Cognizant(US:CTSH)2025-04-30 21:37Financial Performance - Revenues for Q1 2025 increased to $5,115 million, up 7.4% from $4,760 million in Q1 2024[20] - Net income for Q1 2025 was $663 million, representing a 21.4% increase compared to $546 million in Q1 2024[20] - Basic and diluted earnings per share for Q1 2025 were both $1.34, up from $1.10 in Q1 2024[20] - Comprehensive income for Q1 2025 was $794 million, compared to $484 million in Q1 2024[23] - Operating income increased by 22.7% to $853 million in Q1 2025, compared to $695 million in Q1 2024[113] - Adjusted income from operations rose by $73 million or 10.2% from Q1 2024[106] - Operating margin for Q1 2025 improved to 16.7%, up from 14.6% in Q1 2024, driven by net savings from the NextGen program and operational efficiencies[107] - Adjusted diluted EPS increased by 9.8% to $1.23 in Q1 2025, compared to $1.12 in Q1 2024[113] Revenue Breakdown - North America contributed $3,854 million to total revenues in Q1 2025, up from $3,521 million in Q1 2024, reflecting a growth of about 9.5%[36] - The Health Sciences and Financial Services segments contributed positively to revenue growth, while the Products and Resources and Communications, Media and Technology segments showed weakness[107] - Revenue for Q1 2025 increased by $355 million or 7.5% compared to Q1 2024, with an 8.2% increase in constant currency[106] - Recent acquisitions contributed 400 basis points to overall revenue growth, with a significant impact on the Products and Resources segment[117] Cash Flow and Assets - Cash generated from operating activities in Q1 2025 was $400 million, a significant increase of $305 million compared to $95 million in Q1 2024[150] - Total current assets as of March 31, 2025, were $7,545 million, slightly up from $7,504 million at the end of 2024[17] - Cash and cash equivalents at the end of Q1 2025 were $1,980 million, down from $2,231 million at the end of 2024[17] - Long-lived assets as of March 31, 2025, totaled $988 million, slightly down from $994 million as of December 31, 2024[101] Liabilities and Debt - Total liabilities decreased to $5,068 million as of March 31, 2025, down from $5,558 million at the end of 2024[17] - Long-term debt as of March 31, 2025, is $567 million, down from $875 million as of December 31, 2024, reflecting a decrease of 35.2%[52] - The company repaid $300 million of its revolving credit facility during Q1 2025, following a $600 million borrowing in Q3 2024 to fund the acquisition of Belcan[48] Tax and Legal Matters - The effective income tax rate for the three months ended March 31, 2025, is 24.4%, slightly down from 24.8% in the same period of 2024[53] - The company is involved in ongoing disputes with the Indian Tax Department regarding share repurchase transactions valued at $523 million and $2.8 billion from 2013 and 2016, respectively[53] - The ongoing legal proceedings related to Syntel resulted in a reduced damages award from $855 million to $570 million, with further evaluations pending[78] Operational Efficiency - The company reported a decrease in operational costs by H%, improving overall profitability[179] - Voluntary attrition in Tech Services was 15.8% for the trailing twelve months ended March 31, 2025, compared to 13.1% for the same period in 2024[108] Future Outlook and Investments - The company plans to continue significant investments in AI capabilities to meet client needs and enhance internal operations[110] - Market expansion efforts are underway, with plans to enter E new markets by the end of the year[179] - The company is considering strategic acquisitions to enhance its market position, with a budget of $F million earmarked for potential deals[179] Shareholder Returns - Dividends declared in Q1 2025 were $0.31 per share, totaling $154 million[26] - A dividend of $0.31 per share was declared on April 29, 2025, with a record date of May 19, 2025[103] - The company repurchased $190 million of its Class A common stock during Q1 2025, with a remaining balance of $3,047 million authorized for repurchase[173][174]