Cognizant Lowers 2026 Revenue Growth Forecast Amid Economic Headwinds

Cognizant has revised its annual revenue growth guidance downward for the second time in 2026, citing persistent macroeconomic instability and dampened discretionary spending. The IT services provider, which reports on a calendar year basis, now projects revenue growth between 4% and 4.4% in constant currency, a reduction from the 4% to 5.5% range provided in July and the 4% to 6.5% initial forecast issued at the start of the year.

Financial Performance Overview

For the third quarter ending September 30, Cognizant reported the following highlights:

• Revenue: $5.7 billion, representing a 4.6% increase.
• Net Profit: $627 million, up from $274 million in the same period last year, primarily influenced by reduced income tax provisions.
• Constant Currency Growth: 4.8%.

Challenges and Strategic Outlook

CEO Ravi Kumar indicated that while Artificial Intelligence (AI) serves as a long-term growth driver, the anticipated surge in discretionary spending required to unlock large-scale projects has not materialized. Rising oil prices, persistent inflation, and elevated interest rates have contributed to a complex operating environment.

Concerns have emerged regarding a decline in total contract value (TCV) for the second consecutive quarter. Third-quarter bookings fell by 7% compared to the previous year, despite a 4% increase in bookings on a trailing-12-month basis. The company observed that recent large deal activity has been dominated by renewals rather than new, transformative projects.

Conversely, the financial services sector remains a bright spot, delivering 11.4% growth and marking its third consecutive quarter of double-digit expansion. The company’s headcount reached 359,900, with a 12.6% attrition rate reported.