The company also increased its annual sales projection on both ends of the spectrum, indicating better visibility of revenue growth.
Cognizant Technologies, a Nasdaq-listed company, outperformed Wall Street expectations for its April-June quarter earnings, showing a nearly 2% sequential revenue growth to $4.9 billion. This expansion was fueled by persistent market share gains and recoveries in its core financial services and health sciences businesses. The company also increased its annual sales projection on both ends of the spectrum, indicating better visibility of revenue growth.
Cognizant’s net profit jumped 3.6% quarter on quarter to $566 million, and 22% year on year. Jatin Dalal, CEO of Cognizant, stated, “We are clearly winning market share as we execute every quarter. The deals that are ramping up are a reflection of new work that Cognizant is getting”.
The company’s operating margin increased by 280 basis points (bps) year over year to 14.6%, but remained flat sequentially. Furthermore, Cognizant expects constant currency revenue growth of flat to 1.5% in the third quarter.
The company revised its full-year outlook to a 0.5% to 1% decline in constant currency, up from a previous forecast of a 2% decline to 2% increase. The company’s fiscal year is based on the calendar.
The full-year projection now includes around 70 basis points of inorganic contribution.
In June, Cognizant agreed to buy digital engineering business Belcan for about $1.3 billion in cash and equity. According to the company’s management, no more acquisitions are planned until at least 2024, as the company intends to focus on fully integrating Belcan.
