Cognizant Files Q3 2024 10-Q

Ticker: CTSH · Form: 10-Q · Filed: Oct 31, 2024 · CIK: 1058290

Cognizant Technology Solutions Corp 10-Q Filing Summary
FieldDetail
CompanyCognizant Technology Solutions Corp (CTSH)
Form Type10-Q
Filed DateOct 31, 2024
Risk Levellow
Pages16
Reading Time19 min
Key Dollar Amounts$0.01
Sentimentneutral

Sentiment: neutral

Topics: 10-Q, financials, quarterly-report

TL;DR

Cognizant's Q3 2024 10-Q is in. Check financials.

AI Summary

Cognizant Technology Solutions Corp. filed its 10-Q for the period ending September 30, 2024. The filing details financial performance and operational updates for the third quarter of 2024. Key financial data and disclosures relevant to investors are presented in this report.

Why It Matters

This filing provides investors with the official financial results and disclosures for Cognizant's third quarter of 2024, crucial for understanding the company's performance and making investment decisions.

Risk Assessment

Risk Level: low — This is a standard quarterly financial filing with no immediate red flags or significant new risks indicated.

Key Numbers

  • 2024 Q3 — Reporting Period (Indicates the specific quarter for which financial information is reported.)
  • 1231 — Fiscal Year End (Specifies the end date of the company's fiscal year.)

Key Players & Entities

  • COGNIZANT TECHNOLOGY SOLUTIONS CORP (company) — Filer
  • 20240930 (date) — Period of Report
  • 20241031 (date) — Filed as of Date
  • TEANECK, NJ 07666 (location) — Business Address

FAQ

What is the primary purpose of this 10-Q filing?

This 10-Q filing provides a comprehensive overview of Cognizant Technology Solutions Corp.'s financial performance and condition for the quarterly period ended September 30, 2024.

What is the filing date and the period of report for this 10-Q?

The filing was made as of October 31, 2024, and it reports on the period ending September 30, 2024.

Where is Cognizant Technology Solutions Corp. headquartered?

Cognizant Technology Solutions Corp.'s business and mail address is listed as 300 Frank W. Burr Blvd., Ste. 36, 6 Fl., Teaneck, NJ 07666.

What is the Standard Industrial Classification (SIC) code for Cognizant?

Cognizant Technology Solutions Corp. is classified under SIC code 7371, which corresponds to Services-Computer Programming Services.

What fiscal year end does Cognizant Technology Solutions Corp. observe?

Cognizant Technology Solutions Corp. observes a fiscal year end on December 31.

Filing Stats: 4,836 words · 19 min read · ~16 pages · Grade level 20 · Accepted 2024-10-30 17:45:06

Key Financial Figures

  • $0.01 — hich registered Class A Common Stock, $0.01 par value per share CTSH The Nasdaq Sto

Filing Documents

FORWARD LOOKING STATEMENTS

FORWARD LOOKING STATEMENTS 2

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION 4

Consolidated Financial Statements (Unaudited)

Item 1. Consolidated Financial Statements (Unaudited) 4 Consolidated Statements of Financial Position (Unaudited) as of Sep tember 30, 2024 and December 31, 2023 4 Consolidated Statements of Operations (Unaudited) for the Three and N i ne Months Ended September 30, 2024 and 2023 5 Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Nine Months Ended September 30 , 2024 and 2023 6 Consolidated Statements of Stockholders' Equity (Unaudited) for the Three Months Ended March 31, 2024 and 2023, June 30, 2024 and 2023, and September 30, 2024 and 2023 7 Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended Sep tember 30, 2024 and 2023 9

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 10

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 27

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 42

Controls and Procedures

Item 4. Controls and Procedures 42

OTHER INFORMATION

PART II. OTHER INFORMATION 43

Legal Proceedings

Item 1. Legal Proceedings 43

Risk Factors

Item 1A. Risk Factors 43

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 43

Other Information

Item 5. Other Information 43

Exhibits

Item 6. Exhibits 44

SIGNATURES

SIGNATURES 45 Table of Contents GLOSSARY Defined Term Definition 10b5-1 Plan Trading plan adopted pursuant to Rule 10b5-1 under the Exchange Act Adjusted Diluted EPS Adjusted diluted earnings per share AI Artificial intelligence ASC Accounting Standards Codification CC Constant Currency CE Continental Europe CITA Commissioner of Income Tax (Appeals) in India CMT Communications, Media and Technology CODM Chief Operating Decision Maker Credit Agreement Credit agreement with a commercial bank syndicate dated April 18, 2024, as amended CTS India Our principal operating subsidiary in India DOJ United States Department of Justice DSO Days Sales Outstanding DTSA Defend Trade Secrets Act EPS Earnings per share ESG Environmental, social and corporate governance EU European Union Exchange Act Securities Exchange Act of 1934, as amended FS Financial Services GAAP Generally Accepted Accounting Principles in the United States of America GenAI Generative artificial intelligence HS Health Sciences High Court Madras, India High Court India Defined Contribution Obligation Certain statutory defined contribution obligations of employees and employers in India IRS Internal Revenue Service ITAT Income Tax Appellate Tribunal in India ITD Indian Income Tax Department NA North America Ninth Circuit United States Court of Appeals for the Ninth Circuit OECD Organization for Economic Cooperation and Development P&R Products & Resources Recently completed acquisitions Acquisitions that were completed in the 12 months preceding the beginning of the reporting period (in order to identify the impact of such acquisitions for the first twelve months of ownership) RoW Rest of World SCI Supreme Court of India SEC United States Securities and Exchange Commission Second Circuit United States Court of Appeals for the Second Circuit SG&A Selling, general and administrative Syntel Syntel Sterling Best Shores Mauritius Ltd. Tax Reform Act Tax

Forward Looking Statements

Forward Looking Statements The statements contained in this Quarterly Report on Form 10-Q that are not historical facts are forward-looking statements (within the meaning of Section 21E of the Exchange Act) that involve risks and uncertainties. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as "believe," "expect," "may," "could," "would," "plan," "intend," "estimate," "predict," "potential," "continue," "should" or "anticipate" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. From time to time, we or our representatives have made or may make forward-looking statements, orally or in writing. Such forward-looking statements may be included in various filings made by us with the SEC, in press releases or in oral statements made by or with the approval of one of our authorized executive officers. These forward-looking statements, such as statements regarding our anticipated future revenues, operating margin, earnings, capital expenditures, impacts to our business, financial results and financial condition as a result of the competitive marketplace for talent and future attrition trends, anticipated effective income tax rate and income tax expense, liquidity, financing strategy, access to capital, capital return strategy, investment strategies, cost management, plans and objectives, including those related to the NextGen program, investment in our business, potential acquisitions, industry trends, client behaviors and trends, the outcome of and costs associated with regulatory and litigation matters, the appropriateness of the accrual related to the India Defined Contribution Obligation, matters related to the Belcan acquisition and other statements regarding matters that are not historical facts, are based on our current expectations, estimates and projections, management's beliefs and certain assumpt

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Consolidated Financial Statements (Unaudited)

Item 1. Consolidated Financial Statements (Unaudited). COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) (in millions, except par values) September 30, 2024 December 31, 2023 Assets Current assets: Cash and cash equivalents $ 2,013 $ 2,621 Short-term investments 12 14 Trade accounts receivable, net 4,206 3,849 Other current assets 1,317 1,022 Total current assets 7,548 7,506 Property and equipment, net 1,001 1,048 Operating lease assets, net 587 611 Goodwill 7,132 6,085 Intangible assets, net 1,681 1,149 Deferred income tax assets, net 1,091 993 Long-term investments 90 435 Other noncurrent assets 1,034 656 Total assets $ 20,164 $ 18,483 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 304 $ 337 Deferred revenue 355 385 Short-term debt 33 33 Operating lease liabilities 192 153 Accrued expenses and other current liabilities 2,504 2,425 Total current liabilities 3,388 3,333 Deferred revenue, noncurrent 28 42 Operating lease liabilities, noncurrent 455 523 Deferred income tax liabilities, net 218 226 Long-term debt 1,183 606 Long-term income taxes payable — 157 Other noncurrent liabilities 440 369 Total liabilities 5,712 5,256 Commitments and contingencies (See Note 12 ) Stockholders' equity: Preferred stock, $ 0.10 par value , 15 shares authorized, none issued — — Class A common stock, $ 0.01 par value, 1,000 shares authorized, 496 and 498 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively 5 5 Additional paid-in capital 58 15 Retained earnings 14,347 13,301 Accumulated other comprehensive income (loss) 42 ( 94 ) Total stockholders' equity 14,452 13,227 Total liabilities and stockholders' equity $ 20,164 $ 18,483 The accompanying notes are an integral part of the unaudited consolidated financial statements. Cognizant Technology Solutions 4 September 30, 2024 Form 10-Q Table of Contents COGNIZANT

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1 — Interim Consolidated Financial Statements The terms "Cognizant," "we," "our," "us" and "the Company" refer to Cognizant Technology Solutions Corporation and its subsidiaries unless the context indicates otherwise. We have prepared the accompanying unaudited consolidated financial statements included herein in accordance with GAAP and the Exchange Act. The accompanying unaudited consolidated financial statements should be read in conjunction w ith our audited consolidated financial statements (and notes thereto) included in our Annual Report on Form 10-K for the year ended December 31, 2023. In our opinion, all adjustments considered necessary for a fair statement of the accompanying unaudited consolidated financial statements have been included and all adjustments are of a normal and recurring nature. Operating results for the interim periods are not necessarily indicative of results that may be expected to occur for the entire year. New Accounting Pronouncements Date Issued and Topic Effective Date Description Impact November 2023 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures Annual period starting in 2024 and interim periods starting in 2025 Retrospective basis The standard requires enhanced segment disclosures but does not change the definition of a segment or the guidance for determining a reportable segment. The amendments require disclosure of significant segment expenses regularly provided to the CODM included within segment operating profit or loss and a description of how the CODM utilizes segment operating profit or loss to assess segment performance and allocate resources. The new standard also allows companies to disclose multiple measures of segment profit or loss if those measures are used to allocate resources. The adoption of the new standard is not expected to have a significant impact on our disclosures. December 2023 Income Taxes (To

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