Xerox Reports a Challenging Q3 in Equipment Sales

Xerox Reports a Challenging Q3 in Equipment Sales

Xerox has revealed its financial performance for the third quarter of 2024, which has been a challenging quarter for equipment sales.

The Reinvention programme Xerox announced earlier is taking effect slower than expected. Consequently, total revenue amounted to $1.528 billion, marking a decline of 7.5% (7.3% in constant currency). GAAP figures showed a net loss of $1.2 million, or $9.71 per share, down by $1.3 million and $9.99 each year-on-year respectively.

Although Q3 results fell behind the company’s expectations, Steve Bandrowczak, chief executive officer at Xerox, believes the ongoing Reinvention initiatives will benefit Xerox in the long run. “Q3 results demonstrate no single quarter or performance metric in isolation defines our Reinvention. Operational improvements and enterprise-wide efficiencies are driving services signings momentum, improved decision-making and a sustainably lower cost base. These gains give us confidence Reinvention will enable long-term profitable growth as we continue this multi-year journey.”

Equipment sales and post-sale revenue were respectively $339 million and $1,2 billion, down by 12.2% and 6.1% each. The backlog reductions in 2023 constituted the main reason for the decrease in sales, while lower outsourcing service revenue was primarily responsible for the revenue downturn. Other factors, including delayed launch of products, lower improvements in sales force productivity, delayed installations due to the hurricane, and unfavorable mix, also partially caused the decline.

Following its decision to lower financial target in Q2, Xerox resolved to set its revenue guidance further down to a decline from 5%-6% to approximately 10%. As the company’s current revenue was lower than expected, Xerox abandoned its target to grow adjusted operating income $300 million by 2026. However, the company still expects to return to double-digit income margin throughout its Reinvention initiative.

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