Cognizant Reports Fourth Quarter and Full-Year Results
Cognizant, a leading professional services company, recently released its remarkable financial results for the fourth quarter and full year of 2025, exceeding both revenue guidance and operational expectations.
Key Highlights of 2025 Performance
The financial overview showcases numerous highlights that paint a picture of growth and stability:
- The fourth quarter revenue reached $5.3 billion, reflecting a year-over-year increase of 4.9%, or 3.8% when adjusted for constant currency.
- For the full year, total revenue climbed to $21.1 billion, representing a robust growth of 7.0% or 6.4% in constant currency.
- Cognizant achieved a full-year operating margin of 16.1%, up 140 basis points year-over-year, with an adjusted operating margin of 15.8%, reflecting an increase of 50 basis points over the same timeframe.
- GAAP EPS for the year was recorded at $4.56, a 1% increase year-over-year, while adjusted EPS surged by 11% to $5.28.
- Trailing 12-month bookings amounted to $28.4 billion, with sizeable contract growth seen especially in the fourth quarter, where 28 large deals were signed, 12 of which were in Q4 alone.
- Cognizant plans to return $1.6 billion to its shareholders in 2026 through share repurchases and dividends, including $1 billion targeted for share repurchases.
- A cash dividend of $0.33 per share marks a 6.5% increase for Q1 2026.
- The company anticipates a revenue growth guidance of 4.0% to 6.5% in constant currency for 2026, alongside an adjusted operating margin forecast of 15.9% to 16.1%.
Executive Insights
Ravi Kumar S, Chief Executive Officer of Cognizant, expressed gratitude towards the company’s workforce, emphasizing their role in driving the success of 2025. He stated, "We put our AI builder strategy into motion and returned to the 'winner's circle' faster than anticipated. The expansion of our workforce, enhancement of partnerships, and investment in AI technologies have positioned us favorably for sustained growth. Our strategy has yielded significant results, evidenced by nearly 50% year-over-year growth in the TCV of large deals signed in 2025."
Financial Resilience
Jatin Dalal, Chief Financial Officer, highlighted the financial resilience exhibited by Cognizant, noting that operational rigor allowed the company to maintain a robust free cash flow conversion exceeding 100%. He stated, "Delivering superior revenue growth while expanding adjusted operating margins and achieving solid EPS growth underscores our strategic discipline and ongoing investments in AI-led initiatives."
Bookings and Employee Metrics
Trailing-twelve-month bookings climbed to $28.4 billion, translating to a book-to-bill ratio of 1.3x. The company recorded a 9% year-over-year increase in bookings during the fourth quarter alone, underpinning confidence in its growth trajectory.
Regarding human resources, Cognizant's voluntary attrition rate in technology services stood at 13.9% as of December 31, 2025, showing improvement compared to previous periods. The total headcount rose to 351,600, indicating continued investment in talent.
Shareholder Returns
The company is committed to returning value to its shareholders, having repurchased 4.3 million shares worth $325 million in the fourth quarter. For the full year, Cognizant repurchased a total of 17.4 million shares for $1.3 billion, with $1.9 billion still authorized under its share repurchase program.
A quarterly cash dividend increase of 6.5% to $0.33 per share is also on track for distribution to shareholders, scheduled for payout in February 2026.
Future Guidance for 2026
Looking forward, Cognizant expects first-quarter revenue between $5.36 to $5.44 billion, projecting a growth trajectory of 4.8% to 6.3% in revenue, or 2.7% to 4.2% in constant currency. For the full year of 2026, the company anticipates revenues of $22.14 billion to $22.66 billion, reflecting a slight uptick in growth estimates.
The company's adjusted operating margin is expected to expand slightly, with guidance suggesting an approximate margin range of 15.9% to 16.1%.
Recent Client and Partnership Announcements
Cognizant’s recent strategic partnerships and client engagements further drive its commitment to enhancing capabilities in AI and operational efficiencies. Notable announcements include:
- Collaborating with Bupa Hong Kong to implement an AI-driven claims modernization solution, marking a significant expansion in AI capabilities.
- Renewing its partnership with Kohler Co. to enhance their digital ecosystem and accelerate AI-driven innovations.
- Engaging in a new IT services agreement with Merchants Fleet to bolster operational efficiency through advanced technology solutions.
- We celebrated 25 years of partnership with Ace Hardware, maintaining a focus on digital transformations that cater to the cooperative model.
Conclusion
Cognizant’s performance in 2025 illustrates its robust growth strategy, a commitment to innovation, and a clear focus on delivering value to its stakeholders. The future looks promising as the company positions itself to leverage AI technologies further while remaining agile in an evolving market landscape.
Frequently Asked Questions
What were Cognizant's fourth quarter earnings for 2025?
Cognizant reported revenue of $5.3 billion for the fourth quarter of 2025, exceeding expectations and showing a year-over-year increase of 4.9%.
How much has Cognizant's revenue increased in 2025?
The full-year revenue for 2025 increased to $21.1 billion, reflecting a 7.0% growth compared to the previous year.
What are Cognizant’s plans for shareholder returns in 2026?
Cognizant plans to return $1.6 billion to shareholders through dividends and share repurchases in 2026, with $1 billion allocated for share buybacks.
What is the expected revenue growth for 2026?
Cognizant anticipates revenue growth of 4.0% to 6.5% in constant currency for 2026.
What initiatives has Cognizant launched to enhance its operations?
Cognizant has launched several initiatives, including advancements in AI capabilities and strategic partnerships aimed at enhancing operational efficiencies across various sectors.
