Cognizant Technology Solutions raised its annual revenue forecast and and beat second-quarter results estimates on Wednesday, aided by businesses turning to the IT services provider to digitize their operations.

Signs of easing inflation and expectations of lower interest rates are prompting businesses to increase their spending on technology and consulting projects as they transition to cloud-based solutions and adopt more digital and cost-effective processes.

Cognizant's Indian IT services peer Infosys topped quarterly results estimates helped by a recovery in demand from clients in its mainstay financial services business, prompting it to raise its yearly revenue forecast earlier in July.

New Jersey-based Cognizant now expects annual revenue between $19.3 billion and $19.5 billion up from its prior expectations of $18.9 billion to $19.7 billion.

Analysts on an average expect annual revenue of $19.4 billion, according to LSEG data.

The company's second-quarter revenue stood at $4.9 billion, compared with analysts' average expectations of $4.80 billion.

The adjusted profit per share came in at $1.17, compared with the estimate of $1.12.

Cognizant, which draws the bulk of its revenue from customers in North America and Europe, said it expects third-quarter revenue in the range $4.89 and $4.96 billion, compared with analysts' estimates of $4.91 billion, according to LSEG data.

  - Reuters