Slide 1: Conduent Q1 2022 Earnings Results
May 3, 2022 Conduent Q1 2022 Earnings Results
Slide 2: Cautionary Statements: Forward-Looking Statements
Cautionary Statements Forward-Looking Statements This document contains “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “estimate,” “expect,” "plan," “intend,” “will,” “aim,” “should,” “could,” “forecast,” “target,”
Slide 3: Cautionary Statements: Non-GAAP Financial Measures
Cautionary Statements Non-GAAP Financial Measures We have reported our financial results in accordance with U.S. generally accepted accounting principles (U.S. GAAP). In addition, we have discussed our financial results using non-GAAP measures. We believe these non-GAAP measures allow investors to b
Slide 4: Q1 2022 Highlights
Q1 2022 Highlights • Adj.Revenue(1): $960M Q1 Results / • Adj. EBITDA(1) / Adj. EBITDA Margin(1): $107M / 11.1% Metrics • New business signings TCV / ACV(2): $464M / $167M • Net ARR Activity Impact (TTM)(2): $102M • Highest Q1 new business signings since becoming Conduent • GM Supplier of the Year a
Slide 5: Operational Highlights & Recognition
Operational Highlights & Recognition A collaborative, team-oriented culture laser-focused on driving valuable outcomes for clients 5
Slide 6: Key Sales Metrics
Key Sales Metrics New Business TCV(1) New Business ACV(1) New Business ARR(1) $500M $464M $300M $150M $352M $210M $107M $94M $62M $200M $167M $100M $250M $62M $290M $100M $50M $148M $166M $—M $—M $—M Q1' 21 Q1' 22 Q1'21 Q1'22 Q1 TCV PSNAP/Other ACV PSNAP/Other 2021 2022 Net ARR Activity (TTM)(1,2) Q
Slide 7: Key Sales Metrics Trends
Key Sales Metrics Trends New Business ACV(1) Signings TCV Signings (incl. ARR + NRR) $2,000M $300M 257 85 293 210 37 48 159 167 55 150 686 464 $150M $1,000M 172 159 166 62 148 145 290 339 $0M 273 825 276 1,461 936 Q1' 21 Q2' 21 Q3' 21 Q4' 21 Q1' 22 $0M Q1' 21 Q2' 21 Q3' 21 Q4' 21 Q1' 22 ACV PSNAP Ot
Slide 8: Q1 2022 P&L Metrics
Q1 2022 P&L Metrics Adj. Revenue (1) Adj. Revenue (1) Trend (Y/Y Compare) $1,500M (5.0)% Y/Y (4.5)% in CC $1,010M $960M $1,000M 1.1% (0.4)% (2.2)% $500M (0.5)% (5.0)% $—M Q1 '21 Q1 '22 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Adj. EBITDA(1) / Margin • Adj. Revenue(1): 1.9% Y/Y $150M ◦ Decline driven
Slide 9: Q1 2022 P&L by Segment
Q1 2022 P&L by Segment Adj. Revenue (1) Adj. EBITDA(1) Contributions Transportation, $162M (43.3)% Y/Y (12.0)% Y/Y (7.8)% Y/Y $17M $83M 1.9% Y/Y 5.9% Y/Y $107M $(47)M $54M Commercial, $512M 0.0% Y/Y Government Services, $286M Commercial Government Transportation Unallocated Adjusted (8.9)% Y/Y Servi
Slide 10: Q1 2022 Cash Flow and Balance Sheet
Q1 2022 Cash Flow and Balance Sheet Balance Sheet • Adj. Free Cash Flow(1): $(65)M ($ in millions) 12/31/2021 3/31/2022 Total Cash(2) $420 $593 • Capex(6) as % of revenue: 5.2% Total Debt(2,4) 1,400 1,296 Term Loan A(3) due 2026 265 262 • Net adjusted leverage ratio(7): 1.5x Term Loan B(3) due 2028
Slide 11: FY 2022 Outlook
FY 2022 Outlook (4) FY 2021 FY 2022 Actuals Outlook Adj. Revenue(1) $4,070M $3,825M - $3,975M Adj. EBITDA(1) / Adj. EBITDA Margin(1) $448M / 11.0% 9.5% - 10.5% Adj. Free Cash Flow(2) as % of Adj. EBITDA(1) Approx. 18% (3) Approx. 15% (3) Restructuring $45M Approx. $40M CapEx $147M Approx. $140M (1)
Slide 12: Appendix
Appendix CONDUENT ss 12
Slide 13: Segment Revenue Trend
Segment Revenue Trend Commercial Government Revenue Trend 0.0% Revenue Trend 9.8% (2.0)% (3.2)% (2.8)% 2.1% 0.3% (8.2)% 1.0% (8.9)% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Transportation Commercial & Transportation positioned for growth in 2022 Revenue Trend •
Slide 14: Definitions
Definitions New Business Total Contract Value (TCV): Estimated total future revenues from contracts signed during the year related to new logo, new service line or expansion with existing customers. New Business Non-Recurring Revenue (NRR): metric measures the non-recurring revenue for any new busin
Slide 15: Non-GAAP Financial Measures
Non-GAAP Financial Measures Non-GAAP Financial Measures We have reported our financial results in accordance with U.S. generally accepted accounting principles (U.S. GAAP). In addition, we have discussed our financial results using non-GAAP measures. We believe these non- GAAP measures allow investo
Slide 16: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted Revenue, Adjusted Operating Income and Adjusted Operating Margin. We make adjustments to Revenue, Costs and Expenses and Operating Margin, as applicable, for the following items, for the purpose of calculating Adjusted Revenue, Adjusted Operating Income and Adjus
Slide 17: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted EBITDA and EBITDA Margin We use Adjusted EBITDA and Adjusted EBITDA Margin as an additional way of assessing certain aspects of our operations that, when viewed with the U.S. GAAP results and the accompanying reconciliations to corresponding U.S. GAAP financial m
Slide 18: Non-GAAP Financial Measures
Non-GAAP Financial Measures Free Cash Flow Free Cash Flow is defined as cash flows from operating activities as reported on the consolidated statement of cash flows, less cost of additions to land, buildings and equipment, cost of additions to internal use software, and proceeds from sales of land,
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations Revenue at Constant Currency, Adjusted Net Income (Loss), Adjusted Effective Tax Rate, Adjusted Operating Income (Loss) and Adjusted EBITDA (in millions) Q1 2022 FY 2021 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Revenue $ 967 $ 4,140 $ 1,048 $ 1,038 $ 1,026 $ 1,028 Adjustment: Divesti
Slide 20: Continued
CONTINUED (in millions) Q1 2022 FY 2021 Q4 2021 Q3 2021 Q2 2021 Q1 2021 ADJUSTED EFFECTIVE TAX Income (Loss) Before Income Taxes $ 210 $ (25) $ (54) $ 19 $ 19 $ (9) Adjustment: Total Non-GAAP Adjustments (175) 239 96 45 42 56 Adjusted PBT Before Adjustment for Divestitures 35 214 42 64 61 47 (1) Div
Slide 21: Continued
CONTINUED (in millions) Q1 2022 FY 2021 Q4 2021 Q3 2021 Q2 2021 Q1 2021 ADJUSTED EBITDA Net Income (Loss) $ 136 $ (28) $ (40) $ 11 $ 12 $ (11) Income tax expense (benefit) 74 3 (14) 8 7 2 Depreciation and amortization 61 352 87 84 86 95 Contract inducement amortization — 1 — 1 — — Interest expense 1
Slide 22: Non-GAAP Reconciliations
Non-GAAP Reconciliations Adjusted Weighted Average Shares Outstanding, Adjusted Diluted EPS, Adjusted Effective Tax Rate, Adjusted Operating Margin, and Adjusted EBITDA Margin (Amounts are in whole dollars, shares are in thousands and margins are in %) Q1 2022 FY 2021 Q4 2021 Q3 2021 Q2 2021 Q1 2021
Slide 23: Continued
CONTINUED (Margins are in %) Q1 2022 FY 2021 Q4 2021 Q3 2021 Q2 2021 Q1 2021 ADJUSTED OPERATING MARGIN Income (Loss) Before Income Taxes Margin 21.7 % (0.6)% (5.2)% 1.8 % 1.9 % (0.9)% Adjustments: Total non-GAAP adjustments (18.1) 5.8 9.2 4.3 4.0 5.4 Interest expense 2.0 1.3 1.6 1.2 1.3 1.3 Margin f
Slide 24: Non-GAAP Reconciliation: Free Cash Flow and Adj. Free Cash Flow
Non-GAAP Reconciliation: Free Cash Flow and Adj. Free Cash Flow (in millions) Q1 2022 FY 2021 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Operating Cash Flow $ 11 $ 243 $ 85 $ 55 $ 105 $ (2) Cost of additions to land, buildings and equipment (34) (80) (28) (13) (25) (14) Cost of additions to internal use softwa
Slide 25: © 2020 Conduent Inc. All rights reserved. Conduent and Conduent Agile Star are trademarks
© 2020 Conduent Inc. All rights reserved. Conduent and Conduent Agile Star are trademarks of Conduent Inc. in the United States and/or other countries.