Conduent (CNDT) 6 Nov 242024 Q3 Earnings call transcript

Greetings, and welcome to the Conduent Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Mr. Giles Goodburn, Vice President of Investor Relations for Conduent. Thank you.

begin. may You

Wood, and the issued call discuss SEC of financial operator, today as a for us is review on and morning joining Cliff had as webcast, hope Thank chance this a Third thanks, morning. copy Quarter the to to were of slides section filed during well Steve release and CEO; and Conduent Investor the Conduent's our X-K. press with as well joined CFO. metrics Form XXXX website. this this today We the on available Skelton, you as release you, This press being used our Relations President the everyone, package our information are earlier earnings. by detailed call I'm the This

call, or forward-looking These Information to expectations number During new required actual these or Conduent's may are statements make assumptions on statements with concerning are filed as XX-K cause these reflect do annual may result of subject this that and those current statements. to differ a from beliefs, that to SEC. and in by statements forward-looking. we We factors a materially management's law. of factors Form the not events forward-looking as report future intend is developments, included except update information, results

financial non-GAAP a they are company's measures as these today results. the not accordance Because and presented viewed be should GAAP, reported measures. in with for in information U.S. includes addition The substitute not calculated to

use the to them, I'd release. limitations see as of like our comparative our now non-GAAP press For Cliff. measures to to purposes, more how for the financial definitions well over turn information we please and call as And their usefulness regarding

Thanks, earnings. Giles. everyone, QX to our Welcome,

begin Conduent's sheet, what changed brief and financials, on solution to will make growth expectations quarter the As I'll the a with report balance in continues Steve a discussion with and on what's status unique. follow last last quarter, we did and set

and adjusted But respectively, exceeding completed now and a previously quarter fully to margin, continue our revenue plan X.X% million million, $XX results QX trajectory. $XXX slightly were for game first, at these the our or This validate adjusted for all described our expectations. and divestitures, is adjusted growth EBITDA median

signings business million, performance where were in of our sales, government activity strong parts continued $XXX with commercial softness New some there a with deal the was in quarter. business, in transportation less offset in

year we be can by on there expectations. sales lumpiness that meets overall, but track quarter, know, you XXXX a As are performance our sales in for

debt will couple targeted less parameters of phase for improvement, We deployed ratios, last billion to we've share our continued line and ARR months. We're net rate We've lower returned key XX these but debt in exit and prepayment path here $X we the go moment, and growth. XX been the top expected, program divestiture number sequential territory. a months intensity of those the all are XXXX repurchases. consistent to and ago, positive capital communicated numbers margin against our debt completed of of the messaging on As points. a in Steve deep XX% here on a initial

balance a course on nimble, toward company stay strategically and sheet. narrower, a with tactically more both growing will clean We

about it for QX. Finally, to next. But now with board let talk to a first, more Steve we the what's over can to results attention detailed our hand simplified turn structure, me Steve?

Cliff. Thanks,

in numbers. the of have reporting past, and in we the reconciliations presentation. and GAAP appendix in are filings are our The the both done As we non-GAAP

website. the a claims divestiture full in you filed, We've the Our Investors reported our adjusted published business. of historical find the the adjusted Conduent numbers of metrics in will been again have the and set quarter financials which section this guide casualty of for for

Let's Slide turn X. to

Claims $XXX make We million, with approximately sale $XX continued $XXX the X transactions divestiture our be be and the approximately QX is the progress million received between of top net proceeds on closure of end were Casualty at these million. Gross year. transaction the set receiving next Overall, the $XXX year with this of of XXXX initial approximately still for quarter outlined in with the completing right to business, plans, third transactions. million. to will our I range This of April this proceeds

capital. million the targeting buying $X shares prepay I expect to that, fourth to said XX% months further in million, of term $XXX ago deployed million do quarter. approximately a prepaying $XXX loans that XX XX a and deployable we've which with of date, And billion were to of another we of back approximately total authority we'd

and Let's QX activity. our and Slide this quarter metrics. with review quarter X Commercial to there key a now turn strong deal a sales segment, was government segment, within less offset where the was lighter X was sales the in but

a larger where a be timing slightly so finish Within predicting to our $XXX our issue. there expectations. full was of year expecting can the of in in couple attainment an being $XXX to strong deals are Commercial, that see Within precision estimate, market of the to the of public below we're ACV million see sector overall ACV. year. And million million outcome range our in We $XXX

both spaces. technology to upgrades cost, drive look through business for CX us the to continue outsourcing, to transformation and clients address in Our and solutions BPaaS

a back businesses of us We solutions capability value BPO our commercial to chains strong technology-led from horizontal that across a our front in have offerings end-to-end breadth clients' the of give provide the to office. set office

rebounded net our the $XXX million. that with around expect finish somewhere see metric this quarter. you'll X, ARR this year We'd to metric Slide On

last our offset to new QX my with QX turn of revenue financial This XXXX ramp and year-over-year. results. Slide was compared million with guide in to Now last narrow. X% line QX expectations and lost partially continuing consistent let's to the removal of $XXX down gap our as runoff adjusting when XXXX, quarters causals that the Adjusted from is million couple for quarter with XXXX The business business. in and with from claims discuss are the X, $XXX for casualty business,

our around guide from million Adjusted million and to adjusted $XX efficiency business. divestitures the the sequentially for XXXX. XXXX. standard the casualty the this get for claims adjusted as in costs we for X.X% conforms removal EBITDA It's again, $XX as EBITDA Again, our we compared also work as And of other compared the quarter QX to in quarter expected to margin QX our was was programs. which cost up, into the X.X%

into of now the rates expect sequential and We in each through XXXX we the as outlined. exit XXXX towards climb and margin EBITDA progress we quarter the this remainder

segment X. the to on Turning results Slide

for to For Commercial year QX be million, The starting segment to as compared some which of quarter continues business, down adjusted off to this segment Commercial XXXX, prior lost revenues is XXXX. of line working the of compare. $XXX the story QX work top one were effect out the X%

year-over-year, margin continued by segment to performance $XX of and QX closer towards XXXX the growth flat expect segment Adjusted We gap in compared move points to as efficiency. the second the driven coming improving and for million, through EBITDA first And we to and sales of XXX XXXX. narrow growth XX% with to half retention of due approximately the basis Commercial adjusted the sales sequentially the X.X% XXXX. was ramp half up was cost up XXXX QX EBITDA

in elevated items expenses XXXX $XXX was discrete couple The as XXXX. year-over-year. XX% in narrative down should the what revenue business. X was Transportation from segment our down mix, QX in transit later from in The to down year-over-year. implementations in XXXX line adjustment by client in Transportation to our million, Australia large, breakeven compared segment The in related noted tolling drivers primary compared the XX% million year. remain the a for Adjusted this For This $X Government the the some last drives large and $XX ramp by was quarter. reduction implementation some offset with performance. were specifically in EBITDA was long last $XXX million, partially a revenues anticipated I as QX of contracts in X% Government million, million, our adjusted short-term X that pricing XXXX offset were and long-term quarter's operational is scope QX $XX project segment, segment QX approximately normalize adjusted well QX driver with as XXXX. revenues discrete for improved as outlined QX approximately previously EBITDA The here to

within where we tolling efficiency been in Transportation, public is reset and of several with into There's curbside margin drive stranded a scale back to initiatives place. safety operating now continue area costs, the one of and new to remove And businesses underway divestiture build our businesses. transit and incremental have leadership because this the

shares We largely flow. We this X.X made Slide to starting of million and to million sheet on have voluntarily previously the our and total our with now turn ended included $XXX debt remainder prepayments which $XX of B quarter of approved and Loan sheet discuss undrawn. cash the million, XX million Term approximately cash credit on program. prepay prepaying completed Loan revolving and our the and Term facility was balance We A. balance $XXX repurchased Let's

proceeds up the on debt remaining be authority from use year. divestiture still to the end million received. $XXX We'd prepay expect to of to hand authority additional before and have We the to

this XXXX, the outlook go turns and as up X.X as couple X.X cost the that we this ratio EBITDA the adjusted next is we work ratio half midterm in second Our EBITDA we see stranded our will then moving you'll X efficiency programs. we've in through partially in to annualize quarters to outlined completed the by towards exit [ XXXX. work calc offset ], sequential during leverage returning leverage net around divested decreased turns. our and This over the of of as the turn Once recovery

of the year was Capital and X.X% revenue, the for in it second expenditure about X.X% we revenue XXXX. quarter to of be expect full

outlook Let's XX and Slide to XXXX. now cover our for turn

EBITDA our last range $XXX of which Now billion. removed now how of we EBITDA quarter, midpoint, about and the billion year reflect to guided. full X the a expect that the down all of in And completed the adjusted margin. is with of range top to X%, X.XX% in X divestiture line full out casualty towards we the we expect be year revenue adjusted revenue that's laid in be will reduction the In divestitures Therefore, of these. to At point we the to planned claims end to adjusted guide $X.XXX XXXX, I of the be adjusted for range we've year-over-year. margin previously about X% approximately million $X.XXX solutions

from negative of a of levels $XX of with around the million we because reduction billing by adjustments these events, free cash not driven around break expect other public modeling point, terms not year In sector on don't milestone These timing assets. changes fully be flows early our divested is adjusted large milestones X/X the we we a this at cash of metric XXXX. our handful to quarter's last and out scope expect to are flow the considerations, adjusted the businesses. discrete land in outlook At reached in contracts

Finally, the given you'll reducing I've again, expenditure with all see outlines divestitures, in you. with prior the effect of capital the here line

rates Moving exit XXXX, these the to XX. Slide in targets. achieving confident we This remains and remain walk to our in

efficiency a our have levers multiple and pipeline margin in outcomes. work We to cost our drive strong

be for multiples continue additional about of transactions could opportunistic in the We to value. will that terms portfolio enhance right to the continue

That phase all back worked Cliff broader business of my teammates the initial over my this the to financial I'll to concludes to really remarks hand and deliver program. it who thanks Special our for for Cliff? divestiture hard quarter, update. on

Steve. Thanks,

over a turn trends, changed on what's to XX talk last sorts. let's to working and status the what about Slide been some we've report quarter, of Now

was is building business relationships growth. with key We stated Government Scott to joined a necessary. joins hired new help our leadership a previously as have Siever us Transportation stability now for is us precedent Cubic Magellan President. President. operational at where leading Copeland She this tolling, Mike sector. foundation commercial consistently businesses X Group previously We've stage Accenture. pivot. and our Federal We're foundational Anna our as now executives of to new DXC and that McDaniel He solid make and as us enhanced now from from MAXIMUS. joined from part us of leader And our leads

while economic This and our A employee a continue retention, our the end for the Commercial continued can opposite. believe pipeline year is to with strong to improvement efficiency in a we performance advantage lagged. and clients. sales and from our policy strong of Government Meanwhile, outperform. both We performance pipeline offshoring year, our diverse we client drive our is take end, experienced that businesses remains swings. renewed portfolio where sales This see to for appetite we businesses, and will commercial ago, commercial see strong

in and Victoria Within Transportation, Net-net, have quite we're implementation relative will largest our believe while impressive performance, shape. well solid state a Commercial overall year of ticketing of completion a solid progressing business pipelines account-based in experiencing attributes. upon good other is in state-of-the-art the our that are all and system, across lines Australia of among

this In We over. divestitures. to what to fully of our our supportive better our Board here More ongoing Finally, regard, plan is our not and balance bandwidth. is of nimble focused sheet, enhance come journey opportunities more further investments become efforts. see and and ongoing Directors

is is Slide XX This Slide than we ago, able Conduent and snapshot to a just made years a we've turn that little a would X picture where is go have to present different very XX let's to. portfolio Now deeper of today. of on diverse lot progress. alluded I a been to

Our we our and can as with grow percentages we expected at sales. is business exit are rates the new consistent estimate XX which rate we've last this for for been how months, the margin journey revenue narrating

high each reoccurs revenue. Conduent year. XX% of Approximately base has a recurring

and as constant, churn as long sales to course slow. volume So stays the stay continues

are We expected. as growing

client we the XX sector, service public the XX states the of We have in approximately and of Fortune XX% relationships XXX. in

available. an The those opportunity XX cross-selling top average significant tenure most clients in commercial Our XX clients of where have is large is years.

meaningful to improvements worked over clients. things the X drive to the We've past are to X our in that very years important most hard

to to The line up Our Net of and now is is of this is outcomes How come XXXX. Promoter or X% rate inverse retention, into financial improved lower. client churn, Score, points. this is which XX% XX going NPS, improved of from we've that a translates annual seen through over XX% sight and that around since

to is target X%. near-term Our below be

of and done stabilize for to into we've above growth All the company, the work move we is as well testament positioned our to XXXX. we're

resulted as Importantly, the million of our our has in which approximately done repurchasing over balance prepaying sheet the XX% shares. work divestiture through well we've months around deployed XX as to $XXX after-tax proceeds, strengthen past we've outstanding of debt

and technology capabilities, of across analytics, divestiture underpinned businesses have XXX very patents Even after payments of our this over across our solutions round by digital work, portfolio of mobility. proprietary still we initial rich with assets AI, technology, a automation, over XX% and key including

XX% take to on minutes X like recap solutions thinking from assets represents a point, the overall a categories. we on business I'd this we're how our few broadly commercial those about to the revenue about about And think Slide XX. At of in segment perspective.

are capabilities We that business solutions. can have the deployed a core be our cross-industry our at multiple of set commercial BPO horizontal rich These industries. across of

higher average, here clients for with that expect solutions across approximately XXX and top rate more attach efforts to drive cross-sell. around Our is X.X on a dedicated we

if you in half more focused important quality is business our complex a have Nearly products this work, and solutions. is Conduent will, primary other work, and of of service on is exclusively KPI. clients where CX higher-tier almost area Our continuum

a continue traditional complexity as the work that augment Given and this AI think agent We business the will sword performance, with a business customer of see evolving integrated we not tip we competitor as an company. replace as the this landscape of of don't to experience it. support, the one see

gaps from in ubiquitous and where bridge care play, other is fewer financial auto, But our business health important products for particular analytics, services, client industry-specific We industry or set revenue loan that is as as than BPOs not assets stand from of whole, those care claims care field. specialty Our a verticals. health of health X/X where Commercial business comes and apart we logistics key Across other because being many unique play. vertical the a e-discovery to solutions provider outcomes it's where others travel a eligibility. also with but service platform including can of support drug our can servicing, an care the industry, a health unlike clients more our only

to continuing we on partnerships further to others margins. to onshore the to Commercial in continue our as reshape tuck-ins and and places, narrowing improve mix work we offshore develop opportunity some as the portfolio, to business, As see well

segments to Let's turn on Transportation Slide and the Government XX.

Transportation Our up to segments of approximately make Government combined revenue. XX% and our

health We businesses sector public to through continue that to technology have services, And loop business. unique set our to set our thought public that benefit Transportation care Medicaid up cards, primarily Government and transit payments solutions, characteristics continues believe markets and assets against state sense. make strong primarily broader in federal headwinds. and prepaid sector distributed having in the X and therefore, servicing state of services and can closed tolling for and defensive be government of open within address distribution Transportation macro

Each often of typically overall than buyers longer these one different. in the the businesses, and independent superior. governments from are contract agencies The business state The within and are is margins Commercial areas and certainly another, government are itself the unique. length work is

For and Government primarily programs is Mastercard. enrollment technology a play. Tolling primarily and eligibility example, payment program an primarily transit and technology and a an a prepaid is Electronic are primarily open a health equipment is program, play. is care business. Benefits card branded technology by card program, loop primarily Government card closed-loop is business and servicing service

are business think with with We our as a businesses businesses embedded capabilities. our technology, service technology whereas Commercial business about sector embedded public

past in the Conduent. up. the Slide and infusing demonstrated new as divestiture turn continue there's growth margins, I've and to our up talent Across We've months previously public underlying through to we're significant wrap work discussed. XX to that value commercial, assets over that drive optimize let's XX make to businesses, Now all these

this the portfolio to maximizing broad that cases, within shareholder of at assets portfolio. fewer look very utilization. trapped increase through lens what The scale through the organically allowing or simplicity will continue in lot is certain inorganically to optimized or and in still running, more portfolio. for a diverse value There's bandwidth combining key peers, with of compete focus is and return, to a be monetizing We more

the cash to have line intensity our sequential trajectory, sustain improved improvement, capital moving less we and top confident margin business Conduent I'm flow conversion. on growth, right

everyone, shareholders, Thank questions. like As for now I'll I'd to for their the and for our back our XX,XXX thank operator to our you, listening, Operator? clients always, associates and turn it support.

the Markets. comes first [Operator with Instructions] line of Our McCann from Pat question NOBLE Capital

Congrats the just about to on the quarter. was ask I going results. election

Of it course, think -- little business today, versus Government's of look just might view was when in your how the segment. I bit change occur Republican regulation what that's to comes on on your I everyone's a mind you if on and you at you when units, affects how administration maybe various could versus segment the potential effects Democratic wondering for it comment Commercial

Just the for thoughts wondering any affect how for election your on if good you had would units or business bad?

great it's Cliff. It's a question. Pat,

it. way the I think about Here's

is by Our the in Very mostly sector, swings. political entitlement rarely are it's affected and those businesses. businesses business mostly transportation public

killed. Now from first differentiation affected at business. between the very little time in -- to sector course, businesses. even and time, like the speaking, subsidies part I can of revenue administration things here that, the it's there pretty our X how years Trump it we of streams of saw got And are But Biden/Harris. last then, the We policy were swings generally affect and around that public

from other has speaking, I'd like cetera, tax corporate et much from any and say, a revenue From corporate generally pretty a a mean, we're sales et impacts So I perspective, that rates, cetera. corporation perspective, unaffected.

thinking would trying I we're So what we're to do. say effect on no

pick the into just new curious soon a for more like a my MMIS far anything to you And And you say timing I contracts wondering management opportunity Medicaid RFPs. how dig states just states And was about new you maybe in there's question specific of and that? business. could that Great. information as I other just be if systems. vendors deeper could that doing was as the little regarding business it will looking for if just was nice seems

when the these of longer landscape, could opportunities in et individual landscape. financial all changed cetera. a say the mandated space. can the I go can't no modularity, CMS for comment the suite, on that opportunities any it there's this or kind in RFP. I timing of is Look, RFP scheduling, state, modules But exact behemoth after everything There's go across MMIS the module. we MMIS the X where It's X various what different

can You claims warehouse data module. module, the module, enterprise an pharmacy go the after

And good generally news those is separately, there out so come speaking. RFPs the

RFPs, So business, with there in of kind we're The to opportunity very getting stream really business, is primarily forming the RFP those you a the supportive once there can't the key that into generate to will technology state houses an And less opinion, opportunities. use decision-makers don't of when RFP drops, business. The strictly have key after but there's and else. -- an my -- regulated. that some it's and attributes always RFP is those that anything because of the are because it's relationships to sales be particular getting drops a primarily is technology actually people, you

opportunities get So there. we it. growth real We just after got see to

with & question Company. of comes next Sidoti the Marc line Our from Riddick

rationalization this sort be the maybe point? could are you where was inning is I around of in and the kind ahead thoughts there the we're program portfolio at with further we divestiture start what wondering to or and what thoughts if So of might whether and

portfolio our proceeds. opportunistic in the is can the value go that analogy with I us scarcity I to the not portfolio. of that lot future portfolio. We is use But nimble, and what help I there's be what in narrowing In interesting we're tell and rationalization still in innings Yes. other game this ninth to Well, one. and do believe inning tell to analogy going you too a into this with portfolio We're extra say is that good see not. that believe whether is or inning. the an your bones There's to can't opportunities to we to still still more be the baseball not the over. continuing. because so it opportunistic words, going respect continue we can certainly wide. We get would we're to But

I I just seems I guess, that is it you but know sort can to though as maybe clarify. yet go opportunities from the -- and want though, of feel It prior as you still choose And remarks, that I you commentary path, there mean though reasonable way you're down the pieces have, prior grow a that as there's and to some if to say it? seems

Generally -- to. can This no get there speaking, all have we but rate and scale not the at grow. -- want think to and of is always. the it is we there's answer depth And bandwidth we do

kind at factors the how when rationalize so the -- want look that's portfolio. to we rationalize decide of or And that's continue one to we we of

narrow So the everything and excuse has the just yes, there's to growth entire need, no the question, investment same and everything for the to rate. grow. be not It not leadership bandwidth right needs same has there's no need. has portfolio getting Not everything not

math put to Steve, that? we're And to up answer portfolio anything at into going that's how the so the with the end. . to come the right add to equation

portfolio out. X I that fit have their We've been and notion pretty of continues there you them fit businesses. into in discrete And sector in we've have Commercial would assets nicely add assets to able how multiples. as months, attractive carve Well, able markets some I them them assets they're solutions the remaining, last strategic into rich clearly, -- horizontal businesses at the said, find thinking together think very buyers to we divested been this there's and that. XX the well. then to We've the Cliff about for X been that able mean some of a No. of just on to to as be very about nicely of assets those if -- public

we -- outside. works spot portfolio on so continue that sweet as we'll be multiples the to that things we about get And to for what where get here it. between We'll we that's it. continue And together to that get Cliff remains find and we levers to to think to opportunistic the that be said, can going of we'll in continue business one want the attractive pull the versus to as continue

very the I I an the commentary for wanted around beneficial keeping local That's results, think Okay. gears political shift we situations, eye or appreciate to a might then you prior was going in ramifications level. question should races, that any we there be on level if be I certainly, wondering state helpful. the national And or anything on -- were forward?

not the want their mean, the for I up, Look, the the dry most for constituents may XXX% And of party. Snap to of right know, if federal ] states states. There fund the public [ -- states contracts trying are are do you episodic with events, states example, of our thing around sector as always regardless Snap funds payments. contracts, are to where

more out much are which supportive so we're blue But and states red less at And supportive. that's pretty now. sometimes, going and be between looking normalized trends to or

you business. Steve, see unless don't I -- party that's have there So -- are from anything think election just . I to going don't of regardless just I comments, impact the our

Yes, Marc, that. I would add to

As years, over play we got work in are into go the we get out technology, Those nicely themes. upgrade and government on stuff get there's the do that's very into mainframes, state think multiple our figure how about of out there a to out government got everything to lot -- that that they've many mandate, technology off business CMS stuff figure to and business needs how cloud. to state to of those

the would critical services programs. critical of programs the They're at edges policy. all of constituents. almost core They're programs, Most regard of them being we you about maintaining as not the that to run

far is very than come. functionality programs citizens right have important more on play into nicely years in supporting around and business being a the lot Government upgrades health for a go target our state to of over result. technology, an many And positioned infrastructure this business And those tailwind to election to so of that's base that got to

I more benefits, to are social it's insurance, long there Medicaid, in government to would changes the spending VA tail a if cetera, work. be mean that cetera, unemployment changes, there et monumental even et around have security, it's

not drive are the term. we just those to it's where are So get revenue. And those primarily in near just our entitlements going

a we're think here. ride we So consistent on

of line Our next Union question comes from Research. the with [indiscernible]

As we rate, exit towards targeted of color margin XXXX the provide out more your can on expansion. drivers key look and you

anticipated stranded operational the versus improvement how of of costs efficiencies Specifically, removal much or expected from is the revenue to come growth?

as on That's -- the that $XX to we've in million after. size. That's another highlight that $X out that all some go of fairly efficiency XXXX a that billion the it it. We've the -- components XX specifically a got rest and cost We've million around We've of across business of got of go of got work Chris, key normal XXXX. of going cost $XX work There's that base to around to kind we're divestitures. Slide business. remove do most target in of this has $X plans going and identified through got into for we how that of to stranded of deck, cost absolutely. we're but work I'll billion got terms the the Yes, of

going the that portfolio to And efficiency to so ways think expense us for efficient. of it quantum more that's to put not achieve against to be together we're continue challenging make about should this to a notion that

mix. of mix range is targeted to that onshore understood pricing the bridge well come that talked going the our from then fall-through a levers specific and of revenue to rate going to that that some we And business grow go going to pricing we're to we from get component expansion that. Cliff and is We've the the natural about going get balance have levers to got line offshore come we're to exit levers margin from starting The after a as to perspective. top get

that's are components out walk. how that So are on really you think laid those X and the that the about slide,

that performance affecting results, to government renewal any are working through Okay. up that. a aware in there should and losses? the how QX. near the of? similar health on of care to it's expected pretty contract And And for term the Thanks continue potential Are impact loss for mitigate -- investors be good QX high-impact contracts had you

over this a all to business stabilize or X answer churn repair historic to for about years. done our some continue grow improve. us. been of that critical the last where where [ sign proof I'll our path fact to of [ to second around gone of to ] the from to Cliff that XX the can fundamentally mean, continuing -- on through ], work us work over first. really That's X part client base that's point a we that X get it's There's talked being Well, at aspects the got point that we've and or teams confidence churn we Yes. be, a on and good is see level down need our that's it the rate retention of. that we're the very the top I sales X to

So the the first question. that's of part

-- the other is to part question second MMIS. The the in of the relation

you quarter, contract I think the out X which I related for X we MMIS continue on way think the to drivers of terms that margins. discrete in of components about going to the last of in are those segment, the laid what's Government that

into growth, to we stabilize there's with those the we there And margin get once of that. see the then that. And on beginning And effects, so backside through that that of expanding. that's then sort would -- see look annualization baked out we nothing that of isn't to

one equation, we think puck pick waterline of is mouth any in rate the where like expectations. we combination put combination into puck going. equation. we're in that's can, where of an that offset when we commercial It's underpenetrated by achieve. to in mix sales. losses. we are . put all roll-off revenue or space new in somewhat see all a volume thing Chris, just out going opinion, you were is combination mean a the the add-on that's business combination this predictor I a I that a and sight portfolio, renewals the that line it's renewals we to of that And compared -- above talked as the a project what don't you can think when the exit Those It's And all get it's about. the of current from of of and our is volume can my

concludes our this gentlemen, and you participation. and session, our for question-and-answer this thank and call concludes We Ladies interest today. your

your may disconnect You lines. now