Revenue growth remains inconsistent, and gross margins have compressed to 29.6% in 2026Q1, suggesting that competitive pressures are challenging the company's ability to maintain historical profitability levels.
| 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 |
|---|
| Sales/Revenue | 21.41B | 21.11B | 19.74B | 19.35B | 19.43B | 18.51B | 16.65B | 16.78B | 16.13B | 14.81B | 13.49B | 12.42B | 10.26B | 8.84B | 7.35B | 6.12B | 4.59B | 3.28B | 2.82B | 2.14B | 1.42B | 885.83M | 586.67M | 368.23M | 229.09M | 177.78M | 137.03M | 88.9M | 58.6M |
| Revenue Growth % | 6.55% | 6.95% | 1.98% | -0.39% | 4.98% | 11.14% | -0.78% | 4.08% | 8.88% | 9.81% | 8.63% | 20.98% | 16.06% | 20.37% | 20.02% | 33.29% | 40.07% | 16.42% | 31.88% | 49.94% | 60.78% | 50.99% | 59.32% | 60.74% | 28.86% | 29.74% | 54.14% | 51.71% | - |
| Cost of Goods Sold | 14.54B | 13.99B | 12.96B | 12.66B | 12.45B | 11.6B | 10.67B | 10.63B | 9.84B | 9.15B | 8.11B | 7.44B | 6.14B | 5.27B | 4.28B | 3.54B | 2.65B | 1.85B | 1.57B | 1.21B | 787.92M | 479.92M | 319.81M | 199.72M | 122.7M | 90.85M | 70.44M | 46.2M | 31.9M |
| COGS % of Revenue | - | 66.28% | 65.66% | 65.44% | 64.07% | 62.7% | 64.08% | 63.36% | 61.01% | 61.8% | 60.12% | 59.92% | 59.84% | 59.54% | 58.24% | 57.81% | 57.8% | 56.41% | 55.85% | 56.47% | 55.32% | 54.18% | 54.51% | 54.24% | 53.56% | 51.1% | 51.4% | 51.97% | 54.44% |
| Gross Profit | 6.86B | 7.12B | 6.78B | 6.69B | 6.98B | 6.9B | 5.98B | 6.15B | 6.29B | 5.66B | 5.38B | 4.98B | 4.12B | 3.58B | 3.07B | 2.58B | 1.94B | 1.43B | 1.24B | 929.54M | 636.34M | 405.92M | 266.86M | 168.51M | 106.39M | 86.93M | 66.59M | 42.7M | 26.7M |
| Gross Margin % | 32.06% | 33.72% | 34.34% | 34.56% | 35.93% | 37.3% | 35.92% | 36.64% | 38.99% | 38.2% | 39.88% | 40.08% | 40.16% | 40.46% | 41.76% | 42.19% | 42.2% | 43.59% | 44.15% | 43.53% | 44.68% | 45.82% | 45.49% | 45.76% | 46.44% | 48.9% | 48.6% | 48.03% | 45.56% |
| Gross Profit Growth % | - | 5% | 1.33% | -4.17% | 1.12% | 15.42% | -2.73% | -2.2% | 11.12% | 5.19% | 8.1% | 20.72% | 15.21% | 16.6% | 18.81% | 33.27% | 35.59% | 14.94% | 33.77% | 46.08% | 56.77% | 52.11% | 58.37% | 58.39% | 22.38% | 30.54% | 55.96% | 59.93% | - |
| Operating Expenses | 3.51B | 3.59B | 3.89B | 4B | 4.01B | 4.08B | 3.87B | 3.7B | 3.49B | 3.18B | 3.09B | 2.83B | 2.24B | 1.9B | 1.71B | 1.45B | 1.08B | 810.73M | 726.82M | 548.02M | 377.4M | 228.3M | 149.24M | 96.19M | 61.19M | 51.31M | 40.47M | 26.1M | 17.7M |
| OpEx % of Revenue | - | 17% | 19.69% | 20.67% | 20.65% | 22.03% | 23.22% | 22.02% | 21.62% | 21.45% | 22.91% | 22.83% | 21.8% | 21.48% | 23.23% | 23.62% | 23.43% | 24.73% | 25.81% | 25.66% | 26.5% | 25.77% | 25.44% | 26.12% | 26.71% | 28.86% | 29.53% | 29.36% | 30.2% |
| Selling, General & Admin | 3.24B | 3.24B | 3.22B | 3.25B | 3.44B | 3.5B | 3.1B | 2.97B | 3.01B | 2.7B | 2.73B | 2.51B | 2.04B | 1.73B | 1.56B | 1.33B | 972.09M | 721.36M | 652.02M | 494.1M | 343.24M | 206.9M | 132.8M | 84.26M | 53.34M | 44.94M | 35.96M | 23.1M | 15.5M |
| SG&A % of Revenue | - | 15.35% | 16.33% | 16.8% | 17.72% | 18.93% | 18.62% | 17.71% | 18.65% | 18.21% | 20.25% | 20.21% | 19.85% | 19.54% | 21.2% | 21.71% | 21.17% | 22% | 23.15% | 23.14% | 24.1% | 23.36% | 22.64% | 22.88% | 23.29% | 25.28% | 26.24% | 25.98% | 26.45% |
| Research & Development | 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 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 2M | 348M | 663M | 748M | 569M | 574M | 767M | 724M | 479M | 480M | 359M | 325M | 200M | 172.2M | 149.09M | 117.4M | 103.88M | 89.37M | 74.8M | 53.92M | 34.16M | 21.4M | 16.45M | 11.94M | 7.84M | 6.37M | 4.51M | 3M | 2.2M |
| Operating Income | 3.35B | 3.53B | 2.89B | 2.69B | 2.97B | 2.83B | 2.11B | 2.45B | 2.8B | 2.48B | 2.29B | 2.14B | 1.88B | 1.68B | 1.36B | 1.14B | 861.85M | 618.49M | 516.67M | 381.52M | 258.94M | 177.62M | 117.62M | 72.31M | 45.2M | 35.62M | 26.13M | 16.6M | 9M |
| Operating Margin % | 15.66% | 16.72% | 14.65% | 13.89% | 15.28% | 15.27% | 12.7% | 14.62% | 17.37% | 16.75% | 16.97% | 17.25% | 18.37% | 18.97% | 18.53% | 18.57% | 18.77% | 18.86% | 18.35% | 17.87% | 18.18% | 20.05% | 20.05% | 19.64% | 19.73% | 20.04% | 19.07% | 18.67% | 15.36% |
| Operating Income Growth % | - | 22.03% | 7.55% | -9.4% | 5.02% | 33.68% | -13.82% | -12.42% | 12.9% | 8.39% | 6.86% | 13.64% | 12.34% | 23.24% | 19.8% | 31.86% | 39.35% | 19.71% | 35.42% | 47.34% | 45.79% | 51.01% | 62.66% | 59.99% | 26.89% | 36.33% | 57.4% | 84.44% | - |
| EBITDA | 3.91B | 4.08B | 3.43B | 3.24B | 3.54B | 3.4B | 2.67B | 2.98B | 3.3B | 2.92B | 2.67B | 2.47B | 2.09B | 1.86B | 1.52B | 1.26B | 972.02M | 707.86M | 591.47M | 435.44M | 293.11M | 199.02M | 134.07M | 84.25M | 53.04M | 41.99M | 30.64M | 19.6M | 11.2M |
| EBITDA Margin % | 18.26% | 19.32% | 17.4% | 16.76% | 18.21% | 18.37% | 16.05% | 17.75% | 20.46% | 19.74% | 19.78% | 19.91% | 20.39% | 21.01% | 20.66% | 20.59% | 21.17% | 21.59% | 21% | 20.39% | 20.58% | 22.47% | 22.85% | 22.88% | 23.15% | 23.62% | 22.36% | 22.05% | 19.11% |
| EBITDA Growth % | 8.71% | 18.78% | 5.86% | -8.28% | 4.03% | 27.2% | -10.27% | -9.7% | 12.82% | 9.6% | 7.93% | 18.11% | 12.65% | 22.38% | 20.42% | 29.69% | 37.32% | 19.68% | 35.83% | 48.56% | 47.28% | 48.45% | 59.13% | 58.84% | 26.32% | 37.06% | 56.3% | 75% | - |
| D&A (Non-Cash Add-back) | 555M | 550M | 542M | 555M | 569M | 574M | 559M | 526M | 498M | 443M | 379M | 330M | 208M | 179.9M | 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 |
| EBIT | 3.45B | 3.62B | 2.99B | 2.83B | 3.04B | 2.84B | 2.12B | 2.57B | 2.82B | 2.68B | 2.38B | 2.18B | 1.93B | 1.68B | 1.39B | 1.14B | 861.85M | 618.49M | 516.67M | 381.52M | 258.94M | 177.62M | 117.62M | 74.32M | 46.88M | 35.62M | 26.13M | 16.6M | 9M |
| Net Interest Income | 65M | 68M | 65M | 85M | 40M | 21M | 95M | 150M | 150M | 110M | 96M | 66M | 59M | 48.9M | 44.51M | 39.25M | 25.79M | 15.89M | 22.19M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 97M | 105M | 119M | 126M | 59M | 30M | 119M | 176M | 177M | 133M | 115M | 84M | 62M | 48.9M | 44.51M | 39.25M | 25.79M | 15.89M | 22.19M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 32M | 37M | 54M | 41M | 19M | 9M | 24M | 26M | 27M | 23M | 19M | 18M | 3M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | 129M | 184M | 61M | 105M | 52M | 4M | -18M | 32M | -2M | 176M | 69M | 22M | 38.89M | 10M | 26.1M | 32.68M | 16.73M | 18.46M | -1.46M | 32.83M | 18.87M | 7.66M | 4.47M | -81K | -107K | -221K | 2.12M | 1.3M | 600K |
| Pretax Income | 3.48B | 3.71B | 2.95B | 2.79B | 3.02B | 2.83B | 2.1B | 2.48B | 2.8B | 2.66B | 2.36B | 2.16B | 1.92B | 1.69B | 1.39B | 1.17B | 878.58M | 636.95M | 515.21M | 414.36M | 277.81M | 185.27M | 122.09M | 72.23M | 45.09M | 35.4M | 28.25M | 17.9M | 9.6M |
| Pretax Margin % | 16.27% | 17.59% | 14.96% | 14.44% | 15.54% | 15.29% | 12.59% | 14.81% | 17.36% | 17.94% | 17.48% | 17.43% | 18.74% | 19.09% | 18.89% | 19.1% | 19.13% | 19.43% | 18.29% | 19.4% | 19.51% | 20.92% | 20.81% | 19.62% | 19.68% | 19.91% | 20.61% | 20.14% | 16.38% |
| Income Tax | 1.25B | 1.48B | 713M | 668M | 730M | 693M | 704M | 643M | 698M | 1.15B | 805M | 540M | 484.76M | 459.3M | 336.33M | 285.53M | 145.04M | 101.99M | 84.36M | 64.22M | 45.02M | 19.01M | 21.85M | 14.87M | 10.53M | 13.24M | 10.56M | 6.7M | 3.6M |
| Effective Tax Rate % | 35.99% | 39.94% | 24.14% | 23.91% | 24.17% | 24.49% | 33.59% | 25.88% | 24.94% | 43.39% | 34.14% | 24.95% | 25.2% | 27.21% | 24.24% | 24.42% | 16.51% | 16.01% | 16.37% | 15.5% | 16.2% | 10.26% | 17.9% | 20.58% | 23.35% | 37.4% | 37.4% | 37.43% | 37.5% |
| 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 |
| Net Margin % | 10.41% | 10.56% | 11.35% | 10.99% | 11.79% | 11.55% | 8.36% | 10.98% | 13.03% | 10.16% | 11.51% | 13.08% | 14.02% | 13.89% | 14.31% | 14.44% | 15.97% | 16.32% | 15.3% | 16.4% | 16.34% | 18.77% | 17.09% | 15.58% | 15.09% | 12.46% | 12.9% | 12.6% | 10.24% |
| Net Income Growth % | -5.43% | -0.45% | 5.36% | -7.16% | 7.16% | 53.52% | -24.43% | -12.33% | 39.69% | -3.16% | -4.35% | 12.81% | 17.15% | 16.87% | 18.97% | 20.46% | 37.12% | 24.17% | 23.05% | 50.4% | 40.01% | 65.86% | 74.75% | 65.98% | 55.97% | 25.32% | 57.88% | 86.67% | - |
| Net Income (Continuing) | 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 |
| Discontinued Operations | 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 |
| Minority Interest | 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 |
| EPS (Diluted) | 4.67 | 4.55 | 4.51 | 4.21 | 4.41 | 4.05 | 2.57 | 3.29 | 3.60 | 2.53 | 2.55 | 2.65 | 2.35 | 2.02 | 1.72 | 1.42 | 1.19 | 0.89 | 0.72 | 0.58 | 0.39 | 0.28 | 0.18 | 0.11 | 0.07 | 0.05 | 0.04 | 0.02 | 0.01 |
| EPS Growth % | -3.16% | 0.89% | 7.13% | -4.54% | 8.89% | 57.59% | -21.88% | -8.61% | 42.29% | -0.78% | -3.77% | 12.77% | 16.34% | 17.44% | 21.13% | 19.33% | 33.71% | 23.61% | 24.14% | 48.72% | 39.29% | 55.56% | 63.64% | 62.24% | 49.67% | 24.45% | 51.67% | 81.82% | - |
| EPS (Basic) | - | 4.56 | 4.52 | 4.21 | 4.42 | 4.06 | 2.58 | 3.30 | 3.61 | 2.54 | 2.56 | 2.67 | 2.37 | 2.03 | 1.74 | 1.46 | 1.22 | 0.91 | 0.74 | 0.61 | 0.41 | 0.30 | 0.19 | 0.11 | 0.07 | 0.05 | 0.04 | 0.03 | 0.01 |
| Diluted Shares Outstanding | 477M | 482M | 497M | 505M | 519M | 528M | 541M | 560M | 584M | 595M | 610M | 613.3M | 612.49M | 609.66M | 611.72M | 620.7M | 618.27M | 602.23M | 597.88M | 607.19M | 602.25M | 587.58M | 570.22M | 543.26M | 509.55M | 488.9M | 486.14M | 465.98M | 455.06M |
| Basic Shares Outstanding | 477M | 481M | 496M | 505M | 518M | 527M | 540M | 559M | 582M | 593M | 607M | 609.1M | 608.13M | 604.01M | 602.58M | 606.55M | 601.56M | 586.61M | 580.24M | 576.31M | 563.43M | 545.98M | 523.96M | 500.04M | 473.92M | 456.41M | 445.56M | 440.21M | 439.69M |
| Dividend Payout Ratio | - | 27.35% | 26.79% | 27.8% | 24.63% | 23.82% | 34.48% | 24.59% | 22.28% | 17.62% | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
Discretionary IT spending volatility
According to recent financial filings, CTSH revenue growth has fluctuated between a 1.1% contraction in early 2024 and a 8.1% expansion by 2025Q2, suggesting that the company's top-line performance remains highly sensitive to the cyclical nature of discretionary IT spending within its core North American client base.
The transition from negative growth in 2024 to mid-single-digit expansion in 2026 indicates a potential stabilization in demand, though the lack of consistent acceleration warrants caution. Investors should monitor whether this growth is driven by high-value digital transformation projects or if it remains tethered to lower-margin legacy maintenance work.
As reported in quarterly statements, CTSH's gross margin has experienced notable volatility, peaking at 35.1% in 2024Q4 before compressing to 29.6% in 2026Q1, which may indicate challenges in maintaining pricing power amidst rising labor costs and competitive pressure in the IT services landscape.
The recent decline in gross margin suggests that the company may be struggling to pass through wage inflation in its Indian delivery centers to clients. This compression implies that the traditional offshore pyramid model is facing structural headwinds that could limit profitability unless offset by significant AI-driven productivity gains.
Based on the provided income statement data, operating margins have remained largely range-bound between 14.6% and 16.7% over the last ten quarters, suggesting that CTSH has yet to achieve meaningful operating leverage despite its ongoing efforts to optimize SG&A expenses and streamline internal delivery processes.
The inability of operating income to scale significantly faster than gross profit indicates that overhead costs remain sticky. This lack of operating leverage may imply that the company is forced to reinvest heavily in talent and technology just to maintain its current market position, limiting potential margin expansion.
As evidenced by the 2025Q3 net income drop to $274 million from $645 million in the prior quarter, CTSH's bottom-line quality appears susceptible to non-operating items and periodic charges, necessitating a closer look at the sustainability of reported EPS figures across different reporting periods.
The significant variance in net income, despite relatively stable revenue, suggests that one-time restructuring costs or other non-recurring items may be obscuring the underlying operational performance. Analysts should scrutinize the impact of stock-based compensation and tax rate fluctuations to determine the true cash-generative capacity of the business.
While management emphasizes a pivot toward generative AI, the recent contraction in gross margins to sub-30% levels in 2026Q1 suggests that the company's competitive moat may be eroding as clients increasingly demand lower-cost, automated delivery models that threaten the traditional high-margin consulting services revenue stream.
Short-sellers might focus on the potential for further margin erosion if the company fails to successfully transition its revenue mix toward higher-value platform services. The reliance on North American CAPEX cycles remains a significant vulnerability that could lead to further earnings volatility if the macroeconomic environment deteriorates.
Quick answers to the most common questions about buying CTSH stock.
For fiscal year 2025, Cognizant Technology Solutions Corporation (CTSH) reported total revenue of $21.11B. This represents a 35920.5% increase compared to $58.6M in 1998.
Cognizant Technology Solutions Corporation (CTSH) is profitable, generating $2.23B in net income for the fiscal year ending 2025 with a net profit margin of 10.6%.
Cognizant Technology Solutions Corporation (CTSH) reported an operating income of $3.53B, resulting in an operating profit margin of 16.7%. This margin reflects the operational efficiency of the business before interest and taxes.
Cognizant Technology Solutions Corporation (CTSH) generated $7.12B in gross profit for the year, representing a gross profit margin of 33.7%. This demonstrates the company's core pricing power and production efficiency.