Cognizant Reports 8% Revenue Growth in Q2, Yet to Decide on Salary Hike

Nasdaq-listed Cognizant has reported an 8.1 percent year-on-year increase in revenue to $5.25 billion for the quarter ending June 30, 2025—fiscal second quarter for the company, which follows a January to December calendar. In constant currency terms, revenue rose by 7.2% YoY, much higher than the firm's earlier guidance.

Net profit also grew 14% on-year to $645 million. The New Jersey-headquartered firm has now revised its 2025 constant currency revenue growth guidance to 4–6%, up from 3.5–6% announced during the first quarter.

In comparison, Indian IT peers Infosys Ltd and HCLTech Ltd reported revenue growth of 4.46% and 1.34%, reaching $4.94 billion and $3.55 billion respectively. Tata Consultancy Services Ltd (TCS) posted a 0.59% sequential decline to $7.42 billion—marking its third consecutive quarterly drop. Despite ongoing uncertainty linked to US President Donald Trump’s evolving tariff stance, Cognizant’s management sounded more upbeat than its Indian counterparts, pointing to increased client demand for innovation-driven projects amid a gradually improving macroeconomic outlook.

"In the second quarter, we delivered a healthy combination of wins in AI-efficiency-led large deals and innovation-led projects," said CEO Ravi Kumar Singisetti, chief executive of Cognizant, during the company’s post-earnings call with analysts. He added that most large deals and momentum were related to productivity, consolidation, and AI-led productivity.

"Our investments in talent, platforms and AI infrastructure drove our fourth-straight quarter of organic year-over-year revenue growth, another quarter of margin expansion and helped us accelerate bookings, including two $1 billion deals. In today’s dynamic and competitive environment, we are differentiating ourselves by moving with agility and building IP at the edge, leveraging our interdisciplinary capabilities across domain, technology and operations to address new client growth priorities and deliver agentification at scale," Kumar S noted.

“The demand environment was largely unchanged in the quarter. While visibility is still limited, the ramp of large deals more than offset discretionary spending pressure,” said Jatin Dalal, chief financial officer of Cognizant, during the company’s post-earnings interaction with analysts on Thursday.

Segment-wise, Cognizant's Products and Resources grew 16%, aided significantly by the Belcan acquisition, contributing about 4 percentage points to YoY growth. Health Sciences and Financial Services posted steady growth of 3.1% and 6.2% respectively, while Communications, Media & Technology grew by 6.9%.

Revenue by geography stood at $1.6 billion from North America, showing a 6% year-on-year growth, and $1.3 billion from Europe.

Cognizant ended the quarter with 343,800 employees, a net addition of 7,500 from the previous quarter, and recorded a voluntary attrition rate in tech services of 15.2% (trailing 12 months).

No Call on Wage Hike

During the post-earnings press conference, Chief Financial Officer (CFO) Jatin Dalal said that the company is yet to decide the timeline of wage hikes for its employees amid macroeconomic uncertainty, following peers like Tata Consultancy Services (TCS), Wipro, HCLTech and Persistent Systems.

Infosys is the only Tier-I IT player to have hiked wages in FY26.

“Given the macro environment at play and the uncertainty around it, we have not yet taken a decision on salary increase. Our endeavour is to cover a vast majority of our employees during the second half of this year as and when we decide,” Dalal said as per Moneycontrol.

Though CEO Kumar S highlighted Cognizant's significant headcount addition.

"Headcount grew by 2% sequentially, led by the hiring of recent college graduates. We continue to prepare our workforce for an AI-led future. We are deepening our talent in emerging technologies… We are setting up a 21-acre learning site in Chennai that is expected to train freshers and experienced hires in advanced AI skills," Kumar said.