Xerox Holdings (XRX) FY2025 10-K Risk Factors: 13 New, 7 Dropped

What the changes say

Xerox completed the Lexmark acquisition, increasing total debt to $4.2 billion and adding manufacturing complexity.

What changed since the prior 10-K

New

NewRisks Related to Ownership of our Common Stock and our Warrants
governmental sales and in our projects being reduced in price or scope or terminated altogether, which also could limit our recovery of incurred costs, reimbursable expenses and profits on work completed prior to the termination
Government contracts carry risks of price reductions, terminations, and severe civil or criminal penalties from pricing audits.
NewRisks Related to Ownership of our Common Stock and our Warrants
Our products and services may be affected by design and manufacturing defects that could materially adversely affect our business, financial condition, and results of operations
Design and manufacturing defects in products or OEM offerings could cause costly recalls, warranty expenses, and personal injury liability.
NewRisks Related to Ownership of our Common Stock and our Warrants
We are subject to laws of the United States and foreign jurisdictions relating to the privacy and protection of personal information, and failure to comply with those laws could subject us to legal actions and negatively impact our operations
Evolving global data privacy and protection laws increase compliance complexity for handling personal information.
NewRisks Related to Ownership of our Common Stock and our Warrants
We are subject to extensive environmental laws, regulations, and procurement requirements, and failure to comply could result in increased costs, liabilities, or loss of market access
Extensive international and domestic environmental laws regarding climate change, chemical use, and emissions increase operating costs and compliance burdens.
NewRisks Related to Ownership of our Common Stock and our Warrants
reporting, and may result in restrictions or bans on certain substances, increased costs, or product redesign requirements
Product energy efficiency mandates and extended producer responsibility regimes may restrict market access or require product redesigns.
NewRisks Related to our Acquisition of Lexmark
We may be unable to realize the benefits from the Lexmark Acquisition
Integrating the July 2025 Lexmark acquisition is complex, costly, and may fail to deliver anticipated cost-savings and synergies.
NewRisks Related to our Acquisition of Lexmark
Moreover, our ability to realize the anticipated benefits of the Lexmark Acquisition, including anticipated synergies, will depend, to a large extent, on our ability to integrate Lexmark’s business into our existing operations
Lexmark adds unfamiliar print hardware manufacturing operations and new geographic risks in Asia and other regions.
NewRisks Related to Ownership of our Common Stock and our Warrants
The trading price for the Warrants may bear little or no relationship to traditional valuation methods, or to the market price of our Common Stock, and therefore the trading price of the Warrants may fluctuate significantly following their issuance
Warrant trading prices may fluctuate independently of traditional valuation metrics or common stock performance.
NewRisks Related to Ownership of our Common Stock and our Warrants
Hedging arrangements relating to the Warrants may affect the value and volatility of our Common Stock
Warrant holder hedging transactions may increase the price volatility of our common stock.
NewRisks Related to Ownership of our Common Stock and our Warrants
The issuance of Common Stock upon the exercise of the Warrants may depress our stock price
Issuing up to 82,463,860 shares of common stock upon warrant exercises could dilute existing shares and depress our stock price.
NewRisks Related to Ownership of our Common Stock and our Warrants
Future issuances of additional warrants may adversely affect the market price of the Warrants and the market price of our Common Stock, but there may be no adjustment to the Warrant Exercise Rate for such issuances
Future warrant issuances without warrant exercise rate adjustments could depress market prices for both warrants and common stock.
NewRisks Related to Ownership of our Common Stock and our Warrants
The market price for our Common Stock may be volatile and subject to future declines, and the value of an investment in our Common Stock and corresponding derivative securities may decline
Common stock market prices may remain volatile and experience future declines unrelated to historical financial performance.
NewRisks Related to Ownership of our Common Stock and our Warrants
on our results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occurs

Dropped

DroppedRisks Related to our Pending Acquisition of Lexmark
Table of Contents Legal Sign-off 2.24.25
DroppedRisks Related to our Pending Acquisition of Lexmark
working capital borrowings or debt or equity financing may not be available to pay or refinance such debt at attractive rates or at all
DroppedRisks Related to our Pending Acquisition of Lexmark
and Canada, and the Law on Child Labour Due Diligence in The Netherlands. There are also a number of voluntary reporting schemes that provide a framework to report CSR-related information
DroppedRisks Related to our Pending Acquisition of Lexmark
We receive, process, transmit and store information relating to identifiable individuals, both in our role as a technology provider and as an employer. As a result, we are subject to numerous privacy and data protection laws and regulations in the United States (both federal and state) and foreign jurisdictions
General macroeconomic conditions, credit tightening, and market volatility.
DroppedRisks Related to our Pending Acquisition of Lexmark
We are subject to numerous environmental laws, regulations, and procurement initiatives and failure to comply could result in substantial costs, including cleanup costs, fines, civil or criminal sanctions, third-party damage or personal injury claims, or limited market access
DroppedRisks Related to our Pending Acquisition of Lexmark
The Lexmark acquisition may not be completed and the equity purchase agreement may be terminated in accordance with its terms
DroppedRisks Related to our Pending Acquisition of Lexmark
The Lexmark acquisition may present certain risks to our business and operations prior to the closing and, if consummated, after the closing

Reworded

98% rewrittenRisks Related to Ownership of our Common Stock and our Warrants
Failure to meet evolving corporate social responsibility expectations, standards, or goals could adversely affect our business, results of operations, financial condition, or stock price
Expanded to include U.S. federal and state regulatory requirements alongside EU Corporate Sustainability Reporting Directive rules.
Was: Failure to meet CSR expectations or standards or achieve our CSR goals could adversely affect our business, results of operations, financial condition, or stock price
82% rewrittenRisks Related to Ownership of our Common Stock and our Warrants
Our level of debt could adversely affect our financial condition and reduce our financial and operational flexibility
Updated total debt from $3.4 billion to $4.2 billion and added details on a $405 million senior secured term loan joint venture with TPG.
Was: Our level of indebtedness could adversely affect our financial condition and reduce our financial flexibility
79% rewrittenRisks Related to Ownership of our Common Stock and our Warrants
We may not achieve the expected benefits of Reinvention, which may adversely affect our business
Refined Reinvention restructuring goals to emphasize mix shift, cost reduction, and business simplification.
Was: We may not achieve the expected benefits of our restructuring and transformation plans, including Reinvention, which may adversely affect our business
79% rewrittenRisks Related to our Acquisition of Lexmark
We incurred a substantial amount of debt in connection with the financing of the Lexmark Acquisition
Updated to reflect that the Lexmark acquisition is now complete and financed with cash and debt, increasing overall leverage.
Was: We will incur a substantial amount of indebtedness in connection with the financing of the Lexmark Acquisition
77% rewrittenRisks Related to Ownership of our Common Stock and our Warrants
Our government contracts are subject to termination rights, audits, and investigations, which, if exercised, could negatively impact our reputation and reduce our ability to compete for new contracts
Added specific government budget deficits, sequestration, and government shutdowns as triggers for contract reductions.
74% rewrittenRisks Related to Ownership of our Common Stock and our Warrants
Our business, results of operations, cash flow, and financial condition are affected by global macroeconomic conditions
Added tariffs and government shutdowns to the list of macroeconomic headwinds impacting demand.
70% rewrittenRisks Related to Ownership of our Common Stock and our Warrants
Our business, results of operations and financial condition may be negatively impacted by legal and regulatory matters
Minor phrasing cleanup regarding contingent liabilities and litigation.
61% rewrittenRisks Related to Ownership of our Common Stock and our Warrants
Our failure to maintain an adequate system of internal control over financial reporting, could adversely affect our ability to accurately report our results
Minor phrasing adjustments to internal controls over financial reporting.
50% rewrittenRisks Related to Ownership of our Common Stock and our Warrants
We may be unable to attract and retain key personnel while our business model undergoes significant changes
49% rewritten
Company-Specific Risk Factors
41% rewrittenRisks Related to Ownership of our Common Stock and our Warrants
If we fail to achieve some or all of the expected benefits of Reinvention, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows
Was: If we fail to achieve some or all of the expected benefits of our restructuring and transformation plans, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows
37% rewritten
Summary of Principal Risk Factors
34% rewrittenRisks Related to Ownership of our Common Stock and our Warrants
The use or anticipated use of technologies, including generative AI, by us or third parties, may increase or create new regulatory or operational risks
Was: The use or anticipated use of artificial intelligence (AI) technologies, including generative AI, by us or third parties, may increase or create new regulatory or operational risks
33% rewrittenRisks Related to Ownership of our Common Stock and our Warrants
We are subject to breaches of our security systems, cyber-attacks, and service interruptions, which could expose us to liability, litigation, regulatory action and damage our reputation
28% rewrittenRisks Related to Ownership of our Common Stock and our Warrants
Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products, services, and brand
27% rewrittenRisks Related to Ownership of our Common Stock and our Warrants
If we fail to successfully develop new products, technologies, and service offerings, we may be unable to retain current customers and gain new customers
Was: If we fail to successfully develop new and existing products, technologies, and service offerings, we may be unable to retain current customers and gain new customers and our revenues would decline
24% rewrittenRisks Related to Ownership of our Common Stock and our Warrants
Tariffs or other restrictions on foreign imports could negatively impact our financial performance
23% rewrittenRisks Related to Ownership of our Common Stock and our Warrants
We have outsourced a material portion of our manufacturing operations and significantly rely on third-party manufacturers, subcontractors, and suppliers
Was: We have outsourced a significant portion of our manufacturing operations and increasingly rely on third-party manufacturers, subcontractors, and suppliers

All 38 risk factors

Headings as the filing states them, in filing order.

Other

01Summary of Principal Risk Factors37% rewritten
02Company-Specific Risk Factors49% rewritten

Risks Related to Ownership of our Common Stock and our Warrants

03Our business, results of operations, cash flow, and financial condition are affected by global macroeconomic conditions74% rewritten
04If we fail to successfully develop new products, technologies, and service offerings, we may be unable to retain current customers and gain new customers27% rewritten
05Our business and financial performance could suffer if we do not manage the risks associated with our services businesses properly
06We may not be able to replace the revenue and earnings from lost customers or reductions in services. Although our services agreements may include penalties for early termination, these penalties may not fully cover our investments in these businesses
07Our profitability is dependent upon our ability to obtain adequate pricing for our products and services and to improve our cost structure
08We have outsourced a material portion of our manufacturing operations and significantly rely on third-party manufacturers, subcontractors, and suppliers23% rewritten
09We may be unable to attract and retain key personnel while our business model undergoes significant changes50% rewritten
10We may not achieve the expected benefits of Reinvention, which may adversely affect our business79% rewritten
11If we fail to achieve some or all of the expected benefits of Reinvention, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows41% rewritten
12Our government contracts are subject to termination rights, audits, and investigations, which, if exercised, could negatively impact our reputation and reduce our ability to compete for new contracts77% rewritten
13governmental sales and in our projects being reduced in price or scope or terminated altogether, which also could limit our recovery of incurred costs, reimbursable expenses and profits on work completed prior to the terminationNew
14Our ability to fund our customer financing activities at economically competitive levels depends on our ability to source capital and the cost of capital in the credit markets
15Our level of debt could adversely affect our financial condition and reduce our financial and operational flexibility82% rewritten
16Our products and services may be affected by design and manufacturing defects that could materially adversely affect our business, financial condition, and results of operationsNew
17Our financial condition and results of operations could be adversely affected by employee benefit-related funding requirements
18Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products, services, and brand28% rewritten
19Failure to meet evolving corporate social responsibility expectations, standards, or goals could adversely affect our business, results of operations, financial condition, or stock price98% rewritten
20The international nature of our business subjects us to a number of risks, including foreign exchange and interest rate risk and unfavorable political, regulatory, and tax conditions in foreign countries
21Tariffs or other restrictions on foreign imports could negatively impact our financial performance24% rewritten
22We operate globally and changes in tax laws could adversely affect our results
23We are subject to breaches of our security systems, cyber-attacks, and service interruptions, which could expose us to liability, litigation, regulatory action and damage our reputation33% rewritten
24We are subject to laws of the United States and foreign jurisdictions relating to the privacy and protection of personal information, and failure to comply with those laws could subject us to legal actions and negatively impact our operationsNew
25The use or anticipated use of technologies, including generative AI, by us or third parties, may increase or create new regulatory or operational risks34% rewritten
26We are subject to extensive environmental laws, regulations, and procurement requirements, and failure to comply could result in increased costs, liabilities, or loss of market accessNew
27reporting, and may result in restrictions or bans on certain substances, increased costs, or product redesign requirementsNew
31The trading price for the Warrants may bear little or no relationship to traditional valuation methods, or to the market price of our Common Stock, and therefore the trading price of the Warrants may fluctuate significantly following their issuanceNew
32Hedging arrangements relating to the Warrants may affect the value and volatility of our Common StockNew
33The issuance of Common Stock upon the exercise of the Warrants may depress our stock priceNew
34Future issuances of additional warrants may adversely affect the market price of the Warrants and the market price of our Common Stock, but there may be no adjustment to the Warrant Exercise Rate for such issuancesNew
35The market price for our Common Stock may be volatile and subject to future declines, and the value of an investment in our Common Stock and corresponding derivative securities may declineNew
36Our business, results of operations and financial condition may be negatively impacted by legal and regulatory matters70% rewritten
37on our results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occursNew
38Our failure to maintain an adequate system of internal control over financial reporting, could adversely affect our ability to accurately report our results61% rewritten

Risks Related to our Acquisition of Lexmark

28We may be unable to realize the benefits from the Lexmark AcquisitionNew
29Moreover, our ability to realize the anticipated benefits of the Lexmark Acquisition, including anticipated synergies, will depend, to a large extent, on our ability to integrate Lexmark’s business into our existing operationsNew
30We incurred a substantial amount of debt in connection with the financing of the Lexmark Acquisition79% rewritten

Other Xerox Holdings 10-Ks

FY2024 10-K risk factors
32 risks
Xerox faces significant debt and refinancing risks with $3.4 billion in total debt and non-investment grade credit ratings.
Filed Feb 24, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.