Cognizant reports fourth quarter and full-year 2021 results

Cognizant, one of the world’s leading professional services companies, today announced its fourth quarter and full-year 2021 financial results.

“I’m proud of Cognizant’s broad-based progress over the past year. We successfully executed our strategy by meaningfully enhancing our digital portfolio, strengthening our international presence, and helping our clients be successful,” said Brian Humphries, Chief Executive Officer. “We enter 2022 with momentum and confidence that our talented employees position us to capture the substantial market opportunity.”

Fourth Quarter 2021 performance by business segment
Financial services revenue grew 18.5% year-over-year, or 18.8% in constant currency, which included the  2020 Samlink Impact of positive 900 basis points and the benefit of recently completed acquisitions. Both banking and insurance growth improved, driven by demand for digital services. This was partially offset by clients’ continued focus on cost optimization of supporting their legacy systems and operations.²

Healthcare revenue grew 7.9% year-over-year, or 8.2% in constant currency. Revenue growth was led by life sciences, which was driven by increased demand for digital services. Revenue growth among healthcare clients was driven by our integrated software solutions.

Products and resources revenue grew 17.7% year-over-year, or 18.0% in constant currency, which included the benefit of recently completed acquisitions and revenue growth driven by our clients’ adoption of digital technologies. Demand among manufacturing, logistics, energy and utility clients remained strong and we have seen sustained demand throughout 2021 across retail, consumer goods, travel, and hospitality following the negative impact from the pandemic in 2020.

Communications, media and technology
Revenue grew 12.6% year-over-year, or 13.1% in constant currency. Revenue growth included the benefit of recently completed acquisitions and continued strong demand from technology clients.

Bookings
Bookings  grew 22% year-over-year, which resulted in full-year 2021 bookings of $23.1 billion, representing a book-to-bill of approximately 1.2x.

Return of capital to shareholders
During the fourth quarter, the Company repurchased 0.8 million shares for $66 million at an average price of $82.16 under its share repurchase program. As of December 31, 2021, there was $2.1 billion remaining under the current share repurchase authorization. On February 2, 2022, the Company declared a quarterly cash dividend of $0.27 per share, a 12% increase, for shareholders of record on February 18, 2022. This dividend will be payable on March 1, 2022.

“During 2021, we continued to invest in our people and strategic initiatives while navigating the heightened cost pressures driven by the labor supply-demand imbalance,” said Jan Siegmund, Chief Financial Officer. “With $2.7 billion of cash and short-term investments and free cash flow in excess of 100% of net income, we are well-positioned to execute our balanced capital allocation framework, including the third consecutive annual increase of the dividend we announced today.”

First Quarter and Full Year 2022 outlook
The Company provided the following guidance:

• First quarter revenue is expected to be $4.80–$4.84 billion, or growth of 9.0-10.0% (10.2-11.2% in constant currency).
• Full-year 2022 revenue is expected to be $20.0–$20.5 billion, or growth of 7.8%-10.8% (8.5%-11.5% in constant currency).
• Full-year 2022 Adjusted Operating Margin⁴ is expected to expand 20 to 30 basis points to 15.6% to 15.7%.⁴
• Full-year 2022 Adjusted Diluted EPS⁴ is expected to be in the range of $4.46–$4.60.

CT Bureau