CONDUENT Inc
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
CNDT$1.42-13.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0001677703-26-000092
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001677703-26-000154
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 157 previous paragraphs and 156 current paragraphs.
114 unchanged; 33 reworded; 8 added; 10 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
•Introduced our ASCEND 2026-28 framework at our Investor Day, outlining a three-year path to consistent growth and profitable performance focused on standardizing operations and infrastructure, specializing in core solutions, and scaling our go-to-market capabilities.
Current report
•Secured a contract spanning up to 14 years to continue operating and modernizing a large Government client’s Medicaid program delivery system, extending a long-standing relationship and further strengthening our position in the Government healthcare market.
Current report
•Appointed a Chief Information and Technology Officer to lead our global technology strategy and advance our transformation efforts, including accelerating AI adoption and modernizing our technology capabilities.
Current report
Subsequent to the end of the third quarter of 2026, we achieved the following:
Current report
•On October 1, 2026, we completed the sale of our Public Transit Business for a base purchase price of $164 million, subject to customary adjustments. The sale of our Tolling business is expected to occur by the end of 2026 and, upon completion, will represent our exit from the Transportation segment.
Current report
•On October 16, 2026, we entered into a Class Action Settlement Agreement and Release (the "Settlement Agreement") with the plaintiffs for the January 2025 cybersecurity incident pending preliminary approval by the US District Court for the District of New Jersey. Conduent's insurers will fund the settlement of $80 million into a non-reversionary settlement fund, inclusive of the recovery amount for class members, costs of credit and medical data monitoring, fees for the plaintiffs’ counsel, and the costs of administering the settlement, and is the total monetary obligation under the Settlement Agreement.
Current report
•On October 23, 2026, the Company completed the refinancing of its existing $357 million senior secured revolving credit facilities with its existing revolving lenders by extending the maturities and adding $90 million of additional commitments, consisting of $75 million of new first-out revolving commitments and a new $15 million backstop performance letter of credit facility.
Current report
On October 23, 2026, the Company completed the refinancing of its existing $357 million Facility pursuant to a refinancing agreement (the "Refinancing Agreement"), which extended the maturities to May 31, 2029 and added $90 million of additional commitments, consisting of $75 million of new revolving commitments and a new $15 million backstop performance letter of credit facility (the "New Facility"). Pursuant to the terms of the Refinancing Agreement, the Company used $131 million of proceeds from the sale of the Transit Business to repay outstanding borrowings under the New Facility. In addition, the Company paid $22 million of debt issuance costs at closing. The aggregate commitments under the New Facility will be reduced by $80 million no later than December 31, 2026, or earlier upon the closing of a new accounts receivable factoring facility. On October 28, 2026, the Company borrowed $75 million under the New Facility. The Company expects to repay the $75 million borrowing using proceeds from the anticipated sale of the Tolling Business and available cash for the remaining balance.
Removed paragraphs (10)
Previous report
•Entered into agreements to sell the Transit and Tolling businesses, which together comprise our Transportation segment, for aggregate consideration of $248 million less $15 million in cash to be transferred with the Transit Business on the day of closing. The transactions are expected to close in the second half of 2026. Collectively, these two transactions represent an exit from the Transportation business, a strategic shift that will have a major effect on the Company's operations and financial results, and as such, qualifies for reporting as discontinued operations. See Note 5 – Divestitures and Discontinued Operations for additional information. As of June 30, 2026, the Company had total outstanding surety bonds of $570 million and performance and other letters of credit of $123 million. In connection with the divestitures, $473 million of these bonds and $89 million of the letters of credit are expected to be transferred to the respective buyers.
Previous report
•Launched the 2026 Restructuring Program, a company-wide transformation initiative focused on improving growth, margins, operational execution, and efficiency across our global organization. This initiative is designed to accelerate growth, improve delivery, modernize technology and optimize support functions and is expected to deliver at least $100 million in annual savings.
Previous report
•Secured a significant expansion with an existing Commercial client, adding approximately 1,000 associates to support customer experience operations. This engagement represents one of the largest growth opportunities within our healthcare portfolio and demonstrates our ability to scale delivery capabilities while maintaining operational excellence.
Previous report
•Appointed a Head of Global Shared Services to further strengthen accountability, enhance operational consistency, and improve execution across our global organization. The leadership appointment supports the continued alignment of key global functions and enables our client delivery teams to remain focused on serving clients.
Previous report
Cyber Event
Previous report
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 Company’s environment (the "January 2025 Cyber Event"). Upon detection, the Company activated its cybersecurity response plan with the help of external cybersecurity experts to contain, assess, and remediate the incident. The Company restored the affected systems and returned to normal operations within days, and in some cases, hours. The disruption did not have a material impact to the Company’s operations.
Previous report
As part of its investigation, the Company determined that the threat actor exfiltrated a set of files associated with a limited number of the Company’s clients. Due to the complexity of the files, the Company engaged cybersecurity data mining experts to conduct a detailed analysis of the affected files to identify the personal information contained therein. This detailed analysis confirmed that the data sets contained a significant number of individuals’ personal information associated with our clients’ end-users. Upon completion of this time intensive data analysis, the Company notified impacted clients concerning their affected end-users. The Company worked with affected clients to determine next steps as required by federal and state law, including individual and regulatory notifications that began in October 2025 and have been substantially concluded. To the Company’s knowledge, the exfiltrated data has not been released on the dark web or otherwise publicly. The Company has also notified federal law enforcement authorities of the incident.
Previous report
While the Company did not experience material impacts to its operating environment or costs from the event itself, the Company incurred and accrued $25 million of non-recurring expenses in the first quarter of 2025 related to the event based on the notification requirements described above. We have made cash disbursements of $25 million through June 30, 2026 related to this matter. Any expense in excess of this amount up to the coverage limit have been and are anticipated to be covered by the cyber insurance policy that the Company maintains.
Previous report
It is possible that future risks and uncertainties resulting from the January 2025 Cyber Event, including those related to impacted data, litigation, reputational harm, and regulatory actions, could adversely affect the Company’s financial condition or results of operations. See also Note 12 – Contingencies and Litigation contained herein and Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2025 (Risk Factors).
Previous report
Government segment profit and Adjusted EBITDA for the three months ended June 30, 2026 decreased, compared to the prior year period, primarily due to the revenue drivers noted above. Government Adjusted EBITDA Margin for the three months ended June 30, 2026 decreased compared to the prior year period, primarily due to reserves recorded in the current year and a favorable reserve reversal recognized in the second quarter of 2025.
Reworded paragraphs (33)
Previous wording
Our transformation at Conduent continued during the second quarter of 2026 as we built upon the strategic priorities established earlier in the year. Throughout the quarter, we remained focused on driving growth in targeted markets, advancing portfolio optimization initiatives, strengthening operational execution, and improving the efficiency of our cost structure. These actions contributed to continued progress in our efforts to position the Company for sustainable long-term growth and profitability. Our priorities remain unchanged: accelerating execution, enforcing financial discipline, reducing costs, optimizing the portfolio, converting pipeline into growth, and simplifying the organization. During the second quarter, we made further progress against these objectives and believe we are building momentum as we move through the remainder of 2026.
Current wording
Our transformation at Conduent continued during the third quarter of 2026 as we built upon the strategic priorities established earlier in the year. Throughout the quarter, we remained focused on driving growth in targeted markets, advancing portfolio optimization initiatives, strengthening operational execution, and improving the efficiency of our cost structure. These actions contributed to continued progress in our efforts to position the Company for sustainable long-term growth and profitability. Our priorities remain unchanged: accelerating execution, enforcing financial discipline, reducing costs, optimizing the portfolio, converting pipeline into growth, and simplifying the organization. During the third quarter, we made further progress against these objectives and believe we are building momentum as we move through the remainder of 2026.
Previous wording
During the second quarter of 2026 we achieved the following:
Current wording
During the third quarter of 2026 we achieved the following:
Previous wording
Revenue for the three and six months ended June 30, 2026 decreased compared to the prior year period, primarily driven by contract losses, including the loss of the largest Commercial segment customer, and lower volumes, partially offset by new business ramp.
Current wording
Revenue for the three and nine months ended September 30, 2026 decreased compared to the prior year period, primarily driven by contract losses, including the loss of the largest Commercial segment customer, and lower volumes, partially offset by new business ramp.
Previous wording
Cost of services for the three and six months ended June 30, 2026 decreased compared to the prior year periods, primarily driven by lower expenses associated with reduced revenues and cost optimization initiatives.
Current wording
Cost of services for the three and nine months ended September 30, 2026 decreased compared to the prior year periods, primarily driven by lower expenses associated with reduced revenues and cost optimization initiatives.
Previous wording
SG&A for the six months ended June 30, 2026 decreased compared to the prior year period, primarily driven by non-recurring items in the first quarter of 2025. These items included the $25 million of direct response costs related to the January 2025 Cyber Event and the $9 million benefit from the recovery of legal costs from one of our insurance carriers related to the previously disclosed State of Texas matter that settled in February 2019. In addition, cost efficiencies in our corporate functions and lower healthcare costs resulting from reduced U.S. headcount contributed to the decrease. The current year period SG&A also included two offsetting items. Separation costs of approximately $4 million related to the departure of our former Chief Executive Officer were offset by an approximate $3 million net benefit related to our 2025 Annual Performance Incentive Plan as described in Note 13 – Preferred Stock and Common Stock.
Current wording
SG&A for the nine months ended September 30, 2026 decreased compared to the prior year period, some of which was driven by non-recurring items in the first quarter of 2025. These items included the $25 million of direct response costs related to the January 2025 Cyber Event and the $9 million benefit from the recovery of legal costs from one of our insurance carriers related to the previously disclosed State of Texas matter that settled in February 2019. In addition, cost efficiencies in our corporate functions and lower healthcare costs resulting from reduced U.S. headcount contributed to the decrease. The current year period SG&A also included two offsetting items. Separation costs of approximately $4 million related to the departure of our former Chief Executive Officer were offset by an approximate $3 million net benefit related to our 2025 Annual Performance Incentive Plan as described in Note 13 – Preferred Stock and Common Stock.
Previous wording
Depreciation and amortization for the three and six months ended June 30, 2026 decreased compared to the prior year periods due to lower capital investments.
Current wording
Depreciation and amortization for the three and nine months ended September 30, 2026 decreased compared to the prior year periods due to lower capital investments.
Previous wording
Restructuring and related costs for the three and six months ended June 30, 2026 increased compared to the prior year periods due to the 2026 Restructuring Program noted above. Refer to Note 6 – Restructuring Programs and Related Costs to the Condensed Consolidated Financial Statements for additional information regarding our restructuring programs.
Current wording
Restructuring and related costs for the three and nine months ended September 30, 2026 increased compared to the prior year periods due to the 2026 Restructuring Program. Refer to Note 6 – Restructuring Programs and Related Costs to the Condensed Consolidated Financial Statements for additional information regarding our restructuring programs.
Previous wording
Interest expense represents interest on long-term debt and the amortization of debt issuance costs. Interest expense for the three and six months ended June 30, 2026 increased slightly, compared to the prior year periods due to higher average outstanding debt balances under our Credit Facility.
Current wording
Interest expense represents interest on long-term debt and the amortization of debt issuance costs. Interest expense for the three and nine months ended September 30, 2026 increased, compared to the prior year periods due to higher average outstanding debt balances under our Credit Facility.
Previous wording
(Gain) loss on divestitures and transaction costs include professional fees and other costs related to consummated and certain other non-consummated transactions considered by the Company related to its portfolio rationalization activities. These costs exclude costs directly related to the pending divestitures of our Transit and Tolling businesses, which have been reclassified to Income (loss) from discontinued operations, net of tax. The remaining amount of these costs for the three and six months ended June 30, 2026 declined, compared to the prior year periods, due to reduced portfolio rationalization activities.
Current wording
(Gain) loss on divestitures and transaction costs includes professional fees and other costs related to consummated and certain other non-consummated transactions considered by the Company related to its portfolio rationalization activities. These costs exclude costs directly related to the divestitures of our Transit and Tolling businesses, which have been reclassified to Income (loss) from discontinued operations, net of tax. The remaining transaction costs for the nine months ended September 30, 2026 decreased, compared to the prior year periods, due to reduced portfolio rationalization activities.
Previous wording
Litigation settlements (recoveries), net for the six months ended June 30, 2026 and 2025 were not material.
Current wording
Litigation settlements (recoveries), net for the nine months ended September 30, 2026 and 2025 were not material.
Previous wording
Other (income) expenses, net for the six months ended June 30, 2026 and 2025 primarily include interest income on cash investments, accounts receivable factoring fees and foreign currency transaction losses (gains).
Current wording
Other (income) expenses, net for the nine months ended September 30, 2026 and 2025 primarily include interest income on cash investments, accounts receivable factoring fees and foreign currency transaction losses (gains).
Previous wording
The effective continuing operations tax rate for the three months ended June 30, 2026 was (20.8)%, compared to 2.7% for the three months ended June 30, 2025. The June 30, 2026 rate was lower than the U.S. statutory rate of 21%, primarily due to valuation allowances, geographic mix of income and discrete taxes. The effective tax rate for the three months ended June 30, 2025 was lower than the U.S. statutory rate of 21%, primarily due to valuation allowances and geographic mix of income.
Current wording
The effective continuing operations tax rate for the three months ended September 30, 2026 was (12.3)%, compared to (12.0)% for the three months ended September 30, 2025. The September 30, 2026 rate was lower than the U.S. statutory rate of 21%, primarily due to valuation allowances, geographic mix of income and discrete taxes. The effective tax rate for the three months ended September 30, 2025 was lower than the U.S. statutory rate of 21%, primarily due to valuation allowances and geographic mix of income.
Previous wording
Excluding the impact of restructuring, divestiture-related transaction costs, other expenses, amortization, valuation allowances and discrete tax items, the normalized effective tax rate for the three months ended June 30, 2026 was 20.5%. The normalized effective tax rate for the three months ended June 30, 2025 was 21.9%, primarily due to excluding the impact of amortization, restructuring, divestitures, valuation allowances and discrete tax items.
Current wording
Excluding the impact of restructuring, divestiture-related transaction costs, other expenses, amortization, valuation allowances and discrete tax items, the normalized effective tax rate for the three months ended September 30, 2026 was (0.6)%. The normalized effective tax rate for the three months ended September 30, 2025 was 31.7%, due primarily to excluding the impact of amortization, restructuring, divestitures, valuation allowances and discrete tax items.
Previous wording
The effective continuing operations tax rate for the six months ended June 30, 2026 was (20.2)%, compared to 6.8% for the six months ended June 30, 2025. The June 30, 2026 rate was lower than the U.S. statutory rate of 21%, primarily due to valuation allowances, geographic mix of income and discrete taxes. The effective tax rate for the six months ended June 30, 2025 was lower than the U.S. statutory rate of 21%, primarily due to valuation allowances and geographic mix of income.
Current wording
The effective continuing operations tax rate for the nine months ended September 30, 2026 was (17.7)%, compared to 1.8% for the nine months ended September 30, 2025. The September 30, 2026 rate was lower than the U.S. statutory rate of 21%, primarily due to valuation allowances, geographic mix of income and discrete taxes. The effective tax rate for the nine months ended September 30, 2025 was lower than the U.S. statutory rate of 21%, primarily due to valuation allowances and geographic mix of income.
Previous wording
Excluding the impact of restructuring, former CEO departure costs, divestiture-related transaction costs, other expenses, amortization, valuation allowances and discrete tax items, the normalized effective tax rate for the six months ended June 30, 2026 was 24.0%. The normalized effective tax rate for the six months ended June 30, 2025 was 24.9%, primarily due to excluding the impact of amortization, restructuring, divestitures, reserves for the Direct response costs - cyber event, valuation allowances and discrete tax items.
Current wording
Excluding the impact of restructuring, former CEO departure costs, divestiture-related transaction costs, other expenses, amortization, valuation allowances and discrete tax items, the normalized effective tax rate for the nine months ended September 30, 2026 was 17.1%. The normalized effective tax rate for the nine months ended September 30, 2025 was 26.8%, primarily due to excluding the impact of amortization, restructuring, divestitures, reserves for the Direct response costs - cyber event, valuation allowances and discrete tax items.
Previous wording
Net loss from discontinued operations, net of tax for all periods presented relates to the reclassification of our former Transportation segment to discontinued operations. The three and six months ended June 30, 2026 amounts include the impairment loss of $31 million related to our Tolling business. See Note 5 – Divestitures and Discontinued Operations for additional information.
Current wording
Net loss from discontinued operations, net of tax for all periods presented relates to the reclassification of our former Transportation segment to discontinued operations. The three and nine months ended September 30, 2026 amounts include certain unfavorable customer contract related adjustments and the impairment loss related to our Tolling business. See Note 5 – Divestitures and Discontinued Operations for additional information.
Previous wording
(2)Unallocated Costs in Segment profit (loss) includes certain indirect costs that are no longer allocated to the former Transportation segment, which is now classified as Discontinued Operations. These costs were $4 million and $6 million for the three months ended June 30, 2026 and 2025, respectively. These costs were $8 million and $13 million for the six months ended June 30, 2026 and 2025, respectively.
Current wording
(2)Unallocated Costs in Segment profit (loss) includes certain indirect costs that are no longer allocated to the former Transportation segment, which is now classified as Discontinued Operations. These costs were $4 million and $5 million for the three months ended September 30, 2026 and 2025, respectively. These costs were $12 million and $18 million for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
Commercial revenue for the three and six months ended June 30, 2026 decreased, compared to the prior year periods, primarily driven by contract losses, including our largest customer, and lower volumes, partially offset by new business ramp.
Current wording
Commercial revenue for the three and nine months ended September 30, 2026 decreased, compared to the prior year periods, primarily driven by contract losses, including our largest customer, lower volumes, and the non-recurrence of a multi-year licensing agreement entered into in the prior year, partially offset by new business ramp.
Previous wording
Commercial segment profit and Adjusted EBITDA for the three months ended June 30, 2026 decreased, compared to the prior year period, primarily due to the revenue drivers noted above, as well as negative discrete impacts from penalties and unfavorable price adjustments.
Current wording
Commercial segment profit and Adjusted EBITDA for the three months ended September 30, 2026 decreased, compared to the prior year period, primarily due to the revenue drivers noted above, particularly the non-recurrence of the prior year multi-year licensing agreement.
Previous wording
Commercial segment profit for the six months ended June 30, 2026 increased, compared to the prior year period, while Adjusted EBITDA remained relatively flat. The increase in segment profit was primarily driven by cost efficiencies implemented in the second half of the prior year, including lower fixed technology overhead, partially offset by the revenue drivers and discrete negative impacts from penalties and unfavorable price adjustments noted above.
Current wording
Commercial segment profit remained relatively flat, while Adjusted EBITDA for the nine months ended September 30, 2026 decreased compared to the prior-year period. The decrease in Adjusted EBITDA was primarily driven by the revenue drivers noted above, partially offset by cost efficiencies implemented in the second half of the prior year, including lower fixed technology overhead.
Previous wording
Government revenue for the three and six months ended June 30, 2026 decreased, compared to the prior year periods, primarily due to contract losses and lower volumes. These declines were partially offset by the ramp of new business.
Current wording
Government revenue for the three and nine months ended September 30, 2026 decreased, compared to the prior year periods, primarily due to contract losses and lower volumes. These declines were partially offset by the ramp of new business.
Previous wording
Government segment profit and Adjusted EBITDA for the six months ended June 30, 2026 increased, compared to the prior year period, primarily due to cost efficiencies and continued lower expenses in our Government Services business, partially offset by the revenue drivers noted above.
Current wording
Government segment profit and Adjusted EBITDA for the nine months ended September 30, 2026 increased, compared to the prior year period, primarily due to cost efficiencies and continued lower expenses in our Government Services business, partially offset by the revenue drivers noted above.
Previous wording
Unallocated Costs for the three and six months ended June 30, 2026 were favorable, compared to the prior year period, primarily driven by the absence of non-recurring items recognized in the prior year, including direct response costs related to the January 2025 Cyber Event and the recovery of legal costs from an insurance carrier related to the previously disclosed State of Texas matter, as well as cost efficiencies in our corporate functions.
Current wording
Unallocated Costs for the three and nine months ended September 30, 2026 were favorable, compared to the prior year period, primarily driven by cost efficiencies in our corporate functions and the absence of non-recurring items recognized in the prior year, including direct response costs related to the January 2025 Cyber Event and the recovery of legal costs from an insurance carrier related to the previously disclosed State of Texas matter.
Previous wording
Signings information for the three and six months ended June 30, 2026 and 2025 is as follows:
Current wording
Signings information for the three and nine months ended September 30, 2026 and 2025 is as follows:
Previous wording
The total new business pipeline as of June 30, 2026 and 2025 was $3.0 billion and $2.7 billion, respectively. Total new business pipeline is defined as total new business ACV pipeline of deals at or beyond the qualified prospect stage. This extends past the next twelve-month period to include total pipeline.
Current wording
The total new business pipeline as of September 30, 2026 and 2025 was $2.9 billion and $2.9 billion, respectively. Total new business pipeline is defined as total new business ACV pipeline of deals at or beyond the qualified prospect stage. This extends past the next twelve-month period to include total pipeline.
Previous wording
As of June 30, 2026 and December 31, 2025, total cash and cash equivalents were $228 million and $233 million, respectively. We also have a $357 million Revolving Credit Facility (the "Facility") (reducing to $187 million in October 2026 and maturing in August 2028) for our various cash needs. As of June 30, 2026 we had $144 million outstanding borrowings under the Facility and an additional $23 million was used for letters of credit. The net amount available under the Facility as of June 30, 2026, was $190 million and the amount of borrowings at each quarter-end may be limited by our leverage covenant. Subsequent to the balance sheet date, in July 2026, the Company borrowed $183 million under its Revolving Credit Facility and there are no plans to utilize the funds at this time.
Current wording
As of September 30, 2026 and December 31, 2025, total cash and cash equivalents were $292 million and $233 million, respectively. We also had a $357 million Revolving Credit Facility (the "Facility") (reducing to $187 million in October 2026 and maturing in August 2028) for our various cash needs. As of September 30, 2026 we had $327 million outstanding borrowings under the Facility and an additional $26 million was used for letters of credit. The net amount available under the Facility as of September 30, 2026, was $4 million and the amount of borrowings at each quarter-end may be limited by our leverage covenant.
Previous wording
As of June 30, 2026, our total principal debt outstanding was $722 million, of which $21 million was due within one year. We have the intent and ability to refinance the amount outstanding under the Facility on a long-term basis; therefore, all amounts outstanding as of June 30, 2026 are classified as long-term on our Condensed Consolidated Balance Sheets. Refer to Note 7 – Debt in the Condensed Consolidated Financial Statements for additional debt information.
Current wording
As of September 30, 2026, our total principal debt outstanding was $903 million, of which $191 million was due within one year.
Previous wording
The net improvement in cash used in operating activities of $72 million, compared to the prior year period, was primarily due to favorable working capital results, which included, among other things, the effects of the natural evolution of some of our long-term projects in the Government and former Transportation segments whereby milestones have been achieved and contractual amounts billed and collected. This was partially offset by lower Adjusted EBITDA and higher January 2025 Cyber Event-related payments.
Current wording
The net improvement in cash used in operating activities of $4 million, compared to the prior year period, was primarily due to favorable working capital results, which included, among other things, the effects of the natural evolution of some of our long-term projects in the Government and former Transportation segments whereby milestones have been achieved and contractual amounts billed and collected. This favorable result occurred despite the lower sales of accounts receivable under our factoring agreement as noted below. The favorable working capital result was partially offset by lower discontinued operations Adjusted EBITDA, and higher cash income taxes and cash interest expense.
Previous wording
The increase in cash provided by financing activities was due to a net $35 million draw-down of the Facility for various cash needs in the current year as well as the absence of Treasury stock purchases and the repurchase of the noncontrolling interest in an Australian entity, both of which were made in the prior year.
Current wording
The increase in cash provided by financing activities was due to a net $218 million draw-down of the Facility for various cash needs in the current year as well as the absence of Treasury stock purchases and the repurchase of the noncontrolling interest in an Australian entity, both of which were made in the prior year. The prior year also included the impacts of the 2025 Credit Agreement including the repayment of Term Loan A with proceeds from the Facility and additional borrowings under the Facility for working capital purposes.
Previous wording
We have entered into a factoring agreement in the normal course of business as part of our cash and liquidity management, to sell certain accounts receivable without recourse to a third-party financial institution. The transactions under this agreement are treated as sales and are accounted for as reductions in accounts receivable because the agreement transfers effective control over, and risk related to, the receivables to the buyer. Cash proceeds from this arrangement are included in cash flow from operating activities in the Condensed Consolidated Statements of Cash Flows.
Current wording
We have entered into a factoring agreement in the normal course of business as part of our cash and liquidity management, to sell certain accounts receivable without recourse to a third-party financial institution. The transactions under this agreement are treated as sales and are accounted for as reductions in accounts receivable because the agreement transfers effective control over, and risk related to, the receivables to the buyer. Cash proceeds from this arrangement are included in cash flow from operating activities in the Condensed Consolidated Statements of Cash Flows. During the third quarter of 2026, the third-party financial institution ceased their purchases of our accounts receivable. As part of the October 2026 New Facility discussed above, this institution has agreed to restart their purchases. The factoring agreement will terminate on December 31, 2026 and is expected to be replaced with an approximate equal sized facility with another institution. If the Company does not execute a new agreement by December 31, 2026, such failure will constitute an event of default under the New Facility.
Previous wording
The net impact from the sales of accounts receivable on net cash provided by (used in) operating activities for the six months ended June 30, 2026 and 2025 was $(1) million and $(11) million, respectively.
Current wording
The net impact from the sales of accounts receivable on net cash provided by (used in) operating activities for the nine months ended September 30, 2026 and 2025 was $(106) million and $(12) million, respectively.
Previous wording
We believe our balances of cash and cash equivalents, which totaled $228 million as of June 30, 2026, 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.
Current wording
We believe our balances of cash and cash equivalents, which totaled $292 million as of September 30, 2026, 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.
Previous wording
There have been no significant changes during the six months ended June 30, 2026 to our critical accounting estimates and policies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Current wording
There have been no significant changes during the nine months ended September 30, 2026 to our critical accounting estimates and policies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Government segment profit and Adjusted EBITDA for the three months ended September 30, 2026 increased, compared to the prior year period, primarily due to cost efficiencies, partially offset by the revenue drivers noted above.