Cognizant Lowers Q2 Revenue Forecast to $5.45B–$5.52B, Unveils $200M–$300M AI Savings Plan
Cognizant forecast Q2 revenue of $5.45B–$5.52B, below the $5.56B consensus, and trimmed its annual guidance to $22.11B–$22.64B. It launched Project Leap targeting $200M–$300M in 2026 savings offset by $230M–$320M restructuring charges, and shares dropped about 5% premarket.
1. Q2 Revenue Forecast Miss
Cognizant projected second-quarter revenue of $5.45 billion to $5.52 billion, falling short of the $5.56 billion consensus forecast and reflecting restrained IT spending. Premarket trading saw shares drop about 5% as discretionary client budgets and macroeconomic uncertainty weighed on deal sizes.
2. Annual Guidance Revision
The company trimmed its full-year revenue outlook by $30 million at the low end and $20 million at the high end, now targeting $22.11 billion to $22.64 billion versus the prior $22.14 billion to $22.66 billion range. This marginal adjustment underscores the cautious stance on discretionary and cost-optimized IT spending.
3. Project Leap Cost Initiative
Cognizant unveiled Project Leap, an AI-focused efficiency program expected to deliver $200 million to $300 million in operational savings in 2026. The rollout includes $230 million to $320 million in restructuring charges, mainly tied to workforce reductions and streamlined operations.
4. Q1 Segment Performance
First-quarter revenue rose 5.8% to $5.41 billion, in line with expectations, with financial services leading performance. The health sciences unit generated $1.58 billion, missing the $1.66 billion estimate and highlighting uneven demand across verticals.