Xerox Holdings Corp Q1 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : I have a couple. The first one was really on operating margin, the guide that you are issuing or raising today and congrats on the strong execution here to set that up. But I'm also trying to think about the reasons that the operating margin has to moderate into the second half, particularly if you go back and look historically, your first quarter margins are typically the lowest and your OpEx is typically the highest in 1Q. Even if I keep some of the macro headwinds and some of the one-offs you called out, like it seems like OpEx and there's probably more room on the OpEx to go in the second half to drive the margins to remain at these levels or even higher. So I'm just maybe more for Xavier, just to sort of outline why should we expect margins to moderate materially in the second half because, typically, that hasn't happened in the prior years? And I have a follow-up.

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Okay. And, Xavier, just to quickly follow up, the $471 million in OpEx that you have in 1Q, what is the best way to think about the run rate exiting the year, particularly with the PARC benefits coming in as well?

Question: Samik Chatterjee - JPMorgan Chase & Co, Research Division - Analyst : Okay. And if I -- last question, if I may -- and sorry for the multiple questions here. But just what we've heard from general distributors and VARs has a lot more pressure in the finance field services, customer verticals since the headwinds on the banking side. Any sort of way to ballpark what your exposure to that customer vertical is? And if there has been a more sort of pocket of softness there since what's happened over the last couple of months? And that's it for me.