Cognizant Exceeds Expectations with Robust Q3 2025 Results

Cognizant's Impressive Third Quarter 2025 Performance

Cognizant Technology Solutions Corporation (NASDAQ: CTSH), a leading global professional services company, recently announced outstanding financial results for the third quarter of 2025. The company reported a revenue of $5.42 billion, marking a significant 7.4% increase from the previous year. In constant currency terms, this growth rate stands at an impressive 6.5%. Notably, Cognizant surpassed the upper threshold of its projected guidance, indicating strong operational momentum driven primarily by its North American segment.

Financial Highlights

Quarterly performance metrics painted a robust picture for Cognizant. The operating margin was recorded at 16.0%, reflecting a year-over-year improvement of 140 basis points. The adjusted operating margin also improved by 70 basis points to the same figure. However, the GAAP earnings per share (EPS) decreased to $0.56 due to a significant one-time non-cash income tax expense, impacting net income. Adjusted EPS, with the exclusion of this charge, rose by 11% to reach $1.39.

Key Growth Drivers

Cognizant's success in securing new bookings was noteworthy, achieving a total of $27.5 billion over the trailing 12 months—an increase of 5% from the prior year. The company is on track with a year-to-date shareholder return of $1.5 billion through share repurchases and dividends, with an anticipated total return of $2.0 billion for the year. Cognizant has enhanced its guidance, now projecting revenue growth of 6.0% to 6.3% for the full year in constant currency.

Strategic Initiatives and Future Outlook

Ravi Kumar S, CEO of Cognizant, expressed confidence in the company's strategic initiatives, particularly its focus on artificial intelligence (AI) technologies. The company has signed six large deals in the quarter, contributing to a robust sales pipeline and showcasing its commitment to technological innovation. The investments in AI-led platforms are expected to drive future growth and operational efficiency.

Shareholder Returns

In line with its commitment to returning value to shareholders, Cognizant repurchased approximately 6.3 million shares for $450 million during the quarter. This reinforces the confidence that the management has in the company's growth trajectory.

Employee Metrics

The company also reported a reduction in voluntary attrition in its tech services segment, down to 14.5%, signaling improved retention efforts amid an evolving job market. As of September 30, 2025, Cognizant's total headcount reached 349,800, an increase showcasing the growth and expansion of its operations.

Fourth Quarter Guidance

Looking ahead, Cognizant anticipates fourth-quarter revenue to be in the range of $5.27 billion to $5.33 billion, translating to growth of 3.8% to 4.8% compared to the previous year. For the full year 2025, revenue is expected to range from approximately $21.05 billion to $21.10 billion, reflecting a growth outlook of 6.6% to 6.9%.

Conclusion

The impressive results Cognizant has delivered in the third quarter of 2025 not only reflect its operational excellence but also its strategic foresight to invest in AI and technology-driven solutions. The company remains committed to providing sustainable growth, enhancing shareholder value, and expanding its global footprint.

Frequently Asked Questions

What were Cognizant's revenue figures for Q3 2025?

Cognizant reported a revenue of $5.42 billion for Q3 2025, which is a 7.4% increase from the previous year.

How did Cognizant perform in terms of profit margins?

The company achieved an operating margin of 16.0%, which is a 140 basis points increase year-over-year.

What factors contributed to Cognizant's strong performance?

Key drivers for growth included strong organic revenue growth in North America, increased large deal bookings, and strategic investments in AI technologies.

What is Cognizant's guidance for the future?

Cognizant has raised its revenue growth guidance for the full year of 2025 to between 6.0% and 6.3% in constant currency.

How much capital has Cognizant returned to shareholders?

The company has returned $1.5 billion to shareholders through share repurchases and dividends thus far in the year.

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