Q4 only looks “good” if you stop at the headline: revenue jumped +26%, but that’s almost entirely because Xerox bought Lexmark.
Strip that out and the underlying business is still shrinking by 9%. Cash is the real story: free cash flow for 2025 fell to about $130M, down from roughly $470M last year, a MASSIVE drop at the exact moment debt is crushing the company.
The snapshot that truly matters: Xerox has roughly $500M in cash, $4+ billion in debt, and only about $400–450M of equity left.
Goodwill sits around $2+ billion (Goodwill Guy will check this), meaning one big write-down and equity is basically gone on paper.
Interest expense alone is running close to $250M A YEAR. This is why management rolled out the warrant scheme before earnings as an attempt to reduce debt without spending cash and without going to bankruptcy court.
Q4 proved the company is operationally alive but financially boxed in.
The warrants, the timing, the messaging... all of it points to one thing: advanced financial engineering to avoid Chapter 11, not confidence in growth.
This is what survival mode looks like when you still want to stay in control.