Conduent Incorporated

Greetings and welcome to the Conduent First Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Joshua Overholt, Vice President of Investor Relations. Please go ahead.

Thank you, Operator. And thank you, everyone, for joining us today to discuss Conduent's first quarter 2026 earnings. I am joined today by Harsha Aghadi, our CEO, and Giles Goodburn, our CFO. We hope you have had a chance to review our press release issued earlier today. 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 8K. This information, as well as the detailed financial metrics package, are available on the investor relations section of the Conduent website. 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. This information presented today includes non-GAAP financial results, 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 and how we use them, as well as the limitations to their usefulness, for Comparative Purposes, please see our press release. And now I'd like to turn the call over to Harsha.

Harsha Patel- Thank you, Josh. I want to welcome all our investors, analysts, and colleagues around the world to the call. I am confident you will be encouraged by what you will hear as we discuss Conduent's first quarter results and the steps we've taken to improve the pace and discipline of our execution. I want to say good morning, good afternoon, and good evening to our 48,000 conduit colleagues across the globe. I have now been CEO for 115 days and continue to hear from our clients about all your efforts on their behalf. Thank you. And we will keep working to enhance our client operations. As I speak, With our clients, they value a combination of our technological capabilities and the human connection our employees demonstrate to make services seamless and predictable each and every time. Again, thank you and keep driving innovation for our clients. My commentary today will focus on three areas. I will give you an update on the priorities I laid out on the Q4 call. To be clear, the priorities remain unchanged. The five priorities are reduce our cost structure, convert pipeline to growth, optimize the portfolio, increase speed and accountability, and enforce financial discipline. Second, I will provide an update on our AI initiatives in both public sector and commercial. Finally, I will share some details on deals won in the quarter that in aggregate exceed $100 million. In the Q4 earnings call, I had highlighted five priorities for conduit. In Q1, we executed well on reducing our cost structure. We reported adjusted EBITDA margins of 6.8 percent, a marked improvement to last year. In addition, we have initiated a detailed review of our cost structure, engaging two external advisors, and through this work, identified significant potential opportunities. Our initial assessment is that we can reduce $100 million of costs in the next 18 months. This, ladies and gentlemen, is just the beginning. As I highlighted in the Q4 earnings call, I believe that Conduent should have EBITDA margins north of 10%. Our pipeline continues to grow at a robust pace, and with the changes we have made in commercial leadership and improvements we have made in our go-to-market strategy, we should see an improvement in pipeline conversion in the back half of the year. Our go-to-market strategy now across the company is focused on five approaches. The first is cross-selling to our existing clients. Second is the restructuring of our sales incentives. Third is larger defense. Fourth is winning new logos. And fifth is the establishment of a deal desk. As relates to commercial, the go-to-market changes include a much narrower focus on the healthcare and financial services sectors, meaningful relationships with CEOs across the commercial landscape, and an increased focus on innovative solutions solving client pain points. In public sector, we have reengaged in the federal space to focus on health and human services as well as other target agencies. This aligns with the current administration's focus on greater efficiencies as they deliver cost-effective services for the citizens of the United States. We believe we are well positioned to compete for these opportunities. For portfolio optimization, I continue to be confident that we can achieve improvements in margins and efficiency of our business as we focus our business and prioritize investment in growth segments. As you will see in a later slide, we believe proceeds from identified divestitures in 2026 should be north of 200 million. Regarding speed and accountability, first, we simplified our leadership team. Second, we have developed new processes to make quicker decisions, resulting in speed of implementation, post-contract signing. This should allow us to reduce working capital and generate revenues and ultimately cash flow from more quickly. And my final priority is to enforce financial discipline, which is evidenced by not only the 6.8% adjusted EBITDA margins in Q1, but also increased rigor on capital expenditures and cash management, which helped deliver a $50 million improvement in operating cash flows year over year. I want to give a little more color today on our AI initiatives, past, present, and future. At Conduent, we deliver end-to-end business process solutions using technology with our deep domain expertise, which positions us to use AI as a differentiator. On this slide, we have laid out three use cases we have developed AI Against. As we look at the examples here across the top, it shows problems we've solved with AI. First is fraud and risk management. Initially, we deployed machine learning models for payment fraud detection. We currently have deployed GenAI plus rules-based AI to improve account takeover detection, and we're also expanding into other fraud vectors to manage risk. In the future, we believe we can take these AI solutions and scale them into other forms of fraud prevention. In customer and citizen interaction, we initially implemented IVR for routing and cell service as well as chatbots and analytics to drive improvements in cost and service. We have now added GenAI Assistant agent assist to reduce handle time. We have also expanded Kani, our very own branded GenAI chatbot, to power a personalized benefits experience in the human capital solution space. In the future, we're working to deploy other agentic AI solutions, driving more autonomous conversational experiences. As we move to the third column, we see a combination of workforce and productivity enhancing solutions, including AI assisted coding and further scaling of these tools in the future. I want to be clear. Conduent has not been standing still as it relates to AI. We are implementing AI as appropriate in solutions, and we are using AI to improve our own cost structure. In conclusion, I want to highlight our sales wins for Q1. As a company, we had 114 million in sales wins. These wins highlight our capabilities and our deep client relationships. Commercial segment signed more than $48 million in new business in Q1, including significant contracts with three longstanding healthcare clients, demonstrating Conduent's continued strength in this sector. In the public sector segment, we signed more than $66 million in new business in Q1. This was driven by a large deal in the government Medicaid claims for $23 million in new business. Now, I will hand it over to Giles for the detailed financial review.