Cognizant Technology Solutions Corporation

Q2 revenue increased 4.1% year over year in constant currency to $5.5 billion. Adjusted operating margin was 16% excluding approximately $84 million of Project LEAP costs and an $81 million one-time benefit from the India labor code-related liability reversal, and adjusted EPS was $1.37, up 5% year over year. Free cash flow was $459 million in the quarter and $652 million year to date; cash and short-term investments ended at $1.1 billion. For Q3, Cognizant expects revenue growth of 3.8% to 5.3% year over year in constant currency, including about 200 basis points from acquisitions. Full-year constant-currency revenue guidance was raised to 4% to 5.5%, adjusted operating margin guidance remains 16% to 16.2%, and EPS guidance increased to $5.70 to $5.82.

Ravi Kumar framed the quarter as validation of Cognizant’s shift toward becoming an AI builder rather than a traditional systems integrator. He emphasized four strategic shifts: using AI to build proprietary solutions, reworking the talent model around Frontier-certified engineers and operators, moving economics from labor to outcomes, and expanding platform-led work like TriZetto and other industry offerings. His tone was confident and expansive, but he also acknowledged that demand remains cautious in the near term and that AI value realization at enterprise clients is still early.

Jatin Dalal focused on execution, margin discipline, and capital return. He cited 4.1% constant-currency revenue growth to $5.5 billion, 16% adjusted operating margin excluding Project LEAP and the India labor code benefit, and adjusted EPS of $1.37, up 5% year over year; he also noted free cash flow of $459 million, year-to-date repurchases and dividends of $1.9 billion, and cash plus short-term investments of $1.1 billion. He said the company repurchased $1.1 billion of stock in Q2, has deployed $1.3 billion on AI-builder-aligned acquisitions, and now expects about $460 million diluted shares, with higher interest expense from the $1 billion revolver draw used for Astreya and share repurchases.

Analysts focused on bookings momentum, the second-half ramp from large deals, and whether Q4 would be flatter sequentially; management said bookings are healthy, financial services is running hot, and several large deals are moving from transition to billable volumes, with Q4 assumed to be seasonally better than usual. Questions also centered on BPO and AI token economics, where Ravi said clients are moving from experimentation to optimization, and that Cognizant is seeing demand for help with context, model routing, learning loops, and outcome-based AI operations. Another thread covered Project LEAP and headcount: Jatin said headcount should stay range-bound, about 20,000 recent college graduates are planned by year-end, and LEAP costs of about $84 million in Q2 should be spread through Q3 and Q4 with benefits next year.