Cognizant Technology Solutions Corporation (Nasdaq: CTSH) has reported its first quarter 2025 financial results, showcasing robust growth and an optimistic outlook for the year ahead. The company achieved revenue of $5.1 billion, marking a 7.5% year-over-year increase and an impressive 8.2% growth on a constant currency basis. This revenue performance surpassed the high end of the company’s guidance range, reflecting the strength of its business model amid challenging macroeconomic conditions.
Key financial highlights for Q1 2025 include a GAAP operating margin of 16.7%, up 210 basis points year-over-year, and an adjusted operating margin expansion of 40 basis points to 15.5%. Earnings per share (EPS) also rose significantly, with GAAP EPS increasing 22% to \(1.34 and adjusted EPS rising 10% to \)1.23 compared to the same quarter last year. The company reported trailing twelve-month bookings of $26.7 billion, up 3% year-over-year, and demonstrated a strong book-to-bill ratio of approximately 1.3x.
The revenue growth was partially driven by recently completed acquisitions contributing around 400 basis points to the year-over-year increase. Additionally, a gain of $62 million from the sale of an office complex in India positively impacted GAAP operating margin by 120 basis points. Cognizant’s focus on AI-led digital transformation and platform capabilities fueled operational efficiencies and client engagement during a period of economic uncertainty. Ravi Kumar S, CEO, emphasized the company’s strategic positioning: “Our differentiated AI and platform capabilities are helping clients navigate near-term uncertainty while embarking on longer-term AI-led transformation.”
Segment-wise, Health Sciences led growth with a 10.9% year-over-year rise in revenue to $1.57 billion, followed by Products and Resources with 12.8% revenue growth. Financial Services grew by 5.6%, while Communications, Media and Technology saw a slight decline of 2.7%. Geographically, North America accounted for 75.3% of total revenue, growing by 9.5% year-over-year.
From a financial perspective, the company’s Q1 2025 operating margin of 16.7% marks a robust increase from FY 2024 operating margin of 15.16%. Net profit margin also improved to 12.98% in Q1 2025 from 11.35% in FY 2024, underlining improved profitability. The EBITDA margin expanded in Q1 2025 to approximately 17.91%, compared to FY 2024 figures.
Cognizant’s capital return program is notable, with \(364 million returned to shareholders in Q1 2025 via share repurchases and dividends, and plans to return \)1.7 billion during the full year 2025. The company repurchased 2.3 million shares for \(190 million under an ongoing buyback program and declared a quarterly cash dividend of \)0.31 per share payable in May 2025.
The company’s strong operational discipline and strategic direction signal confidence in sustainable growth. CFO Jatin Dalal stated, “Our first quarter performance reflects strong operational rigor in a period of elevated uncertainty. We delivered revenue above the high end of our guidance and expanded adjusted operating margin by 40 basis points year-over-year.”
Cognizant also announced significant client and partnership initiatives, including collaboration with NVIDIA AI technology to accelerate AI adoption across industries, and a new AI-powered dispute management solution developed in partnership with ServiceNow for mid-market banks in North America. Strategic agreements with various global leaders such as Boehringer Ingelheim, Citizens Financial Group, Docusign, and OMRON Corporation further strengthen its portfolio in healthcare, financial services, and automation sectors.
The company’s commitment to innovation and workforce development is highlighted by plans to establish a 14-acre Cognizant Immersive Learning Center in Chennai, India, designed to train 100,000 individuals annually. Furthermore, Cognizant has received multiple recognitions including being named to Fortune’s “America’s Most Innovative Companies 2025” and the “2025 World’s Most Ethical Companies®” list by Ethisphere.
In summary, Cognizant’s Q1 2025 results demonstrate strong financial and operational performance anchored by strategic acquisitions, AI-led transformation, and solid client partnerships. With an optimistic full-year 2025 guidance range of 3.5% to 6.0% constant currency revenue growth and adjusted operating margin expansion targeted at 15.5% to 15.7%, the company is well positioned to capitalize on evolving market opportunities.
For more detailed information, the full 8-K report can be accessed here: Cognizant Q1 2025 Results 8-K.
Tags: Cognizant Q1 2025, AI-led transformation, Revenue Growth Analysis, Financial Services Technology, Strategic Partnerships