IT giant Cognizant on Thursday reported its earnings for the October to December 2022 quarter and full year 2022, in which its revenue of $19.4 billion beat its guidance of $19.3 billion for the fiscal. The revenue of the tech giant, which follows January to December as a financial year, saw its revenue jump 1.3 percent year-on-year to $4.8 billion in the fourth quarter. On a constant currency basis, it was a 4.1 percent rise.
However, Cognizant expects first quarter revenue to be $4.71-$4.76 billion, a decline of 1.5 percent to 2.5 percent, or a decline of a percent to flat in constant currency. Also, the company did not provide full-year guidance at this time and intends to share an update in its next earnings release in early May.
Cognizant Technology Solutions had lowered its full-year 2022 revenue growth guidance to 7 percent in constant currency to about $19.3 billion, reflecting currency headwinds and an uncertain macroeconomic environment. It had forecast a full-year revenue growth of 8.5-9.5 percent during the June quarter.
Among segments, in the fourth quarter, Cognizant’s financial services revenue declined 4.3 percent year-over-year, or 1.4 percent in constant currency, and included a 180 basis point negative impact related to the previously disclosed sale of the Samlink subsidiary (completed February 1, 2022). This was partially offset by growth among public sector clients in the United Kingdom and insurance clients, the firm said.
Its health sciences revenue grew 4.1 percent year-over-year, or 5.4 percent in constant currency. Growth was driven by digital services among pharmaceutical and healthcare payer clients.
The firm added that its revenue for products and resources grew 2.9 percent year-over-year, or 6.8 percent in constant currency, driven by digital services among logistics, automotive, utilities, consumer goods and travel and hospitality clients. Communications, media and technology revenue rose 5.4 percent year-over-year, or 9.3 percent in constant currency, driven by strength among digital native companies.
Cognizant’s bookings in the fourth quarter grew 12 percent year-over-year and for the full-year, they were up 4 percent to $24.1 billion, which represented a book-to-bill of approximately 1.2x.
Bookings for the fourth quarter and full-year include a 10-year, $1 billion services agreement with CoreLogic signed in December 2022 that extends and expands a partnership established in 2011, the firm said.
The firm’s total headcount at the end of the fourth quarter was 355,300, an increase of 5,900 from Q3 2022 and an increase of 24,700 from Q4 2021. Voluntary attrition, on a quarterly annualized basis, declined to 19 percent from 29 percent in Q3 2022 and 31 percent in Q4 2021. Voluntary attrition, on a trailing-twelve-month basis, declined to 26 percent from 28 percent in Q4 2021, the company said.
The company also announced the appointment of Eric Branderiz to its Board of Directors as an independent director, effective February 21, 2023. In addition, Maureen Breakiron-Evans, who joined the Board in 2009, informed the Board that she will not stand for re-election at Cognizant's 2023 Annual Meeting of Shareholders.
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