Cognizant Technology Solutions has reported a steady second quarter for 2026, with revenue growing 4.5% year-on-year to $5.48 billion as demand for technology services remained resilient despite continued caution among corporate clients.
The US-based IT services company, which has a large workforce in India, said revenue increased from $5.25 billion in the same quarter last year. On a constant-currency basis, revenue growth stood at 4.1%. However, the pace was slower than the 7.2% constant-currency growth recorded in the year-ago quarter, reflecting a more measured technology spending environment.
Cognizant’s second-quarter performance highlights a mixed picture for the global IT services industry. Companies continue to invest heavily in artificial intelligence, cloud, data modernisation and digital transformation, but many remain reluctant to increase spending on discretionary technology projects. This has made the recovery in broader IT demand less uniform.
The company’s net income declined marginally to $636 million from $645 million a year earlier. Despite the small fall in profit, profitability improved at the operating level. GAAP operating margin increased to 15.9% from 15.6%, while adjusted operating margin rose 40 basis points to 16%. Adjusted earnings per share increased 4.6% year-on-year to $1.37, while GAAP EPS rose 3.8% to $1.36.
One of the strongest parts of the business was Financial Services. Revenue from the segment increased 12% year-on-year, marking another quarter of double-digit growth. Financial services has emerged as an important area of technology spending because banks, insurers and other financial institutions are moving more aggressively on artificial intelligence, automation, data platforms and modernisation projects.
The performance also shows where the broader AI opportunity is currently taking shape. Rather than simply experimenting with generative AI, large companies are increasingly looking for ways to deploy AI across existing business systems and generate measurable returns. Cognizant is positioning itself as an “AI builder”, combining artificial intelligence with engineering, infrastructure, data modernisation and industry expertise.
Chief Executive Officer Ravi Kumar said the company was helping clients bridge what it calls the “AI velocity gap” between investment in AI and the ability to turn those investments into business outcomes. He said Cognizant was expanding its Frontier workforce and reskilling employees as clients move from AI experimentation towards larger-scale implementation.
However, the latest results also suggest that the initial excitement around AI-led deal activity has not translated into an across-the-board acceleration in IT spending. Cognizant’s second-quarter bookings declined 6% year-on-year, although trailing 12-month bookings rose 5% to $29.1 billion. The company reported a book-to-bill ratio of about 1.3 times and signed seven large deals with total contract values of at least $100 million.
This distinction is important. Large, strategic AI and transformation programmes continue to attract spending, while smaller discretionary projects remain under pressure. Cognizant’s management has indicated that financial services is currently an exception to the broader weakness in discretionary spending. The company has therefore maintained growth, but has become more conservative about how quickly technology budgets will recover across the wider economy.
Reflecting that caution, Cognizant narrowed its 2026 revenue growth guidance. It now expects constant-currency revenue growth of 4% to 5.5%, compared with its earlier range of 4% to 6.5%. The company expects full-year revenue of $22.04 billion to $22.35 billion. Its adjusted operating margin outlook remains unchanged at 16% to 16.2%.
At the same time, Cognizant raised its adjusted diluted EPS guidance to $5.70-$5.82 for 2026, representing growth of 8% to 10%. The improved earnings outlook reflects stronger margins and continued focus on operational efficiency.
The company is also reshaping its operations around its AI strategy. During the first half of 2026, Cognizant spent $1.6 billion on share repurchases and $1.3 billion on acquisitions. In the second quarter, it completed the $634 million acquisition of Astreya, including contingent consideration, strengthening its technology infrastructure capabilities.
Cognizant ended the quarter with 356,700 employees, 900 fewer than at the end of March but 12,900 more than a year earlier. The company is simultaneously focusing on reskilling and operational restructuring as artificial intelligence changes the economics of technology services.
For the third quarter, Cognizant expects revenue between $5.60 billion and $5.68 billion, translating into constant-currency growth of 3.8% to 5.3%. The guidance reflects the company’s cautious view of near-term demand while leaving room for stronger spending if enterprise technology budgets improve.
The second-quarter results therefore present a balanced picture of the IT services sector. AI remains a major source of opportunity, particularly in areas where companies are ready to move from pilots to production. But the broader recovery in discretionary technology spending is still uneven.
