Cognizant Technology Solutions Corporation · NASDAQ:CTSH
Cognizant Technology Solutions — Q1 2024 Earnings Presentation
18 slides from Cognizant Technology Solutions's earnings presentation, May 1, 2024
Slide 1: First Quarter 2024 Financial Results and Highlights
Exhibit 99.3 First Quarter 2024 Financial Results and Highlights May 1, 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: Q1 2024
Results Summary: Q1 2024 Revenue GAAP and Adjusted Operating Margin1 Decline of 1.1% Y/Y as reported, and a decline of 1.2% Y/Y in constant currency1 15.1% 14.6% 14.6% 14.6% $4,812M $4,760M Q1 '23 Q1 '24 Q1 '23 Q1 '24 Q1 '23 Q1 '24 GAAP Operating Margin Adjusted Operating Margin1 Diluted Earnings Pe
Slide 4: Revenue, Operating Margin and EPS
Revenue, Operating Margin and EPS $ in millions except per share amounts $4,886 $4,897 $4,812 $4,758 $4,760 $1.16 $1.18 $1.11 $1.10 $1.12 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Revenue Adjusted Diluted EPS Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Revenue Y/Y (0.3%) (0.4%) 0.8% (1.7%) (1.1%) Revenue Y/Y CC 1.5
Slide 5: Revenue Performance: Q1 2024
Revenue Performance: Q1 2024 Segments Geography $ in millions $ in millions Rest of World (8.5%) Y/Y Communications, Media & Technology (3.7%) Y/Y CC +5.2% Y/Y +5.7% Y/Y CC Europe $300 $826 Financial Services 0.0% Y/Y (6.2%) Y/Y (2.4%) Y/Y CC $1,385 (6.5%) Y/Y CC $939 Products & Resources +1.3% Y/Y
Slide 6: Financial Services
Financial Services Revenue Q1 2024 Geography $ in millions $ in millions Rest of World (11.6%) Y/Y $1,476 $1,463 $1,475 (9.3%) Y/Y CC $1,395 $1,385 Europe $114 (6.4%) Y/Y (8.7%) Y/Y CC $294 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 $977 Change in Revenue North America Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 (5.
Slide 7: Health Sciences
Health Sciences Revenue Q1 2024 Geography $ in millions $ in millions Rest of World +16.7% Y/Y $1,433 $1,440 $1,405 $1,416 +24.8% Y/Y CC $1,396 $28 Europe +11.2% Y/Y +8.5% Y/Y CC $179 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 $1,209 Change in Revenue Q1 '23 Q2 '23 Q3'23 Q4 '23 Q1 '24 North America Y/Y 2.9%
Slide 8: Products & Resources
Products & Resources Revenue Q1 2024 Geography $ in millions $ in millions $1,177 $1,170 Rest of World $1,163 $1,133 (11.6%) Y/Y $1,118 (9.5%) Y/Y CC $84 Europe (2.1%) Y/Y $276 (4.3%) Y/Y CC Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 $773 Change in Revenue Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 North America Y/
Slide 9: Communications, Media & Technology
Communications, Media & Technology Revenue Q1 2024 Geography $ in millions $ in millions $847 $826 Rest of World $806 $804 (7.5%) Y/Y $785 +3.8% Y/Y CC $74 Europe +4.4% Y/Y +1.6% Y/Y CC $190 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 $562 Change in Revenue North America Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 +7
Slide 10: Trailing Twelve Month Bookings
Trailing Twelve Month Bookings1 $ in billions $26.4 $26.9 $26.3 $25.9 $25.6 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Trailing twelve month bookings of $25.9 billion increased 1% year-over-year and represented a book-to-bill of 1.3x Q1 2024 bookings declined 6% year-over-year 1 See “About Non-GAAP Financia
Slide 11: Employee Metrics
Employee Metrics Headcount in thousands 351.5 345.6 346.6 347.7 344.4 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Additional Employee Metrics Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Trailing 12-Month Voluntary Attrition - Tech Services 23.1% 19.9% 16.2% 13.8% 13.1% Utilization Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 1
Slide 12: Cash Flow, Balance Sheet & Capital Allocation
Cash Flow, Balance Sheet & Capital Allocation Annual Quarterly $ in millions $ in millions Share $1,422 $222 $133 Repurchases $1,064 $975 Acquisitions $409 $421 $367 $409 $421 $315 $313 $214 Dividends $564 $591 $592 $150 $148 $147 $146 $151 FY 2022 FY 2023 Trailing 12-Months Q1 '23 Q2 '23 Q3 '23 Q4
Slide 13: Full-year 2024 and Q2 2024 Guidance
Full-year 2024 and Q2 2024 Guidance1 2024 Guidance Assumptions $18.9 to $19.7B Revenue Includes up to ~100 bps of inorganic contribution (2.2%) to +1.8% 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 ~$60M A
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 2024(1) GAAP income from operations $ 702 $ 577 $ 686 $ 724 $ 695 (a) NextGen charges — 117 72 40 23 Adjusted
Slide 17: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures Notes: (a) NextGen charges for the three months ended March 31, 2024 include $8 million of employee separation costs, $14 million of facility exit costs and $1 million of third party and other costs. In 2024, we expect to incur $70 million of expenses i
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 Net cash provided by operating activities $ 729 $ 36 $ 828 $ 737 $ 95 Purchases of property and equipment (98) (68) (73) (
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