Cognizant Lowers Revenue Outlook, Citing Softer Discretionary Spending

Cognizant lowered its full-year revenue outlook as macroeconomic uncertainty weighed on discretionary spending, while its forecast included earnings per share of $5.72 to $5.79 and a margin near 16.1%.

The company cited uncertainty affecting spending, particularly in health care and consumer-facing sectors. It also expected a lower contribution from third-party resale and a larger fourth-quarter impact from furloughs.

Third-quarter revenue grew 4.8% year over year on a constant-currency basis. Bookings rose 4%, with a 1.3-to-1 book-to-bill ratio, while Financial Services revenue increased 12%. New and expanded business made up 60% of bookings; management said that work should convert to revenue faster.

CEO Ravi Kumar S. said adjusted operating margin reached its highest level in four years. More than half of software development was AI-assisted, and Cognizant had more than 8,500 AI engagements.