Core Viewpoint - The article discusses the investment potential of Xerox Holdings Corporation (XRX), highlighting the author's allocation strategy towards "troubled" companies, which constitutes about 5-6% of their portfolio [1]. Group 1: Company Overview - Xerox Holdings Corporation is identified as a company that may present investment opportunities despite being categorized as "troubled" [1]. Group 2: Analyst Background - The author is a senior analyst and private portfolio manager with over 10 years of experience in generating value ideas in European and North American markets [1]. - The author contributes to various investing groups, covering a wide range of markets including Scandinavia, Germany, France, the UK, Italy, Spain, Portugal, and Eastern Europe [1].

Group 1 - The article does not provide any specific content or key points related to a company or industry [1]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $1.96 billion, up approximately 28% in actual currency and 27% in constant currency, reflecting the inorganic benefits from the Lexmark and ITsavvy acquisitions. Pro forma for these acquisitions, revenue declined about 8% [4][25] - Adjusted operating income margin was 3.3%, down 190 basis points year over year. Free cash flow was $131 million, an increase of $24 million over the prior year. Adjusted earnings per share were $0.20, a decrease of $0.05 year over year [4][25][29] - Adjusted gross margin was 28.9%, down 350 basis points, primarily due to higher tariff and product costs [26][27] Business Line Data and Key Metrics Changes - Equipment sales increased 13% to $383 million in actual currency, but pro forma for Lexmark, equipment sales declined about 16% [30] - IT Solutions revenue grew double digits on a pro forma basis, driven by public sector deployments and increased cross-selling momentum [25][36] - Print segment revenue was $1.36 billion, up 23% in actual currency, but pro forma for Lexmark, post-sale revenue declined 8% [33][34] Market Data and Key Metrics Changes - Legacy Xerox equipment sales declined 14% year over year in constant currency, reflecting macroeconomic uncertainty and delays in government-related orders [31] - Lexmark's equipment sales declined 30% in actual currency, attributed to backlog difficulties and delays among channel partners [32][33] - IT Solutions showed resilience with a 12% growth in actual currency, indicating a strong demand for IT products and services [36] Company Strategy and Development Direction - The company is focused on three strategic priorities: execute reinvention, realize acquisition benefits, and maintain balance sheet strength [5][12] - The integration of Lexmark is expected to yield at least $300 million in synergies, with ongoing efforts to enhance operational efficiencies and cash conversion cycles [10][23] - New product launches in print and IT solutions are planned over the next 18 months, including enhancements to the production print portfolio [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment with Q3 results due to macroeconomic challenges affecting top-line performance, particularly in transactional print equipment revenues [4][5] - There is an expectation that delays in equipment purchases will materialize in future periods as government funding decisions become clearer [5][42] - The company anticipates a recovery in demand once funding and tariff policies stabilize, with IT solutions expected to continue outpacing market growth [41][42] Other Important Information - The Lexmark acquisition has resulted in an increase in total debt, but the company aims to reduce gross debt leverage to three times EBITDA in the medium term [12][40] - The company launched an AI Center of Excellence to enhance operational efficiencies and productivity solutions [10] Q&A Session Summary Question: Impact of government and commercial sectors on equipment sales - Management noted that government shutdowns and macroeconomic factors have led to delays in purchasing decisions, particularly affecting the equipment sales [46][56] Question: Clarification on synergy savings and their impact on the bottom line - Management indicated that the increased synergy targets from the Lexmark acquisition are expected to benefit gross profit and operating margin, with about half of the $50 million expected to flow in 2026 [57][59] Question: Tariff impacts and future price increases - The company expects about $35 million in tariff impacts for 2025 and continues to implement price increases to offset these costs, although they are being measured due to current demand softness [62][64] Question: Competitive dynamics and market share stability - Management confirmed that they are holding market share and do not see any unique competitive disadvantages, attributing the slowdown to broader industry-wide conditions [73]

Core Insights - Xerox Holdings Corporation reported quarterly earnings of $0.20 per share, exceeding the Zacks Consensus Estimate of $0.04 per share, but down from $0.25 per share a year ago, indicating an earnings surprise of +400.00% [1] - The company posted revenues of $1.96 billion for the quarter ended September 2025, missing the Zacks Consensus Estimate by 4.5%, compared to $1.53 billion in the same quarter last year [2] - Xerox shares have declined approximately 59.3% year-to-date, contrasting with the S&P 500's gain of 17.2% [3] Earnings Outlook - The future performance of Xerox's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is $0.45 on revenues of $2.16 billion, while the estimate for the current fiscal year is -$0.20 on revenues of $7.25 billion [7] Industry Context - The Office Supplies industry, to which Xerox belongs, is currently ranked in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

Earnings Presentation Q3 2025 Results October 30, 2025 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 ...

Financial Performance - Q3 2025 revenue reached $1.96 billion, an increase of 28.3% year-over-year, or 27.0% in constant currency[3] - GAAP net loss narrowed to $(760) million, or $(6.01) per share, improving by $445 million or $3.70 per share year-over-year[3] - Adjusted net income was $27 million, or $0.20 per share, down $7 million or $0.05 per share year-over-year[3] - Operating cash flow increased to $159 million, up $43 million year-over-year, while free cash flow rose to $131 million, up $24 million year-over-year[3] - Total revenues for Q3 2025 were $1,961 million, a 28.4% increase from $1,528 million in Q3 2024[18] - Net loss for Q3 2025 was $760 million, compared to a net loss of $1,205 million in Q3 2024, representing a 36.9% improvement[21] - The company reported a comprehensive loss of $769 million for Q3 2025, compared to a comprehensive loss of $1,032 million in Q3 2024, indicating a 25.5% reduction[21] - Reported net loss for Q3 2025 was $760 million, resulting in a diluted EPS of $(6.01), compared to a net loss of $1,205 million and diluted EPS of $(9.71) in Q3 2024[75] - Adjusted net income for Q3 2025 was $27 million, with an adjusted EPS of $0.20, while adjusted net income for Q3 2024 was $34 million with an adjusted EPS of $0.25[75] Revenue Segments - IT Solutions segment revenue grew by 162.8% year-over-year, reaching $226 million[6] - Total revenues for the Print and Other segment reached $1,739 million in Q3 2025, a 20.6% increase from $1,442 million in Q3 2024[46] - Equipment sales for Q3 2025 were $383 million, a 13.0% increase in actual currency and 12.1% in constant currency compared to Q3 2024, benefiting from the Lexmark acquisition by 26.0 percentage points[25] - Post-sale revenue reached approximately $1.6 billion, up 32.7% in actual currency and 31.3% in constant currency year-over-year, with Lexmark and ITsavvy contributing 30.2 and 10.3 percentage points respectively[25] - The IT Products category within IT Solutions saw a 200.0% increase in revenue to $165 million in Q3 2025[52] - Post-sale revenue for Q3 2025 was $1,578 million, a 32.7% increase compared to $1,189 million in Q3 2024[94] Cost and Expenses - Research, development, and engineering expenses increased to $74 million in Q3 2025 from $45 million in Q3 2024, a 64.4% rise[18] - Total liabilities increased to $9,474 million as of September 30, 2025, compared to $7,061 million at the end of 2024, a 34.3% increase[22] - The company incurred $467 million in tax expense related to the establishment of a valuation allowance against certain deferred tax assets in Q3 2025[78] - Restructuring and related costs for Q3 2025 amounted to $59 million, compared to $56 million in Q3 2024[75] - The company incurred approximately $230 million in non-financing interest expense related to the Lexmark acquisition financing[88] Guidance and Projections - 2025 guidance revised to 13% revenue growth in constant currency, down from 16-17%[11] - Adjusted operating margin guidance lowered to around 3.5%, down from around 4.5%[11] - Free cash flow guidance reduced to around $150 million, down from around $250 million[11] - Xerox expects 2025 revenue growth of 13% in constant currency, with an adjusted operating income margin of approximately 3.5% and free cash flow of around $150 million[25] - The overall segment profit for 2025 is projected to be $184 million, with a total revenue of $3,978 million[54] Acquisitions and Integration - Lexmark integration is ahead of plan, with cost synergies now forecasted to be at least $300 million, an increase of $50 million from previous estimates[4] - The Lexmark acquisition was completed on July 1, 2025, for approximately $1.5 billion, including cash of $811 million and the assumption of $323 million in debt[26] - Xerox anticipates over $1 per share of accretion from the Lexmark transaction, with no material impact from proposed U.S. tariffs due to Lexmark's manufacturing capabilities in Mexico[27] - The acquisition of ITsavvy has led to a reassessment of reportable segments, now categorized as Print and Other, and IT Solutions[111] Market Conditions and Strategy - The company experienced delays in purchasing decisions among clients due to macroeconomic challenges, particularly affecting transactional Print equipment revenues[24] - Actions taken through the Reinvention strategy have provided Xerox with a flexible operating structure to adapt to market uncertainties[24] - The company is focused on expanding its market presence through strategic acquisitions and enhancing its product offerings[51] - Forward-looking statements indicate potential risks including global macroeconomic conditions and integration challenges with recent acquisitions[57] Other Financial Metrics - Adjusted operating income for Q3 2025 was $65 million, down $15 million from Q3 2024, primarily due to lower gross profit and unfavorable revenue mix[25] - Adjusted operating income for FY 2025 is projected to be around $245 million, with an adjusted margin of approximately 3.5%[86] - Total gross profit for Q3 2025 was $445 million, down from $495 million in Q3 2024, leading to a total gross margin of 22.7%[94] - Adjusted gross profit for Q3 2025 was $566 million, with a margin of 28.9%, down from $495 million and 32.4% in Q3 2024[83] - The company declared dividends of $0.025 per common share for Q3 2025, down from $0.25 in Q3 2024[109]

Core Insights - Xerox Holdings Corporation reported its third-quarter results for 2025, highlighting the impact of macro volatility and uncertainties regarding government funding on transactional print [1] - The company noted consistent page volume trends and strong momentum in IT Solutions, reinforcing confidence in its Reinvention strategy to deliver long-term value [1] - The foundation for this strategy is built on the solid groundwork established by Lexma [1] Financial Performance - The third-quarter results reflect challenges due to external economic factors, particularly in the transactional print segment [1] - Despite these challenges, the company is optimistic about its operational performance driven by IT Solutions [1] Strategic Outlook - The Reinvention strategy is expected to enhance productivity and create sustainable value for the company in the long run [1] - The company is committed to accelerating its strategic initiatives based on the established foundation from Lexma [1]

Xerox Holdings Corporation (NASDAQ:XRX) is one of the best NASDAQ stocks under $5 to buy now. On October 22, Xerox announced the launch of its new Xerox Proficio Production Series. This introduction included the debut of two new digital presses, the Xerox Proficio PX300 and the Xerox Proficio PX500 Production Presses, which are designed to help print providers compete and grow in the mid-production color market by representing Xerox’s next-generation production technology. The introduction of Proficio mar ...

Core Insights - Xerox Holdings Corporation is reentering the cut-sheet inkjet market with the launch of the Xerox IJP900 Inkjet Press, targeting the mid-volume inkjet sector [1][3] - The IJP900 is designed to enhance operational efficiency for print service providers and in-plant operators, focusing on applications like direct mail and transactional printing [2][3] Product Features - The IJP900 integrates with the Xerox production print ecosystem, including tools like Xerox FreeFlow for workflow automation and XMPie for personalized communications [3] - AI-assisted workflows and production analytics are incorporated to improve job preparation, automate tasks, and provide real-time operational insights, ultimately increasing output and reducing costs [3] Company Overview - Xerox Holdings Corporation operates as a workplace technology company, providing integrated hardware, services, and software for enterprises globally [4] - The company has two main segments: Print & Other, and Xerox Financial Services/XFS [4]

Investment Rating - The report maintains a constructive outlook on shares of Amphenol Corp (APH), Dell Technologies (DELL), Corning Inc (GLW), Hewlett Packard Enterprise (HPE), and the memory/disk drive sector including Seagate Technology (STX), Western Digital Corp (WDC), and SanDisk Corp (SNDK) [4]. Core Insights - The upcoming Citi's 33rd annual Global Technology Conference will feature over 240 technology companies, focusing on updates regarding customer and enterprise demand dynamics, as well as supply chain conditions [1]. - Key investor questions include the impact of Generative AI on infrastructure spending, enterprise spending intentions, consumer spending trends, margin impacts from rising component costs, and capital allocation strategies [2][3]. Company Summaries - **Amphenol Corp (APH)**: Current price at $109.36 with a market cap of $133.52 billion. The target price is set at $125.00 with an expected share price return of 14.3% [7]. - **CDW Corp (CDW)**: Current price at $167.00 with a market cap of $21.89 billion. The target price is $200.00 with an expected share price return of 19.8% [7]. - **Corning Inc (GLW)**: Current price at $65.77 with a market cap of $56.34 billion. The target price is $72.00 with an expected share price return of 9.5% [7]. - **Dell Technologies (DELL)**: Current price at $130.84 with a market cap of $88.50 billion. The target price is $160.00 with an expected share price return of 22.3% [7]. - **Hewlett Packard Enterprise (HPE)**: Current price at $22.45 with a market cap of $29.46 billion. The target price is $25.00 with an expected share price return of 11.4% [7]. - **SanDisk Corp (SNDK)**: Current price at $46.37 with a market cap of $6.76 billion. The target price is $57.00 with an expected share price return of 22.9% [7]. - **Seagate Technology (STX)**: Current price at $159.19 with a market cap of $33.86 billion. The target price is $167.00 with an expected share price return of 4.9% [7]. - **Western Digital Corp (WDC)**: Current price at $76.97 with a market cap of $26.70 billion. The target price is $88.00 with an expected share price return of 14.3% [7].