Cognizant Hosts Investor Day to Discuss Long-Term Growth Strategy for the Next Wave of AI-Driven Technology Transformation
•Board approves $2 billion increase to share repurchase authorization
•Company adds $500 million to 2025 share repurchase plan, bringing expected total to $1.1 billion
TEANECK, N.J., March 25, 2025 – Cognizant (Nasdaq: CTSH) will today host an Investor Day, beginning at 1:00 p.m. ET. At the event, members of Cognizant’s executive leadership team will outline the Company’s progress against its strategic priorities and unveil its long-term growth strategy. Participants will also have an opportunity to hear from top clients and partners about Cognizant’s differentiated capabilities supporting their AI journeys, and to experience demonstrations of several of Cognizant’s AI-enabled platforms.
“Cognizant is well positioned to lead in the next wave of AI-driven technology transformation,” said CEO Ravi Kumar S. “We have achieved significant progress over the past two years accelerating growth, becoming an employer of choice, and simplifying our operations. We believe we are now poised to build on this momentum and return to the Winner’s Circle. We are confident that Cognizant’s differentiated capabilities and strategic investments in AI and embedded engineering will enhance our ability to capture outsized growth in the expanding IT services market. Investor Day is an important opportunity to share our vision for the future, and how we plan to create long-term shareholder value.”
Kumar added, “Given our confidence in our strategy and future prospects, we are pleased to announce that the Board approved a $2 billion increase to our existing share repurchase authorization, and we now expect to repurchase $1.1 billion of shares in 2025, an increase of $500 million over our prior expectation.”
At today’s event, Cognizant will discuss:
•Management’s strategy to drive a new phase of value creation
oAmplify talent through upskilling initiatives and expanding learning infrastructure
oScale innovation by building platforms and solutions for the AI era
oAccelerate growth by leading in AI/gen AI, growing in priority industries and geographies and strengthening capabilities in high-growth adjacencies
•Significant market opportunity across the three vectors of AI transformation
oVector 1: Enabling hyper-productivity across enterprises
oVector 2: Industrializing AI
oVector 3: Agentifying the enterprise
•Investments in technology, domain expertise, partnerships, talent and operational modernization that position Cognizant to win in an expanding market and drive long-term growth
•Details on Cognizant’s plans to grow market share and return to the Winner’s Circle, including improved relative revenue performance, margin enhancements, and its balanced capital allocation framework, all of which the Company believes will drive shareholder value
Return of Capital to Shareholders
On March 24, 2025, the Board of Directors approved an increase of $2 billion to the amount authorized under the Company’s existing stock repurchase program. With this increase, as of March 24, 2025, there is approximately $3.1 billion remaining under the share repurchase authorization. For 2025, the Company
is increasing its share repurchase expectation by $500 million to $1.1 billion. The Company reiterates its long-term capital allocation framework including the flexibility to pursue strategic acquisitions.
Webcast Information
Visit http://cognizantinvestorday2025.q4ir.com to view an agenda of the day and register to watch the live webcast. A replay of the event, along with investor day materials, will be available on the Company’s Investor Relations website following the conclusion of the event. In-person attendance is by invitation only.
About Cognizant
Cognizant (Nasdaq: CTSH) engineers modern businesses. We help our clients modernize technology, reimagine processes, and transform experiences so they can stay ahead in our fast-changing world. Together, we're improving everyday life. See how at www.cognizant.com or @cognizant.
Forward-Looking Statements
This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which is necessarily subject to risks, uncertainties and assumptions as to future events that may not prove to be accurate. These statements include, but are not limited to, express or implied forward-looking statements relating to our strategy, strategic partnerships and collaborations, competitive position and opportunities in the marketplace, including projected growth in markets, investment in and growth of our business and our capital allocation strategies, the pace and magnitude of change and client needs related to generative AI, the nature and magnitude of our clients’ information technology expenditures, the effectiveness of our recruiting and talent efforts and related costs, labor market trends, the anticipated amount of capital to be returned to shareholders and our anticipated financial performance, matters related to our recent acquisitions and other statements regarding matters that are not historical facts. These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. Factors that could cause actual results to differ materially from those expressed or implied include general economic conditions, the competitive and rapidly changing nature of the markets we compete in, our ability to successfully use AI-based technologies, the competitive marketplace for talent and its impact on employee recruitment and retention, the ultimate benefits of our NextGen program, legal, reputational and financial risks resulting from cyberattacks, changes in governmental policy or the regulatory environment, including with respect to immigration, trade, competition, labor, technology, and taxes or otherwise, and the other factors discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. Cognizant undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.
Exhibit 99.2
Cognizant
About Non-GAAP Financial Measures and Performance Metrics
Non-GAAP Financial Measures
To supplement our financial results presented in accordance with GAAP, this presentation includes references to the following measures defined by the Securities and Exchange Commission as non-GAAP financial measures: Adjusted Operating Margin, free cash flow, constant currency revenue growth, organic constant currency revenue growth and Adjusted Operating Income per employee. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures should be read in conjunction with our financial statements prepared in accordance with GAAP. The reconciliations of our non-GAAP financial measures to the corresponding GAAP measures should be carefully evaluated.
Our non-GAAP financial measures Adjusted Operating Margin and Adjusted Income from Operations excludes unusual items, such as NextGen charges. Free cash flow is defined as cash flows from operating activities net of purchases of property and equipment. Constant currency revenue growth is defined as revenues for a given period restated at the comparative period’s foreign currency exchange rates measured against the comparative period's reported revenues. Organic revenue is defined as revenues for a given period, excluding revenues from acquisitions that were completed in the 12 months preceding the beginning of the reporting period, and organic revenue growth is organic revenue measured against the comparative period's reported revenues. Adjusted Operating Income per employee is defined as Adjusted Income from Operations for a given period divided by the average employee headcount of stated period.
Management believes providing investors with an operating view consistent with how we manage the Company provides enhanced transparency into our operating results. For our internal management reporting and budgeting purposes, we use various GAAP and non-GAAP financial measures for financial and operational decision-making, to evaluate period-to-period comparisons, to determine portions of the compensation for our executive officers and for making comparisons of our operating results to those of our competitors. Accordingly, we believe that the presentation of our non-GAAP measures, which exclude certain costs, when read in conjunction with our reported GAAP results, can provide useful supplemental information to our management and investors regarding financial and business trends relating to our financial condition and results of operations.
A limitation of using non-GAAP financial measures versus financial measures calculated in accordance with GAAP is that non-GAAP financial measures do not reflect all of the amounts associated with our operating results as determined in accordance with GAAP and may exclude costs that are recurring such as our net non-operating foreign currency exchange gains or losses. In addition, other companies may calculate non-GAAP financial measures differently than us, thereby limiting the usefulness of these non-GAAP financial measures as a comparative tool. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from our non-GAAP financial measures to allow investors to evaluate such non-GAAP financial measures.
Performance Metrics
Bookings are defined as total contract value (or TCV) of new contracts, including new contract sales as well as renewals and expansions of existing contracts. Bookings can vary significantly quarter to quarter depending in part on the timing of the signing of a small number of large contracts. Our book-to-bill ratio is defined as bookings for the trailing twelve months divided by revenue for the same period. Measuring bookings involves the use of estimates and judgments and there are no independent standards or requirements governing the calculation of bookings. The extent and timing of conversion of bookings to revenues may be impacted by, among other factors, the types of services and solutions sold, contract duration, the pace of client spending, actual volumes of services delivered as compared to the volumes anticipated at the time of sale, and contract modifications, including terminations, over the lifetime of a contract. The majority of our contracts are terminable by the client on short notice often without penalty, and some without notice. We do not update our bookings for subsequent terminations, reductions or foreign currency exchange rate fluctuations. Information regarding our bookings is not comparable to, nor should it be substituted for, an analysis of our reported revenues. However, management believes that it is a key indicator of potential future revenues and provides a useful indicator of the volume of our business over time.
Reconciliations of Non-GAAP Financial Measures
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (dollars in millions) | | | | | | | | |
| Three Months Ended: | | Full Year: | | |
| | Mar 31, 2023 | | Mar 31, 2024 | | Jun 30, 2024 | | Sep 30, 2024 | | Dec 31, 2024 | | Dec 31, 2023 | | Dec 31, 2024 | | Guidance FY 2025(1) |
| GAAP income from operations | | | | | | | | | | | $ | 2,689 | | | $ | 2,892 | | | |
NextGen charges(a) | | | | | | | | | | | 229 | | | 134 | | | |
| Adjusted Income From Operations | | | | | | | | | | | $ | 2,918 | | | $ | 3,026 | | | |
| | | | | | | | | | | | | | | |
| GAAP operating margin | 14.6 | % | | 14.6 | % | | 14.6 | % | | 14.6 | % | | 14.8 | % | | 13.9 | % | | 14.7 | % | | |
NextGen charges(a) | — | | | 0.5 | | | 0.6 | | | 0.7 | | | 0.9 | | | 1.2 | | | 0.6 | | | — | % |
| Adjusted Operating Margin | 14.6 | % | | 15.1 | % | | 15.2 | % | | 15.3 | % | | 15.7 | % | | 15.1 | % | | 15.3 | % | | 15.5%-15.7% |
(1) A full reconciliation of Adjusted Operating Margin guidance to the corresponding GAAP measure on a forward-looking basis cannot be provided without unreasonable efforts, as we are unable to provide reconciling information with respect to unusual items, and such adjustments may be significant. Guidance range provided on February 5, 2025.
Notes:
(a)NextGen charges include employee separation costs, facility exit costs and third party and other costs. The program concluded on December 31, 2024. The total costs related to the NextGen program are reported in "Restructuring charges" in our unaudited consolidated statements of operations
Reconciliation of Adjusted Operating Income per employee
| | | | | | | | | | | | | | |
| | FY 2023 | | FY 2024 |
| Adjusted income from operations | | $ | 2,918 | M | | $ | 3,026 | M |
| Average employee headcount* | | 351,500 | | | 342,250 | |
| Adjusted Operating Income per employee | | $ | 8,302 | | | $ | 8,841 | |
* We had approximately 355,300, 347,700 and 336,800 employees at the end of 2022, 2023 and 2024, respectively.
Reconciliation of Organic Constant Currency Revenue Growth
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended: |
| | Dec 31, 2023 | | Mar 31, 2024 | | Jun 30, 2024 | | Sep 30, 2024 | | Dec 31, 2024 |
| Reported Revenue Growth | (1.7) | % | | (1.1) | % | | (0.7) | % | | 3.0 | % | | 6.8 | % |
| | | | | | | | | |
| Constant Currency Revenue Growth | (2.4) | % | | (1.2) | % | | (0.5) | % | | 2.7 | % | | 6.7 | % |
Approximate contribution of recently completed acquisitions(a) | 0.9 | % | | 0.7 | % | | 0.6 | % | | 2 | % | | 4.5 | % |
| Approximate Organic Constant Currency Revenue Growth* | (3) | % | | (2) | % | | (1) | % | | 0.5 | % | | 2 | % |
* Amounts do not foot due to rounding
Notes:
(a)Recently completed acquisitions are acquisitions that were completed in the 12 months preceding the beginning of the reporting period.
