Cognizant (Nasdaq: CTSH), one of the world’s leading professional services companies, today announced its second quarter 2023 financial results.
“We made continued progress during the quarter amid an uncertain economic backdrop,” said Ravi Kumar S, Chief Executive Officer. “We maintained our commercial momentum, with strong bookings growth of 17% year over year, including roughly a third of in-quarter bookings from large deals. We also saw a return to sequential revenue growth, and our initial investment in the Cognizant Neuro AI platform has helped drive more than 100 early engagements as clients embrace generative AI. The continued reduction in our voluntary attrition, improved employee engagement and higher customer satisfaction scores reflect the interdependence of our client and employee experience.”
“We also announced that our CFO Jan Siegmund intends to retire in early 2024. As we begin the search for the Company’s next CFO, we appreciate Jan’s many contributions to Cognizant over the past three years. I would also like to personally thank Jan for his partnership since I joined the team in January, and his willingness to work collaboratively with his eventual successor to ensure a smooth transition.”
“Cognizant’s second quarter revenue grew more than 1% sequentially, at the high-end of our guidance range, while profitability was slightly ahead of expectations,” said Jan Siegmund, Chief Financial Officer. “Our NextGen program is on track and yielding early savings through our efforts to structurally reduce our cost base to fund investments for growth. Maintaining our balanced capital allocation approach, we have returned over $700 million to shareholders year-to-date.”
Select Client and Partnership Announcements
- Extended and expanded partnership with Gilead Sciences. The agreement includes renewal and expansion of Cognizant services for a total expected value of $800 million over the next five years. Cognizant will manage Gilead’s global IT infrastructure, platforms, applications and advanced analytics, and lead initiatives designed to accelerate its digital transformation, leveraging the power of generative AI. This collaboration is aimed at enabling Gilead to streamline various parts of its business with the goal of faster time to market of various medicines for life-threatening diseases.
- Announced expanded strategic partnership with ServiceNow to accelerate adoption of AI-driven automation across industries. Cognizant’s newly formed multi-disciplinary ServiceNow Business Group significantly expands the decade-long relationship between the companies and will bring to market integrated offerings designed to solve complex problems, automate operations and enhance employee and end-customer experiences through the use of AI.
- Expanded long-standing strategic alliance with Google Cloud, offering innovative industry solutions founded on the tenet of responsible AI. By leveraging Google Cloud’s suite of industry-leading AI products, the alliance will support enterprise customers on their AI journey to create, migrate and modernize businesses across an array of industries. In addition, Cognizant will open new Google Cloud AI innovation centers in Bangalore, London and San Francisco to support a new Cognizant Google Cloud AI University to train 25,000 Cognizant associates and clients.
- During the quarter, we signed a new multi-year agreement with Nuance Communications, a Microsoft Company, to help scale the resources for Nuance’s Dragon Ambient eXperience (DAX) Operations. The DAX solution is at the forefront of conversational AI and ambient clinical intelligence. Cognizant’s services will be essential to Nuance’s development and growth of DAX, especially as Nuance continues to expand DAX capabilities and deployments to solve the toughest challenges in healthcare. Cognizant teams will operate within the Nuance Global Security Network in close coordination with Nuance staff. We are excited about our partnership with Nuance, which is a complement to our own deep expertise in health sciences.
- Announced expanded global collaboration with AT&T by joining the AT&T Connected Climate Initiative (CCI), an industry consortium dedicated to eliminating one billion tons (the Gigaton Goal) of CO2 emissions by 2035 through the use of connectivity solutions and technology.
- Announced agreement with Accuray to support its deployment of SAP S/4HANA to obtain better data and analytics, and achieve greater business efficiencies. As part of a global agreement, Cognizant is providing planning, design, implementation, change management, and program management for sales, procurement, manufacturing, distribution, installation and service processes supported by SAP S/4HANA.
- Extended long-standing relationship with Orkla, a leading industrial investment company, to help enable both a transformative cloud migration and enhanced operational IT services.
- Cognizant introduced a new business group, Cognizant Ocean, to help support ocean industries, or the “blue economy”, navigate the effects of over-exploration and climate change, thereby reducing carbon output and supporting decarbonization of the oceans through the use of AI and data analytics. The company will collaborate with Tidal, a project inside X, Alphabet’s Moonshot Factory, to make Tidal’s AI-based ocean information platform widely available initially to the aquaculture market. The companies will explore additional ways to apply the platform to blue transportation, blue energy and blue carbon.