Cognizant revenue rose 4.2% to $4.25 bn in third quarter

Cognizant said its third quarter revenue rose 4.2 percent to $4.25 billion from the year-ago quarter.
Cognizant employeesOperating margin was 15.7 percent compared to 18.3 percent in the year-ago quarter.

Net income was $497 million compared to $477 million in the year-ago quarter.

Cognizant CEO Brian Humphries said: “We are announcing a simplification of our operating model and a cost reduction program, which will allow us to fund investments in growth.”
Performance by Business Segment

Financial Services (35.1 percent of revenues) revenue grew 1.9 percent — driven by improvement in insurance, which benefited from the ramp-up of project-based work. Banking performance was consistent with the second quarter, reflecting the previously announced partnership with three Finnish financial institutions to transform and operate a shared core banking platform, partially offset by continued softness with a few of the largest banking clients.

Healthcare (27.7 percent of revenues) revenue decreased 1.2 percent impacted by industry consolidation, movement of work to a captive at a large North American client, a contract dispute with a customer, and the completed ramp down of a project on which we were a subcontractor to a third party. Life Sciences delivered double-digit growth, driven by continued demand within Digital Operations, continued momentum within our industry-specific platform solutions and the contribution of Zenith Technologies, which closed at the end of July.

Products and Resources (22.7 percent of revenues) revenue grew 11.9 percent, driven by broad-based growth across industries, including retail and consumer goods, travel and hospitality, and manufacturing, logistics, energy and utilities. Results reflect continued demand for services within Digital Business, including digital engineering, cloud and IoT solutions.

Communications, Media and Technology (14.5 percent of revenues) revenue grew 9.4 percent , led by growth in Technology. Communications and Media performance results again reflected the reduction of spending with a few large clients, while Technology growth was driven by revenue from recent acquisitions and demand for our digital engineering services.

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