Cognizant Q2 revenue up 9.5%, North America revenue grows 8.6%

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IT services giant Cognizant Technology Solutions Corp. (NASDAQ: CTSH) reported second-quarter revenue rose 9.5% on a constant currency basis. In North America, which comprises the lion’s share of revenue at the company, revenue was up 8.6% in constant currency.

“In a period of unprecedented labor market conditions characterized by elevated attrition and significant wage inflation, we focused on our client commitments and delivered balanced financial results in the second quarter,” CEO Brian Humphries said.

(US$ millions) Q2 2022 Q2 2021 % change % constant currency
Revenue                     4,906                     4,585 7.0% 9.5%
Net income                        577                        512 12.7%  

In financial services, growth was driven by US regional banking clients, strength in the UK and strength in the insurance industry. Growth was impacted by the sale of Samlink on Feb. 1.

Health sciences growth was led by digital services among pharmaceutical clients as well as demand for integrated software solutions.

Products and resources revenue was driven by strength among automotive, logistics, retail and consumer goods clients. The segment benefited from acquisitions that closed in the second quarter of last year.

Growth in “communications, media and technology” was driven by strength among digital native companies.

Revenue by industry vertical

(US$ millions) Q2 2022 % change % constant currency
Financial services                     1,542 2.7% 5.1%
Health sciences                     1,408 6.3% 7.6%
Products and resources                     1,140 8.1% 11.6%
Communication, media and technology                        816 16.1% 19.5%

Revenue by geography

(US$ millions) Q2 2022 % change % constant currency
North America                     3,656 8.4% 8.6%
UK                        458 13.6% 24.7%
Continental Europe                        445 -7.7% 2.5%
Rest of world                        347 5.8% 11.2%

Guidance

Cognizant forecast third-quarter revenue growth of between 5.0% and 6.0%, with growth in constant currency of between 7.5% and 8.5%.

Full-year revenue is forecast to grow between 6.3% and 7.3%; in constant currency, that growth is estimated at between 8.5% and 9.5%.

Share price and market cap

Shares in Cognizant were down 5.0% to $66.79 as of 12:02 p.m. Eastern time; they were 5.57% above their 52-week low, according to FT.com. The company had a market cap of $36.64 billion.