Company: CNDT
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001677703-25-000152
Chunk: 61

Company: CONDUENT Inc
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 1
Chunk 61
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 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 is working 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 are anticipated to be concluded by early 2026. 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. 

CNDT Q3 2025 Form 10-Q24

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 $9 million through September 30, 2025 and expect to make an additional $16 million of cash disbursements by the end of the first quarter of 2026 related to these notification requirements. Any notification expense in excess of these amounts up to the coverage limit are anticipated to be covered by the cyber insurance policy that the Company maintains.

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 Part II, Item 1A (Risk Factors).

Financial Information and Analysis of Results of Operations

Three Months Ended September 30,2025 vs. 2024(in millions)20252024$ Change% ChangeRevenue$767 $807 $(40)(5)%Operating Costs and ExpensesCost of services (excluding depreciation and amortization)631 656 (25)(4)%Selling, general and administrative (excluding depreciation and amortization)96 115 (19)(17)%Research and development (excluding depreciation and amortization)1 1 — — %Depreciation and amortization48 44 4 9 %Restructuring and related costs12 4 8 200 %Interest expense12 16