Cognizant has projected its annual revenue for 2026 to surpass Wall Street estimates, signaling confidence in robust demand for its IT services as businesses increasingly incorporate artificial intelligence (AI) into their operational workflows. This optimistic forecast emerges against a backdrop of significant market turbulence, where software companies globally are experiencing a sharp decline in stock values, with many IT services and software firms dropping by up to 10%.
Market Context and AI Disruption Fears
The recent selloff in the IT sector has been largely triggered by concerns over AI-induced disruption, with analysts warning of potential existential challenges for the industry. This volatility was exacerbated by a new legal tool from Anthropic, highlighting the AI industry's aggressive expansion into sectors that promise lucrative enterprise revenue streams. Such developments have fueled investor anxiety, leading to heightened market fluctuations as stakeholders assess the long-term implications for traditional IT services.
Cognizant's Quarterly Performance Highlights
For the fourth quarter, Cognizant reported a revenue of $5.33 billion, exceeding analysts' expectations of $5.31 billion. The company's adjusted profit per share stood at $1.35, also beating the estimated $1.32. A key driver of this performance was the financial services segment, which saw a notable 10.5% growth to $1.59 billion, surpassing the anticipated $1.52 billion. This segment serves banking, capital markets, payments, and insurance companies, reflecting strong demand in these areas.
Additionally, the quarter was marked by the signing of a substantial $1 billion "mega deal," one of five such agreements secured throughout the year. Cognizant follows a January-December financial calendar, and during this period, the company benefited from enterprise clients prioritizing AI integration and automation as part of their cloud migration strategies.
Full-Year 2026 Outlook and Strategic Focus
Cognizant expects its full-year 2026 revenue to range between $22.14 billion and $22.66 billion, compared to the average analyst estimate of $22.06 billion, according to data compiled by LSEG. The company also forecasts an annual adjusted profit per share between $5.56 and $5.70, with the mid-point aligning closely with estimates of $5.62.
Leadership Insights and Future Plans
CEO Ravi Kumar emphasized the company's strategic focus on addressing the "AI velocity gap," which refers to the disparity between substantial AI infrastructure investments and the realization of business value for clients. He expressed gratitude to the over 350,000 employees, noting that 2025 was a pivotal year for Cognizant as it implemented its AI builder strategy and achieved significant milestones ahead of schedule.
Kumar highlighted that investments in talent, partnership ecosystems, and AI platforms have enabled Cognizant to secure 28 large deals in 2025, with total contract value (TCV) growing nearly 50% year-on-year. He asserted that the foundation built over the past three years positions the company well to sustain this momentum in the coming years.
Chief Financial Officer Jatin Dalal mentioned that Cognizant is still evaluating a primary offering and secondary listing in India, engaging in discussions with Indian regulators and financial and legal advisors to explore this opportunity.
Employee Growth and Organizational Strength
As of December 31, 2025, Cognizant's total employee count reached 351,600, reflecting an increase of 1,800 from September 30, 2025, and 14,800 from December 31, 2024. This growth underscores the company's expanding workforce and its commitment to scaling operations in line with market demands.
In summary, Cognizant's strong quarterly results and optimistic revenue forecast for 2026 demonstrate its resilience and strategic alignment with AI-driven trends, even as the broader IT sector navigates uncertainties and volatility. The company's focus on AI integration, coupled with robust financial performance, positions it as a key player in the evolving technology landscape.
