Cognizant shares Q2 report card, raises revenue guidance

NEW JERSEY, USA: Cognizant Technology Solutions has announced its second quarter 2015 financial results.

Revenue for the second quarter of 2015 rose to $3.09 billion, up 22.6 per cent from $2.52 billion in the second quarter of 2014. GAAP net income was $420.1 million, or $0.68 per diluted share, compared to $371.9 million, or $0.61 per diluted share, in the second quarter of 2014. Non-GAAP diluted earnings per share was $0.79 compared to $0.66 in the second quarter of 2014. GAAP operating margin for the quarter was 17.7 per cent. Non-GAAP operating margin was 20.2 per cent, slightly higher than the Company’s target range of 19- 20 per cent.

“Our second quarter sequential revenue increase in dollar terms was the strongest in our history,” said Francisco D’Souza, Chief Executive Officer, Cognizant. “These results validate that our business strategy and our investments position us well to capture the emerging opportunities as clients look to transform into digital businesses. We increasingly work with our clients to help them re-imagine their businesses and build new capabilities to succeed in the digital era.”

“We are pleased that the significant investments we have made in our workforce over the past year are enabling us to meet the strong demand from our clients to support their innovation initiatives,” said Gordon Coburn, President.  “We continue to optimize our existing services and aggressively invest in new services to enable clients to drive higher levels of operational efficiency. These new solutions, being developed and deployed across all of our major business units, are fundamentally changing business models and economics for clients around the world.”

As to the 2015 Outlook—Third Quarter and Full Year shared ahead, the Company is providing the guidance that third quarter 2015 revenue expected to be at least $3.14 billion; third quarter 2015 non GAAP diluted EPS expected to be at least $0.75; fiscal 2015 revenue expected to be at least $12.33 billion, up at least 20.1 per cent compared to 2014 and fiscal 2015 non-GAAP diluted EPS expected to be at least $3.00.

“Our strong performance has allowed us to raise our full year revenue and EPS guidance for the second time this year, despite the impact to our full year revenues from the announcement that Health Net would be acquired by Centene Corporation,” said Karen McLoughlin, Chief Financial Officer. “During the quarter, we repurchased $153 million of shares, under our existing stock repurchase program, reflecting our strong cash flows and our confidence in the strength of our business.”