Poor performance by Cognizant at a time when its peers are posting blockbuster results
- Negative growth for the 1st time in his history
- Clocks record low margins
- Settles $140 mn with large client
- 6% quarterly spike in voluntary attrition 🧵
- Negative growth for the 1st time in his history
- Clocks record low margins
- Settles $140 mn with large client
- 6% quarterly spike in voluntary attrition 🧵
Posts $16.7 Bn for 2020 full year, a decline of 0.8% compared to 2019.
Cognizant Q4 revenue declined 2.3 YoY
This, even as it spent $1.1 Billion in acquisitions in 2020.
It has projected a revenue growth of 5.5%-8.5% for 2021. This includes 3% contribution from acquisitions
Cognizant Q4 revenue declined 2.3 YoY
This, even as it spent $1.1 Billion in acquisitions in 2020.
It has projected a revenue growth of 5.5%-8.5% for 2021. This includes 3% contribution from acquisitions
So without acquisitions, Cognizant would grow in 2021 by less than 5 percent, at a time when its rivals are talking about returning to double digit growth levels. A sad state for a company that used to be the barometer or growth for the Indian IT industry
What's more worrying is the attrition number. Cognizant is hemorrhaging talent across levels. Quarterly annualized voluntary attrition is at 16% when attrition is trending to historic lows at TCS, Infosys, Wipro etc.
The senior level exits started after Brian Humphries took charge as CEO in April 2019. While some instability is par for the course, this has gone on for 2 years now.
In the near term, this could be advantage TCS/Wipro/HCL/Infosys, in terms of talent and market share. The larger question who will bell the cat at Cognizant since it's not founder driven. The board or activist investors?
ENDS
ENDS
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