Cognizant

Management has articulated a 50/50 framework for deploying free cash flow between M&A and shareholder returns.

In 2024, 1.2 billion dollars was returned via buybacks and dividends; in 2025 the company was on track to return ~2.0 billion dollars, with 13.1 million shares repurchased for ~994 million dollars YTD through Q3 and a quarterly dividend raised to 0.31 dollars per share.

The repurchase authorization had ~2.24 billion dollars remaining as of September 30, 2025. M&A has been focused and strategic: Thirdera (ServiceNow), Belcan (ER&D, A&D), and 3Cloud (Azure/AI) improve mix and capabilities and appear sensibly sized. SBC is contained (stock-based compensation expense ~175 million dollars in 2024).

Execution risk exists in integrating Belcan and 3Cloud and achieving synergy/margin targets, but the program is coherent and supported by FCF.