Cognizant Technology Solutions reported a 6 per cent drop in net profit to $546 million for the first quarter ended March 31, 2024, compared to $580 million for the same period last year. Revenue of $4.8 billion declined 1.1 per cent year-over-year.
Bookings in the first quarter declined 6 per cent year-over-year. On a trailing twelve-month basis, bookings grew 1 per cent year-over-year to $25.9 billion, representing a book-to-bill of approximately 1.3X.
Employee Metrics
Total headcount at the end of the first quarter was 344,400, a decrease of 3,300 from Q4 2023 and 7,100 from Q1 2023. Voluntary attrition - Tech Services, on a trailing twelve-month basis, was 13.1 per cent compared to 23.1 per cent for the period that ended on March 31, 2023, the company said.
“During the first quarter, we delivered revenue above the high-end of our guidance range and continued to make progress against our strategic priorities,” said S Ravi Kumar, CEO of Cognizant. “We have built upon our large deal momentum of 2023, signing eight deals during the quarter, each with a total contract value of at least $100 million. As our clients navigate an uncertain economic environment, we are adapting to the market dynamics by helping them achieve operational efficiencies, supporting their innovation agendas, and preparing them for AI-driven transformation across their businesses,” he said.
“The first quarter’s adjusted operating margin of 15.1 per cent per cent expanded by 50 basis points year-over-year, driven by our NextGen program. We remain focused on operational excellence and cost discipline as our clients continue to limit discretionary spending,” said Jatin Dalal, Chief Financial Officer.
“Our recently completed acquisition of Thirdera, an industry-leading ServiceNow partner, is already opening new growth opportunities and expanding our pipeline. As part of our balanced capital allocation strategy, we continue to seek organic and inorganic investment opportunities to accelerate our growth profile, expand our capabilities, and diversify our portfolio mix,” he said.
Second Quarter and Full-Year 2024 Guidance (all growth rates year-over-year). Revenue is expected to be $4.75 - $4.82 billion, a decline of 2.9 per cent to a decline of 1.4 per cent.
Full-year 2024 revenue is expected to be $18.9 - $19.7 billion, a decline of 2.2 per cent to a growth of 1.8 per cent as reported, or a decline of 2.0 per cent to a growth of 2.0 per cent in constant currency. This assumes up to 100 basis points of inorganic contribution.
During the quarter, the company signed an agreement with Telstra, Australia’s leading telecommunications and technology company, to elevate its software engineering capabilities and enhance its customers’ experience. We will leverage our AI tools to drive innovation, enable more efficient software engineering and IT operations, and decommission legacy systems to improve operational efficiency and support their employee experience.
The company expanded its partnership with Microsoft, which will leverage Microsoft Copilot and Cognizant’s advisory and digital transformation services to help employees and enterprise customers operationalise generative AI and realise strategic business transformation. The partnership aims to make Microsoft’s generative AI and Copilots available to millions of users, transform enterprise business operations, enhance employee experiences, and accelerate cross-industry.