Nasdaq-listed Cognizant Technology Solutions reported a 15.6% rise in net profit to $629 million for the September quarter from $544 million a year ago, on the back of a 5.6% rise in revenue in constant currency from the year-ago period to $4.9 billion. The company follows the calendar year.
The Teaneck, New Jersey-based firm expects its full year 2022 revenue to grow 7% in constant currency to about $19.3 billion. This was lower than the 8.5-9.5% guidance it gave for the full year in the June quarter.
“Revenue and bookings were below our expectations as company specific fulfillment challenges were compounded by the impact of an uncertain macroeconomic backdrop,” said Brian Humphries, chief executive officer. “We are confident the steps we are taking will return the company to accelerated growth over the medium to long term.”
The adjusted operating margins expanded to 16.4% from 15.8% in the year-ago period. Bookings in the quarter declined 2% year-on-year and represented an in-period book-to-bill of approximately 1.0x. This resulted in trailing 12-month bookings of $23.1 billion, which represented a book-to-bill of approximately 1.2x.
The company’s digital revenue grew 7% annually and contributed 51% to the total revenues for the September quarter as digital bookings continued to grow. It continues to focus on its priority areas of digital engineering, artificial intelligence (AI) and analytics, cloud, and internet of things (IoT).
Revenue from financial services grew 1.6% in constant currency, driven by digital services among public sector clients in the UK and insurance clients. Growth was offset by 180 basis points negative impact related to the previously disclosed sale of the Samlink subsidiary, completed on February 1, 2022.
Health Sciences revenue grew 5.5% in constant currency, driven by digital services among pharmaceutical and healthcare payer clients.
Products and resources revenue grew 8.2% in constant currency, driven by digital services among logistics, automotive, consumer goods, and travel and hospitality clients.
Communications, Media and Technology revenue grew 10.4% in constant currency, driven by strength among digital native companies.
The voluntary annualized attrition rate reduced to 29% in the September quarter from 31% in the preceding three months. The total headcount stood at 349,400 employees as of September 30.