Cognizant forecasts annual revenue above estimates on strong AI demand
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Figurines with computers and smartphones are seen in front of Cognizant logo in this illustration taken, February 19, 2024. REUTERS/Dado Ruvic/Illustration
Feb 4 (Reuters) - Cognizant Technology forecast annual revenue above Wall Street estimates on Wednesday, betting on strong demand for its IT services as businesses adopt artificial intelligence into their workflows.
Shares of the Teaneck, New Jersey-based company rose over 2%.
Cognizant has benefited from enterprise clients prioritizing AI integration and automation as they migrate to the cloud.
Late last year, it expanded partnerships with Microsoft and AI startup Anthropic to get ahead of rivals in a competitive industry.
The company also acquired technology consulting firm 3Cloud in January, expanding its Microsoft Azure services and AI capabilities.
However, with investors increasingly focused on payback for the hundreds of billions poured into AI infrastructure rather than the promise, enterprises are reassessing how to turn AI ambition into measurable results.
"As we enter 2026, our strategy is focused on solving the AI velocity gap, the gap between massive AI infrastructure spending in the past few years and business value realization for our clients," CEO Ravi Kumar said.
Cognizant expects full-year 2026 revenue between $22.14 billion and $22.66 billion, compared with analysts' average estimate of $22.06 billion, according to data compiled by LSEG.
It also forecast annual adjusted profit per share between $5.56 and $5.70, the mid-point of which is largely in line with estimates of $5.62.
Chief Financial Officer Jatin Dalal said the company is still evaluating a primary offering and secondary listing in India, for which it is in conversation with Indian regulators and financial and legal advisers.
Cognizant reported a fourth-quarter revenue of $5.33 billion, above estimates of $5.31 billion. Adjusted profit came in at $1.35 per share, beating estimates of $1.32.
Revenue from Cognizant's financial services segment — serving banking, capital markets, payments and insurance companies — grew the most, rising 10.5% to $1.59 billion. Analysts had expected $1.52 billion.
(Reporting by Anhata Rooprai in Bengaluru; Editing by Shailesh Kuber and Sahal Muhammed)
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