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Random freezes, missing sound and display glitches usually trace back to one bad driver. Find and replace yours safely.Free scan · under a minuteRead an IT services company’s results by separating four different signals: revenue shows work recognized now; bookings show contract value signed; utilization, when disclosed, shows how much labor capacity is deployed; and operating margin shows operating profit per dollar of revenue. None tells the whole story alone. Compare like periods and definitions, check acquisition and currency effects, and treat bookings as a possible lead on future work—not a promise of future revenue.
Start with revenue: what the company recognized this quarter
Revenue is the clearest measure of delivered activity recognized during the reporting period. Start with reported year-over-year growth, then look for constant-currency growth, segment and geographic mix, and acquisition contributions before deciding what drove the change.
Constant-currency growth restates current-period revenue using the comparative period’s exchange rates and compares it with comparative-period reported revenue. It helps isolate foreign-exchange effects, but does not by itself establish organic demand or explain changes in business mix. Cognizant describes this calculation in its Q2 2026 results release.
For example, Cognizant reported Q2 2026 revenue of $5.481 billion, up 4.5% year over year as reported and 4.1% in constant currency. The gap indicates that currency affected the reported comparison; it does not explain growth from acquisitions or changes in the company’s business mix. In FY2025, revenue was $21.108 billion, up 7.0% reported and 6.4% in constant currency; the company said its Belcan acquisition contributed approximately 260 basis points to full-year revenue growth. These company-reported figures show why acquisition contribution belongs alongside currency when describing growth.
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Read bookings as signed contract value, not earned revenue
Cognizant defines bookings as the total contract value (TCV) of new contracts, including new sales, renewals, and expansions. Its book-to-bill ratio is trailing-twelve-month (TTM) bookings divided by TTM revenue. Those are company-defined measures, not a substitute for reported revenue.
A book-to-bill ratio above 1 means bookings exceeded revenue over the same trailing twelve-month period under that calculation. It can suggest a larger pool of signed contract value relative to recent revenue, but it does not promise when—or whether—the full value will be recognized. Conversion depends on contract length and type, client spending and delivered volumes; contracts may also change or end. Cognizant says most of its contracts can be terminated by clients on short notice, often without penalty, and cautions that bookings are not comparable to or a substitute for reported revenue.
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Bookings can be lumpy: a few large signatures can move a quarterly figure substantially. Cognizant defines large deals as TCV of at least $100 million and mega deals as at least $500 million. Check both quarterly direction and TTM bookings or book-to-bill, and note deal concentration rather than treating a single ratio as a forecast.
Why quarterly and trailing figures can disagree
In Q2 2026, Cognizant’s bookings declined 6% year over year, yet TTM bookings were $29.1 billion, up 5%, with book-to-bill of approximately 1.3x. The quarter also included seven large deals. In Q1 2026, quarterly bookings rose 21% year over year, while TTM bookings were $29.6 billion, up 11%, with book-to-bill of approximately 1.4x. Quarterly bookings and TTM measures cover different windows, so they can point in different directions; neither should be read as revenue growth.
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Use utilization only when the company defines and reports it
Utilization can help assess how much of a services workforce’s available capacity is deployed, but the percentage is meaningful only with its definition. Companies may use different employee populations, available-time denominators, or exclusions. Compare the same definition and period, and read the figure alongside workforce context such as headcount and attrition.
Cognizant’s Q1 and Q2 2026 results releases report workforce measures such as headcount and attrition but do not report utilization. Do not infer a utilization rate from those measures, bookings, or margins; the figure is simply not disclosed in those results.
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Compare GAAP and adjusted operating margins
Operating margin is operating profit as a share of revenue. Read the GAAP margin and any adjusted margin together, then inspect the reconciliation and excluded items. Adjusted margin is a non-GAAP measure: Cognizant says it is not a substitute for, or superior to, GAAP measures, and that its definition may differ from measures used by other companies.
Cognizant reported Q2 2026 GAAP operating margin of 15.9% and adjusted operating margin of 16.0%; year over year, the company reported increases of 30 and 40 basis points, respectively. In Q1 2026, both margins were 15.6%. For FY2025, GAAP margin was 16.1% and adjusted margin was 15.8%, showing that adjusted is not automatically the higher measure.
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When adjusted margin rises while GAAP margin is flat or falls—or when their relative positions change—check the adjustment bridge before choosing which figure to emphasize. Cognizant’s Q1 2026 release said adjusted operating margin excluded unusual items, including a property-sale gain in Q1 2025. An adjustment can change the comparison even if the underlying business has not changed in the same way.
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For a company or period comparison, use the same reporting window and definitions. A useful checklist is:
- Growth: Compare reported and constant-currency revenue growth; check segment and geographic mix and quantify acquisition contributions where disclosed.
- Demand signals: Check quarterly bookings direction, TTM bookings and book-to-bill, and whether large deals concentrate the result. Treat them as contract-value indicators, not guaranteed revenue.
- Capacity: Use utilization only if it is disclosed with its employee group, denominator, and period; consider other reported workforce context.
- Profitability: Compare GAAP and adjusted margin, examine the adjustment reconciliation, and be cautious about ranking companies with different non-GAAP definitions.
- Context: Review guidance changes and cash flow when available. Guidance is management’s outlook, not achieved performance.
For example, Cognizant’s Q2 2026 release, dated July 29, 2026, revised its 2026 constant-currency revenue-growth guidance to 4.0%–5.5% and adjusted operating-margin guidance to 16.0%–16.2%. Those are forward-looking targets as of that date, not Q2 results. The same release’s results show why it is useful to keep the measures distinct: revenue growth was positive, TTM bookings exceeded TTM revenue under the company’s ratio, and adjusted margin was slightly above GAAP margin, while quarterly bookings declined. Together these facts describe different parts of performance; none alone establishes what future revenue or margins will be.
For the company’s definitions and full reconciliations, see Cognizant’s Q2 2026 results, Q1 2026 results, and FY2025 results.
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