2025 Annual Report
2025 Cognizant Annual Report
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requiring rigorous governance, contextual
intelligence and auditability controls to deliver
enterprise-grade results clients can trust.
This change gives us the opportunity to be builders
again—creating full-stack, custom agentic journeys
and delivering outcomes as a service for our clients.
It also gives us the chance to define the “AI Builder”
category. As a company with interdisciplinary depth
across domain expertise and AI engineering, the
client understanding to co-create from the trenches,
and the operational courage and discipline to be
committed to client outcomes, we are an AI Builder.
Powering our AI Builder approach
Directly supporting our AI Builder approach are:
•
Cognizant BASIS, our consulting-led
framework that enables enterprise reinvention
and helps reduce legacy operating models
as the bottleneck to AI diffusion.
•
Context engineering, a discipline that
Cognizant has advanced and formalized
with certification tracks and integration into
client work; it has gained significant traction
with clients over the past 12 months. As AI
infrastructure increasingly relies on similar
frontier models and commoditized capabilities,
we believe sustainable competitive advantage
will come from how effectively proprietary
context is used to shape AI systems around
the distinct realities of each business.
•
Our award-winning AI Lab, with its 62 US
patents—at the end of 2025—and more
than 50 researchers, continues to expand
globally. The AI Lab’s mandate is to sense
the future and partner closely with clients,
our platforms and products group, and
our solutioning teams to translate frontier
research into industry-relevant use cases.
•
Our products and platforms, including Neuro®
AI and Flowsource™, enable us to deliver scaled
benefits in implementation, modernization
and operations, while creating greater
nonlinearity in how we operate and grow.
We surround this with a powerful and diverse
partnership ecosystem of hyperscalers, domain
innovators and AI-native companies that
enables our clients to benefit from best-of-
breed capabilities at every layer of the stack
while limiting lock-in to any single provider.
Accelerating growth: Our 2025 momentum
In 2025, we laid out our three-vector AI strategy,
which includes: 1) using AI to accelerate software
development and reduce technical debt,
2) industrializing AI from pilots into enterprise-
grade systems, and 3) agentifying the enterprise by
creating “agentic capital” that can tackle objectives
traditional software is largely unable to reach.
When I began my journey as Cognizant’s CEO
three years ago, we set out with a clear mandate:
to reclaim our winning heritage. 2025 proved
to be a landmark year as we deepened client
connections, strengthened our execution muscle,
established a platform for lifelong learning for our
associates and delivered top-tier1 revenue growth
that placed us in our industry’s winners’ circle.
This performance is a foundation for the era
ahead. AI is recomposing the technology services
industry—away from configuring packaged
software and towards creating bespoke
intelligence systems grounded in how each
business operates. This is builder’s work, and it is
a return to what Cognizant was founded to do.
Bridging the velocity gap
Today’s central opportunity is what we call the
AI velocity gap—the growing chasm between
the trillions of dollars invested in AI infrastructure
and the slower realization of P&L value. While
the technology is mature enough to help unlock
an estimated $4.5 trillion in US labor value
alone (according to our latest “New work, new
world” research), its value has not yet drifted to
enterprises. Companies are facing enormous
complexity as they retool their workforces with
human and digital labor, redesign operating
models, refactor software development, embrace
agentic workflows and shift towards AI-native
technology architectures—all at once.
Our mission is to bridge this gap by building
bespoke AI-powered solutions to help simplify,
reduce risk and accelerate our clients’ journeys
to scaled AI adoption and value. By creating
and owning the proprietary frameworks and
methodologies that ground AI within the
context of each client’s business, we are also
capturing durable value in this new economy.
Defining the “AI Builder” company
In the beginning, Cognizant was not a systems
integrator. We built systems and engineered
outcomes, driving broad-based economic value
that fueled growth for our clients. The enterprise
software era shifted the center of gravity. Value
migrated to the software companies who owned
the product, and we became integrators.
New AI capabilities are changing the equation.
The deterministic software of the past—rule-
based, repeatable, suited for off-the-shelf
applications—has given way to Software
2.0: probabilistic, contextual, naturally
bespoke and increasingly authored by AI. In
the AI world, systems matter more than ever,
The AI Builder era
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problems worth solving. By hiring non-STEM
graduates alongside engineers, we’re building a
workforce equipped with the judgment to steer
autonomous agents through complex workflows.
Finally, having surpassed our initial goal to train
one million people in future-ready skills, we’ve
set a new target to upskill two million individuals
globally by 2030 through our Synapse program.
Cognizant’s history is a testament to the
power of adaptation. Thirty years ago, we were
builders. Today, we have reclaimed that mindset
to accelerate value realization for our clients.
For decades, technology services were largely
anchored in technology spend, a narrow slice of
total enterprise budgets. Today, clients are applying
intelligence to core operational processes that
traditional software was never built to address.
This shifts our opportunity deeper into the
operational heart of the enterprise, dramatically
expanding the scope of value we can create.
As we enter 2026, we do so with a clear view
of the work ahead. While our foundation is set,
true transformation is achieved through the
consistent, disciplined application of intelligence
to the world’s most complex workflows. We are
committed to this process of co-innovation,
building the systems and the trust necessary
to redefine productivity for a new age.
I thank our more than 350,000 associates
for their dedication and commitment to
becoming the builders of the future. I thank
our clients for their partnership and our
shareholders for their continued support.
The AI Builder era has arrived. We are ready.
Ravi Kumar S
Chief Executive Officer
We delivered a record full-year revenue of over
$21 billion, with 7% growth or 6.4% growth in
constant currency.2 Importantly, our growth
was profitable. We expanded operating margin
and delivered earnings per share growth even
as we funded significant advancements in
our platforms, partnerships and intellectual
property—including opening our newest AI
Lab in Bengaluru and adding new IP to our
patent portfolio. We accomplished this while
maintaining our investments in our people.
This financial performance is an outcome
of our operational rigor. Trailing 12-month
bookings grew 5% year-on-year, and we signed
28 large deals with a total contract value
(TCV) of over $100 million each, with the TCV
of large deals increasing by nearly 50% from
the prior year. Our client Net Promoter Score®
reached its highest level in four years and is up
meaningfully from 2023, demonstrating the
effectiveness of our client-centric focus. And we
returned $2 billion to shareholders, reflecting
our confidence in our long-term trajectory.
Amplifying talent: A new model
for human capital
Underpinning our AI Builder approach is our
talent strategy. We are evolving from a linear
staffing model to an asynchronous “macro-
delegate/micro-steer” framework, where our
associates delegate complex tasks to agentic
networks and steer the strategy. We are also
broadening our talent base by hiring non-STEM
graduates and early-career talent. This includes
recruiting liberal arts graduates who bring an
interdisciplinary skill set able to uncover new
1 Top tier is defined as the top four, out of peer group which includes
Accenture plc; Capgemini SE; CGI Inc.; DXC Technology Company;
EPAM Systems, Inc.; Genpact Limited; HCL Technologies Limited;
Infosys Limited; Tata Consultancy Services Ltd.; and Wipro Limited.
2 Constant currency revenue growth is not a measure of financial
performance prepared in accordance with GAAP. See “Non-GAAP
financial measures” in our Annual Report on Form 10-K for the year
ended December 31, 2025, pages 34–36 for more information and
a reconciliation to the most directly comparable GAAP financial
measures, as applicable.
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We are
an AI Builder
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AI is driving change—much
faster than expected
In our original “New work, new world”
research from 2023, we predicted AI’s
disruptive impact would have the potential to
reach an astounding 90% of jobs within the
next decade. As it turned out, we were right—
only according to our latest analysis, AI’s
capability has reached that level six years early.
In the last year alone, powerful AI models
have emerged that can interpret more diverse
datasets, employ more advanced reasoning
capabilities and deploy agent-driven systems
capable of complex work with minimal
human involvement. AI is changing how work
gets done and charging forward, fast.
Our clients are well aware of AI’s impact.
To keep pace, they need a partner with a
deep understanding of their business and
this technology—experts who comprehend
the forces that are shaking up markets and
changing what customers require. Enterprises
must learn to reliably create value, as AI
shifts from novelty to everyday necessity.
Businesses need an AI builder
Traditional service models are designed for
scalability. They prioritize operational
efficiency and linear growth. Today, these
business objectives are no less important.
They’re also no longer sufficient. Amid a
$5 trillion infrastructure investment where
intelligence will be embedded everywhere,
Building the tools, models,
platforms and agents that make
AI’s potential real for the enterprise.
many companies are accelerating their
AI adoption. But we believe few are
realizing the impact they hoped to see.
Our top priority has always been to help our
clients remain relevant. From successive
technology waves to new paradigms, we have
built a reputation for sensing key technology
shifts ahead of the market—and moving
quickly to develop products and services that
help our clients transform and stay ahead.
This agility, at scale, has been a crucial
differentiator for us—and for our clients who
rely on our continuously evolving capabilities.
To lead in the AI era, relevance means
accelerating the transition from AI investments
to real-world business value. So, we’re returning
to our heritage as a builder. Only now, we’re
building to help our clients unlock the value of AI.
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Bridging the gap
between AI and
enterprise value
5
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Cognizant is building the bridge
from AI to business results
From productivity and efficiency gains to
business reimagination itself, the potential
of AI is undeniable. To some companies that
have already made infrastructure investments,
though, these transformative outcomes may
seem out of reach. Turning that potential
into real business results will remain elusive
until systems are modernized, processes
are reimagined and business context is fully
integrated with AI. To work at scale and
deliver value, AI must be grounded in the
enterprise: in how decisions are made, how
work flows across teams and how outcomes
are measured. Every enterprise needs a bridge
that connects these powerful models to the
realities of how the business actually operates.
AI is contextual. Without the right elements
in place, the gap between a company’s AI
investments and AI-driven results will persist.
Off-the-shelf models and
prebuilt agents offer potential, but
without integrating an enterprise’s
unique workflows, knowledge,
regulatory requirements and
culture, AI remains disconnected
from business outcomes.
“
Our AI Builder approach closes the gap
The approach begins with Cognizant Agent
Foundry and Cognizant BASIS, our proprietary
framework that reimagines processes while
embedding context across every phase of
agentic transformation. Through context
engineering, our specialists map each client’s
unique workflows and institutional knowledge
to give AI the situational awareness it needs
to be precise and relevant. This intelligence
layer helps agentic systems deliver more
reliable enterprise-specific outcomes.
Our platforms—including Cognizant Ignition™,
our data modernization platform, and
Cognizant Neuro AI Engineering—and platform-
based services help to solve the last-mile
challenges of AI transformation, integrating
proprietary IP with best-of-breed solutions for
faster time to value and help manage delivery
risk. These capabilities are amplified through
our partner ecosystem, spanning AI leaders
such as Anthropic and OpenAI; enterprise
platforms including Palantir, ServiceNow and
Salesforce; and major cloud hyperscalers,
including AWS, Microsoft Azure and Google
Cloud. Our AI Lab fuels our continued
investments in AI platforms and products,
helping us move from R&D to real-world value.
Together, this approach gives us the ability
to assemble frontier AI capabilities and
combine them with deep industry expertise,
enterprise context and proprietary IP—helping
clients transform, even in highly regulated
industries, with governance and controls
tailored to specific regulatory requirements.
We connect intelligence to context, systems to
strategy and innovation to business impact.
AI isn’t plug‑and‑play. The business
agenda has to lead the technology
agenda. That’s not a constraint on
ambition—it is the condition for it.
Sandra Notardonato
Head of Global Partnership
Development and Influencer Relations
“
Naveen Sharma
SVP and Global Practice Head,
AI and Analytics
Evolving to
lead in an
AI-driven world
7
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2025 Cognizant Annual Report
As an AI Builder, Cognizant has
returned to creating for our clients
Our shift from systems integrator to AI Builder
makes us a new kind of services partner—
one that leverages our people and platforms
along with our clients’ specific context to
build agentic journeys designed to generate
impactful outcomes for enterprises. As one
of the first services partners to declare a
$1 billion investment in AI, we are actively
building on our heritage to transform AI
potential into real value—productizing our
organizational knowledge and building
AI‑ready operating models that help our
clients reimagine their businesses.
Our transformation empowers
new capabilities
Cognizant is transforming our own business
with AI, so we can leverage its real impact
for ourselves and on behalf of our clients.
We’re moving beyond our traditional areas
of integration expertise, evolving to a
position where we’re building the platforms,
agentic journeys, tools and models that
make AI’s potential real for enterprises.
We established a centralized AI Factory that
democratizes the tools and infrastructure our
people need to amplify their impact for our
clients. We’re able to harness AI-generated code
through Cognizant Flowsource, our unified full-
stack engineering platform that supports our
efforts to accelerate speed to market and pursue
nonlinear growth in our business model. Our
embedded engineering capabilities extend AI to
the physical realm. With a growing number of AI
use cases across our own corporate functions—
from finance to sales—we’re streamlining
decision-making and cycle times. For example,
we have agentified our company intranet,
which now processes more than 10 million user
actions each month, reducing support tickets
by 50% and increasing associate engagement
by 35% compared to before its new launch.
Our own transformation is powered by our
people. We’re fostering a culture of builders
across our organization. We achieved a
Guinness World Records™ title for the largest
online gen AI hackathon through our Vibe
Coding initiative, producing more than 30,000
prototypes. Bluebolt®, our grassroots innovation
program, had its best year yet with over
340,000 ideas generated in 2025. We’ve also
expanded into new global talent hubs, including
our new center in GIFT City, Ahmedabad.
As an AI Builder, we have already made
fast progress on our first and most
important task: to create a global, AI-
enabled workforce that’s ready to scale the
impact AI can have for us and our clients.
Scaling AI is not only a model
challenge; it’s an organizational
one. The shift from automation
to business alignment is where
transformation happens.
“
Babak Hodjat
Chief AI Officer
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Unlocking the
true potential of
AI for our clients
We have seen the raw power of AI in
consumer use cases, but adaptation
to enterprise requirements is not simple.
It requires contextual data, model
specialization, system integration,
process change and upskilling.
“
Prasad Sankaran
President—AI Products
and Platforms
10
2025 Cognizant Annual Report
Aligning AI-led IT
transformation at Aker
The energy sector is constantly evolving to
support the changing demands of the world’s
population. Seeking more sustainable energy
production along with increases in agility and
operational efficiency, the most innovative
companies in this industry are making technology
investments today to meet future energy needs.
Building on our long-standing relationship,
Aker Solutions partnered with us to enhance
their end-user experience while leveraging
AI for IT operations (AIOps) to better
protect critical data and infrastructure.
Additionally, with the implementation of a
scalable and flexible consumption-based
commercial model, our aim is to lay the
foundation for improved responsiveness—
giving the global energy leader the ability
to quickly adapt as the market changes.
We introduced a transformation roadmap
focused on upgrading services and modernizing
technology platforms without disrupting stable
operations. Leveraging our Cognizant Neuro
platform, we are modernizing Aker Solutions’ IT
operations across cloud services, infrastructure,
applications, networks and cybersecurity—
strengthening innovation capabilities while
improving agility, efficiency and resilience.
Over the course of the next few years, this
work is expected to continue to advance
technology-driven outcomes for Aker
Solutions and support the future of the
energy sector in Norway and beyond.
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We have seen the raw
power of AI in consumer use
cases, but adaptation to
enterprise requirements is not
simple. It requires contextual
data, model specialization,
system integration, process
change and upskilling.
“
Prasad Sankaran
President—AI Products
and Platforms
Accelerating agentic
adoption at Pearson
AI is changing work faster than people can keep
up. As roles evolve and new ones emerge, Pearson
is in a position to amplify the most valuable skills
in the modern workforce: the abilities to learn,
adapt and reskill—continuously. For early-career
workers, especially, the stakes are high. They’re
entering a workforce already in flux, with fewer
clear pathways from education to opportunity.
To help address these challenges, Pearson
partnered with us to modernize its learning
platforms and accelerate the development of
AI-powered education and workforce solutions.
Together, we are supporting the evolution of
select Pearson platforms and learner experiences
by applying generative and agentic AI and
advancing targeted cloud-native modernization
initiatives. In delivering these services, Cognizant
utilizes its proprietary Flowsource and Neuro AI
capabilities to enable scalable, efficient execution.
By combining Pearson’s global leadership in
learning and assessment with our consulting and
engineering expertise, the partnership is designed
to bring AI-powered learning, assessment
and skilling programs to market faster and
at greater scale. Leveraging technologies
such as agentic AI and conversational AI,
we are co-creating next-generation learning
experiences that work for different learning
styles, increase engagement and support
lifelong learning across every stage of a career.
The result is intended to advance professional
journeys with a more adaptive experience
for millions of learners worldwide.
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2025 Cognizant Annual Report
Agentifying operations
with Lineage
Food and beverage producers, retailers
and distributors depend on temperature-
controlled logistics leader Lineage to increase
distribution efficiency, advance sustainability,
minimize supply chain waste and protect
the goods that nourish communities.
As the world’s largest global temperature-
controlled warehouse REIT, Lineage partnered
with us to advance its ongoing customer
service transformation as part of a larger
effort to drive consistency and operational
discipline across the company’s network. By
combining our deep logistics and customer
service expertise with agentic AI capabilities,
we are helping Lineage improve personalization
and responsiveness while reducing friction
in day-to-day customer interactions.
AI-powered platforms are core to Lineage’s long-
term strategic differentiation and operational
performance. We have been working with
them in building and deploying many of
these platforms to improve the operational
efficiency and elevate the reliability of their
warehouses. Through close collaboration, our
teams are enhancing Lineage’s tools, teams
and processes—elevating them through
greater consistency, quality and innovation.
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The future of AI is
built by people
Our value is—and has always been—our unique
combination of talent and technology. In the
shift to an AI-driven economy, we believe the
organizations that win will be those that invest
as deeply in people as they do in platforms.
We continue to deepen our capabilities in both.
That’s why we are committing to the future
of work at scale. Central to these efforts is
the launch of Cognizant Skillspring™, a new
associate growth platform designed to support
continuous learning, mobility and reinvention
across our workforce. To increase our impact
beyond our walls, we’re expanding our Synapse
initiative—which is now on track to skill two
million people for the AI economy by 2030,
equipping them with the capabilities they’ll need
to work alongside intelligent systems, including
the judgment to recognize when AI systems
need human correction, oversight or escalation.
As AI becomes ubiquitous, we believe it’s crucial
for people to change their skills so they can keep
contributing in meaningful ways. At Cognizant,
we will continue to manage disruption by
advancing talent alongside technology.
That includes building responsible AI literacy
into future learning pathways so that our people
can use AI effectively and evaluate it critically.
As we move from being an IT integrator to
AI Builder, our responsibilities will continue to
expand. And with that, comes new levels of
accountability. Not just for implementation
but for outcomes that ensure AI is equitable,
trustworthy and designed to endure so it
can keep serving genuine human needs.
We’re building the bridge to an AI-powered
future that expands what’s possible for our
associates, our clients and people everywhere.
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2025 Cognizant Annual Report
About Cognizant
Cognizant (NASDAQ: CTSH) is an AI Builder
and technology services provider, building the
bridge between AI investment and enterprise
value by building full-stack AI solutions for
our clients. Our deep industry, process and
engineering expertise enables us to build an
organization’s unique context into technology
systems that amplify human potential,
realize tangible returns and keep global
enterprises ahead in a fast-changing world.
What we do
We transform experiences so our clients reach
new levels of growth and brand loyalty.
We reimagine processes with automation and
capabilities that instill insight, precision and speed.
We modernize technologies that help our clients
remain relevant and ready for the future.
Industry recognition
Leader in Agentic AI Development and
Deployment Services, ISG Provider Lens®
Leader in Generative AI Services,
ISG Provider Lens®
Leader in Generative AI Services,
Avasant RadarView™
World’s Most Ethical Companies by Ethisphere
Fortune’s America’s Most Innovative Companies
Newsweek’s America’s Greatest
Workplaces for Gen Z
Newsweek’s America’s Greatest Workplace
Cognizant CEO Ravi Kumar S named
to the 2025 TIME 100 AI List
Cognizant CEO Ravi Kumar S is 2025 Pravasi
Bharatiya Samman Award recipient
Financial performance
Financial results
$21.1B
revenue
7.0% increase YoY as reported
6.4% increase YoY constant currency1
16.1%
15.8%
Capital allocation
Revenue mix
Global delivery capabilities
$2.0B
returned to shareholders
through share repurchases
and dividends
Cash generation
$2.7B
free cash
flow1
1 Constant currency revenue growth, adjusted operating margin and free cash flow are not measurements of financial
performance prepared in accordance with GAAP. See “Non-GAAP financial measures” in our Annual Report on Form
10-K for the year ended December 31, 2025, pages 34–36 for more information and a reconciliation to the most directly
comparable GAAP financial measures, as applicable.
GAAP operating
margin
adjusted operating
margin1
By industry
By geography
$2.9B
cash flow from
operations
256,900
41,600
14,600
7,800
India
North America
Continental Europe
United Kingdom
30,700
Rest of world
In 2025, our AI Builder strategy and client-centric approach fueled industry-leading
performance, delivering more than $21 billion in revenue, operating margin expansion
and a $2 billion return to shareholders. This momentum, aided by a record total contract
value in large deals, placed us in our industry’s winners’ circle two years early.
We ended 2025 with approximately 351,600 associates supporting our clients around the world.
Communications, Media
& Technology
Products & Resources
Financial Services
Health Sciences
Continental Europe
United Kingdom
Rest of world
North America
2025 Cognizant Annual Report
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29%
30%
25%
16%
6%
75%
9%
10%
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31, 2025
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-24429
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware
13-3728359
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
300 Frank W. Burr Blvd., Suite 36, 6th Floor
Teaneck, New Jersey 07666
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (201) 801-0233
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A Common Stock, $0.01 par value
per share
CTSH
The Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
☒ Yes ☐ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
☐ Yes ☒ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See
the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer
☒
Accelerated Filer
☐
Non-accelerated Filer
☐
Smaller Reporting Company
☐
Emerging Growth Company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under
Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an
error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No
The aggregate market value of the registrant’s voting shares of common stock held by non-affiliates of the registrant on June 30, 2025, based on $78 per share, the last reported sale price
on the Nasdaq Global Select Market of the Nasdaq Stock Market LLC on that date, was $38.1 billion.
The number of shares of Class A common stock, $0.01 par value, of the registrant outstanding as of February 6, 2026 was 478,246,920 shares.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated by reference into the Annual Report on Form 10-K: Portions of the registrant’s definitive Proxy Statement for its 2026 Annual Meeting of
Stockholders are incorporated by reference into Part III of this Report.
Table of Contents
TABLE OF CONTENTS
Item
Page
GLOSSARY
1
FORWARD LOOKING STATEMENTS
3
PART I
5
1.
Business
5
1A. Risk Factors
14
1B. Unresolved Staff Comments
24
1C. Cybersecurity
24
2.
Properties
25
3.
Legal Proceedings
25
4.
Mine Safety Disclosures
25
PART II
26
5.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
26
6.
[Reserved]
27
7.
Management's Discussion and Analysis of Financial Condition and Results of Operations
28
7A. Quantitative and Qualitative Disclosures About Market Risk
39
8.
Financial Statements and Supplementary Data
40
9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
40
9A. Controls and Procedures
40
9B. Other Information
41
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
41
PART III
42
10.
Directors, Executive Officers and Corporate Governance
42
11.
Executive Compensation
42
12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
42
13.
Certain Relationships and Related Transactions, and Director Independence
42
14.
Principal Accountant Fees and Services
42
PART IV
43
15. Exhibits, Financial Statements Schedules
43
16. Form 10-K Summary
45
SIGNATURES
46
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
F-1
GLOSSARY
10b5-1 Plan
Trading plan adopted pursuant to Rule 10b5-1 under the Exchange Act
2009 Incentive Plan
Cognizant Technology Solutions Corporation Amended and Restated 2009 Incentive
Compensation Plan
2017 Incentive Plan
Cognizant Technology Solutions Corporation 2017 Incentive Award Plan
2023 Incentive Plan
Cognizant Technology Solutions Corporation 2023 Incentive Award Plan
2026 Proxy Statement
Definitive proxy statement for the 2026 Annual Meeting of Stockholders
Adjusted Diluted EPS
Adjusted diluted earnings per share
AI
Artificial Intelligence
APA
Advance Pricing Agreement
ASC
Accounting Standards Codification
CC
Constant Currency
CE
Continental Europe
CEO
Chief Executive Officer
CFO
Chief Financial Officer
CIO
Chief Information Officer
CITA
Commissioner of Income Tax (Appeals) in India
CLO
Chief Legal Officer, Chief Administrative Officer and Corporate Secretary
CMT
Communications, Media and Technology
CODM
Chief Operating Decision Maker
CPI
Consumer Price Index
Credit Agreement
Credit agreement with a commercial bank syndicate dated April 18, 2024, as amended
CSO
Chief Security Officer
CTS India
Our principal operating subsidiary in India
DSO
Days Sales Outstanding
DTSA
Defend Trade Secrets Act
EPS
Earnings Per Share
ENS
The National Security Scheme
EU
European Union
EU AI Act
European Union Artificial Intelligence Act
EVP
Executive Vice President
Exchange Act
Securities Exchange Act of 1934, as amended
FCPA
Foreign Corrupt Practices Act
FS
Financial Services
GAAP
Generally Accepted Accounting Principles in the United States of America
GCCs
Global Capability Centers
GenAI
Generative Artificial Intelligence
High Court
Madras, India High Court
HR
Human Resources
HS
Health Sciences
India Defined Contribution
Obligation
Certain statutory defined contribution obligations of employees and employers in India
IP
Intellectual property
IoT
Internet of Things
IRS
Internal Revenue Service
ISO
An international standard for information security management
Defined Term
Definition
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December 31, 2025 Form 10-K
IT
Information Technology
ITAT
Income Tax Appellate Tribunal in India
ITD
Indian Income Tax Department
Labor Code
Labor law reforms implemented by the Government of India effective November 21, 2025,
including the Code on Social Security, 2020.
NA
North America
Nasscom
National Association of Software and Services Companies
NextGen program
Our 2023-2024 program to simplify our operating model, optimize corporate functions and
consolidate and realign office space
Ninth Circuit
United States Court of Appeals for the Ninth Circuit
NIST
National Institute of Standards and Technology
OBBBA
One Big Beautiful Bill Act
PSU
Performance Stock Units
Purchase Plan
Cognizant Technology Solutions Corporation 2004 Employee Stock Purchase Plan, as amended
P&R
Products and Resources
R&E
Research and experimental
Recently completed
acquisitions
Acquisitions that were completed in the 12 months preceding the beginning of the reporting
period (in order to identify the impact of such acquisitions for the first twelve months of
ownership)
ROU
Right of Use
RoW
Rest of World
RSU
Restricted Stock Units
SCI
Supreme Court of India
SEC
United States Securities and Exchange Commission
Second Circuit
United States Court of Appeals for the Second Circuit
SG&A
Selling, general and administrative
SVP
Senior Vice President
Syntel
Syntel Sterling Best Shores Mauritius Ltd.
Tax Reform Act
Tax Cuts and Jobs Act
Term Loan
Unsecured term loan under the Credit Agreement
Third Circuit
United States Court of Appeals for the Third Circuit
Title VII
Title VII of the Civil Rights Act of 1964, 42 U.S.C § 2000e et seq.
TriZetto
The TriZetto Group, Inc., now known as Cognizant Technology Software Group, Inc.
UK
United Kingdom
USDC-CDCA
United States District Court for the Central District of California
USDC-NJ
United States District Court for the District of New Jersey
USDC-SDNY
United States District Court for the Southern District of New York
Voluntary Attrition - Tech
Services
Attrition metric that includes all voluntary separations with the exception of employees in our
Intuitive Operations and Automation practice
VP
Vice President
Defined Term
Definition
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December 31, 2025 Form 10-K
Forward Looking Statements
The statements contained in this Annual Report on Form 10-K that are not historical facts are forward-looking statements
(within the meaning of Section 21E of the Exchange Act) that involve risks and uncertainties. Such forward-looking statements
may be identified by, among other things, the use of forward-looking terminology such as “believe,” “expect,” “may,” “could,”
“would,” “plan,” “intend,” “estimate,” “predict,” “potential,” “continue,” “should” or “anticipate” or the negative thereof or
other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. From
time to time, we or our representatives have made or may make forward-looking statements, orally or in writing.
Such forward-looking statements may be included in various filings made by us with the SEC, in press releases or in oral
statements made by or with the approval of one of our authorized executive officers. These forward-looking statements, such as
statements regarding our anticipated future revenues, operating margin, earnings, capital expenditures, impacts to our business,
financial results and financial condition as a result of the competitive marketplace for talent and future attrition trends,
anticipated effective income tax rate and income tax expense, liquidity, financing strategy, access to capital, capital return
strategy, investment strategies, cost management, plans and objectives, investment in our business, potential acquisitions,
industry trends, client behaviors and trends, the outcome of and costs associated with regulatory and litigation matters, the
appropriateness of the accrual related to the India Defined Contribution Obligation and other statements regarding matters that
are not historical facts, are based on our current expectations, estimates and projections, management’s beliefs and certain
assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Actual
results, performance, achievements and outcomes could differ materially from the results expressed in, or anticipated or implied
by, these forward-looking statements. There are a number of important factors that could cause our results to differ materially
from those indicated by such forward-looking statements, including:
•
macroeconomic and geopolitical conditions globally, in particular in the markets in which our clients and operations
are concentrated;
•
intense and evolving competition and significant technological advances that our service offerings must keep pace with
in the rapidly changing markets we compete in;
•
our ability to successfully use AI-based technologies in our client offerings and our own internal operations and the
impact AI-based technologies may have on the demand for our services or our ability to obtain favorable pricing or
other terms for our services;
•
our ability to attract, train and retain skilled employees, including highly skilled technical personnel and personnel
with experience in key AI and digital areas and senior management to lead our business globally, at an acceptable cost;
•
unexpected terminations of client contracts on short notice or reduced spending by clients;
•
our ability to meet specified service levels or milestones required by certain of our contracts;
•
our ability to achieve our profitability goals and maintain our capital return strategy;
•
challenges related to growing our business organically as well as inorganically through acquisitions, and our ability to
achieve our targeted growth rates and successfully integrate acquired businesses;
•
legal, reputation and financial risks if we fail to protect client and/or our data from security breaches and/or cyber
attacks;
•
fluctuations in foreign currency exchange rates, or the failure of our hedging strategies to mitigate such fluctuations;
•
the impact of future pandemics, epidemics or other outbreaks of disease, on our business, results of operations,
liquidity and financial condition;
•
the impact of extreme weather on our business;
•
our ability to meet sustainability and societal related expectations and ambitions;
•
the effectiveness of our risk management, business resilience and disaster recovery plans and the potential that our
global delivery capabilities could be impacted;
•
restrictions on visas, in particular in the United States, UK and EU, or immigration more generally or increased costs
of such visas or the wages we are required to pay employees on visas, which may affect our ability to compete for and
provide services to our clients;
•
risks related to anti-outsourcing legislation, if adopted, and negative perceptions associated with offshore outsourcing,
both of which could impair our ability to serve our clients;
•
risks and costs related to complying with numerous and evolving legal and regulatory requirements and client
expectations in the many jurisdictions in which we operate;
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December 31, 2025 Form 10-K
•
actual and potential changes in tax laws, or in their interpretation or enforcement, failure by us to adapt our corporate
structure and intercompany arrangements, or adverse outcomes of tax audits, investigations or proceedings;
•
actual and potential exposure to litigation and legal claims in the conduct of our business;
•
risks related to infringement upon the IP rights of others or having our IP rights infringed upon; and
•
the factors set forth in "Part 1, Item 1A. Risk Factors” in this report.
You are advised to consult any further disclosures we make on related subjects in the reports we file with the SEC,
including this report in the sections titled “Part I, Item 1. Business,” “Part I, Item 1A. Risk Factors” and “Part II, Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We undertake no obligation to
update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as
may be required under applicable securities laws.
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December 31, 2025 Form 10-K
PART I
Item 1. Business
Overview
Cognizant is one of the world’s leading professional services companies, engineering modern businesses and delivering
strategic outcomes for our clients. We help clients modernize technology, reimagine processes and transform experiences so
they can stay ahead in today's fast-changing world, where AI is reshaping organizations in every field. As an AI builder, we
provide deep expertise at the intersection of industry and technology, combining our perspective with extensive knowledge of
our clients' organizations to build industry-specific platforms and incorporate context into systems, AI models and custom
solutions. We tailor our services and solutions to specific industries with an integrated global delivery model that employs
client service and delivery teams based at client locations and dedicated global and regional delivery centers. Our services
include consulting, application development, systems integration, quality engineering and assurance, engineering research and
development, application maintenance, infrastructure and security as well as business process services and automation.
Our purpose, vision and values are central to Cognizant's strategic approach. Our values support our vision and enhance
our ability to innovate and co-create with our clients.
In order to achieve this vision and support our clients, we are focusing on accelerating growth, becoming an employer of
choice and simplifying our operations through modernization and an AI-enabled IT roadmap. In executing our strategy, we seek
to drive organic growth through investments in our digital and AI capabilities across industries and geographies, including the
extensive training and reskilling of our technical teams and the expansion of our local workforces in the United States and other
markets around the world. Additionally, we pursue select strategic acquisitions to expand our talent, experience and capabilities
in key technologies or in particular geographies or industries. See Note 3 and Note 18 to our consolidated financial statements
for additional information.
We are focused on expanding our partner ecosystem across a broad range of technology companies, including
hyperscalers, cloud providers, enterprise software companies, best-in-class digital software enterprises and emerging start-ups.
We believe this partner ecosystem will enable us to enhance our innovative, integrated offerings by combining third-party
products with our service solutions to deliver enterprise-wide digital transformation.
Reportable Business Segments
In 2025, we went to market across four industry-based operating segments, which are our four reportable business
segments: (i) Health Sciences (HS) (ii) Financial Services (FS) (iii) Products and Resources (P&R) and (iv) Communications,
Media and Technology (CMT).
Our clients seek to partner with service providers that have a deep understanding of their businesses, industry initiatives,
customers, markets and cultures and the ability to create solutions tailored to meet their individual business needs. Across
industries, our clients are confronted with the risk of being disrupted by nimble, AI-native competitors. Our clients increasingly
feel the need to transform and are therefore redirecting their focus and investment to new operating models and embracing AI,
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December 31, 2025 Form 10-K
cloud-native architectures and modern development practices that enable quick adjustments to shifts in their markets. We
believe that our deep knowledge of our clients’ businesses and the industries we serve has been central to our growth and high
client satisfaction, and we continue to develop and deploy our client-centric culture, innovating together to produce
transformative outcomes.
Our HS segment consists of healthcare providers and payers, and life sciences companies, including pharmaceutical,
biotech and medical device companies. Demand in this segment is driven by emerging industry trends, including the shift
towards consumerism, outcome-based care, digital health and delivering seamless, patient-centered experiences. These trends
result in increased demand for services that drive operational improvements in areas such as clinical development,
pharmacovigilance and manufacturing, as well as claims processing, enrollment, membership and revenue cycle management.
Demand is also created by the adoption and integration of digital technologies such as AI and predictive data analytics to
improve clinical trial designs, data security, patient engagement and care outcomes.
Our FS segment includes banking, capital markets, payments and insurance companies. Demand in this segment is driven
by our clients’ need to modernize legacy technology environments, strengthen operational resilience and adopt cloud, data and
AI capabilities to meet evolving customer expectations and regulatory requirements. Our clients are expanding enterprise AI
adoption to enhance customer experience, improve risk and fraud management, accelerate underwriting and lending and
modernize payments. These initiatives require core platform modernization, greater use of advanced analytics and responsible
AI frameworks to ensure transparency, security and compliance.
Our P&R segment includes manufacturers, automakers, retailers, consumer goods companies, aerospace and defense
companies, and travel and hospitality companies, as well as businesses providing logistics, energy and utility services. Demand
in this segment is driven by our clients’ focus on improving the efficiency and sustainability of their operations; the enablement
and integration of business platforms to support sales and customer experience enhancement initiatives; the generational shift
from mechanical to software-defined, experience-driven customer interactions; grid modernization to support a consumer-
driven energy landscape that enables cleaner, more efficient energy use; and their adoption and integration of AI and other
technologies, such as intelligent systems to manage supply chains and enhance overall customer experiences, and IoT to
generate data and insights for factories, fleets, products and real estate companies.
Our CMT segment includes global communications, media and entertainment, education, publishing, information and
professional services and technology companies. Demand in this segment is driven by our clients’ need for services related to
AI adoption, modernization of business and technology operations, development of agentic ecosystems for the generation of
new revenue streams, enhancing user experiences and driving operational efficiency. In response to this demand, our focus
areas include AI and analytics, data modernization, customer experience design, supporting clients as they launch new products
and services, transforming client interactions with customers, telecom network monetization, media supply chain
transformation and applications, as well as infrastructure modernization.
For the year ended December 31, 2025, revenues across our four reportable business segments were as follows:
Revenues by business segment for 2025
Health Sciences: 30.1%
Financial Services: 29.2%
Products and
Resources: 25.0%
Communications,
Media and
Technology: 15.7%
The services we provide are distributed among a number of clients in each of our reportable business segments. The
volume of work performed for specific clients may vary significantly from year to year. A loss of a significant client or a few
significant clients in a particular segment could materially reduce revenues for that segment. The services we provide to our
larger clients are often critical to their operations and termination of our services would typically require an extended transition
period with gradually declining revenues.
See Note 2 to our consolidated financial statements for additional information related to disaggregation of revenues by
client location, service line and contract-type for each of our reportable business segments.
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December 31, 2025 Form 10-K
Services and Solutions
Our services include AI and other technology services and solutions, consulting, application development, systems
integration, quality engineering and assurance, application maintenance, infrastructure and security as well as business process
services and automation. Additionally, we develop, license, implement and support proprietary and third-party software
products and platforms. Central to our strategy to align with our clients’ need for continuous transformation is our sustained
investment in new technologies, including GenAI and agentic systems, cloud, data modernization, automation, digital
engineering and IoT. These capabilities help clients enable AI-led productivity and efficiency, industrialize AI and agentify the
enterprise to improve the experiences they offer to their customers, tap into new revenue streams and defend against digital- and
AI-native competitors.
In most cases, our clients operate in hybrid technology environments, running critical new digital initiatives alongside
essential legacy systems. In the AI era, our clients have an accelerated need to modernize their technology estates, reimagine
operations and shift to an AI-driven operating model. This has intensified demand for next-gen capabilities in AI, automation,
digital commerce, secure distributed work and the design and integration of full-stack AI solutions tailored to each enterprise's
specific needs. We believe our deep understanding of our clients' established systems and their ambitions provides us with a
unique advantage as we work with them to architect solutions that are both transformative and practical.
Our services and solutions are organized into seven integrated practices, which help us deliver these capabilities in ways
that align with each client’s specific transformation journey. These practices are Core Technologies and Insights, Enterprise
Platform Services, Industry Solutions, Intuitive Operations and Automation, Software and Platform Engineering, Cognizant
Moment and our newest practice, Security. Our consulting professionals have deep industry-specific expertise and work closely
across our practices to design and deliver integrated AI and digital solutions tailored to specific client requirements. Leveraging
a wide range of technologies across our clients’ enterprises, together with our proprietary platforms and accelerators and those
of our ecosystem partners, we help clients implement and operate AI solutions with integration, governance, security and
monitoring controls. These offerings, many including unique IP developed in our AI Lab, improve efficiency, enable new
customer experiences, and support business outcomes that align to our clients' industries. Our GCC offerings also help clients
establish, scale and optimize GCCs to build resilient, cost-effective and innovation-focused operating models. These offerings
combine domain expertise, digital engineering capabilities, and global delivery to help clients improve productivity, enhance
governance and accelerate modernization at scale.
Core Technologies and Insights
Our Core Technologies and Insights practice helps clients build agile and relevant organizations that apply the power of
AI, cloud, data and IoT to help them perform better and innovate faster. Our clients can harness data securely in cloud-first
architectures, enabling them to become highly resilient enterprises that are capable of quickly adapting to market dynamics.
Areas of focus within this practice are:
•
AI and analytics, which helps clients identify and adopt the best AI use cases for their enterprise and formulate
actionable insights from unstructured data to drive a greater understanding of their customers and operations;
•
Cloud and infrastructure, which helps simplify and modernize IT environments, creating a solid foundation for AI
innovation; and
•
IoT, which enables the convergence of the physical and the digital in smart products.
Enterprise Platform Services
Our Enterprise Platform Services practice helps our clients transform multiple front- and back-office business processes,
implementing enterprise-wide platforms that enable customer experience, customer relationship management, human capital
management, supply chain management, enterprise resource planning and financial processes. Our services decrease time to
market, drive efficiencies and deliver impactful experiences. Our clients can better share information, simplify IT processes,
automate workflows and improve flexibility. This practice focuses on application services, which help enterprises engage their
partner ecosystems more productively, and run their operations and financial organizations more efficiently while enabling
improved employee and customer experiences. We work closely with partners including Amazon Web Services, Cisco, Google,
Microsoft, Oracle, Pegasystems, Salesforce, SAP, ServiceNow, Workday and many others.
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December 31, 2025 Form 10-K
Industry Solutions
Our Industry Solutions practice was established as part of Cognizant’s strategy to build differentiation at the industry
level. The practice integrates industry technologists and thought leaders specialized in vertical micro-segments. These teams
work with specialized partners to develop industry-specific products and services that enable clients to improve productivity,
increase operational excellence and accelerate innovation.
Intuitive Operations and Automation
Our Intuitive Operations and Automation practice helps clients build and run modern operations through two main
vehicles: AI-led automation, which includes advisory and process and IT automation solutions designed to simplify and
accelerate automation adoption, and business process outsourcing services, which help deliver business outcomes including
revenue growth, increased customer and employee satisfaction and cost savings. Our automation advisory, implementation and
managed services experts partner with clients to transform end-to-end processes, design and manage the next-generation human
and digital workforce, enable seamless experiences and achieve multi-fold productivity increases. Our technology-driven
business process outsourcing services incorporate key AI use cases to help clients transform and run functions and industry-
specific processes such as finance and accounting, omni-channel customer care, loan origination, annotation services, location-
based services and medical data management.
Software and Platform Engineering
Our Software and Platform Engineering practice helps clients develop modern enterprises through digital software
engineering products, services and solutions that support optimization and modernization of their IT estates and deliver new
value for their customers. This practice manages service-delivery platforms that enable enterprise transformation at scale and
accelerate the wide use of GenAI in the enterprise. Our clients can leverage data, technologies and our digital engineering,
design and product development capabilities to build world-class experiences, and a responsive, agile and intuitive framework
for continuous innovation. Areas of focus are:
•
Digital engineering, which delivers modern business software;
•
Application development and management, which improves or reimagines applications; and
•
Quality engineering and assurance, which helps clients build and run the highest quality software.
Digital Experience Services (Cognizant Moment)
Cognizant Moment is our digital experience practice, designed to help clients leverage the power of AI to reimagine
customer experiences and engineer innovative strategies aimed at driving growth. Cognizant Moment delivers intelligent
ecosystem orchestration, connecting experiences as well as their underlying data, technology and operations across the entire
enterprise. This approach enables clients to leverage GenAI's content generation capabilities alongside human ingenuity to
innovate and differentiate by informing and automating processes, and creating dynamic, hyper-personalized experiences for
their customers.
Security
Established in 2026, our Security practice helps clients protect their digital environments and maintain regulatory
compliance through comprehensive cybersecurity solutions. We provide governance, risk and compliance services to manage
cyber risks and ensure adherence to regulatory standards, threat and vulnerability management to enable proactive detection and
mitigation of sophisticated threats, data protection and privacy services including classification, encryption and leakage
prevention, identity and access management solutions delivering identity-centric, zero-trust security and cloud and
infrastructure security services protecting network, workload and cloud environments.
Global Delivery Model
We operate in an integrated global delivery model, with delivery centers worldwide to provide our full range of services
to our clients. Our model leverages methodologies, tools, AI and other enablers to optimize delivery by enhancing people's
capabilities through technology. We continue to modernize our delivery operations through lean processes, increased
automation and integrated, AI-infused systems. Our employees are deployed at client sites, local or in-country delivery centers,
regional delivery centers and offshore delivery centers, as required to best serve our clients. Our extensive facilities, technology
and communications infrastructure are designed to enable the effective collaboration of our global workforce across locations
and geographies.
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December 31, 2025 Form 10-K
Competition
The markets for our services are highly competitive, characterized by a large number of participants and subject to rapid
change. Competitors may include systems integration firms, contract programming companies, application software companies,
cloud computing service providers, traditional consulting firms, professional services groups of computer equipment
companies, infrastructure management companies, outsourcing companies, boutique digital companies and clients' in-house
technology resources, such as GCCs. Our direct competitors include, among others, Accenture, Atos, Capgemini, CGI, Deloitte
Digital, DXC Technology, EPAM Systems, Genpact, HCL Technologies, IBM Consulting, Infosys Technologies, Tata
Consultancy Services and Wipro. In addition, we compete with numerous smaller local companies in the various geographic
markets in which we operate. For additional information, see Part I, Item 1A. Risk Factors.
The principal competitive factors affecting the markets for our services include the provider’s reputation and experience,
strategic advisory capabilities, digital and AI capabilities, performance and reliability, responsiveness to customer needs,
financial stability, corporate governance and competitive pricing of services. Accordingly, we rely on the following to compete
effectively:
•
investments to scale our AI capabilities;
•
our recruiting, training and retention model;
•
an entrepreneurial culture and approach to our work;
•
a broad client referral base;
•
investment in process improvement and knowledge capture;
•
our global delivery model;
•
financial stability and good corporate governance;
•
our partnerships;
•
continued focus on responsiveness to client needs, quality of services and competitive prices; and
•
project management capabilities and technical expertise.
Intellectual Property, Certain Trademarks, Trade Names and Service Marks
We provide value to our clients based, in part, on our proprietary innovations, methodologies, software, reusable
knowledge capital and other IP assets. We recognize the importance of IP and its ability to differentiate us from our
competitors. Accordingly, we have made investments in protecting our IP, including areas directed at AI-related technologies.
We seek IP protection for many of our innovations and rely on a combination of patent, copyright and trade secret laws,
confidentiality procedures and contractual provisions to protect our IP. We have registered, and applied for the registration of,
U.S. and international trademarks, service marks, and domain names to protect our brands, including our Cognizant brand,
which is one of our most valuable assets. We own or are licensed under a number of patents, trademarks and copyrights of
varying duration, relating to our products and services. We also have policies requiring our employees to respect the IP rights of
others. While our proprietary IP rights are important to our success, we believe our business as a whole is not materially
dependent on any particular IP right or any particular group of patents, trademarks, copyrights or licenses, other than our
Cognizant brand.
Cognizant® and other trademarks appearing in this report are registered trademarks or trademarks of Cognizant and its
affiliates in the United States and other countries. This Annual Report on Form 10-K also contains trademarks, trade names and
service marks of other companies, which are the property of their respective owners. Solely for convenience, trademarks, trade
names and service marks referred to in this Annual Report on Form 10-K may appear without the ®, ™ or SM symbols, but
such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our
rights to these trademarks, trade names and service marks. We do not intend our use or display of other parties’ trademarks,
trade names or service marks to imply, and such use or display should not be construed to imply a relationship with, or
endorsement or sponsorship of us by, these other parties.
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December 31, 2025 Form 10-K
Our People and Culture
Cognizant's success is powered by our talented global workforce and distinct culture. As of December 31, 2025, we had
approximately 351,600 employees, with 256,900 in India, 41,600 in North America, 14,600 in Continental Europe, 7,800 in the
United Kingdom and 30,700 in various other locations throughout the rest of the world. As of December 31, 2025, our
workforce is comprised of approximately 39% women and 61% men.
•
Culture and engagement: Guided by our core values - Work as One, Raise the Bar, Dare to Innovate, Do the Right
Thing, and Own It - we strive to foster a culture that is highly innovative, collaborative, inclusive and ethical.
– Employees are encouraged to embrace a strong spirit of empowerment and entrepreneurship: our grassroots
Bluebolt program enables any employee to submit ideas for implementation with clients or internally.
– In 2025, Cognizant achieved a GUINNESS WORLD RECORD™ for the largest online GenAI hackathon by
hosting a global Vibe Coding Week. Associates were given access to leading vibe coding tools to sharpen their
AI skills, producing more than 30,000 prototypes.
– Leader training on anti-discrimination, a strong ethics & compliance ecosystem and global affinity employee
groups help support our efforts to provide equal opportunity for all.
– Our people are passionate about volunteerism, with over 240,000 hours volunteered for causes such as
community skilling and education.
– Our annual engagement survey scores are above industry benchmarks, and we strive to continuously address
feedback at the enterprise and people manager levels.
– We’re recognized as a top employer by leading organizations based on the experiences and real feedback of
our people. In 2025, this included: Forbes World's Best Employers, Time’s World’s Best Companies,
Newsweek’s America's Greatest Workplaces, Fortune’s America’s Most Innovative Companies and
Ethisphere’s World’s Most Ethical Companies, among others.
•
Skill relevance and growth: Amidst the rapidly changing AI-driven landscape, Cognizant aims to fuel strong
performance and future readiness at all levels through our award-winning learning engine.
– Our proprietary talent intelligence model is designed to identify skills needed and ready our workforce ahead
of technology transformation.
– AI skill building is a core focus – from July 2023 to end of 2025, we have upskilled more than 330,000
associates on GenAI via more than 1,000 learning programs.
– In addition to our deep institutional learning expertise, we provide cutting edge training through alliances and
partnerships with leading organizations, such as Google, Microsoft, Anthropic and NVIDIA.
– We encourage learning through experimentation by providing access to leading AI tools, including Microsoft
Copilot, GitHub CoPilot, Google Gemini Code Assist and Windsurf.
– We evolve roles and career pathways for the future. We are redesigning career paths to transition roles highly
impacted by AI to higher value roles by building adjacent skills.
– We build future workforce capability both internally and in our communities. In 2025, we doubled our
Synapse program commitment having achieved our original goal early, and are now targeting upskilling 2
million future workers by 2030.
•
Career and talent development: We believe broad, interdisciplinary experience strengthens talent in an AI-driven
world. We empower our people to build unique and varied careers across the Cognizant ecosystem.
– We enable regular role movement and career growth and progression through an internal job move program
and talent marketplace.
– We regularly promote talent across the business, including both role-based and performance-based promotions,
promoting approximately 110,000 employees since 2023.
– We have structured talent review and performance processes to support career growth and development.
– We build our leadership pipeline and capability across levels through leadership development initiatives,
assessments based on our leadership competencies, multi-stakeholder feedback, coaching, accelerated
programs, partnerships with leading universities and more.
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December 31, 2025 Form 10-K
•
Total rewards: We reward employees through compensation, benefits, and recognition programs to help support their
physical, mental and financial wellbeing.
– Our comprehensive portfolio includes compensation programs, healthcare benefits, risk protection coverage,
overall wellbeing and family care, tax savings programs, income protection, retirement and financial planning
resources, time off programs, recognition and more.
– We promote awareness and provide access to mental health support through mental health training for all
employees, wellbeing events, and free counseling sessions via our Employee Assistance Program, among other
initiatives. Additionally, Cognizant’s mental health ally network has hundreds of trained and certified
employees who provide peer-to-peer support.
– Cognizant’s recognition platform celebrates service milestones and enables leader-initiated and peer-to-peer
awards for both non-monetary and monetary appreciation. Recognition is also enabled through manager
toolkits, funds for team celebrations, a global annual awards event and more.
•
Talent sourcing: We avail ourselves of broad talent pools to identify the best talent to shape the future.
– Cognizant believes early-in-career talent have a competitive edge in this dynamic moment as AI natives and
lifelong learners. Our talent programs across regions focus on robust upskilling, AI exposure and real-world
experience.
– We have strengthened our North America talent strategy with expanded recruiting, training, a revitalized
internship program, and increased office presence across multiple locations, while in India we are scaling
operations into tier two cities to access emerging talent pools.
– To meet dynamic client demand, we utilize subcontractors for additional capacity and agility. Historically,
subcontractor usage has been immaterial relative to our overall headcount.
– We are not party to any significant collective bargaining agreements.
– Globally, we manage visa-dependent roles with careful consideration of business needs and associated risks.
For additional information, see Part I, Item 1A. Risk Factors.
– For the years ended December 31, 2025 and 2024, our Voluntary Attrition - Tech Services was 13.9% and
15.9%, respectively.
Governmental Regulation
As a result of the size, breadth and geographic diversity of our business, our operations are subject to a variety of laws and
regulations in the jurisdictions in which we operate, including with respect to import and export controls, temporary work
authorizations or work permits and other immigration laws, content requirements, trade restrictions, tariffs, taxation, anti-
corruption, the environment, government affairs, internal and disclosure control obligations, data privacy, intellectual property,
employee and labor relations, and compliance with these laws may impact our capital expenditures, earnings and competitive
position. For additional information, see Part I, Item 1A. Risk Factors as well as the "Business Outlook" section within Part I.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Executive Summary.
Information About Our Executive Officers
The following table identifies our current executive officers:
Name
Age
Capacities in Which Served
Ravi Kumar S
54
Chief Executive Officer
Jatin Dalal
51
Chief Financial Officer
Balu Ganesh Ayyar
64
President - Intuitive Operations and Automation and Industry Solutions
Kathryn Diaz
56
Chief People Officer
Surya Gummadi
49
President - Americas
Alina Kerdman
45
SVP, Controller and Chief Accounting Officer
John Kim
58
Chief Legal Officer, Chief Administrative Officer and Corporate Secretary
Rajesh Varrier
56
President - Operations and Managing Director, Cognizant India
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December 31, 2025 Form 10-K
Ravi Kumar Singisetti (also referred to as Ravi Kumar S or Ravi Kumar) has been our Chief Executive Officer since
January 2023. Prior to joining Cognizant, Mr. Kumar was the President of Infosys, an Indian multinational technology
company, where he led the Infosys Global Services Organization across all global industry segments from January 2016 to
October 2022. While serving as President of Infosys, he also served as Chairman of the Board of various Infosys subsidiaries.
Prior to such role, Mr. Kumar served in positions of increasing authority at PricewaterhouseCoopers, Cambridge Technology
Partners, Oracle Corporation, Sapient and Infosys. He is a member of the Board of Directors of Transunion, where he is a
member of the Compensation Committee and the Technology Committee. He is also on the Board of Directors for the U.S.
Chamber of Commerce. Mr. Kumar has a bachelor’s degree in engineering from Shivaji University and an MBA from Xavier
Institute of Management, India.
Jatin Dalal has been our Chief Financial Officer since December 2023. Prior to joining Cognizant, Mr. Dalal served as
Chief Financial Officer of Wipro Limited, a publicly traded multinational technology and services consulting company, from
April 2015 to November 2023 and assumed additional responsibilities as President from December 2019 to November 2023.
Previously, he held various leadership positions at Wipro, including CFO, IT Business from 2011 to 2015. He joined Wipro in
2002 from the General Electric Company, where he began his career in 1999. Mr. Dalal holds a bachelor’s degree in
engineering from the National Institute of Technology in Surat, India. He also has a postgraduate diploma in business
administration with a specialization in finance and international business from Narsee Monjee Institute of Management Studies
in Mumbai, India. In addition, Mr. Dalal is a Chartered Accountant (India), a Chartered Management Accountant (UK) and a
Chartered Financial Analyst (USA). Mr. Dalal has earned an Advanced Computer Security Certificate from Stanford
University. Mr. Dalal is also an alumnus of the Advanced Management Program of The Wharton School of the University of
Pennsylvania.
Balu Ganesh Ayyar has held the title of President - Intuitive Operations, and Automation and Industry Solutions since
March 2025. His previous title was EVP and President, Intuitive Operations and Automation and Industry Solutions, which he
had from April 2023 to March 2025. From July 2022 to April 2023, he served as EVP and President, Intuitive Operations and
Automation. Previously, he was EVP and President, Digital Operations from August 2019 to June 2022. Prior to joining
Cognizant, Mr. Ayyar was the CEO of Mphasis, a global IT services company listed in India, from 2009 to 2017. Prior to
Mphasis, Mr. Ayyar spent nearly two decades with Hewlett-Packard, holding a variety of leadership roles across multiple
geographies.
Kathryn (Kathy) Diaz has held the title of Chief People Officer since March 2025. From September 2023 to March 2025,
her title was EVP, Chief People Officer. She held the Chief People Officer role on an interim basis from May 2023 to
September 2023. Prior to being appointed Chief People Officer, Ms. Diaz served as SVP, Head of Global Total Rewards at
Cognizant from July 2020 until September 2023. Prior to joining Cognizant in 2020, Ms. Diaz was VP, Total Rewards at
Pearson, a multinational publishing and education company. She was the VP of Global Compensation, Global Mobility and HR
Systems at PVH (the parent company of Calvin Klein and Tommy Hilfiger). Previously, Ms. Diaz spent over 20 years in a
series of HR leadership positions at Merck & Co, Inc. She holds a bachelor’s degree in accounting from Rider University and
an MBA from Lehigh University.
Surya Gummadi has held the title of President - Americas since March 2025. Previously, his title was EVP and President,
Americas from January 2023 to March 2025. He held the President of the Americas role on an interim basis from late June
2022 to January 2023. Prior to being appointed President of the Americas, Mr. Gummadi served as Senior Vice President of our
Health Sciences business segment from April 2022 to January 2023, Senior Vice President and head of our Healthcare business
from July 2020 to April 2022, Vice President and market leader of our Healthcare business from February 2020 to July 2020
and Vice President and market head for our Health Plans business from October 2017 to February 2020. Prior to that, he served
in a variety of roles during his more than 20-year tenure with Cognizant. He holds a degree in mechanical engineering from the
Indian Institute of Technology, Bombay.
Alina Kerdman has been our Senior Vice President, Controller and Chief Accounting Officer since July 2025. She
previously served as SVP, Assistant Global Controller, from December 2023 to June 2025. From June 2019 to December 2023,
she served as VP, Global Revenue Controller and Head of External Reporting. Prior to that she held several finance roles of
increasing responsibility at the Company. She joined the Company in 2010 from Ernst & Young LLP, where she began her
career in 2001. She holds a bachelor’s degree in accounting and finance from the New York University Stern School of
Business. She is also an alumna of the Advanced Management Program of the Wharton School of the University of
Pennsylvania.
John Kim has held the title of Chief Legal Officer, Chief Administrative Officer and Corporate Secretary since March
2025. From February 2024 to March 2025 his title was EVP, Chief Legal Officer, Chief Administrative Officer and Corporate
Secretary. Previously, he was EVP, General Counsel, Chief Corporate Affairs Officer and Secretary, holding this position from
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December 31, 2025 Form 10-K
March 2021 to February 2024. Before March 2021, he served as Senior Vice President, Interim General Counsel from January
2021 to March 2021, after joining Cognizant in November 2019 as our Senior Vice President and Deputy General Counsel,
Global Commercial Contracts. Prior to joining Cognizant in 2019, Mr. Kim held a variety of senior leadership roles at
Capgemini from January 2012 to November 2019, including Global Head of Big Deals. Prior to Capgemini, Mr. Kim served as
U.S. Counsel for WNS Global Services from July 2009 to June 2011 and held a variety of leadership roles at Cendant Travel
Distribution Services (now known as Travelport) from January 2001 to June 2006, including General Counsel and Chief
Compliance Officer. He holds a bachelor’s degree in English literature from Columbia University and obtained his law degree
from Cornell Law School.
Rajesh Varrier has held the title of President – Operations and Managing Director, Cognizant India since March 2025.
From October 2024 to March 2025, he held the title of EVP, Global Head of Operations, and Chairman and Managing Director,
Cognizant India. Upon joining the Company in September 2024 until October 2024, he served as EVP, Global Head of
Operations. Prior to joining Cognizant, Mr. Varrier held a number of positions at Infosys, an Indian multinational technology
company, including serving as EVP, Global Head of Services from November 2023 to April 2024, EVP, Head of Operations
Infosys Americas and Global Head of Digital Experience and Microsoft Practice from June 2023 to October 2023 and SVP,
Global Head of Digital Experience and Microsoft Practice from April 2018 to June 2023. Prior to that, Mr. Varrier was CIO and
Digital Officer for Aditya Birla Sun Life Insurance. Mr. Varrier is a member of the Nasscom Executive Council and a member
of the Board of Directors of Cognizant Foundation India. Mr. Varrier holds a bachelor’s degree in physics, and a postgraduate
degree in Computer Engineering from the University of Mumbai.
None of our executive officers are related to any other executive officer or to any of our Directors. Our executive officers
are appointed annually by the Board of Directors and generally serve until their successors are duly appointed and qualified.
Available Information
We make our SEC filings available free of charge through our website at www.cognizant.com as soon as reasonably
practicable after we electronically file such material with, or furnish such material to, the SEC. No information on our website
is incorporated by reference into this Form 10-K or any other public filing made by us with the SEC.
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Item 1A. Risk Factors
Investing in our common stock involves a high degree of risk. Before making an investment decision, you should
carefully consider the risks described below in addition to the other information set forth in this Annual Report on Form 10-
K, including “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”
and our consolidated financial statements and related notes, and the other documents and materials we file with the SEC, as
well as news releases and other information we publicly disseminate from time to time. The disclosure below reflects our
beliefs and opinions as to the factors, events, or contingencies that could materially and adversely affect us in the future.
References to past events are provided as examples only and are not intended to be a complete list or representation as to
whether or not the other risks described below have occurred in the past. The risks described below are not the only risks or
uncertainties we face. Additional risks and uncertainties not previously known to us, or that we currently see as immaterial,
may also adversely affect us. The occurrence of any of the following risks or additional risks and uncertainties not presently
known to us, or that we currently believe to be immaterial, could materially and adversely affect our business, financial
condition, prospects, or results of operations. In such case, the trading price of our common stock could decline, and you
may lose all or part of your original investment. Our actual results could differ materially from those anticipated in our
forward-looking statements as a result of specific factors, including the risks and uncertainties described below.
Additionally, macroeconomic and geopolitical developments may amplify many of the risks discussed below to which
we are subject. The extent of the impact of macroeconomic and geopolitical developments on our financial and operating
performance depends significantly on the duration and severity of such macroeconomic and geopolitical developments, the
actions taken to contain or mitigate their impact and any changes in client behaviors as a result thereof.
Risks Related to our Business and Operations
Our results of operations could be adversely affected by macroeconomic and geopolitical conditions globally and in
particular in the markets in which our clients and operations are concentrated.
Global macroeconomic conditions have a significant effect on our business as well as the businesses of our clients.
Volatile, negative or uncertain economic and geopolitical conditions, including as a result of recession or slowing economic
growth, inflation, higher interest rates, tightening of credit markets and changes in trade policy (including trade disputes, the
threat or imposition of tariffs or other trade restrictions and related retaliatory actions), have in the past and could in the future
cause our clients to reduce, postpone or cancel spending on new or existing projects with us, negatively affecting our business
and making it more difficult for us to accurately forecast client demand and have available the right resources to profitably
address such client demand. For example, in the recent past some of our clients continued to reduce their discretionary spending
in response to economic and geopolitical uncertainty, which negatively impacted our revenues. Clients may reduce demand for
services quickly and with little warning, which may cause us to incur extra costs where we have employed more personnel than
client demand supports. Further, our business depends on our ability to obtain payment from our clients of the amounts they
owe us for the work we perform. Macroeconomic or geopolitical conditions, including recessionary or inflationary pressures,
trade disputes or other challenges could result in financial difficulties for our clients that have in the past and could in the future
cause clients to delay payments to us, request modifications to their payment arrangements or default on their payment
obligations to us.
Our business is particularly susceptible to economic and political conditions in the markets where our clients or operations
are concentrated. Our revenues are highly dependent on clients located in the United States and Europe, and any adverse
economic, geopolitical or legal uncertainties or adverse developments, including due to the uncertainty related to the economic
environment and inflation, natural or man-made disasters and extreme weather, geopolitical events and conflicts, labor or trade
disputes or similar events, may cause clients in these geographies to reduce their spending and materially adversely impact our
business. Many of our clients are in the financial services and healthcare industries, so any decrease in growth or significant
consolidation in these industries or regulatory policies that restrict these industries may reduce demand for our services.
Economic and political developments in India, where a significant majority of our operations and technical personnel are
located, or in other countries where we maintain delivery operations, may also have a significant impact on our business and
costs of operations. As a developing country, India has experienced and may continue to experience high inflation and wage
growth, fluctuations in gross domestic product growth and volatility in currency exchange rates, any of which could materially
adversely affect our cost of operations. Additionally, we benefit from governmental policies in countries that encourage foreign
investment and promote the ease of doing business, such as tax incentives, and any change in policy or circumstances that
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December 31, 2025 Form 10-K
results in the elimination of such benefits or degradation of the rule of law, or imposition of new adverse restrictions or costs on
our operations could have a material adverse effect on our business, results of operations and financial condition.
We face intense and evolving competition and our service offerings must keep pace with significant technological
advances in the rapidly changing markets we compete in.
The markets we serve and operate in are highly competitive, subject to rapid change and characterized by a large number
of participants, as described in “Part I, Item 1. Business-Competition.” We compete on the basis of reputation and experience,
strategic advisory capabilities, digital and AI capabilities, performance and reliability, responsiveness to customer needs,
financial stability, corporate governance and competitive pricing of services. The less we are able to differentiate our services
and solutions and/or clearly convey the value of our services and solutions, the more difficulty we have in winning new work in
sufficient volumes and at our target pricing and overall economics. In addition to large, global competitors, we face competition
in many geographic markets from numerous smaller, local competitors that may have more experience with operations in these
markets, have well-established relationships with our desired clients, or be able to provide services and solutions at lower costs
or on terms more attractive to clients than we can. Additionally, we face competition from clients' in-house technology
resources, such as GCCs, which may provide a lower cost alternative to our services. Consolidation activity may also result in
new competitors with greater scale, a broader footprint or vertical integration that makes them more attractive to clients as a
single provider of integrated products and services. In addition, concurrent use by many clients of multiple professional service
providers means that we are required to be continually competitive on the quality, scope and pricing of our offerings or face a
reduction or elimination of our business. Competitors may also be willing, at times, to take on more risk or price contracts
lower than us in an effort to enter the market or increase market share. If we are not able to supply clients with services that
they deem superior and successfully apply current business models with market level pricing while managing discounts, we
may lose business to competitors and face downward pressure on gross margins and profitability. Any inability to compete
effectively would materially adversely affect our business, results of operations and financial condition.
Our relationships with our third-party alliance partners, who supply us with technology, including platforms and software,
are also critical to our ability to provide many of our services and solutions that address client demands or requirements. There
can be no assurance that we will be able to maintain such relationships or that such technology will be available on the expected
timelines or for the anticipated prices. Among other things, such alliance partners may in the future decide to compete with us,
form exclusive or more favorable arrangements with our competitors or otherwise reduce our access to their technology,
thereby impairing our ability to provide the services and solutions dependent on such technology demanded or required by
clients. In addition, some of our third-party alliance partners are also our clients or suppliers of technology for our internal
operations. Any performance failure on the part of our alliance partners, or the discontinuance by such alliance partners of
technology that we have relied on them to provide for our clients or ourselves, could delay or prevent our performance unless
we engage alternative third parties to provide the equivalent technology at our cost or provide the equivalent technology
ourselves, any of which could deprive us of potential revenue or adversely impact our profitability. In addition, our third-party
alliance partners may also experience reduced demand for their technology, including as a result of changes in technology,
which could reduce demand for our services and solutions.
Our competitiveness also depends on our ability to continue to develop and implement services and solutions that
anticipate and respond to rapid and continuing changes in technology to serve the evolving needs of our clients. Examples
include digital-, cloud- and security-related offerings, AI, augmented reality, automation, blockchain, IoT, quantum and edge
computing, digital engineering and manufacturing and as-a-service solutions, among others, which are continually evolving. If
we do not sufficiently invest in new technologies, successfully adapt to industry developments and changing demand, develop
new tools and platforms that meet our clients' productivity expectations and evolve and expand our business at sufficient speed
and scale to keep pace with the demands of the markets we serve, we may be unable to develop and maintain a competitive
advantage and execute on our growth strategy, which would materially adversely affect our business, results of operations and
financial condition. Some of these technological changes have reduced or replaced the demand for some of our historical
services and solutions and will continue to do so in the future. In addition, our clients may delay spending under existing
contracts and engagements or delay entering into new contracts while evaluating new technologies. Such reductions,
replacements and delays can negatively impact our results of operations if we are unable to adapt our pricing or the pace and
level of spending on new technologies is not sufficient to make up any shortfall. Further, as we expand into these areas, we may
be exposed to operational, legal, regulatory, ethical, technological and other risks specific to such new areas, which may
negatively affect our reputation and demand for our services and solutions.
Our use of AI technologies may not be successful and may present business, financial, legal and reputational risks.
We expect the proliferation of AI will have a significant impact on our industry, and we believe our ability to compete in
this space will be critical to our financial performance. We increasingly use AI-based technologies, including GenAI, in our
client offerings and our own internal operations. We have incurred and plan to continue to incur significant development and
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December 31, 2025 Form 10-K
operational costs to build and support our AI capabilities, including costs to ensure ongoing compliance with the complex and
rapidly evolving legal landscape around AI and automation. If we fail to develop and implement AI solutions that meet our
internal and client needs, if we are unable to offer or bring AI-enabled solutions to market as effectively or with the same speed
as our competitors, or if our clients do not accept new pricing models that reflect the value of our AI-enabled solutions, we may
fail to recoup our investments in AI and our financial performance, competitive position, business and reputation may be
adversely impacted.
AI technology and services are part of a highly competitive and rapidly evolving market. We face significant competition
from our traditional competitors as well as other third parties, including those that are new to the market, and our clients may
develop their own AI-related capabilities. Some services that we historically performed for our clients have been and will
continue to be replaced by AI or other forms of automation, including our own AI-enabled client offerings. Each of the
foregoing may lead to reduced demand for our services or harm our ability to obtain favorable pricing or other terms for our
services, which could have a material adverse effect on our business, results of operations and financial condition.
AI technology and services require access to high-quality datasets, models (including foundation models), and other AI
system components. We currently rely, in part, on third parties to provide these components. In the future, we may face
difficulties acquiring the necessary rights from third parties due to market competition, pricing changes, licensing restrictions
and other factors. This challenge could hinder our ability to develop, implement or maintain AI technologies. To overcome this,
we may need to invest in alternative strategies, such as forming partnerships or developing our own resources.
In addition, the development, adoption and use of AI technologies continue to evolve rapidly and ineffective or inadequate
AI development or deployment practices by us, our clients or other third parties may not deliver anticipated efficiencies and
could result in unintended consequences. Such consequences may include, for example, operational or compliance risks;
reliance on outputs that reflect biased, incomplete or inaccurate information; unauthorized disclosure of sensitive information;
operational inefficiencies leading to decreased productivity; deliberate misuse; or infringement of third-party IP rights.
Additionally, the use of AI by us or our business partners may create new or exacerbate existing cybersecurity vulnerabilities,
including novel risk vectors that may not be immediately identifiable. Ongoing uncertainty around the performance, safety and
security of new and emerging AI applications requires continued significant investment in monitoring, validation and
implementation of governance processes and controls across the AI lifecycle relating to security, accuracy, bias and other
variables to ensure alignment with industry standards and meet customer expectations. These efforts can be complex and
resource intensive, could potentially impact our profit margins, may not sufficiently address risks and may cause decreased
demand for our services or harm to our business, results of operations, financial condition or reputation.
Furthermore, the legal and regulatory landscape surrounding AI technologies is rapidly evolving, uncertain and varies
significantly by jurisdiction. Authorities around the world are applying, or considering applying, laws and regulations related to
IP, cybersecurity, export controls, privacy, data security and data protection to AI and automated decision-making technologies,
as well as adopting AI-specific regulatory frameworks, such as emerging U.S. state AI laws and the EU AI Act which entered
into force in 2024 and parts of which began applying in 2025. These laws are subject to ongoing interpretation and
implementation and may impose obligations on companies developing and using AI or automated decision-making
technologies. Given the pace of regulatory development and the potential for divergent or evolving scope, interpretation and
application of these laws and regulations, we may not always be able to anticipate how courts and regulators will apply existing
laws to AI or how new AI-specific legal frameworks will be implemented, or otherwise ensure compliance with these
frameworks. Regulatory approaches may differ or conflict across jurisdictions, which could require us to expend resources to
tailor or limit certain AI-related offerings in specific markets. For example, the EU AI Act may increase costs or impact the
operation of our AI services. Compliance with new or changing laws, regulations, industry standards or ethical requirements
and expectations relating to AI may impose significant operational costs, require additional investment in governance,
documentation and controls, or necessitate changes to our service offerings or business practices, particularly as we expand the
use of such technologies. In certain circumstances, these requirements could delay, limit or prevent our ability to develop,
deploy or use AI technologies. Failure to effectively navigate and comply with this evolving landscape may result in legal
liability, regulatory action, or brand and reputational harm. Although we maintain a responsible AI framework aligned with
recognized international standards that includes risk assessment processes, oversight structures and controls across the AI
lifecycle, it may not be sufficient to identify, assess, and mitigate all AI-related risks. The effectiveness of our responsible AI
framework depends on numerous factors, including the accuracy of risk assessments, the adequacy of implemented controls,
and our ability to adapt to rapidly changing AI capabilities and use cases. There can be no assurance that our responsible AI
framework will adequately identify, assess and prevent all AI-related risks.
Finally, AI technology is subject to heightened public and media scrutiny, including with respect to workplace impacts,
privacy and ethical concerns. Negative public perception could adversely affect customer demand and our investments in AI
technology, which could in turn adversely affect our business or reputation.
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December 31, 2025 Form 10-K
If we are unable to attract, train and retain skilled employees to satisfy client demand, including highly skilled
technical personnel and personnel with experience in key AI and digital areas, as well as senior management to lead our
business globally, our business and results of operations may be materially adversely affected.
Our success is dependent, in large part, on our ability to keep our supply of skilled employees, including project
managers, IT engineers and senior technical personnel, in particular those with experience in key AI and digital areas, in
balance with client demand and on our ability to attract and retain senior management with the knowledge and skills to lead our
business globally. We must hire or upskill, integrate, retain and motivate our large workforce with diverse skills and expertise
to serve client demands around the globe, respond quickly to rapid and ongoing technological, industry and macroeconomic
developments and grow and manage our business. We also must continue to maintain a senior leadership team that, among
other things, is effective in executing on our strategic goals and growing our service capabilities. The loss of senior executives,
or the failure to attract, integrate and retain new senior executives as the needs of our business require, could have a material
adverse effect on our business and results of operations.
Competition for skilled labor is intense and, in some jurisdictions in which we operate and in key AI and digital areas,
there are more open positions than qualified individuals to fill these positions. We compete for employees not only with other
companies in our industry but also with companies in other industries, such as software services, engineering services and
financial services companies, as well as our clients' GCCs. In addition, changes in immigration laws or policies, or varying
applications of immigration laws and policies, have limited the availability of certain work visas in the U.S., which could
exacerbate competition for skilled labor. Our business has experienced in the past and may experience in the future employee
attrition at levels which could cause us to incur increased costs to hire new employees with the desired skills. We may not be
successful in recovering through price increases or other mechanisms any increases we make to compensation, which could
adversely affect our profitability and operating margin. Costs associated with recruiting and training employees are significant.
If we are unable to hire, retain or deploy employees with the needed skillsets or if we are unable to adequately equip our
employees with the skills needed, this could materially adversely affect our business.
Many of our contracts with clients are short-term, and our business, results of operations and financial condition
could be adversely affected if our clients terminate their contracts on short notice.
Consistent with industry practice, many of our contracts with clients are short-term or can be terminated by our clients
with short notice and without significant early termination cost. Even if not terminated, clients may be able to delay, reduce or
eliminate spending on the services and solutions we provide, choose not to retain us for additional stages of a project, try to
renegotiate the terms of a contract or cancel or delay additional planned work. Terminations and such other events may result
from factors that are beyond our control and unrelated to our work product or the progress of the project, including the business,
financial or labor conditions of a client, changes in ownership, management or the strategy of a client or economic or market
conditions generally or specific to a client’s industry. When contracts are terminated or spending delayed, we lose the
anticipated revenues and might not be able to eliminate our associated costs in a timely manner. In particular, the loss of a
significant client or a few significant clients could materially reduce revenues for the Company as a whole or for a particular
business segment. In addition, our operating margins in subsequent periods could be lower than expected. If we are unable to
replace the lost revenues with other work on terms we find acceptable or effectively eliminate costs, our business, results of
operations and financial condition could be adversely affected.
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December 31, 2025 Form 10-K
Our failure to meet specified service levels or milestones required by certain of our client contracts may result in
our client contracts being less profitable, potential liability for penalties or damages or reputational harm.
Many of our client contracts include clauses that tie our compensation to the achievement of agreed-upon performance
standards, productivity improvements or milestones. Failure to satisfy any such requirements could significantly reduce our fees
under the contracts, increase the cost to us of meeting performance standards or milestones, delay expected payments, subject
us to potential damage claims under the contract terms or harm our reputation. Further, our work with governmental clients
exposes us to additional risks inherent in the government contracting process, including stricter regulatory requirements and
heightened reputational and contractual risks. The use of new technologies in our offerings (including GenAI) can expose us to
additional risks if those technologies fail to work as predicted, which could lead to cost overruns, project delays, financial
penalties, or damage to our reputation. Clients also often have the right to terminate a contract and pursue damages claims for
serious or repeated failure to meet these service commitments. Some of our contracts provide that a portion of our
compensation depends on performance measures such as cost-savings, revenue enhancement, benefits produced, business goals
attained and adherence to schedule. These goals can be complex and may depend on our clients’ actual levels of business
activity or may be based on assumptions that are later determined not to be achievable or accurate. As such, these provisions
may increase the variability in revenues and margins earned on those contracts and have in the past resulted, and could in the
future result, in significant losses on such contracts. Further, if we do not accurately estimate the effort, anticipated productivity
improvements, costs or timing for meeting our contractual commitments or completing engagements to a client's satisfaction,
our contracts have in the past and could in the future have delivery inefficiencies and be less profitable than expected or
unprofitable.
We may not be able to achieve our profitability goals and maintain our capital return strategy.
Our goals for profitability and capital return rely upon a number of assumptions, including our ability to improve the
efficiency of our operations and make successful investments to grow and further develop our business. Our profitability is
impacted by our ability to accurately estimate, attain, and sustain revenues from client engagements, margins and cash flows
over contract periods and general macroeconomic and geopolitical conditions. Our profitability also depends on the efficiency
with which we run our operations (including our ability to leverage new technologies such as AI to improve productivity) and
the cost of our operations, especially the compensation and benefits costs of our employees. We have incurred, and may
continue to incur, substantial costs related to implementing our strategy to optimize such costs, and we may not realize the
ultimate cost savings that we expect. We may not be able to efficiently utilize our employees if increased regulation, policy
changes or administrative burdens of immigration, work visas or client worksite placement prevents us from deploying our
employees on a timely basis, or at all, to fulfill the needs of our clients. Our utilization rates are further affected by a number of
factors, including our ability to transition employees from completed projects to new assignments, hire and assimilate new
employees, forecast demand for our services and thereby maintain an appropriate headcount in each of our geographies and
workforce and manage attrition, and our need to devote time and resources to training, professional development and other
typically non-chargeable activities. Increases in wages and other costs, including as a result of attrition, may also put pressure
on our profitability.
With respect to capital return, our ability and decisions to pay dividends and repurchase shares depend on a variety of
factors, including the cash flow generated from operations, our cash and investment balances, our net income, our overall
liquidity position, potential alternative uses of cash, such as acquisitions, and anticipated future economic conditions and
financial results. Failure to carry out our capital return strategy may adversely impact our reputation with shareholders and
shareholders’ perception of our business and the trading price of our common stock.
We face challenges related to growing our business organically as well as inorganically through acquisitions, and
we may not be able to achieve our targeted growth rates or successfully acquire, invest in or integrate businesses.
Achievement of our targeted growth rates requires continued significant organic growth of our business as well as
inorganic growth through acquisitions. To achieve such growth, we must, among other things, continue to significantly expand
our global operations, in particular with respect to AI and digital, and scale our infrastructure to support such business growth
and ensure that our service offerings remain responsive to market demand. Continued business growth increases the complexity
of our business and places significant strain on our management, employees, operations, systems, delivery, financial resources
and internal financial control and reporting functions, which we will have to continue to develop and improve to sustain such
growth. Our ability to successfully manage change associated with the various business transformation initiatives is critical for
our overall strategy execution. We must continually recruit and train new employees, retain and reskill, as necessary, existing
sales, technical, finance, marketing and management employees with the knowledge, skills and experience that our business
model requires and effectively manage our employees worldwide to support our culture, values, strategies and goals.
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Additionally, we expect to continue pursuing strategic and targeted acquisitions and investments to enhance our offerings
of services and solutions or to enable us to expand our talent, experience and capabilities in key AI and digital areas or in
particular geographies or industries. We may not be successful in identifying suitable opportunities, completing targeted
transactions or achieving the desired results or strategic objectives in the timeframe we expect or at all, such opportunities may
divert our management's time and focus away from our core business and realizing the desired results of a particular transaction
may depend upon competition, market trends, regulatory developments, additional costs or investments and the actions of
suppliers or other third parties. We may face challenges in effectively integrating acquired businesses into our ongoing
operations, including the implementation of controls, processes and policies appropriate for a multinational public company at
acquired companies that may have previously lacked such functions in areas such as cybersecurity, IT and privacy, among
others, and in assimilating and retaining key executives and employees of those businesses into our culture and organizational
structure, and these risks may be magnified by the size and number of transactions we execute.
If we are unable to manage our growth effectively, complete acquisitions of the number, magnitude and nature we have
targeted, or successfully integrate any acquired businesses into our operations, we may not be able to achieve our targeted
growth rates or improve our market share, profitability or competitive position generally or in specific markets or services.
We face legal, reputational and financial risks if we fail to protect client and/or Cognizant data from cybersecurity
incidents.
In order to provide our services and solutions, we depend on global information technology networks and systems, to
process, transmit, host and securely store electronic information (including our confidential information and the confidential
information of our clients) and to communicate among our locations around the world and with our clients, suppliers, vendors
and alliance partners (including numerous cloud service providers). Security breaches, employee malfeasance, or human or
technological error have in the past and could in the future cause shutdowns or disruptions of our, our vendors' or our clients'
operations and potential unauthorized access and/or disclosure of our or our clients’ sensitive data, which in turn could
jeopardize projects that are critical to our operations or the operations of our clients’ businesses and have other adverse impacts
on our business or the business of our clients.
In addition, the products, services and software that we provide to our clients, or the third-party components we use to
provide such products, services and software, have in the past and may in the future unintentionally contain or introduce
cybersecurity threats or vulnerabilities to our clients’ information technology networks. Furthermore, the security measures we
implement for our cybersecurity solutions clients may not function as expected or be sufficient to identify or protect against
certain cybersecurity attacks. Our clients maintain their own proprietary, sensitive, or confidential information that could be
compromised in a cybersecurity incident, or their systems may be disabled or disrupted as a result of such an incident. Our
clients, regulators, or other third parties have and may in the future attempt to hold us liable for any such losses or damages
resulting from such an incident, including through contractual indemnification clauses.
Like other global companies, we and our clients, suppliers, alliance partners (including numerous cloud service providers)
and other vendors we interact with face threats to data and systems, including by nation state threat actors, insider threats
(including inappropriate access), perpetrators of random or targeted malicious cyberattacks, computer viruses, malware, worms,
bot attacks or other destructive or disruptive software and attempts to misappropriate client information and cause system
failures and disruptions. Such attacks, or other currently unanticipated threats, could occur in the future. In addition, recent
geopolitical tensions have heightened the overall risk of cyber-threats and, while we have taken steps to mitigate such risks,
those steps may not be successful. The emergence and maturation of AI capabilities is already being used by malicious actors to
amplify cybersecurity attacks. This development may also lead to new or more sophisticated methods of attack and/or a more
significant impact on affected parties.
A security compromise of our information systems, of our clients' information systems or of those of other businesses
with which we interact (including cloud service providers and software vendors) that results in confidential information being
accessed by unauthorized or improper persons, could harm our reputation and expose us to regulatory actions up to and
including criminal prosecution, client attrition due to reputational concerns or otherwise, containment and remediation expenses
and claims brought by our clients or others for breaching contractual confidentiality and security provisions or data protection
laws. Monetary damages imposed on us could be significant and may impose costs in excess of insurance policy limits or not be
covered by our insurance at all, and our insurers may not continue to provide coverage on reasonable terms or may disclaim
coverage as to any future claims. Techniques used by bad actors to obtain unauthorized access, disable or degrade service, or
sabotage systems continuously evolve and may not immediately produce signs of intrusion, and we may be unable to anticipate
these techniques or to implement adequate preventative measures. In addition, a security breach could require that we expend
substantial additional resources related to the security of our information systems, diverting resources from other projects and
disrupting our businesses.
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Our clients, suppliers, subcontractors and other third parties with whom we do business, including in particular cloud
service providers and software vendors, generally face similar cybersecurity threats, and we must rely on the safeguards
adopted by these parties. If these third parties do not have adequate safeguards or their safeguards fail, it might result in
breaches of our systems or applications and unauthorized access to or disclosure of our and our clients’ confidential data. In
addition, we are subject to vulnerabilities in third-party technology components we use in our business and are typically not
aware of such vulnerabilities until we receive notice from the third parties who have created the exposure. Due to this delay, our
responses to such vulnerabilities may not be adequate or prompt enough to prevent their exploitation.
Although our cybersecurity risk management program utilizes various procedures and controls to mitigate our exposure to
the risks described above, the cybersecurity threat landscape is rapidly evolving and increasingly sophisticated. There can be no
assurance that the procedures and controls that we implement, or that our clients, suppliers, subcontractors and other third
parties with whom we do business implement, will be sufficient to protect from cybersecurity threats. Additionally, any
remediation measures that we have taken or that we may undertake in the future may be insufficient to prevent future attacks or
insufficient for us to quickly recover from any future attack to efficiently continue our business operations.
Fluctuations in foreign currency exchange rates, or the failure of our hedging strategies to mitigate such
fluctuations, can adversely impact our profitability, results of operations and financial condition.
Fluctuations in foreign currency exchange rates can also have adverse effects on our revenues, income from operations
and net income when items denominated in other currencies are translated or remeasured into U.S. dollars for presentation of
our consolidated financial statements. We have entered into foreign exchange forward and option contracts intended to partially
offset the impact of the movement of the exchange rates on future operating costs and to mitigate foreign currency risk on
foreign currency denominated net monetary assets. However, the hedging strategies that we have implemented, or may in the
future implement, to mitigate foreign currency exchange rate risks may not reduce or completely offset our exposure to foreign
exchange rate fluctuations and may expose our business to unexpected market, operational and counterparty credit risks. We are
particularly susceptible to wage and cost pressures in India and the exchange rate of the Indian rupee relative to the currencies
of our client contracts due to the fact that the substantial majority of our employees are in India while our contracts with clients
are typically in the local currency of the country where our clients are located.
Pandemics, epidemics or other outbreaks of disease have had and may in the future have a material adverse
impact upon our business, liquidity, results of operations and financial condition.
Any pandemic, epidemic or other outbreak of disease may have widespread, rapidly evolving and unpredictable impacts
on global society, economies, financial markets and business practices by, among other things, causing significant loss of life,
curtailing congregation of people and disrupting communications and travel. Such events may have a material adverse impact
upon, our business, liquidity, results of operations and financial condition, including as a result of reduced client demand for
our services, closures of our clients' facilities that materially impair our ability to deliver services to our clients and satisfy
contractually agreed upon service levels and increased strain on employees and management, as we saw at the height of the
COVID-19 pandemic.
The ultimate extent to which any future pandemics, epidemics or other outbreaks of disease impact our business, liquidity,
results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be
predicted with confidence, including the severity of the disease to which the pandemic, epidemic or other outbreak relates;
delivery, adoption and effectiveness of vaccines or other treatments for the disease, including any variants; the duration and
extent of the event and waves of infection; travel restrictions and social distancing; the duration and extent of business closures
and business disruptions; and the effectiveness of actions taken to contain, treat and prevent the disease. If we or our clients
experience prolonged shutdowns or other business disruptions, our business, liquidity, results of operations, financial condition
and the trading price of our common stock may be materially adversely affected, and our ability to access the capital markets
may be limited. Further, any future pandemic, epidemic or other outbreak of disease, and the volatile regional and global
economic conditions stemming from such an event, could precipitate or amplify the other risk factors that we identify in this
report, any of which could have a material adverse impact to our business.
Extreme weather and risks arising from the transition to a lower-carbon economy may impact our business.
There are inherent climate- and weather-related risks everywhere that we conduct our business. Developments related to
regulatory, social or market dynamics, stakeholder expectations, national and international climate change policies, the actual or
perceived frequency or intensity of extreme weather events or the availability and functionality of critical infrastructure and
resources, in addition to other factors resulting from such developments or that may not otherwise be known to or anticipated
by us, could significantly disrupt our supply chain, our clients' operations and our ability to deliver services. Such events could
significantly increase our costs and expenses and harm our revenues, cash flows and financial performance. Further, natural
disasters and adverse weather events, such as droughts, wildfires, storms, sea-level rise and flooding, occurring more
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frequently, with less predictability or with greater intensity due to climate change or other drivers, could cause community
disruptions and impact our employees’ abilities to commute or to work from home safely and effectively.
Evolving and conflicting sustainability and societal related expectations or standards could adversely affect our
business or damage our reputation.
Shifting stakeholder expectations and evolving regulatory and disclosure standards around sustainability and societal
matters could impact our business. We are subject to, and expect to become increasingly subject to, laws, regulations and
international treaties relating to sustainability. As these new laws, regulations, treaties and similar initiatives and programs
continue to be adopted and implemented, we will be required to comply or potentially face market access limitations,
enforcement actions, civil suits or sanctions, including fines. If new laws or regulations are more stringent than current legal or
regulatory requirements, we may experience increased compliance burdens and costs to meet such obligations. If we fail to
comply with new laws, regulations, treaties, or reporting requirements, our reputation and business could be adversely
impacted. Our ability to meet our sustainability ambitions is also subject to external factors outside of our control including the
ability and willingness of our suppliers to reduce emissions and the advancement of new emission reducing technologies. In
addition, global clients often rely on sustainability rating systems for bids and buying practices, and yet the criteria used in the
ratings may conflict and change frequently, and we cannot predict how these third parties will score us, nor can we have any
assurance that they score us or other companies accurately, or that we will be able to score well as such criteria change. We
supplement our participation in ratings systems with published disclosures of our sustainability and societal activities, but some
investors may desire other disclosures that we do not provide.
At the same time, an increasing number of stakeholders, including regulators, and lawmakers have expressed or pursued
conflicting views, legislation and investment expectations with respect to sustainability and societal ratings, ambitions and
disclosures, which may expose us to additional legal, financial or reputational risks based upon our sustainability and societal
ambitions and disclosures. We may be unable to satisfy all of our stakeholders on these matters, and as a result our reputation,
our ability to attract or retain employees and our business could be negatively affected.
If our risk management, business resilience and disaster recovery plans are not effective and our global delivery
capabilities are impacted, our business and results of operations may be materially adversely affected and we may suffer
harm to our reputation.
Our business model is dependent on our global delivery capabilities, which include coordination among our delivery
centers in India, our other global and regional delivery centers, the offices of our clients and our associates worldwide. System
failures, outages and operational disruptions may be caused by factors outside of our control, such as hostilities, political unrest,
terrorist attacks, cybersecurity incidents, power or water shortages or telecommunications failures, natural or man-made
disasters or other catastrophic events (including the impact of extreme weather conditions), and public health emergencies,
epidemics and pandemics, affecting the geographies where our people, equipment and clients are located. Our risk
management, business resilience and disaster recovery plans may not be effective at predicting, mitigating, or responding to the
effects of such disruptions, particularly in the case of catastrophic events. Even if our operations are unaffected or recover
quickly from any such events, if our clients cannot timely resume their own operations due to a catastrophic event, they may
reduce or terminate our services, which may adversely affect our results of operations. Any such disruption may result in lost
revenues, a loss of clients, liabilities relating to disruptions in service, expenditures to repair or replace damaged property and
reputational damage, and could demand significant management time and attention, any of which would have an adverse effect
on our business, results of operations and financial condition.
Legal, Regulatory and Legislative Risks
A substantial portion of our employees in the United States, United Kingdom, EU and other jurisdictions rely on
visas to work in those areas such that any restrictions on such visas or immigration more generally or increased costs of
obtaining such visas or increases in the wages we are required to pay employees on visas may affect our ability to
compete for and provide services to clients in these jurisdictions, which could materially adversely affect our business,
results of operations and financial condition.
A substantial portion of our employees in the United States and in many other jurisdictions, including countries in
Europe, rely upon temporary work authorization or work permits, which makes our business particularly vulnerable to changes
and variations in immigration laws and regulations, including written changes and policy changes to the manner in which the
laws and regulations are interpreted or enforced, and potential enforcement actions and penalties that might cause us to lose
access to such visas. The political environment in the United States, the United Kingdom and other countries in recent years has
included significant support for anti-immigrant legislation and administrative changes. Many of these recent changes have
resulted in, and various proposed and enacted changes may result in, increased difficulty in obtaining timely visas, whether as a
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result of visa application rejections, delays in processing applications, significantly increased costs to obtain visas, prevailing
wage requirements for our employees on visas or otherwise, which could in turn impact our ability to staff projects. In addition,
immigration reform, including as a result of changes to immigration policies, and the increased uncertainty surrounding such
policies in light of the U.S. administration's immigration agenda and related litigation, may have a material adverse impact on
companies like ours that have a substantial percentage of our employees on visas. Our principal operating subsidiary in the
United States utilizes a high number of skilled workers holding H-1B and L-1 visas and, as a result, may be subject to increased
costs and visa processing delays upon the effectiveness of any such laws, regulations, policy changes or executive orders. In the
EU, many countries continue to implement new regulations to ensure compliance with the EU Directive of 2014 to harmonize
immigration rules for intracompany transferees in most EU member states and to facilitate the transfer of managers, specialists
and graduate trainees both into and within the region. The changes have had significant impact on mobility programs and have
led to new notification and documentation requirements for companies sending employees to EU countries. Recent changes or
any additional adverse revisions to immigration laws and regulations in the jurisdictions in which we operate may cause us
delays, staffing shortages, additional costs or an inability to bid for or fulfill projects for clients, any of which could have a
material adverse effect on our business, results of operations and financial condition.
Anti-outsourcing legislation, if adopted, and negative perceptions associated with offshore outsourcing could
impair our ability to serve our clients and materially adversely affect our business, results of operations and financial
condition.
The practice of outsourcing services to organizations operating in other countries is a topic of political discussion in the
United States, which is our largest market, as well as other regions in which we have clients. For example, in the United States,
measures aimed at limiting or restricting the performance of services from an offshore location or imposing burdens on U.S.
companies that utilize such services have been put forward for consideration at both the federal and state levels to address
concerns over the perceived association between offshore outsourcing and the loss of jobs domestically. If any such measure is
enacted in the United States or another region in which we have clients, our ability to provide services to our clients could be
impaired.
In addition, from time to time there has been publicity about purported negative experiences associated with offshore
outsourcing, such as alleged domestic job loss and theft and misappropriation of sensitive client data, particularly involving
service providers in India. Current or prospective clients may elect to perform certain services themselves or may be
discouraged from utilizing global service delivery providers like us due to negative perceptions that may be associated with
using global service delivery models or firms. Any slowdown or reversal of existing industry trends toward global service
delivery would seriously harm our ability to compete effectively with competitors that provide the majority of their services
from within the country in which our clients operate.
We are subject to numerous and evolving legal and regulatory requirements and client expectations in the many
jurisdictions in which we operate, and violations of, unfavorable changes in or an inability to meet such requirements or
expectations could harm our business.
We provide services to clients and have operations in many parts of the world and in a wide variety of different industries,
subjecting us to numerous, evolving, and sometimes conflicting, standards, laws and regulations on matters as diverse as trade
controls and sanctions, immigration (including temporary work authorizations or work permits), content requirements, trade
restrictions, tariffs, taxation, antitrust laws, anti-money laundering and anti-corruption laws (including the FCPA and the U.K.
Bribery Act), the environment, including climate change regulation and reporting requirements, government affairs, internal
and disclosure control obligations, data security, privacy and data protection, intellectual property, employment and labor
relations, human rights and AI. For example, we are required to comply with increasingly complex and changing data security
and privacy laws and regulations in the many jurisdictions in which we operate that regulate the collection, storage, use,
disclosure, transfer and security of personal data, including U.S. federal and state laws (such as the California Consumer
Privacy Act, as amended by the California Privacy Rights Act, and the Health Insurance Portability and Accountability Act),
and non-U.S. laws, such as the India Digital Personal Data Protection Act, 2023, the U.K. General Data Protection Regulation
(“GDPR”) and the E.U. GDPR. These laws and regulations are continuously evolving and developing, creating significant
uncertainty as they may be interpreted and applied differently from country to country, creating inconsistent or conflicting
requirements. We face significant regulatory compliance costs and risks as a result of the size and breadth of our business, and
these costs may increase as a result of changes in government policy. For example, the Government of India implemented the
Labor Code, which we expect to modestly increase our defined benefit costs prospectively. Certain aspects of the Labor Code
rely on the issuance of rules and regulations. Additionally, the Government of India is in the process of clarifying certain
aspects of the Labor Code. The issuance of rules and regulations as well as the outcome of these clarifications could increase
new employment obligations, create operational and administrative burdens, trigger higher compliance penalties, and
enforcement uncertainties during the transition period, which may result in increased costs in 2026 and future years due to
expanded social security and employment coverage.
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We are also subject to a wide range of potential enforcement actions, audits or investigations regarding our compliance
with these laws or regulations in the conduct of our business, and any finding of a violation could subject us to a wide range of
civil or criminal penalties, including fines, debarment, or suspension or disqualification from government contracting,
prohibitions or restrictions on doing business in one or more jurisdictions, loss of clients and business, legal claims by clients
and unfavorable publicity or damage to our reputation. We could also face significant compliance and operational burdens and
incur significant costs in our efforts to comply with or rectify non-compliance with these laws or regulations. Such burdens or
costs may result in an adverse effect on our financial condition and results of operations.
We commit significant financial and managerial resources to comply with our internal control over financial reporting
requirements, but we have in the past identified and may in the future identify material weaknesses or significant deficiencies in
our internal control over financial reporting that cause us to incur incremental remediation costs in order to maintain adequate
controls.
Our employees, subcontractors, vendors, agents, alliance partners, the companies we acquire and their employees, vendors
and agents, and other third parties with which we associate, have in the past and could in the future take actions that violate
policies or procedures designed to promote legal and regulatory compliance or applicable anticorruption laws or regulations.
Violations of these laws or regulations by us, our employees or any of these third parties could subject us to criminal or civil
enforcement actions (whether or not we participated or knew about the actions leading to the violations), including fines or
penalties, disgorgement of profits and suspension or disqualification from work, including U.S. federal contracting, any of
which could materially adversely affect our business, including our results of operations and our reputation.
Changes in tax laws or in their interpretation or enforcement, failure by us to adapt our corporate structure and
intercompany arrangements or adverse outcomes of tax audits, investigations or proceedings could have a material
adverse effect on our effective tax rate, results of operations and financial condition.
The interpretation of tax laws and regulations in the many jurisdictions in which we operate and the related tax accounting
principles are complex and require considerable judgment to determine our income taxes and other tax liabilities worldwide.
Tax laws and regulations affecting us and our clients, including applicable tax rates, and the interpretation and enforcement of
such laws and regulations are subject to change as a result of macroeconomic, geopolitical and other factors, and any such
changes or changes in tax accounting principles could increase our effective worldwide income tax rate and have a material
adverse effect on our net income, cash flows and financial condition. We routinely review and update our corporate structure
and intercompany arrangements, including transfer pricing policies, consistent with applicable laws and regulations, to align
with our evolving business operations across the numerous jurisdictions, such as the United States, India and the United
Kingdom, in which we operate. Failure to successfully adapt our corporate structure and intercompany arrangements to align
with our evolving business operations may increase our worldwide effective tax rate and have a material adverse effect on our
earnings, cash flows and financial condition.
Our worldwide effective income tax rate may increase or our financial condition may be materially impacted as a result of
developments, changes in interpretations and assumptions made, additional guidance that may be issued and ongoing and future
actions the Company has or may take with respect to our corporate structure and intercompany arrangements.
Additionally, we are subject to routine tax audits, investigations and proceedings in various jurisdictions. Tax authorities
have disagreed, and may in the future disagree, with our judgments, and are taking increasingly aggressive positions, including
with respect to our intercompany transactions. For example, we are currently involved in an ongoing dispute with the ITD in
which the ITD asserts that we owe additional taxes for two transactions by which CTS India repurchased shares from its
shareholders, as more fully described in Note 10 to the consolidated financial statements. We may not accurately predict the
outcomes of these audits, investigations and proceedings and the amounts ultimately paid upon their resolution could be
materially different from the amounts previously included in our income tax provision. Adverse outcomes in any such audits,
investigations or proceedings could increase our tax exposure and cause us to incur increased expense, which could materially
adversely affect our results of operations and financial condition.
Our business subjects us to considerable potential exposure to litigation and legal claims and we could be
materially adversely affected if we incur legal liability.
We are subject to, and may become a party to, a variety of litigation or other claims and suits that arise from time to time
in the conduct of our business. Our business is subject to the risk of litigation involving current and former employees, clients,
our clients' customers, alliance partners, subcontractors, suppliers, competitors, shareholders, government agencies or others
through private actions, class actions, whistleblower claims, administrative proceedings, regulatory actions or other litigation.
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While we maintain insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential
liabilities and is subject to various exclusions as well as deductibles and caps on amounts recoverable.
Our client engagements expose us to significant potential legal liability and litigation expense if we fail to meet our
contractual obligations or otherwise breach obligations to third parties or if our subcontractors breach or dispute the terms of
our agreements with them and impede our ability to meet our obligations to our clients. We also face considerable potential
legal liability from a variety of other sources. Our acquisition activities have in the past and may in the future be subject to
litigation or other claims, including claims from employees, clients, stockholders, or other third parties. We have also been the
subject of a number of putative securities class action complaints and putative shareholder derivative complaints relating to the
matters that were the subject of our now concluded internal investigation into potential violations of the FCPA and other
applicable laws, and may be subject to such legal actions for other matters in the future. See "Part I, Item 3. Legal Proceedings"
for more information. We establish reserves for these and other matters when a loss is considered probable and the amount can
be reasonably estimated; however, the estimation of legal reserves and possible losses involves significant judgment and may
not reflect the full range of uncertainties and unpredictable outcomes inherent in litigation, and the actual losses arising from
particular matters may exceed our estimates and materially adversely affect our results of operations.
If we infringe upon the IP rights of others or our IP rights are infringed upon, our business may be adversely
affected.
Third parties have in the past and may in the future claim that we infringe upon their IP rights. Further, in most of our
contracts, we have agreed to indemnify our clients for liabilities and expenses related to IP infringement and, in some instances,
the cost associated with these indemnities may exceed the revenue that we receive from the client. Any such claims of IP
infringement could harm our reputation, cause us to incur substantial costs in defending ourselves or our clients, expose us to
considerable legal liability or prevent us from offering some services or solutions in the future.
We rely on a combination of patent, copyright and trade secret laws, confidentiality procedures and contractual provisions
to protect our IP. The existing laws in the various countries in which we provide services or solutions may offer only limited
protection of our intellectual property and are subject to change at any time. Furthermore, the legal landscape surrounding IP
protection of software technologies, including AI, is rapidly evolving and as a result there is uncertainty concerning the scope
of IP protection for our software IP rights. We are engaging in and may in the future have to engage in legal action to protect
our own IP rights. Enforcing our rights may require considerable time, money and oversight, and we may not be successful in
our efforts.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Risk Management and Strategy
Cybersecurity risk management is an integral part of our overall enterprise risk management program. Our cybersecurity
risk management program, which is managed by Cognizant’s Corporate Security team, is designed to identify, assess and
manage risks from cybersecurity threats and provides a framework for handling cybersecurity threats and incidents. The
program is also aligned with the risk assessment framework established by the enterprise risk management team.
Our cybersecurity risk management framework includes steps for assessing the severity of a cybersecurity threat
(including an escalation process for potentially material cybersecurity threats and incidents to an internal committee comprised
of members of senior management), identifying the source of a cybersecurity threat (including whether the cybersecurity threat
is associated with a third-party service provider), implementing cybersecurity countermeasures and mitigation strategies. The
internal committee is responsible for assessing the materiality of cybersecurity threats and incidents and informs designated
members of executive leadership and of the Board of Directors of material cybersecurity threats and incidents.
Cognizant's cybersecurity risk management program is guided by industry-recognized security frameworks, including
NIST SP 800-37 (Risk Management Framework), NIST SP 800-30 (Risk Assessment Guide), and NIST SP 800-53 (Security
and Privacy Controls). In addition, Cognizant maintains global and regional information security certifications such as ISO
27001, UK Cyber Essentials Plus, and ENS, which collectively help demonstrate Cognizant's commitment to a robust,
independently validated security program. Cognizant considers the NIST Cybersecurity Framework (CSF 2.0) in designing our
cybersecurity program and engages an independent third party to assess program maturity. Additionally, we also engage third-
party cybersecurity experts to conduct penetration testing among other items. Key findings from the third-party assessments are
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summarized and communicated to the Company's senior leadership and the Audit Committee, and remediation actions are
implemented to enhance our overall cybersecurity program.
We require our vendors to comply with privacy and cybersecurity requirements, and we perform risk assessments of
vendors, including their ability to protect data from unauthorized access. We include data protection and security content as part
of annual training required of employees.
In 2025, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially
affect our business strategy, results of operations, or financial condition. For further discussion of the cybersecurity risks and
threats we face, please see Item 1A. “Risk Factors”.
Governance
As part of our overall enterprise risk management program, we prioritize the identification and management of
cybersecurity risk at several levels. Our Board of Directors has overall oversight responsibility for our risk management, and
delegates cybersecurity risk management oversight to the Audit Committee, which is responsible for reviewing that
management has processes in place designed to identify and evaluate cybersecurity risks and implement processes and
programs to manage cybersecurity risks and mitigate cybersecurity incidents.
Management is responsible for identifying, considering and assessing material cybersecurity risks on an ongoing basis,
establishing processes designed to ensure that such potential cybersecurity risk exposures are monitored, putting in place
appropriate mitigation measures and maintaining cybersecurity programs.
Our cyber risk assessment program is managed by our Corporate Security team, which is led by our CSO, who has over
25 years of experience in the cybersecurity and technology industry. The CSO reports to Cognizant's CLO. The CSO manages
multiple teams within Corporate Security that are operationally responsible for the security of the Company, including Global
Cyber Operations, Business Information Security, Global Business Resilience, Integrated Risk Management and Security
Architecture (including AI Security), each of which provides regular updates to the CSO regarding cyber threat intelligence,
cyber incidents and cyber risk metrics as part of their security responsibilities. The CSO works closely with the CIO, who is
responsible for Cognizant's information technology and digital transformation strategy. Together, the CSO and CIO have a
mutual set of responsibilities to align, implement and govern security policies, standards and technology controls throughout the
enterprise. On a quarterly basis, the CSO and CIO provide updates to the Audit Committee on, among other things, key
cybersecurity metrics, status of projects to strengthen the Company's information security systems and assessments of the
Company's security program. The Audit Committee reports to the Board of Directors, which also receives periodic updates on
such matters.
Item 2. Properties
We have operations in major metro areas across nearly 50 countries around the world, with our worldwide headquarters
located in a leased facility in Teaneck, New Jersey in the United States. We utilize a global delivery model with delivery centers
worldwide, including in-country, regional and global delivery centers. We have over 22 million square feet of owned and leased
facilities for our delivery centers. Our largest delivery center presence is in India, representing approximately 90% of our total
delivery centers on a square-foot basis, with the largest presence in Chennai (7 million square feet), Hyderabad (3 million
square feet), Pune (2 million square feet), Kolkata (2 million square feet) and Bangalore (2 million square feet). We also have a
significant number of delivery centers in other countries, including the United States, Philippines, Canada, and countries
throughout Europe and Latin America. In addition, we have sales and marketing offices, innovation and GenAI labs, and digital
design and consulting centers in major business markets, including New York, London, Paris, Melbourne and Singapore,
among others. Our facilities are used to support clients across all four reportable business segments.
We believe our current facilities are adequate to support our operations in the immediate future, and that we will be able to
obtain suitable additional facilities on commercially reasonable terms as needed.
Item 3. Legal Proceedings
See Note 14 to our consolidated financial statements.
Item 4. Mine Safety Disclosures
Not applicable.
Cognizant
25
December 31, 2025 Form 10-K
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
Our Class A common stock trades on the Nasdaq Stock Market under the symbol “CTSH.” As of December 31, 2025, the
number of holders of record of our Class A common stock was 88 and the approximate number of beneficial holders of our
Class A common stock was 697,100.
Cash Dividends
During 2025, we paid quarterly cash dividends of $0.31 per share, or $1.24 per share in total for the year. In February
2026, our Board of Directors approved a cash dividend of $0.33 per share with a record date of February 18, 2026 and a
payment date of February 26, 2026. We intend to continue to pay quarterly cash dividends in accordance with our capital
allocation framework. Future dividend payments depend on a variety of factors, including cash flow generated from operations,
cash and investment balances, net income, overall liquidity position, potential alternative uses of cash, such as acquisitions, and
anticipated future economic conditions and financial results.
Issuer Purchases of Equity Securities
Our stock repurchase program was initially adopted in 2017 and has been amended from time to time, including most
recently in March 2025, to authorize the repurchase of up to $13.5 billion, excluding fees and expenses, of our Class A common
stock through open market purchases, including under a 10b5-1 Plan in accordance with applicable federal securities laws. The
repurchase program does not have an expiration date and had a remaining balance of $1,918 million as of December 31, 2025.
The timing of repurchases and the exact number of shares to be purchased are determined by management, in its discretion, or
pursuant to a 10b5-1 Plan, and depend upon market conditions and other factors.
During the three months ended December 31, 2025, we repurchased $325 million of our Class A common stock under
our stock repurchase program as follows:
Month
Total Number
of Shares
Purchased
Average
Price Paid
per Share
Total Number of
Shares Purchased
as Part of Publicly
Announced
Plans or
Programs
Approximate
Dollar Value of Shares
that May Yet Be
Purchased under the
Plans or Programs
(in millions)
October 1, 2025 - October 31, 2025
739,820 $
67.58
739,820 $
2,193
November 1, 2025 - November 30, 2025
2,079,104
72.81
2,079,104
2,042
December 1, 2025 - December 31, 2025
1,491,234
82.90
1,491,234
1,918
Total
4,310,158 $
75.40
4,310,158
We regularly purchase shares in connection with our stock-based compensation plans as shares of our Class A common
stock are tendered by employees for payment of applicable statutory tax withholdings. For the three months ended
December 31, 2025, we purchased 0.2 million shares at an aggregate cost of $13 million in connection with employee tax
withholding obligations.
Recent Sales of Unregistered Securities
None.
Cognizant
26
December 31, 2025 Form 10-K
Performance Graph
The following graph compares the cumulative total stockholder return on our Class A common stock with the cumulative
total return on the S&P 500 Index and the S&P 500 Information Technology Index for the period beginning December 31, 2020
and ending on the last day of our last completed fiscal year. The stock performance shown on the graph below is not indicative
of future price performance.
COMPARISON OF CUMULATIVE TOTAL RETURN(1)(2)
Among Cognizant, the S&P 500 Index and the S&P 500 Information Technology Index
Comparison of Cumulative Five Year Total Return
S&P 500 Information Technology Index
S&P 500 Index
Cognizant Technology Solutions Corporation
12/31/20
12/31/21
12/31/22
12/31/23
12/31/24
12/31/25
$50
$100
$150
$200
$250
$300
Company / Index
Base
Period
12/31/20
12/31/21
12/31/22
12/31/23
12/31/24
12/31/25
Cognizant Technology Solutions Corp
$
100 $ 109.64 $
71.77 $
96.44 $
99.77 $ 109.43
S&P 500 Index
100
128.71
105.40
133.10
166.40
196.16
S&P 500 Information Technology Index
100
134.53
96.60
152.48
208.30
258.38
(1) Graph assumes $100 invested on December 31, 2020 in our Class A common stock, the S&P 500 Index and the S&P
500 Information Technology Index.
(2) Cumulative total return assumes reinvestment of dividends.
Item 6. [Reserved]
Cognizant
27
December 31, 2025 Form 10-K
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Executive Summary
Cognizant is one of the world’s leading professional services companies, engineering modern businesses and delivering
strategic outcomes for our clients. We help clients modernize technology, reimagine processes and transform experiences so
they can stay ahead in today's fast-changing world, where AI is reshaping organizations in every field. As an AI builder, we
provide deep expertise at the intersection of industry and technology, combining our perspective with extensive knowledge of
our clients' organizations to build industry-specific platforms and incorporate context into systems, AI models and custom
solutions. We tailor our services and solutions to specific industries with an integrated global delivery model that employs
client service and delivery teams based at client locations and dedicated global and regional delivery centers. Our services
include consulting, application development, systems integration, quality engineering and assurance, engineering research and
development, application maintenance, infrastructure and security as well as business process services and automation.
2025 Financial Results1
Revenues
Income from Operations
Operating Margin
Diluted EPS
$19,736M
$21,108M
FY '24
FY '25
$2.89B
$3.03B
$3.39B
$3.33B
FY '24 FY '25
FY '24 FY '25
14.7%
15.3%
16.1%
15.8%
FY '24 FY '25
FY '24 FY '25
$4.51
$4.75
$4.56
$5.28
FY '24 FY '25
FY '24 FY '25
GAAP
Adjusted1
GAAP
Adjusted1
GAAP
Adjusted1
Revenue up $1,372 million or
7.0% from 2024; an increase
of 6.4% in constant currency1
Income from Operations up
$497 million or 17.2% from
2024
Adjusted Income from
Operations1 up $301 million or
9.9% from 2024
Operating margin up 140
basis points from 2024
Adjusted Operating Margin1
up 50 basis points from 2024
Diluted EPS up $0.05 or 1.1%
from 2024
Adjusted Diluted EPS1 up
$0.53 or 11.2% from 2024
During the year ended December 31, 2025, revenues increased by $1,372 million as compared to the year ended
December 31, 2024, representing an increase of 7.0%, or 6.4% on a constant currency basis1. Our acquisition of Belcan
contributed 260 basis points to revenue growth. Additionally, revenues were positively impacted by growth in our Health
Sciences and Financial Services segments, partially offset by weakness in our Products and Resources (excluding the
acquisition of Belcan) and Communications Media and Technology segments.
Our operating margin and Adjusted Operating Margin1 increased to 16.1% and 15.8%, respectively, for the year ended
December 31, 2025, from 14.7% and 15.3%, respectively, for the year ended December 31, 2024. Our 2025 GAAP and
Adjusted Operating Margins were positively impacted by net savings generated from our NextGen program, operational
efficiencies and the beneficial impact of foreign currency exchange rate movements, partially offset by increased compensation
costs and the dilutive impact of the acquisition of Belcan. In addition, our GAAP operating margin for 2025 was positively
impacted by 30 basis points, or $62 million, from the gain on sale of property and equipment, and our GAAP operating margin
for 2024 was negatively impacted by NextGen charges, both of which were excluded from our Adjusted Operating Margin1.
Cognizant
28
December 31, 2025 Form 10-K
1 Adjusted Income From Operations, Adjusted Operating Margin, Adjusted Diluted EPS and constant currency revenue growth
are not measures of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more
information and reconciliations to the most directly comparable GAAP financial measures.
As a global professional services company, we compete on the basis of the knowledge, experience, insights, skills and
talent of our employees and the value they can provide to our clients. We closely monitor attrition trends focusing on the metric
that we believe is most relevant to our business. For the year ended December 31, 2025 our Voluntary Attrition - Tech Services
was 13.9% as compared to 15.9% for the year ended December 31, 2024. We finished 2025 with approximately 351,600
employees as compared to 336,800 employees at the end of 2024.
In July 2025, the OBBBA was enacted in the United States, which, among other provisions, repealed the requirement to
capitalize U.S. R&E costs. As a result, we do not believe it is more likely than not that we will realize our deferred tax asset of
$390 million related to R&E costs capitalized outside the United States. These amounts would have otherwise been available to
offset certain future U.S. taxes on our non-U.S. earnings, which, as a result of this repeal, we no longer project to be applicable
to us. Therefore, in the third quarter of 2025, we recorded a one-time, non-cash income tax expense of $390 million. This
impacted our full year 2025 GAAP diluted EPS by $0.80, which is added back for the calculation of Adjusted EPS. Other than
this impact, we do not expect the OBBBA to significantly impact our effective income tax rate. Additionally, as a result of this
repeal, our cash taxes during 2025 were reduced by approximately $200 million as compared to our initial cash tax projections
prior to the repeal. These assessments are based upon our current interpretation of the OBBBA, which may change as a result of
future clarifications or guidance.
The Government of India implemented labor law reforms effective November 21, 2025, including the Code on Social
Security, 2020. As a result, during the fourth quarter of 2025, we recorded a one-time increase to our defined benefit liability
for past service of $147 million, in "Other noncurrent liabilities" in our consolidated statement of financial position with a
corresponding increase in "Accumulated other comprehensive income (loss)". Additionally, we anticipate a modest increase in
our defined benefit costs prospectively. Certain aspects of the Labor Code rely on the issuance of rules and regulations.
Additionally, the Government of India is in the process of clarifying certain aspects of the Labor Code. The issuance of rules
and regulations as well as the outcome of these clarifications could impact our compensation and benefit expenses in India.
Business Outlook
See "Overview" within Part I, Item 1. Business for information on our strategic approach.
We continue to expect our clients' focus to be on their transformation into AI-ready, technology-driven, data-enabled,
customer-centric and differentiated businesses. To support this transformation and drive greater business resiliency, clients have
demanded and may increasingly demand services and solutions that deliver productivity and cost savings. We believe clients
will continue to contend with industry-specific changes driven by evolving digital technologies, uncertainty in the regulatory
environment, industry consolidation and convergence as well as international trade policies, including tariffs, and other
macroeconomic and geopolitical factors. This includes the uncertainty related to the global economy, which has affected and
may continue to affect their demand for our services and discretionary work.
We increasingly use AI-based technologies, including GenAI, in our client offerings and our own internal operations. AI
technologies and services are part of a highly competitive and rapidly evolving market. We plan to continue to make significant
investments in our AI capabilities to meet the needs of our clients and harness AI's value in a flexible, secure, scalable and
responsible way. As AI-based technologies or other forms of automation evolve, demand for some services that we currently
perform for our clients may be reduced and our ability to obtain favorable pricing or other terms for some of our services may
be diminished.
Potential tax law and other regulatory and administrative changes, including judicial decisions thereon, may impact our
future results. In addition, in March 2024, India and Mauritius signed a Protocol to amend the India-Mauritius Income Tax
Treaty. We continue to evaluate the potential impact of the amendment, which, depending on its final terms when entered into
force, could increase our effective income tax rate, as CTS India is a subsidiary of our wholly-owned Mauritius entity. For
additional information, see Part I, Item 1A. Risk Factors.
Cognizant
29
December 31, 2025 Form 10-K
Results of Operations
For a discussion of our results of operations for the year ended December 31, 2023, including a year-to-year comparison
between 2024 and 2023, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of
Operations" in our Annual Report Form 10-K for the year ended December 31, 2024.
The Year Ended December 31, 2025 Compared to The Year Ended December 31, 2024
The following table sets forth certain financial data for the years ended December 31:
% of
% of
Increase / Decrease
(Dollars in millions, except per share data)
2025
Revenues
2024
Revenues
$
%
Revenues
$ 21,108
100.0
$ 19,736
100.0
$
1,372
7.0
Operating expenses:
Cost of revenues(a)
13,991
66.3
12,958
65.7
1,033
8.0
Selling, general and administrative expenses(a)
3,240
15.3
3,223
16.3
17
0.5
Restructuring charges
—
—
134
0.7
(134)
(100.0)
Depreciation and amortization expense
550
2.6
529
2.7
21
4.0
(Gain) on sale of property and equipment
(62)
(0.3)
—
—
(62)
N/A
Income from operations and operating margin
3,389
16.1
2,892
14.7
497
17.2
Other income (expense), net
90
46
44
95.7
Income before provision for income taxes
3,479
16.5
2,938
14.9
541
18.4
Provision for income taxes
(1,258)
(713)
(545)
76.4
Income (loss) from equity method investments
9
15
(6)
(40.0)
Net income
$
2,230
10.6
$
2,240
11.3
$
(10)
(0.4)
Diluted EPS
$
4.56
$
4.51
$
0.05
1.1
Other Financial Information 2
Adjusted Income From Operations and Adjusted
Operating Margin
$
3,327
15.8
$
3,026
15.3
$
301
9.9
Adjusted Diluted EPS
$
5.28
$
4.75
$
0.53
11.2
(a)
Exclusive of depreciation and amortization expense
N/A
Not Applicable
N/A
Not Applicable2
Cognizant
30
December 31, 2025 Form 10-K
2 Adjusted Income from Operations, Adjusted Operating Margin and Adjusted Diluted EPS are not measures of financial
performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information and
reconciliations to the most directly comparable GAAP financial measures, as applicable.
Revenues - Reportable Business Segments and Geographic Markets
Revenues of $21,108 million across our business segments and geographies were as follows for the year ended
December 31, 2025:
Business Segments
FS
$6,173M
HS
$6,347M
P&R
$5,285M
CMT
$3,303M
2025 as compared to 2024
Increase
(Dollars in millions)
$
%
CC %3
Health Sciences
$ 415
7.0
6.4
Financial Services
420
7.3
6.8
Products and Resources
503
10.5
9.7
CMT
34
1.0
0.7
Total revenues
$ 1,372
7.0
6.4
Geographic Markets
NA
$15,780M
UK
$1,922M
CE
$2,090M
RoW
$1,316M
2025 as compared to 2024
Increase
(Dollars in millions)
$
%
CC %3
North America
$ 1,082
7.4
7.4
United Kingdom
95
5.2
2.1
Continental Europe
158
8.2
3.6
Europe - Total
253
6.7
2.9
Rest of World
37
2.9
4.7
Total revenues
$ 1,372
7.0
6.4
Change in revenues was driven by the following factors:
•
Revenue growth across all geographies was primarily driven by our Financial Services and Health Sciences segments,
which were positively impacted by the ramp up of several recently won large deals;
•
Our acquisition of Belcan contributed 260 basis points of growth to the overall revenue growth, including
approximately 960 basis points of growth to our Products and Resources segment, primarily in North America and to a
lesser extent the United Kingdom;
•
Our Communications Media and Technology segment has seen weakness amongst communications and media
customers, offset by growth in technology customers.
Cognizant
31
December 31, 2025 Form 10-K
3 Constant currency revenue growth is not a measure of financial performance prepared in accordance with GAAP. See “Non-
GAAP Financial Measures” for more information.
Cost of Revenues (Exclusive of Depreciation and Amortization Expense)
$12,958M
$13,991M
65.7%
66.3%
2024
2025
é
$1,033M
é
0.6% as a % of
revenues
¡ % of Revenues
Our cost of revenues consists primarily of salaries, incentive-
based compensation, stock-based compensation expense,
employee benefits, project-related immigration and travel for
technical personnel, subcontracting and costs of third-party
products and services relating to revenues. The increase, as a
percentage of revenues, was driven by increased compensation
costs, the dilutive impact of the acquisition of Belcan and
resales of third-party products in connection with our integrated
offerings strategy, partially offset by operational efficiencies
and the beneficial impact of foreign currency exchange rate
movements.
SG&A Expenses (Exclusive of Depreciation and Amortization Expense)
SG&A expenses consist primarily of salaries, incentive-based
compensation, stock-based compensation expense, employee
benefits, immigration, travel, marketing, communications,
management, finance, administrative and occupancy costs. The
decrease, as a percentage of revenues, was primarily driven by
net savings generated from our NextGen program.
$3,223M
$3,240M
16.3%
15.3%
2024
2025
é
$17M
ê
1.0% as a % of
revenues
¡ % of Revenues
Gain on Sale of Property and Equipment
During the year ended December 31, 2025, we realized a gain of $62 million on the sale of an office complex in India. For
further detail see Note 5 to our consolidated financial statements.
Depreciation and Amortization Expense
Depreciation and amortization expense increased by 4.0%, and remained relatively flat as a percentage of revenues, in 2025 as
compared to 2024. The increase in amortization expense, driven by intangible assets related to our acquisition of Belcan, was
partially offset by the decline of depreciation expense, which was driven by actions taken under our NextGen program.
Operating Margin and Adjusted Operating Margin4 - Overall
Operating Income and
Margin
2,892M
3,389M
14.7%
16.1%
2024
2025
Adjusted Operating
Income and Margin
3,026M
3,327M
15.3%
15.8%
2024
2025
The increase in our 2025 GAAP operating margin and
Adjusted Operating Margin4 was primarily driven by net
savings generated from our NextGen program, operational
efficiencies and the beneficial impact of foreign currency
exchange rate movements, partially offset by increased
compensation costs and the dilutive impact of the acquisition
of Belcan. In addition, our GAAP operating margin for 2025
was positively impacted by 30 basis points, or $62 million,
from the gain on sale of property and equipment, and our
GAAP operating margin for 2024 was negatively impacted by
NextGen charges, both of which were excluded from our
Adjusted Operating Margin.4
Cognizant
32
December 31, 2025 Form 10-K
4 Adjusted Income From Operations and Adjusted Operating Margin are not measures of financial performance prepared in
accordance with GAAP. See “Non-GAAP Financial Measures” for more information and reconciliations to the most directly
comparable GAAP financial measures, as applicable.
A predominant portion of our costs in India are denominated in the Indian rupee, representing approximately 23% of our
global operating costs during the year ended December 31, 2025. These costs are subject to foreign currency exchange rate
fluctuations, which have an impact on our results of operations. We enter into foreign exchange derivative contracts to hedge
certain Indian rupee denominated payments in India. These hedges are intended to mitigate the volatility of the changes in the
exchange rate between the U.S. dollar and the Indian rupee. Including the impact of the hedges, the depreciation of the Indian
rupee positively impacted our operating margin for the year ended December 31, 2025 by 50 basis points as compared to the
year ended December 31, 2024.
Excluding the impact of applicable designated cash flow hedges, the depreciation of the Indian rupee against the U.S.
dollar positively impacted our operating margin by approximately 70 basis points in 2025. Each additional 1.0% change in
exchange rate between the Indian rupee and the U.S. dollar will have the effect of moving our operating margin by
approximately 17 basis points (excluding the impact of our cash flow hedges). In 2025, the settlement of our cash flow hedges
negatively impacted our operating margin by approximately 15 basis points, compared to a positive impact of 5 basis points in
2024.
Segment Operating Profit
In the first quarter of 2025, we made certain changes to the internal measurement of segment operating profit for the
purpose of evaluating segment performance and resource allocation. The primary reason for the change was to reflect a more
complete cost of delivery. Specifically, segment operating profit now includes an allocation of corporate costs, which were
previously included in "unallocated costs." We have reported 2025 segment operating profits using the new allocation
methodology and have recast the 2024 results to conform to the new methodology. While we have recast the 2024 results to
conform to the new methodology, it is impracticable for us to recast our 2023 segment operating results as the detailed
information required for the allocation of such costs to the segments is not reasonably available.
Segment operating profit and operating margin percentage were as follows:
Health Sciences
$1,073M
$1,233M
18.1%
19.4%
2024
2025
Financial Services
$915M
$1,029M
15.9%
16.7%
2024
2025
Products and Resources
$771M
$787M
16.1%
14.9%
2024
2025
CMT
$393M
$436M
12.0%
13.2%
2024
2025
Segment operating profit
% Segment operating margin
In 2025, segment operating margins across all our segments were positively impacted by net savings generated from our
NextGen program, operational efficiencies and the beneficial impact of foreign currency exchange rate movements, partially
offset by increased compensation costs. In 2025, segment operating profit in the Products and Resources segment was
negatively impacted by the dilutive impact of the Belcan acquisition and by resales of third-party products in connection with
our integrated offerings strategy.
Total segment operating profit was as follows for the year ended December 31:
(Dollars in millions)
2025
% of
Revenues
2024
% of
Revenues
Increase /
(Decrease)
Total segment operating profit
$
3,485
16.5 $
3,152
16.0 $
333
Less: unallocated costs
96
0.4
260
1.3
(164)
Income from operations
$
3,389
16.1 $
2,892
14.7 $
497
The decrease in unallocated costs for 2025 as compared to 2024 was primarily driven by the 2025 gain on sale of property
and equipment and the absence of NextGen charges, partially offset by higher amortization of intangible assets and certain
corporate costs.
Cognizant
33
December 31, 2025 Form 10-K
Other Income (Expense), Net
Total other income (expense), net consists primarily of foreign currency exchange gains and losses, interest income and
interest expense. The following table sets forth total other income (expense), net for the years ended December 31:
(in millions)
2025
2024
Increase /
Decrease
Foreign currency exchange gains (losses)
$
15
$
(29)
$
44
Gains on foreign exchange forward contracts not designated as hedging instruments
3
10
(7)
Foreign currency exchange gains (losses), net
18
(19)
37
Interest income
105
119
(14)
Interest expense
(37)
(54)
17
Other, net
4
—
4
Total other income (expense), net
$
90
$
46
$
44
The foreign currency exchange gains and losses were attributed to the remeasurement of net monetary assets and
liabilities denominated in currencies other than the functional currencies of our subsidiaries. The gains on foreign exchange
forward contracts not designated as hedging instruments related to the realized and unrealized gains and losses on contracts
entered into to offset our foreign currency exposures. As of December 31, 2025, the notional value of our undesignated hedges
was $748 million. Interest income declined in 2025 as compared to 2024, driven by a mix of lower invested balances and lower
yields. Higher interest expense during 2024 was driven by the borrowing of $600 million under our revolving credit facility to
partially fund the acquisition of Belcan during the third quarter of 2024. The borrowing was subsequently repaid in the fourth
quarter of 2024 and first quarter of 2025.
Provision for Income Taxes
$713M
$1,258M
24.3%
36.2%
2024
2025
é $545M
¡ Effective Income Tax
Rate é 11.9%
The effective income tax rate for 2025 was negatively impacted
by the one-time, non-cash income tax expense of $390 million
related to the enactment of the OBBBA. See Note 10 to our
consolidated financial statements for additional information.
Net Income
The decrease in net income was primarily driven by the one-
time, non-cash income tax expense of $390 million related to
the enactment of the OBBBA, partially offset by an increase in
income from operations, including the $62 million gain on sale
of property and equipment.
$2,240M
$2,230M
11.3%
10.6%
2024
2025
ê $10M
ê 0.7% as a % of revenues
¡ % of Revenues
Non-GAAP Financial Measures
Portions of our disclosure include non-GAAP financial measures. These non-GAAP financial measures are not based on
any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial
measures calculated in accordance with GAAP, and may be different from non-GAAP financial measures used by other
companies. In addition, these non-GAAP financial measures should be read in conjunction with our financial statements
prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures to the corresponding GAAP
measures set forth below should be carefully evaluated.
Our non-GAAP financial measures Adjusted Operating Margin and Adjusted Income from Operations exclude unusual
items, such as the gain on sale of property and equipment in 2025 and NextGen charges in 2024. Our non-GAAP financial
measure Adjusted Diluted EPS excludes unusual items, such as the one-time income tax expense related to the enactment of the
OBBBA, the gain on sale of property and equipment and NextGen charges, and net non-operating foreign currency exchange
gains or losses and the tax impact of all the applicable adjustments. For further detail on the NextGen charges, see Note 4 to our
consolidated financial statements. The income tax impact of each item excluded from Adjusted Diluted EPS is calculated by
applying the statutory rate and local tax regulations in the jurisdiction in which the item was incurred. Constant currency
Cognizant
34
December 31, 2025 Form 10-K
revenue growth is defined as revenues for a given period restated at the comparative period’s foreign currency exchange rates
measured against the comparative period's reported revenues. Free cash flow is defined as cash flows from operating activities
plus proceeds from sale of property and equipment, net of purchases of property and equipment.
We believe providing investors with an operating view consistent with how we manage the Company provides enhanced
transparency into our operating results. For internal management reporting and budgeting purposes, we use various GAAP and
non-GAAP financial measures for financial and operational decision-making, to evaluate period-to-period comparisons, to
determine portions of the compensation for executive officers and for making comparisons of our operating results to those of
our competitors. We believe that the presentation of these non-GAAP financial measures, which exclude certain costs, read in
conjunction with our reported GAAP results and reconciliations to the most comparable GAAP measure, as applicable, can
provide useful supplemental information to our management and investors regarding financial and business trends relating to
our financial condition and results of operations.
A limitation of using non-GAAP financial measures versus financial measures calculated in accordance with GAAP is
that non-GAAP financial measures may exclude costs that are recurring such as net non-operating foreign currency exchange
gains or losses. In addition, other companies may calculate non-GAAP financial measures differently than us, thereby limiting
the usefulness of these non-GAAP financial measures as a comparative tool. We compensate for these limitations by providing
specific information regarding the GAAP amounts excluded from non-GAAP financial measures to allow investors to evaluate
such non-GAAP financial measures.
The following table presents a reconciliation of each non-GAAP financial measure to the most comparable GAAP
measure, as applicable, for the years ended December 31:
(Dollars in millions, except per share data)
2025
% of
Revenues
2024
% of
Revenues
GAAP income from operations and operating margin
$
3,389
16.1 %
$
2,892
14.7 %
(Gain) on sale of property and equipment(1)
(62)
(0.3)
—
—
NextGen charges (2)
—
—
134
0.6
Adjusted Income From Operations and Adjusted Operating Margin
$
3,327
15.8 %
$
3,026
15.3 %
GAAP diluted EPS
$
4.56
$
4.51
Effect of above adjustments, pre-tax
(0.13)
0.27
Effect of non-operating foreign currency exchange (gains) losses,
pre-tax (3)
(0.04)
0.04
Tax effect of above adjustments (4)
0.09
(0.07)
One-time income tax expense related to the enactment of the
OBBBA (5)
0.80
—
Adjusted Diluted EPS
$
5.28
$
4.75
Net cash provided by operating activities
$
2,883
$
2,124
Purchases of property and equipment
(288)
(297)
Proceeds from sale of property and equipment
70
—
Free cash flow
$
2,665
$
1,827
(1)
During 2025, we realized a gain of $62 million on the sale of an office complex in India. See Note 5 to our
consolidated financial statements for additional information.
(2)
Consists of employee separation, facility exit and other costs incurred in connection with the NextGen program. See
Note 4 to our consolidated financial statements for additional information.
(3)
Non-operating foreign currency exchange gains and losses, inclusive of gains and losses on related foreign exchange
forward contracts not designated as hedging instruments for accounting purposes, are reported in "Foreign currency
exchange gains (losses), net" in our consolidated statements of operations.
Cognizant
35
December 31, 2025 Form 10-K
(4)
Presented below are the tax impacts of our non-GAAP adjustments to pre-tax income for the years ended December
31:
(in millions)
2025
2024
Non-GAAP income tax benefit (expense) related to:
Gain on sale of property and equipment
$
(9) $
—
NextGen charges
—
34
Foreign currency exchange gains and losses
(33)
(4)
The effective tax rate related to non-operating foreign currency exchange gains and losses varies depending on the
jurisdictions in which such income and expenses are generated and the statutory rates applicable in those jurisdictions.
As such, the income tax effect of non-operating foreign currency exchange gains and losses shown in the above table
may not appear proportionate to the net pre-tax foreign currency exchange gains and losses reported in our
consolidated statements of operations.
(5)
In the third quarter of 2025, we recorded a one-time, non-cash income tax expense of $390 million related to the
enactment of the OBBBA. See Note 10 to our consolidated financial statements for additional information.
Liquidity and Capital Resources
Cash generated from operations has historically been our primary source of liquidity to fund operations and investments to
grow our business. As of December 31, 2025, we had cash, cash equivalents and short-term investments of $1,914 million and
restricted cash of $733 million (see Note 18 to our consolidated financial statements). Additionally, as of December 31, 2025,
we had available capacity under our credit facilities of approximately $1.85 billion.
The following table provides a summary of our cash flows for the years ended December 31:
(in millions)
2025
2024
Increase /
Decrease
Net cash provided by (used in):
Operating activities
$
2,883 $
2,124 $
759
Investing activities
(230)
(1,646)
1,416
Financing activities
(2,272)
(915)
(1,357)
Other Cash Flow Information5
Free cash flow
2,665
1,827
838
Operating activities5
The increase in cash provided by operating activities in 2025 compared to 2024 was primarily driven by the increase in
net income, excluding the one-time, non-cash income tax expense of $390 million we recorded as a result of the enactment of
the OBBBA, as well as the $360 million payment we made in January 2024 in relation to our dispute with the ITD (see Note 10
to our consolidated financial statements), which reduced cash from operating activities in 2024.
We monitor turnover, aging and the collection of accounts receivable by client. Our DSO calculation includes
receivables, net of allowance for doubtful accounts, and contract assets, reduced by the uncollected portion of deferred revenue.
Our DSO was 81 days as of December 31, 2025, 78 days as of December 31, 2024 and 77 days as of December 31, 2023.
Investing activities
The decrease in cash used in investing activities in 2025 compared to 2024 was driven by payments for business
acquisitions in 2024 and the proceeds from the sale of an office complex in India in 2025, partially offset by net maturities of
investments in 2024.
Financing activities
The increase in cash used in financing activities in 2025 compared to 2024 was primarily driven by increased repurchases
of common stock during 2025 and the borrowing under the revolving credit facility to finance the acquisition of Belcan in 2024.
Cognizant
36
December 31, 2025 Form 10-K
5 Free cash flow is not a measure of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial
Measures” for more information.
We have a Credit Agreement providing for a $650 million Term Loan and a $1,850 million unsecured revolving credit
facility, which are each due to mature in October 2027. During the year ended December 31, 2025, we repaid the $300 million
balance that was outstanding under the revolving credit facility, and had no outstanding balance as of December 31, 2025. We
are required under the Credit Agreement to make scheduled quarterly principal payments on the Term Loan. We believe that we
currently meet all conditions set forth in the Credit Agreement to borrow thereunder, and we are not aware of any conditions
that would prevent us from borrowing part or all of the remaining available capacity under the revolving credit facility as of
December 31, 2025 and through the date of this filing. See Note 9 to our consolidated financial statements.
Capital Allocation Framework
$2,820M
$1,988M
$600M
$610M
$605M
$1,378M
$1,615M
2024
2025
Acquisitions
Share repurchases
Dividend payments
Our capital allocation framework anticipates the deployment of
approximately 50% of our free cash flow6 for acquisitions and
50% for share repurchases and dividend payments. We review
our capital allocation on an ongoing basis, considering our
financial performance and liquidity position, investments
required to execute our strategic plans and initiatives,
acquisition opportunities, the economic outlook, regulatory
changes and other relevant factors. As these factors may
change over time, the actual amounts expended on stock
repurchase activity, dividends, and acquisitions, if any, during
any particular period cannot be predicted and may fluctuate
from time to time.
Other Liquidity and Capital Resources Information
We seek to ensure that our cash is available in the locations in which it is needed. As part of our ongoing liquidity
assessments, we regularly monitor the mix of our domestic and international cash flows and cash balances. We evaluate on an
ongoing basis what portion of the non-U.S. cash, cash equivalents and short-term investments is needed locally to execute our
strategic plans and what amount is available for repatriation back to the United States.
We expect operating cash flows, cash and short-term investment balances, together with the available capacity under our
revolving credit facilities, to be sufficient to meet our operating requirements, including purchase commitments, tax payments
and servicing our debt for the next twelve months. Additionally, we have purchase commitments of approximately $2.3 billion
that will be paid over the next five years, of which approximately $800 million will be paid during the next twelve months. In
addition, see Note 6 to our consolidated financial statements for a description of our operating lease obligations.
The ability to expand and grow our business in accordance with current plans, make acquisitions, meet long-term capital
requirements beyond a twelve-month period and execute our capital return plan will depend on many factors, including the rate,
if any, at which cash flow increases, our ability and willingness to pay for acquisitions with capital stock and the availability of
public and private debt, including the ability to extend the maturity of or refinance our existing debt, and equity financing. We
cannot be certain that additional financing, if required, will be available on terms and conditions acceptable to us, if at all.
Critical Accounting Estimates
Management’s discussion and analysis of our financial condition and results of operations is based on our accompanying
consolidated financial statements that have been prepared in accordance with GAAP. We base our estimates on historical
experience, current trends and on various other assumptions that are believed to be relevant at the time our consolidated
financial statements are prepared. We evaluate our estimates on a continuous basis. However, the actual amounts may differ
from the estimates used in the preparation of our consolidated financial statements.
We believe the following accounting estimates are the most critical to aid in fully understanding and evaluating our
consolidated financial statements as they require the most difficult, subjective or complex judgments, resulting from the need to
make estimates about the effect of matters that are inherently uncertain. Changes to these estimates could have a material effect
on our results of operations and financial condition. Our significant accounting policies are described in Note 1 to our
consolidated financial statements.
Cognizant
37
December 31, 2025 Form 10-K
6 Free cash flow is not a measure of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial
Measures” for more information.
Revenue Recognition. Revenues related to fixed-price contracts for application development and systems integration
services, consulting or other technology services are recognized as the service is performed using the cost-to-cost method,
under which the total value of revenues is recognized on the basis of the percentage that each contract’s total labor cost to-date
bears to the total expected labor costs. Revenues related to fixed-price application maintenance, quality engineering and
assurance and business process services are recognized using the cost-to-cost method, if the right to invoice is not
representative of the value being delivered. The cost-to-cost method requires estimation of future costs, which is updated as the
project progresses to reflect the latest available information. Such estimates and changes in estimates involve the use of
judgment. The cumulative impact of any change in estimates is reflected in the financial reporting period in which the change in
estimate becomes known. Net changes in estimates of such future costs were immaterial to the consolidated results of
operations for the periods presented.
Income Taxes. Determining the consolidated provision for income taxes, deferred income tax assets (and related valuation
allowance, if any) and liabilities requires significant judgment. We are required to calculate and provide for income taxes in
each of the jurisdictions where we operate. Changes in the geographic mix of income before taxes or estimated level of annual
pre-tax income can affect our overall effective income tax rate. In addition, transactions between our affiliated entities are
arranged in accordance with applicable transfer pricing laws, regulations and relevant guidelines. As a result, and due to the
interpretive nature of certain aspects of these laws and guidelines, we have pending applications for APAs before the taxing
authorities in some of our most significant jurisdictions. It could take years for the relevant taxing authorities to negotiate and
conclude these applications. The consolidated provision for income taxes may change period to period based on changes in
facts and circumstances, such as settlements of income tax audits, the expiration of the applicable statute of limitations or
finalization of our applications for APAs.
Our provision for income taxes also includes the impact of reserves established for uncertain income tax positions, as
well as the related interest, which may require us to apply judgment to complex issues and may require an extended period of
time to resolve. We apply a “more likely than not” threshold when assessing the need for a reserve for an uncertain tax position,
which involves significant judgment. Although we believe we have adequately reserved for our uncertain tax positions, no
assurance can be given that the final outcome of these matters will not differ from our recorded amounts. We adjust these
reserves in light of changing facts and circumstances, such as the closing of a tax audit or the expiration of the applicable statute
of limitations. Additionally, we have tax positions that we believe are more likely than not to be realized and for which we have
therefore not established a reserve. To the extent that the final outcome of these matters differs from the amounts recorded, such
differences may materially impact, positively or negatively, the provision for income taxes in the period in which such
determination is made.
Business Combinations, Goodwill and Intangible Assets. Goodwill and intangible assets, including indefinite-lived
intangible assets, arise from the accounting for business combinations. We account for business combinations using the
acquisition method which requires us to estimate the fair value of identifiable assets acquired, liabilities assumed, including any
contingent consideration, and any noncontrolling interest in the acquiree to properly allocate purchase price to the individual
assets acquired and liabilities assumed. The allocation of the purchase price utilizes estimates and assumptions in determining
the fair values of identifiable assets acquired and liabilities assumed, especially with respect to intangible assets, including the
timing and amount of forecasted revenues and cash flows, anticipated growth rates, client attrition rates and the discount rate
reflecting the risk inherent in future cash flows.
At each acquisition date, we allocate goodwill and intangible assets to our reporting units based on how we expect each
reporting unit to benefit from the respective business combination. A reporting unit is defined as an operating segment or one
level below an operating segment. While we manage the business through our four industry-based operating segments, we have
identified seven industry-based reporting units for purposes of goodwill allocation and impairment testing. We exercise
judgment to allocate goodwill to the reporting units expected to benefit from each business combination. Goodwill is tested for
impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change
that would more likely than not reduce the fair value of a reporting unit below its carrying value. Such events or circumstances
may include significant changes in the business climate, the regulatory environment, business strategies, operating performance,
or the competitive landscape. Evaluating goodwill for impairment requires judgment, including the identification of reporting
units, assignment of assets, liabilities and goodwill to reporting units and determination of the fair value of each reporting unit.
We estimate the fair value of our reporting units using a combination of an income approach, utilizing a discounted cash
flow analysis, and a market approach, using market multiples. Under the income approach, we estimate projected future cash
flows, the timing of such cash flows and long-term growth rates and determine the appropriate discount rate that reflects the
risk inherent in the projected future cash flows. The discount rate used is based on a market participant weighted-average cost
of capital and may be adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related
to the reporting unit’s ability to execute on the projected future cash flows. Under the market approach, we estimate fair value
based on market multiples of revenues and earnings derived from comparable publicly-traded companies with characteristics
Cognizant
38
December 31, 2025 Form 10-K
similar to the reporting unit. The estimates used to calculate the fair value of a reporting unit change from year to year based on
operating results, market conditions and other factors. Changes in these estimates and assumptions could materially affect the
determination of fair value for each reporting unit.
Based on our most recent evaluation of goodwill performed during the fourth quarter of 2025, we concluded that the
goodwill in each of our reporting units was not at risk of impairment. As of December 31, 2025, our goodwill balance was
$7,106 million.
We review our finite-lived assets, including our finite-lived intangible assets, for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset group may not be recoverable. The carrying amount may not be
recoverable when the sum of undiscounted expected future cash flows is less than the carrying amount of such asset groups.
The impairment loss is determined as the amount by which the carrying amount of the asset group exceeds its fair value.
Assessing the fair value of asset groups involves significant estimates and assumptions including estimation of future cash
flows, the timing of such cash flows and discount rates reflecting the risk inherent in future cash flows.
Recently Adopted and New Accounting Pronouncements
See Note 1 to our consolidated financial statements for additional information.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Foreign Currency Risk
We are exposed to foreign currency exchange rate risk in the ordinary course of doing business as we transact or hold a
portion of our funds in foreign currencies. Accordingly, we periodically evaluate the need for hedging strategies, including the
use of derivative financial instruments, to mitigate the effect of foreign currency exchange rate fluctuations and expect to
continue to use such instruments in the future to reduce foreign currency exposure to changes in the value of certain foreign
currencies. All hedging transactions are authorized and executed pursuant to regularly reviewed policies and procedures.
Revenues from our clients in the United Kingdom, Continental Europe and Rest of World represented 9.1%, 9.9% and
6.2%, respectively, of our 2025 revenues, and are typically denominated in currencies other than the U.S. dollar. Accordingly,
our revenues may be affected by fluctuations in the exchange rates, primarily the British pound and the Euro, as compared to
the U.S. dollar.
A predominant portion of our costs in India are denominated in the Indian rupee, representing 23% of our global
operating costs during 2025, and are subject to foreign currency exchange rate fluctuations. These foreign currency exchange
rate fluctuations have an impact on our results of operations.
We have entered into a series of foreign exchange forward contracts that are designated as cash flow hedges of certain
Indian rupee denominated payments in India. These U.S. dollar / Indian rupee hedges are intended to partially offset the impact
of movement of exchange rates on future operating costs. As of December 31, 2025, the notional value and weighted average
contract rates of these contracts by year of maturity were as follows:
Notional Value
(in millions)
Weighted Average
Contract Rate (Indian
rupee to U.S. dollar)
2026
$
2,290
88.6
2027
1,020
91.7
Total
$
3,310
89.5
As of December 31, 2025, the net unrealized loss on our outstanding foreign exchange forward contracts designated as
cash flow hedges was $84 million. Based upon a sensitivity analysis at December 31, 2025, which estimates the fair value of
the contracts assuming certain market exchange rate fluctuations, a 10.0% change in the foreign currency exchange rate against
the U.S. dollar with all other variables held constant would have resulted in a change in the fair value of our foreign exchange
forward contracts designated as cash flow hedges of approximately $310 million.
A portion of our balance sheet is exposed to foreign currency exchange rate fluctuations, which may result in non-
operating foreign currency exchange gains or losses upon remeasurement. In 2025, we reported foreign currency exchange
gains, exclusive of hedging gains, of $15 million, which were primarily attributed to the remeasurement of net monetary assets
and liabilities denominated in currencies other than the functional currencies of our subsidiaries. We use foreign exchange
Cognizant
39
December 31, 2025 Form 10-K
forward contracts that are scheduled to mature in the first quarter of 2026 to provide an economic hedge against balance sheet
exposure to certain monetary assets and liabilities denominated in currencies other than the functional currency of the
subsidiary. At December 31, 2025, the notional value of these outstanding contracts was $748 million and the net unrealized
gain was $1 million. Based upon a sensitivity analysis of our foreign exchange forward contracts at December 31, 2025, which
estimates the fair value of the contracts assuming certain market exchange rate fluctuations, a 10.0% change in the foreign
currency exchange rate against the U.S. dollar with all other variables held constant would have resulted in a change in the fair
value of our foreign exchange forward contracts not designated as hedges of approximately $4 million.
Interest Rate Risk
We have a Credit Agreement providing for a $650 million Term Loan and a $1,850 million unsecured revolving credit
facility, which are due to mature in October 2027. As of December 31, 2025, the Credit Agreement requires interest to be paid,
at our option, at either the Term Benchmark, Adjusted Daily Simple RFR or the ABR Rate (each as defined in the Credit
Agreement), plus, in each case, an Applicable Margin (as defined in the Credit Agreement). As of December 31, 2025 we had
no outstanding balance under our revolving credit facility. The Term Loan is a Term Benchmark loan. Thus, our debt exposes
us to market risk from changes in interest rates. We performed a sensitivity analysis to determine the effect of interest rate
fluctuations on our interest expense. A 100 basis point change in interest rates, with all other variables held constant, would
have an immaterial effect on our reported interest expense.
We have $207 million of cash equivalents, and $13 million of short-term investments as of December 31, 2025. Our cash
equivalents, which consist of money market funds and time deposits, and our short-term investments, which consist primarily of
a U.S. dollar denominated investment in a fixed income mutual fund, are exposed to fluctuations in interest rates, which may
affect our interest income and the fair market value of the instruments. As of December 31, 2025, a 100 basis point change in
interest rates, with all other variables held constant, would have an immaterial effect on the fair value of our cash equivalents as
well as short-term investments.
Information provided by the sensitivity analysis of foreign currency risk and interest rate risk does not necessarily
represent the actual changes that would occur under normal market conditions.
Item 8. Financial Statements and Supplementary Data
The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report on Form 10-K. A
list of the financial statements filed herewith is found in Part IV, “Item 15. Exhibits, Financial Statements and Financial
Statement Schedule.”
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, under the supervision and with the participation of our chief executive officer and our chief financial
officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended) as of December 31, 2025. Based on this evaluation, our chief
executive officer and our chief financial officer concluded that, as of December 31, 2025, our disclosure controls and
procedures were effective.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)
under the Securities Exchange Act of 1934, as amended) that occurred during the fiscal quarter ended December 31, 2025 that
has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Cognizant
40
December 31, 2025 Form 10-K
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as
amended, and is a process designed by, or under the supervision of, our chief executive and chief financial officers and effected
by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles and includes those policies and procedures that:
•
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of our assets;
•
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of our management and directors; and
•
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition
of the Company’s assets that could have a material effect on the financial statements.
Our management assessed the effectiveness of the Company’s internal control over financial reporting as of
December 31, 2025. In making this assessment, the Company’s management used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013).
Based on its evaluation, our management has concluded that, as of December 31, 2025, our internal control over financial
reporting was effective. PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the
financial statements included in this annual report, has issued an attestation report on our internal control over financial
reporting, as stated in their report which is included on page F-2.
Inherent Limitations of Internal Controls
Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Item 9B. Other Information
(c) Trading Plans
During the three months ended December 31, 2025, no director or Section 16 officer adopted or terminated any Rule
10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-
K).
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
Cognizant
41
December 31, 2025 Form 10-K
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information relating to our executive officers in response to this item is contained in part under the caption
“Information About Our Executive Officers” in Part I of this Annual Report on Form 10-K.
We have adopted a written code of ethics, entitled “Code of Ethics,” that applies to all of our directors, executive officers
and employees, including our principal executive officer, principal financial officer, principal accounting officer and controller,
or persons performing similar functions. We make available our code of ethics free of charge through our website which is
located at www.cognizant.com. We intend to post on our website all disclosures that are required by law or Nasdaq Stock
Market listing standards concerning any amendments to, or waivers from, any provision of our code of ethics within four
business days following the date of the amendment or waiver.
We have adopted an insider trading policy governing purchases, sales and/or other dispositions of our securities by our
directors, officers, employees and other covered persons, as well as the Company itself, that we believe is reasonably designed
to promote compliance with insider trading laws, rules and regulations and the exchange listing standards applicable to us. A
copy of our insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.
The remaining information required by this item will be included under the caption "Corporate governance" in our 2026
Proxy Statement, which we expect to be filed with the SEC pursuant to Regulation 14A not later than 120 days after the end of
the fiscal year ended December 31, 2025 and is incorporated herein by reference to such proxy statement.
Item 11. Executive Compensation
The information required by this item will be included in our 2026 Proxy Statement under the captions "Corporate
governance" and "Compensation discussion and analysis" and is incorporated herein by reference to such proxy statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
The information required by this item will be included in our 2026 Proxy Statement under the captions "Corporate
governance" and "Compensation discussion and analysis" and is incorporated herein by reference to such proxy statement.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item will be included in our 2026 Proxy Statement under the caption "Corporate
governance" and is incorporated herein by reference to such proxy statement.
Item 14. Principal Accountant Fees and Services
The information required by this item will be included in our 2026 Proxy Statement under the caption "Audit matters"
and is incorporated herein by reference to such proxy statement.
Cognizant
42
December 31, 2025 Form 10-K
PART IV
Item 15. Exhibits, Financial Statement Schedules
(a)
(1) Consolidated Financial Statements.
Reference is made to the Index to Consolidated Financial Statements on Page F-1.
(2) Consolidated Financial Statement Schedule.
Reference is made to the Index to Financial Statement Schedule on Page F-1.
(3) Exhibits.
Schedules other than as listed above are omitted as not required or inapplicable or because the required information is
provided in the consolidated financial statements, including the notes thereto.
EXHIBIT INDEX
2.1
Agreement and Plan of Merger, dated June 5,
2024, among Propulsion Holdings, LLC,
Cognizant Domestic Holdings Corporation,
Eagle Acquisition Sub, LLC, and Propulsion
Intermediate, LP
8-K
000-24429
2.1
6/10/2024
3.1
Amended and Restated Certificate of
Incorporation, dated June 4, 2024
8-K
000-24429
3.1
6/7/2024
3.2
Amended and Restated Bylaws, as adopted on
September 14, 2018
8-K
000-24429
3.1
9/20/2018
4.1
Specimen Certificate for shares of Class A
common stock
S-4/A
333-101216
4.2
1/30/2003
4.2
Description of Capital Stock
10-K
000-24429
4.2
2/14/2020
10.1†
Form of Indemnification Agreement for
Directors and Officers
10-Q
000-24429
10.1
8/7/2013
10.2†
Form of Amended and Restated Executive
Employment and Non-Disclosure, Non-
Competition, and Invention Assignment
Agreement, between the Company and each of
the following current Executive Officers: Balu
Ganesh Ayyar and John Kim
10-K
000-24429
10.3
2/27/2018
10.3†
2022 Form of Executive Employment and
Non-Disclosure, Non-Competition and
Invention Assignment Agreement between the
Company and each of the following current
Executive Officers: Surya Gummadi, Kathryn
Diaz and Jatin Dalal
10-Q
000-24429
10.1
7/28/2022
10.4†
Executive Employment and Non-Disclosure,
Non-Competition and Invention Assignment
Agreement, entered into between the Company
and Ravi Kumar Singisetti, dated effective
January 12, 2023
8-K
000-24429
10.2
1/12/2023
10.5†
Offer Letter, by and between the Company and
Ravi Kumar Singisetti, acknowledged and
agreed January 9, 2023
8-K
000-24429
10.1
1/12/2023
10.6†
Offer Letter, by and between the Company and
Jatin Dalal, acknowledged and agreed
September 25, 2023
8-K
000-24429
10.1
9/28/2023
10.7†
Description of Reimbursement Arrangement
with Jatin Dalal
10-Q
000-24429
10.1
10/30/2024
10.8†
Non-Employee Director Compensation
Guidelines (effective as of June 3, 2025)
10-Q
000-24429
10.1
7/31/2025
Incorporated by Reference
Number
Exhibit Description
Form
File No.
Exhibit
Date
Filed or Furnished
Herewith
Cognizant
43
December 31, 2025 Form 10-K
10.9†
2004 Employee Stock Purchase Plan (as
amended and restated effective as of January
1, 2022)
10-K
000-24429
10.7
2/16/2022
10.10†
Cognizant Technology Solutions Corporation
Amended and Restated 2009 Incentive
Compensation Plan, effective March 9, 2015
10-Q
000-24429
10.1
5/4/2015
10.11†
Form of Restricted Stock Unit Award
Agreement Non-Employee Director Deferred
Issuance
8-K
000-24429
10.7
7/6/2009
10.12†
Form of Cognizant Technology Solutions
Corporation Notice of Award of Restricted
Stock Units Non-Employee Director Deferred
Issuance
8-K
000-24429
10.8
7/6/2009
10.13†
Cognizant Technology Solutions Corporation
2017 Incentive Award Plan
8-K
000-24429
10.1
6/7/2017
10.14†
Form of Restricted Stock Unit Award Grant
Notice
10-Q
000-24429
10.2
8/3/2017
10.15†
Form of Performance-Based Restricted Stock
Unit Award Grant Notice
10-Q
000-24429
10.3
8/3/2017
10.16†
Form of Restricted Stock Unit Award Grant
Notice
10-Q
000-24429
10.4
8/3/2017
10.17†
Form of Stock Option Grant Notice and Stock
Option Agreement
10-Q
000-24429
10.5
8/3/2017
10.18†
Form of Restricted Stock Unit Award Grant
Notice (March 5, 2020 form)
10-Q
000-24429
10.1
5/8/2020
10.19†
Form of Performance-Based Restricted Stock
Unit Award Grant Notice (March 5, 2020
form)
10-Q
000-24429
10.2
5/8/2020
10.20†
Cognizant Technology Solutions Corporation
2023 Incentive Award Plan
S-8
333-272444
99.1
6/6/2023
10.21†
Form of Cognizant Technology Solutions
Corporation Restricted Stock Unit Award
Grant Notice for Employees, including
Executive Officers
10-K
000-24429
10.21
2/12/2025
10.22†
Form of Cognizant Technology Solutions
Corporation Performance-Based Restricted
Stock Unit Award Grant Notice
10-K
000-24429
10.22
2/12/2025
10.23†
Form of Cognizant Technology Solutions
Corporation Restricted Stock Unit Award
Grant Notice for Non-Employee Director
(Non-Deferred)
10-K
000-24429
10.23
2/12/2025
10.24†
Form of Cognizant Technology Solutions
Corporation Restricted Stock Unit Award
Grant Notice Non-Employee Director
(Deferred Settlement)
10-K
000-24429
10.24
2/12/2025
10.25†
Form of Cognizant Technology Solutions
Corporation Deferred Stock Unit Award Grant
Notice Non-Employee Director (for Deferred
Equity in lieu of Cash Retainer)
10-K
000-24429
10.25
2/12/2025
10.26†
Letter Agreement with each of Steven
Rohleder and Sandra Wijnberg regarding grant
of dividend equivalents on previously issued
Deferred Stock Units
10-Q
000-24429
10.8
8/3/2023
10.27†
Retirement, Death and Disability Policy
10-Q
000-24429
10.1
7/30/2020
10.28†
Cognizant Technology Solutions Corporation
Senior Executive Cash Severance Policy
8-K
000-24429
10.1
3/6/2023
Incorporated by Reference
Number
Exhibit Description
Form
File No.
Exhibit
Date
Filed or Furnished
Herewith
Cognizant
44
December 31, 2025 Form 10-K
10.29
Credit Agreement, dated as of October 6,
2022, among Cognizant Technology Solutions
Corporation, Cognizant Worldwide Limited,
certain financial institutions party thereto and
JPMorgan Chase Bank, N.A., as
administrative agent
8-K
000-24429
10.1
10/7/2022
10.30
Amendment No. 1 to the Credit Agreement,
dated as of October 6, 2022, among Cognizant
Technology Solutions Corporation, Cognizant
Worldwide Limited, certain financial
institutions party thereto and JPMorgan Chase
Bank, N.A., as administrative agent
10-Q
000-24429
10.2
7/31/2024
10.31†
First Amendment to the 2004 Employee Stock
Purchase Plan (as amended and restated
effective as of January 1, 2022)
S-8
333-272444
99.3
6/6/2023
19.1
Cognizant Technology Solutions Corporation
Insider Trading Policy
10-K
000-24429
19.1
2/12/2025
21.1
List of subsidiaries of the Company
Filed
23.1
Consent of PricewaterhouseCoopers LLP
Filed
31.1
Certification Pursuant to Rule 13a-14(a) and
15d-14(a) of the Exchange Act, as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 (Chief Executive Officer)
Filed
31.2
Certification Pursuant to Rule 13a-14(a) and
15d-14(a) of the Exchange Act, as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 (Chief Financial Officer)
Filed
32.1
Certification Pursuant to 18 U.S.C.
Section 1350 (Chief Executive Officer)
Furnished
32.2
Certification Pursuant to 18 U.S.C.
Section 1350 (Chief Financial Officer)
Furnished
97.1
Cognizant Technology Solutions Corporation
Rule 10D-1 Compensation Recoupment
(Clawback) Policy adopted September 6, 2023
10-K
000-24429
97.1
2/14/2024
101.INS
Inline XBRL Instance Document - the instance
document does not appear in the Interactive
Data File because its XBRL tags are embedded
within the Inline XBRL document.
Filed
101.SCH
Inline XBRL Taxonomy Extension Schema
Document
Filed
101.CAL
Inline XBRL Taxonomy Extension
Calculation Linkbase Document
Filed
101.DEF
Inline XBRL Taxonomy Extension Definition
Linkbase Document
Filed
101.LAB
Inline XBRL Taxonomy Extension Label
Linkbase Document
Filed
101.PRE
Inline XBRL Taxonomy Extension
Presentation Linkbase Document
Filed
104
Cover Page Interactive Data File (formatted as
Inline XBRL and contained in Exhibit 101)
Filed
Incorporated by Reference
Number
Exhibit Description
Form
File No.
Exhibit
Date
Filed or Furnished
Herewith
†
A management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to
Item 15(a)(3) of Form 10-K.
Item 16. Form 10-K Summary
None.
Cognizant
45
December 31, 2025 Form 10-K
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
By:
/S/ RAVI KUMAR S
Ravi Kumar S,
Chief Executive Officer
(Principal Executive Officer)
Date:
February 12, 2026
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ RAVI KUMAR S
Chief Executive Officer and Director
(Principal Executive Officer)
February 12, 2026
Ravi Kumar S
/s/ JATIN DALAL
Chief Financial Officer
(Principal Financial Officer)
February 12, 2026
Jatin Dalal
/s/ ALINA KERDMAN
Senior Vice President, Controller and Chief
Accounting Officer
(Principal Accounting Officer)
February 12, 2026
Alina Kerdman
/s/ STEPHEN J. ROHLEDER
Chair of the Board and Director
February 12, 2026
Stephen J. Rohleder
/s/ ZEIN ABDALLA
Director
February 12, 2026
Zein Abdalla
/s/ VINITA BALI
Director
February 12, 2026
Vinita Bali
/s/ ERIC BRANDERIZ
Director
February 12, 2026
Eric Branderiz
/s/ ARCHANA DESKUS
Director
February 12, 2026
Archana Deskus
/s/ JOHN M. DINEEN
Director
February 12, 2026
John M. Dineen
/s/ LEO S. MACKAY, JR.
Director
February 12, 2026
Leo S. Mackay, Jr.
/s/ MICHAEL PATSALOS-FOX
Director
February 12, 2026
Michael Patsalos-Fox
/s/ ABRAHAM SCHOT
Director
February 12, 2026
Abraham Schot
/s/ KARIMA SILVENT
Director
February 12, 2026
Karima Silvent
/s/ JOSEPH M. VELLI
Director
February 12, 2026
Joseph M. Velli
/s/ SANDRA S. WIJNBERG
Director
February 12, 2026
Sandra S. Wijnberg
Cognizant
46
December 31, 2025 Form 10-K
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE
Page
Consolidated Financial Statements:
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 238)
F-2
Consolidated Statements of Financial Position as of December 31, 2025 and 2024
F-4
Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023
F-5
Consolidated Statements of Comprehensive Income for the years ended December 31, 2025, 2024 and 2023
F-6
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025, 2024 and 2023
F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023
F-8
Notes to Consolidated Financial Statements
F-9
Financial Statement Schedule:
Schedule of Valuation and Qualifying Accounts for the years ended December 31, 2025, 2024 and 2023
F-39
Cognizant
F-1
December 31, 2025 Form 10-K
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Cognizant Technology Solutions Corporation
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statements of financial position of Cognizant Technology Solutions
Corporation and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of
operations, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended
December 31, 2025, including the related notes and financial statement schedule listed in the accompanying index (collectively
referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial
reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United
States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013)
issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
in Management's Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to
express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial
reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Cognizant
F-2
December 31, 2025 Form 10-K
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue Recognition – Expected Labor Costs to Complete for Certain Fixed-Price Contracts
As described in Notes 1 and 2 to the consolidated financial statements, fixed-price contracts comprised $10.0 billion of the
Company’s total revenues for the year ended December 31, 2025, which includes performance obligations where control is
transferred over time. For performance obligations where control is transferred over time, revenues are recognized based on the
extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards
completion requires judgment and is based primarily on the nature of the deliverables to be provided. Management recognizes
revenues related to fixed-price contracts for application development and systems integration services, consulting or other
technology services as the service is performed using the cost-to-cost method, under which the total value of revenues is
recognized on the basis of the percentage that each contract’s total labor cost to date bears to the total expected labor costs. The
cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available
information. Revenues related to fixed-price application maintenance, quality engineering and assurance as well as business
process services are recognized based on management’s right to invoice for services performed for contracts in which the
invoicing is representative of the value being delivered. If management’s invoicing is not consistent with the value delivered,
revenues are recognized as the service is performed based on the cost-to-cost method described above.
The principal considerations for our determination that performing procedures relating to revenue recognition – expected labor
costs to complete for certain fixed-price contracts is a critical audit matter are the significant judgment by management when
developing the estimated total expected labor costs to complete fixed-price contracts and the significant auditor judgment,
subjectivity, and effort in performing procedures and evaluating audit evidence relating to management’s estimate of total
expected labor costs.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the
revenue recognition process, including controls over the development of the estimated total expected labor costs to complete
fixed-price contracts. These procedures also included, among others, evaluating and testing management’s process for
developing the estimated total expected labor costs for a sample of contracts, which included evaluating the reasonableness of
the total expected labor cost assumptions used by management. Evaluating the reasonableness of the assumptions related to the
total expected labor costs involved assessing management’s ability to reasonably develop total expected labor costs by (i)
performing a comparison of expected labor cost metrics at project inception with actual cost metrics for similar completed
projects and (ii) evaluating the timely identification of circumstances that may warrant a modification to previous labor cost
estimates, including actual labor costs in excess of estimates.
/s/ PricewaterhouseCoopers LLP
New York, New York
February 12, 2026
We have served as the Company’s auditor since 1997.
Cognizant
F-3
December 31, 2025 Form 10-K
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
December 31,
(in millions, except par values)
2025
2024
Assets
Current assets:
Cash and cash equivalents
$
1,901
$
2,231
Short-term investments
13
12
Trade accounts receivable, net
4,439
4,059
Other current assets
1,465
1,202
Total current assets
7,818
7,504
Property and equipment, net
933
994
Operating lease assets, net
573
552
Goodwill
7,106
6,953
Intangible assets, net
1,417
1,599
Deferred income tax assets, net
967
1,248
Long-term investments
111
90
Other noncurrent assets
1,767
1,026
Total assets
$
20,692
$
19,966
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
308
$
340
Deferred revenue
501
450
Short-term debt
33
33
Operating lease liabilities
153
152
Accrued expenses and other current liabilities
2,664
2,610
Total current liabilities
3,659
3,585
Deferred revenue, noncurrent
37
30
Operating lease liabilities, noncurrent
423
420
Deferred income tax liabilities, net
168
154
Long-term debt
543
875
Other noncurrent liabilities
847
494
Total liabilities
5,677
5,558
Commitments and contingencies (See Note 14)
Stockholders’ equity:
Preferred stock, $0.10 par value, 15 shares authorized, none issued
—
—
Class A common stock, $0.01 par value, 1,000 shares authorized, 479 and 495 shares issued
and outstanding as of December 31, 2025 and 2024, respectively
5
5
Additional paid-in capital
12
13
Retained earnings
15,158
14,686
Accumulated other comprehensive income (loss)
(160)
(296)
Total stockholders’ equity
15,015
14,408
Total liabilities and stockholders’ equity
$
20,692
$
19,966
The accompanying notes are an integral part of the consolidated financial statements.
Cognizant
F-4
December 31, 2025 Form 10-K
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31,
(in millions, except per share data)
2025
2024
2023
Revenues
$
21,108 $
19,736 $
19,353
Operating expenses:
Cost of revenues (exclusive of depreciation and amortization expense shown
separately below)
13,991
12,958
12,664
Selling, general and administrative expenses
3,240
3,223
3,252
Restructuring charges
—
134
229
Depreciation and amortization expense
550
529
519
(Gain) on sale of property and equipment
(62)
—
—
Income from operations
3,389
2,892
2,689
Other income (expense), net:
Interest income
105
119
126
Interest expense
(37)
(54)
(41)
Foreign currency exchange gains (losses), net
18
(19)
2
Other, net
4
—
11
Total other income (expense), net
90
46
98
Income before provision for income taxes
3,479
2,938
2,787
Provision for income taxes
(1,258)
(713)
(668)
Income (loss) from equity method investments
9
15
7
Net income
$
2,230 $
2,240 $
2,126
Basic earnings per share
$
4.57 $
4.52 $
4.21
Diluted earnings per share
$
4.56 $
4.51 $
4.21
Weighted average number of common shares outstanding—Basic
488
496
505
Dilutive effect of shares issuable under stock-based compensation plans
1
1
—
Weighted average number of common shares outstanding—Diluted
489
497
505
The accompanying notes are an integral part of the consolidated financial statements.
Cognizant
F-5
December 31, 2025 Form 10-K
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year Ended December 31,
(in millions)
2025
2024
2023
Net income
$
2,230 $
2,240 $
2,126
Change in Accumulated other comprehensive income (loss), net of tax:
Foreign currency translation adjustments
266
(150)
144
Unrealized gains and losses on cash flow hedges
(38)
(35)
61
Changes in net defined benefit obligations
(92)
(17)
—
Other comprehensive income (loss)
136
(202)
205
Comprehensive income
$
2,366 $
2,038 $
2,331
The accompanying notes are an integral part of the consolidated financial statements.
Cognizant
F-6
December 31, 2025 Form 10-K
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in millions, except per share data)
Class A Common Stock
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Shares
Amount
Balance, December 31, 2022
509 $
5 $
15 $
12,588 $
(299) $
12,309
Net income
—
—
—
2,126
—
2,126
Other comprehensive income (loss)
—
—
—
—
205
205
Common stock issued, stock-based
compensation plans
4
—
71
—
—
71
Stock-based compensation expense
—
—
176
—
—
176
Repurchases of common stock
(15)
—
(247)
(823)
—
(1,070)
Dividends declared, $1.16 per share
—
—
—
(590)
—
(590)
Balance, December 31, 2023
498
5
15
13,301
(94)
13,227
Net income
—
—
—
2,240
—
2,240
Other comprehensive income (loss)
—
—
—
—
(202)
(202)
Common stock issued, stock-based
compensation plans
4
—
63
—
—
63
Common stock issued, acquisition related
1
—
113
—
—
113
Stock-based compensation expense
—
—
175
—
—
175
Repurchases of common stock
(8)
—
(353)
(255)
—
(608)
Dividends declared, $1.20 per share
—
—
—
(600)
—
(600)
Balance, December 31, 2024
495
5
13
14,686
(296)
14,408
Net income
—
—
—
2,230
—
2,230
Other comprehensive income (loss)
—
—
—
—
136
136
Common stock issued, stock-based
compensation plans
3
—
58
—
—
58
Stock-based compensation expense
—
—
181
—
—
181
Repurchases of common stock
(19)
—
(240)
(1,148)
—
(1,388)
Dividends declared, $1.24 per share
—
—
—
(610)
—
(610)
Balance, December 31, 2025
479 $
5 $
12 $
15,158 $
(160) $
15,015
The accompanying notes are an integral part of the consolidated financial statements.
Cognizant
F-7
December 31, 2025 Form 10-K
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
(in millions)
2025
2024
2023
Cash flows from operating activities:
Net income
$ 2,230
$ 2,240
$ 2,126
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
550
542
555
Deferred income taxes
327
(355)
(339)
Stock-based compensation expense
181
175
176
Gain on sale of property and equipment
(62)
—
—
Other, net
(5)
32
1
Changes in operating assets and liabilities, net of effects of businesses acquired:
Trade accounts receivable
(366)
(49)
(43)
Other current and noncurrent assets
(118)
(386)
123
Accounts payable
(2)
(23)
(23)
Deferred revenue, current and noncurrent
55
44
(4)
Other current and noncurrent liabilities
93
(96)
(242)
Net cash provided by operating activities
2,883
2,124
2,330
Cash flows from investing activities:
Purchases of property and equipment
(288)
(297)
(317)
Proceeds from sale of property and equipment
70
—
—
Purchases of available-for-sale investment securities
—
—
(59)
Proceeds from maturity of available-for-sale investment securities
—
—
285
Purchases of held-to-maturity investment securities
—
—
(3)
Proceeds from maturity of held-to-maturity investment securities
—
3
24
Purchases of other investments
(17)
(2)
(379)
Proceeds from maturity or sale of other investments
5
265
527
Payments for business combinations, net of cash acquired
—
(1,615)
(409)
Net cash (used in) investing activities
(230)
(1,646)
(331)
Cash flows from financing activities:
Issuance of common stock under stock-based compensation plans
58
63
71
Repurchases of common stock
(1,378)
(605)
(1,064)
Repayment of Term Loan borrowings and earnout and finance leases obligations
(42)
(73)
(25)
Proceeds from borrowings under the revolving credit facility
—
600
—
Repayment of notes outstanding under the revolving credit facility
(300)
(300)
—
Dividends paid
(610)
(600)
(591)
Net cash (used in) financing activities
(2,272)
(915)
(1,609)
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash
equivalents
22
(49)
33
Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents
403
(486)
423
Cash, cash equivalents and restricted cash and cash equivalents, beginning of year
2,231
2,717
2,294
Cash, cash equivalents and restricted cash and cash equivalents, end of year
$ 2,634
$ 2,231
$ 2,717
Supplemental information:
Cash paid for income taxes during the year
$
985
$ 1,120
$ 1,245
Cash interest paid during the year
$
36
$
53
$
40
The accompanying notes are an integral part of the consolidated financial statements.
Cognizant
F-8
December 31, 2025 Form 10-K
COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except share data)
Note 1 — Business Description and Summary of Significant Accounting Policies
The terms “Cognizant,” “we,” “our,” “us” and “the Company” refer to Cognizant Technology Solutions Corporation and
its subsidiaries unless the context indicates otherwise.
Description of Business. We are one of the world’s leading professional services companies, engineering modern
businesses and delivering strategic outcomes for our clients. We help clients modernize technology, reimagine processes and
transform experiences so they can stay ahead in today's fast-changing world, where AI is reshaping organizations in every field.
As an AI builder, we provide deep expertise at the intersection of industry and technology, combining our perspective with
extensive knowledge of our clients' organizations to build industry-specific platforms and incorporate context into systems, AI
models and custom solutions. We tailor our services and solutions to specific industries with an integrated global delivery
model that employs client service and delivery teams based at client locations and dedicated global and regional delivery
centers. Our services include consulting, application development, systems integration, quality engineering and assurance,
engineering research and development, application maintenance, infrastructure and security as well as business process services
and automation.
Basis of Presentation, Principles of Consolidation and Use of Estimates. The consolidated financial statements are
presented in accordance with GAAP and reflect the consolidated financial position, results of operations, comprehensive
income and cash flows of our consolidated subsidiaries for all periods presented. All intercompany balances and transactions
have been eliminated in consolidation.
The preparation of financial statements requires management to make estimates and assumptions that affect the reported
amounts in the consolidated financial statements and accompanying disclosures. We evaluate our estimates on a continuous
basis. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under
the circumstances. The actual amounts may vary from the estimates used in the preparation of the accompanying consolidated
financial statements.
Cash and Cash Equivalents. Cash and cash equivalents consist of all cash balances, including money market funds and
time deposits that have a maturity, at the date of purchase, of 90 days or less.
Financial Assets and Liabilities. Cash and certain cash equivalents, time deposits, trade receivables, accounts payable and
other accrued liabilities are short-term in nature and, accordingly, their carrying values approximate fair value.
Property and Equipment. Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is
calculated on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized on a
straight-line basis over the shorter of the term of the lease or the estimated useful life of the asset. Deposits paid towards
acquisition of long-lived assets and the cost of assets not put in use by the balance sheet date are disclosed under the caption
"Capital work-in-progress" in Note 5.
Leases. Our lease asset classes primarily consist of operating leases for office space, data centers and IT equipment. At
inception of a contract, we determine whether a contract contains a lease, and if a lease is identified, whether it is an operating
or finance lease. In determining whether a contract contains a lease we consider whether (1) we have the right to obtain
substantially all of the economic benefits from the use of the asset throughout the term of the contract, (2) we have the right to
direct how and for what purpose the asset is used throughout the term of the contract and (3) we have the right to operate the
asset throughout the term of the contract without the lessor having the right to change the terms of the contract. Some of our
lease agreements contain both lease and non-lease components that we account for as a single lease component for all of our
lease asset classes.
Our ROU lease assets represent our right to use an underlying asset for the lease term and may include any advance lease
payments made and any initial direct costs and exclude lease incentives. Our lease liabilities represent our obligation to make
lease payments arising from the terms of the lease. ROU lease assets and lease liabilities are recognized at the commencement
of the lease and are calculated using the present value of lease payments over the lease term. Typically, our lease agreements do
not provide sufficient detail to determine the rate implicit in the lease. Therefore, we use our estimated country-specific
incremental borrowing rate based on information available at the commencement date of the lease to calculate the present value
of the lease payments. In estimating our country-specific incremental borrowing rates, we consider market rates of comparable
collateralized borrowings for similar terms. Our lease terms may include the option to extend or terminate the lease before the
Cognizant
F-9
December 31, 2025 Form 10-K
end of the contractual lease term. Our ROU lease assets and lease liabilities include these options when it is reasonably certain
that they will be exercised.
A portion of our real estate lease costs is subject to annual changes in the CPI. Changes in CPI subsequent to the lease
commencement are treated as variable lease payments and are recognized in the period in which the obligation for those
payments is incurred. Other variable lease costs primarily relate to adjustments for common area maintenance, utilities, property
tax and lease concessions. These variable costs are recognized in the period in which the obligation is incurred.
We do not recognize ROU assets and lease liabilities for short-term leases with a term equal to or less than 12 months.
We recognize the lease payments in our income statement as a single lease cost on a straight-line basis over the lease term and
variable lease payments in the period in which the obligation for those payments is incurred.
Both ROU assets and finance lease assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of the related asset group may not be recoverable.
Internal Use Software. We capitalize certain costs that are incurred to purchase, develop and implement internal-use
software during the application development phase, which primarily include coding, testing and certain data conversion
activities. These capitalized costs are reported in "Property and equipment, net" in our consolidated statements of financial
position. Capitalized costs are amortized on a straight-line basis over the useful life of the software. Costs incurred in
performing planning and post-implementation activities are expensed as incurred.
Cloud Computing Arrangements. We defer certain implementation costs that are incurred when implementing cloud
computing service or software-as-a-service arrangements, which primarily include efforts associated with configuration and
development activities. These capitalized costs are reported in "Other current assets" and "Other noncurrent assets" in our
consolidated statements of financial position. Once the service is ready for use, deferred costs are expensed over the non-
cancelable term, including reasonably certain renewals, of the arrangement and recognized in income from operations in the
same line item as the related hosting service fees.
Software to be Sold, Leased or Marketed. We capitalize costs incurred after technological feasibility is reached but before
software is available for general release to clients, which primarily include coding and testing activities. Once the product is
ready for general release, capitalized costs are amortized over the useful life of the software.
Business Combinations. We account for business combinations using the acquisition method, which requires the
identification of the acquirer, the determination of the acquisition date and the allocation of the purchase price paid by the
acquirer to the identifiable tangible and intangible assets acquired, the liabilities assumed, including any contingent
consideration and any noncontrolling interest in the acquiree at their acquisition date fair values. Goodwill represents the excess
of the purchase price over the fair value of net assets acquired, including the amount assigned to identifiable intangible assets.
Identifiable intangible assets with finite lives are amortized over their expected useful lives. Acquisition-related costs are
expensed in the periods in which the costs are incurred. The results of operations of acquired businesses are included in our
consolidated financial statements from the acquisition date.
Equity Method Investments. Equity investments that give us the ability to exercise significant influence, but not control,
over an investee are accounted for using the equity method of accounting and recorded in the caption "Long-term investments"
on our consolidated statements of financial position. As of December 31, 2025 and 2024, we had an equity method investment
of $104 million and $84 million, respectively, in the technology sector.
Equity method investments are initially recorded at cost. We periodically review the carrying value of our equity method
investments to determine if there has been an other-than-temporary decline in the carrying value. The investment balance is
increased to reflect contributions and our share of earnings and decreased to reflect our share of losses, distributions and other-
than-temporary impairments. Our proportionate share of the net income or loss of the investee is recorded in the caption
"Income (loss) from equity method investments" on our consolidated statements of operations.
Long-lived Assets and Finite-lived Intangible Assets. We review long-lived assets and certain finite-lived intangible assets
for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be
recoverable. The carrying amount may not be recoverable when the sum of undiscounted expected future cash flows is less than
the carrying amount of such asset groups. The impairment loss is determined as the amount by which the carrying amount of
the asset group exceeds its fair value. Intangible assets consist primarily of customer relationships and developed technology,
which are being amortized on a straight-line basis over their estimated useful lives.
Cognizant
F-10
December 31, 2025 Form 10-K
Goodwill and Indefinite-lived Intangible Assets. At each acquisition date, we allocate goodwill and intangible assets to
our industry-based reporting units based on how we expect each reporting unit to benefit from the respective business
combination. A reporting unit is defined as an operating segment or one level below an operating segment. While we manage
the business through our four industry-based operating segments, we have identified seven industry-based reporting units. We
evaluate goodwill and indefinite-lived intangible assets for impairment at least annually, or as circumstances warrant. Goodwill
is evaluated at the reporting unit level by comparing the fair value of the reporting unit with its carrying amount including
goodwill. An impairment of goodwill exists if the carrying amount of the reporting unit exceeds its fair value. The impairment
loss is the amount by which the carrying amount exceeds the reporting unit’s fair value, limited to the total amount of goodwill
allocated to that reporting unit. For indefinite-lived intangible assets, if our qualitative assessment indicates that it is more-
likely-than-not that an indefinite-lived intangible asset is impaired, we test the assets for impairment by comparing the fair
value of such assets to their carrying value. If an impairment is indicated, a write down to the fair value of indefinite-lived
intangible asset is recorded.
Stock Repurchase Program. Under the Board of Directors authorized stock repurchase program, the Company is
authorized to repurchase its Class A common stock through open market purchases, including under a 10b5-1 Plan, in
accordance with applicable federal securities laws. We account for the repurchased shares as constructively retired. Shares are
returned to the status of authorized and unissued shares at the time of repurchase. To reflect share repurchases in the
consolidated statements of financial position, we (1) reduce common stock for the par value of the shares, (2) reduce additional
paid-in capital for the amount in excess of par during the period in which the shares are repurchased and (3) record any residual
amount in excess of available additional paid-in capital as a reduction to retained earnings. Cash outflows for repurchases are
classified as financing activities.
Revenue Recognition. We recognize revenues as we transfer control of deliverables (products, solutions and services) to
our clients in an amount reflecting the consideration to which we expect to be entitled. To recognize revenues, we apply the
following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract,
(3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5)
recognize revenues when a performance obligation is satisfied. We account for a contract when it has approval and commitment
from all parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and
collectibility of consideration is probable. We apply judgment in determining the customer’s ability and intention to pay based
on a variety of factors, including the customer’s historical payment experience.
For performance obligations where control is transferred over time, revenues are recognized based on the extent of
progress towards completion of the performance obligation. The selection of the method to measure progress towards
completion requires judgment and is based primarily on the nature of the deliverables to be provided.
Revenues related to fixed-price contracts for application development and systems integration services, consulting or
other technology services are recognized as the service is performed using the cost-to-cost method, under which the total value
of revenues is recognized on the basis of the percentage that each contract’s total labor cost to date bears to the total expected
labor costs. Revenues related to fixed-price application maintenance, quality engineering and assurance as well as business
process services are recognized based on our right to invoice for services performed for contracts in which the invoicing is
representative of the value being delivered. If our invoicing is not consistent with the value delivered, revenues are recognized
as the service is performed based on the cost-to-cost method described above. The cost-to-cost method requires estimation of
future costs, which is updated as the project progresses to reflect the latest available information. Such estimates and changes in
estimates involve the use of judgment. The cumulative impact of any revision in estimates is reflected in the financial reporting
period in which the change in estimate becomes known and any anticipated losses on contracts are recognized immediately,
where appropriate.
Revenues related to fixed-price hosting and infrastructure and security services are recognized based on our right to
invoice for services performed for contracts in which the invoicing is representative of the value being delivered. If our
invoicing is not consistent with the value delivered, revenues are recognized on a straight-line basis unless revenues are earned
and obligations are fulfilled in a different pattern. The revenue recognition method applied to the types of contracts described
above provides the most faithful depiction of performance towards satisfaction of our performance obligations; for example, the
cost-to-cost method is used when the value of services provided to the customer is best represented by the costs expended to
deliver those services.
Revenues related to our time-and-materials, transaction-based or volume-based contracts are recognized over the period
the services are provided either using an output method such as labor hours, or a method that is otherwise consistent with the
way in which value is delivered to the customer.
Cognizant
F-11
December 31, 2025 Form 10-K
Revenues related to our non-hosted software license arrangements that do not require significant modification or
customization of the underlying software are recognized when the software is delivered as control is transferred at a point in
time. For software license arrangements that require significant functionality enhancements or modification of the software,
revenues for the software license and related services are recognized as the services are performed in accordance with the
methods applicable to application development and systems integration services described above. In software hosting
arrangements, the rights provided to the customer, such as ownership of a license, contract termination provisions and the
feasibility of the client to operate the software, are considered in determining whether the arrangement includes a license or a
service. Sales-based and usage-based fees promised in exchange for licenses of intellectual property are not recognized as
revenue until the uncertainty related to the variable amounts is resolved. Revenues related to software maintenance and support
are recognized on a straight-line basis over the contract period.
Incentive revenues, volume discounts, or any other form of variable consideration is estimated using either the sum of
probability weighted amounts in a range of possible consideration amounts (expected value) or the single most likely amount in
a range of possible consideration amounts (most likely amount), depending on which method better predicts the amount of
consideration to which we may be entitled. We include in the transaction price variable consideration only to the extent it is
probable that a significant reversal of revenues recognized will not occur when the uncertainty associated with the variable
consideration is resolved. Our estimates of variable consideration and determination of whether and when to include estimated
amounts in the transaction price may involve judgment and are based largely on an assessment of our anticipated performance
and all information that is reasonably available to us.
Revenues also include the reimbursement of out-of-pocket expenses. Our warranties generally provide a customer with
assurance that the related deliverable will function as the parties intended because it complies with agreed-upon specifications
and are therefore not considered an additional performance obligation in the contract.
We enter into arrangements that consist of multiple performance obligations. Such arrangements may include any
combination of our deliverables. To the extent a contract includes multiple promised deliverables, we apply judgment to
determine whether promised deliverables are capable of being distinct and are distinct in the context of the contract. If these
criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For arrangements with
multiple distinct performance obligations, we allocate consideration among the performance obligations based on their relative
standalone selling price. Standalone selling price is the price at which we would sell a promised good or service separately to
the customer. When not directly observable, we typically estimate standalone selling price by using the expected cost plus
margin or, in limited circumstances, the residual value approach. We typically establish a standalone selling price range for our
deliverables, which is reassessed on a periodic basis or when facts and circumstances change.
We assess the timing of the transfer of goods or services to the customer as compared to the timing of payments to
determine whether a significant financing component exists. As a practical expedient, we do not assess the existence of a
significant financing component when the difference between payment and transfer of deliverables is a year or less. If the
difference in timing arises for reasons other than the provision of finance to either the customer or us, no financing component
is deemed to exist. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of
purchasing our services, not to receive or provide financing from or to customers. We do not consider set-up or transition fees
paid upfront by our customers to represent a financing component, as such fees are required to encourage customer
commitment to the project and protect us from early termination of the contract.
Our contracts may be modified to add, remove or change existing performance obligations. The accounting for
modifications to our contracts involves assessing whether the services added to an existing contract are distinct and whether the
pricing is at the standalone selling price. Services added that are not distinct are accounted for on a cumulative catch up basis,
while those that are distinct are accounted for prospectively, either as a separate contract if the additional services are priced at
the standalone selling price, or as a termination of the existing contract and creation of a new contract if not priced at the
standalone selling price. Services added to our application development and systems integration service contracts are typically
not distinct, while services added to our other contracts, including application maintenance, quality engineering and assurance
as well as business process services contracts, are typically distinct.
We enter into arrangements with third party suppliers to resell products or services. In such cases, we evaluate whether we
are the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis). In doing so, we evaluate
whether we control the good or service before it is transferred to the customer. If we control the good or service before it is
transferred to the customer, we are the principal; if not, we are the agent. Determining whether we control the good or service
before it is transferred to the customer requires significant judgment.
Cognizant
F-12
December 31, 2025 Form 10-K
Trade Accounts Receivable, Contract Assets and Contract Liabilities. We classify our right to consideration in exchange
for deliverables as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional (i.e., only
the passage of time is required before payment is due). For example, we recognize a receivable for revenues related to our time
and materials and transaction or volume-based contracts when earned regardless of whether amounts have been billed. We
present such receivables in "Trade accounts receivable, net" in our consolidated statements of financial position at their net
estimated realizable value. A contract asset is a right to consideration that is conditional upon factors other than the passage of
time. Contract assets are presented in "Other current assets" or "Other noncurrent assets" in our consolidated statements of
financial position, based on the expected timing of billing, and primarily relate to unbilled amounts on fixed-price contracts
utilizing the cost-to-cost method of revenue recognition. Our contract liabilities, or deferred revenue, consist of advance
payments from clients and billings in excess of revenues recognized. We classify deferred revenue as current or noncurrent
based on the timing of when we expect to recognize the revenues.
Our contract assets and contract liabilities are reported on a net basis by contract at the end of each reporting period. The
difference between the opening and closing balances of our contract assets and contract liabilities primarily results from the
timing difference between our performance obligations and the client’s payment. We receive payments from clients based on
the terms established in our contracts, which vary from contract to contract.
Allowance for Credit Losses. We calculate expected credit losses for our trade accounts receivable and contract assets.
Expected credit losses include losses expected based on known credit issues with specific customers as well as a general
expected credit loss allowance based on relevant information, including historical loss rates, current conditions, and reasonable
economic forecasts that affect collectibility. We update our allowance for credit losses on a quarterly basis with changes in the
allowance recognized in income from operations.
Costs to Fulfill. Recurring operating costs for contracts with customers are recognized as incurred. Certain eligible,
nonrecurring costs (i.e., set-up or transition costs) are capitalized when such costs (1) relate directly to the contract, (2) generate
or enhance resources of the Company that will be used in satisfying the performance obligation in the future, and (3) are
expected to be recovered. These costs are expensed ratably over the estimated life of the customer relationship, including
expected contract renewals. In determining the estimated life of the customer relationship, we evaluate the average contract
term on a portfolio basis by nature of the services to be provided, and apply judgment in evaluating the rate of technological
and industry change. Capitalized amounts are monitored regularly for impairment. Impairment losses are recorded when
projected remaining consideration that has not already been recognized as revenue less costs related to the services being
provided are not sufficient to recover the carrying amount of the capitalized costs to fulfill. Costs to fulfill are recorded in
"Other noncurrent assets" in our consolidated statements of financial position and the amortization expense of costs to fulfill is
included in "Cost of revenues" in our consolidated statements of operations.
Stock-Based Compensation. Stock-based compensation expense for awards of equity instruments to employees and non-
employee directors is determined based on the grant date fair value of those awards. We recognize these compensation costs net
of an estimated forfeiture rate over the requisite service period of the award. Forfeitures are estimated on the date of grant and
revised if actual or expected forfeiture activity differs materially from original estimates. Stock-based compensation expense
relating to RSUs and PSUs is recognized as shares vest over the requisite service period. If the minimum performance targets
are not met, no compensation cost is recognized and any recognized compensation cost is reversed, except for awards subject to
a market condition. The fair value of RSUs and PSUs is determined based on the number of stock units granted and the quoted
price of our stock at the date of grant. The fair value of PSUs granted subject to a market condition is determined using a Monte
Carlo valuation model.
Foreign Currency. The assets and liabilities of our foreign subsidiaries whose functional currency is not the U.S. dollar
are translated into U.S. dollars at current exchange rates while revenues and expenses are translated at average monthly
exchange rates. The resulting translation adjustments are recorded in the caption "Accumulated other comprehensive income
(loss)" on the consolidated statements of financial position.
Foreign currency transactions and balances are those that are denominated in a currency other than the entity’s functional
currency. An entity's functional currency is the currency of the primary economic environment in which it operates. The U.S.
dollar is the functional currency for some of our foreign subsidiaries. For these subsidiaries, transactions and balances
denominated in the local currency are foreign currency transactions. Foreign currency transactions and balances related to non-
monetary assets and liabilities are remeasured to the functional currency of the entity at historical exchange rates while
monetary assets and liabilities are remeasured to the functional currency of the entity at current exchange rates. Foreign
currency exchange gains or losses from remeasurement are included in the caption "Foreign currency exchange gains (losses),
net" on our consolidated statements of operations together with gains or losses on our undesignated foreign currency hedges.
Cognizant
F-13
December 31, 2025 Form 10-K
Derivative Financial Instruments. Derivative financial instruments are recorded on our consolidated statements of
financial position as either an asset or liability measured at its fair value as of the reporting date. Our derivative financial
instruments consist primarily of foreign exchange forward and option contracts. We designate certain derivative instruments as
accounting hedges when the relationship is formally documented and the hedge is expected to be highly effective in achieving
offsetting changes in the fair value of or cash flows of the hedged item. Changes in our derivatives’ fair values are recognized
in net income unless specific hedge accounting and documentation criteria are met (i.e., the instruments are designated and
accounted for as hedges). For derivative instruments designated as cash flow hedges, the entire change in fair value of the
hedging instrument is recorded in the caption "Accumulated other comprehensive income (loss)" in the consolidated statements
of financial position. Upon occurrence of the hedged transaction, the gains and losses on the derivative are recognized in net
income. The cash flow impacts of all derivative activities are reflected as cash flows from operating activities.
Defined Benefit Plans. The funded status of the defined benefit plans, which is measured as the difference between the
projected benefit obligation and the fair value of plan assets, is recognized on the consolidated statement of financial position.
The projected benefit obligation is measured annually using actuarial valuation. Net periodic benefit cost includes service cost,
interest cost, expected return on plan assets, and amortization of gains and losses and prior service costs. Gains and losses and
prior service costs are initially recognized as a component of other comprehensive income and subsequently amortized and
recognized as a component of net periodic benefit cost applying the requirements of applicable accounting guidance.
Assumptions used in measuring the benefit obligation and net periodic benefit cost, such as discount rates and expected return
on plan assets, are reviewed annually and updated as needed.
Income Taxes. We provide for income taxes utilizing the asset and liability method of accounting. Under this method,
deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets
and liabilities and their financial reporting amounts at each balance sheet date, based on enacted tax laws and statutory tax rates
applicable to the periods in which the differences are expected to affect taxable income. If it is determined that it is more likely
than not that future tax benefits associated with a deferred income tax asset will not be realized, a valuation allowance is
provided. The effect of a change in tax rates on deferred income tax assets and liabilities is recognized in the provision for
income taxes in the period that includes the enactment date.
Our provision for income taxes also includes the impact of reserves established for uncertain income tax positions, as
well as the related interest, which may require us to apply judgment to complex issues and may require an extended period of
time to resolve. We apply a “more likely than not” threshold when assessing the need for a reserve for an uncertain tax position,
which involves significant judgment. Although we believe we have adequately reserved for our uncertain tax positions, no
assurance can be given that the final outcome of these matters will not differ from our recorded amounts. We adjust these
reserves in light of changing facts and circumstances, such as the closing of a tax audit or the expiration of the applicable statute
of limitations. Additionally, we have tax positions that we believe are more likely than not to be realized and for which we have
therefore not established a reserve. To the extent that the final outcome of these matters differs from the amounts recorded, such
differences may materially impact, positively or negatively, the provision for income taxes in the period in which such
determination is made. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes.
Earnings Per Share. Basic EPS is computed by dividing earnings available to common stockholders by the weighted-
average number of common shares outstanding for the period. Diluted EPS, computed using the treasury stock method, includes
all potential dilutive common stock in the weighted average shares outstanding. We excluded less than 1 million of anti-dilutive
shares in each of 2025, 2024 and 2023 from our diluted EPS calculation. We include PSUs in the dilutive common shares when
they become contingently issuable per the authoritative guidance and exclude them when they are not contingently issuable.
Restructuring Charges. Restructuring charges principally consist of severance and related separation costs, facility exit
costs, third party and other costs necessary to the restructuring program. The Company accrues for severance and other related
separation costs when it is probable that termination benefits will be paid and the amount is reasonably estimable. Recognition
of employee severance and other separation costs is also dependent on requirements established by severance policy, statutory
laws, or historical experience. Facility exit costs generally reflect the accelerated lease expense for right-of-use assets, expected
lease termination costs, and asset impairments in connection with closure of certain sites, net of gains on exit-related disposals.
Third party and other costs include certain non-facility related asset impairments and professional services fees directly related
to the restructuring program.
Restructuring costs are recorded in “Restructuring charges” in the consolidated statements of operations. The restructuring
liability related to accrued employee separation costs is included in "Accrued expenses and other current liabilities" in the
consolidated statements of financial position.
Cognizant
F-14
December 31, 2025 Form 10-K
Recently Adopted Accounting Pronouncements
Date Issued and
Topic
Date Adopted
and Method
Description
Impact
December 2023
Income Taxes
(Topic 740):
Improvements to
Income Tax
Disclosures
Annual period
starting in 2025
Prospective basis
The standard requires enhanced income tax disclosures
primarily related to the income tax rate reconciliation and
income taxes paid information.
See
Note
10
for
disclosures that reflect the
adoption of this standard.
New Accounting Pronouncements
November 2024
Income Statement
—Reporting
Comprehensive
Income—Expense
Disaggregation
Disclosures
(Subtopic 220-40)
Annual period
starting in 2027
and interim
periods starting in
2028
Prospective basis
The standard is intended to improve financial reporting by
requiring that public business entities disclose additional
information about specific expense categories in the notes
to financial statements at interim and annual reporting
periods.
We
are
currently
evaluating the impact on
our disclosures.
July 2025
Financial
Instruments—
Credit Losses
(Topic 326):
Measurement of
Credit Losses for
Accounts
Receivable and
Contract Assets
Annual reporting
periods starting in
2026, and interim
reporting periods
within those
annual reporting
periods
Prospective basis
The standard is intended to simplify the measurement of
credit losses for accounts receivable and contract assets by
providing a practical expedient that allows an entity to
assume that current conditions as of the balance sheet date
do not change for the remaining life of the asset.
We
are
currently
evaluating the impact of
applying
the
practical
expedient.
September 2025
Intangibles—
Goodwill and
Other—Internal-
Use Software
(Subtopic
350-40): Targeted
Improvements to
the Accounting for
Internal-Use
Software
Annual reporting
periods starting in
2028, and interim
reporting periods
within those
annual reporting
periods
Prospective basis
The standard is intended to modernize the internal-use
software guidance, making it easier to apply to various
software development methods.
We
are
currently
evaluating the impact on
our internal use software
capitalization policy.
December 2025
Government
Grants (Topic
832): Accounting
for Government
Grants Received
by Business
Entities
Annual reporting
periods starting in
2029, and interim
reporting periods
within those
annual reporting
periods
Prospective basis
The standard provides authoritative guidance for business
entities receiving government grants, establishing rules for
their
recognition,
measurement,
presentation,
and
disclosure.
We
are
currently
evaluating
the
impact,
and we do not expect the
standard
to
have
a
significant impact on our
financial statements.
Date Issued and
Topic
Effective Date
Description
Impact
Cognizant
F-15
December 31, 2025 Form 10-K
December 2025
Interim Reporting
(Topic 270):
Narrow-Scope
Improvements
Interim reporting
periods within
annual reporting
periods starting in
2028
Prospective basis
The standard clarifies the applicability of Topic 270,
provides a comprehensive list of interim disclosures, and
includes a disclosure principle that requires entities to
disclose events since the end of the last annual reporting
period that have a material impact on the entity.
We
are
currently
evaluating the impact on
our interim disclosures.
Date Issued and
Topic
Effective Date
Description
Impact
Note 2 — Revenues and Trade Accounts Receivable
Disaggregation of Revenues
The tables below present disaggregated revenues from contracts with clients by client location, service line and contract
type for each of our reportable business segments. We believe this disaggregation best depicts how the nature, amount, timing
and uncertainty of revenues and cash flows are affected by industry, market and other economic factors. Our consulting and
technology services include consulting, application development, systems integration, quality engineering and assurance
services as well as software solutions and related services while our outsourcing services include application maintenance,
infrastructure and security as well as business process services. Revenues are attributed to geographic regions based upon client
location, which is the client's billing address. Substantially all revenues in the North America region relate to clients in the
United States.
Year Ended December 31, 2025
(in millions)
HS
FS
P&R
CMT
Total
Revenues
Geography:
North America
$
5,311 $
4,380 $
3,728 $
2,361 $
15,780
United Kingdom
214
643
584
481
1,922
Continental Europe
667
640
650
133
2,090
Europe - Total
881
1,283
1,234
614
4,012
Rest of World
155
510
323
328
1,316
Total
$
6,347 $
6,173 $
5,285 $
3,303 $
21,108
Service line:
Consulting and technology services
$
3,651 $
4,365 $
3,697 $
1,820 $
13,533
Outsourcing services
2,696
1,808
1,588
1,483
7,575
Total
$
6,347 $
6,173 $
5,285 $
3,303 $
21,108
Type of contract:
Time and materials
$
1,978 $
3,161 $
2,239 $
1,771 $
9,149
Fixed-price
3,149
2,811
2,685
1,365
10,010
Transaction or volume-based
1,220
201
361
167
1,949
Total
$
6,347 $
6,173 $
5,285 $
3,303 $
21,108
Cognizant
F-16
December 31, 2025 Form 10-K
Year Ended December 31, 2024
(in millions)
HS
FS
P&R
CMT
Total
Revenues
Geography:
North America
$
5,072 $
4,075 $
3,272 $
2,279 $
14,698
United Kingdom
186
572
558
511
1,827
Continental Europe
559
613
605
155
1,932
Europe - Total
745
1,185
1,163
666
3,759
Rest of World
115
493
347
324
1,279
Total
$
5,932 $
5,753 $
4,782 $
3,269 $
19,736
Service line:
Consulting and technology services
$
3,456 $
4,022 $
3,193 $
1,821 $
12,492
Outsourcing services
2,476
1,731
1,589
1,448
7,244
Total
$
5,932 $
5,753 $
4,782 $
3,269 $
19,736
Type of contract:
Time and materials
$
1,968 $
3,188 $
1,995 $
1,775 $
8,926
Fixed-price
2,878
2,384
2,442
1,324
9,028
Transaction or volume-based
1,086
181
345
170
1,782
Total
$
5,932 $
5,753 $
4,782 $
3,269 $
19,736
Year Ended December 31, 2023
(in millions)
HS
FS
P&R
CMT
Total
Revenues
Geography:
North America
$
4,865 $
4,091 $
3,102 $
2,205 $
14,263
United Kingdom
167
613
534
571
1,885
Continental Europe
533
605
612
159
1,909
Europe - Total
700
1,218
1,146
730
3,794
Rest of World
109
500
380
307
1,296
Total
$
5,674 $
5,809 $
4,628 $
3,242 $
19,353
Service line:
Consulting and technology services
$
3,238 $
3,965 $
3,010 $
1,751 $
11,964
Outsourcing services
2,436
1,844
1,618
1,491
7,389
Total
$
5,674 $
5,809 $
4,628 $
3,242 $
19,353
Type of contract:
Time and materials
$
2,004 $
3,215 $
1,837 $
1,832 $
8,888
Fixed-price
2,600
2,369
2,435
1,260
8,664
Transaction or volume-based
1,070
225
356
150
1,801
Total
$
5,674 $
5,809 $
4,628 $
3,242 $
19,353
Cognizant
F-17
December 31, 2025 Form 10-K
Costs to Fulfill
The following table shows significant movements in the capitalized costs to fulfill:
(in millions)
2025
2024
Beginning balance
$
209
$
245
Costs capitalized
42
55
Amortization expense
(78)
(89)
Impairment charges
(12)
(2)
Ending balance
$
161
$
209
Costs to obtain contracts were immaterial for the periods disclosed.
Contract Balances
The table below shows significant movements in contract assets (current and noncurrent):
(in millions)
2025
2024
Beginning balance
$
386
$
316
Revenues recognized during the period but not billed
451
358
Amounts reclassified to trade accounts receivable
(371)
(288)
Ending balance
$
466
$
386
The table below shows significant movements in the deferred revenue balances (current and noncurrent):
(in millions)
2025
2024
Beginning balance
$
480
$
427
Amounts billed but not recognized as revenues
474
421
Revenues recognized related to the beginning balance of deferred revenue
(416)
(380)
Amounts acquired in business combinations
—
12
Ending balance
$
538
$
480
Revenues recognized during the year ended December 31, 2025 for performance obligations satisfied or partially satisfied
in previous periods were immaterial.
Remaining Performance Obligations
As of December 31, 2025, the aggregate amount of transaction price allocated to remaining performance obligations, was
$6,279 million, of which approximately 35% is expected to be recognized as revenues within 1 year, approximately 55% is
expected to be recognized as revenues within 2 years and approximately 95% is expected to be recognized as revenues within 5
years. Disclosure is not required for performance obligations that meet any of the following criteria:
(1) contracts with a duration of one year or less as determined under ASC Topic 606: "Revenue from Contracts with
Customers,"
(2) contracts for which we recognize revenues based on the right to invoice for services performed,
(3) variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied
promise to transfer a distinct good or service that forms part of a single performance obligation in accordance with
ASC 606-10-25-14(b), for which the criteria in ASC 606-10-32-40 have been met, or
(4) variable consideration in the form of a sales-based or usage-based royalty promised in exchange for a license of
intellectual property.
Many of our performance obligations meet one or more of these exemptions and therefore are not included in the
remaining performance obligation amount disclosed above.
Cognizant
F-18
December 31, 2025 Form 10-K
Trade Accounts Receivable and Allowance for Credit Losses
The following table presents the activity in the allowance for credit losses for trade accounts receivable:
(in millions)
2025
2024
2023
Beginning balance
$
26
$
32 $
43
Credit loss expense (1)
11
12
12
Write-offs charged against the allowance
(14)
(18)
(23)
Ending balance
$
23
$
26 $
32
(1)
Reported in "Selling, general and administrative expenses" in our consolidated statements of operations.
Note 3 — Business Combinations
On January 1, 2026, we acquired 100% ownership in 3Cloud, one of the largest independent Microsoft Azure services
providers and a global leader in Azure-dedicated AI enablement solutions and products. On December 31, 2025, we placed cash
consideration of $733 million in escrow, which was deemed to be restricted cash and included in "Other noncurrent assets" in
our consolidated statement of financial position. See Note 18.
There were no acquisitions completed during the year ended December 31, 2025. Acquisitions completed during each of
the years ended December 31, 2024 and 2023 were not individually or in the aggregate material to our operations. Accordingly,
pro forma results have not been presented. The primary items that generated goodwill are the acquired assembled workforces
and synergies between the acquired companies and us, neither of which qualify as an identifiable intangible asset.
2024
On January 22, 2024, through the execution of a share purchase agreement, we acquired 100% ownership in Thirdera, an
Elite ServiceNow Partner specializing in advisory, implementation and optimization solutions related to the ServiceNow
platform.
On August 26, 2024, through the execution of a merger agreement, we acquired 100% ownership in Belcan, a leading
global supplier of engineering research & development services for the commercial aerospace, defense, space, marine and
industrial verticals. We paid $1,195 million in cash, net of cash acquired, and issued 1,470,589 shares of our Class A common
stock, valued at $113 million, in connection with our acquisition of Belcan.
The allocations of purchase price to the fair value of the aggregate assets acquired and liabilities assumed were as
follows:
(in millions)
Thirdera
Belcan
Total
Weighted Average
Useful Life
Cash
$
8 $
55 $
63
Trade accounts receivable
21
173
194
Other current assets
11
22
33
Property and equipment and other noncurrent assets
2
22
24
Operating lease assets
—
55
55
Non-deductible goodwill
180
614
794
Tax-deductible goodwill
164
—
164
Customer relationship assets
73
539
612
11.0 years
Other definite-lived intangible assets
1
—
1
1.0 years
Indefinite-lived intangible assets
—
45
45
Operating lease liabilities, current
—
(8)
(8)
Other current liabilities
(29)
(72)
(101)
Deferred income tax liabilities, net
(3)
(34)
(37)
Operating lease liabilities, noncurrent
—
(48)
(48)
Purchase price
$
428 $ 1,363 $ 1,791
For the year ended December 31, 2024, revenues from acquisitions completed in 2024, since the dates of acquisition, were
$384 million.
Cognizant
F-19
December 31, 2025 Form 10-K
2023
In 2023, we acquired 100% ownership in each of the following:
•
Certain net assets of OneSource Virtual, the professional and application management services business of
OneSource Virtual, Inc. and OneSource Virtual (UK) Ltd., a leading provider of Workday services, solutions and
products, acquired to complement our existing finance and human resources advisory implementation services
related to Workday (acquired January 1, 2023), and
•
Mobica, an IoT software engineering services provider, acquired to expand our IoT embedded software engineering
capabilities (acquired March 10, 2023).
The allocations of purchase price to the fair value of the aggregate assets acquired and liabilities assumed were as
follows:
(in millions)
OneSource
Virtual
Mobica
Total
Weighted Average
Useful Life
Cash
$
— $
20 $
20
Trade accounts receivable
—
10
10
Other current assets
4
8
12
Property and equipment and other assets
1
6
7
Non-deductible goodwill
18
202
220
Tax-deductible goodwill
88
—
88
Customer relationship assets
11
120
131
10.9 years
Current liabilities
(18)
(9)
(27)
Noncurrent liabilities
(1)
(32)
(33)
Purchase price
$
103 $
325 $
428
For the year ended December 31, 2023, revenues from acquisitions completed in 2023, since the dates of acquisition, were
$130 million.
Note 4 — Restructuring Charges
At the end of 2024, we completed our NextGen program. We did not incur any costs related to the NextGen program
during 2025.
The total costs related to our NextGen program are reported in "Restructuring charges" in our consolidated statements of
operations. We do not allocate these charges to individual segments in internal management reports used by the CODM.
Accordingly, such expenses are separately disclosed in our segment reporting as “unallocated costs.” See Note 17. The costs
related to our NextGen program were as follows for the years ended December 31:
(in millions)
2024
2023
Employee separation costs
$
85
$
115
Facility exit costs (1)
36
108
Third party and other costs (2)
13
6
Total restructuring charges
$
134
$
229
(1)
For the year ended December 31, 2024, facility exit costs include lease restructuring of $23 million and accelerated
depreciation charges of $13 million. For the year ended December 31, 2023, facility exit costs include lease
restructuring of $71 million, accelerated depreciation charges of $36 million and impairment of long-lived assets of
$1 million.
(2)
Third party and other costs include certain non-facility related asset impairments and professional services fees directly
related to the NextGen program.
Cognizant
F-20
December 31, 2025 Form 10-K
Changes in our accrued employee separation costs included in "Accrued expenses and other current liabilities" in our
consolidated statements of financial position are presented in the table below for the years ended December 31:
(in millions)
2025
2024
Beginning balance
$
35
$
42
Employee separation costs accrued
—
85
Payments made
(35)
(92)
Ending balance
$
—
$
35
Note 5 — Property and Equipment, net
Property and equipment were as follows as of December 31:
Estimated Useful Life
2025
2024
(in years)
(in millions)
Buildings
30
$
719
$
736
Computer equipment
3 – 5
865
811
Computer software
3 – 8
1,123
1,024
Furniture and equipment
5 – 9
745
716
Land
6
6
Capital work-in-progress
98
115
Leasehold improvements
Shorter of the lease term or
the life of the asset
373
373
Sub-total
3,929
3,781
Accumulated depreciation and amortization
(2,996)
(2,787)
Property and equipment, net
$
933
$
994
Depreciation and amortization expense related to property and equipment was $332 million, $354 million and $390
million for the years ended December 31, 2025, 2024 and 2023, respectively. For the years ended December 31, 2024 and 2023,
$13 million and $36 million, respectively, of our depreciation and amortization expense was reported in "Restructuring
charges". There were no restructuring charges during the year ended December 31, 2025. During the three months ended March
31, 2025, we sold an office complex in India for proceeds of $70 million and recorded a gain on the transaction of $62 million,
which was reported in "(Gain) on sale of property and equipment" on our consolidated statement of operations. As of December
31, 2024, the physical assets held for sale related to this office complex were reported in "Other current assets".
The gross amount of property and equipment recorded under finance leases was $33 million and $30 million as of
December 31, 2025 and 2024, respectively. Accumulated amortization for our ROU finance lease assets was $23 million and
$16 million as of December 31, 2025 and 2024, respectively. Amortization expense related to our ROU finance lease assets was
$5 million, $5 million and $4 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The gross amount of property and equipment recorded for software to be sold, leased or marketed reported in the caption
"Computer software" above was $377 million and $338 million as of December 31, 2025 and 2024, respectively. Accumulated
amortization for software to be sold, leased or marketed was $252 million and $210 million as of December 31, 2025 and 2024,
respectively. Amortization expense for software to be sold, leased or marketed recorded as property and equipment was $43
million, $36 million, and $37 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Cognizant
F-21
December 31, 2025 Form 10-K
Note 6 — Leases
The following table provides information on the components of our operating and finance leases included in our
consolidated statement of financial position as of December 31:
Leases
Location on Statement of Financial Position
2025
2024
Assets
(in millions)
ROU operating lease assets
Operating lease assets, net
$
573 $
552
ROU finance lease assets
Property and equipment, net
10
14
Total
$
583 $
566
Liabilities
Current
Operating lease
Operating lease liabilities
$
153 $
152
Finance lease
Accrued expenses and other current liabilities
10
8
Noncurrent
Operating lease
Operating lease liabilities, noncurrent
423
420
Finance lease
Other noncurrent liabilities
12
15
Total
$
598 $
595
For the years ended December 31, 2025, 2024 and 2023, our operating lease costs were $197 million, $216 million and
$304 million, respectively, including variable lease costs of $19 million, $23 million and $21 million, respectively. Our short-
term lease rental expense was $16 million, $11 million and $15 million for the years ended December 31, 2025, 2024 and 2023,
respectively. Lease interest expense related to our finance leases for each of the years ended December 31, 2025, 2024 and 2023
was immaterial.
The following table provides information on the weighted average remaining lease term and weighted average discount
rate for our operating leases as of December 31:
Operating Lease Term and Discount Rate
2025
2024
Weighted average remaining lease term
4.9 years
5.3 years
Weighted average discount rate
5.7 %
5.5 %
The following table provides supplemental cash flow and non-cash information related to our operating leases for the
years ended December 31:
(in millions)
2025
2024
2023
Cash paid for amounts included in the measurement of operating lease liabilities
$
192 $
251 $
240
ROU assets obtained in exchange for operating lease liabilities
160
123
86
Reduction of ROU assets and lease liabilities as a result of our NextGen program
—
(62)
(110)
Cash paid for amounts included in the measurement of finance lease liabilities and ROU assets obtained in exchange for
finance lease liabilities were each immaterial for each of the years ended December 31, 2025, 2024 and 2023.
The following table provides the schedule of maturities of our operating lease liabilities and a reconciliation of the
undiscounted cash flows to the operating lease liabilities recognized in the statement of financial position as of December 31:
(in millions)
2025
2026
$
182
2027
150
2028
120
2029
83
2030
54
Thereafter
84
Total operating lease payments
673
Interest
(97)
Total operating lease liabilities
$
576
Cognizant
F-22
December 31, 2025 Form 10-K
As of December 31, 2025, additional obligations related to operating leases whose lease term had yet to commence were
immaterial.
Note 7 — Goodwill and Intangible Assets, net
Changes in goodwill by our reportable business segments were as follows for the years ended December 31, 2025 and
2024:
(in millions)
January 1,
2025
Goodwill
Additions
Foreign Currency
Translation
Adjustments
December 31,
2025
Health Sciences
$
2,895
$
—
$
20
$
2,915
Financial Services
1,129
—
48
1,177
Products and Resources
1,884
—
50
1,934
Communications, Media and Technology
1,045
—
35
1,080
Total goodwill
$
6,953
$
—
$
153
$
7,106
(in millions)
January 1,
2024
Goodwill
Additions and
Adjustments
Foreign Currency
Translation
Adjustments
December 31,
2024
Health Sciences
$
2,840
$
68
$
(13)
$
2,895
Financial Services
1,109
48
(28)
1,129
Products and Resources
1,217
698
(31)
1,884
Communications, Media and Technology
919
144
(18)
1,045
Total goodwill
$
6,085
$
958
$
(90)
$
6,953
Based on our most recent goodwill impairment assessment performed as of October 31, 2025, we concluded that the
goodwill in each of our reporting units was not at risk of impairment. We have not recognized any impairment losses on our
goodwill.
Components of intangible assets were as follows as of December 31:
2025
2024
(in millions)
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Customer relationships
$
2,593
$
(1,310)
$
1,283
$
2,534
$
(1,068)
$
1,466
Developed technology
394
(386)
8
384
(379)
5
Indefinite lived trademarks
116
—
116
116
—
116
Finite lived trademarks
and other
84
(74)
10
81
(69)
12
Total intangible assets
$
3,187
$
(1,770)
$
1,417
$
3,115
$
(1,516)
$
1,599
Other than certain trademarks with indefinite lives, our intangible assets have finite lives and, as such, are subject to
amortization. Amortization of intangible assets totaled $218 million, $188 million and $165 million for the years ended
December 31, 2025, 2024 and 2023, respectively.
The following table provides the estimated amortization expense related to our existing intangible assets for the next five
years.
(in millions)
Estimated Amortization
2026
$
217
2027
209
2028
187
2029
169
2030
144
Cognizant
F-23
December 31, 2025 Form 10-K
Note 8 — Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities were as follows as of December 31:
(in millions)
2025
2024
Compensation and benefits
$
1,490
$
1,499
Customer volume and other incentives
317
247
Liabilities related to the resale of third-party products
242
154
Professional fees
193
171
Income taxes
18
100
Other
404
439
Total accrued expenses and other current liabilities
$
2,664
$
2,610
Note 9 — Debt
We have a Credit Agreement providing for a $650 million Term Loan and a $1,850 million unsecured revolving credit
facility, which are each due to mature in October 2027. We are required under the Credit Agreement to make scheduled
quarterly principal payments on the Term Loan. During the third quarter of 2024, we borrowed $600 million under our
revolving credit facility to partially fund the acquisition of Belcan. We repaid $300 million during the fourth quarter of 2024
and the remaining $300 million during the first quarter of 2025.
The Credit Agreement requires interest to be paid, at our option, at either the Term Benchmark, Adjusted Daily Simple
RFR or the ABR Rate (each as defined in the Credit Agreement), plus, in each case, an Applicable Margin (as defined in the
Credit Agreement). Initially, the Applicable Margin is 0.875% with respect to Term Benchmark loans and RFR loans and
0.00% with respect to ABR loans. Subsequently, the Applicable Margin with respect to Term Benchmark loans and RFR loans
will be determined quarterly and may range from 0.75% to 1.125%, depending on our public debt ratings or, if we have not
received public debt ratings, from 0.875% to 1.125%, depending on our Leverage Ratio, which is the ratio of indebtedness for
borrowed money to Consolidated EBITDA, as defined in the Credit Agreement. Since the issuance of the Term Loan, the Term
Loan has been a Term Benchmark loan. The Credit Agreement contains customary affirmative and negative covenants as well
as a financial covenant. The financial covenant is tested at the end of each fiscal quarter and requires us to maintain a Leverage
Ratio not in excess of 3.50:1.00, or for a period of up to four quarters following certain material acquisitions, 3.75:1.00. We
were in compliance with all debt covenants and representations of the Credit Agreement as of December 31, 2025.
Short-term Debt
As of each of December 31, 2025 and 2024, we had $33 million of short-term debt related to current maturities of our
Term Loan, with a weighted average interest rate of 4.7% and 5.3%, respectively.
Long-term Debt
The following table summarizes the long-term debt balances as of December 31:
(in millions)
2025
2024
Notes outstanding under revolving credit facility
$
— $
300
Term Loan
577
610
Less:
Current maturities - Term Loan
(33)
(33)
Unamortized deferred financing costs
(1)
(2)
Long-term debt, net of current maturities
$
543 $
875
The carrying value of our debt approximated its fair value as of each of December 31, 2025 and 2024.
The following represents the schedule of maturities of our Term Loan:
Year
Amounts (in millions)
2026
$
33
2027
544
Total
$
577
Cognizant
F-24
December 31, 2025 Form 10-K
Note 10 — Income Taxes
Effective January 1, 2025, we adopted the new income tax disclosure standard (Income Taxes (Topic 740): Improvements
to Income Tax Disclosures) on a prospective basis. Accordingly, the tables presenting our income tax provision and effective
tax rate reconciliation will reflect the new standard for 2025, while the 2024 and 2023 disclosures will continue to follow the
previous disclosure requirements.
Income before provision for income taxes shown below is based on the geographic location to which such income was
attributed for years ended December 31:
(in millions)
2025
2024
2023
United States
$
1,189
$
906
$
813
Foreign
2,290
2,032
1,974
Income before provision for income taxes
$
3,479
$
2,938
$
2,787
The provision for income taxes consisted of the following components for the years ended December 31:
(in millions)
2025
2024
2023
Current:
Federal
$
216
State
139
Federal and state
$
426
$
522
Foreign
576
Foreign
642
485
Total current provision
931
1,068
1,007
Deferred:
Federal
302
State
4
Federal and state
(229)
(354)
Foreign
21
Foreign
(126)
15
Total deferred income tax (benefit)
327
(355)
(339)
Total provision for income taxes
$
1,258
$
713
$
668
We are involved in two separate ongoing disputes with the ITD in connection with previously disclosed share repurchase
transactions undertaken by CTS India in 2013 and 2016 to repurchase shares from its shareholders (non-Indian Cognizant
entities) valued at $523 million and $2.8 billion, respectively.
The 2016 transaction was undertaken pursuant to a plan approved by the High Court in Chennai, India, and resulted in the
payment of $135 million in Indian income taxes - an amount we believe includes all the applicable taxes owed for this
transaction under Indian law. In March 2018, the ITD asserted that it is owed an additional 33 billion Indian rupees
($367 million at the December 31, 2025 exchange rate) on the 2016 transaction. We deposited 5 billion Indian rupees,
representing 15% of the disputed tax amount related to the 2016 transaction, with the ITD. Additionally, certain time deposits
of CTS India were placed under lien in favor of the ITD, representing the remainder of the disputed tax amount.
In April 2020, we received a formal assessment from the ITD on the 2016 transaction, which is consistent with the ITD's
previous assertions. Our appeal was ruled on unfavorably by the CITA in March 2022 and by the ITAT in September 2023. We
filed an appeal against the order of the ITAT with the High Court. On January 8, 2024, the SCI ruled that, in order to proceed
with the appeal, we must deposit 30 billion Indian rupees, representing the time deposits of CTS India under lien, on the
condition that, if CTS India prevails at the High Court, the amount deposited will be returned to CTS India, along with interest
accrued, within four weeks of the judgment. We made the required deposit in January 2024 and, in April 2024, the case
commenced before the High Court.
As of December 31, 2025 and 2024, the deposit with the ITD was $384 million and $403 million, respectively at
December 31, 2025 and 2024 exchange rates, respectively presented in "Other noncurrent assets". As of December 31, 2023,
the deposits related to the ITD dispute were comprised of $355 million in deposits under lien presented in "Long-term
investments" and $60 million on deposit with the ITD presented in "Other noncurrent assets". Of the $355 million in deposits
under lien, $96 million were held in time deposits with a maturity of less than 30 days qualifying as cash equivalent instruments
and thus were considered restricted cash equivalents as of December 31, 2023.
Cognizant
F-25
December 31, 2025 Form 10-K
The dispute in relation to the 2013 share repurchase transaction is also in litigation. At this time, the ITD has not made
specific demands with regards to the 2013 transaction.
We continue to believe we have paid all applicable taxes owed on both the 2016 and the 2013 transactions and we
continue to defend our positions with respect to both matters. Accordingly, we have not recorded any reserves for these matters
as of December 31, 2025.
The reconciliation between the U.S. federal statutory rate and our effective income tax rate were as follows for the years
ended December 31:
(in millions)
2025
%
Tax expense, at U.S. federal statutory rate
$
731
21.0
State and local income taxes (net of federal benefit)1
113
3.2
Foreign tax effects
United Kingdom
Statutory tax rate difference
49
1.4
India
86
2.5
Other foreign jurisdictions
17
0.5
Effect of changes in tax laws or rates enacted in the current period2
336
9.7
Effect of cross- border tax laws
Foreign-derived intangible income (FDII)
(55)
(1.6)
Tax credits
(8)
(0.2)
Changes in valuation allowances
(2)
—
Nontaxable or nondeductible items
(3)
(0.1)
Changes in unrecognized tax benefits
(6)
(0.2)
Tax expense, at effective tax rate
$
1,258
36.2
(1)
State taxes in New York (including local taxes in New York City) and Connecticut made up the majority (greater than
50 percent) of the tax effect in this category.
(2)
In July 2025, the OBBBA was enacted in the United States, which, among other provisions, repealed the requirement
to capitalize U.S. R&E costs. As a result, we do not believe it is more likely than not that we will realize our deferred
tax asset of $390 million related to R&E costs capitalized outside the United States. Of this $390 million, $336 million
related to federal income tax while the remaining $54 million related to state and local income tax. These amounts
would have otherwise been available to offset certain future U.S. taxes on our non-U.S. earnings, which, as a result of
this repeal, we no longer project to be applicable to us. Therefore, in the third quarter of 2025, we recorded a one-time,
non-cash income tax expense of $390 million.
(Dollars in millions)
2024
%
2023
%
Tax expense, at U.S. federal statutory rate
$
617
21.0
$
585
21.0
State and local income taxes, net of federal benefit
74
2.5
55
2.0
Rate differential on foreign earnings
104
3.5
95
3.4
Recognition of benefits related to uncertain tax positions
(15)
(0.5)
(33)
(1.2)
Credits and other incentives
(57)
(1.9)
(37)
(1.3)
Other
(10)
(0.3)
3
0.1
Total provision for income taxes
$
713
24.3
$
668
24.0
Cognizant
F-26
December 31, 2025 Form 10-K
Income taxes paid, net of refunds for the year ended December 31, 2025 were as follows:
(in millions)
Amount
Income Taxes Paid
U.S. federal
$
272
U.S. state & local
140
Foreign
UK
246
India
226
Other jurisdictions
101
Cash paid during the period for income taxes
$
985
The significant components of deferred income tax assets and liabilities recorded on the consolidated statements of
financial position were as follows as of December 31:
(in millions)
2025
2024
Deferred income tax assets:
Net operating losses
$
45
$
50
Revenue recognition (including intercompany revenue)
422
51
Compensation and benefits
204
164
Credit carryforwards
18
11
Expenses not currently deductible
848
1,189
1,537
1,465
Less: valuation allowance
(427)
(48)
Deferred income tax assets, net
1,110
1,417
Deferred income tax liabilities:
Depreciation and amortization
295
298
Deferred costs
16
25
Deferred income tax liabilities
311
323
Net deferred income tax assets
$
799
$
1,094
At December 31, 2025, we had foreign and U.S. net operating loss carryforwards of approximately $119 million and $75
million, respectively. We have recorded valuation allowances on certain net operating loss carryforwards.
We conduct business globally and file income tax returns in the United States, including federal and state, as well as
various foreign jurisdictions. Tax years that remain subject to examination by the IRS are 2019 and onward, and years that
remain subject to examination by state authorities vary by state. Years under examination by foreign tax authorities are 2003
and onward. In addition, transactions between our affiliated entities are arranged in accordance with applicable transfer pricing
laws, regulations and relevant guidelines. As a result, and due to the interpretive nature of certain aspects of these laws and
guidelines, we have pending applications for APAs before the taxing authorities in some of our most significant jurisdictions.
Changes in unrecognized income tax benefits were as follows for the years ended December 31:
(in millions)
2025
2024
2023
Balance, beginning of year
$
319
$
260
$
269
Additions based on tax positions related to the current year
37
15
31
Additions for tax positions of prior years
147
65
22
Reductions for tax positions due to lapse of statutes of limitations
(5)
(15)
(15)
Reductions for tax positions related to prior years
(3)
(6)
(33)
Settlements
(8)
—
(14)
Balance, end of year
$
487
$
319
$
260
Cognizant
F-27
December 31, 2025 Form 10-K
The total amount of accrued net interest and penalties was $51 million and $35 million as of December 31, 2025 and
2024, respectively, and related to U.S. and foreign tax matters. The total amount of net interest and penalties recorded in the
provision for income taxes in each of 2025, 2024 and 2023 was immaterial.
Note 11 — Derivative Financial Instruments
In the normal course of business, we use foreign exchange forward and option contracts to manage foreign currency
exchange rate risk. Derivatives may give rise to credit risk from the possible non-performance by counterparties. Credit risk is
limited to the fair value of those contracts that are favorable to us. We have limited our credit risk by limiting the amount of
credit exposure with any one financial institution and conducting ongoing evaluation of the creditworthiness of the financial
institutions with which we do business. In addition, all the assets and liabilities related to the foreign exchange derivative
contracts set forth in the table below are subject to master netting arrangements, such as the International Swaps and
Derivatives Association Master Agreement, with each individual counterparty. These master netting arrangements generally
provide for net settlement of all outstanding contracts with the counterparty in the case of an event of default or a termination
event. We have presented all the assets and liabilities related to the foreign exchange derivative contracts, as applicable, on a
gross basis, with no offsets, in our consolidated statements of financial position. There is no financial collateral (including cash
collateral) posted or received by us related to the foreign exchange derivative contracts.
The following table provides information on the location and fair values of derivative financial instruments included in
our consolidated statements of financial position as of December 31:
(in millions)
2025
2024
Designation of Derivatives
Location on Statement of
Financial Position
Assets
Liabilities
Assets
Liabilities
Foreign exchange forward and option
contracts – Designated as cash flow
hedging instruments
Other current assets
$
1
$
—
$
1
$
—
Accrued expenses and
other current liabilities
—
63
—
22
Other noncurrent liabilities
—
22
—
13
Total
1
85
1
35
Foreign exchange forward contracts -
Not designated as hedging instruments
Other current assets
2
—
1
—
Accrued expenses and
other current liabilities
—
1
—
2
Total
2
1
1
2
Total
$
3
$
86
$
2
$
37
Cash Flow Hedges
We have entered and continue to enter into a series of foreign exchange derivative contracts that are designated as cash
flow hedges of Indian rupee denominated payments in India. These contracts are intended to partially offset the impact of
movement of the Indian rupee against the U.S. dollar on future operating costs and are scheduled to mature each month during
2026 and 2027. The changes in fair value of these contracts are initially reported in "Accumulated other comprehensive income
(loss)" in our consolidated statements of financial position and are subsequently reclassified to earnings within "Cost of
revenues" and "Selling, general and administrative expenses" in our consolidated statements of operations in the same period
that the forecasted Indian rupee denominated payments are recorded in earnings. As of December 31, 2025, we estimate that
$47 million, net of tax, of net losses related to derivatives designated as cash flow hedges reported in "Accumulated other
comprehensive income (loss)" in our consolidated statements of financial position is expected to be reclassified into earnings
within the next 12 months.
Cognizant
F-28
December 31, 2025 Form 10-K
The notional value of the outstanding contracts by year of maturity was as follows as of December 31:
(in millions)
2025
2024
2025
$
—
$
2,010
2026
2,290
920
2027
1,020
—
Total notional value of contracts outstanding
$
3,310
$
2,930
The activity related to the change in net unrealized gains and losses on the cash flow hedges included in "Accumulated
other comprehensive income (loss)" in our consolidated statements of stockholders' equity is presented in Note 13.
Other Derivatives
We use foreign exchange forward contracts to provide an economic hedge against balance sheet exposures to certain
monetary assets and liabilities denominated in currencies other than the functional currency of our foreign subsidiaries. We
entered into foreign exchange forward contracts that are scheduled to mature in the first quarter of 2026. Realized gains or
losses and changes in the estimated fair value of these derivative financial instruments are recorded in the caption "Foreign
currency exchange gains (losses), net" in our consolidated statements of operations.
Additional information related to the outstanding foreign exchange forward contracts not designated as hedging
instruments was as follows as of December 31:
(in millions)
2025
2024
Notional
Fair Value
Notional
Fair Value
Contracts outstanding
$
748
$
1
$
489
$
(1)
The following table provides information on the location and amounts of realized and unrealized pre-tax gains and losses
on the other derivative financial instruments for the year ended December 31:
(in millions)
Location of Net Gains
on Derivative Instruments
Amount of Net Gains
on Derivative Instruments
2025
2024
Foreign exchange forward contracts - Not designated as hedging
instruments
Foreign currency exchange
gains, net
$
3 $
10
Note 12 — Fair Value Measurements
We measure our cash equivalents, certain investments, contingent consideration liabilities and foreign exchange forward
contracts at fair value. Fair value is the exit price, or the amount that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants as of the measurement date. The fair value hierarchy is based on
inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs
reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from
independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions.
The fair value hierarchy consists of the following three levels:
•
Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities.
•
Level 2 – Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or
similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and
market-corroborated inputs which are derived principally from or corroborated by observable market data.
•
Level 3 – Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are
unobservable.
Cognizant
F-29
December 31, 2025 Form 10-K
The following table summarizes the financial assets and (liabilities) measured at fair value on a recurring basis as of
December 31, 2025:
(in millions)
Level 1
Level 2
Level 3
Total
Cash equivalents:
Money market funds
$
24
$
—
$
—
$
24
Time deposits
—
183
—
183
Short-term investments:
Time deposits
—
1
—
1
Equity investment security
12
—
—
12
Other current assets:
Foreign exchange forward contracts
—
3
—
3
Accrued expenses and other current liabilities:
Foreign exchange forward contracts
—
(64)
—
(64)
Other noncurrent liabilities:
Foreign exchange forward contracts
—
(22)
—
(22)
The following table summarizes the financial assets and (liabilities) measured at fair value on a recurring basis as of
December 31, 2024:
(in millions)
Level 1
Level 2
Level 3
Total
Cash equivalents:
Money market funds
$
40
$
—
$
—
$
40
Time deposits
—
991
—
991
Short-term investments:
Time deposits
—
1
—
1
Equity investment security
11
—
—
11
Other current assets:
Foreign exchange forward contracts
—
2
—
2
Accrued expenses and other current liabilities:
Foreign exchange forward contracts
—
(24)
—
(24)
Other noncurrent liabilities:
Foreign exchange forward contracts
—
(13)
—
(13)
During the three months ended March 31, 2024, we made $30 million of payments related to Level 3 contingent
consideration liabilities, which reduced the balance of these liabilities to zero. We did not have any Level 3 contingent
consideration liabilities during 2025.
We measure the fair value of money market funds based on quoted prices in active markets for identical assets and
measure the fair value of our equity investment security based on the published daily net asset value at which investors can
freely subscribe to or redeem from the fund. Our equity investment security is a U.S. dollar denominated investment in a fixed
income mutual fund. The carrying value of the time deposits approximated fair value as of December 31, 2025 and 2024.
We estimate the fair value of each foreign exchange forward contract by using a present value of expected cash flows
model. This model calculates the difference between the current market forward price and the contracted forward price for each
foreign exchange forward contract and applies the difference in the rates to each outstanding contract. The market forward rates
include a discount and credit risk factor.
During the years ended December 31, 2025, 2024 and 2023 there were no transfers among Level 1, Level 2 or Level 3
financial assets and liabilities.
Cognizant
F-30
December 31, 2025 Form 10-K
Note 13 — Accumulated Other Comprehensive Income (Loss)
Changes in "Accumulated other comprehensive income (loss)" by component were as follows for the year ended
December 31, 2025:
2025
(in millions)
Before Tax
Amount
Tax
Effect
Net of Tax
Amount
Foreign currency translation adjustments:
Beginning balance
$
(261)
$
7
$
(254)
Change in foreign currency translation adjustments
272
(6)
266
Ending balance
$
11
$
1
$
12
Unrealized (losses) on cash flow hedges:
Beginning balance
$
(34)
$
9
$
(25)
Unrealized (losses) arising during the period
(85)
21
(64)
Reclassifications of net losses to:
Cost of revenues
32
(8)
24
SG&A expenses
3
(1)
2
Net change
(50)
12
(38)
Ending balance
$
(84)
$
21
$
(63)
Changes in net defined benefit obligations:
Beginning balance
$
(20)
$
3
$
(17)
Prior service costs1 and gains and losses, net of amortization
(129)
37
(92)
Ending balance
$
(149)
$
40
$
(109)
Accumulated other comprehensive income (loss):
Beginning balance
$
(315)
$
19
$
(296)
Other comprehensive income (loss)
93
43
136
Ending balance
$
(222)
$
62
$
(160)
(1)
See Note 15.
Cognizant
F-31
December 31, 2025 Form 10-K
Changes in "Accumulated other comprehensive income (loss)" by component were as follows for the years ended
December 31, 2024 and 2023:
2024
2023
(in millions)
Before Tax
Amount
Tax
Effect
Net of Tax
Amount
Before Tax
Amount
Tax
Effect
Net of Tax
Amount
Foreign currency translation adjustments:
Beginning balance
$
(109)
$
5
$
(104)
$
(256)
$
8
$
(248)
Change in foreign currency
translation adjustments
(152)
2
(150)
147
(3)
144
Ending balance
$
(261)
$
7
$
(254)
$
(109)
$
5
$
(104)
Unrealized gains (losses) on cash flow
hedges:
Beginning balance
$
13
$
(3)
$
10
$
(68)
$
17
$
(51)
Unrealized (losses) gains arising
during the period
(35)
9
(26)
55
(14)
41
Reclassifications of net (gains)
losses to:
Cost of revenues
(11)
3
(8)
23
(5)
18
SG&A expenses
(1)
—
(1)
3
(1)
2
Net change
(47)
12
(35)
81
(20)
61
Ending balance
$
(34)
$
9
$
(25)
$
13
$
(3)
$
10
Losses on defined benefit plans:
Beginning balance
$
—
$
—
$
—
$
—
$
—
$
—
Losses on defined benefit plans
(20)
3
(17)
—
—
—
Ending balance
$
(20)
$
3
$
(17)
$
—
$
—
$
—
Accumulated other comprehensive
income (loss):
Beginning balance
$
(96)
$
2
$
(94)
$
(324)
$
25
$
(299)
Other comprehensive income
(loss)
(219)
17
(202)
228
(23)
205
Ending balance
$
(315)
$
19
$
(296)
$
(96)
$
2
$
(94)
Note 14 — Commitments and Contingencies
We are involved in various claims and legal proceedings arising in the ordinary course of business. We accrue a liability
when a loss is considered probable and the amount can be reasonably estimated. When a material loss contingency is
reasonably possible but not probable, we do not record a liability, but instead disclose the nature and the amount of the claim,
and an estimate of the loss or range of loss, if such an estimate can be made. Legal fees are expensed as incurred. While we do
not expect that the ultimate resolution of any existing claims and proceedings (other than the specific matters described below,
if decided adversely), individually or in the aggregate, will have a material adverse effect on our financial position, an
unfavorable outcome in some or all of these proceedings could have a material adverse impact on results of operations or cash
flows for a particular period. This assessment is based on our current understanding of relevant facts and circumstances. As
such, our view of these matters is subject to inherent uncertainties and may change in the future.
On January 15, 2015, Syntel sued TriZetto and Cognizant in the USDC-SDNY. Syntel’s complaint alleged breach of
contract against TriZetto, and tortious interference and misappropriation of trade secrets against Cognizant and TriZetto,
stemming from Cognizant’s hiring of certain former Syntel employees. Cognizant and TriZetto countersued on March 23, 2015,
for breach of contract, misappropriation of trade secrets and tortious interference, based on Syntel’s misuse of TriZetto
confidential information and abandonment of contractual obligations. Cognizant and TriZetto subsequently added federal
DTSA and copyright infringement claims for Syntel’s misuse of TriZetto’s proprietary technology. The parties’ claims were
narrowed by the court and the case was tried before a jury, which on October 27, 2020 returned a verdict in favor of Cognizant
in the amount of $855 million, including $570 million in punitive damages. On April 20, 2021, the USDC-SDNY issued a post-
trial order that, among other things, affirmed the jury’s award of $285 million in actual damages, but reduced the award of
punitive damages from $570 million to $285 million, thereby reducing the overall damages award from $855 million to
Cognizant
F-32
December 31, 2025 Form 10-K
$570 million. The USDC-SDNY subsequently issued a final judgment consistent with the April 20th order. On May 26, 2021,
Syntel filed a notice of appeal to the Second Circuit, and on June 3, 2021 the USDC-SDNY stayed execution of judgment
pending appeal. On May 25, 2023, the Second Circuit issued an opinion affirming in part and vacating in part the judgment of
the USDC-SDNY and remanding the case for further proceedings consistent with its opinion. The Second Circuit affirmed the
judgment in all respects on liability but vacated the $570 million award that had been based on avoided development costs
under the DTSA, and it remanded the case to the USDC-SDNY for further evaluation of damages. On June 23, 2023, the
Second Circuit issued its mandate returning the case to the USDC-SDNY. On March 13, 2024, the USDC-SDNY issued a
ruling that vacated the alternate compensatory damages awards that were within the scope of the Second Circuit’s remand and
awarded TriZetto and Cognizant approximately $15 million in attorney’s fees. On October 23, 2024, the USDC-SDNY granted
TriZetto and Cognizant’s motion for a new trial on the amount of compensatory damages owed to TriZetto and Cognizant. On
June 24, 2025, the parties proceeded to trial, and on June 30, 2025, the jury returned a verdict in favor of TriZetto and
Cognizant, awarding $70 million in compensatory damages. Entry of judgment remains pending. Thereafter, we expect Syntel
to appeal and thus we will not record any gain in our financial statements until it becomes realizable.
On February 28, 2019, a ruling of the SCI interpreting the India Defined Contribution Obligation altered historical
understandings of the obligation, extending it to cover additional portions of the employee’s income. As a result, the ongoing
contributions of our affected employees and the Company were required to be increased. In the first quarter of 2019, we
accrued $117 million with respect to prior periods, assuming retroactive application of the SCI’s ruling, in "Selling, general and
administrative expenses" in our consolidated statement of operations. There is significant uncertainty as to how the liability
should be calculated as it is impacted by multiple variables, including the period of assessment, the application with respect to
certain current and former employees and whether interest and penalties may be assessed. Since the ruling, a variety of trade
associations and industry groups have advocated to the Indian government, highlighting the harm to the information technology
sector, other industries and job growth in India that would result from a retroactive application of the ruling. No proceedings
have been initiated by the Government in respect of a substantial portion of the claim in the seven years that have passed since
the judgment was delivered. It is possible the Indian government will review the matter and there is a substantial question as to
whether the Indian government will apply the SCI’s ruling on a retroactive basis. As such, the ultimate amount of our obligation
may be materially different from the amount accrued.
On October 31, 2016, November 15, 2016 and November 18, 2016, three putative shareholder derivative complaints were
filed in New Jersey Superior Court, Bergen County, naming us, all of our then current directors and certain of our current and
former officers at that time as defendants. These actions were consolidated in an order dated January 24, 2017. The complaints
asserted claims for breach of fiduciary duty, corporate waste, unjust enrichment, abuse of control, mismanagement, and/or
insider selling by defendants. On April 26, 2017, the New Jersey Superior Court deferred further proceedings by dismissing the
consolidated putative shareholder derivative litigation without prejudice but permitting the parties to file a motion to vacate the
dismissal in the future.
On February 22, 2017, April 7, 2017, May 10, 2017 and March 11, 2019, four additional putative shareholder derivative
complaints were filed in the USDC-NJ, naming us and certain of our current and former directors and officers at that time as
defendants. These actions were consolidated in an order dated May 14, 2019. On August 3, 2020, lead plaintiffs filed a
consolidated amended complaint. The consolidated amended complaint asserted claims similar to those in the previously-filed
putative shareholder derivative actions. On February 14, 2022, we and certain of our current and former directors and officers
moved to dismiss the consolidated amended complaint. On September 27, 2022, the USDC-NJ granted those motions and
dismissed the consolidated amended complaint in its entirety with prejudice. Plaintiffs filed a notice of appeal on October 27,
2022. On May 3, 2024, the Third Circuit affirmed the dismissal of the consolidated amended complaint.
On June 1, 2021, an eighth putative shareholder derivative complaint was filed in the USDC-NJ, naming us and certain of
our current and former directors and officers at that time as defendants. The complaint asserts claims similar to those in the
previously-filed putative shareholder derivative actions. On March 31, 2022, we and certain of our current and former directors
and officers moved to dismiss the complaint. On November 30, 2022, the USDC-NJ denied without prejudice those motions.
The USDC-NJ ordered the parties to conduct limited discovery related to the issue of whether our board of directors wrongfully
refused the plaintiff’s earlier litigation demand and, after the conclusion of such limited discovery, to file targeted motions for
summary judgment on the issue of wrongful refusal. On July 25, 2025, we reached an agreement in principle to settle this
lawsuit, which later was approved by our board of directors and the individual defendants. The amount of the settlement is
expected to be immaterial to the Company’s consolidated financial statements. On November 26, 2025, plaintiff filed an
unopposed motion for preliminary approval of the settlement, which is awaiting the court's approval.
See Note 10 for information relating to the ITD Dispute.
Cognizant
F-33
December 31, 2025 Form 10-K
On September 18, 2017, three former employees filed suit against Cognizant in the USDC-CDCA, alleging that they and
similarly situated employees suffered disparate treatment on the basis of race in violation of 42 U.S.C. § 1981. Plaintiffs
subsequently amended their complaint three times, adding a fourth former employee plaintiff and claims for both disparate
treatment and disparate impact on the basis of race and national origin under Title VII and disparate treatment and disparate
impact on the basis of race and national origin under Title VII. Plaintiffs filed the operative Third Amended Complaint-
Corrected on January 19, 2021. Cognizant filed its answer on January 29, 2021.
On May 13, 2022, plaintiffs filed a motion requesting that the USDC-CDCA certify the case as a class action for two
putative classes of plaintiffs consisting of: (1) all individuals who are not of South Asian race or Indian national origin who
applied to Cognizant in the U.S. and were not hired since September 2013 (the “hiring class”); and (2) all individuals who are
not of South Asian race or Indian national origin who have been terminated in the U.S. since September 2013 (the “terminations
class”). Cognizant opposed. On October 27, 2022, the court denied certification for the hiring class and the terminations class.
However, the court granted certification for a sub-set of the terminations class limited to approximately 2,300 former employees
whose employment had been terminated from the “bench,” a designation for employees who are not allocated to an active
project. On November 10, 2022, Cognizant filed a petition with the Ninth Circuit requesting permission to appeal the class
certification order as to the bench terminations class. The Ninth Circuit denied the petition on January 26, 2023.
From June 13, 2023 to June 26, 2023, the USDC-CDCA held a class action jury trial on the first phase of plaintiffs’
Section 1981 claim and Title VII disparate treatment claim. The questions presented were whether Cognizant engaged in a
pattern or practice of discrimination against non-South Asian and non-Indian employees with respect to bench terminations, and
if so, whether punitive damages are available for class members who prevail on their claims. The jury deadlocked, and the court
declared a mistrial.
The case proceeded to a retrial on September 24, 2024, and on October 4, 2024, the jury returned a verdict in favor of
plaintiffs. On December 5, 2025, the USDC-CDCA awarded plaintiffs $16 million in interim attorneys’ fees and costs; and
separately found in plaintiffs’ favor on their claim that Cognizant policies had a disparate impact on non-South Asian and non-
Indian employees in view of the same evidence presented at the retrial. In addition to trials on certain non-class claims, the case
will now proceed to the second phase to determine individualized liability and damages, if any, for each class member. As a
result of the verdict, each non-South Asian and non-Indian class member who pursues claims in the second phase will be
entitled to a rebuttable presumption that all termination decisions were discriminatory and to the possibility of recovering
punitive damages if they prevail. We believe that class certification was improper, and that the second phase of the case will
confirm that individualized issues should have precluded class certification. Cognizant will continue to vigorously defend itself
and pursue all available appellate arguments concerning class certification, the September 24, 2024 trial, and related orders at
the appropriate time. Because we cannot predict the number of individual plaintiffs who will proceed to the second phase, or the
outcome of those cases, and in view of the appellate arguments regarding class certification, we are unable to reasonably
estimate a possible loss or range of loss. We have not recorded any accruals related to the ultimate outcome of this matter.
Many of our engagements involve projects that are critical to the operations of our clients’ business and provide benefits
that are difficult to quantify. Any failure in a client’s systems or our failure to meet our contractual obligations to our clients,
including any breach involving a client’s confidential information or sensitive data, or our obligations under applicable laws or
regulations could result in a claim for substantial damages against us, regardless of our responsibility for such failure. Although
we attempt to contractually limit our liability for damages arising from negligent acts, errors, mistakes, or omissions in
rendering our services, there can be no assurance that the limitations of liability set forth in our contracts will be enforceable in
all instances or will otherwise protect us from liability for damages. Although we have general liability insurance coverage,
including coverage for errors or omissions, we retain a significant portion of risk through our insurance deductibles and there
can be no assurance that such coverage will cover all types of claims, continue to be available on reasonable terms or will be
available in sufficient amounts to cover one or more large claims, or that the insurer will not disclaim coverage as to any future
claim. The successful assertion of one or more large claims against us that exceed or are not covered by our insurance coverage
or changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance
requirements, could have a material adverse effect on our business, results of operations, financial position and cash flows for a
particular period.
In the normal course of business and in conjunction with certain client engagements, we have entered into contractual
arrangements through which we may be obligated to indemnify clients or other parties with whom we conduct business with
respect to certain matters. These arrangements can include provisions whereby we agree to hold the indemnified party and
certain of their affiliated entities harmless with respect to third-party claims related to such matters as our breach of certain
representations or covenants, our intellectual property infringement, our gross negligence or willful misconduct or certain other
claims made against certain parties. Payments by us under any of these arrangements are generally conditioned on the client
making a claim and providing us with full control over the defense and settlement of such claim. It is not possible to determine
Cognizant
F-34
December 31, 2025 Form 10-K
the maximum potential liability under these indemnification agreements due to the unique facts and circumstances involved in
each particular agreement. Historically, we have not made material payments under these indemnification agreements and
therefore they have not had a material impact on our operating results, financial position, or cash flows. However, if events
arise requiring us to make payment for indemnification claims under our indemnification obligations in contracts we have
entered, such payments could have a material adverse effect on our business, results of operations, financial position and cash
flows for a particular period.
Note 15 — Employee Benefits
Defined Contribution Plans
We contribute to defined contribution plans, including 401(k) savings and supplemental retirement plans in the United
States. Total expenses for our contributions to our U.S. plans were $124 million, $115 million and $117 million for the years
ended December 31, 2025, 2024 and 2023, respectively.
In addition, we maintain employee benefit plans that cover substantially all India-based employees. The employees’
provident fund, pension and family pension plans are statutorily defined contribution retirement benefit plans. Under the plans,
employees contribute up to 12.0% of their eligible compensation, which is matched by an equal contribution by the Company.
For these plans, we recognized a contribution expense of $152 million, $151 million and $149 million for the years ended
December 31, 2025, 2024 and 2023, respectively.
Outside of the United States and India, we incurred expenses of $125 million, $104 million and $107 million for the years
ended December 31, 2025, 2024 and 2023, respectively, related to our contributions to defined contribution plans.
Defined Benefit Pension Plans
We offer defined benefit pension plans that are statutorily required and primarily cover employees in certain countries.
Our primary plan is in Switzerland, which provides pension benefits based on a participant’s contributions, the Company’s
matching contributions and a minimum pension guarantee. As of December 31, 2025 and 2024, the net liability recognized on
the balance sheet for our pension plans was $55 million and $63 million, respectively. The net periodic pension costs
recognized in the income statement for the years ended December 31, 2025, 2024 and 2023 were $13 million, $21 million,
$16 million, respectively.
Other Defined Benefit Plans
We offer a gratuity plan in India that is a statutory defined benefit plan providing lump sum benefits to employees on
separation or retirement. We maintain an employees’ gratuity fund with a government-owned insurance corporation to fund a
portion of the estimated obligation. As of December 31, 2025 and 2024, the amount accrued under the gratuity plan was $205
million and $80 million, respectively, which is net of fund assets of $250 million and $231 million, respectively. During the
fourth quarter of 2025, the Labor Code reforms implemented by the Government of India caused our gratuity liability for prior
services to increase by $147 million, which we recognized as a component of other comprehensive income. We recognized
gratuity benefit expense of $10 million, $4 million and $56 million for the years ended December 31, 2025, 2024 and 2023,
respectively.
Note 16 — Stock-Based Compensation Plans
Our 2023 Incentive Plan provides for the issuance of a total of 25.0 million shares of Class A common stock to eligible
employees, less (i) the number of shares granted under the 2017 Incentive Plan between March 24, 2023 and June 6, 2023, plus
(ii) any shares subject to awards under the prior 2017 and 2009 Incentive Plans that are forfeited after June 6, 2023. The 2023
Incentive Plan does not affect any awards outstanding under the prior plans. The Purchase Plan provides for the issuance of up
to 50.0 million shares of Class A common stock to eligible employees. As of December 31, 2025, we have 20.2 million and 9.8
million shares available for grant under the 2023 Incentive Plan and the Purchase Plan, respectively.
Cognizant
F-35
December 31, 2025 Form 10-K
The allocation of total stock-based compensation expense between cost of revenues, selling, general and administrative
expenses and restructuring charges as well as the related income tax benefit were as follows for the three years ended
December 31:
(in millions)
2025
2024
2023
Cost of revenues
$
26
$
26
$
30
SG&A expenses
155
150
153
Restructuring charges
—
(1)
(7)
Total stock-based compensation expense
$
181
$
175
$
176
Income tax benefit
$
37
$
38
$
34
Restricted Stock Units and Performance Stock Units
We granted RSUs that vest in quarterly or annual installments over periods of up to four years to employees, including our
executive officers. A summary of the activity for RSUs granted under our stock-based compensation plans as of December 31,
2025 and changes during the year then ended is presented below:
Number of
Units
(in millions)
Weighted Average
Grant Date
Fair Value
(in dollars)
Unvested at January 1, 2025
2.8
$
73.47
Granted
2.4
81.98
Vested
(2.1)
74.93
Forfeited
(0.4)
78.48
Unvested at December 31, 2025
2.7
$
79.08
The total vesting date fair value of vested RSUs was $164 million, $172 million and $176 million for the years ended
December 31, 2025, 2024 and 2023, respectively. The weighted-average grant date fair value of RSUs granted in 2025, 2024
and 2023 was $81.98, $77.66 and $65.95, respectively. As of December 31, 2025, $149 million of total remaining unrecognized
stock-based compensation cost related to RSUs is expected to be recognized over the weighted-average remaining requisite
service period of 1.5 years.
We granted PSUs that vest over periods up to four years to employees, including our executive officers. The vesting of
PSUs is contingent on meeting certain financial performance targets, market conditions and continued service. A summary of
the activity for PSUs granted under our stock-based compensation plans as of December 31, 2025 and changes during the year
then ended is presented below. The presentation reflects the number of PSUs at the maximum performance milestones.
Number of
Units
(in millions)
Weighted Average
Grant Date
Fair Value
(in dollars)
Unvested at January 1, 2025
1.5
$
76.76
Granted
0.8
90.15
Vested
(0.1)
92.06
Forfeited
(0.2)
81.01
Adjustment at the conclusion of the performance measurement period
(0.4)
65.57
Unvested at December 31, 2025
1.6
$
84.71
The total vesting date fair value of vested PSUs was $5 million, $15 million and $22 million for the years ended
December 31, 2025, 2024 and 2023, respectively. The weighted-average grant date fair value of PSUs granted in 2025, 2024
and 2023 was $90.15, $83.63 and $67.82, respectively. As of December 31, 2025, $29 million of the total remaining
unrecognized stock-based compensation cost related to PSUs is expected to be recognized over the weighted-average remaining
requisite service period of 1.2 years.
All RSUs and PSUs have dividend equivalent rights, which entitle holders to the same dividend value per share as holders
of common stock. Dividend equivalent rights are subject to the same vesting and other terms and conditions as the
corresponding unvested RSUs and PSUs and are accumulated and paid when the underlying shares vest.
Cognizant
F-36
December 31, 2025 Form 10-K
Purchase Plan
For the years ended December 31, 2025, 2024 and 2023, the Purchase Plan provided for eligible employees to purchase
shares of Class A common stock at a price equal to 95% of the fair market value per share of our Class A common stock on the
last date of the purchase period. This plan has been deemed non-compensatory and, therefore, no compensation expense has
been recorded. During the years ended December 31, 2025, 2024 and 2023, we issued 0.8 million shares, 0.9 million shares and
1.1 million shares, respectively, of Class A common stock under the Purchase Plan.
Note 17 — Segment Information
Our chief executive officer is our chief operating decision maker. Our CODM regularly reviews the performance of our
business by four industry-based operating segments, which are our four reportable business segments: Health Sciences,
Financial Services, Products and Resources, and Communications, Media and Technology.
We have an industry-led go-to-market strategy, with client partners, account executives and client relationship managers
aligned to the specific industries they serve. Our CODM is regularly provided segment revenues and operating profit, including
budget-to-actual variances in segment revenue, to formulate industry-focused strategic priorities, allocate financial resources,
set targets and key performance indicators, and evaluate the results of such strategies. These strategic priorities, targets and key
performance indicators are translated and applied to each client account, rolling up to respective industry-based operating
segments. Our hiring and deployment plans are devised according to the strategic priorities and targets set for the client
accounts.
In the first quarter of 2025, we made certain changes to the internal measurement of segment operating profit for the
purpose of evaluating segment performance and resource allocation. The primary reason for the change was to reflect a more
complete cost of delivery. Specifically, segment operating profit now includes an allocation of certain corporate costs, which
were previously included in "unallocated costs." We have reported 2025 segment operating profits using the new allocation
methodology and have recast the 2024 results to conform to the new methodology. While we have recast the 2024 results to
conform to the new methodology, it is impracticable for us to recast our 2023 segment operating results as the detailed
information required for the allocation of such costs to the segments is not reasonably available.
Revenue from each client is attributed to the operating segment that is most closely aligned with the client's business we
serve. Segment operating profit represents income from operations excluding certain unallocated corporate costs. Our CODM is
not regularly provided with segment expenses. A portion of depreciation and amortization expense, certain corporate costs, the
impact of the settlements of the cash flow hedges, the gain on the sale of property and equipment and expenses related to our
NextGen program are not allocated to individual segments. Accordingly, such expenses are excluded from segment operating
profit and are included below as “unallocated costs” and adjusted against our total income from operations.
We do not disclose assets by segment as a significant portion of the assets is used interchangeably among the segments
and our CODM is not provided such information.
Information by reportable segment were as follows:
Year Ended December 31, 2025
(in millions)
HS
FS
P&R
CMT
Total
Revenues
$
6,347
$
6,173
$
5,285
$
3,303
$
21,108
Less: other segment items
5,114
5,144
4,498
2,867
17,623
Segment operating profit
1,233
1,029
787
436
3,485
Less: unallocated costs
96
Income from operations
$
3,389
Cognizant
F-37
December 31, 2025 Form 10-K
Year Ended December 31, 2024
(in millions)
HS
FS
P&R
CMT
Total
Revenues
$
5,932
$
5,753
$
4,782
$
3,269
$
19,736
Less: other segment items
4,859
4,838
4,011
2,876
16,584
Segment operating profit
1,073
915
771
393
3,152
Less: unallocated costs
260
Income from operations
$
2,892
As described above, in the first quarter of 2025 we made changes to the internal measurement of segment operating
profits. While we have recast the 2024 results to conform to the new methodology, it is impracticable for us to recast our 2023
segment operating results as the detailed information required for the allocation of such costs to the segments is not reasonably
available.
Year Ended December 31, 2023
(in millions)
HS
FS
P&R
CMT
Total
Revenues
$
5,674
$
5,809
$
4,628
$
3,242
$
19,353
Less: other segment items
4,322
4,653
3,644
2,617
15,236
Segment operating profit
1,352
1,156
984
625
4,117
Less: unallocated costs
1,428
Income from operations
$
2,689
Other segment items for each reportable segment primarily include employee compensation and benefits, subcontractor
costs, costs of third-party products and services related to revenue and project-related travel.
Geographic Area Information
Long-lived assets by geographic area are as follows:
(in millions)
2025
2024
Long-lived Assets:(1)
North America(2)
$
300
$
338
Europe
67
72
Rest of World(3)
566
584
Total
$
933
$
994
(1)
Long-lived assets include property and equipment, net of accumulated depreciation and amortization.
(2)
Substantially all relates to the United States.
(3)
Substantially all relates to India.
Note 18 — Subsequent Events
Dividend
On February 3, 2026, our Board of Directors approved the Company's quarterly declaration of a $0.33 per share dividend
with a record date of February 18, 2026 and a payment date of February 26, 2026.
Acquisition
On January 1, 2026, through the execution of a purchase agreement, we acquired 100% ownership in 3Cloud, one of the
largest independent Microsoft Azure services providers and a global leader in Azure-dedicated AI enablement solutions and
products. This acquisition expands our Azure portfolio and deepens our expertise in complex, engineering-intensive
engagements that enable AI-led business transformation. On December 31, 2025, we placed cash consideration of $733 million
in escrow, which was deemed to be restricted cash and included in "Other noncurrent assets" in our consolidated statement of
financial position. We are yet to complete the initial accounting for the acquisition and, therefore, unable to disclose the major
classes of assets acquired and liabilities assumed, and any separately recognized transactions.
Cognizant
F-38
December 31, 2025 Form 10-K
Cognizant Technology Solutions Corporation
Valuation and Qualifying Accounts
For the Years Ended December 31, 2025, 2024 and 2023
(in millions)
(in millions)
Balance at
Beginning of
Period
Charged to
Costs and
Expenses
Charged to
Other
Accounts
Deductions
/Other
Balance at
End of
Period
Warranty accrual:
2025
$
38
$
43
$
—
$
38
$
43
2024
$
40
$
38
$
—
$
40
$
38
2023
$
41
$
40
$
—
$
41
$
40
Valuation allowance—deferred income tax
2025
$
48
$
390
$
—
$
11
$
427
2024
$
53
$
1
$
—
$
6
$
48
2023
$
41
$
14
$
—
$
2
$
53
Cognizant
F-39
December 31, 2025 Form 10-K
EXHIBIT 31.1
CERTIFICATION
I, Ravi Kumar S, certify that:
1.
I have reviewed this Annual Report on Form 10-K of Cognizant Technology Solutions Corporation;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Dated:
February 12, 2026
/s/ RAVI KUMAR S
Ravi Kumar S
Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 31.2
CERTIFICATION
I, Jatin Dalal, certify that:
1.
I have reviewed this Annual Report on Form 10-K of Cognizant Technology Solutions Corporation;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period
in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant’s internal control over financial reporting.
Dated:
February 12, 2026
/s/ JATIN DALAL
Jatin Dalal
Chief Financial Officer
(Principal Financial Officer)
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*
In connection with the Annual Report on Form 10-K of Cognizant Technology Solutions Corporation (the
“Company”) for the period ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof
(the “Report”), the undersigned, Ravi Kumar S, Chief Executive Officer of the Company, hereby certifies, pursuant to 18
U.S.C. Section 1350, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results
of operations of the Company.
Dated:
February 12, 2026
/s/ RAVI KUMAR S
Ravi Kumar S
Chief Executive Officer
(Principal Executive Officer)
_____________________
*
A signed original of this written statement required by Section 906 has been provided to Cognizant Technology Solutions
Corporation and will be retained by Cognizant Technology Solutions Corporation and furnished to the Securities and
Exchange Commission or its staff upon request.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*
In connection with the Annual Report on Form 10-K of Cognizant Technology Solutions Corporation (the
“Company”) for the period ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof
(the “Report”), the undersigned, Jatin Dalal, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C.
Section 1350, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results
of operations of the Company.
Dated:
February 12, 2026
/s/ JATIN DALAL
Jatin Dalal
Chief Financial Officer
(Principal Financial Officer)
_____________________
*
A signed original of this written statement required by Section 906 has been provided to Cognizant Technology Solutions
Corporation and will be retained by Cognizant Technology Solutions Corporation and furnished to the Securities and
Exchange Commission or its staff upon request.
Directors
Stephen (Steve) J. Rohleder (FC) (GC)
Chair of Cognizant Board
Former Group Chief Executive,
North America and COO
Accenture
Zein Abdalla (CC) (GC*)
Former President
PepsiCo
Vinita Bali (CC) (GC)
Former CEO and Managing Director
Britannia Industries
Former VP
The Coca-Cola Company
Eric Branderiz (AC) (CC)
Former EVP and CFO
Enphase Energy
Archana (Archie) Deskus (AC) (FC)
Former EVP and CTO
PayPal
John M. Dineen (AC) (FC*)
Former President and CEO
GE Healthcare
Ravi Kumar S
CEO
Cognizant
Leo S. Mackay Jr. (AC) (CC*)
SVP
Ethics and Enterprise Assurance
Lockheed Martin
Michael Patsalos-Fox (FC) (GC)
Former Chairman, the Americas
McKinsey & Company
Former CEO
Stroz Friedberg
Abraham (Bram) Schot (FC) (GC)
Former Chairman and CEO
Audi AG
Karima Silvent (CC)
Group Deputy General Secretary
and CHRO and Member of the
Management Committee
AXA
Joseph (Joe) M. Velli (AC) (CC)
Former Senior EVP and member of the
Policy Committee
The Bank of New York
Sandra S. Wijnberg (AC*) (FC)
Former CFO
Marsh & McLennan Companies
Former CAO
Aquiline Holdings
Corporate information
Board committees
AC
Audit Committee
FC
Finance and Strategy Committee
CC
Compensation and Human Capital Committee
GC
Governance and Sustainability Committee
*
Denotes committee chairperson
The Annual Report includes statements which may constitute forward-looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to
risks, uncertainties and assumptions as to future events that may not prove to be accurate. These statements include, but
are not limited to, express or implied forward-looking statements relating to our vision, strategy and initiatives; strategic
partnerships and collaborations; competitive position and opportunities in the marketplace; investment in and growth of
our business; our research and development efforts; the pace and magnitude of change and client needs related to AI;
the effectiveness of our recruiting and talent retention efforts and related costs; and the success of our Synapse skilling
initiative and other training efforts. These statements are neither promises nor guarantees but are subject to a variety of
risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from
those contemplated in these forward-looking statements, which speak only as of the date hereof. Factors that could cause
actual results to differ materially from those expressed or implied include general economic and industry conditions,
changes in the regulatory environment, including with respect to immigration and taxes, and the other factors discussed in
our most recent Annual Report on Form 10-K and other filings with the SEC. Cognizant undertakes no obligation to update
or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as may
be required under applicable securities law.
Executive Committee
Ravi Kumar S
Chief Executive Officer
Jatin Dalal
Chief Financial Officer
Balu Ganesh Ayyar
President
Asia Pacific and Japan and
Industry Solutions Group
Thea Hayden
Chief Marketing Officer
Kathryn (Kathy) Diaz
Chief People Officer
Annadurai (Anna) Elango
President
Core Technologies and Insights
Surya Gummadi
President
Americas
John Kim
Chief Legal Officer, Chief Administrative
Officer and Corporate Secretary
Manoj Mehta
President
Europe, Middle East and Africa
Rajesh Varrier
President, Operations and CMD of
Cognizant India
Prasad Sankaran
President
AI Products and Platforms
Executive offices
300 Frank W Burr Blvd.
Suite 36, 6th Floor
Teaneck, NJ 07666 USA
Phone: 201.801.0233
www.cognizant.com
Form 10-K
A copy of the Company’s Annual Report on
Form 10-K is available without charge upon
request by contacting Investor Relations.
Common stock information
The Company’s Class A Common Stock
(CTSH) is listed on the Nasdaq Global
Select market.
Annual meeting date
The Company’s annual meeting of
stockholders will be held on Tuesday,
June 2, 2026, via live webcast. Please visit
virtualshareholdermeeting.com/CTSH2026
Online check-in begins: 9:15 a.m.
Meeting begins: 9:30 a.m.
(All times US Eastern Time)
Independent registered public
accounting firm
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017
Transfer agent
Equiniti Trust Company, LLC (formerly
American Stock Transfer & Trust Co.)
55 Challenger Road, Floor 2
Ridgefield Park, NJ 07660
Investor relations
For more information, contact:
Tyler Scott, Global Head of Investor Relations
Tyler.Scott@cognizant.com