Xerox reported a loss of $0.10 per share for the quarter ended December 31, 2025, compared with Zacks Consensus Estimate of a $0.15 per-share loss and earnings of $0.36 per share in Q4 2024. Revenue for the period fell short of Wall Street forecasts, driven by a 5% year-over-year decline in equipment sales and flat services revenue. Gross margin contracted by 120 basis points to 27.3% as supply-chain pressures and freight costs remained elevated. Free cash flow declined to $120 million from $160 million a year ago, reflecting higher working capital requirements and timing of customer receipts.

On February 11, 2026, Xerox will distribute warrants on a one-for-two basis to holders of common stock, Series A Convertible Perpetual Voting Preferred Stock and its 3.75% Convertible Senior Notes due 2030. Shareholders of record as of February 9, 2026 will receive one warrant for every two common shares held, rounded down. Each warrant grants the right to purchase one share of common stock at an $8.00 exercise price, with a two-year term expiring on February 11, 2028, subject to accelerated expiration if Xerox’s volume-weighted average stock price equals or exceeds the exercise price for 20 trading days within any 30-day period.

Warrants may be exercised for cash or by delivering designated Xerox debt securities at face value, reducing outstanding leverage while preserving liquidity. Initially eligible debt includes eight tranches totaling $4.5 billion in par amount, such as the 5.500% notes due 2028, 3.750% convertible notes due 2030 and 13.000% step-up notes due 2030. The debt-for-warrant exercise right terminates if the stock’s average price reaches 50% of the exercise price for 20 trading days within any 30-day window. This structure is expected to lower gross debt by up to $200 million if fully utilized, supporting Xerox’s target of reducing leverage below 3.0x net debt-to-EBITDA by year-end 2026.