Cognizant Narrows 2026 Growth Outlook After Project Leap Costs

The Tip Desk · October 30, 2026 · 3 min read

The AI builder posted $5.66 billion of third-quarter revenue and cut full-year constant-currency growth guidance to 4.0% to 4.4%.

Cognizant Technology Solutions (CTSH) reported third-quarter revenue of $5.66 billion, up 4.6% from a year earlier, or 4.8% in constant currency, and said it would narrow its 2026 constant-currency revenue growth outlook to 4.0% to 4.4% year-over-year.

The AI builder and technology services provider said the quarter came in above the midpoint of its prior guidance range, with a seventh consecutive year-over-year expansion in adjusted operating margin. Chief Executive Officer Ravi Kumar S said Financial Services posted another quarter of double-digit growth.

Adjusted operating margin was 16.3%, up 30 basis points from a year earlier. GAAP operating margin was 15.4%. Adjusted diluted earnings were $1.49 a share, up 7.2%. GAAP diluted earnings were $1.39 a share; the year-ago quarter included a one-time non-cash income tax charge of $0.80 a share.

The company recorded $51 million of restructuring charges in the three months ended September 30, 2026, compared with none a year earlier. Those charges sat inside Project Leap, a program introduced in the second quarter to fund investments in integrated offerings, AI capabilities and partnerships, reshape productivity and upskill the workforce.

During the third quarter Cognizant revised Project Leap estimates. It now expects total costs of $180 million to $250 million, with $140 million to $160 million expected in 2026 and the remainder through the first quarter of 2027. Cash payments are expected primarily over the same period. The company said the costs consist of $150 million to $200 million of employee severance and other personnel-related costs and $30 million to $50 million of other charges. It expects in-year savings of approximately $200 million in 2026, which are and will continue to be used primarily to fund those investments.

Trailing-twelve-month bookings were $28.7 billion, up 4% year-over-year, for a book-to-bill of about 1.3 times. Third-quarter bookings declined 7% year-over-year and included three large deals of $100 million or greater.

Full-year 2026 revenue is now expected at $22.05 billion to $22.14 billion, growth of 4.5% to 4.9%, or 4.0% to 4.4% in constant currency. Fourth-quarter revenue is expected at $5.49 billion to $5.57 billion, growth of 3.0% to 4.5%, or 3.2% to 4.7% in constant currency. Full-year adjusted operating margin is now expected at approximately 16.1%, or 30 basis points of expansion. Adjusted diluted EPS guidance is $5.72 to $5.79, growth of 8% to 10%.

Through the first nine months of 2026, the company said it expanded adjusted operating margin by 30 basis points, generated $1.58 billion of free cash flow and deployed $2.3 billion on share repurchases and dividends. Operating cash flow for the nine months ended September 30 was $1.84 billion.

In the third quarter Cognizant repurchased 4.9 million shares for $258 million. As of September 30, $2.1 billion remained under the repurchase authorization. In October it declared a quarterly cash dividend of $0.33 a share, payable November 25.

Total headcount was 359,900 as of September 30, up 3,200 from June 30. Trailing-twelve-month voluntary attrition in tech services was 12.6% for the period ended September 30.

Chief Financial Officer Jatin Dalal said adjusted EPS grew 7%, exceeding revenue growth both in the quarter and year-to-date. The company said it is investing in strategic partnerships and AI skilling and integrating recently completed acquisitions, and that the approach supports sustainable growth and long-term value creation.