Cognizant reports second quarter 2009 results.

Summary: Cognizant Technology Solutions Corporation (NASDAQ: CTSH), a leading provider of information technology, consulting and business process outsourcing services, today announced its second quarter 2009 financial results.

Cognizant reports second quarter 2009 results

 Revenue for the quarter up 13% year-over-year and 4% sequentially

 Raises guidance for FY2009 Revenue and EPS 

Cognizant Technology Solutions Corporation (NASDAQ: CTSH), a leading provider of information technology, consulting and business process outsourcing services, today announced its second quarter 2009 financial results.

Highlights--Second Quarter 2009

 Quarterly revenue rose to $776.6 million, up 13% from the year-ago quarter and up 4% sequentially Quarterly diluted EPS on a GAAP basis was $0.47, compared to $0.35 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 expense, was $0.50, compared to $0.39 in the year-ago quarter GAAP and non-GAAP diluted EPS includes the positive impact of $0.04 in non-operating foreign currency exchange gains

Revenue for the second quarter of 2009 rose to $776.6 million, up 13% from $685.4 million in the second quarter of 2008. GAAP net income was $141.3 million, or $0.47 per diluted share, compared to $103.9 million, or $0.35 per diluted share, in the second quarter of 2008. Diluted earnings per share on a non-GAAP basis was $0.50. GAAP operating margin for the quarter was 19.5%. Excluding stock based compensation expense of $8.4 million and stock-based Indian fringe benefit tax expense of $1.3 million, non-GAAP operating margin was 20.8%, above the Company's targeted 19-20% range. Earnings for the quarter included $14.1 million of pre-tax non-operating foreign currency exchange gains (net of hedge losses), or $0.04 per share, primarily resulting from favorable fluctuations 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.

"Despite a fluid economic environment, we posted industry-leading revenue growth this quarter, which demonstrates the resilience of our business model and our ability to adapt to evolving client needs," said Francisco D'Souza, President and CEO of Cognizant. "Large corporations are seeking us out to streamline global delivery, rationalize costs and create new business capabilities that significantly advance their business objectives over the short-, medium- and long-term. I am pleased that during the quarter we further solidified our leadership position in multiple industries, expanded our range of services, specifically in engineering services and industrial automation, and deepened our presence in emerging geographies such as Asia Pacific and the Middle East."

Mr. D'Souza continued: "Based on the strength of our second quarter results, we're increasing our 2009 revenue growth guidance from at least 10% to at least 11.5%. We are convinced that technology will play an integral role in the global economic recovery, and Cognizant is well positioned to capitalize on the unfolding cyclical and secular opportunities."

2009 Outlook--Third Quarter & Full Year

The Company is providing the following guidance:

 Third quarter 2009 revenue anticipated to be at least $800 million Third quarter 2009 diluted EPS is expected to be $0.40 on a GAAP basis and $0.44 on a non-GAAP basis, which excludes $0.04 of estimated stock-based compensation expense  Fiscal 2009 revenue expected to be at least $3.14 billion, up at least 11.5% compared to 2008 Fiscal 2009 diluted EPS expected to be at least $1.66 on a GAAP basis, and at least $1.80 on a non-GAAP basis, which excludes $0.14 of estimated stock-based compensation and stock-based Indian fringe benefit tax expense  The proposed India Government Budget for the current fiscal year includes abolition of the stock-based Fringe Benefit Tax effective April 1, 2009. The budget has been approved by the Parliament and is awaiting signature of the President. EPS guidance assumes the elimination of the stock-based Fringe Benefit Tax passes into law during the third quarter. Due to continued volatility in the currency markets, EPS guidance excludes any future non-operating foreign currency exchange gain or loss.

"We had an excellent second quarter during which we saw healthy demand and increased revenue, while maintaining our discipline of operational excellence and reinvesting in our business to enhance our competitiveness longer-term," said Gordon Coburn, Chief Financial and Operating Officer. "The resilience of our business model, backed by our strategic decision of reinvestment, helps us provide increasing value to our customers while nurturing those trusted relationships. In addition, we strengthened our balance sheet significantly with our cash, and short- and long-term investments increasing by approximately $175 million during the quarter to a total of $1.14 billion."

Conference CallCognizant will host a conference call August 4, at 9:00 a.m. (ET) to discuss the Company's quarterly results. To listen to the call, please dial [phone] domestically or [phone] internationally and provide the conference ID number: 20632230. 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 [phone] for domestic callers and [phone] for international callers and entering "20632230" from two hours after the end of the call until 11:59 p.m. (ET) on Wednesday, August 12, 2009. The replay will also be available at Cognizant's web site www.cognizant.com for thirty days following the call. 2009 Al Bawaba (www.albawaba.com)

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