Cognizant Announces Record Third Quarter 2012 Results

            Cognizant Announces Record Third Quarter 2012 Results

Revenue up 5.4% sequentially and 18.2% year-over-year; Reaffirms full-year
revenue guidance and increases full-year EPS expectations

PR Newswire

TEANECK, N.J., Nov. 7, 2012

TEANECK, N.J., Nov. 7, 2012 /PRNewswire/ --Cognizant Technology Solutions
Corporation (NASDAQ: CTSH), a leading provider of information technology,
consulting, and business process outsourcing services, today announced its
third quarter 2012 financial results.

Highlights – Third Quarter 2012

  oQuarterly revenue rose to $1.892 billion, up 5.4% sequentially and 18.2%
    from the year-ago quarter.
  oQuarterly diluted EPS on a GAAP basis was $0.91, compared to $0.73 in the
    year-ago quarter.
  oQuarterly diluted EPS on a non-GAAP basis, which excludes stock-based
    compensation expense, was $0.97, compared to $0.80 in the year-ago
    quarter.
  oGAAP and non-GAAP diluted EPS includes the impact of $0.01 in net
    non-operating foreign currency exchange loss.
  oNet headcount addition for the quarter was approximately 5,100.

Revenue for the third quarter of 2012 rose to $1.892 billion, up 18.2% from
$1.601 billion in the third quarter of 2011. GAAP net income was $276.9
million, or $0.91 per diluted share, compared to $227.1 million, or $0.73 per
diluted share, in the third quarter of 2011. Diluted earnings per share on a
non-GAAP basis was $0.97. GAAP operating margin for the quarter was 18.8%.
Excluding stock-based compensation expense of $22.3 million, non-GAAP
operating margin was 20.0%, in line with the Company's targeted 19-20% range.
Reconciliations of non-GAAP financial measures to GAAP operating results and
diluted EPS are included at the end of this release.

"Cognizant's strong results reaffirm the acceptance of our value proposition
that helps clients address the dual mandate of driving efficiency and
effectiveness in their core business while investing in innovation and
business transformation for long-term growth," said Francisco D'Souza, Chief
Executive Officer. "Our consulting-led approach, intimate client
relationships, deep domain knowledge and robust execution give us the
confidence to deliver revenue growth of at least 20% in 2012."

"We are pleased that our growth was broad-based across services and
geographies," said Gordon Coburn, President. "Of particular note this quarter
is the performance of our newer service offerings of Consulting, Business
Process Outsourcing and IT Infrastructure Services. On a combined basis, these
services have been growing materially faster than company average, and this
quarter comprised nearly 20% of total revenue. They will continue to be
important drivers of our long-term growth as each represents a large
addressable market with low penetration of the global delivery model."

2012 Outlook – Fourth Quarter and Full Year

The Company is providing the following guidance:

  oFourth quarter 2012 revenue anticipated to be at least $1.94 billion.
  oFourth quarter 2012 diluted EPS expected to be $0.91 on a GAAP basis and
    $0.97 on a non-GAAP basis, which excludes estimated stock-based
    compensation expense.
  oFiscal 2012 revenue expected to be at least $7.34 billion, up at least 20%
    compared to 2011.
  oFiscal 2012 diluted EPS expected to be at least $3.42 on a GAAP basis, and
    $3.69 on a non-GAAP basis, which excludes estimated stock-based
    compensation expense.
  oEPS guidance excludes any fourth quarter non-operating foreign currency
    exchange gain or loss. 

"Our financial model continues to allow us to deliver robust top-line growth
with stable margins, while investing in our next generation of services to
ensure long-term strength," said Karen McLoughlin, Chief Financial Officer.
"Despite the recent appreciation of the Indian Rupee, we remain confident in
our ability to maintain our non-GAAP operating margin within our stated 19-20%
range. Our extensive India Rupee hedge program, which now totals approximately
$3.7 billion, helps mitigate the impact of such volatility on our operating
margins. In addition, strong cash flows during the quarter allowed us to
increase our cash and investment balances by almost $300 million to over $2.6
billion."

Conference Call

Cognizant will host a conference call November 7, 2012 at 8:00 a.m. (Eastern)
to discuss the Company's third quarter 2012 results. To listen to the
conference call, please dial (800) 374-0467 (domestic) and (706) 679-3288 
(international) and provide the following conference ID number: 33259675.

The conference call will also be available live via the Internet by accessing
the Cognizant website at www.cognizant.com. Please go to the website at least
15 minutes prior to the call to register and to download and install any
necessary audio software.

For those who cannot access the live broadcast, a replay will be available by
dialing (855) 859-2056 for domestic callers or (404) 537-3406 for
international callers and entering 33259675 from a half hour after the end of
the call until 11:59 p.m. (Eastern) on Wednesday, November 21, 2012. The
replay will also be available at Cognizant's website www.cognizant.com for 60
days following the call.

About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of information technology,
consulting, and business process outsourcing services, dedicated to helping
the world's leading companies build stronger businesses. Headquartered in
Teaneck, New Jersey (U.S.), Cognizant combines a passion for client
satisfaction, technology innovation, deep industry and business process
expertise, and a global, collaborative workforce that embodies the future of
work. With over 50 delivery centers worldwide and approximately 150,400
employees as of September 30, 2012, Cognizant is a member of the NASDAQ-100,
the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among
the top performing and fastest growing companies in the world. Visit us online
at www.cognizant.com or follow us on Twitter: Cognizant. 

Forward-Looking Statements
This press release includes statements which may constitute forward-looking
statements made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, the accuracy of which are
necessarily subject to risks, uncertainties, and assumptions as to future
events that may not prove to be accurate. Factors that could cause actual
results to differ materially from those expressed or implied include general
economic conditions and the factors discussed in our most recent Annual Report
on Form 10-K and other filings with the Securities and Exchange Commission.
Cognizant undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events, or
otherwise, except as may be required under applicable securities law.

About Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance
with GAAP, this press release includes the following measures defined by the
Securities and Exchange Commission as non-GAAP financial measures: non-GAAP
operating margin and non-GAAP diluted earnings per share. These non-GAAP
measures are not based on any comprehensive set of accounting rules or
principles and should not be considered a substitute for, or superior to,
financial measures calculated in accordance with GAAP, and may be different
from non-GAAP measures used by other companies. In addition, these non-GAAP
measures, the financial statements prepared in accordance with GAAP and
reconciliations of Cognizant's GAAP financial statements to such non-GAAP
measures should be carefully evaluated.

We seek to manage the company to a targeted operating margin, excluding
stock-based compensation costs, of 19% to 20% of revenues. Accordingly, we
believe that non-GAAP operating margin and non-GAAP diluted earnings per
share, excluding stock-based compensation costs, are meaningful measures for
investors to evaluate our financial performance. For our internal management
reporting and budgeting purposes, we use financial statements that do not
include stock-based compensation expense for financial and operational
decision making, to evaluate period-to-period comparisons and for making
comparisons of our operating results to those of our competitors. Moreover,
because of varying available valuation methodologies permitted under U.S. GAAP
and the variety of award types that companies can use, we believe that
providing non-GAAP financial measures that exclude stock-based compensation
expense allows investors to make additional comparisons between our operating
results to those of other companies. Accordingly, we believe that the
presentation of non-GAAP operating margin and non-GAAP diluted earnings per
share, when read in conjunction with our reported GAAP results, can provide
useful supplemental information to our management and investors regarding
financial and business trends relating to our financial condition and results
of operations.

A limitation of using non-GAAP operating margin and non-GAAP diluted earnings
per share versus operating margin and diluted earnings per share calculated in
accordance with GAAP is that non-GAAP operating margin and non-GAAP diluted
earnings per share exclude costs, namely stock-based compensation, that are
recurring. Stock-based compensation will continue to be for the foreseeable
future a significant recurring expense in our business. In addition, other
companies may calculate non-GAAP financial measures differently than us,
thereby limiting the usefulness of these non-GAAP financial measures as a
comparative tool. We compensate for this limitation by providing specific
information regarding the GAAP amounts excluded from non-GAAP operating margin
and non-GAAP diluted earnings per share and evaluating such non-GAAP financial
measures with financial measures calculated in accordance with GAAP.

- tables to follow -



COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
                        Three Months Ended          Nine Months Ended
                        September 30,               September 30,
                        2012          2011          2012          2011
Revenues                $1,891,688    $1,600,954    $ 5,398,257   $ 4,457,449
Operating expenses:
Cost of revenues
(exclusive of
depreciation and
                        1,111,898     924,886       3,127,307     2,567,933
amortization expense
shown separately
below)
Selling, general and
administrative          384,951       353,161       1,155,900     976,209
expenses
Depreciation and        39,453        29,905        109,807       84,982
amortization expense
Income from operations  355,386       293,002       1,005,243     828,325
Other income
(expense), net:
Interest income         12,041        9,970         33,097        28,381
Other, net              (3,044)       (15,008)      (16,588)      (10,637)
Total other income      8,997         (5,038)       16,509        17,744
(expense), net
Income before
provision for income    364,383       287,964       1,021,752     846,069
taxes
Provision for income    87,482        60,845        249,268       202,578
taxes
Net income              $  276,901  $  227,119  $  772,484  $  643,491
Basic earnings per      $        $        $        $     
share                   0.93          0.75          2.56          2.12
Diluted earnings per    $        $        $        $     
share                   0.91          0.73          2.52          2.07
Weighted average
number of common
 shares outstanding -  299,058       302,723       301,571       303,584
Basic
Weighted average
number of common
 shares outstanding -  303,132       309,297       306,555       310,859
Diluted



COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)
(In thousands)
                                   September 30,          December 31,
                                   2012                   2011
Assets
Current Assets
 Cash and cash equivalents       $     1,324,739   $     1,310,906
 Short-term investments          1,307,009              1,121,358
 Trade accounts receivable, net
of allowances of $27,370
 and $24,658, respectively        1,363,454              1,179,043
 Unbilled accounts receivable     213,741                139,627
 Deferred income tax assets, net  166,164                109,042
 Other current assets             166,424                225,530
 Total Current Assets    4,541,531              4,085,506
Property and equipment, net        878,561                758,034
Goodwill                           301,403                288,772
Intangible assets, net             87,583                 97,616
Deferred income tax assets, net    154,927                164,192
Other noncurrent assets            143,034                113,813
Total Assets                       $     6,107,039   $     5,507,933
Liabilities and Stockholders'
Equity
Current Liabilities
Accounts payable                   $                $       
                                   111,420                72,205
Deferred revenue                   116,427                105,713
Accrued expenses and other         1,047,741              1,031,787
current liabilities
 Total Current Liabilities   1,275,588              1,209,705
Deferred income tax liabilities,   4,593                  3,339
net
Other noncurrent liabilities       254,488                342,003
Total Liabilities                  1,534,669              1,555,047
Stockholders' Equity               4,572,370              3,952,886
Total Liabilities and              $     6,107,039   $     5,507,933
Stockholders' Equity



COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Measures (Unaudited)
(In thousands, except per share amounts)
            Three Months Ended September 30,         Three Months Ended September 30,
            2012       2012              2012        2011     2011              2011
            GAAP       Adjustments       Non-GAAP    GAAP     Adjustments       Non-GAAP
Income      $       $             $       $        $             $   
from        355,386   22,261      (a) 377,647     293,002  24,500      (c) 
operations                                                                      317,502
Operating   18.8%      1.2%        (a) 20.0%       18.3%    1.5%        (c) 19.8%
margin
Diluted     $      $            $       $     $            $   
earnings             0.06     (e)          0.73     0.07     (e)    
per share  0.91                         0.97                                  0.80
            Nine Months Ended September 30,          Nine Months Ended September 30,
            2012       2012              2012        2011     2011              2011
            GAAP       Adjustments       Non-GAAP    GAAP     Adjustments       Non-GAAP
Income      $        $             $         $        $             $   
from        1,005,243  79,911      (b) 1,085,154  828,325  64,244      (d) 
operations                                                                      892,569
Operating   18.6%      1.5%        (b) 20.1%       18.6%    1.4%        (d) 20.0%
margin
Diluted     $      $            $       $     $            $   
earnings             0.20     (e)          2.07     0.16     (e)    
per share  2.52                         2.72                                  2.23

Notes:

(a) Adjustment to exclude stock-based compensation of $22,261 from income from
operations of which $3,889 was reported in

cost of revenues and $18,372 was reported in selling, general and
administrative expenses in our unaudited condensed

consolidated statements of operations.

(b) Adjustment to exclude stock-based compensation of $79,911 from income from
operations of which $12,653 was reported in

cost of revenues and $67,258 was reported in selling, general and
administrative expenses in our unaudited condensed

consolidated statements of operations.

(c) Adjustment to exclude stock-based compensation of $24,500 from income from
operations of which $3,990 was reported in

cost of revenues and $20,510 was reported in selling, general and
administrative expenses in our unaudited condensed

consolidated statements of operations.

(d) Adjustment to exclude stock-based compensation of $64,244 from income from
operations of which $11,139 was reported in

cost of revenues and $53,105 was reported in selling, general and
administrative expenses in our unaudited condensed

consolidated statements of operations.

(e) Adjustment to exclude the per share effect of stock-based compensation
expense net of the related tax benefit.



COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
Schedule of Supplemental Information (Unaudited)
(In thousands)
                                  Three Months Ended September 30, 2012
                                                        Growth %
                                                % of                 Year
                                  $             total   Sequential  over
                                                                     Year
 Revenue by Segment:
 Financial Services              $         41.7%   7.0%         20.2%
                                  788,439
 Healthcare                      483,109       25.5%   -0.2%        12.4%
 Manufacturing/Retail/Logistics  396,557       21.0%   10.6%        27.9%
 Other                           223,583       11.8%   3.8%         8.9%
 Total Revenue                    $                   5.4%         18.2%
                                  1,891,688
 Revenue by Geography:
 North America                    $           79.5%   4.9%         20.3%
                                  1,504,706
  United Kingdom                 195,538       10.3%   6.9%         6.4%
  Rest of Europe                 107,110       5.7%    7.4%         0.2%
 Europe - Total                   302,648       16.0%   7.1%         4.1%
 Rest of World                    84,334        4.5%    8.7%         41.4%
 Total Revenue                    $                   5.4%         18.2%
                                  1,891,688
                                  Nine Months Ended September 30, 2012
                                                                     Growth %
                                                % of                 Year
                                  $             total                over
                                                                     Year
 Revenue by Segment:
 Financial Services              $           41.1%                20.8%
                                  2,220,048
 Healthcare                      1,434,808     26.6%                23.1%
 Manufacturing/Retail/Logistics  1,089,962     20.2%                24.0%
 Other                           653,439       12.1%                13.6%
 Total Revenue                    $                                21.1%
                                  5,398,257
 Revenue by Geography:
 North America                    $           79.7%                23.7%
                                  4,300,399
  United Kingdom                 558,854       10.4%                6.9%
  Rest of Europe                 310,400       5.7%                 3.4%
 Europe - Total                   869,254       16.1%                5.6%
 Rest of World                    228,604       4.2%                 44.2%
 Total Revenue                    $                                21.1%
                                  5,398,257





SOURCE Cognizant Technology Solutions Corporation

Website: http://www.cognizant.com
Contact: David Nelson, VP, Investor Relations & Treasurer, +1-201-498-8840,
david.nelson@cognizant.com