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Cognizant(CTSH) - 2025 Q1 - Quarterly Results
CTSHCognizant(CTSH)2025-04-30 20:02

Revenue Performance - Revenue for Q1 2025 was 5,115million,a7.55,115 million, a 7.5% increase year-over-year, and 8.2% in constant currency[3] - Revenues for Q1 2025 were 5,115 million, a 7.4% increase from 4,760millioninQ12024[28]−TotalrevenuesforthethreemonthsendedMarch31,2025,were4,760 million in Q1 2024[28] - Total revenues for the three months ended March 31, 2025, were 5,115 million, representing a year-over-year increase of 7.5%[39] - Full-year 2025 revenue is expected to be between 20.5billionand20.5 billion and 21.0 billion, representing growth of 3.9% to 6.4%[12] - Q2 2025 revenue guidance is set between 5.14billionand5.14 billion and 5.21 billion, indicating growth of 5.9% to 7.4%[12] Profitability Metrics - GAAP operating margin improved to 16.7%, up 210 basis points year-over-year, while adjusted operating margin increased to 15.5%, up 40 basis points[6] - GAAP diluted EPS rose to 1.34,a221.34, a 22% increase year-over-year, and adjusted diluted EPS increased to 1.23, a 10% rise[6] - Adjusted Operating Margin for Q1 2025 was 15.5%, up from 15.1% in Q1 2024[32] - Adjusted Diluted Earnings Per Share (EPS) for Q1 2025 was 1.23,comparedto1.23, compared to 1.12 in Q1 2024, representing a 9.8% increase[32] - The company anticipates full-year 2025 Adjusted Diluted EPS guidance of 4.98to4.98 to 5.14[32] Shareholder Returns - The company returned 364milliontoshareholdersthroughsharerepurchasesanddividends,withaplannedreturnof364 million to shareholders through share repurchases and dividends, with a planned return of 1.7 billion for 2025[6] - The company repurchased 2.3 million shares under its stock repurchase program during the quarter, with a remaining authorized balance of 3,047million[44]BookingsandGrowthIndicators−Trailing12−monthbookingsreached3,047 million[44] Bookings and Growth Indicators - Trailing 12-month bookings reached 26.7 billion, reflecting a 3% year-over-year increase, with a book-to-bill ratio of approximately 1.3x[8] - The book-to-bill ratio is a key indicator of potential future revenues, with large deals defined as those with a total contract value of 100millionorgreater[25]SegmentPerformance−TheHealthSciencessegmentgenerated100 million or greater[25] Segment Performance - The Health Sciences segment generated 1,571 million in revenue, a 10.9% increase year-over-year, contributing 30.7% to total revenues[39] - North America accounted for 3,854million,or75.33,854 million, or 75.3% of total revenues, with a year-over-year growth of 9.5%[39] - The Products and Resources segment saw a revenue increase of 12.8% year-over-year, aided by recent acquisitions contributing approximately 400 basis points to overall revenue growth[40] Financial Position - Net income for Q1 2025 was 663 million, compared to 546millioninQ12024,reflectinga21.4546 million in Q1 2024, reflecting a 21.4% year-over-year growth[28] - Total current assets as of March 31, 2025, were 7,545 million, slightly up from 7,504millionattheendof2024[30]−Totalliabilitiesdecreasedto7,504 million at the end of 2024[30] - Total liabilities decreased to 5,068 million as of March 31, 2025, from 5,558millionattheendof2024[30]−Cashandcashequivalentswere5,558 million at the end of 2024[30] - Cash and cash equivalents were 1,980 million as of March 31, 2025, down from 2,231millionattheendof2024[30]−Long−termdebtdecreasedfrom2,231 million at the end of 2024[30] - Long-term debt decreased from 875 million at December 31, 2024, to 567millionasofMarch31,2025[37]CashFlow−Netcashprovidedbyoperatingactivitieswas567 million as of March 31, 2025[37] Cash Flow - Net cash provided by operating activities was 400 million, compared to 95millioninthesameperiodlastyear[42]−FreecashflowforthethreemonthsendedMarch31,2025,was95 million in the same period last year[42] - Free cash flow for the three months ended March 31, 2025, was 393 million, significantly up from 16millionintheprioryear[46]−Thecompanyexperiencedanetcashusedininvestingactivitiesof16 million in the prior year[46] - The company experienced a net cash used in investing activities of 7 million, compared to $238 million in the prior year[42] Strategic Initiatives - Cognizant's recent acquisitions contributed approximately 400 basis points to year-over-year revenue growth[3] - The company plans to establish a Cognizant Immersive Learning Center in Chennai, India, aimed at training 100,000 individuals annually[16] - Cognizant has entered into several strategic partnerships, including with Boehringer Ingelheim and Citizens Financial Group, to enhance technology capabilities and operational efficiencies[13]