Xerox Holdings Corporation (NASDAQ:XRX) Q3 2023 Earnings Call Transcript

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

Xavier Heiss: Yes, back also to your point, Samik, here. From a macro point of view, so Europe, we are not the only one quoting it there, but a little bit of softening. This is not a full decline or a more – really more than what we are expecting, but we are seeing a softening there. What we have seen as well, I mentioned the paper business. The paper business, just also to clarify, this is not a significant business for Xerox. This is like a very low-single digit number in revenue. But compared to last year, where this paper business with certainly some scarcity of paper, we have been able to benefit from later. This year is not as good, And we see more flow of Asian paper currently on the market, putting pressure on prices there.

The other element we are monitoring currently is on the high-end production business. This business obviously is highly connected to, I would say, GDP evolution and the trend on the market share, but also on the access to capital for our high-end production customer. And what we have seen recently is a little bit – due to interest rate increasing, a little bit more scarcity on the ability or the capacities that this customer have to invest in this equipment. Not highly concerned at this stage, but this is something that we are monitoring, and we will provide updates during the quarter. All of this, everything that I am describing here is included in our revenue guidance. And we also expect that we will be able to deliver the profitability and free cash flow guidance that we have maintained compared to prior quarter.

Samik Chatterjee: Got it. Thank you.

Xavier Heiss: Thank you, Samik.

Operator: Thank you. This does conclude the question-and-answer session of today’s program. I would like to hand the program back to Steve for any further remarks.

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

Operator: Thank you, ladies and gentlemen for your participation in today’s conference. This does conclude the program. You may now disconnect. Good day.