Cognizant Technology Solutions Corp - Class A
Q2 2026 Earnings
Market Reaction
Did CTSH Beat Earnings? Q2 2026 Results
Cognizant Technology Solutions posted a largely in-line second quarter for fiscal 2026, with revenue of $5.48 billion matching consensus estimates precisely and growing 4.5% year-over-year, though adjusted diluted EPS of $1.37 fell just short of the $1.38 consensus by 0.66%, snapping a four-consecutive-quarter streak of EPS beats. The headline driver of the quarter was a second straight period of double-digit growth in Financial Services, the company's largest segment, which expanded 12.0% year-over-year to $1.73 billion, providing the engine behind the broader revenue advance even as other segments grew more modestly. The quarter also featured $84.00 million in restructuring charges under Project Leap, nearly offset by an $81.00 million benefit from the reversal of an India Defined Contribution Obligation, leaving adjusted EPS growth at 4.6% year-over-year. Cognizant also completed its $634.00 million acquisition of Astreya, an AI-focused IT managed services firm, while repurchasing $1.15 billion in shares during the quarter alone. Looking ahead, management raised full-year adjusted EPS guidance to $5.70-$5.82, representing 8%-10% growth, with full-year revenue guided to $22.04-$22.35 billion.
- Double-digit year-over-year revenue growth in Financial Services for second consecutive quarter
- Adjusted operating margin expansion of 40 basis points year-over-year
- Sale of third-party products contributed approximately 170 basis points to overall revenue growth
- Acquisitions of 3Cloud and Astreya contributed approximately 100 basis points to YoY growth
- Trailing twelve-month bookings increased 5% year-over-year to $29.1 billion with 1.3x book-to-bill
“Our organic revenue growth momentum continued in the second quarter and was at the high end of our expectations. We are helping our clients close the AI velocity gap by pairing deep industry expertise with engineering, infrastructure and data modernization capabilities while safeguarding their data and IP. We are doing this by scaling our Frontier workforce and reskilling for the future.”
Cognizant CEO, on the earnings call
Forward Guidance & Outlook
For Q3 2026, Cognizant expects revenue of $5.60-$5.68 billion, representing 3.4%-4.9% year-over-year growth (3.8%-5.3% in constant currency), including approximately 200 basis points of inorganic contribution. For full-year 2026, revenue guidance is $22.04-$22.35 billion (4.4%-5.9% YoY growth, or 4.0%-5.5% constant currency), including approximately 150 basis points of inorganic contribution. Adjusted Operating Margin guidance is unchanged at 16.0%-16.2% (20-40 basis points YoY expansion). Adjusted Diluted EPS guidance was raised to $5.70-$5.82 (8%-10% YoY growth). The company expects an adjusted effective tax rate of 25%-26% and a diluted share count of approximately 460 million. Project Leap charges are expected at $230-$320 million for the full year.
CTSH YoY Financials
CTSH Revenue by Segment
CTSH Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.