Xerox Faces Revenue Decline in FY 2024

Xerox Faces Revenue Decline in FY 2024

Xerox reported a revenue decline for both the fourth quarter and full year of 2024 as the company navigates ongoing market challenges. While restructuring efforts and cost reductions helped improve margins, weaker demand for printing hardware and services contributed to the downturn. The company remains focused on strengthening its core print business and expanding its market reach, particularly through its pending acquisition of Lexmark.

Revenue and Profit Performance

For the full year 2024, Xerox posted revenue of $6.22 billion (USD), a 9.7% decline compared to the previous year. Fourth-quarter revenue also dropped 8.6% year-over-year to $1.61 billion (USD). These declines were driven primarily by lower equipment sales and post-sale revenue, reflecting challenges in print market demand.

Despite the revenue drop, Xerox improved its adjusted operating margin to 6.4% in the fourth quarter, up 100 basis points from the prior year. The company attributed this to ongoing cost-cutting efforts under its “Reinvention” strategy. However, Xerox reported a full-year net loss of $1.32 billion (USD), mainly due to a $1 billion (USD) non-cash goodwill impairment charge.

Printing Business Performance

The print segment, a key area for Xerox, continued to struggle with weak hardware demand and shifts in customer purchasing behavior. Equipment sales fell by 16.7% for the year, while post-sale revenue—comprising supplies, managed print services, and document outsourcing—declined 7.4%. The company cited the phase-out of certain production print models and ongoing geographic restructuring as contributing factors.

In an effort to regain momentum, Xerox is focusing on optimizing its product and service portfolio, strengthening channel partnerships, and expanding its managed IT services. The company has also implemented AI-driven pricing tools and productivity enhancements to improve efficiency.

Lexmark Acquisition: Expanding the Print Business

A major strategic move for Xerox in 2024 was the announcement of its planned acquisition of Lexmark, a global print solutions provider. The acquisition, expected to close in the second half of 2025, is intended to strengthen Xerox’s position in the print market by diversifying its portfolio and expanding its global footprint.

Lexmark brings significant manufacturing capabilities, a presence in the Asia-Pacific region, and a broader distribution network. Xerox anticipates that integrating Lexmark will enhance its profitability, with projected cost synergies of over $200 million (USD) within two years. The acquisition is also expected to be immediately accretive to Xerox’s adjusted earnings per share and free cash flow.

Outlook for 2025

Looking ahead, Xerox projects low single-digit revenue growth for 2025, supported by improvements in print sales, a full year of IT services revenue from its ITsavvy acquisition, and the benefits of its restructuring initiatives. The company aims to further optimize its operations, reduce costs, and expand digital and managed services.

With the Lexmark acquisition on the horizon, Xerox is betting on a stronger and more balanced print business to counteract market headwinds and position itself for long-term growth.

Related:

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• Xerox Reports a Challenging Q3 in Equipment Sales
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