Xerox Holdings Corporation (XRX) Bundle
A Brief History of Xerox Holdings Corporation
Xerox Holdings Corporation, founded in 1906, has undergone significant transformations over its long history, adapting to technological advancements and market changes. The company is best known for its pioneering role in the development of photocopying technology and has expanded into various aspects of document management and IT services.
Recent Financial Performance (2024)
As of the third quarter of 2024, Xerox reported total revenues of $1.528 billion, reflecting a year-over-year decline of 7.5% compared to $1.652 billion in the same quarter of 2023. This decline was attributed to a significant drop in equipment sales and post-sale revenues.
| Financial Metrics | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Total Revenue | $1.528 billion | $1.652 billion | (7.5)% |
| Net Loss | $(1.205 billion) | $49 million | NM |
| Basic Loss Per Share | $(9.71) | $0.29 | NM |
| Adjusted Operating Income | $80 million | $68 million | 17.6% |
| Free Cash Flow | $107 million | $112 million | (4.5)% |
Segment Performance
The company operates primarily through two segments: Print and Other, and Xerox Financial Services (XFS). In Q3 2024, the Print and Other segment generated revenues of $1.457 billion, a decrease of 7.5% from $1.575 billion in Q3 2023. The XFS segment reported $88 million in revenue, down 10.2% from $98 million.
| Segment | Revenue (Q3 2024) | Revenue (Q3 2023) | % Change |
|---|---|---|---|
| Print and Other | $1.457 billion | $1.575 billion | (7.5)% |
| XFS | $88 million | $98 million | (10.2)% |
Operating Income and Margins
The adjusted operating margin rose to 5.2% in Q3 2024 from 4.1% in Q3 2023, indicating improvements in operational efficiencies despite the revenue decline. The company faced significant challenges, including a pre-tax non-cash goodwill impairment charge of approximately $1.1 billion, which heavily impacted net income.
| Operating Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Adjusted Operating Margin | 5.2% | 4.1% |
| Pre-tax Loss | $(1.087 billion) | $64 million |
Cash Flow and Guidance
For 2024, Xerox adjusted its free cash flow guidance to a range of $450 to $500 million, down from previous estimates of at least $550 million. This adjustment reflects the anticipated decrease in operating income and revenue declines. The company continues to focus on its "Reinvention" strategy, aimed at achieving long-term profitable growth.
| Cash Flow Metrics | FY 2024 Guidance |
|---|---|
| Free Cash Flow | $450 - $500 million |
| Estimated Revenue Decline | ~10% in constant currency |
| Adjusted Operating Margin Guidance | ~5.0% |
As of September 30, 2024, Xerox's total assets were reported at $8.322 billion, with total liabilities amounting to $6.791 billion. The company's equity stood at $1.307 billion, reflecting the impacts of recent financial challenges and strategic shifts.
| Balance Sheet Metrics | As of Sept 30, 2024 |
|---|---|
| Total Assets | $8.322 billion |
| Total Liabilities | $6.791 billion |
| Total Equity | $1.307 billion |
A Who Owns Xerox Holdings Corporation (XRX)
Ownership Structure
Xerox Holdings Corporation (XRX) has a diverse ownership structure that includes institutional investors, mutual funds, and individual shareholders. As of 2024, the largest shareholders include:
| Shareholder Type | Percentage Ownership | Number of Shares |
|---|---|---|
| Institutional Investors | 68.3% | 85,000,000 |
| Mutual Funds | 12.5% | 15,000,000 |
| Individual Investors | 19.2% | 24,000,000 |
Major Institutional Shareholders
As of 2024, the following institutions are the top shareholders of Xerox:
| Institution | Percentage Ownership | Number of Shares |
|---|---|---|
| The Vanguard Group, Inc. | 10.2% | 12,800,000 |
| BlackRock, Inc. | 8.5% | 10,600,000 |
| State Street Corporation | 7.1% | 8,900,000 |
| Invesco Ltd. | 5.4% | 6,800,000 |
| Franklin Templeton Investments | 4.3% | 5,400,000 |
Recent Trends in Ownership
In 2024, Xerox has seen fluctuations in its ownership due to market conditions and strategic initiatives, including:
- Institutional ownership has increased by 3% from 2023, reflecting confidence in Xerox's restructuring efforts.
- Mutual funds have slightly decreased their holdings, adjusting to market volatility.
- Individual investors have remained stable, indicating steady interest from retail shareholders.
Shareholder Engagement and Voting
Xerox engages its shareholders through regular communications, annual meetings, and voting on key corporate matters. In 2024, significant votes included:
| Vote Topic | Outcome | Percentage of Votes in Favor |
|---|---|---|
| Board of Directors Election | Approved | 92.5% |
| Executive Compensation Plan | Rejected | 48.2% |
| Shareholder Proposals | Approved | 75.1% |
Conclusion on Ownership Dynamics
Understanding the ownership dynamics of Xerox Holdings Corporation is crucial for assessing its strategic direction and market positioning. The trends in institutional investment and shareholder engagement reflect broader market sentiments and the company's ongoing efforts to reinvent itself in a competitive landscape.
Xerox Holdings Corporation (XRX) Mission Statement
Current Mission Statement
Xerox Holdings Corporation's mission is to enable organizations to improve productivity and enhance the customer experience by providing innovative technology, services, and solutions. The company emphasizes its commitment to sustainability and social responsibility while driving digital transformation across various industries.
Financial Performance Overview
As of the third quarter of 2024, Xerox reported a total revenue of $1.528 billion, a decrease of 7.5% compared to $1.652 billion in the same period of 2023. The breakdown of revenue sources is as follows:
| Revenue Source | Q3 2024 (in millions) | Q3 2023 (in millions) | % Change |
|---|---|---|---|
| Equipment Sales | $339 | $386 | (12.2)% |
| Post Sale Revenue | $1,189 | $1,266 | (6.1)% |
| Total Revenue | $1,528 | $1,652 | (7.5)% |
Key Financial Metrics
The following key metrics illustrate Xerox's financial performance in Q3 2024:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net (Loss) Income | $(1,205) million | $49 million |
| Diluted (Loss) Earnings per Share | $(9.71) | $0.28 |
| Adjusted Net Income | $34 million | $77 million |
| Adjusted Diluted Earnings per Share | $0.25 | $0.46 |
Operational Insights
Xerox's operational performance for Q3 2024 reflects challenges in equipment sales, which amounted to $339 million, down 12.2% year-over-year. The decline is attributed to several factors including delayed product launches and lower sales force productivity. In contrast, post-sale revenue demonstrated resilience, totaling $1.189 billion.
Future Guidance
For the fiscal year 2024, Xerox has revised its revenue guidance, expecting a decline of approximately 10% in constant currency. The company anticipates an adjusted operating margin of around 5.0% and free cash flow in the range of $450 million to $500 million.
| Guidance Metric | FY 2024 Estimate |
|---|---|
| Revenue Decline (Constant Currency) | ~10% |
| Adjusted Operating Margin | ~5.0% |
| Free Cash Flow | $450 - $500 million |
Strategic Initiatives
Xerox is actively pursuing its "Reinvention" strategy aimed at enhancing profitability and operational efficiency. This includes a pending acquisition of ITsavvy, which is expected to improve revenue mix from higher growth businesses.
Conclusion on Mission Alignment
Xerox's mission to drive productivity and enhance customer experiences is reflected in its ongoing initiatives to innovate and adapt to market changes. The commitment to sustainability and digital transformation remains central to its operational strategy as it navigates the challenges of 2024.
How Xerox Holdings Corporation (XRX) Works
Overview of Operations
Xerox Holdings Corporation operates primarily in the document management and technology sectors. The company has two main segments: Print and Other, and Xerox Financial Services (XFS).
Financial Performance
For the third quarter of 2024, Xerox reported the following financial results:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $1.528 billion | $1.652 billion | (7.5)% |
| Net (Loss) Income | $(1.205) billion | $49 million | (2,553.1)% |
| Basic (Loss) Earnings per Share | $(9.71) | $0.29 | (3,446.6)% |
| Adjusted Net Income | $34 million | $77 million | (55.8)% |
| Free Cash Flow | $107 million | $112 million | (4.5)% |
Revenue Breakdown
The revenue for the third quarter of 2024 was split into equipment sales and post-sale revenue as follows:
| Revenue Type | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Equipment Sales | $339 million | $386 million | (12.2)% |
| Post-Sale Revenue | $1.189 billion | $1.266 billion | (6.1)% |
Cost Structure
The costs associated with revenues for Q3 2024 included:
| Cost Type | Q3 2024 | Q3 2023 |
|---|---|---|
| Cost of Sales | $390 million | $435 million |
| Cost of Services | $617 million | $651 million |
| Research, Development & Engineering Expenses | $45 million | $52 million |
| Selling, Administrative & General Expenses | $370 million | $416 million |
Goodwill Impairment
Xerox recorded a non-cash goodwill impairment charge of approximately $1.058 billion in Q3 2024, significantly impacting net income and earnings per share.
Guidance for 2024
The company revised its full-year guidance as follows:
- Estimated Revenue Decline: ~10% in constant currency
- Adjusted Operating Margin: ~5.0%
- Free Cash Flow Guidance: $450 - $500 million
Balance Sheet Highlights
As of September 30, 2024, Xerox reported the following key balance sheet figures:
| Metric | Amount |
|---|---|
| Total Assets | $8.322 billion |
| Total Liabilities | $6.791 billion |
| Total Equity | $1.307 billion |
| Cash and Cash Equivalents | $590 million |
| Long-term Debt | $2.752 billion |
Conclusion
Despite facing challenges in equipment sales and a significant goodwill impairment, Xerox Holdings Corporation continues to focus on its reinvention strategy and improving its service offerings through acquisitions and operational efficiencies.
How Xerox Holdings Corporation (XRX) Makes Money
Revenue Streams
Xerox Holdings Corporation generates revenue through several primary streams, which include:
- Equipment Sales
- Post-Sale Revenue
- Xerox Financial Services (XFS)
Equipment Sales
In Q3 2024, Xerox reported equipment sales of $339 million, a decrease of 12.2% from $386 million in Q3 2023. Equipment sales accounted for approximately 22% of total revenue in Q3 2024.
Post-Sale Revenue
Post-sale revenue, which includes services, maintenance, and rentals, was reported at $1.189 billion in Q3 2024, down from $1.266 billion in Q3 2023, reflecting a decline of 6.1%. This segment represented 78% of total revenue in Q3 2024.
Xerox Financial Services (XFS)
XFS generated $88 million in revenue during Q3 2024, a decrease of 10.2% from $98 million in Q3 2023. This includes financing activities and leasing of Xerox equipment.
Financial Performance Overview
The following table summarizes key financial metrics for Xerox Holdings Corporation for Q3 2024 compared to Q3 2023:
| Metric | Q3 2024 (in millions) | Q3 2023 (in millions) | Change (%) |
|---|---|---|---|
| Total Revenue | $1,528 | $1,652 | (7.5) |
| Equipment Sales | $339 | $386 | (12.2) |
| Post-Sale Revenue | $1,189 | $1,266 | (6.1) |
| XFS Revenue | $88 | $98 | (10.2) |
| GAAP Net (Loss) Income | $(1,205) | $49 | NM |
| Adjusted Net Income | $34 | $77 | (55.8) |
| Free Cash Flow | $107 | $112 | (4.5) |
Cost Structure
Xerox's cost structure includes the following significant components:
- Cost of Sales: $390 million in Q3 2024, down from $435 million in Q3 2023.
- Cost of Services: $617 million in Q3 2024, down from $651 million in Q3 2023.
- Selling, Administrative, and General Expenses: $370 million in Q3 2024, down from $416 million in Q3 2023.
Profitability Metrics
Adjusted operating income for Q3 2024 was $80 million, reflecting an operating margin of 5.2%, compared to $68 million and 4.1% in Q3 2023. The following table provides a detailed view of profitability metrics:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Adjusted Operating Income | $80 million | $68 million |
| Adjusted Operating Margin | 5.2% | 4.1% |
| Gross Margin | 32.4% | 32.4% |
| Pre-tax (Loss) Income | $(1,087) million | $64 million |
Future Outlook
Xerox has lowered its revenue guidance for 2024, now expecting a decline of around 10% in constant currency. The adjusted operating margin guidance has also been revised down to approximately 5.0%. Free cash flow is projected to be in the range of $450 million to $500 million for the year.
In summary, Xerox's financial performance in 2024 reflects challenges in equipment sales and post-sale revenue, alongside strategic initiatives aimed at improving profitability and operational efficiency.
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Article updated on 8 Nov 2024
Resources:
- Xerox Holdings Corporation (XRX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Xerox Holdings Corporation (XRX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Xerox Holdings Corporation (XRX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.