IT service provider Cognizant said third-quarter revenue rose 3 percent to $5.04 billion despite its efforts to win AI deals.
Cognizant has generated Q3 revenue of $3.7 billion (up 3.8 percent) from North America, $1 billion (down 0.3 percent) from Europe and $300 million (up 4.3 percent) from Rest of the World.
Financial Services (up 0.7 percent) and Health Sciences (up 7.8 percent) are the two largest segments for Cognizant with revenue of $1.5 billion each. The other segments include Products & Resources with revenues of $1.2 billion (up 5 percent) and Communications, Media & Technology with revenues of $800 million (down 3.7 percent).
Cognizant’s Financial Services business has generated revenue of $1.048 billion (up 0.8 percent) from North America, $303 million (down 1.3 percent) from Europe and $135 million (up 5.5 percent) from the Rest of the World.
Cognizant’s Health Sciences business has generated revenue of $1.295 billion (up 8.5 percent) from North America, $190 million (up 4.4 percent) from Europe and $29 million (flat) from the Rest of the World.
Cognizant’s Products & Resources business has generated revenue of $564 million (down 2.8 percent) from North America, $311 million (up 7.2 percent) from Europe and $89 million (down 5.3 percent) from the Rest of the World.
Cognizant’s Communications, Media & Technology business has generated revenue of $1.048 billion (up 0.8 percent) from North America, $163 million (down 14.7 percent) from Europe and $89 million (up 17.1 percent) from the Rest of the World.
The IT services company forecasts Q4 revenue between $5 billion and $5.1 billion.
Cognizant raised its annual revenue guidance to $19.7 billion – $19.8 billion, up from a prior forecast of $19.3 billion – $19.5 billion.
The results indicate a recovery in business demand, as more clients turn to Cognizant for IT and consulting services to support digital transformation.
Cognizant said bookings in the third quarter were flat. On a trailing-twelve-month basis, bookings declined 2 percent to $26.2 billion, which represented a book-to-bill of approximately 1.3x. During the quarter, Cognizant signed six deals each with total contract value of $100 million or greater.
Voluntary attrition in tech services on a trailing-twelve months basis was 14.6 percent as compared to 16.2 percent for the period ended September 30, 2023. Total headcount at the end of the third quarter was 340,100 including Belcan, an increase of 3,800 from Q2 2024 and a decrease of 6,500 from Q3 2023.
Cognizant CEO Ravi Kumar noted increased spending from clients and wallet share gains, particularly in financial services.
Cognizant is diversifying by expanding into aerospace and defense through its recent $1.3 billion acquisition of Belcan.
Rival Accenture reported strong results in September, highlighting the sustained demand for consulting and IT services across the industry.
Baburajan Kizhakedath
