Xerox Holdings Corporation · NASDAQ:XRX

Xerox — Q1 2025 Earnings Presentation

29 slides from Xerox's earnings presentation, May 1, 2025

  1. Slide 1: Earnings Presentation Q1 2025 Results

    Earnings Presentation Q1 2025 Results May 1, 2025

  2. 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

  3. Slide 3: Q1 2025 Key Financial Measures

    Q1 2025 Key Financial Measures Revenue ($B) Adj1 Operating Margin Free Cash Flow1 ($M) $1.50 $1.46 2.2% 1.5% $(89) $(109) 2024 2025 2024 2025 2024 2025 Operating 2025 % Change: (3.0)% @ AC, (1.1)% @ CC1 Cash Flow $(79) $(89) Revenue Trend ($M) Adj1 Earnings Per Share Shareholder Returns ($M) $2,000

  4. 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 Execute penetration of IT Solutions & Digital Services across Xerox’s Print client base Reinvention • Operati

  5. Slide 5: Reinvention: Path to Revenue Stabilization and Improved Profits

    Reinvention: Path to Revenue Stabilization and Improved Profits 1Q25 Reinvention Progress Estimated Savings / Synergies Targeted Revenue Mix Shift Geographic Simplification 2024 Targeted mix2 • Geographic simplification program is largely complete, resulting in the transition of 18 countries to indi

  6. Slide 6: Update on Pending Acquisition of Lexmark

    Update on Pending Acquisition of Lexmark Transaction Status Lexmark: Summary 2024 Results Approval process progressing as expected Fiscal Years, as of 12/31 % Change • Cleared Hart-Scott-Rodino waiting period in the U.S. ($ million) 2023 2024 YOY and received select international approvals; expect B

  7. Slide 7: Frequently Asked Questions

    Frequently Asked Questions Have recent tariff proposals, DOGE or general macroeconomic concerns affected Print or IT Services demand? Demand for Print and IT products and services remained steady throughout the first quarter. Across both segments, we saw a mi ld softening in activity toward the end

  8. Slide 8: Financial Results Summary

    Financial Results Summary (in millions, except per share data) B/(W) % Change P&L Measures Q1 2025 YOY YOY P&L Ratios Q1 2025 B/(W) YOY Print & Other 1,294 (134) IT Solutions 164 90 Gross Margin – Adjusted3 29.7% (220) bps Intersegment elimination1 (1) (1) (3.0)% AC / Revenue $1,457 $(45) (1.1)% CC1

  9. Slide 9: Print & Other Segment Results

    Print & Other Segment Results % Change YOY Total Installs vs. CC1 Equipment Revenue YOY Q1 B/(W) 40% (in millions) AC CC1 2025 YOY 20% 0% Equipment 284 (6) (2.1)% (0.7)% (20%) Post Sale 1,010 (128) (11.2)% (9.2)% (40%) 1Q24 2Q24 3Q24 4Q24 1Q25 Total Revenue $1,294 $(134) (9.4)% (7.6)% CC¹ Equipment

  10. Slide 10: IT Solutions Segment Results

    IT Solutions Segment Results % Change YOY IT Solutions: Key Performance Indicators / Trends Q1 B/(W) • Pro forma Gross Billings grew 0.4% year-over-year: (in millions) AC CC1 2025 YOY • Double-digit growth in Infrastructure & Networking Products 105 58 123.4% 123.4% equipment and software Services 5

  11. Slide 11: Cash Flow

    Cash Flow (in millions) Q1 2025 Q1 2024 Pre-tax (Loss) (67) (150) 1 Non-Cash Add-Backs 100 236 Restructuring Payments (18) (16) Pension Contributions (34) (31) 2 Working Capital, net (60) (135) 3 Change in Finance Assets 98 188 4 Other (108) (171) Cash used in Operations (89) (79) Cash provided by (

  12. Slide 12: Capital Structure

    Capital Structure Debt and Cash Debt Maturity Ladder³ ($M) $844 (in billions) Q1 2025 Q4 2024 $805 $55 Total Debt ($3.3) ($3.4) $344 Less: Financing Allocated Debt $1.7 $1.7 $491 $103 $400 Core Debt ($1.6) ($1.7) $750 $350 1 $250 Less: Cash $0.4 $0.6 $500 $388 $151 Net Core Debt ($1.2) ($1.1) $55 To

  13. Slide 13: 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 $225 million of incremental gross cost Reinvention expec

  14. Slide 14: 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 impact from the pending acquisition of Lexmark. Guidance further excludes potential adverse effec

  15. Slide 15: Appendix

    Appendix 15

  16. Slide 16: Operating Trends

    Operating Trends 2023 2024 2025 (in millions, except EPS) FY Q1 Q2 Q3 Q4 FY Q1 Total Revenue $6,886 $1,502 $1,578 $1,528 $1,613 $6,221 $1,457 % Change (3.1)% (12.4)% (10.0)% (7.5)% (8.6)% (9.7)% (3.0)% CC 1 % Change (3.3)% (13.2)% (9.6)% (7.3)% (8.0)% (9.5)% (1.1)% Adj1 Operating Margin 5.6% 2.2% 5.

  17. Slide 17: 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

  18. Slide 18: 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

  19. Slide 19: 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 Net Net Net Net Net (Loss) Net (Loss) (Loss) (Loss) 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 Reported (1) $ 1 $ (0.09) $ (

  20. Slide 20: Adjusted Effective Tax Rate Reconciliation

    Adjusted Effective Tax Rate Reconciliation Q1-25 Q1-24 Income Tax Pre-Tax Pre-Tax Expense Effective Tax (Loss) Income Tax Effective Tax (in millions) (Loss) (Benefit) Rate Income (Benefit) Rate Reported (1) $ (67) $ 23 (34.3%) $ (150) $ (37) 24.7% (2) Income tax on PARC donation - (9) - - (2) Deferr

  21. Slide 21: Adjusted Gross Profit and Margin Reconciliation

    Adjusted Gross Profit and Margin Reconciliation (in millions) Q1-25 Q1-24 (1) Revenue $ 1,457 $ 1,502 Cost of revenue (1) 1,031 1,059 Gross Profit and Margin 426 29.2% 443 29.5% Adjustment: Inventory-related impact - exit of certain Production Print manufacturing operations 7 36 Adjusted Gross Profi

  22. Slide 22: Adjusted Gross Profit and Margin Reconciliation – Print and Other

    Adjusted Gross Profit and Margin Reconciliation – Print and Other (in millions) Q1-25 Q1-24 Revenue (1) $ 1,294 $ 1,428 (1) Cost of revenue 895 995 Gross Profit and Margin 399 30.8% 433 30.3% Adjustment: Inventory-related impact - exit of certain Production Print manufacturing operations 7 36 Adjust

  23. Slide 23: 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 (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 Rep

  24. Slide 24: Adjusted EBITDA and Margin Reconciliation

    Adjusted EBITDA and Margin Reconciliation FY-23 Q1-24 Q2-24 Q3-24 Q4-24 FY-24 Q1-25 (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 Reported (1) $ 1 $ 6

  25. Slide 25: Free Cash Flow Reconciliation

    Free Cash Flow Reconciliation (in millions) FY-23 Q1-24 Q2-24 Q3-24 Q4-24 FY-24 Q1-25 (1) Reported $686 ($79) $123 $116 $351 $511 ($89) Less: capital expenditures 37 10 8 9 17 44 20 Free Cash Flow $649 ($89) $115 $107 $334 $467 ($109) ___________________ (1) Net cash provided by (used in) operating

  26. Slide 26: Other Expenses, net Reconciliation

    Other Expenses, net Reconciliation (in millions) Q1-25 Q1-24 (1) $ 68 $ 44 Reported Less: Non-service retirement-related costs 18 23 Less: Loss (Gain) on early extingushment of debt - (3) Less: Commitment fee expense 18 - Adjusted $ 32 $ 24 __________ (1) Other expenses, net 26

  27. Slide 27: 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% _______

  28. Slide 28: 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. 28

  29. Slide 29: © 2025 Xerox Corporation. All rights reserved.

    © 2025 Xerox Corporation. All rights reserved. Xerox® is a trademark of Xerox Corporation in the United States and/or other countries.

Xerox Holdings — Q1 2025 Earnings Presentation on 6ix