Conduent Incorporated

Q2 2026 revenue was $531 million versus $603 million in Q2 2025, down 11.9%. Adjusted EBITDA was $16 million versus $23 million a year ago, and adjusted EBITDA margin was 3%, down 80 basis points year over year. Commercial revenue was $316 million, down 13%, with adjusted EBITDA of $24 million and margin of 7.6%; Government revenue was $215 million, with adjusted EBITDA of $51 million and margin of 23.7%. The company ended Q2 with approximately $240 million in cash and negative adjusted free cash flow of $8 million; adjusted net leverage was 2.1 turns. For 2026, management now expects revenue of $2.15 billion to $2.25 billion and adjusted EBITDA of $140 million to $170 million, midpoint margin 7%.

Harsha Agadi framed the quarter as part of a broader transformation that is “predictable” but still early. He emphasized five priorities: speed and accountability, financial discipline, lower costs, portfolio optimization, and converting pipeline into growth. He sounded constructive on client engagement, AI use cases, and the company’s strategic reset, saying the business is becoming simpler, more focused, and better positioned for sustainable profitable growth.

Giles Goodburn said the quarter reflected transformation-related items, including discontinued operations, stranded costs, and consulting costs tied to efficiency programs. He pointed to $99 million of new business ACV in Q2, $188 million in the first half, a $3 billion qualified pipeline up 11% year over year, and $617 million of TCV renewals in the quarter. On the balance sheet, he cited approximately $240 million of cash, negative adjusted free cash flow of $8 million, 2.6% of revenue in capex, and an adjusted net leverage ratio of 2.1 turns; he also said leverage could move toward a 1x range over the next 18 months to 2 years if transformation benefits continue.

Analysts focused on margin sustainability, leverage targets, AI’s role in growth, client concentration, and the source of cost savings. Management said the long-term margin goal remains above 10% for the business after central SG&A, and Harsha said Government margin improvement is being helped by AI tools and a leadership reset. On leverage, Giles said the post-deal ratio should come down to around 2x and could move closer to 1x over time; Harsha said the $100 million cost program is roughly 60% to 70% headcount and 30% to 40% tech stack related, with more than half already identified.