Conduent Incorporated (NASDAQ:CNDT) reported financial results for the fourth quarter and full year 2025, delivering a mixed performance that has triggered a significant negative reaction in the stock during pre-market trading. The business process services company fell short of analyst expectations on the top line while showing some improvement in profitability metrics, a combination that appears to have disappointed investors focused on growth.
Earnings and Revenue Versus Estimates
The company's quarterly results missed Wall Street's consensus estimates for both revenue and adjusted earnings per share (EPS).
- Q4 2025 Revenue: $770 million, compared to analyst estimates of approximately $808.2 million.
- Q4 2025 Adjusted EPS: A loss of $0.09 per share, wider than the estimated loss of $0.056 per share.
For the full year 2025, revenue was $3.042 billion, a decline from the prior year's $3.356 billion. The company noted that the year-over-year decrease in pre-tax income, which swung to a loss of $160 million from a profit of $504 million in 2024, was "primarily caused by the divestiture-driven gains in the prior year."
Market Reaction and Price Action
The market's immediate response to the earnings release was sharply negative. In pre-market trading following the announcement, shares of Conduent fell approximately 9.7%. This sell-off suggests investors were focused on the revenue miss and the ongoing net losses, overshadowing other operational improvements highlighted by management. The stock had already been under pressure, declining roughly 33% over the past month leading into the report.
Key Financial and Operational Highlights
Beyond the headline misses, Conduent's report contained several data points management is emphasizing as signs of progress in its turnaround efforts.
- Adjusted EBITDA Improvement: The company's adjusted EBITDA margin showed year-over-year expansion, reaching 6.5% in Q4 2025, a 250 basis point improvement from 4.0% in the prior-year quarter. Full-year adjusted EBITDA grew to $164 million from $124 million.
- New Business Signings: Annual Contract Value (ACV) for new business signings was $152 million for the quarter and $517 million for the full year, indicating a continued flow of future revenue.
- Balance Sheet and Liquidity: Conduent ended the year with a cash balance of $243 million and $223 million in unused capacity under its credit facility. Total debt stood at $687 million ($22 million current, $665 million long-term).
CEO Commentary and Strategic Priorities
In the release, CEO Harsha V. Agadi described 2025 as a year of "mixed execution," noting strength in Government and Transportation segments but challenges in the Commercial segment. He outlined a clear set of priorities for the path forward, which include:
- Accelerating decision-making and operational speed.
- Enforcing strict financial discipline focused on margin expansion and free cash flow.
- Reducing the company's cost structure and organizational layers.
- Optimizing the business portfolio through a "fix, sell, or grow" strategy.
- Improving sales execution to convert pipeline into consistent revenue growth.
Agadi also pointed to opportunities in "AI- and GenAI-enabled solutions" as a potential growth lever.
Looking Ahead
The provided analyst estimates for the coming periods suggest expectations for continued challenges. For the full year 2026, analysts currently project sales of approximately $3.27 billion. For the upcoming first quarter of 2026, the consensus estimate is for revenue of about $820.6 million and an adjusted EPS loss of $0.066. Conduent's own commentary did not provide specific quantitative financial guidance for 2026, focusing instead on strategic priorities. The lack of a formal outlook that might exceed these subdued analyst projections likely contributed to the cautious market sentiment.
For a detailed breakdown of historical earnings and future analyst estimates for Conduent, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer to buy or sell any security. Investing carries risks, including the potential loss of principal.
