Cognizant Reports Second Quarter 2025 Results

Core Insights - Cognizant reported strong second quarter 2025 financial results, with revenue exceeding guidance and demonstrating effective strategy execution in the AI era [2][9] - The company achieved organic year-over-year revenue growth for the fourth consecutive quarter, alongside margin expansion and significant bookings, including two deals worth over $1 billion each [2][5] Financial Performance - Q2 2025 revenue reached $5,245 million, an increase of 8.1% year-over-year, with constant currency growth of 7.2% [3][9] - GAAP operating margin improved to 15.6%, up 100 basis points from the previous year, while adjusted operating margin also increased to 15.6% [3][9] - GAAP diluted EPS was $1.31, reflecting a 15% increase year-over-year, and adjusted diluted EPS was also $1.31, up 12% [3][9] Growth Drivers - Recent acquisitions contributed approximately 400 basis points to year-over-year revenue growth in both Q2 2025 and year-to-date [3][40] - Bookings for the trailing twelve months rose 6% year-over-year to $27.8 billion, with a book-to-bill ratio of approximately 1.4x [5][9] Shareholder Returns - The company repurchased 4.5 million shares for $354 million in Q2 2025, with a total of 6.8 million shares repurchased year-to-date for $544 million [7][9] - Cognizant plans to return approximately $2.0 billion to shareholders in 2025, an increase from the previous estimate of $1.7 billion [4][9] Future Guidance - For Q3 2025, revenue is expected to be between $5.27 billion and $5.35 billion, representing growth of 4.6% to 6.1% [8][9] - Full-year 2025 revenue guidance is narrowed to $20.7 billion to $21.1 billion, with expected growth of 4.7% to 6.7% [13][9] Operational Metrics - Voluntary attrition in tech services was 15.2% in Q2 2025, a slight decrease from 15.8% in Q1 2025 [6] - Total headcount as of June 30, 2025, was 343,800, an increase of 7,500 from both Q1 2025 and Q2 2024 [6] Strategic Initiatives - Cognizant is focusing on building a portfolio of capabilities to advance an AI-led future through client agreements and platform enhancements [11][12] - The company launched Cognizant Agent Foundry, designed to help enterprises deploy autonomous AI agents at scale [14][15]