Cognizant lowered the upper end of its full-year 2026 revenue growth forecast after reporting a 7% year-on-year decline in bookings for the September quarter, overshadowing a revenue performance that came in ahead of Wall Street estimates.
The IT services company now expects constant-currency revenue growth of 4% to 4.4% for 2026, compared with its earlier forecast range of 4% to 5.5%. The revision reduces the upper end of its guidance by 110 basis points.
For the December quarter, Cognizant expects revenue to range between $5.49 billion and $5.57 billion, translating into constant-currency growth of 3.2% to 4.7%.
Shares of Cognizant fell 8.65% in pre-market trading on the Nasdaq to $60.62 on October 29, despite the company reporting better-than-expected revenue for the third quarter.
Revenue for the September quarter rose 4.6% year-on-year to $5.66 billion, or 4.8% in constant currency. This was above the Wall Street consensus estimate of $5.65 billion and also exceeded the midpoint of the company’s own guidance range. Growth was supported by a double-digit increase in the financial services business.
The company’s operating margin declined 60 basis points from a year earlier to 15.4%. However, adjusted operating margin improved 30 basis points to 16.3%.
On the earnings front, GAAP diluted earnings per share (EPS) increased to $1.39 from $0.56 in the year-ago quarter, a rise of 148%. Adjusted EPS grew 7.2% year-on-year to $1.49.
Bookings decline, large deal wins
Cognizant’s bookings fell 7% year-on-year during the quarter. However, bookings over the trailing 12 months rose 4% to $28.7 billion.
The company signed three large deals during the September quarter, each carrying a total contract value of at least $100 million. Its trailing 12-month book-to-bill ratio stood at approximately 1.3 times.
Cognizant added 3,200 employees during the quarter, taking its total workforce to 359,900 as of September 30, 2026. Its headcount was 10,100 higher than a year earlier.
Voluntary attrition among technology services employees eased to 12.6% from 13% in the preceding quarter.
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