Business News/ Companies / Company Results/  Cognizant Q3 revenue up 11% to $4.7 billion on improved demand

BENGALURU: Cognizant Technology Solutions Corp. reported an 11% year-on-year rise in revenue in constant currency to $4.7 billion for the third quarter ended September as business momentum, especially in digital services, continued to improve. The company follows a January to December accounting year.

Based in Teaneck, New Jersey, Cognizant expects its full year 2021 revenue to grow 9.8% in constant currency to $18.5 billion, which would be its highest annual revenue to date, towards the higher end of its earlier guidance of $18.4 billion to $18.5 billion.

The company’s digital revenue grew 18% annually and contributed 44% to total revenues for the quarter under review as digital bookings continued to grow. It continues to focus on its priority areas of digital engineering, artificial intelligence (AI) and analytics, cloud, and internet of things (IoT).

Cognizant onboarded a record number of 17,000 new hires in the September quarter, taking its global headcount to 318,400. The headcount has grown by over 35,000 people since this time last year.

“While the industry faces an unprecedented competition for talent, we attracted a record number of employees to Cognizant, and stayed focused on delivering against our client commitments and our strategic repositioning," said Brian Humphries, chief executive officer. “We continue to make important investments to ensure Cognizant is well positioned to serve our clients as they embrace digital business models."

The adjusted operating margin for the third quarter stood at 15.8% compared with 15.9% in the same quarter of the previous year.

The company has invested $3 billion in strategic mergers and acquisitions over three years, including the acquisitions of TQS Integration and Hunter Technical Resources in the third quarter.

Revenue from financial services grew 4.3% in constant currency from a year-ago which included the benefit of the recently completed acquisitions and revenue growth generated by the digital services in both banking and insurance. “Declines related to our non-digital services reflected clients' continued focus on cost optimization of supporting their legacy systems and operations," the company said.

Healthcare revenue grew 9.8% annually in constant currency, driven by increased demand for services among pharmaceutical companies. Revenue growth among the healthcare customers benefited from increased demand for integrated software solutions.

Products and resources revenue grew 18.1% annually in constant currency, which included the benefit of recently completed acquisitions and revenue growth driven by clients' adoption of digital technologies. “We experienced improved demand across retail, consumer goods, travel, and hospitality following the negative impact from the pandemic in 2020," the company said.

Communications, media and technology revenue grew 19.1%year-on-year in constant currency. Revenue growth included the benefit of recently completed acquisitions and continued strong demand from technology clients.

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Updated: 28 Oct 2021, 08:20 AM IST
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