IT Firm’s Revenue Rises 0.3% in Q4
New Delhi: Cognizant Technology Solutions Corporation’s fourth quarter revenue rose 0.3% sequentially, and the company said it would focus on building digital services capability through more acquisitions and improve operating margins in the next two years. It also expects 8-10% rise in full year revenue from the $13.49 billion in 2016.
“The time is right for us to accelerate the shift to digital services and solutions to meet the growing demands from our clients to transform their business models in the face of the rapid business and technology shifts disrupting their industries,” said Francisco D'Souza, chief executive officer.
“To meet this opportunity, we are evolving our business model to focus on aggressively scaling our digital capabilities, driving efficiencies in our core business, and launching a robust capital return program,” he added.
The shift to digital services and solutions and return capital to shareholders, would include “intensifying M&A efforts to expand intellectual property, industry expertise, and technology capabilities, by focusing on strategic tuck-in acquisitions”.
Cognizant also said it is looking at im- proving its non-GAAP operating margins to 22% in 2019. The non-GAAP operating margin for the quarter ending December 31, 2016 was 18.7%. The IT services company met the lower end of its fourth quarter revenue forecast at $3.46 billion. It had expected revenue to be between $3.45 billion and $3.51 billion. It also met the lower end of its full year revenue forecast at $13.49 billion, and expects full-year revenue for 2017 in the range of $14.56 billion to $14.84 billion.
Cognizant had a tough last year as it trimmed the top end of its full-year guidance thrice and disclosed that it had made payments in India that fell foul of the US Foreign Corrupt Practices Act.