Good morning. Welcome to the Conduent Q2 2020 earnings conference call and webcast. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask a question. Please note, this event is being recorded. I would now like to turn the conference over to Mr. Alan Katz, Vice President of Investor Relations. Please go ahead.

Good evening, ladies and gentlemen and welcome to Conduent's second quarter 2020 earnings call. Joining me on today's call is Cliff Skelton, Conduent's CEO and Brian Walsh, Conduent's CFO. 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 SEC this afternoon. Those slides as well as a detailed financial metrics sheet are available for download on the Investor Relations section of the Conduent website. We will also post a transcript later this week. During this call, Conduent executives may make comments that contain certain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 that, 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, August 6, 2020 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 Conduent's 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 as a substitute for the company's reported financial results prepared in accordance with U.S. GAAP. For more information regarding definitions of our non-GAAP measures and how we use them as well as limitations as to their usefulness for comparative purposes, please see our press release, which was issued this afternoon and was furnished to the SEC on Form 8-K. With that, I will now turn the call over to Cliff for his prepared remarks.

Thanks, Alan. Good afternoon everyone and welcome to the second quarter earnings call here at Conduent. I appreciate everybody joining today. This is my fifth earnings call since becoming CEO about a year ago. A lot has changed, both here at Conduent and on the world stage. I hope everyone remains safe and that your families are doing well. Things are tough, I understand, and I appreciate everybody showing up today. So, thank you. So I would like to start off first by acknowledging all the Conduent associates that have helped us make a lot of progress. COVID has been tough, as I said. And with the significance of it, our team has really done a great job and I appreciate all of them. As you see on slide four, we had some great feedback from many of our associates and our clients, and those are just some examples of our performance. The bottom line is, the fundamentals of the company are improving, largely due to the hard work of our team. And as you are going to see today, the early returns say that hard work is starting to pay off, and that's from both our new and our tenured associates, so I am really proud of those folks. Let me quickly go over the agenda, and I will dive into the details later. We are going to discuss the high-level financials from the quarter, as always. We will talk about our improved sales results. We will certainly touch on both the negative and offsetting impacts of COVID, and we will go deep on transportation and our government businesses. After that, I will turn it over to Brian to run through a lot of the more detailed financials and our outlook for the third quarter. We are not going to give guidance for the year, but we are going to talk to you about what we expect in Q3. So we will go through that and then we will take questions at the end, as always. Now, let's turn to slide five. Certainly with everything going on in the world, Q2 was a good quarter. I would say Q2 was actually a really good quarter, especially compared to what we thought of internally and our external expectations. Revenue and adjusted EBITDA both came in higher. Revenue was just over $1 billion, and adjusted EBITDA was $110 million. Now, as I said, Brian is going to go through the details but I will give a brief overview of what happened in the quarter, where we did well, where we outperformed, and certainly talk about the headwinds and tailwinds associated with COVID. So let me talk about revenue first. In our transportation segment, where we were a little worried, especially in the tolling business, we are showing ourselves to be a little more resilient than we had previously anticipated. While the stay-at-home orders did lead to lower volumes, we are actually seeing traffic increasing. As you can imagine, those increases vary state by state. In fact, some states were at 90% of pre-COVID volumes and some much lower than that. Our government business performed really well in Q2, especially our government payment business. Clearly, that's due to unemployment and other subsidy volumes. So we have seen some significant volume there and we are looking forward to that continuing. As it relates to EBITDA, our cost and efficiency efforts are working, and it helped to show up our margins in Q2. Now back in Q1, we talked to you about a program where we were incrementally reducing $100 million of 2020 expenses. The good news is, we expect to significantly surpass that for the year. The other good news is, 60% of those savings are permanent. So we see that effort, which is exceeding $100 million, and Brian is going to talk about that, to help contribute to the jump-off point for 2021, which is a really good thing. Regarding sales, it was a really strong quarter. I will go through the details on the next slide. But I will note that it was not only strong but the strongest quarter of new business signings since we spun to become a separate public company. Now we are always going to be focused intently on operations. We continue to focus on both operations and quality. Our technology performance continued to improve compared to last year. Fewer incidents in aggregate and improved operational stability are really helping with client retention, which is helping with our reputation. Lastly, while a lot of associates are working from home—75% of them—we have started a very slow and measured approach to bring some of those folks back to offices where it makes sense. Now we have got to be prudent; we will continue to be prudent and based on specific COVID conditions in certain geographies, we will pace it. The good news is, we can deliver as we are in a work-from-home environment in most cases and generally speaking we are maintaining those expected service levels with that large portion of our workforce still working from home. Given the current global situation, all in all, I am quite pleased with the quarter. But to be clear, we need consistency. We need to do this every quarter. And we need over time to show you that we can grow both top and bottom line growth. This company has not grown since its spin. Our mission is to change that, and we are changing it. It's way too early to make declarations but we think Q2 is a good indication that with the right team and the right approach that mission of growth is achievable. Now let's turn to slide six. I want to talk about sales in a higher level of detail, which is obviously critical to that long term growth expectation. As you know, with respect to sales in this business, revenue ramp on new business signings can last a while. It can last a year or two. And so we have got to see these strong sales continue because it's pivotal to both 2021 and 2022 growth. The good news is that add-on business and retention contribute directly to near-term revenue achievement. So as I mentioned, we have the strongest new business TCV signings since the spin with $623 million of signings. That's a 90% improvement year-over-year and a 92% improvement over last quarter. Now, longer term deals drove some of that uptick, and we experienced some of that with longer term deals. The good news is, we also experienced significant annual revenue increases due to these new signings. So we believe that if we keep the momentum going and continue to focus on retention due to that improved quality program we talked about previously and some improved account management, it really does bode well for us in the future. In the first half of 2020, we signed $947 million of new business. That's pretty strong and that compares with $995 million for all of 2019. So you might ask, why is that? My view is, it's better processes, a stronger sales team, and stronger sales leadership. We have isolated the sales team and created a dedicated team. We have also created a more selective approach to win the bid and when not to bid. That helps us with better win rates. We are feeling pretty sanguine on what we think we can do for the year. Just to give you a little bit of color, we have included a couple of examples of wins on the slide including a new commercial client where we signed a deal with a leading healthcare company providing managed-care services. The good news out of that is, the deal leverages the HSP acquisition you might remember from 2019, thus validating that product in the marketplace. We also signed a significant government deal with Michigan's Department of Health and Human Services where we are going to provide $1.3 billion in state child support benefits annually. Lastly, in the transportation business, we signed a new tolling contract where we will be running Ohio's automated tolling system, and we are really looking forward to getting started on that project. It's a big one and we are proud of getting over the goal line on that one. But as you know, it's not just about new business signings. We need to continue to see client retention and add-on metrics improve and we are seeing that. Our pipeline now is at $22 billion, so there is some improvement there. That provides some real runway. As always, client confidence is going to be critical to our success. Quality goes hand in glove with that. We are continuing to focus on that to ensure we have better client confidence and better client referenceability. We think we have a good runway ahead of us. Now Q3. We don't know whether Q3 is going to replicate Q2. However, I can tell you that we will grow year-over-year in terms of sales growth in Q3. Importantly, we are committed to achieving that 160% of 2019 sales performance this year that I mentioned in earlier earnings calls. We are halfway there for Q3 already against quota. So that's good news. As mentioned, we are 60% of our way to our full year goal. Again, we are very sanguine on sales, but we have got to keep the pedal down, and that's what we are doing. With that, let's turn to slide seven for an update on COVID. As you might recall, in the Q1 call, we discussed some impacts of COVID-19 on Q2. First, we said that there would be significant contractions in our transportation volumes as a result of stay-at-home orders. We also said that there would be some impact to our commercial business, including the interest rate impact to BenefitWallet. Finally, we said there would be an expansion of volumes in our government services work, particularly the payments work. We are experiencing all of what we said we would experience, but to varying degrees. In the transportation segment, despite the stay-at-home orders, revenues varied by product, by volume change, and by the nature of how we generate revenue. The reduction rates that we anticipated were somewhat muted and less significant than we anticipated. The commercial business, on the other hand, was under slightly more pressure than we thought in our initial expectations in the Q1 earnings call due to lower transaction processing and healthcare volumes. In that transaction processing space, it's in the dental sector, automotive, travel, and banking where transaction volume is down generally speaking. In healthcare and workers' comp, we see lower bill reviews, mailroom, and nurse triage activity due to employees working from home. All that being said, it reflects the diversity of our portfolio in that government services segment we talked about earlier, where volume was much stronger than expected, especially with government assistance. Unemployment insurance, for example, was significantly impacted by the $600 per month federal payments from the CARES Act. We generate revenue by usage rates and transaction volume, which led to increases in Q2 revenue as we saw in the results. Regardless of the additional payments from the CARES Act, we expect that government services business to perform well in Q3. So that's a good thing. We are quite optimistic about that segment. Additionally, we might see higher usage of the SNAP cards in the fall as some schools are putting lunch programs on cards through a program you might have heard of called Pandemic SNAP or P-SNAP, where kids who normally get subsidized or free lunch at school receive food subsidies while schools are closed. This is beneficial to our business as well. Ultimately, the diversity of our offerings in turbulent markets really helps. Some of these offerings are counter-cyclical in terms of lower economic activity. So what about the rest of the year? I don't have a crystal ball here, but let me give you some expectations based on what we are seeing. We think the commercial volume pressure will likely stay, although we see it starting to modulate back up in the second half of the year. We are working to take on additional client volume from competitors, where they might not have been able to step it up. As some of these clients look to outsource more work, which we are starting to see, we are positioned to catch that as they try to manage their own cost pressures. In the transportation segment, it's too early to tell. We are watching state by state based on COVID conditions. Your guess is as good as mine as to when things will open up. The way things are going, it will be more of a state-by-state equation as I mentioned earlier. Back to that government services volume, we expect it to stay elevated. Notably, in the unemployment benefits space, we sent out 1.4 million additional cards compared to the quarter prior for unemployment benefits, highlighting the dramatic increase in claims we are witnessing. If you watch the news, you are certainly seeing that. In the SNAP and P-SNAP program, we observed a 25% volume increase. We expect these numbers to modulate up in the P-SNAP space. Previously, we stated that we believed increased volumes in that government business would lead to an incremental $20 million to $40 million in revenue. We definitely underestimated that. No one knew the gravity or timelines for COVID-19, and we now expect that number to be higher. This is critical to offset some of the impacts on transportation and commercial. As I mentioned, we continue to work hard on efficiency and cost endeavors. I want to talk a little bit about those cost savings updates on slide eight. In view of COVID-19, our transformation efforts focused on cost. The efficiency pillar I have previously discussed is a significant focus for us, allowing us to maximize cash preservation. As I mentioned, we expect to overachieve that $100 million target, which focuses on both temporary COVID-related expense reductions as well as more long-term expense reduction efforts continuing into next year. Brian will delve into that in his remarks. With respect to temporary actions related to COVID, we are focused on things like travel, furloughs, and reduced expenditure for facilities. These measures parallel the timing of COVID impacts. We are seeing offsets to the COVID impacts because of those expense maneuvers. For the permanent and longer-term actions, we are looking at aspects we haven't previously considered, such as organizational spans and layers, vendor spending, and increasing our usage of shared services. We hired a new head of operations in transportation. His role is to drive these efficiency efforts and migrate to a new phase of shared service, with a focus on process improvement and lean-type efforts. We also intend to implement a different allocation methodology for corporate overhead beginning in Q3. Brian will touch on that as well, and we will be prepared to discuss that in the Q&A. We are finding efficiencies across the board. We are evaluating our real estate footprint and adjusting to a balanced work-from-home versus work-from-Conduent-offices equation, especially in the short term. We will have a long-term equation soon. You can see from the graph there, we are targeting savings across each of these categories and are pursuing all line items to ensure we run as efficiently as we can. We have a lot more work to do. While we are on our way regarding growth, efficiency, and quality, we have much more to accomplish. The good news is, we are seeing the fundamental signs of a turnaround, and in some cases across those three pillars, we are already seeing improvements. Now let's turn to slide nine to further discuss our transformation efforts. First, I want to note that while, as we discussed in the past, other opportunities might emerge, this growth, efficiency, and quality strategy we have been outlining is finally starting to take hold. The plan is critical, regardless of the complexion or nature of our product portfolio moving forward. In addition, we continue to attract great talent, build out the size and strength of our sales team, and we will certainly be ready to discuss that in the Q&A. Our command center is fully operational and continues to support those reduced incidents I discussed and improve resolution times. Interestingly, based on our history, we completed yet another large data center migration without impact to our clients. We are very proud of our technology teams for that. We believe this transformation program will improve client performance and retention, continue driving sales success, and lead to a stronger operating environment. Before I turn it over to Brian, I want to acknowledge that it is great to see progress, and I hope you see the same progress we are experiencing. But we are committed to showing more. We are not satisfied until we can demonstrate consistency and sustained improvement leading to both top and bottom-line growth. This will also lead to margin improvement and crucially, reputational enhancement. The good news is, those Q2 sales figures are the green shoots we have been discussing and hoping for. Two quarters do not create a trend. It's a good indication of how the changes we are implementing are working. But it is an early indication. This is a journey. Rebuilds do not occur faster than downturns—in fact, possibly quite the opposite. The foundation for this turnaround is in place; it is now time to show continuity and consistency. That's what we intend to do. Finally, I am proud to have the opportunity to continue drawing talent to Conduent. I am proud to lead the great talent within Conduent and care for the clients who entrust us with their business. We want to keep this machine going. Thank you very much for your time, and I would like to turn it over to Brian to discuss the detailed financials.

Thanks, Cliff. I will start off on a similar note. I am extremely proud of the hard work from our team. It's great to see progress in delivery operations and sales. Before I begin on the financials, I will quickly note that we are going to report both GAAP and non-GAAP numbers. The reconciliations are in our filing and in the appendix of the presentation. I will start on slide 11 to review the P&L and the consolidated impact of COVID-19 on revenue and adjusted EBITDA. Revenue for the quarter was approximately $1 billion, down 8.6% compared with our second quarter results last year or 8.3% in constant currency. These results are better than expected, primarily driven by the strong volumes at our government segment related to COVID-19 and less of a COVID-19 impact in our transportation segment. From a year-over-year perspective, prior year lost business and COVID-19 related pressure from the transportation and commercial segments offset the growth in government driven by COVID. As Cliff discussed, we are making progress and trending better than expectations. This is a result of less of an impact from COVID-19, strong execution on our cost takeout program, and better top-line performance excluding COVID. I want to highlight this positive top-line trend we are seeing in the business. It's most visible when you separate the impact of COVID-19 from how we believe the business would have performed in a business-as-usual environment. The total net impact to revenue from COVID-19 was approximately $35 million for Q2. As Cliff mentioned, without the impact of COVID-19, we estimate that the year-over-year revenue decline for the quarter would have been 5.5%, better than our preliminary expectation of a 6% to 8% decline at the start of the year. Adjusted EBITDA in the quarter decreased 3% year-over-year to $110 million, while adjusted EBITDA margin improved by 50 basis points to 10.8%. The margin improvement was a result of progress in the cost savings program. COVID-19 had a net negative impact on our adjusted EBITDA of approximately $8 million, including the benefit of temporary cost actions. Excluding the impact of COVID-19 and these cost actions, our adjusted EBITDA margin would have been approximately 11.3% for the quarter. In addition to the temporary actions, we are also taking permanent actions that should position us well as we enter into 2021. Restructuring spend for the quarter was elevated at $29 million driven by our cost and expense reduction program. We expect restructuring spend for the year to be approximately $60 million, consistent with our outlook as of our last call. We are pleased that the business performed better than our expectations for Q2. Let's turn to slide 12 to go over the segment results. In the second quarter, our commercial business revenue declined 12.2%, driven primarily by prior year lost business, COVID-19 related volume declines, and the interest rate impact on the BenefitWallet business. Adjusted EBITDA was down 27.3%, while adjusted EBITDA margin of 18.5% was down 380 basis points year-over-year. The declines were primarily driven by revenue pressure, costs related to a contract exit, and were partially offset by reduced IT labor and real estate expense. Our government business grew 1.5% for the quarter, primarily driven by increasing COVID-related volumes, partially offset by the loss of the California Medicaid contract. Originally, we anticipated the California Medicaid contract would have a three-percentage-point contribution to total company year-over-year declines. That is now expected to be closer to a two-percentage-point impact in 2020 as we continue to benefit from the transition work this year. Government adjusted EBITDA increased by 17.6%, while adjusted EBITDA margins of 36.3% increased by 500 basis points. The margin improvement was due to higher volumes from COVID-19 related work and focused cost reductions. Our transportation segment revenue declined by 14.9% compared to the second quarter last year, primarily driven by COVID-19 related volume pressure, partially offset by new international transit work. Adjusted EBITDA was down 4.9% compared with Q2 2020, driven by lower revenue, partially offset by reduced IT and labor spend due to an intense cost focus. Adjusted EBITDA margin for the quarter was 23.6%, up 250 basis points year-over-year, driven by cost reductions. In the second quarter, our unallocated shared IT and corporate costs were $145 million, 9.9% lower than in Q2 2019, driven by the cost and expense program. In Q3 2020, we expect to update our segment disclosure to allocate a portion of our unallocated cost to the segments. This should provide greater visibility into the profitability of each of the three segments and will align with how we expect to review and manage the business moving forward. We plan to provide more detail on our Q3 earnings call. Let's now turn to slide 13 to discuss the strength of our balance sheet and cash flow. Our balance sheet continues to be healthy with $437 million in cash at the end of the second quarter. Our net leverage ratio was 2.6 turns at the end of the quarter, and our long-term target for net leverage remains 2 to 2.5 turns. We continue to maintain a solid liquidity position. In addition to cash on hand, our revolver had approximately $592 million of capacity available as of the end of the quarter. Our first major debt maturity isn't until the end of 2022, and we will be looking at refinancing options over the course of the next year as maturity approaches. Operating cash flow for the quarter was an inflow of $74 million, and adjusted free cash flow was $40 million, representing a 36.4% conversion for the quarter and a $156 million increase over the same quarter last year. This was driven primarily by working capital timing, and we also had an $18 million benefit in the current quarter from the payroll tax deferral associated with the CARES Act. CapEx was $36 million for the quarter, or 3.5% of revenue. We still expect to spend approximately $140 million in CapEx in 2020. Let's move on to slide 14 to touch on our expectations for Q3. Given the recent trends we are seeing in COVID-19 cases throughout the country, we will refrain from reinstating formal full year 2020 guidance. However, we thought it would be helpful to discuss our current expectations for quarter three. We anticipate revenue will be between $960 million to $1.01 billion for the quarter, with an adjusted EBITDA margin of between 10% and 11.5%. These expectations are based on the current situation we see today, but if COVID-19 impacts change significantly, it could push us towards the outer bounds of this range. Despite all of the challenges that COVID-19 has brought, our business is showing resiliency. We are continuing to deliver for our clients, and our transformation is showing progress. I want to thank our associates, shareholders, and clients for their continued support. We will now open the lines for some questions.

The first question today will come from Puneet Jain with JPMorgan. Please go ahead.

Hi. Thanks for taking my question. Great result and good to see solid traction in bookings, specifically in new business signings that were up so much. So a question there is, for some of the recent deals you won, how long were the sales cycles? Did the pandemic accelerate conversion of some of those deals in the pipeline? Or in other words, what’s driving renewed activity in signings for Conduent?

It's a great question, Puneet. There are a couple of ingredients to what you just said. Very little of what we see in the new business signings has anything to do with COVID. If you think about the $623 million in new business signings, there is a little bit of P-SNAP in there, but $600 million or so of that is really independent of COVID; it's business as usual. So that's point number one. Point number two is that the sales process for us is completely different. It's a lot more about process improvement, dedicated teams, upgrading talent, governance, bid management, and certainly leadership. So it's a changed sales environment. We are bidding on things we think we have a good shot at, and we are not pursuing others. Regarding the tenure of the deals in that $623 million, it is up, driving the TCV up. We are looking at roughly a 5.2-year average deal length, compared to previous quarters in the high threes to the fours. The good news is that it not only creates longer revenue streams, but if you look at it from a year-over-year or quarter-over-quarter basis, we are up on our ARR, with some instances showing an upward shift of up to 83% compared to last year. So we are seeing progress in all three areas.

Got it. And as you report upside in cost cutting, while that's obviously positive for the near term, too deep or steep cuts were one of the reasons for revenue headwinds in the past. So how are you balancing benefits from high-cost cuts with managing execution?

Yes. The way to think about this $100 million—which we will overachieve in the neighborhood of 20% to 40% this year—those are 2020 numbers. The way to consider it is that it's somewhat different. Roughly 40% of those are temporary cuts directly related to COVID volume. As volume goes down, we want to ensure our expenses correlate appropriately. About 60% are permanent, and you are exactly right; we need to focus on avoiding cuts that affect core operations. Our approach this time has been different—we are looking at operating model changes, spans and controls, areas that we don't anticipate growth, and combining talent to create more shared services that will drive efficiencies. This isn't just about reducing headcount, but doing it more intelligently, and that's what we are seeing in 2020.

Got it. Thank you.

And the next question will come from Shannon Cross with Cross Research. Please go ahead.

Thank you very much. I was wondering, can you talk a bit about how we should view the contribution from unemployment and some of the pandemic-related Federal money that may or may not continue? How are you thinking about balancing that against the benefits from the new signings? Is this something that, in theory, could be fairly seamless, where as the Fed money, in theory, falls off and new signings come through? How should we think about that trajectory?

I do not think—go ahead, Brian. You take it.

Hi Shannon. This is Brian. So first, I just want to say for the Q3 guidance range, at the low end, we are not assuming any extension of the Federal government unemployment supplement. The high end contemplates an extension for August and September. But the midpoint does not.

As Brian's excluded a lot of what we saw with that extra $600 per month, he has excluded it from what we are considering for Q3. What we are seeing in the current upswing, significantly above what we thought it would be—the $20 million to $40 million we discussed—is mostly unemployment, which we see probably continuing, despite our uncertainty about the $600 and possible changes. The P-SNAP funding is also expected to continue. Both factors are not directly related to what we see on a business-as-usual basis, and when you net out COVID, we see improvements over last year and what we expected in our budget.

Okay. Great. And then, when you are signing all these new contracts, how should we think about the margin profile of the contracts you are signing? How are you determining which RFPs you pursue versus the ones you don’t? Just trying to think about when we get through the pandemic and into the next set—will this be a situation where margin improvements should continue or at least hold steady?

When we are looking at new business deals, we target margins that are better than the current company margins. Occasionally, for specific deals, we may accept a lower margin, but most of the time, the margins we are signing are higher than the current company margins.

And how long does it typically take to achieve sustainable margins in a contract? There’s an upfront investment required, correct?

Yes. It usually ramps over time. It may have a lower margin initially, sometimes negative in the first year, and then it ramps from there. But it does depend on the offering, and we have some offerings that ramp faster that generate profits sooner.

Yes. It heavily depends on the product, as Brian said. Obviously, in the public sector where there is more upfront investment, it ramps a little slower. Where it's strictly services, it ramps very quickly.

Okay. Thank you.

And the next question will come from Bryan Bergin with Cowen. Please go ahead.

Hi guys. Good evening. Thank you. I wanted to ask on the cost plans. You mentioned expected outperformance. Did you quantify what that means? And then just to date, where are you relative to the target?

So Bryan, thank you. We have identified all of it. About half of it has been executed. When I say executed, it's all planned, so we know which ones we are executing when across every month. We expect to outperform between 20% and 40%, so on the outside, that’s about $140 million.

Okay. And you are 50% of the way through that run rate?

We are more than 50%. We are 100% of the way to the identification, and we are roughly 70% to 80% of the way to the execution. There are some steps that will come out later in the year, so we are 100% identified and about 70% executed.

Okay. I heard the comments on the sales process refinements that you are attributing success to here. Is the current sales force appropriately sized for the pipeline opportunity that you conveyed? Or should we expect investment there?

We are roughly about 25% over the low point from last year in terms of our sales headcount. Obviously, what's most important from that mix is the quality and the performance and execution of the team. We expect another 10% to 20% uptick over the course of the next nine months. We are not done, but we are about 80% of the way there on the body count.

Okay. And just one last one for you. How are you thinking about potential strategic alternatives? Is that off the table in this environment? Or is the performance of any of these businesses now supportive of actions to be taken?

Yes. It's a great question. Look, it's opportunistic and never off the table, right? We think we have the right strategy, irrespective of the portfolio. We are starting to see green shoots and all the rest that strategy take hold, and it’s working, irrespective of the portfolio. But it would be foolish of me to say that we are off the table; it's certainly never off the table, and we are completely opportunistic. But we want the price to be right. We don't want COVID to be taken advantage of in this mix. So I would say, no, it's not off the table.

Our next question will come from Mayank Tandon with Needham. Please go ahead.

Hi. Good evening. It's actually Kyle Peterson, on for Mayank. Great to see the improving TCV trends over the last few quarters. I just wanted to see if you have any thoughts on how quick the time to implementation and revenue will be with some of these project extensions. This would help us understand how quickly this might translate to revenue and enable us to continue turning the ship in the right direction.

Yes. It's Brian. It's similar to the margin answer; it depends on the offering. Some offerings, such as customer experience and transaction processing, ramp up quickly. Others may have an implementation period that can take, in some cases, a year or more. The good news is, through the first half, we have seen a good mix of different offerings contributing to sales numbers. We will have some revenue in the current year from these signings, while others will contribute as we get further down the line.

Okay. Great. That's helpful. And then just to follow up on margins and your longer-term thoughts on the margin profile of the business; with some of these new contracts coming in at or above current margins, plus the over-delivery on these cost targets, have you given any thoughts, or could you provide insight on where you think the margin in this business could head in a more normalized operating environment?

Over time, we have said that peers of this business operate at about a 15% EBITDA margin. We see no barriers to reaching that level over time. However, in the near term, we want to prioritize improving margin somewhat while also investing in efforts to reverse the revenue patterns. That balancing act will keep margins lower in the near term than that level. We have talked about staying in the range of 10.5% to 11.5% over the next year or two. Of course, we've had good performance in Q2, and we will keep driving margin improvement as we can. But we want to ensure that we strike the right balance between turning the top line around and improving margins.

Great. That's helpful color. Thanks, guys. Nice quarter.

Let me first say thank you to everyone for joining today. We feel like we are on track and making progress. We hope to have another good Q3 to discuss with you in three months. It’s encouraging to see the green shoots, but momentum and consistency are what we are looking for. I would also like to thank our employees for their hard work, our clients for their business, and our shareholders for your confidence and support. I hope everyone stays safe and keeps their families safe during this crisis. Thank you all for joining.

The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.