CNDT - Earnings call transcript Q4 2021

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Operator

Greetings. Welcome to the Conduent Q4 2021 Earnings Results Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Giles Goodburn, Vice President of Investor Relations. Thank you.

begin. may You

Giles Goodburn

press and discuss operator, earnings. for us review joining hope this Thank Fourth thanks, quarter to our to chance Conduent’s had XXXX issued and today earlier you afternoon. you, a everyone, release full We year

today an our President financials is update. results our overview Wood, of and outlook. and follows. as Steve Skelton, and agenda the well as a quarter walk the business the Today’s our for CFO. is Cliff you will Cliff me CEO; Steve year Joining our will through providing then provide and full as financial

filed will copy the on afternoon This X-K. of the questions. call package SEC call the This take used Form section a on information available slides metrics were Investor and this the during financial webcast, the Relations with We the of as then are website. as detailed this is well your as as well being release Conduent press

make for information they reported addition or intend as accordance measures to The update includes measures. in forward-looking. results. or we are We this that beliefs, number and on do U.S. factors viewed statements. with to should today and differ events future Information information expectations except from company’s cause not results substitute be in SEC. result statements materially developments, XX-K These management’s the report required are included as reflect new concerning these in Because to of statements with current law. a presented a not actual During is forward-looking subject forward-looking non-GAAP of calculated that and as statements Conduent’s those may the annual assumptions by call, may factors GAAP, to a Form these these are filed not financial

I’d And well see information the for press Cliff. them to release. purposes, definitions and call the to please comparative we to non-GAAP our of turn their like limitations measures over our For now as how as more regarding usefulness use

Cliff Skelton

and Thank good us. XXXX you, take and earnings call. Giles, results. afternoon, Today, QX year you you I through joining full Welcome Thank Steve and will to end of Conduent’s and QX XXXX everyone. for

operational We will and results. focus some on significant sales also

walk to XXXX from want transition XXXX we to through and you the Importantly, XXXX.

about how business and why the fruits overview But some you manifest talk base of will our when pandemic and opportunities on working and And the see irrespective tailwind include numbers, of our and in and We’ll culture client that the XXXX. XXXX first, see base. XXXX We demonstrating the we one-timers will labor growth. effect start strategic already let’s the with our growth improvements in and results. discuss an our of of

across progress. headwind revenues a the would is Steve PSNAP to confidence takeaway in our examination of strong on and higher-than-anticipated base and create seen numbers, unemployment we the alluded QX, But the onetime momentarily. volumes where in the In that touch you’ll in how $X.XX that prior unchanged see quarter which much for full turn and and second to year revenue year, billion, This very our QX the in If year you’ll of Conduent’s was $X.XXX center earnings from basis we the Slide third virtually guided during down at was updates. how XX the X year-over-year benefit of XXXX will and in came segments, year-over-year. we’ve business XXXX. X, the billion points

post-COVID quarter, out to to of adjusted EBITDA callout only a COVID benefited prior cost equating payments year, in and those specifically to number basis don’t pandemic for payments, as normalization scenarios. headwinds XX.X% the we down to volume higher SNAP a do insurance each we unemployment versus pre-COVID segment. onetime upon we’ll we $XXX onetime volumes. from The with payments For or are the Meanwhile, associated while isolated where of temporary know. known a margin, is you compared benefits due The these as mention programs. as points the clearly savings that tailwinds fact million discuss first onetime XXX expectations time, stimulus us, expect of stimulus call And as as was well

margin, For year, full $XXX our million and EBITDA in at the came the of guided was range. top slightly above XX.X% which end

recurring fourth quarter, up XX% sales QX. business year-over-year new and XX% year-over-year Regarding improved signings in and revenue the our sequentially, annual from both

an in annual For of year, delivered we XXXX. the full and versus XX% increase recurring million $XXX revenue

Now for this delivered and both ARR was year, than for full slightly prior because of the business, of year. our the the quarter mix with lower TCVs

can before, type and about talked ARR between variation we’ve the create the and mix sold As this of business TCV.

of While matters to annualized amount can irrespective because most revenue of ramp recurring what revenue. important, contract long-term both quite the TCV annual is high, X are

retention. Finally, in our quarter, well metrics, fifth business for the this our driven new net was of positive activity better terms ARR as primary financial ARR metric improved as by

business, this of XXXX. Steve will you base number manifest and always, will XXXX in and that late the growth in matters our As how show

Turning our performance. XXXX highlights our attention to of other

the Midas means capital you and pretax in liquidity February As suite proceeds we completed the strong. $XXX of of net we solutions positions this our remain to our for know, closed sale fourth X The million. and many refinancing early of debt on of the quarter of combination simpler

proceeds. plan We have of a those for use cash balanced

of scale Our improved us We in government payments. payments and third billion government in pandemic respond $XX of in consecutive distribute associate enabled seamlessly and developing ability over at enjoyed the sustained engagement. high improvement to and deliver stimulus to client pandemic satisfaction quickly year and XXXX level to the our

in won to LGBTQ, for including we women work place the numerous and diversity workplace. Finally, best for culture, awards

about turn operations, went and our them. you relates Slide and we it if to how serve as to XXXX So think X clients how

an better is we’re year couple driving SLA based around We excellence recognition recognition to We’re independent continued is out in This our technology performance focus from drivers quite inclusive a call on of lot some proud and proud improving for associates environments that or clients of. culture. of quite of outside on or things feedback areas. on well as how firms the received industry as those that went. of uptime, routines The research a our recognition client-first operational well as and assessments. in focusing as A work

As quite analysts and several cultural business recognition, space, previously We’ve transportation of leader the year units. awards. continued in to the a respect us awarded of of client notably. supplier row. were GM improve recognition of some can XXXX. we see our mentioned, in X firms the With received not overall that we’re to overall also in years scores previously awards And as satisfaction we a you the research other most all, recognition industry many, And if as recognize various their across proud our mentioned,

beyond of take terms to the be of let in point you that lot associates for a our results. capability full people year work-from-home general. end view. our would as of You let said, environments around as can now over out and both diversity, I to in women all and recognition the well details that for and financial outside through a read year for our sales me moving and XXXX him With work of to but it terms culture to LGBTQ best them, say place expectations Steve? turned Steve in it hand

Steve Wood

Thanks, Cliff.

non-GAAP As the in our past, filings reconciliations we the and appendix in have and the numbers. both The in we presentation. are done of are reporting GAAP

our X to and key turn Slide and growth Let’s sales metrics. discuss retention

offerings overall our TCV year, we almost and client pleased the for billion was strong support capabilities. business X% signings are the the down year, in While for showing with full new $X.X for

year-over-year. New bookings, compared also business annual XX%, which revenue X in more NRR doubled revenue function double-digit XXXX year in XXXX. XX% of segment, but was Government than growth pandemic the in all with contributing recurring the Nonrecurring near up SNAP a commercial to as volumes grew segments

have that During the slipped expect a quarter, QX strong into we With XXXX. XXXX. business new sales handful in signings said, fourth to of

see metrics that was in across our mix in X.X a slide function as the X.X average years segments. You’ll of our XXXX, deal to sales contract years length the compared in appendix

XXXX, the primary metric needs. are our are And in to contract in model models, from total Therefore, long-term changing We contract outcomes. continue annual these optimize to near-term revenue evolve further to value our between compensation incentivize XXXX, moving integrated value. our balance to sales sales sales we and we

other in annual remove some combined will pricing transportation metric, continue value, contract deal the length total and businesses. We was report effects wins, term changes as the and positive but losses, government caused contractual The the defined to between commercial fifth for value, total deal quarter. variation to contract activity shift of by will our and measure divided ARR net by value of the contract differences our

this of it’s of this full timing metric reminder, a the of does in timing of notification. covered based trailing XX-month but the our not the definition A As predict revenue, is presentation. appendix on measure

an their satisfaction TCV XXXX larger extremely quarter. to Conduent to demonstrating XXXX. busy had Overall strong and strong was partner. commitment process clients respect with was to their Finally, business billion, a renewal $X.X fourth and renewals, similar for agreements which renewed as we their Several

individual timing have of significant to calls, in renewals. noted As due prior we have can quarters variation

above to as cover And Now discuss midpoint results around XX about the P&L XX.X% benefited year SNAP million XXXX. $X.XX to earlier more slightly as XXXX by for year basis year XXXX, contributed again XXXX. for our finished million segment. into tailwind of in in guidance segment was metrics. X our the SNAP coming compared Slide and compared Government compared and the adjusted our pandemic full EBITDA with year-over-year the We pandemic results. the our when end let’s EBITDA to exceeded tailwind Adjusted volumes I to a and segment XXXX. was points in Throughout $XXX was in our of margin the turn high $X.XX to full billion talk our billion was at up year $XXX volumes QX, our continuing outlook in I’ll This was Revenue Government and from our meaningful in this range. as results. our the XXXX assumptions year in

margin declined fourth our the volumes tapered. adjusted pandemic in I during EBITDA As and SNAP adjusted XX.X% sequentially QX as call, quarter, outlined QX our the margins EBITDA was

in XXXX XXXX, Finally, of to the beyond around cost when the savings significant general the impact EBITDA other XXXX. driver adjusted was of benefit temporary comparing mix

to the Now over go and Slide XX results. let’s segment turn

year-over-year compare. full segment the a declined revenues For last was to year’s X% significant Commercial which improvement year-over-year, year,

with improved this offset business over was business. New XXXX, of lost ramp runoff but

This an XXXX full For from insurance. and incremental $XX over as segment, million and unemployment SNAP pandemic to XXXX X.X% both grew the compared Government revenue year XXXX. included

XXXX. in earlier, X.X% as in these compared year-over-year XXXX earlier year. pandemic segment the in noted our exceeded to As Transportation from assumptions higher-than-anticipated SNAP tailwinds, revenues especially grew

volumes, tolling stronger in XXXX, parking have segment have we The fully returns New deals in larger transit still benefited normalized latter the although business and from about of from projects Transportation benefiting the not to talked X some earnings. ramp in levels. significantly was from contributions recent also yet returned volumes,

terms by XX.X% by margin, In temporary grew adjusted increased segment margin XXX on the This adjusted pandemic year-over-year, and XX.X% of XXXX. margin year-over-year SNAP EBITDA Government down was the higher mix points by XX.X% XX adjusted benefited cost and and declined basis basis In that was margins the up Commercial adjusted savings segment, was the EBITDA driven points EBITDA X% of year-over-year. driven and EBITDA revenue of volumes.

points Transportation temporary adjusted well was segment, XXX revenue that as year-over-year XXXX. as by as driven of basis declined down XXXX. This adjusted XX.X% cost benefited X.X% margin We was savings the EBITDA compared For EBITDA mix to the year-over-year.

sheet $XX Slide represented and $XX deferred free around taxes of finished to In below balance of from conversion of flow. XX This at to an the adjusted million was we full which flow the turn a from conversion cash million, Act. our full EBITDA. approximately XXXX, repaid XX% and Let’s XX%. XXXX related primarily year payroll cash the discuss for year Adjusted slightly expectations CARES

range flow of revenue earnings at percentage was this, year million. impact during million. as and EBITDA cash for below $XXX approximately a revised was the the QX free This X.X% full in revenue X.X% of adjusted approximately been of Excluding our would conversion the of capital XXXX slightly of guidance have update expenditure XX%. And $XXX quarter adjusted the

had remained leverage which of turns, we net end at and ratio adjusted million of Our X hand of $XXX X.X our preferred the at XXXX. range on is the low X cash of end to turns,

XXXX, our update, of loan the revolving our our credit in XX, earnings our to facility reported our completed secured to we extending and debt our and loan we B senior October As refinancing XXXX on maturities for term notes XXXX. to Term A QX

and That plan some under on credit to now the facility. I’m XXXX. set key in XXXX our concludes we on and it of XX of back Cliff elements repaid $XXX Finally, of February prepared remarks our this out the game Cliff? to million XXXX, debt hand year, going our revolving drawn to

Cliff Skelton

Steve. Thanks,

as turn Slide the into XXXX Let’s strategy you important move to particularly continuation growth We we’re about discuss how as and our and priorities this thinking we’ll beyond. we our XX for business trajectory think is and time line. base examine

to you. out this can eye slide ball over off client that But in Conduent. of thought not as there adjacencies trying are game can what to only of already that opportunity to There at it’s we’re quite sustain accomplished accomplish take we not we customer environments key. years. it’s growth expect beginning it’s health journey. we’ve we’re workers’ want a meant and integrating that opportunistic priority Profitable but continue whether where unique service, analytics, in need We or a importance, our and to of already the synergistic, the expansion. trajectory expansion will the particular Meanwhile, to are as of some demonstrate there for that here our is the this we see our normalize critical before. to here is and where growth growing that us We as And whether hard to believe with adjacencies this we onetime improve profitable to opportunities tech our both like our opportunities you is unique synergies capability. margins to creating less as margin are you client service Whether time, going experience or what what XXXX. depict payment about is and monetization, the on all business, So Again, we penetrating mid-market continuation X to driving continue more a rewards our Australia course operations, we’re this in are untapped see will divestiture on we’ve stimulus countries and our of transportation unique opportunistic and compensation. consolidating the sales. think can future. work We as accomplish you’ve modernize commercial Whether or effects, Whether services automation, when seen portfolio, At the a that still you into all what All of around through those breakthrough for centers we reap solutions shared our now same and it’s deliver portfolio as the diverse and across It’s with unique and got partners don’t growth. the capability plan new said, into capability the provide data while or to into it’s of care believe well payments to claims same work slide next have current retention payments opportunities for our us base. business others here clients. continued continuing foundation, geographic well key. a

of have penetration example, opportunities. the in we commercial segment, product lots We’re for

team Finally, our value. with in not plan. further same. base order sizable a that’s leverage teams more nutshell, the account lot sales integrating management add This of our game will In our our of client is a to

that it superior we’ve believe much we’ve and clients continuing adjacent, stability those the into a security. While we improved better onboarded also are selling built, to platform what retain is opportunities it’s expanding and with with faster sustaining that and

to an about into see XXXX it that provide Now shaping XXXX outlook going and up. our we hand to translates I’m to Steve to back guidance talk how as additionally how

you. to So back Steve,

Steve Wood

Thanks, Cliff.

walk XXXX guidance XXXX. Let’s XX, outlook we’ll Slide our our and into turn through to and

experienced do XXXX, excluding in to both and of note, so. where the both Midas, has providing guidance, impacts business, guidance Midas and XXXX to estimated continued without the February XXXX from our we of and sold it we thing providing XXXX and adjusted to lower along want improvement as revenues we which $X.XXX base the well laps and that XXXX the as the with table, from possible the time XXXX. improved ramp tailwind pandemic XXXX volumes In range we to we in we effect to losses the billion. show into been In Overall, the year as legacy meaningful onetime on be performance business Snap trends move sales XXXX X. have XXXX full of in that First both $X.XXX revenue expect are in line continued XXXX billion we shown

in programs results, the the represent of If onetime SNAP to disposition decline onetime pandemic As of the billion, this business. we were a is XXXX these impact reminder, XXXX of At stimulus midpoint the from Of X% X%. million the XXXX stimulus the million. of would business our runoff including year-over-year growing impact and included from this importance $XXX of excludes approximately range, would volumes underlying or this a XXXX. programs $XXX this adjust Midas our be of government of net government $X.X to at number year-over-year

terms the how segments Commercial at we segment grow expect transportation the In the the X% of the to expect breaks segment this approximately range, XXXX. in of of And down X between our midpoint approximately we XXXX. X% the programs. grow XX% and Government Pandemic segment, unemployment entirely by SNAP in runoff is onetime of offset a almost driven by the decline in to This insurance approximately

margins step we impact as sales EBITDA outcomes the have made In driven margin well is adjusted financial Midas root expect. by XX.X%, XXXX, take higher X.X% with technology will we associated range discipline, and impact estimated we the as in in to disposition. client in pandemic of the the XXXX, a improvements progress trajectory XXXX. programs, from reduction sustained the segment in and of through onetime offset was margin on government we the retention is taking leadership, returning increased journey expect satisfaction, of largely to operational runoff the efficiency the as have drive account be into that As XXXX growth benefit by said And sales priority. stimulus important earnings, to of ramp, of prior key SNAP cost as a we commercial including will to impacts This an the which work

sales slightly by a slightly that is to range, the year more driven range, the at We year or EBITDA margins expect of guided adjusted at or and year. the XXXX factors half the that of second above guided the combination start the towards weighted finish a ramp below include

cost revenue around rate in return interest some wallet will in EBITDA modest claims. expectations as of on transit work that efficiency, and benefit volumes increases Continued such as our drive as incremental and business, well areas

to under We expect EBITDA Act. remaining the adjusted taxes free of convert of paying cash to deferred of approximately flow payroll off inclusive the adjusted XX% portion CARES

this, would XX%. conversion rate been Excluding have the approximately

CapEx operating We approximately $XXX work-from-the-home $XX as evolve million expect rationalize and on approximately be real in flow. our model. restructuring million, further hitting approximately restructuring charges, at is cash we our work-from-work, The of charges to driven to to estate hybrid to million opportunities be by this for largely least our outlook footprint increase continue with $XX XXXX

to X% Let’s turn for our midpoint attention guidance revenues now some of expect like on Using provide initial our to XXXX the X%. XXXX, XXXX, grow where by we we between outlook. and to would thoughts our

segment to in both decline to and the segments be year lead Transportation growth Offsetting single-digit growth. Transportation the mid- the the mid-single-digit to will segment a this Commercial segment mid-single-digit expected where losses XXXX, in growth and to revenue somewhere the low their continue growth trajectories high Commercial We in range. from of Government second with expect will

strong extremely remain backlog the Government and segment. in pipeline sales Our

growth XXXX, XX.X% expansion stabilization until the Commercial cycles. not the Government of margin margins EBITDA stage, this by contracting XX.X%, adjusted revenue the long segment our revenue in by the move range within lower Government corporate lower into optimizations. of both, for flow, implementation with manifest given but center XXXX of XX% at approximately However, outlook restructuring At costs. constrained convert into well cash the to at is this We charges lower similar expect would likely as will outlook and segment and we estate in for as real adjusted to real free and approximately the levels million final $XX and capital both phases estate Transportation other adjusted and data to EBITDA expenditure our and offset as to

back hand outlook Before to from assumes more intention I more talk out now in Cliff to provide initiatives our that the substantially that back a hand based outlook Cliff? I’ll XXXX initial this earlier. before our detail for and and Cliff I’ll strategic It’s note this XXXX very these we Cliff, laid contribution than early less on Q&A. the base X% to it move on about is to business summer. to

Cliff Skelton

expectations. year. performance, XXXX we service Well, closing, exceeded to engagement. stimulus Financially, recognition lot Operationally, in level that’s a across board. a we associate internal the we improved the benefit of met with And agreement some and retention, was and digest. good client But culturally, tailwinds, sales, or ARR, external received

Now the XXXX but growing. stimulus, continued be is a will settling year the with the revenue XXXX already is growth margin. runoff and business improving year base of with

continues plan to work. Our

strategy. a have We

and assets discuss those an And no have progress in to has. We our in analyst this and we summer. coming intend briefing one else adjacencies

I’d to thank have teamwork. a associates fantastic the associates of client our their their We for base. for like like the clients like our and to business. And our to thank I’d confidence. I’d thank and dedicated for loyalty shareholders a team

up XXXX. open Let’s have go now for questions. great Operator? We’ll a it

Operator

Instructions] [Operator Shannon first Cross of Cross from question Our Research. is

Shannon Cross

year, comp. if facing mean, that stimulus. was this obviously, now business, taking how the a obviously, there I about in balance I versus, we’re the bit potential tougher you the wondering headwinds was can you facing talk that a And more incremental margin

a bit in and the the you a down than ability turn I environment? is give and more perhaps of then what the follow-up. But Commercial maybe are As to get assume confidence guidance, ‘XX starting you you which And others just gives could current gives is have to in these little into most revenue, willing want companies to are confidence segments that and guess shareholders, various I people incremental which if good. I some dig

Cliff Skelton

our of around for question. middle, sales that A to One thanks of routines, help. NRR Shannon, things. in is is and of couple to starting see ARR lot even Yes, going now ACV, that more we’re a the mid-market ramp

We’re waiting lot we’ve these base. client government in more technologically. got for we like two, confidence number to one. Due in not we’ve our improvements contracts quality, seen both just the our Number operationally were, big a long-term in and

managers we’re getting our when the together, includes doesn’t. volume we’ve runoff, very back. before. X% same comes come So And a is of to have changed new our to -- we together. they a we the win finally, come and the less in think the We only teamed model on this think in kind initiatives, put all out where And plan. back. volume We executives interest to haven’t we that rates weren’t It’s then efforts modeling XXXX. what it’smodeled off little that’s table so clear we we’ve clear go-to-market we’ve these are of with of finally, not of when plan said, XXXX. that game it’s up terms sales way going Steve entirely are of game compensation packaging runs going sales some And back. and None what stimulus into and and then modeled and account in That’s strategic

XXXX, it of but predictable, as the think, confidence quarters be the we in very think will the I do XXXX, gaining in XXXX. last X terms we’re proof in pudding along. And is in obviously how of in go I we So

Shannon Cross

how took you’re talk just obviously, you need bit project? automation on and But about a where the can investment able that be margins. your -- think that. cloud in investment there, to maybe then charge And Because for and a you increase technology dollars productivity happened side? Okay. focusing we beyond what You to the computing about

Cliff Skelton

let that me charge, let about -- Yes, I Steve particular then investments. start talk technology then can with and

Steve Wood

of about being you we we was a versus we’re some a products bringing on level areas the that and And invest you in time less we as across look plays reevaluated of things at priorities, that that and this we we’re around some our the that going an have rubric lot areas of of was discipline As areas lot could to the right? ago. the we’re to as And I we the portfolio. invest. into that increased portfolio, the that bear reevaluated choose know, to in. And project Look, Yes. portfolio think to that and a potential it, as invest think just margins of going started

the relative we So decision that deploy to prioritization the was to expect capital. on against want from where capital get that can based we returns of

Cliff Skelton

strategy Shannon, will in say the -- there. years skunk a the I would would build they the our anymore. little in different. strategy, The a early bit series it is there out and call past of come, after we I what Where spin, with just was works just that doesn’t fit

out We the adjacencies around synergies our know know the a We’re strategy where adjacencies flowed where are. process businesses. are. we looking We where at

are investments, ideas. just looking the down we’re We’re those gaps doubling we’re and gaps doing where are. is on where adjacency as to thing to gaps And revenue opposed the technology good generate other synergy those

as a and our as plan discipline tying to come. lot opposed build more XXXX. into to fit capital think we these to it’s model. But a going it’s and of to the the investment of Again, opportunities So as really and adjacencies claims payment into posture discipline that’s are and strategy, -- is will opportunities the model. that the be they It’s simple the honest, around some sort different synergies right -- it

add X got Steve’s So on.

Steve Wood

an wasn’t on it clarify project. to project. was just a Shannon, It Yes. client-facing that, internal

that just So was a clarification I make. to wanted

Operator

JPMorgan. from Jain Our Puneet next question of is

Puneet Jain

potentially estate drive about X individual next Can those year? cost drivers actions, points of real from that. about quantify XXX basis expansion talk or each what next You will margin talked you from benefit rates for Can actions a interest interest benefit year? you consolidation, rates,

Steve Wood

absolutely. Yes,

I’ll X take So first. the easy

X.XX-point they’d right into increases interest rate of just XXXX. XXXX, now Our by modeling the end assumes anniversary

that’s our to, $XX So bottom about to year, million adjacencies, that that payments actions then are something year Those then sales falls leverage represents exiting to ramp will Cliff whether And we corporate referred And initiatives improve of with $XX to sort costs that build feel drive seeing in of growth growth kind kind to effect lap of or into the other XXXX of it’s the we as around XXXX $XX the now. it’s $XX that are that the on obviously, allows of million. about takes, order. again will revenue whether confident have natural sort sort of a talked business. normalized of into puts going strategic margins the back we’re million to north the of million line. the of effects clearly, in we of those margins onetime approaching And us the sort all expectations we right that and analytics or operating that that that through year to areas. and a are these real an incremental range next kind The and of

Cliff Skelton

we footprint, approaching rate is especially savings expire. by the in U.S. collapse in XXXX, from have quadruple And come that of work from down our these the X%. of real we But that allowing this right from I add And in as to Puneet, XX% versus new X% work would us in in now, the XXXX. work, run our some home just associates or leases about we’re where the there’s estate, working still may home way, normal. seeing That’s opportunities get like that terms

we margin. that in as our another see So opportunity expansion

Puneet Jain

potentially potential now, Understood. as divestitures portfolio consideration stock it and as more future your divestitures, well repurchase? can about to a you as also given you talk where relates use right do cash, is of And can

Cliff Skelton

look We there, look I at it. You portfolio. didn’t our here’s -- way took The the me right at you?

diverse a all where of solutions as terms know investment know. you have created the perspective. down both are, synergies are as from we’re synergies And now well in -- sales We equal we And we a as where portfolio, not and the the are. an doubling perspective understand

at lines of a portfolio, stand-alone create stand-alone on look We profitability, well where there divestiture want we also It synergies the scarcity opportunities the which obviously want we some are and a at We few know margin we some value on have we -- to opportunities. on to still when at the there’s look few up to outside. certainly, could the look still radar. think want value. scarcity But

a still With cash, to In speak. think potential as of that fact, opportunity to use the or use minimum rubric what excess to at we the on have think could backdrop use cash of considering radar what we pursuing for amount are as need few of we’re a with divestitures need beyond a as there of also cash we change we least above respect we on cash I other or that activity M&A terms of keep in that hand. because the and considerations we do

We’re going set the to -- consideration as we’re speak. we in

kind as where imagine, the program would of keep certainly to need say, well we a centered potential And they pay acquisitions, the small on, any the buyback return valuations or mostly We I But are, shareholders radar. on you As keep kind debt it’s to of debt is can with as on radar. to need X paydown. tuck-ins certainly, acquisitions. down any

in Now revolver. we off of you have the seen think our of $XXX I paid million revolver that would parallel,

maximum in So got that liquidity revolver. now we’ve

So that’s cash a overall use we that the into the consideration put paydown, set. in factor not but is want necessarily of of to concert in rest the with it

or regard. come next course in to over more of the So that the month so particular

Operator

from Bryan Cowen. Bergin question is next of Our

Bryan Bergin

here. XXXX a from Government, you’ve made did I to with outlook outlook? what a down and you’re just I more on bit margin as us the comments on the biggest are the being dig maybe Can in not we bridge for stimulus this help ex categories just wanted Midas? bridge wind you the also higher that midpoint XX.X% hear about which some a -- to of seeing impact headwind. Can Is the there of you talk here a wages? there XXXX just big margin

Steve Wood

Yes, absolutely, Steve here. Bryan. It’s

into ramp, kind year the that of efficiency the will year. expectations And we look, sequentially is during pandemic is the we’ve the play efficiency continued margin the progress clearly, through do annualization effect the fact programs of offset So that SNAP are impact programs of to to the of as largest terms that rubric those margins impact in going general of the sales those. the work cost improve of the and of cost to

below of -- -- in run starting which really us That’s the my XXXX. have margins comment there. of guidance $X think at kind expect got those you’ll rate hence, margin kind And this above government progresses business. or of a largest finishing the we in interest the XXXX. see the in the reason that single we’ve million around But the kind heard You’ll about point range that we increases or the clearly, around dwarfs we’ve that X.XX confidence of of done that about piece into offset that. how the progression impact all and gives how work to of is there’s in off at year And the during

Cliff Skelton

Bryan, very with at a say offsets the targeted and offset inflation, way. wage modest wage in we’ve regard it’s a I to looked would inflation

in and way. associates for company in the XXX(k). some increasing the as a we’re value package well around place for of looked we percentage pays We’ve We’re like can kind it at a work things as not compensation where health also blanket doing the our do care total for

we large. seeing massive and package most modest not targeted. but So slight are a think we’re headwinds. at offsets, They’re have it’s important It’s those there

Bryan Bergin

the on And Okay. just bookings front. then

new the about ARR, TCV Can talk focus here looks color what -- some ACV pipeline? just slippage. healthy. seen understand you some Maybe that. you’ve can think number deal comments on that around a talk the about -- I I mention So did your in versus you business

Cliff Skelton

Yes.

know some the deals all was on definitely QX. things. right. We We going to Omicron So slipped and had else what X with everything in

had about where be was Bay and to talk right transit, QX. exact of deals large Area in really add-on can’t There will forthcoming the an One slip the we announcement but renewal a some they plus did slip on that other right. they them now, into

QX. about optimistic we’re So

Stage important, What’s meaning $X at billion of $XX that If and the for it’s really billion in now. it’s neighborhood strong. the it’s around $XX though, X, it’s general, this as is in in potential very range to deals consistently you -- billion, have of billion, terms, pipeline In in happening range the TCV in billion. you look $XX of from the a XXXX $X look TCV,

stages based neighborhood billion. to and timing of you on just translate confidence. And -- that the are and then those under in $X that So ACV, if it’s

sale, and on new happen and opportunities we other need to because it optimistic need really make we’re we -- are notwithstanding be making that’s to So happen, strategically. it and we any

is way, that across X the the So growing in the pillars, all already as pipeline bottom Government strong. by are well. not is Across X line just the

in just we go So but get for in And booked to generate real get to it. that got that XXXX sure, ones get we want XXXX. the revenue ones certainly

there. So again, sanguine pretty

Bryan Bergin

And then here. Okay. a clarification lastly just

So Steve, if net growth last looked But if net isolate COVID, the ‘XX. business apples-to-apples back implied an give X you kind mentioned we the you at was the think you from this in I ex and X% just doing step of us years, impact business impact, what just view.

Cliff Skelton

you and were the take years. unemployment all of So to if out pandemic insurance SNAP

Steve Wood

years. three All

Cliff Skelton

the been the All I years. in declining three have believe to XX%. but would region right, X% this something business got I’ve of

Steve Wood

to ‘XX. ‘XX From

Cliff Skelton

to ‘XX From XX.

growth, from Somewhere ‘XX of close into then in growth X% to to of point a of ‘XX and down XXXX. region the X.X%,

Steve Wood

Again, million of $XXX you’re in improvement in revenue. thinking aggregate that that the about So over talking translates numbers, ‘XX ‘XX the X in years. Brian, you’re headwinds, of to XX% net course from

we XXXX. -- positive we’re one that’s So can we’re accomplish in what of on the reasons

Operator

turn the remarks. reached CEO, for question-and-answer call to have back Skelton, Cliff We the session. over of President closing end will the and I now

Cliff Skelton

It’s to you. a longer it more for information time thank came but we a little as lot us, to Listen, had transmit, this guidance. especially

us. Thank continue our everybody for So Hope patience has your I and want We everyone week. for journey. support you. appreciate as thank your joining to we on a safe

Operator

today’s conference. concludes This

your Thank great a for have evening. and participation, your time. lines disconnect at may this you You

Conduent (CNDT) 17 Feb 222021 Q4 Earnings call transcript