Cognizant Reports 8.1% Revenue Growth to $5.245 Billion in Q2 2025

Cognizant Technology Solutions Corporation reported a significant increase in its financial performance for the second quarter of 2025, with revenues reaching $5.245 billion, up 8.1% from $4.850 billion in the same quarter of 2024. This growth was bolstered by the recent acquisition of Belcan, which contributed approximately 400 basis points to revenue growth. The company's net income also rose to $645 million, a 14% increase from $566 million year-over-year, while diluted earnings per share (EPS) improved to $1.31, up from $1.14.

In terms of operational efficiency, Cognizant's operating margin improved to 15.6%, compared to 14.6% in the prior year, driven by net savings from its NextGen program and operational efficiencies. The company reported a notable increase in income from operations, which rose to $817 million, reflecting a 15.4% increase from the previous year. The adjusted operating margin also saw an increase, reaching 15.6% for the quarter, with no unusual items affecting the calculation.

Cognizant's strategic developments included the successful integration of Belcan, which has enhanced its capabilities in the Products and Resources segment. The company reported strong performance in its Financial Services and Health Sciences segments, although the Products and Resources segment faced challenges due to reduced demand for discretionary work. The total employee headcount increased to approximately 343,800, up from 336,300 a year earlier, indicating a focus on expanding its workforce to support growth.

Geographically, revenue growth was driven by North America, which accounted for a significant portion of total revenues, alongside contributions from the United Kingdom and Continental Europe. The company also reported a Days Sales Outstanding (DSO) of 83 days, an increase from 78 days at the end of 2024, indicating a slight decline in receivables management efficiency. Cognizant's outlook remains positive, with expectations for continued demand for AI-driven services and solutions, although the company acknowledges potential challenges from macroeconomic factors and evolving client needs.

Looking ahead, Cognizant anticipates that the recent enactment of the One Big Beautiful Bill Act (OBBBA) will impact its deferred tax assets related to research and experimentation costs, potentially resulting in a one-time, non-cash tax expense of approximately $400 million in the third quarter of 2025. Despite this, the company projects a reduction in cash taxes by $200 million for the year, reflecting its ongoing commitment to leveraging AI technologies and enhancing operational efficiencies to drive future growth.