Cognizant Technology Solutions Corporation reported a revenue increase of 7.4% for the third quarter of 2025, reaching $5.415 billion, compared to $5.044 billion in the same period last year. This growth was attributed to strong performance across various segments, particularly in North America, and was bolstered by the recent acquisition of Belcan, which contributed approximately 250 basis points to revenue growth. The company's income from operations also rose to $866 million, reflecting a 17.3% increase from $738 million in Q3 2024, resulting in an operating margin of 16.0%, up from 14.6% a year earlier.
Despite the positive revenue and operating income figures, Cognizant's net income fell to $274 million, a decrease of 52.9% from $582 million in Q3 2024. This decline was primarily due to a one-time, non-cash income tax expense of $390 million related to the enactment of the One Big Beautiful Bill Act (OBBBA), which repealed the requirement to capitalize U.S. research and experimentation costs. The effective income tax rate for the quarter was significantly impacted, rising to 69.1% compared to 22.7% in the prior year.
Cognizant's operational metrics showed a slight increase in employee headcount, finishing the quarter with approximately 349,800 employees, up from 340,100 a year earlier. The company reported a Days Sales Outstanding (DSO) of 82 days, an increase from 78 days at the end of 2024. The firm continues to focus on enhancing its AI capabilities and integrating these technologies into its service offerings, which are expected to drive future growth.
Looking ahead, Cognizant anticipates that clients will increasingly demand services that support their transformation into AI-ready and technology-driven businesses. The company plans to invest significantly in AI capabilities to meet these evolving client needs. However, it also acknowledges potential challenges, including the impact of macroeconomic conditions and regulatory changes on client demand for services. Cognizant remains committed to navigating these challenges while pursuing growth opportunities in the rapidly changing technology landscape.
About COGNIZANT TECHNOLOGY SOLUTIONS CORP
Cognizant is a global professional services company specializing in digital transformation, IT consulting, application development, systems integration, automation, and AI solutions. It serves industries such as healthcare, financial services, manufacturing, and media, delivering tailored, industry-specific services through a global delivery model. Its core value lies in helping clients modernize technology, optimize processes, and create innovative, data-driven customer experiences.
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