Financial and Operational Highlights

  • Revenue of $1,480 million
  • Net loss of ($17) million, GAAP EPS ($0.09)
  • Adjusted net income of $48 million and Adjusted EPS $0.22
  • Adjusted EBITDA of $174 million, up 3% year-over-year
  • Strong cash flow from operations of $104 million and free cash flow of $73 million
  • Renewal rate of 98% and $657 million of renewal TCV
  • Divested five businesses resulting in $56 million of proceeds
  • Completed second repricing of Term Loan B, reduced interest rate by 250 bps since beginning of year

FLORHAM PARK, NJ- Conduent (NYSE: CNDT), the world's largest provider of diversified business services, today announced its third quarter 2017 financial results.

“We delivered another solid quarter while rightsizing the company through divestitures and strategic actions, positioning us to amplify our core,” said Ashok Vemuri, CEO of Conduent. “In the third quarter, we made progress on contract remediation and improved our technology-led vertical go-to-market strategy.  Profitability in our commercial segment improved and we achieved strong renewal rates, pipeline growth and improved delivery across our portfolio of offerings.  We are progressing well on our path to building a sustainable, predictable and profitable enterprise that will be a leader in our industry.”

Third Quarter 2017 Results

Third quarter 2017 revenues were $1,480 million, down (7%) compared to Q3 2016. Pre-tax income was $13 million compared to $2 million in Q3 2016.  The company reported EPS from continuing operations of ($0.09) versus $0.01 in the same period last year.

Third quarter adjusted operating income was $111 million, with an adjusted operating margin of 7.5% as compared to $97 million, with an adjusted operating margin of 6.1% in Q3 2016. Adjusted EBITDA improved 3.0% to $174 million, with an adjusted EBITDA margin of 11.8%, as compared with $169 million, with an adjusted EBITDA margin of 10.6% in Q3 2016. The company reported adjusted EPS of $0.22 compared to $0.24 in Q3 2016.

Conduent generated $104 million in cash flow from operations during the third quarter 2017 and ended the quarter with a cash balance of $468 million. Total debt was $2,062 million as of September 30, 2017.

Headcount of approximately 90,000 as of September 30, 2017 compared with approximately 96,000 as of December 31, 2016.

Total contract value (TCV) signings of $1,048 million for the quarter were down (32%) compared with Q3 2016, impacted by slower than anticipated decision making and lower overall renewal opportunity.

Financial and Strategic Outlook

Conduent provided the following guidance ranges for FY 2017, which includes the impact of businesses divested in Q3 2017:

(in millions)


FY 2016


FY 2017E







Down 4.5-6.5% (CC)

Adjusted EBITDA






Up ~5%

Free Cash Flow






20-30% of Adj. EBITDA

Note: Please refer to the "Non-GAAP Outlook" in the Non-GAAP section below for certain non-GAAP information concerning outlook


"Our third quarter results demonstrate progress in our strategic transformation initiative and the stabilization of our core business as we grew Adjusted EBITDA by 11% and 3% compared with Q2 2017 and Q3 2016, respectively. As a result, I believe we are well positioned entering the fourth quarter," said Brian Webb-Walsh, CFO of Conduent.  "Our 2017 guidance reflects the fourth quarter impact from divestitures completed year-to-date.  We are also targeting an additional $250 to $500 million of revenue for potential divestiture in the near term.  Our free cash flow improved again this quarter and we continued to strengthen our balance sheet by repricing our Term Loan B.  We have now reduced the interest rate by a total of 250 basis points since the start of the year."

Conference Call
Management will present the results during a conference call and webcast on November 8, 2017 at 10 a.m. Eastern.

The call will be available by live audio webcast with the news release and online presentation slides at

The conference call will also be available by calling 877-883-0383 (international dial-in 412-902-6506) at approximately 9:45 a.m. ET. The conference ID for this call is 8630093.

A recording of the conference call will be available by calling 877-344-7529, or 412-317-0088 one hour after the conference call concludes on November 8, 2017. The replay ID is 10112510.

About Conduent
Conduent (NYSE: CNDT) is the world’s largest provider of diversified business services with leading capabilities in transaction processing, automation and analytics. The company’s global workforce is dedicated to helping its large and diverse client base deliver quality services to the people they serve. These clients include 76 of the Fortune 100 companies and over 500 government entities.

Conduent’s differentiated offerings touch millions of lives every day, including two-thirds of all insured patients in the U.S. and nearly nine million people who travel through toll systems daily.  Whether it’s digital payments, claims processing, benefit administration, automated tolling, customer care or distributed learning - Conduent manages and modernizes these interactions to create value for both its clients and their constituents. Learn more at

Non-GAAP Measures

We have reported our financial results in accordance with U.S. generally accepted accounting principles (GAAP). In addition, we have discussed our financial results using non-GAAP measures. We believe these non-GAAP measures allow investors to better understand the trends in our business and to better understand and compare our results. Accordingly, we believe it is necessary to adjust several reported amounts, determined in accordance with GAAP, to exclude the effects of certain items as well as their related tax effects. Management believes that these non-GAAP financial measures provide an additional means of analyzing the current periods' results against the corresponding prior periods' results. These non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company's reported results prepared in accordance with U.S. GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable U.S. GAAP measures and should be read only in conjunction with our Condensed Consolidated Financial Statements prepared in accordance with U.S. GAAP. Our management regularly uses supplemental non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions, and providing such non-GAAP financial measures to investors allows for a further level of transparency as to how management reviews and evaluates our business results and trends. These non-GAAP measures are among the primarily factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on these non-GAAP measures. Refer to the "Non-GAAP Financial Measures" section attached to this release for a discussion of these non-GAAP measures and their reconciliation to the reported GAAP measures.

Forward Looking Statements

This report and any exhibits to this Report may contain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “should” and similar expressions, as they relate to us, are intended to identify forward-looking statements. These 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. Such factors include, but are not limited to: termination rights contained in our government contracts; our ability to renew commercial and government contracts awarded through competitive bidding processes; our ability to recover capital and other investments in connection with our contracts; our ability to attract and retain necessary technical personnel and qualified subcontractors; our ability to deliver on our contractual obligations properly and on time; competitive pressures; our significant indebtedness; changes in interest in outsourced business process services; our ability to obtain adequate pricing for our services and to improve our cost structure; claims of infringement of third-party intellectual property rights; the failure to comply with laws relating to individually identifiable information, and personal health information and laws relating to processing certain financial transactions, including payment card transactions and debit or credit card transactions; breaches of our security systems and service interruptions; our ability to estimate the scope of work or the costs of performance in our contracts; our ability to collect our receivables for unbilled services; a decline in revenues from or a loss or failure of significant clients; fluctuations in our non-recurring revenue; our failure to maintain a satisfactory credit rating; our ability to attract and retain key employees; increases in the cost of telephone and data services or significant interruptions in such services; our failure to develop new service offerings; our ability to receive dividends or other payments from our subsidiaries; changes in tax and other laws and regulations; changes in government regulation and economic, strategic, political and social conditions; changes in U.S. GAAP or other applicable accounting policies; and other factors that are set forth in the “Risk Factors” section, the “Legal Proceedings” section, the “Management's Discussion and Analysis of Financial Condition and Results of Operations” section and other sections in our 2016 Annual Report on Form 10-K, as well as in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission. Any forward-looking statements made by us in this report speak only as of the date on which they are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, subsequent events or otherwise.

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Media Contacts:

Sean Collins, Conduent, +1-310-497-9205,

Investor Contacts:

Alan Katz, Conduent, +1-973-526-7173,

Tyler Scott, Conduent, +1-973-526-7171,

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