FLORHAM PARK, N.J. — Nov. 1, 2022 — Conduent (NASDAQ: CNDT), a global technology-led business process solutions company, today announced its third quarter 2022 financial results.
Cliff Skelton, Conduent President & CEO stated, “Q3 2022 was a solid quarter for Conduent, continuing to deliver on our financial and client commitments. Q3 2022 also represented a very strong sales quarter, at just under $200M in new business ACV, and our pipeline continues to expand. We continue to focus on incremental improvements in our sales, operations, technology performance and capabilities to drive sustained success. We are confident about our long-term game plan, especially given recent industry recognition for our solutions and our culture. Regarding the future, clients are focused on reducing spend and vendor costs while at the same time needing partners that can drive efficiency and resilience. Our team of talented associates and technology-led solutions strongly positions us as the partner that can help our clients through these uncertain times.”
Key Financial Q3 2022 Results
|($ in millions, except margin and per share data)||Q3 2022||Q3 2021||Current
|GAAP Net Income (Loss)||$15||$11||36.4%|
|Adjusted EBITDA Margin (1)||10.7%||11.7%||(100) bps|
|GAAP Income (Loss) Before Income Tax||$23||$19||21.1%|
|GAAP Diluted EPS||$0.06||$0.04||50.0%|
|Adjusted Diluted EPS(1)||$0.09||$0.19||(52.6)%|
|Cash Flow from Operating Activities||$98||$55||78.2%|
|Adjusted Free Cash Flow(1)||$78||$23||239.1%|
Q3 2022 Performance Commentary
Conduent’s balance sheet remains strong with an ending cash balance of $587 million, Cash Flow from Operating Activities of $98 million and Adjusted Free Cash Flow of $78 million for the quarter.
Revenue and Adjusted Revenue for Q3 2022 were in line with expectations, however, lower than the prior year period, primarily driven by significant, non-recurring stimulus payments volume in our Government Services business in the prior year, as well as unfavorable foreign exchange impact, particularly from the Euro and British pound.
New Business ACV of $191 million for Q3 2022 increased for the fifth consecutive quarter.
Additional Q3 2022 and Recent Performance Highlights
Industry recognition for technology, solutions, culture and governance, including;
- ISG named Conduent a leader across Digital Operations, AI & Analytics, Work From Home and Social Media quadrants in the 2022 ISG Provider LensTM Contact Center – Customer Experience Services U.S. Report.
- Newsweek named Conduent to its list of America’s 100 Most Loved Workplaces 2022.
- Brandon Hall Group named Conduent as a Bronze winner in the category of Best Certification Program for Train the Digital Trainer, as part of its 2022 Excellence Awards.
- Everest Group named Conduent as Major Contender in Customer Experience Management.
FY 2022 Outlook (4)
|Adj. Revenue(1)||$4,070M||$3,850M – $3,950M|
|Adj. EBITDA(1) / Adj. EBITDA Margin(1)||$448M / 11.0%||10.0% – 10.5%|
|Adj. Free Cash Flow(2) as % of Adj. EBITDA(1)||Approx. 18% (3)||Approx. 15% (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 $32M in 2021 and $27M in 2022, Adjusted Free Cash Flow as a percentage of Adjusted EBITDA for 2021 is approximately 25% and approximately 22% in 2022. Adjusted Free Cash Flow for 2022 also includes an outstanding US Federal tax refund expected to be received by December 31, 2022.
(4) Refer to Appendix for additional information regarding Non-GAAP Outlook
Management will present the results during a conference call and webcast on November 1, 2022 at 5:00 p.m. ET.
The call will be available by live audio webcast along with the news release and online presentation slides at https://investor.conduent.com/.
The conference call will also be available by calling 877-407-4019 toll-free. If requested, the conference ID for this call is 13732835.
The international dial-in is 1-201-689-8337. The international conference ID is also 13732835.
A recording of the conference call will be available by calling 1-877-660-6853 three hours after the conference call concludes. The replay ID is 13732835.
The telephone recording will be available until November 15, 2022.
Conduent delivers mission-critical services and solutions on behalf of businesses and governments – creating exceptional outcomes for its clients and the millions of people who count on them. Through our dedicated people, processes, and technologies, Conduent solutions and services enhance customer experience, increase efficiencies, reduce costs, and improve performance for most Fortune 100 companies and more than 500 government entities. Whether it’s enabling 1.3 billion customer service interactions, touching three out of every four U.S. patients, delivering 45% of SNAP payments, or empowering 10 million employees through HR services, Conduent services and solutions interact with millions of people every day and move our clients’ operations forward. Learn more at https://www.conduent.com