TEANECK, N.J. - Cognizant Technology Solutions (NASDAQ:CTSH) Corporation (NASDAQ:CTSH) reported a slight beat on its first quarter earnings and revenue, surpassing analyst expectations.
The professional services company recorded adjusted earnings per share (EPS) of $1.12, marginally higher than the analyst estimate of $1.11. Revenue for the quarter stood at $4.76 billion, exceeding the consensus estimate of $4.72 billion and marking a 1.1% decline from the same quarter last year.
Cognizant's stock rose by 3.99% following the announcement, indicating a positive investor response to the company's earnings and revenue beat.
CEO Ravi Kumar S commented on the quarter's achievements, stating, "During the first quarter, we delivered revenue above the high-end of our guidance range and continued to make progress against our strategic priorities." He highlighted the company's success in signing eight deals with a contract value of at least $100 million each, showcasing Cognizant's ability to secure large projects even in an uncertain economic environment.
For the second quarter of 2024, Cognizant anticipates revenue between $4.75 billion and $4.82 billion, which at the midpoint, is slightly below the consensus estimate of $4.82 billion. For the full year 2024, the company expects adjusted EPS to be in the range of $4.50 to $4.68, with the midpoint below the analyst consensus of $4.62. The full-year revenue guidance is set at $18.9 billion to $19.7 billion, with the midpoint falling below the consensus estimate of $19.42 billion.
Cognizant's Chief Financial Officer, Jatin Dalal, attributed the improved adjusted operating margin, which expanded 50 basis points YoY to 15.1%, to the company's NextGen program, emphasizing operational excellence and cost discipline. He also mentioned the acquisition of Thirdera, a ServiceNow (NYSE:NOW) partner, as a contributor to new growth opportunities.
The company's bookings in the first quarter declined 6% YoY, but on a trailing twelve-month basis, bookings grew 1% YoY to $25.9 billion, representing a book-to-bill ratio of approximately 1.3x. Additionally, Cognizant returned $284 million to shareholders through share repurchases and dividends.
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