Q1 2024 Conduent Inc Earnings Call Transcript
Key Points
- Conduent Inc (CNDT) reported a strong revenue quarter with $921 million, exceeding expectations and remaining essentially flat year-over-year despite previous guidance of a 2-3% decline.
- Adjusted EBITDA margin met the guided range at 7.5%, aligning with company expectations and reflecting effective management despite a challenging economic environment.
- The company successfully closed the sale of its Curbside Management and Public Safety business for $230 million plus debt, demonstrating progress in its strategic divestitures.
- Conduent Inc (CNDT) is making significant strides in partnerships and technology, including collaborations with Microsoft for GenAI applications and Oracle for cloud efficiencies, which are expected to drive future growth and efficiency.
- The company has a strong liquidity position with close to $1 billion in cash and available credit, providing financial flexibility for ongoing operations and strategic initiatives.
- Q1 sales performance lagged expectations, primarily due to the timing of new business ARR, which could impact the company's short-term growth trajectory.
- Despite strong revenue, the adjusted EBITDA of $69 million was down from $90 million in Q1 2023, a decrease attributed partly to the absence of a one-time favorable legal settlement from the previous year.
- The company anticipates 2024 to be a trough year for both revenue and EBITDA, suggesting potential short-term financial challenges as it continues its strategic realignment.
- Net ARR for Q1 was reported at $17 million, lower than desired, indicating potential issues in deal closures and revenue generation from new contracts.
- Conduent Inc (CNDT) is undergoing significant changes with divestitures and strategic realignments, which introduces uncertainty and complexity in financial reporting and operational stability in the short term.
Greetings, and welcome to the Conduent First Quarter 2024 Earnings Announcement. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Giles Goodburn, Vice President of Investor Relations. Thank you. Please go ahead.
Thank you, operator, and thanks, everyone, for joining us today to discuss Conduent's first quarter 2024 earnings. We hope you had a chance to review our press release issued earlier this morning. Joining me today is Cliff Skelton, our President and CEO; and Steve Wood, our CFO. Today's agenda is as follows: Cliff will provide an overview of our results and our business update, Steve will then walk you through the financials for the quarter as well as providing a financial outlook. We will then take Q&A, and Cliff will then provide his closing comments.
This call is being webcast, and a copy of the slides used during this call as well as the press release were filed with the SEC this
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