Cognizant Q2 lifted by banks, but organic growth a concern

Cognizant posted revenue of $5.25 billion for the quarter, up 8.14% year-on-year and 2.54% sequentially

- Jas Bardia

Cognizant Technology Solutions Corp. delivered better-than-expected results for the April-June quarter, buoyed by strong demand from banking clients. However, concerns about its underlying organic growth, which has slowed sequentially, remain.

The Nasdaq-listed IT services firm reported revenue of $5.25 billion for the quarter, up 2.54% sequentially and 8.14% year-on-year. Banks and financial institutions accounted for more than three-fifths of its $130 million in incremental revenue during the period. By comparison, Indian peers Infosys Ltd and HCLTech Ltd posted revenue increases of 4.46% and 1.34% to $4.94 billion and $3.55 billion, respectively. Tata Consultancy Services Ltd (TCS) reported a 0.59% sequential decline to $7.42 billion, its third straight quarterly drop.

While most Indian IT firms follow an April-March financial year, Cognizant adheres to a January-December calendar.