Cognizant Technology on Wednesday raised its annual adjusted profit forecast after recording strong growth in its financial services business and continued operating margin expansion in the second quarter, even as enterprises remained cautious about discretionary spending. Shares of the company were up 10%.
Cognizant now expects adjusted profit per share for the year in the range of $5.70 to $5.82, up from its prior forecast of $5.63 to $5.77.
"Operational efficiency and favorable currency movements more than offset higher third-party cost and compensation costs, as well as the impact of our recently completed acquisitions," finance chief Jatin Dalal said.
During the second quarter, revenue from the company's Financial Services segment — its largest business — grew 12% from a year earlier, reflecting continued demand from banking and financial clients.
Cognizant also completed the acquisition of AI infrastructure and data center services firm Astreya for about $634 million during the quarter and launched an AI-focused transformation program called Project Leap.
Cognizant expects third-quarter revenue between $5.60 billion and $5.68 billion, compared with analysts' average estimate of $5.70 billion, according to data compiled by LSEG.
Cognizant is a technology services company that provides consulting, software engineering, cloud and AI services to businesses worldwide.
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