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1. Company Snapshot

1.a. Company Description

Xerox Holdings Corporation, a workplace technology company, designs, develops, and sells document management systems and solutions in the United States, Europe, Canada, and internationally.It offers workplace solutions, including desktop monochrome, and color and multifunction printers; digital printing presses and light production devices, and solutions; and digital services that leverage workflow automation, personalization and communication software, content management solutions, and digitization services.The company also provides graphic communications and production solutions; and IT services, end user computing devices, network infrastructure, communications technology, and a range of managed IT solutions, such as technology product support, professional engineering, and commercial robotic process automation.


In addition, it provides FreeFlow a portfolio of software solutions for the automation and integration to the processing of print job comprises file preparation, final production, and electronic publishing; XMPie, a personalization and communication software that support the needs of omni-channel communications customers; DocuShare, a content management platform to capture, store, and share paper and digital content; and CareAR, an enterprise augmented reality business.Further, the company sells paper products and wide-format systems.The company sells its products and services directly to its customers through its direct sales force, as well as through independent agents, dealers, value-added resellers, systems integrators, and e-commerce marketplaces.


Xerox Holdings Corporation was founded in 1906 and is headquartered in Norwalk, Connecticut.

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1.b. Last Insights on XRX

Xerox Holdings Corporation's recent performance was negatively impacted by a decline in earnings, with a quarterly loss of $0.06 per share versus the Zacks Consensus Estimate of a loss of $0.05. Revenues also missed estimates, decreasing year-over-year. The company's core print business continues to decline, with lower managed print services revenue and a shrinking legacy annuity base, indicating ongoing demand weakness. Additionally, Xerox announced a reduction in its dividend, the second cut in six months, which may have contributed to the decline in investor confidence.

1.c. Company Highlights

2. Xerox's Q3 2025 Earnings: A Mixed Bag

Xerox Holdings Corporation reported revenue of $1.96 billion for the third quarter of 2025, representing a 28% increase in actual currency and 27% in constant currency, driven primarily by the Lexmark and ITsavvy acquisitions. On a pro forma basis, revenue declined approximately 8%, with core revenue down roughly 5%, mainly due to macroeconomic uncertainty and policy-related issues affecting equipment purchases. The company's adjusted operating income margin was 3.3%, down 190 basis points year-over-year, while adjusted earnings per share came in at $0.20, a decrease of $0.05. The actual EPS was significantly higher than the estimated $0.04.

Publication Date: Nov -24

📋 Highlights
  • Revenue Growth from Acquisitions:: Q3 2025 revenue surged 28% ($1.96B) driven by Lexmark and ITsavvy acquisitions, though pro forma revenue fell 8% due to macroeconomic and policy pressures.
  • Adjusted Operating Margin Decline:: Adjusted operating margin dropped to 3.3%, a 190-basis-point year-over-year decrease, impacted by lower gross profit despite $24M higher free cash flow ($131M).
  • Lexmark Synergies Expansion:: Identified $50M in additional Lexmark synergies, raising total synergy forecast to $300M, with reinvention savings expected to exceed $1B.
  • Segment Performance:: Print segment equipment sales declined 16% pro forma (Lexmark -30%), while IT Solutions revenue/gross profit rose over 150% from ITsavvy integration.
  • Debt and Guidance:: Pro forma gross debt leverage at 6.1x LTM EBITDA, with $4.4B total debt; 2025 guidance targets $150M free cash flow and 3.5% adjusted operating margin, aiming for 3x leverage in medium term.

Segment Performance

The Print and Other segment experienced a decline in equipment sales, with pro forma equipment sales down 16% for Lexmark, legacy Xerox equipment sales down 14%, and Lexmark's equipment sales down 30%. In contrast, the IT Solutions segment saw revenue and gross profit increase by over 150% year-over-year, driven by the inclusion of ITsavvy. This significant growth in the IT Solutions segment is a positive indicator for Xerox's diversification strategy.

Synergy Opportunities and Cost Savings

The Lexmark integration is progressing well, with $50 million of additional synergy opportunities identified, bringing the total expected Lexmark-related synergies to over $300 million. Xerox expects to realize significant cost savings from its reinvention strategy, with total savings expected to exceed $1 billion. The company has increased its Lexmark synergy forecast to at least $300 million, indicating a strong potential for long-term value creation.

Valuation and Outlook

Xerox's valuation metrics present a mixed picture, with a P/E Ratio of -0.34 and an EV/EBITDA of 47.82, indicating that the market is pricing in significant growth expectations. The company's guidance for 2025 is $150 million in free cash flow, and analysts estimate revenue growth of 11.1% for the next year. With a gross debt leverage target of 3x last 12 months EBITDA in the medium term, Xerox is focused on deleveraging its balance sheet. The company's strategic priorities remain unchanged, with a focus on executing the Lexmark integration, driving profitable growth in IT Solutions, and maintaining financial discipline.

3. NewsRoom

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Geode Capital Management LLC Sells 45,046 Shares of Xerox Holdings Co. $XRX

Dec -02

Source: defenseworld.net

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Xerox Target of Unusually High Options Trading (NYSE:XRX)

Nov -27

Source: defenseworld.net

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Xerox Appoints Chuck Butler as Chief Financial Officer

Nov -19

Source: businesswire.com

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Xerox Launches Unified Cybersecurity Solution for SMBs Powered by Palo Alto Networks and Cyber Insurance from The Hartford

Nov -19

Source: businesswire.com

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Campbell & CO Investment Adviser LLC Sells 23,070 Shares of Xerox Holdings Co. $XRX

Nov -18

Source: defenseworld.net

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Xerox (XRX) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates

Nov -11

Source: zacks.com

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Xerox (XRX) International Revenue Performance Explored

Nov -11

Source: zacks.com

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Xerox Holdings Stock Declines 2.6% Since Q3 Earnings Release

Nov -07

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.83%)

6. Segments

Print and Other

Expected Growth: 4.6%

The 4.6% growth in Print and Other from Xerox Holdings Corporation is driven by increasing demand for digital printing, expansion in emerging markets, and strategic partnerships. Additionally, the company's focus on innovation, cost savings initiatives, and growing adoption of its software and services offerings also contribute to this growth.

FITTLE

Expected Growth: 8.5%

FITTLE from Xerox Holdings Corporation's 8.5% growth is driven by increasing demand for digital transformation, IT services, and cloud-based solutions. Strong partnerships, strategic acquisitions, and investments in innovation also contribute to growth. Additionally, the company's focus on operational efficiency, cost savings, and restructuring efforts have improved profitability.

7. Detailed Products

WorkCentre Multifunction Devices

A range of multifunction devices that combine printing, copying, scanning, and faxing capabilities

Xerox AltaLink Multifunction Devices

High-performance multifunction devices with advanced security features and mobile printing capabilities

Xerox VersaLink Multifunction Devices

Compact and affordable multifunction devices with wireless connectivity and mobile printing capabilities

Xerox Phaser Printers

High-quality printers designed for high-volume printing with advanced security features

Xerox Digital Presses

High-end digital printing presses for commercial printing applications

Xerox IT Services

Managed IT services for document management, cybersecurity, and infrastructure support

Xerox Document Management Software

Software solutions for document management, workflow automation, and content management

Xerox Business Process Outsourcing

Outsourcing services for document management, customer communication, and back-office operations

8. Xerox Holdings Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Xerox Holdings Corporation is medium due to the presence of alternative document management solutions and digitalization of documents.

Bargaining Power Of Customers

The bargaining power of customers is high due to the presence of large enterprise customers who can negotiate prices and terms.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the document management industry, including high capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of established competitors in the document management industry, leading to a competitive pricing environment.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 54.66%
Debt Cost 3.95%
Equity Weight 45.34%
Equity Cost 12.04%
WACC 7.61%
Leverage 120.57%

11. Quality Control: Xerox Holdings Corporation passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
ISG

A-Score: 5.6/10

Value: 4.5

Growth: 2.7

Quality: 5.5

Yield: 6.0

Momentum: 9.5

Volatility: 5.7

1-Year Total Return ->

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TaskUs

A-Score: 5.3/10

Value: 5.1

Growth: 8.2

Quality: 5.5

Yield: 0.0

Momentum: 8.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Hackett

A-Score: 5.1/10

Value: 4.1

Growth: 5.1

Quality: 6.7

Yield: 5.0

Momentum: 1.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Xerox

A-Score: 4.7/10

Value: 9.8

Growth: 2.3

Quality: 3.0

Yield: 10.0

Momentum: 0.5

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
CSP

A-Score: 3.6/10

Value: 7.6

Growth: 2.8

Quality: 4.2

Yield: 1.0

Momentum: 4.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Unisys

A-Score: 3.5/10

Value: 9.8

Growth: 2.2

Quality: 4.8

Yield: 0.0

Momentum: 1.0

Volatility: 3.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.75$

Current Price

2.75$

Potential

-0.00%

Expected Cash-Flows