Cognizant Q4 FY09 results – facts, metrics & learnings
DATE: Feb 9th, 2010
FACTS
- Broad based growth in all verticals
- North America continues to be the leader in percentage of revenues for the year and quarter
- Added 57 new clients and strategic clients increased by 5 to total of 144. Total number of active clients 589.
- Incremental and smaller discretionary projects coming back but clients not willing to commit to large discretionary projects
- Inorganic focused growth strategy and alliances continues to strengthen service offerings , vertical expertise and new geographies
- Does not plan to do large scale asset transfers for IT infrastructure services.
METRICS
- Gross Revenues – $902.7 million YoY – (+20%), QoQ – (+6%)
- Net Income – $144 million YoY – (+28%)
- Fiscal Year 2009 revenues – $3.279 billion YoY (+16%)
- Fiscal Year 2009 income – - $535 million YoY(+24.2%)
- First Quarter 2010 revenue guidance – $935 million
- Fiscal 2010 revenue guidance – $ 3.935 billion
- $1.55 billion cash , no debt
- Revenue breakup by quarter
- Banking and Financial Services – 41.9%
- Healthcare and Life Sciences – 26.6%
- Communications, High tech and Media – 13.4%
- Revenue breakup by geographies
- North America - 78.8%
- Europe – 18.6%
- Others – 2.6%
- Revenue breakup by services
- Application Management – 56%
- Application Development – 44%
- People added this quarter – 10,300 (including UBS acquisition)
- Total employee strength – 73,400
- Offshore/Onshore employee ratio – 77/23
- Attrition 4th quarter – 11.2%
- Salary increase in June quarter – market rate
LEARNINGS
- Cognizant is building a strong talent base and investing in client facing talent and integrated services offering which will continue to benefit Cognizant and maintain leadership position.
- Market business environment is stable and outsourcing could be a larger spend of the IT budgets.
- IT infrastructure Services, BPO will show growth and positive contribution to Cognizant as they tap into their existing clients to offer these services.
- Changing Industry trends will drive how companies use outsourcing. The trends could be digitization, disintermediation and other industry secular industry trends which are driven across different verticals.
- Cloud computing is still in discussion but has not affected and will not affect short term how outsourcing relationship are currently being drawn out.
