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 ...

Revenue Performance - Q4 2025 revenue reached $2.03 billion, an increase of 25.7% year-over-year, or 23.6% in constant currency[7] - Full-year 2025 revenue totaled $7.02 billion, up 12.9% year-over-year, or 12.2% in constant currency[10] - Total revenues for Q4 2025 were $2,028 million, a 25.7% increase from $1,613 million in Q4 2024[20] - Total revenue for Q4 2025 was $2.03 billion, a 25.7% increase compared to $1.61 billion in Q4 2024[35] - Total revenues for the Print and Other segment in Q4 2025 were $1,873 million, representing a 24.9% increase from $1,500 million in Q4 2024[51] - IT Solutions segment revenue grew by 112.6% year-over-year to $761 million in FY 2025[12] - IT Solutions revenue for Q4 2025 was $158 million, a 38.6% increase from $114 million in Q4 2024[107] - The company expects revenue above $7.5 billion in 2026, with adjusted operating income projected between $450 million and $500 million[28] Profitability and Losses - GAAP net loss for Q4 2025 was $(73) million, or $(0.60) per share, compared to a loss of $(21) million, or $(0.20) per share in Q4 2024[7] - Net loss for Q4 2025 was $73 million, compared to a net loss of $21 million in Q4 2024, reflecting a significant increase in losses[23] - For the full year 2025, the company experienced a net loss of $1.029 billion, or $8.25 per diluted share, compared to a net loss of $1.321 billion, or $10.75 per diluted share in 2024[78] - Adjusted net income for Q4 2025 was a loss of $8 million, or $0.10 per diluted share, while adjusted net income for Q4 2024 was $49 million, or $0.36 per diluted share[78] - Reported Pre-Tax Loss for FY 2025 was $(488) million, with an effective tax rate of (110.9)%[82] - Adjusted operating income decreased to $102 million, down $2 million from Q4 2024, primarily due to higher product costs and lower financing revenue[28] Cash Flow and Debt Management - Free cash flow for Q4 2025 was $184 million, down $150 million year-over-year[7] - Cash flows from operating activities for the year ended December 31, 2025, were $224 million, down from $511 million in 2024[25] - The company paid down $366 million of net debt since the Lexmark acquisition on July 1, 2025[8] - Free Cash Flow for FY 2026 is expected to be around $250 million, with operating cash flow estimated at ~$360 million and capital expenditures at $(110) million[91] Acquisitions and Integration - Lexmark integration is ahead of plan, with a target of at least $300 million in synergies[8] - The Lexmark acquisition was completed for approximately $768 million, including $93 million in cash and cash equivalents acquired[29] - The Print and Other segment includes the recent Lexmark acquisition, enhancing its document management and financing solutions[49] - The IT Solutions segment includes the acquisition of ITsavvy, focusing on global infrastructure technology solutions and managed IT services[124] - The company plans to include Lexmark and ITsavvy's results in its financials as if they were acquired on January 1, 2024, impacting future revenue figures[97] Operational Efficiency and Investments - Research, development, and engineering expenses rose to $71 million in Q4 2025, up from $47 million in Q4 2024, indicating increased investment in innovation[20] - The company reported a decrease in inventories to $1,016 million in 2025 from $695 million in 2024, indicating improved inventory management[24] - Long-term debt increased to $4,016 million in 2025 from $2,814 million in 2024, reflecting higher leverage[24] - Actions taken through the Reinvention initiative have provided Xerox with a flexible operating structure to adapt to market uncertainties[27] Future Outlook and Guidance - 2026 revenue guidance is projected to exceed $7.5 billion[16] - Adjusted operating income for 2025 is expected to grow more than $200 million by 2026[1] - The company anticipates a modest impact on its Print business in the first half of 2026 due to macroeconomic challenges, with more significant impacts expected in the second half[26] - Xerox entered 2026 with a higher pipeline than the previous year, with improved cancellation and renewal rates in 2025, suggesting positive underlying trends[27] Segment Performance - Equipment sales reached $485 million in Q4 2025, a 23.4% increase in actual currency, driven by a 35.2-percentage point benefit from the Lexmark acquisition[28] - Post-sale revenue was approximately $1.54 billion, up 26.5% in actual currency, including a 30.9-percentage point benefit from Lexmark[28] - The overall segment profit for Print and Other was $109 million in Q4 2025, with a segment margin of 5.8%, compared to $128 million and 8.5% in Q4 2024[51] - The company reported a total segment profit of $184 million for the year 2025, with a segment margin of 4.7%[58] Adjustments and Non-GAAP Measures - Adjusted operating income and margin measures exclude significant costs such as restructuring, amortization of intangible assets, and transaction-related costs, which are not reflective of ongoing operational performance[73] - The company plans to continue excluding non-service retirement-related costs from adjusted earnings, as these are considered legacy costs not indicative of current operational performance[69] - The company incurred $493 million in non-GAAP adjustments for FY 2025, impacting reported income tax expense[81] - The adjusted effective tax rate and other adjustments are regularly used by management to evaluate business performance and make operating decisions[70]

Core Insights - Xerox Holdings Corporation reported its fourth-quarter and full-year results for 2025, highlighting better-than-expected operating income and free cash flow performance despite macroeconomic challenges [2][26]. Financial Performance - **Fourth-Quarter Results**: Revenue reached $2,028 million, a 25.7% increase from $1,613 million in Q4 2024. Gross profit was $579 million, up from $502 million, but gross margin decreased to 28.6% from 31.1% [4][7]. - **Full-Year Results**: Total revenue for FY 2025 was $7,022 million, a 12.9% increase from $6,221 million in FY 2024. Gross profit was $1,901 million, down from $1,960 million, with a gross margin of 27.1%, down from 31.5% [4][8]. Segment Performance - **Fourth-Quarter Segment Results**: - Print and Other segment revenue was $1,873 million, a 24.9% increase year-over-year. IT Solutions segment revenue was $158 million, up 38.6% [7]. - **Full-Year Segment Results**: - Print and Other revenue increased by 7.0% to $6,272 million, while IT Solutions revenue surged 112.6% to $761 million [8]. Strategic Initiatives - The integration of Lexmark is ahead of schedule, with the company reaffirming a synergy target of at least $300 million. The IT Solutions segment saw double-digit growth in bookings, billings, and revenue [5][34]. - The company has onboarded 12 new U.S. dealers in 2025 as part of its channel expansion strategy [5]. Guidance for 2026 - Xerox expects revenue to exceed $7.5 billion, with adjusted operating income projected between $450 million and $500 million, and free cash flow around $250 million [11][32].

Core Viewpoint - Xerox Holdings Corporation has announced a pro-rata distribution of warrants to its shareholders as part of its capital structure optimization initiatives, aimed at strengthening its balance sheet and creating long-term value for shareholders [1][2]. Distribution Details - The distribution will occur on or about February 11, 2026, with holders of record of common stock receiving one warrant for every two shares held, rounded down to the nearest whole warrant [3]. - Holders of Series A Preferred Stock and Convertible Notes will receive warrants based on the same ratio, as determined by their respective governing documents [3]. Warrant Features - Each warrant will allow the holder to purchase one share of common stock at an exercise price of $8.00, with an expiration date of two years from the distribution date unless an early expiration condition is met [5]. - The warrants will be distributed at no cost to eligible holders, and the company plans to apply for trading approval for the warrants [5]. Exercise Mechanics - Holders can exercise their warrants using cash or designated Xerox debt securities, which will be specified in the warrant agreement [6][7]. - The right to exercise using designated debt securities will terminate if the average stock price meets certain conditions [7]. Additional Information - Further details regarding the warrant distribution, including key dates and exercise procedures, will be available in the warrant agreement and related investor materials on the company's website [8].

NASHVILLE, Tenn.--(BUSINESS WIRE)--RJ Young recently announced a new partnership agreement with Xerox, established through an extension of its existing Lexmark partnership, further strengthening RJ Young's copier and multifunction printer (MFP) portfolio and supporting its long-term service strategy. Xerox is one of the most recognized brands in the document technology industry, often synonymous with copiers themselves. By aligning the global brand strength of Xerox with RJ Young's established. ...

Core Viewpoint - Xerox and Lexmark have launched a unified suite of retail solutions at NRF 2026, marking their first joint appearance in the industry, which signifies a new era in retail technology [1] Group 1: Product Offerings - The combined company's offerings are designed to help brands "See It, Show It, Support It, Scale It," showcasing innovations aimed at enhancing retail operations [1] - The suite reflects decades of expertise in the retail sector, presented at the world's largest retail trade show [1] Group 2: Event Details - The NRF 2026: Retail's Big Show is ongoing and will run through January 13 [1]

Core Viewpoint - Xerox Holdings Corporation has launched the XeroxTM TriShield 360 Cyber Solution, a comprehensive cybersecurity service aimed at providing enterprise-grade protection for small- and medium-sized businesses [1][3]. Group 1: Product Features - The Xerox TriShield 360 Cyber Solution combines 24/7 monitoring with advanced detection technology for real-time threat detection and response [2]. - This solution simplifies cybersecurity management by eliminating the need for separate tools and providers, and includes insurance options to enhance security and expedite recovery from cyber incidents [3]. - The solution protects computers, infrastructure, and networks from evolving cyber threats using AI-driven analytics that automatically resolve issues [4]. Group 2: Strategic Partnerships - Xerox collaborates with Lumifi and its Security Operations Center to provide financial protection as part of the new cybersecurity solution [2].

Core Insights - Investors are increasingly turning to dividend-yielding stocks during market turbulence and uncertainty, as these companies typically have high free cash flows and offer substantial dividend payouts [1] Company Ratings and Analyst Insights - **Microchip Technology Inc (NASDAQ:MCHP)**: - Dividend Yield: 3.21% - Citigroup analyst Christopher Danely maintained a Buy rating but reduced the price target from $90 to $80 as of Nov. 7, 2025, with an accuracy rate of 80% [7] - Truist Securities analyst William Stein maintained a Hold rating and cut the price target from $64 to $60 on Nov. 7, 2025, with an accuracy rate of 86% [7] - Recent news indicates that Microchip Technology raised its FY26 guidance [7] - **Texas Instruments Inc (NASDAQ:TXN)**: - Dividend Yield: 3.24% - JP Morgan analyst Harlan Sur maintained an Overweight rating but reduced the price target from $225 to $210 on Oct. 22, 2025, with an accuracy rate of 80% [7] - Cantor Fitzgerald analyst Matthew Prisco maintained a Neutral rating and cut the price target from $200 to $170 on Oct. 22, 2025, with an accuracy rate of 85% [7] - Recent news shows Texas Instruments issued fourth-quarter EPS and sales guidance below analyst estimates [7] - **Xerox Holdings Corp (NASDAQ:XRX)**: - Dividend Yield: 3.73% - Citigroup analyst Asiya Merchant maintained a Neutral rating and reduced the price target from $4.5 to $3.5 on Nov. 10, 2025, with an accuracy rate of 88% [7] - Morgan Stanley analyst Erik Woodring maintained an Underweight rating and cut the price target from $10 to $8 on Oct. 30, 2025, with an accuracy rate of 77% [7] - Recent news highlights that Xerox named Chuck Butler as Chief Financial Officer [7]

Core Insights - Xerox is undergoing a significant reorganization following a mixed earnings report, with a notable revenue increase but a decline on a pro forma basis [3][4] - The company reported a revenue gain of $1.96 billion for Q3, marking a 28.3% increase year-over-year, but a 7.8% decline when excluding recent acquisitions [3] - Job cuts have been initiated as part of the integration process following the $1.5 billion acquisition of Lexmark, indicating a strategic move to optimize resources [4][5] Financial Performance - Xerox's Q3 revenue reached $1.96 billion, reflecting a 28.3% increase compared to the same quarter last year [3] - On a pro forma basis, revenue declined by 7.8%, highlighting challenges in the current macroeconomic environment [3] Organizational Changes - Chuck Butler will take over the finance department effective December 3, succeeding Mirlanda Gecaj, who is leaving for new opportunities [6][7] - Gecaj's departure is described as a mutual decision, and she played a significant role during a transformative period for the company [7] Strategic Moves - The company is focused on cost savings and resource optimization as part of its integration strategy post-Lexmark acquisition [4][5] - Employee notifications regarding workforce reductions have begun, emphasizing the challenges of merging operations [5]

Core Viewpoint - Xerox Holdings Corporation has announced the appointment of Chuck Butler as Chief Financial Officer, effective December 3, 2025, following the departure of Mirlanda Gecaj, who will leave the company to pursue new opportunities [1]. Group 1 - Chuck Butler will assume the role of Chief Financial Officer on December 3, 2025 [1]. - Mirlanda Gecaj will depart from Xerox on December 2, 2025, after a mutual decision [1]. - Steve Bandrowczak acknowledged Mirlanda Gecaj's significant contributions during a transformative period for the company [1].