Q3 2025 Cognizant Technology Solutions Corp Earnings Call Transcript
Key Points
- Cognizant Technology Solutions Corp (CTSH) reported a 6.5% year-over-year revenue growth in constant currency, reaching $5.4 billion.
- The company signed six large deals with a total contract value (TCV) of $100 million or more, contributing to a 5% increase in trailing 12-month bookings.
- Adjusted operating margin improved by 70 basis points year over year, driven by disciplined expense management and AI-enabled delivery models.
- Revenue per employee rose 8% year over year, while adjusted operating margin income per employee grew 10%, indicating increased productivity.
- Cognizant Technology Solutions Corp (CTSH) is on track to exceed its initial revenue guidance for the year, with expectations to meet the high end of the adjusted operating margin range.
- Despite strong performance, the company faces a complex demand environment and geopolitical uncertainties, impacting client technology investment evaluations.
- Bookings declined by about 5% year over year in the third quarter, indicating some lumpiness in deal closures.
- The company recorded a one-time non-cash income tax expense of $390 million due to changes in US tax policy, impacting reported earnings.
- Voluntary attrition remained at 14.5%, which, although declining, still represents a challenge in retaining talent.
- The integration of Belcan contributed to a reduction in gross margins, highlighting challenges in maintaining profitability amidst acquisitions.
Ladies and gentlemen, welcome to the Cognizant Technology Solutions third quarter 2025 earnings conference call. (Operator Instructions) I would now like to turn the conference over to Mr. Tyler Scott, Vice President, Investor Relations. Please go ahead, sir.
Thank you, operator, and good morning, everyone. Welcome to Cognizant's third quarter 2025 earnings call. I'm joined today by Ravi Kumar, Chief Executive Officer; and Jatin Dalal, Chief Financial Officer.
By now, you should have received a copy of the earnings release and investor supplement for our third quarter results. If you have not, copies are available on our website, cognizant.com. Before we begin, I would like to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements.
These statements are subject to the risks and uncertainties as described in the company's earnings release and other filings with the SEC.
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