Key Q1 2024 Highlights Revenue: $921M Pre-tax Income: $127M Adj. EBITDA Margin(1): 7.5% New business signings ACV(2): $99M Net ARR Activity Metric(2) (TTM): $17M FLORHAM PARK, N.J., May 01, 2024 (GLOBE NEWSWIRE) -- Conduent (NASDAQ:CNDT), a global technology-led business process solutions and services company, today announced its first quarter 2024 financial results. Cliff Skelton, Conduent President and Chief Executive Officer stated, "Q1 2024 is a continued reflection of progress in our portfolio performance overlaid by timing considerations and variations across our segments. While Revenue exceeded expectations and Adjusted EBITDA/Margin were broadly in line with expectations, sales performance lagged due to the timing of several opportunities between Q1 and Q2. The diversity of our portfolio is further evidenced by a strong quarter in Transportation, improvement in Commercial and some softness in Government." "Earlier today we announced the closure of the sale of our Curbside Management and Public Safety businesses. In addition, we expect to finalize the BenefitWallet transaction in May. We will continue to rationalize our portfolio to enable future growth with efficient and effective capital deployment." "Finally, as previously stated, 2024 represents what we believe to be the trough in our growth turnaround. With the continued backing of our strong client base, partnerships with some of the leading global technology firms such as Microsoft and Oracle, and 57,000 dedicated associates, we expect continued progress along our 3-year journey and that progress is directly in line with our plan." Key Financial Q1 2024 Results ($ in millions, except margin and per share data) Q1 2024 Q1 2023 Current Quarter Y/Y B/(W) Revenue $921 $922 (0.1)% GAAP Net Income (Loss) $99 $(6) n/m Adjusted EBITDA(1) $69 $90 (23.3)% Adjusted EBITDA Margin (1) 7.5% 9.8% (230) bps GAAP Income (Loss) Before Income Tax $127 $(8) n/m GAAP Diluted EPS $0.46 $(0.04) n/m Adjusted Diluted EPS(1) $(0.09) $0.00 n/m Cash Flow from Operating Activities $(37) $(12) (208)% Adjusted Free Cash Flow(1) $(60) $(37) (62)% Performance CommentaryDuring the first quarter of 2024, we completed the first tranche of the BenefitWallet portfolio transfer, receiving $164 million as the pro-rata share of the purchase price. Following the completion of the second tranche on April 11, 2024, we expect the third and final tranche of the BenefitWallet portfolio transfer to be completed by the end of the second quarter of 2024. As a result of the completion of the first and second tranches of the BenefitWallet portfolio transfer, we prepaid $259 million of principal of our Term Loan B. Other portfolio rationalization efforts include the closure of the sale of the Curbside Management and Public Safety businesses. Pre-tax income (loss) for the first quarter of 2024 was $127 million versus $(8) million in the prior year period. This increase is primarily driven by the gain on the transfer of the BenefitWallet portfolio. Q1 2024 Adjusted EBITDA of $69 million and Adjusted EBITDA Margin of 7.5% were in line with our expectations. Revenue for the first quarter of 2024 was substantially unchanged versus the prior year. Conduent's nearly $1.0 billion total liquidity position remains strong with long-dated debt maturities and a modest net leverage ratio. In the first quarter, we repurchased approximately 4.8 million shares of our common stock in connection with our ongoing share repurchase program. Additional Q1 2024 Performance Highlights Conduent achieved several milestones in technology-led solutions, operational excellence and culture, including: Collaborated in partnership with Microsoft on an initiative across the Conduent portfolio to drive innovation using Microsoft Azure OpenAI Services; Recently partnered with Oracle to streamline transaction processing by the migration of on-premises Oracle Exadata environment to the cloud with Oracle Database@Azure; Recognized as a Leader in CX Services Transformation NEAT - Cost Optimization Focus by NelsonHall; Named "GovTech Top 100 Company" for the third consecutive year; and Named Newsweek America's Greatest Workplaces for Women and Diversity 2024. FY 2024 Outlook(2,3)   FY 2023 Actuals FY 2024 Outlook(2,3)       Revenue $3,722M $3,600M - $3,700M       Adj. EBITDA(1) / Adj. EBITDA Margin(1) $378M / 10.2% 8% - 9%       Adj. Free Cash Flow(1) as % of Adj. EBITDA(1) (1.3)% 5% - 10% (1) Refer to Appendix for definition and complete Non-GAAP reconciliations of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Diluted EPS and Adjusted Free Cash Flow. (2) Refer to Appendix for definition. (3) Refer to Appendix for additional information regarding non-GAAP outlook. FY 2024 Outlook is not adjusted for completed or anticipated divestiture activity or use of such proceeds. Conference CallManagement will present the results during a conference call and webcast on May 1, 2024 at 9:00 a.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 13745034. The international dial-in is 1-201-689-8337. The international conference ID is also 13745034. 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 13745034. The telephone recording will be available until May 15, 2024. About Conduent   Conduent delivers digital business solutions and services spanning the commercial, government and transportation spectrum – creating valuable outcomes for its clients and the millions of people who count on them. The Company leverages cloud computing, artificial intelligence, machine learning, automation and advanced analytics to deliver mission-critical solutions. Through a dedicated global team of approximately 57,000 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 disbursing approximately $100 billion in government payments annually, enabling 2.3 billion customer service interactions annually, empowering millions of employees through HR services every year and processing nearly 13 million tolling transactions every day. Learn more at www.conduent.com.  Non-GAAP Financial MeasuresWe have reported our financial results in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP). In addition, we have discussed our financial results using non-GAAP measures. We believe these non-GAAP measures allow investors to better understand the trends in our business and to better understand and compare our results. Accordingly, we believe it is necessary to adjust several reported amounts, determined in accordance with U.S. GAAP, to exclude the effects of certain items as well as their related tax effects. Management believes that these non-GAAP financial measures provide an additional means of analyzing the results of the current period against the corresponding prior period. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, our reported results prepared in accordance with U.S. GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable U.S. GAAP measures and should be read only in conjunction with our Consolidated Financial Statements prepared in accordance with U.S. GAAP. Our management regularly uses our non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. Providing such non-GAAP financial measures to investors allows for a further level of transparency as to how management reviews and evaluates our business results and trends. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on certain of these non-GAAP measures. Refer to the "Non-GAAP Financial Measures" section attached to this release for a discussion of these non-GAAP measures and their reconciliation to the reported U.S. GAAP measures. Forward-Looking Statements This press release, any exhibits or attachments to this release, and other public statements we make may contain "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," "may," "continue to," "endeavor," "if," "growing," "projected," "potential," "likely," "see," "ahead," "further," "going forward," "on the horizon," and similar expressions (including the negative and plural forms of such words and phrases), as they relate to us, are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. All statements other than statements of historical fact included in this press release or any attachment to this press release are forward-looking statements, including, but not limited to, statements regarding our financial results, condition and outlook; changes in our operating results; general market and economic conditions; statements regarding portfolio divestitures, such as the transfer of the BenefitWallet portfolio and the sale of the Curbside Management and Public Safety Solutions businesses, including all statements regarding anticipated timing of closing of such divestitures; Conduent's liquidity position remaining strong; statements regarding our portfolio rationalization plan, including continuing to rationalize our portfolio to enable future growth with efficient and effective capital deployment; 2024 representing what we believe to be the trough in our growth turnaround; and expectations of continued progress along our 3-year journey being directly in line with our plan; and our projected financial performance for the full year 2024 and 2025, including all statements made under the section captioned "FY 2024 Outlook" within this release. These statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, many of which are outside of our control, that could cause actual results to differ materially from those expected or implied by such forward-looking statements contained in this press release, any exhibits to this press release and other public statements we make. Important factors and uncertainties that could cause our actual results to differ materially from those in our forward-looking statements include, but are not limited to: risks related to pending dispositions, including the transfer of the Company's BenefitWallet's portfolio and the sale of the Company's Curbside Management and Public Safety Solutions businesses, including but not limited to the Company's ability to realize the benefits anticipated from such transactions, unexpected costs, liabilities or delays in connection with such transactions, and the significant transaction costs associated with such transactions; government appropriations and termination rights contained in our government contracts; the competitiveness of the markets in which we operate; our ability to renew commercial and government contracts, including contracts awarded through competitive bidding processes; our ability to recover capital and other investments in connection with our contracts; our reliance on third-party providers; risk and impact of geopolitical events and increasing geopolitical tensions (such as the wars in the Ukraine and Middle East), macroeconomic conditions, natural disasters and other factors in a particular country or region on our workforce, customers and vendors; our ability to deliver on our contractual obligations properly and on time; changes in interest in outsourced business process services; claims of infringement of third-party intellectual property rights; our ability to estimate the scope of work or the costs of performance in our contracts; the loss of key senior management and our ability to attract and retain necessary technical personnel and qualified subcontractors; our failure to develop new service offerings and protect our intellectual property rights; our ability to modernize our information technology infrastructure and consolidate data centers; expectations relating to environmental, social and governance considerations; utilization of our stock repurchase program; the failure to comply with laws relating to individually identifiable information and personal health information; the failure to comply with laws relating to processing certain financial transactions, including payment card transactions and debit or credit card transactions; breaches of our information systems or security systems or any service interruptions; our ability to comply with data security standards; developments in various contingent liabilities that are not reflected on our balance sheet, including those arising as a result of being involved in a variety of claims, lawsuits, investigations and proceedings; risks related to divestitures and acquisitions; risk and impact of potential goodwill and other asset impairments; our significant indebtedness and the terms of such indebtedness; our failure to obtain or maintain a satisfactory credit rating and financial performance; our ability to obtain adequate pricing for our services and to improve our cost structure; our ability to collect our receivables, including those for unbilled services; a decline in revenues from, or a loss of, or a reduction in business from or failure of significant clients; fluctuations in our non-recurring revenue; increases in the cost of voice and data services or significant interruptions in such services; our ability to receive dividends or other payments from our subsidiaries; and other factors that are set forth in the "Risk Factors" section, the "Legal Proceedings" section, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section and other sections in our 2023 Annual Report on Form 10-K, as well as in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with or furnished to the Securities and Exchange Commission. Any forward-looking statements made by us in this release speak only as of the date on which they are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether because of new information, subsequent events or otherwise, except as required by law. Media Contacts:Sean Collins, Conduent, +1-310-497-9205, Investor Contacts:Giles Goodburn, Conduent, +1-203-216-3546,    CONDUENT INCORPORATEDCONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)     Three Months Ended March 31, (in millions, except per share data)     2024       2023   Revenue   $ 921     $ 922             Operating Costs and Expenses         Cost of services (excluding depreciation and amortization)     735       720   Selling, general and administrative (excluding depreciation and amortization)     116       111   Research and development (excluding depreciation and amortization)     2       2   Depreciation and amortization     62       61   Restructuring and related costs     9       29   Interest expense     27       27   (Gain) loss on divestitures and transaction costs, net     (161 )     2   Litigation settlements (recoveries), net     4       (21 ) Loss on extinguishment of debt     2       —   Other (income) expenses, net     (2 )     (1 ) Total Operating Costs and Expenses     794       930             Income (Loss) Before Income Taxes     127       (8 )           Income tax expense (benefit)     28       (2 ) Net Income (Loss)   $ 99     $ (6 )           Net Income (Loss) per Share:         Basic   $ 0.46     $ (0.04 ) Diluted   $ 0.46     $ (0.04 )                   CONDUENT INCORPORATEDCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)     Three Months Ended March 31, (in millions)     2024       2023   Net Income (Loss)   $ 99     $ (6 ) Other Comprehensive Income (Loss), Net(1)         Currency translation adjustments, net     (11 )     17   Unrecognized gains (losses), net     —       1   Other Comprehensive Income (Loss), Net     (11 )     18             Comprehensive Income (Loss), Net   $ 88     $ 12   __________ (1) All amounts are net of tax. Tax effects were immaterial.   CONDUENT INCORPORATEDCONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in millions, except share data in thousands)   March 31, 2024   December 31, 2023 Assets         Cash and cash equivalents   $ 415     $ 498   Accounts receivable, net     600       559   Assets held for sale     192       180   Contract assets     166       178   Other current assets     216       240   Total current assets     1,589       1,655   Land, buildings and equipment, net     186