Q1 2026 Cognizant Technology Solutions Corp Earnings Call Transcript
Key Points
- Cognizant Technology Solutions Corp (CTSH) reported a solid first quarter with revenue growth of 3.9% year over year in constant currency, driven by strong performance in North America.
- The company experienced a 21% year-over-year increase in Q1 bookings, signing seven large deals with a total contract value (TCV) of $100 million or greater, including one mega deal valued at over $500 million.
- Adjusted operating margin expanded year over year for the fifth consecutive quarter, demonstrating profitable growth.
- Cognizant Technology Solutions Corp (CTSH) announced a definitive agreement to acquire Atria, a global IT managed services provider, which is expected to enhance their AI infrastructure capabilities.
- The company is making strategic investments in AI, data, cybersecurity, and cloud technologies, including launching the Cognizant innovation network to back early-stage AI start-ups.
- Market conditions have become more complex, with heightened macroeconomic uncertainty expected to persist in the near term.
- Gross margin decreased by 80 basis points year over year, impacted by increased compensation costs and integrated offering strategy.
- The health sciences segment experienced a negative impact of approximately 300 basis points year over year due to lower revenue from third-party products.
- The communications, media, and technology sector faced a more measured environment with added pressure from client-specific dynamics tied to strategic shifts at a large customer.
- First quarter free cash flow was approximately $200 million, impacted by a larger bonus payout and typical Q1 seasonality.
Greetings, and welcome to the Cognizant Q1 2026 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. (Operator Instructions)
it's now my pleasure to turn the call over to Tyler Scott, Senior Vice President, Investor Relations. Tyler, please go ahead.
Thank you, operator, and good morning, everyone. Welcome to Cognizant's first quarter 2026 earnings call. I'm joined today by Ravi Kumar, Chief Executive Officer; and Jatin Dalal, Chief Financial Officer. By now, you should have received a copy of the earnings release and investor supplement. If you have not, copies are available on our website, cognizant.com.
Before I begin, I would like to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements. These statements are subject to the risks and uncertainties as described in the company's earnings release and other filings with the SEC
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