 "Cognizant")
Nasdaq-listed Cognizant Technology Solutions has retained its full-year 2023 revenue growth guidance at $19.2-19.6 billion, a decline of 1 per cent to growth of 1 per cent in constant currency. The third-quarter revenue is expected to be in the range of $4.89-4.94 billion, a decline of 0.5 per cent to growth of 0.5 per cent in constant currency.
The Teaneck, New Jersey-based firm posted a 19.7 per cent decline in net profit to $463 million for the June quarter from $577 million a year ago. The revenues declined 0.1 per cent in constant currency from the year-ago period to $4.9 billion, at the upper end of its guidance.
The company follows the calendar year.
“We made continued progress during the quarter amid an uncertain economic backdrop,” said Ravi Kumar S, chief executive officer (CEO), Cognizant.
“We maintained our commercial momentum, with strong booking growth of 17 per cent year-on-year (YoY), including roughly a third of in-quarter bookings from large deals. We also saw a return to sequential revenue growth, and our initial investment in the Cognizant Neuro artificial intelligence (AI) platform has helped drive more than 100 early engagements as clients embrace Generative AI.”
Kumar said at an after-earnings call that discretionary spending continues to taper off, especially in the banking, financial services and insurance sector.
Kumar, a former Infosys president, joined Cognizant as its CEO on January 12 this year, succeeding Brian Humphries, who departed the company on March 15 after helping with the transition.
Bookings in the second quarter (Q2) grew 17 per cent YoY. On a trailing 12-month basis, bookings grew 14 per cent YoY to $26.4 billion, representing a book-to-bill ratio of approximately 1.4x.
Cognizant also said that Chief Financial Officer Jan Siegmund intends to retire in early 2024 to spend more time with family and friends and focus on philanthropy. To ensure an orderly transition, Siegmund plans to stay in his role until the company identifies a successor and the transition period is completed.
Cognizant is conducting a search and evaluating internal and external candidates.
On an annual basis, revenue from financial services, its largest vertical, declined 4.8 per cent in constant currency, while health sciences grew 2.1 per cent.
Revenue from products and resources grew 3.7 per cent, while communications, media, and technology revenue declined 0.4 per cent in constant currency.
The voluntary attrition rate, on a trailing 12-month basis, reduced to 19.9 per cent in the June quarter from 23.1 per cent in the preceding three months, indicating a downtrend trend visible across the industry.
Total headcount at the end of the Q2 stood at 345,600, a decrease of 5,900 from the first quarter of 2023 and an increase of 4,300 from Q2 of 2022.
