CONDUENT Inc 10-Q

ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED) CONDUENT INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED) Three Months Ended March 31, (in millions, except per share data) 2026 2025 Revenue $ 723 $ 751 Operating Costs and Expenses Cost of services (excluding depreciation and amortization) 587 618 Selling, general and administrative (excluding depreciation and amortization) 91 120 Research and development (excluding depreciation and amortization) 1 1 Depreciation and amortization 47 48 Restructuring and related costs 8 4 Interest expense 12 12 (Gain) loss on divestitures and transaction costs, net 3 3 Litigation settlements (recoveries), net — 2 Other (income) expenses, net 1 ( 1 ) Total Operating Costs and Expenses 750 807 Income (Loss) Before Income Taxes ( 27 ) ( 56 ) Income tax expense (benefit) 6 ( 5 ) Net Income (Loss) $ ( 33 ) $ ( 51 ) Net Income (Loss) per Share: Basic $ ( 0.23 ) $ ( 0.33 ) Diluted $ ( 0.23 ) $ ( 0.33 ) The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. CNDT Q1 2026 Form 10-Q 3 Table of Contents CONDUENT INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) Three Months Ended March 31, (in millions) 2026 2025 Net Income (Loss) $ ( 33 ) $ ( 51 ) Other Comprehensive Income (Loss), Net (1) Currency translation adjustments, net ( 7 ) 9 Unrecognized gains (losses), net ( 2 ) 2 Other Comprehensive Income (Loss), Net ( 9 ) 11 Comprehensive Income (Loss), Net $ ( 42 ) $ ( 40 ) __________ (1) All amounts are net of tax. Tax effects were immaterial. The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. CNDT Q1 2026 Form 10-Q 4 Table of Contents CONDUENT INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in millions, except share data in thousands) March 31, 2026 December 31, 2025 Assets Cash and cash equivalents $ 228 $ 233 Accounts receivable, net 499 500 Contract assets 119 123 Other current assets 242 213 Total current assets 1,088 1,069 Land, buildings and equipment, net 173 181 Operating lease right-of-use assets 141 136 Deferred contract costs, net 123 128 Goodwill 614 617 Other long-term assets 254 266 Total Assets $ 2,393 $ 2,397 Liabilities and Equity Current portion of long-term debt $ 23 $ 22 Accounts payable 133 142 Accrued compensation and benefits costs 178 173 Contract liabilities 74 74 Other current liabilities 277 270 Total current liabilities 685 681 Long-term debt 698 665 Deferred taxes 18 19 Operating lease liabilities 108 102 Other long-term liabilities 101 103 Total Liabilities 1,610 1,570 Contingencies (See Note 11) Series A convertible preferred stock 142 142 Common stock 2 2 Treasury stock, at cost ( 235 ) ( 235 ) Additional paid-in capital 3,968 3,968 Retained earnings (deficit) ( 2,648 ) ( 2,613 ) Accumulated other comprehensive loss ( 446 ) ( 437 ) Total Equity 641 685 Total Liabilities and Equity $ 2,393 $ 2,397 Shares of common stock issued and outstanding 155,097 154,709 Shares of series A convertible preferred stock issued and outstanding 120 120 Shares of common stock held in treasury 70,097 70,097 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. CNDT Q1 2026 Form 10-Q 5 Table of Contents CONDUENT INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31, (in millions) 2026 2025 Cash Flows from Operating Activities: Net income (loss) $ ( 33 ) $ ( 51 ) Adjustments required to reconcile net income (loss) to cash flows from operating activities: Depreciation and amortization 47 48 Contract inducement amortization 1 — Deferred income taxes ( 2 ) ( 8 ) Stock-based compensation — 3 Changes in operating assets and liabilities: Accounts receivable ( 1 ) 16 Other current and long-term assets ( 26 ) ( 45 ) Accounts payable and accrued compensation and benefits costs ( 1 ) ( 6 ) Other current and long-term liabilities 2 ( 13 ) Net change in income tax assets and liabilities 5 ( 2 ) Net cash provided by (used in) operating activities ( 8 ) ( 58 ) Cash Flows from Investing Activities: Cost of additions to land, buildings and equipment ( 9 ) ( 14 ) Cost of additions to internal use software ( 5 ) ( 4 ) Proceeds from divestitures — 1 Net cash provided by (used in) investing activities ( 14 ) ( 17 ) Cash Flows from Financing Activities: Proceeds from revolving credit facility 60 50 Payments of revolving credit facility ( 25 ) ( 50 ) Payments of debt ( 5 ) ( 8 ) Dividends paid on preferred stock — ( 2 ) Net cash provided by (used in) financing activities 30 ( 10 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash — 1 Increase (decrease) in cash, cash equivalents and restricted cash 8 ( 84 ) Cash, Cash Equivalents and Restricted Cash at Beginning of Period 243 377 Cash, Cash Equivalents and Restricted Cash at End of period (1) $ 251 $ 293 ___________ (1) Includes $ 23 million and $ 16 million of restricted cash as of March 31, 2026 and 2025, 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. CNDT Q1 2026 Form 10-Q 6 Table of Contents CONDUENT INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) Three Months Ended March 31, 2026 (in millions) Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings (Deficit) AOCL (1) Non-controlling Interest Shareholders' Equity Balance at December 31, 2025 $ 2 $ ( 235 ) $ 3,968 $ ( 2,613 ) $ ( 437 ) $ — $ 685 Dividends - preferred stock, $ 20 /share — — — ( 2 ) — — ( 2 ) Stock incentive plans, net — — — — — — — Treasury stock purchases — — — — — — — Buyback of noncontrolling interest — — — — — — — Comprehensive Income (Loss): Net Income (Loss) — — — ( 33 ) — — ( 33 ) Other comprehensive income (loss), net — — — — ( 9 ) — ( 9 ) Total Comprehensive Income (Loss), Net — — — ( 33 ) ( 9 ) — ( 42 ) Balance at March 31, 2026 $ 2 $ ( 235 ) $ 3,968 $ ( 2,648 ) $ ( 446 ) $ — $ 641 Three Months Ended March 31, 2025 (in millions) Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings (Deficit) AOCL (1) Non-controlling Interest Shareholders' Equity Balance at December 31, 2024 $ 2 $ ( 210 ) $ 3,952 $ ( 2,433 ) $ ( 472 ) $ 4 $ 843 Dividends - preferred stock, $ 20 /share — — — ( 2 ) — — ( 2 ) Stock incentive plans, net — — 3 — — — 3 Treasury stock purchases — — — — — — — Comprehensive Income (Loss): Net Income (Loss) — — — ( 51 ) — — ( 51 ) Other comprehensive income (loss), net — — — — 11 — 11 Total Comprehensive Income (Loss), Net — — — ( 51 ) 11 — ( 40 ) Balance at March 31, 2025 $ 2 $ ( 210 ) $ 3,955 $ ( 2,486 ) $ ( 461 ) $ 4 $ 804 ___________ (1) AOCL - Accumulated other comprehensive loss. Refer to Note 10 – Accumulated Other Comprehensive Loss for the components of AOCL. The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. CNDT Q1 2026 Form 10-Q 7 Table of Contents Note 1 – Basis of Presentation References herein to “we,” “us,” “our,” the “Company” and “Conduent” refer to Conduent Incorporated and its consolidated subsidiaries unless the context suggests otherwise. Description of Business Conduent Incorporated is a New York corporation, organized in 2016. 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 ("AI"), machine learning, automation and advanced analytics to deliver mission-critical solutions. Through a dedicated global team of approximately 48,000 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. Basis of Presentation The unaudited interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the "SEC"). Accordingly, they do not include all the information and notes required by U.S. GAAP for complete financial statements. The December 31, 2025 Condensed Consolidated Balance Sheet was derived from the audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. Certain reclassifications have been made to prior year's amounts to conform to the current year presentation. Intercompany balances and transactions have been eliminated. In the opinion of management, all adjustments necessary for a fair statement of the financial position, results of operations and cash flows have been made. These adjustments consist of normal recurring items. The interim results of operations are not necessarily indicative of the results of the full year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Use of Estimates Preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, the Company evaluates its estimates, including those related to fair values of financial instruments, goodwill and intangible assets, income taxes and contingent liabilities, among others. The Company bases its estimates on assumptions, both historical and forward looking, that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Summary of Significant Accounting Policies The Company's significant accounting policies are described in Note 1 – Basis of Presentation and Summary of Significant Accounting Policies in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. During 2026, there have been no changes to the Company's significant accounting policies as described therein. Note 2 – Recent Accounting Pronouncements New Accounting Standards Adopted The Company has not adopted any new accounting standards in 2026. CNDT Q1 2026 Form 10-Q 8 Table of Contents New Accounting Standards To Be Adopted Disaggregation of Income Statement Expenses: In November 2024, the Financial Accounting Standards Board ("FASB") issued final guidance designed to enhance financial reporting by requiring public business entities to disclose additional details regarding specific expense categories in the notes to the financial statements for both interim and annual periods. The new guidance is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The Company is not early adopting this guidance. As the guidance is disclosure related, adoption will not have any impact on the Company's Consolidated Financial Statements. 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 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. Three Months Ended March 31, (in millions) 2026 2025 Commercial: Customer Experience Management $ 119 $ 144 BPaaS 115 117 Integrated Digital Solutions 127 141 Total Commercial 361 402 Government: Government Healthcare Solutions 137 126 Government Services Solutions 89 90 Total Government 226 216 Transportation: Road Usage Charging & Management Solutions 53 65 Transit Solutions 83 68 Total Transportation 136 133 Total Consolidated Revenue $ 723 $ 751 Timing of Revenue Recognition: Point in time $ 26 $ 23 Over time 697 728 Total Revenue $ 723 $ 751 CNDT Q1 2026 Form 10-Q 9 Table of Contents Contract Balances The Company receives payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract assets are the Company’s rights to consideration for services provided when the right is conditioned on something other than passage of time (for example, meeting a milestone for the right to bill under the cost-to-cost measure of progress). Contract assets are transferred to Accounts receivable, net when the rights to consideration become unconditional. Contract liabilities include 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 three months ended March 31, 2026 and 2025: (in millions) 2026 2025 Beginning balance $ 128 $ 135 Additional contract assets recognized 36 24 Billed and transferred to Accounts receivable and other ( 38 ) ( 22 ) Ending balance (1) $ 126 $ 137 ___ (1) Of which $ 7 million and $ 6 million are included in Other long-term assets as of March 31, 2026 and 2025, respectively. The following table provides information about significant movements in contract liabilities balances (current and long-term) for the three months ended March 31, 2026 and 2025: (in millions) 2026 2025 Beginning balance $ 143 $ 155 Deferral of income 41 39 Revenue recognized related to deferral of income (1) ( 43 ) ( 63 ) Ending balance (2) $ 141 $ 131 ___ (1) Of which $ 37 million and $ 52 million were recognized during the three months ended March 31, 2026 and 2025, respectively, that related to the Company's contract liabilities as of December 31, 2025 and 2024, respectively. (2) Of which $ 68 million and $ 49 million are included in Other long-term liabilities as of March 31, 2026 and 2025, 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 March 31, 2026 was approximately $ 1.2 billion. The Company expects to recognize approximately 75 % of this revenue over the next two years and the remainder thereafter. Note 4 – Segment Reporting The Company's reportable segments correspond to how it organizes and manages the business, as defined by the Company's Chief Executive Officer, who is also its Chief Operating Decision Maker ("CODM"), and are aligned to the industries in which the Company's clients operate. The Company's segments involve the delivery of business process services and include service arrangements where it manages a customer's business activity or process. The Company's CODM evaluates the Company's financial performance based on Segment profit (loss) for its three reportable segments - Commercial, Government and Transportation. 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. 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: CNDT Q1 2026 Form 10-Q 10 Table of Contents • Commercial: The Commercial segment provides business process services that span its 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, the Company operates on its clients’ behalf to deliver mission-critical solutions and services to reduce costs, improve efficiencies and enable revenue growth for the Company's clients and deliver better experiences for their consumers and employees. • Government: The Government segment provides government-centric services and solutions to U.S. federal, state, local and foreign governments for public assistance, healthcare programs administration, transaction processing, eligibility and enrollment processing, payment services and case management. In this segment, the Company helps governments respond to changing rules for eligibility and keep pace with increasing citizen expectations, modernize legacy technology systems, combat benefits fraud and adapt to an evolving regulatory environment. • Transportation: The 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, the Company's solutions help reduce congestion and greenhouse emissions, while creating seamless travel experiences for consumers throughout transportation ecosystems. Selected financial information for the Company's segments is as follows: Three Months Ended March 31, (in millions) Commercial Government Transportation Total (1) 2026 Segment revenue $ 361 $ 226 $ 136 $ 723 Expenses Wages and benefits $ 236 $ 87 $ 63 $ 386 Services and supplies 48 63 63 174 Rent lease and maintenance expense 34 15 12 61 Other operating expense 1 2 2 5 Depreciation and amortization expense 20 12 7 39 Segment expenses $ 339 $ 179 $ 147 $ 665 Segment profit (loss) $ 22 $ 47 $ ( 11 ) $ 58 2025 Segment revenue $ 402 $ 216 $ 133 $ 751 Expenses (2) Wages and benefits $ 270 $ 95 $ 60 $ 425 Services and supplies 54 66 52 172 Rent lease and maintenance expense 38 16 13 67 Other operating expense — 1 2 3 Depreciation and amortization expense 24 10 8 42 Segment expenses $ 386 $ 188 $ 135 $ 709 Segment profit (loss) $ 16 $ 28 $ ( 2 ) $ 42 __________ (1) Total excludes Unallocated Costs. (2) In the first quarter of 2026, the Company revised its methodology for allocating certain technology costs to the expense categories within its reportable segments. The prior year's expenses have been reclassified to conform to the current year's methodology. This update had no impact on total segment expenses by reportable segment or on total expenses by expense category. Other operating expense shown above is primarily comprised of third-party legal fees and other miscellaneous expenses. CNDT Q1 2026 Form 10-Q 11 Table of Contents The following is a reconciliation of Segment profit (loss) to Income (loss) before income taxes: Three Months Ended March 31, (in millions) 2026 2025 Segment Profit (Loss) $ 58 $ 42 Reconciling items: Unallocated costs (1) ( 60 ) ( 78 ) Amortization of acquired intangible assets ( 1 ) — Restructuring and related costs ( 8 ) ( 4 ) Interest expense ( 12 ) ( 12 ) Gain (loss) on divestitures and transaction costs, net ( 3 ) ( 3 ) Litigation (settlements) recoveries, net — ( 2 ) Other income (expenses), net ( 1 ) 1 Income (Loss) Before Income Taxes $ ( 27 ) $ ( 56 ) (1) 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 months ended March 31, 2026 period are $ 4 million of former CEO separation costs and a benefit related to a stock compensation plan change as described in Note 12 – Preferred Stock and Common Stock. Included in the three months ended March 31, 2025 period are $ 25 million of Direct response costs related to the January 2025 Cyber Event as well as a $ 9 million insurance recovery related to the 2019 Texas Matter. Refer to Note 3 – Revenue for additional information on disaggregated revenues of the reportable segments. Note 5 – Restructuring Programs and Related Costs The Company engages in a series of restructuring programs related to downsizing its employee base, exiting certain activities, outsourcing certain internal functions and engaging in other actions designed to reduce its cost structure and improve productivity. 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 asset impairments and other related costs. 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. Costs associated with restructuring are generally recognized when it has been determined that a liability has been incurred, upon communication to the affected employees or exit from the leased facility. A summary of the Company's restructuring program activity in the table below for the three months ended March 31, 2026 and 2025 includes: • Severance and related costs - employee termination costs, which include severance, retraining and other related contractual benefits; • Contract termination and other costs - incremental, non-recurring costs related to professional support services associated with the implementation of certain cost reductions and strategic transformation programs and non-lease costs associated with exited lease facilities; and • Asset impairments - non-cash impairments of operating lease right-of-use ("ROU") assets and associated leasehold improvements related to the reduction of the Company's real estate footprint. (in millions) Severance and Related Costs Contract Termination and Other Asset Impairments Total Accrued Balance at December 31, 2025 $ 5 $ 3 $ — $ 8 Provision 6 2 — 8 Changes in estimates — — — — Total Net Current Period Charges (1) 6 2 — 8 Charges against reserve and currency ( 5 ) ( 3 ) — ( 8 ) Accrued Balance at March 31, 2026 $ 6 $ 2 $ — $ 8 CNDT Q1 2026 Form 10-Q 12 Table of Contents (in millions) Severance and Related Costs Contract Termination and Other Asset Impairments Total Accrued Balance at December 31, 2024 $ 13 $ 2 $ — $ 15 Provision 1 1 2 4 Changes in estimates — — — — Total Net Current Period Charges (1) 1 1 2 4 Charges against reserve and currency ( 8 ) ( 1 ) ( 2 ) ( 11 ) Accrued Balance at March 31, 2025 $ 6 $ 2 $ — $ 8 __________ (1) Represents amounts recognized within the Condensed Consolidated Statements of Income (Loss) for the periods shown. No restructuring and related costs are allocated to the segments. Note 6 – Debt Long-term debt was as follows: (in millions) March 31, 2026 December 31, 2025 Revolving credit facility $ 144 $ 109 Senior notes due 2029 520 520 Finance lease obligations 46 49 Other 15 13 Principal debt balance 725 691 Debt issuance costs and unamortized discounts ( 4 ) ( 4 ) Less: current maturities ( 23 ) ( 22 ) Total Long-term Debt $ 698 $ 665 As of March 31, 2026, the Company had $ 144 million outstanding borrowings under its Revolving Credit Facility. The Company utilized $ 23 million of the Revolving Credit Facility to issue letters of credit as of March 31, 2026. Additionally, the Company utilized $ 76 million of the Performance Letter of Credit Facility to issue performance letters of credit as of March 31, 2026. 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 $ 190 million and $ 17 million, respectively, as of March 31, 2026. At March 31, 2026, the Company was in compliance with all debt covenants related to the borrowings in the table above. Note 7 – Financial Instruments The Company is a global company that is exposed to foreign currency exchange rate fluctuations in the normal course of its business. 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 March 31, 2026 and December 31, 2025, the Company had outstanding forward exchange contracts with gross notional values of $ 178 million and $ 163 million, respectively. At March 31, 2026, approximately 75 % of these contracts mature within three months, 10 % in three to six months, 12 % 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. Refer to Note 8 – Fair Value of Financial Assets and Liabilities for additional information regarding the fair value of the Company's foreign exchange forward contracts. CNDT Q1 2026 Form 10-Q 13 Table of Contents Note 8 – Fair Value of Financial Assets and Liabilities Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP established a hierarchy framework to classify the fair value based on the observability of significant inputs to the measurement. The levels of the fair value hierarchy are as follows: Level 1: Fair value is determined using an unadjusted quoted price in an active market for identical assets or liabilities. Level 2: Fair value is estimated using inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly. Level 3: 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 The following table represents assets and liabilities measured at fair value on a recurring basis. The basis for the measurement at fair value in all cases was Level 2. (in millions) March 31, 2026 December 31, 2025 Assets: Foreign exchange contracts - forward $ — $ — Total Assets $ — $ — Liabilities: Foreign exchange contracts - forward $ ( 4 ) $ ( 2 ) Total Liabilities $ ( 4 ) $ ( 2 ) Summary of Other Financial Assets and Liabilities The estimated fair values of other financial assets and liabilities were as follows: March 31, 2026 December 31, 2025 (in millions) Carrying Amount Fair Value Carrying Amount Fair Value Liabilities: Long-term debt $ 698 $ 523 $ 665 $ 592 The fair value amounts for Cash and cash equivalents, Restricted cash, Accounts receivable, net and Short-term debt approximate carrying amounts due to the short-term maturities of these instruments. The fair value of Long-term debt was estimated using quoted market prices for identical or similar instruments (Level 2 inputs). Note 9 – Employee Benefit Plans The Company has post-retirement pension, savings and investment plans in several countries, including the U.S., India and the Philippines. In many instances, employees participating in defined benefit pension plans that have been amended to freeze future service accruals were transitioned to an enhanced defined contribution plan. In these plans, employees are permitted to contribute a portion of their salaries and bonuses to the plans. 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 March 31, 2026 and 2025, 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 Q1 2026 Form 10-Q 14 Table of Contents Note 10 – Accumulated Other Comprehensive Loss ("AOCL") Below are the balances and changes in AOCL (1) : (in millions) Currency Translation Adjustments Gains (Losses) on Cash Flow Hedges Defined Benefit Pension Items Total Balance at December 31, 2025 $ ( 444 ) $ — $ 7 $ ( 437 ) Other comprehensive income (loss) ( 7 ) ( 2 ) — ( 9 ) Balance at March 31, 2026 $ ( 451 ) $ ( 2 ) $ 7 $ ( 446 ) (in millions) Currency Translation Adjustments Gains (Losses) on Cash Flow Hedges Defined Benefit Pension Items Total Balance at December 31, 2024 $ ( 478 ) $ 1 $ 5 $ ( 472 ) Other comprehensive income (loss) 9 2 — 11 Balance at March 31, 2025 $ ( 469 ) $ 3 $ 5 $ ( 461 ) __________ (1) All amounts are net of tax. Tax effects were immaterial. Note 11 – Contingencies and Litigation As more fully discussed below, the Company is involved in a variety of claims, lawsuits, investigations and proceedings concerning a variety of matters, including: governmental entity contracting, servicing and procurement law; intellectual property law; employment law; commercial and contracts law; the Employee Retirement Income Security Act ("ERISA"); and other laws and regulations. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The Company assesses its potential liability by analyzing its litigation and regulatory matters using available information. The Company develops its view on estimated losses in consultation with outside counsel handling its defense in these matters, which involves an analysis of potential results, assuming a combination of litigation and settlement strategies. 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 March 31, 2026. Litigation is inherently unpredictable, and it is not possible to predict the ultimate outcome of these matters and such outcome in any such matters could be more than any amounts accrued and could be material to the Company's results of operations, cash flows or financial position in any reporting period. Additionally, guarantees, indemnifications and claims arise during the ordinary course of business from relationships with suppliers, customers and non-consolidated affiliates when the Company undertakes an obligation to guarantee the performance of others if specified triggering events occur. Nonperformance under a contract could trigger an obligation of the Company. These potential claims include actions based upon alleged exposures to products, real estate, intellectual property such as patents, environmental matters and other indemnifications. The ultimate effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to the outcome of these claims. 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. CNDT Q1 2026 Form 10-Q 15 Table of Contents Litigation Against the Company Skyview Capital LLC and Continuum Global Solutions, LLC v. Conduent Business Services, LLC: On February 3, 2020, plaintiffs Skyview Capital LLC and Continuum Global Solutions LLC (collectively "Skyview") filed a lawsuit in the Supreme Court of the State of New York, County of New York against Conduent Business Services, LLC ("CBS"), a wholly-owned subsidiary of the Company. The lawsuit relates to the sale of a portion of CBS's select standalone customer care call center business to plaintiffs, which sale closed in February 2019. Under the terms of the sale agreement, CBS received approximately $ 23 million of promissory notes from plaintiffs (the "Notes"). The lawsuit alleges various causes of action in connection with the acquisition, including: indemnification for breaches of representations and warranties; indemnification for breaches of covenants; and fraud. Plaintiffs alleged that their obligation to mitigate damages and their contractual right of set-off permitted them to withhold and deduct from any amounts that are owed to CBS under the Notes, and plaintiffs sought a judgment that they had no obligation to pay the Notes. On August 20, 2020, CBS filed counterclaims against Skyview seeking the outstanding balance on the Notes, the amounts owed for operating certain Jamaica-based call centers on plaintiffs' behalf pending closing (the "Jamaica Deferred Closing"), other obligations under a transition services agreement and its amendments (the "TSAs"), and late rent payment obligations. CBS also moved to dismiss Skyview’s claims in 2020. In May 2021, the court denied the motion to dismiss and allowed Skyview's claims to proceed. Fact and expert discovery concluded and the parties filed summary judgment motions in July 2023. On December 8, 2023, the court rendered its decision on the parties’ cross-motions for summary judgment, finding there were certain material issues of fact that required trial on Skyview's fraud claim, and also entering partial summary judgment for each side. On January 5, 2024, CBS filed a notice of appeal with the New York Supreme Court, Appellate Division, First Department ("Appellate Division") with respect to the portion of the ruling that did not grant CBS's summary judgment motion in its entirety and that granted certain limited relief in favor of Skyview. On January 23, 2024, Skyview filed its own notice of appeal, challenging the decision granting summary judgment on certain of CBS’s counterclaims. In July 2024, Skyview informed CBS of its intention to sell a portion of its call center business. 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. On September 24, 2024, Skyview and the buyer announced a signed and binding asset purchase agreement. Following regulatory review, the transaction closed in December 2024, at which point Skyview paid CBS approximately $ 33 million, representing all outstanding principal and interest due on the Notes and reimbursement of certain litigation costs. As a result, CBS dismissed its two counterclaims related to the Notes. In May 2025, the Appellate Division heard arguments on the parties’ 2024 cross-appeals and issued a ruling in June 2025, finding predominantly in CBS’s favor. Specifically, the Appellate Division reversed the trial court’s denial of summary judgment as to Skyview’s fraud claim and dismissed such claim in its entirety (along with Skyview’s request for punitive damages). In addition, the Appellate Division reversed the grant of summary judgment to Skyview on its breach of contract claim, finding there to be issues of fact for trial. With respect to CBS’s counterclaims, the Appellate Division (i) affirmed the grant of summary judgment on the counterclaims concerning the TSAs and late rent payment amounts and (ii) instructed the trial court to adjudicate the final amount owed by Skyview to CBS on the Jamaica Deferred Closing counterclaim. 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 contractual indemnification limit set forth in the sale agreement). The trial court accordingly entered judgment of approximately $ 24 million 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 outstanding judgment and is continuing to pursue the amount owed by Skyview to CBS on the Jamaica Deferred Closing counterclaim. No trial date has yet been set. CBS continues to deny all of plaintiffs' allegations, believes that it has strong defenses to all 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 Q1 2026 Form 10-Q 16 Table of Contents January 2025 Cyber Event The Company and CBS (collectively, “Conduent”) are parties to several lawsuits in the U.S. asserted by or on behalf of individuals who allegedly received a notification letter that their personal information may have been affected by the January 2025 Cyber Event. Most of these lawsuits have been consolidated into one single action in the U.S. District Court, District of New Jersey ( In re: Conduent Business Services Data Breach Litigation ). Conduent continues to work on consolidating these lawsuits and responding accordingly. The consolidated complaint was filed by plaintiffs on March 18, 2026, with a response from defendants due in the second or third quarter of 2026. Conduent denies plaintiffs' allegations, believes that it has strong defenses to plaintiffs’ claims, and will continue to defend the litigations vigorously. The Company has also been responding to several subpoenas, information requests, and investigations from certain governmental agencies and other stakeholders. The Company is not able to determine or predict the ultimate outcome or duration of these proceedings or reasonably provide an estimate or range of estimates of the possible outcome or loss, if any. 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 March 31, 2026, the Company had $ 578 million of outstanding surety bonds issued to secure its performance of contractual obligations with its clients and $ 123 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. Note 12 – Preferred Stock and Common Stock Series A Preferred Stock In December 2016, the Company issued 120,000 shares of Series A convertible perpetual preferred stock with an aggregate liquidation preference of $ 120 million and an initial fair value of $ 142 million. The convertible preferred stock earns quarterly cash dividends at a rate of 8 % per year ($ 9.6 million per year). 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. Common Stock - Stock Compensation Plan Change In 2025, for certain senior executives, the Company changed its Annual Performance Incentive Plan (“APIP”) cash incentive by awarding a portion of the incentive in Performance Stock Units (“PSUs”). In March 2026, the Compensation Committee of the Board of Directors used its discretion under the APIP plan documents to reduce the aggregate 2025 APIP pool and cancel the issuance of these PSUs. The impact of this change reduced compensation expense in the first quarter of 2026 by approximately $ 3 million and reduced PSUs outstanding by approximately 3.3 million. CNDT Q1 2026 Form 10-Q 17 Table of Contents Note 13 – Earnings (Loss) per Share The Company did not declare any common stock dividends in the periods presented. The following table sets forth the computation of basic and diluted earnings (loss) per share of common stock: Three Months Ended March 31, (in millions, except per share data in whole dollars and shares in thousands) 2026 2025 Basic Net Earnings (Loss) per Share: Net Income (Loss) $ ( 33 ) $ ( 51 ) Dividend - Preferred Stock ( 2 ) ( 2 ) Adjusted Net Income (Loss) Available to Common Shareholders - Basic $ ( 35 ) $ ( 53 ) Diluted Net Earnings (Loss) per Share: Net Income (Loss) $ ( 33 ) $ ( 51 ) Dividend - Preferred Stock ( 2 ) ( 2 ) Adjusted Net Income (Loss) Available to Common Shareholders - Diluted $ ( 35 ) $ ( 53 ) Weighted Average Common Shares Outstanding - Basic 154,903 161,830 Common Shares Issuable With Respect To: Restricted Stock and Performance Units / Shares — — 8% Convertible Preferred Stock — — Weighted Average Common Shares Outstanding - Diluted 154,903 161,830 Net Earnings (Loss) per Share: Basic $ ( 0.23 ) $ ( 0.33 ) Diluted $ ( 0.23 ) $ ( 0.33 ) The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive (shares in thousands): Restricted stock and performance shares/units 13,224 7,782 Convertible preferred stock 5,393 5,393 Total Anti-Dilutive and Contingently Issuable Securities 18,617 13,175 CNDT Q1 2026 Form 10-Q 18 Table of Contents Note 14 – Supplementary Financial Information The components of Other assets and Other liabilities were as follows: (in millions) March 31, 2026 December 31, 2025 Other Current Assets Prepaid expenses $ 103 $ 87 Income taxes receivable 12 12 Value-added tax receivable 8 8 Restricted cash 23 10 Net receivables from buyers of divested businesses 1 1 Other 95 95 Total Other Current Assets $ 242 $ 213 Other Current Liabilities Accrued liabilities to vendors $ 141 $ 147 Current operating lease liabilities 50 52 Restructuring liabilities 8 8 Income tax payable 7 5 Other taxes payable 13 17 Accrued interest 13 5 Direct response costs - cyber event liabilities — 8 Due to factoring counterparty 22 9 Other 23 19 Total Other Current Liabilities $ 277 $ 270 Other Long-term Assets Internal use software, net $ 89 $ 92 Intangible assets, net 11 12 Product software, net 57 65 Deferred tax assets 25 24 Other 72 73 Total Other Long-term Assets $ 254 $ 266 Other Long-term Liabilities Income tax liabilities 14 14 Contract liabilities 68 69 Other 19 20 Total Other Long-term Liabilities $ 101 $ 103 CNDT Q1 2026 Form 10-Q 19 Table of Contents