Shares in Xerox fell sharply (13%) on the morning of 28 January as the company confirmed a constant currency drop of 9.5% in revenues for the year, marginally better than the firm’s Q3-issued guidance of a 10% decline for the year.
Revenues for the Norwalk, Connecticut-headquartered firm came in at $6.22bn (£5bn) down from $6.89bn, with a pre-tax loss for the year of $1.21bn, compared with a $28m loss in 2023. The 2024 figure includes a non-cash goodwill impairment charge of $1bn.
Adjusted operating margins for the year slipped from 5.6% to 4.9%.
Sales for Xerox’s largest business unit, Print & Other, were down 9.7% in the full year, whille profits reduced by 26% from $360m to $268m.
The gloomy year-on-year results come in part to a dismal first three quarters to the year, where Xerox was consistently forced to downgrade expectations.
The firm’s Q4 results show a more positive picture: while revenues were down 8% on Q4 2023 to $1.61bn, the company’s pre-tax loss in the quarter fell from $88m to near-breakeven at $4m, and its adjusted operating margin grew from 5.4% to 6.4%.
Q4 2024 might represent the turning point of Xerox’s tough year: posting guidance for a “low single-digit growth in constant currency” in 2025, the company expects an adjusted operating margin of at least 5%.
Steve Bandrowczak, chief executive officer at Xerox, said it had been a “critical year” for the firm following the implementation of its ‘Reinvention’ strategy in January 2024.
The reinvention – involving a 15% reduction in headcount – has thus far involved cutting legacy machines, like the iGen and Nuvera lines, from the company’s portfolio, and striking deals with manufacturers like Screen to add fresh product lines, as well as focusing on its Global Business Services organisation.
In late 2024, the firm also made two major acquisitions. ITSavvy, a US-based provider of IT products and services, joined Xerox for $400m, and the pending acquisition of colour printer manufacturer Lexmark in a $1.5bn deal.
Xerox’s forward guidance does not include any associated impacts from the Lexmark acquisition, which is expected to close in H2 2025.
“2024 was a critical year as we implemented a new operating model and structural process improvements to position Xerox for long-term, sustainable growth,” said Bandrowczak.
“We continue to see steady progress in our Reinvention, reflecting the resilience of our team and initiatives taken to-date.
“In 2025, we expect to build on changes made in 2024 in order to focus on executing our Reinvention strategy, realizing the benefits of the ITsavvy and pending Lexmark acquisitions, and strengthening our balance sheet.”
