Alongside its results for Q2 released yesterday (25 July), the business said it had also adjusted its operating income guidance to at least 6.5%, and free cash flow guidance to at least $550m (£427m).
Xerox said core business revenue in 2024 was expected to be roughly flat year-over-year in constant currency, consistent with its prior outlook and “reflecting growing demand for our products and services in the second half of the year”.
It said its revenue guidance change was “due primarily to incremental reductions in revenue associated with geographic simplification and the decision to exit the manufacturing of certain production equipment”.
For Q2, Xerox’s revenue was down by 10% in the period, or 9.6% in constant currency, to $1.58bn. Its gross profit was $520m, down 12.9% from $597m in Q2 2023, while its pre-tax income was $25m, compared to a pre-tax loss of $89m in Q2 2023. It had free cash flow in Q2 of $115m, up $27m year-over-year.
Xerox CEO Steve Bandrowczak said: “The comprehensive and strategic operating model changes implemented in Q1 caused a short period of disruption but are delivering the intended improvements in financial results.
“Adjusted operating income margin, free cash flow and revenue trajectory improved sequentially in Q2. Momentum in orders, enhanced sales operations and new product initiatives are expected to drive a return to revenue growth in the second half of the year.”
He added: “Q2 results give us confidence Xerox’s new operating model, which is more streamlined and closely aligned to the economic buyers of our products and services, is enabling the operating improvements required to deliver an incremental $300m of adjusted operating income over 2023 levels and a return to double-digit adjusted operating income margin by 2026.”
Following the publication of yesterday’s results, Xerox’s share price slumped by over 8%, standing at $10.82 at close (52-week high: $19.78, low: $10.28).
Alongside its Q2 results, Xerox revealed a series of new multi-function printers that it said use AI-assisted technology to securely automate repetitive and complex tasks.
Leveraging Xerox ConnectKey technology, the machines are pre-loaded with AI-enabled applications that enable users to quickly summarise documents, convert handwritten notes, and automatically redact sensitive documents.
The AltaLink 8200 series printers also include Xerox Adaptive Learning, which utilises AI-based algorithms to analyse usage patterns, learning from user behaviour, and automatically adjusts device settings to streamline workflows for everyday tasks.
