Cognizant posts Q2 net profit of $82.3-m

NEW JERSEY: Cognizant Technology Solutions Corporation, today posted net income of $82.3 million for the second quarter ended 30 June 2007, as against $55.1 million posted in the corresponding quarter previous year.

Revenue for the second quarter increased to $516.5 million, up 12 per cent from $460.3 million in the first quarter of 2007, and up 53 per cent from $336.8 million posted in the corresponding quarter previous year.

Operating margin for the quarter was 17.6 per cent. Excluding stock based compensation expense of $9.5 million, non-GAAP operating margin was 19.4 per cent, in-line with the company's targeted 19 to 20 per cent range.

"We are very pleased with our strong second quarter financial results, which further extend our track record of industry-leading growth," said Francisco D'Souza, president and CEO of Cognizant. "During the quarter, we surpassed the $2 billion annual revenue run rate, achieving this milestone just six quarters after surpassing a $1 billion annual revenue rate in the fourth quarter of 2005.”

“Our operating margin for the quarter was within our target range and reflects our ability to effectively manage our business to offset macroeconomic headwinds, such as the recent appreciation of the Indian Rupee, while continuing to expand our proven growth platform around the world," he added.

Gordon Coburn, chief financial and operating officer, Cognizant, said, "In order to support our future growth, Cognizant's Board of Directors has approved plans to make an additional $100 million investment in our previously announced infrastructure expansion program across India. The expanded construction plan at our new Chennai campus, located in a Special Economic Zone ("SEZ"), has now doubled in size with over two million square feet of capacity currently under construction.”

“We have also increased the size of the first phase of planned construction of our SEZ facility in Coimbatore to over 725,000 square feet, and are acquiring additional property in Hyderabad and Chennai. We expect this investment to enhance our flexibility to meet the escalating demand for our services from both new and existing customers around the world. As a result of the strong demand environment, we are raising our guidance for full year 2007."