10-K – 2026-02-12 – ctsh-20251231.htm

As a global professional services company, we compete on the basis of the knowledge, experience, insights, skills and talent of our employees and the value they can provide to our clients. We closely monitor attrition trends focusing on the metric that we believe is most relevant to our business. For the year ended December 31, 2025 our Voluntary Attrition - Tech Services was 13.9% as compared to 15.9% for the year ended December 31, 2024. We finished 2025 with approximately 351,600 employees as compared to 336,800 employees at the end of 2024.
In July 2025, the OBBBA was enacted in the United States, which, among other provisions, repealed the requirement to capitalize U.S. R&E costs. As a result, we do not believe it is more likely than not that we will realize our deferred tax asset of $390 million related to R&E costs capitalized outside the United States. These amounts would have otherwise been available to offset certain future U.S. taxes on our non-U.S. earnings, which, as a result of this repeal, we no longer project to be applicable to us. Therefore, in the third quarter of 2025, we recorded a one-time, non-cash income tax expense of $390 million. This impacted our full year 2025 GAAP diluted EPS by $0.80, which is added back for the calculation of Adjusted EPS. Other than this impact, we do not expect the OBBBA to significantly impact our effective income tax rate. Additionally, as a result of this repeal, our cash taxes during 2025 were reduced by approximately $200 million as compared to our initial cash tax projections prior to the repeal. These assessments are based upon our current interpretation of the OBBBA, which may change as a result of future clarifications or guidance.
The Government of India implemented labor law reforms effective November 21, 2025, including the Code on Social Security, 2020. As a result, during the fourth quarter of 2025, we recorded a one-time increase to our defined benefit liability for past service of $147 million, in "Other noncurrent liabilities" in our consolidated statement of financial position with a corresponding increase in "Accumulated other comprehensive income (loss)". Additionally, we anticipate a modest increase in our defined benefit costs prospectively. Certain aspects of the Labor Code rely on the issuance of rules and regulations. Additionally, the Government of India is in the process of clarifying certain aspects of the Labor Code. The issuance of rules and regulations as well as the outcome of these clarifications could impact our compensation and benefit expenses in India.
Business Outlook
See "Overview" within Part I, Item 1. Business for information on our strategic approach.
We continue to expect our clients' focus to be on their transformation into AI-ready, technology-driven, data-enabled, customer-centric and differentiated businesses. To support this transformation and drive greater business resiliency, clients have demanded and may increasingly demand services and solutions that deliver productivity and cost savings. We believe clients will continue to contend with industry-specific changes driven by evolving digital technologies, uncertainty in the regulatory environment, industry consolidation and convergence as well as international trade policie s, including tariffs, and other macroeconomic and geopolitical factors. This includes the uncertainty related to the global economy, which has affected and may continue to affect their demand for our services and discretionary work.
We increasingly use AI-based technologies, including GenAI, in our client offerings and our own internal operations. AI technologies and services are part of a highly competitive and rapidly evolving market. We plan to continue to make significant investments in our AI capabilities to meet the needs of our clients and harness AI's value in a flexible, secure, scalable and responsible way. 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.
Potential tax law and other regulatory and administrative changes, including judicial decisions thereon, may impact our future results. In addition, 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, as CTS India is a subsidiary of our wholly-owned Mauritius entity. For additional information, see Part I, Item 1A. Risk Factors.

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December 31, 2025 Form 10-K

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Results of Operations

For a discussion of our results of operations for the year ended December 31, 2023, including a year-to-year comparison between 2024 and 2023, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report Form 10-K for the year ended December 31, 2024.
The Year Ended December 31, 2025 Compared to The Year Ended December 31, 2024
The following table sets forth certain financial data for the years ended December 31:

% of % of Increase / Decrease
(Dollars in millions, except per share data) 2025 Revenues 2024 Revenues $ %
Revenues $ 21,108  100.0 $ 19,736  100.0 $ 1,372  7.0 
Operating expenses:

Cost of revenues (a)
13,991  66.3 12,958  65.7 1,033  8.0 
Selling, general and administrative expenses (a)
3,240  15.3 3,223  16.3 17  0.5 
Restructuring charges —  — 134  0.7 (134) (100.0)
Depreciation and amortization expense 550  2.6 529  2.7 21  4.0 
(Gain) on sale of property and equipment
(62) (0.3) —  — (62) N/A
Income from operations and operating margin
3,389  16.1 2,892  14.7 497  17.2 
Other income (expense), net
90  46  44  95.7 
Income before provision for income taxes
3,479  16.5 2,938  14.9 541  18.4 
Provision for income taxes
(1,258) (713) (545) 76.4 
Income (loss) from equity method investments 9  15  (6) (40.0)
Net income $ 2,230  10.6 $ 2,240  11.3 $ (10) (0.4)
Diluted EPS
$ 4.56  $ 4.51  $ 0.05  1.1 
Other Financial Information 2

Adjusted Income From Operations and Adjusted Operating Margin
$ 3,327  15.8 $ 3,026  15.3 $ 301  9.9 
Adjusted Diluted EPS
$ 5.28  $ 4.75  $ 0.53  11.2 

(a)    Exclusive of depreciation and amortization expense
N/A    Not Applicable
N/A    Not Applicable 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.

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December 31, 2025 Form 10-K

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Revenues - Reportable Business Segments and Geographic Markets

Revenues of $21,108 million across our business segments and geographies were as follows for the year ended December 31, 2025:

2025 as compared to 2024
Increase
(Dollars in millions) $ % CC % 3

Health Sciences $ 415  7.0  6.4 
Financial Services 420  7.3  6.8 
Products and Resources 503  10.5  9.7 
CMT 34  1.0  0.7 
Total revenues $ 1,372  7.0  6.4 

2025 as compared to 2024
Increase
(Dollars in millions) $ % CC % 3

North America $ 1,082  7.4  7.4 
United Kingdom 95  5.2  2.1 
Continental Europe 158  8.2  3.6 
Europe - Total 253  6.7  2.9 
Rest of World 37  2.9  4.7 
Total revenues $ 1,372  7.0  6.4 

Change in revenues was driven by the following factors:
• Revenue growth across all geographies was primarily driven by our Financial Services and Health Sciences segments, which were positively impacted by the ramp up of several recently won large deals;
• Our acquisition of Belcan contributed 260 basis points of growth to the overall revenue growth, including approximately 960 basis points of growth to our Products and Resources segment, primarily in North America and to a lesser extent the United Kingdom;
• Our Communications Media and Technology segment has seen weakness amongst communications and media customers, 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.

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December 31, 2025 Form 10-K

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Cost of Revenues (Exclusive of Depreciation and Amortization Expense)

é   $1,033M

é 0.6% as a % of revenues

¡ % of Revenues

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 driven by increased compensation costs, the dilutive impact of the acquisition of Belcan and resales of third-party products in connection with our integrated offerings strategy, partially offset by operational efficiencies and 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 net savings generated from our NextGen program.

é $17M

ê 1.0% as a % of revenues

¡ % of Revenues

Gain on Sale of Property and Equipment

During the year ended December 31, 2025, we realized a gain of $62 million on the sale of an office complex in India. For further detail see Note 5 to our consolidated financial statements.

Depreciation and Amortization Expense

Depreciation and amortization expense increased by 4.0%, and remained relatively flat as a percentage of revenues, in 2025 as compared to 2024. The increase in amortization expense, driven by intangible assets related to our acquisition of Belcan, was partially offset by the decline of depreciation expense, which was driven by actions taken under our NextGen program.

Operating Margin and Adjusted Operating Margin 4 - Overall

The increase in our 2025 GAAP operating margin and Adjusted Operating Margin 4 was primarily driven by net savings generated from our NextGen program, operational efficiencies and the beneficial impact of foreign currency exchange rate movements, partially offset by increased compensation costs and the dilutive impact of the acquisition of Belcan. In addition, our GAAP operating margin for 2025 was positively impacted by 30 basis points, or $62 million, from the gain on sale of property and equipment, and our GAAP operating margin for 2024 was negatively impacted by NextGen charges, both of which were excluded from our Adjusted Operating Margin. 4

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.

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A predominant portion of our costs in India are denominated in the Indian rupee, representing approximately 23% of our global operating costs during the year ended December 31, 2025. 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. Including the impact of the hedges, the depreciation of the Indian rupee positively impacted our operating margin for the year ended December 31, 2025 by 50 basis points as compared to the year ended December 31, 2024.
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 70 basis points in 2025. 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 approximately 17 basis points (excluding the impact of our cash flow hedges). In 2025, the settlement of our cash flow hedges negatively impacted our operating margin by approximately 15 basis points, compared to a positive impact of 5 basis points in 2024.

Segment Operating Profit

In the first quarter of 2025, 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 an allocation of corporate costs, which were previously included in "unallocated costs." We have reported 2025 segment operating profits using the new allocation methodology and have recast the 2024 results to conform to the new methodology. While we have recast the 2024 results to conform to the new methodology, it is impracticable for us to recast our 2023 segment operating results as the detailed information required for the allocation of such costs to the segments is not reasonably available.
Segment operating profit and operating margin percentage were as follows:

Segment operating profit % Segment operating margin

In 2025, segment operating margins across all our segments were positively impacted by net savings generated from our NextGen program, operational efficiencies and the beneficial impact of foreign currency exchange rate movements, partially offset by increased compensation costs. In 2025, segment operating profit in the Products and Resources segment was negatively impacted by the dilutive impact of the Belcan acquisition and by resales of third-party products in connection with our integrated offerings strategy.
Total segment operating profit was as follows for the year ended December 31:

(Dollars in millions) 2025
% of Revenues 2024
% of Revenues Increase / (Decrease)

Total segment operating profit $ 3,485  16.5  $ 3,152  16.0  $ 333 
Less: unallocated costs 96  0.4  260  1.3  (164)
Income from operations $ 3,389  16.1  $ 2,892  14.7  $ 497 

The decrease in unallocated costs for 2025 as compared to 2024 was primarily driven by the 2025 gain on sale of property and equipment and the absence of NextGen charges, partially offset by higher amortization of intangible assets and certain corporate costs.

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Other Income (Expense), Net

Total other income (expense), net consists primarily of foreign currency exchange gains and losses, interest income and interest expense. The following table sets forth total other income (expense), net for the years ended December 31:

(in millions) 2025 2024 Increase / Decrease
Foreign currency exchange gains (losses)
$ 15  $ (29) $ 44 
Gains on foreign exchange forward contracts not designated as hedging instruments
3  10  (7)
Foreign currency exchange gains (losses), net 18  (19) 37 
Interest income 105  119  (14)
Interest expense (37) (54) 17 
Other, net 4  —  4 
Total other income (expense), net $ 90  $ 46  $ 44 

The foreign currency exchan ge gains and losses were attributed to the remeasurement of net monetary assets and liabilities denominated in currencies other than the functional currencies of our subsidiaries. The gains on foreign exchange forward contracts not designated as hedging instruments related to the realized and unrealized gains and losses on cont racts en tered into to offset our foreign currency exposures. As of December 31, 2025, the notional value of our undesignated hedges was $748 million. Interest income declined in 2025 as compared to 2024, driven by a mix of lower invested balances and lower yields. Higher interest expense during 2024 was driven by the borrowing of $600 million under our revolving credit facility to partially fund the acquisition of Belcan during the third quarter of 2024. The borrowing was subsequently repaid in the fourth quarter of 2024 and first quarter of 2025.

Provision for Income Taxes

é $545M

¡ Effective Income Tax Rate é 11.9%

The effective income tax rate for 2025 was negatively impacted by the one-time, non-cash income tax expense of $390 million related to the enactment of the OBBBA. See Note 10 to our consolidated financial statements for additional information.

Net Income

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, partially offset by an increase in income from operations, including the $62 million gain on sale of property and equipment.

ê $10M

ê 0.7% as a % of revenues

¡ % of Revenues

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 2025 and NextGen charges in 2024. Our non-GAAP financial measure Adjusted Diluted EPS excludes unusual items, such as the one-time income tax expense related to the enactment of the OBBBA, the gain on sale of property and equipment and NextGen charges, and net non-operating foreign currency exchange gains or losses and the tax impact of all the applicable adjustments. For further detail on the NextGen charges, see Note 4 to our consolidated financial statements. 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

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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. Free cash flow is defined as cash flows from operating activities plus proceeds from sale of property and equipment, net of purchases of property and equipment.

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, as applicable, for the years ended December 31:

(Dollars in millions, except per share data) 2025 % of
Revenues 2024 % of
Revenues
GAAP income from operations and operating margin
$ 3,389  16.1  % $ 2,892  14.7  %
(Gain) on sale of property and equipment (1)
(62) (0.3) —  — 
NextGen charges (2)
—  —  134  0.6 
Adjusted Income From Operations and Adjusted Operating Margin
$ 3,327  15.8  % $ 3,026  15.3  %

GAAP diluted EPS $ 4.56  $ 4.51 
Effect of above adjustments, pre-tax
(0.13) 0.27 
Effect of non-operating foreign currency exchange (gains) losses, pre-tax (3)
(0.04) 0.04 
Tax effect of above adjustments (4)
0.09  (0.07)
One-time income tax expense related to the enactment of the OBBBA (5)
0.80  — 

Adjusted Diluted EPS $ 5.28  $ 4.75 

Net cash provided by operating activities $ 2,883  $ 2,124 
Purchases of property and equipment (288) (297)
Proceeds from sale of property and equipment
70  — 
Free cash flow $ 2,665  $ 1,827 

(1)     During 2025, we realized a gain of $62 million on the sale of an office complex in India. S e e Note 5 to our consolidated financial statements for additional information.
(2)     Consists of employee separation, facility exit and other costs incurred in connection with the NextGen program. See Note 4 to our consolidated financial statements for additional information.
(3)    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 consolidated statements of operations.

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(4)    Presented below are the tax impacts of our non-GAAP adjustments to pre-tax income for the years ended December 31:

(in millions) 2025 2024
Non-GAAP income tax benefit (expense) related to:
Gain on sale of property and equipment
$ (9) $ — 
NextGen charges
—  34 
Foreign currency exchange gains and losses (33) (4)

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 consolidated statements of operations.
(5)    In the third quarter of 2025, we recorded a one-time, non-cash income tax expense of $390 million related to the enactment of the OBBBA. See Note 10 to our consolidated financial statements for additional information.

Liquidity and Capital Resources

Cash generated from operations has historically been our primary source of liquidity to fund operations and investments t o grow our business. As of December 31, 2025, we had cash, cash equivalents and short-term investme nts of $1,914 million and restricted cash of $733 million (see Note 18 to our consolidated financial statements). Additionally, as of December 31, 2025, we had available capacity under our credit facilities of approximately $1.85 billion.
The following table provides a summary of our cash flows for the years ended December 31:

(in millions) 2025 2024 Increase / Decrease
Net cash provided by (used in):
Operating activities $ 2,883  $ 2,124  $ 759 
Investing activities (230) (1,646) 1,416 
Financing activities
(2,272) (915) (1,357)
Other Cash Flow Information 5

Free cash flow 2,665  1,827  838 

Operating activities 5
The increase in cash provided by operating activities in 2025 compared to 2024 was primarily driven by the increase in net income, excluding the one-time, non-cash income tax expense of $390 million we recorded as a result of the enactment of the OBBBA, as well as the $360 million payment we made in January 2024 in relation to our dispute with the ITD (see Note 10 to our consolidated financial statements), which reduced cash from operating activities in 2024.
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 81 days as of December 31, 2025, 78 days as of December 31, 2024 and 77 days as of December 31, 2023.
Investing activities
The decrease in cash used in investing activities in 2025 compared to 2024 was driven by payments for business acquisitions in 2024 and the proceeds from the sale of an office complex in India in 2025, partially offset by net maturities of investments in 2024.
Financing activities
The increase in cash used in financing activities in 2025 compared to 2024 was primarily driven by increased repurchases of common stock during 2025 and the borrowing under the revolving credit facility to finance the acquisition of Belcan in 2024.

5 Free cash flow is not a measure of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information.

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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. During the year ended December 31, 2025, we repaid the $300 million balance that was outstanding under the revolving credit facility, and had no outstanding balance as of December 31, 2025. 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 December 31, 2025 and through the date of this filing. See Note 9 to our consolidated financial statements.
Capital Allocation Framework

Acquisitions

Share repurchases

Dividend payments

Our capital allocation framework anticipates the deployment of approximately 50% of our free cash flow 6 for acquisitions and 50% for share repurchases and 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 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 and servicing our debt for the next twelve months. Additionally, we have purchase commitments of approximately $2.3 billion that will be paid over the next five years, of which approximately $800 million will be paid during the next twelve months. In addition, see Note 6 to our consolidated financial statements for a description of our operating lease obligations.
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.

Critical Accounting Estimates

Management’s discussion and analysis of our financial condition and results of operations is based on our accompanying consolidated financial statements that have been prepared in accordance with GAAP. We base our estimates on historical experience, current trends and on various other assumptions that are believed to be relevant at the time our consolidated financial statements are prepared. We evaluate our estimates on a continuous basis. However, the actual amounts may differ from the estimates used in the preparation of our consolidated financial statements.
We believe the following accounting estimates are the most critical to aid in fully understanding and evaluating our consolidated financial statements as they require the most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. Changes to these estimates could have a material effect on our results of operations and financial condition. Our significant accounting policies are described in Note 1 to our consolidated financial statements.

6 Free cash flow is not a measure of financial performance prepared in accordance with GAAP. See “Non-GAAP Financial Measures” for more information.

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Revenue Recognition . Revenues related to fixed-price contracts for application development and systems integration services, consulting or other technology services are recognized as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized on the basis of the percentage that each contract’s total labor cost to-date bears to the total expected labor costs. Revenues related to fixed-price application maintenance, quality engineering and assurance and business process services are recognized using the cost-to-cost method, if the right to invoice is not representative of the value being delivered. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information. Such estimates and changes in estimates involve the use of judgment. The cumulative impact of any change in estimates is reflected in the financial reporting period in which the change in estimate becomes known. Net changes in estimates of such future costs were immaterial to the consolidated results of operations for the periods presented.
Income Taxes. Determining the consolidated provision for income taxes, deferred income tax assets (and related valuation allowance, if any) and liabilities requires significant judgment. We are required to calculate and provide for income taxes in each of the jurisdictions where we operate. Changes in the geographic mix of income before taxes or estimated level of annual pre-tax income can affect our overall effective income tax rate. In addition, transactions between our affiliated entities are arranged in accordance with applicable transfer pricing laws, regulations and relevant guidelines. As a result, and due to the interpretive nature of certain aspects of these laws and guidelines, we have pending applications for APAs before the taxing authorities in some of our most significant jurisdictions. It could take years for the relevant taxing authorities to negotiate and conclude these applications. The consolidated provision for income taxes may change period to period based on changes in facts and circumstances, such as settlements of income tax audits, the expiration of the applicable statute of limitations or finalization of our applications for APAs.
Our provision for income taxes also includes the impact of reserves established for uncertain income tax positions, as well as the related interest, which may require us to apply judgment to complex issues and may require an extended period of time to resolve. We apply a “more likely than not” threshold when assessing the need for a reserve for an uncertain tax position, which involves significant judgment. Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given that the final outcome of these matters will not differ from our recorded amounts. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the expiration of the applicable statute of limitations. Additionally, we have tax positions that we believe are more likely than not to be realized and for which we have therefore not established a reserve. To the extent that the final outcome of these matters differs from the amounts recorded, such differences may materially impact, positively or negatively, the provision for income taxes in the period in which such determination is made.
Business Combinations, Goodwill and Intangible Assets . Goodwill and intangible assets, including indefinite-lived intangible assets, arise from the accounting for business combinations. We account for business combinations using the acquisition method which requires us to estimate the fair value of identifiable assets acquired, liabilities assumed, including any contingent consideration, and any noncontrolling interest in the acquiree to properly allocate purchase price to the individual assets acquired and liabilities assumed. The allocation of the purchase price utilizes estimates and assumptions in determining the fair values of identifiable assets acquired and liabilities assumed, especially with respect to intangible assets, including the timing and amount of forecasted revenues and cash flows, anticipated growth rates, client attrition rates and the discount rate reflecting the risk inherent in future cash flows.
At each acquisition date, we allocate goodwill and intangible assets to our reporting units based on how we expect each reporting unit to benefit from the respective business combination. A reporting unit is defined as an operating segment or one level below an operating segment. While we manage the business through our four industry-based operating segments, we have identified seven industry-based reporting units for purposes of goodwill allocation and impairment testing. We exercise judgment to allocate goodwill to the reporting units expected to benefit from each business combination. Goodwill is tested for impairment at the reporting unit level on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Such events or circumstances may include significant changes in the business climate, the regulatory environment, business strategies, operating performance, or the competitive landscape. Evaluating goodwill for impairment requires judgment, including the identification of reporting units, assignment of assets, liabilities and goodwill to reporting units and determination of the fair value of each reporting unit.
We estimate the fair value of our reporting units using a combination of an income approach, utilizing a discounted cash flow analysis, and a market approach, using market multiples. Under the income approach, we estimate projected future cash flows, the timing of such cash flows and long-term growth rates and determine the appropriate discount rate that reflects the risk inherent in the projected future cash flows. The discount rate used is based on a market participant weighted-average cost of capital and may be adjusted for the relevant risk associated with business-specific characteristics and the uncertainty related to the reporting unit’s ability to execute on the projected future cash flows. Under the market approach, we estimate fair value based on market multiples of revenues and earnings derived from comparable publicly-traded companies with characteristics

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similar to the reporting unit. The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions and other factors. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit.
Based on our most recent evaluation of goodwill performed during the fourth quarter of 2025, we concluded that the goodwill in each of our reporting units was not at risk of impairment. As of December 31, 2025, our goodwill balance was $7,106 million.
We review our finite-lived assets, including our finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. The carrying amount may not be recoverable when the sum of undiscounted expected future cash flows is less than the carrying amount of such asset groups. The impairment loss is determined as the amount by which the carrying amount of the asset group exceeds its fair value. Assessing the fair value of asset groups involves significant estimates and assumptions including estimation of future cash flows, the timing of such cash flows and discount rates reflecting the risk inherent in future cash flows.

Recently Adopted and New Accounting Pronouncements

See Note 1 to our consolidated financial statements for additional information.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Foreign Currency Risk
We are exposed to foreign currency exchange rate risk in the ordinary course of doing business as we transact or hold a portion of our funds in foreign currencies. Accordingly, we periodically evaluate the need for hedging strategies, including the use of derivative financial instruments, to mitigate the effect of foreign currency exchange rate fluctuations and expect to continue to use such instruments in the future to reduce foreign currency exposure to changes in the value of certain foreign currencies. All hedging transactions are authorized and executed pursuant to regularly reviewed policies and procedures.

Revenues from our clients in the United Kingdom, Continental Europe and Rest of World represented 9.1%, 9.9% and 6.2%, respectively, of our 2025 revenues, and are typically denominated in currencies other than the U.S. dollar. Accordingly, our revenues may be affected by fluctuations in the exchange rates, primarily the British pound and the Euro , a s compared to the U.S. dollar.

A predominant portion of our costs in India are denominated in the Indian rupee, representing 23% of our global operating costs during 2025, and are subject to foreign currency exchange rate fluctuations. These foreign currency exchange rate fluctuations have an impact on our results of operations.

We have entered into a series of foreign exchange forward contracts that are designated as cash flow hedges of certain Indian rupee denominated payments in India. These U.S. dollar / Indian rupee hedges are intended to partially offset the impact of movement of exchange rates on future operating costs. As of December 31, 2025, the notional value and weighted average contract rates of these contracts by year of maturity were as follows:

Notional Value
(in millions) Weighted Average Contract Rate (Indian rupee to U.S. dollar)
2026
$ 2,290  88.6 
2027
1,020  91.7 
Total $ 3,310  89.5 

As of December 31, 2025, the net unrealized loss on our outstanding foreign exchange forward contracts designated as cash flow hedges was $84 million. Based upon a sensitivity analysis at December 31, 2025, which estimates the fair value of the contracts assuming certain market exchange rate fluctuations, a 10.0% change in the foreign currency exchange rate against the U.S. dollar with all other variables held constant would have resulted in a change in the fair value of our foreign exchange forward contracts designated as cash flow hedges of approximately $310 million.

A portion of our balance sheet is exposed to foreign currency exchange rate fluctuations, which may result in non-operating foreign currency exchange gains or losses upon remeasurement. In 2025, we reported foreign currency exchange gains, exclusive of hedging gains, of $15 million, which were primarily attributed to the remeasurement of net monetary assets and liabilities denominated in currencies other than the functional currencies of our subsidiaries. We use foreign exchange

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forward contracts that are scheduled to mature in the first quarter of 2026 to provide an economic hedge against balance sheet exposure to certain monetary assets and liabilities denominated in currencies other than the functional currency of the subsidiary. At December 31, 2025, the notional value of these outstanding contracts was $748 million and the net unrealized gain was $1 million. Based upon a sensitivity analysis of our foreign exchange forward contracts at December 31, 2025, which estimates the fair value of the contracts assuming certain market exchange rate fluctuations, a 10.0% change in the foreign currency exchange rate against the U.S. dollar with all other variables held constant would have resulted in a change in the fair value of our foreign exchange forward contracts not designated as hedges of approximately $4 million.

Interest Rate Risk
We have a Credit Agreement providing for a $650 million Term Loan and a $1,850 million unsecured revolving credit facility, which are due to mature in October 2027. As of December 31, 2025, the Credit Agreement requires interest to be paid, at our option, at either the Term Benchmark, Adjusted Daily Simple RFR or the ABR Rate (each as defined in the Credit Agreement), plus, in each case, an Applicable Margin (as defined in the Credit Agreement). As of December 31, 2025 we had no outstanding balance under our revolving credit facility. The Term Loan is a Term Benchmark loan. Thus, our debt exposes us to market risk from changes in interest rates. We performed a sensitivity analysis to determine the effect of interest rate fluctuations on our interest expense. A 100 basis point change in interest rates, with all other variables held constant, would have an immaterial effect on our reported interest expense.
We have $207 million of cash equivalents, and $13 million of short-term investments as of December 31, 2025. Our cash equivalents, which consist of money market funds and time deposits, and our short-term investments, which consist primarily of a U.S. dollar denominated investment in a fixed income mutual fund, are exposed to fluctuations in interest rates, which may affect our interest income and the fair market value of the instruments. As of December 31, 2025, a 100 basis point change in interest rates, with all other variables held constant, would have an immaterial effect on the fair value of our cash equivalents as well as short-term investments.
Information provided by the sensitivity analysis of foreign currency risk and interest rate risk does not necessarily represent the actual changes that would occur under normal market conditions.

Item 8. Financial Statements and Supplementary Data
The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report on Form 10-K. A list of the financial statements filed herewith is found in Part IV, “ Item 15. Exhibits, Financial Statements and Financial Statement Schedule. ”

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.

Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, under the supervision and with the participation of our chief executive officer and our chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of December 31, 2025. Based on this evaluation, our chief executive officer and our chief financial officer concluded that, as of December 31, 2025, our disclosure controls and procedures were effective.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) that occurred during the fiscal quarter ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended, and is a process designed by, or under the supervision of, our chief executive and chief financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
• Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of our management and directors; and
• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Our management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in  Internal Control-Integrated Framework  (2013).
Based on its evaluation, our management has concluded that, as of December 31, 2025, our internal control over financial reporting was effective. PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the financial statements included in this annual report, has issued an attestation report on our internal control over financial reporting, as stated in their report which is included on page F-2.
Inherent Limitations of Internal Controls
Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Item 9B. Other Information
(c) Trading Plans
During the three months ended December 31, 2025, n o director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408(a) of Regulation S-K).

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information relating to our executive officers in response to this item is contained in part under the caption “Information About Our Executive Officers” in Part I of this Annual Report on Form 10-K.
We have adopted a written code of ethics, entitled “Code of Ethics,” that applies to all of our directors, executive officers and employees, including our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions. We make available our code of ethics free of charge through our website which is located at www.cognizant.com . We intend to post on our website all disclosures that are required by law or Nasdaq Stock Market listing standards concerning any amendments to, or waivers from, any provision of our code of ethics within four business days following the date of the amendment or waiver.
We have adopted an insider trading policy governing purchases, sales and/or other dispositions of our securities by our directors, officers, employees and other covered persons, as well as the Company itself, that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations and the exchange listing standards applicable to us. A copy of our insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.
The remaining information required by this item will be included under the caption "Corporate governance" in our 2026 Proxy Statement, which we expect to be filed with the SEC pursuant to Regulation 14A not later than 120 days after the end of the fiscal year ended December 31, 2025 and is incorporated herein by reference to such proxy statement.

Item 11. Executive Compensation
The information required by this item will be included in our 2026 Proxy Statement under the captions "Corporate governance" and "Compensation discussion and analysis" and is incorporated herein by reference to such proxy statement.

I tem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item will be included in our 2026 Proxy Statement under the captions "Corporate governance" and "Compensation discussion and analysis" and is incorporated herein by reference to such proxy statement.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item will be included in our 2026 Proxy Statement under the caption "Corporate governance" and is incorporated herein by reference to such proxy statement.

Item 14. Principal Accountant Fees and Services

The information required by this item will be included in our 2026 Proxy Statement under the caption "Audit matters" and is incorporated herein by reference to such proxy statement.

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PART IV

Item 15. Exhibits, Financial Statement Schedules

(a)     (1) Consolidated Financial Statements.
          Reference is made to the Index to Consolidated Financial Statements on Page F-1.

    (2) Consolidated Financial Statement Schedule.
          Reference is made to the Index to Financial Statement Schedule on Page F-1.

    (3) Exhibits.

Schedules other than as listed above are omitted as not required or inapplicable or because the required information is provided in the consolidated financial statements, including the notes thereto.

EXHIBIT INDEX
    Incorporated by Reference
Number Exhibit Description Form File No. Exhibit Date Filed or Furnished
Herewith
2.1 Agreement and Plan of Merger, dated June 5, 2024, among Propulsion Holdings, LLC, Cognizant Domestic Holdings Corporation, Eagle Acquisition Sub, LLC, and Propulsion Intermediate, LP
8-K
000-24429
2.1  6/10/2024
3.1 Amended and Restated Certificate of Incorporation, dated June 4, 2024
8-K 000-24429 3.1  6/7/2024
3.2 Amended and Restated Bylaws, as adopted on September 14, 2018
8-K 000-24429 3.1  9/20/2018
4.1 Specimen Certificate for shares of Class A common stock
S-4/A 333-101216 4.2  1/30/2003
4.2 Description of Capital Stock
10-K 000-24429 4.2  2/14/2020
10.1† Form of Indemnification Agreement for Directors and Officers
10-Q 000-24429 10.1  8/7/2013
10.2† Form of Amended and Restated Executive Employment and Non-Disclosure, Non-Competition, and Invention Assignment Agreement, between the Company and each of the following current Executive Officers: Balu Ganesh Ayyar and John Kim
10-K 000-24429 10.3  2/27/2018
10.3† 2022 Form of Executive Employment and Non-Disclosure, Non-Competition and Invention Assignment Agreement between the Company and each of the following current Executive Officers: Surya Gummadi, Kathryn Diaz and Jatin Dalal
10-Q 000-24429 10.1  7/28/2022
10.4† Executive Employment and Non-Disclosure, Non-Competition and Invention Assignment Agreement, entered into between the Company and Ravi Kumar Singisetti, dated effective January 12, 2023
8-K 000-24429 10.2  1/12/2023
10.5† Offer Letter, by and between the Company and Ravi Kumar Singisetti, acknowledged and agreed January 9, 2023
8-K 000-24429 10.1  1/12/2023
10.6† Offer Letter, by and between the Company and Jatin Dalal, acknowledged and agreed September 25, 2023
8-K 000-24429 10.1  9/28/2023
10.7† Description of Reimbursement Arrangement with Jatin Dalal
10-Q
000-24429 10.1  10/30/2024
10.8† Non-Employee Director Compensation Guidelines (effective as of June 3 , 202 5 )
10-Q
000-24429
10.1  7/31/2025

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    Incorporated by Reference
Number Exhibit Description Form File No. Exhibit Date Filed or Furnished
Herewith
10.9† 2004 Employee Stock Purchase Plan (as amended and restated effective as of January 1, 2022)
10-K 000-24429 10.7  2/16/2022
10.10†
Cognizant Technology Solutions Corporation Amended and Restated 2009 Incentive Compensation Plan, effective March 9, 2015
10-Q 000-24429 10.1  5/4/2015
10.11†
Form of Restricted Stock Unit Award Agreement Non-Employee Director Deferred Issuance
8-K 000-24429 10.7  7/6/2009
10.12†
Form of Cognizant Technology Solutions Corporation Notice of Award of Restricted Stock Units Non-Employee Director Deferred Issuance
8-K 000-24429 10.8  7/6/2009
10.13†
Cognizant Technology Solutions Corporation 2017 Incentive Award Plan
8-K 000-24429 10.1  6/7/2017
10.14†
Form of Restricted Stock Unit Award Grant Notice
10-Q 000-24429 10.2  8/3/2017
10.15†
Form of Performance-Based Restricted Stock Unit Award Grant Notice
10-Q 000-24429 10.3  8/3/2017
10.16†
Form of Restricted Stock Unit Award Grant Notice
10-Q 000-24429 10.4  8/3/2017
10.17†
Form of Stock Option Grant Notice and Stock Option Agreement
10-Q 000-24429 10.5  8/3/2017
10.18† Form of Restricted Stock Unit Award Grant Notice (March 5, 2020 form)
10-Q 000-24429 10.1  5/8/2020
10.19† Form of Performance-Based Restricted Stock Unit Award Grant Notice (March 5, 2020 form)
10-Q 000-24429 10.2  5/8/2020
10.20†
Cognizant Technology Solutions Corporation 2023 Incentive Award Plan
S-8
333-272444
99.1  6/6/2023
10.21† Form of Cognizant Technology Solutions Corporation Restricted Stock Unit Award Grant Notice for Employees, including Executive Officers
10-K
000-24429 10.21  2/12/2025
10.22† Form of Cognizant Technology Solutions Corporation Performance-Based Restricted Stock Unit Award Grant Notice
10-K
000-24429 10.22  2/12/2025
10.23† Form of Cognizant Technology Solutions Corporation Restricted Stock Unit Award Grant Notice for Non-Employee Director (Non-Deferred )
10-K
000-24429 10.23  2/12/2025
10.24† Form of Cognizant Technology Solutions Corporation Restricted Stock Unit Award Grant Notice Non-Employee Director (Deferred Settlement)
10-K
000-24429 10.24  2/12/2025
10.25† Form of Cognizant Technology Solutions Corporation Deferred Stock Unit Award Grant Notice Non-Employee Director (for Deferred Equity in lieu of Cash Retainer)
10-K
000-24429 10.25  2/12/2025
10.26† Letter Agreement with each of Steven Rohleder and Sandra Wijnberg regarding grant of dividend equivalents on previously issued Deferred Stock Units
10-Q
000-24429
10.8  8/3/2023
10.27† Retirement, Death and Disability Policy
10-Q
000-24429
10.1  7/30/2020
10.28† Cognizant Technology Solutions Corporation Senior Executive Cash Severance Policy
8-K
000-24429
10.1  3/6/2023

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    Incorporated by Reference
Number Exhibit Description Form File No. Exhibit Date Filed or Furnished
Herewith
10.29 Credit Agreement, dated as of October 6, 2022, among Cognizant Technology Solutions Corporation, Cognizant Worldwide Limited, certain financial institutions party thereto and JPMorgan Chase Bank, N.A., as administrative agent
8-K 000-24429 10.1  10/7/2022
10.30 Amendment No. 1 to the Credit Agreement, dated as of October 6, 2022, among Cognizant Technology Solutions Corporation, Cognizant Worldwide Limited, certain financial institutions party thereto and JPMorgan Chase Bank, N.A., as administrative agent
10-Q
000-24429 10.2  7/31/2024
10.31† First Amendment to the 2004 Employee Stock Purchase Plan (as amended and restated effective as of January 1, 2022)
S-8
333-272444
99.3  6/6/2023
19.1 Cognizant Technology Solutions Corporation Insider Trading Policy
10-K
000-24429 19.1  2/12/2025
21.1 List of subsidiaries of the Company
Filed
23.1 Consent of PricewaterhouseCoopers LLP
Filed
31.1 Certification Pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer)
Filed
31.2 Certification Pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer)
Filed
32.1 Certification Pursuant to 18 U.S.C. Section 1350 (Chief Executive Officer)
Furnished
32.2 Certification Pursuant to 18 U.S.C. Section 1350 (Chief Financial Officer)
Furnished
97.1 Cognizant Technology Solutions Corporation Rule 10D-1 Compensation Recoupment (Clawback) Policy adopted September 6, 2023
10-K
000-24429 97.1 2/14/2024
101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. Filed
101.SCH Inline XBRL Taxonomy Extension Schema Document Filed
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document Filed
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document Filed
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document Filed
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document Filed
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) Filed

† A management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(a)(3) of Form 10-K.

Item 16. Form 10-K Summary
None.

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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

By:       / S /    R AVI  K UMAR S

  Ravi Kumar S,
    Chief Executive Officer
    (Principal Executive Officer)

Date: February 12, 2026

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature   Title   Date

    /s/    R AVI  K UMAR S
Chief Executive Officer and Director
(Principal Executive Officer) February 12, 2026
Ravi Kumar S    

/s/    J ATIN D ALAL
Chief Financial Officer
(Principal Financial Officer) February 12, 2026
Jatin Dalal
   

/s/    A LINA K ERDMAN
Senior Vice President, Controller and Chief Accounting Officer
(Principal Accounting Officer) February 12, 2026
Alina Kerdman

/s/    S TEPHEN J. R OHLEDER
Chair of the Board and Director February 12, 2026
Stephen J. Rohleder    

/s/     Z EIN  A BDALLA
  Director February 12, 2026
Zein Abdalla  

/s/     V INITA B ALI
Director February 12, 2026
Vinita Bali

/s/    E RIC B RANDERIZ
  Director   February 12, 2026
Eric Branderiz
 

/s/     A RCHANA D ESKUS
Director February 12, 2026
Archana Deskus

/s/    J OHN M. D INEEN
  Director   February 12, 2026
John M. Dineen

/s/    L EO S. M ACKAY , J R .
  Director   February 12, 2026
Leo S. Mackay, Jr.

/s/    M ICHAEL P ATSALOS -F OX
Director February 12, 2026
Michael Patsalos-Fox

/s/    A BRAHAM S CHOT
Director February 12, 2026
Abraham Schot

/s/    K ARIMA S ILVENT
Director February 12, 2026
Karima Silvent

/s/    J OSEPH M. V ELLI
  Director February 12, 2026
Joseph M. Velli

/s/    S ANDRA S. W IJNBERG
Director February 12, 2026
Sandra S. Wijnberg
    

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COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE
 

     Page

Consolidated Financial Statements:   
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 238 )
     F- 2

Consolidated Statements of Financial Position as of December 31, 202 5 and 202 4
     F- 4

Consolidated Statements of Operations for the years ended December 31, 202 5 , 202 4 and 202 3
     F- 5

Consolidated Statements of Comprehensive Income for the years ended December 31, 202 5 , 202 4 and 202 3
     F- 6

Consolidated Statements of Stockholders’ Equity for the years ended December  31, 202 5 , 202 4 and 202 3
     F- 7

Consolidated Statements of Cash Flows for the years ended December 31, 202 5 , 202 4 and 202 3
     F- 8

Notes to Consolidated Financial Statements
     F- 9

Financial Statement Schedule:   
Schedule of Valuation and Qualifying Accounts for the years ended December 31, 202 5 , 202 4 and 202 3
     F- 39

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Cognizant Technology Solutions Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statements of financial position of Cognizant Technology Solutions Corporation and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Cognizant F-2
December 31, 2025 Form 10-K

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition – Expected Labor Costs to Complete for Certain Fixed-Price Contracts

As described in Notes 1 and 2 to the consolidated financial statements, fixed-price contracts comprised $10.0 billion of the Company’s total revenues for the year ended December 31, 2025, which includes performance obligations where control is transferred over time. For performance obligations where control is transferred over time, revenues are recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based primarily on the nature of the deliverables to be provided. Management recognizes revenues related to fixed-price contracts for application development and systems integration services, consulting or other technology services as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized on the basis of the percentage that each contract’s total labor cost to date bears to the total expected labor costs. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information. Revenues related to fixed-price application maintenance, quality engineering and assurance as well as business process services are recognized based on management’s right to invoice for services performed for contracts in which the invoicing is representative of the value being delivered. If management’s invoicing is not consistent with the value delivered, revenues are recognized as the service is performed based on the cost-to-cost method described above.

The principal considerations for our determination that performing procedures relating to revenue recognition – expected labor costs to complete for certain fixed-price contracts is a critical audit matter are the significant judgment by management when developing the estimated total expected labor costs to complete fixed-price contracts and the significant auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence relating to management’s estimate of total expected labor costs .

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the development of the estimated total expected labor costs to complete fixed-price contracts. These procedures also included, among others, evaluating and testing management’s process for developing the estimated total expected labor costs for a sample of contracts, which included evaluating the reasonableness of the total expected labor cost assumptions used by management. Evaluating the reasonableness of the assumptions related to the total expected labor costs involved assessing management’s ability to reasonably develop total expected labor costs by (i) performing a comparison of expected labor cost metrics at project inception with actual cost metrics for similar completed projects and (ii) evaluating the timely identification of circumstances that may warrant a modification to previous labor cost estimates, including actual labor costs in excess of estimates.

/s/ PricewaterhouseCoopers LLP
New York, New York
February 12, 2026

We have served as the Company’s auditor since 1997.

Cognizant F-3
December 31, 2025 Form 10-K

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COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 
December 31,
(in millions, except par values) 2025 2024
Assets
Current assets:
Cash and cash equivalents $ 1,901   $ 2,231  
Short-term investments 13   12  
Trade accounts receivable, net 4,439   4,059  
Other current assets 1,465   1,202  
Total current assets 7,818   7,504  
Property and equipment, net
933   994  
Operating lease assets, net 573   552  
Goodwill 7,106   6,953  
Intangible assets, net 1,417   1,599  
Deferred income tax assets, net 967   1,248  
Long-term investments 111   90  
Other noncurrent assets 1,767   1,026  
Total assets $ 20,692   $ 19,966  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 308   $ 340  
Deferred revenue 501   450  
Short-term debt 33   33  
Operating lease liabilities 153   152  
Accrued expenses and other current liabilities 2,664   2,610  
Total current liabilities 3,659   3,585  
Deferred revenue, noncurrent 37   30  
Operating lease liabilities, noncurrent 423   420  
Deferred income tax liabilities, net 168   154  
Long-term debt 543   875  

Other noncurrent liabilities 847   494  
Total liabilities 5,677   5,558  
Commitments and contingencies (See Note 14 )

Stockholders’ equity:
Preferred stock, $ 0.10 par value, 15 shares authorized, none issued
—   —  
Class A common stock, $ 0.01 par value, 1,000 shares authorized, 479 and 495 shares issued and outstanding as of December 31, 2025 and 2024, respectively
5   5  
Additional paid-in capital 12   13  
Retained earnings 15,158   14,686  
Accumulated other comprehensive income (loss) ( 160 ) ( 296 )
Total stockholders’ equity 15,015   14,408  
Total liabilities and stockholders’ equity $ 20,692   $ 19,966  

The accompanying notes are an integral part of the consolidated financial statements.

Cognizant F-4
December 31, 2025 Form 10-K

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COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS

 
  Year Ended December 31,
(in millions, except per share data) 2025 2024 2023
Revenues $ 21,108   $ 19,736   $ 19,353  
Operating expenses:
Cost of revenues (exclusive of depreciation and amortization expense shown separately below)
13,991   12,958   12,664  
Selling, general and administrative expenses
3,240   3,223   3,252  
Restructuring charges
—   134   229  
Depreciation and amortization expense 550   529   519  
(Gain) on sale of property and equipment
( 62 ) —   —  
Income from operations 3,389   2,892   2,689  
Other income (expense), net:
Interest income
105   119   126  
Interest expense
( 37 ) ( 54 ) ( 41 )
Foreign currency exchange gains (losses), net
18   ( 19 ) 2  
Other, net
4   —   11  
Total other income (expense), net 90   46   98  
Income before provision for income taxes 3,479   2,938   2,787  
Provision for income taxes ( 1,258 ) ( 713 ) ( 668 )
Income (loss) from equity method investments 9   15   7  
Net income $ 2,230   $ 2,240   $ 2,126  
Basic earnings per share $ 4.57   $ 4.52   $ 4.21  
Diluted earnings per share $ 4.56   $ 4.51   $ 4.21  
Weighted average number of common shares outstanding—Basic 488   496   505  
Dilutive effect of shares issuable under stock-based compensation plans 1   1   —  
Weighted average number of common shares outstanding—Diluted 489   497   505  

The accompanying notes are an integral part of the consolidated financial statements.

Cognizant F-5
December 31, 2025 Form 10-K

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COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 
  Year Ended December 31,
(in millions) 2025 2024 2023
Net income $ 2,230   $ 2,240   $ 2,126  
Change in Accumulated other comprehensive income (loss), net of tax:
Foreign currency translation adjustments 266   ( 150 ) 144  
Unrealized gains and losses on cash flow hedges
( 38 ) ( 35 ) 61  
Changes in net defined benefit obligations
( 92 ) ( 17 ) —  
Other comprehensive income (loss) 136   ( 202 ) 205  
Comprehensive income $ 2,366   $ 2,038   $ 2,331  

The accompanying notes are an integral part of the consolidated financial statements.

Cognizant F-6
December 31, 2025 Form 10-K

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COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

 
(in millions, except per share data) Class A Common Stock Additional
Paid-in
Capital Retained
Earnings Accumulated
Other
Comprehensive
Income (Loss)  Total
Shares     Amount
Balance, December 31, 2022
509   $ 5   $ 15   $ 12,588   $ ( 299 ) $ 12,309  
Net income —  —  —  2,126   —  2,126  
Other comprehensive income (loss) —  —  —  —  205   205  
Common stock issued, stock-based compensation plans 4   —  71   —  —  71  
Stock-based compensation expense —  —  176   —  —  176  
Repurchases of common stock ( 15 ) —  ( 247 ) ( 823 ) —  ( 1,070 )
Dividends declared, $ 1.16 per share
—  —  —  ( 590 ) —  ( 590 )
Balance, December 31, 2023
498   5   15   13,301   ( 94 ) 13,227  
Net income —  —  —  2,240   —  2,240  
Other comprehensive income (loss) —  —  —  —  ( 202 ) ( 202 )
Common stock issued, stock-based compensation plans 4   —  63   —  —  63  
Common stock issued, acquisition related
1   —  113   —  —  113  
Stock-based compensation expense —  —  175   —  —  175  
Repurchases of common stock ( 8 ) —  ( 353 ) ( 255 ) —  ( 608 )
Dividends declared, $ 1.20 per share
—  —  —  ( 600 ) —  ( 600 )
Balance, December 31, 2024
495   5   13   14,686   ( 296 ) 14,408  
Net income —  —  —  2,230   —  2,230  
Other comprehensive income (loss) —  —  —  —  136   136  
Common stock issued, stock-based compensation plans 3   —  58   —  —  58  
Stock-based compensation expense —  —  181   —  —  181  
Repurchases of common stock ( 19 ) —  ( 240 ) ( 1,148 ) —  ( 1,388 )
Dividends declared, $ 1.24 per share
—  —  —  ( 610 ) —  ( 610 )
Balance, December 31, 2025
479   $ 5   $ 12   $ 15,158   $ ( 160 ) $ 15,015  

The accompanying notes are an integral part of the consolidated financial statements.

Cognizant F-7
December 31, 2025 Form 10-K

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COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

  Year Ended December 31,
(in millions) 2025 2024 2023
Cash flows from operating activities:
Net income $ 2,230   $ 2,240   $ 2,126  
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 550   542   555  
Deferred income taxes 327   ( 355 ) ( 339 )
Stock-based compensation expense 181   175   176  
Gain on sale of property and equipment
( 62 ) —   —  

Other, net
( 5 ) 32   1  
Changes in operating assets and liabilities, net of effects of businesses acquired:

Trade accounts receivable ( 366 ) ( 49 ) ( 43 )
Other current and noncurrent assets ( 118 ) ( 386 ) 123  
Accounts payable ( 2 ) ( 23 ) ( 23 )
Deferred revenue, current and noncurrent 55   44   ( 4 )
Other current and noncurrent liabilities 93   ( 96 ) ( 242 )
Net cash provided by operating activities 2,883   2,124   2,330  
Cash flows from investing activities:
Purchases of property and equipment ( 288 ) ( 297 ) ( 317 )
Proceeds from sale of property and equipment
70   —   —  
Purchases of available-for-sale investment securities —   —   ( 59 )
Proceeds from maturity of available-for-sale investment securities —   —   285  
Purchases of held-to-maturity investment securities
—   —   ( 3 )
Proceeds from maturity of held-to-maturity investment securities
—   3   24  
Purchases of other investments
( 17 ) ( 2 ) ( 379 )
Proceeds from maturity or sale of other investments
5   265   527  
Payments for business combinations, net of cash acquired —   ( 1,615 ) ( 409 )
Net cash (used in) investing activities ( 230 ) ( 1,646 ) ( 331 )
Cash flows from financing activities:
Issuance of common stock under stock-based compensation plans 58   63   71  

Repurchases of common stock ( 1,378 ) ( 605 ) ( 1,064 )
Repayment of Term Loan borrowings and earnout and finance leases obligations
( 42 ) ( 73 ) ( 25 )
Proceeds from borrowings under the revolving credit facility
— 600   —  
Repayment of notes outstanding under the revolving credit facility ( 300 ) ( 300 ) —  

Dividends paid ( 610 ) ( 600 ) ( 591 )
Net cash (used in) financing activities ( 2,272 ) ( 915 ) ( 1,609 )
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents
22   ( 49 ) 33  
Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents
403   ( 486 ) 423  
Cash, cash equivalents and restricted cash and cash equivalents, beginning of year
2,231   2,717   2,294  
Cash, cash equivalents and restricted cash and cash equivalents, end of year
$ 2,634   $ 2,231   $ 2,717  
Supplemental information:
Cash paid for income taxes during the year $ 985   $ 1,120   $ 1,245  
Cash interest paid during the year $ 36   $ 53   $ 40  

The accompanying notes are an integral part of the consolidated financial statements.

Cognizant F-8
December 31, 2025 Form 10-K

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COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except share data)

Note 1 — Business Description and Summary of Significant Accounting Policies

The terms “Cognizant,” “we,” “our,” “us” and “the Company” refer to Cognizant Technology Solutions Corporation and its subsidiaries unless the context indicates otherwise.
Description of Business. We are one of the world’s leading professional services companies, engineering modern businesses and delivering strategic outcomes for our clients. We help clients modernize technology, reimagine processes and transform experiences so they can stay ahead in today's fast-changing world, where AI is reshaping organizations in every field. As an AI builder, we provide deep expertise at the intersection of industry and technology, combining our perspective with extensive knowledge of our clients' organizations to build industry-specific platforms and incorporate context into systems, AI models and custom solutions. We tailor our services and solutions to specific industries with an integrated global delivery model that employs client service and delivery teams based at client locations and dedicated global and regional delivery centers. Our services include consulting, application development, systems integration, quality engineering and assurance, engineering research and development, application maintenance, infrastructure and security as well as business process services and automation.
Basis of Presentation, Principles of Consolidation and Use of Estimates. The consolidated financial statements are presented in accordance with GAAP and reflect the consolidated financial position, results of operations, comprehensive income and cash flows of our consolidated subsidiaries for all periods presented. All intercompany balances and transactions have been eliminated in consolidation.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying disclosures. We evaluate our estimates on a continuous basis. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The actual amounts may vary from the estimates used in the preparation of the accompanying consolidated financial statements.
Cash and Cash Equivalents. Cash and cash equivalents consist of all cash balances, including money market funds and time deposits that have a maturity, at the date of purchase, of 90 days or less.
Financial Assets and Liabilities. Cash and certain cash equivalents, time deposits, trade receivables, accounts payable and other accrued liabilities are short-term in nature and, accordingly, their carrying values approximate fair value.
Property and Equipment. Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the term of the lease or the estimated useful life of the asset. Deposits paid towards acquisition of long-lived assets and the cost of assets not put in use by the balance sheet date are disclosed under the caption "Capital work-in-progress" in Note 5 .
Leases. Our lease asset classes primarily consist of operating leases for office space, data centers and IT equipment. At inception of a contract, we determine whether a contract contains a lease, and if a lease is identified, whether it is an operating or finance lease. In determining whether a contract contains a lease we consider whether (1) we have the right to obtain substantially all of the economic benefits from the use of the asset throughout the term of the contract, (2) we have the right to direct how and for what purpose the asset is used throughout the term of the contract and (3) we have the right to operate the asset throughout the term of the contract without the lessor having the right to change the terms of the contract. Some of our lease agreements contain both lease and non-lease components that we account for as a single lease component for all of our lease asset classes.
Our ROU lease assets represent our right to use an underlying asset for the lease term and may include any advance lease payments made and any initial direct costs and exclude lease incentives. Our lease liabilities represent our obligation to make lease payments arising from the terms of the lease. ROU lease assets and lease liabilities are recognized at the commencement of the lease and are calculated using the present value of lease payments over the lease term. Typically, our lease agreements do not provide sufficient detail to determine the rate implicit in the lease. Therefore, we use our estimated country-specific incremental borrowing rate based on information available at the commencement date of the lease to calculate the present value of the lease payments. In estimating our country-specific incremental borrowing rates, we consider market rates of comparable collateralized borrowings for similar terms. Our lease terms may include the option to extend or terminate the lease before the

Cognizant F-9
December 31, 2025 Form 10-K

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end of the contractual lease term. Our ROU lease assets and lease liabilities include these options when it is reasonably certain that they will be exercised.
A portion of our real estate lease costs is subject to annual changes in the CPI. Changes in CPI subsequent to the lease commencement are treated as variable lease payments and are recognized in the period in which the obligation for those payments is incurred. Other variable lease costs primarily relate to adjustments for common area maintenance, utilities, property tax and lease concessions. These variable costs are recognized in the period in which the obligation is incurred.

We do not recognize ROU assets and lease liabilities for short-term leases with a term equal to or less than 12 months. We recognize the lease payments in our income statement as a single lease cost on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

Both ROU assets and finance lease assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the related asset group may not be recoverable.
Internal Use Software. We capitalize certain costs that are incurred to purchase, develop and implement internal-use software during the application development phase, which primarily include coding, testing and certain data conversion activities. These capitalized costs are reported in "Property and equipment, net" in our consolidated statements of financial position. Capitalized costs are amortized on a straight-line basis over the useful life of the software. Costs incurred in performing planning and post-implementation activities are expensed as incurred.
Cloud Computing Arrangements. We defer certain implementation costs that are incurred when implementing cloud computing service or software-as-a-service arrangements, which primarily include efforts associated with configuration and development activities. These capitalized costs are reported in "Other current assets" and "Other noncurrent assets" in our consolidated statements of financial position. Once the service is ready for use, deferred costs are expensed over the non-cancelable term, including reasonably certain renewals, of the arrangement and recognized in income from operations in the same line item as the related hosting service fees.
Software to be Sold, Leased or Marketed. We capitalize costs incurred after technological feasibility is reached but before software is available for general release to clients, which primarily include coding and testing activities. Once the product is ready for general release, capitalized costs are amortized over the useful life of the software.
Business Combinations. We account for business combinations using the acquisition method, which requires the identification of the acquirer, the determination of the acquisition date and the allocation of the purchase price paid by the acquirer to the identifiable tangible and intangible assets acquired, the liabilities assumed, including any contingent consideration and any noncontrolling interest in the acquiree at their acquisition date fair values. Goodwill represents the excess of the purchase price over the fair value of net assets acquired, including the amount assigned to identifiable intangible assets. Identifiable intangible assets with finite lives are amortized over their expected useful lives. Acquisition-related costs are expensed in the periods in which the costs are incurred. The results of operations of acquired businesses are included in our consolidated financial statements from the acquisition date .
Equity Method Investments. Equity investments that give us the ability to exercise significant influence, but not control, over an investee are accounted for using the equity method of accounting and recorded in the caption "Long-term investments" on our consolidated statements of financial position. As of December 31, 2025 and 2024, we had an equity method investment of $ 104  million and $ 84  million, respectively, in the technology sector.
Equity method investments are initially recorded at cost. We periodically review the carrying value of our equity method investments to determine if there has been an other-than-temporary decline in the carrying value. The investment balance is increased to reflect contributions and our share of earnings and decreased to reflect our share of losses, distributions and other-than-temporary impairments. Our proportionate share of the net income or loss of the investee is recorded in the caption "Income (loss) from equity method investments" on our consolidated statements of operations.
Long-lived Assets and Finite-lived Intangible Assets. We review long-lived assets and certain finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. The carrying amount may not be recoverable when the sum of undiscounted expected future cash flows is less than the carrying amount of such asset groups. The impairment loss is determined as the amount by which the carrying amount of the asset group exceeds its fair value. Intangible assets consist primarily of customer relationships and developed technology, which are being amortized on a straight-line basis over their estimated useful lives.

Cognizant F-10
December 31, 2025 Form 10-K

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Goodwill and Indefinite-lived Intangible Assets. At each acquisition date, we allocate goodwill and intangible assets to our industry-based reporting units based on how we expect each reporting unit to benefit from the respective business combination. A reporting unit is defined as an operating segment or one level below an operating segment. While we manage the business through our four industry-based operating segments, we have identified seven industry-based reporting units. We evaluate goodwill and indefinite-lived intangible assets for impairment at least annually, or as circumstances warrant. Goodwill is evaluated at the reporting unit level by comparing the fair value of the reporting unit with its carrying amount including goodwill. An impairment of goodwill exists if the carrying amount of the reporting unit exceeds its fair value. The impairment loss is the amount by which the carrying amount exceeds the reporting unit’s fair value, limited to the total amount of goodwill allocated to that reporting unit. For indefinite-lived intangible assets, if our qualitative assessment indicates that it is more-likely-than-not that an indefinite-lived intangible asset is impaired, we test the assets for impairment by comparing the fair value of such assets to their carrying value. If an impairment is indicated, a write down to the fair value of indefinite-lived intangible asset is recorded.
Stock Repurchase Program. Under the Board of Directors authorized stock repurchase program, the Company is authorized to repurchase its Class A common stock through open market purchases, including under a 10b5-1 Plan, in accordance with applica ble federal securities laws. We account for the repurchased shares as constructively retired. Shares are returned to the status of authorized and unissued shares at the time of repurchase. To reflect share repurchases in the consolidated statements of financial position, we (1) reduce common stock for the par value of the shares, (2) reduce additional paid-in capital for the amount in excess of par during the period in which the shares are repurchased and (3) record any residual amount in excess of available additional paid-in capital as a reduction to retained earnings. Cash outflows for repurchases are classified as financing activities.
Revenue Recognition. We recognize revenues as we transfer control of deliverables (products, solutions and services) to our clients in an amount reflecting the consideration to which we expect to be entitled. To recognize revenues, we apply the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenues when a performance obligation is satisfied. We account for a contract when it has approval and commitment from all parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectibility of consideration is probable. We apply judgment in determining the customer’s ability and intention to pay based on a variety of factors, including the customer’s historical payment experience.
For performance obligations where control is transferred over time, revenues are recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based primarily on the nature of the deliverables to be provided.
Revenues related to fixed-price contracts for application development and systems integration services, consulting or other technology services are recognized as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized on the basis of the percentage that each contract’s total labor cost to date bears to the total expected labor costs. Revenues related to fixed-price application maintenance, quality engineering and assurance as well as business process services are recognized based on our right to invoice for services performed for contracts in which the invoicing is representative of the value being delivered. If our invoicing is not consistent with the value delivered, revenues are recognized as the service is performed based on the cost-to-cost method described above. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information. Such estimates and changes in estimates involve the use of judgment. The cumulative impact of any revision in estimates is reflected in the financial reporting period in which the change in estimate becomes known and any anticipated losses on contracts are recognized immediately, where appropriate.

Revenues related to fixed-price hosting and infrastructure and security services are recognized based on our right to invoice for services performed for contracts in which the invoicing is representative of the value being delivered. If our invoicing is not consistent with the value delivered, revenues are recognized on a straight-line basis unless revenues are earned and obligations are fulfilled in a different pattern. The revenue recognition method applied to the types of contracts described above provides the most faithful depiction of performance towards satisfaction of our performance obligations; for example, the cost-to-cost method is used when the value of services provided to the customer is best represented by the costs expended to deliver those services.

Revenues related to our time-and-materials, transaction-based or volume-based contracts are recognized over the period the services are provided either using an output method such as labor hours, or a method that is otherwise consistent with the way in which value is delivered to the customer.

Cognizant F-11
December 31, 2025 Form 10-K

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Revenues related to our non-hosted software license arrangements that do not require significant modification or customization of the underlying software are recognized when the software is delivered as control is transferred at a point in time. For software license arrangements that require significant functionality enhancements or modification of the software, revenues for the software license and related services are recognized as the services are performed in accordance with the methods applicable to application development and systems integration services described above. In software hosting arrangements, the rights provided to the customer, such as ownership of a license, contract termination provisions and the feasibility of the client to operate the software, are considered in determining whether the arrangement includes a license or a service. Sales-based and usage-based fees promised in exchange for licenses of intellectual property are not recognized as revenue until the uncertainty related to the variable amounts is resolved. Revenues related to software maintenance and support are recognized on a straight-line basis over the contract period.

Incentive revenues, volume discounts, or any other form of variable consideration is estimated using either the sum of probability weighted amounts in a range of possible consideration amounts (expected value) or the single most likely amount in a range of possible consideration amounts (most likely amount), depending on which method better predicts the amount of consideration to which we may be entitled. We include in the transaction price variable consideration only to the extent it is probable that a significant reversal of revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether and when to include estimated amounts in the transaction price may involve judgment and are based largely on an assessment of our anticipated performance and all information that is reasonably available to us.

Revenues also include the reimbursement of out-of-pocket expenses. Our warranties generally provide a customer with assurance that the related deliverable will function as the parties intended because it complies with agreed-upon specifications and are therefore not considered an additional performance obligation in the contract.

We enter into arrangements that consist of multiple performance obligations. Such arrangements may include any combination of our deliverables. To the extent a contract includes multiple promised deliverables, we apply judgment to determine whether promised deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For arrangements with multiple distinct performance obligations, we allocate consideration among the performance obligations based on their relative standalone selling price. Standalone selling price is the price at which we would sell a promised good or service separately to the customer. When not directly observable, we typically estimate standalone selling price by using the expected cost plus margin or, in limited circumstances, the residual value approach. We typically establish a standalone selling price range for our deliverables, which is reassessed on a periodic basis or when facts and circumstances change.

We assess the timing of the transfer of goods or services to the customer as compared to the timing of payments to determine whether a significant financing component exists. As a practical expedient, we do not assess the existence of a significant financing component when the difference between payment and transfer of deliverables is a year or less. If the difference in timing arises for reasons other than the provision of finance to either the customer or us, no financing component is deemed to exist. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our services, not to receive or provide financing from or to customers. We do not consider set-up or transition fees paid upfront by our customers to represent a financing component, as such fees are required to encourage customer commitment to the project and protect us from early termination of the contract.

Our contracts may be modified to add, remove or change existing performance obligations. The accounting for modifications to our contracts involves assessing whether the services added to an existing contract are distinct and whether the pricing is at the standalone selling price. Services added that are not distinct are accounted for on a cumulative catch up basis, while those that are distinct are accounted for prospectively, either as a separate contract if the additional services are priced at the standalone selling price, or as a termination of the existing contract and creation of a new contract if not priced at the standalone selling price. Services added to our application development and systems integration service contracts are typically not distinct, while services added to our other contracts, including application maintenance, quality engineering and assurance as well as business process services contracts, are typically distinct.
We enter into arrangements with third party suppliers to resell products or services. In such cases, we evaluate whether we are the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis). In doing so, we evaluate whether we control the good or service before it is transferred to the customer. If we control the good or service before it is transferred to the customer, we are the principal; if not, we are the agent. Determining whether we control the good or service before it is transferred to the customer requires significant judgment.

Cognizant F-12
December 31, 2025 Form 10-K

Table of Contents                                                 

Trade Accounts Receivable, Contract Assets and Contract Liabilities. We classify our right to consideration in exchange for deliverables as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional (i.e., only the passage of time is required before payment is due). For example, we recognize a receivable for revenues related to our time and materials and transaction or volume-based contracts when earned regardless of whether amounts have been billed. We present such receivables in "Trade accounts receivable, net" in our consolidated statements of financial position at their net estimated realizable value. A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets are presented in "Other current assets" or "Other noncurrent assets" in our consolidated statements of financial position, based on the expected timing of billing, and primarily relate to unbilled amounts on fixed-price contracts utilizing the cost-to-cost method of revenue recognition. Our contract liabilities, or deferred revenue, consist of advance payments from clients and billings in excess of revenues recognized. We classify deferred revenue as current or noncurrent based on the timing of when we expect to recognize the revenues.
Our contract assets and contract liabilities are reported on a net basis by contract at the end of each reporting period. The difference between the opening and closing balances of our contract assets and contract liabilities primarily results from the timing difference between our performance obligations and the client’s payment. We receive payments from clients based on the terms established in our contracts, which vary from contract to contract.
Allowance for Credit Losses . We calculate expected credit losses for our trade accounts receivable and contract assets. Expected credit losses include losses expected based on known credit issues with specific customers as well as a general expected credit loss allowance based on relevant information, including historical loss rates, current conditions, and reasonable economic forecasts that affect collectibility . We update our allowance for credit losses on a quarterly basis with changes in the allowance recognized in income from operations.
Costs to Fulfill. Recurring operating costs for contracts with customers are recognized as incurred. Certain eligible, nonrecurring costs (i.e., set-up or transition costs) are capitalized when such costs (1) relate directly to the contract, (2) generate or enhance resources of the Company that will be used in satisfying the performance obligation in the future, and (3) are expected to be recovered. These costs are expensed ratably over the estimated life of the customer relationship, including expected contract renewals. In determining the estimated life of the customer relationship, we evaluate the average contract term on a portfolio basis by nature of the services to be provided, and apply judgment in evaluating the rate of technological and industry change. Capitalized amounts are monitored regularly for impairment. Impairment losses are recorded when projected remaining consideration that has not already been recognized as revenue less costs related to the services being provided are not sufficient to recover the carrying amount of the capitalized costs to fulfill. Costs to fulfill are recorded in "Other noncurrent assets" in our consolidated statements of financial position and the amortization expense of costs to fulfill is included in "Cost of revenues" in our consolidated statements of operations.
Stock-Based Compensation. Stock-based compensation expense for awards of equity instruments to employees and non-employee directors is determined based on the grant date fair value of those awards. We recognize these compensation costs net of an estimated forfeiture rate over the requisite service period of the award. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from origin al estimates. Stock-based compensation expense relating to RSUs and PSUs is recognized as shares vest over the requisite service period. If the m inimum performance targets are not met, no compensation cost is recognized and any recognized compensation cost is reversed, except for awards subject to a market condition. The fair value of RSUs and PSUs is determined based on the number of stock units granted and the quoted price of our stock at the date of grant. The fair value of PSUs granted subject to a market condition is determined using a Monte Carlo valuation model.
Foreign Currency. The assets and liabilities of our foreign subsidiaries whose functional currency is not the U.S. dollar are translated into U.S. dollars at current exchange rates while revenues and expenses are translated at average monthly exchange rates. The resulting translation adjustments are recorded in the caption "Accumulated other comprehensive income (loss)" on the consolidated statements of financial position.
Foreign currency transactions and balances are those that are denominated in a currency other than the entity’s functional currency. An entity's functional currency is the currency of the primary economic environment in which it operates. The U.S. dollar is the functional currency for some of our foreign subsidiaries. For these subsidiaries, transactions and balances denominated in the local currency are foreign currency transactions. Foreign currency transactions and balances related to non-monetary assets and liabilities are remeasured to the functional currency of the entity at historical exchange rates while monetary assets and liabilities are remeasured to the functional currency of the entity at current exchange rates. Foreign currency exchange gains or losses from remeasurement are included in the caption "Foreign currency exchange gains (losses), net" on our consolidated statements of operations together with gains or losses on our undesignated foreign currency hedges.

Cognizant F-13
December 31, 2025 Form 10-K

Table of Contents                                                 

Derivative Financial Instruments. Derivative financial instruments are recorded on our consolidated statements of financial position as either an asset or liability measured at its fair value as of the reporting date. Our derivative financial instruments consist primarily of foreign exchange forward and option contracts. We designate certain derivative instruments as accounting hedges when the relationship is formally documented and the hedge is expected to be highly effective in achieving offsetting changes in the fair value of or cash flows of the hedged item. Changes in our derivatives’ fair values are recognized in net income unless specific hedge accounting and documentation criteria are met (i.e., the instruments are designated and accounted for as hedges). For derivative instruments designated as cash flow hedges, the entire change in fair value of the hedging instrument is recorded in the caption "Accumulated other comprehensive income (loss)" in the consolidated statements of financial position. Upon occurrence of the hedged transaction, the gains and losses on the derivative are recognized in net income. The cash flow impacts of all derivative activities are reflected as cash flows from operating activities.
Defined Benefit Plans. The funded status of the defined benefit plans, which is measured as the difference between the projected benefit obligation and the fair value of plan assets, is recognized on the consolidated statement of financial position. The projected benefit obligation is measured annually using actuarial valuation. Net periodic benefit cost includes service cost, interest cost, expected return on plan assets, and amortization of gains and losses and prior service costs. Gains and losses and prior service costs are initially recognized as a component of other comprehensive income and subsequently amortized and recognized as a component of net periodic benefit cost applying the requirements of applicable accounting guidance. Assumptions used in measuring the benefit obligation and net periodic benefit cost, such as discount rates and expected return on plan assets, are reviewed annually and updated as needed.
Income Taxes. We provide for income taxes utilizing the asset and liability method of accounting. Under this method, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each balance sheet date, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. If it is determined that it is more likely than not that future tax benefits associated with a deferred income tax asset will not be realized, a valuation allowance is provided. The effect of a change in tax rates on deferred income tax assets and liabilities is recognized in the provision for income taxes in the period that includes the enactment date.
Our provision for income taxes also includes the impact of reserves established for uncertain income tax positions, as well as the related interest, which may require us to apply judgment to complex issues and may require an extended period of time to resolve. We apply a “more likely than not” threshold when assessing the need for a reserve for an uncertain tax position, which involves significant judgment. Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given that the final outcome of these matters will not differ from our recorded amounts. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the expiration of the applicable statute of limitations. Additionally, we have tax positions that we believe are more likely than not to be realized and for which we have therefore not established a reserve . To the extent that the final outcome of these matters differs from the amounts recorded, such differences may materially impact, positively or negatively, the provision for income taxes in the period in which such determination is made. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes.
Earnings Per Share. Basic EPS is computed by dividing earnings available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS, computed using the treasury stock method, includes all potential dilutive common stock in the weighted average shares outstanding. We excluded less than 1  million of anti-dilutive shares in each of 2025, 2024 and 2023 from our diluted EPS calculation. We include PSUs in the dilutive common shares when they become contingently issuable per the authoritative guidance and exclude them when they are not contingently issuable.
Restructuring Charges . Restructuring charges principally consist of severance and related separation costs, facility exit costs, third party and other costs necessary to the restructuring program. The Company accrues for severance and other related separation costs when it is probable that termination benefits will be paid and the amount is reasonably estimable. Recognition of employee severance and other separation costs is also dependent on requirements established by severance policy, statutory laws, or historical experience. Facility exit costs generally reflect the accelerated lease expense for right-of-use assets, expected lease termination costs, and asset impairments in connection with closure of certain sites, net of gains on exit-related disposals. Third party and other costs include certain non-facility related asset impairments and professional services fees directly related to the restructuring program.
Restructuring costs are recorded in “Restructuring charges” in the consolidated statements of operations. The restructuring liability related to accrued employee separation costs is included in "Accrued expenses and other current liabilities" in the consolidated statements of financial position.

Cognizant F-14
December 31, 2025 Form 10-K

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Recently Adopted Accounting Pronouncements

Date Issued and Topic Date Adopted and Method
Description Impact
December 2023

Income Taxes (Topic 740): Improvements to Income Tax Disclosures
Annual period starting in 2025

Prospective basis
The standard requires enhanced income tax disclosures primarily related to the income tax rate reconciliation and income taxes paid information.
See Note 10 for disclosures that reflect the adoption of this standard.

New Accounting Pronouncements

Date Issued and Topic Effective Date
Description Impact
November 2024

Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)
Annual period starting in 2027 and interim periods starting in 2028

Prospective basis
The standard is intended to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.
We are currently evaluating the impact on our disclosures.

July 2025

Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets
Annual reporting periods starting in 2026, and interim reporting periods within those annual reporting periods

Prospective basis
The standard is intended to simplify the measurement of credit losses for accounts receivable and contract assets by providing a practical expedient that allows an entity to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset.

We are currently evaluating the impact of applying the practical expedient.

September 2025

Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software
Annual reporting periods starting in 2028, and interim reporting periods within those annual reporting periods

Prospective basis
The standard is intended to modernize the internal-use software guidance, making it easier to apply to various software development methods.

We are currently evaluating the impact on our internal use software capitalization policy.

December 2025

Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities

Annual reporting periods starting in 2029, and interim reporting periods within those annual reporting periods

Prospective basis

The standard provides authoritative guidance for business entities receiving government grants, establishing rules for their recognition, measurement, presentation, and disclosure.
We are currently evaluating the impact, and we do not expect the standard to have a significant impact on our financial statements.

Cognizant F-15
December 31, 2025 Form 10-K

Table of Contents                                                 

Date Issued and Topic Effective Date
Description Impact
December 2025

Interim Reporting (Topic 270): Narrow-Scope Improvements

Interim reporting periods within annual reporting periods starting in 2028

Prospective basis

The standard clarifies the applicability of Topic 270, provides a comprehensive list of interim disclosures, and includes a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.
We are currently evaluating the impact on our interim disclosures.

Note 2 — Revenues and Trade Accounts Receivable

Disaggregation of Revenues

The tables below present disaggregated revenues from contracts with clients by client location, service line and contract type for each of our reportable business segments. We believe this disaggregation best depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected by industry, market and other economic factors. Our consulting and technology services include consulting, application development, systems integration, quality engineering and assurance services as well as software solutions and related services while our outsourcing services include application maintenance, infrastructure and security as well as business process services. Revenues are attributed to geographic regions based upon client location, which is the client's billing address. Substantially all revenues in the North America region relate to clients in the United States.

Year Ended December 31, 2025

(in millions) HS FS P&R CMT Total
Revenues
Geography:
North America $ 5,311   $ 4,380   $ 3,728   $ 2,361   $ 15,780  
United Kingdom 214   643   584   481   1,922  
Continental Europe 667   640   650   133   2,090  
Europe - Total 881   1,283   1,234   614   4,012  
Rest of World 155   510   323   328   1,316  
Total $ 6,347   $ 6,173   $ 5,285   $ 3,303   $ 21,108  

Service line:
Consulting and technology services $ 3,651   $ 4,365   $ 3,697   $ 1,820   $ 13,533  
Outsourcing services 2,696   1,808   1,588   1,483   7,575  
Total $ 6,347   $ 6,173   $ 5,285   $ 3,303   $ 21,108  

Type of contract:
Time and materials $ 1,978   $ 3,161   $ 2,239   $ 1,771   $ 9,149  
Fixed-price 3,149   2,811   2,685   1,365   10,010  
Transaction or volume-based 1,220   201   361   167   1,949  
Total $ 6,347   $ 6,173   $ 5,285   $ 3,303   $ 21,108  

Cognizant F-16
December 31, 2025 Form 10-K

Table of Contents                                                 

Year Ended December 31, 2024

(in millions) HS FS P&R CMT Total
Revenues
Geography:
North America $ 5,072   $ 4,075   $ 3,272   $ 2,279   $ 14,698  
United Kingdom 186   572   558   511   1,827  
Continental Europe 559   613   605   155   1,932  
Europe - Total 745   1,185   1,163   666   3,759  
Rest of World 115   493   347   324   1,279  
Total $ 5,932   $ 5,753   $ 4,782   $ 3,269   $ 19,736  

Service line:
Consulting and technology services $ 3,456   $ 4,022   $ 3,193   $ 1,821   $ 12,492  
Outsourcing services 2,476   1,731   1,589   1,448   7,244  
Total $ 5,932   $ 5,753   $ 4,782   $ 3,269   $ 19,736  

Type of contract:
Time and materials $ 1,968   $ 3,188   $ 1,995   $ 1,775   $ 8,926  
Fixed-price 2,878   2,384   2,442   1,324   9,028  
Transaction or volume-based 1,086   181   345   170   1,782  
Total $ 5,932   $ 5,753   $ 4,782   $ 3,269   $ 19,736  

Year Ended December 31, 2023

(in millions) HS FS P&R CMT Total
Revenues
Geography:
North America $ 4,865   $ 4,091   $ 3,102   $ 2,205   $ 14,263  
United Kingdom 167   613   534   571   1,885  
Continental Europe 533   605   612   159   1,909  
Europe - Total 700   1,218   1,146   730   3,794  
Rest of World 109   500   380   307   1,296  
Total $ 5,674   $ 5,809   $ 4,628   $ 3,242   $ 19,353  

Service line:
Consulting and technology services $ 3,238   $ 3,965   $ 3,010   $ 1,751   $ 11,964  
Outsourcing services 2,436   1,844   1,618   1,491   7,389  
Total $ 5,674   $ 5,809   $ 4,628   $ 3,242   $ 19,353  

Type of contract:
Time and materials $ 2,004   $ 3,215   $ 1,837   $ 1,832   $ 8,888  
Fixed-price 2,600   2,369   2,435   1,260   8,664  
Transaction or volume-based 1,070   225   356   150   1,801  
Total $ 5,674   $ 5,809   $ 4,628   $ 3,242   $ 19,353  

Cognizant F-17
December 31, 2025 Form 10-K

Table of Contents                                                 

Costs to Fulfill
The following table shows significant movements in the capitalized costs to fulfill:

(in millions) 2025 2024
Beginning balance $ 209   $ 245  
Costs capitalized 42   55  
Amortization expense ( 78 ) ( 89 )
Impairment charges
( 12 ) ( 2 )
Ending balance $ 161   $ 209  

Costs to obtain contracts were immaterial for the periods disclosed.
Contract Balances
The table below shows significant movements in contract assets (current and noncurrent):

(in millions) 2025 2024
Beginning balance $ 386   $ 316  
Revenues recognized during the period but not billed 451   358  
Amounts reclassified to trade accounts receivable ( 371 ) ( 288 )

Ending balance $ 466   $ 386  

The table below shows significant movements in the deferred revenue balances (current and noncurrent):

(in millions) 2025 2024
Beginning balance $ 480   $ 427  
Amounts billed but not recognized as revenues 474   421  
Revenues recognized related to the beginning balance of deferred revenue ( 416 ) ( 380 )
Amounts acquired in business combinations —   12  

Ending balance $ 538   $ 480  

Revenues recognized during the year ended December 31, 2025 for performance obligations satisfied or partially satisfied in previous periods were immaterial.
Remaining Performance Obligations
As of December 31, 2025, the aggregate amount of transaction price allocated to remaining performance obligations, was $ 6,279 million, of which approximately 35 % is expected to be recognized as revenues within 1 year, approximately 55 % is expected to be recognized as revenues within 2 years and approximately 95 % is expected to be recognized as revenues within 5 years. Disclosure is not required for performance obligations that meet any of the following criteria:
(1) contracts with a duration of one year or less as determined under ASC Topic 606: "Revenue from Contracts with Customers,"
(2) contracts for which we recognize revenues based on the right to invoice for services performed,
(3) variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation in accordance with ASC 606-10-25-14(b), for which the criteria in ASC 606-10-32-40 have been met, or
(4) variable consideration in the form of a sales-based or usage-based royalty promised in exchange for a license of intellectual property.
Many of our performance obligations meet one or more of these exemptions and therefore are not included in the remaining performance obligation amount disclosed above.

Cognizant F-18
December 31, 2025 Form 10-K

Trade Accounts Receivable and Allowance for Credit Losses
The following table presents the activity in the allowance for credit losses for trade accounts receivable:

(in millions) 2025 2024 2023
Beginning balance $ 26   $ 32   $ 43  
Credit loss expense (1)
11   12   12  
Write-offs charged against the allowance ( 14 ) ( 18 ) ( 23 )

Ending balance $ 23   $ 26   $ 32  

(1) Reported in "Selling, general and administrative expenses" in our consolidated statements of operations.

Note 3 — Business Combinations

On January 1, 2026, we acquired 100 % ownership in 3Cloud, one of the largest independent Microsoft Azure services providers and a global leader in Azure-dedicated AI enablement solutions and products. On December 31, 2025, we placed cash consideration of $ 733  million in escrow, which was deemed to be restricted cash and included in "Other noncurrent assets" in our consolidated statement of financial position. See Note 18 .
There were no acquisitions completed during the year ended December 31, 2025. Acquisitions completed during each of the years ended December 31, 2024 and 2023 were not individually or in the aggregate material to our operations. Accordingly, pro forma results have not been presented. The primary items that generated goodwill are the acquired assembled workforces and synergies between the acquired companies and us, neither of which qualify as an identifiable intangible asset.
2024
On January 22, 2024, through the execution of a share purchase agreement, we acquired 100 % owners hip in Thirdera, an Elite ServiceNow Partner specializing in advisory, implementation and optimization solutions related to the ServiceNow platform.
On August 26, 2024, through the execution of a merger agreement, we acquired 100 % ownership in Belcan, a leading global supplier of engineering research & development services for the commercial aerospace, defense, space, marine and industrial verticals. We paid $ 1,195  million in cash, net of cash acquired, and issued 1,470,589 shares of our Class A common stock, valued at $ 113  million, in connection with our acquisition of Belcan.
The allocations of purchase price to the fair value of the aggregate assets acquired and li abilities assumed were as follows:

(in millions) Thirdera
Belcan Total Weighted Average Useful Life
Cash $ 8   $ 55   $ 63  
Trade accounts receivable 21   173   194  
Other current assets 11   22   33  
Property and equipment and other noncurrent assets
2   22   24  
Operating lease assets
—  55   55  
Non-deductible goodwill 180   614   794  
Tax-deductible goodwill 164   —  164  
Customer relationship assets 73   539   612   11.0 years

Other definite-lived intangible assets
1   —  1   1.0 years

Indefinite-lived intangible assets
—  45   45  
Operating lease liabilities, current
—  ( 8 ) ( 8 )

Other current liabilities
( 29 ) ( 72 ) ( 101 )
Deferred income tax liabilities, net
( 3 ) ( 34 ) ( 37 )
Operating lease liabilities, noncurrent
—  ( 48 ) ( 48 )
Purchase price $ 428   $ 1,363   $ 1,791  

For the year ended December 31, 2024 , revenues from acquisitions completed in 2024 , since the dates of acquisition, wer e $ 384  million.

Cognizant F-19
December 31, 2025 Form 10-K

Table of Contents                                                 

2023
In 2023 , we acquired 100% owners hip in each of the following:
• Certain net assets of OneSource Virtual, the professional and application management services business of OneSource Virtual, Inc. and OneSource Virtual (UK) Ltd., a leading provider of Workday services, solutions and products, acquired to complement our existing finance and human resources advisory implementation services related to Workday (acquired January 1, 2023), and
• Mobica, an IoT software engineering services provider, acquired to expand our IoT embedded software engineering capabilities (acquired March 10, 2023).
The allocations of purchase price to the fair value of the aggregate assets acquired and li abilities assumed were as follows:

(in millions) OneSource Virtual Mobica Total Weighted Average Useful Life
Cash $ —   $ 20   $ 20  
Trade accounts receivable —   10   10  
Other current assets 4   8   12  
Property and equipment and other assets 1   6   7  

Non-deductible goodwill 18   202   220  
Tax-deductible goodwill 88   —   88  
Customer relationship assets 11   120   131   10.9 years

Current liabilities ( 18 ) ( 9 ) ( 27 )
Noncurrent liabilities ( 1 ) ( 32 ) ( 33 )
Purchase price $ 103   $ 325   $ 428  

For the year ended December 31, 2023, revenues from acquisitions completed in 2023, since the dates of acquisition, wer e $ 130  million.

Note 4 — Restructuring Charges

At the end of 2024, we completed our NextGen program. We did not incur any costs related to the NextGen program during 2025.
The total costs related to our NextGen program are reported in "Restructuring charges" in our consolidated statements of operations. We do not allocate these charges to individual segments in internal management reports used by the CODM. Accordingly, such expenses are separately disclosed in our segment reporting as “unallocated costs.” See Note 17 . The costs related to our NextGen program were as follows for the years ended December 31:

(in millions) 2024 2023

Employee separation costs $ 85   $ 115  

Facility exit costs (1)
36   108  
Third party and other costs (2)
13   6  
Total restructuring charges $ 134   $ 229  

(1) For the year ended December 31, 2024, facility exit costs include lease restructuring of $ 23  million and accelerated depreciation charges of $ 13  million. For the year ended December 31, 2023, facility exit costs include lease restructuring of $ 71  million, accelerated depreciation charges of $ 36  million and impairment of long-lived assets of $ 1  million.
(2) Third party and other costs include certain non-facility related asset impairments and professional services fees directly related to the NextGen program.

Cognizant F-20
December 31, 2025 Form 10-K

Table of Contents                                                 

Changes in our accrued employee separation costs included in "Accrued expenses and other current liabilities" in our consolidated statements of financial position are presented in the table below for the years ended December 31:

(in millions) 2025 2024

Beginning balance $ 35   $ 42  
Employee separation costs accrued —   85  
Payments made ( 35 ) ( 92 )
Ending balance $ —   $ 35  

Note 5 — Property and Equipment, net

Property and equipment were as follows as of December 31:

Estimated Useful Life 2025 2024
(in years) (in millions)
Buildings 30 $ 719   $ 736  
Computer equipment 3 – 5
865   811  
Computer software 3 – 8
1,123   1,024  
Furniture and equipment 5 – 9
745   716  
Land 6   6  

Capital work-in-progress 98   115  
Leasehold improvements Shorter of the lease term or
the life of the asset 373   373  
Sub-total 3,929   3,781  
Accumulated depreciation and amortization
( 2,996 ) ( 2,787 )
Property and equipment, net $ 933   $ 994  

Depreciation and amortization expense related to property and equipment was $ 332 million, $ 354 million and $ 390 million for the years ended December 31, 2025, 2024 and 2023, respectively. For the years ended December 31, 2024 and 2023, $ 13  million and $ 36  million, respectively, of our depreciation and amortization expense was reported in "Restructuring charges". There were no restructuring charges during the year ended December 31, 2025. During the three months ended March 31, 2025, we sold an office complex in India for proceeds of $ 70  million and recorded a gain on the transaction of $ 62  million, which was reported in "(Gain) on sale of property and equipment" on our consolidated statement of operations. As of December 31, 2024, the physical assets held for sale related to this office complex were reported in "Other current assets".
The gross amount of property and equipment recorded under finance leases was $ 33 million and $ 30 million as of December 31, 2025 and 2024, respectively. Accumulated amortization for our ROU finance lease assets was $ 23 million and $ 16 million as of December 31, 2025 and 2024, respectively. Amortization expense related to our ROU finance lease assets was $ 5 million, $ 5 million and $ 4 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The gross amount of property and equipment recorded for software to be sold, leased or marketed reported in the caption "Computer software" above was $ 377 million and $ 338 million as of December 31, 2025 and 2024, respectively. Accumulated amortization for software to be sold, leased or marketed was $ 252 million and $ 210 million as of December 31, 2025 and 2024, respectively. Amortization expense for software to be sold, leased or marketed recorded as property and equipment was $ 43 million, $ 36 million, and $ 37 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Cognizant F-21
December 31, 2025 Form 10-K

Table of Contents                                                 

Note 6 — Leases

The following table provides information on the components of our operating and finance leases included in our consolidated statement of financial position as of December 31:

Leases Location on Statement of Financial Position 2025 2024
Assets (in millions)
ROU operating lease assets Operating lease assets, net $ 573   $ 552  
ROU finance lease assets Property and equipment, net 10   14  
Total $ 583   $ 566  

Liabilities
Current
Operating lease Operating lease liabilities $ 153   $ 152  
Finance lease Accrued expenses and other current liabilities 10   8  
Noncurrent
Operating lease Operating lease liabilities, noncurrent 423   420  
Finance lease Other noncurrent liabilities 12   15  
Total $ 598   $ 595  

For the years ended December 31, 2025, 2024 and 2023, our operating lease costs were $ 197 million, $ 216 million and $ 304 million, respectively, including variable lease costs of $ 19 million, $ 23 million and $ 21 million, respectively . Our short-term lease rental expense was $ 16 million, $ 11 million and $ 15 million for the years ended December 31, 2025, 2024 and 2023, respectively. Lease interest expense related to our finance leases for each of the years ended December 31, 2025, 2024 and 2023 was immaterial.
The following table provides information on the weighted average remaining lease term and weighted average discount rate for our operating leases as of December 31:

Operating Lease Term and Discount Rate 2025 2024

Weighted average remaining lease term 4.9 years
5.3 years

Weighted average discount rate 5.7   % 5.5   %

The following table provides supplemental cash flow and non-cash information related to our operating leases for the years ended December 31:

(in millions) 2025 2024 2023
Cash paid for amounts included in the measurement of operating lease liabilities $ 192   $ 251   $ 240  
ROU assets obtained in exchange for operating lease liabilities 160   123   86  
Reduction of ROU assets and lease liabilities as a result of our NextGen program
—   ( 62 ) ( 110 )

Cash paid for amounts included in the measurement of finance lease liabilities and ROU assets obtained in exchange for finance lease liabilities were each immaterial for each of the years ended December 31, 2025, 2024 and 2023.
The following table provides the schedule of maturities of our operating lease liabilities and a reconciliation of the undiscounted cash flows to the operating lease liabilities recognized in the statement of financial position as of December 31:

(in millions) 2025
2026
$ 182  
2027
150  
2028
120  
2029
83  
2030
54  
Thereafter 84  
Total operating lease payments 673  
Interest ( 97 )
Total operating lease liabilities $ 576  

Cognizant F-22
December 31, 2025 Form 10-K

Table of Contents                                                 

As of December 31, 2025, additional obligations related to operating leases whose lease term had yet to commence were immaterial.

Note 7 — Goodwill and Intangible Assets, net

Changes in goodwill by our reportable business segments were as follows for the years ended December 31, 2025 and 2024:

(in millions)
January 1, 2025 Goodwill Additions
Foreign Currency Translation Adjustments December 31, 2025

Health Sciences $ 2,895   $ —   $ 20   $ 2,915  
Financial Services 1,129   —   48   1,177  
Products and Resources 1,884   —   50   1,934  
Communications, Media and Technology 1,045   —   35   1,080  
Total goodwill $ 6,953   $ —   $ 153   $ 7,106  

(in millions)
January 1, 2024 Goodwill Additions and Adjustments Foreign Currency Translation Adjustments December 31, 2024

Health Sciences $ 2,840   $ 68   $ ( 13 ) $ 2,895  
Financial Services 1,109   48   ( 28 ) 1,129  
Products and Resources 1,217   698   ( 31 ) 1,884  
Communications, Media and Technology 919   144   ( 18 ) 1,045  
Total goodwill $ 6,085   $ 958   $ ( 90 ) $ 6,953  

Based on our most recent goodwill impairment assessment performed as o f October 31, 2025, we concluded that the goodwill in each of our reporting units was not at risk of impairment. We have not recognized any impairment losses on our goodwill.
Components of intangible assets were as follows as of December 31:

  2025 2024
(in millions) Gross Carrying
Amount Accumulated
Amortization Net Carrying
Amount Gross Carrying
Amount Accumulated
Amortization Net Carrying
Amount
Customer relationships $ 2,593   $ ( 1,310 ) $ 1,283   $ 2,534   $ ( 1,068 ) $ 1,466  
Developed technology 394   ( 386 ) 8   384   ( 379 ) 5  
Indefinite lived trademarks 116   —  116   116   —  116  
Finite lived trademarks and other 84   ( 74 ) 10   81   ( 69 ) 12  
Total intangible assets $ 3,187   $ ( 1,770 ) $ 1,417   $ 3,115   $ ( 1,516 ) $ 1,599  

Other than certain trademarks with indefinite lives, our intangible assets have finite lives and, as such, are subject to amortization. Amortization of intangible assets totaled $ 218 million, $ 188 million and $ 165 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The following table provides the estimated amortization expense related to our existing intangible assets for the next five years.

(in millions) Estimated Amortization
2026
$ 217  
2027
209  
2028
187  
2029
169  
2030
144  

Cognizant F-23
December 31, 2025 Form 10-K

Table of Contents                                                 

Note 8 — Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities were as follows as of December 31:
(in millions) 2025 2024
Compensation and benefits $ 1,490   $ 1,499  
Customer volume and other incentives 317   247  
Liabilities related to the resale of third-party products
242   154  
Professional fees 193   171  
Income taxes 18   100  
Other 404   439  
Total accrued expenses and other current liabilities $ 2,664   $ 2,610  

Note 9 — Debt

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. During the third quarter of 2024, we borrowed $ 600  million under our revolving credit facility to partially fund the acquisition of Belcan. We repaid $ 300  million during the fourth quarter of 2024 and the remaining $ 300  million during the first quarter of 2025.
The Credit Agreement requires interest to be paid, at our option, at either the Term Benchmark, Adjusted Daily Simple RFR or the ABR Rate (each as defined in the Credit Agreement), plus, in each case, an Applicable Margin (as defined in the Credit Agreement). Initially, the Applicable Margin is 0.875 % with respect to Term Benchmark loans and RFR loans and 0.00 % with respect to ABR loans. Subsequently, the Applicable Margin with respect to Term Benchmark loans and RFR loans will be determined quarterly and may range from 0.75 % to 1.125 %, depending on our public debt ratings or, if we have not received public debt ratings, from  0.875 % to  1.125 %, depending on our Leverage Ratio, which is the ratio of indebtedness for borrowed money to Consolidated EBITDA, as defined in the Credit Agreement. Since the issuance of the Term Loan, t he Term Loan has been a Term Benchmark loan. The Credit Agreement contains customary affirmative and negative covenants as well as a financial covenant. The financial covenant is tested at the end of each fiscal quarter and requires us to maintain a Leverage Ratio not in excess of 3.50 :1.00, or for a period of up to four quarters following certain material acquisitions, 3.75 :1.00. We were in compliance with all debt covenants and representations of the Credit Agreement as of December 31, 2025.
Short-term Debt
As of each of December 31, 2025 and 2024, we had $ 33  million of short-term debt related to current maturities of our Term Loan, with a weighted average interest rate of 4.7 % and 5.3 %, respectively.
Long-term Debt
The following table summarizes the long-term debt balances as of December 31:

(in millions) 2025 2024
Notes outstanding under revolving credit facility
$ —   $ 300  
Term Loan
577   610  
Less:
Current maturities - Term Loan
( 33 ) ( 33 )
Unamortized deferred financing costs ( 1 ) ( 2 )
Long-term debt, net of current maturities $ 543   $ 875  

The carrying value of our debt approximated its fair value as of each of December 31, 2025 and 2024.
The following represents the schedule of maturities of our Term Loan:

Year Amounts (in millions)

2026 $ 33  
2027 544  
Total $ 577  

Cognizant F-24
December 31, 2025 Form 10-K

Table of Contents                                                 

Note 10 — Income Taxes

Effective January 1, 2025, we adopted the new income tax disclosure standard (Income Taxes (Topic 740): Improvements to Income Tax Disclosures) on a prospective basis. Accordingly, the tables presenting our income tax provision and effective tax rate reconciliation will reflect the new standard for 2025, while the 2024 and 2023 disclosures will continue to follow the previous disclosure requirements.
Income before provision for income taxes shown below is based on the geographic location to which such income was attributed for years ended December 31:

(in millions) 2025 2024 2023
United States $ 1,189   $ 906   $ 813  
Foreign 2,290   2,032   1,974  
Income before provision for income taxes $ 3,479   $ 2,938   $ 2,787  

The provision for income taxes consisted of the following components for the years ended December 31:

(in millions) 2025 2024 2023
Current:
Federal
$ 216  
State
139   Federal and state $ 426   $ 522  
Foreign 576   Foreign 642   485  
Total current provision 931   1,068   1,007  
Deferred:
Federal
302  
State
4   Federal and state ( 229 ) ( 354 )
Foreign 21   Foreign ( 126 ) 15  
Total deferred income tax (benefit)
327   ( 355 ) ( 339 )
Total provision for income taxes $ 1,258   $ 713   $ 668  

We are involved in two separate ongoing disputes with the ITD in connection with previously disclosed share repurchase transactions undertaken by CTS India in 2013 and 2016 to repurchase shares from its shareholders (non-Indian Cognizant entities) valued at $ 523  million and $ 2.8 billion, respectively.
The 2016 transaction was undertaken pursuant to a plan approved by the High Court in Chennai, India, and resulted in the payment of $ 135 million in Indian income taxes - an amount we believe includes all the applicable taxes owed for this transaction under Indian law. In March 2018, the ITD asserted that it is owed an additional 33 billion Indian rupees ($ 367  million at the December 31, 2025 exchange rate) on the 2016 transaction. We deposited 5 billion Indian rupees, representing 15 % of the disputed tax amount related to the 2016 transaction, with the ITD. Additionally, certain time deposits of CTS India were placed under lien in favor of the ITD, representing the remainder of the disputed tax amount.
In April 2020, we received a formal assessment from the ITD on the 2016 transaction, which is consistent with the ITD's previous assertions. Our appeal was ruled on unfavorably by the CITA in March 2022 and by the ITAT in September 2023. We filed an appeal against the order of the ITAT with the High Court. On January 8, 2024, the SCI ruled that, in order to proceed with the appeal, we must deposit 30 billion Indian rupees, representing the time deposits of CTS India under lien, on the condition that, if CTS India prevails at the High Court, the amount deposited will be returned to CTS India, along with interest accrued, within four weeks of the judgment. We made the required deposit in January 2024 and, in April 2024, the case commenced before the High Court.
As of December 31, 2025 and 2024, the deposit with the ITD was $ 384  million and $ 403  million, respectively at December 31, 2025 and 2024 exchange rates, respectively presented in "Other noncurrent assets". As of December 31, 2023, the deposits related to the ITD dispute were comprised of $ 355  million in deposits under lien presented in "Long-term investments" and $ 60  million on deposit with the ITD presented in "Other noncurrent assets". Of the $ 355  million in deposits under lien, $ 96  million were held in time deposits with a maturity of less than 30 days qualifying as cash equivalent instruments and thus were considered restricted cash equivalents as of December 31, 2023.

Cognizant F-25
December 31, 2025 Form 10-K

Table of Contents                                                 

The dispute in relation to the 2013 share repurchase transaction is also in litigation. At this time, the ITD has not made specific demands with regards to the 2013 transaction.

We continue to believe we have paid all applicable taxes owed on both the 2016 and the 2013 transactions and we continue to defend our positions with respect to both matters. Accordingly, we have not recorded any reserves for these matters as of December 31, 2025.
The reconciliation between the U.S. federal statutory rate and our effective income tax rate were as follows for the years ended December 31:

(in millions) 2025
%
Tax expense, at U.S. federal statutory rate
$ 731   21.0  
State and local income taxes (net of federal benefit) 1
113   3.2  
Foreign tax effects

United Kingdom
Statutory tax rate difference 49   1.4  

India 86   2.5  
Other foreign jurisdictions
17   0.5  
Effect of changes in tax laws or rates enacted in the current period 2
336   9.7  
Effect of cross- border tax laws
Foreign‑derived intangible income (FDII)
( 55 ) ( 1.6 )

Tax credits
( 8 ) ( 0.2 )
Changes in valuation allowances
( 2 ) —  
Nontaxable or nondeductible items
( 3 ) ( 0.1 )
Changes in unrecognized tax benefits
( 6 ) ( 0.2 )
Tax expense, at effective tax rate
$ 1,258   36.2  

(1) State taxes in New York (including local taxes in New York City) and Connecticut made up the majority (greater than 50 percent) of the tax effect in this category.
(2) In July 2025, the OBBBA was enacted in the United States, which, among other provisions, repealed the requirement to capitalize U.S. R&E costs. As a result, we do not believe it is more likely than not that we will realize our deferred tax asset of $ 390  million related to R&E costs capitalized outside the United States. Of this $ 390  million, $ 336  million related to federal income tax while the remaining $ 54  million related to state and local income tax. These amounts would have otherwise been available to offset certain future U.S. taxes on our non-U.S. earnings, which, as a result of this repeal, we no longer project to be applicable to us. Therefore, in the third quarter of 2025, we recorded a one-time, non-cash income tax expense of $ 390  million.
 
(Dollars in millions) 2024 % 2023 %
Tax expense, at U.S. federal statutory rate $ 617   21.0   $ 585   21.0  
State and local income taxes, net of federal benefit
74   2.5   55   2.0  

Rate differential on foreign earnings 104   3.5   95   3.4  

Recognition of benefits related to uncertain tax positions ( 15 ) ( 0.5 ) ( 33 ) ( 1.2 )
Credits and other incentives ( 57 ) ( 1.9 ) ( 37 ) ( 1.3 )

Other ( 10 ) ( 0.3 ) 3   0.1  
Total provision for income taxes $ 713   24.3   $ 668   24.0  

Cognizant F-26
December 31, 2025 Form 10-K

Table of Contents                                                 

Income taxes paid, net of refunds for the year ended December 31, 2025 were as follows:

(in millions) Amount

Income Taxes Paid

U.S. federal
$ 272  
U.S. state & local
140  
Foreign
UK 246  
India 226  
Other jurisdictions
101  
Cash paid during the period for income taxes $ 985  

The significant components of deferred income tax assets and liabilities recorded on the consolidated statements of financial position were as follows as of December 31:

(in millions) 2025 2024
Deferred income tax assets:
Net operating losses $ 45   $ 50  
Revenue recognition (including intercompany revenue) 422   51  
Compensation and benefits 204   164  

Credit carryforwards 18   11  

Expenses not currently deductible
848   1,189  

1,537   1,465  
Less: valuation allowance ( 427 ) ( 48 )
Deferred income tax assets, net 1,110   1,417  
Deferred income tax liabilities:
Depreciation and amortization 295   298  
Deferred costs 16   25  

Deferred income tax liabilities 311   323  
Net deferred income tax assets $ 799   $ 1,094  

At December 31, 2025, we had foreign and U.S. net operating loss carryforwards of approximately $ 119 million and $ 75 million, respectively. We have recorded valuation allowances on certain net operating loss carryforwards.
We conduct business globally and file income tax returns in the United States, including federal and state, as well as various foreign jurisdictions. Tax years that remain subject to examination by the IRS are 2019 and onward, and years that remain subject to examination by state authorities vary by state. Years under examination by foreign tax authorities are 2003 and onward. In addition, transactions between our affiliated entities are arranged in accordance with applicable transfer pricing laws, regulations and relevant guidelines. As a result, and due to the interpretive nature of certain aspects of these laws and guidelines, we have pending applications for APAs before the taxing authorities in some of our most significant jurisdictions.
Changes in unrecognized income tax benefits were as follows for the years ended December 31:

(in millions) 2025 2024 2023
Balance, beginning of year $ 319   $ 260   $ 269  
Additions based on tax positions related to the current year 37   15   31  
Additions for tax positions of prior years 147   65   22  

Reductions for tax positions due to lapse of statutes of limitations ( 5 ) ( 15 ) ( 15 )
Reductions for tax positions related to prior years
( 3 ) ( 6 ) ( 33 )
Settlements ( 8 ) —   ( 14 )

Balance, end of year $ 487   $ 319   $ 260  

Cognizant F-27
December 31, 2025 Form 10-K

Table of Contents                                                 

The total amount of accrued net interest and penalties was $ 51  million a nd $ 35 million as of December 31, 2025 and 2024, respectively, and related to U.S. and foreign tax matters. The total amount of net interest and penalties recorded in the provision for income taxes in each of 2025, 2024 and 2023 was immaterial.

Note 11 — Derivative Financial Instruments

In the normal course of business, we use foreign exchange forward and option contracts to manage foreign currency exchange rate risk. Derivatives may give rise to credit risk from the possible non-performance by counterparties. Credit risk is limited to the fair value of those contracts that are favorable to us. We have limited our credit risk by limi ting the amount of credit exposure with any one financial institution and conducting ongoing evaluation of the creditworthiness of the financial institutions with which we do business. In addition, all the assets and liabilities related to the foreign exchange derivative contracts set forth in the table below are subject to master netting arrangements, such as the International Swaps and Derivatives Association Master Agreement, with each individual counterparty. These master netting arrangements generally provide for net settlement of all outstanding contracts with the counterparty in the case of an event of default or a termination event. We have presented all the assets and liabilities related to the foreign exchange derivative contracts, as applicable, on a gross basis, with no offsets, in our consolidated statements of financial position. There is no financial collateral (including cash collateral) posted or received by us related to the foreign exchange derivative contracts.
The following table provides information on the location and fair values of derivative financial instruments included in our consolidated statements of financial position as of December 31:

(in millions)   2025 2024
Designation of Derivatives Location on Statement of
Financial Position Assets Liabilities Assets Liabilities
Foreign exchange forward and option contracts – Designated as cash flow hedging instruments
Other current assets $ 1   $ —  $ 1   $ — 

Accrued expenses and other current liabilities
—  63   —  22  
Other noncurrent liabilities —  22   —  13  
Total 1   85   1   35  
Foreign exchange forward contracts - Not designated as hedging instruments Other current assets
2   —  1   — 
Accrued expenses and other current liabilities
—  1   —  2  
Total 2   1   1   2  
Total $ 3   $ 86   $ 2   $ 37  

Cash Flow Hedges
We have entered and continue to enter into a series of foreign exchange derivative contracts that are designated as cash flow hedges of Indian rupee denominated payments in India. These contracts are intended to partially offset the impact of movement of the Indian rupee against the U.S. dollar on future operating costs and are scheduled to mature each month during 2026 and 2027. The changes in fair value of these contracts are initially reported in "Accumulated other comprehensive income (loss)" in our consolidated statements of financial position and are subsequently reclassified to earnings within "Cost of revenues" and "Selling, general and administrative expenses" in our consolidated statements of operations in the same period that the forecasted Indian rupee denominated payments are recorded in earnings. As of December 31, 2025, we estimate that $ 47 million , net of tax, of net losses related to derivatives designated as cash flow hedges reported in "Accumulated other comprehensive income (loss)" in our consolidated statements of financial position is expected to be reclassified into earnings within the next 12 months.

Cognizant F-28
December 31, 2025 Form 10-K

Table of Contents                                                 

The notional value of the outstanding contracts by year of maturity was as follows as of December 31:

(in millions) 2025 2024
2025
$ —  $ 2,010  
2026
2,290   920  
2027
1,020   —  
Total notional value of contracts outstanding
$ 3,310   $ 2,930  

The activity related to the change in net unrealized gains and losses on the cash flow hedges included in "Accumulated other comprehensive income (loss)" in our consolidated statements of stockholders' equity is presented in Note 13 .

Other Derivatives
We use foreign exchange forward contracts to provide an economic hedge against balance sheet exposures to certain monetary assets and liabilities denominated in currencies other than the functional currency of our foreign subsidiaries. We entered into foreign exchange forward contracts that are scheduled to mature in the first quarter of 2026. Realized gains or losses and changes in the estimated fair value of these derivative financial instruments are recorded in the caption "Foreign currency exchange gains (losses), net" in our consolidated statements of operations.
Additional information related to the outstanding foreign exchange forward contracts not designated as hedging instruments was as follows as of December 31:

(in millions) 2025 2024
Notional Fair Value Notional Fair Value
Contracts outstanding $ 748   $ 1   $ 489   $ ( 1 )

The following table provides information on the location and amounts of realized and unrealized pre-tax gains and losses on the other derivative financial instruments for the year ended December 31:

(in millions) Location of Net Gains
on Derivative Instruments
Amount of Net Gains
on Derivative Instruments

    2025 2024
Foreign exchange forward contracts - Not designated as hedging instruments
Foreign currency exchange gains, net
$ 3   $ 10  

Note 12 — Fair Value Measurements

We measure our cash equivalents, certain investments, contingent consideration liabilities and foreign exchange forward contracts at fair value. Fair value is the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions.
The fair value hierarchy consists of the following three levels:
• Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities.
• Level 2 – Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.
• Level 3 – Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

Cognizant F-29
December 31, 2025 Form 10-K

Table of Contents                                                 

The following table summarizes the financial assets and (liabilities) measured at fair value on a recurring basis as of December 31, 2025:

(in millions) Level 1 Level 2 Level 3 Total
Cash equivalents:
Money market funds $ 24   $ —   $ —   $ 24  
Time deposits —  183   —  183  
Short-term investments:
Time deposits —  1   —  1  
Equity investment security 12   —   —   12  
Other current assets:

Foreign exchange forward contracts —   3   —   3  

Accrued expenses and other current liabilities:
Foreign exchange forward contracts —   ( 64 ) —   ( 64 )
Other noncurrent liabilities:

Foreign exchange forward contracts —   ( 22 ) —   ( 22 )

The following table summarizes the financial assets and (liabilities) measured at fair value on a recurring basis as of December 31, 2024:

(in millions) Level 1 Level 2 Level 3 Total
Cash equivalents:
Money market funds $ 40   $ —   $ —   $ 40  
Time deposits —  991   —  991  

Short-term investments:
Time deposits —  1   —  1  
Equity investment security 11   —   —   11  

Other current assets:
Foreign exchange forward contracts
—   2   —   2  

Accrued expenses and other current liabilities:
Foreign exchange forward contracts —   ( 24 ) —   ( 24 )

Other noncurrent liabilities:
Foreign exchange forward contracts —   ( 13 ) —   ( 13 )

During the three months ended March 31, 2024, we made $ 30  million of payments related to Level 3 contingent consideration liabilities, which reduced the balance of these liabilities to zero . We did not have any Level 3 contingent consideration liabilities during 2025.
We measure the fair value of money market funds based on quoted prices in active markets for identical assets and measure the fair value of our equity investment security based on the published daily net asset value at which investors can freely subscribe to or redeem from the fund. Our equity investment security is a U.S. dollar denominated investment in a fixed income mutual fund. The carrying value of the time deposits approximated fair value as of December 31, 2025 and 2024.
We estimate the fair value of each foreign exchange forward contract by using a present value of expected cash flows model. This model calculates the difference between the current market forward price and the contracted forward price for each foreign exchange forward contract and applies the difference in the rates to each outstanding contract. The market forward rates include a discount and credit risk factor.
During the years ended December 31, 2025, 2024 and 2023 there were no transfers among Level 1, Level 2 or Level 3 financial assets and liabilities.

Cognizant F-30
December 31, 2025 Form 10-K

Table of Contents                                                 

Note 13 — Accumulated Other Comprehensive Income (Loss)

Changes in "Accumulated other comprehensive income (loss)" by component were as follows for the year ended December 31, 2025:

2025
(in millions) Before Tax
Amount Tax
Effect Net of Tax
Amount
Foreign currency translation adjustments:
Beginning balance $ ( 261 ) $ 7   $ ( 254 )
Change in foreign currency translation adjustments
272   ( 6 ) 266  
Ending balance $ 11   $ 1   $ 12  

Unrealized (losses) on cash flow hedges:

Beginning balance $ ( 34 ) $ 9   $ ( 25 )
Unrealized (losses) arising during the period
( 85 ) 21   ( 64 )
Reclassifications of net losses to:

Cost of revenues
32   ( 8 ) 24  
SG&A expenses 3   ( 1 ) 2  
Net change
( 50 ) 12   ( 38 )
Ending balance $ ( 84 ) $ 21   $ ( 63 )
Changes in net defined benefit obligations:

Beginning balance $ ( 20 ) $ 3   $ ( 17 )
Prior service costs 1 and gains and losses, net of amortization
( 129 ) 37   ( 92 )
Ending balance $ ( 149 ) $ 40   $ ( 109 )
Accumulated other comprehensive income (loss):

Beginning balance $ ( 315 ) $ 19   $ ( 296 )
Other comprehensive income (loss) 93   43   136  
Ending balance $ ( 222 ) $ 62   $ ( 160 )

(1) See Note 15 .

Cognizant F-31
December 31, 2025 Form 10-K

Table of Contents                                                 

Changes in "Accumulated other comprehensive income (loss)" by component were as follows for the years ended December 31, 2024 and 2023:

2024 2023
(in millions) Before Tax
Amount Tax
Effect Net of Tax
Amount Before Tax
Amount Tax
Effect Net of Tax
Amount
Foreign currency translation adjustments:
Beginning balance $ ( 109 ) $ 5   $ ( 104 ) $ ( 256 ) $ 8   $ ( 248 )
Change in foreign currency translation adjustments
( 152 ) 2   ( 150 ) 147   ( 3 ) 144  
Ending balance $ ( 261 ) $ 7   $ ( 254 ) $ ( 109 ) $ 5   $ ( 104 )
Unrealized gains (losses) on cash flow hedges:

Beginning balance $ 13   $ ( 3 ) $ 10   $ ( 68 ) $ 17   $ ( 51 )
Unrealized (losses) gains arising during the period
( 35 ) 9   ( 26 ) 55   ( 14 ) 41  
Reclassifications of net (gains) losses to:

Cost of revenues
( 11 ) 3   ( 8 ) 23   ( 5 ) 18  
SG&A expenses ( 1 ) —   ( 1 ) 3   ( 1 ) 2  
Net change
( 47 ) 12   ( 35 ) 81   ( 20 ) 61  
Ending balance $ ( 34 ) $ 9   $ ( 25 ) $ 13   $ ( 3 ) $ 10  
Losses on defined benefit plans:

Beginning balance $ —   $ —   $ —   $ —   $ —   $ —  
Losses on defined benefit plans
( 20 ) 3   ( 17 ) —   —   —  
Ending balance $ ( 20 ) $ 3   $ ( 17 ) $ —   $ —   $ —  
Accumulated other comprehensive income (loss):
Beginning balance $ ( 96 ) $ 2   $ ( 94 ) $ ( 324 ) $ 25   $ ( 299 )
Other comprehensive income (loss)
( 219 ) 17   ( 202 ) 228   ( 23 ) 205  
Ending balance $ ( 315 ) $ 19   $ ( 296 ) $ ( 96 ) $ 2   $ ( 94 )

Note 14 — Commitments and Contingencies

We are involved in various claims and legal proceedings arising in the ordinary course of business. We accrue a liability when a loss is considered probable and the amount can be reasonably estimated. When a material loss contingency is reasonably possible but not probable, we do not record a liability, but instead disclose the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can be made. Legal fees are expensed as incurred. While we do not expect that the ultimate resolution of any existing claims and proceedings (other than the specific matters described below, if decided adversely), individually or in the aggregate, will have a material adverse effect on our financial position, an unfavorable outcome in some or all of these proceedings could have a material adverse impact on results of operations or cash flows for a particular period. This assessment is based on our current understanding of relevant facts and circumstances. As such, our view of these matters is subject to inherent uncertainties and may change in the future.

On January 15, 2015, Syntel sued TriZetto and Cognizant in the USDC-SDNY. Syntel’s complaint alleged breach of contract against TriZetto, and tortious interference and misappropriation of trade secrets against Cognizant and TriZetto, stemming from Cognizant’s hiring of certain former Syntel employees. Cognizant and TriZetto countersued on March 23, 2015, for breach of contract, misappropriation of trade secrets and tortious interference, based on Syntel’s misuse of TriZetto confidential information and abandonment of contractual obligations. Cognizant and TriZetto subsequently added federal D TSA and copyright infringement claims for Syntel’s misuse of TriZetto’s proprietary technology. The parties’ claims were narrowed by the court and the case was tried before a jury, which on October 27, 2020 returned a verdict in favor of Cognizant in the amount of $ 855  million, including $ 570  million in punitive damages. On April 20, 2021, the USDC-SDNY issued a post-trial order that, among other things, affirmed the jury’s award of $ 285  million in actual damages, but r educed the award of punitive damages from $ 570  million to $ 285  million, thereby reducing the overall damages award from $ 855  million to

Cognizant F-32
December 31, 2025 Form 10-K

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$ 570  million. The USDC-SDNY subsequently issued a final judgment consistent with the April 20 th order. On May 26, 2021, Syntel filed a notice of appeal to the Second Circuit, and on June 3, 2021 the USDC-SDNY stayed execution of judgment pending appeal. On May 25, 2023, the Second Circuit issued an opinion affirming in part and vacating in part the judgment of the USDC-SDNY and remanding the case for further proceedings consistent with its opinion. The Second Circuit affirmed the judgment in all respects on liability but vacated the $ 570  million award that had been based on avoided development costs under the DTSA, and it remanded the case to the USDC-SDNY for further evaluation of damages. On June 23, 2023, the Second Circuit issued its mandate returning the case to the USDC-SDNY. On March 13, 2024, the USDC-SDNY issued a ruling that vacated the alternate compensatory damages awards that were within the scope of the Second Circuit’s remand and awarded TriZetto and Cognizant approximately $ 15  million in attorney’s fees. On October 23, 2024, the USDC-SDNY granted TriZetto and Cognizant’s motion for a new trial on the amount of compensatory damages owed to TriZetto and Cognizant. On June 24, 2025, the parties proceeded to trial, and on June 30, 2025, the jury returned a verdict in favor of TriZetto and Cognizant, awarding $ 70  million in compensatory damages. Entry of judgment remains pending. Thereafter, we expect Syntel to appeal and thus we will not record any gain in our financial statements until it becomes realizable.

On February 28, 2019, a ruling of the SCI interpreting the India Defined Contribution Obligation altered historical understandings of the obligation, extending it to cover additional portions of the employee’s income. As a result, the ongoing contributions of our affected employees and the Company were required to be increased. In the first quarter of 2019, we accrued $ 117 million with respect to prior periods, assuming retroactive application of the SCI’s ruling, in "Selling, general and administrative expenses" in our consolidated statement of operations. There is significant uncertainty as to how the liability should be calculated as it is impacted by multiple variables, including the period of assessment, the application with respect to certain current and former employees and whether interest and penalties may be assessed. Since the ruling, a variety of trade associations and industry groups have advocated to the Indian government, highlighting the harm to the information technology sector, other industries and job growth in India that would result from a retroactive application of the ruling. No proceedings have been initiated by the Government in respect of a substantial portion of the claim in the seven years that have passed since the judgment was delivered. It is possible the Indian government will review the matter and there is a substantial question as to whether the Indian government will apply the SCI’s ruling on a retroactive basis. As such, the ultimate amount of our obligation may be materially different from the amount accrued.

On October 31, 2016, November 15, 2016 and November 18, 2016, three putative shareholder derivative complaints were filed in New Jersey Superior Court, Bergen County, naming us, all of our then current directors and certain of our current and former officers at that time as defendants. These actions were consolidated in an order dated January 24, 2017. The complaints asserted claims for breach of fiduciary duty, corporate waste, unjust enrichment, abuse of control, mismanagement, and/or insider selling by defendants. On April 26, 2017, the New Jersey Superior Court deferred further proceedings by dismissing the consolidated putative shareholder derivative litigation without prejudice but permitting the parties to file a motion to vacate the dismissal in the future.

On February 22, 2017, April 7, 2017, May 10, 2017 and March 11, 2019, four additional putative shareholder derivative complaints were filed in the USDC-NJ, naming us and certain of our current and former directors and officers at that time as defendants. These actions were consolidated in an order dated May 14, 2019. On August 3, 2020, lead plaintiffs filed a consolidated amended complaint. The consolidated amended complaint asserted claims similar to those in the previously-filed putative shareholder derivative actions. On February 14, 2022, we and certain of our current and former directors and officers moved to dismiss the consolidated amended complaint. On September 27, 2022, the USDC-NJ granted those motions and dismissed the consolidated amended complaint in its entirety with prejudice. Plaintiffs filed a notice of appeal on October 27, 2022. On May 3, 2024, the Third Circuit affirmed the dismissal of the consolidated amended complaint.

On June 1, 2021, an eighth putative shareholde r derivative complaint was filed in the USDC-NJ, naming us and certain of our current and former directors and officers at that time a s defendants. The complaint asserts claims similar to those in the previously-filed putative shareholder derivative actions. On March 31, 2022, we and certain of our current and former directors and officers moved to dismiss the complaint. On November 30, 2022, the USDC-NJ denied without prejudice those motions. The USDC-NJ ordered the parties to conduct limited discovery related to the issue of whether our board of directors wrongfully refused the plaintiff’s earlier litigation demand and, after the conclusion of such limited discovery, to file targeted motions for summary judgment on the issue of wrongful refusal. On July 25, 2025, we reached an agreement in principle to settle this lawsuit, which later was approved by our board of directors and the individual defendants. The amount of the settlement is expected to be immaterial to the Company’s consolidated financial statements. On November 26, 2025, plaintiff filed an unopposed motion for preliminary approval of the settlement, which is awaiting the court's approval.

See Note 10 for information relating to the ITD Dispute.

Cognizant F-33
December 31, 2025 Form 10-K

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On September 18, 2017, three former employees filed suit against Cognizant in the USDC-CDCA, alleging that they and similarly situated employees suffered disparate treatment on the basis of race in violation of 42 U.S.C. § 1981. Plaintiffs subsequently amended their complaint three times, adding a fourth former employee plaintiff and claims for both disparate treatment and disparate impact on the basis of race and national origin under Title VII and disparate treatment and disparate impact on the basis of race and national origin under Title VII. Plaintiffs filed the operative Third Amended Complaint-Corrected on January 19, 2021. Cognizant filed its answer on January 29, 2021.

On May 13, 2022, plaintiffs filed a motion requesting that the USDC-CDCA certify the case as a class action for two putative classes of plaintiffs consisting of: (1) all individuals who are not of South Asian race or Indian national origin who applied to Cognizant in the U.S. and were not hired since September 2013 (the “hiring class”); and (2) all individuals who are not of South Asian race or Indian national origin who have been terminated in the U.S. since September 2013 (the “terminations class”). Cognizant opposed. On October 27, 2022, the court denied certification for the hiring class and the terminations class. However, the court granted certification for a sub-set of the terminations class limited to approximately 2,300 former employees whose employment had been terminated from the “bench,” a designation for employees who are not allocated to an active project. On November 10, 2022, Cognizant filed a petition with the Ninth Circuit requesting permission to appeal the class certification order as to the bench terminations class. The Ninth Circuit denied the petition on January 26, 2023.

From June 13, 2023 to June 26, 2023, the USDC-CDCA held a class action jury trial on the first phase of plaintiffs’ Section 1981 claim and Title VII disparate treatment claim. The questions presented were whether Cognizant engaged in a pattern or practice of discrimination against non-South Asian and non-Indian employees with respect to bench terminations, and if so, whether punitive damages are available for class members who prevail on their claims. The jury deadlocked, and the court declared a mistrial.