CTSH earnings analysis
What we found in CTSH's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
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.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- 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.
- 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.
- 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%).
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.36
- Gross margin
- 33.4%
- Operating margin
- 15.9%
- Segment
- Health Sciences: revenue increased $21 million, or 1.4% year over year (1.0% constant currency).
- Segment
- Financial Services: revenue increased $186 million, or 12.0% year over year (11.7% constant currency).
- Segment
- Products and Resources: revenue increased $16 million, or 1.2% year over year (0.7% constant currency).
- Segment
- Communications, Media and Technology: revenue increased $13 million, or 1.5% year over year (1.4% constant currency).
What they said about what is next.
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.
The filing reads about the same as the one before it.
What came before.
- 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,…
- 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. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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