Bengaluru: Cognizant shares rose as much as 10.5% in early Nasdaq trading after the IT services company reported a steady second quarter, driven by strong growth in financial services and healthy deal wins, while trimming the upper end of its FY26 revenue growth guidance amid continued macroeconomic uncertainty.The Nasdaq-listed company reported June-quarter revenue of $5.5 billion, up 4.5% year-on-year, or 4.1% in constant currency, slightly ahead of market expectations. Operating margin expanded 30 basis points from a year earlier to 15.9%.For FY26, Cognizant now expects revenue of $22 billion-$22.3 billion, representing 4.4%-5.9% growth on a reported basis and 4%-5.5% growth in constant currency. The guidance includes about 150 basis points of revenue contribution from acquisitions.“The guidance reflects the reality of today,” CEO Ravi Kumar said on Wednesday. “The macros did not improve as we would have liked, with the wars continuing, the Middle East crisis, oil prices and inflation.” He said geopolitical tensions, elevated interest rates and persistent inflation continue to delay discretionary technology spending.Financial services remained the standout vertical, posting 12% year-on-year revenue growth, its second consecutive quarter of double-digit expansion.For the September quarter, Cognizant expects revenue of $5.60 billion-$5.68 billion, representing year-on-year growth of 3.4%-4.9%, or 3.8%-5.3% in constant currency, including an estimated 200 basis points of contribution from acquisitions.During the quarter, Cognizant signed seven large deals, including three new client logos, underscoring continued demand for AI-led transformation and digital engineering services.Kumar said bookings have steadily improved over the past two years, with growing momentum in medium-sized deals valued at $25 million-$100 million, largely driven by AI-related projects. He said future AI engagements are likely to be shorter in duration, focused on building new digital products and increasingly aimed at automating business operations rather than software development alone.Chief financial officer Jatin Dalal said Cognizant recorded $84 million in restructuring charges during the quarter, including employee severance costs, facility closures and software assets write-downs. He declined to comment on headcount reductions but said the restructuring is intended to position the company for long-term growth rather than simply cut costs.Dalal said Cognizant remains on track to hire around 20,000 fresh graduates this year.On AI adoption, Kumar said enterprises are moving beyond the initial excitement around generative AI and are becoming more disciplined about deployment. Companies are increasingly evaluating which models best suit different workloads, when advanced reasoning models are necessary, when open-weight models offer better economics, and how to optimise inference costs.
