Cognizant Technology Solutions Stock Earnings Reports

Cognizant delivered a strong Q3 2025: revenue of $5.4B (up 6.5% YoY CC), five consecutive quarters of organic YoY growth, and adjusted operating margin expansion (70 bps YoY). All four operating segments grew organically. Large-deal momentum continued (six Q3 large deals; 16 YTD), trailing-12-month bookings +5% YoY, and large-deal TCV up ~40% YTD. Management emphasized its strategic pivot to become an "AI builder" across three vectors—AI-led productivity, industrializing AI, and agentifying the enterprise—pointing to 3,500 early AI engagements, platform/IP deployments (Flowsource, Agent Foundry, Neuro AI), partnerships with Anthropic and Google Gemini Enterprise, and >1,500 agents developed. Productivity and platform adoption are already measurable: ~30% of internal code was AI-generated in Q3 and revenue per employee rose ~8% YoY (margin per employee +10%). Financial highlights: adjusted EPS up ~11% (adjusted EPS $1.39 ex-onetime tax), Q3 free cash flow $1.2B (170% of adjusted net income), ~$1.5B returned to shareholders YTD and on track for $2B in 2025, ending cash & short-term investments $2.4B (net cash $1.8B). Management increased full-year revenue and margin guidance (FY revenue now +6% to +6.3% CC, adjusted operating margin ~15.7%, EPS $5.22–$5.26) and reiterated strong capital allocation flexibility and active M&A pipeline. Key risks/caveats called out: one-time noncash tax charge ($390M) impacting GAAP, geopolitical/tariff uncertainty, some lumpiness in bookings, and expected seasonality in Q4.