FLORHAM PARK, N.J. — May 03, 2023 — Conduent (NASDAQ: CNDT), a global technology-led business process solutions company, today announced its first quarter 2023 financial results.

Cliff Skelton, Conduent President and Chief Executive Officer stated, “Q1 Revenue and EBITDA met expectations. This performance is another proof point of our continued momentum and ability to execute with predictable outcomes.

Q1 sales, as expected, were lower year-over-year for the quarter due to several large deals that are now expected to manifest in Q2 and beyond, including large contracts, specifically in the public sector. Our pipeline is strong across all three segments and we remain optimistic regarding full year 2023 sales.

In our March Investor Briefing presentation, we outlined our focus on Government Healthcare, Real-Time Payments across the three segments, geographic expansion, and a rationalized portfolio. Q1 represented the first step on that journey. We are proud of our start to the year and look forward to continued success in 2023.”

Key Financial Q1 2023 Results

($ in millions, except margin and per share data) Q1 2023 Q1 2022 Current
Quarter
Y/Y B/(W)
Revenue $922 $967 (4.7)%
Adjusted Revenue(1) $922 $960 (4.0)%
GAAP Net Income (Loss) $(6) $136 (104)%
Adjusted EBITDA(1) $90 $107 (15.9)%
Adjusted EBITDA Margin (1) 9.8% 11.1% (130) bps
GAAP Income (Loss) Before Income Tax $(8) $210 (104)%
GAAP Diluted EPS $(0.04) $0.61 (107)%
Adjusted Diluted EPS(1) $0.00 $0.10 (100)%
Cash Flow from Operating Activities $(12) $11 (209)%
Adjusted Free Cash Flow(1) $(37) $(65) 43%

Performance Commentary
During the first quarter of 2023, Conduent held an investor briefing to communicate the next chapter in its journey. The company’s intense emphasis on growth, quality, and efficiency, beginning in the first quarter of 2020 resulted in a strengthened foundation. The company remains focused on accelerating growth and enhancing value for its stakeholders. Conduent intends to achieve this by doubling down on key themes outlined in the briefing, as well as through a process of portfolio rationalization, that we believe will result in a more nimble and faster growing company with modest levels of net leverage, enhanced valuation, and significant excess capital to be deployed over time.

Conduent’s $1.1 billion total liquidity position remains strong with long dated debt maturities and a modest net leverage ratio.

Q1 2023 Highlights
Conduent achieved several milestones in technology-led solutions, operational excellence and culture, including:

• • Introduced first-of-its-kind digital payment solution for tolling that enables fast, secure and convenient real-time payments for toll agencies and drivers;
  • Selected by Virgin Atlantic to support customer experience;
  • Launched IntelliHealth Module to help pharma organizations with faster and more effective product commercialization;
  • Awarded contract for new Medicaid Management Information System in New Mexico;
  • Implemented advanced, cloud-based system for child support payment processing in New Hampshire;
  • Ranked as a NelsonHall NEAT Leader for Cloud HR Transformation; and
  • Certified as a Most Loved Workplace® for the second year in row by Best Practices Institute.
  • FY 2023 Outlook(4)

FY 2022
Actuals FY 2023
Outlook (4)
Adj. Revenue(1) $3,851M $3,700M – $3,800M
Adj. EBITDA(1) / Adj. EBITDA Margin(1) $394M / 10.2% 10.0% – 10.8%
Adj. Free Cash Flow(2) as % of Adj. EBITDA(1) 1.5%(3) 15% – 20%(3)
(1) Refer to Appendix for definition and complete Non-GAAP reconciliations of Adjusted Revenue, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Diluted EPS and Adjusted Free Cash Flow.
(2) Refer to Appendix for definition.
(3) Normalized for the impact of payment of deferred payroll taxes primarily related to the CARES Act of $27M in 2022, Adjusted Free Cash Flow as a percentage of Adjusted EBITDA is approximately 8% in 2022. Adjusted Free Cash Flow for 2023 includes an outstanding US Federal tax refund of $29M expected to be received in 2023.
(4) Refer to Appendix for additional information regarding Non-GAAP Outlook.

About Conduent
Conduent delivers digital business solutions and services spanning the commercial, government and transportation spectrum – creating exceptional outcomes for its clients and the millions of people who count on them. Through a dedicated global team of approximately 60,000 associates, process expertise, and advanced technologies, Conduent’s solutions and services digitally transform its clients’ operations to enhance customer experiences, improve performance, increase efficiencies and reduce costs. Conduent adds momentum to its clients’ missions in many ways including delivering 43 percent of nutrition assistance payments in the U.S., enabling 1.3 billion customer service interactions annually, empowering millions of employees through HR services every year and processing nearly 12 million tolling transactions every day. Learn more at www.conduent.com.