Conduent Q3 2025 Earnings Call Transcript

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Provided by Quartr
November 7, 2025

Key Takeaways

  • Positive Sentiment: Adjusted EBITDA came in at $40 million with a 5.2% margin (up 110 bps YoY), and management said EBITDA and margin met their guidance expectations.
  • Negative Sentiment: Adjusted revenue was $767 million, down 1.8% year‑over‑year, and full‑year 2025 revenue guidance was narrowed to $3.05–3.10 billion as commercial weakness and government timing delays weigh on top‑line growth.
  • Negative Sentiment: Adjusted free cash flow was negative $54 million this quarter, cash on hand was ~$264 million, and net leverage rose to 3.2x driven by billing delays and higher contract assets (~$168M) pending federal approvals.
  • Positive Sentiment: Sales momentum showed signs of strength: $111 million of new ACV, new business TCV up 5% YoY, a qualified ACV pipeline of $3.4 billion (up 9% YoY), and transportation revenue grew 14.9% YoY with recent transit wins.
  • Positive Sentiment: Management emphasized a shift toward technology and AI—initial software licensing wins, an AI experience center, and deployed GenAI solutions (fraud detection, agent assist, claims indexing) that they expect to drive margin expansion and new revenue opportunities.
AI Generated. May Contain Errors.
Earnings Conference Call
Conduent Q3 2025
00:00 / 00:00

Transcript Sections

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Operator

Greetings and Welcome to the Conduent Third Quarter 2025 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 your host, Joshua Overholt, Vice President of Investor Relations. Thank you. You may begin.

Joshua Overholt
Joshua Overholt
Head of Investor Relations at Conduent

Thank you, Operator, and thank you for everyone joining us today to discuss Conduent's Third Quarter 2025 earnings. I am joined today by Cliff Skelton, our President and CEO, and Giles Goodburn, our CFO. We hope you had a chance to review our press release issued earlier this morning. 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. 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 vary materially from these statements.

Joshua Overholt
Joshua Overholt
Head of Investor Relations at Conduent

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. 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 and how we use them, as well as the limitations to their usefulness for comparative purposes, please see our press release. I would like to turn the call over to Cliff.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

Thank you, Josh, and thank you, everyone, for joining Conduent's Q3 2025 earnings presentation. As you can tell, Josh Overholt is now our new Head of Investor Relations. We've been waiting for Josh to arrive from the other side, if you will, where Josh was part of an investment team we periodically communicated with. It's great to now have Josh's advice as our new Head of FP&A and Investor Relations. Let me start by saying, wow, it's been kind of an uncertain ride in our federal government lately, as you all know, with the shutdown. I've often said that the bulk of our business in the public sector is at the state and local level, even though some of the funds the states distribute come from the federal government, obviously.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

We're lucky enough that most of these funds are entitlements unaffected by shutdowns, although SNAP, for example, can come with some concern. We were told as recently as yesterday that the emergency fund allotment is now at 65% and includes our administrative fees, so that's good. So far, we haven't seen an impact due to unfunded programs, but we have seen an occasional wait-and-see perspective from time to time on new deals and milestones. Regarding the quarter, from a financial perspective, it was a good quarter as it relates to adjusted revenue, EBITDA, and margin. We're proud of our performance given the current environment, and we're equally proud to see consistent sales performance in an expanding sales pipeline. Revenue was in line with guidance, slightly up sequentially to $767 million and directly in line with our pursuit of positive year-over-year growth objectives.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

Giles will talk about the puts and takes in revenue in a few minutes. EBITDA also came in as per guidance with both year-over-year and sequential improvement at $40 million and a margin of 5.2%, up from 4.9% last quarter and 4.1% in Q3 of 2024, and exactly where we said it would land in our Q2 narrative. Regarding sales, performance was consistent and steady year-over-year, amidst some reticent buyers who were a bit preoccupied with the government shutdown in the public space specifically. Meanwhile, commercial sales is a bit behind performance expectations as we focus on changes to our go-to-market approach and look to upgrade business development leadership. Still, there is pent-up demand in the commercial space, and the pipeline is expanded and will expand further.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

As mentioned previously, the opportunities and momentum in our transportation business specifically remain strong, and the government pipeline indicates some very strong buying signals and go-forward opportunities. Once the shutdown concerns are behind us, cash and milestone achievement hurdles will also open up and manifest. In previous earnings, I stated that our portfolio rationalization efforts were underway, and those efforts continue in a manner that we hope to discuss no later than Q4 earnings as we continue our strategy work. Meanwhile, as you know, we've refinanced our revolving credit facility, allowing us to pay off our term loan A balance, further simplifying the balance sheet. Again, the timing of milestone payments in the shutdown-influenced environment should soon free up cash payments and improve the free cash flow metrics in cash on the balance sheet.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

As we look to right-size our board and further populate it with folks that have been in our industry, we added a new board member the last week of October, who is the former chair of Deloitte U.S., Mike Fucci. We're confident that Mike will add new perspective and new support across both the commercial and government businesses based on his background and leadership experience. Now, I'll talk in my closing remarks about our AI initiatives and some of our recent wins. This will be important because one of the topics we need to focus on is our technology strength versus our operational peers. We need to showcase our significant capabilities and the resident AI initiatives more forcefully.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

A recent proof point is that we're now beginning to actually license some of our software with built-in AI to our clients, proving that we aren't strictly a services company, but a service technology integrated business that has proprietary intellectual property far and away more impressive than our BPaaS competition. One example of how we're showcasing our capabilities is our recently developed AI experience center in New Jersey, which we're beginning to socialize with some of our biggest clients in the healthcare and auto manufacturing businesses. Meanwhile, Giles will take you through the detailed financials. We are still directly on course despite some of that lumpiness that happens, especially in the government space. Finally, with patience, you'll soon see that our portfolio rationalization plan is clearly underway and working. With that, let me turn it over to Giles. Giles?

Giles Goodburn
Giles Goodburn
EVP and CFO at Conduent

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 five and six. We signed $111 million of new business ACV in the quarter, consistent with prior year. Year-to-date 2025, new business ACV is up 5% versus the same period in 2024. While we have line of sight to achieve stronger sales this year than in 2024, the uncertainty surrounding the speed to execute agreements within the government agencies could push some deals into 2026. Within the quarter, we signed 10 new logos and 25 new capabilities, both sequentially up versus Q2, and on a combined basis, up 7% year-to-date versus the prior year, with the strength coming from supporting our existing client base with new capabilities.

Giles Goodburn
Giles Goodburn
EVP and CFO at Conduent

New business TCV was up 5% versus the prior year at $246 million. This was another strong quarter of sales execution in our transportation business, which includes the Richmond Metropolitan Authority new logo win and puts that segment up 320% year-to-date versus 2024. Our qualified ACV pipeline remains strong at $3.4 billion, which is up 9% year-over-year. The strength here is driven by our government segment as we pursue opportunities in the federal space. Let's turn to slide seven and review the Q3 2025 P&L metrics. Adjusted revenue for Q3 2025 was $767 million, compared to $781 million in Q3 2024, down 1.8% year-over-year, but within the range that I guided last quarter. Transportation generated another quarter of strong growth. However, the decline was driven by our commercial and government segments, which I'll discuss in more detail in a moment.

Giles Goodburn
Giles Goodburn
EVP and CFO at Conduent

While still down year-over-year, we continue to narrow the gap towards positive revenue growth. Adjusted EBITDA for the quarter was $40 million as compared to $32 million in Q3 2024, and our adjusted EBITDA margin of 5.2% is up 110 basis points year-over-year, again, right in line with where we guided and a sequential step up versus last quarter. Let's turn to slide eight and review the segment results. The Q3 2025 commercial segment adjusted revenue was $367 million, down 4.7% as compared to Q3 2024. We continue to experience volume declines in our largest commercial client, which is a significant contributor to the lower revenues. Excluding this largest client, our top 25 commercial accounts grew year-over-year, most notably from within our healthcare vertical. We also signed another software license agreement in the quarter to a large public health plan, but these positives only partially offset the lost business.

Giles Goodburn
Giles Goodburn
EVP and CFO at Conduent

Commercial adjusted EBITDA was $37 million, and the adjusted EBITDA margin of 10.1% was up 100 basis points year-over-year. The drivers here were the software license agreement I just mentioned and cost efficiency programs, more than offsetting margin from lost business. Government segment adjusted revenue for the quarter was down 6.7% at $238 million. This decline is attributed to the impacts associated with completing several implementations in the prior periods and extending several implementations in the current period, as well as a client canceling an implementation to perform the work in-house. Adjusted EBITDA was $61 million, slightly higher than prior year, with adjusted EBITDA margin of 25.6%, up 210 basis points versus Q3 2024. The drivers here resulted from our AI initiatives and efficiency programs, resulting in lower fraud, labor, and telecom expenses, offsetting the negative implementation impacts.

Giles Goodburn
Giles Goodburn
EVP and CFO at Conduent

Transportation segment adjusted revenue was $162 million for the quarter, an increase of 14.9% year-over-year, while adjusted EBITDA was $4 million, and adjusted EBITDA margin was 2.5% for the quarter, up 250 basis points versus Q3 2024. Both revenue and EBITDA improvements were driven by strong equipment sales in our international transit business. Unallocated costs were $62 million for the quarter versus $63 million in Q3 2024. The improvement here is driven by our cost efficiency programs in the corporate functions, which more than offset significantly higher employee healthcare claims activity we experienced in the quarter. Let's turn to slide nine and discuss the balance sheet and cash flow.

Giles Goodburn
Giles Goodburn
EVP and CFO at Conduent

During the quarter, we completed the refinancing of our revolving credit facilities by amending the credit agreement, allowing us to prepay in full the term loan A, reduce the revolving credit facility to $357 million, of which $187 million extends to 2028 and $170 million continues to mature in 2026. We also added a $93 million performance line of credit facility maturing in 2028. We utilized the revolving credit facility to prepay the term loan A, and at the end of the quarter, I had $198 million unused. We ended the quarter with approximately $264 million of total cash on balance sheet, and adjusted free cash flow for the quarter was -$54 million. Free cash flow in the quarter was impacted by a number of timing items.

Giles Goodburn
Giles Goodburn
EVP and CFO at Conduent

Firstly, we are still awaiting a number of contract amendments being approved by federal government agencies, which, given the current environment, is taking longer than usual and is a prerequisite for us billing clients for work already performed. Secondly, we are in the post-implementation phase for a couple of contracts in the government and transportation segments, which, once stabilized, will allow us to routinely bill and collect for steady-state operations and maintenance activity, as well as bill the final milestones. The combination of these two factors are the reason for the increase in both our contract asset and accounts receivable balances compared to last quarter. Of the $168 million contract asset balance at the end of Q3, we expect to bill over $100 million by the end of Q1 2026, assuming the federal government resumes a more normal level of operations.

Giles Goodburn
Giles Goodburn
EVP and CFO at Conduent

Our net leverage ratio increased to 3.2x this quarter, which was a result of the cash flow items I just referenced. Capital expenditure for the quarter was 3.8% of revenue, and we repurchased approximately 4.7 million shares in the quarter at an average price of $2.70. Let's turn to slide 10 and look at the 2025 outlook. At the beginning of 2025, we guided the year under the assumption of broad, stable macroeconomic conditions. During the third quarter and entering into Q4, we are starting to feel the impact of a reduced federal government workforce in certain agencies, delaying the progression of RFPs and contract approvals, compounded by the current extensive government shutdown, which in combination creates greater ranges of variability and predictability in where we will finish the year financially.

Giles Goodburn
Giles Goodburn
EVP and CFO at Conduent

The good news is we still believe we will achieve the adjusted EBITDA margin range of between 5% and 5.5%. However, we now believe adjusted revenue for the year will be between $3.05 billion and $3.1 billion, and adjusted free cash flow will be dependent on the timing items I referenced earlier. As we enter the final stages of 2025 and the three-year exit rate targets established back in 2023, we feel we are making good progress with the business and will lay out 2026 expectations when we deliver Q4 earnings in February next year. Turning to slide 11, we continue to make progress with phase two of our portfolio rationalization strategy, and as Cliff stated, we will provide further updates no later than our Q4 earnings.

Giles Goodburn
Giles Goodburn
EVP and CFO at Conduent

We incrementally increased the number of shares repurchased to approximately $70 million and are confident in achieving the billion dollars of capital deployment we committed to in early 2023. That concludes the financial review of third 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?

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

Thank you, Giles. As always, a couple of closing comments prior to taking questions. Our revenue continues to reflect the puts and takes of our transformational journey, while, as you can see, adjusted EBITDA and margin are meeting expectations on the high end and continue to be predictable. You can now tell that we remain on track for the 2024 to 2025 EBITDA expansion we've been talking about, where we said you should expect a significant increase and then continued year-over-year increases in adjusted EBITDA and margin. Meanwhile, we're focused on revenue and conversion of working capital to cash for the remainder of 2025 as areas somewhat inhibited by a weaker start in commercial sales and, as mentioned, some deal pushes in the government space associated with the timing of milestone recognition and what was in anticipated government shutdown in late Q3.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

But again, much demand remains pent up and on the horizon. Some tactics we have underway are as follows. We revised our commercial go-to-market and leadership model to take out layers and produce increased opportunities to penetrate our current client base. We're enhancing sales and revenue generation talent to open new doors with proven leaders in the BPO and BPaaS technology industries. Not only have we embedded our solutions with more GenAI, but we've begun to do a better job telling our digitization and AI story, including the, as mentioned, launch of our AI experience center in New Jersey and the deployment of numerous AI initiatives, not pilots, but real production solutions in areas like agent assist, language smoothing, language translation tools, automated indexing in our digital platforms, and automated detection of pharmaceutical reportable events, all of which will drive margin expansion and open new revenue generation opportunities.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

We've seen significant fraud reduction in our electronic payment card platforms as well due to AI deployment. The bottom line is we will tell these stories more often as our clients continue to ask for innovation and examples of where we can help them do their jobs better. Conduent Solutions, unlike many of our competitors, are based on technology platforms infused with AI and automation that enable better outcomes for our clients, and we deploy our CapEx to continue to evolve these solutions with new innovation to solve client challenges. We've also seen some new software license wins with our HSP claims adjudication platform, which now opens up new pathways for not only more software licensing of that product, but potentially simplifying the claims process for even larger healthcare insurance payers. A couple of other proof points for our quarterly progress. We refinanced our revolving credit facility, as mentioned.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

The sales pipeline is growing, and there are definitely deals in the waiting. Our transportation business has seen an expected uptick in sales, with some recent wins in Richmond Pay-by-Plate processing, as Giles mentioned, additional work in the Bay Area tolling space, additional transit work in Abu Dhabi and Israel, as well as a recent transit win in Greece, among others. As mentioned in the past, the journey clearly has twists and turns, evidenced by phenomena like government shutdowns and natural disasters, which we certainly have contingency plans for. But we're continuing that progressive path toward year-over-year growth and have already seen the pitch up, if you will, from the EBITDA trough we described in 2024 to growth. The plan is working.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

As mentioned, more rationalization is on the horizon, as is continued margin expansion from the cost coming out of the center and less capital intensity associated with future expected transactions. Thanks for listening today, and thanks to our 55,000-strong team for their hard work. Finally, I'd be remiss if I didn't send best wishes to our folks in Jamaica, but also in Cebu, Philippines, where hurricane activities have done serious damage to those environments and the necessary ingredients of everyday life. So far, our business continuity efforts have held our operations in good stead, but many have real personal hardship to deal with. As I stated, we're optimistic about our future and see sunny skies ahead. Thanks, and I'll open up to the operator for questions. Operator?

Operator

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the Star keys. Our first question comes from the line of Gowshi Sriharan with Singular Research. Please proceed with your question.

Gowshi Sriharan
Gowshi Sriharan
Research Analyst at Singular Research

Hi. Can you hear me?

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

Yeah, we got you, Gowshi.

Giles Goodburn
Giles Goodburn
EVP and CFO at Conduent

Hi, Gowshi.

Operator

Hi. Good morning, guys. Just you flagged that you had near closes in Q2 that was expected to close in Q3. How much of that pipeline actually closed this quarter, given that the closings were kind of flattish year-on-year? And would that be—would we be seeing some acceleration if the government shutdown eases up? And when would that be?

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

It's sort of like the small animal through a snake. It's coming through. I think it's exacerbated, Gowshi, in Q3 because of the government shutdown due to timing in the federal government releasing some deals in places like the CMS, where approval is needed in order to get states to be able to approve healthcare deals, Medicaid deals. I don't see any massive change from Q3 to Q2 to Q3 to Q4 other than in that government space that we just talked about.

Gowshi Sriharan
Gowshi Sriharan
Research Analyst at Singular Research

Okay. Gotcha. I know you highlighted GenAI deployment in both government and commercial space. How are you measuring productivity or quality gains that will concretely boost the client stickiness or cross-sell opportunity? Any solutions that might be in the public sector wins? What is your expectation on the contract size and the margin uplift from the GenAI pilot?

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

Yeah, it's a great question. The primary pilot in the government space is in our fraud category, specifically in our Direct Express Program, where address validation is really important. We've used GenAI to expedite that and create a faster determination from our associates. We see that spreading throughout the Medicaid—excuse me—and the SNAP environments as well, where we can reduce fraud quickly, and that's been a big mission of the federal government as well. In the commercial space, it's more around customer experience, where everybody's deploying fraud, things like language translation, smoothing, agent assist, those kinds of things, as well as where we see a real opportunity in scanning and indexing, where we can use GenAI to automate the indexing to create a claims adjudication-ready platform for our clients. So that's a big space. That's going to create both revenue and expense opportunities.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

The fraud space is more about expense reduction opportunities. What's still outlying is how do we pass those capabilities on to the client? In other words, where do we share in both those expense reductions and those revenue increases? Those are contract by contract, to be honest with you, and it's going to depend on exactly what the endeavor is.

Giles Goodburn
Giles Goodburn
EVP and CFO at Conduent

And just to add to that, Gowshi, we're seeing the positive expense impact from the fraud initiatives in the government space turn up in the P&L now and in the last quarter as well. So we're seeing the fruits of that.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

And we're seeing it in commercial as well.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

Yeah.

Giles Goodburn
Giles Goodburn
EVP and CFO at Conduent

Yeah.

Gowshi Sriharan
Gowshi Sriharan
Research Analyst at Singular Research

Gotcha. Given that there's a negative operating cash flow, I know you said 87% of that the divestiture is done. Are there any specific costs out of stranded cost areas left to tackle? What's the internal timeline for fully realizing those benefits?

Giles Goodburn
Giles Goodburn
EVP and CFO at Conduent

Yeah. So I think we're through the initial phase of stranded costs related to the divestitures we did last year. Clearly, we're in the process of phase two of the portfolio rationalization, and there'll be a little bit that we act on in 2026. One thing I will say is we do have a very strong cost discipline in the organization, and we're continually looking to optimize areas, whether it's in spans and layers in the organization or our real estate portfolio. So it's a continual effort, and we'll keep on that journey.

Gowshi Sriharan
Gowshi Sriharan
Research Analyst at Singular Research

Okay. And just my last question. Given the environment as it is, are you changing the contract clauses or structural changes, especially given the recent government and commercial deals, to reduce churn risk or exposure to budget delays?

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

No, we're not, Gowshi. I mean, the thing to remember here, given the government shutdown, is it hasn't affected our revenue stream. It's affecting the timing of milestones and the release of sales opportunities that all are going to get through the end of the snake, as I mentioned earlier. But the revenue stream and the revenue deployment is not affected, and we're primarily state and local government business in the public sector. So we see no reason to change the model as we speak today.

Gowshi Sriharan
Gowshi Sriharan
Research Analyst at Singular Research

Awesome. Thank you, guys. That's all I had for now. I'll jump back in the queue.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

Thanks, Gowshi.

Operator

Thank you. Our next question comes from the line of Marc Riddick with Sidoti & Company LLC. Please proceed with your question.

Marc Riddick
Senior Equity Analyst at Sidoti & Comapany LLC

Hey, good morning.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

Hey, Marc.

Marc Riddick
Senior Equity Analyst at Sidoti & Comapany LLC

So I think if you could talk a little bit about the client mix that you're seeing, particularly on AI endeavors. You made mention of the fraud focus. I was wondering maybe you could talk a little bit about maybe what the industry verticals look like and maybe if there's sort of a first movers, if you will, that are engaging and maybe what you're learning from them.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

Yeah, it's two different questions, really, depending on whether it's commercial or in the government space. In the commercial space, we're in the neighborhood of 30%-40% in healthcare. And a lot of the opportunity from an AI perspective, an efficiency perspective, and potentially even fraud reductions perspective, although not yet, is in that healthcare space. In the government space, it's a different kind of healthcare. It's Medicaid processing primarily and Medicaid eligibility, where there's a lot more fraud and a lot more opportunities to reduce expense and drive fraud reduction. So I mean, it's two different opportunities, but most of those opportunities from an early mover perspective are centered around healthcare.

Marc Riddick
Senior Equity Analyst at Sidoti & Comapany LLC

Great. And then as we sort of think about the opportunities on the commercial side, I was wondering if you could talk a little bit about. As we sort of look into next year, I can understand some delays with activity and the like. But do you get the sense that there's any particular areas that you would like to shore up bandwidth or sort of maybe level of comfort that you have as far as being able to meet growth opportunities on the commercial side?

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

Yeah. Excuse me. On the commercial side, I mean, if you think about our product sort of penetration, we're less than two products per client, which for a company that has as many products and opportunities as we have is too low. We're very focused on that client penetration, especially in our top 60, top 80 clients. And we're putting some new processes in place to deploy against that. Again, healthcare is a big play there. But for example, the continuum of service in claims adjudication, all the way from the beginning of a claim through the servicing of a claim, as opportunities end in, we're intently focused on that. And we're also focused on some software deployment and software licensing opportunities that we've never really deployed in the commercial space. We just had our first one with our HSP license to a mid-sized client in California.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

We've always done it to a lesser degree in public health medicine in the public sector with our Maven platform, but we're now starting to do the same thing in commercial. So we see real upside here in technology deployment. We see real upside in further penetration of our current client base. We're putting a new business development team together to feed the top end of that pipeline better, which we think is the Achilles heel for us in commercial. It's really not sales execution. It's feeding the top of the pipeline. So we're all over that, and then we're all over the penetration of our current client base.

Giles Goodburn
Giles Goodburn
EVP and CFO at Conduent

And I think, Marc, we're seeing some of the results in that, right? As I said in my remarks, on a year-to-date basis, we're up year-over-year as far as new capability sales are in the commercial and overall in the Conduit organization. And that's selling new product into the existing client base. And specifically, as it relates to commercial, put aside the largest client that we've got, the other 24 of 25 clients are growing year-over-year as well. So we're seeing some of that actually flow through into the financials.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

I mean, that's a great point. While we're not satisfied with our commercial sales in 2025 just yet, I mean, absent that one client, it's already growing. So there's real opportunity. We're seeing growth already. We just need to outrun that one client.

Marc Riddick
Senior Equity Analyst at Sidoti & Comapany LLC

Gotcha. And then so do you potentially see I think there was a mention made as far as adding sales talent. Is there sort of a general timeframe or sort of a runway that you see there? I guess that's kind of a 26 question. I know we're not doing 26 guidance, but I guess maybe I'm sort of thinking about the timeframe of how some of that might roll out.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

Well, it necessarily will affect 26 performance, but it necessarily needs to happen in Q4 of 2025.

Marc Riddick
Senior Equity Analyst at Sidoti & Comapany LLC

Gotcha. Thank you very much.

Cliff Skelton
Cliff Skelton
President and CEO at Conduent

You bet.

Giles Goodburn
Giles Goodburn
EVP and CFO at Conduent

Thanks, Matt.

Operator

Thank you. And we have reached the end of the question and answer session. And this also does conclude today's conference. And you may disconnect your lines at this time. We thank you for your participation. Have a great day.

Executives
    • Giles Goodburn
      Giles Goodburn
      EVP and CFO
    • Cliff Skelton
      Cliff Skelton
      President and CEO
    • Joshua Overholt
      Joshua Overholt
      Head of Investor Relations
Analysts
    • Gowshi Sriharan
      Research Analyst at Singular Research
    • Marc Riddick
      Senior Equity Analyst at Sidoti & Comapany LLC
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