Cognizant expects drop in revenue in Q2 as tech spending dips

Cognizant announced its financial result  – indicating that there will be a decline in its sales revenue during the current quarter and for the full year.
Cognizant revenue Q1 2024Cognizant said second quarter revenue is expected to be $4.75 billion – $4.82 billion, a decline of 2.9 percent to a decline of 1.4 percent.

Cognizant said full-year 2024 revenue is expected to be $18.9 – $19.7 billion, a decline of 2.2 percent to growth of 1.8 percent.

Cognizant’s forecast on its revenue does not reflect the latest Gartner report that said spending on IT services will be increasing at 9.7 percent to $1,519.928 billion in 2024.

Cognizant’s revenue declined 1.1 percent to $4.8 billion with operating margin of 14.6 percent in January-March 2024.

Cognizant has generated sales revenue of $3.5 billion (down 0.7 percent) from North America, $1 billion from Europe (flat growth), $300 million (down 8.5 percent) from the rest of the world.

Cognizant has generated sales revenue of $1.4 billion (down 6.2 percent) from Financial Services, $1.4 billion (down 1.2 percent) from Health Sciences, $1.1 billion (up 1.3 percent) from Products & Resources and $900 million (up 5.2 percent) from Communications, Media & Technology during January-March 2024.

“During the first quarter, we delivered revenue above the high-end of our guidance range and continued to make progress against our strategic priorities,” said Ravi Kumar S, Chief Executive Officer. “We have built upon our large deal momentum of 2023, signing eight deals during the quarter, each with a total contract value of at least $100 million.”

Cognizant’s bookings in the first quarter declined 6 percent. On a trailing-twelve-month basis, bookings grew 1 percent year-over-year to $25.9 billion, which represented a book-to-bill of approximately 1.3x.

Cognizant said headcount at the end of the first quarter was 344,400, a decrease of 3,300 from Q4 2023 and a decrease of 7,100 from Q1 2023. Voluntary attrition on a trailing-twelve months basis was 13.1 percent as compared to 23.1 percent for the period ended March 31, 2023.

Baburajan Kizhakedath

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