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

Conduent Inc 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 Read: Conduent’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.