Cognizant announced its revenue of $4.2 billion in fourth quarter and $16.7 billion for full year 2020.
Fourth Quarter 2020 Performance by Business Segment
Financial Services (31.2 percent of revenues) revenue decreased 11.1 percent, driven by declines in both banking and insurance. Growth in regional banks and retail banking was offset by the anticipated exit from a customer engagement, which negatively impacted our revenues in this segment by 730 basis points.
Cognizant made an offer to settle and exit a large customer engagement in the financial services segment in Continental Europe. The offer includes, among other terms, a proposed one-time payment and forgiveness of certain receivables.
As a result of this offer, in the fourth quarter of 2020, it recorded a reduction of revenue of $107 million and additional expenses of $33 million, primarily related to the impairment of long-lived assets.
Healthcare (30.3 percent of revenues) revenue grew 4.0 percent, driven by growth in both healthcare and life sciences. Performance in healthcare improved, driven by strength in payer clients and software license sales. Within life sciences, strength in pharmaceutical clients was partially offset by weakness in medical device clients.
Products and Resources (22.7 percent of revenues) revenue decreased 1.6 percent, driven by retail, consumer goods, travel and hospitality clients that were particularly adversely affected by the pandemic, partially offset by double-digit constant currency growth in manufacturing, logistics, energy and utilities.
Communications, Media and Technology (15.8 percent of revenues) revenue increased 4.6 percent, including a negative 790 basis point impact from the exit of certain content-related services, driven by growth in both technology and communications and media, which benefited from recent acquisitions.
First Quarter and Full Year 2021 Outlook
First quarter revenue is expected to be $4.34-$4.38 billion, or growth of 2.8-3.8 percent (1.0-2.0 percent in CC). This assumes an estimated positive 180 basis points foreign exchange impact and a negative 85 basis points impact from the exit of certain content services.
Full year 2021 revenue is expected to be $17.6-$18.1 billion, or growth of 5.5-8.5 percent (4.0-7.0 percent in CC). This assumes an estimated positive 150 basis points foreign exchange impact and a negative 30 basis points impact from the exit of certain content services.