What changed in this filing

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Item 1. Financial Statements

2026-08-10 compared with 2026-05-11 · 263 added, 92 removed, 439 unchanged (45% of the section changed)

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions, except per share data) 2026 2025 2026 2025

11 unchanged sentences

Total Operating Costs and Expenses 588 646 1,194 1,326

Income (Loss) Before Income Taxes ( 27 ) ( 56 )

Income tax expense (benefit) 6 ( 5 )

Income (Loss) Before Income Taxes from Continuing Operations ( 57 ) ( 43 ) ( 76 ) ( 105 )

Income tax expense (benefit) from continuing operations 12 ( 1 ) 15 ( 7 )

Net Income (Loss) from Continuing Operations ( 69 ) ( 42 ) ( 91 ) ( 98 )

Income (Loss) from Discontinued Operations, Net of Tax ( 47 ) 2 ( 58 ) 7

Net Income (Loss) $ ( 116 ) $ ( 40 ) $ ( 149 ) $ ( 91 )

Net Income (Loss) per Share:

Basic $ ( 0.23 ) $ ( 0.33 )

Diluted $ ( 0.23 ) $ ( 0.33 )

Continuing operations $ ( 0.46 ) $ ( 0.27 ) $ ( 0.62 ) $ ( 0.63 )

Discontinued operations ( 0.30 ) 0.01 ( 0.37 ) 0.04

Basic net income (loss) per share $ ( 0.76 ) $ ( 0.26 ) $ ( 0.99 ) $ ( 0.59 )

Continuing operations $ ( 0.46 ) $ ( 0.27 ) $ ( 0.62 ) $ ( 0.63 )

Discontinued operations ( 0.30 ) 0.01 ( 0.37 ) 0.04

Diluted net income (loss) per share $ ( 0.76 ) $ ( 0.26 ) $ ( 0.99 ) $ ( 0.59 )

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

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions) 2026 2025 2026 2025

11 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except share data in thousands) March 31, 2026 December 31, 2025

(in millions, except share data in thousands) June 30, 2026 December 31, 2025

Cash and cash equivalents $ 228 $ 233

2 unchanged sentences

Other current assets 136 125

Assets of discontinued operations held for sale 386 452

Total current assets 1,097 1,204

11 unchanged sentences

Other current liabilities 212 201

Liabilities of discontinued operations held for sale 206 217

Total current liabilities 707 728

20 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended

Six Months Ended

(in millions) 2026 2025

5 unchanged sentences

Deferred income taxes — ( 7 )

Amortization of debt financing costs 1 1

(Gain) loss on divestitures and sales of fixed assets, net 30 2

Stock-based compensation 2 8

13 unchanged sentences

Proceeds from revolving credit facility 60 125

Proceeds from the issuance of debt — 4

Payments of revolving credit facility ( 25 ) ( 125 )

Payments of debt ( 10 ) ( 15 )

Treasury stock purchases — ( 7 )

Excise tax payment on treasury stock purchases — ( 2 )

Dividends paid on preferred stock ( 2 ) ( 5 )

(Repurchase of) contribution from noncontrolling interest — ( 5 )

Net cash provided by (used in) financing activities 23 ( 30 )

3 unchanged sentences

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

(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.

(1) Includes $ 12 million and $ 19 million of restricted cash as of June 30, 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.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

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

Non-controlling Interest Shareholders'

Balance at December 31, 2025 $ 2 $ ( 235 ) $ 3,968 $ ( 2,613 ) $ ( 437 ) $ — $ 685

Balance at March 31, 2026 $ 2 $ ( 235 ) $ 3,968 $ ( 2,648 ) $ ( 446 ) $ — $ 641

Dividends - preferred stock, $ 20 /share

7 unchanged sentences

Total Comprehensive Income (Loss), Net — — — ( 116 ) 3 — ( 113 )

Balance at June 30, 2026 $ 2 $ ( 235 ) $ 3,969 $ ( 2,767 ) $ ( 443 ) $ — $ 526

Three Months Ended June 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

Three Months Ended March 31, 2025

Dividends - preferred stock, $ 20 /share

— — — ( 3 ) — — ( 3 )

Stock incentive plans, net — — 5 — — — 5

Treasury stock purchases — ( 8 ) — — — — ( 8 )

Buyback of noncontrolling interest — — ( 1 ) — — ( 4 ) ( 5 )

Comprehensive Income (Loss):

Net Income (Loss) — — — ( 40 ) — — ( 40 )

Other comprehensive income (loss), net — — — — 24 — 24

Total Comprehensive Income (Loss), Net — — — ( 40 ) 24 — ( 16 )

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

Six Months Ended June 30, 2026

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

5 unchanged sentences

Treasury stock purchases — — — — — — —

Buyback of noncontrolling interest — — — — — — —

Comprehensive Income (Loss):

2 unchanged sentences

Total Comprehensive Income (Loss), Net — — — ( 149 ) ( 6 ) — ( 155 )

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

Balance at June 30, 2026 $ 2 $ ( 235 ) $ 3,969 $ ( 2,767 ) $ ( 443 ) $ — $ 526

Six Months Ended June 30, 2025

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

Non-controlling Interest Shareholders'

Balance at December 31, 2024 $ 2 $ ( 210 ) $ 3,952 $ ( 2,433 ) $ ( 472 ) $ 4 $ 843

Dividends - preferred stock, $ 40 /share

— — — ( 5 ) — — ( 5 )

Stock incentive plans, net — — 8 — — — 8

Treasury stock purchases — ( 8 ) — — — — ( 8 )

Contribution from noncontrolling interest — — ( 1 ) — — ( 4 ) ( 5 )

Comprehensive Income (Loss):

Net Income (Loss) — — — ( 91 ) — — ( 91 )

Other comprehensive income (loss), net — — — — 35 — 35

Total Comprehensive Income (Loss), Net — — — ( 91 ) 35 — ( 56 )

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

(1) AOCL - Accumulated other comprehensive loss.

2 unchanged sentences

CNDT Q2 2026 Form 10-Q

CONDUENT INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 – Basis of Presentation

11 unchanged sentences

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.

Certain reclassifications have been made to prior years' amounts to conform to the current year presentation.

Intercompany balances and transactions have been eliminated.

3 unchanged sentences

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.

Discontinued Operations

On May 21, 2026, the Company entered into a definitive agreement to sell its Public Transit business, an operating unit of its Transportation segment to Modaxo USA Holdings, Inc.

and certain affiliates (collectively, "Modaxo").

On June 29, 2026, the Company entered into a definitive agreement to sell its Tolling business, the other operating unit of its Transportation segment to Quarterhill Inc.

These two pending transactions collectively represent an exit from the Transportation business, a strategic shift that will have a major effect on the Company’s operations and financial results.

As such, these transactions qualify under applicable accounting guidance for reporting as discontinued operations and the Company reported these businesses as discontinued operations and reclassified their results from its former Transportation segment to Discontinued Operations and no longer reports results for a Transportation segment.

Additionally, the related assets and liabilities associated with the discontinued operations are classified as held for sale in the Company's condensed consolidated balance sheet for the periods presented.

Refer to Note 5 – Divestitures and Discontinued Operations to the Condensed Consolidated Financial Statements for additional information, including selected cash flow information.

Unless otherwise indicated, the financial disclosures and related information provided herein relate to the Company's continuing operations, which exclude the Transportation segment, and all prior periods have been recast to reflect discontinued operations .

CNDT Q2 2026 Form 10-Q

Use of Estimates

4 unchanged sentences

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.

In connection with the Company’s periodic review of the estimated useful lives of its buildings and equipment, the Company extended the estimated useful lives of its desktop and laptop computers from three years to four years effective April 1, 2026.

The change in estimated useful lives was due to actual and expected longer refresh cycles for these assets.

Based on the carrying value of the assets as of March 31, 2026 and those placed in service during the three months ended June 30, 2026, the effects of this change in estimate were decreases in Loss Before Income Taxes from Continuing Operations and Net Loss from Continuing Operations of $1 million and $1 million, respectively, for the three and six months ended June 30, 2026.

Summary of Significant Accounting Policies

4 unchanged sentences

The Company has not adopted any new accounting standards in 2026.

CNDT Q1 2026 Form 10-Q

New Accounting Standards To Be Adopted

3 unchanged sentences

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.

As the guidance is disclosure related, adoption will not have any impact on the Company's Condensed Consolidated Financial Statements.

Internal-use Software:

3 unchanged sentences

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.

The Company is currently evaluating the impact that this new standard will have on its Condensed Consolidated Financial Statements.

CNDT Q2 2026 Form 10-Q

Note 3 – Revenue

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions) 2026 2025 2026 2025

6 unchanged sentences

Total Government 215 238 441 454

Transportation:

Road Usage Charging & Management Solutions 53 65

Transit Solutions 83 68

Total Transportation 136 133

Total Consolidated Revenue $ 531 $ 603 $ 1,118 $ 1,221

3 unchanged sentences

Total Revenue $ 531 $ 603 $ 1,118 $ 1,221

CNDT Q1 2026 Form 10-Q

Contract Balances

4 unchanged sentences

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:

The following table provides information about significant movements in contract assets (current and long-term) for the six months ended June 30, 2026 and 2025:

(in millions) 2026 2025

3 unchanged sentences

Ending balance (1)

(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:

(1) Of which $ 3 million and $ 1 million are included in Other long-term assets as of June 30, 2026 and 2025, respectively.

CNDT Q2 2026 Form 10-Q

The following table provides information about significant movements in contract liabilities balances (current and long-term) for the six months ended June 30, 2026 and 2025:

(in millions) 2026 2025

4 unchanged sentences

Ending balance (2)

(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.

(1) Of which $ 30 million and $ 41 million were recognized during the six months ended June 30, 2026 and 2025, respectively, that related to the Company's contract liabilities as of December 31, 2025 and 2024, respectively.

(2) Of which $ 43 million and $ 42 million are included in Other long-term liabilities as of June 30, 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.

Estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially satisfied at June 30, 2026 was approximately $ 500 million.

The Company expects to recognize approximately 93 % of this revenue over the next two years and the remainder thereafter.

2 unchanged sentences

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 evaluates the Company's financial performance based on Segment profit (loss) for its two reportable segments - Commercial and Government.

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.

As discussed in Note 5 – Divestitures and Discontinued Operations, the Company has entered into definitive agreements to sell its Transit and Tolling businesses to Modaxo and Quarterhill Inc., respectively.

These sales are expected to close before the end of 2026.

As a result of the pending sales and having met applicable accounting requirements, the Company reported these businesses as discontinued operations and reclassified their results from the former Transportation segment to Discontinued Operations and no longer reports results for a Transportation segment.

All prior periods have been reclassified to conform to this presentation.

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

• Commercial:

6 unchanged sentences

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.

CNDT Q2 2026 Form 10-Q

Selected financial information for the Company's segments is as follows:

Three Months Ended

(in millions) Commercial Government Transportation Total (1)

(in millions) Commercial Government Total (1)

Segment revenue $ 316 $ 215 $ 531

14 unchanged sentences

Segment profit (loss) $ 7 $ 49 $ 56

(1) Total excludes Unallocated Costs.

(1) Total excludes Discontinued Operations and 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.

1 unchanged sentence

This update had no impact on total segment expenses by reportable segment or on total expenses by expense category.

CNDT Q2 2026 Form 10-Q

Six Months Ended

(in millions) Commercial Government Total (1)

Segment revenue $ 677 $ 441 $ 1,118

Wages and benefits $ 449 $ 177 $ 626

Services and supplies 90 120 210

Rent lease and maintenance expense 69 30 99

Other operating expense 2 4 6

Depreciation and amortization expense 38 24 62

Segment expenses $ 648 $ 355 $ 1,003

Segment profit (loss) $ 29 $ 86 $ 115

Segment revenue $ 767 $ 454 $ 1,221

Wages and benefits $ 523 $ 185 $ 708

Services and supplies 101 135 236

Rent lease and maintenance expense 74 32 106

Other operating expense 2 4 6

Depreciation and amortization expense 44 21 65

Segment expenses $ 744 $ 377 $ 1,121

Segment profit (loss) $ 23 $ 77 $ 100

(1) Total excludes Discontinued Operations and 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 Q2 2026 Form 10-Q

The following is a reconciliation of Segment profit (loss) to Income (loss) before income taxes:

The following is a reconciliation of Segment profit (loss) to Income (loss) before income taxes from continuing operations:

Three Months Ended

June 30, Six Months Ended

(in millions) 2026 2025 2026 2025

9 unchanged sentences

Other income (expenses), net — ( 1 ) ( 3 ) ( 2 )

Income (Loss) Before Income Taxes $ ( 27 ) $ ( 56 )

Income (Loss) Before Income Taxes From Continuing Operations $ ( 57 ) $ ( 43 ) $ ( 76 ) $ ( 105 )

(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.

Included in the six months ended June 30, 2026 period are $ 4 million of former CEO separation costs and a benefit related to a stock compensation plan change as described in Note 13 – Preferred Stock and Common Stock.

Included in the six months ended June 30, 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.

Additionally, Unallocated Costs includes certain indirect costs that are no longer allocated to the former Transportation segment, which is now classified as Discontinued Operations.

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

Note 5 – Divestitures and Discontinued Operations

Public Transit Divestiture

On May 21, 2026, the Company, by and through its wholly owned subsidiary Conduent Business Services, LLC (“CBS”), entered into an Equity Interest Purchase Agreement (the “Transit Purchase Agreement”) with Modaxo USA Holdings, Inc.

and Modaxo France Holdings SAS (collectively, “Transit Buyer”), and Modaxo Group Inc.

Under the Transit Purchase Agreement, CBS agreed to sell all of the issued and outstanding equity interests of Conduent Transport Solutions, Inc.

and certain non‑U.S.

subsidiaries that comprise the Company’s public transit and fare collection business (the “Transit Business”) on the terms and subject to the conditions set forth therein.

The purchase price is $ 164 million in cash, subject to customary purchase price adjustments.

At closing, Transit Buyer will retain (i) a $ 10 million purchase price holdback for one year to secure net tangible asset related adjustments and certain indemnification claims, if any, (ii) a $ 12 million special holdback, the release of which is dependent on certain target completion dates for a customer, and (iii) a $ 0.4 million holdback for one-year to secure the Company’s portion of the retention amount under Transit Buyer’s representation and warranty policy in the event of breaches of certain representations and warranties, in each case, as further described in the Transit Purchase Agreement.

Finally, the Transit Purchase Agreement requires $ 15 million in cash to be transferred with the Transit Business on the day of closing.

The Transit Purchase Agreement contains customary representations and warranties and pre‑closing covenants for a transaction of this type.

The transaction is expected to close before the end of 2026, subject to customary conditions and regulatory approvals.

Tolling Divestiture

On June 29, 2026, the Company by and through its wholly owned subsidiary, CBS, entered into an Asset Purchase Agreement (the “Tolling Purchase Agreement”) with Quarterhill Inc., a Canada Business Corporations Act corporation (“Tolling Buyer”).

Under the Tolling Purchase Agreement, the Company, by and through certain of its subsidiaries, will sell and assign, and Tolling Buyer will purchase and assume from the Company, certain assets and liabilities of the Company’s tolling solutions business (the “Tolling Business”), on the terms and subject to the conditions set forth therein.

CNDT Q2 2026 Form 10-Q

The purchase price consists of $ 70 million in cash, subject to customary purchase price adjustments, and a number of common shares of Tolling Buyer equal to 7 % of the issued and outstanding shares of Tolling Buyer, calculated as of immediately prior to the closing.

The estimated market value of these shares, based on the publicly traded market price of Quarterhill Inc.

as of June 30, 2026 was $ 14 million.

The Tolling Purchase Agreement contains customary representations and warranties and pre‑closing covenants for a transaction of this type.

The transaction is expected to close before the end of 2026, subject to customary conditions and regulatory approvals.

Discontinued Operations

Collectively, these two pending transactions represent an exit from the Transportation business, a strategic shift that will have a major effect on the Company’s operations and financial results, and as such, qualify for reporting as discontinued operations.

Beginning in the second quarter of 2026, the Company reported the results of the Transportation segment, for the periods presented, in the Company's Condensed Consolidated Statements of Income (Loss) as discontinued operations and reported the assets and liabilities of the Transportation segment on the Condensed Consolidated Balance Sheets as held for sale.

All prior periods have been reclassified to conform with this presentation.

Additionally, the Company has classified the assets and liabilities held for sale as current assets and liabilities as it expects the two transactions will close within one year.

The net assets of discontinued operations are recorded at the lower of their carrying amount or estimated fair value less costs to sell.

In the second quarter of 2026, the Company recorded a net pre-tax loss of $ 31 million related to the pending Tolling divestiture reflecting the write-down of the carrying value of the Tolling Business to its estimated fair value less costs to sell (the "impairment loss").

Any differences due to changes in fair values less costs to sell or carrying values for the Tolling business will be recognized as a gain or loss in future financial statements.

There was no tax benefit recorded related to this loss.

This loss is included on the Condensed Consolidated Statements of Income (Loss) in Income (loss) from discontinued operations, net of tax and is included in the Condensed Consolidated Statements of Cash Flows as an adjustment in (Gain) loss on divestitures and sales of fixed assets, net.

Summarized financial information for the Company's Discontinued Operations is as follows:

Three Months Ended

June 30, Six Months Ended

(in millions) 2026 2025 2026 2025

Revenue $ 133 $ 151 $ 269 $ 285

Operating Costs and Expenses

Cost of services (excluding depreciation and amortization) 123 128 249 240

Selling, general and administrative (excluding depreciation and amortization) 12 10 25 20

Depreciation and amortization 6 6 12 14

Other (income) expenses, net 37 1 37 ( 1 )

Total Operating Costs and Expenses 178 145 323 273

Income (Loss) Before Income Taxes ( 45 ) 6 ( 54 ) 12

Income tax expense (benefit) 2 4 4 5

Net Income (Loss) from Discontinued Operations $ ( 47 ) $ 2 $ ( 58 ) $ 7

Other (income) expenses, net shown for the three and six months ended June 30, 2026 in the table above include the $ 31 million impairment loss noted above.

This amount includes approximately $ 2 million of transaction-related costs that have been accrued within Other current liabilities.

CNDT Q2 2026 Form 10-Q

The following is a summary of the major categories of assets and liabilities that have been reclassified as held for sale in connection with the pending Public Transit and Tolling divestitures described above:

(in millions) June 30, 2026 December 31, 2025

Accounts Receivable, net $ 137 $ 159

Other current assets 95 87

Contract assets 55 70

Land, building and equipment, net 17 14

Operating lease right-of-use assets 20 23

Deferred contract costs, net 49 54

Other long-term assets 42 45

Write-down to fair value ( 29 ) —

Assets of discontinued operations held for sale $ 386 $ 452

Accounts payable $ 29 $ 34

Accrued compensation and benefits costs 36 37

Contract liabilities 34 30

Other current liabilities 67 70

Operating lease liabilities 15 18

Other long-term liabilities 25 28

Liabilities of discontinued operations held for sale $ 206 $ 217

The following is a summary of selected financial information of the discontinued operations:

Six Months Ended

(in millions) 2026 2025

Non-cash expenses

Depreciation of buildings and equipment $ 2 $ 2

Amortization of product software 6 6

Amortization of deferred customer contract costs 4 6

Write-down of assets to estimated fair value less costs to sell 31 —

Capital and other expenditures

Cost of additions to land, buildings and equipment 3 2

Cost of additions to product software 4 1

Costs to obtain and fulfill a contract — 6

Note 6 – Restructuring Programs and Related Costs

1 unchanged sentence

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.

In 2026, the Company initiated a transformation project to accelerate growth, improve delivery, modernize technology and optimize support functions (the "2026 Restructuring Program").

Management has estimated that the restructuring and related costs of this project will be in the range of $ 30 million to $ 50 million.

The estimated completion date of this project is the end of the first half of 2027.

In the future, there may be additional provisions or changes in estimates for the 2026 Restructuring Program or other previously disclosed restructuring programs 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:

CNDT Q2 2026 Form 10-Q

A summary of the Company's restructuring program activity in the table below for the six months ended June 30, 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;

• 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

• Contract termination and other related costs - incremental, non-recurring costs related to professional support services associated with the implementation of certain cost reductions and strategic transformation programs in 2026 and non-lease costs associated with exited lease facilities in both years;

• Asset impairments - non-cash impairments of operating lease right-of-use 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 Related Costs Asset Impairments Total

Accrued Balance at December 31, 2025 $ 5 $ 3 $ — $ 8

3 unchanged sentences

Charges against reserve and currency ( 12 ) ( 7 ) ( 1 ) ( 20 )

Accrued Balance at March 31, 2026 $ 6 $ 2 $ — $ 8

CNDT Q1 2026 Form 10-Q

(in millions) Severance and Related Costs Contract Termination and Other Asset Impairments Total

Accrued Balance at June 30, 2026 $ 12 $ 4 $ — $ 16

(in millions) Severance and Related Costs Contract Termination and Other Related Costs Asset Impairments Total

Accrued Balance at December 31, 2024 $ 13 $ 2 $ — $ 15

3 unchanged sentences

Charges against reserve and currency ( 12 ) ( 4 ) ( 1 ) ( 17 )

Accrued Balance at March 31, 2025 $ 6 $ 2 $ — $ 8

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

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

2 unchanged sentences

Long-term debt was as follows:

(in millions) March 31, 2026 December 31, 2025

(in millions) June 30, 2026 December 31, 2025

Revolving credit facility $ 144 $ 109

5 unchanged sentences

Total Long-term Debt $ 697 $ 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.

As of June 30, 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 June 30, 2026.

Additionally, the Company utilized $ 76 million of the Performance Letter of Credit Facility to issue performance letters of credit as of June 30, 2026.

At June 30, 2026, the Company was in compliance with all debt covenants related to the borrowings in the table above.

CNDT Q2 2026 Form 10-Q

Subsequent to the balance sheet date, in July 2026, the Company borrowed $183 million under its Revolving Credit Facility and there are no plans to utilize the funds at this time.

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 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.

At June 30, 2026 and December 31, 2025, the Company had outstanding forward exchange contracts with gross notional values of $ 199 million and $ 163 million, respectively.

At June 30, 2026, approximately 81 % of these contracts mature within three months, 8 % in three to six months, 9 % in six to twelve months and 2 % 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 9 – 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

Note 9 – Fair Value of Financial Assets and Liabilities

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

(in millions) March 31, 2026 December 31, 2025

(in millions) June 30, 2026 December 31, 2025

Foreign exchange contracts - forward $ — $ —

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

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

(in millions) Carrying

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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).

CNDT Q2 2026 Form 10-Q

The fair value of Long-term debt was estimated using quoted market prices for identical or similar instruments (Level 2).

Note 10 – Employee Benefit Plans

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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 Company recognized an expense related to its defined contribution plans of $ 2 million and $ 2 million for the three months ended June 30, 2026 and 2025, respectively, and $3 million and $4 million for the six months ended June 30, 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

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

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Other comprehensive income (loss) ( 5 ) ( 1 ) — ( 6 )

Balance at March 31, 2026 $ ( 451 ) $ ( 2 ) $ 7 $ ( 446 )

Balance at June 30, 2026 $ ( 449 ) $ ( 1 ) $ 7 $ ( 443 )

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

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Other comprehensive income (loss) 33 2 — 35

Balance at March 31, 2025 $ ( 469 ) $ 3 $ 5 $ ( 461 )

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

(1) All amounts are net of tax.

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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.

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

CNDT Q2 2026 Form 10-Q

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.

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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

Litigation Against the Company

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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.

The lawsuit relates to the February 2019 sale of a portion of CBS's select standalone customer care call center business to plaintiffs.

Under the terms of the sale agreement, CBS received approximately $ 23 million of promissory notes from plaintiffs (the "Notes").

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indemnification for breaches of covenants;

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.

Skyview sought to avoid its obligations under the Notes, as well as damages against CBS for the alleged breaches of representations and warranties and fraud.

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 Skyview’s behalf pending closing (the "Jamaica Deferred Closing"), other obligations under a transition services agreement and its amendments (the "TSAs"), and late rent payment obligations.

In May 2021, the court denied CBS’s motion to dismiss and allowed Skyview’s claims to proceed.

Following completion of fact and expert discovery, the parties filed summary judgment motions in July 2023.

On December 8, 2023, the court granted the parties’ motions in part and denied them in part.

In January 2024, the parties filed cross-notices of appeal with the New York Supreme Court, Appellate Division, First Department ("Appellate Division").

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.

Skyview and CBS 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.

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.

In June 2025, the Appellate Division issued a ruling on the parties’ cross-appeals, finding predominantly in CBS’s favor.

Specifically, the Appellate Division dismissed Skyview’s fraud claim in its entirety (along with Skyview’s request for punitive damages).

In addition, the Appellate Division found there to be issues of fact for trial on Skyview’s breach of contract claim.

With respect to CBS’s counterclaims, the Appellate Division (i) affirmed summary judgment for CBS on its counterclaims concerning the TSAs and late rent payment amounts and (ii) affirmed summary judgment for CBS on its Jamaica Deferred Closing counterclaim and instructed the trial court to adjudicate the final amount owed by Skyview to CBS on that 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.

The trial court accordingly entered judgment for CBS 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.

Settlement discussions among the parties are ongoing and the court extended the pending pretrial deadlines to September 18, 2026 to allow those efforts to continue.

CNDT Q2 2026 Form 10-Q

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, if necessary.

January 2025 Cyber Event

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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.

The initial consolidated complaint was filed by plaintiffs on March 18, 2026, with an amended complaint filed on June 12, 2026.

The consolidated litigation has been stayed through September 7, 2026, while the parties explore potential resolution.

Conduent denies plaintiffs' allegations, believes that it has strong defenses to plaintiffs’ claims, and will continue to defend the litigations vigorously.

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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.

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

As of June 30, 2026, the Company had $ 570 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.

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Three Months Ended

June 30, Six Months Ended

(in millions, except per share data in whole dollars and shares in thousands) 2026 2025 2026 2025

Basic Net Earnings (Loss) per Share:

Net Income (Loss) from Continuing Operations $ ( 69 ) $ ( 42 ) $ ( 91 ) $ ( 98 )

Net Income (Loss) from Discontinued Operations ( 47 ) 2 ( 58 ) 7

Net Income (Loss) ( 116 ) ( 40 ) ( 149 ) ( 91 )

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Diluted Net Earnings (Loss) per Share:

Net Income (Loss) from Continuing Operations $ ( 69 ) $ ( 42 ) $ ( 91 ) $ ( 98 )

Net Income (Loss) from Discontinued Operations ( 47 ) 2 ( 58 ) 7

Net Income (Loss) ( 116 ) ( 40 ) ( 149 ) ( 91 )

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Net Earnings (Loss) per Share:

Basic $ ( 0.23 ) $ ( 0.33 )

Diluted $ ( 0.23 ) $ ( 0.33 )

Continuing operations $ ( 0.46 ) $ ( 0.27 ) $ ( 0.62 ) $ ( 0.63 )

Discontinued operations ( 0.30 ) 0.01 ( 0.37 ) 0.04

Basic net income (loss) per share $ ( 0.76 ) $ ( 0.26 ) $ ( 0.99 ) $ ( 0.59 )

Continuing operations $ ( 0.46 ) $ ( 0.27 ) $ ( 0.62 ) $ ( 0.63 )

Discontinued operations ( 0.30 ) 0.01 ( 0.37 ) 0.04

Diluted net income (loss) per share $ ( 0.76 ) $ ( 0.26 ) $ ( 0.99 ) $ ( 0.59 )

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):

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

(in millions) March 31, 2026 December 31, 2025

(in millions) June 30, 2026 December 31, 2025

Other Current Assets

27 unchanged sentences

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