Cognizant Technology Solutions (CTSH) Q4 2025 earnings summary

Executive summary

• Achieved 7.0% year-over-year revenue growth for FY 2025, with 6.4% in constant currency, surpassing $21 billion and exceeding guidance, driven by organic growth and acquisitions.

• Adjusted operating margin reached 15.8%, up 50 basis points year-over-year, and adjusted EPS grew 11% to $5.28.

• Bookings for the trailing 12 months rose 5% to $28.4 billion, with 28 large deals signed in 2025, including 12 in Q4.

• AI builder strategy and acquisitions like Belcan and 3Cloud enhanced productivity and innovation, with over 4,000 AI engagements and 30%+ of developer effort AI-assisted.

• Returned $2 billion to shareholders in 2025 and entered 2026 with strong momentum and well-positioned for continued performance.

Financial highlights

• FY 2025 revenue was $21.1 billion, up from $19.7 billion in 2024, with Q4 revenue at $5.33 billion, up 4.9% year-over-year.

• Adjusted operating margin for the year was 15.8%, GAAP operating margin was 14.7%, and Q4 GAAP operating margin was 16.0%.

• Adjusted diluted EPS was $5.28 for the year (up 11%), with Q4 adjusted EPS at $1.35 (up 12% YoY).

• Operating cash flow for FY 2025 was $2.88 billion; free cash flow was $2.67 billion, over 100% of net income.

• Cash and short-term investments at year-end were $1.91 billion, net cash $1.34 billion.

Outlook and guidance

• FY 2026 revenue guidance: $22.14–$22.66 billion, 4.0%–7.4% year-over-year growth in constant currency.

• Adjusted operating margin expected at 15.9%–16.1%, with free cash flow conversion of 90%–100% of net income.

• Adjusted diluted EPS guidance of $5.56–$5.70, representing 5%–8% growth.

• $1.6 billion expected to be returned to shareholders in 2026, including $1 billion in share repurchases.

• Q1 2026 revenue expected between $5.36 and $5.44 billion, up 4.8% to 6.3% year-over-year.