COGNIZANT TECHNOLOGY SOLUTIONS CORP

Previous wording

During the quarter ended March 31, 2025, revenues increased by $355 million as compared to the quarter ended March 31, 2024, representing growth of 7.5%, or 8.2% on a constant currency 1 basis. Our recently completed acquisitions contributed approximately 400 basis points to revenue growth. Additionally, revenues were positively impacted by growth in our Health Sciences and Financial Services segment, partially offset by weakness in our Products and Resources (excluding the impact of our recently completed acquisitions) and Communications, Media and Technology segments.

Current wording

During the quarter ended June 30, 2025, revenues increased by $395 million as compared to the quarter ended June 30, 2024, representing growth of 8.1%, or 7.2% on a constant currency 1 basis. Our recently completed acquisition of Belcan contributed approximately 400 basis points to revenue growth. Additionally, revenues were positively impacted by growth in our Financial Services and Health Sciences segments, partially offset by weakness in our Products and Resources segment (excluding the impact of Belcan).

Previous wording

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. For the trailing twelve months ended March 31, 2025 our Voluntary Attrition - Tech Services was 15.8% as compared to 13.1% for the trailing twelve months ended March 31, 2024. We finished the first quarter of 2025 with approximately 336,300 employees as compared to 344,400 employees at the end of the first quarter of 2024.

Current wording

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. For the trailing twelve months ended June 30, 2025 our Voluntary Attrition - Tech Services was 15.2% as compared to 13.6% for the trailing twelve months ended June 30, 2024. We finished the second quarter of 2025 with approximately 343,800 employees as compared to 336,300 employees at the end of the second quarter of 2024.

Previous wording

We continue to expect our clients' focus 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 todemand services and solutions that can enhance productivity and deliver cost savings. 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 policies, including tariffs, and other macroeconomic and geopolitical factors. This includes the uncertainty related to the global economy, which has affected and may continue to affect their demand for our services and discretionary work.

Current wording

We continue to expect our clients' focus 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, clients have demanded and may increasingly demand services and solutions that deliver productivity and cost savings. 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 policies, including tariffs, and other macroeconomic and geopolitical factors. This includes the uncertainty related to the global economy, which has affected and may continue to affect their demand for our services and discretionary work.

Previous wording

Revenues of $5,115 million across our business segments and geographies were as follows for the three months ended March 31, 2025:

Current wording

Revenues of $5,245 million across our business segments and geographies were as follows for the three months ended June 30, 2025:

Previous wording

Change in revenues was driven by the following factors:3

Current wording

Revenue growth was driven by the following factors:3

Previous wording

• North America revenues, particularly in the Health Sciences and Financial Services segment, were positively impacted by the ramp up of several recently won large deals;

Current wording

• Revenue growth across all geographies was driven by our Financial Services and Health Sciences segments, which were positively impacted by the ramp up of several recently won large deals;

Previous wording

• Reduced demand for discretionary work negatively impacted our revenues, in particular for clients in our Products and Resources segment and our Communications, Media and Technology segments.

Current wording

• Reduced demand for discretionary work negatively impacted our revenues, in particular for clients in our Products and Resources segment.

Previous wording

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. The increase, as a percentage of revenues, was driven by the negative impact of the 2024 merit cycle on compensation costs, partially offset by operational efficiencies and the beneficial impact of foreign currency exchange rate movements.

Current wording

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. The increase, as a percentage of revenues, was driven by increased compensation costs, partially offset by operational efficiencies and the beneficial impact of foreign currency exchange rate movements.

Previous wording

Depreciation and amortization expense increased by 3.8% while decreasing as a percentage of revenues by 0.1% during the first quarter of 2025 as compared to the first quarter of 2024. The decrease in depreciation expense, which was driven by actions taken under our NextGen program, was offset by an increase in amortization expense driven by intangible assets related to our recently completed acquisition of Belcan.

Current wording

Depreciation and amortization expense increased by 8.6% while remaining flat as a percentage of revenues during the second quarter of 2025 as compared to the second quarter of 2024. The increase was driven by amortization expense from intangible assets related to our recently completed acquisition of Belcan.

Previous wording

Our operating margin increased to 16.7% for the quarter ended March 31, 2025 from 14.6% for the quarter ended March 31, 2024. Our Adjusted Operating Margin 1 increased to 15.5% for the quarter ended March 31, 2025 from 15.1% for the quarter ended March 31, 2024. Our GAAP and Adjusted Operating Margins for the quarter ended March 31, 2025, as compared to the quarter ended March 31, 2024, 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 the negative impact of the 2024 merit cycle on compensation costs, and the dilutive impact of the recently completed acquisition of Belcan. In addition, our GAAP operating margin for the quarter ended March 31, 2025 was positively impacted by 120 basis points, or $62 million, from the gain on sale of property and equipment, and our GAAP operating margin for the quarter ended March 31, 2024 was negatively impacted by NextGen charges, both of which were excluded from our Adjusted Operating Margin.

Current wording

Our GAAP and Adjusted Operating Margins 4 for the quarter ended June 30, 2025, as compared to the quarter ended June 30, 2024, 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 recently completed acquisition of Belcan. In addition, our GAAP operating margin for the quarter ended June 30, 2024 was negatively impacted by NextGen charges, which were excluded from our Adjusted Operating Margin.

Previous wording

A predominant portion of our costs in India are denominated in the Indian rupee, representing approximately 23% of our global operating costs during the three months ended March 31, 2025. These costs are subject to foreign currency exchange rate fluctuations, which have an impact on our results of operations. We enter into foreign exchange derivative contracts to hedge certain Indian rupee denominated payments in India. These hedges are intended to mitigate the volatility of the changes in the exchange rate between the U.S. dollar and the Indian rupee. Net of the impact of the hedges, the depreciation of the Indian rupee positively impacted our operating margin for the three months ended March 31, 2025 by 58 basis points as compared to the three months ended March 31, 2024.

Current wording

A predominant portion of our costs in India are denominated in the Indian rupee, representing approximately 23% of our global operating costs during the three months ended June 30, 2025. These costs are subject to foreign currency exchange rate fluctuations, which have an impact on our results of operations. We enter into foreign exchange derivative contracts to hedge certain Indian rupee denominated payments in India. These hedges are intended to mitigate the volatility of the changes in the exchange rate between the U.S. dollar and the Indian rupee. Net of the impact of the hedges, the depreciation of the Indian rupee positively impacted our operating margin for the three months ended June 30, 2025 by 38 basis points as compared to the three months ended June 30, 2024.

Previous wording

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 74 basis points during the three months ended March 31, 2025. 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 17 basis points (excluding the impact of the hedges). The settlement of our cash flow hedges had a negative impact of 16 basis points on our operating margin during the three months ended March 31, 2025, compared to no impact during the three months ended March 31, 2024.

Current wording

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 44 basis points during the three months ended June 30, 2025. 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 17 basis points (excluding the impact of the hedges). The settlement of our cash flow hedges had a positive impact of 2 basis points on our operating margin during the three months ended June 30, 2025, compared to a positive impact of 8 basis points during the three months ended June 30, 2024.

Previous wording

In the first quarter of 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 the negative impact of the 2024 merit cycle on compensation costs. In the first quarter of 2025, segment operating profit in the Products and Resources segment was also negatively impacted by the dilutive impact of the Belcan acquisition.

Current wording

In the second quarter of 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. In the second quarter of 2025, segment operating profit in the Products and Resources segment was also negatively impacted by the dilutive impact of the Belcan acquisition.

Previous wording

Our non-GAAP financial measures Adjusted Operating Margin and Adjusted Income from Operations exclude unusual items, such as the gain on sale of property and equipment and NextGen charges. Our non-GAAP financial measure Adjusted Diluted EPS excludes unusual items, such as 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. For further detail on the gain on sale of property and equipment and the NextGen charges, see Note 1 and Note 3, respectively, to our unaudited 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. 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.

Current wording

Our non-GAAP financial measures Adjusted Operating Margin and Adjusted Income from Operations exclude unusual items, such as the gain on sale of property and equipment in the first quarter of 2025 and NextGen charges in 2024. Our non-GAAP financial measure Adjusted Diluted EPS excludes unusual items, such as 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. For further detail on the gain on sale of property and equipment and the NextGen charges, see Note 1 and Note 3, respectively, to our unaudited 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. 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.

Previous wording

determine portions of the compensation for executive officers and for making comparisons of our operating results to those of our competitors. 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.

Current wording

We believe providing investors with an operating view consistent with how we manage the Company provides enhanced transparency into our operating results. For internal management reporting and budgeting purposes, we use various GAAP and non-GAAP financial measures for financial and operational decision-making, to evaluate period-to-period comparisons, to determine portions of the compensation for executive officers and for making comparisons of our operating results to those of our competitors. 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.

Previous wording

(4)Presented below are the tax impacts of our non-GAAP adjustments to pre-tax income:

Current wording

(3)Presented below are the tax impacts of our non-GAAP adjustments to pre-tax income:

Previous wording

• Recently completed acquisitions contributed 400 basis points of growth to the overall revenue growth, including approximately 1,500 basis points of growth to our Products and Resources segment (primarily in North America);

Current wording

•Recently completed acquisitions contributed 400 basis points of growth to the overall revenue growth, including approximately 1,550 basis points of growth to our Products and Resources segment, primarily in North America and to a lesser extent the United Kingdom;

Previous wording

During the three months ended March 31, 2025, we realized a gain of $62 million on the sale of an office complex in India. For further detail see Note 1 to our unaudited consolidated financial statements.

Current wording

During the six months ended June 30, 2025, we realized a gain of $62 million on the sale of an office complex in India. For further detail see Note 1 to our unaudited consolidated financial statements.

Previous wording

Our GAAP and Adjusted Operating Margins 4 for the quarter ended March 31, 2025, as compared to the quarter ended March 31, 2024, 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 the negative impact of the 2024 merit cycle on compensation costs and the dilutive impact of the recently completed acquisition of Belcan. In addition, our GAAP operating margin for the quarter ended March 31, 2025 was positively impacted by 120 basis points, or $62 million, from the gain on sale of property and equipment, and our GAAP operating margin for the quarter ended March 31, 2024 was negatively impacted by NextGen charges, both of which were excluded from our Adjusted Operating Margin.

Current wording

The increase in our 2025 GAAP operating margin and Adjusted Operating Margin 7 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 the increased compensation costs and the dilutive impact of the recently completed acquisition of Belcan. In addition, our GAAP operating margin for 2025 was positively impacted by 60 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.

Previous wording

The decrease in unallocated costs for three months ended March 31, 2025 as compared to March 31, 2024 was 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.

Current wording

The decrease in unallocated costs for six months ended June 30, 2025 as compared to June 30, 2024 was 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.

Previous wording

The foreign currency exchange losses were attributed to the remeasurement of net monetary assets and liabilities denominated in currencies other than the functional currencies of our subsidiaries. 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 March 31, 2025, the notional value of our undesignated hedges was$801 million.

Current wording

The foreign currency exchange 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 gains and losses 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.

Previous wording

The increase in provision for income taxes for the three months ended March 31, 2025 was primarily driven by an increase in income from operations, partially offset by a decrease in the effective income tax rate.

Current wording

The increase in provision for income taxes was primarily driven by an increase in income from operations.

Previous wording

The increase in net income was primarily driven by an increase in income from operations, including the aforementioned gain on sale of property and equipment.

Current wording

The increase in net income was driven by an increase in income from operations, including the aforementioned gain on sale of property and equipment.

Previous wording

(1)During the three months ended March 31, 2025, we realized a gain of $62 million on the sale of an office complex in India. See Note 1 to our unaudited consolidated financial statements for additional information.

Current wording

(1)During the six months ended June 30, 2025, we realized a gain of $62 million on the sale of an office complex in India. See Note 1 to our unaudited consolidated financial statements for additional information.

Previous wording

Our cash generated from operations has historically been the primary source of liquidity to fund operations and investments to grow our business. As of March 31, 2025, we had cash, cash equivalents and short-term investments of $1,992 million and available capacity under our credit facility of $1.85 billion.

Current wording

Our cash generated from operations has historically been the primary source of liquidity to fund operations and investments to grow our business. As of June 30, 2025, we had cash, cash equivalents and short-term investments of $1,808 million and available capacity under our credit facility of $1.85 billion.

Previous wording

The following table provides a summary of cash flows for the three months ended March 31:

Current wording

The following table provides a summary of cash flows for the six months ended June 30:

Previous wording

The increase in cash provided by operating activities for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily driven by the $360 million payment made in January 2024 in relation to our dispute with the ITD (see Note 6 to our unaudited consolidated financial statements), which reduced cash from operating activities in 2024.

Current wording

The increase in cash provided by operating activities for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily driven by the $360 million payment we made in January 2024 in relation to our dispute with the ITD (see Note 6 to our unaudited consolidated financial statements), which reduced cash from operating activities in 2024.

Previous wording

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 March 31, 2025, an increase of 3 days from 78 days as of December 31, 2024. Our DSO was 78 days as of March 31, 2024, an increase of 1 day from 77 days as of December 31, 2023.

Current wording

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 83 days as of June 30, 2025, an increase of 5 days from 78 days as of December 31, 2024. Our DSO was 80 days as of June 30, 2024, an increase of 3 days from 77 days as of December 31, 2023.

Previous wording

The cash used in investing activities for the three months ended March 31, 2025, was driven by purchases of property and equipment, partially offset by the proceeds from the sale of an office complex in India. The cash used in investing activities for the three months ended March 31, 2024, was driven by payments for business combinations and purchases of property and equipment, partially offset by net maturities of investments.

Current wording

The cash used in investing activities for the six months ended June 30, 2025, was driven by purchases of property and equipment, partially offset by the proceeds from the sale of an office complex in India. The cash used in investing activities for the six months ended June 30, 2024, was driven by payments for business combinations and purchases of property and equipment, partially offset by net maturities of investments.

Previous wording

The increase in cash used in financing activities for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, was primarily driven by our repayment of the outstanding balance under the revolving credit facility and increased repurchases of common stock during the first quarter of 2025.

Current wording

The increase in cash used in financing activities for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, was primarily driven by increased repurchases of common stock and the repayment of the outstanding balance under the revolving credit facility.

Previous wording

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. During the three months ended March 31, 2025, we repaid the $300 million balance that was outstanding under the revolving credit facility, and had no outstanding balance as of March 31, 2025. We are required under the Credit Agreement to make scheduled quarterly principal payments on the Term Loan. 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 March 31, 2025 and through the date of this filing. See Note 5 to our unaudited consolidated financial statements.

Current wording

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. During the six months ended June 30, 2025, we repaid the $300 million balance that was outstanding under the revolving credit facility, and had no outstanding balance as of June 30, 2025. We are required under the Credit Agreement to make scheduled quarterly principal payments on the Term Loan. 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 June 30, 2025 and through the date of this filing. See Note 5 to our unaudited consolidated financial statements.

Previous wording

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 Tax Reform Act transition tax payments, andservicing our debt for the next twelve months. The ability to expand and grow our business in accordance with current plans, make acquisitions, meet long-term capital requirements beyond a twelve-month period and execute our capital return plan will depend on many factors, including the rate, if any, at which cash flow increases, our ability and willingness to pay for acquisitions with capital stock and the availability of public and private debt, including the ability to extend the maturity of or refinance our existing debt, and equity financing. We cannot be certain that additional financing, if required, will be available on terms and conditions acceptable to us, if at all.

Current wording

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 andservicing our debt for the next twelve months. The ability to expand and grow our business in accordance with current plans, make acquisitions, meet long-term capital requirements beyond a twelve-month period and execute our capital return plan will depend on many factors, including the rate, if any, at which cash flow increases, our ability and willingness to pay for acquisitions with capital stock and the availability of public and private debt, including the ability to extend the maturity of or refinance our existing debt, and equity financing. We cannot be certain that additional financing, if required, will be available on terms and conditions acceptable to us, if at all.

Previous wording

Management’s discussion and analysis of our financial condition and results of operations is based on our unaudited consolidated financial statements that have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the amounts reported for assets and liabilities, including the recoverability of tangible and intangible assets, disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. On an ongoing basis, we evaluate our estimates. The most significant estimates relate to the recognition of revenue and profits, including the application of the cost-to-cost method of measuring progress to completion for certain fixed-price contracts, income taxes, business combinations and valuation of goodwill and other long-lived assets. We base our estimates on historical experience, current trends and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The actual amounts may differ from the estimates used in the preparation of the accompanying unaudited consolidated financial statements. For a discussion of our critical accounting estimates, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024. Our significant accounting policies are described in Note 1 to the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

Management’s discussion and analysis of our financial condition and results of operations is based on our unaudited consolidated financial statements that have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the amounts reported for assets and liabilities, including the recoverability of tangible and intangible assets, disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. On an ongoing basis, we evaluate our estimates. The most significant estimates relate to the recognition of revenue, including the application of the cost-to-cost method of measuring progress to completion for certain fixed-price contracts, income taxes, business combinations and valuation of goodwill and other long-lived assets. We base our estimates on historical experience, current trends and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The actual amounts may differ from the estimates used in the preparation of the accompanying unaudited consolidated financial statements. For a discussion of our critical accounting estimates, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024. Our significant accounting policies are described in Note 1 to the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.