Cognizant Technology Solutions Corporation · NASDAQ:CTSH
Cognizant Technology Solutions — Q3 2024 Earnings Presentation
18 slides from Cognizant Technology Solutions's earnings presentation, Oct 30, 2024
Slide 1: Third Quarter 2024 Financial Results and Highlights
Exhibit 99.3 Third Quarter 2024 Financial Results and Highlights October 30, 2024 © 2024 Cognizant
Slide 2: Forward-looking statements
Forward-looking statements This earnings supplement includes statements that may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which is necessarily subject to risks, uncertainties and assumpt
Slide 3: Results Summary: Q3 2024
Results Summary: Q3 2024 Revenue GAAP and Adjusted Operating Margin1 Increase of 3.0% Y/Y as reported, and an increase of 2.7% Y/Y in constant currency1,2 15.5% 15.3% $5,044M 14.6% $4,897M 14.0% Q3 '23 Q3 '24 Q3 '23 Q3 '24 Q3 '23 Q3 '24 GAAP Operating Margin Adjusted Operating Margin1 Diluted Earnin
Slide 4: Revenue, Operating Margin and EPS
Revenue, Operating Margin and EPS $ in millions except per share amounts $5,044 $4,886 $4,897 $4,850 $4,812 $4,758 $4,760 $1.25 $1.16 $1.18 $1.17 $1.11 $1.10 $1.12 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 Revenue Adjusted Diluted EPS Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 Revenue Y
Slide 5: Revenue Performance: Q3 2024
Revenue Performance: Q3 2024 Segments Geography $ in millions $ in millions Financial Services Health Sciences Europe +0.7% Y/Y +7.8% Y/Y $1,514 $1,486 (0.3%) Y/Y +0.5% Y/Y CC +7.6% Y/Y CC $967 (1.9%) Y/Y CC North America1 +3.8% Y/Y and $3,735 Y/Y CC $342 Rest of World $816 +4.3% Y/Y Products $1,228
Slide 6: Financial Services
Financial Services Revenue Q3 2024 Geography $ in millions $ in millions $1,476 $1,475 $1,486 $1,463 $1,447 Europe $1,395 $1,385 (1.3%) Y/Y $303 (2.8%) Y/Y CC North America +0.8% Y/Y +0.9% Y/Y CC $1,048 Rest of World $135 +5.5% Y/Y +5.1% Y/Y CC Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 Change
Slide 7: Health Sciences
Health Sciences Revenue Q3 2024 Geography $ in millions $ in millions $1,514 $1,461 $1,433 $1,440 $1,405 $1,416 $1,396 Europe +4.4% Y/Y +3.0% Y/Y CC North America $190 +8.5% Y/Y and $1,295 Y/Y CC Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 $29 Rest of World Change in Revenue —% Y/Y Q1 '23 Q2 '2
Slide 8: Products & Resources
Products & Resources Revenue Q3 2024 Geography $ in millions $ in millions $1,228 $1,177 $1,170 $1,163 $1,133 $1,126 $1,118 Europe +7.2% Y/Y +5.5% Y/Y CC $311 North America +5.5% Y/Y and $828 Y/Y CC $89 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 Rest of World (6.3%) Y/Y (5.7%) Y/Y CC Change in
Slide 9: Communications, Media & Technology
Communications, Media & Technology Revenue Q3 2024 Geography $ in millions $ in millions $847 $826 $816 $816 $806 $804 $785 Europe (14.7%) Y/Y (16.2%) Y/Y CC $163 North America (2.8%) Y/Y and $564 Y/Y CC $89 Rest of World +17.1% Y/Y Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 +15.9% Y/Y CC Chan
Slide 10: Trailing Twelve Month Bookings
Trailing Twelve Month Bookings1 $ in billions $26.9 $26.3 $25.9 $26.2 $26.2 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 Trailing twelve month bookings of $26.2 billion represented a book-to-bill of 1.3x Q3 2024 bookings were flat year-over-year 1 See “About Non-GAAP Financial Measures and Performance Metrics
Slide 11: Employee Metrics
Employee Metrics Headcount in thousands 351.5 345.6 346.6 347.7 344.4 336.3 340.1 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 Additional Employee Metrics Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 Trailing 12-Month Voluntary Attrition - Tech Services 23.1% 19.9% 16.2% 13.8% 13.1% 13.6% 14
Slide 12: Cash Flow, Balance Sheet & Capital Allocation
Cash Flow, Balance Sheet & Capital Allocation Annual Quarterly $ in millions $764 $ in millions $242 Share $1,422 $1,064 Repurchases $1,615 $1,194 Acquisitions $133 $367 $409 $315 $313 $421 $76 Dividends $564 $591 $596 $147 $146 $151 $150 $149 FY 2022 FY 2023 Trailing 12-Months Q3 '23 Q4 '23 Q1 '24
Slide 13: Full-year 2024 and Q4 2024 Guidance
Full-year 2024 and Q4 2024 Guidance1 2024 Guidance Assumptions $19.7 to $19.8B Revenue Includes ~200 bps of inorganic contribution 1.6% to 2.1% Y/Y or 1.4% to 1.9% Y/Y CC Adjusted Operating Margin2 ~15.1% Net Interest Income2 ~$65M Adjusted effective tax rate2 24% to 25% Share Count 497M Adjusted Di
Slide 14: APPENDIX: About Non-GAAP Financial Measures and Performance Metrics
APPENDIX: About Non-GAAP Financial Measures and Performance Metrics
Slide 15: About Non-GAAP Financial Measures and Performance Metrics
About Non-GAAP Financial Measures and Performance Metrics Non-GAAP Financial Measures To supplement our financial results presented in accordance with GAAP, this earnings supplement includes references to the following measures defined by the Securities and Exchange Commission as non-GAAP financial
Slide 16: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures (in millions, except per share amounts) Three Months Ended: Guidance Full Year Mar 31, 2023 Jun 30, 2023 Sep 30, 2023 Dec 31, 2023 Mar 31, 2024 Jun 30, 2024 Sep 30, 2024 2024(1) GAAP income from operations $ 702 $ 577 $ 686 $ 724 $ 695 $ 708 $ 738 (a) N
Slide 17: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures Notes: (a) NextGen charges for the three months ended September 30, 2024 include $29 million of employee separation costs and $4 million of facility exit costs. In 2024, we expect to incur $105 million of expenses in connection with the NextGen program,
Slide 18: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures Reconciliation of free cash flow Three Months Ended (in millions) Mar 31, 2023 Jun 30, 2023 Sep 30, 2023 Dec 31, 2023 Mar 31, 2024 Jun 30, 2024 Sep 30, 2024 Net cash provided by operating activities $ 729 $ 36 $ 828 $ 737 $ 95 $ 262 $ 847 Purchases of p
Cognizant Technology Solutions — Q3 2024 Earnings Presentation on 6ix