Q2 2026 Conduent Inc Earnings Call Transcript
Key Points
- Conduent Inc (CNDT) completed the sale of its Transit and Tolling businesses, generating $234 million in gross proceeds plus a 7% equity stake in Quarterhill, exceeding its $200 million portfolio action commitment and significantly reducing off-balance sheet obligations.
- The company's qualified new business pipeline reached approximately $3 billion, up 11% year-over-year, with the Commercial segment pipeline growing 48% since the start of 2026.
- Conduent Inc (CNDT) signed $99 million in new business ACV in Q2 2026, with a sequential improvement from Q1 and a higher proportion of recurring revenue, including notable wins with Securian, Trillium Health Resources, and Avis Budget Group.
- The company is making strong progress on its $100 million annualized cost savings program, with 60-70% from headcount reductions and 30-40% from technology optimization, already driving margin improvements in the Commercial segment.
- Conduent Inc (CNDT) is leveraging AI to enhance operational efficiency and client value, exemplified by its Conni digital assistant resolving 86% of employee inquiries without human intervention and winning UnitedHealthcare's 2026 Global Innovation Challenge for its agentic AI-powered navigator.
- The company's adjusted free cash flow improved by $81 million in the first half of 2026 compared to the prior year, reflecting better cash management and payment milestones in Government and former Transportation segments.
- Conduent Inc (CNDT)'s Q2 2026 revenue declined 11.9% year-over-year to $531 million, driven by contract losses and volume declines, particularly in the Commercial segment's customer experience management offering.
- The company's largest Commercial client contract will end in Q3 2026, which is already incorporated in the outlook but will continue to pressure revenue.
- Adjusted EBITDA margin decreased to 3% in Q2 2026, down 80 basis points year-over-year, with Government segment margins down 150 basis points due to revenue impacts and prior-year favorable reserve releases.
- The company's adjusted free cash flow remained negative at -$8 million for the quarter, and the full-year 2026 guidance was recalibrated to exclude discontinued operations, reflecting ongoing transformation challenges.
- Conduent Inc (CNDT) continues to face a natural timing difference between winning new business and realizing revenue impact, with some contracts rolling off and volume declines in existing client programs.
- The company incurred approximately $4 million in stranded costs related to the former Transportation segment in Q2 2026, which will need to be addressed post-closing of the divestitures.
Greetings and welcome to the Conduent second-quarter 2026 earnings call. (Operator Instructions) As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host, Nick Goel, Vice President, Investor Relations. Thank you. You may begin.
Good morning, everyone. Welcome to Conduent's second-quarter 2026 earnings call. With me today are Harsha Agadi, our CEO; and Giles Goodburn, our CFO. Harsha will provide an overview of the business, and Giles will cover our financial performance in greater detail.
We hope you have had a chance to review our press release issued earlier this morning. A copy of the press release and slides used during this call were filed with the SEC on Form 8-K. This information is also available on the Investor Relations section of our website.
During this call, we will make forward-looking statements. These statements reflect management's current beliefs, assumptions, and expectations, which may change over time.
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