Cognizant Reports First Quarter 2019 Results

Cognizant Technology Solutions Corporation, which is ranked 195 on the Fortune 500 and is consistently listed among the most admired companies in the world, announced its first quarter 2019 financial results.

Highlights - First Quarter 2019

• Quarterly revenue rose to $4.11 billion, up 5.1% (6.8% in constant currency1) from the year-ago quarter.
• GAAP operating margin was 13.1% compared to 17.7% in the year-ago quarter.
• Adjusted Operating Margin1 was 16.0% compared to 17.7% in the year-ago quarter.
• Net income was $441 million compared to $520 million in the year-ago quarter.
• Quarterly GAAP diluted EPS was $0.77, compared to $0.88 in the year-ago quarter.
• Quarterly Adjusted Diluted EPS1 was $0.91, compared to $0.94 in the year-ago quarter.
• First quarter 2019 GAAP operating results include the $117 million incremental accrual related to the India Defined Contribution Obligation2.

"Cognizant's growth and performance in the quarter leaves room for improvement," said Brian Humphries, Chief Executive Officer. "While I am encouraged by our client centricity, our employees' winning spirit and our innovation, we are not yet delivering against the market opportunity. We are committed to strengthening our execution to invest in growth and drive shareholder value."

First Quarter 2019 Performance by Business Segment

Financial Services (34.9% of revenues) revenue declined 1.7% year-over-year and was flat in constant currency. Segment revenue was primarily impacted by continued softness in our business with a few of our largest banking clients and several insurance and North American regional banking clients. During the quarter the company made progress in furthering its platforms and solutions strategy for banking clients through the acquisition of MeritSoft.

Healthcare (28.3% of revenues) revenue grew 3.9% year-over-year and 4.6% in constant currency. Segment revenue was negatively impacted by continued industry consolidation as well as the accelerated movement of work to a captive at a large North American client. Life Sciences delivered above company average growth, driven by large enterprise deals and momentum with our industry specific platforms.

Products and Resources (22.2% of revenues) revenue grew 11.3% year-over-year and 13.8% in constant currency, driven by double digit growth across key industries including retail and consumer goods, travel and hospitality, and manufacturing, logistics, energy and utilities. Results reflect continued strength in cloud and digital engineering services and increased demand for interactive, IoT and analytics solutions across clients.

Communications, Media and Technology (14.5% of revenues) revenue grew 16.9% year-over-year and 19.6% in constant currency, led by growth among technology clients. Within media and communications, growth was driven primarily by digital services for media and entertainment clients to accelerate their transformation to modern media companies, partially offset by slower growth with communications clients involved in industry consolidation. Technology delivered double digit growth driven primarily by our digital content solutions.