Traders should watch for whether the FY 2026 guidance holds or is revised down at the Q3 report. The divestiture proceeds (~$234M) could be used to pay down the revolver, but the core business (commercial and government) is showing accelerating revenue erosion. The maintained guidance of $2.15B-$2.25B implies a steep H2 ramp that looks increasingly at risk. Monitor the next 8-K for any update on the largest Commercial customer loss and the trajectory of new business signings.
Price Chart
Executive Summary
Conduent's Q2 2026 continuing operations results were deeply disappointing: revenue plunged 11.9% YoY to $531M, Adjusted EBITDA margin compressed to 3.0% from 3.8%, and GAAP diluted EPS from continuing operations worsened to -$0.46 from -$0.27. The company did announce significant portfolio transformation via $234M in expected Transit and Tolling divestiture proceeds, and maintained FY 2026 guidance, but the operating deterioration—especially the loss of its largest Commercial segment customer—dominates the near-term narrative.
Key Financial Metrics
Key Facts
- Revenue from continuing operations fell 11.9% YoY to $531M (Q2 2025: $603M), the steepest quarterly decline in recent history.
- GAAP net loss from continuing operations was -$69M vs -$42M a year ago; GAAP diluted EPS from continuing ops was -$0.46 vs -$0.27.
- Adjusted EBITDA from continuing operations dropped 30.4% to $16M; Adjusted EBITDA margin fell to 3.0% from 3.8%.
- Announced divestitures of Public Transit (Modaxo, $164M) and Tolling (Quarterhill, $70M + 7% equity stake), expected to generate ~$234M in gross proceeds.
- FY 2026 outlook maintained: revenue $2.15B-$2.25B, Adj. EBITDA from continuing ops $140M-$170M.
- Restructuring costs surged to $20M in Q2 2026 (from $8M in Q2 2025) as the transformation program accelerated.
- Operating cash flow improved to +$7M (vs -$15M prior year), but Adjusted Free Cash Flow remained negative at -$8M.
- Total debt rose to $718M from $687M at year-end, partly driven by $144M drawn on the revolver.
Financial Impact
Revenue decline of -$72M YoY from continuing ops, Adjusted EBITDA decline of -$7M; the -11.9% revenue shrinkage is a severe top-line shock for a company with a $264M market cap.
Risk Factors
- Revenue decline may accelerate if the loss of the largest Commercial segment customer is not replaced by the pipeline.
- Guidance maintained at $2.15B-$2.25B requires a significant H2 recovery—if Q3 revenue is again down >8%, a guidance cut is likely.
- Divestiture execution risk (regulatory approvals, closing timing) could delay debt paydown benefits.
- Adjusted EBITDA margin compression from 3.8% to 3.0% signals operating deleverage that may persist.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001677703-26-000091 |
| Exhibit: ex992-slidesxfinalforfil.htm | 0001677703-26-000091 |
| Document: cndt-20260810.htm | 0001677703-26-000091 |
| Document: 0001677703-26-000091-index-headers.html | 0001677703-26-000091 |
| Document: 0001677703-26-000091-index.html | 0001677703-26-000091 |
| Document: 0001677703-26-000091.txt | 0001677703-26-000091 |
| 8-K Data (Synthetic) | 0001677703-26-000091 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Aug 28, 2026 4w ago | 8-K | $1.72 $1.58 | ▼ −8.14% | ▼ −7.95% | $1.63 (−4.94%) |
Aug 10, 2026 7w ago | 8-K | $1.56 $1.65 | ▼ −5.77% | ▼ −6.68% | $1.63 (−4.81%) |
Aug 10, 2026 7w ago | Press Release | $1.56 $1.65 | ▼ −5.77% | ▼ −6.68% | $1.63 (−4.81%) |
Jul 2, 2026 13w ago | 8-K | $1.51 $1.58 | ▲ +4.64% | ▲ +5.05% | $1.63 (+8.28%) |
Jun 30, 2026 13w ago | 8-K | $1.46 $1.51 | ▲ +3.42% | ▲ +4.45% | $1.63 (+11.99%) |
May 21, 2026 19w ago | 8-K | $1.88 $1.34 | ▼ −28.99% | ▼ −27.57% | $1.63 (−13.03%) |
May 11, 2026 20w ago | 8-K | $1.49 $1.35 | ▼ −9.40% | ▼ −7.67% | $1.63 (+9.73%) |
Apr 3, 2026 26w ago | DEFA14A | $1.44 $1.70 | ▲ +18.06% | ▲ +9.07% | $1.63 (+13.54%) |
Feb 28, 2026 30w ago | Institutional Cluster | $1.47 $1.32 | ▼ −10.20% | ▼ −2.27% | $1.63 (+11.22%) |
US Market Status
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