Xerox : Q1 Quarterly Results (3e2295)

About this update from Xerox Holdings Corporation

Cost of Revenue Cost of sales Cost of services, maintenance, rentals and other Total Cost of Revenue 382 480 788 717 2,367 600 649 645 728 732 2,754 697 1,031 1,125 1,516 1,449 5,121 1,297 Gross Profit Sales gross profit Services, maintenance and rentals gross profit Gross Profit Research, development & engineering 175 185 205 351 916 320 251 266 240 228 985 229 426 42 451 43 445 74 579 71 1,901 230 549 64 Bad Debt Expense Selling, administrative and general exp. (Excl Bad Debts) Total Selling, administrative and general exp. Non-financing interest expense Restructuring and related costs Amortization of intangible assets Divestitures Total Costs and Expenses (1) 10 59 (2) 66 45 10 10 30 33 83 30 (4) 1,524 - 1,636 - 2,261 - 2,089 (4) 7,510 - 1,919 2025 2026 Q1 Q2 Q3 Q4 FY Q1 Sales Services, maintenance, rentals and other Total Revenues 557 665 993 1,068 3,283 920 900 911 968 960 3,739 926 1,457 1,576 1,961 2,028 7,022 1,846 Aggregate Exchange losses All other, net Total Other, net 33 - 55 1 80 5 80 6 248 12 84 5 35 24 20 21 100 (36) 35 25 25 27 112 (31) (67) (60) (300) (61) (488) (73) 9 15 9 6 39 5 369 353 468 425 1,615 425 378 368 477 431 1,654 430 Loss before Income Taxes 23 46 460 12 541 32 (90) (106) (760) (73) (1,029) (105) (4) (3) (4) (3) (14) (4) (94) (109) (764) (76) (1,043) (109) Income Taxes Net Loss Less: Preferred stock dividends, net Net Loss attributable to Common Shareholders Preferred Dividends/ - Basic Other - Diluted ** 2025 2026 Q1 Q2 Q3 Q4 FY Q1 4 3 4 3 14 4 4 3 4 3 14 4 - Basic - Diluted ** 125 126 127 128 126 129 125 126 127 128 126 129 (0.75) (0.87) (6.01) (0.60) (8.25) (0.84) (0.75) (0.87) (6.01) (0.60) (8.25) (0.84) Weighted Average Shares Loss Per Share Key Ratios - GAAP: Gross Margins SAG as a % of Revenue Tax Rate Ending Xerox Employment Total Basic Loss per Share Total Diluted Loss per Share - Sales 31.4% 27.8% 20.6% 32.9% 27.9% 34.8% - Services/Maintenance/Rentals/Other 27.9% 29.2% 24.8% 23.8% 26.3% 24.7% - Total 29.2% 28.6% 22.7% 28.6% 27.1% 29.7% 25.9% 23.4% 24.3% 21.3% 23.6% 23.3% -34.3% -76.7% -153.3% -19.7% -110.9% -43.8% 16,800 16,600 26,300 24,600 24,600 22,900 **For those periods that exclude the preferred stock dividend the average shares for the calculations of diluted EPS include 7 million shares associated with our Series A or Series B convertible preferred stock. Non-GAAP basis is adjusted to exclude restructuring and related costs, amortization of intangible assets, non-service retirement-related costs as well as other discrete, unusual or infrequent items as described in our Non-GAAP Financial Measures section of our Quarterly Reports on Form 10-Q and our Annual Report on Form 10-K 2025 2026 Q1 Q2 Q3 Q4 FY Q1 (in $ millions, except per-share data) Revenues Sales Services, maintenance, rentals and other Total Revenues 557 665 993 1,068 3,283 920 900 911 968 960 3,739 926 1,457 1,576 1,961 2,028 7,022 1,846 Cost of Revenue Cost of sales Cost of services, maintenance, rentals and other Total Cost of Revenue 377 474 679 711 2,241 595 647 641 716 725 2,729 691 1,024 1,115 1,395 1,436 4,970 1,286 Gross Profit Sales gross profit Services, maintenance and rentals gross profit Gross Profit 180 191 314 357 1,042 325 253 270 252 235 1,010 235 433 461 566 592 2,052 560 Bad Debt Expense Selling, administrative and general exp. (Excl Bad Debts) Total Selling, administrative and general exp. 9 15 9 6 39 5 360 344 418 415 1,537 419 369 359 427 421 1,576 424 Research, development & engineering 42 43 74 69 228 64 Aggregate Exchange losses All other, net Total Other, net - 1 5 6 12 5 (1) (15) - (1) (17) (1) (1) (14) 5 5 (5) 4 Non-financing interest expense 33 55 80 80 248 84 1,467 1,558 1,981 2,011 7,017 1,862 Total Costs and Expenses (10) 18 (20) 17 5 (16) (Loss) Income before Income Taxes (6) 95 (47) 25 67 35 Income Taxes (4) (77) 27 (8) (62) (51) Net (Loss) Income (Loss) Earnings Per Share Operations: Preferred Dividends - Adjusted EPS ** Adjusted (Loss) Earnings per Share Adjusted Weighted Average Shares ** (0.06) (0.64) 0.20 (0.10) (0.60) (0.43) - - - - - - (0.06) (0.64) 0.20 (0.10) (0.60) (0.43) 125 126 129 128 126 129 Non-GAAP basis is adjusted to exclude restructuring and related costs, amortization of intangible assets, non-service retirement-related costs as well as other discrete, unusual or infrequent items as described in our Non-GAAP Financial Measures section of our Quarterly Reports on Form 10-Q and our Annual Report on Form 10-K 2025 2026 Q1 Q2 Q3 Q4 FY Q1 (in $ millions, except per-share data) - Sales - Services/Maintenance/Rentals/Other - Total 32.3% 28.7% 31.6% 33.4% 31.7% 35.3% 28.1% 29.6% 26.0% 24.5% 27.0% 25.4% 29.7% 29.3% 28.9% 29.2% 29.2% 30.3% Key Ratios - Adjusted: Gross Margins 1.5% 3.7% 3.3% 5.0% 3.5% 3.9% Adjusted Operating Margin SAG as a % of Revenue Adjusted Effective Tax Rate 25.3% 22.8% 21.8% 20.8% 22.4% 23.0% 60.0% 527.8% 235.0% 147.1% 1340.0% -218.8% Non-GAAP Adjustments: Restructuring and related costs (1) 10 59 (2) 66 45 Amortization of intangible assets 10 10 30 33 83 30 Non-service retirement-related costs 18 19 20 21 78 21 Transaction and related costs 3 6 47 3 59 4 Transformation costs 6 3 3 5 17 2 Purchase accoutning adjustments to fixed assets - - 16 13 29 11 Purchase accounting adjustments to inventory - - 102 - 102 - Loss (Gain) on extinguishment of debt - 4 - 1 5 (56) Divestitures (4) - - - (4) - Commitment Fee expense 18 4 - - 22 - Escrow interest - 12 - - 12 - Inventory impact related to the exit of certain Production Print manufacturing operations 7 10 3 4 24 - Tax on adjusted items 29 (49) 507 (13) 474 (3) 86 29 787 65 967 54 Total Non-GAAP Adjustments **For those periods that exclude the preferred stock dividend the average shares for the calculations of diluted EPS include 7 million shares associated with our Series A or Series B convertible pref stock. Xerox Holdings Financial Model (unaudited) (in $ millions) 2025 2026 Q1 Q2 Q3 Q4 FY Q1 Revenue Entry 43 51 119 168 381 135 Mid-range 198 235 222 258 913 198 High-end 40 44 39 52 175 40 Other 3 6 3 7 19 5 Total Equipment Revenue 284 336 383 485 1,488 378 Installs Entry Color 18% (4)% (0)% (4)% 2% (29)% B&W 39% (18)% (38)% (8)% (12)% 11% Mid-range Color 11% 0% 2% (21)% (4)% (27)% B&W (11)% (23)% (17)% (23)% (19)% (28)% High-end Color (19)% (16)% (31)% (21)% (22)% 35% B&W (67)% (73)% (97)% (83)% (83)% (76)% Notes: CC = Constant Currency

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