Xerox Holdings Corporation (XRX): Business Model Canvas [Dec-2025 Updated]

You're digging into the mechanics of how Xerox Holdings Corporation is trying to pull off a massive turnaround, and honestly, it's a fascinating case study in corporate reinvention. After reviewing their structure, it's clear they are aggressively shifting from just selling boxes to becoming a services-led, software-enabled player, a move cemented by the recent $1.5 billion acquisition of Lexmark International II, LLC. See how this pivot impacts everything from their 9,000 global partners to the fact their IT Solutions segment revenue jumped 121.6% year-over-year in Q1 2025-it's a company betting big on recurring service dollars over one-time hardware sales. Dive into the full Business Model Canvas below to see the nuts and bolts of this strategy.

Xerox Holdings Corporation (XRX) - Canvas Business Model: Key Partnerships

You're looking at the structure of Xerox Holdings Corporation's alliances as of late 2025, which is heavily shaped by recent, large-scale M&A activity. These partnerships are critical for scaling the services-led, software-enabled transformation Steve Bandrowczak, CEO of Xerox, is driving.

The most significant recent move was the finalization of the Lexmark International II, LLC acquisition. Xerox Holdings Corporation completed this transaction on July 1 or 2, 2025, for a total value of $1.5 billion, which included net debt and assumed liabilities. This deal positions Xerox among the top five in every major print segment and makes it the market leader in managed print services (MPS). The combined organization now serves over 200,000 clients across 170 countries and operates 125 manufacturing and distribution facilities in 16 countries. For the full-year 2025 guidance, which includes six months of Lexmark activity, Xerox projects revenue growth of 16-17% in constant currency and free cash flow of approximately $250 million.

Before that, Xerox bolstered its IT Services capabilities by acquiring ITsavvy in November 2024. The total purchase price for ITsavvy was $400 million, paid via $180 million in cash and $220 million in secured promissory notes due in 2025 and 2026. This acquisition was intended to accelerate growth in the United States, Canada, and the United Kingdom within Xerox IT Services.

The scale of Xerox Holdings Corporation's reach is heavily dependent on its channel network. The company relies on over 9,000 global partners for scaled reach and delivery, a number that CEO Steve Bandrowczak indicated would absolutely double following the Lexmark acquisition when speaking at the 2025 Global Partner Summit in March. That summit itself gathered approximately 400 channel partners.

The structure of these key alliances, including the recent acquisitions and ongoing relationships, can be summarized by the scale and financial commitments:

Beyond the direct acquisitions, Xerox Holdings Corporation maintains specific vendor and technology relationships to round out its offering. The partnership with Kyocera is for selling cut-sheet inkjet production printers, which complements Xerox's own production portfolio, including the new IJP900 press that marks a return to the mid-volume inkjet market.

Furthermore, technology partners are essential for embedding intelligence across the business. The extension of the strategic partnership with HCLTech, announced in August 2024, explicitly focuses on leveraging HCLTech's GenAI platform, HCLTech AI Force, to drive innovation and transform employee and client engagement. This focus on AI aligns with the broader strategy, as the combined Xerox/Lexmark entity utilizes AI, machine learning, and workflow automation expertise.

These strategic relationships manifest in several ways for the channel and the combined operational structure:

• New partner offerings with Xerox IT Services (formerly ITsavvy).
• Adoption and enhancement of Lexmark's existing technology stack over a net new build for GBS.
• Partnership with Aston Martin Aramco Formula One Team for brand positioning.
• Leveraging AI-driven workflows, personalization, and advanced analytics for Production Print clients.
• The combined entity is a leader in MPS, supported by Lexmark's global IoT infrastructure.

Xerox Holdings Corporation (XRX) - Canvas Business Model: Key Activities

You're looking at the core engine room of Xerox Holdings Corporation as of late 2025, right after the major Lexmark integration closed. The Key Activities here are all about turning that acquisition into tangible results while managing significant external pressures, like those tariffs.

Executing the Reinvention strategy remains central, focusing heavily on operational simplification to drive structural cost improvements. By the end of 2024, Xerox had already realized over $200 million in gross cost savings from Reinvention actions taken since 2023. The company is targeting a run rate of at least $500 million in gross cost savings by 2025/2026. This entire Reinvention effort, including the Lexmark synergies, is now expected to deliver total savings north of $1 billion. As part of the organizational redesign, a workforce reduction targeting 15 percent was initiated in early 2025.

Integrating Lexmark, which closed in July 2025, is a cornerstone activity. The synergy forecast from this integration has been increased to at least $300 million. For the 2025 fiscal year specifically, cumulative run-rate cost synergies are projected to be between $100 million and $125 million. To achieve this, implementation costs were front-loaded, with an expected spend of $50 million to $75 million in 2025.

Developing and launching new Production Print equipment is a necessary countermeasure to weakness in the high-end segment. Sales of what Xerox calls high-end equipment fell from $51 million to $37 million year-over-year in Q3 2025. To address this, Xerox returned to the mid-volume inkjet market with the Xerox IJP900 Inkjet Press, which partners with Kyocera hardware. The IJP900 is capable of high-speed output up to 150 ppm (A4), targeting average monthly volumes between 250,000-1,000,000 impressions. The company also mentioned the launch of Proficio presses as part of its strategy to expand the production portfolio.

The shift to being a services-led, software-enabled company means that providing Managed Print Services (MPS) and IT Solutions is a critical activity for revenue diversification. The IT Solutions segment showed strong growth, posting double digits pro forma in Q3 2025. In Q1 2025, IT Solutions revenues specifically increased by 121.6% to $164 million. Xerox continues to be recognized for its services, being named a leader in Quocirca's 2025 Managed Print Services (MPS) Landscape report.

Managing the global supply chain under tariff pressure requires constant activity. Xerox estimated that President Trump's tariffs would lower its 2025 operating income by about $50 million. The CFO stated the expected net impact from tariffs in 2025 was about $35 million. To mitigate this, plans were in place to shift most China-produced goods to countries with lower tariffs.

Here's a quick look at some of the key financial and operational metrics tied to these activities as of late 2025:

The company's Q3 2025 revenue, including inorganic benefits from Lexmark and ITsavvy, was $1.96 billion, up roughly 28% in actual currency. On a pro forma basis, however, revenue declined about 8%.

You'll want to track the progress on these specific operational shifts:

• Simplify core products for the hybrid workplace.
• Increase investment in a partner-enabled go-to-market model.
• Drive enterprise-wide efficiency via the new Global Business Services organization.
• Accelerate revenue diversification toward Digital Services and IT Services.
• Leverage Lexmark's presence in the Asia-Pacific region for growth.

Finance: draft 13-week cash view by Friday.

Xerox Holdings Corporation (XRX) - Canvas Business Model: Key Resources

You're looking at the core assets Xerox Holdings Corporation needs to execute its strategy, especially now that the Lexmark acquisition is complete. These aren't just line items; they are the engines driving the business model.

The foundation of Xerox Holdings Corporation's intellectual property is now a combined force, integrating the legacy portfolio with assets from the Lexmark acquisition, which closed on July 1, 2025. This intellectual property and technology portfolio is a critical intangible asset. For instance, the Lexmark acquisition added $763 million in intangibles to the balance sheet as of September 30, 2025.

Here's a breakdown of the key components added or bolstered by the Lexmark integration:

• Technology assets valued at $123 million.
• Customer relationships valued at $530 million.
• Trademarks valued at $110 million.
• Goodwill amounting to $207 million.

This combined intellectual property supports the company's push toward software and services. It's defintely a significant intangible resource base.

The reach of Xerox Holdings Corporation is substantial, supported by a global service and distribution network. Following the merger, the combined organization serves over 200,000 clients across more than 170 countries. This network is crucial for delivering Managed Print Services (MPS) and ensuring a consistent global service experience.

Financially, managing capital structure is a key resource challenge and enabler. As of the fiscal quarter ending in March of 2025, Xerox Holdings Corporation reported total debt of approximately $3.3 billion. However, following the July 1, 2025, Lexmark acquisition, the total debt on the balance sheet increased to $4,406 million (or $4.406 billion) as of September 30, 2025. This later figure includes $1,624 million specifically related to equipment financing.

Here's a look at the debt structure around the time of the acquisition:

The company also held $390 million in cash, cash equivalents, and restricted cash as of March 31, 2025, which was down from $631 million at the end of 2024. By September 30, 2025, cash and equivalents stood at $535 million.

Xerox Holdings Corporation heavily relies on its AI-driven software platforms for workflow automation, which is central to its services-led strategy. These platforms help streamline document processing and automate repetitive tasks across finance, HR, and IT. Key examples of these technology resources include:

• Workflow Central platform for instant document transformation.
• Intelligent Filer app using AI for automatic categorization and filing.
• AI-Driven Document Processing (IDP) for extracting data from various sources.
• Copilot Actions and Robotic Process Automation (RPA) tools.

While the prompt mentions CareAR, the search results highlight other specific AI tools like Intelligent Filer and Workflow Central as part of their current AI and Data Solutions portfolio designed to streamline workflows. The focus is on turning documents into data and automating processes to reduce manual input.

Xerox Holdings Corporation (XRX) - Canvas Business Model: Value Propositions

You're looking at the core things Xerox Holdings Corporation offers clients right now, late 2025, as they push hard on their reinvention strategy.

The primary value is delivering comprehensive services-led, software-enabled hybrid workplace solutions. Total Revenue for the third quarter of 2025 was reported at $1.96 billion.

For cost control in document management, Xerox offers long-term, contractual Managed Print Services (MPS). The expected average contract length for these services is 4-5 years.

The expansion into IT Solutions is a major value driver, showing significant client technology spend capture and cross-sell success. The IT Solutions segment revenue in Q3 2025 reached $226 million, marking a 162.8% year-over-year increase. Pro forma bookings, billings, and revenue for IT Solutions grew double digits in Q3 2025. Furthermore, the transition to an inside sales model resulted in greater than 30% ESR growth year-to-date in Q3 2025.

In the High-end Production Print ecosystem, the value proposition includes efficiency gains via AI-driven workflows. The company re-entered the Production mid-volume inkjet market in Q3 2025 with the launch of the IJP900. However, sales of high-end equipment saw a decline, falling 31% in Q3 2025 compared to Q3 2024, with sales dropping from $51 million to $37 million.

Xerox Holdings Corporation maintains a commitment to eco-friendly printing and sustainable practices, with metrics reported from their 2025 Global Corporate Social Responsibility Report covering 2024 achievements.

• Scope 1 and 2 greenhouse-gas (GHG) emissions reduced by 59% versus the 2016 baseline.
• Scope 3 emissions were cut by 9.8% year-over-year for 2024.
• The commitment is to achieve net-zero no later than 2040.
• Remanufactured over 1.7 million toner cartridges, achieving 90% reuse by weight.
• Diverted over 600,000 metric tons of equipment, parts, and supplies from landfills since 2009.
• 100% of eligible new products launched since 2010 have earned ENERGY STAR® certification.
• Contributed over $1.38 million to global community initiatives in 2024.
• Employees logged over 35,000 volunteer hours in 2024.

Here's a quick look at the segment performance contrast in Q3 2025:

The Lexmark Integration is ahead of plan, with the cost synergy target increasing by $50 million to at least $300 million.

Finance: draft 13-week cash view by Friday.

Xerox Holdings Corporation (XRX) - Canvas Business Model: Customer Relationships

You're looking at how Xerox Holdings Corporation manages its connections with the people and businesses buying its services and products as of late 2025. The approach is clearly shifting toward services and IT solutions, which changes how they interact with customers.

Dedicated sales force for direct engagement and cross-selling IT Solutions

The direct sales engagement is increasingly focused on pushing the higher-value IT Solutions portfolio, a market the company sees as significantly larger than traditional print services. The Total Addressable Market (TAM) for IT solutions is stated to be 10X that of the managed print environment. This focus aims to capture a much larger share of the client's technology spend; where print might account for only about 1% of a CIO's budget, technology infrastructure solutions are positioned to capture 60 to 70% of that budget. This cross-selling effort is critical to the Reinvention strategy.

Contractual relationships for long-term Managed Print Services

Contractual relationships remain a backbone, particularly within Managed Print Services (MPS). Xerox Holdings Corporation continues to serve a massive global base, supporting over 200,000 clients across more than 170 countries. The company maintained its leadership position, being named a leader in Quocirca's Managed Print Services Landscape 2025 report, an honor achieved for the 16th consecutive time. While the overall MPS revenue saw a decline in constant currency, this was partly attributed to intentional reductions in non-strategic revenue streams.

The nature of these long-term service agreements is evolving, integrating new capabilities:

• Cloud-first approach via Xerox Workplace Cloud for centralized fleet management.
• AI-powered automation driving proactive alerts and streamlined workflows.
• Consistent global service experience across all regions.

Partner-led distribution model for cost-effective service delivery

The partner ecosystem is a primary engine for scale and cost-effective delivery. Xerox Holdings Corporation is actively empowering its channel, which includes over 9,000 global partners. At the 2025 Global Partner Summit, approximately 400 channel partners gathered to align on the strategy. The company is working to integrate the distribution strengths of the recently acquired Lexmark to drive better operating efficiencies and higher operating margins, leveraging their success in serving large channel and OEM partners. This model is key to expanding reach beyond direct sales capacity.

Here's a look at the scale and strategic focus of the partner network:

Centralized Global Business Services (GBS) for streamlined support

Customer support and operational functions are being centralized through the Global Business Services (GBS) organization, which was established in early 2024. This centralization is intended to lower operating costs and improve quality. The company is accelerating this by adopting proven capabilities from Lexmark's GBS organization. Initial restructuring efforts that included the GBS overhaul involved a 15% reduction in headcount. The integration of Lexmark is expected to yield synergy savings, with targets increased from $250 million to $300 million.

Key operational support metrics reflect this transformation:

• GBS centralization aims to streamline support across regions and service lines.
• Integration efforts are focused on realizing the increased synergy target of $300 million.
• The overall 2025 adjusted operating margin guidance is set at a minimum of 5.0%.

Finance: review Q4 GBS cost savings realization against synergy target by end of January.

Xerox Holdings Corporation (XRX) - Canvas Business Model: Channels

You're looking at how Xerox Holdings Corporation gets its products and services to the customer base as of late 2025. The channel strategy is clearly split between high-touch direct engagement for the biggest clients and leveraging partners and digital means for broader coverage, especially as the company pushes its IT Solutions portfolio.

Direct sales and service organization for large accounts

The direct sales force remains focused on the largest enterprise accounts, a strategy refined over time to maximize the impact of these specialized teams. As of December 31, 2024, Xerox Holdings Corporation had approximately 2,000 employees engaged in direct sales. Xerox Holdings Corporation's strategic priority for 2025 includes strengthening its route-to-market, while continuing to execute geographic simplification programs that involved transitioning some distribution models from direct to indirect in certain countries. Historically, the definition of a large enterprise account eligible for direct service shifted; for instance, a plan mentioned focusing direct salespeople on accounts with 5,000 or more seats going forward, down from a previous threshold of 1,000 or more seats.

Key distribution partners for broader market reach and efficiency

The channel ecosystem is critical for achieving broader market penetration, particularly in the small and mid-sized markets through Xerox Business Solutions (XBS). Xerox Holdings Corporation's long-term objective explicitly mentions expanded distribution with third-party channel partners. The 2025 Partner Summit, held in March in Las Vegas, Nevada, emphasized this cooperative relationship, with leadership engaging representatives from approximately 400 channel partners. To enhance partner access to hardware, in April 2024, Xerox Holdings Corporation tapped Distribution Management Inc. to give channel partners greater access to a broader range of printers, MFPs, and production printing presses. The company continues to focus on strengthening its offerings across its Print client base via these Partner relationships.

Here's a look at the segment revenue context, showing the shift where channels and partners play a role in the overall revenue mix:

IT Solutions segment (ITsavvy) for technology product and service delivery

The acquisition of ITsavvy is a major driver in the channel strategy for IT and Digital Services, targeting the market ten times the size of print. The IT Solutions segment showed substantial growth in the first half of 2025. For the first quarter of 2025, the IT Solutions segment revenue hit $164 million, a year-over-year increase of 121.6%, with ITsavvy contributing approximately 130% to that growth. By the third quarter of 2025, IT Solutions revenue and gross profit increased more than 150% year-over-year due to the inclusion of ITsavvy. On a pro forma basis (excluding ITsavvy), Q3 2025 IT Solutions revenue grew just over 12% in actual currency. The Q3 2025 results for this segment showed a gross profit of $44 million and a gross margin of 19.5%.

• IT Solutions Segment Profit Margin (Q3 2025): 8.1%.
• IT Solutions Pipeline Creation (Year-to-Date 2025): More than $50 million in pipeline creation from sales activity to existing Xerox Holdings Corporation print clients.

E-commerce and digital platforms for supplies and support

While specific revenue figures for Xerox Holdings Corporation's direct e-commerce sales of supplies are not explicitly detailed in the latest reports, the overall retail environment shows significant digital adoption. Globally, it is projected that 21% of all retail purchases will take place online in 2025, with global e-commerce sales surpassing $6.86 trillion. Xerox Holdings Corporation services clients indirectly through e-commerce marketplaces as part of its overall distribution strategy. The company's focus on digital services implies an increasing reliance on digital platforms for customer interaction, support, and transactions for consumables and services.

Xerox Holdings Corporation (XRX) - Canvas Business Model: Customer Segments

You're looking at the core groups Xerox Holdings Corporation targets with its offerings, especially now following major acquisitions and the ongoing Reinvention strategy. The customer base is being actively segmented to better align service delivery, a process they started in Q3 2025 after integrating Lexmark.

Xerox Holdings Corporation serves a diverse set of clients, broadly categorized by their need for complex document management and IT infrastructure support. The company is an original equipment manufacturer (OEM) focusing on multifunction printers (MFPs) primarily for the large enterprise markets, offering post-sales services like managed print services (MPS) to drive efficiencies for these large organizations. This focus on large accounts is a historical anchor for the business.

The strategic pivot involves aggressively targeting the Small-to-Medium Business (SMB) space, largely through the acquisition of ITsavvy in late 2024 for $400 million. This move directly addresses the need to grow IT Solutions revenue, which reached $164 million in Q1 2025, a 121.6% year-over-year increase, largely due to that acquisition.

The Production Print segment, which historically required high-volume digital color presses, is undergoing a strategic change. Xerox has made the decision to stop manufacturing High End Production print equipment, signaling a shift in focus away from that specific client need within their core Print & Other segment, which still generated $1.29 billion in revenue in Q1 2025.

The overall scale of the customer base is expanding through strategic M&A. The acquisition of Lexmark International, valued at $1.5 billion and expected to close by the end of June 2025, is set to significantly bolster the print portfolio. The combined entity is projected to serve over 200,000 clients across 170 countries.

Here's a look at the revenue contribution by the service types that map to these customer segments, based on Q1 2025 figures:

The customer base is being refined to better match service delivery costs and offerings. You can see the primary customer-facing segments and their strategic direction:

• Large enterprises and government entities requiring complex MPS.
• Small-to-Medium Businesses (SMBs) targeted for IT Solutions and print services.
• Production Print clients needing high-volume digital color presses.
• Global client base of over 200,000 combined Xerox and Lexmark customers.
• Focus shifting from legacy high-end production equipment sales.

Finance: draft the pro-forma revenue split between the legacy Print & Other segment and the growing IT Solutions segment for Q4 2025 by next Tuesday.

Xerox Holdings Corporation (XRX) - Canvas Business Model: Cost Structure

You're looking at the core expenses driving Xerox Holdings Corporation's operations as of late 2025, right after the major Lexmark acquisition. It's a cost structure under pressure from external factors and internal transformation efforts.

One immediate pressure point is the High cost of products due to tariffs and product cost increases. Xerox's 2025 guidance explicitly factored in these external headwinds, expecting between $30 million and $35 million in tariff-related expenses, net of mitigation efforts, for the full year 2025.

The Selling, Administrative, and General (SAG) expenses represented a significant portion of the top line in the second quarter. For Q2 2025, with revenue at $1,576 million, the SAG expense was calculated at 23.4% of that revenue. Here's a quick look at the magnitude of those fixed and semi-fixed costs for that quarter:

The Research, Development, and Engineering (RD&E) costs were held to 2.7% of revenue in Q2 2025, down from 3.2% in Q2 2024, showing a focus on cost discipline in innovation spending.

Financing costs are also a major component, especially following the July 1, 2025, Lexmark close. Xerox Holdings Corporation expected its total interest expense to be around $290 million for the full year 2025. For context on recent quarterly impact, Q2 2025 pre-tax results included $22 million ($17 million after-tax) in interest and financing-related charges, net, tied to new borrowings for the acquisition and debt repayment.

The ongoing transformation requires substantial one-time spending. The company is incurring significant Restructuring and integration costs for the Reinvention program and Lexmark. For instance, Q3 2025 results specifically included an adjustment of $102 million related to the Lexmark acquisition accounting. On the upside, the company projects over $250 million in synergies to be realized within two years from the Lexmark transaction.

You can see the key cost components and their relative scale in the second quarter:

• Gross Margin for Q2 2025 was 28.6%, a decrease of 440 basis points year-over-year.
• Q2 2025 Revenue was $1,576 million.
• Tariff-related expenses are projected to hit the full year by $30 million to $35 million.
• Q3 2025 Non-financing interest expense alone was $80 million.

Finance: draft 13-week cash view by Friday.

Xerox Holdings Corporation (XRX) - Canvas Business Model: Revenue Streams

You're looking at how Xerox Holdings Corporation is bringing in the money as of late 2025, focusing on the hard numbers from their recent reports. The revenue picture is clearly split between the legacy Print & Other business and the rapidly growing IT Solutions segment, reflecting their ongoing Reinvention strategy.

For the first quarter of 2025, the total revenue came in at $1.457 billion. This total is composed of distinct streams that show where the focus is shifting. Honestly, the numbers tell a story of transformation, even if the core business is still the biggest piece of the pie.

Here is a look at the Q1 2025 revenue breakdown by the two reported segments:

Digging deeper into the components that make up the Print & Other segment, we see the traditional revenue sources. These are the recurring and transactional elements that keep the lights on, though the company is clearly trying to shift the balance.

The specific contributions from these core activities in Q1 2025 were:

• Services, maintenance, rentals, and other revenues totaled $900 million in Q1 2025.
• Sales of equipment and supplies accounted for $557 million in Q1 2025.

It's important to note that the $164 million from the IT Solutions segment represents a massive shift, showing a year-over-year increase of 121.6%, largely fueled by acquisitions like ITsavvy. This growth is the strategic counterweight to the decline in the Print & Other segment.

Looking ahead for the full fiscal year 2025, the expectation, following a recent downward revision after Q3 results, is for total revenue to grow about 13% year-over-year in constant currency. That 13% figure is the target after the company previously guided for 16-17% growth, so you see the near-term headwinds impacting the outlook.

Finance: draft 13-week cash view by Friday.