Xerox’s first quarter results for 2025 were met with a positive market reaction, as management highlighted the early benefits of its multi-year reinvention program and successful integration of ITsavvy. The company pointed to improved operational efficiency and cost reductions, with CEO Steve Bandrowczak noting, “Balanced execution, the benefits of last year’s reinvention, and ongoing initiatives resulted in an improved revenue trajectory.” Notably, equipment installations saw double-digit growth, driven by strong channel partner activity and the global launch of the PrimeLink product, while operating expenses declined at a double-digit rate excluding one-time items.
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Xerox (XRX) Q1 CY2025 Highlights:
- Revenue: $1.46 billion vs analyst estimates of $1.46 billion (3% year-on-year decline, in line)
- Adjusted EPS: -$0.06 vs analyst estimates of -$0.04 ($0.02 miss)
- Adjusted EBITDA: $72 million vs analyst estimates of $165.8 million (4.9% margin, 56.6% miss)
- Operating Margin: 0.1%, up from -7.1% in the same quarter last year
- Market Capitalization: $678 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Xerox’s Q1 Earnings Call
- Ananda Baruah (Loop Capital): Asked about macroeconomic signals from large customers and SMBs. President John Bruno explained that while there is volatility, no significant demand cancellations have occurred, only some delays in spending decisions.
- Ananda Baruah (Loop Capital): Requested context on ITsavvy integration. CEO Steve Bandrowczak highlighted acceleration in cross-selling, pipeline growth, and collaboration between legacy Xerox and ITsavvy teams, describing the opportunity as “very exciting.”
- Erik Woodring (Morgan Stanley): Questioned the rationale for maintaining annual guidance amid tariff uncertainty. CFO Mirlanda Gecaj explained that guidance will remain until tariffs are finalized, emphasizing a commitment to existing targets while providing transparency on potential impacts.
- Erik Woodring (Morgan Stanley): Asked about the margin outlook for IT Solutions. Bandrowczak and Bruno said they aim for double-digit operating profit, leveraging scale and lower SG&A, with margins expected to improve as cross-selling expands.
- Samik Chatterjee (JPMorgan): Probed the drivers behind the post-sale revenue decline. Bruno cited lower print volumes and supplies, but expects stabilization as new equipment installations drive future post-sale activity.
Catalysts in Upcoming Quarters
Looking ahead, our analysts will be closely tracking (1) progress on integration and synergy realization from the ITsavvy and Lexmark acquisitions, (2) the pace and effectiveness of tariff mitigation strategies, and (3) continued growth and profitability improvements in IT Solutions and print equipment installations. Execution against reinvention savings targets and cross-selling milestones will also be key indicators of strategic progress.
Xerox currently trades at $5.38, up from $4.41 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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