Cognizant expects revenue to drop as financial services hit sales

Cognizant has reported revenue of $4.8 billion in the fourth quarter of 2022, showing 1.3 percent growth against the same period previous year.
Cognizant HungaryCognizant’s annual revenue increased to $19.4 billion in 2022 from $18.5 billion in 2021.

Cognizant said its first quarter revenue is expected to be $4.71-$4.76 billion, a decline of 1.5 percent to 2.5 percent. Cognizant is not providing full-year guidance at this time and intends to provide an update in its next earnings release in early May.

Cognizant’s inability to offer revenue guidance for the current year assumes significance as IT industry is expecting a slowdown in 2023.

But the latest Gartner report said enterprise spending on IT services is forecast to grow 5.5 percent in 2023 to $1,312.588 billion as against 3 percent increase in 2022 to $1,244.746 billion.

Cognizant’s headcount at the end of the fourth quarter was 355,300, an increase of 5,900 from Q3 2022 and an increase of 24,700 from Q4 2021. Voluntary attrition, on a quarterly annualized basis, fell to 19 percent from 29 percent in Q3 2022 and 31 percent in Q4 2021. Voluntary attrition, on a trailing-twelve-month basis, dropped to 26 percent from 28 percent in Q4 2021.

“My immediate focus is on creating the conditions for our associates to excel and ensuring that all 355,000 of us operate with a growth mindset,” said Ravi Kumar S, Chief Executive Officer of Cognizant said in its earnings report.

Cognizant has generated revenue of $1.481 billion (–4.3 percent) from Financial Services, $1,426 billion (+4.1 percent) from Health Sciences, $1.148 billion (+2.9 percent) from Products and Resources and $784 million (+5.4 percent) from Communications, Media and Technology.

Cognizant said bookings grew 12 percent in the fourth quarter and 4 percent to $24.1 billion in 2022, which represented a book-to-bill of approximately 1.2x.

“IT services spending is growing more quickly than internal services in every industry. Skilled IT workers are migrating away from the enterprise CIO towards technology and service providers (TSPs) who can keep up with increased wage requirements, development opportunities and career prospects,” John-David Lovelock, Distinguished VP Analyst at Gartner, said recently.

Related News

Latest News

Latest News