Mark J. Erceg
Executive Vice President & Chief Financial Officer at Cerner
Thanks, David, and good morning, everyone. Our Federal business remains solid, with the Department of Defense and the United States Coast Guard continuing to deploy their Cerner-powered EHR. For example, in August, the Coast Guard specific wave went live, bringing with it an additional 14 clinics and 17 sick base located in Alaska, California, Guam, Hawaii and Washington State. In addition, at the end of September, the DoD experienced another successful deployment, expanding their footprint by 4,800 end users across 130 locations in Hawaii.
The DoD is now using Cerner solutions in 17 states over 1,000 locations and serving around 64,000 end users. Together, we are on pace to meet their full deployment schedule on time and on budget by the end of calendar year 2023. Moving to Veterans Affairs. In July, VA officials released the findings of their 12-week strategic review. Throughout the review, the VA Secretary remained committed to Cerner, and we remain committed to the Secretary and all of America's veterans.
During that same month, our team also worked with VA leadership and providers at Mann-Grandstaff Medical Center to implement additional capabilities as we continue providing seamless care for our nation's veterans. And just last month, we secured additional VA funding to support deployments to future locations. Now moving to our financial results. Overall, we're very pleased with our third quarter results. Bookings were up 23% versus a year ago to $1.8 billion.
Bookings this quarter included strong contributions from our Federal business and also reflect new footprints. That said, please note that some of the booking strength was the result of some larger transactions getting done in the third quarter that we had originally expected to transact in the fourth quarter. The strong bookings this quarter brings year-to-date bookings growth to 13%. Our revenue backlog also grew, ending the third quarter at $13.1 billion, which is up 1% versus a year ago.
Revenue of $1.47 billion was up 7% over the year-ago quarter, driven in large part by strong growth in Federal and approximately $45 million of incremental revenue from the Kantar Health acquisition, we completed earlier this year. Organic growth in the quarter was approximately 4%. Just like bookings, our revenue in the third quarter was a little bit stronger than our initial expectations with about 0.5 point of growth, which we originally expected to post in the fourth quarter, finding its way into the third quarter, driven by the bookings upside.
Gross margin was down 20 basis points from a year ago at 82.9%, primarily due to a slightly higher mix of third-party services. Adjusted operating margin, however, expanded 150 basis points from 20.4% to 21.9% driven primarily by continued expense cost control, including the initial impact of the actions we discussed last quarter, namely, a reduction in force, the classification of several properties as held-for-sale and the write-down of certain in-process R&D for products that we deprecated as part of our drive to focus on the core, which David referenced during his remarks.
Those actions were a good start, but we have identified and are actively pursuing additional opportunities to improve profitability as we work towards our goal of delivering a mid-20% adjusted operating margin by fiscal 2024. For example, we continue to shrink our physical footprint as evidenced by the designation of two additional buildings as held-for-sale during the third quarter. These two buildings represent an additional 435,000 square feet of space bringing the total amount of square footage we have already sold or plan to disgorge up to 1.5 million square feet since the start of the year.
We are continuing to critically review and evaluate our product set and take end-of-life decisions, so our R&D investment can be channeled towards the products with the highest return profiles. We are systematically reviewing our extensive list of partnerships, which currently number in the hundreds. While we have a tremendous opportunity to improve the top and bottom line performance of many of our partnerships, we also plan to reduce or eliminate some non-value-added arrangements so we can focus our precious resources on the most impactful or promising relationships.
In addition, we recently completed a comprehensive analysis of third-party software and discover we are running over 750 unique titles, which currently cost us over $330 million annually for perpetual licenses, subscriptions and support. We will be taking concerted steps to actively manage and hopefully reduce this number and the associated cost going forward. I could continue, but let me comment on just one more area because I'm particularly excited about it. Over the past several years, and in large part because our client satisfaction has not been as high as it should be, it has been hard for Cerner to consistently pass along CPI escalators, which are embedded within many of our contracts.
Going forward, as we take up David's challenge to focus on the patient and only do a few critically important things really well, we plan to stop or jettison side pursuits that, in many cases, have proven to be nothing but resource drains and distractions. As we do this, we should have an opportunity to strengthen our price integrity in the marketplace, which I believe has the potential to be a significant source of incremental and profitable revenue growth in the years ahead. So in summary, we've made good progress at improving margins this year and plenty of opportunities remain to help us achieve our goal of mid-20% adjusted operating margin by 2024.
Wrapping up the P&L, adjusted diluted EPS was $0.86 per share, which is up nearly 20% over last year due to stronger adjusted operating earnings, a lower tax rate and a lower share count. Moving to our balance sheet. We ended Q3 with $782 million of cash and short-term investments, which is down from $885 million last quarter, primarily driven by $375 million which we spent on share repurchases during the quarter. This brings our purchases through the end of the third quarter up to $1.1 billion.
Our quarter ending debt position was unchanged versus Q2 at $1.8 billion. Operating cash flow for the quarter was $435 million. After $48 million of capital expenditures and $76 million of capitalized software. Free cash flow came in at $312 million, which is 32% higher than a year ago. Year-to-date free cash flow is $765 million, which is up 66% compared to the same period a year ago. Moving to guidance. We expect revenue in Q4 to grow upper mid-single digits compared to Q4 of 2020.
This includes approximately $50 million of revenue from the Kantar Health acquisition, which is now part of Enviza, bringing fourth quarter organic growth to the low to mid-single-digit range. This guidance also implies full year 2021 revenue growth of approximately 5%, which is consistent with our prior guidance. Organic growth for the year would also be in the mid-single-digit range. We expect fourth quarter adjusted diluted EPS growth of 10% to 13% over Q4 of 2020. The high end of this range would bring full year adjusted diluted EPS to $3.30 a share, which will be growth of about 16% over last year.
Importantly, this is $0.05 higher than the full year guidance we provided last quarter and $0.15 higher than the midpoint of the original guidance we provided at the beginning of the year. For the fourth quarter, we expect our tax rate to be approximately 19%. And I am very happy to communicate that we now expect to generate more than $950 million of free cash flow for the year. If achieved, that would be a new record amount breaking last year's $857 million, which was also a new record high at the time by roughly $100 million.
Finally, we remain on track to repurchase up to $1.5 billion of stock this year, which we believe will make better use of our strong balance sheet and free cash flow while still maintaining ample access to capital to fund high-return organic growth opportunities and potential future acquisitions, provided, of course, that those acquisitions are attractive both strategically and financially. In summary, I'm very pleased with how the entire Cerner team has been performing, which has directly contributed towards strong third quarter results and year-to-date results.
I also want to take a moment to extend my warmest welcome to David and express my genuine excitement upon his arrival. David has quickly bonded with the entire Cerner family, connected with an impressive number of clients and sharpened Cerner's strategy and focus. We are all energized by David's presence and feel like all the pieces are quickly coming together, which we believe will, over time, allow Cerner to fully realize its significant potential to positively impact health care while also generating meaningfully higher levels of total shareholder return. With that, I'll turn the call over to the operator for your questions.