Cognizant Technology 2025 Q1 Earnings Revenue Grows 7.5%
Thursday, May 1, 2025 7:18 am ET
27min read CTSH Trend
Revenue
The total revenue for the first quarter of 2025 was $5.12 billion, reflecting a 7.5% increase compared to the same period last year. The Health Sciences segment generated $1.57 billion, demonstrating strong growth, while Financial Services contributed $1.46 billion. Products and Resources saw substantial gains with $1.28 billion in revenue. The Communications, Media, and Technology segment added $804 million, culminating in the total quarterly revenue figure.
Earnings/Net Income
Cognizant Technology's EPS rose 21.8% to $1.34 in 2025 Q1 from $1.10 in 2024 Q1, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $663 million in 2025 Q1, marking 21.4% growth from $546 million in 2024 Q1. The EPS performance reflects solid financial health and operational efficiency.
Price Action
The stock price of cognizant Technology has edged up 1.39% during the latest trading day, has climbed 3.58% during the most recent full trading week, and has dropped 3.07% month-to-date.
Post-Earnings Price Action Review
The analysis of Cognizant Technology's (CTSH) stock price following the earnings report reveals modest short-term impacts. The 3-Day and 10-Day win rates for revenue, net income, and EPS were both 52.38%, while the 30-Day win rate increased to 57.14%. The highest return observed was 4.60% over a 30-day period, with the maximum return day at 74. This indicates some potential for positive gains in the short term following earnings reports, though the overall impact remains modest. The stock's price is more likely to experience fluctuations around earnings release dates, reflecting the market's cautious response to the company's financial disclosures and broader economic conditions.
CEO Commentary
Ravi Kumar, CEO, highlighted that Cognizant started 2025 strongly, with first-quarter revenue of $5.1 billion, reflecting an 8.2% year-over-year growth in constant currency. Key growth drivers included the Belcan acquisition and organic growth in Health Sciences and Financial Services, with the latter seeing a 6.5% increase. Kumar emphasized a focus on AI-driven productivity, stating, "We are building a resilient and durable company." He expressed optimism about their strategic investments in AI and software-led engineering, noting, "Winning requires consistency," and underscored the importance of a diversified portfolio to sustain growth amidst macroeconomic challenges.
Guidance
For Q2 2025, Cognizant expects revenue growth of 5% to 6.5% year-over-year in constant currency. For the entire year, the company anticipates revenue growth of 3.5% to 6% in constant currency, with a projected adjusted EPS range of $4.98 to $5.14, reflecting a year-over-year growth of 5% to 8%. The guidance incorporates potential impacts from the macroeconomic environment, with expectations for margin expansion driven primarily by cost discipline and operational efficiencies.
Additional News
Cognizant Technology recently announced a significant expansion to its share repurchase program, increasing authorization by $2 billion, bringing the total to approximately $3.1 billion. This decision underscores the company's confidence in its financial outlook and commitment to delivering shareholder value. Additionally, Cognizant has inked a strategic partnership with OMRON Corporation to integrate IT and Operational Technology in the manufacturing industry, aiming to enhance efficiency and innovation. The company is also establishing a 14-acre Cognizant Immersive Learning Center at its Siruseri campus in Chennai, India, designed to train 100,000 individuals annually, showcasing Cognizant's dedication to talent development and educational advancement.
Ask Aime: What impact does Cognizant Technology's Q1 earnings report have on its stock price?
