Cognizant Q1 net profit slides marginally to USD 662 million revenue grows 5.8 pc

New Delhi, Apr 29 (PTI) US-based IT major Cognizant on Wednesday reported a marginal decline in its consolidated net income to USD 662 million in the first quarter ended March 2026, compared to USD 663 million in the corresponding period last year.
     The Teaneck, New Jersey-headquartered firm follows the January-December financial year.
     Despite the flat net income, Cognizant — which has a vast majority of its workforce based in India — posted a 5.8 per cent year-on-year increase in its first-quarter revenue, reaching USD 5.413 million, and landing in the upper half of the company's guidance range.
     Providing its business outlook, Cognizant forecast its second-quarter 2026 revenue to be in the range of USD 5.45 billion to USD 5.52 billion, translating to a year-on-year growth of 3.8 per cent to 5.3 per cent.
     For the full year 2026, the company maintained its revenue growth guidance in the range of 4.8 per cent to 7.3 per cent, projecting total revenues between USD 22.11 billion and USD 22.64 billion.
     First-quarter bookings grew 21 per cent year-on-year, driving trailing 12-month bookings to USD 29.6 billion (an 11 per cent increase).
     "In a complex macroeconomic environment, we delivered first-quarter revenue growth in the upper half of our guidance range, with sustained bookings momentum and financial services again leading performance. We signed seven large deals in the quarter and delivered over 70 per cent large deal total contract value growth year-over-year.
     "We believe our AI builder strategy, deep industry expertise and scaled partnership ecosystem uniquely position us to bridge the 'AI Velocity Gap' by helping clients convert their significant AI investments into tangible business outcomes," said Ravi Kumar S, Chief Executive Officer.
     The quarter's performance was anchored by the signing of seven large deals with a total contract value of USD 100 million or greater, including one mega deal exceeding USD 500 million.
     The company announced "Project Leap", a transformation programme aimed at optimising its operating model and funding AI investments. The initiative is expected to generate in-year savings of USD 200 million to USD 300 million in 2026, Cognizant said in a statement.
     In connection with this, Cognizant expects to record costs of USD 230 million to USD 320 million, primarily related to employee severance and personnel costs.
     Management declined to specify the exact number of employees who will be impacted by the restructuring.
     Despite the restructuring, Cognizant plans to hire more than 20,000 fresh college graduates in 2026.
     Total headcount at the end of Q1 2026 stood at 357,600, marking an increase of 6,000 employees from December 2025.
     On an India listing, CFO Jatin Dalal said the company is actively evaluating and has made progress; however, he refrained from giving definite details.
     During the quarter under review, Cognizant repurchased 6.3 million shares for USD 427 million and declared a quarterly cash dividend of USD 0.33 per share.
     Cognizant also announced that it will acquire San Jose-based Astreya, an AI-first IT managed services and solutions provider, to expand its AI builder technology stack with production-grade AI operations capabilities. It did not disclose the quantum or value of the acquisition.

(This story has not been edited by THE WEEK and is auto-generated from PTI)