BENGALURU: Nasdaq-listed IT services company Cognizant Technology Solutions has reported a 12.7% increase in net profit at $577 million for the second quarter ended June 30, 2022. The company had posted $512 million net profit in the same quarter last year.
Cognizant, which follows the calendar year, has reported $4.9 billion revenue, a 6.5% y-o-y growth compared to $4.6 billion in the year-ago period. This revenue was below expectations.
The company's operating margin stood at 15.5%, up 30 basis points y-o-y, and its operating cash flow stood at $528 million. Also, it has reduced its full-year 2022 revenue growth guidance to 8.5% - 9.5% in constant currency from the previous 9-11% growth that it guided in the previous quarter.
"In a period of unprecedented labour market conditions characterised by elevated attrition and significant wage inflation, we focused on our client commitments and delivered balanced financial results in the second quarter," said Brian Humphries, Chief Executive Officer, Cognizant.
"As we position the company for sustained success, we will continue to invest in our talented employees, our clients and our capabilities," he added.
The company's financial services revenue grew 2.7% y-o-y, driven by growth in the US regional banking clients, strength in the UK and solid performance within insurance. Its Health sciences revenue grew 6.3% y-o-y. However, Cognizant's second quarter bookings declined 3% y-o-y. This resulted in trailing 12-month bookings of $23.2 billion, the company said.
"During the quarter, we maintained a disciplined approach on pricing, while managing supply constraints and labour cost inflationary pressure. While quarterly bookings performance was below our expectations, our 1.2x book-to-bill supports our revenue growth outlook for 2022," said Jan Siegmund, Chief Financial Officer, Cognizant.
ALSO READ | Cognizant opens ‘hybrid’ office space in Chennai
In an email to employees, Humphries said, "Our focus on fulfillment optimization and pricing marginally affected our revenue performance and hurt our bookings momentum. Overall, we remain strategically well positioned in a robust IT services market."
He stressed that nothing is more important than reducing the company's attrition rates.
Cognizant is also evolving its organisational structure to enable end-to-end accountability from its four integrated service lines for the entire value chain- vision, roadmap, offerings and capabilities through to presales, solutioning and delivery. In the past year, the company has invested substantially in compensation, overhauled its promotion process and facilitated more than 33,000 internal job moves.
Of 3,40,000 employees globally, India has over 2,40,000 associates across the country.