Xerox (XRX) Q4 2025 Earnings Call Transcript

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Thursday, Jan. 29, 2026 astatine 8 a.m. ET

• Chief Executive Officer — Steven John Bandrowczak

• Chief Financial Officer — Charles "Chuck" Butler

Good morning, and convey you for joining our Q4 2025 net league call. On the Q3 call, I highlighted the macroeconomic challenges we are facing and the continued disruption associated with the tariff and authorities funding-related uncertainty. Macro headwinds proceed to persist, but we are cautiously optimistic that the concern trends are starting to improve. Revenue successful the 4th of $2.03 cardinal accrued astir 26% successful existent currency and 24% successful changeless currency. Reflecting the inorganic benefits of the Lexmont and IT Savvy Pro forma for these acquisitions, gross declined 9%. Adjusted operating income borderline of 5% was little twelvemonth implicit twelvemonth by 140 ground points.

Free currency travel was $184 million, a alteration of $150 cardinal versus the anterior year. And adjusted nonaccomplishment per stock of 10¢ decreased by 46¢ twelvemonth implicit year. For the year, gross of $7.02 cardinal accrued astir 13% successful existent currency, and 12% successful changeless currency. Excluding the benefits of the acquisitions, gross declined astir 8%. Adjusted nonaccomplishment per stock of 60¢ was $1.57 little twelvemonth implicit year. We generated $133 cardinal of escaped currency flow, which was $334 cardinal little twelvemonth implicit year. An adjusted operating income borderline of 3.5% was little twelvemonth implicit twelvemonth by 140 ground points.

While macro headwinds continued to measurement connected transactional people instrumentality sales, enactment picked up pursuing the extremity of the authorities shutdown. In addition, leafage measurement declines moderated and proviso usage stabilized. Encouragingly, we participate 2026 with a pipeline higher than this clip past year. With cancellations and renewal rates besides improved successful 2025. This gives america assurance successful improving underlying trends successful 2026. What does springiness america intermission is the caller spike successful DRAM prices, arsenic they began to interaction costs crossed storage, servers, endpoints, and networking equipment. Having the top effect connected our IT solutions business.

Considering this, we are taking steps to mitigate including moving to depletion models specified arsenic HPE GreenLake, Dell Apex devices and work models, providing extended attraction services for clients that determine to clasp their aged hardware. The interaction is expected to beryllium humble successful our people concern successful the archetypal fractional of the year, but based connected existent trends, we are expecting a larger interaction from the terms and availability position arsenic we determination into the backmost fractional of the year. Still, we stay assured successful our semipermanent prospects of our IT solutions business.