Cognizant Technology Solutions Corporation · NASDAQ:CTSH
Cognizant Technology Solutions — Q4 2022 Earnings Presentation
21 slides from Cognizant Technology Solutions's earnings presentation, Feb 2, 2023
Slide 1: Fourth Quarter 2022 Financial Results and Highlights
Exhibit 99.3 Fourth Quarter 2022 Financial Results and Highlights February 2, 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 assum
Slide 3: Results Summary: Q4 2022
Results Summary: Q4 2022 Revenue GAAP and Adjusted Operating Margin1 Up 1.3% Y/Y as reported, or 4.1% Y/Y in constant currency1 Margin for 2022 included (120 bps) from the impairment of capitalized costs related to a customer contract $4,839M $4,777M 15.3% 15.3% 14.2% 14.2% Q4 '21 Q4 '22 Q4 '21 Q4 '
Slide 4: Results Summary: FY 2022
Results Summary: FY 2022 Revenue GAAP and Adjusted Operating Margin1 Up 5.0% Y/Y as reported, or 7.5% Y/Y in constant currency1 Margin for 2022 included (30 bps) from the impairment of capitalized costs related to a customer contract $19,428M 15.3% 15.3% 15.4% 15.3% $18,507M 2021 2022 2021 2022 2021
Slide 5: Revenue, Operating Margin and EPS
Revenue, Operating Margin and EPS $ in millions except per share amounts $4,906 $4,857 $4,839 $4,777 $4,826 $4,744 $4,585 $4,401 $4,225 $4,243 $4,184 $4,000 $1.10 $1.08 $1.14 $1.17 $0.96 $0.97 $0.97 $0.99 $1.06 $1.01 $0.82 $0.67 1 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22
Slide 6: Revenue Performance: Q4 2022
Revenue Performance: Q4 2022 Segments Geography $ in millions $ in millions Rest of World Communications, Media & (0.6%) Y/Y Technology +7.2% Y/Y CC +5.4% Y/Y +9.3% Y/Y CC Europe1 $344 $784 Financial Services1 (3.2%) Y/Y (4.3%) Y/Y +7.7% Y/Y CC (1.4%) Y/Y CC $1,481 $906 Products & Resources +2.9% Y/
Slide 7: Revenue Performance: FY 2022
Revenue Performance: FY 2022 Segments Geography $ in millions $ in millions Rest of World Communications, Media & +6.0% Y/Y Technology +12.1% Y/Y CC +11.1% Y/Y +14.6% Y/Y CC Europe1 $1,388 $3,159 Financial Services1 +1.2% Y/Y +0.3% Y/Y +11.4% Y/Y CC +2.8% Y/Y CC $6,072 $3,605 Products & Resources +6
Slide 8: Financial Services
Financial Services Revenue1 Q4 2022 Geography $ in millions $ in millions $1,544 $1,547 $1,542 Rest of World $1,528 $1,521 $1,502 (6.1%) Y/Y $1,469 $1,481 $1,451 $1,458 +0.4% Y/Y CC $1,396 $1,305 Europe1 $139 (9.6%) Y/Y (0.3%) Y/Y CC $300 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '2
Slide 9: Health Sciences
Health Sciences Revenue Q4 2022 Geography $ in millions $ in millions $1,426 Rest of World $1,392 $1,408 $1,405 $1,354 $1,370 (9.1%) Y/Y $1,325 $30 +1.9% Y/Y CC $1,270 $1,288 $1,231 Europe $1,194 $1,157 —% Y/Y +8.9% Y/Y CC $160 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22 Q3
Slide 10: Products & Resources
Products & Resources Revenue Q4 2022 Geography $ in millions $ in millions $1,130 $1,140 $1,148 $1,148 $1,107 $1,116 Rest of World $1,055 +17.4% Y/Y $998 +23.9% Y/Y CC $954 $948 $927 $101 $867 Europe (1.4%) Y/Y +11.4% Y/Y CC $279 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22
Slide 11: Communications, Media & Technology
Communications, Media & Technology Revenue Q4 2022 Geography $ in millions $ in millions $816 Rest of World $776 $783 $784 (6.3%) Y/Y $739 $744 +4.1% Y/Y CC $703 $661 $657 $626 $74 $616 Europe $580 +3.7% Y/Y +16.5% Y/Y CC $167 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22 Q3
Slide 12: Trailing Twelve Month Bookings
Trailing Twelve Month Bookings1 $ in billions $24.1 $23.1 $23.4 $23.2 $23.1 Q4 '21 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Bookings in the quarter increased 12% year-over-year. This resulted in trailing twelve month bookings of $24.1 billion, which represented a book-to-bill of 1.2x. 1 See “About Non-GAAP Finan
Slide 13: Employee Metrics
Employee Metrics Headcount in thousands 341.3 349.4 355.3 330.6 340.4 318.4 291.7 289.5 296.5 301.2 281.2 283.1 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Additional Employee Metrics Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22 Q3 '22
Slide 14: Cash Flow, Balance Sheet & Capital Allocation
Cash Flow, Balance Sheet & Capital Allocation Annual Quarterly $ in millions $ in millions Share $315 Repurchases $1,621 Acquisitions $771 $82 $1,422 $474 $318 $315 $367 Dividends $1,123 $970 $255 $367 $480 $509 $564 $127 $143 $141 $141 $139 FY 2020 FY 2021 FY 2022 Q4 '21 Q1 '22 Q2 '22 Q3 '22 Q4 '22
Slide 15: Q1 2023 Guidance
Q1 2023 Guidance1 Q1 2023 Guidance Assumptions $4.71 to $4.76B Revenue Includes ~100 bps of inorganic contribution (2.5%)-(1.5%) Y/Y or (1.0%) to flat Y/Y CC 1 Guidance is as of February 2, 2023 15 © 2023 Cognizant
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, Mar 31, Jun 30, Sep 30, Dec 31, Dec 31, Dec 31, 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 2021 2022
Slide 19: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures Notes: (a) During 2021, the parties to the consolidated putative securities class action suit filed a settlement agreement that resolved the consolidated putative securities class action against us and certain of our former officers. The settlement agre
Slide 20: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures (f) Presented below are the tax impacts of each of our non-GAAP adjustments to pre-tax income: 2020 2021 2022 FY Three months ended: Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 2021 2022 Tax impacts of non-GAAP ad
Slide 21: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures Reconciliation of free cash flow Three Months Ended Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, (in millions) 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 2022 Net cash provided by operating
Cognizant Technology Solutions — Q4 2022 Earnings Presentation on 6ix