10-Q · April 29, 2026
Cognizant Technology Solutions (CTSH) reported Q1 2026 earnings, revealing a revenue increase of 5.8% year-over-year to $5.413 billion, outperforming analyst estimates. The company also reported a diluted EPS of $1.39,…
Earnings analysis · 10-Q
CTSH earnings analysis
Filed July 29, 2026 · Our reading of the company's report
The latest report
Cognizant delivered Q2 revenue of $5.481 billion, up 4.5% year over year and 1.3% sequentially, with Financial Services' $186 million increase offsetting much weaker growth in the other segments. GAAP operating margin…
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Cognizant delivered Q2 revenue of $5.481 billion, up 4.5% year over year and 1.3% sequentially, with Financial Services' $186 million increase offsetting much weaker growth in the other segments. GAAP operating margin rose 30 basis points to 15.9% and diluted EPS increased to $1.36 from $1.31 a year ago, although EPS was below Q1's $1.39. The filing signals a balanced setup: AI, automation, large-deal ramps, and operating efficiencies support growth, while Project Leap costs, a $1.000 billion revolver draw, and DSO rising to 88 days temper the outlook.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.36
What stood out
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Revenue accelerated year over year
Q2 revenue was $5.481 billion, up $236 million (4.5% reported; 4.1% constant currency) from $5.245 billion a year earlier and up $71 million (1.3%) from Q1 2026 revenue of $5.410 billion.
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Operating margin expanded
GAAP operating margin expanded 30 basis points year over year to 15.9% from 15.6%, while adjusted operating margin rose 40 basis points to 16.0%. Operational efficiencies and favorable FX more than offset compensation, acquisition dilution, and third-party product mix.
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Financial Services drove growth
Financial Services delivered $186 million of growth, or 12.0% year over year and 11.7% in constant currency, accounting for the majority of the company's $236 million total revenue increase.
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EPS grew year over year, eased sequentially
GAAP diluted EPS increased $0.05, or 3.8% year over year, to $1.36; adjusted diluted EPS increased $0.06, or 4.6%, to $1.37. EPS declined from $1.39 in Q1 2026 despite the year-over-year improvement.
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Operating cash flow improved
Six-month operating cash flow rose $34 million to $832 million from $798 million. Management attributes the increase primarily to lower cash tax payments, partly offset by higher incentive-compensation payments.
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Capital returns remained substantial
The company repurchased $1.153 billion of stock in Q2, including $653 million in open-market purchases and $500 million through accelerated share repurchase agreements; $2.338 billion remained under the authorization at June 30, 2026.
What to watch
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Project Leap execution and cost risk
Project Leap generated $84 million of Q2 restructuring charges. Total program costs are expected at $230 million to $320 million, with substantially all costs expected in 2026; savings of approximately $200 million to $300 million are subject to execution and local-law assumptions.
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Acquisition and buybacks increased leverage
Liquidity tightened following a $634 million Astreya acquisition and $1.153 billion of Q2 repurchases: cash, cash equivalents, and short-term investments were $1.051 billion at June 30, while $1.000 billion was outstanding on the revolving credit facility.
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Working-capital and discretionary-spend pressure
Receivables conversion weakened, with DSO increasing 7 days to 88 days at June 30, 2026 from 81 days at December 31, 2025. Management also cites softer discretionary spending in retail, consumer goods, travel, and hospitality within Products and Resources, which grew only $16 million (1.2%).
Management's outlook
The 10-Q does not provide formal quantitative revenue or EPS guidance. Management expects Project Leap to generate approximately $200 million to $300 million of in-year savings in 2026, primarily to fund investments, against expected total program costs of $230 million to $320 million, substantially incurred in 2026.
Earlier filings 4
10-K · February 12, 2026
Cognizant positions itself as an "AI builder," prioritizing GenAI, cloud and industry-specific platforms while pursuing organic growth, selective acquisitions and partner ecosystem expansion. Financially, the company…
10-Q · May 1, 2025
Cognizant reported Q1 revenues of $5,115 million (up $355 million or +7.5% vs Q1 2024's $4,760 million) and GAAP diluted EPS of $1.34 (up $0.24 vs $1.10 in Q1 2024). Gross margin was ~33.6% (revenues $5,115M less cost…
10-Q · August 1, 2024
Cognizant reported Q2 revenue of $4,850 million, down $36 million (-0.7%) versus Q2 2023, while operating income improved to $708 million and diluted EPS rose to $1.14. Cash generation weakened (six months operating…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.