Business Services Provider Conduent’s Mixed Bag Q4, Hit By Headwinds In Its Commercial Sales Efforts

Business Services Provider Conduent’s Mixed Bag Q4, Hit By Headwinds In Its Commercial Sales Efforts

Business Services Provider Conduent’s Mixed Bag Q4, Hit By Headwinds In Its Commercial Sales Efforts

Conduent Inc (NASDAQ:CNDT) shares are trading higher after it reported fourth-quarter FY23 results.

Revenues declined 3.3% Y/Y to $953 million, beating the analyst consensus of $930 million. 

The new business TCV pipeline rose 6% Q/Q and 10% Y/Y, led by several sizeable early-stage opportunities in the Government and Transportation Segment.

Adjusted EBITDA rose 8.4% Y/Y to $103 million, with margin expanding 120 bps Y/Y to 10.8%. Adjusted EPS of $0.03 missed the street view of $0.04.

Operating cash flow stood at $122 million, with adjusted FCF of $93 million. Conduent repurchased approximately 6.6 million shares in the quarter.

The company exited the quarter with cash and equivalents worth $498 million. Long-term debt, as of year-end, was $1.25 billion.

In the fourth quarter of 2023, the company inked a deal to sell its Curbside Management and Public Safety Solutions businesses for $230 million plus the assumption of certain liabilities and expects it to be completed in the first half of 2024.

Outlook: For FY24, the company expects adjusted revenue of $3.60 billion-$3.70 billion against the consensus of $3.70 billion.

Cliff Skelton, President and Chief Executive Officer, said, “In March 2023, we outlined a game plan for growth, rationalization, and improved cash flow generation with a target 2025 exit plan. We concluded year one of that plan with two portfolio divestiture announcements expected to close in the first half of 2024, a share repurchase program well underway, several key client wins, and renewed confidence in our plan to further rationalize the portfolio and efficiently deploy capital for the future.”

Also ReadConduent’s Big Move: Shedding Two Businesses for $260M To Slash Debt And Refine Portfolio

Price Action: CNDT shares are trading higher by 2.5% to $3.4850 on the last check Wednesday.