Cognizant Q3 revenue hits $5Bn, driven by healthcare growth
NEW JERSEY, UNITED STATES — Information technology services and consulting company. Cognizant recently announced its third-quarter 2024 financial results, reporting revenue of $5 billion, marking a 3.0% year-over-year increase or 2.7% in constant currency.
This performance was above the company’s guidance range, driven by strong growth in the health sciences and financial services sectors.
“Revenue growth in the third quarter was at the high end of our guidance range,” said Ravi Kumar S, Chief Executive Officer. “Investments in AI-driven platforms, like our Neuro suite and Flowsource, are resonating with our clients and supporting our large deals success.”
Operating margins show year-over-year improvement
Cognizant reported an operating margin of 14.6%, flat sequentially but up by 60 basis points compared to the same period last year. The adjusted operating margin for Q3 stood at 15.3%, with a slight increase of 10 basis points sequentially and a decrease of 20 basis points year-over-year. Year-to-date, the company posted an adjusted operating margin of 15.2%, an improvement of 40 basis points over the previous year.
“Our focus on operating cost discipline and savings generated through our strong execution under the NextGen program have allowed us to expand year-to-date Adjusted Operating Margin by approximately 40 basis points,” said Jatin Dalal, Chief Financial Officer.
Health sciences leads sector growth while large deals drive momentum
Cognizant’s health sciences segment led the company’s growth, posting a notable 7.8% increase year-over-year (7.6% in constant currency). Financial services returned to positive growth with a modest 0.7% rise (0.5% in constant currency).
The company also saw strong momentum in large deals, signing six contracts valued at over $100 million each during the quarter. This brings Cognizant’s total large deals for 2024 to nineteen, surpassing the full-year total for 2023.
Bookings remain steady while employee metrics increased
Bookings for Q3 were flat compared to last year, with trailing twelve-month bookings totaling $26.2 billion and a book-to-bill ratio of approximately 1.3x.
At the end of Q3, the company’s headcount stood at 340,100 employees, reflecting an increase of 3,800 from Q2 but a decrease of 6,500 from Q3 2023.
Shareholder returns and future guidance
During Q3, Cognizant repurchased 3.1 million shares for $228 million as part of its share repurchase program. Additionally, the company declared a quarterly cash dividend of $0.30 per share for shareholders of record on November 19, payable on November 27.
Looking ahead to Q4, Cognizant expects revenue between $5 billion and $5.1 billion, representing growth between 5.1% and 7.1%.
Full-year revenue is projected to range from $19.7 billion to $19.8 billion, with an adjusted operating margin forecasted at approximately 15.1%.
