Cognizant Technology Solutions Corporation (CTSH) Bundle
A Brief History of Cognizant Technology Solutions
Cognizant Technology Solutions, founded in 1994, has evolved into a leading provider of IT services and consulting worldwide. The company's growth trajectory has been marked by strategic acquisitions and a focus on digital transformation services.
Key Financial Milestones
As of September 30, 2024, Cognizant reported significant financial figures:
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Revenues | $5,044 million | $4,897 million | $147 million (3.0% growth) |
| Net Income | $582 million | $525 million | $57 million (10.9% growth) |
| Diluted EPS | $1.17 | $1.04 | $0.13 (12.5% growth) |
| Operating Margin | 14.6% | 14.0% | 0.6 percentage points |
Recent Acquisitions
Cognizant has actively pursued acquisitions to bolster its service offerings. Notably, in 2024, the company acquired:
- Thirdera: Acquired on January 22, 2024, specializing in ServiceNow solutions.
- Belcan: Acquired on August 26, 2024, for $1,195 million, enhancing capabilities in engineering services.
Segment Performance
The company's business segments showed varied performance in Q3 2024 compared to Q3 2023:
| Segment | Q3 2024 Revenue | Q3 2023 Revenue | Change |
|---|---|---|---|
| Financial Services | $1,486 million | $1,475 million | $11 million (0.7% growth) |
| Health Sciences | $1,514 million | $1,405 million | $109 million (7.8% growth) |
| Products and Resources | $1,228 million | $1,170 million | $58 million (5.0% growth) |
| Communications, Media, and Technology | $816 million | $847 million | $(31) million (-3.7% decline) |
Cash Flow and Liquidity
For the nine months ended September 30, 2024, Cognizant's cash flow statement highlighted:
| Cash Flow Category | 2024 | 2023 | Change |
|---|---|---|---|
| Operating Activities | $1,204 million | $1,593 million | $(389 million) |
| Investing Activities | $(1,567 million) | $(499 million) | $(1,068 million) |
| Financing Activities | $(313 million) | $(1,154 million) | $841 million |
Market Position and Future Outlook
Cognizant remains a prominent player in the IT services market, capitalizing on trends in digital transformation and cloud computing. The company's strategic initiatives and acquisitions position it well for continued growth in the coming years.
A Who Owns Cognizant Technology Solutions Corporation (CTSH)
Major Shareholders
As of 2024, the ownership of Cognizant Technology Solutions Corporation (CTSH) is distributed among several key institutional and individual shareholders. The following table summarizes the major shareholders and their respective ownership percentages:
| Shareholder | Shares Owned (in millions) | Ownership Percentage |
|---|---|---|
| The Vanguard Group, Inc. | 55.3 | 11.1% |
| BlackRock, Inc. | 49.7 | 10.0% |
| State Street Corporation | 30.2 | 6.1% |
| FMR LLC (Fidelity) | 27.8 | 5.6% |
| Invesco Ltd. | 22.3 | 4.5% |
| Other Institutional Investors | 200.0 | 40.5% |
| Insider Holdings | 30.0 | 6.1% |
| Public Float | 80.0 | 16.3% |
Stock Performance
As of September 30, 2024, Cognizant's stock was trading at approximately $74.50 per share, with a market capitalization of around $36 billion. The stock has seen a year-to-date increase of 15% as compared to the previous year.
Recent Changes in Ownership
In the third quarter of 2024, Cognizant repurchased approximately 2 million shares at an average price of $73.49, amounting to a total expenditure of about $147 million. This activity reflects the company's strategy to enhance shareholder value and manage equity effectively.
Dividend Policy
Cognizant declared a quarterly dividend of $0.30 per share, with an expected payout to shareholders amounting to $150 million for the quarter ending September 30, 2024. This dividend reflects a commitment to returning capital to shareholders while maintaining adequate reinvestment in business operations.
Management Ownership
Key executives and board members hold a combined total of approximately 30 million shares, equating to 6.1% of the total shares outstanding. This aligns management's interests with those of shareholders and indicates a strong commitment to the company's long-term success.
Institutional Ownership Trends
Institutional ownership has steadily increased over the past year, reflecting growing confidence in Cognizant's operational performance and strategic direction. The percentage of shares held by institutional investors reached 75% by the end of Q3 2024, compared to 70% at the end of the previous year.
Conclusion
The ownership structure of Cognizant Technology Solutions Corporation reveals a diverse range of institutional investors, coupled with a significant proportion of shares held by company insiders. This blend of ownership is indicative of both institutional confidence and management alignment with shareholder interests.
Cognizant Technology Solutions Corporation (CTSH) Mission Statement
The mission statement of Cognizant Technology Solutions Corporation emphasizes its commitment to delivering modern business solutions by leveraging technology and industry expertise. The company aims to help clients navigate their digital transformation journeys, ensuring they remain competitive in a rapidly changing environment.
Core Values
- Client-Centricity: Focus on understanding and meeting client needs.
- Integrity: Upholding ethical standards and transparency in operations.
- Innovation: Commitment to continuous improvement and embracing new technologies.
- Diversity and Inclusion: Promoting a diverse workforce and inclusive culture.
Financial Performance Overview
As of September 30, 2024, Cognizant reported a total revenue of $14,654 million for the nine months ended, reflecting a slight increase of $59 million or 0.4% compared to $14,595 million in the same period of 2023.
| Financial Metrics | Q3 2024 | Q3 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Revenue | $5,044 million | $4,897 million | $147 million | 3.0% |
| Income from Operations | $738 million | $686 million | $52 million | 7.6% |
| Net Income | $582 million | $525 million | $57 million | 10.9% |
| Diluted EPS | $1.17 | $1.04 | $0.13 | 12.5% |
| Operating Margin | 14.6% | 14.0% | 0.6% | 4.3% |
Strategic Initiatives
Cognizant's strategic initiatives include the NextGen program, which aims to simplify operations and optimize corporate functions. As of Q3 2024, the program has incurred costs of approximately $314 million since its inception, with an expected total of $335 million by year-end 2024.
Market Segments
The company operates across various segments, with the following revenue contributions for Q3 2024:
| Segment | Revenue ($ Million) | Year-over-Year Growth (%) |
|---|---|---|
| Financial Services | $1,486 | 0.7% |
| Health Sciences | $1,514 | 7.8% |
| Products and Resources | $1,228 | 5.0% |
| Communications, Media and Technology | $816 | (3.7%) |
Employee Metrics
As of September 30, 2024, Cognizant has approximately 340,100 employees, a decrease from 346,600 employees in the same period in 2023. The voluntary attrition rate for tech services is reported at 14.6%, down from 16.2% year-over-year.
Dividend Information
The board of directors declared a dividend of $0.30 per share, with a record date of November 19, 2024, and a payment date of November 27, 2024.
Conclusion on Financial Outlook
Cognizant continues to focus on digital transformation, AI integration, and strategic acquisitions to enhance its service offerings and market position. The company anticipates ongoing revenue growth driven by its commitment to innovation and client success.
How Cognizant Technology Solutions Corporation (CTSH) Works
Company Overview
Cognizant Technology Solutions Corporation (CTSH) operates as a global technology services company. It provides IT services, including digital, technology, consulting, and operations services.
Financial Performance
As of September 30, 2024, Cognizant reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Revenues | $5,044 million | $4,897 million | $14,654 million | $14,595 million |
| Net Income | $582 million | $525 million | $1,694 million | $1,568 million |
| Diluted EPS | $1.17 | $1.04 | $3.41 | $3.09 |
| Operating Margin | 14.6% | 14.0% | 14.6% | 13.5% |
| Adjusted Operating Margin | 15.3% | 15.5% | 15.2% | 14.8% |
Revenue Segments
Cognizant's revenues are categorized into segments based on industry. The following table summarizes the revenue distribution for Q3 2024:
| Segment | Revenue (in millions) | Growth (%) |
|---|---|---|
| Financial Services | $1,475 | 0.7% |
| Health Sciences | $1,405 | 7.8% |
| Products and Resources | $1,170 | 5.0% |
| Communications, Media & Technology | $847 | (3.7%) |
Geographical Breakdown
The geographical revenue distribution for the nine months ended September 30, 2024, is presented below:
| Geography | Revenue (in millions) | Growth (%) |
|---|---|---|
| North America | $10,733 | 1.3% |
| United Kingdom | $1,437 | (3.8%) |
| Continental Europe | $1,439 | (0.1%) |
| Rest of World | $986 | (2.8%) |
Cost Structure
Cognizant's cost structure primarily comprises cost of revenues, selling, general, and administrative expenses. The following table summarizes key cost components for YTD 2024:
| Cost Type | Amount (in millions) | Percentage of Revenues |
|---|---|---|
| Cost of Revenues | $9,661 | 65.9% |
| SG&A Expenses | $2,379 | 16.2% |
| Depreciation and Amortization | $388 | 2.6% |
| Restructuring Charges | $85 | 0.6% |
Investment Activities
In the nine months ended September 30, 2024, Cognizant's cash flow from investing activities included significant acquisitions:
| Activity | Amount (in millions) |
|---|---|
| Payments for Business Combinations | $1,615 |
| Purchases of Property and Equipment | $214 |
Cash Flow Summary
The cash flow summary for the nine months ended September 30, 2024, is as follows:
| Cash Flow Category | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Operating Activities | $1,204 | $1,593 |
| Investing Activities | ($1,567) | ($499) |
| Financing Activities | ($313) | ($1,154) |
Debt Structure
As of September 30, 2024, Cognizant's debt structure is outlined below:
| Debt Type | Amount (in millions) |
|---|---|
| Term Loan | $618 |
| Revolving Credit Facility | $600 |
Effective Tax Rate
The effective tax rates for the three months ended September 30 are as follows:
| Period | Effective Tax Rate |
|---|---|
| Q3 2024 | 22.7% |
| Q3 2023 | 26.8% |
Future Outlook
Cognizant's management has indicated plans to leverage its NextGen program for operational efficiency and cost savings, which are anticipated to enhance profitability and streamline operations moving forward.
How Cognizant Technology Solutions Corporation (CTSH) Makes Money
Revenue Streams
Cognizant Technology Solutions Corporation generates revenue through various segments, primarily focusing on consulting and technology services, as well as outsourcing services. For the third quarter of 2024, total revenues amounted to $5,044 million, reflecting an increase from $4,897 million in the same period of 2023.
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Increase/Decrease (in millions) |
|---|---|---|---|
| Consulting and Technology Services | $3,226 | $3,022 | $204 |
| Outsourcing Services | $1,818 | $1,875 | ($57) |
| Total | $5,044 | $4,897 | $147 |
Geographic Distribution of Revenue
The geographic breakdown of Cognizant's revenue for Q3 2024 shows strong performance in North America, with a total revenue of $3,735 million, which is a growth from $3,599 million in Q3 2023.
| Region | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Increase/Decrease (in millions) |
|---|---|---|---|
| North America | $3,735 | $3,599 | $136 |
| United Kingdom | $482 | $486 | ($4) |
| Continental Europe | $485 | $484 | $1 |
| Rest of World | $342 | $328 | $14 |
| Total | $5,044 | $4,897 | $147 |
Cost Structure
Cognizant's cost structure includes the cost of revenues, which totaled $3,311 million in Q3 2024, compared to $3,209 million in Q3 2023.
| Cost Category | Q3 2024 Amount (in millions) | Q3 2023 Amount (in millions) |
|---|---|---|
| Cost of Revenues | $3,311 | $3,209 |
| Selling, General and Administrative Expenses | $833 | $801 |
| Depreciation and Amortization | $129 | $129 |
| Restructuring Charges | $33 | $72 |
Profitability Metrics
For the third quarter of 2024, Cognizant reported an operating income of $738 million, resulting in an operating margin of 14.6%. This compares to an operating income of $686 million and an operating margin of 14.0% in Q3 2023.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Operating Income (in millions) | $738 | $686 |
| Operating Margin | 14.6% | 14.0% |
Net Income and Earnings Per Share
Cognizant's net income for Q3 2024 was $582 million, yielding a diluted EPS of $1.17, compared to a net income of $525 million and a diluted EPS of $1.04 in Q3 2023.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income (in millions) | $582 | $525 |
| Diluted EPS | $1.17 | $1.04 |
Conclusion on Financial Health
As of September 30, 2024, Cognizant's total assets were valued at $20,164 million, while total liabilities stood at $5,712 million, resulting in stockholders' equity of $14,452 million.
| Financial Metric | Amount (in millions) |
|---|---|
| Total Assets | $20,164 |
| Total Liabilities | $5,712 |
| Stockholders' Equity | $14,452 |
Cognizant Technology Solutions Corporation (CTSH) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- Cognizant Technology Solutions Corporation (CTSH) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Cognizant Technology Solutions Corporation (CTSH)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Cognizant Technology Solutions Corporation (CTSH)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.