Cognizant reports first quarter 2009 results
Revenue up 16% year-over-year
Cognizant Technology Solutions Corporation (NASDAQ: CTSH), a leading provider of information technology, consulting and business process outsourcing services, today announced its first quarter 2009 financial results.
Highlights—First Quarter 2009
Quarterly revenue rose to $745.9 million, up 16% from the year-ago quarter.
Quarterly diluted EPS on a GAAP basis was $0.38, compared to $0.34 in the year-ago quarter.
Quarterly diluted EPS on a non-GAAP basis, which excludes stock-based compensation and stock-based Indian fringe benefit tax expenses, was $0.41, compared to $0.38 in the year-ago quarter.
GAAP and non-GAAP diluted EPS includes the negative impact of $0.01 in non-operating foreign currency exchange losses.
Revenue for the first quarter of 2009 rose to $745.9 million, up 16% from $643.1 million in the first quarter of 2008. GAAP net income was $113.1 million or $0.38 per diluted share compared to $101.9 million, or $0.34 per diluted share, in the first quarter of 2008. Diluted earnings per share on a non-GAAP basis were $0.41. GAAP operating margin for the quarter was 18.5%. Excluding stock based compensation expense of $11.8 million and stock-based Indian fringe benefit tax expense of $0.9 million, non-GAAP operating margin was 20.2%, above the Company’s targeted 19-20% range. Earnings for the quarter included $5 million, or $0.01 per share, of non-operating foreign currency exchange losses primarily resulting from the weakness in the European currencies and Indian Rupee during the period. Reconciliations of non-GAAP financial measures to GAAP operating results and diluted EPS are included at the end of this release.
“We are pleased with our performance during the first quarter which exceeded our revenue guidance and demonstrated Cognizant’s continued ability to outperform the industry,” said Francisco D’Souza, President and CEO of Cognizant. “Cognizant’s performance this quarter once again demonstrates the value of our long standing approach of continued reinvestment in our business. In the current economic downturn, as our clients face fundamental structural changes within their industries, they are looking for a partner that brings industry insight, consulting expertise, intellectual capital and world class thinking to the table. At Cognizant we understand the challenges our clients face. We help them navigate change to address these challenges. Our continuing strategy of reinvesting in our business to deepen our expertise, experience and ultimately, our value proposition, has meant we remain the trusted advisor to our customers in good times and bad, continuing our industry leading growth trajectory.”
Mr. D’Souza continued: “Looking to the full year, we remain confident of achieving our full year guidance of at least 10% revenue growth. We will continue to adhere to our business strategy and strategically manage our way through the current market turmoil to capture new opportunities so that we can emerge from this downturn in an even stronger position than when we entered it.”
2009 Outlook—Second Quarter & Full Year
The Company is providing the following guidance:
Second quarter 2009 revenue anticipated to be at least $760 million.
Second quarter 2009 diluted EPS is expected to be $0.37 on a GAAP basis and $0.42 on a non-GAAP basis, which excludes $0.05 of estimated stock-based compensation and stock-based Indian fringe benefit tax expense.
Fiscal 2009 revenue expected to be at least $3.1 billion, up at least 10% compared to 2008.
Fiscal 2009 diluted EPS expected to be at least $1.53 on a GAAP basis, and at least $1.71 on a non-GAAP basis, which excludes $0.18 of estimated stock-based compensation and stock-based Indian fringe benefit tax expense. Full-year EPS guidance is inclusive of the $0.01 non-operating foreign currency exchange loss in the first quarter.
Due to continued volatility in the currency markets, EPS guidance excludes any future non-operating foreign currency exchange gain or loss.
“During the quarter, we continued to focus on operational excellence, thus generating cost savings which can be reinvested in differentiating ourselves in the marketplace and generating industry-leading long-term revenue growth,” said Gordon Coburn, Chief Financial and Operating Officer. “In addition, we continued to strengthen our balance sheet and ended the quarter with approximately $969 million in cash, short-term and long-term investments. We repurchased over $12 million of shares during the first quarter, and we remain confident in our ability to continue to prosper despite the economic downturn and to continue to deliver shareholder value.”
Conference Call
Cognizant will host a conference call May 5, at 10:00 a.m. (ET) to discuss the Company’s quarterly results. To listen to the call, please dial (800) 374-0467 domestically or (706) 679-3288 internationally and provide the conference ID number: 95699431. The call will also be broadcast live via the Internet at Cognizant’s web site, www.cognizant.com. Please go to the web site at least fifteen minutes prior to the call to register, download and install any necessary audio software. A replay will be made available on the web site at www.cognizant.com or by calling (800) 642-1687 for domestic callers and (706) 645-9291 for international callers and entering “95699431” from two hours after the end of the call until 11:59 p.m. (ET) on May 12, 2009.
About Cognizant Technology Solutions
Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting and business process outsourcing services. Cognizant’s single-minded passion is to dedicate our global technology and innovation know-how, our industry expertise and worldwide resources to working together with clients to make their businesses stronger. With over 50 global delivery centers and 63,700 employees as of March 31, 2009, we combine a unique onsite/offshore delivery model infused by a distinct culture of customer satisfaction. A member of the NASDAQ-100 Index and S&P 500 Index, Cognizant is a Forbes Global 2000 company and a member of the Fortune 1000 and is ranked among the top information technology companies in BusinessWeek’s Hot Growth and Top 50 Performers listings. Visit us online at www.cognizant.com.
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 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.
