Cognizant reported a 4.8% revenue growth for the third quarter but lowered its full-year guidance to 4-4.4%. While financial services demand remains strong, margin pressure and cautious forecasts have tempered expectations, even as the firm continues to expand its workforce.
Cognizant Technology Solutions posted revenue of $5.7 billion for the third quarter ending September 30, 2026, marking a 4.8% growth in constant currency. Despite this performance, the company lowered its full-year revenue outlook to a range of 4% to 4.4%, down from its previous expectation of 4% to 5.5%. This adjustment signals a cautious view of demand for the final months of the year, even as the company manages to secure new business.
The net profit for the quarter reached $627 million, a notable rise from the $274 million recorded in the same period last year. This sharp year-on-year increase is primarily attributed to lower one-time tax charges compared to 2025. However, operational efficiency remains a key area for investors to track. Operating margins declined 60 basis points to 15.4% during the quarter, suggesting that the company is facing pressure on profitability in a competitive environment.
The performance also highlighted a divide across different business units. The financial services division was a strong performer, reporting a 12.3% surge in constant currency growth. In contrast, the communications, media, and technology group contracted by 0.9%, while the products, resources, and healthcare segments also saw minor declines. This mix illustrates how different industries are adjusting their technology spending plans.
Cognizant is also refining its internal costs under the Project Leap restructuring program. The company has lowered the estimated costs for this initiative to between $180 million and $250 million, down from the earlier projection of $320 million. On the hiring front, the company added 3,200 employees during the quarter, taking the total headcount to 359,900. This growth in workforce contrasts with the more conservative hiring patterns often reported by several large India-based IT peers, such as Infosys and Wipro, in recent quarters.
Order bookings provide some stability to the outlook. The company reported a book-to-bill ratio of 1.3x, with total bookings for the trailing twelve-month period reaching $28.7 billion, a 4% increase year-on-year. Investors will likely monitor how these bookings convert into revenue in the coming quarters, especially as the company navigates the current uncertainty in global technology spending.