Xerox Releases Second-Quarter Results, Raises 2023 Guidance

NORWALK, Conn.–(BUSINESS WIRE)–Xerox Holdings Corporation (NASDAQ: XRX) today announced its 2023 second-quarter results.

“Over the last 12 months, Xerox has taken significant steps to strengthen its operating and financial discipline, leading to another quarter of profitable growth amid a dynamic macroeconomic backdrop,” said Steve Bandrowczak, chief executive officer at Xerox. “I’m proud of the part all Xerox employees and partners have played in our continued success. An improved operating system leaves us well positioned to pursue growth opportunities as we focus on meeting clients’ evolving needs in today’s hybrid workplace.”

Second-Quarter Key Financial Results

(in millions, except per share data)Q2 2023Q2 2022B/(W)
% Change
Revenue$1,754$1,747$70.4% AC
0.5% CC(1)
Gross Margin34.0%31.9%210 bps 
RD&E %3.2%4.8%160 bps 
SAG %24.7%26.3%160 bps 
Pre-Tax (Loss)$(89)$(5)$(84)NM
Pre-Tax (Loss) Margin(5.1)%(0.3)%(480) bps 
Operating Income – Adjusted (1)$107$35$72205.7%
Operating Income Margin – Adjusted (1)6.1%2.0%410 bps 
GAAP Diluted (Loss) per Share$(0.41)$(0.05)$(0.36)NM
Diluted Earnings Per Share – Adjusted (1)$0.44$0.13$0.31238.5%
(1)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.

During the second quarter of 2023, the Company recast FITTLE’s segment revenues and profit measures to reflect the recent strategic shift in the Company’s approach to funding FITTLE’s growth through receivable funding agreements that involve the sale of lease receivables. Refer to 2023 Segment Reporting Change for FITTLE’s recast Segment revenues and profits for FY 2022 and Q1 2023.

Second-Quarter Segment Results

(in millions)Q2 2023 Q2 2022 B/(W)
 % Change
Print and Other$1,674 $1,673 $1 0.1%
Financing (FITTLE)101 96 5 5.2%
Intersegment Elimination (1)(21) (22) 1 (4.5)%
Total Revenue$1,754 $1,747 $7 0.4%
Print and Other$107 $29 $78 269.0%
Financing (FITTLE) 6 (6) (100.0)%
Total Profit$107 $35 $72 205.7%
(1)Reflects revenue, primarily commissions and other payments, made by the FITTLE segment to the Print and Other segment for the lease of Xerox equipment placements.

2023 Guidance

  • Revenue: flat to down low-single-digits in constant currency
  • Adjusted Operating Margin: 5.5% to 6.0%
  • Free cash flow: at least $600 million

Non-GAAP Measures

This release refers to the following non-GAAP financial measures:

  • Adjusted EPS, which excludes Restructuring and related costs, net, Amortization of intangible assets, non-service retirement-related costs, and other discrete adjustments from GAAP EPS, as applicable.
  • Adjusted operating income and margin, which exclude the EPS adjustments noted above as well as the remainder of Other expenses, net from pre-tax loss and margin.
  • Constant currency (CC) revenue change, which excludes the effects of currency translation.
  • Free cash flow, which is operating cash flow less capital expenditures.

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.

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