Cognizant forecasts 2025 revenue below estimates as businesses temper IT spending
Figurines with computers and smartphones are seen in front of Cognizant logo in this illustration taken, February 19, 2024. REUTERS/Dado Ruvic/Illustration/File Photo
Cognizant Technology Solutions forecast annual revenue below estimates on Wednesday, as uncertainty about the path of future interest rate cuts forces companies to temper spending on IT services and consultancy.
Persistent high capital costs continue to strain IT spending, prompting enterprises to cut back on consultancy services while prioritizing investments in AI-related projects.
Cognizant's shares fell 1.2 per cent in extended trading.
Uncertainty around rate cuts by the U.S. Federal Reserve this year is exacerbated by President Donald Trump's changes to immigration policies, tariffs and other initiatives, forcing companies to limit spending.
The company's fourth-quarter revenue stood at $5.08 billion, compared to analysts' expectations of $5.07 billion, according to data compiled by LSEG.
Cognizant's adjusted profit came in at $1.21 per share in the quarter ended December 31, compared with estimates of $1.12 per share.
The New Jersey-based company expects first-quarter revenue in the range of $5 billion to $5.1 billion, compared to analysts' estimates of $5.06 billion.
Cognizant expects its 2025 revenue to be between $20.3 billion and $20.8 billion, lower than estimates of $20.89 billion.
It projected 2025 adjusted earnings between $4.90 per share and $5.06 per share. The midpoint of the forecast is $4.98 per share, compared with estimates of $4.99 per share.
