerox operations are widely dispersed.

Our effective tax rate is based on our geographical mix of earnings as well as both recurring and nonrecurring events, including the taxation of foreign income.

As a result of these factors, which may not be predictable, and our ability to benefit from current year’s losses, our effective tax rate may change.

The 2025 effective tax rate was (110.9)% and resulted in a tax expense, primarily due to the establishment of a valuation allowance on certain deferred tax assets, as well the inability to benefit from certain current year losses.

Excluding the establishment of a valuation allowance our effective tax rate was (0.6)%.

On an adjusted 1 basis, the 2025 effective tax rate was 1,340.0%.

Both these rates were higher than the U.S.

federal statutory tax rate of 21.0% primarily due to the inability to benefit from certain current year losses, and the geographical mix of earnings.

The 2024 effective tax rate was (8.6)%.

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federal statutory tax rate of 21% primarily due to the tax benefits related to the redetermination of certain unrecognized tax positions upon the conclusion of several audits, as well as the remeasurement of deferred tax assets and change in tax filing positions, partially offset by the geographical mix of earnings.

The 2022 effective tax rate was 0.9% and was lower than the U.S.

federal statutory tax rate of 21% primarily due to the non-deductibility of the Goodwill impairment charge and the tax expense associated with changes in elections made to certain tax positions for recently filed returns, which were only partially offset by benefits from additional tax incentives and the geographical mix of earnings.

On an adjusted 1 basis, the 2022 effective tax rate was 21.6%.and was higher than the U.S.

federal statutory tax rate of 21% primarily due to tax expense associated with changes in elections made to certain tax positions for recently filed returns, offset by benefits from additional tax incentives.

Xerox operations are widely dispersed.

However, no one country outside of the U.S.

is a significant factor in determining our overall effective tax rate.

Refer to Note 19 - Income and Other Taxes in the Consolidated Financial Statements for additional information regarding the geographic mix of income before taxes and the related impacts on our effective tax rate.

Our effective tax rate is based on nonrecurring events as well as recurring factors, including the taxation of foreign income.

In addition, our effective tax rate will change based on discrete or other nonrecurring events that may not be predictable.

_____________

(1) Refer to the Adjusted Effective Tax Rate reconciliation table in the "Non-GAAP Financial Measures" section.

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Net (Loss) Income

Net (loss) for the year ended December 31, 2024 was $(1,321) million, or $(10.75) per diluted share, which included the following:

• After-tax Reinvention-related charge of $100 million ($129 million pre-tax), or $0.81 per diluted share, in first quarter 2024, primarily related to the exit of certain production print manufacturing operations and geographic simplification

• After-tax non-cash goodwill impairment charge of $1,015 million ($1,058 million pre-tax), or $8.17 per share, in third quarter 2024.

• After-tax write-off of intangibles of $28 million ($37 million pre-tax), or $0.22 per share, in fourth quarter 2024.

• After-tax Reinvention and transaction-related costs, net of $15 million ($19 million pre-tax), or $0.12 per share, in fourth quarter 2024.

• Tax expense charge of $161 million, or $1.30 per share, in third quarter 2024, related to the establishment of a valuation allowance against certain deferred tax assets to reflect their realizability

On an adjusted 1 basis, Net Income for the year ended December 31, 2024 was $135 million, or $0.97 per diluted share.

Net (loss) for the year ended December 31, 2025 was $(1,029) million, or $(8.25) per diluted share, which included tax expense charges of $537 million, or $4.26 per diluted share, related to the establishment of a valuation allowance against certain deferred tax assets to reflect their realizability, as well as an inventory-related purchase accounting adjustment, related to the Lexmark Acquisition, of $85 million ($102 million pre-tax) or $0.67 per diluted share.

On an adjusted 1 basis, Net (loss) for the year ended December 31, 2025 was $(62) million, or $(0.60) per diluted share.

Net (loss) for the year ended December 31, 2024 was $(1,321) million, or $(10.75) per diluted share, which included an after-tax Reinvention-related charge of $100 million ($129 million pre-tax), or $0.81 per diluted share, an after-tax non-cash goodwill impairment charge of $1,015 million ($1,058 million pre-tax), or $8.17 per share, an after-tax write-off of intangibles of $28 million ($37 million pre-tax), or $0.22 per share, an after-tax Reinvention and transaction-related costs, net of $15 million ($19 million pre-tax), or $0.12 per share, and a tax expense charge of $161 million, or $1.30 per share related to the establishment of a valuation allowance against certain deferred tax assets to reflect their realizability.

On an adjusted 1 basis, Net income the year ended December 31, 2024 was $135 million, or $0.97 per diluted share.

Net income for the year ended December 31, 2023 was $1 million, or $(0.09) per diluted share, which included the after-tax PARC donation charge of $92 million (pre-tax charge of $132 million) or $0.58 per diluted share, and after-tax Restructuring and related costs, net charge of $78 million ($104 million pre-tax), or $0.52 per share, related to the Reinvention-related workforce reduction.

On an adjusted 1 basis, Net income was $287 million, or $1.82 per diluted share.

Net (loss) for the year ended December 31, 2022 was $(322) million, or $(2.15) per diluted share, which included an after-tax Goodwill impairment charge of $395 million (pre-tax charge of $412 million) or $(2.54) per share.

On an adjusted 1 basis, Net income was $189 million, or $1.12 per diluted share.

Refer to Note 25 - Loss per Share in the Consolidated Financial Statements, for additional information regarding the calculation of basic and diluted loss per share.

_____________

(1) Refer to the Adjusted Net Income and EPS reconciliation table in the "Non-GAAP Financial Measures" section.

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(1) Refer to the Adjusted Net (Loss) Income and EPS reconciliation table in the "Non-GAAP Financial Measures" section.

Other Comprehensive Loss, Net

Other comprehensive income, net was $388 million in 2025 and included the following:

i) $305 million of net translation adjustment gains reflecting the strengthening of our major foreign currencies against the U.S.

Dollar during 2025;

ii) $93 million of net gains from the changes in defined benefit plans primarily due to actuarial gains as a result of higher than expected returns on equity investments, the amortization of actuarial losses partially offset by lower settlement expense, partially offset by the adverse impact of currency;

and iii) $10 million in unrealized losses, net.

Other comprehensive loss, net was $23 million in 2024 and included the following:

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and iii) $1 million in unrealized gains, net.

Other comprehensive loss, net was $549 million in 2022 and included the following:

i) $376 million of net translation adjustment losses reflecting the weakening of our major foreign currencies against the U.S.

Dollar during 2022;

ii) $171 million of net losses from the changes in defined benefit plans primarily due to actuarial losses as a result of negative asset returns, partially offset by the positive impact of currency and the amortization of actuarial losses and settlement losses;

and iii) $2 million in unrealized losses, net.

Refer to our discussion of Pension Plan Assumptions in the Application of Critical Accounting Estimates section of the MD&A as well as Note 18 - Employee Benefit Plans in the Consolidated Financial Statements for additional information regarding changes in our defined benefit plans.

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Table of Conten t s

Reportable Segments

Our business is organized to ensure we focus on efficiently managing operations while serving our customers and the markets in which we operate.

We have two operating and reportable segments – Print and Other and Xerox Financial Services (XFS) .

We have two operating and reportable segments – Print and Other and IT Solutions.

Refer to Note 4 - Segment and Geographic Area Reporting in the Consolidated Financial Statements for additional information regarding our reportable segments.

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Year Ended December 31,

(in millions) External Revenue Intersegment Revenue (1)

Total Segment Revenue % of Total Revenue Segment Costs and Expenses Segment Profit Segment Margin (2)

Print and Other $ 5,864 $ 71 $ 5,935 94 % $ 5,667 $ 268 4.6 %

XFS 357 — 357 6 % 323 34 9.5 %

Total $ 6,221 $ 71 $ 6,292 100 % $ 5,990 $ 302 4.9 %

Print and Other $ 6,485 $ 86 $ 6,571 94 % $ 6,211 $ 360 5.6 %

XFS 401 — 401 6 % 372 29 7.2 %

Total $ 6,886 $ 86 $ 6,972 100 % $ 6,583 $ 389 5.6 %

Print and Other $ 6,714 $ 90 $ 6,804 95 % $ 6,546 $ 258 3.8 %

XFS 393 — 393 5 % 376 17 4.3 %

Total $ 7,107 $ 90 $ 7,197 100 % $ 6,922 $ 275 3.9 %

(in millions) Print and Other IT Solutions Total Segment Intersegment Elimination (1)

Corporate Other (2)

Revenues $ 6,272 $ 761 $ 7,033 $ (11) $ — $ 7,022

% of Total Revenue 89 % 11 % 100 %

Expenses $ 5,993 $ 719 $ 6,712 $ (11) $ 73 $ 6,774

Segment Profit (Loss) $ 279 $ 42 $ 321 $ — $ (73) $ 248

Segment Margin (3)

4.4 % 5.5 % NM 3.5 %

Revenues $ 5,864 $ 358 $ 6,222 $ (1) $ — $ 6,221

% of Total Revenue 94 % 6 % 100 %

Expenses $ 5,468 $ 358 $ 5,826 $ (1) $ 94 $ 5,919

Segment Profit (Loss) $ 396 $ — $ 396 $ — $ (94) $ 302

Segment Margin (3)

6.8 % — % NM 4.9 %

Revenues $6,523 $363 $ 6,886 $ — $ — $ 6,886

% of Total Revenue 95 % 5 % 100 %

Expenses $6,038 $358 $ 6,396 $ — $ 101 $6,497

Segment Profit (Loss) $ 485 $ 5 $ 490 $ — $ (101) $ 389

Segment Margin (3)

7.4 % 1.4 % NM 5.6 %

2025 Pro Forma (4)

Revenues $7,212 $761 $ 7,973 $ (11) $ — $ 7,962

% of Total Revenue 90 % 10 % 100 %

Expenses $6,829 $719 $ 7,548 $ (11) $ 80 $7,617

Segment Profit $ 383 $ 42 $ 425 $ — $ (80) $ 345

Segment Margin (3)

5.3 % 5.5 % NM 4.3 %

2024 Pro Forma (4)

Revenues $7,854 $767 $ 8,621 $ (1) $ — $ 8,620

% of Total Revenue 91 % 9 % 100 %

Expenses $7,210 $751 $ 7,961 $ (1) $ 107 $8,067

Segment Profit $ 644 $ 16 $ 660 $ — $ (107) $ 553

Segment Margin (3)

8.2 % 2.1 % NM 6.4 %

_____________

(1) Reflects revenue, primarily commissions and other payments, made by the XFS Segment to the Print and Other Segment for the lease of Xerox equipment placements.

(2) Segment margin based on external revenue only.

(1) Reflects primarily IT hardware, software solutions and services, sold by the IT Solutions segment to the Print and Other segment.

(2) Corporate Other reflects certain administrative and general expenses, which primarily relate to corporate functions, and are not allocated to either of our reportable segments.

(3) Segment margin is based on total revenue.

IT Solutions segment margin is net of Intersegment Elimination.

(4) Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITsavvy was acquired on January 1, 2023.

Refer to the "Pro Forma Basis" section for an explanation of this measure.

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Print and Other

Print and Other includes the design, development and sale of document management systems, solutions and services as well as associated technology offerings including Digital and IT services and software.

Year Ended December 31, % Change

The Print and Other segment includes the design, development and sale of document management systems, supplies, and services as well as associated financing and technology-related offerings, digital and print-related software products and services.

This segment also includes our recent Lexmark Acquisition, and Xerox Financial Services.

Year Ended December 31, % Change Pro Forma (1) % Change

(in millions) 2025 2024 2023 2025 2024 2025

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Post sale revenue (2)

Intersegment revenue (1)

4,784 4,486 4,868 6.6% (7.8)% (8.0)%

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_____________

(1) Reflects revenue, primarily commissions and other payments, made by the XFS segment to the Print and Other segment for the lease of Xerox equipment placements.

For the year ended December 31, 2024 Print and Other segment revenue decreased 9.7% as compared to 2023, and for the year ended December 31, 2023 Print and Other segment revenue decreased 3.4% as compared to 2022.

(1) Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024.

Refer to the "Pro Forma Basis" section for an explanation of this measure.

(2) Includes financing revenue generated from direct and indirectly financed Xerox equipment sale transactions of $86 million, $106 million, $130 million for the three years ended December 31, 2025, 2024 and 2023, respectively.

For the year ended December 31, 2025 Print and Other segment revenue increased 7.0% as compared to 2024, and for the year ended December 31, 2024 Print and Other segment revenue decreased 10.1% as compared to 2023.

Print and Other segment revenue results included the following:

Equipment Sales Revenue

• For the year ended December 31, 2024, Equipment sales revenue decreased 16.8% as compared to 2023, primarily impacted by unfavorable mix, as well as the effects of backlog fluctuations in the current and prior year, the decision to stop certain manufacturing of high-end equipment, the effects of geographic simplification, and the impacts of organizational changes implemented in the first half of 2024.

• For the year ended December 31, 2025, equipment sales revenue increased 8.0% as compared to 2024, and included an 16.5-percentage point benefit from the Lexmark Acquisition, and a 0.9-percentage point benefit from currency.

The increase at constant currency 1 reflects higher installations driven by the inclusion of Lexmark.

Excluding Lexmark, equipment sales declined 8.5-percentage points in actual currency due to lower installations and Reinvention-related actions, including the exit of certain production print manufacturing operations, partially offset by higher pricing.

On a pro forma 2 basis, equipment sales revenue for the year ended December 31, 2025 decreased 8.7% as compared to the prior year, due to the impacts noted above, as well as backlog 3 fluctuations.

• For the year ended December 31, 2024, equipment sales revenue decreased 16.7% compared to the prior year, including a 0.2-percentage point adverse impact from currency.

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• For the year ended December 31, 2023, Equipment sales revenue increased 2.0% as compared to 2022, driven by improvement in product availability for higher-margin mid-range and high-end devices in the Americas, as well as recent pricing actions and stable demand conditions, both of which were partially offset by lower revenue from the Entry product group, primarily in EMEA, due to backlog reductions in the prior year.

Post Sale Revenue

• For the year ended December 31, 2024, Post sale revenue decreased by 7.2% as compared to 2023.

Managed print services 1 declined as compared to 2023, driven by lower outsourcing and print service revenue, which includes the effects of geographic simplification.

Post sales declines also resulted from lower sales of non-strategic, lower margin IT endpoint device placements, rental revenue, and paper sales.

These impacts were partially offset by higher organic and inorganic IT Solutions revenue, including a partial quarter of ITsavvy results, as well as higher digital services and supplies revenue.

• For the year ended December 31, 2023, Post sale revenue decreased 5.1% as compared to 2022 due primarily to lower sales of lower-margin, non-strategic paper and IT endpoint devices, as well as the termination of Fuji royalty income and PARC revenue.

Supplies, paper and other, and Contractual print services revenue declined modestly as compared to the prior year period.

The decline in Contractual print services is mainly driven by lower production print activity, the exit from Russia and a shift in distribution strategy for one of our European markets, partially offset by Digital and Managed IT Services revenue growth, which includes the benefits of a recent acquisition.

These declines were partially offset by price increases, as well as gains and commissions, and servicing revenue on sales of finance receivables.

_____________

(1) Previously known as contractual print services, and includes revenues from service, maintenance and rentals.

• For the year ended December 31, 2025, post sale revenue increased by 6.6% as compared to 2024, and included an approximately 16.4-percentage point benefit from the Lexmark Acquisition as well as a 0.1-percentage point benefit from currency.

Excluding the Lexmark Acquisition, post sale revenue declined approximately 9.8-percentage points in actual currency due primarily to a decline in managed print services 4 revenue, driven by lower outsourcing, print services, and rental revenue.

Post sale revenue was also adversely affected by intentional reductions in non-strategic revenue, such as paper sales, and financing revenue, and the effects of geographic and offering simplification, as well as lower supplies revenue.

These negative impacts were partially offset by growth in digital services revenue.

On a pro forma 2 basis, post sale revenue for the year ended December 31, 2025 decreased 8.0%, mainly due to the impacts noted above.

• For the year ended December 31, 2024, post sale revenue decreased 7.8% as compared to 2023.

Managed print services 4 declined as compared to 2023, driven by lower outsourcing and print service revenue, which includes the effects of geographic simplification, as well as lower rental revenue and paper sales.

Post sale declines also resulted from a continued reduction of the average finance receivables balance in 2024.

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receivables were approximately $800 million lower at December 31, 2024 as compared to December 31, 2023.

These impacts were partially offset by higher digital services and supplies revenue.

(1) Refer to the “Currency Impact” section for a description of constant currency.

(2) Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITsavvy was acquired on January 1, 2023.

Refer to the "Pro Forma Basis" section for an explanation of this measure.

(3) Order backlog is measured as the value of unfulfilled sales orders, shipped and non-shipped, received from our customers waiting to be installed, including orders with future installation dates.

It includes printing devices as well as IT hardware.

(4) Includes revenues from service, maintenance and rentals.

IT Solutions and digital services are not included in managed print services.

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(1) Refer to the Products and Offerings Definitions section.

(2) Includes equipment sales related to the XFS segment of $18 million, $21 million and $22 million for the three years ended December 31, 2024, 2023 and 2022, respectively.

The change at constant currency 1 reflected the following:

• For the year ended December 31, 2025, the increase, as compared to 2024, primarily reflects the Lexmark Acquisition.

Excluding the Lexmark Acquisition, the decrease reflects lower installations of black-and-white products, as well as a higher mix of sales to indirect channel partners, both of which were partially offset by higher installs of color products.

• For the year ended December 31, 2024, the decrease, as compared to 2023, primarily reflects higher backlog reductions and installations of Entry printer, and Entry A4 color devices in the prior year, partially offset by higher installations of Entry A4 black-and-white devices in the current year.

• For the year ended December 31, 2023, the decrease, as compared to 2022, primarily reflects backlog reductions in the prior year, and the normalization of work-from-home demand, offset by price increases.

• For the year ended December 31, 2025, the increase, as compared to 2024, reflects the incremental installations as a result of the Lexmark Acquisition.

Excluding the Lexmark Acquisition, the decrease reflects lower installs of black-and-white MFP products, partially offset by higher entry production color installs.

• For the year ended December 31, 2024, the decrease, as compared to 2023, reflects higher backlog reductions in the prior year, as well as declines in both black-and-white and color installations, and higher mix of lower-priced A3 color multi-function printers.

• For the year ended December 31, 2023, the increase, as compared to 2022, reflects improved product availability primarily in the Americas and price increases, partially offset by declines in EMEA due to backlog reductions in the prior year.

• For the year ended December 31, 2025, the decrease, as compared to 2024, was primarily due to lower installations, and the exit certain production print manufacturing operations in the prior year period.

• For the year ended December 31, 2024, the decrease, as compared to 2023, was primarily due to higher backlog 2 reductions in the prior year, as well as an unfavorable mix toward black-and-white devices, as well as lower High-end color installations, reflecting the evolution of our Production Print portfolio.

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• For the year ended December 31, 2023, the increase, as compared to 2022, was driven by revenue growth in the Americas, as well as higher revenue and higher installs of both Entry Production Color devices and iGens, due to improved product availability and benefits from price increases.

_____________

(1) See "Currency Impact" section for description of constant currency.

(2) Order backlog is measured as the value of unfulfilled sales orders, shipped and non-shipped, received from our customers waiting to be installed, including orders with future installation dates.

It includes printing devices as well as IT hardware.

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Table of Conten t s

Total Installs

Installs reflect new placements of devices only (i.e., measure does not take into account removal of devices which may occur as a result of contract renewals or cancellations).

Installs reflect new placements of devices to end-user customers, and sales to distributors and resellers.

Revenue associated with equipment installations may be reflected up-front in Equipment sales or over time either through rental income or as part of our services revenues (which are both reported within our Post sale revenues), depending on the terms and conditions of our agreements with customers.

Installs include activity for Xerox and non-Xerox branded products installed by our XBS sales unit.

Installs include activity for Xerox and non-Xerox branded products.

Detail by product group (see Products and Offerings Definitions ) is shown below.

Installs for the year ended December 31, 2024 were:

• 11% decrease in entry color installs driven by declines in entry color printers, as well as declines in A4 Color MFPs.

• 2% decrease in entry black-and-white installs driven by declines in entry mono printers, partially offset by higher installs of A4 mono MFPs.

• 5% decrease in mid-range color installs, primarily reflecting declines in A3 color MFPs, as well as Entry Production Color devices.

• 19% decrease in mid-range black-and-white installs, primarily driven by A3 mono MFPs, as well as light production devices.

• 25% decrease in high-end color installs, primarily reflecting declines in Entry Production Color products.

• 15% decrease in high-end black-and-white installs, reflecting declines in Higher End Cut Sheet products.

Installs for the year ended December 31, 2025, include the impact of the Lexmark Acquisition, were:

• Entry increased 60% driven primarily by the contribution of Lexmark.

Excluding the Lexmark Acquisition, installations decreased primarily due to declines of black-and-white printers, partially offset by growth of color printer installations.

• Mid-Range increased 2% driven by the contribution of Lexmark.

Excluding the Lexmark Acquisition, installations were down primarily due to declines in color and black-and-white MFPs, partially offset by growth of Entry Production Color Low product installations.

• High-End decreased 27% primarily reflecting declines in Entry Production Color, as well as the decision to the exit certain production print manufacturing operations made in the prior year period.

Installs for the year ended December 31, 2024 were:

• 37% decrease in entry color installs driven by declines in entry color printers and A4 Color MFPs, reflecting backlog reductions in the prior year.

• 16% decrease in entry black-and-white installs driven by declines in A4 mono MFPs, primarily in EMEA, which was partially offset by higher entry mono printer installs.

• Mid-range color installs were flat, reflecting higher light production installations offset by a slight decline in A3 color MFPs.

• 7% increase in mid-range black-and-white installs, driven by A3 mono MFPs, reflecting increased product availability primarily in the Americas.

• 25% increase in high-end color installs reflecting higher demand for iGen and Versant products, primarily in the Americas.

• 16% decrease in high-end black-and-white installs reflecting a market shift toward color production equipment.

_____________

(1) Reflects install activity for total Entry product group.

• Entry decreased 4% driven primarily by color installs reflecting declines in entry color printers, as well as declines in A4 Color MFP, as well as lower installs of black-and-white installs driven by declines in entry mono printers, partially offset by higher installs of A4 mono MFPs.

• Mid-Range decreased 9% primarily reflecting lower black-and-white installs, primarily driven by A3 mono MFPs, as well as lower installs of color products, primarily reflecting declines in A3 color MFPs, as well as Entry Production Color devices.

• High-End decreased 24% driven primarily by high-end color installs, reflecting declines in Entry Production Color products, as well as lower installs of black-and-white High-End Cut Sheet products.

Product and Offerings Definitions

Our product groups range from:

• “Entry” , which include A4 devices and desktop printers and multifunction devices that primarily serve small and medium workgroups/work teams.

• “Mid-Range” , which include A3 devices that generally serve large workgroup/work teams environments as well as products in the Light Production product groups serving centralized print centers, print for pay and lower volume production print establishments.

• “High-End” , which include production printing and publishing systems that generally serve the graphic communications marketplace and print centers in large enterprises.

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• “Entry” , which generally includes A4 devices and desktop printers and multifunction devices that primarily serve small and medium workgroups/work teams.

• “Mid-Range” , which generally includes A3 devices that primarily serve large workgroup/work teams environments as well as products in the Light Production product groups serving centralized print centers, print for pay and lower volume production print establishments.

• “High-End” , which generally includes production printing and publishing systems that generally serve the graphic communications marketplace and print centers in large enterprises.

Product group classifications reflect how management evaluates equipment offerings during the periods presented and may evolve over time as the Company’s portfolio and go-to-market approach change.

Segment Expenses

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Research, Development and Engineering Expenses (RD&E)

• RD&E of $230 million for the year ended December 31, 2025 increased $39 million as compared to 2024.

The increase was primarily due to Lexmark Acquisition, partially offset by lower spend in print and print services, as well as productivity and cost savings related to the Company's Reinvention.

On a pro forma 1 basis, RD&E decreased by $26 million for the year ended December 31, 2025 as compared to the prior year due to the impacts noted above.

• RD&E of $191 million for the year ended December 31, 2024, decreased $38 million as compared to 2023.

The decrease was primarily due to productivity and cost savings related to the Company's Reinvention, the spin-off, exit, or shutdown of certain other RD&E related activities or businesses, and the corresponding reduction in real estate.

The lower spending in innovation reflects decisions which provide greater focus and financial flexibility to pursue growth opportunities adjacent to our core operations.

The lower spending in innovation reflects decisions which provide greater focus and

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financial flexibility to pursue growth opportunities adjacent to our core operations.

The decrease also reflected the strategic decision to donate PARC in 2023.

• RD&E of $229 million for the year ended December 31, 2023, decreased $75 million as compared to 2022.

The decrease was primarily due to the strategic decision to donate PARC and the spin-off, exit, or shutdown of certain other RD&E related activities or businesses.

Selling, Administrative and General Expenses (SAG )

• SAG expenses of $1,402 million for the year ended December 31, 2025 were $36 million higher than 2024, primarily due to expenses related to the Lexmark Acquisition, including post-acquisition expenses associated with the settlement of pre-existing employment agreements, as well as other Reinvention-related investments, and higher expense related to sales enablement and advertising, and the adverse impact of currency.

These adverse impacts were partially offset by productivity and cost savings related to the Company's Reinvention, lower incentive compensation and benefits expense, and lower bad debt expense.

• SAG expenses of $1,366 million for the year ended December 31, 2024 were $181 million lower than 2023 primarily reflecting productivity and cost savings related to the Company's Reinvention, as well as lower incentive compensation expense, IT expenses, outsourcing costs, commission payments, litigation expense, and advertising costs, and the strategic decision to donate PARC in the prior year.

These favorable impacts were partially offset by higher bad debt expense, the inclusion of a partial quarter of ITsavvy results, and unfavorable currency.

• SAG expenses of $1,563 million for the year ended December 31, 2023 were $21 million lower than 2022 primarily reflecting the benefits from productivity and cost savings, including savings related to restructuring actions, the strategic decision to donate PARC and other dispositions as well as a reduced investment in new businesses.

Additionally, the decrease in SAG also reflected lower supply chain-related costs, and the favorable true-up of prior year shared services contract costs.

These benefits were partially offset by higher bad debt expense, incentive compensation expense and marketing expenses, and the impact of an acquisition.

These favorable impacts were partially offset by higher bad debt expense, and unfavorable currency.

Segment Margin

Print and Other segment margin of 4.6% for the year ended December 31, 2024 decreased 1.0-percentage point as compared to 2023.

Print and Other segment margin of 4.4% for the year ended December 31, 2025 decreased by 2.4-percentage points as compared to the prior year, primarily due to lower gross profit, impacted by higher product and incremental tariff-related costs, and unfavorable mix, as well as higher SAG and RD&E expenses.

These impacts were partially offset by higher revenue, primarily as a result of the Lexmark Acquisition, as well as Reinvention-related cost and productivity actions, recent pricing actions, and lower freight costs.

On a pro forma 1 basis, Print and Other segment margin of 5.3% decreased by 2.9-percentage points as compared to the prior year period, due to the impacts noted above, as well as the timing of certain enterprise deals at Lexmark.

Print and Other segment margin of 6.8% for the year ended December 31, 2024 decreased 0.6-percentage points compared to 2023.

The decrease is primarily due to lower revenue, lower gross margin, and higher bad debt expense.

These adverse impacts were partially offset by lower Selling and other administrative and general expenses, and lower RD&E expense, reflecting the benefits of cost and productivity savings.

Print and Other segment margin of 5.6% for the year ended December 31, 2023 increased 1.8-percentage points as compared to 2022.

The increase is primarily due to higher segment gross profit, which includes reduced RD&E, lower selling expense, lower freight costs, as well as the benefits from pricing and cost and productivity actions.

These benefits were partially offset by lower revenue.

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Xerox Financial Services (XFS)

XFS represents a global financing solutions business, primarily enabling the sale of our equipment and services.

Year Ended December 31, % Change

(1) Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITsavvy was acquired on January 1, 2023.

Refer to the "Pro Forma Basis" section for an explanation of this measure.

The IT Solutions segment provides clients of all sizes integrated IT infrastructure solutions, delivering business outcomes through its suite of Device Lifecycle Solutions, and Managed IT Services.

This segment provides services to clients in the U.S., Canada, the U.K., and Western Europe.

Year Ended December 31, % Change Pro Forma (1) % Change

(in millions) 2025 2024 2023 2025 2024 2025

Equipment sales $ 18 $ 21 $ 22 (14.3)% (4.5)%

Financing 151 191 207 (20.9)% (7.7)%

Other Post sale revenue

• For the year ended December 31, 2024, Other Post sale revenue decreased 0.5% as compared to 2023, as a result of the continued reduction of our average finance receivables balance.

Other Post sale revenue includes gains, commissions and servicing revenue on sales of finance receivables under our finance receivables funding agreement, which was $47 million for the year ended December 31, 2024, as compared to $34 million for the year ended December 31, 2023.

• For the year ended December 31, 2023, Other Post sale revenue increased 15.2% as compared to 2022, primarily due to higher commissions and servicing revenue on increased sales of finance receivables under our finance receivables funding agreement.

Intersegment revenue (4)

11 1 — NM NM NM

Total IT Solutions $ 761 $ 358 $ 363 112.6% (1.4)% (0.8)%

_____________

(1) See "Currency Impact" section for description of constant currency.

(1) Reflects the inclusion of ITsavvy as if it was acquired on January 1, 2023.

Refer to the "Pro Forma Basis" section for an explanation of this measure.

(2) IT Products reflect the sale of IT hardware and software solutions.

Hardware product sales include the sale of notebooks, desktop, network communications and other endpoint devices, infrastructure components and other IT hardware.

Software product sales include deployments of cloud and security solutions, endpoint security application suites, operating systems, other applications and network management solutions.

(3) IT Services reflect revenue associated with the implementation of IT Solutions, including device lifecycle solutions, deployment and network and security monitoring services, and other managed IT services.

(4) Reflects primarily IT hardware, software solutions and services sold by the IT Solutions segment to the Print and Other segment.

Xerox 2025 Annual Report 57

Table of Conten t s

For the year ended December 31, 2025 IT Solutions segment revenue increased 112.6%, as compared to 2024, and for the year ended December 31, 2024 IT Solutions segment revenue decreased 1.4%, as compared to 2023.

IT Solutions segment revenue included the following:

IT Products Revenue:

• For the year ended December 31, 2025 IT products revenue increased 125.4% as compared to 2024, primarily due to ITsavvy.

Excluding ITsavvy, revenue decreased 2.7% due to a decline in the legacy Xerox IT Solutions business, which was partially attributable to a larger mix of revenue subject to net classification and revenue deferrals, the timing of large product placements in the prior year, the adverse impact to deals as a result of the government shutdown in 2025, and component cost increases.

On a pro forma 1 basis, IT Product revenue for the year ended December 31, 2025 decreased 7.6% due to lower revenues from legacy Xerox, offset by growth from ITsavvy, reflecting higher sales of endpoint, infrastructure and networking products.

• For the year ended December 31, 2024, IT product revenue decreased 9.4% as compared to 2023, primarily reflecting lower revenues from legacy Xerox due to large product refreshes in 2023, partially offset by the impact of the acquisition of ITsavvy in the fourth quarter of 2024.

IT Services Revenue:

• For the year ended December 31, 2025 revenue increased 81.6% as compared to 2024 The increase was primarily due to ITsavvy.

On a pro forma 1 basis, IT service revenue for the year ended December 31, 2025 increased 13.5% due to growth from ITsavvy.

• For the year ended December 31, 2024 revenue increased 16.8% as compared to 2023.

The increase from the prior year was primarily due to the impact of the acquisition of ITsavvy in the fourth quarter of 2024.

Segment Expenses

XFS segment expenses included the following:

Selling, Administrative and General Expenses (SAG)

• SAG expenses of $126 million for the year ended December 31, 2024 were $7 million lower than 2023, primarily reflecting productivity and cost savings related to the Company's Reinvention, partially offset by higher bad debt expense, which included an increased provision for aged accounts receivables in the current year.

Bad debt expense in 2024 included a credit of approximately $(8) million due to a reserve release resulting in part from a lower finance receivables balance.

• SAG expenses of $133 million for the year ended December 31, 2023 were $22 million lower than 2022, primarily reflecting lower bad debt expense which included a credit of $(12) million related to a reserve release in the U.S.

as the result of a favorable reassessment of the credit exposure on a large customer receivable balance after a contract amendment.

SAG also benefited from productivity and cost savings, including savings related to restructuring actions.

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Segment Margin

XFS segment margin of 9.5% for the year ended December 31, 2024 increased 2.3-percentage points as compared to 2023.

Segment profit for XFS was $5 million higher as compared to the prior year period, primarily due to lower Selling, administrative and general expenses, as well as higher servicing revenues.

These positive impacts were partially offset by lower financing revenue from reduced assets and a reserve release of $12 million in the prior year.

XFS segment margin of 7.2% for the year ended December 31, 2023 increased 2.9-percentage points, as compared to 2022.

Segment profit for XFS was $12 million higher as compared to the prior year period primarily due to higher revenues, lower bad debt expense, and a reduction in commissions paid to equipment suppliers (primarily the Print and Other segment), partially offset by higher funding costs.

2025 Segment Reporting Update

In January 2025 we announced the creation of our IT Solutions business, which comprises our recent acquisition of ITsavvy, as well as our Canadian IT Services business Powerland, and our legacy XBS IT sales businesses.

We expect to begin to provide additional information related to IT Solutions beginning with the first quarter 2025.

Accordingly, we will be reassessing our operating and reportable segments in the first quarter of 2025 and we expect to provide a revision of our segment reporting then.

2024, 2023 and 2022 Segment Review

In November 2023, the FASB issued ASU 2023-07 , Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires among other things, the requirement to provide enhanced disclosures related to significant segment expenses.

R efer to Note 2 - Recent Accounting Pronouncements and Summary of Significant Accounting Policies in our Consolidated Financial Statements for additional information regarding the adoption of this ASU.

The following table reflects the incremental disclosure requirements related to our adoption of ASU 2023-07 for the following periods:

Three Months Ended

March 31, 2024 June 30, 2024 September 30, 2024 December 30, 2024

(in millions) Print and Other XFS Total Print and Other XFS Total Print and Other XFS Total Print and Other XFS Total

External revenue $ 1,411 $ 91 $ 1,502 $ 1,489 $ 89 $ 1,578 $ 1,440 $ 88 $ 1,528 $ 1,524 $ 89 $ 1,613

Intersegment revenue (1)

19 — 19 19 — 19 17 — 17 16 — 16

Total Segment net revenue $ 1,430 $ 91 $ 1,521 $ 1,508 $ 89 $ 1,597 $ 1,457 $ 88 $ 1,545 $ 1,540 $ 89 $ 1,629

Reconciliation to Segment Profit

Cost of sales (2)

$ 319 $ 21 $ 340 $ 366 $ 19 $ 385 $ 371 $ 19 $ 390 $ 421 $ 18 $ 439

Cost of services, maintenance and rentals (2)

652 4 656 634 2 636 613 4 617 637 4 641

Cost of financing (3)

— 27 27 — 29 29 — 26 26 — 24 24

Research, development and engineering expenses 49 — 49 50 — 50 45 — 45 47 — 47

Selling, administrative and general expenses (4)(5)

358 39 397 358 35 393 344 26 370 332 26 358

Intersegment expense (6)

19 — 19 19 — 19 17 — 17 16 — 16

Segment profit $ 33 $ — $ 33 $ 81 $ 4 $ 85 $ 67 $ 13 $ 80 $ 87 $ 17 $ 104

• SAG expenses of $101 million for the year ended December 31, 2025 were $43 million higher than 2024, primarily due to ITsavvy.

• SAG expenses of $58 million for the year ended December 31, 2024 were $10 million higher than 2023, primarily due to legacy XBS IT solutions and the acquisition of ITsavvy in 2024.

Segment Margin

IT Solutions segment margin of 5.5% for the year ended December 31, 2025 increased 5.5-percentage points as compared to 2024.

The increase from 2024 was driven by ITsavvy, partially offset by higher SAG.

On a pro forma 1 basis, IT Solutions segment margin of 5.5% increased by 3.4-percentage points as compared to 2024, due to the impacts noted above, as well as productivity and cost savings related to the integration of the legacy XBS IT solutions business.

IT Solutions segment margin was 0.0% for the year ended December 31, 2024 and decreased 1.4-percentage points as compared to 2023 primarily reflecting higher SAG and lower revenues from legacy Xerox, partially offset by the impact of the acquisition of ITsavvy in the fourth quarter of 2024.

_____________

(1) Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITsavvy was acquired on January 1, 2023.

Refer to the "Pro Forma Basis" section for an explanation of this measure.

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Year Ended December 31,

2024 2023 2022

(in millions) Print and Other XFS Total Print and Other XFS Total Print and Other XFS Total

External revenue $ 5,864 $ 357 $ 6,221 $ 6,485 $ 401 $ 6,886 $ 6,714 $ 393 $ 7,107

Intersegment revenue (1)

71 — 71 86 — 86 90 — 90

Total Segment net revenue $ 5,935 $ 357 $ 6,292 $ 6,571 $ 401 $ 6,972 $ 6,804 $ 393 $ 7,197

Reconciliation to Segment Profit

Cost of sales (2)

$ 1,477 $ 77 $ 1,554 $ 1,686 $ 92 $ 1,778 $ 1,906 $ 96 $ 2,002

Cost of services, maintenance and rentals (2)

2,536 14 2,550 2,647 17 2,664 2,662 17 2,679

Cost of financing (3)

— 106 106 — 130 130 — 108 108

Research, development and engineering expenses 191 — 191 229 — 229 304 — 304

Selling, administrative and general expenses (4)(5)

1,392 126 1,518 1,563 133 1,696 1,584 155 1,739

Intersegment expense (6)

71 — 71 86 — 86 $ 90 $ — $ 90

Segment profit $ 268 $ 34 $ 302 $ 360 $ 29 $ 389 $ 258 $ 17 $ 275

Segment margin (7)

4.6 % 9.5 % 4.9 % 5.6 % 7.2 % 5.6 % 3.8 % 4.3 % 3.9 %

_____________

(1) Intersegment revenue is primarily commissions and other payments made by the XFS Segment to the Print and Other Segment for the lease of Xerox equipment placements.

(2) Cost of sales and Cost of services, maintenance and rentals for the Print and Other Segment excludes $8 and $43 from the reduction of inventory and the cancellation of related purchase contracts as a result of the exit of certain production print manufacturing operations during the year ended December 31, 2024.

(3) Cost of financing is Interest expense associated with allocated debt of the Company, and is fully allocated to the XFS segment in support of its Finance assets, while no interest expense is allocated to the Print and Other segment.

(4) Includes bad debt expense for the Print and Other segment of $7 (Q124), $4 (Q224), $9 (Q324), and $5 (Q424), and bad debt expense for the XFS segment of $8 (Q124), $6 (Q224), $1 (Q324), and $2 (Q424).

For the three years ended December 31, 2024, 2023 and 2022 bad debt expense for the Print and Other segment was $25, $22, and $17 respectively, and bad debt expense for the XFS segment was $17, $6 and $26, respectively.

(5) The Print and Other segment excludes $12 of Reinvention costs and $7 of Transaction and related costs, net for the year ended December 31, 2024.

(6) Intersegment expense is primarily origination fees and commissions made by the Print and Other Segment to the XFS Segment which leases Xerox equipment to third parties.

(7) Segment margin based on External revenue only.

Table of Conten t s

Capital Resources and Liquidity

Our liquidity is primarily dependent on our ability to generate positive cash flows from operations.

Additional liquidity is also provided through access to the financial capital markets and a committed asset-based revolving credit agreement (the ABL Facility), as well as through secured borrowings on our finance receivable balances and the sales and assignment of finance lease receivables.

Accordingly, we believe we have sufficient liquidity to manage the business and settle obligations as they come due.

Additional liquidity is also provided through access to the financial capital markets and a committed asset-based revolving credit agreement (the ABL Facility), as well as the sales and assignment of finance lease receivables.

Our access to financial capital markets may be limited from time to time due to a number of factors, including our credit ratings, the level of our outstanding indebtedness, and prevailing market conditions, including the trading levels of our existing debt securities.

Based on our current level of operations, we do not expect our near term liquidity needs to be dependent on access to the financial capital markets and we believe that our available sources will be adequate to meet our liquidity needs for at least the next 12 months.

Currently, we are not aware of any other trends or demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in our liquidity increasing or decreasing in any material way that will impact our capital needs during or beyond the next 12 months from March 16, 2026, the date these Consolidated Financial Statements were issued.

We cannot assure you, however, that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under the Company's ABL facility and in amounts sufficient to enable us to repay our indebtedness or to fund our other liquidity needs.

The following is a summary of our liquidity position:

1 unchanged sentence

• Total debt at December 31, 2025 was $4,247 million of which $1,488 million is internally allocated to and supports the Company's finance assets.

The remaining debt of $1,658 million is attributable to the core business.

Debt consists of senior unsecured notes, secured borrowings through the securitization of finance assets, and borrowings of $523 million under a Term Loan B credit facility (the TLB).

The remaining debt of $2,759 million is attributable to the non-financing business.

Debt consists of senior unsecured notes, senior secured notes, secured promissory notes, and borrowings under a Term Loan B credit facility (the TLB).

Refer to Note 15 - Debt in the Consolidated Financial Statements for additional details regarding our debt.

• In March 2024, Xerox Holdings Corporation issued $500 million of 8.875% Senior Notes due in 2029, as well as an aggregate $400 million of 3.75% Convertible Senior Notes due in 2030.

In connection with the issuance of the 2030 Notes, the Company entered into privately negotiated capped call transactions, with the option counterparties, including certain of the initial purchasers of the 2030 Notes or their respective affiliates, at a cost of approximately $23 million.

A portion of the aggregate net proceeds was used to repay, through a tender offer, approximately $84 million of the 3.80% Xerox Corporation Senior Notes due in 2024 and approximately $362 million of the 5.00% Xerox Holdings Corporation Senior Notes due in 2025.

The remaining outstanding

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3.80% Senior Notes that were not redeemed as part of the Senior Notes tender offer were repaid in May 2024.

Approximately $388 million, which is the remaining portion of our 5.00% Senior Notes, is due in August 2025.

In November 2024, the Company issued two non-interest bearing, secured promissory notes (the 2025 Note and the 2026 Note, or the Notes).

Each of the Notes has a principal amount of $110 million.

The total amount recorded was $210 million, and was net of unamortized debt discount of $10 million.

The 2025 Note has a maturity date of October 8, 2025, and the 2026 Note has a maturity date of January 30, 2026.

• In June 2024 we amended our ABL facility dated as of May 22, 2023, to (i) increase the commitments of the lenders under the ABL Credit Agreement from $300 million to $425 million and (ii) amend the excess availability used to trigger the fixed charge coverage ratio springing covenant from an amount equal to the greater of (A) $22.5 and (B) 10% of the Line Cap (the lesser of the aggregate amount of Revolving Commitments and the then-applicable Borrowing Base), to an amount equal to the greater of (x) $31.875 million and (y) 10% of the Line Cap.

As of December 31, 2024, there were no borrowings under the ABL Facility, and $2 million of letters of credits were issued under the facility.

During 2024, maximum borrowings under the ABL Facility were $130 million.

• In January 2024, the Company entered into a new agreement with HPS Investment Partners (HPS) to transfer servicing of the majority of funding activity to HPS as well as extend the existing term to five years.

In October 2024, the Company entered into a finance receivables funding agreement with De Lage Landen Financial Services Canada Inc.

(DLL), pursuant to which the Company can offer for sale, and DLL may purchase, certain eligible pools of finance receivables.

• During 2025, we issued $400 million aggregate principal amount of 10.250% Senior Secured First Lien Notes due 2030 (the First Lien Notes), $500 million of aggregate principal amount of 13.500% Senior Secured Second Lien Notes due 2031 (the Second Lien Notes), $250 million aggregate principal amount of 13.00% Senior Notes due 2030 (the 2030 Notes), and $125 million aggregate principal amount of 13.00% Senior Unsecured Notes due 2026 (the 2026 Notes) an incremental term loan borrowing of approximately $327 million (Incremental Term Loans) under Xerox Corporation's Term Loan B (the TLB Facility).

Refer to Note 15 - Debt in the Consolidated Financial Statements for additional information related to our Debt activity.

• In 2025, Xerox Corporation redeemed an aggregate principal amount of $388 million of Senior Notes due August 2025 (2025 Notes) and $136 million of aggregate principal amount of borrowings under the TLB Facility.

Refer to Note 15 - Debt in the Consolidated Financial Statements for additional information related to our Debt activity.

• The Company has a finance receivables funding arrangements with various funding partners in the U.S., Canada, and in EMEA, pursuant to which the Company sells certain eligible pools of finance receivables.

Under certain arrangements, Xerox may earn a specified fee with certain funding partners for servicing receivables from prior service arrangements.

These arrangements have terms up to five years.

We received proceeds of $357 million related to finance receivables sold during 2025, which included sales of leases originated in prior years.

• In December 2024, in connection with the Company's pending acquisition of Lexmark International II, LLC (Lexmark), Xerox Corporation and Xerox Holdings Corporation obtained commitments for new debt financing pursuant to (i) a commitment letter with certain Incremental Commitment Parties for approximately $357 million in senior secured incremental term loan facility (the Incremental Facility), (ii) a commitment letter with senior unsecured commitment parties to provide debt financing in the form of $250 million principal amount of senior unsecured notes, and (iii) a debt commitment letter with Jefferies Finance LLC and Jefferies LLC (collectively, Jefferies), pursuant to which Jefferies agreed to provide debt financing in the form of $250 million senior unsecured notes (the SUNs), and a committed $550 million senior secured term loan facility.

Xerox Corporation and Xerox Holdings Corporation intend to use the majority of the proceeds from these commitments (and/or an equivalent amount of debt securities issued in lieu thereof), together with cash on hand and drawings under Xerox Corporation’s asset-backed revolving credit facility (as needed) to fund the purchase price of Lexmark, and to refinance $388 million of Xerox Holdings Corporation’s 5.00% Senior Notes due 2025.

• We expect Operating cash flows to be between $420 million and $470 million in 2025.

Capital expenditures are expected to be approximately $70 million.

Refer to Note 6 – Acquisitions and Divestitures in the Consolidated Financial Statements for additional information regarding our acquisition of ITsavvy and our pending acquisition of Lexmark, Note 8 – Finance Receivables, Net in the Consolidated Financial Statements for additional information regarding the sale of finance receivables and Note 15 - Debt in the Consolidated Financial Statements for additional information regarding our debt activity.

• As of March 16, 2026 and based on our January availability calculation, we have availability of $382 before letters of credit issued under the ABL Facility of approximately $93.

There are no current borrowings outstanding.

Accordingly, our net availability is approximately $289.

Certain debt covenants limit our total amount of secured debt outstanding.

As of the date of our filing, our capacity under the ABL was not limited by any debt covenants.

Our capacity to borrow under the ABL Facility may be adversely impacted by the terms of the ABL Facility and certain other agreements that govern our debt.

• We expect Operating cash flows to be approximately $360 million in 2026, reflecting the positive impacts of of an overall reduction in finance receivables, as well as higher net interest expense.

Although not committed, we believe we have the ability to sell finance receivables for additional liquidity .

Refer to Note 6 – Acquisitions and Divestitures in the Consolidated Financial Statements for additional information regarding our recent acquisitions, Note 8 – Finance Receivables, Net in the Consolidated Financial Statements for additional information regarding the sale of finance receivables, and Note 15 - Debt in the Consolidated Financial Statements for additional information regarding our debt activity.

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Table of Conten t s

Cash Flow Analysis

4 unchanged sentences

Net cash used in investing activities (698) (198) (5) (500) (193)

Net cash used in financing activities (271) (1,202) (822) 931 (380)

Net cash provided by (used in) financing activities 404 (271) (1,202) 675 931

Effect of exchange rate changes on cash, cash equivalents and restricted cash 4 (28) (1) 32 (27)

Increase (decrease) in cash, cash equivalents and restricted cash 14 (522) (770) 536 248

(Decrease) increase in cash, cash equivalents and restricted cash (66) 14 (522) (80) 536

Cash, cash equivalents and restricted cash at beginning of year 631 617 1,139 14 (522)

Cash, Cash Equivalents and Restricted Cash at End of Year $ 565 $ 631 $ 617 $ (66) $ 14

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Cash Flows from Operating Activities

Net cash provided by operating activities was $511 million for the year ended December 31, 2024.

The $175 million decrease in operating cash from 2023 was primarily due to the following:

• $101 million decrease in pre-tax income before depreciation and amortization, provisions, gains on sales of businesses and assets, divestitures, PARC donation, stock-based compensation, goodwill impairment, restructuring and related costs, net and non-service retirement-related costs.

• $245 million decrease from inventory primarily due to higher purchases related to a change in contractual terms with a large OEM vendor and decreased sales of equipment and supplies.

• $126 million decrease from accrued compensation due to payments of higher year-end accruals.

• $53 million decrease from higher restructuring and related payments.

• $43 million decrease from higher pension contributions.

• $242 million increase from accounts payable primarily due the timing of supplier and vendor payments.

• $76 million increase from accounts receivable primarily due to lower revenues partially offset by timing of collections.

• $49 million increase from finance receivables primarily due to a higher level of run-off as a result of lower originations, partially offset by lower sales of finance receivables under the finance receivables funding agreement.

Net cash provided by operating activities was $224 million for the year ended December 31, 2025, a decrease of $287 million as compared to 2024, reflecting lower operating performance and changes in customer financing and working capital.

The decrease primarily reflected a $336 million decrease in pre-tax income before depreciation and amortization and other non-operating items due to lower profitability.

Cash flow from operating activities was further impacted by a $174 million decrease related to finance receivables, primarily due to lower sales of finance receivables, partially offset by increased portfolio run-off as origination volumes declined.

Working capital changes partially offset these impacts, including lower inventory levels, higher accounts payable and other liabilities due to timing of payments, as well as lower restructuring-related cash outflows.

These favorable working capital movements were partially offset by higher accounts receivable driven by the timing of customer collections.

Refer to Note 8 – Finance Receivables, Net in the Consolidated Financial Statements for additional information regarding the sale of finance receivables.

• $34 million increase due to lower placements of equipment on operating leases.

Net cash provided by operating activities was $686 million for the year ended December 31, 2023.

The $527 million increase in operating cash from 2022 was primarily due to the following:

• $116 million increase in pre-tax income before depreciation and amortization, provisions, gains on sales of businesses and assets, PARC donation, stock-based compensation, goodwill impairment, restructuring and related costs, net and non-service retirement-related costs.

• $755 million increase from finance receivables reflecting the sale of approximately $1,100 million of finance receivables under the finance receivables funding agreement in the current year as well as lower indirect originations due to the change in XFS’s strategy to focus on leasing of Xerox equipment.

These impacts were partially offset by higher originations from increased equipment sales.

Net cash provided by operating activities was $511 million for the year ended December 31, 2024, a decrease of $175 million as compared to 2023, reflecting lower operating performance, higher inventory levels, and increased cash outflows related to compensation, restructuring, and pension contributions.

The decrease reflected a $101 million decrease in pre-tax income before depreciation and amortization and other non-operating items.

Cash flow was further impacted by higher inventory levels, primarily reflecting increased purchases associated with changes in contractual terms with a large OEM vendor, as well as lower sales volumes of equipment and supplies.

These impacts were partially offset by favorable working capital movements, including higher accounts payable due to the timing of supplier and vendor payments, changes in accounts receivable, increased run-off of finance receivables and lower placements of equipment on operating leases.

Refer to Note 8 – Finance Receivables, Net in the Consolidated Financial Statements for additional information regarding the sale of finance receivables.

• $266 million increase from inventory primarily due to the prior year increase in inventory as compared to reductions in inventory in the current year reflecting increased sales of equipment and supplies.

• $43 million increase from accounts receivable due to the lower quarterly revenues partially offset by the timing of collections.

• $22 million increase from lower contributions to our retirement plans mainly due to additional contributions to our U.K.

defined benefit pension plan not required in 2023.

• $14 million increase from accrued compensation related to the year-over-year timing of payments.

• $568 million decrease from accounts payable primarily due to the timing of supplier and vendor payments and lower year-over-year spending.

• $141 million decrease from other current and long-term liabilities mainly attributable to the timing of payments of higher year-end accruals.

• $29 million decrease from higher installs of equipment on operating leases.

Cash Flows from Investing Activities

Net cash used in investing activities for Xerox Holdings was $198 million for the year ended December 31, 2024.

The $193 million increase in the use of cash from 2023 was primarily due to the following:

• $154 million increase from acquisitions.

• Other investing, net of Xerox Holdings includes $19 million of noncontrolling investments as part of our corporate venture capital fund for 2024 as compared to $5 million in the prior year.

Net cash used in investing activities was $5 million for the year ended December 31, 2023.

The $73 million decrease in the use of cash from 2022 was primarily due to lower acquisitions, capital expenditures and corporate venture capital investments, partially offset by lower proceeds from the sale of surplus buildings and other assets.

Net cash used in investing activities was $698 million for the year ended December 31, 2025, an increase of $500 million as compared to 2024, that was primarily driven by the Lexmark Acquisition and higher capital expenditures.

These uses were offset by higher proceeds from the sale of surplus property and assets in the U.S.

and Europe as well as the sale of non-core business assets, and partially offset by lower noncontrolling investments.

Net cash used in investing activities was $198 million for the year ended December 31, 2024, an increase of $193 million as compared to 2023.

The increase was primarily due to higher acquisition-related activity and increased investments, including noncontrolling investments of $19 million in 2024 as compared to $5 million in the prior year.

Cash Flows from Financing Activities

Net cash used in financing activities for Xerox Holdings was $271 million for the year ended December 31, 2024.

The $931 million decrease in the use of cash from 2023 was due to the following:

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• $536 million decrease primarily due to the share repurchase from Icahn and Affiliated Parties in 2023.

• $393 million decrease from net debt activity.

2024 reflects proceeds of $500 million on Senior Notes and $400 million on Convertible Senior Notes offset by net payments of $658 million on Senior Notes, deferred debt issuance costs of $18 million from Senior Notes issuances, $282 million on secured financing arrangements and $28 million on the Term Loan B facility.

The $658 million of net payments on Senior Notes includes $300 million on Senior Notes that matured in May 2024 and $362 million for the early redemption of 2025 Senior Notes offset by a gain on the extinguishment of debt of $4 million.

2023 reflects net proceeds of $524 million from the Term Loan B facility, which is net of an original issue discount of $17 million and debt issuance costs payments of $9 million, and net proceeds of $107 million and $52 million from the refinance of our French and Canadian secured loans, respectively.

These borrowings were offset by payments of $846 million on secured financing arrangements, $300 million on Senior Notes and deferred debt issuance costs payments of $14 million on the ABL Facility and the bridge Loan Facility used to initially fund the Icahn share repurchase, which was repaid in the 2023.

The $846 million of payments on secured financing arrangements includes the early repayments of $270 million for U.S.

secured borrowings.

• $24 million decrease from common stock dividends due to lower outstanding shares.

• $23 million increase from purchases of capped calls.

Net cash used in financing activities for Xerox was $291 million for the year ended December 31, 2024.

The $846 million of payments on secured financing arrangements includes the early repayments of $270 million for U.S.

secured borrowings.

Distributions to Xerox Holdings were $202 million and were primarily used to fund Xerox Holdings continuing dividends to shareholders and share repurchases.

Xerox's distributions to the parent are expected to continue with those distributions primarily being used by Xerox Holdings to fund dividends and share repurchases.

Net cash used in financing activities for Xerox Holdings was $1,202 million for the year ended December 31, 2023.

The $380 million increase in the use of cash from 2022 was primarily due to the following:

• $431 million increase due to the share repurchase from Icahn and Affiliated Parties for $544 million in 2023 compared to $113 million of share repurchases in the prior year under the Company’s open-market share repurchase program.

• $51 million decrease from net debt activity.

The $846 million of payments on secured financing arrangements includes the early repayments of $270 million for U.S.

secured borrowings.

2022 reflects proceeds of $1,193 million on secured financing arrangements offset by payments of $714 million, $300 million on maturing 2022 Senior Notes and $703 million for the early partial redemption of 2023 Senior Notes, which includes a premium payment of $3 million.

Net cash used in financing activities for Xerox was $1,207 million for the year ended December 31, 2023.

The $846 million of payments on secured financing arrangements includes the early repayments of $270 million for U.S.

secured borrowings.

2022 reflects proceeds

Xerox Holdings Corporation is the parent company and conducts the Company’s primary financing, dividend, and capital allocation activities.

Xerox Corporation is the principal operating subsidiary and generates cash that is distributed to the parent to support these activities.

The discussion below addresses financing activities at both levels.

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of $1,193 million on secured financing arrangements offset by payments of $714 million, $300 million on maturing 2022 Senior Notes and $703 million for the early partial redemption of 2023 Senior Notes, which includes a premium payment of $3 million.

Distributions to Xerox Holdings were $722 million and were primarily used to fund Xerox Holdings continuing dividends to shareholders and share repurchases.

Xerox's distributions to the parent are expected to continue with those distributions primarily being used by Xerox Holdings to fund dividends and share repurchases.

Table of Conten t s

Xerox Holdings Corporation

Net cash provided by financing activities for Xerox Holdings was $404 million for the year ended December 31, 2025, as compared to net cash used in financing activities of $271 million in 2024.

The increase in cash provided primarily reflected higher net debt issuances in 2025 and lower dividend payments, partially offset by higher other financing-related activities.

During 2025, financing activities included the issuance of Senior Notes, resulting in approximately $1.2 billion of net debt proceeds, which were partially offset by repayments of existing debt, including Senior Notes, Term Loan B borrowings, secured promissory notes, and secured financing arrangements.

These activities increased net borrowings as compared to the prior year, which included significant debt repayments and refinancing activity.

Cash used in financing activities during 2025 also reflected common stock dividends, which declined compared to 2024 following dividend reductions, as well as commitment fees incurred in connection with the Lexmark Acquisition.

The Company did not incur capped call purchases in 2025.

Net cash used in financing activities for Xerox Holdings was $271 million for the year ended December 31, 2024, a decrease of $931 million in the cash used as compared to 2023.

The decrease was primarily driven by net debt repayment activity and the absence of share repurchases completed in 2023, including the share repurchase from Icahn and affiliated parties.

Cash used in financing activities during 2024 also reflected common stock dividends, which declined compared to 2023 as a result of lower outstanding shares.

Xerox Corporation

Net cash provided by financing activities for Xerox Corporation was $391 million for the year ended December 31, 2025.

Financing activity at the operating company level primarily reflected debt issuances and repayments consistent with those described above, as well as distributions to Xerox Holdings.

Net cash used in financing activities for Xerox Corporation was $291 million for the year ended December 31, 2024.

During 2024, Xerox Corporation distributed $202 million to Xerox Holdings, which was primarily used by the parent to fund dividends and share repurchases.

Distributions from Xerox Corporation to Xerox Holdings are expected to continue and are intended to support the parent company’s capital allocation activities, including dividends and share repurchases.

In addition, financing activity at the operating company level primarily reflected debt issuances and repayments consistent with those described above.

Refer to Note 15 - Debt in the Consolidated Financial Statements for additional information regarding debt activity and Note 22 – Shareholders’ Equity in the Consolidated Financial Statements for additional information regarding the Icahn share repurchase.

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Refer to Note 14 - Supplementary Financial Information in the Consolidated Financial Statements for additional information regarding restricted cash.

Lease Obligations

The Company has significant lease obligations related to real estate, vehicles, and certain equipment used in its operations.

These obligations include both operating leases and finance leases, and lease payments are considered in the Company’s liquidity planning.

Operating Leases

We have operating leases for real estate and vehicles in our domestic and international operations and for certain equipment in our domestic operations.

Additionally, we have identified embedded operating leases within certain supply chain contracts for warehouses, primarily within our domestic operations.

Our leases have remaining terms of up to ten years and a variety of renewal and/or termination options.

As of December 31, 2024 and 2023, total operating lease liabilities were $188 million and $182 million, respectively.

Operating lease obligations primarily relate to facilities, vehicles, and certain supply chain arrangements.

Payments under operating leases represent a recurring use of operating cash flows.

During 2025, operating lease obligations increased primarily due to the Lexmark Acquisition and certain lease modifications;

however, the Company believes its operating cash flows and available liquidity are sufficient to meet these obligations as they come due.

Finance Leases

Xerox has finance leases for equipment in the U.S.

and Europe, as well as for vehicles and related infrastructure, within outsourced warehouse supply arrangements, in the U.S.

These leases have remaining maturities up to five years.

As of December 31, 2024 and 2023, total finance lease liabilities were $53 million and $17 million, respectively.

The increase in finance leases since December 31, 2023 is primarily related to an agreement entered into during the second half of 2024 to lease vehicles in the U.S.

Refer to Note 11 - Lessee in the Consolidated Financial Statements for additional information regarding our right-of-use (ROU) assets and lease obligations associated with our operating and finance leases.

Finance lease obligations relate primarily to equipment and infrastructure used in the Company’s operations.

Obligations under finance leases are treated as financing commitments and are funded through a combination of operating cash flows and financing sources.

The Company continues to manage finance lease obligations within its overall capital structure and liquidity framework.

Additional information regarding the Company’s operating and finance leases, including lease classifications and maturity profiles, is provided in Note 11 - Lessee in the Consolidated Financial Statements.

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Debt and Customer Financing Activities

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Subtotal - Debt issuance costs (59) (30)

Net unamortized (discount) premium (22) (15)

Net unamortized (discount) (38) (22)

Total Debt $ 4,247 $ 3,399

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(1) Represents secured debt issued by subsidiaries of Xerox Corporation as part of the securitization of finance receivables.

As of December 31, 2025, amount reflects debt acquired as a result of the Lexmark Acquisition.

Refer to Note 6 - Acquisition and Divestitures for additional information regarding the Lexmark Acquisition.

(2) 2024 reflects secured debt issued by subsidiaries of Xerox Corporation as part of the securitization of Finance Receivables in the prior year.

These securitizations were repaid during the first quarter 2025

Refer to Note 15 - Debt in the Consolidated Financial Statements for additional information regarding our debt activity.

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Finance Assets and Related Debt

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Our investment in these contracts is reflected in total finance assets, net.

We primarily fund our customer financing activity through cash generated from operations, cash on hand, sales and securitizations of finance receivables and proceeds from capital markets offerings.

We primarily fund our customer financing activity through cash generated from operations, cash on hand, finance receivables sales and proceeds from capital markets offerings.

We have arrangements, in certain international countries where third-party leasing companies or financial institutions independently provide lease financing directly to our customers, on a non-recourse basis to Xerox.

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Total Finance assets, net $ 1,701 $ 1,990

$ 1,990 $ 2,775

(1) Includes (i) Billed portion of finance receivables, net, (ii) Finance receivables, net and (iii) Finance receivables due after one year, net as included in our Consolidated Balance Sheets.

(2) The change from December 31, 2023 includes an increase of $70 million due to currency.

Our lease contracts permit customers to pay for equipment over time rather than at the date of installation;

therefore, we maintain a certain level of debt (that we refer to as financing debt) to support our investment in these lease contracts, which are reflected in Total finance receivables, net.

therefore, we maintain a certain level of debt (that we refer to as financing debt) to support our investment in these lease contracts, which are reflected in Total finance assets, net.

For this financing aspect of our business, we maintain an assumed 7:1 leverage ratio of debt to equity as compared to our finance assets.

Approximately 35% of our Total Finance assets, net balance at December 31, 2025 includes indirect lease financing primarily provided to end-user customers who purchased Xerox and non-Xerox equipment sold through distributors, resellers and dealers.

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Table of Conten t s

Based on this leverage, the following represents the breakdown of total debt between financing debt and core debt:

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_____________

(1) Finance receivables debt is the basis for our calculation of “Cost of financing” expense in the Consolidated Statements of (Loss) Income.

(1) Finance receivables debt is the basis for our calculation of Equipment financing interest expense, which is included in Cost of services, maintenance, rentals and other in the Consolidated Statements of (Loss) Income.

At December 31, 2025, leverage was assessed against the total debt of Xerox Holdings Corporation and Xerox Corporation since the debt held by Xerox Holdings Corporation is guaranteed by Xerox Corporation and the funds from that borrowing were contributed in full by Xerox Holdings Corporation to Xerox Corporation.

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Sales of Finance Receivables

The Company has expanded the finance receivables funding agreement with an affiliate of HPS Investment Partners (HPS) pursuant to which the Company agreed to offer for sale, and HPS agreed to purchase, certain eligible pools of finance receivables, on a monthly basis, in transactions structured as "true sales at law," and bankruptcy remote transfers.

We have received an opinion to that effect from outside legal counsel.

Accordingly, the receivables sold are derecognized from our financial statements and HPS does not have recourse back to the Company for uncollectible receivables.

In addition, the agreement provides for the sale of the underlying leased equipment to HPS, with a commission paid by HPS covering the value associated with the underlying equipment being sold to HPS.

The Company retains a first right of refusal to repurchase the underlying equipment at the end of the lease term, to the extent offered for sale by HPS, at its then fair value.

In January 2024, we entered into a new agreement with HPS to transfer the servicing of the majority of funding activity to HPS as well as extend the existing term to five years.

This agreement automatically renews for a one-year period unless terminated by either the Company or HPS.

Xerox will be required to pay a specified fee to

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service the Company’s retained receivables.

Xerox will continue to service the lease receivables from prior arrangements with HPS for a specified fee.

In October 2024, the Company entered into a finance receivables funding agreement with De Lage Landen Financial Services Canada Inc.

(DLL), pursuant to which the Company can offer for sale, and DLL may purchase, certain eligible pools of finance receivables structured as “true sales at law” and bankruptcy remote transfers and we have received an opinion to that effect from outside counsel.

This finance receivables funding agreement has an initial term of five years, with automatic one-year extensions thereafter, unless terminated by either the Company or DLL.

The Company will be paid a commission on lease receivables sold and will continue to service the lease receivables under the finance receivables funding agreement.

If the portfolio performs above a certain level of incremental service, a fee can be earned annually.

Refer to Note 8 - Finance Receivables, Net in the Consolidated Financial Statements for additional information regarding our sales of finance receivables.

Third Party Leasing Programs

In 2023, the Company entered into an agreement with PEAC Solutions (a subsidiary of HPS) that named PEAC as the provider of certain leasing and financial services programs for Xerox and non-Xerox equipment sold through our U.S.

The Company has an agreement with PEAC Solutions (PEAC) to provide leasing and financial services programs for Xerox and non-Xerox equipment sold through our U.S.

network of independent dealers and resellers.

Our partnership with PEAC Solutions was further expanded to include the transition of some XFS U.S.

employees in risk, IT, and operations to PEAC Solutions.

PEAC Solutions is Xerox's preferred financing partner, primary funder, and service provider for XBS leases in the U.S.

In a addition, PEAC also provides risk, IT, and operations support related to these programs, and is the Company's preferred financing partner, primary funder, and service provider for XBS leases in the U.S.

Capital Market/Debt Activity

During 2024, we received proceeds of $900 million from the issuance of Senior Notes and Convertible Senior Notes.

We made net payments of $658 million on Senior Notes, including $300 million on Senior Notes that matured in May 2024 and $362 million for the early redemption of 2025 Senior Notes offset by early redemption premium of $4 million.

In addition, we made payments of $18 million on deferred debt issuance costs from Senior Notes issuances, $282 million on secured financing arrangements and $28 million on the Term Loan B facility.

During 2025, we received proceeds of approximately $375 million from the issuance of Senior Notes, and approximately $904 million of Secured Debt.

We made net payments of $388 million on the 5.000% Senior Notes due in August 2025, $144 million on the Term Loan B facility (TLB Facility), $110 million on secured promissory notes and $72 million on secured financing arrangements.

Refer to Note 15 - Debt in the Consolidated Financial Statements for additional information regarding our debt activity, as well as our secured financing arrangements.

Financial Instruments

In September 2024, we entered into two floating-to-fixed interest rate swaps for $300 million to hedge against interest rate volatility associated with any of our floating rate debt which was primarily under our Term Loan B Credit Agreement (TLB).

The TLB had an outstanding principal balance of $523 million as of December 31, 2024.

The remaining portion of the TLB of $223 million is not hedged, and is subject to interest rate fluctuations.

In 2024, we entered into two floating-to-fixed interest rate swaps to hedge against interest rate volatility associated with any of our floating rate debt which was primarily under our Term Loan B Credit Agreement (TLB).

During the third quarter 2025, the Company voluntarily de-designated certain interest rate swaps with a notional value of $300, which were previously accounted for as cash flow hedges of variable-rate debt.

The de-designation was made because the Company may, from time to time, prepay portions of the underlying debt, resulting in forecasted interest payments that are no longer considered highly probable.

Following the de-designation, the swaps continue to be carried at fair value on the balance sheet.

Changes in fair value are recognized in earnings in interest expense were not material during 2025.

Amounts previously recorded in accumulated other comprehensive loss related to the hedged cash flows was immaterial and was reclassified to earnings during 2025.

During the fourth quarter, a $125 interest rate swap was terminated.

Accordingly, the notional value of the remaining swap at December 31, 2025 was $175.

Refer to Note 16 - Financial Instruments in the Consolidated Financial Statements for additional information.

In connection with the issuance of the 2030 Note, Xerox Holdings issued a pre-funded warrant (the Warrant), exercisable for 2,160,256 shares of Xerox Holdings Corporation’s common stock (Common Stock), at an exercise price of $1.00 per share, of which $0.99 was prefunded, to one of the purchasers of the 13.00% Senior Notes due July 2030 (the 2030 Note).

The exercise price and the number of shares of common stock issuable upon exercise of the Warrant were subject to appropriate adjustment in the event of certain stock dividends, stock splits, stock combinations, or similar events effecting the Common Stock.

The Warrant was exercised during the third quarter 2025.

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Table of Conten t s

In February 2026, the Company issued a pro-rata distribution of warrants to holders of Xerox’s common stock, par value $1.00 per share, Series A Convertible Perpetual Voting Preferred Stock, and 3.75% Convertible Senior Notes due 2030.

Refer to Refer to Note 15 - Debt in the Consolidated Financial Statements for additional information regarding the issuance of the 2030 Note, and Note 17 - Fair Value of Financial Assets and Liabilities in the Consolidated Financial Statements for additional information regarding the warrants that were issued to a shareholder during the third quarter 2025.

Refer to Note 26 - Subsequent Events in the Consolidated Financial Statements for additional information related to the pro-rata distribution of warrants in 2026.

Share Repurchase Programs - Treasury Stock

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Aggregate dividends of $27 million, $128 million, and $146 million were declared on common stock in 2025, 2024 and 2023, respectively.

The decrease in dividends since 2022 primarily reflects lower shares of common stock outstanding as a result of our share repurchase programs.

The decrease in dividends since 2024 primarily reflects the change in the dividend policy to reduce the Xerox annual dividend from $1 per share to 50 cents per share, starting with the dividend declared in the first quarter of 2025, and the subsequent further reduction to 10 cents per share, starting with the dividend declared in the second quarter of 2025.

Aggregate dividends of $14 million were declared on preferred stock in 2025, 2024 and 2023, respectively.

In conjunction with this financing, the Xerox Board of Directors approved a change in the dividend policy to reduce the Xerox annual dividend from $1 per share to 50 cents per share starting with the dividend expected to be declared in the first quarter of 2025.

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Liquidity and Financial Flexibility

We manage our worldwide liquidity using internal cash management practices, which are subject to (i) the statutes, regulations and practices of each of the local jurisdictions in which we operate, (ii) the legal requirements of the agreements to which we are a party and (iii) the policies and cooperation of the financial institutions we utilize to maintain and provide cash management services.

Our principal debt maturities are in line with historical and projected cash flows and are spread over the next five years as follows:

Our principal debt maturities are spread over the next five years as follows:

(in millions) Xerox Holdings Corporation Xerox Corporation Xerox - Other Subsidiaries (1)

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Total $ 2,025 $ 2,316 $ 3 $ 4,344

_____________

(1) Represents subsidiaries of Xerox Corporation.

Refer to Note 15 - Debt in the Consolidated Financial Statements for additional information regarding our debt.

As of December 31, 2025, amount reflects debt acquired as a result of the Lexmark Acquisition.

Refer to Note 6 - Acquisitions and Divestitures for additional information regarding the Lexmark Acquisition

We have entered into transactions, and continue to seek opportunities to reduce our borrowings in a cost and cash efficient manner, including strategies to retire debt that has recently traded at significant discounts.

Refer to Note 15 - Debt in the Consolidated Financial Statements and Note 26 - Subsequent Events in our Consolidated Financial Statements for additional information regarding our debt.

Lexmark Acquisition

During the fourth quarter 2025, adjustments were recorded to correct certain errors in the Lexmark Acquisition preliminary purchase price allocation that existed as of the acquisition date.

The errors resulted from misstated balances of accounts receivable, contract assets, and contract liabilities in Lexmark's opening balance sheet as of

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July 1, 2025, and were subsequently reflected in the Company's Consolidated Balance Sheet as of September 30, 2025.

Accordingly, Accounts receivable, net decreased by $73, Other current assets increased by $20, Deferred tax assets increased by $7, Accrued expenses and other current liabilities decreased by $11, and Other long-term liabilities decreased $7.

The identified errors had an immaterial impact on the Lexmark preliminary purchase accounting through September 30, 2025.

As a result of the correction, an increase of $28 was recorded to Goodwill.

In addition, immaterial measurement period adjustments were also recorded which resulted in a further increase of $11 to Goodwill associated with the Lexmark Acquisition.

The allocation of the purchase price for this acquisition has been prepared on a preliminary basis, and adjustments may continue to be required as additional information becomes available.

Additionally, as required by the Lexmark Agreement, Xerox provided its determination of the Closing Statement (as defined in the Lexmark Agreement) to the Lexmark Seller.

The final purchase price is subject to a final working capital adjustment, which we are still finalizing.

Pension and Retiree Health Benefit Plans

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Our 2025 cash contributions for these plans were $140 million for our defined benefit pension plans and $21 million for our retiree health plans.

In 2025, based on current actuarial calculations, we expect to make contributions of approximately $140 million to our worldwide defined benefit pension plans and $20 million to our retiree health benefit plans.

In 2026, based on current actuarial calculations, we expect to make contributions of approximately $145 million to our worldwide defined benefit pension plans and approximately $20 million to our retiree health benefit plans.

Approximately $95 million of estimated contributions for 2026 are for our U.S.

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The projected benefit obligations for these benefit plans at December 31, 2025 exceeded the fair value of the assets of those plans by $1,045 million, which is a decrease of $22 million from the balance at December 31, 2024, of $1,067 million.

The decrease is largely due to increased discount rates and the resultant decrease in projected benefit obligations.

The decrease is largely due to an increase in actual returns on plan assets, partially offset by the impact of lower actuarial gains, higher interest cost, and the Lexmark Acquisition.

Cash contributions to our retiree health plans are made each year to cover medical premiums and claim costs incurred during the year.

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and Canada operations.

The unfunded balance of our retiree health plans of $173 million at December 31, 2024 decreased by $20 million from the balance at December 31, 2023, primarily due to benefit payments as well as increased discount rates.

The unfunded balance of our retiree health plans of $179 million at December 31, 2025 increased by $6 million from the balance at December 31, 2024, primarily due to the adverse impact of currency, higher actuarial losses and the Lexmark Acquisition.

Refer to Note 18 - Employee Benefit Plans in the Consolidated Financial Statements for additional information regarding contributions to our defined benefit pension and retiree health plans.

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Our purchase orders under such agreements are made in the normal course of business and typically have a lead time of three months.

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Shared Services and Technology Arrangements

In the third quarter 2024, Xerox entered into an agreement with HCL Technologies Limited (HCL), to renew and extend the original shared services arrangement contract, entered into in 2019, in which HCL provides certain global administrative and support functions to Xerox.

In addition to the existing shared services arrangement, HCL will support Xerox's Global Business Services (GBS) organization with professional services support, sales efficiency, and remote problem-solving.

Xerox can terminate the arrangement at any time starting in July 2025, subject to payment of termination fees that decline over the term, or for cause.

In the second quarter 2024, Xerox entered into a seven year agreement with Tata Consulting Services (TCS), for the purpose of consolidating Xerox’s technology services to improve business outcomes, migrate legacy data centers to the cloud, deploy a cloud-based digital ERP platform to transform business processes, and incorporate generative artificial intelligence (GenAI) into operations to help drive sustainable growth.

The agreement expanded Xerox's previous partnership entered into with TCS in 2021, under which TCS will continue to provide business processing outsourcing services in support of our global finance and accounting organization;

there were no changes to the terms of the business processing outsourcing services agreement.

Xerox can terminate the arrangement with 90 days' notice, subject to payment of a termination fee.

During 2024, Xerox entered into an agreement with HCL Technologies Limited (HCL), to renew and extend shared services arrangements, in which HCL provides certain global administrative and support functions to Xerox.

Under these additional shared services arrangements, HCL will support Xerox's Global Business Services (GBS) organization with professional services support, sales efficiency, and remote problem-solving.

Effective July 2025, Xerox is able to terminate the arrangement at any time, subject to payment of termination fees that decline over the term, or for cause.

During 2024, Xerox entered into a seven year agreement with Tata Consulting Services (TCS) to assist in consolidating Xerox’s technology services to improve business outcomes, migrate legacy data centers to the cloud, deploy a cloud-based digital ERP platform to transform business processes, and incorporate generative artificial

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Table of Conten t s

intelligence (GenAI) into operations to help drive sustainable growth.

The agreement expanded Xerox's previous partnership, and TCS will continue to provide business processing outsourcing services in support of our global finance and accounting organization.

There were no changes to the terms of the business processing outsourcing services agreement and Xerox can terminate the arrangement with 90 days' notice, subject to payment of a termination fee.

In connection with the technology agreement with TCS, Xerox also entered into seven-year agreements with both SAP Limited (SAP), who will provide Xerox with a cloud-based digital ERP platform, and Microsoft, who will provide their Azure cloud platform services.

In the second quarter 2024, Xerox entered into a five-year agreement with Verizon Business Services (Verizon) to provide their Network as a Service (NaaS) solutions framework as part of Xerox's Reinvention.

During 2024, Xerox entered into a five-year agreement with Verizon Business Services (Verizon) to provide their Network as a Service (NaaS) solutions framework as part of Xerox's Reinvention.

Under the terms of the agreement, Verizon will provide a secure network platform solution delivering network services to Xerox business locations globally.

The approximate aggregate spending commitments related to these shared services and technology arrangements are as follows:

The remaining approximate aggregate spending commitments related to these shared services and technology arrangements are as follows:

(in millions) December 31, 2025 Agreement Term

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Refer to Note 20 - Contingencies and Litigation in the Consolidated Financial Statements for additional information regarding our other contingencies and commitments.

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Off-Balance Sheet Arrangements

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We enter into the following arrangements that have off-balance sheet elements:

• We have a facility in Europe where we sell certain accounts receivables on a recurring basis.

• We have two facilities in Europe where we sell certain accounts receivables on a recurring basis.

Refer to Note 7 - Accounts Receivable, Net in the Consolidated Financial Statements for further information regarding accounts receivable sales.

• Since 2022, the Company has entered into Master Agreements for the sale and assignment of lease receivables with two counterparties that establishes a committed sale and purchase facility pursuant to which the Company agreed to offer for sale certain eligible pools of finance receivables relating to equipment leases on a monthly basis in transactions intended to be true sales.

• Since 2022, the Company has entered into Master Agreements for the sale and assignment of lease receivables with various counterparties that establishes a committed sale and purchase facility pursuant to which the Company agreed to offer for sale certain eligible pools of finance receivables in transactions intended to be true sales.

For the three years ended December 31, 2025, 2024, and 2023, the Company sold finance leases under these agreements, and received proceeds of $357 million, $752 million, and $1,102 million, respectively.

We will continue to service a portion of those lease receivables, and we will earn a servicing fee on a portion of those lease receivables serviced.

Refer to Note 8 - Finance Receivables, Net in the Consolidated Financial Statements for further information regarding this arrangement.

In some cases we will continue to service a portion of those lease receivables, and we will earn a servicing fee on a portion of those lease receivables serviced.

Refer to Note 8 - Finance Receivables, Net in the Consolidated Financial Statements for further information regarding these arrangements.

As of December 31, 2025, we do not believe we have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

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Table of Conten t s

Non-GAAP Financial Measures

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Adjusted Earnings Measures

• Adjusted Net Income and Earnings per share (Adjusted EPS)

• Adjusted Net (Loss) Income and Earnings per share (Adjusted EPS)

• Adjusted Effective Tax Rate

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Non-service retirement-related costs:

Our defined benefit pension and retiree health costs include several elements impacted by changes in plan assets and obligations that are primarily driven by changes in the debt and equity markets as well as those that are predominantly legacy in nature and related to employees who are no longer providing current service to the Company (e.g., retirees and ex-employees).

retirees and ex-employees).

These elements include (i) interest cost, (ii) expected return on plan assets, (iii) amortization of prior plan amendments, (iv) amortized actuarial gains/losses and (v) the impacts of any plan settlements/curtailments.

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This approach is consistent with the classification of these costs as non-operating in Other expenses, net.

Adjusted earnings will continue to include the service cost elements of our retirement costs, which is related to current employee service as well as the cost of our defined contribution plans.

Adjusted earnings will continue to include the service cost elements of our retirement costs, which are related to current employee service as well as the cost of our defined contribution plans.

Transaction and related costs, net:

Transaction and related costs, net are costs and expenses primarily associated with certain major or significant strategic M&A projects.

These costs are primarily for third-party legal, accounting, consulting and other similar type professional services as well as potential legal settlements that may arise in connection with those M&A transactions.

These costs are primarily for third-party legal, accounting, consulting and other similar types of professional services as well as potential legal settlements that may arise in connection with those M&A transactions.

These costs are considered incremental to our normal operating charges and were incurred or are expected to be incurred solely as a result of the planned transactions.

Accordingly, we are

Accordingly, we

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excluding these expenses from our Adjusted Earnings Measures in order to evaluate our performance on a comparable basis.

Table of Conten t s

exclude these expenses from our Adjusted Earnings Measures in order to evaluate our performance on a comparable basis.

Discrete, unusual or infrequent items:

We excluded the following items, when applicable, given their discrete, unusual or infrequent nature and their impact on the comparability of our results for the current period to prior periods:

• Inventory impact related to the exit of certain production print manufacturing operations

• Stock compensation expense associated with the accelerated vesting of all outstanding equity awards, according to the terms of the award agreement, in connection with the passing of Xerox Holding's former CEO

• Goodwill impairment loss

We excluded the following items, when applicable, given their discrete, unusual or infrequent nature and their impact on the comparability of our results for the period to prior periods and future expected trends:

• Inventory-related impact - exit of certain production print manufacturing operations

• Goodwill impairment

• Divestitures

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• Reinvention-related costs

• Contract termination costs - product supply

• Loss (gain) on early extinguishment of debt

• Tax Indemnification - Conduent

• Gains and Losses on early extinguishment of debt

• Commitment fee expenses

• Lexmark - pre-existing employment agreements settled post-acquisition

• Lexmark - inventory-related purchase accounting adjustment

• Lexmark - fixed asset-related purchase accounting adjustment

• Lexmark acquisition financing - escrow interest, net

• Goodwill impairment income tax

• Income tax on PARC Donation

• Deferred tax asset valuation allowance

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Adjusted Net Income and EPS Reconciliation

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Adjusted Net (Loss) Income and EPS Reconciliation

Year Ended December 31,

2025 2024 2023

(in millions, except per share amounts) Net (Loss) Income EPS Net (Loss) Income EPS Net (Loss) Income EPS

Reported (1) (2)

(in millions, except per share amounts) Net (Loss) EPS Net (Loss) Income EPS Net Income EPS

$ (1,029) $ (8.25) $ (1,321) $ (10.75) $ 1 $ (0.09)

Inventory-related impact - exit of certain production print manufacturing operations (2)

Accelerated share vesting — — 21

Goodwill impairment — 1,058 —

6 unchanged sentences

Transaction and related costs, net 34 (31) —

Contract termination costs - product supply — — 33

Loss (gain) on early extinguishment of debt 5 (2) 10

Tax indemnification - Conduent — — (7)

(Gain) Loss on early extinguishment of debt (2) 10 5

Commitment fee expenses (3)

Lexmark - pre-existing employment agreements settled post-acquisition 25 — —

Lexmark - inventory-related purchase accounting adjustment (4)

Lexmark - fixed asset-related purchase accounting adjustment 29 — —

Lexmark Acquisition financing - escrow interest, net (5)

Income tax on Goodwill impairment — (43) —

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_____________

(1) Net (Loss) income and EPS.

(2) Full-year 2024 Pre-Tax (Loss) and Margin, and Diluted (Loss) per Share, include the following:

Q1-24 $129 million pre-tax ($100 million after-tax) Reinvention-related charge, or $0.81 per share, primarily related to the exit of certain Production Print manufacturing operations and geographic simplification;

Q3-24 pre-tax non-cash goodwill impairment charge of $1,058 million ($1,015 million after-tax), or $8.17 per share;

Q4-24 $37 million pre-tax ($28 million after-tax) write-off of intangibles, or $0.22 per share, and $19 million of pre-tax ($15 million after-tax) Reinvention-related and acquisition charges, or $0.12 per share.

Full year 2024 EPS also includes a Q3-24 tax expense charge of $161 million, or $1.30 per share, related to the establishment of a valuation allowance against certain deferred tax assets to reflect their realizability.

This adjustment was excluded due to its unique nature and significant impact which is not considered part of our core operations.

Full year 2023 includes a Q2-23 net pre-tax PARC donation charge of $132 million ($92 million after-tax), or $0.58 per share, and a Q4-23 $104 million pre-tax Restructuring and related costs, net charge ($78 million after-tax), or $0.52 per share, related to the Reinvention-related workforce reduction.

(3) Reflects the reduction of inventory of approximately $45 million and the cancellation of related purchase contracts of approximately $6 million, as a result of the exit of certain production print manufacturing operations during the year ended December 31, 2024.

(1) Full-year 2025 Net (Loss) and Diluted (Loss) per Share include the following:

Q1-25 charge to tax expense related to the establishment of $59 million of valuation allowances, or $0.47 per diluted share, and $18 million of after-tax financing-related charges, or $0.14 per diluted share, related to our debt offering;

Q2-25 charge of $22 million, net of tax, of interest and financing-related charges, net, or $0.17 per diluted share, related to recently completed borrowings in support of the Lexmark acquisition financing, repayment of existing borrowings, and general corporate purposes, and $28 million of tax expense, or $0.22 per diluted share, related to interest expense that was not deductible according to tax guidelines in place as of June 30, 2025;

Q3-25 inventory-related purchase accounting adjustment, related to the recent acquisition of Lexmark, of $85 million ($102 million pre-tax) or $0.67 per diluted share, and a tax expense charge of $467 million, or $3.69 per diluted share, related to the establishment of a valuation allowance against certain deferred tax assets to reflect their realizability.

Full-year 2024 Net (Loss) and Diluted (Loss) per Share include the following:

Q1-24 $100 million after-tax Reinvention-related charge, or $0.81 per share, primarily related to the exit of certain Production Print manufacturing operations and geographic simplification;

Q2-24 $23 million ($17 million after-tax), or $0.14 per share, related to insurance proceeds from a legal settlement for the reimbursement of certain legal and other professional costs, associated with the terminated proposal to acquire HP Inc.

in early 2020;

Q3-24 an approximately $1.0 billion after-tax (approximately $1.1 billion pre-tax) non-cash goodwill impairment charge, or $8.17 per diluted share, a tax expense charge of $161 million, or $1.30 per diluted share, related to the establishment of a valuation allowance against certain deferred tax assets to reflect their realizability;

Q4-24 $37 million pre-tax ($28 million after-tax) write-off of intangibles, or $0.22 per share, and $19 million of pre-tax ($15 million after-tax) Reinvention and transaction-related costs, net or $0.12 per share.

The tax expense charges related to the establishment of valuation allowances in the third quarter 2025 and 2024, respectively, were excluded due to their unique nature and significant impacts which are not considered part of our core operations.

(2) As a result of the exit of certain production print manufacturing operations, Cost of sales and Cost of services, maintenance, rentals and other includes inventory-related charges of $24 and $8 for the years ended December 31, 2025 and 2024, respectively, as well as the cancellation of related purchase contracts $— and $43 for the years ended December 31, 2025 and 2024, respectively.

(3) Primarily reflects fees related to financing transactions for the Lexmark Acquisition, repayment of existing borrowings, and general corporate purposes, which includes:

the private offering of $400 million in aggregate principal amount of 10.250% Senior Secured First Lien Notes due 2030 and $500 million aggregate principal amount of 13.500% Senior Secured Second Lien Notes Due in 2031;

the private offering of $250 million aggregate principal amount of 13.00% Senior Notes due 2030;

and an incremental term loan borrowing of $327 million under the First Lien Term Loan Credit Agreement.

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(4) Reflects a purchase accounting adjustment related to the Lexmark Acquisition, for cost associated with a net inventory write up.

(5) Reflects net interest expense on net proceeds received from debt issuances which were placed in escrow prior to the completion of the Lexmark Acquisition.

(6) Reflects the change in the realizability of the PARC donation tax benefit recognized in the second quarter of 2023.

(7) Reflects the establishment of a valuation allowance against certain deferred tax assets to reflect their realizability.

(8) Refer to Adjusted Effective Tax Rate reconciliation.

2 unchanged sentences

Excludes shares associated with our Series A convertible preferred stock, which were anti-dilutive for the year ended December 31, 2025.

Xerox 2024 Annual Report 68

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Adjusted Effective Tax Rate Reconciliation

6 unchanged sentences

(Loss) Income Income Tax

(Benefit) Expense Effective

Expense Effective

Tax Rate Pre-Tax

4 unchanged sentences

— — 1,058 43 — —

PARC donation (2)

Income Tax on PARC donation (2)

— (20) — — 132 40

Deferred tax asset valuation allowance (2)

— (517) — (169) — —

Non-GAAP Adjustments (3)

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(1) Pre-tax (loss) and Income tax expense (benefit).

(2) Refer to Adjusted Net Income and EPS reconciliation for details.

(3) The tax impact on Adjusted Pre-Tax Income is calculated under the same accounting principles applied to the Reported Pre-Tax Loss under ASC 740, which employs an annual effective tax rate method to the results.

(2) Refer to Adjusted Net (Loss) Income and EPS reconciliation for details.

(3) Reflects the tax impacts of pre-tax adjustments.

(4) For 2024 and 2023, the tax impact on the Adjusted Pre‐Tax (Loss) Income is calculated under the same accounting principles applied to the As Reported Pre-Tax (Loss) under ASC 740, which employs an annual effective tax rate method to the results.

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Adjusted Operating Income and Margin Reconciliation

1 unchanged sentence

2025 2024 2023

(in millions) (Loss) Profit Revenue Margin Profit (Loss) Revenue Margin (Loss) Profit Revenue Margin

(in millions) (Loss) Profit Revenue Margin (Loss) Profit Revenue Margin Profit (Loss) Revenue Margin

Net (Loss) Income (1)

$ (1,029) $ 7,022 $ (1,321) $ 6,221 $ 1 $ 6,886

Income tax expense (benefit) 541 — 105 — (29) —

Pre-tax (loss) $ (488) $ 7,022 (6.9) % $ (1,216) $ 6,221 (19.5) % $ (28) $ 6,886 (0.4) %

Inventory impact related to the exit of certain Production Print manufacturing operations (1)

Reinvention Costs 12 — —

Accelerated share vesting — — 21

Goodwill impairment — 1,058 —

Inventory impact related to the exit of certain Production Print manufacturing operations (2)

Lexmark - inventory-related purchase accounting adjustment 102 — —

Lexmark - fixed asset-related purchase accounting adjustment 29 — —

Lexmark - pre-existing employment agreements settled post-acquisition 25 — —

Reinvention-related costs 17 12 —

Restructuring and related costs, net 66 112 167

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_____________

(1) Reflects the reduction of inventory of approximately $45 million and the cancellation of related purchase contracts of approximately $6 million, as a result of the exit of certain production print manufacturing operations during the year ended December 31, 2024.

(2) Includes $38 million of insurance proceeds related to a legal settlement for the reimbursement of certain legal and other professional costs, associated with a past potential merger, for the year ended December 31, 2024.

(1) Net (Loss) Income and Revenue.

(3) Includes non-service retirement-related costs.

(4) Includes non-financing interest expense of $248 million $119 million $68 million for the three years ended December 31, 2025, 2024 and 2023, respectively.

The increases in non-financing interest expense in 2025 relates to the recently completed borrowings in support of the Lexmark Acquisition financing, repayment of existing borrowings, and general corporate purposes.

2024 includes $38 million of insurance proceeds from a legal settlement for the reimbursement of certain legal and other professional costs, associated with the terminated proposal to acquire HP Inc.

in early 2020.

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Pro Forma Basis

To better understand the trends in our business, we discuss our 2025 pro forma operating results by comparing them against 2024 pro forma results.

The 2025 pro forma results include estimated results of Lexmark, and the 2024 pro forma results include estimated results for both Lexmark and ITsavvy.

ITsavvy is included in our 2025 reported results for the entirety of the year, as the effective date of acquisition was November 20, 2024.

Lexmark is included in our 2025 results as of July 1, 2025, the effective date of acquisition.

We refer to comparisons against these adjusted results as “pro forma” basis comparisons.

The pro forma information has been prepared in accordance with Article 11 of Regulation S-X, "Pro Forma Financial Information”.

The pro forma combined statements of operations for the years ended December 31, 2025 and 2024 combine the Consolidated Statements of Operations of Xerox giving effect to the Lexmark Acquisition and ITsavvy as if they had occurred on January 1, 2024 and 2023, respectively.

The pro forma information is presented to facilitate comparisons with our results following these acquisitions.

The historical results of Xerox, ITsavvy and Lexmark have been adjusted to reflect the costs of financing the transactions, fair value adjustments related to inventory, real and personal property (equipment and computer hardware and software), and intangible assets.

In addition, adjustments were made to conform both ITsavvy and Lexmark's accounting policies to those of Xerox, including deferred revenue and inventory.

In accordance with Article 11 of Regulation S-X, these proforma results exclude adjustments associated with transaction related costs which are already included in the historical financial statements.

We believe comparisons on a pro forma basis are more meaningful than the actual comparisons given the size and nature of these acquisitions.

We believe the pro forma basis comparisons allow investors to have a better understanding and additional perspective of the expected trends in our business as well as the impact of these acquisitions on the Company’s operations.

The pro forma financial information is based upon available information and assumptions that we believe are reasonable and is for illustrative purposes only.

The financial results may have been different if the transactions described above had been completed sooner.

You should not rely on the pro forma financial information as being indicative of the historical results that would have been achieved if these transactions and events had been completed as of January 1, 2024 and 2023.

The pro forma combined financial information below should be read in conjunction with the consolidated financial statements and related notes of the Company included elsewhere in this Form 10-K.

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Pro Forma Adjusted Operating Income and Margin Reconciliation

For the year ended December 31,

As Reported Pro Forma (1)

(in millions) 2025

2025 2024 As Reported Change Pro Forma (1) Change

Pre-tax loss (2)

$ (488) $ (1,216) $ (427) $ (1,549) $ 728 $ 1,122

Goodwill impairment — 1,058 — 1,058 (1,058) (1,058)

Inventory-related impact - exit of certain production print manufacturing operations (3)

24 51 24 51 (27) (27)

Lexmark - inventory-related purchase accounting adjustment (4)

102 — 10 92 102 (82)

Lexmark - fixed asset-related purchase accounting adjustment (4)

29 — 67 61 29 6

Lexmark - settlement of pre-existing employment agreements — — — 19 — (19)

Lexmark - transaction and related costs, net — — 14 — — 14

Lexmark - pre-existing employment agreements settled post-acquisition 25 — 25 — 25 25

Lexmark - sales of assets — — — (40) — 40

Reinvention-related costs

17 12 17 12 5 5

Restructuring and related costs, net 66 112 65 109 (46) (44)

Amortization of intangible assets 83 73 125 328 10 (203)

Divestiture (4) 47 (4) 47 (51) (51)

Transaction and related costs, net

34 7 34 7 27 27

Other expenses, net (5), (6), (7)

360 158 395 358 202 37

Adjusted $ 248 $ 302 $ 345 $ 553 $ (54) $ (208)

Revenue 7,022 6,221 7,962 8,620 801 (658)

Pre-tax Loss Margin (6.9) % (19.5) % (5.4) % (18.0) % 12.6 pts 12.6 pts

Adjusted Operating Income Margin 3.5 % 4.9 % 4.3 % 6.4 % (1.4) pts (2.1) pts

(1) Reflects the inclusion of Lexmark as if it was acquired on January 1, 2024, and ITSavvy was acquired on January 1, 2023.

Refer to the "Pro Forma Basis" section above for an explanation of this measure.

(2) Pre-tax loss.

(3) As a result of the exit of certain production print manufacturing operations, Cost of sales and Cost of services, maintenance, rentals and other includes inventory-related charges of $ 24 and $ 8 for the years ended December 31, 2025 and 2024, respectively, as well as the cancellation of related purchase contracts $ — and $ 43 for the years ended December 31, 2025 and 2024, respectively

(4) Reflects the related impacts to Cost of sales for the purchase accounting adjustments to recognize inventory and fixed assets at fair value.

(5) Includes non-service retirement-related costs.

(6) Includes non-financing interest expense of $ 248 million and $ 119 million for the years ended December 31, 2025, and 2024 , respectively.

2024 includes $38 million of insurance proceeds from a legal settlement for the reimbursement of certain legal and other professional costs, associated with the terminated proposal to acquire HP Inc.

in early 2020.

(7) Includes pro forma adjustments for interest and amortization of debt issuance costs partially offset by an adjustment related to pension benefits (excluding service cost).

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis