Cognizant Technology Solutions has reported an 11 per cent increase in net profit, at $356 million, in the third quarter ended September 30, against $320 million in the same quarter last year. Revenue was at $2.6 billion, up 12 per cent from the year-ago period and 2.5 per cent sequentially.
The company said it had seen “significant” traction for its social, mobile, analytics and cloud offerings with clients.
US-based Cognizant, which has over 75 per cent of its employees working in India, added nearly 12,300 people in the September quarter, according to a company press release.
During the quarter, Cognizant was behind Tata Consultancy Services in revenue growth but beat Infosys and Wipro. “There is a tremendous opportunity in the marketplace as the advent of new digital technologies, global economic pressures, and an evolving regulatory environment force businesses across all industries to change and adapt faster than ever before,” said Francisco D’Souza, CEO, Cognizant, in the release.
Revenue guidance The company expects to end the full-year with revenue between $10.13 billion and $10.16 billion.
Revenue growth was slightly ahead of its revised forecast. Operating margins were within the target range of 19-20 per cent as the company absorbed the impact of annual wage increases during the third quarter, said Karen McLoughlin, Chief Financial Officer, Cognizant.
Cognizant’s balance sheet remains strong as cash and short-term investments increased during the quarter by almost $500 million to $4.6 billion.
Later this quarter, it anticipates utilising $1.7 billion of this cash, in addition to $1 billion of floating-rate debt through a syndicated term loan, to fund the previously announced acquisition of TriZetto, she said in the release. While discussing the results with analysts in a conference call, D’Souza said the company had invested over the past three years to build its digital capabilities.
The company closed the quarter with 1,255 active customers, and the number of accounts that it considered strategic increased by seven, to 264. These accounts have the potential to ramp up to at least $5 million or more than $50 million in annual revenue, said McLoughlin.
Consulting and technology services, and outsourcing services represented 53.5 per cent and 46.5 per cent of revenue respectively for the quarter, she said.