NORWALK, Conn.--(BUSINESS WIRE)--Xerox Holdings Corporation (NYSE: XRX) today announced 2020 fourth-quarter and full-year results and guidance for 2021.
“Times of adversity require working in unison, and I couldn’t be prouder of the way our team came together. We put our strategy to the test in 2020, delivering positive earnings per share and free cash flow, while returning capital to shareholders and continuing to invest in our future. The team’s discipline allowed us to turn on a dime, tightly controlling expenses while steadfastly supporting clients,” said Xerox Vice Chairman and CEO John Visentin. “Though the impact of the pandemic continues in 2021, we expect to return to growth this year as we increase the breadth of offerings and reach new customers in existing and new businesses.”
Fourth-Quarter Key Financial Results - Continuing Operations:
| (in millions, except per share data) | Q4 2020 | Q4 2019 | B/(W) YOY | % Change YOY |
| Revenue | $1,930 | $2,444 | $(514) | (21.0)% AC (22.3)% CC1 |
| Gross Margin | 36.2% | 41.6% | (540) bps | |
| RD&E % | 3.9% | 3.8% | (10) bps | |
| SAG % | 22.8% | 20.9% | (190) bps | |
| Pre-Tax Income | $103 | $336 | $(233) | (69.3)% |
| Pre-Tax Income Margin | 5.3% | 13.7% | (840) bps | |
| Operating Income - Adjusted1 | $184 | $411 | $(227) | (55.2)% |
| Operating Margin - Adjusted1 | 9.5% | 16.8% | (730) bps | |
| GAAP EPS | $0.36 | $1.17 | $(0.81) | (69.2)% |
| EPS - Adjusted1 | $0.58 | $1.33 | $(0.75) | (56.4)% |
| (in millions, except per share data) | FY 2020 | FY 2019 | B/(W) YOY | % Change YOY |
| Revenue | $7,022 | $9,066 | $(2,044) | (22.5)% AC (22.7)% CC1 |
| Gross Margin | 37.4% | 40.3% | (290) bps | |
| RD&E % | 4.4% | 4.1% | (30) bps | |
| SAG % | 26.4% | 23.0% | (340) bps | |
| Pre-Tax Income | $252 | $822 | $(570) | (69.3)% |
| Pre-Tax Income Margin | 3.6% | 9.1% | (550) bps | |
| Operating Income - Adjusted1 | $464 | $1,192 | $(728) | (61.1)% |
| Operating Margin - Adjusted1 | 6.6% | 13.1% | (650) bps | |
| GAAP EPS | $0.84 | $2.78 | $(1.94) | (69.8)% |
| EPS - Adjusted1 | $1.41 | $3.55 | $(2.14) | (60.3)% |
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(1) Refer to the “Non-GAAP Financial Measures” section of this release for a discussion of these non-GAAP measures and their reconciliation to the reported GAAP measures.
New Businesses to Deliver Continuous Growth
Xerox announced its intention to stand up its Software, Financing and Innovation organizations as separate and distinct businesses by 2022.
- The Software business will include a growing portfolio comprised of: DocuShare®, a cloud-based content management system; XMPie, software that supports multichannel marketing campaigns; and CareAR, an augmented reality business Xerox acquired in late 2020. CareAR has signed agreements with a number of major companies.
- Xerox Financial Services (XFS) will become a global payment solutions business, offering leasing for Xerox and third-party technology and office equipment. This will expand the company’s customer base, create cross-selling opportunities and provide more leasing options for small and medium-sized businesses.
- The Palo Alto Research Center (PARC) has been central in advancing the company’s innovation portfolio including 3D Printing and Digital Manufacturing, IoT Sensors and Services, and Clean Technology. Xerox installed its first 3D printer for a client in December, and IoT solutions are at work with the U.S. Defense Advanced Research Projects Agency and other clients.
In the coming months, Xerox will establish a $250 million corporate venture capital fund to invest in start-ups and early and mid-stage growth companies aligned with the company’s innovation pillars and targeted adjacencies. The corporate venture capital fund will further enhance the company’s existing innovation ecosystem and drive growth through investment, commercial partnerships and co-development of new technologies.
2021 Guidance
Despite the high-level of economic uncertainty, the company expects continued progress on its strategic initiatives as projected in its 2021 financial guidance:
- Revenue of at least $7.2 billion in constant currency or approximately 2.5 percent growth
- Operating cash flow from continuing operations of at least $600 million and free cash flow of at least $500 million
About Xerox
Xerox Holdings Corporation (NYSE: XRX) makes every day work better. We are a workplace technology company building and integrating software and hardware for enterprises large and small. As customers seek to manage information across digital and physical platforms, Xerox delivers a seamless, secure and sustainable experience. Whether inventing the copier, the ethernet, the laser printer or more, Xerox has long defined the modern work experience. Learn how that innovation continues at xerox.com.
