Cognizant Reports Third Quarter 2024 Financial Results

Cognizant Reports Third Quarter 2024 Financial Results

Teaneck, N.J., Oct. 30, 2024 – Cognizant (Nasdaq: CTSH), a leading global professional services company, released its financial results for the third quarter of 2024.

Key Financial Metrics

Cognizant achieved $5.0 billion in revenue, marking a 3.0% year-over-year increase, aligning with the high end of the guidance and consensus estimates. The company maintained a stable operating margin of 14.6%, reporting an improvement of 60 basis points year-over-year, demonstrating effective cost management and operating discipline.

Revenue Performance by Segment

Health Sciences led the revenue growth with a significant 7.8% increase year-over-year, while the Financial Services segment returned to growth with a modest 0.7% rise. This performance highlights the ongoing demand in the Health Sciences sector and a recovery trend in Financial Services.

Key Developments and Operational Highlights

• Six deals signed, each over $100 million, totaling nineteen year-to-date, surpassing full-year 2023 figures.
• Acquisition of Belcan, enhancing capabilities in Engineering Research & Development and expanding market presence.
• Launch of the Cognizant Neuro® Cybersecurity and Multi-Agent Orchestration platforms.
• New strategic partnerships with NVIDIA, ServiceNow, AWS, and Palo Alto Networks to enhance AI, data, and cloud capabilities.

Comments from Company Officers

Ravi Kumar S, CEO, emphasized strong segment performances and strategic investments in AI-driven platforms, while CFO Jatin Dalal noted sequential and year-over-year revenue growth, emphasizing operating cost discipline under the NextGen program. Dalal expects stronger organic revenue growth in the fourth quarter compared to the prior year period, boosted by large deal momentum.

Dividends and Share Repurchase

• Repurchased 3.1 million shares for $228 million; $1.4 billion remains authorized for repurchases.
• Declared a $0.30 per share quarterly cash dividend, payable on November 27, 2024.

Forward Guidance

Cognizant expects fourth-quarter revenue between $5.0 billion and $5.1 billion, reflecting a 5.1% to 7.1% year-over-year growth. The full-year 2024 revenue guidance remains at $19.7 billion to $19.8 billion, with an anticipated Adjusted Operating Margin of approximately 15.1%.

Stock Price Movement

Following the earnings announcement, Cognizant's stock experienced a post-event decline of approximately 1.5%.

Cognizant continues to leverage its strategic acquisitions and partnerships to drive growth and innovation, enhancing its market position through an AI-led approach that meets evolving client needs in various sectors.