Slide 1: Conduent Q2 2021 Earnings Results
August 5, 2021 Conduent Q2 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: Q2 2021 Highlights
Q2 2021 Highlights • Revenue: $1,026M; up 1.0% Yr/Yr • Adj. EBITDA(1): $128M; up 16.4% Yr/Yr Q2 Results / • Adj. EBITDA Margin(1) :12.5%; up 170 bps Yr/Yr Metrics • TCV new business signings: $775M; up 24% Yr/Yr • New business ARR signings: $115M; up 10% Yr/Yr • Net ARR Activity Impact (TTM)(2): $10
Slide 5: Growth and Retention
Growth and Retention New Business TCV Signings (incl. ARR + NRR) Net ARR Activity(1) $1,000M $775M $623M $500M Q2 2021 TTM(2) Net ARR Activity: $106M $—M Q2 2020 2021 Net ARR Activity excludes Non-Recurring Revenue (NRR) and un-contracted volume changes (1) New Business ARR Sales Update $200M New Bu
Slide 6: Continuing Our Momentum
Continuing Our Momentum CONDUENT ss COMPARABLY Ranked 29th on Comparably’s Best Global Cultures 2021 Disclosure of ESG Practices According to SASB Framework COMPARABLY Awarded 2021 Gold Stevie® Award: Leading Through Digital Disruption Awarded 2021 Toyota Supplier Excellence Recognition CEO Cliff Sk
Slide 7: Financials
Financials CONDUENT ss
Slide 8: Q2 2021 P&L Metrics
Q2 2021 P&L Metrics Revenue Revenue Trend (Y/Y Compare) $1,500M 1.0% Y/Y 0.0% in CC 1.0% $1,016M $1,026M $1,000M (2.2)% (4.0)% (2) (5.2)% (6.3)% $500M (8.6)% $—M Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q2 '20 Q2 '21 Adj. EBITDA(1) • Revenue: $150M ◦ Growth driven by increased volumes in Gove
Slide 9: Q2 2021 P&L by Segment
Q2 2021 P&L by Segment Revenue Adj. EBITDA(1) Contributions Transportation, $185M 12.1% Y/Y (14)% Y/Y 23% Y/Y $25M 16% Y/Y $118M $128M 4% Y/Y Commercial $(69)M Industries, $503M $54M (3.3)% Y/Y Government Commercial Government Transportation Unallocated Adjusted Services, $338M Industries Services C
Slide 10: Q2 2021 Cash Flow and Balance Sheet
Q2 2021 Cash Flow and Balance Sheet Balance Sheet (1) • Q2 2021 Adj. Free Cash Flow : $62M ($ in millions) 12/31/2020 6/30/2021 Total Cash (2) $458 $403 • Q2 2021 Capex(6) as % of revenue: 4.0% Total Debt(2) 1,510 1,429 • Net adjusted leverage ratio(7) of 2.0x Term Loan A(3,4) due 12/2022 654 610 Te
Slide 11: Updated FY 2021 Guidance
Updated FY 2021 Guidance Updated FY 2021 FY 2020 Actuals Guidance Revenue $4,163M $4,100M - $4,175M Adj. EBITDA(1) / Adj. EBITDA Margin(1) $480M / 11.5% 11.25% - 11.75% Adj. Free Cash Flow(2) as % of Adj. 28% (3) Approx. 20% (3) EBITDA(1) Restructuring $67M $40M - $45M CapEx $139M Approx. $170M (1)
Slide 12: Q&A
Q&A CONDUENT ss 12
Slide 13: Sales Metrics
Sales Metrics TCV Signings (incl. ARR + NRR) Cumulative Pipeline $2,000M $30B $21B $22B $22B $22B $21B $21B $20B $1,000M $825M $912M $745M $637M $10B $515M $273M $623M $775M $468M $519M $356M $324M $—M $—B Q1' 20 Q2' 20 Q3' 20 Q4' 20 Q1' 21 Q2' 21 Q1' 20 Q2' 20 Q3' 20 Q4' 20 Q1' 21 Q2' 21 New Busine
Slide 14: Segment Revenue Trend
Segment Revenue Trend Commercial Government Revenue Trend Revenue Trend 8.7% 9.7% 6.8% (3.3)% 1.5% 2.1% (6.5)% (8.4)% (8.0)% (10.2)% (12.2)% (10.8)% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Revenue Revenue Improving trends and opportunity across
Slide 15: 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 16: 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 17: 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 18: 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 19: 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 20: 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) Q2 2021 Q1 2021 FY 2020 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Revenue $ 1,026 $ 1,028 $ 4,163 $ 1,055 $ 1,041 $ 1,016 $ 1,051 F
Slide 21: Continued
CONTINUED (in millions) Q2 2021 Q1 2021 FY 2020 Q4 2020 Q3 2020 Q2 2020 Q1 2020 ADJUSTED EFFECTIVE TAX Income (Loss) Before Income Taxes $ 19 $ (9) $ (139) $ (11) $ (13) $ (64) $ (51) Adjustment: Total Non-GAAP Adjustments 42 56 337 74 87 104 72 Adjusted PBT $ 61 $ 47 $ 198 $ 63 $ 74 $ 40 $ 21 Incom
Slide 22: Continued
CONTINUED (in millions) Q2 2021 Q1 2021 FY 2020 Q4 2020 Q3 2020 Q2 2020 Q1 2020 ADJUSTED EBITDA Income (Loss) From Continuing Operations $ 12 $ (11) $ (118) $ (11) $ (7) $ (51) $ (49) Income tax expense (benefit) 7 2 (21) — (6) (13) (2) Depreciation and amortization 86 95 459 115 112 115 117 Contrac
Slide 23: 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 %) Q2 2021 Q1 2021 FY 2020 Q4 2020 Q3 2020 Q2 2020
Slide 24: Continued
CONTINUED (Margins are in %) Q2 2021 Q1 2021 FY 2020 Q4 2020 Q3 2020 Q2 2020 Q1 2020 ADJUSTED OPERATING MARGIN Income (Loss) Before Income Taxes Margin 1.9 % (0.9)% (3.3)% (1.0)% (1.2)% (6.3)% (4.9)% Adjustments: Total non-GAAP adjustments 4.0 5.4 8.1 7.0 8.4 10.2 6.9 Interest expense 1.3 1.3 1.4 1.
Slide 25: Non-GAAP Reconciliation: Free Cash Flow and Adj. Free Cash Flow
Non-GAAP Reconciliation: Free Cash Flow and Adj. Free Cash Flow (in millions) Q2 2021 Q1 2021 FY 2020 Q4 2020 Q3 2020 Q2 2020 Q1 2020 Operating Cash Flow $ 105 $ (2) $ 161 $ 172 $ 107 $ 74 $ (192) Cost of additions to land, buildings and equipment (25) (14) (76) (28) (18) (19) (11) Proceeds from sal
Slide 26: © 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.