In This Article:
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Revenue: $1.5 billion, decreased 7.5% in actual currency and 7.3% in constant currency year-over-year.
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Adjusted EPS: $0.25, $0.21 lower year-over-year.
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Free Cash Flow: $107 million, $5 million lower year-over-year.
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Adjusted Operating Margin: 5.2%, increased by 110 basis points year-over-year.
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Equipment Sales: $339 million, declined around 12% in actual and constant currency.
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Post-Sales Revenue: $1.2 billion, declined mainly 6% in actual and constant currency.
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Operating Expenses: Decreased by $53 million year-over-year, more than 10% reduction.
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Gross Margin: Flat year-over-year.
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Net Promoter Score: Improved by 11 points in the Americas.
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Debt Balance: Reduced quarter over quarter.
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Goodwill Impairment Charge: Approximately $1 billion, or $8.16 per share.
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Adjusted Tax Rate: 27.7%, compared to 7.2% in the same quarter last year.
Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Xerox Holdings Corp (NASDAQ:XRX) reported a second consecutive period of moderating revenue declines, indicating some stabilization in their financial performance.
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The company achieved more than 100% free cash flow conversion from adjusted operating income, showcasing strong cash management.
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Xerox Holdings Corp (NASDAQ:XRX) saw double-digit growth in digital and managed IT services revenue, reflecting successful expansion in these areas.
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The pending acquisition of ITsavvy is expected to enhance Xerox's portfolio and drive growth in IT services, potentially increasing revenue streams.
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Operating expenses decreased by more than $50 million year over year, demonstrating effective cost management and organizational simplification.
Negative Points
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Total revenue declined by 7.5% year over year, with equipment sales falling short of expectations due to product launch delays and lower sales force productivity.
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Adjusted EPS decreased by $0.21 year over year, primarily due to the one-time sale of non-core business assets in the prior-year quarter.
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The company recorded a GAAP loss per share of $9.71, including a significant non-cash goodwill impairment charge.
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Xerox Holdings Corp (NASDAQ:XRX) reduced its full-year revenue guidance, now expecting a decline of around 10% in constant currency.
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The company's adjusted operating income margin guidance was lowered to around 5%, reflecting challenges in achieving expected revenue and cost reduction targets.
Q & A Highlights
Q: Can you provide more details on the product delays and sales productivity issues? What were the specific challenges, and how do you plan to address them? A: Steve Bandrowczak, CEO, explained that the reinvention is a multi-year journey aimed at sustainable revenue growth and double-digit operating income. The product delays were mainly due to forecasting issues related to inventory and product transition timing. John Bruno, President and COO, added that the sales productivity issues stemmed from large organizational changes and workforce reductions, which affected sales headcount and territory assignments. They are confident that process improvements will drive productivity higher in the future.