Cognizant shares fall 10.6% premarket after revenue growth forecast is cut

Cognizant Technology Solutions Corporation (CTSH) said in a regulatory filing on Oct. 29, 2026, that third-quarter revenue rose 4.6% from a year earlier. Its adjusted diluted earnings per share rose 7.2%.

Shares fell 10.6% in premarket trading as of 7:15 a.m. ET, from a regular-session close of $66.36.

The company, which describes itself as an AI builder and technology services provider, reported revenue of $5.66 billion for the quarter ended Sept. 30. That was below the $5.76 billion consensus estimate compiled by Finnhub.

Adjusted diluted EPS of $1.49 was in line with the $1.50 consensus estimate compiled by Finnhub.

The company also lowered its 2026 constant currency revenue growth forecast to 4.0% to 4.4%, from the 4.0% to 5.5% range it gave in its July 29 results release.

Here's how the company did:

• Revenue: $5.66 billion vs. $5.42 billion a year earlier, below the $5.76 billion estimate
• Adjusted EPS: $1.49 vs. $1.39 a year earlier, in line with the $1.50 expected, according to Finnhub
• GAAP diluted EPS: $1.39 vs. 56 cents a year earlier

CEO Ravi Kumar S said: “We delivered third-quarter revenue above the midpoint of our guidance range, including another quarter of double-digit growth in Financial Services and our seventh consecutive quarter of year-over-year adjusted operating margin expansion.”

Guidance

The company now expects full-year 2026 revenue of $22.05 billion to $22.14 billion, growth of 4.5% to 4.9%, or 4.0% to 4.4% in constant currency.

It expects fourth-quarter revenue of $5.49 billion to $5.57 billion, growth of 3.0% to 4.5%.

The company expects a full-year 2026 adjusted operating margin of approximately 16.1%, up from the 16.0% to 16.2% range it gave in July.

It expects full-year 2026 adjusted diluted EPS of $5.72 to $5.79, growth of 8% to 10%. The July range was $5.70 to $5.82.

CFO Jatin Dalal said: “Adjusted EPS grew 7%, exceeding revenue growth both in the quarter and year-to-date.”

Segment results

Financial Services revenue was $1.77 billion, up 12.0% from a year earlier.

Communications, Media and Technology revenue was $939 million, up 10.5%.

Health Sciences revenue was $1.59 billion, down 1.1%. Products and Resources revenue was $1.37 billion, down 0.9%.

Revenue in North America was $4.26 billion, up 5.7%.

Costs and capital returns

The company said it now expects total costs of $180 million to $250 million under Project Leap, a program it introduced in the second quarter. It expects $140 million to $160 million of those costs in 2026, with the remainder through the first quarter of 2027.

It expects Project Leap to generate in-year savings of about $200 million in 2026. The company said those savings will be used primarily to fund investments.

Restructuring charges were $51 million in the quarter.

Total headcount was 359,900 as of Sept. 30, up 3,200 from June 30 and up 10,100 from a year earlier.

In the quarter, Cognizant repurchased 4.9 million shares for $258 million. It had $2.1 billion remaining under its share repurchase authorization as of Sept. 30.

The company declared a quarterly cash dividend of $0.33 per share, payable Nov. 25 to shareholders of record on Nov. 13.