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Cognizant Technology Solutions reported a 22 per cent increase in net profit to $566 million for the second quarter ended June 30, 2024, as against $463 million in the same period last year. Revenue was flat at $4.9 billion.
The US-based IT company with a large presence in India, expects to incur approximately $95 million of costs in 2024 in connection with the NextGen program (restructuring). In the second quarter, the company incurred $29 million ($117 million).
Trailing 12-month bookings of $26.2 billion; book-to-bill of 1.4X
The company said revenue guidance for the third quarter of 2024 is flat to 1.5 per cent year-over-year growth in constant currency. Full-year 2024 revenue guidance has narrowed to a decline of 0.5 per cent to growth of 1.0 per cent in constant currency, an increase at the midpoint.
Total headcount at the end of the second quarter was 336,300, a decrease of 8,100 from Q1 2024 and a decrease of 9,300 from Q2 2023. Voluntary - tech services attrition (trailing 12-month) was 13.6 per cent, which was down 6.3 percentage points YoY, says a release.
Revenue from North America contributed $3.6 billion (up by 0.9 per cent); Europe $1 billion (down by 5.5 per cent) and Rest of the World $0.3 billion (down by 4.2 per cent).
“In the second quarter, we delivered revenue above the high end of our guidance range, expanded the adjusted operating margin, and maintained our large deal momentum,” said S Ravi Kumar, Chief Executive Officer, Cognizant.
“Progress against our strategic priorities is opening new opportunities with clients and allowing us to operate with greater agility. We believe our performance this quarter and the improved organic growth outlook for the full year demonstrate how our execution against these priorities is beginning to translate into our results and support long-term shareholder value.”
“Sequential revenue growth of 2.1 per cent in constant currency, driven by our Financial Services and Health Sciences segments, was the strongest in two years,” said Jatin Dalal, Chief Financial Officer.
“Our NextGen programme has helped us fund investments in support of revenue growth and deliver 70 basis points of adjusted operating margin expansion in the first half of 2024. We enter the third quarter with improved revenue momentum and remain committed to driving operational excellence.”
During the quarter, Cognizant signed definitive agreement to acquire Belcan, a leading global supplier of Engineering Research & Development (ER&D) services for a long-standing customer base across the commercial aerospace, defense, space, marine and industrial verticals, for $1.3 billion in cash and stock. The acquisition is expected to significantly expand Cognizant’s ER&D capabilities, building upon the Company’s leadership in the Internet of Things (IoT) and Digital Engineering practice areas. Belcan will bring a highly accredited and skilled workforce of approximately 6,500 engineers and technical consultants, primarily based in North America.
The acquisition is expected to close in Q3 2024.
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