Q3 2023 Earnings Summary
Reported on Jan 4, 2025 (After Market Close)
Pre-Earnings Price$64.96Last close (Nov 1, 2023)
Post-Earnings Price$62.60Open (Nov 2, 2023)
Price Change
$-2.36(-3.63%)
- Cognizant is experiencing strong large deal momentum and bookings, with large deals contributing significantly to the pipeline, indicating robust future revenue growth potential.
- Net Promoter Scores have reached historic highs, reflecting improved client satisfaction and stronger relationships, which positions the company to capture increased discretionary spending when it returns.
- The company is confident in expanding its adjusted operating margin by 20 to 40 basis points next year, demonstrating commitment to improving profitability.
- Uncertainty around discretionary spending recovery: The company acknowledges that discretionary spending has significantly fallen over the last three quarters and remains uncertain about when it will recover, which could impact future revenue growth.
- Economic headwinds may hinder growth: The CEO expressed concerns about the economic environment and overall uncertainty, noting that if these challenges persist into next year, clients may not resume discretionary spending, limiting Cognizant's growth prospects.
- Increased client in-sourcing could reduce demand: Clients are building their own technology capabilities ("technology muscle"), which may reduce demand for Cognizant's outsourcing services, posing a risk to future revenues despite the company's efforts to position itself as a partner in this trend.