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Cognizant Q1 net up 15%, revenue to grow 10-13% in FY16

Cognizant Q1 net up 15%, revenue to grow 10-13% in FY16

IT services major Cognizant today reported a 15.2 percent increase in net profit at USD 441.2 million for the March quarter.

Cognizant’s net profit stood at USD 382.9 million in the first quarter of 2015.

The US-based firm saw its revenue grow 10 per cent to USD 3.2 billion in the quarter under review from USD 2.91 billion in the year-ago period, within its own guidance of USD 3.18-3.24 billion, the company, which follows January-December as fiscal year, said in a statement.

However, revenues were down 0.9 per cent sequentially.

Cognizant has lowered its revenue forecast for the fiscal 2016 to be in the range of USD 13.65-14 billion from its earlier estimate of USD 13.65-14.2 billion.

“Based on first quarter results and our visibility on deals ramping up throughout the year, we have tightened our 2016 revenue guidance range to USD 13.65-14 billion, representing approximately 10-13 percent growth year-over-year,” Cognizant CFO Karen McLoughlin said.

For the April-June 2016 quarter, it expects its revenue to be between USD 3.34 billion to USD 3.40 billion.

“Overall, our first quarter results were in line with our expectations and guidance. Client demand for our digital expertise, services and technologies remains strong,” Cognizant Chief Executive Officer Francisco D’Souza said.

As anticipated, during the first quarter, Cognizant saw softness in its healthcare segment due to M&A activity as well as softness in banking segment due to financial market volatility, Cognizant President Gordon Coburn said.

“As we move into the second quarter, we are quite pleased with our momentum with new and existing clients, which we expect to drive sequential revenue growth in the second quarter of USD 140 to USD 200 million,” he said.

To support this expected growth, Cognizant significantly accelerated hiring during the first quarter and increased its global headcount by 11,300 employees, he said.