IT major, Cognizant Technology Solutions Corp’s March quarter net profit rose 11.5% year-on-year to $563 million.
The Nasdaq-listed IT firm posted an 11% increase in revenue in constant currency to $4.8 billion.
Cognizant Revenue Growth
This is also the firm’s highest-ever quarterly revenue and fourth consecutive quarter of revenue growth.
Interestingly, the IT firm follows a January to December accounting year.
Its peers like Tata Consultancy Services Ltd’s (TCS) dollar revenue grew 14.3% in constant currency from a year earlier to $6.7 billion for the March quarter.
For the same quarter, Infosys Ltd grew 20.6% to $4.3 billion.
Basically, Cognizant revised its full year 2022 revenue growth guidance to 9-11% in constant currency at $19.8-20.2 billion.
This also includes an improved organic revenue growth outlook and a lower inorganic contribution, reflecting a disciplined acquisition strategy, according to the Teaneck, New Jersey-based IT firm.
It had projected 8.5-11.5% revenue growth for 2022 to $20.0-20.5 billion in last quarter, which is its highest-ever annual revenue outlook.
Continued Demand For Digital Technologies
The firm’s digital revenue grew 20% annually, further contributing 50% to total revenues for the March quarter.
This represents a continued demand environment as digital technologies become increasingly mainstream.
The IT giant continues to focus on its “digital battleground” areas of digital engineering, artificial intelligence (AI) and analytics, cloud, and internet of things (IoT).
The chief executive officer, Cognizant, Brian Humphries said, “While the economic backdrop is uncertain, we remain optimistic about the demand outlook for our solutions. Our strategic repositioning enables us to engage more deeply with clients, helping them succeed, and supports our growth trajectory,”.
The firm’s revenue from financial services grew 6% in constant currency from a year-ago.
Thus, reflecting demand for digital services, partially offset by clients’ focus on cost optimization.
Growth In Healthcare, Communications, Media and Technology Revenue
The sale of its Samlink subsidiary which was completed in February has negatively impacted segment revenue growth by approximately 130 basis points.
Driven by increased demand for digital services, the healthcare revenue grew 8.8% annually in constant currency.
This includes services like life sciences clients, including digitization of clinical trial processes and investments in manufacturing operations modernization.
Annually, the products and resources revenue grew by 14.9% in constant currency as it was driven by strong client demand for digital services across all industries and included the benefit from recently completed acquisitions.
Coming to Communications, media and technology, its revenue grew nearly 20% from the year-ago period in constant currency reflecting strong demand for data services among digital native companies.
During the first quarter, Cognizant added 9,800 new employees taking its global headcount to 340,000.
There is an improvement in the voluntary annualized attrition rate too as it reduced to 26% in the March quarter from 31% in the preceding three months.
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