20 slides from Cognizant Technology Solutions's earnings presentation, Feb 6, 2024
Slide 1: Fourth Quarter 2023 Financial Results and Highlights
Exhibit 99.3 Fourth Quarter 2023 Financial Results and Highlights February 6, 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 are necessarily subject to risks, uncertainties and assump
Slide 3: Results Summary: Q4 2023
Results Summary: Q4 2023 Revenue GAAP and Adjusted Operating Margin1,2 Decline of 1.7% Y/Y as reported, and a decline of 2.4% Y/Y in constant currency1 15.2% 16.1% 14.2% 14.2% $4,839M $4,758M Q4 '22 Q4 '23 Q4 '22 Q4 '23 Q4 '22 Q4 '23 GAAP Operating Margin Adjusted Operating Margin1 Diluted Earnings
Slide 4: Results Summary: FY 2023
Results Summary: FY 2023 Revenue GAAP and Adjusted Operating Margin1,2 Decline of 0.4% Y/Y as reported, and a decline of 0.3% Y/Y in constant currency1 $19,428M $19,353M 15.3% 15.3% 15.1% 13.9% 2022 2023 2022 2023 2022 2023 GAAP Operating Margin Adjusted Operating Margin1 Diluted Earnings Per Share
Slide 5: 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 $4,758 $1.08 $1.14 $1.17 $1.11 $1.10 $1.16 $1.18 $1.01 1 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Revenue Adjusted Diluted EPS Q1 '22 Q2 '22 Q3 '22 Q4 '221 Q1 '23
Slide 6: Revenue Performance: Q4 2023
Revenue Performance: Q4 2023 Segments Geography $ in millions $ in millions Rest of World (9.9%) Y/Y Communications, Media & Technology (7.9%) Y/Y CC +2.6% Y/Y +2.0% Y/Y CC Europe $310 $804 Financial Services +1.3% Y/Y (5.8%) Y/Y (3.4%) Y/Y CC $1,395 (6.6%) Y/Y CC $918 Products & Resources +1.3% Y/Y
Slide 7: Revenue Performance: FY 2023
Revenue Performance: FY 2023 Segments Geography $ in millions $ in millions Rest of World (6.6%) Y/Y Communications, Media & Technology (2.6%) Y/Y CC +2.6% Y/Y +3.1% Y/Y CC Europe $1,296 $3,242 Financial Services +5.2% Y/Y (4.3%) Y/Y +3.9% Y/Y CC $5,809 (4.2%) Y/Y CC $3,794 Products & Resources +1.4
Slide 8: Financial Services
Financial Services Revenue1 Q4 2023 Geography $ in millions $ in millions Rest of World $1,528 $1,542 $1,521 (15.8%) Y/Y $1,481 $1,476 $1,463 $1,475 (15.1%) Y/Y CC $1,395 Europe $117 (4.3%) Y/Y (8.7%) Y/Y CC $287 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q4 '23 $991 Change in Revenue1 North A
Slide 9: Health Sciences
Health Sciences Revenue Q4 2023 Geography $ in millions $ in millions Rest of World (6.7%) Y/Y $1,426 $1,433 $1,440 $1,392 $1,408 $1,405 $1,405 $1,396 (4.5%) Y/Y CC $28 Europe +11.3% Y/Y +5.4% Y/Y CC $178 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q4 '23 $1,190 Change in Revenue Q1 '22 Q2 '22
Slide 10: Products & Resources
Products & Resources Revenue Q4 2023 Geography $ in millions $ in millions $1,177 $1,170 Rest of World $1,148 $1,148 $1,163 $1,140 (10.9%) Y/Y $1,130 $1,118 (10.3%) Y/Y CC $90 Europe (0.7%) Y/Y $277 (4.8%) Y/Y CC Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q4 '23 $796 Change in Revenue Q1 '22 Q
Slide 11: Communications, Media & Technology
Communications, Media & Technology Revenue Q4 2023 Geography $ in millions $ in millions $847 Rest of World $816 $806 $804 +1.4% Y/Y $776 $783 $784 $785 +7.7% Y/Y CC $75 Europe +5.4% Y/Y $176 +0.1% Y/Y CC Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q4 '23 $553 Change in Revenue North America Q1
Slide 12: Trailing Twelve Month Bookings
Trailing Twelve Month Bookings1 $ in billions $26.4 $26.9 $26.3 $25.6 $24.1 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Trailing twelve month bookings of $26.3 billion increased 9% year-over-year and represented a book-to-bill of 1.4x Q4 2023 bookings declined 6% year-over-year 1 See “About Non-GAAP Financia
Slide 13: Employee Metrics
Employee Metrics Headcount in thousands 341.3 349.4 355.3 351.5 345.6 346.6 347.7 340.4 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Additional Employee Metrics Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Trailing 12-Month Voluntary Attrition - Tech Services 29.8% 31.1% 29.2%
Slide 14: Cash Flow, Balance Sheet & Capital Allocation
Cash Flow, Balance Sheet & Capital Allocation Annual Quarterly $ in millions $ in millions Share $315 $222 Repurchases $1,422 $1,064 Acquisitions $409 $367 $315 $313 $367 $409 $214 Dividends $564 $591 $139 $150 $148 $147 $146 FY 2022 FY 2023 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '22 Q2 '22 Q3 '22 Q4
Slide 15: Full-year 2024 and Q1 2024 Guidance
Full-year 2024 and Q1 2024 Guidance1 2024 Guidance Assumptions $19.0 to $19.8B Revenue Includes up to ~100 bps of inorganic contribution (1.8%) to +2.2% Y/Y and (2.0%) to +2.0%Y/Y CC Adjusted Operating Margin2 15.3% to 15.5% Represents 20 to 40 basis points expansion Y/Y Net Interest Income2 ~$40M A
Slide 16: APPENDIX: About Non-GAAP Financial Measures and Performance Metrics
APPENDIX: About Non-GAAP Financial Measures and Performance Metrics
Slide 17: 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 18: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures (in millions, except per share amounts) Three Months Ended: Full Year: Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Dec 31, Dec 31, Guidance Full 2022 2022 2022 2022 2023 2023 2023 2023 2022 2023 Year 2024(1) GAAP income from operatio
Slide 19: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures Notes: (a) NextGen charges for the three months ended December 31, 2023 include $22 million of employee separation costs, $16 million of facility exit costs and $2 million of third party and other costs. NextGen charges for the year ended December 31, 2
Slide 20: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures Reconciliation of free cash flow Three Months Ended Full Year Mar 31, June 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, (in millions) 2022 2022 2022 2022 2023 2023 2023 2023 2022 2023 Net cash provided by operating activities $ 306 $ 528 $ 1,032