Navigating Change: Cognizant's AI-Driven Growth Amidst Economic Challenges

US-based IT leader Cognizant has reported a substantial 53% decline in its net income for Q3 2025, amounting to USD 274 million. The drop is attributed to a one-time, non-cash income tax expense of USD 390 million, linked to the enactment of the One Big Beautiful Bill Act in the United States.

Despite the profit dip, the company's revenues rose 7.3% year-over-year to USD 5,415 million, driven by investments in AI technologies. This growth has enabled the company to revise its full-year revenue forecast upwards, highlighting the impact of its ongoing transformation into an AI-driven enterprise.

Cognizant, under CEO Ravi Kumar S, is positioning itself as a frontrunner in AI, with 30% of its code now machine-written. The firm is on track to hire between 15,000 and 20,000 freshers this year, while increasing its local hiring to reduce dependency on H1B visas. Cognizant's third-quarter also saw it repurchase 6.3 million shares for USD 450 million.