Xerox Holdings Corp. (NASDAQ:XRX) reported its fiscal fourth-quarter results on Thursday.
The document management and technology services provider posted a 25.7% year-over-year revenue growth to $2.03 billion, missing the analyst consensus estimate of $2.11 billion.
On a constant currency basis, revenue rose 23.6%.
The company posted an adjusted loss of 10 cents per share, falling short of analysts' expectations for a 10-cent profit.
The equipment segment sales rose 23.4%. The post-sale revenue, which includes services, consumables, and financing, edged up 26.5%.
Profits And Margins
Gross margin contracted by 250 basis points to 28.6%.
Equipment gross margin dropped 1,540 basis points to 12.0%, while post-sale margin rose by 130 basis points to 33.7%.
Adjusted operating income fell to $102 million from $104 million a year ago, with the operating margin narrowing by 140 basis points to 5.0%.
Xerox ended the quarter with $512 million in cash and equivalents.
The company generated $208 million in operating cash flow during the quarter, down $143 million from a year ago.
It produced a free cash flow of $184 million during the quarter, down $150 million from a year earlier.
Steve Bandrowczak said Xerox continued to execute with discipline despite a challenging macro environment marked by ongoing government uncertainty and rising memory costs.
He noted that the Lexmark integration is progressing ahead of plan, with teams delivering measurable synergies.
He added that these efforts drove better-than-expected operating income and free cash flow in the quarter.
As demand trends start to stabilize, he said Xerox is seeing new opportunities emerge, resulting in a larger pipeline than a year ago.
Outlook
Xerox expects 2026 revenue above $7.5 billion. Wall Street analysts projected a revenue of $7.899 billion.
The company projected an adjusted operating income of $450 million-$500 million and free cash flow of close to $250 million.
XRX Price Action: Xerox Holdings shares were down 1.29% at $2.29 during premarket trading on Thursday. The stock is trading near its 52-week low of $2.10, according to Benzinga Pro data.
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