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What changed in Cognizant's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Cognizant's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+287 added−276 removedSource: 10-K (2026-02-12) vs 10-K (2025-02-12)

Top changes in Cognizant's 2025 10-K

287 paragraphs added · 276 removed · 220 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

47 edited+21 added−19 removed38 unchanged
Biggest changeCognizant 10 December 31, 2024 Form 10-K Table of Contents – We provide a learning marketplace and tailored learning journeys to employees based on market trends, current skills and employee interests. • Career and talent development : We seek to enable our people to build unique and varied careers with Cognizant, and to empower them to shape their paths. – We encourage regular role movement and career growth and progression through an internal job move program, a talent marketplace and promotions. – As part of our talent review and performance processes, managers and employees have regular career developmental conversations. – We build our leadership pipeline and capability at all levels through leadership development initiatives, assessments based on our leadership competencies, multi-stakeholder feedback, coaching, accelerated programs, partnerships with leading universities and more.
Biggest changeWe empower our people to build unique and varied careers across the Cognizant ecosystem. – We enable regular role movement and career growth and progression through an internal job move program and talent marketplace. – We regularly promote talent across the business, including both role-based and performance-based promotions, promoting approximately 110,000 employees since 2023. – We have structured talent review and performance processes to support career growth and development. – We build our leadership pipeline and capability across levels through leadership development initiatives, assessments based on our leadership competencies, multi-stakeholder feedback, coaching, accelerated programs, partnerships with leading universities and more.
He held the role on an interim basis from late June 2022 to January 2023. Prior to being appointed President of the Americas, Mr.
He held the President of the Americas role on an interim basis from late June 2022 to January 2023. Prior to being appointed President of the Americas, Mr.
Accordingly, we rely on the following to compete effectively: • investments to scale our AI capabilities; • our recruiting, training and retention model; • an entrepreneurial culture and approach to our work; • a broad client referral base; • investment in process improvement and knowledge capture; • our global delivery model; • financial stability and good corporate governance; • continued focus on responsiveness to client needs, quality of services and competitive prices; and • project management capabilities and technical expertise.
Accordingly, we rely on the following to compete effectively: • investments to scale our AI capabilities; • our recruiting, training and retention model; • an entrepreneurial culture and approach to our work; • a broad client referral base; • investment in process improvement and knowledge capture; • our global delivery model; • financial stability and good corporate governance; • our partnerships; • continued focus on responsiveness to client needs, quality of services and competitive prices; and • project management capabilities and technical expertise.
The principal competitive factors affecting the markets for our services include the provider’s reputation and experience, strategic advisory capabilities, digital services capabilities, performance and reliability, responsiveness to customer needs, financial stability, corporate governance and competitive pricing of services.
The principal competitive factors affecting the markets for our services include the provider’s reputation and experience, strategic advisory capabilities, digital and AI capabilities, performance and reliability, responsiveness to customer needs, financial stability, corporate governance and competitive pricing of services.
Areas of focus within this practice are: • AI and analytics, which helps clients identify and adopt the best AI use cases for their enterprise and formulate actionable insights from unstructured data to drive a greater understanding of their customers and operations; • Cloud, infrastructure and security, which helps simplify, modernize and safeguard IT environments, creating a solid foundation for AI innovation; and • IoT, which enables the convergence of the physical and the digital in smart products.
Areas of focus within this practice are: • AI and analytics, which helps clients identify and adopt the best AI use cases for their enterprise and formulate actionable insights from unstructured data to drive a greater understanding of their customers and operations; • Cloud and infrastructure, which helps simplify and modernize IT environments, creating a solid foundation for AI innovation; and • IoT, which enables the convergence of the physical and the digital in smart products.
Our clients can better share information, simplify IT processes, automate workflow and improve flexibility. This practice focuses on application services, which help enterprises engage their partner ecosystems more productively, and run their operations and financial organizations more efficiently while enabling improved employee and customer experiences.
Our clients can better share information, simplify IT processes, automate workflows and improve flexibility. This practice focuses on application services, which help enterprises engage their partner ecosystems more productively, and run their operations and financial organizations more efficiently while enabling improved employee and customer experiences.
We believe our deep understanding of our clients' established systems and their digital ambitions provides us with a unique advantage as we work with them to architect solutions that are both transformative and practical. Our services and solutions are organized into six integrated practices, which help us deliver these capabilities in ways that align with each client’s specific transformation journey.
We believe our deep understanding of our clients' established systems and their ambitions provides us with a unique advantage as we work with them to architect solutions that are both transformative and practical. Our services and solutions are organized into seven integrated practices, which help us deliver these capabilities in ways that align with each client’s specific transformation journey.
Kumar served in positions of increasing authority at PricewaterhouseCoopers, Cambridge Technology Partners, Oracle Corporation, Sapient and Infosys. He is a member of the Board of Directors of Transunion, where he is a member of the Compensation Committee and the Mergers, Acquisitions and Integration Committee. He is also on the Board of Directors for the U.S. Chamber of Commerce. Mr.
Kumar served in positions of increasing authority at PricewaterhouseCoopers, Cambridge Technology Partners, Oracle Corporation, Sapient and Infosys. He is a member of the Board of Directors of Transunion, where he is a member of the Compensation Committee and the Technology Committee. He is also on the Board of Directors for the U.S. Chamber of Commerce. Mr.
Item 1. Business Overview Cognizant is one of the world’s leading professional services companies, engineering modern businesses and delivering strategic outcomes for our clients. We help clients modernize technology, reimagine processes and transform experiences so they can stay ahead in today's fast-changing world, where AI is beginning to reshape organizations in every field.
Item 1. Business Overview Cognizant is one of the world’s leading professional services companies, engineering modern businesses and delivering strategic outcomes for our clients. We help clients modernize technology, reimagine processes and transform experiences so they can stay ahead in today's fast-changing world, where AI is reshaping organizations in every field.
Demand in this segment is driven by our clients’ focus on improving the efficiency and sustainability of their operations; the enablement and integration of mobile platforms to support sales and customer experience enhancement initiatives; the generational shift from mechanical to software-defined, experience-driven vehicles; grid modernization to support a consumer-driven energy landscape that enables cleaner, more efficient energy use; and their adoption and integration of digital technologies, such as intelligent systems to manage supply chains and enhance overall customer experiences, and IoT to generate data and insights for factories, fleets, products and real estate companies.
Demand in this segment is driven by our clients’ focus on improving the efficiency and sustainability of their operations; the enablement and integration of business platforms to support sales and customer experience enhancement initiatives; the generational shift from mechanical to software-defined, experience-driven customer interactions; grid modernization to support a consumer-driven energy landscape that enables cleaner, more efficient energy use; and their adoption and integration of AI and other technologies, such as intelligent systems to manage supply chains and enhance overall customer experiences, and IoT to generate data and insights for factories, fleets, products and real estate companies.
For the year ended December 31, 2024, the distribution of our revenues across our four reportable business segments was as follows: The services we provide are distributed among a number of clients in each of our reportable business segments. The volume of work performed for specific clients may vary significantly from year to year.
For the year ended December 31, 2025, revenues across our four reportable business segments were as follows: The services we provide are distributed among a number of clients in each of our reportable business segments. The volume of work performed for specific clients may vary significantly from year to year.
Governmental Regulation As a result of the size, breadth and geographic diversity of our business, our operations are subject to a variety of laws and regulations in the jurisdictions in which we operate, including with respect to import and export controls, temporary work authorizations or work permits and other immigration laws, content requirements, trade restrictions, tariffs, taxation, anti-corruption, the environment, government affairs, internal and disclosure control obligations, data privacy, intellectual property, employee and labor relations.
Governmental Regulation As a result of the size, breadth and geographic diversity of our business, our operations are subject to a variety of laws and regulations in the jurisdictions in which we operate, including with respect to import and export controls, temporary work authorizations or work permits and other immigration laws, content requirements, trade restrictions, tariffs, taxation, anti-corruption, the environment, government affairs, internal and disclosure control obligations, data privacy, intellectual property, employee and labor relations, and compliance with these laws may impact our capital expenditures, earnings and competitive position.
Cognizant 9 December 31, 2024 Form 10-K Table of Contents Cognizant® and other trademarks appearing in this report are registered trademarks or trademarks of Cognizant and its affiliates in the United States and other countries. This Annual Report on Form 10-K also contains trademarks, trade names and service marks of other companies, which are the property of their respective owners.
Cognizant® and other trademarks appearing in this report are registered trademarks or trademarks of Cognizant and its affiliates in the United States and other countries. This Annual Report on Form 10-K also contains trademarks, trade names and service marks of other companies, which are the property of their respective owners.
Our technology-driven business process outsourcing services help clients transform and run functions and industry-specific processes such as finance and accounting, omni-channel customer care, loan origination, annotation services, location-based services and medical data management.
Our technology-driven business process outsourcing services incorporate key AI use cases to help clients transform and run functions and industry-specific processes such as finance and accounting, omni-channel customer care, loan origination, annotation services, location-based services and medical data management.
Additionally, Cognizant’s mental health ally network has hundreds of trained and certified employees who provide peer-to-peer support. – Cognizant’s recognition program includes an internal social platform that celebrates service milestones and enables leader-initiated and peer-to-peer awards for both non-monetary and monetary appreciation.
Additionally, Cognizant’s mental health ally network has hundreds of trained and certified employees who provide peer-to-peer support. – Cognizant’s recognition platform celebrates service milestones and enables leader-initiated and peer-to-peer awards for both non-monetary and monetary appreciation.
Central to our strategy to align with our clients’ need for continuous transformation is our sustained investment in new technologies, including new forms of AI, cloud, data modernization, automation, digital engineering and IoT.
Central to our strategy to align with our clients’ need for continuous transformation is our sustained investment in new technologies, including GenAI and agentic systems, cloud, data modernization, automation, digital engineering and IoT.
Information About Our Executive Officers The following table identifies our current executive officers: Name Age Capacities in Which Served Ravi Kumar S 53 Chief Executive Officer Jatin Dalal 50 Chief Financial Officer Balu Ganesh Ayyar 63 EVP and President, Intuitive Operations and Automation and Industry Solutions Kathryn Diaz 55 EVP, Chief People Officer Surya Gummadi 48 EVP and President, Americas John Kim 57 EVP, Chief Legal Officer, Chief Administrative Officer and Corporate Secretary Robert Telesmanic 58 SVP, Controller and Chief Accounting Officer Rajesh Varrier 55 EVP, Global Head of Operations, and Chairman and Managing Director, Cognizant India Cognizant 11 December 31, 2024 Form 10-K Table of Contents Ravi Kumar Singisetti (also referred to as Ravi Kumar S or Ravi Kumar) has been our Chief Executive Officer since January 2023.
Information About Our Executive Officers The following table identifies our current executive officers: Name Age Capacities in Which Served Ravi Kumar S 54 Chief Executive Officer Jatin Dalal 51 Chief Financial Officer Balu Ganesh Ayyar 64 President - Intuitive Operations and Automation and Industry Solutions Kathryn Diaz 56 Chief People Officer Surya Gummadi 49 President - Americas Alina Kerdman 45 SVP, Controller and Chief Accounting Officer John Kim 58 Chief Legal Officer, Chief Administrative Officer and Corporate Secretary Rajesh Varrier 56 President - Operations and Managing Director, Cognizant India Cognizant 11 December 31, 2025 Form 10-K Table of Contents Ravi Kumar Singisetti (also referred to as Ravi Kumar S or Ravi Kumar) has been our Chief Executive Officer since January 2023.
Services and Solutions Our services include AI and other technology services and solutions, consulting, application development, systems integration, quality engineering and assurance, application maintenance, infrastructure and security as well as business process services and automation. Additionally, we develop, license, implement and support proprietary and third-party software products and platforms.
Cognizant 6 December 31, 2025 Form 10-K Table of Contents Services and Solutions Our services include AI and other technology services and solutions, consulting, application development, systems integration, quality engineering and assurance, application maintenance, infrastructure and security as well as business process services and automation. Additionally, we develop, license, implement and support proprietary and third-party software products and platforms.
Beginning in 2025, we go to market across four industry-based operating segments, which will match our four reportable business segments - (i) Health Sciences (ii) Financial Services (iii) Products and Resources and (iv) Communications, Media and Technology.
Reportable Business Segments In 2025, we went to market across four industry-based operating segments, which are our four reportable business segments: (i) Health Sciences (HS) (ii) Financial Services (FS) (iii) Products and Resources (P&R) and (iv) Communications, Media and Technology (CMT).
These capabilities enable clients to put AI at the core of their operations, improve the experiences they offer to their customers, tap into new revenue streams, automate operations, defend against digital- and AI-native competitors and reduce costs. In most cases, our clients operate in hybrid technology environments, running critical new digital initiatives alongside essential legacy systems.
These capabilities help clients enable AI-led productivity and efficiency, industrialize AI and agentify the enterprise to improve the experiences they offer to their customers, tap into new revenue streams and defend against digital- and AI-native competitors. In most cases, our clients operate in hybrid technology environments, running critical new digital initiatives alongside essential legacy systems.
Diaz spent over 20 years in a series of HR leadership positions at Merck & Co, Inc. She holds a bachelor’s degree in accounting from Rider University and an MBA from Lehigh University. Surya Gummadi has been our Executive Vice President and President, Americas since January 2023.
Diaz spent over 20 years in a series of HR leadership positions at Merck & Co, Inc. She holds a bachelor’s degree in accounting from Rider University and an MBA from Lehigh University. Surya Gummadi has held the title of President - Americas since March 2025. Previously, his title was EVP and President, Americas from January 2023 to March 2025.
These teams work with specialized partners to develop industry-specific products and services that enable clients to improve productivity, increase operational excellence and accelerate innovation.
The practice integrates industry technologists and thought leaders specialized in vertical micro-segments. These teams work with specialized partners to develop industry-specific products and services that enable clients to improve productivity, increase operational excellence and accelerate innovation.
Kathryn (Kathy) Diaz has been our Executive Vice President, Chief People Officer since September 2023. She held the role on an interim basis from May 2023 to September 2023. Prior to being appointed Chief People Officer, Ms. Diaz served as SVP, Head of Global Total Rewards at Cognizant from July 2020 until September 2023.
From September 2023 to March 2025, her title was EVP, Chief People Officer. She held the Chief People Officer role on an interim basis from May 2023 to September 2023. Prior to being appointed Chief People Officer, Ms. Diaz served as SVP, Head of Global Total Rewards at Cognizant from July 2020 until September 2023.
Prior to that, he served in a variety of roles during his more than 20-year tenure with Cognizant. He holds a degree in mechanical engineering from Indian Institute of Technology, Bombay. John Kim has been our Executive Vice President, Chief Legal Officer, Chief Administrative Officer and Corporate Secretary since February 2024.
Prior to that, he served in a variety of roles during his more than 20-year tenure with Cognizant. He holds a degree in mechanical engineering from the Indian Institute of Technology, Bombay. Alina Kerdman has been our Senior Vice President, Controller and Chief Accounting Officer since July 2025.
We provide industry expertise and close client collaboration, combining critical perspective with a flexible engagement style. We tailor our services and solutions to specific industries with an integrated global delivery model that employs client service and delivery teams based at client locations and dedicated global and regional delivery centers.
We tailor our services and solutions to specific industries with an integrated global delivery model that employs client service and delivery teams based at client locations and dedicated global and regional delivery centers.
Competition The markets for our services are highly competitive, characterized by a large number of participants and subject to rapid change.
Cognizant 8 December 31, 2025 Form 10-K Table of Contents Competition The markets for our services are highly competitive, characterized by a large number of participants and subject to rapid change.
Additionally, we pursue select strategic acquisitions to expand our talent, experience and capabilities in key technologies or in particular geographies or industries.
Additionally, we pursue select strategic acquisitions to expand our talent, experience and capabilities in key technologies or in particular geographies or industries. See Note 3 and Note 18 to our consolidated financial statements for additional information.
Our training programs for leaders aim to enhance skills that support an inclusive environment. • Total rewards: Cognizant’s total rewards are designed to reward employees through compensation, benefits, and recognition programs and support their physical, mental and financial wellbeing both inside and outside of work. – Our comprehensive portfolio includes compensation programs, healthcare benefits, risk protection coverage, overall wellbeing and family care, tax savings programs, income protection, retirement and financial planning resources, time off programs, recognition and more. – We promote awareness and ensure access to mental health support through on-demand mental health training, wellbeing events, and free counseling sessions via our Employee Assistance Program, among other initiatives.
Cognizant 10 December 31, 2025 Form 10-K Table of Contents • Total rewards: We reward employees through compensation, benefits, and recognition programs to help support their physical, mental and financial wellbeing. – Our comprehensive portfolio includes compensation programs, healthcare benefits, risk protection coverage, overall wellbeing and family care, tax savings programs, income protection, retirement and financial planning resources, time off programs, recognition and more. – We promote awareness and provide access to mental health support through mental health training for all employees, wellbeing events, and free counseling sessions via our Employee Assistance Program, among other initiatives.
Software and Platform Engineering Our Software and Platform Engineering practice helps clients develop modern enterprises through digital software engineering products, services and solutions that support optimization and modernization of their IT estates and deliver new value for their customers.
Software and Platform Engineering Our Software and Platform Engineering practice helps clients develop modern enterprises through digital software engineering products, services and solutions that support optimization and modernization of their IT estates and deliver new value for their customers. This practice manages service-delivery platforms that enable enterprise transformation at scale and accelerate the wide use of GenAI in the enterprise.
We work closely with partners including Adobe, Amazon Web Services, Cisco, Google, Microsoft, Oracle, Pegasystems, Salesforce, SAP, ServiceNow, Workday and many others. Industry Solutions Our Industry Solutions practice was established in 2023 as part of Cognizant’s strategy to build differentiation at the industry level. The practice integrates industry technologists and thought leaders specialized in vertical micro-segments.
We work closely with partners including Amazon Web Services, Cisco, Google, Microsoft, Oracle, Pegasystems, Salesforce, SAP, ServiceNow, Workday and many others. Cognizant 7 December 31, 2025 Form 10-K Table of Contents Industry Solutions Our Industry Solutions practice was established as part of Cognizant’s strategy to build differentiation at the industry level.
Our CMT segment includes global communications, media and entertainment, education, information services and technology companies. Demand in this segment is driven by our clients’ need for services related to digital content, business Cognizant 6 December 31, 2024 Form 10-K Table of Contents process automation, AI adoption, operational efficiency, unified user experiences and the generation of new revenue streams.
Our CMT segment includes global communications, media and entertainment, education, publishing, information and professional services and technology companies. Demand in this segment is driven by our clients’ need for services related to AI adoption, modernization of business and technology operations, development of agentic ecosystems for the generation of new revenue streams, enhancing user experiences and driving operational efficiency.
Dalal is also an alumnus of the Advanced Management Program of The Wharton School of the University of Pennsylvania. Balu Ganesh Ayyar has been our Executive Vice President and President, Intuitive Operations and Automation since July 2022 and assumed additional responsibilities for Industry Solutions in April 2023.
Dalal is also an alumnus of the Advanced Management Program of The Wharton School of the University of Pennsylvania. Balu Ganesh Ayyar has held the title of President - Intuitive Operations, and Automation and Industry Solutions since March 2025.
Previously, he was Executive Vice President, General Counsel, Chief Corporate Affairs Officer and Secretary, holding this position from March 2021 to February 2024, Before March 2021, he served as our Senior Vice President and Deputy General Counsel, Global Commercial Contracts. Prior to joining Cognizant in 2019, Mr.
Before March 2021, he served as Senior Vice President, Interim General Counsel from January 2021 to March 2021, after joining Cognizant in November 2019 as our Senior Vice President and Deputy General Counsel, Global Commercial Contracts. Prior to joining Cognizant in 2019, Mr.
This practice manages delivery platforms that enable enterprise transformation at scale and accelerate the wide use of generative AI in the enterprise. Our clients can leverage data, technologies and our digital engineering, design and product development capabilities to build world-class experiences, and a responsive, agile and intuitive framework for continuous innovation.
Our clients can leverage data, technologies and our digital engineering, design and product development capabilities to build world-class experiences, and a responsive, agile and intuitive framework for continuous innovation.
Previously, he was Executive Vice President and President, Digital Operations from August 2019 to June 2022. Prior to joining Cognizant, Mr. Ayyar was the CEO of Mphasis, a global IT services company listed in India, from 2009 to 2017. Prior to Mphasis, Mr. Ayyar spent nearly two decades with Hewlett-Packard, holding a variety of leadership roles across multiple geographies.
Ayyar was the CEO of Mphasis, a global IT services company listed in India, from 2009 to 2017. Prior to Mphasis, Mr. Ayyar spent nearly two decades with Hewlett-Packard, holding a variety of leadership roles across multiple geographies. Kathryn (Kathy) Diaz has held the title of Chief People Officer since March 2025.
In the AI era, our clients have an accelerated need to modernize their businesses, which has intensified demand for next-gen capabilities in AI, automation, digital commerce and secure distributed work.
In the AI era, our clients have an accelerated need to modernize their technology estates, reimagine operations and shift to an AI-driven operating model. This has intensified demand for next-gen capabilities in AI, automation, digital commerce, secure distributed work and the design and integration of full-stack AI solutions tailored to each enterprise's specific needs.
We had approximately 336,800 employees at the end of 2024, with 241,500 in India, 42,800 in North America, 15,700 in Continental Europe, 8,200 in the United Kingdom and 28,600 in various other locations throughout the rest of the world. As of December 31, 2024, women represented approximately 38% of our workforce.
As of December 31, 2025, we had approximately 351,600 employees, with 256,900 in India, 41,600 in North America, 14,600 in Continental Europe, 7,800 in the United Kingdom and 30,700 in various other locations throughout the rest of the world.
Cognizant 8 December 31, 2024 Form 10-K Table of Contents Digital Experience Services (Cognizant Moment) Established in 2024, Cognizant Moment is our digital experience practice, designed to help clients leverage the power of AI to reimagine customer experiences and engineer innovative strategies aimed at driving growth.
Digital Experience Services (Cognizant Moment) Cognizant Moment is our digital experience practice, designed to help clients leverage the power of AI to reimagine customer experiences and engineer innovative strategies aimed at driving growth. Cognizant Moment delivers intelligent ecosystem orchestration, connecting experiences as well as their underlying data, technology and operations across the entire enterprise.
These changes reflect how the operating segments will be managed and reported to the CODM but will not affect the reportable segments' financial results. Our clients seek to partner with service providers that have a deep understanding of their businesses, industry initiatives, customers, markets and cultures and the ability to create solutions tailored to meet their individual business needs.
Our clients seek to partner with service providers that have a deep understanding of their businesses, industry initiatives, customers, markets and cultures and the ability to create solutions tailored to meet their individual business needs. Across industries, our clients are confronted with the risk of being disrupted by nimble, AI-native competitors.
In response to this demand, our focus areas include network monetization, media supply chain transformation, product engineering, AI integration, verticalization, data modernization and customer experience design.
In response to this demand, our focus areas include AI and analytics, data modernization, customer experience design, supporting clients as they launch new products and services, transforming client interactions with customers, telecom network monetization, media supply chain transformation and applications, as well as infrastructure modernization.
Cognizant 7 December 31, 2024 Form 10-K Table of Contents Core Technologies and Insights Our Core Technologies and Insights practice helps clients build agile and relevant organizations that apply the power of AI, cloud, data and IoT to help them perform better and innovate faster.
These offerings combine domain expertise, digital engineering capabilities, and global delivery to help clients improve productivity, enhance governance and accelerate modernization at scale. Core Technologies and Insights Our Core Technologies and Insights practice helps clients build agile and relevant organizations that apply the power of AI, cloud, data and IoT to help them perform better and innovate faster.
Across industries, our clients are confronted with the risk of being disrupted by nimble, digital-native competitors. Our clients increasingly feel the need to transform and are therefore redirecting their focus and investment to new operating models and embracing DevOps, AI and other key technologies that enable quick adjustments to shifts in their markets.
Our clients increasingly feel the need to transform and are therefore redirecting their focus and investment to new operating models and embracing AI, Cognizant 5 December 31, 2025 Form 10-K Table of Contents cloud-native architectures and modern development practices that enable quick adjustments to shifts in their markets.
These practices are Core Technologies and Insights, Enterprise Platform Services, Industry Solutions, Intuitive Operations and Automation, Software and Platform Engineer ing, and Cognizant Moment, our new digital experience practice.
These practices are Core Technologies and Insights, Enterprise Platform Services, Industry Solutions, Intuitive Operations and Automation, Software and Platform Engineering, Cognizant Moment and our newest practice, Security. Our consulting professionals have deep industry-specific expertise and work closely across our practices to design and deliver integrated AI and digital solutions tailored to specific client requirements.
For the years ended December 31, 2024 and 2023, our Voluntary Attrition - Tech Services was 15.9% and 13.8%, respectively. – We’re recognized as a top employer by leading organizations based on the experiences and real feedback of our people.
Risk Factors . – For the years ended December 31, 2025 and 2024, our Voluntary Attrition - Tech Services was 13.9% and 15.9%, respectively.
Our purpose, vision and values are central to Cognizant's strategic approach. We have evolved our values to prioritize those that support our vision and enhance our ability to innovate and co-create with our clients.
Our services include consulting, application development, systems integration, quality engineering and assurance, engineering research and development, application maintenance, infrastructure and security as well as business process services and automation. Our purpose, vision and values are central to Cognizant's strategic approach. Our values support our vision and enhance our ability to innovate and co-create with our clients.
Cognizant Moment delivers intelligent ecosystem orchestration, connecting experiences as well as their underlying data, technology and operations across the entire enterprise. This approach enables clients to leverage generative AI's content generation capabilities alongside human ingenuity to innovate and differentiate by informing and automating processes, and creating dynamic, hyper-personalized experiences for their customers.
This approach enables clients to leverage GenAI's content generation capabilities alongside human ingenuity to innovate and differentiate by informing and automating processes, and creating dynamic, hyper-personalized experiences for their customers. Security Established in 2026, our Security practice helps clients protect their digital environments and maintain regulatory compliance through comprehensive cybersecurity solutions.
We utilize subcontractors to provide additional capacity and flexibility in meeting client demand, though the number of subcontractors has historically been immaterial relative to our employee headcount. We are not party to any significant collective bargaining agreements.
Historically, subcontractor usage has been immaterial relative to our overall headcount. – We are not party to any significant collective bargaining agreements. – Globally, we manage visa-dependent roles with careful consideration of business needs and associated risks. For additional information, see Part I, Item 1A.
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Our collaborative services include digital services and solutions, consulting, application development, systems integration, quality engineering and assurance, engineering research and development, application maintenance, infrastructure and security as well as business process services and automation. Digital, AI-enhanced services continue to be an important part of our portfolio, aligning with our clients' focus on becoming data-enabled, customer-centric and differentiated businesses.
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As an AI builder, we provide deep expertise at the intersection of industry and technology, combining our perspective with extensive knowledge of our clients' organizations to build industry-specific platforms and incorporate context into systems, AI models and custom solutions.
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In 2024, we acquired Belcan, a leading global supplier of engineering research & development services for the commercial aerospace, defense, space, marine and industrial verticals, and Thirdera, an Elite ServiceNow Partner specializing in advisory, implementation and optimization solutions related to the ServiceNow platform. See Note 3 to our consolidated financial statements for additional information.
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Demand in this segment is driven by our clients’ need to modernize legacy technology environments, strengthen operational resilience and adopt cloud, data and AI capabilities to meet evolving customer expectations and regulatory requirements. Our clients are expanding enterprise AI adoption to enhance customer experience, improve risk and fraud management, accelerate underwriting and lending and modernize payments.
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Cognizant 5 December 31, 2024 Form 10-K Table of Contents Reportable Business Segments In 2024, we went to market across seven industry-based operating segments, which are aggregated into four reportable business segments: • Health Sciences (HS) - This reportable business segment is comprised of a single operating segment of the same name. • Financial Services (FS) ◦ Banking ◦ Insurance • Products and Resources (P&R) ◦ Retail and Consumer Goods ◦ Manufacturing, Logistics, Energy and Utilities ◦ Travel and Hospitality • Communications, Media and Technology (CMT) - This reportable business segment is comprised of a single operating segment of the same name.
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These initiatives require core platform modernization, greater use of advanced analytics and responsible AI frameworks to ensure transparency, security and compliance. Our P&R segment includes manufacturers, automakers, retailers, consumer goods companies, aerospace and defense companies, and travel and hospitality companies, as well as businesses providing logistics, energy and utility services.
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Demand in this segment is driven by our clients’ need to modernize legacy infrastructure and adopt digital technologies to serve their customers while complying with significant regulatory requirements and adapting to market changes. These technologies enable enhanced customer experience, through automation, analytics and AI-driven value creation in areas such as digital lending, hyper-personalized banking, fraud detection, underwriting and next-generation payments.
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Leveraging a wide range of technologies across our clients’ enterprises, together with our proprietary platforms and accelerators and those of our ecosystem partners, we help clients implement and operate AI solutions with integration, governance, security and monitoring controls.
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Clients are also increasingly leveraging technology services partners as end-to-end orchestrators uniting hyperscalers, independent software vendors, fintech players, data providers, and enterprise and business process management platforms to deliver integrated solutions at scale and speed. Our P&R segment includes manufacturers, automakers, retailers, consumer goods companies, and travel and hospitality companies, as well as businesses providing logistics, energy and utility services.
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These offerings, many including unique IP developed in our AI Lab, improve efficiency, enable new customer experiences, and support business outcomes that align to our clients' industries. Our GCC offerings also help clients establish, scale and optimize GCCs to build resilient, cost-effective and innovation-focused operating models.
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Our consulting professionals have deep industry-specific expertise and work closely across our practices to create intuitive operating models that leverage a wide range of technologies across our clients’ enterprises to deliver higher levels of efficiency, new value for their customers and business outcomes that align to their industries.
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We provide governance, risk and compliance services to manage cyber risks and ensure adherence to regulatory standards, threat and vulnerability management to enable proactive detection and mitigation of sophisticated threats, data protection and privacy services including classification, encryption and leakage prevention, identity and access management solutions delivering identity-centric, zero-trust security and cloud and infrastructure security services protecting network, workload and cloud environments.
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Our People and Culture Cognizant is a people-centric company, with a distinct culture that is highly collaborative, innovative and supportive. We aim to be the employer of choice in our industry and for our people to feel motivated, engaged, included and empowered to do their best work through meaningful careers.
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Cognizant 9 December 31, 2025 Form 10-K Table of Contents Our People and Culture Cognizant's success is powered by our talented global workforce and distinct culture.
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Globally, we balance the portion of our employees that rely on visas with consideration of the needs of our business to fulfill client demand and the risks to our business, including the costs associated with and ability to staff employees on visas to work in-country. For additional information, see Part I, Item 1A.
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As of December 31, 2025, our workforce is comprised of approximately 39% women and 61% men. • Culture and engagement: Guided by our core values - Work as One, Raise the Bar, Dare to Innovate, Do the Right Thing, and Own It - we strive to foster a culture that is highly innovative, collaborative, inclusive and ethical. – Employees are encouraged to embrace a strong spirit of empowerment and entrepreneurship: our grassroots Bluebolt program enables any employee to submit ideas for implementation with clients or internally. – In 2025, Cognizant achieved a GUINNESS WORLD RECORD™ for the largest online GenAI hackathon by hosting a global Vibe Coding Week.
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Risk Factors . • Culture and experience: Our vibrant culture is a key differentiator.
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Associates were given access to leading vibe coding tools to sharpen their AI skills, producing more than 30,000 prototypes. – Leader training on anti-discrimination, a strong ethics & compliance ecosystem and global affinity employee groups help support our efforts to provide equal opportunity for all. – Our people are passionate about volunteerism, with over 240,000 hours volunteered for causes such as community skilling and education. – Our annual engagement survey scores are above industry benchmarks, and we strive to continuously address feedback at the enterprise and people manager levels. – We’re recognized as a top employer by leading organizations based on the experiences and real feedback of our people.
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We work intentionally to create a global community that is high energy, collaborative, inclusive and innovative. – Our people are guided by our core values, which we refreshed in 2024 based on input from employees and others: work as one, raise the bar, dare to innovate, do the right thing and own it. – Employees are encouraged to embrace a spirit of innovation and entrepreneurship: our grassroots Bluebolt program enables any employee to submit ideas for implementation with clients or internally. – Our global affinity groups available to all employees, learning courses on leadership, and leader guides to create thriving teams help to ensure our people feel respected and comfortable bringing their unique talents to shape stronger outcomes for clients. – Our employees are passionate about volunteerism: in 2024, over 47,000 employees gave their time and talents to causes such as community skilling and education. • Employee engagement and retention : We prioritize listening to our people and enhancing the employee experience to ensure our employees feel heard, valued and supported in their roles. – We conduct an annual engagement survey to collect employee feedback.
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In 2025, this included: Forbes World's Best Employers, Time’s World’s Best Companies, Newsweek’s America's Greatest Workplaces, Fortune’s America’s Most Innovative Companies and Ethisphere’s World’s Most Ethical Companies, among others. • Skill relevance and growth : Amidst the rapidly changing AI-driven landscape, Cognizant aims to fuel strong performance and future readiness at all levels through our award-winning learning engine. – Our proprietary talent intelligence model is designed to identify skills needed and ready our workforce ahead of technology transformation. – AI skill building is a core focus – from July 2023 to end of 2025, we have upskilled more than 330,000 associates on GenAI via more than 1,000 learning programs. – In addition to our deep institutional learning expertise, we provide cutting edge training through alliances and partnerships with leading organizations, such as Google, Microsoft, Anthropic and NVIDIA. – We encourage learning through experimentation by providing access to leading AI tools, including Microsoft Copilot, GitHub CoPilot, Google Gemini Code Assist and Windsurf. – We evolve roles and career pathways for the future.
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After each survey, we report and act upon results, and people managers build action plans for improvement. – We regularly assess retention.
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We are redesigning career paths to transition roles highly impacted by AI to higher value roles by building adjacent skills. – We build future workforce capability both internally and in our communities.
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In 2024, this included: Great Place to Work® Certification™ in 20 countries representing approximately 85% of our population, America's Greatest Workplaces from Newsweek, The American Opportunity Index 2024 Employer of Choice, Forbes World's Best Employers, Work Wellbeing 100, Time’s World's Best Companies 2024, LinkedIn Top Companies in India, among others. • Continuous upskilling: Learning is at the core of our business.
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In 2025, we doubled our Synapse program commitment having achieved our original goal early, and are now targeting upskilling 2 million future workers by 2030. • Career and talent development : We believe broad, interdisciplinary experience strengthens talent in an AI-driven world.
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From pre-employment to experienced practitioners, our award-winning learning ecosystem enables all levels of our workforce to stay on the leading edge of technology and acquire new skills that power their career growth. – In 2024, more than 277,000 employees acquired at least one skill through our learning ecosystem. – In addition to digital skills, we prioritize generative AI skill building – more than 168,000 associates, including 1,700 leaders, have taken generative AI trainings in 2024, including through Cognizant’s Synapse program.
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Recognition is also enabled through manager toolkits, funds for team celebrations, a global annual awards event and more. • Talent sourcing: We avail ourselves of broad talent pools to identify the best talent to shape the future. – Cognizant believes early-in-career talent have a competitive edge in this dynamic moment as AI natives and lifelong learners.
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We also support creating a culture of recognition through manager guides, engagement toolkits, funds for team celebrations and more.
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Our talent programs across regions focus on robust upskilling, AI exposure and real-world experience. – We have strengthened our North America talent strategy with expanded recruiting, training, a revitalized internship program, and increased office presence across multiple locations, while in India we are scaling operations into tier two cities to access emerging talent pools. – To meet dynamic client demand, we utilize subcontractors for additional capacity and agility.
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Robert Telesmanic has been our Senior Vice President, Controller and Chief Accounting Officer since January 2017, a Senior Vice President since 2010 and our Corporate Controller since 2004. Prior to that, he served as our Assistant Corporate Controller from 2003 to 2004. Prior to joining Cognizant, Mr. Telesmanic spent over 14 years with Deloitte & Touche LLP. Mr.
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His previous title was EVP and President, Intuitive Operations and Automation and Industry Solutions, which he had from April 2023 to March 2025. From July 2022 to April 2023, he served as EVP and President, Intuitive Operations and Automation. Previously, he was EVP and President, Digital Operations from August 2019 to June 2022. Prior to joining Cognizant, Mr.
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Telesmanic has a Bachelor of Science degree from New York University and an MBA from Columbia University. Cognizant 12 December 31, 2024 Form 10-K Table of Contents Rajesh Varrier has been our Executive Vice President, Global Head of Operations since September 2024 and assumed the role of Chairman and Managing Director, Cognizant India beginning October 2024.
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She previously served as SVP, Assistant Global Controller, from December 2023 to June 2025. From June 2019 to December 2023, she served as VP, Global Revenue Controller and Head of External Reporting. Prior to that she held several finance roles of increasing responsibility at the Company.
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Prior to joining Cognizant in September 2024, Mr.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeVolatile, negative or uncertain economic conditions have in the past and could in the future cause our clients to reduce, postpone or cancel spending on projects with us, making it more difficult for us to accurately forecast client demand and have available the right resources to profitably address such client demand, including as a result of inflation, higher interest rates, tightening of credit markets, trade disputes, recession or slowing growth, among others.
Biggest changeVolatile, negative or uncertain economic and geopolitical conditions, including as a result of recession or slowing economic growth, inflation, higher interest rates, tightening of credit markets and changes in trade policy (including trade disputes, the threat or imposition of tariffs or other trade restrictions and related retaliatory actions), have in the past and could in the future cause our clients to reduce, postpone or cancel spending on new or existing projects with us, negatively affecting our business and making it more difficult for us to accurately forecast client demand and have available the right resources to profitably address such client demand.
In such case, the trading price of our common stock could decline, and you may lose all or part of your original investment. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below.
In such case, the trading price of our common stock could decline, and you may lose all or part of your original investment. Our actual results could differ materially from those anticipated in our forward-looking statements as a result of specific factors, including the risks and uncertainties described below.
Adverse outcomes in any such audits, investigations or proceedings could increase our tax exposure and cause us to incur increased expense, which could materially adversely affect our results of operations and financial condition. Our business subjects us to considerable potential exposure to litigation and legal claims and could be materially adversely affected if we incur legal liability.
Adverse outcomes in any such audits, investigations or proceedings could increase our tax exposure and cause us to incur increased expense, which could materially adversely affect our results of operations and financial condition. Our business subjects us to considerable potential exposure to litigation and legal claims and we could be materially adversely affected if we incur legal liability.
In order to provide our services and solutions, we depend on global information technology networks and systems, to process, transmit, host and securely store electronic information (including our confidential information and the confidential information of our clients) and to communicate among our locations around the world and with our clients, suppliers and alliance partners (including numerous cloud service providers).
In order to provide our services and solutions, we depend on global information technology networks and systems, to process, transmit, host and securely store electronic information (including our confidential information and the confidential information of our clients) and to communicate among our locations around the world and with our clients, suppliers, vendors and alliance partners (including numerous cloud service providers).
Furthermore, the legal landscape surrounding IP protection of software technologies, including AI, is rapidly evolving and as a result there is uncertainty concerning the scope of IP protection for our software IP rights. We are and may in the future have to engage in legal action to protect our own IP rights.
Furthermore, the legal landscape surrounding IP protection of software technologies, including AI, is rapidly evolving and as a result there is uncertainty concerning the scope of IP protection for our software IP rights. We are engaging in and may in the future have to engage in legal action to protect our own IP rights.
On a periodic basis, the CSO and CIO provide updates to the Audit Committee on, among other things, key cybersecurity metrics, status of projects to strengthen the Company's information security systems and assessments of the Company's security program. The Audit Committee reports to the Board of Directors, which also receives periodic updates on such matters.
On a quarterly basis, the CSO and CIO provide updates to the Audit Committee on, among other things, key cybersecurity metrics, status of projects to strengthen the Company's information security systems and assessments of the Company's security program. The Audit Committee reports to the Board of Directors, which also receives periodic updates on such matters.
Risks Related to our Business and Operations Our results of operations could be adversely affected by economic and geopolitical conditions globally and in particular in the markets in which our clients and operations are concentrated. Global macroeconomic conditions have a significant effect on our business as well as the businesses of our clients.
Risks Related to our Business and Operations Our results of operations could be adversely affected by macroeconomic and geopolitical conditions globally and in particular in the markets in which our clients and operations are concentrated. Global macroeconomic conditions have a significant effect on our business as well as the businesses of our clients.
Management is responsible for identifying, considering and assessing material cybersecurity risks on an ongoing basis, establishing processes to ensure that such potential cybersecurity risk exposures are monitored, putting in place appropriate mitigation measures and maintaining cybersecurity programs.
Management is responsible for identifying, considering and assessing material cybersecurity risks on an ongoing basis, establishing processes designed to ensure that such potential cybersecurity risk exposures are monitored, putting in place appropriate mitigation measures and maintaining cybersecurity programs.
Business-Competition .” We compete on the basis of reputation and experience, strategic advisory capabilities, digital services capabilities, performance and reliability, responsiveness to customer needs, financial stability, corporate governance and competitive pricing of services.
Business-Competition .” We compete on the basis of reputation and experience, strategic advisory capabilities, digital and AI capabilities, performance and reliability, responsiveness to customer needs, financial stability, corporate governance and competitive pricing of services.
We may face challenges in effectively integrating acquired businesses into our ongoing operations, including the implementation of controls, processes and policies appropriate for a multinational public company at acquired companies that may have previously lacked such functions in areas such as cybersecurity, IT and privacy, among others, and in assimilating and retaining employees of those businesses into our culture and organizational structure, and these risks may be magnified by the size and number of transactions we execute.
We may face challenges in effectively integrating acquired businesses into our ongoing operations, including the implementation of controls, processes and policies appropriate for a multinational public company at acquired companies that may have previously lacked such functions in areas such as cybersecurity, IT and privacy, among others, and in assimilating and retaining key executives and employees of those businesses into our culture and organizational structure, and these risks may be magnified by the size and number of transactions we execute.
We may not be successful in identifying suitable opportunities, completing targeted transactions or achieving the desired results in the timeframe we expect or at all, such opportunities may divert our management's time and focus away from our core business and realizing the desired results of a particular transaction may depend upon competition, market trends, regulatory developments, additional costs or investments and the actions of suppliers or other third parties.
We may not be successful in identifying suitable opportunities, completing targeted transactions or achieving the desired results or strategic objectives in the timeframe we expect or at all, such opportunities may divert our management's time and focus away from our core business and realizing the desired results of a particular transaction may depend upon competition, market trends, regulatory developments, additional costs or investments and the actions of suppliers or other third parties.
Climate change, extreme weather and risks arising from the transition to a lower-carbon economy may impact our business. There are inherent climate- and weather-related risks everywhere that we conduct our business.
Extreme weather and risks arising from the transition to a lower-carbon economy may impact our business. There are inherent climate- and weather-related risks everywhere that we conduct our business.
If we are unable to hire or deploy employees with the needed skillsets or if we are unable to adequately equip our employees with the skills needed, this could materially adversely affect our business.
If we are unable to hire, retain or deploy employees with the needed skillsets or if we are unable to adequately equip our employees with the skills needed, this could materially adversely affect our business.
Our success is dependent, in large part, on our ability to keep our supply of skilled employees, including project managers, IT engineers and senior technical personnel, in particular those with experience in key AI and digital areas, in balance with client demand around the world and on our ability to attract and retain senior management with the knowledge and skills to lead our business globally.
Our success is dependent, in large part, on our ability to keep our supply of skilled employees, including project managers, IT engineers and senior technical personnel, in particular those with experience in key AI and digital areas, in balance with client demand and on our ability to attract and retain senior management with the knowledge and skills to lead our business globally.
We have also been the subject of a number of putative securities class action complaints and putative shareholder derivative complaints relating to the matters that were the subject of our now concluded internal investigation into potential violations of the FCPA and other applicable laws, and may be subject to such legal actions for these or other matters in the future.
We have also been the subject of a number of putative securities class action complaints and putative shareholder derivative complaints relating to the matters that were the subject of our now concluded internal investigation into potential violations of the FCPA and other applicable laws, and may be subject to such legal actions for other matters in the future.
The CSO manages multiple teams within Corporate Security that are operationally responsible for the security of the Company, including Global Cyber Operations, Business Information Security, Global Business Resilience and Integrated Risk Management, each of which provides regular updates to the CSO regarding cyber threat intelligence, cyber incidents and cyber risk metrics as part of their security responsibilities.
The CSO manages multiple teams within Corporate Security that are operationally responsible for the security of the Company, including Global Cyber Operations, Business Information Security, Global Business Resilience, Integrated Risk Management and Security Architecture (including AI Security), each of which provides regular updates to the CSO regarding cyber threat intelligence, cyber incidents and cyber risk metrics as part of their security responsibilities.
For example, we are currently involved in an ongoing dispute with the ITD in which the ITD asserts that we owe additional taxes for two transactions by which CTS India repurchased shares from its shareholders, as more fully described in Note 11 to the consolidated financial statements.
For example, we are currently involved in an ongoing dispute with the ITD in which the ITD asserts that we owe additional taxes for two transactions by which CTS India repurchased shares from its shareholders, as more fully described in Note 10 to the consolidated financial statements.
In the EU, many countries continue to implement new regulations to move into compliance with the EU Directive of 2014 to harmonize immigration rules for intracompany transferees in most EU member states and to facilitate the transfer of managers, specialists and graduate trainees both into and within the region.
In the EU, many countries continue to implement new regulations to ensure compliance with the EU Directive of 2014 to harmonize immigration rules for intracompany transferees in most EU member states and to facilitate the transfer of managers, specialists and graduate trainees both into and within the region.
Our business is subject to the risk of litigation involving current and former employees, clients, alliance partners, subcontractors, suppliers, competitors, shareholders, government agencies or others through private actions, class actions, whistleblower claims, administrative proceedings, regulatory actions or other litigation.
Our business is subject to the risk of litigation involving current and former employees, clients, our clients' customers, alliance partners, subcontractors, suppliers, competitors, shareholders, government agencies or others through private actions, class actions, whistleblower claims, administrative proceedings, regulatory actions or other litigation.
Our Board of Directors has overall oversight responsibility for our risk management, and delegates cybersecurity risk management oversight to the Audit Committee, which is responsible for ensuring that management has processes in place designed to identify and evaluate cybersecurity risks and implement processes and programs to manage cybersecurity risks and mitigate cybersecurity incidents.
Our Board of Directors has overall oversight responsibility for our risk management, and delegates cybersecurity risk management oversight to the Audit Committee, which is responsible for reviewing that management has processes in place designed to identify and evaluate cybersecurity risks and implement processes and programs to manage cybersecurity risks and mitigate cybersecurity incidents.
Our clients, regulators, or other third parties have and may in the future attempt to hold us liable for any such losses or damages resulting from such an attack, including through contractual indemnification clauses.
Our clients, regulators, or other third parties have and may in the future attempt to hold us liable for any such losses or damages resulting from such an incident, including through contractual indemnification clauses.
If our risk management, business continuity and disaster recovery plans are not effective and our global delivery capabilities are impacted, our business and results of operations may be materially adversely affected and we may suffer harm to our reputation.
If our risk management, business resilience and disaster recovery plans are not effective and our global delivery capabilities are impacted, our business and results of operations may be materially adversely affected and we may suffer harm to our reputation.
Our principal operating subsidiary in the United States utilizes a high number of skilled workers holding H-1B and L-1 visas and, as a result, may be subject to increased costs upon the effectiveness of any such laws, regulations, policy changes or executive orders.
Our principal operating subsidiary in the United States utilizes a high number of skilled workers holding H-1B and L-1 visas and, as a result, may be subject to increased costs and visa processing delays upon the effectiveness of any such laws, regulations, policy changes or executive orders.
Competition for skilled labor is intense and, in some jurisdictions in which we operate and in key AI and digital areas, there are more open positions than qualified persons to fill these positions.
Competition for skilled labor is intense and, in some jurisdictions in which we operate and in key AI and digital areas, there are more open positions than qualified individuals to fill these positions.
Our ability to meet our ESG ambitions is also subject to external factors outside of our control including the ability and willingness of our suppliers to reduce emissions and the advancement of new emission reducing technologies.
Our ability to meet our sustainability ambitions is also subject to external factors outside of our control including the ability and willingness of our suppliers to reduce emissions and the advancement of new emission reducing technologies.
Macroeconomic or geopolitical conditions, including inflationary pressures, trade disputes or other challenges could result in financial difficulties for our clients, which have in the past and could in the future cause clients to delay payments to us, request modifications to their payment arrangements or default on their payment obligations to us.
Macroeconomic or geopolitical conditions, including recessionary or inflationary pressures, trade disputes or other challenges could result in financial difficulties for our clients that have in the past and could in the future cause clients to delay payments to us, request modifications to their payment arrangements or default on their payment obligations to us.
Our business model is dependent on our global delivery capabilities, which include coordination between our delivery centers in India, our other global and regional delivery centers, the offices of our clients and our associates worldwide.
Our business model is dependent on our global delivery capabilities, which include coordination among our delivery centers in India, our other global and regional delivery centers, the offices of our clients and our associates worldwide.
There can be no assurance that we will be able to maintain such relationships or that such components will be available on the expected timelines or for anticipated prices.
There can be no assurance that we will be able to maintain such relationships or that such technology will be available on the expected timelines or for the anticipated prices.
There can be no assurance that the procedures and controls that we implement, or that our clients, suppliers, subcontractors and other third parties with whom we do business implement, will be sufficient to protect our information systems from the cybersecurity threats we face.
There can be no assurance that the procedures and controls that we implement, or that our clients, suppliers, subcontractors and other third parties with whom we do business implement, will be sufficient to protect from cybersecurity threats.
In addition, immigration reform, including as a result of changes to immigration policies, and the increased uncertainty surrounding such policies in light of the incoming U.S. administration's expected immigration agenda, may have a material adverse impact on companies like ours that have a substantial percentage of our employees on visas.
In addition, immigration reform, including as a result of changes to immigration policies, and the increased uncertainty surrounding such policies in light of the U.S. administration's immigration agenda and related litigation, may have a material adverse impact on companies like ours that have a substantial percentage of our employees on visas.
“Risk Factors” . Governance As part of our overall enterprise risk management program, we prioritize the identification and management of cybersecurity risk at several levels.
Governance As part of our overall enterprise risk management program, we prioritize the identification and management of cybersecurity risk at several levels.
Our profitability also depends on the efficiency with which we run our operations (including our ability to leverage new technologies to improve productivity) and the cost of our operations, especially the compensation and benefits costs of our employees.
Our profitability also depends on the efficiency with which we run our operations (including our ability to leverage new technologies such as AI to improve productivity) and the cost of our operations, especially the compensation and benefits costs of our employees.
For example, in 2024 some of our clients continued to reduce their discretionary spending in response to economic uncertainty, which negatively impacted our revenues. Clients may reduce demand for services quickly and with little warning, which may cause us to incur extra costs where we have employed more personnel than client demand supports.
For example, in the recent past some of our clients continued to reduce their discretionary spending in response to economic and geopolitical uncertainty, which negatively impacted our revenues. Clients may reduce demand for services quickly and with little warning, which may cause us to incur extra costs where we have employed more personnel than client demand supports.
A security compromise of our information systems, or of those of businesses with which we interact, that results in confidential information being accessed by unauthorized or improper persons, could harm our reputation and expose us to regulatory actions up to and including criminal prosecution, client attrition due to reputational concerns or otherwise, containment and remediation expenses and claims brought by our clients or others for breaching contractual confidentiality and security provisions or data protection laws.
A security compromise of our information systems, of our clients' information systems or of those of other businesses with which we interact (including cloud service providers and software vendors) that results in confidential information being accessed by unauthorized or improper persons, could harm our reputation and expose us to regulatory actions up to and including criminal prosecution, client attrition due to reputational concerns or otherwise, containment and remediation expenses and claims brought by our clients or others for breaching contractual confidentiality and security provisions or data protection laws.
Item 1A. Risk Factors Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below in addition to the other information set forth in this Annual Report on Form 10-K, including “ Part II, Item 7.
Item 1A. Risk Factors Investing in our common stock involves a high degree of risk. Before making an investment decision, you should carefully consider the risks described below in addition to the other information set forth in this Annual Report on Form 10-K, including “ Part II, Item 7.
Among other things, such alliance partners may in the future decide to compete with us, form exclusive or more favorable arrangements with our competitors or otherwise reduce our access to their products, thereby impairing our ability to provide the services and solutions demanded by clients.
Among other things, such alliance partners may in the future decide to compete with us, form exclusive or more favorable arrangements with our competitors or otherwise reduce our access to their technology, thereby impairing our ability to provide the services and solutions dependent on such technology demanded or required by clients.
System failures, outages and operational disruptions may be caused by factors outside of our control, such as hostilities (including the ongoing conflicts between Russia and Ukraine and in the Middle East), political unrest, terrorist attacks, cybersecurity incidents, power or water shortages or telecommunications failures, natural or man-made disasters or other catastrophic events (including the impact of extreme weather conditions), and public health emergencies, epidemics and pandemics, affecting the geographies where our people, equipment and clients are located.
System failures, outages and operational disruptions may be caused by factors outside of our control, such as hostilities, political unrest, terrorist attacks, cybersecurity incidents, power or water shortages or telecommunications failures, natural or man-made disasters or other catastrophic events (including the impact of extreme weather conditions), and public health emergencies, epidemics and pandemics, affecting the geographies where our people, equipment and clients are located.
We are also subject to a wide range of potential enforcement actions, audits or investigations regarding our compliance with these laws or regulations in the conduct of our business, and any finding of a violation could subject us to a wide range of civil or criminal penalties, including fines, debarment, or suspension or disqualification from government contracting, prohibitions or restrictions on doing business in one or more jurisdictions, loss of clients and business, legal claims by clients and unfavorable publicity or damage to our reputation.
Cognizant 22 December 31, 2025 Form 10-K Table of Contents We are also subject to a wide range of potential enforcement actions, audits or investigations regarding our compliance with these laws or regulations in the conduct of our business, and any finding of a violation could subject us to a wide range of civil or criminal penalties, including fines, debarment, or suspension or disqualification from government contracting, prohibitions or restrictions on doing business in one or more jurisdictions, loss of clients and business, legal claims by clients and unfavorable publicity or damage to our reputation.
We supplement our participation in ratings systems with published disclosures of our ESG activities, but some investors may desire other disclosures that we do not provide.
We supplement our participation in ratings systems with published disclosures of our sustainability and societal activities, but some investors may desire other disclosures that we do not provide.
Our utilization rates are further affected by a number of factors, including our ability to transition employees from completed projects to new assignments, hire and assimilate new employees, forecast demand for our services and thereby maintain an appropriate headcount in each of our geographies and workforce and manage attrition, and Cognizant 17 December 31, 2024 Form 10-K Table of Contents our need to devote time and resources to training, professional development and other typically non-chargeable activities.
Our utilization rates are further affected by a number of factors, including our ability to transition employees from completed projects to new assignments, hire and assimilate new employees, forecast demand for our services and thereby maintain an appropriate headcount in each of our geographies and workforce and manage attrition, and our need to devote time and resources to training, professional development and other typically non-chargeable activities.
Violations of these laws or regulations by us, our employees or any of these third parties could subject us to criminal or civil Cognizant 22 December 31, 2024 Form 10-K Table of Contents enforcement actions (whether or not we participated or knew about the actions leading to the violations), including fines or penalties, disgorgement of profits and suspension or disqualification from work, including U.S. federal contracting, any of which could materially adversely affect our business, including our results of operations and our reputation.
Violations of these laws or regulations by us, our employees or any of these third parties could subject us to criminal or civil enforcement actions (whether or not we participated or knew about the actions leading to the violations), including fines or penalties, disgorgement of profits and suspension or disqualification from work, including U.S. federal contracting, any of which could materially adversely affect our business, including our results of operations and our reputation.
Additionally, we benefit from governmental policies in countries that encourage foreign investment and promote the ease of doing business, such as tax incentives, and any change in policy or circumstances that results in the elimination of such benefits or degradation of the rule of law, or imposition of new adverse restrictions or costs on our operations could have a material adverse effect on our business, results of operations and financial condition.
Additionally, we benefit from governmental policies in countries that encourage foreign investment and promote the ease of doing business, such as tax incentives, and any change in policy or circumstances that Cognizant 14 December 31, 2025 Form 10-K Table of Contents results in the elimination of such benefits or degradation of the rule of law, or imposition of new adverse restrictions or costs on our operations could have a material adverse effect on our business, results of operations and financial condition.
Any performance failure on the part of our alliance partners, or the discontinuance by such alliance partners of services that we have relied on them to perform for our clients, could delay our performance or require us to engage alternative third parties to perform the services at our cost or to perform them ourselves, any of which could deprive us of potential revenue or adversely impact our profitability.
Any performance failure on the part of our alliance partners, or the discontinuance by such alliance partners of technology that we have relied on them to provide for our clients or ourselves, could delay or prevent our performance unless we engage alternative third parties to provide the equivalent technology at our cost or provide the equivalent technology ourselves, any of which could deprive us of potential revenue or adversely impact our profitability.
Many of these recent changes have resulted in, and various proposed and enacted changes may result in, increased difficulty in obtaining timely visas, whether as a result of visa application rejections, delays in processing applications, significantly increased costs to obtain visas, prevailing wage requirements for our employees on visas or otherwise, which could in turn impact our ability to staff projects.
Many of these recent changes have resulted in, and various proposed and enacted changes may result in, increased difficulty in obtaining timely visas, whether as a Cognizant 21 December 31, 2025 Form 10-K Table of Contents result of visa application rejections, delays in processing applications, significantly increased costs to obtain visas, prevailing wage requirements for our employees on visas or otherwise, which could in turn impact our ability to staff projects.
Our business has experienced in the past and may experience in the future significant employee attrition, which has caused us to incur increased costs to hire new employees with the desired skills.
Our business has experienced in the past and may experience in the future employee attrition at levels which could cause us to incur increased costs to hire new employees with the desired skills.
If we are unable to attract, train and retain skilled employees to satisfy client demand, including highly skilled technical personnel and personnel with experience in key AI and digital areas, as well as senior management to lead our business globally, our business and results of operations may be materially adversely affected.
Cognizant 16 December 31, 2025 Form 10-K Table of Contents If we are unable to attract, train and retain skilled employees to satisfy client demand, including highly skilled technical personnel and personnel with experience in key AI and digital areas, as well as senior management to lead our business globally, our business and results of operations may be materially adversely affected.
Security breaches, employee malfeasance, or human or technological error have in the past and could in the future cause shutdowns or disruptions of our or our clients' operations and Cognizant 18 December 31, 2024 Form 10-K Table of Contents potential unauthorized access and/or disclosure of our or our clients’ sensitive data, which in turn could jeopardize projects that are critical to our operations or the operations of our clients’ businesses and have other adverse impacts on our business or the business of our clients.
Security breaches, employee malfeasance, or human or technological error have in the past and could in the future cause shutdowns or disruptions of our, our vendors' or our clients' operations and potential unauthorized access and/or disclosure of our or our clients’ sensitive data, which in turn could jeopardize projects that are critical to our operations or the operations of our clients’ businesses and have other adverse impacts on our business or the business of our clients.
In addition, global clients often rely on ESG rating systems for bids and buying practices, and yet the criteria used in the ratings may conflict and change frequently, and we cannot predict how these third parties will score us, nor can we have any assurance that they score us or other companies Cognizant 20 December 31, 2024 Form 10-K Table of Contents accurately, or that we will be able to score well as such criteria change.
In addition, global clients often rely on sustainability rating systems for bids and buying practices, and yet the criteria used in the ratings may conflict and change frequently, and we cannot predict how these third parties will score us, nor can we have any assurance that they score us or other companies accurately, or that we will be able to score well as such criteria change.
If we fail to develop and implement AI solutions that meet our internal and client needs or if we are unable to bring AI-enabled solutions to market as effectively or with the same speed as our competitors, we may fail to recoup our investments in AI and our financial performance, competitive position, business and reputation may be adversely impacted.
If we fail to develop and implement AI solutions that meet our internal and client needs, if we are unable to offer or bring AI-enabled solutions to market as effectively or with the same speed as our competitors, or if our clients do not accept new pricing models that reflect the value of our AI-enabled solutions, we may fail to recoup our investments in AI and our financial performance, competitive position, business and reputation may be adversely impacted.
At the same time, an increasing number of stakeholders, regulators, and lawmakers have expressed or pursued contrary views, legislation and investment expectations with respect to ESG ratings and ambitions, including the enactment or proposal of “anti-ESG” legislation, regulation or policies, which may expose us to additional legal, financial or reputational risks based upon our ESG ambitions and disclosures.
At the same time, an increasing number of stakeholders, including regulators, and lawmakers have expressed or pursued conflicting views, legislation and investment expectations with respect to sustainability and societal ratings, ambitions and disclosures, which may expose us to additional legal, financial or reputational risks based upon our sustainability and societal ambitions and disclosures.
Additionally, we expect to continue pursuing strategic and targeted acquisitions and investments to enhance our offerings of services and solutions or to enable us to expand our talent, experience and capabilities in key AI and digital areas or in particular geographies or industries.
Cognizant 18 December 31, 2025 Form 10-K Table of Contents Additionally, we expect to continue pursuing strategic and targeted acquisitions and investments to enhance our offerings of services and solutions or to enable us to expand our talent, experience and capabilities in key AI and digital areas or in particular geographies or industries.
However, the hedging strategies that we have implemented, or may in the future implement, to mitigate foreign currency exchange rate risks may not reduce or completely offset our exposure to foreign Cognizant 19 December 31, 2024 Form 10-K Table of Contents exchange rate fluctuations and may expose our business to unexpected market, operational and counterparty credit risks.
However, the hedging strategies that we have implemented, or may in the future implement, to mitigate foreign currency exchange rate risks may not reduce or completely offset our exposure to foreign exchange rate fluctuations and may expose our business to unexpected market, operational and counterparty credit risks.
Our clients, suppliers, subcontractors and other third parties with whom we do business, including in particular cloud service providers and software vendors, generally face similar cybersecurity threats, and we must rely on the safeguards adopted by these parties.
Cognizant 19 December 31, 2025 Form 10-K Table of Contents Our clients, suppliers, subcontractors and other third parties with whom we do business, including in particular cloud service providers and software vendors, generally face similar cybersecurity threats, and we must rely on the safeguards adopted by these parties.
The less we are able to differentiate our services Cognizant 14 December 31, 2024 Form 10-K Table of Contents and solutions and/or clearly convey the value of our services and solutions, the more difficulty we have in winning new work in sufficient volumes and at our target pricing and overall economics.
The less we are able to differentiate our services and solutions and/or clearly convey the value of our services and solutions, the more difficulty we have in winning new work in sufficient volumes and at our target pricing and overall economics.
Each of the foregoing may lead to reduced demand for our services or harm our ability to obtain favorable pricing or other terms for our services, which could have a material adverse effect on our business, results of operations and financial condition.
Each of the foregoing may lead to reduced demand for our services or harm our ability to obtain favorable pricing or other terms for our services, which could have a material adverse effect on our business, results of operations and financial condition. AI technology and services require access to high-quality datasets, models (including foundation models), and other AI system components.
While we maintain insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions as well as deductibles and caps on amounts recoverable.
Cognizant 23 December 31, 2025 Form 10-K Table of Contents While we maintain insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions as well as deductibles and caps on amounts recoverable.
Cognizant 23 December 31, 2024 Form 10-K Table of Contents If we infringe upon the IP rights of others or our IP rights are infringed upon, our business may be adversely affected. Third parties have in the past and may in the future claim that we infringe upon their IP rights.
If we infringe upon the IP rights of others or our IP rights are infringed upon, our business may be adversely affected. Third parties have in the past and may in the future claim that we infringe upon their IP rights.
We have incurred and plan to continue to incur significant development and operational costs to build and support our AI capabilities, including costs to ensure ongoing compliance with the complex and rapidly evolving legal landscape around AI and automation.
We have incurred and plan to continue to incur significant development and Cognizant 15 December 31, 2025 Form 10-K Table of Contents operational costs to build and support our AI capabilities, including costs to ensure ongoing compliance with the complex and rapidly evolving legal landscape around AI and automation.
Cognizant 21 December 31, 2024 Form 10-K Table of Contents Anti-outsourcing legislation, if adopted, and negative perceptions associated with offshore outsourcing could impair our ability to serve our clients and materially adversely affect our business, results of operations and financial condition.
Anti-outsourcing legislation, if adopted, and negative perceptions associated with offshore outsourcing could impair our ability to serve our clients and materially adversely affect our business, results of operations and financial condition.
Tax authorities have disagreed, and may in the future disagree, with our judgments, and are taking increasingly aggressive positions, including with respect to our intercompany transactions.
Additionally, we are subject to routine tax audits, investigations and proceedings in various jurisdictions. Tax authorities have disagreed, and may in the future disagree, with our judgments, and are taking increasingly aggressive positions, including with respect to our intercompany transactions.
Further, natural disasters and adverse weather events, such as droughts, wildfires, storms, sea-level rise and flooding, occurring more frequently, with less predictability or with greater intensity, could cause community disruptions and impact our employees’ abilities to commute or to work from home safely and effectively.
Further, natural disasters and adverse weather events, such as droughts, wildfires, storms, sea-level rise and flooding, occurring more Cognizant 20 December 31, 2025 Form 10-K Table of Contents frequently, with less predictability or with greater intensity due to climate change or other drivers, could cause community disruptions and impact our employees’ abilities to commute or to work from home safely and effectively.
We include data protection and security content as part of annual training required of employees. In 2024, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. For further discussion of the cybersecurity risks and threats we face, please see Item 1A.
In 2025, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. For further discussion of the cybersecurity risks and threats we face, please see Item 1A. “Risk Factors” .
These laws are continuously evolving and developing and may impose obligations on companies developing and using AI or automated decision-making technologies.
These laws are subject to ongoing interpretation and implementation and may impose obligations on companies developing and using AI or automated decision-making technologies.
We must hire or reskill, integrate, retain and motivate our large workforce with diverse skills and expertise to serve client demands across the globe, respond quickly to rapid and ongoing technological, industry and macroeconomic developments and grow and manage our business. In 2021 and most of 2022, we and, we believe, the IT industry generally, experienced unprecedented attrition.
We must hire or upskill, integrate, retain and motivate our large workforce with diverse skills and expertise to serve client demands around the globe, respond quickly to rapid and ongoing technological, industry and macroeconomic developments and grow and manage our business.
Compliance with new or changing laws, regulations, industry standards or ethical requirements and expectations relating to AI may impose significant operational costs requiring us to change our service offerings or business practices, particularly as we expand the use of such technologies, or may limit or prevent our ability to develop, deploy, or use AI technologies.
Compliance with new or changing laws, regulations, industry standards or ethical requirements and expectations relating to AI may impose significant operational costs, require additional investment in governance, documentation and controls, or necessitate changes to our service offerings or business practices, particularly as we expand the use of such technologies.
In addition, changes in immigration laws or policies, or varying applications of immigration laws and policies, could limit the availability of certain work visas in the U.S., which could Cognizant 16 December 31, 2024 Form 10-K Table of Contents exacerbate competition for skilled labor.
In addition, changes in immigration laws or policies, or varying applications of immigration laws and policies, have limited the availability of certain work visas in the U.S., which could exacerbate competition for skilled labor.
We face significant regulatory compliance costs and risks as a result of the size and breadth of our business, and these costs may increase as a result of changes in government policy.
We face significant regulatory compliance costs and risks as a result of the size and breadth of our business, and these costs may increase as a result of changes in government policy. For example, the Government of India implemented the Labor Code, which we expect to modestly increase our defined benefit costs prospectively.
This challenge could hinder our ability to develop, implement or maintain AI technologies. To overcome this, we may need to invest in alternative strategies, such as forming alliances or developing our own resources.
To overcome this, we may need to invest in alternative strategies, such as forming partnerships or developing our own resources.
Our relationships with our third-party alliance partners, who supply us with necessary components to the services and solutions we offer our clients, are also critical to our ability to provide many of our services and solutions that address client demands. Some of our third-party alliance partners are also clients or suppliers for our internal operations.
Our relationships with our third-party alliance partners, who supply us with technology, including platforms and software, are also critical to our ability to provide many of our services and solutions that address client demands or requirements.
Furthermore, the legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain, with jurisdictions around the world applying, or considering applying, laws and regulations related to IP, cybersecurity, export controls, privacy, data security, and data protection to AI and automated decision-making, or general legal frameworks on AI, such as the EU AI Act, which entered into force in 2024 and parts of which apply beginning in 2025.
Authorities around the world are applying, or considering applying, laws and regulations related to IP, cybersecurity, export controls, privacy, data security and data protection to AI and automated decision-making technologies, as well as adopting AI-specific regulatory frameworks, such as emerging U.S. state AI laws and the EU AI Act which entered into force in 2024 and parts of which began applying in 2025.
Our risk management, business continuity and disaster recovery plans may not be effective at predicting or mitigating the effects of such disruptions, particularly in the case of catastrophic events or longer term, increasingly severe developments that may occur as a result of climate change.
Our risk management, business resilience and disaster recovery plans may not be effective at predicting, mitigating, or responding to the effects of such disruptions, particularly in the case of catastrophic events.
While we strive to adjust pricing to reduce the impact of compensation increases on our operating margin, we may not be successful in recovering these increases, which could adversely affect our profitability and operating margin. Costs associated with recruiting and training employees are significant.
We may not be successful in recovering through price increases or other mechanisms any increases we make to compensation, which could adversely affect our profitability and operating margin. Costs associated with recruiting and training employees are significant.
Cognizant 24 December 31, 2024 Form 10-K Table of Contents Our cyber risk assessment program is managed by our Corporate Security team, which is led by our CSO, who has over 25 years of experience in the cybersecurity and technology industry. The CSO reports to Cognizant's Executive Vice President, Chief Legal Officer, Chief Administrative Officer and Corporate Secretary.
Our cyber risk assessment program is managed by our Corporate Security team, which is led by our CSO, who has over 25 years of experience in the cybersecurity and technology industry. The CSO reports to Cognizant's CLO.
Given the rapid rate of change and the often uncertain scope, interpretation, and application of these laws and regulations, which may be in conflict across jurisdictions, we may not always be able to anticipate how courts and regulators will apply existing laws to AI, predict how new legal frameworks will address AI, or otherwise ensure compliance with these frameworks.
Given the pace of regulatory development and the potential for divergent or evolving scope, interpretation and application of these laws and regulations, we may not always be able to anticipate how courts and regulators will apply existing laws to AI or how new AI-specific legal frameworks will be implemented, or otherwise ensure compliance with these frameworks.
Failure to carry out our capital return strategy may adversely impact our reputation with shareholders and shareholders’ perception of our business and the trading price of our common stock. We face challenges related to growing our business organically as well as inorganically through acquisitions, and we may not be able to achieve our targeted growth rates.
Failure to carry out our capital return strategy may adversely impact our reputation with shareholders and shareholders’ perception of our business and the trading price of our common stock.
The internal committee is responsible for assessing the materiality of cybersecurity threats and incidents and informs designated members of executive leadership and of the Board of Directors of material cybersecurity threats and incidents. Cognizant's cybersecurity risk management program is guided by industry-recognized security frameworks, including ISO/IEC 27001, TISAX and NIST.
The internal committee is responsible for assessing the materiality of cybersecurity threats and incidents and informs designated members of executive leadership and of the Board of Directors of material cybersecurity threats and incidents.
Our clients maintain their own proprietary, sensitive, or confidential information that could be compromised in a cybersecurity attack, or their systems may be disabled or disrupted as a result of such an attack.
Furthermore, the security measures we implement for our cybersecurity solutions clients may not function as expected or be sufficient to identify or protect against certain cybersecurity attacks. Our clients maintain their own proprietary, sensitive, or confidential information that could be compromised in a cybersecurity incident, or their systems may be disabled or disrupted as a result of such an incident.
In addition, the development, adoption, and use of AI technologies are all still in their early stages and ineffective or inadequate AI development or deployment practices by us, our clients, or third parties with whom we do business could result in unintended consequences.
In addition, the development, adoption and use of AI technologies continue to evolve rapidly and ineffective or inadequate AI development or deployment practices by us, our clients or other third parties may not deliver anticipated efficiencies and could result in unintended consequences.
Our failure to meet specified service levels or milestones required by certain of our client contracts may result in our client contracts being less profitable, potential liability for penalties or damages or reputational harm. Many of our client contracts include clauses that tie our compensation to the achievement of agreed-upon performance standards, productivity improvements or milestones.
Cognizant 17 December 31, 2025 Form 10-K Table of Contents Our failure to meet specified service levels or milestones required by certain of our client contracts may result in our client contracts being less profitable, potential liability for penalties or damages or reputational harm.
Additionally, macroeconomic and geopolitical developments, including public health crises, escalating global conflicts, supply chain disruptions, labor market constraints, rising rates of inflation and high interest rates may amplify many of the risks discussed below to which we are subject.
Additionally, macroeconomic and geopolitical developments may amplify many of the risks discussed below to which we are subject.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also have a significant number of delivery centers in other countries, including the United States, Philippines, Canada, Mexico and countries throughout Europe. In addition, we have sales and marketing offices, innovation and Gen-AI labs, and digital design and consulting centers in major business markets, including New York, London, Paris, Melbourne and Singapore, among others.
Biggest changeWe also have a significant number of delivery centers in other countries, including the United States, Philippines, Canada, and countries throughout Europe and Latin America. In addition, we have sales and marketing offices, innovation and GenAI labs, and digital design and consulting centers in major business markets, including New York, London, Paris, Melbourne and Singapore, among others.
Our largest delivery center presence is in India, representing approximately 90% of our total delivery centers on a square-foot basis, with the largest presence in Chennai (8 million square feet), Hyderabad (3 million square feet), Pune (2 million square feet), Bangalore (2 million square feet) and Kolkata (2 million square feet).
Our largest delivery center presence is in India, representing approximately 90% of our total delivery centers on a square-foot basis, with the largest presence in Chennai (7 million square feet), Hyderabad (3 million square feet), Pune (2 million square feet), Kolkata (2 million square feet) and Bangalore (2 million square feet).

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDuring the three months ended December 31, 2024, we repurchased $140 million of our Class A common stock under our stock repurchase program as follows: Month Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (in millions) October 1, 2024 - October 31, 2024 — $ — — $ 1,377 November 1, 2024 - November 30, 2024 1,062,605 77.87 1,062,605 1,295 December 1, 2024 - December 31, 2024 716,060 79.95 716,060 1,237 Total 1,778,665 $ 78.71 1,778,665 We regularly purchase shares in connection with our stock-based compensation plans as shares of our Class A common stock are tendered by employees for payment of applicable statutory tax withholdings.
Biggest changeDuring the three months ended December 31, 2025, we repurchased $325 million of our Class A common stock under our stock repurchase program as follows: Month Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (in millions) October 1, 2025 - October 31, 2025 739,820 $ 67.58 739,820 $ 2,193 November 1, 2025 - November 30, 2025 2,079,104 72.81 2,079,104 2,042 December 1, 2025 - December 31, 2025 1,491,234 82.90 1,491,234 1,918 Total 4,310,158 $ 75.40 4,310,158 We regularly purchase shares in connection with our stock-based compensation plans as shares of our Class A common stock are tendered by employees for payment of applicable statutory tax withholdings.
The repurchase program does not have an expiration date and had a remaining balance of $1,237 million as of December 31, 2024. The timing of repurchases and the exact number of shares to be purchased are determined by management, in its discretion, or pursuant to a 10b5-1 Plan, and depend upon market conditions and other factors.
The repurchase program does not have an expiration date and had a remaining balance of $1,918 million as of December 31, 2025. The timing of repurchases and the exact number of shares to be purchased are determined by management, in its discretion, or pursuant to a 10b5-1 Plan, and depend upon market conditions and other factors.
Cognizant 26 December 31, 2024 Form 10-K Table of Contents Performance Graph The following graph compares the cumulative total stockholder return on our Class A common stock with the cumulative total return on the S&P 500 Index and the S&P 500 Information Technology Index for the period beginning December 31, 2019 and ending on the last day of our last completed fiscal year.
Cognizant 26 December 31, 2025 Form 10-K Table of Contents Performance Graph The following graph compares the cumulative total stockholder return on our Class A common stock with the cumulative total return on the S&P 500 Index and the S&P 500 Information Technology Index for the period beginning December 31, 2020 and ending on the last day of our last completed fiscal year.
For the three months ended December 31, 2024, we purchased 0.2 million shares at an aggregate cost of $14 million in connection with employee tax withholding obligations. Recent Sales of Unregistered Securities None.
For the three months ended December 31, 2025, we purchased 0.2 million shares at an aggregate cost of $13 million in connection with employee tax withholding obligations. Recent Sales of Unregistered Securities None.
Cash Dividends During 2024, we paid quarterly cash dividends of $0.30 per share, or $1.20 per share in total for the year. In February 2025, our Board of Directors approved a cash dividend of $0.31 per share with a record date of February 18, 2025 and a payment date of February 26, 2025.
Cash Dividends During 2025, we paid quarterly cash dividends of $0.31 per share, or $1.24 per share in total for the year. In February 2026, our Board of Directors approved a cash dividend of $0.33 per share with a record date of February 18, 2026 and a payment date of February 26, 2026.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our Class A common stock trades on the Nasdaq Stock Market under the symbol “CTSH.” As of December 31, 2024, the number of holders of record of our Class A common stock was 95 and th e approximate number of beneficial holders of our Class A common stock w as 676,500.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our Class A common stock trades on the Nasdaq Stock Market under the symbol “CTSH.” As of December 31, 2025, the number of holders of record of our Class A common stock was 88 and th e approximate number of beneficial holders of our Class A common stock w as 697,100.
Issuer Purchases of Equity Securities Our stock repurchase program, as amended in November 2022, allows for the repurchase of up to $11.5 billion, excluding fees and expenses, of our Class A common stock through open market purchases, including under a 10b5-1 Plan in accordance with applicable federal securities laws.
Issuer Purchases of Equity Securities Our stock repurchase program was initially adopted in 2017 and has been amended from time to time, including most recently in March 2025, to authorize the repurchase of up to $13.5 billion, excluding fees and expenses, of our Class A common stock through open market purchases, including under a 10b5-1 Plan in accordance with applicable federal securities laws.
COMPARISON OF CUMULATIVE TOTAL RETURN (1)(2) Among Cognizant, the S&P 500 Index and the S&P 500 Information Technology Index Company / Index Base Period 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Cognizant Technology Solutions Corp $ 100 $ 133.93 $ 146.84 $ 96.12 $ 129.16 $ 133.62 S&P 500 Index 100 118.40 152.39 124.79 157.59 197.02 S&P 500 Information Technology Index 100 143.89 193.58 139.00 219.40 299.72 (1) Graph assumes $100 invested on December 31, 2019 in our Class A common stock, the S&P 500 Index and the S&P 500 Information Technology Index.
COMPARISON OF CUMULATIVE TOTAL RETURN (1)(2) Among Cognizant, the S&P 500 Index and the S&P 500 Information Technology Index Company / Index Base Period 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Cognizant Technology Solutions Corp $ 100 $ 109.64 $ 71.77 $ 96.44 $ 99.77 $ 109.43 S&P 500 Index 100 128.71 105.40 133.10 166.40 196.16 S&P 500 Information Technology Index 100 134.53 96.60 152.48 208.30 258.38 (1) Graph assumes $100 invested on December 31, 2020 in our Class A common stock, the S&P 500 Index and the S&P 500 Information Technology Index.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCognizant 30 December 31, 2024 Form 10-K Table of Contents Revenues - Reportable Business Segments and Geographic Markets Revenues of $19,736 million across our business segments and geographies were as follows for the year ended December 31, 2024: 2024 as compared to 2023 Increase / (Decrease) (Dollars in millions) $ % CC % 4 Health Sciences $ 258 4.5 4.5 Financial Services (56) (1.0) (1.1) Products and Resources 154 3.3 3.2 CMT 27 0.8 0.5 Total revenues $ 383 2.0 1.9 2024 as compared to 2023 Increase / (Decrease) (Dollars in millions) $ % CC % 4 North America $ 435 3.0 3.1 United Kingdom (58) (3.1) (5.1) Continental Europe 23 1.2 0.9 Europe - Total (35) (0.9) (2.1) Rest of World (17) (1.3) — Total revenues $ 383 2.0 1.9 Change in revenues was driven by the following factors: • North America revenues, particularly in the Health Sciences segment, were positively impacted by the ramp up of several recently won large deals; • Recently completed acquisitions contributed 200 basis points of growth to the overall change in revenues, including approximately 600 basis points of growth to our Products and Resources segment (primarily in North America) and approximately 150 basis points of growth to our Communications, Media and Technology segment (primarily in North America); • The resale of third-party products, primarily in North America, in connection with our integrated offerings strategy, contributed 70 basis points of growth to the overall change in revenue; • Reduced demand for discretionary work negatively impacted revenues across all segments.
Biggest changeCognizant 30 December 31, 2025 Form 10-K Table of Contents Revenues - Reportable Business Segments and Geographic Markets Revenues of $21,108 million across our business segments and geographies were as follows for the year ended December 31, 2025: 2025 as compared to 2024 Increase (Dollars in millions) $ % CC % 3 Health Sciences $ 415 7.0 6.4 Financial Services 420 7.3 6.8 Products and Resources 503 10.5 9.7 CMT 34 1.0 0.7 Total revenues $ 1,372 7.0 6.4 2025 as compared to 2024 Increase (Dollars in millions) $ % CC % 3 North America $ 1,082 7.4 7.4 United Kingdom 95 5.2 2.1 Continental Europe 158 8.2 3.6 Europe - Total 253 6.7 2.9 Rest of World 37 2.9 4.7 Total revenues $ 1,372 7.0 6.4 Change in revenues was driven by the following factors: • Revenue growth across all geographies was primarily driven by our Financial Services and Health Sciences segments, which were positively impacted by the ramp up of several recently won large deals; • Our acquisition of Belcan contributed 260 basis points of growth to the overall revenue growth, including approximately 960 basis points of growth to our Products and Resources segment, primarily in North America and to a lesser extent the United Kingdom; • Our Communications Media and Technology segment has seen weakness amongst communications and media customers, offset by growth in technology customers. 3 Constant currency revenue growth is not a measure of financial performance prepared in accordance with GAAP.
We believe that the presentation of non-GAAP financial measures, which exclude certain costs, read in conjunction with our reported GAAP results and reconciliations to the most comparable GAAP measure, as applicable, can provide useful supplemental information to our management and investors regarding financial and business trends relating to our financial condition and results of operations.
We believe that the presentation of these non-GAAP financial measures, which exclude certain costs, read in conjunction with our reported GAAP results and reconciliations to the most comparable GAAP measure, as applicable, can provide useful supplemental information to our management and investors regarding financial and business trends relating to our financial condition and results of operations.
We believe that we currently meet all conditions set forth in the Credit Agreement to borrow thereunder, and we are not aware of any conditions that would prevent us from borrowing part or all of the remaining available capacity under the revolving credit facility as of December 31, 2024 and through the date of this filing.
We believe that we currently meet all conditions set forth in the Credit Agreement to borrow thereunder, and we are not aware of any conditions that would prevent us from borrowing part or all of the remaining available capacity under the revolving credit facility as of December 31, 2025 and through the date of this filing.
Cognizant 29 December 31, 2024 Form 10-K Table of Contents Results of Operations For a discussion of our results of operations for the year ended December 31, 2022, including a year-to-year comparison between 2023 and 2022, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report Form 10-K for the year ended December 31, 2023.
Cognizant 29 December 31, 2025 Form 10-K Table of Contents Results of Operations For a discussion of our results of operations for the year ended December 31, 2023, including a year-to-year comparison between 2024 and 2023, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report Form 10-K for the year ended December 31, 2024.
Each additional 1.0% change in exchange rate between the Indian rupee and the U.S. dollar will have the effect of moving our operating margin by approximately 18 basis points (excluding the impact of our cash flow hedges).
Each additional 1.0% change in exchange rate between the Indian rupee and the U.S. dollar will have the effect of moving our operating margin by approximately 17 basis points (excluding the impact of our cash flow hedges).
Cognizant 33 December 31, 2024 Form 10-K Table of Contents Other Income (Expense), Net Total other income (expense), net consists primarily of foreign currency exchange gains and losses, interest income and interest expense.
Cognizant 33 December 31, 2025 Form 10-K Table of Contents Other Income (Expense), Net Total other income (expense), net consists primarily of foreign currency exchange gains and losses, interest income and interest expense.
See “Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measures, as applicable. Cognizant 32 December 31, 2024 Form 10-K Table of Contents A predominant portion of our costs in India are denominated in the Indian rupee, representing approximately 24% of our global operating costs during the year ended December 31, 2024 .
See “Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measures, as applicable. Cognizant 32 December 31, 2025 Form 10-K Table of Contents A predominant portion of our costs in India are denominated in the Indian rupee, representing approximately 23% of our global operating costs during the year ended December 31, 2025.
Free cash flow is defined as cash flows from operating activities net of purchases of property and equipment. We believe providing investors with an operating view consistent with how we manage the Company provides enhanced transparency into our operating results.
Free cash flow is defined as cash flows from operating activities plus proceeds from sale of property and equipment, net of purchases of property and equipment. We believe providing investors with an operating view consistent with how we manage the Company provides enhanced transparency into our operating results.
We monitor turnover, aging and the collection of accounts receivable by client. Our DSO calculation includes receivables, net of allowance for doubtful accounts, and contract assets, reduced by the uncollected portion of deferred revenue. Our DSO was 78 days as of December 31, 2024, 77 days as of December 31, 2023 and 74 days as of December 31, 2022.
We monitor turnover, aging and the collection of accounts receivable by client. Our DSO calculation includes receivables, net of allowance for doubtful accounts, and contract assets, reduced by the uncollected portion of deferred revenue. Our DSO was 81 days as of December 31, 2025, 78 days as of December 31, 2024 and 77 days as of December 31, 2023.
We expect operating cash flows, cash and short-term investment balances, together with the available capacity under our revolving credit facilities, to be sufficient to meet our operating requirements, including purchase commitments, tax payments, including the Tax Reform Act transition tax payment, and servicing our debt for the next twelve months.
We expect operating cash flows, cash and short-term investment balances, together with the available capacity under our revolving credit facilities, to be sufficient to meet our operating requirements, including purchase commitments, tax payments and servicing our debt for the next twelve months.
Excluding the impact of applicable designated cash flow hedges, the depreciation of the Indian rupee against the U.S. dollar positively impacted our operating margin by approximately 25 basis points in 2024.
Excluding the impact of applicable designated cash flow hedges, the depreciation of the Indian rupee against the U.S. dollar positively impacted our operating margin by approximately 70 basis points in 2025.
See Note 10 to our consolidated financial statements. Capital Allocation Framework Acquisitions Share repurchases Dividend payments Our capital allocation framework anticipates the deployment of approximately 50% of our free cash flow 7 for acquisitions and 50% for share repurchases and dividend payments.
See Note 9 to our consolidated financial statements. Capital Allocation Framework Acquisitions Share repurchases Dividend payments Our capital allocation framework anticipates the deployment of approximately 50% of our free cash flow 6 for acquisitions and 50% for share repurchases and dividend payments.
Cognizant 31 December 31, 2024 Form 10-K Table of Contents Cost of Revenues (Exclusive of Depreciation and Amortization Expense) é $294M é 0.3% as a % of revenues ¡ % of Revenues Our cost of revenues consists primarily of salaries, incentive-based compensation, stock-based compensation expense, employee benefits, project-related immigration and travel for technical personnel, subcontracting and costs of third-party products and services relating to revenues.
Cognizant 31 December 31, 2025 Form 10-K Table of Contents Cost of Revenues (Exclusive of Depreciation and Amortization Expense) é $1,033M é 0.6% as a % of revenues ¡ % of Revenues Our cost of revenues consists primarily of salaries, incentive-based compensation, stock-based compensation expense, employee benefits, project-related immigration and travel for technical personnel, subcontracting and costs of third-party products and services relating to revenues.
Including the impact of the hedges, the depreciation of the Indian rupee positively impacted our operating margin for the year ended December 31, 2024 by 44 basis points as compared to the year ended December 31, 2023.
Including the impact of the hedges, the depreciation of the Indian rupee positively impacted our operating margin for the year ended December 31, 2025 by 50 basis points as compared to the year ended December 31, 2024.
Segment operating profit in the Products and Resources segment was negatively impacted by the dilutive impact of the Belcan acquisition. Segment operating profit in the Financial Services segment was positively impacted by reduced resales of third-party products in connection with our integrated offerings strategy.
In 2025, segment operating profit in the Products and Resources segment was negatively impacted by the dilutive impact of the Belcan acquisition and by resales of third-party products in connection with our integrated offerings strategy.
Segment Operating Profit Segment operating profit and operating margin percentage were as follows: Segment operating profit % Segment operating margin In 2024, segment operating margins across all our segments were negatively impacted by increased compensation costs, partially offset by savings generated from our NextGen program and the beneficial impact of foreign currency exchange rate movements.
Segment operating profit and operating margin percentage were as follows: Segment operating profit % Segment operating margin In 2025, segment operating margins across all our segments were positively impacted by net savings generated from our NextGen program, operational efficiencies and the beneficial impact of foreign currency exchange rate movements, partially offset by increased compensation costs.
See Note 4 to our consolidated financial statements for additional information.
See Note 10 to our consolidated financial statements for additional information.
The gains on foreign exchange forward contracts not designated as hedging instruments related to the realized and unrealized gains and losses on cont racts entered into to offset our foreign currency exposures. As of December 31, 2024, the notional value of our undesignated hedges was $489 million.
The gains on foreign exchange forward contracts not designated as hedging instruments related to the realized and unrealized gains and losses on cont racts en tered into to offset our foreign currency exposures. As of December 31, 2025, the notional value of our undesignated hedges was $748 million.
Additionally, we have purchase commitments of approximately $1.1 billion that will be paid over the next four years, of which approximately $440 million will be paid during the next twelve months. In a ddition, see Note 7 to our consolidated financial statements for a description of our operating lease obligations.
Additionally, we have purchase commitments of approximately $2.3 billion that will be paid over the next five years, of which approximately $800 million will be paid during the next twelve months. In addition, see Note 6 to our consolidated financial statements for a description of our operating lease obligations.
(3) Presented below are the tax impacts of our non-GAAP adjustments to pre-tax income for the years ended December 31: (in millions) 2024 2023 Non-GAAP income tax benefit (expense) related to: NextGen charges $ 34 $ 59 Foreign currency exchange gains and losses (4) (6) The effective tax rate related to non-operating foreign currency exchange gains and losses varies depending on the jurisdictions in which such income and expenses are generated and the statutory rates applicable in those jurisdictions.
Cognizant 35 December 31, 2025 Form 10-K Table of Contents (4) Presented below are the tax impacts of our non-GAAP adjustments to pre-tax income for the years ended December 31: (in millions) 2025 2024 Non-GAAP income tax benefit (expense) related to: Gain on sale of property and equipment $ (9) $ — NextGen charges — 34 Foreign currency exchange gains and losses (33) (4) The effective tax rate related to non-operating foreign currency exchange gains and losses varies depending on the jurisdictions in which such income and expenses are generated and the statutory rates applicable in those jurisdictions.
We believe clients will continue to contend with industry-specific changes driven by evolving digital technologies, uncertainty in the regulatory environment, industry consolidation and convergence as well as international trade policie s and other macroeconomic and geopolitical factors, including the uncertainty related to the global economy, which has affected and may continue to affect their demand for our services.
We believe clients will continue to contend with industry-specific changes driven by evolving digital technologies, uncertainty in the regulatory environment, industry consolidation and convergence as well as international trade policie s, including tariffs, and other macroeconomic and geopolitical factors.
Cognizant 35 December 31, 2024 Form 10-K Table of Contents (2) Non-operating foreign currency exchange gains and losses, inclusive of gains and losses on related foreign exchange forward contracts not designated as hedging instruments for accounting purposes, are reported in "Foreign currency exchange gains (losses), net" in our consolidated statements of operations.
(3) Non-operating foreign currency exchange gains and losses, inclusive of gains and losses on related foreign exchange forward contracts not designated as hedging instruments for accounting purposes, are reported in "Foreign currency exchange gains (losses), net" in our consolidated statements of operations.
The following table sets forth total other income (expense), net for the years ended December 31: (in millions) 2024 2023 Increase / Decrease Foreign currency exchange gains (losses) $ (29) $ 42 $ (71) Gains (losses) on foreign exchange forward contracts not designated as hedging instruments 10 (40) 50 Foreign currency exchange gains (losses), net (19) 2 (21) Interest income 119 126 (7) Interest expense (54) (41) (13) Other, net — 11 (11) Total other income (expense), net $ 46 $ 98 $ (52) The foreign currency exchan ge losses were attributed to the remeasurement of net monetary assets and liabilities denominated in currencies other than the functional currencies of our subsidiaries.
The following table sets forth total other income (expense), net for the years ended December 31: (in millions) 2025 2024 Increase / Decrease Foreign currency exchange gains (losses) $ 15 $ (29) $ 44 Gains on foreign exchange forward contracts not designated as hedging instruments 3 10 (7) Foreign currency exchange gains (losses), net 18 (19) 37 Interest income 105 119 (14) Interest expense (37) (54) 17 Other, net 4 — 4 Total other income (expense), net $ 90 $ 46 $ 44 The foreign currency exchan ge gains and losses were attributed to the remeasurement of net monetary assets and liabilities denominated in currencies other than the functional currencies of our subsidiaries.
The increase, as a percentage of revenues, was due to higher compensation costs, primarily as a result of a merit increase cycle, and the resale of third-party products in connection with our integrated offerings strategy, partially offset by the beneficial impact of foreign currency exchange rate movements and operational efficiencies.
The increase, as a percentage of revenues, was driven by increased compensation costs, the dilutive impact of the acquisition of Belcan and resales of third-party products in connection with our integrated offerings strategy, partially offset by operational efficiencies and the beneficial impact of foreign currency exchange rate movements.
As AI-based technologies or other forms of automation evolve, we expect that demand for some services that we currently perform for our clients may be reduced and our ability to obtain favorable pricing or other terms for our services may be diminished.
As AI-based technologies or other forms of automation evolve, demand for some services that we currently perform for our clients may be reduced and our ability to obtain favorable pricing or other terms for some of our services may be diminished. Potential tax law and other regulatory and administrative changes, including judicial decisions thereon, may impact our future results.
These events or circumstances could include a significant change in the business climate, regulatory environment, established business plans, operating performance indicators or competition. Evaluation of goodwill for impairment requires judgment, including the identification of reporting units, assignment of assets, liabilities and goodwill to reporting units and determination of the fair value of each reporting unit.
Such events or circumstances may include significant changes in the business climate, the regulatory environment, business strategies, operating performance, or the competitive landscape. Evaluating goodwill for impairment requires judgment, including the identification of reporting units, assignment of assets, liabilities and goodwill to reporting units and determination of the fair value of each reporting unit.
In 2024, the settlement of our cash flow hedges positively impacted our operating margin by approximately 6 basis points, compared to a negative impact of 13 basis points in 2023.
In 2025, the settlement of our cash flow hedges negatively impacted our operating margin by approximately 15 basis points, compared to a positive impact of 5 basis points in 2024.
In addition, these non-GAAP financial measures should be read in conjunction with our financial statements prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures to the corresponding GAAP measures set forth below should be carefully evaluated. Our non-GAAP financial measures Adjusted Operating Margin and Adjusted Income from Operations exclude unusual items, such as NextGen charges.
In addition, these non-GAAP financial measures should be read in conjunction with our financial statements prepared in accordance with GAAP. The reconciliations of non-GAAP financial measures to the corresponding GAAP measures set forth below should be carefully evaluated.
The Year Ended December 31, 2024 Compared to The Year Ended December 31, 2023 The following table sets forth certain financial data for the years ended December 31: % of % of Increase / Decrease (Dollars in millions, except per share data) 2024 Revenues 2023 Revenues $ % Revenues $ 19,736 100.0 $ 19,353 100.0 $ 383 2.0 Cost of revenues (a) 12,958 65.7 12,664 65.4 294 2.3 Selling, general and administrative expenses (a) 3,223 16.3 3,252 16.8 (29) (0.9) Restructuring charges 134 0.7 229 1.2 (95) (41.5) Depreciation and amortization expense 529 2.7 519 2.7 10 1.9 Income from operations and operating margin 2,892 14.7 2,689 13.9 203 7.5 Other income (expense), net 46 98 (52) (53.1) Income before provision for income taxes 2,938 14.9 2,787 14.4 151 5.4 Provision for income taxes (713) (668) (45) 6.7 Income (loss) from equity method investments 15 7 8 114.3 Net income $ 2,240 11.3 $ 2,126 11.0 $ 114 5.4 Diluted EPS $ 4.51 $ 4.21 $ 0.30 7.1 Other Financial Information 3 Adjusted Income From Operations and Adjusted Operating Margin $ 3,026 15.3 $ 2,918 15.1 $ 108 3.7 Adjusted Diluted EPS $ 4.75 $ 4.55 $ 0.20 4.4 (a) Exclusive of depreciation and amortization expense 3 3 Adjusted Income from Operations, Adjusted Operating Margin and Adjusted Diluted EPS are not measures of financial performance prepared in accordance with GAAP.
The Year Ended December 31, 2025 Compared to The Year Ended December 31, 2024 The following table sets forth certain financial data for the years ended December 31: % of % of Increase / Decrease (Dollars in millions, except per share data) 2025 Revenues 2024 Revenues $ % Revenues $ 21,108 100.0 $ 19,736 100.0 $ 1,372 7.0 Operating expenses: Cost of revenues (a) 13,991 66.3 12,958 65.7 1,033 8.0 Selling, general and administrative expenses (a) 3,240 15.3 3,223 16.3 17 0.5 Restructuring charges — — 134 0.7 (134) (100.0) Depreciation and amortization expense 550 2.6 529 2.7 21 4.0 (Gain) on sale of property and equipment (62) (0.3) — — (62) N/A Income from operations and operating margin 3,389 16.1 2,892 14.7 497 17.2 Other income (expense), net 90 46 44 95.7 Income before provision for income taxes 3,479 16.5 2,938 14.9 541 18.4 Provision for income taxes (1,258) (713) (545) 76.4 Income (loss) from equity method investments 9 15 (6) (40.0) Net income $ 2,230 10.6 $ 2,240 11.3 $ (10) (0.4) Diluted EPS $ 4.56 $ 4.51 $ 0.05 1.1 Other Financial Information 2 Adjusted Income From Operations and Adjusted Operating Margin $ 3,327 15.8 $ 3,026 15.3 $ 301 9.9 Adjusted Diluted EPS $ 5.28 $ 4.75 $ 0.53 11.2 (a) Exclusive of depreciation and amortization expense N/A Not Applicable N/A Not Applicable 2 2 Adjusted Income from Operations, Adjusted Operating Margin and Adjusted Diluted EPS are not measures of financial performance prepared in accordance with GAAP.
Our non-GAAP financial measure Adjusted Diluted EPS excludes unusual items, such as NextGen charges, and net non-operating foreign currency exchange gains or losses and the tax impact of all the applicable adjustments. For further detail on the NextGen charges, see Note 4 to our consolidated financial statements.
Our non-GAAP financial measure Adjusted Diluted EPS excludes unusual items, such as the one-time income tax expense related to the enactment of the OBBBA, the gain on sale of property and equipment and NextGen charges, and net non-operating foreign currency exchange gains or losses and the tax impact of all the applicable adjustments.
At each acquisition date, we allocate goodwill and intangible assets to our reporting units based on how we expect each reporting unit to benefit from the respective business combination. Our seven industry-based operating segments are our reporting units. We exercise judgment to allocate goodwill to the reporting units expected to benefit from each business combination.
At each acquisition date, we allocate goodwill and intangible assets to our reporting units based on how we expect each reporting unit to benefit from the respective business combination. A reporting unit is defined as an operating segment or one level below an operating segment.
The following table presents a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure, as applicable, for the years ended December 31: (Dollars in millions, except per share data) 2024 % of Revenues 2023 % of Revenues GAAP income from operations and operating margin $ 2,892 14.7 % $ 2,689 13.9 % NextGen charges (1) 134 0.6 229 1.2 Adjusted Income From Operations and Adjusted Operating Margin $ 3,026 15.3 % $ 2,918 15.1 % GAAP diluted EPS $ 4.51 $ 4.21 Effect of NextGen charges, pre-tax 0.27 0.45 Effect of non-operating foreign currency exchange losses (gains), pre-tax (2) 0.04 — Tax effect of above adjustments (3) (0.07) (0.11) Adjusted Diluted EPS $ 4.75 $ 4.55 Net cash provided by operating activities $ 2,124 $ 2,330 Purchases of property and equipment (297) (317) Free cash flow $ 1,827 $ 2,013 (1) Consists of employee separation, facility exit and other costs incurred in connection with the NextGen program.
The following table presents a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure, as applicable, for the years ended December 31: (Dollars in millions, except per share data) 2025 % of Revenues 2024 % of Revenues GAAP income from operations and operating margin $ 3,389 16.1 % $ 2,892 14.7 % (Gain) on sale of property and equipment (1) (62) (0.3) — — NextGen charges (2) — — 134 0.6 Adjusted Income From Operations and Adjusted Operating Margin $ 3,327 15.8 % $ 3,026 15.3 % GAAP diluted EPS $ 4.56 $ 4.51 Effect of above adjustments, pre-tax (0.13) 0.27 Effect of non-operating foreign currency exchange (gains) losses, pre-tax (3) (0.04) 0.04 Tax effect of above adjustments (4) 0.09 (0.07) One-time income tax expense related to the enactment of the OBBBA (5) 0.80 — Adjusted Diluted EPS $ 5.28 $ 4.75 Net cash provided by operating activities $ 2,883 $ 2,124 Purchases of property and equipment (288) (297) Proceeds from sale of property and equipment 70 — Free cash flow $ 2,665 $ 1,827 (1) During 2025, we realized a gain of $62 million on the sale of an office complex in India.
Operating Margin and Adjusted Operating Margin 5 - Overall The increase in our 2024 GAAP operating margin and Adjusted Operating Margin 5 was primarily driven by net savings generated from our NextGen program and the beneficial impact of foreign currency exchange rate movements, partially offset by increased compensation costs, primarily as a result of a merit increase cycle, and the dilutive impact of recently completed acquisitions, primarily as a result of transaction and integration related expenses and amortization of acquired intangibles.
Operating Margin and Adjusted Operating Margin 4 - Overall The increase in our 2025 GAAP operating margin and Adjusted Operating Margin 4 was primarily driven by net savings generated from our NextGen program, operational efficiencies and the beneficial impact of foreign currency exchange rate movements, partially offset by increased compensation costs and the dilutive impact of the acquisition of Belcan.
We help clients modernize technology, reimagine processes and transform experiences so they can stay ahead in today's fast-changing world, where AI is beginning to reshape organizations in every field. We provide industry expertise and close client collaboration, combining critical perspective with a flexible engagement style.
We help clients modernize technology, reimagine processes and transform experiences so they can stay ahead in today's fast-changing world, where AI is reshaping organizations in every field.
We have a Credit Agreement providing for a $650 million Term Loan and a $1,850 million unsecured revolving credit facility, which are each due to mature in October 2027.
See “Non-GAAP Financial Measures” for more information. Cognizant 36 December 31, 2025 Form 10-K Table of Contents We have a Credit Agreement providing for a $650 million Term Loan and a $1,850 million unsecured revolving credit facility, which are each due to mature in October 2027.
The following table provides a summary of our cash flows for the years ended December 31: (in millions) 2024 2023 Increase / Decrease Net cash provided by (used in): Operating activities $ 2,124 $ 2,330 $ (206) Investing activities (1,646) (331) (1,315) Financing activities (915) (1,609) 694 Other Cash Flow Information 6 Free cash flow 1,827 2,013 (186) Operating activities 6 The decrease in cash provided by operating activities in 2024 compared to 2023 was primarily driven by the $360 million payment made in relation to our dispute with the ITD in January 2024 (see Note 11 to our consolidated financial statements).
The following table provides a summary of our cash flows for the years ended December 31: (in millions) 2025 2024 Increase / Decrease Net cash provided by (used in): Operating activities $ 2,883 $ 2,124 $ 759 Investing activities (230) (1,646) 1,416 Financing activities (2,272) (915) (1,357) Other Cash Flow Information 5 Free cash flow 2,665 1,827 838 Operating activities 5 The increase in cash provided by operating activities in 2025 compared to 2024 was primarily driven by the increase in net income, excluding the one-time, non-cash income tax expense of $390 million we recorded as a result of the enactment of the OBBBA, as well as the $360 million payment we made in January 2024 in relation to our dispute with the ITD (see Note 10 to our consolidated financial statements), which reduced cash from operating activities in 2024.
Depreciation and Amortization Expense Depreciation and amortization expense increased by 1.9%, and was flat as a percentage of revenues, in 2024 as compared to 2023. The increase in amortization expense driven by intangible assets related to our recently completed acquisitions was partially offset by the decline of depreciation expense, which was driven by actions taken under our NextGen program.
The increase in amortization expense, driven by intangible assets related to our acquisition of Belcan, was partially offset by the decline of depreciation expense, which was driven by actions taken under our NextGen program.
Changes to these estimates could have a material effect on our results of operations and financial condition. Our significant accounting policies are described in Note 1 to our consolidated financial statements. Revenue Recognition .
Changes to these estimates could have a material effect on our results of operations and financial condition. Our significant accounting policies are described in Note 1 to our consolidated financial statements. 6 Free cash flow is not a measure of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information.
Liquidity and Capital Resources Cash generated from operations has historically been our primary source of liquidity to fund operations and investments t o grow our business. As of December 31, 2024, we had cash, cash equivalents and short-term investments of $2,243 million. Additionally, as of December 31, 2024, we had available capacity under our credit facilities of approximately $1.55 billion.
Liquidity and Capital Resources Cash generated from operations has historically been our primary source of liquidity to fund operations and investments t o grow our business. As of December 31, 2025, we had cash, cash equivalents and short-term investme nts of $1,914 million and restricted cash of $733 million (see Note 18 to our consolidated financial statements).
As of December 31, 2024, our goodwill balance was $6,953 million. We review our finite-lived assets, including our finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.
We review our finite-lived assets, including our finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. The carrying amount may not be recoverable when the sum of undiscounted expected future cash flows is less than the carrying amount of such asset groups.
Under the market approach, we estimate fair value based on market multiples of revenues and earnings derived from comparable publicly-traded companies with characteristics similar to the reporting unit. The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions and other factors.
Under the market approach, we estimate fair value based on market multiples of revenues and earnings derived from comparable publicly-traded companies with characteristics Cognizant 38 December 31, 2025 Form 10-K Table of Contents similar to the reporting unit.
We increasingly use AI-based technologies, including GenAI, in our client offerings and our own internal operations. AI technologies and services are part of a highly competitive and rapidly evolving market. We plan to make significant investments in our AI capabilities to meet the needs of our clients and harness AI's value in a flexible, secure, scalable and responsible way.
We plan to continue to make significant investments in our AI capabilities to meet the needs of our clients and harness AI's value in a flexible, secure, scalable and responsible way.
We are currently evaluating the potential impact of the amendment, which, depending on its final terms when entered into force, could increase our effective income tax rate, as CTS India is a subsidiary of our wholly-owned Mauritius entity. For additional information, see Part I, Item 1A. Risk Factors. During the third quarter of 2024, we completed the acquisition of Belcan.
In addition, in March 2024, India and Mauritius signed a Protocol to amend the India-Mauritius Income Tax Treaty. We continue to evaluate the potential impact of the amendment, which, depending on its final terms when entered into force, could increase our effective income tax rate, as CTS India is a subsidiary of our wholly-owned Mauritius entity.
In addition, our 2024 and 2023 GAAP operating margins were negatively impacted by the NextGen charges, as discussed in Note 4 to our consolidated financial statements, which were excluded from our Adjusted Operating Margin 5 . 5 Adjusted Income From Operations and Adjusted Operating Margin are not measurements of financial performance prepared in accordance with GAAP.
In addition, our GAAP operating margin for 2025 was positively impacted by 30 basis points, or $62 million, from the gain on sale of property and equipment, and our GAAP operating margin for 2024 was negatively impacted by NextGen charges, both of which were excluded from our Adjusted Operating Margin. 4 4 Adjusted Income From Operations and Adjusted Operating Margin are not measures of financial performance prepared in accordance with GAAP.
Financing activities The decrease in cash used in financing activities in 2024 compared to 2023 was primarily driven by lower repurchases of common stock and net borrowings under the revolving credit facility to finance the Belcan acquisition.
Financing activities The increase in cash used in financing activities in 2025 compared to 2024 was primarily driven by increased repurchases of common stock during 2025 and the borrowing under the revolving credit facility to finance the acquisition of Belcan in 2024. 5 Free cash flow is not a measure of financial performance prepared in accordance with GAAP.
See Note 4 to our consolidated financial statements. 2024 Financial Results 1 Revenues Income from Operations Operating Margin Diluted EPS GAAP Adjusted 1 GAAP Adjusted 1 GAAP Adjusted 1 Revenue up $383 million or 2.0% from 2023; an increase of 1.9% in constant currency 1 Income from Operations up $203 million or 7.5% from 2023 Adjusted Income from Operations 1 up $108 million or 3.7% from 2023 Operating margin up 80 basis points from 2023 Adjusted Operating Margin 1 up 20 basis points from 2023 Diluted EPS up $0.30 or 7.1% from 2023 Adjusted Diluted EPS 1 up $0.20 or 4.4% from 2023 During the year ended December 31, 2024, revenues increased by $383 million as compared to the year ended December 31, 2023, representing an increase of 2.0%, or 1.9% on a constant currency basis 1 .
Our services include consulting, application development, systems integration, quality engineering and assurance, engineering research and development, application maintenance, infrastructure and security as well as business process services and automation. 2025 Financial Results 1 Revenues Income from Operations Operating Margin Diluted EPS GAAP Adjusted 1 GAAP Adjusted 1 GAAP Adjusted 1 Revenue up $1,372 million or 7.0% from 2024; an increase of 6.4% in constant currency 1 Income from Operations up $497 million or 17.2% from 2024 Adjusted Income from Operations 1 up $301 million or 9.9% from 2024 Operating margin up 140 basis points from 2024 Adjusted Operating Margin 1 up 50 basis points from 2024 Diluted EPS up $0.05 or 1.1% from 2024 Adjusted Diluted EPS 1 up $0.53 or 11.2% from 2024 During the year ended December 31, 2025, revenues increased by $1,372 million as compared to the year ended December 31, 2024, representing an increase of 7.0%, or 6.4% on a constant currency basis 1 .
Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit. Cognizant 38 December 31, 2024 Form 10-K Table of Contents Based on our most recent evaluation of goodwill performed during the fourth quarter of 2024, we concluded that the goodwill in each of our reporting units was not at risk of impairment.
Based on our most recent evaluation of goodwill performed during the fourth quarter of 2025, we concluded that the goodwill in each of our reporting units was not at risk of impairment. As of December 31, 2025, our goodwill balance was $7,106 million.
Our 2024 GAAP and Adjusted Operating Margins were positively impacted by net savings generated from our NextGen program and the beneficial impact of foreign currency exchange rate movements, while being negatively impacted by increased compensation costs, primarily as a result of a merit increase cycle completed during the third quarter of 2024, and the dilutive impact of recently completed acquisitions, primarily driven by transaction and integration related expenses and amortization of acquired intangibles.
Our 2025 GAAP and Adjusted Operating Margins were positively impacted by net savings generated from our NextGen program, operational efficiencies and the beneficial impact of foreign currency exchange rate movements, partially offset by increased compensation costs and the dilutive impact of the acquisition of Belcan.
Investing activities The increase in cash used in investing activities in 2024 compared to 2023 was primarily driven by higher payments for business combinations as well as lower net maturities of investments in 2024.
Investing activities The decrease in cash used in investing activities in 2025 compared to 2024 was driven by payments for business acquisitions in 2024 and the proceeds from the sale of an office complex in India in 2025, partially offset by net maturities of investments in 2024.
Assessing the fair value of asset groups involves significant estimates and assumptions including estimation of future cash flows, the timing of such cash flows and discount rates reflecting the risk inherent in future cash flows. Recently Adopted and New Accounting Pronouncements See Note 1 to our consolidated financial statements for additional information.
The impairment loss is determined as the amount by which the carrying amount of the asset group exceeds its fair value. Assessing the fair value of asset groups involves significant estimates and assumptions including estimation of future cash flows, the timing of such cash flows and discount rates reflecting the risk inherent in future cash flows.
Total segment operating profit was as follows for the year ended December 31: (Dollars in millions) 2024 % of Revenues 2023 % of Revenues Increase / (Decrease) Total segment operating profit $ 4,156 21.1 $ 4,117 21.3 $ 39 Less: unallocated costs 1,264 6.4 1,428 7.4 (164) Income from operations $ 2,892 14.7 $ 2,689 13.9 $ 203 The decrease in unallocated costs for 2024 as compared to 2023 was primarily driven by lower corporate expenses as well as lower NextGen charges of $134 million in 2024 as compared to $229 million in 2023 (see Note 4 to our consolidated financial statements).
Total segment operating profit was as follows for the year ended December 31: (Dollars in millions) 2025 % of Revenues 2024 % of Revenues Increase / (Decrease) Total segment operating profit $ 3,485 16.5 $ 3,152 16.0 $ 333 Less: unallocated costs 96 0.4 260 1.3 (164) Income from operations $ 3,389 16.1 $ 2,892 14.7 $ 497 The decrease in unallocated costs for 2025 as compared to 2024 was primarily driven by the 2025 gain on sale of property and equipment and the absence of NextGen charges, partially offset by higher amortization of intangible assets and certain corporate costs.
Revenues related to fixed-price contracts for application development and systems integration services, consulting or other technology services are recognized as the service is performed using the cost-to-cost method, 7 Free cash flow is not a measurement of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information.
Revenues related to fixed-price contracts for application development and systems integration services, consulting or other technology services are recognized as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized on the basis of the percentage that each contract’s total labor cost to-date bears to the total expected labor costs.
As a global professional services company, we compete on the basis of the knowledge, experience, insights, skills and talent of our employees and the value they can provide to our clients. We closely monitor attrition trends focusing on the metric that we believe is most relevant to our business.
See “Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measures. Cognizant 28 December 31, 2025 Form 10-K Table of Contents As a global professional services company, we compete on the basis of the knowledge, experience, insights, skills and talent of our employees and the value they can provide to our clients.
The income tax impact of each item excluded from Adjusted Diluted EPS is calculated by applying the statutory rate and local tax regulations in the jurisdiction in which the item was incurred. Constant currency revenue growth is defined as revenues for a given period restated at the comparative period’s foreign currency exchange rates measured against the comparative period's reported revenues.
For further detail on the NextGen charges, see Note 4 to our consolidated financial statements. The income tax impact of each item excluded from Adjusted Diluted EPS is calculated by applying the statutory rate and local tax regulations in the jurisdiction in which the item was incurred.
See “Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measures. Cognizant 28 December 31, 2024 Form 10-K Table of Contents Our operating margin and Adjusted Operating Margin 2 increased to 14.7% and 15.3%, respectively, for the year ended December 31, 2024, from 13.9% and 15.1%, respectively, for the year ended December 31, 2023.
Our operating margin and Adjusted Operating Margin 1 increased to 16.1% and 15.8%, respectively, for the year ended December 31, 2025, from 14.7% and 15.3%, respectively, for the year ended December 31, 2024.
We continue to expect the focus of our clients to be on their transformation into AI-ready, technology-driven, data-enabled, customer-centric and differentiated businesses. To support this transformation and drive greater business resiliency, we expect clients will continue to demand services and solutions that can enhance productivity and deliver cost savings.
Business Outlook See "Overview" within Part I, Item 1. Business for information on our strategic approach. We continue to expect our clients' focus to be on their transformation into AI-ready, technology-driven, data-enabled, customer-centric and differentiated businesses.
Additionally, revenues were positively impacted by growth in our Health Sciences segment, partially offset by weakness primarily in our Products and Resources (excluding the impact of our recently completed acquisitions) and Financial Services segments. 1 Adjusted Income From Operations, Adjusted Operating Margin, Adjusted Diluted EPS and constant currency revenue growth are not measurements of financial performance prepared in accordance with GAAP.
In addition, our GAAP operating margin for 2025 was positively impacted by 30 basis points, or $62 million, from the gain on sale of property and equipment, and our GAAP operating margin for 2024 was negatively impacted by NextGen charges, both of which were excluded from our Adjusted Operating Margin 1 . 1 Adjusted Income From Operations, Adjusted Operating Margin, Adjusted Diluted EPS and constant currency revenue growth are not measures of financial performance prepared in accordance with GAAP.
Restructuring charges were $134 million or 0.7%, as a percentage of revenues for the year ended December 31, 2024, as compared to $229 million or 1.2%, as a percentage of revenue, for the year ended December 31, 2023. For further detail on our restructuring charges see Note 4 to our consolidated financial statements.
For further detail see Note 5 to our consolidated financial statements. Depreciation and Amortization Expense Depreciation and amortization expense increased by 4.0%, and remained relatively flat as a percentage of revenues, in 2025 as compared to 2024.
For the year ended December 31, 2024 our Voluntary Attrition - Tech Services was 15.9% as compared to 13.8% for the year ended December 31, 2023. We finished 2024 with approximately 336,800 employees as compared to 347,700 employees at the end of 2023. Business Outlook See "Overview" within Part I, Item 1. Business for information on our strategic approach.
We closely monitor attrition trends focusing on the metric that we believe is most relevant to our business. For the year ended December 31, 2025 our Voluntary Attrition - Tech Services was 13.9% as compared to 15.9% for the year ended December 31, 2024.
Net Income The increase in net income was driven by the increase in income from operations. é $114M é 0.3% as a % of revenues ¡ % of Revenues Cognizant 34 December 31, 2024 Form 10-K Table of Contents Non-GAAP Financial Measures Portions of our disclosure include non-GAAP financial measures.
Net Income The decrease in net income was primarily driven by the one-time, non-cash income tax expense of $390 million related to the enactment of the OBBBA, partially offset by an increase in income from operations, including the $62 million gain on sale of property and equipment. ê $10M ê 0.7% as a % of revenues ¡ % of Revenues Non-GAAP Financial Measures Portions of our disclosure include non-GAAP financial measures.
As of December 31, 2024, we had $300 million outstanding on the revolving credit facility, consisting of a Term Benchmark loan with a maturity of October 2027 and an Interest Period (as defined in the Credit Agreement) of one month.
During the year ended December 31, 2025, we repaid the $300 million balance that was outstanding under the revolving credit facility, and had no outstanding balance as of December 31, 2025. We are required under the Credit Agreement to make scheduled quarterly principal payments on the Term Loan.
Removed
Our collaborative services include digital services and solutions, consulting, application development, systems integration, quality engineering and assurance, engineering research and development, application maintenance, infrastructure and security as well as business process services and automation. Digital, AI-enhanced services continue to be an important part of our portfolio, aligning with our clients' focus on becoming data-enabled, customer-centric and differentiated businesses.
Added
As an AI builder, we provide deep expertise at the intersection of industry and technology, combining our perspective with extensive knowledge of our clients' organizations to build industry-specific platforms and incorporate context into systems, AI models and custom solutions.
Removed
At the end of 2024, we completed our NextGen program, which was aimed at simplifying our operating model, optimizing corporate functions and consolidating and realigning office space to reflect the post-pandemic hybrid work environment. The savings generated by the program are funding continued investments in our people, revenue growth opportunities and the modernization of our office space.
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Our acquisition of Belcan contributed 260 basis points to revenue growth. Additionally, revenues were positively impacted by growth in our Health Sciences and Financial Services segments, partially offset by weakness in our Products and Resources (excluding the acquisition of Belcan) and Communications Media and Technology segments.
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In 2024, we incurred $134 million of employee separation, facility exit and other costs related to the program, bringing the total costs incurred since inception to $363 million.
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We finished 2025 with approximately 351,600 employees as compared to 336,800 employees at the end of 2024. In July 2025, the OBBBA was enacted in the United States, which, among other provisions, repealed the requirement to capitalize U.S. R&E costs.
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Our recently completed acquisitions contributed 200 basis points to revenue growth.
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As a result, we do not believe it is more likely than not that we will realize our deferred tax asset of $390 million related to R&E costs capitalized outside the United States.
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In addition, our GAAP operating margins for 2024 and 2023, were negatively impacted by the NextGen charges, as discussed in Note 4 to our consolidated financial statements, which were excluded from our Adjusted Operating Margin.
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These amounts would have otherwise been available to offset certain future U.S. taxes on our non-U.S. earnings, which, as a result of this repeal, we no longer project to be applicable to us. Therefore, in the third quarter of 2025, we recorded a one-time, non-cash income tax expense of $390 million.
Removed
Potential tax law and other regulatory changes, including possible U.S. corporate income tax reform and the Code on Social Security, 2020 in India, among other items, may impact our future results.
Added
This impacted our full year 2025 GAAP diluted EPS by $0.80, which is added back for the calculation of Adjusted EPS. Other than this impact, we do not expect the OBBBA to significantly impact our effective income tax rate.
Removed
We expect that the Code on Social Security, 2020, if enacted as currently written, could result in a material one-time increase to our post-employment liability for past service and would also modestly increase our costs for employment and post-employment benefits prospectively. In addition, in March 2024, India and Mauritius signed a Protocol to amend the India-Mauritius Income Tax Treaty.
Added
Additionally, as a result of this repeal, our cash taxes during 2025 were reduced by approximately $200 million as compared to our initial cash tax projections prior to the repeal. These assessments are based upon our current interpretation of the OBBBA, which may change as a result of future clarifications or guidance.
Removed
See Note 3 to our consolidated financial statements. This acquisition is expected to have a modest near-term dilutive impact to our 2025 operating margin, primarily due to integration-related expenses and amortization of acquired intangibles. 2 Adjusted Operating Margin is not a measurement of financial performance prepared in accordance with GAAP.
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The Government of India implemented labor law reforms effective November 21, 2025, including the Code on Social Security, 2020.
Removed
See “Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measures.
Added
As a result, during the fourth quarter of 2025, we recorded a one-time increase to our defined benefit liability for past service of $147 million, in "Other noncurrent liabilities" in our consolidated statement of financial position with a corresponding increase in "Accumulated other comprehensive income (loss)". Additionally, we anticipate a modest increase in our defined benefit costs prospectively.
Removed
Clients in our Financial Services, Products and Resources, and Communications, Media and Technology segments were particularly affected; • Revenue decline in our United Kingdom region was primarily driven by weakness in the Communications, Media and Technology and Financial Services segments; and • Revenue decline in our Rest of World region was primarily driven by weakness in the Products and Resources and Financial Services segments. 4 Constant currency revenue growth is not a measure of financial performance prepared in accordance with GAAP.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2024, we had $300 million outstanding on the revolving credit facility, consisting of a Term Benchmark loan with a maturity of October 2027 and an Interest Period (as defined in the Credit Agreement) of one month. Thus, our debt exposes us to market risk from changes in interest rates.
Biggest changeAs of December 31, 2025 we had no outstanding balance under our revolving credit facility. The Term Loan is a Term Benchmark loan. Thus, our debt exposes us to market risk from changes in interest rates. We performed a sensitivity analysis to determine the effect of interest rate fluctuations on our interest expense.
These foreign currency exchange rate fluctuations have an impact on our results of operations. We have entered into a series of foreign exchange forward and option contracts that are designated as cash flow hedges of certain Indian rupee denominated payments in India.
These foreign currency exchange rate fluctuations have an impact on our results of operations. We have entered into a series of foreign exchange forward contracts that are designated as cash flow hedges of certain Indian rupee denominated payments in India.
As of December 31, 2024, a 100 basis point change in interest rates, with all other variables held constant, would have an immaterial effect on the fair value of our cash equivalents as well as short-term investments.
As of December 31, 2025, a 100 basis point change in interest rates, with all other variables held constant, would have an immaterial effect on the fair value of our cash equivalents as well as short-term investments.
Based upon a sensitivity analysis at December 31, 2024, which estimates the fair value of the contracts assuming certain market exchange rate fluctuations, a 10.0% change in the foreign currency exchange rate against the U.S. dollar with all other variables held constant would have resulted in a change in the fair value of our foreign exchange forward contracts designated as cash flow hedges of approximately $277 million.
Based upon a sensitivity analysis at December 31, 2025, which estimates the fair value of the contracts assuming certain market exchange rate fluctuations, a 10.0% change in the foreign currency exchange rate against the U.S. dollar with all other variables held constant would have resulted in a change in the fair value of our foreign exchange forward contracts designated as cash flow hedges of approximately $310 million.
All hedging transactions are authorized and executed pursuant to regularly reviewed policies and procedures. Revenues from our clients in the United Kingdom, Continental Europe and Rest of World represented 9.2%, 9.8% and 6.5%, respectively, of our 2024 revenues, and are typically denominated in currencies other than the U.S. dollar.
All hedging transactions are authorized and executed pursuant to regularly reviewed policies and procedures. Revenues from our clients in the United Kingdom, Continental Europe and Rest of World represented 9.1%, 9.9% and 6.2%, respectively, of our 2025 revenues, and are typically denominated in currencies other than the U.S. dollar.
As of December 31, 2024, The Credit Agreement requires interest to be paid, at our option, at either the Term Benchmark, Adjusted Daily Simple RFR or the ABR Rate (each as defined in the Credit Agreement), plus, in each case, an Applicable Margin (as defined in the Credit Agreement). The Term Loan is a Term Benchmark loan.
As of December 31, 2025, the Credit Agreement requires interest to be paid, at our option, at either the Term Benchmark, Adjusted Daily Simple RFR or the ABR Rate (each as defined in the Credit Agreement), plus, in each case, an Applicable Margin (as defined in the Credit Agreement).
Accordingly, our revenues may be affected by fluctuations in the exchange rates, primarily the British pound and the Eur o, a s compared to the U.S. dollar. A predominant portion of our costs in India are denominated in the Indian rupee, representing 24% of our global operating costs during 2024, and are subject to foreign currency exchange rate fluctuations.
Accordingly, our revenues may be affected by fluctuations in the exchange rates, primarily the British pound and the Euro , a s compared to the U.S. dollar. A predominant portion of our costs in India are denominated in the Indian rupee, representing 23% of our global operating costs during 2025, and are subject to foreign currency exchange rate fluctuations.
In 2024, we reported foreign currency exchange losses, exclusive of hedging gains, of approximately $29 million, which were primarily attributed to the remeasurement of net monetary assets and liabilities denominated in currencies other than the functional currencies of our subsidiaries.
In 2025, we reported foreign currency exchange gains, exclusive of hedging gains, of $15 million, which were primarily attributed to the remeasurement of net monetary assets and liabilities denominated in currencies other than the functional currencies of our subsidiaries.
Based upon a sensitivity analysis of our foreign exchange forward contracts at December 31, Cognizant 39 December 31, 2024 Form 10-K Table of Contents 2024, which estimates the fair value of the contracts assuming certain market exchange rate fluctuations, a 10.0% change in the foreign currency exchange rate against the U.S. dollar with all other variables held constant would have resulted in a change in the fair value of our foreign exchange forward contracts not designated as hedges of approximately $30 million.
Based upon a sensitivity analysis of our foreign exchange forward contracts at December 31, 2025, which estimates the fair value of the contracts assuming certain market exchange rate fluctuations, a 10.0% change in the foreign currency exchange rate against the U.S. dollar with all other variables held constant would have resulted in a change in the fair value of our foreign exchange forward contracts not designated as hedges of approximately $4 million.
We use foreign exchange forward contracts that are scheduled to mature in the first quarter of 2025 to provide an economic hedge against balance sheet exposure to certain monetary assets and liabilities denominated in currencies other than the functional currency of the subsidiary.
We use foreign exchange Cognizant 39 December 31, 2025 Form 10-K Table of Contents forward contracts that are scheduled to mature in the first quarter of 2026 to provide an economic hedge against balance sheet exposure to certain monetary assets and liabilities denominated in currencies other than the functional currency of the subsidiary.
At December 31, 2024, the notional value of these outstanding contracts was $489 million and the net unrealized loss was $1 million.
At December 31, 2025, the notional value of these outstanding contracts was $748 million and the net unrealized gain was $1 million.
As of December 31, 2024, the notional value and weighted average contract rates of these contracts by year of maturity were as follows: Notional Value (in millions) Weighted Average Contract Rate (Indian rupee to U.S. dollar) 2025 $ 2,010 85.8 2026 920 87.5 Total $ 2,930 86.3 As of December 31, 2024, the net unrealized loss on our outstanding foreign exchange forward and option contracts designated as cash flow hedges was $34 million.
As of December 31, 2025, the notional value and weighted average contract rates of these contracts by year of maturity were as follows: Notional Value (in millions) Weighted Average Contract Rate (Indian rupee to U.S. dollar) 2026 $ 2,290 88.6 2027 1,020 91.7 Total $ 3,310 89.5 As of December 31, 2025, the net unrealized loss on our outstanding foreign exchange forward contracts designated as cash flow hedges was $84 million.
We performed a sensitivity analysis to determine the effect of interest rate fluctuations on our interest expense. A 100 basis point change in interest rates, with all other variables held constant, would have an immaterial effect on our reported interest expense. We have $1,031 million of cash equivalents, and $12 million of short-term investments as of December 31, 2024.
A 100 basis point change in interest rates, with all other variables held constant, would have an immaterial effect on our reported interest expense. We have $207 million of cash equivalents, and $13 million of short-term investments as of December 31, 2025.

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