Cognizant meets Q2 expectations with revenue up across segments

Digital infrastructure business Equinix and industrial IOT company PTC also reported solid results on Wednesday.
Written by Stephanie Condon, Senior Writer

IT services company Cognizant on Wednesday reported second-quarter financial results largely in line with expectations, with revenue up across all business segments.

Cognizant's adjusted diluted earnings per share came to 99 cents on revenue of $4.6 billion, up 14.6% year-over-year. 

Analysts were expecting earnings of 96 cents per share on revenue of $4.44 billion. 

"We delivered a strong second quarter," CEO Brian Humphries said in a statement. "Through targeted investments, we've been shifting our portfolio to faster-growing market segments while extending our capabilities and partnerships to help clients build modern businesses. I see a stronger, more competitive Cognizant emerging, with growing commercial momentum. We are bullish on the industry and our prospects within it."

By business segment, financial services (32.8% of revenues) revenue grew 7.6% year-over-year. Healthcare (28.9% of revenues) revenue grew 14.5%. Products and Resources (23% of revenues) revenue grew 21.7%. Communications, Media and Technology (15.3% of revenues) revenue grew 21.2%.

During the second quarter, the company repurchased 4 million shares for $296 million at an average price of $73.52 under its share repurchase program. In July 2021, the company declared a quarterly cash dividend of 24 cents per share for shareholders. 

For the third quarter, Cognizant expects revenue in the range of $4.69 billion to $4.74 billion.

Digital infrastructure company Equinix reported second-quarter revenue slightly above market expectations, with record bookings across the company.

GAAP net income for the quarter came to $68 million or 76 cents per share. Quarterly revenues increased 13% over the same quarter last year to $1.658 billion. 

Analysts were expecting non-GAAP earnings of 1.85 cents per share on revenue of $1.64 billion. 

"We have continued to see significant momentum in our business as digital transformation outpaces previous expectations across all industries," CEO Charles Meyers said in a statement. "Technology spending is accelerating, and we believe Equinix remains uniquely positioned as traditional technology markets continue to shift to as-a-service consumption models, and hybrid multi-cloud is widely adopted as the architecture of choice. The pandemic has highlighted that digital infrastructure is not just a business enabler but a primary source of competitive advantage for digital leaders across all industries, and we continue to see a multitude of trends driving infrastructure to become more distributed, more on-demand, and more ecosystem-connected than ever before."

For the third quarter of 2021, Equinix expects revenues between $1.668 and $1.688 billion. For the full year, the company expects revenue between $6.619 billion and $6.659 billion.

The industrial IOT company PTC reported better-than-expected third-quarter results

Non-GAAP net income came to $98 million, or diluted earnings per share of 83 cents. Revenue was $436 million, an increase of 24% year-over-year. 

Analysts were expecting non-GAAP earnings of 63 cents per share on revenue of $412.73 million. 

"Our performance in the third quarter and year to date reflects continued strong execution.  We again delivered double-digit top -ine growth, leading to solid operating and free cash flow results," President and CEO James Heppelmann said in a statement.

"The SaaS delivery model is just beginning to disrupt the industrial technology market, and I am excited that PTC has carved out a leadership position at the forefront of that paradigm shift," Heppelmann continued. "By delivering CAD, PLM, IOT, and AR technologies in the cloud, customers can work faster, reduce total cost of ownership, be more efficient and increase the return on their investment over the long-term." 

Annual recurring revenue for the quarter was $1.42 billion, representing a growth of 18% year-over-year. Cash flow from operations was $88 million, and free cash flow was $85 million.

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