Xerox Releases Third-Quarter Results

NORWALK, Conn., Oct. 27, 2020 — Xerox Holdings Corporation announced its third-quarter 2020 financial results.

“The flexibility and financial discipline we have built in our company enabled us to increase earnings and cash flow sequentially. While we can’t reliably predict the ongoing economic impact of the pandemic, we are prepared to respond however events unfold and are committed to delivering positive cash flow and earnings in the fourth quarter. Investments in digital solutions and services are paying off as companies prepare for a more hybrid work experience that shifts seamlessly between the office and home,” said Xerox Vice Chairman and CEO John Visentin.

Third-Quarter Key Financial Results – Continuing Operations

 

 

(in millions, except per share data)

 

Q3 2020

 

Q3 2019

B/(W) YOY % Change YOY
 

Revenue

 

$1,767

 

$2,179

 

$(412)

(18.9)% AC

(19.7)% CC1

Gross Margin 36.8% 40.0% (320) bps
RD&E % 4.3% 4.6% 30 bps
SAG % 25.1% 23.4% (170) bps
Pre-Tax Income $119 $223 $(104) (46.6)%
Pre-Tax Income Margin 6.7% 10.2% (350) bps
Operating Income – Adjusted1 $131 $262 $(131) (50.0)%
Operating Margin – Adjusted1 7.4% 12.0% (460) bps
GAAP EPS $0.41 $0.68 $(0.27) (39.7)%
EPS – Adjusted1 $0.48 $0.80 $(0.32) (40.0)%

 

Business Highlights

  • Added or renewed contracts with Fortune 500 and public sector clients such as Aflac, Bell Canada, Mizuho Bank, the State of Illinois, the Texas Health and Human Services Commission, Purolator, the Union of Public Purchasing Groups in France and the Government of Bangladesh
  • Grew market share in production in the region Xerox serves and grew share in entry segments in both the Americas and EMEA. Maintained the top market share position in production in the Americas and EMEA, and maintained overall market share leadership for equipment sales revenue in the Americas, according to the most recent IDC 2
  • Awarded a contract from the Defense Advanced Research Projects Agency to develop the next phase of the Ocean of Things, its project to expand what scientists know about the seas
  • Expanded the company’s software portfolio with the launch of DocuShare® Go, a cloud-based, SaaS content management platform focused on the small and medium-sized business that automates how users organize, share, collaborate and back up business-critical content
  • Honored with several industry awards including “Best Innovation Project of the Year” by Health Tech Digital and named one of the “World’s Most Sustainably Managed Companies” by The Wall street journal
  • Established a new diversity, inclusion and belonging roadmap, focusing on areas where Xerox can make the biggest impact within the company and society, including a partnership with A Better Chance, a nonprofit dedicated to increasing education, access and opportunity for young people of color

(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.

(2)      Data Source: Xerox analysis of IDC WW Quarterly Hardcopy Peripherals Tracker, Q2 2020 using custom categories and segments.

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