Cognizant's June quarter net profit rises 22% to $566M

Cognizant Technology Solutions has posted a 22% rise in consolidated net profit in June quarter at $566 million, its Q2 performance topping estimates, and the IT services company also tweaked revenue guidance for full year 2024.

For full-year 2024, revenue is expected to be $19.3 to $19.5 billion, a band that translates into a decline of 0.5% to an increase of 1%, the company said, adding this assumes approximately 70 basis points of inorganic contribution.

Previously, the company had guided the full-year 2024 revenue at $18.9 to $19.7 billion, which worked out to a decline of 2.2% to a growth of 1.8% as reported, or a decline of 2.0% to a growth of 2% in constant currency.

Announcing the Q2 2024 results, Cognizant top management said that the company is entering the third quarter with improved revenue momentum.

The net profit for June quarter (Q2 2024) stood at $566 million, which was 22.2% increase from the year ago period. Cognizant - which is headquartered in New Jersey but has a significant headcount in India - posted revenue of about $4.9 billion, which was 0.7% lower than the same period previous year.

"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," Ravi Kumar S, Chief Executive Officer of Cognizant, said.

"Progress against our strategic priorities is opening new opportunities with clients and allowing us to operate with greater agility. We believe our performance this quarter and the improved organic growth outlook for the full year demonstrate how our execution against these priorities is beginning to translate to our results and support long-term shareholder value," he added.

Sequential revenue growth of 2.1%, driven by financial services and health sciences segments, was the strongest in two years, Jatin Dalal, Chief Financial Officer of Cognizant, said.

"Our NextGen programme has helped us fund investments in support of revenue growth and deliver 70 basis points of adjusted operating margin expansion in the first half of 2024. We enter the third quarter with improved revenue momentum and remain committed to driving operational excellence," according to him.

The overall headcount at the end of the second quarter was 3,36,300, a decrease of 8,100 from Q1 2024 and a drop of 9,300 from Q2 2023.