Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Q1 beat. Conduent is in a period of transition, given that it is in the process of monetizing non-core assets. While year-over-year comparisons will be difficult to make, the company reported Q1 revenue and adj. EBITDA that were better than our expectations.
Positive commercial trends. Management noted that business activity in its Commercial segment (50% of total revenue) is improving in 2024 as client companies seek ways to restore projects while reducing costs. This could benefit Conduent, particularly for its outsourcing services.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
FLORHAM PARK, NJ, May 1, 2024 – Conduent (NASDAQ: CNDT), a global technology-led business process solutions and services company, today announced its first quarter 2024 financial results.
Cliff Skelton, Conduent President and Chief Executive Officer stated, “Q1 2024 is a continued reflection of progress in our portfolio performance overlaid by timing considerations and variations across our segments. While Revenue exceeded expectations and Adjusted EBITDA/Margin were broadly in line with expectations, sales performance lagged due to the timing of several opportunities between Q1 and Q2. The diversity of our portfolio is further evidenced by a strong quarter in Transportation, improvement in Commercial and some softness in Government.”
“Earlier today we announced the closure of the sale of our Curbside Management and Public Safety businesses. In addition, we expect to finalize the BenefitWallet transaction in May. We will continue to rationalize our portfolio to enable future growth with efficient and effective capital deployment.”
“Finally, as previously stated, 2024 represents what we believe to be the trough in our growth turnaround. With the continued backing of our strong client base, partnerships with some of the leading global technology firms such as Microsoft and Oracle, and 57,000 dedicated associates, we expect continued progress along our 3-year journey and that progress is directly in line with our plan.”
Key Financial Q1 2024 Results
($ in millions, except margin and per share data)
Q1 2024
Q1 2023
Current Quarter Y/Y B/(W)
Revenue
$921
$922
(0.1)%
GAAP Net Income (Loss)
$99
$(6)
n/m
Adjusted EBITDA(1)
$69
$90
(23.3)%
Adjusted EBITDA Margin (1)
7.5%
9.8%
(230) bps
GAAP Income (Loss) Before Income Tax
$127
$(8)
n/m
GAAP Diluted EPS
$0.46
$(0.04)
n/m
Adjusted Diluted EPS(1)
$(0.09)
$0.00
n/m
Cash Flow from Operating Activities
$(37)
$(12)
(208)%
Adjusted Free Cash Flow(1)
$(60)
$(37)
(62)%
Performance Commentary
During the first quarter of 2024, we completed the first tranche of the BenefitWallet portfolio transfer, receiving $164 million as the pro-rata share of the purchase price. Following the completion of the second tranche on April 11, 2024, we expect the third and final tranche of the BenefitWallet portfolio transfer to be completed by the end of the second quarter of 2024.
As a result of the completion of the first and second tranches of the BenefitWallet portfolio transfer, we prepaid $259 million of principal of our Term Loan B.
Other portfolio rationalization efforts include the closure of the sale of the Curbside Management and Public Safety businesses.
Pre-tax income (loss) for the first quarter of 2024 was $127 million versus $(8) million in the prior year period. This increase is primarily driven by the gain on the transfer of the BenefitWallet portfolio.
Q1 2024 Adjusted EBITDA of $69 million and Adjusted EBITDA Margin of 7.5% were in line with our expectations.
Revenue for the first quarter of 2024 was substantially unchanged versus the prior year.
Conduent’s nearly $1.0 billion total liquidity position remains strong with long-dated debt maturities and a modest net leverage ratio.
In the first quarter, we repurchased approximately 4.8 million shares of our common stock in connection with our ongoing share repurchase program.
Additional Q1 2024 Performance Highlights
Conduent achieved several milestones in technology-led solutions, operational excellence and culture, including:
Collaborated in partnership with Microsoft on an initiative across the Conduent portfolio to drive innovation using Microsoft Azure OpenAI Services;
Recently partnered with Oracle to streamline transaction processing by the migration of on-premises Oracle Exadata environment to the cloud with Oracle Database@Azure;
Recognized as a Leader in CX Services Transformation NEAT – Cost Optimization Focus by NelsonHall;
Named “GovTech Top 100 Company” for the third consecutive year; and
Named Newsweek America’s Greatest Workplaces for Women and Diversity 2024.
FY 2024 Outlook(2,3)
FY 2023Actuals
FY 2024Outlook(2,3)
Revenue
$3,722M
$3,600M – $3,700M
Adj. EBITDA(1) / Adj. EBITDA Margin(1)
$378M / 10.2%
8% – 9%
Adj. Free Cash Flow(1) as % of Adj. EBITDA(1)
(1.3)%
5% – 10%
(1) Refer to Appendix for definition and complete Non-GAAP reconciliations of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Diluted EPS and Adjusted Free Cash Flow. (2) Refer to Appendix for definition. (3) Refer to Appendix for additional information regarding non-GAAP outlook. FY 2024 Outlook is not adjusted for completed or anticipated divestiture activity or use of such proceeds.
Conference Call
Management will present the results during a conference call and webcast on May 1, 2024 at 9:00 a.m. ET.
The call will be available by live audio webcast along with the news release and online presentation slides at https://investor.conduent.com/.
The conference call will also be available by calling 877-407-4019 toll-free. If requested, the conference ID for this call is 13745034.
The international dial-in is 1-201-689-8337. The international conference ID is also 13745034.
A recording of the conference call will be available by calling 1-877-660-6853 three hours after the conference call concludes. The replay ID is 13745034.
The telephone recording will be available until May 15, 2024.
About Conduent
Conduent delivers digital business solutions and services spanning the commercial, government and transportation spectrum – creating valuable outcomes for its clients and the millions of people who count on them. The Company leverages cloud computing, artificial intelligence, machine learning, automation and advanced analytics to deliver mission-critical solutions. Through a dedicated global team of approximately 57,000 associates, process expertise and advanced technologies, Conduent’s solutions and services digitally transform its clients’ operations to enhance customer experiences, improve performance, increase efficiencies and reduce costs. Conduent adds momentum to its clients’ missions in many ways including disbursing approximately $100 billion in government payments annually, enabling 2.3 billion customer service interactions annually, empowering millions of employees through HR services every year and processing nearly 13 million tolling transactions every day. Learn more at www.conduent.com.
Non-GAAP Financial Measures
We have reported our financial results in accordance with accounting principles generally accepted in the U.S. (U.S. 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 U.S. 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 results of the current period against the corresponding prior period. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, our 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 Consolidated Financial Statements prepared in accordance with U.S. GAAP. Our management regularly uses our non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. 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 primary 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 certain of 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 U.S. GAAP measures.
Forward-Looking Statements
This press release, any exhibits or attachments to this release, and other public statements we make may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “estimate,” “expect,” “plan,” “intend,” “will,” “aim,” “should,” “could,” “forecast,” “target,” “may,” “continue to,” “endeavor,” “if,” “growing,” “projected,” “potential,” “likely,” “see,” “ahead,” “further,” “going forward,” “on the horizon,” and similar expressions (including the negative and plural forms of such words and phrases), as they relate to us, are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. All statements other than statements of historical fact included in this press release or any attachment to this press release are forward-looking statements, including, but not limited to, statements regarding our financial results, condition and outlook; changes in our operating results; general market and economic conditions; statements regarding portfolio divestitures, such as the transfer of the BenefitWallet portfolio and the sale of the Curbside Management and Public Safety Solutions businesses, including all statements regarding anticipated timing of closing of such divestitures; Conduent’s liquidity position remaining strong; statements regarding our portfolio rationalization plan, including continuing to rationalize our portfolio to enable future growth with efficient and effective capital deployment; 2024 representing what we believe to be the trough in our growth turnaround; and expectations of continued progress along our 3-year journey being directly in line with our plan; and our projected financial performance for the full year 2024 and 2025, including all statements made under the section captioned “FY 2024 Outlook” within this release. These statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, many of which are outside of our control, that could cause actual results to differ materially from those expected or implied by such forward-looking statements contained in this press release, any exhibits to this press release and other public statements we make.
Important factors and uncertainties that could cause our actual results to differ materially from those in our forward-looking statements include, but are not limited to: risks related to pending dispositions, including the transfer of the Company’s BenefitWallet’s portfolio and the sale of the Company’s Curbside Management and Public Safety Solutions businesses, including but not limited to the Company’s ability to realize the benefits anticipated from such transactions, unexpected costs, liabilities or delays in connection with such transactions, and the significant transaction costs associated with such transactions; government appropriations and termination rights contained in our government contracts; the competitiveness of the markets in which we operate; our ability to renew commercial and government contracts, including contracts awarded through competitive bidding processes; our ability to recover capital and other investments in connection with our contracts; our reliance on third-party providers; risk and impact of geopolitical events and increasing geopolitical tensions (such as the wars in the Ukraine and Middle East), macroeconomic conditions, natural disasters and other factors in a particular country or region on our workforce, customers and vendors; our ability to deliver on our contractual obligations properly and on time; changes in interest in outsourced business process services; claims of infringement of third-party intellectual property rights; our ability to estimate the scope of work or the costs of performance in our contracts; the loss of key senior management and our ability to attract and retain necessary technical personnel and qualified subcontractors; our failure to develop new service offerings and protect our intellectual property rights; our ability to modernize our information technology infrastructure and consolidate data centers; expectations relating to environmental, social and governance considerations; utilization of our stock repurchase program; the failure to comply with laws relating to individually identifiable information and personal health information; the failure to comply with laws relating to processing certain financial transactions, including payment card transactions and debit or credit card transactions; breaches of our information systems or security systems or any service interruptions; our ability to comply with data security standards; developments in various contingent liabilities that are not reflected on our balance sheet, including those arising as a result of being involved in a variety of claims, lawsuits, investigations and proceedings; risks related to divestitures and acquisitions; risk and impact of potential goodwill and other asset impairments; our significant indebtedness and the terms of such indebtedness; our failure to obtain or maintain a satisfactory credit rating and financial performance; our ability to obtain adequate pricing for our services and to improve our cost structure; our ability to collect our receivables, including those for unbilled services; a decline in revenues from, or a loss of, or a reduction in business from or failure of significant clients; fluctuations in our non-recurring revenue; increases in the cost of voice and data services or significant interruptions in such services; our ability to receive dividends or other payments from our subsidiaries; 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 2023 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 or furnished to the Securities and Exchange Commission. Any forward-looking statements made by us in this release 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 because of new information, subsequent events or otherwise, except as required by law.
CONDUENT INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)
Three Months Ended March 31,
(in millions, except per share data)
2024
2023
Revenue
$
921
$
922
Operating Costs and Expenses
Cost of services (excluding depreciation and amortization)
735
720
Selling, general and administrative (excluding depreciation and amortization)
116
111
Research and development (excluding depreciation and amortization)
2
2
Depreciation and amortization
62
61
Restructuring and related costs
9
29
Interest expense
27
27
(Gain) loss on divestitures and transaction costs, net
(161
)
2
Litigation settlements (recoveries), net
4
(21
)
Loss on extinguishment of debt
2
—
Other (income) expenses, net
(2
)
(1
)
Total Operating Costs and Expenses
794
930
Income (Loss) Before Income Taxes
127
(8
)
Income tax expense (benefit)
28
(2
)
Net Income (Loss)
$
99
$
(6
)
Net Income (Loss) per Share:
Basic
$
0.46
$
(0.04
)
Diluted
$
0.46
$
(0.04
)
CONDUENT INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
Three Months Ended March 31,
(in millions)
2024
2023
Net Income (Loss)
$
99
$
(6
)
Other Comprehensive Income (Loss), Net (1)
Currency translation adjustments, net
(11
)
17
Unrecognized gains (losses), net
—
1
Other Comprehensive Income (Loss), Net
(11
)
18
Comprehensive Income (Loss), Net
$
88
$
12
__________
(1) All amounts are net of tax. Tax effects were immaterial.
Shares of series A convertible preferred stock issued and outstanding
120
120
Shares of common stock held in treasury
13,665
8,841
CONDUENT INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended March 31,
(in millions)
2024
2023
Cash Flows from Operating Activities:
Net income (loss)
$
99
$
(6
)
Adjustments required to reconcile net income (loss) to cash flows from operating activities:
Depreciation and amortization
62
61
Contract inducement amortization
1
1
Deferred income taxes
13
(8
)
Amortization of debt financing costs
1
1
Loss on extinguishment of debt
2
—
(Gain) loss on divestitures and sales of fixed assets, net
(164
)
—
Stock-based compensation
3
2
Changes in operating assets and liabilities
(54
)
(63
)
Net cash provided by (used in) operating activities
(37
)
(12
)
Cash Flows from Investing Activities:
Cost of additions to land, buildings and equipment
(13
)
(11
)
Cost of additions to internal use software
(8
)
(11
)
Proceeds from divestitures
164
—
Net cash provided by (used in) investing activities
143
(22
)
Cash Flows from Financing Activities:
Payments on debt
(175
)
(10
)
Treasury stock purchases
(17
)
—
Taxes paid for settlement of stock-based compensation
(5
)
(7
)
Dividends paid on preferred stock
(2
)
(2
)
Net cash provided by (used in) financing activities
(199
)
(19
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(2
)
2
Increase (decrease) in cash, cash equivalents and restricted cash
(95
)
(51
)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period
519
598
Cash, Cash Equivalents and Restricted Cash at End of period (1)
$
424
$
547
___________
(1) Includes $9 million and $21 million restricted cash as of March 31, 2024 and 2023 , respectively, that were included in Other current assets on their respective Condensed Consolidated Balance Sheets.
Appendix
Definitions
Net ARR Activity Metric (TTM)
Projected Annual Recurring Revenue for contracts signed in the prior 12 months, less the annualized impact of any client losses, contractual volume and price changes, and other known impacts for which the company was notified in that same time period, which could positively or negatively impact results. The metric annualizes the net impact to revenue. Timing of revenue impact varies and may not be realized within the forward 12-month timeframe. The metric is for indicative purposes only. This metric excludes COVID-related volume impacts and non-recurring revenue signings. This metric is not indicative of any specific 12 month timeframe.
New Business Annual Contract Value (ACV): (New Business TCV / contract term) multiplied by 12.
New Business Total Contract Value (TCV): Estimated total future revenues from contracts signed during the period related to new logo, new service line or expansion with existing customers.
TTM: Trailing twelve months.
PBT: Profit before tax.
Non-GAAP Financial Measures
We have reported our financial results in accordance with accounting principles generally accepted in the U.S. (U.S. 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 U.S. 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 results of the current period against the corresponding prior period. However, 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 Consolidated Financial Statements prepared in accordance with U.S. GAAP. Our management regularly uses our 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 primary 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 certain of these non-GAAP measures.
A reconciliation of the following non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP are provided below.
These reconciliations also include the income tax effects for our non-GAAP performance measures in total, to the extent applicable. The income tax effects are calculated under the same accounting principles as applied to our reported pre-tax performance measures under Accounting Standards Codification 740, which employs an annual effective tax rate method. The noted income tax effect for our non-GAAP performance measures is effectively the difference in income taxes for reported and adjusted pre-tax income calculated under the annual effective tax rate method. The tax effect of the non-GAAP adjustments was calculated based upon evaluation of the statutory tax treatment and the applicable statutory tax rate in the jurisdictions in which such charges were incurred.
Adjusted Net Income (Loss), Adjusted Diluted Earnings per Share, Adjusted Weighted Average Common Shares Outstanding, and Adjusted Effective Tax Rate
We make adjustments to Net Income (Loss) before Income Taxes for the following items, as applicable, to the particular financial measure, for the purpose of calculating Adjusted Net Income (Loss), Adjusted Diluted Earnings per Share, Adjusted Weighted Average Common Shares Outstanding, and Adjusted Effective Tax Rate:
Amortization of acquired intangible assets. The amortization of acquired intangible assets is driven by acquisition activity, which can vary in size, nature and timing as compared to other companies within our industry and from period to period.
Restructuring and related costs. Restructuring and related costs include restructuring and asset impairment charges as well as costs associated with our strategic transformation program.
Goodwill impairment. This represents goodwill impairment charges related to entering the agreement to transfer the BenefitWallet portfolio.
(Gain) loss on divestitures and transaction costs, net. Represents (gain) loss on divested businesses and transaction costs.
Litigation settlements (recoveries), net represents settlements or recoveries for various matters subject to litigation.
Loss on extinguishment of debt. This represents write-off related debt issuance costs related to prepayments of debt.
Other charges (credits). This includes Other (income) expenses, net on the Consolidated Statements of Income (loss) and other insignificant (income) expenses and other adjustments.
Divestitures. Revenue and Adjusted EBITDA of divested businesses are excluded.
The Company provides adjusted net income and adjusted EPS financial measures to assist our investors in evaluating our ongoing operating performance for the current reporting period and, where provided, over different reporting periods, by adjusting for certain items which may be recurring or non-recurring and which in our view do not necessarily reflect ongoing performance. We also internally use these measures to assess our operating performance, both absolutely and in comparison to other companies, and in evaluating or making selected compensation decisions.
Management believes that the adjusted effective tax rate, provided as supplemental information, facilitates a comparison by investors of our actual effective tax rate with an adjusted effective tax rate which reflects the impact of the items which are excluded in providing adjusted net income and certain other identified items, and may provide added insight into our underlying business results and how effective tax rates impact our ongoing business.
Adjusted Operating Income and Adjusted Operating Margin
We make adjustments to Costs and Expenses and Operating Margin for the following items, as applicable, for the purpose of calculating Adjusted Operating Income and Adjusted Operating Margin:
Amortization of acquired intangible assets.
Restructuring and related costs.
Interest expense. Interest expense includes interest on long-term debt and amortization of debt issuance costs.
Goodwill impairment.
Loss on extinguishment of debt.
(Gain) loss on divestitures and transaction costs, net.
Litigation settlements (recoveries), net.
Other charges (credits).
Divestitures.
We provide our investors with adjusted operating income and adjusted operating margin information, as supplemental information, because we believe it offers added insight, by itself and for comparability between periods, by adjusting for certain non-cash items as well as certain other identified items which we do not believe are indicative of our ongoing business, and may also provide added insight on trends in our ongoing business.
Adjusted EBITDA and EBITDA Margin
We use Adjusted EBITDA and Adjusted EBITDA Margin as an additional way of assessing certain aspects of our operations that, when viewed with the U.S. GAAP results and the accompanying reconciliations to corresponding U.S. GAAP financial measures, provide a more complete understanding of our on-going business. Adjusted EBITDA represents income (loss) before interest, income taxes, depreciation and amortization and contract inducement amortization adjusted for the following items. Adjusted EBITDA Margin is Adjusted EBITDA divided by revenue.
Restructuring and related costs.
Goodwill impairment.
Loss on extinguishment of debt.
(Gain) loss on divestitures and transaction costs, net.
Litigation settlements (recoveries), net.
Other charges (credits).
Divestitures.
Adjusted EBITDA is not intended to represent cash flows from operations, operating income (loss) or net income (loss) as defined by U.S. GAAP as indicators of operating performance. Management cautions that amounts presented in accordance with Conduent’s definition of Adjusted EBITDA and Adjusted EBITDA Margin may not be comparable to similar measures disclosed by other companies because not all companies calculate Adjusted EBITDA and Adjusted EBITDA Margin in the same manner.
Free Cash Flow
Free Cash Flow is defined as cash flows from operating activities as reported on the consolidated statement of cash flows, less cost of additions to land, buildings and equipment, cost of additions to internal use software, and proceeds from sales of land, buildings and equipment. We use the non-GAAP measure of Free Cash Flow as a criterion of liquidity. We use Free Cash Flow as a measure of liquidity to determine amounts we can reinvest in our core businesses, such as amounts available to make acquisitions and invest in land, buildings and equipment and internal use software, after required payments on debt. In order to provide a meaningful basis for comparison, we are providing information with respect to our Free Cash Flow reconciled to cash flow provided by operating activities, which we believe to be the most directly comparable measure under U.S. GAAP.
Adjusted Free Cash Flow
Adjusted Free Cash Flow is defined as Free Cash Flow from above plus adjustments for litigation insurance recoveries, transaction costs, taxes paid on gains from divestitures and litigation recoveries, proceeds from failed sale-leaseback transactions and certain other identified adjustments. We use Adjusted Free Cash Flow, in addition to Free Cash Flow, to provide supplemental information to our investors concerning our ability to generate cash from our ongoing operating activities; by excluding these items, we believe we provide useful additional information to our investors to help them further understand our ability to generate cash period-over-period as well as added information on comparability to our competitors. Such as with Free Cash Flow information, as so adjusted, it is specifically not intended to provide amounts available for discretionary spending. We have added certain adjustments to account for items which we do not believe reflect our core business or operating performance, and we computed all periods with such adjusted costs.
Revenue at Constant Currency
To better understand trends in our business, we believe that it is helpful to adjust revenue to exclude the impact of changes in the translation of foreign currencies into U.S. Dollars. We refer to this adjusted revenue as “constant currency.” Currency impact is determined as the difference between actual growth rates and constant currency growth rates. This currency impact is calculated by translating the current period activity in local currency using the comparable prior-year period’s currency translation rate.
Non-GAAP Outlook
In providing the Full Year 2024 outlook for Adjusted EBITDA we exclude certain items which are otherwise included in determining the comparable U.S. GAAP financial measure. A description of the adjustments which historically have been applicable in determining Adjusted EBITDA is reflected in the table below. In addition, “Full Year 2024 Outlook”, is not adjusted for completed or anticipated divestiture activity or use of such proceeds. We are providing such outlook only on a non-GAAP basis because the Company is unable without unreasonable efforts to predict with reasonable certainty the totality or ultimate outcome or occurrence of these adjustments for the forward-looking period, which can be dependent on future events that may not be reliably predicted. Based on past reported results, where one or more of these items have been applicable, such excluded items could be material, individually or in the aggregate, to reported results. Full Year 2024 Outlook for Adjusted Free Cash Flow is provided as a factor of expected Adjusted EBITDA, and such outlook is only available on a non-GAAP basis for the reasons described above. For the same reason, we are unable to provide a GAAP expected adjusted tax rate, which adjusts for our non-GAAP adjustments.
Non-GAAP Reconciliations: Revenue at Constant Currency, Adjusted Net Income (Loss), Adjusted Effective Tax, Adjusted Operating Income (Loss) and Adjusted EBITDA were as follows:
Three Months Ended March 31,
(in millions)
2024
2023
REVENUE
Revenue
$
921
$
922
Adjustment:
Foreign currency impact
(2
)
3
Revenue at Constant Currency
$
919
$
925
ADJUSTED NET INCOME (LOSS)
Net Income (Loss)
$
99
$
(6
)
Adjustments:
Amortization of acquired intangible assets ( 1 )
1
2
Restructuring and related costs
9
29
Loss on extinguishment of debt
2
—
(Gain) loss on divestitures and transaction costs, net
(161
)
2
Litigation settlements (recoveries), net
4
(21
)
Other charges (credits)
(2
)
(1
)
Total Non-GAAP Adjustments
(147
)
11
Income tax adjustments ( 2 )
32
(3
)
Adjusted Net Income (Loss)
$
(16
)
$
2
ADJUSTED EFFECTIVE TAX
Income (Loss) Before Income Taxes
$
127
$
(8
)
Adjustments:
Total Non-GAAP Adjustments
(147
)
11
Adjusted PBT
$
(20
)
$
3
Income tax expense (benefit)
$
28
$
(2
)
Income tax adjustments ( 2 )
(32
)
3
Adjusted Income Tax Expense (Benefit)
(4
)
1
Adjusted Net Income (Loss)
$
(16
)
$
2
CONTINUED
Three Months Ended March 31,
(in millions)
2024
2023
ADJUSTED OPERATING INCOME (LOSS)
Income (Loss) Before Income Taxes
$
127
$
(8
)
Adjustments:
Total non-GAAP adjustments
(147
)
11
Interest expense
27
27
Adjusted Operating Income (Loss)
$
7
$
30
ADJUSTED EBITDA
Net Income (Loss)
$
99
$
(6
)
Income tax expense (benefit)
28
(2
)
Depreciation and amortization
62
61
Contract inducement amortization
1
1
Interest expense
27
27
EBITDA
217
81
Adjustments:
Restructuring and related costs
9
29
(Gain) loss on divestitures and transaction costs, net
(161
)
2
Litigation settlements (recoveries), net
4
(21
)
Loss on extinguishment of debt
2
—
Other charges (credits)
(2
)
(1
)
Adjusted EBITDA
$
69
$
90
___________
(1) Included in Depreciation and amortization on the Consolidated Statements of Income (Loss).
(2) The tax impact of Adjusted Pre-tax income (loss) from continuing operations was calculated under the same accounting principles applied to the ‘As Reported’ pre-tax income (loss), which employs an annual effective tax rate method to the results and without regard to the adjustments listed.
Non-GAAP Reconciliations: Adjusted Weighted Average Shares Outstanding, Adjusted Diluted EPS, Adjusted Effective Tax Rate, Adjusted Operating Margin and Adjusted EBITDA Margin were as follows:
Three Months Ended March 31,
(Amounts are in whole dollars, shares are in thousands and margins and rates are in %)
2024
2023
ADJUSTED DILUTED EPS (1)
Weighted Average Common Shares Outstanding
209,160
218,410
Adjustments:
Restricted stock and performance units / shares
—
—
Adjusted Weighted Average Common Shares Outstanding
209,160
218,410
Diluted EPS from Continuing Operations
$
0.46
$
(0.04
)
Adjustments:
Total non-GAAP adjustments
(0.70
)
0.05
Income tax adjustments (2)
0.15
(0.01
)
Adjusted Diluted EPS
$
(0.09
)
$
—
ADJUSTED EFFECTIVE TAX RATE
Effective tax rate
21.9
%
20.8
%
Adjustments:
Total non-GAAP adjustments
0.3
%
14.2
%
Adjusted Effective Tax Rate (2)
22.2
%
35.0
%
ADJUSTED OPERATING MARGIN
Income (Loss) Before Income Taxes Margin
13.8
%
(0.9)%
Adjustments:
Total non-GAAP adjustments
(15.9)%
1.3
%
Interest expense
2.9
%
2.9
%
Margin for Adjusted Operating Income
0.8
%
3.3
%
ADJUSTED EBITDA MARGIN
EBITDA Margin
23.6
%
8.8
%
Total non-GAAP adjustments
(16.1
)%
1.0
%
Adjusted EBITDA Margin
7.5
%
9.8
%
__________
(1) Average shares for the 2024 and 2023 calculation of adjusted EPS excludes 5.4 million shares associated with our Series A convertible preferred stock and includes the impact of preferred stock dividend of approximately $2 million and $2 million for the three months ended March 31, 2024 and 2023 , respectively.
(2) The tax impact of Adjusted Pre-tax income (loss) from continuing operations was calculated under the same accounting principles applied to the ‘As Reported’ pre-tax income (loss), which employs an annual effective tax rate method to the results and without regard to the Total Non-GAAP adjustments.
(3) Adjusted for the full impact from revenue and income/loss from divestitures for all periods presented.
Free Cash Flow and Adjusted Free Cash Flow Reconciliation:
Three Months Ended March 31,
(in millions)
2024
2023
Operating Cash Flow
$
(37
)
$
(12
)
Cost of additions to land, buildings and equipment
Sale demonstrates continued progress in Conduent’s strategy to streamline its portfolio to drive increased focus on its core capabilities and enable synergistic growth
FLORHAM PARK, N.J. — Conduent Incorporated (Nasdaq: CNDT), a global technology-led business solutions and services company, today announced it has successfully completed the sale of its Curbside Management Solutions and Public Safety Solutions businesses to Modaxo, a division of Constellation Software Inc. (TSX: CSU). The signing of the transaction was announced on December 28, 2023. The sale has a purchase price of $230 million.
“This divestiture marks another significant step in our efforts to concentrate on our core capabilities and foster growth that benefits both our shareholders and clients,” said Cliff Skelton, Conduent President and CEO. “With the completion of this sale, our focus remains on a smooth transition for our team members and clients as we continue to execute our growth strategy and advance toward our deployable capital goal.”
As outlined during Conduent’s 2023 investor briefing, the company set on a course to rationalize its business portfolio to increase focus on core capabilities, become more nimble, and enhance shareholder and client value.
Conduent will also continue to drive innovation in its Road Usage Charging Solutions and Transit Solutions businesses to enable streamlined, high-volume mobility services. The sale to Modaxo has no impact on these businesses.
Additional details of the transaction are outlined in Conduent’s 8-K filed with the U.S. Securities and Exchange Commission (SEC) today.
About Conduent
Conduent delivers digital business solutions and services spanning the commercial, government and transportation spectrum – creating valuable outcomes for its clients and the millions of people who count on them. The Company leverages cloud computing, artificial intelligence, machine learning, automation and advanced analytics to deliver mission-critical solutions. Through a dedicated global team of approximately 59,000 associates, process expertise and advanced technologies, Conduent’s solutions and services digitally transform its clients’ operations to enhance customer experiences, improve performance, increase efficiencies and reduce costs. Conduent adds momentum to its clients’ missions in many ways including disbursing approximately $100 billion in government payments annually, enabling 2.3 billion customer service interactions annually, empowering millions of employees through HR services every year and processing nearly 13 million tolling transactions every day. Learn more at www.conduent.com .
Conduent is a trademark of Conduent Incorporated in the United States and/or other countries. Other names may be trademarks of their respective owners.
Forward-Looking Statements
This press release may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “estimate,” “expect,” “plan,” “intend,” “will,” “aim,” “should,” “could,” “forecast,” “target,” “may,” “continue to,” “endeavor,” “if,” “growing,” “projected,” “potential,” “likely,” “see,” “ahead,” “further,” “going forward,” “on the horizon,” “enable,” “strategy,” and similar expressions (including the negative and plural forms of such words and phrases), as they relate to us, are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. All statements other than statements of historical fact included in this press release are forward-looking statements, including, but not limited to, statements regarding Conduent’s focus on continuing to provide a seamless transition for team members and clients as Conduent executes its growth strategy and advances towards its deployable capital goal, expectations that Conduent will continue to drive innovation in its Road Usage Charging Solutions and Transit Solutions businesses to enable streamlined, high-volume mobility services, and Conduent’s strategy to streamline its portfolio to drive increased focus on its core capabilities and enable synergistic growth, as well as to rationalize its business portfolio to increase focus on core capabilities, become more nimble, and enhance shareholder and client value. These statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, many of which are outside of our control, that could cause actual results to differ materially from those expected or implied by such forward-looking statements contained in this press release, any exhibits to this press release and other public statements we make. Important factors and uncertainties that could cause actual results to differ materially from those in our forward-looking statements include, but are not limited to: Conduent’s ability to realize the benefits anticipated from the sale of its curbside management and public safety businesses; unexpected costs, liabilities or delays in connection with the transaction; the significant transaction costs associated with the transaction; negative effects of the announcement, pendency or consummation of the transaction on the market price of our common stock or operating results, including as a result of changes in key customer, supplier, employee or other business relationships; the risk of litigation or regulatory actions; our inability to retain and hire key personnel; the risk that certain contractual restrictions contained in the definitive transaction agreement could adversely affect our ability to pursue business opportunities or strategic transactions; and other factors that are set forth in the “Risk Factors” and other sections of our 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 or furnished to the Securities and Exchange Commission. Any forward-looking statements made by us in this press release 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 because of new information, subsequent events or otherwise, except as required by law.
In a landmark achievement, Alphabet Inc. (Google’s parent company) has officially become the 4th publicly traded company in history to cross the $2 trillion market capitalization threshold. After briefly touching this vaunted level in late 2021, Google has now comfortably sustained a $2 trillion-plus valuation for an entire trading day amid investor enthusiasm for its artificial intelligence initiatives.
Google now stands among an exclusive group of megacap tech titans alongside Apple ($2.6T), Microsoft ($3.0T), and chipmaker Nvidia ($2.2T). E-commerce behemoth Amazon is nipping at Google’s heels with a $1.8T market cap, while social media giant Meta lags at $1.1T after its controversial metaverse pivot.
The milestone cements Google’s status as a generational company and one of the most pivotal names reshaping the world through cutting-edge AI development. While Google built its fortune through pioneering internet search and digital advertising, investors are now betting billions that its bold AI plays will unlock massive new revenue streams for decades to come.
Alphabet’s surge past $2 trillion follows the company reporting blowout Q1 2024 earnings results that highlighted its AI progress. Revenue jumped 15% year-over-year to $80.5 billion, with profits increasing 14% to $23.7 billion. These robust gains came even as Google enacted cost-cutting layoffs and refocused spending toward generative AI like the company’s new Gemini chatbot.
On the earnings call, CEO Sundar Pichai expressed confidence Google was finding “small” ways to monetize AI already, such as improving ad targeting through its Performance Max platform. However, he signaled a go-slow approach to preserve the integrity of Google’s flagship search business. “We’re being measured in how we do this, focusing on areas where Gen AI can improve the search experience while also prioritizing traffic to websites and merchants,” Pichai stated.
Google’s strong performance across its legacy businesses gave it financial flexibility to make big AI investments. Search advertising was up 14%, YouTube ads grew 21%, and premium subscription revenues rose 18% on increasing YouTube Premium adoption. Even after over $700 million in severance costs from layoffs, Google’s operating margins remained at robust levels.
The solid Q1 results helped convince Wall Street that Google has the resources and focus to remain an AI leader. Unlike rival Meta’s stock sliding 10% recently when it warned of heavy AI investment before future payoffs, Alphabet shares surged over 5% as investors cheered its $70 billion share buyback authorization and first-ever $0.20 quarterly dividend initiation.
For investors, Google’s $2 trillion valuation reflects optimism in the company’s ability to commercialize emerging AI technologies across products like search, cloud computing, smart devices, and digital advertising. AI is expected to unlock multi-trillion dollar growth opportunities by enhancing products, streamlining operations, accelerating research, and spawning new business models.
However, realizing AI’s transformative power will require overcoming major hurdles like developing ethical guidelines, addressing data privacy, navigating a patchwork of regulations, and solving issues like bias and transparency. Failure to responsibly implement AI could open Google and peers to public backlash and legal consequences.
Yet the upsides transcend profits – the companies driving the AI revolution may gain outsized influence in shaping this disruptive technology’s societal impact for decades. For Google and its big tech brethren, striking the right balance between rapid AI development and responsibility will be as critical as the technology breakthroughs themselves.
With a $2 trillion stamp of approval, the AI era has officially arrived for Google. The search giant now faces heightened pressures to deliver on its vision of AI ushering in a new wave of groundbreaking innovations and economic prosperity. For a company born into humble startup origins, this lofty $2 trillion AI perch brings both unprecedented opportunities and unprecedented challenges.
Initiative initially focused on generative AI implementation in healthcare claims management, customer service platforms and fraud detection
FLORHAM PARK, N.J. — Conduent Incorporated (Nasdaq: CNDT), a global technology-led business solutions and services company, today announced an innovation initiative with Microsoft that will use Microsoft Azure OpenAI Service to bring the power of generative AI to drive quality, productivity and faster cycle times for Conduent’s global clients.
The innovative initiative initially is exploring generative AI implementation in healthcare claims management, customer service platforms and fraud detection, with three pilots underway. By integrating generative AI into its client offerings and internal operations, Conduent builds on its longstanding history of delivering technologies and solutions that improve client operating and cost performance, enhance customer experience and optimize business processes.
“With a heritage built on helping our clients improve their business performance through technologies such as automation, machine learning, and digitalization, we are excited to collaborate with Microsoft to develop the next generation of business solutions that will be powered by generative AI,” said Cliff Skelton, Conduent President and Chief Executive Officer. “We are focused on harnessing the potential of generative AI to further advance our solutions and capabilities leading to improved quality, efficiency and productivity for our clients and in our own operations.”
“Generative AI has the power to transform how businesses and organizations operate – serving as a force-multiplier to improve efficiencies and enhance customer experiences across a range of industries,” said Svetlana Reznik, GM Data & AI at Microsoft. “Our collaboration with Conduent will help accelerate AI adoption for their customers in a secure cloud environment.”
Creating innovation in business processes through generative AI As a BPaaS leader with a diversified portfolio of solutions and industries served, Conduent is in a unique position to evaluate and embed generative AI across a range of applications and sectors.
Through this AI initiative, Conduent and Microsoft will be collaborating on multiple use cases across a variety of business processes. These use cases will use dedicated instances of AI to protect Conduent’s and its clients’ data. The generative AI pilots underway include:
Intelligent data harvesting from healthcare claims documents for faster adjudication by implementing Azure AI Document Intelligence and Azure OpenAI Service
Increasing the volume and speed of fraud detection processing in payments by using Azure Data Factory and Azure OpenAI Service
Improving customer service agent responsiveness by using Azure AI Language Service, Azure AI Speech Service and Azure OpenAI Service
About Conduent Conduent delivers digital business solutions and services spanning the commercial, government and transportation spectrum – creating valuable outcomes for its clients and the millions of people who count on them. The Company leverages cloud computing, artificial intelligence, machine learning, automation and advanced analytics to deliver mission-critical solutions. Through a dedicated global team of approximately 59,000 associates, process expertise and advanced technologies, Conduent’s solutions and services digitally transform its clients’ operations to enhance customer experiences, improve performance, increase efficiencies and reduce costs. Conduent adds momentum to its clients’ missions in many ways including disbursing approximately $100 billion in government payments annually, enabling 2.3 billion customer service interactions annually, empowering millions of employees through HR services every year and processing nearly 13 million tolling transactions every day. Learn more at www.conduent.com .
Trademarks Conduent is a trademark of Conduent Incorporated in the United States and/or other countries. Other names may be trademarks of their respective owners.
Conduent to maintain flexible, dynamic pricing and conduct license plate image reviews, helping to improve the flow of traffic and relieve congestion for VDOT
FLORHAM PARK, N.J. — Conduent Transportation, a global provider of smart mobility technology solutions and business unit of Conduent Incorporated (Nasdaq: CNDT), today announced the implementation of an Express Lanes tolling system in Virginia. The system, which went live March 17 on a segment of the I-64 Hampton Roads Express Lanes, was designed by Conduent as part of a 2021 contract from the Virginia Department of Transportation (VDOT).
Conduent will operate and maintain an innovative and completely overhead vehicle classification system, a traffic-responsive dynamic pricing system and an automated license plate recognition system, as well as conduct license plate image reviews for VDOT. These technologies and services are designed to help improve traffic flow and relieve congestion for motorists and passengers.
To enable dynamic pricing, VDOT will use data analytics to determine toll rates based on the volume of traffic during different times of the day, helping reduce overall travel times and enhance predictability and mobility choices for motorists. The lanes remain free for vehicles with two or more occupants using a required E-ZPass Flex transponder.
“It’s exciting to offer our clients the latest innovations in tolling technology that greatly enhance the roadway experience for motorists, from an overhead vehicle classification system to the ease of booth-less electronic payment – all enabling reduced congestion and faster journeys,” said Adam Appleby, President, Transportation Solutions at Conduent. “Our tolling solutions also improve operational efficiency, accuracy and customer service for transportation and tolling authorities. As a leader in road usage charging, Conduent continues to identify new solutions to transform mobility.”
This segment on I-64, located in Chesapeake and Norfolk, is the first of four segments that will be implemented with the new system. The segments will ultimately become a part of a continuous 45-mile Express Lanes network on the corridor. VDOT also has the option under the contract to implement a vehicle occupancy detection system in the future, which would use camera systems and video analytics to identify the number of occupants in a vehicle.
Conduent Transportation is a leading provider of streamlined, high-volume mobility services and solutions, spanning road usage charging and advanced transit systems, that enhance the services provided by transportation agencies to benefit the citizens who use them. For over 50 years, the company has helped clients advance transportation solutions in more than 20 countries.
About Conduent Conduent delivers digital business solutions and services spanning the commercial, government and transportation spectrum – creating valuable outcomes for its clients and the millions of people who count on them. The Company leverages cloud computing, artificial intelligence, machine learning, automation and advanced analytics to deliver mission-critical solutions. Through a dedicated global team of approximately 59,000 associates, process expertise and advanced technologies, Conduent’s solutions and services digitally transform its clients’ operations to enhance customer experiences, improve performance, increase efficiencies and reduce costs. Conduent adds momentum to its clients’ missions in many ways including disbursing approximately $100 billion in government payments annually, enabling 2.3 billion customer service interactions annually, empowering millions of employees through HR services every year and processing nearly 13 million tolling transactions every day. Learn more at www.conduent.com.
Trademarks Conduent is a trademark of Conduent Incorporated in the United States and/or other countries. Other names may be trademarks of their respective owners.
Service leverages ISG GovernX® platform to help enterprises comply with the ‘Fighting Against Forced Labour and Child Labour in Supply Chains’ Act
STAMFORD, Conn.–(BUSINESS WIRE)– Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, has expanded its dedicated modern slavery advisory and risk management service to Canada, to help enterprises located in and selling to businesses and consumers in Canada comply with the new “Fighting Against Forced Labour and Child Labour in Supply Chains Act.”
The new law came into effect on January 1, 2024, requiring companies that sell, produce, distribute or import goods and are either listed on a Canadian stock exchange or have $20 million in assets, 250 employees and/or $40 million in annual revenue, to submit an annual statement by May 31, detailing efforts to ensure forced and child labor are not used in their business and supply chains, or face fines of up to $250,000.
“The Canadian government has put in place some of the strictest legislation to date to fight the scourge of forced and child labor, imposing meaningful penalties for failure to comply and personal liabilities for company directors and officers,” said Hanne McBlain, senior director, and head of ISG’s global efforts to comply with legislation and anti-slavery efforts. “Most Canadian companies and global companies that operate in or sell to Canada will need to submit an extensive questionnaire by May 31 to be in compliance.”
Supplier management that is thorough enough to ensure compliance with the legislation cannot be done without the help of automation and technology, McBlain said. All modern slavery laws, including the newest one in Canada, require businesses to detail their efforts to audit their suppliers for slavery risks and the specific policies, procedures and training they have put in place to assess the integrity of their supply chains. However, many organizations have thousands of suppliers, making manual mapping and monitoring impossible.
The ISG modern slavery offering combines advisory services with the automated capabilities of ISG GovernX®, the industry’s only governance solution that integrates contract information, strategic relationship management and real-time risk monitoring to help clients manage their supplier ecosystems.
ISG has been addressing modern slavery legislation since 2018, when it first drew legislative focus. The firm has created and implemented a global framework to ensure ISG itself is not linked to modern slavery risks and has developed an in-depth knowledge of legislation and associated requirements while working to meet obligations in Australia, France, Germany, the Netherlands, the U.K., Norway, California and Canada.
ISG advisors help clients develop a modern slavery framework, review and update policies across the enterprise, conduct training, map their entire supply chain, and add modern slavery clauses to contract templates.
The ISG GovernX platform automatically sends assessments to each supplier requiring them to provide information on their modern slavery framework, reporting, policies and training, and monitors external data feeds for all potential risks within the specific supplier ecosystem and the broader marketplace. Users can add a variety of external intelligent workflows to identify and categorize each risk, alert the appropriate functions, and trigger automated responses, including targeted risk assessments to the suppliers involved.
Additional information on ISG third-party risk management and modern slavery advisory services is available on the ISG website.
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.
ATLANTA, April 22, 2024 (GLOBE NEWSWIRE) — DLH Holdings Corp. (NASDAQ: DLHC) (“DLH” or the “Company”), a leading healthcare and human services provider to the federal government, will release financial results for the fiscal second quarter ended March 31, 2024 on May 1, 2024 after the market closes. DLH will then host a conference call for the investment community at 10:00 a.m. Eastern Time the following day, May 2, 2024, during which members of senior management will make a brief presentation focused on the financial results and operating trends. A question-and-answer session will follow.
Interested parties may listen to the conference call by dialing 888-347-5290 or 412-317-5256. Presentation materials will also be posted on the Investor Relations section of the DLH website prior to the commencement of the conference call. A digital recording of the conference call will be available for replay two hours after the completion of the call and can be accessed on the DLH Investor Relations website or by dialing 877-344-7529 and entering the conference ID 2520402.
About DLH DLH (NASDAQ: DLHC) enhances technology, public health, and cyber security readiness missions through science, technology, cyber, and engineering solutions and services. Our experts solve some of the most complex and critical missions faced by federal customers, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With over 3,200 employees dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to innovative solutions to improve the lives of millions. For more information, visit www.DLHcorp.com.
INVESTOR RELATIONS Contact: Chris Witty Phone: 646-438-9385 Email: cwitty@darrowir.com
US stocks were mired in a broad sell-off on Friday, with the S&P 500 and Nasdaq Composite extending their losing streaks to six sessions despite easing concerns over a potential military escalation between Israel and Iran. The slide puts both indexes on pace for their worst weekly losses in months as investors continue repricing expectations around Federal Reserve rate policy.
The tech-heavy Nasdaq bore the brunt of the selling, dropping 1.3% as disappointing earnings from streaming giant Netflix exacerbated the rout in high-growth companies. The S&P 500 fell 0.4%, dragged lower by weakness in its information technology sector.
In contrast, the Dow Jones Industrial Average rose 0.7%, lifted by a massive post-earnings rally in American Express. But the divergent performance did little to soothe overall market jitters.
Netflix plummeted over 8% even after topping first-quarter profit and revenue estimates. The company’s decision to stop reporting paid subscriber metrics beginning in 2025 raised concerns on Wall Street about its ability to maintain its stratospheric growth trajectory.
The streaming industry bellwether’s slide reverberated across other pandemic winners. Chip stocks like Nvidia and data center firm Super Micro Computer tumbled 4% and 18% respectively, adding to this week’s brutal declines.
The technology-led selloff comes against a backdrop of unresolved global macro risks weighing on sentiment. Overnight, US equity futures careened lower and oil prices spiked after Israel launched airstrikes into Iran in retaliation for last week’s drone attacks.
However, markets appeared to take the muted response in stride as Friday’s session progressed. With neither side appearing eager to escalate the conflict further, crude benchmarks pared their earlier gains, while futures recovered most of their earlier losses.
Still, the flareup injected a fresh dose of geopolitical angst into markets already on edge over stubbornly high inflation and the implications for central bank policy tightening down the road. While no broader military conflagration has materialized yet, the smoldering tensions threaten to exacerbate existing supply chain constraints.
Ultimately, Wall Street’s immediate focus remains squarely on tackling decades-high consumer prices through aggressive monetary policy. And on that front, data continues to reinforce the challenges facing the Fed in bringing inflation back towards its 2% target.
This week’s string of hotter-than-expected readings, ranging from producer prices to housing costs, dimmed hopes for an imminent rate cut cycle central banks had been forecasting just months ago. Economists now don’t see the first Fed rate reduction until September at the earliest.
That policy repricing has piled pressure onto richly-valued growth and technology names which had rallied furiously to start the year. Year-to-date, the Nasdaq has now surrendered nearly all of its 2023 gains.
With the S&P 500 over 5% off its highs, earnings season takes on heightened importance for investors seeking reassurance that corporate profits can withstand further Fed tightening. So far, results have failed to provide much of a safety net with the majority of major companies reporting missing lowered expectations.
The deepening tech wreck underscores the dimming outlook for an already battered leadership group. Absent a decisive downtrend in inflation, markets could have more room to reset before finding their ultimate nadir.
Cross-Device Campaign Drove 363% Sales Lift and $67M in Incremental Sales Resulting in a 513X ROAS
NEW YORK, April 16, 2024 /PRNewswire/ — AdTheorent Holding Company, Inc. (Nasdaq: ADTH), a machine learning pioneer using privacy-forward solutions to deliver measurable value for programmatic advertisers, and Miles Partnership, a strategic marketing company focused exclusively on travel and tourism, today announced campaign results from the VISIT FLORIDA Sun Seekers digital advertising campaign. The campaign goal was to drive visitation to and purchases in Florida, as well as a positive return on ad spend (RoAS). Utilizing AdTheorent’s Destination Sales Lift 360, the campaign drove a 363% sales lift and $67M in incremental in-market sales and yielded an overall campaign RoAS of 513X.
The Approach: AdTheorent leveraged a mix of cross-device rich media display tactics, targeted using AdTheorent’s advanced predictive advertising platform. AdTheorent developed custom machine learning models fueled by non-individualized statistics to identify and reach consumers with the highest likelihood of visiting Florida and making purchases there.
During the campaign, AdTheorent’s custom predictive models considered hundreds of data signals to engage VISIT FLORIDA’S target audience, which included travel intenders residing in key geographies such as drive markets within 900 miles of the Florida border as well as competitive conquesting markets. AdTheorent’s custom predictive models considered data elements such as ad position, publisher, geo-intelligence, non-individualized user device attributes, location DMA, time of day, connection signal and many others. Additionally, the ML models analyzed real-time contextual signals to target consumers showing travel interest, as well as consumers specifically interested in travelling to alternative destinations. AdTheorent used transaction-based data to optimize campaign performance during the campaign, and, post-campaign, AdTheorent measured the impact of the campaign on sales within the destination, including attributed sales by merchant category (lodging, dining, etc.).
“VISIT FLORIDA is committed to not only driving visitation to Florida, but also showing the value of our marketing efforts and the impact they have on Florida’s tourism economy. Our digital advertising has to work harder for us by providing inspiration to visit and converting to sales,” said VISIT FLORIDA President and CEO Dana Young. “Our partnership with AdTheorent was successful at driving incremental visitation and commercial activity in Florida, measuring sales lift and resulting in an incredible return on ad spend for VISIT FLORIDA.”
The Results: The campaign was successful in identifying qualified consumers and driving purchases in Florida, resulting in:
$67M in incremental sales
363% sales lift compared to the control group
513X total campaign RoAS
Attributed incremental sales by top VISIT FLORIDA partner verticals included:
Restaurants and bars: 27%
Hotels: 17%
Food stores: 12%
Clothing stores: 8%
Interior furnishing stores: 5%
“Driving advanced business outcomes like incremental in-market sales is AdTheorent’s specialty; our machine learning-based media buying platform operates on a massive scale, evaluating millions of impressions per second based on 1000+ data attributes, identifying correlations among past conversions to optimize current ad targeting,” said James Lawson, CEO at AdTheorent. “We are thrilled to collaborate with Miles Partnership and proud that we drove meaningful incremental revenue for VISIT FLORIDA and its partners, delivering a 512.7X return on ad spend.”
About AdTheorent AdTheorent (Nasdaq: ADTH) uses advanced machine learning technology and privacy-forward solutions to deliver impactful advertising campaigns for marketers. AdTheorent’s machine learning-powered media buying platform powers its predictive targeting, predictive audiences, geo-intelligence, audience extension solutions and in-house creative capability, Studio A\T. Leveraging only non-sensitive data and focused on the predictive value of machine learning models, AdTheorent’s product suite and flexible transaction models allow advertisers to identify the most qualified potential consumers coupled with the optimal creative experience to deliver superior results, measured by each advertiser’s real-world business goals.
AdTheorent is consistently recognized with numerous technology, product, growth and workplace awards. AdTheorent was named “Best Buy-Side Programmatic Platform” in the 2023 Digiday Technology Awards and was honored with an AI Breakthrough Award and “Most Innovative Product” (B.I.G. Innovation Awards) for five consecutive years. Additionally, AdTheorent is the only seven-time recipient of Frost & Sullivan’s “Digital Advertising Leadership Award.” AdTheorent is headquartered in New York, with fourteen locations across the United States and Canada. For more information, visit adtheorent.com.
About Miles Partnership Miles Partnership is a strategic marketing consultancy focused exclusively on travel and tourism. The company works with more than 150 destinations, hospitality businesses and other travel industry clients worldwide to develop marketing and management strategies that amplify local experiences, boost visitation, improve community relations and increase overall economic impact. Learn more at www.MilesPartnership.com.
About VISIT FLORIDA VISIT FLORIDA, the state’s official tourism marketing corporation, serves as Florida’s official source for travel planning to visitors across the globe. VISIT FLORIDA is not a government agency, but rather a not-for-profit corporation created as a public/private partnership by the Florida Legislature in 1996.
Florida’s tourism industry was responsible for welcoming 122 million visitors in 2021, representing a 54 percent increase from 2020. In 2019, Florida visitors contributed $96.5 billion to Florida’s economy and supported over 1.6 million Florida jobs. According to the Office of Economic and Demographic Research, for every $1 the state invests in VISIT FLORIDA, $3.27 in state tax revenue is generated.
Each year, the Florida Legislature appropriates public funding to be allocated for tourism marketing. VISIT FLORIDA is required to match those public funds dollar-for-dollar, which is done by actively recruiting the state’s tourism industry to invest as Partners through cooperative advertising campaigns, promotional programs and many other marketing ventures. Through this public/private partnership, VISIT FLORIDA serves more than 13,000 tourism industry businesses, including major strategic alliance partnerships with Busch Gardens Tampa, Disney Destinations, Experience Kissimmee, Hilton, LEGOLAND Florida Resort, Publix Supermarkets, SeaWorld Parks & Resorts Orlando, and Universal Orlando Resort.
VISIT FLORIDA facilitates tourism industry participation in domestic and international travel trade and consumer shows, as well as media missions to the top global visitor markets. VISIT FLORIDA also works closely with travel agents, tour operators, meeting and event planners, and is responsible for operating Florida’s four Official Welcome Centers.
VISIT FLORIDA has 78 positions in Florida and an international team of contracted staff covering Canada, Germany, Latin America and the United Kingdom. VISIT FLORIDA’s corporate office is located at 101 North Monroe Street, Suite 900, Tallahassee, Florida 32301. The office can be reached at (850) 488-5607.
The technologies can help agencies and beneficiaries nationwide prevent EBT fraud targeting nutrition assistance and other cash-aid programs
FLORHAM PARK, N.J. — Conduent Incorporated (Nasdaq: CNDT), a global technology-led business solutions and services company, has implemented technologies for the South Carolina Department of Social Services (SCDSS) to help combat fraud and further enhance the security of the state’s Electronic Benefits Transfer (EBT) program. In South Carolina and other states, EBT fraud targeting the Supplemental Nutrition Assistance Program (SNAP) and other cash benefits adds costs to government agencies and causes challenges for the recipients who depend on these benefits.
“Our agency is continually working with Conduent to deploy new strategies and safeguards to prevent our clients from becoming fraud victims.”
The fraud-reducing technologies are part of a suite of tools Conduent offers that can assist agencies and beneficiaries nationwide in protecting government aid for nutrition assistance, unemployment insurance and other cash-aid programs.
“SNAP beneficiaries rely on benefits to help supplement their monthly food budget to feed their families. When these benefits are stolen from them through fraud, that can result in less food on a family’s dinner table and hungry homes,” said Michael Leach, SCDSS State Director. “Our agency is continually working with Conduent to deploy new strategies and safeguards to prevent our clients from becoming fraud victims.”
Last year, Conduent implemented an advanced interactive voice response (IVR) system technology for South Carolina’s EBT customer service center that automatically identifies suspicious phone call patterns, such as an unusually high number of calls from a single phone number. When threats are identified, the technology can prevent access to EBT account information in real time.
South Carolina has also made an account protection feature available to beneficiaries, allowing them to easily and quickly lock and unlock their benefits card using Conduent’s ConnectEBT mobile app and cardholder portal. This feature, which applies to both in-state and out-of-state purchases, provides cardholders more control and security in managing their accounts and helps prevent perpetrators from gaining access to their benefits. Other states including Iowa, Maryland, New York and Ohio have also implemented this ConnectEBT feature.
In addition, for South Carolina, Conduent implemented the ability for cardholders to receive and manage usage alerts for identifying suspicious transaction activity on their EBT accounts. This feature can help beneficiaries monitor, spot and report the suspicious activity in real-time.
SCDSS says it will never send clients a text message about locking a card and requiring a SNAP recipient to contact a 1-888 number and provide the client’s EBT card number to unlock the benefits. To report suspicious activity or SNAP fraud, the public is encouraged to make a report to the USDA Office of the Inspector General at 1-800-424-9121 or online here.
“We’re proud and excited to bring these enhanced benefit protection features to South Carolina as well as other states,” said Wade Fairey, General Manager, Payments and Child Support Solutions at Conduent. “We’re providing agencies with security tools and technologies that help ensure states can most effectively serve their EBT constituents. These features are designed to help states curb unauthorized access to accounts and ensure that funds go to the intended benefits recipients.”
About Conduent Conduent delivers digital business solutions and services spanning the commercial, government and transportation spectrum – creating valuable outcomes for its clients and the millions of people who count on them. The Company leverages cloud computing, artificial intelligence, machine learning, automation and advanced analytics to deliver mission-critical solutions. Through a dedicated global team of approximately 59,000 associates, process expertise and advanced technologies, Conduent’s solutions and services digitally transform its clients’ operations to enhance customer experiences, improve performance, increase efficiencies and reduce costs. Conduent adds momentum to its clients’ missions in many ways including disbursing approximately $100 billion in government payments annually, enabling 2.3 billion customer service interactions annually, empowering millions of employees through HR services every year and processing nearly 13 million tolling transactions every day. Learn more at www.conduent.com.
Trademarks Conduent is a trademark of Conduent Incorporated in the United States and/or other countries. Other names may be trademarks of their respective owners.
STAMFORD, Conn.–(BUSINESS WIRE)– Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, said today it will release its first-quarter financial results on Thursday, May 9, 2024, at approximately 4:15 p.m., U.S. Eastern Time.
The firm will host a conference call with investors and industry analysts at 9 a.m., U.S. Eastern Time, the following day, Friday, May 10. Dial-in details are as follows:
The dial-in number for U.S. participants is +1 (800) 715-9871.
International participants should call +1 (646) 307-1963.
The security code to access the call is 7294332.
Participants are requested to dial in at least five minutes before the scheduled start time.
A recording of the conference call will be accessible on ISG’s investor relations page for approximately four weeks following the call.
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including AI and automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.
Emerging Growth Public Consumer, Communications, Media, Technology (and more) Company Executive Presentations
Q&A Sessions Moderated by Noble’s Analysts and Bankers
Scheduled 1×1 Meetings with Qualified Investors
Noble Capital Markets, a full-service SEC / FINRA registered broker-dealer, dedicated exclusively to serving emerging growth companies, is pleased to present the Consumer, Communications, Media, and Technology Emerging Growth Virtual Equity Conference, taking place June 26th and 27th, 2024. This virtual gathering is set to be an immersive experience, bringing together a unique blend of investors, industry leaders, and experts in the consumer, communications, media, and technology sectors.
Part of Noble’s Robust 2024 Events Calendar
The Consumer, Communications, Media, and Technology Emerging Growth Virtual Equity Conference is part of Noble’s 2024 event programming, featuring a range of c-suite interviews, in-person non-deal roadshows throughout the United States, two other sector-specific virtual equity conferences, and culminating in Noble’s preeminent in-person investor conference, NobleCon20, to be held at Florida Atlantic University in Boca Raton, Florida December 3-4. Keep an eye out for the official press release on NobleCon20 coming soon.
The Consumer, Communications, Media, and Technology Emerging Growth Virtual Equity Conference will feature 2 days of corporate presentations from up to 50 innovative public consumer, communications, media, and technology companies, showcasing their latest advancements and investment opportunities. Each presentation will be followed by a fireside-style Q&A session proctored by one of Noble’s analysts or bankers, with questions taken from the audience during the presentation. Panel presentations are planned, featuring key opinion leaders in these sectors, providing valuable insights on emerging trends. Scheduled one-on-one meetings with public company executives, coordinated by Noble’s dedicated Investor Outreach team, are also available to qualified investors.
Why Your Company Should Present
Looking to increase awareness in your company and increase liquidity? Paid participation in Noble’s investor conferences, both virtual and in-person, provides that opportunity, with a tailored experience aimed at delivering substantial value. After 40 years of serving emerging growth companies, and the investors who follow them, Noble has built an investor base eager to discover where the next success story lies.
Noble’s investor base is relevant and, in many cases, new to your company. Noble’s dedicated Investor Outreach team provides unmatched exposure to investors that can invest in your company, including small money managers, family offices, RIAs, wealth managers, self-directed investors, and institutions. Most of Noble’s investors specifically seek undervalued, overlooked, emerging investment opportunities.
The cost to present includes your corporate presentation with a Q&A session proctored by one of Noble’s analysts or bankers, a webcast recording, scheduled 1×1 meetings with qualified investors, and marketing on Channelchek.
Benefits for Investors
Hear directly from the c-suite of the next innovators in consumer, communications, media, and technology and learn about new investment opportunities. The Q&A portion of each presentation gives you the opportunity to have your questions answered during or after the proctored session. The planned panel presentations are sure to provide expert insight on growing trends in the healthcare space. And, for qualified investors, one-on-one meetings are available with company executives; scheduled by Noble’s dedicated Investor Outreach team. All from the comfort of your own desk, and at no cost.
