Cognizant Announces Record Results For Second Quarter 2013

          Cognizant Announces Record Results For Second Quarter 2013

Exceeds second quarter revenue and EPS guidance;

Revenue up 7% sequentially and 20% year-over-year;

Increases full-year revenue and EPS guidance

PR Newswire

TEANECK, N.J., Aug. 6, 2013

TEANECK, N.J., Aug. 6, 2013 /PRNewswire/ -- Cognizant Technology Solutions
Corporation (NASDAQ: CTSH), a leading provider of information technology,
consulting, and business process outsourcing services, today announced its
second quarter 2013 financial results.

Highlights – Second Quarter 2013

  oQuarterly revenue rose to $2.161 billion, up 7.0% sequentially and 20.4%
    from the year-ago quarter.
  oQuarterly diluted EPS on a GAAP basis was $0.99, compared to $0.82 in the
    year-ago quarter.
  oQuarterly diluted EPS on a non-GAAP basis, which excludes stock-based
    compensation expense and acquisition-related charges, was $1.07, compared
    to $0.89 in the year-ago quarter.
  oGAAP and non-GAAP diluted EPS include the impact of $0.07 in net
    non-operating foreign exchange losses.
  oNet headcount addition for the quarter was approximately 1,600.

Revenue for the second quarter of 2013 rose to $2.161 billion, up 20.4% from
$1.795 billion in the second quarter of 2012. GAAP net income was $300.4
million, or $0.99 per diluted share, compared to $251.9 million, or $0.82 per
diluted share, in the second quarter of 2012. Quarterly diluted EPS on a
non-GAAP basis, which excludes stock-based compensation expense and
acquisition-related charges, was $1.07, compared to $0.89 in the second
quarter of 2012. GAAP operating margin for the quarter was 19.7%. Non-GAAP
operating margin was 21.4%, higher than 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.

"As we celebrate the 15^th anniversary of our public listing on the NASDAQ
stock exchange, we are delighted to yet again deliver industry-leading revenue
growth," said Francisco D'Souza, Chief Executive Officer. "Our 15 year record
of revenue and earnings growth is a testament to our long-term strategy of
reinvesting in our business to stay relevant to our clients' changing needs
and to provide increasing value as we grow each of those trusted
relationships. This reinvestment strategy continues to enable Cognizant to
excel in our core services while simultaneously investing in multiple horizons
of growth, thereby continuing to position us well for the future."

"Economic pressures and long-term secular industry shifts have been driving
fundamental changes in client demands," said Gordon Coburn, President.
"Clients are increasingly turning to Cognizant to address their dual mandate
of running better, or enhancing performance in their current businesses, and
running different, or helping improve the positioning of their businesses for
future success. As a result of Cognizant's ability to address this dual
mandate from one integrated platform, we are seeing strong market demand for
our services which is allowing us to increase our revenue guidance for the
full year."

2013 Outlook – Third Quarter and Full Year

The Company is providing the following guidance:

  oThird quarter 2013 revenue anticipated to be at least $2.25 billion.
  oThird quarter 2013 diluted EPS expected to be $1.00 on a GAAP basis and
    $1.09 on a non-GAAP basis.
  oFiscal 2013 revenue expected to be at least $8.74 billion, up at least 19%
    compared to 2012.
  oFiscal 2013 diluted EPS expected to be at least $3.96 on a GAAP basis, and
    $4.32 on a non-GAAP basis.
  oEPS guidance excludes any future net non-operating foreign exchange gain
    or loss. 

"Continued healthy demand in the second quarter resulted in broad-based growth
across our industries, geographies and services, thereby driving significant
revenue and EPS outperformance," said Karen McLoughlin, Chief Financial
Officer. "Excluding the $0.07 of non-operating foreign exchange loss, which
was not included in our guidance, we are pleased that we exceeded our non-GAAP
EPS guidance for the quarter by $0.08. In addition, strong cash flows during
the quarter allowed us to increase our cash and short-term investment balances
to approximately $2.9 billion while repurchasing over $115 million of shares
under our stock repurchase program during the quarter."

Conference Call
Cognizant will host a conference call August 6, 2013 at 8:00 a.m. (Eastern) to
discuss the Company's second quarter 2013 results. To listen to the conference
call, please dial (877) 810-9510 (domestic) and (201) 493-6778 
(international) and provide the following conference passcode: Cognizant Call.

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 (877) 660-6853 for domestic callers or (201) 612-7415 for
international callers and entering 417763 from a half hour after the end of
the call until 11:59 p.m. (Eastern) on Tuesday, August 20, 2013. 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 164,300
employees as of June 30, 2013, 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 our financial results 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 income from
operations, 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 should be read in conjunction with our financial statements
prepared in accordance with GAAP. The reconciliations of Cognizant's non-GAAP
financial measures to the corresponding GAAP measures should be carefully
evaluated.

Historically, we sought to manage the company to a targeted operating margin,
excluding stock-based compensation costs, of 19% to 20% of revenues.
Beginning with 2013, we continue to seek to manage the company to the same
targeted operating margin, but we now also exclude acquisition-related
charges, in addition to excluding stock-based compensation expense, in setting
our internal operating targets. Acquisition-related charges include, when
applicable, amortization of purchased intangible assets included in the
depreciation and amortization expense line on our condensed consolidated
statements of operations, external deal costs, acquisition-related retention
bonuses, integration costs, changes in the fair value of contingent
consideration liabilities, charges for impairment of acquired intangible
assets and other acquisition-related costs. Our 2012 non-GAAP measures have
been adjusted to reflect this change. We believe providing investors with an
operating view consistent with how we manage the company provides enhanced
transparency into the operating results of the company. For our internal
management reporting and budgeting purposes, we use non-GAAP financial
information that does not include stock-based compensation expense and
acquisition-related charges 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. Therefore, it is our belief
that the use of non-GAAP financial measures excluding these costs provides a
meaningful measure for investors to evaluate our financial performance.
Accordingly, we believe that the presentation of non-GAAP income from
operations, 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 measures versus financial measures calculated
in accordance with GAAP is that non-GAAP measures do not reflect all of the
amounts associated with our operating results as determined in accordance with
GAAP and exclude costs that are recurring, namely stock-based compensation and
acquisition-related charges. 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 income from operations, non-GAAP operating
margin and non-GAAP diluted earnings per share to allow investors to evaluate
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 data)
                                                   

                        Three Months Ended          Six Months Ended
                        June 30,                    June 30,
                        2013          2012          2013          2012
Revenues                $2,161,240    $1,795,220    $4,181,978    $3,506,569
Operating expenses:
Cost of revenues
(exclusive of
depreciation and        1,272,013     1,030,889     2,471,978     2,015,409
amortization expense
shown separately
below)
Selling, general and
administrative          420,526       396,771       833,730       770,949
expenses
Depreciation and        41,898        35,602        83,560        70,354
amortization expense
Income from operations  426,803       331,958       792,710       649,857
Other income
(expense), net:
Interest income         13,080        9,984         26,327        21,056
Other, net              (19,486)      (6,850)       (21,457)      (13,544)
Total other income      (6,406)       3,134         4,870         7,512
(expense), net
Income before
provision for income    420,397       335,092       797,580       657,369
taxes
Provision for income    119,987       83,160        212,961       161,786
taxes
Net income              $  300,410  $  251,932  $  584,619  $  495,583
Basic earnings per      $        $        $        $     
share                   1.00          0.83          1.94          1.64
Diluted earnings per    $        $        $        $     
share                   0.99          0.82          1.92          1.61
Weighted average
number of common
 shares outstanding -  301,670       302,225       301,762       302,827
Basic
Weighted average
number of common
 shares outstanding -  304,446       307,326       304,811       308,267
Diluted





COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)
(In thousands)
                                   June 30,               December 31,
                                   2013                   2012
Assets
Current Assets
 Cash and cash equivalents       $     1,678,205   $     1,570,077
 Short-term investments          1,222,364              1,293,681
 Trade accounts receivable, net
of allowances of $29,571
 and $25,816, respectively        1,560,856              1,345,661
 Unbilled accounts receivable     224,371                183,085
 Deferred income tax assets, net  228,131                201,894
 Other current assets             220,034                219,896
 Total Current Assets    5,133,961              4,814,294
Property and equipment, net        1,017,705              971,486
Goodwill                           412,647                309,185
Intangible assets, net             121,991                87,475
Deferred income tax assets, net    165,942                178,824
Other noncurrent assets            160,074                160,307
Total Assets                       $     7,012,320   $     6,521,571
Liabilities and Stockholders'
Equity
Current Liabilities
Accounts payable                   $               $      
                                   94,069                 108,707
Deferred revenue                   134,192                149,696
Accrued expenses and other         1,129,036              1,118,927
current liabilities
 Total Current Liabilities   1,357,297              1,377,330
Deferred income tax liabilities,   14,548                 2,777
net
Other noncurrent liabilities       316,727                287,081
Total Liabilities                  1,688,572              1,667,188
Stockholders' Equity               5,323,748              4,854,383
Total Liabilities and              $     7,012,320   $     6,521,571
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 June    Six Months Ended June
                              30,                        30,
                              2013            2012       2013        2012
GAAP income from              $           $      $       $    
operations                    426,803        331,958    792,710    649,857
Add: Stock-based compensation 30,237          26,271     59,330      57,650
expense ^(a)
Add: Acquisition-related      5,912           1,228      12,566      7,548
charges ^(b)
Non-GAAP income from          $           $      $       $    
operations                    462,952        359,457    864,606    715,055
GAAP operating margin         19.7%           18.5%      19.0%       18.5%
Effect of above               1.7%            1.5%       1.7%        1.9%
adjustments
Non-GAAP operating margin     21.4%           20.0%      20.7%       20.4%
GAAP diluted earnings per     $         $      $       $    
share                           0.99                           
                                              0.82      1.92        1.61
Effect of above               0.08            0.07       0.17        0.16
adjustments, net of tax
Non-GAAP diluted earnings     $         $      $       $    
per share                       1.07                           
                                              0.89      2.09        1.77


Notes:

(a) For the three months ended June 30, 2013, the $30,237 adjustment to
exclude stock-based compensation from income from operations includes $4,568,
which was reported in cost of revenues and $25,669, which was reported in
selling, general and administrative expenses in our unaudited condensed
consolidated statements of operations.

For the three months ended June 30, 2012, the $26,271 adjustment to exclude
stock-based compensation from income from operations includes $4,157, which
was reported in cost of revenues and $22,114, which was reported in selling,
general and administrative expenses in our unaudited condensed consolidated
statements of operations.

For the six months ended June 30, 2013, the $59,330 adjustment to exclude
stock-based compensation from income from operations includes $9,115, which
was reported in cost of revenues and $50,215, which was reported in selling,
general and administrative expenses in our unaudited condensed consolidated
statements of operations.

For the six months ended June 30, 2012, the $57,650 adjustment to exclude
stock-based compensation from income from operations includes $8,764, which
was reported in cost of revenues and $48,886, which was reported in selling,
general and administrative expenses in our unaudited condensed consolidated
statements of operations.



(b) Adjustments to exclude acquisition-related charges, including the
following when applicable: amortization of acquired intangible assets,
external deal costs, acquisition-related retention payments, integration costs
and other acquisition-related costs.



The above tables serves to reconcile the Non-GAAP financial measures to
comparable GAAP measures. Please refer to the "About Non-GAAP Financial
Measures" section of our press release for further information on the use of
these Non-GAAP measures.









COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
Schedule of Supplemental Information (Unaudited)
(In thousands)
                                  Three Months Ended June 30, 2013
                                                        Growth %
                                               % of                  Year
                                  $            total    Sequential  over
                                                                     Year
 Revenue by Segment:
 Financial Services              $           42.1%    6.5%         23.6%
                                  910,707
 Healthcare                      541,574      25.1%    6.2%         11.8%
 Manufacturing/Retail/Logistics  461,594      21.4%    8.4%         28.7%
 Other                           247,365      11.4%    7.8%         14.8%
 Total Revenue                    $ 2,161,240           7.0%         20.4%
 Revenue by Geography:
 North America                    $ 1,677,394  77.6%    6.0%         16.9%
  United Kingdom                 233,845      10.8%    8.1%         27.8%
  Rest of Europe                 153,383      7.1%     16.3%        53.8%
 Europe - Total                   387,228      17.9%    11.2%        37.0%
 Rest of World                    96,618       4.5%     7.0%         24.6%
 Total Revenue                    $ 2,161,240           7.0%         20.4%
                                  Six Months Ended June 30, 2013
                                                                     Growth
                                                                     %
                                               % of                  Year
                                  $            total                 over
                                                                     Year
 Revenue by Segment:
 Financial Services              $ 1,766,048  42.2%                 23.4%
 Healthcare                      1,051,593    25.1%                 10.5%
 Manufacturing/Retail/Logistics  887,440      21.2%                 28.0%
 Other                           476,897      11.4%                 10.9%
 Total Revenue                    $ 4,181,978                        19.3%
 Revenue by Geography:
 North America                    $ 3,259,585  77.9%                 16.6%
  United Kingdom                 450,253      10.8%                 23.9%
  Rest of Europe                 285,231      6.8%                  40.3%
 Europe - Total                   735,484      17.6%                 29.8%
 Rest of World                    186,909      4.5%                  29.6%
 Total Revenue                    $ 4,181,978                        19.3%



SOURCE Cognizant Technology Solutions Corporation

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