Cognizant Technology Solutions Corporation · NASDAQ:CTSH
Cognizant Technology Solutions — Q3 2023 Earnings Presentation
18 slides from Cognizant Technology Solutions's earnings presentation, Nov 1, 2023
Slide 1: Third Quarter 2023 Financial Results and Highlights
Exhibit 99.3 Third Quarter 2023 Financial Results and Highlights November 1, 2023 © 2023 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 are necessarily subject to risks, uncertainties and assump
Slide 3: Results Summary: Q3 2023
Results Summary: Q3 2023 Revenue GAAP and Adjusted Operating Margin1 Up 0.8% Y/Y as reported, and down 0.2% Y/Y in constant currency1 16.4% 16.4% 15.5% $4,897M 14.0% $4,857M Q3 '22 Q3 '23 Q3 '22 Q3 '23 Q3 '22 Q3 '23 GAAP Operating Margin Adjusted Operating Margin1 Diluted Earnings Per Share (EPS) Ca
Slide 4: Revenue, Operating Margin and EPS
Revenue, Operating Margin and EPS $ in millions except per share amounts $4,906 $4,857 $4,839 $4,886 $4,897 $4,826 $4,812 $1.08 $1.14 $1.17 $1.11 $1.10 $1.16 $1.01 1 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Revenue Adjusted Diluted EPS Revenue Growth, Operating Margin and EPS Q1 '22 Q2 '22 Q
Slide 5: Revenue Performance: Q3 2023
Revenue Performance: Q3 2023 Segments Geography $ in millions $ in millions Rest of World Communications, Media & (6.8%) Y/Y Technology (3.4%) Y/Y CC +8.2% Y/Y +7.3% Y/Y CC Europe $328 $847 Financial Services +9.7% Y/Y (3.0%) Y/Y +3.0% Y/Y CC $1,475 (4.0%) Y/Y CC $970 Products & Resources +1.9% Y/Y
Slide 6: Financial Services
Financial Services Revenue1 Q3 2023 Geography $ in millions $ in millions $1,528 $1,542 $1,521 Rest of World $1,481 $1,476 $1,463 $1,475 (11.1%) Y/Y (9.1%) Y/Y CC Europe $128 +5.5% Y/Y (0.9%) Y/Y CC $307 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 $1,040 Revenue growth1 North America Q1 '22 Q2
Slide 7: Health Sciences
Health Sciences Revenue Q3 2023 Geography $ in millions $ in millions Rest of World $1,426 $1,433 $1,440 $1,392 $1,408 $1,405 $1,405 (12.1%) Y/Y (8.8%) Y/Y CC $29 Europe +13.8% Y/Y +6.3% Y/Y CC $182 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 $1,194 Revenue growth Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1
Slide 8: Products & Resources
Products & Resources Revenue Q3 2023 Geography $ in millions $ in millions $1,177 $1,170 $1,148 $1,148 Rest of World $1,130 $1,140 (1.0%) Y/Y $1,118 +1.2% Y/Y CC $95 Europe +6.2% Y/Y +0.1% Y/Y CC $290 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 $785 Revenue growth Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1
Slide 9: Communications, Media & Technology
Communications, Media & Technology Revenue Q3 2023 Geography $ in millions $ in millions $847 $816 $806 Rest of World $776 $783 $784 $785 (3.8%) Y/Y +3.7% Y/Y CC $76 Europe +19.4% Y/Y $191 +11.5% Y/Y CC Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 $580 Revenue growth North America Q1 '22 Q2 '22
Slide 10: Trailing Twelve Month Bookings
Trailing Twelve Month Bookings1 $ in billions $26.4 $26.9 $25.6 $24.1 $23.1 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q3 2023 bookings increased 9% year-over-year Trailing twelve month bookings of $26.9 billion, which represented a book-to-bill of 1.4x 1 See “About Non-GAAP Financial Measures and Performan
Slide 11: Employee Metrics
Employee Metrics Headcount in thousands 341.3 349.4 355.3 351.5 345.6 346.6 340.4 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Additional Employee Metrics Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Trailing 12-Month Voluntary Attrition - Tech Services 29.8% 31.1% 29.2% 25.6% 23.1% 19.9% 16
Slide 12: Cash Flow, Balance Sheet & Capital Allocation
Cash Flow, Balance Sheet & Capital Allocation Annual Quarterly $ in millions $ in millions Share $771 $1,066 $315 $222 Repurchases $1,422 Acquisitions $970 $776 $367 $409 $315 $315 $367 $214 Dividends $509 $564 $584 $141 $139 $150 $148 $147 FY 2021 FY 2022 Trailing 12-Months Q3 '22 Q4 '22 Q1 '23 Q2
Slide 13: Fourth Quarter and Full-Year 2023 Guidance
Fourth Quarter and Full-Year 2023 Guidance1 FY 2023 Guidance Assumptions $19.3 to $19.4B Revenue Includes ~110 bps of inorganic contribution (0.7%)-flat Y/Y and Y/Y CC Adjusted Operating Margin2 ~14.7% Interest Income ~$115M Adjusted effective tax rate2 ~24% Share Count 506M Adjusted Diluted EPS2 $4
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: Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Guidance Full 2022 2022 2022 2022 2023 2023 2023 Year 2023(1) GAAP income from operations $ 724 $ 760 $ 798 $ 686 $ 702 $ 577 $ 686 NextG
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, 2023 include $15 million of employee separation costs, $55 million of facility exit costs and $2 million of third party and other costs. NextGen charges for the three months ended June
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, 2022 June 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Sep 30, 2023 Net cash provided by operating activities $ 306 $ 528 $ 1,032 $ 702 $ 729 $ 36 $ 828 Purchases
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