Cognizant reported a 20 per cent drop in net profit to $463 million for the second quarter ended June 30, 2023, as against $577 million in the corresponding quarter last year. Revenue was $4.9 billion, a decline of 0.4 per cent year-over-year (y-o-y).
During the second quarter, there were restructuring charges of $111 million.
The company saw a decline in revenue from financial services and communication, media, and technology but an increase in healthcare and products & resources verticals.
Bookings in the second quarter grew 17 per cent y-o-y. On a trailing twelve-month basis, bookings grew 14 per cent y-o-y to $26.4 billion, which represented a book-to-bill of approximately 1.4x.
Total headcount at the end of the second quarter was 3,45,600, a decrease of 5,900 from Q1 2023 and an increase of 4,300 from Q2 2022. Voluntary attrition – Tech Services on a trailing twelve-month basis, declined to 19.9 per cent from 23.1 per cent in Q1 2023 and 31.1 per cent in Q2 2022, says a release.
“We made continued progress during the quarter amid an uncertain economic backdrop,” said S Ravi Kumar, Chief Executive Officer, Cognizant. “We maintained our commercial momentum, with strong bookings growth of 17 per cent year over year, including roughly a third of in-quarter bookings from large deals. We also saw a return to sequential revenue growth, and our initial investment in the Cognizant Neuro AI platform has helped drive more than 100 early engagements as clients embrace generative AI.
The continued reduction in our voluntary attrition, improved employee engagement and higher customer satisfaction scores reflect the interdependence of our client and employee experience.”
Cognizant’s CFO Jan Siegmund will retire in early 2024, and is expected to remain in the role until Cognizant identifies a successor and completes transition period, the release said.
“Cognizant’s second-quarter revenue grew more than 1 per cent sequentially, at the high-end of our guidance range, while profitability was slightly ahead of expectations,” said Jan Siegmund, Chief Financial Officer. “Our NextGen program is on track and yielding early savings through our efforts to structurally reduce our cost base to fund investments for growth. Maintaining our balanced capital allocation approach, we have returned over $700 million to shareholders year-to-date.”
Third-quarter revenue is expected to be $4.89 – $4.94 billion while full-year 2023 revenue is expected to be $19.2 – $19.6 billion, the release said.