Cognizant Technology Solutions Corporation (CTSH) SEC Filings & Earnings Calls

No new risk signals; standard covenant (max leverage 3.5x) unchanged

“Financial covenant max Leverage Ratio 3.50:1.00”

Bookings decline in Q2 vs prior year

“Bookings in the second quarter declined 6% year-over-year” · word for word

Voluntary attrition increased

“Voluntary Attrition - Tech Services was 13.0% for the period ended June 30, 2026, as compared to 12.3% for the period ended March 31, 2026” · word for word

Restructuring execution risk

“We expect to record total costs of $230 million to $320 million, with substantially all of the costs expected to be incurred in 2026.” · word for word

India tax treaty risk

“India and Mauritius signed a Protocol to amend the India-Mauritius Income Tax Treaty. We continue to evaluate the potential impact of the amendment, which, depending on its final terms when entered into force, could increase our effective income tax rate.” · word for word

AI disruption risk

“As AI-based technologies or other forms of automation evolve, demand for some services that we currently perform for our clients may be reduced, and our ability to obtain favorable pricing or other terms for some of our services may be diminished.” · word for word

Derivative lawsuit settlement may involve costs or governance changes; no financial terms in excerpt

“Stockholder derivative action alleging FCPA violations, false statements, excessive share repurchases; settlement preliminarily approved”

Increased debt from $1B revolver draw

“borrow $1 billion under the revolving credit facility”

Buyback funded by debt draw ($1B from revolver) increases leverage

“the Company will draw down $1 billion from its existing revolving credit facility” · word for word

Restructuring execution risk: Project Leap involves $230-320M in costs, primarily severance.

“Project Leap expected costs $230M to $320M, including $200-270M employee severance.”

Macroeconomic complexity may impact client spending.

“Management cites 'complex macroeconomic environment' as context for results.”

Restructuring execution risk

“In connection with Project Leap, we expect to record costs of $230 million to $320 million, with substantially all of the costs expected to be incurred in 2026.” · word for word

Client discretionary spending slowdown

“uncertainty related to the global economy, which has affected and may continue to affect their demand for our services and discretionary work.” · word for word

India tax treaty risk

“in March 2024, India and Mauritius signed a Protocol to amend the India-Mauritius Income Tax Treaty. We continue to evaluate the potential impact of the amendment, which, depending on its final terms when entered into force, could increase our effective income tax rate” · word for word

AI disruption to existing services

“As AI-based technologies or other forms of automation evolve, demand for some services that we currently perform for our clients may be reduced, and our ability to obtain favorable pricing or other terms for some of our services may be diminished.” · word for word

Macroeconomic environment challenges

“The lower payout resulted from the more challenging macroeconomic environment that the Company faced since the robust targets for the 2023-2025 PSUs were set.” · word for word

Cybersecurity risk

“Cyber threats continue to evolve in frequency, sophistication and impact across industries, and our oversight framework is designed to provide robust governance, accountability and timely escalation and response.” · word for word

Immigration law changes

“Reviewing potential changes in immigration laws and regulations as they relate to global professional services organizations like ours.” · word for word

Minimal risk; internal transition suggests continuity.

“Transition is internal; no departure or vacancy indicated.”

One-Time Tax Charge from OBBBA

“The decrease in net income was primarily driven by the one-time, non-cash income tax expense of $390 million related to the enactment of the OBBBA.” · word for word

Ongoing Tax Dispute with Indian Tax Department

“We are currently involved in an ongoing dispute with the ITD in which the ITD asserts that we owe additional taxes for two transactions by which CTS India repurchased shares from its shareholders.” · word for word

CMT Segment Weakness

“Our Communications Media and Technology segment has seen weakness amongst communications and media customers, offset by growth in technology customers.” · word for word

GAAP EPS includes one-time non-cash tax charge of $0.80 in FY2025.

“GAAP Diluted EPS includes a one-time non-cash income tax charge that negatively impacted full year 2025 by $0.80.” · word for word

One-time tax charge from OBBBA

“Therefore, in the third quarter of 2025, we recorded a one-time, non-cash income tax expense of $390 million.” · word for word

Belcan acquisition dilution

“partially offset by the dilutive impact of the recently completed acquisition of Belcan.” · word for word

AI disruption risk

“As AI-based technologies or other forms of automation evolve, demand for some services that we currently perform for our clients may be reduced, and our ability to obtain favorable pricing or other terms for some of our services may be diminished.” · word for word

One-time non-cash income tax charge impacted GAAP EPS by $0.80.

“GAAP Diluted EPS includes a one-time non-cash income tax charge that negatively impacted Q3 2025 by $0.80.” · word for word

Bookings declined 5% YoY in Q3, though large deal TCV up 40% YTD.

“Bookings in the third quarter declined 5% year-over-year.” · word for word