Core Insights - Cognizant Technology Solutions Corporation reported strong financial results for Q3 2025, with earnings per share (EPS) of $1.39, exceeding estimates of $1.29, and a year-over-year increase of 11% in adjusted EPS [2][6] - The company's revenue reached $5.42 billion, marking a 7.4% increase from the previous year and surpassing expectations [2][6] - Cognizant's operating margin improved to 16.0%, reflecting a 140 basis point increase from the previous year, with adjusted operating margin also rising [3][6] Financial Performance - The decline in GAAP EPS to $0.56 was attributed to a one-time, non-cash income tax expense of $0.80 [2] - Trailing 12-month bookings reached $27.5 billion, indicating a 5% increase from the previous year, showcasing strong demand for services [3] - The company returned $1.5 billion to shareholders through share repurchases and dividends in 2025, with plans to return $2 billion by year-end [4] Guidance and Strategic Focus - Cognizant raised its 2025 constant currency revenue growth guidance to 6.0%-6.3%, surpassing prior guidance [4] - The adjusted operating margin guidance for 2025 is now approximately 15.7%, reflecting a 40 basis point expansion year-over-year [4] - CEO Ravi Kumar S emphasized a strategic focus on AI-led platforms and intellectual property as key drivers for future growth [5] Financial Metrics - The company has a P/E ratio of 13.70 and a low debt-to-equity ratio of 0.077, indicating a strong financial position [5] - A current ratio of 2.41 suggests robust liquidity, ensuring the company can meet its short-term obligations [5]

Joining us here in the CBC exclusive at Post9 is Cognizant CEO Ravi Kumar. It's great to have you back. Welcome.>> Thank you. Thank you, K. Thank you, Leslie.>> It's been so choppy in services, especially IT services. Is this are you turning a chapter here. >> Yeah, absolutely.We've had a great uh year so far. We increased our uh upper end of the guidance range for our revenue. Uh we moved to the upper end on our margins.Our EPS growth has been uh 10 to 11%. So we are very very excited about the transformat ...

Core Viewpoint - Cognizant Technology Solutions Corp. is considering a public listing on Indian stock exchanges, which would position it as India's second-largest listed IT services company, following Tata Consultancy Services (TCS) [1][2] Company Strategy - Cognizant's board and management are evaluating opportunities to enhance shareholder value, including a potential primary offering and secondary listing in India, with legal and financial advisors involved [2][3] - The company ended the previous year with $19.74 billion in revenue and has a significant workforce in India, with over two-thirds of its 241,500 employees based there [2] Market Valuation - The motivation behind the potential India listing is attributed to better valuation opportunities in the Indian market, where Cognizant's price-to-earnings ratio is around 13, compared to 22-23 for local firms like TCS and Infosys [4][5] Industry Context - Cognizant's potential listing follows the upcoming public listing of Carlyle-backed Hexaware Technologies Ltd. in February 2025, indicating a trend of American firms seeking to tap into the Indian market [6] Financial Performance - Cognizant reported better-than-expected performance for the July-September period, with revenue of $5.42 billion, reflecting a 3.24% sequential increase and a 7.36% year-over-year growth, surpassing analyst estimates [7][8] - The company raised its full-year revenue guidance to $21.05-$21.1 billion, indicating a projected annual growth of 6.6%-6.9%, up from a previous range of 4.7%-6.7% [11] Growth Dynamics - Cognizant's organic growth has improved as reliance on acquisitions has decreased, with year-on-year growth rates of 8.2%, 7.2%, and 6.5% in the first three quarters of the year [12][13] - The Belcan acquisition contributed significantly to growth in earlier quarters, but its impact has diminished, suggesting a shift towards more sustainable growth strategies [13][14] Operational Insights - The company's net profit declined by over half sequentially to $274 million due to higher one-time income tax expenses [15] - Operating margin increased by 40 basis points to 16%, attributed to a depreciating Indian rupee and disciplined expense management [16] Workforce and Hiring Practices - Cognizant's employee count rose to 349,800, an increase of 6,000 from the previous quarter, amidst scrutiny over hiring practices in the US [17][18] - The company has reduced its dependency on visas and increased local hiring, mitigating potential impacts from recent US policy changes [19][20]

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Financial Data and Key Metrics Changes - Revenue for Q3 2025 grew 6.5% year over year in constant currency to $5.4 billion, marking the fifth consecutive quarter of year-over-year organic revenue growth [5][24] - Adjusted operating margin improved by 70 basis points year over year, driven by disciplined expense management and an increasingly AI-enabled delivery model [8][28] - Adjusted EPS grew approximately 11% year over year, reaching $1.39, excluding a one-time non-cash income tax expense [30][33] - Free cash flow for Q3 was $1.2 billion, representing 170% of adjusted net income, compared to $791 million a year ago [30] Business Line Data and Key Metrics Changes - All four operating segments experienced organic revenue growth year over year, with financial services leading due to healthy discretionary spending trends [25][26] - The digital engineering business grew about 8% organically year to date, while the cloud and infrastructure modernization business grew 10% year over year [13][14] - BPO revenue grew 10% in the last two quarters and is on track to reach $3 billion in annualized revenue [20] Market Data and Key Metrics Changes - North America contributed significantly to revenue growth, with nearly 8% year-over-year growth in constant currency [26] - Demand trends in Europe and the rest of the world remained stable but were affected by recent tariffs and geopolitical uncertainty [26] Company Strategy and Development Direction - The company is evolving into an AI builder, focusing on scaling agentic AI across enterprises and enhancing productivity through AI-led initiatives [9][21] - Cognizant's strategy includes three vectors: AI-led productivity, industrializing AI, and agentifying the enterprise, which are forming a flywheel of new value creation [10][18] - The company is investing in platforms, intellectual property, and partnerships to support its AI builder strategy and long-term growth [23][60] Management's Comments on Operating Environment and Future Outlook - Management noted a complex demand environment with clients navigating uncertainty around trade policy, but also highlighted a growing pipeline of modernization projects [24][25] - The company expects to meet or exceed the high end of its revenue guidance for the year, with a forecasted revenue growth of 6%-6.3% in constant currency [32][33] - Management expressed confidence in the financial services sector, indicating a shift from cost takeout to innovation-led spending [82] Other Important Information - The company signed six large deals in Q3, each with a total contract value of $100 million or more, bringing the year-to-date total to 16 [6] - Cognizant's workforce is being upskilled in AI-related skills, with over 250,000 employees trained [53] Q&A Session Summary Question: Insights on new business pipeline for smaller deals - Management noted a healthy pipeline for discretionary small projects, particularly in financial services and healthcare, driven by AI-led spending [40] Question: Sustainability of revenue per employee increase - Revenue per employee rose 8%, and margin per employee grew 10%, indicating a shift towards fixed-price managed services and AI-led productivity [42][44] Question: Tracking success of employee upskilling in AI - The company is pioneering AI-related skill development, with significant training initiatives and a focus on embedding AI in software development processes [49][51] Question: Impact of large deal signings on revenue and margins in 2026 - Management expects large and mega deals to continue positively impacting revenue and margins, with a focus on both productivity and innovation-led spending [56][72] Question: Partnership strategy and its importance - The company is broadening its partnership strategy to include both traditional SaaS companies and frontier model companies like OpenAI and Anthropic [58][60] Question: Financial services vertical spending trends - Improved spending in financial services is transitioning from cost savings to innovation, with significant AI-led projects being implemented [81][82] Question: Outlook for the healthcare vertical - The healthcare vertical is expected to grow, particularly through the BPaaS offering, which is seeing increased demand due to AI-led instrumentation [85]

Cognizant Technology Solutions (NasdaqGS:CTSH) Q3 2025 Earnings Call October 29, 2025 08:30 AM ET Speaker2Ladies and gentlemen, welcome to the Cognizant Technology Solutions third quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the q ...

Core Insights - Cognizant (CTSH) reported quarterly earnings of $1.39 per share, exceeding the Zacks Consensus Estimate of $1.29 per share, and up from $1.25 per share a year ago [1] - The earnings surprise was +7.75%, and the company has surpassed consensus EPS estimates in all four quarters over the past year [2] - Revenues for the quarter ended September 2025 were $5.42 billion, surpassing the Zacks Consensus Estimate by 1.63% and up from $5.04 billion year-over-year [3] Earnings Performance - Cognizant's earnings surprise of +7.75% indicates strong performance relative to expectations [2] - The company has consistently exceeded earnings estimates, achieving this in the last four quarters [2] Revenue Analysis - The reported revenue of $5.42 billion for the recent quarter reflects a year-over-year increase and has also surpassed consensus estimates [3] - Cognizant has topped revenue estimates in each of the last four quarters [3] Stock Performance and Outlook - Cognizant shares have declined approximately 11.8% year-to-date, contrasting with the S&P 500's gain of 17.2% [4] - The future performance of the stock will depend on management's commentary during the earnings call and the earnings outlook [4][5] Earnings Estimates and Industry Context - The current consensus EPS estimate for the upcoming quarter is $1.31, with expected revenues of $5.26 billion, and for the current fiscal year, the estimate is $5.16 on revenues of $20.95 billion [8] - The Computers - IT Services industry, to which Cognizant belongs, is currently ranked in the top 24% of Zacks industries, indicating a favorable outlook [9]

Exhibit 99.3 Third Quarter 2025 Financial Results and Highlights October 29, 2025 © 2025 Cognizant 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 assumptions as to future events that may not prove to be accurate. These statements include, but are not limited to, exp ...

Cognizant Technology raised its full-year 2025 adjusted profit forecast on Wednesday, anticipating a surge in spending from enterprise clients looking to upgrade their digital infrastructure with arti... ...

Financial Performance - Third quarter revenue reached $5.42 billion, a 7.4% year-over-year increase, and 6.5% in constant currency, exceeding guidance[5] - Year-to-date revenue totaled $15.78 billion, reflecting a 7.6% increase compared to the same period last year[3] - Revenues for Q3 2025 were $5,415 million, a 7.4% increase from $5,044 million in Q3 2024[27] - Adjusted diluted EPS for Q3 2025 was $1.39, an 11% increase year-over-year, while GAAP diluted EPS was $0.56, down $0.61 year-over-year due to a one-time tax charge[5] - Adjusted diluted earnings per share for Q3 2025 was $1.39, compared to $1.25 in Q3 2024, marking an increase of 11.2%[31] - Operating income for Q3 2025 was $866 million, up from $738 million in Q3 2024, representing a 17.4% increase[27] - Net income for Q3 2025 was $274 million, a decrease of 53% compared to $582 million in Q3 2024[40] - Net income for the nine months ended September 30, 2025, was $1,582 million, compared to $1,694 million for the same period in 2024, reflecting a decrease of 6.6%[27] - Adjusted net income for the nine months ended September 30, 2025, was $1,931 million, compared to $1,762 million for the same period in 2024, reflecting a 9.6% growth[31] Revenue Guidance and Expectations - Full-year 2025 revenue guidance was raised to a growth range of 6.0% to 6.3% in constant currency[6] - The company expects fourth quarter revenue to be between $5.27 billion and $5.33 billion, representing a growth of 3.8% to 4.8%[11] Contracts and Bookings - The company signed six large deals in Q3 2025, contributing to a 40% growth in total contract value (TCV) year-to-date[3] - The trailing twelve-month bookings increased by 5% year-over-year to $27.5 billion, with a book-to-bill ratio of approximately 1.3x[7] - The company reported a book-to-bill ratio that indicates strong future revenue potential, although specific figures were not disclosed[24] Shareholder Returns - The company returned $1.5 billion to shareholders year-to-date through share repurchases and dividends, with a target of $2.0 billion for the full year[5] - The company repurchased 6.3 million shares in Q3 2025, compared to 3.1 million shares in Q3 2024[42] - The company had a remaining authorized balance for stock repurchases of $2,243 million as of September 30, 2025[42] Assets and Liabilities - Total current assets increased to $8,094 million as of September 30, 2025, compared to $7,504 million at the end of 2024, marking a 7.9% growth[29] - Total liabilities decreased to $5,237 million as of September 30, 2025, down from $5,558 million at the end of 2024, a reduction of 5.8%[29] - Cash and cash equivalents rose to $2,341 million as of September 30, 2025, compared to $2,231 million at the end of 2024, an increase of 4.9%[29] - Cash and unrestricted cash equivalents as of September 30, 2025, totaled $2,341 million, an increase from $2,231 million at the end of 2024[35] - Net cash for the company as of September 30, 2025, was $1,770 million, up from $1,335 million at the end of 2024[35] Operational Highlights - The company’s total headcount as of September 30, 2025, was 349,800, an increase of 6,000 from the previous quarter[8] - The Health Sciences segment generated $1,604 million in revenue for Q3 2025, accounting for 29.6% of total revenues, with a year-over-year growth of 5.9%[37] - North America contributed $4,028 million to total revenues in Q3 2025, representing 74.4% of total revenues, with a growth rate of 7.8%[37] Tax and Non-Cash Adjustments - The company recorded a one-time non-cash income tax expense of $390 million related to the enactment of the One Big Beautiful Bill Act (OBBBA) in July 2025[32] - Total adjustments for non-cash income and expenses were $600 million in Q3 2025, compared to $92 million in Q3 2024[40] Strategic Focus - The company is focusing on generative AI technologies to enhance its competitive position and client services[19] - Cognizant is actively managing its capital return strategy to shareholders, with anticipated amounts to be disclosed in future reports[19]