“Resilient demand and improvements in supply chain conditions drove solid Q4 growth in revenue and profits,” said Xerox CEO Steve Bandrowczak in the print giant's latest financial update. Fourth quarter revenue was $1.94 billion, up 9.2% year-over-year.
“2022 was a challenging year as revenue and profitability was impacted by an uncertain and unpredictable macroeconomic environment, which included increasing inflation and higher interest rates, supply chain challenges, currency disruption and a war in Ukraine,” Xerox said, releasing its fourth-quarter and full-year results.
“Despite these challenges, fourth quarter 2022 revenue grew in actual and constant currency for the first time since the second quarter of 2021, due to strong demand for our products and services and improved product supply and mix.
“Equipment sales revenue of $554 million in fourth quarter 2022 increased 44.3% in actual currency and 49.0% in constant currency as compared to the prior year. Equipment sales revenue growth was driven by better availability of product across all categories and regions, particularly for higher margin A3 devices in the Americas region.
“The sequential growth in equipment sales revenue mirrored the decline in equipment backlog, revealing strong order activity amid an uncertain macroeconomic backdrop. Equipment sales revenue outpaced installations this quarter due to favourable product mix and the benefits of recent pricing actions. Installation growth was strongest for mid-range products and colour A4 multifunction machines. Growth in constant currency this quarter was driven by IT Services, which includes the acquisition of Powerland, and growth in supplies and paper. Contractual print services revenue growth accelerated modestly this quarter in constant currency, aided by recent pricing actions and the acquisition of Go Inspire.”
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| "Solid Q4 growth": Steve Bandrowczak CEO Xerox |
Steve Bandrowczak, chief executive officer at Xerox, said: “Resilient demand and improvements in supply chain conditions drove solid Q4 growth in revenue and profits.
"Our employees and partners worked hard to deliver the highest level of revenue since the start of the pandemic, and I am proud of the focus and dedication which led to these results. As macroeconomic uncertainty extends through this year, we will continue working alongside our clients to develop and deploy essential workplace solutions and services, positioning Xerox for long-term growth in profitability.”
Financial Summary
Q4 2022
Revenue of $1.94 billion, up 9.2 percent year-over-year or up 13.9 percent in constant currency.
GAAP earnings per share (EPS) of $0.74, up $4.71 year-over-year. Prior year Q4 GAAP EPS includes an after-tax non-cash goodwill impairment charge of $4.38 per share.
Adjusted EPS of $0.89, up $0.55 year-over-year.
Adjusted operating margin of 9.2 percent, up 440 basis points year-over-year.
Operating cash flow of $186 million, down $12 million year-over-year.
Free cash flow of $168 million, down $14 million year-over-year.
FY 2022
Revenue of $7.11 billion, up 1.0 percent year-over-year, or up 4.8 percent in constant currency.
GAAP loss per share of $2.15, up $0.41 year-over-year. Both the current year and prior year include after-tax non-cash goodwill impairment charges of $2.54 and $4.08 per share, respectively.
Adjusted EPS of $1.12, down $0.39 year-over-year.
Adjusted operating margin of 3.9 percent, down 140 basis points year-over-year.
Operating cash flow of $159 million, down $470 million year-over-year.
Free cash flow of $143 million, excluding a one-time product supply termination charge, down $418 million year-over-year.
