CONDUENT Inc 10-Q

ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED) CONDUENT INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED) Three Months Ended June 30, Six Months Ended June 30, (in millions, except per share data) 2026 2025 2026 2025 Revenue $ 531 $ 603 $ 1,118 $ 1,221 Operating Costs and Expenses Cost of services (excluding depreciation and amortization) 435 489 897 995 Selling, general and administrative (excluding depreciation and amortization) 80 90 158 201 Research and development (excluding depreciation and amortization) — 1 1 2 Depreciation and amortization 37 41 78 82 Restructuring and related costs 20 8 28 12 Interest expense 13 12 25 24 (Gain) loss on divestitures and transaction costs, net 2 4 3 6 Litigation settlements (recoveries), net 1 — 1 2 Other (income) expenses, net — 1 3 2 Total Operating Costs and Expenses 588 646 1,194 1,326 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: 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 ) Diluted: 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. CNDT Q2 2026 Form 10-Q 3 Table of Contents CONDUENT INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) Three Months Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 2026 2025 Net Income (Loss) $ ( 116 ) $ ( 40 ) $ ( 149 ) $ ( 91 ) Other Comprehensive Income (Loss), Net (1) Currency translation adjustments, net 2 24 ( 5 ) 33 Unrecognized gains (losses), net 1 — ( 1 ) 2 Other Comprehensive Income (Loss), Net 3 24 ( 6 ) 35 Comprehensive Income (Loss), Net $ ( 113 ) $ ( 16 ) $ ( 155 ) $ ( 56 ) __________ (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 Q2 2026 Form 10-Q 4 Table of Contents CONDUENT INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in millions, except share data in thousands) June 30, 2026 December 31, 2025 Assets Cash and cash equivalents $ 228 $ 233 Accounts receivable, net 337 341 Contract assets 10 53 Other current assets 136 125 Assets of discontinued operations held for sale 386 452 Total current assets 1,097 1,204 Land, buildings and equipment, net 152 167 Operating lease right-of-use assets 110 112 Deferred contract costs, net 72 74 Goodwill 614 617 Other long-term assets 200 223 Total Assets $ 2,245 $ 2,397 Liabilities and Equity Current portion of long-term debt $ 21 $ 22 Accounts payable 95 108 Accrued compensation and benefits costs 127 136 Contract liabilities 46 44 Other current liabilities 212 201 Liabilities of discontinued operations held for sale 206 217 Total current liabilities 707 728 Long-term debt 697 665 Deferred taxes 16 19 Operating lease liabilities 83 83 Other long-term liabilities 74 75 Total Liabilities 1,577 1,570 Contingencies (See Note 12) Series A convertible preferred stock 142 142 Common stock 2 2 Treasury stock, at cost ( 235 ) ( 235 ) Additional paid-in capital 3,969 3,968 Retained earnings (deficit) ( 2,767 ) ( 2,613 ) Accumulated other comprehensive loss ( 443 ) ( 437 ) Total Equity 526 685 Total Liabilities and Equity $ 2,245 $ 2,397 Shares of common stock issued and outstanding 155,521 154,709 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 Q2 2026 Form 10-Q 5 Table of Contents CONDUENT INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Six Months Ended June 30, (in millions) 2026 2025 Cash Flows from Operating Activities: Net income (loss) $ ( 149 ) $ ( 91 ) Adjustments required to reconcile net income (loss) to cash flows from operating activities: Depreciation and amortization 90 96 Contract inducement amortization 1 1 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 Changes in operating assets and liabilities: Accounts receivable 26 44 Other current and long-term assets 19 ( 69 ) Accounts payable and accrued compensation and benefits costs ( 24 ) ( 37 ) Other current and long-term liabilities 1 ( 9 ) Net change in income tax assets and liabilities 2 ( 12 ) Net cash provided by (used in) operating activities ( 1 ) ( 73 ) Cash Flows from Investing Activities: Cost of additions to land, buildings and equipment ( 18 ) ( 29 ) Cost of additions to internal use software ( 11 ) ( 9 ) Proceeds from divestitures 3 53 Net cash provided by (used in) investing activities ( 26 ) 15 Cash Flows from Financing Activities: 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 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 1 5 Increase (decrease) in cash, cash equivalents and restricted cash ( 3 ) ( 83 ) Cash, Cash Equivalents and Restricted Cash at Beginning of Period 243 377 Cash, Cash Equivalents and Restricted Cash at End of period (1) $ 240 $ 294 ___________ (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. CNDT Q2 2026 Form 10-Q 6 Table of Contents CONDUENT INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) 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' Equity Balance at March 31, 2026 $ 2 $ ( 235 ) $ 3,968 $ ( 2,648 ) $ ( 446 ) $ — $ 641 Dividends - preferred stock, $ 20 /share — — — ( 3 ) — — ( 3 ) Stock incentive plans, net — — 1 — — — 1 Treasury stock purchases — — — — — — Buyback of noncontrolling interest — — — — — — — Comprehensive Income (Loss): Net Income (Loss) — — — ( 116 ) — — ( 116 ) Other comprehensive income (loss), net — — — — 3 — 3 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' Equity Balance at March 31, 2025 $ 2 $ ( 210 ) $ 3,955 $ ( 2,486 ) $ ( 461 ) $ 4 $ 804 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) Non-controlling Interest Shareholders' Equity Balance at December 31, 2025 $ 2 $ ( 235 ) $ 3,968 $ ( 2,613 ) $ ( 437 ) $ — $ 685 Dividends - preferred stock, $ 40 /share — — — ( 5 ) — — ( 5 ) Stock incentive plans, net — — 1 — — — 1 Treasury stock purchases — — — — — — — Buyback of noncontrolling interest — — — — — — — Comprehensive Income (Loss): Net Income (Loss) — — — ( 149 ) — — ( 149 ) Other comprehensive income (loss), net — — — — ( 6 ) — ( 6 ) Total Comprehensive Income (Loss), Net — — — ( 149 ) ( 6 ) — ( 155 ) 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' Equity 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. Refer to Note 11 – Accumulated Other Comprehensive Loss for the components of AOCL. The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. CNDT Q2 2026 Form 10-Q 7 Table of Contents CONDUENT INCORPORATED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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 46,000 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 years' 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. 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 8 Table of Contents 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. 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 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. 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 Condensed 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 Condensed Consolidated Financial Statements. CNDT Q2 2026 Form 10-Q 9 Table of Contents 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 June 30, Six Months Ended June 30, (in millions) 2026 2025 2026 2025 Commercial: Customer Experience Management $ 91 $ 122 $ 210 $ 266 BPaaS 114 115 229 232 Integrated Digital Solutions 111 128 238 269 Total Commercial 316 365 677 767 Government: Government Healthcare Solutions 117 137 254 263 Government Services Solutions 98 101 187 191 Total Government 215 238 441 454 Total Consolidated Revenue $ 531 $ 603 $ 1,118 $ 1,221 Timing of Revenue Recognition: Point in time $ 17 $ 18 $ 36 $ 37 Over time 514 585 1,082 1,184 Total Revenue $ 531 $ 603 $ 1,118 $ 1,221 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 six months ended June 30, 2026 and 2025: (in millions) 2026 2025 Beginning balance $ 57 $ 61 Additional contract assets recognized 21 30 Billed and transferred to Accounts receivable and other ( 65 ) ( 22 ) Ending balance (1) $ 13 $ 69 ___ (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 10 Table of Contents 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 Beginning balance $ 86 $ 96 Deferral of income 49 63 Revenue recognized related to deferral of income (1) ( 46 ) ( 67 ) Ending balance (2) $ 89 $ 92 ___ (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 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. 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 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: • 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. CNDT Q2 2026 Form 10-Q 11 Table of Contents Selected financial information for the Company's segments is as follows: Three Months Ended June 30, (in millions) Commercial Government Total (1) 2026 Segment revenue $ 316 $ 215 $ 531 Expenses Wages and benefits $ 214 $ 90 $ 304 Services and supplies 42 57 99 Rent lease and maintenance expense 35 15 50 Other operating expense 1 2 3 Depreciation and amortization expense 17 12 29 Segment expenses $ 309 $ 176 $ 485 Segment profit (loss) $ 7 $ 39 $ 46 2025 Segment revenue $ 365 $ 238 $ 603 Expenses (2) Wages and benefits $ 253 $ 91 $ 344 Services and supplies 47 68 115 Rent lease and maintenance expense 36 16 52 Other operating expense 2 3 5 Depreciation and amortization expense 20 11 31 Segment expenses $ 358 $ 189 $ 547 Segment profit (loss) $ 7 $ 49 $ 56 __________ (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. CNDT Q2 2026 Form 10-Q 12 Table of Contents Six Months Ended June 30, (in millions) Commercial Government Total (1) 2026 Segment revenue $ 677 $ 441 $ 1,118 Expenses 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 2025 Segment revenue $ 767 $ 454 $ 1,221 Expenses (2) 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 13 Table of Contents 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 June 30, (in millions) 2026 2025 2026 2025 Segment Profit (Loss) $ 46 $ 56 $ 115 $ 100 Reconciling items: Unallocated costs (1) ( 66 ) ( 73 ) ( 130 ) ( 158 ) Amortization of acquired intangible assets ( 1 ) ( 1 ) ( 1 ) ( 1 ) Restructuring and related costs ( 20 ) ( 8 ) ( 28 ) ( 12 ) Interest expense ( 13 ) ( 12 ) ( 25 ) ( 24 ) Gain (loss) on divestitures and transaction costs, net ( 2 ) ( 4 ) ( 3 ) ( 6 ) Litigation (settlements) recoveries, net ( 1 ) — ( 1 ) ( 2 ) Other income (expenses), net — ( 1 ) ( 3 ) ( 2 ) 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 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 14 Table of Contents 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 June 30, (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 15 Table of Contents 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 June 30, (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 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. 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. CNDT Q2 2026 Form 10-Q 16 Table of Contents 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 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; and • 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 Provision 19 8 1 28 Changes in estimates — — — — Total Net Current Period Charges (1) 19 8 1 28 Charges against reserve and currency ( 12 ) ( 7 ) ( 1 ) ( 20 ) 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 Provision 7 4 1 12 Changes in estimates — — — — Total Net Current Period Charges (1) 7 4 1 12 Charges against reserve and currency ( 12 ) ( 4 ) ( 1 ) ( 17 ) 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. No restructuring and related costs are allocated to the segments. Note 7 – Debt Long-term debt was as follows: (in millions) June 30, 2026 December 31, 2025 Revolving credit facility $ 144 $ 109 Senior notes due 2029 520 520 Finance lease obligations 46 49 Other 12 13 Principal debt balance 722 691 Debt issuance costs and unamortized discounts ( 4 ) ( 4 ) Less: current maturities ( 21 ) ( 22 ) Total Long-term Debt $ 697 $ 665 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. 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 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 17 Table of Contents 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 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 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. Note 9 – 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) June 30, 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: June 30, 2026 December 31, 2025 (in millions) Carrying Amount Fair Value Carrying Amount Fair Value Liabilities: Long-term debt $ 697 $ 603 $ 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. CNDT Q2 2026 Form 10-Q 18 Table of Contents 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 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 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. Note 11 – 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) ( 5 ) ( 1 ) — ( 6 ) 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 Balance at December 31, 2024 $ ( 478 ) $ 1 $ 5 $ ( 472 ) Other comprehensive income (loss) 33 2 — 35 Balance at June 30, 2025 $ ( 445 ) $ 3 $ 5 $ ( 437 ) __________ (1) All amounts are net of tax. Tax effects were immaterial. Note 12 – 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 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 19 Table of Contents 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 financial position or liquidity. 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 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"). 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. 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. 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 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 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. No trial date has yet been set. 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 20 Table of Contents 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. 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. 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). 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. 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 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. Note 13 – 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 Q2 2026 Form 10-Q 21 Table of Contents Note 14 – 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 June 30, Six Months Ended June 30, (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 ) Dividend - Preferred Stock ( 3 ) ( 3 ) ( 5 ) ( 5 ) Adjusted Net Income (Loss) Available to Common Shareholders - Basic $ ( 119 ) $ ( 43 ) $ ( 154 ) $ ( 96 ) 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 ) Dividend - Preferred Stock ( 3 ) ( 3 ) ( 5 ) ( 5 ) Adjusted Net Income (Loss) Available to Common Shareholders - Diluted $ ( 119 ) $ ( 43 ) $ ( 154 ) $ ( 96 ) Weighted Average Common Shares Outstanding - Basic 155,288 161,162 155,095 161,448 Common Shares Issuable With Respect To: Restricted Stock and Performance Units / Shares — — — — 8% Convertible Preferred Stock — — — — Weighted Average Common Shares Outstanding - Diluted 155,288 161,162 155,095 161,448 Net Earnings (Loss) per Share: Basic: 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 ) Diluted: 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): Restricted stock and performance shares/units 12,307 19,849 12,891 17,615 Convertible preferred stock 5,393 5,393 5,393 5,393 Total Anti-Dilutive and Contingently Issuable Securities 17,700 25,242 18,284 23,008 CNDT Q2 2026 Form 10-Q 22 Table of Contents Note 15 – Supplementary Financial Information The components of Other assets and Other liabilities were as follows: (in millions) June 30, 2026 December 31, 2025 Other Current Assets Prepaid expenses $ 82 $ 73 Income taxes receivable 14 9 Value-added tax receivable 4 4 Restricted cash 12 10 Net receivables from buyers of divested businesses 1 1 Other 23 28 Total Other Current Assets $ 136 $ 125 Other Current Liabilities Accrued liabilities to vendors $ 93 $ 95 Current operating lease liabilities 39 44 Restructuring liabilities 16 8 Income tax payable 9 1 Other taxes payable 11 12 Accrued interest 5 5 Direct response costs - cyber event liabilities — 8 Due to factoring counterparty 11 9 Other 28 19 Total Other Current Liabilities $ 212 $ 201 Other Long-term Assets Internal use software, net $ 85 $ 90 Intangible assets, net 10 12 Product software, net 29 38 Deferred tax assets 13 14 Other 63 69 Total Other Long-term Assets $ 200 $ 223 Other Long-term Liabilities Income tax liabilities 15 14 Contract liabilities 43 43 Other 16 18 Total Other Long-term Liabilities $ 74 $ 75 CNDT Q2 2026 Form 10-Q 23 Table of Contents