Cognizant(US:CTSH)2025-10-29 20:03Financial Performance - Revenues for Q3 2025 reached $5,415 million, a 7.4% increase from $5,044 million in Q3 2024[21] - Net income for Q3 2025 was $274 million, down 53% from $582 million in Q3 2024[24] - Operating income for Q3 2025 was $866 million, representing a 17.4% increase from $738 million in Q3 2024[21] - Basic earnings per share for Q3 2025 were $0.56, down from $1.17 in Q3 2024, a decline of 52.4%[21] - Comprehensive income for the nine months ended September 30, 2025, was $1,814 million, slightly down from $1,830 million in the same period of 2024[24] - 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 approximately 6.6%[33] - Adjusted diluted EPS increased by $0.14 or 11.2% from Q3 2024, reaching $1.39[116] - Adjusted diluted EPS for the nine months ended September 30, 2025, was $3.93, compared to $3.55 in 2024[183] 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, reflecting a 7.9% growth[18] - Total liabilities decreased to $5,237 million from $5,558 million at the end of 2024, a reduction of 5.8%[18] - Total assets increased to $20,134 million as of September 30, 2025, from $19,966 million at the end of 2024, marking an increase of 0.84%[18] - The balance of cash and cash equivalents at the end of the period was $2,341 million, up from $2,013 million at the end of the same period in 2024, representing an increase of 16.2%[33] - As of September 30, 2025, the long-term debt net of current maturities was $551 million, down from $875 million as of December 31, 2024[57] Cash Flow and Investments - Cash flows from operating activities increased to $2,025 million for the nine months ended September 30, 2025, up from $1,204 million in 2024, representing a growth of 68.0%[33] - The company reported a net cash used in investing activities of $155 million for the nine months ended September 30, 2025, compared to $1,567 million in 2024, indicating a significant reduction in cash outflow[33] - The company repaid the $300 million balance outstanding under the revolving credit facility during the nine months ended September 30, 2025[193] Revenue Segments - Revenues are primarily attributed to clients in the United States, with substantial contributions from consulting and technology services as well as outsourcing services[39] - North America generated $4,028 million in revenues for the nine months ended September 30, 2025, up from $3,735 million in 2024, reflecting a year-over-year increase of 7.8%[40] - The Health Sciences segment reported a revenue increase of $335 million, or 7.6%, for the nine months ended September 30, 2025[158] - Financial Services segment revenue grew by $269 million, or 6.2%, for the same period[158] - Products and Resources segment saw a revenue increase of $480 million, or 13.8%, for the nine months ended September 30, 2025[158] Stock and Dividends - Common stock repurchases totaled $1,040 million for the nine months ended September 30, 2025, compared to $451 million in the same period of 2024, showing an increase of 131.5%[33] - Dividends paid amounted to $459 million for the nine months ended September 30, 2025, slightly up from $450 million in 2024, reflecting a marginal increase of 2.0%[33] - The Board of Directors declared a dividend of $0.31 per share on October 28, 2025, with a record date of November 18, 2025, and a payment date of November 26, 2025[108] Tax and Legal Matters - The effective income tax rate for the three months ended September 30, 2025, was 69.1%, significantly higher than 22.7% for the same period in 2024, primarily due to a one-time, non-cash income tax expense of $390 million[58] - The company continues to defend its position regarding tax disputes with the ITD related to share repurchase transactions valued at $523 million and $2.8 billion[60] - The company is currently involved in ongoing litigation related to class action claims, with a retrial scheduled for October 2024[94] Operational Efficiency - The company plans to continue significant investments in AI capabilities to meet client needs and enhance operational efficiency[115] - SG&A expenses decreased as a percentage of revenues, primarily due to net savings from the NextGen program[164] - Voluntary attrition in Tech Services was 14.5% for the trailing twelve months ended September 30, 2025, slightly down from 14.6% in the previous year[112] Market and Economic Outlook - The company is evaluating acquisition opportunities and capital allocation based on financial performance and economic outlook[198] - The company expects operating cash flows and available credit facilities to meet operating requirements for the next twelve months[200] - The company regularly monitors domestic and international cash flows to ensure liquidity for strategic plans[199]