Cognizant Technology Solutions (CTSH): Guidance narrowed to midpoint as strong idiosyncratic execution is offset by macro softness

研报英文原文证据摘录

Cognizant Technology Solutions (CTSH): Guidance narrowed to midpoint as strong idiosyncratic execution is offset by macro softness

Goldman Sachs Cognizant Technology Solutions (CTSH)

n AI debates: Cognizant reported over 8,000 AI engagements in the quarter (vs. 5,000

in 1Q26), with AI now assisting over 40% of software development. Cognizant also

sees agentic BPO as an increasingly significant medium-term growth driver,

potentially expanding the addressable market from roughly $1tn in systems

integration toward a $5 -$6tn enterprise-operations opportunity.

n Delivery structure: As part of Project Leap, Cognizant aims to reconfigure the

company’s pyramid structure to better align with an AI-driven delivery model. The

company still plans to hire more than 20,000 freshers in 2026, using AI to accelerate

their ability to take on higher-value work. However, management expects headcount

to remain range-bound for the rest of 2026, balancing campus hiring against

reductions from Project Leap.

Read-through to our coverage: We view Cognizant’s results as neutral for our IT

Services coverage given the relatively in-line report and narrowed guidance.

2Q results were in line with the Street: Cognizant reported 2Q26 revenue of $5.48 bn,

in line with the Street (Visible Alpha Consensus Data) at $5.49 bn and our estimate of

$5.50 bn. EPS from continuing operations of $1.37 was in line with the Street at $1.38

and our estimate of $1.37. Non-GAAP gross margin of 33.4% came in line with the

Street at 33.4% and above our estimate of 32.9%. Free cash flow of $459 mn during the

quarter was above the Street at $445 mn and compares to $331 mn in 2Q25. 2Q26

bookings declined by 6% Y/Y.

2026 revenue guidance narrowed to midpoint, but 3Q guidance is light: Cognizant