Cognizant, a Nasdaq-listed IT services provider, has updated its full-year revenue growth projection for FY24 from $19.3 billion to $19.5 billion, indicating an increase of -0.5 percent to 1%. The company has forecast Q3 revenue in the range of -0.2% to 1.3%, or $4.89 billion to $4.96 billion.
The corporation, which follows a January-December calendar, posted a net profit of $566 million, up 22.2% year on year. Revenue for the quarter was $4.85 billion, down 0.7 percent year on year. On a sequential basis, revenue increased by 1.9%.
"In the second quarter, we delivered revenue above the high end of our guidance range, expanded adjusted operating margin, and maintained our large-deal momentum," stated Ravi Kumar S, CEO at Cognizant. "Progress toward our strategic priorities is creating new opportunities with clients and helping us to operate more efficiently. We believe our performance this quarter, as well as the increased organic growth estimate for the entire year, shows how our execution on these goals is starting to show in our results and supporting long-term shareholder value," he added.
The company observed growth in its banking and finance segment, which increased 5% sequentially. However, year on year, BFSI (Banking, Financial Services, and Insurance) was down 1.1%. The Health Sciences segment increased 3% sequentially and 1.5% year on year, while the Products and Resources section decreased 4.3% year on year.
"Our financial services and health sciences segments drove the strongest sequential revenue growth in two years, with a 2.1% increase in constant currency," stated Jatin Dalal, CFO of the company. "Our NextGen project has allowed us to fund investments to support revenue growth and produce a 70 basis point increase in adjusted operating margins in the first half of 2024. We are entering the third quarter with increased revenue momentum and remain committed to driving operational excellence,” he added. The corporation reported a total trailing 12-month TCV (Total Contract Value) of $26.2 billion. In the second quarter, the company signed five $100 million deals and two $90 million deals.
Cognizant's personnel decreased both year on year and sequentially. The total headcount at the end of the second quarter was 336,300, down 8,100 from the first quarter of 2024 and 9,300 from the second quarter of 2023. The company ascribed the staff drop to increasing usage of automation and AI, as well as an increase in its utilization rate. Utilization for the quarter was 83%, compared to 84% in Q2 FY23 and 82% in Q4 FY23. Kumar stated that if the company's growth continues in the coming quarter, it will consider hiring more people.
