Key facts
- Cognizant Technology raised its annual adjusted profit forecast to $5.70-$5.82 per share.
- The company's financial services segment revenue grew 12% year-on-year.
- Second-quarter revenue was $5.48 billion, a 4.5% increase.
- Third-quarter revenue is projected to be between $5.60 billion and $5.68 billion.
- Cognizant acquired AI infrastructure firm Astreya for $634 million.
Cognizant Technology Solutions has raised its full-year revenue and profit guidance following better-than-expected second-quarter results. The company's performance was bolstered by strong growth in its Financial Services business and sustained demand for AI-led transformation services.
For the second quarter ended June 30, Cognizant reported revenue of $5.48 billion, marking a 4.5% year-on-year increase. Its GAAP operating margin improved to 15.9%, with adjusted operating margin expanding to 16.0%. Adjusted earnings per share (EPS) rose 4.6% to $1.37.
The company now forecasts full-year 2026 constant currency revenue growth between 4.0% and 5.5%, and has increased its adjusted diluted EPS guidance to $5.70-$5.82. The adjusted operating margin guidance remains at 16.0% to 16.2%.
Cognizant's largest segment, Financial Services, saw a 12% year-on-year revenue increase, its second consecutive quarter of double-digit expansion. The company also completed the acquisition of AI infrastructure and data center services firm Astreya for approximately $634 million and launched an AI-focused program called Project Leap.
Despite the positive outlook, Cognizant projects third-quarter revenue to be between $5.60 billion and $5.68 billion, falling slightly below analysts' average estimate of $5.70 billion. This forecast comes amid continued caution from clients regarding discretionary IT spending and large investments, with a prioritization of data center infrastructure over software as AI adoption accelerates.