FILE PHOTO: Figurines with computers and smartphones are seen in front of Cognizant logo in this illustration taken, February 19, 2024. REUTERS/Dado Ruvic/Illustration/File Photo
(Reuters) -Cognizant Technology Solutions raised its annual revenue forecast and beat first-quarter results on Wednesday, driven by increased demand for AI-powered IT services.
As clients transition to cloud-based systems and automate their operations, many are turning to AI-infused services offered by companies like Cognizant. This shift has helped the firm mitigate the effects of a volatile market.
With Generative AI gaining traction, clients are increasingly integrating AI into software development cycles, streamlining operations and enhancing customer support.
Cognizant expects annual revenue in the range of $20.5 billion to $21.0 billion, compared to previous outlook of the midpoint of $20.30 billion and $20.80 billion.
Analysts had, on average, expected $20.68 billion for 2025.
"We believe our differentiated AI and platform capabilities are helping clients navigate the near-term uncertainty while embarking on longer-term AI-led transformation" said CEO Ravi Kumar S.
In March, the company's board approved a $2 billion increase to its ongoing share repurchase plan, raising the total remaining authorization to $3.1 billion.
The New Jersey-based company's first-quarter revenue was $5.12 billion, slightly above analysts' average estimate of $5.11 billion.
Its adjusted profit per share in the reported quarter was $1.23, compared with the estimate of $1.20 per share.
Cognizant expects second-quarter revenue between $5.14 billion and $5.21 billion, the mid-point of which is above estimate of $5.12 billion, according to data compiled by LSEG.
(Reporting by Priyanka.G in Bengaluru; Editing by Tasim Zahid)
