Nasdaq-listed Cognizant trims top end of 2026 revenue outlook logs Q3 growth of 4.8 pc

New Delhi, Oct 29 (PTI) Nasdaq-listed Cognizant Technology Solutions on Thursday narrowed its full-year 2026 revenue forecast by lowering the top end of its guidance range, while reporting 4.8 per cent third-quarter revenue growth in constant currency terms to USD 5.66 billion.

    The New Jersey-headquartered IT company now expects 2026 constant-currency revenue growth of 4 per cent to 4.4 per cent, down from 4 to 5.5 per cent in July, and of 4 to 6.5 per cent at the start of the year. Put simply, constant currency growth removes exchange rate effects to show true underlying growth.

    On the cut in 2026 guidance, Cognizant management in the earnings call said that in two sectors, a mix of macro factors - policy uncertainty, oil prices, and supply-chain disruptions are causing decision delays with a customer set.

    Chief Financial Officer Jatin Dalal told reporters the new range sits within the original forecast and would still make Cognizant among the fastest-growing of the top 10 IT services firms. He said two sectors were seeing lower momentum than expected.

     Cognizant's third-quarter revenue stood at USD 5.7 billion, rising 4.6 per cent year-over-year or 4.8 per cent seen in constant currency terms. On a trailing-twelve-month basis, bookings increased 4 per cent year-over-year to USD 28.7 billion, which represented a 'book-to-bill' of approximately 1.3 times. Bookings in the third quarter declined 7 per cent year-over-year. Third quarter bookings included three large deals, which are deals with total contract value of USD 100 million or greater, the company said in its earnings release.

    The company pointed to healthcare, where regulatory uncertainty over Medicaid and Medicare funding has hit enrollments, and to retail and consumer goods, which are being squeezed by high interest rates and tariffs.

     "AI is a tailwind for sure," Cognizant CEO Ravi Kumar S said, adding that "it is progressively moving from productivity to building new things and doing new services which we could not do in the past".

     Asked about the US Labour Department's action against Cognizant's green card (PERM) filings, the management said it did not expect any impact on US talent strategy or operations.

    Cognizant has about 32,000 employees in the US, most of them local hires, and plans to keep recruiting US graduates. The company continues to ramp up campus presence in the US.

    On a possible Indian listing, Dalal said the company is engaged with advisors and regulators.

     "...and we are at a point where we are awaiting the changes to the current framework, which will be put in for a public comment period. Once we have visibility of that final framework, which we think should be in a few weeks to a couple of months' timeframe, we should be able to take a final decision on the matter," Dalal said.

     He added: "We are quite pleased and happy with the progress that we have seen over the last few months, and we remain optimistic about what it should entail. But at this juncture, we would wait and look at the final regulations and then take a decision."

    Asked about media reports of a planned investment in an Indian AI startup, the company declined to comment but said Sarvam is "doing terrific work on frontier AI" and is "a great company to partner with".

     Cognizant has not decided on wage hikes, but promotions will be handled in the fourth quarter and early 2027.

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