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Sep 30, 2024
Xerox Q3 2024 Earnings Report
Xerox's Q3 2024 financial performance was marked by revenue decline, significant net loss due to a goodwill impairment charge, and improved adjusted operating margin driven by Reinvention initiatives.
Key Takeaways
Xerox reported a challenging third quarter with a revenue decline of 7.5% to $1.53 billion. The company experienced a GAAP net loss of $1.2 billion, primarily due to a $1.0 billion after-tax non-cash goodwill impairment charge. Despite revenue headwinds, adjusted operating margin improved by 110 basis points year-over-year, driven by Reinvention initiatives.
Revenue decreased by 7.5% year-over-year to $1.53 billion, or 7.3% in constant currency.
GAAP net loss was $(1.2) billion, or $(9.71) per share, including a $1.0 billion after-tax non-cash goodwill impairment charge.
Adjusted operating margin increased by 110 basis points year-over-year to 5.2%.
2024 revenue guidance lowered to a decline of around 10% in constant currency.
Xerox
Xerox
Forward Guidance
Xerox lowered its 2024 revenue guidance to a decline of around 10% in constant currency, adjusted operating margin guidance to around 5.0%, and free cash flow guidance to a range of $450 to $500 million.
Challenges Ahead
- Revenue guidance was lowered to reflect additional reductions in non-strategic revenue and lower-than-expected equipment sales.
- Adjusted operating income margin guidance was lowered primarily to reflect the reduction in revenue guidance.
- Free cash flow guidance was lowered to reflect the after-tax impact of lower adjusted operating income margin guidance.
- No longer expect to grow adjusted operating income $300 million above 2023 levels by 2026.
- Expect growth in adjusted operating income and a return to double-digit adjusted operating income margin over the course of our Reinvention.