TEANECK, New Jersey, February 9 /PRNewswire/ -- Cognizant Technology Solutions Corporation , a leading provider of information technology, consulting, and business process outsourcing services, today announced its fourth quarter and full year 2009 financial results.
Highlights - Fourth Quarter 2009 - Quarterly revenue rose to US$902.7 million, up 20% from the year-ago quarter and 6% sequentially. - Quarterly diluted EPS on a GAAP basis was US$0.47, compared to US$0.38 in the year-ago quarter. - Quarterly diluted EPS on a non-GAAP basis, which excludes stock-based compensation expense, was US$0.50, compared to US$0.41 in the year-ago quarter. - GAAP and non-GAAP diluted EPS includes the impact of US$0.01 in net non-operating foreign currency exchange losses. - Net headcount additions for the quarter exceeded 10,300; year-end headcount approximately 78,400.
Revenue for the fourth quarter of 2009 rose to US$902.7 million, up 20% from US$753.0 million in the fourth quarter of 2008. GAAP net income was US$144.0 million, or US$0.47 per diluted share, compared to US$112.3 million, or US$0.38 per diluted share, in the fourth quarter of 2008. Diluted earnings per share on a non-GAAP basis was US$0.50. GAAP operating margin for the quarter was 18.5%. Excluding stock-based compensation expense of US$12.8 million, non-GAAP operating margin was 19.9%, in line with the Company's targeted 19 to 20% range. Earnings for the quarter included US$4.5 million of net pre-tax non-operating foreign exchange losses. Reconciliations of non-GAAP financial measures to GAAP operating results and diluted EPS are included at the end of this release.
Despite a very difficult economy, Cognizant delivered strong results with 16% annual revenue growth. The investments we made in our business leave us in an even stronger position than when we entered 2009, said Francisco D'Souza, President and CEO of Cognizant. During the year, we grew our workforce by more than 16,700 people, improved our employee utilization, strengthened our client partnerships, and brought new services and capabilities to market. We believe Cognizant is set to deliver robust performance in 2010 and will continue to set new standards for our industry.
Highlights - Full Year 2009 - Revenue increased to US$3.279 billion, up 16% from the previous year. - Diluted EPS on a GAAP basis was US$1.78, compared to US$1.44 in the previous year. - Diluted EPS on a non-GAAP basis, which excludes US$0.12 in stock-based compensation expense and stock-based Indian fringe benefit tax expenses, was US$1.90, compared to US$1.59 in the previous year.
Revenue for 2009 increased to US$3.279 billion, up 16% from US$2.816 billion for 2008. GAAP net income was US$535.0 million, or US$1.78 per diluted share, compared to US$430.8 million, or US$1.44 per diluted share, for 2008. Diluted earnings per share on a non-GAAP basis was US$1.90. GAAP operating margin was 18.9%. Excluding stock-based compensation expense of US$44.8 million and stock-based Indian fringe benefit tax expense of US$0.9 million, non-GAAP operating margin was 20.3%. Reconciliations of these non-GAAP financial measures to GAAP operating results and diluted EPS are included in the table at the end of this release.
First Quarter Full Year 2010 Outlook
The Company is providing the following guidance: - First quarter 2010 revenue anticipated to be at least US$935 million. - First quarter 2010 diluted EPS expected to be US$0.48 on a GAAP basis and US$0.52 on a non-GAAP basis, which excludes US$0.04 of estimated stock-based compensation expense. - Fiscal 2010 revenue expected to be at least US$3.935 billion, up at least 20% compared to 2009. - Fiscal 2010 diluted EPS expected to be at least US$2.03 on a GAAP basis, and US$2.19 on a non-GAAP basis, which excludes US$0.16 of estimated stock-based compensation expense. - Due to continued volatility in the currency markets, EPS guidance excludes any non-operating foreign currency exchange gain or loss.
Cognizant delivered exceptional performance in 2009. A continued focus on operational excellence, combined with aggressive hiring in the latter part of last year, leaves us well positioned for a strong 2010, said Gordon Coburn, Chief Financial and Operating Officer. In addition, we further strengthened our balance sheet in 2009 with our cash, short- and long-term investments increasing by over US$210 million during the fourth quarter, and over US$625 million for the full year, to a total of approximately US$1.55 billion.
Cognizant will host a conference call February 9, 2010 at 8:00 a.m. (Eastern) to discuss the Company's quarterly and full year 2009 results. To listen to the conference call, please dial 800-374-0467 (domestically) and +1-706-679-3288 (internationally) and provide the following conference ID number: 50233460.
The conference call will also be available live via the Internet by accessing the Cognizant web site at http://www.cognizant.com. Please go to the web site at least 15 minutes prior to the call to register and to download and install any necessary audio software.
For those who cannot access the live broadcast, a replay will be available by dialing 800-642-1687 for domestic callers or +1-706-645-9291 for international callers and entering 50233460 from a half hour after the end of the call until 11:59 p.m. (Eastern) on Wednesday, February 17, 2010. The replay will also be available at Cognizant's web site http://www.cognizant.com for 30 days following the call.
Cognizant 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 approximately 78,400 employees as of December 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 SP 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 http://www.cognizant.com.
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.
About Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with GAAP, this press release includes the following measures defined by the Securities and Exchange Commission as non-GAAP financial measures: non-GAAP operating margin and non-GAAP diluted earnings per share. These non-GAAP measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures, the financial statements prepared in accordance with GAAP and reconciliations of Cognizant's GAAP financial statements to such non-GAAP measures should be carefully evaluated.
We seek to manage the company to a targeted operating margin, excluding stock-based compensation costs and applicable stock-based Indian fringe benefit tax, of 19% to 20% of revenues. Accordingly, we believe that non-GAAP operating margin and non-GAAP diluted earnings per share, excluding stock-based compensation costs and applicable stock-based Indian fringe benefit tax, are meaningful measures for investors to evaluate our financial performance. For our internal management reporting and budgeting purposes, we use financial statements that do not include stock-based compensation expense and applicable stock-based Indian fringe benefit tax for financial and operational decision making, to evaluate period-to-period comparisons and for making comparisons of our operating results to those of our competitors. Moreover, because of varying available valuation methodologies permitted under U.S. GAAP and the variety of award types that companies can use, we believe that providing non-GAAP financial measures that exclude stock-based compensation expense allows investors to make additional comparisons between our operating results to those of other companies. Accordingly, we believe that the presentation of non-GAAP operating margin and non-GAAP diluted earnings per share, when read in conjunction with our reported GAAP results, can provide useful supplemental information to our management and investors regarding financial and business trends relating to our financial condition and results of operations.
A limitation of using non-GAAP operating margin and non-GAAP diluted earnings per share versus operating margin and diluted earnings per share calculated in accordance with GAAP is that non-GAAP operating margin and non-GAAP diluted earnings per share exclude costs, namely, stock-based compensation that is recurring and applicable stock-based Indian fringe benefit tax that was repealed during the third quarter of 2009 retroactive to April 1, 2009. Stock-based compensation will continue to be for the foreseeable future a significant recurring expense in our business. In addition, other companies may calculate non-GAAP financial measures differently than us, thereby limiting the usefulness of these non-GAAP financial measures as a comparative tool. We compensate for this limitation by providing specific information regarding the GAAP amounts excluded from non-GAAP operating margin and non-GAAP diluted earnings per share and evaluating such non-GAAP financial measures with financial measures calculated in accordance with GAAP.
SOURCE: Cognizant Technology Solutions
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