Cognizant Technology Solutions’ net profit rose 18% and revenue grew 4.9% from a year earlier in the fourth quarter.
The New Jersey-headquartered company posted a net profit of $648 million on revenue of $5.3 billion for the quarter ended December 31. In constant currency, or excluding the impact of fluctuations in exchange rates, revenue rose 3.8% from a year earlier, Cognizant said Wednesday.
The company had predicted its revenue to be between $5.27 billion and $5.33 billion in the quarter.
Cognizant expects revenue for the January-March first quarter to grow 4.8-6.3%, or 2.7-4.2% in constant currency, from a year earlier. For the full year, it forecasts revenue of $22.14-22.66 billion, which translates into estimated growth of 4.9-7.4%, or 4.0-6.5% in constant currency.
“There may not be new spend cycles, but we will see more (vendor) consolidation. It will be a wallet-share game,” chief executive Ravi Kumar S said on the demand environment.
The 2026 guidance “reflects sustained momentum, backed by our commitment to advancing our strategic investments aimed at accelerating our AI-led growth strategy”, chief financial officer Jatin Dalal said.
Nasdaq-listed Cognizant, which has about 70% of its workforce based in India, follows the calendar year for financial reporting.
Financial services recorded the strongest performance in the quarter, with revenue rising 10.5% annually, while communications, media and technology lagged. By geography, North America grew 2.5% y-o-y in the quarter, while Europe and the rest of the world reported around 4.2% growth each.
On a trailing-twelve-month basis, bookings rose 5% year-over-year to $28.4 billion. Bookings in the fourth quarter increased 9% year-over-year.
The company believes that tech service companies have yet to capture the “drift value” from AI-infrastructure companies, with room for system integrators to grow.
“While I acknowledge that what (companies) do now is going to be different, the addressable spend is (also) going to be different. And we have to transform to address that,” CEO Kumar said, in response to the launch of AI lab Athropic’s Claude Cowork, which is slated to disrupt the software sector.
However, “I disagree with the fact that you can plug this tool and magically everything will work. The reality is, the (business) value is still sitting with infrastructure (companies). It hasn’t drifted into enterprises yet,” Kumar added.
Margin and headcount
Operating margin for the year expanded 1.4 percentage point to 16.1%, and Dalal said the company remained focused on opportunities to expand the margin.
Between October and December, Cognizant added 1,800 employees to end the year with a headcount of 351,600. In the full year, its headcount increased by 14,000.
Kumar, however, highlighted the existence of non-linear growth, despite the headcount expansion. “We added 14,000 employees, which is 4% of our workforce. But we added over 6% in revenue. The non-linearity is showing up in our model,” Kumar said.
The company will be adding another 20,000 freshers to the bottom of the pyramid, Kumar said.
The New Jersey-headquartered company posted a net profit of $648 million on revenue of $5.3 billion for the quarter ended December 31. In constant currency, or excluding the impact of fluctuations in exchange rates, revenue rose 3.8% from a year earlier, Cognizant said Wednesday.
The company had predicted its revenue to be between $5.27 billion and $5.33 billion in the quarter.
Cognizant expects revenue for the January-March first quarter to grow 4.8-6.3%, or 2.7-4.2% in constant currency, from a year earlier. For the full year, it forecasts revenue of $22.14-22.66 billion, which translates into estimated growth of 4.9-7.4%, or 4.0-6.5% in constant currency.
“There may not be new spend cycles, but we will see more (vendor) consolidation. It will be a wallet-share game,” chief executive Ravi Kumar S said on the demand environment.
The 2026 guidance “reflects sustained momentum, backed by our commitment to advancing our strategic investments aimed at accelerating our AI-led growth strategy”, chief financial officer Jatin Dalal said.
Nasdaq-listed Cognizant, which has about 70% of its workforce based in India, follows the calendar year for financial reporting.
Financial services recorded the strongest performance in the quarter, with revenue rising 10.5% annually, while communications, media and technology lagged. By geography, North America grew 2.5% y-o-y in the quarter, while Europe and the rest of the world reported around 4.2% growth each.
On a trailing-twelve-month basis, bookings rose 5% year-over-year to $28.4 billion. Bookings in the fourth quarter increased 9% year-over-year.
The company believes that tech service companies have yet to capture the “drift value” from AI-infrastructure companies, with room for system integrators to grow.
“While I acknowledge that what (companies) do now is going to be different, the addressable spend is (also) going to be different. And we have to transform to address that,” CEO Kumar said, in response to the launch of AI lab Athropic’s Claude Cowork, which is slated to disrupt the software sector.
However, “I disagree with the fact that you can plug this tool and magically everything will work. The reality is, the (business) value is still sitting with infrastructure (companies). It hasn’t drifted into enterprises yet,” Kumar added.
Margin and headcount
Operating margin for the year expanded 1.4 percentage point to 16.1%, and Dalal said the company remained focused on opportunities to expand the margin.
Between October and December, Cognizant added 1,800 employees to end the year with a headcount of 351,600. In the full year, its headcount increased by 14,000.
Kumar, however, highlighted the existence of non-linear growth, despite the headcount expansion. “We added 14,000 employees, which is 4% of our workforce. But we added over 6% in revenue. The non-linearity is showing up in our model,” Kumar said.
The company will be adding another 20,000 freshers to the bottom of the pyramid, Kumar said.