COGNIZANT TECHNOLOGY SOLUTIONS CORPCTSH

COGNIZANT TECHNOLOGY SOLUTIONS CORP Leases Disclosure

10-KFiled Feb 12, 20262 min read
The following table provides information on the components of our operating and finance leases included in our consolidated statement of financial position as of December 31:
LeasesLocation on Statement of Financial Position20252024
Assets(in millions)
ROU operating lease assetsOperating lease assets, net$573 $552 
ROU finance lease assetsProperty and equipment, net10 14 
Total $583 $566 
Liabilities
Current
Operating leaseOperating lease liabilities$153 $152 
Finance leaseAccrued expenses and other current liabilities10 8 
Noncurrent
Operating leaseOperating lease liabilities, noncurrent423 420 
Finance leaseOther noncurrent liabilities12 15 
Total$598 $595 
For the years ended December 31, 2025, 2024 and 2023, our operating lease costs were $197 million, $216 million and $304 million, respectively, including variable lease costs of $19 million, $23 million and $21 million, respectively. Our short-term lease rental expense was $16 million, $11 million and $15 million for the years ended December 31, 2025, 2024 and 2023, respectively. Lease interest expense related to our finance leases for each of the years ended December 31, 2025, 2024 and 2023 was immaterial.
The following table provides information on the weighted average remaining lease term and weighted average discount rate for our operating leases as of December 31:
Operating Lease Term and Discount Rate20252024
Weighted average remaining lease term
4.9 years
5.3 years
Weighted average discount rate5.7 %5.5 %
The following table provides supplemental cash flow and non-cash information related to our operating leases for the years ended December 31:
(in millions)202520242023
Cash paid for amounts included in the measurement of operating lease liabilities$192 $251 $240 
ROU assets obtained in exchange for operating lease liabilities160 123 86 
Reduction of ROU assets and lease liabilities as a result of our NextGen program
— (62)(110)
Cash paid for amounts included in the measurement of finance lease liabilities and ROU assets obtained in exchange for finance lease liabilities were each immaterial for each of the years ended December 31, 2025, 2024 and 2023.
The following table provides the schedule of maturities of our operating lease liabilities and a reconciliation of the undiscounted cash flows to the operating lease liabilities recognized in the statement of financial position as of December 31:
(in millions)2025
2026
$182 
2027
150 
2028
120 
2029
83 
2030
54 
Thereafter84 
Total operating lease payments673 
Interest(97)
Total operating lease liabilities$576 
As of December 31, 2025, additional obligations related to operating leases whose lease term had yet to commence were immaterial.

Historical Timeline

Fiscal YearFiled
2025Feb 12, 2026Showing above
2024Feb 12, 2025
2023Feb 14, 2024
2022Feb 15, 2023
2021Feb 16, 2022
2020Feb 12, 2021
2019Feb 14, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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