Conduent Inc (NASDAQ:CNDT) Stock Plummets on Q3 2025 Revenue Miss and Weak Guidance

Conduent Incorporated (NASDAQ:CNDT) reported its third-quarter 2025 financial results, delivering a performance that notably fell short of analyst revenue expectations while showing improvement in profitability metrics. The market reaction was sharply negative, with the stock declining significantly in pre-market trading following the announcement.

Earnings and Revenue Versus Estimates

The company's financial results for Q3 2025 presented a mixed picture when measured against analyst expectations. While Conduent showed progress on profitability, it missed substantially on the top line.

• Revenue: $767 million reported versus $810.2 million estimated
• EPS (Non-GAAP): $(0.09) reported versus $(0.066) estimated

The revenue shortfall of approximately $43 million represents a 5.3% miss against expectations. This decline in revenue was partially attributed to the impact of recent divestitures. On the profitability front, the company's adjusted diluted EPS of $(0.09) showed improvement from the $(0.14) reported in the same quarter last year, though it still missed analyst projections.

Market Reaction and Price Action

Investors responded negatively to the earnings release, particularly the revenue miss and ongoing challenges in cash generation. The stock experienced a pre-market decline of approximately 16.7%, reflecting market disappointment with the quarterly performance. This negative sentiment extends recent downward pressure on the stock, which has declined approximately 16.9% over the past month leading into the earnings announcement.

Key Financial Performance Highlights

Beyond the headline earnings and revenue figures, several operational metrics provide additional context for Conduent's quarterly performance:

• Adjusted EBITDA Margin: Improved to 5.2% from 4.1% in Q3 2024
• Adjusted EBITDA: Increased to $40 million from $32 million year-over-year
• New Business Signings: $111 million in Annual Contract Value (ACV)
• Cash Position: $264 million in cash with $198 million unused credit capacity
• Share Repurchases: Approximately 4.7 million shares bought back during the quarter

The improvement in EBITDA margin indicates progress in operational efficiency efforts, though this was overshadowed by the revenue challenges and negative cash flow generation during the quarter.

Strategic Developments and Outlook

Management highlighted several strategic initiatives during the quarter, including the successful completion of debt refinancing, continued integration of AI technologies across its platforms, and progress toward capital allocation targets with 87% of the $1 billion goal achieved to date.

For the full year 2025, Conduent provided an outlook that anticipates:

• Adjusted Revenue: $3.05 - $3.10 billion
• Adjusted EBITDA Margin: 5.0% - 5.5%

This revenue guidance falls below analyst estimates of $3.19 billion for full-year 2025 sales, which likely contributed to the negative market reaction. The company's margin guidance suggests confidence in maintaining recent profitability improvements.

Operational Milestones

During the quarter, Conduent announced several significant contract wins and technology implementations, including a new toll collection system for the Richmond Metropolitan Transportation Authority, expansion of Philippines operations to support healthcare client services, and implementation of its disease surveillance system for the State of Delaware. The company also highlighted continued integration of generative AI capabilities across its document processing, customer experience, and fraud prevention platforms.

For detailed historical earnings data and future estimates, view the complete earnings and estimates information for CNDT.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or recommendation to buy or sell any securities. Investors should conduct their own research and consult with financial advisors before making investment decisions.