Cognizant Q1 Revenue Rises 6%, AI Push Gains Momentum

• Cognizant reported Q1 revenue of $5.4 billion, up 6% year-on-year, with stable margins and strong deals

• Its AI strategy is accelerating, with 5,000+ engagements and a $600 million acquisition planned

• Despite steady performance, concerns over IT spending slowdown continue to cloud the projections

IT services firm Cognizant Technology Solutions reported revenue in the upper half of its guidance range for the first quarter of 2026. The company posted revenue of $5.4 billion, marking a 6% year-on-year (YoY) increase, or 3.9% growth in constant currency terms. Operating margin stood at 15.6%, flat on an adjusted basis but down 110 basis points YoY.

Cognizant’s bookings performance remained solid during the quarter. Trailing twelve-month bookings rose 11% YoY to $29.6 billion, resulting in a book-to-bill ratio of 1.4x. Quarterly bookings also increased 21% YoY, supported by strong large-deal activity.

The company signed seven large deals, including one mega deal, with total contract value from large deals rising over 70% YoY.

Chief Executive Ravi Kumar S said that the company’s AI-focused strategy is beginning to show results, with more than 5,000 AI engagements currently underway. He also noted that nearly 40% of code at Cognizant is now AI-assisted, reflecting deeper integration of artificial intelligence across operations.

$600 Mn Acquisition Boost

Cognizant has agreed to acquire Astreya in a deal valued at around $600 million. The acquisition is aimed at strengthening its AI infrastructure and data centre capabilities as enterprises increase investments in next-generation technology.

The deal is expected to close in the second quarter of 2026, subject to regulatory approvals.

Segment Performance and Geography

Among business segments, Financial Services remained the strongest performer, growing 12.4% YoY (10.2% in constant currency). Products and Resources grew 3.4%, while Communications, Media and Technology rose 8.1%. Health Sciences remained largely flat at 0.5% growth.

Geographically, North America grew 5.1%, Europe rose 3.5%, and the rest of the world expanded 9.4%.

Workforce and Projections

The company’s headcount rose to 357,600 employees, up by 6,000 sequentially and more than 21,000 YoY, while attrition remained stable at 12.3%.

For Q2 FY26, Cognizant expects revenue growth of 3.8% to 5.3%, or 3.2% to 4.7% in constant currency. For the full year 2026, it has guided revenue growth of 4.8% to 7.3%, or 4% to 6.5% in constant currency, with adjusted operating margin expected at 16% to 16.2%.

Despite steady execution, the company—currently valued at around $26 billion—has seen its stock fall over a third this year amid concerns over weak IT demand and AI-driven pricing pressures.