The company’s revenue, however, saw an uptick, rising 1.3% on year to $4.84 billion for the three-month period. It was slightly above street estimates of $4.83 billion. The profit declined by 20.7% on a sequential basis.
Net income for the full year FY22 was up 7.2% year-on-year to $2.29 billion. The full-year revenue came in at $19.4 billion, up 7.5% in constant currency. It surpassed the guided $19.3 billion figure.
Newly appointed chief executive officer Ravi Kumar S said his immediate focus is on creating the conditions for the Teaneck, New Jersey based company’s associates to “excel and operate with a growth mindset”.
Earlier this month, Cognizant had announced leadership changes that marked the return of Indian-origin top-deckers, including 24-year veteran Surya Gummadi, at the helm of the company.
“The trust and longevity that define Cognizant’s strategic partnerships with global clients provide exciting opportunities to further strengthen and grow these relationships as we expand our portfolio of digital services,” Kumar said in a statement.
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The company said digital revenue was up around 4% year-on-year and represents 51% of the total revenue for the quarter. Cognizant said the first quarter revenue is expected to be $4.71-$4.76 billion, a decline of 1.5% to 2.5%, or a decline of 1.0% to flat in constant currency. This includes around 100 basis points through inorganic growth.
The company did not provide full-year guidance and said it intends to provide an update in its next earnings release in early May. In the third quarter, Cognizant had lowered its annual guidance for the third straight quarter to $19.3 billion.
On the operational front, the operating margin fell 120 basis points year-on-year to 14.2%. This was mainly driven by a $59-million impairment charge related to a large volume-based contract with a health sciences customer. The impairment is principally due to the company’s expectation of lower volumes.
The company’s attrition on a last 12-month basis was down 26% from 28% year-on-year. On a quarterly basis, it said attrition was at 19%, down sequentially from 29%.
The total headcount at the end of the fourth quarter stood at 355,300, an increase of 5,900 from the previous quarter and increase of 24,700 from the same period last year.
Bookings in the fourth quarter grew 12% year-on-year. For the full-year, bookings grew 4% to $24.1 billion. This includes a 10-year, $1-billion services agreement with CoreLogic signed in December 2022 that extends and expands a partnership established in 2011, Cognizant said.
The company said its financial services revenue declined 4.3% year-on-year and included a 180-basis point negative impact related to the previously disclosed sale of the Samlink subsidiary (completed in February). This was partially offset by growth among public sector clients in the United Kingdom and insurance clients.
Separately, Cognizant on Friday announced the appointment of Eric Branderiz to its board as an independent director, effective February 21, 2023. In addition, Maureen Breakiron-Evans, who joined the Board in 2009, has informed the Board that she will not stand for re-election at Cognizant’s 2023 annual meeting.
“The Board continues to strive towards optimising its balance of director skills and tenures as part of its ongoing refreshment program. With the addition of Branderiz, the Board has appointed five new independent directors in the last four years,” Cognizant said in a statement.
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