Core Insights - The article emphasizes a fundamentals-based approach to value investing, highlighting the importance of long-term growth and a strong balance sheet over low multiple stocks [1] Group 1: Company Analysis - Xerox (NASDAQ: XRX) has been recommended for a sell rating due to poor fundamentals and lack of visible earnings growth [1] - The author believes that many investors mistakenly assume that low multiple stocks are inherently cheap, which is not always the case [1] Group 2: Investment Philosophy - The focus is on identifying companies with steady long-term growth, minimal cyclicality, and robust financial health [1] - There is an acknowledgment of the risks involved in investing, particularly the potential to overpay for successful companies, underscoring the significance of valuation [1] - The article suggests that in certain situations, the potential for growth may outweigh immediate price concerns [1]

Xerox Holdings Corporation (XRX) reported a first-quarter 2025 loss of six cents per share compared with the Zacks Consensus Estimate of a loss of 5 cents and the year-ago earnings of 6 cents.Revenues of $1.46 billion missed the Zacks Consensus Estimate by 3.2% and decreased 3% year over year on a reported basis. Revenues declined 1.1% on a constant-currency (CC) basis.The company’s shares have depreciated 67.6% over the past year compared with the Office Supplies industry’s 47.5% decline.Q1 Revenue Details ...

Xerox Holdings Corporation (XRX) reported $1.46 billion in revenue for the quarter ended March 2025, representing a year-over-year decline of 3%. EPS of -$0.06 for the same period compares to $0.06 a year ago.The reported revenue represents a surprise of -3.19% over the Zacks Consensus Estimate of $1.5 billion. With the consensus EPS estimate being -$0.05, the EPS surprise was -20.00%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to ...

Xerox Holdings Corporation (XRX) came out with a quarterly loss of $0.06 per share versus the Zacks Consensus Estimate of a loss of $0.05. This compares to earnings of $0.06 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -20%. A quarter ago, it was expected that this company would post earnings of $0.52 per share when it actually produced earnings of $0.36, delivering a surprise of -30.77%.Over the last four quarters, the com ...

Xerox (XRX) Q1 2025 Earnings Call May 01, 2025 08:00 AM ET Speaker0 this time, I would like to turn the meeting over to Mr. David Beckel, Vice President and Head of Investor Relations. Speaker1 Good morning, everyone. I'm David Beckel, Vice President and Head of Investor Relations at Xerox Holdings Corporation. Welcome to the Xerox Holdings Corporation First Quarter twenty twenty five Earnings Release Conference Call hosted by Steve Vanderzak, Chief Executive Officer. He's joined by John Bruno, President an ...

These forward-looking statements speak only as of the date hereof or of the date to which they refer, and the Company assumes no obligation to update or revise any forward-looking statements as a result of new information or future events or developments, except as required by law. 2 Q1 2025 Key Financial Measures Revenue ($B) 2025 % Change: (3.0)% @ AC, (1.1)% @ CC1 $1.50 $1.46 2024 2025 Earnings Presentation Q1 2025 Results May 1, 2025 Forward-Looking Statements This presentation and other written or oral ...

Revenue Performance - Revenue for Q1 2025 was $1.46 billion, a decrease of 3.0% year-over-year, and a decline of 1.1% in constant currency[5] - Total revenue for Q1 2025 was $1,457 million, a decrease of 3.0% compared to $1,502 million in Q1 2024[33] - The company expects FY 2025 revenue to be approximately $6,350 million, reflecting low single-digit growth in constant currency[85] Profitability and Loss - GAAP net loss was $(90) million, or $(0.75) per share, an improvement of $23 million or $0.19 per share compared to Q1 2024[5] - Adjusted operating income for Q1 2025 was $22 million, a decrease of $11 million compared to Q1 2024, attributed to lower revenue and gross profit[24] - Adjusted net loss for Q1 2025 was $4 million, or $0.06 per share, while in Q1 2024, it was $11 million, or $0.06 per share[72] Cash Flow - Operating cash flow was $(89) million, a decrease of $10 million year-over-year, and free cash flow was $(109) million, down $20 million year-over-year[5] - Free cash flow guidance for 2025 is projected to be between $350 million and $400 million[13] - Free cash flow for FY 2025 is projected to be in the range of $350 million to $400 million, with operating cash flow estimated at $420 million to $470 million[87] Segment Performance - IT Solutions revenue increased by 121.6% year-over-year to $164 million, while Print and Other revenue decreased by 9.4% to $1.29 billion[6] - The Print and Other segment generated $1,294 million in revenue, a 9.4% decrease from $1,428 million in the previous year[42] - Equipment sales for Q1 2025 were $284 million, a decline of 2.1% in actual currency and 0.7% in constant currency compared to Q1 2024[23] Guidance and Expectations - The company expects low single-digit revenue growth in constant currency for the remainder of 2025[13] - Adjusted operating margin guidance for 2025 is at least 5.0%[13] - The expected reduction in operating income due to tariffs is around $50 million in 2025, with plans to mitigate this through price increases and supply chain adjustments[26] Acquisitions and Strategic Moves - The pending acquisition of Lexmark is not included in the current financial guidance[10] - Progress on the Lexmark acquisition includes receiving key regulatory approvals, with 32% of the required shareholder vote secured[28] - The company plans to finance and close the acquisition of Lexmark, aiming to realize anticipated synergies[56] Market and Product Strategy - The company categorizes its products into three segments: "Entry" for A4 devices and desktop printers serving small and medium workgroups, "Mid-Range" for A3 devices serving large workgroups, and "High-End" for production printing systems targeting graphic communications[22] - The company aims to enhance its market presence by expanding its product offerings across all three segments[22] - There is an emphasis on innovation in new product development to maintain competitive advantage in the printing industry[22] Financial Position - Total assets decreased to $8,211 million as of March 31, 2025, down from $8,365 million at December 31, 2024, reflecting a decline of approximately 1.8%[21] - The company established a valuation allowance of $59 million against certain deferred tax assets, impacting the effective tax rate significantly[76] - The company completed a private offering of $400 million in aggregate principal amount of senior secured notes, which will affect future financing costs[81] Risks and Challenges - The company anticipates potential risks including global macroeconomic conditions, supply chain disruptions, and competitive pressures affecting future performance[56] - The company is working with suppliers to mitigate tariff-related cost increases and monitor client sentiment[11]

The market expects Xerox Holdings Corporation (XRX) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended March 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report might help the stock move higher if these key numbers are better than expectations. On the other ha ...

A month has gone by since the last earnings report for Xerox Holdings Corporation (XRX) . Shares have lost about 19.6% in that time frame, underperforming the S&P 500.Will the recent negative trend continue leading up to its next earnings release, or is Xerox due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Xerox Misses Q4 Earnings EstimatesXerox r ...

Business Strategy and Acquisitions - Xerox's Reinvention strategy aims to strengthen core business and improve financial flexibility, with a gross savings target of over $200 million achieved in 2024[25]. - The company closed the acquisition of ITsavvy for $405 million and announced a pending acquisition of Lexmark for $1.5 billion, expected to enhance IT Solutions offerings and expand the Total Addressable Market[29]. - Xerox's focus for 2025 includes executing Reinvention initiatives, realizing benefits from recent acquisitions, and enhancing balance sheet strength[31]. - The company aims to realize over $200 million in expected synergies from the integration of ITsavvy and Lexmark within two years of closing the acquisitions[33]. - The Lexmark acquisition remains subject to regulatory approvals and shareholder approval, which may delay or prevent the completion of the transaction[171]. - The Lexmark acquisition may incur up to $30 million in documented out-of-pocket expenses if either party fails to obtain necessary approvals[172]. - The company expects to finance the Lexmark acquisition through third-party indebtedness and issuing notes, increasing overall indebtedness risks[174]. - The company faces risks related to the Lexmark acquisition that may disrupt current business plans and operations[175]. - Legal proceedings may arise following the announcement of the Lexmark acquisition, potentially increasing transaction costs[175]. Financial Performance and Management - The company plans to reduce its annual dividend from $1 per share to $0.50 per share starting in Q1 2025, prioritizing debt reduction alongside the Lexmark acquisition[34]. - Xerox's total finance assets amounted to approximately $2.0 billion, including $1.75 billion in finance receivables and $245 million in equipment on operating leases[82]. - As of December 31, 2024, the company's total debt was $3.4 billion, consisting of $2.6 billion in Senior and Unsecured Debt and approximately $813 million in Secured Borrowings[128]. - The company may incur additional indebtedness for growth, which could affect financial flexibility and operational capabilities[128]. - As of December 31, 2024, the total principal debt is $3,451 million, with $593 million in secured borrowings carrying variable interest rates[458]. - The consolidated average interest rate associated with total debt for 2024 is approximately 6.5%[457]. - The projected benefit obligations for defined benefit pension and retiree-health benefit plans exceeded the value of the assets by approximately $1.1 billion as of December 31, 2024[137]. - The company expects additional funding requirements for its pension plans in future years, which may impact operating flexibility and cash flow[138]. Operational Efficiency and Simplification - Xerox's operational simplification includes the establishment of a Global Business Services organization to drive efficiencies and productivity gains[25]. - The implementation of a new Enterprise Resource Planning (ERP) system is critical for operational efficiency, but it involves substantial expenditures and risks of disruption during the transition[121]. - The company is adopting new pricing strategies and distribution models, which may not align with customer expectations, potentially leading to reduced demand[119]. Environmental and Sustainability Goals - Xerox aims for net zero emissions by 2040, with an interim goal to reduce Scope 1 and Scope 2 GHG emissions by at least 60% by 2030 from a 2016 baseline[55]. - In 2023, Xerox achieved a 15.7% reduction in Scope 1 and Scope 2 GHG emissions, totaling a 51% reduction since 2016[55]. - Approximately 90% of spent toner cartridges and other supplies were recycled, reused, or remanufactured through the Xerox Supplies Recycling Program in 2023[56]. - The company has set a voluntary goal to achieve net zero greenhouse gas emissions by 2040, recognizing associated risks and uncertainties[144]. - The company faces substantial costs related to compliance with environmental laws and regulations, which could impact its financial condition[165]. Workforce and Human Resources - As of December 31, 2024, Xerox had approximately 16,800 employees, a reduction of 3,300 or 16.4% from the previous year[57]. - Approximately 20% of Xerox employees are represented by unions, with 87% of those located outside the U.S.[59]. - Xerox's long-term incentive program included approximately 35% of employees in 2024, aligning leaders with shareholder interests[66]. - The company is undergoing significant changes in its business model, which may lead to challenges in attracting and retaining key personnel due to market competition and economic uncertainty[117]. Market and Economic Conditions - The company faces risks from global macroeconomic conditions, including rising inflation and interest rates, which could decrease demand for products and services[99]. - Supply chain disruptions have increased costs for materials and components, impacting the overall cost structure and profitability[112]. - Xerox's profitability depends on obtaining adequate pricing for products and services, which may be pressured by market conditions such as tariffs and inflation[110]. - The company is focusing on expanding into adjacent markets with new products and services, including integrated IT infrastructure solutions and Intelligent Document Processing[105]. - The success of the Managed Print and Digital services business relies on attracting and retaining customers, with contracts generally renewable at the customer's option[107]. Risks and Compliance - The company faces risks related to government contracts, including potential terminations and audits that could negatively impact revenue and reputation[123][124]. - The company has offshored and outsourced certain operations, which may expose it to geopolitical uncertainties and service quality issues[122]. - Increased credit market volatility has raised borrowing costs and reduced access to debt and equity markets, impacting the company's financing business[127]. - The company is subject to numerous federal, state, local, and foreign taxes, and any adverse outcomes from tax audits could impact financial results[153]. - The company relies on intellectual property rights for its products and services, with potential risks of infringement or challenges that could affect competitive position[139]. - The company may face increased scrutiny from stakeholders regarding CSR practices, which could impact reputation and financial performance[146]. - The company operates globally and is exposed to risks from foreign exchange, political instability, and regulatory changes that could adversely affect results[147]. - The company has implemented reasonable security measures to protect its information systems and confidential information, but remains vulnerable to cyber-attacks and data breaches[154]. - Cybersecurity incidents could lead to operational disruptions, legal exposure, and damage to the company's reputation, potentially affecting profitability and cash flow[157]. - The company is subject to numerous privacy and data protection laws, including the California Consumer Privacy Act (CCPA) and the General Data Protection Regulation (GDPR), which could impose additional compliance costs[159][162]. - The anticipated use of artificial intelligence (AI) technologies may create new regulatory or operational risks, including potential misuse and legal exposure[164].