10-KPeriod: FY2024

COGNIZANT TECHNOLOGY SOLUTIONS CORP Annual Report, Year Ended Dec 31, 2024

Filed February 12, 2025For Securities:CTSH

Summary

Cognizant Technology Solutions Corp. (CTSH) reported steady revenue growth of 2.0% year-over-year for the fiscal year ended December 31, 2024, reaching $19.7 billion. This growth was driven by strong performance in the Health Sciences segment and the impact of strategic acquisitions, notably Belcan and Thirdera. Despite some headwinds in Financial Services and Products and Resources segments due to macroeconomic uncertainty, the company's focus on AI-enhanced services and digital transformation positions it to capitalize on evolving client needs. The company completed its NextGen program aimed at simplifying operations and optimizing costs, which contributed to an improved operating margin of 14.7% (15.3% adjusted). Cognizant continues to invest in scaling its AI capabilities and upskilling its workforce, with over 168,000 employees receiving generative AI training. The company also maintained its commitment to shareholder returns through quarterly dividends and a share repurchase program, demonstrating a balanced approach to growth and capital allocation.

Financial Highlights

50 data points
Beta

Revenue

$19.74B

Net Income

$2.24B

11.3% Net Margin

EPS (Diluted)

$4.51

Total Assets

$19.97B

Cash & Equivalents

$2.23B

Free Cash Flow

$1.83B

Financial Statements
Beta
Revenue$19.74B
SG&A Expenses$3.22B
Operating Income$2.89B
Net Income$2.24B
EPS (Basic)$4.52
EPS (Diluted)$4.51
Shares Outstanding (Basic)496.00M
Shares Outstanding (Diluted)497.00M

Key Highlights

  • 1Revenue increased by 2.0% to $19.7 billion for the fiscal year 2024, with acquisitions contributing 200 basis points to this growth.
  • 2The Health Sciences segment showed strong performance with a 4.5% revenue increase, while Financial Services experienced a slight decline.
  • 3Cognizant completed its NextGen program, which helped simplify operations and resulted in improved operating margins (14.7% GAAP, 15.3% Adjusted).
  • 4The company made significant investments in AI capabilities, with over 168,000 employees receiving generative AI training.
  • 5Voluntary attrition in Tech Services was 15.9% in 2024, up from 13.8% in 2023, indicating a slight increase in employee turnover.
  • 6Cognizant continued to return capital to shareholders through $0.30 quarterly dividends and a share repurchase program, with $1.237 billion remaining authorized as of December 31, 2024.
  • 7The company acquired Belcan and Thirdera in 2024, expanding its capabilities in engineering R&D and ServiceNow solutions, respectively.

Frequently Asked Questions

Revenue growth in 2024 was primarily driven by strong performance in the Health Sciences segment and the contributions from recent acquisitions, Belcan and Thirdera. The company's focus on digital and AI-enhanced services also supported revenue expansion across various client needs.

Cognizant completed its NextGen program aimed at simplifying operations and optimizing costs. This program generated net savings which contributed to an improvement in both GAAP operating margin (to 14.7%) and Adjusted Operating Margin (to 15.3%) for fiscal year 2024. The program resulted in $134 million in charges during 2024.

Cognizant is heavily investing in its AI capabilities, including Generative AI (GenAI), to support client transformation and internal operations. This includes significant investments in developing and implementing AI solutions and a strong focus on upskilling its workforce, with over 168,000 employees receiving generative AI training in 2024.

Cognizant reported a voluntary attrition rate of 15.9% for Tech Services in 2024, an increase from 13.8% in 2023. The company focuses on employee engagement, continuous upskilling through its learning ecosystem, and career development to retain talent and mitigate attrition risks.