Cognizant raises full-year revenue, profit forecast after strong Q2; shares jump 11%

Cognizant Technology Solutions raised its full-year revenue and profit guidance after reporting better-than-expected second-quarter results, driven by strong growth in its Financial Services business and continued demand for artificial intelligence (AI)-led transformation services.

The Nasdaq-listed IT services company now expects full-year 2026 constant currency revenue growth of 4.0% to 5.5%, while increasing its adjusted diluted earnings per share (EPS) guidance to $5.70-$5.82, representing year-on-year growth of 8% to 10%. The company maintained its adjusted operating margin guidance at 16.0% to 16.2%.

Revenue grows 4.5%

For the quarter ended June 30, Cognizant reported revenue of $5.48 billion, up 4.5% year-on-year, or 4.1% in constant currency. GAAP operating margin improved 30 basis points to 15.9%, while adjusted operating margin expanded 40 basis points to 16.0%.

GAAP diluted EPS rose 3.8% to $1.36, while adjusted EPS increased 4.6% to $1.37. Trailing 12-month bookings rose 5% year-on-year to $29.1 billion, translating into a book-to-bill ratio of about 1.3x.

"Our organic revenue growth momentum continued in the second quarter and was at the high end of our expectations," chief executive officer Ravi Kumar S said.

"We are confident our strategy is resonating with clients, as reflected in a second consecutive quarter of double-digit year-over-year growth in Financial Services, our largest and most mature segment," he added.

AI strategy, capital deployment

Chief financial officer Jatin Dalal said the company delivered growth despite a challenging operating environment while continuing to invest in strategic initiatives.

"Our second quarter results reflect disciplined execution and the resilience of our operating model," Dalal said, adding that Cognizant deployed $1.6 billion on share repurchases and $1.3 billion on acquisitions during the first half of 2026 to strengthen its AI-focused strategy.

Financial Services, Cognizant's largest business segment, recorded 12% year-on-year revenue growth, marking its second consecutive quarter of double-digit expansion, while the company also completed the acquisition of AI-first IT managed services provider Astreya during the quarter.

Cognizant shares surged more than 11% in intraday trading on the Nasdaq following the results. The stock touched an intraday high of $56.21 before trading at $55.86, up 11.03%, at the time of writing, as investors cheered the company's improved full-year outlook.