Cognizant Q2 net profit rises 14% to $645 mn on BFSI, healthcare gains

Cognizant posted 14 per cent rise in Q2 net profit to $645 million, with strong growth in healthcare and BFSI verticals and two mega deals boosting revenue

Cognizant’s net profit for its second quarter rose 14 per cent to $645 million as it earned more from its core business verticals—healthcare and banking, financial services and insurance (BFSI)—and last year’s acquisitions contributed handsomely to the topline.

 

The Nasdaq-listed company’s revenue was up 8.1 per cent to $5.25 billion for the quarter ended 30 June, beating Bloomberg estimates of $5.19 billion. On a constant currency basis, revenue rose 7.2 per cent. Both figures were considerably better than TCS and Infosys, its Indian rivals. While TCS’ revenue was down 3.1 per cent on a constant currency basis, Infosys’ was up 3.8 per cent.

 

 

Cognizant’s numbers were also buoyed by the company signing two mega deals—each worth $500 million and above—during the quarter, taking the total to three in 2025, as it works to re-enter India’s top four IT services firms within three years.

 

“It is a great quarter in a market which still remains uncertain and the macroeconomic [environment] has not changed much,” Chief Executive Officer Ravi Kumar said on Thursday.

 

Bolstered by better-than-expected revenue growth and large deals, the company narrowed the lower end of its guidance for the full year. Cognizant now expects to grow between 4–6 per cent on a constant currency basis, up from the 3.5–6 per cent it had guided in April. For the third quarter ending 30 September, growth is expected between 3.5–5 per cent.

 

Cognizant added that Belcan, the engineering research and development (ER&D) company it bought last year, accounted for about half of its quarterly revenue growth, mirroring its contribution in the previous quarter.

 

Cognizant won 29 large deals (worth $100 million and more) in 2024 and 17 in the year before, when Ravi Kumar took over as CEO. In the first six months of this fiscal year, it has signed 10 such deals.

 

“All the large deals that we did last year were productivity deals,” said Kumar, referring to cost take-out and efficiency improvement contracts, which are the bread and butter for all IT services companies but come with margins increasingly under pressure.

 

“From this year, it is innovation and productivity deals, and innovation deals have improved. Our total contract value (TCV) of large deals has doubled and our annual contract value (ACV) has also grown sequentially and compared to last year. The fourth quarter usually has more renewals and that’s where we think the deal ramp-ups will happen,” he added.

 

Cognizant 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 generative AI. 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.

 

Revenue from health sciences and BFSI, the two growth engines, were up 5.3 per cent and 6 per cent, respectively, during the quarter. Revenue from product and services, which includes Belcan, was up about 15 per cent. North America grew 8.1 per cent and Europe, mirroring other IT companies, grew 4 per cent.

 

Operating margins increased 100 basis points to 15.6 per cent. “Our increased revenue guidance midpoint and reaffirmed adjusted operating margin outlook reflect strong execution and momentum year-to-date,” said Chief Financial Officer Jatin Dalal.