Conduent Signs Deals To Exit Transportation

The Tip Desk · October 18, 2026 · 3 min read

Conduent said its planned business sales would generate about $234 million in gross proceeds, with most intended for debt reduction.

Conduent Incorporated (CNDT), the business process solutions and services company, agreed to exit Transportation while profitability in its continuing businesses weakened. The portfolio retreat marked a change in a turnaround that had highlighted improving Government and Transportation revenue trends in late 2025 and early 2026. In the latest quarter, the company attributed lower adjusted earnings to weaker Government profitability.

The company signed agreements to sell Public Transit to Modaxo for $164 million and Tolling to Quarterhill for $70 million, plus a 7% equity interest in Quarterhill. The transactions remained pending. Chief Executive Officer Harsha V. Agadi said Conduent intended to use most of the cash proceeds to reduce debt.

The expected $234 million in gross proceeds exceeded Conduent’s first-quarter commitment to generate at least $200 million through portfolio actions. The two sales together represented an exit from Transportation, which the company classified as discontinued operations. It also reclassified the businesses’ comparative results.

That accounting change mattered to the earnings trajectory: the earlier quarters’ headline results included Transportation, while the latest continuing-operations figures excluded it. The reported improvement across the previous two quarters therefore did not provide a directly comparable benchmark for the smaller business. The second-quarter year-earlier comparison, however, showed deterioration on the continuing-operations basis.

Revenue from continuing operations was $531 million against $603 million a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization were $16 million. The remaining business thus entered the next stage of the transformation with a smaller revenue base and limited adjusted profitability, even as Conduent committed to selling the operations that had previously contributed to its reported results.

The adjusted EBITDA margin narrowed to 3.0% from 3.8%. The decline in adjusted EBITDA and margin reflected lower profitability in Government. That contrasted with the company’s first-quarter description of Government as a source of revenue strength, although the measures described different aspects of the segment’s performance. Commercial remained part of the go-forward portfolio.

Transformation spending also weighed on reported earnings. The continuing-operations pre-tax loss widened to $57 million from $43 million a year earlier, primarily because of higher restructuring-related costs. Agadi said Conduent was removing structural costs and making progress against an approximately $100 million annualized cost-savings program; he also said the quarter did not yet reflect the full impact of those actions.

The total net loss was $116 million, including a $47 million loss from discontinued operations. Continuing operations recorded a diluted loss of $0.46 a share. Those figures captured a broader earnings burden than the adjusted measure, which excluded restructuring and other specified items.

Cash generation provided a separate improvement. Operating cash flow turned positive at $7 million from negative $15 million a year earlier. The change primarily reflected favorable working capital, including realization of some long-term projects in Government and former Transportation. Adjusted free cash flow remained negative at $8 million, and cash and cash equivalents stood at $228 million at June’s end.

Conduent recorded $99 million in new-business annual contract value from continuing operations. Its contract activity included a retirement administration engagement with Securian and selection by Trillium Health Resources for claims processing and related services. The company also implemented New Mexico’s Medicaid platform, supporting approximately 900,000 members, and secured a Virginia Medicaid renewal covering approximately 1.6 million members. Agadi said the qualified pipeline continued to grow across Commercial and Government.

For the full year, Conduent’s guidance calls for revenue of $2.15 billion to $2.25 billion and continuing-operations adjusted EBITDA of $140 million to $170 million. The outlook sets the financial target for the business remaining after the planned Transportation exit.