Financial Performance - Total revenue for 2024 was $3,356 million, a decrease of 9.8% from $3,722 million in 2023[295]. - Operating costs and expenses totaled $2,852 million in 2024, down from $4,054 million in 2023, reflecting a significant reduction in costs[295]. - Net income for 2024 was $426 million, compared to a net loss of $296 million in 2023, indicating a strong recovery[295]. - The company reported a loss on divestitures and sales of fixed assets of $724 million in 2024[302]. - Conduent's total equity increased to $843 million in 2024, up from $633 million in 2023, indicating a growth of approximately 33%[300]. - Total assets decreased to $2,599 million in 2024 from $3,162 million in 2023, reflecting a reduction of approximately 18%[300]. - Total liabilities decreased to $1,614 million in 2024, down from $2,387 million in 2023, marking a reduction of approximately 32%[300]. - Cash and cash equivalents declined to $366 million in 2024, down from $498 million in 2023, representing a decrease of about 26%[300]. - The company generated $795 million in net cash from investing activities in 2024, primarily due to proceeds from divestitures[302]. - The company experienced a goodwill impairment of $28 million in 2024, significantly lower than the $287 million impairment in 2023[295]. Revenue Segmentation - The Commercial segment generated revenue of $1,606 million, accounting for 50.6% of total revenues excluding divestitures, while the Government segment revenue was $984 million, representing 31.0%[34][35]. - Conduent's transportation segment revenue reached $586 million, making up 18.4% of total revenues excluding divestitures[36]. - Approximately $85 billion is disbursed annually through the company's Government Service Solutions, including benefit card programs[50]. - The company generates revenue from its Human Capital Solutions based on the number of employees and retirees supported, as well as transaction fees for client life events[46]. - The company generates revenue in its Business Operations Solutions through various pricing models, including per item handled and outcome-based pricing[42]. Market Position and Client Base - Conduent's addressable market size in the global business process services industry is estimated to be $210 billion in 2024[30]. - The company serves nearly half of the Fortune 100 companies, including 9 of the top 10 U.S. health insurers and 6 of the top 10 U.S. banks[26]. - A significant portion of Conduent's revenues is derived from government contracts, which are subject to funding appropriations and can be terminated at the government's discretion[89]. - Approximately 14% of the company's 2024 revenues were generated from operations outside the United States[94]. Operational Efficiency and Technology - In 2024, Conduent launched a dedicated GenAI program with over 20 prioritized use cases to enhance operational efficiency and client outcomes[27]. - The company processed over 13 million tolling transactions daily, contributing to reduced congestion and improved operational efficiency for transportation agencies[21]. - The company processed nearly 450 million claims in its Government Healthcare Solutions segment[48]. - The company is undertaking a long-term project to modernize its IT infrastructure, which carries risks of operational disruptions and increased costs[104]. Workforce and Culture - Conduent's global workforce consists of approximately 56,000 associates, with nearly 40% located in North America[22]. - Conduent completed approximately 1.63 million learning assets in 2024, indicating a strong engagement in employee development programs[70]. - Conduent was recognized as one of Newsweek's Top 100 Global Most Loved Workplaces in 2024, reflecting a strong emotional connection between associates and the company[71]. - The company received multiple awards for workplace culture, including America's Best 500 Employers for Diversity from Forbes for four consecutive years (2021-2024)[69]. - The company's overall culture score remained in the top 10% of similar-sized companies according to Comparably, indicating a positive workplace environment[71]. - The company has a focus on diversity and inclusion, receiving top rankings for LGBT+ inclusion and disability inclusion in various regions[69]. Risks and Compliance - The company faces significant competition, with some competitors having greater financial and marketing resources, which may pressure pricing and terms[90]. - The company is exposed to potential liabilities and reputational harm related to environmental, social, and governance considerations[106]. - The company faces risks associated with the use of artificial intelligence, including potential legal liabilities and reputational damage, necessitating ongoing investment in governance and security resources[109]. - Compliance with evolving AI regulations, such as the European Union's AI Act, may increase operational costs and pose unpredictable risks[110]. - The company is subject to numerous laws regarding the protection of individually identifiable information, including HIPAA and GDPR, with significant penalties for non-compliance[111]. - Cybersecurity threats pose risks to the company's operations, potentially leading to unauthorized access and significant reputational damage[115]. - The company's insurance coverage may not fully protect against all potential liabilities, which could adversely affect its financial condition[123]. Financial Management and Debt - The company has a significant amount of debt, which could adversely affect its results of operations and financial condition[129]. - The company's ability to make payments on and refinance its indebtedness depends on its future cash generation from operations, financings, or asset sales[131]. - The consolidated weighted-average interest rates for total debt in 2024 were 9.37% for Term Loan A, 6.20% for Senior Notes, and 8.70% for finance lease obligations[275]. - A 10% increase in market interest rates would decrease the fair values of fixed-rate financial instruments by approximately $15 million[275]. Strategic Initiatives - The company aims to achieve profitable growth and expand operating margins through a disciplined capital allocation strategy, focusing on growth, efficiency, and quality[24]. - The Board of Directors authorized a three-year stock repurchase program for up to $75 million, completed in September 2024[108]. - The company may selectively pursue strategic acquisitions, investments, and joint ventures, which pose risks that could affect its reputation and financial results[126].

Financial Data and Key Metrics Changes - Q4 adjusted revenue was $800 million, and full-year revenue was $3.176 billion, down 4.3% from $3.32 billion in 2023 [11][17] - Adjusted EBITDA for Q4 was $32 million, with a margin of 4%, while full-year adjusted EBITDA was $124 million, with a margin of 3.9% [11][17] - New business Annual Contract Value (ACV) was flat year-over-year at $137 million, but down 20% for the full year compared to 2023 [14][15] Business Line Data and Key Metrics Changes - Commercial segment adjusted revenue for 2024 was $1.606 billion, down 3.7% year-over-year, but adjusted EBITDA increased by 2.4% with a margin of 10.5% [18] - Government segment adjusted revenue decreased by around 10% to $984 million, with adjusted EBITDA down 35% and a margin of 21.3% [19][22] - Transportation segment adjusted revenues grew by 5% year-over-year to $586 million, but adjusted EBITDA was breakeven [23] Market Data and Key Metrics Changes - The company experienced a strong finish in new business sales and improved client retention, with net ARR activity at $92 million [16] - The government segment faced challenges due to the termination of a large healthcare contract and lower SNAP volumes, impacting revenue [21][22] Company Strategy and Development Direction - The company is focused on portfolio rationalization, divesting underperforming assets to streamline operations and improve margins [8][36] - There is an emphasis on leveraging AI for operational efficiency and enhancing service offerings, particularly in fraud detection and document automation [58][45] - The company anticipates stable macroeconomic conditions and expects adjusted revenues in 2025 to be between $3.1 billion and $3.25 billion [29][31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2025, expecting a recovery in adjusted EBITDA margins and a return to growth after a challenging 2024 [28][49] - The company is preparing for a stronger first half of 2025, with expectations of improved sales pipelines across all segments [76][77] - Management highlighted the importance of operational excellence and cybersecurity as top priorities moving forward [42][43] Other Important Information - The company ended the year with approximately $377 million in cash and a largely undrawn $550 million revolving credit facility [25] - Capital expenditures for the year were 2.2% of revenue, with plans to optimize spending further [27] Q&A Session Summary Question: Progress on AI-enabled technology in public health - Management highlighted several AI applications, including fraud detection in payments and document automation in healthcare [56][58] Question: Strategy to grow wallet share with existing clients - The company is implementing a client partner program to better address client needs and increase product offerings [60][64] Question: Margin improvement drivers - Margin improvements are primarily driven by cost reductions and operational efficiencies [70][71] Question: Capital allocation plans for FY 2025 - Management indicated a balanced approach to capital allocation, with a focus on debt reduction and potential share repurchases [72][100] Question: Expectations for new business signings and market targeting - The company expects a better ACV sales year in 2025, with strong pipelines across all segments [74][76] Question: Government segment project delays - Management clarified that anticipated declines in the government segment are due to previously identified factors, not administrative changes [82][84] Question: Ongoing portfolio rationalization - The company is actively looking at divestitures to streamline operations and improve focus [93][95] Question: Pricing environment and growth assumptions - Management noted a focus on maintaining pricing while enhancing service quality and relationships with clients [103][107]

Company Performance - Conduent reported a quarterly loss of $0.15 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.09, and compared to earnings of $0.03 per share a year ago, indicating an earnings surprise of -66.67% [1] - The company posted revenues of $800 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 1.17%, and down from $953 million in the same quarter last year [2] - Over the last four quarters, Conduent has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Future Outlook - The immediate price movement of Conduent's stock will depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the coming quarter is -$0.08 on $800 million in revenues, and -$0.02 on $3.28 billion in revenues for the current fiscal year [7] - The estimate revisions trend for Conduent is mixed, resulting in a Zacks Rank 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Industry Context - The Outsourcing industry, to which Conduent belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, suggesting that the industry's outlook can materially impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Q4 2024 revenue was $800 million, a decrease of 16.1% year-over-year, while full year revenue totaled $3,356 million, down 9.8% from the previous year[4] - Adjusted EBITDA margin for Q4 2024 was 4.0%, down 400 basis points from 8.0% in Q4 2023, with full year adjusted EBITDA margin at 3.9%, a decrease of 350 basis points from 7.4%[4] - The company reported a pre-tax income of $504 million for FY 2024, a significant increase from a loss of $332 million in FY 2023, primarily driven by gains from divestitures[7] - Revenue for Q4 2024 was $800 million, a decrease of 16.1% from $953 million in Q4 2023[21] - Net income for Q4 2024 was a loss of $12 million compared to a profit of $6 million in Q4 2023, resulting in a net income per share loss of $0.09[21] - Total operating costs and expenses for Q4 2024 were $882 million, down 7.8% from $957 million in Q4 2023[21] - The company reported a goodwill impairment of $28 million in Q4 2024, compared to $287 million in the full year 2023[21] - Adjusted Revenue for Q4 2024 was $800 million, down from $953 million in Q4 2023, representing a decrease of 16.1%[48] - Adjusted Net Income for Q4 2024 was a loss of $21 million, compared to a loss of $17 million in Q4 2023[48] - Adjusted EBITDA for Q4 2024 was $32 million, down from $68 million in Q4 2023, indicating a decline of 52.9%[49] - Adjusted Operating Income for Q4 2024 was a loss of $15 million, compared to an income of $13 million in Q4 2023[49] Cash Flow and Liquidity - Full year 2024 cash flow from operating activities was $41 million, a decline of 66.4% compared to $122 million in FY 2023[4] - The company experienced a net cash outflow of $27 million in Q4 2024, contrasting with an inflow of $64 million in Q4 2023[26] - Cash and cash equivalents decreased to $366 million as of December 31, 2024, from $498 million a year earlier[24] - Free Cash Flow for Q4 2024 was $47 million, compared to $93 million in Q4 2023, while the full year showed a negative free cash flow of $(106) million versus $(4) million in 2023[51] - Adjusted Free Cash Flow for Q4 2024 was $62 million, unchanged from Q4 2023, while the full year adjusted free cash flow was $(59) million compared to $(5) million in 2023[51] - Operating Cash Flow for Q4 2024 was $41 million, down from $122 million in Q4 2023, with a full year operating cash flow of $(50) million compared to $89 million in 2023[51] Divestitures and Business Development - New business signings for Q4 2024 amounted to $137 million, contributing to a total annual contract value (ACV) of $485 million for FY 2024[3] - The company completed three divestitures in 2024, generating total proceeds of $879 million, which included $425 million from the BenefitWallet portfolio and $224 million from the Casualty Claims Solutions Business[5] - Conduent completed a $75 million share repurchase program, buying back 52 million shares, including approximately 38 million shares from Carl Icahn and affiliates[8] Future Outlook - The company anticipates FY 2025 adjusted revenue to be between $3,100 million and $3,250 million, with an expected adjusted EBITDA margin of 4.5% to 5.5%[10] - The company provided a non-GAAP outlook for Full Year 2025, indicating expected Adjusted EBITDA and Adjusted EBITDA Margin, but could not predict foreign currency impacts accurately[47] Tax and Equity - Adjusted Effective Tax Rate adjustments included a tax benefit of $63 million for Q4 2024, compared to a tax benefit of $11 million in Q4 2023[48] - The effective tax rate for Q4 2024 was 85.4%, a decrease from 272.1% in Q4 2023, with a full year effective tax rate of 15.5% compared to 10.7% in 2023[50] - The company reported a total equity increase to $843 million as of December 31, 2024, from $633 million in 2023[24] Shareholder Information - The weighted average common shares outstanding for Q4 2024 were 160,374 thousand, down from 213,625 thousand in Q4 2023, while the full year average was 182,513 thousand compared to 216,779 thousand in 2023[50]

Core Insights - Conduent Incorporated reported its fourth quarter and full year 2024 financial results, indicating a year characterized by a shift to growth, improved client retention, and a significant reduction in debt [2][3]. Financial Performance - Q4 2024 revenue was $800 million, down 16.1% year-over-year from $953 million in Q4 2023. Full year revenue decreased by 9.8% to $3.356 billion from $3.722 billion in FY 2023 [4]. - Adjusted revenue for Q4 2024 was $800 million, a 6.0% decline from $851 million in Q4 2023, while full year adjusted revenue fell 4.3% to $3.176 billion from $3.320 billion [4]. - GAAP net loss for Q4 2024 was $12 million compared to a profit of $6 million in Q4 2023. However, full year GAAP net income was $426 million, a significant improvement from a loss of $296 million in FY 2023 [4][7]. - Adjusted EBITDA for Q4 2024 was $32 million, down 52.9% from $68 million in Q4 2023, with a margin of 4.0%. For the full year, adjusted EBITDA was $124 million, a 49.8% decrease from $247 million in FY 2023, with a margin of 3.9% [4][7]. Strategic Actions - The company completed three divestitures in 2024, generating a total of $879 million, which included the sale of the BenefitWallet portfolio for $425 million, Curbside Management and Public Safety businesses for $230 million, and Casualty Claims Solutions Business for $224 million [5][6]. - Proceeds from these divestitures were used to prepay all principal of Term Loan B and $137 million of Term Loan A, resulting in a 50% reduction in debt compared to year-end 2023 [3][6]. Future Outlook - For FY 2025, Conduent expects adjusted revenue to be between $3.100 billion and $3.250 billion, with adjusted EBITDA projected to be in the range of 4.5% to 5.5% [9][10]. - The company remains optimistic about achieving its expectations for 2025, focusing on further portfolio rationalization and delivering high-quality service to clients [3][9]. Recognition and Achievements - Conduent received several accolades in 2024, including being recognized as a "Leader" in various industry reports and earning spots on lists such as "GovTech Top 100 Company" and "Newsweek Top 100 Most Loved Workplaces" [12].

Cybersecurity Incident - Conduent, a U S government contractor providing technology for services like child support and food assistance, confirmed a recent outage was caused by a cybersecurity incident [1] - The disruption left some U S residents without access to support payments, though the company did not confirm if the outage was related to a system compromise [1] - Conduent spokesperson Sean Collins stated the incident was contained and all systems have been restored, emphasizing the importance of system integrity and functionality [2] - The company declined to provide further details, including whether any data exfiltration occurred [2]

Group 1: Market Overview - Investors are encouraged to capitalize on ultra-low spreads between value and growth stocks, with a focus on risk-adjusted return picks for 2025 [1] - Value stocks are highlighted for their strong upside potential and minimized downside risk due to low price points [1] Group 2: Conduent Inc. (NASDAQ: CNDT) - Conduent is a business process outsourcing company with a market capitalization of approximately $651 million and a share price of $4.07 as of January 3, 2025 [2] - The company has engaged in a successful divestiture program, generating around $780 million in post-tax proceeds, which has been used to prepay debt and buy back shares [3] - Conduent's P/S ratio is 0.2, indicating it as a strong value candidate, with the business process outsourcing industry expected to grow due to increased demand for digital talent [5] Group 3: Commercial Vehicle Group Inc. (NASDAQ: CVGI) - Commercial Vehicle Group, a manufacturer of systems and components for automakers, has seen its shares fall by about two-thirds leading to January 3, 2025, amid industry challenges [6] - The company missed revenue expectations in its latest earnings report, but efforts to streamline operations and reduce costs are underway [7] - Analysts at Noble Financial maintain a Buy rating with a price target of $8.00, suggesting significant upside potential [8] Group 4: Imperial Petroleum Inc. (NASDAQ: IMPP) - Imperial Petroleum operates in the oil and petroleum transportation sector, with a P/S ratio of 0.7 and a share price of $3.26 [10] - The company reported $11 million in profit for Q3 2024, with a 142% year-over-year increase in adjusted net income, and zero debt as of the end of Q3 [11] - Despite facing industry challenges, including low spot rates and declining oil imports, the company is expected to perform strongly once these hurdles are overcome [12]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point for fast-moving stocks, which can lose momentum if future growth does not justify high valuations [2] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify potential opportunities [3] Group 2: Conduent (CNDT) Stock Analysis - Conduent (CNDT) has shown a significant price increase of 21.4% over the past four weeks, indicating growing investor interest [4] - The stock has gained 11.6% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [5] - CNDT has a beta of 1.46, suggesting it moves 46% more than the market in either direction, indicating fast-paced momentum [5] - With a Momentum Score of B, CNDT is positioned as a favorable entry point for investors looking to capitalize on momentum [6] Group 3: Earnings Estimates and Valuation - An upward trend in earnings estimate revisions has contributed to CNDT earning a Zacks Rank 2 (Buy), which is associated with strong momentum effects [7] - CNDT is trading at a Price-to-Sales ratio of 0.20, indicating it is relatively cheap at 20 cents for each dollar of sales, suggesting potential for further price appreciation [7] Group 4: Additional Investment Opportunities - Besides CNDT, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, providing additional investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Core Viewpoint - Conduent (CNDT) has experienced a bearish trend with a 15.9% loss over the past week, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be increasing [1] Group 1: Technical Analysis - The hammer chart pattern indicates a possible bottom formation, suggesting that selling pressure may be subsiding [1] - A hammer pattern typically forms during a downtrend when the stock opens lower, makes a new low, and then closes near or above the opening price, signaling a potential loss of control by bears [2] - Hammer candles can appear on various timeframes and should be used alongside other bullish indicators for confirmation [2] Group 2: Fundamental Analysis - Recent upward revisions in earnings estimates for CNDT serve as a bullish indicator, with a 15.1% increase in the consensus EPS estimate over the last 30 days [3] - The company holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [3] - A Zacks Rank of 2 is a strong indicator of potential trend reversal, as it reflects improving company prospects [3]

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Even ...