Cognizant Technology Solutions Corporation (NASDAQ: CTSH), a leading provider of information technology, consulting and business process outsourcing services, today announced its third quarter 2010 financial results.
Highlights Third Quarter 2010
* Quarterly revenue rose to $1.217 billion, up 10% sequentially and 43% from the year-ago quarter.
* Quarterly diluted earnings per share (EPS) on a GAAP basis was $0.66, compared to $0.45 in the year-ago quarter.
* Quarterly diluted EPS on a non-GAAP basis, which excludes stock-based compensation expense, was $0.69, compared to $0.48 in the year-ago quarter.
* GAAP and non-GAAP diluted EPS includes the impact of $0.03 in net non-operating foreign currency exchange gains.
Revenue for the third quarter of 2010 rose to $1.217 billion, up 43% from $853.5 million in the third quarter of 2009. GAAP net income was $203.7 million, or $0.66 per diluted share, compared to $136.6 million, or $0.45 per diluted share, in the third quarter of 2009. Diluted EPS on a non-GAAP basis was $0.69. GAAP operating margin for the quarter was 18.8%. Excluding stock-based compensation expense of $14.1 million, non-GAAP operating margin was 19.9%, within the Company's targeted 19-20% range. Earnings for the quarter included $7.6 million, or $0.03 per share, of net non-operating foreign currency exchange gains. Reconciliations of non-GAAP financial measures to GAAP operating results and diluted EPS are included at the end of this release.
"Yet another strong quarter is continuing evidence that clients are not just seeking cost efficiencies, but are also stepping up investments in their business platforms and new capabilities to drive growth and innovation," said Francisco D'Souza, President and Chief Executive Officer of Cognizant. "The success of our long-time reinvestment strategy positions us as a credible advisor to our clients, as we work with them to address the critical issues facing their businesses: the new generation of increasingly globalized and virtualized business models, the new generation of millennials as consumers and employees, and the new generation of transformative technologies such as cloud, social computing and mobility."
2010 Outlook - Fourth Quarter & Full Year
The Company is providing the following guidance:
* Fourth quarter 2010 revenue anticipated to be at least $1.27 billion.
* Fourth quarter 2010 diluted EPS expected to be $0.64 on a GAAP basis and $0.68 on a non-GAAP basis, which excludes $0.04 of estimated stock-based compensation expense.
* Fiscal 2010 revenue expected to be at least $4.55 billion, up at least 38.8% compared to 2009.
* Fiscal 2010 diluted EPS expected to be at least $2.35 on a GAAP basis, and at least $2.50 on a non-GAAP basis, which excludes $0.15 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 are pleased to have delivered two consecutive quarters of double-digit sequential revenue growth. Importantly, our growth was once again broad-based -- across industries, service lines and geographies," said Gordon Coburn, Chief Financial and Operating Officer, Cognizant. In addition, our record level of cash generation is further evidence of our solid financial model. Despite the strengthening of the Indian rupee, we remain confident in our ability to maintain non-GAAP operating margins within our targeted range."