Slide 1: Conduent Q1 2021 Earnings Results
May 5, 2021 Conduent Q1 2021 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: A Company With Momentum
A Company With Momentum A collaborative, teamwork-oriented culture laser focused on driving valuable outcomes for clients A Great Place to Work Industry Accolades Client Satisfaction Commitment to ESG Comparably Best Global ISG Top 15 Sourcing Index Significantly improved client Disclosed ESG data a
Slide 5: Q1 2021 Highlights
Q1 2021 Highlights • Revenue: $1,028M; down (2.2)% Yr/Yr • Adj. EBITDA(1): $115M; up 19.8% Yr/Yr Q1 Results / • Adj. EBITDA margin(1) :11.2%; up 210 bps Yr/Yr Metrics • TCV new business signings: $356M; up 10% Yr/Yr • New business ARR signings: $95M; up 67% Yr/Yr • Net ARR Activity Impact (TTM)(2):
Slide 6: Growth and Retention
Growth and Retention New Business TCV Signings (incl. ARR + NRR) Net ARR Activity(1) $500M $356M $324M $250M Q1 2021 TTM(2) Net ARR Activity: $87M $—M Q1 2020 2021 Net ARR Activity excludes Non-Recurring Revenue (NRR) and un-contracted volume changes (1) New Business ARR Sales Update $95M $100M New
Slide 7: Positioned for Growth
Positioned for Growth Levers Outcomes A solid foundation is giving rise to Growth, Efficiency and People Quality • Continue to top-grade talent • Shared service centers • Operational improvements in • Driving "One-Conduent" culture and increased associate technology, security and risk established an
Slide 8: Strong Positioning for Profitable Growth
Strong Positioning for Profitable Growth Commercial Government Transportation TAM $146B TAM $29B TAM $11B TAM Growth(1): 3.2% TAM Growth(1): 5.6% TAM Growth(1): 5.5% Drivers of opportunity Drivers of opportunity Drivers of opportunity • CXM automation and digitization should drive • Focus on geograp
Slide 9: Financials
Financials CONDUENT ss
Slide 10: Q1 2021 P&L Metrics
Q1 2021 P&L Metrics Revenue Revenue Trend (Y/Y Compare) $1,500M (2.2)% Y/Y (2.9)% in CC (2.2)% (4.0)% $1,051M $1,028M (5.2)% (6.3)% $1,000M (8.6)% $500M Q1 2020 2 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Revenue $—M Q1 '20 Q1 '21 Adj. EBITDA(1) • Revenue: ◦ Decline driven by lost business from prior years, $
Slide 11: Q1 2021 P&L by Segment
Q1 2021 P&L by Segment Revenue Adj. EBITDA(1) Contributions 58% Y/Y Transportation, $184M 20% Y/Y $30M (2.6)% Y/Y $92M 20% Y/Y $115M (11)% Y/Y $(69)M $62M Commercial Industries, $526M (8.0)% Y/Y Government Services, $318M Commercial Government Transportation Unallocated Adjusted 9.7% Y/Y Industries
Slide 12: Q1 2021 Cash Flow and Balance Sheet
Q1 2021 Cash Flow and Balance Sheet Balance Sheet • Q1 2021 Adj. Free Cash Flow(1): $(33)M ($ in millions) 12/31/2020 3/31/2021 ◦ Above internal expectations Total Cash (2) $458 $399 Total Debt(2) 1,510 1,477 (6) • Q1 2021 Capex as % of revenue: 2.9% Term Loan A(3,4) due 2022 654 624 Term Loan B(3)
Slide 13: Updated FY 2021 Guidance
Updated FY 2021 Guidance Updated FY 2021 FY 2020 Actuals Guidance Revenue $4,163M $4,050M - $4,150M Adj. EBITDA / Adj. EBITDA Margin(1) $480M / 11.5% 11.0% - 11.5% Adj. Free Cash Flow(2) as % of Adj. 28% Approx. 20% EBITDA(1) Restructuring $67M $40M - $45M CapEx $139M Approx. $170M (1) Refer to Appe
Slide 14: Q&A
Q&A CONDUENT ss 14
Slide 15: Sales Metrics
Sales Metrics TCV Signings (incl. ARR + NRR) Cumulative Pipeline $2,000M $30B $21B $21B $22B $22B $22B $21B $20B $1,000M $912M $745M $637M $10B $515M $273M $506M $623M $468M $519M $356M $209M $324M $—M $—B Q4' 19 Q1' 20 Q2' 20 Q3' 20 Q4' 20 Q1' 21 Q4' 19 Q1' 20 Q2' 20 Q3' 20 Q4' 20 Q1' 21 New Busine
Slide 16: Segment Revenue Trend
Segment Revenue Trend Commercial Government Revenue Trend Revenue Trend 8.7% 9.7% 6.8% 1.5% (6.5)% (8.4)% (8.0)% (10.2)% (12.2)% (10.8)% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Revenue Revenue Improving trends and opportunity across segments Transportation • C
Slide 17: 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 busine
Slide 18: 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 19: 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 20: Non-GAAP Financial Measures
Non-GAAP Financial Measures Consolidated 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. GAA
Slide 21: 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 22: 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 2021 FY 2020 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Revenue $ 1,028 $ 4,163 $ 1,055 $ 1,041 $ 1,016 $ 1,051 Foreign currency
Slide 23: Continued
CONTINUED (in millions) Q1 2021 FY 2020 Q4 2020 Q3 2020 Q2 2020 Q1 2020 ADJUSTED EFFECTIVE TAX Loss Before Income Taxes $ (9) $ (139) $ (11) $ (13) $ (64) $ (51) Adjustment: Total Non-GAAP Adjustments 56 337 74 87 104 72 Adjusted PBT $ 47 $ 198 $ 63 $ 74 $ 40 $ 21 Income tax expense (benefit) $ 2 $
Slide 24: Continued
CONTINUED (in millions) Q1 2021 FY 2020 Q4 2020 Q3 2020 Q2 2020 Q1 2020 ADJUSTED EBITDA Loss From Continuing Operations $ (11) $ (118) $ (11) $ (7) $ (51) $ (49) Income tax expense (benefit) 2 (21) — (6) (13) (2) Depreciation and amortization 95 459 115 112 115 117 Contract inducement amortization —
Slide 25: 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 2021 FY 2020 Q4 2020 Q3 2020 Q2 2020 Q1 2020
Slide 26: Continued
CONTINUED (Margins are in %) Q1 2021 FY 2020 Q4 2020 Q3 2020 Q2 2020 Q1 2020 ADJUSTED OPERATING MARGIN Income (Loss) Before Income Taxes Margin (0.9)% (3.3)% (1.0)% (1.2)% (6.3)% (4.9)% Adjustments: Total non-GAAP adjustments 5.4 8.1 7.0 8.4 10.2 6.9 Interest expense 1.3 1.4 1.3 1.3 1.5 1.6 Margin f
Slide 27: 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 2021 FY 2020 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Operating Cash Flow $ (2) $ 161 $ 172 $ 107 $ 74 $ (192) Cost of additions to land, buildings and equipment (14) (76) (28) (18) (19) (11) Proceeds from sale of land, building
Slide 28: © 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.