What changed in this filing

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Item 1. Financial Statements

2025-11-07 compared with 2025-08-06 · 138 added, 475 removed, 568 unchanged (52% of the section changed)

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions, except per share data) 2025 2024 2025 2024

23 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2025 2024 2025 2024

11 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except share data in thousands) June 30, 2025 December 31, 2024

(in millions, except share data in thousands) September 30, 2025 December 31, 2024

Cash and cash equivalents $ 248 $ 366

13 unchanged sentences

Accrued compensation and benefits costs 180 170

Unearned income 80 103

Contract liabilities 82 103

Other current liabilities 289 290

24 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended

Nine Months Ended

September 30,

(in millions) 2025 2024

24 unchanged sentences

Proceeds from the issuance of debt 4 —

Payments on revolving credit facility ( 125 ) ( 30 )

Payments on debt ( 15 ) ( 503 )

Payments of debt issuance costs ( 3 ) —

Payments of revolving credit facility ( 125 ) ( 80 )

Payments of debt ( 101 ) ( 587 )

Treasury stock purchases ( 20 ) ( 182 )

8 unchanged sentences

Cash, Cash Equivalents and Restricted Cash at End of period (1)

(1) Includes $ 19 million and $ 7 million of restricted cash as of June 30, 2025 and 2024, respectively, that were included in Other current assets on the respective Condensed Consolidated Balance Sheets.

(1) Includes $ 16 million and $ 11 million of restricted cash as of September 30, 2025 and 2024, respectively, that were included in Other current assets on the respective Condensed Consolidated Balance Sheets.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

(in millions) Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings (Deficit) AOCL (1)

Non-controlling Interest Shareholders'

Balance at March 31, 2025 $ 2 $ ( 210 ) $ 3,955 $ ( 2,486 ) $ ( 461 ) $ 4 $ 804

Balance at June 30, 2025 $ 2 $ ( 218 ) $ 3,959 $ ( 2,529 ) $ ( 437 ) $ — $ 777

Dividends - preferred stock, $ 20 /share

7 unchanged sentences

Total Comprehensive Income (Loss), Net — — — ( 46 ) ( 4 ) — ( 50 )

Balance at June 30, 2025 $ 2 $ ( 218 ) $ 3,959 $ ( 2,529 ) $ ( 437 ) $ — $ 777

Three Months Ended June 30, 2024

Balance at September 30, 2025 $ 2 $ ( 231 ) $ 3,964 $ ( 2,577 ) $ ( 441 ) $ — $ 717

Three Months Ended September 30, 2024

(in millions) Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings (Deficit) AOCL (1)

Non-controlling Interest Shareholders'

Balance at March 31, 2024 $ 2 $ ( 44 ) $ 3,941 $ ( 2,752 ) $ ( 446 ) $ 4 $ 705

Balance at June 30, 2024 $ 2 $ ( 196 ) $ 3,947 $ ( 2,539 ) $ ( 463 ) $ 4 $ 755

Dividends - preferred stock, $ 20 /share

7 unchanged sentences

Total Comprehensive Income (Loss), Net — — — 123 14 — 137

Balance at June 30, 2024 $ 2 $ ( 196 ) $ 3,947 $ ( 2,539 ) $ ( 463 ) $ 4 $ 755

Six Months Ended June 30, 2025

Balance at September 30, 2024 $ 2 $ ( 210 ) $ 3,952 $ ( 2,418 ) $ ( 449 ) $ 4 $ 881

Nine Months Ended September 30, 2025

(in millions) Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings (Deficit) AOCL (1)

10 unchanged sentences

Total Comprehensive Income (Loss), Net — — — ( 137 ) 31 — ( 106 )

Balance at June 30, 2025 $ 2 $ ( 218 ) $ 3,959 $ ( 2,529 ) $ ( 437 ) $ — $ 777

Six Months Ended June 30, 2024

Balance at September 30, 2025 $ 2 $ ( 231 ) $ 3,964 $ ( 2,577 ) $ ( 441 ) $ — $ 717

Nine Months Ended September 30, 2024

(in millions) Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings (Deficit) AOCL (1)

9 unchanged sentences

Total Comprehensive Income (Loss), Net — — — 438 ( 14 ) — 424

Balance at June 30, 2024 $ 2 $ ( 196 ) $ 3,947 $ ( 2,539 ) $ ( 463 ) $ 4 $ 755

Balance at September 30, 2024 $ 2 $ ( 210 ) $ 3,952 $ ( 2,418 ) $ ( 449 ) $ 4 $ 881

(1) AOCL - Accumulated other comprehensive loss.

49 unchanged sentences

As the guidance is disclosure related, adoption will not have any impact on the Company's results of operations, financial position or cash flows.

Internal-use Software:

In September 2025, the FASB issued final guidance designed to modernize the accounting for software costs that are accounted for as "internal-use software." This new guidance removes all previous references to project stages.

It requires capitalization of software costs when (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended.

The new guidance is effective for annual and interim periods beginning after December 15, 2027.

Early adoption is permitted as of the beginning of an annual reporting period.

The Company is currently evaluating the impact that this new standard will have on its consolidated financial statements.

Note 3 – Revenue

Disaggregation of Revenue

In 2024, revenue from the BenefitWallet Portfolio and the Casualty Claims Solutions business were reclassified to the Divestitures segment from the Commercial segment.

In addition, in 2024, revenue from the Curbside Management and Public Safety businesses was reclassified to the Divestitures segment from the Transportation segment.

In 2024, revenue from the BenefitWallet Portfolio and the Casualty Claims Solutions business were reclassified to Divestitures from the Commercial segment.

In addition, in 2024, revenue from the Curbside Management and Public Safety businesses was reclassified to Divestitures from the Transportation segment.

All prior periods presented have been recast to reflect these changes.

2 unchanged sentences

All prior periods presented have been recast to reflect this change.

These major service offerings are described as follows:

Customer Experience Management:

The Company delivers a full range of customer contact services including customer care, technical support, loyalty management, and outbound and inbound sales, handling many complex interactions and representing the brands of its clients.

The Company creates better experiences across the customer lifecycle through a variety of channels including chat, email, voice and virtual agent to help customers where and how they want to engage.

Through omni-channel communications, automation and analytics, as well as labor efficiencies, the Company helps its clients drive revenue growth, enable scale, and gain cost reductions and other operational efficiencies.

The Company serves marquee clients across multiple sectors, including the financial services, healthcare and life sciences, logistics, technology, telecom, travel and hospitality sectors, helping to resolve complex issues for their customers with empathy and effectiveness.

Business Process as a Service ("BPaaS"):

The Company helps its clients digitally transform business processes and drive efficiency, automation and scale across essential business functions.

The Company streamlines client operations through its deep industry experience, understanding of its clients’ needs and the latest technology solutions to reduce costs, improve security, performance and accuracy, and enable revenue growth, while enhancing the end-user experience.

The Company's portfolio of BPaaS solutions spans payment integrity, finance, accounting, and procurement, human capital, legal and compliance, and bank and lending.

CNDT Q3 2025 Form 10-Q

Integrated Digital Solutions:

The Company drives efficiencies for clients with more digitized processes across the customer and document lifecycle through automation, data analytics and AI-powered solutions.

This helps to shorten time to decisions on items like claims and applications while lowering costs, reducing manual effort, improving data accuracy, providing omnichannel communications and enhancing the overall customer experience.

The Company's solutions span:

document and claims processing;

health plan administration;

scanning and digitization of mailrooms, data and documents;

omnichannel digital and physical communications, including print and mail and solutions focused specifically in the pharmaceutical and banking industries.

The following table provides information about disaggregated revenue by major service offering and reportable segment and the timing of revenue recognition.

Refer to Note 4 – Segment Reporting for additional information on the Company's reportable segments and Note 5 – Divestitures for additional information on the Company's divestitures.

CNDT Q2 2025 Form 10-Q

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2025 2024 2025 2024

17 unchanged sentences

Total Revenue $ 767 $ 807 $ 2,272 $ 2,556

There have been no changes to the major service offerings within the Government and Transportation segments as disclosed in Note 2 - Revenue in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

As noted above, the Company has updated the presentation of its major service offerings within the Commercial segment.

These major service offerings are described as follows:

Customer Experience Management:

The Company creates better experiences across the customer lifecycle through a variety of channels including chat, email, voice and virtual agent to help customers where and how they want to engage.

Business Process as a Service ("BPaaS"):

The Company helps its clients digitally transform business processes and drive efficiency, automation and scale across essential business functions.

The Company's portfolio of BPaaS solutions spans payment integrity, finance, accounting, and procurement, human capital, legal and compliance, and bank and lending.

Integrated Digital Solutions:

The Company drives efficiencies for clients with more digitized processes across the customer and document lifecycle through automation, data analytics and AI-powered solutions.

The Company's solutions span:

document and claims processing;

health plan administration;

scanning and digitization of mailrooms, data and documents;

omnichannel digital and physical communications, including print and mail and solutions focused specifically in the pharmaceutical and banking industries.

CNDT Q2 2025 Form 10-Q

Contract Balances

3 unchanged sentences

Contract assets are transferred to Accounts receivable, net when the rights to consideration become unconditional.

Unearned income includes payments received in advance of performance under the contract, which are realized when the associated revenue is recognized under the contract.

The following table provides information about significant movements in contract assets (current and long-term) for the six months ended June 30, 2025 and 2024:

Contract liabilities include payments received in advance of performance under the contract, which are realized when the associated revenue is recognized under the contract.

CNDT Q3 2025 Form 10-Q

The following table provides information about significant movements in contract assets (current and long-term) for the nine months ended September 30, 2025 and 2024:

(in millions) 2025 2024

3 unchanged sentences

Ending balance (1)

(1) Of which $ 2 million and $ 7 million are included in Other long-term assets as of June 30, 2025 and 2024, respectively.

The following table provides information about significant movements in unearned income balances (current and long-term) for the six months ended June 30, 2025 and 2024:

(1) Of which $ 9 million and $ 4 million are included in Other long-term assets as of September 30, 2025 and 2024, respectively.

The following table provides information about significant movements in contract liabilities balances (current and long-term) for the nine months ended September 30, 2025 and 2024:

(in millions) 2025 2024

Beginning balance $ 155 $ 146

Additional deferral of income 98 130

Revenue recognized related to deferral of income (1)

Additional contract liabilities recorded 159 205

Revenue recognized related to contract liabilities and other (1)

( 169 ) ( 183 )

Ending balance (2)

(1) Of which $ 66 million and $ 69 million were recognized during the six months ended June 30, 2025 and 2024, respectively, that related to the Company's unearned income as of December 31, 2024 and 2023, respectively.

(2) Of which $ 60 million and $ 57 million are included in Long-term unearned income as of June 30, 2025 and 2024, respectively.

(1) Of which $ 79 million and $ 82 million were recognized during the nine months ended September 30, 2025 and 2024, respectively, that related to the Company's contract liabilities as of December 31, 2024 and 2023, respectively.

(2) Of which $ 63 million and $ 53 million are included in Other long-term liabilities as of September 30, 2025 and 2024, respectively.

Transaction Price Allocated to the Remaining Performance Obligations

Estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially satisfied at June 30, 2025 was approximately $ 1.5 billion.

Estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially satisfied at September 30, 2025 was approximately $ 1.4 billion.

The Company expects to recognize approximately 73 % of this revenue over the next two years and the remainder thereafter.

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The Company's CODM uses Segment profit (loss) information to monitor budget versus actual results and then uses this information to help make informed decisions about future resource investment, potential restructuring of segments to enhance overall company performance, and future divestitures and acquisitions.

CNDT Q2 2025 Form 10-Q

The Company's CODM does not evaluate operating segments using discrete asset information as a significant portion of the assets is managed at the total company level.

A description of the Company's reportable segments is as follows:

• Commercial:

2 unchanged sentences

Across the Commercial segment, the Company operates on its clients’ behalf to deliver mission-critical solutions and services to reduce costs, improve efficiencies and enhance performance for the Company's clients and deliver better experiences for their consumers and employees.

CNDT Q3 2025 Form 10-Q

• Government:

7 unchanged sentences

Three Months Ended

September 30,

(in millions) Commercial Government Transportation Total (1)

17 unchanged sentences

CNDT Q3 2025 Form 10-Q

Six Months Ended

Nine Months Ended

September 30,

(in millions) Commercial Government Transportation Total (1)

19 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2025 2024 2025 2024

14 unchanged sentences

(2) Unallocated Costs includes IT infrastructure costs that are shared by multiple reportable segments, enterprise application costs and certain corporate overhead expenses not directly attributable or allocated to the reportable segments.

Included in the three and six months ended June 30, 2025 periods are $ 0 million and $ 25 million, respectively, of Direct response costs related to the January 2025 Cyber Incident as well as a $ 0 million and $ 9 million, respectively, insurance recovery related to the 2019 Texas Matter.

Included in the three and nine months ended September 30, 2025 periods are $ 0 million and $ 25 million, respectively, of Direct response costs related to the January 2025 Cyber Incident as well as a $ 0 million and $ 9 million, respectively, insurance recovery related to the 2019 Texas Matter.

Refer to Note 3 – Revenue for additional information on disaggregated revenues of the reportable segments.

11 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2025 2024 2025 2024

11 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2025 2024 2025 2024

7 unchanged sentences

Additionally, the Company recorded $ 102 million of income tax expense in connection with the transfer of the BenefitWallet Portfolio.

The cash consideration and gain on the transfer of the BenefitWallet Portfolio recorded in the second quarter of 2024 were $ 261 million and $ 261 million, respectively.

The Company recorded $ 63 million of income tax expense in connection with the transfer of the BenefitWallet Portfolio in the second quarter of 2024.

CNDT Q2 2025 Form 10-Q

There was no cash consideration or gain on the transfer of the BenefitWallet Portfolio recorded in the third quarter of 2024.

The BenefitWallet Portfolio generated revenue and income (loss) before income taxes as follows:

CNDT Q3 2025 Form 10-Q

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions) 2025 2024 2025 2024

4 unchanged sentences

The implementation of the Company's operational efficiency improvement initiatives has reduced the Company's real estate footprint across all geographies and segments resulting in lease right-of-use ("ROU") asset impairments and other related costs.

Also included in Restructuring and related costs are incremental, non-recurring costs related to the consolidation of the Company's data centers, which totaled $ 0 million and $ 2 million for the three months ended June 30, 2025 and 2024, respectively, and $ 0 million and $ 4 million for the six months ended June 30, 2025 and 2024, respectively.

Also included in Restructuring and related costs are incremental, non-recurring costs related to the consolidation of the Company's data centers, which totaled $ 0 million and $ 1 million for the three months ended September 30, 2025 and 2024, respectively, and $ 0 million and $ 4 million for the nine months ended September 30, 2025 and 2024, respectively.

Management continues to evaluate the Company's businesses and, in the future, there may be additional provisions for new plan initiatives and/or changes in previously recorded estimates as payments are made, or actions are completed.

2 unchanged sentences

Asset impairment costs related to the reduction of the Company's real estate footprint include impairment of operating lease ROU assets and associated leasehold improvements.

A summary of the Company's restructuring program activity during the six months ended June 30, 2025 and 2024 is as follows:

(in millions) Severance and Related Costs Termination and Other Costs (2)

A summary of the Company's restructuring program activity during the nine months ended September 30, 2025 and 2024 is as follows:

(in millions) Severance and Related Costs Termination and Other Restructuring-related Costs (2)

Asset Impairments Total

4 unchanged sentences

Charges against reserve and currency ( 19 ) ( 9 ) ( 3 ) ( 31 )

Accrued Balance at June 30, 2025 $ 8 $ 2 $ — $ 10

(in millions) Severance and Related Costs Termination and Other Costs (2)

Accrued Balance at September 30, 2025 $ 8 $ — $ — $ 8

(in millions) Severance and Related Costs Termination and Other Restructuring-related Costs (2)

Asset Impairments Total

4 unchanged sentences

Charges against reserve and currency ( 15 ) ( 11 ) ( 2 ) ( 28 )

Accrued Balance at June 30, 2024 $ 5 $ 2 $ — $ 7

Accrued Balance at September 30, 2024 $ 3 $ — $ — $ 3

(1) Represents amounts recognized within the Condensed Consolidated Statements of Income (Loss) for the years shown.

(2) During the six months ended June 30, 2024, the Company incurred $ 2 million of costs for bringing certain technology functions in-house.

There were no such costs incurred in the six months ended June 30, 2025.

(2) During the nine months ended September 30, 2024, the Company incurred $ 1 million of costs for bringing certain technology functions in-house.

There were no such costs incurred in the nine months ended September 30, 2025.

These costs are included in the above table in Termination and other costs.

3 unchanged sentences

Long-term debt was as follows:

(in millions) June 30, 2025 December 31, 2024

(in millions) September 30, 2025 December 31, 2024

Revolving credit facility $ 134 $ —

Term loan A due 2026 — 88

5 unchanged sentences

Total Long-term Debt $ 697 $ 615

As of June 30, 2025, the Company had no outstanding borrowings under its $ 550 million revolving credit facility (the "Revolver").

Additionally, the Company utilized $ 10 million of the Revolver to issue letters of credit as of June 30, 2025.

The net Revolver available to be drawn upon as of June 30, 2025 was $ 540 million.

In connection with voluntary prepayments of the Term Loan B made in 2024, the Company wrote-off related debt issuance costs of $ 3 million and $ 5 million, which is included in Loss on extinguishment of debt in the Condensed Consolidated Statements of Income (Loss) for the three and six months ended June 30, 2024, respectively.

At June 30, 2025, the Company was in compliance with all debt covenants related to the borrowings in the table above.

2021 Credit Agreement

On October 15, 2021, the Company, Conduent Business Services, LLC (the “Lead Borrower” or “CBS”), Conduent State & Local Solutions, Inc.

(“CSLS”), Affiliated Computer Services International B.V.

(the “Dutch Borrower” and, together with the Lead Borrower and CSLS, the “Borrowers”) entered into a Credit Agreement with the other guarantors party thereto, Bank of America, N.A., as Administrative Agent and Collateral Agent (in such capacities, the "Administrative Agent”), and as a Swing Line Lender and an L/C Issuer and the lenders party thereto (as amended by Amendment No.

1 to Credit Agreement, dated as of May 9, 2023, and as amended by Amendment No.

2 to Credit Agreement, dated as of September 6, 2023, the “2021 Credit Agreement”).

2025 Credit Agreement

On August 26, 2025, the Company (as the parent guarantor), the Borrowers, the other guarantors party thereto, the Administrative Agent and the lenders and letter of credit issuers party thereto, entered into an amendment to the 2021 Credit Agreement (“Amendment No.

3” and the 2021 Credit Agreement as amended by Amendment No.

3, the “2025 Credit Agreement”) to amend the terms of the 2021 Credit Agreement, to, among other things, (i) prepay in full the Term A Loans outstanding under the 2021 Credit Agreement utilizing funds from the Revolving Credit Facility (as defined below), (ii) reduce the amount of the revolving credit facility to $ 357 million, of which $ 187 million will mature on August 26, 2028 and the remaining $ 170 million will continue to mature on October 15, 2026 (as amended, the “Revolving Credit Facility”), (iii) add a new performance letter of credit facility in the amount of approximately $ 93 million (the “Performance Letter of Credit Facility” and together with the Revolving Credit Facility, the “2025 Credit Facilities”), which will mature on August 26, 2028 and (iv) make certain other changes to the 2021 Credit Agreement as set forth in Amendment No.

The Borrowers may voluntarily repay outstanding loans under the 2025 Credit Facilities at any time without premium or penalty, other than customary breakage costs.

Borrowings under the Revolving Credit Facility bear interest, at the Company's option, at a rate per annum equal to an applicable margin over a base rate or a Secured Overnight Financing Rate ("SOFR"), depending on the type of loan.

The applicable margin for the Revolving Credit Facility for SOFR loans range from 1.75 % to 3.00 % per annum, depending on certain leverage ratios and for base rate loans range from 0.75 % to 2.00 % per annum.

In addition to paying interest on outstanding principal under the Revolving Credit Facility, the Company is required to pay a commitment fee ranging from 0.30 % to 0.55 % per annum to the lenders in respect of unutilized commitments thereunder.

Issuances of letters of credit under the Performance Letter of Credit Facility bear interest at a rate per annum equal to an applicable margin.

The applicable margin for the Performance Letter of Credit Facility range from 1.05 % to 1.80 % per annum, depending on certain leverage ratios.

In addition to paying fees on outstanding principal under the Performance Letter of Credit Facility, the Company is required to pay a commitment fee ranging from 0.30 % to 0.55 % per annum to the performance letter of credit issuers in respect of unutilized commitments thereunder.

CNDT Q3 2025 Form 10-Q

All obligations under the 2025 Credit Agreement are unconditionally guaranteed by the Company, CBS and CSLS, and the existing and future direct and indirect wholly owned domestic restricted subsidiaries of CBS (subject to certain exceptions).

All obligations under the 2025 Credit Agreement are secured, subject to certain exceptions, by a first-priority pledge of substantially all assets of CBS and the subsidiary guarantors, and all of the capital stock of CBS and each of CBS' wholly owned material restricted subsidiaries directly held by CBS and CSLS or a subsidiary guarantor.

The 2025 Credit Agreement contains certain customary affirmative and negative covenants, restrictions, prepayment terms and events of default.

It requires the consolidated first lien net leverage ratio to not exceed 4.50 to 1.00 and a fixed charge coverage ratio of greater than or equal to 2.50 to 1.00.

If an event of default occurs, the lenders under the 2025 Credit Facilities will be entitled to take various actions, including the acceleration of amounts due under the Credit Agreement and all actions permitted to be taken by secured creditors under applicable law.

As of September 30, 2025, the Company had $ 134 million outstanding borrowings under its Revolving Credit Facility.

The Company utilized $ 25 million of the Revolving Credit Facility to issue letters of credit as of September 30, 2025.

Additionally, the Company utilized $ 82 million of the Performance Letter of Credit Facility to issue performance letters of credit as of September 30, 2025.

The remaining unused capacity, reflecting total borrowing facility size minus outstanding borrowings and letters of credit, under the Revolving Credit Facility and the Performance Letter of Credit Facility was $ 198 million and $ 11 million, respectively, as of September 30, 2025.

In connection with the voluntary repayment of the Term Loan A described under "2025 Credit Facilities" above, the Company wrote-off related debt issuance costs of $ 1 million and $ 1 million, which is included in Loss on extinguishment of debt in the Condensed Consolidated Statements of Income (Loss) for the three and nine months ended September 30, 2025, respectively.

In connection with voluntary prepayments of the Term Loan B made in 2024, the Company wrote-off related debt issuance costs of $ 1 million and $ 6 million, which is included in Loss on extinguishment of debt in the Condensed Consolidated Statements of Income (Loss) for the three and nine months ended September 30, 2024, respectively.

At September 30, 2025, the Company was in compliance with all debt covenants related to the borrowings in the table above.

Note 8 – Financial Instruments

1 unchanged sentence

As a part of the Company's foreign exchange risk management strategy, the Company uses derivative instruments, primarily forward contracts, to hedge the funding of foreign entities which have a non-dollar functional currency, thereby reducing volatility of earnings or protecting fair values of assets and liabilities.

At June 30, 2025 and December 31, 2024, the Company had outstanding forward exchange contracts with gross notional values of $ 208 million and $ 203 million, respectively.

At June 30, 2025, approximately 78 % of these contracts mature within three months, 8 % in three to six months, 10 % in six to twelve months and 4 % in greater than twelve months.

At September 30, 2025 and December 31, 2024, the Company had outstanding forward exchange contracts with gross notional values of $ 239 million and $ 203 million, respectively.

At September 30, 2025, approximately 81 % of these contracts mature within three months, 7 % in three to six months, 9 % in six to twelve months and 3 % in greater than twelve months.

Most of these foreign currency derivative contracts are designated as cash flow hedges and did not have a material impact on the Company's condensed consolidated balance sheet, income statement or cash flows for the periods presented.

6 unchanged sentences

Fair value is estimated using inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.

Fair value is estimated using unobservable inputs that are significant to the fair value of the assets or liabilities.

CNDT Q3 2025 Form 10-Q

Fair value is estimated using unobservable inputs that are significant to the fair value of the assets or liabilities.

Summary of Financial Assets and Liabilities Accounted for at Fair Value on a Recurring Basis

1 unchanged sentence

The basis for the measurement at fair value in all cases was Level 2.

(in millions) June 30, 2025 December 31, 2024

(in millions) September 30, 2025 December 31, 2024

Foreign exchange contracts - forward $ — $ —

4 unchanged sentences

The estimated fair values of other financial assets and liabilities were as follows:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(in millions) Carrying

8 unchanged sentences

The Company, at its discretion, matches a portion of employee contributions.

The Company recognized an expense related to its defined contribution plans of $ 2 million and $ 2 million for the three months ended June 30, 2025 and 2024, respectively, and $ 4 million and $ 6 million for the six months ended June 30, 2025 and 2024, respectively.

The Company recognized an expense related to its defined contribution plans of $ 0 million and $ 2 million for the three months ended September 30, 2025 and 2024, respectively, and $ 4 million and $ 8 million for the nine months ended September 30, 2025 and 2024, respectively.

The balance sheet and income statement impacts of any remaining defined benefit plans are immaterial for all periods presented in these Condensed Consolidated Financial Statements.

CNDT Q3 2025 Form 10-Q

Note 11 – Accumulated Other Comprehensive Loss ("AOCL")

3 unchanged sentences

Other comprehensive income (loss) 32 ( 1 ) — 31

Balance at June 30, 2025 $ ( 445 ) $ 3 $ 5 $ ( 437 )

Balance at September 30, 2025 $ ( 446 ) $ — $ 5 $ ( 441 )

(in millions) Currency Translation Adjustments Gains (Losses) on Cash Flow Hedges Defined Benefit Pension Items Total

1 unchanged sentence

Other comprehensive income (loss) ( 14 ) — — ( 14 )

Balance at June 30, 2024 $ ( 468 ) $ 1 $ 4 $ ( 463 )

Balance at September 30, 2024 $ ( 455 ) $ 2 $ 4 $ ( 449 )

(1) All amounts are net of tax.

Tax effects were immaterial.

CNDT Q2 2025 Form 10-Q

Note 12 – Contingencies and Litigation

10 unchanged sentences

Should developments in any of these matters cause a change in the Company's determination as to an unfavorable outcome and result in the need to recognize a material accrual, or should any of these matters result in a final adverse judgment or be settled for significant amounts in excess of any accrual for such matter or matters, this could have a material adverse effect on the Company's results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occurs.

The Company believes it has recorded adequate provisions for any such matters as of June 30, 2025.

The Company believes it has recorded adequate provisions for any such matters as of September 30, 2025.

Litigation is inherently unpredictable, and it is not possible to predict the ultimate outcome of these matters.

4 unchanged sentences

However, while the ultimate liabilities resulting from such claims may be significant to results of operations in the period recognized, management does not anticipate they will have a material adverse effect on the Company's Condensed Consolidated Financial position or liquidity.

As of June 30, 2025, the Company had accrued its estimate of liability incurred under its indemnification arrangements and guarantees.

As of September 30, 2025, the Company had accrued its estimate of liability incurred under its indemnification arrangements and guarantees.

CNDT Q3 2025 Form 10-Q

Litigation Against the Company

17 unchanged sentences

The parties reached an agreement on August 8, 2024, under which, contemporaneously with the closing of such a transaction, Skyview would pay the outstanding principal plus interest due on the outstanding Notes, fully discharging Skyview's obligations under the Notes, and would pay certain of CBS's litigation costs.

CNDT Q2 2025 Form 10-Q

On September 24, 2024, Skyview and the buyer announced a signed and binding asset purchase agreement.

7 unchanged sentences

The Appellate Division further found that the maximum amount that Skyview would have been entitled to set off against its liability on the Notes was $ 5 million (the limit set forth in the sale agreement).

The trial court accordingly entered judgment on the TSA and late rent payment counterclaims on June 23, 2025, which is pending final entry by the County Clerk.

The trial court accordingly entered judgment on the TSA and late rent payment counterclaims on June 23, 2025, with final entry by the County Clerk on August 20, 2025.

On July 3, 2025, Skyview filed a motion to reargue the Appellate Division’s decision and, alternatively, for leave to appeal to the New York Court of Appeals.

This motion was denied on September 4, 2025.

Conduent is in the process of seeking to collect on the judgment and continuing to pursue the amount owed by Skyview to CBS on the Jamaica Deferred Closing counterclaim.

CBS continues to deny all of plaintiffs' allegations, believes that it has strong defenses to all of plaintiffs’ claims, and will continue to defend the litigation vigorously.

The Company is not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimates of the possible outcome or loss, if any, in excess of currently recorded reserves.

CNDT Q3 2025 Form 10-Q

Other Contingencies

Certain contracts, primarily in the Company's Government and Transportation segments, require the Company to provide a surety bond or a letter of credit as a guarantee of performance.

As of June 30, 2025, the Company had $ 566 million of outstanding surety bonds issued to secure its performance of contractual obligations with its clients, and $ 120 million of outstanding letters of credit issued to secure the Company's performance of contractual obligations to its clients as well as other corporate obligations.

As of September 30, 2025, the Company had $ 546 million of outstanding surety bonds issued to secure its performance of contractual obligations with its clients, and $ 131 million of outstanding letters of credit issued to secure the Company's performance of contractual obligations to its clients as well as other corporate obligations.

In general, the Company would only be liable for these guarantees in the event of default in the Company's performance of its obligations under each contract.

5 unchanged sentences

Each share of convertible preferred stock is convertible at any time, at the option of the holder, into 44.9438 shares of common stock for a total of 5,393,000 shares (reflecting an initial conversion price of approximately $ 22.25 per share of common stock), subject to customary anti-dilution adjustments.

CNDT Q2 2025 Form 10-Q

Note 14 – Earnings (Loss) per Share

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in millions, except per share data in whole dollars and shares in thousands) 2025 2024 2025 2024

22 unchanged sentences

The components of Other assets and Other liabilities were as follows:

(in millions) June 30, 2025 December 31, 2024

(in millions) September 30, 2025 December 31, 2024

Other Current Assets

24 unchanged sentences

Income tax liabilities 19 18

Unearned income 60 52

Contract liabilities 63 52

Total Other Long-term Liabilities $ 103 $ 93

Note 16 – Subsequent Events

On July 4, 2025, the President of the United States signed into law the One Big Beautiful Bill Act, which contains certain provisions enacting tax reform.

The Company is evaluating the full effects of the legislation on its estimated annual effective tax rate and cash tax position.

CNDT Q3 2025 Form 10-Q

TEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis ("MD&A") is intended to provide a reader of our financial statements with a narrative from the perspective of management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results.

Unless otherwise noted, transactions and other factors significantly impacting our financial condition, results of operations and liquidity are discussed in order of magnitude.

Our MD&A is presented in seven sections:

• Financial Information and Analysis of Results of Operations;

• Capital Resources and Liquidity;

• Critical Accounting Estimates and Policies;

• Recent Accounting Changes;

• Non-GAAP Financial Measures.

The MD&A is provided as a supplement to, and should be read in conjunction with, our Condensed Consolidated Financial Statements and the accompanying Notes.

We deliver digital business solutions and services spanning the commercial, government and transportation spectrum – creating valuable outcomes for our clients and the millions of people who count on them.

We leverage cloud computing, artificial intelligence ("AI"), machine learning, automation and advanced analytics to deliver mission-critical solutions.

Through a dedicated global team of approximately 53,000 associates, as well as process expertise and advanced technologies, our solutions and services digitally transform our clients’ operations to enhance customer experiences, improve performance, increase efficiencies and reduce costs.

Headquartered in Florham Park, New Jersey, we have operations in 24 countries as of June 30, 2025.

Our reportable segments correspond to how we organize and manage the business and are aligned to the industries in which our clients operate.

These three segments are:

• Commercial – Our Commercial segment provides business process services that span our clients' businesses end-to-end from the front-office to the back-office for a variety of commercial industries.

These solutions are both cross-industry and industry-specific in nature.

Across the Commercial segment, we operate on our clients’ behalf to deliver mission-critical solutions and services to reduce costs, improve efficiencies and enhance performance for our clients and deliver better experiences for their consumers and employees.

• Government – Our Government segment provides government-centric business process services and solutions to U.S.

federal, state, local and foreign governments for public assistance, healthcare programs and administration, transaction processing, payment services and case management.

In this segment, we help governments respond to changing rules for eligibility and keep pace with increasing citizen expectations, modernize legacy technology systems, combat benefits fraud and shift in response to an evolving regulatory environment.

• Transportation – Our Transportation segment provides government agencies and transportation authorities around the world with systems, support and revenue-generating solutions serving toll and fare collections as well as mobility and digital payments that help streamline operations and increase revenue to government transportation agencies.

With an expanded focus on sustainability and enhancing the quality of life for citizens and communities around the world, our solutions help reduce congestion and greenhouse emissions, while creating seamless travel experiences for consumers throughout transportation ecosystems.

CNDT Q2 2025 Form 10-Q

Executive Summary

Our intense emphasis on growth, quality, and efficiency, beginning in the first quarter of 2020, resulted in a strengthened foundation.

Building on this solid foundation, during 2023, we held an investor briefing outlining our three-year strategy.

We continue to execute on this strategy and remain focused on accelerating growth and enhancing value for our stakeholders.

We intend to achieve this by doubling down on key themes outlined in the 2023 investor briefing including focusing on key growth areas within each of our businesses, continuing our portfolio rationalization strategy, divesting certain solutions which have either scarcity value outside of Conduent or are capital intensive relative to their growth opportunity, and taking a balanced approach to allocating capital including internal investments in our solutions, pre-paying debt and repurchasing common shares.

We believe this strategy has resulted and will continue to result in a more nimble and faster-growing Conduent with modest levels of net leverage, enhanced valuation, and a stronger balance sheet.

2025 is the year in which we intend to complete the remaining commitment of $1 billion of deployable capital through further portfolio rationalization, achieving the financial 2025 exit rate targets we have been anchoring to throughout this 3-year journey, as well as demonstrating revenue growth in the remaining Conduent portfolio of businesses.

During the second quarter of 2025 we achieved the following:

• Made progress on the execution of the second phase of our portfolio rationalization strategy, focusing on assets that are either capital-intensive or have a negative impact on our earnings profile.

• Expanded our presence in the Philippines with a new facility in Lipa-Malver.

• Relaunched our market-leading Vector platform in the cloud, which enables opportunities to scale across additional clients in our Transportation segment.

• Named to Newsweek's 2025 Global Most Loved Workplaces list, earning recognition for the third consecutive year.

• Received the remaining cash proceeds related to the sale of our Curbside Management and Public Safety businesses.

• Executed a contract amendment, at improved margins, to extend our work in distributing Social Security payments on prepaid cards.

• Continued to strengthen our partnership with one of our largest Transportation segment customers.

This included executing a contract amendment with additional consideration, as well as streamlining the decision making and delivery process by repurchasing the interest of our minority partner.

On January 13, 2025, the Company experienced an operational disruption and learned that a threat actor gained unauthorized access to a limited portion of the Company’s environment (the "January 2025 Cyber Event").

Upon detection, the Company activated its cybersecurity response plan with the help of external cybersecurity experts to contain, assess, and remediate the incident.

The Company restored the affected systems and returned to normal operations within days, and in some cases, hours.

The disruption did not have a material impact to the Company’s operations.

As part of its ongoing investigation, the Company determined that the threat actor exfiltrated a set of files associated with a limited number of the Company’s clients.

Due to the complexity of the files, the Company engaged cybersecurity data mining experts to evaluate the exfiltrated data and was recently informed of its nature, scope and validity, confirming that the data sets contained a significant number of individuals’ personal information associated with our clients’ end-users.

The Company is continuing to further analyze and document the precise and detailed impact of the data exfiltrated, and clients are being informed as appropriate in order to determine next steps as required by federal and state law.

To the Company’s knowledge, the exfiltrated data has not been released on the dark web or otherwise publicly.

CNDT Q2 2025 Form 10-Q

While the Company did not experience material impacts to its operating environment or costs from the event itself, the Company has incurred and accrued material non-recurring expenses in the first quarter related to the event based on potential notification requirements.

The Company maintains a cyber insurance policy and has also notified federal law enforcement authorities of the incident.

It is possible that future risks and uncertainties resulting from the cyber event—including those related to impacted data, litigation, reputational harm, and regulatory actions—could adversely affect the Company’s financial condition or results of operations.

See also Part II, Item 1A (Risk Factors).

Financial Information and Analysis of Results of Operations

Three Months Ended

June 30, 2025 vs.

(in millions) 2025 2024 $ Change % Change

Revenue $ 754 $ 828 $ (74) (9) %

Operating Costs and Expenses

Cost of services (excluding depreciation and amortization) 617 677 (60) (9) %

Selling, general and administrative (excluding depreciation and amortization) 100 115 (15) (13) %

Research and development (excluding depreciation and amortization) 1 1 — — %

Depreciation and amortization 48 51 (3) (6) %

Restructuring and related costs 8 8 — — %

Interest expense 12 19 (7) (37) %

(Gain) loss on divestitures and transaction costs, net 4 (347) 351 n/m

Litigation settlements (recoveries), net — 1 (1) n/m

Loss on extinguishment of debt — 3 (3) n/m

Other (income) expenses, net 2 — 2 n/m

Total Operating Costs and Expenses 792 528 264

Income (Loss) Before Income Taxes (38) 300 (338)

Income tax expense (benefit) 2 84 (82)

Net Income (Loss) $ (40) $ 216 $ (256)

CNDT Q2 2025 Form 10-Q

Six Months Ended

June 30, 2025 vs.

(in millions) 2025 2024 $ Change % Change

Revenue $ 1,505 $ 1,749 $ (244) (14) %

Operating Costs and Expenses

Cost of services (excluding depreciation and amortization) 1,235 1,412 (177) (13) %

Selling, general and administrative (excluding depreciation and amortization) 220 231 (11) (5) %

Research and development (excluding depreciation and amortization) 2 3 (1) (33) %

Depreciation and amortization 96 113 (17) (15) %

Restructuring and related costs 12 17 (5) (29) %

Interest expense 24 46 (22) (48) %

(Gain) loss on divestitures and transaction costs, net 7 (508) 515 n/m

Litigation settlements (recoveries), net 2 5 (3) (60) %

Loss on extinguishment of debt — 5 (5) n/m

Other (income) expenses, net 1 (2) 3 n/m

Total Operating Costs and Expenses 1,599 1,322 277

Income (Loss) Before Income Taxes (94) 427 (521)

Income tax expense (benefit) (3) 112 (115)

Net Income (Loss) $ (91) $ 315 $ (406)

Revenue for the three months ended June 30, 2025 decreased, compared to the prior year period, approximately 73% of which was due to the impact of the BenefitWallet Transfer and the sales of the Curbside Management and Public Safety Solutions and Casualty Claims Solutions businesses.

Excluding the divestitures impact, lost business and lower Commercial volumes contributed to the decrease and were partially offset by new business ramp and positive impacts from a contract amendment with a Transit Solutions customer.

Revenue for the six months ended June 30, 2025 decreased, compared to the prior year period, approximately 63% of which was due to the impact of the BenefitWallet Transfer and the sales of the Curbside Management and Public Safety Solutions and Casualty Claims Solutions businesses.

Excluding the divestitures impact, lost business and lower volumes contributed to the decrease and were partially offset by new business ramp and positive impacts from a contract amendment with a Transit Solutions customer.

Cost of Services (excluding depreciation and amortization)

Cost of services for the three and six months ended June 30, 2025 decreased, compared to the prior year periods, primarily due to the impact of the BenefitWallet Transfer and the sales of the Curbside Management and Public Safety Solutions and Casualty Claims Solutions businesses.

Excluding the divestitures impact, lower expenses on lower revenues and cost optimizations contributed to the decline.

Selling, General and Administrative ("SG&A") (excluding depreciation and amortization)

SG&A for the three months ended June 30, 2025 decreased, compared to the prior year period, primarily driven by cost efficiencies in our corporate functions.

SG&A for the six months ended June 30, 2025 decreased, compared to the prior year period, primarily driven by a $9 million benefit from the recovery of legal costs from one of our insurance carriers related to the previously disclosed State of Texas matter that settled in February 2019 as well as cost efficiencies in our corporate functions.

These were partially offset by $25 million of direct response costs related to the January 2025 Cyber Event.

CNDT Q2 2025 Form 10-Q

Depreciation and Amortization

Depreciation and amortization for the three and six months ended June 30, 2025 decreased, compared to the prior year periods, primarily due to the absence of a write-off of an abandoned internal use software asset in our Commercial segment in the prior year and the sales of the Curbside Management and Public Safety Solutions and Casualty Claims Solutions businesses.

These decreases were partially offset by increased amortization of deferred contract costs related to new projects that went live in 2025.

Restructuring and Related Costs

We engage in a series of restructuring programs related to optimizing our employee base, reducing our real estate footprint, exiting certain activities, outsourcing certain internal functions, consolidating our data centers and engaging in other actions designed to reduce our cost structure and improve productivity.

The following are the components of our Restructuring and related costs:

Three Months Ended

June 30, Six Months Ended

(in millions) 2025 2024 2025 2024

Severance and related costs $ 6 $ 3 $ 7 $ 7

Data center consolidation costs — 2 — 3

Termination, insourcing and asset impairment costs 2 3 5 7

Restructuring and related costs $ 8 $ 8 $ 12 $ 17

Refer to Note 6 – Restructuring Programs and Related Costs to the Condensed Consolidated Financial Statements for additional information regarding our restructuring programs.

Interest Expense

Interest expense represents interest on long-term debt and the amortization of debt issuance costs.

Interest expense for the three and six months ended June 30, 2025 decreased, compared to the prior year periods, primarily due to the 2024 voluntary prepayments of the entire Term Loan B balance outstanding and a portion of the Term Loan A balance with proceeds from divestitures.

(Gain) Loss on Divestitures and Transaction Costs

The completion of the BenefitWallet Transfer resulted in a gain of $261 million and $425 million for the three and six months ended June 30, 2024, respectively.

The completion of the sale of the Curbside Management and Public Safety businesses in the second quarter of 2024 resulted in a gain of $108 million for the three and six months ended June 30, 2024.

Additionally, professional fees and other costs related to these consummated and certain other non-consummated transactions considered by the Company are included in this financial statement line item for all periods.

Litigation Settlements (Recoveries), Net

Litigation settlements (recoveries), net for the six months ended June 30, 2025 and 2024 were not material.

The effective tax rate for the three months ended June 30, 2025 was (5.7)%, compared to 28.2% for the three months ended June 30, 2024.

The June 30, 2025 rate was lower than the U.S.

statutory rate of 21%, due primarily to valuation allowances and geographic mix of income.

The effective tax rate for the three months ended June 30, 2024 was higher than the U.S.

statutory rate of 21% primarily due to state and local taxes, geographic mix of income, and other nondeductible permanent differences, partially offset by the release of tax valuation allowances due to the gain from divestitures and tax credits.

Excluding the impact of amortization, restructuring, divestiture, valuation allowances and discrete tax items, the normalized effective tax rate for the three months ended June 30, 2025 was 20.5%.

The normalized effective tax rate for the three months ended June 30, 2024 was 23.6%, due primarily to excluding the gain from divestitures, restructuring costs, amortization of intangibles, valuation allowance release and other discrete tax adjustments.

CNDT Q2 2025 Form 10-Q

The effective tax rate for the six months ended June 30, 2025 was 3.1%, compared to 26.3% for the six months ended June 30, 2024.

The June 30, 2025 rate was lower than the U.S.

statutory rate of 21%, primarily due to valuation allowances and geographic mix of income.

The effective tax rate for the six months ended June 30, 2024 was higher than the U.S.

statutory rate of 21%, primarily due to state and local taxes, geographic mix of income, and other nondeductible permanent differences, partially offset by tax benefit from valuation allowances and audit settlement reserve releases.

Excluding the impact of amortization, restructuring, divestiture, reserves for the Direct response costs - cyber event, valuation allowances and discrete tax items, the normalized effective tax rate for the six months ended June 30, 2025 was 22.3%.

The normalized effective tax rate for the six months ended June 30, 2024 was 23.1%, primarily due to excluding the impact of the gain from divestitures, restructuring costs, amortization of intangible assets, litigation reserve releases, audit settlement reserve release, valuation allowance and other discrete tax items.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S.

The legislation contains certain provisions related to the full expensing of U.S.

research and development costs and other depreciable property.

The legislation also includes changes to the determination of the amount of U.S.

interest expense that is deductible for U.S.

tax purposes.

We are evaluating the full effects of the legislation on our estimated annual effective rate and cash tax position.

As the legislation was signed into law subsequent to June 30, 2025, no impacts are included in our operating results for the three and six months ended June 30, 2025.

In 2021, the Organization for Economic Cooperation and Development released model rules for a 15% global minimum tax, known as Pillar Two.

This alternative minimum tax is treated as a period cost beginning in 2024 and does not have a material impact on our financial results of operations for the current period.

We continue to monitor legislative developments, as well as additional guidance from countries that have enacted legislation.

Operations Review of Segment Revenue and Profit

Our financial performance is based on Segment Profit (Loss) and Segment Adjusted Earnings before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") for the following three segments:

• Commercial;

• Government;

• Transportation.

Divestitures include our BenefitWallet Portfolio and our Casualty Claims Solutions businesses (both of which were reclassified from our Commercial segment) and our Curbside Management and Public Safety Solutions businesses (which was reclassified from our Transportation segment).

Unallocated Costs includes IT infrastructure costs that are shared by multiple reportable segments, enterprise application costs and certain corporate overhead expenses not directly attributable or allocated to our reportable segments.

Results of our financial performance were:

CNDT Q2 2025 Form 10-Q

Three Months Ended

Commercial Government Transportation Divestitures Unallocated Costs Total

(in millions) Reportable Segments

Segment revenue $ 365 $ 238 $ 151 $ — $ — $ 754

Segment profit (loss) $ 7 $ 49 $ — $ — $ (67) $ (11)

Segment depreciation and amortization $ 20 $ 11 $ 8 $ — $ 9 $ 48

Adjusted EBITDA $ 27 $ 60 $ 8 $ — $ (58) $ 37

% of Total Revenue 48.4 % 31.6 % 20.0 % — % — % 100.0 %

Adjusted EBITDA Margin 7.4 % 25.2 % 5.3 % — % — % 4.9 %

Segment Revenue $ 388 $ 245 $ 141 $ 54 $ — $ 828

Segment profit (loss) $ 14 $ 38 $ (3) $ 8 $ (71) $ (14)

Segment depreciation and amortization $ 22 $ 11 $ 6 $ 3 $ 7 $ 49

Adjusted EBITDA $ 36 $ 49 $ 3 $ 11 $ (64) $ 35

% of Total Revenue 46.9 % 29.6 % 17.0 % 6.5 % — % 100.0 %

Adjusted EBITDA Margin 9.3 % 20.0 % 2.1 % 20.4 % — % 4.2 %

Six Months Ended

Commercial Government Transportation Divestitures Unallocated Costs Total

(in millions) Reportable Segments

Segment revenue $ 767 $ 454 $ 284 $ — $ — $ 1,505

Segment profit (loss) $ 23 $ 77 $ (2) $ — $ (145) $ (47)

Segment depreciation and amortization $ 44 $ 21 $ 16 $ — $ 15 $ 96

Direct response costs - cyber event $ — $ — $ — $ — $ 25 $ 25

Adjusted EBITDA $ 67 $ 98 $ 14 $ — $ (105) $ 74

% of Total Revenue 51.0 % 30.1 % 18.9 % — % — % 100.0 %

Adjusted EBITDA Margin 8.7 % 21.6 % 4.9 % — % — % 4.9 %

Segment Revenue $ 807 $ 503 $ 285 $ 154 $ — $ 1,749

Segment profit (loss) $ 33 $ 80 $ (9) $ 32 $ (143) $ (7)

Segment depreciation and amortization $ 48 $ 24 $ 13 $ 12 $ 14 $ 111

Adjusted EBITDA $ 81 $ 104 $ 4 $ 44 $ (129) $ 104

% of Total Revenue 46.1 % 28.8 % 16.3 % 8.8 % — % 100.0 %

Adjusted EBITDA Margin 10.0 % 20.7 % 1.4 % 20.4 % — % 5.9 %

CNDT Q2 2025 Form 10-Q

(in millions) Three Months Ended

June 30, Six Months Ended

Adjusted EBITDA and Segment Profit (Loss) Reconciliation to Income (Loss) Before Income Taxes 2025 2024 2025 2024

Adjusted EBITDA $ 37 $ 35 $ 74 $ 104

Reconciling items:

Segment depreciation and amortization (48) (49) (96) (111)

Direct response costs - cyber event — — (25) —

Segment Profit (Loss) $ (11) $ (14) $ (47) $ (7)

Reconciling items:

Amortization of acquired intangible assets (1) (2) (1) (3)

Restructuring and related costs (8) (8) (12) (17)

Interest expense (12) (19) (24) (46)

Loss on extinguishment of debt — (3) — (5)

Gain (loss) on divestitures and transaction costs, net (4) 347 (7) 508

Litigation (settlements) recoveries, net — (1) (2) (5)

Other income (expenses), net (2) — (1) 2

Income (Loss) Before Income Taxes $ (38) $ 300 $ (94) $ 427

Commercial Segment

Commercial revenue for the three and six months ended June 30, 2025 declined, compared to the prior year periods, driven by lower volumes, partially offset by new business ramp outpacing lost business.

Segment Profit and Adjusted EBITDA

Commercial segment profit and adjusted EBITDA for the three and six months ended June 30, 2025 decreased, compared to the prior year periods, primarily due to the revenue drivers noted above and higher fixed technology overhead, partially offset by cost efficiencies and the impact of lower depreciation due to the prior year write-off of internal use software and fully amortized assets.

Government Segment

Government revenue for the three months ended June 30, 2025 decreased, compared to the prior year period, primarily driven by the impacts associated with completing or extending several implementations.

However, new business has now started to outpace lost business in this segment.

Government revenue for the six months ended June 30, 2025 decreased, compared to the prior year period, primarily driven by the impact of lost business in our Government Healthcare business and some discrete negative impacts from the establishment of reserves for service level disputes in the first quarter of 2025, partially offset by new business ramp.

Segment Profit and Adjusted EBITDA

Government segment profit and adjusted EBITDA for the three months ended June 30, 2025 increased, compared to the prior year period, primarily due to cost efficiencies and lower expenses driven in part by our fraud prevention activities in our Government Services business resulting from the investments we have been making in AI.

These were partially offset by impact of the revenue drivers mentioned above.

Government segment profit and adjusted EBITDA for the six months ended June 30, 2025 decreased, compared to the prior year period, primarily due to lost business particularly in our Government Healthcare business partially offset by cost efficiencies and lower expenses driven by our fraud prevention activities in our Government Services business resulting from the investments we have been making in AI.

CNDT Q2 2025 Form 10-Q

Transportation Segment

Transportation revenue for the three months ended June 30, 2025 increased, compared to the prior year period, primarily due to a contract amendment with a Transit Solutions customer.

The amended agreement included additional consideration and a cumulative catch-up adjustment was recorded in connection with the amendment.

Revenue from our congestion charging back-office solution in a Road Usage Charging contract also contributed to the increase.

These factors were partially offset by the non-retained portion of a Road Usage Charging contract and lower activity across certain smaller projects.

Transportation revenue for the six months ended June 30, 2025 was flat, compared to the prior year period, primarily due to the items mentioned above being offset by a higher proportion of the non-retained portion of a Road Usage Charging contract.

Segment Profit and Adjusted EBITDA

Transportation segment profit and adjusted EBITDA for the three and six months ended June 30, 2025 increased due to the revenue drivers mentioned above and the absence of costs to transition the non-retained portion of a Road Usage Charging contract.

Revenue, Segment Profit and Adjusted EBITDA

The decrease in revenue, segment profit and Adjusted EBITDA for the three and six months ended June 30, 2025, as compared to the prior year periods, was due to the transfer of the BenefitWallet portfolio, and the sales of the Curbside Management and Public Safety Solutions businesses and Casualty Claims Solutions businesses in 2024.

Unallocated Costs

Unallocated Costs for the three months ended June 30, 2025 decreased, compared to the prior year period, primarily due cost efficiencies in our corporate functions.

Unallocated Costs for the six months ended June 30, 2025 also decreased, compared to the prior year period, primarily due to a $9 million recovery of legal costs from one of our insurance carriers related to the previously disclosed State of Texas matter that settled in February 2019, as well as cost efficiencies in our corporate functions.

However, these factors were partially offset by $25 million of direct response costs related to the previously disclosed January 2025 Cyber Event.

We use metrics to evaluate our business, determine the allocation of our resources, make decisions regarding corporate strategies and evaluate forward-looking projections and trends affecting our business.

We disclose these metrics to provide transparency in our performance trends.

We present certain key metrics, including Signings and Net ARR Activity below.

Signings are defined as estimated future revenues from contracts signed during the period, including renewals of existing contracts.

Total Contract Value ("TCV") is the estimated total contractual revenue related to signed contracts.

TCV signings is defined as estimated future revenues from contracts signed during the period, including renewals of existing contracts.

Due to the inconsistency of when existing contracts end, quarterly and yearly comparisons are not a good measure of renewal performance.

New business Annual Contract Value ("ACV") is calculated as TCV divided by the contract term, in months, multiplied by 12 for an annual measure.

CNDT Q2 2025 Form 10-Q

Signing information for the three and six months ended June 30, 2025 and 2024 is as follows:

Three Months Ended

June 30, 2025 vs.

($ in millions) 2025 2024 (3)

$ Change % Change

New business ACV $ 150 $ 141 $ 9 6 %

New business TCV $ 331 $ 273 $ 58 21 %

Renewals TCV 469 242 227 94 %

Total Signings $ 800 $ 515 $ 285 55 %

Annual recurring revenue signings (1)

$ 66 $ 61 $ 5 8 %

Non-recurring revenue signings (2)

$ 118 $ 109 $ 9 8 %

Six Months Ended

June 30, 2025 vs.

($ in millions) 2025 (3)

$ Change % Change

New business ACV $ 259 $ 237 $ 22 9 %

New business TCV $ 611 $ 416 $ 195 47 %

Renewals TCV 712 637 75 12 %

Total Signings $ 1,323 $ 1,053 $ 270 26 %

Annual recurring revenue signings (1)

$ 119 $ 92 $ 27 29 %

Non-recurring revenue signings (2)

$ 177 $ 180 $ (3) (2) %

(1) Recurring revenue signings are for new business contracts longer than one year.

(2) Non-recurring revenue signings are for contracts shorter than one year.

(3) Adjusted to remove new business signings of the BenefitWallet Portfolio, Curbside Management and Public Safety Solutions businesses and Casualty Claims Solutions business.

The total new business pipeline at the end of June 30, 2025 and 2024 was $3.3 billion and $3.1 billion, respectively.

Total new business pipeline is defined as total new business ACV pipeline of deals at or beyond the qualified prospect stage.

Beginning in the first quarter of 2025, we transitioned our measure of sales pipeline from TCV to ACV to align with our primary sales metric and have recast all prior period comparatives to reflect this change.

This extends past the next twelve-month period to include total pipeline, excluding the impact of divested business as required.

Net ARR Activity

Net ARR Activity is a metric that is defined as Projected Annual Recurring Revenue ("ARR") for contracts signed in the prior 12 months, less the annualized impact of any client losses, contractual volume and price changes, and other known impacts for which the Company was notified in that same time period, which could positively or negatively impact results.

The metric annualizes the net impact to revenue.

Timing of revenue impact varies and may not be realized within the forward 12-month timeframe.

The metric is for indicative purposes only.

This metric excludes non-recurring revenue signings.

This metric is not indicative of any specific 12-month timeframe.

The Net ARR activity metric for the trailing twelve months for each of the prior five quarters was as follows:

(in millions) Net ARR Activity metric

June 30, 2025 $ 63

March 31, 2025 116

December 31, 2024 92

September 30, 2024 46

June 30, 2024 (47)

CNDT Q2 2025 Form 10-Q

Capital Resources and Liquidity

As of June 30, 2025 and December 31, 2024, total cash and cash equivalents were $275 million and $366 million, respectively.

We also have a $550 million revolving line of credit for our various cash needs, of which $10 million was used for letters of credit.

The net amount available to be drawn upon under our revolving line of credit as of June 30, 2025, was $540 million.

As of June 30, 2025, our total principal debt outstanding was $661 million, of which $28 million was due within one year.

Refer to Note 7 – Debt in the Condensed Consolidated Financial Statements for additional debt information.

To provide financial flexibility and finance certain investments and projects, we may continue to utilize external financing arrangements.

However, we believe that our cash on hand, projected cash flow from operations, sound balance sheet and our revolving line of credit will continue to provide sufficient financial resources to meet our expected business obligations for at least the next twelve months.

Cash Flow Analysis

The following table summarizes our cash flows, as reported in our Condensed Consolidated Statement of Cash Flows in the accompanying Condensed Consolidated Financial Statements:

Six Months Ended June 30,

(in millions) 2025 2024 Better (Worse)

Net cash provided by (used in) operating activities $ (73) $ (78) $ 5

Net cash provided by (used in) investing activities $ 15 $ 553 (538)

Net cash provided by (used in) financing activities $ (30) $ (681) 651

Operating activities

The net decrease in cash used in operating activities of $5 million, compared to the prior year period, was primarily due to lower cash interest expense, improved accounts receivable Days Sales Outstanding and improved accounts payable Days Payable Outstanding.

These were partially offset by lower Adjusted EBITDA due to the divestitures and the absence of a $22 million United States federal tax refund related to the 2018 tax year received in the first quarter of 2024.

Investing activities

Investing cash flow decreased by $538 million mainly due to the proceeds received from the BenefitWallet Portfolio transfer and the Curbside Management and Public Safety Solutions ("Curbside") divestiture in the first half of 2024.

The 2025 period includes $50 million of cash received related to the non-interest bearing note from the Curbside divestiture.

Financing activities

The decrease in cash used in financing activities was due to the voluntary prepayment of $464 million of debt using the proceeds received from the BenefitWallet Portfolio transfer and the Curbside divestiture in the first half of 2024.

Additionally, the prior year included $168 million of treasury stock purchases under the program that was completed in September 2024, including $132 million purchased from Carl Icahn and certain of his affiliates.

CNDT Q2 2025 Form 10-Q

Sales of Accounts Receivable

We have entered into a factoring agreement in the normal course of business as part of our cash and liquidity management, to sell certain accounts receivable without recourse to a third-party financial institution.

The transactions under this agreement are treated as sales and are accounted for as reductions in accounts receivable because the agreement transfers effective control over, and risk related to, the receivables to the buyer.

Cash proceeds from this arrangement are included in cash flow from operating activities in the Condensed Consolidated Statements of Cash Flows.

The net impact from the sales of accounts receivable on net cash provided by (used in) operating activities for the six months ended June 30, 2025 and 2024 was $(11) million and $(16) million, respectively.

Material Cash Requirements from Contractual Obligations

We believe our balances of cash and cash equivalents, which totaled $275 million as of June 30, 2025, along with cash generated by operations and amounts available for borrowing under our revolving credit facility, will be sufficient to satisfy our cash requirements over the next 12 months and beyond.

At June 30, 2025, the Company’s material cash requirements include debt, leases and estimated purchase commitments.

See Part II, Item 7 – Management's Discussion and Analysis of Financial Condition and Results of Operation of our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information on our material cash requirements.

Critical Accounting Estimates and Policies

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.

The preparation of financial statements in conformity with U.S.

GAAP requires us to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying Condensed Consolidated Financial Statements and notes thereto.

There have been no significant changes during the six months ended June 30, 2025 to our critical accounting estimates and policies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Recent Accounting Changes

See Note 2 – Recent Accounting Pronouncements for information on accounting standards adopted during the current year, as well as recently issued accounting standards not yet required to be adopted and the expected impact of the adoption of these accounting standards.

Non-GAAP Financial Measures

We report our financial results in accordance with accounting principles generally accepted in the U.S.

In addition, within this Form 10-Q Part I Item 2 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 compared to 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.

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.

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.

CNDT Q2 2025 Form 10-Q

A reconciliation of the non-GAAP financial measures Adjusted EBITDA and EBITDA Margin to the most directly comparable financial measures calculated and presented in accordance with U.S.

GAAP is provided in the "Operations Review of Segment Revenue and Profit" section above.

Adjusted EBITDA and Adjusted 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 Margin is adjusted EBITDA divided by revenue.

Adjusted EBITDA represents income (loss) before interest, income taxes, depreciation and amortization and contract inducement amortization adjusted for the following items:

• 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.

This represents (gain) loss on divested businesses and transaction costs.

• Litigation settlements (recoveries), net.

This represents settlements or recoveries for various matters subject to litigation.

• Loss on extinguishment of debt.

This represents write-off of debt issuance costs related to prepayments of debt.

• Direct response costs - cyber event.

This represents costs related to investigating, remediating and responding to the cyber event that occurred in January 2025.

• Other charges (credits).

This includes Other (income) expenses, net on the Condensed Consolidated Statements of Income (Loss) and other adjustments.

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.

Management cautions that amounts presented in accordance with Conduent's definition of adjusted EBITDA and adjusted EBITDA Margin may not be comparable to similar measures disclosed by other companies because not all companies calculate adjusted EBITDA and adjusted EBITDA Margin in the same manner.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements