How much of the margin improvement was driven by one-time items?

The $62 million gain on the sale of an office complex in India added about 120 basis points to GAAP operating margin (16.7% vs. 14.6% a year earlier). Cognizant excludes this gain from Adjusted Operating Margin, which was 15.5%, up 40 basis points year-over-year. Adjusted figures therefore better reflect underlying operating performance.

How much of the revenue growth is organic?

Reported revenue growth of 7.5% included roughly 400 basis points from recently completed acquisitions, primarily Belcan and Thirdera. Excluding that contribution, underlying growth was approximately 3.5%–4% on a reported basis, though constant currency growth of 8.2% includes the same acquisition effect.

Is the bookings trend a concern?

Trailing-twelve-month bookings of $26.7 billion grew 3%, and book-to-bill was about 1.3x, which supports future revenue. However, Q1 2025 bookings alone fell 7% year-over-year, although the quarter included four large deals. Investors will likely watch whether bookings momentum recovers in coming quarters.

Did Cognizant change its 2025 outlook?

No. Full-year 2025 guidance was reaffirmed: revenue of $20.5–$21.0 billion (3.5%–6.0% constant currency growth), Adjusted Operating Margin of 15.5%–15.7%, and Adjusted Diluted EPS of $4.98–$5.14. The company also expects a pre-tax charge of about $0.13 per diluted share related to the full-year adjustments tied to the property gain.

How is Cognizant returning capital to shareholders?

In Q1 2025 the company repurchased 2.3 million shares for $190 million under its program and paid dividends of $155 million in cash flow terms. It declared a quarterly dividend of $0.31 per share, payable May 28, 2025, and plans to return about $1.7 billion in 2025 while retaining flexibility to invest for growth.

CTSH 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed April 30, 2025. Cited figures are marked; the original filing is the authoritative source.

Cognizant (Nasdaq: CTSH) reported first quarter 2025 results on April 30, 2025, with revenue of $5.115 billion^a, up 7.5% year-over-year as reported and 8.2% in constant currency, ahead of the high end of its guidance range.

GAAP operating margin rose to 16.7% (up 210 basis points), but this was flattered by a $62 million^b gain on the sale of an office complex in India, which contributed about 120 basis points. Excluding that gain and NextGen-related items, Adjusted Operating Margin was 15.5%, up 40 basis points year-over-year, and Adjusted Diluted EPS was $1.23, up 10%. GAAP diluted EPS was $1.34, up 22%.

Acquisitions (Belcan and Thirdera) contributed about 400 basis points to revenue growth, meaning organic growth was considerably lower than the headline figure. Demand indicators were mixed. Trailing-twelve-month bookings rose 3% to $26.7 billion^c (book-to-bill about 1.3x), but Q1 bookings alone fell 7% year-over-year.

Management left full-year 2025 guidance unchanged: constant currency revenue growth of 3.5% to 6.0%, Adjusted Operating Margin of 15.5% to 15.7%, and Adjusted Diluted EPS of $4.98 to $5.14^d. Second-quarter revenue is guided to $5.14 to $5.21 billion. Cognizant returned $364 million to shareholders in the quarter (including $209 million of buybacks in cash flow terms and $155 million of dividends) and plans about $1.7 billion of capital returns in 2025.

Cash generation was strong, with operating cash flow of $400 million and free cash flow of $393 million, though free cash flow includes the $70 million property sale proceeds. Net cash improved to $1.39 billion, and voluntary tech services attrition was 15.8% on a trailing-twelve-month basis. Investors should weigh the strong margin and cash headlines against the one-time nature of the property gain, the Q1 bookings decline, and the reliance on acquisitions for growth.

02—Key points

Key Highlights

Revenue of $5.115 billion grew 7.5% year-over-year (8.2% constant currency), above the high end of guidance; acquisitions contributed roughly 400 basis points of that growth.
GAAP operating margin of 16.7% and GAAP diluted EPS of $1.34 were inflated by a $62 million gain on sale of an India office complex; Adjusted Operating Margin was 15.5% (+40 bps) and Adjusted Diluted EPS was $1.23 (+10%).
Trailing-twelve-month bookings rose 3% to $26.7 billion (book-to-bill ~1.3x), but Q1 2025 standalone bookings declined 7% year-over-year.
Full-year 2025 guidance was unchanged: constant currency revenue growth of 3.5%–6.0%, Adjusted Operating Margin of 15.5%–15.7%, and Adjusted Diluted EPS of $4.98–$5.14.
Q2 2025 revenue guidance of $5.14–$5.21 billion implies 5.9%–7.4% reported growth (5.0%–6.5% constant currency).
Operating cash flow of $400 million and free cash flow of $393 million; net cash rose to $1.392 billion from $1.335 billion at year-end 2024.
Capital returns of $364 million in Q1 (buybacks plus dividends), with about $1.7 billion planned for 2025 and $3.0 billion remaining under the repurchase authorization.

03—Questions

Frequently Asked Questions

How much of the margin improvement was driven by one-time items?
The $62 million gain on the sale of an office complex in India added about 120 basis points to GAAP operating margin (16.7% vs. 14.6% a year earlier). Cognizant excludes this gain from Adjusted Operating Margin, which was 15.5%, up 40 basis points year-over-year. Adjusted figures therefore better reflect underlying operating performance.
How much of the revenue growth is organic?
Reported revenue growth of 7.5% included roughly 400 basis points from recently completed acquisitions, primarily Belcan and Thirdera. Excluding that contribution, underlying growth was approximately 3.5%–4% on a reported basis, though constant currency growth of 8.2% includes the same acquisition effect.
Is the bookings trend a concern?
Trailing-twelve-month bookings of $26.7 billion grew 3%, and book-to-bill was about 1.3x, which supports future revenue. However, Q1 2025 bookings alone fell 7% year-over-year, although the quarter included four large deals. Investors will likely watch whether bookings momentum recovers in coming quarters.
Did Cognizant change its 2025 outlook?
No. Full-year 2025 guidance was reaffirmed: revenue of $20.5–$21.0 billion (3.5%–6.0% constant currency growth), Adjusted Operating Margin of 15.5%–15.7%, and Adjusted Diluted EPS of $4.98–$5.14. The company also expects a pre-tax charge of about $0.13 per diluted share related to the full-year adjustments tied to the property gain.
How is Cognizant returning capital to shareholders?
In Q1 2025 the company repurchased 2.3 million shares for $190 million under its program and paid dividends of $155 million in cash flow terms. It declared a quarterly dividend of $0.31 per share, payable May 28, 2025, and plans to return about $1.7 billion in 2025 while retaining flexibility to invest for growth.

04—Continue

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