Cognizant Q4 Results: Firm's Net Income Jumps 2.1%; Here's What It Forecasts For 2025
The company reported a 2.1 per cent increase in net income, reaching $558 million, up from $546 million in the same quarter of 2023. However, net income declined by 4.1 per cent on a sequential basis
Nasdaq-listed IT services firm Cognizant has met its revenue guidance for Q4 of calendar year 2024. Looking ahead to 2025, the company has projected revenue growth of 3.5 per cent to 6 per cent in constant currency. This estimate reflects improving market conditions and a stronger outlook compared to 2024.
Cognizant’s 2025 revenue guidance surpasses the growth achieved in 2024, where the company reported a 1.9 per cent increase in constant currency. For Q4, the company posted revenue of $5.1 billion, marking a 6.7 per cent year-on-year (YoY) growth, and managed to meet the higher end of its growth forecast. Cognizant follows a January-December financial calendar.
The company reported a 2.1 per cent increase in net income, reaching $558 million, up from $546 million in the same quarter of 2023. However, net income declined by 4.1 per cent on a sequential basis.
Commenting on the numbers, Ravi Kumar S, Chief Executive Officer, Cognizant, said, "I am deeply grateful to our employees for their commitment to our strategic priorities and rigorous execution, which drove fourth-quarter revenue growth to the high end of our guidance range. We exited the year with momentum — closing a record 29 large deals during the year — highlighting the effectiveness of our strategy.”
Bookings for the fourth quarter grew by 11 per cent YoY. On a trailing twelve-month basis, bookings rose 3 per cent YoY to $27.1 billion, reflecting a book-to-bill ratio of approximately 1.4x. During the quarter, Cognizant secured ten large deals, each with a total contract value of $100 million or more.
In terms of growth drivers, North America saw an 8.4 per cent year-over-year increase in Q4 of CY24. Europe grew by 1.3 per cent, while the rest of the world saw a 3.9 per cent rise.
Looking at verticals, health sciences grew by 10.4 per cent, financial services increased by 2.8 per cent, and communications, media, and technology rose by 0.4 per cent. The company's products and resources segment saw the highest growth, up 11.3 per cent.
“We expect that our improved cost structure, achieved through the successful completion of our NextGen program, will help us sustain our pace of strategic investments in support of profitable growth. Our initial 2025 guidance calls for 3.5 per cent to 6.0 per cent constant currency revenue growth and 20 to 40 basis points of full-year Adjusted Operating Margin expansion,” said, Jatin Dalal, Chief Financial Officer, Cognizant.
Cognizant’s headcount decreased by 3,300 in Q4 compared to Q3 FY24, bringing the total headcount for the year to 336,800. In Q3, the company had also reported a reduction of 6,500 employees.
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