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Cognizant
🇺🇸 NASDAQ:CTSH
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•
Dec 31, 2023

Cognizant Q4 2023 Earnings Report

Cognizant's Q4 2023 results reflected revenue within the guided range, maintained commercial momentum, and ongoing operational rigor.

Key Takeaways

Cognizant's Q4 2023 revenue was $4.758 billion, a decrease of 1.7% year-over-year. The company's adjusted operating margin improved sequentially to 16.1%. Full-year bookings grew 9% year-over-year to $26.3 billion.

Q4 revenue was within the guided range.

Full-year bookings increased by 9% year-over-year.

Adjusted operating margin improved sequentially to 16.1%.

The company continues to invest in generative AI, cloud, data modernization, digital engineering, and IoT.

Total Revenue
$4.76B
Previous year: $4.84B
-1.7%
EPS
$1.18
Previous year: $1.01
+16.8%
Gross Profit
$1.55B
Previous year: $1.69B
-7.9%
Cash and Equivalents
$2.62B
Previous year: $2.19B
+19.6%
Free Cash Flow
$659M
Previous year: $612M
+7.7%
Total Assets
$18.5B
Previous year: $17.9B
+3.5%

Cognizant

Cognizant

Cognizant Revenue by Segment

Cognizant Revenue by Geographic Location

Forward Guidance

Cognizant anticipates Q1 2024 revenue to be $4.68 - $4.76 billion, a decline of 2.7% to 1.2%, or a decline of 3.0% to 1.5% in constant currency. Full-year 2024 revenue is expected to be $19.0 - $19.8 billion, a decline of 1.8% to growth of 2.2% as reported, or a decline of 2.0% to growth of 2.0% in constant currency. Full-year 2024 Adjusted Operating Margin is expected to be in the range of 15.3% to 15.5%, and Adjusted EPS is expected to be in the range of $4.50 to $4.68.

Positive Outlook

  • Full-year 2024 Adjusted Operating Margin is expected to be in the range of 15.3% to 15.5%, or 20 to 40 basis points of expansion.
  • Full-year 2024 Adjusted EPS is expected to be in the range of $4.50 to $4.68.
  • The company increased the cash dividend 3% to $0.30 per share for Q1 2024.
  • Cognizant continues to invest in generative AI, cloud, data modernization, digital engineering and IoT.
  • The company's NextGen cost optimization program has enabled it to exceed its margin commitment and continue to invest in its strategy to improve future revenue growth.

Challenges Ahead

  • First quarter revenue is expected to be $4.68 - $4.76 billion, a decline of 2.7% to 1.2%, or a decline of 3.0% to 1.5% in constant currency.
  • Full-year 2024 revenue is expected to be $19.0 - $19.8 billion, a decline of 1.8% to growth of 2.2% as reported, or a decline of 2.0% to growth of 2.0% in constant currency.
  • Bookings in the fourth quarter declined 6% year-over-year.
  • Ongoing macro-economic pressures may impact client transformation initiatives.
  • The company expects to incur $70 million of expenses in connection with the NextGen program in 2024.

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

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