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Cognizant Q1 revenue up by 20 percent clocking $2.42 billion

Cognizant's Q1 records a net income of $348.9 million, up 22.8 percent from $284.2 million, a year ago

Debojyoti Ghosh
Published: May 7, 2014 07:34:36 PM IST
Updated: May 7, 2014 08:03:36 PM IST

US-headquartered software-services firm Cognizant on Wednesday posted a 2.8 percent sequential rise in dollar-revenue growth during the January-March stretch, ahead of its Indian rivals TCS, Infosys and Wipro.   
India’s largest IT-services exporter TCS recorded a top-line growth of 1.9 percent for the quarter ended March, while Wipro posted a growth of 2.5 percent. Bangalore-based Infosys recorded a 0.4 percent sequential decline in dollar revenue hit by muted business in some of its key verticals. However, Noida-headquartered HCL Technologies posted a 3 percent quarterly rise leading the top-tier Indian IT pack.
Cognizant, which has majority of its workforce based in India, recorded a net income of $348.9 million, up 22.8 percent from $284.2 million, a year ago.  However, in comparison, the TCS bottomline was more than double that of Cognizant’s at $861 million during the January-March period. Infosys posted a net profit of $487 million during the same stretch. For the March quarter, the Nasdaq-listed IT firm’s revenue stood at $2.42 billion, up 20 percent from $2.02 billion in the corresponding period last year.
Over the last two fiscals, Cognizant was busy disrupting the order of the Indian IT industry. In terms of sequential dollar revenue growth, it first overtook Wipro and then in 2012, it outperformed Infosys. Last year during the March quarter, it edged past TCS in sequential dollar revenue growth.
"Cognizant continues to be well positioned to help clients as they face the secular shifts impacting their businesses," said Francisco D’Souza, chief executive officer, Cognizant in a statement. 
For fiscal 2014, Cognizant, which follows the calendar year, expects its annual revenue to be at least $10.3 billion, up 16.5 percent compared to 2013.
"We remain confident in the overall demand environment and in our ability to deliver our previously stated revenue guidance of at least $10.3 billion for 2014, up at least 16.5% over 2013,” noted Gordon Coburn, President, Cognizant, adding that the company’s strategy of re-investing in business is “clearly paying off." 
Cognizant’s operating margin during the March quarter stood at 19 percent, while among the top-tier Indian IT players, TCS’ operating margin was highest during the January-March stretch at 29.1 percent followed by Infosys at 25.48 percent. Operating margin for HCL Tech stood at 24.7 percent, a 100 basis points sequential jump, while Wipro’s margin expanded by 150 basis points sequentially to 24.5 percent. 
The New-Jersey headquartered IT firm had a net addition of 7,200 employees during the quarter taking its total headcount to 178,600 employees as of March, 2014. 
In terms of geography, the UK region saw a 12.8 percent sequential growth for Cognizant, hitting the $1 billion run rate for the first time. It was backed by growth across industries including financial services and high technology. 

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