Having stabilized after a challenging period, the company feels that the worst of global uncertainty is behind it, with clients starting to plan for increased technology expenditures. Management anticipates clearer budget visibility by early 2026, indicating no negative signals from clients thus far.
Surya Gummadi, President of Cognizant Americas, commented during an interview with CNBC-TV18 at the World Economic Forum 2026 in Davos
, stating that demand conditions are steadily improving as geopolitical tensions and tariff concerns stabilize.
He observed that clients are experiencing pent-up demand following several cautious quarters, and industry trends indicate an acceleration in growth as companies transition from 2025 into the new year.
Simultaneously, Jatin Dalal, Chief Financial Officer of Cognizant, mentioned that the company is gearing up for its next growth phase by focusing on artificial intelligence, outcome-based contracts, and selective mergers and acquisitions.
With early investments in AI platforms and existing partnerships, Cognizant believes it is well-equipped to meet demand as clients shift toward larger, transformational deals centered on measurable business outcomes, rather than merely cost savings.
This is the edited excerpt of the interview.
Q: Let’s begin by discussing the situation in America. The focus here at Davos 26 is on President Trump and his actions. From your clients’ point of view, what are you observing in the US today?
Gummadi: Among American clients, based on our guidance from the third quarter and commentary from peers, we see a definite acceleration as we exit 2025 and enter 2026, which could be interpreted as a sign of optimism. However, clients will finalize their budgets around February or March this year. That’s when we’ll determine if there is an opening and to what extent.
Q: What is your general impression? Do you think it’s likely to improve compared to the previous year?
Gummadi: No negative signals have emerged from clients regarding their budgets so far.
Q: I’m asking because there’s considerable uncertainty and conversations around geopolitical issues and economic confrontations. Yet, you’re indicating that you don’t see any visible signs of this affecting investment sentiment?
Gummadi: In many ways, that uncertainty has leveled off over the past few quarters. Geopolitical tensions, tariffs, and other issues have stabilized. Now, clients are experiencing pent-up demand. While we haven’t seen definitive signals, there is no indication that conditions will worsen. Additionally, we’re observing growth acceleration in the fourth quarter compared to last year’s fourth quarter, which gives us hope that 2026 will be promising.
Q: What does this mean for you, Jatin, in terms of growth expectations over the next three years? Ravi mentioned that the company has stabilized and delivered results from its turnaround plan. Now it’s time to accelerate—what does that look like in numerical terms?
Dalal: To take a step back, for the first three quarters of 2025, we ranked second in the growth table. We’ve clearly shown acceleration even in a slow or uncertain environment. Over the coming years, we aim to position ourselves as a top-tier growth company relative to our peers while gradually expanding margins. We’re making strategic investments: we were the first to invest in a partnership with Anthropic and to commit a billion dollars to AI. We’re establishing the right foundation so that we’re ready to capitalize whenever demand flows in.
Q: Considering the flow of demand and opportunities, M&A has significantly contributed, yielding 250 basis points. Do you foresee it as a key driver of growth moving forward?
Dalal: Yes, while not in terms of quantity, the impact that M&A can have during this time is substantial, potentially providing an “escape velocity” that differentiates us from other players by integrating truly transformational capabilities. Therefore, it will be a pivotal element of our growth strategy.
One area we’ve consistently emphasized is AI. We’ve invested in three cloud initiatives within Surya’s domain, where one company has seen 20% growth. Clearly, this operates within the double-digit growth realm that we’ve discussed. We will keep investing in similar ventures.
Q: I’ve heard from your peers that the business model is pivoting toward ‘outcomes as a service.’ Can you explain how this manifests at Cognizant? How are you structuring deals and pricing them differently? How is the customer expectation evolving?
Gummadi: The concept of outcomes as a service isn’t new; it’s been around for years. However, we hadn’t broadly engaged clients in this way until now. With AI influencing everything, clients are seeking partners who share risks and can guarantee outcomes. They’re increasingly pushing for contracts focused on outcomes, where we co-invest and share in the gains. We’re beginning to structure large deals this way, emphasizing gain-sharing and outcome-based arrangements.
Q: Does the industry seem to be moving in that direction?
Gummadi: Yes, it is indeed shifting in that direction. However, currently, such deals are relatively scarce, yet we observe a directional pivot occurring.
Q: Deal flow has been robust this quarter for you and your peers. What’s your sense regarding transformational deals? Will these become more frequent, and what do you anticipate for typical deal sizes moving forward?
Gummadi: Analyzing the past 12 to 18 months, most activities focused on productivity, utilizing AI to enhance efficiency throughout the tech stack and across enterprises. We’ve seen many large deals in that context. Now, we’re witnessing deals transitioning upwards, which we refer to as ‘industrializing AI.’ This includes preparing the data layer, building the entire tech stack, and creating agent hierarchies for orchestration.
For one of our healthcare clients, we’ve supported productivity enhancements in their tech estate for the past 12 to 18 months. We’re now advancing to build their complete AI stack and hierarchies. We’ve structured a significant deal with them, and we’re noticing many similar deals emerging in the market. We aim to pivot in this direction as it benefits everyone involved.
Q: Regarding the AI pivot, which is a major priority for both of you, I see that your peers are starting to disclose AI-specific revenues. What are your thoughts? If everything is AI, is a separate category for AI expenditures necessary, and is there a more transparent way to measure it?
Gummadi: We experienced something similar during the digital era. Back in 2014, 2015, 2016, there was a sudden trend where everything became ‘digital.’ I perceive a similar situation with AI now—it’s ubiquitous in all projects we undertake and deals we sign. Instead of simply declaring AI revenue, more credible and measurable outcomes would involve defining the right AI-driven outcomes, whether it’s enhancing business value, growth, or margin improvements. For instance, for one of our clients, we discussed a KPI involving faster product launches—traditionally six to eight months, we committed to reducing that to two to three months using AI.
So, metrics like these hold more validity than merely reporting AI revenue. In fact, we were the first to present our AI projects to stakeholders, and now their numbers are growing rapidly, with nearly every project including an AI element.
Dalal: We have begun sharing our perspective on essential metrics, such as revenue per employee and profit per employee, because ultimately, AI should drive superior throughput or positive GDP with reduced human effort. That is what we’re focusing on.
Q: A significant event expected in 2026 is the regulator’s approval for a secondary listing in India. There’s considerable discussion surrounding this. Jatin, how do you think this might impact the company?
Dalal: There are a few strategic rationales we consider. First, we have a large workforce, and we currently struggle to offer them ownership easily. Second, our substantial presence in India means that being listed on the stock exchange would enhance our employer brand. Lastly, there are investors in India who are familiar with us but lack direct investment access. Therefore, we see substantial merit in this move. As previously discussed, we’re working with partners to understand the regulations and monitor developments closely.
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