Cognizant revenue rises 22.6pc in Q2, raises growth outlook for full year
Cognizant Technology Solutions Corp. reported strong second-quarter revenue growth on Wednesday, outperforming its Indian peers, and raised its growth outlook for the full year.
Teaneck, New Jerseybased Cognizant, which has most of its 217,000 employees in India, said revenue in the quarter ended 30 June rose 22.6% from a year earlier and 6% from the preceding quarter to $3.09 billion, exceeding its forecast of 3.4% sequential growth. Cognizant reported 6.2% sequential growth in revenue during the JanuaryMarch period.
The company raised its revenue forecast for the second time in the year. It now expects 2015 revenue to grow 20.1% to $12.33 billion, compared with its earlier forecast of $12.24 billion. Its performance, which was lifted largely on account of higher spending by clients in the healthcare business in North America, was in line with analysts' expectations. Analysts polled by Bloomberg expected Cognizant to report revenue of $3.03 billion during the three months ended 30 June.
Net income rose to $420.1 million in the quarter ended 30 June from $371.9 million in the year-ago period. "Our second quarter sequential revenue increase in dollar terms was the strongest in our history," chief executive officer Francisco D'Souza said in a statement. "These results validate that our business strategy and our investments position us well to capture the emerging opportunities as clients look to transform into digital businesses. We increas- ingly work with our clients to help them re-imagine their businesses and build new capabilities to succeed in the digital era."
At the core of Cognizant's strong performance, was 7.7% growth in the financial services space, driven largely by higher technology spending by large commercial banks. Clients in the financial services space account for a little over 40% of Cognizant's revenue. The US, the geography which accounts for 78.6% of Cognizant's revenue, grew 5.8% while Europe, excluding the UK, and which brings in about 6.6% of total revenues, grew 7.3%.