Cognizant's revenue, profits rise on outsourcing demand

The company's main business is in application development and management

Cognizant Technology Solutions reported on Tuesday growth in revenue and profits for the quarter ended June 30, as demand grows for offshore outsourcing.

The Teaneck, New Jersey, outsourcer has most of its operations in India, including over 75 percent of its staff, and competes with Indian outsourcers like Tata Consultancy Services, Infosys and Wipro.

Revenue for the quarter was US$1.5 billion, up by 34.4 percent from the same quarter last year. Net profit at $209 million was 20.8 percent higher than last year.

The company added 7,100 staff in the quarter.

Although economic uncertainty has increased, it has not affected Cognizant's business, as customers are looking for trusted partners that can help them reduce costs and become more competitive, said Francisco D'Souza, president and CEO, in a conference call.

The company forecast that its fiscal 2011 revenue will be at least $6.06 billion, up by 32 percent compared to last year. Third quarter 2011 revenue is anticipated to be around $1.57 billion.

The company is benefiting from a gain in share as customers look for innovation from their suppliers, said Gordon Coburn, Cognizant's chief financial and operating officer.

Outsourcing slumped in the second quarter by 18 percent to $16.4 billion on account of weak demand in the Americas and an overall drop in the number of large contracts awarded, according to sourcing data and advisory firm TPI.

India-centric service providers have, however, been increasing their share of the market, Siddharth Pai , partner and managing director of TPI India, said in July. A large number of the contracts that go to Indian providers are of a value lower than $25 million, which is a market that TPI does not include in its data, he added.

Application development and maintenance is still the dominant component of Cognizant's revenue, but the company is also looking at opportunities in consultancy, and business process outsourcing targeted at specific industries.

In line with this strategy, Cognizant said last month it had entered into a definitive agreement to acquire the Indian services operations of CoreLogic, an information services and analytics company focused on the mortgage market.

The financial services industry accounted for 41 percent of total revenue. Revenue from this industry grew by 30 percent in the quarter, Coburn said. Some of the investments were in mobile and cloud computing. Revenue from the health-care industry grew 37 percent to account for 26 percent of revenue in the quarter, he added.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags outsourcingservicesCognizant Technology Solutions

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

John Ribeiro

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Luke Hill


I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?