Cognizant sees Q2 revenue rise 4.5%, raises FY26 EPS outlook

Cognizant reported a 4.5% year-on-year increase in second-quarter revenue to $5.48 billion while raising its full-year adjusted earnings per share (EPS) guidance after posting growth led by its financial services businessThe Teaneck, New Jersey-headquartered IT services company’s operating margin expanded 30 basis points year-on-year to 15.9%, while adjusted operating margin rose 40 basis points to 16%.Financial Services, Cognizant’s largest business segment, posted 12% year-on-year revenue growth to $1.73 billion. Health Sciences grew 1.4% to $1.57 billion, Products and Resources rose 1.2% to $1.32 billion, while Communications, Media and Technology increased 1.5% to $854 million.Stating that “40% of software development in the company is AI assisted”, Chief Executive Officer Ravi Kumar S on the earnings call said AI represents a significantly larger long-term opportunity for technology services firms, estimating that the $1 trillion systems integration market could expand into a $5-6 trillion enterprise operations market with $4.5 trillion of operational labour exposed to AI.Elaborating on its partnerships, the CEO, during the earnings call, said Cognizant has established a dedicated Gemini Enterprise practice with Google Cloud, joined OpenAI’s developer consortium and expanded its partnership with Anthropic. The company also highlighted AI deployments with clients including Cisco, a large North American bank, Travelport and A+E Global Media.For the third quarter, Cognizant expects revenue of $5.60-$5.68 billion, representing year-on-year growth of 3.4%-4.9%, or 3.8%-5.3% in constant currency.The company revised its full-year 2026 constant currency revenue growth guidance to 4%-5.5% and raised its adjusted EPS guidance to $5.70-$5.82, while maintaining adjusted operating margin guidance at 16%-16.2%.Mr. Kumar said enterprises were still struggling to translate AI investments into measurable business outcomes. “Global 2000 companies have not yet realised measurable AI productivity gains. One in four have paused AI deployments, and billions of dollars in potential value remain unrealised,” he said, adding that the gap represented a significant long-term opportunity for IT services providers.Mr. Kumar said Cognizant believes the competitive advantage in enterprise AI will increasingly lie beyond foundation models. “As models proliferate and inference costs decline, models stop being the differentiator, and value shifts to the applied layer, which is context, governance and business processes,” he saidTo capitalise on that shift, the company launched its Cognizant AI Delivery Operating System, which Kumar described as “a continuously learning system that combines human expertise, organisational knowledge, client context and AI intelligence.”He also reiterated that the company is reshaping its business model around AI, saying Cognizant is moving from being “an AI builder rather than a traditional systems integrator” while “shifting our economics from labor to outcomes” and “moving from delivering projects to underwriting results.”The company completed the acquisition of infrastructure services provider Astreya during the quarter and repurchased $1.1 billion worth of shares. It ended the quarter with 3,56,700 employees, while voluntary attrition over the last 12 months stood at 13%. Published - July 29, 2026 09:31 pm IST