Conduent Incorporated (NYSE:CNDT) Q2 2019 Earnings Conference Call - Final Transcript

Aug 08, 2019 • 05:00 pm ET

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Conduent Incorporated (NYSE:CNDT) Q2 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from Bryan Bergin with Cowen. Please go ahead.

Analyst
Jared Levine

Hi. This is actually Jared Levine on for Bryan today. So in terms of a potential strategic review, will it be more likely to expect another round of kind of non-core business divestitures? Or would it more likely be a broad-based kind of selling to business off in pieces? And I just have one follow-up after. Thank you.

Executive
Cliff Skelton

Hey Jared, we're -- this is Cliff. Thanks for your question. We've just started the examination with our Board, so we don't have an exact plan, but all opportunities are under review both so in pieces as well as the whole company, but there's lots of work to be done before we can give any update in that category.

Analyst
Jared Levine

Great. Thanks. And then in terms of the sales force decline can you quantify what that was year-over-year and sequentially? And what are the investments being made in terms of the sales force?

Executive
Cliff Skelton

So we're down to about 240 sales force, we were at 290 previously. Some of the investment has paid off. Some of the churn has caused us reduction. Our view is continued investment in the sales force not just from a numbers perspective, but from a quality and a sales leadership perspective is what's needed next. So as I said, we're down about 50 but we see that ramping back up and pretty quickly.

Analyst
Jared Levine

Great. Thank you.

Operator
Operator

Our next question comes from Puneet Jain with J.P. Morgan. Please go ahead.

Analyst
Puneet Jain

Hi. Thanks for taking my question. Nice to see focus on balanced cost reduction. Is there a way to think about a magnitude of incremental investments versus impact from lower revenue on margin -- EBITDA margin expectations?

Executive
Brian Webb-Walsh

Yeah. Hi, Puneet, if we look at the guidance change, it was about $65 million [Phonetic] at the midpoint. It is split pretty evenly between three things. One would be Q2 under performance. The second would be revenue pressure expected for the year and then the third would be overall spend not decreasing as much because of the balanced approach we talked about.

Analyst
Puneet Jain

Got it. Got it. And is there any timeline for the strategic review? And Cliff, it's been around two, three months since you joined the Company. Could you share your initial thoughts on Conduent's positioning? And which areas need the most attention?

Executive
Cliff Skelton

Yeah, Puneet, great, great question. I've been here around seven weeks now. I can't give you an exact timeline on the strategic review. As I said, we're just getting started with our Board and we can give you an update at the next earnings call as to how that's coming and how much longer it will take.

I would say from a viewpoint from the balcony if you will of our Company and where we are and what we need to do different, I think that's the gist of your question. I think we've done a