BENGALURU: Nasdaq-listed Cognizant Technology Solutions Corp’s March quarter net profit rose 11.5% year-on-year to $563 million, on the back of an 11% increase in revenue in constant currency to $4.8 billion – its highest-ever quarterly revenue and fourth consecutive quarter of revenue growth. The company follows a January to December accounting year.
In comparison, for the March quarter, Tata Consultancy Services Ltd’s (TCS) dollar revenue grew 14.3% in constant currency from a year earlier to $6.7 billion, while that of Infosys Ltd grew 20.6% to $4.3 billion.
Teaneck, New Jersey-based Cognizant revised its full year 2022 revenue growth guidance to 9-11% in constant currency at $19.8-20.2 billion which includes an improved organic revenue growth outlook and a lower inorganic contribution, reflecting a disciplined acquisition strategy, the company said. Last quarter, it had projected 8.5-11.5% revenue growth for 2022 to $20.0-20.5 billion, its highest-ever annual revenue outlook.
The company’s digital revenue grew 20% annually and contributed 50% to total revenues for the March quarter, representing continued demand environment as digital technologies become increasingly mainstream. It continues to focus on its “digital battleground” areas of digital engineering, artificial intelligence (AI) and analytics, cloud, and internet of things (IoT).
“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,” said Brian Humphries, chief executive officer, Cognizant.
Revenue from financial services grew 6% in constant currency from a year-ago reflecting demand for digital services, partially offset by clients’ focus on cost optimisation. In February, the sale of its Samlink subsidiary was completed, which negatively impacted segment revenue growth by approximately 130 basis points.
Healthcare revenue grew 8.8% annually in constant currency, driven by increased demand for digital services among life sciences clients, including digitization of clinical trial processes and investments in manufacturing operations modernization.
Products and resources revenue grew 14.9% annually in constant currency, driven by strong client demand for digital services across all industries and included the benefit from recently completed acquisitions.
Communications, media and technology revenue grew nearly 20% from the year-ago period in constant currency reflecting strong demand for data services among digital native companies.
Cognizant added 9,800 new employees during the first quarter taking its global headcount to 340,000. The voluntary annualized attrition rate reduced to 26% in the March quarter from 31% in the preceding three months.