Cognizant Outpaces Indian IT Giants with Strong 2025 Performance
Cognizant Technology Solutions Corporation has emerged as the fastest-growing major Indian-heritage IT services firm in calendar year 2025, reporting an impressive 6.95% dollar revenue expansion to reach $21.12 billion. This represents the company's strongest performance since 2021 and marks a significant turnaround from 2023, when it experienced a revenue decline.
Exceeding Expectations and Guidance
The Teaneck, New Jersey-headquartered company not only surpassed a Bloomberg poll of 26 analysts who had projected revenue of $21.09 billion but also exceeded its own guidance of 6.6-6.9% full-year growth set in October 2025. Approximately one-third of this growth—higher than the 5.1% reported by HCL Technologies Ltd—came from the sale of products and resources, which constitute about a quarter of Cognizant's total revenue.
Outperforming Indian Peers
Cognizant's performance notably trumped three of its largest Indian competitors:
- Infosys Ltd ended 2025 with revenue of $19.85 billion, up 3.85% year-on-year
- Tata Consultancy Services Ltd reported revenue of $29.86 billion, down 0.72% on-year
- Wipro Ltd recorded revenue of $10.42 billion, down 1.41% on-year
It's important to note that Cognizant follows a January-December financial calendar, while Indian IT services companies typically follow an April-March fiscal year.
Mega Deals Fuel Growth
The company's robust growth can be partially attributed to the mega deals it secured in 2025. Cognizant signed three contracts valued at more than a billion dollars last year, including a recent $1 billion IT modernization contract with Swiss pharmaceutical giant Novartis AG.
Management's Cautious Optimism
Despite the strong results, Cognizant's management expressed measured views on the demand environment. "The environment remains complex. Traditional discretionary spending cycles continue to evolve as clients re-baseline expectations for productivity gains. However, we view this as an opportunity to capture wallet share in large deals and help clients reinvest savings into innovation," stated Jatin Dalal, Cognizant's chief financial officer, during the post-earnings analyst call on February 4.
This sentiment aligns with larger peer Accenture Plc, whose CEO Julie Sweet noted during a December 18 analyst call that "the pace of overall spending and discretionary spending in our market is at the same level we have seen over the last year."
Future Outlook and Strategic Moves
Cognizant remains confident about future growth, projecting revenue between $22.14 billion and $22.66 billion for 2026, translating to an annual growth rate of 4.9-7.4%. The company expects 150 basis points (1.5%) of this growth to come from acquisitions, with approximately one-third from future acquisitions.
This optimistic outlook comes amid plans for an India stock exchange listing. While management confirmed progress on these plans, they remained cautious about specifics. "At this juncture, we are still thinking through the decision, the regulatory framework, and, therefore, the decision on the primary offering and secondary listing," explained Dalal.
AI and Profitability Highlights
Cognizant refrained from disclosing specific revenue figures from Generative AI but emphasized its potential to drive non-essential spending. "If the AI advances have to trickle, drift to the businesses, I would actually believe that that is actually going to support the discretionary to come back. It's going to be a catalyst," said S. Ravi Kumar, Cognizant's chief executive.
The company's profitability showed significant improvement, jumping 140 basis points year-on-year to 16.1%. However, net profit declined slightly by 0.45% to $2.23 billion, raising some concerns.
Employee Growth and Market Response
The Indian-heritage company—which employs more than two-thirds of its workforce in India—ended the December quarter with 351,600 employees, representing an increase of 14,800 from the previous year and 1,800 from the preceding quarter. This headcount growth is particularly notable as peer TCS reduced its workforce by nearly 20,000 during the same period.
Shareholders responded positively to the results, with Cognizant's shares rising 2.71% to $76.52 on the Nasdaq during pre-market trading hours. At least one industry expert praised the company's performance. "Cognizant's growth this year is less about a sudden demand rebound and more about execution catching up with opportunity," commented Phil Fersht, chief executive of HFS Research.
