Cognizant Technology Solutions has reported a net profit of $648 million for the fourth quarter ended December 2018, compared to a net loss of $18 million in the fourth quarter of 2017. Revenue was up 8 per cent to $4.13 billion ($3.83 billion). It has also announced major executive changes effective April 1.

The fourth-quarter 2017 net loss included a one-time incremental income tax expense of $617 million, related to the implementation of the US Tax Cuts and Jobs Act.

For full-year 2018, the company has reported a 40-per cent increase in net profit to $2.10 billion ($1.50 billion) on 9-per cent increase in revenue to $16.13 billion ( $14.81 billion).

“Digital continues to permeate and power every industry, creating a substantial market opportunity for us across industries, geographies and buyer groups we serve. With a disciplined plan for executing our digital strategy, we have set Cognizant up for the next stage of sustainable strong growth and value creation,” said Francisco D’Souza, Vice Chairman and CEO.

For the first quarter of 2019, the company has issued a guidance for 7.5-8.5 per cent annual revenue growth; for full-year 2019, it is expected to be in the 7.0-9.0 per cent range (both in constant currency terms).

Around 7,400 employees were added during the fourth quarter of 2018 and 21,600 during the full year, taking the company’s global headcount to around 281,600 employees as of December 31, 2018. The company reported annualised attrition of 19 per cent during the fourth quarter (including BPO and trainees).

In the fourth quarter, consulting and technology services and outsourcing services contributed 58.2 per cent and 41.8 per cent of revenue, respectively. Cognizant added seven strategic customers in the quarter, defined as clients that have the potential to generate at least $5 million to $50 million or more in annual revenue, bringing the total number of strategic clients to 385.

Humphries is the new CEO

In a major management change, Cognizant named Brian Humphries, currently CEO of Vodafone Business (a part of the Vodafone Group helping companies succeed in digital world through its expertise in connectivity and IoT platform) as the new CEO. It also announced that Rajeev Mehta will step down as President (both effective April 1).

D’Souza, who co-founded Cognizant and served as CEO since 2007, will serve as full-time Executive Vice Chairman to facilitate the transition through June 30, 2019. Thereafter, he will remain on the board as Vice Chairman, the release said.

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