Item 16. Form 10-K Summary

None.

Cognizant			46			December 31, 2024 Form 10-K

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
By:						/S/ RAVI KUMAR S
						Ravi Kumar S,
						Chief Executive Officer
						(Principal Executive Officer)
Date:						February 12, 2025

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature						Title						Date
/s/ RAVI KUMAR S						Chief Executive Officer and Director (Principal Executive Officer)						February 12, 2025
Ravi Kumar S
/s/ JATIN DALAL						Chief Financial Officer (Principal Financial Officer)						February 12, 2025
Jatin Dalal
/s/ ROBERT TELESMANIC						Senior Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer)						February 12, 2025
Robert Telesmanic
/s/ STEPHEN J. ROHLEDER						Chair of the Board and Director						February 12, 2025
Stephen J. Rohleder
/s/ ZEIN ABDALLA						Director						February 12, 2025
Zein Abdalla
/s/ VINITA BALI						Director						February 12, 2025
Vinita Bali
/s/ ERIC BRANDERIZ						Director						February 12, 2025
Eric Branderiz
/s/ ARCHANA DESKUS						Director						February 12, 2025
Archana Deskus
/s/ JOHN M. DINEEN						Director						February 12, 2025
John M. Dineen
/s/ LEO S. MACKAY, JR.						Director						February 12, 2025
Leo S. Mackay, Jr.
/s/ MICHAEL PATSALOS-FOX						Director						February 12, 2025
Michael Patsalos-Fox
/s/ ABRAHAM SCHOT						Director						February 12, 2025
Abraham Schot
/s/ KARIMA SILVENT						Director						February 12, 2025
Karima Silvent
/s/ JOSEPH M. VELLI						Director						February 12, 2025
Joseph M. Velli
/s/ SANDRA S. WIJNBERG						Director						February 12, 2025
Sandra S. Wijnberg

Cognizant			47			December 31, 2024 Form 10-K

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

AND FINANCIAL STATEMENT SCHEDULE

						Page
Consolidated Financial Statements:
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 238)									F-2
Consolidated Statements of Financial Position as of December 31, 2024 and 2023									F-4
Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022									F-5
Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023 and 2022									F-6
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024, 2023 and 2022									F-7
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022									F-8
Notes to Consolidated Financial Statements									F-9
Financial Statement Schedule:
Schedule of Valuation and Qualifying Accounts for the years ended December 31, 2024, 2023 and 2022									F-40

Cognizant			F-1			December 31, 2024 Form 10-K

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Cognizant Technology Solutions Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statements of financial position of Cognizant Technology Solutions Corporation and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Belcan from its assessment of internal control over financial reporting as of December 31, 2024 because it was acquired by the Company in a purchase business combination during 2024. We have also excluded Belcan from our audit of internal control over financial reporting. Belcan is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent 7.7% and 1.5%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the

Cognizant			F-2			December 31, 2024 Form 10-K

company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition – Expected Labor Costs to Complete for Certain Fixed-Price Contracts

As described in Notes 1 and 2 to the consolidated financial statements, fixed-price contracts comprised $9.0 billion of the Company’s total revenues for the year ended December 31, 2024, which includes performance obligations where control is transferred over time. For performance obligations where control is transferred over time, revenues are recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based primarily on the nature of the deliverables to be provided. Management recognizes revenues related to fixed-price contracts for application development and systems integration services, consulting or other technology services as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized on the basis of the percentage that each contract’s total labor cost to date bears to the total expected labor costs. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information. Revenues related to fixed-price application maintenance, quality engineering and assurance as well as business process services are recognized based on management’s right to invoice for services performed for contracts in which the invoicing is representative of the value being delivered. If management’s invoicing is not consistent with the value delivered, revenues are recognized as the service is performed based on the cost-to-cost method described above.

The principal considerations for our determination that performing procedures relating to revenue recognition – expected labor costs to complete for certain fixed-price contracts is a critical audit matter are the significant judgment by management when developing the estimated total expected labor costs to complete fixed-price contracts and the significant auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence relating to management’s estimate of total expected labor costs.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the development of the estimated total expected labor costs to complete fixed-price contracts. These procedures also included, among others, evaluating and testing management’s process for developing the estimated total expected labor costs for a sample of contracts, which included evaluating the reasonableness of the total expected labor cost assumptions used by management. Evaluating the reasonableness of the assumptions related to the total expected labor costs involved assessing management’s ability to reasonably develop total expected labor costs by (i) performing a comparison of expected labor cost metrics at project inception with actual cost metrics for similar completed projects and (ii) evaluating the timely identification of circumstances that may warrant a modification to previous labor cost estimates, including actual labor costs in excess of estimates.

/s/ PricewaterhouseCoopers LLP

New York, New York

February 12, 2025

We have served as the Company’s auditor since 1997.

Cognizant			F-3			December 31, 2024 Form 10-K

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

			December 31,
(in millions, except par values)			2024						2023
Assets
Current assets:
Cash and cash equivalents			$	2,231					$	2,621
Short-term investments			12						14
Trade accounts receivable, net			4,059						3,849
Other current assets			1,202						1,022
Total current assets			7,504						7,506
Property and equipment, net			994						1,048
Operating lease assets, net			552						611
Goodwill			6,953						6,085
Intangible assets, net			1,599						1,149
Deferred income tax assets, net			1,248						993
Long-term investments			90						435
Other noncurrent assets			1,026						656
Total assets			$	19,966					$	18,483
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable			$	340					$	337
Deferred revenue			450						385
Short-term debt			33						33
Operating lease liabilities			152						153
Accrued expenses and other current liabilities			2,610						2,425
Total current liabilities			3,585						3,333
Deferred revenue, noncurrent			30						42
Operating lease liabilities, noncurrent			420						523
Deferred income tax liabilities, net			154						226
Long-term debt			875						606
Long-term income taxes payable			—						157
Other noncurrent liabilities			494						369
Total liabilities			5,558						5,256
Commitments and contingencies (See Note 15)
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, 495 and 498 shares issued and outstanding as of December 31, 2024 and 2023, respectively			5						5
Additional paid-in capital			13						15
Retained earnings			14,686						13,301
Accumulated other comprehensive income (loss)			(296)						(94)
Total stockholders’ equity			14,408						13,227
Total liabilities and stockholders’ equity			$	19,966					$	18,483

The accompanying notes are an integral part of the consolidated financial statements.

Cognizant			F-4			December 31, 2024 Form 10-K

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

						Year Ended December 31,
(in millions, except per share data)						2024						2023						2022
Revenues						$	19,736					$	19,353					$	19,428
Operating expenses:
Cost of revenues (exclusive of depreciation and amortization expense shown separately below)						12,958						12,664						12,448
Selling, general and administrative expenses						3,223						3,252						3,443
Restructuring charges						134						229						—
Depreciation and amortization expense						529						519						569
Income from operations						2,892						2,689						2,968
Other income (expense), net:
Interest income						119						126						59
Interest expense						(54)						(41)						(19)
Foreign currency exchange gains (losses), net						(19)						2						7
Other, net						—						11						1
Total other income (expense), net						46						98						48
Income before provision for income taxes						2,938						2,787						3,016
Provision for income taxes						(713)						(668)						(730)
Income (loss) from equity method investments						15						7						4
Net income						$	2,240					$	2,126					$	2,290
Basic earnings per share						$	4.52					$	4.21					$	4.42
Diluted earnings per share						$	4.51					$	4.21					$	4.41
Weighted average number of common shares outstanding—Basic						496						505						518
Dilutive effect of shares issuable under stock-based compensation plans						1						—						1
Weighted average number of common shares outstanding—Diluted						497						505						519

The accompanying notes are an integral part of the consolidated financial statements.

Cognizant			F-5			December 31, 2024 Form 10-K

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

						Year Ended December 31,
(in millions)						2024						2023						2022
Net income						$	2,240					$	2,126					$	2,290
Change in Accumulated other comprehensive income (loss), net of tax:
Foreign currency translation adjustments						(150)						144						(228)
Unrealized gains and losses on cash flow hedges						(35)						61						(108)
Loss on defined benefit plans						(17)						—						—
Other comprehensive income (loss)						(202)						205						(336)
Comprehensive income						$	2,038					$	2,331					$	1,954

The accompanying notes are an integral part of the consolidated financial statements.

Cognizant			F-6			December 31, 2024 Form 10-K

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions, except per share data)						Class A Common Stock												Additional Paid-in Capital						Retained Earnings						Accumulated Other Comprehensive Income (Loss)						Total
			Shares						Amount
Balance, December 31, 2021						525						$	5					$	27					$	11,922					$	37					$	11,991
Net income						—						—						—						2,290						—						2,290
Other comprehensive income (loss)						—						—						—						—						(336)						(336)
Common stock issued, stock-based compensation plans						4						—						86						—						—						86
Stock-based compensation expense						—						—						261						—						—						261
Repurchases of common stock						(20)						—						(359)						(1,059)						—						(1,418)
Dividends declared, $1.08 per share						—						—						—						(565)						—						(565)
Balance, December 31, 2022						509						5						15						12,588						(299)						12,309
Net income						—						—						—						2,126						—						2,126
Other comprehensive income (loss)						—						—						—						—						205						205
Common stock issued, stock-based compensation plans						4						—						71						—						—						71
Stock-based compensation expense						—						—						176						—						—						176
Repurchases of common stock						(15)						—						(247)						(823)						—						(1,070)
Dividends declared, $1.16 per share						—						—						—						(590)						—						(590)
Balance, December 31, 2023						498						5						15						13,301						(94)						13,227
Net income						—						—						—						2,240						—						2,240
Other comprehensive income (loss)						—						—						—						—						(202)						(202)
Common stock issued, stock-based compensation plans						4						—						63						—						—						63
Common stock issued, acquisition related						1						—						113						—						—						113
Stock-based compensation expense						—						—						175						—						—						175
Repurchases of common stock						(8)						—						(353)						(255)						—						(608)
Dividends declared, $1.20 per share						—						—						—						(600)						—						(600)
Balance, December 31, 2024						495						$	5					$	13					$	14,686					$	(296)					$	14,408

The accompanying notes are an integral part of the consolidated financial statements.

Cognizant			F-7			December 31, 2024 Form 10-K

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

			Year Ended December 31,
(in millions)			2024						2023						2022
Cash flows from operating activities:
Net income			$	2,240					$	2,126					$	2,290
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			542						555						569
Deferred income taxes			(355)						(339)						(273)
Stock-based compensation expense			175						176						261
Other, net			32						1						45
Changes in operating assets and liabilities, net of effects of businesses acquired:
Trade accounts receivable			(49)						(43)						(238)
Other current and noncurrent assets			(386)						123						343
Accounts payable			(23)						(23)						(11)
Deferred revenue, current and noncurrent			44						(4)						(26)
Other current and noncurrent liabilities			(96)						(242)						(392)
Net cash provided by operating activities			2,124						2,330						2,568
Cash flows from investing activities:
Purchases of property and equipment			(297)						(317)						(332)
Purchases of available-for-sale investment securities			—						(59)						(1,227)
Proceeds from maturity of available-for-sale investment securities			—						285						1,315
Purchases of held-to-maturity investment securities			—						(3)						(44)
Proceeds from maturity of held-to-maturity investment securities			3						24						54
Purchases of other investments			(2)						(379)						(546)
Proceeds from maturity or sale of other investments			265						527						1,013
Proceeds from sales of businesses			—						—						28
Payments for business combinations, net of cash acquired			(1,615)						(409)						(367)
Net cash (used in) investing activities			(1,646)						(331)						(106)
Cash flows from financing activities:
Issuance of common stock under stock-based compensation plans			63						71						86
Repurchases of common stock			(605)						(1,064)						(1,422)
Repayment of term loan borrowings and earnout obligations and finance leases			(73)						(25)						(686)
Proceeds from borrowings under the revolving credit facility			600						—						—
Repayment of notes outstanding under the revolving credit facility			(300)						—						—
Proceeds from debt refinancing			—						—						650
Debt issuance costs			—						—						(3)
Dividends paid			(600)						(591)						(564)
Net cash (used in) financing activities			(915)						(1,609)						(1,939)
Effect of exchange rate changes on cash, cash equivalents and restricted cash and cash equivalents			(49)						33						(21)
(Decrease) increase in cash, cash equivalents and restricted cash and cash equivalents			(486)						423						502
Cash, cash equivalents and restricted cash, beginning of year			2,717						2,294						1,792
Cash, cash equivalents, and restricted cash and cash equivalents, end of year			$	2,231					$	2,717					$	2,294
Supplemental information:
Cash paid for income taxes during the year			$	1,120					$	1,245					$	813
Cash interest paid during the year			$	53					$	40					$	15

The accompanying notes are an integral part of the consolidated financial statements.

Cognizant			F-8			December 31, 2024 Form 10-K

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except share data)

Note 1 — Business Description and Summary of Significant Accounting Policies

The terms “Cognizant,” “we,” “our,” “us” and “the Company” refer to Cognizant Technology Solutions Corporation and its subsidiaries unless the context indicates otherwise.

Description of Business. We are one of the world’s leading professional services companies, engineering modern businesses and delivering strategic outcomes for our clients. We help clients modernize technology, reimagine processes and transform experiences so they can stay ahead in today's fast-changing world, where AI is beginning to reshape organizations in every field. We provide industry expertise and close client collaboration, combining critical perspective with a flexible engagement style. We tailor our services and solutions to specific industries with an integrated global delivery model that employs client service and delivery teams based at client locations and dedicated global and regional delivery centers. Our collaborative services include digital services and solutions, consulting, application development, systems integration, quality engineering and assurance, engineering research and development, application maintenance, infrastructure and security as well as business process services and automation. Digital, AI-enhanced services continue to be an important part of our portfolio, aligning with our clients' focus on becoming data-enabled, customer-centric and differentiated businesses.

Basis of Presentation, Principles of Consolidation and Use of Estimates. The consolidated financial statements are presented in accordance with GAAP and reflect the consolidated financial position, results of operations, comprehensive income and cash flows of our consolidated subsidiaries for all periods presented. All intercompany balances and transactions have been eliminated in consolidation.

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying disclosures. We evaluate our estimates on a continuous basis. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The actual amounts may vary from the estimates used in the preparation of the accompanying consolidated financial statements.

Cash and Cash Equivalents and Investments. Cash and cash equivalents consist of all cash balances, including money market funds and time deposits that have a maturity, at the date of purchase, of 90 days or less.

We determine the appropriate classification of our investments in marketable securities at the date of purchase and reevaluate such designation at each balance sheet date. We classify and account for our marketable debt securities as either available-for-sale or held-to-maturity. We determine the cost of the securities sold based on the specific identification method. Our held-to-maturity investment securities are financial instruments that we have the intent and ability to hold to maturity and we classify these securities with maturities less than one year as short-term investments. Any held-to-maturity investment securities with maturities beyond one year from the balance sheet date are classified as long-term investments. Held-to-maturity securities are reported at amortized cost. Interest and amortization of premiums and discounts for debt securities are included in interest income.

On initial recognition and on an ongoing basis, we evaluate our held-to-maturity investment securities for expected credit losses collectively when they share similar risk characteristics or individually, when the risk characteristics are different. The allowance for expected credit losses is determined using our historical loss experience. We monitor the credit ratings of the securities in our portfolio to evaluate the need for any changes to the allowance. An increase or a decrease in the allowance for expected credit losses is recorded through income as a credit loss expense or a reversal thereof. The allowance for expected credit losses is presented as a deduction from the amortized cost. A held-to-maturity investment security is written off when deemed uncollectible.

Financial Assets and Liabilities. Cash and certain cash equivalents, time deposits, trade receivables, accounts payable and other accrued liabilities are short-term in nature and, accordingly, their carrying values approximate fair value.

Property and Equipment. Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the term of the lease or the estimated useful life of the asset. Deposits paid towards acquisition of long-lived assets and the cost of assets not put in use by the balance sheet date are disclosed under the caption "Capital work-in-progress" in Note 6.

Cognizant			F-9			December 31, 2024 Form 10-K

Leases. Our lease asset classes primarily consist of operating leases for office space, data centers and IT equipment. At inception of a contract, we determine whether a contract contains a lease, and if a lease is identified, whether it is an operating or finance lease. In determining whether a contract contains a lease we consider whether (1) we have the right to obtain substantially all of the economic benefits from the use of the asset throughout the term of the contract, (2) we have the right to direct how and for what purpose the asset is used throughout the term of the contract and (3) we have the right to operate the asset throughout the term of the contract without the lessor having the right to change the terms of the contract. Some of our lease agreements contain both lease and non-lease components that we account for as a single lease component for all of our lease asset classes.

Our ROU lease assets represent our right to use an underlying asset for the lease term and may include any advance lease payments made and any initial direct costs and exclude lease incentives. Our lease liabilities represent our obligation to make lease payments arising from the terms of the lease. ROU lease assets and lease liabilities are recognized at the commencement of the lease and are calculated using the present value of lease payments over the lease term. Typically, our lease agreements do not provide sufficient detail to determine the rate implicit in the lease. Therefore, we use our estimated country-specific incremental borrowing rate based on information available at the commencement date of the lease to calculate the present value of the lease payments. In estimating our country-specific incremental borrowing rates, we consider market rates of comparable collateralized borrowings for similar terms. Our lease terms may include the option to extend or terminate the lease before the end of the contractual lease term. Our ROU lease assets and lease liabilities include these options when it is reasonably certain that they will be exercised.

A portion of our real estate lease costs is subject to annual changes in the CPI. Changes in CPI subsequent to the lease commencement are treated as variable lease payments and are recognized in the period in which the obligation for those payments is incurred. Other variable lease costs primarily relate to adjustments for common area maintenance, utilities, property tax and lease concessions. These variable costs are recognized in the period in which the obligation is incurred.

We elect not to recognize ROU assets and lease liabilities for short-term leases with a term equal to or less than 12 months. We recognize the lease payments in our income statement on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

Both ROU assets and finance lease assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the related asset group may not be recoverable.

Internal Use Software. We capitalize certain costs that are incurred to purchase, develop and implement internal-use software during the application development phase, which primarily include coding, testing and certain data conversion activities. These capitalized costs are reported in "Property and equipment, net" in our consolidated statements of financial position. Capitalized costs are amortized on a straight-line basis over the useful life of the software. Costs incurred in performing planning and post-implementation activities are expensed as incurred.

Cloud Computing Arrangements. We defer certain implementation costs that are incurred when implementing cloud computing service or software-as-a-service arrangements, which primarily include efforts associated with configuration and development activities. These capitalized costs are reported in "Other current assets" and "Other noncurrent assets" in our consolidated statements of financial position. Once the service is ready for use, deferred costs are expensed over the term of the arrangement and recognized in income from operations.

Software to be Sold, Leased or Marketed. We capitalize costs incurred after technological feasibility is reached but before software is available for general release to clients, which primarily include coding and testing activities. Once the product is ready for general release, capitalized costs are amortized over the useful life of the software.

Business Combinations. We account for business combinations using the acquisition method, which requires the identification of the acquirer, the determination of the acquisition date and the allocation of the purchase price paid by the acquirer to the identifiable tangible and intangible assets acquired, the liabilities assumed, including any contingent consideration and any noncontrolling interest in the acquiree at their acquisition date fair values. Goodwill represents the excess of the purchase price over the fair value of net assets acquired, including the amount assigned to identifiable intangible assets. Identifiable intangible assets with finite lives are amortized over their expected useful lives. Acquisition-related costs are expensed in the periods in which the costs are incurred. The results of operations of acquired businesses are included in our consolidated financial statements from the acquisition date.

Equity Method Investments. Equity investments that give us the ability to exercise significant influence, but not control, over an investee are accounted for using the equity method of accounting and recorded in the caption "Long-term investments" on our consolidated statements of financial position. Equity method investments are initially recorded at cost. We periodically

Cognizant			F-10			December 31, 2024 Form 10-K

review the carrying value of our equity method investments to determine if there has been an other-than-temporary decline in the carrying value. The investment balance is increased to reflect contributions and our share of earnings and decreased to reflect our share of losses, distributions and other-than-temporary impairments. Our proportionate share of the net income or loss of the investee is recorded in the caption "Income (loss) from equity method investments" on our consolidated statements of operations.

Long-lived Assets and Finite-lived Intangible Assets. We review long-lived assets and certain finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. The carrying amount may not be recoverable when the sum of undiscounted expected future cash flows is less than the carrying amount of such asset groups. The impairment loss is determined as the amount by which the carrying amount of the asset group exceeds its fair value. Intangible assets consist primarily of customer relationships and developed technology, which are being amortized on a straight-line basis over their estimated useful lives.

Goodwill and Indefinite-lived Intangible Assets. At each acquisition date, we allocate goodwill and intangible assets to our reporting units based on how we expect each reporting unit to benefit from the respective business combination. Our seven industry-based operating segments are our reporting units. We evaluate goodwill and indefinite-lived intangible assets for impairment at least annually, or as circumstances warrant. Goodwill is evaluated at the reporting unit level by comparing the fair value of the reporting unit with its carrying amount including goodwill. An impairment of goodwill exists if the carrying amount of the reporting unit exceeds its fair value. The impairment loss is the amount by which the carrying amount exceeds the reporting unit’s fair value, limited to the total amount of goodwill allocated to that reporting unit. For indefinite-lived intangible assets, if our qualitative assessment indicates that it is more-likely-than-not that an indefinite-lived intangible asset is impaired, we test the assets for impairment by comparing the fair value of such assets to their carrying value. If an impairment is indicated, a write down to the fair value of indefinite-lived intangible asset is recorded.

Stock Repurchase Program. Under the Board of Directors authorized stock repurchase program, the Company is authorized to repurchase its Class A common stock through open market purchases, including under a 10b5-1 Plan, in accordance with applicable federal securities laws. We account for the repurchased shares as constructively retired. Shares are returned to the status of authorized and unissued shares at the time of repurchase. To reflect share repurchases in the consolidated statements of financial position, we (1) reduce common stock for the par value of the shares, (2) reduce additional paid-in capital for the amount in excess of par during the period in which the shares are repurchased and (3) record any residual amount in excess of available additional paid-in capital as a reduction to retained earnings.

Revenue Recognition. We recognize revenues as we transfer control of deliverables (products, solutions and services) to our clients in an amount reflecting the consideration to which we expect to be entitled. To recognize revenues, we apply the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenues when a performance obligation is satisfied. We account for a contract when it has approval and commitment from all parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectibility of consideration is probable. We apply judgment in determining the customer’s ability and intention to pay based on a variety of factors including the customer’s historical payment experience.

For performance obligations where control is transferred over time, revenues are recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based primarily on the nature of the deliverables to be provided.

Revenues related to fixed-price contracts for application development and systems integration services, consulting or other technology services are recognized as the service is performed using the cost-to-cost method, under which the total value of revenues is recognized on the basis of the percentage that each contract’s total labor cost to date bears to the total expected labor costs. Revenues related to fixed-price application maintenance, quality engineering and assurance as well as business process services are recognized based on our right to invoice for services performed for contracts in which the invoicing is representative of the value being delivered. If our invoicing is not consistent with the value delivered, revenues are recognized as the service is performed based on the cost-to-cost method described above. The cost-to-cost method requires estimation of future costs, which is updated as the project progresses to reflect the latest available information. Such estimates and changes in estimates involve the use of judgment. The cumulative impact of any revision in estimates is reflected in the financial reporting period in which the change in estimate becomes known and any anticipated losses on contracts are recognized immediately, where appropriate.

Revenues related to fixed-price hosting and infrastructure and security services are recognized based on our right to invoice for services performed for contracts in which the invoicing is representative of the value being delivered. If our invoicing is not consistent with the value delivered, revenues are recognized on a straight-line basis unless revenues are earned

Cognizant			F-11			December 31, 2024 Form 10-K

and obligations are fulfilled in a different pattern. The revenue recognition method applied to the types of contracts described above provides the most faithful depiction of performance towards satisfaction of our performance obligations; for example, the cost-to-cost method is used when the value of services provided to the customer is best represented by the costs expended to deliver those services.

Revenues related to our time-and-materials, transaction-based or volume-based contracts are recognized over the period the services are provided either using an output method such as labor hours, or a method that is otherwise consistent with the way in which value is delivered to the customer.

Revenues related to our non-hosted software license arrangements that do not require significant modification or customization of the underlying software are recognized when the software is delivered as control is transferred at a point in time. For software license arrangements that require significant functionality enhancements or modification of the software, revenues for the software license and related services are recognized as the services are performed in accordance with the methods applicable to application development and systems integration services described above. In software hosting arrangements, the rights provided to the customer, such as ownership of a license, contract termination provisions and the feasibility of the client to operate the software, are considered in determining whether the arrangement includes a license or a service. Sales and usage-based fees promised in exchange for licenses of intellectual property are not recognized as revenue until the uncertainty related to the variable amounts is resolved. Revenues related to software maintenance and support are recognized on a straight-line basis over the contract period.

Incentive revenues, volume discounts, or any other form of variable consideration is estimated using either the sum of probability weighted amounts in a range of possible consideration amounts (expected value) or the single most likely amount in a range of possible consideration amounts (most likely amount), depending on which method better predicts the amount of consideration to which we may be entitled. We include in the transaction price variable consideration only to the extent it is probable that a significant reversal of revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether and when to include estimated amounts in the transaction price may involve judgment and are based largely on an assessment of our anticipated performance and all information that is reasonably available to us.

Revenues also include the reimbursement of out-of-pocket expenses. Our warranties generally provide a customer with assurance that the related deliverable will function as the parties intended because it complies with agreed-upon specifications and are therefore not considered an additional performance obligation in the contract.

We enter into arrangements that consist of multiple performance obligations. Such arrangements may include any combination of our deliverables. To the extent a contract includes multiple promised deliverables, we apply judgment to determine whether promised deliverables are capable of being distinct and are distinct in the context of the contract. If these criteria are not met, the promised deliverables are accounted for as a combined performance obligation. For arrangements with multiple distinct performance obligations, we allocate consideration among the performance obligations based on their relative standalone selling price. Standalone selling price is the price at which we would sell a promised good or service separately to the customer. When not directly observable, we typically estimate standalone selling price by using the expected cost plus margin or, in limited circumstances, the residual value approach. We typically establish a standalone selling price range for our deliverables, which is reassessed on a periodic basis or when facts and circumstances change.

We assess the timing of the transfer of goods or services to the customer as compared to the timing of payments to determine whether a significant financing component exists. As a practical expedient, we do not assess the existence of a significant financing component when the difference between payment and transfer of deliverables is a year or less. If the difference in timing arises for reasons other than the provision of finance to either the customer or us, no financing component is deemed to exist. The primary purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our services, not to receive or provide financing from or to customers. We do not consider set up or transition fees paid upfront by our customers to represent a financing component, as such fees are required to encourage customer commitment to the project and protect us from early termination of the contract.

Our contracts may be modified to add, remove or change existing performance obligations. The accounting for modifications to our contracts involves assessing whether the services added to an existing contract are distinct and whether the pricing is at the standalone selling price. Services added that are not distinct are accounted for on a cumulative catch up basis, while those that are distinct are accounted for prospectively, either as a separate contract if the additional services are priced at the standalone selling price, or as a termination of the existing contract and creation of a new contract if not priced at the standalone selling price. Services added to our application development and systems integration service contracts are typically

Cognizant			F-12			December 31, 2024 Form 10-K

not distinct, while services added to our other contracts, including application maintenance, quality engineering and assurance as well as business process services contracts, are typically distinct.

We enter into arrangements with third party suppliers to resell products or services. In such cases, we evaluate whether we are the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis). In doing so, we evaluate whether we control the good or service before it is transferred to the customer. If we control the good or service before it is transferred to the customer, we are the principal; if not, we are the agent. Determining whether we control the good or service before it is transferred to the customer requires significant judgment.

Trade Accounts Receivable, Contract Assets and Contract Liabilities. We classify our right to consideration in exchange for deliverables as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional (i.e., only the passage of time is required before payment is due). For example, we recognize a receivable for revenues related to our time and materials and transaction or volume-based contracts when earned regardless of whether amounts have been billed. We present such receivables in "Trade accounts receivable, net" in our consolidated statements of financial position at their net estimated realizable value. A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets are presented in "Other current assets" or "Other noncurrent assets" in our consolidated statements of financial position, based on the expected timing of billing, and primarily relate to unbilled amounts on fixed-price contracts utilizing the cost-to-cost method of revenue recognition. Our contract liabilities, or deferred revenue, consist of advance payments from clients and billings in excess of revenues recognized. We classify deferred revenue as current or noncurrent based on the timing of when we expect to recognize the revenues.

Our contract assets and contract liabilities are reported on a net basis by contract at the end of each reporting period. The difference between the opening and closing balances of our contract assets and contract liabilities primarily results from the timing difference between our performance obligations and the client’s payment. We receive payments from clients based on the terms established in our contracts, which vary from contract to contract.

Allowance for Credit Losses. We calculate expected credit losses for our trade accounts receivable and contract assets. Expected credit losses include losses expected based on known credit issues with specific customers as well as a general expected credit loss allowance based on relevant information, including historical loss rates, current conditions, and reasonable economic forecasts that affect collectibility. We update our allowance for credit losses on a quarterly basis with changes in the allowance recognized in income from operations.

Costs to Fulfill. Recurring operating costs for contracts with customers are recognized as incurred. Certain eligible, nonrecurring costs (i.e., set-up or transition costs) are capitalized when such costs (1) relate directly to the contract, (2) generate or enhance resources of the Company that will be used in satisfying the performance obligation in the future, and (3) are expected to be recovered. These costs are expensed ratably over the estimated life of the customer relationship, including expected contract renewals. In determining the estimated life of the customer relationship, we evaluate the average contract term on a portfolio basis by nature of the services to be provided, and apply judgment in evaluating the rate of technological and industry change. Capitalized amounts are monitored regularly for impairment. Impairment losses are recorded when projected remaining consideration that has not already been recognized as revenue less costs related to the services being provided are not sufficient to recover the carrying amount of the capitalized costs to fulfill. Costs to fulfill are recorded in "Other noncurrent assets" in our consolidated statements of financial position and the amortization expense of costs to fulfill is included in "Cost of revenues" in our consolidated statements of operations.

Stock-Based Compensation. Stock-based compensation expense for awards of equity instruments to employees and non-employee directors is determined based on the grant date fair value of those awards. We recognize these compensation costs net of an estimated forfeiture rate over the requisite service period of the award. Forfeitures are estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from original estimates. Stock-based compensation expense relating to RSUs and PSUs is recognized as shares vest over the requisite service period. If the minimum performance targets are not met, no compensation cost is recognized and any recognized compensation cost is reversed, except for awards subject to a market condition. The fair value of RSUs and PSUs is determined based on the number of stock units granted and the quoted price of our stock at the date of grant. The fair value of PSUs granted subject to a market condition is determined using a Monte Carlo valuation model.

Foreign Currency. The assets and liabilities of our foreign subsidiaries whose functional currency is not the U.S. dollar are translated into U.S. dollars at current exchange rates while revenues and expenses are translated at average monthly exchange rates. The resulting translation adjustments are recorded in the caption "Accumulated other comprehensive income (loss)" on the consolidated statements of financial position.

Foreign currency transactions and balances are those that are denominated in a currency other than the entity’s functional currency. An entity's functional currency is the currency of the primary economic environment in which it operates. The U.S.

Cognizant			F-13			December 31, 2024 Form 10-K

dollar is the functional currency for some of our foreign subsidiaries. For these subsidiaries, transactions and balances denominated in the local currency are foreign currency transactions. Foreign currency transactions and balances related to non-monetary assets and liabilities are remeasured to the functional currency of the entity at historical exchange rates while monetary assets and liabilities are remeasured to the functional currency of the entity at current exchange rates. Foreign currency exchange gains or losses from remeasurement are included in the caption "Foreign currency exchange gain (losses), net" on our consolidated statements of operations together with gains or losses on our undesignated foreign currency hedges.

Derivative Financial Instruments. Derivative financial instruments are recorded on our consolidated statements of financial position as either an asset or liability measured at its fair value as of the reporting date. Our derivative financial instruments consist primarily of foreign exchange forward and option contracts. For derivative financial instruments to qualify for hedge accounting, the following criteria must be met: (1) the hedging instrument must be designated as a hedge; (2) the hedged exposure must be specifically identifiable and must expose us to risk; and (3) it must be expected that a change in fair value of the hedging instrument and an opposite change in the fair value of the hedged exposure will have a high degree of correlation. Changes in our derivatives’ fair values are recognized in net income unless specific hedge accounting and documentation criteria are met (i.e., the instruments are designated and accounted for as hedges). We record the effective portion of the unrealized gains and losses on our derivative financial instruments that are designated as cash flow hedges in the caption "Accumulated other comprehensive income (loss)" in the consolidated statements of financial position. Any ineffectiveness or excluded portion of a designated cash flow hedge is recognized in net income. Upon occurrence of the hedged transaction, the gains and losses on the derivative are recognized in net income.

Defined Benefit Pension Plans. The funded status of the defined benefit pension plans, which is measured as the difference between the projected benefit obligation and the fair value of plan assets, is recognized on the consolidated statement of financial position. The projected benefit obligation is measured annually using actuarial valuation. Net periodic pension cost includes service cost, interest cost, expected return on plan assets, and amortization of gains and losses and prior service costs. Gains and losses and prior service costs are initially recognized as a component of other comprehensive income and subsequently amortized and recognized as a component of net periodic pension cost applying the requirements of applicable accounting guidance. Assumptions used in measuring the benefit obligation and net periodic pension cost, such as discount rates and expected return on plan assets, are reviewed annually and updated as needed.

Nonretirement Post-employment Benefit Plans. The obligation is measured as the undiscounted amount of expected future payments of benefits earned for service to-date adjusted for expected forfeitures.

Income Taxes. We provide for income taxes utilizing the asset and liability method of accounting. Under this method, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each balance sheet date, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. If it is determined that it is more likely than not that future tax benefits associated with a deferred income tax asset will not be realized, a valuation allowance is provided. The effect of a change in tax rates on deferred income tax assets and liabilities is recognized in the provision for income taxes in the period that includes the enactment date.

Our provision for income taxes also includes the impact of reserves established for uncertain income tax positions, as well as the related interest, which may require us to apply judgment to complex issues and may require an extended period of time to resolve. We apply a “more likely than not” threshold when assessing the need for a reserve for an uncertain tax position, which involves significant judgment. Although we believe we have adequately reserved for our uncertain tax positions, no assurance can be given that the final outcome of these matters will not differ from our recorded amounts. We adjust these reserves in light of changing facts and circumstances, such as the closing of a tax audit or the expiration of the applicable statute of limitations. Additionally, we have tax positions that we believe are more likely than not to be realized and for which we have therefore not established a reserve. To the extent that the final outcome of these matters differs from the amounts recorded, such differences may materially impact, positively or negatively, the provision for income taxes in the period in which such determination is made.

Earnings Per Share. Basic EPS is computed by dividing earnings available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS, computed using the treasury stock method, includes all potential dilutive common stock in the weighted average shares outstanding. We excluded less than 1 million of anti-dilutive shares in each of 2024, 2023 and 2022 from our diluted EPS calculation. We include PSUs in the dilutive common shares when they become contingently issuable per the authoritative guidance and exclude them when they are not contingently issuable.

Restructuring Charges. Restructuring charges principally consist of severance and related separation costs, facility exit costs, third party and other costs necessary to the restructuring program. The Company accrues for severance and other related separation costs when it is probable that termination benefits will be paid and the amount is reasonably estimable. Recognition

Cognizant			F-14			December 31, 2024 Form 10-K

of employee severance and other separation costs is also dependent on requirements established by severance policy, statutory laws, or historical experience. Facility exit costs generally reflect the accelerated lease expense for right-of-use assets, expected lease termination costs, and asset impairments in connection with closure of certain sites, net of gains on exit-related disposals. Third party and other costs include certain non-facility related asset impairments and professional services fees directly related to the restructuring program.

Restructuring costs are recorded in “Restructuring charges” in the consolidated statements of operations. The restructuring liability related to accrued employee separation costs is included in "Accrued expenses and other current liabilities" in the consolidated statements of financial position.

Recently Adopted Accounting Pronouncements

Date Issued and Topic			Date Adopted and Method			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 allocating 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 did not have significant impact on our disclosures. See Note 18 for disclosures that reflect the adoption of this standard.

New Accounting Pronouncements

Date Issued and Topic			Effective Date			Description			Impact
December 2023 Income Taxes (Topic 740): Improvements to Income Tax Disclosures			Annual period starting in 2025 Prospective basis			The standard requires enhanced income tax disclosures primarily related to the income tax rate reconciliation and income taxes paid information.			We are currently evaluating the impact of the new standard on our disclosures.
November 2024 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)			Annual period starting in 2027 and interim periods starting in 2028 Prospective basis			The standard is intended to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.			We are currently evaluating the impact of the new standard on our disclosures.

Cognizant			F-15			December 31, 2024 Form 10-K

Note 2 — Revenues

Disaggregation of Revenues

The tables below present disaggregated revenues from contracts with clients by client location, service line and contract type for each of our reportable business segments. We believe this disaggregation best depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected by industry, market and other economic factors. Our consulting and technology services include consulting, application development, systems integration, quality engineering and assurance services as well as software solutions and related services while our outsourcing services include application maintenance, infrastructure and security as well as business process services. Revenues are attributed to geographic regions based upon client location, which is the client's billing address. Substantially all revenues in the North America region relate to clients in the United States.

						Year Ended December 31, 2024
(in millions)						HS						FS						P&R						CMT						Total
Revenues
Geography:
North America						$	5,072					$	4,075					$	3,272					$	2,279					$	14,698
United Kingdom						186						572						558						511						1,827
Continental Europe						559						613						605						155						1,932
Europe - Total						745						1,185						1,163						666						3,759
Rest of World						115						493						347						324						1,279
Total						$	5,932					$	5,753					$	4,782					$	3,269					$	19,736
Service line:
Consulting and technology services						$	3,456					$	4,022					$	3,193					$	1,821					$	12,492
Outsourcing services						2,476						1,731						1,589						1,448						7,244
Total						$	5,932					$	5,753					$	4,782					$	3,269					$	19,736
Type of contract:
Time and materials						$	1,968					$	3,188					$	1,995					$	1,775					$	8,926
Fixed-price						2,878						2,384						2,442						1,324						9,028
Transaction or volume-based						1,086						181						345						170						1,782
Total						$	5,932					$	5,753					$	4,782					$	3,269					$	19,736

Cognizant			F-16			December 31, 2024 Form 10-K

						Year Ended December 31, 2023
(in millions)						HS						FS						P&R						CMT						Total
Revenues
Geography:
North America						$	4,865					$	4,091					$	3,102					$	2,205					$	14,263
United Kingdom						167						613						534						571						1,885
Continental Europe						533						605						612						159						1,909
Europe - Total						700						1,218						1,146						730						3,794
Rest of World						109						500						380						307						1,296
Total						$	5,674					$	5,809					$	4,628					$	3,242					$	19,353
Service line:
Consulting and technology services						$	3,238					$	3,965					$	3,010					$	1,751					$	11,964
Outsourcing services						2,436						1,844						1,618						1,491						7,389
Total						$	5,674					$	5,809					$	4,628					$	3,242					$	19,353
Type of contract:
Time and materials						$	2,004					$	3,215					$	1,837					$	1,832					$	8,888
Fixed-price						2,600						2,369						2,435						1,260						8,664
Transaction or volume-based						1,070						225						356						150						1,801
Total						$	5,674					$	5,809					$	4,628					$	3,242					$	19,353

						Year Ended December 31, 2022
(in millions)						HS						FS						P&R						CMT						Total
Revenues
Geography:
North America						$	4,853					$	4,312					$	3,078					$	2,192					$	14,435
United Kingdom						171						599						521						519						1,810
Continental Europe						483						590						585						137						1,795
Europe - Total						654						1,189						1,106						656						3,605
Rest of World						124						571						382						311						1,388
Total						$	5,631					$	6,072					$	4,566					$	3,159					$	19,428
Service line:
Consulting and technology services						$	3,226					$	4,207					$	3,017					$	1,775					$	12,225
Outsourcing services						2,405						1,865						1,549						1,384						7,203
Total						$	5,631					$	6,072					$	4,566					$	3,159					$	19,428
Type of contract:
Time and materials						$	2,010					$	3,516					$	1,856					$	1,797					$	9,179
Fixed-price						2,471						2,265						2,357						1,206						8,299
Transaction or volume-based						1,150						291						353						156						1,950
Total						$	5,631					$	6,072					$	4,566					$	3,159					$	19,428

Cognizant			F-17			December 31, 2024 Form 10-K

Costs to Fulfill

The following table shows significant movements in the capitalized costs to fulfill:

(in millions)						2024						2023
Beginning balance						$	245					$	265
Costs capitalized						53						67
Amortization expense						(89)						(87)
Ending balance						$	209					$	245

Costs to obtain contracts were immaterial for the periods disclosed.

Contract Balances

The table below shows significant movements in contract assets (current and noncurrent):

(in millions)						2024						2023
Beginning balance						$	316					$	326
Revenues recognized during the period but not billed						358						308
Amounts reclassified to trade accounts receivable						(288)						(327)
Amounts acquired in business combinations						—						9
Ending balance						$	386					$	316

The table below shows significant movements in the deferred revenue balances (current and noncurrent):

(in millions)						2024						2023
Beginning balance						$	427					$	417
Amounts billed but not recognized as revenues						421						406
Revenues recognized related to the beginning balance of deferred revenue						(380)						(409)
Amounts acquired in business combinations						12						13
Ending balance						$	480					$	427

Revenues recognized during the year ended December 31, 2024 for performance obligations satisfied or partially satisfied in previous periods were immaterial.

Remaining Performance Obligations

As of December 31, 2024, the aggregate amount of transaction price allocated to remaining performance obligations, was $4,911 million, of which approximately 35% is expected to be recognized as revenues within 1 year, approximately 55% is expected to be recognized as revenues within 2 years and approximately 90% is expected to be recognized as revenues within 5 years. Disclosure is not required for performance obligations that meet any of the following criteria:

(1)contracts with a duration of one year or less as determined under ASC Topic 606: "Revenue from Contracts with Customers,"

(2)contracts for which we recognize revenues based on the right to invoice for services performed,

(3)variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation in accordance with ASC 606-10-25-14(b), for which the criteria in ASC 606-10-32-40 have been met, or

(4)variable consideration in the form of a sales-based or usage-based royalty promised in exchange for a license of intellectual property.

Many of our performance obligations meet one or more of these exemptions and therefore are not included in the remaining performance obligation amount disclosed above.

Cognizant			F-18			December 31, 2024 Form 10-K

Trade Accounts Receivable and Allowance for Credit Losses

The following table presents the activity in the allowance for credit losses for the trade accounts receivable:

(in millions)						2024						2023						2022
Beginning balance						$	32					$	43					$	50
Credit loss expense (1)						12						12						9
Write-offs charged against the allowance						(18)						(23)						(16)
Ending balance						$	26					$	32					$	43

(1)Reported in "Selling, general and administrative expenses" in our consolidated statements of operations.

Note 3 — Business Combinations

Acquisitions completed during each of the three years ended December 31, 2024, 2023 and 2022 were not individually or in the aggregate material to our operations. Accordingly, pro forma results have not been presented. The primary items that generated goodwill are the acquired assembled workforces and synergies between the acquired companies and us, neither of which qualify as an identifiable intangible asset.

2024

On January 22, 2024, through the execution of a share purchase agreement, we acquired 100% ownership in Thirdera, an Elite ServiceNow Partner specializing in advisory, implementation and optimization solutions related to the ServiceNow platform.

On August 26, 2024, through the execution of a merger agreement, we acquired 100% ownership in Belcan, a leading global supplier of engineering research & development services for the commercial aerospace, defense, space, marine and industrial verticals. We paid $1,195 million in cash, net of cash acquired, and issued 1,470,589 shares of our Class A common stock, valued at $113 million, in connection with our acquisition of Belcan.

The allocations of purchase price to the fair value of the aggregate assets acquired and liabilities assumed were as follows:

(in millions)			Thirdera						Belcan						Total						Weighted Average Useful Life
Cash			$	8					$	55					$	63
Trade accounts receivable			21						173						194
Other current assets			11						22						33
Property and equipment and other noncurrent assets			2						22						24
Operating lease assets			—						55						55
Non-deductible goodwill			180						614						794
Tax-deductible goodwill			164						—						164
Customer relationship assets			73						539						612						11.0 years
Other definite-lived intangible assets			1						—						1						1.0 years
Indefinite-lived intangible assets			—						45						45
Operating lease liabilities, current			—						(8)						(8)
Other current liabilities			(29)						(72)						(101)
Deferred income tax liabilities, net			(3)						(34)						(37)
Operating lease liabilities, noncurrent			—						(48)						(48)
Purchase price			$	428					$	1,363					$	1,791

Goodwill from our acquisition of Thirdera is expected to benefit all of our reportable segments and has been allocated as such. Goodwill from our acquisition of Belcan has been allocated to our Product and Resources segment. For the year ended December 31, 2024, revenues from acquisitions completed in 2024, since the dates of acquisition, were $384 million. The above allocations are preliminary and will be finalized as soon as practicable within the measurement period, but in no event later than one year following the date of acquisition.

Cognizant			F-19			December 31, 2024 Form 10-K

2023

In 2023, we acquired 100% ownership in each of the following:

• Certain net assets of OneSource Virtual, the professional and application management services business of OneSource Virtual, Inc. and OneSource Virtual (UK) Ltd., a leading provider of Workday services, solutions and products, acquired to complement our existing finance and human resources advisory implementation services related to Workday (acquired January 1, 2023), and

• Mobica, an IoT software engineering services provider, acquired to expand our IoT embedded software engineering capabilities (acquired March 10, 2023).

The allocations of purchase price to the fair value of the aggregate assets acquired and liabilities assumed were as follows:

(in millions)			OneSource Virtual						Mobica						Total						Weighted Average Useful Life
Cash			$	—					$	20					$	20
Trade accounts receivable			—						10						10
Other current assets			4						8						12
Property and equipment and other assets			1						6						7
Non-deductible goodwill			18						202						220
Tax-deductible goodwill			88						—						88
Customer relationship assets			11						120						131						10.9 years
Current liabilities			(18)						(9)						(27)
Noncurrent liabilities			(1)						(32)						(33)
Purchase price			$	103					$	325					$	428

For the year ended December 31, 2023, revenues from acquisitions completed in 2023, since the dates of acquisition, were $130 million.

2022

In 2022, we acquired 100% ownership in each of the following:

• AustinCSI, a digital transformation consultancy specializing in enterprise cloud and data analytics advisory services, acquired to complement our technology and industry expertise (acquired December 15, 2022), and

• Utegration, a full service consulting and solutions provider specializing in SAP technology and SAP-certified products for the energy and utilities sectors, acquired to expand and strengthen our industry expertise in our SAP practice (acquired December 19, 2022).

The allocations of purchase price to the fair value of the assets acquired and liabilities assumed were as follows:

(dollars in millions)			AustinCSI						Utegration												Total						Weighted Average Useful Life
Cash			$	—					$	5											$	5
Trade accounts receivable			9						19												28
Property and equipment and other assets			4						6												10
Non-deductible goodwill			—						23												23
Tax-deductible goodwill			83						98												181
Customer relationship assets			69						82												151						12.7 years
Other intangible assets			—						2												2						6.7 years
Current liabilities			(3)						(18)												(21)
Noncurrent liabilities			(1)						(3)												(4)
Purchase price			$	161					$	214											$	375

For the year ended December 31, 2022, revenues from acquisitions completed in 2022, since the dates of acquisition, were immaterial.

Cognizant			F-20			December 31, 2024 Form 10-K

Note 4 — Restructuring Charges

At the end of 2024, we completed our NextGen program, which began in the second quarter of 2023 and was aimed at simplifying our operating model, optimizing corporate functions and consolidating and realigning office space to reflect the post-pandemic hybrid work environment.

The total costs related to our NextGen program are reported in "Restructuring charges" in our consolidated statements of operations. We do not allocate these charges to individual segments in internal management reports used by the CODM. Accordingly, such expenses are separately disclosed in our segment reporting as “unallocated costs.” See Note 18. The costs related to our NextGen program were as follows for the years ended December 31:

(in millions)						2024						2023
Employee separation costs						$	85					$	115
Facility exit costs (1)						36						108
Third party and other costs (2)						13						6
Total restructuring charges						$	134					$	229

(1)For the year ended December 31, 2024, facility exit costs include lease restructuring of $23 million and accelerated depreciation charges of $13 million. For the year ended December 31, 2023, facility exit costs include lease restructuring of $71 million, accelerated depreciation charges of $36 million and impairment of long-lived assets of $1 million.

(2)Third party and other costs include certain non-facility related asset impairments and professional services fees directly related to the NextGen program.

Changes in our accrued employee separation costs included in "Accrued expenses and other current liabilities" in our consolidated statements of financial position are presented in the table below for the years ended December 31:

(in millions)						2024						2023
Beginning balance						$	42					$	—
Employee separation costs accrued						85						115
Payments made						(92)						(73)
Ending balance						$	35					$	42

There were no restructuring charges during 2022.

Note 5 — Investments

Our investments were as follows as of December 31:

(in millions)			2024						2023
Short-term investments:
Equity investment security			$	11					$	11
Held-to-maturity investment securities			—						3
Time deposits			1						—
Total short-term investments			$	12					$	14

Long-term investments:
Other investments			$	90					$	80
Restricted time deposits(1)			—						355
Total long-term investments			$	90					$	435

(1)As of December 31, 2023 the balance of restricted time deposits contained $96 million of restricted cash equivalents. See Note 11.

Equity Investment Security

Our equity investment security is a U.S. dollar denominated investment in a fixed income mutual fund. Realized and unrealized gains and losses were immaterial for each of the years ended December 31, 2024, 2023 and 2022.

Cognizant			F-21			December 31, 2024 Form 10-K

Other Investments

As of December 31, 2024 and 2023, we had an equity method investment of $84 million and $74 million, respectively, in the technology sector. Additionally, as of each of December 31, 2024 and 2023, we had equity securities without a readily determinable fair value of $6 million.

Note 6 — Property and Equipment, net

Property and equipment were as follows as of December 31:

						Estimated Useful Life						2024						2023
						(in years)						(in millions)
Buildings						30						$	736					$	769
Computer equipment						3 – 5						811						794
Computer software						3 – 8						1,024						1,007
Furniture and equipment						5 – 9						716						733
Land												6						7
Capital work-in-progress												115						88
Leasehold improvements						Shorter of the lease term or the life of the asset						373						422
Sub-total												3,781						3,820
Accumulated depreciation and amortization												(2,787)						(2,772)
Property and equipment, net												$	994					$	1,048

Depreciation and amortization expense related to property and equipment was $354 million, $390 million and $385 million for the years ended December 31, 2024, 2023 and 2022, respectively. For the years ended December 31, 2024 and 2023, $13 million and $36 million, respectively, of our depreciation and amortization expense was reported in "Restructuring charges". As of December 31, 2024, we had $9 million of physical assets held for sale reported in "Other current assets". We had no assets held for sale as of December 31, 2023.

The gross amount of property and equipment recorded under finance leases was $30 million and $25 million as of December 31, 2024 and 2023, respectively. Accumulated amortization for our ROU finance lease assets was $16 million and $13 million as of December 31, 2024 and 2023, respectively. Amortization expense related to our ROU finance lease assets was $5 million, $4 million and $4 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The gross amount of property and equipment recorded for software to be sold, leased or marketed reported in the caption "Computer software" above was $338 million and $279 million as of December 31, 2024 and 2023, respectively. Accumulated amortization for software to be sold, leased or marketed was $210 million and $177 million as of December 31, 2024 and 2023, respectively. Amortization expense for software to be sold, leased or marketed recorded as property and equipment was $36 million, $37 million, and $37 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Cognizant			F-22			December 31, 2024 Form 10-K

Note 7 — Leases

The following table provides information on the components of our operating and finance leases included in our consolidated statement of financial position as of December 31:

Leases						Location on Statement of Financial Position						2024						2023
Assets												(in millions)
ROU operating lease assets						Operating lease assets, net						$	552					$	611
ROU finance lease assets						Property and equipment, net						14						12
						Total						$	566					$	623
Liabilities
Current
Operating lease						Operating lease liabilities						$	152					$	153
Finance lease						Accrued expenses and other current liabilities						8						8
Noncurrent
Operating lease						Operating lease liabilities, noncurrent						420						523
Finance lease						Other noncurrent liabilities						15						16
						Total						$	595					$	700

For the years ended December 31, 2024, 2023 and 2022, our operating lease costs were $216 million, $304 million and $256 million, respectively, including variable lease costs of $23 million, $21 million and $17 million, respectively. Our short-term lease rental expense was $11 million, $15 million and $21 million for the years ended December 31, 2024, 2023 and 2022, respectively. Lease interest expense related to our finance leases for each of the years ended December 31, 2024, 2023 and 2022 was immaterial.

The following table provides information on the weighted average remaining lease term and weighted average discount rate for our operating leases as of December 31:

Operating Lease Term and Discount Rate						2024						2023
Weighted average remaining lease term						5.3 years						5.6 years
Weighted average discount rate						5.5		%				5.4		%

The following table provides supplemental cash flow and non-cash information related to our operating leases for the years ended December 31:

(in millions)			2024						2023						2022
Cash paid for amounts included in the measurement of operating lease liabilities			$	251					$	240					$	241
ROU assets obtained in exchange for operating lease liabilities			123						86						164
Reduction of ROU assets and lease liabilities as a result of our NextGen program			(62)						(110)						—

Cash paid for amounts included in the measurement of finance lease liabilities and ROU assets obtained in exchange for finance lease liabilities were each immaterial for each of the years ended December 31, 2024, 2023 and 2022.

The following table provides the schedule of maturities of our operating lease liabilities and a reconciliation of the undiscounted cash flows to the operating lease liabilities recognized in the statement of financial position as of December 31:

(in millions)						2024
2025						$	179
2026						138
2027						110
2028						84
2029						50
Thereafter						98
Total operating lease payments						659
Interest						(87)
Total operating lease liabilities						$	572

Cognizant			F-23			December 31, 2024 Form 10-K

As of December 31, 2024, additional obligations related to operating leases whose lease term had yet to commence were immaterial.

Note 8 — Goodwill and Intangible Assets, net

Changes in goodwill by our reportable business segments were as follows for the years ended December 31, 2024 and 2023:

(in millions)						January 1, 2024						Goodwill Additions						Foreign Currency Translation Adjustments						December 31, 2024
Health Sciences						$	2,840					$	68					$	(13)					$	2,895
Financial Services						1,109						48						(28)						1,129
Products and Resources						1,217						698						(31)						1,884
Communications, Media and Technology						919						144						(18)						1,045
Total goodwill						$	6,085					$	958					$	(90)					$	6,953

(in millions)						January 1, 2023						Goodwill Additions and Adjustments						Foreign Currency Translation Adjustments												December 31, 2023
Health Sciences						$	2,819					$	15					$	6											$	2,840
Financial Services						1,073						19						17												1,109
Products and Resources						1,062						137						18												1,217
Communications, Media and Technology						756						148						15												919
Total goodwill						$	5,710					$	319					$	56											$	6,085

Based on our most recent goodwill impairment assessment performed as of October 31, 2024, we concluded that the goodwill in each of our reporting units was not at risk of impairment. We have not recognized any impairment losses on our goodwill.

Components of intangible assets were as follows as of December 31:

						2024																		2023
(in millions)						Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount						Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount
Customer relationships						$	2,534					$	(1,068)					$	1,466					$	1,956					$	(902)					$	1,054
Developed technology						384						(379)						5						384						(376)						8
Indefinite lived trademarks						116						—						116						72						—						72
Finite lived trademarks and other						81						(69)						12						82						(67)						15
Total intangible assets						$	3,115					$	(1,516)					$	1,599					$	2,494					$	(1,345)					$	1,149

Other than certain trademarks with indefinite lives, our intangible assets have finite lives and, as such, are subject to amortization. Amortization of intangible assets totaled $188 million, $165 million and $184 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The following table provides the estimated amortization expense related to our existing intangible assets for the next five years.

(in millions)						Estimated Amortization
2025						$	214
2026						211
2027						203
2028						182
2029						165

Cognizant			F-24			December 31, 2024 Form 10-K

Note 9 — Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities were as follows as of December 31:

(in millions)			2024						2023
Compensation and benefits			$	1,499					$	1,511
Customer volume and other incentives			247						241
Income taxes			100						27
Professional fees			171						146
Other			593						500
Total accrued expenses and other current liabilities			$	2,610					$	2,425

Note 10 — Debt

We entered into the Credit Agreement providing for a $650 million Term Loan and a $1,850 million unsecured revolving credit facility, which are each due to mature in October 2027. We are required under the Credit Agreement to make scheduled quarterly principal payments on the Term Loan. During the third quarter of 2024, we borrowed $600 million under our revolving credit facility to partially fund the acquisition of Belcan. We repaid $300 million during the fourth quarter of 2024, leaving $300 million of notes outstanding under the revolving credit facility as of December 31, 2024.

The Credit Agreement requires interest to be paid, at our option, at either the Term Benchmark, Adjusted Daily Simple RFR or the ABR Rate (each as defined in the Credit Agreement), plus, in each case, an Applicable Margin (as defined in the Credit Agreement). Initially, the Applicable Margin is 0.875% with respect to Term Benchmark loans and RFR loans and 0.00% with respect to ABR loans. Subsequently, the Applicable Margin with respect to Term Benchmark loans and RFR loans will be determined quarterly and may range from 0.75% to 1.125%, depending on our public debt ratings or, if we have not received public debt ratings, from 0.875% to 1.125%, depending on our Leverage Ratio, which is the ratio of indebtedness for borrowed money to Consolidated EBITDA, as defined in the Credit Agreement. Since issuance of the Term Loan, the Term Loan has been a Term Benchmark loan. The Credit Agreement contains customary affirmative and negative covenants as well as a financial covenant. The financial covenant is tested at the end of each fiscal quarter and requires us to maintain a Leverage Ratio not in excess of 3.50:1.00, or for a period of up to four quarters following certain material acquisitions, 3.75:1.00. We were in compliance with all debt covenants and representations of the Credit Agreement as of December 31, 2024.

Short-term Debt

As of each of December 31, 2024 and 2023, we had $33 million of short-term debt related to current maturities of our Term Loan, with a weighted average interest rate of 5.3% and 6.3%, respectively.

Long-term Debt

The following table summarizes the long-term debt balances as of December 31:

(in millions)						2024						2023
Notes outstanding under revolving credit facility						$	300					$	—
Term Loan						610						642
Less:
Current maturities - Term Loan						(33)						(33)
Unamortized deferred financing costs						(2)						(3)
Long-term debt, net of current maturities						$	875					$	606

The carrying value of our debt approximated its fair value as of each of December 31, 2024 and 2023.

The following represents the schedule of maturities of our Term Loan:

Year						Amounts (in millions)
2025						$	33
2026						33
2027						544
Total						$	610

Cognizant			F-25			December 31, 2024 Form 10-K

Note 11 — Income Taxes

Income before provision for income taxes shown below is based on the geographic location to which such income was attributed for years ended December 31:

(in millions)						2024						2023						2022
United States						$	906					$	813					$	975
Foreign						2,032						1,974						2,041
Income before provision for income taxes						$	2,938					$	2,787					$	3,016

The provision for income taxes consisted of the following components for the years ended December 31:

(in millions)						2024						2023						2022
Current:
Federal and state						$	426					$	522					$	492
Foreign						642						485						511
Total current provision						1,068						1,007						1,003
Deferred:
Federal and state						(229)						(354)						(240)
Foreign						(126)						15						(33)
Total deferred income tax (benefit)						(355)						(339)						(273)
Total provision for income taxes						$	713					$	668					$	730

We are involved in two separate ongoing disputes with the ITD in connection with previously disclosed share repurchase transactions undertaken by CTS India in 2013 and 2016 to repurchase shares from its shareholders (non-Indian Cognizant entities) valued at $523 million and $2.8 billion, respectively.

The 2016 transaction was undertaken pursuant to a plan approved by the High Court in Chennai, India, and resulted in the payment of $135 million in Indian income taxes - an amount we believe includes all the applicable taxes owed for this transaction under Indian law. In March 2018, the ITD asserted that it is owed an additional 33 billion Indian rupees ($386 million at the December 31, 2024 exchange rate) on the 2016 transaction. We deposited 5 billion Indian rupees, representing 15% of the disputed tax amount related to the 2016 transaction, with the ITD. Additionally, certain time deposits of CTS India were placed under lien in favor of the ITD, representing the remainder of the disputed tax amount. As of December 31, 2023, the balance of deposits under lien was 30 billion Indian rupees, including previously earned interest, or $355 million, was presented in "Long-term investments."

In April 2020, we received a formal assessment from the ITD on the 2016 transaction, which is consistent with the ITD's previous assertions. Our appeal was ruled on unfavorably by the CITA in March 2022 and by the ITAT in September 2023. We filed an appeal against the order of the ITAT with the High Court. On January 8, 2024, the SCI ruled that, in order to proceed with the appeal, we must deposit 30 billion Indian rupees, representing the time deposits of CTS India under lien, on the condition that, if CTS India prevails at the High Court, the amount deposited will be returned to CTS India, along with interest accrued, within four weeks of the judgment. We made the required deposit in January 2024 and, in April 2024, the case commenced before the High Court.

As of December 31, 2024 and 2023, the deposit with the ITD was $403 million and $60 million, respectively at December 31, 2024 and 2023 exchange rates, respectively presented in "Other noncurrent assets". As of December 31, 2023, $96 million of the $355 million in deposits under lien were held in time deposits with a maturity of less than 30 days qualifying as cash equivalent instruments and thus were considered restricted cash equivalents as of December 31, 2023.

The dispute in relation to the 2013 share repurchase transaction is also in litigation. At this time, the ITD has not made specific demands with regards to the 2013 transaction.

We continue to believe we have paid all applicable taxes owed on both the 2016 and the 2013 transactions and we continue to defend our positions with respect to both matters. Accordingly, we have not recorded any reserves for these matters as of December 31, 2024.

Cognizant			F-26			December 31, 2024 Form 10-K

The reconciliation between the U.S. federal statutory rate and our effective income tax rate were as follows for the years ended December 31:

(Dollars in millions)						2024						%						2023						%						2022						%
Tax expense, at U.S. federal statutory rate						$	617					21.0						$	585					21.0						$	633					21.0
State and local income taxes, net of federal benefit						74						2.5						55						2.0						63						2.1
Non-taxable income for Indian tax purposes						—						—						—						—						(6)						(0.2)
Rate differential on foreign earnings						104						3.5						95						3.4						98						3.2
Recognition of benefits related to uncertain tax positions						(15)						(0.5)						(33)						(1.2)						(43)						(1.4)
Credits and other incentives						(57)						(1.9)						(37)						(1.3)						(17)						(0.6)
Other						(10)						(0.3)						3						0.1						2						0.1
Total provision for income taxes						$	713					24.3						$	668					24.0						$	730					24.2

The significant components of deferred income tax assets and liabilities recorded on the consolidated statements of financial position were as follows as of December 31:

(in millions)						2024						2023
Deferred income tax assets:
Net operating losses						$	50					$	52
Revenue recognition (including intercompany revenue)						51						126
Compensation and benefits						164						172
Credit carryforwards						11						16
Expenses not currently deductible						1,189						672
						1,465						1,038
Less: valuation allowance						(48)						(53)
Deferred income tax assets, net						1,417						985
Deferred income tax liabilities:
Depreciation and amortization						298						184
Deferred costs						24						31
Other						1						3
Deferred income tax liabilities						323						218
Net deferred income tax assets						$	1,094					$	767

At December 31, 2024, we had foreign and U.S. net operating loss carryforwards of approximately $131 million and $83 million, respectively. We have recorded valuation allowances on certain net operating loss carryforwards.

We conduct business globally and file income tax returns in the United States, including federal and state, as well as various foreign jurisdictions. Tax years that remain subject to examination by the IRS are 2019 and onward, and years that remain subject to examination by state authorities vary by state. Years under examination by foreign tax authorities are 2003 and onward. In addition, transactions between our affiliated entities are arranged in accordance with applicable transfer pricing laws, regulations and relevant guidelines. As a result, and due to the interpretive nature of certain aspects of these laws and guidelines, we have pending applications for APAs before the taxing authorities in some of our most significant jurisdictions.

Cognizant			F-27			December 31, 2024 Form 10-K

Changes in unrecognized income tax benefits were as follows for the years ended December 31:

(in millions)						2024						2023						2022
Balance, beginning of year						$	260					$	269					$	194
Additions based on tax positions related to the current year						15						31						53
Additions for tax positions of prior years						65						22						65
Reductions for tax positions due to lapse of statutes of limitations						(15)						(15)						(43)
Reductions for tax positions related to prior years						(6)						(33)						—
Settlements						—						(14)						—
Balance, end of year						$	319					$	260					$	269

In the third quarter of 2022, we recognized an income tax benefit of $36 million related to a specific uncertain tax position that was previously unrecognized in our prior year consolidated financial statements. The recognition of the benefit in the third quarter of 2022 was based on management’s reassessment regarding whether this unrecognized tax benefit met the more-likely-than-not threshold in light of the lapse in the statute of limitations as to a portion of such benefit.

The unrecognized income tax benefits would affect our effective income tax rate, if recognized. While the Company believes uncertain tax positions may be settled or resolved within the next twelve months, it is difficult to estimate the specific timing or the income tax impact of these potential resolutions at this time. We recognize accrued interest and any penalties associated with uncertain tax positions as part of our provision for income taxes. The total amount of accrued net interest and penalties was $35 million and $33 million as of December 31, 2024 and 2023, respectively, and related to U.S. and foreign tax matters. The total amount of net interest and penalties recorded in the provision for income taxes in each of 2024, 2023 and 2022 was immaterial.

Cognizant			F-28			December 31, 2024 Form 10-K

Note 12 — Derivative Financial Instruments

In the normal course of business, we use foreign exchange forward and option contracts to manage foreign currency exchange rate risk. Derivatives may give rise to credit risk from the possible non-performance by counterparties. Credit risk is limited to the fair value of those contracts that are favorable to us. We have limited our credit risk by limiting the amount of credit exposure with any one financial institution and conducting ongoing evaluation of the creditworthiness of the financial institutions with which we do business. In addition, all the assets and liabilities related to the foreign exchange derivative contracts set forth in the table below are subject to master netting arrangements, such as the International Swaps and Derivatives Association Master Agreement, with each individual counterparty. These master netting arrangements generally provide for net settlement of all outstanding contracts with the counterparty in the case of an event of default or a termination event. We have presented all the assets and liabilities related to the foreign exchange derivative contracts, as applicable, on a gross basis, with no offsets, in our consolidated statements of financial position. There is no financial collateral (including cash collateral) posted or received by us related to the foreign exchange derivative contracts.

The following table provides information on the location and fair values of derivative financial instruments included in our consolidated statements of financial position as of December 31:

(in millions)												2024												2023
Designation of Derivatives						Location on Statement of Financial Position						Assets						Liabilities						Assets						Liabilities
Foreign exchange forward and option contracts – Designated as cash flow hedging instruments						Other current assets						$	1					$	—					$	14					$	—
						Other noncurrent assets						—						—						5						—
						Accrued expenses and other current liabilities						—						22						—						5
						Other noncurrent liabilities						—						13						—						1
						Total						1						35						19						6
Foreign exchange forward contracts - Not designated as hedging instruments						Other current assets						1						—						1						—
						Accrued expenses and other current liabilities						—						2						—						9
						Total						1						2						1						9
Total												$	2					$	37					$	20					$	15

Cash Flow Hedges

We have entered and continue to enter into a series of foreign exchange derivative contracts that are designated as cash flow hedges of Indian rupee denominated payments in India. These contracts are intended to partially offset the impact of movement of the Indian rupee against the U.S. dollar on future operating costs and are scheduled to mature each month during 2025 and 2026. The changes in fair value of these contracts are initially reported in "Accumulated other comprehensive income (loss)" in our consolidated statements of financial position and are subsequently reclassified to earnings within "Cost of revenues" and "Selling, general and administrative expenses" in our consolidated statements of operations in the same period that the forecasted Indian rupee denominated payments are recorded in earnings. As of December 31, 2024, we estimate that $16 million, net of tax, of net losses related to derivatives designated as cash flow hedges reported in "Accumulated other comprehensive income (loss)" in our consolidated statements of financial position is expected to be reclassified into earnings within the next 12 months.

The notional value of the outstanding contracts by year of maturity was as follows as of December 31:

(in millions)			2024						2023
2024			$	—					$	1,878
2025			2,010						1,020
2026			920						—
Total notional value of contracts outstanding (1)			$	2,930					$	2,898

(1)Includes $45 million notional value of option contracts as of December 31, 2023, with the remaining notional value related to forward contracts. There were no option contracts outstanding as of December 31, 2024.

Cognizant			F-29			December 31, 2024 Form 10-K

The following table provides information on the location and amounts of pre-tax gains and losses on our cash flow hedges for the year ended December 31:

(in millions)			Change in Derivative Gains and Losses Recognized in Accumulated Other Comprehensive Income (Loss) (effective portion)												Location of Net Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (effective portion)						Net Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (effective portion)
			2024						2023												2024						2023
Foreign exchange forward and option contracts – Designated as cash flow hedging instruments			$	(35)					$	55					Cost of revenues						$	11					$	(23)
															SG&A expenses						1						(3)
															Total						$	12					$	(26)

The activity related to the change in net unrealized gains and losses on the cash flow hedges included in "Accumulated other comprehensive income (loss)" in our consolidated statements of stockholders' equity is presented in Note 14.

Other Derivatives

We use foreign exchange forward contracts to provide an economic hedge against balance sheet exposures to certain monetary assets and liabilities denominated in currencies other than the functional currency of our foreign subsidiaries. We entered into foreign exchange forward contracts that are scheduled to mature in the first quarter of 2025. Realized gains or losses and changes in the estimated fair value of these derivative financial instruments are recorded in the caption "Foreign currency exchange gains (losses), net" in our consolidated statements of operations.

Additional information related to the outstanding foreign exchange forward contracts not designated as hedging instruments was as follows as of December 31:

(in millions)			2024												2023
			Notional						Fair Value						Notional						Fair Value
Contracts outstanding			$	489					$	(1)					$	1,317					$	(8)

The following table provides information on the location and amounts of realized and unrealized pre-tax gains and losses on the other derivative financial instruments for the year ended December 31:

(in millions)						Location of Net Gain (Losses) on Derivative Instruments						Amount of Net Gains (Losses) on Derivative Instruments
												2024						2023
Foreign exchange forward contracts - Not designated as hedging instruments						Foreign currency exchange gains (losses), net						$	10					$	(40)

The related cash flow impacts of all the derivative activities are reflected as cash flows from operating activities.

Note 13 — Fair Value Measurements

We measure our cash equivalents, certain investments, contingent consideration liabilities and foreign exchange forward and option contracts at fair value. Fair value is the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions.

Cognizant			F-30			December 31, 2024 Form 10-K

The fair value hierarchy consists of the following three levels:

• Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities.

• Level 2 – Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.

• Level 3 – Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

The following table summarizes the financial assets and (liabilities) measured at fair value on a recurring basis as of December 31, 2024:

(in millions)			Level 1						Level 2						Level 3						Total
Cash equivalents:
Money market funds			$	40					$	—					$	—					$	40
Time deposits			—						991						—						991
Short-term investments:
Time deposits			—						1						—						1
Equity investment security			11						—						—						11
Other current assets:
Foreign exchange forward contracts			—						2						—						2
Accrued expenses and other current liabilities:
Foreign exchange forward contracts			—						(24)						—						(24)
Other noncurrent liabilities:
Foreign exchange forward contracts			—						(13)						—						(13)

The following table summarizes the financial assets and (liabilities) measured at fair value on a recurring basis as of December 31, 2023:

(in millions)			Level 1						Level 2						Level 3						Total
Cash equivalents:
Money market funds			$	327					$	—					$	—					$	327
Time deposits			—						834						—						834
Short-term investments:
Equity investment security			11						—						—						11
Other current assets:
Foreign exchange forward contracts			—						15						—						15
Long-term investments:
Restricted time deposits (1)			—						355						—						355
Other noncurrent assets:
Foreign exchange forward contracts			—						5						—						5
Accrued expenses and other current liabilities:
Foreign exchange forward contracts			—						(14)						—						(14)
Contingent consideration liabilities			—						—						(30)						(30)
Other noncurrent liabilities:
Foreign exchange forward contracts			—						(1)						—						(1)

(1)See Note 11

Cognizant			F-31			December 31, 2024 Form 10-K

The following table summarizes the changes in Level 3 contingent consideration liabilities:

(in millions)						2024						2023
Beginning balance						$	30					$	22
Change in fair value recognized in SG&A expenses						—						17
Payments and other adjustments						(30)						(9)
Ending balance						$	—					$	30

We measure the fair value of money market funds based on quoted prices in active markets for identical assets and measure the fair value of our equity investment security based on the published daily net asset value at which investors can freely subscribe to or redeem from the fund. The carrying value of the time deposits approximated fair value as of December 31, 2024 and 2023.

We estimate the fair value of each foreign exchange forward contract by using a present value of expected cash flows model. This model calculates the difference between the current market forward price and the contracted forward price for each foreign exchange forward contract and applies the difference in the rates to each outstanding contract. The market forward rates include a discount and credit risk factor. We estimate the fair value of each foreign exchange option contract by using a variant of the Black-Scholes model. This model uses present value techniques and reflects the time value and intrinsic value based on

observable market rates.

We estimate the fair value of contingent consideration liabilities associated with acquisitions using a variation of the income approach, which utilizes one or more significant inputs that are unobservable. This approach calculates the fair value of such liabilities based on the probability-weighted expected performance of the acquired entity against the target performance metric, discounted to present value when appropriate.

During the years ended December 31, 2024, 2023 and 2022 there were no transfers among Level 1, Level 2 or Level 3 financial assets and liabilities.

Note 14 — Accumulated Other Comprehensive Income (Loss)

Changes in "Accumulated other comprehensive income (loss)" by component were as follows for the year ended December 31, 2024:

			2024
(in millions)			Before Tax Amount						Tax Effect						Net of Tax Amount
Foreign currency translation adjustments:
Beginning balance			$	(109)					$	5					$	(104)
Change in foreign currency translation adjustments			(152)						2						(150)
Ending balance			$	(261)					$	7					$	(254)
Unrealized gains (losses) on cash flow hedges:
Beginning balance			$	13					$	(3)					$	10
Unrealized (losses) arising during the period			(35)						9						(26)
Reclassifications of net gains to:
Cost of revenues			(11)						3						(8)
SG&A expenses			(1)						—						(1)
Net change			(47)						12						(35)
Ending balance			$	(34)					$	9					$	(25)
Losses on defined benefit plans:
Beginning balance			$	—					$	—					$	—
Losses on defined benefit plans			(20)						3						(17)
Ending balance			$	(20)					$	3					$	(17)
Accumulated other comprehensive income (loss):
Beginning balance			$	(96)					$	2					$	(94)
Other comprehensive income (loss)			(219)						17						(202)
Ending balance			$	(315)					$	19					$	(296)

Cognizant			F-32			December 31, 2024 Form 10-K

Changes in "Accumulated other comprehensive income (loss)" by component were as follows for the years ended December 31, 2023 and 2022:

						2023																		2022
(in millions)						Before Tax Amount						Tax Effect						Net of Tax Amount						Before Tax Amount						Tax Effect						Net of Tax Amount
Foreign currency translation adjustments:
Beginning balance						$	(256)					$	8					$	(248)					$	(22)					$	2					$	(20)
Change in foreign currency translation adjustments						147						(3)						144						(234)						6						(228)
Ending balance						$	(109)					$	5					$	(104)					$	(256)					$	8					$	(248)
Unrealized (losses) gains on cash flow hedges:
Beginning balance						$	(68)					$	17					$	(51)					$	71					$	(14)					$	57
Unrealized gains (losses) arising during the period						55						(14)						41						(153)						34						(119)
Reclassifications of net losses to:
Cost of revenues						23						(5)						18						13						(3)						10
SG&A expenses						3						(1)						2						1						—						1
Net change						81						(20)						61						(139)						31						(108)
Ending balance						$	13					$	(3)					$	10					$	(68)					$	17					$	(51)
Accumulated other comprehensive income (loss):
Beginning balance						$	(324)					$	25					$	(299)					$	49					$	(12)					$	37
Other comprehensive income (loss)						228						(23)						205						(373)						37						(336)
Ending balance						$	(96)					$	2					$	(94)					$	(324)					$	25					$	(299)

Note 15 — Commitments and Contingencies

We are involved in various claims and legal proceedings arising in the ordinary course of business. We accrue a liability when a loss is considered probable and the amount can be reasonably estimated. When a material loss contingency is reasonably possible but not probable, we do not record a liability, but instead disclose the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can be made. Legal fees are expensed as incurred. While we do not expect that the ultimate resolution of any existing claims and proceedings (other than the specific matters described below, if decided adversely), individually or in the aggregate, will have a material adverse effect on our financial position, an unfavorable outcome in some or all of these proceedings could have a material adverse impact on results of operations or cash flows for a particular period. This assessment is based on our current understanding of relevant facts and circumstances. As such, our view of these matters is subject to inherent uncertainties and may change in the future.

On January 15, 2015, Syntel sued TriZetto and Cognizant in the USDC-SDNY. Syntel’s complaint alleged breach of contract against TriZetto, and tortious interference and misappropriation of trade secrets against Cognizant and TriZetto, stemming from Cognizant’s hiring of certain former Syntel employees. Cognizant and TriZetto countersued on March 23, 2015, for breach of contract, misappropriation of trade secrets and tortious interference, based on Syntel’s misuse of TriZetto confidential information and abandonment of contractual obligations. Cognizant and TriZetto subsequently added federal DTSA and copyright infringement claims for Syntel’s misuse of TriZetto’s proprietary technology. The parties’ claims were narrowed by the court and the case was tried before a jury, which on October 27, 2020 returned a verdict in favor of Cognizant in the amount of $855 million, including $570 million in punitive damages. On April 20, 2021, the USDC-SDNY issued a post-trial order that, among other things, affirmed the jury’s award of $285 million in actual damages, but reduced the award of punitive damages from $570 million to $285 million, thereby reducing the overall damages award from $855 million to $570 million. The USDC-SDNY subsequently issued a final judgment consistent with the April 20th order. On May 26, 2021, Syntel filed a notice of appeal to the Second Circuit, and on June 3, 2021 the USDC-SDNY stayed execution of judgment pending appeal. On May 25, 2023, the Second Circuit issued an opinion affirming in part and vacating in part the judgment of the USDC-SDNY and remanding the case for further proceedings consistent with its opinion. The Second Circuit affirmed the judgment in all respects on liability but vacated the $570 million award that had been based on avoided development costs under the DTSA, and it remanded the case to the USDC-SDNY for further evaluation of damages. On June 23, 2023, the

Cognizant			F-33			December 31, 2024 Form 10-K

Second Circuit issued its mandate returning the case to the USDC-SDNY. On March 13, 2024, the USDC-SDNY issued a ruling that vacates the alternate compensatory damages awards that were within the scope of the Second Circuit’s remand and awards TriZetto and Cognizant approximately $15 million in attorney’s fees. On October 23, 2024, the USDC-SDNY granted TriZetto and Cognizant’s motion for a new trial on the amount of compensatory damages owed to TriZetto and Cognizant. On November 12, 2024, the USDC-SDNY scheduled the trial for June 16, 2025. On November 13, 2024, the USDC-SDNY granted Syntel’s request to certify for interlocutory appeal the question of whether the Second Circuit’s mandate permits the USDC-SDNY’s October 23rd order for a new trial on compensatory damages. The parties subsequently completed briefing at the Second Circuit on December 27, 2024, regarding whether the Second Circuit should take up the interlocutory appeal, and a decision is pending. TriZetto and Cognizant will continue to vigorously pursue our claims against Syntel. We will not record any gain in our financial statements until it becomes realizable.

On February 28, 2019, a ruling of the SCI interpreting the India Defined Contribution Obligation altered historical understandings of the obligation, extending it to cover additional portions of the employee’s income. As a result, the ongoing contributions of our affected employees and the Company were required to be increased. In the first quarter of 2019, we accrued $117 million with respect to prior periods, assuming retroactive application of the SCI’s ruling, in "Selling, general and administrative expenses" in our consolidated statement of operations. There is significant uncertainty as to how the liability should be calculated as it is impacted by multiple variables, including the period of assessment, the application with respect to certain current and former employees and whether interest and penalties may be assessed. Since the ruling, a variety of trade associations and industry groups have advocated to the Indian government, highlighting the harm to the information technology sector, other industries and job growth in India that would result from a retroactive application of the ruling. It is possible the Indian government will review the matter and there is a substantial question as to whether the Indian government will apply the SCI’s ruling on a retroactive basis. As such, the ultimate amount of our obligation may be materially different from the amount accrued.

On October 31, 2016, November 15, 2016 and November 18, 2016, three putative shareholder derivative complaints were filed in New Jersey Superior Court, Bergen County, naming us, all of our then current directors and certain of our current and former officers at that time as defendants. These actions were consolidated in an order dated January 24, 2017. The complaints assert claims for breach of fiduciary duty, corporate waste, unjust enrichment, abuse of control, mismanagement, and/or insider selling by defendants. On April 26, 2017, the New Jersey Superior Court deferred further proceedings by dismissing the consolidated putative shareholder derivative litigation without prejudice but permitting the parties to file a motion to vacate the dismissal in the future.

On February 22, 2017, April 7, 2017, May 10, 2017 and March 11, 2019, four additional putative shareholder derivative complaints were filed in the USDC-NJ, naming us and certain of our current and former directors and officers at that time as defendants. These actions were consolidated in an order dated May 14, 2019. On August 3, 2020, lead plaintiffs filed a consolidated amended complaint. The consolidated amended complaint asserts claims similar to those in the previously-filed putative shareholder derivative actions. On February 14, 2022, we and certain of our current and former directors and officers moved to dismiss the consolidated amended complaint. On September 27, 2022, the USDC-NJ granted those motions and dismissed the consolidated amended complaint in its entirety with prejudice. Plaintiffs filed a notice of appeal on October 27, 2022. On May 3, 2024, the Third Circuit affirmed the dismissal of the consolidated amended complaint.

On June 1, 2021, an eighth putative shareholder derivative complaint was filed in the USDC-NJ, naming us and certain of our current and former directors and officers at that time as defendants. The complaint asserts claims similar to those in the previously-filed putative shareholder derivative actions. On March 31, 2022, we and certain of our current and former directors and officers moved to dismiss the complaint. On November 30, 2022, the USDC-NJ denied without prejudice those motions. The USDC-NJ ordered the parties to conduct limited discovery related to the issue of whether our board of directors wrongfully refused the plaintiff’s earlier litigation demand and, after the conclusion of such limited discovery, to file targeted motions for summary judgment on the issue of wrongful refusal.

We are presently unable to predict the duration, scope or result of the single putative shareholder derivative action that has not been dismissed. Although the Company continues to defend that putative shareholder derivative action vigorously, it is subject to inherent uncertainties, the actual cost of such litigation will depend upon many unknown factors and the outcome of the litigation is necessarily uncertain.

We have indemnification and expense advancement obligations pursuant to our bylaws and indemnification agreements with respect to certain current and former members of senior management and the Company’s board of directors. In connection with the matters that were the subject of our previously disclosed internal investigation, the DOJ and SEC investigations and the related litigation, we have received and expect to continue to receive requests under such indemnification agreements and our bylaws to provide funds for legal fees and other expenses. There are no amounts remaining available to us under applicable

Cognizant			F-34			December 31, 2024 Form 10-K

insurance policies for our ongoing indemnification and advancement obligations with respect to certain of our current and former officers and directors or incremental legal fees and other expenses related to the above matters.

See Note 11 for information relating to the ITD Dispute.

On September 18, 2017, three former employees filed suit against Cognizant in the USDC-CDCA, alleging that they and similarly situated employees suffered disparate treatment on the basis of race in violation of 42 U.S.C. § 1981. Plaintiffs subsequently amended their complaint three times, adding a fourth former employee plaintiff and claims for both disparate treatment and disparate impact on the basis of race and national origin under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. and disparate treatment and disparate impact on the basis of race and national origin under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.. Plaintiffs filed the operative Third Amended Complaint-Corrected on January 19, 2021. Cognizant filed its answer on January 29, 2021.

On May 13, 2022, plaintiffs filed a motion requesting that the USDC-CDCA certify the case as a class action for two putative classes of plaintiffs consisting of: (1) all individuals who are not of South Asian race or Indian national origin who applied to Cognizant in the U.S. and were not hired since September 2013 (the “hiring class”); and (2) all individuals who are not of South Asian race or Indian national origin who have been terminated in the U.S. since September 2013 (the “terminations class”). Cognizant opposed. On October 27, 2022, the court denied certification for the hiring class and the terminations class. However, the court granted certification for a sub-set of the terminations class limited to approximately 2,300 former employees whose employment had been terminated from the “bench,” a designation for employees who are not allocated to an active project. On November 10, 2022, Cognizant filed a petition with the Ninth Circuit requesting permission to appeal the class certification order as to the bench terminations class. The Ninth Circuit denied the petition on January 26, 2023.

From June 13, 2023 to June 26, 2023, the USDC-CDCA held a class action jury trial on the first phase of plaintiffs’ Section 1981 claim and Title VII disparate treatment claim. The questions presented were whether Cognizant engaged in a pattern or practice of discrimination against non-South Asian and non-Indian employees with respect to bench terminations, and if so, whether punitive damages are available for class members who prevail on their claims. The jury deadlocked, and the court declared a mistrial.

The case proceeded to a retrial on September 24, 2024, and on October 4, 2024, the jury returned a verdict in favor of plaintiffs. The case will now proceed to the second phase to determine individualized liability and damages, if any, for each class member. As a result of the verdict, each non-South Asian and non-Indian class member who pursues claims in the second phase will be entitled to a rebuttable presumption that all termination decisions were discriminatory and to the possibility of recovering punitive damages if they prevail. The USDC-CDCA will also consider plaintiffs’ claim that Cognizant policies had a disparate impact on non-South Asian and non-Indian employees. We believe that class certification was improper, and that the second phase of the case will confirm that individualized issues should have precluded class certification. Cognizant will continue to vigorously defend itself in the second phase of this case and to pursue all available appellate arguments concerning class certification and the September 24, 2024 trial at the appropriate time. Because we cannot predict the number of individual plaintiffs who will proceed to the second phase, or the outcome of those cases, and in view of the appellate arguments regarding class certification, we are unable to reasonably estimate a possible loss or range of loss. We have not recorded any accruals related to this matter.

Many of our engagements involve projects that are critical to the operations of our clients’ business and provide benefits that are difficult to quantify. Any failure in a client’s systems or our failure to meet our contractual obligations to our clients, including any breach involving a client’s confidential information or sensitive data, or our obligations under applicable laws or regulations could result in a claim for substantial damages against us, regardless of our responsibility for such failure. Although we attempt to contractually limit our liability for damages arising from negligent acts, errors, mistakes, or omissions in rendering our services, there can be no assurance that the limitations of liability set forth in our contracts will be enforceable in all instances or will otherwise protect us from liability for damages. Although we have general liability insurance coverage, including coverage for errors or omissions, we retain a significant portion of risk through our insurance deductibles and there can be no assurance that such coverage will cover all types of claims, continue to be available on reasonable terms or will be available in sufficient amounts to cover one or more large claims, or that the insurer will not disclaim coverage as to any future claim. The successful assertion of one or more large claims against us that exceed or are not covered by our insurance coverage or changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, results of operations, financial position and cash flows for a particular period.

In the normal course of business and in conjunction with certain client engagements, we have entered into contractual arrangements through which we may be obligated to indemnify clients or other parties with whom we conduct business with

Cognizant			F-35			December 31, 2024 Form 10-K

respect to certain matters. These arrangements can include provisions whereby we agree to hold the indemnified party and certain of their affiliated entities harmless with respect to third-party claims related to such matters as our breach of certain representations or covenants, our intellectual property infringement, our gross negligence or willful misconduct or certain other claims made against certain parties. Payments by us under any of these arrangements are generally conditioned on the client making a claim and providing us with full control over the defense and settlement of such claim. It is not possible to determine the maximum potential liability under these indemnification agreements due to the unique facts and circumstances involved in each particular agreement. Historically, we have not made material payments under these indemnification agreements and therefore they have not had a material impact on our operating results, financial position, or cash flows. However, if events arise requiring us to make payment for indemnification claims under our indemnification obligations in contracts we have entered, such payments could have a material adverse effect on our business, results of operations, financial position and cash flows for a particular period.

Note 16 — Employee Benefits

Defined Contribution Plans

We contribute to defined contribution plans, including 401(k) savings and supplemental retirement plans in the United States. Total expenses for our contributions to our U.S. plans were $115 million, $117 million and $112 million for the years ended December 31, 2024, 2023 and 2022, respectively.

In addition, we maintain employee benefit plans that cover substantially all India-based employees. The employees’ provident fund, pension and family pension plans are statutorily defined contribution retirement benefit plans. Under the plans, employees contribute up to 12.0% of their eligible compensation, which is matched by an equal contribution by the Company. For these plans, we recognized a contribution expense of $151 million, $149 million and $143 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Outside of the United States and India, we incurred expenses of $104 million, $107 million and $99 million for the years ended December 31, 2024, 2023 and 2022, respectively, related to our contributions to defined contribution plans.

Defined Benefit Pension Plans

We sponsor defined benefit pension plans that are statutorily required and primarily cover employees in certain European countries. Our primary plan is in Switzerland, which provides pension benefits based on a participant’s contributions, the Company’s matching contributions and a minimum investment return guarantee. As of December 31, 2024 the net liability recognized on the balance sheet for our pension plans was $63 million and amounts recognized in prior years were immaterial. The losses recognized in other comprehensive income arose mainly due to change in discount rates used in the valuation of the defined benefit obligation of our Swiss pension plan. The net periodic pension costs recognized in the income statement for the years ended December 31, 2024, 2023 and 2022 were $21 million, $16 million, $13 million, respectively.

Post-Employment Benefit Plan

We maintain a gratuity plan in India that is a statutory post-employment benefit plan providing defined lump sum benefits. We make annual contributions to the employees’ gratuity fund established with a government-owned insurance corporation to fund a portion of the estimated obligation. As of December 31, 2024 and 2023, the amount accrued under the gratuity plan was $80 million and $130 million, which is net of fund assets of $231 million and $221 million, respectively. Expense recognized by us was $4 million, $56 million and $45 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Note 17 — Stock-Based Compensation Plans

Our 2023 Incentive Plan provides for the issuance of a total of 25.0 million shares of Class A common stock to eligible employees, less (i) the number of shares granted under the 2017 Incentive Plan between March 24, 2023 and June 6, 2023, plus (ii) any shares subject to awards under the prior 2017 and 2009 Incentive Plans that are forfeited after June 6, 2023. The 2023 Incentive Plan does not affect any awards outstanding under the prior plans. The Purchase Plan provides for the issuance of up to 50.0 million shares of Class A common stock to eligible employees. As of December 31, 2024, we have 22.7 million and 10.6 million shares available for grant under the 2023 Incentive Plan and the Purchase Plan, respectively.

Cognizant			F-36			December 31, 2024 Form 10-K

The allocation of total stock-based compensation expense between cost of revenues, selling, general and administrative expenses and restructuring charges as well as the related income tax benefit were as follows for the three years ended December 31:

(in millions)						2024						2023						2022
Cost of revenues						$	26					$	30					$	33
SG&A expenses						150						153						228
Restructuring charges						(1)						(7)						—
Total stock-based compensation expense						$	175					$	176					$	261
Income tax benefit						$	38					$	34					$	59

Restricted Stock Units and Performance Stock Units

We granted RSUs that vest in quarterly or annual installments over periods of up to four years to employees, including our executive officers. A summary of the activity for RSUs granted under our stock-based compensation plans as of December 31, 2024 and changes during the year then ended is presented below:

						Number of Units (in millions)						Weighted Average Grant Date Fair Value (in dollars)
Unvested at January 1, 2024						3.3						$	69.10
Granted						2.5						77.66
Vested						(2.3)						72.04
Forfeited						(0.7)						73.06
Unvested at December 31, 2024						2.8						$	73.47

The total vesting date fair value of vested RSUs was $172 million, $176 million and $207 million for the years ended December 31, 2024, 2023 and 2022, respectively. The weighted-average grant date fair value of RSUs granted in 2024, 2023 and 2022 was $77.66, $65.95 and $78.20, respectively. As of December 31, 2024, $146 million of total remaining unrecognized stock-based compensation cost related to RSUs is expected to be recognized over the weighted-average remaining requisite service period of 1.5 years.

We granted PSUs that vest over periods up to four years to employees, including our executive officers. The vesting of PSUs is contingent on meeting certain financial performance targets, market conditions and continued service. A summary of the activity for PSUs granted under our stock-based compensation plans as of December 31, 2024 and changes during the year then ended is presented below. The presentation reflects the number of PSUs at the maximum performance milestones.

						Number of Units (in millions)						Weighted Average Grant Date Fair Value (in dollars)
Unvested at January 1, 2024						1.5						$	74.13
Granted						0.9						83.63
Vested						(0.2)						72.80
Forfeited						(0.4)						78.42
Adjustment at the conclusion of the performance measurement period						(0.3)						86.87
Unvested at December 31, 2024						1.5						$	76.76

The total vesting date fair value of vested PSUs was $15 million, $22 million and $8 million for the years ended December 31, 2024, 2023 and 2022, respectively.The weighted-average grant date fair value of PSUs granted in 2024, 2023 and 2022 was $83.63, $67.82 and $90.92, respectively. As of December 31, 2024, $21 million of the total remaining unrecognized stock-based compensation cost related to PSUs is expected to be recognized over the weighted-average remaining requisite service period of 1.5 years.

All RSUs and PSUs have dividend equivalent rights, which entitle holders to the same dividend value per share as holders of common stock. Dividend equivalent rights are subject to the same vesting and other terms and conditions as the corresponding unvested RSUs and PSUs and are accumulated and paid when the underlying shares vest.

Cognizant			F-37			December 31, 2024 Form 10-K

Purchase Plan

For the years ended December 31, 2024, 2023 and 2022, the Purchase Plan provided for eligible employees to purchase shares of Class A common stock at a price equal to 95% of the fair market value per share of our Class A common stock on the last date of the purchase period. This plan has been deemed non-compensatory and, therefore, no compensation expense has been recorded. During the years ended December 31, 2024, 2023 and 2022, we issued 0.9 million shares, 1.1 million shares and 1.3 million shares, respectively, of Class A common stock under the Purchase Plan.

Note 18 — Segment Information

Our chief executive officer is our chief operating decision maker. Our CODM regularly reviews the performance of our business by seven industry-based operating segments, which are aggregated into four reportable business segments:

• Health Sciences, which consists of a single operating segment of the same name;

• Financial Services, which consists of the banking and insurance operating segments;

• Products and Resources, which consists of the retail and consumer goods; manufacturing, logistics, energy, and utilities; and travel and hospitality operating segments; and

• Communications, Media and Technology, which consists of a single operating segment of the same name.

We have an industry-led go-to-market strategy, with client partners, account executives and client relationship managers aligned to the specific industries they serve.

Our CODM is regularly provided segment revenues and operating profit, including budget‑to‑actual variances in segment revenue, to formulate industry-focused strategic priorities, allocate financial resources, set targets and key performance indicators, and evaluate the results of such strategies. These strategic priorities, targets and key performance indicators are translated and applied to each client account, rolling up to respective industry-based operating segments. Our hiring and deployment plans are devised according to the strategic priorities and targets set for the client accounts.

Revenue from a client is directly identified with the operating segment with which the client is most closely aligned. Generally, operating expenses for each operating segment have similar characteristics and are subject to the same factors, pressures and challenges. However, the economic environment and its effects on industries served by the operating segments may affect revenues and operating expenses to differing degrees. Segment operating profit is the income from operations before unallocated costs.

Our CODM is not regularly provided with segment expenses. Corporate expenses, expenses related to our NextGen program, a portion of depreciation and amortization and the impact of the settlements of the cash flow hedges are not allocated to individual segments. Accordingly, such expenses are excluded from segment operating profit and are included below as “unallocated costs” and adjusted against our total income from operations.

We do not disclose assets by segment as a significant portion of the assets is used interchangeably among the segments and our CODM is not provided such information.

Information by reportable segment were as follows:

			Year Ended December 31, 2024
(in millions)			HS						FS						P&R						CMT						Total
Revenues			$	5,932					$	5,753					$	4,782					$	3,269					$	19,736
Less: other segment items			4,599						4,512						3,802						2,667						15,580
Segment operating profit			1,333						1,241						980						602						4,156
Less: unallocated costs																											1,264
Income from operations																											$	2,892

Cognizant			F-38			December 31, 2024 Form 10-K

			Year Ended December 31, 2023
(in millions)			HS						FS						P&R						CMT						Total
Revenues			$	5,674					$	5,809					$	4,628					$	3,242					$	19,353
Less: other segment items			4,322						4,653						3,644						2,617						15,236
Segment operating profit			1,352						1,156						984						625						4,117
Less: unallocated costs																											1,428
Income from operations																											$	2,689

			Year Ended December 31, 2022
(in millions)			HS						FS						P&R						CMT						Total
Revenues			$	5,631					$	6,072					$	4,566					$	3,159					$	19,428
Less: other segment items			4,441						4,749						3,495						2,390						15,075
Segment operating profit			1,190						1,323						1,071						769						4,353
Less: unallocated costs																											1,385
Income from operations																											$	2,968

Other segment items for each reportable segment primarily include employee compensation and benefits, subcontractor costs, costs of third-party products and services related to revenue and project-related travel.

Geographic Area Information

Long-lived assets by geographic area are as follows:

(in millions)			2024						2023						2022
Long-lived Assets:(1)
North America(2)			$	338					$	335					$	354
Europe			72						90						86
Rest of World(3)			584						623						661
Total			$	994					$	1,048					$	1,101

(1) Long-lived assets include property and equipment, net of accumulated depreciation and amortization.

(2) Substantially all relates to the United States.

(3) Substantially all relates to India.

Note 19 — Subsequent Events

Dividend

On February 5, 2025, our Board of Directors approved the Company's declaration of a $0.31 per share dividend with a record date of February 18, 2025 and a payment date of February 26, 2025.

Cognizant			F-39			December 31, 2024 Form 10-K

Cognizant Technology Solutions Corporation

Valuation and Qualifying Accounts

For the Years Ended December 31, 2024, 2023 and 2022

(in millions)

(in millions)						Balance at Beginning of Period						Charged to Costs and Expenses						Charged to Other Accounts						Deductions /Other						Balance at End of Period
Warranty accrual:
2024						$	40					$	38					$	—					$	40					$	38
2023						$	41					$	40					$	—					$	41					$	40
2022						$	39					$	41					$	—					$	39					$	41
Valuation allowance—deferred income tax assets:
2024						$	53					$	1					$	—					$	6					$	48
2023						$	41					$	14					$	—					$	2					$	53
2022						$	46					$	3					$	—					$	8					$	41

Cognizant			F-40			December 31, 2024 Form 10-K