Company: CNDT
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001677703-25-000126
Chunk: 113

Company: CONDUENT Inc
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 8
Chunk 113
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 primarily due to state and local taxes, geographic mix of income, and other nondeductible permanent differences, partially offset by the release of tax valuation allowances due to the gain from divestitures and tax credits.

Excluding the impact of amortization, restructuring, divestiture, valuation allowances and discrete tax items, the normalized effective tax rate for the three months ended June 30, 2025 was 20.5%. The normalized effective tax rate for the three months ended June 30, 2024 was 23.6%, due primarily to excluding the gain from divestitures, restructuring costs, amortization of intangibles, valuation allowance release and other discrete tax adjustments.

CNDT Q2 2025 Form 10-Q26

The effective tax rate for the six months ended June 30, 2025 was 3.1%, compared to 26.3% for the six months ended June 30, 2024. The June 30, 2025 rate was lower than the U.S. statutory rate of 21%, primarily due to valuation allowances and geographic mix of income.  

The effective tax rate for the six months ended June 30, 2024 was higher than the U.S. statutory rate of 21%, primarily due to state and local taxes, geographic mix of income, and other nondeductible permanent differences, partially offset by tax benefit from valuation allowances and audit settlement reserve releases.

Excluding the impact of amortization, restructuring, divestiture, reserves for the Direct response costs - cyber event, valuation allowances and discrete tax items, the normalized effective tax rate for the six months ended June 30, 2025 was 22.3%. The normalized effective tax rate for the six months ended June 30, 2024 was 23.1%, primarily due to excluding the impact of the gain from divestitures, restructuring costs, amortization of intangible assets, litigation reserve releases, audit settlement reserve release, valuation allowance and other discrete tax items.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S. The legislation contains certain provisions related to the full expensing of U.S. research and development costs and other depreciable property. The legislation also includes changes to the determination of the amount of U.S. interest expense that is deductible for U.S. tax purposes. We are evaluating the full effects of the legislation on our estimated annual effective rate and cash tax position. As the legislation was