Cognizant reports ‘highest-ever’ quarterly revenue, and ‘largest’ percentage quarterly growth since 2015

Cognizant, one of the world's largest professional services companies, announced its second-quarter 2021 financial results. The company has reported the highest-ever quarterly revenue and the largest percentage quarterly growth since 2015. “We delivered a strong second quarter. Through targeted investments, we’ve been shifting our portfolio to faster-growing market segments while extending our capabilities and partnerships to help clients build modern businesses. I see a stronger, more competitive Cognizant emerging, with growing commercial momentum. We are bullish on the industry and our prospects within it,” said Brian Humphries, CEO, Cognizant.

Highlights of Cognizant Results are as follows:

• Revenue of $4.6 billion grew 14.6% year-over-year (12.0% in constant currency).
• Digital revenue grew approximately 20% year-over-year.
• $1.5 billion deployed on acquisitions, share repurchases and dividends year-to-date.
• 2021 revenue growth guidance increased to 10.2-11.2%, or 9.0-10.0% in constant currency.

“Second quarter top-line results exceeded our guidance, driven by improved demand for our services and momentum in our digital revenue, and we increased our full-year 2021 revenue growth to 10.2-11.2%,” said Jan Siegmund, chief financial officer, Cognizant. “To meet the strong client demand for our services, we have continued to scale our recruiting capabilities and invest in our people."

Other Important Highlights of Cognizant Results

Financial Services (32.8% of revenues) revenue grew 7.6% year-over-year, or 4.8% in constant currency, which included the benefit of recently completed acquisitions and growth in digital revenue. Revenue declines related to our non-digital services continued to pressure results as our clients optimize the cost of supporting their legacy systems and operations.

Healthcare (28.9% of revenues) revenue grew 14.5% year-over-year, or 13.4% in constant currency. Growth was driven in part by our integrated software solutions for our healthcare clients and broad-based demand from our life sciences customers.

Products and Resources (23.0% of revenues) revenue grew 21.7% year-over-year, or 17.8% in constant currency, which included the benefit of recently completed acquisitions and was driven by manufacturing, logistics, energy and utilities clients. Growth among our retail, consumer goods, travel and hospitality clients reflects improving demand for our services despite continued elevated uncertainty related to the pandemic.

Communications, Media and Technology (15.3% of revenues) revenue grew 21.2% year-over-year, or 17.9% in constant currency. Revenue growth included the benefit of recently completed acquisitions and increased demand from technology clients. The impact from our exit of certain content-related services negatively impacted segment growth by approximately 190 basis points.

In addition to the above, year-over-year revenue growth across all segments reflects the impact on 2020 revenues from the pandemic and the April 2020 ransomware attack.

Third quarter and full year 2021 outlook for Cognizant

The Company provided the following guidance:

• Third quarter revenue is expected to be $4.69-$4.74 billion, or growth of 10.6-11.6% (10.0-11.0% in CC).
• Full year 2021 revenue is expected to be $18.4-$18.5 billion, or growth of 10.2-11.2% (9.0-10.0% in CC).
• Full year 2021 Adjusted Operating Margin<2> is expected to be approximately 15.4%.
• Full year 2021 Adjusted Diluted EPS2 is expected to be in the range of $4.00-$4.06.