TEANECK, N.J. - Cognizant Technology Solutions (NASDAQ:CTSH) Corporation (NASDAQ:CTSH) reported a stronger-than-expected performance for the second quarter of 2024, with earnings surpassing analyst estimates.
The company announced an adjusted EPS of $1.17, which was $0.05 higher than the analyst estimate of $1.12. Revenue for the quarter was also above expectations, coming in at $4.85 billion against the consensus estimate of $4.8 billion.
The company's revenue for the second quarter reflected a slight decline of 0.7% from the same quarter last year, but when adjusted for constant currency, the decline was a narrower 0.5%. The adjusted operating margin expanded by 100 basis points YoY, reaching 15.2%.
Cognizant's CEO, Ravi Kumar S, attributed the strong quarter to revenue exceeding guidance, margin expansion, and sustained large deal momentum. He emphasized that the company's strategic priorities are creating new client opportunities and enhancing agility, which is translating into improved performance and long-term shareholder value.
For the third quarter of 2024, Cognizant expects revenue to be between $4.89 billion and $4.96 billion, aligning with the analyst consensus of $4.911 billion. The midpoint of this guidance range suggests a potential for flat to 1.5% growth in constant currency terms. Looking ahead to the full year, the company has narrowed its revenue guidance to a range of $19.3 billion to $19.5 billion, which at the midpoint indicates a slight increase over the consensus estimate of $19.404 billion. Adjusted EPS guidance for the full year is set at $4.62 to $4.70, with the lower end matching the analyst consensus.
Cognizant's CFO, Jatin Dalal, noted that the sequential revenue growth of 2.1% in constant currency was the strongest in two years, driven by the Financial Services and Health Sciences segments. The company's NextGen program has been instrumental in funding growth investments and delivering margin expansion. Employee metrics also showed improvement, with voluntary attrition in Tech Services decreasing to 13.6% from 19.9% a year ago.
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