Conduent Inc (CNDT) 2022 Q4 法說會逐字稿

Greetings, and welcome to the Conduent Fourth Quarter 2022 Earnings Announcement. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎來到 Conduent 2022 年第四季度收益公告。 （操作員說明）提醒一下，正在錄製此會議。

I would now like to turn the conference over to your host, Giles Goodburn, Vice President of Investor Relations.

我現在想把會議轉交給你的主持人，投資者關係副總裁賈爾斯古德伯恩。

Thank you, operator, and thanks, everyone, for joining us today to discuss Conduent's Fourth Quarter and Full Year 2022 Earnings. We hope you had a chance to review our press release issued earlier this afternoon.

感謝運營商，感謝大家今天加入我們討論 Conduent 的第四季度和 2022 年全年收益。我們希望您有機會閱讀我們今天下午早些時候發布的新聞稿。

Joining me today is Cliff Skelton, our President and CEO; and Steve Wood, our CFO. Today's agenda is as follows. Cliff will provide an overview of our results and a business update. Steve will then walk you through the financials for the quarter and full year as well as providing a financial outlook. Cliff will then provide his closing comments.

今天加入我的是我們的總裁兼首席執行官 Cliff Skelton；和我們的首席財務官史蒂夫伍德。今天的議程如下。 Cliff 將概述我們的結果和業務更新。然後，史蒂夫將向您介紹本季度和全年的財務狀況，並提供財務展望。然後，Cliff 將發表他的結束語。

This call is being webcast, and a copy of the slides used during this call as well as the press release were filed with the SEC this afternoon on Form 8-K. This information as well as the detailed financial metrics package are available on the Investor Relations section of the Conduent website.

本次電話會議正在網絡直播中，本次電話會議中使用的幻燈片副本以及新聞稿已於今天下午通過 8-K 表格提交給美國證券交易委員會。此信息以及詳細的財務指標包可在 Conduent 網站的投資者關係部分獲得。

During this call, we may make statements that are forward-looking. These forward-looking statements reflect management's current beliefs, assumptions and expectations and are subject to a number of factors that may cause actual results to differ materially from those statements. Information concerning these factors is included in Conduent's annual report on Form 10-K filed with the SEC. We do not intend to update these forward-looking statements as a result of new information or future events or developments except as required by law.

在此次電話會議中，我們可能會發表前瞻性聲明。這些前瞻性陳述反映了管理層當前的信念、假設和預期，並受許多因素的影響，這些因素可能導致實際結果與這些陳述存在重大差異。有關這些因素的信息包含在 Conduent 向美國證券交易委員會提交的 10-K 表格年度報告中。除非法律要求，否則我們無意因新信息或未來事件或發展而更新這些前瞻性陳述。

The information presented today includes non-GAAP financial measures. Because these measures are not calculated in accordance with U.S. GAAP, they should be viewed in addition to and not as a substitute for the company's reported results. For more information regarding definitions of our non-GAAP measures, how we use them as well as the limitations to their usefulness for comparative purposes, please see our press release.

今天提供的信息包括非 GAAP 財務指標。由於這些措施不是根據美國公認會計原則計算的，因此應將它們視為公司報告結果的補充，而不是替代公司報告的結果。有關我們的非 GAAP 措施的定義、我們如何使用它們以及它們用於比較目的的限制的更多信息，請參閱我們的新聞稿。

And now I'd like to turn the call over to Cliff.

現在我想把電話轉給克里夫。

Thanks, Giles, and good afternoon, everyone. Thanks for joining Conduent's Q4 and Full Year 2022 Earnings Call. I'll make some high-level comments about the quarter, the year and 2023. In addition, I'll call out some exciting future opportunities as we, like others, slog through these somewhat uncertain times.

謝謝，吉爾斯，大家下午好。感謝您加入 Conduent 的第四季度和 2022 年全年收益電話會議。我將對本季度、這一年和 2023 年發表一些高層次的評論。此外，我會指出一些令人興奮的未來機會，因為我們和其他人一樣，艱難地度過了這些有些不確定的時期。

First, let me say that Q4 and full year revenue ended within the range of previous guidance, albeit on the low end, driven primarily by lower volume in our commercial business and some revenue implementation timing in our transportation business. EBITDA finished directly in line with our previous guidance, and margins also met expectations. Of particular interest is new business sales. The year finished strong, especially our government health care business, where we won 2 large state Medicaid contracts in Q4. Commercial customer experience also progressed nicely through the year. Generally speaking, sales continue to improve each year, and we just need to keep that rolling.

首先，我要說第四季度和全年收入在之前的指導範圍內結束，儘管處於低端，這主要是由於我們商業業務的銷量下降和我們運輸業務的一些收入實施時間。 EBITDA 直接符合我們之前的指引，利潤率也符合預期。特別感興趣的是新業務銷售。這一年表現強勁，尤其是我們的政府醫療保健業務，我們在第四季度贏得了 2 份大型州醫療補助合同。商業客戶體驗在這一年也取得了長足進步。一般來說，銷售額每年都在持續提高，我們只需要保持這種勢頭。

Now as I step back and debrief the year, I would say it's a tale of many cities with headwinds and tailwinds, perhaps more headwinds than tailwinds. Inflationary events tended to bring interest rate tailwinds in the P&L. However, some of those same inflation fighting trends create recession-like slowness to volumes, which impacted our commercial business. Meanwhile, foreign exchange rates, primarily in Europe, created some headwind for our transportation and commercial businesses. On the upside, we received a modest tailwind from the remnants of government stimulus through pandemic SNAP volumes.

現在當我退後一步並彙報這一年時，我會說這是一個關於許多城市都有逆風和順風的故事，也許逆風多於順風。通貨膨脹事件往往會在損益表中帶來利率順風。然而，其中一些相同的抗通脹趨勢造成了類似衰退的銷量放緩，這影響了我們的商業業務。與此同時，主要在歐洲的外匯匯率對我們的運輸和商業業務造成了一些不利影響。從好的方面來看，我們通過大流行的 SNAP 數量從政府刺激措施的殘餘中獲得了適度的推動力。

The blending of all that in a company with strong businesses and a large and strong client base brought us to the low end of our full year guidance. Our operational performance continued to improve in 2022 as well. Technology uptime is now a hallmark of success for us. However, having been a Chief Information Officer for 2 Fortune 500 companies, one never says we have arrived when it comes to technology or information security. But we can say that we've had a strong and concentrated effort around technology discipline and standards. In addition, operational process improvements has helped with readiness especially in our call center space and staffing.

在一家擁有強大業務和龐大而強大的客戶群的公司中，所有這些因素的結合使我們達到了全年指導的低端。我們的經營業績在 2022 年也繼續改善。技術正常運行時間現在是我們成功的標誌。然而，作為 2 家財富 500 強公司的首席信息官，在技術或信息安全方面從未說過我們已經到達。但我們可以說，我們在技術紀律和標準方面付出了巨大而集中的努力。此外，運營流程的改進有助於做好準備，尤其是在我們的呼叫中心空間和人員配備方面。

We worked hard in 2022 to ensure we operated with a culture of inclusion and fairness. Any company with 50-plus thousand production folks knows how important culture, values and leadership are for client retention. This all helps our associates to act as strong ambassadors for our clients in the treatment of their end customers. In that regard, we received recognition from General Motors, Toyota, H&R Block and several other top 50 companies for supplier excellence.

我們在 2022 年努力工作，以確保我們以包容和公平的文化運作。任何擁有 5 萬多名生產人員的公司都知道文化、價值觀和領導力對於留住客戶有多麼重要。這一切都有助於我們的員工在我們的客戶對待他們的最終客戶方面充當強有力的大使。在這方面，我們獲得了通用汽車、豐田、H&R Block 和其他幾家 50 強供應商的認可。

Regarding culture, we're proud to have been recognized by Newsweek as a Top 100 Most Loved Workplace as well as receiving several awards from others in recognition for diversity, disability inclusion, gender and thriving in a remote culture. Finally, we received industry leadership recognition especially in customer service by NelsonHall, Everest Group, Gartner and others.

在文化方面，我們很自豪能夠被《新聞周刊》評為最受歡迎的 100 家工作場所，並因多樣性、殘疾包容、性別和在偏遠文化中的繁榮而獲得其他人的多個獎項。最後，我們獲得了 NelsonHall、Everest Group、Gartner 等行業領導者的認可，尤其是在客戶服務方面。

That all said, more should always be expected when it comes to financial progress. 2023 brings with it a year where past our legacy performance-related losses finally run off and we return to more normalized loss rates as a percentage of revenue. At some level, it's just math. When onboarded sales ramp outpaces losses, all else being equal, you have growth.

總而言之，當涉及到財務進展時，總是應該期待更多。 2023 年帶來了一年，我們過去與業績相關的遺留損失終於消失了，我們回歸到更正常化的損失率佔收入的百分比。在某種程度上，這只是數學。當入職銷售增長超過損失時，在其他條件相同的情況下，您就會增長。

All else is equalizing for us in 2023, and it will be a transition into growth year. Every year since 2019, we made progress and decreased the year-over-year decline while fixing the foundation. That foundation phase is over. In 2023, 2 of our 3 businesses will grow, and our government sector will be poised for growth in 2024 after the runoff of 2 or 3 large state contracts lost due to legacy performance.

到 2023 年，其他一切都對我們有利，這將是向增長過渡的一年。 2019年以來，我們每年都在夯實基礎的同時取得進步，減少同比降幅。基礎階段結束了。到 2023 年，我們的 3 項業務中有 2 項將增長，而我們的政府部門將在 2 或 3 份大型國家合同因遺留績效而失去的決勝期之後準備在 2024 年實現增長。

Now Steve will discuss our net ARR numbers in his remarks. But as we've discussed in the past, assuming the baseline business remains steady, now of course, the economy can sway that assumption and did so in 2022, but with a steady baseline, if that net ARR number remains positive, over time, growth must manifest. And that number was positive again at $114 million, up quarter-over-quarter. As Steve will mention, all 3 of our sales metrics, net ARR or annual recurring revenue, annual contract value and total contract value, were up in Q4, which again is a positive sign once we finish outrunning stimulus and legacy losses.

現在史蒂夫將在他的評論中討論我們的淨 ARR 數字。但正如我們過去所討論的那樣，假設基線業務保持穩定，現在當然，經濟可以改變這一假設並在 2022 年這樣做，但如果基線穩定，如果淨 ARR 數字隨著時間的推移保持正數，增長必須體現出來。這個數字再次為正，達到 1.14 億美元，環比增長。正如史蒂夫將提到的那樣，我們的所有 3 個銷售指標，淨 ARR 或年度經常性收入，年度合同價值和合同總價值，在第四季度都有所上升，一旦我們完成超過刺激和遺留損失，這又是一個積極信號。

Regarding that government business, we are still quite optimistic. We won significant contracts in our state-of-the-art Medicaid claims platform, from what we can tell, the only platform in the industry built from the ground up as cloud-native. The government health care pipeline has never been stronger. Now we must implement with precision. Steve will go into more detail regarding government's performance and why, as we've now outrun the stimulus growover, we see blue skies ahead in the back half of the year.

對於政府業務，我們還是比較樂觀的。據我們所知，我們在最先進的醫療補助索賠平台上贏得了重要合同，這是業內唯一從頭開始構建的雲原生平台。政府醫療保健管道從未如此強大。現在我們必須精確實施。史蒂夫將更詳細地介紹政府的表現，以及為什麼我們現在已經超過了刺激增長，我們在今年下半年看到了藍天。

There are many reasons to be quite bullish on Conduent. It wasn't that long ago that we were worried about our commercial business. It declined modestly in 2022 and will grow in 2023. Transportation declined in 2022 and will grow in 2023. Government is the business requiring a little more explanation. Revenue declined 12% in 2022, driven by continued stimulus PSNAP growover and prior losses manifesting as I previously mentioned. However, the strong upside from new sales ramp will reverse that trend by the end of 2023.

有很多理由非常看好 Conduent。就在不久前，我們還擔心我們的商業業務。它在 2022 年略有下降，並將在 2023 年增長。交通運輸在 2022 年下降，並將在 2023 年增長。政府是需要更多解釋的行業。 2022 年的收入下降了 12%，這是由於 PSNAP 的持續刺激增長和我之前提到的先前虧損的推動。然而，到 2023 年底，新銷售量的強勁增長將扭轉這一趨勢。

We also have geographies and entrees into new client opportunities generated by a business development effort new to Conduent. We rolled out a new, one-of-a-kind digital payments hub in partnership with BNY Mellon that will enable real-time bill payments to governments and businesses, real-time disbursements for disaster relief and reimbursements and client to vendor payments providing cost reduction benefits to clients. We're beginning to integrate these capabilities into our current offering sets, and we are seeing traction in sales. For payments, we definitely see real opportunity in our current client base as well.

我們也有地域和進入新的客戶機會，這些機會是由 Conduent 的新業務開發工作產生的。我們與 BNY Mellon 合作推出了一個全新的、獨一無二的數字支付中心，該中心將支持向政府和企業實時支付賬單、實時支付救災和報銷費用以及客戶向供應商支付費用減少對客戶的好處。我們開始將這些功能整合到我們當前的產品組合中，並且我們看到了銷售上的牽引力。對於支付，我們肯定也在我們當前的客戶群中看到了真正的機會。

Finally, we're in the middle of planning our investor event for the last part of March. We intend to show the 3-year growth trajectory for the company. We think there are acceleration opportunities as well centered on portfolio rationalization, unique investments and go-to-market opportunities that could enhance our posture even further with investors.

最後，我們正在計劃 3 月下旬的投資者活動。我們打算展示公司 3 年的增長軌跡。我們認為存在以投資組合合理化、獨特投資和上市機會為中心的加速機會，可以進一步增強我們與投資者的關係。

Steve will now take you through more details around the quarter 2022 and 2023, but the bottom line message is we did what we said we'd do in 2022. We'll do the same in 2023. Once our government business gets through the last bit of 2023 headwind and reach the rewards of the strong market and sales efforts, we'll experience the overall growth rates we've been waiting for. As always, we appreciate the patience from our investors, the confidence from our clients and the perseverance and hard work from our team.

史蒂夫現在將向您介紹 2022 年和 2023 年季度左右的更多細節，但最重要的信息是，我們按照我們所說的在 2022 年做了。我們將在 2023 年做同樣的事情。一旦我們的政府業務完成最後一個2023 年的逆風並獲得強勁的市場和銷售努力的回報，我們將體驗到我們一直在等待的整體增長率。一如既往，我們感謝投資者的耐心、客戶的信心以及我們團隊的毅力和努力。

I'll now hand it over to our CFO. Steve?

我現在將其交給我們的首席財務官。史蒂夫？

Thanks, Cliff. As we have done in the past, we are reporting both GAAP and non-GAAP numbers. The reconciliations are in our filings and in the appendix of the presentation. Let's turn to Slide 5 and discuss our key sales metrics.

謝謝，克里夫。正如我們過去所做的那樣，我們同時報告了 GAAP 和非 GAAP 數據。對賬在我們的文件和演示文稿的附錄中。讓我們轉到幻燈片 5 並討論我們的關鍵銷售指標。

Our primary sales metric, ACV, grew 22% in the quarter versus the prior year to $194 million. It has also been up sequentially for the past 5 quarters. For the full year 2022, ACV also grew approximately 17%, ignoring the impact of the prior year government stimulus revenues, which, as we have said before, are nonrecurring and we saw the tail end of them in 2022. New business TCV was very strong in the quarter, growing 132% as compared to Q4 2021. More importantly, again, ignoring the impacts of government stimulus, it was up approximately 18% on a full year basis.

我們的主要銷售指標 ACV 在本季度比上年增長 22% 至 1.94 億美元。在過去的 5 個季度中，它也連續上升。對於 2022 年全年，ACV 也增長了約 17%，忽略了上一年政府刺激收入的影響，正如我們之前所說，這些收入是非經常性的，我們在 2022 年看到了它們的尾聲。新業務 TCV 非常本季度表現強勁，與 2021 年第四季度相比增長 132%。更重要的是，再次忽略政府刺激措施的影響，全年增長約 18%。

Double-clicking on some of the detail here. The main driver of these year-over-year increases, as Cliff mentioned, was a very strong finish to the year in our Government segment, including 2 significant wins for our modular cloud-native Conduent Medicaid suite; and another for our state disbursement programs, which benefit low-income families. The combination of these 3 deals contributed in excess of $400 million in TCV and will drive strong implementation revenues in 2023 and 2024 with follow-on operations and maintenance revenues at the conclusion of the implementations. We said in prior quarters that we have a strong pipeline of late-stage government health care deals, and the business had a very strong sales finish to 2022. Our pipeline remains strong in this area.

雙擊此處的一些細節。正如 Cliff 所提到的，這些同比增長的主要驅動力是我們政府部門今年的強勁表現，包括我們的模塊化雲原生 Conduent Medicaid 套件的兩項重大勝利；另一個是我們的州撥款計劃，該計劃使低收入家庭受益。這 3 筆交易的總和貢獻了超過 4 億美元的 TCV，並將在 2023 年和 2024 年推動強勁的實施收入，並在實施結束時帶來後續運營和維護收入。我們在前幾個季度表示，我們有大量後期政府醫療保健交易，並且該業務到 2022 年的銷售業績非常強勁。我們在這一領域的銷售渠道依然強勁。

This year-end performance in government drove their ACV up 36% as compared to 2021. In addition to this, the Commercial segment ACV was up 14% as compared to 2021 but had a slower finish to the year. Transportation ACV was up 5% year-over-year as compared to 2021. New business ARR, the recurring component of our sales, was essentially flat both quarter-over-quarter and year-over-year. The net ARR activity metric, our combined measure of wins, losses, pricing effects and other contractual changes, has continued to remain positive. As a reminder, this trailing 12-month measure does not predict the timing of revenue but is based on the timing of notification. A full definition of this metric is covered in the appendix of our presentation.

與 2021 年相比，今年年底政府部門的表現推動其 ACV 增長了 36%。除此之外，商業部門的 ACV 與 2021 年相比增長了 14%，但今年的收尾速度有所放緩。與 2021 年相比，運輸 ACV 同比增長 5%。新業務 ARR 是我們銷售額的經常性組成部分，環比和同比基本持平。淨 ARR 活動指標，即我們對贏利、虧損、定價影響和其他合同變化的綜合衡量標準，繼續保持正值。提醒一下，這個過去 12 個月的衡量指標並不能預測收入的時間，而是基於通知的時間。該指標的完整定義包含在我們演示文稿的附錄中。

Turning to Slide 6 to review some of our key sales metric trends. I've previously commented on our improving sequential trend in ACV. And you can see in Q4 2022 the impact of the Government segment deals mentioned earlier driving upticks in TCV, new business NRR and average contract length. To differentiate project implementations from the recurring run component of a contract, we define the project implementation phases as NRR because they are onetime in nature. All 3 of these government deals mentioned earlier have strong components of NRR but will also have recurring revenue components from operations and maintenance.

轉到幻燈片 6 來回顧我們的一些關鍵銷售指標趨勢。我之前曾評論過我們在 ACV 中不斷改善的連續趨勢。您可以在 2022 年第四季度看到前面提到的政府部門交易的影響推動 TCV、新業務 NRR 和平均合同期限的上升。為了將項目實施與合同的重複運行部分區分開來，我們將項目實施階段定義為 NRR，因為它們本質上是一次性的。前面提到的所有 3 項政府交易都具有強大的 NRR 組成部分，但也將有來自運營和維護的經常性收入組成部分。

Now let's turn to Slide 7 and discuss our full year 2022 P&L metrics. We finished the year with results coming in at the low end of our full year guided range but consistent with how I messaged it in the fourth quarter during our last earnings update. Revenue for 2022 was $3.85 billion as compared to $4.07 billion in 2021, down 5.4% or 4.4% in constant currency. As we have said previously, 2022 was the year we were growing over the onetime government stimulus volumes from 2021. This represented a net headwind of $185 million in 2022. There were a lot of other puts and takes, which I'll cover as I talk about the individual segment results, tailwinds from BenefitWallet interest rates, headwinds from foreign exchange, volume reductions from a couple of our larger commercial clients, ramp from new business and offsets from lost clients, all of which we'll discuss later.

現在讓我們轉到幻燈片 7 並討論我們的 2022 年全年損益指標。我們今年結束時的業績處於全年指導範圍的低端，但與我在上次收益更新中第四季度傳達的信息一致。 2022 年的收入為 38.5 億美元，而 2021 年為 40.7 億美元，按固定匯率計算下降 5.4% 或 4.4%。正如我們之前所說，2022 年是我們從 2021 年開始的一次性政府刺激規模增長的一年。這代表 2022 年的淨阻力為 1.85 億美元。還有很多其他的看跌期權，我將在下文中介紹談談個別部門的業績、BenefitWallet 利率帶來的順風、外匯帶來的逆風、我們幾個較大商業客戶的交易量減少、新業務的增長以及失去客戶的抵消，所有這些我們將在稍後討論。

Adjusted EBITDA was $394 million for the full year 2022 as compared to $448 million in 2021, and our adjusted EBITDA margin at 10.2% was 80 basis points down year-over-year as compared to 2021. This was within our full year guided range but slightly below how I laid out Q4 in our last earnings update due to a couple of discrete items that affected the fourth quarter that I'll cover when we go through the segment results individually. The puts and takes on the adjusted EBITDA for the full year were headwinds from the runoff of the onetime government stimulus volumes, headwinds from mix and foreign exchange, offset with the positive impact of increased fall-through from BenefitWallet revenue and our ongoing cost efficiency programs.

2022 年全年調整後的 EBITDA 為 3.94 億美元，而 2021 年為 4.48 億美元，我們調整後的 EBITDA 利潤率為 10.2%，與 2021 年相比同比下降 80 個基點。這在我們全年的指導範圍內，但略低於我在上次收益更新中對第四季度的佈局，因為有幾個影響第四季度的離散項目，當我們單獨查看部門結果時，我將介紹這些項目。全年調整後的 EBITDA 的看跌期權和收益受到了一次性政府刺激措施的影響、混合和外彙的影響，被 BenefitWallet 收入下降和我們正在進行的成本效率計劃增加的積極影響所抵消.

Our GAAP net income in 2022 was impacted by 2 significant events. In the first half of 2022, we recorded a pretax gain on sale of $166 million on the divestiture of our Midas suite of solutions. In the fourth quarter, we recorded a pretax impairment charge of $358 million on the carrying value of goodwill for our commercial reporting unit. After completing the annual goodwill impairment test, the commercial reporting unit experienced lower-than-expected new customer contract signings in the fourth quarter and an unexpected softening of the near-term business pipeline for certain solutions, which we believe are being driven by macroeconomic conditions present in the fourth quarter. The combination of these factors led us to review the commercial reporting unit and further evaluate the portfolio. This triggered a goodwill impairment assessment for this reporting unit as of December 31, 2022, which resulted in this pretax impairment charge. The effect of this can be found in our filings and in the appendix of the presentation.

我們 2022 年的 GAAP 淨收入受到 2 件重大事件的影響。 2022 年上半年，我們通過剝離 Midas 解決方案套件獲得了 1.66 億美元的稅前銷售收益。第四季度，我們為商業報告部門的商譽賬面價值記錄了 3.58 億美元的稅前減值費用。在完成年度商譽減值測試後，商業報告部門在第四季度的新客戶合同簽署量低於預期，某些解決方案的近期業務渠道意外疲軟，我們認為這是受宏觀經濟狀況的推動出現在第四季度。這些因素的結合促使我們審查商業報告單位並進一步評估投資組合。這觸發了截至 2022 年 12 月 31 日對該報告單位的商譽減值評估，從而產生了此項稅前減值費用。這種影響可以在我們的文件和演示文稿的附錄中找到。

Let's now turn to Slide 8 and go over the segment results. For the full year, Commercial segment revenues declined 1.2% year-over-year, which was a significant improvement to 2021 when it declined 4.1% from 2020. The net effect in the year of incremental BenefitWallet revenue offset with foreign exchange headwinds was an approximate $18 million benefit. For the first time, ramped revenue from new clients exceeded runoff from lost revenue, a function of both increased sales and better retention. The offset to this was the previously messaged decline in volumes from a couple of our largest clients, where they were normalizing their postpandemic volumes. The full year effect of that was approximately $50 million in a year, and we expect that to continue into 2023. Net-net, the Commercial segment declined slightly but performed well. Underlying revenues have stabilized, and we are projecting modest growth in 2023. More to come on that later.

現在讓我們轉到幻燈片 8 並查看細分結果。全年，商業部門收入同比下降 1.2%，與 2020 年相比下降 4.1% 的 2021 年有了顯著改善。當年增加的 BenefitWallet 收入被外匯逆風抵消的淨效應約為1800 萬美元的收益。新客戶帶來的收入增長首次超過了收入損失帶來的流失，這是銷售額增加和留存率提高的結果。對此的抵消是我們幾個最大的客戶之前發出的交易量下降的消息，他們正在使大流行後的交易量正常化。這對全年的影響約為一年 5000 萬美元，我們預計這種情況將持續到 2023 年。淨值，商業部門略有下降，但表現良好。基礎收入已經穩定，我們預計 2023 年將實現適度增長。稍後會公佈更多。

For the Government segment, full year 2022 revenue declined 12% as compared to 2021. The runoff from the onetime government stimulus volumes in 2022 was a net $185 million. This decline was less than we had messaged at the beginning of the year, and the underlying business also performed well with higher volumes in our SNAP summer programs and other solutions within both our government services and government health care businesses.

對於政府部門，與 2021 年相比，2022 年全年收入下降了 12%。2022 年政府曾經的刺激措施產生的淨收益為 1.85 億美元。這一下降幅度小於我們年初所傳達的信息，而且基礎業務也表現良好，我們的 SNAP 夏季計劃和政府服務和政府醫療保健業務中的其他解決方案的數量增加。

Transportation segment revenues declined 5% year-over-year in 2022 as compared to 2021, with approximately half of this decline being driven by foreign exchange headwinds affecting the international transit business. The remainder of the decline was some onetime revenues that benefited our Q4 2021 results and the effects of slower-than-expected implementations in certain projects where we expect the revenue to catch up in 2023.

與 2021 年相比，2022 年運輸部門的收入同比下降 5%，其中約一半的下降是由影響國際運輸業務的外匯逆風造成的。下降的其餘部分是一些一次性收入，這有利於我們 2021 年第四季度的業績，以及某些項目實施速度慢於預期的影響，我們預計這些項目的收入將在 2023 年趕上。

In terms of adjusted EBITDA and margin, the Commercial segment improved 17% year-over-year, and the adjusted EBITDA margin of 11.3% was up 170 basis points year-over-year. Increased BenefitWallet revenue contributed to this margin improvement, along with operational efficiencies and increased work from home, allowing continued real estate rationalization. This was offset by some headwinds from mix. In the Government segment, adjusted EBITDA declined 24%, and the adjusted EBITDA margin of 28.8% was down 460 basis points year-over-year. The roll-off of the onetime government stimulus volumes was the significant driver of this change in 2022. For the Transportation segment, adjusted EBITDA declined 21% year-over-year as compared to 2021, and the adjusted EBITDA margin of 11.8% was down 240 basis points year-over-year.

在調整後的 EBITDA 和利潤率方面，商業部門同比增長 17%，調整後的 EBITDA 利潤率為 11.3%，同比增長 170 個基點。 BenefitWallet 收入的增加促成了利潤率的提高，同時還提高了運營效率和增加了在家工作的機會，從而實現了房地產的持續合理化。這被混合的一些不利因素所抵消。在政府部門，調整後的 EBITDA 下降了 24%，調整後的 EBITDA 利潤率為 28.8%，同比下降 460 個基點。曾經的政府刺激措施的減少是 2022 年這一變化的重要驅動因素。對於運輸部門，調整後的 EBITDA 與 2021 年相比同比下降 21%，調整後的 EBITDA 利潤率為 11.8%，下降了同比增長 240 個基點。

In addition to the onetime revenue item that benefited the fourth quarter of 2021, the quarter and the year were impacted by some higher-than-expected expenses related to certain projects. Overall, this was an approximate 3.5 point decline in the adjusted EBITDA margin for the quarter as compared to Q4 2021 and approximately 120 basis points on a full year. Some of these headwinds will persist in Q1 2023 before we see a more normalized margin rate returning.

除了使 2021 年第四季度受益的一次性收入項目外，該季度和全年還受到與某些項目相關的一些高於預期的支出的影響。總體而言，與 2021 年第四季度相比，本季度調整後的 EBITDA 利潤率下降了約 3.5 個百分點，全年下降了約 120 個基點。在我們看到更正常的保證金率回歸之前，其中一些不利因素將持續到 2023 年第一季度。

Let's turn to Slide 9 and discuss the balance sheet and cash flow. Our total liquidity position is strong with a combined $1.15 billion in cash and available revolving credit facility. We ended the quarter with approximately $600 million of total cash on the balance sheet, and our $550 million revolving credit facility is almost completely unused at this point. Our net leverage ratio is 1.8 turns, which we believe is below our normalized range of 2 to 2.5 turns. Our debt maturities are long-dated, and we have no significant debt repayments until 2026.

讓我們轉到幻燈片 9 並討論資產負債表和現金流量。我們的總流動性頭寸強勁，現金和可用循環信貸額度合計為 11.5 億美元。我們在本季度結束時資產負債表上的現金總額約為 6 億美元，此時我們的 5.5 億美元循環信貸額度幾乎完全未使用。我們的淨槓桿率為 1.8 倍，我們認為這低於我們 2 至 2.5 倍的正常範圍。我們的債務期限很長，而且我們在 2026 年之前沒有重大債務償還。

Our capital expenditure in the fourth quarter included a cash purchase of client equipment, which later in the quarter we financed. This grossed up our U.S. GAAP cash flow statement by recognizing both investing CapEx and proceeds from the issuance of debt for $13 million but had no impact to adjusted free cash flow. Without the effect of this item, our capital expenditure as a percentage of revenue in the fourth quarter would have been 3.2% and 3.7% for the full year, which was more in line with how we laid it out for you earlier in the year.

我們在第四季度的資本支出包括現金購買客戶端設備，我們在本季度晚些時候為其提供了資金。這通過確認投資資本支出和發行 1300 萬美元的債務收益來增加我們的美國公認會計原則現金流量表，但對調整後的自由現金流沒有影響。如果沒有這個項目的影響，我們第四季度的資本支出佔全年收入的百分比將分別為 3.2% 和 3.7%，這更符合我們今年早些時候為您制定的計劃。

During the fourth quarter, a combination of factors drove a lower-than-anticipated adjusted free cash flow outcome. Firstly, an expected federal tax refund was pushed to 2023. As discussed earlier, some of the slower implementations in the Transportation segment and other timing impacts in the Government segment caused certain billing milestones to shift, which we'll now collect in 2023. It is the nature of our businesses that serve the Transportation and Government segments that the cash flows can be lumpy. Finally, we repaid the second and final installment of our deferred payroll taxes under the CARES Act in the fourth quarter.

在第四季度，多種因素共同導致調整後的自由現金流結果低於預期。首先，預期的聯邦退稅被推遲到 2023 年。如前所述，運輸部門的一些較慢實施和政府部門的其他時間影響導致某些計費里程碑發生變化，我們現在將在 2023 年收集。它我們服務於運輸和政府部門的業務的性質是，現金流量可能是不穩定的。最後，我們在第四季度根據 CARES 法案償還了第二期也是最後一期的遞延工資稅。

Let's turn to Slide 10, and we'll walk through our 2023 guidance. Overall, we expect adjusted revenues in 2023 to be in the range of $3.7 billion to $3.8 billion. The midpoint of this range would represent a year-over-year decline of $100 million or 2.6%. Within this number is the previously communicated year-over-year impact of 2 of our largest clients reducing their postpandemic volume assumptions representing 130 basis points of decline and the runoff of the onetime government stimulus volumes representing 110 basis points of decline.

讓我們轉到幻燈片 10，我們將介紹我們的 2023 年指南。總體而言，我們預計 2023 年調整後的收入將在 37 億美元至 38 億美元之間。該範圍的中點代表同比下降 1 億美元或 2.6%。在這個數字中，我們的 2 個最大客戶之前傳達的同比影響減少了他們的大流行後交易量假設，代表下降 130 個基點，而曾經的政府刺激交易量減少了 110 個基點。

Additionally, we're anticipating some incremental volume headwinds that we believe are mostly recessionary that contribute an additional 75 basis points of decline and the unanticipated loss of the Government segment call center client representing 70 basis points of decline. This is offset with an approximate 100 basis points of improvement from previously communicated interest rate decisions that positively impact our BenefitWallet business. These discrete items represent approximately a net negative 285 basis points of our year-over-year revenue decline. As you can see from this, our underlying base business has stabilized.

此外，我們預計會出現一些增量逆風，我們認為這些逆風主要是衰退性的，導致額外的 75 個基點下降，而政府部門呼叫中心客戶的意外損失代表 70 個基點的下降。這被之前傳達的對我們的 BenefitWallet 業務產生積極影響的利率決策提高了大約 100 個基點所抵消。這些離散項目代表我們同比收入下降約淨負 285 個基點。從這裡可以看出，我們的基礎業務已經穩定下來。

Double-clicking on each of the 3 segments at the midpoint of our range. We expect the Commercial segment to grow approximately 1.3% in 2023, and we expect the Transportation segment to grow approximately 1.8% in 2023. This is offset by a decline of approximately 12.5% in the Government segment driven by client losses and the $42 million of government stimulus volumes in 2022, most of which was anticipated and communicated on our previous outlook that we gave in our Q4 2021 earnings update. There, we said we expected the Government segment to decline in 2023 mid- to high single digits. The revised outlook given here reflects the loss of the additional call center client I referenced earlier that was notified in Q4 and is included in our net ARR metric in the fourth quarter in addition to the stronger-than-expected contribution in 2022 from the tail of the government stimulus volumes.

雙擊我們範圍中點的 3 個段中的每一個。我們預計商業部門將在 2023 年增長約 1.3%，我們預計運輸部門將在 2023 年增長約 1.8%。這被政府部門因客戶損失和 4200 萬美元的損失而下降約 12.5% 所抵消。 2022 年的政府刺激計劃，其中大部分是我們在 2021 年第四季度收益更新中給出的先前展望中預期和傳達的。在那裡，我們說我們預計政府部門將在 2023 年中到高個位數下降。此處給出的修訂後展望反映了我之前提到的額外呼叫中心客戶的損失，該客戶在第四季度得到通知，並且包含在我們第四季度的淨 ARR 指標中，此外還有 2022 年尾部的貢獻強於預期政府的刺激措施。

In terms of the pacing of revenue in 2023, we see it being very similar to 2022 in terms of weighting between the front half and back half of the year. As a reminder, Q1 is usually slightly higher than Q2 because of the impact of open enrollment period within our health care client base.

就 2023 年的收入節奏而言，我們認為它與 2022 年在前半年和後半年的權重方面非常相似。提醒一下，由於我們的醫療保健客戶群中開放註冊期的影響，第一季度通常略高於第二季度。

In 2023, we expect adjusted EBITDA margin to be in the range of 10% to 10.8%. The larger puts and takes in this outlook are the impact of previously announced interest rate increases that benefit our revenues and EBITDA in the BenefitWallet business and our continued work on cost efficiency across our business segments and corporate functions. Offsetting these are the margin impacts on the nonrecurring government stimulus volumes and the previously noted volume reductions, some of which are recessionary in the Commercial segment.

2023 年，我們預計調整後的 EBITDA 利潤率將在 10% 至 10.8% 的範圍內。這一前景中更大的看跌期權和收益是先前宣布的加息的影響，這有利於我們在 BenefitWallet 業務中的收入和 EBITDA，以及我們在業務部門和公司職能部門的成本效率方面的持續工作。抵消這些是對非經常性政府刺激量和先前提到的量減少的利潤率影響，其中一些是商業部門的衰退。

Like last year, we expect adjusted EBITDA margins to start the year slightly below the guided range and finish the year slightly above the guided range driven by factors that include a sales ramp that is more weighted towards the second half of the year as well as continued work on cost efficiency. We expect to convert adjusted EBITDA to adjusted free cash flow in the range of 15% to 20%. As I mentioned previously, our cash flow in the short term is sensitive to some of these larger Government and Transportation segment projects as we work towards milestones that can move due to client requirements or other factors.

與去年一樣，我們預計調整後的 EBITDA 利潤率今年年初將略低於指導範圍，並在今年結束時略高於指導範圍，其驅動因素包括下半年的銷售增長以及持續增長成本效益方面的工作。我們預計將調整後的 EBITDA 轉換為調整後的自由現金流，範圍為 15% 至 20%。正如我之前提到的，我們的短期現金流對其中一些較大的政府和運輸部門項目很敏感，因為我們正在努力實現可能因客戶要求或其他因素而發生變化的里程碑。

We expect CapEx to be approximately $130 million and restructuring charges to be approximately $40 million. The increase in our outlook on restructuring charges, at least for 2023, is largely driven by opportunities to further rationalize certain infrastructure expense as well as our real estate footprint as we continue to evolve our hybrid work-from-work/work-from-home model.

我們預計資本支出約為 1.3 億美元，重組費用約為 4000 萬美元。我們對重組費用的展望至少在 2023 年有所增加，這主要是由於我們有機會進一步合理化某些基礎設施費用以及我們的房地產足跡，因為我們繼續發展我們的混合工作/在家工作模型。

That concludes our financial review of the 2022 Q4 and full year results, and I'll hand it back to Cliff for closing comments. Cliff?

我們對 2022 年第四季度和全年業績的財務審查到此結束，我將把它交還給 Cliff 以徵求結束意見。懸崖？

Thanks, Steve. Look, in closing, I think it's important to restate that 2022 brought with it a lot of exogenous components, from interest rates being positive to EBITDA to base volume changes that were unexpected from some of our largest clients, to foreign exchange rates that were certainly not planned for. All of which, when coupled with the normal puts and takes of a very diverse portfolio, made for a year when finishing within our guidance range on top line and EBITDA was somewhat impressive. The onetime events on cash are somewhat anomalous and normalize out in 2023, we believe.

謝謝，史蒂夫。看，最後，我認為重要的是要重申 2022 年帶來了許多外生因素，從利率為正到 EBITDA 到我們一些最大客戶意想不到的基礎量變化，到外匯匯率肯定是沒有計劃。所有這些，再加上非常多樣化的投資組合的正常看跌期權，在我們的指導範圍內完成了一年的收入和 EBITDA 有點令人印象深刻。我們認為，現金方面的一次性事件有些反常，並將在 2023 年正常化。

Regarding 2023, we were hopeful that our pivot to growth would happen earlier in the year, but government buying timing patterns can sometimes be unpredictable. The good news is that selling and retaining revenue remains paramount, and 2 of our 3 businesses are growing. And the third has very strong legs to it as we see real growth opportunity in that government health care business. Our very diverse portfolio can and has been a strength in the past, particularly during the pandemic. But today, we need to keep looking closely at where within that portfolio we can generate the most future accretion and value by way of where there is, first, scarcity value externally; and second, where we can focus the combination of our bandwidth, new products and payments, new geographies especially in transportation and disciplined investment protocols. And it's something that not only grows but generates the kind of market appreciation we think we should enjoy. Now more to come on all of that in our investor event. But please be on the lookout for the next week or 2 for a firm date, the last part of March for that event.

關於 2023 年，我們希望我們的增長重心能在今年早些時候發生，但政府購買時機的模式有時無法預測。好消息是銷售和保留收入仍然是最重要的，我們的 3 項業務中有 2 項正在增長。第三個有很強的支撐力，因為我們看到了政府醫療保健業務的真正增長機會。我們非常多樣化的產品組合在過去可以而且一直是一種優勢，尤其是在大流行期間。但是今天，我們需要繼續密切關注在投資組合中我們可以通過首先是外部稀缺價值的地方產生最大的未來增值和價值；其次，我們可以集中精力組合我們的帶寬、新產品和支付、新的地理區域，尤其是在交通運輸和嚴格的投資協議方面。它不僅會增長，還會產生我們認為應該享受的那種市場升值。現在，在我們的投資者活動中，所有這些都將有更多內容。但請注意下一周或兩週的確定日期，即該活動的三月下旬。

In closing, we're proud of what we accomplished in our foundational work over the past 3 years. We're proud of our ability to hit the numbers we predicted in a 2022 year that brought with it some of its own unpredictability. And we look forward to, again, doing what we say we will do in 2023. The bottom line here is that we are quite sanguine about the future of Conduent.

最後，我們為過去 3 年在基礎工作中取得的成就感到自豪。我們為能夠在 2022 年達到我們預測的數字而感到自豪，這也帶來了一些自身的不可預測性。我們再次期待在 2023 年按照我們所說的去做。這裡的底線是我們對 Conduent 的未來非常樂觀。

Thank you again to our listeners. And as always, thanks to our clients and to our associates. Good day, everyone. Back to you, operator.

再次感謝我們的聽眾。一如既往，感謝我們的客戶和我們的同事。今天是個好日子。回到你身邊，接線員。

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束。此時您可以斷開線路。感謝您的參與。