Conduent
Conduent Incorporated is an American multinational business process outsourcing (BPO) company headquartered in Florham Park, New Jersey, specializing in technology-enabled solutions for enhancing operational processes, customer interactions, and outcomes across commercial, government, and transportation sectors.[1][2]
The company originated from Xerox Corporation's acquisition of Affiliated Computer Services in 2010 and was spun off as an independent entity on January 3, 2017, inheriting Xerox's BPO operations with initial annual revenue of approximately $6.7 billion.[3][4]
Conduent delivers mission-critical services, including customer contact centers, eligibility and enrollment for government programs, payment processing, and intelligent transportation systems, serving clients such as federal and state governments, healthcare providers, and retailers to automate workflows and improve efficiency.[5][6][7]
As of December 31, 2024, Conduent employed around 56,000 associates across 24 countries and reported full-year revenue of $3.356 billion, reflecting a decline from prior years amid efforts to reduce debt by 50% and focus on core segments like commercial (50.6% of revenue) and transportation (18.4%).[8][9][10]
While recognized for its scale in BPO leadership and innovations in AI-driven automation, Conduent has encountered regulatory scrutiny, including multimillion-dollar settlements with the Consumer Financial Protection Bureau for unfair practices in student loan servicing and allegations of overbilling in state Medicaid programs.[11][12][13]
Overview
Company Profile
Conduent Incorporated (NASDAQ: CNDT) is a business process services company that provides technology-led digital infrastructure solutions and services across commercial, government, and transportation sectors.[14] Headquartered in Florham Park, New Jersey, the company operates in over 40 countries with a focus on transaction processing, automation, and analytics.[15][3] Conduent was formed through a spin-off from Xerox Corporation, with the separation completed on December 31, 2016, and formal launch as an independent entity on January 3, 2017.[3] At inception, it generated approximately $6.7 billion in annual revenue and employed over 93,000 people.[3] The company offers business process outsourcing (BPO) solutions, including customer experience management, healthcare administration, human resources services, and transportation systems, utilizing artificial intelligence, machine learning, cloud computing, and advanced analytics to optimize client operations.[5][16] As of early 2025, Conduent employs around 55,000 associates globally and serves prominent clients such as nearly half of Fortune 100 companies, nine of the top ten U.S. health plans, and 46 U.S. states.[17][5] Its services aim to enhance process efficiency, reduce costs, and improve outcomes for end-users including consumers, citizens, patients, and employees.[5]Strategic Focus and Business Model
Conduent's business model revolves around providing technology-led business process outsourcing (BPO) services that automate and streamline mission-critical operations for clients in commercial, government, and transportation sectors. The company emphasizes digital solutions at scale, integrating advanced technologies such as artificial intelligence, automation, and real-time analytics to optimize processes, lower operational costs, and improve end-user experiences and loyalty. This approach enables Conduent to deliver measurable value, including enhanced efficiency and performance, to a client base that includes nearly half of Fortune 100 companies and over 600 government and transportation agencies globally.[5][5][5] Strategically, Conduent focuses on becoming the preeminent partner for businesses and governments by prioritizing client success through dedicated, high-quality service delivery and fostering an inclusive, collaborative culture guided by core values like personal accountability and purposeful communication. The Commercial segment forms the core of its revenue base, comprising 50.6% of total revenues in 2024 at $1,606 million, with emphasis on sectors such as healthcare (serving 9 of the top 10 U.S. health plans) and human resources. Government and Transportation segments complement this, targeting public sector efficiency and mobility solutions, respectively, with projected organic growth rates exiting 2025 of approximately 3% for Government and 4% for Transportation.[18][19][5] Key initiatives include ongoing investments in intelligent process automation to support new business signings—such as $109 million in annual contract value (ACV) during Q1 2025—and to counter revenue declines through margin expansion, as evidenced by sequential improvements in adjusted EBITDA across all segments in Q2 2025. Conduent's model relies on strategic partnerships and industry expertise to address client challenges in areas like customer experience management and payments processing, while maintaining a global workforce of approximately 56,000 associates to execute at scale.[20][21][5]History
Origins as Xerox Business Services
Xerox Corporation's entry into business process outsourcing (BPO) and services, which later formed the core of Conduent, primarily stemmed from its strategic acquisition of Affiliated Computer Services (ACS) in 2010. Announced on September 28, 2009, the deal valued ACS at approximately $6.4 billion, with shareholders receiving $18.60 per share in cash plus 4.935 shares of Xerox stock, equivalent to $63.11 per ACS share.[22] [23] The acquisition closed on February 8, 2010, integrating ACS's capabilities in customer relationship management, finance and accounting outsourcing, human resources administration, and transaction processing, thereby diversifying Xerox beyond its traditional document technology focus.[24] [25] ACS, founded in 1988, had established itself as a leading BPO provider with operations serving commercial, government, and transportation clients, generating significant recurring revenue through long-term contracts.[26] Post-acquisition, ACS operated as ACS, A Xerox Company, and expanded further by acquiring ExcellerateHRO on August 2, 2010, a global benefits administration and human resources outsourcing firm, which bolstered Xerox's HR services portfolio with expertise in relocation, payroll, and employee benefits management.[27] [28] Complementing ACS were Xerox's pre-existing service elements, including document outsourcing and HR consulting rooted in Buck Consultants, established in 1916 as a pioneer in actuarial and benefits advisory services and integrated into Xerox's HR Services group by 2016.[29] These assets collectively evolved into Xerox Business Services (XBS), a division emphasizing integrated BPO solutions that leveraged Xerox's technology for transaction-heavy processes in sectors like healthcare, public administration, and transportation.[30] By 2016, XBS represented a substantial portion of Xerox's revenue, prompting the restructuring that led to its rebranding and separation as Conduent.[4]Spin-off from Xerox in 2017
In January 2016, Xerox Corporation announced plans to separate its business process outsourcing (BPO) and services operations into a standalone entity, initially named Xerox Business Services, to allow each company to pursue distinct strategies unencumbered by the other's performance.[31] This move was driven by activist investor Carl Icahn's pressure on Xerox to unlock shareholder value by divesting non-core assets, as the BPO unit's growth trajectory diverged from Xerox's declining hardware-focused document technology business.[32] On June 5, 2016, Xerox formalized the spin-off announcement, selecting "Conduent Incorporated" as the new entity's name, with the separation structured as a tax-free distribution to shareholders rather than a traditional IPO.[33] The Xerox board approved the final separation terms on November 8, 2016, under a Separation and Distribution Agreement that outlined the transfer of assets, liabilities, and operations.[34] Key provisions included Conduent assuming approximately $1.8 billion in debt and providing Xerox with a $1.8 billion cash payment to retire Xerox's obligations, while retaining a post-spin cash balance of about $400 million.[35] [36] The distribution occurred on December 31, 2016, with Xerox shareholders receiving one share of Conduent common stock (NYSE: CNDT) for every five shares of Xerox (NYSE: XRX) held, creating two independent, publicly traded companies.[37] Trading commenced on January 3, 2017, marking Conduent's formal independence as a BPO leader with $6.7 billion in annual revenue, primarily from government, transportation, and commercial contracts.[3] Ashok Vemuri, formerly president of Xerox Services, was appointed Conduent's inaugural CEO, emphasizing operational efficiency and digital transformation in post-separation statements.[3] Credit rating agency S&P Global assigned Conduent a 'BB' corporate credit rating with a negative outlook upon spin-off, citing leverage from assumed debt and integration risks despite its revenue scale.[35] The separation aimed to enhance strategic focus—Xerox on imaging hardware and outsourcing, Conduent on scalable services—but exposed Conduent to standalone market pressures without Xerox's legacy balance sheet support.[33]Post-Independence Developments and Milestones
In the years following its separation from Xerox, Conduent pursued a strategy of portfolio optimization through divestitures of non-core assets to enhance focus on high-growth business process services in public sector, transportation, and commercial segments. In April 2018, the company announced plans to divest up to $500 million in annual revenue associated with underperforming or non-strategic operations across its units.[38] This included the sale of its U.S.-based human resource consulting and actuarial business, formerly Buck Consultants, to H.I.G. Capital, completed later that year to streamline operations and reduce complexity.[39] Additionally, Conduent divested a portfolio of select customer care contracts generating approximately $500 million in 2017 revenue, aligning with broader efforts to exit low-margin areas.[40] Leadership transitions marked efforts to stabilize and reposition the company amid operational challenges. In May 2019, founding CEO Ashok Vemuri stepped down, with the board initiating a search for a successor to guide long-term strategy.[41] By February 2020, Clifford Skelton was appointed as president and CEO, bringing expertise in operational turnarounds and bringing prior experience from roles at Xerox and other service firms to emphasize cost discipline and digital transformation. Under Skelton's tenure, Conduent secured significant contract wins, including a three-year agreement in July 2018 valued at approximately $1 billion with a global Fortune 50 company, involving customer interaction services and requiring the hiring of 1,000 employees worldwide.[42] Recent developments reflect ongoing restructuring for profitability and debt management. In 2024, Conduent accelerated subsidiary sales to fund growth initiatives and reduce leverage, continuing a pattern of shedding legacy assets.[43] This culminated in August 2025 with the successful completion of a debt refinancing transaction, extending maturities and improving liquidity.[44] Concurrently, the board underwent a leadership shift on August 6, 2025, appointing Harsha V. Agadi as chairman while Scott Letier transitioned to chair the audit committee, part of routine governance rotations.[45] In October 2025, executive vice president Michael McDaniel departed as part of a broader management restructuring that eliminated certain positions to align with strategic priorities.[46] Key wins included the October 2025 selection by the Richmond Metropolitan Transportation Authority for a pay-by-plate toll system implementation.[47]Operations
Core Services and Products
Conduent specializes in business process outsourcing (BPO) services, leveraging automation, artificial intelligence, and digital technologies to manage complex operations for commercial and government clients. Its offerings include customer experience management, payment processing, eligibility verification, and administrative support across sectors such as healthcare, transportation, and public services.[1][5] In healthcare, Conduent provides the HSP Payer Suite, a core administrative processing system designed for claims intake, adjudication, member enrollment, billing, and payment integrity across all lines of business. This suite supports health plan administration by automating workflows to reduce costs and improve compliance for payers and providers.[48][49] Government solutions form a cornerstone of Conduent's portfolio, encompassing eligibility and enrollment processing, child support enforcement, and disbursement of benefits. The company serves 46 states, handling over 500 million Medicaid claims annually and distributing nearly $100 billion in government support payments. These services optimize public service delivery through automation of healthcare and social program administration.[6][50] Transportation-related products include electronic tolling and transit payment systems, processing $12.4 billion in transactions each year. Conduent deploys integrated hardware and software for fare collection and revenue management in public transit networks.[1] Human capital solutions focus on benefits administration, including defined contribution plans and total benefits outsourcing, with AI-driven tools for employee engagement, cost containment, and compliance. Finance, accounting, and procurement services handle transactional processing up to strategic advisory functions.[51][52]Key Industry Segments and Contracts
Conduent's operations are divided into three primary segments: Commercial, Government, and Transportation, which collectively account for its business process outsourcing services focused on payments, customer interactions, and administrative functions.[14] The Commercial segment encompasses industries such as banking, insurance, manufacturing, and healthcare administration, providing solutions like customer experience management, human capital services, and claims processing to private-sector clients.[53] In 2018, Conduent secured a contract valued at approximately $1 billion with an unnamed Fortune 50 company, renewing a long-term relationship for business process services.[54] The Government segment targets federal, state, and local agencies, emphasizing eligibility determination, fraud prevention, child support enforcement, and public health administration, including Medicaid management information systems (MMIS).[6] Conduent supports 46 states by processing over 500 million Medicaid claims annually and disbursing nearly $100 billion in benefits.[55] A notable example is the January 2025 award from Alaska for a $92 million contract to manage and modernize the state's MMIS, enhancing program delivery efficiency.[56] Federal contracts include the CIO-SP3 indefinite delivery, indefinite quantity vehicle, enabling IT solutions for agencies like the Social Security Administration and Department of Labor.[57][58] In the Transportation segment, Conduent handles tolling, transit payments, and intelligent transportation systems, processing $12.4 billion in annual toll transactions.[1] Services include smart card systems for public transit, such as the Myki contactless ticketing deployed in Melbourne, Australia, where readers are installed at stations for fare collection and validation.[1] This segment supports multimodal mobility solutions, integrating payments and data analytics to optimize revenue collection and reduce evasion.Technology and Infrastructure
Conduent relies on a combination of proprietary software platforms, cloud-based infrastructure, and partnerships with enterprise technology providers to support high-volume transaction processing and automation across its service lines. The company has integrated Oracle technologies, including Oracle Exadata and Oracle Cloud Infrastructure (OCI), to deliver enhanced performance and scalability for mission-critical systems, enabling faster implementations and reliable service delivery since February 2021.[59] In March 2024, Conduent adopted Oracle Database@Azure, allowing it to process significantly more transactions per second in cloud environments while maintaining high availability through multi-node architectures, particularly benefiting tolling and payment applications.[60] Key proprietary platforms include the Conduent Automation Platform, which converts business rules into automated virtual agents to handle repetitive tasks, and the HSP Payer Suite, a core administrative processing system for healthcare claims management across multiple lines of business.[61][48] For customer interactions, Conduent CXNow leverages cloud contact centers to provide real-time analytics and AI-driven support, optimizing multichannel engagements like voice, chat, and email.[62] In analytics and data processing, Conduent employs scalable cloud infrastructure with machine learning and automation to transform raw data into actionable insights, supporting industries such as healthcare and government.[63]In transportation, Conduent deploys contactless fare collection hardware and software, exemplified by its role in upgrading Australia's myki ticketing system. In November 2024, Conduent secured a contract with Victoria's Public Transport Victoria to install new readers enabling tap-and-go payments via credit/debit cards and mobile devices, with field trials incorporating QR code capabilities and improved user interfaces starting in early 2025.[64] These systems integrate with backend cloud platforms for real-time transaction validation and fare calculation, though early deployments faced compatibility issues requiring hardware replacements at select stations.[65] Conduent's infrastructure also features a Command Center in Salt Lake City, Utah, operational since 2020, which monitors global operations using advanced visualization tools for proactive issue resolution.[66] Overall, the company's technology stack emphasizes hybrid cloud deployments to handle mission-critical workloads, with AI and automation reducing manual intervention in data-heavy processes.[67]
Financial Performance
Revenue and Growth Trends
Conduent's revenue has declined consistently since its inception as a standalone company following the 2017 spin-off from Xerox, dropping from $6.02 billion in 2017 to $3.36 billion in 2024.[68] This trajectory reflects a compound annual decline of approximately 7-8% over the period, driven by factors including the strategic divestiture of underperforming business units, contract losses, and reduced volumes in key segments such as commercial and government services.[69] [70]| Year | Revenue ($ billions) | Year-over-Year Change (%) |
|---|---|---|
| 2017 | 6.02 | - |
| 2018 | 5.39 | -10.4 |
| 2019 | 4.47 | -17.2 |
| 2020 | 4.16 | -6.8 |
| 2021 | 4.14 | -0.6 |
| 2022 | 3.86 | -6.8 |
| 2023 | 3.72 | -3.5 |
| 2024 | 3.36 | -9.8 |