Cognizant Forecasts Weak Quarterly Revenue Amid Cautious Client Spending
The company said clients are delaying discretionary projects as AI spending shifts toward data center infrastructure and software demand stays soft.
- Cognizant Technology forecast third-quarter revenue between $5.60 billion and $5.68 billion on Wednesday, falling short of analysts' average estimate of $5.70 billion amid cautious client spending.
- Clients are navigating a complex macro environment with caution on large investments, prioritizing data center infrastructure over software while struggling to translate AI investments into measurable business outcomes.
- For the second quarter, Cognizant reported revenue of $5.48 billion, a 4.5% year-on-year increase, with Financial Services growing 12% to $1.73 billion and Health Sciences rising 1.4% to $1.57 billion.
- Shares of Cognizant fell 3% in premarket trading following the forecast, while Chief Executive Officer Ravi Kumar S stated the company is "shifting our economics from labor to outcomes" through AI integration.
- Kumar estimates the $1 trillion systems integration market could expand into a $5-6 trillion enterprise operations market, with Cognizant expanding partnerships with Google Cloud, OpenAI, and Anthropic to capture emerging AI opportunities.
12 Articles
12 Articles
Cognizant lifts annual profit forecast on strong financial services growth
Cognizant Technology on Wednesday raised its annual adjusted profit forecast after recording strong growth in its financial services business and continued operating margin expansion in the second quarter, even as enterprises remained cautious about discretionary spending.
Cognizant sees Q2 revenue rise 4.5%, raises FY26 EPS outlook
Cognizant reported a 4.5% year-on-year increase in second-quarter revenue to $5.48 billion while raising its full-year adjusted earnings per share (EPS) guidance after posting growth led by its financial services business
Cognizant trims FY26 outlook on cautious discretionary tech spending
The guidance cut suggests the company expects discretionary technology spending to remain under pressure as enterprises prioritise AI-led productivity, vendor consolidation and cost optimisation over large-scale digital transformation projects
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