Cognizant Dec quarter revenue at eight-quarter low

CHENNAI: IT services major Cognizant Technology Solutions on Wednesday posted a 0.3% decline (constant currency terms) in full year 2023 revenue at $19.4 billion as weakness in demand continues to plague IT sector.

Quarterly revenue for October-December came in at $4.76 billion , a 2.4 % decline in CC terms YoY. Cognizant follows calendar year accounting. Both financial services and healthcare -Cognizant’s top verticals- registered a decline of 6.6% and 2.7% YoY in revenue. However, quarterly net income increased from $521 million in December 2022 to $558 million in December 2023 as the company’s cost optimisation program NextGen started showing results.

Cognizant, which clocks bulk revenue from the North America and Europe markets, expects headwinds to continue. The company guided for a full year revenue to be $19 - $19.8 billion, a decline of 2.% to growth of 2% in CC terms.

“We delivered Q4 revenue within our guided range and we've maintained our commercial momentum…To keep advancing our ability to design and deliver solutions, we continue to invest in generative AI, cloud, data modernization, digital engineering and IoT,” Cognizant CEO Ravi Kumar S said.

Bookings in the fourth quarter declined 6% year-over-year. For the full year, bookings grew 9% year-over-year to $26.3 billion,

Total headcount at the end of the fourth quarter was 347,700, an increase of 1,100 from September 2023 and a decrease of 7,600 from December 2022.

Voluntary attrition - Tech Services for the year ended December 31, 2023 was 13.8% as compared to 25.6% for the year ended December 2022.

"Fourth quarter's sequential improvement in adjusted operating margin to 16.1% reflects our ongoing operational rigor and our NextGen cost optimization programme, which have enabled us to exceed our margin commitment and continue to invest in our strategy to improve future revenue growth," said Cognizant CFO Jatin Dalal.