As the Q3 results season draws to a close, with only DXC, and CGI of the major IT Services vendors to publish results we can see the bounce back in the market from Q2 to Q3 2020 properly. Exhibit 1 shows the average revenue growth and margin for the 12 providers that have published so far: IBM GS, Accenture, Capgemini, Atos, TCS, Cognizant, Infosys, Wipro, HCL Technologies, Fujitsu (Services), NTT Data, and Tech Mahindra. AWS results can be added to average using the drop down – in fact you can use this to select and deselect the players in the list.
For these providers it shows a decline of -2.1% for Q2 2020 on average climbing to growth of 0.6% in Q3 2020.
Exhibit 1 – revenue growth and margin of the leading IT Services providers to Q3 2020.
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Source: Market Prescience Analysis of Company Financials. All quarters as a close to calendar quarter as possible. Some margin data has been estimated – either by splitting annual or half year totals or from the management commentary for example Atos & Capgemini Q3 was estimated from full year guidance.. Q3 2020 data will be appended as it is announced. It is also worth noting that Capgemini revenue growth for Q2 & Q3 2020 has been boosted by the acquisition of Altran, comparing Capgemini Q3 2020 revenue with the combine Q3 2019 revenue of both companies would have shown a decline of -5.6%. Fujitsu has changed the way it reports its revenue for the current financial year, as we go forward we will use the whole Technology Solutions revenue figures and replace the previous revenue data as it becomes available – so the growth rates may not be accurate until further analysis is done when we get a complete fiscal year with the new reporting structure. We have used historic growth rates to avoid mismatched peaks caused by restating the data for some quarters.
Exhibit 2 is an updated chart that allows you to select which of the suppliers are included in the comparison using the drop down menu and tick boxes – but you can still cycle through the quarters to see the historic position.
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Source: Market Prescience Analysis of Company Financials. All quarters as a close to calendar quarter as possible. Some margin data has been estimated – either by splitting annual or half year totals or from the management commentary for example Atos & Capgemini Q3 was estimated from full year guidance.. Q3 2020 data will be appended as it is announced. It is also worth noting that Capgemini revenue growth for Q2 & Q3 2020 has been boosted by the acquisition of Altran, comparing Capgemini Q3 2020 revenue with the combine Q3 2019 revenue of both companies would have shown a decline of -5.6%. Fujitsu has changed the way it reports its revenue for the current financial year, as we go forward we will use the whole Technology Solutions revenue figures and replace the previous revenue data as it becomes available – so the growth rates may not be accurate until further analysis is done when we get a complete fiscal year with the new reporting structure. We have used historic growth rates to avoid mismatched peaks caused by restating the data for some quarters.
These charts illustrate the overall recovery for the IT Services market in Q3 2020 – they will automatically update when we get the final data from DXC and CGI. Also we are looking to add the mid-tier service providers into the analysis for further comparison.
