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Jun 30, 2024
Xerox Q2 2024 Earnings Report
Xerox's financial results improved sequentially, driven by reinvention initiatives.
Key Takeaways
Xerox's Q2 2024 results show sequential improvements in adjusted operating income margin, free cash flow, and revenue trajectory, driven by strategic operating model changes. The company has revised its full-year outlook, lowering revenue and adjusted operating income guidance while reiterating its three-year adjusted operating income improvement target.
Revenue was $1.58 billion, a 10% decrease (9.6% in constant currency).
GAAP net income was $18 million, or $0.11 per share, up from the previous year.
Adjusted operating margin was 5.4%, a decrease of 70 basis points year-over-year.
Free cash flow was $115 million, an increase of $27 million year-over-year.
Forward Guidance
Xerox has lowered its 2024 revenue guidance to a range of -5% to -6% in constant currency, adjusted operating income guidance to at least 6.5%, and free cash flow guidance to at least $550 million. The company maintains its three-year target of $300 million of incremental adjusted operating income above 2023 levels and a return to double-digit adjusted operating income margin by the end of 2026.
Positive Outlook
- Growing Print demand
- Growth in Digital and IT Services in the second half of the year
Challenges Ahead
- Reduction in certain non-strategic revenue
- Lower sales of paper
- Lower financing income
- Reinvention actions
- Rising freight and product costs
Historical Earnings Impact
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Avg. Return Before/After Earnings
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