Cognizant Technology Solutions Corporation (NASDAQ: CTSH), a leading provider of information technology, consulting, and business process outsourcing services, today announced its first quarter 2011 financial results.
Highlights - First Quarter 2011
• Quarterly revenue rose to $1.37 billion, up 42.9% from the year-ago quarter and 4.6% sequentially.
• Quarterly diluted EPS on a GAAP basis was $0.67, compared to $0.49 in the year-ago quarter.
• Quarterly diluted EPS on a non-GAAP basis, which excludes stock-based compensation expense, was $0.71, compared to $0.53 in the year-ago quarter.
• GAAP and non-GAAP diluted EPS includes the impact of $0.02 in net non-operating foreign currency exchange gains.
• Net headcount addition for the quarter exceeded 7,200.
Revenue for the first quarter of 2011 rose to $1.37 billion, up 42.9% from $959.7 million in the first quarter of 2010. GAAP net income was $208.3 million, or $0.67 per diluted share, compared to $151.5 million, or $0.49 per diluted share, in the first quarter of 2010. Diluted earnings per share on a non-GAAP basis was $0.71. GAAP operating margin for the quarter was 19.4%. Excluding stock-based compensation expense of $16.1 million, non-GAAP operating margin was 20.5%, slightly higher than 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 with yet another quarter of solid growth as we continue to benefit from a strong demand environment," said Francisco D'Souza, President and Chief Executive Officer of Cognizant. "During this time of significant secular change impacting our clients, we continue to enhance our competitive differentiation, namely our trusted client relationships, our deep domain expertise, and our 'born global' delivery network. Cognizant is uniquely positioned to help clients both operate and improve existing processes and infrastructure as well as transform their businesses to adapt to new virtualized business models, new mobile and social technologies and a new generation of 'born digital' workers and consumers."
2011 Outlook - Second Quarter and Full Year
The Company is providing the following guidance:
• Second quarter 2011 revenue anticipated to be at least $1.45 billion.
• Second quarter 2011 diluted EPS expected to be $0.65 on a GAAP basis and $0.70 on a non-GAAP basis, which excludes $0.05 of estimated stock-based compensation expense.
• Fiscal 2011 revenue expected to be at least $5.925 billion, up at least 29% compared to 2010.
• Fiscal 2011 diluted EPS expected to be at least $2.72 on a GAAP basis, and $2.91 on a non-GAAP basis, which excludes $0.19 of estimated stock-based compensation expense.
• Due to continued volatility in the currency markets, EPS guidance excludes any future non-operating foreign currency exchange gain or loss.
"We are particularly pleased with our continued success in recruiting talent throughout the world to position Cognizant for continued industry-leading growth," said Gordon Coburn, Chief Financial and Operating Officer. "Our strong financial model continues to provide the resources to drive our long-term competitive differentiation. We remain confident in our strategy of maintaining our non-GAAP operating margins within a targeted range of 19-20% while allowing for strong and consistent investment in new service and delivery capabilities as well as in the best global talent."