Cognizant (CTSH) Q3 2026 Earnings Report
MX:CTSH Q3 2026 EPS Results
- Actual EPS
- MXN 28.00
- Consensus EPS
- MXN 27.51
- Beat/Miss
- Beat by +MXN 0.49
- One Year Ago EPS
- MXN 26.12
MX:CTSH Q3 2026 Revenue Results
- Actual Revenue
- MXN 106.44B
- Expected Revenue
- MXN 106.07B
- Beat/Miss
- Beat by +MXN 366.31M
- YoY Revenue Growth
- +4.60%
Earnings Announcement Details
- Quarter
- Q3 2026
- Date
- 10/29/2026
- Time
- Before Open
- Conference Call
- Thursday, October 29, 2026
Cognizant's next earnings date is estimated for February 10, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
The call was broadly positive. Cognizant delivered solid revenue growth, its highest adjusted operating margin in four years, strong Financial Services momentum, improved bookings mix, rising AI adoption and robust cash generation. Management also highlighted significant investments in AI talent, platforms, partnerships and growth priorities. These strengths were partly offset by reduced full-year guidance, softer fourth-quarter expectations, discretionary spending pressure in health care and consumer-facing sectors, industry-specific challenges, and higher furlough and restructuring impacts.
For the fourth quarter, Cognizant expects revenue to grow 3.2% to 4.7% year-over-year in constant currency, including approximately 200 basis points from recently completed acquisitions; full year guidance is 4% to 4.4% growth in constant currency, with approximately 150 basis points of inorganic growth, and is expected to represent top-tier revenue growth this calendar year. Project Leap total cost is expected to be $180 million to $250 million, with in-year savings of around $200 million in 2026 and the program expected to run through the first quarter of 2027. Adjusted operating margin guidance is approximately 16.1%, representing 30 basis points of year-over-year expansion; free cash flow conversion is expected to be 90% to 100% of net income; the full year tax rate is around 25%, with the fourth quarter rate modestly above the full year rate; weighted average diluted share count is approximately 460 million; and full year EPS guidance is $5.72 to $5.79, representing 8% to 10% growth.
- Q3 Revenue Growth and Margin ExpansionThird-quarter revenue grew 4.8% year-over-year in constant currency to $5.7 billion. Adjusted operating margin was 16.3%, up 30 basis points year-over-year and at its highest level in 4 years, marking the seventh consecutive quarter of year-over-year margin expansion.
- Financial Services and Technology-Led Segment MomentumFinancial Services accelerated to 12% year-over-year constant-currency growth, its third consecutive quarter of double-digit growth. Communications, Media & Technology also grew double digits, driven by inorganic contributions from Astreya and strong spending from technology clients.
- Bookings and Large-Deal ProgressTrailing 12-month bookings increased 4% and book-to-bill was 1.3x. New and expansion bookings represented 60% of the mix, up more than 10 percentage points year-over-year, while new and expansion bookings were up 16% year-to-date. Cognizant signed three deals with total contract value of more than $100 million each, and trailing 12-month large-deal TCV increased 9% year-over-year.
- AI-Enabled Productivity and Delivery AdoptionRevenue per associate, excluding Gen C trainees, increased more than 3%, while adjusted operating income per associate increased more than 5%. By the end of the third quarter, more than 50% of software development was estimated to be AI-assisted, and Cognizant had more than 8,500 AI engagements.
- Expansion of AI Talent and Partner CapacityMore than 45,000 Cognizant associates had earned more than 95,000 certifications across frontier AI platforms, with another 65,000-plus certifications in progress. The expanded Google Cloud partnership includes a Gemini Frontier Capability Group with more than 18,000 dedicated associates, and more than 55,000 associates completed the Build with Gemini workshop.
- Broad Adoption of AI Learning and Governance PlatformsSkillspring, Cognizant's AI-native learning platform, is used by approximately 315,000 associates and is being made available to clients. Cognizant also launched Cognizant AI Nexus, a modular multimodal operating layer designed to govern AI quality, manage spend, coach in real time, compound repeatable patterns and connect AI consumption to business outcomes.
- Growth in Fixed-Price and Transaction-Based WorkFixed-price and transaction-based work represented nearly 58% of third-quarter revenue, up 140 basis points year-over-year and more than 500 basis points since the third quarter of 2022.
- AI-Tailwind Services Growing FasterBPO, infrastructure, cybersecurity and industry solutions represented approximately 40% of the business and were growing at roughly 2 to 3 times the rate of total organic services revenue.
- Demonstrated AI and Modernization Client OutcomesAt Odyssey Logistics, autonomous AI engineering rebuilt a transportation management platform with 37% net savings compared with the conventional approach. At Talcott, governed AI embedded across the delivery cycle helped drive 30% productivity gains in modernizing insurance operations.
- Strategic Growth Priorities and Market ExpansionCognizant identified modernization, agentifying core business operations, secure AI, and data center and workplace services as four strategic growth priorities representing a multibillion-dollar opportunity. The company also announced Cognizant Activate for emerging high-growth mid-market companies and is building capabilities in physical AI.
- Targeted M&A and Partnership ExpansionCognizant announced its intent to acquire Australia-based DyFlex Solutions, an SAP platinum partner, to deepen SAP expertise and support clients in Australia and New Zealand. The company also cited expanded work with Google, CrowdStrike, OpenAI's Daybreak Cyber Partner Program and other frontier AI partners.
- EPS and Cash Flow PerformanceThird-quarter adjusted EPS was $1.49, up 7% year-over-year, driven by revenue growth, margin expansion and a lower share count. Third-quarter free cash flow was $925 million, bringing year-to-date free cash flow to $1.6 billion.
- Strong Shareholder Returns and Capital PositionCognizant repurchased $250 million of shares during the third quarter, buying back 4.9 million shares at an average price of approximately $53 per share. Year-to-date deployment to shareholders through repurchases and dividends was $2.3 billion, with the company on pace to deploy about $2.6 billion for the full year. Cash and short-term investments ended the quarter at $1.6 billion.
- Lower Project Leap Cost EstimateThe expected total cost of Project Leap was reduced to $180 million to $250 million from the previous estimate of $230 million to $320 million, driven by lower employee severance and other personnel-related costs. The company expects approximately $200 million of in-year savings in 2026.
- Stable Full-Year Cash Flow and Tax OutlookCognizant continues to expect full-year free cash flow conversion of 90% to 100% of net income. Full-year tax rate guidance was revised to around 25%, compared with the prior range of 25% to 26%, while weighted average diluted share count guidance remained approximately 460 million.
- Resilience Despite PERM SuspensionCognizant stated that the Department of Labor's suspension of new PERM applications for some companies is not expected to have a material impact on its talent strategy or operations. The company has approximately 32,000 employees in the U.S. and has invested significantly in its local talent base.
MX:CTSH Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Feb 10, 2027 | 2026 (Q4) | 28.28- | 25.37 | ― | ― |
| Oct 29, 2026 | 2026 (Q3) | 27.5128.00 | 26.12 | 7.19% (+1.88) | |
| Jul 29, 2026 | 2026 (Q2) | 25.8825.75 | 24.62 | 4.58% (+1.13) | |
| Apr 29, 2026 | 2026 (Q1) | 25.2026.31 | 23.11 | 13.82% (+3.19) | |
| Feb 04, 2026 | 2025 (Q4) | 24.8425.37 | 22.74 | 11.57% (+2.63) | |
| Oct 29, 2025 | 2025 (Q3) | 24.4926.12 | 23.49 | 11.20% (+2.63) | |
| Jul 30, 2025 | 2025 (Q2) | 23.6824.62 | 21.99 | 11.97% (+2.63) | |
| Apr 30, 2025 | 2025 (Q1) | 22.5523.11 | 21.05 | 9.82% (+2.07) | |
| Feb 05, 2025 | 2024 (Q4) | 21.1022.74 | 22.17 | 2.54% (+0.56) | |
| Oct 30, 2024 | 2024 (Q3) | 21.5723.49 | 21.8 | 7.76% (+1.69) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
