Conduent (CNDT) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $723M, down 3.7%–4% year-over-year, with growth in Government and Transportation segments and a decline in Commercial.

• Adjusted EBITDA rose to $49M, margin improved to 6.8% from 4.9% year-over-year, driven by cost efficiencies and AI initiatives.

• Operating cash flow improved by $50M year-over-year; cash at quarter-end was $228M–$251M, with $190M unused credit facility.

• Portfolio optimization and divestitures targeted for over $200M in proceeds in 2026; cost reduction initiatives aim for $100M+ savings.

• Leadership changes and streamlined Commercial organization implemented to drive accountability and execution.

Financial highlights

• Adjusted EBITDA increased 32.4% year-over-year to $49M, margin up to 6.8%; adjusted free cash flow improved to $(15)M from $(74)M.

• Net loss for Q1 2026 was $(33)M, improved from $(51)M in Q1 2025; adjusted diluted EPS improved to $(0.07) from $(0.13).

• Net leverage ratio stable at 2.8x; capex was 2.2% of revenue.

• Debt at quarter-end: $23M current, $698M–$725M long-term.

• $251M in cash at quarter-end, with $190M unused revolving credit facility.

Outlook and guidance

• FY 2026 revenue guidance: $2.8B–$2.9B; adjusted EBITDA: $160M–$190M.

• FY 2027 outlook: flat to positive revenue growth, adjusted EBITDA of $190M–$220M, and positive cash generation.

• Management expects continued margin and free cash flow improvement, supported by AI, cost actions, and divestitures.

• New business pipeline expanded to $3.5B, up 10% year-over-year.

• Estimated $1.2B in future revenue from unsatisfied performance obligations, with 75% recognized over two years.