Cognizant Technology Solutions (NASDAQ:CTSH) Posts Earnings Results, Beats Expectations By $0.03 EPS

Cognizant Technology Solutions (NASDAQ:CTSH) announced its earnings results on Thursday. The information technology service provider reported $1.49 earnings per share for the quarter, topping the consensus estimate of $1.46 by $0.03, FiscalAI reports. Cognizant Technology Solutions had a return on equity of 17.70% and a net margin of 10.26%. The business had revenue of $5.66 billion during the quarter, compared to the consensus estimate of $5.64 billion. During the same period in the prior year, the company posted $1.39 EPS. The business’s quarterly revenue was up 4.6% on a year-over-year basis.

Here are the key takeaways from Cognizant Technology Solutions’ conference call:

• Strong third-quarter execution: Revenue grew 4.8% year over year in constant currency to $5.7 billion, adjusted operating margin reached 16.3%, and adjusted EPS rose 7% to $1.49. Free cash flow was $925 million, while Cognizant returned more than $250 million through share repurchases during the quarter.
• Financial services and AI-related businesses remained key growth drivers. Financial services grew 12% in constant currency for a third consecutive quarter, while AI-tailwind areas representing roughly 40% of the business are growing at approximately two to three times the rate of total organic services revenue.
• Bookings quality improved, with new and expanded business reaching 60% of trailing-12-month bookings, up more than 10 percentage points year over year. Trailing-12-month bookings grew 4%, book-to-bill was 1.3, and large-deal TCV increased 9%.
• Cognizant is expanding its AI Builder strategy across modernization, agentic business operations, secure AI, and data-center and workplace services. Management cited more than 8,500 AI engagements, over 50% AI-assisted software development, and platform opportunities intended to capture more value from enterprise AI deployments.
• Guidance was reduced because macro uncertainty is weighing on discretionary spending, particularly in healthcare and consumer-facing sectors. Full-year constant-currency revenue growth is now expected at 4.0%-4.4%, versus 4.0%-5.5% previously, while fourth-quarter growth is guided to 3.2%-4.7%; higher furloughs and lower third-party resale contributions are also expected.

Cognizant Technology Solutions Price Performance

CTSH opened at $62.52 on Friday. The stock’s 50-day moving average price is $62.12 and its 200 day moving average price is $59.39. Cognizant Technology Solutions has a 12-month low of $37.08 and a 12-month high of $87.03. The firm has a market cap of $28.16 billion, a price-to-earnings ratio of 13.45, a PEG ratio of 1.24 and a beta of 0.86. The company has a current ratio of 2.18, a quick ratio of 2.18 and a debt-to-equity ratio of 0.11.

Cognizant Technology Solutions Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Wednesday, November 25th. Investors of record on Friday, November 13th will be paid a dividend of $0.33 per share. The ex-dividend date of this dividend is Friday, November 13th. This represents a $1.32 annualized dividend and a yield of 2.1%. Cognizant Technology Solutions’s dividend payout ratio is presently 28.39%.

Key Stories Impacting Cognizant Technology Solutions

Here are the key news stories impacting Cognizant Technology Solutions this week:

• Positive Sentiment: Cognizant reported third-quarter revenue of $5.664 billion, up 4.6% year over year, while adjusted EPS of $1.49 exceeded the $1.46 consensus estimate. Financial Services revenue grew 12%, adjusted operating margin expanded to 16.3%, and free cash flow reached approximately $1.6 billion. Cognizant Reports Third Quarter 2026 Results
• Positive Sentiment: The company launched an OpenAI Frontier Capability Group with more than 25,000 professionals. Cognizant plans to deploy OpenAI products, including ChatGPT and Codex, in its own sales and customer-success operations before expanding delivery for clients, potentially strengthening its position in enterprise AI services. Cognizant OpenAI Frontier Capability Group announcement
• Neutral Sentiment: Cognizant declared a quarterly dividend of $0.33 per share, or $1.32 annually, representing a yield of about 2.1%. The dividend supports shareholder returns but is unlikely to materially change the near-term earnings outlook.
• Negative Sentiment: Third-quarter bookings fell 7% year over year, raising concerns about future demand and revenue growth. Although trailing-12-month bookings increased 4% to $28.7 billion, investors appear concerned that near-term sales momentum is deteriorating. Cognizant bookings and growth analysis
• Negative Sentiment: Reported revenue growth was partly aided by acquisitions and resold third-party products, which supplied roughly four percentage points of growth. That implies slower underlying expansion, while GAAP operating margin declined 60 basis points to 15.4%.
• Negative Sentiment: Cognizant narrowed its 2026 constant-currency revenue-growth outlook to 4.0%–4.4% and forecast adjusted EPS of $5.72–$5.79. The restrained guidance, combined with weaker bookings, overshadowed the quarterly earnings beat.

Analyst Ratings Changes

CTSH has been the subject of a number of recent research reports. Guggenheim reaffirmed a “buy” rating and issued a $80.00 target price (up from $65.00) on shares of Cognizant Technology Solutions in a research note on Tuesday. Mizuho set a $64.00 price objective on Cognizant Technology Solutions in a research report on Thursday, August 6th. Royal Bank Of Canada set a $55.00 price objective on shares of Cognizant Technology Solutions in a report on Friday, July 24th. Needham & Company LLC set a $78.00 target price on shares of Cognizant Technology Solutions in a research note on Monday. Finally, Weiss Ratings upgraded shares of Cognizant Technology Solutions from a “hold (c-)” rating to a “hold (c)” rating in a research report on Monday, October 19th. Ten analysts have rated the stock with a Buy rating and fourteen have given a Hold rating to the company’s stock. According to MarketBeat, the stock presently has an average rating of “Hold” and an average price target of $68.04.

About Cognizant Technology Solutions

Cognizant Technology Solutions Corporation is a global information technology services and consulting company that helps organizations modernize their technology infrastructure, operations and customer experiences. The company serves businesses across industries including financial services, healthcare, life sciences, manufacturing, retail and communications.

Cognizant’s services include consulting, application development and modernization, cloud computing, data and artificial intelligence, digital engineering, cybersecurity and business process services.