Q2 2024 Cognizant Technology Solutions Corp Earnings Call Transcript
Key Points
- Cognizant Technology Solutions Corp (CTSH) delivered revenue above the high end of their guidance range, achieving $4.85 billion in Q2 2024.
- The company expanded its adjusted operating margin to 15.2%, an increase of 10 basis points sequentially and 100 basis points year-over-year.
- Cognizant signed 5 large deals each with a total contract value of $100 million or more, indicating strong deal momentum.
- The acquisition of Belcan is expected to expand CTSH's ER&D capabilities and diversify into high-growth aerospace and defense sectors.
- Second quarter bookings grew 5% year-over-year, with a trailing 12-month book-to-bill ratio of 1.4x, indicating strong future revenue visibility.
- The demand environment remains challenging with unchanged client discretionary spending behavior.
- Products and Resources revenue declined approximately 4% year-over-year in constant currency due to ongoing discretionary spending cuts among customers.
- Despite strong execution, the company experienced a sequential decline in headcount, which could impact future project scalability.
- The acquisition of Belcan is expected to provide a 40 basis point margin headwind, indicating potential short-term profitability challenges.
- The company faces competitive pressures in talent acquisition, with higher attrition rates noted in the report.
Ladies and gentlemen, welcome to the Cognizant Technology Solutions second quarter of 2024 earnings conference call. (Operator Instructions) I would now like to turn the conference over to Mr. Tyler Scott, Vice President, Investor Relations. Please go ahead, sir.
Thank you, operator, and good afternoon, everyone. By now, you should have received a copy of the earnings release and the investor supplement for the company's second quarter 2024 results. If you have not, copies are available on our website, cognizant.com. The speakers we have on today's call are Ravi Kumar, Chief Executive Officer; and Jatin Dalal, Chief Financial Officer.
Before we begin, I would like to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements. These statements are subject to the risks and uncertainties as described in the company's earnings release and other filings with the SEC.
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