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Xerox Holdings Corporation announced its 2022 first-quarter results. “Revenue was in line with expectations this quarter despite an increasingly volatile operating environment,” said Xerox Vice Chairman and CEO John Visentin. “Underlying demand for our products and services remains strong, as indicated by our growing backlog and growth in postsale revenue. Broad-based inflationary pressure and increased logistics costs from supply chain disruption resulted in an operating loss, but we expect to offset most of these cost increases over time with price actions and additional Project Own It savings. We remain focused on executing the strategic roadmap presented at our Investor Day in February and are committed to monetizing our investments in new businesses in ways that maximize shareholder value.”
Beginning in the first quarter of 2022, the Company made a change to its reportable segments from one reportable segment to two reportable segments – Print and Other, and Financing. The Financing segment reporting is partly the result of the stand-up of this business in 2021.
2022 Guidance
We are maintaining our revenue and cash flow guidance for 2022. Our guidance assumes that in the second half of the year supply chain disruption will begin to subside and return to office trends will continue to improve. Our free cash flow guidance excludes payments associated with this quarter’s one-time product supply contract termination charge.
• Revenue of at least $7.1 billion in actual currency.
• Free cash flow of at least $400 million.
• Return at least 50% of free cash flow to shareholders. Non-GAAP Measures
This release refers to the following non-GAAP financial measures:
• Adjusted EPS, which excludes Restructuring and related costs, net, Amortization of intangible assets, non-service retirement-related costs, and other discrete adjustments from GAAP EPS, as applicable.
• Adjusted operating (loss) income and margin, which exclude the EPS adjustments noted above as well as the remainder of other expenses, net from pre-tax (loss) income and margin.
• Constant currency (CC) revenue change, which excludes the effects of currency translation.
• Free cash flow, which is operating cash flow less capital expenditures
Financial Summary
• $1.67 billion of revenue, down 2.5 percent year-over-year or 0.7 percent in constant currency.
• GAAP (loss) earnings per share (EPS) of $(0.38), down $0.56 year-over-year, and adjusted (loss) per share of $(0.12), down $0.34 year-over-year.
• Pre-tax margin of (5.3) percent, down 840 basis points, and adjusted operating margin of (0.2) percent, down 540 basis points year-over-year.
• $66 million of operating cash flow, down $51 million year-over-year.
• $50 million of free cash flow, down $50 million year-over-year.
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