Cognizant Technology Solutions Corporation (Nasdaq: CTSH), a leading provider of information technology, consulting and business process outsourcing services, today announced its second quarter 2010 financial results.
Highlights - Second Quarter 2010
* Quarterly revenue rose to $1.105 billion, up 15% sequentially and 42% from the year-ago quarter.
* Quarterly diluted EPS on a GAAP basis was $0.56, compared to $0.47 in the year-ago quarter.
* Quarterly diluted EPS on a non-GAAP basis, which excludes stock-based compensation expense, was $0.59, compared to $0.50 in the year-ago quarter.
* GAAP and non-GAAP diluted EPS includes the impact of $0.02 in net non-operating foreign currency exchange losses.
Revenue for the second quarter of 2010 rose to $1.105 billion, up 42% from $776.6 million in the second quarter of 2009. GAAP net income was $172.2 million, or $0.56 per diluted share, compared to $141.3 million, or $0.47 per diluted share, in the second quarter of 2009. Diluted earnings per share on a non-GAAP basis was $0.59. GAAP operating margin for the quarter was 18.6%. Excluding stock-based compensation expense of $14.0 million, non-GAAP operating margin was 19.9%, within the Company's targeted 19-20% range. Earnings for the quarter included $4.6 million, or $0.02 per share, of net non-operating foreign currency exchange losses. Reconciliations of non-GAAP financial measures to GAAP operating results and diluted EPS are included at the end of this release.
"Second quarter results further substantiate the strength of the Cognizant model and the continued importance of investing in deep industry expertise, expanded geographic reach and emerging technologies," said Francisco D'Souza, President and CEO of Cognizant. "During the quarter, spending levels were very strong across clients in all our business segments and geographies. Our clients are investing again in discretionary programs to foster growth and innovation. We saw particular strength in our financial services segment, which had previously been hard hit by the global credit crisis."
2010 Outlook - Third Quarter and Full Year
The Company is providing the followingfollowing guidance:
* Third quarter 2010 revenue anticipated to be at least $1.175 billion.
* Third quarter 2010 diluted EPS expected to be $0.59 on a GAAP basis and $0.63 on a non-GAAP basis, which excludes $0.04 of estimated stock-based compensation expense.
* Fiscal 2010 revenue expected to be at least $4.46 billion, up at least 36% compared to 2009.
* Fiscal 2010 diluted EPS expected to be at least $2.26 on a GAAP basis, and at least $2.42 on a non-GAAP basis, which excludes $0.16 of estimated stock-based compensation expense.
* Due to continued volatility in the currency markets, EPS guidance excludes the impact of any future net non-operating foreign currency exchange gain or loss.
"We benefited from a surge in the initiation of discretionary projects over the past several months - in part due to pent-up demand created by the deferment of discretionary spending last year," said Gordon Coburn, Chief Financial and Operating Officer. "We remain focused on ensuring we have the infrastructure, people and processes necessary to support our strong growth while maintaining industry-leading quality and client satisfaction - and we believe we are succeeding in this goal."