Conduent (CNDT) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue from continuing operations was $531M, down 11.9% year-over-year, primarily due to contract losses and lower volumes, partially offset by new business ramp.

• Announced divestitures of Public Transit and Tolling businesses, exiting the Transportation segment for $234M–$248M in gross proceeds and a 7% equity stake in Quarterhill, marking a strategic shift and reclassification as discontinued operations.

• Launched a company-wide restructuring program targeting at least $100M in annual savings by 2027, focused on growth, margin improvement, and operational efficiency.

• Leadership team significantly refreshed, with 80% new or expanded roles, and a phased return-to-office underway to boost collaboration.

• Five strategic priorities remain: speed/accountability, financial discipline, cost reduction, portfolio optimization, and pipeline-to-growth conversion.

Financial highlights

• Adjusted EBITDA for Q2 2026 was $16M (3.0% margin), down from $23M (3.8% margin) in Q2 2025.

• Adjusted free cash flow for Q2 was $(8)M, but improved by $81M for the first half compared to last year.

• Commercial segment revenue was $316M (down 13% YoY); government segment revenue was $215M (down from $238M YoY).

• Net loss from continuing operations was $(69)M for Q2 2026; net loss from discontinued operations was $47M, including a $31M impairment on the Tolling business.

• Cash and cash equivalents at quarter-end were $228M–$240M; total principal debt outstanding was $664M–$722M.

Outlook and guidance

• FY 2026 revenue guidance is $2,150M–$2,250M; adjusted EBITDA guidance is $140M–$170M (midpoint margin 7%).

• Medium-term adjusted EBITDA margin target remains above 10% for the core business, unchanged despite portfolio changes.

• The restructuring program is expected to deliver at least $100M in annual savings, with completion targeted for the first half of 2027.

• Positive free cash flow anticipated in 2027.

• Management expects the divestitures to close in the second half of 2026, with proceeds used to strengthen the balance sheet and support ongoing transformation.