Xerox Holdings Corporation · NASDAQ:XRX
Xerox — Q2 2025 Earnings Presentation
35 slides from Xerox's earnings presentation, Jul 31, 2025
Slide 1: Earnings Presentation Q2 2025 Results
Earnings Presentation Q2 2025 Results July 31, 2025
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation and other written or oral statements made from time to time by management contain “forward looking statements” as defined in the Private Securities Litigation Reform Act of 1995 and involve certain risks and uncertainties. The words “anticipate”, “believe
Slide 3: Q2 2025 Key Financial Measures
Q2 2025 Key Financial Measures Revenue ($B) Adj1 Operating Margin Free Cash Flow1 ($M) $1.58 $1.58 $115 5.4% 3.7% $(30) 2024 2025 2024 2025 2024 2025 Operating 2025 % Change: (0.1)% @ AC, (1.1)% @ CC1 Cash Flow $123 $(11) Revenue Trend ($M) Adj1 Earnings Per Share Shareholder Returns ($M) $2,000 0%
Slide 4: Strategic Priorities for 2025
Strategic Priorities for 2025 • Commercial Optimization. Strengthen the core business through continued route-to- market and offering optimization, expanded Partner relationships and greater penetration Execute of IT Solutions & Digital Services across Xerox’s Print client base Reinvention • Operati
Slide 5: Reinvention Progress
Reinvention Progress Non-core Organizational Acquisition Acquisition Divestitures Redesign of ITsavvy of Lexmark 2023 January 2024 November 2024 July 2025 • Donated PARC to SRI • Shifted from a geographic to a • Doubled IT Solutions (ITS) • Combined operations expected • Sold Xerox Research Centre b
Slide 6: Combined Business Profile
Combined Business Profile • Xerox is a leading provider of services-led, software-enabled hybrid workplace solutions. Pro Forma Financials and KPIs1 • Combined, Xerox and Lemark form a vertically integrated manufacturer, distributor and $8.6B $873M 200,000+ provider of print equipment and managed pr
Slide 7: Lexmark Acquisition: Immediate Strategic & Financial Benefits
Lexmark Acquisition: Immediate Strategic & Financial Benefits Opportunity Description Opportunity Size • Improved competitive positioning, with a Top 3 share in all • Xerox’s Print portfolio covers a wider range of mid and Print categories high-end products, expanding the size of Lexmark’s Print Equ
Slide 8: Reinvention: Path to Revenue Stabilization and Improved Profits
Reinvention: Path to Revenue Stabilization and Improved Profits Reinvention Through Integration: Estimated Savings / Synergies Revenue Mix Shift Key Near-term Workstreams Operational Simplification LTM1 Mix • Leverage Xerox’s Reinvention program to integrate Lexmark, Targeted Mix combining best-in-c
Slide 9: Lexmark Synergies and Implementation Timeline
Lexmark Synergies and Implementation Timeline Expected Gross Cost Synergies Expected Phasing of Synergy Realization Cumulative In-Year Cost to Run-Rate Gross Achieve Key Milestones $ in millions Cost Synergies • Initial elimination of duplicative overhead 2025 $100-$125 $50-$75 • Rationalization of
Slide 10: Frequently Asked Questions
Frequently Asked Questions How has demand trended since the Q1 earnings report? What demand assumptions comprise your outlook for the full year? Xerox observed a period of softer print equipment demand in April and May amidst peak DOGE and tariff-related uncertainty, particularly among SLED, small a
Slide 11: Financial Results Summary
Financial Results Summary (in millions, except per share data) B/(W) % Change P&L Measures Q2 2025 YOY YOY P&L Ratios Q2 2025 B/(W) YOY Print & Other 1,366 (128) IT Solutions 213 129 Gross Margin – Adjusted3 29.3% (420) bps Intersegment elimination1 (3) (3) (0.1)% AC / Revenue $1,576 $(2) (1.1)% CC3
Slide 12: Print & Other Segment Results
Print & Other Segment Results % Change YOY Total Installs vs. CC1 Equipment Revenue YOY Q2 B/(W) 40% (in millions) AC CC1 2025 YOY 20% Equipment 336 (20) (5.6)% (6.7)% 0% (20%) Post Sale 1,030 (108) (9.5)% (10.5)% (40%) Total Revenue $1,366 $(128) (8.6)% (9.7)% 2Q24 3Q24 4Q24 1Q25 2Q25 CC¹ Equipment
Slide 13: IT Solutions Segment Results
IT Solutions Segment Results % Change YOY IT Solutions: Key Performance Indicators / Trends Q2 B/(W) (in millions) AC CC1 • Pro forma Gross Billings grew 8% year-over-year: 2025 YOY Products 153 97 173.2% 173.2% • Double-digit pro forma growth in Infrastructure & Networking equipment and software Se
Slide 14: Cash Flow
Cash Flow (in millions) Q2 2025 Q2 2024 Pre-tax (Loss) Income ($60) $25 1 Non-Cash Add-Backs 129 123 Restructuring Payments (15) (31) Pension Contributions (33) (27) 2 Working Capital, net (119) (133) 3 Change in Finance Assets 62 161 4 Other 25 5 Net cash (used in) provided by Operations (11) 123 N
Slide 15: Capital Structure
Capital Structure Debt and Cash Debt Maturity Ladder (Adjusted as of 7/1) 1, 5 ($M) Adjusted $1,096 (in billions) $969 as of 7/14 Q2 2025 Q1 2025 $865 Total Debt1 $(4.3) $(3.9) $(3.3) $90 $565 $400 Less: Financing Allocated Debt $1.6 $1.6 $1.7 $500 Core Debt $(2.7) $(2.3) $(1.6) Less: Cash2 $0.3 $1.
Slide 16: Guidance (Pro Forma for Lexmark)
Guidance (Pro Forma for Lexmark) 2025 Guidance 2026: Preliminary Expectations Previous Current • Legacy Xerox Print to perform in line with the broader Print market Revenue • Legacy Lexmark revenue flat y/y Revenue growth Low-single Digit in CC1 16-17% growth in CC1 Lexmark contribution ~$1 bn, net
Slide 17: Appendix
Appendix 17
Slide 18: Operating Trends
Operating Trends 2023 2024 2025 (in millions, except EPS) FY Q1 Q2 Q3 Q4 FY Q1 Q2 Total Revenue $6,886 $1,502 $1,578 $1,528 $1,613 $6,221 $1,457 $1,576 % Change (3.1)% (12.4)% (10.0)% (7.5)% (8.6)% (9.7)% (3.0)% (0.1)% CC 1 % Change (3.3)% (13.2)% (9.6)% (7.3)% (8.0)% (9.5)% (1.1)% (1.1)% Adj1 Opera
Slide 19: Non-GAAP Financial Measures
Non-GAAP Financial Measures We have reported our financial results in accordance with generally accepted accounting principles (GAAP). In addition, we have discussed our financial results using the non-GAAP measures described below. We believe these non- GAAP measures allow investors to better under
Slide 20: Non-GAAP Financial Measures
Non-GAAP Financial Measures • consulting and other similar type professional services as well as potential legal settlements that may arise in connection with those M&A transactions. These costs are considered incremental to our normal operating charges and were incurred or are expected to be incurr
Slide 21: Adjusted Net Income (Loss) and EPS Reconciliation
Adjusted Net Income (Loss) and EPS Reconciliation FY-23 Q1-24 Q2-24 Q3-24 Q4-24 FY-24 Q1-25 Q2-25 Net Net Net Net Net (Loss) Net (Loss) (Loss) (Loss) Net Net (in millions, except per share amounts) Incom e EPS Incom e EPS Incom e EPS Incom e EPS Incom e EPS Incom e EPS (Loss) EPS (Loss) EPS Reported
Slide 22: Adjusted Effective Tax Rate Reconciliation
Adjusted Effective Tax Rate Reconciliation Q2-25 Q2-24 Pre-Tax (Loss) Income Tax Effective Tax Pre-Tax Income Tax Effective Tax (in millions) Income Expense Rate Income Expense Rate (1) Reported $ (60) $ 46 (76.7%) $ 25 $ 7 28.0% (2) Non-GAAP adjustments 78 49 30 7 (3) Adjusted $ 18 $ 95 527.8% $ 55
Slide 23: Adjusted Gross Profit and Margin Reconciliation
Adjusted Gross Profit and Margin Reconciliation (in millions) Q2-25 Q2-24 (1) Revenue $ 1,576 $ 1,578 (1) Cost of revenue 1,125 1,058 Gross Profit and Margin 451 28.6% 520 33.0% Adjustment: Inventory-related impact - exit of certain Production Print manufacturing operations 10 8 Adjusted Gross Profi
Slide 24: Adjusted Gross Profit and Margin Reconciliation – Print and Other
Adjusted Gross Profit and Margin Reconciliation – Print and Other (in millions) Q2-25 Q2-24 (1) Revenue $ 1,366 $ 1,494 Cost of revenue (1) 950 987 Gross Profit and Margin 416 30.5% 507 33.9% Adjustment: Inventory-related impact - exit of certain Production Print manufacturing operations 10 8 Adjust
Slide 25: Adjusted Operating Expenses
Adjusted Operating Expenses (in millions) Q2-25 Q2-24 B/(W) YOY Reported(1) $ 411 $ 443 7.2% Less: ITsavvy 14 - Adjusted $ 397 $ 443 10.5% (1) Reflects Selling, administrative and general expenses (SAG), and Research, development and engineering expenses. ITsavvy operating expenses are comprised of
Slide 26: Adjusted Operating Income and Margin Reconciliation
Adjusted Operating Income and Margin Reconciliation FY-23 Q1-24 Q2-24 Q3-24 Q4-24 FY-24 Q1-25 Q2-25 (Loss) (Loss) (Loss) (Loss) (Loss) (Loss) (in millions) Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Reven
Slide 27: Adjusted EBITDA and Margin Reconciliation
Adjusted EBITDA and Margin Reconciliation FY-23 Q1-24 Q2-24 Q3-24 Q4-24 FY-24 Q1-25 Q2-25 (Loss) (Loss) (Loss) (Loss) (Loss) (in millions) Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit
Slide 28: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation (in millions) FY-23 Q1-24 Q2-24 Q3-24 Q4-24 FY-24 Q1-25 Q2-25 (1) Reported $686 ($79) $123 $116 $351 $511 ($89) ($11) Less: capital expenditures 37 10 8 9 17 44 20 19 Free Cash Flow $649 ($89) $115 $107 $334 $467 ($109) ($30) ___________________ (1) Net cash provided by
Slide 29: Other Expenses, net Reconciliation
Other Expenses, net Reconciliation (in millions) Q2-25 Q2-24 (1) $ 80 $ 33 Reported Less: Non-service retirement-related costs 19 26 Less: Loss (Gain) on early extingushment of debt 4 - Less: Transaction related costs, net - (23) Less: Commitment fee expense 4 - Less: Escrow interest 12 - Adjusted $
Slide 30: Unaudited Lexmark Historical Financial Results
Unaudited Lexmark Historical Financial Results (3) Q1-24 Q2-24 Q3-24 Q4-24 FY-24 Q1-25 Q2-25 (1) Revenue 541 546 567 593 2,247 511 517 COGS 391 370 386 404 1,550 357 364 Gross Profit 150 177 181 189 697 154 154 Operating Expenses 138 70 124 978 1,311 121 152 Operating Income 12 106 57 (789) (614) 34
Slide 31: Pro Forma Revenue
Pro Forma Revenue FY-24 IT Savvy Lexmark Pro Forma Reclassified Reclassified Intercompany Combined (1) (in millions) Xerox Historical Historical Historical Transactions Company Revenues Sales $ 2,378 $ 333 $ 1,943 $ (243) $ 4,411 Service, maintenance and rentals 3,692 76 304 (14) 4,058 Financing 151
Slide 32: Pro Forma Adjusted EBITDA
Pro Forma Adjusted EBITDA (in millions) FY-24 (1) Pro Forma Net (Loss) Income - reported $ (1,707) Adjustments: Other expenses, net $ 87 Interest expense 306 Income tax expense 130 Depreciation and Amortization 446 Goodwill Impairment 1,058 Tradename Impairment 160 Currency (2) Pro Forma EBITDA (1)
Slide 33: Adjusted Operating Income and Margin – Guidance
Adjusted Operating Income and Margin – Guidance FY 2025 (in millions) Profit Revenue (CC) (2, 3) Margin (1) Estimated ~$(197) ~$7,300 ~(2.7)% Adjustments: Restructuring and related costs, net 50 Amortization of intangible assets 50 (4) Other expenses, net 427 Adjusted (5) ~$330 ~$7,300 ~4.5% _______
Slide 34: Free Cash Flow – Guidance
Free Cash Flow – Guidance (in millions) FY 2025 (1) Operating Cash Flow ~$345 Less: capital expenditures 95 Free Cash Flow ~$250 (1)Net cash provided by operating activities. 34
Slide 35: © 2025 Xerox Corporation. All rights reserved. Xerox® is a trademark of Xerox Corporation
© 2025 Xerox Corporation. All rights reserved. Xerox® is a trademark of Xerox Corporation in the United States and/or other countries.