Cognizant (CTSH) Q2 2026: Buybacks Lift EPS, Profit Dips 1.4%
Cognizant's revenue disaggregation answers the question the AI debate keeps circling: billable-hours revenue is shrinking. Time-and-materials revenue fell 1.5% to $2,305 million in the second quarter while fixed-price revenue rose 11.5% to $2,690 million — the fixed-price line alone added $277 million, more than the company's entire $236 million revenue gain, because both time-and-materials and transaction-based work went backwards. Headcount grew 3.8% to roughly 356,700, yet revenue per employee rose only 0.7%, so the top line is still being bought with people rather than earned through productivity. Diluted EPS rose 3.8% to $1.36, but net income actually fell 1.4% to $636 million; the entire per-share gain came from a 5.3% reduction in the share count.
1. Consolidated Statements of Financial Position
1-1. Principal asset movements
| Item | Dec 31, 2025 ($M) | Jun 30, 2026 ($M) | Change % |
|---|---|---|---|
| Cash and cash equivalents | 1,901 | 1,038 | -45.4 |
| Trade accounts receivable, net | 4,439 | 4,780 | +7.7 |
| Other current assets | 1,465 | 1,728 | +18.0 |
| Property and equipment, net | 933 | 981 | +5.1 |
| Goodwill | 7,106 | 8,083 | +13.7 |
| Intangible assets, net | 1,417 | 1,675 | +18.2 |
| Deferred income tax assets, net | 967 | 764 | -21.0 |
| Other noncurrent assets | 1,767 | 1,102 | -37.6 |
| Total assets | 20,692 | 20,825 | +0.6 |
Source: Form 10-Q for the quarter ended June 30, 2026, unaudited consolidated statements of financial position.
Total assets barely moved, but the composition changed materially. Two acquisitions closed in the period: 3Cloud, an independent Microsoft Azure services provider, on January 1 for $728 million, and Astreya Partners, an AI-first IT managed services provider, on June 22 for $665 million including $25 million of contingent consideration (a $634 million figure appears in management's discussion because it is stated net of $31 million of cash acquired). Of the combined $1,393 million purchase price, $1,003 million — 72.0% — was allocated to goodwill and a further $383 million to intangibles, principally customer relationship assets with a 9.2-year weighted average life. Tangible net assets acquired were negligible.
