Great. Good morning, everyone, and we're gonna get started here. Thanks for joining. I'm David Vogt from the UBS tech team. I cover networking and hardware stocks, and we're here. We're excited to have Xerox with us today. We have Steve-- I'm gonna put your name aside, Steve-.
It's okay.
Steve Bandrowczak, Chief Executive Officer, and Dave from IR. Before we get started, I need to read a brief UBS disclosure. So, any company that I or anyone on the dais today references, subject to risks and uncertainties. UBS has disclosures at www.ubs.com/disclosures. Just wanna make sure, do you have to make any kind of prepared disclosure remark?
Nope, we're good.
We're good. Thank you.
We're good. Great. Thanks everyone joining in on the webcast as well. I wanted to start with Steve, the Xerox of today versus the Xerox of yesteryear. I was just mentioning to Steve before we jumped up here on the platform today, that I'd visited the company a couple of years ago, a number of years ago, and the company looked completely different-.
Yeah.
T han where we are today. So maybe it'd be helpful, I think, for people that are less familiar with the story and the evolution of the story and the business. Maybe I'll just give you the floor to kind of talk about where we were, where we are, and where we're going, effectively.
Yeah, David, you go back to, you know, our last investor call back in 2022. Obviously, a lot of things have happened. First, we've seen a tremendous change in the workforce. The COVID environment created this hybrid workforce that is becoming more and more permanent as we see it. Inflation around the world and inflation in every aspect of our clients today. Capital costs, increased capital, and the ability to, or the lack of ability to get, you know, free capital at lower costs and lower rates. And so that's created a tremendous amount of challenges, but opportunity for Xerox. And so a year ago, when I took the position, is we're really going to get focused on our core business, stabilize and grow our core business on the things that we do extremely, extremely well.
And so if you think about today, we announced a program called Reinvention. Right? Reinvention is about really taking a step back, simplifying our business end-to-end, and driving dramatically a simplification of our business. You think about the world we're in today, it is a consumer-led, self-serve business, and yet I have had 100 years of legacy infrastructure that we have driven tremendous amount of complexity. So simplification of our business, putting technology in every single aspect of our processes. Simple example is today, all of our calls that come into our call center today, five years ago, we used to get a call, we used to dispatch somebody. Today, 50% of them are handled remotely through augmented reality, AI, and we get a 95% customer sat from customers solving their own problems remotely, as a simple example. So simplification of our business is the first thing.
Geographies, the dramatic way in which we have to think about geography and geography simplification. Today, we have way too many directs in every single country. We're trying to shrink that, have more indirect, and focus on key things that we're trying to do in terms of growing our business, IT services and digital services, specifically. And then the last piece of the Reinvention is, you know, we are seeing significant challenges in our business, but there are significant opportunities, right?
Right.
As you think about what's happening in the hybrid workforce, how do you drive productivity in that space? Many of our clients have what we call enterprise challenges, but don't have enterprise solutions. So we're driving digital services and IT services, and we'll give you some examples later, that are growing and will outgrow the decline in our business. So over the next three years, you're going to see a couple of things from Reinvention. Number one, significant operating income, $300 million of operating income over the next three years, net operating income. Two, a significant growth in IT services and digital services that will create a mix shift in our business, that at the end of 2026, we're actually going to outgrow our declining businesses.
So you mentioned sort of the operating income growth and sort of that mix shift.
Yeah.
How important to the strategy were the changes that you made recently? So you're getting rid of PARC-.
Yeah
A nd changed the capital finance business, FITTLE strategy a little bit. And where do we sit today in terms of how the company is currently configured from an asset and a go-to-market perspective to hit these targets under investment? Like, are we, are we basically at the point where you feel pretty confident that you have the right pieces in the right places and have removed... Not, that's too negative a tone, but have sort of right-sized the business in a way that helps you achieve these targets?
Yeah, you know, if you go back five, six, seven years ago, you're generating $1 billion of free cash flow, you can deal with the PARC, right?
Right.
PARC had technologies that were five, seven, eight, 10 years away. By the way, 80% of everything that was in PARC would never become a product.
Right.
It was research for the sake of research, right? And so that was distracting us from my perspective. I wanted to get back to our core, stabilize and grow our core. So PARC. FITTLE. FITTLE, where we were trying to grow a leasing business.
Right.
When you think about where interest rates were three years ago versus where they were-.
Today.
FITTLE was a distraction. I wanted to simplify, get our business back to actually growing in our core and staying close to our clients. I announced three things a year ago. One, we're gonna be very client-focused, client centricity. What does that mean? That means that we are going to look at how do we drive value for our clients. Simple example is today, all of our products and services are integrated into product processes or client processes. So think about hospitals. Hospitals have admissions, they have discharge processes, how you move them through pharmacy-.
Right.
H ow you move them through different appointments. Well, all of that is paper workflow. Today, we can offer RPA, Robotic Process Automation, and AI on top of that, that help drive productivity. What we have seen is we have now seen three quarters in a row where we have managed print services, contracts that are typically four to five years. Our renewal rate, the percentage of dollars is now over 100%. Why? Because we're adding new products and services-
Right.
Inside of client verticals. So absolutely, the focus on our clients is working, and we're seeing proof points by the renewal rate and the revenue growth. Second piece is, we're now starting to see where clients are looking for us to go help them in driving productivity. You know, we talk about inflation, we talk about capital challenges, we talk about labor challenges. Every industry is being dealt all those headwinds and trying to deal with how do you drive productivity. Well, we're helping our clients in hospitals, in law firms, using things like RPA and AI to drive productivity. And so the conversations are changing. We no longer are just providing print. Inside of their environment.
Right.
Yes, we happen to have a printer, we have a chip, operating system, and a screen, and we can provide products in and around it because we're already in those environments. That's where we're seeing our success.
So how important is that sort of installed relationship or that installed base in driving the strategy? So I would imagine, you know, you can go in there and have a very easy, maybe not easy, but a simple conversation about how we can bring more, you know, benefit to their solutions needs.
Yeah.
Like, how does that maybe go to market work, and what are sort of the early proof points that you're seeing?
I've got a unique position. I've got over 200,000 SMB clients-.
Right.
W here I have sales teams and service teams that touch them. It's not I'm dealing with them remote over the internet, I am physically in their environment-.
Right.
P hysically touching them every day. What does that mean? That means I know their processes. How do I help them with their processes and drive and streamline it with what I call enterprise challenges that don't have enterprise solutions?
Right.
So you think about UiPath today, robotics, process, automation, it's a tool. Well, if I'm a hospital or I'm a law firm, I don't have the skills to be able to implement RPA, implement AI. I provide it as a service. I go in, I already know your processes, I can build the bots for you. By the way, I use all the things that we're using internally to Xerox. Today, I run 7 million RPA transactions per quarter. Things like invoice processing, HR processing. So now I take those solutions, and I now bring them to my SMB clients, and I say, "You don't have to have any knowledge of RPA.
I'm gonna bring it to you as a service, and I'm gonna drive productivity." It helps them offset their labor challenges, offset their inflation challenges, and they don't have to deal with cost of capital because they're paying as a service.
Right.
Now, as I already have a contract, I renew up because I add those new products and services, and so I'm starting to grow. For me, I'm uniquely positioned, and we talk about being a systems integrator for artificial intelligence in the future.
Got it.
How do we help that in the SMB space?
So, so it sounds like the evolution, maybe to paraphrase, is it's no longer a product-led company story. It's a solution provider with touch points that are long in duration, well-connected, deep, that ultimately could help mitigate some of the more secular challenges in some of the legacy parts of the business. Is that a reasonable.
Perfect. Well said.
All right. I'm gonna join as a chief officer.
There you go.
Got it. So maybe we also get questions, even though, you know, we don't officially cover Xerox, but we cover some peers, loosely defined, about the print business. You know, obviously, I know that's, you know, a key part of the business today, will remain a key part of the business, but there are some structural headwinds. So when you talk about solutions, when you talk about print, you know, I think last quarter, you know, if I, if I listened to the call correctly, and I read your transcript 25 times, you know, equipment revenue is only down a little bit.
Mm-hmm.
Can you kinda talk about what's going on in the marketplace that you're seeing? There's a lot of conversation about, you know, you know, different parts of the market, stronger, weaker, the yen having an impact.
Yeah.
Just kind of help us frame kinda what's going on in the market today.
Really, two ends of our business. So if you think about low-end print, home printers, printers that are on the low end, you're seeing significant pricing pressure.
Right.
We play mostly in the office.
Right
A nd in the hybrid workplace, where we can help our clients drive productivity in this. So when you think about mid-market and high-end equipment that has an operating system, a chip, and a CPU, we now are providing products and services around that. So a simple example, if you go into schools today, in Dallas school districts, for example, we can do things like language translation. So when you have multiple languages, an administrator can scan something in English, it can come out in Spanish. It can come out in multiple languages. I can speak to a printer, a multifunctional device. I can speak to it, and it can translate it, and it can output.
Right.
I n multiple languages. I can grade papers, I can scan resumes and put it into back-end HR processes. I can scan invoices and put it into accounts payable processes, right? So I am not just a printer.
Right.
T hat's printing output pages. The other thing that's really important is, we're now starting to unlock value in data. We've been playing in the space of aggregating and securing data for years today, all right? And so if you think about the hybrid workplace, where now all of a sudden, I got people working from home, well, I have the same security challenges that I have in the office.
Right.
I wanna make sure that a document can't get printed that is only for the CEO's eyes only, or has intellectual property on it, or has very specific confidential information on it. We've been both redacting and securing that environment for years. You think about AI today. AI is useless without data.
Right.
And so we've been playing in that space for a long time. So two ends of the business. One is the low end. Yes, we're seeing significant challenges.
Right.
That's where you talk about the yen, and you talk about, you know, our Japanese competitors, they have an advantage. But the reality is, if you really think about the products and services that we play in, I don't care whether it's the yen or whether it's the low-end print, my core is very stabilized and actually growing.
Got it. That's helpful. So when you think about, to your point, about the hybrid environment, the corporate environment, that's where I would imagine clearly the emphasis is on in terms of your time, your energy, your focus... less so on the low end. Is there a reason or is there a way to maybe leverage, you know, AI at the low end or some of these solutions, or is there just not a natural extension? It doesn't strike me as intuitive that there's a natural extension. It seems like everything you're doing is in the parts of the market where it makes a ton of sense.
Yeah.
I was just trying to think if there's a way to broaden it out and maybe reach a little bit down stack effectively.
Well, I think there's a couple of areas that it would play down stack. So if you think about today, you got home printers, right? Even though that you're part of an office environment or a bigger enterprise, you have a home printer.
Right.
You wanna make sure that the document that's getting printed.
Secure.
I s secure, number one. You wanna take a look at, is it cost effective, right? You see multiple times the cost of printing at home versus printing in an office, significant. So now you're starting to see expense reports with Costco and Staples on it, right? Because you have to go get toner.
Right, right.
Y ou have to go to your home printer. And so that's really where AI plays to make sure that documents don't get printed where they shouldn't be.
Got it.
Making sure that you print where the right value is, right? We're seeing inflationary costs. Everybody is still trying to optimize their print infrastructure, making sure that they get the most out of their investment from a capital and a cost perspective. So AI does play in there, but you are absolutely right. We provide the most value inside of mid-sized companies and the enterprises, that we can help drive productivity and we can unlock value in data.
Okay, that's helpful. So I guess Steve and I were talking earlier, like, my team joined during COVID, and so we've never had a fully in-person work experience. You know, we do have a team that's geographically dispersed. What is your view, like, how do you think about your business in the context of this current operating environment? Does it change? What impact does it have on volumes and then commensurate supplies and, you know, maintenance and everything that goes along with it? I'm just trying to get, you know, you live and breathe this every day.
Yeah.
What's your perspective?
Look, the beauty about what Xerox has been doing is we've been driving productivity in the workplace for years.
Right.
So we started a slogan, "We make work, work." It doesn't matter where you are, whether you're working from home, Starbucks, in a plane, on a train, doesn't matter. Really, we need to drive productivity in the workplace. What we saw with COVID is the hybrid environment, everybody went home, but nothing really changed. The processes are the same. The way we work has always been the same. So how do we drive process and productivity in that space? And that's where we're becoming very, very successful in helping our clients. So you think about technicians in a hospital that are doing things like X-ray reviews remotely. You think about scheduling appointments remotely. How do you do all that?
I was at a hospital in Napa Valley a couple weeks ago, and one of the biggest challenges they have is the amount of patients that are coming in. They're just waiting.
Right.
They can't get scheduled appointments. They can't come in. They can't get through the system fast enough. They have a significant amount of bills that they can't get to insurance companies because they don't have enough administration staff. We went there, we didn't talk about print. The only thing we talked about was, how do we help drive productivity with R PA and AI on top of the print environment that they already have? The best salesperson that I had at that meeting was the head of operations in the hospital, because they talked about, "Oh, if I do this, I can get more patients in. If I do this, I can get faster cash flow because my invoices get paid," right?
We have a tremendous opportunity in this hybrid workforce and distributed workplace to provide value in products and services that allow us to drive productivity in that space, and that's really what we're seeing. We're having those conversations. CEOs want people to come back, but the new reality is you're never gonna get.
Right.
... 100% of the workforce back, right?
Right.
And so whether it's three days a week, two days a week, four days a week, whatever the new policy is, everybody is really struggling with, "Okay, how do we drive productivity in this space?" We have a great opportunity to play in that space.
So to that point, though, on productivity, you talked about it at length earlier. So did, in a weird, counterintuitive way, COVID accelerate this productivity strategy within Xerox, where it became obviously, "Hey, we have these capabilities. We have them internally. We use them internally".
Yeah.
As you referenced. We could take this to the market and we can, you know, augment our growth because we have the touch points, the 200,000 SMB touch points." And so in a perverse way, did COVID accelerate this transition?
It did, and I say COVID was a blessing for Xerox, and it's strange because I lost a significant top line when COVID hit.
Right.
Okay? But what happened was, it accelerated digitalization. It accelerated where we were going. It may have been 3-5 years from now, we were getting there anyway-.
Right.
B ut it accelerated it, right? And what it also accelerated was the openness to technology driving and implementing changes in companies. You know, you take a look at what we do today on Teams or we do on Zoom. As a CIO for many years, I was trying to drive video into into companies to reduce travel. It was like uphill battle. We couldn't do it.
Right.
All of a sudden, COVID hit, and within a week, all of a sudden, the infrastructure, everybody is comfortable working from home, working over Zoom, working over Teams, working over whatever the.
Right.
T he technology of choice was. It happened overnight, right? And so what we're now seeing is the acceleration of that digitalization and the more receptiveness to, okay, RPA, AI, how do we fit it inside-.
Right.
O f our organization? So when COVID hit, we had no choice. We had to use technology to drive internally for survival, can't we?
Yeah.
We had to drive operating improvement. We had to drive cash flow. So we implemented significant solutions around RPA and AI, et cetera, and it's now a blessing because we now can extend that to our clients and help them with driving productivity. I talk about inflation, labor challenges, and cost of capital is not a headwind for us. It actually is a benefit and opportunity because it's a headwind for every one of my clients. And when I go and I have the conversation is: Are you dealing with productivity issues? Are you dealing with cost of capital issues? Do you have enough people to do the administration work? And typically, the answer is no, no, no. How do we help, and how does Xerox help you in that space?
So you just actually brought up an interesting point. You mentioned that, you know, the rate environment and macro has been a challenge. Customers need to be more productive. So intuitively, that would lead to more OpEx versus CapEx decisions, which is your point, I would think. Are you seeing that conversation or that discussion accelerate in the last six-12 months because the macro has been challenging, the rate environment has been stubbornly higher than I think people had anticipated?
Yes.
Does that impact other parts of your business, though? For example, obviously, there's a part of your business that's CapEx related.
Yeah.
So what's the puts and takes effectively there? So I would imagine the consumption is much stronger or the conversations are much more robust than you might have anticipated. Maybe there's a little bit of softness on the CapEx side.
Well, think about my business. 80% of it is contractual today.
Right.
Most of it, we've been subscription-based for a long time.
For a long time.
It's always been there. So for us, it's a very natural extension to everything we do. Because we've been building these internal capabilities, I talked about UiPath and RPA, we're now extending that. So my capital is already spent, and now I'm extending it to my external clients.
Right.
What I do with AI and my service delivery and what I do with ChatGPT and my call center, I'm already using it. I've already spent the capital.
Okay.
I've already got the people. I'm now extending it. And so what we're seeing is, and I think in the IT industry in general is seeing, is you're going to see sweating of assets that don't drive productivity. So endpoints, you're seeing laptops, endpoints-.
Right.
A re going to get sweated a little bit more. But where are you going to see investments? Investments in infrastructure that drive AI capability, that drive productivity. And so when I go in and I have a conversation with a CFO or a CEO, I talk about, "You have inflation challenges, you have labor challenges. You don't need to go spend your capital.
Right.
I'll build a solution, and you pay for me on a subscription-based services." It does two things for me. One is, you think about my contracts. My contracts are four to five years. I now weigh on top of it. Every time I renew with incremental services, I've now protected my core.
Yep.
But more importantly, I've built services that allow me to grow in the future. The exciting thing about it is once I find one processing inside of a client and we build it, whether it's receivables, payables, HR, doesn't matter, all of a sudden now the brain starts thinking about, Well, what about these other five things?
Waiting to do, right.
What else can we do?
So has the macro been... Yeah, obviously, the macro creates challenges for your customers, so it makes them more receptive to OpEx solutions.
Yeah.
But has there—you know, we've heard from a ton of other companies, it's caused a little bit of a pause in terms of spending priorities. Maybe the C-suite is a little bit more involved in decisions that they might.
Yeah.
N ot have normally been involved with. Maybe can you kinda share what you've seen over the last 12 months or so, and how you think... And look, I know your crystal ball is not going to be perfect, but how do you think about, you know, the macro as a, you know, maybe a potential headwind just to IT spending and your business in general, without getting into specifics?
Yeah, look, I think when you've got inflation and you've got typical pressure on capital, the IT focus is how do we drive business value?
Right.
Look for the return on investment, short-term return on investment, easy areas that you can invest, that you can drive business value, as opposed to worry about the IT spend. So I think what you're going to see is significant pressure on IT endpoints, IT things that are long-term, and more investment in things that drive productivity inside of clients, drive return on capital inside of clients, drive productivity in areas that they need it. Labor is still a big problem today. We still have challenges where we don't have enough labor to do a lot of things inside of hospitals and universities, and you think about what's happening in law firms today. Everybody is challenged with this labor crisis, okay? So how do we offset it?
Productivity.
AI, RPA, and productivity.
Right.
For us, the conversation on those three key areas, it's what's opening the doors for us. The other important point is, Xerox is a trusted brand. Very important. Why is it a trusted brand? We've been around for a long time. We're known for driving innovation. We're known for driving productivity. I'm already behind the firewall, and that's important, which means that you're trusting me with your security infrastructure. When I talk about AI and I talk about RPA, how we've done it internally, I can help you with the conversations around your audit department. I can help you with conversations around how do you integrate it into your security. I can help you with conversations around how do you make sure that you got the right processes and they actually work? What happens when a job fails and the RPA is going to run late?
We have processes that make sure that when the robot runs, it checks to make sure all the other things predecessors to that actually runs itself. So we've built all that, and when we go to our clients, it's not like we're starting from scratch.
Right.
We're using our infrastructure.
Got it.
Yeah, and, I'll just add, the need for productivity really plays to our advantage with the portfolio of services we provide. As Steve mentioned, in over half of the instances in which contracts have renewed this year, the renewal revenue rate has been higher than 100%, and that's a function of adding more incremental services that can help our clients out.
So along those lines, so, you know, retention rates have been strong on renewals. You changed your FITTLE strategy, so you're going to generate some cash flow over the next several years. You know, obviously, it sounds like you're confident in your multimillion-dollar profit improvement targets. So when you think about the business today versus, let's say, the business in three years from now, what do we look like? And what I mean by that is, so what are your priorities besides driving productivity, growing margin, growing operating profit dollars? You know, you've made changes strategically to the business. What do we look like in three years from now? And you know, I get questions, even though we don't cover your company, like, are they going to buy stock?
Yeah.
Are they going to buy something with this cash flow from FITTLE?
Yeah.
Any thoughts there would be, I think, helpful.
Let me talk strategically and then ask David to comment on what we're doing with shares and so forth. So if you really think about over the next three years, I've got two very important things. One, simplification of my business, and that means I've got to be easy to do business with. Every touch point. You think about your own consumer life, your mobile device, if it's not an easy application, you delete it, right? I've got to get easier to do business with in every touch point that we do. That's part of my simplification in driving technology. We're going to drive... We talked about it, $300 million of operating income over the next three years. That's through simplification, redesigning my company so that my core is as efficient as it can be. I've got to do this mix shift.
I'm not going to expand into Asia. I get asked the question all the time: "Are you going to go expand into-" No, I've got more than enough capabilities in market share. I can double my business. Literally, David, I can double my business in existing clients that we already have today with products and services that I already have. That's an execution issue, right? How do I take all the things I talked about in terms of driving productivity into every law firm, every hospital, every university, and how do we go drive that in the 200,000+ SMB clients that we have today? And then the last piece is, how do I get my entire both partner ecosystem and my sales ecosystem comfortable with selling value, right? We've been selling printers and we've been selling speeds and feeds and great capabilities in our product.
We've got to go spin that, and when I say spin it, shift it and drive value to a client, which means I need to understand my client processes, understand my client revenue and investments that they're making, and where we can drive productivity. David?
Yeah, financially speaking, you know, over the next couple years, our capacity to drive incremental free cash flow is, is significant. We have the operating income improvement target that we've put out, an increase of $300 million by 2026. But also, as you mentioned, the change in FITTLE strategy to return to more of a captive financing unit will free up our balance sheet significantly. As we disclosed in Q3, we expect our finance receivable balance to decline from $2.6 billion - $1 billion. That's a straight one-for-one impact-.
Conversion.
T o free cash flow.
Right.
Over four years, just simple math, that's about $400 million incremental cash flow above and beyond our core operations each and every year. So with that free cash flow, we'll be reinvesting in the Reinvention, the revenue mix shift. But also, I think it's fair to assume that because so much of the finance receivable balance was funded with debt, that our leverage ratios will improve as well over time.
Got it. I'd be remiss, you know, you took out Carl Icahn. I got a question on it. I was actually on the road and, you know, actually, a credit investor asked me, of all people. So maybe you can kind of share your thoughts on kind of, you know, the thought behind that, how that came to be, kind of how you're thinking about it going forward from a strategic perspective, why that makes sense.
Yeah, look, a long comment on why Carl Icahn did this stuff-.
Well, from your perspective, right?
From my perspective, two things going forward. Number one, you know, Icahn has always been focused on shareholder return. I am focused on both combination of shareholder return and future growth, and the ability to make sure that over the next 100 years, Xerox is around, right? Which means investing in growth areas, investing in areas that will allow us to sustain ourselves and reposition Xerox, right? And so over the next three years, the Reinvention is the core for us, not just to drive costs out, not just to improve the bottom line.
Right, but top line.
B ut to position ourselves, that when you think about IT services and digital services, you know, 5% and 6% category growth, respectively, in areas that have hundreds of billions of dollars of opportunities in that area. So we're now playing in technology growth areas and repositioning the company as solutions-led, software-driven company. That's a dramatic shift. And so we were able to announce Reinvention. I've got full support of the board in terms of where we're going, and that's probably the difference, right? It's the difference between returning it to shareholders in one form versus making sure that we return shareholder value, but more importantly, we set ourselves up for strategic growth in the future.
Got it. And maybe back to David on that. So you talked about the runoff. You've publicly disclosed what the cash flow dynamics would look like. You mentioned leverage comes down. So does that imply that, you know, you have near-term maturities next year, those will be settled with cash flow from the runoff of the receivables from FITTLE? Is that the right way to think about it?
Yes. We have $300 million coming due next year. That will be... We do plan to be able to pay that off with existing cash flow, either on hand or to be generated throughout the course of the year.
Got it. Helpful. So what I, what I'd like to do is, like, give the management team kind of an open mic to kind of hit the key messages, anything that we didn't cover. So, Steve, you know, maybe I'll just turn it over to you. Anything that we didn't cover that you think maybe is underappreciated about the Xerox story today versus where it was two, three years ago and where we're going over the next two to three years?
I think the biggest misconception is, you know, the world of print today, every process starts with a document. I don't care what the process is, whether it's motor vehicle, government, all these processes have been built on documents. Inside of documents, there's a tremendous amount of data and tremendous amount of value. So we do 3 billion, 3 billion pages per month in our infrastructure. You think about the value and the insight that we have on those pages that we see each and every month, and now how do we drive products and services on top of that? We will play in the AI space going forward. We will play in robotic process automation. We will play in the digitalization and the shifting, right? So that's the first thing that's really important. As these technology trends, everybody thinks it's a headwind to print, it's an opportunity.
We just need to play differently. We need to reposition ourselves differently. Second key message is, print is not going away. It's here. It is... Trillions of pages get printed, sometimes it gets shifted, but the reality is, you know, you're seeing single-digit decline. With all that paper out there, I've got a long runway. We generate a lot of cash, a lot of value from our print business, and as the print business shifts, we're going to be there to play and capture that value. 80%, think of it, 80% of my business is contractual. 80%. If I renew up in terms of revenue target each and every year.
Right.
I'm outrunning that decline with new products and services, right? So Xerox is going to be here to play for a long time in solutions and software-driven solutions going forward.
Got it. That's perfect. Great, Steve. Thanks, David.
David, thank you very much.
Thank you, everyone.
Thank you.
Thank you.