Cash conversion efficiency remains highly volatile, as evidenced by a $705 million working capital outflow in 2026Q1 that significantly impacted the company's ability to generate consistent free cash flow.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 |
|---|
| Cash from Operations | 2.76B | 2.88B | 2.12B | 2.33B | 2.57B | 2.5B | 3.3B | 2.5B | 2.59B | 2.41B | 1.62B | 2.15B | 1.47B | 1.42B | 1.17B | 875.15M | 764.65M | 672.33M | 429.7M | 344.32M | 252.88M | 159.76M | 127.33M | 79.86M | 56.68M | 32.08M | 30.22M | 18.6M | 13.4M |
| Operating CF Margin % | - | 13.66% | 10.76% | 12.04% | 13.22% | 13.48% | 19.81% | 14.89% | 16.07% | 16.25% | 12.02% | 17.34% | 14.35% | 16.1% | 15.96% | 14.3% | 16.65% | 20.51% | 15.26% | 16.12% | 17.75% | 18.04% | 21.7% | 21.69% | 24.74% | 18.04% | 22.05% | 20.92% | 22.87% |
| Operating CF Growth % | 58.53% | 35.73% | -8.84% | -9.27% | 2.93% | -24.37% | 32.01% | -3.59% | 7.69% | 48.49% | -24.72% | 46.18% | 3.46% | 21.42% | 33.99% | 14.45% | 13.73% | 56.46% | 24.8% | 36.16% | 58.28% | 25.47% | 59.44% | 40.89% | 76.7% | 6.15% | 62.47% | 38.81% | - |
| Net Income | 2.23B | 2.23B | 2.24B | 2.13B | 2.29B | 2.14B | 1.39B | 1.84B | 2.1B | 1.5B | 1.55B | 1.62B | 1.44B | 1.23B | 1.05B | 883.62M | 733.54M | 534.96M | 430.85M | 350.13M | 232.79M | 166.27M | 100.24M | 57.37M | 34.56M | 22.16M | 17.68M | 11.2M | 6M |
| Depreciation & Amortization | 555M | 550M | 529M | 519M | 569M | 574M | 559M | 526M | 498M | 443M | 379M | 330M | 208.1M | 179.93M | 156.59M | 124.17M | 110.17M | 89.37M | 74.8M | 53.92M | 34.16M | 21.4M | 16.45M | 11.94M | 7.84M | 6.37M | 4.51M | 3M | 2.2M |
| Stock-Based Compensation | 185M | 181M | 0 | 0 | 261M | 246M | 232M | 217M | 267M | 221M | 0 | 0 | 0 | 0 | 107.36M | 90.23M | 56.98M | 13.26M | 26.91M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 384M | 327M | -355M | -339M | -273M | 27M | 184M | -306M | 8M | 124M | -91M | -126M | -99.6M | -88.19M | -117.91M | -8.6M | -51.91M | -26.59M | -5.03M | 25.06M | -2.28M | -47.34M | -22.33M | -622K | 12K | 7.79M | 6.34M | 4.3M | 3.5M |
| Other Non-Cash Items | 20M | -67M | 220M | 213M | 45M | -1M | 119M | 119M | 125M | -71M | 251M | 217M | 146.2M | 144.33M | -40.8M | 11.48M | -73.57M | -2.75M | 11.06M | -2.79M | 33.76M | 51.33M | 37.33M | 24.41M | 12.62M | 8.43M | 1.83M | -100K | 200K |
| Working Capital Changes | -616M | -338M | -510M | -189M | -324M | -488M | 813M | 101M | -407M | 186M | -471M | 108M | -221M | -40.87M | 16.08M | -225.75M | -10.57M | 64.07M | -108.88M | -82M | -45.56M | -31.9M | -4.36M | -13.23M | 1.65M | -12.66M | -141K | 200K | 1.5M |
| Change in Receivables | -332M | -366M | -49M | -43M | -238M | -407M | 264M | 37M | -365M | -249M | -330M | -322M | -259.3M | -258.47M | -158.6M | -284.17M | -278.42M | -98.45M | -168.4M | -119.88M | -102.33M | -55.83M | -42.74M | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 14M | -2M | -23M | -23M | -11M | -35M | 109M | 8M | -4M | 16M | 6M | 19M | 25.7M | -12.12M | 32.77M | -8.59M | 18.6M | 6.67M | 19.28M | 10.55M | 10.82M | 2.21M | 1.55M | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -1.03B | -230M | -1.65B | -331M | -106M | -2.16B | -1.24B | 1.59B | -1.63B | -582M | -963M | -1.37B | -3.16B | -730.76M | -570.05M | -850.28M | -446.89M | -394.76M | -55.01M | -277.34M | -272.34M | -204.55M | -112.69M | -37.81M | -35.46M | -14.95M | -12.61M | -5.9M | -3.7M |
| Capital Expenditures | -287M | -288M | -297M | -317M | -332M | -279M | -398M | -392M | -377M | -284M | -300M | -272.8M | -212.2M | -261.63M | -334.46M | -288.22M | -185.51M | -76.64M | -169.41M | -182.47M | -104.73M | -71.77M | -46.58M | -29.99M | -22.27M | -14.95M | -10.65M | -5.9M | -3.7M |
| CapEx % of Revenue | 1.34% | 1.36% | 1.5% | 1.64% | 1.71% | 1.51% | 2.39% | 2.34% | 2.34% | 1.92% | 2.22% | 2.2% | 2.07% | 2.96% | 4.55% | 4.71% | 4.04% | 2.34% | 6.02% | 8.54% | 7.35% | 8.1% | 7.94% | 8.14% | 9.72% | 8.41% | 7.77% | 6.64% | 6.31% |
| Acquisitions | -730M | 70M | -1.61B | -409M | -339M | -970M | -1.12B | -617M | -1.11B | -216M | 0 | -1.7M | -2.69B | -193.81M | -59.89M | -82.8M | -33.86M | -68.61M | -20.96M | -146.82M | -14.77M | -19.81M | -1.5M | -7.82M | 0 | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 12M | 12M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -334M | -300K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -13.2M | 0 | -1.96M | 0 | 0 |
| Cash from Financing | -2.21B | -2.27B | -915M | -1.61B | -1.94B | -1.2B | -2.01B | -2.57B | -1.69B | -1.99B | -719M | -648.1M | 1.5B | -30.87M | -342.99M | -255.46M | 120M | 76.95M | 44.03M | 4.01M | 82.89M | 47.45M | 36.77M | 21.78M | 20.04M | 5.98M | 1.76M | 1.6M | 16.1M |
| Debt Issued (Net) | -41M | -342M | 227M | -25M | -39M | -53M | -50M | -28M | -145M | -20M | -407M | -353M | 1.63B | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -1.75M | 0 | 0 | 0 | 0 | -8K | 0 | 0 | -6.6M |
| Equity Issued (Net) | -1.56B | -1.32B | -542M | -993M | -1.34B | -641M | -1.48B | -2.09B | -1.08B | -1.7B | -336M | -329M | -146.9M | -61.45M | -391.36M | -294.6M | 48.08M | 45.39M | 27.04M | -38.26M | 51.4M | 47.45M | 36.77M | 24.74M | 20.04M | 5.99M | 1.75M | 1.6M | 22.5M |
| Dividends Paid | -614M | -610M | -600M | -591M | -564M | -509M | -480M | -453M | -468M | -265M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -1.61B | -1.38B | -605M | -1.06B | -1.42B | -771M | -1.62B | -2.25B | -1.26B | -1.89B | -512M | -460M | -248.32M | -179M | -520.85M | -374.15M | -59M | -16.26M | -27.84M | -105.36M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -800K |
| Other Financing | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 24M | 34M | 23.6M | 30.58M | 48.37M | 39.14M | 71.92M | 31.56M | 16.99M | 42.27M | 33.25M | 0 | 0 | -2.96M | 0 | 0 | 8K | 0 | 200K |
| Net Change in Cash | -370M | 403M | -547M | -404M | 399M | -888M | 35M | 1.48B | -764M | -109M | -91M | 114.9M | -202.91M | 951.62M | -24.61M | -187.27M | 372.34M | 381.06M | 380.02M | 73.91M | 69M | 196.94M | 0 | 68.01M | 41.23M | 23M | 19.34M | 14.2M | 25.8M |
| Free Cash Flow | 2.47B | 2.6B | 1.83B | 2.01B | 2.24B | 2.22B | 2.9B | 2.11B | 2.21B | 2.12B | 1.32B | 1.88B | 1.26B | 1.16B | 838.12M | 586.93M | 579.14M | 595.69M | 260.3M | 161.85M | 148.14M | 87.99M | 80.75M | 49.87M | 34.41M | 17.13M | 19.57M | 12.7M | 9.7M |
| FCF Margin % | 11.54% | 12.29% | 9.26% | 10.4% | 11.51% | 11.97% | 17.42% | 12.55% | 13.74% | 14.33% | 9.79% | 15.15% | 12.29% | 13.14% | 11.41% | 9.59% | 12.61% | 18.17% | 9.24% | 7.58% | 10.4% | 9.93% | 13.76% | 13.54% | 15.02% | 9.63% | 14.28% | 14.29% | 16.55% |
| FCF Growth % | 15.75% | 42.04% | -9.24% | -9.97% | 0.9% | -23.61% | 37.68% | -4.88% | 4.33% | 60.71% | -29.75% | 49.15% | 8.49% | 38.66% | 42.8% | 1.34% | -2.78% | 128.85% | 60.82% | 9.26% | 68.36% | 8.96% | 61.92% | 44.91% | 100.95% | -12.48% | 54.08% | 30.93% | - |
| FCF per Share | 5.18 | 5.38 | 3.68 | 3.99 | 4.31 | 4.20 | 5.36 | 3.76 | 3.79 | 3.57 | 2.17 | 3.07 | 2.06 | 1.91 | 1.37 | 0.95 | 0.94 | 0.99 | 0.44 | 0.27 | 0.25 | 0.15 | 0.14 | 0.09 | 0.07 | 0.04 | 0.04 | 0.03 | 0.02 |
| FCF Conversion (FCF/Net Income) | 1.11x | 1.29x | 0.95x | 1.10x | 1.12x | 1.17x | 2.37x | 1.36x | 1.23x | 1.60x | 1.04x | 1.33x | 1.02x | 1.16x | 1.12x | 0.99x | 1.04x | 1.26x | 1.00x | 0.98x | 1.09x | 0.96x | 1.27x | 1.39x | 1.64x | 1.45x | 1.71x | 1.66x | 2.23x |
| Interest Paid | 0 | 0 | 53M | 40M | 15M | 7M | 25M | 25M | 21M | 21M | 16M | 14M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 1.12B | 1.25B | 813M | 625M | 745M | 870M | 597M | 587M | 845M | 579M | 559M | 481M | 402.1M | 248.23M | 127.13M | 120.54M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Discretionary IT spending volatility
According to reported financial data, CTSH exhibits significant quarterly volatility in cash conversion, with the OCF/NI ratio swinging from a low of 0.17 in 2024Q1 to a high of 4.48 in 2025Q3, highlighting a disconnect between accounting profits and the actual timing of cash inflows.
The wide variance in the OCF/NI ratio suggests that reported net income is frequently decoupled from cash generation due to the timing of milestone-based revenue recognition and working capital fluctuations. Investors should monitor whether this inconsistency reflects genuine operational friction or merely the inherent lumpiness of large-scale, fixed-price digital transformation contracts.
As reported in recent financial statements, CTSH's free cash flow margins have demonstrated extreme instability, ranging from a negligible 0.3% in 2024Q1 to a robust 21.4% in 2025Q3, indicating that the company's ability to convert revenue into discretionary cash remains highly sensitive to operational cycles.
The erratic nature of FCF margins suggests that the company's cost structure is not yet sufficiently flexible to absorb shifts in project demand without impacting cash flow. This volatility warrants further investigation into whether management's current capital allocation strategy can sustain consistent shareholder returns during periods of revenue softness.
Based on the provided cash flow statements, CTSH experienced a substantial working capital outflow of $705 million in 2026Q1, which significantly hampered cash generation and underscores the company's vulnerability to delayed client payments and inventory-like build-ups in its service delivery pipeline.
The recurring negative working capital swings, particularly in early-year periods, suggest that the company may be struggling with collection efficiency or extended payment terms demanded by large enterprise clients. This pattern implies that liquidity is frequently tied up in unbilled receivables, potentially limiting the company's agility in funding organic growth initiatives.
As evidenced by recent filings, CTSH continues to prioritize aggressive capital returns, with $444 million deployed toward share repurchases in 2026Q1 alone, even as operating cash flow remains inconsistent and subject to significant quarterly fluctuations in working capital requirements.
The decision to maintain high levels of buybacks despite volatile cash flow generation suggests a management focus on supporting EPS metrics rather than preserving cash for strategic flexibility. Investors should monitor whether this capital deployment strategy remains sustainable if the current softness in discretionary IT spending persists.
Quick answers to the most common questions about buying CTSH stock.
Cognizant Technology Solutions Corporation (CTSH) generated $2.88B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Cognizant Technology Solutions Corporation (CTSH) generated $2.60B in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Cognizant Technology Solutions Corporation (CTSH) spent $288.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Cognizant Technology Solutions Corporation (CTSH) returned $610.0M to shareholders via cash dividends and spent $1.38B on share repurchases. This shows the company's commitment to returning capital to its equity investors.