$CTSH · COGNIZANT TECHNOLOGY SOLUTIONS CORP
Cognizant reported Q3 2026 results with revenue of $5.664B (+4.6% YoY), GAAP EPS of $1.39, and adjusted EPS of $1.49 (+7.2% YoY). Adjusted operating margin expanded 30 bps to 16.3%. Full-year 2026 constant-currency revenue growth guidance was revised to 4.0%-4.4%, with Q4 revenue guided to $5.49B-$5.57B. Full-year adjusted EPS guidance is $5.72-$5.79.
- Q3 revenue of $5.664B grew 4.6% YoY (4.8% constant currency), above the midpoint of guidance.
- GAAP diluted EPS of $1.39 surged 148% YoY, but Q3 2025 included a one-time $390M non-cash tax charge ($0.80/share).
- Adjusted diluted EPS of $1.49 rose 7.2% YoY; adjusted operating margin expanded 30 bps to 16.3%.
- Full-year 2026 constant-currency revenue growth guidance revised to 4.0%-4.4%, implying Q4 revenue of $5.49B-$5.57B.
- Trailing 12-month bookings of $28.7B rose 4% YoY, but Q3 bookings declined 7% YoY.
Extended-hours trading shows CTSH at $61.00, down 8.08% from the regular-session close of $66.36. The after-hours selloff suggests the market is reacting negatively to the Q4 revenue guidance midpoint (~$5.53B) and the full-year constant-currency growth revision to 4.0%-4.4%, which may signal deceleration.
Despite a headline beat, the 8% after-hours plunge signals the market is punishing the guidance cut and Q3 bookings decline, raising questions about the durability of Cognizant's growth trajectory.
Cognizant's 4.6% revenue growth trails Accenture's recent print, and the 7% Q3 bookings decline contrasts with peer commentary about accelerating IT services demand. The 8% after-hours drop suggests the market is penalizing the growth deceleration implied by Q4 guidance.
Q3 bookings declined 7% YoY despite trailing-12-month bookings growth of 4%, suggesting near-term demand softness. Project Leap restructuring costs of $180M-$250M (with $140M-$160M in 2026) add execution risk, and the Q4 revenue guide of $5.49B-$5.57B implies sequential decline from Q3's $5.664B.