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Cognizant Reports Strong Financial Performance for Fourth Quarter and Full-Year 2024

Cognizant Technology Solutions Corporation (Nasdaq: CTSH) has released its financial results for the fourth quarter and full year of 2024, revealing robust growth and strategic advancements. The highlights include impressive revenue figures, significant operating margins, and a solid outlook for 2025, which together reflect the company's successful maneuvers to capitalize on market opportunities and enhance its service offerings.

Financial Overview

For the fourth quarter of 2024, Cognizant achieved revenues of $5.1 billion, marking a 6.8% increase year-over-year, or a 6.7% increase in constant currency. Such figures were at the upper end of the company's previously set guidance. Looking at the full year, Cognizant posted a $19.7 billion revenue, reflecting a 2.0% rise from the previous year.

Notably, the company’s operating margin expanded, with a full-year operating margin of 14.7%, which is an increase of 80 basis points from the year prior. The adjusted operating margin reached 15.3%, providing a healthy indication of Cognizant's operational efficiency.

Bookings and Shareholder Returns

Cognizant experienced strong bookings activities throughout 2024, recording $27.1 billion in trailing twelve-month bookings, which is a 3% year-over-year increase. The fourth quarter alone saw bookings jump by 11%, indicating a robust demand for Cognizant's services.

Additionally, the company returned approximately $1.2 billion to shareholders in the form of buybacks and dividends in 2024, signaling a commitment to enhancing shareholder value. The quarterly cash dividend for Q1 2025 was increased by 3% to $0.31 per share, set to be paid on February 26, 2025.

Strategic Investments in AI

Cognizant's CEO, Ravi Kumar S, emphasized the importance of strategic investments in AI. He noted that the company closed a record 29 significant deals in 2024, reflecting a strategic focus on expanding its AI-led capabilities. Not only did Cognizant acquire several companies to enhance its portfolio, but it also reinforced its commitment to client-centric and innovative solutions that drive productivity and generative AI utilization.

The partnerships with leading technology firms, such as Siemens and CrowdStrike, illustrate Cognizant's intent to diversify its service offerings and fortify its market position. By integrating advanced technologies into its operations, Cognizant aims to deliver more value and efficiency to its clients.

2025 Guidance and Projections

Looking ahead, Cognizant provided its initial revenue growth guidance for 2025, anticipating a rise of 3.5% to 6.0% in constant currency. Furthermore, it projects an adjusted operating margin expansion of 20 to 40 basis points for the year.

The company’s leadership is optimistic about the future, potentially leveraging improved cost structures established through the successful conclusion of its NextGen program,

which is aimed at delivering sustainable and profitable growth. Such strategic initiatives reflect Cognizant's dedication to maintaining resilience and adaptability within a dynamically changing industry landscape.

Conclusion

Cognizant's impressive financial results for both the fourth quarter and the entirety of 2024, coupled with substantial growth in bookings and a robust operational framework, demonstrate the company's capacity for strategic execution and sustained market relevance. With forward-looking guidance and continued investment in innovative technologies, Cognizant is poised for continued success in the coming year.