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View All NewsCognizant revenue down 3% in constant currency, includes impact of exit of customer in financial services
Cognizant Technology Solutions Corp. (NASDAQ: CTSH) reported fourth-quarter revenue fell 3.0% in constant currency and included the impact of the anticipated exit from a customer engagement and certain content services.
“We accomplished a great deal in the past year whilst keeping our clients and our talented associates foremost in mind,” CEO Brian Humphries said.
| (US$ millions) | Q4 2020 | Q4 2019 | % change | % constant currency |
| Revenue | $4,184 | $4,284 | -2.3% | -3.0% |
| Net income | $316 | $395 | -20.0% |
Financial services revenue fell 11.4% in the fourth quarter, driven by declines in banking and insurance. Cognizant also reported it made an offer to settle and exit a large customer engagement in Continental Europe. “As a result of this offer, in the fourth quarter of 2020 we recorded a reduction of revenue of $107 million and additional expenses of $33 million, primarily related to the impairment of long-lived assets,” the company stated.
Healthcare revenue was driven by growth in both healthcare and life sciences.
Products and resources’ decline was driven by retail, consumer goods, travel and hospitality clients that were particularly affected by Covid-19. However, this was partially offset by growth in manufacturing, logistics, energy and utilities.
Communications, media and technology revenue rose and was benefited by recent acquisitions.
Revenue by client industry vertical
| (US$ millions) | Q4 2020 | % change | % constant currency |
| Financial services | $1,305 | -11.1% | -11.4% |
| Healthcare | $1,270 | 4.0% | 3.3% |
| Products and resources | $948 | -1.6% | -2.4% |
| Communication, media and technology | $661 | 4.6% | 3.4% |
Revenue by geography
| (US$ millions) | Q4 2020 | % change | % constant currency |
| North America | $3,206 | -1.1% | -1.1% |
| UK | $339 | 0.6% | -2.3% |
| Continental Europe | $360 | -16.1% | -20.7% |
| Rest of world | $279 | 0.7% | 1.4% |
Full-year results
| (US$ millions) | FY 2020 | FY 2019 | % change | % constant currency |
| Revenue | $16,652 | $16,783 | -0.8% | -0.7% |
| Net income | $1,392 | $1,842 | -24.4% |
Guidance
Cognizant expects first-quarter revenue to grow between 1.0% and 2.0% in constant currency. Full-year revenue is expected to grow between 4.0% and 7.0% in constant currency.
Share price and market cap
Shares in Cognizant were down 6.08% to $74.52 as of 1:06 p.m. Eastern time; they were 9.92% below their 52-week high set Dec. 17, 2020, according to FT.com. The company had a market cap of $42.42 billion.