Cognizant Technology Solutions reported a 22 per cent increase in net profit to $582 for the third quarter ended September 30, 2024, as against $525 million for the corresponding quarter last year. Revenue was up 3 per cent year-on-year to $5 billion.

The US-based IT company with a large workforce in India said there was strong growth in health sciences, up 7.8 per cent year over year, and a return to growth in financial services, up 0.7 per cent year over year.

“Revenue growth in the third quarter was at the high end of our guidance range, driven by another quarter of strong performance in our largest segments, Health Sciences and Financial Services,” said S Ravi Kumar, Chief Executive Officer, Cognizant. “Investments in AI-driven platforms, like our Neuro suite and Flowsource, are resonating with our clients and supporting our large deals success.”

“In the third quarter, we signed six deals with a total contract value of more than $100 million each, bringing our year-to-date count to nineteen, which is more than we signed in the full-year 2023. In August, we officially welcomed Belcan to the Cognizant family, and we are excited about the opportunities to jointly expand our presence in the growing ER&D market,” he added.

The company’s recently completed acquisitions contributed approximately 200 basis points to the Y/Y change in revenue, he said.

Jatin Dalal, Chief Financial Officer, Cognizant, said, “Our focus on operating cost discipline and savings generated through our strong execution under the NextGen program have allowed us to expand year-to-date Adjusted Operating Margin by approximately 40 basis points. Our fourth quarter year-over-year organic revenue growth is expected to be stronger than it was in the prior year period, and our large deal momentum provides us a strong foundation to build upon in 2025.”

Bookings

On a trailing-twelve-month basis, bookings declined 2 per cent year-over-year to $26.2 billion, which represented a book-to-bill of approximately 1.3X.

Employee Metrics

Total headcount at the end of the third quarter was 3,40,100, including Belcan, an increase of 3,800 from Q2 2024 and a decrease of 6,500 from Q3 2023. On voluntary attrition, the company said that technology services on a trailing twelve months basis was 14.6 per cent compared to 16.2% for the period ending September 30, 2023.

Guidance

Fourth quarter revenue is expected to be $5.0 - $5.1 billion, growth of 5.1 per cent to 7.1 per cent. The full-year 2024 revenue is expected to be $19.7 - $19.8 billion, growth of 1.6 per cent to 2.1 per cent. This assumes approximately 200 basis points of inorganic contribution.

Acquisitions

In the third quarter, Cognizant completed the acquisition of Belcan for approximately $1.3 billion in cash and stock during the third quarter. Belcan is a global supplier of Engineering Research & Development (ER&D) services for the commercial aerospace, defense, space, marine and industrial verticals. This acquisition strengthens Cognizant’s engineering capabilities, builds on its leadership in the Internet of Things (IoT) and Digital Engineering practice areas, and increases its presence in the aerospace and defence (A&D) services market, according to a release.

Client Wins

Cognizant was selected by the England and Wales Cricket Board (ECB) as its Official Digital Technology Transformation Partner to reimagine the recreational cricket experience through technology. It will be the key strategic partner for the ECB’s recreational game systems program – aiming to develop integrated and user-friendly digital products that simplify numerous administrative tasks involved in running recreational cricket and provide a streamlined and inclusive digital experience that facilitates a more meaningful engagement for all participants with the game, the release said.

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