CNDTHIGH SIGNALFINANCIAL10-K

CNDT achieved a dramatic turnaround from a $296M net loss to $426M net profit while experiencing significant deterioration in cash flow and balance sheet strength.

The massive swing to profitability (+243.9%) combined with 40% operating income growth suggests successful operational improvements or restructuring benefits. However, the deteriorating cash conversion (operating cash flow worsened to -$73M despite strong profits) and weakening balance sheet position raise questions about earnings quality and financial sustainability.

Comparing 2026-02-19 vs 2025-02-19View on EDGAR →
FINANCIAL ANALYSIS

CNDT delivered impressive top-line growth with gross profit expanding 14.8% to $1B and achieved remarkable profitability improvement through reduced interest expense (-36%) and controlled R&D spending, swinging from a $296M loss to $426M profit. However, the company's financial foundation weakened significantly with operating cash flow declining to -$73M despite strong earnings, cash reserves falling 36% to $233M, and stockholders' equity decreasing 18% to $685M. This disconnect between reported profits and cash generation, combined with doubled capital expenditures and reduced liquidity, signals potential earnings quality concerns and tighter financial flexibility despite the headline profitability gains.

FINANCIAL STATEMENT CHANGES
Net Income
P&L
+243.9%
-$296.0M→$426.0M

Net income grew 243.9% — bottom-line growth signals improving overall business health.

Capital Expenditure
Cash Flow
+110.7%
$28.0M→$59.0M

Capital expenditure jumped 110.7% — major investment cycle underway; assess returns on deployment.

Operating Cash Flow
Cash Flow
-46%
-$50.0M→-$73.0M

Operating cash flow fell 46% — earnings quality concerns; investigate working capital changes and non-cash items.

Operating Income
P&L
+40.5%
$74.0M→$104.0M

Operating leverage kicking in — revenue growth outpacing cost growth, a hallmark of scaling businesses.

Cash & Equivalents
Balance Sheet
-36.3%
$366.0M→$233.0M

Cash declined 36.3% — significant cash burn or deployment; verify adequacy of remaining liquidity runway.

Interest Expense
P&L
-36%
$75.0M→$48.0M

Interest expense declined — debt repayment or refinancing at lower rates improving earnings quality.

R&D Expense
P&L
-33.3%
$6.0M→$4.0M

R&D spending cut 33.3% — could signal cost discipline or concerning reduction in innovation investment.

Stockholders Equity
Balance Sheet
-18.4%
$839.0M→$685.0M

Equity decreased 18.4% — buybacks or losses reducing book value, monitor solvency ratios.

Gross Profit
P&L
+14.8%
$910.0M→$1.0B

Gross profit expanding — improving pricing power or product mix shift toward higher-margin offerings.

Current Assets
Balance Sheet
-14.6%
$1.3B→$1.1B

Current assets declined 14.6% — monitor working capital adequacy and short-term liquidity.

LANGUAGE CHANGES
NEW — 2026-02-19
PRIOR — 2025-02-19
ADDED
Each day, our solutions and services interact in the lives of millions of people in many ways - from safer, more seamless commutes with reduced congestion to streamlined benefits enrollment, documents management, customer experiences and government healthcare claims.
In 2025, we managed approximately 2 billion customer service interactions, captured and classified over 14 billion documents and claims, and supported millions of employees with human resource ("HR") services.
Our government portfolio includes government healthcare, eligibility and enrollment solutions, digital payments and child support payments, ensuring efficient Medicaid healthcare claims processing and delivery of benefits to the most vulnerable populations while reducing the risk of fraud.
Our solutions help state agencies determine eligibility, streamline enrollment, adjudicate claims and meet requirements for government-funded healthcare programs.
In 2025, we processed over 454 million Medicaid claims and disbursed approximately $80 billion in government benefit payments.
+7 more — sign up free →
REMOVED
Each day, our solutions and services interact in the lives of millions of people in many ways - from safer, more seamless commutes that reduce congestion to streamlined benefits enrollment, digital payments, customer experiences and government healthcare claims.
In 2024, we managed approximately 2.3 billion customer service interactions, captured and classified 10 billion documents and claims and supported millions of employees with human resource ("HR") services.
Our government portfolio includes government healthcare, eligibility and enrollment solutions, digital payments and child support payments, ensuring efficient Medicaid healthcare claims processing and delivery of benefits to the most vulnerable populations.
Our solutions help state agencies determine eligibility, streamline enrollment, adjudicate claims and meet modularity mandates for government-funded healthcare programs.
In 2024, we processed nearly 450 million Medicaid claims and disbursed approximately $85 billion in government benefit payments.
+7 more — sign up free →
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