Xerox reports fourth-quarter revenue down 7.9 percent

Xerox Holdings Corp. announced 2021 fourth-quarter and full-year results and guidance for 2022. The company reported $1.78 billion of revenue in Q4, down 7.9 percent year-over-year, or down 7.4 percent in constant currency; $7.04 billion of FY revenue, up 0.2 percent year-over-year, or down 1.4 percent in constant currency.

John Visentin, CEO, Xerox

“Our team’s focus and dedication drove improved results in 2021 despite ongoing challenges caused by the pandemic and global supply chain disruptions,” said John Visentin, Vice Chairman and CEO, Xerox. “Our ability to increase free cash flow, while investing for sustainable, long-term growth and improving our operations, highlights the quality of our team and strategy. We stood up Xerox Financial Services, CareAR and Innovation (PARC), while laying the foundation for growth in print, digital solutions, and IT services. We look forward to sharing more detail about our long-term plans and strategies for monetizing our investments in growth at our Investor Day in February.”

Fourth-Quarter Key Financial Results:

(in millions, except per share data)

Q4 2021

Q4 2020

B/(W)
YOY

% Change
YOY

Revenue

$1,777

$1,930

$(153)

(7.9) % AC (7.4) % CC1

Gross Margin

32.9%

36.2%

(330) bps

RD&E %

4.2%

3.9%

(30) bps

SAG %

23.8%

22.8%

(100) bps

Pre-Tax (Loss) Income1

$(711)

$103

$(814)

NM

Pre-Tax (Loss) Income Margin

(40.0)%

5.3%

NM

Operating Income – Adjusted2

$86

$184

$(98)

(53.3)%

Operating Margin – Adjusted2

4.8%

9.5%

(470) bps

GAAP (Loss) Earnings per Share1

$(3.97)

$0.36

$(4.33)

NM

Earnings Per Share – Adjusted2

$0.34

$0.58

$(0.24)

(41.4)%

Full-Year Key Financial Results:

(in millions, except per share data)

FY 2021

FY 2020

B/(W)
YOY

% Change
YOY

Revenue

$7,038

$7,022

$16

0.2 % AC (1.4) % CC1

Gross Margin

34.1%

37.4%

(330) bps

RD&E %

4.4%

4.4%

SAG %

24.4%

26.4%

200 bps

Pre-Tax (Loss) Income1

$(475)

$252

$(727)

NM

Pre-Tax (Loss) Income Margin

(6.7)%

3.6%

NM

Operating Income – Adjusted2

$375

$464

$(89)

(19.2)%

Operating Margin – Adjusted2

5.3%

6.6%

(130) bps

GAAP (Loss) Earnings per Share1

$(2.56)

$0.84

$(3.40)

NM

Earnings Per Share – Adjusted2

$1.51

$1.41

$0.10

7.1%

2022 Guidance

The company expects to grow revenue in 2022, the company, assuming supply chain and pandemic-related disruptions persist through the first half of the year. The company also expects to generate at least $400 million of free cash flow, inclusive of incremental cash investments in new businesses.

XEROX HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME (UNAUDITED)

Three Months Ended
December 31,

Year Ended
December 31,

(in millions, except per-share data)

2021

2020

2021

2020

Revenues

Sales

$

653

$

773

$

2,582

$

2,449

Services, maintenance and rentals

1,069

1,101

4,235

4,347

Financing

55

56

221

226

Total Revenues

1,777

1,930

7,038

7,022

Costs and Expenses

Cost of sales

476

541

1,862

1,742

Cost of services, maintenance and rentals

691

658

2,662

2,533

Cost of financing

26

32

111

121

Research, development and engineering expenses

75

75

310

311

Selling, administrative and general expenses

423

440

1,718

1,851

Goodwill impairment

781

781

Restructuring and related costs, net

(1

)

29

38

93

Amortization of intangible assets

13

22

55

56

Transaction and related costs, net

18

Other expenses, net

4

30

(24

)

45

Total Costs and Expenses

2,488

1,827

7,513

6,770

(Loss) Income before Income Taxes & Equity Income(1)

(711

)

103

(475

)

252

Income tax (benefit) expense

(36

)

28

(17

)

64

Equity in net income of unconsolidated affiliates

1

2

3

4

Net (Loss) Income

(674

)

77

(455

)

192

Less: Net income attributable to noncontrolling interests

1

Net (Loss) Income Attributable to Xerox Holdings

$

(675

)

$

77

$

(455

)

$

192

Basic (Loss) Earnings per Share

$

(3.97

)

$

0.37

$

(2.56

)

$

0.85

Diluted (Loss) Earnings per Share

$

(3.97

)

$

0.36

$

(2.56

)

$

0.84