Xerox Releases Second-Quarter Results
Financial Results
- $34 million of operating cash flow from continuing operations, down $242 million year-over-year, and $15 million of free cash flow, down $245 million year-over-year
- Adjusted operating margin of 4.2 percent, down 820 basis points year-over-year
- $1.47 billion of revenue, a decrease of 35.3 percent year-over-year or 34.6 percent in constant currency
- GAAP earnings per share (EPS) from continuing operations of $0.11 per share, down $0.49 year-over-year, and adjusted EPS of $0.15, down $0.64 year-over-year
NORWALK, Conn.--(BUSINESS WIRE)--Xerox Holdings Corporation (NYSE: XRX) announced its second-quarter 2020 financial results.
“I am proud of our employees who did what was necessary during this unprecedented disruption to support our business and clients, especially those delivering essential services. While the bulk of our markets were fully or partially shut down during the quarter, our team’s financial discipline enabled us to deliver positive earnings per share and cash flow while continuing to invest in key areas of growth,” said Xerox Vice Chairman and CEO John Visentin. “No one can control or accurately predict what happens next. We have modeled numerous scenarios to ensure we have flexibility no matter how the pandemic continues to impact global business.”
Second-Quarter Key Financial Results - Continuing Operations
(in millions, except per share data) | Q2 2020 | Q2 2019 | B/(W) | % Change |
Revenue | $1,465 | $2,263 | $(798) | (35.3)% AC |
Gross Margin | 38.5% | 39.1% | (60) bps |
|
RD&E % | 5.2% | 3.9% | (130) bps |
|
SAG % | 29.1% | 22.8% | (630) bps |
|
Pre-Tax Income | $35 | $190 | $(155) | (81.6)% |
Pre-Tax Income Margin | 2.4% | 8.4% | (600) bps |
|
Operating Income - Adjusted1 | $62 | $280 | $(218) | (77.9)% |
Operating Margin - Adjusted1 | 4.2% | 12.4% | (820) bps |
|
GAAP EPS | $0.11 | $0.60 | $(0.49) | (81.7)% |
EPS - Adjusted1 | $0.15 | $0.79 | $(0.64) | (81.0)% |
(1) Refer to the “Non-GAAP Financial Measures” section of this release for a discussion of these non-GAAP measures and their reconciliation to the reported GAAP measures.
Business Highlights
- Launched “Make Now Work,” an integrated content marketing campaign that demonstrates how Xerox supports clients’ digital transformations and changing needs accelerated by COVID-19.
- Added and renewed several Fortune 500 and public sector clients such as HM Land Registry; Ministry of Citizens’ Services, BC Mail Plus; Veterans Affairs of Montana & Wyoming; and Allianz.
- Expanded the company’s software portfolio with the launch of the Xerox Team Availability App to support flexible workplace needs.
- Introduced the next-generation AltaLink® C8100/B8100 Series with ConnectKey® apps and automation that speeds digital transformation and supports workers in and out of the office.
- Announced the Adaptive CMYK+ Kit for the Xerox Versant®, an enhancement that allows print providers to offer higher value, embellishment solutions without a major investment.
- Stood up manufacturing operations for Xerox’s COVID-19 healthcare initiatives such as making disposable, low-cost FDA-cleared ventilators and hospital-grade hand sanitizer—an area where the company is doubling production in response to demand.