Cognizant Technology Solutions (CTSH) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached $5,481 million, up 4.5% year-over-year (4.1% in constant currency), led by double-digit growth in Financial Services and strong AI-driven demand.

• Operating margin expanded to 15.9% GAAP and 16.0% adjusted, with adjusted EPS up 4.6% to $1.37.

• Seven large deals signed, including three new clients, and trailing 12-month bookings rose 5% to $29.1 billion with a book-to-bill ratio of 1.3x.

• Major investments included $1.1 billion in Q2 share repurchases, $1.6 billion in H1, and the $634 million Astreya acquisition.

• Project Leap restructuring incurred $84 million in Q2 charges, with total expected costs of $230–$320 million and anticipated in-year savings.

Financial highlights

• Q2 2026 revenue: $5,481 million; net income: $636 million; adjusted EPS: $1.37.

• Adjusted operating margin: 16.0%, up 40 bps year-over-year.

• Free cash flow for Q2: $459 million; H1 2026: $657 million.

• Q2 share repurchases: 22.5 million shares for $1,153 million; $2.3 billion remains authorized.

• Cash and short-term investments at quarter-end: $1,051 million; total debt: $1,560 million.

Outlook and guidance

• Full-year 2026 revenue guidance: $22.04–$22.35 billion (4.4%–5.9% growth; 4.0%–5.5% in constant currency).

• Adjusted operating margin guidance: 16.0%–16.2% (20–40 bps expansion).

• Adjusted diluted EPS guidance raised to $5.70–$5.82 (8%–10% growth).

• Q3 2026 revenue expected at $5.60–$5.68 billion (3.4%–4.9% growth; 3.8%–5.3% in constant currency).

• Free cash flow conversion guidance remains at 90%–100% of net income.