COGNIZANT TECHNOLOGY SOLUTIONS CORP

Results of Operations

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The following table sets forth, for the periods indicated, certain financial data for the three months ended March 31:

(a)Exclusive of depreciation and amortization expense.2

2 Adjusted Income from Operations, Adjusted Operating Margin and Adjusted Diluted EPS are not measures of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measures, as applicable.

Revenues - Reportable Business Segments and Geographic Markets

Revenues of $5,413 million across our business segments and geographies were as follows for the three months ended March 31, 2026:

Foreign currency exchange movements impacted revenue across segments and geographies as shown in the tables above. Constant currency revenue growth was driven by the following factors:3

• Revenue growth across all geographies, primarily in our Financial Services segment, was positively impacted by the ramp up of several recently won large deals and increasing demand for our intuitive operations and automation services as well as our AI and analytics services;

• The sale of third-party products, primarily in North America, in connection with our integrated offerings strategy, contributed approximately 140 basis points to overall revenue growth. These sales contributed 1,000 basis points of growth to our Communications Media and Technology segment and 250 basis points growth to our Financial Services segment;

• Our recently completed acquisition contributed approximately 90 basis points to overall revenue growth, across all segments in North America;

• Revenue growth in our Health Sciences segment was negatively impacted by 300 basis points due to lower sales of third-party products in the first quarter of 2026 as compared to 2025. This impact was partially offset by continued services demand from life sciences customers;

• Excluding the sale of third-party products, our Communications Media and Technology segment has seen and may continue to see weakness among communications and media customers, partially offset by growth in technology customers.

3 Constant currency revenue growth is not a measure of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measures, as applicable.

Cost of Revenues (Exclusive of Depreciation and Amortization Expense)

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 primarily driven by the impact of the sale of third-party products in connection with our integrated offerings strategy and increased compensation costs, partially offset by the beneficial impact of foreign currency exchange rate movements.

SG&A Expenses (Exclusive of Depreciation and Amortization Expense)

SG&A expenses consist primarily of salaries, incentive-based compensation, stock-based compensation expense, employee benefits, immigration, travel, marketing, communications, management, finance, administrative and occupancy costs. The decrease, as a percentage of revenues, was primarily driven by operational efficiencies, partially offset by the dilutive impact of our recently completed acquisition.

Depreciation and Amortization Expense

Depreciation and amortization expense increased by 3.7% during the first quarter of 2026 as compared to the first quarter of 2025. The increase was driven by amortization expense from intangible assets related to our recently completed acquisition.

Operating Margin and Adjusted Operating Margin4 - Overall

Our GAAP and Adjusted Operating Margins 4 for the quarter ended March 31, 2026, as compared to the quarter ended March 31, 2025, were positively impacted by operational efficiencies and the beneficial impact of foreign currency exchange rate movements, partially offset by the impact of the sale of third-party products in connection with our integrated offerings strategy, the dilutive impact of our recently completed acquisition and increased compensation costs. 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, which was excluded from our Adjusted Operating Margin.

A predominant portion of our costs in India are denominated in the Indian rupee, representing approximately 22% of our global operating costs during the three months ended March 31, 2026. 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, 2026 by approximately 50 basis points as compared to the three months ended March 31, 2025.

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 100 basis points during the three months ended March 31, 2026. 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 approximately 65 basis points on our operating margin during the three months ended March 31, 2026, compared to a negative impact of approximately 15 basis points during the three months ended March 31, 2025.

4 Adjusted Income from Operations and Adjusted Operating Margin are not measures of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measures, as applicable.

Segment Operating Profit

In the first quarter of 2026, we made certain changes to the internal measurement of segment operating profit for the purpose of evaluating segment performance and resource allocation. The primary reason for the change was to reflect a more complete cost of delivery. Specifically, segment operating profit now includes the allocation of corporate costs, which were previously included in "unallocated costs", including amortization expense related to acquired intangible assets. Beginning in 2026, segment operating profits have been reported using the new allocation methodology and we have recast the 2025 results to conform to the new methodology.

Segment operating profit and operating margin percentage were as follows:

In the first quarter of 2026, segment operating margins across all our segments were positively impacted by operational efficiencies and the beneficial impact of foreign currency exchange rate movements, partially offset by the dilutive impact of our recently completed acquisition and increased compensation costs. On a year-over-year basis, the timing of sales of third-party products positively impacted the change in segment operating margin in Health Sciences, while negatively impacting Financial Services, Product and Resources and Communications, Media and Technology. In addition, segment operating margin in Communications, Media and Technology was positively impacted by increased profitability of several large customers.

Total segment operating profit and operating margin were as follows for the three months ended March 31:

Unallocated benefits for the three months ended March 31, 2025 represents the 2025 gain on sale of property and equipment. See Note 1 to our unaudited consolidated financial statements for additional information.

Other Income (Expense), Net

The following table sets forth total other income (expense), net for the three months ended March 31:

The foreign currency exchange gains 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 contracts entered into to offset our foreign currency exposures. As of March 31, 2026, the notional value of our undesignated hedges was

$781 million. Interest income declined for the three months ended March 31, 2026, driven by lower invested balances and lower yields as compared to the three months ended March 31, 2025. Higher interest expense during the three months ended March 31, 2025 was driven by the outstanding balance under our revolving credit facility during that period. The increase in expenses in Other, net was related to our India defined benefit plans as a result of the enactment of the Labor Code reforms in 2025.

Provision for Income Taxes

The effective income tax rate for Q1 2026 was positively impacted by $34 million of discrete benefits driven by the agreed terms of an anticipated conclusion of an advance pricing agreement.

Net Income

Net income was relatively flat when comparing Q1 2026 to Q1 2025.

Non-GAAP Financial Measures

Portions of our disclosure include non-GAAP financial measures. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. 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 the gain on sale of property and equipment in the first quarter of 2025. Our non-GAAP financial measure Adjusted Diluted EPS excludes unusual items, such as the gain on sale of property and equipment, and net non-operating foreign currency exchange gains or losses and the tax impact of all the applicable adjustments. 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.

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 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.

A limitation of using non-GAAP financial measures versus financial measures calculated in accordance with GAAP is that non-GAAP financial measures may exclude costs that are recurring such as net non-operating foreign currency exchange gains or losses. In addition, other companies may calculate non-GAAP financial measures differently than us, thereby limiting the usefulness of these non-GAAP financial measures as a comparative tool. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from non-GAAP financial measures to allow investors to evaluate such non-GAAP financial measures.

The following table presents a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure for the three months ended March 31:

(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.

(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 unaudited consolidated statements of operations.

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

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. As such, the income tax effect of non-operating foreign currency exchange gains and losses shown in the above table may not appear proportionate to the net pre-tax foreign currency exchange gains and losses reported in our unaudited consolidated statements of operations.

Liquidity and Capital Resources

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, 2026, we had cash, cash equivalents and short-term investments of $1,517 million and available capacity under our credit facility of $1.85 billion.

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

Operating activities

The decrease in cash provided by operating activities for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was primarily driven by higher incentive based compensation payments in 2026.

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 84 days as of March 31, 2026, an increase of 3 days from 81 days as of December 31, 2025. Our DSO was 81 days as of March 31, 2025, an increase of 3 days from 78 days as of December 31, 2024.

Investing activities

The increase in cash used in investing activities for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was driven by the payment for the acquisition of 3Cloud in 2026 and the gain on sale of property and equipment in 2025.

Financing activities

The decrease in cash used in financing activities for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, was primarily driven by the repayment of the outstanding balance under the revolving credit facility in 2025, partially offset by increased repurchases of common stock during 2026.

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. 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, 2026 and through the date of this filing. See Note 5 to our unaudited consolidated financial statements.

Capital Allocation

Acquisitions

Share repurchases

Dividend payments

We review our capital allocation on an ongoing basis, considering our financial performance and liquidity position, investments required to execute our strategic plans and initiatives, acquisition opportunities, the economic outlook, regulatory changes and other relevant factors. As these factors may change over time, the actual amounts expended on stock repurchase activity, dividends, and acquisitions, if any, during any particular period cannot be predicted and may fluctuate from time to time.

Other Liquidity and Capital Resources Information

We seek to ensure that our cash is available to us in the locations in which it is needed. As part of our ongoing liquidity assessments, we regularly monitor the mix of our domestic and international cash flows and cash balances. We evaluate on an ongoing basis what portion of the non-U.S. cash, cash equivalents and short-term investments is needed locally to execute our strategic plans and what amount is available for repatriation back to the United States.

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, payments related to Project Leap 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.

Commitments and Contingencies

See Note 10 to our unaudited consolidated financial statements.

Critical Accounting Estimates

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 “Part II, 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, 2025. 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, 2025.

Recently Adopted and New Accounting Pronouncements

See Note 1 to our unaudited consolidated financial statements.