Cognizant Reports Q3 Revenue of $5.7 Billion, Trims Full-Year Guidance

IT major Cognizant Technology Solutions has reported a revenue of $5.7 billion for the quarter ended September 2026. This represents a 4.8 per cent year-on-year increase in constant currency terms, keeping the performance in line with the company's guidance estimates for the quarter.

Despite outperforming peers in constant currency revenue growth during the quarter, Cognizant trimmed its full-year growth guidance for 2026. The company narrowed the expected range from the 4-5.5 per cent guided earlier to 4-4.4 per cent. For the fourth quarter ending December 2026, the company projected revenue growth of 3.2-4.7 per cent in constant currency terms.

Net profit for the quarter stood at $627 million, showing a significant increase from $274 million reported in the same period a year ago. The prior year's profit was impacted by a one-time non-cash income tax expense of $390 million. Operating margins declined by 60 basis points to stand at 15.4 per cent.

In comparative revenue growth on a constant currency basis, Cognizant outperformed several industry peers. During the same period, Infosys posted growth of 1.2 per cent, Wipro recorded 0.6 per cent, HCL Tech grew by 2.6 per cent, and TCS registered 2.8 per cent.

The company also revised the expected costs for its Project Leap workforce restructuring programme. The anticipated expenses were lowered from an earlier estimate of $230 million to $320 million, down to a revised range of $180 million to $250 million.

Commenting on the results, Ravi Kumar S, Chief Executive Officer, stated that the company delivered third-quarter revenue above the midpoint of its guidance range, driven by double-digit growth in Financial Services and the seventh consecutive quarter of year-over-year adjusted operating margin expansion.

Sector-wise, financial services recorded a constant currency growth of 12.3 per cent, while the communications, media, and technology segment grew by 10.7 per cent. Conversely, products and resources and healthcare reported a decline of 0.8 per cent and 0.9 per cent, respectively. Regionally, North America grew by 5.8 per cent, Europe increased by 2.2 per cent, and the rest of the world grew by 1.4 per cent.

Cognizant reported a total headcount of 359,900 as of September 30, 2026. This reflects a net addition of 10,100 employees year-on-year and 3,200 on a sequential basis. Voluntary attrition for tech services on a trailing 12-month basis remained flat at 12.6 per cent. The year-on-year headcount addition of 10,100 surpassed Tier 1 rivals, where Infosys added 551, Wipro added 836, TCS added 4,742, and HCL Tech added 3,699 employees.

On a trailing twelve-month basis, bookings increased by 4 per cent year-over-year to reach $28.7 billion, representing a book-to-bill ratio of approximately 1.3x. Bookings for the quarter included three large deals valued at over $100 million each.

"Cognizant's latest quarterly performance highlights a strong demand recovery in specific verticals like Financial Services, allowing the firm to outpace several key industry peers in constant currency growth. However, trimming the full-year revenue guidance despite beating quarterly estimates indicates cautious macroeconomic planning. For IT enterprises, balancing workforce optimization through programs like Project Leap alongside healthy net headcount additions remains crucial as companies navigate uneven sector-wise demand across geographies." — Dr. Shishir Gupta, Founder & CEO, StartupLanes