News Release:

Cognizant Reports Fourth Quarter And Full Year 2012 Results

Fourth quarter revenue up 3% sequentially and 17% year-over-year;

Annual revenue of $7.35 billion, up 20% year-over-year;

Provides guidance for 2013 revenue growth of at least 17%

Feb 7, 2013

TEANECK, N.J., Feb. 7, 2013 /PRNewswire/ -- Cognizant Technology Solutions Corporation (NASDAQ: CTSH), a leading provider of information technology, consulting, and business process outsourcing services, today announced its fourth quarter and full year 2012 financial results.

Highlights – Fourth Quarter 2012

• Quarterly revenue rose to $1.95 billion, up 17.1% from the year-ago quarter and 3.0% sequentially.
• Quarterly diluted EPS on a GAAP basis was $0.92, compared to $0.78 in the year-ago quarter.
• Quarterly diluted EPS on a non-GAAP basis, which excludes stock-based compensation expense, was $0.99, compared to $0.84 in the year-ago quarter.
• Net headcount addition for the quarter exceeded 6,300; year-end headcount was approximately 156,700.

Revenue for the fourth quarter of 2012 rose to $1.95 billion, up 17.1% from $1.66 billion in the fourth quarter of 2011. GAAP net income was $278.8 million, or $0.92 per diluted share, compared to $240.1 million, or $0.78 per diluted share, in the fourth quarter of 2011. Diluted EPS on a non-GAAP basis was $0.99. GAAP operating margin for the quarter was 18.3%. Excluding stock-based compensation expense of $27.4 million, non-GAAP operating margin was 19.7%, within 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 are pleased to once again deliver industry-leading revenue growth in 2012," said Francisco D'Souza, Chief Executive Officer of Cognizant. "As we look to 2013, it is clear that secular industry shifts, new technology architectures, virtual business models and changing demographics are forcing clients to re-examine how they operate. Increasingly, clients are finding incremental levels of performance inadequate and are challenging the status quo to find ways to maintain their market leadership."

"When confronting their business challenges, clients not only look to Cognizant to help them run their operations better, but increasingly turn to us to help them run their operations differently in order to differentiate themselves in the market and drive topline growth," said Gordon Coburn, President of Cognizant. "Given our strong client relationships and our deep consulting and domain expertise, Cognizant is uniquely positioned to address clients' dual mandate of 'running better' and 'running different' from one global platform."

Highlights – Full Year 2012

• Revenue increased to $7.35 billion, up 20.0% from the previous year.
• Diluted EPS on a GAAP basis was $3.44, compared to $2.85 in the previous year.
• Diluted EPS on a non-GAAP basis, which excludes stock-based compensation expense, was $3.70, compared to $3.07 in the previous year. 
• GAAP and non-GAAP diluted EPS includes the impact of $0.05 in net non-operating foreign currency exchange loss.

Revenue for 2012 increased to $7.35 billion, up 20.0% from $6.12 billion for 2011. GAAP net income was $1.05 billion, or $3.44 per diluted share, compared to $883.6 million, or $2.85 per diluted share, for 2011.  Diluted EPS on a non-GAAP basis was $3.70. GAAP operating margin was 18.5%.  Excluding stock-based compensation expense of $107.4 million, non-GAAP operating margin was 20.0%. Reconciliations of these non-GAAP financial measures to GAAP operating results and diluted EPS are included in the table at the end of this release.

First Quarter & Full Year 2013 Outlook

Starting in 2013, our reported non-GAAP financial measures will exclude acquisition-related charges, including amortization of purchased intangibles, as well as stock-based compensation expense. This change is not reflected in our reported 2012 quarterly or annual results above, but is reflected in our 2013 non-GAAP guidance below.

The Company is providing the following guidance:

• First quarter 2013 revenue anticipated to be at least $2.0 billion.
• First quarter 2013 diluted EPS expected to be $0.92 on a GAAP basis and $1.01 on a non-GAAP basis.
• Full year 2013 revenue expected to be at least $8.60 billion, up at least 17.0% compared to 2012. This guidance includes anticipated acquisition revenue of $90 million.
• Full year 2013 diluted EPS expected to be at least $3.95 on a GAAP basis, and $4.31 on a non-GAAP basis.
• EPS guidance excludes the impact of any non-operating foreign currency exchange gains or losses.  

"Generating broad-based, industry leading growth of 20% within a tough demand environment of 2012 is a testament to the strength of our business model," said Karen McLoughlin, Chief Financial Officer. "Furthermore, 2012 was a strong year of cash generation. Our cash and short-term investments balances grew by $430 million during the year, after covering over $480 million of share repurchases."

Conference Call

Cognizant will host a conference call February 7, 2013 at 8:00 a.m. (Eastern) to discuss the Company's quarterly and full year 2012 results. To listen to the conference call, please dial (877) 810-9510   (domestically) and (201) 493-6778(internationally) 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 407306 from two hours after the end of the call until 11:59 p.m. (Eastern) on Thursday, February 21, 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 156,700 employees as of December 31, 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 atwww.cognizant.com or follow us on Twitter: Cognizant.