Xerox (XRX) 24 Oct 232023 Q3 Earnings call transcript

Welcome to the Xerox Holdings Corporation Third Quarter 2023 Earnings Release Conference Call. After the presentation, there will be a question-and-answer session. [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.

everyone. morning, Good Vice Xerox Beckel, Head Investor of I'm Corporation. President at Holdings Relations David and Welcome Holdings Chief the Call to Xerox hosted Release XXXX by Conference Earnings Steve Bandrowczak, Executive Corporation Officer. Third Quarter Officer. by Xavier Vice Chief He is Heiss, joined President Executive and Financial

request the today's call At Xerox. expressed recorded. permission of is call this Holdings rebroadcasting and/or of recording of Xerox are being Corporation, the conference Other prohibited without

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

over to Mr. At I'd this time, Bandrowczak. meeting like the to turn

Good QX you morning, call. our for earnings joining XXXX thank and

I to I today's Middle by acknowledging get Before in tragic quarter's East. call this the like start unfolding events the to would results,

are our their Our and thoughts victims clients prayers employees, with partners. local and the include which families, and

are We a resolution. peaceful hoping all for

of quarter. billion currency successful for operating XX year-over-year higher adjusted another EPS adjusted Adjusted higher a in year of QX, free quarter in was the in X.X% operating of Free currency. was to constant resulted was points. priorities margin X.X% by in $X.XX, in year-over-year. And million our EPS revenue $X.XX million flow flow. prior the compared $X.XX of quarter, $XXX strategic cash Summarizing use basis $XX growth the and cash and results X.X% declined actual income, In execution of

well decline demand for certain business. declines actions services, by in place results associated top strategic put in decline a our products as in revenue, post-sale relatively were revenues simplify as in stable While quarter's environment I'm never a to reflects report declines low-margin largely categories The our anticipated. revenue pleased revenue with line and cyclical offset in to this

costs and income higher ability grew to the year-over-year associated recent purposeful profitability. on and levels QX, to opportunities of efforts, operating in is low with revenue a we revenue with bearing in operating Despite cost once basis. in a simplification This reduction increases prices income business reduction due again of product growth margin avoidance offset a our

will our As to years. in drive discuss, expect over simplification few the continued next I we profit incremental business improvement profit and of substantial margin the levels

Free in QX change cash and increased million flow flow will free year-to-date. million in approach its cash FITTLE due a years many amounts funding and part was which improved incremental year-over-year than new to originations, for meaningful we flow more strategy by Growth has to to in expect come. $XXX $XXX cash free in of generate

strategic As imperative a always, remain Xerox. client success, success profitability our priorities: for focused we Client strategic returns. is on shareholder and X

offset solve challenging in cost to with ability higher helps through share Our and services. share needs workplace wallet but productivity-enhancing market effects clients' productivity capital of of labor incremental the us rising inflation, most only gain client and not expand print, solutions constraints

Vendor Transformation as breadth Xerox related in technology both for Assessment IDC of to solutions adjacent Print quarter, and Marketscape's was recognized workplace leader Worldwide transformative print. This a our to

advanced compete renewal Our we and business. us as a new advantage provide for solutions distinct

print ongoing the consolidation renew. higher for of despite of revenue with demand XXX% the Year-to-date, adapt a service document currency, as contracts demand advanced This double existing arrangements. such led clients signings print engagement to traditional more as are and in digital services customer majority digital companies hybrid as grew digits is processing services. quarter service constant intelligent growth year-to-date, Increasingly, replacing contract permanent rate renewed workplace or by in and replacement

the Elem August, we Additive took the Solutions, Moving cost relationship Print to business, efficiency of our our of services to Peak we expansion capabilities of And our structure. our Solutions, profitability. improve Partners, of we cost our actions and focus provision affiliate in our enabling operations actions ADDiTEC. print, improve leasing Investment with and flexibility greater announced to on additional to base, FITTLE's independent HBS while In in In September, and the core an digital QX, IT of XD simplify include the around to sold dealers. network Both services. of

count for few Affiliates, the shares areas market decision return shareholders million this Finally, roughly believe equity Carl, over EPS resulting weeks of will for shares with and be return in in to as I The was disposal these and which create our time with the equity which consistent significant the allows with shareholder XX shortly. Management transformation, XX%. deploy while earnings returns. capital repurchased shares a repurchase The shareholder Icahn associated overhang normally will is growth Directors providing of in discuss reduction owned by and accretive, open share type transaction greater Board expected associated A of ago, transaction of of an previously value holders around the reduction expected states. the allocation market to to cash substantial shareholders. highest philosophy, is our participation the of preventing we

our our simplifying Our laying examples on of which print, to digital for an in of our forward. operations of and ways even IT of been Those our enablers critical priorities core are in business QX we refocus significant groundwork have business. call, X we transformation actions were our strategic more direction the services. the instrumental On moving provided

And which optimal sharing we with with strategic to refer a define year, have plan, transformation analyzed strategic outside preliminary opportunities multiyear past the we Reinvention. path. For our as experts, strengths the framework competitive for are investors help of we model, to business market today, the an and

our is resulting simplification in the the which business, to of let associated document cash including First, flow we years. managing and headwinds we what not secular AI, with core traditional while are take me print does Reinvention Reinvention company to expect to business strong of power profits continue operational the and of advantage favorable with Xerox. many strategic macro print. Reinvention of define associated generating for means abandoning mean of our a repositioning a the digitalization trends, workflows comprehensive

Reinvention means capabilities top the our most core. cash growth new solid direct probable and free combined believe with needs. returns clients' workplace most to requires reinvestment operations, productivity and print in building and profit, shareholder addressing a on structural sustainable of flow challenging of Board the in path capabilities redesign a to selected essential Management

Reinvention Xerox print and shift it is The from provider. workplace technology a today service unparalleled to facilitate power productive has we tomorrow. of to and workplace an and with to ensure goal the evolving The is Xerox's ultimate in technology leader of evolved,

X of There are the primary components Reinvention.

a shifting direct but is a model. more geographic a markets selective stronger certain a revenue when of foundation First going in appropriate, and approach which optimization, optimization This lower from to to our in distribution result approach initially, partner-led more and, to profitable go-to-market is forward. provide which to taking entails revenue expected operations grow

pricing Second products the profitability of Through a offerings product our will offering of hybrid streamline we focus address needs Reinvention, greater the services and is optimization the of delivery models. the on internal and maximize and that our product evolving allow workplace. to

models deliver experience business. touchless to pricing decisioning, a improve pursuing more effective our new and and client we'll faster We will more when introduce to satisfaction, simplify and consumer-like renewal

our enable the offerings structural will IT, in component third unlocking of an footprint, the supply end-to-end geographic our pricing of optimization functions operating efficiencies chain. business models organizational and simplification and turn across the support Reinvention: business, product The of and

ability not investment requires it result is While growth not and provider services-led, more organic profitable simply magnitude in and transition a to select streamlined to to the software-enabled Reinvention is organization, of time workplace a opportunities. solutions. transition Equally Xerox' become if of important, so, advanced over in is A cost-cutting program. expected this a more inorganic

years. print of win, In in to such are opportunities grow Reinvention income and print as and is markets, expected substantial IT services the as investments in to to total, next clear few adjacent high-growth small These clients margin will self-funded where generate path be and managed we as a expected well share to income wallet our services. have for and digital and improvement over operating services midsized target

to resulting least adjusted deliver at XXXX, an to improvement of adjusted million, margins. income expect return income operating double-digit operating By to $XXX in we XXXX

improvement high rates with in a growth, drive investments diversified to are to of growth. exposure inclusive more this expected markets which greater of is revenue Importantly, mix with

We taken are more operating phasing specifics of in future the actions will provide as and income specific quarters. improvements

It To our are we has instilled execute Reinvention. to in improvement. continuous culture company Own operating Project this of in a successfully recap, this ability confident

and and the digital than transformation client Our delivering of right in profitability, management of brand, strategy and team capable play Xerox magnitude history supporting the of our improve and managed will this more win long-term free relationships give us flow innovation growth. is dividend, to our with And Reinvention IT for progresses. not only services. will strong rewarded be reposition company investors the as but cash sustainable a

I Xavier. hand will over to now

good Thank you, Steve, everyone. morning, and

in mentioned, a profitability The revenue revenue, manage As revenue. despite ability amid in decline income quarter in our this delivered growth in in Steve income another and margin in revenue decline quarter. components. to revenue a large declined the due year mainly in year equipment driven was Equipment noncontractual prior relative the post-sales backlog in prior transactional reduction a modestly by quarter adjusted operating we year-over-year to of part evidencing fluctuation to decline

were offset of supply by partially basis actions, profit consecutive quarter margin. improvement to pricing expense and Fuji in margin termination XX of related benefit improved points We the from efficiency the with XX improvement associated on profitability. a by first Turning cost costs the over than actions. Gross quarter, to in pricing prior point growth more offset operating in delivered basis year-over-year mainly royalties. due Increases year on chain product headwind our increases

assets offset due basis actions. from Adjusted to improvement along other were sales operating the lower expenses efficiencies of higher and of margin profit, non-financing and basis with expense. lower interest million increased Adjusted bad of debt close pricing and lower year-over-year X.X% expenses, year-over-year by effect $XX business net gains gross to operating were the higher points non-core from ongoing and XX revenue of XXX as compensation points

changes remeasurement a Adjusted of to certain period in with same the tax effect compared the year, benefit and in current assets as tax associated X.X% tax the in year the quarter period. largely unfavorable of in last the returns deferred prior the of XX.X% well to tax rate tax nonrecurring as uncertain year due positions release was

EPS $X.XX Affiliates. of was per the sale quarter a impact EPS Adjusted of this million by increase the higher driven no GAAP $X.XX prior There $X.XX due in quarter year, non-cash tax on charge share higher prior from of in mainly were with $X.XX Carl, third Icahn rate. in an the than shares than non-core after-tax the EPS assets business the and recent or of was $X.XX $XXX impairment goodwill associated to repurchase year, of prior year. the lower an

Let me flow now review more revenue in and details. cash

actual due declined were offset backlog AX to our ongoing year. to with the Equipment million higher sales of stabled experienced lower in revenue in decline as in work-from-home geographic Entry The due as of normalization mix this EMEA. true Turning geographic among activity This revenue. currency. with the quarter, X% on well QX to mix in backlog quarter AX prior currency constant product outpaced prices. X% year, or equipment in reductions reduction in of trend conditions, installations equipment due $XXX trends. unfavorable product, effect recent in the revenue reflect favorable to in prior which Consistent the again by EMEA effect was year-over-year particularly solution

billion revenue actual year-over-year currency. currency of declined in X% in and X% $X.X constant Constant

actions, paper in most was As of royalties on IT impacted a and polling items, on PARC transactional in noted, on sales were by financing by decline termination post the reduction Wholesale resulted Fuji device specific lower effect strategic lower of driven placements. low-margin revenue sale notably in significant mainly the revenue. a cyclical decline further which

IT which in declined in reduction backlog substantial decline and services Revenues generally and by clients, was slightly have quarter given macroeconomic regions a print from constant services the by in print currency. for outlook. declined affected a macroeconomic office The growth digital in contractual more on more pressure weakening pronounced been digital revenue actual offset as the prior and than services both production clients. Geographically, EMEA decline managed year in was EMEA

items. revenue revenue than aforementioned part an sales post increase of in offset transactional a was In equipment decline to by more sales in due lower the in the cyclical Americas,

$XX Inspire. million non-core higher driven benefit of of inventory. of driven increase of net of in in Let's the activity were resulting cash mainly a use cash of quarter of asset partially were in higher by by was business the and in a cash was offset Operating QX our working of current in the cash $XX million assets of the $XX Go now higher $XXX origination. Working flow a of source million use year-over-year. to source million year $XX million Free proceeds HPS, year in work-flow Improvements and mainly capital in of acquisition a XXXX. cash due of compared to was associated by use a of use in assets QX, with was to review cash program an in cash with Investing by a year-over-year of source $XX the $XXX in cash compared flow. $X $XX a million prior Finance this QX financing million prior million quarter compared reflecting improvement flow reduction a activity cash a of prior from million to capital. year, $XXX sale million, cash

Financing million $XX of activity a million. quarter, around this consumed which cash $XX includes million of dividend on totaling secured payment debt of $XX

secured facility near is debt bridge used were which addition, repurchase Carl and to be an the we the This proceeds to a of alternative from expected $XXX loan Icahn replaced Affiliate. instrument. In facility, share in term with million

financing origination strategy focus third-party FITTLE of in non-captive segments. dealers Captive which were reflection captive-only X%, its grew year-over-year. towards recent product fell a non-Xerox includes origination vendor, XX while the solutions. to return points, Turning on channel FITTLE X% change to volume up origination,

existing more FITTLE receivables finance of roughly currency, were receivable runoff expected, HPS X% in funding QX originations. of of actual reflecting sequentially down finance XX% the on As than FITTLE

sales we FITTLE to finance receivable income a commission its base. in receivable FITTLE $X and XXXX. the revenue FITTLE higher as in by offset from As closer asset associated year-over-year fees normalize result and strategy, balance finance QX finance flat change asset decline by other in of was the the billion of receivable expect finance with were to lower decline

million, $X primarily up Segment million due lower profit $X debt FITTLE bad commissions. was and lower year-over-year for expense intercompany to

we further finance as indicated, forward bad receivable previously expense book to expect improvement our decline. going debt As

revenue point driven year-over-year, post benefit in profit partially X% profit Other fell X% QX, and lower and Other in in the offset revenue. Print segment by quarter resulting Print a price revenue. year-over-year lower segment XX actions, year to sales by improved around and of basis expansion versus the primarily cost margin prior by

finance non-leasing debt maintained over bonds, the QX borrowing balanced few and ladder loan unsecured bond business. $X.X Total QX asset structure. years. equivalents around the Turning cash. facility. to cash, billion to the cash capital We of maturity repurchase the asset-backed securitization, We support of ended the remaining under Roughly our with approximately $XXX restricted with finance debt share asset, attributable $X.X consists $X.X of remaining million of our senior debt associated the next credit our of billion billion and with outstanding bridge a

Finally, will guidance. address I

unchanged revenue constant at Our at currency. low-single-digit full flat-to-down outlook year for remained

see the momentum for faster-growing Americas in and services our digital our and in We demand to product continue services. for particularly

we X a past the softening demand equipment reflecting European mild in a services seen of weakening our months, for macroeconomic print and condition. However, market, in have

year of a result, expect at range. the full revenue guided As now end in our to lower we come

the reduction to margin due expected in but to expect a X% benefited post-sale we in profitable slight cost revenue installed. affecting we year revenue adjusted face the ongoing our be to opportunities. the other we Despite in the margins of of comparing in prior of outlook, QX of mix backlog for as our unprofitable year-over-year program events high sequentially, efficiency margin year. the Further, revenue QX. a maintain significant and or improve reminder, operating difficult unusual revenue to in persist QX a full year headwind X.X% equipment As reduction highly guidance of a operating QX some to to low is AX an from successful implementation due lower prior will equipment

significant Steve, our in income by expect improvement along noted in we as As margin Reinvention. progress we years operating future

least guidance flow cash at free our of million. maintained $XXX we Finally,

remain macroeconomic approach balance In on a summary, to we with to backdrop operating we as costs. rigorous deliver full guidance dynamic a our year managing track

being So operating revenue multiyear mix, of the a laid which year. return including is Q&A. the we profit in to and for one work will the open coming improvement share profit a details now margin, double-digit line for in We'll

Loop [Operator Capital. Instructions] And Baruah from our from Ananda comes first the line of question

to a you're degree with of guess Reinvention. picture Can bigger picture, of and bigger which it services I stuff to component get bunch I into talk I any near-term into. running referred the bit think of, and Steve, So the to getting just there's services guess or start as a it enabled to a start to software regards revenue you software of Reinvention? I'll I'll sort and with kind led. call I and guess, like you

Sort we rev I Reinvention? of about of what's I any of maybe you talked growth can market, sense of there the looks that areas on may itself like give the the you going market But not in lend be like. super guess, then rate like comments software of sort us the potential know might making of about And that the and what today. to future looks aware already services TAM, with rev

of perspective. with I sense guys a a guess what shooting against from get we start least I'll at that. So you are TAM

question. Yes. Great

make So of let comments. a me couple

strategically on looking forward. of really that around business, areas comprehensive So simplification generate at that. where accelerate geographic as partner-led We're our right, does those generate demand looking first product and a a which think distribution offering models will in optimization, mean? areas pricing, of revenue of use we sell we standpoint, which and more focus going about direct reposition all, areas, indirect, in at What focusing our and from a structural more how both we Reinvention simplification versus can us subscale

our from our hire-to-retire And about enabling both all each entire those across business then operating to business order-to-cash processes. one of at simplification efficiencies, really looking really technology as well thinking in end-to-end and as

embedded offerings augmented our You've heard go reality. in and model we AI terms seeing not me we've productivity, our significant, differentiation forward. of talk where service about, in and service but we're only as And

have really to So it from about delivering And as income the operating income And margins. we operating million We get back drive double-digit I that level, go important foundation, we income double-digit right, and right? that. we was back that operating a margins, of obviously, getting said to high $XXX by thought to XXXX. talked

really services, already And the services? we what very some in this about in see What help driving and products see drive solutions. XXXX? clients verticals And terms see we of that see on the in how inside We've for health need have significantly, we expand you in of clients inside the started? and how our new like that in I've into wallet while about we we acceleration productivity areas services, do rate outcomes talked in focusing of run client a our IT working going firms care, terms our of we specifically obviously digital for we share do been areas success, do of on and talked and with we many see now, law -- education, existing specific

renewals. -- rate we renewal over results we're And XXX% in our that We strategy seeing it, seeing our about revenue are talked renewal of now. direct rate

IT services seeing of as secular it that new some with of I'm either means very the endpoints, topping security and with that as them are terms That and clients like products help client I'm we're services digital driven decline and in which we're mean? our by success talking now some up that of services, about and renewals, as about productivity. well in specifically led does What in talking RPA services

in like existing areas chain, a comments? rate So in order areas run our improvement those supply also and of areas service productivity process. it's process delivery, other like Xavier, like that's given accounts. us to us any terms revenue our both a in running growing and given and ordering cash start inside

Yes.

the revenue here. Ananda, shift hi, we on the expecting -- comment just to are side Just revenue or

the strong we still is the here. and trend market print profit margin large. generate At on same and us, on you company know print. time, foundation there. for know growth on we is have business that lot services So cash The developing started The of a business the digital IT the a services of

look large It billion. to $XXX at digital we IT above from data in growth. X% market, are between XX% billion, market. And $XX this tons the services is we of is range in service this the when

do present, where into of Reinvention revenue end revenue shift or the the is trajectory ongoing only to from give company, be the are print not a the the relying revenue what that at will company also planning we day, print targeting still on with print. drive only to will company, the -- So improve print-centric a of higher market but

about, I revenue all you super That's talked softer it may quarter you that. all a the the thought into the been the That's appreciate going of have sounds really that follow-up, guess, was as context. Europe than September quarter. sort of helpful I helpful. guys quick little environment like a then And from

from. for not that first the heard we've You're us that ones

So that kind to seems of foundational. be

the not got year-over-year. growth been of for XX any You year you But And have than impact than you sort would that that's the grew So expansion, stronger, I margin year-over-year it other the leverage if I points quarter? guys softer Europe guess, from that scenario. meaningful softer guess, the was basis softer saw revenue? revenue? Anything anticipated growth, during margins the

comment Ananda, your no, No, are here. fair

been has here. than Europe a bit worse were what little we So thinking

time, However, we that you and implemented since It DNA the have It, the Own company. know still same Own is within at

base flexible revenue a adjust call there. some well being but and as We being cost are the to we type also costs, targeting have the created of of in able within what we selective

Simple I we give call of example, business. margin erosion on type saw is an on, I example certain non-cyclical, that, contractual you paper. not

endpoint is solution services. in one Another IT

profitability. revenue like after going in interested only with aren't no We

balanced there. this is very driven revenue have ] investment, mindset driving project. ROIC on on or IRR on model our call team we by discipline it, And As return a our based strict execution [ know you

I paper, very a after because So market deal here. paper paper no is an not are we example, willing, can and go here quote to was margin it with what as different the to before, it

our Stanley. next Woodring Morgan from Erik of And question line the from comes

on is with third first a in Eric. you now Steve. the the kind about year, it's Maybe were bit change a but of captive more talking this for a question for Maya This little Can portfolio FITTLE? Earlier strategy solution. to parties, talk we about expanding financing reverting back to

So impacts is question how my that your receivables program. first factoring

was And have sell correct, once I that that But likely. second, a follow-up. business, likely longer financing seems a given becoming the thought it's could there you would Is for less that that a And be FITTLE no business. sale? FITTLE captive now

Yes.

So in previous I let think, and I -- calls. me it, stated

strategy the to changed use With to it balance we and And and were capital the sheet sheet with were we longer of look business year, no going us was for Xerox rate interest last no changing the going that business. we environment, to business. leasing leverage balance sources palatable mid-to-late in this other help for longer us our to for

pricing leasing it our value driving However, extremely in it to field the is do field bundle and that component with ability have leasing. we the a big the be to important of able was in that

that so so balance HPS being PEAC, and we sheet. and strategically we to leverage And our them don't turn using -- we are and

target would would and were You're been operation up have trying it that absolutely have ago, potentially, years been to business, Two growing sale. for that right. potentially we an

an reversed We business. have It our just we're that. going supporting Xavier? back business internal captive not now to is expanding and beyond

Yes. No.

there the it -- that other looking is here. at You than said the that there rather our an offer focus on support make business Steve, business pure we separated it, a to as have Maya, it

are current be what Steve being our make at at look I interest end this the when balance spotted look making if be, to time, decision this flow there. it the us and balance also supporting more of This day, you free at until than cash the driving here. the decrease And flow at of this XXXX, the Reinvention generated situation, X are that expecting over we transaction, as we current current building for to you I ] rate down benefit on the time. -- currently sheet, billion. And the the finance cash the up -- years ago, we billion [ mentioned if will commented $X.X the receivables well, free being going As generated maybe will environment $X case

of and decision the This it. at So end business balance a made us years develop helping X our day, captive ago. the currently is have sheet decision the be from of hurting this good to and was point view, we kept ability without

Got it.

of in digital there if those in TAM huge licensing is a is while restrictions place Asia this business overwhelmingly But try offset a service So still Printing and with market. maybe we untapped and Xerox is take print-focused. that step for a some now. secularly back. just pressures, IT declining And I realize you're that's no to into leaning

market? of Asia So there? the And why not go after are the to entry barriers what kind

couple I things. different think a there's of

stated the grow I've our in existing we the EMEA today can couple our with I accounts both of existing Americas all, and region a in times, think of region. First here TAM in

And so already have what to we've of got grow tremendous execute on a amount just and today. opportunity we

significant even grow our our if execute, believe there's differentiation, actually can print. at a a product we growth I differentiation and inside opportunity share we If share, TAM. you services take our And of look

on cash that and capital build it and capital Even you expand we supply markets, a It's believe go Americas expand could to infrastructure to outlay expand We Asia you margin, with if focus capital build into we significant the partner-led operating go have grow other EMEA expand that we got the margins. into you and significantly, have, got you've those parts. we in logistics have build and faster we've in as a to still in that do into go strategy, and the the not have already if outlay. are chain, region. go with significant shared the around you've To go go market, to spare go to that you

And the Chatterjee our next Samik from from comes question JPMorgan. line of

if OpEx? on Reinvention. should of essentially on is understand, just to you in Can And you're X or there the on sold us And about be I or sort you for goods how start relative million of we much thoughts a I gross have these of guess profit linearity think expecting can should terms we sale profitability the changes how to cost benefit take go-to-market an help through couple of long a how thinking improvement of improvement or improvement the years? on this I any when the $XXX timing Project how next and $XXX the of follow-up. impact million this around the of of about

Samik. for are movement and a question Thanks, asking And unveil more Yes. the strategy strategic a pleased we this because to is on really Reinvention thanks here. for on this company,

of we until point as to like profit XXXX. mentioned a profitability operating view, we are margin the from we that double on So it, have expecting roughly

I would give the we profitability number here. be will look trajectory a can, that journey wanted plant to model at So the beyond But you years say, a will like continue it X XXXX. so and seed you and of

We're expecting in of the be benefit majority OpEx. to vast the

in cost or some company key look the in where Some sold, not it of rewire like go-to-market. be this at will of only mainly we the be is and of will entirely function function but the because it like a goods will OpEx

best of back does the heard the this very what [ At where is are is all ] we have looking execution we leaving a day, there, we representing should disciplined of have not model simplification. geo but what concept does here? simplification end go-to-market should present. the that geo balanced Again, on geographies countries It in the mean is? of to IRR about at way You be

will flow there. OpEx So benefit significantly. And free the a expecting, key be with obviously, FITTLE of we to up combined go driver are cash

be mentioned are we well, it as self-funded. initiative expecting As this we to

the are company not to we more expecting So here. leverage further

it, you with the Carl we transaction As know completed just Icahn. have

which we is improvement are have modeled looking and on acquisition. journey accretive million now the opportunistic, we profit we this But that will the trajectory, that $XXX are mentioned operating We create same when at a profit always the here. on value-accretive at time,

really on a insights got rethinking it, the I just you're sort transaction Is they base on And the you're of in structural it seeing those particularly Any calling something to out what devices else please? mention did pushing what their budget the printer basis some customers. your a nature of or think Got I more in my from or year? of to for wanted hearing EMEA you're and you follow-up, the front? installed understand consideration are it. and business, out. next Or there, sales weakness is

Yes, let me start.

our drive to their and services. renewal if rate so And could got about strategy, in what headwinds we've is talk clients and from well higher. that's around we're existing headwinds today, we why macro solutions success hearing you in interest that the that we're I think expand aligns really and that's seeing our labor, products and about we're clients through rates, why And with our so around around inflation, seeing, and our

So verticals. Service, driving inside things digital Robotics in like productivity a specific terms like very things a of workflow as

So are around of with some helping and one, able like challenges for these be of cost drive is more helping we around and things capital, a with productivity, to challenges help clients, aligning looking our macro the where offset trends service model. we're from higher them to labor, as what the hearing subscription number them they're

into are clients well our bring them actually offset playing into help Xavier? some new can that and All the of those to services challenges. of products very we

we also Yes, we of but of a there, view, softening. -- as a is little are more Samik, mentioned the decline point it not the a well, than one -- more what really expecting, so on back From or not a point, we This are are only softening Europe, business. the seen have a macro bit your here. there. paper What we full to but -- seeing quoting I to

been Asian paper, putting This of on paper Xerox. benefit to market, there. have currently as revenue. is we is this business for where low very prices business The paper like a single-digit But pressure paper is business, from a flow scarcity certainly on just to to more we later. and clarify, see not not the some last year able good with year, compared This significant of this number in also

or highly updates little that business increasing, this I on bit customer the equipment. we high-end will and obviously monitoring, element but the in concerned evolution Not other This invest that is little what for on The market on seen we at something GDP the this currently are on also but trend highly production capacities are rate quarter. share, have to, provide the our is this recently ability business. And a a stage, is say, more the connected the and would have capital is bit monitoring to due the this we access production we to to scarcity high-end during -- customer. interest

this, the have expect be of here profitability guidance guidance. describing flow to that free I'm maintained cash in compared we revenue our will we to and everything that that also included we All quarter. able deliver is And prior

to the conclude like to program program. today's Steve the further back for does session question-and-answer remarks. hand This of any I'd

in you Balanced conference that and our resulted towards strategic We in this is profitable Xerox. sustainable future to progress step call our improvement listening journey more sharing quarters. for the along of journey Reinvention our forward revenue. And profits in priorities morning. simplified, Thank look along has execution a our to next earnings

Have a wonderful day.

program. participation does Thank you, the conference. in for ladies gentlemen, This and your today's conclude

You may day. disconnect. now Good