Cognizant beats Q1 revenue estimates amid client spending stability

Cognizant Q1 earnings: Cognizant Technology Solutions surpassed Wall Street's expectations for first-quarter revenue on Wednesday, riding on the wave of consistent client spending, thereby driving its shares up by more than 4% in aftermarket trading.

The IT services giant capitalised on signs of an improving business environment coupled with anticipations of interest rate cuts, which prompted clients to increase investments in technology and consulting services, ultimately benefiting firms like Cognizant.

Cognizant reported a total headcount of 344,400 at the end of the first quarter, representing a decrease of 3,300 from the previous quarter.

For the first quarter, the New Jersey-based company's revenue reached $4.76 billion, surpassing analysts' average projection of $4.72 billion, as per data from LSEG.

The company's adjusted profit per share for the reported quarter stood at $1.12, slightly edging out the estimate of $1.11 per share.

Looking ahead, Cognizant anticipates second-quarter revenue to fall within the range of $4.75 billion to $4.82 billion. However, the midpoint of this projection falls slightly below the estimate of $4.82 billion.

Despite its strong performance, Cognizant has revised its annual revenue forecast, now expecting it to range between $18.9 billion and $19.7 billion. This adjustment comes in contrast to its prior expectations of $19.0 billion to $19.8 billion.

(With Reuters inputs.)