The perception of Nasdaq listing ended three months to March 2025, with revenue of US$5.12 billion, a sequential increase of 0.65% and a 7.5% annual increase. Much of this growth comes from its largest markets, including healthcare companies and financial institutions.
Although Cognizant increased revenues in the quarter, Peers TCS, Infosys and Hcltech reported fourth-quarter revenue declines of -0.98%, -4.23%, and -0.99%, respectively. Recognition is a calendar year for accounting purposes, while Indian IT Services follows the fiscal year from April to March.
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Still, this is the slowest order of the New Jersey-based company growing in three quarters.
The company's management is more cautious than its peers in the face of macroeconomic uncertainty caused by tariff triggers by U.S. President Donald Trump.
“The macro environment changed drastically in early April and continues to evolve in real time. As our customers navigate through this uncertain time, they are working with us to redefine the cost of technology deployment. We continue to see opportunities related to productivity, efficiency and cost,” Cognizant of Cognizant of Post-earnings Interacts Apparts Apparts Attracts Comparts inters Attractss Comparts intrans intersants Intersants Interactions.
Even though the company sounds optimistic about customer conversations, it is not reflected in its guidance.
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The company's guidance on the upper end is 6% in constant currency terms, similar to the estimates outlined at the end of 2024.
Increase in income
To be sure, while the upper end of full-year revenue under the absolute dollar terms has increased from $20.8 billion outlined in the previous quarter to $21 billion, it is due to the strengthening of foreign currencies against the dollar as pointed out by the company’s management in the post-graduation analyst call.
Cognizant's management expects an improvement in the macroeconomic environment.
“At the high end of guidance, we assume the environment must get better from the third and fourth quarter situations,” Cognizant Chief Financial Officer Jatin Dalal said in a call to respond to analysts on Wednesday.
However, there are some concerns about the company's organic growth.
For the company's 8.2% year-on-year constant currency growth, including a 4% increase in acquisitions of Belcan and Thirdera.
Going forward, the company expects inorganic growth, i.e. revenue growth through its acquisitions, 250 basis points (BPS), or 25% of 2.5%. This means that the company's organic growth will be 3.5% in a constant currency manner, below the growth estimate of HCLTECH, and can only get 5% in a constant currency term at most, but slightly above the 3% estimate of Infosys. TCS does not provide guidance, but says fiscal 26 will be better than fiscal 25.
Even Belcan, acquired for $1.3 billion in June 2024, may struggle, gaining more than three-quarters of its business from commercial aerospace, defense and space, while 40% comes from U.S. federal contracts. As the U.S. Department of Government Efficiency (DOGE), led by Elon Musk, is cutting government spending, the sector that promotes Belcan growth may be affected, which could hinder the company's inorganic growth.
However, Dalar is optimistic about the larger macroeconomic environment.
CFO Dalal's opinion
“Starting with the recent macroeconomic uncertainty, we have not seen a significant impact on our business. And, in the quarter and today, we have not had any substantial customer cancellations. In April, we did see a slowdown in customer decision-making and free decision spending. This is more evident in some segments, including health and product close-range products. It has an impact on developments in our wider portfolio,” Dalar said.
Cognizant's comments contrast with at least two peers, whose annual prospects are more cautious. Although TCS does not provide revenue prospects, its management emphasizes macroeconomic uncertainty, which leads to project delays and delays in client decisions.
HCL Technologies Ltd, the third largest IT service company, is not very optimistic either.
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“We believe that in this environment, discretionary spending will continue to succumb. Geopolitical factors such as tariffs and globalization are expected to affect IT services,” said C. Vijayakumar, CEO of HCLTECH.
However, Bengaluru's Peer Infosys Ltd echoes S Ravi Kumar's point of view, adding that “things may change soon”.
IT Services expects revenue to be between $5.14 billion and $5.21 billion in the three months ended June 2025, converting to a continuous growth of 1.75%.
Another highlight on its transcript is net profit, which rose 21% to $663 million. In this way, the company outperforms analysts in both aspects. oneBloomberg A poll of 24 analysts shows that Cognizant is expected to report $5.07 billion in revenue, while a similar poll of 19 analysts shows that the company has a net profit of $593 million.
Strong performance
Even its profitability is a cheer. Cognizant reported operating margins of 16.7% for the quarter, up 190 basis points in turn.
A basis point is a percentage point of one percentage point.
This is the company's strongest profit margin performance since October 2023, when the profit margin expanded by 220 basis points. To be sure, in a India office building for sale, margins increased in addition to cost-cutting work, Ravi Kumar proposed this.
At least one analyst appreciates the company's performance.
“Although our IT services companies are generally low due to weak demand environments, CTSH (cognitive) is able to maintain previous FY25 guidelines for strong reporting results in the March quarter,” said Keith Bachman, analyst at BMO Capital Markets.
“We believe that the business portfolio of financial services has been improved, health care, as well as less CMT (communication, media and technology) and retail prices, helping CTSH's relative positioning in the tariff environment,” Bachman said.
Cognizant's revenue has increased its two largest markets: financial institutions and healthcare. These two industries account for three-thirds of the company's total revenue.
The company's largest market in North America can also increase revenue. Cognizant received three-quarters of its business from the market, with incremental revenue of about $33 million for the quarter.
Recognize the number of layoffs in the second consecutive quarter. The company ended in March 2025 and in the 12 months of March 2025, the company had 336,300 employees, 500 and 8,100 less than the previous quarter. With this, Cognizant became the second largest Indian IT services company, from April to March to March to March 3, 2025.
HCLTECH is the only company in the year to cut employees by 4,061 employees.
