Tag: Technology

Release – SelectQuote, Inc. Reports Third Quarter 2024 Results

Posted on by aweinsoff@channelchek.com

Research News and Market Data on SLQT

05/09/2024

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Third Quarter of Fiscal Year 2024 – Consolidated Earnings Highlights

  • Revenue of $376.4 million
  • Net income of $8.6 million
  • Adjusted EBITDA* of $46.6 million

Raising Fiscal Year 2024 Guidance Ranges:

  • Revenue expected in a range of $1.25 billion to $1.3 billion vs prior range of $1.23 billion to $1.3 billion
  • Net loss expected in a range of $34 million to $21 million vs prior range of $45 million to $22 million
  • Adjusted EBITDA* expected in a range of $100 million to $110 million vs prior range of $90 million to $105 million

Third Quarter of Fiscal Year 2024 – Segment Highlights

Senior

  • Revenue of $204.3 million
  • Adjusted EBITDA* of $61.5 million
  • Approved Medicare Advantage policies of 185,716

Healthcare Services

  • Revenue of $124.2 million
  • Adjusted EBITDA* of $1.6 million
  • Over 75,000 SelectRx members

Life

  • Revenue of $40.7 million
  • Adjusted EBITDA* of $3.1 million

Auto & Home

  • Revenue of $9.1 million
  • Adjusted EBITDA* of $3.6 million

OVERLAND PARK, Kan.–(BUSINESS WIRE)– SelectQuote, Inc. (NYSE: SLQT) reported consolidated revenue for the third quarter of fiscal year 2024 of $376.4 million, compared to consolidated revenue for the third quarter of fiscal year 2023 of $299.4 million. Consolidated net income for the third quarter of fiscal year 2024 was $8.6 million, compared to consolidated net income for the third quarter of fiscal year 2023 of $9.3 million. Finally, consolidated Adjusted EBITDA* for the third quarter of fiscal year 2024 was $46.6 million, compared to consolidated Adjusted EBITDA* for the third quarter of fiscal year 2023 of $44.0 million.

Chief Executive Officer Tim Danker commented, “SelectQuote outperformed our own expectations for the 9th consecutive quarter, and the company has never been better positioned to drive shareholder value. We firmly believe SelectQuote can amplify the strong operating results achieved over the past two years since our foundational strategic redesign.”

“Our Senior business completed another highly successful Medicare Advantage busy season in the quarter, which produced stable and attractive economics across both policy growth, LTV expansion, and operating efficiency. The segment’s core tenured agents helped over 185,000 Americans find the right Medicare Advantage policy and did so with strong overall cost per policy and efficient close rates, which drove a Senior Adjusted EBITDA margin above 30% in one of our highest open enrollment period (OEP) quarters for revenue in company history. The success in our Senior business also enhanced the continued expansion of our Healthcare Services business, which saw SelectRx grow by over 12,000 members, significantly exceeding our original outlook. Overall, our holistic healthcare platform created new customers at a highly efficient revenue to customer acquisition cost of over 4x, which will drive significant Adjusted EBITDA contribution as Healthcare Services continues to scale.”

Mr. Danker concluded, “The teams at SelectQuote and our leadership are energized about the successes experienced year-to-date. We have conviction that 2024 will prove to be an inflection point in our company’s history, and SelectQuote is poised to leverage our unique healthcare platform to drive attractive returns for our shareholders in the quarters and years ahead.”

Segment Results

We currently report on four segments: 1) Senior, 2) Healthcare Services, 3) Life, and 4) Auto & Home. The performance measures of the segments include total revenue, Adjusted EBITDA,* and Adjusted EBITDA Margin.* Costs of revenue, cost of goods sold-pharmacy revenue, marketing and advertising, selling, general, and administrative, and technical development operating expenses that are directly attributable to a segment are reported within the applicable segment. Indirect costs of revenue, marketing and advertising, selling, general, and administrative, and technical development operating expenses are allocated to each segment based on varying metrics such as headcount. Adjusted EBITDA is calculated as total revenue for the applicable segment less direct and allocated costs of revenue, cost of goods sold, marketing and advertising, technical development, and selling, general, and administrative operating costs and expenses, excluding depreciation and amortization expense; gain or loss on disposal of property, equipment, and software; share-based compensation expense; and non-recurring expenses such as severance payments and transaction costs.

Senior

Financial Results

The following table provides the financial results for the Senior segment for the periods presented:

 Three Months Ended March 31,   Nine Months Ended March 31,  
(in thousands)2024 2023 % Change 2024 2023 % Change
Revenue$204,259  $185,200  10% $541,705  $486,541  11%
Adjusted EBITDA* 61,494   59,166  4%  138,871   138,933  —%
Adjusted EBITDA Margin* 30%  32%    26%  29%  

Operating Metrics

Submitted Policies

Submitted policies are counted when an individual completes an application with our licensed agent and provides authorization to the agent to submit the application to the insurance carrier partner. The applicant may have additional actions to take before the application will be reviewed by the insurance carrier.

The following table shows the number of submitted policies for the periods presented:

 Three Months Ended March 31,   Nine Months Ended March 31,  
 2024 2023 % Change 2024 2023 % Change
Medicare Advantage226,692 196,372 15% 602,936 538,247 12%
Medicare Supplement650 675 (4)% 2,334 2,905 (20)%
Dental, Vision and Hearing16,588 21,175 (22)% 48,892 59,513 (18)%
Prescription Drug Plan665 416 60% 2,696 2,082 29%
Other774 1,864 (58)% 3,724 5,402 (31)%
Total245,369 220,502 11% 660,582 608,149 9%
*See “Non-GAAP Financial Measures” below.

Approved Policies

Approved policies represents the number of submitted policies that were approved by our insurance carrier partners for the identified product during the indicated period. Not all approved policies will go in force.

The following table shows the number of approved policies for the periods presented:

 Three Months Ended March 31,   Nine Months Ended March 31,  
 2024 2023 % Change 2024 2023 % Change
Medicare Advantage185,716 165,530 12% 517,973 467,540 11%
Medicare Supplement445 557 (20)% 1,578 2,184 (28)%
Dental, Vision and Hearing14,042 16,968 (17)% 41,474 47,940 (13)%
Prescription Drug Plan1,114 521 114% 2,684 1,794 50%
Other789 1,029 (23)% 2,834 3,932 (28)%
Total202,106 184,605 9% 566,543 523,390 8%

Lifetime Value of Commissions per Approved Policy

Lifetime value of commissions per approved policy represents commissions estimated to be collected over the estimated life of an approved policy based on multiple factors, including but not limited to, contracted commission rates, carrier mix and expected policy persistency with applied constraints. The lifetime value of commissions per approved policy is equal to the sum of the commission revenue due upon the initial sale of a policy, and when applicable, an estimate of future renewal commissions.

The following table shows the lifetime value of commissions per approved policy for the periods presented:

 Three Months Ended March 31,   Nine Months Ended March 31,  
(dollars per policy):2024 2023 % Change 2024 2023 % Change
Medicare Advantage$995 $965 3% $923  $888 4%
Medicare Supplement 1,271  871 46%  1,108   994 11%
Dental, Vision and Hearing 101  91 11%  100   95 5%
Prescription Drug Plan 237  194 22%  237   211 12%
Other 36  123 (71)%  (3)  100 (103)%

Healthcare Services

Financial Results

The following table provides the financial results for the Healthcare Services segment for the periods presented:

 Three Months Ended March 31,   Nine Months Ended March 31,  
(in thousands)2024 2023 % Change 2024 2023 % Change
Revenue$124,207  $70,725  76% $333,284  $169,270  97%
Adjusted EBITDA* 1,609   (3,366) 148%  6,911   (24,456) 128%
Adjusted EBITDA Margin* 1%  (5)%    2%  (14)%  
*See “Non-GAAP Financial Measures” below.

Operating Metrics

Total Members

The total number of SelectRx members represents the amount of customers to which an order has been shipped, as this is the primary key driver of revenue for Healthcare Services.

The following table shows the total number of SelectRx members for the date presented:

  March 31, 2024 March 31, 2023
Total SelectRx Members 75,074 44,993

Prescriptions Per Day

Prescriptions per day represents the total average prescriptions shipped per business day, as this is a primary key driver of revenue for Healthcare Services.

The following table shows the prescriptions shipped per day for the periods presented:

  Three Months Ended March 31, Nine Months Ended March 31,
  2024 2023 2024 2023
Prescriptions Per Day 20,216 11,737 17,582 9,753

Combined Senior and Healthcare Services – Consumer Per Unit Economics

The opportunity to leverage our existing database and distribution model to improve access to healthcare services for our consumers has created a need for us to review our key metrics related to our per unit economics. As we think about the revenue and expenses for Healthcare Services, we note that they are derived from the marketing acquisition costs associated with the sale of an MA or MS policy, some of which costs are allocated directly to Healthcare Services, and therefore determined that our per unit economics measure should include components from both Senior and Healthcare Services. See details of revenue and expense items included in the calculation below.

Combined Senior and Healthcare Services consumer per unit economics represents total MA and MS commissions; other product commissions; other revenues, including revenues from Healthcare Services; and operating expenses associated with Senior and Healthcare Services, each shown per number of approved MA and MS policies over a given time period. Management assesses the business on a per-unit basis to help ensure that the revenue opportunity associated with a successful policy sale is attractive relative to the marketing acquisition cost. Because not all acquired leads result in a successful policy sale, all per-policy metrics are based on approved policies, which is the measure that triggers revenue recognition.

The MA and MS commission per MA/MS policy represents the LTV for policies sold in the period. Other commission per MA/MS policy represents the LTV for other products sold in the period, including DVH prescription drug plan, and other products, which management views as additional commission revenue on our agents’ core function of MA/MS policy sales. Pharmacy revenue per MA/MS policy represents revenue from SelectRx, and other revenue per MA/MS policy represents revenue from Population Health, production bonuses, marketing development funds, lead generation revenue, and adjustments from the Company’s reassessment of its cohorts’ transaction prices. Total operating expenses per MA/MS policy represents all of the operating expenses within Senior and Healthcare Services. The revenue to customer acquisition cost (“CAC”) multiple represents total revenue as a multiple of total marketing acquisition costs, which represents the direct costs of acquiring leads. These costs are included in marketing and advertising expense within the total operating expenses per MA/MS policy.

The following table shows combined Senior and Healthcare Services consumer per unit economics for the periods presented. Based on the seasonality of Senior and the fluctuations between quarters, we believe that the most relevant view of per unit economics is on a rolling 12-month basis. All per MA/MS policy metrics below are based on the sum of approved MA/MS policies, as both products have similar commission profiles.

 Twelve Months Ended March 31,
(dollars per approved policy):2024 2023
Medicare Advantage and Medicare Supplement approved policies 630,013   586,238 
Medicare Advantage and Medicare Supplement commission per MA/MS policy$907  $886 
Other commission per MA/MS policy 10   15 
Pharmacy revenue per MA/MS policy 641   320 
Other revenue per MA/MS policy 126   66 
Total revenue per MA/MS policy 1,684   1,287 
Total operating expenses per MA/MS policy (1,425)  (1,167)
Adjusted EBITDA per MA/MS policy (1)$259  $120 
Adjusted EBITDA Margin per MA/MS policy (1) 15%  9%
Revenue/CAC multiple4.2X 3.5X
(1) These financial measures are not calculated in accordance with GAAP. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” in the Company’s Quarterly Report on Form 10-Q for information regarding our use of these non-GAAP financial measures and a reconciliation of such measures to their nearest comparable financial measures calculated and presented in accordance with GAAP.

Total revenue per MA/MS policy increased 31% for the twelve months ended March 31, 2024, compared to the twelve months ended March 31, 2023, primarily due to the increase in pharmacy revenue. Total operating expenses per MA/MS policy increased 22% for the twelve months ended March 31, 2024, compared to the twelve months ended March 31, 2023, primarily driven by increase in cost of goods sold-pharmacy revenue for SelectRx due to the growth of the business.

Life

Financial Results

The following table provides the financial results for the Life segment for the periods presented:

 Three Months Ended March 31,   Nine Months Ended March 31,  
(in thousands)2024 2023 % Change 2024 2023 % Change
Revenue$40,686  $36,950  10% $115,855  $107,780  7%
Adjusted EBITDA* 3,138   5,303  (41)%  12,945   16,371  (21)%
Adjusted EBITDA Margin* 8%  14%    11%  15%  

Operating Metrics

Life premium represents the total premium value for all policies that were approved by the relevant insurance carrier partner and for which the policy document was sent to the policyholder and payment information was received by the relevant insurance carrier partner during the indicated period. Because our commissions are earned based on a percentage of total premium, total premium volume for a given period is the key driver of revenue for our Life segment.

*See “Non-GAAP Financial Measures” below.

The following table shows term and final expense premiums for the periods presented:

 Three Months Ended March 31,   Nine Months Ended March 31,  
(in thousands)2024 2023 % Change 2024 2023 % Change
Term Premiums$16,788 $17,512 (4)% $52,376 $48,433 8%
Final Expense Premiums 23,724  19,308 23%  62,811  58,766 7%
Total$40,512 $36,820 10%  115,187  107,199 7%

Auto & Home

Financial Results

The following table provides the financial results for the Auto & Home segment for the periods presented:

 Three Months Ended March 31,   Nine Months Ended March 31,  
(in thousands)2024 2023 % Change 2024 2023 % Change
Revenue$9,134  $8,238  11% $28,649  $23,128  24%
Adjusted EBITDA* 3,609   2,591  39%  11,654   7,315  59%
Adjusted EBITDA Margin* 40%  31%    41%  32%  

Operating Metrics

Auto & Home premium represents the total premium value of all new policies that were approved by our insurance carrier partners during the indicated period. Because our commissions are earned based on a percentage of total premium, total premium volume for a given period is the key driver of revenue for our Auto & Home segment.

The following table shows premiums for the periods presented:

 Three Months Ended March 31,   Nine Months Ended March 31,  
(in thousands):2024 2023 % Change 2024 2023 % Change
Premiums$14,180 $12,828 11% $42,746 $36,456 17%

Amendment to Credit Agreement

On May 8, 2024, the Company and its lenders agreed to amend the Company’s credit agreement to extend the maturity date with respect to $683.8 million of extended term loans from February 15, 2025 to May 15, 2025. The amendment also provides for a minimum asset coverage ratio and minimum liquidity requirements for the extension period. Additional information regarding the amendment will be included in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2024.

Earnings Conference Call

SelectQuote, Inc. will host a conference call with the investment community today, Thursday, May 9, 2024, beginning at 9:00 a.m. ET. To register for this conference call, please use this link: https://www.netroadshow.com/events/login?show=2a79382d&confId=63927. After registering, a confirmation will be sent via email, including dial-in details and unique conference call codes for entry. Registration is open through the live call, but to ensure you are connected for the full call we suggest registering at least 10 minutes before the start of the call. The event will also be webcasted live via our investor relations website https://ir.selectquote.com/investor-home/default.aspx.

*See “Non-GAAP Financial Measures” below.

Non-GAAP Financial Measures

This release includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. To supplement our financial statements presented in accordance with GAAP and to provide investors with additional information regarding our GAAP financial results, we have presented in this release Adjusted EBITDA and Adjusted EBITDA Margin, which are non-GAAP financial measures. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies. We define Adjusted EBITDA as income (loss) before interest expense, income tax expense (benefit), depreciation and amortization, and certain add-backs for non-cash or non-recurring expenses, including restructuring and share-based compensation expenses. The most directly comparable GAAP measure is net income (loss). We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue. The most directly comparable GAAP measure is net income margin. We monitor and have presented in this release Adjusted EBITDA and Adjusted EBITDA Margin because they are key measures used by our management and Board of Directors to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business. In particular, we believe that excluding the impact of these expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core operating performance.

We believe that these non-GAAP financial measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in the calculations of these non-GAAP financial measures. Accordingly, we believe these financial measures provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects. Reconciliations of the differences between the non-GAAP financial measures included herein and their most directly comparable GAAP financial measures are set forth below beginning on page 12.

Forward Looking Statements

This release contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates, and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following: the impacts of the COVID-19 pandemic and any other public health events, our reliance on a limited number of insurance carrier partners and any potential termination of those relationships or failure to develop new relationships; existing and future laws and regulations affecting the health insurance market; changes in health insurance products offered by our insurance carrier partners and the health insurance market generally; insurance carriers offering products and services directly to consumers; changes to commissions paid by insurance carriers and underwriting practices; competition with brokers, including exclusively online brokers and carriers who opt to sell policies directly to consumers; competition from government-run health insurance exchanges; developments in the U.S. health insurance system; our dependence on revenue from carriers in our senior segment and downturns in the senior health as well as life, automotive and home insurance industries; our ability to develop new offerings and penetrate new vertical markets; risks from third-party products; failure to enroll individuals during the Medicare annual enrollment period; our ability to attract, integrate and retain qualified personnel; our dependence on lead providers and ability to compete for leads; failure to obtain and/or convert sales leads to actual sales of insurance policies; access to data from consumers and insurance carriers; accuracy of information provided from and to consumers during the insurance shopping process; cost-effective advertisement through internet search engines; ability to contact consumers and market products by telephone; global economic conditions, including inflation; disruption to operations as a result of future acquisitions; significant estimates and assumptions in the preparation of our financial statements; impairment of goodwill; potential litigation and other legal proceedings or inquiries; our existing and future indebtedness; our ability to maintain compliance with our debt covenants and meet our scheduled repayment obligations under our debt arrangements; our ability to access additional capital on acceptable terms; failure to protect our intellectual property and our brand; fluctuations in our financial results caused by seasonality; accuracy and timeliness of commissions reports from insurance carriers; timing of insurance carriers’ approval and payment practices; factors that impact our estimate of the constrained lifetime value of commissions per policyholder; changes in accounting rules, tax legislation and other legislation; disruptions or failures of our technological infrastructure and platform; failure to maintain relationships with third-party service providers; cybersecurity breaches or other attacks involving our systems or those of our insurance carrier partners or third-party service providers; our ability to protect consumer information and other data; failure to market and sell Medicare plans effectively or in compliance with laws; and other factors related to our pharmacy business, including manufacturing or supply chain disruptions, access to and demand for prescription drugs, and regulatory changes or other industry developments that may affect our pharmacy operations. For a further discussion of these and other risk factors that could impact our future results and performance, see the section entitled “Risk Factors” in the most recent Annual Report on Form 10-K and subsequent periodic reports filed by us with the Securities and Exchange Commission. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as otherwise required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

About SelectQuote:

Founded in 1985, SelectQuote (NYSE: SLQT) provides solutions that help consumers protect their most valuable assets: their families, health, and property. The company pioneered the model of providing unbiased comparisons from multiple, highly-rated insurance companies allowing consumers to choose the policy and terms that best meet their unique needs. Two foundational pillars underpin SelectQuote’s success: a strong force of highly-trained and skilled agents who provide a consultative needs analysis for every consumer, and proprietary technology that sources and routes high-quality leads.

With an ecosystem offering high touchpoints for consumers across insurance, medicare, pharmacy, and value-based care, the company now has four core business lines: SelectQuote Senior, SelectQuote Healthcare Services, SelectQuote Life, and SelectQuote Auto and Home. SelectQuote Senior serves the needs of a demographic that sees around 10,000 people turn 65 each day with a range of Medicare Advantage and Medicare Supplement plans. SelectQuote Healthcare Services is comprised of the SelectRx Pharmacy, a Patient-Centered Pharmacy Home™ (PCPH) accredited pharmacy, and Population Health, which proactively connects consumers with a wide breadth of healthcare services supporting their needs..

 
SELECTQUOTE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands)
 
 March 31, 2024 June 30, 2023
ASSETS   
CURRENT ASSETS:   
Cash and cash equivalents$37,808  $83,156 
Accounts receivable, net of allowances of $6.5 million and $2.7 million, respectively 253,083   154,565 
Commissions receivable-current 69,165   111,148 
Other current assets 24,115   14,355 
Total current assets 384,171   363,224 
COMMISSIONS RECEIVABLE—Net 763,958   729,350 
PROPERTY AND EQUIPMENT—Net 22,536   27,452 
SOFTWARE—Net 13,952   14,740 
OPERATING LEASE RIGHT-OF-USE ASSETS 19,341   23,563 
INTANGIBLE ASSETS—Net 7,926   10,200 
GOODWILL 29,136   29,136 
OTHER ASSETS 4,119   21,586 
TOTAL ASSETS$1,245,139  $1,219,251 
    
LIABILITIES AND SHAREHOLDERS’ EQUITY   
CURRENT LIABILITIES:   
Accounts payable$61,168  $27,577 
Accrued expenses 21,058   16,993 
Accrued compensation and benefits 57,483   49,966 
Operating lease liabilities—current 4,663   5,175 
Current portion of long-term debt 37,717   33,883 
Contract liabilities 3,655   1,691 
Other current liabilities 4,227   1,972 
Total current liabilities 189,971  137,257 
LONG-TERM DEBT, NET—less current portion 648,331   664,625 
DEFERRED INCOME TAXES 35,057   39,581 
OPERATING LEASE LIABILITIES 22,326   27,892 
OTHER LIABILITIES 2,649   2,926 
Total liabilities 898,334   872,281 
    
COMMITMENTS AND CONTINGENCIES   
    
SHAREHOLDERS’ EQUITY:   
Common stock, $0.01 par value 1,692   1,669 
Additional paid-in capital 577,389   567,266 
Accumulated deficit (238,752)  (235,644)
Accumulated other comprehensive income 6,476   13,679 
Total shareholders’ equity 346,805   346,970 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,245,139  $1,219,251 
SELECTQUOTE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) (In thousands)
 
 Three Months Ended March 31, Nine Months Ended March 31,
 2024 2023 2024 2023
REVENUE:       
Commission$230,763  $197,258  $611,744   533,627 
Pharmacy 120,282   66,948   323,865   159,641 
Other 25,355   35,192   78,958   87,802 
Total revenue 376,400   299,398   1,014,567   781,070 
        
OPERATING COSTS AND EXPENSES:       
Cost of revenue 84,315   79,186   254,250   235,827 
Cost of goods sold—pharmacy revenue 106,172   62,302   284,360   154,753 
Marketing and advertising 109,276   90,205   288,676   237,724 
Selling, general, and administrative 34,971   27,544   97,049   86,662 
Technical development 8,604   6,434   24,291   18,860 
Total operating costs and expenses 343,338   265,671   948,626   733,826 
        
INCOME FROM OPERATIONS 33,062   33,727   65,941   47,244 
        
INTEREST EXPENSE, NET (24,330)  (21,105)  (70,141)  (58,885)
OTHER INCOME (EXPENSE,) NET (12)  (206)  (51)  (118)
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) 8,720   12,416   (4,251)  (11,759)
INCOME TAX EXPENSE (BENEFIT) 169   3,152   (1,143)  (1,053)
        
NET INCOME (LOSS)$8,551  $9,264  $(3,108)  (10,706)
        
NET INCOME (LOSS) PER SHARE:       
Basic$0.05  $0.06  $(0.02) $(0.06)
Diluted$0.05  $0.06  $(0.02) $(0.06)
        
WEIGHTED-AVERAGE COMMON STOCK OUTSTANDING USED IN PER SHARE AMOUNTS:       
Basic 169,070   166,543   168,291   165,951 
Diluted 170,956   167,905   168,291   165,951 
        
OTHER COMPREHENSIVE INCOME (LOSS) NET OF TAX:       
Gain (loss) on cash flow hedge (1,771)  (2,661)  (7,203)  1,358 
OTHER COMPREHENSIVE INCOME (LOSS) (1,771)  (2,661)  (7,203)  1,358 
COMPREHENSIVE INCOME (LOSS)$6,780  $6,603  $(10,311) $(9,348)
SELECTQUOTE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
 
 Nine Months Ended March 31,
 2024 2023
CASH FLOWS FROM OPERATING ACTIVITIES:   
Net loss$(3,108) $(10,706)
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:   
Depreciation and amortization 18,591   21,087 
Loss on disposal of property, equipment, and software 13   390 
Share-based compensation expense 10,512   8,525 
Deferred income taxes (2,151)  (1,416)
Amortization of debt issuance costs and debt discount 4,863   6,250 
Write-off of debt issuance costs 293   710 
Accrued interest payable in kind 14,323   8,450 
Non-cash lease expense 1,945   3,115 
Changes in operating assets and liabilities:   
Accounts receivable, net (98,519)  (62,738)
Commissions receivable 7,375   17,092 
Other assets (2,620)  3,166 
Accounts payable and accrued expenses 36,073   6,440 
Operating lease liabilities (3,802)  (4,331)
Other liabilities 11,453   (8,869)
Net cash used in operating activities (4,759)  (12,835)
CASH FLOWS FROM INVESTING ACTIVITIES:   
Purchases of property and equipment (3,114)  (1,056)
Proceeds from sales of property and equipment 253   — 
Purchases of software and capitalized software development costs (6,065)  (5,804)
Net cash used in investing activities (8,926)  (6,860)
CASH FLOWS FROM FINANCING ACTIVITIES:   
Payments on Term Loans (30,412)  (17,833)
Payments on other debt (112)  (123)
Proceeds from common stock options exercised and employee stock purchase plan 8   1,187 
Payments of tax withholdings related to net share settlement of equity awards (374)  (40)
Payments of debt issuance costs (773)  (10,110)
Payment of acquisition holdback —   (2,335)
Net cash used in financing activities (31,663)  (29,254)
NET DECREASE IN CASH AND CASH EQUIVALENTS (45,348)  (48,949)
CASH AND CASH EQUIVALENTS—Beginning of period 83,156   140,997 
CASH AND CASH EQUIVALENTS—End of period$37,808  $92,048 
SELECTQUOTE, INC. AND SUBSIDIARIES Net Income (Loss) to Adjusted EBITDA Reconciliation (Unaudited)
 
 Three Months Ended March 31, 2024
(in thousands)Senior Healthcare Services Life Auto & Home Corp & Elims Consolidated
Revenue$204,259  $124,207  $40,686  $9,134  $(1,886) $376,400 
Operating expenses (142,765)  (122,598)  (37,548)  (5,524)  (21,355)  (329,790)
Other income (expense), net —   —   —   (1)  (11)  (12)
Adjusted EBITDA$61,494  $1,609  $3,138  $3,609  $(23,252) $46,598 
Share-based compensation expense           (3,515)
Transaction costs           (3,325)
Depreciation and amortization           (6,704)
Loss on disposal of property, equipment, and software           (4)
Interest expense, net           (24,330)
Income tax expense           (169)
Net income          $8,551 
 Three Months Ended March 31, 2023
(in thousands)Senior Healthcare Services Life Auto & Home Corp & Elims Consolidated
Revenue$185,200  $70,725  $36,950  $8,238  $(1,715) $299,398 
Operating expenses (126,034)  (74,091)  (31,446)  (5,648)  (17,947)  (255,166)
Other income (expense), net —   —   (201)  1   (6)  (206)
Adjusted EBITDA$59,166  $(3,366) $5,303  $2,591  $(19,668) $44,026 
Share-based compensation expense           (2,959)
Transaction costs           (433)
Depreciation and amortization           (7,098)
Loss on disposal of property, equipment, and software           (15)
Interest expense, net           (21,105)
Income tax expense           (3,152)
Net income          $9,264 
 Nine Months Ended March 31, 2024
(in thousands)Senior Healthcare Services Life Auto & Home Corp & Elims Consolidated
Revenue$541,705  $333,284  $115,855  $28,649  $(4,926) $1,014,567 
Operating expenses (402,834)  (326,373)  (102,910)  (16,994)  (62,770)  (911,881)
Other income (expense), net —   —   —   (1)  (50)  (51)
Adjusted EBITDA$138,871  $6,911  $12,945  $11,654  $(67,746) $102,635 
Share-based compensation expense           (10,512)
Transaction costs           (7,629)
Depreciation and amortization           (18,591)
Loss on disposal of property, equipment, and software           (13)
Interest expense, net           (70,141)
Income tax benefit           1,143 
Net loss          $(3,108)
 Nine Months Ended March 31, 2023
(in thousands)Senior Healthcare Services Life Auto & Home Corp & Elims Consolidated
Revenue$486,541  $169,270  $107,780  $23,128  $(5,649) $781,070 
Operating expenses (347,608)  (193,726)  (91,409)  (15,812)  (52,270)  (700,825)
Other income (expense), net —   —   —   (1)  (117)  (118)
Adjusted EBITDA$138,933  $(24,456) $16,371  $7,315  $(58,036) $80,127 
Share-based compensation expense           (8,525)
Transaction costs           (3,003)
Depreciation and amortization           (21,087)
Loss on disposal of property, equipment, and software           (386)
Interest expense, net           (58,885)
Income tax benefit           1,053 
Net loss          $(10,706)
SELECTQUOTE, INC. AND SUBSIDIARIES Net Loss to Adjusted EBITDA Reconciliation (Unaudited) 
 
Guidance net loss to Adjusted EBITDA reconciliation, year ending June 30, 2024:
 
(in thousands)Range
Net loss$(34,000) $(21,000)
Income tax benefit (12,000)  (8,000)
Interest expense, net 96,000   94,000 
Depreciation and amortization 26,000   24,000 
Share-based compensation expense 14,000   13,000 
Non-recurring expenses 10,000   8,000 
Adjusted EBITDA$100,000  $110,000 

Investor Relations:

Sloan Bohlen

877-678-4083

investorrelations@selectquote.com

Media:

Matt Gunter

913-286-4931

matt.gunter@selectquote.com

Source: SelectQuote, Inc.

Release – GoHealth Reports First Quarter 2024 Results

Posted on by aweinsoff@channelchek.com

Research News and Market Data on GOCO

May 09, 2024 at 6:01 AM EDT

CHICAGO, May 09, 2024 (GLOBE NEWSWIRE) — GoHealth, Inc. (NASDAQ: GOCO) (“GoHealth” or the “Company”), a leading health insurance marketplace and Medicare-focused digital health company, today announced financial results for the three months ended March 31, 2024.

First Quarter Highlights

  • First quarter 2024 net revenues of $185.6 million, a slight increase compared to $183.2 million in the prior year period.
  • First quarter 2024 Submissions of 216,148, a 2,503 increase compared to 213,645 Submissions in the prior year period.
  • First quarter 2024 net loss of $21.3 million, an improvement of $1.2 million compared to $22.5 million in the prior year period.
  • First quarter 2024 Adjusted EBITDA(1) of $26.9 million, a decrease of $1.9 million compared to $28.8 million in the prior year period.
  • First quarter 2024 trailing twelve months (“TTM”) cash flow from operations was $101.2 million, compared to TTM cash flow from operations of $26.9 million in the prior year period.

Regulatory Updates

  • We are gaining insight into the Centers for Medicare and Medicaid Services (“CMS”) Final 2025 Marketing Rule and are confident that the CMS guidelines align with our Encompass model and our strategic plans.
  • Based on health plans’ reactions to the CMS Final 2025 Rate Notice we expect greater demand for the GoHealth personalized Encompass shopping and enrollment experience this fall.

“Our first quarter results exceeded our expectations and highlight our team’s ability to be innovative and resilient amongst market conditions. The proactive work we have done to drive consumer centricity has been instrumental in our ability to navigate the ever-evolving regulatory landscape. Our model is aligned with CMS’s intentions to protect consumers, and the work we have done has prepared us well for the current regulations and those likely to come,” said Vijay Kotte, CEO of GoHealth. “Looking ahead, we remain committed to leveraging our insights and technology to further improve the healthcare journey for consumers, ensuring they have the support they need to make informed decisions.”

“While we realize that rewarding agents for doing the right thing may not maximize revenue in the short term, we stand by our belief that PlanFit is an investment in the consumer that will pay off long-term,” said Jason Schulz, CFO of GoHealth. “This alignment of improved financial outcomes with our consumer-first philosophy supports our strategic direction. We remain committed to leveraging technology for better healthcare decisions, as we are poised to drive both sustained profitability and positive consumer impact in the years to come.

(1) Adjusted EBITDA is a non-GAAP measure. For a definition of Adjusted EBITDA and a reconciliation to the most comparable GAAP measure, please see below.

Conference Call Details

The Company will host a conference call today, Thursday, May 9, 2024 at 8:00 a.m. (ET) to discuss its financial results. Participants can pre-register for the conference call at the following link: https://register.vevent.com/register/BI3893cf432a644987bbaaed690971a174. A live audio webcast of the conference call will be available via GoHealth’s Investor Relations website, https://investors.gohealth.com/. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call.

About GoHealth, Inc.

GoHealth is a leading health insurance marketplace and Medicare-focused digital health company whose purpose is to compassionately ensure consumers’ peace of mind when making healthcare decisions so they can focus on living life. For many of these consumers, enrolling in a health insurance plan is confusing and difficult, and seemingly small differences between health plans may lead to significant out-of-pocket costs or lack of access to critical providers and medicines. GoHealth’s proprietary technology platform leverages modern machine-learning algorithms, powered by over two decades of insurance purchasing behavior, to reimagine the process of matching a health plan to a consumer’s specific needs. Its unbiased, technology-driven marketplace coupled with highly skilled licensed agents has facilitated the enrollment of millions of consumers in Medicare plans since GoHealth’s inception. For more information, visit https://www.gohealth.com.

Investor Relations:
John Shave
JShave@gohealth.com

Media Relations:
Pressinquiries@gohealth.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are made in reliance upon the safe harbor provision of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release may be forward-looking statements. Statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding our expected growth, future capital expenditures and debt service obligations, are forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “aims,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “likely,” “future” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this press release are only predictions, projections and other statements about future events that are based on current expectations and assumptions. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

These forward-looking statements speak only as of the date of this press release and are subject to a number of important factors that could cause actual results to differ materially from those in the forward-looking statements, including the factors described in the sections titled “Summary Risk Factors,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“2023 Annual Report on Form 10-K”) and in our other filings with the Securities and Exchange Commission. The factors described in our 2023 Annual Report on Form 10-K should not be construed as exhaustive and should be read together with the other cautionary statements included in this press release, as well as the cautionary statements and other risk factors set forth in the forthcoming Quarterly Report on Form 10-Q for the first quarter ended March 31, 2024 and our other filings with the Securities and Exchange Commission.

You should read this press release and the documents that we reference in this press release completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

To view full release, click here.

The Screen Time Debate: How Potential Regulations Could Impact Social Media Stocks

Posted on by slightbourne@noblecapitalmarkets.com

As concerns over excessive screen time’s effects on kids escalate, the debate around regulating underage social media usage is intensifying – with major investing implications. The recent Florida law restricting online activity for those under 14 is just the beginning of a broader regulatory reckoning that could fundamentally disrupt platforms’ business models.

At the heart of the issue is big tech’s reliance on attention-grabbing, addictive algorithms to maximize engagement and ad revenue. Social media giants like Meta (NASDAQ: META) that own Facebook, Instagram, and WhatsApp have been criticized for tactics some argue exploit youths’ developmental vulnerabilities for profit.

Multiple studies link excessive social media use to disrupted sleep, lower self-esteem, cyberbullying, depression and more in young users. The long-term impacts remain largely unknown. But public pressures are mounting for these companies to better safeguard kids’ wellbeing over relentless growth.

From an investing standpoint, implementing robust parental controls and age verification mechanisms won’t come cheap. Significant compliance costs from stricter age-based targeting rules could compress Meta and peers’ profit margins, at least temporarily. Their scale across billions of users also makes effective content moderation extremely challenging.

As the regulatory tide shifts with bipartisan support for reining in big tech, new rules seem inevitable. Major changes to restrict underage social media engagement could be highly disruptive for growth trajectories if companies are forced to sacrifice lucrative younger audiences.

Instituting stronger guardrails proactively may let incumbents get ahead of even harsher regulatory crackdowns down the road. But their interim earnings could certainly take a hit from product reinventions reprioritizing child safety over engagement-driven profits.

Analysts expect this youth social media regulation debate will be a hot topic at upcoming consumer and tech investor conferences. With both policymakers and the public increasingly scrutinizing potential harms to kids, social platforms face intensifying pressures.

Some investors view any guardrails on big tech’s ability to monetize younger demographics as an existential risk to business models predicated on constant user growth. For companies like Meta that have operated with minimal oversight, preparing for a future of tighter digital reins on underage users is now prudent risk management.

Conversely, those with a longer-term outlook see upcoming regulatory requirements as valuations repressing near-term earnings overshoots. Any share price dips from compliance costs could actually present compelling entry points. Responsible corporate reforms demonstrating a willingness to evolve with the times could bolster brand equity and customer loyalty over the long haul.

Ultimately, the rapidly evolving online landscape demands new frameworks beyond the antiquated Children’s Online Privacy Protection Act established in the Web 1.0 era. Whether through new federal legislation, FTC action, or a combination, transformative change is coming to minors’ social media experiences. Well-prepared companies insulating ethical practices into their models now could emerge as winners, while those digging in their heels may face an existential reckoning down the road.

Investors should make plans to attend events like Noble Capital Markets Consumer, Communications, Media & Technology Conference scheduled for June, to dive deeper into these critical issues shaping the future of the social media industry and the AI revolution. With potential regulatory bombshells looming, having an informed perspective will be key for constructing a winning investment thesis in this pivotal sector.

Release – Conduent Announces Agreement to Sell its Casualty Claims Solutions Business to MedRisk

Posted on by aweinsoff@channelchek.com

Research News and Market Data on CNDT

MAY 03, 2024

Transaction expected to close the third quarter of 2024

FLORHAM PARK, N.J. — Conduent Incorporated (Nasdaq: CNDT), a global technology-led business solutions and services company, today announced an agreement to sell its Casualty Claims Solutions business to MedRisk, the nation’s largest managed care organization dedicated to the physical rehabilitation of workers’ compensation patients.

The sale, for $240 million in cash, subject to customary adjustments, consists of Conduent’s workers’ compensation and auto casualty bill review solutions and services that includes the processing of medical bills and clinical services, and its portfolio of Strataware bill review software products. In 2023, the business, with approximately 100 clients across multiple markets, processed approximately 29 million medical bills.

As part of this transaction, current Conduent employees in the Casualty Claims Solutions business will join MedRisk. Conduent will continue to provide mailroom services for current casualty claims clients including MedRisk. The transaction is expected to close in the third quarter of 2024, subject to the satisfaction of customary closing conditions and regulatory approvals.

“This transaction is an additional example of the significant progress we have made in our strategy to streamline our portfolio while increasing our focus on core capabilities to fuel Conduent’s growth,” said Cliff Skelton, Conduent President and CEO. “MedRisk is well-established in the workers’ compensation industry, and we are confident in a seamless transition for our associates and clients.”

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 .

About MedRisk

Based in King of Prussia, Pennsylvania, MedRisk is the nation’s largest managed care organization dedicated to the physical rehabilitation of workers’ compensation patients. For more information, please visit www.medrisknet.com or call 800-225-9675.

Note: To receive RSS news feeds, visit www.news.conduent.com . For open commentary, industry perspectives and views, visit http://twitter.com/Conduent, http://www.linkedin.com/company/conduent or http://www.facebook.com/Conduent.

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.

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,” 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, all statements regarding the sale of Conduent’s Casualty Claims Solutions business, including that such transaction will be consummated and the timing of such consummation, expectations regarding our strategy to streamline our portfolio while increasing our focus on core capabilities to fuel Conduent’s growth, expectations regarding continued efforts to be strategic regarding the allocation of capital and any future portfolio rationalization efforts, and our confidence in a seamless transition for our associates and clients. 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 Casualty Claims Solutions business, including as a result of a delay or failure to obtain certain required regulatory approvals or the failure of any other condition to the closing of the transaction such that the closing of the transaction is delayed or does not occur; unexpected costs, liabilities or delays in connection with the proposed transaction; the significant transaction costs associated with the proposed 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 during the pendency of the proposed transaction 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.

Media Contacts

SEAN COLLINS

Conduent

Sean.Collins2@conduent.com

+1-310-497-9205

GILES GOODBURN

Conduent

ir@conduent.com

+1-203-216-3546

Apple’s $110B Buyback Bombshell Rocks Wall Street

Posted on by slightbourne@noblecapitalmarkets.com

In a blockbuster move that reverberated through Wall Street, Apple Inc. dropped a financial bomb by announcing the largest stock buyback in corporate history – a staggering $110 billion repurchase program. This unprecedented display of cash deployment immediately sparked a rally in Apple’s shares and sent shockwaves across the markets.

The tech juggernaut’s decision to pour over $110 billion into buying back its own shares eclipses the company’s previous buyback record set just five years ago and underscores the bounty of cash reserves being marshaled by big tech’s elite players. No other corporate giant has ever approached this level of buyback firepower.

The buyback goliath dwarfs the previous U.S. record held by Apple itself at $100 billion in 2018. It also tops other shareholder-friendly titans like ExxonMobil’s $50 billion repurchase plan and Meta’s $40 billion program announced in recent years.

For a company sitting on a $99 billion windfall of net cash, committing over $110 billion to buying back its own shares at depressed levels amounts to a hugely aggressive move by Apple. It signals management’s belief that the stock remains undervalued even after years of market-beating returns.

The buyback also serves as a counterweight to negative investor sentiment surrounding the broader tech sector’s correction over the past 18 months. Even Apple’s shares are down over 20% from their peak, despite the company’s market-leading profitability and growth runway.

By gobbling up over $110 billion of its own shares from the open market, Apple effectively transfers wealth from the company directly into the pockets of its remaining shareholders. This buyback will condense Apple’s share count and boost all-important earnings per share metrics in an accretive double-shot for shareholders.

It’s a power move squarely aimed at bolstering Apple’s premium valuation multiple at a pivotal juncture. While the iPhone posted soft sales, the company saw upside in categories like Macs and wearables. Yet Apple’s stock retrenched over 20% from peaks, providing the opening for this buyback blitz.

For investors, Apple’s unrivaled buyback barrage equates to the most high-conviction, shareholder-friendly signal a public company can send about its outlook. With over $110 billion committed to voraciously repurchasing its undervalued shares, Apple is doubling down on preserving its premium multiple despite the iPhone’s maturity cycle.

The buyback also raises the stakes for other cash-bloated tech and industrial titans evaluating ways to enhance shareholder value. If any company matches Apple’s sheer spending magnitude, the reverberations could be felt across indexes and actively-managed funds.

While Apple’s buyback frenzy amplifies its financial fortitude, it also showcases a lack of more fertile reinvestment opportunities within its core businesses. Sustained low interest rates have motivated corporations to increasingly funnel excess profits into buybacks rather than infrastructure or acquisitions.

Still, Apple’s move speaks volumes – reinforcing its status as the world’s preeminent cash flow machine unrivaled in capital return abilities. Whether this historic deployment marks a supernova acceleration or the peak of Apple’s financial engineering mastery remains to be seen.

For investors, one thing is certain – Apple’s $110 billion buyback barrage is the ultimate shock and awe market event of 2024 thus far. They better buckle up as this could merely be the opening salvo in an escalating buyback arms race by corporate titans aimed at bolstering their Silicon Valley supremacy.

Release – ISG Earns Gender Equality Certification

Posted on by dburczyk@noblecapitalmarkets.com

Research News and Market Data on III

ISG Italy recognized by Bureau Veritas for meeting the gender equality guidelines set by Ente Italiano di Normazione (UNI)

STAMFORD, Conn.–(BUSINESS WIRE)– Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, today announced ISG Italia S.p.A has earned gender equality certification through Bureau Veritas, a world leader in audit and certification services.

The ISG business in Italy has supported the Italian public sector for more than a decade, including a framework contract with Consip, the Italian Public Administration’s central IT purchasing body, to provide governance services for various digital transformation initiatives as part of Italy’s “Three-Year Plan for Information Technology in the Public Administration.”

Bureau Veritas evaluated ISG Italy across six workplace functions―culture and strategy; governance; HR management processes; opportunities for growth and inclusion of women in business; gender pay equity and parental protection, and work-life balance―and determined the firm’s practices comply with the gender equality guidelines defined in the March 2022 UNI/PdR 125:2022 certification issued by UNI (Ente Italiano di Normazione), the Italian standardization body.

“We are delighted to earn this prestigious certification for our gender equality management approach, which aims to promote diversity and equal opportunity in the workplace,” said Michael P. Connors, Chairman and CEO, ISG. “ISG is strongly committed to overcoming the traditional obstacles to women’s success in the workplace, and to supporting fair and equitable workplaces for all.”

ISG established the ISG Women in Digital community in 2018 to provide a platform for exchanging practical advice and innovative ideas on diversity and advancement in the workplace. The community hosts the annual ISG Women in Digital Awards, a LinkedIn page, an ongoing ISG Digital Dish podcast series, and regular events for ISG employees and the greater IT and business services industry.

“ISG is committed to ensuring men and women receive fair wages and have the same opportunities for recruitment, career advancement and leadership,” said Julien Escribe, partner and managing director of ISG Italy. “By advancing our ISG culture of diversity, equity and inclusion and complying with laws and regulations that promote gender and wage equality and address gender-based violence, we believe we help uphold the fundamental values of our firm and of society.”

Bureau Veritas is accredited to certify organizations under the Italian Gender Equality Certification System. Gender equality certification is voluntary, available to companies of all sizes, and determined by the UNI/PdR 125:2022 guidelines and key performance indicators for gender equality within an organization.

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.

Source: Information Services Group, Inc.

Conduent Inc. (CNDT) – A Good Start on its Transitional Journey

Posted on by cpereira@noblefcm.com


Thursday, May 02, 2024

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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Release – Conduent Reports First Quarter 2024 Financial Results

Posted on by aweinsoff@channelchek.com

Research News and Market Data on CNDT

MAY 01, 2024

Key Q1 2024 Highlights

  • Revenue: $921M
  • Pre-tax Income: $127M
  • Adj. EBITDA Margin(1): 7.5%
  • New business signings ACV(2): $99M
  • Net ARR Activity Metric(2) (TTM): $17M

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 2024Q1 2023Current 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)$0.00n/m
Cash Flow from Operating Activities$(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 2023 ActualsFY 2024 Outlook(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.

CONDUENT INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except share data in thousands) March 31, 2024 December 31, 2023
Assets    
Cash and cash equivalents $415  $498 
Accounts receivable, net  600   559 
Assets held for sale  192   180 
Contract assets  166   178 
Other current assets  216   240 
Total current assets  1,589   1,655 
Land, buildings and equipment, net  186   197 
Operating lease right-of-use assets  188   191 
Intangible assets, net  31   32 
Goodwill  643   651 
Other long-term assets  421   436 
Total Assets $3,058  $3,162 
Liabilities and Equity    
Current portion of long-term debt $33  $34 
Accounts payable  167   174 
Accrued compensation and benefits costs  175   183 
Unearned income  94   91 
Liabilities held for sale  56   58 
Other current liabilities  324   328 
Total current liabilities  849   868 
Long-term debt  1,083   1,248 
Deferred taxes  43   30 
Operating lease liabilities  155   157 
Other long-term liabilities  81   84 
Total Liabilities  2,211   2,387 
     
Series A convertible preferred stock  142   142 
     
Common stock  2   2 
Treasury stock, at cost  (44)  (27)
Additional paid-in capital  3,941   3,938 
Retained earnings (deficit)  (2,752)  (2,849)
Accumulated other comprehensive loss  (446)  (435)
Total Conduent Inc. Equity  701   629 
Non-controlling Interest  4   4 
Total Equity  705   633 
Total Liabilities and Equity $3,058  $3,162 
     
Shares of common stock issued and outstanding  206,685   211,509 
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  (13)  (11)
Cost of additions to internal use software  (8)  (11)
Free Cash Flow $(58) $(34)
Free Cash Flow $(58) $(34)
Transaction costs  3   1 
Vendor finance lease payments  (5)  (4)
Adjusted Free Cash Flow $(60) $(37)

Media Contacts

SEAN COLLINS

Conduent

Sean.Collins2@conduent.com

+1-310-497-9205

GILES GOODBURN

Conduent

ir@conduent.com

+1-203-216-3546

Release – Conduent Completes Sale of its Curbside Management and Public Safety Businesses to Modaxo

Posted on by aweinsoff@channelchek.com

Research News and Market Data on CNDT

MAY 01, 2024

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 .

Note: To receive RSS news feeds, visit www.news.conduent.com. For open commentary, industry perspectives and views, visit http://twitter.com/Conduent, http://www.linkedin.com/company/conduent or http://www.facebook.com/Conduent.

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.

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.

Media Contacts

SEAN COLLINS

Conduent

Sean.Collins2@conduent.com

+1-310-497-9205

GILES GOODBURN

Conduent

ir@conduent.com

+1-203-216-3546

NEIL FRANZ

Conduent

neil.franz@conduent.com

+1-240-687-0127

Google Joins the $2 Trillion Club as AI Ambitions Pay Off

Posted on by slightbourne@noblecapitalmarkets.com

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.

Release – Conduent Collaborates with Microsoft on Generative AI to Drive Innovation in Business Process Solutions

Posted on by aweinsoff@channelchek.com

Research News and Market Data on CNDT

APRIL 29, 2024

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:

  1. Intelligent data harvesting from healthcare claims documents for faster adjudication by implementing Azure AI Document Intelligence and Azure OpenAI Service
  2. Increasing the volume and speed of fraud detection processing in payments by using Azure Data Factory and Azure OpenAI Service
  3. Improving customer service agent responsiveness by using Azure AI Language Service, Azure AI Speech Service and Azure OpenAI Service

With deep experience in robotic process automation (RPA) and other forms of automation, Conduent is well positioned to guide its clients in the use of this new technology and its eBook, “Generative AI: A measured approach to exploring opportunities that drive business process efficiency ,” offers actionable insights to streamline operations and foster growth through generative AI.

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 .

Note: To receive RSS news feeds, visit www.news.conduent.com . For open commentary, industry perspectives and views, visit http://twitter.com/Conduent , http://www.linkedin.com/company/conduent or http://www.facebook.com/Conduent .

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.

Media Contacts

SEAN COLLINS

Conduent

Sean.Collins2@conduent.com

+1-310-497-9205

GILES GOODBURN

Conduent

ir@conduent.com

+1-203-216-3546

Release – Conduent Implements I-64 Hampton Roads Express Lanes Tolling System for the Virginia Department of Transportation

Posted on by aweinsoff@channelchek.com

Research News and Market Data on CNDT

APRIL 25, 2024

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.

Note: To receive RSS news feeds, visit www.news.conduent.com . For open commentary, industry perspectives and views, visit http://twitter.com/Conduent, http://www.linkedin.com/company/conduent or http://www.facebook.com/Conduent.

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.

Media Contacts

NEIL FRANZ

Conduent

neil.franz@conduent.com

+1-240-687-0127

GILES GOODBURN

Conduent

ir@conduent.com

+1-203-216-3546

Release – ISG Expands Modern Slavery Advisory and Risk Management Service to Canada

Posted on by aweinsoff@channelchek.com

Research News and Market Data on III

4/22/2024

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.

Source: Information Services Group, Inc.