CTSH · 10-Q · 2026Q3 · Full report

Operating Expense Trends

COGNIZANT TECHNOLOGY SOLUTIONS CORP · 2026-10-29 · Importance 24 · Surprise 14

Q3 2026 cost of revenues increased $170 million year over year, and its share of revenue rose 0.1 percentage point to 66.2%, primarily from third-party product sales and higher compensation costs, partly offset by favorable foreign exchange. SG&A increased $8 million in the quarter, but declined 0.6 percentage point as a share of revenue to 14.8%, reflecting Project Leap savings net of AI investments, partly offset by acquisition dilution. For the first nine months, SG&A fell $74 million, or 3.0%, and declined 1.1 percentage points as a share of revenue, partly due to an $81 million partial reversal of the 2019 India Defined Contribution Obligation liability.

Key facts

• Nine-month cost of revenues increased $584 million and rose 0.4 percentage point as a share of revenue, primarily due to third-party product sales and higher compensation costs, partly offset by favorable FX. source
• Nine-month SG&A expense decreased $74 million and declined 1.1 percentage points as a share of revenue, primarily due to an $81 million partial reversal of the 2019 India Defined Contribution Obligation liability and Project Leap savings net of AI investments, partly offset by acquisition dilution. source
• Q3 2026 cost of revenues increased $170 million, and its share of revenue rose 0.1 percentage point, driven primarily by third-party product sales and higher compensation costs, partly offset by favorable FX movements. source
• Cognizant had approximately 359,900 employees at the end of Q3 2026, compared with 349,800 at the end of Q3 2025. source
• Depreciation and amortization expense increased 10.4% in Q3 2026 compared with Q3 2025, driven by amortization of acquired intangible assets. source
• Depreciation and amortization expense increased 5.6% in the nine months ended September 30, 2026, driven by amortization of intangible assets from recent acquisitions. source
• Q3 2026 SG&A expense as a percentage of revenue decreased 0.6 percentage point, primarily due to Project Leap savings net of AI investments, partly offset by acquisition dilution. source
• Cognizant's voluntary attrition rate for Tech Services was 12.6% in each of the trailing twelve-month periods ended September 30, 2026 and September 30, 2025. source