Cognizant Raises Revenue Guidance As Demand In Health Science, Financial Services Picks Up
The third quarter's revenue of $5 billion increased 3% year-on-year or 2.7% in constant currency, meeting the upper end of the provided guidance range. Cognizant follows the calendar year.
Technology major Cognizant Technology Solutions Corp. raised its full-year 2024 guidance to 1.4% to 1.9% from -0.5% to 1%, on the back of an improving demand environment.
The third quarter's revenue of $5 billion increased 3.0% year-on-year or 2.7% in constant currency, meeting the upper end of the provided guidance range. Cognizant follows the calendar year.
Profit for the period came in at $582 million, up 2.82% sequentially from $566 million. On a YoY basis, profit was up 10.8%. The company said it saw strong growth in Health Sciences, which was up 7.8% YoY, or 7.6% in constant currency, and return to growth in Financial Services was up 0.7% YoY, or 0.5% in constant currency.
"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 Ravi Kumar S, Chief Executive Officer.
Investments in AI-driven platforms, such as NeuroSuite and Flowsource, are finding resonance with clients and contributing to the success of large deals. In August, Cognizant officially welcomed Belcan and is excited about the opportunities to jointly expand its presence in the growing ER&D market, he added.
In the third quarter, operating margin stood at 14.6%, sequentially flat, and increased 60 basis points year-on-year and year-to-date. Full-year 2024 adjusted operating margin guidance is 15.1%, narrowing from 15.3–15.5% provided last quarter.
"Our focus on operating cost discipline and savings generated through our strong execution under the NextGen program have allowed us to expand our year-to-date adjusted operating margin by approximately 40 basis points. As we look ahead, 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," said Jatin Dalal, chief financial officer.
Bookings in the third quarter were flat year-over-year. On a trailing-twelve-month basis, bookings declined 2% year-over-year to $26.2 billion, which represented a book-to-bill of approximately 1.3 times. During the quarter, the company signed six deals, each with a total contract value of $100 million or greater.
Voluntary attrition in Tech Services on a trailing-twelve-month basis was 14.6% as compared to 16.2% for the period ended September 30, 2023. 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.
