NEWTOWN, Pa., Oct. 30, 2025 (GLOBE NEWSWIRE) -- The law firm of Edelson Lechtzin LLP is investigating data privacy claims regarding an incident at Conduent Business Services, LLC (“Conduent”). Conduent learned of a data breach on or about January 13, 2025. If you would like to discuss this case with a lawyer, please click HERE. About Conduent Business Services, LLC Conduent helps businesses and government agencies improve operations through digital process solutions. What happened? On or about January 13, 2 ...

FLORHAM PARK, N.J.--(BUSINESS WIRE)--Conduent Incorporated (Nasdaq: CNDT), a global technology- driven business solutions provider, today announced that FastCap® Finance Analytics solution has integrated a GenAI-powered contract and spend analytics capability that enables it to expedite contract intake, verify contract compliance, and identify procurement savings and tariff-related financial exposures more efficiently and more accurately. FastCap initially launched as a platform focused on preve. ...

Core Insights - Conduent Transportation has been awarded a contract by the Richmond Metropolitan Transportation Authority (RMTA) to implement a Pay-by-Plate toll collection system [1] - This initiative is part of RMTA's broader transition to all-electronic tolling (AET) on its roadways [1] - The AET system is designed to streamline traffic flow and enhance safety [1]

Core Viewpoint - Conduent Incorporated is conducting its Q2 2025 earnings conference call, highlighting its financial performance and future outlook [1][2]. Group 1: Company Overview - The conference call is led by key executives including the President and CEO, Clifford A. Skelton, and CFO, Giles Goodburn [1][2]. - The call is being recorded and is available for public access through a webcast, with supporting documents filed with the SEC [2]. Group 2: Financial Reporting - The presentation includes non-GAAP financial measures, which are not calculated in accordance with U.S. GAAP, indicating a focus on alternative financial metrics [4].

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $754 million, slightly up sequentially, with adjusted EBITDA at $37 million and an adjusted EBITDA margin of 4.9%, exceeding expectations and up year on year [6][13][21] - Adjusted revenue decreased by 2.6% year over year from $774 million in Q2 2024 [13] - New business Annual Contract Value (ACV) was $150 million, up 6% year over year and 38% sequentially [11][12] Business Line Data and Key Metrics Changes - Commercial segment adjusted revenue was $365 million, down 5.9% year over year, with adjusted EBITDA of $27 million and a margin of 7.4%, down 190 basis points [14][15] - Government segment adjusted revenue decreased by 2.9% to $238 million, but adjusted EBITDA increased by 22% to $60 million, with a margin of 25.2%, up 520 basis points [16] - Transportation segment adjusted revenue increased by 7.1% to $151 million, with adjusted EBITDA of $8 million and a margin of 5.3%, up 320 basis points [17] Market Data and Key Metrics Changes - The qualified ACV pipeline remains strong at $3.3 billion, up 5% year over year and 6% since the beginning of 2025 [12] - The company expects improved performance in the Commercial segment in Q3 as some deals are pushed from Q2 [7][10] Company Strategy and Development Direction - The company is focused on portfolio rationalization, improving culture, operations, and technology, and leveraging AI to enhance capabilities [9][26] - The new Chairman of the Board, Harsh Agrawdy, is expected to contribute significantly to the company's strategic direction [9][24] - The company aims to achieve high adjusted EBITDA margins and revenue growth in the second half of the year, despite some revenue lumpiness [10][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market despite uncertainties related to tariffs, AI, and economic conditions [27][28] - The company is confident in achieving year-over-year revenue growth in the second half of 2025, although it may fall slightly short for the full year [20][21] Other Important Information - The company launched a new three-year share buyback program for $50 million and repurchased approximately 2.7 million shares at an average price of $2.7 [19][20] - The net leverage ratio remained at 2.7 turns, with expectations for reduction in Q3 and Q4 [19] Q&A Session Summary Question: Comments on the potential impacts of the big beautiful bill, particularly around the SNAP program - Management indicated that the bill presents more opportunities than impediments, with potential fraud reduction opportunities in SNAP and open loop systems [31][32][34] Question: Drivers of new business signing momentum in the Commercial segment - Management noted consistent performance in new logos and capabilities, with a need for improved performance from account managers [35][36] Question: Timing of rationalization efforts and potential news by year-end - Management confirmed that work is underway and expressed hope for developments by the end of the year [37][39] Question: AI-driven solutions and client expansion into other services - Management confirmed that clients are seeking efficiency and quality improvements through AI, which is being implemented across various initiatives [43][44] Question: Market underestimation of revenue catalysts from regulatory developments - Management acknowledged real opportunities but emphasized that implementation speed by states is crucial [46][47] Question: Talent acquisition and attrition rates - Management reported improved retention and lower attrition rates, with muted wage pressure compared to the previous year [48][51] Question: Strategic shifts under the new Chairman's leadership - Management advised not to overreact to board changes, emphasizing continuity in strategic objectives [52][55]

Financial Performance - Adjusted Revenue for Q2 2025 was $754 million, a decrease of 2.6% year-over-year, or 2.7% in constant currency[5, 23] - Adjusted EBITDA for Q2 2025 was $37 million, resulting in an Adjusted EBITDA Margin of 4.9%[5, 23] - The company projects FY 2025 Adjusted Revenue to be between $3100 million and $3200 million, with an exit rate between $3200 million and $3300 million[40] - The company expects FY 2025 Adjusted EBITDA Margin to be between 50% and 55%, with an exit rate of approximately 8%[40] - Adjusted Free Cash Flow for Q2 2025 was negative $30 million[37, 39] - The company anticipates FY 2025 Adjusted Free Cash Flow to be between $0 million and $40 million, with an exit rate between $60 million and $80 million[41] Sales Metrics - New business signings ACV(Annual Contract Value) for Q2 2025 reached $150 million[5, 8] - New Business TCV(Total Contract Value) was $66 million in Q2 2025[8] - New Business ARR(Annual Recurring Revenue) was $66 million in Q2 2025[8, 18] - Net ARR Activity (TTM) reached $63 million[5, 10] Segment Performance - Commercial segment Adjusted Revenue was $365 million, a decrease of 5.9% year-over-year[28] - Government segment Adjusted Revenue was $238 million, a decrease of 2.9% year-over-year[28] - Transportation segment Adjusted Revenue was $151 million, an increase of 7.1% year-over-year[28] Balance Sheet - Total cash at the end of Q2 2025 was $294 million[34, 39] - Total debt was $602 million[34] - Net adjusted leverage ratio was 2.7x[34, 39] Portfolio Rationalization - The company has executed three divestitures in 2024, generating $778 million of net proceeds[43] - The company has identified additional rationalization opportunities representing up to $350 million of net proceeds[43]

[PART I — FINANCIAL INFORMATION](index=4&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section provides unaudited condensed consolidated financial statements, including income, balance sheets, cash flows, equity, and detailed explanatory notes [Condensed Consolidated Statements of Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) This statement details the company's revenues, net income (loss), and earnings per share for the reported periods Condensed Consolidated Statements of Income (Loss) (Unaudited) (in millions, except per share data) | (in millions, except per share data) | June 30, 2025 | June 30, 2024 | | :---------------------------------- | :------------ | :------------ | | **Three Months Ended:** | | | | Revenue | $754 | $828 | | Net Income (Loss) | $(40) | $216 | | Basic Net Income (Loss) per Share | $(0.26) | $1.10 | | Diluted Net Income (Loss) per Share | $(0.26) | $1.07 | | **Six Months Ended:** | | | | Revenue | $1,505 | $1,749 | | Net Income (Loss) | $(91) | $315 | | Basic Net Income (Loss) per Share | $(0.59) | $1.54 | | Diluted Net Income (Loss) per Share | $(0.59) | $1.51 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This statement presents net income (loss) and other comprehensive income (loss) to arrive at total comprehensive income (loss) Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (in millions) | (in millions) | June 30, 2025 | June 30, 2024 | | :------------ | :------------ | :------------ | | **Three Months Ended:** | | | | Net Income (Loss) | $(40) | $216 | | Other Comprehensive Income (Loss), Net | $24 | $(17) | | Comprehensive Income (Loss), Net | $(16) | $199 | | **Six Months Ended:** | | | | Net Income (Loss) | $(91) | $315 | | Other Comprehensive Income (Loss), Net | $35 | $(28) | | Comprehensive Income (Loss), Net | $(56) | $287 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (Unaudited) (in millions) | (in millions) | June 30, 2025 | December 31, 2024 | | :------------ | :------------ | :---------------- | | Total Assets | $2,488 | $2,599 | | Total Liabilities | $1,569 | $1,614 | | Total Equity | $777 | $843 | | Cash and cash equivalents | $275 | $366 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement reports the cash generated and used by operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Unaudited) (in millions) | (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------ | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $(73) | $(78) | | Net cash provided by (used in) investing activities | $15 | $553 | | Net cash provided by (used in) financing activities | $(30) | $(681) | - Proceeds from divestitures significantly decreased from **$599 million** in 2024 to **$53 million** in 2025 for the six months ended June 30[19](index=19&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) This statement details changes in the company's equity accounts, including net income, other comprehensive income, and treasury stock - Total Conduent Inc. Equity decreased from **$843 million** at December 31, 2024, to **$777 million** at June 30, 2025[17](index=17&type=chunk) - Net Income (Loss) for the six months ended June 30, 2025, was **$(91) million**, a significant decrease from **$315 million** in the prior year[22](index=22&type=chunk) - Treasury stock purchases for the six months ended June 30, 2025, were **$(8) million**, substantially lower than **$(169) million** in the prior year[22](index=22&type=chunk) [Note 1 – Basis of Presentation](index=9&type=section&id=Note%201%20%E2%80%93%20Basis%20of%20Presentation) This note describes the company's business operations and the accounting principles used in preparing the financial statements - Conduent delivers digital business solutions and services across commercial, government, and transportation sectors, leveraging cloud computing, AI, machine learning, automation, and advanced analytics[25](index=25&type=chunk) - The unaudited interim Condensed Consolidated Financial Statements are prepared in accordance with U.S. GAAP and SEC regulations, consistent with reporting interim financial information[26](index=26&type=chunk) [Note 2 – Recent Accounting Pronouncements](index=9&type=section&id=Note%202%20%E2%80%93%20Recent%20Accounting%20Pronouncements) This note outlines recently adopted and upcoming accounting standards and their expected impact on financial disclosures - Adopted FASB guidance on segment reporting (November 2023), effective for fiscal years beginning after December 15, 2023, which impacted disclosures but not the Condensed Consolidated Financial Statements[29](index=29&type=chunk) - New FASB guidance on income tax disclosures (December 2023), effective after December 15, 2024, and disaggregation of income statement expenses (November 2024), effective after December 15, 2026, are disclosure-related and will not impact results of operations, financial position, or cash flows[30](index=30&type=chunk)[31](index=31&type=chunk) [Note 3 – Revenue](index=10&type=section&id=Note%203%20%E2%80%93%20Revenue) This note provides disaggregated revenue information by segment and details future revenue recognition from performance obligations Disaggregated Revenue by Segment (in millions) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Commercial | $365 | $388 | $767 | $807 | | Government | $238 | $245 | $454 | $503 | | Transportation | $151 | $141 | $284 | $285 | | Divestitures | $0 | $54 | $0 | $154 | | **Total Consolidated Revenue** | **$754** | **$828** | **$1,505** | **$1,749** | - Estimated revenue expected to be recognized in the future related to unsatisfied or partially satisfied performance obligations at June 30, 2025, was approximately **$1.5 billion**, with **71%** expected over the next two years[41](index=41&type=chunk) [Note 4 – Segment Reporting](index=12&type=section&id=Note%204%20%E2%80%93%20Segment%20Reporting) This note presents financial data for the company's operating segments, including revenue and profit (loss) details Segment Profit (Loss) and Revenue (in millions) | Segment | Three Months Ended June 30, 2025 Revenue | Three Months Ended June 30, 2025 Profit (Loss) | Three Months Ended June 30, 2024 Revenue | Three Months Ended June 30, 2024 Profit (Loss) | | :---------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Commercial | $365 | $7 | $388 | $14 | | Government | $238 | $49 | $245 | $38 | | Transportation | $151 | $0 | $141 | $(3) | | Total (excl. Divestitures & Unallocated) | $754 | $56 | $774 | $49 | | Divestitures | $0 | $0 | $54 | $8 | | Unallocated Costs | $0 | $(67) | $0 | $(71) | | **Total Consolidated** | **$754** | **$(11)** | **$828** | **$(14)** | - Unallocated Costs for the six months ended June 30, 2025, included **$25 million** of Direct response costs related to the January 2025 Cyber Incident[49](index=49&type=chunk) [Note 5 – Divestitures](index=15&type=section&id=Note%205%20%E2%80%93%20Divestitures) This note details the sales of various business units, including cash proceeds and recognized gains - The Casualty Claims Solutions business was sold on September 1, 2024, for **$224 million** cash, resulting in a **$194 million** gain[52](index=52&type=chunk)[53](index=53&type=chunk) - The Curbside Management and Public Safety Solutions businesses were sold on April 30, 2024, for **$181 million** cash and a **$50 million** note, generating a **$103 million** gain[54](index=54&type=chunk)[55](index=55&type=chunk) - The BenefitWallet Portfolio was transferred in tranches from March to May 2024 for **$425 million** cash, resulting in a **$425 million** gain[57](index=57&type=chunk)[58](index=58&type=chunk) [Note 6 – Restructuring Programs and Related Costs](index=16&type=section&id=Note%206%20%E2%80%93%20Restructuring%20Programs%20and%20Related%20Costs) This note outlines the company's restructuring activities and associated costs aimed at operational optimization Restructuring Program Activity (in millions) | Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Severance and Related Costs | $7 | $7 | | Termination and Other Costs | $4 | $8 | | Asset Impairments | $1 | $2 | | **Total Net Current Period Charges** | **$12** | **$17** | - Restructuring programs aim to optimize the employee base, reduce real estate footprint, and improve productivity[60](index=60&type=chunk) [Note 7 – Debt](index=17&type=section&id=Note%207%20%E2%80%93%20Debt) This note details the company's long-term debt obligations, available credit, and compliance with debt covenants Long-term Debt (in millions) | Debt Type | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Term loan A due 2026 | $82 | $88 | | Senior notes due 2029 | $520 | $520 | | Finance lease obligations | $44 | $26 | | Other | $15 | $12 | | **Principal debt balance**| **$661** | **$646** | | Less: current maturities | $(28) | $(24) | | **Total Long-term Debt** | **$628** | **$615** | - As of June 30, 2025, the Company had **$540 million** available under its **$550 million** revolving credit facility[66](index=66&type=chunk) - The Company was in compliance with all debt covenants as of June 30, 2025[67](index=67&type=chunk) [Note 8 – Financial Instruments](index=17&type=section&id=Note%208%20%E2%80%93%20Financial%20Instruments) This note describes the company's use of derivative instruments to hedge foreign currency exchange rate fluctuations - The Company uses derivative instruments, primarily forward contracts, to hedge foreign currency exchange rate fluctuations[68](index=68&type=chunk) - As of June 30, 2025, outstanding forward exchange contracts had gross notional values of **$208 million**, with approximately **78%** maturing within three months[69](index=69&type=chunk) [Note 9 – Fair Value of Financial Assets and Liabilities](index=17&type=section&id=Note%209%20%E2%80%93%20Fair%20Value%20of%20Financial%20Assets%20and%20Liabilities) This note presents the fair value measurements of financial assets and liabilities, including derivative instruments and long-term debt Financial Assets and Liabilities Accounted for at Fair Value (in millions) | Category | June 30, 2025 | December 31, 2024 | | :------- | :------------ | :---------------- | | Assets: Foreign exchange contracts - forward | $3 | $0 | | Liabilities: Foreign exchange contracts - forward | $0 | $(2) | - The fair value of Long-term debt was estimated using Level 2 inputs (quoted market prices for identical or similar instruments)[76](index=76&type=chunk) [Note 10 – Employee Benefit Plans](index=18&type=section&id=Note%2010%20%E2%80%93%20Employee%20Benefit%20Plans) This note details the expenses related to the company's defined contribution plans and the immaterial impact of defined benefit plans - The Company recognized an expense related to its defined contribution plans of **$4 million** for the six months ended June 30, 2025, down from **$6 million** in the prior year[78](index=78&type=chunk) - The balance sheet and income statement impacts of any remaining defined benefit plans are immaterial[78](index=78&type=chunk) [Note 11 – Accumulated Other Comprehensive Loss ("AOCL")](index=18&type=section&id=Note%2011%20%E2%80%93%20Accumulated%20Other%20Comprehensive%20Loss%20(%22AOCL%22)) This note provides a breakdown of the components of accumulated other comprehensive loss, including currency translation adjustments and cash flow hedges Accumulated Other Comprehensive Loss (AOCL) (in millions) | Category | December 31, 2024 | Other comprehensive income (loss) (6 months ended June 30, 2025) | June 30, 2025 | | :------- | :---------------- | :--------------------------------------------------------------- | :------------ | | Currency Translation Adjustments | $(478) | $33 | $(445) | | Gains (Losses) on Cash Flow Hedges | $1 | $2 | $3 | | Defined Benefit Pension Items | $5 | $0 | $5 | | **Total** | **$(472)** | **$35** | **$(437)** | [Note 12 – Contingencies and Litigation](index=19&type=section&id=Note%2012%20%E2%80%93%20Contingencies%20and%20Litigation) This note discusses the company's involvement in various legal matters, including lawsuits and contractual obligations secured by bonds and letters of credit - The Company is involved in various claims, lawsuits, investigations, and proceedings, and believes it has recorded adequate provisions for these matters[81](index=81&type=chunk) - In the Skyview Capital LLC lawsuit, the Appellate Division ruled predominantly in CBS's favor in June 2025, dismissing Skyview's fraud claim and affirming summary judgment on certain CBS counterclaims[86](index=86&type=chunk) - As of June 30, 2025, the Company had **$566 million** of outstanding surety bonds and **$120 million** of outstanding letters of credit to secure contractual obligations[89](index=89&type=chunk) [Note 13 – Preferred Stock](index=21&type=section&id=Note%2013%20%E2%80%93%20Preferred%20Stock) This note describes the outstanding Series A convertible perpetual preferred stock, including its liquidation preference and dividend rate - The Company has **120,000** shares of Series A convertible perpetual preferred stock outstanding, with an aggregate liquidation preference of **$120 million** and an **8%** annual cash dividend rate[90](index=90&type=chunk) [Note 14 – Earnings (Loss) per Share](index=22&type=section&id=Note%2014%20%E2%80%93%20Earnings%20(Loss)%20per%20Share) This note presents the basic and diluted net earnings (loss) per share for the reported periods Net Earnings (Loss) per Share (in millions, except per share data) | (in millions, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic | $(0.26) | $1.10 | $(0.59) | $1.54 | | Diluted | $(0.26) | $1.07 | $(0.59) | $1.51 | [Note 15 – Supplementary Financial Information](index=23&type=section&id=Note%2015%20%E2%80%93%20Supplementary%20Financial%20Information) This note provides a detailed breakdown of other current liabilities, including accrued expenses and cyber event-related costs Other Current Liabilities (in millions) | Category | June 30, 2025 | December 31, 2024 | | :------- | :------------ | :---------------- | | Accrued liabilities to vendors | $145 | $156 | | Litigation related accruals | $5 | $8 | | Current operating lease liabilities | $51 | $52 | | Restructuring liabilities | $10 | $15 | | Income tax payable | $0 | $3 | | Other taxes payable | $13 | $16 | | Accrued interest | $5 | $5 | | Direct response costs - cyber event liabilities | $22 | $0 | | Other | $44 | $35 | | **Total Other Current Liabilities** | **$295** | **$290** | [Note 16 – Subsequent Events](index=23&type=section&id=Note%2016%20%E2%80%93%20Subsequent%20Events) This note discloses significant events occurring after the balance sheet date, such as new tax legislation - On July 4, 2025, the 'One Big Beautiful Bill Act' was signed into law, enacting tax reform, and the Company is evaluating its full effects on its estimated annual effective tax rate and cash tax position[95](index=95&type=chunk) [ITEM 2 — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of the company's financial condition, operational results, liquidity, and future outlook, including strategic progress and key metrics [Overview](index=24&type=section&id=Overview) This section describes Conduent's core business, global operations, and strategic focus on digital business solutions - Conduent delivers digital business solutions and services across commercial, government, and transportation sectors, leveraging cloud computing, AI, machine learning, automation, and advanced analytics[99](index=99&type=chunk) - The company operates in **24 countries** with approximately **53,000 associates**, focusing on enhancing customer experiences, improving performance, increasing efficiencies, and reducing costs for clients[99](index=99&type=chunk)[100](index=100&type=chunk) [Executive Summary](index=25&type=section&id=Executive%20Summary) This section highlights the company's strategic focus on growth, portfolio rationalization, capital allocation, and recent achievements - The company's strategy focuses on accelerating growth, enhancing stakeholder value through key growth areas, portfolio rationalization, and a balanced capital allocation approach[102](index=102&type=chunk) - Conduent aims to complete its **$1 billion** deployable capital commitment and demonstrate revenue growth in the remaining portfolio of businesses in 2025[104](index=104&type=chunk) - Q2 2025 achievements include expanding presence in the Philippines, relaunching the Vector platform in the cloud, and strengthening a major Transportation segment partnership[106](index=106&type=chunk) [Cyber Event](index=25&type=section&id=Cyber%20Event) This section details the January 2025 cyber event, its operational impact, and potential future risks - On January 13, 2025, the Company experienced a cyber event involving unauthorized access to a limited portion of its environment and exfiltration of personal information associated with clients' end-users[104](index=104&type=chunk)[105](index=105&type=chunk) - Operations were restored quickly, but material non-recurring expenses were incurred in Q1 2025 for potential notification requirements[104](index=104&type=chunk)[107](index=107&type=chunk) - Future risks from the cyber event include potential impacts related to litigation, reputational harm, and regulatory actions[108](index=108&type=chunk) [Financial Information and Analysis of Results of Operations](index=26&type=section&id=Financial%20Information%20and%20Analysis%20of%20Results%20of%20Operations%20(Overall)) This section provides an overall analysis of the company's financial performance, highlighting key changes in revenue and net income Key Financial Performance Changes (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | % Change | | :----- | :------------------------------- | :------------------------------- | :------- | :------- | | Revenue | $754 | $828 | $(74) | (9)% | | Net Income (Loss) | $(40) | $216 | $(256) | | | **Metric** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2024** | **$ Change** | **% Change** | | Revenue | $1,505 | $1,749 | $(244) | (14)% | | Net Income (Loss) | $(91) | $315 | $(406) | | [Revenue](index=27&type=section&id=Revenue%20Analysis) This section analyzes the decrease in revenue, primarily attributing it to divestitures and lower commercial volumes - Revenue decreased for both the three and six months ended June 30, 2025, primarily due to the impact of divestitures (BenefitWallet Transfer and sales of Curbside Management, Public Safety Solutions, and Casualty Claims Solutions businesses), accounting for approximately **73%** and **63%** of the respective decreases[112](index=112&type=chunk)[113](index=113&type=chunk) - Excluding divestitures, the decrease was attributed to lost business and lower Commercial volumes, partially offset by new business ramp and positive impacts from a Transit Solutions contract amendment[112](index=112&type=chunk)[113](index=113&type=chunk) [Cost of Services (excluding depreciation and amortization)](index=27&type=section&id=Cost%20of%20Services%20(excluding%20depreciation%20and%20amortization)) This section explains the decrease in cost of services due to divestitures, reduced revenues, and cost optimizations - Cost of services decreased for both the three and six months ended June 30, 2025, primarily due to the impact of divestitures[114](index=114&type=chunk) - Excluding divestitures, the decline was driven by lower expenses on reduced revenues and cost optimizations[114](index=114&type=chunk) [Selling, General and Administrative ("SG&A") (excluding depreciation and amortization)](index=27&type=section&id=Selling,%20General%20and%20Administrative%20(%22SG%26A%22)%20(excluding%20depreciation%20and%20amortization)) This section analyzes the decrease in SG&A expenses, driven by corporate efficiencies and legal cost recovery, partially offset by cyber event costs - SG&A for the three months ended June 30, 2025, decreased primarily due to cost efficiencies in corporate functions[115](index=115&type=chunk) - SG&A for the six months ended June 30, 2025, decreased due to a **$9 million** recovery of legal costs and corporate efficiencies, partially offset by **$25 million** of direct response costs related to the January 2025 Cyber Event[116](index=116&type=chunk) [Depreciation and Amortization](index=28&type=section&id=Depreciation%20and%20Amortization) This section explains the decrease in depreciation and amortization due to prior-year write-offs and divestitures, partially offset by new project amortization - Depreciation and amortization decreased for both the three and six months ended June 30, 2025, primarily due to the absence of a prior-year write-off of an abandoned internal use software asset and the sales of divested businesses[117](index=117&type=chunk) - These decreases were partially offset by increased amortization of deferred contract costs related to new projects that went live in 2025[117](index=117&type=chunk) [Restructuring and Related Costs](index=28&type=section&id=Restructuring%20and%20Related%20Costs) This section details the company's restructuring expenses, including severance, termination, and asset impairment costs Restructuring and Related Costs (in millions) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Severance and related costs | $6 | $3 | $7 | $7 | | Data center consolidation costs | $0 | $2 | $0 | $3 | | Termination, insourcing and asset impairment costs | $2 | $3 | $5 | $7 | | **Total** | **$8** | **$8** | **$12** | **$17** | [Interest Expense](index=28&type=section&id=Interest%20Expense) This section explains the decrease in interest expense due to voluntary debt prepayments made in the prior year - Interest expense decreased for both the three and six months ended June 30, 2025, primarily due to voluntary prepayments of the entire Term Loan B balance and a portion of the Term Loan A balance in 2024 using divestiture proceeds[119](index=119&type=chunk) [(Gain) Loss on Divestitures and Transaction Costs](index=28&type=section&id=(Gain)%20Loss%20on%20Divestitures%20and%20Transaction%20Costs) This section reports the gains or losses recognized from business divestitures and associated transaction costs (Gain) Loss on Divestitures and Transaction Costs (in millions) | Period | 2025 | 2024 | | :----- | :--- | :--- | | Three Months Ended June 30 | $4 | $(347) | | Six Months Ended June 30 | $7 | $(508) | - The significant gains in 2024 were primarily from the BenefitWallet Transfer (**$261 million** for three months, **$425 million** for six months) and the sale of Curbside Management and Public Safety businesses (**$108 million** for both periods)[120](index=120&type=chunk) [Litigation Settlements (Recoveries), Net](index=28&type=section&id=Litigation%20Settlements%20(Recoveries),%20Net) This section reports the net impact of litigation settlements and recoveries, noting their immateriality for the periods - Litigation settlements (recoveries), net for the six months ended June 30, 2025, were **$2 million**, compared to **$5 million** in 2024, and were not material for the periods presented[111](index=111&type=chunk)[121](index=121&type=chunk) [Income Taxes](index=28&type=section&id=Income%20Taxes) This section discusses the effective tax rates and factors influencing them, including valuation allowances and recent tax legislation Effective Tax Rate (%) | Period | June 30, 2025 | June 30, 2024 | | :----- | :------------ | :------------ | | Three Months Ended | (5.7)% | 28.2% | | Six Months Ended | 3.1% | 26.3% | - The lower effective tax rates in 2025 were primarily due to valuation allowances and geographic mix of income[122](index=122&type=chunk)[125](index=125&type=chunk) - The 'One Big Beautiful Bill Act' signed on July 4, 2025, is being evaluated for its full effects on the estimated annual effective tax rate and cash tax position[128](index=128&type=chunk) [Operations Review of Segment Revenue and Profit](index=29&type=section&id=Operations%20Review%20of%20Segment%20Revenue%20and%20Profit) This section provides a detailed review of revenue and profit performance across the company's Commercial, Government, and Transportation segments Segment Profit (Loss) and Adjusted EBITDA (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Segment Profit (Loss) | $(11) | $(14) | $(47) | $(7) | | Adjusted EBITDA | $37 | $35 | $74 | $104 | [Commercial Segment](index=31&type=section&id=Commercial%20Segment) This section analyzes the Commercial segment's revenue and profit decline, influenced by lower volumes and higher technology overhead - Commercial segment revenue and profit declined for both the three and six months ended June 30, 2025, driven by lower volumes, partially offset by new business ramp[135](index=135&type=chunk)[136](index=136&type=chunk) - Profit was also impacted by higher fixed technology overhead, partially offset by cost efficiencies and lower depreciation[136](index=136&type=chunk) [Government Segment](index=31&type=section&id=Government%20Segment) This section examines the Government segment's revenue decrease due to implementation impacts and lost business, with profit growth from cost efficiencies - Government revenue decreased for both periods due to implementation impacts and lost business, though new business is starting to outpace losses[137](index=137&type=chunk)[138](index=138&type=chunk) - Segment profit and Adjusted EBITDA increased for the three months due to cost efficiencies and AI-driven fraud prevention activities[139](index=139&type=chunk) [Transportation Segment](index=32&type=section&id=Transportation%20Segment) This section details the Transportation segment's revenue and profit increase, driven by a contract amendment and congestion charging solutions - Transportation revenue increased for the three months ended June 30, 2025, due to a contract amendment with a Transit Solutions customer and congestion charging solutions[141](index=141&type=chunk) - Segment profit and Adjusted EBITDA increased for both periods due to these revenue drivers and the absence of costs to transition a non-retained Road Usage Charging contract[143](index=143&type=chunk) [Divestitures](index=32&type=section&id=Divestitures%20(Segment)) This section reports the cessation of revenue and profit from the Divestitures segment following the completion of all sales in 2024 - Revenue, segment profit, and Adjusted EBITDA from the Divestitures segment decreased to **zero** for both periods in 2025, reflecting the completion of all divestitures in 2024[144](index=144&type=chunk) [Unallocated Costs](index=32&type=section&id=Unallocated%20Costs%20(Segment)) This section explains the decrease in unallocated costs due to corporate efficiencies, partially offset by cyber event-related expenses - Unallocated Costs decreased for both the three and six months ended June 30, 2025, primarily due to corporate cost efficiencies[145](index=145&type=chunk)[146](index=146&type=chunk) - The six-month period included a **$9 million** recovery of legal costs, partially offset by **$25 million** in direct response costs related to the January 2025 Cyber Event[146](index=146&type=chunk) [Metrics](index=32&type=section&id=Metrics) This section presents key business metrics, including new business signings and net Annual Recurring Revenue (ARR) activity [Signings](index=32&type=section&id=Signings) This section provides details on new business and renewal signings, along with the total new business pipeline Signings Information (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | New business ACV | $150 | $141 | $259 | $237 | | New business TCV | $331 | $273 | $611 | $416 | | Renewals TCV | $469 | $242 | $712 | $637 | | **Total Signings** | **$800** | **$515** | **$1,323** | **$1,053** | - Total new business pipeline at June 30, 2025, was **$3.3 billion**, up from **$3.1 billion** in 2024[151](index=151&type=chunk) [Net ARR Activity](index=33&type=section&id=Net%20ARR%20Activity) This section tracks the company's net Annual Recurring Revenue (ARR) activity over the trailing twelve months Net ARR Activity (Trailing Twelve Months, in millions) | Period | Net ARR Activity metric | | :------------- | :---------------------- | | June 30, 2025 | $63 | | March 31, 2025 | $116 | | December 31, 2024 | $92 | | September 30, 2024 | $46 | | June 30, 2024 | $(47) | [Capital Resources and Liquidity](index=34&type=section&id=Capital%20Resources%20and%20Liquidity) This section discusses the company's cash position, debt, available credit, and ability to meet future cash requirements - As of June 30, 2025, total cash and cash equivalents were **$275 million**, and **$540 million** was available under the revolving credit facility[154](index=154&type=chunk) - Total principal debt outstanding was **$661 million** as of June 30, 2025[155](index=155&type=chunk) - Management believes current cash, projected cash flow from operations, and the revolving credit facility will provide sufficient financial resources for at least the next twelve months[156](index=156&type=chunk) [Cash Flow Analysis](index=34&type=section&id=Cash%20Flow%20Analysis) This section analyzes changes in cash flows from operating, investing, and financing activities Cash Flow Summary (in millions) | Cash Flow Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Better (Worse) | | :------------- | :----------------------------- | :----------------------------- | :------------- | | Operating Activities | $(73) | $(78) | $5 | | Investing Activities | $15 | $553 | $(538) | | Financing Activities | $(30) | $(681) | $651 | - The decrease in investing cash flow was mainly due to lower proceeds from divestitures in the first half of 2025 compared to 2024[159](index=159&type=chunk) - The decrease in financing cash used was due to reduced debt prepayments and treasury stock purchases compared to the prior year[160](index=160&type=chunk) [Sales of Accounts Receivable](index=35&type=section&id=Sales%20of%20Accounts%20Receivable) This section reports the net impact of accounts receivable sales on operating cash flows - The net impact from sales of accounts receivable on operating cash flows for the six months ended June 30, 2025, was **$(11) million**, an improvement from **$(16) million** in 2024[163](index=163&type=chunk) [Material Cash Requirements from Contractual Obligations](index=35&type=section&id=Material%20Cash%20Requirements%20from%20Contractual%20Obligations) This section outlines the company's significant contractual cash obligations and its plans to meet them - Material cash requirements include debt, leases, and estimated purchase commitments, which the company expects to satisfy with current liquidity and cash generated by operations[164](index=164&type=chunk)[165](index=165&type=chunk) [Critical Accounting Estimates and Policies](index=35&type=section&id=Critical%20Accounting%20Estimates%20and%20Policies) This section confirms no significant changes to the company's critical accounting estimates and policies from the prior annual report - There have been no significant changes to the company's critical accounting estimates and policies from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024[167](index=167&type=chunk) [Recent Accounting Changes](index=35&type=section&id=Recent%20Accounting%20Changes) This section refers to Note 2 for details on recently adopted and upcoming accounting standards - Refer to Note 2 – Recent Accounting Pronouncements for information on accounting standards adopted and those not yet required to be adopted, and their expected impact[168](index=168&type=chunk) [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) This section explains the company's use of non-GAAP measures like Adjusted EBITDA to provide additional insights into business performance - The company uses non-GAAP financial measures, such as Adjusted EBITDA and Adjusted EBITDA Margin, to provide investors with a better understanding of business trends and to compare results[169](index=169&type=chunk)[170](index=170&type=chunk) - Adjusted EBITDA represents income (loss) before interest, income taxes, depreciation and amortization, and contract inducement amortization, adjusted for specific items like restructuring costs, divestiture gains/losses, and cyber event costs[172](index=172&type=chunk)[177](index=177&type=chunk) [ITEM 3 — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risk from foreign currency exchange rates, which it manages through operating and financing activities, and derivative financial instruments. No material changes to these risk management strategies were reported during the period - The Company is exposed to market risk from foreign currency exchange rates and manages this exposure using derivative financial instruments, primarily forward contracts[174](index=174&type=chunk) - There have been no material changes to the Company's financial risk management strategies with respect to foreign currency risk during the reporting period[175](index=175&type=chunk)[176](index=176&type=chunk) [ITEM 4 — CONTROLS AND PROCEDURES](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the principal executive and financial officers, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025. No material changes in internal control over financial reporting occurred during the quarter - The Company's disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[178](index=178&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[179](index=179&type=chunk) [PART II — OTHER INFORMATION](index=37&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) This section covers additional disclosures not included in the financial statements, such as legal proceedings, risk factors, and equity security sales [ITEM 1 — LEGAL PROCEEDINGS](index=37&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference the detailed information on legal proceedings from Note 12 – Contingencies and Litigation in the Condensed Consolidated Financial Statements - Information on legal proceedings is incorporated by reference from Note 12 – Contingencies and Litigation[180](index=180&type=chunk) [ITEM 1A — RISK FACTORS](index=37&type=section&id=Item%201A.%20Risk%20Factors) This section highlights that there have been no material changes to previously reported risk factors, except for an expanded discussion on cybersecurity threats. It emphasizes the company's vulnerability to security breaches, the evolving nature of cyber-attacks, and the potential adverse impacts on operations, reputation, and financial condition, including the January 2025 Cyber Event - No material changes to risk factors were reported, except for an expanded discussion on cybersecurity threats[181](index=181&type=chunk) - The company's data systems, information systems, and network infrastructure are susceptible to hacking and other cybersecurity threats, which could expose it to liability, impair its reputation, or disrupt service obligations[182](index=182&type=chunk)[183](index=183&type=chunk) - The January 2025 Cyber Event, involving unauthorized access and data exfiltration, poses potential future risks including litigation, reputational harm, and regulatory actions[186](index=186&type=chunk) [ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not issue any unregistered securities during the quarter ended June 30, 2025. It repurchased 2,681,373 shares of common stock for $2.70 per share in June 2025 under a new $50 million share repurchase program authorized by the Board of Directors on May 20, 2025 - No unregistered securities were issued during the quarter ended June 30, 2025[188](index=188&type=chunk) - The Company repurchased **2,681,373** shares of common stock at an average price of **$2.70** per share in June 2025[189](index=189&type=chunk) - A new three-year share repurchase program, authorizing up to **$50 million** of common stock repurchases, was approved by the Board of Directors on May 20, 2025[189](index=189&type=chunk) [ITEM 3 — DEFAULTS UPON SENIOR SECURITIES](index=39&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[190](index=190&type=chunk) [ITEM 4 — MINE SAFETY DISCLOSURES](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures - No mine safety disclosures were reported[191](index=191&type=chunk) [ITEM 5 — OTHER INFORMATION](index=39&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, terminated, or modified Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025 - None of the Company's directors or officers adopted, terminated, or modified a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[192](index=192&type=chunk) [ITEM 6 — EXHIBITS](index=40&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including various agreements, corporate documents, certifications (CEO/CFO), and Inline XBRL data - Exhibits include the Custodial Transfer and Purchase Agreement, Restated Certificate of Incorporation, Amended and Restated By-Laws, APIP Share Award Agreements, CEO/CFO Certifications, and Inline XBRL data[196](index=196&type=chunk)

[Company Overview](index=1&type=section&id=Company%20Overview) [Introduction](index=1&type=section&id=Introduction) Conduent Incorporated announced Q2 2025 financial results, exceeding adjusted EBITDA and margin expectations, with improved new business signings - Conduent Incorporated announced its second-quarter financial results on August 6, 2025[2](index=2&type=chunk) - CEO Cliff Skelton stated the company made progress in Q2, with **adjusted EBITDA** and **adjusted EBITDA margin** exceeding expectations, and revenue meeting guidance with slight sequential growth[3](index=3&type=chunk) - New business signings improved both year-over-year and quarter-over-quarter, supported by a strong business pipeline[3](index=3&type=chunk) - Investments in technology platforms and client relationships accelerated performance in the transportation sector[3](index=3&type=chunk) - Government and legislative decisions may create additional opportunities for the government sector, as the company continues portfolio rationalization expected to positively impact margins and cash flow[3](index=3&type=chunk) [About Conduent](index=5&type=section&id=About%20Conduent) Conduent is a global technology-driven business process solutions company, providing digital services for commercial, government, and transportation sectors - Conduent is a global technology-driven business process solutions and services company, providing digital solutions for commercial, government, and transportation sectors[14](index=14&type=chunk) - The company leverages technologies such as cloud, artificial intelligence, machine learning, automation, and advanced analytics to deliver mission-critical solutions[14](index=14&type=chunk) - Conduent has approximately **53,000 employees**, processing about **$85 billion** in government payments, **2.3 billion** customer service interactions annually, and over **13 million** toll transactions daily[14](index=14&type=chunk) [Q2 2025 Financial Performance](index=1&type=section&id=Q2%202025%20Financial%20Performance) [Key Q2 2025 Highlights](index=1&type=section&id=Key%20Q2%202025%20Highlights) Conduent achieved $754 million in revenue and adjusted revenue in Q2 2025, with a pre-tax loss of $38 million, an adjusted EBITDA margin of 4.9%, and new business signed ACV of $150 million | Metric | Amount ($ million) | | :--- | :--- | | Revenue and Adjusted Revenue | $754 | | Pre-tax Income (Loss) | $(38) | | Adjusted EBITDA Margin | 4.9% | | New Business Signed ACV | $150 | | Net ARR Activity Metric (TTM) | $63 | [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) Conduent's Q2 2025 saw revenue decline, a GAAP net loss, but improved adjusted EBITDA and cash flow performance year-over-year | Metric ($ million) | Q2 2025 | Q2 2024 | YoY Change B/(W) | | :--- | :--- | :--- | :--- | | Revenue | $754 | $828 | (8.9)% | | Adjusted Revenue | $754 | $774 | (2.6)% | | GAAP Net Income (Loss) | $(40) | $216 | n/m | | Adjusted EBITDA | $37 | $24 | 54.2% | | Adjusted EBITDA Margin | 4.9% | 3.1% | 180 bps | | GAAP Pre-tax Income (Loss) | $(38) | $300 | n/m | | GAAP Diluted EPS | $(0.26) | $1.07 | n/m | | Adjusted Diluted EPS | $(0.13) | $(0.14) | 7.1% | | Operating Cash Flow | $(15) | $(41) | 63.4% | | Adjusted Free Cash Flow | $(30) | $(55) | 45.5% | [Performance Commentary](index=2&type=section&id=Performance%20Commentary) Conduent maintained strong liquidity in Q2 2025, reported a pre-tax loss primarily due to prior-year divestiture gains, and saw adjusted EBITDA and margin exceed expectations - Conduent's liquidity position remained strong at the end of Q2, with the **$550 million** revolving credit facility largely undrawn[6](index=6&type=chunk) - The Q2 2025 pre-tax loss of **$38 million** compares to **$300 million** in the prior year, primarily due to gains from the divestiture of the BenefitWallet portfolio and the sale of Curbside Management and Public Safety businesses in the prior period[6](index=6&type=chunk) - Q2 2025 **adjusted EBITDA** was **$37 million**, with an **adjusted EBITDA margin** of **4.9%**, both higher than the prior year and exceeding expectations[7](index=7&type=chunk) - Conduent repurchased approximately **2.7 million** shares of common stock during Q2 2025[8](index=8&type=chunk) [Operational Highlights](index=3&type=section&id=Operational%20Highlights) Conduent achieved several operational milestones in Q2 2025, including expanding financial and procurement solutions with AI, implementing SNAP EBT account lock/unlock features in 12 states, and receiving supplier awards - Partnered with Fairmarkit to expand financial and procurement solutions using its AI-driven technology, including generative AI, to optimize procurement workflows and complement Conduent's FastCap® financial analytics[9](index=9&type=chunk) - Implemented a technology feature in the **12th U.S. state** allowing SNAP beneficiaries to lock and unlock their EBT accounts using Conduent's ConnectEBT mobile app and cardholder portal to help prevent fraud[9](index=9&type=chunk) - Recognized as a **Supplier of the Year** by General Motors for the fourth time, acknowledging performance in key areas such as safety, innovation, and resilience[9](index=9&type=chunk) - Named a **Leader** in two NelsonHall HR & Talent Transformation Services NEAT evaluations for Benefits Administration and Experience-Led HR Transformation in 2025[9](index=9&type=chunk) - Included in Newsweek's **Top 100 Most Loved Workplaces Globally** for the third consecutive year in 2025[9](index=9&type=chunk) - Deployed new EMV (Europay, Mastercard, and Visa) contactless ticketing systems for Gestione Governativa Navigazione Laghi in Italy, among the first EMV contactless systems for boat transportation in the country[9](index=9&type=chunk) [FY 2025 Outlook](index=4&type=section&id=FY%202025%20Outlook) Conduent projects FY 2025 adjusted revenue between $3.1 billion and $3.2 billion, with an adjusted EBITDA margin expected to be between 5.0% and 5.5%, an increase from the 3.9% actual in FY 2024 | Metric | FY 2024 Actual | FY 2025 Outlook | | :--- | :--- | :--- | | Adjusted Revenue | $3,176M | $3,100M - $3,200M | | Adjusted EBITDA / Adjusted EBITDA Margin | $124M / 3.9% | 5.0% - 5.5% | [Financial Statements (GAAP)](index=10&type=section&id=Financial%20Statements%20(GAAP)) [Condensed Consolidated Statements of Income (Loss)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) In Q2 2025, Conduent reported $754 million in revenue, a net loss of $40 million, and a diluted loss per share of $0.26, reflecting a decline in revenue and a shift from net income to loss year-over-year | ($ million, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $754 | $828 | $1,505 | $1,749 | | Operating Costs and Expenses | $792 | $528 | $1,599 | $1,322 | | Pre-tax Income (Loss) | $(38) | $300 | $(94) | $427 | | Income Tax Expense (Benefit) | $2 | $84 | $(3) | $112 | | Net Income (Loss) | $(40) | $216 | $(91) | $315 | | Diluted Income (Loss) Per Share | $(0.26) | $1.07 | $(0.59) | $1.51 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Conduent reported a net loss of $40 million and other comprehensive income, net of $24 million, resulting in a net comprehensive loss of $16 million for Q2 2025, compared to a net income and comprehensive income in the prior year | ($ million) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $(40) | $216 | $(91) | $315 | | Other Comprehensive Income (Loss), Net of Tax | $24 | $(17) | $35 | $(28) | | Comprehensive Income (Loss), Net of Tax | $(16) | $199 | $(56) | $287 | [Condensed Consolidated Balance Sheets](index=12&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Conduent's total assets were $2.488 billion, a decrease from $2.599 billion at December 31, 2024, with total liabilities at $1.569 billion and total equity at $777 million | ($ million, except share data) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and Cash Equivalents | $275 | $366 | | Total Current Assets | $1,147 | $1,252 | | Goodwill | $617 | $609 | | Total Assets | $2,488 | $2,599 | | **Liabilities and Equity** | | | | Total Current Liabilities | $697 | $744 | | Long-Term Debt | $628 | $615 | | Total Liabilities | $1,569 | $1,614 | | Total Equity | $777 | $843 | | Total Shares (Issued and Outstanding) | 159,157 thousand shares | 161,829 thousand shares | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q2 2025, Conduent reported $15 million in cash outflow from operating activities, $32 million in cash inflow from investing activities, and $20 million in cash outflow from financing activities, with cash and cash equivalents at period-end of $294 million | ($ million) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | $(15) | $(41) | $(73) | $(78) | | Net Cash from Investing Activities | $32 | $410 | $15 | $553 | | Net Cash from Financing Activities | $(20) | $(482) | $(30) | $(681) | | Effect of Exchange Rate Changes | $4 | $(4) | $5 | $(6) | | Cash and Cash Equivalents, End of Period | $294 | $307 | $294 | $307 | [Non-GAAP Financial Measures & Reconciliations](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) [Non-GAAP Definitions and Rationale](index=6&type=section&id=Non-GAAP%20Definitions%20and%20Rationale) Conduent utilizes non-GAAP financial measures, such as adjusted revenue and adjusted EBITDA, to provide investors with a clearer understanding of business trends and performance comparisons by adjusting for certain non-cash or non-recurring items - The company uses non-GAAP financial measures to help investors better understand business trends and to better understand and compare performance[15](index=15&type=chunk)[30](index=30&type=chunk) - Non-GAAP measures adjust certain amounts reported under U.S. GAAP to exclude specific items and their related tax impacts, which may be recurring or non-recurring and do not necessarily reflect ongoing operating performance[15](index=15&type=chunk)[30](index=30&type=chunk)[34](index=34&type=chunk) - Management regularly uses non-GAAP financial measures internally to understand, manage, and evaluate the business and make operating decisions[15](index=15&type=chunk)[30](index=30&type=chunk) - Non-GAAP measures include adjusted revenue, adjusted EBITDA, adjusted diluted earnings per share, free cash flow, and adjusted free cash flow, among others[33](index=33&type=chunk)[40](index=40&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) - Adjustments typically include amortization of acquired intangible assets, restructuring and related costs, goodwill impairment, divestiture gains/losses and transaction costs, litigation settlements, loss on extinguishment of debt, direct response costs for cyber incidents, and other expenses[37](index=37&type=chunk)[38](index=38&type=chunk)[45](index=45&type=chunk) - Free cash flow is defined as cash flow from operating activities less additions to land, buildings, and equipment and internal use software, plus proceeds from the sale of land, buildings, and equipment[42](index=42&type=chunk) - Adjusted free cash flow further adjusts free cash flow for litigation insurance proceeds, transaction costs, divestiture gains and litigation settlement-related taxes, gains from failed sale-leaseback transactions, and other specific adjustments[43](index=43&type=chunk) [Non-GAAP Outlook](index=18&type=section&id=Non-GAAP%20Outlook) The company provides non-GAAP outlooks for adjusted EBITDA and adjusted EBITDA margin for FY 2025, as the overall or final results of certain adjustment items cannot be reasonably determined without unreasonable effort - The company provides non-GAAP outlooks for **adjusted EBITDA** and **adjusted EBITDA margin** for FY 2025 because the overall or final results of these adjustment items cannot be reasonably determined for the forecast period[46](index=46&type=chunk) - The outlook for adjusted revenue is also provided on a non-GAAP basis, using period-end foreign currency exchange rates, as the impact of foreign currency on revenue cannot be accurately predicted[46](index=46&type=chunk) [Non-GAAP Reconciliations](index=19&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliation tables for non-GAAP financial measures, including adjusted revenue, adjusted net income (loss), adjusted effective tax rate, adjusted operating income (loss), adjusted EBITDA, adjusted diluted EPS, adjusted operating margin, adjusted EBITDA margin, and free cash flow Adjusted Revenue Reconciliation | ($ million) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $754 | $828 | $1,505 | $1,749 | | Adjustment: Divested Businesses | — | $(54) | — | $(154) | | Adjusted Revenue | $754 | $774 | $1,505 | $1,595 | | Foreign Currency Impact | $(1) | $1 | $3 | $(1) | | Revenue at Constant Currency | $753 | $775 | $1,508 | $1,594 | Adjusted Net Income (Loss) Reconciliation | ($ million) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $(40) | $216 | $(91) | $315 | | Total Non-GAAP Adjustments | $15 | $(333) | $48 | $(480) | | Income Tax Adjustments | $7 | $92 | $7 | $124 | | Adjusted Net Income (Loss) | $(18) | $(33) | $(36) | $(73) | Adjusted EBITDA Reconciliation | ($ million) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $(40) | $216 | $(91) | $315 | | Income Tax Expense (Benefit) | $2 | $84 | $(3) | $112 | | Depreciation and Amortization | $48 | $51 | $96 | $113 | | Contract Inducement Amortization | $1 | — | $1 | $1 | | Interest Expense | $12 | $19 | $24 | $46 | | EBITDA Pre-Divestitures | $23 | $370 | $27 | $587 | | Adjusted EBITDA | $37 | $24 | $74 | $60 | Free Cash Flow and Adjusted Free Cash Flow Reconciliation | ($ million) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating Cash Flow | $(15) | $(41) | $(73) | $(78) | | Additions to Land, Buildings, and Equipment | $(15) | $(18) | $(29) | $(31) | | Additions to Internal Use Software | $(5) | $(7) | $(9) | $(15) | | Free Cash Flow | $(35) | $(66) | $(111) | $(124) | | Transaction Costs | $3 | $8 | $7 | $11 | | Direct Response Payments for Cyber Incident | — | — | $2 | — | | Vendor Finance Lease Payments | $(3) | $(4) | $(7) | $(9) | | Gain from Failed Sale-Leaseback Transaction | $5 | — | $5 | — | | Divestiture and Litigation Settlement Related Tax Payments | — | $7 | — | $7 | | Adjusted Free Cash Flow | $(30) | $(55) | $(104) | $(115) | [Additional Information](index=5&type=section&id=Additional%20Information) [Conference Call Details](index=5&type=section&id=Conference%20Call%20Details) Conduent will host a conference call and webcast on August 6, 2025, at 9:00 AM ET to discuss financial results, with details provided for accessing the live event and replay - Management will present results via conference call and webcast on **August 6, 2025, at 9:00 AM ET**[11](index=11&type=chunk) - The webcast is available at https://investor.conduent.com/, and the toll-free dial-in is **877-407-4019** with conference ID **13754400**[11](index=11&type=chunk) - A replay of the conference call will be available within three hours after the call by dialing **1-877-660-6853** with replay ID **13754400**, valid until August 20, 2025[12](index=12&type=chunk)[13](index=13&type=chunk) [Forward-Looking Statements](index=7&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements regarding the company's future financial performance, operating conditions, and outlook, which are subject to various risks and uncertainties that could cause actual results to differ materially from expectations - This press release contains "forward-looking statements" concerning the company's financial performance, condition, and outlook, as well as changes in operating results, market, and economic conditions[16](index=16&type=chunk) - These statements are subject to various risks, uncertainties, and assumptions, many of which are beyond the company's control, that could cause actual results to differ materially from expectations[16](index=16&type=chunk) - Important risks and uncertainties include government contract terms, market competitiveness, reliance on third-party suppliers, geopolitical events, cybersecurity threats (such as the cyber incident in January 2025), risks related to divested businesses, goodwill impairment, significant indebtedness, and failure to comply with laws and regulations[17](index=17&type=chunk)[18](index=18&type=chunk) - The company undertakes no obligation to update or revise any forward-looking statements, except as required by law[18](index=18&type=chunk) [Media and Investor Contacts](index=9&type=section&id=Media%20and%20Investor%20Contacts) This section provides contact information for Conduent's media and investor relations - Media Contact: Sean Collins, Phone: **+1-310-497-9205**, Email: sean.collins2@conduent.com[19](index=19&type=chunk) - Investor Contact: David Chen, Email: ir@conduent.com[19](index=19&type=chunk)

Core Insights - Conduent Incorporated reported its Q2 2025 financial results, highlighting progress in Adjusted EBITDA and Adjusted EBITDA margin, with revenue slightly higher sequentially despite an overall year-over-year decline [2][3][4] Financial Performance - Q2 2025 revenue was $754 million, down 8.9% from $828 million in Q2 2024, while Adjusted Revenue decreased by 2.6% to $754 million from $774 million [3][4] - GAAP Net Loss for Q2 2025 was $(40) million compared to a profit of $216 million in Q2 2024, with Adjusted EBITDA increasing by 54.2% to $37 million from $24 million [3][4] - Adjusted EBITDA Margin improved to 4.9%, up 180 basis points from 3.1% in the prior year [3][4] - Cash Flow from Operating Activities improved to $(15) million from $(41) million, and Adjusted Free Cash Flow improved to $(30) million from $(55) million [3][4] Business Developments - New business signings increased year-over-year and sequentially, with an Annual Contract Value (ACV) of $150 million [5][6] - The company is focusing on technology investments and client relationships, particularly in the Transportation segment, which is showing accelerated performance [3][5] - Conduent's liquidity position remains strong, with a $550 million revolving credit facility largely undrawn [5] Strategic Changes - The company is undergoing portfolio rationalization efforts expected to positively impact margins and cash flow, with new leadership bringing industry experience [3][5] - Harsha Agadi has been appointed as the new Chairman of the Board, indicating a strategic pivot towards growth [3][5] Outlook - For FY 2025, Conduent projects Adjusted Revenue between $3.1 billion and $3.2 billion, with an Adjusted EBITDA margin target of 5.0% to 5.5% [8]

Group 1 - The article references a satirical song lyric to illustrate a sentiment about wealth and recognition in the investment community [1] - Robert F. Abbott has been managing his family's investment accounts since 1995 and has incorporated options trading since 2010, focusing on covered calls and collars with long stocks [1] - Abbott is a freelance writer with a project aimed at providing information for new and intermediate-level mutual fund investors [1] Group 2 - Abbott holds a Bachelor of Arts and a Master of Business Administration (MBA) degree [1]