NORWALK, Conn.–(BUSINESS WIRE)–Xerox Holdings Corporation (NASDAQ: XRX) today announced its 2024 fourth-quarter and full-year results and guidance for 2025.
“2024 was a critical year as we implemented a new operating model and structural process improvements to position Xerox for long-term, sustainable growth,” said Steve Bandrowczak, chief executive officer at Xerox. “We continue to see steady progress in our Reinvention, reflecting the resilience of our team and initiatives taken to-date. In 2025, we expect to build on changes made in 2024 in order to focus on executing our Reinvention strategy, realizing the benefits of the ITsavvy and pending Lexmark acquisitions, and strengthening our balance sheet.”
Fourth-Quarter Key Financial Results
|
(in millions, except per share data) |
Q4 2024 |
|
Q4 2023 |
|
B/(W) |
|
% Change |
|
|
Revenue |
$1,613 |
|
$1,765 |
|
$(152) |
|
(8.6)% AC (8.0)% CC1 |
|
|
Gross Profit |
$502 |
|
$592 |
|
$(90) |
|
(15.2)% |
|
|
Gross Margin |
31.1% |
|
33.5% |
|
(240) bps |
|
|
|
|
RD&E % |
2.9% |
|
3.2% |
|
30 bps |
|
|
|
|
SAG % |
23.4% |
|
24.9% |
|
150 bps |
|
|
|
|
Pre-Tax (Loss)2 |
$(4) |
|
$(88) |
|
$84 |
|
NM |
|
|
Pre-Tax (Loss) Margin2 |
(0.2)% |
|
(5.0)% |
|
480 bps |
|
|
|
|
Gross Profit – Adjusted1 |
$509 |
|
$592 |
|
$(83) |
|
(14.0)% |
|
|
Gross Margin – Adjusted1 |
31.6% |
|
33.5% |
|
(190) bps |
|
|
|
|
Operating Income – Adjusted1 |
$104 |
|
$96 |
|
$8 |
|
8.3% |
|
|
Operating Income Margin – Adjusted1 |
6.4% |
|
5.4% |
|
100 bps |
|
|
|
|
GAAP Diluted (Loss) per Share2 |
$(0.20) |
|
$(0.50) |
|
$0.30 |
|
NM |
|
|
Diluted Earnings Per Share – Adjusted1 |
$0.36 |
|
$0.43 |
|
$(0.07) |
|
(16.3)% |
Full-Year Key Financial Results
|
(in millions, except per share data) |
FY 2024 |
|
FY 2023 |
|
B/(W) |
|
% Change |
|
|
Revenue |
$6,221 |
|
$6,886 |
|
$(665) |
|
(9.7)% AC (9.5)% CC1 |
|
|
Gross Profit |
$1,960 |
|
$2,314 |
|
$(354) |
|
(15.3)% |
|
|
Gross Margin |
31.5% |
|
33.6% |
|
(210) bps |
|
|
|
|
RD&E % |
3.1% |
|
3.3% |
|
20 bps |
|
|
|
|
SAG % |
24.7% |
|
24.6% |
|
(10) bps |
|
|
|
|
Pre-Tax (Loss)2 |
$(1,216) |
|
$(28) |
|
$(1,188) |
|
NM |
|
|
Pre-Tax (Loss) Margin2 |
(19.5)% |
|
(0.4)% |
|
NM |
|
|
|
|
Gross Profit – Adjusted1 |
$2,011 |
|
$2,314 |
|
$(303) |
|
(13.1)% |
|
|
Gross Margin – Adjusted1 |
32.3% |
|
33.6% |
|
(130) bps |
|
|
|
|
Operating Income – Adjusted1 |
$302 |
|
$389 |
|
$(87) |
|
(22.4)% |
|
|
Operating Income Margin – Adjusted1 |
4.9% |
|
5.6% |
|
(70) bps |
|
|
|
|
GAAP Diluted (Loss) per Share2 |
$(10.75) |
|
$(0.09) |
|
$(10.66) |
|
NM |
|
|
Diluted Earnings Per Share – Adjusted1 |
$0.97 |
|
$1.82 |
|
$(0.85) |
|
(46.7)% |
_____________
- Refer to the “Non-GAAP Financial Measures” section of this release for a discussion of these non-GAAP measures and their reconciliation to the reported GAAP measures.
- Fourth quarter 2024 Pre-Tax (Loss) and Margin and Diluted (Loss) per Share includes a $37 million pre-tax ($28 million after-tax) write-off of intangibles, or $0.22 per share, and $19 million of pre-tax ($15 million after-tax) Reinvention and transaction-related costs, or $0.12 per share. Full-year 2024 Pre-Tax (Loss) and Margin, and Diluted (Loss) per Share includes the following: Q1-24 $129 million pre-tax ($100 million after-tax) Reinvention-related charge, or $0.81 per share, primarily related to the exit of certain Production Print manufacturing operations and geographic simplification; Q3-24 pre-tax non-cash goodwill impairment charge of approximately $1.1 billion (approximately $1.0 billion after-tax), or $8.17 per share; Q4-24 $37 million pre-tax ($28 million after-tax) write-off of intangibles, or $0.22 per share, and $19 million of pre-tax ($15 million after-tax) Reinvention and transaction-related costs, or $0.12 per share. Full year 2024 also includes a Q3-24 tax expense charge of $161 million, or $1.30 per share, related to the establishment of a valuation allowance against certain deferred tax assets to reflect their realizability. Full year 2023 Pre-Tax (Loss) and Margin, and Diluted (Loss) per Share includes a Q2-23 net pre-tax PARC donation charge of $132 million ($92 million after-tax), or $0.58 per share, and a Q4-23 $104 million pre-tax Restructuring and related costs, net charge ($78 million after-tax), or $0.52 per share, related to the Reinvention-related workforce reduction.
Fourth-Quarter Segment Results
|
(in millions) |
Q4 2024 |
|
Q4 2023 |
|
B/(W) |
|
% Change |
|
|
Revenue |
|
|
|
|
|
|
|
|
|
Print and Other |
$1,540 |
|
$1,686 |
|
$(146) |
|
(8.7)% |
|
|
XFS |
89 |
|
100 |
|
(11) |
|
(11.0)% |
|
|
Intersegment Elimination1 |
(16) |
|
(21) |
|
5 |
|
(23.8)% |
|
|
Total Revenue |
$1,613 |
|
$1,765 |
|
$(152) |
|
(8.6)% |
|
|
Profit |
|
|
|
|
|
|
|
|
|
Print and Other |
$87 |
|
$89 |
|
$(2) |
|
(2.2)% |
|
|
XFS |
17 |
|
7 |
|
10 |
|
142.9% |
|
|
Total Profit |
$104 |
|
$96 |
|
$8 |
|
8.3% |
Full-Year Segment Results
|
(in millions) |
FY 2024 |
|
FY 2023 |
|
B/(W) |
|
% Change |
|
|
Revenue |
|
|
|
|
|
|
|
|
|
Print and Other |
$5,935 |
|
$6,571 |
|
$(636) |
|
(9.7)% |
|
|
XFS |
357 |
|
401 |
|
(44) |
|
(11.0)% |
|
|
Intersegment Elimination1 |
(71) |
|
(86) |
|
15 |
|
(17.4)% |
|
|
Total Revenue |
$6,221 |
|
$6,886 |
|
$(665) |
|
(9.7)% |
|
|
Profit |
|
|
|
|
|
|
|
|
|
Print and Other |
$268 |
|
$360 |
|
$(92) |
|
(25.6)% |
|
|
XFS |
34 |
|
29 |
|
5 |
|
17.2% |
|
|
Total Profit |
$302 |
|
$389 |
|
$(87) |
|
(22.4)% |
_____________
- Reflects revenue, primarily commissions and other payments, made by the XFS segment to the Print and Other segment for the lease of Xerox equipment placements.
2025 Guidance
- Revenue: low single-digit growth in constant currency1
- Adjusted 1 Operating Margin: at least 5.0%
- Free cash flow1: $350 million to $400 million
Guidance does not include any impacts associated with the pending acquisition of Lexmark, which is expected to close in 2H 2025.
