Cognizant Q2 results: Net profit down 19% on-year, 2023 revenue guidance retained

economictimes.indiatimes.com:

Cognizant's net profit fell 19% year on year in the second quarter to $463 million, dragged down by costs related to its 2-year «NextGen» restructuring programme announced last quarter. The company's revenue declined 0.4% year on year to $4.89 billion for the three-month period ending June. It was marginally above street estimates of $4.81 billion.

But the company reaffirmed the full-year guidance of a decline of -1% to revenue growth of 1% for the current fiscal in constant currency announced last quarter on strong deal bookings. The revenue is expected to be in the range of $19.2 billion to $19.6 billion. Revenue was up 1.7% while the profit fell 20% on a sequential basis.

The second quarter revenue was slightly above the $4.83 billion-$4.88 billion guided range or a decline of 1.0% to flat in constant currency. The numbers were hurt by $117 million incurred in terms of restructuring costs during the three-month period. The “NextGen” charges include $78 million of employee separation costs, $37 million of facility exit costs and $2 million of third-party and other costs incurred so far this fiscal.

Last quarter, the Teaneck, New Jersey-headquartered firm announced a two-year rejig programme aimed at simplifying the operating model and rationalising office spaces to the tune of $400 million. Cognizant expected the personnel-related actions of this programme to impact around 3,500 non-billable employees or 1% of the total workforce. “We made continued progress during the quarter amid an uncertain economic backdrop.