How much of Cognizant's Q2 2025 revenue growth was organic versus acquired?

Of the 8.1% reported revenue growth, recently completed acquisitions, primarily Belcan, contributed about 400 basis points, so organic growth was roughly 4 points. Constant currency growth was 7.2%. Note that the company describes its fourth straight quarter of organic growth, but the reported figures do not break out the organic rate directly.

Why does the one-time tax charge matter if it's excluded from adjusted EPS?

Cognizant expects a roughly $400 million non-cash tax expense in Q3 2025 after the OBBBA repealed the requirement to capitalize U.S. R&E costs, which leads it to write off a deferred tax asset. This will reduce reported GAAP EPS by about $0.82 for the full year. Adjusted EPS guidance of $5.08-$5.22 excludes this charge, so investors should compare GAAP and adjusted results carefully.

What drove the strength in bookings this quarter?

Q2 bookings rose 18% YoY and included six large deals with TCV of $100M or more, two of which exceeded $1 billion each. Trailing-twelve-month bookings reached a record $27.8B, a book-to-bill of about 1.4x. Bookings are TCV-based and can be lumpy, so a few large contracts can significantly affect quarterly results.

Is Cognizant returning more capital to shareholders in 2025?

Yes. The company raised its planned 2025 capital return to about $2.0 billion from $1.7 billion. Year-to-date it has returned $885 million through share repurchases and dividends. In Q2 it repurchased 4.5 million shares for $354 million, and $2.7 billion remained under the authorization at quarter-end. It also declared a $0.31 quarterly dividend.

What is the outlook for the rest of 2025?

Full-year 2025 revenue is guided to $20.7-$21.1 billion, or 4.0%-6.0% constant currency growth after the narrowing. Adjusted operating margin is held at 15.5%-15.7%, implying 20-40 bps of expansion. Q3 revenue is guided to $5.27-$5.35 billion, or 3.5%-5.0% constant currency growth, which suggests slower growth in the second half than in the first half.

CTSH 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed July 30, 2025. Cited figures are marked; the original filing is the authoritative source.

Cognizant (CTSH) reported second quarter 2025 results that beat the high end of its revenue guidance, with revenue of $5.25 billion^a, up 8.1% year-over-year (7.2% in constant currency).

Roughly 400 basis points of that growth came from the recently completed Belcan acquisition, so organic growth was lower, though management cited a fourth consecutive quarter of organic year-over-year growth. GAAP operating margin rose to 15.6% from 14.6%, and adjusted operating margin of 15.6% was up 40 basis points. GAAP diluted EPS of $1.31^b rose 15%, and adjusted EPS of $1.31 rose 12%.

Trailing twelve-month bookings reached a record $27.8 billion^c (book-to-bill of about 1.4x), and Q2 bookings grew 18%, driven by two deals with TCV above $1 billion each. Management narrowed full-year 2025 constant currency revenue growth guidance to 4.0%-6.0% and reaffirmed the adjusted operating margin range of 15.5%-15.7%. Adjusted diluted EPS guidance is $5.08-$5.22.

Q3 revenue guidance is $5.27^d-$5.35 billion. The company also raised its planned 2025 capital return to about $2.0 billion from $1.7 billion. Year-to-date it has returned $885 million through buybacks and dividends, and $2.7 billion remains under the repurchase authorization.

Investors should note a significant forward-looking charge. Following the enactment of the One Big Beautiful Bill Act in July 2025, Cognizant expects a one-time, non-cash tax expense of about $400 million in Q3 2025, which it estimates at roughly $0.82 per diluted share for the full year.

This reflects a write-off of a deferred tax asset tied to capitalized U.S. R&E costs. It will weigh on reported GAAP EPS in Q3 even though it is excluded from the adjusted EPS guidance framework, which is a key point for reading the headline numbers.

02—Key points

Key Highlights

Q2 2025 revenue of $5.245B grew 8.1% YoY (7.2% constant currency), above the high end of guidance; acquisitions (mainly Belcan) contributed about 400 bps.
GAAP operating margin expanded 100 bps to 15.6%; adjusted operating margin of 15.6% rose 40 bps YoY.
GAAP diluted EPS of $1.31 rose 15% YoY; adjusted diluted EPS of $1.31 rose 12% YoY.
Record TTM bookings of $27.8B (+6% YoY, ~1.4x book-to-bill); Q2 bookings +18% YoY with two $1B+ mega deals.
FY2025 guidance: constant currency revenue growth narrowed to 4.0%-6.0%; adjusted operating margin unchanged at 15.5%-15.7%; adjusted EPS $5.08-$5.22.
Planned 2025 shareholder returns raised to ~$2.0B from $1.7B; $885M returned year-to-date and $2.7B left on the buyback authorization.
Expected ~$400M (~$0.82/share) one-time, non-cash tax expense in Q3 2025 from the OBBBA repeal of R&E capitalization, a material GAAP headwind.

03—Questions

Frequently Asked Questions

How much of Cognizant's Q2 2025 revenue growth was organic versus acquired?
Of the 8.1% reported revenue growth, recently completed acquisitions, primarily Belcan, contributed about 400 basis points, so organic growth was roughly 4 points. Constant currency growth was 7.2%. Note that the company describes its fourth straight quarter of organic growth, but the reported figures do not break out the organic rate directly.
Why does the one-time tax charge matter if it's excluded from adjusted EPS?
Cognizant expects a roughly $400 million non-cash tax expense in Q3 2025 after the OBBBA repealed the requirement to capitalize U.S. R&E costs, which leads it to write off a deferred tax asset. This will reduce reported GAAP EPS by about $0.82 for the full year. Adjusted EPS guidance of $5.08-$5.22 excludes this charge, so investors should compare GAAP and adjusted results carefully.
What drove the strength in bookings this quarter?
Q2 bookings rose 18% YoY and included six large deals with TCV of $100M or more, two of which exceeded $1 billion each. Trailing-twelve-month bookings reached a record $27.8B, a book-to-bill of about 1.4x. Bookings are TCV-based and can be lumpy, so a few large contracts can significantly affect quarterly results.
Is Cognizant returning more capital to shareholders in 2025?
Yes. The company raised its planned 2025 capital return to about $2.0 billion from $1.7 billion. Year-to-date it has returned $885 million through share repurchases and dividends. In Q2 it repurchased 4.5 million shares for $354 million, and $2.7 billion remained under the authorization at quarter-end. It also declared a $0.31 quarterly dividend.
What is the outlook for the rest of 2025?
Full-year 2025 revenue is guided to $20.7-$21.1 billion, or 4.0%-6.0% constant currency growth after the narrowing. Adjusted operating margin is held at 15.5%-15.7%, implying 20-40 bps of expansion. Q3 revenue is guided to $5.27-$5.35 billion, or 3.5%-5.0% constant currency growth, which suggests slower growth in the second half than in the first half.

04—Continue

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