Cognizant wins two mega deals, eyes return to IT top four by 2027

IT firm doubles down on AI-led productivity and large transformation contracts

Cognizant said on Wednesday it has won two “mega deals” (worth $500 million at least) so far in its second quarter, taking the total to three in 2025 as it works to once again rank among the top four IT services companies in three years.

 

The Nasdaq-listed company follows a January to December financial calendar. The two deals won in the second quarter, which ends on June 30, are in the communication, media and technology and health sciences business, said Surya Gummadi, president of Cognizant Americas, at a Bank of America technology conference.

 

Cognizant won 29 large deals (worth $100 million and more) in 2024 and 17 the year before when Ravi Kumar took over as chief executive officer. There were four such deals at the end of the first quarter of 2025, including one mega deal in the health sciences vertical.

 

"These are transformation deals, nearing a $1 billion each dealing with renewal, expansion, and also net new. Most of these deals have a tenure of about five years," said Gummadi, referring to the two new mega deals.

 

Winning large deals is a key priority of Kumar to get back to what he calls the “winners circle”. Such deals, which all IT companies are chasing in an uncertain macroeconomic environment, will help Cognizant push up revenue, gain market share and aim for a gradual margin expansion.

 

IT (information technology) companies are using artificial intelligence and generative AI (GenAI) to unlock value in the run side of the business so that savings can be ploughed back into transformation programs.

 

“The paranoia about cost and productivity, the timing can never be better than now. I mean when you're in a slowdown, there is one way to look at cost takeout deals. When there is a high-velocity market, there is another way to look at it. This is not a slow or a high market. This is an uncertain market. So in an uncertain market, you really want to get the best value,” said Kumar in a call with analysts after the company announced its first quarter results in May.

 

Gummadi said at the conference pricing is competitive but not irrational. “As we start infusing AI and GenAI in projects, we will adjust the pricing models to pass on the benefits to clients. While pricing models now depend on productivity, it will eventually move to outcomes.” 

 

The company uses AI in three ways: to unlock productivity in existing enterprises; infusing it across the technology stacks of enterprises; and agentification. Most AI-led work falls into the first category.

 

Cognizant has trailed peers such as Tata Consultancy Services (TCS) and Accenture over the past few years, as growth tapered, margins squeezed, and attrition soared — a far cry from its heyday a decade ago when steady growth was its hallmark.

 

It is now pivoting on three strategic moves to regain momentum: amplifying talent by upskilling employees for future readiness; scaling innovation through platform-led growth in the AI era; and aiming to gain an edge over competitors in GenAI. Within AI, the company is banking on higher productivity as more code is written by machines, industrialising AI, and using AI agents to improve client efficiency.

 

Separately, May seems to be a good month for some of the largest IT companies in terms of deal closure. Deal-win announcements were steady month-month after a decline in April, according to a report by BNP Paribas. TCS and Infosys bagged four deals each, followed by Wipro with two.

 

"Deal wins were led by BFSI (7), followed by manufacturing (2) and TME (2) in May. Among geographies, deal-win announcements were concentrated in Europe (8), which saw a recovery after a dip in the previous month. North America saw a significant slowdown month-on-month. Rest of the world remained healthy (5). Most deal wins announced were related to business modernisation and digital transformation," said the report, referring to banking, financial services, and insurance industries and telecom, media, and entertainment.