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Background: Cognitive deficits may be characteristic for only a subgroup of first-episode psychosis (FEP) and the link with clinical and functional outcomes is less profound than previously thought. This study aimed to identify cognitive subgroups in a large sample of FEP using a clustering approach with healthy controls as a reference group, subsequently linking cognitive subgroups to clinical and functional outcomes., Methods: 204 FEP patients were included. Hierarchical cluster analysis was performed using baseline brief assessment of cognition in schizophrenia (BACS). Cognitive subgroups were compared to 40 controls and linked to longitudinal clinical and functional outcomes (PANSS, GAF, self-reported WHODAS 2.0) up to 12-month follow-up., Results: Three distinct cognitive clusters emerged: relative to controls, we found one cluster with preserved cognition ( n = 76), one moderately impaired cluster ( n = 74) and one severely impaired cluster ( n = 54). Patients with severely impaired cognition had more severe clinical symptoms at baseline, 6- and 12-month follow-up as compared to patients with preserved cognition. General functioning (GAF) in the severely impaired cluster was significantly lower than in those with preserved cognition at baseline and showed trend-level effects at 6- and 12-month follow-up. No significant differences in self-reported functional outcome (WHODAS 2.0) were present., Conclusions: Current results demonstrate the existence of three distinct cognitive subgroups, corresponding with clinical outcome at baseline, 6- and 12-month follow-up. Importantly, the cognitively preserved subgroup was larger than the severely impaired group. Early identification of discrete cognitive profiles can offer valuable information about the clinical outcome but may not be relevant in predicting self-reported functional outcomes.