Cognizant revenue: Cognizant Q2 profit up 22% at $566 million, revenue flat

US-headquartered information technology and professional services firm Cognizant Technology Solutions (Cognizant) posted a 22.2% year-on-year (YoY) growth in net profit at $566 million year-on-year (YoY) for the second quarter ending June 2024. Sequentially, the net profit grew 3.6% from $546 million in the previous quarter.Revenue for the Nasdaq-listed technology major came in at the higher end of its guided range at $4.85 billion, almost flat or marginally lower by 0.7% YoY from $4.89 billion a year ago quarter and 1.9% higher quarter-on-quarter (QoQ) from $4.76 billion in the March quarter. In Q1, the company had given revenue guidance for Q2 in the range of $4.75 to $4.82 billion.

“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. Progress against our strategic priorities is opening new opportunities with clients and allowing us to operate with greater agility,” said Ravi Kumar S, chief executive officer.

Cognizant, whose majority of employees are based in India, follows the calendar year cycle from January to December.

The global IT major has increased its full year 2024 revenue guidance in the range of $19.3 to $19.5 billion, translating to minus 0.5% to +1.0% Y/Y and constant currency (cc) terms. This includes approximately 70 bps of inorganic contribution versus prior guidance of “up to around 100 bps”.

This is higher from $18.9 to $19.7 billion (minus 2.2% to +1.8% YoY) and (minus 2.0% +2.0% YoY in cc terms), the guidance given in the previous quarter.

Its third quarter revenue was guided at $4.89 to $4.96 billion minus 0.2% to 1.3% YoY or 0.0%-1.5% YoY in cc terms.Full-year 2024 adjusted operating margin is expected to be in the range of 15.3% to 15.5%, or 20 to 40 basis points of expansion.

For Q2, the margin stood at 15.2%, up from 14.2% in the same quarter last year.

Chief financial officer Jatin Dalal said the sequential revenue growth of 2.1% in constant currency, driven by Financial Services and Health Sciences segments, was the strongest in two years. “Our NextGen program 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.”

Total headcount at the end of the second quarter was 336,300, a decrease of 8,100 from Q1 2024 and a decrease of 9,300 from Q2 2023. Voluntary attrition in tech services on a trailing-twelve months basis was 13.6% as compared to 19.9% for the period ended June 30, 2023.

Bookings in the second quarter on a trailing-twelve-month basis increased to $26.2 billion from $25.9 billion in the first quarter and $26.4 billion in the year ago period.