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 9% [3][4] - For the full year, revenue was $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 decreased to $184 million, down $150 million compared to the prior year [3][4] 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 [22] - Print post-sale revenue was $1.39 billion, up 25% as reported, but down 9% on a pro forma basis [23] - IT Solutions revenue increased 39% year-over-year, reflecting the full quarter inclusion of ITsavvy, with pro forma gross billings up 13% [24] Market Data and Key Metrics Changes - The company noted that macroeconomic challenges, including tariff impacts and increased product costs, continue to affect performance, particularly in the print equipment sales [3][5] - The company is experiencing a firming of demand in IT solutions, with over $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 commercial and operational benefits, with a unified sales organization planned for 2026 [11][12] - The company aims to achieve at least $300 million in gross cost synergies from the Lexmark acquisition and over $1 billion in profit improvement as part of its reinvention program [15] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about improving business trends despite ongoing macro headwinds, with expectations for a stronger 2026 [3][4] - The company anticipates that many headwinds experienced in 2025 will begin to moderate, with new product launches and a fully integrated IT solutions organization expected to provide tailwinds [8][29] - Management highlighted the importance of leveraging AI capabilities to drive efficiencies and improve customer experience [10][11] 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 [31] - The company ended Q4 with $565 million in cash and cash equivalents, and total debt of $4.2 billion, down $160 million sequentially [28] 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] Question: What is the impact of rising memory prices on the ITsavvy business? - Management clarified that rising memory prices create uncertainty across all industries, but they are taking steps to help clients navigate these challenges by extending product life and moving to consumption models [36][37] Question: How does the company prioritize various initiatives amidst current challenges? - Management emphasized that the reinvention strategy and acquisitions are progressing well, with a unified management operating system in place to oversee all initiatives [45][46] Question: How is the company protecting against potential challenges in IT services? - Management outlined strategies to help clients navigate increased costs and emphasized the importance of their product portfolio in mitigating risks [52][53] 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 expected improvement in free cash flow [57][58] Question: What progress has been made in cross-selling to the large client base? - Management noted that leveraging existing relationships with clients allows for effective cross-selling of IT solutions, enhancing the overall value proposition [61][63]

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 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]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was approximately $1.58 billion, roughly flat year-over-year in actual currency, and declined 1.1% in constant currency [5][28] - Adjusted operating income margin was 3.7%, down 170 basis points year-over-year [5][30] - Free cash flow was a use of $30 million, reflecting a delay in the sale of large portfolio finance receivables [5][40] - Adjusted loss per share was $0.64, a decline of $0.93 year-over-year, primarily due to an unfavorable tax rate [5][33] Business Line Data and Key Metrics Changes - Equipment sales declined 5.6% in actual currency and 6.7% in constant currency, with total equipment installations down 12% [34] - IT Solutions revenue and gross profit increased more than 150% year-over-year, driven by the inclusion of IT Savvy [37] - Print post-sale revenue declined 9.5% in actual currency and 10.5% in constant currency, reflecting lower supplies and page volumes [35] Market Data and Key Metrics Changes - The Lexmark acquisition is expected to enhance Xerox's position in the print market, particularly in the A4 segment, which is experiencing growth [13][16] - Xerox is now a top three player in each major print category, with nearly half of print revenue generated from A4 device sales [14] Company Strategy and Development Direction - The Lexmark acquisition is a key part of Xerox's reinvention strategy, aimed at enhancing client value and expanding IT solutions and digital services [4][10] - The company is focused on operational simplification, commercial optimization, and growth, with a target of achieving double-digit adjusted operating income margins [12][24] - The integration of Lexmark is expected to yield more than $250 million in cost synergies within two years [10][20] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging operating environment due to tariff-driven uncertainty and a brief period of softer demand for print equipment [6][28] - The outlook for the second half of 2025 includes conservatism due to potential demand fluctuations and tariff impacts [43][44] - The company expects revenue growth of 16% to 17% in constant currency for the full year, including Lexmark's contribution [43] Other Important Information - The adjusted tax rate for the quarter was 528%, significantly higher than the previous year's 25.5%, reflecting changes in tax deductibility [32] - The company reduced its dividend to prioritize debt repayment following the Lexmark acquisition [11] Q&A Session Summary Question: What caused the slowdown in June and July? - Management clarified that the slowdown was primarily due to funding-related issues and tariff uncertainties, with no cancellations in the pipeline, just delays [56][58] Question: Was the IT Savvy growth entirely responsible for the IT Solutions segment's performance? - Management confirmed that the 150% growth was driven by IT Savvy, while the legacy IT Solutions business experienced a decline [62][64] Question: What is the outlook for Lexmark's revenue in 2026? - Management indicated that Lexmark's revenue is expected to be flat, which is better than the industry average decline, due to its strong position in the A4 market [82][84] Question: Why is the operating margin outlook for 2025 lower than previously expected? - The decline in operating margin is attributed to conservatism in equipment demand outlook and the impact of prior reinvention initiatives [84]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was approximately $1.5 billion, a decrease of 3% in actual currency and 1.1% in constant currency, including IT Savvy [5][25] - Adjusted operating income margin was 1.5%, down 70 basis points year over year [5][26] - Free cash flow was a use of $109 million, compared to a use of $89 million in the prior year [5][36] - Adjusted loss per share was $0.06, a decrease of $0.12 year over year [5][27] Business Line Data and Key Metrics Changes - Equipment revenue adjusted for currency declined approximately 1%, a 500 basis point improvement from the pace of decline in 2024 [7] - Equipment installations grew 24%, marking the third consecutive quarter of double-digit growth [7] - IT Solutions revenue and gross profit increased more than 100% year over year due to the inclusion of IT Savvy [33] Market Data and Key Metrics Changes - Services renewal rates for large client contracts reached a multi-year high [7] - IT Solutions order activity was strong, with pro forma gross bookings increasing 30% year over year [34] Company Strategy and Development Direction - The company is focused on executing over 100 reinvention initiatives aimed at driving revenue stabilization and improving profitability [14] - The integration of IT Savvy is ahead of plan, with expected run rate synergies of over $15 million already implemented [10] - The company is actively engaged in the integration planning for the Lexmark acquisition, which is expected to be accretive immediately [19] Management's Comments on Operating Environment and Future Outlook - Management noted that the near-term operating environment is clouded by tariff and trade-related uncertainty, but improvements from organizational changes are evident [6][8] - The company expects minimal tariff or macro-related impacts to financial results in Q2, with revenue decline in constant currency consistent with Q1 [41][42] Other Important Information - The company ended Q1 with $390 million in cash equivalents and restricted cash, and total debt decreased by around $100 million [37][38] - The company expects to realize over $100 million in gross cost savings in 2025 from reinvention initiatives [39] Q&A Session Summary Question: Impact of macroeconomic conditions on large corporate customers and VARs - Management indicated that while there is volatility, they have not seen a real impact in Q1, and conversations with clients reflect a cautious but stable environment [46][48] Question: Context on IT Savvy integration - Management expressed optimism about the integration of IT Savvy, highlighting the potential to double the business by penetrating existing accounts with IT solutions [52][54] Question: Rationale for maintaining full-year guidance amid tariff uncertainties - Management maintained guidance due to the fluid nature of tariffs, emphasizing accountability and the goal to deliver planned results [65][66] Question: Future margin expectations for IT Solutions - Management indicated that they aim for double-digit operating profit in IT Solutions, leveraging synergies and a mix of services to improve margins over time [68][70]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was approximately $1.5 billion, a decrease of 3% in actual currency and 1.1% in constant currency, including IT Savvy [5][24] - Adjusted operating income margin was 1.5%, down 70 basis points year over year [5][25] - Free cash flow was a use of $109 million, compared to a use of $89 million in the prior year [5][34] - Adjusted loss per share was $0.06, a decrease of $0.12 year over year [5][26] Business Line Data and Key Metrics Changes - Equipment revenue adjusted for currency declined approximately 1%, a 500 basis point improvement from the pace of decline in 2024 [6] - Equipment installations grew 24%, marking the third consecutive quarter of double-digit growth [6][29] - IT Solutions revenue and gross profit increased more than 100% year over year due to the inclusion of IT Savvy [31] - Print post-sale revenue declined around 11.2% in actual currency and 9.2% in constant currency [30] Market Data and Key Metrics Changes - Services renewal rates for large client contracts reached a multi-year high [6] - IT Solutions order activity was strong despite an uncertain operating environment [31] - The total IT solutions pipeline increased by 26% since the acquisition of IT Savvy [32] Company Strategy and Development Direction - The company is focused on executing over 100 reinvention initiatives to drive revenue stabilization and improve profitability [14] - The integration of IT Savvy is ahead of plan, with expected run rate synergies of over $15 million already implemented [10] - The company is actively engaged in the integration planning for the Lexmark acquisition, which is expected to close soon [17] Management's Comments on Operating Environment and Future Outlook - Management noted that the near-term operating environment is clouded by tariff and trade-related uncertainty, but improvements from organizational changes are evident [6] - The company expects minimal tariff or macro-related impacts on financial results in Q2 [40] - Guidance for the full year remains unchanged despite the fluid nature of tariff policies [37][64] Other Important Information - The company’s top capital allocation priority is debt repayment, with total debt decreasing by around $100 million [12] - The company expects to realize over $100 million in gross cost savings in 2025 [37] Q&A Session Summary Question: Impact of macroeconomic conditions on large corporate customers and SMBs - Management indicated that there has not been a discernible impact in Q1, although there is caution among clients [46][49] Question: Context on IT Savvy integration and metrics - Management expressed optimism about the potential to double the IT Solutions business by penetrating existing accounts [51][52] Question: Rationale for maintaining full year guidance amid tariff uncertainties - Management stated that guidance is maintained until tariffs are finalized, providing transparency to investors [63][64] Question: Future gross and operating margin rates for IT Solutions - Management aims for double-digit operating profit in IT Solutions, leveraging lower SG&A and cost structures [67][68]