US-based IT services firm Cognizant Technology Solutions beat revenue estimates for the first quarter of 2025 on the back of large deal realisations in health sciences and financial services.
Revenue was $5.1 billion, up 7.5% year-on-year, exceeding the high end of its guidance and analyst estimates of $5.07 billion. Net profit rose 21% to $663 million for the quarter ended March. The operating margin rose 210 basis points y-o-y to 16.7%. The firm follows the calendar year.
“We started the year on a strong note, delivering revenue and adjusted operating margin ahead of our expectations,” said chief executive officer Ravi Kumar S. “Recently won large deals more than offset discreetly spending pressures,” he said.
He added that productivity and cost reduction were helping clients navigate short-term uncertainty and aim for long-term AI-led transformation.
Cognizant maintained its annual revenue guidance for 2025 at 3.5%-6% in constant currency (CC) terms. However, its Q2 guidance was 5%-6.5% in CC terms, lower than Q1.
Chief financial officer Jatin Dalal said there was no major impact from macro uncertainties or customer cancellations in Q1. In April, client decision-making slowed, especially in health services.
The company signed 4 large deals in Q1, down from 10 in the previous quarter, with one mega deal worth over $500 million.
Vertical Performance
Health sciences revenue rose 11.4% y-o-y in CC terms to $1.57 billion. Financial services revenue rose 6.5% y-o-y to $1.46 billion. This was the sixth consecutive quarter of financial services trailing health sciences.
“Financial services have demonstrated resilience across capital markets, cards and payments,” Kumar said.
Revenue from the products and resources vertical rose 13.6% y-o-y to $1.28 billion. On the GenAI front, the company now has around 1,400 early Gen AI projects, up from 1,200 in the previous quarter.
The focus is on five areas: enterprise AI agents, industry-specific large-language models, digital twins for smart manufacturing, foundational AI infrastructure, and a new AI platform for NVIDIA AI integration and orchestration.
The company has developed over 20 agentic AI solutions using Google and other models, aimed at solving major healthcare challenges.
On the geography front, revenue from North America increased 9.7% to $3.85 billion and from Europe rose 3% to $950 million.