Yesterday, Cognizant, one of the world’s leading professional services companies announced its fourth-quarter and full-year 2022 financial results.
Key Highlights
- Q4 revenue of $4.8 billion grew 1.3% year-over-year, or 4.1% in constant currency1
- Full-year revenue of $19.4 billion grew 5.0% year-over-year, or 7.5% in constant currency
- Full-year operating cash flow of $2.6 billion and free cash flow1 of $2.2 billion
- $2.0 billion returned to shareholders through share repurchases and dividends in 2022
- Q1 2023 revenue guidance of (1.5%) to (2.5%), or (1.0%) to flat in constant currency
- Cash dividend increased 7% to $0.29 per share for Q1 2023
Headcounts
The company has announced the total headcount at the end of the fourth quarter was 355,300, an increase of 5,900 from Q3 2022 and an increase of 24,700 from Q4 2021.
Attrition
Voluntary attrition, on a quarterly annualized basis, declined to 19% from 29% in Q3 2022 and 31% in Q4 2021. Voluntary attrition, on a trailing-twelve-month basis, declined to 26% from 28% in Q4 2021.
CEO’s Comments
Commenting on the Q4FY22 results, Ravi Kumar S, Chief Executive Officer, Cognizant said, “The trust and longevity that define Cognizant’s strategic partnerships with global clients provide exciting opportunities to further strengthen and grow these relationships as we expand our portfolio of digital services,”
“As I continue to listen and learn, I have been deeply impressed with the knowledge, skills, and motivation of our associates. They are dedicated to helping our clients succeed and are determined to compete and win to expand our global leadership in technology services. My immediate focus is on creating the conditions for our associates to excel and ensuring that all 355,000 of us operate with a growth mindset.” He added
During the fourth quarter, the Company recorded a $59 million impairment of capitalized costs related to a large volume-based contract with a Health Sciences customer. The impairment is principally driven by the Company’s expectation of lower volumes.
This charge negatively impacted each of Q4 2022 GAAP and Adjusted Operating Margin by 120 basis points and each of full-year 2022 GAAP and Adjusted Operating Margin by 30 basis points. Q4 2022 and full-year 2022 GAAP and Adjusted Earnings per share were each negatively impacted by $0.08.
