Core Insights - Xerox Holdings Corporation reported $1.53 billion in revenue for Q3 2024, a year-over-year decline of 7.5% [1] - The company's EPS for the same period was $0.25, down from $0.46 a year ago, reflecting a significant EPS surprise of -52.83% compared to the consensus estimate of $0.53 [1] Revenue Breakdown - Financing revenues were $38 million, slightly below the estimated $39.40 million [3] - Services, maintenance, and rentals generated $902 million, compared to the estimated $958.48 million, marking a -6.2% year-over-year change [3] - Sales revenues were reported at $588 million, slightly above the estimated $587.75 million, with an -8.7% year-over-year decline [3] - Supplies, paper, and other sales reached $249 million, exceeding the average estimate of $234.74 million, representing a -3.5% year-over-year change [3] - Equipment sales totaled $339 million, below the estimated $353.01 million, reflecting a -12.2% year-over-year decline [3] - Other equipment sales were reported at $5 million, significantly above the estimate of $2.95 million, showing a +66.7% year-over-year increase [3] - High-end equipment sales were $57 million, below the estimated $61.56 million, with a -14.9% year-over-year change [3] - Entry-level equipment sales were $53 million, slightly above the estimated $49.56 million, representing a -5.4% year-over-year change [3] - Post-sale revenue was $1.19 billion, below the estimated $1.24 billion, marking a -6.1% year-over-year decline [3] - Mid-range equipment sales were reported at $224 million, below the estimated $244.13 million, reflecting a -13.9% year-over-year change [3] Stock Performance - Xerox shares have returned -1% over the past month, underperforming the Zacks S&P 500 composite, which increased by +1.7% [4] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance in the near term [4]

Financial Data and Key Metrics - Revenue for Q3 2024 was $1.5 billion, a decline of 7.5% in actual currency and 7.3% in constant currency [8] - Adjusted EPS was $0.25, $0.21 lower year-over-year due to the one-time sale of non-core business assets in the prior year [9] - Free cash flow was $107 million, $5 million lower year-over-year [9] - Adjusted operating margin improved by 110 basis points year-over-year to 5.2% [9] - GAAP loss per share of $9.71 included a non-cash goodwill impairment charge of approximately $1 billion [39] Business Line Performance - Print equipment sales declined by 12% due to delays in global product launches and lower-than-expected sales force productivity [11][41] - Digital and managed IT services revenue grew double digits, with new business signings up double digits [17] - Services revenue retention rate for large client renewals remained above 100% [16] - Entry-level equipment revenue declined despite higher installations due to an unfavorable mix of low-end black-and-white multifunction printers [42] Market Performance - Revenue in the Americas showed improvement in client perception, with a net promoter score increase of 11 points [15] - Geographic simplification efforts included transitioning Hungary and Bulgaria to an indirect distribution model and selling the EMEA paper business [26] - The pending acquisition of ITsavvy is expected to improve revenue mix and market coverage, particularly in IT services [32] Strategic Direction and Industry Competition - The company is focused on reinvention, aiming to streamline operations and benefit from long-term trends in print, digital, and IT services [10] - Strategic priorities include aligning the organization with economic buyers, improving sales productivity, and expanding digital and IT services [13][17] - The acquisition of ITsavvy is expected to enhance the company's IT services portfolio and drive growth in existing client penetration [32][33] Management Commentary on Operating Environment and Future Outlook - Management acknowledged challenges in equipment sales but expressed confidence in resolving product launch delays and improving sales productivity [11][14] - The company expects a return to revenue growth in 2025, supported by new product launches, improved sales productivity, and the ITsavvy acquisition [53] - Adjusted operating income is expected to grow, with a return to double-digit margins over the course of the reinvention [54] Other Important Information - The company reduced operating expenses by more than $50 million year-over-year in Q3 and $125 million year-to-date [18] - A pipeline of over $400 million in gross cost savings is expected to be realized by 2026 [20][50] - The company signed agreements to sell future finance receivable originations in Canada, improving balance sheet health [21] Q&A Session Summary Question: Product Delays and Sales Productivity - The product delay was attributed to poor forecasting and timing issues between demand and supply signaling [59][60] - Sales productivity was impacted by organizational changes and a reduction in sales headcount, but improvements are expected in Q4 and 2025 [58][62] Question: Confidence in 2025 Growth and Margin Expansion - Management expressed confidence in achieving revenue growth and margin expansion in 2025 due to strategic initiatives, cost reductions, and the ITsavvy acquisition [70][72] Question: ITsavvy Acquisition Accretion - The ITsavvy acquisition is expected to be immediately accretive to EPS and free cash flow, with $15 million in cost synergies and improved EBITDA margins [75][76] Question: ITsavvy Revenue Classification - ITsavvy revenue will be distributed similarly to current revenue streams, with a focus on IT and digital services, which are expected to grow to 15% of total revenue [79][80]

Xerox Holdings Corporation (XRX) came out with quarterly earnings of $0.25 per share, missing the Zacks Consensus Estimate of $0.53 per share. This compares to earnings of $0.46 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -52.83%. A quarter ago, it was expected that this company would post earnings of $0.46 per share when it actually produced earnings of $0.29, delivering a surprise of -36.96%.Over the last four quarters, ...

Earnings Presentation Q3 2024 Results October 29, 2024 xerox 2 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. The words "anticipate", "believe", "estimate", "expect", "intend", "will", "should", "targeting", "projecting", "driving" and similar expressions, as they relate to us, our performance and/or our technology, are intended to i ...

EXHIBIT 99.1 News from Xerox Holdings Corporation https://files reportify c Xerox Releases Third-Quarter Results Reinvention drives increased profitability despite a challenging quarter for equipment sales; pending acquisition of ITsavvy to improve revenue mix from higher growth businesses Financial Summary Q3 2024 • Revenue of $1.53 billion, down 7.5 percent, or 7.3 percent in constant currency. • GAAP net (loss) of $(1.2) billion, or $(9.71) per share, a decrease of $1.3 billion or $9.99 per share, year-o ...

Influx Productions Summary Following my coverage on Xerox Holdings (NASDAQ:XRX) in Apr'24, which I recommended a sell rating due to my expectation that the business would not be able to achieve its FY24 guidance, this post is to provide an update on my thoughts on the business and stock. Since my last post, XRX's stock price has fallen much more than I had originally expected (previous PT was $11), but I am still sell-rated as I expect XRX to miss its FY24 guidance, which will lead to consensus revising the ...

Xerox Holdings Corporation’s (XRX) stock has declined 8.7% since the company’s second-quarter 2024 results. This downward trajectory can be attributed to dismal quarterly performance and weak guidance.Second quarter adjusted EPS of 29 cents missed the Zacks Consensus Estimate by 37% and declined 34% year over year. Total revenues of $1.58 billion missed the consensus mark by 3.1% and decreased 10% year over year on a reported basis. Revenues declined 9.6% on a constant-currency (CC) basis.Xerox lowered its ...

Part I — Financial Information [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements for both Xerox Holdings Corporation and Xerox Corporation for the three and six months ended June 30, 2024, including statements of income, comprehensive income, balance sheets, and cash flows, along with detailed notes [Xerox Holdings Corporation Financial Statements](index=4&type=section&id=Xerox%20Holdings%20Corporation%20Financial%20Statements) Xerox Holdings Corporation reported a net income of **$18 million** for Q2 2024, a significant improvement from a net loss of **$61 million** in Q2 2023, with total assets decreasing to **$9.49 billion** from **$10.01 billion** at year-end 2023 Xerox Holdings Corporation - Condensed Consolidated Statements of Income (Loss) | Indicator (in millions) | Q2 2024 | Q2 2023 | Six Months 2024 | Six Months 2023 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$1,578** | **$1,754** | **$3,080** | **$3,469** | | Income (Loss) before Income Taxes | $25 | $(89) | $(125) | $(4) | | **Net Income (Loss)** | **$18** | **$(61)** | **$(95)** | **$10** | | Diluted Earnings (Loss) per Share | $0.11 | $(0.41) | $(0.83) | $0.02 | Xerox Holdings Corporation - Condensed Consolidated Balance Sheet Highlights | Indicator (in millions) | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $485 | $519 | | **Total Assets** | **$9,491** | **$10,008** | | Long-term debt | $3,174 | $2,710 | | **Total Liabilities** | **$6,902** | **$7,236** | | **Total Equity** | **$2,365** | **$2,548** | Xerox Holdings Corporation - Condensed Consolidated Statements of Cash Flows | Indicator (in millions) | Six Months 2024 | Six Months 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$44** | **$173** | | Net cash used in investing activities | $(19) | $(22) | | Net cash used in financing activities | $(75) | $(725) | | Decrease in cash, cash equivalents and restricted cash | $(66) | $(570) | [Xerox Corporation Financial Statements](index=8&type=section&id=Xerox%20Corporation%20Financial%20Statements) Xerox Corporation reported a net income of **$19 million** for Q2 2024, compared to a net loss of **$61 million** in Q2 2023, with total assets at **$9.46 billion** and operating cash flow at **$44 million** for the six-month period Xerox Corporation - Condensed Consolidated Statements of Income (Loss) | Indicator (in millions) | Q2 2024 | Q2 2023 | Six Months 2024 | Six Months 2023 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$1,578** | **$1,754** | **$3,080** | **$3,469** | | Income (Loss) before Income Taxes | $26 | $(89) | $(124) | $(4) | | **Net Income (Loss)** | **$19** | **$(61)** | **$(94)** | **$10** | Xerox Corporation - Condensed Consolidated Balance Sheet Highlights | Indicator (in millions) | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$9,455** | **$9,982** | | Long-term debt | $1,154 | $1,213 | | Related party debt | $2,020 | $1,497 | | **Total Liabilities** | **$6,859** | **$7,194** | | **Total Equity** | **$2,586** | **$2,778** | Xerox Corporation - Condensed Consolidated Statements of Cash Flows | Indicator (in millions) | Six Months 2024 | Six Months 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$44** | **$173** | | Net cash used in investing activities | $(10) | $(19) | | Net cash used in financing activities | $(86) | $(728) | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on accounting policies, revenue recognition, segment performance, divestitures, financial instruments, debt, restructuring activities, and contingencies, including the sale of operations in Argentina and Chile, significant debt refinancing, and ongoing costs related to the company's 'Reinvention' strategy Revenue by Geography (Six Months Ended June 30) | Geography (in millions) | 2024 | 2023 | | :--- | :--- | :--- | | United States | $1,683 | $1,929 | | Europe | $912 | $971 | | Canada | $247 | $280 | | Other | $238 | $289 | | **Total Revenues** | **$3,080** | **$3,469** | - In March 2024, Xerox sold its direct business operations in Argentina and Chile, resulting in a net disposal loss of **$51 million**, which included a **$40 million** currency translation loss and a **$10 million** goodwill allocation[46](index=46&type=chunk) - In Q1 2024, Xerox Holdings issued **$500 million** of 8.875% Senior Notes due 2029 and **$400 million** of 3.75% Convertible Senior Notes due 2030, with proceeds used to repay existing debt and fund capped call transactions to reduce potential dilution[89](index=89&type=chunk)[91](index=91&type=chunk)[93](index=93&type=chunk) - Restructuring and related costs for the first six months of 2024 were **$51 million**, up from **$25 million** in the prior year, driven by strategic actions under 'Project Reinvention' including geographic simplification and exiting certain manufacturing operations[72](index=72&type=chunk)[76](index=76&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting progress on its 'Reinvention' strategy, with Q2 2024 revenue declining **10.0%** to **$1.58 billion** but pre-tax income improving significantly, leading to updated full-year 2024 guidance with lower revenue expectations and adjusted operating income margin - The company's multi-year 'Reinvention' strategy is progressing, with the new operating model showing early benefits in Q2 2024 through sequential improvements in adjusted operating income margin, cash flow, and revenue trajectory[141](index=141&type=chunk) Q2 2024 vs Q2 2023 Performance | Metric (in millions) | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $1,578 | $1,754 | (10.0)% | | Pre-tax Income (Loss) | $25 | $(89) | +$114 | | Net Income (Loss) | $18 | $(61) | +$79 | | Adjusted Operating Income | $85 | $107 | $(22) | - Full-year 2024 guidance was revised downwards: - **Revenue:** Decline of **5% to 6%** in constant currency (previously 3% to 5%) - **Adjusted Operating Income Margin:** At least **6.5%** (previously at least 7.5%) - **Operating Cash Flow:** At least **$600 million** (previously at least $650 million)[147](index=147&type=chunk) [Segment Review](index=56&type=section&id=Segment%20Review) The company operates through two segments, Print and Other, and Xerox Financial Services (XFS), with Print and Other revenue decreasing **9.9%** to **$1.51 billion** and XFS revenue declining **11.9%** to **$89 million** in Q2 2024 Segment Performance (Q2 2024 vs Q2 2023) | Segment (in millions) | Revenue Q2 2024 | Revenue Q2 2023 | % Change | Profit Q2 2024 | Profit Q2 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | | Print and Other | $1,508 | $1,674 | (9.9)% | $81 | $107 | | XFS | $89 | $101 | (11.9)% | $4 | $0 | - Print and Other revenue decline was driven by a **15.2%** drop in equipment sales and an **8.2%** drop in post-sale revenue, reflecting backlog fluctuations and strategic exits from non-core IT placements and paper sales[173](index=173&type=chunk)[174](index=174&type=chunk) - XFS financing revenue declined **22.4%** due to a smaller finance receivables balance resulting from ongoing sales to HPS Investment Partners and lower originations[181](index=181&type=chunk) [Capital Resources and Liquidity](index=59&type=section&id=Capital%20Resources%20and%20Liquidity) As of June 30, 2024, Xerox Holdings had **$551 million** in total cash, cash equivalents, and restricted cash, with total debt at **$3.3 billion**, following significant debt refinancing and an increased ABL credit facility, while operating cash flow for the first six months decreased significantly to **$44 million** Liquidity and Debt Summary (as of June 30, 2024) | Metric (in millions) | Amount | | :--- | :--- | | Total Cash, Cash Equivalents & Restricted Cash | $551 | | Total Debt | $3,303 | | ABL Facility Capacity | $425 | | ABL Facility Drawn | $0 | - The **$129 million** year-over-year decrease in operating cash flow was primarily driven by lower pre-tax income, higher inventory purchases, higher accrued compensation and restructuring payments, and higher net tax payments[187](index=187&type=chunk) - In Q2 2024, Xerox entered into long-term technology agreements with Tata Consulting Services (TCS), SAP, Microsoft, and Verizon, with aggregate spending commitments totaling approximately **$610 million** over the next 5-7 years to support its 'Reinvention'[201](index=201&type=chunk)[202](index=202&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section incorporates by reference the 'Financial Risk Management' section from Item 2, detailing the company's exposure to market risks from foreign currency exchange rates and interest rates and its use of derivative financial instruments to manage these risks - The company is exposed to market risk from foreign currency exchange rates (primarily Euro, U.K. Pound Sterling, Japanese Yen) and interest rates, which it manages through operating activities and derivative instruments[203](index=203&type=chunk) [Item 4. Controls and Procedures](index=68&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the principal executive and financial officers of both Xerox Holdings Corporation and Xerox Corporation, evaluated the effectiveness of disclosure controls and procedures, concluding they were effective as of June 30, 2024, with no material changes to internal control over financial reporting identified - Management of both Xerox Holdings and Xerox Corporation concluded that their respective disclosure controls and procedures were effective as of the end of the reporting period[215](index=215&type=chunk)[216](index=216&type=chunk) - No changes in internal control over financial reporting occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[217](index=217&type=chunk)[218](index=218&type=chunk) Part II — Other Information [Item 1. Legal Proceedings](index=69&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 21 of the financial statements for information on legal proceedings, detailing various contingencies, with a significant focus on ongoing tax assessments in Brazil and a shareholder derivative lawsuit which has reached a preliminary settlement - The company has significant unreserved tax contingencies in Brazil totaling **$339 million** as of June 30, 2024, primarily related to indirect and other taxes, which management assesses as remote in likelihood of loss[131](index=131&type=chunk)[132](index=132&type=chunk) [Item 1A. Risk Factors](index=69&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the Risk Factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2023, indicating no material changes to the company's risk profile during the quarter - No new or materially changed risk factors were reported for the quarter; investors are referred to the 2023 Form 10-K[220](index=220&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the quarter ended June 30, 2024, Xerox Holdings Corporation did not repurchase any shares under its publicly announced buyback program, with a small number of shares repurchased indirectly through a net-settlement feature of its restricted stock compensation programs to satisfy tax-withholding requirements Issuer Purchases of Equity Securities (Q2 2024) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1-30 | 7,364 | $17.33 | | May 1-31 | — | — | | June 1-30 | — | — | | **Total** | **7,364** | **n/a** | - The repurchases were not part of the publicly announced share repurchase program but were related to satisfying tax-withholding requirements for employee stock compensation[223](index=223&type=chunk) [Item 5. Other Information](index=69&type=section&id=Item%205.%20Other%20Information) The company reports that none of its directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarterly period - No directors or officers adopted or terminated Rule 10b5-1 trading plans during the second quarter of 2024[221](index=221&type=chunk) [Item 6. Exhibits](index=70&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, debt agreements, officer certifications, and interactive data files (XBRL) - Key exhibits filed include amendments to credit agreements, indentures for new senior and convertible notes, and CEO/CFO certifications[224](index=224&type=chunk)[225](index=225&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q2 2024 was $1.6 billion, a decrease of 10% in both actual and constant currency. Excluding the impact of backlog fluctuations and non-strategic revenue reductions, core business revenue declined only modestly [6][26]. - Adjusted EPS was $0.29, down $0.15 year-over-year, primarily due to higher taxes and interest expenses [6][28]. - Free cash flow increased to $115 million, up $27 million compared to Q2 of the previous year [6][33]. - Adjusted operating margin was 5.4%, a decrease of 70 basis points year-over-year, attributed to lower revenue, although offset by operating cost reductions [6][27]. Business Line Data and Key Metrics Changes - Equipment sales were $356 million, down approximately 15% year-over-year, but showed improvement compared to a 26% decline in Q1 [29]. - Post-sales revenue was $1.2 billion, declining about 8% in actual and constant currency [30]. - Revenue renewal rates for large accounts remained above 100% in Q2, with new business signings higher year-to-date [10]. Market Data and Key Metrics Changes - The company is experiencing momentum in equipment orders and pipeline, with expectations for stronger revenue growth in the second half of the year [7][10]. - The transition to an indirect distribution model in certain markets is aimed at enhancing service capabilities and focusing resources on key markets [19]. Company Strategy and Development Direction - The company is implementing a multi-year reinvention strategy to simplify operations and reposition towards high-growth market opportunities in print, digital, and IT services [5][9]. - The goal is to achieve a $300 million improvement in adjusted operating income above 2023 levels by the end of 2026, with confidence in this target growing due to progress in cost reduction initiatives [8][39]. - The focus is on expanding digital and IT service penetration, leveraging existing print client relationships to drive growth in these areas [12][14]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged a short period of disruption during the implementation of the redesigned operating model but noted improvements in operating processes and financial results since then [5][6]. - Despite lowering full-year guidance, management remains confident in the long-term outlook and the ability to deliver on the three-year adjusted operating income improvement target [7][42]. Other Important Information - The company is in advanced talks to expand its forward flow agreement outside the U.S., which is expected to enhance free cash flow [16]. - The payment of a $1 per share dividend remains a key priority, with expectations for the yield to return to normalized levels as the reinvention strategy is executed [17]. Q&A Session Summary Question: Impact of reinvention initiatives on guidance - Management clarified that the guidance reduction is related to the timing of reinvention initiatives and not a change in overall strategy [45][46]. Question: Revenue guidance and timing - Management explained that the revenue decline in Q2 was influenced by backlog and non-strategic revenue, but they expect growth in the second half due to improved order velocity [52][53]. Question: Growth in digital and IT services - Management indicated that they see significant growth opportunities in digital and IT services, particularly in the mid-market, and are working on breaking out these segments in future disclosures [60][64].

Xerox Holdings Corporation (XRX) came out with quarterly earnings of $0.29 per share, missing the Zacks Consensus Estimate of $0.46 per share. This compares to earnings of $0.44 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -36.96%. A quarter ago, it was expected that this company would post earnings of $0.38 per share when it actually produced earnings of $0.06, delivering a surprise of -84.21%.Over the last four quarters, ...