Cognizant (Nasdaq: CTSH), one of the world’s leading professional services companies, today announced its fourth quarter and full-year 2022 financial results.
“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,” said Ravi Kumar S, Chief Executive Officer. “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 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.”
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.
Fourth Quarter 2022 Performance by Business Segment
Financial Services revenue declined 4.3% year-over-year, or 1.4% in constant currency, and included a 180 basis point negative impact related to the previously disclosed sale of the Samlink subsidiary (completed February 1, 2022). This was partially offset by growth among public sector clients in the United Kingdom and insurance clients.
Health Sciences revenue grew 4.1% year-over-year, or 5.4% in constant currency. Growth was driven by digital services among pharmaceutical and healthcare payer clients.
Products and Resources revenue grew 2.9% year-over-year, or 6.8% in constant currency, driven by digital services among logistics, automotive, utilities, consumer goods and travel and hospitality clients.
Communications, Media and Technology revenue grew 5.4% year-over-year, or 9.3% in constant currency, driven by strength among digital native companies.
Bookings
Bookings in the fourth quarter grew 12% year-over-year. For the full-year, bookings grew 4% to $24.1 billion, which represented a book-to-bill of approximately 1.2x. Bookings for the fourth quarter and full-year include a 10-year, $1 billion services agreement with CoreLogic signed in December 2022 that extends and expands a partnership established in 2011.
Employee Metrics
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. 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.