Conduent(CNDT)2022-08-01 16:00Financial Performance - Revenue for Q2 2022 was $928 million, a decrease of 9.5% compared to $1,026 million in Q2 2021[7] - Net income for Q2 2022 was a loss of $3 million, compared to a net income of $12 million in Q2 2021[9] - The company reported a comprehensive loss of $40 million for Q2 2022, compared to a comprehensive income of $15 million in Q2 2021[9] - Net income for the six months ended June 30, 2022, was $136 million, compared to a net loss of $1 million for the same period in 2021[16] - The company reported a net income of $136 million for the six months ended June 30, 2022, compared to a net income of $1 million in the same period of 2021[122] - Net income for the three months ended June 30, 2022, was a loss of $12 million, compared to a net income of $12 million in the same period of 2021[120] Revenue Breakdown - Total consolidated revenue for Q2 2022 was $928 million, a decrease of 9.5% from $1,026 million in Q2 2021[42] - Commercial segment revenue for Q2 2022 was $470 million, down 3.7% from $488 million in Q2 2021[58] - Government Services segment revenue for Q2 2022 was $279 million, a decrease of 17% from $336 million in Q2 2021[58] - Transportation segment revenue for Q2 2022 was $179 million, down 3.2% from $185 million in Q2 2021[58] - New business annual contract value (ACV) reached $180 million, marking an increase for the fourth consecutive quarter, with $124 million contributed from the Commercial segment[115] - New business Annual Contract Value (ACV) for Q2 2022 was $180 million, a decrease of 30% compared to $257 million in Q2 2021[166] Cash Flow and Liquidity - Cash and cash equivalents increased to $519 million as of June 30, 2022, up from $415 million at the end of 2021[14] - Cash flows from operating activities showed a net cash outflow of $5 million for the six months ended June 30, 2022, down from a cash inflow of $103 million in 2021[16] - Cash flows from investing activities resulted in a net cash inflow of $242 million, significantly improved from a net cash outflow of $69 million in the prior year[16] - Total cash and cash equivalents as of June 30, 2022, were $519 million, an increase from $415 million at the end of 2021[171] Debt and Liabilities - Long-term debt decreased to $1,272 million from $1,383 million at the end of 2021, indicating a reduction of 8%[14] - The company had no outstanding borrowings under its Revolving Credit Facility as of June 30, 2022, with a net available amount of $546 million[70] - Total debt outstanding as of June 30, 2022, was $1.3 billion, with $30 million due within one year[172] Expenses and Costs - Total operating costs and expenses for Q2 2022 were $923 million, down from $1,007 million in Q2 2021, reflecting a 8.4% reduction[7] - Research and development expenses were $2 million in Q2 2022, slightly up from $1 million in Q2 2021[7] - The company incurred $166 million in losses on divestitures and sales of fixed assets during the six months ended June 30, 2022[16] - The company recorded restructuring and related costs of $18 million for the six months ended June 30, 2022, compared to $19 million for the same period in 2021[66] Asset Management - The company’s total assets decreased to $3,900 million as of June 30, 2022, down from $4,036 million at the end of 2021[14] - The company’s retained earnings deficit improved to $(2,220) million from $(2,351) million at the end of 2021[14] - The balance of retained earnings (deficit) as of June 30, 2022, was $(2,220) million, reflecting a decrease from $(2,217) million at the end of March 31, 2022[21] Market and Operational Insights - The company continues to evaluate the impact of COVID-19 on its operations, with estimates subject to change as new information becomes available[29] - The company has maintained a proactive plan throughout the COVID-19 pandemic to ensure the health and safety of its associates[116] - The company is engaged in restructuring programs aimed at optimizing its employee base and reducing costs, with total restructuring costs of $11 million for the three months ended June 30, 2022[130] Legal and Compliance - The Company is involved in various claims and lawsuits, which could materially affect its results of operations, cash flows, and financial position[85] - The Company has recorded adequate provisions for potential liabilities as of June 30, 2022, but litigation outcomes remain unpredictable[86] - The Company is defending against a class action lawsuit seeking unspecified monetary damages related to alleged violations of federal securities laws[87] Other Financial Metrics - Adjusted EBITDA for Q2 2022 was $87 million, down from $128 million in Q2 2021, reflecting a decrease of about 32.0%[149] - Adjusted EBITDA margin for Q2 2022 was 9.4%, compared to 12.5% in Q2 2021, reflecting a decrease of about 3.1 percentage points[149] - The decline in revenue and adjusted EBITDA for Q2 2022 was primarily due to the sale of the Midas Suite of products, which affected the current year’s results[160]