Cognizant Technology Solutions Corp (CTSH) Reports Q3 2023 Earnings, Revenue Rises 0.8% YoY
Q3 2023 revenue of $4.9 billion, up 0.8% year-over-year
Record trailing 12-month bookings of $26.9 billion, a 16% increase YoY
Operating cash flow of $828 million; free cash flow of $755 million, ~144% of net income
Share repurchase expectation for 2023 increased by $200 million to $1 billion
On November 1, 2023, Cognizant Technology Solutions Corp (NASDAQ:CTSH) released its third quarter 2023 financial results. The company reported a slight increase in revenue, up 0.8% year-over-year to $4.9 billion. Despite ongoing economic uncertainty, the company saw significant growth in bookings and a decrease in voluntary attrition.
Financial Highlights
CTSH reported a GAAP operating margin of 14.0% and an adjusted operating margin of 15.5%. The company's GAAP diluted EPS was $1.04, while the adjusted diluted EPS was $1.16. The company's full-year 2023 revenue guidance was narrowed to (0.7%) to flat, and the full-year 2023 Adjusted Operating Margin guidance was updated to approximately 14.7%, the high end of prior guidance.
We strengthened the companys fundamentals during the third quarter as reflected in higher customer satisfaction scores, significantly lower voluntary attrition, and continued growth in bookings, despite ongoing economic uncertainty," said Ravi Kumar S, Chief Executive Officer.
Bookings and Employee Metrics
Bookings in the third quarter grew 9% year-over-year. On a trailing-twelve-month basis, bookings grew 16% year-over-year to $26.9 billion. The total headcount at the end of the third quarter was 346,600, an increase of 1,000 from Q2 2023 and a decrease of 2,800 from Q3 2022.
Return of Capital to Shareholders
The company repurchased 4.3 million shares for $300 million during the third quarter under its share repurchase program. As of September 30, 2023, there was $2.1 billion remaining under the share repurchase authorization. In October 2023, the company declared a quarterly cash dividend of $0.29 per share, a 7% increase year-over-year.
Q4 and Full-Year 2023 Guidance
For the fourth quarter, revenue is expected to be $4.69 - $4.82 billion, a decline of 3.1% to 0.3%, or a decline of 4.0% to 1.2% in constant currency. Full-year 2023 revenue is expected to be $19.3 - $19.4 billion, or a decline of 0.7% to flat, both as reported and in constant currency. Full-year 2023 Adjusted Operating Margin is expected to be approximately 14.7%.
Explore the complete 8-K earnings release (here) from Cognizant Technology Solutions Corp for further details.
This article first appeared on GuruFocus.
