Total Organic Revenue

FY 2026

decline by 3% to 5% "

decline by 3% to 5% "

no change

Adjusted EBIT Margin

FY 2026

between 7% to 8% "

between 7% and 8% "

no change

Non-GAAP Diluted EPS

FY 2026

between $2.75 and $3.25 "

between $2.85 and $3.35 "

raised

Free Cash Flow

FY 2026

about $600 million "

approximately $600 million "

no change

Reported Revenue

FY 2026

no prior guidance

in the range of $12.6 billion to $12.9 billion "

no prior guidance

Bookings and Pipeline Strength

Discussed across Q4 2025, Q3 2025, and Q2 2025 with strong bookings growth (e.g., over 20% year-over-year in Q4 " " , book-to-bill ratios up to 1.3x in Q3 " " , and expectations for improvements in Q2 " ).

Emphasized in Q1 2026 with 14% year-over-year growth, a trailing twelve-month book-to-bill ratio improvement (1.06 vs. 1.03 previously), and segmented insights (CES strong at 1.2 and GIS impacted by seasonal deferrals). " " "

Consistent positive momentum with recurring double-digit bookings growth. However, there is slight variability – for example, the GIS segment shows seasonality and deferred larger deals, while CES continues to lead. Overall, execution improvements remain a key focus.

Free Cash Flow Generation and Capital Discipline

Q4 2025, Q3 2025, and Q2 2025 highlighted variable free cash flow performance (e.g., Q4’s strong FCF of $687 million adjusted for capital changes " " , Q3’s $483 million FCF with debt reduction efforts " " , and Q2’s focus on consistent fundamentals with reduced capex and lease originations " " ).

Q1 2026 reported improved FCF generation at $97 million (up from $45 million year-over-year), lower capital expenditure as a % of revenue (2.8% vs. 6%), continued debt reduction, and disciplined capital management. " " "

Ongoing emphasis on strengthening liquidity and reducing debt is evident. While FCF numbers fluctuate quarter-to-quarter, disciplined capital management remains a consistent and positive theme, with improvements in efficiency and debt reduction continuing across periods.

Organic Revenue Decline and Margin Pressure

In Q4 2025, Q3 2025, and Q2 2025 discussions featured organic revenue declines (around 4–5% decline and segment-specific variations) and margin pressures with adjusted EBIT margins dropping (e.g., a 110 bps decline in Q4 " " , margin improvements in Q3 due to cost controls " " , and Q2 highlighting a 5.6% overall revenue decline with margin expansion from cost management " " ).

Q1 2026 reported a 4.3% organic decline in total revenue with segment nuances (CES down 4.4%, GIS down 5.7%, while Insurance grew by 3.6%) and modest margin pressure (adjusted EBIT margin at 6.8% with SG&A increases), although outlook improvements are expected later in the year. " " "

The organic revenue decline and margin challenges have been consistent across periods. Q1 2026 continues this trend with similar percentages and segmentation nuances, although there is an expectation of margin improvements later. The focus remains on managing declines while investing in long‐term growth drivers.

Operational and Execution Uncertainties

Q4 2025 emphasized structural, operational, and cultural rebuilds along with SaaS transition plans and booking conversion challenges " " " ; Q3 2025 detailed variability in booking conversion timelines and early-stage SaaS initiatives " " ; Q2 2025 discussed execution improvements, sales discipline initiatives, and cautious optimism regarding booking ratios. " " "

Q1 2026 addressed uncertainties by discussing proactive solutioning, planning for the SaaS transition (not yet significant in insurance), and managing booking conversion risks through solid backlogs and operational rigor. " " "

Concerns around operational execution, SaaS transition, and booking conversion have been a recurring theme. In Q1 2026 these issues persist but with a continued focus on improving execution through proactive measures and backlogged opportunities. The sentiment remains cautious but determined to overcome execution challenges.

Innovative AI Integration and Proactive Solutions

Q4 2025 presented early Gen AI adoption with targeted investments and pilots (e.g., Carnival Cruise and internal AI redesigns " " ); Q3 2025 showed collaborative initiatives (e.g., AI-driven projects with Singapore General Hospital and centers of excellence " ); Q2 2025 highlighted concrete Gen AI engagements (for Equitable Holdings and a global bank, plus the launch of AI Centers of Excellence " " ).

Q1 2026 elevated the theme with enterprise-grade AI integration, training over 50,000 Gen AI-enabled engineers, achieving 92% AI readiness, and launching proactive, AI-centric solutions across segments with strategic wins and partnerships (e.g., with Unigaha and a German supplier). " " " " "

The emphasis on AI has grown significantly. While previous periods focused on pilots and early initiatives, Q1 2026 demonstrates broader integration and scaling of AI capabilities. The shift toward proactive, enterprise-grade AI solutions is seen as a major opportunity for future growth and differentiation, reflecting a positive, more aggressive sentiment.

Strategic Leadership and Enhanced Go-to-Market Initiatives

Across Q4, Q3, and Q2 2025, leadership changes and sales operational improvements were a key focus – including new leadership team additions, equity grants, and revamped sales processes to build a stronger pipeline and improve deal conversion rates. " " " "

In Q1 2026, leadership adjustments continue with the appointment of a new President for CES, reinforced proactive solutioning, and a continued focus on cultural and operational enhancements to drive growth, including enhanced AI and go-to-market initiatives. " " " "

Consistent focus on revamping leadership and go-to-market execution persists. New appointments and ongoing strategic initiatives in Q1 2026 build on prior efforts, highlighting a stable, forward-looking approach that underpins growth and transition, and reinforcing positive sentiment in leadership overhaul.

Extended Contract Durations and Revenue Recognition Delays

Q4 2025 emphasized longer-duration contracts in CES resulting in delayed revenue recognition, while Q3 2025 discussed variability in deal ramp-ups with large contracts taking longer to convert into revenue; Q2 2025 had indirect mentions via project rollout delays and timing issues with renewals. " " "

Q1 2026 noted that contract durations vary significantly, with short-term projects lasting 6–9 months and strategic deals spanning 15–25 months. This mix is delaying near-term revenue improvements in CES but is seen as beneficial in the long run as larger deals eventually boost performance. "

The discussion around extended contracts and delayed revenue recognition has been consistent. While Q2 had less explicit mention, Q3 and Q4 set the stage, and Q1 reaffirms that a strategic shift toward longer-term deals continues to impact short-term revenue yet is expected to drive future benefits. The sentiment is measured, acknowledging current delays while anticipating long-term gains.

Segment-Specific Challenges (GIS, Insurance, CES)

Q4 2025 broke out challenges by segment: GIS faced revenue declines and margin pressure, insurance showed modest growth with SaaS transition plans, and CES experienced organic revenue declines with a shift toward strategic longer-duration deals. " " " " Q3 2025 provided similar segmentation with further detail on revenue drops in GIS, steady insurance performance, and CES opportunities in AI-driven projects. " " Q2 2025 also discussed segment challenges with GIS declines and CES slowdown on custom applications. " "

In Q1 2026, segmentation remains a focus: CES organic revenue declined by 4.4% but achieved strong bookings growth, GIS organic revenue declined by 5.7% with deferred large deals improving trailing ratios, and Insurance grew organically by 3.6%, backed by software and volume increases. " " " "

The challenges by segment are consistent over time. While each period details similar issues – with CES dealing with project mix shifts, GIS challenged by seasonal deferrals, and Insurance maintaining steady growth – Q1 2026 refines these issues with updated performance metrics. The recurring nature of these challenges indicates that addressing segment-specific issues will be crucial for future overall performance.

High-Profile Strategic Wins and Deal Momentum

Q4 2025 highlighted marquee wins such as Carnival Cruise Line and robust bookings growth (with a book-to-bill ratio around 1.2), while Q3 2025 showcased significant renewals (e.g., $400 million renewal) and AI-driven engagements (e.g., Singapore General Hospital), and Q2 2025 focused on generative AI wins with major financial services clients. " " " " " "

Q1 2026 reported new high-profile wins, such as a long-term agreement with a top Spanish bank (Unigaha), a German automotive supplier deal, and a strategic partnership with Boomi, reinforcing continued strong deal momentum and strategic alignment with advanced technologies. "

There is steady and improving momentum in high-profile deals across periods. While prior quarters focused on strong renewals and early AI engagements, Q1 2026 demonstrates an evolution toward even more strategic, high-impact wins and partnerships. This sustained momentum is indicative of a growing market presence and is likely to have a significant long-term positive impact on the company’s future growth.