Cognizant Technology Solutions Corp. Reports Strong Q3 Results

TEANECK, N.J. – Cognizant Technology Solutions Corp. (NASDAQ: CTSH) reported third-quarter results that exceeded analyst expectations and provided an optimistic outlook for the full year, with shares rising 1.48% in after-hours trading.

The IT services company posted adjusted earnings per share of $1.25, surpassing the consensus estimate of $1.15. Revenue grew 3% YoY to $5.04 billion, also exceeding expectations of $4.98 billion.

Cognizant's performance was bolstered by strong growth in its Health Sciences segment, which saw revenues increase 7.8% YoY. The Financial Services segment returned to growth as well, with revenues up 0.7% YoY.

> “Revenue growth in the third quarter was at the high end of our guidance range, driven by another quarter of strong performance in our largest segments, Health Sciences and Financial Services,” said CEO Ravi Kumar S.

Looking ahead, Cognizant raised its full-year 2024 earnings guidance to $4.63-$4.67 per share, above the analyst consensus of $4.62. The company also narrowed its full-year revenue outlook to $19.7-$19.8 billion, compared to the previous forecast of $19.6-$19.8 billion.

For the fourth quarter, Cognizant expects revenue between $5.0-$5.1 billion.

The company's book-to-bill ratio for the trailing 12 months stood at 1.3x, indicating strong future revenue potential. Cognizant signed six deals with total contract values exceeding $100 million each during the quarter.

> “Our focus on operating cost discipline and savings generated through our strong execution under the NextGen program have allowed us to expand year-to-date Adjusted Operating Margin by approximately 40 basis points,” said CFO Jatin Dalal.

Cognizant ended the quarter with 340,100 employees, up 3,800 from the previous quarter but down 6,500 YoY. The company repurchased 3.1 million shares for $228 million during Q3.

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