Cognizant Technology Solutions has raised its annual revenue forecast following a strong second-quarter performance, spurred by businesses increasingly seeking digital transformation services.
The company, based in New Jersey, now expects annual revenue to be between USD 19.3 billion and USD 19.5 billion, an increase from its previous expectations of USD 18.9 billion to USD 19.7 billion. This upward revision reflects heightened demand for cloud-based solutions and digital consulting projects as businesses aim to enhance operational efficiency and cost-effectiveness in a landscape marked by easing inflation and expectations of lower interest rates.
In the second quarter, Cognizant reported revenue of USD 4.9 billion, with an adjusted profit per share of USD 1.17, which is over analysts’ estimates.
The company draws the bulk of its revenue from clients in North America and Europe and projects its third-quarter revenue to fall between USD 4.89 billion and USD 4.96 billion. This optimistic outlook points to the growing reliance of enterprises on IT services to modernise their operations.
"In the second quarter, we delivered revenue above the high end of our guidance range, expanded adjusted operating margin, and maintained our large deal momentum," said Ravi Kumar S, Chief Executive Officer, Cognizant.
"Progress against our strategic priorities is opening new opportunities with clients and allowing us to operate with greater agility. We believe our performance this quarter and the improved organic growth outlook for the full year demonstrate how our execution against these priorities is beginning to translate to our results and support long-term shareholder value," he added.
Cognizant’s performance echoes a similar trend seen with its Indian counterpart, Infosys, which also raised its annual revenue forecast earlier in July. Infosys reported a revival in demand from its core financial services sector, contributing to its better-than-expected quarterly results. Both companies are benefiting from a broader industry shift towards digital and cloud solutions, driven by the need for more efficient and cost-effective business processes.
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