Cognizant revenue up 18.2pc year-over-year
Cognizant Technology Solutions Corporation (NASDAQ: CTSH), a leading provider of information technology, consulting, and business process outsourcing services, on Wednesday announced its third quarter 2012 financial results.
Highlights - Third Quarter 2012
Quarterly revenue rose to USD 1.892 billion, up 5.4pc sequentially and 18.2pc from the year-ago quarter.
Quarterly diluted EPS on a GAAP basis was USD 0.91, compared to USD 0.73 in the year-ago quarter.
Quarterly diluted EPS on a non-GAAP basis, which excludes stock-based compensation expense, was USD 0.97, compared to USD 0.80 in the year-ago quarter.
GAAP and non-GAAP diluted EPS includes the impact of USD 0.01 in net non-operating foreign currency exchange loss.
Net headcount addition for the quarter was approximately 5,100.
Revenue for the third quarter of 2012 rose to USD 1.892 billion, up 18.2pc from USD 1.601 billion in the third quarter of 2011.
GAAP net income was USD 276.9 million, or USD 0.91 per diluted share, compared to USD 227.1 million, or USD 0.73 per diluted share, in the third quarter of 2011.
Diluted earnings per share on a non-GAAP basis was USD 0.97. GAAP operating margin for the quarter was 18.8pc .
Excluding stock-based compensation expense of USD 22.3 million, non-GAAP operating margin was 20.0pc , in line with the Company's targeted 19-20pc range.
Reconciliations of non-GAAP financial measures to GAAP operating results and diluted EPS are included at the end of this release.
"Cognizant's strong results reaffirm the acceptance of our value proposition that helps clients address the dual mandate of driving efficiency and effectiveness in their core business while investing in innovation and business transformation for long-term growth," said Francisco D'Souza, Chief Executive Officer.
"Our consulting-led approach, intimate client relationships, deep domain knowledge and robust execution give us the confidence to deliver revenue growth of at least 20pc in 2012."
Gordon Coburn, President, said: "Of particular note this quarter is the performance of our newer service offerings of Consulting, Business Process Outsourcing and IT Infrastructure Services. On a combined basis, these services have been growing materially faster than company average, and this quarter comprised nearly 20pc of total revenue.
"They will continue to be important drivers of our long-term growth as each represents a large addressable market with low penetration of the global delivery model."
2012 Outlook - Fourth Quarter and Full Year
The Company is providing the following guidance:
Fourth quarter 2012 revenue anticipated to be at least USD 1.94 billion.
Fourth quarter 2012 diluted EPS expected to be USD 0.91 on a GAAP basis and USD 0.97 on a non-GAAP basis, which excludes estimated stock-based compensation expense.
Fiscal 2012 revenue expected to be at least USD 7.34 billion, up at least 20pc compared to 2011.
Fiscal 2012 diluted EPS expected to be at least USD 3.42 on a GAAP basis, and USD 3.69 on a non-GAAP basis, which excludes estimated stock-based compensation expense.
EPS guidance excludes any fourth quarter non-operating foreign currency exchange gain or loss.
"Our financial model continues to allow us to deliver robust top-line growth with stable margins, while investing in our next generation of services to ensure long-term strength," said Karen McLoughlin, Chief Financial Officer.
"Despite the recent appreciation of the Indian Rupee, we remain confident in our ability to maintain our non-GAAP operating margin within our stated 19-20pc range. Our extensive India Rupee hedge program, which now totals approximately USD 3.7 billion, helps mitigate the impact of such volatility on our operating margins.
"In addition, strong cash flows during the quarter allowed us to increase our cash and investment balances by almost USD 300 million to over USD 2.6 billion."