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John Laherty

John is a Senior Research Analyst at NelsonHall. He is a member of the global IT Services research team with shared responsibility for IT Services research with Dominique Raviart, Eric Levine, and Mike Smart.

Cognizant - Quarterly Update

Quarterly Update

by John Laherty

published on May 16, 2017

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Report Overview:

NelsonHall’s Quarterly Update on Cognizant provides a snapshot of developments at Cognizant in the last quarter.

Who is this Report for:

NelsonHall’s Quarterly Update on Cognizant provides a snapshot of developments at the company in the last quarter. It accompanies NelsonHall’s more comprehensive Key Vendor Assessment program.

Both programs are designed for:

Marketing, sales and business managers developing strategies to target service opportunities within the BPO/IT Services markets

Sourcing managers monitoring the capabilities of existing suppliers of IT and BPO services and identifying vendor suitability for these services

Consultants advising clients on vendor selection

Vendor marketing, sales and business managers looking to benchmark themselves against their peers

Financial analysts and investors specializing in the BPO/IT services sector.

Scope of this Report:

The report provides a quarterly update on Cognizant, looking at financial performance and key developments during the period.

It accompanies NelsonHall’s Key Vendor Assessment program which looks at Cognizant’s IT and BPO offerings, capabilities, and market and financial strengths, including:

  • Identification of the company’s strategy, emphases and new developments
  • Revenue breakdowns
  • Analysis of the company’s offerings and key service components
  •  Analysis of the profile of the company’s client base including the company’s targeting strategy and examples of current contracts
  • Analysis of the company’s strengths, weaknesses and outlook.

Key Findings & Highlights:

Q1 2017 Performance: strong start to the year; revenues at top-end and Non-GAAP margin above guidance

Growth was led by Products & Resources Group; with E&U and M&L revenues up $91m

Continental Europe, up 26.1% as reported, boosted by the captive acquisitions in the Nordics from StoreFront and Aker

New capital allocation policy in place

  •  Launched a $1.5bn ASR program

Commences 3-year margin expansion program

  • To achieve its target of 22% non-GAAP operating margin in 2019

Ongoing investments in digital

  • Opened ‘Collaboratories’ in Amsterdam and Melbourne
  • Now has chief digital officers (CDOs) in each of its industry and regional BUs

Ramping up U.S. onshore hiring

Financial Policy Committee formed; and two new independent directors appointed (per the agreement with activist investor Elliott)

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