Cognizant Q1 meets Street estimates; net income rises 11.5% to $563 mn

Nasdaq listed IT services major Cognizant reported net income of $563 million for the first quarter ended March 31, 2022. Net income was up 11.5 per cent year-on-year, but down from $576 million in the quarter ended Oct-Dec 2021.

Revenue for the first quarter rose by 10.9 per cent in constant currency at $4.8 billion. The company follows Jan-Dec financial calendar.

Cognizant expects its full year revenue guidance to be in the range of 7.2 per cent to 9.2 per cent or 9 per cent to 11 per cent in constant currency. The company has marginally upped its guidance in constant currency terms at the lower level from the earlier 8.5 per cent to 11.5 per cent. The company also said the growth driver for the year will be organic.

One of the milestones that the company achieved was digital revenues, which now represent 50 per cent of the company revenue.

Brian Humphries, CEO Cognizant said, “Thanks to our talented employees, we delivered on our first quarter commitments in what is an intensely competitive global labor market.  While the economic backdrop is uncertain, we remain optimistic about the demand outlook for our solutions. Our strategic repositioning enables us to engage more deeply with clients, helping them succeed, and supports our growth trajectory.”

Cognizant reported that its attrition for the first quarter came in at 29 per cent. Although it has inched up from the preceding quarter, the percentage of increase has come down. In Q4CY21 the company reported attrition of 28 per cent.

On a quarterly basis, the company said, it has seen attrition come down for the second quarter. Attrition on a quarterly basis for Q1 CY22 was at 26 per cent, down from 31 per cent in Q4CY21 and 33 per cent in Q3CY21.