Cognizant Q1 Results: IT major posts better-than-expected earnings, raises annual revenue forecast on strong AI demand

Cognizant Technology Solutions raised its annual revenue forecast and beat first-quarter results on Wednesday, driven by increased demand for AI-powered IT services.

As clients transition to cloud-based systems and automate their operations, many are turning to AI-infused services offered by companies like Cognizant. This shift has helped the firm mitigate the effects of a volatile market.

With Generative AI gaining traction, clients are increasingly integrating AI into software development cycles, streamlining operations and enhancing customer support.

Cognizant expects annual revenue in the range of $20.5 billion to $21.0 billion, compared to previous outlook of the midpoint of $20.30 billion and $20.80 billion. Analysts had, on average, expected $20.68 billion for 2025.

"We believe our differentiated AI and platform capabilities are helping clients navigate the near-term uncertainty while embarking on longer-term AI-led transformation" said CEO Ravi Kumar S.

In March, the company's board approved a $2 billion increase to its ongoing share repurchase plan, raising the total remaining authorization to $3.1 billion.

Cognizant Q1 Results

The New Jersey-based company's first-quarter revenue was $5.12 billion, slightly above analysts' average estimate of $5.11 billion.

Its adjusted profit per share in the reported quarter was $1.23, compared with the estimate of $1.20 per share.

Cognizant expects second-quarter revenue between $5.14 billion and $5.21 billion, the mid-point of which is above estimate of $5.12 billion, according to data compiled by LSEG.