Cognizant Technology Solutions (NASDAQ:CTSH) Posts Quarterly Earnings Results, Beats Estimates By $0.03 EPS

Key Points

• Cognizant beat quarterly estimates: EPS came in at $1.49 versus the $1.46 consensus, while revenue reached $5.66 billion, up 4.6% year over year and slightly above expectations.
• Financial services and AI-related work supported growth. Financial-services revenue increased 12% in constant currency, while AI-focused areas expanded faster than the broader services business; bookings quality and large-deal activity also improved.
• Management lowered and narrowed its growth outlook to 4.0%–4.4% constant-currency revenue growth for the full year, citing macroeconomic uncertainty and weaker discretionary spending, particularly in healthcare and consumer-facing markets.

Cognizant Technology Solutions (NASDAQ:CTSH - Get Free Report) issued its earnings results on Thursday. The information technology service provider reported $1.49 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.46 by $0.03, FiscalAI reports. The company had revenue of $5.66 billion during the quarter, compared to analyst estimates of $5.64 billion. Cognizant Technology Solutions had a return on equity of 17.70% and a net margin of 10.26%. The firm's quarterly revenue was up 4.6% on a year-over-year basis. During the same quarter last year, the business posted $1.39 EPS.

Here are the key takeaways from Cognizant Technology Solutions' conference call:

• Strong third-quarter execution: Revenue grew 4.8% year over year in constant currency to $5.7 billion, adjusted operating margin reached 16.3%, and adjusted EPS rose 7% to $1.49. Free cash flow was $925 million, while Cognizant returned more than $250 million through share repurchases during the quarter.
• Financial services and AI-related businesses remained key growth drivers. Financial services grew 12% in constant currency for a third consecutive quarter, while AI-tailwind areas representing roughly 40% of the business are growing at approximately two to three times the rate of total organic services revenue.
• Bookings quality improved, with new and expanded business reaching 60% of trailing-12-month bookings, up more than 10 percentage points year over year. Trailing-12-month bookings grew 4%, book-to-bill was 1.3, and large-deal TCV increased 9%.
• Cognizant is expanding its AI Builder strategy across modernization, agentic business operations, secure AI, and data-center and workplace services. Management cited more than 8,500 AI engagements, over 50% AI-assisted software development, and platform opportunities intended to capture more value from enterprise AI deployments.
• Guidance was reduced because macro uncertainty is weighing on discretionary spending, particularly in healthcare and consumer-facing sectors. Full-year constant-currency revenue growth is now expected at 4.0%-4.4%, versus 4.0%-5.5% previously, while fourth-quarter growth is guided to 3.2%-4.7%; higher furloughs and lower third-party resale contributions are also expected.

Cognizant Technology Solutions Price Performance

Cognizant Technology Solutions stock traded down $3.85 during midday trading on Thursday, reaching $62.51. The company had a trading volume of 4,089,930 shares, compared to its average volume of 7,945,172. The company has a market capitalization of $28.16 billion, a P/E ratio of 13.45, a P/E/G ratio of 1.32 and a beta of 0.86. Cognizant Technology Solutions has a 12-month low of $37.08 and a 12-month high of $87.03. The firm's fifty day simple moving average is $62.09 and its 200-day simple moving average is $59.50. The company has a debt-to-equity ratio of 0.11, a current ratio of 2.18 and a quick ratio of 2.18.

Trending Headlines about Cognizant Technology Solutions

Here are the key news stories impacting Cognizant Technology Solutions this week:

• Positive Sentiment: Third-quarter adjusted EPS was $1.49, above the $1.46 analyst consensus, while revenue rose 4.6% year over year to $5.66 billion, slightly exceeding estimates. Adjusted operating margin expanded to 16.3%, and adjusted EPS increased 7.2%. Cognizant Reports Third Quarter 2026 Results
• Positive Sentiment: Financial Services revenue grew 12%, while trailing 12-month bookings increased 4% to $28.7 billion. Cognizant also generated $1.58 billion in free cash flow, repurchased approximately $258 million of stock, and declared a quarterly dividend of $0.33. Cognizant Third-Quarter Results
• Neutral Sentiment: Brokerages maintained a generally favorable view, with the reported average price target near $68 and Morgan Stanley raising its target. However, these targets provide limited immediate support while investors reassess the earnings outlook.
• Negative Sentiment: Third-quarter bookings fell 7% year over year, raising concerns about future demand and sales momentum. Management said artificial intelligence is shifting from capability development toward proving customer value, which may delay revenue conversion from AI initiatives. Cognizant Bookings and AI Article
• Negative Sentiment: Cognizant narrowed its 2026 constant-currency revenue-growth guidance to 4.0%–4.4% and projected adjusted EPS of $5.72–$5.79. GAAP operating margin also declined 60 basis points year over year, reinforcing concerns that growth remains modest despite the quarterly beat. Cognizant Q3 Earnings and Guidance

Wall Street Analyst Weigh In

CTSH has been the subject of several recent research reports. Citigroup reissued a "neutral" rating on shares of Cognizant Technology Solutions in a report on Monday, October 19th. Guggenheim reiterated a "buy" rating and set a $80.00 price target (up from $65.00) on shares of Cognizant Technology Solutions in a research report on Tuesday. Royal Bank Of Canada set a $55.00 price target on Cognizant Technology Solutions in a report on Friday, July 24th. Robert W. Baird set a $68.00 price objective on shares of Cognizant Technology Solutions in a research note on Thursday, July 30th. Finally, Deutsche Bank Aktiengesellschaft reissued a "buy" rating and set a $70.00 price target (up from $65.00) on shares of Cognizant Technology Solutions in a report on Friday, September 18th. Ten equities research analysts have rated the stock with a Buy rating and fourteen have issued a Hold rating to the company. According to data from MarketBeat.com, Cognizant Technology Solutions presently has a consensus rating of "Hold" and an average target price of $68.04.

About Cognizant Technology Solutions

Cognizant Technology Solutions Corporation is a global information technology services and consulting company that helps organizations modernize their technology infrastructure, operations and customer experiences. The company serves businesses across industries including financial services, healthcare, life sciences, manufacturing, retail and communications.

Cognizant's services include consulting, application development and modernization, cloud computing, data and artificial intelligence, digital engineering, cybersecurity and business process services.

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