#United States #Teaneck #financial results #revenue growth #Cognizant Technology

Cognizant Reports Third Quarter 2025 Results

Cognizant Technology Solutions Corporation, a global leader in professional services, has unveiled its financial performance for the third quarter of 2025. The company reported a revenue of $5.42 billion, indicating a significant year-over-year increase of 7.4% or 6.5% when adjusted for constant currency. This positive growth trajectory surpassed the upper end of Cognizant's forecast and represented a 3.2% sequential increase, or 2.8% in constant currency. This achievement has been largely attributed to the robust performance seen in North America and organic growth across all business sectors.

The company’s operating margin reached 16.0%, showing a 140 basis point year-over-year increase, while the adjusted operating margin was reported at the same percentage, marking a 70 basis point improvement compared to the previous year. However, the GAAP earnings per share (EPS) fell to $0.56, a decline from $1.17 from the prior year, primarily due to the impact of a one-time non-cash income tax expense that reduced the earnings.

On a brighter note, adjusted EPS climbed by 11% year-over-year to reach $1.39. Notably, the trailing twelve-month bookings increased to $27.5 billion, reflecting a year-over-year rise of 5%. This underscores Cognizant's ability to secure significant contracts and maintain a strong pipeline for future growth.

Cognizant has also demonstrated a commitment to returning value to its shareholders, having returned $1.5 billion through share buybacks and dividends in the year-to-date. The company is on track to return a total of $2.0 billion by the end of 2025, highlighting investor confidence.

The financial outlook for Cognizant remains optimistic, with the company raising its revenue growth guidance for the year to a range of 6.0% to 6.3% in constant currency, slightly above the previous forecast. Furthermore, it anticipates the adjusted operating margin to expand to approximately 15.7%, representing a 40 basis point increase from the prior year.

Growth Drivers and Market Outlook

Ravi Kumar S, CEO of Cognizant, expressed pride in the company's sustained organic revenue growth and highlighted that this marks the fifth consecutive quarter of year-over-year growth. The company’s momentum appears to be attributed to their effective strategies and innovative capabilities at the crucial intersection of technology and various industries.

The CEO also emphasized their commitment to AI initiatives, stating that their three vector AI builder strategy is gaining traction. The investment in AI platforms and solutions is anticipated to play a vital role in driving growth moving forward. Cognizant signed six major deals in this quarter, contributing to a cumulative total of 16 large contracts year-to-date, characterizing a 40% growth in total contract value (TCV) from the previous year.

Financial performance and revenue growth were supported by the recent acquisitions, which added approximately 250 basis points to revenue growth year-over-year. Notably, the acquisitions contributed significantly to revenue growth in the products and resources segments.

Cognizant's focus on employee retention is reflected in its voluntary attrition rate, which decreased to 14.5%, displaying a modest improvement from the previous year, alongside an increase in total headcount to 349,800 employees as of September 30, 2025.

In terms of capital returns, the company has repurchased 6.3 million shares for $450 million within the third quarter, with the total buyback reaching 13.1 million shares for $994 million year-to-date. This underscores Cognizant’s dedication to enhancing shareholder value.

Future Guidance

For the fourth quarter, Cognizant projects revenues to range between $5.27 billion and $5.33 billion, reflecting a year-over-year growth of 3.8% to 4.8%, or 2.5% to 3.5% when adjusted for constant currency. The full-year 2025 revenue is expected to be around $21.05 billion to $21.10 billion with projected growth of 6.6% to 6.9%.

In conclusion, Cognizant’s robust performance in Q3 2025 and the strategic foresight illustrated by its leadership indicate a strong position in the market, poised for further growth, driven by innovative technological capabilities and strong operational execution.