CTSH · Cognizant Technology Solutions Corporation

Cognizant's first quarter 2026 results demonstrated solid execution in a complex macroeconomic environment. Revenue of $5.4 billion grew 5.8% year-over-year (3.9% in constant currency), landing in the upper half of the company's guidance range. The growth was led by the Financial Services segment, which posted 12.4% reported growth (10.2% constant currency), reflecting strong demand from banking and insurance clients. The Communications, Media & Technology segment also rebounded with 8.1% growth (6.5% constant currency), while Health Sciences was essentially flat (0.5% reported, -0.9% constant currency) due to the sale of third-party products. Geographically, North America grew 5.1% (4.9% constant currency), Europe grew 3.5% (1.5% constant currency), and Rest of World grew 9.4% (0.6% constant currency).

On profitability, GAAP operating margin declined 110 basis points to 15.6%, primarily due to higher costs from acquisitions and investments. However, adjusted operating margin improved 10 basis points to 15.6%, reflecting operational discipline. GAAP diluted EPS of $1.39 increased 3.7% year-over-year, while adjusted diluted EPS of $1.40 surged 13.8%, benefiting from share repurchases and margin expansion. The company generated $274 million in operating cash flow and $198 million in free cash flow.

Bookings momentum remained strong, with trailing twelve-month bookings of $29.6 billion, up 11% year-over-year, representing a book-to-bill of 1.4x. First quarter bookings grew 21% year-over-year, driven by seven large deals (total contract value ≥$100 million), including one mega deal (≥$500 million). Large deal total contract value grew over 70% year-over-year.

Management commentary highlighted the company's AI builder strategy and its role in bridging the 'AI Velocity Gap' for clients. CEO Ravi Kumar S noted that over 5,000 AI engagements are underway and nearly 40% of code is AI-assisted. The company also announced Project Leap, a restructuring program expected to generate $200-$300 million in in-year savings, with $230-$320 million in associated costs (primarily severance). This program enabled the company to raise its full-year 2026 adjusted operating margin guidance to 16.0%-16.2% (20-40 bps expansion), up from prior guidance of 10-30 bps expansion. Full-year revenue guidance was maintained at 4.0%-6.5% constant currency growth, and adjusted EPS guidance was set at $5.63-$5.77 (7%-9% growth). Second quarter revenue is expected between $5.45 billion and $5.52 billion, representing 3.2%-4.7% constant currency growth.

Overall, the quarter reflected a balance of growth and margin discipline, with strong bookings and a raised margin outlook signaling confidence in the company's strategic initiatives.