Cognizant secures a buoyant Q2 - ups guidance

Cognizant yesterday reported its Q2 2013 revenues (the company follows Jan- Dec fiscal pattern). Both top line and bottom line saw impressive growth. While the net profit saw an impressive increase of 19% (from $251.9 mn previous year to $300.4 mn) the top line grew by 20.4% to $2.1 bn. With good numbers under its sleeve the company has said that the fiscal 2013 revenue expected to be at least $8.74 billion, up at least 19% compared to 2012. (previously it had given a revenue guidance of $8.6 bn)

Commenting on the results, Francisco D' Souza, CEO, Cognizant said, " Our 15 year record of revenue and earnings growth is a testament to our long-term strategy of reinvesting in our business to stay relevant to our clients' changing needs and to provide increasing value as we grow each of those trusted relationships. This reinvestment strategy continues to enable Cognizant to excel in our core services while simultaneously investing in multiple horizons of growth, thereby continuing to position us well for the future"

Key highlights during Q2

Over the quarter the company continued to expand and strengthen its US delivery and operations capabilities to support our BPO services. As part of this effort, Cognizant has recently completed acquisition of SourceNet Solutions, an accounts payable service provider located in Texas, which was owned by its long-time global financial services client, BNY Mellon. This acquisition brings SourceNet's processing platform to Cognizant. The company's revised revenue guidance of at least $8.74 billion for fiscal 2013 includes $10 million of expected revenue from the acquisition of SourceNet Solutions.

The company also informed that its acqsuition of six companies of the C1 Group in Q1, which has strong presence in Germany and its integration, is going on well. Leveraging on the capabilities of C1, Cognizant is looking at upping its ante in the German market.

Meanwhile in Q2, Cognizant saw more deals on integrating applications and infrastructure, and delivering significant value to clients from their synergies. During the quarter, it won several large deals-some of them being end-to-end, multi-year IT Infrastructure deals that included data center migration, provisioning and support leveraging on its recently added data centers. For instance its deal with Orkla, the Nordic's leading supplier of branded consumer goods is on such example.. Under a five-year agreement, Cognizant will provide a broad range of applications and end-to-end infrastructure management services to Orkla, delivering a more stable and scalable technology environment, improving service quality, predictability, flexibility and business agility.

Outlook

The company's performance during Q2 has given it the confidence to sign out of 2013 with 19% revenue growth. Moreover overall all the leading IT services vendors have had a good Q2 and that it shows the recovery in the IT services space and the unfreezing of big ticket strategic outsourcing deals in the industry. Right now Cognizant is in excellent financial health- for instance the company informed that it finished the second quarter with approximately $2.9 billion of cash and short-term investments.

So with these numbers Cognizant continues to put very robust and consist performance.