Cognizant Posts 4.5% Q2 Revenue Growth as AI-Led Deal Momentum Begins to Cool

Cognizant Technology Solutions posted a 4.5% year-on-year rise in revenue for the June quarter, even as the IT services major leaned harder into its ‘AI builder’ strategy, striking new deals around Anthropic's Claude, Google's Gemini, and OpenAI's GPT-5.5 while flagging a sharp slowdown in fresh bookings. The Nasdaq-listed company , which counts India as its largest talent base , reported revenue of $5.48 billion for the quarter ended June 30, 2026, up from $5.24 billion a year earlier. Growth in constant currency terms was 4.1%, decelerating from the 7.2% pace clocked in the same quarter last year, which can be considered as a sign that the initial AI-led deal momentum is beginning to normalise. Bookings Cool Off Cognizant’s quarterly bookings fell 6% year-on-year, even though trailing twelve-month bookings rose 5% to $29.1 billion, translating into a book-to-bill ratio of roughly 1.3x. The company signed seven large deals (contracts worth $100 million or more) during the quarter. “Our organic revenue growth momentum continued in the second quarter and was at the high end of our expectations,” Chief Executive Officer Ravi Kumar S said in a statement. "As organisations shift from AI experimentation to enterprise-scale execution, we believe the market opportunity ahead is larger than ever," he said, adding that the company was helping clients "close the AI velocity gap" by combining industry expertise with engineering and data modernisation capabilities. Financial Services Carries the Quarter Financial Services, Cognizant's largest and most mature vertical, was the standout performer with 12% year-on-year growth (11.7% in constant currency). Health Sciences grew a modest 1.4%, Products and Resources rose 1.2%, and Communications, Media and Technology grew 1.5%. North America, which accounts for more than 75% of revenue, grew 5.5%, while Europe grew a slower 2.5% and Rest of World contracted 1.2%. Margins Hold Up Despite Restructuring Costs Cognizant’s operating margin came in at 15.9%, up 30 basis points year-on-year, while adjusted operating margin expanded 40 basis points to 16.0%. The quarter absorbed $84 million in restructuring charges under Project Leap , the company's ongoing efficiency programme, which were largely offset by an $81 million one-time benefit from the reversal of a legacy India Provident Fund liability following recent labour law changes. AI Partnerships Take Centre Stage Cognizant's AI narrative extended well beyond internal tooling in the quarter. The company is now working with travel technology firm Travelport to embed Claude into software development workflows spanning airlines, hotels, and travel agencies. Separately, Cognizant has also become one of a small number of Global Premier Partners in Anthropic's Claude Partner Network, and is training what it calls a " Frontier Certified " workforce. The company also expanded ties with Google Cloud around Gemini Enterprise, and said it would apply OpenAI's GPT-5.5 within its cybersecurity practice as part of the "OpenAI Daybreak Cyber Partner Program," aimed at speeding up the process of finding and fixing security vulnerabilities. Capital Returns Stay Aggressive The company repurchased 22.5 million shares for $1,153 million during the quarter, including through a previously announced $500 million accelerated buyback programme, leaving $2.3 billion still authorised for future repurchases. In July, it also declared a quarterly dividend of $0.33 per share. During the quarter, Cognizant also closed its $634 million acquisition of Astreya , an AI-focused IT managed services provider, funding part of the deal through a $1 billion drawdown on its revolving credit facility. Headcount and Attrition Total headcount stood at 356,700 as of June 30, down 900 sequentially but up 12,900 from a year earlier. Voluntary attrition in technology services rose to 13.0% on a trailing-12-month basis, up from 12.3% in the previous quarter. Guidance Nudged Higher on Profitability Cognizant revised its full-year 2026 constant-currency revenue growth guidance to a range of 4.0–5.5%, while keeping its adjusted operating margin guidance unchanged at 16.0–16.2%. For the September quarter, the company guided for revenue of $5.60–5.68 billion, implying year-on-year growth of 3.4–4.9%.