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Cognizant Technology Solutions: A Review of Q4 and Full Year 2025 Results

Cognizant Technology Solutions Corporation has recently reported its financial results for the fourth quarter and the year 2025, indicating a performance that exceeded expectations in terms of revenue, operating margins, and earnings per share (EPS). The company's fourth quarter generated revenues of $5.3 billion, reflecting a year-over-year increase of 4.9%. On an annual scale, its total revenue reached $21.1 billion, marking a robust increase of 7.0% compared to the previous year.

The operating margin for the total year was 16.1%, which is an improvement of 140 basis points from the previous year. Adjusted operating margins showed a similar upward trend at 15.8%, which is also an increase of 50 basis points year-over-year. Cognizant reported a GAAP EPS of $4.56, slightly up from the prior year's $4.51, while its adjusted EPS showed better growth of 11%, hitting $5.28.

Cognizant's CEO, Ravi Kumar S, expressed gratitude towards the company's workforce of over 350,000 employees, emphasizing the role of their AI strategy in driving this significant growth. The company has been investing heavily in talent and expanding its partnerships to advance its AI platforms, with a vision to scale AI throughout various enterprises. This focus led to signing 28 large deals in 2025, with notable growth of nearly 50% in total contract value (TCV) year-over-year.

In line with its strategy to return value to its shareholders, Cognizant has planned to distribute $1.6 billion through share repurchases and dividends in 2026, which includes $1 billion allocated for share repurchases. This commitment is evident as the cash dividend increased to $0.33 per share for the first quarter of 2026, showcasing a 6.5% increase.

Looking ahead, Cognizant anticipates constant currency revenue growth for 2026 to be between 4.0% to 6.5%, with adjusted operating margins expected to expand further by 10 to 30 basis points. The revenue guidance for Q1 2026 is projected to be between $5.36 billion and $5.44 billion, indicating continued momentum from 2025.

The company attributes its steady growth trajectory to a variety of strategic actions taken over the past three years, which have positioned them well in the competitive landscape. For instance, Cognizant's acquisition of Belcan contributed significantly to its revenue growth, enhancing its capability to serve clients more effectively.

Employee Metrics and Market Position

In addition to financial highlights, Cognizant reported a decrease in its voluntary attrition rate within tech services to 13.9%, reflecting improvements in employee retention efforts. The total headcount at the end of 2025 reached approximately 351,600, showing a consistent increase in personnel to meet growing business demands.

The trailing twelve-month bookings totaled $28.4 billion, up by 5% year-over-year, with a book-to-bill ratio of approximately 1.3. Notably, the fourth quarter alone accounted for a 9% increase in booking activity.

Future Developments

As Cognizant pushes forward, it remains focused on fostering innovation, exemplified by recent collaborations. For instance, its agreements with Bupa Hong Kong signify a pioneering effort in leveraging AI for business-process modernization and claims handling in the health insurance arena, showcasing how Cognizant integrates cutting-edge technology into core business processes.

With strong financials and a commitment to innovation, Cognizant Technology Solutions looks set to capitalize on its momentum as it embraces AI and enhances its operational capabilities. As the company expects healthy growth in the coming year, it continues to reinforce its position as a leader in the professional services sector, committed to delivering exceptional value to clients and shareholders alike.