Cognizant revenues up 16% in Q2

Cognizant Technology Solutions Corporation, the Naxdaq-listed IT services company, has reported a revenue of $138.7 million for the second quarter ended June 30, 2004, up 16 per cent from $119.7 million in the first quarter of 2004, and up 59 per cent from $87.4 million in the second quarter of 2003.

Net income for the second quarter increased to $23.8 million, compared with $19.8 million in the first quarter of 2004.

Operating margin for the quarter increased to 20 per cent, compared with 19.8 per cent in the first quarter of 2004 and 19.6 per cent in the second quarter of 2003.

The company has projected a topline of $565 million for the full year and $150 million for the third quarter of the current fiscal. Operating margins for the third quarter of this fiscal and and the full year are projected in the 19-20 pe cent range.

"The second quarter was exceptionally strong as we reported substantially better than expected results with solid growth across all of our key verticals," said Lakshmi Narayanan, president and CEO, Cognizant.

"Application development services continued to show strong momentum, growing 77 per cent year-over-year as a result of Cognizant's success at winning complex development projects. Our focus on building long-term customer relationships has led to increased client penetration and opportunities to cross-sell our services to existing and new strategic customers, enabling Cognizant to grow faster than any of our peers in the industry. Additionally, approximately 90 per cent of revenue came from clients with whom we have worked for at least one year. We also continue to strengthen our position as a highly differentiated provider of offshore outsourcing services as reflected in our ongoing ability to broaden and deepen our relationships with existing clients while maintaining a high win-rate against our competitors."

Gordon Coburn, CFO, Cognizant said, "We are particularly pleased with our cash flow metrics, including a decline in DSO to 59 days and generation of over $30 million of cash from operations."

"Based on the strength of our new business pipeline and the continuing interest from prospective customers, we remain very optimistic about our growth opportunities for the remainder of 2004 and believe that Cognizant is well-positioned to benefit from its leadership position and the ongoing momentum in the offshore outsourcing market."