Cognizant Technology Solutions Corp. recently reported an 11% YoY rise in revenue in constant currency to $4.7 billion for the third quarter ended September. Its business momentum, especially in digital services, continued to improve. The company follows a January to December accounting year.
“I’m pleased with our third-quarter performance. While the industry faces an unprecedented competition for talent, we attracted a record number of employees to Cognizant and stayed focused on delivering against our client commitments and our strategic repositioning. We continue to make important investments to ensure Cognizant is well-positioned to serve our clients as they embrace digital business models,” said Brian Humphries, Chief Executive Officer.
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The company’s digital revenue grew 18% annually and contributed 44% to total revenues for the quarter under review as digital bookings continued to grow. It continues to focus on its priority areas of digital engineering, artificial intelligence (AI) and analytics, cloud, and the internet of things (IoT).
Cognizant expects its full-year 2021 revenue to grow 9.8% in constant currency to $18.5 billion, which would be its highest annual revenue to date, towards the higher end of its earlier guidance of $18.4 billion to $18.5 billion.
During the third quarter, the company repurchased 1.3 million shares for $100 million at an average price of $76.10 under its share repurchase program. As of September 30, 2021, there was $2.2 billion remaining under the current share repurchase authorization. In October 2021, the company declared a quarterly cash dividend of $0.24 per share for shareholders of record on November 19, 2021.
Some key highlights from Q3 were:
- Double-digit revenue growth of 12% YoY; delivered $4.7B in Q3 2021, with all segments growing to plan and executing against Cognizant’s transformation strategy.
- Digital revenue represents 44% of total revenue, growing 18% in Q3.
- The fiscal year 2021 guidance is for 11% revenue growth to $18.5B, which would be Cognizant’s highest annual revenue to date.
- The company has invested $3B in strategic M&A over three years, including Q3 acquisitions of TQS Integration and Hunter Technical Resources.
- Attracted record number of new employees in Q3; at a global headcount of 318,400, Cognizant is staffed at the highest levels ever.
- Turbocharged hiring engine brought on 17,000+ net new hires in the quarter; the company has grown headcount 35,000+ people since this time last year.
- Supporting career growth within the company with various initiatives — evolved approach to promotions, new internal job boards, new training and development programs, etc.
Jan Siegmund, Chief Financial Officer, said, “During the third quarter, we drove strong bookings growth and maintained our revenue momentum in a robust demand environment. We are pleased with our ongoing investments in recruiting, which enabled us to support accelerating demand by meaningfully scaling our headcount. We now expect full-year revenue growth of approximately 10% in constant currency, towards the high-end of our prior range”.