Cognizant net profit drops by 9.5% to $521M for Q4
Last month, Cognizant announced a change in leadership, with former Infosys executive Ravi Kumar taking over as CEO as the company struggles to meaningfully grow its revenue.
Technology services company
reported a 9.5% drop in net profit for the fourth quarter of 2022, impacted largely due to lower business volume from its key clients.The IT services company reported a net profit of $521 million for the three months ended December 2022, compared to $576 million a year ago.
On the revenue front, Cognizant posted marginal growth at 1.3% on a year-on-year basis to touch $4.8 billion. For the full year, it reported revenue growth of 5% on annual basis to reach $19.4 billion.
Last month, the company announced a change in leadership, with former Infosys executive Ravi Kumar taking over as the CEO as it struggles to meaningfully grow its revenue.
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Following the quarterly results, CEO Ravi Kumar said, “My immediate focus is on creating the conditions for our associates to excel and ensuring that all 355,000 of us operate with a growth mindset.”
In fact, the operating margin of the company declined to 14.2% for the fourth quarter compared to 15.3% a year ago.
For the first quarter of 2023, Cognizant has given revenue guidance in the range of $4.71-4.76 billion—a decline of 1.5-2.5%. The company has not provided full-year guidance, and it will update on the same in its next earnings call in May this year.
The company's total employee headcount at the end of the fourth quarter stood at 355,300—an addition of 24,700 people over a period of one year. The attrition rate dropped to 26% in the fourth quarter compared to 28% a year ago.
“We exited the year with a meaningful improvement in voluntary attrition, which will help us put greater focus on improving our commercial momentum," said Jan Siegmund, Chief Financial Officer, Cognizant.
Edited by Suman Singh