US-based IT giant Cognizant reported strong financial results for the third quarter of 2024, driven by increasing demand in Health Sciences and Financial Services and its investments in artificial intelligence.
The Nasdaq-listed company posted a net profit of USD 582 million, up 2.8 per cent sequentially and 10.8 per cent year-over-year. Quarterly revenue also saw a steady climb, reaching USD 5 billion, an increase of 4 per cent from the previous quarter and 3 per cent compared to the same period last year.
Buoyed by a healthy deal pipeline and robust performance in its largest verticals, Cognizant raised its full-year revenue growth forecast to 1.4-1.9 per cent in constant currency, up from its prior estimate of -0.5-1 per cent, including a 200-basis-point boost from acquisitions.
Cognizant’s investment in AI-driven platforms, such as its Neuro suite and Flowsource, has resonated well with clients and contributed to the signing of significant contracts. During the third quarter, the company closed six deals each worth over USD 100 million, bringing the total to 19 major deals for the year—a figure that already exceeds the company's total for 2023.
CEO Ravi Kumar S noted that the company’s focus on AI has helped drive its success in large deals. CFO Jatin Dalal added that operational efficiencies achieved through the NextGen program have supported margin expansion, helping Cognizant maintain an operating margin of 15.3 per cent for the quarter. The company expects its full-year adjusted operating margin to remain stable at 15.1 per cent.
Cognizant also reported an increase in headcount, with 3,800 new employees added in Q3, although the figure declined by 6,500 year-over-year due to an organic reduction after factoring in employees gained through its recent Belcan acquisition. Attrition rose to 14.6 per cent, but CEO Kumar shared a positive trend: approximately 13,000 former employees have rejoined the company globally.
The company has also embraced artificial intelligence in its operational processes, revealing it is producing around 2 million lines of code annually through AI tools.
