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Cognizant CEO: Company Saw ‘Tremendous Momentum’ For Communications, Media, Tech in Q2

Cognizant reported strong results for its second quarter (ended June 30) that were helped significantly by continued growth in digital and its Communications, Media and Technology (CMT) business.

“The Communications, Media and Technology business for us is actually our most profitable industry segment externally,” CEO Brian Humphries told analysts on an earnings call July 27.

“We have tremendous momentum there, [with] a strong team who’ve been driving good momentum with digital native companies, fully leveraging our intuitive operations and automation business group as well,” he said.

Another factor that helped, he said: “We have strong client relationships. We’ve been executing well. Delivery excellence is very strong. I know a lot of these clients personally. They speak to our differentiated offerings and differentiated delivery.”

It is a business that he said “we’ve been investing in for many years as we’ve made the portfolio a little bit more diverse beyond healthcare” and Financial Services and insurance. “Products and Resources and CMT have been growing double digits for many, many years, and CMT is one of the showcases, I think, of our success in that regard, both in the United States as well as internationally,” he told analysts.

Total Cognizant Q2 revenue grew 7% from a year ago to $4.9 billion, while profit increased to $577 million ($1.11 a share) from $512 million (97 cents a share).

CMT revenue jumped 16.1%, “driven by strength among digital native companies,” Cognizant said in its earnings news release.

“In CMT, we had another quarter of excellent growth,” Humphries told analysts. Revenue in that business grew 19.5% year-over-year “in constant currency, driven by technology clients and new client acquisition,” he said.

He pointed to the addition of customer DocuSign as an “example of a new logo win” for Cognizant in Q2. That firm “selected Cognizant as the preferred partner for global customer support operations across all products and services from their flagship e-signature product to newer contract life cycle management products,” Humphries said.

“DocuSign turned to us because of the distinctive solution proposed by our intuitive operations and automation practice, including cutting-edge omnichannel customer support and outcome-based commercial models,” he said.

Financial Services revenue grew 2.7 % (and 5.1% in constant currency), “led by insurance growth,” he noted.

In early Q2, he “visited clients in Germany and celebrated a new logo win with Zurich Insurance Germany,” he noted. “Cognizant will help them simplify, modernize and manage their enterprise application landscape by establishing joint DevOps teams and working to extend” the insurers’ artificial intelligence (AI), data, software engineering and cloud capabilities, he pointed out.

In insurance, CCC Intelligent Solutions, whose Software-as-a-Service (SaaS) platform powers the property and casualty insurance industry, asked for our help in enabling their cloud transformation program,” Humphries told analysts. “We led with our enterprise DevOps and cloud transformation consultancy and partnered with Microsoft to present a comprehensive solution,” he noted. “This prompted the client to also select us to build next-generation analytics and telematics solutions that are expected to be key to their long-term leadership.”

Cognizant, meanwhile, continued to “see excellent growth” in Products and Resources, where revenue grew 8.1% and 11.6% year-over-year in constant currency, “driven in part by strength among automotive, logistics, retail and consumer goods clients,” he said.

“As a strategic partner for digital, we’re helping Albertsons Companies, a $70 billion grocery retailer, make their move to a cloud-based infrastructure model, enabling innovation and improved customer experiences, both in-store and across last-mile delivery,” he added.