Wall Street has seen its share of turnaround tales, but few are as fraught with uncertainty as Conduent’s latest chapter. On February 13, 2026, the digital business solutions provider reported its fiscal 2025 third quarter results, revealing a net income loss of $48 million on revenue of $767 million—translating to a basic earnings per share (EPS) loss of $0.31. These numbers, while not unexpected, extend a losing streak that’s left investors and analysts alike questioning whether the company’s much-touted operational changes and artificial intelligence (AI) initiatives are truly making a dent in its persistent challenges.
Conduent’s journey over the past several quarters has been anything but smooth. According to Yahoo, revenue has slid from $828 million in Q2 2024 to $751 million in Q1 2025, before ticking up slightly to $767 million in the most recent quarter. Yet, even that modest improvement leaves the company well below its year-ago performance. The bottom line tells a similar story: EPS swung from a $1.09 profit in Q2 2024 to consecutive losses—$0.33 in Q1 2025 and $0.31 in Q3 2025.
Trailing twelve-month figures paint an even starker picture. As reported by Simply Wall St, Conduent’s revenue contracted from $3.6 billion in the period ending Q2 2024 to $3.1 billion by Q3 2025. Net income, meanwhile, shifted from a $22 million profit to a staggering $159 million loss over the same span, resulting in a trailing EPS loss of $0.99. For a company that once showed flashes of profitability, these results keep the spotlight firmly on its ability to generate earnings and manage costs.
Digging deeper into the numbers, both the Commercial and Government segments saw year-over-year declines in Q2 2025, according to management’s commentary during the Q4 2025 earnings call held on February 12, 2026. Full-year 2025 adjusted revenue clocked in at $3.04 billion, a 4.2% drop from $3.18 billion in 2024. CFO Giles Goodburn noted that Conduent ended the year with some positive momentum—Q4 adjusted revenue grew in two out of three segments, with Government up 1.8% and Transportation up 1.9%. "Both segments have shown positive momentum and are positioned well for growth in 2026," Goodburn said during the call.
Despite the top-line pressure, there are glimmers of hope on the margin front. Adjusted EBITDA improved to $164 million in 2025 from $124 million in 2024. The adjusted EBITDA margin reached 5.4%, up 150 basis points year over year and toward the top end of guidance. The Q4 adjusted EBITDA margin of 6.5% represented a 250 basis point improvement versus Q4 2024 and a 130 basis point sequential gain from Q3, as detailed in the company’s SEC filings. The Government segment was a particular bright spot, with adjusted EBITDA of $221 million and a 24% margin—up 270 basis points versus 2024. Management credited AI initiatives and efficiency programs, such as reducing fraud, labor, and telecom expenses, for these improvements.
Yet, the disconnect between margin ambitions and the company’s ongoing losses is hard to ignore. As Simply Wall St observed, "The consensus view highlights EBITDA gains from cost control and automation, but EPS has swung from a $1.09 profit in Q2 2024 to losses across all three quarters of 2025 so far." This contrast leaves many investors cautious, wondering if operational changes are truly gaining traction or if more fundamental shifts are needed.
CEO Harshita Agadi, who took the reins less than a month before the Q4 call, struck an optimistic but realistic tone. "Ladies and gentlemen, this is a turnaround story. The work is underway and we will with you. What I can commit to today is full transparency and cadence," Agadi told analysts and investors. She laid out clear priorities: move faster in decision-making and execution, apply maximum financial discipline, lower costs, rationalize the portfolio, improve conversion rates of new business, and simplify the organization.
Agadi’s approach to portfolio management is methodical. She explained, "We are reviewing every business, categorizing each as either fix, sell, or grow. Businesses that are categorized as fix will operate under formal improvement plans with clear metrics and timelines. Businesses that are in the category of sale will be actively marketed with a focus on executing transactions efficiently and at fair value. Proceeds will be first used to reduce debt." She emphasized the importance of focusing on sectors with strong growth metrics, predictable EBITDA margins, and sustainable free cash flow.
On the sales front, there were some encouraging signs. Conduent signed $152 million of new business annual contract value (ACV) in the quarter, up 11% versus Q4 2024. Full-year 2025 new business ACV reached $517 million, a 6% increase from 2024. The Government segment’s new business ACV was up 50% year over year, and Transportation rose by 14%. However, the Commercial segment lagged, with a 15% decline. Still, new capability ACV—selling new products to existing clients—rose by 60%, a cornerstone of the company’s commercial go-to-market strategy.
Valuation remains a contentious issue. At a share price of $1.35, Conduent trades at a price-to-sales ratio of just 0.1x, far below peers at 0.8x and the U.S. professional services industry at 1.1x. Discounted cash flow (DCF) analysis pegs the fair value at about $6.60, nearly five times the current share price, with analyst price targets hovering around $7.00. Bulls argue that cost controls, AI-enabled efficiencies, and portfolio rationalization are not yet reflected in the stock price. The consensus narrative points to projected revenue of $3.4 billion and earnings of $241.5 million by 2028 as the basis for that $7.00 target. Yet, with a trailing net loss of $159 million, skeptics question whether these ambitions are realistic.
During the Q&A session, Agadi acknowledged the risks posed by technological disruption—particularly from AI. She estimated that "roughly 15% to 20% of our business may be exposed to it," but stressed the importance of moving quickly and partnering with nimble AI disruptors to stay ahead. "The risk today is not existential, but it’s dynamic. We’re going to need to get ahead or partner with people who keep us ahead in the arms race if you will of AI," she said. Goodburn added that Conduent is "securing that moat a lot tighter with some of our own AI capabilities as well," particularly in commercial and government applications.
On free cash flow, the company ended 2025 with negative $130 million, but Agadi was direct: "We’re going to try really hard, but definitely the turn is coming. You see the progression." Portfolio rationalization is accelerating, with bankers in place to execute divestitures efficiently. Debt reduction remains a top priority, and management is weighing whether bond buybacks might offer better value than share repurchases given current trading levels.
For now, Conduent’s story is one of transition. The company boasts a strong foundation and deep client relationships, but must prove that its new leadership team and strategic priorities can translate into sustainable growth, expanded margins, and positive free cash flow. As Agadi put it, "Our direction is clear. Our execution plan is now in motion. The actions we’re taking are designed to return Conduent to sustainable revenue growth, expanded margins, and generate strong free cash flow that is sustainable."
With its turnaround plan underway and leadership promising transparency and accountability, all eyes are on Conduent’s next moves—and whether it can finally break free from its cycle of losses to deliver on its long-term promises.