Cognizant Technology Solutions Corp., a Teaneck-based information technology company, posted a 22 percent revenue increase in the third quarter, a trend aided by growth in its health care segment as more clients comply with the Affordable Care Act.
The company reported growth across business lines and global territories but said its health care and life sciences division, mostly based in North America, stood out.
Chief Financial Officer Karen McLoughlin said the company's health care segment posted a 24 percent increase in third-quarter revenue, totaling $116 million, compared with last year. The company's overall revenue was $2.31 billion, up from $1.89 billion in the third quarter of 2012.
"We feel very good about business right now," McLoughlin said. "Discretionary spending is picking up nicely, things look solid going forward."
Regarding health care reform, McLoughlin said companies began ramping up spending in the second quarter and are expected to continue that trend. McLoughlin said clients, mostly insurance companies, are tapping Cognizant as they outsource customer service and claims management work.
McLoughlin added that as more individuals turn to exchanges for coverage, assuming the glitches that have plagued healthcare.gov since inception Oct. 1 are fixed, insurance companies expect to handle more customers and will need IT help to manage that influx.
The health care segment generated nearly $600,000, or 26 percent of Cognizant's total third-quarter revenue. On a sequential basis, McLoughlin said health care revenue grew 11 percent from the second quarter, compared with 6.7 percent total growth. Cognizant also serves clients in financial services, retail, manufacturing and other industries.
"The sheer velocity of changes in the industries we serve is driving the C-suite to challenge the status quo and rethink their business models to be relevant for the future," CEO Francisco D'Souza said in a statement.
Cognizant earned $319.6 million in the third quarter, or $1.05 a share, up 15 percent from $276.9 million, or 91 cents a share, in the year-ago quarter.
The company projects full-year revenue of $8.8 billion, which would mark a 20 percent increase from 2012, and annual earnings of $4.04 a share.
Employment is expanding as well. Cognizant added 2,100 to its global work force of about 166,000 in the third quarter. The company employs about 3,500 in New Jersey.