Post-sale and financing revenue, which represents about 75 per cent of Xerox’s total revenue, increased two percent, largely driven by four percent post-sale growth from digital systems. Currency had a negligible impact on total and post-sale revenue.
Xerox’s strategy to boost revenue through annuity from colour products and services contracts also contributed to post-sale growth with a 16 per cent increase in colour post-sale revenue and five percent post-sale growth from global services. Signings for document management services were up more than 15 per cent in the quarter.
Anne M. Mulcahy, Xerox chairman and chief executive officer says the corporation’s second quarter performance reflected the positive track Xerox is on to grow revenue while remaining cost-effective and competitive.
“Revenue is up – the benefit of increasing install rates of Xerox digital and colour systems as well as continued demand for our document management services, all of which fuels our healthy annuity stream. Through a disciplined focus on costs and operational improvements, we increased gross margins and delivered solid bottom-line results.
“During the second quarter, we also announced the acquisition of Amici LLC, an e-discovery company whose offerings strengthen our services portfolio. And, we repurchased US$225m more in Xerox stock, nearly completing the US$1bn programme. Our financial strength allows us now to increase the buyback program by another US$500m.
“This all adds up to consistent, steadily improving progress that delivers profitable returns and value for our shareholders,” adds Mulcahy.
Revenue from Xerox’s industry-leading colour systems grew 14 per cent in the second quarter and now represents 34 per cent of total revenue. “The number of pages printed on Xerox colour systems grew 40 percent in the quarter. Pages are the power of the annuity stream as the increasing volume of colour pages flows through to post-sale revenue,” said Mulcahy, noting that 44 per cent of Xerox’s equipment sales now come from colour products, a 10 point increase from two years ago.
The company recently expanded its colour offerings with five new systems including the DocuColor 5000 mid-level digital production colour press as well as a colour printer, digital copiers and multifunction products aimed at offices small to large.
Equipment sale revenue was flat in the quarter and down one per cent in constant currency. Installs of key products like production colour presses and WorkCentre multifunction systems drove up activity in the company’s production and office businesses.
