Oct 29, 2026 earnings call — Lowered guidance and dividend suspension
Lowered full-year adjusted operating income to $450 million to $475 million and suspended dividends, preserving approximately $28 million a year.
Revenue $1.9B (est $1.9B) · EPS $0.06 (est $-0.10)
Key quotes
"We now expect a combined impact of approximately $60 million on this year's adjusted operating income from memory and oil, most of it in Q4 as higher cost inventory flows through cost of goods."
"Our goal is to drive the cost of service disruption towards 0, and we believe we're best positioned in the industry to do so."
"Our Board has suspended our common and preferred dividends effective immediately, preserving approximately $28 million a year of cash to strengthen our liquidity and support deleveraging."
Analyst Q&A 4
IT Solutions growth and cash flow
Q (Marc Vitenzon · JPMorgan): The analyst asked how tighter supplier and distributor terms affect IT Solutions and what that means for longer-term free cash flow. He also asked for more detail on levers to offset input cost inflation and confidence for 2027.
A: They said IT Solutions growth has been slower because new sellers are ramping up more slowly and price increases lengthen customer decisions; product resale fell while services were only modestly down and backlog was up 24%. They said vendor, supplier and distributor terms affect their credit profile and cash flow, and they expect approximately $100 million of additional year-over-year savings from Lexmark synergies in 2027 while pursuing cost programs to outrun a roughly $60 million headwind this year.
"We know that based on the Lexmark synergies, we have approximately $100 million of additional year-over-year savings to come in 2027." — Chuck Butler (CFO)
Debt options and print budget shifts
Q (Ananda Baruah · Loop Capital): The analyst asked whether exchange transactions or other tools could be used to manage future debt maturities. He also asked if print budgets are shifting to AI and how the company plans to respond to that structural change.
A: They said they are always evaluating every tool to lower the height of the hurdles and have focused on the '28 maturities, which were about $750 million and have now been cut effectively in half. They acknowledged a structural shift of budgets toward AI and compute away from print and said their response is to focus on service by lowering service cost and using a barbell equipment strategy toward entry and production. They also said they watch ESR and the installed base closely and saw ESR grow in the third quarter for the first time since '23.
"That was about $750 million, and now we've cut it effectively in half." — Louie Pastor (CEO)
Print competition and IT Solutions outlook
Q (Asiya Merchant · Citi): The analyst asked what competitive response to lower print volumes they expect and how that is factored into Q4 margins and 2027 guidance. She also asked whether IT Solutions can be a high single-digit to low double-digit grower going forward.
A: They said the print market is highly competitive with effectively about 10 global scaled competitors, and that pricing behavior so far has been fairly rational and is already factored into their Q4 guidance with scenario planning for larger moves. They said their end-to-end stack gives them flexibility to respond, and they remain confident IT Solutions can grow in the medium and longer term, though near-term seller ramp and project timing delays make the timing less predictable.
"Despite the structural challenges, that print faces, you have effectively 10, call it, highly global scaled competitors." — Louie Pastor (CEO)
Synergies, integration, and receivable cash
Q (Noble): The analyst asked how the incremental $100 million of synergies will translate into operating income and how much could be offset by pricing, reinvestment, or declining revenue. He also asked which integration milestones remain in manufacturing, distribution and IT, and how much additional cash can be released by selling receivables and the implications for financing income and equipment financing.
A: They said the full-year benefits next year will drive the $100 million of incremental profitability in the 2027 plan, led by adoption of the internally developed A3, expansion of global capability centers, consolidation and back-office simplification, with a balance of passing price and cutting costs. They described integration work as consolidation followed by standardization, automation and orchestration in the GCCs and other operations as the next maturation steps. On receivables, they said the balance fell from $3.2 billion in 2022 to just above $1 billion now, they still have 1.2 and use a co-model for some customers, and they think the level will be about $1 billion while looking for opportunities to push it lower.
"The further actions that we continue to work on are really driven around the big 1 driven around the complete adoption of the internally developed A3." — Chuck Butler (CFO)