Core Insights - The collaboration between Solutions by Text (SBT) and Conduent aims to enhance loan servicing through the integration of SBT's mobile messaging platform into Conduent's Loan Manager, focusing on improving operational performance and customer satisfaction [1][2][3] Group 1: Partnership Objectives - The partnership addresses the increasing demand for efficient, mobile-first communication, leveraging SBT's SMS, MMS, and RCS messaging capabilities to enhance automated loan servicing workflows [2][3] - The integration is expected to reduce resolution times for servicing issues, increase on-time payments, and improve the overall borrower experience [2][3] Group 2: Company Strengths - Conduent is recognized for its leadership in digital loan management, automation, AI, and analytics, while SBT specializes in consumer finance messaging solutions [3] - SBT's FinText™ platform is designed to facilitate frictionless messaging in the consumer finance sector, aligning with the growing trend of digital-first financial technologies [3] Group 3: Market Expectations - Consumers increasingly expect real-time engagement via mobile devices, making traditional communication methods like email and phone calls less effective [4] - The partnership aims to enhance loan management by providing secure, customer-centric technology that fosters meaningful conversations between lenders and borrowers [4] Group 4: Operational Efficiency - The collaboration is projected to boost operational efficiency for clients by automating routine communications and reducing collection costs, thereby delivering a digital-first experience [4]

Core Insights - Donovan Jones is an IPO research specialist with 15 years of experience in identifying high-quality IPO opportunities [1] - He leads the investing group IPO Edge, which provides actionable information on growth stocks through various resources including IPO filings, previews, calendars, and a comprehensive guide to IPO investing [1] Company and Industry Summary - IPO Edge offers a database of U.S. IPOs and tracks the entire IPO lifecycle from filing to listing, including quiet period and lockup expiration dates [1]

Core Insights - Conduent reported a quarterly loss of $0.09 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.07, but an improvement from a loss of $0.14 per share a year ago [1] - The company's revenues for the quarter ended September 2025 were $767 million, missing the Zacks Consensus Estimate by 3.44% and down from $807 million year-over-year [2] - Conduent's stock has underperformed significantly, losing about 45.1% since the beginning of the year compared to the S&P 500's gain of 14.3% [3] Financial Performance - Over the last four quarters, Conduent has surpassed consensus EPS estimates two times [2] - The current consensus EPS estimate for the upcoming quarter is $0.03 on revenues of $829.33 million, while for the current fiscal year, it is -$0.29 on revenues of $3.13 billion [7] Industry Outlook - The Outsourcing industry, to which Conduent belongs, is currently ranked in the top 13% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Conduent's stock performance [5]

Core Insights - Conduent Inc's shares fell significantly following the release of its third-quarter 2025 earnings, reflecting disappointing financial results [1][2]. Financial Performance - The company reported revenue of $767 million, a decrease of 5% year-over-year, and below the analyst estimate of $794.33 million. Adjusted revenue also stood at $767 million, down 1.8% [2]. - GAAP diluted EPS was a loss of 30 cents, compared to earnings of 72 cents a year earlier. Adjusted EPS reported a loss of nine cents, missing the consensus estimate of a seven cents loss but showing improvement from a 14 cents loss a year earlier [2]. - Adjusted EBITDA increased to $40 million, with a margin expanding to 5.2% from 4.1% in the prior year, indicating operational improvement despite challenging revenue trends [3]. Cash Flow and Debt - Operating cash flow for the quarter was negative $39 million, and adjusted free cash flow was negative $54 million. At the end of the quarter, the company had $264 million in cash and $198 million of unused capacity in its renewed credit facility. Total debt reached $713 million [4]. - The company repurchased approximately 4.7 million shares during the quarter, demonstrating a commitment to returning value to shareholders despite ongoing challenges [4]. Business Developments - New business signings in Annual Contract Value (ACV) reached $111 million, and the Net ARR Activity Metric (TTM) was $25 million, reflecting positive momentum in pipeline and recurring revenue growth efforts [3]. - Highlights included refinancing of its credit facility, payoff of Term Loan A, a new Pay-by-Plate tolling contract, expansion of operations in the Philippines, and integration of GenAI-powered analytics into its finance solutions [6]. Outlook - For the full year 2025, Conduent lowered its adjusted revenue guidance to $3.05 billion–$3.10 billion, down from a prior range of $3.10 billion–$3.20 billion, and below the consensus estimate of $3.129 billion. The adjusted EBITDA margin outlook remains at 5%–5.5% [7]. - CEO Cliff Skelton expressed confidence in the company's strategic trajectory, noting that 87% of the $1 billion capital allocation target has been achieved, and emphasized the firm's ample liquidity through cash reserves and a renewed credit facility [8].

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $767 million, slightly up sequentially and in line with guidance, but down 1.8% year-over-year from $781 million in Q3 2024 [5][11] - Adjusted EBITDA for the quarter was $40 million, up from $32 million in Q3 2024, with an adjusted EBITDA margin of 5.2%, up 110 basis points year-over-year [6][12] - The net leverage ratio increased to 3.2 times due to cash flow items, with total cash on the balance sheet at approximately $264 million [15][16] Business Line Data and Key Metrics Changes - Commercial segment adjusted revenue was $367 million, down 4.7% year-over-year, primarily due to volume declines from the largest client, although the top 25 commercial accounts grew year-over-year [12][13] - Government segment adjusted revenue was down 6.7% at $238 million, attributed to implementation impacts and a client canceling an implementation [13] - Transportation segment adjusted revenue increased by 14.9% year-over-year to $162 million, driven by strong equipment sales in the international transit business [14] Market Data and Key Metrics Changes - New business Annual Contract Value (ACV) signed in Q3 was $111 million, consistent with the prior year, while Year-to-date new business ACV is up 5% compared to the same period in 2024 [10] - The qualified ACV pipeline remains strong at $3.4 billion, up 9% year-over-year, driven by opportunities in the federal space [11] Company Strategy and Development Direction - The company is focused on portfolio rationalization and enhancing its technology capabilities, particularly in AI initiatives [7][19] - A new board member with significant industry experience was added to strengthen the board [8] - The company is revising its commercial go-to-market strategy to improve client penetration and sales execution [21][47] Management Comments on Operating Environment and Future Outlook - Management noted the impact of the government shutdown on deal timing but expressed confidence in achieving adjusted EBITDA margin targets between 5% and 5.5% for the year [18][20] - The company anticipates that once the government shutdown concerns are resolved, cash flow metrics will improve [7][16] - Management remains optimistic about future growth, citing pent-up demand and ongoing sales pipeline expansion [23][24] Other Important Information - The company completed refinancing of its revolving credit facilities, simplifying its balance sheet [15][22] - Adjusted free cash flow for the quarter was negative $54 million, impacted by timing items related to contract amendments and post-implementation phases [16] Q&A Session Summary Question: How much of the pipeline actually closed this quarter? - Management indicated that the government shutdown affected the timing of deal closures, but they expect a gradual improvement as approvals resume [29] Question: How is productivity or quality gains from GenAI being measured? - Management highlighted the use of GenAI in fraud reduction and customer experience improvements, with ongoing evaluations of how to share benefits with clients [30][31] Question: Are there any stranded costs left to tackle? - Management confirmed that they are through the initial phase of stranded costs and are continuously optimizing costs across the organization [35] Question: Are there changes to contract clauses to reduce churn risk? - Management stated that the revenue stream remains unaffected by the government shutdown, and they do not see a need to change the contract model at this time [36] Question: What does the client mix look like for AI endeavors? - Management noted that healthcare is a significant focus area for AI initiatives, with opportunities in both commercial and government sectors [43][44] Question: What are the growth opportunities on the commercial side? - Management emphasized the need for better client penetration and the deployment of new software licensing opportunities to drive growth [46][47]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $767 million, slightly up sequentially and in line with guidance, but down 1.8% year-over-year from $781 million in Q3 2024 [11][12] - Adjusted EBITDA for the quarter was $40 million, up from $32 million in Q3 2024, with an adjusted EBITDA margin of 5.2%, up 110 basis points year-over-year [12][14] - The net leverage ratio increased to 3.2x due to cash flow items, with adjusted free cash flow for the quarter at -$54 million [15][17] Business Line Data and Key Metrics Changes - The commercial segment adjusted revenue was $367 million, down 4.7% year-over-year, primarily due to volume declines from the largest client [12][13] - Government segment adjusted revenue was down 6.7% at $238 million, attributed to implementation impacts and a client canceling an implementation [13] - Transportation segment adjusted revenue increased by 14.9% year-over-year to $162 million, driven by strong equipment sales [14] Market Data and Key Metrics Changes - New business Annual Contract Value (ACV) signed in the quarter was $111 million, consistent with the prior year, while year-to-date new business ACV was up 5% [10] - The qualified ACV pipeline remains strong at $3.4 billion, up 9% year-over-year, driven by government segment opportunities [11] Company Strategy and Development Direction - The company is focused on portfolio rationalization and enhancing its technology capabilities, particularly in AI initiatives [8][19] - A new board member with significant industry experience has been added to strengthen the board [8] - The company is revising its commercial go-to-market strategy to improve client penetration and sales execution [21] Management's Comments on Operating Environment and Future Outlook - Management noted the impact of the federal government shutdown on deal timing but expressed confidence in achieving adjusted EBITDA margin targets [18][20] - The company anticipates that once the shutdown concerns are resolved, cash flow metrics will improve [7][18] - Management remains optimistic about future growth, citing pent-up demand and ongoing sales pipeline expansion [21][23] Other Important Information - The company has refinanced its revolving credit facility, simplifying its balance sheet [7][15] - AI initiatives are being deployed to enhance operational efficiency and reduce fraud, particularly in government programs [22] Q&A Session Summary Question: How much of the pipeline actually closed this quarter? - Management indicated that the government shutdown has delayed some deals, but they expect a gradual release of opportunities as the situation normalizes [29] Question: How is productivity or quality gains from GenAI being measured? - The primary pilot in the government space focuses on fraud reduction, with expectations of spreading these capabilities across Medicaid and SNAP environments [30][31] Question: Are there any specific costs left to tackle from stranded costs? - Management stated that they are through the initial phase of stranded costs and are continuously optimizing costs across the organization [35] Question: Are there changes to contract clauses to reduce churn risk? - Management confirmed that the revenue stream remains unaffected by the government shutdown, and no changes to the contract model are currently planned [36] Question: What does the client mix look like for AI endeavors? - The commercial space has a significant focus on healthcare, while the government space targets Medicaid processing for fraud reduction [44] Question: What are the growth opportunities on the commercial side? - Management is focused on increasing product penetration within existing clients and enhancing the sales pipeline to support growth [46][47]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $767 million, slightly up sequentially but down 1.8% year-over-year from $781 million in Q3 2024 [11][12] - Adjusted EBITDA for the quarter was $40 million, up from $32 million in Q3 2024, with an adjusted EBITDA margin of 5.2%, up 110 basis points year-over-year [12][14] - The net leverage ratio increased to 3.2 times due to cash flow items, with total cash on the balance sheet at approximately $264 million [15][16] Business Line Data and Key Metrics Changes - The commercial segment adjusted revenue was $367 million, down 4.7% year-over-year, primarily due to volume declines from the largest client [12][13] - Government segment adjusted revenue decreased by 6.7% to $238 million, attributed to implementation impacts and a client canceling an implementation [13] - Transportation segment adjusted revenue increased by 14.9% year-over-year to $162 million, driven by strong equipment sales in the international transit business [14] Market Data and Key Metrics Changes - New business Annual Contract Value (ACV) was $111 million, consistent with the prior year, while Year-to-date new business ACV was up 5% compared to the same period in 2024 [10] - The qualified ACV pipeline remains strong at $3.4 billion, up 9% year-over-year, driven by opportunities in the federal space [11] Company Strategy and Development Direction - The company is focused on portfolio rationalization and enhancing its technology capabilities, particularly in AI initiatives [8][22] - A new board member with significant industry experience was added to strengthen the company's strategic direction [8] - The company is revising its commercial go-to-market strategy to improve client penetration and sales execution [21][40] Management's Comments on Operating Environment and Future Outlook - Management noted that the government shutdown has created uncertainty but has not significantly impacted revenue streams [20][33] - The company expects to achieve an adjusted EBITDA margin between 5% and 5.5% for the year, with adjusted revenue guidance between $3.05 billion and $3.1 billion [18] - Management expressed optimism about future growth, citing pent-up demand and ongoing sales pipeline expansion [20][23] Other Important Information - The company completed refinancing of its revolving credit facilities, simplifying its balance sheet [15][22] - Adjusted free cash flow for the quarter was negative $54 million, impacted by timing issues related to contract approvals [16] Q&A Session Summary Question: How much of the pipeline actually closed this quarter? - Management indicated that the government shutdown affected the timing of deal closures, but they expect some acceleration once the situation eases [28] Question: How is productivity or quality gains from GenAI being measured? - The primary pilot in the government space focuses on fraud reduction, with expectations of revenue and expense opportunities from AI initiatives [29][30] Question: Are there specific costs left to tackle from stranded cost areas? - Management stated that they are through the initial phase of stranded costs and are continuously optimizing costs [32] Question: Are there changes to contract clauses to reduce churn risk? - Management confirmed that the revenue stream remains unaffected by the government shutdown, and no changes to the contract model are being made [33] Question: What does the client mix look like for AI endeavors? - The healthcare sector represents a significant portion of opportunities in both commercial and government spaces, with a focus on fraud reduction and efficiency [38] Question: What is the timeframe for adding sales talent? - Management indicated that new sales talent needs to be in place by Q4 2025 to impact performance in 2026 [43]

Financial Performance - Adjusted revenue for Q3 2025 was $767 million, a decrease of 1.8% year-over-year, or 2.2% in constant currency[5, 23] - Adjusted EBITDA for Q3 2025 was $40 million, with an adjusted EBITDA margin of 5.2%, up year-over-year and sequentially[5, 25] - The company expects full year 2025 adjusted revenue to be between $3.05 billion and $3.1 billion, and adjusted EBITDA margin to be between 50% and 5.5%[42] Sales Metrics - New business signings ACV (Annual Contract Value) for Q3 2025 was $111 million, consistent year-over-year[5, 8] - Net ARR (Annual Recurring Revenue) activity impact (TTM - Trailing Twelve Months) was $25 million[5, 11] - New Business ARR Avg Contract Length was 30 years[20] Segment Performance - Commercial segment adjusted revenue was $367 million, a decrease of 4.7% year-over-year[31] - Government segment adjusted revenue was $238 million, a decrease of 6.7% year-over-year[31] - Transportation segment adjusted revenue was $162 million, an increase of 14.9% year-over-year[31] Cash Flow and Balance Sheet - Adjusted Free Cash Flow for Q3 2025 was negative $54 million[37, 41] - The company had $264 million in cash at the end of Q3 2025[36, 41] - Net adjusted leverage ratio was 32x[36, 41] Portfolio Rationalization - The company has deployed 87% of its $1 billion capital target for portfolio rationalization[46]

Financial Performance - For Q3 2025, Conduent reported a net loss of $46 million, compared to a net income of $123 million in Q3 2024, representing a significant decline[14] - Comprehensive loss for Q3 2025 was $50 million, down from a comprehensive income of $137 million in the same quarter last year[14] - Conduent reported a net loss of $46 million for the three months ended September 30, 2025, compared to a net income of $123 million for the same period in 2024, representing a decline of 137%[22] - Total comprehensive loss for the three months ended September 30, 2025, was $50 million, compared to a total comprehensive income of $137 million for the same period in 2024[22] - The company reported an income (loss) before income taxes of $(38) million for Q3 2025, compared to $159 million in Q3 2024[50] - Basic net earnings per share for Q3 2025 were $(0.30), down from $0.75 in Q3 2024, indicating a negative trend in profitability[106] Assets and Liabilities - Total assets decreased to $2.5 billion as of September 30, 2025, down from $2.6 billion at the end of 2024[17] - Cash and cash equivalents fell to $248 million, a decrease of $118 million from $366 million at the end of 2024[17] - Long-term debt increased to $697 million, up from $615 million at the end of 2024, indicating rising financial leverage[17] - The balance of retained earnings (deficit) increased to $(2,577) million as of September 30, 2025, from $(2,418) million as of September 30, 2024, indicating a deterioration in retained earnings[22] - The total other current assets decreased slightly to $258 million as of September 30, 2025, from $261 million at the end of 2024[108] - Total other current liabilities remained stable at $289 million as of September 30, 2025, compared to $290 million at the end of 2024[108] Revenue and Segments - Total consolidated revenue for Q3 2025 was $767 million, a decrease of 5% from $807 million in Q3 2024[38] - Commercial segment revenue decreased to $367 million in Q3 2025 from $385 million in Q3 2024, representing a decline of 4.7%[38] - Government segment revenue decreased to $238 million in Q3 2025 from $255 million in Q3 2024, a decline of 6.7%[38] - Transportation segment revenue increased to $162 million in Q3 2025 from $141 million in Q3 2024, marking a growth of 14.9%[38] - For the nine months ended September 30, 2025, total revenue was $2.272 billion, down from $2.556 billion in the same period of 2024, a decrease of 11.1%[38] Cash Flow and Operating Activities - Net cash used in operating activities for the nine months ended September 30, 2025, was $112 million, compared to a net cash used of $91 million in the same period of 2024[19] - Proceeds from divestitures amounted to $53 million in the nine months ended September 30, 2025, significantly lower than $823 million in the same period of 2024[19] Equity and Stock - The company had treasury stock purchases amounting to $13 million in Q3 2025, compared to $14 million in Q3 2024[22] - Conduent's additional paid-in capital increased to $3,964 million as of September 30, 2025, up from $3,952 million as of September 30, 2024[22] - The company had a total equity of $717 million as of September 30, 2025, down from $881 million as of September 30, 2024[22] - The Company issued 120,000 shares of Series A convertible perpetual preferred stock with a liquidation preference of $120 million, earning quarterly cash dividends at a rate of 8% per year[105] - The Company has not declared any common stock dividends during the periods presented, indicating a focus on retaining earnings[106] Restructuring and Costs - The company incurred restructuring costs totaling $24 million for the nine months ended September 30, 2025, compared to $21 million for the same period in 2024[64] - The company has ongoing restructuring programs aimed at reducing costs and improving productivity, with potential future provisions for new initiatives[62] Debt and Financial Obligations - As of September 30, 2025, the Company had $134 million in outstanding borrowings under its Revolving Credit Facility and utilized $25 million for letters of credit[77] - The Company had a remaining unused capacity of $198 million under the Revolving Credit Facility and $11 million under the Performance Letter of Credit Facility as of September 30, 2025[77] - The Company was in compliance with all debt covenants, including a consolidated first lien net leverage ratio not exceeding 4.50 to 1.00 and a fixed charge coverage ratio of at least 2.50 to 1.00[79] - The Company recognized a loss on extinguishment of debt of $1 million for the three months ended September 30, 2025, related to the voluntary repayment of Term Loan A[78] Market Conditions and Challenges - The company has faced challenges related to geopolitical events and macroeconomic conditions, impacting its operational performance and market competitiveness[7] Other Financial Information - The Company recognized an expense related to defined contribution plans of $4 million for the nine months ended September 30, 2025[91] - The balance of Accumulated Other Comprehensive Loss (AOCL) was $(441) million as of September 30, 2025, reflecting a change from $(472) million at December 31, 2024[93] - The Company believes it has recorded adequate provisions for various claims and litigation as of September 30, 2025, but the ultimate outcome remains unpredictable[94] - The Company had outstanding forward exchange contracts with gross notional values of $239 million as of September 30, 2025, with approximately 81% maturing within three months[81] - The fair value of the Company's long-term debt was estimated at $697 million as of September 30, 2025, compared to a fair value of $676 million as of December 31, 2024[88] - The Company had $546 million of outstanding surety bonds and $131 million of outstanding letters of credit as of September 30, 2025, to secure performance obligations[104]

Financial Performance - Q3 2025 revenue was $767 million, a decrease of 5.0% year-over-year from $807 million in Q3 2024[5] - Adjusted EBITDA for Q3 2025 was $40 million, representing a 25.0% increase compared to $32 million in Q3 2024[7] - Adjusted EBITDA margin improved to 5.2%, up 110 basis points from 4.1% in the prior year[5] - Revenue for Q3 2025 was $767 million, a decrease of 4.95% from $807 million in Q3 2024[20] - Adjusted Revenue for Q3 2025 was $767 million, down from $807 million in Q3 2024, reflecting a decrease of approximately 4.95%[47] - Adjusted Net Income for Q3 2025 was $(11) million, compared to $(24) million in Q3 2024, showing an improvement of 54.17%[47] - Adjusted Operating Income for Q3 2025 was $(8) million, compared to $(11) million in Q3 2024, reflecting an improvement of 27.27%[48] - Comprehensive loss for Q3 2025 was $50 million, compared to a comprehensive income of $137 million in Q3 2024[21] - Net loss for Q3 2025 was $46 million, compared to a net income of $123 million in Q3 2024, representing a significant decline[20] Cash Flow and Liquidity - Cash flow from operating activities was $(39) million, a decline of 200.0% compared to $(13) million in Q3 2024[5] - The company maintained a cash balance of $264 million and $198 million in unused capacity under its credit facility at the end of the quarter[6] - Cash and cash equivalents decreased to $248 million as of September 30, 2025, down from $366 million at the end of 2024[23] - Free Cash Flow for Q3 2025 was $(60) million, compared to $(29) million in Q3 2024, and for the nine months ended September 30, 2025, it was $(171) million versus $(153) million in 2024[50] - Operating Cash Flow for Q3 2025 was $(39) million, a decrease from $(13) million in Q3 2024, and for the nine months ended September 30, 2025, it was $(112) million compared to $(91) million in 2024[50] Business Operations and Strategy - New business signings for the quarter totaled $111 million in annual contract value (ACV)[4] - The company achieved 87% of its $1 billion capital allocation target to date, focusing on cash generation and expanding pipeline opportunities[3] - The company announced the integration of generative AI into government solutions to enhance service delivery and combat fraud[8] - Conduent expanded its operations in the Philippines with a new facility to support customer experience management solutions[10] - New Business Annual Contract Value (ACV) metrics indicate potential growth opportunities, although specific figures were not disclosed[26] Costs and Expenses - Total operating costs and expenses increased to $805 million in Q3 2025 from $648 million in Q3 2024, marking a rise of 24.2%[20] - The company reported a significant loss on divestitures and transaction costs, netting $1 million in Q3 2025 compared to a gain of $188 million in Q3 2024[20] - The company incurred transaction costs of $2 million in Q3 2025, down from $7 million in Q3 2024[50] - Direct response costs related to a cyber event amounted to $25 million in Q3 2025, which were not present in Q3 2024[48] - Direct response costs related to cyber event payments were $7 million in Q3 2025, with an additional $9 million incurred in the nine months ended September 30, 2025[50] Assets and Liabilities - Total assets decreased to $2.5 billion as of September 30, 2025, compared to $2.6 billion at the end of 2024[23] - Long-term debt increased to $697 million as of September 30, 2025, up from $615 million at the end of 2024[23] Taxation - Adjusted Effective Tax Rate for Q3 2025 was 44.7%, significantly higher than 12.5% in Q3 2024, while for the nine months ended September 30, 2025, it was 29.0% compared to 19.7% in 2024[49] - The effective tax rate for Q3 2025 was (19.5)%, compared to 22.2% in Q3 2024, indicating a significant shift in tax liabilities[49] - Adjusted Effective Tax Rate adjustments for Q3 2025 included $17 million, compared to $39 million in Q3 2024[47] Other Financial Metrics - Adjusted Diluted EPS for Q3 2025 was $(0.09), compared to $(0.14) in Q3 2024, while for the nine months ended September 30, 2025, it was $(0.34) compared to $(0.36) in 2024[49] - The company reported a loss before income taxes margin of (5.0)% for Q3 2025, compared to a profit margin of 19.7% in Q3 2024[49] - The company reported a loss on extinguishment of debt of $1 million in Q3 2025, consistent with the previous year[47] - The company experienced a goodwill impairment charge, which is part of the adjustments made to financial measures[37] - Total non-GAAP adjustments for Q3 2025 included a positive impact of 0.10 on Diluted EPS, while for the nine months ended September 30, 2025, it was 0.41[49]