01—Abstract
Summary
Summary of the 10-Q filed October 29, 2026. Cited figures are marked; the original filing is the authoritative source.
Cognizant Technology Solutions Corporation (CTSH) reported its financial results for the nine months ended September 30, 2026.
The company demonstrated revenue growth, driven by strong performance in its Financial Services and Communications, Media, and Technology (CMT) segments, with notable contributions from recent acquisitions and the sale of third-party products. However, the company also incurred significant restructuring charges related to its "Project Leap" initiative, aimed at streamlining operations and enhancing productivity through AI. This initiative, while expected to yield savings, impacted profitability in the short term.
Despite these investments and restructuring costs, adjusted operating margins showed improvement, indicating effective cost management and operational efficiencies. The company's financial position remains solid, supported by operating cash flows and access to credit facilities. Looking ahead, Cognizant continues to focus on its AI transformation, anticipating ongoing client demand for technology-driven solutions and cost savings.
02—Key points
Key Highlights
- Revenue increased by 5.0% to $16,558 million for the nine months ended September 30, 2026, compared to the prior year period, with constant currency growth of 4.3%.
- Restructuring charges of $135 million were incurred in the first nine months of 2026 related to "Project Leap," a strategic initiative to enhance productivity and streamline operations.
- Adjusted Operating Margin improved to 16.0% for the nine months ended September 30, 2026, from 15.7% in the prior year period, reflecting operational efficiencies and cost management.
- The company completed two acquisitions in 2026: 3Cloud and Astreya Partners, Inc., which contributed to revenue growth and expanded AI capabilities.
- Cash flow from operating activities was $1,836 million for the nine months ended September 30, 2026, reflecting strong operational performance.
- Cognizant repurchased $1,838 million of its Class A common stock during the first nine months of 2026, demonstrating a commitment to returning capital to shareholders.
- The company is actively investing in AI capabilities and expects these technologies to reshape its client offerings and internal operations.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed October 29, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $5.66B$5.42B | +4.6% |
| SG&A Expenses | $841.00M$833.00M | +1.0% |
| Operating Income | $872.00M$866.00M | +0.7% |
| Net Income | $627.00M$274.00M | +128.8% |
| EPS (Basic) | $1.39$0.56 | +148.2% |
| EPS (Diluted) | $1.39$0.56 | +148.2% |
| Shares Outstanding (Basic) | 450.00M486.00M | −7.4% |
| Shares Outstanding (Diluted) | 450.00M487.00M | −7.6% |
05—Questions
Frequently Asked Questions
What is the primary driver of revenue growth for Cognizant in the nine months ended September 30, 2026?
Revenue growth was primarily driven by strong performance in the Financial Services and Communications, Media, and Technology (CMT) segments. The company also benefited from recent acquisitions and the sale of third-party products as part of its integrated offerings strategy.
What is "Project Leap" and what is its financial impact?
Project Leap is a strategic initiative launched in Q2 2026 to accelerate transformation by investing in integrated offerings, AI capabilities, and partnerships, and by reshaping productivity. In the first nine months of 2026, Cognizant incurred $135 million in restructuring charges related to Project Leap, consisting of employee severance and other costs. The company expects this program to generate significant in-year savings.
How did foreign currency exchange rates affect Cognizant's financial results?
Foreign currency exchange movements had a positive impact on revenue growth, particularly with the depreciation of the Indian Rupee against the U.S. Dollar, which favorably impacted operating margins. The company uses foreign exchange forward contracts to hedge against currency rate risks.
What is Cognizant's capital allocation strategy as indicated by this filing?
Cognizant's capital allocation strategy includes ongoing stock repurchases, dividend payments, and strategic acquisitions. In the first nine months of 2026, the company repurchased $1,838 million of its Class A common stock and continues to review its capital allocation based on financial performance, strategic investments, and market conditions.
06—Continue