Conduent Inc (CNDT) 2025 Q2 法說會逐字稿

Greetings. Welcome to Conduent's second quarter 2025 earnings conference call. (Operator Instructions) Please note, this conference is being recorded. I will now turn the conference over to David Chen, VP of Investor Relations. Thank you.

問候。歡迎參加 Conduent 2025 年第二季財報電話會議。（操作員說明）請注意，本次會議正在錄音。現在我將把會議交給投資者關係副總裁大衛陳。謝謝。

You may begin.

你可以開始了。

Thank you, operator, and thanks, everyone, for joining us today to discuss Conduent's second quarter 2025 earnings. I am joined today by Cliff Skelton, our President and CEO; and Giles Goodburn, our CFO. 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 morning 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.

謝謝接線員，也謝謝各位今天加入我們，共同探討 Conduent 2025 年第二季的收益狀況。今天與我一同出席的有我們的總裁兼執行長克利夫·斯凱爾頓，以及我們的財務長吉爾斯·古德伯恩。本次電話會議正在進行網路直播，會議期間使用的幻燈片副本以及新聞稿已於今天上午以 8-K 表格的形式提交給美國證券交易委員會。這些資訊以及詳細的財務指標包可在 Conduent 網站的投資者關係部分取得。

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 these statements.

在本次電話會議中，我們可能會發表一些前瞻性聲明。這些前瞻性陳述反映了管理階層目前的信念、假設和預期，並受到多種因素的影響，這些因素可能導致實際結果與這些陳述有重大差異。

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.

有關這些因素的資訊包含在 Conduent 向美國證券交易委員會提交的 10-K 表格年度報告中。除法律要求外，我們不打算因新資訊、未來事件或發展而更新這些前瞻性聲明。

The information presented today includes non-GAAP financial measures, because these measures are not calculated in accordance with US 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 and how we use them, as well as the limitations to their usefulness for comparative purposes, please see our press release.

今天公佈的資訊包括非GAAP財務指標，因為這些指標不是按照美國GAAP計算的，所以應該將其視為對公司已公佈業績的補充，而不是替代。有關我們的非GAAP指標的定義、我們如何使用這些指標以及它們在比較目的方面的局限性的更多信息，請參閱我們的新聞稿。

And now I would like to turn the call over to Cliff.

現在我想把電話交給克里夫。

Thank you, David, and thank you, everyone, for joining Conduent's Q2 2025 earnings call. As always, I'll preamble the quarter. Turn it over to Giles for the detailed numbers, and I'll close with some comments about the market, changing landscape in public and commercial sectors and some strategic thinking regarding our optimistic view of the rest of the year and into 2026.

謝謝大衛，也謝謝各位參加 Conduent 2025 年第二季財報電話會議。照例，我先來介紹一下本季的情況。詳細數據請交給吉爾斯，最後我將就市場、公共和商業領域的格局變化以及我們對今年剩餘時間和 2026 年的樂觀展望發表一些評論。

Q2 was, by and large, right down the middle of the fairway for us. Revenue for the quarter was slightly up sequentially at $754 million, in line with our expectations with another solid quarter of adjusted EBITDA at $37 million and 4.9% of adjusted EBITDA margin, exceeding expectations up year-on-year and flat sequentially in a quarter usually representing the low point in the year.

第二節比賽，總的來說，對我們來說是正中球道。本季營收季增至 7.54 億美元，符合我們的預期；調整後 EBITDA 為 3,700 萬美元，調整後 EBITDA 利潤率為 4.9%，年比超出預期，環比持平，而本季通常是一年中的低潮。

Before Giles gets into the detailed financials, let me just confirm that our portfolio rationalization efforts remain on track. Without getting too explicit, I can say that work is definitely underway. We feel good about our sales performance, especially in the public sector with an overall ACV of $150 million, up year-over-year and quarter-over-quarter. Q3 will be an important quarter for us in sales, and we're expecting improved performance from our Commercial segment as some deals move to the right from Q2.

在吉爾斯詳細介紹財務狀況之前，我先確認一下，我們的投資組合合理化工作仍在按計劃進行。我不能說得太具體，但我可以肯定地說，這項工作正在進行中。我們對銷售業績感到滿意，尤其是在公共部門，總年度合約價值達到 1.5 億美元，年成長和環比成長。第三季對我們的銷售來說將是一個重要的季度，我們預計商業部門的業績會有所改善，因為一些交易將從第二季提前到第三季。

In the quarter, we signed eight new logos, expanded relationships with 22 existing clients, and renewed several contracts, including the Direct Express contract supporting the federal government as a sub to a leading financial institution. The other good news here is that we're seeing increased activity and sales opportunity in our Transportation businesses, both Tolling and Transit. And our pipeline is strong in Government as well.

本季度，我們簽署了八個新標識，擴大了與 22 個現有客戶的關係，並續簽了多份合同，其中包括為聯邦政府提供支援的 Direct Express 合同，作為一家領先金融機構的子公司。另一個好消息是，我們在交通運輸業務（包括收費和公共交通）方面都看到了成長動能和銷售機會。我們在政府部門的人才儲備也很充足。

We continue to roll out AI initiatives, encompassing the gamut ranging from the obvious such as telecom enhancements and language smoothing to fraud reduction enhancements, to item processing workflow improvements, to end-user simplification process improvements and efficiency improvements.

我們持續推出人工智慧計劃，涵蓋範圍廣泛，從顯而易見的電信增強和語言平滑等，到詐欺減少增強，再到物品處理工作流程改進，以及最終用戶簡化流程和效率提升等。

We remain convinced that while AI and GenAI are obviously here to stay and will continue to morph. In the BPO space, its primary focus is on using AI as an enhancement, not a replacement. As was said by a prominent AI CEO recently, AI isn't seen as a replacement for people, but more as a competitive advantage for those individuals who utilize AI.

我們仍然堅信，人工智慧和世代人工智慧顯然會長期存在並不斷演變。在業務流程外包 (BPO) 領域，其主要關注點是將人工智慧作為增強手段，而不是替代手段。正如一位知名人工智慧公司執行長最近所說，人工智慧並不被視為取代人類，而更像是利用人工智慧的個人的一種競爭優勢。

You went on to say more people are going to be able to do more things. That's effectively what we're seeing. AI is opening doors to enable us to do more things at higher quality with fewer mistakes, potentially driving margin enhancements with a better end user experience.

你接著說，更多的人將能夠做更多的事情。這就是我們目前所看到的。人工智慧正在為我們打開大門，使我們能夠以更高的品質、更少的錯誤完成更多的事情，從而有可能透過更好的終端用戶體驗來提高利潤率。

Technology is definitely moving faster than risk tolerance in some areas, but we will continue this journey with open minds for sure. Finally, as part of our orderly sequencing, we elected the new Chairman of the Board, Harsha Agadi.

在某些領域，科技發展的速度確實超過了人們的風險承受能力，但我們一定會以開放的心態繼續這段旅程。最後，作為我們有序程序的一部分，我們選舉了新的董事會主席哈爾沙·阿加迪。

Harsha joins the Board and the Chairman role at a strategic point in time where his experience will be put to good use. We're certainly thankful for Scott Letier's leadership over the past four years as she transitions from Chairman to leading the Audit Committee among other roles on our Board.

哈沙加入董事會並擔任主席一職，正值公司策略發展的關鍵時刻，他的經驗將會充分發揮。我們非常感謝 Scott Letier 在過去四年中的領導，她從董事長過渡到領導審計委員會以及擔任董事會的其他職位。

Regarding the rest of the year, Giles will be a little more explicit, but we're intently focused on meeting previously mentioned expectations. As you know, in this business, revenue can be a bit lumpy. However, margin is more controllable. We expect to hit the high end of EBITDA and margin and expect to meet revenue expectations.

至於今年的剩餘時間，吉爾斯會說得更清楚一些，但我們正在全力以赴地實現先前提到的預期目標。如你所知，在這個行業，收入可能會有些波動。然而，利潤率更容易控制。我們預計 EBITDA 和利潤率將達到較高水平，並有望實現收入預期。

Let me turn over the dialer to Giles to take you through the detailed financials. Giles?

讓我把撥號器交給吉爾斯，讓他帶你詳細了解財務狀況。吉爾斯？

Thanks, Cliff. As we've done in the past, we're reporting both GAAP and non-GAAP numbers. The reconciliations are in our filings and in the appendix of the presentation. Let's discuss the key sales metrics on slides 5 and 6.

謝謝你，克里夫。和以往一樣，我們將同時公佈GAAP和非GAAP財務數據。核對結果已提交至我們的備案文件和簡報的附錄。讓我們來討論一下第 5 頁和第 6 頁投影片上的關鍵銷售指標。

We signed $150 million of new business ACV in the quarter, up 6% versus the prior year and 38% sequentially. First half 2025 new business ACV is up 9% versus the first half of 2024, and we're positioned for strong year-over-year ACV growth in the second half of 2025.

本季我們簽署了價值 1.5 億美元的新業務年度合約價值 (ACV)，比去年同期成長 6%，季增 38%。2025 年上半年新業務 ACV 比 2024 年上半年成長 9%，我們預計 2025 年下半年 ACV 將實現強勁的年成長。

All three business segments demonstrated sequential new business ACV growth this quarter, with each business segment closing a deal of at least $10 million ACV in the quarter. New business TCV was up 21% versus the prior year at $331 million, and distributed relatively equally across the segments.

本季所有三個業務部門的新業務年度合約價值均實現了連續成長，每個業務部門在本季度都完成了一筆年度合約價值至少為 1000 萬美元的交易。新業務總合約價值 (TCV) 比上年增長 21%，達到 3.31 億美元，並且在各個細分市場中分佈相對均衡。

Renewals in the quarter were solid and included the Direct Express program Cliff mentioned earlier. The net ARR activity metric our combined measure of wins, losses, pricing effects and other contractual changes was positive at $63 million. Our qualified ACV pipeline remains strong at $3.3 billion, which is up 5% year-over-year and 6% since the beginning of 2025, which positions us well to achieve the second half year-over-year ACV growth and will drive revenue growth across all segments in 2026.

本季續約情況良好，其中包括克里夫之前提到的Direct Express計劃。淨 ARR 活動指標（我們綜合衡量了成交量、虧損、定價影響和其他合約變更）為正值 6,300 萬美元。我們合格的年度合約價值 (ACV) 儲備仍然強勁，達到 33 億美元，同比增長 5%，自 2025 年初以來增長 6%，這使我們能夠很好地實現下半年年度合約價值的同比增長，並將推動 2026 年所有業務板塊的收入增長。

Let's turn to slide 7 and review our Q2 2025 P&L metrics. Adjusted revenue for Q2 2025 was $754 million compared to $774 million in Q2 2024, down 2.6% year-over-year. While Transportation achieved revenue growth this quarter. The decline was driven by our Commercial and Government segments, which I'll discuss in more detail in a moment. Adjusted EBITDA for the quarter was $37 million as compared to $24 million in Q2 2024. And our adjusted EBITDA margin of 4.9% is up 180 basis points year-over-year. This is higher than we guided the quarter, which was driven by excellent progress we have been making in one of our large Transit contracts.

讓我們翻到第 7 頁，回顧我們 2025 年第二季的損益指標。2025 年第二季調整後營收為 7.54 億美元，而 2024 年第二季為 7.74 億美元，年減 2.6%。運輸業務本季實現了營收成長。這次下滑主要由我們的商業和政府部門造成，我稍後會詳細討論這一點。本季調整後 EBITDA 為 3,700 萬美元，而 2024 年第二季為 2,400 萬美元。我們的調整後 EBITDA 利潤率為 4.9%，較去年同期成長 180 個基點。這高於我們本季的預期，這主要得益於我們在一個大型運輸合約中取得的出色進展。

The first half of the year has delivered stronger margins than we had originally planned and sets us up well for the second half of the year, where we will benefit from the continued progress in our cost efficiency programs, price increases in a couple of our larger contracts as well as the traditional seasonality we experienced in the second half of the year, all of which will contribute to our progression towards the previously communicated exit rates.

上半年的利潤率高於我們最初的計劃，為下半年奠定了良好的基礎。下半年，我們將受益於成本效益計劃的持續進展、幾份較大合約的價格上漲以及下半年傳統的季節性因素，所有這些都將有助於我們實現先前公佈的退出率目標。

Let's turn to slide 8 and review the segment results. For Q2 2025, Commercial segment adjusted revenue was $365 million, down 5.9% as compared to Q2 2024. New business continues to outpace loss business in this segment. However, similar to Q1, we continue to experience volume degradation in our largest Commercial client, which is a significant contributor to the lower revenues. Adjusted EBITDA was $27 million, and the adjusted EBITDA margin of 7.4% was down 190 basis points year-over-year.

讓我們翻到第 8 張投影片，回顧一下各部分的結果。2025 年第二季度，商業部門調整後的營收為 3.65 億美元，比 2024 年第二季下降 5.9%。該領域新增業務持續超過虧損業務。然而，與第一季類似，我們最大的商業客戶的業務量持續下滑，這是導致收入下降的重要因素。調整後 EBITDA 為 2,700 萬美元，調整後 EBITDA 利潤率為 7.4%，較去年同期下降 190 個基點。

The drivers here were lower revenue, higher talent acquisition costs supporting new business signings as we grow into the expanded delivery footprints in the Philippines and India and high usage of centralized technology costs.

造成這種情況的原因是收入下降、隨著我們在菲律賓和印度擴大交付範圍而增加的新業務簽約所需的人才招募成本上升，以及集中式技術使用成本高昂。

Government segment adjusted revenue for the quarter was down 2.9% at $238 million. This decline is attributed to the impacts associated with completing or extending several implementations. However, new business has now started to outpace loss business in this segment.

政府部門本季調整後營收下降 2.9%，至 2.38 億美元。這一下降歸因於完成或延長若干實施項目所帶來的影響。然而，目前該領域的新業務成長率已開始超過虧損業務。

Adjusted EBITDA was $60 million, an increase of 22% year-over-year, with adjusted EBITDA margin of 25.2%, up 520 basis points versus Q2 2024. The drivers here resulted from our AI initiatives and efficiency programs, resulting in lower fraud, labor and telecom expenses.

調整後 EBITDA 為 6,000 萬美元，年成長 22%，調整後 EBITDA 利潤率為 25.2%，比 2024 年第二季成長 520 個基點。這些驅動因素源自於我們的人工智慧計畫和效率提升方案，降低了詐欺、人工和電信費用。

Transportation segment adjusted revenue was $151 million, an increase of 7.1% year-over-year, while adjusted EBITDA was $8 million in the quarter, and adjusted EBITDA margin was 5.3% for the quarter, up 320 basis points versus Q2 2024. This was driven by the outcome of a couple of significant events achieved in a large Transit contract.

運輸業務部門調整後營收為 1.51 億美元，年增 7.1%；該季度調整後 EBITDA 為 800 萬美元；該季度調整後 EBITDA 利潤率為 5.3%，比 2024 年第二季增長 320 個基點。這是由一項大型交通運輸合約中取得的幾項重大成果所推動的。

These significant events achieved in the first half of the year related to our large Transit contract in Australia. Firstly, we signed an amendment to the contract, which included additional scope. And secondly, we repurchased the noncontrolling interest in the joint venture that delivers the client contractual obligations.

今年上半年取得的這些重大成就與我們在澳洲的大型運輸合約有關。首先，我們簽署了一份合約修訂案，其中增加了合約範圍。其次，我們回購了履行客戶合約義務的合資企業中的非控制權益。

This allows us to execute more efficiently and resulted in a positive catch-up adjustment in the quarter. Unallocated costs were $58 million for the quarter versus $64 million in Q2 2024. The improvement here is driven by our cost efficiency programs in our corporate functions.

這使我們能夠更有效率地執行，並在本季度實現了積極的追趕調整。本季未分配成本為 5,800 萬美元，而 2024 年第二季為 6,400 萬美元。這項改進得益於我們在公司職能部門所推行的成本效率提升計畫。

Let's turn to slide 9 and discuss the balance sheet and cash flow. We ended the quarter with approximately $294 million of total cash on balance sheet and our $550 million revolving credit facility was largely undrawn. We are currently in the process of refinancing our revolving credit facilities, which we expect to have finalized in the very near future. On April the 30th, we received the final payment of $50 million relating to the Curbside Management and Public Safety divestiture, which completes the receipt of proceeds from Phase I of our divestiture program.

讓我們翻到第 9 張投影片，討論一下資產負債表和現金流量表。本季末，我們的資產負債表上現金總額約為 2.94 億美元，而我們的 5.5 億美元循環信貸額度基本上未動用。我們目前正在對循環信貸額度進行再融資，預計在不久的將來即可完成。4 月 30 日，我們收到了與路邊管理和公共安全業務剝離相關的最後一筆 5000 萬美元款項，至此，我們剝離計劃第一階段的收益已全部到賬。

Our net leverage ratio remained at 2.7 turns this quarter. We see this as the high point in our journey and forecast this ratio to begin to reduce in Q3 and sequentially again in Q4, in line with our forecasted improvements in adjusted EBITDA. Capital expenditure for the quarter was 3.1% of revenue, in line with expectations. In the quarter, we launched a new three year share buyback program for an aggregate of $50 million. During Q2, we repurchased approximately 2.7 million shares at an average price of $2.70.

本季我們的淨槓桿率維持在 2.7 倍。我們認為這是我們發展歷程中的高點，並預測該比率將在第三季度開始下降，並在第四季度繼續下降，這與我們預測的調整後 EBITDA 的改善相一致。本季資本支出佔營收的3.1%，符合預期。本季度，我們啟動了一項新的三年期股票回購計劃，總額為 5,000 萬美元。第二季度，我們以平均每股 2.70 美元的價格回購了約 270 萬股股票。

Let's turn to slide 10 and look at our 2025 outlook. Given the stronger than planned adjusted EBITDA margin in the first half of the year and the confidence we have in our outlook, we have increased the midpoint of our guided full year adjusted EBITDA margin range to between 5% and 5.5%.

讓我們翻到第 10 張投影片，看看我們對 2025 年的展望。鑑於上半年調整後 EBITDA 利潤率強於預期，我們對前景充滿信心，我們將全年調整後 EBITDA 利潤率預期範圍的中點提高至 5% 至 5.5%。

As for revenue, while we are confident we will demonstrate year-over-year revenue growth in the second half of this year, we will fall slightly short of revenue growth on a full year basis and have adjusted our full year adjusted revenue guide accordingly to between $3.1 billion and $3.2 billion. Our 2025 exit rates remain intact and at this point, can be used as a proxy for 2026.

至於營收方面，雖然我們有信心在今年下半年實現同比增長，但全年營收成長將略低於預期，因此我們已相應地將全年調整後營收預期調整為 31 億美元至 32 億美元之間。我們的 2025 年退出率保持不變，目前可以將其作為 2026 年的參考指標。

Expectations for Q3 2025 are as follows. We expect adjusted revenue to be sequentially higher than Q2 but slightly below Q3 2024, and expect adjusted EBITDA margin to be in the range of 5% to 5.5%, a sequential improvement versus Q2.

2025年第三季的預期如下。我們預計調整後的營收將比 2024 年第二季度略高，但略低於 2024 年第三季度，預計調整後的 EBITDA 利潤率將在 5% 至 5.5% 之間，比第二季度有所改善。

We continue to expect to post top line growth in the second half of the year and margin to expand as we work through our cost programs. These outlooks have not been adjusted for any Phase II divestiture activity and therefore, are representative of the company as it exists today.

我們預計下半年營收將持續成長，隨著成本控制計畫的推進，利潤率也將擴大。這些展望尚未根據任何二期資產剝離活動進行調整，因此代表了公司目前的狀況。

Turning to slide 11. We continue to make progress with Phase II of our portfolio rationalization strategy with a couple of transactions working through the marketing phase. We incrementally increased the total number of shares repurchased to [64 million] and are confident in achieving the $1 billion of capital deployment we committed to in early 2023. That concludes the financial review of second quarter 2025. And if you now turn to slide 12, I'll hand it back to Cliff for his broader view on the business. Cliff?

翻到第11張幻燈片。我們的投資組合合理化策略第二階段正在穩步推進，目前有幾筆交易正在進行市場推廣階段。我們逐步將回購股份總數增加到 6,400 萬股，並有信心實現我們在 2023 年初承諾的 10 億美元資本部署目標。2025年第二季財務回顧到此結束。現在請翻到第 12 張幻燈片，我將把鏡頭交還給克里夫，讓他從更廣闊的視角來看待這個行業。懸崖？

Thank you, Giles. Before we open it up for analyst questions, I'd like to share some thoughts on our business strategy and our optimistic view for the future. Look at our simplest sense, we said and continue to say that we'll tell you what we're going to do and then we'll do it. Q2 financials are yet another example of upholding our execution promise. We'll continue to do just that.

謝謝你，吉爾斯。在開放分析師提問環節之前，我想分享一些關於我們業務策略以及我們對未來的樂觀展望的想法。最簡單的道理就是，我們說過，而且一直都說，我們會告訴你們我們要做什麼，然後我們就會去做。第二季財務表現再次印證了我們履行執行承諾的決心。我們將繼續這樣做。

We previously said we pursue an optimized portfolio we have in our. We'd improve culture, operations and technology. We've done so, evidenced by awards by Newsweek as well as other culture and industry analyst awards, and dramatically improved retention as well as technology uptime.

我們之前說過，我們追求的是我們擁有的最佳投資組合。我們將改進企業文化、營運和技術。我們已經做到了這一點，新聞周刊以及其他文化和行業分析機構的獎項都證明了這一點，並且顯著提高了員工留存率和技術正常運行時間。

We pay down debt. we have and will continue to do so. We'd use available capital in a balanced way. We have and continue to also buy back shares. We'd improved margins and cash flow as we move out of the 2024 trough.

我們會償還債務。我們過去一直這樣做，將來也會繼續這樣做。我們會合理平衡地使用現有資金。我們過去和現在都會回購股票。隨著我們走出 2024 年的低谷，我們的利潤率和現金流都得到了改善。

We have done so and will continue to do more in 2026 as we hit those 2025 exit rates we described. We'd upgrade our talent with folks that have been there, done that. We have, and we recently bolstered talent in Commercial, administration and finance. We take cost out of the center. We have and will continue to do even more of that.

我們已經這樣做了，並將在 2026 年繼續加大力度，以實現我們所描述的 2025 年退出率目標。我們會引進有經驗、有成就的人才來提升我們的專業水準。我們已經加強了商業、行政和財務方面的人才儲備。我們降低了中心的成本。我們過去一直這樣做，將來還會繼續這樣做，而且會做得更多。

We said we'd leverage new government expectations. We've done that especially in our Transportation businesses, both Tolling and Transit and in the Government Fraud categories where we expect to see some more enhancement.

我們說過我們會利用政府的新預期。我們尤其在交通運輸業務（包括收費和公共交通）以及政府詐欺領域做到了這一點，我們預計在這些領域將會看到更多改進。

Finally, we said we'd use AI to strengthen our capabilities. We have evidenced by what we're seeing across the quality, efficiency and end user experience outcomes. In fact, we'll soon have a customer client AI experience center to enable further ideation and innovation in the AI space.

最後，我們表示將利用人工智慧來增強我們的能力。我們從品質、效率和最終用戶體驗等方面的成果已經證明了這一點。事實上，我們很快就會建立一個客戶人工智慧體驗中心，以促進人工智慧領域的進一步構思和創新。

Regarding AI, one of the underappreciated features of Conduent is that we manage end-to-end business processes for our clients and most of our solutions are delivered using Conduent's proprietary technologies and platforms. This uniqueness removes some risk of substitution from AI and in fact, allows us to leverage AI to create differentiation in our solutions and to create new adjacencies, such as our Fraud solution for Account takeover in the Government space.

關於人工智慧，Conduent 的一個被低估的特點是，我們為客戶管理端到端的業務流程，而我們的大多數解決方案都是使用 Conduent 的專有技術和平台交付的。這種獨特性消除了人工智慧被取代的一些風險，實際上，它使我們能夠利用人工智慧在我們的解決方案中創造差異化，並創造新的鄰近領域，例如我們針對政府領域的帳戶盜用詐欺解決方案。

Finally, what we are seeing in the Business Process Outsourcing and Technology-services market, is the juxtaposition of uncertainty and optimism. There's continued uncertainty in tariffs and what it means for organizations or will mean AI and exactly how organizations should capitalize on it. Government and legislative changes and what they mean or will mean.

最後，我們在業務流程外包和技術服務市場看到的是不確定性和樂觀情緒並存的局面。關稅方面仍然存在著許多不確定性，這對企業意味著什麼，或者對人工智慧意味著什麼，以及企業究竟應該如何利用它。政府和立法變化及其意義或將要產生的影響。

The economy and inflation and where things are headed. Interest rates and unemployment and how to react. Yet the market is blossoming for many, and companies see the green shoots of opportunity in all these factors. Innovation is still valued. Customers come first and most clients remain optimistic.

經濟、通貨膨脹以及未來的發展方向。利率和失業率及其應對措施。然而，對許多人來說，市場正在蓬勃發展，各公司都從這些因素中看到了機會的曙光。創新依然受到重視。客戶至上，大多數客戶依然保持樂觀。

The fundamentals still matter. So we're sticking to them. Transformations take some time, but here at Conduent, we are on track. At this stage, we have to stay consistent in saying what we'll do, doing it and continuing to tell our story.

基本面依然重要。所以我們堅持採用這些方案。轉型需要時間，但 Conduent 目前正按計劃進行。現階段，我們必須言行一致，說到做到，並繼續說我們的故事。

I hope you all hang in there with us on this journey because it's working. There are always puts and takes along the way, but again, the plan is working. The expectation is clearly around growth, cash flow, margin, lower debt and shareholder sentiment we can be proud of. As always, our associates will continue to work hard on behalf of our clients and their end users. It's never perfect when we strive for excellence every day.

我希望大家都能和我們一起堅持下去，因為這條路走得通。過程中總會有得有失，但總的來說，計劃是有效的。很明顯，我們的期望圍繞著成長、現金流、利潤率、降低債務以及讓我們引以為傲的股東信心。一如既往，我們的員工將繼續努力為我們的客戶及其最終用戶服務。當我們每天追求卓越時，永遠不可能完美。

Thank you for listening. We'll now open it up for questions. Operator?

謝謝聆聽。現在開放提問環節。操作員？

(Operator Instructions)

（操作說明）

Pat McCann, NOBLE Capital.

Pat McCann，NOBLE Capital。

Hey, congrats, and thanks on the quarter and thanks for taking my questions. My first question had to do with the Big Beautiful Bill. I was wondering if you could give any comments there as far as any potential impacts to the business, particularly around the SNAP program. It seems like maybe we can finally put some of that uncertainty around budget cuts and so forth behind us with regard to the business. I'm just curious if you could give a little bit of color there.

嘿，恭喜你，感謝你這季度的出色表現，也謝謝你回答我的問題。我的第一個問題與那項龐大而美麗的法案有關。我想請您就此事可能對企業造成的任何潛在影響，特別是對 SNAP 計劃的影響，發表一些看法。看來我們或許終於可以把圍繞預算削減等方面的商業不確定性拋在腦後了。我只是好奇你能不能給那裡加點顏色。

Thanks, Pat. Yeah. Listen, the Big Beautiful Bill at this stage, is more ideation than execution. I mean it's coming. But we see more opportunities than we see impediments, but it's uncertain. So if you look at some of the work requirements, some of the residency requirements, et cetera, that work has to be done by somebody.

謝謝你，帕特。是的。聽著，目前這個宏大而美好的法案更多的是構想，而不是執行。我的意思是，它終將到來。但我們看到的機會多於障礙，不過前景尚不明朗。所以，如果你看一些工作要求、一些居住要求等等，你會發現這些工作必須由某人來完成。

So regardless of whether you believe that Medicaid spending is going down or not going down that's sort of irrelevant to our business one way or the other. What's relevant to our business is whether we can capitalize on these new requirements and how we assess the implementation of those requirements on behalf of our clients.

所以，無論你認為醫療補助支出是在下降還是沒有下降，這都與我們的業務無關。與我們業務相關的是，我們能否利用這些新要求，以及我們如何代表客戶評估這些要求的實施。

So like I said, it's uncertain at this stage. We do believe that there is some fraud reduction opportunities, both in SNAP and in our open loop systems. Again, those are being rolled out regardless of the Big Beautiful Bill. So if anything, we -- as I said in my commentary, some of the green shoots of opportunity are resident within the bill, but the full implementation has not been enacted yet in a way that we can monetize.

正如我所說，目前情況尚不明朗。我們相信，無論是在 SNAP 計劃還是在我們的開放式系統中，都存在一些減少詐欺的機會。再次強調，這些措施的推出與《宏偉法案》無關。所以，正如我在評論中所說，該法案中蘊藏著一些機會的萌芽，但尚未以我們可以將其貨幣化的方式全面實施。

And with regard to the Commercial segment, could you talk a little bit about what are maybe the largest drivers of the new business signing momentum?

至於商業領域，您能否談談推動新業務簽約動能的最大因素是什麼？

It's been pretty consistent. Where we -- across our new logo or new capability and our add-on, I would say we're doing more in the new logo new capability arena in terms of performance on a relative basis. We've got to get our account managers hitting the stride in terms of that add-on because that's where the impact revenue comes from, meaning revenue that's produced within the year that you sell. So we're seeing pretty even consistency. I'd like to see better performance out of the account management team.

一直都很穩定。就我們的新標誌、新功能和附加功能而言，我認為我們在新標誌和新功能領域相對而言表現更出色。我們必須讓客戶經理在附加銷售方面步入正軌，因為這是影響收入的來源，指的是銷售當年產生的收入。所以我們看到的是相當穩定的一致性。我希望客戶經理團隊能有更好的表現。

We're seeing, as I said, good performance out of the new logo new capability on a year-over-year basis. But across the Board in Commercial we see an optimistic Q3 and we've got to hit our stride in all three of those categories.

正如我所說，我們看到新標誌和新功能每年都取得了良好的效果。但就商業領域而言，我們對第三季持樂觀態度，我們必須在所有這三個類別中都取得進展。

Great. And then finally, I was just curious with regard to the rationalization efforts, you mentioned there are a couple of potential news items in process right now. And I was wondering, timing-wise, could you give any more information in terms of should we expect any news between now and the end of the year? Or if there's any additional framing you could give, that would be great.

偉大的。最後，我還是很好奇關於合理化工作方面的情況，您提到目前有幾個潛在的新聞事件正在處理中。我想知道，從時間上看，您能否提供更多信息，例如從現在到年底我們是否會有新消息公佈？如果您還能提供其他方面的補充說明，那就太好了。

Yeah. Thanks for the question, Pat. I don't want to get too far out over my skis on this one. Let me just say that there is work underway. As we have said in the past, we're looking to find ways to improve the balance sheet, improve cash flow, improve margins and whatever we do kind of hits the mark in those areas.

是的。謝謝你的提問，帕特。我不想在這件事上滑得太遠。我只想說，相關工作正在進行中。正如我們過去所說，我們正在尋求改善資產負債表、改善現金流、提高利潤率的方法，我們所做的任何事情都能在這些方面取得成效。

We think there are opportunities across the portfolio, some more closer to the boat than others. So let me just say that there's work underway without being more explicit. Do I think something is going to happen by the end of the year? I certainly hope so and believe so.

我們認為投資組合中存在投資機會，有些機會比其他機會更接近目標。所以我就簡單說一下，目前有一些工作正在進行中，我就不多說了。我認為到年底前會發生什麼事嗎？我當然希望如此，也相信如此。

Great. Thank you so much.

偉大的。太感謝了。

Gowshi Sriharan, Singular Research.

Gowshi Sriharan，奇異研究。

Good morning, guys. Can you hear me?

各位早安。你聽得到我嗎？

Yeah, we got you.

是的，我們罩著你。

Good morning. As this AI-driven solutions become a meaningful part of your offering, are you seeing any pull effect where clients who initially buy a compliance or fraud solution then expand into other Conduent services?

早安.隨著人工智慧驅動的解決方案成為您產品的重要組成部分，您是否觀察到任何拉動效應，即最初購買合規或反詐騙解決方案的客戶隨後擴展到其他 Conduent 服務？

Yeah. I mean if you look at what we're doing in AI, in the past, I've said that by the AI was sort of in preparation mode. We're now in execution mode across eight key initiatives where we're actually in production. And Fraud is one of those in the Government space, specifically in our open loop system, which we're now trying to migrate to our closed-loop SNAP solution. But we're seeing -- we're not talking to clients that are saying give me AI, give me AI, what we're seeing is clients saying, give me efficiency, give me quality improvement, give me process improvement and AI is a good way to do it.

是的。我的意思是，如果你看看我們過去在人工智慧領域所做的事情，我曾經說過，當時人工智慧處於某種準備階段。我們目前正處於八項關鍵計劃的執行階段，這些計劃實際上已經投入生產。詐欺是政府領域面臨的問題之一，尤其是在我們的開放式系統中，我們現在正試圖將其遷移到我們的閉環 SNAP 解決方案。但我們看到——我們並沒有遇到說“給我人工智慧，給我人工智慧”的客戶，我們看到的是客戶說“給我效率，給我品質改進，給我流程改進”，而人工智慧是實現這些目標的好方法。

We've got it in our customer-facing environments like Life At Work. We've got them across our Transportation business. As I mentioned, Government Fraud, Pharma. And certainly, like everyone else in our contact centers, we're seeing a lot of AI improvements around voice translation, around improved IVRs, et cetera. So the real answer is it's everywhere.

我們在面向客戶的環境中，例如「工作生活」中，已經應用了這項技術。我們在運輸業務的各個環節都採用了這種模式。正如我所提到的，政府欺詐，製藥。當然，和我們呼叫中心的其他人一樣，我們看到人工智慧在語音翻譯、改進的互動式語音應答系統等方面取得了巨大的進展。所以真正的答案是：它無所不在。

Process improvements in our scanning and indexing. And it's -- as I mentioned in the commentary, it's here to stay. Now the question is, how do you -- we're not an AI company. We're an implementer of AI technology to try and prove that improvement in quality, efficiency and that end user experience. So it's across the Board, Gowshi Sriharan. No one area, including fraud is any more important than the others.

改進掃描和索引流程。正如我在評論中提到的，它將長期存在下去。現在的問題是，我們該如何——我們又不是一家人工智慧公司。我們是人工智慧技術的實施者，旨在證明其在品質、效率和最終用戶體驗方面的改進。所以是全面性的，高希·斯里哈蘭。包括反詐欺在內的任何一個領域，都不比其他領域更重要。

Okay. And on the regulatory industry development as Medicaid redetermination cycle, snap flood crackdowns. Do you think the market is substantially underestimating this as a revenue catalyst in the next 6 months to 12 months?

好的。以及監管行業的發展，例如醫療補助重新評估週期，以及突如其來的嚴厲打擊。你認為市場是否嚴重低估了這在未來 6 到 12 個月內對營收成長的推動作用？

It's a good question. It's an unknown answer at this point. I believe, as I said earlier, there's real opportunity. The states can't do the work by themselves. They have to outsource that work to folks like us. They can't determine eligibility. They can't determine work requirements. They can't determine residency requirements without phone calls and e-mails and chats, et cetera, and that's what we do on behalf of the states for the Medicaid eligibility work.

這是個好問題。目前尚無答案。正如我之前所說，我相信這裡蘊藏著真正的機會。各州無法獨自完成這項工作。他們不得不把這項工作外包給我們這樣的公司。他們無法確定資格。他們無法確定工作要求。如果沒有電話、電子郵件、聊天等方式，他們就無法確定居住要求，而這正是我們代表各州進行醫療補助資格認定工作時所做的。

So the answer should -- to your question should be, yes. But it all is contingent upon how states roll out the implementation of -- and the speed at which they roll out the implementation of these regulatory requirements that have been put down by the federal government.

所以，你問題的答案應該是──是的。但這一切都取決於各州如何實施——以及以多快的速度實施聯邦政府制定的這些監管要求。

Okay. And for talent acquisition, you've highlighted Newsweek's most loved plays. Have you seen materially lower attrition rate for critical roles? Or is the wage pressure still an offsetting factor, because I think you mentioned that as you scale new offerings?

好的。在人才招募方面，您重點介紹了《新聞週刊》最受歡迎的劇目。關鍵職位的人員流失率是否顯著降低？或者說，薪資壓力仍然是抵銷因素嗎？因為我記得你提到過，隨著新產品的推出，薪資壓力也會增加。

Yes, it's a great question. I would say the wage pressure is more muted than I would have said a year ago. Our retention is improved. Our attrition is lower than it was on a consistent basis that what we grade, for lack of a better way to orient people, we have 12 grades in our upper grades with, let's say, 9 through 12, which are the most senior folks in our company. We've seen much lower attrition. But talent is always competitive. Money will always matter. The culture will always matter.

是的，這是一個很好的問題。我認為，目前的工資壓力比一年前小得多。我們的客戶留存率提高了。我們的員工流動率一直低於以往，因為我們對員工的等級劃分（為了便於理解，我們暫且這樣劃分）是這樣的：我們的高級員工分為 12 個等級，比如說 9 到 12 級，他們是我們公司資歷最深的員工。我們看到人員流失率大大降低。但人才總是充滿競爭的。金錢永遠都很重要。文化永遠都很重要。

And we're never going to stop trying to get the best talent we can in order to do the best job we can. And we've -- as I mentioned earlier, we've done a lot of work in our commercial space, especially, we're doing work in our public sector space. And so the talent is critical. But the direct answer to your question is, yes, we've seen some lower attrition and some muted salary expectations compared to the where it was a year ago.

我們永遠不會停止努力，我們會盡一切可能招攬最優秀的人才，以便把工作做到最好。正如我之前提到的，我們在商業領域做了很多工作，尤其是在公共部門領域，我們正在努力。因此，人才至關重要。但對於你的問題，直接回答是，是的，與一年前相比，我們看到員工流失率下降，薪資預期也有所降低。

I'll make this my last question. Given that you guys are in your inflection point with the ongoing portfolio actions and a stated goal of unlocking shareholder value, what should the investors watch for in terms of the strategic shift in the Board-driven initiatives under the Harsha Agadi's chairmanship?

這是我最後一個問題。鑑於貴公司正處於轉型期，正在進行投資組合調整，並已明確提出釋放股東價值的目標，投資者應該關注在 Harsha Agadi 擔任主席期間，董事會主導的各項舉措的戰略轉變的哪些方面？

Let me go first and then if Giles has any monetary implications. Look I wouldn't overreact to the Board changes. The timing was right to make the Chairman role. We're constantly examining the Board constituency. We're constantly examining the right experience base for potential Board members to make sure we've got the right team on the field.

讓我先說，然後再問吉爾斯是否涉及任何金錢方面的問題。你看，我不會對董事會變動反應過度。現在正是設立主席職位的合適時機。我們一直在研究董事會成員組成。我們一直在檢視潛在董事會成員的經驗背景，以確保我們擁有合適的團隊。

I will say that Scott Letier has done a fantastic job leading and mentoring in some very tough times, including when the Icon folks were in the stock. So we're very appreciative of that hard work. But after four years, it was time to start changing things out.

我必須說，斯科特·萊蒂爾在一些非常艱難的時期，包括Icon公司股票被套牢的時候，都出色地完成了領導和指導工作。我們非常感謝他們的辛勤付出。但四年後，是時候做出改變了。

The new chairman comes with lots of experience, four times, five times, six times as a CEO, big investment profile, several Boards, including Chairman of several big companies to include a claims company, an oil servicing company, et cetera. So we're pleased with where we are. We're not done looking at opportunities in terms of Board constituencies, but I wouldn't expect any significant outcomes strategically otherwise from the move.

新任董事長經驗豐富，曾四次、五次、六次擔任首席執行官，擁有豐富的投資經驗，曾擔任多家公司的董事，包括一家索賠公司、一家石油服務公司等。所以我們對目前的狀況很滿意。我們尚未停止從董事會成員的角度考察各種機會，但除此之外，我不認為此舉會在策略上帶來任何重大成果。

Yeah. I think the near-term objectives remain the same. We are a complete Phase II of the portfolio rationalization. We've continued to improve our margin sequentially. And then a balanced approach to the capital as it comes in from the divestitures and how we deploy it.

是的。我認為近期目標保持不變。我們已全面完成投資組合合理化的第二階段。我們的利潤率持續季增。然後，對於透過資產剝離獲得的資金以及如何部署這些資金，採取平衡的方法。

Thank you so much. That's all I had. Thank you, guys, and good luck.

太感謝了。這就是我全部的家當。謝謝各位，祝你們好運。

Thank you.

謝謝。

Marc Riddick, Sidoti & Company.

馬克·里迪克，西多蒂公司。

Hey, Marc.

嘿，馬克。

Good morning. I wanted to start maybe -- I think you've talked in the past about your efforts to gain a greater share of wallet. Maybe if you could give a little bit of an update there as to what you're seeing with those efforts as well as maybe how that sort of plays out with the competitive landscape and maybe what you're seeing there?

早安.我想先從——我想你過去曾談到你為獲得更大的市場份額所做的努力。您能否簡要介紹一下您在這些努力方面取得的進展，以及這些努力在競爭格局中產生了怎樣的影響，以及您觀察到的情況？

Yeah, Marc, I think Cliff alluded to this a little bit earlier, but some of the investments that we've made in the commercial space with new leaders in our client partner strategies. Over the last two quarters, we've written, I think it's over 40 new capabilities with existing clients, which is expanding share of wallet with some of the bigger clients that we have in the commercial space.

是的，馬克，我想克里夫之前也稍微提到過這一點，我們在商業領域進行的一些投資，以及我們在客戶合作夥伴策略中培養的新領導者。在過去的兩個季度裡，我們為現有客戶開發了 40 多項新功能，這提高了我們在商業領域一些大客戶的錢包份額。

So we see early shoots of that working, and we've certainly got aspirations and expectations of a continuation of driving new capabilities in our existing client base as we move into Q3 and Q4. So I think that piece is working. We just need to see more of it.

因此，我們看到了這種做法的初步成效，並且我們當然希望並期待在進入第三季和第四季時，繼續為我們現有的客戶群帶來新的能力。所以我覺得這部分效果不錯。我們需要看到更多這樣的作品。

Yeah. I mean this land and expand kind of methodology that Giles just alluded to is a secret sauce in the commercial space specifically with respect to new capabilities. But the share of wallet has two forms to it. Of course, the products and services, which we are increasing on a per client basis from the -- in the neighborhood of the [$1.5 billion], [$1.6 billion] up to -- towards two products per client.

是的。我的意思是，吉爾斯剛才提到的這種「佔領市場並擴張」的方法，是商業領域，特別是開發新功能方面的一個秘訣。但錢包份額有兩種形式。當然，我們正在增加每位客戶的產品和服務，從約 15 億美元、16 億美元增加到每位客戶兩件產品。

Obviously, the bigger the client, the more products. The smaller the client, the fewer. But that's one component of the share of wallet is really important. The other component is this is a volume-driven business in many cases. And so once we're resident with a client, we've got to retain as much of that volume as we can. And some of that is episodic based on the economy just on the environment.

顯然，客戶越大，產品就越多。客戶規模越小，數量越少。但錢包份額的其中一個組成部分確實非常重要。另一方面，在很多情況下，這是一個以銷售為導向的行業。因此，一旦我們與客戶建立了合作關係，我們就必須盡可能保留客戶量。其中一些是偶發性的，取決於經濟和環境狀況。

Some of it is based on performance. And so that's why operational stability is so important to us, and we work hard every day to make sure that, that technology uptime, that the operational stability is solid because clients have choices, and they can move volume around. We're not the only partner out there that they can give the volume to. So it's both. It's -- we got to get in and sell. We're going to drive more share of wallet from a product perspective but we've got to retain those clients in that volume, irrespective of what happens in the economy. So we're doing both as hard as we can anyway.

部分取決於表現。所以，營運穩定性對我們來說非常重要，我們每天都努力確保技術正常運作時間和營運穩定性，因為客戶有選擇權，他們可以靈活地調整業務量。我們並不是他們唯一可以分擔銷售的合作夥伴。所以兩者都是。我們必須進去賣。我們將從產品角度提高客戶錢包份額，但無論經濟狀況如何，我們都必須保持現有客戶的購買量。所以無論如何，我們都在盡力做好這兩件事。

Great. And then I wanted to -- I think in your prepared remarks, Cliff mentioned as far as some commercial activity that you -- I think you're expecting the shift out of that -- you think shift out of Q2 into maybe Q3 or the remainder of the year. Could you give us maybe a little color on maybe some of that? And do you get the sense that was just kind of more delays in client activity. Is that sort of headline driven? Or was there something else there we should be thinking about?

偉大的。然後我想——我認為克里夫在你準備好的發言稿中提到了一些商業活動，你——我認為你預計這些活動會從第二季度轉移到第三季度或今年剩餘的時間。您能否就此稍作補充說明？你是否感覺這只是客戶活動方面的一些延誤？這是為了博取眼球嗎？或者，還有其他我們應該考慮的因素嗎？

Yeah. There's no magic one client deal out there that say, oh, and this one hits, it's going to be the big one. That's not what I was referring to. But there are lots of -- Mike McDaniel, our Head of Commercial, were here, he'd tell you there are lots of deals that he and his team are working that are very close to signing where we have the spirit and intent and sort of verbal commitment to get these deals. And some of those are just pushing to Q3.

是的。沒有哪個神奇的客戶交易能說，「哦，這個交易成功了，它就會變成大單」。我指的不是這個。但有很多——我們的商務主管邁克·麥克丹尼爾（Mike McDaniel）在這裡，他會告訴你，他和他的團隊正在努力促成很多交易，這些交易都非常接近簽署，我們有決心、有意願，並且已經口頭承諾要達成這些交易。其中一些項目只能推遲到第三季完成。

And that's why we're expecting a better performance out of Commercial in Q3, speaking specific to Commercial. We also have to do a little better job in Government and Transportation has been going well. Government is also pushed to the right a little bit with a very solid pipeline. Those contracts take longer to execute. And so we're expecting more out of the Government team in the second half of the year as well.

因此，我們預期商業業務在第三季會有更好的表現，這裡特別指商業業務。政府方面也需要做得更好一些，交通運輸方面則進展順利。政府也因為一條非常穩固的輸油管而略微向右傾斜了一些。這些合約需要更長時間才能執行。因此，我們也期待政府團隊在今年下半年能有更好的表現。

Thank you very much.

非常感謝。

Alright. Thanks, Marc.

好吧。謝謝你，馬克。

Thank you. We have reached the end of our question-and-answer session. And with that, ladies and gentlemen, we appreciate your participation. This does conclude today's teleconference. Please disconnect your lines at this time, and enjoy the rest of your day.

謝謝。我們的問答環節到此結束。女士們、先生們，感謝各位的參與。今天的電話會議到此結束。請暫時斷開您的線路，祝您今天餘下的時間愉快。