Core Insights - Xerox Holdings (XRX) reported disappointing fourth-quarter 2025 results, with both earnings and revenues missing the Zacks Consensus Estimate [1][8] - Despite the underwhelming results, the company's shares have increased by 7.4% since the earnings release on January 29 [1] Financial Performance - The quarterly adjusted loss was 10 cents per share, compared to the Zacks Consensus Estimate earnings of 15 cents, representing a decline of over 100% from the previous year [2] - Revenues for the quarter were $2.03 billion, falling short of the consensus estimate by 2.6%, but showing a year-over-year increase of 25.7% [2] - Post-sale revenues reached $1.54 billion, up 26.5% year-over-year, but missed the estimate of $1.71 billion [3] - Equipment sales increased by 23.4% year-over-year to $485 million, surpassing the estimate of $395.7 million [3] - The Print and Other segment generated revenues of $1.87 billion, up 24.9% year-over-year, exceeding the estimate of $1.62 billion [3] Operating Performance - Adjusted operating income was $102 million, down 2% year-over-year, with an adjusted operating margin of 5%, a decrease of 140 basis points from the previous year [5] Balance Sheet and Cash Flow - Xerox ended the quarter with cash and cash equivalents of $512 million, down from $576 million at the end of December 2024 [6] - Net cash provided by operating activities was $208 million, while free cash flow for the quarter was $184 million [6] 2026 Guidance - For 2026, the company projects adjusted operating income between $400 million and $500 million [7] - Free cash flow is anticipated to be approximately $250 million, with operating cash flow expected to be around $360 million [7] - Xerox expects revenues for 2026 to exceed $7.5 billion, with capital expenditures estimated at $110 million [7]

Butler said fourth-quarter revenue came in slightly below guidance, while adjusted operating income and free cash flow were ahead of internal expectations due to integration activities, early synergy capture, and cost discipline.Adjusted operating margin was 5%, down 140 basis points from the prior year. Free cash flow was $184 million, down $150 million year-over-year. Xerox posted an adjusted loss per share of $0.10, which the company said was $0.46 lower than the prior-year period.Xerox reported fourth-q ...

Analyst’s Disclosure: I/we have a beneficial long position in the shares of XRX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. While this article may sound like financial advice, please observe that the author is not a CFA or in any way licensed to give financial advice ...

Xerox Holdings Corporation (XRX) reported $2.03 billion in revenue for the quarter ended December 2025, representing a year-over-year increase of 25.7%. EPS of -$0.10 for the same period compares to $0.36 a year ago.The reported revenue represents a surprise of -2.6% over the Zacks Consensus Estimate of $2.08 billion. With the consensus EPS estimate being $0.15, the EPS surprise was -168.97%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectat ...

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $2.03 billion, an increase of approximately 26% in actual currency and 24% in constant currency, primarily due to the acquisitions of Lexmark and ITsavvy. Pro forma revenue declined by 9% [3] - For the full year, revenue reached $7.02 billion, up roughly 13% in actual currency and 12% in constant currency, but declined approximately 8% excluding acquisition benefits. Adjusted loss per share was $0.60, down $1.57 year over year [4] - Free cash flow for Q4 was $184 million, a decrease of $150 million year over year, while for the full year, it was $133 million, which was above the guidance of $107 million [3][27] Business Line Data and Key Metrics Changes - In the Print and Other segment, Q4 equipment revenue was $485 million, up 23% as reported, but down approximately 10% on a pro forma basis. Legacy Xerox equipment revenue declined 14% in constant currency [22][23] - Print post-sale revenue was $1.39 billion, up 25% as reported, but down 9% on a pro forma basis. Excluding reinvention effects, pro forma post-sale revenue declined approximately 5% [23] - IT Solutions revenue increased by 39% year-over-year, reflecting the full inclusion of ITsavvy for the entire quarter. Pro forma gross billings increased by 13% year-over-year [24] Market Data and Key Metrics Changes - The company noted that macroeconomic challenges, including tariffs and increased product costs, continued to impact performance, particularly in the print equipment sales [3][8] - The company is experiencing a firming of demand in the IT solutions sector, with more than $60 million of pipeline creation in 2025 [24] Company Strategy and Development Direction - The company is focused on three strategic priorities: executing reinvention, realizing acquisition benefits, and maintaining balance sheet strength [8] - The integration of Lexmark and ITsavvy is expected to unlock tangible commercial and operational benefits, with a unified sales organization anticipated to enhance market reach [11][12] - The company is also investing in AI capabilities to drive efficiencies and improve customer experience, including the establishment of an AI center of excellence [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about improving business trends despite ongoing macroeconomic headwinds, with expectations for a stronger 2026 [3][4] - The company anticipates that many cost-related headwinds will begin to ease, while new product launches and a unified IT solutions organization will provide meaningful tailwinds [8][71] - Management highlighted the importance of navigating challenges related to memory price increases and their impact on costs across various business lines [5][6] Other Important Information - The company announced a special pro rata distribution of warrants to shareholders, which is seen as a balance sheet-friendly way to reward loyalty and provide bondholders with options to participate in equity [31] - The company plans to use excess free cash flow for debt repayment, with a medium-term target of approximately 3x trailing 12 months EBITDA [28][29] Q&A Session Summary Question: Are orders returning to normal post-government shutdown? - Management indicated that they are seeing growth opportunities in government sectors and that the strategy of acquiring ITsavvy and Lexmark is working to expand their portfolio [34][36] Question: What is the impact of memory prices on the ITsavvy business? - Management clarified that memory price increases are creating uncertainty across all industries, but they are working to help clients navigate these challenges through various service models [36][39] Question: How is the company prioritizing various strategic initiatives amidst challenges? - Management emphasized that the reinvention strategy and acquisitions are progressing well, with a focus on integration and leveraging existing relationships to drive growth [44][47] Question: How does the company protect against potential challenges in IT services? - Management outlined strategies to extend asset life and shift towards software as a service to mitigate risks associated with rising costs [51][55] Question: What are the expectations for finance receivable sales in 2026? - Management expects to reduce finance receivables to about $1 billion by year-end 2026, with a larger portion anticipated in the second half of the year [61]

Xerox (NasdaqGS:XRX) Q4 2025 Earnings call January 29, 2026 08:00 AM ET Company ParticipantsAnanda Baruah - Managing DirectorChuck Butler - CFOErik Woodring - Managing DirectorGreg Stein - SVP and Head of Investor RelationsMichael Cadiz - Assistant VPSteven Bandrowczak - CEOConference Call ParticipantsNone - AnalystOperatorWelcome to the Xerox Holdings Corporation's fourth quarter 2025 earnings conference release. After the presentation, there will be a question-and-answer session. To ask a question at that ...

Financial Data and Key Metrics Changes - Revenue for Q4 2025 was $2.03 billion, an increase of approximately 26% in actual currency and 24% in constant currency, primarily due to the acquisitions of Lexmark and ITsavvy. Pro forma for these acquisitions, revenue declined 9% [3][4] - For the full year, revenue reached $7.02 billion, up roughly 13% in actual currency and 12% in constant currency, but excluding acquisition benefits, revenue declined approximately 8% [4] - Adjusted operating income margin for Q4 was 5%, down 140 basis points year-over-year, while free cash flow was $184 million, a decrease of $150 million compared to the prior year [3][4] - Adjusted loss per share for Q4 was $0.10, a decrease of $0.46 year-over-year, and for the full year, adjusted loss per share was $0.60, down $1.57 year-over-year [4][21] Business Line Data and Key Metrics Changes - In the Print and Other segment, Q4 equipment revenue was $485 million, up 23% as reported, but down approximately 10% on a pro forma basis [21][22] - Print post-sale revenue was $1.39 billion, up 25% as reported, but down 9% on a pro forma basis [22] - IT Solutions revenue increased 39% year-over-year, reflecting the full quarter inclusion of ITsavvy, with pro forma gross billings up 13% [23][24] Market Data and Key Metrics Changes - The company noted that macroeconomic challenges, including tariffs and increased product costs, continued to impact performance, particularly in the print equipment sales [3][5] - The company experienced a spike in DRAM prices affecting costs across various segments, particularly in IT solutions [5][6] Company Strategy and Development Direction - The company is focused on three strategic priorities: executing reinvention, realizing acquisition benefits, and maintaining balance sheet strength [7][14] - The integration of Lexmark and ITsavvy is expected to unlock operational efficiencies and enhance the product offering, particularly in the IT solutions space [10][11] - The company plans to leverage AI capabilities to drive efficiencies and improve customer experience [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about improving business trends despite ongoing macroeconomic headwinds [3][4] - The company anticipates a stronger pipeline entering 2026, with improved cancellation and renewal rates [4][5] - Management expects to achieve adjusted operating income in the range of $450 million to $500 million for 2026, driven by integration synergies and reinvention savings [28][29] Other Important Information - The company announced a special pro rata distribution of warrants to shareholders, which is seen as a balance sheet-friendly way to reward loyalty and provide bondholders with options [30] - The company ended Q4 with $565 million in cash and cash equivalents, and total debt of $4.2 billion, down $160 million sequentially [26] Q&A Session Summary Question: Are orders back to normal post-government shutdown? - Management indicated that there are broader opportunities due to the expanded portfolio and the strategy is working well [31] Question: Clarification on the impact of memory prices on ITsavvy and print business? - Management noted that memory prices are creating uncertainty across all industries, and they are working to help clients navigate these challenges [32][33] Question: How does the company prioritize various initiatives amidst challenges? - Management emphasized that the reinvention strategy and acquisitions are progressing well, and they are seeing positive results from integration efforts [36][37] Question: How does the company protect against potential challenges in IT services? - Management highlighted their ability to help clients navigate increased costs and emphasized the importance of their product portfolio in addressing these challenges [39][42] Question: What are the assumptions regarding operating cash flow to free cash flow for 2026? - Management explained that higher EBITDA driven by operating income increases and lower finance receivables are key factors in the cash flow forecast [44][45]

Core Insights - Xerox Holdings Corporation reported a quarterly loss of $0.1 per share, missing the Zacks Consensus Estimate of $0.15, and a significant decline from earnings of $0.36 per share a year ago, resulting in an earnings surprise of -168.97% [1] - The company generated revenues of $2.03 billion for the quarter ended December 2025, which was 2.6% below the Zacks Consensus Estimate and an increase from $1.61 billion year-over-year, but has not surpassed consensus revenue estimates in the last four quarters [2] - Xerox shares have underperformed the market, losing approximately 1.7% since the beginning of the year compared to the S&P 500's gain of 1.9% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.01 on revenues of $1.9 billion, and for the current fiscal year, it is $1.01 on revenues of $7.93 billion [7] - The estimate revisions trend for Xerox was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Office Supplies industry, to which Xerox belongs, is currently in the top 40% of over 250 Zacks industries, suggesting that companies in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8]

Earnings Presentation Q4 2025 Results January 29, 2026 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", "estimate", "expect", "intend", "will", "would", "could", "can", "should", "targeting", "projecting", "driving", "future", "plan", "predict", "may" and si ...

EXHIBIT 99.1 News from Xerox Holdings Corporation Xerox Releases Fourth-Quarter and Full-Year Results Integration momentum drives Q4 results in line with guidance; adjusted operating income expected to grow more than $200 million in 2026 1 Financial Summary Q4 2025 FY 2025 * 2025 free cash flow guidance did not anticipate the accounting treatment of pre-existing intercompany balances between Xerox and Lexmark. U.S. GAAP requires it to be recorded within operating cash flow instead of being treated as part o ...