CTSH · 8-K · 20261029PR000039

Income Tax Rate Changes

COGNIZANT TECHNOLOGY SOLUTIONS CORP · 2026-10-29 · Importance 57 · Surprise 64

Q3 income tax provision was $237 million, compared with $613 million in Q3 2025, when the company recorded a one-time $390 million non-cash tax expense. The prior-year charge followed the conclusion that a $390 million deferred tax asset related to R&E costs capitalized outside the United States would not be realized after the OBBBA repealed the requirement to capitalize U.S. R&E costs. Q3 effective tax expense was approximately 27.5% of pretax income, versus approximately 69.1% in the prior-year quarter. The tax-related prior-year charge increased reported GAAP diluted EPS by comparison by depressing the 2025 base by $0.80 per share.