Cognizant Q1 Net Profit Jumps 21%, Reports 1,400 Generative AI Engagements
Cognizant reported a 21% year-over-year increase in net profit for the first quarter ended March 31, 2025, reaching $663 million, up from $546 million in the same quarter last year. The company’s revenue rose 7.5% to $5.1 billion during the quarter YoY, but stayed flat quarter on quarter, meeting the expectations set during the last quarter. CEO S Ravi Kumar attributed the performance to growing demand for AI-driven IT services. “We started the year on a strong note, delivering revenue and adjusted operating margin ahead of our expectations, reflecting our steadfast focus on the execution of our strategy over the last several years,” said Kumar in a company release. During the earnings call, Kumar said that the company is actively scaling its work in generative AI, reporting approximately 1,400 early-stage GenAI engagements, up from 1,200 in the previous quarter. Cognizant has developed over 20 agentic solutions using Google’s LLMs, particularly focused on healthcare, addressing issues such as prior authorizations, fraud, and member experience. Kumar pointed out that “AI-written code increased to more than 20% for us,” calling it a pioneering moment for developer productivity. Cognizant is also building out a sophisticated framework for industrialising AI, working with hyperscalers like Microsoft, AWS, and Google, as well as deepening its collaboration with NVIDIA to develop enterprise AI agents, industry-specific large language models, and AI infrastructure. A notable internal breakthrough includes a patent-pending method for managing LLM hallucinations by setting uncertainty thresholds, allowing fallback to rule-based systems when confidence is low. On the GCC front, Cognizant is expanding aggressively, most recently announcing a new GCC with Citizens Financial in Hyderabad. This centre will focus on enhancing enterprise technology, data, and analytics for the client, using Cognizant’s Neuro and Flowsource AI platforms. Kumar sees GCCs as a strategic growth lever, adding, “We are undertaking more engagements to support clients on the GCC journey, equipping them with strategic AI tooling and platforms needed to drive operational strength.” Earlier, Cognizant in its 2024 annual report pointed out that there is potential threat from GCC when it comes to acquiring talent. While verticals like health sciences, financial services, and products and resources contributed to the revenue boost, the Communications, Media, and Technology segments experienced a decline. The quarter also included a $62 million gain from the sale of an office complex in India. Bookings on a trailing twelve-month basis increased 3% year-over-year to $26.7 billion, representing a book-to-bill ratio of approximately 1.3X. However, bookings in the first quarter alone declined 7% from the previous year. The quarter included four large deals, each valued at $100 million or more. Employee metrics showed that voluntary attrition in the tech services segment stood at 15.8% on a trailing twelve-month basis, compared to 15.9% in Q4 2024 and 13.1% in Q1 2024. Total headcount at the end of March 2025 was 336,300, marking a reduction of 500 employees from the prior quarter. Looking ahead, Cognizant projected second quarter revenue to range between $5.14 billion and $5.21 billion, and full-year 2025 revenue between $20.5 billion and $21.0 billion.
CEO Ravi Kumar pointed out that “AI-written code increased to more than 20% for us,” calling it a pioneering moment for developer productivity.
Ravi Kumar pointed out that “AI-written code increased to more than 20% for us,” calling it a pioneering moment for developer productivity.
["Cognizant", "Quarterly Earnings"]
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["AI", "analytics", "generative AI", "GenAI", "AWS", "R", "Go", "ViT", "AI agents", "cloud_platforms:AWS"]
Mohit writes about AI in simple, explainable, and often funny words. He's especially passionate about chatting with those building AI for Bharat, with the occasional detour into AGI.