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].

Core Insights - The performance of Xerox Holdings Corporation's international operations is critical for understanding its financial resilience and growth potential [1][2][3] Revenue Performance - Xerox's total revenue for the recent quarter was $1.58 billion, reflecting a slight decline of 0.1% compared to the same quarter last year [4] - Revenue from Europe was $438 million, accounting for 27.8% of total revenue, which was a surprise decline of -10.62% from the expected $490.05 million [5] - Canada contributed $108 million, representing 6.9% of total revenue, with a surprise decline of -11.18% from the consensus estimate of $121.59 million [6] - Other International revenue was $100 million, making up 6.4% of total revenue, also showing a surprise decline of -11.87% from the expected $113.47 million [7] Future Projections - Analysts project that Xerox will achieve revenues of $2.05 billion in the current fiscal quarter, indicating a significant increase of 34.4% compared to the same quarter last year [8] - For the full year, total revenue is expected to reach $7.25 billion, which signifies a rise of 16.5% from the previous year [9] - Revenue contributions are anticipated to be 28.8% from Europe ($2.09 billion), 6.4% from Canada ($466.56 million), and 6.1% from Other International ($440.27 million) [9] Market Context - The reliance on international markets presents both opportunities and risks for Xerox, making it essential to monitor international revenue trends for forecasting the company's prospects [10] - The company's stock has seen a decline of 17.9% over the past four weeks, contrasting with a 1.9% increase in the Zacks S&P 500 composite [13] - Over the past three months, Xerox shares have decreased by 22.4%, while the S&P 500 has increased by 13% [13]

```markdown [Part I — Financial Information](index=4&type=section&id=Part%20I%20%E2%80%94%20Financial%20Information) [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Xerox Holdings Corporation and Xerox Corporation for the quarterly period ended June 30, 2025, including statements of income, balance sheets, and cash flows, reflecting key events such as segment changes, new debt issuance for the Lexmark acquisition, and a valuation allowance against deferred tax assets [Xerox Holdings Corporation Condensed Consolidated Financial Statements](index=4&type=section&id=Xerox%20Holdings%20Corporation%20Condensed%20Consolidated%20Financial%20Statements) Xerox Holdings Corp. Statement of (Loss) Income Highlights (Unaudited) | Metric (in millions, except per-share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $1,576 | $1,578 | $3,033 | $3,080 | | **(Loss) Income before Income Taxes** | $(60) | $25 | $(127) | $(125) | | **Net (Loss) Income** | $(106) | $18 | $(196) | $(95) | | **Net (Loss) Income attributable to Common Shareholders** | $(109) | $15 | $(203) | $(102) | | **Diluted (Loss) Income per Share** | $(0.87) | $0.11 | $(1.62) | $(0.83) | Xerox Holdings Corp. Balance Sheet Highlights (Unaudited) | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $449 | $576 | | Total current assets | $3,543 | $2,935 | | **Total Assets** | **$8,874** | **$8,365** | | Short-term debt and current portion of long-term debt | $458 | $585 | | Long-term debt | $3,484 | $2,814 | | **Total Liabilities** | **$7,523** | **$7,061** | | **Total Equity** | **$1,127** | **$1,080** | Xerox Holdings Corp. Cash Flow Highlights (Unaudited) | Metric (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(100) | $44 | | Net cash used in investing activities | $(12) | $(19) | | Net cash provided by (used in) financing activities | $459 | $(75) | [Xerox Corporation Condensed Consolidated Financial Statements](index=8&type=section&id=Xerox%20Corporation%20Condensed%20Consolidated%20Financial%20Statements) Xerox Corp. Statement of (Loss) Income Highlights (Unaudited) | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $1,576 | $1,578 | $3,033 | $3,080 | | **(Loss) Income before Income Taxes** | $(58) | $26 | $(122) | $(124) | | **Net (Loss) Income** | $(104) | $19 | $(191) | $(94) | Xerox Corp. Balance Sheet Highlights (Unaudited) | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$8,832** | **$8,324** | | **Total Liabilities** | **$7,510** | **$7,018** | | **Total Equity** | **$1,312** | **$1,296** | Xerox Corp. Cash Flow Highlights (Unaudited) | Metric (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(100) | $44 | | Net cash used in investing activities | $(12) | $(19) | | Net cash provided by (used in) financing activities | $459 | $(75) | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - In Q1 2025, the company changed its reportable segments from 'Print and Other' and 'Xerox Financial Services (XFS)' to two new segments: **'Print and Other'** and **'IT Solutions'**. This change aligns reporting with how the CEO allocates resources and assesses performance. Prior period results have been restated to conform to the new structure[39](index=39&type=chunk)[65](index=65&type=chunk) - A valuation allowance of approximately **$59 million** was recorded in Q1 2025, primarily against certain U.S. deferred tax assets, due to changes in tax planning strategies making their realization not more-likely-than-not[48](index=48&type=chunk) - In April 2025, Xerox Corporation issued **$400 million** of **10.250%** Senior Secured First Lien Notes due 2030 and **$400 million** of **13.500%** Senior Secured Second Lien Notes due 2031. An additional **$100 million** of the Second Lien Notes were issued in May 2025. Proceeds were used to fund the Lexmark acquisition, redeem 2025 Senior Notes, and repay other debt[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) - On July 1, 2025, subsequent to the reporting period, Xerox completed its acquisition of Lexmark International II, LLC for approximately **$841 million** in cash and the assumption of **$327 million** in debt[202](index=202&type=chunk) - The annual dividend on common shares was reduced twice in 2025: first from **$1.00** to **$0.50** per share in Q1, and then further to **$0.10** per share in Q2[183](index=183&type=chunk)[193](index=193&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting revenue stability and adjusted operating income supported by its 'Reinvention' strategy, with Q2 2025 total revenue flat year-over-year at $1.58 billion, a pre-tax loss of $60 million, and details on segment performance, liquidity, and the Lexmark acquisition [Overview](index=47&type=section&id=Overview) - Q2 2025 results demonstrated resilience due to the company's **'Reinvention' strategy**, which shifted the revenue mix towards higher-growth businesses and simplified the operating structure[216](index=216&type=chunk) Q2 2025 Performance vs. Q2 2024 | Metric | Q2 2025 | Change vs. Q2 2024 | Key Drivers | | :--- | :--- | :--- | :--- | | Equipment Sales | $336M | -5.6% (-6.7% CC) | Lower installations amid tariff uncertainty. | | Post-Sale Revenue | $1.2B | +1.5% (+0.5% CC) | 10.6 ppt benefit from ITsavvy acquisition. | | Pre-tax Loss | $(60)M | -$85M | Lower gross profit, higher interest expense. | | Adjusted Operating Income | $59M | -$26M | Lower gross profit, partially offset by cost savings. | - The acquisition of Lexmark was completed on July 1, 2025. The company expects the acquisition to be accretive to **adjusted earnings** and **EPS**, with no material impact from proposed U.S. tariffs due to Lexmark's manufacturing facility in Mexico[220](index=220&type=chunk) - 2025 guidance was updated to include the Lexmark acquisition, with expected revenue growth of **16%-17%** in constant currency. However, operating cash flow guidance was lowered to approximately **$345 million** due to higher tariff expenses and synergy implementation costs[232](index=232&type=chunk) [Financial Review](index=51&type=section&id=Financial%20Review) Revenue Breakdown (in millions) | Revenue Line | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Equipment sales | $336 | $356 | (5.6)% | $620 | $646 | (4.0)% | | Post sale revenue | $1,240 | $1,222 | 1.5% | $2,413 | $2,434 | (0.9)% | | **Total Revenue** | **$1,576** | **$1,578** | **(0.1)%** | **$3,033** | **$3,080** | **(1.5)%** | Key Financial Ratios | Ratio | Q2 2025 | Q2 2024 | Change (pts) | H1 2025 | H1 2024 | Change (pts) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Gross Margin | 28.6% | 33.0% | (4.4) | 28.9% | 31.3% | (2.4) | | RD&E as a % of Revenue | 2.7% | 3.2% | 0.5 | 2.8% | 3.2% | 0.4 | | SAG as a % of Revenue | 23.4% | 24.9% | 1.5 | 24.6% | 25.6% | 1.0 | | Pre-tax (Loss) Income Margin | (3.8)% | 1.6% | (5.4) | (4.2)% | (4.1)% | (0.1) | | Adjusted Operating Margin | 3.7% | 5.4% | (1.7) | 2.7% | 3.8% | (1.1) | - Q2 2025 gross margin declined by **4.4 percentage points** to **28.6%**, primarily due to unfavorable product mix, tariff and product-related cost increases (**2.0 ppt** adverse impact), and the impact of the ITsavvy acquisition (**1.0 ppt** adverse impact)[247](index=247&type=chunk) - Worldwide employment decreased by approximately **200 people** since year-end 2024 to **16,600** as of June 30, 2025, mainly due to the company's Reinvention and workforce reduction initiatives[267](index=267&type=chunk) [Capital Resources and Liquidity](index=66&type=section&id=Capital%20Resources%20and%20Liquidity) Cash Flow Summary (in millions) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(100) | $44 | | Net cash used in investing activities | $(12) | $(19) | | Net cash provided by (used in) financing activities | $459 | $(75) | | **Increase (decrease) in cash** | **$354** | **$(66)** | - The **$144 million decrease** in operating cash flow for H1 2025 compared to H1 2024 was primarily driven by lower net proceeds from finance receivable sales and lower profitability, partially offset by favorable timing of working capital payments[229](index=229&type=chunk)[323](index=323&type=chunk) - Total cash, cash equivalents, and restricted cash increased to **$985 million** at June 30, 2025, from **$631 million** at year-end 2024. This includes **$492 million** in restricted cash from debt proceeds for the Lexmark acquisition, which was released on July 1, 2025[322](index=322&type=chunk) Debt Breakdown (in millions) | Debt Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Financing debt | $1,635 | $1,741 | | Core debt | $2,307 | $1,658 | | **Total Debt** | **$3,942** | **$3,399** | [Non-GAAP Financial Measures](index=70&type=section&id=Non-GAAP%20Financial%20Measures) - The company uses non-GAAP measures such as **Adjusted Net Income**, **Adjusted EPS**, and **Adjusted Operating Income** to provide investors with a better understanding of business trends. These measures exclude items like restructuring costs, amortization of intangible assets, non-service retirement costs, and other discrete or unusual items[345](index=345&type=chunk)[348](index=348&type=chunk)[349](index=349&type=chunk) Reconciliation of Reported to Adjusted Net (Loss) Income (in millions) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Reported Net (Loss) Income** | **$(106)** | **$18** | **$(196)** | **$(95)** | | Adjustments | $29 | $23 | $115 | $147 | | **Adjusted Net (Loss) Income** | **$(77)** | **$41** | **$(81)** | **$52** | Reconciliation of Pre-tax (Loss) Income to Adjusted Operating Income (in millions) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Pre-tax (loss) income** | **$(60)** | **$25** | **$(127)** | **$(125)** | | Adjustments | $119 | $60 | $208 | $243 | | **Adjusted Operating Income** | **$59** | **$85** | **$81** | **$118** | [Quantitative and Qualitative Disclosures About Market Risk](index=75&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market risks from foreign currency exchange rates and interest rates through operating activities and derivative financial instruments, used solely for risk management, not speculation - The company is exposed to market risk from **foreign currency exchange rates** (primarily Euro, U.K. Pound Sterling, Japanese Yen) and **interest rates**[341](index=341&type=chunk) - Derivative instruments like **interest rate swaps**, **caps**, and **foreign currency contracts** are used to hedge economic exposures and reduce earnings volatility, not for trading or speculative purposes[341](index=341&type=chunk) [Controls and Procedures](index=75&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting identified during the last fiscal quarter - Management of both Xerox Holdings Corporation and Xerox Corporation concluded that their respective **disclosure controls and procedures were effective** as of the end of the period covered by the report (June 30, 2025)[367](index=367&type=chunk)[368](index=368&type=chunk) - There were no changes in **internal control over financial reporting** during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[369](index=369&type=chunk)[370](index=370&type=chunk) [Part II — Other Information](index=76&type=section&id=Part%20II%20%E2%80%94%20Other%20Information) [Legal Proceedings](index=76&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, including unreserved tax contingencies in Brazil totaling $345 million and a shareholder derivative lawsuit that has reached a preliminarily approved settlement - The company faces numerous governmental assessments in Brazil related to indirect taxes, with an unreserved tax contingency of **$345 million** as of June 30, 2025, up from **$305 million** at year-end 2024. Management believes the likelihood of loss is remote[196](index=196&type=chunk) - The shareholder derivative lawsuit, Miami Firefighters' Relief & Pension Fund v. Icahn, et al., has reached a settlement which has received **preliminary court approval**[197](index=197&type=chunk)[198](index=198&type=chunk) [Risk Factors](index=76&type=section&id=Item%201A.%20Risk%20Factors) This section introduces new risk factors related to the Lexmark acquisition, including difficulties in realizing synergies, integration challenges, and adverse effects of increased indebtedness on financial flexibility - A new risk factor is the potential inability to realize anticipated **synergies**, **cost-savings**, and **revenue benefits** from the Lexmark acquisition due to various assumptions and potential offsetting costs[373](index=373&type=chunk)[374](index=374&type=chunk) - The company may face significant difficulties integrating Lexmark's business, which is a complex process involving different operations (like **hardware manufacturing**), systems, and corporate cultures, potentially disrupting business and limiting expected benefits[377](index=377&type=chunk)[382](index=382&type=chunk) - The company's level of indebtedness has increased significantly post-acquisition, which could adversely affect financial condition by diverting cash flow to service debt, limiting flexibility due to covenants, and increasing vulnerability to adverse economic conditions[383](index=383&type=chunk)[394](index=394&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=78&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2025, Xerox Holdings Corporation made no open-market repurchases but repurchased 5,942 shares for tax-withholding requirements of stock compensation programs - There were no open-market repurchases of Xerox Holdings Corporation's Common Stock during Q2 2025 under the **board-authorized program**[388](index=388&type=chunk) - The company repurchased **5,942 shares** during the quarter through a net-settlement feature of its stock compensation programs to satisfy employee tax-withholding requirements[389](index=389&type=chunk) ```

Group 1 - The article discusses the investment approach towards Xerox, emphasizing a fundamentals-based value investing strategy that prioritizes long-term durability and affordability over low multiples [1] - The author highlights the misconception that low multiple stocks are inherently cheap, advocating for a focus on companies with steady long-term growth and strong balance sheets [1] - It is noted that while investing in successful companies carries risks, there are scenarios where the potential for growth diminishes the immediate importance of price [1]