NASDAQ:CNDT Conduent Q4 2023 Earnings Report $2.05 -0.02 (-0.97%) Closing price 04/17/2025 04:00 PM EasternExtended Trading$2.08 +0.03 (+1.22%) As of 04/17/2025 05:51 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings History Conduent EPS ResultsActual EPS$0.03Consensus EPS $0.04Beat/MissMissed by -$0.01One Year Ago EPS$0.01Conduent Revenue ResultsActual Revenue$953.00 millionExpected Revenue$930.00 millionBeat/MissBeat by +$23.00 millionYoY Revenue Growth-3.30%Conduent Announcement DetailsQuarterQ4 2023Date2/14/2024TimeBefore Market OpensConference Call DateWednesday, February 14, 2024Conference Call Time9:00AM ETUpcoming EarningsConduent's Q1 2025 earnings is scheduled for Tuesday, April 29, 2025, with a conference call scheduled on Wednesday, April 30, 2025 at 9:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (10-K)SEC FilingEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Conduent Q4 2023 Earnings Call TranscriptProvided by QuartrFebruary 14, 2024 ShareLink copied to clipboard.There are 4 speakers on the call. Operator00:00:00Greetings, and welcome to the Conduent Q4 2023 Earnings As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Giles Goodburn, Vice President, Investor Relations. Thank you. You may begin. Speaker 100:00:26Thank you, operator, and thanks, everyone, for joining us today to discuss Conduent's 4th quarter and full year 2023 earnings. We hope you had a chance to review our press release issued earlier this morning. Joining me today is Cliff Skelton, our President and CEO and Steve Wood, our CFO. Today's agenda is as follows: Cliff will provide an overview of our results and a business update. Steve will then walk you through the financials for the year, as well as providing a financial outlook. Speaker 100:00:58Cliff will then provide his closing comments. This call is being webcast and a copy of the slides used during this call as well as the press release were filed with the SEC this morning on Form 8 ks. This information as well as the detailed financial metrics package are available on the Investor Relations section of the Conduent website. During this call, we may make statements that are forward looking. These forward looking statements reflect management's current beliefs, assumptions and expectations and are subject to a number of factors that may cause actual results to differ materially from those statements. Speaker 100:01:40Information concerning these factors is included in Conduent's Annual Report on Form 10 ks filed with the SEC. We do not intend to update these forward looking statements as a result of new information or future events or developments except as required by law. The information presented today includes non GAAP financial measures. Because these measures are not calculated in accordance with U. S. Speaker 100:02:08GAAP, They should be viewed in addition to and not as a substitute for the company's reported results. For more information regarding definitions of our non GAAP measures and how we use them as well as the limitations to their usefulness for comparative purposes, please see our press release. And now, I would like to turn the call over to Cliff. Speaker 200:02:30Thanks, Giles, and thank you all for joining Conduent's Q4 year end 2023 earnings call. Hopefully, this will be the last call earnings call where we don't have Q and A at the end. We've been working to establish a sell side group to help provide services Q3 earnings call both from within our own portfolio and our clients. As you know, Conduent retains a very diverse platform of products and services, spanning the myriad of industries in both commercial and the government space across federal, state and local levels. At times, We take advantage and at times we suffer through the changing financial pressures our commercial clients experience and oftentimes changing landscape, political and otherwise that our government partners experience. Speaker 200:03:20But regardless of all that, the diversity of our offerings can be both a blessing and oftentimes a headwind. On one hand, we're positioned to capture more opportunities than most because of our diversity. On the other hand, that diversity requires horizontal bandwidth and with that want to be more nimble. We want to be more growth oriented. And you'll see in today's presentation a description of how we're progressing against those rationalization efforts you've heard us talk about in the past. Speaker 200:03:52And Steve Wood, our CFO, will take you through the resulting financial expectations, particularly indexed on a 2025 exit rate. We see this as described previously in our Q1 2023 investor briefing as a 3 year journey. And we just finished year 1 of that journey In a year where we announced 2 divestitures with expected net proceeds just shy of $500,000,000 both of those expected to close in increments in the first half of twenty twenty four. You might have noticed we also announced a $75,000,000 share repurchase program in 2023. Meanwhile, let's begin with the results in 2023. Speaker 200:04:28Steve will, of course, take you through all the details. But Q4 and 2023 writ large finished Pretty strong for us. When compared to the outlook we presented in Q3 earnings, we exceeded expectations across adjusted revenue, EBITDA and EBITDA margins. Adjusted revenue for Q4 was $953,000,000 $3,700,000,000 for the full year. Adjusted EBITDA was one $103,000,000 $378,000,000 for Q4 and full year respectively, and our adjusted EBITDA margin was $10,800,000 $10,200,000 respectively. Speaker 200:05:00Again, all these measurements exceeded our expectations for Q4 and the full year. However, regarding sales for the year, our was a bit of a tale of 2 cities. On one hand, our new business ACV was down slightly year over year and quarter over quarter, but roughly flat sequentially. On the other hand, TCV total contract value, an indication of future long term growth, Exhibited the best achievement since we became Conduent, up 20 percent to $2,257,000 Meanwhile, revenue retention in 2023 was slightly better year over year. However, sales really especially in the commercial space created a sequential reduction in our net ARR number. Speaker 200:05:41As you might recall, our main focus is to keep that net ARR number positive and increasing to the new normal. It doesn't take into account volume changes associated with market conditions or small shifts in the portfolio. But much like many of our commercial competitors experienced, Market buying trends were slower in 2023. Steve will talk about that here in a minute, but it did add headwind to our sales performance. Net net 2023 from a financial perspective was stronger than most of our recent predictions, but certainly had room to improve in both sales and cash generation. Speaker 200:06:16Speaking of cash, Steve will take you through the details, but the timing of our expected tax return, Implementation milestone achievements in our transportation business both made for a year we expect to improve upon in 2024. Regarding 2024, it's going to be a difficult or at least a different kind of compare. Again, Steve will provide an analysis of 2024 absent divestiture activity. But the fact is, there will be a lot of divestiture activity in the revenue, expense changes, Proceed increments and other predictions will have to include some level of predictability in 2024 expectations or flexibility anyway. For the last three earnings, we referred you back to the investor event we had in March. Speaker 200:07:03I'm not going to disappoint as I'll mention that yet again, As it does remain the linchpin for our go forward strategy and execution plan, we've always stated that a rationalized portfolio will tee up several levers for the future. Let me talk about a couple of those levers. First importantly, we expect to generate roughly $1,000,000,000 in capital to be used for highest and best future benefit. Some of that capital allocation will have timing components to it with increasing flexibility and optionality over time That would include the obvious return to shareholder options and debt reduction as well as acquisition or internal investment options. Of course, there'll be more to come on that as the proceeds begin to flow in here later in March. Speaker 200:07:462nd, a more nimble, more growable portfolio platform. 3rd, a narrower scope of products and capabilities that allow for better management bandwidth allocation, while retaining that defensive nature we enjoy with a diverse portfolio. 4th, better cash flow conversion rates and an enhanced valuation. Now as I mentioned, we announced the first two of our anticipated divestitures, which are expected to close and monetize, as I also said, in the first half of twenty twenty four. There are others in process as well. Speaker 200:08:18Again, the mission is to land on a $3,000,000,000 ish, 3% to 5% growing company with reduced debt and an enhanced valuation at that 2025 exit. Steve will detail some components of that plan, but it's all of our job to make it happen. Lastly, we compete every day out in the market like everyone else, whether it's for new business or new talent in our workforce. Our team of 59,000 associates worked very hard in 2023 to improve every aspect of our performance against that competitive landscape. And I'm proud of what we accomplished. Speaker 200:08:53Whether it's in the financials or the culture improvements or the industry recognition or the strong improvement in our client relationships, we made significant progress. And that progress takes time to bear fruit, but the foundation is built and the next level of achievement is clearly on the horizon. So with that, I'll thank you in advance and now turn it over to Steve for the details. Steve? Speaker 300:09:15Thanks, Cliff. As we have done in the past, we are reporting both GAAP and non GAAP numbers. The reconciliations are in our filings and in the appendix of the presentation. Let's turn to Slide 5 and discuss our key sales metrics. In the 4th quarter, our primary sales metric, new business ACV was down $42,000,000 versus the prior year at $152,000,000 roughly flat sequentially against the 3rd quarter and in line with what we expected, absenting the volume of larger deals in the government segment, which were a feature of our Q4 2022 ACV results when we signed 3 large deals. Speaker 300:09:57This quarter did include the signing of another double digit ACV new logo in our government healthcare space, comprising a module of our cloud native conduit Medicaid suite. Our commercial segment is still experiencing longer decision making cycles and cautious buying behavior, but finished the year stronger than it started, up 35% versus Q4 2022. For the full year, ACV was down 13% as compared to 2022 with most of this impact in the commercial segment where ACV was down 20 9%. And this was partially offset in the government and transportation segments, which in aggregate grew their ACV year over year by 8%. New Business TCV was strong in 2023, growing 20% as compared to full year 2022. Speaker 300:10:49This was primarily due to the $1,000,000,000 contract we signed in Q2 with the state of Victoria, Australia In our Transportation segment, where we began implementing their new account based ticketing platform in Q3 and took over operations of the legacy system from the incumbent in December. As a reminder, this is a 15 year contract generating implementation revenues over the next 3 to 4 years. Our net ARR activity metric, Our combined measure of wins, losses, pricing effects and other contractual changes has continued to remain positive. This trailing 12 month measure does not predict the timing of revenue, but is based on the timing of notification. A full definition of this metric is covered in the appendix of our presentation. Speaker 300:11:38The Q4 2023 net ARR activity metric was down sequentially, primarily due to the roll off of a strong ARR performance in Q4 2022 and lighter signings in certain areas of the commercial segment during 2023. Losses were broadly in line with where we expected. Very briefly on Slide 6, You could see the large renewal quarter that we had in Q4 2023. Let's now turn to Slide 7 and discuss our full year 2023 P and L metrics. We finished the year with results coming in slightly stronger than how I messaged in our last earnings update, topping both our Q4 and modified full year guide. Speaker 300:12:25Revenue for 2023 was 3,720,000,000 As compared to $3,850,000,000 in 2022, down 3.3% or 3.6% in constant currency. We experienced stronger than anticipated performance in our Government segment offsetting some softness in both our Commercial and Transportation segments which I'll cover as I discuss the individual segment results later. Adjusted EBITDA was $378,000,000 for the full year in 2023 as compared to $394,000,000 in 2022 and our adjusted EBITDA margin at 10.2% was substantially unchanged compared to 2022. This was within our original full year guided range and slightly higher than how I laid it out in our last earnings update due to a couple of discrete items that affected the 4th quarter. Let's now turn to Slide 8 and go over the segment results. Speaker 300:13:24For the full year, Commercial segment revenues were $1,930,000,000 down 3% as compared to 2022. The incremental benefit wallet revenue in the year was an approximate $54,000,000 tailwind and non repeating items in the prior year were an approximate $30,000,000 headwind. New business ramp and add on sales fell slightly short of outpacing loss business for the year, primarily due to the soft new business environment in 2023 in certain areas of the Commercial segment. The balance of the impact on revenue was lower volumes from some large clients predominantly in the CX space In certain industries including travel, logistics and telecom. We believe much of this is macro related and therefore likely temporary. Speaker 300:14:14Commercial segment adjusted EBITDA improved 21% year over year and the adjusted EBITDA margin of 14.2% was up 2 90 basis points year over year. Increased benefit wallet revenue contributed to this margin improvement along with operational and this was partially offset by lower volumes and non repeating items from the prior year. For the government segment, full year 2023 revenue performed better than expected declining 4.9% as compared to 2022. The year over year impact of the one time government stimulus volumes in 2022 was a headwind of 42,000,000 New business ramp, including the 3 large deals we signed in Q4 2022 combined with stronger government payment volumes drove the better performance, but not quite enough to outrun the known loss business from prior years. Government segment adjusted EBITDA declined by 1.8% year over year driven by the impact of the one time government stimulus volumes in 20 and loss business partially offset with the benefit from a portion of a legal settlement of $17,000,000 as well as stronger government payment volumes. Speaker 300:15:32The adjusted EBITDA margin of 29.7% was up 90 basis points year over year. Transportation segment revenues declined 1.8% in 2023 as compared to 2022. Transportation segment results were negatively impacted from transitioning certain clients on large long running implementations through go live. Some of these programs experienced extended completion timelines, largely driven by increased or changing client scope and requirements As we near the end of these multiyear implementations, this caused more of a drag on revenue and margins during the year than we originally anticipated. Transportation segment adjusted EBITDA was $41,000,000 as compared to $84,000,000 in 2022 And the adjusted EBITDA margin of 5.9% was down 5.90 basis points year over year. Speaker 300:16:31These extended completion timelines on a handful of our larger implementations caused most of this decline. We continue to focus on implementation and operational discipline and returning the business to more predictable revenue and margin trajectories. Our Q4 transportation results posted year over year revenue growth and a stronger adjusted EBITDA versus Q4 2022. Let's now turn to Slide 9 and discuss the balance sheet and cash flow. Our total liquidity position remains strong With a combined $1,100,000,000 in cash and available revolving credit facility, we ended the year with $519,000,000 of total cash on the balance sheet And our $550,000,000 revolving credit facility is almost completely unused. Speaker 300:17:22Our net leverage ratio is 2.1 turns which is within our range of 2 to 2.5 turns. Our debt maturities are long dated and we have no significant debt repayments until the end of 2026. Capital expenditure for the year was 3.1 percent of revenue, lower than our revised guide on capital spend, And we continue to find opportunities to drive efficiencies in our capital investment programs. We only received $6,000,000 of the $29,000,000 federal tax refund related to 2018 in the Q4 of 2023. We have now received the remainder in the Q1 of 2024. Speaker 300:18:03Our modified guide for the full year contemplated full receipt of that tax refund. Our $93,000,000 of adjusted free cash flow in Q4 was broadly in line with that modified guide for the full year due to some offsets from some other favorable timing items. We repurchased approximately 6,600,000 shares during the quarter at an average price of about $3 And as of the end of the year, we have purchased approximately 8,800,000 shares. There is approximately $48,000,000 remaining under our existing $75,000,000 share repurchase authority. Before we move to Slide 10 and talk specifically about 2024 guidance, Let me spend a few minutes outlining our approach to how we talk about the year and interlock it for you into our previously discussed outlines that we gave around the divestiture work and what that means for deployable capital and an exit rate for the business in 2025. Speaker 300:19:03As we move into 2024 and continue to execute on the financial framework that I laid out last March in our investor briefing, The key message I want to convey is that we believe we are on track to deliver the $1,000,000,000 of deployable capital by the end of 2025. I'll provide a slightly updated view of the walk to that $1,000,000 of deployable capital later in the presentation. In 2024, we will have impacts of the 2 currently signed divestitures and potentially others. The sale of our Benefit Wallet business that we announced in The Q3 will generate approximately $425,000,000 of pretax proceeds and the sales of our curbside and public safety businesses announced in the Q4 will generate approximately $230,000,000 of pre tax proceeds as well as removing 30 to $35,000,000 of liabilities for the leased portfolio of assets associated with that business. Note that related to the sale of the curbside and public safety businesses, dollars 50,000,000 of the proceeds will be receipted during the first half of twenty twenty five. Speaker 300:20:12While timing is not certain, we do expect both to close during the first half of twenty twenty four. As mentioned earlier, we continue to work on other opportunities, which could also impact the latter part of 2024. Our approach to guiding our expected results is therefore going to be as follows. I'll start by laying out a 2024 outlook for Conduent Without removing the impact of these divestitures, thereby giving a like for like compared to the year we've just closed. I'll explain some of the larger puts and takes within the 3 segments and our expectations for those businesses in 2024. Speaker 300:20:52I'll then provide a walk to our exit rate in 2025 and show you pro form a effects of the divestitures we've signed as well as those we are currently expecting to sign and close in 2024. You'll see from that walk that we're broadly within the same ranges we outlined last March our investor briefing and the objective remains as stated to narrow conduit into a more focused portfolio of assets still generating revenue in excess of $3,000,000,000 and freeing up approximately $1,000,000,000 of capital to deploy against our allocation priorities. First, let's get into the content on Slide 10. Overall, we expect adjusted revenues in 2024 to be in the range of $3,600,000,000 to $3,700,000,000 At the midpoint of this range, this would represent a year over year decline of around 2%. We expect the Transportation segment to grow approximately 5 in 2023 driven by the State of Victoria contract offset partially by a long anticipated scope and pricing change from one of our large U. Speaker 300:22:00S. Transit clients. We expect the commercial segment to be down between 2% 3% Due to a couple of client decisions in the CX space related to their geographic mix of business as well as some uncertainty in volumes In certain industries including travel, logistics and telecom. Here we're anticipating a level of continuation of the macro pressures we saw last year similar to some of our peers. Our Commercial segment backlog heading into 2024 is not quite as strong Because of the lighter sales year in the first half of twenty twenty three, but the pipeline is improving and revenue typically ramps quicker here than in the other two segments. Speaker 300:22:45Finally, we have not assumed any Fed interest rate changes within this guide and so far as the impact of Benefit Wallet Business. Lastly, we expect the government segment to be down between 3% 4%. There are a couple of drivers here. We are anticipating the loss or minimally a significant delay or reduction in scope unrelated to performance in a government healthcare contract. This represents 115 basis points of decline. Speaker 300:23:16Additionally, We're anticipating some incremental volume headwinds in our Government Services business as the funding mechanism for summer EBT programs has changed in 2024. We're funding now split between state and federal sources. This is causing certain states to reevaluate these programs against other priorities. In terms of the pacing of revenue in 2024, we see it being very similar to 2023 in terms of waiting between the front half and back half of the year. As a reminder, Q1 is usually slightly higher than Q2 because of the impact of the open enrollment period within our healthcare client base. Speaker 300:23:58In 2024, We expect adjusted EBITDA margin to be in the range of 8% to 9%. The larger puts and takes in this outlook year over year The impact on EBITDA of the revenue drivers mentioned previously, as well as the impact of a prior year non recurring benefit of a $17,000,000 reversal of reserves relating to a favorable legal settlement as well as another $6,000,000 of non recurring IT expense related to transitioning away from a legacy IT vendor. We expect to convert adjusted EBITDA to adjusted free cash flow in the range of 5% to 10%, which is inclusive of the remainder of the 2018 tax refund and also a portion of incremental collections related to implementation activity within the Transportation segment, but offset with other timing items that we pulled into the Q4 of 2023. We expect CapEx to be approximately 110,000,000 and restructuring charges to be approximately $30,000,000 the latter being a substantial reduction as compared to 2023. In terms of our expectations for Q1, which will only have a small fragment of divestiture impact in it, We expect revenue to be down between 2% 3%. Speaker 300:25:21Based on some discrete items we are anticipating in the Q1, We expect the adjusted EBITDA margin to be below our full year guided range. That concludes our outlook for 2024. Let's now talk about how that fits into a pro form a walk to our 2025 exit rate. Turning to Slide 12, The key message I want to leave you with is that we are still on track and expect to generate $1,000,000,000 of deployable capital through the end of 2025. This is roughly 130% of our current market capitalization. Speaker 300:25:58With 2 divestitures announced and plan to close in the first half of twenty twenty four generating approximately $495,000,000 of after tax proceeds, We have increased the range of total net proceeds from our divestiture program from $500,000,000 to $700,000,000 to a range of $600,000,000 to $800,000,000 We have a handful of other transactions being marketed that we anticipate will close in the second half of 2024 and position us within this new range. This increase in net proceeds comes with a slight change in revenue mix for the remaining businesses. Segment 2025 exit growth rates remain intact as previously stated and this will still be an organization generating in excess of $3,000,000,000 of To date, we have only deployed $27,000,000 of capital through our share repurchase program Launched in Q2 2023 and this represents less than 3% of the total capital we expect to generate and deploy. Finally in my section, let's walk the 2024 outlook we saw on Slide 10 to an exit rate view of the business in 2025 and show you the hydraulics of how these divestitures roll off and the resultant impacts on revenue, margin, capital expenditure and other metrics. Let's turn now to Slide 13. Speaker 300:27:25Before we get into the details, I'll just orient you on this slide. The first column is the 2024 outlook that we discussed on Slide 10. The next column depicts the impacts of the divestiture program both announced and other anticipated transactions that we would expect to sign and close during 2024. Following that we are planning for 2025 and the last column is the 2025 financial exit rate of the business to compare against what we previously outlined last March in our investor briefing. Starting with the divestitures column, Achieving the stated range of net proceeds will remove approximately $500,000,000 of revenue from 2024 And pro form a that would be a similar number for 2023. Speaker 300:28:15This includes approximately $300,000,000 of revenue from the 2 transactions signed and announced, which comes off at an adjusted EBITDA margin of around 37% against similar for both years. The adjusted EBITDA margin of all of the planned divestitures both signed and contemplated here is approximately 27%. This results in the divestiture program transacting at an aggregate multiple of approximately 7 times adjusted EBITDA. This adjusted EBITDA margin includes the currently outsized impact from the BenefitWallet transaction. Against a more normalized long run interest rate environment say 2.5%, the aggregate divestitures are transacting at a multiple of closer to 10 times adjusted EBITDA. Speaker 300:29:04Looking at some of the other numbers on this page, our assumptions include approximately $50,000,000 of annualized stranded cost that will be addressed after we close the transactions and that is included in the EBITDA margins of the divested businesses noted earlier. Timing of realization will depend on the nature and length of the transition service agreements we enter into with the respective buyers to support the successful transition of the assets. We expect the announced transactions to close In the first half of twenty twenty four with the Benefit Wallet assets transitioning in 3 tranches beginning at the very end of the first quarter and concluding in the Q2. As noted in the second column of this slide, the after tax proceeds for these announced transactions are approximately $495,000,000 and we have multiple parts to get into the range of net proceeds that I outlined on Slide 12. Our expectation for 2025 is that the remaining organization will begin to achieve revenue growth of between 2% 4% as we progress towards the 2025 exit growth rate of 3% to 5%. Speaker 300:30:21Our current sales pipeline sits at close to $25,000,000,000 of total contract value, our highest ever. With continued focus on client retention, Further enhanced in a more focused portfolio of assets, we are confident we can achieve this growth. We expect an adjusted EBITDA margin expansion of between 203 100 basis points will be achieved through a series of margin expansion levers again for which we have multiple parts. Additionally, we are targeting a further $50,000,000 of annualized cost savings From a combination of efficiencies across the organization as we continue to streamline and right size our central costs, facilities and technology footprints. Consistent with the themes we laid out in the investor briefing last March, We expect that the impacts of our portfolio rationalization combined with the planned 2025 actions will result in a more agile, focused and higher growth company with less capital intensity. Speaker 300:31:27We believe we remain on a path to achieve this and we'll continue to provide updates along the journey as transactions get closer to closing and more transactions signed. That concludes my financial review of the Q4 and full year 2023 results and our update to the portfolio rationalization. And I'll hand it back to you Cliff for closing comments. Speaker 200:31:50Thank you, Steve. That concludes our Q4 and full year 2023 earnings call. Thank you very much everyone for listening to our review of 2023 and our outlook and plan for the future. We believe in the plan as I hope you do. Thanks again for being here and here's to a great 2024. Operator00:32:10Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or lock off the webcast at this time and enjoy the rest of your day.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallConduent Q4 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Annual report(10-K) Conduent Earnings HeadlinesNovo Nordisk: A Price Too Low To IgnoreApril 18 at 11:00 AM | seekingalpha.comNovo Nordisk A/S (NYSE:NVO) Receives Average Recommendation of "Hold" from AnalystsApril 18 at 2:49 AM | americanbankingnews.comCan you still profit from AI this year? (Read this ASAP)AI isn’t dead — it’s just getting started. Weiss Ratings — ranked #1 by both the SEC and the Wall Street Journal — just issued 3 new “Buy” signals on under-the-radar AI stocks. See the names and ticker symbols now (for free).April 18, 2025 | Weiss Ratings (Ad)Novo Nordisk downgraded by BMO as Eli Lilly gains ground in weight-loss drug raceApril 17 at 5:57 PM | finance.yahoo.comNovo Nordisk Stock Drops on Eli Lilly Oral Weight-Loss Drug Success, DowngradeApril 17 at 5:57 PM | msn.comBMO Capital Downgrades Novo Nordisk A (NVO)April 17 at 5:57 PM | msn.comSee More Novo Nordisk A/S Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Conduent? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Conduent and other key companies, straight to your email. Email Address About ConduentConduent (NASDAQ:CNDT) provides digital business solutions and services for the commercial, government, and transportation spectrum in the United States, Europe, and internationally. It operates through three segments: Commercial, Government Services, and Transportation. The Commercial segment offers business process services and customized solutions to clients in various industries; and customer experience management, business operations, healthcare claims and administration, and human capital solutions. The Government segment provides government-centric business process services to the United States federal, state, local, and foreign governments for public assistance, program administration, transaction processing, and payment services; and digital payments, child support payments, government healthcare, and eligibility and enrollment solutions. The Transportation segment offers systems, support, and revenue-generating solutions to government transportation agency clients; and public safety, mobility, and digital payment solutions. This segment also provides electronic tolling, urban congestion management, and mileage-based user solutions; transit solutions; citation and permit administration, parking enforcement, and curbside demand management solutions; and computer-aided dispatch/automatic vehicle location solutions. Conduent Incorporated was founded in 2016 and is headquartered in Florham Park, New Jersey.View Conduent ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Archer Aviation Unveils NYC Network Ahead of Key Earnings Report3 Reasons to Like the Look of Amazon Ahead of EarningsTesla Stock Eyes Breakout With Earnings on DeckJohnson & Johnson Earnings Were More Good Than Bad—Time to Buy? Why Analysts Boosted United Airlines Stock Ahead of EarningsLamb Weston Stock Rises, Earnings Provide Calm Amidst ChaosIntuitive Machines Gains After Earnings Beat, NASA Missions Ahead Upcoming Earnings Tesla (4/22/2025)Intuitive Surgical (4/22/2025)Verizon Communications (4/22/2025)Canadian National Railway (4/22/2025)Novartis (4/22/2025)RTX (4/22/2025)3M (4/22/2025)Capital One Financial (4/22/2025)General Electric (4/22/2025)Danaher (4/22/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 4 speakers on the call. Operator00:00:00Greetings, and welcome to the Conduent Q4 2023 Earnings As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Giles Goodburn, Vice President, Investor Relations. Thank you. You may begin. Speaker 100:00:26Thank you, operator, and thanks, everyone, for joining us today to discuss Conduent's 4th quarter and full year 2023 earnings. We hope you had a chance to review our press release issued earlier this morning. Joining me today is Cliff Skelton, our President and CEO and Steve Wood, our CFO. Today's agenda is as follows: Cliff will provide an overview of our results and a business update. Steve will then walk you through the financials for the year, as well as providing a financial outlook. Speaker 100:00:58Cliff will then provide his closing comments. This call is being webcast and a copy of the slides used during this call as well as the press release were filed with the SEC this morning on Form 8 ks. This information as well as the detailed financial metrics package are available on the Investor Relations section of the Conduent website. During this call, we may make statements that are forward looking. These forward looking statements reflect management's current beliefs, assumptions and expectations and are subject to a number of factors that may cause actual results to differ materially from those statements. Speaker 100:01:40Information concerning these factors is included in Conduent's Annual Report on Form 10 ks filed with the SEC. We do not intend to update these forward looking statements as a result of new information or future events or developments except as required by law. The information presented today includes non GAAP financial measures. Because these measures are not calculated in accordance with U. S. Speaker 100:02:08GAAP, They should be viewed in addition to and not as a substitute for the company's reported results. For more information regarding definitions of our non GAAP measures and how we use them as well as the limitations to their usefulness for comparative purposes, please see our press release. And now, I would like to turn the call over to Cliff. Speaker 200:02:30Thanks, Giles, and thank you all for joining Conduent's Q4 year end 2023 earnings call. Hopefully, this will be the last call earnings call where we don't have Q and A at the end. We've been working to establish a sell side group to help provide services Q3 earnings call both from within our own portfolio and our clients. As you know, Conduent retains a very diverse platform of products and services, spanning the myriad of industries in both commercial and the government space across federal, state and local levels. At times, We take advantage and at times we suffer through the changing financial pressures our commercial clients experience and oftentimes changing landscape, political and otherwise that our government partners experience. Speaker 200:03:20But regardless of all that, the diversity of our offerings can be both a blessing and oftentimes a headwind. On one hand, we're positioned to capture more opportunities than most because of our diversity. On the other hand, that diversity requires horizontal bandwidth and with that want to be more nimble. We want to be more growth oriented. And you'll see in today's presentation a description of how we're progressing against those rationalization efforts you've heard us talk about in the past. Speaker 200:03:52And Steve Wood, our CFO, will take you through the resulting financial expectations, particularly indexed on a 2025 exit rate. We see this as described previously in our Q1 2023 investor briefing as a 3 year journey. And we just finished year 1 of that journey In a year where we announced 2 divestitures with expected net proceeds just shy of $500,000,000 both of those expected to close in increments in the first half of twenty twenty four. You might have noticed we also announced a $75,000,000 share repurchase program in 2023. Meanwhile, let's begin with the results in 2023. Speaker 200:04:28Steve will, of course, take you through all the details. But Q4 and 2023 writ large finished Pretty strong for us. When compared to the outlook we presented in Q3 earnings, we exceeded expectations across adjusted revenue, EBITDA and EBITDA margins. Adjusted revenue for Q4 was $953,000,000 $3,700,000,000 for the full year. Adjusted EBITDA was one $103,000,000 $378,000,000 for Q4 and full year respectively, and our adjusted EBITDA margin was $10,800,000 $10,200,000 respectively. Speaker 200:05:00Again, all these measurements exceeded our expectations for Q4 and the full year. However, regarding sales for the year, our was a bit of a tale of 2 cities. On one hand, our new business ACV was down slightly year over year and quarter over quarter, but roughly flat sequentially. On the other hand, TCV total contract value, an indication of future long term growth, Exhibited the best achievement since we became Conduent, up 20 percent to $2,257,000 Meanwhile, revenue retention in 2023 was slightly better year over year. However, sales really especially in the commercial space created a sequential reduction in our net ARR number. Speaker 200:05:41As you might recall, our main focus is to keep that net ARR number positive and increasing to the new normal. It doesn't take into account volume changes associated with market conditions or small shifts in the portfolio. But much like many of our commercial competitors experienced, Market buying trends were slower in 2023. Steve will talk about that here in a minute, but it did add headwind to our sales performance. Net net 2023 from a financial perspective was stronger than most of our recent predictions, but certainly had room to improve in both sales and cash generation. Speaker 200:06:16Speaking of cash, Steve will take you through the details, but the timing of our expected tax return, Implementation milestone achievements in our transportation business both made for a year we expect to improve upon in 2024. Regarding 2024, it's going to be a difficult or at least a different kind of compare. Again, Steve will provide an analysis of 2024 absent divestiture activity. But the fact is, there will be a lot of divestiture activity in the revenue, expense changes, Proceed increments and other predictions will have to include some level of predictability in 2024 expectations or flexibility anyway. For the last three earnings, we referred you back to the investor event we had in March. Speaker 200:07:03I'm not going to disappoint as I'll mention that yet again, As it does remain the linchpin for our go forward strategy and execution plan, we've always stated that a rationalized portfolio will tee up several levers for the future. Let me talk about a couple of those levers. First importantly, we expect to generate roughly $1,000,000,000 in capital to be used for highest and best future benefit. Some of that capital allocation will have timing components to it with increasing flexibility and optionality over time That would include the obvious return to shareholder options and debt reduction as well as acquisition or internal investment options. Of course, there'll be more to come on that as the proceeds begin to flow in here later in March. Speaker 200:07:462nd, a more nimble, more growable portfolio platform. 3rd, a narrower scope of products and capabilities that allow for better management bandwidth allocation, while retaining that defensive nature we enjoy with a diverse portfolio. 4th, better cash flow conversion rates and an enhanced valuation. Now as I mentioned, we announced the first two of our anticipated divestitures, which are expected to close and monetize, as I also said, in the first half of twenty twenty four. There are others in process as well. Speaker 200:08:18Again, the mission is to land on a $3,000,000,000 ish, 3% to 5% growing company with reduced debt and an enhanced valuation at that 2025 exit. Steve will detail some components of that plan, but it's all of our job to make it happen. Lastly, we compete every day out in the market like everyone else, whether it's for new business or new talent in our workforce. Our team of 59,000 associates worked very hard in 2023 to improve every aspect of our performance against that competitive landscape. And I'm proud of what we accomplished. Speaker 200:08:53Whether it's in the financials or the culture improvements or the industry recognition or the strong improvement in our client relationships, we made significant progress. And that progress takes time to bear fruit, but the foundation is built and the next level of achievement is clearly on the horizon. So with that, I'll thank you in advance and now turn it over to Steve for the details. Steve? Speaker 300:09:15Thanks, Cliff. As we have done in the past, we are reporting both GAAP and non GAAP numbers. The reconciliations are in our filings and in the appendix of the presentation. Let's turn to Slide 5 and discuss our key sales metrics. In the 4th quarter, our primary sales metric, new business ACV was down $42,000,000 versus the prior year at $152,000,000 roughly flat sequentially against the 3rd quarter and in line with what we expected, absenting the volume of larger deals in the government segment, which were a feature of our Q4 2022 ACV results when we signed 3 large deals. Speaker 300:09:57This quarter did include the signing of another double digit ACV new logo in our government healthcare space, comprising a module of our cloud native conduit Medicaid suite. Our commercial segment is still experiencing longer decision making cycles and cautious buying behavior, but finished the year stronger than it started, up 35% versus Q4 2022. For the full year, ACV was down 13% as compared to 2022 with most of this impact in the commercial segment where ACV was down 20 9%. And this was partially offset in the government and transportation segments, which in aggregate grew their ACV year over year by 8%. New Business TCV was strong in 2023, growing 20% as compared to full year 2022. Speaker 300:10:49This was primarily due to the $1,000,000,000 contract we signed in Q2 with the state of Victoria, Australia In our Transportation segment, where we began implementing their new account based ticketing platform in Q3 and took over operations of the legacy system from the incumbent in December. As a reminder, this is a 15 year contract generating implementation revenues over the next 3 to 4 years. Our net ARR activity metric, Our combined measure of wins, losses, pricing effects and other contractual changes has continued to remain positive. This trailing 12 month measure does not predict the timing of revenue, but is based on the timing of notification. A full definition of this metric is covered in the appendix of our presentation. Speaker 300:11:38The Q4 2023 net ARR activity metric was down sequentially, primarily due to the roll off of a strong ARR performance in Q4 2022 and lighter signings in certain areas of the commercial segment during 2023. Losses were broadly in line with where we expected. Very briefly on Slide 6, You could see the large renewal quarter that we had in Q4 2023. Let's now turn to Slide 7 and discuss our full year 2023 P and L metrics. We finished the year with results coming in slightly stronger than how I messaged in our last earnings update, topping both our Q4 and modified full year guide. Speaker 300:12:25Revenue for 2023 was 3,720,000,000 As compared to $3,850,000,000 in 2022, down 3.3% or 3.6% in constant currency. We experienced stronger than anticipated performance in our Government segment offsetting some softness in both our Commercial and Transportation segments which I'll cover as I discuss the individual segment results later. Adjusted EBITDA was $378,000,000 for the full year in 2023 as compared to $394,000,000 in 2022 and our adjusted EBITDA margin at 10.2% was substantially unchanged compared to 2022. This was within our original full year guided range and slightly higher than how I laid it out in our last earnings update due to a couple of discrete items that affected the 4th quarter. Let's now turn to Slide 8 and go over the segment results. Speaker 300:13:24For the full year, Commercial segment revenues were $1,930,000,000 down 3% as compared to 2022. The incremental benefit wallet revenue in the year was an approximate $54,000,000 tailwind and non repeating items in the prior year were an approximate $30,000,000 headwind. New business ramp and add on sales fell slightly short of outpacing loss business for the year, primarily due to the soft new business environment in 2023 in certain areas of the Commercial segment. The balance of the impact on revenue was lower volumes from some large clients predominantly in the CX space In certain industries including travel, logistics and telecom. We believe much of this is macro related and therefore likely temporary. Speaker 300:14:14Commercial segment adjusted EBITDA improved 21% year over year and the adjusted EBITDA margin of 14.2% was up 2 90 basis points year over year. Increased benefit wallet revenue contributed to this margin improvement along with operational and this was partially offset by lower volumes and non repeating items from the prior year. For the government segment, full year 2023 revenue performed better than expected declining 4.9% as compared to 2022. The year over year impact of the one time government stimulus volumes in 2022 was a headwind of 42,000,000 New business ramp, including the 3 large deals we signed in Q4 2022 combined with stronger government payment volumes drove the better performance, but not quite enough to outrun the known loss business from prior years. Government segment adjusted EBITDA declined by 1.8% year over year driven by the impact of the one time government stimulus volumes in 20 and loss business partially offset with the benefit from a portion of a legal settlement of $17,000,000 as well as stronger government payment volumes. Speaker 300:15:32The adjusted EBITDA margin of 29.7% was up 90 basis points year over year. Transportation segment revenues declined 1.8% in 2023 as compared to 2022. Transportation segment results were negatively impacted from transitioning certain clients on large long running implementations through go live. Some of these programs experienced extended completion timelines, largely driven by increased or changing client scope and requirements As we near the end of these multiyear implementations, this caused more of a drag on revenue and margins during the year than we originally anticipated. Transportation segment adjusted EBITDA was $41,000,000 as compared to $84,000,000 in 2022 And the adjusted EBITDA margin of 5.9% was down 5.90 basis points year over year. Speaker 300:16:31These extended completion timelines on a handful of our larger implementations caused most of this decline. We continue to focus on implementation and operational discipline and returning the business to more predictable revenue and margin trajectories. Our Q4 transportation results posted year over year revenue growth and a stronger adjusted EBITDA versus Q4 2022. Let's now turn to Slide 9 and discuss the balance sheet and cash flow. Our total liquidity position remains strong With a combined $1,100,000,000 in cash and available revolving credit facility, we ended the year with $519,000,000 of total cash on the balance sheet And our $550,000,000 revolving credit facility is almost completely unused. Speaker 300:17:22Our net leverage ratio is 2.1 turns which is within our range of 2 to 2.5 turns. Our debt maturities are long dated and we have no significant debt repayments until the end of 2026. Capital expenditure for the year was 3.1 percent of revenue, lower than our revised guide on capital spend, And we continue to find opportunities to drive efficiencies in our capital investment programs. We only received $6,000,000 of the $29,000,000 federal tax refund related to 2018 in the Q4 of 2023. We have now received the remainder in the Q1 of 2024. Speaker 300:18:03Our modified guide for the full year contemplated full receipt of that tax refund. Our $93,000,000 of adjusted free cash flow in Q4 was broadly in line with that modified guide for the full year due to some offsets from some other favorable timing items. We repurchased approximately 6,600,000 shares during the quarter at an average price of about $3 And as of the end of the year, we have purchased approximately 8,800,000 shares. There is approximately $48,000,000 remaining under our existing $75,000,000 share repurchase authority. Before we move to Slide 10 and talk specifically about 2024 guidance, Let me spend a few minutes outlining our approach to how we talk about the year and interlock it for you into our previously discussed outlines that we gave around the divestiture work and what that means for deployable capital and an exit rate for the business in 2025. Speaker 300:19:03As we move into 2024 and continue to execute on the financial framework that I laid out last March in our investor briefing, The key message I want to convey is that we believe we are on track to deliver the $1,000,000,000 of deployable capital by the end of 2025. I'll provide a slightly updated view of the walk to that $1,000,000 of deployable capital later in the presentation. In 2024, we will have impacts of the 2 currently signed divestitures and potentially others. The sale of our Benefit Wallet business that we announced in The Q3 will generate approximately $425,000,000 of pretax proceeds and the sales of our curbside and public safety businesses announced in the Q4 will generate approximately $230,000,000 of pre tax proceeds as well as removing 30 to $35,000,000 of liabilities for the leased portfolio of assets associated with that business. Note that related to the sale of the curbside and public safety businesses, dollars 50,000,000 of the proceeds will be receipted during the first half of twenty twenty five. Speaker 300:20:12While timing is not certain, we do expect both to close during the first half of twenty twenty four. As mentioned earlier, we continue to work on other opportunities, which could also impact the latter part of 2024. Our approach to guiding our expected results is therefore going to be as follows. I'll start by laying out a 2024 outlook for Conduent Without removing the impact of these divestitures, thereby giving a like for like compared to the year we've just closed. I'll explain some of the larger puts and takes within the 3 segments and our expectations for those businesses in 2024. Speaker 300:20:52I'll then provide a walk to our exit rate in 2025 and show you pro form a effects of the divestitures we've signed as well as those we are currently expecting to sign and close in 2024. You'll see from that walk that we're broadly within the same ranges we outlined last March our investor briefing and the objective remains as stated to narrow conduit into a more focused portfolio of assets still generating revenue in excess of $3,000,000,000 and freeing up approximately $1,000,000,000 of capital to deploy against our allocation priorities. First, let's get into the content on Slide 10. Overall, we expect adjusted revenues in 2024 to be in the range of $3,600,000,000 to $3,700,000,000 At the midpoint of this range, this would represent a year over year decline of around 2%. We expect the Transportation segment to grow approximately 5 in 2023 driven by the State of Victoria contract offset partially by a long anticipated scope and pricing change from one of our large U. Speaker 300:22:00S. Transit clients. We expect the commercial segment to be down between 2% 3% Due to a couple of client decisions in the CX space related to their geographic mix of business as well as some uncertainty in volumes In certain industries including travel, logistics and telecom. Here we're anticipating a level of continuation of the macro pressures we saw last year similar to some of our peers. Our Commercial segment backlog heading into 2024 is not quite as strong Because of the lighter sales year in the first half of twenty twenty three, but the pipeline is improving and revenue typically ramps quicker here than in the other two segments. Speaker 300:22:45Finally, we have not assumed any Fed interest rate changes within this guide and so far as the impact of Benefit Wallet Business. Lastly, we expect the government segment to be down between 3% 4%. There are a couple of drivers here. We are anticipating the loss or minimally a significant delay or reduction in scope unrelated to performance in a government healthcare contract. This represents 115 basis points of decline. Speaker 300:23:16Additionally, We're anticipating some incremental volume headwinds in our Government Services business as the funding mechanism for summer EBT programs has changed in 2024. We're funding now split between state and federal sources. This is causing certain states to reevaluate these programs against other priorities. In terms of the pacing of revenue in 2024, we see it being very similar to 2023 in terms of waiting between the front half and back half of the year. As a reminder, Q1 is usually slightly higher than Q2 because of the impact of the open enrollment period within our healthcare client base. Speaker 300:23:58In 2024, We expect adjusted EBITDA margin to be in the range of 8% to 9%. The larger puts and takes in this outlook year over year The impact on EBITDA of the revenue drivers mentioned previously, as well as the impact of a prior year non recurring benefit of a $17,000,000 reversal of reserves relating to a favorable legal settlement as well as another $6,000,000 of non recurring IT expense related to transitioning away from a legacy IT vendor. We expect to convert adjusted EBITDA to adjusted free cash flow in the range of 5% to 10%, which is inclusive of the remainder of the 2018 tax refund and also a portion of incremental collections related to implementation activity within the Transportation segment, but offset with other timing items that we pulled into the Q4 of 2023. We expect CapEx to be approximately 110,000,000 and restructuring charges to be approximately $30,000,000 the latter being a substantial reduction as compared to 2023. In terms of our expectations for Q1, which will only have a small fragment of divestiture impact in it, We expect revenue to be down between 2% 3%. Speaker 300:25:21Based on some discrete items we are anticipating in the Q1, We expect the adjusted EBITDA margin to be below our full year guided range. That concludes our outlook for 2024. Let's now talk about how that fits into a pro form a walk to our 2025 exit rate. Turning to Slide 12, The key message I want to leave you with is that we are still on track and expect to generate $1,000,000,000 of deployable capital through the end of 2025. This is roughly 130% of our current market capitalization. Speaker 300:25:58With 2 divestitures announced and plan to close in the first half of twenty twenty four generating approximately $495,000,000 of after tax proceeds, We have increased the range of total net proceeds from our divestiture program from $500,000,000 to $700,000,000 to a range of $600,000,000 to $800,000,000 We have a handful of other transactions being marketed that we anticipate will close in the second half of 2024 and position us within this new range. This increase in net proceeds comes with a slight change in revenue mix for the remaining businesses. Segment 2025 exit growth rates remain intact as previously stated and this will still be an organization generating in excess of $3,000,000,000 of To date, we have only deployed $27,000,000 of capital through our share repurchase program Launched in Q2 2023 and this represents less than 3% of the total capital we expect to generate and deploy. Finally in my section, let's walk the 2024 outlook we saw on Slide 10 to an exit rate view of the business in 2025 and show you the hydraulics of how these divestitures roll off and the resultant impacts on revenue, margin, capital expenditure and other metrics. Let's turn now to Slide 13. Speaker 300:27:25Before we get into the details, I'll just orient you on this slide. The first column is the 2024 outlook that we discussed on Slide 10. The next column depicts the impacts of the divestiture program both announced and other anticipated transactions that we would expect to sign and close during 2024. Following that we are planning for 2025 and the last column is the 2025 financial exit rate of the business to compare against what we previously outlined last March in our investor briefing. Starting with the divestitures column, Achieving the stated range of net proceeds will remove approximately $500,000,000 of revenue from 2024 And pro form a that would be a similar number for 2023. Speaker 300:28:15This includes approximately $300,000,000 of revenue from the 2 transactions signed and announced, which comes off at an adjusted EBITDA margin of around 37% against similar for both years. The adjusted EBITDA margin of all of the planned divestitures both signed and contemplated here is approximately 27%. This results in the divestiture program transacting at an aggregate multiple of approximately 7 times adjusted EBITDA. This adjusted EBITDA margin includes the currently outsized impact from the BenefitWallet transaction. Against a more normalized long run interest rate environment say 2.5%, the aggregate divestitures are transacting at a multiple of closer to 10 times adjusted EBITDA. Speaker 300:29:04Looking at some of the other numbers on this page, our assumptions include approximately $50,000,000 of annualized stranded cost that will be addressed after we close the transactions and that is included in the EBITDA margins of the divested businesses noted earlier. Timing of realization will depend on the nature and length of the transition service agreements we enter into with the respective buyers to support the successful transition of the assets. We expect the announced transactions to close In the first half of twenty twenty four with the Benefit Wallet assets transitioning in 3 tranches beginning at the very end of the first quarter and concluding in the Q2. As noted in the second column of this slide, the after tax proceeds for these announced transactions are approximately $495,000,000 and we have multiple parts to get into the range of net proceeds that I outlined on Slide 12. Our expectation for 2025 is that the remaining organization will begin to achieve revenue growth of between 2% 4% as we progress towards the 2025 exit growth rate of 3% to 5%. Speaker 300:30:21Our current sales pipeline sits at close to $25,000,000,000 of total contract value, our highest ever. With continued focus on client retention, Further enhanced in a more focused portfolio of assets, we are confident we can achieve this growth. We expect an adjusted EBITDA margin expansion of between 203 100 basis points will be achieved through a series of margin expansion levers again for which we have multiple parts. Additionally, we are targeting a further $50,000,000 of annualized cost savings From a combination of efficiencies across the organization as we continue to streamline and right size our central costs, facilities and technology footprints. Consistent with the themes we laid out in the investor briefing last March, We expect that the impacts of our portfolio rationalization combined with the planned 2025 actions will result in a more agile, focused and higher growth company with less capital intensity. Speaker 300:31:27We believe we remain on a path to achieve this and we'll continue to provide updates along the journey as transactions get closer to closing and more transactions signed. That concludes my financial review of the Q4 and full year 2023 results and our update to the portfolio rationalization. And I'll hand it back to you Cliff for closing comments. Speaker 200:31:50Thank you, Steve. That concludes our Q4 and full year 2023 earnings call. Thank you very much everyone for listening to our review of 2023 and our outlook and plan for the future. We believe in the plan as I hope you do. Thanks again for being here and here's to a great 2024. Operator00:32:10Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or lock off the webcast at this time and enjoy the rest of your day.Read morePowered by