IT and BPO services company Cognizant Technology Solutions Corporation has joined a host of outsourcing companies enjoying positive results. The company has announced record Q1 revenues, for the quarter ending March 31, 2008.

Revenues for the first quarter increased to $643.1 million, up 7.2% from $600.0 million in the fourth quarter of 2007, and up 40% from $460.3 million in the first quarter of 2007. GAAP net income was $101.9 million, or $0.34 per diluted share, compared to $75.4 million, or $0.25 per diluted share, in the first quarter of 2007. GAAP operating margin for the quarter was 17.4%.

"We are pleased with this quarter, during which we have surpassed our growth targets. The quarter's results, achieved despite the increased economic uncertainty and challenges in the financial services industry, testify to the resilience of our business model which is diversified across business segments, service offerings and geographic regions,” said Francisco D’Souza, Cognizant president and CEO. “Our healthcare, retail/manufacturing/logistics and other segments all demonstrated sequential growth of approximately 10% or greater, and Europe continued to grow well in excess of company average, growing 12% sequentially during the quarter.”

“We have adopted a more cautious view for the remainder of the year to reflect the heightened economic challenges over the past two months," he continued. "However, we believe that the current environment also presents us with opportunities to help clients in industries such as financial services, healthcare and media adapt to the structural changes that are transforming their industries. "In addition, our clients are also seeking cost rationalization solutions in order to compensate for the pressures on their businesses. The investments we’ve made in broadening our service offerings, building deep domain expertise and advanced consulting and analytics capabilities position us well to capitalize on these needs.”

Based on current visibility, the Company is now providing the following guidance: Second quarter 2008 revenue anticipated to be at least $680 million; Q2 2008 diluted EPS expected to be $0.34 to $0.35 on a GAAP basis, and $0.38 to $0.39 on a non-GAAP basis, which excludes $0.04 of estimated stock-based compensation and stock-based Indian fringe benefit tax expense. Fiscal 2008 revenue is anticipated to be approximately $2.95 billion, up approximately 38% compared to 2007.

"We continue to invest across our industries, service-areas and geographies in order to address client needs, enhance our market position, continue to grow and deliver value for shareholders," said CFO Gordon Coburn.

“While keeping these goals in mind, we plan to increase resource utilisation throughout 2008 in order to optimize efficiency and quality and help us remain flexible within the current environment. As we look ahead, we remain confident that despite near-term challenges in the economy, our strategy and execution excellence will ensure that Cognizant’s growth continues to outpace the industry.”

"Our performance is a result of the diversification of our business across multiple industries and geographies," continued D'Souza. "We continue to see demand for our services across a range of industries, geographic markets and solution offerings. We experienced strong performance in the health care sector, which grew 45% year-over-year and 10% sequentially.

"Manufacturing, retail and logistics which grew 40% year-over-year and over 12% sequentially and our other segment which includes communication, information, media and entertainment and technology business areas which grew 11% sequentially and 41% year-over-year.

"And despite turmoil in the financial markets during the quarter, our financial services sector showed growth of three percent sequentially and 37% year-over-year.

"Geographically, Europe continued the strong trend we've seen for several quarters growing 87% year-over-year and 12% sequentially and comprised 19% of our revenues, compared to 14% of our revenues in the first quarter of 2007. It is worth noting there are significant growth in Europe, five full percentage points of total company revenues over a one year period is the result of our focused efforts to increase our presence in this geography."