CNDT - Earnings call transcript Q2 2020

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Operator

Good morning. Welcome to the Conduent Q2 2020 earnings conference call and webcast. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask a question. is event this note, being recorded. Please now Mr. would like to to over conference the turn I Vice of Katz, Alan President Investor Relations. Please go ahead.

Alan Katz

Good to Conduent's gentlemen and XXXX and call. evening, earnings second ladies quarter welcome

Skelton, on Conduent's CFO. call me Joining is CEO Brian Walsh, today's and Conduent's Cliff

we was prepared your take sheet SEC slides Investor afternoon. filed being with remarks, is slides used as questions. of Those a metrics A the are copy the Following download the call detailed well during also on will section our Relations This webcast. Conduent for this financial as call website. available this the of

We this later will week. a also post transcript

GAAP, they results a U.S. viewed Because measures. be substitute calculated today Form these non-GAAP new expectations During financial this company's their these events matters materially in financial assumptions uncertain. do that should the of SEC. the with comments in filed intend a today, Private to current contain includes accordance call, Securities included future differ to may except and These prepared X, reported management's measures are as U.S. that Litigation are addition concerning result Information with statements with in not in not developments, or to The update factors Annual nature, as certain reflect address the presented the for subject to Conduent's information law. on and number of factors these forward-looking accordance Report make information XXXX from statements. and by GAAP. in in and that forward-looking a of Reform are statements XX-K is that, as those defined executives future statements We results of are Conduent as actual or Act by beliefs, may August XXXX cause as not required

SEC see our well their our as now for comparative and use limitations non-GAAP please For that, definitions Cliff? how and purposes, usefulness over With was I this was Form which call more measures his Cliff prepared issued we to to X-K. as information will to afternoon of for on the press the regarding release, them as turn remarks. furnished

Cliff Skelton

to certainly the course understand Conduent. changed, sure on world Alan. appreciate Conduent, earnings has and quarter are your safe. everybody call remains welcome hope joining afternoon I everyone up showing I well. I here is my earnings at second today. call the ago. everybody are doing at since year about but CEO Thanks lot A This hope Good fifth I appreciative stage. a I the tough. today. Things here everyone families and becoming

So thank you.

it, the really So of all off of. first associates team like significance all acknowledging said. a helped start progress. And job of I I done with I us Conduent the COVID's a great been have by make as tough, would that has and lot our appreciate

of tenured our by work of hard And those to see are four, is off. those today, we The our you fundamentals the great our starting you say pay team. the improving. some due some so hard just company our of the slide clients and associates, that some really early those work a of on examples folks. are on lot feedback to And is, that's bottomline of really returns that As going associates from and of It's performance. our our and new are of had the to some see as both proud

I the and dive will go over into later. the agenda details quickly me Let

discuss We high are going quarter, to level financials from always. the the as

about results. talk sales will our improved We

of to the go COVID that, deep businesses. we and I turn Brian over negative will detailed the offsetting the of and through and and We it After more will quarter. a our financials to will certainly touch our transportation outlook on third lot for on both impacts government run

not give we about what to to for going are we you to expect talk We year, going but the guidance are in QX.

we questions end, the and will always. go we then at as So will through take that

Certainly quarter. to on everything good QX world, five. quarter, in let's say, Now going you to and it really was EBITDA, was would compare a I in $X with were. external internally adjusted especially of a million. we as and what the EBITDA turn over slide our Revenue actually thought QX and of adjusted just billion Revenue higher. came expectations was $XXX what both good

Now did certainly quarter talk to the tailwinds associated the of go we through COVID. headwinds overview about give what with where but brief as I happened going where is we and the well, Brian and a in said, details I and will outperformed the

first. revenue little we about we talk to me anticipated. had let tolling were our are In where showing little transportation we the worried, ourselves a business, segment especially So previously in more than be resilient a

While the actually lower stay at traffic lead seeing increasing. are orders home did volumes, to we

increases at those that in were and imagine fact, of volumes can that. states some XX% than pre-COVID much lower some state-by-state. And you vary As

due Clearly, performed other government really payment to our QX, especially business Our subsidy well volumes. and that's unemployment government in business.

volume So we have to there continuing. we seen looking forward that some and are real good

margins relates it to helped in QX. show it efficiency As efforts to our working up EBITDA, are our and cost and our

significantly good $XXX program you expect of news were expenses. And Now we million that we the to about QX, where the back in reducing incrementally to year. surpass is, for we talked a XXXX

news other those are XX% is, The good of permanent. savings

is good to is effort, that, and going which that a talk the we point to see $XXX jump So about million XXXX, contribute Brian to off for help really exceeding thing. which is

signings go quarter. strong slide. was not really I strongest it on next that business a note spun through we the only a public the strong quarter of since but was become new it I company. will But details the will to sales, Regarding separate

focused Now we are going intently on be operations. to always

both We to quality. here operations on will we about that minute. continue in And and talk focused be a

improved aggregate performance our operational continued stability helping in are with technology reputation. compared retention last with client and with incidents Our really year. to helping which is improve FEWER

associates of to back lot have XX% home, have offices of to makes and where them, a working it a folks from started slow we very those of bring sense. while measured approach Lastly, some

we Now prudent conditions prudent, large geographies, are can home good be certain work in COVID workforce will we in working based a as expected in we home. we it. to cases will environment news of from most we we levels is, have be speaking those that and deliver in The still continue to pace our maintaining are on got generally with and service portion specific

And all-in-all, time that to this it's to We every bottom consistency. And grow growth. we the situation, both need show given But I So top am since spin. clear, current need we we can over pleased has you not be grown need do the this quarter. quarter. global with company quite and to

right is indication is approach mission And the we that and changing with think is a to early that and of to Our we the it. way it's that but right good are mission make QX change team too declarations achievable. growth

turn slide talk to obviously a that want detail in Now sales I of growth which higher to about is expectation. level six. let's to long term critical

you last business last ramp in year business, two. can revenue while. with can a this As respect a sales It signings on or new know, to

term business both to to growth. got to have good so revenue retention XXXX add sales near achievement. pivotal and on because And and that And these the contribute see news continue XXXX directly it's add-on we business, strong is

TCV XX% new the $XXX mentioned, So of XX% as and improvement the spin I have a since strongest we last over business signings. million quarter. with That's signings year-over-year improvement

is, term we longer some another deals due these longer term terms uptick of also we in annual that that to some deal. good and significant Now, news deals revenue experienced new of of signings. experienced the drove the some year increases But

we retention that future. well half for previously focus quality that some $XXX the That's we $XXX improved of that So continue bode In we to talked and business. believe And new going XXXX, if and the account due the pretty XXXX. improved us we it momentum about strong. keep with management, program signed million million really to on does all compares first of in of

a well, sales better ask, might better you team is is, it's leadership. stronger stronger and and view sales my So And sales process, that? it's why

isolated and win created approach have us and have bid. helps rates. That team we team. selective also And bid to more win to dedicated sales not We better created the when with the a a

are we can we what we do feeling pretty think sanguine on for So the year.

have client is, Just we that to product you color, leading on news included of the in of give deal deal couple thus XXXX, services. The a examples out remember we validating where the the bit commercial you of wins a HSP a new with that of from marketplace. leverages the little might a acquisition providing including a signed company healthcare managed-care slide good

are going child annually. provide government of in big We Health Human Department billion and Services we with deal support also Michigan's where a state $X.X benefits signed to

finally, line not we the metrics and So the see two about forward tolling And signed one. where But a know, getting to you and system on running we seeing Ohio's to are in goal improve retention over big gong automated that we started we client to are just to We and be transportation the project. signings. new on looking and big that really a getting It's of one are add-on business, business proud tolling deals. it's as new need that. contract continue

Our $XX now is at pipeline billion.

provides some So improvement That there. there is some real runway.

hand be to in our success. with client that. that quality confidence always, critical glove As And goes going to is

so us. a that, we I that got, And said, client think we reference continuing ahead better focus again, ability. on better confidence, client to make of we have And have we to are runway sure good as with

whether QX. is QX. QX Now know going replicate don't We to

growth And are quota. this calls. already However, will about earlier that are we sales that I of to you QX. that XXXX importantly, talked we I halfway terms QX performance there XXX% year-over-year against for achieving in earnings sales to can committed we And tell year in grow you in

to So we for And XX% of goal our our full way the are that's year good as year. news. mentioned,

sanguine COVID. let's update sales, With that's turn to very slide So are again, we are but on for keep that, got we the we to an down doing. and on what seven pedal have

the QX. As discussed COVID-XX you might on call we QX some of impacts recall, in

said we real there be transportation significant that volumes would as stay a our in First, of home at contraction orders. result

expansion finally at but varying varied degrees. all that by some segment, we of interest services would BenefitWallet. we what of our an we the commercial that impact It said impact And work, by there be we revenue. also experiencing would to volumes business, government including stay varied It there change. how the are by transportation payments And varied despite to our particularly nature said in rate work. We of said experience, would volume generate be we also that the revenues to the home orders, In product.

we business then transaction commercial saw it's processing and there's rates volume reduction the comp, payments Act, reflects workers government muted far and generate than of from and expected on us that healthcare home. assistance services The additional the Act. was services is the we more automotive, so significant And payments seeing anticipated example, per All QX segment about federal the revenue to about the by in increases leads processing insurance, volume triage space, also business $XXX in by space, diversity earlier In lower that much slightly that's which expectations rates was month QX where where of we for significantly in to CARES modeled somewhat the might impacted working it the were nurse Regardless Unemployment to we is speaking. thought than government pressure and mailroom initially banking travel in transaction due talked good to and the usage where CARES and even of And review, activity well as from volumes. in we the in to down you results. call. though, talked we we And our employees perform know, before. and we that than and stronger earnings generally was other bill news hand transaction volume for transaction healthcare that as are the QX. revenue more lower than the government dental volume in due initial less our in the anticipated. anticipated That's under that you by portfolio offset

So a thing. that's good

government we that, that irrespective in So are going optimistic Washington we on but on as know, lot quite of services business. a

good So a thing. that's

the while benefit subsidies offerings I where in food Pandemic and the Additionally, of diversity that. higher get we can P-SNAP that might program get of might normally But and school how business mentioned, in area fall of cards it lunch a in of good putting are called are see at or schools from programs lunch closed. cards usage who free or markets kids subsidized shows we school as on SNAP through these some see that's really as thing a will have SNAP Obviously turbulent the help. schools heard our you our

And countercyclical some of lower in of terms these economic are actually offerings activity.

So that's again diversity. about all

might But on We ask, well, rest a let expectations me some commercial about what I we think the don't you ball here. are crystal the you stays. pressure likely So based year? the seeing. of what have volume give

Although as we modulate we there do as starting we where on to it's transportation see And are been on work to have back are take really it ball outsource to they step to In additional as trying of might up. it, to the tell. cost some year, are volume not it client second these to the of start from they able to look pressures. in up segment, clients working that the half competitors we work, their they too early more see, catch which are own to

on are watching state-by-state COVID We conditions. based

good state-by-state that equation stay expect to things way the Your going, to to more I mentioned volume, to guess open a up. are as And we going as mine when be earlier. of it is elevated. things it's Back government services as

space been the That in have Just prior compared in of increase the we benefits that additional shows dramatic for unemployment out X.X unemployment claims million with note, quarter all the we seeing. sent cards benefits.

are in it saw business. We there. we in our are certainly XX% that. that to program. If volume And you seeing SNAP you and back And experiencing P-SNAP news, the watch increase

to P-SNAP that up expect we in space. modulate So consider even and the

in knew timelines lead No or called definitely to On in that We to for the gravity last call, business $XX we government said, one incremental would million $XX under volumes an we increased revenue. thought the million COVID. it.

now and the commercial higher to hard really reduction offset I cost that that number transportation obviously continue work we And on of of it course, talked to to of higher. expect so because And some about, transportation endeavors. efficiency of be some to and And commercial. to be needs in that we and impacts previously

eight. about a are bit those want focal I cost an me updates view to In COVID, heard did talk talk And so our And of savings is point pillar that to little preservation, about big efforts focus slide on cost transformation efforts. on that we and focal for doing. cash efficiency us previously that us you maximize a point increased allows which certainly

on overachieve As more will talk I target as $XXX And going some that next which Brian is efforts, temporary to target his remarks. both as into mentioned, million focuses in term we reduction that year. expense well expect continue that expense to COVID-related reductions about and long

to have facilities. those things from COVID, we to focused of impacts respect on with for have furloughs, parallel So COVID. All temporary to things related the we we timing got actions reduced like spend tend are the travel, got

seeing the are and those spans looking if we ones, you to permanent are will. because to maneuvers, organizational longer before expense spend. things With we looked at like of offsets we layers, impacts and term respect so And the haven't at vendor the COVID

efforts. that we ready finally, that different beginning well process Q&A. for will improvement. He to touch focus Brian He our looking QX. is efficiency type migrate of His will on of to We to as overhead new on implement operations talk are phase And at a to will going We certainly in drive lean methodology shared corporate shared new service. be allocation be head hired a in and focus and these in increasing usage a transportation. about intend to we services. efforts of job on

finding over were efficiencies the place. So all

footprint looking are the We And balanced Conduent term from at the in equation estate or real offices to an from to migrating work and versus a the more very soon. we modulating short well are work will long have we home term. for as certainly equation,

there, running from all going savings see and are to can these can. we after as each you as items of efficiently graph ensure these line are one we as So the categories across we

work do. more got to have a We lot

of news our are are But already pillars, across on is, a seeing And cases fundamental the seeing a we well are and in more quality, way have efforts to in we turnaround. those of we work signs growth, across While lot do. we terms all good the efficiency improvement in some three the three.

as finally by have the our the So our now of starting if about is nine, we and talked efficiency hold. to we their hold. noting been opportunistic as further of always portfolio let's critical, taking forward discuss turn slide will, will way to is will It quality nature plan I And while, you start while to to of efforts. radar, complexion other strategy basis. in of a discussing considerations this growth, go find transformation the products past, more and regardless our take on is or that

our In talent., talk be we seamless operating model. that size addition, in to And commands continue migration our of discussed and support will that team data build to great and history, incidents fully completed improve And sales to based I continues drive times. reduced we is our large a to center without and coordinated about our that another strength center and yet Q&A ready In out and certainly more regard, it we clients. operational. tap on impact those interestingly, the also resolution to

proud very teams So we for our are that. technology of

retention. we leads client in sales to improvement leads So transformation addition place operating a and performance and continued this we we lead stronger success think environment. will client it it We to think to program put in that think

acknowledge, progress progress first that seeing. showing to committed to So you now, see is more. are Brian, see before over are we we I hope to to it same But and it I I the want turn great

improvement. we it continued critically, way will lead growth. is, The obviously reputational to in It's shoots a until talking QX enhancement. the line are lead my top indication. That But any early numbers and It those to and for. rebuilds an aren't are downturns. leads have journey. said, making that And quarters make demonstrate We consistency of can sales is margin improvement the hoping trend. satisfied a faster view, a we will bottom green and to than that news good working. how don't it's this about are we in been no indication Two are changes good And

In But now is show is time to for foundation quite It the opposite. some you fact, this consistency. and turnaround built. maybe the continuity some

what that's to So intend do. we

very am to business. proud talent I Conduent. I I their talent am Finally, to within Conduent the us am lead want the who to care draw machine for we to continue and have keep very to proud opportunity clients entrust going. with great the this proud to to And

want to Brian I your our So you much the time thank it as talk like and financials. detailed over turn I clients to about Thank well. would for very to to

Brian Walsh

I Thanks great work sales. our Cliff. start am the and from on I note. It's progress off will to team. hard delivery operations extremely in a proud see same of

constant begin COVID-XX revenue and slide note compared our and the the XX $X non-GAAP adjusted our on of reporting in COVID. and I financials, to lost X.X% related down billion, with transportation we our start quarter related X.X% will COVID-XX COVID-XX These or results the that GAAP P&L the quickly approximately the driven for I less in prior government was driven better segment. by than currency. will segment filing of commercial the and pressure reconciliations to in year on the in a transportation a I volumes on in offset impact are EBITDA. Before Revenue and are segments are last perspective, year-over-year year and the results consolidated strong review from by impact of government the and presentation. both expected, going our The quarter growth primarily appendix at second From numbers. business to COVID-XX

want The execution we a QX. in better expectations. less excluding seeing strong of have on performance we the revenue of performed approximately usual better COVID. progress the net highlight cost are result we separate as our This is than trending topline the million you impact total COVID-XX program visible impact an from most when how I to positive discussed, business. Cliff are business As and this COVID-XX takeout from impact for making that environment. It's business COVID-XX, would believe $XX in trend topline was of from a and

without As midpoint million year-over-year impact was X.X%, the we quarter the COVID-XX, impact have $XXX the had to XX for Cliff EBITDA on the year. The cost improved quarter progress in anticipated start a while of in the to at of decline the X% the to X% Adjusted a EBITDA EBITDA XX.X%. temporary that revenue savings approximately we would mentioned, including the X% estimate year-over-year net had adjusted been decreased decline improvement than program. actions. $X that of the margin of better benefit adjusted by margin points million, the result negative our basis cost of COVID-XX

the and been of EBITDA the XX.X% these would approximately quarter. impact cost our margin for Excluding COVID-XX actions, adjusted have

be addition consistent for which actions, by actions anticipate position to well the year with taking approximately restructuring program. Restructuring the last into elevated reduction enter million cost In call. $XX also we the at our driven as We of XXXX. as million, to $XX us expense was for spend and our permanent are our quarter we should temporary outlook

better the that expectations business pleased our performed are for We QX. than

exit and EBITDA year-over-year. revenue and was down XX.X% prior to basis reduced a Let's In declined lost labor declines by expense. quarter, estate adjusted business. by Adjusted partially turn impact results. the XXX the down rate margin was were BenefitWallet The to driven second offset volume IT business, XX to the COVID-XX over while cost driven year the XX.X%, of go revenue primarily business primarily segment related slide points real XX.X% declines pressure, related interest of commercial were and contract our by EBITDA

partially Government quarter. is contribution California a percentage offset have declines. contract. to anticipated business This for the total company point by Medicaid to COVID the primarily impact related contract transition Originally, due to EBITDA government work That points. improvement increased related by to and year-over-year the Medicaid adjusted would benefit a cost the reductions. of X.X% by margins we three The now margin driven COVID-XX this work while continue in percentage closer as Our basis higher XXXX grew we of volumes EBITDA adjusted XXX expected year. be focused two point XX.X% to was from volumes, increased the California was XX.X% by loss increasing from

segment the of forward. on manage We align of detail business segments expect the to and QX This cost XX.X% earnings In allocate our Our by X.X% to expect the revenue, partially provide to we how international three unallocated corporate spend Adjusted related a transportation should last down basis our the segment the margin driven XXX offset This to IT XX.X%, declined and was shared visibility with year. into IT COVID-XX by of each pressure, revenue was reductions. greater of work. unallocated review XXXX, primarily quarter volume by and XXXX. $XXX Adjusted plan to by provide labor and with update driven program. result focus. was lower for X.X% driven by compared our our quarter This second expense compared by new the partially EBITDA reduced call. QX lower was offset transit by driven the up points an the we cost In segments. quarter, a than cost moving cost QX and costs million, second as XXXX, QX in year-over-year, intense will more disclosure profitability EBITDA to were portion

XX slide to to discuss our turn flow. cash sheet balance strength now the of Let's and

be the Our healthy balance million sheet to with cash second at quarter. $XXX end of of continues the

target the end and ratio quarter two leverage the turns. was net X.X turns at long to leverage term net Our remains X.X of our for

We continue position. solid to have liquidity a

on of to end as available the cash addition quarter. approximately capacity $XXX had In of our hand, revolver the our of million

quarter debt capital the looking the the was Our tax a first current the isn't the over the course CapEx flow Act. $XX quarter working was million, deferral timing million and quarter was Operating at to or conversion year. until increase the was also options $XX for $XX and million next cash along end for payroll will quarter cash X.X% of last we million and primarily maturity. the benefit events and XXXX inflow the refinancing This of related major of be million $XXX maturity had representing over year adjusted free an flow revenue. the for $XX XX.X% by from quarter an of same the in CARES driven we

We still in $XXX XXXX. in are spend to million expecting approximately CapEx

Let's move on to our for on expectations slide QX. XX touch to

Given the throughout refrain to formal guidance. trends going are we COVID-XX year country, seeing are the in reinstating full cases recent we XXXX from

COVID-XX if outer the that However, we our revenue thought for with significantly, expectations expectations range. is current resiliency. are towards of $X.XX could helpful an it XX.X%. we would be $XXX EBITDA business Despite of quarter all We impacts change These anticipate see our of for push that three. current has it showing but to quarter and us billion between COVID-XX based brought, bounds million to situation adjusted the on discuss challenges today, be this the the will margin between XX%

for deliver thank to transformation and continuing their continued our showing progress. I associates, is our and are want to support. for our clients We clients shareholders

We questions. up will now lines Operator? the some for

Operator

[Operator Instructions].

First question with come is Puneet JPMorgan. made today ahead. will from go Please Jain

Puneet Jain

in result traction specifically up taking Hi. for business in my that and much. bookings, signings solid Thanks so good to see new question. were Great

conversion some there? question words, how Conduent? cycle accelerated the those So Did sales is, in pipeline? of were activity what's deals Or for recent pandemic in a signings of other you won, long in of deals the the so there renewed some driving

Cliff Skelton

Puneet. question, It's a great

business see a So do of couple what to little what we said. COVID. Very is ingredients with there to just has the signings anything you in new

is but or as signings, if a of think million little $XXX $XXX new business you so bit really P-SNAP the of irrespective that in It's million in there, So of there about COVID. business is usual.

management So and talent, teams, one. about more sales improvement, completely certainly lot number different. for that's leadership. the is point that a us Point upgrading bid the process It's number dedicated process governance, is two

so And sales a changed environment. it's

we of bidding on $XXX we are we that shot TCV up, have driving tenure and the it around million, others. to think messing are in With at up. good not We with deals is respect things the

or looking revenue our the because are length all high quarters we top XX% that the year. of cases at you it in upwards and on on previous up, So roughly threes, neighborhood from fours. good quarter-over-quarter, basis, last average what we the good, look X.X news XX% we and it year some longer above creates versus were are while that, of or deal a it's quarter-over-quarter if year-over-year we into of are But on up streams of at basis ARR in in

not So up the annual the is revenue up. TCV deal up, length is only recurring the is but and

all seeing we progress three So buckets. are in

Puneet Jain

it. as that's revenue for or the cost steep report headwinds while for near too but one in cuts reasons And the positive in cutting, obviously you the term, Got past. upside deep were of

So cost how you managing are starts high benefits with from balancing execution?

Cliff Skelton

about with are temporary Yes. bit about The this XX% different. way of over those those neighborhood is, year The think in numbers. that XX% are Roughly of way will cuts it's and million it to to are COVID XX% XXXX volume. directly the associated this exceed think $XXX little to which a

to right. need to goes we down, permanent bone. or or close on so volume the you making We as sure is XX% cut as correlated expenses attention appropriately sure intent to and go pay our don't into are to want it down make or as we focus So of exactly possible.

combine will can in I to well. But drive with it's just create not more call, automation and and shared do as are involve to talent smartly obviously services reductions. changes, and more XXXX. we it But somewhat is, what what it way of different plays drive, going we of grow this will controls, then efficiency arbitrary operating don't seeing along that from done And or at that's will completely that angle. what have swaths we rifts, looked an from opportunity I what looked call areas model it to instead just time just have we we we this wide of just areas say spans where so we think We And those people. at would are some people a where might and

Puneet Jain

Thank Got it. you.

Cliff Skelton

bet. You

Operator

next Cross question go from Cross come with will Research. Please And ahead. the Shannon

Shannon Cross

much. unemployment signings? And to may Fed should or balancing money, the very benefits off was some thinking of in we think money related think new the How not of the are against new a as how you signings can bit about from theory, where that trajectory? should that, come Thank wondering, in we you and through? that contribution the something Is may about falls from could be Federal talk the this you how seamless continue? fairly theory, and I that about pandemic

Cliff Skelton

I do ahead not -- Go Brian. think

You take it.

Brian Walsh

Shannon. Hi Brian. This is

any want contemplated just for assuming high of would say end not At then, The low end, those Cliff. to guidance I August But ahead, the does first for range, we being September. are So midpoint, extension And extended the QX government of the not. supplement. the range. the go unemployment and Federal midpoint

Cliff Skelton

expected in saw a thought is we with about be that No, of in which COVID, look we what net of But usual current to. go to lot anyway. on to for see those mostly all he last we P-SNAP, to it what we continuing, a -- knowing improvement thought $XX despite definitely what Shannon, what see as you a year both not would when QX. basis, see might we it Brian's the $XXX it's what out $XXX or we about we which are on it month, probably we $XX say in seeing And would budget a we million excess of unrelated are our also I what well what be, businesses excluded was see if we has extra upswing, in and And that thinking unemployment at, going which excluded to the continuing you are that which is, basis. million, we

Shannon Cross

situation trying think continue or about, Just hold set, should then, versus about pandemic And this all when how Great. ones where Thank go profile signing? are get you. into Okay. the at new the are margin should contracts, the for least and in improvement which we when to margin determining of are you is you get RFPs don't? we these signing through contracts you think you there? you the a next How

Brian Walsh

Yes.

company. target that the new deals, looking So margins at than when of we margins the business current better we are are

higher deals, the company a signing for of Sometimes, the are margins margin. specific are lower we we current take may time, margins. than But most

Shannon Cross

in is investment long an take margins does there to because And how sustainable upfront obviously it get to a contract that's required?

Brian Walsh

Yes. from certain we first It first then offering the make But lower and the year and that it over will that does in ramps depend usually it money couple years, negative on ramp time ramps as and a there. offerings go. faster, ramps it have you faster. margin, the Through have sometimes it

just is margin So ramp there the side. but on typically depends, it

Cliff Skelton

sector, ramps slower. heavily Brian strictly little very on there more where public it It's said, it's Obviously, product. services, Yes. fast. is upfront dependent, a ramps the it Where in Shannon, the as investment,

Shannon Cross

Okay. you. Thank

Operator

Bryan the with And come Bergin will ahead. next question Please from go Cowen.

Bryan Bergin

wanted evening. guys. the Good ask Thank plans. to Hi on you. I cost

outperformance. are how to And then relative Did quantify means? you that much the expected where mentioned You just you to-date, target?

Cliff Skelton

So Bryan, thank you.

executed. all half it it's say we across identified. ones month. when have which every all I we executed, are planned of We About know When it executing got so of

to expect and XX%. outperform We between XX%

you if the $XXX outside, So million. think on

Bryan Bergin

And are run you of way through the XX% that Okay. rate?

Cliff Skelton

are more XX%. than We

roughly XX% XX% of XXX% mean And that we way are the to to later identification. the the come are in there to We way the I of the out execution. people are year.

it So XX% identified, we are XXX% call executed.

Bryan Bergin

for success conveyed? should Is process heard sized refinement on you attributing are I force expect the you opportunity the the here. comments sales Or pipeline appropriately current there? that that now Okay. the sales we investment the

Cliff Skelton

and in quality of most low that on the We from roughly, Obviously, point Bryan, performance what's execution team. out sales. headcount XX% mix of year important terms last about our and the is out are the of the over

XX% course We of would XX% the another, or I over expect uptick nine what call, months. next the

So way the we there not the but body we on XX% count. done, are are of

Bryan Bergin

about just supportive performance the And of this How you. any potential to last off is in path? of you alternative in environment? the be for table taken? Or one thinking are strategic that one now actions Is Okay. these businesses

Cliff Skelton

table, Look, of a strategy, great It's never of the right question. We it's think have portfolio. Yes. irrespective the right. the we opportunistic

we see the green of it's of the the irrespective It's to be all completely me taken of it's be and and certainly with But we that strategy to are opportunistic. shoots that the portfolio. want off hold starting the working and foolish the to We table in rest mix. never be it price table. say to take want But off right. are don't would COVID advantage We

no, would off not I say, table. so And the it's

Bryan Bergin

you. Thank Okay.

Operator

Instructions]. [Operator

Mayank Our Tandon ahead. next from go come Needham. question with Please will

Kyle Peterson

have some and can revenue evening. Good trends for see the time seeing to are sense get we see we Hi. the quarters. few how It's extensions, some with you the guys last Great to so if you Peterson, can actually project to ship thoughts this on translate might the implementation just on guys of the and quick turning revenue Kyle these any TCV wanted Mayank. improving to continue just quickly to a of direction? of in start so right I how

Brian Walsh

Yes.

on It the to answer. the So margin it's similar depends offering. It's Brian.

Others, can in some customer there as more. such processing implementation that take, and or period offerings is experience a ramp Some year cases, transaction fast. an

depend through have half offerings contributing good really different offering. the to seen the first does good is, it The the news on a we of sales mix numbers. So

have revenue and So others get some year will into the contribute next current great. these in from signings will we in we we as

Kyle Peterson

environment? on give Have on you more guys you could think little over-delivering in And these with cost term or thoughts any on That this where on margins the these margin margins the above the then takeout current contracts just a given margin some Great. follow-up color is of head at in helpful. business you me coming in thoughts plus or new of business your could to profile longer Okay. targets. the normalized operating and

Brian Walsh

XX.X% in and before time, over we time, margin balance in investing barriers the term. being around And and between good sure over term, a we margin that the to than we we two. the But get or improving Over will turn we to the had margin. this improving look range the between there. any In keep the bound mix, want in somewhat the XX% driving balance keep obviously, the it can. have right and to at improvement as performance about next topline XX.X% near at talked you based business, around we make see we QX lower have the will year on peers we don't So turning want said, operate, and about And margin. prioritize though, near also revenue that but EBITDA to if we getting

Kyle Peterson

quarter. Nice Great. That's guys. helpful Thanks color.

Cliff Skelton

you. Thank

Brian Walsh

Thanks.

Operator

over begin Skelton, As would the there I the now will questions CEO, are question-and-answer this questions any the back turn session. no to in closing more to conference for queue, Cliff remarks. like

Cliff Skelton

hope QX obviously, for like first, safe you confidence. everybody you, and the are consistency say during for shoots to keeps we to shareholders Well, your We so. let talk for. for business employees me momentum are hard to our to for stays clients this safe here our And thank like to say to green good their on in today. I I and to It's is have what track about their work, hope and encouraging crisis. would looking our thank see their for or family feel another months everybody joining but in you three making We we progress. to

So thank joining. much for you all very

Operator

conference and The concluded. presentation now has Thank may for you disconnect. now you attending today's

Conduent (CNDT) 6 Aug 202020 Q2 Earnings call transcript