Cognizant Reports 2% Revenue Growth to $19.736 Billion for Fiscal Year 2024

Cognizant Technology Solutions Corporation reported a revenue increase of $383 million, or 2.0%, for the fiscal year ending December 31, 2024, bringing total revenues to $19.736 billion. This growth was primarily driven by the Health Sciences segment and contributions from recent acquisitions, which added approximately 200 basis points to revenue growth. The company’s income from operations rose by 7.5% to $2.892 billion, with an operating margin of 14.7%, up from 13.9% in the previous year. Adjusted diluted earnings per share (EPS) also increased by 4.4% to $4.75, reflecting a solid performance despite challenges in certain segments.

Compared to the previous fiscal year, Cognizant's financial performance showed notable improvements. The operating margin increased by 80 basis points, aided by net savings from the NextGen program, which aimed to streamline operations and reduce costs. However, the company faced increased compensation costs due to a merit increase cycle and the dilutive impact of acquisitions, particularly the recent purchase of Belcan, which is expected to have a modest near-term impact on operating margins.

Strategically, Cognizant has focused on expanding its capabilities through acquisitions, including the purchase of Belcan and Thirdera in 2024. These acquisitions are intended to enhance Cognizant's offerings in engineering research and development services and ServiceNow solutions, respectively. The company is also investing in artificial intelligence (AI) technologies to meet evolving client demands and improve operational efficiencies. As of the end of 2024, Cognizant employed approximately 336,800 individuals, a decrease from 347,700 in 2023, with a voluntary attrition rate of 15.9%, up from 13.8% the previous year.

Operationally, Cognizant's revenue distribution across its four reportable segments was as follows: Health Sciences generated $5.932 billion, Financial Services $5.753 billion, Products and Resources $4.782 billion, and Communications, Media and Technology $3.269 billion. The company continues to face challenges in the Financial Services and Products and Resources segments, which experienced reduced demand for discretionary work. Geographic expansion remains a focus, with North America accounting for the majority of revenues, particularly in the Health Sciences segment.

Looking ahead, Cognizant anticipates continued demand for services that enhance productivity and deliver cost savings as clients transform into technology-driven, customer-centric businesses. The company plans to invest significantly in AI capabilities to maintain competitiveness in a rapidly evolving market. However, potential regulatory changes and macroeconomic uncertainties may impact future results. Cognizant remains committed to its strategic goals, including organic growth and targeted acquisitions, to enhance its market position and drive long-term value for shareholders.