v3.26.1
Finance Receivables, Net
 6 Months Ended
Jun. 30, 2026
Financing Receivable, after Allowance for Credit Loss [Abstract]  
Finance Receivables, Net Accounts Receivable, Net
Accounts receivable, net were as follows:
June 30,
2026		December 31,
2025
Invoiced$1,091 $1,024 
Accrued(1)
168 171 
Allowance for doubtful accounts(74)(73)
Accounts receivable, net$1,185 $1,122 
_____________
(1)Accrued receivables include amounts to be invoiced in the subsequent quarter for current products and services provided.
The allowance for doubtful accounts was as follows:
20262025
Balance at January 1st
$73 $69 
Provision3 4 
Charge-offs, net(3)(6)
Recoveries and other(1)
— 1 
Balance at March 31st
$73 $68 
Provision8 8 
Charge-offs(5)(7)
Recoveries and other(1)
(2)3 
Balance at June 30th
$74 $72 
_____________
(1)Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations.
We perform ongoing credit evaluations of our customers and adjust credit limits based upon customer payment history and current creditworthiness. The allowance for doubtful accounts receivable is determined based on an
assessment of past collection experience as well as consideration of current and future economic conditions and changes in our customer collection trends.
Accounts Receivable Sales Arrangements
We have two facilities in Europe that enable us to sell accounts receivable, without recourse on an ongoing basis. Under these arrangements, we sell our entire interest in the related accounts receivable for cash. Our arrangements are associated with our European distributor network as well as domestic sales in UK, France, Germany and Italy.
Accounts receivable sales activity was as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,
2026202520262025
Accounts receivable sales(1)
$121 $111 $212 $196 
____________
(1)Losses on sales were not material.
Finance Receivables, Net
Finance receivables include sales-type leases and installment loans arising from the sales of our equipment. These receivables are typically collateralized by a security interest in the underlying equipment.
Finance receivables, net were as follows:
June 30,
2026		December 31,
2025
Gross receivables$1,429 $1,643 
Unearned income(171)(196)
Subtotal1,258 1,447 
Residual values— — 
Allowance for doubtful credit losses(1)
(44)(45)
Finance receivables, net1,214 1,402 
Less: Billed portion of finance receivables, net40 46 
Less: Current portion of finance receivables not billed, net442 510 
Finance receivables due after one year, net$732 $846 
____________
(1)Reflects the allowance for doubtful credit losses related to (i) Billed portion of finance receivables of $3 and $3, and (ii) the current and non-current portions of finance receivables of $41 and $42 as of June 30, 2026 and December 31, 2025, respectively.
Finance Receivables – Allowance for Credit Losses and Credit Quality
Our finance receivable portfolios are primarily in the U.S., Canada and EMEA. We generally establish customer credit limits and estimate the allowance for doubtful credit losses on a country or geographic basis. Customer credit limits are based upon an initial evaluation of the customer's credit quality, and are adjusted through ongoing credit assessments of the customer, which includes the past collections experience and changes in credit quality. The allowance for doubtful credit losses is determined based on an assessment of origination year and past collection experience as well as consideration of current and future economic conditions and changes in our customer collection trends.
Our allowance for doubtful credit losses is determined by geography. The risk characteristics in our finance receivable portfolio segments are generally consistent with the risk factors associated with the economies of the countries/regions included in those geographies. Since EMEA is comprised of various countries and regional economies, the risk profile within that portfolio segment is somewhat more diversified due to the varying economic conditions among and within those countries.
Based on that assessment, the allowance for doubtful credit losses as a percentage of gross finance receivables (net of unearned income) was 3.5% at June 30, 2026 and 3.1% at December 31, 2025.
In determining the level of reserve required we critically assessed current and forecasted economic conditions and trends to ensure we objectively considered those expected impacts in the determination of our reserve. Our assessment also included a review of current portfolio credit metrics and the level of write-offs incurred over the past year. We believe our current reserve position remains sufficient to cover expected future losses that may result from current and future macro-economic conditions including higher inflation, interest rates, and the potential for
recessions in the geographic areas of our customers. We continue to monitor developments in future economic conditions and trends, and as a result, our reserves may need to be updated in future periods.
The allowance for doubtful credit losses as well as the related investment in finance receivables were as follows:
United StatesCanadaEMEA
Other(2)
Total
Balance at December 31, 2025
$24 $5 $16 $— $45 
Provision— — 2 — 2 
Charge-offs, net(1)— (1)— (2)
Other(1)
— — — — — 
Balance at March 31, 2026$23 $5 $17 $— $45 
Provision2 1 1 — 4 
Charge-offs, net(2)(1)(2)— (5)
Other(1)
— — — — — 
Balance at June 30, 2026$23 $5 $16 $— $44 
Balance at December 31, 2024
$29 $5 $23 $— $57 
Provision(1)1 5 — 5 
Charge-offs, net(3)(1)(6)— (10)
Other(1)
— — 1 — 1 
Balance at March 31, 2025$25 $5 $23 $— $53 
Provision5 — 3 — 8 
Charge-offs, net(3)— (4)— (7)
Other(1)
(1)1 1 — 1 
Balance at June 30, 2025$26 $6 $23 $— $55 
_____________
(1)Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations.
(2)As a result of the Lexmark Acquisition on July 1, 2025, Other includes finance receivables of Latin America, Asia Pacific and South Africa. However, the related allowance for doubtful credit losses of the Other geography for the three and six months ended June 30, 2026 was nil. Refer to Note 6 - Acquisition for additional information regarding the Lexmark Acquisition.
Customers are further evaluated by class based on the type of lease origination. The primary categories are direct, which primarily includes leases originated directly with end-user customers through bundled lease arrangements, and indirect, which primarily includes leases originated through our XBS sales channel and lease financing to end-user customers who purchased equipment we sold to distributors or resellers.
We evaluate our customers based on the following credit quality indicators:
•Low Credit Risk: This rating includes accounts with excellent to good business credit, asset quality and capacity to meet financial obligations. These customers are less susceptible to adverse effects due to shifts in economic conditions or changes in circumstance. Loss rates in this category in the normal course are generally in the range of 1% to 2%.
•Average Credit Risk: This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions. Although we experience higher loss rates associated with this customer class, we believe the risk is somewhat mitigated by the fact that our leases are fairly well dispersed across a large and diverse customer base. In addition, the higher loss rates are largely offset by the higher rates of return we obtain with such leases. Loss rates in this category in the normal course are generally in the range of 3% to 5%.
•High Credit Risk: This rating includes accounts that have marginal credit risk such that the customer’s ability to make repayment is impaired or may likely become impaired. We use numerous strategies to mitigate risk including higher rates of interest, prepayments, personal guarantees, etc. Accounts in this category include customers who were downgraded during the term of the lease from low and average credit risk evaluation when the lease was originated. Accordingly, there is a distinct possibility for a loss of principal and interest or customer default. The loss rates in this category in the normal course are generally in the range of 6% to 7%.
Credit quality indicators are updated at least annually, or more frequently to the extent required by economic conditions, and the credit quality of any given customer can change during the life of the portfolio. Details about our finance receivables portfolio based on geography, origination year and credit quality indicators are as follows:
June 30, 2026
20262025202420232022PriorTotal
Finance
Receivables
United States (Direct)
Low Credit Risk$62 $89 $57 $35 $11 $2 $256 
Average Credit Risk12 16 14 22 5 3 72 
High Credit Risk13 19 19 14 8 4 77 
Total $87 $124 $90 $71 $24 $9 $405 
Charge-offs$— $— $1 $2 $— $1 $4 
United States (Indirect)
Low Credit Risk$1 $2 $3 $7 $10 $2 $25 
Average Credit Risk4 11 6 17 13 2 53 
High Credit Risk— — 8 9 3 1 21 
Total$5 $13 $17 $33 $26 $5 $99 
Charge-offs$— $— $— $1 $1 $1 $3 
Canada
Low Credit Risk$12 $26 $16 $10 $2 $1 $67 
Average Credit Risk13 24 16 10 4 1 68 
High Credit Risk2 4 2 1 1 — 10 
Total$27 $54 $34 $21 $7 $2 $145 
Charge-offs$— $— $— $— $1 $— $1 
EMEA
Low Credit Risk$58 $101 $60 $70 $36 $9 $334 
Average Credit Risk32 53 37 58 39 12 231 
High Credit Risk4 7 4 7 4 2 28 
Total$94 $161 $101 $135 $79 $23 $593 
Charge-offs$— $1 $— $2 $1 $— $4 
Other
Low Credit Risk$1 $6 $3 $3 $1 $— $14 
Average Credit Risk1 — 1 — — — 2 
High Credit Risk— — — — — — — 
Total$2 $6 $4 $3 $1 $— $16 
Charge-offs$— $— $— $— $— $— $— 
Total Finance Receivables
Low Credit Risk$134 $224 $139 $125 $60 $14 $696 
Average Credit Risk62 104 74 107 61 18 426 
High Credit Risk19 30 33 31 16 7 136 
Total$215 $358 $246 $263 $137 $39 $1,258 
Total Charge-offs$— $1 $1 $5 $3 $2 $12 
December 31, 2025
20252024202320222021PriorTotal
Finance
Receivables
United States (Direct)
Low Credit Risk$102 $66 $48 $19 $7 $1 $243 
Average Credit Risk49 31 41 14 13 2 150 
High Credit Risk24 23 18 13 5 2 85 
Total $175 $120 $107 $46 $25 $5 $478 
Charge-offs$— $1 $3 $2 $1 $2 $9 
United States (Indirect)
Low Credit Risk$2 $4 $10 $15 $6 $— $37 
Average Credit Risk12 7 25 22 6 1 73 
High Credit Risk— 8 13 5 2 — 28 
Total$14 $19 $48 $42 $14 $1 $138 
Charge-offs$— $— $4 $4 $2 $1 $11 
Canada
Low Credit Risk$31 $20 $13 $4 $1 $— $69 
Average Credit Risk29 20 13 7 2 — 71 
High Credit Risk4 3 2 1 1 — 11 
Total$64 $43 $28 $12 $4 $— $151 
Charge-offs$— $1 $1 $1 $— $— $3 
EMEA
Low Credit Risk$135 $76 $96 $51 $14 $4 $376 
Average Credit Risk68 45 79 49 13 3 257 
High Credit Risk8 5 10 4 2 1 30 
Total$211 $126 $185 $104 $29 $8 $663 
Charge-offs$5 $3 $7 $4 $1 $— $20 
Other
Low Credit Risk$7 $4 $3 $1 $— $— $15 
Average Credit Risk— 1 1 — — — 2 
High Credit Risk— — — — — — — 
Total$7 $5 $4 $1 $— $— $17 
Charge-offs$— $— $— $— $— $— $— 
Total Finance Receivables
Low Credit Risk$277 $170 $170 $90 $28 $5 $740 
Average Credit Risk158 104 159 92 34 6 553 
High Credit Risk36 39 43 23 10 3 154 
Total$471 $313 $372 $205 $72 $14 $1,447 
Total Charge-offs$5 $5 $15 $11 $4 $3 $43 
The aging of our receivables portfolio is based upon the number of days an invoice is past due. Receivables that are more than 90 days past due are considered delinquent. Receivable losses are charged against the allowance when management believes the uncollectibility of the receivable is confirmed and is generally based on individual credit evaluations, results of collection efforts and specific circumstances of the customer. Subsequent recoveries, if any, are credited to the allowance.
We generally continue to maintain equipment on lease and provide services to customers that have invoices for finance receivables that are 90 days or more past due and, as a result of the bundled nature of billings, we also continue to accrue interest on those receivables. However, interest revenue for such billings is only recognized if collectability is deemed probable.
The aging of our billed finance receivables is as follows:
June 30, 2026
Current
31-90
Days
Past Due
>90 Days
Past Due
Total BilledUnbilled
Total
Finance
Receivables
>90 Days
and
Accruing
Direct $15 $5 $3 $23 $382 $405 $29 
Indirect3 1 1 5 94 99 — 
Total United States18 6 4 28 476 504 29 
Canada3 1 1 5 140 145 5 
EMEA6 3 1 10 583 593 19 
Other— — — — 16 16 — 
Total$27 $10 $6 $43 $1,215 $1,258 $53 
December 31, 2025
Current
31-90
Days
Past Due
>90 Days
Past Due
Total BilledUnbilled
Total
Finance
Receivables
>90 Days
and
Accruing
Direct$18 $5 $4 $27 $451 $478 $35 
Indirect4 2 2 8 130 138 — 
Total United States22 7 6 35 581 616 35 
Canada3 1 — 4 147 151 4 
EMEA8 1 1 10 653 663 17 
Other— — — — 17 17 — 
Total$33 $9 $7 $49 $1,398 $1,447 $56 
Sales of Finance Receivables
The Company has finance receivables funding arrangements with third-party funding partners in the U.S., Canada, and in EMEA. Under these arrangements, the Company sells certain eligible pools of finance receivables. The transfers are structured to qualify for sale accounting treatment and the related receivables are derecognized from the Company's consolidated financial statements. The Company's funding partners generally do not have recourse to the Company for credit losses on the transferred receivables.
In addition, under certain arrangements, the Company may transfer servicing responsibilities for funded receivables to a funding partner. In such cases, the Company pays a servicing fee related to certain retained finance receivables and may continue to service certain finance receivables under prior servicing arrangements with that funding partner for an agreed-upon fee.
Finance receivable sales activity was as follows:
Three Months Ended
June 30,		Six Months Ended
June 30,
2026202520262025
Finance receivable sales - net proceeds(1)
$80 $36 $122 $111 
Gain on sale/Commissions(2)
— 4 4 9 
Servicing revenue(2)
$2 $1 $4 $3 
_____________
(1)Cash proceeds are reported in Net cash used in operating activities.
(2)Recorded as Other revenue within Services, maintenance, rentals and other. Amounts include revenues associated with the sale of the underlying leased equipment.