Xerox 2025 Q1 Earnings Net Loss Improves 20.4%
Friday, May 2, 2025 3:02 am ET
45min read Revenue
Xerox's revenue for the first quarter of 2025 experienced a 3.0% decrease, reaching $1.46 billion compared to $1.50 billion in the same quarter of the previous year. The revenue was generated from several segments: sales contributed $557 million, while services, maintenance, rentals, and other sources added $900 million to the total.
Earnings/Net Income
Xerox managed to reduce its net loss to $90 million for Q1 2025, marking a 20.4% improvement from the $113 million loss in Q1 2024. The loss per share also improved to $0.75, down from $0.94 in the previous year. This amelioration reflects positively on the company's earnings performance.
Price Action
The stock price of xerox has edged down 0.69% during the latest trading day, has climbed 4.33% during the most recent full trading week, and has tumbled 10.14% month-to-date.
Post-Earnings Price Action Review
After reviewing the post-earnings price action, the analysis reveals a generally negative trend in Xerox's stock price following its earnings reports. Although there is a moderate chance of a positive reaction in the short term, such as the 3-Day win rate for revenue at 46.40%, the probability diminishes over longer periods. The 30-Day win rates for revenue, net income, and EPS are notably low, suggesting medium-term negative impacts on the stock price. Revenue-related events have shown a maximum return of -0.14% over 30 days, indicating a slight negative effect in the medium term. Net income has a maximum return of -0.58% over 10 days, pointing to a more pronounced negative reaction in the short term. EPS-related events have demonstrated a maximum return of -1.59% over 30 days, further indicating a negative impact in the medium term. Overall, these metrics suggest a bearish sentiment among investors post-earnings.
CEO Commentary
"In a quarter marked by increasing levels of macroeconomic and trade policy uncertainty, our team remained focused on what we can control: the balanced execution of our Reinvention and delivering client success," said Steve Bandrowczak, Chief Executive Officer at Xerox. He highlighted that improved sales productivity and the successful integration of ITsavvy contributed to revenue growth and positive adjusted operating income, despite it being the seasonally lowest quarter. Bandrowczak expressed confidence that the Reinvention strategy is enhancing operating predictability and sales momentum, positioning Xerox favorably for long-term growth.
Guidance
Xerox anticipates low single-digit revenue growth in constant currency and an adjusted operating margin of at least 5.0%. The company projects free cash flow to be between $350 million and $400 million. This guidance excludes potential impacts from the pending acquisition of Lexmark and acknowledges the unpredictable nature of tariff and trade policies, which may affect the macroeconomic outlook in the latter half of the year. The company expects minimal tariff-related impacts in the second quarter and is actively working with suppliers to mitigate potential cost increases.
Additional News
Xerox is making strategic moves with the acquisition of Lexmark, which is expected to close in the second quarter of 2025 following key regulatory approvals. This acquisition aims to enhance Xerox's capabilities in color printing and document solutions. The integration of ITsavvy has already shown a positive impact on revenue growth and operational efficiencies. Investors are observing these developments closely as Xerox seeks to leverage synergies from these acquisitions to drive future growth. Additionally, Xerox continues to focus on its Reinvention strategy to streamline operations and improve profitability, positioning itself for long-term success in the evolving market landscape.
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