Convergys Corporation (NYSE:CVG) Q4 2017 Earnings Conference Call Transcript
Feb 22, 2018 • 09:00 am ET
Welcome to the Convergys Fourth Quarter 2017 Earnings Teleconference. Your lines have been placed on listen-only until the question and answer session. (Operator Instructions) This call is being recorded. If you have any objections, you may disconnect at this time.
I'll now turn the call over to Mr. David Stein, Vice President of Investor Relations. You may proceed, sir.
Thank you, Jessie, and good morning. Welcome to the Convergys Fourth Quarter and Full Year 2017 Earnings Call and Webcast Presentation. Please note that slides accompanying today's prepared remarks are available on the Convergys Investor Relations website under Events & Presentations.
Today's call contains forward-looking statements that address our expected future performance and that, by their nature, address matters that are uncertain. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements as a result of new information or future events or developments. Please refer to yesterday's earnings release and our most recent filings with the SEC for additional information regarding uncertainties that could affect our future financial results. This includes the risk factors provided in our Form 10-K for the year ended December 31, 2017.
Also on the call, we will discuss non-GAAP financial measures, including adjusted free cash flow, operating income, EBITDA and EPS as well as constant-currency revenue growth. A reconciliation of these non-GAAP measures is available in the news release and on the convergys.com website under Investor.
With me on the call today are Andrea Ayers, our President and Chief Executive Officer; and Andre Valentine, our Chief Financial Officer. Andrea will provide a summary of our operating performance, and Andre will cover our financial results and business outlook, then we'll open the call for your questions.
Now I'll turn the call over to Andrea.
Andrea J. Ayers
Good morning, everyone, and thank you for joining us today. Consistent with our expectations for the fourth quarter, we delivered sequential improvement in adjusted results compared with the third quarter results. Revenue was $689 million in the quarter. On an adjusted basis, operating income was $60 million, EBITDA was $84 million, and EPS was $0.47. We also generated $64 million of free cash flow.
For the full year of 2017, revenue increased with our clients in the financial services and other verticals. This partially offset headwinds from some of our clients in the communications and technology verticals. Adjusted EBITDA margin improved for the year, and adjusted earnings per share grew. Consolidated revenue came in as expected on a constant currency basis. EBITDA margin expanded to 12.6%, and adjusted EPS increased to $1.87. Adjusted free cash flow was $209 million. Our strong cash generation allowed us to invest in the business during the year while returning $118 million to investors through stock repurchase and dividends.
Now let us review our fourth quarter operating performance in a bit more detail. In terms of revenue, on a sequential basis, revenue increased with clients in our financial services and other