Cognizant Technology Solutions Corp. (NASDAQ:CTSH) reported mixed second-quarter results on Wednesday, with revenue narrowly exceeding Wall Street expectations while earnings came in slightly below forecasts, sending shares more than 2% lower in pre-market trading.
The IT services company posted adjusted earnings of $1.37 per share, missing analysts’ consensus estimate of $1.38.
Revenue increased 4.5% year over year to $5.5 billion, edging past the consensus forecast of $5.49 billion. On a constant currency basis, revenue grew 4.1%.
Financial Services Drives Revenue Growth
Cognizant’s largest business segment, Financial Services, continued to deliver strong performance during the quarter.
Revenue from the division increased 12% from the prior year, marking a second consecutive quarter of double-digit growth and accounting for 31.6% of the company’s total revenue.
The company also improved profitability, with adjusted operating margin expanding by 40 basis points year over year to 16.0%.
Chief Executive Officer Ravi Kumar S. said: “Our organic revenue growth momentum continued in the second quarter and was at the high end of our expectations. We are helping our clients close the AI velocity gap by pairing deep industry expertise with engineering, infrastructure and data modernization capabilities.”
Company Raises Full-Year Guidance
Looking ahead, Cognizant expects third-quarter revenue to range between $5.60 billion and $5.68 billion, representing year-over-year growth of approximately 3.4% to 4.9%.
The company also increased its full-year 2026 outlook.
Cognizant now expects constant currency revenue growth of between 4.0% and 5.5%, with full-year revenue projected to range from $22.04 billion to $22.35 billion.
The company also raised its adjusted earnings per share guidance to between $5.70 and $5.82 for the year. The midpoint of $5.76 is slightly above analysts’ consensus estimate of $5.71.
Share Buybacks and Acquisition Support Growth Strategy
Chief Financial Officer Jatin Dalal said Cognizant returned significant capital to shareholders during the quarter by repurchasing approximately $1.1 billion of its own shares.
The company also completed its $634 million acquisition of Astreya, further expanding its technology services capabilities.
Trailing 12-month bookings increased 5% year over year to $29.1 billion, reflecting continued demand for Cognizant’s digital transformation and artificial intelligence services.
Cognizant Technology Solutions stock price
