Cognizant raises annual adjusted profit forecast on strong client spending
Cognizant's logo is pictured on a smartphone in this illustration taken, December 4, 2021. REUTERS/Dado Ruvic/Illustration
Cognizant Technology raised its full-year 2025 adjusted profit forecast on Wednesday, anticipating a surge in spending from enterprise clients looking to upgrade their digital infrastructure with artificial intelligence.
Shares of the Teaneck, New Jersey-based IT consulting company rose around 10 per cent in morning trading.
Cognizant's embrace of AI and agents has helped it attract customers in search of ways to use the booming technology to optimize business processes and automate work.
The company has leaned on acquisitions to help grow the business and expand into new markets in an attempt to gain ground on larger IT service providers in a highly competitive market.
However, Cognizant faces an uncertain outlook due to the Trump administration's $100,000 fee for H-1B visas, which allow businesses to employ foreign workers in specialty occupations.
"The recently announced Proclamation is expected to have limited near-term impact on our operations," a Cognizant spokesperson said.
"Over the past several years, we have significantly reduced our reliance on visas, using them only for select technology roles that supplement our U.S. workforce."
The company raised its forecast for annual adjusted profit per share to between $5.22 and $5.26, compared with its earlier projection of between $5.08 and $5.22 per share.
Cognizant raised the lower end of its annual revenue forecast to $21.05 billion from $20.7 billion, while keeping the upper end unchanged at $21.1 billion.
It forecast fourth-quarter revenue of between $5.27 billion and $5.33 billion, compared with estimates of $5.27 billion, according to data compiled by LSEG.
Cognizant reported revenue of $5.42 billion for the third quarter, beating estimates of $5.32 billion.
