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Cognizant Lowers 2026 Revenue Growth Forecast Amid Economic Challenges
Sentiment: NeutralHigh Priority
What Happened?
Cognizant has revised its 2026 revenue growth forecast downwards for the second time this year, now expecting growth of 4-4.4% due to a challenging macroeconomic environment. The company's net profit for Q3 rose to $627 million.
Key points
- Cognizant's revenue growth forecast is now 4-4.4%, down from 4-5.5% in July.
- The company reported a net profit of $627 million for Q3, up from $274 million a year earlier.
- Revenue for Q3 increased by 4.6% to $5.7 billion.
- CEO Ravi Kumar noted rising oil prices, inflation, and interest rates as factors affecting growth.
- Bookings in Q3 declined by 7% compared to last year, despite a year-over-year increase of 4% in bookings.
- Financial services drove growth in Q3, with an 11.4% increase.
Key insights
- The reduction in revenue guidance may lead to cautious spending among clients in the IT sector.
- Cognizant's reliance on large deals indicates a potential slowdown in new business opportunities.
- The company's performance contrasts with some competitors, highlighting varying impacts of economic conditions.
Why it matters
Cognizant's revised guidance reflects broader economic challenges that could affect the IT services sector.
Tags
Entities
Cognizant· CompanyRavi Kumar· PersonNasdaq· Organization
Source
Business Standard
