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Cognizant beats TCS & Infosys in revenue growth, profit rises 14% in Q2
The Nasdaq-listed information technology (IT) company's revenue increased 8.1 per cent to $5.25 billion in Q2, beating Bloomberg estimates of $5.19 billion. On a constant-currency basis, it was up 7.2 per cent. Both numbers were better than TCS and Infosys, the company's Indian rivals. TCS's revenue was down 3.1 per cent on constant currency and Infosys's was up 3.8 per cent. Cognizant follows a calendar year for its financial reporting.
Cognizant's numbers were buoyed by two mega deals (those worth $500 million each or more) in Q2, taking the total to three in 2025 as it works to once again rank among India's top four IT services companies in three years. The company is headquartered in the US, but has a massive operational presence in India.
'It is a great quarter in a market which still remains uncertain and the macroeconomic (condition) has not changed much,' said Ravi Kumar, Cognizant's chief executive officer (CEO), on Thursday.
Bolstered by better-than-expected revenue growth and large deals, the company narrowed the lower end of its guidance for 2026. Cognizant now expects to grow between 4-6 per cent on constant currency, up from 3.5-6 per cent it guided in April. For the third quarter ending September 30, growth is expected to be 3.5 per cent to 5 per cent.
Cognizant said Belcan, the engineering research and development company it bought last year, accounted for about half of its quarterly revenue growth, mirroring the contribution in the previous quarter.
Cognizant won 29 large deals (worth $100 million each or more) in 2024 and 17 the year before when Kumar took over as CEO. In the first six months of 2026, it has signed 10 such deals.
'All the large deals that we did last year were productivity deals,' said Kumar, referring to cost takeout and efficiency improvement deals which are the bread and butter for IT services companies but come with margins which are increasingly under pressure.
'From this year, innovation and productivity deals and innovation deals have improved. Our total contract value of large deals has doubled and our annual contract value has also grown sequentially and compared to last year. The fourth quarter usually has more renewals and that's where we think the deal ramp ups will happen.'
Cognizant is following three strategies for growth: upskilling employees; scaling up innovation through platform-led growth in the artificial intelligence era; and aiming to gain an edge over competitors in GenAI.
Revenue from health sciences and banking, financial services and insurance was up 5.3 per cent and 6 per cent, respectively, in Q2. Revenue from products and services, including Belcan, was up about 15 per cent. North America revenue was up 8.1 per cent and Europe 4 per cent, both similar to that of other IT companies.
Operating margins increased 100 basis points to 15.6 per cent. "Our increased revenue guidance midpoint and reaffirmed adjusted operating margin outlook reflect strong execution and momentum year-to-date,' said Jatin Dalal, chief financial officer of Cognizant.
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