TEANECK, N.J., Oct. 27, 2021 /PRNewswire/ -- Cognizant
(Nasdaq: CTSH), one of the world's leading professional services
companies, today announced its third quarter 2021 financial
results.
"I'm pleased with our third quarter performance. While the
industry faces an unprecedented competition for talent, we
attracted a record number of employees to Cognizant, and stayed
focused on delivering against our client commitments and our
strategic repositioning," said Brian
Humphries, Chief Executive Officer. "We continue to make
important investments to ensure Cognizant is well positioned to
serve our clients as they embrace digital business models."
|
|
Q3
2021
|
|
Q3
2020
|
Revenue (in
billions)
|
|
$4.7
|
|
|
$4.2
|
|
GAAP operating
margin
|
|
15.4
|
%
|
|
14.2
|
%
|
Adjusted Operating
Margin1
|
|
15.8
|
%
|
|
15.9
|
%
|
GAAP diluted
EPS
|
|
$1.03
|
|
|
$0.64
|
|
Adjusted Diluted
EPS1
|
|
$1.06
|
|
|
$0.97
|
|
Third Quarter 2021 Performance by Business Segment
Financial Services revenue grew 5.1% year-over-year, or
4.3% in constant currency, which included the benefit of recently
completed acquisitions and revenue growth generated by our digital
services in both banking and insurance. Declines related to our
non-digital services reflected clients' continued focus on cost
optimization of supporting their legacy systems and operations.
Healthcare revenue grew 10.0% year-over-year, or 9.8% in
constant currency. Revenue growth among our life sciences clients
was driven by increased demand for our services among
pharmaceutical companies. Revenue growth among our healthcare
customers benefited from increased demand for our integrated
software solutions.
Products and Resources revenue grew 19.4% year-over-year,
or 18.1% in constant currency, which included the benefit of
recently completed acquisitions and revenue growth driven by our
clients' adoption of digital technologies. We experienced improved
demand across retail, consumer goods, travel, and hospitality
following the negative impact from the pandemic in 2020.
Communications, Media and Technology revenue grew 20.0%
year-over-year, or 19.1% in constant currency. Revenue growth
included the benefit of recently completed acquisitions and
continued strong demand from technology clients.
Return of Capital to Shareholders
During the third
quarter, the Company repurchased 1.3 million shares for
$100 million at an average price of
$76.10 under its share repurchase
program. As of September 30, 2021,
there was $2.2 billion remaining
under the current share repurchase authorization. In October 2021, the Company declared a quarterly
cash dividend of $0.24 per share for
shareholders of record on November 19,
2021. This dividend will be payable on November 30, 2021.
"During the third quarter, we drove strong bookings growth and
maintained our revenue momentum in a robust demand environment. We
are pleased with our ongoing investments in recruiting, which
enabled us to support accelerating demand by meaningfully scaling
our headcount," said Jan Siegmund,
Chief Financial Officer. "We now expect full-year revenue growth of
approximately 10% in constant currency, towards the high-end of our
prior range."
Fourth Quarter and Full Year 2021 Outlook
The Company
provided the following guidance:
- Fourth quarter revenue is expected to be $4.75-$4.79
billion, or growth of 13.5-14.5% (13.3-14.3% in constant
currency).
- Full year 2021 revenue is expected to be approximately
$18.5 billion, or growth of 11.1% (
9.8% in constant currency).
- Full year 2021 Adjusted Operating Margin2 is
expected to be approximately 15.4%.
- Full year 2021 Adjusted Diluted EPS2 is expected to
be in the range of $4.02-$4.06.
Conference Call
Cognizant will host a conference call
on October 27, 2021, at 5:00
p.m. (Eastern) to discuss the Company's third quarter 2021
results. To listen to the conference call, please dial (877)
810-9510 (domestic) or +1 (201) 493-6778 (international) and
provide the following conference passcode: "Cognizant
Call."
The conference call will also be available live on the Investor
Relations section of the Cognizant website at
http://investors.cognizant.com. An earnings supplement will also be
available on the Cognizant website at the time of the conference
call.
For those who cannot access the live broadcast, a replay will be
available. To listen to the replay, please dial (877) 660-6853
(domestically) or +1 (201) 612-7415 (internationally) and enter
13723436 from two hours after the end of the call until
11:59 p.m. (Eastern) on Wednesday,
November 10, 2021. The replay will also be available at
Cognizant's website www.cognizant.com for 60 days following the
call.
2021 Investor Briefing
Cognizant will host a virtual
Investor Briefing on Thursday, November 18,
2021, beginning at 8:30 a.m.
(Eastern) and expected to end around 10:30
a.m. (Eastern). The event will include discussion of the
company's strategy and financial outlook, featuring presentations
from Chief Executive Officer Brian
Humphries and Chief Financial Officer Jan Siegmund. The event will be webcast live and
will be accessible on Cognizant's Investor Relations website at
http://investors.cognizant.com.
|
|
|
|
|
1
|
Constant currency
("CC") revenue growth, Adjusted Operating Margin and Adjusted
Diluted Earnings Per Share ("Adjusted Diluted EPS") are not
measures of financial performance prepared in accordance with GAAP.
See "About Non-GAAP Financial Measures and Performance Metrics" for
more information and, where applicable, reconciliations to the most
directly comparable GAAP financial measures at the end of this
release.
|
2
|
A full reconciliation
of Adjusted Operating Margin and Adjusted Diluted EPS guidance to
the corresponding GAAP measure on a forward-looking basis cannot be
provided without unreasonable efforts, as we are unable to provide
reconciling information with respect to unusual items. See "About
Non-GAAP Financial Measures and Performance Metrics" for more
information and a partial reconciliation at the end of this
release.
|
About Cognizant
Cognizant (Nasdaq: CTSH) engineers
modern businesses. We help our clients modernize technology,
reimagine processes and transform experiences so they can stay
ahead in our fast-changing world. Together, we're improving
everyday life. See how at www.cognizant.com or @cognizant.
Forward-Looking Statements
This press release
includes statements that 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. These statements
include, but are not limited to, express or implied forward-looking
statements relating to our expectations regarding the impact of the
COVID-19 pandemic on our business, opportunities in the
marketplace, investment in and growth of our business, the
effectiveness of our recruiting and talent efforts, the impact of
the 2020 Fit for Growth Plan, our and our clients' shift to digital
solutions and services and our anticipated financial performance.
These statements are neither promises nor guarantees, but are
subject to a variety of risks and uncertainties, many of which are
beyond our control, which could cause actual results to differ
materially from those contemplated in these forward-looking
statements. Existing and prospective investors are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date hereof. Factors that could
cause actual results to differ materially from those expressed or
implied include general economic conditions, the competitive and
rapidly changing nature of the markets we compete in, the
competitive marketplace for talent and its impact on employee
recruitment and retention, legal, reputational and financial risks
resulting from cyberattacks, the impact of and effectiveness of
business continuity plans during the COVID-19 pandemic, changes in
the regulatory environment, including with respect to immigration
and taxes, and the other factors discussed in our most
recent Annual Report on 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 and Performance
Metrics
To supplement our financial results presented in
accordance with GAAP, this press release includes references to the
following measures defined by the Securities and Exchange
Commission as non-GAAP financial measures: Adjusted Income From
Operations, Adjusted Operating Margin, Adjusted Diluted EPS, free
cash flow, net cash and constant currency revenue growth. These
non-GAAP financial 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 financial
measures used by other companies. In addition, these non-GAAP
financial measures should be read in conjunction with our financial
statements prepared in accordance with GAAP. The reconciliations of
our non-GAAP financial measures to the corresponding GAAP measures
should be carefully evaluated.
Our non-GAAP financial measures, Adjusted Operating Margin,
Adjusted Income From Operations and Adjusted Diluted EPS exclude
unusual items. Additionally, Adjusted Diluted EPS excludes net
non-operating foreign currency exchange gains or losses and the tax
impact of all the applicable adjustments. The income tax impact of
each item is calculated by applying the statutory rate and local
tax regulations in the jurisdiction in which the item was incurred.
Free cash flow is defined as cash flows from operating activities
net of purchases of property and equipment. Net cash is defined as
cash and cash equivalents and short-term investments less
short-term and long-term debt. Constant currency revenue growth is
defined as revenues for a given period restated at the comparative
period's foreign currency exchange rates measured against the
comparative period's reported revenues.
Management believes providing investors with an operating
view consistent with how we manage the Company provides enhanced
transparency into our operating results. For our internal
management reporting and budgeting purposes, we use various GAAP
and non-GAAP financial measures for financial and operational
decision-making, to evaluate period-to-period comparisons, to
determine portions of the compensation for our executive officers
and for making comparisons of our operating results to those of our
competitors. Therefore, it is our belief that the use of non-GAAP
financial measures excluding certain costs provides a meaningful
supplemental measure for investors to evaluate our financial
performance. Accordingly, we believe that the presentation of our
non-GAAP measures, 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 financial measures versus
financial measures calculated in accordance with GAAP is that
non-GAAP financial measures do not reflect all of the amounts
associated with our operating results as determined in accordance
with GAAP and may exclude costs that are recurring such as our net
non-operating foreign currency exchange gains or losses. 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 these limitations by providing specific information regarding
the GAAP amounts excluded from our non-GAAP financial measures to
allow investors to evaluate such non-GAAP financial
measures.
Bookings are defined as total contract value (or TCV) of new
contracts, including new contract sales as well as renewals and
expansions of existing contracts. Bookings can vary significantly
quarter to quarter depending in part on the timing of the signing
of a small number of large contracts. Our book-to-bill ratio is
defined as bookings for the trailing twelve months divided by
revenue for the same period. Measuring bookings involves the use of
estimates and judgments and there are no independent standards or
requirements governing the calculation of bookings. The extent and
timing of conversion of bookings to revenues may be impacted by,
among other factors, the types of services and solutions sold,
contract duration, the pace of client spending, actual volumes of
services delivered as compared to the volumes anticipated at the
time of sale, and contract modifications, including terminations,
over the lifetime of a contract. The majority of our contracts are
terminable by the client on short notice often without penalty, and
some without notice. We do not update our bookings for material
subsequent terminations or reductions related to bookings
originally recorded in prior year periods or foreign currency
exchange rate fluctuations. Information regarding our bookings is
not comparable to, nor should it be substituted for, an analysis of
our reported revenues. However, management believes that it is a
key indicator of potential future revenues and provides a useful
indicator of the volume of our business over time.
We disclose digital revenue as management believes it
provides additional insights into the Company's business. Measuring
digital revenue requires the use of estimates and judgement, there
are no independent standards or requirements governing the
calculation and our calculation may differ from the calculations
underlying similar such metrics disclosed by other
companies.
Investor Relations
Contact:
|
|
|
|
Media
Contact:
|
Tyler
Scott
|
|
|
|
Jeff
DeMarrais
|
VP, Investor
Relations
|
|
|
|
VP, Corporate
Communications
|
551-220-8246
|
|
|
|
475-223-2298
|
Tyler.Scott@cognizant.com
|
|
|
|
Jeff.DeMarrais@cognizant.com
|
- tables to follow -
COGNIZANT
TECHNOLOGY SOLUTIONS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
(in
millions, except per share data)
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues
|
$
|
4,744
|
|
|
$
|
4,243
|
|
|
$
|
13,730
|
|
|
$
|
12,468
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of revenues
(exclusive of depreciation and amortization expense
shown separately below)
|
2,947
|
|
|
2,647
|
|
|
8,574
|
|
|
8,009
|
|
Selling, general and
administrative expenses
|
924
|
|
|
804
|
|
|
2,632
|
|
|
2,226
|
|
Restructuring
charges
|
—
|
|
|
51
|
|
|
—
|
|
|
177
|
|
Depreciation and
amortization expense
|
144
|
|
|
138
|
|
|
430
|
|
|
407
|
|
Income from
operations
|
729
|
|
|
603
|
|
|
2,094
|
|
|
1,649
|
|
Other income
(expense), net:
|
|
|
|
|
|
|
|
Interest
income
|
7
|
|
|
27
|
|
|
23
|
|
|
105
|
|
Interest
expense
|
(3)
|
|
|
(6)
|
|
|
(7)
|
|
|
(21)
|
|
Foreign currency
exchange gains (losses), net
|
(3)
|
|
|
(1)
|
|
|
(19)
|
|
|
(105)
|
|
Other, net
|
1
|
|
|
1
|
|
|
(1)
|
|
|
1
|
|
Total other income
(expense), net
|
2
|
|
|
21
|
|
|
(4)
|
|
|
(20)
|
|
Income before
provision for income taxes
|
731
|
|
|
624
|
|
|
2,090
|
|
|
1,629
|
|
Provision for income
taxes
|
(187)
|
|
|
(276)
|
|
|
(531)
|
|
|
(552)
|
|
Income (loss) from
equity method investment
|
—
|
|
|
—
|
|
|
2
|
|
|
(1)
|
|
Net income
|
$
|
544
|
|
|
$
|
348
|
|
|
$
|
1,561
|
|
|
$
|
1,076
|
|
Basic earnings per
share
|
$
|
1.04
|
|
|
$
|
0.64
|
|
|
$
|
2.96
|
|
|
$
|
1.98
|
|
Diluted earnings per
share
|
$
|
1.03
|
|
|
$
|
0.64
|
|
|
$
|
2.96
|
|
|
$
|
1.98
|
|
Weighted average
number of common shares outstanding - Basic
|
525
|
|
|
542
|
|
|
527
|
|
|
543
|
|
Dilutive effect of
shares issuable under stock-based compensation plans
|
1
|
|
|
1
|
|
|
1
|
|
|
—
|
|
Weighted average
number of common shares outstanding - Diluted
|
526
|
|
|
543
|
|
|
528
|
|
|
543
|
|
COGNIZANT
TECHNOLOGY SOLUTIONS CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)
|
|
(in millions,
except par values)
|
September
30,
2021
|
|
December 31,
2020
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
1,664
|
|
|
$
|
2,680
|
|
Short-term
investments
|
749
|
|
|
44
|
|
Trade accounts
receivable, net
|
3,510
|
|
|
3,087
|
|
Other current
assets
|
1,072
|
|
|
1,040
|
|
Total current
assets
|
6,995
|
|
|
6,851
|
|
Property and
equipment, net
|
1,179
|
|
|
1,251
|
|
Operating lease
assets, net
|
956
|
|
|
1,013
|
|
Goodwill
|
5,451
|
|
|
5,031
|
|
Intangible assets,
net
|
1,198
|
|
|
1,046
|
|
Deferred income tax
assets, net
|
282
|
|
|
445
|
|
Long-term
investments
|
466
|
|
|
440
|
|
Other noncurrent
assets
|
705
|
|
|
846
|
|
Total
assets
|
$
|
17,232
|
|
|
$
|
16,923
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
351
|
|
|
$
|
389
|
|
Deferred
revenue
|
312
|
|
|
383
|
|
Short-term
debt
|
38
|
|
|
38
|
|
Operating lease
liabilities
|
200
|
|
|
211
|
|
Accrued expenses and
other current liabilities
|
2,418
|
|
|
2,519
|
|
Total current
liabilities
|
3,319
|
|
|
3,540
|
|
Deferred revenue,
noncurrent
|
37
|
|
|
36
|
|
Operating lease
liabilities, noncurrent
|
804
|
|
|
846
|
|
Deferred income tax
liabilities, net
|
214
|
|
|
206
|
|
Long-term
debt
|
636
|
|
|
663
|
|
Long-term income
taxes payable
|
378
|
|
|
428
|
|
Other noncurrent
liabilities
|
298
|
|
|
368
|
|
Total
liabilities
|
5,686
|
|
|
6,087
|
|
Stockholders'
equity:
|
|
|
|
Preferred stock,
$0.10 par value, 15 shares authorized, none issued
|
—
|
|
|
—
|
|
Class A common
stock, $0.01 par value, 1,000 shares authorized, 525 and 530 shares
issued and
outstanding as of September 30, 2021
and December 31, 2020, respectively
|
5
|
|
|
5
|
|
Additional paid-in
capital
|
29
|
|
|
32
|
|
Retained
earnings
|
11,479
|
|
|
10,689
|
|
Accumulated other
comprehensive income (loss)
|
33
|
|
|
110
|
|
Total stockholders'
equity
|
11,546
|
|
|
10,836
|
|
Total liabilities and
stockholders' equity
|
$
|
17,232
|
|
|
$
|
16,923
|
|
COGNIZANT
TECHNOLOGY SOLUTIONS CORPORATION
Reconciliations of Non-GAAP Financial Measures
(Unaudited)
|
|
(dollars in
millions, except per share amounts)
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
Guidance
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
Full Year
2021
|
GAAP income from
operations
|
$
|
729
|
|
|
$
|
603
|
|
|
$
|
2,094
|
|
|
$
|
1,649
|
|
|
|
Class Action
Settlement Loss(a)
|
20
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
|
Realignment
charges(b)
|
—
|
|
|
8
|
|
|
—
|
|
|
40
|
|
|
|
2020 Fit for Growth
Plan restructuring charges(c)
|
—
|
|
|
43
|
|
|
—
|
|
|
137
|
|
|
|
COVID-19
charges(d)
|
—
|
|
|
21
|
|
|
—
|
|
|
52
|
|
|
|
Adjusted Income From
Operations
|
$
|
749
|
|
|
$
|
675
|
|
|
$
|
2,114
|
|
|
$
|
1,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
15.4
|
%
|
|
14.2
|
%
|
|
15.3
|
%
|
|
13.2
|
%
|
|
|
Class Action
Settlement Loss
|
0.4
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1%
|
Realignment
charges
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.3
|
|
|
—
|
2020 Fit for Growth
Plan restructuring charges
|
—
|
|
|
1.0
|
|
|
—
|
|
|
1.1
|
|
|
—
|
COVID-19
charges
|
—
|
|
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|
—
|
Adjusted Operating
Margin
|
15.8
|
%
|
|
15.9
|
%
|
|
15.4
|
%
|
|
15.1
|
%
|
|
~15.4%
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings
per share
|
$
|
1.03
|
|
|
$
|
0.64
|
|
|
$
|
2.96
|
|
|
$
|
1.98
|
|
|
|
Effect of above
adjustments to income from
operations, pre-tax
|
0.04
|
|
|
0.13
|
|
|
0.04
|
|
|
0.42
|
|
|
$0.04
|
Non-operating foreign
currency exchange (gains)
losses,
pre-tax(e)
|
0.01
|
|
|
—
|
|
|
0.03
|
|
|
0.19
|
|
|
(e)
|
Tax effect of above
adjustments(f)
|
(0.02)
|
|
|
(0.06)
|
|
|
(0.01)
|
|
|
(0.10)
|
|
|
(a), (e)
|
Tax on Accumulated
Indian Earnings(g)
|
—
|
|
|
0.26
|
|
|
—
|
|
|
0.26
|
|
|
—
|
Adjusted Diluted
Earnings Per Share
|
$
|
1.06
|
|
|
$
|
0.97
|
|
|
$
|
3.02
|
|
|
$
|
2.75
|
|
|
$4.02 -
$4.06
|
Notes:
|
(a)
|
In the third quarter
of 2021, the parties to the consolidated putative securities class
action suit filed a settlement agreement that, subject to the
approval of the United States District Court for the District of
New Jersey, would resolve the consolidated putative securities
class action against us and certain of our former officers. The
settlement agreement provides for a payment of $95 million to the
putative class (inclusive of attorneys' fees and litigation
expenses). Adjusting for indemnification expenses, legal fees and
other covered expenses incurred through September 7, 2021, the
remaining available balance under the applicable directors and
officers insurance policies was $75 million. As a result, we
recorded a Class Action Settlement Loss of $20 million in "Selling,
general and administrative expenses" in our unaudited consolidated
financial statements. Our guidance anticipates an impact of $0.04
per diluted share for the full year 2021, with a tax impact of
$0.01 per diluted share.
|
(b)
|
As part of the
realignment program, during the three and nine months ended
September 30, 2020, we incurred employee retention costs and
professional fees. The total costs related to the realignment
plan are reported in "Restructuring charges" in our unaudited
consolidated statement of operations.
|
(c)
|
As part of our 2020
Fit for Growth plan, during the three and nine months ended
September 30, 2020, we incurred certain employee separation,
employee retention, facility exit costs and other charges. The
total costs related to the 2020 Fit for Growth Plan are reported in
"Restructuring charges" in our unaudited consolidated statement of
operations.
|
(d)
|
During the three and
nine months ended September 30, 2020, we incurred costs
in response to the COVID-19 pandemic including a one-time bonus to
our employees at the designation of associate and below in both
India and the Philippines, certain costs to enable our employees to
work remotely and costs to provide medical staff and extra cleaning
services for our facilities. Substantially all of the costs related
to the pandemic are reported in "Cost of revenues" in our unaudited
consolidated statement of operations.
|
(e)
|
Non-operating foreign
currency exchange gains and losses, inclusive of gains and losses
on related foreign exchange forward contracts not designated as
hedging instruments for accounting purposes, are reported in
"Foreign currency exchange gains (losses), net" in our unaudited
consolidated statements of operations. Non-operating foreign
currency exchange gains and losses are subject to high variability
and low visibility and therefore cannot be provided on a
forward-looking basis without unreasonable efforts.
|
(f)
|
Presented below are
the tax impacts of each of our non-GAAP adjustments to pre-tax
income for the three and nine months ended September
30:
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September 30,
|
(in
millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Non-GAAP income tax
benefit (expense) related to:
|
|
|
|
|
|
|
|
Class Action
Settlement Loss
|
6
|
|
|
—
|
|
6
|
|
|
—
|
Realignment
charges
|
—
|
|
|
2
|
|
|
—
|
|
|
10
|
|
2020 Fit For Growth
Plan restructuring charges
|
—
|
|
|
11
|
|
|
—
|
|
|
36
|
|
COVID-19
charges
|
—
|
|
|
6
|
|
|
—
|
|
|
14
|
|
Foreign currency
exchange gains and losses
|
3
|
|
|
15
|
|
|
(3)
|
|
|
(3)
|
|
(g)
|
During the third
quarter of 2020 we reversed our indefinite reinvestment assertion
on Indian earnings accumulated in prior years and recorded a $140
million Tax on Accumulated Indian Earnings. The recorded income tax
expense reflects the India withholding tax on unrepatriated Indian
earnings, which were $5.2 billion as of December 31, 2019, net of
applicable U.S. foreign tax credits.
|
Reconciliations of
net cash
|
|
(in
millions)
|
|
September 30,
2021
|
|
December 31,
2020
|
Cash and cash
equivalents
|
|
$
|
1,664
|
|
|
$
|
2,680
|
|
Short-term
investments
|
|
749
|
|
|
44
|
|
Less:
|
|
|
|
|
Short-term
debt
|
|
38
|
|
|
38
|
|
Long-term
debt
|
|
636
|
|
|
663
|
|
Net cash
|
|
$
|
1,739
|
|
|
$
|
2,023
|
|
The above tables serve to reconcile the Non-GAAP financial
measures to the most directly comparable GAAP measures. Refer to
the "About Non-GAAP Financial Measures and Performance Metrics"
section of our press release for further information on the use of
these Non-GAAP measures.
COGNIZANT
TECHNOLOGY SOLUTIONS CORPORATION
Revenue by Business Segment and Geography
(Unaudited)
|
|
(dollars in
millions)
|
Three Months Ended
September 30, 2021
|
|
|
|
|
|
Year over
Year
|
|
$
|
|
% of
total
|
|
%
Change
|
|
Constant
Currency %
Change (a)
|
Revenues by
Segment:
|
|
|
|
|
|
|
|
Financial
Services
|
$
|
1,544
|
|
|
32.6
|
%
|
|
5.1
|
%
|
|
4.3
|
%
|
Healthcare
|
1,354
|
|
|
28.5
|
%
|
|
10.0
|
%
|
|
9.8
|
%
|
Products and
Resources
|
1,107
|
|
|
23.3
|
%
|
|
19.4
|
%
|
|
18.1
|
%
|
Communications, Media
and Technology
|
739
|
|
|
15.6
|
%
|
|
20.0
|
%
|
|
19.1
|
%
|
Total
Revenues
|
$
|
4,744
|
|
|
|
|
11.8
|
%
|
|
11.0
|
%
|
Revenues by
Geography:
|
|
|
|
|
|
|
|
North
America
|
$
|
3,486
|
|
|
73.5
|
%
|
|
9.7
|
%
|
|
9.5
|
%
|
United
Kingdom
|
430
|
|
|
9.1
|
%
|
|
24.6
|
%
|
|
18.8
|
%
|
Continental
Europe
|
484
|
|
|
10.2
|
%
|
|
10.8
|
%
|
|
9.6
|
%
|
Europe -
Total
|
914
|
|
|
19.3
|
%
|
|
16.9
|
%
|
|
13.7
|
%
|
Rest of
World
|
344
|
|
|
7.2
|
%
|
|
22.0
|
%
|
|
21.0
|
%
|
Total
Revenues
|
$
|
4,744
|
|
|
|
|
11.8
|
%
|
|
11.0
|
%
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2021
|
|
|
|
|
|
Year over
Year
|
|
$
|
|
% of
total
|
|
%
Change
|
|
Constant
Currency %
Change (a)
|
Revenues by
Segment:
|
|
|
|
|
|
|
|
Financial
Services
|
$
|
4,504
|
|
|
32.8
|
%
|
|
4.4
|
%
|
|
2.5
|
%
|
Healthcare
|
3,967
|
|
|
28.9
|
%
|
|
10.7
|
%
|
|
10.0
|
%
|
Products and
Resources
|
3,160
|
|
|
23.0
|
%
|
|
15.0
|
%
|
|
12.5
|
%
|
Communications, Media
and Technology
|
2,099
|
|
|
15.3
|
%
|
|
15.2
|
%
|
|
13.2
|
%
|
Total
Revenues
|
$
|
13,730
|
|
|
|
|
10.1
|
%
|
|
8.4
|
%
|
Revenues by
Geography:
|
|
|
|
|
|
|
|
North
America
|
$
|
10,141
|
|
|
73.9
|
%
|
|
8.2
|
%
|
|
7.9
|
%
|
United
Kingdom
|
1,203
|
|
|
8.8
|
%
|
|
20.8
|
%
|
|
12.6
|
%
|
Continental
Europe
|
1,422
|
|
|
10.3
|
%
|
|
10.0
|
%
|
|
3.8
|
%
|
Europe -
Total
|
2,625
|
|
|
19.1
|
%
|
|
14.7
|
%
|
|
7.6
|
%
|
Rest of
World
|
964
|
|
|
7.0
|
%
|
|
19.9
|
%
|
|
16.4
|
%
|
Total
Revenues
|
$
|
13,730
|
|
|
|
|
10.1
|
%
|
|
8.4
|
%
|
Notes:
|
(a)
|
Constant currency
revenue growth is not a measure of financial performance prepared
in accordance with GAAP. See "About Non-GAAP Financial Measures and
Performance Metrics" section of our press release for further
information.
|
COGNIZANT
TECHNOLOGY SOLUTIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
(in
millions)
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
$
|
544
|
|
|
$
|
348
|
|
|
$
|
1,561
|
|
|
$
|
1,076
|
|
Adjustments for
non-cash income and expenses
|
237
|
|
|
499
|
|
|
769
|
|
|
986
|
|
Changes in assets and
liabilities
|
167
|
|
|
78
|
|
|
(660)
|
|
|
339
|
|
Net cash provided by
operating activities
|
948
|
|
|
925
|
|
|
1,670
|
|
|
2,401
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
(51)
|
|
|
(104)
|
|
|
(214)
|
|
|
(309)
|
|
Net (purchases) sales
of investments
|
(299)
|
|
|
26
|
|
|
(737)
|
|
|
189
|
|
Payments for business
combinations, net of cash acquired
|
(57)
|
|
|
(580)
|
|
|
(715)
|
|
|
(1,069)
|
|
Net cash (used in)
investing activities
|
(407)
|
|
|
(658)
|
|
|
(1,666)
|
|
|
(1,189)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Repurchases of common
stock
|
(129)
|
|
|
(248)
|
|
|
(689)
|
|
|
(833)
|
|
Repayment of term loan
borrowings and finance lease and earnout
obligations
|
(12)
|
|
|
(12)
|
|
|
(40)
|
|
|
(37)
|
|
Proceeds from
borrowings under the revolving credit facility
|
—
|
|
|
—
|
|
|
—
|
|
|
1,740
|
|
Dividends
paid
|
(127)
|
|
|
(120)
|
|
|
(382)
|
|
|
(362)
|
|
Issuance of common
stock under stock-based compensation plans
|
29
|
|
|
33
|
|
|
104
|
|
|
109
|
|
Net cash (used in)
provided by financing activities
|
(239)
|
|
|
(347)
|
|
|
(1,007)
|
|
|
617
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(6)
|
|
|
94
|
|
|
(13)
|
|
|
(38)
|
|
Increase
(decrease) in cash and cash equivalents
|
296
|
|
|
14
|
|
|
(1,016)
|
|
|
1,791
|
|
Cash and cash
equivalents, beginning of period
|
1,368
|
|
|
4,422
|
|
|
2,680
|
|
|
2,645
|
|
Cash and cash
equivalents, end of period
|
$
|
1,664
|
|
|
$
|
4,436
|
|
|
$
|
1,664
|
|
|
$
|
4,436
|
|
SUPPLEMENTAL CASH
FLOW INFORMATION
|
|
(in
millions)
|
|
Three Months
Ended
|
Stock Repurchases
under Board of Directors' authorized stock repurchase
program:
|
|
September 30,
2021
|
|
September 30,
2020
|
Number of shares
repurchased
|
|
1.3
|
|
|
4.1
|
|
|
|
|
|
|
Remaining authorized
balance as of September 30, 2021
|
|
$
|
2,185
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Free Cash Flow Non-GAAP Financial Measure
|
|
(in
millions)
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net cash provided by
operating activities
|
$
|
948
|
|
|
$
|
925
|
|
|
$
|
1,670
|
|
|
$
|
2,401
|
|
Purchases of property
and equipment
|
(51)
|
|
|
(104)
|
|
|
(214)
|
|
|
(309)
|
|
Free cash
flow
|
$
|
897
|
|
|
$
|
821
|
|
|
$
|
1,456
|
|
|
$
|
2,092
|
|
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SOURCE Cognizant