Conduent — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue for Q3 2026 was $534 million, a 11.7% decrease year-over-year from $605 million in Q3 2025.
• Pre-tax income from continuing operations was a loss of $35 million, compared to a loss of $38 million in Q3 2025.
• Adjusted EBITDA from continuing operations was $36 million, an increase of 16.1% year-over-year from $31 million.
• Adjusted EBITDA margin from continuing operations was 6.7%, an improvement of 160 basis points year-over-year from 5.1%.
• GAAP Net Loss was $49 million, compared to a loss of $46 million in the prior year period.
• Cash flow from operating activities was $(107) million, a 174.4% decrease year-over-year from $(39) million, primarily due to working-capital impacts from a temporary pause in the receivables factoring facility.
• Adjusted Free Cash Flow was $(117) million, a 116.7% decrease year-over-year from $(54) million.
• Total debt on the balance sheet as of September 30, 2026, was $900 million ($191 million current portion and $709 million long-term).

Guidance and Future Outlook:

• Conduent reaffirmed its full-year 2026 revenue outlook of $2.15 billion to $2.25 billion.
• The company reaffirmed its full-year 2026 Adjusted EBITDA outlook of $140 million to $170 million.
• Management expects to complete the sale of the Tolling business by year-end 2026.

Business Segments and Product Lines:

• Completed the sale of the Public Transit business to Modaxo for $164 million.
• Year-to-date new business ACV wins totaled $249 million, with Total Contract Value (TCV) wins of $473 million.
• Q3 2026 New Business Signings ACV was $61 million.
• Secured a new AI-enabled audit services engagement with a leading global automotive manufacturer.
• Added Gravie as a new client, expanding the Payment Integrity business.
• Expanded Document Services work with a long-standing insurance and employee benefits provider.
• Announced a contract spanning up to 14 years with the Commonwealth of Virginia to operate and modernize Medicaid systems.
• Partnered with the State of New Jersey to provide EBT cards with chip-enabled technology and tap-to-pay functionality.
• Received third-party HITRUST certification for cybersecurity and information protection for the Enterprise Data Warehouse Solution supporting Colorado's Medicaid program.
• Established an enterprise AI Center of Excellence to accelerate AI adoption.
• Integrated Google Cloud's Gemini models into Conduent's Viewpoint™ platform.

Market and Competitive Landscape:

• Named a leader in ISG's Global Finance and Accounting Outsourcing Provider Lens assessment for Invoice to Pay.
• Named a leader in NelsonHall's Benefit Administration and HR Transformation Services NEAT assessments.
• The company is sharpening its focus on Commercial and Government businesses following the exit from the Transportation segment.

Risks and Challenges:

• Risks related to the sale of the Transit Business and the pending sale of the Tolling Business, including the ability to realize anticipated benefits and the risk that regulatory approvals or closing conditions are not satisfied.
• Risk of not receiving some or all of the Transit holdback amounts.
• Risks associated with government appropriations, termination rights, and changes in government spending levels.
• Risks regarding the ability to renew commercial and government contracts and the loss of significant clients.
• Significant indebtedness and the terms of such indebtedness.
• Potential material alteration or failure to approve the class action settlement related to the January 2025 cyber event.
• Risks related to breaches or interruptions in information systems and network infrastructure.

Management Commentary and Tone:

• CEO Harsha V. Agadi stated the company continued to make progress in improving operating performance, with Adjusted EBITDA increasing year-over-year and sequentially.
• Management described taking "decisive steps to strengthen our financial foundation," including refinancing existing credit facilities and simplifying the portfolio.
• Cost transformation efforts have identified $106 million of the $120 million cost-savings target.
• Management emphasized the "ASCEND 2026–2028" framework focused on standardizing operations, specializing in core solutions, and scaling go-to-market capabilities.

Other Key Points:

• Completed financing of $447 million in revolving credit commitments, maturing in May 2029, by refinancing existing $357 million facilities and adding $90 million in new commitments.
• Appointed Narayanan Sundaresan as Chief Information and Technology Officer and Anna Novoseletsky as Executive Vice President, General Counsel and Secretary.
• The company exited the Transportation business, classifying the Public Transit and Tolling businesses as discontinued operations.
• Q3 2026 restructuring and related costs were $22 million.
• Interest expense for Q3 2026 was $15 million.