FLORHAM PARK, NJ, August 8, 2018 – Conduent (NYSE: CNDT), the world’s largest provider of diversified business services, today announced its second quarter 2018 financial results.
“We delivered another strong quarter with continued growth in operating margin and adjusted EBITDA, while investing in our digital interactions and platform-based offerings. We expanded our new business pipeline and have achieved a consistent revenue baseline that was flat year-over-year excluding strategic actions for the second quarter in a row. Our core remains on track to realize organic top-line growth by year-end,” said Ashok Vemuri, CEO of Conduent. “We completed the sale of our Commercial Vehicle Operations business and continue to make progress in streamlining our portfolio and strengthening our balance sheet. All of these actions position us well to achieve our financial and strategic long-term goals.”
Second Quarter 2018 Results
Second quarter 2018 revenues were $1,387 million, down 7.3% compared to Q2 2017. Adjusting for the impact of the 606 accounting standard and excluding divestitures completed in Q3 2017, revenues were down 3.3% compared with Q2 2017.
Pre-tax income was $54 million compared to $(11) million in Q2 2017. GAAP operating margin as reported was 3.9% compared to (0.7)% in Q2 2017. The company reported Q2 2018 GAAP net income of $11 million compared with $(4) million in Q2 2017. Diluted EPS from continuing operations was $0.04 versus ($0.03) in the same period last year, driven primarily by gains on divestitures and lower restructuring costs.
Second quarter adjusted operating income was $109 million, with an adjusted operating margin of 7.9% as compared to adjusted operating income of $88 million, with an adjusted operating margin of 5.9% in Q2 2017. Adjusted EBITDA improved 5.7% to $166 million, with an adjusted EBITDA margin of 12.0%, as compared to $157 million, with an adjusted EBITDA margin of 10.5% in Q2 2017. Adjusting for the impact of the 606 accounting standard and excluding divestitures completed in Q3 2017, Adjusted EBITDA improved 8.5% compared with Q2 2017. The company reported adjusted diluted EPS from continuing operations of $0.29 compared to $0.16 in Q2 2017.
Conduent generated $98 million in cash flow from operations during the second quarter 2018 and ended the quarter with a cash balance of $993 million. Total debt was $2,044 million as of June 30, 2018.
Excluding funds that are associated with the termination of the deferred compensation plan that are expected to be disbursed to participants in 2018, Conduent ended the quarter with an adjusted cash balance of $903 million.
The Company repriced its Term Loans and Revolving Credit Facility during the quarter.
In addition, on June 24, 2018, the Company announced a tender offer for its 10.5% Senior Notes due 2024. On July 27, 2018, the Company closed the tender offer for ~$476 million or 93.3% of the Senior Notes.
Headcount of approximately 84,000 as of June 30, 2018 compared with approximately 90,000 as of December 31, 2017.
Total contract value (TCV) signings of $1,947 million for the quarter were up 56.5% compared with Q2 2017, impacted by greater renewal signings primarily with technology, government and transportation clients.
Latest posts by News (see all)
- SAP.iO No Boundaries to Fund and Incubate Over 200 Startups Led by Women and Minorities - January 21, 2019
- Creating IT Futures Doubles Free IT Training and Career Program for Adults - January 17, 2019
- Ingram Micro Expands Onsite Service Availability - January 17, 2019