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Conduent's Q1 2025 results paint a mixed picture for the business process services player, with encouraging margin improvement set against a backdrop of significant falls in revenue.
The firm reported adjusted revenue of $751m, down -8.5% YoY, whilst adjusted EBITDA margins increased by 50 basis points to 4.9%. This margin improvement, ahead of management expectations, suggests the company's efficiency programmes are beginning to deliver tangible results.
New business signings ($109m) and net ARR activity metrics ($116m for trailing twelve months) both improved YoY, providing some early indicators that future growth prospects may be stabilising. However, these pluses are tempered by some worrying cash flow numbers, with operating cash flow deteriorating by -56.8% compared to Q1 2024 – explained by management as being “negatively influenced by several one-time events in 2024”.
Management remains optimistic on achieving their portfolio rationalisation target of over $1bn in deployable capital, maintaining their previously outlined 2025 exit rate targets (see Further divestment at Conduent. The firm also continues to secure contracts in transportation, healthcare and government services, whilst advancing its AI capabilities through traditional and GenAI applications. For example, the company launched Conni, an GenAI virtual assistant, designed to strengthen quality of inquiry results and improve CX across Conduent’s client platforms.
Despite macroeconomic uncertainties, CEO Cliff Skelton suggests Conduent's business segments remain relatively insulated from broader economic challenges, with the company reaffirming its full-year outlook.
Posted by: Marc Hardwick at 08:17
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results