The Xerox Board of Directors has approved an update to its dividend policy in anticipation of the closing of the Lexmark transaction, reducing the quarterly dividend to $0.025 per share ($0.10 per share annualized). Accordingly, Xerox announced the declaration of a quarterly dividend of $0.025 per share on Xerox Holdings Corporation Common Stock. The dividend is payable on July 31, 2025, to shareholders of record on June 30, 2025.
In December 2024, Xerox announced a reduction to its dividend in conjunction with the planned acquisition of Lexmark, reflecting the prioritization of debt repayment following acquisition close. Since then, yields on Xerox publicly traded debt have risen, resulting in an increased cost of capital and placing greater value on the reduction of debt. Further, an acceleration in the expected timing of the Lexmark transaction close and ongoing tariff and trade-related volatility have put a premium on flexibility.
“Consistent with our previously stated capital allocation priorities to reduce leverage post-closing, we believe reducing our dividend creates greater financial flexibility to deploy cash in the most accretive manner,” said Mirlanda Gecaj, chief financial officer. “The dividend remains an important component of our capital allocation policy as we continue to optimize our allocation framework ahead of the Lexmark acquisition close.”
Xerox reiterates its 2025 guidance1 and continues to expect the Lexmark transaction to be de-levering upon transaction close and immediately accretive to adjusted2 earnings per share and free cash flow 2. The company continues to expect synergies associated with the Lexmark transaction of at least $238 million, realizable within two years. The combined run-rate cash flows of Xerox and Lexmark, along with cash derived from future synergies and forward flow proceeds, are expected to result in significantly improved EBITDA 2 and free cash flow 2, enabling the reduction of debt toward the Company’s targeted 3x gross debt leverage level. Xerox will re-evaluate its capital allocation priorities, including the amount of capital returned to shareholders, as gross debt leverage is reduced.
The board also declared a quarterly dividend of $20.00 per share on the outstanding Xerox Holdings Series A Convertible Perpetual Preferred Stock. The dividend is payable on July 1, 2025, to shareholders of record on June 15, 2025.
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1) 2025 guidance includes an expectation of revenue growth of low single-digits in constant currency2, Adjusted 2 Operating Margin of at least 5% and Free Cash Flow 2 of $350 million to $400 million. Guidance does not include any impact from the pending acquisition of Lexmark. Guidance further excludes potential adverse effects of tariff and trade policy, and the resultant impact on the macroeconomic outlook for the second half of the year. |
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2) Refer to the “Non-GAAP Financial Measures” sections of our first quarter 2025 Press Release and Presentation for a discussion of these non-GAAP financial measures and their reconciliation to the most directly comparable financial measures calculated and reported in accordance with GAAP, available at www.xerox.com/investors. |
