Cognizant’s Fourth-Quarter Guidance Falls Short of Analysts’ $5.65 Billion Consensus

Key Facts

Cognizant set a fourth-quarter 2026 revenue range of $5.49 billion to $5.57 billion, equivalent to annual growth of 3.0% to 4.5%, or 3.2% to 4.7% in constant currency. That compares with analysts’ average estimate of $5.65 billion, according to Investing.com, putting the company’s range below consensus. By comparison, the company reported revenue of $5.664 billion in the third quarter, up 4.6% from $5.415 billion in the same period a year earlier. Cognizant said adjusted diluted earnings per share were $1.49, compared with $1.39 a year earlier. Adjusted operating margin also rose to 16.3% from 16.0%.

The fourth-quarter guidance followed a 7% year-over-year decline in Cognizant’s third-quarter bookings. In the 12 months ended that quarter, bookings rose 4% to $28.7 billion, according to company data. The bookings-to-revenue ratio was about 1.3 times over that period. Cognizant said its backlog of bookings increased 4%, while bookings for the quarter itself fell 7%. The figures show different trends in quarterly bookings and total bookings over a year, but on their own do not indicate a decline in corporate spending across the sector.

After the third quarter, the company lowered the upper end of its annual constant-currency revenue growth forecast to 4.4%, while keeping the lower end at 4.0%. Following its second-quarter results, the guidance range was 4.0% to 5.5%, according to the company’s statement at the time. The updated guidance calls for 2026 revenue of $22.05 billion to $22.14 billion. That equates to year-over-year growth of 4.5% to 4.9%, or 4.0% to 4.4% in constant currency, according to the third-quarter results statement. The company’s adjusted full-year earnings-per-share forecast is $5.72 to $5.79, compared with analysts’ consensus of $5.76, according to Investing.com.

Cognizant shares fell about 8% in premarket trading on October 29, according to Investing.com. The company reported 12% year-over-year revenue growth in its financial services segment in the third quarter. Acquisitions contributed about 210 basis points to revenue growth that quarter, according to Investing.com. Sales of third-party products, alongside the company’s services, added about 190 basis points to growth, the same source said. On profitability, adjusted operating margin was 16.3% in the third quarter, compared with 16.0% a year earlier, according to company data.

Cognizant expects total costs for Project Leap to be between $180 million and $250 million. Of that amount, $140 million to $160 million is expected to be incurred during 2026, with the remaining costs to be paid through the first quarter of 2027. The company said the program is expected to generate about $200 million in in-year savings in 2026. For the annual adjusted operating margin, Investing.com forecast about 16.1%, with year-over-year expansion of 30 basis points. That estimate excludes restructuring costs and other items, according to the source.

On capital returns, Cognizant announced in October a quarterly cash dividend of $0.33 per share. The dividend is payable to shareholders of record on November 13, 2026, with payment scheduled for November 25, 2026. The company had kept the lower end of its annual constant-currency revenue growth guidance at 4.0%, but cut the upper end from 5.5% after the second quarter to 4.4% after the third quarter. Its results also showed that third-quarter revenue growth came alongside higher adjusted earnings per share and an expanded adjusted operating margin. The fourth-quarter figures and annual guidance remain the company’s forecasts, while the fourth-quarter revenue consensus was reported by Investing.com.