CTSH · 10-Q · 2026Q3 · Full report

FX / Currency Impact

COGNIZANT TECHNOLOGY SOLUTIONS CORP · 2026-10-29 · Importance 31 · Surprise 32

Indian rupee-denominated costs represented approximately 22% of Cognizant’s global operating costs in the third quarter of 2026, exposing results to exchange-rate movements. Net of designated cash-flow hedges, rupee depreciation positively affected operating margin by approximately 120 basis points year over year; excluding those hedges, the positive effect was approximately 160 basis points. Each additional 1.0% exchange-rate change between the rupee and U.S. dollar would move operating margin by 17 basis points excluding hedges, while hedge settlements reduced margin by approximately 65 basis points in the quarter.

Key facts

• Excluding applicable designated cash-flow hedges, Indian rupee depreciation improved Q3 2026 operating margin by approximately 160 basis points; each additional 1.0% exchange-rate change moves margin by 17 basis points excluding hedges. source
• Net of applicable hedges, Indian rupee depreciation improved Cognizant's Q3 2026 operating margin by approximately 120 basis points year over year. source
• Net of applicable designated cash-flow hedges, Indian rupee depreciation improved nine-month 2026 operating margin by approximately 90 basis points year over year; excluding those hedges, it improved margin by approximately 150 basis points. source
• Approximately 22% of Cognizant's global operating costs were denominated in Indian rupees in Q3 2026. source
• Cognizant's undesignated foreign-exchange hedges had a notional value of $653 million as of September 30, 2026. source
• Settlement of Cognizant's cash-flow hedges reduced operating margin by approximately 65 basis points in Q3 2026 versus approximately 20 basis points in Q3 2025. source
• Cash-flow hedge settlements reduced nine-month 2026 operating margin by approximately 70 basis points, compared with approximately 10 basis points in the prior-year period. source