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Dec 31, 2024
Cognizant Q4 2024 Earnings Report
Cognizant reported strong fourth quarter and full-year 2024 financial results, with revenue growth at the high end of guidance and increased operating margins.
Key Takeaways
Cognizant delivered a strong performance in Q4 2024, with revenue reaching $5.082 billion, a 6.8% year-over-year increase. The company also reported diluted EPS of $1.10 and non-GAAP diluted EPS of $1.21, alongside significant full-year achievements including increased operating margin and strong bookings growth.
Fourth quarter revenue of $5.1 billion increased 6.8% year-over-year or 6.7% in constant currency, at the high end of guidance range.
Full-year operating margin of 14.7% increased 80 basis points year-over-year; Adjusted Operating Margin of 15.3% increased 20 basis points year-over-year.
Trailing 12-month bookings of $27.1 billion, up 3% year-over-year, driven by 11% year-over-year fourth quarter bookings growth.
$1.2 billion returned to shareholders through share repurchases and dividends in 2024.
Cognizant
Cognizant
Cognizant Revenue by Segment
Cognizant Revenue by Geographic Location
Revenue by Segment
Health Sciences Revenue
CapyFin.comFinancial Services Revenue
CapyFin.comProducts and Resources Revenue
CapyFin.comCommunications, Media and Technology Revenue
CapyFin.comRevenue by Geographic Location
North America Revenue
CapyFin.comUnited Kingdom Revenue
CapyFin.comContinental Europe Revenue
CapyFin.comEurope - Total Revenue
CapyFin.comRest of World Revenue
CapyFin.com Forward Guidance
Cognizant expects continued growth in 2025, with revenue growth projected between 3.5% and 6.0% in constant currency and an expansion in Adjusted Operating Margin.
Positive Outlook
- First quarter revenue is expected to be $5.0 - $5.1 billion, growth of 5.6% to 7.1%, or 6.5% to 8.0% in constant currency.
- Full-year 2025 revenue is expected to be $20.3 - $20.8 billion, growth of 2.6% to 5.1%, or 3.5% to 6.0% in constant currency.
- Full-year 2025 Adjusted Operating Margin is expected to be from 15.5% to 15.7%, or 20 to 40 basis points of expansion.
- Full-year 2025 Adjusted Diluted EPS is expected to be in the range of $4.90 to $5.06.
- The company expects improved cost structure to sustain strategic investments for profitable growth.
Challenges Ahead
- No specific negative forward guidance points were explicitly stated in the provided text.
- The company notes that a full reconciliation of Adjusted Operating Margin and Adjusted Diluted EPS guidance to GAAP measures cannot be provided without unreasonable efforts due to the unpredictability of unusual items.
- Foreign currency exchange gains and losses are subject to high variability and low visibility, making them difficult to predict.
- The company does not update bookings for subsequent terminations, reductions or foreign currency exchange rate fluctuations, which could impact future revenue conversion.
- The majority of contracts are terminable by the client on short notice often without penalty, and some without notice, which introduces an element of risk to future revenue.
Revenue & Expenses
Visualization of income flow from segment revenue to net income