Cognizant Q3 revenue grows 35% y-o-y

BANGALORE: Cognizant Technology Solutions Corp., for the third quarter ended September 30, 2002, has posted revenue of $61.2 million, up 35 percent from $45.5 million in the third quarter of 2001, and up 13 percent sequentially from the second quarter of 2002. Net income for the third quarter has increased to $9.7 million from $6.1 million in the third quarter of 2001. Net income for the second quarter of 2002 was $8.6 million. The company added a gross addition of 1000 employees this quarter.

Operating margin for the quarter was 19.8 percent, compared to 19.7 percent in the second quarter of 2002. Gross margin was 46.2 percent, compared with 46.0 percent in the second quarter of 2002 and 49.2 percent in the year ago quarter. The Company’s higher than expected revenue performance increased bonus accruals during the quarter, affecting gross margins.

"We continue to experience high client satisfaction and retention as roughly 88 percent of our third quarter revenue was attributable to customers employing our services for more than one year. Application management revenue increased 14 percent sequentially and 47 percent year over year. Development revenue improved as well, exhibiting our ability to effectively cross-sell to existing customers.," said Cognizant, Chairman and Chief Executive Officer, Kumar Mahadeva.

The company has signed six new customers this quarter, the majority of which are blue chip companies with the potential for large revenue outlays.

"The strength of Cognizant’s business model is shown by the continued solid state of our balance sheet, as we generated an additional $19 million in cash flow this quarter, raising our cash position to $123 million. This is in part attributable to our ability to lower DSO, including unbilled receivables, to 59 days, from 64 at the end of June. Financial Services customers represented 35 percent of our revenue mix compared to 30 percent last quarter as we continue to receive strong recognition from large insurance companies, transaction processors and commercial banks. Given our client demands, we accelerated our hiring and added close to 1,000 consultants this quarter, bringing our total headcount to 5,200," remarked said Cognizant, Chief Financial Officer, Gordon Coburn.