Xerox Holdings Corporation (NASDAQ:XRX) Q4 2022 Results Conference Call January 26, 2023 8:00 AM ET

Company Participants

David Beckel - VP, IR

Steve Bandrowczak - CEO

Xavier Heiss - EVP and CFO

Conference Call Participants

Ananda Baruah - Loop Capital

Erik Woodring - Morgan Stanley

Angela Jin - JP Morgan

Shannon Cross - Credit Suisse

Jim Suva - Citi

Operator

Welcome to the Xerox Holdings Corporation’s Fourth Quarter and 2022 Earnings Release Conference Call. [Operator Instructions]

At this time, I would like to turn the meeting over to Mr. David Beckel, Vice President of Investor Relations. Please go ahead, sir.

David Beckel

Good morning, everyone. I’m David Beckel, Vice President and Head of Investor Relations at Xerox Holdings Corporation. Welcome to the Xerox Holdings Corporation Fourth Quarter 2022 Earnings Release Conference Call hosted by Steve Bandrowczak, Chief Executive Officer. He is joined by Xavier Heiss, Executive Vice President and Chief Financial Officer. At the request of Xerox Holdings Corporation, today’s conference call is being recorded. Other recording and/or rebroadcasting of this call are prohibited without the express permission of Xerox.

During this call, Xerox executives will refer to slides that are available on the web at www.xerox.com/investor, and will make comments that contain forward-looking statements, which, by their nature, address matters that are in the future and are uncertain. Actual future financial results may be materially different than those expressed herein. At this time, I’d like to turn the meeting over to Mr. Bandrowczak.

Steve Bandrowczak

Good morning and thank you for joining our Q4 2022 earnings call. One year ago, it would have been difficult to predict the number and severity of obstacles we and many other companies would face in 2022. Supply chain conditions were challenged entering this year. In February, Russia invaded Ukraine and the humanitarian tragedy that disrupted supply chains further and led to the effective shutdown of our operations in those markets.

These and the aftereffects of the pandemic fueled an unprecedented level of inflation and currency dislocation. And Central Bank efforts to control inflation drove historic increases in interest rates. Finally, for Xerox, last year, we unexpectedly lost our dear friend and leader, John Visentin.

I am proud to report that we managed through these challenges taking significant corrective actions to match supply with demand and lower cost to offset inflationary headwinds.

For the year, revenue of $7.1 billion increased 1% in actual currency and 4.8% in constant currency. Our first year of constant currency revenue growth since our separation from Conduent. However, growth in revenues and cost savings were more than offset by broad-based inflationary pressure, resulting in a decline in operating profits and free cash flow. Still we delivered revenue and free cash flow above the revised guidance levels given last quarter. Throughout the year, our company and our people remained resilient and never lost focus on what is most important, providing value to our clients. I couldn’t be more proud of the effort our team expended in the fourth quarter to deliver the highest level of quarterly equipment revenue since 2019, an accomplishment that was instrumental in driving full year revenue and free cash flow above our revised guidance.