Cognizant reports 10.9% revenue growth; trails peers
CHENNAI: IT major Cognizant beat street estimates on Thursday even as quarterly revenue remained flat on a sequential basis. Cognizant reported revenue of $4.8 billion for January-March 2022 quarter- a 10.9% year-on-year growth in constant currency terms. Digital revenue grew 20% year-over-year. In comparison, revenue growth rates at rivals TCS stood at 14.3% YoY and 21% for Infosys.
Cognizant’s profit stood at $563 million growing from $505 million in the same quarter last year, but declining from $576 million in the Oct-Dec 2021 period. The company marginally narrowed its guidance for the full year 2022 revenue. Cognizant now expects full-year 2022 revenue to grow in 9%- 11% in constant currency terms ($19.8-$20.2 billion) compared to 8.5%-11.5% in guided to earlier ($20.0-$20.5 billion).
“Thanks to our talented employees, we delivered on our first quarter commitments in what is an intensely competitive global labor market,” Brian Humphries, Chief Executive Officer, Cognizant, 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 company’s headcount grew to 340,000+ employees globally with headcount growing year-over-year by 43,900 employees. Cognizant managed to lower voluntary attrition from 31% in the previous quarter to 26% in Jan-March, and added approximately 9,800 new employees in the Jan-March quarter. Attrition still remains elevated compared to the same quarter last year when it was 18%.
“While we made sequential progress reducing voluntary attrition for the second consecutive quarter, we anticipate attrition will remain elevated for the full year and will increase in the second quarter, reflecting seasonality,”
Humphries said in the earnings call. Revenue from financial Services, its key vertical, grew 6% in constant currency. Healthcare revenue grew 8.8%. Products and Resources revenue grew 14.9%. Communications, Media and Technology revenue grew 19.9% . Cognizant Technology Solutions shares fell around 4% in Nasdaq to around $80.92.