Conduent (NASDAQ: CNDT) posts 2025 loss but lifts adjusted EBITDA and margins
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Conduent Incorporated reported mixed fourth quarter and full-year 2025 results. Q4 revenue was $770 million, down 3.8% year over year, and full-year revenue was $3,042 million, down 9.4%. The company posted a Q4 GAAP net loss of $33 million and a full-year net loss of $170 million, compared with a $426 million profit in 2024, largely because the prior year included sizeable divestiture gains.
Profitability on an adjusted basis improved. Q4 adjusted EBITDA rose to $50 million from $32 million, lifting margin to 6.5% from 4.0%. For 2025, adjusted EBITDA increased to $164 million from $124 million, with margin up to 5.4% from 3.9%, helped by cost optimization and higher-margin items.
The company ended 2025 with $243 million in cash and total debt of $687 million, implying a net adjusted leverage ratio of 2.8x. Full-year operating cash flow was $(73) million and adjusted free cash flow was $(130) million. Management highlighted stronger trends in Government and Transportation, weaker performance in Commercial, and outlined priorities around cost reduction, portfolio optimization, and converting sales pipeline into growth.
Positive
- None.
Negative
- None.
Insights
Revenue declined but margins and adjusted EBITDA improved as Conduent emphasized cost discipline and balance-sheet flexibility.
Conduent’s 2025 revenue fell to
Operationally, profitability trends improved. Adjusted EBITDA increased to
Leverage rose as net debt increased to
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): February 12, 2026
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
| (Address of principal executive offices) (Zip Code) | ||||||||
Registrant’s telephone number, including area code: (844 ) 663-2638
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (CFR 240.12b-2).☐ Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On February 12, 2026, Conduent Incorporated (the "Company") released its fourth quarter 2025 financial results and is furnishing to the Securities and Exchange Commission (the "Commission") a copy of the financial results press release as Exhibit 99.1 to this Current Report on Form 8-K (this "Report") under Item 2.02 of Form 8-K.
The information contained in Item 2.02 of this Report and in Exhibit 99.1 shall not be deemed “filed” with the Commission for purposes of Section 18 of the Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.
Item 7.01. Regulation FD Disclosure.
On February 12, 2026, the Company conducted a financial results call regarding its 2025 fourth quarter results and is furnishing to the Commission a copy of the presentation used during the financial results call as Exhibit 99.2 to this Report under Item 7.01 of Form 8-K.
The information contained in Item 7.01 of this Report and in Exhibit 99.2 to this Report shall not be deemed “filed” with the Commission for purposes of Section 18 of the Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |||||||
99.1 | Registrant’s fourth quarter 2025 financial results press release dated February 12, 2026 | |||||||
99.2 | Registrant’s investor presentation dated February 12, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
Forward-Looking Statements
This Report and any exhibits to this Report may contain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995, as amended (the "Litigation Reform Act"). The words “anticipate,” “believe,” “estimate,” “expect,” "plan," “intend,” “will,” “aim,” “should,” “could,” “forecast,” “target,” “may,” "continue to," "endeavor," "if,” “growing,” “projected,” “potential,” “likely,” "see," "ahead," "further," "going forward," "on the horizon," "as we progress," "going to," "path from here forward," "think," "path to deliver," "from here," “on track”, “remain” and similar expressions (including the negative and plural forms of such words and phrases), as they relate to us, are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, many of which are outside of our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expressed or implied in this Report, any exhibits to this Report and other public statements we make.
Important factors and uncertainties that could cause our actual results to differ materially from those in our forward-looking statements include, but are not limited to: government appropriations and termination rights contained in our government contracts; the competitiveness of the markets in which we operate and our ability to renew commercial and government contracts, including contracts awarded through competitive bidding processes; our ability to recover capital and other investments in connection with our contracts; our reliance on third-party providers; the impact of geopolitical events and geopolitical tensions (such as the war in the Ukraine and conflict in the Middle East), macroeconomic conditions, natural disasters and other factors in a particular country or region on our workforce, customers and vendors; our ability to deliver on our contractual obligations properly and on time; changes in continued interest in outsourced business process services; the adverse effect of claims of infringement of third-party intellectual property rights; our ability to estimate the scope of work or the costs of performance in our contracts; the loss of key senior management and our ability to attract and retain necessary technical personnel and qualified subcontractors; our failure to develop new service offerings and protect our intellectual property rights; our ability to modernize our information technology infrastructure and consolidate data centers; expectations relating to environmental, social and governance considerations; utilization of our stock repurchase program; the effects related to our use of artificial intelligence on our business; the failure to comply with laws relating to individually identifiable information and personal health information; the failure to comply with laws relating to processing certain financial transactions, including payment card transactions and debit or credit card transactions; breaches of our information systems or security systems or any service interruptions; risks related to hacking or other cybersecurity threats to our data systems, information systems and network infrastructure and other service interruptions, including relating to the previously disclosed cyber event that took place in January 2025 (the "January 2025 Cyber Event"), including our investigation of such incident and mitigation and remediation efforts, the nature and extent of such incident, the potential disruption to our business or operations, the potential impact on our reputation, and our assessments of the likely financial and operational impacts of such incident; our ability to comply with data security standards; developments in various contingent liabilities that are not reflected on our balance sheet, including those arising as a result of being involved in a variety of claims, lawsuits, investigations and proceedings; risks related to divestiture transactions, including but not limited to the Company’s ability to realize the benefits anticipated from such transactions,and unexpected costs or liabilities in connection with such transactions; the impact of potential goodwill and other asset impairments on our results of operations; our significant indebtedness and the terms of such indebtedness; our failure to obtain or maintain a satisfactory credit rating and financial performance; our ability to obtain adequate pricing for our services and to improve our cost structure; our ability to collect our receivables, including those for unbilled services; a decline in revenues from, or a loss of, or a reduction in business from or failure of significant clients; fluctuations in our non-recurring revenue; increases in the cost of voice and data services or significant interruptions in such services; our ability to receive dividends or other payments from our subsidiaries; and other factors that are set forth in the “Risk Factors” section, the “Legal Proceedings” section, the “Management's Discussion and Analysis of Financial Condition and Results of Operations” section and other sections in our Annual Reports on Form 10-K, as well as in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with or furnished to the Commission. Any forward-looking statements made by us in this Report speak only as of the date on which they are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether because of new information, subsequent events or otherwise, except as required by law.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly authorized this Report to be signed on its behalf by the undersigned duly authorized.
Date: February 12, 2026
| CONDUENT INCORPORATED | |||||
| By: | /s/ GEORGE ABATE | ||||
| George Abate | |||||
| Vice President and Chief Accounting Officer | |||||
EXHIBIT 99.1
News from Conduent
| Conduent Incorporated 100 Campus Drive, Suite 200 Florham Park, NJ 07932 | ||
| www.conduent.com | ||
Conduent Reports Fourth Quarter and Full Year 2025 Financial Results
Key Q4 and Full Year 2025 Highlights
•Revenue and Adj. Revenue(1): Q4 $770M / FY $3,042M
•Pre-tax Income (Loss): Q4 $(28)M / FY $(160)M
•Adj. EBITDA Margin(1): Q4 6.5% / FY 5.4%
•New Business Signings ACV(2): Q4 $152M / FY $517M
FLORHAM PARK, NJ, February 12, 2026 - Conduent Incorporated (Nasdaq: CNDT), a global technology driven business process solutions and services company, today announced its fourth quarter and full year 2025 financial results.
Harsha V. Agadi, Chief Executive Officer stated. “Q4 and full‑year 2025 reflected mixed execution for Conduent. In our Government and Transportation segments, we saw improving revenue trends, continued growth in the sales pipeline, and further gains in cost efficiency. In Commercial, we are focused on strengthening our go‑to‑market strategy by enhancing our sales organization and expanding penetration of our solutions within our existing client base. While we recognize there is more work ahead, the results in Government and Transportation demonstrate the early impact of the disciplined actions the team has taken over the past several months."
“Having led several successful transformations, I know sustainable turnarounds are built on focus, consistency, and a commitment to serving clients exceptionally well. I’ve been impressed by the strength of our people, our capabilities, and the opportunities to deepen adoption of our AI‑ and GenAI‑enabled solutions."
Agadi continued, “Our priorities are clear: accelerating execution, enforcing financial discipline, reducing our cost structure, optimizing the portfolio, converting pipeline into growth, and simplifying our organizational structure to position us to capitalize on the opportunities ahead. I look forward to continuing this work with our teams and updating our stakeholders as we advance our progress.”
1
EXHIBIT 99.1
Key Financial Q4 and Full Year 2025 Results
| ($ in millions, except margin and per share data) | Q4 2025 | Q4 2024 | Current Quarter Y/Y B/(W) | FY 25 | FY 24 | FY Y/Y B/(W) | ||||||||||||||
| Revenue | $770 | $800 | (3.8)% | $3,042 | $3,356 | (9.4)% | ||||||||||||||
Adjusted Revenue(1) | $770 | $800 | (3.8)% | $3,042 | $3,176 | (4.2)% | ||||||||||||||
| GAAP Net Income (Loss) | $(33) | $(12) | (158.3)% | $(170) | $426 | (139.9)% | ||||||||||||||
Adjusted EBITDA(1) | $50 | $32 | 56.3% | $164 | $124 | 32.3% | ||||||||||||||
Adjusted EBITDA Margin(1) | 6.5% | 4.0% | 250 bps | 5.4% | 3.9% | 150 bps | ||||||||||||||
| GAAP Income (Loss) Before Income Tax | $(28) | $(82) | 68.3% | $(160) | $504 | (131.7)% | ||||||||||||||
| GAAP Diluted EPS | $(0.23) | $(0.09) | $(0.13) | $(1.14) | $2.23 | $(3.37) | ||||||||||||||
Adjusted Diluted EPS(1) | $(0.09) | $(0.15) | $0.07 | $(0.43) | $(0.51) | $0.08 | ||||||||||||||
| Cash Flow from Operating Activities | $39 | $41 | (4.9)% | $(73) | $(50) | (46.0)% | ||||||||||||||
Adjusted Free Cash Flow(1) | $28 | $62 | (54.8)% | $(130) | $(59) | (120.3)% | ||||||||||||||
Performance Commentary
At the end of 2025, Conduent maintained a cash balance of $243 million along with $223 million unused capacity under its recently renewed credit facility.
Full year 2025 pre-tax income (loss) was $(160) million versus $504 million in the prior year. This decrease is primarily caused by the divestiture-driven gains in the prior year.
2025 Adjusted EBITDA of $164 million and Adjusted EBITDA margin of 5.4% increased versus the prior year and were in line with guidance showing continued momentum toward our target margin.
CEO Priorities
•Increase speed and accountability: Accelerate decision making and operational excellence across a global enterprise that is focused on being client centric.
•Enforce financial discipline: Drive all decisions through the lens of their impact to revenue growth, margin expansion, and free cash flow.
•Reduce cost structure: Leaner organization with clear line of sight for business leaders. We will reduce layers and empower leaders with full P&L ownership.
•Optimize the portfolio: Execute a fix, sell, or grow strategy to improve performance, reduce debt, and invest in growth.
•Convert pipeline to growth: Improve pipeline execution to deliver consistent revenue growth.
(1) Refer to Appendix for definition and complete non-GAAP reconciliations of Adjusted Revenue, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Diluted EPS and Adjusted Free Cash Flow.
(2) Refer to Appendix for definition
2
EXHIBIT 99.1
Conference Call
Management will present the results during a conference call and webcast on February 12, 2026 at 9:00 a.m. ET.
The call will be available by live audio webcast along with the news release and online presentation slides at https://investor.conduent.com/.
The conference call will also be available by calling 877-407-4019 toll-free. If requested, the conference ID for this call is 13758159.
The international dial-in is 1-201-689-8337. The international conference ID is also 13758159.
A recording of the conference call will be available by calling 1-877-660-6853 three hours after the conference call concludes. The replay ID is 13758159.
The telephone recording will be available until February 26, 2026
About Conduent
Conduent delivers digital business solutions and services spanning the commercial, government and transportation spectrum – creating valuable outcomes for its clients and the millions of people who count on them. The Company leverages cloud computing, artificial intelligence, machine learning, automation and advanced analytics to deliver mission-critical solutions. Through a dedicated global team of approximately 51,000 associates, process expertise and advanced technologies, Conduent’s solutions and services digitally transform its clients’ operations to enhance customer experiences, improve performance, increase efficiencies and reduce costs. Conduent adds momentum to its clients’ missions in many ways including disbursing approximately $80 billion in government payments annually, enabling approximately 2.0 billion customer service interactions annually, empowering millions of employees through HR services every year and processing over 14 million tolling transactions every day. Learn more at www.conduent.com.
3
EXHIBIT 99.1
Non-GAAP Financial Measures
We have reported our financial results in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP). In addition, we have discussed our financial results using non-GAAP measures. We believe these non-GAAP measures allow investors to better understand the trends in our business and to better understand and compare our results. Accordingly, we believe it is necessary to adjust several reported amounts, determined in accordance with U.S. GAAP, to exclude the effects of certain items as well as their related tax effects. Management believes that these non-GAAP financial measures provide an additional means of analyzing the results of the current period against the corresponding prior period. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, our reported results prepared in accordance with U.S. GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable U.S. GAAP measures and should be read only in conjunction with our Consolidated Financial Statements prepared in accordance with U.S. GAAP. Our management regularly uses our non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. Providing such non-GAAP financial measures to investors allows for a further level of transparency as to how management reviews and evaluates our business results and trends. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on certain of these non-GAAP measures. Refer to the "Non-GAAP Financial Measures" section attached to this release for a discussion of these non-GAAP measures and their reconciliation to the reported U.S. GAAP measures.
4
EXHIBIT 99.1
Forward-Looking Statements
This press release, any exhibits or attachments to this release, and other public statements we make may contain "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “estimate,” “expect,” "expectations," "in front of us," "plan," “intend,” “will,” “aim,” “should,” “could,” “forecast,” “target,” “may,” "continue to," "looking to continue," “endeavor,” "if,” “growing,” “projected,” “potential,” “likely,” "see," "ahead," "further," "going forward," "on the horizon," "as we progress," "going to," "path from here forward," "think," "path to deliver," "from here," "on track," "remain" and similar expressions (including the negative and plural forms of such words and phrases), as they relate to us, are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. All statements other than statements of historical fact included in this press release or any attachment to this press release are forward-looking statements, including, but not limited to, statements regarding our financial results, condition and outlook; changes in our operating results; general and market and economic conditions. These statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions, many of which are outside of our control, that could cause actual results to differ materially from those expected or implied by such forward-looking statements contained in this press release, any exhibits to this press release and other public statements we make.
Important factors and uncertainties that could cause our actual results to differ materially from those in our forward-looking statements include, but are not limited to: government appropriations and termination rights contained in our government contracts, the competitiveness of the markets in which we operate and our ability to renew commercial and government contracts, including contracts awarded through competitive bidding processes; our ability to recover capital and other investments in connection with our contracts; the impact of geopolitical events and geopolitical tensions (such as the war in the Ukraine and conflict in the Middle East), macroeconomic conditions, natural disasters and other factors in a particular country or region on our workforce, customers and vendors; our reliance on third-party providers; our ability to deliver on our contractual obligations properly and on time; changes in continued interest in outsourced business process services; the adverse effect of claims of infringement of third-party intellectual property rights; our ability to estimate the scope of work or the costs of performance in our contracts; the loss of key senior management and our ability to attract and retain necessary technical personnel and qualified subcontractors; our failure to develop new service offerings and protect our intellectual property rights; our ability to modernize our information technology infrastructure and consolidate data centers; expectations relating to environmental, social and governance considerations; utilization of our stock repurchase program; the effects related to our use of artificial intelligence on our business; the failure to comply with laws relating to individually identifiable information and personal health information; the failure to comply with laws relating to processing certain financial transactions, including payment card transactions and debit or credit card transactions; breaches of our information systems or security systems or any service interruptions; risks related to hacking or other cybersecurity threats to our data systems, information systems and network infrastructure and other service interruptions, including relating to the previously disclosed cyber event that took place in January 2025 (the
5
EXHIBIT 99.1
“January 2025 Cyber Event”), including Conduent’s investigation of such incident and mitigation and remediation efforts, the nature and extent of such incident, the potential disruption to our business or operations, the potential impact on Conduent’s reputation, and Conduent’s assessments of the likely financial and operational impacts of such incident; our ability to comply with data security standards; developments in various contingent liabilities that are not reflected on our balance sheet, including those arising as a result of being involved in a variety of claims, lawsuits, investigations and proceedings; risks related to divestiture transactions, including but not limited to the Company’s ability to realize the benefits anticipated from such transactions, and unexpected costs or liabilities in connection with such transactions, the impact of potential goodwill and other asset impairments on our results of operations; our significant indebtedness and the terms of such indebtedness; our failure to obtain or maintain a satisfactory credit rating and financial performance; our ability to obtain adequate pricing for our services and to improve our cost structure; our ability to collect our receivables, including those for unbilled services; a decline in revenues from, or a loss of, or a reduction in business from or failure of significant clients; fluctuations in our non-recurring revenue; increases in the cost of voice and data services or significant interruptions in such services; our ability to receive dividends or other payments from our subsidiaries; and other factors that are set forth in the “Risk Factors” section, the “Legal Proceedings” section, the “Management's Discussion and Analysis of Financial Condition and Results of Operations” section and other sections in our 2025 Annual Report on Form 10-K, as well as in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with or furnished to the Securities and Exchange Commission. Any forward-looking statements made by us in this release speak only as of the date on which they are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether because of new information, subsequent events or otherwise, except as required by law.
6
EXHIBIT 99.1
# # #
Media Contacts:
Sean Collins, Conduent, +1-310-497-9205, sean.collins2@conduent.com
Investor Contacts:
Joshua Overholt, Conduent, joshua.overholt@conduent.com
7
EXHIBIT 99.1
CONDUENT INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| (in millions, except per share data) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Revenue | $ | 770 | $ | 800 | $ | 3,042 | $ | 3,356 | ||||||||||||||||||
| Operating Costs and Expenses | ||||||||||||||||||||||||||
| Cost of services (excluding depreciation and amortization) | 624 | 662 | 2,490 | 2,730 | ||||||||||||||||||||||
| Selling, general and administrative (excluding depreciation and amortization) | 96 | 109 | 412 | 455 | ||||||||||||||||||||||
| Research and development (excluding depreciation and amortization) | 1 | 2 | 4 | 6 | ||||||||||||||||||||||
| Depreciation and amortization | 50 | 47 | 194 | 204 | ||||||||||||||||||||||
| Restructuring and related costs | 11 | 25 | 35 | 46 | ||||||||||||||||||||||
| Interest expense | 12 | 13 | 48 | 75 | ||||||||||||||||||||||
| Goodwill impairment | — | 28 | — | 28 | ||||||||||||||||||||||
| (Gain) loss on divestitures and transaction costs, net | 3 | — | 11 | (696) | ||||||||||||||||||||||
| Litigation settlements (recoveries), net | (3) | 3 | (1) | 9 | ||||||||||||||||||||||
| Loss on extinguishment of debt | — | 2 | 1 | 8 | ||||||||||||||||||||||
| Other (income) expenses, net | 4 | (9) | 8 | (13) | ||||||||||||||||||||||
| Total Operating Costs and Expenses | 798 | 882 | 3,202 | 2,852 | ||||||||||||||||||||||
| Income (Loss) Before Income Taxes | (28) | (82) | (160) | 504 | ||||||||||||||||||||||
| Income tax expense (benefit) | 5 | (70) | 10 | 78 | ||||||||||||||||||||||
| Net Income (Loss) | $ | (33) | $ | (12) | $ | (170) | $ | 426 | ||||||||||||||||||
| Net Income (Loss) per Share: | ||||||||||||||||||||||||||
| Basic | $ | (0.23) | $ | (0.09) | $ | (1.14) | $ | 2.28 | ||||||||||||||||||
| Diluted | $ | (0.23) | $ | (0.09) | $ | (1.14) | $ | 2.23 | ||||||||||||||||||
8
EXHIBIT 99.1
CONDUENT INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Net Income (Loss) | $ | (33) | $ | (12) | $ | (170) | $ | 426 | ||||||||||||||||||
Other Comprehensive Income (Loss), Net(1) | ||||||||||||||||||||||||||
| Currency translation adjustments, net | 3 | (23) | 34 | (37) | ||||||||||||||||||||||
| Unrecognized gains (losses), net | (1) | (1) | (1) | (1) | ||||||||||||||||||||||
| Changes in benefit plans, net | 2 | 1 | 2 | 1 | ||||||||||||||||||||||
| Other Comprehensive Income (Loss), Net | 4 | (23) | 35 | (37) | ||||||||||||||||||||||
| Comprehensive Income (Loss), Net | $ | (29) | $ | (35) | $ | (135) | $ | 389 | ||||||||||||||||||
(1)All amounts are net of tax. Tax effects were immaterial.
9
EXHIBIT 99.1
CONDUENT INCORPORATED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| (in millions, except share data in thousands) | December 31, 2025 | December 31, 2024 | ||||||||||||
| Assets | ||||||||||||||
| Cash and cash equivalents | $ | 233 | $ | 366 | ||||||||||
| Accounts receivable, net | 500 | 493 | ||||||||||||
| Contract assets | 123 | 132 | ||||||||||||
| Other current assets | 213 | 261 | ||||||||||||
| Total current assets | 1,069 | 1,252 | ||||||||||||
| Land, buildings and equipment, net | 181 | 167 | ||||||||||||
| Operating lease right-of-use assets | 136 | 169 | ||||||||||||
| Deferred contract costs, net | 128 | 126 | ||||||||||||
| Goodwill | 617 | 609 | ||||||||||||
| Other long-term assets | 266 | 276 | ||||||||||||
| Total Assets | $ | 2,397 | $ | 2,599 | ||||||||||
| Liabilities and Equity | ||||||||||||||
| Current portion of long-term debt | $ | 22 | $ | 24 | ||||||||||
| Accounts payable | 142 | 157 | ||||||||||||
| Accrued compensation and benefits costs | 173 | 170 | ||||||||||||
| Contract liabilities | 74 | 103 | ||||||||||||
| Other current liabilities | 270 | 290 | ||||||||||||
| Total current liabilities | 681 | 744 | ||||||||||||
| Long-term debt | 665 | 615 | ||||||||||||
| Deferred taxes | 19 | 24 | ||||||||||||
| Operating lease liabilities | 102 | 138 | ||||||||||||
| Other long-term liabilities | 103 | 93 | ||||||||||||
| Total Liabilities | 1,570 | 1,614 | ||||||||||||
| Series A convertible preferred stock | 142 | 142 | ||||||||||||
| Common stock | 2 | 2 | ||||||||||||
| Treasury stock, at cost | (235) | (210) | ||||||||||||
| Additional paid-in capital | 3,968 | 3,952 | ||||||||||||
| Retained earnings (deficit) | (2,613) | (2,433) | ||||||||||||
| Accumulated other comprehensive loss | (437) | (472) | ||||||||||||
| Total Conduent Inc. Equity | 685 | 839 | ||||||||||||
| Noncontrolling Interest | — | 4 | ||||||||||||
| Total Equity | 685 | 843 | ||||||||||||
| Total Liabilities and Equity | $ | 2,397 | $ | 2,599 | ||||||||||
| Shares of common stock issued and outstanding | 154,709 | 161,829 | ||||||||||||
| Shares of series A convertible preferred stock issued and outstanding | 120 | 120 | ||||||||||||
| Shares of common stock held in treasury | 70,097 | 60,868 | ||||||||||||
10
EXHIBIT 99.1
CONDUENT INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Cash Flows from Operating Activities: | ||||||||||||||||||||||||||
| Net income (loss) | $ | (33) | $ | (12) | $ | (170) | $ | 426 | ||||||||||||||||||
| Adjustments required to reconcile net income (loss) to cash flows from operating activities: | ||||||||||||||||||||||||||
| Depreciation and amortization | 50 | 47 | 194 | 204 | ||||||||||||||||||||||
| Contract inducement amortization | 1 | 1 | 3 | 3 | ||||||||||||||||||||||
| Goodwill impairment | — | 28 | — | 28 | ||||||||||||||||||||||
| Deferred income taxes | (19) | (28) | (22) | (5) | ||||||||||||||||||||||
| Amortization of debt financing costs | — | — | 1 | 3 | ||||||||||||||||||||||
| Loss on extinguishment of debt | — | 2 | 1 | 8 | ||||||||||||||||||||||
| (Gain) loss on divestitures and sales of fixed assets, net | — | 3 | 2 | (724) | ||||||||||||||||||||||
| Stock-based compensation | 6 | 5 | 19 | 19 | ||||||||||||||||||||||
| Changes in operating assets and liabilities | 18 | 58 | (103) | (51) | ||||||||||||||||||||||
| Net change in income tax assets and liabilities | 16 | (63) | 2 | 39 | ||||||||||||||||||||||
| Net cash provided by (used in) operating activities | 39 | 41 | (73) | (50) | ||||||||||||||||||||||
| Cash Flows from Investing Activities: | ||||||||||||||||||||||||||
| Cost of additions to land, buildings and equipment | (15) | 11 | (59) | (28) | ||||||||||||||||||||||
| Cost of additions to internal use software | (7) | (5) | (22) | (28) | ||||||||||||||||||||||
| Proceeds from divestitures | — | 28 | 53 | 851 | ||||||||||||||||||||||
| Net cash provided by (used in) investing activities | (22) | 34 | (28) | 795 | ||||||||||||||||||||||
| Cash Flows from Financing Activities: | ||||||||||||||||||||||||||
| Proceeds from revolving credit facility | — | — | 259 | 80 | ||||||||||||||||||||||
| Proceeds from the issuance of debt, net | 1 | — | 5 | — | ||||||||||||||||||||||
| Payments of debt issuance costs | (1) | — | (4) | — | ||||||||||||||||||||||
| Payments of revolving credit facility | (25) | — | (150) | (80) | ||||||||||||||||||||||
| Payments of debt | (4) | (89) | (105) | (676) | ||||||||||||||||||||||
| Treasury stock purchases | (5) | — | (25) | (182) | ||||||||||||||||||||||
| Excise tax payment on treasury stock purchases | — | — | (2) | — | ||||||||||||||||||||||
| Taxes paid for settlement of stock-based compensation | (2) | (4) | (2) | (9) | ||||||||||||||||||||||
| Dividends paid on preferred stock | (3) | (3) | (10) | (10) | ||||||||||||||||||||||
| (Repurchase of) contribution from noncontrolling interest | — | — | (5) | — | ||||||||||||||||||||||
| Net cash provided by (used in) financing activities | (39) | (96) | (39) | (877) | ||||||||||||||||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 1 | (6) | 6 | (10) | ||||||||||||||||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | (21) | (27) | (134) | (142) | ||||||||||||||||||||||
| Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 264 | 404 | 377 | 519 | ||||||||||||||||||||||
Cash, Cash Equivalents and Restricted Cash at End of period(1) | $ | 243 | $ | 377 | $ | 243 | $ | 377 | ||||||||||||||||||
___________
(1)Includes $10 million and $11 million restricted cash as of December 31, 2025 and 2024, respectively, that were included in Other current assets on the respective Consolidated Balance Sheets.
11
EXHIBIT 99.1
Appendix
Definitions
New Business Annual Contract Value (ACV): (New Business TCV / contract term) multiplied by 12.
New Business Total Contract Value (TCV): Estimated total future revenues from contracts signed during the period related to new logo, new service line or expansion with existing customers.
TTM: Trailing twelve months.
PBT: Profit before tax.
Non-GAAP Financial Measures
We have reported our financial results in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP). In addition, we have discussed our financial results using non-GAAP measures.
We believe these non-GAAP measures allow investors to better understand the trends in our business and to better understand and compare our results. Accordingly, we believe it is necessary to adjust several reported amounts, determined in accordance with U.S. GAAP, to exclude the effects of certain items as well as their related tax effects. Management believes that these non-GAAP financial measures provide an additional means of analyzing the results of the current period against the corresponding prior period. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with U.S. GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable U.S. GAAP measures and should be read only in conjunction with our Consolidated Financial Statements prepared in accordance with U.S. GAAP. Our management regularly uses our non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions, and providing such non-GAAP financial measures to investors allows for a further level of transparency as to how management reviews and evaluates our business results and trends. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on certain of these non-GAAP measures.
Management cautions that amounts presented in accordance with Conduent's definition of non-GAAP financial measures may not be comparable to similar measures disclosed by other companies because not all companies calculate non-GAAP measures in the same manner.
A reconciliation of the following non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP are provided below.
These reconciliations also include the income tax effects for our non-GAAP performance measures in total, to the extent applicable. The income tax effects are calculated under the same accounting principles as applied to our reported pre-tax performance measures under Accounting Standards Codification 740, which employs an annual effective tax rate method. The noted income tax effect for our non-GAAP performance measures is effectively the difference in income taxes for reported and adjusted pre-tax income calculated under the annual effective tax rate method. The tax effect of the non-GAAP adjustments was calculated based upon evaluation of the statutory tax treatment and the applicable statutory tax rate in the jurisdictions in which such charges were incurred.
Adjusted Revenue, Adjusted Profit Before Tax, Adjusted Net Income (Loss), Adjusted Diluted Earnings per Share, Adjusted Weighted Average Common Shares Outstanding, and Adjusted Effective Tax Rate
We make adjustments to Revenue, Net Income (Loss) before Income Taxes for the following items, as applicable, to the particular financial measure, for the purpose of calculating Adjusted Revenue, Adjusted Profit Before Tax, Adjusted Net Income (Loss), Adjusted Diluted Earnings per Share, Adjusted Weighted Average Common Shares Outstanding, and Adjusted Effective Tax Rate:
12
EXHIBIT 99.1
•Amortization of acquired intangible assets. This is driven by acquisition activity, which can vary in size, nature and timing as compared to other companies within our industry and from period to period.
•Restructuring and related costs. This includes restructuring and asset impairment charges as well as costs associated with our strategic transformation program.
•Goodwill impairment. This represents goodwill impairment charges arising from annual or interim goodwill testing.
•(Gain) loss on divestitures and transaction costs, net. Represents (gain) loss on divested businesses and transaction costs.
•Litigation settlements (recoveries), net represents settlements or recoveries for various matters subject to litigation.
•Loss on extinguishment of debt. This represents write-off related debt issuance costs related to prepayments of debt.
•Direct response costs - cyber event. This represents costs related to investigating, remediating and responding to the January 2025 Cyber Event.
•Other charges (credits). This includes Other (income) expenses, net on the Consolidated Statements of Income (loss) and other adjustments.
•Divestitures. Revenue and Adjusted EBITDA of divested businesses are excluded.
The Company provides adjusted net income and adjusted EPS financial measures to assist our investors in evaluating our ongoing operating performance for the current reporting period and, where provided, over different reporting periods, by adjusting for certain items which may be recurring or non-recurring and which in our view do not necessarily reflect ongoing performance. We also internally use these measures to assess our operating performance, both absolutely and in comparison to other companies, and in evaluating or making selected compensation decisions.
Management believes that the adjusted effective tax rate, provided as supplemental information, facilitates a comparison by investors of our actual effective tax rate with an adjusted effective tax rate which reflects the impact of the items which are excluded in providing adjusted net income and certain other identified items, and may provide added insight into our underlying business results and how effective tax rates impact our ongoing business.
Adjusted Revenue, Adjusted Operating Income and Adjusted Operating Margin
We make adjustments to Revenue, Costs and Expenses and Operating Margin for the following items, as applicable, for the purpose of calculating Adjusted Revenue, Adjusted Operating Income and Adjusted Operating Margin:
•Amortization of acquired intangible assets.
•Restructuring and related costs.
•Interest expense. Interest expense includes interest on long-term debt and amortization of debt issuance costs.
•Goodwill impairment.
•(Gain) loss on divestitures and transaction costs, net.
•Litigation settlements (recoveries), net.
•Loss on extinguishment of debt.
•Direct response costs - cyber event.
•Other charges (credits).
•Divestitures.
We provide our investors with adjusted revenue, adjusted operating income and adjusted operating margin information, as supplemental information, because we believe it offers added insight, by itself and for comparability between periods, by adjusting for certain non-cash items as well as certain other identified items which we do not believe are indicative of our ongoing business, and may also provide added insight on trends in our ongoing business.
Adjusted EBITDA and EBITDA Margin
We use Adjusted EBITDA and Adjusted EBITDA Margin as an additional way of assessing certain aspects of our operations that, when viewed with the U.S. GAAP results and the accompanying reconciliations to corresponding U.S. GAAP financial measures, provide a more complete understanding of our on-going business. Adjusted EBITDA represents income (loss) before interest, income taxes, depreciation and amortization and contract inducement
13
EXHIBIT 99.1
amortization adjusted for the following items. Adjusted EBITDA Margin is Adjusted EBITDA divided by revenue or adjusted revenue, as applicable.
•Restructuring and related costs.
•Goodwill impairment.
•(Gain) loss on divestitures and transaction costs, net.
•Litigation settlements (recoveries), net.
•Loss on extinguishment of debt.
•Direct response costs - cyber event.
•Other charges (credits).
•Divestitures.
Adjusted EBITDA is not intended to represent cash flows from operations, operating income (loss) or net income (loss) as defined by U.S. GAAP as indicators of operating performance.
Free Cash Flow
Free Cash Flow is defined as cash flows from operating activities as reported on the consolidated statement of cash flows, less cost of additions to land, buildings and equipment, cost of additions to internal use software, and proceeds from sales of land, buildings and equipment, as applicable. We use the non-GAAP measure of Free Cash Flow as a criterion of liquidity. We use Free Cash Flow as a measure of liquidity to determine amounts we can reinvest in our core businesses, such as amounts available to make acquisitions and invest in land, buildings and equipment and internal use software, after required payments on debt. In order to provide a meaningful basis for comparison, we are providing information with respect to our Free Cash Flow reconciled to cash flow provided by operating activities, which we believe to be the most directly comparable measure under U.S. GAAP.
Adjusted Free Cash Flow
Adjusted Free Cash Flow is defined as Free Cash Flow from above plus adjustments for litigation insurance recoveries, transaction costs, taxes paid on gains from divestitures and litigation recoveries, proceeds from failed sale-leaseback transactions and certain other identified adjustments, as applicable. We use Adjusted Free Cash Flow, in addition to Free Cash Flow, to provide supplemental information to our investors concerning our ability to generate cash from our ongoing operating activities; by excluding these items, we believe we provide useful additional information to our investors to help them further understand our ability to generate cash period-over-period as well as added information on comparability to our competitors. Such as with Free Cash Flow information, as so adjusted, it is specifically not intended to provide amounts available for discretionary spending. We have added certain adjustments to account for items which we do not believe reflect our core business or operating performance, and we computed all periods with such adjusted costs.
Revenue at Constant Currency
To better understand trends in our business, we believe that it is helpful to adjust revenue to exclude the impact of changes in the translation of foreign currencies into U.S. Dollars. We refer to this adjusted revenue as “constant currency.” Currency impact is determined as the difference between actual growth rates and constant currency growth rates. This currency impact is calculated by translating the current period activity in local currency using the comparable prior-year period's currency translation rate.
14
EXHIBIT 99.1
Non-GAAP Reconciliations: Adjusted Revenue, Revenue at Constant Currency, Adjusted Net Income (Loss), Adjusted Effective Tax, Adjusted Operating Income (Loss) and Adjusted EBITDA were as follows (see footnotes on last page of Non-GAAP reconciliations):
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| ADJUSTED REVENUE | ||||||||||||||||||||||||||
| Revenue | $ | 770 | $ | 800 | $ | 3,042 | $ | 3,356 | ||||||||||||||||||
| Adjustment: | ||||||||||||||||||||||||||
Divestitures(1) | — | — | — | (180) | ||||||||||||||||||||||
| Adjusted Revenue | 770 | 800 | 3,042 | 3,176 | ||||||||||||||||||||||
| Foreign currency impact | (8) | 2 | (10) | 1 | ||||||||||||||||||||||
| Revenue at Constant Currency | $ | 762 | $ | 802 | $ | 3,032 | $ | 3,177 | ||||||||||||||||||
| ADJUSTED NET INCOME (LOSS) - from Net Income (loss) | ||||||||||||||||||||||||||
| Net Income (Loss) From Continuing Operations | $ | (33) | $ | (12) | $ | (170) | $ | 426 | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
Amortization of acquired intangible assets(2) | — | 1 | 2 | 5 | ||||||||||||||||||||||
| Restructuring and related costs | 11 | 25 | 35 | 46 | ||||||||||||||||||||||
| Goodwill impairment | — | 28 | — | 28 | ||||||||||||||||||||||
| Loss on extinguishment of debt | — | 2 | 1 | 8 | ||||||||||||||||||||||
| (Gain) loss on divestitures and transaction costs, net | 3 | — | 11 | (696) | ||||||||||||||||||||||
| Litigation settlements (recoveries), net | (3) | 3 | (1) | 9 | ||||||||||||||||||||||
| Direct response costs - cyber event | — | — | 25 | — | ||||||||||||||||||||||
| Other charges (credits) | 4 | (5) | 8 | (9) | ||||||||||||||||||||||
Total Non-GAAP Adjustments | 15 | 54 | 81 | (609) | ||||||||||||||||||||||
Income tax adjustments(3) | 6 | (63) | 30 | 100 | ||||||||||||||||||||||
| Adjusted Net Income (Loss) Before Adjustment for Divestitures | (12) | (21) | (59) | (83) | ||||||||||||||||||||||
Divestitures(1) | — | — | — | (35) | ||||||||||||||||||||||
| Adjusted Net Income (Loss) | $ | (12) | $ | (21) | $ | (59) | $ | (118) | ||||||||||||||||||
| ADJUSTED NET INCOME (Loss) – from Income (loss) before income tax | ||||||||||||||||||||||||||
| Income (Loss) Before Income Taxes | $ | (28) | $ | (82) | $ | (160) | $ | 504 | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
Total Non-GAAP Adjustments | 15 | 54 | 81 | (609) | ||||||||||||||||||||||
| Adjusted PBT Before Adjustment for Divestitures | (13) | (28) | (79) | (105) | ||||||||||||||||||||||
Divestitures(1) | — | — | — | (35) | ||||||||||||||||||||||
| Adjusted PBT | $ | (13) | $ | (28) | $ | (79) | $ | (140) | ||||||||||||||||||
| Adjusted PBT Before Adjustment for Divestitures | (13) | (28) | (79) | (105) | ||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
| Income tax expense (benefit) | $ | 5 | $ | (70) | $ | 10 | $ | 78 | ||||||||||||||||||
Income tax adjustments(3) | (6) | 63 | (30) | (100) | ||||||||||||||||||||||
| Adjusted Income Tax Expense (Benefit) | (1) | (7) | (20) | (22) | ||||||||||||||||||||||
| Adjusted Net Income (Loss) Before Adjustment for Divestitures | (12) | (21) | (59) | (83) | ||||||||||||||||||||||
Divestitures(1) | — | — | — | (35) | ||||||||||||||||||||||
| Adjusted Net Income (Loss) | $ | (12) | $ | (21) | $ | (59) | $ | (118) | ||||||||||||||||||
15
EXHIBIT 99.1
| CONTINUED | Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| ADJUSTED OPERATING INCOME (LOSS) | ||||||||||||||||||||||||||
| Income (Loss) Before Income Taxes | $ | (28) | $ | (82) | $ | (160) | $ | 504 | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
Total non-GAAP adjustments | 15 | 54 | 81 | (609) | ||||||||||||||||||||||
| Interest expense | 12 | 13 | 48 | 75 | ||||||||||||||||||||||
| Adjusted Operating Income (Loss) Before Adjustment for Divestitures | (1) | (15) | (31) | (30) | ||||||||||||||||||||||
Divestitures(1) | — | — | — | (35) | ||||||||||||||||||||||
| Adjusted Operating Income (Loss) | $ | (1) | $ | (15) | $ | (31) | $ | (65) | ||||||||||||||||||
| ADJUSTED EBITDA | ||||||||||||||||||||||||||
| Net Income (Loss) From Continuing Operations | $ | (33) | $ | (12) | $ | (170) | $ | 426 | ||||||||||||||||||
| Income tax expense (benefit) | 5 | (70) | 10 | 78 | ||||||||||||||||||||||
| Depreciation and amortization | 50 | 47 | 194 | 204 | ||||||||||||||||||||||
| Contract inducement amortization | 1 | 1 | 3 | 3 | ||||||||||||||||||||||
| Interest expense | 12 | 13 | 48 | 75 | ||||||||||||||||||||||
| EBITDA Before Adjustment for Divestitures | 35 | (21) | 85 | 786 | ||||||||||||||||||||||
Divestitures(1) | — | — | — | (35) | ||||||||||||||||||||||
Divestitures depreciation and amortization(1) | — | — | — | (13) | ||||||||||||||||||||||
| EBITDA | 35 | (21) | 85 | 738 | ||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
| Restructuring and related costs | 11 | 25 | 35 | 46 | ||||||||||||||||||||||
| Goodwill impairment | — | 28 | — | 28 | ||||||||||||||||||||||
| (Gain) loss on divestitures and transaction costs, net | 3 | — | 11 | (696) | ||||||||||||||||||||||
| Litigation settlements (recoveries), net | (3) | 3 | (1) | 9 | ||||||||||||||||||||||
| Loss on extinguishment of debt | — | 2 | 1 | 8 | ||||||||||||||||||||||
| Direct response costs - cyber event | — | — | 25 | — | ||||||||||||||||||||||
| Other charges (credits) | 4 | (5) | 8 | (9) | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 50 | $ | 32 | $ | 164 | $ | 124 | ||||||||||||||||||
16
EXHIBIT 99.1
Non-GAAP Reconciliations: Adjusted Weighted Average Shares Outstanding, Adjusted Diluted EPS, Adjusted Effective Tax Rate, Adjusted Operating Margin and Adjusted EBITDA Margin were as follows:
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| (Amounts are in whole dollars, shares are in thousands and margins and rates are in %) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
ADJUSTED DILUTED EPS(4) | ||||||||||||||||||||||||||
| Weighted Average Common Shares Outstanding | 153,803 | 160,374 | 158,422 | 182,513 | ||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
| Restricted stock and performance units / shares | — | — | — | — | ||||||||||||||||||||||
| Adjusted Weighted Average Common Shares Outstanding | 153,803 | 160,374 | 158,422 | 182,513 | ||||||||||||||||||||||
| Diluted EPS from Continuing Operations | $ | (0.23) | $ | (0.09) | $ | (1.14) | $ | 2.23 | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
Total non-GAAP adjustments | 0.10 | 0.33 | 0.52 | (3.29) | ||||||||||||||||||||||
Income tax adjustments(3) | 0.04 | (0.39) | 0.19 | 0.55 | ||||||||||||||||||||||
| Adjusted Diluted EPS | $ | (0.09) | $ | (0.15) | $ | (0.43) | $ | (0.51) | ||||||||||||||||||
| ADJUSTED EFFECTIVE TAX RATE | ||||||||||||||||||||||||||
| Effective tax rate | (18.7) | % | 85.4 | % | (6.1) | % | 15.5 | % | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
Total non-GAAP adjustments | 26.0 | % | (60.4) | % | 31.5 | % | 5.7 | % | ||||||||||||||||||
Adjusted Effective Tax Rate(3) | 7.3 | % | 25.0 | % | 25.4 | % | 21.2 | % | ||||||||||||||||||
| ADJUSTED OPERATING MARGIN | ||||||||||||||||||||||||||
| Income (Loss) Before Income Taxes Margin | (3.6) | % | (10.3) | % | (5.3) | % | 15.0 | % | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
| Total non-GAAP adjustments | 1.9 | % | 6.8 | % | 2.7 | % | (18.1) | % | ||||||||||||||||||
| Interest expense | 1.6 | % | 1.6 | % | 1.6 | % | 2.2 | % | ||||||||||||||||||
| Margin for Adjusted Operating Income Before Adjustment for Divestitures | (0.1) | % | (1.9) | % | (1.0) | % | (0.9) | % | ||||||||||||||||||
Divestitures(1) | — | % | — | % | — | % | (1.1) | % | ||||||||||||||||||
| Margin for Adjusted Operating Income | (0.1) | % | (1.9) | % | (1.0) | % | (2.0) | % | ||||||||||||||||||
| ADJUSTED EBITDA MARGIN | ||||||||||||||||||||||||||
| EBITDA Margin Before Adjustment for Divestitures | 4.5 | % | (2.6) | % | 2.8 | % | 23.4 | % | ||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
Divestitures(1) | — | % | — | % | — | % | (0.2) | % | ||||||||||||||||||
| EBITDA Margin | 4.5 | % | (2.6) | % | 2.8 | % | 23.2 | % | ||||||||||||||||||
| Total non-GAAP adjustments | 2.0 | % | 6.6 | % | 2.6 | % | (18.3) | % | ||||||||||||||||||
Divestitures(1) | — | % | — | % | — | % | 0.2 | % | ||||||||||||||||||
| Adjusted EBITDA Margin Before Adjustment for Divestitures | 6.5 | % | 4.0 | % | 5.4 | % | 5.1 | % | ||||||||||||||||||
Divestitures(1) | — | % | — | % | — | % | (1.2) | % | ||||||||||||||||||
| Adjusted EBITDA Margin | 6.5 | % | 4.0 | % | 5.4 | % | 3.9 | % | ||||||||||||||||||
17
EXHIBIT 99.1
Free Cash Flow and Adjusted Free Cash Flow Reconciliation:
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Operating Cash Flow | $ | 39 | $ | 41 | $ | (73) | $ | (50) | ||||||||||||||||||
| Cost of additions to land, buildings and equipment | (15) | 11 | (59) | (28) | ||||||||||||||||||||||
| Cost of additions to internal use software | (7) | (5) | (22) | (28) | ||||||||||||||||||||||
| Free Cash Flow | $ | 17 | $ | 47 | $ | (154) | $ | (106) | ||||||||||||||||||
| Free Cash Flow | $ | 17 | $ | 47 | $ | (154) | $ | (106) | ||||||||||||||||||
| Transaction costs | 5 | 2 | 14 | 20 | ||||||||||||||||||||||
| Direct response costs - cyber event payments | 8 | — | 17 | — | ||||||||||||||||||||||
| Vendor finance lease payments | (3) | (3) | (13) | (17) | ||||||||||||||||||||||
| Proceeds from failed sale-leaseback transactions | — | — | 5 | — | ||||||||||||||||||||||
| Tax payment related to divestitures and litigation recoveries | 1 | 16 | 1 | 44 | ||||||||||||||||||||||
| Adjusted Free Cash Flow | $ | 28 | $ | 62 | $ | (130) | $ | (59) | ||||||||||||||||||
__________
(1)Adjusted for the full impact from revenue and income/loss from divestitures for all periods presented.
(2)Included in Depreciation and amortization on the Consolidated Statements of Income (Loss).
(3)The tax impact of Adjusted Pre-tax income (loss) was calculated under the same accounting principles applied to the 'As Reported' pre-tax income (loss), which employs an annual effective tax rate method to the results and without regard to the Total Non-GAAP adjustments.
(4)Average shares for the 2025 and 2024 calculation of adjusted EPS excludes 5.4 million shares associated with our Series A convertible preferred stock and includes the impact of preferred stock dividends of approximately $3 million each quarter.
18
February 12, 2026 Conduent Q4 and Full Year 2025 Financial Results
2 Forward-Looking Statements This document, any exhibits or attachments to this document, and other public statements we make may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “estimate,” “expect,” expectations," "in front of us," "plan," “intend,” “will,” “aim,” “should,” “could,” “forecast,” “target,” “may,” "continue to," "looking to continue," "endeavor," "if,” “growing,” “projected,” “potential,” “likely,” "see", "ahead", "further," "going forward," "on the horizon," "as we progress," "going to," "path from here forward," "think," "path to deliver," "from here," "on track," "remain" and similar expressions (including the negative and plural forms of such words and phrases), as they relate to us, are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward looking. All statements other than statements of historical fact included in this presentation or any attachment to this presentation are forward-looking statements, including, but not limited to, statements regarding our financial results, condition and outlook; changes in our operating results; and general market and economic conditions. These statements reflect our current views with respect to future events and are subject to certain risks, uncertainties and assumptions many of which are outside of our control, that could cause actual results to differ materially from those expected or implied by such forward-looking statements contained in this document, any exhibits to this document and other public statements we make. Important factors and uncertainties that could cause our actual results to differ materially from those in our forward-looking statements include, but are not limited to: government appropriations and termination rights contained in our government contracts, the competitiveness of the markets in which we operate and our ability to renew commercial and government contracts, including contracts awarded through competitive bidding processes; our ability to recover capital and other investments in connection with our contracts; the impact of geopolitical events and geopolitical tensions (such as the war in the Ukraine and conflict in the Middle East), macroeconomic conditions, natural disasters and other factors in a particular country or region on our workforce, customers and vendors; our reliance on third-party providers; our ability to deliver on our contractual obligations properly and on time; changes in continued interest in outsourced business process services; the adverse effect of claims of infringement of third-party intellectual property rights; our ability to estimate the scope of work or the costs of performance in our contracts; the loss of key senior management and our ability to attract and retain necessary technical personnel and qualified subcontractors; our failure to develop new service offerings and protect our intellectual property rights; our ability to modernize our information technology infrastructure and consolidate data centers; expectations relating to environmental, social and governance considerations; utilization of our stock repurchase program; the effects related to our use of artificial intelligence on our business; the failure to comply with laws relating to individually identifiable information and personal health information; the failure to comply with laws relating to processing certain financial transactions, including payment card transactions and debit or credit card transactions; breaches of our information systems or security systems or any service interruptions; risks related to hacking or other cybersecurity threats to our data systems, information systems and network infrastructure and other service interruptions, including relating to the previously disclosed cyber event that took place in January 2025 (the “January 2025 Cyber Event”), including Conduent’s investigation of such incident and mitigation and remediation efforts, the nature and extent of such incident, the potential disruption to our business or operations, the potential impact on Conduent’s reputation, and Conduent’s assessments of the likely financial and operational impacts of such incident; our ability to comply with data security standards; developments in various contingent liabilities that are not reflected on our balance sheet, including those arising as a result of being involved in a variety of claims, lawsuits, investigations and proceedings; risks related to divestiture transactions, including but not limited to the Company’s ability to realize the benefits anticipated from such transactions, and unexpected costs or liabilities in connection with such transactions, the impact of potential goodwill and other asset impairments on our results of operations; our significant indebtedness and the terms of such indebtedness; our failure to obtain or maintain a satisfactory credit rating and financial performance; our ability to obtain adequate pricing for our services and to improve our cost structure; our ability to collect our receivables, including those for unbilled services; a decline in revenues from, or a loss of, or a reduction in business from or failure of significant clients; fluctuations in our non-recurring revenue; increases in the cost of voice and data services or significant interruptions in such services; our ability to receive dividends or other payments from our subsidiaries; and other factors that are set forth in the “Risk Factors” section, the “Legal Proceedings” section, the “Management's Discussion and Analysis of Financial Condition and Results of Operations” section and other sections in our 2025 Annual Report on Form 10-K, as well as in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with or furnished to the Securities and Exchange Commission. Any forward-looking statements made by us in this release speak only as of the date on which they are made. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether because of new information, subsequent events or otherwise, except as required by law. Cautionary Statements
3 Non-GAAP Financial Measures We have reported our financial results in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP). In addition, we have discussed our financial results using non-GAAP measures. We believe these non-GAAP measures allow investors to better understand the trends in our business and to better understand and compare our results. Accordingly, we believe it is necessary to adjust several reported amounts, determined in accordance with U.S. GAAP, to exclude the effects of certain items as well as their related tax effects. Management believes that these non-GAAP financial measures provide an additional means of analyzing the results of the current period against the corresponding prior period. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, our reported results prepared in accordance with U.S. GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable U.S. GAAP measures and should be read only in conjunction with our Consolidated Financial Statements prepared in accordance with U.S. GAAP. Our management regularly uses our non-GAAP measures internally to understand, manage and evaluate our business and make operating decisions. Providing such non-GAAP financial measures to investors allows for a further level of transparency as to how management reviews and evaluates our business results and trends. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on certain of these non-GAAP measures. Refer to the "Non-GAAP Financial Measures" and "Non-GAAP Reconciliations" sections in this document for a discussion of these non-GAAP measures and their reconciliation to the reported U.S. GAAP measures. Cautionary Statements
4 Q4 & Full Year 2025 Results and CEO Priorities (1) Refer to Appendix for complete Non-GAAP reconciliations of Adjusted Revenue, Adjusted EBITDA and Adjusted EBITDA Margin. (2) Full definition in the Appendix. Q4 and Full Year Results / Metrics CEO Priorities • Adj. Revenue(1): Q4 $770M / FY $3,042M • Adj. EBITDA(1): Q4 $50M / FY $164M • Adj. EBITDA Margin(1): Q4 6.5% / FY 5.4% • New Business Signings ACV(2): Q4 $152M / FY $517M • Increase speed and accountability: Accelerate decision making and operational excellence across a global enterprise that is focused on being client centric. • Enforce financial discipline: Drive all decisions through the lens of their impact to revenue growth, margin expansion, and free cash flow. • Reduce cost structure: Leaner organization with clear line of sight for business leaders. We will reduce layers and empower leaders with full P&L ownership. • Optimize the portfolio: Execute a fix, sell, or grow strategy to improve performance, reduce debt, and invest in growth. • Convert pipeline to growth: Improve pipeline execution to deliver consistent revenue growth.
5 Key Sales Metrics New Business ACV(1) Full Year New Business ACV(1) by Segment (1) Full definition in the Appendix. $318 $269 $969 $1,118 Q4'24 Q4'25 FY'24 FY'25 $0M $500M $1,000M $1,500M New Business TCV(1) $73 $54 $228 $237 Q4'24 Q4'25 FY'24 FY'25 $0M $100M $200M $300M $213M $152M $152M Commercial Government Transportation $137 $152 $485 $517 Q4'24 Q4'25 FY'24 FY'25 $0M $250M $500M $750M New Business ARR(1) Trailing Four Quarters ACV(1) Sales Trend $485 $498 $502 $502 $517 $251 $263 $240 $223 $213 $101 $101 $122 $126 $152 $133 $134 $140 $153 $152 Conduent Total Commercial Government Transportation Q4' 24 Q1' 25 Q2' 25 Q3' 25 Q4' 25 $0 $200 $400 $600
6 Key Sales Metrics TCV Signings (incl. ARR(1) + NRR(1)) $361 $243 $469 $213 $368 $318 $280 $323 $246 $269 Renewal NB Q4' 24 Q1' 25 Q2' 25 Q3' 25 Q4' 25 $0M $500M $1,000M New Business (ARR(1) + NRR(1) Breakdown) $73 $53 $66 $64 $54 $79 $59 $111 $56 $101 NB ARR NB NRR Q4' 24 Q1' 25 Q2' 25 Q3' 25 Q4' 25 $0M $100M $200M $137 $109 $145 $111 $152 Q4' 24 Q1' 25 Q2' 25 Q3' 25 Q4' 25 $0M $50M $100M $150M $200M New Business ACV(1) Signings (1) Full definition in the Appendix. New Business ARR Avg. Contract Length(1) 3.3yrs 4.2yrs 3.2yrs 3.0yrs 3.1yrs Q4' 24 Q1' 25 Q2' 25 Q3' 25 Q4' 25 —yrs 2.5yrs 5.0yrs
7 $3,176M $3,042M 2024 2025 $0M $1,000M $2,000M $3,000M $4,000M Full Year 2025 P&L Metrics (4.2)% Y/Y (4.5)% in CC(2) Adj. Revenue(1) $124M / 3.9% $164M / 5.4% 2024 2025 $0M $60M $120M $180M Adj. EBITDA(1) / Adj. EBITDA Margin(1) 32.3% Y/Y • Adj. Revenue(1): Decline primarily driven by lower volumes and lost business, partially offset by new business ramp, and higher equipment sales and a contract amendment in the Transportation segment. • Adj. EBITDA(1) and Adj. EBITDA Margin(1): Increase primarily driven by cost optimization, a recovery of legal costs related to the State of Texas matter that settled in 2019, high margin NRR in the Commercial segment and higher revenues in the Transportation segment. (6.0)% (8.5)% (2.6)% (1.8)% (3.8)% Q4' 24 Q1' 25 Q2' 25 Q3' 25 Q4' 25 Adj. Revenue(1) Trend (Y/Y Compare) (1) Refer to Appendix for complete Non-GAAP reconciliations of Adjusted Revenue, Adjusted EBITDA and Adjusted EBITDA Margin. (2) Refer to definition in Appendix.
8 $154M $221M $18M $(229)M $164M Commercial Government Transportation Unallocated Costs Adjusted EBITDA Full Year 2025 P&L by Segment (1) Refer to Appendix for complete Non-GAAP reconciliations of Adjusted Revenue, Adjusted EBITDA and Adjusted EBITDA Margin. Commercial, $1,511M Government, $922M Transportation, $609M 3.9% Y/Y (6.3)% Y/Y (5.9)% Y/Y 5.2% Y/Y (8.9)% Y/Y Adj. Revenue(1) Adj. EBITDA(1) Contributions 32.3% Y/Y 10.2% Y/Y • Commercial: Decrease primarily driven by contract losses and lower volumes, partially offset by new business ramps and multi- year licensing agreements with existing customers. • Government: Decrease primarily driven by contract losses, lower volumes and the impacts from a U.S. federal government shutdown during Q4, partially offset by new business. • Transportation: Increase driven by a contract amendment with a customer, and higher equipment sales, partially offset by lower volume across certain smaller projects. • Commercial: Decrease primarily driven by revenue decline, partially offset by cost efficiencies and the benefit from a non-recurring revenue item in the fourth quarter; margin of 10.2%, down (30) bps Y/Y. • Government: Increase primarily driven by cost optimization as well as an AI implementation that lowered fraud costs; margin of 24.0%, up 270 bps Y/Y. • Transportation: Increase primarily driven by revenue growth and lower cost associated with discrete expenses in 2024; margin of 3.0%, up 300 bps Y/Y. • Unallocated Costs: Improvement primarily due to the recovery of legal costs related to the State of Texas settlement and cost efficiencies, offset by higher employee healthcare claims. n/m
9 Q4 and Full Year 2025 Cash Flow and Balance Sheet Q4 2025 Cash(5) Balance Changes Balance Sheet For the complete set of footnotes associated with this slide, please refer to the last page of the Appendix. ($ in millions) 12/31/2024 12/31/2025 Total Cash(5) $377 $243 Total Debt(6) 608 629 Current Portion of Debt(10) 24 22 Term Loan A(7) due 2026 88 — Revolving Credit Facility(8) — 109 Senior Notes due 2029 520 520 Finance leases and Other loans 38 62 Net adjusted leverage ratio(4) 1.6x 2.8x Senior Notes Maturity(9) $264M $28M $(49)M $243M Cash Beginning of Period Adjusted Free Cash Flow Financing and Other Activity Cash End of Period • Adj. Free Cash Flow(1): Q4 $28M / FY $(130)M • Capex(2) as % of revenue: Q4 4.2%(3)/ FY 3.4% • Net adjusted leverage ratio(4): 2.8x • $243M of cash(5) at end of Q4 2025 • $223M(8) Unused Revolving Credit Facility $520M Senior Notes 2025 2026 2027 2028 2029 (1) $ --M $ --M$ --M $ --M
Appendix
11 Government (16.3)% (16.3)% (2.9)% (6.7)% 1.8% Q4' 24 Q1' 25 Q2' 25 Q3' 25 Q4' 25 Transportation 1.3% (7.6)% 7.1% 14.9% 1.9% Q4' 24 Q1' 25 Q2' 25 Q3' 25 Q4' 25 Commercial (2.1)% (4.1)% (5.9)% (4.7)% (8.9)% Q4' 24 Q1' 25 Q2' 25 Q3' 25 Q4' 25 Segment Adjusted Revenue(1) Trend (1) Refer to complete Non-GAAP reconciliations of Adjusted Revenue elsewhere in this Appendix.
12 Definitions New Business Total Contract Value (TCV): Estimated total future revenues from contracts signed during the period related to new logo, new service line or expansion with existing customers. New Business Non-Recurring Revenue (NRR): Metric measures the non-recurring revenue for any new business signing, includes: i. Signing value of any contract with term less than 12 months; ii. Signing value of project based revenue, not expected to continue long term. New Business Annual Recurring Revenue (ARR): Metric measures the revenue from recurring services provided to the client for any new business signing. ARR represents the recurring services provided to a customer with the opportunity for renewal at the end of the contract term. The calculation of ARR is (Total Contract Value less Non-Recurring Revenue) divided by the Contract Term. New Business Annual Contract Value (ACV): (New Business TCV / contract term) multiplied by 12. Renewal TCV Signings: Estimated total future revenues from contracts signed during the period related to renewals. Renewal Signings Annual Recurring Revenue (ARR): Metric measures the revenue from recurring services provided to the client for any renewal signing. ARR represents the recurring services provided to a customer with the opportunity for renewal at the end of the contract term. The calculation of ARR is: (Total Contract Value - Non-Recurring Revenue) / the Contract Term. Total New Business Pipeline (Cumulative Pipeline): Total new business ACV pipeline of deals at or beyond the qualified prospect stage.This extends past the next twelve-month period to include total pipeline, excluding the impact of divested business as required. Implied New Business Average Contract Length: (New business TCV – New business NRR) / New business ARR = Implied New Business Average Contract Length. TTM: Trailing twelve months. CC: Constant Currency as defined in "Non-GAAP Financial Measures"
13 Non-GAAP Financial Measures We have reported our financial results in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP). In addition, we have discussed our financial results using non-GAAP measures. We believe these non-GAAP measures allow investors to better understand the trends in our business and to better understand and compare our results. Accordingly, we believe it is necessary to adjust several reported amounts, determined in accordance with U.S. GAAP, to exclude the effects of certain items as well as their related tax effects. Management believes that these non-GAAP financial measures provide an additional means of analyzing the results of the current period against the corresponding prior period. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with U.S. GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable U.S. GAAP measures and should be read only in conjunction with our Consolidated Financial Statements prepared in accordance with U.S. GAAP. Our management regularly uses our non-GAAP financial measures internally to understand, manage and evaluate our business and make operating decisions. Providing such non-GAAP financial measures to investors allows for a further level of transparency as to how management reviews and evaluates our business results and trends. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Compensation of our executives is based in part on the performance of our business based on certain of these non-GAAP measures. Management cautions that amounts presented in accordance with Conduent's definition of non-GAAP financial measures may not be comparable to similar measures disclosed by other companies because not all companies calculate non-GAAP measures in the same manner. Reconciliations of the following non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP Reconciliations are provided below. These reconciliations also include the income tax effects for our non-GAAP performance measures in total, to the extent applicable. The income tax effects are calculated under the same accounting principles as applied to our reported pre-tax performance measures under ASC 740, which employs an annual effective tax rate method. The noted income tax effect for our non-GAAP performance measures is effectively the difference in income taxes for reported and adjusted pre-tax income calculated under the annual effective tax rate method. The tax effect of the non-GAAP adjustments was calculated based upon evaluation of the statutory tax treatment and the applicable statutory tax rate in the jurisdictions in which such charges were incurred. Adjusted Revenue, Adjusted Profit Before Tax. Adjusted Net Income (Loss), Adjusted Diluted Earnings per Share, Adjusted Weighted Average Common Shares Outstanding, and Adjusted Effective Tax Rate. We make adjustments to Revenue, Net Income (Loss) before Income Taxes for the following items, as applicable, to the particular financial measure, for the purpose of calculating Adjusted Revenue, Adjusted Net Income (Loss), Adjusted Profit Before Tax, Adjusted Diluted Earnings per Share, Adjusted Weighted Average Common Shares Outstanding, and Adjusted Effective Tax Rate: • Amortization of acquired intangible assets. This is driven by acquisition activity, which can vary in size, nature and timing as compared to other companies within our industry and from period to period. • Restructuring and related costs. This includes restructuring and asset impairment charges as well as costs associated with our strategic transformation program. • (Gain) loss on divestitures and transaction costs, net. Represents (gain) loss on divested businesses and transaction costs. • Goodwill Impairment. This represents goodwill impairment charges arising from annual or interim goodwill testing. • Loss on extinguishment of debt. This represents write-off related debt issuance costs related to prepayments of debt. • Litigation settlements (recoveries), net. Litigation settlements (recoveries), net represents provisions for various matters subject to litigation. • Direct response costs - cyber event. This represents costs related to investigating, remediating and responding to the January 2025 Cyber Event. • Other charges (credits). This includes Other (income) expenses, net on the Consolidated Statements of Income (loss) and other adjustments. • Divestitures. Revenue and Adjusted EBITDA of divested businesses are excluded. The Company provides adjusted net income and adjusted EPS financial measures to assist our investors in evaluating our ongoing operating performance for the current reporting period and, where provided, over different reporting periods, by adjusting for certain items which may be recurring or non-recurring and which in our view do not necessarily reflect ongoing performance. We also internally use these measures to assess our operating performance, both absolutely and in comparison to other companies, and in evaluating or making selected compensation decisions. Management believes that the adjusted effective tax rate, provided as supplemental information, facilitates a comparison by investors of our actual effective tax rate with an adjusted effective tax rate which reflects the impact of the items which are excluded in providing adjusted net income and certain other identified items, and may provide added insight into our underlying business results and how effective tax rates impact our ongoing business. Non-GAAP Financial Measures
14 Adjusted Revenue, Adjusted Operating Income and Adjusted Operating Margin. We make adjustments to Revenue, Costs and Expenses and Operating Margin for the following items, as applicable,for the purpose of calculating Adjusted Revenue, Adjusted Operating Income and Adjusted Operating Margin: • Amortization of acquired intangible assets. • Restructuring and related costs. • Interest expense. Interest expense includes interest on long-term debt and amortization of debt issuance costs. • Goodwill impairment. • (Gain) loss on divestitures and transaction costs, net. • Litigation settlements (recoveries), net. • Loss on extinguishment of debt. • Direct response costs - cyber event. • Other charges (credits). • Divestitures. We provide our investors with adjusted revenue, adjusted operating income and adjusted operating margin information, as supplemental information, because we believe it offers added insight, by itself and for comparability between periods, by adjusting for certain non-cash items as well as certain other identified items which we do not believe are indicative of our ongoing business, and may also provide added insight on trends in our ongoing business. Non-GAAP Financial Measures
15 Adjusted EBITDA and EBITDA Margin We use Adjusted EBITDA and Adjusted EBITDA Margin as an additional way of assessing certain aspects of our operations that, when viewed with the U.S. GAAP results and the accompanying reconciliations to corresponding U.S. GAAP financial measures, provide a more complete understanding of our on-going business. Adjusted EBITDA represents income (loss) before interest, income taxes, depreciation and amortization and contract inducement amortization adjusted for the following items. Adjusted EBITDA Margin is Adjusted EBITDA divided by revenue or adjusted revenue, as applicable: • Restructuring and related costs. • Goodwill impairment. • (Gain) loss on divestitures and transaction costs, net. • Litigation settlements (recoveries), net. • Loss on extinguishment of debt. • Direct response costs - cyber event. • Other charges (credits). • Divestitures. Adjusted EBITDA is not intended to represent cash flows from operations, operating income (loss) or net income (loss) as defined by U.S. GAAP as indicators of operating performance. Non-GAAP Financial Measures
16 Free Cash Flow Free Cash Flow is defined as cash flows from operating activities as reported on the consolidated statement of cash flows, less cost of additions to land, buildings and equipment, cost of additions to internal use software, and proceeds from sales of land, buildings and equipment, as applicable. We use the non-GAAP measure of Free Cash Flow as a criterion of liquidity. We use Free Cash Flow as a measure of liquidity to determine amounts we can reinvest in our core businesses, such as amounts available to make acquisitions and invest in land, buildings and equipment and internal use software, after required payments on debt. In order to provide a meaningful basis for comparison, we are providing information with respect to our Free Cash Flow reconciled to cash flow provided by operating activities, which we believe to be the most directly comparable measure under U.S. GAAP. Adjusted Free Cash Flow Adjusted Free Cash Flow is defined as Free Cash Flow from above plus adjustments for litigation insurance recoveries, transaction costs, taxes paid on gains from divestitures and litigation recoveries, proceeds from failed sale-leaseback transactions and certain other identified adjustments, as applicable. We use Adjusted Free Cash Flow, in addition to Free Cash Flow, to provide supplemental information to our investors concerning our ability to generate cash from our ongoing operating activities; by excluding these items, we believe we provide useful additional information to our investors to help them further understand our ability to generate cash period-over-period as well as added information on comparability to our competitors. Such as with Free Cash Flow information, as so adjusted, it is specifically not intended to provide amounts available for discretionary spending. We have added certain adjustments to account for items which we do not believe reflect our core business or operating performance, and we computed all periods with such adjusted costs. Revenue at Constant Currency To better understand trends in our business, we believe that it is helpful to adjust revenue to exclude the impact of changes in the translation of foreign currencies into U.S. Dollars. We refer to this adjusted revenue as “constant currency.” Currency impact is determined as the difference between actual growth rates and constant currency growth rates. This currency impact is calculated by translating the current period activity in local currency using the comparable prior-year period's currency translation rate. Non-GAAP Financial Measures
17 Non-GAAP Reconciliations (in millions) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 FY 2025 FY 2024 REVENUE Revenue $ 770 $ 767 $ 754 $ 751 $ 800 $ 3,042 $ 3,356 Adjustment: Divestitures(1) — — — — — — (180) Adjusted Revenue 770 767 754 751 800 3,042 3,176 Foreign currency impact (8) (5) (1) 4 2 (10) 1 Revenue at Constant Currency $ 762 $ 762 $ 753 $ 755 $ 802 $ 3,032 $ 3,177 ADJUSTED NET INCOME (LOSS) - from Net Income (loss) Income (Loss) From Continuing Operations $ (33) $ (46) $ (40) $ (51) $ (12) $ (170) $ 426 Adjustments: Amortization of acquired intangible assets(2) — 1 1 — 1 2 5 Restructuring and related costs 11 12 8 4 25 35 46 Loss on extinguishment of debt — 1 — — 2 1 8 Goodwill impairment — — — — 28 — 28 (Gain) loss on divestitures and transaction costs, net 3 1 4 3 — 11 (696) Litigation settlements (recoveries), net (3) — — 2 3 (1) 9 Direct response costs - cyber event — — — 25 — 25 — Other charges (credits) 4 3 2 (1) (5) 8 (9) Total Non-GAAP Adjustments 15 18 15 33 54 81 (609) Income tax adjustments(3) 6 17 7 — (63) 30 100 Adjusted Net Income (Loss) Before Adjustment for Divestitures (12) (11) (18) (18) (21) (59) (83) Divestitures(1) $ — $ — $ — $ — $ — $ — $ (35) Adjusted Net Income (Loss) $ (12) $ (11) $ (18) $ (18) $ (21) $ (59) $ (118) Adjusted Revenue, Revenue at Constant Currency, Adjusted Net Income (Loss), Adjusted Effective Tax Rate, Adjusted Operating Income (Loss) and Adjusted EBITDA (see footnotes on last page of Non-GAAP reconciliations)
18 CONTINUED (in millions) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 FY 2025 FY 2024 ADJUSTED NET INCOME (Loss) – from Income (loss) before income tax Income (Loss) Before Income Taxes $ (28) $ (38) $ (38) $ (56) $ (82) $ (160) $ 504 Adjustment: Total Non-GAAP Adjustments 15 18 15 33 54 81 (609) Adjusted PBT Before Adjustment for Divestitures (13) (20) (23) (23) (28) (79) (105) Divestitures(1) — — — — — — (35) Adjusted PBT $ (13) $ (20) $ (23) $ (23) $ (28) $ (79) $ (140) Income tax expense (benefit) $ 5 $ 8 $ 2 $ (5) $ (70) $ 10 $ 78 Income tax adjustments(3) (6) (17) (7) — 63 (30) (100) Adjusted Income Tax Expense (Benefit) (1) (9) (5) (5) (7) (20) (22) Adjusted Net Income (Loss) Before Adjustment for Divestitures (12) (11) (18) (18) (21) (59) (83) Divestitures(1) — — — — — — (35) Adjusted Net Income (Loss) $ (12) $ (11) $ (18) $ (18) $ (21) $ (59) $ (118) ADJUSTED OPERATING INCOME (LOSS) Income (Loss) Before Income Taxes $ (28) $ (38) $ (38) $ (56) $ (82) $ (160) $ 504 Adjustment: Total non-GAAP adjustments 15 18 15 33 54 81 (609) Interest expense 12 12 12 12 13 48 75 Adjusted Operating Income (Loss) Before Adjustment for Divestitures (1) (8) (11) (11) (15) (31) (30) Divestitures(1) — — — — — — (35) Adjusted Operating Income (Loss) $ (1) $ (8) $ (11) $ (11) $ (15) $ (31) $ (65)
19 (in millions) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 FY 2025 FY 2024 ADJUSTED EBITDA Net Income (Loss) $ (33) $ (46) $ (40) $ (51) $ (12) $ (170) $ 426 Income tax expense (benefit) 5 8 2 (5) (70) 10 78 Depreciation and amortization 50 48 48 48 47 194 204 Contract inducement amortization 1 1 1 — 1 3 3 Interest expense 12 12 12 12 13 48 75 EBITDA Before Adjustment for Divestitures 35 23 23 4 (21) 85 786 Divestitures(1) — — — — — — (35) Divestitures depreciation and amortization(1) — — — — — — (13) EBITDA 35 23 23 4 (21) 85 738 Adjustments: Restructuring and related costs 11 12 8 4 25 35 46 Loss on extinguishment of debt — 1 — — 2 1 8 Goodwill impairment — — — — 28 — 28 (Gain) loss on divestitures and transaction costs, net 3 1 4 3 — 11 (696) Litigation settlements (recoveries), net (3) — — 2 3 (1) 9 Direct response costs - cyber event — — — 25 — 25 — Other charges (credits) 4 3 2 (1) (5) 8 (9) Adjusted EBITDA $ 50 $ 40 $ 37 $ 37 $ 32 $ 164 $ 124 CONTINUED
20 CONTINUED (Amounts are in whole dollars, shares are in thousands and margins are in %) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 FY 2025 FY 2024 ADJUSTED DILUTED EPS(4) Weighted Average Common Shares Outstanding 153,803 157,004 161,162 161,830 160,374 158,422 182,513 Adjustments: Restricted stock and performance units / shares — — — — — — — Adjusted Weighted Average Common Shares Outstanding 153,803 157,004 161,162 161,830 160,374 158,422 182,513 Diluted EPS from Continuing Operations $ (0.23) $ (0.30) $ (0.26) $ (0.33) $ (0.09) $ (1.14) $ 2.23 Adjustments: Total non-GAAP adjustments 0.10 0.10 0.09 0.20 0.33 0.52 (3.29) Income tax adjustments(3) 0.04 0.11 0.04 — (0.39) 0.19 0.55 Adjusted Diluted EPS $ (0.09) $ (0.09) $ (0.13) $ (0.13) $ (0.15) $ (0.43) $ (0.51) ADJUSTED EFFECTIVE TAX RATE Effective tax rate (18.7) % (19.5) % (5.7) % 9.0 % 85.4 % (6.1) % 15.5 % Adjustments: Total non-GAAP adjustments 26.0 64.2 26.2 14.9 (60.4) 31.5 5.7 Adjusted Effective Tax Rate(3) 7.3 % 44.7 % 20.5 % 23.9 % 25.0 % 25.4 % 21.2 % Adjusted Weighted Average Shares Outstanding, Adjusted Diluted EPS, Adjusted Effective Tax Rate, Adjusted Operating Margin, and Adjusted EBITDA Margin
21 (Margins are in %) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 FY 2025 FY 2024 ADJUSTED OPERATING MARGIN Income (Loss) Before Income Taxes Margin (3.6) % (5.0) % (5.0) % (7.5) % (10.3) % (5.3) % 15.0 % Adjustments: Total non-GAAP adjustments 1.9 2.4 1.9 4.4 6.8 2.7 (18.1) Interest expense 1.6 1.6 1.6 1.6 1.6 1.6 2.2 Margin for Adjusted Operating Income Before Adjustment for Divestitures (0.1) (1.0) (1.5) (1.5) (1.9) (1.0) (0.9) Divestitures(1) — — — — — — (1.1) Margin for Adjusted Operating Income (0.1) % (1.0) % (1.5) % (1.5) % (1.9) % (1.0) % (2.0) % ADJUSTED EBITDA MARGIN EBITDA Margin Before Adjustment for Divestitures 4.5 % 3.0 % 3.1 % 0.5 % (2.6) % 2.8 % 23.4 % Divestitures(1) — — — — — — (0.2) EBITDA Margin 4.5 3.0 3.1 0.5 (2.6) 2.8 23.2 Total non-GAAP adjustments 2.0 2.2 1.8 4.4 6.6 2.6 (18.3) Divestitures(1) — — — — — — 0.2 Adjusted EBITDA Margin Before Adjustment for Divestitures 6.5 5.2 4.9 4.9 4.0 5.4 5.1 Divestitures(1) — — — — — — (1.2) Adjusted EBITDA Margin 6.5 % 5.2 % 4.9 % 4.9 % 4.0 % 5.4 % 3.9 % CONTINUED
22 CONTINUED (in millions) Q4 2025 Q3 2025 Q2 2025 Q1 2025 Q4 2024 FY 2025 FY 2024 Operating Cash Flow $ 39 $ (39) $ (15) $ (58) $ 41 $ (73) $ (50) Cost of additions to land, buildings and equipment (15) (15) (15) (14) 11 (59) (28) Cost of additions to internal use software (7) (6) (5) (4) (5) (22) (28) Free Cash Flow 17 (60) (35) (76) 47 (154) (106) Transaction costs 5 2 3 4 2 14 20 Direct response costs - cyber event payments 8 7 — 2 — 17 — Vendor finance lease payments (3) (3) (3) (4) (3) (13) (17) Proceeds from failed sale-leaseback transactions — — 5 — — 5 — Tax payment related to divestitures and litigation recoveries 1 — — — 16 1 44 Adjusted Free Cash Flow $ 28 $ (54) $ (30) $ (74) $ 62 $ (130) $ (59) Free Cash Flow and Adj. Free Cash Flow The below footnotes correspond to the "Non-GAAP Reconciliations" slides 1. Adjusted for the full impact from revenue and income/loss from divestitures for all periods presented. 2. Included in Depreciation and amortization on the Consolidated Statements of Income (Loss). 3. The tax impact of Adjusted Pre-tax income (loss) was calculated under the same accounting principles applied to the 'As Reported' pre-tax income (loss), which employs an annual effective tax rate method to the results and without regard to the adjustments listed. 4. Average shares for the 2025 and 2024 calculation of adjusted EPS excludes 5.4 million shares associated with our Series A convertible preferred stock and includes the impact of the preferred stock dividend of approximately $3 million each quarter.
23 CONTINUED ($ in millions, except ratio) December 31, 2025 December 31, 2024 Long-term debt $ 665 $ 615 Current portion of long-term debt 22 24 Total GAAP debt 687 639 less cash and cash equivalents 233 366 Net Debt $ 454 $ 273 Adjusted EBITDA for the three months ended December 31, 2025 $ 50 September 30, 2025 40 June 30, 2025 37 March 31, 2025 37 December 31, 2024 $ 32 September 30, 2024 36 June 30, 2024 35 March 31, 2024 69 Trailing 12 months Adjusted EBITDA ("TTM AEBITDA") $ 164 $ 172 Adjusted Leverage Ratio (Net Debt divided by TTM AEBITDA) 2.8 1.6 (1) Refer to Appendix for complete Non-GAAP reconciliations of Adjusted Free Cash Flow. (2) Capex refers to additions to Land, Buildings & Equipment, Internal Use Software, Product Software Additions and Software as a Service Implementation Cost. (3) Q4 2024 Capex includes the reimbursement by the buyer of divested businesses for assets purchased prior to Q4 2024. (4) Net debt (Total Debt, including finance leases and other as well as deferred financing costs; less unrestricted cash) divided by TTM Adjusted EBITDA (before divestitures). See reconciliation below. (5) Total Cash includes $10M and $11M of restricted cash as of December 31, 2025 and December 31, 2024, respectively. (6) Total Debt as of December 31, 2025 includes Senior Notes and outstanding revolver balance; December 31, 2024 includes Term Loan A and Senior Notes. (7) Term Loan A interest rate: Secured Overnight Financing Rate ("SOFR") + 225 bps. (8) $109M outstanding under its Revolving Credit Facility Interest Rate ("SOFR") + 175 to 300 bps; remaining unused capacity is $223M as of December 31, 2025 and steps down to $187M beginning in October 2026. (9) Debt maturity amounts reflect only Senior Notes due 2029 and exclude all other debt instruments, finance leases, and potential mandatory prepayments. (10) Current portion of debt reflects the current maturities due in the next twelve months. The below footnotes correspond to the "Q4 and Full Year 2025 Cash Flow and Balance Sheet" slide Reconciliation of Net Debt and Net Adjusted Leverage Ratio
© 2025 Conduent, Inc. All rights reserved. Conduent and Conduent Agile Star are trademarks of Conduent, Inc. and/or its subsidiaries in the United States and/or other countries.
FAQ
How did Conduent (CNDT) perform financially in Q4 2025?
Conduent reported Q4 2025 revenue of $770 million, down 3.8% year over year, with a GAAP net loss of $33 million. However, adjusted EBITDA improved to $50 million, raising the adjusted EBITDA margin to 6.5% from 4.0% in Q4 2024.
What were Conduent’s full-year 2025 revenue and profit figures?
For 2025, Conduent generated $3,042 million of revenue, a 9.4% decline from 2024. The company recorded a full-year GAAP net loss of $170 million, compared with net income of $426 million in 2024, primarily due to large divestiture gains in the prior period.
How did Conduent’s 2025 adjusted EBITDA and margins change versus 2024?
Conduent’s 2025 adjusted EBITDA rose to $164 million from $124 million, and its adjusted EBITDA margin improved to 5.4% from 3.9%. Management attributed the improvement to cost optimization initiatives, favorable legal cost recovery, and higher revenues in the Transportation segment.
What was Conduent’s cash flow and liquidity position at the end of 2025?
In 2025, Conduent reported operating cash flow of $(73) million and adjusted free cash flow of $(130) million. The company ended the year with $243 million in cash, total debt of $687 million, and a net adjusted leverage ratio of 2.8x, plus unused revolver capacity.
How did Conduent’s business segments perform in 2025?
Full-year 2025 adjusted revenue was $1,511 million for Commercial, $922 million for Government, and $609 million for Transportation. Management cited revenue pressure in Commercial and Government, but highlighted revenue growth and margin expansion in Transportation and better margins in Government from cost and AI-driven efficiencies.
What strategic priorities did Conduent’s CEO outline for 2026 and beyond?
The CEO emphasized five priorities: increasing speed and accountability, enforcing financial discipline, reducing cost structure, optimizing the portfolio via a fix‑sell‑grow approach, and converting pipeline into growth. These initiatives target margin expansion, debt reduction, and more consistent revenue growth.
Filing Exhibits & Attachments
5 documents
Conduent Inc
NASDAQ:CNDT
CNDT Rankings
CNDT Latest News
CNDT Latest SEC Filings
Feb 12, 2026
[Form 4] CONDUENT Inc Insider Trading Activity
Feb 12, 2026
[Form 4] CONDUENT Inc Insider Trading Activity
Feb 12, 2026
[Form 4] CONDUENT Inc Insider Trading Activity
Feb 12, 2026
[Form 4] CONDUENT Inc Insider Trading Activity
Feb 12, 2026
[Form 4] CONDUENT Inc Insider Trading Activity
CNDT Stock Data
204.87M
136.62M
9.66%
75.72%
1.95%
Information Technology Services
Services-business Services, Nec
United States
FLORHAM PARK