10-QPeriod: Q1 FY2026

COGNIZANT TECHNOLOGY SOLUTIONS CORP Quarterly Report for Q1 Ended Mar 31, 2026

Filed April 29, 2026For Securities:CTSH

Summary

Cognizant Technology Solutions Corporation (CTSH) reported solid revenue growth of 5.8% year-over-year for the first quarter of 2026, reaching $5.413 billion. This growth was driven by increased demand for AI and automation services, new large deal wins, and contributions from recent acquisitions, partially offset by lower sales of third-party products in certain segments. While GAAP income from operations saw a slight decrease of 1.2%, adjusted income from operations increased by 6.6%, indicating operational efficiencies and favorable currency movements. The company's diluted EPS grew by 3.7% to $1.39. Cognizant also announced "Project Leap," a strategic initiative to accelerate transformation and improve productivity, which is expected to incur costs of $230 million to $320 million in 2026 but generate significant savings. The company continues to navigate a dynamic market, emphasizing investments in AI capabilities and adapting its operating model for future resilience.

Financial Highlights

49 data points
Beta

Revenue

$5.41B

Net Income

$662.00M

12.2% Net Margin

EPS (Diluted)

$1.39

Total Assets

$20.50B

Cash & Equivalents

$1.50B

Free Cash Flow

$198.00M

Financial Statements
Beta
Revenue$5.41B
SG&A Expenses$791.00M
Operating Income$843.00M
Net Income$662.00M
EPS (Basic)$1.39
EPS (Diluted)$1.39
Shares Outstanding (Basic)477.00M
Shares Outstanding (Diluted)477.00M

Key Highlights

  • 1Revenue increased 5.8% to $5.413 billion in Q1 2026 compared to Q1 2025, with constant currency growth of 3.9%.
  • 2Net income remained stable at $662 million for Q1 2026, a slight decrease of 0.2% from $663 million in Q1 2025.
  • 3Diluted Earnings Per Share (EPS) increased by 3.7% to $1.39 in Q1 2026, up from $1.34 in Q1 2025.
  • 4The company acquired 3Cloud, a Microsoft Azure services provider, on January 1, 2026, for $728 million, contributing to asset growth.
  • 5Cognizant launched "Project Leap" to accelerate transformation, expecting $230-$320 million in costs in 2026 for workforce and operational adjustments.
  • 6Stock repurchases totaled $427 million in Q1 2026, demonstrating a commitment to returning capital to shareholders.
  • 7Voluntary attrition for Tech Services was 12.3% for the trailing twelve months ending March 31, 2026, a slight increase from 12.0% in the prior year period.

Frequently Asked Questions

Cognizant shows a generally stable financial position. Revenue is growing year-over-year, driven by key service areas and strategic acquisitions. While net income is flat, diluted EPS has increased, suggesting improved profitability per share. The company has significant cash and cash equivalents ($1.5 billion) and available credit capacity, indicating good liquidity to fund operations and strategic initiatives like Project Leap.

Revenue growth is primarily attributed to the ramp-up of recently secured large deals, increasing demand for AI and analytics services, and intuitive operations and automation solutions. The acquisition of 3Cloud also contributed to revenue growth. The sale of third-party products as part of their integrated offerings strategy also played a role, though it had mixed impacts across different segments.

'Project Leap' is a strategic program initiated by Cognizant to transform its operating model by investing in integrated offerings, AI capabilities, and partnerships, while reshaping productivity and upskilling its workforce. It is expected to incur between $230 million and $320 million in costs during 2026, primarily for employee severance and personnel-related expenses. The company anticipates these costs will be offset by $200 million to $300 million in in-year savings in 2026, leading to a more agile and cost-effective operating model.

Cognizant is involved in several ongoing legal proceedings. A notable one is the Syntel case, which resulted in a jury verdict against Cognizant, though the final award amount has been revised and is still subject to further proceedings and appeals. The company is also addressing tax disputes with Indian authorities regarding past share repurchase transactions, which have led to significant deposits being made. While the company believes it has strong defenses, these matters represent potential financial risks.