- Company name
- Cognizant
- Sector
- IT services
- About
- Cognizant provides IT and business services to large companies. It builds and runs software, data and AI systems, modernizes infrastructure and runs business processes. Financial Services is its largest and most mature segment. Revenue was $5.48 billion in Q2 2026, and headcount was 356,700 at June 30, 2026. In 2026, it bought 3Cloud, a Microsoft Azure services provider, and Astreya, an IT managed services provider. Ravi Kumar S is CEO.
- Thesis
- The market fears that AI tools will reduce demand for the labor-based IT services that Cognizant sells. Revenue growth in constant currency slowed to 4.8% in Q3 2026 from 6.5% a year earlier, and quarterly bookings fell 6% in Q2 and 7% in Q3. In October 2026, Cognizant lowered the top of its 2026 revenue guidance, to growth of 4.0% to 4.4% in constant currency from 4.0% to 5.5%. Its Project Leap restructuring costs $180 million to $250 million in 2026 and Q1 2027. Management says that AI creates more work in data, infrastructure and engineering. The adjusted operating margin rose for the seventh quarter in a row, and the company spent $2.3 billion on buybacks and dividends in the first nine months of 2026. For the gap to close, three things must be true. Revenue must grow within the Q4 2026 guidance of 3.2% to 4.7% in constant currency, and growth must not slow further in 2027. The adjusted operating margin must reach about 16.1% in 2026 and keep rising. Bookings must grow again, so that the trailing 12-month book-to-bill stays above 1.0. The Q4 2026 report and the 2027 outlook in early 2027 are the next tests. If these checks pass, the gap can close over the next two years. The main reason it may not close is that AI lowers prices for IT services faster than new AI work grows.
- Risks
- AI tools can do more of the coding, testing and support work that Cognizant sells by the hour. Clients can ask for lower prices or fewer people, and revenue can grow slower than costs fall.
Quarterly bookings fell 6% in Q2 2026 and 7% in Q3 2026. If large deals slow further, revenue growth falls in 2027.
Voluntary attrition was 12.6% in the 12 months to September 30, 2026, after 13.0% in the 12 months to June 30, 2026. Higher attrition raises hiring and training costs and can lower delivery quality.
Debt was $1.55 billion at September 30, 2026, up from $576 million at December 31, 2025, after buybacks and acquisitions. Debt is still small compared with earnings.
- Balance sheet
- Cash: $1.6B
Debt: $1.6B
Net debt: $0.0M
Interest cover: 66×
Undrawn credit line: $850M, to October 2031
Debt due within 12 months: $0.0M
Last debt due: 2031
Cognizant has low debt. At September 30, 2026, debt was $1.55 billion, all long-term: $1.0 billion drawn on the revolving credit facility and the rest on the term loan. Cash and short-term investments were $1.55 billion, down from $1.91 billion at December 31, 2025, after share repurchases and acquisitions in 2026. On October 5, 2026, Cognizant replaced its credit facilities with a $550 million term loan and a $1.85 billion revolving credit facility, both due in October 2031, and borrowed $1.0 billion under the new revolver to repay the old one. Principal payments on the new term loan start in December 2027. In October 2026, Cognizant agreed to buy DyFlex Solutions for about $210 million in cash. Interest cover is income from operations of $2.59 billion divided by interest expense of $39 million for the first nine months of 2026.
As of Sep 30, 2026.
- Checkpoints
- Oct 29, 2026: Q3 2026 earnings: growth and bookings. Failed. Watch: Revenue within the Q3 guidance of $5.60 billion to $5.68 billion and growing bookings pass; revenue below guidance or another fall in bookings fail. Outcome: Revenue of $5.66 billion was within the guidance, but Q3 bookings fell 7% from a year earlier, after a 6% fall in Q2.
Jan 29, 2027 (estimate): Q4 2026 earnings: 2027 outlook. Pending. Watch: 2027 guidance for revenue growth near 2026 levels and further margin expansion pass; guidance for slower growth or a lower margin fail.
- Recent events
- Oct 29, 2026: Cognizant reported Q3 2026 results. Revenue rose 4.6% to $5.66 billion, or 4.8% in constant currency, and Financial Services revenue grew 12%. Adjusted EPS rose 7.2% to $1.49, and the adjusted operating margin rose to 16.3% from 16.0%. Trailing 12-month bookings rose 4% to $28.7 billion, a book-to-bill of about 1.3, but Q3 bookings fell 7%. Cognizant lowered its 2026 revenue growth guidance to 4.0% to 4.4% in constant currency, from 4.0% to 5.5%, and set adjusted EPS guidance at $5.72 to $5.79, from $5.70 to $5.82. It now expects Project Leap costs of $180 million to $250 million.
Oct 21, 2026: Cognizant agreed to buy DyFlex Solutions, an SAP transformation firm based in Australia, for about $210 million in cash, subject to closing adjustments.
Oct 5, 2026: Cognizant signed new credit facilities: a $550 million term loan and a $1.85 billion revolving credit facility, both due on October 3, 2031. It used them to repay its old term loan and about $1.0 billion of revolving loans.
Jul 29, 2026: Cognizant reported Q2 2026 results. Revenue rose 4.5% to $5.48 billion, or 4.1% in constant currency. Adjusted EPS rose 4.6% to $1.37. Trailing 12-month bookings rose 5% to $29.1 billion, but Q2 bookings fell 6%. It raised 2026 adjusted EPS guidance to $5.70 to $5.82 and narrowed revenue growth guidance to 4.0% to 5.5% in constant currency.
Jun 22, 2026: Cognizant completed its purchase of Astreya, an AI-first IT managed services provider, for $634 million net of cash, including contingent consideration of $25 million.
May 18, 2026: Cognizant raised its 2026 share repurchase target by $1 billion to $2 billion, and the board added $2 billion to the repurchase authorization. The company borrowed $1 billion under its revolving credit facility for the buyback and the Astreya purchase.