Xerox Holdings Corporation Q4 FY2025 earnings call

• Macro headwinds persist but business trends starting to improve. Revenue in Q4 $2.03 billion, up ~26% actual currency, 24% constant currency. • Execution of reinvention: Confident in complementary nature of businesses, developing route to market, leveraging AI in global business services. • Acquisition benefits: Progress with IT Savvy, unified brand, launch of Xerox Tri Shield 360 cyber solution; Lexmark integration showing benefits. • Balance sheet strength: Confident in driving profitability and delever, generated positive free cash flow, plan to use excess free cash flow to repay debt.

Print and other: Q4 equipment revenue was $485 million (up 23% as reported, 21% in constant currency; pro forma down ~10%), print post-sale revenue was $1.39 billion (up 25% as reported, 23% in constant currency; pro forma down 9%). IT solutions: Revenue increased 39% year over year; pro forma gross billings up 13%, total bookings up 8%; gross profit $36 million, gross margin 22.7% (up 610 basis points year over year).

• 2026 revenue expected >$7.5 billion (7% growth vs 2025). • Adjusted operating income range $450 million - $500 million (increase >$200 million vs 2025). • Free cash flow expected ~$250 million. • Announced special pro rata distribution of warrants to shareholders.

• Recent spike in DRAM prices impacting costs across IT solutions, print business. • Macro headwinds including tariffs, increased product costs, wind-down of production lines.

Q: Steve, is order-wise back to normal post government shutdown?

A: Expanding and growing, bringing more products/services into state fed local government, strategy working.

Q: Impact of memory in IT savvy business and print business?

A: Memory prices/availability uncertain, helping clients extend product life, move to as a service; print business first half of year little impact, second half to see impact.

Q: How prioritize moving pieces?

A: Reinvention strategy working, enterprise transformation office managing all work streams, culture important, AI center added.

Q: Protect against tough second half in IT services?

A: Sweat assets, move to software as a service, help clients navigate increase in memory prices.

Q: Operating cash flow to free cash flow bridge assumptions?

A: Higher EBITDA driven by operating income increase, less finance receivables.

Q: Cross-selling progress and sales motions?

A: Leverage existing relationships, bring broader portfolios; selling IT services to Lexmark print client vs legacy Xerox client leverage relationship, bring broader portfolios.