Company Announcements

Q4 2025

Q4 2024

2025

2024

Revenue

$5,333

$5,082

$21,108

$19,736

Y/Y Change

4.9 %

6.8 %

7.0 %

2.0 %

Y/Y Change CC¹

3.8 %

6.7 %

6.4 %

1.9 %

GAAP Operating Margin

16.0 %

14.8 %

16.1 %

14.7 %

Adjusted Operating Margin¹

16.0 %

15.7 %

15.8 %

15.3 %

GAAP Diluted EPS

$1.34

$1.10

$4.56

$4.51

Adjusted Diluted EPS¹

$1.35

$1.21

$5.28

$4.75

Operating cash flow conversion (Operating cash flow / net income)

129 %

95 %

Free cash flow conversion (Free cash flow¹ / net income)

120 %

82 %

Our acquisition of Belcan contributed approximately 260 basis points to revenue growth for the full year ended December 31, 2025. 

GAAP Diluted EPS includes a one-time non-cash income tax charge that negatively impacted full year 2025 by $0.80.

¹ Constant currency ("CC") revenue growth, Adjusted Operating Margin, Adjusted Diluted Earnings Per Share ("Adjusted Diluted EPS" or "Adjusted EPS") and free cash flow are not measures of financial performance prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). A full reconciliation of Adjusted Operating Margin guidance to the corresponding GAAP measure on a forward-looking basis cannot be provided without unreasonable efforts. See "About Non-GAAP Financial Measures and Performance Metrics" for more information and a partial reconciliation to the most directly comparable GAAP financial measure at the end of this release.

² Guidance as of February 4, 2026

³ A full reconciliation of Adjusted Operating Margin and Adjusted Diluted EPS guidance to the corresponding GAAP measures on a forward-looking basis cannot be provided without unreasonable efforts. See "About Non-GAAP Financial Measures and Performance Metrics" for more information and a partial reconciliation to the most directly comparable GAAP financial measures at the end of this release.

⁴ Gartner, Magic Quadrant for Custom Software Development Services, 1 December 2025.  Gartner does not endorse any company, vendor, product or service depicted in its publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner publications consist of the opinions of Gartner's business and technology insights organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this publication, including any warranties of merchantability or fitness for a particular purpose.

GARTNER and MAGIC QUADRANT are trademarks of Gartner, Inc. and its affiliates.

Investor Relations Contact:

Media Contact:

Tyler Scott

Jeff DeMarrais

SVP, Investor Relations

SVP, Corporate Communications

 +1 551-220-8246

 +1 475-223-2298

Tyler.Scott@cognizant.com

Jeff.DeMarrais@cognizant.com

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 (in millions, except per share data)

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2025

2024

2025

2024

 Revenues

$     5,333

$     5,082

$  21,108

$   19,736

 Operating expenses:

Cost of revenues (exclusive of depreciation and amortization expense shown
separately below)

3,534

3,297

13,991

12,958

 Selling, general and administrative expenses

806

844

3,240

3,223

 Restructuring charges

—

49

—

134

 Depreciation and amortization expense

140

141

550

529

(Gain) on sale of property and equipment

—

—

(62)

—

 Income from operations

853

751

3,389

2,892

 Other income (expense), net:

 Interest income

27

28

105

119

 Interest expense

(8)

(19)

(37)

(54)

 Foreign currency exchange gains (losses), net

5

(18)

18

(19)

 Other, net

1

(2)

4

—

 Total other income (expense), net

25

(11)

90

46

 Income before provision for income taxes

878

740

3,479

2,938

 Provision for income taxes

(235)

(199)

(1,258)

(713)

 Income (loss) from equity method investment

5

5

9

15

Net income

$        648

$        546

$     2,230

$     2,240

 Basic earnings per share

$       1.35

$       1.10

$       4.57

$       4.52

 Diluted earnings per share

$       1.34

$       1.10

$       4.56

$       4.51

Weighted average number of common shares outstanding - Basic

481

495

488

496

Dilutive effect of shares issuable under stock-based compensation plans

1

1

1

1

Weighted average number of common shares outstanding - Diluted

482

496

489

497

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited)

(in millions, except par values)

December 31,
2025

December 31,
2024

Assets

Current assets:

Cash and cash equivalents

$         1,901

$          2,231

Short-term investments

13

12

Trade accounts receivable, net

4,439

4,059

Other current assets

2,198

1,202

Total current assets

8,551

7,504

Property and equipment, net

933

994

Operating lease assets, net

573

552

Goodwill

7,106

6,953

Intangible assets, net

1,417

1,599

Deferred income tax assets, net

967

1,248

Long-term investments

111

90

Other noncurrent assets

1,034

1,026

Total assets

$       20,692

$        19,966

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable

$            308

$             340

Deferred revenue

501

450

Short-term debt

33

33

Operating lease liabilities

153

152

Accrued expenses and other current liabilities

2,664

2,610

Total current liabilities

3,659

3,585

Deferred revenue, noncurrent

37

30

Operating lease liabilities, noncurrent

423

420

Deferred income tax liabilities, net

168

154

Long-term debt

543

875

847

494

Total liabilities

5,677

5,558

Stockholders' equity:

Preferred stock, $0.10 par value, 15 shares authorized, none issued

—

—

Class A common stock, $0.01 par value, 1,000 shares authorized, 479 and 495 shares issued
and outstanding as of December 31, 2025 and 2024, respectively

5

5

Additional paid-in capital

12

13

Retained earnings

15,158

14,686

Accumulated other comprehensive income (loss)

(160)

(296)

Total stockholders' equity

15,015

14,408

Total liabilities and stockholders' equity

$       20,692

$        19,966

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

Reconciliations of Non-GAAP Financial Measures

(Unaudited)

 (dollars in millions, except per share amounts)

Three Months Ended
December 31,

Twelve Months Ended
December 31,

Guidance

2025

2024

2025

2024

Full Year 2026 ⁽¹⁾

GAAP income from operations

$    853

$    751

$ 3,389

$ 2,892

(Gain) on sale of property and equipment^(a)

—

—

(62)

—

NextGen charges^(b)

—

49

—

134

Adjusted Income From Operations

$    853

$    800

$ 3,327

$ 3,026

GAAP operating margin

16.0 %

14.8 %

16.1 %

14.7 %

(Gain) on sale of property and equipment

—

—

(0.3)

—

—

NextGen charges

—

0.9

—

0.6

—

Adjusted Operating Margin

16.0 %

15.7 %

15.8 %

15.3 %

15.9% - 16.1%

GAAP net income

$    648

$    546

$ 2,230

$ 2,240

Effect of adjustments to income from operations, pre-tax

—

49

(62)

134

Non-operating foreign currency exchange (gains) losses,
     pre-tax^(c)

(5)

18

(18)

19

Tax effect of above adjustments^(d)

8

(12)

42

(30)

One-time income tax expense related to the enactment of the
     OBBBA^(e)

—

—

390

—

Adjusted Net Income

$    651

$    601

$ 2,582

$ 2,363

GAAP diluted earnings per share

$   1.34

$   1.10

$   4.56

$   4.51

Effect of adjustments to income from operations, pre-tax

—

0.10

(0.13)

0.27

—

Non-operating foreign currency exchange (gains) losses,
     pre-tax^(c)

(0.01)

0.04

(0.04)

0.04

(c)

Tax effect of above adjustments^(d)

0.02

(0.03)

0.09

(0.07)

(c)

One-time income tax expense related to the enactment of the
     OBBBA^(e)

—

—

0.80

—

—

Adjusted Diluted Earnings Per Share

$   1.35

$   1.21

$   5.28

$   4.75

$5.56 - $5.70

(1) A full reconciliation of Adjusted Operating Margin and Adjusted Diluted Earnings Per Share guidance to the corresponding GAAP measures on a forward-looking basis cannot be provided without unreasonable efforts, as we are unable to provide reconciling information with respect to unusual items, net non-operating foreign currency exchange gains or losses and the tax effects of these adjustments, and such adjustments may be significant.

Notes:

(a)

During the three months ended March 31, 2025, we realized a gain on the sale of an office complex in India, which was reported in "(Gain) on sale of property and equipment" on our unaudited consolidated statement of operations.

(b)

NextGen charges for the three months ended December 31, 2024 include $30 million of employee separation costs, $7 million of facility exit costs and $12 million of third party and other costs. NextGen charges for the year ended December 31, 2024 include $85 million of employee separation costs, $36 million of facility exit costs and $13 million of third party and other costs. The program concluded on December 31, 2024. The costs related to the NextGen program are reported in "Restructuring charges" in our unaudited consolidated statements of operations.

(c)

Non-operating foreign currency exchange gains and losses, inclusive of gains and losses on related foreign exchange forward contracts not designated as hedging instruments for accounting purposes, are reported in "Foreign currency exchange gains (losses), net" in our unaudited consolidated statements of operations. Non-operating foreign currency exchange gains and losses are subject to high variability and low visibility and therefore cannot be provided on a forward-looking basis without unreasonable efforts.

(d)

Presented below are the tax impacts of our non-GAAP adjustment to pre-tax income for the: 

(in millions)

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2025

2024

2025

2024

Non-GAAP income tax benefit (expense) related to:

Gain on sale of property and equipment

$                —

$                —

$              (9)

$              —

NextGen charges

—

13

—

34

Foreign currency exchange gains and losses

(8)

(1)

(33)

(4)

The effective tax rate related to non-operating foreign currency exchange gains and losses varies depending on the jurisdictions in which such income and expenses are generated and the statutory rates applicable in those jurisdictions. As such, the income tax effect of non-operating foreign currency exchange gains and losses shown in the above table may not appear proportionate to the net pre-tax foreign currency exchange gains and losses reported in our unaudited consolidated statements of operations.

In July 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States, which, among other provisions, repealed the requirement to capitalize U.S. research and experimental ("R&E") costs. As a result, we do not believe it is more likely than not that we will realize our deferred tax asset of $390 million related to R&E costs capitalized outside the United States. These amounts would have otherwise been available to offset certain future U.S. taxes on our non-U.S. earnings, which, as a result of this repeal, we no longer project to be applicable to us. Therefore, in the third quarter of 2025, we recorded a one-time, non-cash income tax expense of $390 million.

Reconciliations of Net Cash

(Unaudited)

(in millions)

December 31, 2025

December 31, 2024

Cash and cash equivalents^(a)

$                 1,901

$                 2,231

Short-term investments

13

12

Less:

Short-term debt

33

33

Long-term debt

543

875

Net cash^(a)

$                 1,338

$                 1,335

Notes:

(a)

Cash and cash equivalents as of December 31, 2025 excludes $733 million of restricted cash related to our acquisition of 3Cloud which was reported in "Other current assets" on our unaudited consolidated statement of financial position.

The above tables serve to reconcile the Non-GAAP financial measures to the most directly comparable GAAP measures. Refer to the "About Non-GAAP Financial Measures and Performance Metrics" section of our press release for further information on the use of these Non-GAAP measures.

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

Revenue by Business Segment and Geography

(Unaudited)

 (dollars in millions)

Three Months Ended December 31, 2025

Year over Year

$

 % of total

 % Change

Constant
Currency
% Change ^(a)

Revenues by Segment:

Health Sciences

$         1,621

30.4 %

5.2 %

4.2 %

Financial Services

1,586

29.7 %

10.5 %

9.3 %

Products and Resources

1,318

24.7 %

1.8 %

0.3 %

Communications, Media and Technology

808

15.2 %

(0.4) %

(1.2) %

Total Revenues

$         5,333

4.9 %

3.8 %

Revenues by Geography:

North America

$         3,986

74.7 %

4.3 %

4.2 %

United Kingdom

480

9.0 %

7.9 %

3.8 %

Continental Europe

538

10.1 %

8.9 %

0.3 %

Europe - Total

1,018

19.1 %

8.4 %

2.0 %

Rest of World

329

6.2 %

2.5 %

3.6 %

Total Revenues

$         5,333

4.9 %

3.8 %

Twelve Months Ended December 31, 2025

Year over Year

$

 % of total

 % Change

Constant
Currency
% Change ^(a)

Revenues by Segment:

Health Sciences

$         6,347

30.1 %

7.0 %

6.4 %

Financial Services

6,173

29.2 %

7.3 %

6.8 %

Products and Resources^(b)

5,285

25.0 %

10.5 %

9.7 %

Communications, Media and Technology

3,303

15.7 %

1.0 %

0.7 %

Total Revenues^(b)

$       21,108

7.0 %

6.4 %

Revenues by Geography:

North America ^(b)

$       15,780

74.8 %

7.4 %

7.4 %

United Kingdom

1,922

9.1 %

5.2 %

2.1 %

Continental Europe

2,090

9.9 %

8.2 %

3.6 %

Europe - Total

4,012

19.0 %

6.7 %

2.9 %

Rest of World

1,316

6.2 %

2.9 %

4.7 %

Total Revenues^(b)

$       21,108

7.0 %

6.4 %

Notes:

(a)

Constant currency revenue growth is not a measure of financial performance prepared in accordance with GAAP. See "About Non-GAAP Financial Measures and Performance Metrics" section of our press release for further information.

(b)

For the year ended December 31, 2025, our acquisition of Belcan contributed approximately 260 basis points to overall revenue growth, respectively, primarily in North America and to a lesser extent in the United Kingdom. Additionally, Belcan contributed approximately 960 basis points of growth to our Products and Resources segment for the year ended December 31, 2025.

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in millions)

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2025

2024

2025

2024

Cash flows from operating activities:

Net income

$       648

$       546

$    2,230

$    2,240

Adjustments for non-cash income and expenses

94

40

991

394

Changes in operating assets and liabilities, net of effects of businesses acquired

116

334

(338)

(510)

Net cash provided by operating activities

858

920

2,883

2,124

Cash flows from investing activities:

Purchases of property and equipment

(77)

(83)

(288)

(297)

Proceeds from sale of property and equipment

—

—

70

—

Net maturities (purchases) of investments

2

4

(12)

266

Payments for business combinations, net of cash acquired

—

—

—

(1,615)

Net cash (used in) investing activities

(75)

(79)

(230)

(1,646)

Cash flows from financing activities:

Issuance of common stock under stock-based compensation plans

12

14

58

63

Repurchases of common stock

(338)

(154)

(1,378)

(605)

Net change in term loan borrowings and earnout obligations and finance leases

(10)

(12)

(42)

(73)

Proceeds from borrowing under the revolving credit facility

—

—

—

600

Repayment of notes outstanding under the revolving credit facility

—

(300)

(300)

(300)

Dividends paid

(151)

(150)

(610)

(600)

Net cash (used in) by financing activities

(487)

(602)

(2,272)

(915)

Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash
     equivalents

(3)

(21)

22

(49)

Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents

293

218

403

(486)

Cash, cash equivalents and restricted cash and cash equivalents, beginning of period

2,341

2,013

2,231

2,717

Cash, cash equivalents and restricted cash, end of period

$    2,634

$    2,231

$    2,634

$    2,231

SUPPLEMENTAL CASH FLOW INFORMATION

(in millions)

Three Months Ended

December 31,

Stock Repurchases under Board of Directors' authorized stock repurchase program:

2025

2024

Number of shares repurchased

4.3

1.8

Remaining authorized balance as of December 31, 2025

$       1,918

Reconciliation of Free Cash Flow Non-GAAP Financial Measure

(in millions)

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2025

2024

2025

2024

Net cash provided by operating activities

$            858

$           920

$      2,883

$      2,124

Purchases of property and equipment

(77)

(83)

(288)

(297)

Proceeds from sale of property and equipment

—

—

70

—

Free cash flow

$            781

$           837

$      2,665

$      1,827