Cognizant Announces Record Results For Third Quarter 2013

          Cognizant Announces Record Results For Third Quarter 2013

Revenue up 6.7% sequentially and 21.9% year-over-year

Increases full-year revenue and EPS guidance

PR Newswire

TEANECK, N.J., Nov. 5, 2013

TEANECK, N.J., Nov. 5, 2013 /PRNewswire/ --Cognizant Technology Solutions
Corporation (NASDAQ: CTSH), a leading provider of information technology,
consulting, and business process outsourcing services, today announced its
third quarter 2013 financial results.

Highlights – Third Quarter 2013

  oQuarterly revenue rose to $2.31 billion, up 6.7% sequentially and 21.9%
    from the year-ago quarter.
  oQuarterly diluted EPS on a GAAP basis was $1.05, compared to $0.91 in the
    year-ago quarter.
  oQuarterly diluted EPS on a non-GAAP basis, which excludes stock-based
    compensation expense and acquisition-related charges, was $1.13, compared
    to $0.98 in the year-ago quarter.
  oNet headcount addition for the quarter was approximately 2,100.

Revenue for the third quarter of 2013 rose to $2.31 billion, up 21.9% from
$1.89 billion in the third quarter of 2012. GAAP net income was $319.6
million, or $1.05 per diluted share, compared to $276.9 million, or $0.91 per
diluted share, in the third quarter of 2012. Quarterly diluted EPS on a
non-GAAP basis, which excludes stock-based compensation expense and
acquisition-related charges, was $1.13, compared to $0.98 in the third quarter
of 2012. GAAP operating margin for the quarter was 19.0%. Non-GAAP operating
margin was 20.4%, marginally 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.

"We delivered yet another quarter of industry-leading growth that was
broad-based across our portfolio of industries, services and geographies,"
said Francisco D'Souza, Chief Executive Officer. "The sheer velocity of change
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. Our
investments across multiple horizons of growth position us well to deliver
differentiated value as we partner with clients in this journey."

"Our performance during the quarter was stronger than anticipated due to a
faster ramp up in demand for outsourcing services and strong discretionary
spend on consulting and technology services," said Gordon Coburn, President.
"Our continuous reinvestment in our business continues to help us strengthen
our capabilities to address our clients' dual mandate of driving greater
performance in their current businesses, while positioning them better for
future success."

2013 Outlook –Full Year

The Company is providing the following guidance:

  oFiscal 2013 revenue expected to be at least $8.84 billion, up at least
    20.3% compared to 2012.
  oFiscal 2013 diluted EPS expected to be at least $4.01 on a GAAP basis, and
    $4.37 on a non-GAAP basis.
  oEPS guidance excludes any fourth quarter net non-operating foreign
    exchange gain or loss. 

"Our strong performance in the quarter allows us to once again increase our
full year revenue and EPS guidance and further strengthens our balance sheet,"
said Karen McLoughlin, Chief Financial Officer. "During the quarter, we
increased total cash and short-term investments by $460 million to almost $3.4
billion."

Conference Call
Cognizant will host a conference call November 5, 2013 at 8:00 a.m. (Eastern)
to discuss the Company's third 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 421394 from a half hour after the end of
the call until 11:59 p.m. (Eastern) on Tuesday, November 19, 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 166,400
employees as of September 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
certain 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          Nine Months Ended
                        September 30,               September 30,
                        2013          2012          2013          2012
Revenues                $2,305,723    $1,891,688    $6,487,701    $5,398,257
Operating expenses:
Cost of revenues
(exclusive of
depreciation and       1,382,336     1,111,898     3,854,314     3,127,307
amortization expense
shown separately
below)
Selling, general and
administrative          443,376       384,951       1,277,106     1,155,900
expenses
Depreciation and        42,652        39,453        126,212       109,807
amortization expense
Income from operations  437,359       355,386       1,230,069     1,005,243
Other income
(expense), net:
Interest income         10,696        12,041        37,023        33,097
Other, net              (8,857)       (3,044)       (30,314)      (16,588)
Total other income      1,839         8,997         6,709         16,509
(expense), net
Income before
provision for income    439,198       364,383       1,236,778     1,021,752
taxes
Provision for income    119,571       87,482        332,532       249,268
taxes
Net income              $  319,627  $  276,901  $  904,246  $  772,484
Basic earnings per      $        $        $        $     
share                   1.06          0.93          3.00          2.56
Diluted earnings per    $        $        $        $     
share                   1.05          0.91          2.97          2.52
Weighted average
number of common
 shares outstanding -  301,632       299,058       301,719       301,571
Basic
Weighted average
number of common
 shares outstanding -  304,275       303,132       304,632       306,555
Diluted



COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)
(In thousands)
                                   September 30,          December 31,
                                   2013                   2012
Assets
Current Assets
 Cash and cash equivalents       $     2,031,119   $     1,570,077
 Short-term investments          1,329,480              1,293,681
 Trade accounts receivable, net
of allowances of $31,344
 and $25,816, respectively        1,637,126              1,345,661
 Unbilled accounts receivable     254,060                183,085
 Deferred income tax assets, net  268,635                201,894
 Other current assets             218,785                219,896
 Total Current Assets    5,739,205              4,814,294
Property and equipment, net        1,011,803              971,486
Goodwill                           417,959                309,185
Intangible assets, net             118,141                87,475
Deferred income tax assets, net    160,746                178,824
Other noncurrent assets            169,295                160,307
Total Assets                       $     7,617,149   $     6,521,571
Liabilities and Stockholders'
Equity
Current Liabilities
Accounts payable                   $                $      
                                   114,825                108,707
Deferred revenue                   141,937                149,696
Accrued expenses and other         1,345,276              1,118,927
current liabilities
 Total Current Liabilities   1,602,038              1,377,330
Deferred income tax liabilities,   14,794                 2,777
net
Other noncurrent liabilities       352,041                287,081
Total Liabilities                  1,968,873              1,667,188
Stockholders' Equity               5,648,276              4,854,383
Total Liabilities and              $     7,617,149   $     6,521,571
Stockholders' Equity



COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
Reconciliations of Non-GAAP Financial Measures (Unaudited)
(In thousands, except per share amounts)
                           Three Months Ended      Nine Months Ended September
                           September 30,           30,
                           2013         2012       2013            2012
GAAP income from           $        $      $             $  
operations                 437,359     355,386    1,230,069      1,005,243
Add: Stock-based           27,023       22,261     86,353          79,911
compensation expense (a)
Add: Acquisition-related   5,120        2,878      17,686          10,426
charges (b)
Non-GAAP income from       $        $      $             $  
operations                 469,502     380,525    1,334,108      1,095,580
GAAP operating margin      19.0%        18.8%      19.0%           18.6%
Effect of above            1.4%         1.3%       1.6%            1.7%
adjustments
Non-GAAP operating margin  20.4%        20.1%      20.6%           20.3%
GAAP diluted earnings per  $       $      $         $     
share                         1.05             2.97           2.52
                                        0.91
Effect of above            0.08         0.07       0.25            0.22
adjustments, net of tax
Non-GAAP diluted earnings  $       $      $         $     
per share                     1.13             3.22           2.74
                                        0.98

Notes:
(a) For the three months ended September 30, 2013, the $27,023 adjustment to
exclude stock-based compensation from income from operations includes $4,455,
which was reported in cost of revenues and $22,568, which was reported in
selling, general and administrative expenses in our unaudited condensed
consolidated statements of operations.
For the three months ended Septmeber 30, 2012, the $22,261 adjustment to
exclude stock-based compensation from income from operations includes $3,889,
which was reported in cost of revenues and $18,372, which was reported in
selling, general and administrative expenses in our unaudited condensed
consolidated statements of operations.
For the nine months ended September 30, 2013, the $86,353 adjustment to
exclude stock-based compensation from income from operations includes $13,570,
which was reported in cost of revenues and $72,783, which was reported in
selling, general and administrative expenses in our unaudited condensed
consolidated statements of operations.
For the nine months ended September 30, 2012, the $79,911 adjustment to
exclude stock-based compensation from income from operations includes $12,653,
which was reported in cost of revenues and $67,258, 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, acqusition-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 September 30, 2013
                                                        Growth %
                                               % of                  Year
                                  $            total    Sequential  over
                                                                     Year
 Revenue by Segment:
 Financial Services              $           41.4%    4.8%         21.0%
                                  954,379
 Healthcare                      599,947      26.0%    10.8%        24.2%
 Manufacturing/Retail/Logistics  490,622      21.3%    6.3%         23.7%
 Other                           260,775      11.3%    5.4%         16.6%
 Total Revenue                    $ 2,305,723           6.7%         21.9%
 Revenue by Geography:
 North America                    $ 1,783,081  77.3%    6.3%         18.5%
  United Kingdom                 246,397      10.7%    5.4%         26.0%
  Rest of Europe                 168,259      7.3%     9.7%         57.1%
 Europe - Total                   414,656      18.0%    7.1%         37.0%
 Rest of World                    107,986      4.7%     11.8%        28.0%
 Total Revenue                    $ 2,305,723           6.7%         21.9%
                                  Nine Months Ended September 30, 2013
                                                                     Growth %
                                               % of                  Year
                                  $            total                 over
                                                                     Year
 Revenue by Segment:
 Financial Services              $ 2,720,427  41.9%                 22.5%
 Healthcare                      1,651,540    25.5%                 15.1%
 Manufacturing/Retail/Logistics  1,378,062    21.2%                 26.4%
 Other                           737,672      11.4%                 12.9%
 Total Revenue                    $ 6,487,701                        20.2%
 Revenue by Geography:
 North America                    $ 5,042,666  77.7%                 17.3%
  United Kingdom                 696,650      10.7%                 24.7%
  Rest of Europe                 453,490      7.0%                  46.1%
 Europe - Total                   1,150,140    17.7%                 32.3%
 Rest of World                    294,895      4.5%                  29.0%
 Total Revenue                    $ 6,487,701                        20.2%



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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