Nasdaq-listed Cognizant Technology Solutions saw its share price surge nearly 9% after the company’s board approved an additional outlay for its share buyback programme. In a statement, the Teaneck-headquartered firm said its board had authorised an additional $1 billion towards its 2026 share repurchase target. The total allocation now stands at $2 billion, an increase of $1 billion over its earlier guidance. Ravi Kumar S., CEO, said the increased allocation reflects the company’s conviction in the long-term opportunities that artificial intelligence will create for the business. 

“We believe a fundamental shift in the IT services is underway, one that strengthens Cognizant's position for future growth. We believe our current share price significantly undervalues those prospects. I am confident that our early investments will position us to emerge as a leader in AI-led enterprise transformation in the years ahead," he added.  

Further, the company said that with the increase, it now has approximately $3.45 billion remaining under its share repurchase authorisation. “In connection with this plan and given the anticipated closing of our previously announced acquisition of Astreya, the company will draw $1 billion from its existing revolving credit facility,” the statement said.  

Cognizant generated $2.5 billion in free cash flow in the last fiscal

This increase comes at a time when the company’s stock has declined 36.7% year-to-date. During the company’s Q1FY26 earnings call in April, Jatin Dalal, Chief Financial Officer, said Cognizant generated $2.5 billion in free cash flow in the last fiscal and returned nearly $2 billion to shareholders. He added that around $500 million–$700 million was invested in 3Cloud. Under its earlier capital allocation plan for 2026, the company had committed to returning $1.6 billion to shareholders, including $1 billion through share buybacks and around $600 million in dividends.  

Cost-saving exercise

Alongside this, Cognizant has initiated a cost-saving exercise this year called Project Leap, aimed at building a future-ready workforce in which AI plays a pivotal role in the company’s operating model. The company expects the initiative to begin generating savings of around $200 million–$300 million in 2026, with the full-year benefit expected to accrue in 2027. 

“We anticipate approximately two-thirds of the savings generated by Project Leap will be directly reinvested to support future growth across integrated offerings, AI capabilities and partnerships, and roughly one-third toward upskilling our workforce, all while maintaining an active and strategic M&A posture,” said Dalal, in an earlier analyst call. 

Cognizant has also raised its 2026 adjusted operating margin guidance range to 16%-16.2%, a rise of 20 to 40 basis points year-on-year expansion. “This is on the top of 50 basis points of margin expansion we delivered in 2025 and in line with our long-term aspiration to expand margins,” Dalal added.