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What changed in CONDUENT Inc's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of CONDUENT Inc's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+298 added−307 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-19)

Top changes in CONDUENT Inc's 2025 10-K

298 paragraphs added · 307 removed · 224 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

76 edited+28 added−33 removed35 unchanged
Biggest changeCNDT 2024 Annual Report 5 Table of Contents • Industry Analyst Accolades: • NelsonHall Multi-Process HR Transformation NEAT 2024 – Leader (Focus Areas: Overall, Efficiency, North America, Europe, Multi-Country, Large Enterprise) • ISG Provider Lens Contact Center - Customer Experience Services US and Europe 2024 – Leader (Focus Areas: Digital Operations, Intelligent Agent Experience, Intelligent CX (AI & Analytics); also a Leader in Digital Operations (Global) • NelsonHall Healthcare Payer Operations Transformation NEAT 2024 – Leader (Focus Areas: Overall, Care Management & Wellness Services, Care Management Suitability, Claims Management Administration, Member Engagement Services & Enrollment, Provider Management Administration & Network Management) • Market Position: • Everest Group BPS Top 10 2024 - #8 • Gartner Market Share IT Services 2023 - BPO, Worldwide - #13 Segments We organize, manage and report our business through three reportable segments: Commercial: Our Commercial segment provides business process services that span our clients’ business processes end-to-end from the front-office to the back-office for a variety of commercial industries.
Biggest changeWe are recognized by independent industry analysts as leaders for many of these solutions. • Industry Analyst Accolades: • Nelson Hall Benefits Administration: Health & Welfare 2025 NEAT Leader - Marketplace Focus • Nelson Hall Healthcare Payer Agility & Innovation 2025 NEAT Leader - Overall • Nelson Hall Experience-Led HR Transformation 2025 NEAT Leader - Experience and Engagement Focus CNDT 2025 Annual Report 5 Table of Contents • Market Position: • Everest Group BPS Top 10 2025 - #9 • Gartner Market Share IT Services 2025 - BPO, Worldwide - #14 Segments We organize, manage and report our business through three reportable segments: Commercial: Our Commercial segment provides business process services that span our clients’ business processes end-to-end from the front-office to the back-office for a variety of commercial industries.
We serve a substantial portion of the public sector, providing market-leading government and transportation offerings that streamline enrollment and automate claims for government-funded programs such as Medicaid and accurately deliver benefits payments that residents depend on every day and seamlessly move travelers.
We serve a substantial portion of the public sector, providing market-leading government and transportation offerings that streamline enrollment and automate claims for government-funded programs such as Medicaid, accurately deliver benefits payments that residents depend on every day, and seamlessly move travelers.
In addition, we aim to achieve additional efficiencies through the following strategies: • AI and Automation : We will continue to invest in embedding GenAI/AI and intelligent process automation into existing operations, including automated document management, fraud prevention and detection, claims adjudication and customer experience.
In addition, we aim to achieve additional efficiencies through the following strategies: • AI and Automation : We will continue to invest in embedding GenAI/AI and intelligent process automation into existing operations, including automated document management, fraud detection and prevention, claims adjudication and customer experience.
Increasing globalization has also required many companies to optimize cost structures and engage AI-enabled business process solutions to retain competitiveness. Conduent is unique in that we have solutions that span the end-to-end value chains of our clients. This means that our clients can partner with us to support more of their business processes than other providers.
Increasing globalization has also required many companies to optimize cost structures and engage in AI-enabled business process solutions to retain competitiveness. Conduent is unique in that we have solutions that span the end-to-end value chains of our clients. This means that our clients can partner with us to support more of their business processes than other providers.
These solutions are both cross-industry and industry-specific in nature. Across the Commercial segment, we operate on our clients’ behalf to deliver mission-critical solutions and services to reduce costs, improve efficiencies and enable revenue growth for our clients and better experiences for their consumers and employees.
These solutions are both cross-industry and industry-specific in nature. Across the Commercial segment, we operate on our clients’ behalf to deliver mission-critical solutions and services to reduce costs, improve efficiencies and enable revenue growth for our clients, and deliver better experiences for their consumers and employees.
Corporate Ethics We operate according to our Ethics and Compliance Program, which is focused on sustaining an ethical culture and is designed to meet general governance and specific industry, regulatory and legal requirements. The Ethics and Compliance Program is based on our core values, including personal accountability, and overseen by Conduent’s Ethics Office.
Corporate Ethics We operate according to our Ethics and Compliance Program, which is focused on sustaining an ethical culture and is designed to meet general governance and specific industry, regulatory and legal requirements. The Ethics and Compliance Program is based on our core values, including personal accountability, and is overseen by Conduent’s Ethics Office.
Differentiated technology-led suite of multi-industry solutions: Through dedicated people, process expertise and technology, such as analytics and automation, Conduent solutions and services create value across multiple industries by creating efficiencies, improving experiences, reducing costs and enabling revenue growth while better serving millions of end users that depend on us.
Differentiated technology-led suite of multi-industry solutions: Through dedicated people, process expertise and technology, such as AI, analytics and automation, Conduent solutions and services create value across multiple industries by creating efficiencies, improving experiences, reducing costs and enabling revenue growth while better serving millions of end users that depend on us.
We leverage cloud computing, artificial intelligence ("AI"), machine learning, automation and advanced analytics to deliver mission-critical solutions. Through a dedicated global team of approximately 56,000 associates, process expertise and advanced technologies, our solutions and services digitally transform our clients’ operations to enhance customer experiences, improve performance, increase efficiencies and reduce costs.
We leverage cloud computing, artificial intelligence ("AI"), machine learning, automation and advanced analytics to deliver mission-critical solutions. Through a dedicated global team of approximately 51,000 associates, process expertise and advanced technologies, our solutions and services digitally transform our clients’ operations to enhance customer experiences, improve performance, increase efficiencies and reduce costs.
Within the Government Healthcare Solutions business, our revenue is primarily fixed fee or variable price based on a per call, per interaction or per member basis. • Government Service Solutions • With approximately $85 billion disbursed annually, we are a leader in government payment disbursements for federally sponsored programs including benefit card programs and payment card programs.
Within the Government Healthcare Solutions business, our revenue is primarily fixed fee or variable price based on a per call, per interaction or per member basis. • Government Service Solutions • With approximately $80 billion disbursed annually, we are a leader in government payment disbursements for federally sponsored programs including benefit card programs and payment card programs.
By understanding our clients' businesses, we deliver performance by optimizing processes to be more efficient, flexible and secure, and our innovative, tech-led solutions are highly configurable to meet our clients' needs. We deliver value by driving valuable outcomes and reducing costs at scale. We enhance customer experience by improving experiences, engagement and loyalty of end users.
By understanding our clients' businesses, we deliver performance by optimizing processes to be more efficient, flexible and secure, and our innovative, tech-led solutions are highly configurable to meet our clients' needs. We deliver value by driving better outcomes and reducing costs at scale. We enhance customer experience by improving experiences, engagement and loyalty of end users.
In the commercial market, competitive pressures are driving demand for increased productivity, efficiency and modern digital experiences, and these needs favor end-to-end solutions and outsourcing where we have an advantage. In addition, increasing globalization and the proliferation of AI-enabled solutions and applications creates opportunities we are poised to capitalize on.
In the commercial market, competitive pressures are driving demand for increased productivity, efficiency and modern digital experiences, and these needs favor end-to-end solutions and outsourcing where we have an advantage. In addition, increasing globalization and the proliferation of AI-enabled solutions and applications create opportunities we are poised to capitalize on.
Our team’s talent and dedication has resulted in Conduent serving 48 states, nearly half of the Fortune 100 companies and other leading companies, including: • 9 of the top 10 U.S. health insurers; • 6 of the top 10 pharma companies; • 4 of the top 5 automakers; and • 6 of the top 10 U.S. banks. • Offering Development : We continue to augment our portfolio of services and solutions with innovative technology capabilities, including cloud, data analytics, automation tools, generative AI ("GenAI")/ AI, digital payments and machine learning capabilities to create differentiated, high-value solutions for our clients, operate efficiently and enable greater penetration of attractive market segments.
Our team’s talent and dedication has resulted in Conduent serving 46 states, nearly half of the Fortune 100 companies and other leading companies, including: • 9 of the top 10 U.S. health insurers; • 7 of the top 10 pharma companies; • 4 of the top 5 automakers; and • 7 of the top 10 U.S. banks. • Offering Development : We continue to augment our portfolio of services and solutions with innovative technology capabilities, including cloud, data analytics, automation tools, generative AI ("GenAI")/ AI, digital payments and machine learning capabilities to create differentiated, high-value solutions for our clients, operate efficiently and enable greater penetration of attractive market segments.
In 2024, our existing clients renewed contracts with us and gave us more business in adjacent service lines and we also gained new clients. We measure success in “Growth” through revenue retention, our net Annual Recurring Revenue ("ARR") activity metric and new business signings, among other metrics.
In 2025, our existing clients renewed contracts with us and gave us more business in adjacent service lines and we also gained new clients. We measure success in “Growth” through revenue retention, our net Annual Recurring Revenue ("ARR") activity metric and new business signings, among other metrics.
We continue to drive progress by increasing system uptime, improving operational stability and creating client confidence and satisfaction by focusing on the following strategies: • Proactive, Real-time Monitoring of Applications and Service Performance : We continue to invest in AI and machine learning technologies to proactively monitor and prevent incidents. • Data Center Optimization : We have systematically consolidated the majority of our technology infrastructure into two primary data centers leading to increased processing speeds, redundancy and stability, and improved performance for our clients. • Improve End-User Experience : We are enhancing both user interfaces and experiences across our offerings by expanding self-service tools, AI-powered virtual assistants and mobile apps and by leveraging deeper user insights through analytics.
We continue to drive progress by increasing system uptime, improving operational stability and creating client confidence and satisfaction by focusing on the following strategies: • Proactive, Real-time Monitoring of Applications and Service Performance : We continue to invest in AI and machine learning technologies to proactively monitor and prevent incidents. • Data Center Optimization : We have systematically consolidated the majority of our technology infrastructure into two primary data centers, leading to increased processing speeds, redundancy and stability, as well as improved performance for our clients. • Improve End-User Experience : We are enhancing both user interfaces and experiences across our offerings by expanding self-service tools, AI-powered capabilities and mobile apps and by leveraging deeper user insights through analytics.
The content on any website referred to in this Form 10-K is not incorporated by reference in this Form 10-K unless expressly noted. Information about our Executive Officers The following is a list of the executive officers of Conduent as of February 19, 2025.
The content on any website referred to in this Form 10-K is not incorporated by reference in this Form 10-K unless expressly noted. Information about our Executive Officers The following is a list of the executive officers of Conduent as of February 19, 2026.
Our Competitive Strengths We possess competitive strengths that distinguish us from our competitors, including: Leadership in attractive growth markets: We are a leader in business process solutions that deliver exceptional outcomes for our clients on an unparalleled scale. Our clients continue to outsource key business processes to improve efficiency and to accelerate performance and digital transformation.
Our Competitive Strengths We possess competitive strengths that distinguish us from our competitors, including: Leadership in attractive growth markets: We are a leader in business process solutions that deliver exceptional outcomes for our clients on a massive scale. Our clients continue to outsource key business processes to improve efficiency and to accelerate performance and digital transformation.
We are widely recognized by industry analysts as a leader in healthcare payer operations, serving 9 of the top 10 U.S. health plans and providing administrative and mission-critical program administration solutions for government healthcare programs serving 119 million recipients in 34 states and the District of Columbia.
We are widely recognized by industry analysts as a leader in healthcare payer operations, serving 9 of the top 10 U.S. health plans and providing administrative and mission-critical program administration solutions for government healthcare programs serving over 111 million recipients in 34 states and the District of Columbia.
To capitalize on growth opportunities, we remain focused on several key strategies: • Sales Performance Optimization : We continue to optimize sales training, talent, processes and account management to strengthen client and prospect relationships to gain more selling opportunities both with new clients as well as greater share of wallet with existing clients.
To capitalize on growth opportunities, we remain focused on several key strategies: • Sales Performance Optimization : We continue to optimize sales training, talent, go-to-market processes and account management to strengthen client and prospect relationships to gain more selling opportunities with new clients as well as greater share of wallet with existing clients.
Our automation tools increase productivity through advanced data extraction and handling of structured and unstructured data, improve workflow efficiency through business rules and task automation and increase operational accuracy through predictive analytics.
Our automation capabilities increase productivity through advanced data extraction and handling of structured and unstructured data, improve workflow efficiency through business rules and task automation and increase operational accuracy through predictive analytics.
We estimate our addressable market size in the global business process services industry to be $210 billion in 2024, according to third-party industry reports. Many industry analysts and advisors place us as a leader across several segments in this large, diverse and growing market.
We estimate our addressable market size in the global business process services industry to be $219 billion in 2025, according to third-party industry reports. Many industry analysts and advisors place us as a leader across several segments in this large, diverse and growing market.
Benefit card programs are closed-loop solutions that support Supplemental Nutrition Assistance Program ("SNAP"), Temporary Assistance for Needy Families ("TANF") and Women, Infants and Children ("WIC"). Payment card programs are open-loop solutions that support child support and Unemployment Insurance ("UI").
Benefit card programs are closed-loop solutions that support Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families and Women, Infants and Children ("WIC"). Payment card programs are open-loop solutions that support child support and Unemployment Insurance.
Each day, our people and our digital business solutions and services serve millions of end users on behalf of our clients. Of our global team, nearly 40% is in North America with the remainder located primarily in our delivery centers in Asia Pacific, Latin America, the Caribbean and Europe.
Each day, our people and our digital business solutions and services serve millions of end users on behalf of our clients. Of our global team, approximately 34% is located in North America with the remainder located primarily in our delivery centers in Asia Pacific, Latin America, the Caribbean and Europe.
We deliver electronic payments for government services in 35 states, including 22 Electronic Benefit Transfer ("EBT") programs, 13 EBT for WIC programs and 6 Electronic Childcare programs. In our closed-loop payments solution, we generate revenue based on the number of cases or number of card holders.
We deliver electronic payments for government services in 35 states, including 21 Electronic Benefit Transfer ("EBT") programs, 13 EBT for WIC programs and 4 Electronic Childcare programs. In our closed-loop payments solution, we generate revenue based on the number of cases or number of card holders.
We serve marquee clients across multiple sectors including financial services, health and life sciences, logistics, retail, technology and telecom, travel and hospitality sectors, helping to resolve complex issues for the customers with empathy and effectiveness.
We serve marquee clients across multiple sectors, including the financial services, healthcare and life sciences, logistics, technology, telecom, travel and hospitality sectors, helping to resolve complex issues for our customers with empathy and effectiveness.
Availability of Company Information Our internet address is www.conduent.com . Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, our Proxy Statements and any amendments to these reports and statements are found on the Investors section of our website.
CNDT 2025 Annual Report 11 Table of Contents Availability of Company Information Our internet address is www.conduent.com . Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, our Proxy Statements and any amendments to these reports and statements are found on the Investors section of our website.
In 2024 alone, we processed nearly 450 million claims. Our cloud-native Conduent Medicaid Suite ("CMdS") is a modular software as a service ("SaaS") solution for state Medicaid agencies to transform from a legacy Medicaid Management Information System ("MMIS") to a digital, interoperable and scalable Medicaid Enterprise System.
In 2025 alone, we processed over 454 million claims. Our cloud-native Conduent Medicaid Suite ("CMdS") is a modular software as a service ("SaaS") solution for state Medicaid agencies to transform from a legacy Medicaid Management Information System ("MMIS") to a digital, interoperable and scalable Medicaid Enterprise System.
Through our portfolio of digital business solutions and services, we have reached significant scale in our businesses including: • Healthcare: The U.S. healthcare market is projected to grow at an average rate of 5.6% per year between 2023-2032.
Through our portfolio of digital business solutions and services, we have reached significant scale in our businesses including: • Healthcare: The U.S. healthcare market is projected to grow at an average rate of 5.8% per year between 2024-2033.
Our people, process expertise and technology elevate client outcomes every day. In 2024, we managed approximately 2.3 billion customer service interactions, captured and classified 10 billion documents and claims and supported millions of employees with human resource ("HR") services.
Our people, process expertise and technology elevate client outcomes every day. In 2025, we managed approximately 2 billion customer service interactions, captured and classified over 14 billion documents and claims, and supported millions of employees with human resource ("HR") services.
We maintain strong relationships with our clients from initial engagement to implementation and on-going service delivery. CNDT 2024 Annual Report 10 Table of Contents Intellectual Property Generally, our policy is to seek patent protection for those inventions likely to be incorporated into our products and services or where obtaining such proprietary rights will improve our competitive position.
We maintain strong relationships with our clients from initial engagement to implementation and on-going service delivery. Intellectual Property Generally, our policy is to seek patent protection for those inventions likely to be incorporated into our products and services or where obtaining such proprietary rights will improve our competitive position.
Each day, our solutions and services interact in the lives of millions of people in many ways - from safer, more seamless commutes that reduce congestion to streamlined benefits enrollment, digital payments, customer experiences and government healthcare claims. Conduent’s uniqueness, loyalty and dedication to service make for a future of robust value creation and growth.
Each day, our solutions and services interact in the lives of millions of people in many ways - from safer, more seamless commutes with reduced congestion to streamlined benefits enrollment, documents management, customer experiences and government healthcare claims. Conduent’s uniqueness, loyalty and dedication to service make for a future of robust value creation and growth.
We leverage our broad portfolio of offerings and dedicated team of associates to package solutions that exactly meet clients’ needs, while taking a disciplined approach to pricing and contracting. Our sales efforts typically involve extended selling cycles where our deep domain and industry expertise is critical to winning new business.
We leverage our broad portfolio of offerings and dedicated team of associates to package solutions that meet clients’ needs, CNDT 2025 Annual Report 9 Table of Contents while taking a disciplined approach to pricing and contracting. Our sales efforts typically involve extended selling cycles where our deep domain and industry expertise is critical to winning new business.
As of December 31, 2024, we had approximately 56,000 associates in 24 countries working towards a common vision and purpose, with approximately 40% located in North America and the remainder located primarily in Asia Pacific, Latin America and the Caribbean and Europe.
As of December 31, 2025, we had approximately 51,000 associates in 24 countries working towards a common vision and purpose, with approximately 34% located in North America and the remainder located primarily in Asia Pacific, Latin America and the Caribbean and Europe.
Our government portfolio includes government healthcare, eligibility and enrollment solutions, digital payments and child support payments, ensuring efficient Medicaid healthcare claims processing and delivery of benefits to the most vulnerable populations. Our solutions help state agencies determine eligibility, streamline enrollment, adjudicate claims and meet modularity mandates for government-funded healthcare programs.
Our government portfolio includes government healthcare, eligibility and enrollment solutions, digital payments and child support payments, ensuring efficient Medicaid healthcare claims processing and delivery of benefits to the most vulnerable populations while reducing the risk of fraud. Our solutions help state agencies determine eligibility, streamline enrollment, adjudicate claims and meet requirements for government-funded healthcare programs.
We help transportation agencies collect payments, manage operations, equipment and servicing, and enable digital transactions for transit and road usage charging globally, processing over 13 million tolling transactions every day while helping to reduce congestion. With approximately 56,000 associates globally as of December 31, 2024, we are dedicated to our clients' success.
We help transportation agencies collect payments, manage operations, equipment and servicing, reduce traffic congestion and enable digital transactions for transit and road usage charging globally, processing over 14 million tolling transactions every day. With approximately 51,000 associates globally as of December 31, 2025, we are dedicated to our clients' success.
The CXM business generally generates income on a per call, per agent, or per percentage of sales made basis. • Business Operations Solutions • In our BOS business, we help our clients digitally transform business processes and drive efficiency, automation and scale across essential business functions.
The CXM business generally generates income on a per call, per agent, or per percentage of sales made basis. • Business Process as a Service • We help our clients digitally transform business processes and drive efficiency, automation and scale across essential business functions.
Conduent’s healthcare capabilities have been recognized by NelsonHall and Everest Group. • Transportation: Traffic congestion continues to increase due to urbanization and changing global demographics. As a result, optimized transportation systems are becoming critical to increase efficiency while maintaining strict safety requirements.
Conduent’s healthcare capabilities have been recognized by NelsonHall and Everest Group. • Transportation: Traffic congestion continues to increase due to urbanization and changing global demographics. As a result, optimized transportation systems are becoming critical to increase efficiency while CNDT 2025 Annual Report 8 Table of Contents maintaining strict safety requirements.
As of December 31, 2024, we own approximately 504 U.S. patents and have 14 pending applications. Our patent portfolio evolves as new applications are filed, patents are awarded to us and as older patents expire. These patents expire at various dates, generally 20 years from their original filing dates.
As of December 31, 2025, we own approximately 489 U.S. patents and have 10 pending applications. Our patent portfolio evolves as new applications are filed, patents are awarded to us and as older patents expire. These patents expire on various dates, generally 20 years from their original filing dates.
To achieve this, we focus on delivering outcomes across three critical dimensions: Growth, Efficiency and Quality. Our strategy is designed to deliver shareholder value by creating profitable growth, expanding operating margins, identifying process efficiencies and employing a disciplined capital allocation strategy. We have identified specific execution strategies and key performance indicators across Growth, Efficiency and Quality.
Our strategy is designed to deliver shareholder value by creating profitable growth, expanding operating margins, identifying process efficiencies and employing a disciplined capital allocation strategy. We have identified specific execution strategies and key performance indicators across Growth, Efficiency and Quality.
CNDT 2024 Annual Report 8 Table of Contents Transportation On behalf of transportation authorities around the world, we deliver solutions to facilitate toll and fare collection, congestion and fleet management and digital payments that help streamline operations and increase revenue.
Transportation On behalf of transportation authorities around the world, we deliver solutions to facilitate toll and fare collection, congestion and fleet management, and digital payments that help streamline operations and increase revenue.
We create better experiences across the customer lifecycle through a variety of channels including social media, chat, email, voice and virtual agent to help customers where and how they want to engage. Through omni-channel communications, automation and analytics, as well as labor efficiencies, we help our clients to reduce costs, enable scale and drive revenue growth and efficiencies.
We create better experiences across the customer lifecycle through a variety of channels including chat, email, voice and virtual agents to help customers where and how they want to engage. Through omni-channel communications, automation and analytics, as well as labor efficiencies, we help our clients drive revenue growth, enable scale, and gain cost reductions and other operational efficiencies.
Securities and Exchange Commission ("SEC") and Nasdaq Global Select Market ("Nasdaq") rules. CNDT 2024 Annual Report 12 Table of Contents Seasonality Our revenues can be affected by various factors such as our clients’ demand patterns for our services, which includes peak windows for benefit enrollment, new product launches by clients and busy retail and travel seasons.
Securities and Exchange Commission ("SEC") and Nasdaq Global Select Market ("Nasdaq") rules. Seasonality Our revenues can be affected by various factors such as our clients’ demand patterns for our services, which include peak windows for benefit enrollment, new product launches by clients and busy retail and travel seasons.
We measure success in Efficiency through associate retention and adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") margin, among other metrics. Quality : Our clients depend on stable, high-quality service delivery.
We measure success in Efficiency through associate retention and adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") margin, among other metrics. CNDT 2025 Annual Report 4 Table of Contents Quality : Our clients depend on stable, high-quality service delivery.
Our Commercial segment is our largest segment, with segment revenue for 2024 of $1,606 million, representing 50.6% of our total revenues excluding divestitures. Government: Our Government segment provides government-centric services and solutions to U.S. federal, state, local and foreign governments for public assistance, healthcare programs and administration, transaction processing, payment services and case management.
Our Commercial segment is our largest segment, with segment revenue for 2025 of $1,511 million, representing 49.7% of our total revenues excluding divestitures. Government: Our Government segment provides government-centric services and solutions to U.S. federal, state, local and foreign governments for public assistance, healthcare program administration, transaction processing, eligibility and enrollment processing, payment services and case management.
He has held various accounting leadership roles of increasing responsibility at Conduent since 2017 and prior to that at Xerox Corporation. Mr. Abate began his accounting career in the Assurance Practice of KPMG, LLP. Mr. Abate holds a Bachelor of Science in Accounting from Fairfield University. CNDT 2024 Annual Report 13 Table of Contents Mr.
He has held various accounting leadership roles of increasing responsibility at Conduent since 2017 and prior to that at Xerox Corporation, Fine Host Inc. and Waste Management Inc. Mr. Abate began his accounting career in the Assurance Practice of KPMG, LLP. Mr. Abate holds a Bachelor of Science in Accounting from Fairfield University.
We also deliver government-distributed payments seamlessly and securely utilizing our proprietary software and expertise. In 2024, we processed nearly 450 million Medicaid claims and disbursed approximately $85 billion in government benefit payments.
We also deliver government-distributed payments seamlessly and securely utilizing our proprietary software and expertise. In 2025, we processed over 454 million Medicaid claims and disbursed approximately $80 billion in government benefit payments.
In this segment, we help governments respond to changing rules for eligibility and increasing citizen expectations, modernize legacy technology systems, combat benefits fraud and shift in response to an evolving regulatory environment. Our Government segment revenue for 2024 was $984 million, representing 31.0% of our total revenues excluding divestitures.
In this segment, we help governments respond to changing rules for eligibility and keep pace with increasing citizen expectations, modernize legacy technology systems, combat benefits fraud and adapt to an evolving regulatory environment. Our Government segment revenue for 2025 was $922 million, representing 30.3% of our total revenues excluding divestitures.
Each officer is elected to hold office until the meeting of the Board of Directors held on the day of the next annual meeting of shareholders, subject to the provisions of our by-laws.
Each officer is elected to hold office until the meeting of the Board of Directors held on the day of the next annual meeting of shareholders, subject to the provisions of our by-laws. Name Age Present Position Year Appointed to Present Position Conduent Officer Since Harsha V.
As of December 31, 2024, 44% of our employees were in high-cost countries and 56% were in low-cost countries.
As of December 31, 2025, 38% of our employees were in high-cost countries and 62% were in low-cost countries.
Prior to joining Conduent, from June 2015 to November 2019, Mr. Krawitz was Executive Vice President, General Counsel and Corporate Secretary of insurance services firm York Risk Services Group, a portfolio company of Onex Corp. From 2014 to 2015, he was Chief Legal Officer of Veriteq Corp., a biotech company. From 1999 to 2014, Mr.
Krawitz was Executive Vice President, General Counsel and Corporate Secretary of insurance services firm York Risk Services Group, a portfolio company of Onex Corp. From 2014 to 2015, he was Chief Legal Officer of Veriteq Corp., a biotech company. From 1999 to 2014, Mr. Krawitz held leadership roles in public and private companies in the technology and finance sectors. Mr.
Additionally, some trademarks were included with assets divested during the year. We vigorously enforce and protect our trademarks. People and Culture Headcount The skills, expertise and experience of our talented and diverse global workforce allow us to deliver mission-critical services and solutions that drive exceptional client outcomes.
People and Culture Headcount The skills, expertise and experience of our talented and diverse global workforce allow us to deliver mission-critical services and solutions that drive exceptional client outcomes.
Name Age Present Position Year Appointed to Present Position Conduent Officer Since Clifford Skelton (1) 69 President and Chief Executive Officer 2019 2019 George Abate (2) 63 Vice President, Chief Accounting Officer 2024 2024 Adam Appleby (2) 50 Executive Vice President, Public Sector Solutions 2024 2024 Mike McDaniel (2) 55 Executive Vice President, Commercial Solutions 2024 2024 Michael Krawitz 55 Executive Vice President, General Counsel and Secretary 2019 2019 Mark Prout 61 Executive Vice President, Chief Information & Technology Officer 2019 2020 Stephen Wood (2) 58 Executive Vice President, Chief Financial Officer 2021 2020 _____________________________ (1) Member of Conduent Board of Directors (2) Officer or executive officer of Conduent or its subsidiaries for less than five years As of February 19, 2025, there are no family relationships among any of the executive officers named above and any of our directors.
Agadi (1)(2) 63 President and Chief Executive Officer 2026 2026 George Abate (2) 64 Vice President, Chief Accounting Officer 2024 2024 Adam Appleby (2) 51 Executive Vice President, Public Sector Solutions 2024 2024 Giles Goodburn (2) 53 Executive Vice President, Chief Financial Officer 2025 2025 Michael Krawitz 56 Executive Vice President, General Counsel and Secretary 2019 2019 Anthony Marino (2) 62 Executive Vice President, Chief Administrative Officer 2025 2025 Mark Prout 61 Executive Vice President, Chief Information and Technology Officer 2019 2020 _____________________________ (1) Member of Conduent Board of Directors (2) Officer or executive officer of Conduent or its subsidiaries for less than five years As of February 19, 2026, there are no family relationships among any of the executive officers named above and any of our directors.
We streamline client operations through our deep industry experience, understanding of our clients’ needs and the latest technology solutions to reduce costs, improve security, performance and accuracy, and enable revenue growth while enhancing the end-user experience. Our portfolio of solutions spans automated document and data management, payments processing, finance, accounting and procurement, and financial industry solutions.
We streamline client operations through our deep industry experience, understanding of our clients’ needs and the latest technology solutions to reduce costs, CNDT 2025 Annual Report 6 Table of Contents improve security, performance and accuracy, and enable revenue growth, while enhancing the end-user experience.
In the United States, we own 38 registered trademarks, with 4 pending, reflecting the many businesses we participate in. These trademarks may have a perpetual life, subject to renewal every 10 years and may be subject to cancellation or invalidation based on certain use requirements and third-party challenges, or on other grounds.
These trademarks may have a perpetual life, subject to renewal every 10 years and may be subject to cancellation or invalidation based on certain use requirements and third-party challenges, or on other grounds. We vigorously enforce and protect our trademarks.
Appleby joined Conduent as Chief Operating Officer – Commercial Solutions in August 2020. He was Chief Operating Officer – Transportation Solutions from October 2022 until August 2023 and President – Transportation Solutions from August 2023 to July 2024. He was appointed to his current position as Executive Vice President, Public Sector Solutions in July 2024. In this role, Mr.
Appleby served the Company as President – Transportation Solutions from August 2023 until July 2024, Chief Operating Officer – Transportation Solutions from October 2022 until August 2023, and as Chief Operating Officer – Commercial Solutions from August 2020 until October 2022. In his current role, Mr.
CNDT 2024 Annual Report 6 Table of Contents Our Service Offerings Commercial Our technology-led solutions and services include Customer Experience Management ("CXM"), Business Operations Solutions ("BOS"), Healthcare Claims and Administration Solutions and Human Capital Solutions ("HCS"). • Customer Experience Management • We deliver a full range of customer contact services and customer communications, including customer care, technical support, loyalty management and outbound and inbound sales, handling many complex interactions and representing the brands of our client.
Our Service Offerings Commercial Our technology-led solutions and services include Customer Experience Management ("CXM"), Business Process as a Service ("BPaaS") and Integrated Digital Solutions ("IDS"). • Customer Experience Management • We deliver a full range of customer contact services, including customer care, technical support, loyalty management, and outbound and inbound sales, handling many complex interactions and representing the brands of our clients.
Within our open-loop payments solution, we generate revenue based on interchange fees and spending on cards as a percentage of transactions. • We also offer a broad set of child support services predominately to State Disbursement Units ("SDUs"), including processing and distributing payments, child support payment cards, childcare credentialing and case management, among others, to help states comply with federal standards.
CNDT 2025 Annual Report 7 Table of Contents • We also offer a broad set of child support services predominately to State Disbursement Units, including processing and distributing payments, child support payment cards, childcare credentialing and case management, among others, to help states comply with federal standards.
Appleby oversees the Company’s portfolio of Public Sector Solutions including Government Healthcare Solutions and Government Services Solutions in the Government segment, as well as Road Usage Charging Solutions, Transit Solutions and Commercial Vehicles in the Transportation segment. Prior to joining Conduent, Mr. Appleby was SVP, Client Operation, Credit Union Solutions at Fiserv from September 2018 until August 2020. Mr.
Appleby oversees the Company’s portfolio of Public Sector Solutions including Government Healthcare, Eligibility and Enrollment, Payments and Child Support in the Government segment, as well as Road Usage Charging Solutions, Transit Solutions and Commercial Vehicles in the Transportation segment. Prior to joining Conduent, Mr.
Recurring revenue model supported by a loyal, diverse client base: We have a broad and diverse base of clients across multiple geographies and industries, including nearly half of the Fortune 100 companies, midsize businesses and governmental entities. Our clients are increasingly satisfied as evidenced by our NPS that has increased by 38 points since becoming Conduent.
Recurring revenue model supported by a loyal, diverse client base: We have a broad and diverse base of clients across multiple geographies and industries, including nearly half of the Fortune 100 companies, midsize businesses and governmental entities. Our strong client relationships and successful client execution support our stable, recurring revenue model and high renewal rates.
We consider our "onshore", “near shore” and “offshore” delivery capabilities to be a competitive advantage. Our competitors range from large international companies to relatively small firms. Many of our competitors specialize in certain areas but none compete across all the same segments in our total portfolio which enables us to serve our clients end-to-end across their enterprises.
Many of our competitors specialize in certain areas but none compete across all the same segments in our total portfolio which enables us to serve our clients end-to-end across their enterprises.
With respect to internally developed software, we claim copyright on all such software, registering works which may be accessible to third parties. In addition, we rely on maintaining source code confidentiality to assure our market competitiveness. With respect to externally sourced software, we rely on contracts assuring our continued access for our business use.
Our business relies on software provided, to an approximately equal extent, by both internal development and external sourcing to deliver our services. With respect to internally developed software, we claim copyright on all such software, registering works which may be accessible to third parties. In addition, we rely on maintaining source code confidentiality to ensure our market competitiveness.
Hooker Center for Entrepreneurial Leadership at Bowling Green State University. Mr. Prout joined Conduent as Head of Information Technology in June of 2019. He was appointed Executive Vice President, Chief Information & Technology Officer in September 2019. Prior to joining Conduent, between 2005 and 2019, Mr.
He was appointed Executive Vice President, Chief Information & Technology Officer in September 2019. Prior to joining Conduent, between 2005 and 2019, Mr. Prout served as Chief Technology Officer of Fiserv, as well as held several IT leadership positions at Fiserv. Prior to Fiserv, he served as CIO of Cendian Corporation. Mr.
Prout served as Chief Technology Officer of Fiserv, as well as held several IT leadership positions at Fiserv. Prior to Fiserv, he served as CIO of Cendian Corporation. Mr. Prout has also held various leadership positions at United Parcel Service. Mr. Prout earned his Bachelor's degree in business management and programming from Southern Illinois University, Carbondale. Mr.
Prout has also held various leadership positions at United Parcel Service. Mr. Prout earned his Bachelor's degree in business management and programming from Southern Illinois University, Carbondale. CNDT 2025 Annual Report 13 Table of Contents
Our three reportable segments, Commercial, Government and Transportation, house most of our associates with approximately 40,600, 5,300 and 3,400 associates, respectively. Conduent Culture At Conduent, we work to build a culture where individuality is noticed and valued, and all associates feel like they belong and can bring their authentic selves to work.
Our three reportable segments, Commercial, Government and Transportation, house most of our associates with approximately 37,300, 4,800 and 3,100 associates, respectively. Conduent Culture At Conduent, we are committed to building a culture where individuality is recognized and valued, and where every associate feels a true sense of belonging and is empowered to bring their authentic self to work.
We drive progress through continuous process improvement and capitalizing on a range of staffing models, including flexible work from home and hybrid work and optimizing our geographic footprint.
We drive progress through continuous process improvement and capitalizing on a range of staffing models, including flexible work from home and hybrid work, as well as optimizing our geographic footprint. We continue to respond with agility to clients’ shifting needs as reflected in our Net Promoter Score ("NPS"), which has increased significantly since becoming Conduent in 2017.
In 2024, we launched a dedicated GenAI program with over 20 prioritized use cases to help drive quality, efficiency and faster cycle times in our clients' operations, as well as formed a GenAI innovation initiative with Microsoft. • Delivery Optimization : We continue to operate more efficiently through common processes with a shared services model that enables economies of scale and creates greater accountability for client performance.
In 2025, we continued a dedicated GenAI program with over 20 prioritized use cases to help drive quality, efficiency and faster cycle times in our clients' operations, as well as continued our GenAI innovation initiative with Microsoft.
Additionally, approximately 140 U.S. patents and applications were included with assets divested with the public safety business. While we believe that our portfolio of patents and applications has value, in general, no single patent is essential to our business or to any individual segment of our business.
While we believe that our portfolio of patents and applications has value, in general, no single patent is essential to our business or to any individual segment of our business. In addition, any of our proprietary rights could be challenged, invalidated, or circumvented, or may not provide significant competitive advantages.
Skelton earned his Bachelor of Arts degree from the University of Southern California and Master of Public Administration from Harvard University's John F. Kennedy School of Government. Mr. Abate was appointed Vice President – Chief Accounting Officer and Principal Accounting Officer in August 2024. In his current role, Mr. Abate oversees the Company’s accounting matters.
Agadi holds a Bachelor of Commerce from the University of Mumbai and an MBA from Duke University’s Fuqua School of Business. Mr. Abate has served as the Vice President – Chief Accounting Officer of the Company since August 2020 and was appointed Principal Accounting Officer in August 2024. In his current role, Mr. Abate oversees the Company’s accounting matters.
In 2024, Conduent was recognized among Newsweek’s Top 100 Global Most Loved Workplaces. This recognition was based largely on direct feedback gathered from our associates indicating a strong "emotional connection" between associates and our Company. We also continuously monitor our rankings and feedback from current associates on review sites such as Comparably.
This recognition was based largely on direct feedback gathered from our associates indicating a strong "emotional connection" between associates and Conduent. We also continuously monitor feedback through our annual associate engagement survey. In 2025, our overall engagement scores remained healthy and consistent with 2024.
Our focus on quality has resulted in continued client confidence and satisfaction which is reflected in our Net Promoter Score improvement as well as improved client retention rates. We measure “Quality” by service level agreement performance, system availability, technology incident rates and client satisfaction.
Our focus on quality has resulted in continued client confidence and satisfaction. We measure “Quality” by service level agreement performance, system availability, technology incident rates and client satisfaction. Investment Strategy : We maintain a balanced and disciplined approach to capital allocation including debt repayment, shareholder returns and internal investments.
Our strong client relationships and successful client execution support our stable recurring revenue model and high renewal rates. Competition Although we encounter competition in all areas of our portfolio, we are a leader in many categories. We compete based on technology, performance, quality, reliability, reputation, price, and customer service and support.
Competition Although we encounter competition in all areas of our portfolio, we are a leader in many categories. We compete based on technology, performance, quality, reliability, reputation, price, and customer service and support. We consider our "onshore", “near shore” and “offshore” delivery capabilities to be a competitive advantage. Our competitors range from large international companies to relatively small firms.
Electronic toll collection and public transit represent key growth drivers as governments at all levels increasingly focus on transportation infrastructure, and we process over 13 million tolling transactions every day.
Electronic toll collection and public transit represent key growth drivers as governments at all levels increasingly focus on transportation infrastructure, and we process over 14 million tolling transactions every day. • Integrated Digital Solutions: We provide high volume print and mail services, enrollment processing and personalized communications to large corporations and are a leading provider in this market with more than 14 billion documents captured, indexed and classified annually.
We continue to support an open and inclusive workplace where everyone, regardless of their differences, has an equal opportunity to thrive, do work that fulfills them and contribute their strengths. This commitment is essential to our business strategy, fuels our work for clients and carries forward to their millions of end-users who interact with us every day.
We foster an open and inclusive workplace where people of all backgrounds have equitable opportunities to grow, do meaningful work, and contribute their unique strengths. This commitment is foundational to our business strategy, strengthens how we serve our clients, and ultimately benefits the millions of end users who interact with Conduent every day.
Krawitz held leadership roles in public and private companies in the technology and finance sectors. Mr. Krawitz began his career at Fried Frank and earned his Bachelor of Arts in Economics and in Government from Cornell University and his Juris Doctor from Harvard Law School. Mr.
Krawitz began his career at Fried Frank and earned his Bachelor of Arts in Economics and in Government from Cornell University and his Juris Doctor from Harvard Law School. Mr. Marino joined Conduent in July 2025 as Chief Administrative Officer. Mr. Marino oversees key functions, including Human Resources, Marketing, Communications, and Procurement. Prior to Conduent, Mr.
Associate Engagement We continuously gather associate feedback through multiple touchpoints throughout the year and leverage that feedback to both inform our talent strategy and enhance our associate experience. These touchpoints include both external recognition surveys as well as feedback gathered through internal pulse surveys, exit surveys and our internal social platform used for open and transparent communications.
These touchpoints include both external recognition surveys as well as feedback gathered through internal pulse surveys, town halls, exit surveys and our internal social platform used for open and transparent communications. In 2025, Conduent was recognized among Newsweek’s Top 100 Global Most Loved Workplaces.
Our eight Employee Impact Groups ("EIGs") play a vital role in creating an environment of belonging and inclusion through year-round activities that advance culture and professional development, create a sense of community, and impact business outcomes.
Our eight Employee Impact Groups are central to advancing this culture of inclusion and belonging. Through year-round programming, they support professional development, strengthen community, elevate diverse perspectives, and drive measurable business impact.
Appleby earned his Bachelor of Science degree in Environmental Science and Systems Engineering from the U.S. Military Academy at West Point and he completed Leadership Development Programs at GE, Bank of America, Ally Financial and Fiserv. Mr. Krawitz has served as Executive Vice President, General Counsel and Secretary since November 2019.
Military Academy at West Point and he completed Leadership Development Programs at GE, Bank of America, Ally Financial and Fiserv. Mr. Goodburn was appointed as Chief Financial Officer of the Company in May 2025. Prior to his current role at Conduent, he served as Conduent’s Head of Investor Relations and Corporate FP&A from March 2020 until May 2025.
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We continue to be recognized for our commitment to fostering a culture of belonging and inclusion. CNDT 2024 Annual Report 3 Table of Contents In line with our strategic initiatives, as discussed in Part II, Item 8, Note 4 – Divestitures and Assets/Liabilities Held for Sale of this Form 10-K, we transferred or sold certain portfolios and businesses in 2024.
Added
We continue to be recognized for our commitment to fostering a culture of belonging and inclusion. CNDT 2025 Annual Report 3 Table of Contents Our Strategic Focus Our aim is to be the technology-led business solutions partner of choice for businesses and governments globally. To achieve this, we focus on delivering outcomes across three critical dimensions: Growth, Efficiency and Quality.
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These include our BenefitWallet health savings account and medical savings account portfolio (collectively, the "BenefitWallet Portfolio"), our Curbside Management and Public Safety Solutions businesses and our Casualty Claims Solutions business. Our Strategic Focus Our aim is to be the technology-led business solutions partner of choice for businesses and governments globally.
Added
In addition, we launched our AI Experience Center in our Florham Park, NJ headquarters to immerse our clients in AI innovations and demonstrate these solutions in production. • Delivery Optimization : We continue to operate more efficiently through common processes with a shared services model that enables economies of scale and creates greater accountability for client performance.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe may not be able to obtain or continue to obtain licenses and technologies from these third-parties at all or on reasonable terms, or such third-parties may demand cross-licenses to our intellectual property. It is also possible that our intellectual property rights could be challenged, invalidated or circumvented, allowing others to use our intellectual property to our competitive detriment.
Biggest changeIn addition, some of our service offerings rely on technologies developed by and licensed from third-parties. We may not be able to obtain or continue to obtain licenses and technologies from these third-parties at all or on reasonable terms, or such third-parties may demand cross-licenses to our intellectual property.
Our results of operations and financial condition could be materially adversely affected by changes in foreign currency exchange rates, as well as by several of other factors, including, without limitation, changes in economic conditions from country to country, changes in a country’s political conditions, trade controls and protection measures, financial sanctions, licensing requirements, local tax issues, capitalization and other related legal matters.
Our results of operations and financial condition could be materially adversely affected by changes in foreign currency exchange rates, as well as by several other factors, including, without limitation, changes in economic conditions from country to country, changes in a country’s political conditions, trade controls and protection measures, financial sanctions, licensing requirements, local tax issues, capitalization and other related legal matters.
As a result of all of these restrictions, we may be: • limited in how we conduct our business and pursue our strategy; • unable to raise additional debt financing to operate during general economic or business downturns; or • unable to compete effectively or to take advantage of new business opportunities.
As a result of all these restrictions, we may be: • limited in how we conduct our business and pursue our strategy; • unable to raise additional debt financing to operate during general economic or business downturns; or • unable to compete effectively or to take advantage of new business opportunities.
As a result, we are subject to numerous laws and regulations in the United States (both federal and state) and foreign laws and regulations designed to protect both individually identifiable information and personal health information, including the Health Insurance Portability and Accountability Act of 1996, as amended ("HIPAA"), and the regulations promulgated under HIPPA governing, among other things, the privacy, security and electronic transmission of individually identifiable health information, and the European Union General Data Protection Regulation ("GDPR"), which imposes stringent data protection requirements and significant penalties for non-compliance and has had a significant impact on how we process and handle certain data.
As a result, we are subject to numerous laws and regulations in the United States (both federal and state) and foreign laws and regulations designed to protect both individually identifiable information and personal health information, including the Health Insurance Portability and Accountability Act of 1996, as amended ("HIPAA"), and the regulations promulgated under HIPPA governing, among other things, the privacy, security and electronic transmission of individually identifiable health information, various state privacy laws, and the European Union General Data Protection Regulation ("GDPR"), which imposes stringent data protection requirements and significant penalties for non-compliance and has had a significant impact on how we process and handle certain data.
Our business may be adversely affected by geopolitical events and increasing geopolitical tensions, macroeconomic conditions, natural disasters and other factors that could directly impact certain of our employees, customers and vendors in countries or regions effected by such events and factors. We have a global workforce and global customers.
Our business may be adversely affected by geopolitical events and geopolitical tensions, macroeconomic conditions, natural disasters and other factors that could directly impact certain of our employees, customers and vendors in countries or regions effected by such events and factors. We have a global workforce and global customers.
Our business is dependent on continued interest in outsourcing. Our business and growth depend in large part on continued interest in outsourced business process services. Outsourcing means that an entity contracts with a third-party, such as us, to provide business process services rather than perform such services in-house.
Our business is dependent on continued interest in outsourcing. Our business and growth depend in large part on continued interest in outsourced business process services. Outsourcing means that an entity contracts a third-party, such as us, to provide business process services rather than perform such services in-house.
We have in the past been, and remain, susceptible to breach of security systems which may result and has resulted in unauthorized access to our facilities and those of our customers and/or the information we and our customers are trying to protect.
We have in the past been, and remain, susceptible to breach of security systems which may result and has resulted in unauthorized access to our facilities and those of our customers and/or access to and exfiltration of the information we and our customers are trying to protect.
Our employees and customers in a particular country or region in the world may be impacted as a result of a variety of diversions, including: geopolitical events and increasing geopolitical tensions, such as war, the threat of war, or terrorist activity (including the war in the Ukraine and the conflict in the Middle East); macroeconomic conditions, such as the level of inflation, economic activity and interest rates; natural disasters or the effects of climate change (such as drought, flooding, wildfires, increased storm severity, and sea level rise); power shortages or outages, major public health issues, including pandemics (such as the coronavirus); and significant local, national or global events capturing the attention of a large part of the population.
Our employees and customers in a particular country or region in the world may be impacted as a result of a variety of diversions, including: geopolitical events and geopolitical tensions, such as war, the threat of war, or terrorist activity (including the war in the Ukraine and the conflict in the Middle East); macroeconomic conditions, such as the level of inflation, economic activity and interest rates; natural disasters or the effects of climate change (such as drought, flooding, wildfires, increased storm severity, and sea level rise); power shortages or outages and major public health issues; and significant local, national or global events capturing the attention of a large part of the population.
Stock repurchases could have an impact on our common stock trading prices, increase the volatility of the price of our common stock, or reduce our available cash balance such that we will be required to seek financing to support our operations. There is no guarantee that the repurchase program, even though fully utilized, will enhance long-term stockholder value.
Stock repurchases could have an impact on our common stock trading prices, increase the volatility of the price of our common stock, or reduce our available cash balance such that we will be required to seek financing to support our operations. There is no guarantee that the repurchase program, even if fully utilized, will enhance long-term stockholder value.
We are potentially subject to various contingent liabilities that are not reflected on our balance sheet, including those arising as a result of being involved in a variety of claims, lawsuits, investigations and proceedings concerning: securities laws; governmental and non-governmental entity contracting, servicing and governmental entity procurement laws; intellectual property laws; environmental laws; employment laws; the Employee Retirement Income Security Act of 1974 ("ERISA"); and other laws, regulations and contractual undertakings, as discussed under Note 15 – Contingencies and Litigation to the Consolidated Financial Statements.
We are potentially subject to various contingent liabilities that are not reflected on our balance sheet, including those arising as a result of being involved in a variety of claims, lawsuits, investigations and proceedings concerning: securities laws; governmental and non-governmental entity contracting, servicing and governmental entity procurement laws; intellectual property laws; environmental laws; employment laws; the Employee Retirement Income Security Act of 1974 ("ERISA"); cyber-security and data privacy laws; and other laws, regulations and contractual undertakings, as discussed under Note 15 – Contingencies and Litigation to the Consolidated Financial Statements.
If a client is not satisfied with the quality of work CNDT 2024 Annual Report 16 Table of Contents performed by us or a subcontractor, or with the type of services or solutions delivered, or if we or our subcontractors fail to perform in accordance with contract requirements, then we could incur additional costs to address the situation, the profitability of that work might be impaired and the client’s dissatisfaction with our services could damage our ability to obtain additional work from that client or obtain new work from other potential clients.
If a client is not satisfied with the quality of work CNDT 2025 Annual Report 15 Table of Contents performed by us or a subcontractor, or with the type of services or solutions delivered, or if we or our subcontractors fail to perform in accordance with contract requirements, then we could incur additional costs to address the situation, the profitability of that work might be impaired and the client’s dissatisfaction with our services could damage our ability to obtain additional work from that client or obtain new work from other potential clients.
If we fail to attract, train and retain sufficient numbers of qualified engineers, technical staff and sales and marketing representatives, or if we are unable to contract with qualified, competent subcontractors, our results of operations and financial condition could be materially adversely affected.
If we fail to attract, train and retain enough qualified engineers, technical staff and sales and marketing representatives, or if we are unable to contract with qualified, competent subcontractors, our results of operations and financial condition could be materially adversely affected.
Additional laws of the United States and foreign jurisdictions apply to our processing of individually identifiable information. These laws have been subject to frequent changes, and new legislation in this area may be enacted at any time.
Additional laws of the United States (both federal and state) and foreign jurisdictions apply to our processing of individually identifiable information. These laws have been subject to frequent changes, and new legislation in this area may be enacted at any time.
Our results of operations and financial condition may be materially adversely affected by conditions abroad, including local economics, political environments, fluctuating foreign currencies and shifting regulatory schemes. Approximately 14% of our 2024 revenues was generated from operations outside the United States. In addition, we maintain significant operations outside the United States.
Our results of operations and financial condition may be materially adversely affected by conditions abroad, including local economics, political environments, fluctuating foreign currencies and shifting regulatory schemes. Approximately 16% of our 2025 revenues was generated from operations outside the United States. In addition, we maintain significant operations outside the United States.
Our success depends, in part, upon key managerial and technical personnel, including our ability to attract and retain additional qualified personnel, as well as qualified subcontractors. The loss of certain key personnel, such as our Chief Executive Officer ("CEO"), members of our executive team and other highly skilled employees, could materially adversely affect our results of operations and financial condition.
Our success depends, in part, upon key managerial and technical personnel, including our ability to attract and retain additional qualified personnel, as well as qualified subcontractors. The loss of certain key personnel, members of our executive team and other highly skilled employees, could materially adversely affect our results of operations and financial condition.
Such access could result in, among other things, unfavorable publicity and significant damage to our brand, governmental inquiry, oversight and possible regulatory action, difficulty in marketing our services, loss of existing and potential customers, allegations by our customers that we have not performed our contractual obligations, litigation by affected parties and possible financial obligations for substantial damages related to the theft or misuse of such information, any of which could materially adversely affect our results of operations and financial condition.
This and any other such access could result in, among other things, unfavorable publicity and significant damage to our brand, governmental inquiry, oversight and possible regulatory action, difficulty in marketing our services, loss of existing and potential customers, allegations by our customers that we have not performed our contractual obligations, costs for contractual service level requirements or other financial impact experienced by customers, litigation by affected parties and possible financial obligations for substantial damages related to the theft or misuse of such information, any of which could materially adversely affect our results of operations and financial condition.
Divestitures may result in losses on disposal or continued financial involvement in the divested business, including through indemnification, guarantee or other financial arrangements, for a period of time following the transaction, which would adversely affect our financial results. Refer to Note 4 – Divestitures and Assets/Liabilities Held for Sale to our Consolidated Financial Statements for additional information about our divestitures.
Divestitures may result in losses on disposal or continued financial involvement in the divested business, including through indemnification, guarantee or other financial arrangements, for a period of time following the transaction, which would adversely affect our financial results. Refer to Note 4 – Divestitures to our Consolidated Financial Statements for additional information about our divestitures.
Changes to existing laws, the introduction of new laws in this area or our failure to comply with existing laws that are applicable to us may subject us to, among other things, additional costs or changes to our business practices, liability for monetary damages, fines and civil and/or criminal prosecution, unfavorable publicity, restrictions on our ability to process and support financial transactions and allegations by our customers, partners and clients that we have not performed our contractual obligations.
Changes to existing laws, the introduction of new laws in this area or our failure to comply with existing laws CNDT 2025 Annual Report 19 Table of Contents that are applicable to us may subject us to, among other things, additional costs or changes to our business practices, liability for monetary damages, fines and civil and/or criminal prosecution, unfavorable publicity, restrictions on our ability to process and support financial transactions and allegations by our customers, partners and clients that we have not performed our contractual obligations.
These may restrict our and our subsidiaries’ ability to take some or all of the following actions: • incur or guarantee additional indebtedness or sell disqualified or preferred stock; • pay dividends on, make distributions in respect of, repurchase or redeem capital stock; • make investments or acquisitions; • sell, transfer or otherwise dispose of certain assets; • create liens; • enter into sale/leaseback transactions; • enter into agreements restricting the ability to pay dividends or make other intercompany transfers; • consolidate, merge, sell or otherwise dispose of all or substantially all of our or our subsidiaries’ assets; • enter into transactions with affiliates; • prepay, repurchase or redeem certain kinds of indebtedness; • issue or sell stock of our subsidiaries; and/or • significantly change the nature of our business.
These may restrict our and our subsidiaries’ ability to take some or all the following actions: • incur or guarantee additional indebtedness or sell disqualified or preferred stock; • pay dividends on, make distributions in respect of, repurchase or redeem capital stock; • make investments or acquisitions; • sell, transfer or otherwise dispose of certain assets; • create liens; • enter sale/leaseback transactions; • enter agreements restricting the ability to pay dividends or make other intercompany transfers; • consolidate, merge, sell or otherwise dispose of all or substantially all of our or our subsidiaries’ assets; • enter transactions with affiliates; • prepay, repurchase or redeem certain kinds of indebtedness; CNDT 2025 Annual Report 23 Table of Contents • issue or sell stock of our subsidiaries; and/or • significantly change the nature of our business.
CNDT 2024 Annual Report 17 Table of Contents The loss of key senior management or the failure to attract and retain necessary technical personnel and qualified subcontractors could materially adversely affect our results of operations and financial condition.
CNDT 2025 Annual Report 16 Table of Contents The loss of key senior management or the failure to attract and retain necessary technical personnel and qualified subcontractors could materially adversely affect our results of operations and financial condition.
Any additional actual or anticipated downgrades of our credit ratings, including any announcement that our ratings are under review for a downgrade, or perceived or actual weak financial performance may have a negative impact on our liquidity, capital position, access to capital markets and ability to obtain surety bonds, performance bonds and letters of credit sufficient to support our existing and future business needs.
Any additional actual or anticipated downgrades of our credit ratings, including any announcement that our ratings are under review for a downgrade, or perceived or actual weak financial performance may have a negative impact on our liquidity, capital position, access to capital markets and ability to obtain surety bonds, performance bonds and letters of credit sufficient to support our existing and future business needs, and may also increase the likelihood or magnitude of collateral demands under our business guarantees.
Future service disruptions could hinder CNDT 2024 Annual Report 18 Table of Contents our ability to attract new customers, cause us to incur legal liability, contractual penalties or issue service credits to our customers and cause us to lose current customers, each of which could have a material adverse effect on our business, results of operations and financial condition.
Future service disruptions could hinder our ability to attract new customers, cause us to incur legal liability, contractual penalties or issue service credits to our customers and cause us to lose current customers, each of which could have a material adverse effect on our business, results of operations and financial condition.
If we are unable to obtain adequate pricing for our services, it could materially adversely affect our results of operations and financial condition. In addition, our contracts are increasingly requiring tighter timelines for implementation as well as more stringent service level metrics.
If we are unable to obtain adequate pricing for our services, it could materially adversely affect CNDT 2025 Annual Report 24 Table of Contents our results of operations and financial condition. In addition, our contracts are increasingly requiring tighter timelines for implementation as well as more stringent service level metrics.
CNDT 2024 Annual Report 15 Table of Contents Our ability to recover capital and other investments in connection with our contracts is subject to risk.
CNDT 2025 Annual Report 14 Table of Contents Our ability to recover capital and other investments in connection with our contracts is subject to risk.
Moreover, security breaches have and could require us to devote significant management resources to address the problems created by the security breach and to expend significant additional resources to upgrade further the security measures that we employ to guard such personal information against "cyber-attacks" and to maintain various systems and data CNDT 2024 Annual Report 21 Table of Contents centers for our customers.
Moreover, security breaches have and could require us to devote significant management resources to address the problems created by the security breach and to expend significant additional resources to upgrade further the security measures that we employ to guard such personal information against "cyber-attacks" and to maintain various systems and data centers for our customers.
While we aim to develop and use AI responsibly and attempt to identify and mitigate ethical and legal issues presented by its use, we may be unsuccessful in identifying or resolving issues before they arise. As an evolving technology, AI may occasionally produce incomplete or misleading results.
While we aim to CNDT 2025 Annual Report 18 Table of Contents develop and use AI responsibly and attempt to identify and mitigate ethical and legal issues presented by its use, we may be unsuccessful in identifying or resolving issues before they arise. As an evolving technology, AI may occasionally produce incomplete or misleading results.
The failure to obtain or maintain a satisfactory credit rating and financial performance could adversely affect our liquidity, capital position, borrowing costs, access to capital markets and our need or ability to post surety or performance bonds to support clients’ contracts.
The failure to obtain or maintain a satisfactory credit rating and financial performance, or the requirement to post collateral for any of our business guarantees, could adversely affect our liquidity, capital position, borrowing costs, access to capital markets and our need or ability to post surety or performance bonds to support clients’ contracts.
There can be no assurance that the outcomes from these examinations will not have an adverse effect on our provision for income taxes and cash tax liability. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
There can be no assurance that the outcomes from these examinations will not have an adverse effect on our provision for income taxes and cash tax liability.
We have non-recurring revenue, which subjects us to a risk that our revenues and cash flows from operations may fluctuate from period to period. Revenue generated from our non-recurring services may fluctuate due to factors both within and outside of our control.
CNDT 2025 Annual Report 25 Table of Contents We have non-recurring revenue, which subjects us to a risk that our revenues and cash flows from operations may fluctuate from period to period. Revenue generated from our non-recurring services may fluctuate due to factors both within and outside of our control.
CNDT 2024 Annual Report 26 Table of Contents We are a holding company and, therefore, may not be able to receive dividends or other payments in needed amounts from our subsidiaries. Our principal assets are the shares of capital stock and indebtedness of our subsidiaries.
We are a holding company and, therefore, may not be able to receive dividends or other payments in needed amounts from our subsidiaries. Our principal assets are the shares of capital stock and indebtedness of our subsidiaries.
Even if we believe a claim is covered by insurance, insurers may dispute our CNDT 2024 Annual Report 22 Table of Contents entitlement to recovery for a variety of potential reasons, which may affect the timing and, if they prevail, the amount of our recovery.
Even if we believe a claim is covered by insurance, insurers may dispute our entitlement to recovery for a variety of potential reasons, which may affect the timing and, if they prevail, the amount of our recovery.
If an event of default occurs, the lenders would have the right to accelerate the repayment of such CNDT 2024 Annual Report 24 Table of Contents debt and the event of default or acceleration may result in the acceleration of the repayment of any other of our debt to which a cross-default or cross-acceleration provision applies.
If an event of default occurs, the lenders would have the right to accelerate the repayment of such debt and the event of default or acceleration may result in the acceleration of the repayment of any other of our debt to which a cross-default or cross-acceleration provision applies.
We may be required to record additional charges to earnings during the period in which any impairment of our goodwill or other intangible assets is determined which could adversely impact our results of operations. As of December 31, 2024, our goodwill balance was $609 million, which represented 23.4% of total consolidated assets.
We may be required to record additional charges to earnings during the period in which any impairment of our goodwill or other intangible assets is determined which could adversely impact our results of operations. As of December 31, 2025, our goodwill balance, related exclusively to our Government segment, was $617 million, which represented 25.7% of total consolidated assets.
CNDT 2024 Annual Report 23 Table of Contents Refer to Note 7 – Goodwill and Intangible Assets, Net to our Consolidated Financial Statements for additional information about our goodwill impairments. Our significant indebtedness could materially adversely affect our results of operations and financial condition. We have and will continue to have a significant amount of debt and other obligations.
Refer to Note 7 – Goodwill to our Consolidated Financial Statements for additional information about our goodwill impairments. Our significant indebtedness could materially adversely affect our results of operations and financial condition. We have and will continue to have a significant amount of debt and other obligations. Our substantial debt and other obligations could have important consequences.
Although there has been a recent shift in U.S. federal policy under the new presidential administration, many governments, regulators, investors, associates, clients and other stakeholders have been and/or remain focused on environmental, social and governance considerations relating to businesses, including climate change and greenhouse gas emissions, human rights, and diversity, equity and inclusion.
Although there has been a shift in U.S. federal policy under the current presidential administration, many governments, regulators, investors, associates, clients and other stakeholders have been and/or remain focused on environmental, social and governance considerations relating to businesses.
CNDT 2024 Annual Report 20 Table of Contents Our data systems, information systems and network infrastructure may be subject to hacking or other cybersecurity threats and other service interruptions, which could expose us to liability, impair our reputation or temporarily render us unable to fulfill our service obligations under our contracts.
Our data systems, information systems and network infrastructure have been, and may in the future be, subject to hacking or other cybersecurity threats and other service interruptions, which could expose us to liability, impair our reputation or temporarily render us unable to fulfill our service obligations under our contracts.
There can be no assurances as to the favorable outcome of any claim, lawsuit, investigation or proceeding.
There can be no assurances as to the favorable CNDT 2025 Annual Report 21 Table of Contents outcome of any claim, lawsuit, investigation or proceeding.
There is no assurance that we can retain our key managerial personnel, or that we can attract similar employees, in the future. In addition, because we operate in intensely competitive markets, our success depends to a significant extent upon our ability to attract, retain and motivate highly skilled and qualified technical personnel and to subcontract with qualified, competent subcontractors.
In addition, because we operate in intensely competitive markets, our success depends to a significant extent upon our ability to attract, retain and motivate highly skilled and qualified technical personnel and to subcontract with qualified, competent subcontractors.
We cannot guarantee that our stock repurchase program, although fully utilized to the full value approved, will enhance long-term stockholder value. Repurchases could increase the volatility of the price of our common stock and could have a negative impact on our available cash balance.
We cannot guarantee that our stock repurchase program will enhance long-term stockholder value. Repurchases could increase the volatility of the price of our common stock and could have a negative impact on our available cash balance. In May 2025, our Board of Directors authorized a three-year stock repurchase program for up to $50 million of our common stock.
The profitability of certain of our large contracts depends on our ability to successfully obtain payment from our clients of the amounts they owe us for work performed. Actual losses on client balances could differ from current estimates and, as a result, may require adjustment of our receivables for unbilled services. Our receivables include long-term contracts.
Actual losses on client balances could differ from current estimates and, as a result, may require adjustment of our receivables for unbilled services. Our receivables include long-term contracts.
Financial Risks We have recorded significant goodwill impairment charges and may be required to record additional charges to future earnings if our goodwill or intangible assets become impaired. We are required under generally accepted accounting principles to review our intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable.
We are required under generally accepted accounting principles to review our intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is required to be tested for impairment at least annually.
We also must ensure that all of our service offerings comply with both existing and newly enacted regulatory requirements in the countries in which they are sold.
It is also possible that our intellectual property rights could be challenged, invalidated or circumvented, allowing others to use our intellectual property to our competitive detriment. We also must ensure that all our service offerings comply with both existing and newly enacted regulatory requirements in the countries in which they are sold.
Several jurisdictions where we operate are considering or have proposed or enacted legislation and policies regulating AI and non-personal data, CNDT 2024 Annual Report 19 Table of Contents such as the European Union’s AI Act and the U.S.’s Executive Order on AI, and the recent elections may influence the regulatory landscape in the United States.
Several jurisdictions where we operate are considering or have proposed or enacted legislation and policies regulating AI and non-personal data, such as the European Union’s AI Act and the U.S.’s Executive Orders and U.S. state laws, some of which may be conflicting.
CNDT 2024 Annual Report 25 Table of Contents If we are unable to collect our receivables for billed or unbilled services, our results of operations and financial condition could be materially adversely affected.
If we are unable to collect our receivables for billed or unbilled services, our results of operations and financial condition could be materially adversely affected. The profitability of certain of our large contracts depends on our ability to successfully obtain payment from our clients of the amounts they owe us for work performed.
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For example, establishing internal automation processes to help us develop new service offerings will require significant up-front costs and resources, which, if not monetized effectively, could materially adversely affect our revenues. In addition, some of our service offerings rely on technologies developed by and licensed from third-parties.
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There is no assurance that we can retain our key managerial personnel, or that we can attract similar employees, in the future. Our business strategy largely depends on the success of our recent CEO transition. On January 16, 2026, Clifford Skelton stepped down from his position as President and Chief Executive Officer, and the Company appointed Harsha V.
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In May 2023, our Board of Directors authorized a three-year stock repurchase program for up to $75 million of our common stock. This program was completed in September 2024.
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Agadi, Chairman of the Board, as his successor. Any significant leadership change involves inherent risk and can be difficult to manage. Our new CEO is critical to executing on and achieving our business strategy, and our success depends, in large part, on the effectiveness of this transition.
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Goodwill is required to be tested for impairment at least annually.
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If our new CEO is unsuccessful at leading the Company and our management team, or is unable to successfully execute the Company’s strategy, our business may be harmed and our results of operations and financial condition may be adversely affected.
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Our substantial debt and other obligations could have important consequences.
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We have systematically consolidated the majority of our technology CNDT 2025 Annual Report 17 Table of Contents infrastructure into two primary data centers leading to increased processing speeds, redundancy and stability, and improved performance for our clients.
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In addition, complying or failing to comply with existing or future federal, state, local, and foreign legislation and regulations applicable to our environmental, social and governance goals and initiatives, which may conflict with one another, could cause us to incur additional compliance and operational costs or actions and suffer reputational harm, which could materially and adversely affect our business, financial condition and results of operations.
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For example, on January 13, 2025, the Company experienced an operational disruption and learned that a threat actor gained unauthorized access to a limited portion of the CNDT 2025 Annual Report 20 Table of Contents Company’s environment and exfiltrated a set of files associated with a subset of the Company’s clients.
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For additional information, refer to Management's Discussion and Analysis of Financial Condition and Results of Operation – “Cyber Event” in Part II, Item 7 to this 10-K and Note 15 – Contingencies and Litigation to our Consolidated Financial Statements of Part II, Item 8 to this 10-K.
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CNDT 2025 Annual Report 22 Table of Contents Financial Risks We have recorded significant goodwill impairment charges and may be required to record additional charges to future earnings if our goodwill or intangible assets become impaired.
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These instruments are generally issued by insurance companies or other financial institutions and typically include provisions that allow the issuer, in its discretion, to require us to post collateral.
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Collateral demands may be based on factors outside our control—including the issuer’s internal risk assessments, changes in market conditions, or their evaluation of our financial position—and may occur with little or no advance notice. Any such requirement could exceed our available liquidity or require us to divert capital from other operational or strategic uses.
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If we are unable to satisfy a collateral demand, the issuer may take actions that could impair our ability to continue performing under the related contracts, which could harm our reputation, restrict our ability to bid on future work or result in financial penalties.
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Any significant collateral demand, individually or in the aggregate, could materially adversely affect our liquidity, financial condition and results of operations. Refer to Note 15 – Contingencies and Litigation to the Consolidated Financial Statements for additional information.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs noted above, we face a number of cybersecurity risks in connection with our business and, from time to time, experience or are subject to a variety of cybersecurity incidents that arise during the ordinary course of our business.
Biggest changeAs noted above, we face a number of cybersecurity risks in connection with our business and, from time to time, experience or are subject to a variety of cybersecurity incidents that arise during the ordinary course of our business, such as the previously disclosed January 2025 Cyber Event (for additional information, refer to Management's Discussion and Analysis of Financial Condition and Results of Operation – “Cyber Event” in Part II, Item 7 to this 10-K and Note 15 – Contingencies and Litigation to our Consolidated Financial Statements of Part II, Item 8 to this 10-K).
We maintain a cybersecurity risk management program to assess, identify, manage, mitigate, and respond to material risks from cybersecurity threats to both our corporate information technology environment and to customer-facing products.
We maintain a cybersecurity risk management program to assess, identify, manage, mitigate, and respond to material risks from cybersecurity threats to both our corporate information technology environment and customer-facing products.
The CISO approves the cybersecurity policies and procedures, implementation of controls, monitoring and detection programs and employee training on cybersecurity risks. The CISO also reports cybersecurity risks and strategies directly to executive leadership.
The CISO approves cybersecurity policies and procedures, implementation of controls, monitoring and detection programs and employee training on cybersecurity risks. The CISO also reports cybersecurity risks and strategies directly to executive leadership.
Our systems that manage customer-facing products, where appropriate and contractually required, are certified/attested to applicable security standards, including, without limitation, National Institute of Standards and Technology ("NIST") (NIST Special Publication 800-53 rev 5 moderate baseline), Payment Card Industry Data Security Standard ("PCI-DSS"), Health Insurance Portability and Accountability Act ("HIPAA"), International Organization for Standardization ("ISO"), and the International Electrotechnical Commission ("IEC") Standard (ISO/IEC 27001:2013 & ISO 9001:2015).
Our systems that manage customer-facing products, where appropriate and contractually required, are certified/attested to applicable security standards, including, without limitation, National Institute of Standards and Technology ("NIST") (NIST Special Publication 800-53 rev 5 moderate baseline), Payment Card Industry Data Security Standard ("PCI-DSS"), Health Insurance Portability and Accountability Act ("HIPAA"), International Organization for Standardization ("ISO"), the International Electrotechnical Commission ("IEC") Standard (ISO/IEC 27001:2013 & ISO 9001:2015), and Systems and Organization Controls ("SOC") 2 standards.
The Risk Committee also conducts an annual review that includes a survey of enhancements to the Company’s defenses and a cyber trend report, as well as management’s progress in implementing the Company’s cybersecurity strategic roadmap and compliance initiatives.
The Risk Committee also conducts an annual review that includes a survey of enhancements to the Company’s defenses as well as management's progress in implementing the Company's cybersecurity strategic roadmap and compliance initiatives.
New information concerning any known cybersecurity incidents that have occurred prior to the date of this report, however, could change our current belief and could result in a material adverse effect on our business strategy, results of operations, reputation or financial condition. In addition, future cybersecurity incidents could materially affect our strategy, results of operations, reputation or financial condition.
New information discovered after the date of this report concerning any known cybersecurity incidents that have occurred prior to the date of this report, however, could change our current belief and could result in a material adverse effect on our business strategy, results of operations, reputation or financial condition.
This oversight is facilitated primarily through the Risk Oversight Committee of the Board (the “Risk Committee”), which reviews the ERM program, related assessments and remediation activities for subsequent review by the Board.
Our Board of Directors (the “Board”) maintains oversight responsibility for our ERM program. This oversight is facilitated primarily through the Risk Oversight Committee of the Board (the “Risk Committee”), which reviews the ERM program, related assessments and remediation activities for subsequent review by the Board.
Our policies and CNDT 2024 Annual Report 27 Table of Contents procedures concerning cybersecurity matters include processes to safeguard our information systems, monitor these systems, protect the confidentiality and integrity of our data, train and raise awareness of cybersecurity threats among employees, detect intrusions into our systems, and respond to cybersecurity incidents.
Our policies and procedures concerning cybersecurity matters include processes to safeguard our information systems, monitor these systems, protect the confidentiality and integrity of our data, train and raise awareness of cybersecurity threats among employees, detect intrusions into our systems, and respond to cybersecurity incidents.
The cybersecurity team also regularly prepares a cyber report that includes metrics and compliance performance, collects data on cybersecurity threats and risks and conducts an annual risk assessment, which it uses to assess and refine Conduent's overall security posture.
The cybersecurity team also regularly prepares a cyber update that includes metrics and compliance performance, incorporating data on cybersecurity threats and risks, which it uses to assess and refine Conduent's overall security posture.
Procedures exist to CNDT 2024 Annual Report 28 Table of Contents ensure the Risk Committee of the Board of Directors, and if appropriate, the full Board of Directors are notified about cybersecurity incidents being assessed by the IRMAC.
Procedures exist to ensure the Risk Committee of the Board of Directors, and if appropriate, the full Board of Directors is notified about cybersecurity incidents being assessed by the IRMAC.
We assess key third-party cybersecurity controls through a cybersecurity questionnaire, require the implementation of certain security controls in our contracts where applicable, monitor the third party, and maintain the ability to discontinue our engagement with a key vendor if its cybersecurity posture fails to meet pre-established standards. Our Board of Directors (the “Board”) maintains oversight responsibility for our ERM program.
We assess key third-party cybersecurity controls through a cybersecurity questionnaire, require the implementation of certain security controls in our CNDT 2025 Annual Report 27 Table of Contents contracts where applicable, monitor the third party, and maintain the ability to discontinue our engagement with a key vendor if its cybersecurity posture fails to meet pre-established standards.
As of the date of this report, we do not believe that any risks from cybersecurity threats, including as a result of any known cybersecurity incidents, have materially affected, or are reasonably likely to materially affect, the Company.
As of the date of this report, apart from the January 2025 Cyber Event (for which we maintain a liability on the Consolidated Balance Sheet for our expected remaining cash outlay), we do not believe that any risks from cybersecurity threats, including because of any known cybersecurity incidents, have materially affected, or are reasonably likely to materially affect, the Company.
See Item 1A. Risk Factors for additional information on how risks could materially affect the Company.
In addition, future cybersecurity incidents could materially affect our strategy, results of operations, reputation or financial condition. See Item 1A. Risk Factors for additional information on how risks could materially affect the Company.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeBecause of the interrelation of our business segments, each of the segments uses substantially all of these properties at least in part. We have aggressively pursued portfolio reduction opportunities through lease terminations, subleases and consolidation of properties. Partially offsetting these reductions, in 2024, we executed strategic portfolio expansions in the Philippines and Guatemala.
Biggest changeBecause of the interrelation of our business segments, each of the segments uses substantially all of these properties at least in part. CNDT 2025 Annual Report 28 Table of Contents We have aggressively pursued portfolio reduction opportunities through lease terminations, subleases and consolidation of properties.
The size of our property portfolio as of December 31, 2024 was approximately 4.6 million square feet at an annual operating cost (lease costs and expenses) of approximately $118 million and was composed of 158 leased properties and 3 owned properties. We believe that our current facilities are suitable and adequate for our current business.
The size of our property portfolio as of December 31, 2025 was approximately 4.4 million square feet at an annual operating cost (lease costs and expenses) of approximately $110 million and was composed of 149 leased properties and 3 owned properties. We believe that our current facilities are suitable and adequate for our current business.
As a result, the portfolio net reduction was approximately 0.3 million square feet during the year ended December 31, 2024. We will continue efforts to optimize our workforce location strategy. ITEM 3.
Partially offsetting these reductions, in 2025, we executed strategic portfolio expansions in India, the Philippines and key relocations in the United States. As a result, the portfolio net reduction was approximately 0.2 million square feet during the year ended December 31, 2025. We will continue efforts to optimize our workforce location strategy. ITEM 3.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers On May 16, 2023, the Board of Directors authorized a three-year share repurchase program, granting approval for the Company to repurchase up to $75 million of its common stock from time to time as market and business conditions warrant, including through open market purchases or Rule 10b5-1 trading plans.
Biggest changePerformance Graph Purchases of Equity Securities by the Issuer and Affiliated Purchasers Share repurchase activity during the three months ended December 31, 2025 was as follows: Period Total Number of Shares Purchased (1) Average Price Paid Per Share (2) Total Number of Shares Purchased as a Part of Publicly Announced Plan Approximate Dollar Value of Shares that May Yet Be Purchased Under Plan (in millions) October 1-31, 2025 1,834,998 $ 2.58 1,834,998 $ 25 November 1-30, 2025 — — — 25 December 1-31, 2025 — — — 25 Total 1,834,998 $ — 1,834,998 $ 25 (1) On May 20, 2025, the Board of Directors authorized a three-year share repurchase program, granting approval for the Company to repurchase up to $50 million of its common stock from time to time as market and business conditions warrant, including through open market purchases or Rule 10b5-1 trading plans.
Conduent Common Stock Dividends We did not pay any dividends on our common stock in 2024. We intend to retain future earnings for use in the operation of our business and to fund future growth. We do not anticipate paying any dividends on our common stock for the foreseeable future.
Conduent Common Stock Dividends We did not pay any dividends on our common stock in 2025. We intend to retain future earnings for use in the operation of our business and to fund future growth. We do not anticipate paying any dividends on our common stock for the foreseeable future.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stock Exchange Information The common stock of Conduent trades on Nasdaq under the ticker "CNDT". Common Shareholders of Record There w ere 12,008 shareholders o f record as of January 31, 2025.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stock Exchange Information The common stock of Conduent trades on Nasdaq under the ticker "CNDT". Common Shareholders of Record There w ere 10,626 shareholders o f record as of January 31, 2026.
CNDT 2024 Annual Report 30 Table of Contents Securities Authorized for Issuance Under Existing Equity Compensation Plans Information about securities authorized for issuance under existing equity compensation plans is incorporated by reference from Item 12—Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. ITEM 6. [RESERVED]
(2) Average share price includes transaction commissions. CNDT 2025 Annual Report 30 Table of Contents Securities Authorized for Issuance Under Existing Equity Compensation Plans Information about securities authorized for issuance under existing equity compensation plans is incorporated by reference from Item 12—Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. ITEM 6. [RESERVED]
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Performance Graph Historically, we have presented the S&P 500 as our published market index and the S&P 500 Data Processing and Outsourced Services index as our published industry index.
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In 2024, we reevaluated our market and industry indices and determined that, as we are a component of the Russell 2000 and S&P 1500 Data Processing and Outsourced Services indices, these would be more appropriate indices for comparative purposes.
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For this fiscal year only, we are presenting both market and industry indices in the graph above for comparative purposes to prior fiscal year graphs.
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This program was completed in September 2024. There were no share repurchases during the three months ended December 31, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCNDT 2024 Annual Report 36 Table of Contents Segment Performance Review Commercial Government Transportation Divestitures Unallocated Costs Total (in millions) Reportable Segments Year Ended Dec 31, 2024 Total Revenue $ 1,606 $ 984 $ 586 $ 180 $ — $ 3,356 Segment profit (Loss) $ 77 $ 166 $ (25) $ 35 $ (287) $ (34) Segment depreciation and amortization $ 92 $ 44 $ 25 $ 13 $ 28 $ 202 Adjusted EBITDA (1) $ 169 $ 210 $ — $ 48 $ (255) $ 172 % of Total Revenue 47.9 % 29.3 % 17.4 % 5.4 % — % 100.0 % Adjusted EBITDA Margin (1)(2) 10.5 % 21.3 % — % 26.7 % — % 5.1 % Year Ended Dec 31, 2023 Total Revenue $ 1,668 $ 1,094 $ 558 $ 402 $ — $ 3,722 Segment profit (Loss) $ 36 $ 284 $ (7) $ 103 $ (304) $ 112 Segment depreciation and amortization $ 129 $ 41 $ 26 $ 28 $ 36 $ 260 Adjusted EBITDA (1) $ 165 $ 325 $ 19 $ 131 $ (262) $ 378 % of Total Revenue 44.8 % 29.4 % 15.0 % 10.8 % — % 100.0 % Adjusted EBITDA Margin (1)(2) 9.9 % 29.7 % 3.4 % 32.6 % — % 10.2 % Year Ended Dec 31, 2022 Total Revenue $ 1,769 $ 1,150 $ 562 $ 377 $ — $ 3,858 Segment profit (Loss) $ 71 $ 294 $ 34 $ 70 $ (293) $ 176 Segment depreciation and amortization $ 94 $ 37 $ 21 $ 22 $ 46 $ 220 Adjusted EBITDA (1) $ 165 $ 331 $ 55 $ 92 $ (247) $ 396 % of Total Revenue 45.8 % 29.8 % 14.6 % 9.8 % — % 100.0 % Adjusted EBITDA Margin (1)(2) 9.3 % 28.8 % 9.8 % 24.4 % — % 10.3 % (1) Refer to "Non-GAAP Financial Measures" section for an explanation of the non-GAAP financial measure.
Biggest changeCNDT 2025 Annual Report 36 Table of Contents Segment Performance Review Commercial Government Transportation Divestitures Unallocated Costs Total (in millions) Reportable Segments Year Ended Dec 31, 2025 Total Revenue $ 1,511 $ 922 $ 609 $ — $ — $ 3,042 Segment profit (Loss) $ 66 $ 175 $ (12) $ — $ (285) $ (56) Segment depreciation and amortization $ 88 $ 46 $ 30 $ — $ 31 $ 195 Adjusted EBITDA (1) $ 154 $ 221 $ 18 $ — $ (229) $ 164 % of Total Revenue 49.7 % 30.3 % 20.0 % — % — % 100.0 % Adjusted EBITDA Margin (1)(2) 10.2 % 24.0 % 3.0 % — % — % 5.4 % Year Ended Dec 31, 2024 Total Revenue $ 1,606 $ 984 $ 586 $ 180 $ — $ 3,356 Segment profit (Loss) $ 77 $ 166 $ (25) $ 35 $ (287) $ (34) Segment depreciation and amortization $ 92 $ 44 $ 25 $ 13 $ 28 $ 202 Adjusted EBITDA (1) $ 169 $ 210 $ — $ 48 $ (255) $ 172 % of Total Revenue 47.9 % 29.3 % 17.4 % 5.4 % — % 100.0 % Adjusted EBITDA Margin (1)(2) 10.5 % 21.3 % — % 26.7 % — % 5.1 % (1) Refer to "Non-GAAP Financial Measures" section for an explanation of the non-GAAP financial measure.
Senior management has discussed the development and selection of the critical accounting policies, estimates and related disclosures included herein with the Audit Committee of the Board of Directors.
Senior management has discussed the development and selection of critical accounting policies, estimates and related disclosures included herein with the Audit Committee of the Board of Directors.
A reconciliation of the non-GAAP financial measures Adjusted EBITDA and EBITDA Margin to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP are provided in the Segment Performance Review above.
A reconciliation of the non-GAAP financial measures Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP are provided in the Segment Performance Review above.
This MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes in this Form 10-K for the year ended December 31, 2024. This MD&A provides additional information about our operations, current developments, financial condition, cash flows and results of operations.
This MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes in this Form 10-K for the year ended December 31, 2025. This MD&A provides additional information about our operations, current developments, financial condition, cash flows and results of operations.
Other Contingencies and Commitments As more fully discussed in Note 15 – Contingencies and Litigation to the Consolidated Financial Statements, we are involved in a variety of claims, lawsuits, investigations and proceedings concerning: securities law; governmental entity contracting, servicing and procurement law; intellectual property law; employment law; the Employee Retirement Income Security Act ("ERISA"); and other laws and regulations.
Other Contingencies and Commitments As more fully discussed in Note 15 – Contingencies and Litigation to the Consolidated Financial Statements, we are involved in a variety of claims, lawsuits, investigations and proceedings concerning: securities law; governmental entity contracting, servicing and procurement law; intellectual property law; employment law; the Employee Retirement Income Security Act ("ERISA"); data privacy and cybersecurity laws; and other laws and regulations.
Investing Activities The increase in cash provided by investing activities of $888 million was primarily due to the proceeds from our 2024 divestitures of $830 million and proceeds from the settlement of the Skyview matter related to notes receivable of $21 million. In addition, there was a planned decrease in capital spending in the current year.
Investing Activities The decrease in cash provided by investing activities of $823 million was primarily due to the proceeds from our divestitures of $830 million and proceeds from the settlement of the Skyview matter related to notes receivable of $21 million in 2024. In addition, there was a planned increase in capital spending in the current year of $25 million.
Through a dedicated global team of approximately 56,000 associates, process expertise and advanced technologies, our solutions and services digitally transform our clients’ operations to enhance customer experiences, improve performance, increase efficiencies and reduce costs. Headquartered in Florham Park, New Jersey, we have operations in 24 countries as of December 31, 2024.
Through a dedicated global team of approximately 51,000 associates, process expertise and advanced technologies, our solutions and services digitally transform our clients’ operations to enhance customer experiences, improve performance, increase efficiencies and reduce costs. Headquartered in Florham Park, New Jersey, we have operations in 24 countries as of December 31, 2025.
The year-over-year comparisons in this MD&A are as of and for the years ended December 31, 2024 and 2023, unless stated otherwise.
The year-over-year comparisons in this MD&A are as of and for the years ended December 31, 2025 and 2024, unless stated otherwise.
The 2024 rate was lower than the U.S. statutory rate of 21% due to favorable permanent adjustments from the internal reorganization and outside basis on a stock sale partially offset by the non-deductible Transportation reporting unit goodwill impairment, tax reserves and geographic mix of income.
The 2024 rate was lower than the U.S. statutory rate of 21%, primarily due to favorable permanent differences from an internal reorganization and outside basis on a stock sale partially offset by non-deductible Transportation reporting unit goodwill impairment, tax reserves and geographic mix of income.
Unrecognized tax benefits were $19 million, $10 million and $12 million at December 31, 2024, 2023 and 2022, respectively. Refer to Note 14 – Income Taxes to the Consolidated Financial Statements for additional information regarding deferred income taxes and unrecognized tax benefits.
Unrecognized tax benefits were $19 million, $19 million and $10 million at December 31, 2025, 2024 and 2023, respectively. Refer to Note 14 – Income Taxes to the Consolidated Financial Statements for additional information regarding deferred income taxes and unrecognized tax benefits.
Future interest payments associated with this debt, which has maturities through 2029, are forecast to be $192 million, of which $43 million is due within 12 months. Refer to Note 10 – Debt to the Consolidated Financial Statements for additional information. Operating Leases In the ordinary course of business, we enter into operating lease arrangements for certain equipment and facilities.
Future interest payments associated with this debt, which has maturities through 2029, are forecast to be $162 million, of which $44 million is due within 12 months. Refer to Note 10 – Debt to the Consolidated Financial Statements for additional information. Operating Leases In the ordinary course of business, we enter operating lease arrangements for certain equipment and facilities.
Management cautions that amounts presented in accordance with Conduent's definition of Adjusted EBITDA and Adjusted EBITDA Margin may not be comparable to similar measures disclosed by other companies because not all companies calculate Adjusted EBITDA and Adjusted EBITDA Margin in the same manner. CNDT 2024 Annual Report 46 Table of Contents
Management cautions that amounts presented in accordance with Conduent's definition of Adjusted EBITDA and Adjusted EBITDA Margin may not be comparable to similar measures disclosed by other companies because not all companies calculate Adjusted EBITDA and Adjusted EBITDA Margin in the same manner. CNDT 2025 Annual Report 45 Table of Contents
Unallocated Costs includes IT infrastructure costs that are shared by multiple reportable segments, enterprise application costs and certain corporate overhead expenses not directly attributable or allocated to our reportable segments. The section below provides a comparative discussion of our financial performance by segment between the years ended December 31, 2024 and 2023.
Unallocated Costs includes IT infrastructure costs that are shared by multiple reportable segments, enterprise application costs and certain corporate overhead expenses not directly attributable or allocated to our reportable segments. The section below provides a comparative discussion of our financial performance by segment between the years ended December 31, 2025 and 2024. See Item 7.
Adjusted EBITDA CNDT 2024 Annual Report 45 Table of Contents Margin is Adjusted EBITDA divided by revenue. Adjusted EBITDA represents income (loss) before interest, income taxes, depreciation and amortization and contract inducement amortization adjusted for the following items: • Amortization of acquired intangible assets.
Adjusted EBITDA CNDT 2025 Annual Report 44 Table of Contents Margin is Adjusted EBITDA divided by revenue. Adjusted EBITDA represents income (loss) before interest, income taxes, depreciation and amortization and contract inducement amortization adjusted for the following items: • Amortization of acquired intangible assets.
Refer to Note 1 – Basis of Presentation and Summary of Significant Accounting Policies and Note 7 – Goodwill and Intangible Assets, Net to the Consolidated Financial Statements for additional information regarding our goodwill policies.
Refer to Note 1 – Basis of Presentation and Summary of Significant Accounting Policies and Note 7 – Goodwill to the Consolidated Financial Statements for additional information regarding our goodwill policies.
Gross deferred tax assets of $241 million and $253 million had valuation allowances of $95 million and $100 million at December 31, 2024 and 2023, respectively. We are subject to ongoing tax examinations and assessments in various jurisdictions. Accordingly, we may incur additional tax expense based upon our assessment of the more-likely-than-not outcomes of such matters.
Gross deferred tax assets of $310 million and $241 million had valuation allowances of $151 million and $95 million at December 31, 2025 and 2024, respectively. We are subject to ongoing tax examinations and assessments in various jurisdictions. Accordingly, we may incur additional tax expense based upon our assessment of the more-likely-than-not outcomes of such matters.
Sales of Accounts Receivable The net impact from the sales of accounts receivable on net cash provided by (used in) operating activities for the years ended December 31, 2024, 2023 and 2022 was $7 million, $(4) million and $54 million, respectively.
Sales of Accounts Receivable The net impact from the sales of accounts receivable on net cash provided by (used in) operating activities for the years ended December 31, 2025, 2024 and 2023 was $(18) million, $7 million and $(4) million, respectively.
As of December 31, 2024, total fixed lease payables were $226 million, of which $65 million was due within 12 months. Refer to Note 6 – Leases to the Consolidated Financial Statements for additional information. Estimated Purchase Commitments We have committed to purchasing certain materials and services to support our operations.
As of December 31, 2025, total fixed lease payables were $182 million, of which $61 million was due within 12 months. Refer to Note 6 – Leases to the Consolidated Financial Statements for additional information. Estimated Purchase Commitments We have committed to purchasing certain materials and services to support our operations.
In 2024, approximately 14% of our revenue was generated outside the U.S. Our reportable segments correspond to how we organize and manage the business and are aligned to the industries in which our clients operate.
In 2025, approximately 16% of our revenue was generated outside the U.S. Our reportable segments correspond to how we organize and manage the business and are aligned to the industries in which our clients operate.
At December 31, 2024, our material cash requirements include the following contractual and other obligations. Debt As of December 31, 2024, we had total outstanding debt, including Finance leases, with floating and fixed rates totaling $646 million, of which $24 million was due within 12 months.
At December 31, 2025, our material cash requirements include the following contractual and other obligations. Debt As of December 31, 2025, we had total outstanding debt, including finance leases, with floating and fixed rates totaling $691 million, of which $22 million was due within 12 months.
CNDT 2024 Annual Report 42 Table of Contents Critical Accounting Estimates and Policies The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires us to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying Consolidated Financial Statements and notes thereto.
Critical Accounting Estimates and Policies The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires us to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying Consolidated Financial Statements and notes thereto.
Off-Balance Sheet Arrangements As of December 31, 2024, we do not believe we have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
CNDT 2025 Annual Report 41 Table of Contents Off-Balance Sheet Arrangements As of December 31, 2025, we do not believe we have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
The net impact from the sales of accounts receivable represents the difference between current and prior year fourth quarter accounts receivable sales adjusted for the effects of collections prior to the end of the year. Financial Instruments Refer to Note 11 – Financial Instruments to the Consolidated Financial Statements for additional information.
The net impact from the sales of accounts receivable represents the difference between current and prior year fourth quarter accounts receivable sales adjusted for the effects of collections prior to the end of the year. CNDT 2025 Annual Report 40 Table of Contents Financial Instruments Refer to Note 11 – Financial Instruments to the Consolidated Financial Statements for additional information.
CNDT 2024 Annual Report 44 Table of Contents Loss Contingencies We are currently involved in various claims and legal proceedings.
CNDT 2025 Annual Report 43 Table of Contents Loss Contingencies We are currently involved in various claims and legal proceedings.
CNDT 2024 Annual Report 41 Table of Contents Material Cash Requirements from Contractual Obligations We believe our balances of cash and cash equivalents, which totaled $366 million as of December 31, 2024, along with cash generated by operations and amounts available for borrowing under our Revolving Credit Facility, will be sufficient to satisfy our cash requirements over the next 12 months and beyond.
Material Cash Requirements from Contractual Obligations We believe our balances of cash and cash equivalents, which totaled $233 million as of December 31, 2025, along with cash generated by operations and amounts available for borrowing under our Revolving Credit Facility, will be sufficient to satisfy our cash requirements over the next 12 months and beyond.
Restructuring and Related Costs We engage in a series of restructuring programs related to downsizing our employee base, reducing our real estate footprint, exiting certain activities, outsourcing certain internal functions, consolidating our data centers and engaging in other actions designed to reduce our cost structure and improve productivity.
CNDT 2025 Annual Report 34 Table of Contents Restructuring and Related Costs We engage in a series of restructuring programs related to optimizing our employee base, reducing our real estate footprint, exiting certain activities, outsourcing certain internal functions, consolidating our data centers and engaging in other actions designed to reduce our cost structure and improve productivity.
Financial Information The section below provides a comparative discussion of our consolidated results of operations for the year ended December 31, 2024 and 2023. See Item 7. MD&A – Financial Information in our Annual Report on Form 10-K for the year ended December 31, 2023, for a comparative discussion of our consolidated results of operations between 2023 and 2022.
MD&A – Financial Information in our Annual Report on Form 10-K for the year ended December 31, 2024, for a comparative discussion of our consolidated results of operations between 2024 and 2023.
However, we believe that our cash on hand, projected cash flow from operations, sound balance sheet and our Revolving Credit Facility will continue to provide sufficient financial resources to meet our expected business obligations for at least the next twelve months.
To provide financial flexibility and finance certain investments and projects, we may continue to utilize external financing arrangements. However, we believe that our cash on hand, projected cash flow from operations, sound balance sheet and our Revolving Credit Facility will continue to provide sufficient financial resources to meet our expected business obligations for at least the next twelve months.
The Net ARR Activity metric for the trailing twelve months for each of the prior five quarters was as follows: (in millions) Net ARR activity metric December 31, 2024 $ 92 September 30, 2024 46 June 30, 2024 (47) March 31, 2024 6 December 31, 2023 49 CNDT 2024 Annual Report 40 Table of Contents Capital Resources and Liquidity As of December 31, 2024 and 2023, total cash and cash equivalents were $366 million (of which approximately $140 million was cash in foreign locations) and $498 million (of which approximately $143 million was cash in foreign locations), respectively.
The Net ARR Activity metric for the trailing twelve months for each of the prior five quarters was as follows: (in millions) Net ARR activity metric December 31, 2025 $ (8) September 30, 2025 25 June 30, 2025 63 March 31, 2025 116 December 31, 2024 92 CNDT 2025 Annual Report 39 Table of Contents Capital Resources and Liquidity As of December 31, 2025 and 2024, total cash and cash equivalents were $233 million (of which approximately $115 million was cash in foreign locations) and $366 million (of which approximately $140 million was cash in foreign locations), respectively.
The total of these commitments was $348 million as of December 31, 2024, of which $147 million is due within the next 12 months.
The total of these commitments was $603 million as of December 31, 2025, of which $202 million is due within the next 12 months.
If we used different assumptions for discount rates or long-term organic growth rates in this annual assessment, our calculated fair values of our Government reporting unit could be higher or lower which could result in a goodwill impairment.
If we used different assumptions for discount rates or long-term organic growth rates in this annual assessment, our calculated fair values of our Government reporting unit could be higher or lower which could result in a goodwill impairment. Income Taxes We are subject to income taxes in the United States and numerous foreign jurisdictions.
Divestitures Revenue, Segment Profit (Loss) and Adjusted EBITDA The decrease in revenue, segment profit and Adjusted EBITDA for 2024 was due to the BenefitWallet Portfolio, the Curbside Management and Public Safety Solutions businesses and Casualty Claims Solutions businesses being included for a full year in the prior year period whereas their results were only included until the date of their transfer and sale, as applicable, in 2024.
Divestitures Revenue, Segment Profit (Loss) and Adjusted EBITDA The decrease in revenue, segment profit and Adjusted EBITDA for 2025 as compared to the prior year was due to the transfer of the BenefitWallet Portfolio and the sales of the Curbside Management and Public Safety Solutions businesses and Casualty Claims Solutions businesses in 2024.
(2) Non-recurring revenue signings are for contacts shorter than one year. The total new business pipeline at the end of December 31, 2024 and 2023 was $22.2 billion and $22.8 billion, respectively. Total new business pipeline is defined as total new business TCV pipeline of deals in all sell stages.
(2) Non-recurring revenue signings are for contacts shorter than one year. The total new business pipeline at the end of December 31, 2025 and 2024 was $3.2 billion and $3.1 billion, respectively. Total new business pipeline is defined as total new business ACV pipeline of deals at or beyond the qualified prospect stage.
(in millions) Year Ended December 31, Adjusted EBITDA and Segment Profit (Loss) Reconciliation to Income (Loss) Before Income Taxes 2024 2023 2022 Adjusted EBITDA $ 172 $ 378 $ 396 Reconciling items: Segment depreciation and amortization (202) (260) (220) Other adjustments (1) (4) (6) — Segment Pre-Tax Income (Loss) $ (34) $ 112 $ 176 Reconciling items: Amortization of acquired intangible assets (5) (7) (13) Restructuring and related costs (46) (62) (39) Interest expense (75) (111) (84) Loss on extinguishment of debt (8) — — Goodwill impairment (28) (287) (358) (Gain) loss on divestitures and transaction costs, net 696 (10) 158 Litigation settlements (recoveries), net (9) 30 32 Other (income) expenses, net 13 3 1 Income (Loss) Before Income Taxes $ 504 $ (332) $ (127) (1) The 2024 amount represents a termination for convenience fee related to the termination of Convergint as a subcontractor for our State of Victoria contract.
(in millions) Year Ended December 31, Adjusted EBITDA and Segment Profit (Loss) Reconciliation to Income (Loss) Before Income Taxes 2025 2024 Adjusted EBITDA $ 164 $ 172 Reconciling items: Segment depreciation and amortization (195) (202) Direct response costs - cyber event (25) — Other adjustments (1) — (4) Segment Pre-Tax Income (Loss) $ (56) $ (34) Reconciling items: Amortization of acquired intangible assets (2) (5) Restructuring and related costs (35) (46) Interest expense (48) (75) Loss on extinguishment of debt (1) (8) Goodwill impairment — (28) Gain (loss) on divestitures and transaction costs, net (11) 696 Litigation (settlements) recoveries, net 1 (9) Other income (expenses), net (8) 13 Income (Loss) Before Income Taxes $ (160) $ 504 (1) The 2024 amount represents a termination for convenience fee related to the termination of Convergint as a subcontractor for our State of Victoria contract and is reported in Cost of Services on the Consolidated Statements of Income.
Year Ended December 31, 2024 vs. 2023 (in millions) 2024 2023 $ Change % Change Revenue $ 3,356 $ 3,722 $ (366) (10) % Operating Costs and Expenses Cost of services (excluding depreciation and amortization) 2,730 2,888 $ (158) (5) % Selling, general and administrative (excluding depreciation and amortization) 455 458 $ (3) (1) % Research and development (excluding depreciation and amortization) 6 7 (1) (14) % Depreciation and amortization 204 264 (60) (23) % Restructuring and related costs 46 62 (16) (26) % Interest expense 75 111 (36) (32) % Loss on extinguishment of debt 8 — 8 n/m Goodwill impairment 28 287 (259) (90) % (Gain) loss on divestitures and transaction costs, net (696) 10 (706) n/m Litigation settlements (recoveries), net 9 (30) 39 (130) % Other (income) expenses, net (13) (3) (10) 333 % Total Operating Costs and Expenses 2,852 4,054 (1,202) Income (Loss) Before Income Taxes 504 (332) 836 Income tax expense (benefit) 78 (36) 114 Net Income (Loss) $ 426 $ (296) $ 722 Revenue Revenue for 2024 decreased 10%, compared to the prior year, over half of which was due to the impact of the BenefitWallet Portfolio transfer and the sales of the Curbside Management and Public Safety Solutions and Casualty Claims Solutions businesses.
Year Ended December 31, 2025 vs. 2024 (in millions) 2025 2024 $ Change % Change Revenue $ 3,042 $ 3,356 $ (314) (9) % Operating Costs and Expenses Cost of services (excluding depreciation and amortization) 2,490 2,730 $ (240) (9) % Selling, general and administrative (excluding depreciation and amortization) 412 455 $ (43) (9) % Research and development (excluding depreciation and amortization) 4 6 (2) (33) % Depreciation and amortization 194 204 (10) (5) % Restructuring and related costs 35 46 (11) (24) % Interest expense 48 75 (27) (36) % Goodwill impairment — 28 (28) (100) % (Gain) loss on divestitures and transaction costs, net 11 (696) 707 n/m Litigation settlements (recoveries), net (1) 9 (10) n/m Loss on extinguishment of debt 1 8 (7) (88) % Other (income) expenses, net 8 (13) 21 n/m Total Operating Costs and Expenses 3,202 2,852 350 Income (Loss) Before Income Taxes (160) 504 (664) Income tax expense (benefit) 10 78 (68) Net Income (Loss) $ (170) $ 426 $ (596) Revenue Revenue for 2025 decreased 9%, compared to the prior year, approximately 57% of which was due to the impact of the BenefitWallet Transfer and the sales of the Curbside Management and Public Safety Solutions and Casualty Claims Solutions businesses.
Divestitures include our BenefitWallet Portfolio and our Casualty Claims Solutions businesses (both of which were reclassified from our Commercial segment) and our Curbside Management and Public Safety Solutions businesses (which was reclassified from our Transportation segment). For the year ended December 31, 2022, Divestitures also includes our Midas business, which was sold in the first quarter of 2022.
Divestitures include our BenefitWallet Portfolio and our Casualty Claims Solutions businesses (both of which were reclassified from our Commercial segment in 2024) and our Curbside Management and Public Safety Solutions businesses (which was reclassified from our Transportation segment in 2024).
Refer to Note 4 – Divestitures and Assets/Liabilities Held for Sale in the Consolidated Financial Statements for additional information. • Debt Prepayment – In 2024, we utilized a portion of the proceeds from the closing of our divestitures to voluntarily prepay all of the principal ($502 million ) of the Term Loan B and $137 million of the Term Loan A.
Refer to Note 4 – Divestitures in the Consolidated Financial Statements for additional information. • Debt Prepayment – In 2024, we utilized a portion of the proceeds from the closing of our divestitures to voluntarily prepay all of the principal of the Term Loan B and a portion of the Term Loan A. • Icahn Share Repurchase – During the second quarter of 2024, we entered into a purchase agreement with Carl C.
The Income Approach utilizes a discounted cash flow analysis based upon the forecasted future business results of its reporting units. The Market Approach utilizes the guideline public company method.
In our quantitative assessment, we estimate the fair value of each reporting unit by weighting the results from the Income Approach (discounted cash flow methodology) and Market Approach. The Income Approach utilizes a discounted cash flow analysis based upon the forecasted future business results of its reporting units. The Market Approach utilizes the guideline public company method.
Icahn and certain of his affiliates pursuant to which we purchased an aggregate of approximately 38 million shares of our common stock, at a price of $3.47 per share, for an aggregate purchase price of approximately $132 million. We utilized a portion of the proceeds from the closing of our divestitures to fund the purchase.
Icahn and certain of his affiliates pursuant to which we purchased their entire holdings or an aggregate of approximately 38 million shares of our common stock. We utilized a portion of the proceeds from the closing of our divestitures to fund the purchase. • Share Repurchases – In 2024, we completed our previously approved $75 million share repurchase program.
This program was completed in September 2024. Macroeconomic and Geopolitical Uncertainty Given the nature of our business and our global operations, the effects of global macroeconomic and geopolitical uncertainty could have a materially adverse effect on our business, results of operations and financial condition.
See also Part I, Item 1A (Risk Factors). Macroeconomic and Geopolitical Uncertainty Given the nature of our business and our global operations, the effects of global macroeconomic and geopolitical uncertainty could have a materially adverse effect on our business, results of operations and financial condition.
Excluding the impact of the internal reorganization, divestitures, goodwill impairment, amortization of intangible assets, restructuring costs and certain discrete tax items, the normalized effective tax rate for 2024 was 21.2%. The 2023 rate was 107.3% excluding the impact of goodwill impairment, amortization of intangible assets, restructuring, litigation reserve releases and certain discrete tax items.
The normalized effective tax rate for 2024 was 21.2% excluding the impact of the internal reorganization, divestitures, goodwill impairment, amortization of intangible assets, restructuring costs and certain discrete tax items. The 2025 rate is higher than the 2024 rate due to increased estimated tax credits and geographic mix of income.
CNDT 2024 Annual Report 33 Table of Contents Cost of Services (excluding depreciation and amortization) Cost of services for 2024 decreased 5%, compared to the prior year, approximately three quarters of which was primarily driven by the impact of the transfer of the BenefitWallet Portfolio and the sales of the Curbside Management and Public Safety Solutions and Casualty Claims Solutions businesses.
Cost of Services (excluding depreciation and amortization) Cost of services for 2025 decreased 9%, compared to the prior year, primarily due to the impact of the BenefitWallet Transfer and the sales of the Curbside Management and Public Safety Solutions and Casualty Claims Solutions businesses.
In this segment, we help governments respond to changing rules for eligibility and increasing citizen expectations, modernize legacy technology systems, combat benefits fraud and shift in response to an evolving regulatory environment. • Transportation – Our Transportation segment provides systems, support, and revenue-generating solutions to government transportation agency clients.
In this segment, we help governments respond to changing rules for eligibility and keep pace with increasing citizen expectations, modernize legacy technology systems, combat benefits fraud and adapt to an evolving regulatory environment. • Transportation – Our Transportation segment provides government agencies and transportation authorities around the world with systems, support and revenue-generating solutions serving toll and fare collections as well as mobility and digital payments that help streamline operations and increase revenue to government and transportation agencies.
CNDT 2024 Annual Report 43 Table of Contents When performing our discounted cash flow analysis for each reporting unit, we incorporate the use of projected financial information and discount rates that are developed using market participant-based assumptions.
In addition, we are required to make certain assumptions and estimates regarding the current economic environment, industry factors and the future profitability of our businesses. When performing our discounted cash flow analysis for each reporting unit, we incorporate the use of projected financial information and discount rates that are developed using market participant-based assumptions.
This represents write-off of debt issuance costs related to prepayments of debt. • Other charges (credits). This includes Other (income) expenses, net on the Consolidated Statements of Income (loss) and other adjustments. Adjusted EBITDA is not intended to represent cash flows from operations, operating income (loss) or net income (loss) as defined by U.S. GAAP as indicators of operating performance.
Adjusted EBITDA is not intended to represent cash flows from operations, operating income (loss) or net income (loss) as defined by U.S. GAAP as indicators of operating performance.
Total Contract Value ("TCV") is the estimated total contractual revenue related to signed contracts. TCV signings is defined as estimated future revenues from contracts signed during the period, including renewals of existing contracts. Due to the inconsistency of when existing contracts end, quarterly and yearly comparisons are not a good measure of renewal performance.
CNDT 2025 Annual Report 38 Table of Contents Signings Signings are defined as estimated future revenues from contracts signed during the period, including renewals of existing contracts. Total Contract Value ("TCV") is the estimated total contractual revenue related to signed contracts. TCV signings is defined as estimated future revenues from contracts signed during the period, including renewals of existing contracts.
Cash Flow Analysis The following summarizes our cash flows for the two years ended December 31, 2024, as reported in our Consolidated Statements of Cash Flows in the accompanying Consolidated Financial Statements: Year Ended December 31, Change (in millions) 2024 2023 2024 vs. 2023 Net cash provided by (used in) operating activities $ (50) $ 89 $ (139) Net cash provided by (used in) investing activities 795 (93) 888 Net cash provided by (used in) financing activities (877) (81) (796) Operating Activities The net decrease in cash flow provided by operating activities of $139 million was primarily related to lower Adjusted EBITDA due to divestitures and higher cash taxes, partially offset by improved accounts receivable Days Sales Outstanding and lower cash interest expense.
Cash Flow Analysis The following summarizes our cash flows for the two years ended December 31, 2025, as reported in our Consolidated Statements of Cash Flows in the accompanying Consolidated Financial Statements: Year Ended December 31, Change (in millions) 2025 2024 2025 vs. 2024 Net cash provided by (used in) operating activities $ (73) $ (50) $ (23) Net cash provided by (used in) investing activities (28) 795 (823) Net cash provided by (used in) financing activities (39) (877) 838 Operating Activities The net increase in cash flow used in operating activities of $23 million was primarily related to unfavorable working capital changes and cash outflows related to the January 2025 Cyber Event, partially offset by lower cash tax outflows and lower net interest payments.
Across the Commercial segment, we operate on our clients’ behalf to deliver mission-critical solutions and services to reduce costs, improve efficiencies and enable revenue growth for our clients and better experiences for their consumers and employees. • Government – Our Government segment provides government-centric services and solutions to U.S. federal, state, local and foreign governments for public assistance, healthcare programs and administration, transaction CNDT 2024 Annual Report 31 Table of Contents processing, payment services and case management.
CNDT 2025 Annual Report 31 Table of Contents • Government – Our Government segment provides government-centric services and solutions to U.S. federal, state, local and foreign governments for public assistance, healthcare programs and administration, transaction processing, eligibility and enrollment processing, payment services and case management.
Refer to Note 15 – Contingencies and Litigation to the Consolidated Financial Statements for additional information on these matters. Other (Income) Expenses, Net Other (income) expenses, net for 2024 and 2023 primarily includes interest income on cash investments, accounts receivable factoring fees and foreign currency transaction losses (gains).
Other (Income) Expenses, Net Other (income) expenses, net for 2025 and 2024 primarily include interest income on cash investments, accounts receivable factoring fees and foreign currency transaction losses (gains).
New business Annual Contract Value ("ACV") is calculated as TCV divided by the contract term, in months, multiplied by 12 for an annual measure.
Due to the inconsistency of when existing contracts end, quarterly and yearly comparisons are not a good measure of renewal performance. New business Annual Contract Value ("ACV") is calculated as TCV divided by the contract term, in months, multiplied by 12 for an annual measure.
CNDT 2024 Annual Report 39 Table of Contents Signing information for the years ended December 31, 2024 and 2023 is as follows: Year Ended December 31, 2024 vs. 2023 (in millions) 2024 2023 $ Change % Change New business ACV $ 485 $ 605 $ (120) (20) % New business TCV $ 969 $ 2,104 $ (1,135) (54) % Renewals TCV 1,657 2,059 (402) (20) % Total Signings $ 2,626 $ 4,163 $ (1,537) (37) % New business annual recurring revenue (ARR) signings (1) $ 228 $ 287 $ (59) (21) % New business non-recurring revenue (NRR) signings (2) $ 309 $ 589 $ (280) (48) % ___________ (1) Recurring revenue signings are for new business contracts longer than one year.
Signing information for the years ended December 31, 2025 and 2024 is as follows: Year Ended December 31, 2025 vs. 2024 (in millions) 2025 2024 $ Change % Change New business ACV $ 517 $ 485 $ 32 7 % New business TCV $ 1,118 $ 969 $ 149 15 % Renewals TCV 1,293 1,657 (364) (22) % Total Signings $ 2,411 $ 2,626 $ (215) (8) % New business annual recurring revenue (ARR) signings (1) $ 237 $ 228 $ 9 4 % New business non-recurring revenue (NRR) signings (2) $ 327 $ 309 $ 18 6 % __________ (1) Recurring revenue signings are for new business contracts longer than one year.
The increase in 2024 is primarily due to interest income of $8 million related to the partial settlement of the Skyview matter. Refer to Note 15 – Contingencies and Litigation in the Consolidated Financial Statements for additional information.
In 2024, Other (income) expenses, net also included interest income of $8 million related to the partial settlement of the Skyview matter. Refer to Note 15 – Contingencies and Litigation in the Consolidated Financial Statements for additional information. CNDT 2025 Annual Report 35 Table of Contents Income Taxes The 2025 effective tax rate was (6.1)%, compared to 15.5% for 2024.
Financing Activities The increase in cash used in financing activities was mainly driven by the $642 million early repayment of Term Loan B and Term Loan A utilizing funds received from our divestitures. In addition, $132 million was utilized to purchase all of the common shares owned by the Icahn Parties.
The 2025 period includes $50 million of cash received related to the non-interest-bearing note from the Curbside Disposal Group divestiture. Financing Activities The decrease in cash used in financing activities was mainly driven by the $642 million early repayment of Term Loan B and Term Loan A in 2024 utilizing funds received from our divestitures.
This alternative minimum tax is treated as a period cost beginning in 2024 and does not have a material impact on the Company's financial results of operations for the current period. The Company continues to monitor legislative developments, as well as additional guidance from countries that have enacted legislation.
In 2021, the Organization for Economic Cooperation and Development released model rules for a 15% global minimum tax, known as Pillar Two. This alternative minimum tax is treated as a period cost beginning in 2024 and does not have a material impact on the Company's financial results of operations for the current period.
The metrics for all periods presented below have been recast to remove the activity related to the BenefitWallet Portfolio, the Casualty Claims Solutions business and the Curbside Management and Public Safety Solutions businesses. Signings Signings are defined as estimated future revenues from contracts signed during the period, including renewals of existing contracts.
We disclose these metrics to provide transparency in our performance trends. We present certain key metrics, including Signings and Net ARR Activity below. The metrics for all periods presented below have been recast to remove the activity related to the BenefitWallet Portfolio, the Casualty Claims Solutions business and the Curbside Management and Public Safety Solutions businesses.
Operations Review of Segments Our financial performance is based on Segment Profit (Loss) and Segment Adjusted Earnings before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") for the following three segments: • Commercial, • Government, and • Transportation.
The Company continues to monitor legislative developments, as well as additional guidance from countries that have enacted legislation. Operations Review of Segments Our financial performance is based on Segment Profit (Loss) for the following three segments: • Commercial, • Government, and • Transportation.
Interest Expense Interest expense represents interest on long-term debt and the amortization of debt issuance costs.
Refer to Note 8 – Restructuring Programs and Related Costs to the Consolidated Financial Statements for additional information regarding our restructuring programs. Interest Expense Interest expense represents interest on long-term debt and the amortization of debt issuance costs.
Additionally, we recorded a $3 million gain adjustment related to a prior year divestiture following the partial settlement of the Skyview matter. This financial statement line also includes professional fees and other costs associated with both consummated and non-consummated transactions totaling $30 million and $10 million in 2024 and 2023, respectively.
(Gain) Loss on Divestitures and Transaction Costs Our 2024 divestitures resulted in gains of $721 million. Additionally, we recorded a $3 million gain adjustment related to a prior year divestiture following the partial settlement of the Skyview matter.
We also have a $550 million Revolving Credit Facility for our various cash needs, of which none has been utilized for borrowings and $11 million has been utilized for letters of credit as of December 31, 2024. The amount of borrowings outstanding under the Revolving Credit Facility at each quarter-end may be limited by our leverage covenant.
We also have a $357 million Revolving Credit Facility (reducing to $187 million in October 2026) for our various cash needs, of which $109 million has been utilized for borrowings and $25 million has been utilized for letters of credit as of December 31, 2025.
Annual Goodwill Impairment Evaluation Our annual quantitative impairment test of goodwill was performed as of October 1, 2024. Goodwill is tested for impairment using a qualitative assessment and/or a quantitative assessment. In our quantitative assessment, we estimate the fair value of each reporting unit by weighting the results from the Income Approach (discounted cash flow methodology) and Market Approach.
Annual Goodwill Impairment Evaluation Our annual quantitative impairment test of goodwill was performed as of October 1, 2025. CNDT 2025 Annual Report 42 Table of Contents Goodwill is tested for impairment using a qualitative assessment and/or a quantitative assessment.
Selling, General and Administrative ("SG&A") (excluding depreciation and amortization) SG&A for 2024 decreased 1%, compared to the prior year, primarily driven by the impact of the sales of the Curbside Management and Public Safety Solutions and Casualty Claims Solutions businesses. Cost efficiencies were partially offset by costs to transition away from a technology vendor.
These were partially offset by $25 million of direct response costs related to the January 2025 Cyber Event. Depreciation and Amortization Depreciation and amortization for 2025 decreased 5% compared to the prior year, primarily due to the sale of the Curbside Management and Public Safety Solutions and Casualty Claims Solutions businesses.
Commercial segment revenue for 2023 decreased, compared to the prior year, driven by lost business, lower volumes in certain industries within our client base and non-repeating items in the prior year, partially offset by new business ramp.
Commercial Segment Revenue Commercial segment revenue for 2025 decreased by 6%, compared to the prior year, driven by contract losses and lower volumes, partially offset by new business ramps and multi-year licensing agreements with existing customers.
In February 2025, the Company borrowed $50 million under the Revolving Credit Facility for working capital purposes. As of December 31, 2024, there was a total of $608 million of outstanding borrowings under our Term Loan A and Senior Notes, of which $14 million was due within one year.
As of December 31, 2025, there was a total of $520 million of outstanding borrowings under our Senior Notes, none of which was due within one year. Additionally, as of December 31, 2025, we had $22 million of finance lease and other debt due within one year.
CNDT 2024 Annual Report 34 Table of Contents Goodwill Impairment The goodwill impairment for 2024 is related to the write-down of the Transportation reporting unit's goodwill arising from the annual goodwill impairment test. The impairment in 2023 is related to the write-down of the carrying value of the Commercial reporting unit.
Refer to Note 10 – Debt to the Consolidated Financial Statements for additional information. Goodwill Impairment The goodwill impairment for 2024 is related to the write-down of the Transportation reporting unit's goodwill arising from the annual goodwill impairment test. Refer to Note 7 – Goodwill to the Consolidated Financial Statements for additional information on this impairment.
This extends past the next twelve-month period to include total pipeline, excluding the impact of divested business as required.
Beginning in the first quarter of 2025, we transitioned our measure of sales pipeline from TCV to ACV to align with our primary sales metric and have recast all prior period comparatives to reflect this change. This extends past the next twelve-month period to include total pipeline, excluding the impact of divested business as required.
The following are the components of our Restructuring and related costs: Year Ended December 31, (in millions, except headcount in whole numbers) 2024 2023 Severance and related costs (1) $ 21 $ 29 Data center consolidation costs 5 9 Termination, insourcing and asset impairment costs (2) 16 24 Total Net Current Period Charges 42 62 Consulting and other costs 4 — Restructuring and Related Costs $ 46 $ 62 Reduction in headcount (3) 600 700 __________ (1) 2023 includes costs related to the closure of one of our Commercial segment operations in Europe.
The following are the components of our Restructuring and related costs: Year Ended December 31, (in millions, except headcount in whole numbers) 2025 2024 Severance and related costs $ 18 $ 21 Contract Termination and other costs 12 19 Asset impairments 5 6 Restructuring and Related Costs $ 35 $ 46 Reduction in headcount (1) 1,500 600 __________ (1) Relates to approximate headcount reductions worldwide associated with Severance and related costs.
Metrics Metrics We use metrics to evaluate our business, determine the allocation of our resources, make decisions regarding corporate strategies and evaluate forward-looking projections and trends affecting our business. We disclose these metrics to provide transparency in our performance trends. We present certain key metrics, including Signings and Net ARR Activity below.
These factors were partially offset by $25 million of direct response costs related to the January 2025 Cyber Event and increase in medical expenses resulting from higher claims costs. Metrics We use metrics to evaluate our business, determine the allocation of our resources, make decisions regarding corporate strategies and evaluate forward-looking projections and trends affecting our business.
Unallocated Costs for 2023 increased compared to the prior year primarily due to the prior year reflecting the recovery of $14 million of defense costs as part of the settlement with insurance carriers relating to the previously disclosed State of Texas matter, and vendor credits earned in the prior year.
Unallocated Costs Unallocated Costs for 2025 decreased compared to the prior year primarily due to a $9 million recovery of legal costs from one of our insurance carriers related to the previously disclosed State of Texas matter that settled in February 2019, as well as cost efficiencies in our corporate functions.
Segment Profit and Adjusted EBITDA Transportation segment profit and adjusted EBITDA for 2024 decreased compared to the prior year. This was primarily due to a Tolling contract with decreased price and lower volumes attributable to a portion of the contract not being retained.
Segment Profit and Adjusted EBITDA Transportation segment profit and Adjusted EBITDA for 2025 increased compared to the prior year due to the revenue drivers mentioned above and the absence of costs to transition the non-retained portion of a Road Usage Charging contract.
The 2023 rate was lower than the U.S. statutory rate of 21%, primarily due to the non-deductible Commercial reporting unit goodwill impairment, geographic mix of income and return to provision adjustments, partially offset by tax benefits related to tax settlements and reversal of reserves.
The 2025 rate was lower than the U.S. statutory rate of 21% primarily due to valuation allowances, geographic mix of income and discrete taxes.
The 2024 amount also includes a $2 million reimbursement of previously incurred legal fees related to the partial settlement of the Skyview matter. Refer to Note 4 – Divestitures and Assets/Liabilities Held for Sale and Note 15 – Contingencies and Litigation to the Consolidated Financial Statements for additional information on these matters.
(Gain) loss on divestitures and transaction costs, net also includes professional fees and other costs associated with both consummated and non-consummated transactions totaling $9 million and $28 million in 2025 and 2024, respectively. Refer to Note 4 – Divestitures and Note 15 – Contingencies and Litigation to the Consolidated Financial Statements for additional information on these matters.
Segment Profit and Adjusted EBITDA Commercial segment profit and Adjusted EBITDA for 2024 increased compared to the prior year primarily due to new business ramp and cost efficiencies, partially offset the impact of lost business and lower volumes.
Segment Profit and Adjusted EBITDA Government segment profit, Adjusted EBITDA and Adjusted EBITDA margin for 2025 increased compared to the prior year. Government segment Adjusted EBITDA margin increased by 270 basis points compared to the prior year, primarily due to cost efficiencies and lower expenses resulting from AI-enabled fraud prevention activities in our Government Services business.
We intend to achieve this by doubling down on key themes outlined in the 2023 investor briefing including focusing on key growth areas within each of our businesses, continuing our portfolio rationalization strategy, divesting certain solutions which have either scarcity value outside of Conduent or are capital intensive relative to their growth opportunity, and taking a balanced approach to allocating capital including internal investments in our solutions, pre-paying debt and repurchasing common shares.
We executed against this strategy by focusing on targeted-growth areas within each business advancing the second phase of our portfolio rationalization strategy to improve our earnings profile and maintained a balanced capital allocation framework that included making internal investments in our solutions, pre-paying debt and repurchasing common shares.
The decrease in Interest expense for 2024, compared to the prior year, was driven primarily by lower debt balances as we utilized proceeds from divestitures closed in 2024 to voluntarily prepay all of our Term Loan B and a portion of our Term Loan A. Refer to Note 10 – Debt to the Consolidated Financial Statements for additional information.
The decrease in Interest expense for 2025, compared to the prior year, was primarily due to the 2024 voluntary prepayments of the entire Term Loan B balance outstanding and a portion of the Term Loan A balance with proceeds from divestitures. The remaining Term Loan A balance was repaid at the execution of Amendment No. 3 to the Credit Facility.
Transportation Segment Revenue Transportation revenue for 2024 increased compared to the prior year, primarily driven by the ramp of new business and improved operational performance with fewer delays from extended completion timelines compared to the prior year, partially offset by lost business, a Tolling customer price decrease and lower volumes.
In addition to the divestitures impact, lost business and lower volumes contributed to the decrease and were partially offset by new business ramp, higher equipment sales and positive impacts from a contract amendment with a customer in the Transportation segment.
Segment Profit and Adjusted EBITDA Government segment profit and Adjusted EBITDA for 2024 decreased compared to the prior year, primarily due to the impact of lost business and the lower volumes mentioned above and the absence of a $17 million reversal of liabilities due to the settlement of the Cognizant matter in the prior year, partially offset by cost efficiencies.
CNDT 2025 Annual Report 37 Table of Contents Segment Profit and Adjusted EBITDA Commercial segment profit and Adjusted EBITDA for 2025 decreased compared to the prior year primarily due to the revenue drivers noted above and higher fixed technology overhead, partially offset by cost efficiencies and the impact of lower depreciation due to the prior year write-off of internal use software and fully amortized assets.
The comparative discussion of our financial performance by segment between the years ended December 31, 2023 and 2022 is also included to reflect the impact of reclassifying divested businesses from our Commercial and Transportation segments as described above.
MD&A - Operations Review of Segments in our Annual Report on Form 10-K for the year ended December 31, 2024 for a comparative discussion of our financial performance by segment between the years ended December 31, 2024 and 2023.
Government Segment Revenue Government segment revenue for 2024 decreased, compared to the prior year, attributable to lost business, primarily in our Government Healthcare business, and lower volumes in our Government Services business due to the change in funding mechanism for the Electronic Benefits Transfer ("EBT") programs, partially offset by new business ramp.
Government Segment Revenue Government segment revenue for 2025 decreased, compared to the prior year, primarily due to contract losses, lower volumes and the impacts from a U.S. federal government shutdown during the fourth quarter of 2025, as well as the completion or extension of several implementations. These declines were partially offset by ramp of new business.
Removed
We deliver mission-critical tolling, transit and digital payment solutions that streamline operations, increase revenue and reduce congestion while creating safe, seamless experiences for travelers. We help transportation agencies contend with rising urbanization and mobility, the need for system efficiency and an increased focus on transportation infrastructure.
Added
The discussion of 2023 items and related year-over-year comparisons as of and for the years ended December 31, 2024 and 2023 are found in Item 7 of Part II of our Form 10-K for the year ended December 31, 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2024, we did not have any borrowings outstanding under our 2021 Revolving Credit Facility maturing 2026. As of December 31, 2024, $88 million of our total debt of $646 million carried variable interest rates.
Biggest changeAs of December 31, 2025, we had $109 million of borrowings outstanding under our Revolving Credit Facility, with a weighted average interest rate of 6.58%. As of December 31, 2025, $109 million of our total debt of $691 million carried variable interest rates.
Foreign Exchange Risk Management Assuming a 10% appreciation or depreciation in foreign currency exchange rates from the quoted foreign currency exchange rates at December 31, 2024, the potential change in the fair value of foreign currency-denominated assets and liabilities in each entity would not be significant because all material currency asset and liability exposures were economically hedged as of December 31, 2024.
Foreign Exchange Risk Management Assuming a 10% appreciation or depreciation in foreign currency exchange rates from the quoted foreign currency exchange rates at December 31, 2025, the potential change in the fair value of foreign currency-denominated assets and liabilities in each entity would not be significant because all material currency asset and liability exposures were economically hedged as of December 31, 2025.
The fair values of our fixed rate financial instruments are sensitive to changes in interest rates and at December 31, 2024, a 10% increase in market interest rates would decrease the fair values of such financial instruments by approximately $15 million.
The fair values of our fixed rate financial instruments are sensitive to changes in interest rates and at December 31, 2025, a 10% increase in market interest rates would decrease the fair values of such financial instruments by approximately $15 million.
A 10% appreciation or depreciation of the U.S. Dollar against all currencies from the quoted foreign currency exchange rates at December 31, 2024 would have an impact on our cumulative translation adjustment portion of equity of approximately $53 million. The net amount invested in foreign subsidiaries and affiliates, primarily in the U.K. and Europe, and translated into U.S.
A 10% appreciation or depreciation of the U.S. Dollar against all currencies from the quoted foreign currency exchange rates at December 31, 2025 would have an impact on our cumulative translation adjustment portion of equity of approximately $39 million. The net amount invested in foreign subsidiaries and affiliates, primarily in the U.K. and Europe, and translated into U.S.
A 10% decrease in market interest rates would increase the fair values of such financial instruments by approximately $15 million. CNDT 2024 Annual Report 47 Table of Contents
A 10% decrease in market interest rates would increase the fair values of such financial instruments by approximately $15 million. CNDT 2025 Annual Report 46 Table of Contents
Dollars using the year-end exchange rates, was approximately $525 million at December 31, 2024. Interest Rate Risk Management The consolidated weighted-average interest rates related to our total debt for 2024 approximated 9.37% for Term Loan A, 6.20% for the Senior Notes and 8.70% for finance lease obligations.
Dollars using the year-end exchange rates, was approximately $393 million at December 31, 2025. Interest Rate Risk Management The consolidated weighted-average interest rates related to our total debt for 2025 approximated 6.20% for the Senior Notes and 8.13% for finance lease obligations.

Other CNDT 10-K year-over-year comparisons