Cognizant sees 11% rise in Q3 revenues
The company with more than 70% of its executives operating out of India reported a steep quarterly annualized voluntary attrition rate of 33% in Sept qtr
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Bengaluru: IT service major Cognizant posted sound third quarter earnings with 11 per cent rise in revenues over the previous period though elevated attrition level continued to haunt the company. The Teaneck, New Jersey-based Cognizant, which follows January-December financial year cycle, reported an 11 per cent year-on-year rise in revenue in constant currency to $4.7 billion for the third quarter ended September. The IT services firm expects its full year 2021 revenue to grow 9.8 per cent in constant currency to $18.5 billion, which would be its highest annual revenue to date. Its net profit rose 56.3 per cent at $544 million. However, the company with more than 70 per cent of its executives operating out of India reported a steep quarterly annualized voluntary attrition rate of 33 per cent in September quarter. This is the highest attrition rate among its peers in the industry.
"We executed well in the third quarter, delivering revenue of $4.7 billion, up 11.8 per cent year-over-year or 11 per cent in constant currency. Bookings growth, a key leading indicator, accelerated to 24 per cent y-o-y growth in the third quarter," Cognizant Chief Executive Officer Brian Humphries said during the investor call.
Digital revenue of the company grew 18 per cent over the same period last year and represents 44 per cent of Cognizant's overall revenue mix. While Cognizant saw its financial services revenue growing 5.1 per cent y-o-y, healthcare vertical rose 10 per cent over the same period a year ago. Its products and resources revenue expanded by 19.4 per cent y-o-y, while communications, media and technology revenue increased 20 per cent over the same period of last fiscal year. Cognizant's headcount rose to 3,18,400 people at the end of the September 2021 quarter, up from about 3,01,200 employees in the June quarter.
"Despite elevated attrition, we increased our net headcount in Q3 by over 17,000 sequentially, which speaks to the tremendous work and effectiveness of our recruitment team. Given our focus in recent years on accelerating fresher hiring in India, we've made meaningful progress on addressing our pyramid," Humphries said.
Like its peers, the IT firm is aggressively hiring fresh college graduates to overcome the supply-side challenges. The company is planning to make offers to 45,000 new graduates in India for onboarding in 2022.
"We are continuing our comprehensive programme to support our associates career growth and engagement to a range of initiatives that include: committed annual increases and evolved approach to promotions, job board, so associates can easily explore open leadership roles company-wide, abundant new training and development programs, sustained communication with our commitment to belonging and inclusion across our company and to society more broadly," Humphries added.
