Q1 2021 Conduent Inc Earnings Call
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Greetings and welcome to the conduit first quarter 2021 earnings results 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 during the conference. Please press star zero on your telephone keypad.
As a reminder of this conference is being recorded.
I would now like to turn the conference over to your host Alan Katz, Vice President of Investor Relations. Please go ahead.
Okay.
Good evening, ladies and gentlemen, and welcome to the conduits first quarter 2021 earnings call joining.
Joining me on today's call is cliff Skelton condo, and CEO and Brian Walsh conduits, the current CFO as well as Steve would our current corporate controller and incoming Chief Financial Officer. Following our prepared remarks, we will take your questions. This call is also being webcast a copy of the slides used during this call was filed with the FTC. This afternoon.
Those slides as well as the detailed financial metrics sheet are available for download on the Investor Relations section of the conduit website. We will also post the transcript later this week.
During this call kind of an executives may make comments that contain certain forward looking statements as defined in the private Securities Litigation Reform Act of 1995 debt by their nature address matters that are in the future and are uncertain.
These statements reflect management's current beliefs assumptions and expectations as of today may five 2021 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 conduits of 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 at the substitute for the company's reported results prepared in accordance with U S. GAAP.
For more information regarding definitions of our non-GAAP measures on how we use them as well as limitations as to the usefulness for comparative purposes. Please see our press release, which was issued this afternoon of Ms furnished to the SEC on form 8-K with that I will turn the call over to cliff for his prepared remarks cliff. Thanks.
Thanks Alan.
Afternoon, everyone and welcome to condo in the first quarter earnings call. Thanks for joining us today, it's great to be with you.
Today marks yet another quarter, where kind of doing has been able to achieve its goals and meet the expectations. We discussed in prior earnings calls.
As I've mentioned in the past our goal is to continue working on the fundamentals and pivot of our company to growth.
We think today March one step closer to that outcome.
Now before I go through the Q1 financials I would like to obviously acknowledge the announcement we made this afternoon regarding our CFO succession.
I'm going to take a minute to thank Brian for his hard work and dedication through the years.
I very much enjoyed working with him I wish him the very best in his new role.
At the same time I'm excited to welcome Steve Wood into his new role as our incoming Chief financial Officer.
I've known Steve for a number of years he is a great partner.
And an experienced finance leader, who will help drive the organization along the next phase of our journey.
Importantly, this is a great example of our succession planning efforts.
This transition will be seamless for our associates, our clients and our shareholders.
And then in terms of the call the day I'll present, a quick overview of the financial results are.
Our recent signings performance and why we're more confident than ever and why we expect to see a turn of the top line very soon.
Well, then turn it over to Brian to run through the more detailed financials.
Questions will be at the end as always mean.
Meanwhile, This slide provides a cross section of recently received awards and recognition that we're very proud of.
So now, let's turn to slide five to get started.
Q1 was a strong quarter.
Revenue and adjusted EBITDA were above both internal and external expectations.
With revenue of over $1 billion in adjusted EBITDA of $115 million equating to an 11, 2% margin.
210 basis points year over year.
This was driven by revenue growth in our government payments offerings new business ramp.
The focus on efficiency.
Our new business signings in Q1 were also strong.
Which I'll discuss in more detail on the next slide.
Despite of workforce that is mostly still working from home operations and technology quality continued to improve.
Demonstrated by increased uptime and service levels meeting client expectations.
The progress we made in our service delivery has brought us well beyond where we were a couple of years ago.
In fact, several of our marquee clients recently awarded US with supplier Excellence Awards, which we're very proud of including Toyota financial services and one other fortune 100 clients.
Lastly, we continue to make progress on improving our culture and of our associate engagement.
In fact, we were just named to the list the best Global company cultures by comparably and our Glassdoor ratings are much improved.
It's great to see this recognition based on associate reviews, and we remain focused on fostering a strong culture.
Let's now go through the details on our signings for the quarter. Please turn to slide six.
On our last call, we discussed a new metric net annual recurring revenue activity.
This is a trailing 12 months of measurement of the expected annual revenue impact to include signings losses.
Rice impacts and any contractual volume changes.
As a reminder, this isn't the financial impact for a specific time period.
But rather a look at what will come into the P&L.
On point in the future.
On a net basis anyway.
This is an indicator of the performance on sales as well as client retention it's.
It's an important predictor of future growth once the lingering effects of prior years' losses burn off and by that I mean losses prior to 2019.
This burn off.
COVID-19 dynamics and our continued net revenue gain make growth evident in Q2 of this year on a year over year basis.
The net are activity metric was $87 million from the trailing 12 months ending Q1.
There will be quarters here or there that may be higher or lower.
Consistently positive trend is the key.
In terms of the new business <unk>.
We had a strong quarter with PCB growing 10% and a growing 67% on a year over year basis.
We think this is important because it shows not only long term growth with the singles and doubles needed for 2021 and 2022.
Importantly, Q2 looks good as we just sold of $178 million deal on our transportation business in Europe, which will be announced in the press release in the coming weeks.
As you can see on the Pie chart.
<unk> were generally split up in proportion to the sizes of our segments.
This won't always be the case.
But we thought that it might be helpful to show the diversity of our signings, especially given the COVID-19, and its impacts are still somewhat out there on the marketplace.
Importantly, the fairly high percentage of our signings were driven by expansion opportunities, we see with our existing client base demonstrating their confidence in us.
The real opportunity, we see for our future lives in our current portfolio.
Where there are numerous outsourcing opportunities right at our fingertips.
Now, let's turn to slide seven to discuss some of the progress we've made over the past two years.
And what outcomes those changes are driving in the business I.
I won't go through each bullet on the page on it.
We'll hit on some general themes the <unk>.
Thing to remember here at least in my opinion is it running and growing the company is always operationalized by focusing on the people the process and the technology and.
And we have created concentrated efforts across that spectrum.
Regarding people.
Talent and teamwork will Trump many obstacles.
We've made some great progress on top grading talent.
We're continuing to bring new talent into the organization.
While never done.
The high level of heavy lifting is nearly complete.
We're focused on our culture.
The gauging with our associates and focusing on diversity and inclusion.
We invested resources to ensure we are developing an environment, where all of associates feel they can be themselves and valued for their contributions.
We've invested in training and development programs for selling and account management to drive stronger engagement and support of our clients.
In terms of process the efficiency programs are key to margin expansion and lower cost of delivery.
We're seeing the benefits from utilizing best practices and shared service centers.
We've increased our touch points with our clients and this has enabled additional cross sell opportunities.
We saw this positively impact our signings this past quarter.
Now this seems like an obvious one but an outside in approach is what our clients expect from there to give us more business the key.
He is to understand how we can help clients solve their problems as opposed to pushing the products and services.
As for technology investments in our infrastructure and data centers have led to improved platform uptime.
We're mostly through our data center migration plan, which is slowly, but surely bringing state of the art technology to bear and minimizing the legacy platforms and infrastructure.
The launch of our command center last year provided oversight.
Coordination and proactive monitoring capabilities to react quickly and ensure seamless delivery of service.
Finally, we've taken every client every time approach to technology and operations.
It's not just about internal efforts, but more about the client and end user experience an impact.
Now these efforts have driven some important outcomes in terms of growth efficiency and quality.
Our operational improvements have led to better delivery, which in turn has improved client retention is never perfect and never will be but.
But we will never be satisfied in this category.
Margins have improved and.
And we continue to invest in incremental system upgrades every day, new bandwidth is created so we can increasingly focus on growth and we see of real improvement to both internal and external expectations.
Let's turn to slide eight to quickly discuss why our confidence is increasing based on market opportunity coupled with our improvement efforts.
In the commercial segment, the addressable market is $146 billion.
We continue to invest in automation and digitization within our CRM offerings positioning us to capture share and improve margins were definitely seen revenue improvement and volume upside in our CX M space.
We also have particularly strong offerings from the financial services side of the bps or what was traditionally called the BPM market.
Where we are integrating cloud based software again focused on automation and technology integration.
Within our health wellness and benefit administration offerings, we see the opportunity to grow through product and user interface enhancements.
And within the health care space, given the size growth trends and client relationships that we have across the industry, we're very well positioned for automation.
Around claims processing and services, but even more importantly, we think there are many more bps in CRM offerings that can be deployed across the health care market.
Within the government space, we see a market opportunity of almost 30 billion, we've seen strong interest in our new offerings around fraud tools and innovation in our payments capabilities, which can also be utilized in the commercial space.
The government market is growing quickly.
We think these new offerings will differentiate us.
Lastly, within the transportation space, we see a market opportunity of about $11 billion given our current offerings we.
We see the potential to expand that addressable market size in the coming years through geographic expansion and potential expansion into the commercial marketplace.
Overall, the key takeaway here is there is significant room for growth in the markets in which we currently play it's simply up to us to take advantage of it.
And before I turn it over to Brian to go through the financials I want to close with just a few final remarks I'll repeat what I said on our last call consistency is key we.
We need to keep delivering on our commitments to our associates to our clients.
On to you our shareholders.
I'm confident in our ability to do so this company is in the pivot it will be a growth company and we're very close to declaring and so.
Our team is leading and we're attracting talent and.
And we'd love for you all of the stay on this journey with us because what we've embarked upon is working.
I'd like to now turn it over to Brian for a detailed look at our financials and I. Thank you so much for your time today.
Thank you.
Before I begin I want to thank cliff and the other members of the board of directors for their support and all of the opportunities I've been given it kind of it we've come a long way in the company is now well positioned for its next chapter.
I also want to thank the kind of of the finance team and all of my colleagues for their hard work and dedication and lastly, I want to congratulate Steve Wood and wish him. The best of luck in his new role. We have worked closely together since his arrival in 2020 and the company will be in good hands with the CFO like Steve We will work closely together.
To make sure that this is a smooth transition and I look forward to watching kind of what success over the coming years.
With that let's move on to the Q1 results.
As we've done in the past, we're reporting both GAAP and non-GAAP numbers, the reconciliations on our filings and in the appendix of the presentation.
Let's turn to slide 10 to discuss the Q1 2021 P&L.
As Cliff highlighted we finished the quarter strong with revenue of just over 1 billion down two 2% year over year.
The decline was driven by lost business from prior years and was partially offset by increased volumes and new business ramp.
The continued progress on a year over year revenue trend can clearly be seen in the chart on this slide we are on the right path and the improvement that we see here is encouraging.
Adjusted EBITDA for the quarter was 115 million up 19, 8% year over year, while our adjusted EBITDA margin for the quarter was 11, 2% up 210 basis points compared with Q1 2020.
The increase in adjusted EBITDA was driven by our revenue mix and by our continued focus on driving efficiency throughout the organization.
Let's turn to slide 11 to go over the segment results.
For Q1 of our commercial revenue declined 8%, primarily driven by lost business from prior years and lower volumes due to COVID-19 of.
Adjusted EBIT declined 11, 4%, while the adjusted EBITDA margin of 11, 8% was down 40 basis points year over year.
The adjusted EBITDA decline was primarily driven by lower revenue.
Our government business grew by nine 7% for the quarter. This was primarily driven by revenue related to COVID-19 volumes in our government payments business as well as the ramp of new business, partially offset by lost business from prior years.
Government adjusted EBITDA increased by 19, 5%, while adjusted EBITDA margins of 28, 9% increased by 230 basis points. This margin improvement was due to the revenue mix and efficiency progress.
Our transportation segment revenue declined by two 6% compared to Q1 2020, primarily driven by lost business from prior years, and COVID-19, partially offset by new business ramp adjusted EBITDA was up 58 per cent compared with Q1 2020, driven by a temporary items positively impacting revenue mix and our cost.
Savings progress adjusted EBITDA margin for the quarter was 16, 3% up 620 basis points year over year, we saw the negative COVID-19 impact on our transportation segment lessen in Q1, compared with Q4, primarily driven by a continued recovery in tolling volumes.
For the quarter, our unallocated costs were 69 million, 3% higher than the same quarter last year, driven by certain employee costs, partially offset by lower IP and real estate spend.
As I discussed on our last call. We continue to look at our operating model, including bringing on new talent. At this time, we don't believe we need to make any changes to our external segment reporting.
I'll note that we've included the detail by segment of our year over year of growth trends for the past five quarters in the appendix or trends in the commercial and transportation segments are positioned to further improve moving forward as we lap the COVID-19 impacts and as they lessen overall our government segment is currently benefiting from the federal support.
Of unemployment and pandemic snap, which will come down over time.
Let's now turn to slide 12 to discuss the balance sheet and cash flow.
Our balance sheet continues to remain healthy and we have of solid liquidity position. We ended the quarter with 300 of $99 million of cash on the balance sheet as of quarter end, we had approximately $743 million of capacity under the revolver.
Our net leverage ratio at the end of the quarter was two two turns in line with our target of two to two and a half.
As you can see on the debt maturity table. Our first major maturity is at the end of 2022 <unk>.
Refinancing our debt during 2021 remains the priority for us and we're well underway in the process should the markets remain attractive we would expect to refinance our debt in the near term.
One other item to note. We recently repaid the remaining 34 million of outstanding senior unsecured notes this will be reflected on our balance sheet moving forward.
Typically with our seasonality we are of user of cash in the first quarter. However, we had a much lower cash outflow for the quarter of this year compared with last year adjusted free cash flow was the use of $33 million for the quarter, an improvement of $68 million compared with Q1 of 2020.
This was primarily driven by strong EBITDA performance unless outflow associated with the prior year end working capital tactics. This was also despite an increase in certain employee payments.
Capex for the quarter was $30 million or two 9% of revenue, which is lower than we would expect moving forward, we see plenty of opportunity for attractive investments into the business. So you should expect to see the number of increase in future quarters, let's move to slide 13 to discuss our outlook for Q2 and full year 2021.
We have improved our full year revenue range to be between 4.05 billion and $4. One 5 billion. We continue to see an adjusted EBITDA margin range of between 11% and 11, 5%.
We also expect to convert approximately 20% of full year adjusted EBITDA to free cash flow.
Normalized for the expected cares act payment this number would be approximately 25% of normalizing. Both 2020 in 2021 that would be over a 5% improvement year over year.
We have not changed our outlook on our expected 2021, capex spend of $170 million or a restructuring spend of between 40% and $45 million in.
In terms of Q2, we would expect revenue in Q2 to be flat to slightly up compared with Q2 of 2020, and we expect adjusted EBITDA margin to be approximately 11%.
Before I close I want to thank our associates shareholders and clients for their continued support our progress is certainly encouraging we will now open up the lines for some questions operator.
Thank you we went out I'll begin the question and answer session.
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One moment, please while we poll for questions.
Our first question today comes from Shannon Cross of Cross Research. Please proceed with your question.
Hi, Thank you this is ashley on.
Of the foreign for Shannon.
I was wondering if you or Brian if you could talk about what the drivers of our behind the sequential increase in <unk>. This quarter I understand it fluctuates quarter to quarter, but it was that the 45 per cent and I think you mentioned that you expect revenue to grow year over year next quarter.
What makes you confident in that.
Where do you see the biggest drivers and then of Apollo.
Thank you.
Yeah, so the the.
You are on the sales number.
Was increased because of on a lot more shorter term deals in our sales efforts. So you sort of 10% growth year over year in Q1 as it related to TCP, but 67% growth on a R. R and that's due to the little bit shorter term and a lot more add on business and we historically have.
So we think that's a really positive trend for 'twenty, one and 'twenty two we need a combination of both.
Need to see the long term growth rates from large deal T. C V, which we really see a ahead of us in Q2, but we need to see a lot of the singles and doubles that gets as they are already going for for both of them. The.
The 'twenty, one and 'twenty two as it relates to the.
The growth rates in pivot and that sort of thing as I mentioned in my remarks.
I think what you should expect and what we expect in Q2 of.
2021.
As of year over year growth.
In Q2 for that quarter, and that's driven by government stimulus increases and a pretty tough compare from Q2 of 2020, when COVID-19 was just hit hidden in earnest.
And if you noticed we raised the bottom end of our range up by.
But up to 4050 with a range of 40504150.
And so you can kind of do the math to say I mean, if we finish on the top of that range.
Which could easily happen.
That's that's you know we worked for 164 last year. So you can do the math to figure out debt if seamless volume comes in strong.
We're going to see of growth year in 2021, and we're just not going to know enough till the end of Q2 to know that answer what's really important though back to your E. R. R of point is this net a number which was $87 million this year and in the 60 range.
The last rolling 12 months and that's an indication of all of the activities that are creating EBIT part of positive or negative revenue not timing related but it's an indication of growth is on the horizon on around the corner. So we're really positive on.
On on all the aspects of both are on the net Ara number as well as of the growth opportunities in the back half of 2021.
Okay. Thank you and then it's been a couple of quarters that you've called out increased service levels on uptime, just I think general customer satisfaction improving.
We start a new year on a lot of companies are considering.
Are you seeing at Inc.
Increase of willingness for those customers to give you more business than they would have in the past I think.
The increase your attention, but are you also seeing expansion of those relationships.
Yeah, we really we really are seeing receptivity to the dialogue, which frankly when I got here two years ago was hard to get.
We just didn't have the track record and the reference ability.
And the support in the marketplace due to due to our technology stability and we're in a much much better place here. We've got we're two thirds to three quarters of way through our data center optimization plan.
We've got one of have big data centers left to go that's creating a much more stable upgraded environment.
And the result is very very significant improvements in uptime very very significant improvements in any incident rates and we're hearing a lot of great feedback from our clients on.
On that which makes us get a meeting the.
Years ago, we Couldnt get that said no defect as ever enough anything less than 100% is not good enough. We want as many nines of uptime as we can yet.
And that's our mission, but yeah. It's a great question and it's opening doors that we didn't have opened before.
And then just one follow up.
You do eventually return to more consistent and stable revenue growth do you expect that those existing customer relationships.
A key driver will be more from net new logos and that's it from me. Thanks.
Yeah, No it's of Great question, because in the past, even when we were selling we werent retaining and what you've heard Brian and me talk about is the fact that we've got this legacy burn off from losses prior to 2019.
That is on our achilles' heel, we are selling more than we're losing right now the trouble is that the burn off from the legacy of events from years ago has legs to it. It takes it takes a long time. So the direct answer to your question is it's both.
It's it's it's a three legged actually a three legged stool, it's retaining what we have it's adding on business for the current clients, which we have and we proved in Q1 that we can do much better than we did last year in that category and it's new logo new clients.
And the all three of those contribute to the TCE number well the last two contributed the TCP number of all three continue to contribute to revenue growth.
The next question is from Bryan Bergin of Cowen. Please proceed with your question.
Hi, Thank you.
Hey, Brian Good luck with your new opportunity in and welcome to Steve.
Thank you Brian I appreciate it thank you.
Sure.
Question here on the on the new business signings can you comment on the nature of the commercial new business that you're signing in and what areas of standing out as good opportunities for potentially helping you returned to growth.
Yeah, I think the good news in Q1, we saw strong commercial new business signings growth as Glenn mentioned there was good contribution from add on and we saw it across the board <unk> contribution.
We saw it in our health care offerings.
So we really saw the you know in the number of areas.
But it was good to see a good contribution from commercial in Q1, because we had a lot of government and transportation contribution last year.
I don't know what you'd add cliff yeah. We saw a couple of deals on our Hsp platform. We've actually got four big implementations underway right now which is on our claims platform for commercial health care, Brian We see some real upside opportunity in healthcare heretofore I would argue that we just not have we haven't tapped the breath of <unk>.
Going into the health care space and very shortly we'll be announcing a new leader across the segment for commercial health care, who comes out of an environment, where she was leading a lot of the sales efforts for several of our competitors into the commercial health care space. We think we think there's massive opportunity there. We're just seeing the tip of.
Of the spear right now frankly, and while it was a good quarter theres much more to be had there.
Okay, and then just as it relates to COVID-19 can you just update us or remind us again the impact built into the the 'twenty one outlook by segment as far as the understanding of the detriment of commercial style of benefit the government just how should we be thinking about all of these moving pieces as you lap.
The last year issues versus some of the extensions of the government programs.
Yes, so when we.
The first of all of it gets a little bit harder to attract the exact numbers as we get into the second year of COVID-19 in the first year. We added on discrete plan that we could track against and as we lap it gets a little bit harder, but at the start of the year, We said the the $150 million benefit from from government.
We expected it to come down and we expected the negative impact on commercial and transportation to come up by a similar amount and we expected it to be roughly still negative around $85 million on a net basis as those two things moving in different.
Actions as of now we're looking at it we think we're probably a little bit better than that where the.
Bit more coming from government than we initially anticipated and probably a little less recovery on commercial.
But so where it may be getting 30% to $35 million more than we initially thought.
So instead of being down $85 million for the year, which was similar to last year, maybe we're down 50. So.
So that's kind of what we see but it does get a little bit.
Less accurate as we lap years, so it's not as precise as it was last year. Yes. If you think about of Brian. It was an easier compare to say what's happening in of COVID-19 year versus a non COVID-19 year than it is the compared to COVID-19 year to COVID-19 year, that's where it gets really difficult, but as Brian said, the $85 million headwind we had in 2020.
Is likely 50 ish in 2021.
And depending on how long some of the subsidy environments in the.
And by this war on hunger and a lot of other things that could come into play in the fourth quarter, who knows that could be mitigated even more but that's what we see on the horizon right now.
Okay. Thank you.
Yeah.
The next question comes from Puneet John of J P. Morgan. Please proceed with your question.
Yes.
Hey, Thanks for taking my question.
Less than your current.
Margin profile balance sheet and tech capabilities allow you to close the growth of what says.
Low to mid single digit Tam growth.
I want to ask do you need to do acquisitions.
Of technology capabilities.
You'll get debt.
Well, so puneet it's of Great question, and what I would say is that if you look at what we gave as a range of 11% of 11 five on margin for for the.
For the expectation for <unk> for the year of 2021 and.
4050 to 4150 on top line, if we hit <unk>.
Higher end of that top line, even going over the top line I think the same.
Tracking happens on margin. So that's point number one which has nothing to do with your point on acquisitions.
But we think with our continued efficiency plays with partnerships that we have underway with some possible collaboration with other parties, who have in the way and maybe a few tuck ins and the <unk>.
Second half of the year.
We can we can drive that number up.
To jumpstart the target we put in place over the long term, which is 13% to 15%. So Brian on them. If you have anything to add to that.
I think that.
Right I think we still see the long term targets.
We see the peers.
The mid single digit revenue growth in the 15% EBITDA margin and that's what we aspire to over time and it's how do we get there over time I think in the near term its to cliffs point tuck in acquisitions and maybe.
Overtime.
Something on a little bit bigger, but it would be more tuck in in the near term and then operating leverage from revenue growth drive margin up continued moving things the shared services.
And in other process improvement and efficiency plays and that's how we see it but it's a really good point on tuck ins because if you look at AI and machine learning we've already got two partnerships ships in place now we're looking at others, we built our own automation platform. The combination of all of those will drive margin expansion.
And maybe of tuck in or two jumpstarts. It even further is it required no.
On an accelerated yes.
Got you and how much of an advance do you typically get domination.
As for our contact.
How soon your growth rate can begin to reflect the benefits of our underlying net add on which has been positive last two quarters now.
Yeah, I mean, various it's really varies I mean, the U K and in and of complicated.
Government of our transportation contract it could be five years plus.
On the plus side would be extreme.
And in a simple of commercial kind of call center.
Kind of contract it could be 90 days it really does depend on how complicated the transition is for the for the year.
On the person coming in and replacing you.
So it really does depend a lot of what's burning off thats the legacy losses are complicated.
You know the system implementations and it just takes a long time.
To replace.
What we're doing for our clients, yes, I think we're getting I think that's exactly right and the government space typically you get between a year and two years of advance notice depending on the conversion expectations from the incumbent but as Brian said, sometimes the runoff for the conversion activity can be as long as five years after notification.
And so it's got a long tail.
And then in the commercial space is not nearly as long, but the good news is remember that net of air. Our number is an annual annual recurring revenue is now the <unk> number or a gross revenue number so.
It nets out appropriately and as long as it's positive we're going the right direction.
Understood all of that.
Yes, Brian for free instead of us. Thank you. Thank you I appreciate it.
Win win Puneet, so thank you and Bryan Bryan as excited as are we.
Yes.
There are no additional questions at this time I'd like to turn the call back to management for closing remarks.
Listen I'd like to thank everybody for your time today.
It.
It's been great being with you and I think good day was a good quarter.
I'd like to again, thank Brian for 24 years of service to Xerox and condo and I'd like to welcome Steve Woods, Stephen I worked very closely together he was my CFO in the past.
And I assure you that the transition will be seamless and I assure you that we are well positioned.
The two to make you proud of what we're doing here.
It kind of doing in our payment to growth and we're really proud of the progress we've made and we're looking forward to the remainder of the year. Thank you all for your support.
This concludes today's conference. Thank you for your participation and have a pleasant day.
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