Cognizant announced its Q1 2021 financial results with revenue of 4.4 billion USD at 4.2 per cent up, 2.4 per cent in constant currency. The revenue growth guidance for 2021 increased to 7-9 per cent.
Key Highlights of Cognizant Technology Solutions Q1, 2021 Results:
- Revenue of $4.4 billion grew 4.2% year-over-year
- Cognizant Spent $700 million on acquisitions, share repurchases and dividends in Q1 2021
- Digital revenue up by ~15% year-over-year; account for 44% of revenue
- Total Cognizant headcount as of March 30, 2021, is 296,500
- Total Cognizant Attrition is 21% which is the highest among its other IT peers such as TCS, Infosys, and Wipro.
- Cognizant Acquired 4 companies during January, February, and MArch in 2021; these companies are ESG Mobility, Magenic Technologies, Linium, and Servian.
Cognizant Quarterly Performance by Business Segment
- Financial services, which generated 33.1 per cent of total revenue, its revenue grew 0.5 percent YoY, decreased 1.7 percent in constant currency as revenue growth generated by digital services in banking and insurance was offset by declining non-digital revenue as clients continue to optimize the cost of supporting their legacy systems and operations.
- Healthcare business contributed 29.3 percent of its total revenue. Healthcare revenue rises 7.9 percent YoY, 7 percent in constant currency. Its revenue benefited from increased demand for integrated payer software solutions and continued strong demand among its life sciences clients.
- Products and resources (which generates 22.7 percent revenue) revenue grew 4.6 percent YoY basis, 2.4 percent in constant currency. Revenue among manufacturing, logistics, energy, and utilities clients grew double-digits for the fourth consecutive Quarter while retail, consumer goods, travel, and hospitality clients continued to be adversely affected by the pandemic.
- The Communications, Media, and Technology segment of Cognizant revenue grew 5 percent YoY and 3.1 percent in constant currency. This business segment generated 14.9 percent of total revenues; recent acquisitions benefitted it. However, double-digit YoY revenue rise among tech clients was offset by Cognizant’s exit of certain content-related services, which adversely affected YoY segment growth by 600 basis points. Additionally, clients exposed to studios and theme parks continued to be adversely affected by the COVID-19.
Cognizant purchased 3.1 million shares for 234 million USD this year at an average price of 75.8 USD under the share buyback program. It also announced a cash dividend of 0.24 USD/ share.
The company expects revenue growth of 10.5 to 11.5 percent in Q2 and 7 to 9 percent in FY21. As a result, the adjusted Operating Margin is anticipated at 15.2 -15.7 percent.
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