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Dec 31, 2020
Conduent Q4 2020 Earnings Report
Conduent's Q4 2020 financial results were announced, showcasing resilience amidst a challenging macro environment.
Key Takeaways
Conduent reported Q4 2020 revenue of $1,055 million, a 4.0% decrease year-over-year, but demonstrated strong sales performance with $519M in new business signings, a 148% increase over Q4 2019. The company's Adjusted EBITDA margin improved year-over-year, driven by business mix and efficient execution.
Revenue and Adjusted EBITDA margin were at the top-end of the initial 2020 outlook, despite COVID headwinds.
Adjusted EBITDA margin improved year-over-year due to business mix and efficient execution.
Adjusted Free Cash Flow conversion was above the top-end of initial guidance.
New business signings reached $519M, a 148% increase over Q4 2019.
Forward Guidance
Conduent provided its FY 2021 outlook, anticipating revenue between $4,000M - $4,150M and an Adjusted EBITDA margin between 11.0% - 11.5%. Adjusted Free Cash Flow is expected to be approximately 20% of Adjusted EBITDA.
Positive Outlook
- The guidance contemplates incremental benefit from anticipated legislation.
- Continued focus on growth, quality, and efficiency.
- Efficiency improvements positively impacting margins.
- Strong balance sheet at the end of 2020.
- Confidence in the 2021 game plan and progress in positioning the company for top line growth.
Challenges Ahead
- The guidance contemplates continued COVID pressure in the Commercial and Government businesses.
- Revenue is expected to be between $4,000M - $4,150M, which is lower than the FY 2020 actuals of $4,163M.
- Adjusted Free Cash Flow as a percentage of Adjusted EBITDA is expected to decrease from 30% to approximately 20%.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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