Cognizant Technology Solutions (CTSH) Q4 2025 earnings summary

Executive summary

• Achieved 7.0% year-over-year revenue growth for FY 2025, reaching $21.1 billion, surpassing guidance, with strong organic growth, acquisitions, and large deal momentum, especially in North America and Financial Services.

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

• Bookings for the trailing 12 months rose 5% to $28.4 billion, with 28 large deals signed in 2025, including 12 in Q4 and a 60% year-over-year increase in large deal TCV.

• AI-led transformation and productivity gains were central, with over 4,000 AI engagements and 30%+ of developer effort now AI-assisted.

• Returned $2 billion to shareholders through dividends and share repurchases, and completed the 3Cloud and Belcan acquisitions to strengthen Azure, AI, and engineering capabilities.

Financial highlights

• Q4 2025 revenue was $5.33 billion, up 4.9% year-over-year, and full-year revenue was $21.1 billion, up 7.0% year-over-year.

• Adjusted operating margin for Q4 was 16%, up 30 basis points year-over-year; full-year adjusted margin was 15.8%.

• Adjusted diluted EPS for Q4 was $1.35, up 12% year-over-year; full-year adjusted EPS was $5.28, up 11%.

• Free cash flow for the year was $2.67 billion, exceeding net income and with conversion over 100%.

• Acquisition of Belcan contributed 260 basis points to FY 2025 revenue growth.

Outlook and guidance

• FY 2026 revenue guidance: $22.14–$22.66 billion, 4.0%–7.4% year-over-year growth in constant currency, with 150 basis points from M&A.

• Adjusted operating margin guidance for 2026 is 15.9%–16.1%, with free cash flow conversion of 90%–100% of net income.

• Adjusted diluted EPS guidance for 2026 is $5.56–$5.70, representing 5%–8% growth.

• Plan to return $1.6 billion to shareholders in 2026, with $1 billion in share repurchases.

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