CONDUENT Inc Q4 FY2025 earnings call

• Move faster: Faster decision making, execution, and improvement with senior leadership empowered. - Apply financial discipline: Evaluate decisions through revenue growth, margin expansion, and free cash flow. - Lower cost structure: Reduce corporate overhead and optimize technology spend. - Rationalize portfolio: Categorize businesses as fix, sell, or grow; actively market sale businesses and invest in grow businesses. - Improve conversion rates: Focus on converting qualified ACV plan into revenue. - Simplify organization: Become nimbler with fewer layers and clear accountability.

Commercial segment: Full year 2025 adjusted revenue was $1,500,000,000, down 5.9% from 2024. Adjusted EBITDA was $154,000,000 with a margin of 10.2%, down 30 basis points year over year. Government segment: Full year 2025 adjusted revenue was down 0.3% at $922,000,000. Adjusted EBITDA was $221,000,000 with a margin of 24%, up 270 basis points versus 2024. Transportation segment: Full year 2025 adjusted revenue was $69,000,000, an increase of 3.9%. Adjusted EBITDA was $18,000,000 with a margin of 3%, up 300 basis points versus 2024.

• Focus on consistent year-over-year revenue and EBITDA growth with strong free cash flow. - Qualified ACV pipeline stands at $3,200,000,000, up 4% year over year. - Expect a detailed update on 2026 guidance with Q1 financial results in early May.

• Potential disruption from AI and technology advancements, especially in the commercial segment. - Impact of large implementation projects on revenue and cash flow. - Risk of clients taking AI solutions in-house, affecting Conduent's business.

Q: About metrics for evaluating business units (fix, sell, grow) A: Multi-variable evaluation including sector growth, EBITDA margins, capital allocation, and free cash flow Q: On commercial segment go-to-market strategy A: Reshaping strategy, focusing on top clients, and weekly sales regimen Q: AI impact and margin sharing A: Partnering with AI disruptors, sharing savings with clients, and sector-specific partnerships Q: Portfolio divestiture and free cash flow A: Accelerating portfolio rationalization, focus on deleveraging, and expectation of positive free cash flow Q: Bond buybacks A: Considering bond buybacks vs. deleveraging based on market conditions