Xerox Holdings Corporation · NASDAQ:XRX
Xerox — Q4 2024 Earnings Presentation
32 slides from Xerox's earnings presentation, Jan 28, 2025
Slide 1: Earnings Presentation Q4 2024 Results
Earnings Presentation Q4 2024 Results January 28, 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. The words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “will”, “
Slide 3: Full-Year 2024 Key Financial Measures
Full-Year 2024 Key Financial Measures Revenue ($B) Adj1 Operating Margin Free Cash Flow1 ($M) $6.89 $6.22 5.6% $649 4.9% $467 2023 2024 2023 2024 2023 2024 Operating 2024 % Change: (9.7)% @ AC, (9.5)% @ CC1 Cash Flow $686 $511 Revenue Trend ($M) Adj1 Earnings Per Share Shareholder Returns3 ($M) $1,7
Slide 4: Achievement of 2024 Priorities
Achievement of 2024 Priorities Priorities Key Accomplishments Organizational redesign streamlined operations while creating stronger • Re-align products, services and distribution with the needs of alignment between sales, marketing and offering development teams and the economic buyers of today’s h
Slide 5: Strategic Priorities for 2025
Strategic Priorities for 2025 • Commercial Optimization. Strengthen core business through continued route-to- market and offering optimization, expanded Partner relationships and greater Execute penetration of IT Solutions & Digital Services across Xerox’s Print client base Reinvention • Operational
Slide 6: Operational Roadmap
Operational Roadmap 2023 2024 2025 / 2026 Plan Reinvention Stages Foundation Operationalization Execution & Acceleration • Scoping, transition planning • Transitioned direct operations Geographic • Early transitions to indirect to partner-led models in Latin Simplification distribution models Americ
Slide 7: Recently Announced Acquisitions
Recently Announced Acquisitions ITsavvy and Lexmark accelerate Xerox’s Reinvention by diversifying revenue sources and strengthening the core Print business Purchase Price $400 million $1.5 billion Top 100¹ provider of integrated IT products and A leading provider of innovative imaging solutions and
Slide 8: Frequently Asked Questions
Frequently Asked Questions What drove revenue declines in 2024? Why do you expect revenue to return to growth in 2025? Total revenue declined 9.5% in constant currency1 in 2024. Excluding the benefit of around 5 weeks of ITsavvy results, revenue declined 10.2% in constant currency1, in line with our
Slide 9: Financial Results Summary
Financial Results Summary (in millions, except per share data) B/(W) % Change P&L Measures Q4 2024 YOY YOY P&L Ratios Q4 2024 B/(W) YOY (8.6)% AC Revenue $ 1,613 $ (152) Gross Margin – Adjusted1 31.6% (190) bps (8.0)% CC1 Operating Income – 104 8 8% RD&E % 2.9% 30 bps Adjusted1 Other Expenses, net 3
Slide 10: Revenue
Revenue % Change YOY % Change YOY Quarterly Revenue Trend ($B) Q4 FY (in millions) AC CC1 AC CC1 2024 2024 $1.77 $1.50 $1.58 $1.53 $1.61 Equipment $393 (14.2)% (13.4)% $1,378 (16.7)% (16.5)% Post Sale $1,220 (6.7)% (6.1)% $4,843 (7.4)% (7.3)% Total Revenue $1,613 (8.6)% (8.0)% $6,221 (9.7)% (9.5)% Q
Slide 11: Cash Flow
Cash Flow (in millions) Q4 2024 Change YOY FY 2024 Change YOY Pre-tax (Loss) ($4) $84 ($1,216) ($1,188) Non-Cash Add-Backs1 126 30 555 216 Non-Cash Goodwill Impairment, Net of Tax - 0 1,015 1,015 Restructuring Charges 7 (114) 87 (59) Restructuring Payments (20) (16) (78) (51) Pension Contributions (
Slide 12: Segment Results
Segment Results Revenue and Profit Q4 2024 B/(W) YoY Print & Intersegm ent Print & (in m illions) Other XFS Elim inations 1 Total Xerox Other XFS Total Xerox Total Revenue $ 1,540 $ 89 $ (16) $ 1,613 Total Revenue (9)% (11)% (9)% Segm ent Profit $ 87 $ 17 $ - $ 104 Segm ent Profit (2)% 143% 8% Segme
Slide 13: Capital Structure
Capital Structure Debt and Cash Debt Maturity Ladder³ ($M) $844 $805 (in billions) Q4 2024 Q3 2024 $55 Total Debt ($3.4) ($3.3) $344 $593 Less: Financing Allocated Debt $1.7 $2.0 $205 Core Debt ($1.7) ($1.3) $400 $750 $350 Less: Cash1 $0.6 $0.6 $250 $500 Net Core Debt ($1.1) ($0.7) $388 $154 $55 Tot
Slide 14: Reinvention: Gross Cost Savings
Reinvention: Gross Cost Savings Estimated Reinvention Gross Cost Savings Gross Cost Savings by Year 2023 • More than $100 million in gross cost savings realized 2024 • More than $200 million in gross cost savings realized 2025-2026 • More than $175 million of incremental gross cost Reinvention savin
Slide 15: 2025 Full-Year Guidance
2025 Full-Year Guidance • Revenue: Low single-digit growth in Constant Currency1 • Adjusted1 Operating Margin: At least 5.0% • Free Cash Flow1: $350 million to $400 million Guidance does not include any impacts associated with the pending acquisition of Lexmark, which is expected to close in 2H 2025
Slide 16: Appendix
Appendix 16
Slide 17: Operating Trends
Operating Trends 2023 2024 (in millions, except EPS) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Total Revenue $1,715 $1,754 $1,652 $1,765 $6,886 $1,502 $1,578 $1,528 $1,613 $6,221 % Change 2.8% 0.4% (5.7)% (9.1)% (3.1)% (12.4)% (10.0)% (7.5)% (8.6)% (9.7)% CC 1 % Change 5.5% 0.5% (7.4)% (10.6)% (3.3)% (13.2)% (9
Slide 18: 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 19: 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 20: Adjusted Net Income (Loss) and EPS Reconciliation
Adjusted Net Income (Loss) and EPS Reconciliation Q1-23 Q2-23 Q3-23 Q4-23 FY-23 Q1-24 Q2-24 Q3-24 Q4-24 FY-24 Net Net Net Net Net Net Net (Loss) Net (Loss) Net (Loss) Net (Loss) (Loss) (Loss) (in millions, except per share amounts) Incom e EPS Incom e EPS Incom e EPS Incom e EPS Incom e EPS Incom e
Slide 21: Adjusted Effective Tax Rate Reconciliation
Adjusted Effective Tax Rate Reconciliation Q4-24 Q4-23 FY-24 FY-23 Pre-Tax Pre-Tax Income Tax Pre-Tax Pre-Tax Income Tax (Loss) Income Tax Effective Tax (Loss) (Benefit) Effective Tax (Loss) Income Tax Effective Tax (Loss) (Benefit) Effective Tax (in millions) Income Expense Rate Income Expense Rate
Slide 22: Adjusted Gross Profit and Margin Reconciliation
Adjusted Gross Profit and Margin Reconciliation (in millions) Q4-24 Q4-23 FY-24 FY-23 (1) Revenue $ 1,613 $ 1,765 $ 6,221 $ 6,886 Cost of revenue (1) 1,111 1,173 4,261 4,572 Gross Profit and Margin 502 31.1% 592 33.5% 1,960 31.5% 2,314 33.6% Adjustment: Inventory-related impact - exit of certain Pro
Slide 23: Adjusted Operating Income and Margin Reconciliation
Adjusted Operating Income and Margin Reconciliation Q1-23 Q2-23 Q3-23 Q4-23 FY-23 (Loss) (Loss) (in millions) Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Reported (1) $ 71 $ 1,715 $ (61) $ 1,754 $ 49 $ 1,652 $ (58) $ 1,765 $ 1 $ 6,886
Slide 24: Adjusted Operating Income and Margin Reconciliation (continued)
Adjusted Operating Income and Margin Reconciliation (continued) Q1-24 Q2-24 Q3-24 Q4-24 FY-24 (Loss) (Loss) (Loss) (Loss) (in millions) Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Reported (1) $ (113) $ 1,502 $ 18 $ 1,578 $ (1,205) $
Slide 25: Adjusted EBITDA and Margin Reconciliation
Adjusted EBITDA and Margin Reconciliation Q1-23 Q2-23 Q3-23 Q4-23 FY-23 (Loss) (Loss) (in millions) Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Reported (1) $ 71 $ 1,715 $ (61) $ 1,754 $ 49 $ 1,652 $ (58) $ 1,765 $ 1 $ 6,886 Adjustm e
Slide 26: Adjusted EBITDA and Margin Reconciliation (continued)
Adjusted EBITDA and Margin Reconciliation (continued) Q1-24 Q2-24 Q3-24 Q4-24 FY-24 (Loss) (Loss) (Loss) (Loss) (in millions) Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Profit Revenue Margin Reported (1) $ (113) $ 1,502 $ 18 $ 1,578 $ (1,205) $ 1,578 $ (2
Slide 27: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation (in millions) Q1-23 Q2-23 Q3-23 Q4-23 FY-23 Q1-24 Q2-24 Q3-24 Q4-24 FY-24 (1) Reported $78 $95 $124 $389 $686 ($79) $123 $116 $351 $511 Less: capital expenditures 8 7 12 10 37 10 8 9 17 44 Free Cash Flow $70 $88 $112 $379 $649 ($89) $115 $107 $334 $467 _________________
Slide 28: Adjusted SAG and Margin Reconciliation
Adjusted SAG and Margin Reconciliation Q4-24 Q4-23 FY-24 FY-23 (in millions) SAG Revenue Margin SAG Revenue Margin SAG Revenue Margin SAG Revenue Margin (1) $ 377 $ 1,613 23.4% $ 440 $ 1,765 24.9% $ 1,537 $ 6,221 24.7% $ 1,696 $ 6,886 24.6% Reported Less: Reinvention-related costs 12 - 12 - Less: Tr
Slide 29: Other Expenses, net Reconciliation
Other Expenses, net Reconciliation (in millions) Q4-24 Q4-23 FY-24 FY-23 (1) $ 38 $ 42 $ 158 $ 75 Reported Less: Non-service retirement-related costs 6 5 80 19 Less: Transaction and related costs, net - - (38) - Less: Loss (Gain) on early extingushment of debt 1 7 (2) 10 Adjusted $ 31 $ 30 $ 118 $ 4
Slide 30: Adjusted Operating Income and Margin – Guidance
Adjusted Operating Income and Margin – Guidance FY 2025 (2, 3) (in millions) Profit Revenue (CC) Margin (1) Estimated ~$16 ~$6,350 ~0.25% Adjustments: Restructuring and related costs, net 30 Amortization of intangible assets 30 Other expenses, net 244 (4) Adjusted ~$320 ~$6,350 At least 5.0% _______
Slide 31: Free Cash Flow – Guidance
Free Cash Flow – Guidance (in millions) FY 2025 (1) Operating Cash Flow ~$420-470 Less: capital expenditures 70 Free Cash Flow ~$350-400 (1)Net cash provided by operating activities. 31
Slide 32: © 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.