- Revenue of $4.9 billion grew 2.4%
year-over-year, or 5.6% in constant currency1
- Operating Margin and Adjusted Operating Margin of 16.4%, an
increase of 100 and 60 basis points year-over-year,
respectively
- Operating cash flow of $1,032
million and free cash flow[1] of $953
million
- Over $1.5 billion deployed on
share repurchases and dividends year-to-date
- Board of Directors approved an increase of $2 billion to the share repurchase
authorization
- Revised full-year 2022 revenue growth guidance to 4.5%, or 7.0%
in constant currency
TEANECK,
N.J., Nov. 2, 2022 /PRNewswire/ -- Cognizant
(Nasdaq: CTSH), one of the world's leading professional services
companies, today announced its third quarter 2022 financial
results.
"Revenue and bookings were below our expectations as company
specific fulfillment challenges were compounded by the impact of an
uncertain macroeconomic backdrop," said Brian Humphries, Chief Executive Officer. "We
are confident the steps we are taking will return the company to
accelerated growth over the medium to long term."
|
Q3
2022
|
|
Q3
2021
|
|
Revenue (in
billions)
|
$4.9
|
|
$4.7
|
|
Y/Y Growth
|
2.4 %
|
|
11.8 %
|
|
Y/Y Growth
CC1
|
5.6 %
|
|
11.0 %
|
|
GAAP Operating
Margin
|
16.4 %
|
|
15.4 %
|
|
Adjusted Operating
Margin1
|
16.4 %
|
|
15.8 %
|
|
GAAP Diluted
EPS
|
$1.22
|
|
$1.03
|
|
Adjusted Diluted
EPS1
|
$1.17
|
|
$1.06
|
|
Third Quarter 2022 Performance by Business Segment
Financial Services revenue declined 1.5% year-over-year,
but grew 1.6% in constant currency. Growth was driven by digital
services among public sector clients in the United Kingdom and insurance clients. Growth
was offset by 180 basis points negative impact related to the
previously disclosed sale of the Samlink subsidiary (completed
February 1, 2022).
Health Sciences revenue grew 3.8% year-over-year, or 5.5%
in constant currency. Growth was driven by digital services among
pharmaceutical and healthcare payer clients.
Products and Resources revenue grew 3.7% year-over-year,
or 8.2% in constant currency, driven by digital services among
logistics, automotive, consumer goods and travel and hospitality
clients.
Communications, Media and Technology revenue grew 6.0%
year-over-year, or 10.4% in constant currency, driven by strength
among digital native companies.
Bookings
Bookings in the quarter declined 2% year-over-year and
represented an in-period book-to-bill of approximately 1.0x. This
resulted in trailing 12-month bookings of $23.1 billion, which represented a
book-to-bill of approximately 1.2x.
Return of Capital to Shareholders
The Company repurchased 4.6 million shares for $300 million during the third quarter and 13.9
million shares for $1.0 billion
year-to-date under its share repurchase program. As of September 30, 2022, there was $1.1 billion remaining under the share repurchase
authorization. On November 1, 2022,
the Company increased its share repurchase authorization by
$2 billion. On November 2, 2022, the Company declared a
quarterly cash dividend of $0.27 per
share for shareholders of record on November
18, 2022. This dividend is payable on November 29, 2022.
"Strong free cash flow conversion and a healthy balance sheet
have allowed us to return $1.5
billion to shareholders year-to-date while maintaining
flexibility to pursue future acquisitions. Our revised 2022 revenue
guidance reflects year-to-date results, currency headwinds and an
uncertain macroeconomic environment," said Jan Siegmund, Chief Financial Officer. "We are
carefully monitoring the demand picture while driving operational
discipline to better position the company for revenue growth
opportunities."
Fourth Quarter and Full Year 2022 Outlook
The Company provided the following guidance:
- Fourth quarter revenue is expected to be $4.72-$4.77
billion, or a decline of 0.2%-1.2% (growth of 2.0%-3.0% in
constant currency).
- Full-year 2022 revenue is expected to be approximately
$19.3 billion, or growth of 4.5%
(7.0% in constant currency).
- Full-year 2022 Adjusted Operating Margin2 is
expected to expand 20 basis points to 15.6%.2
- Full-year 2022 Adjusted Diluted EPS2 is expected to
be in the range of $4.43-$4.46.
Conference Call
Cognizant will host a conference call on November 2, 2022,
at 5:00 p.m. (Eastern) to discuss the
Company's third quarter 2022 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
13732397 beginning two hours after the end of the call until
11:59 p.m. (Eastern) on Wednesday,
November 16, 2022. The replay will also be available at
Cognizant's website www.cognizant.com for 60 days following the
call.
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, our strategy, competitive position and opportunities in
the marketplace, investment in and growth of our business, the
effectiveness of our recruiting and talent efforts and related
costs, trends in demand for digital solutions and services, labor
market trends, the anticipated amount of capital to be returned to
shareholders 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, risks related to the invasion of Ukraine by Russia, 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
Non-GAAP Financial Measures
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 and
Adjusted Income From Operations exclude unusual items, such as the
Class Action Litigation Settlement in the third quarter of 2021.
Our non-GAAP financial measure Adjusted Diluted EPS excludes
unusual items, such as the Class Action Litigation Settlement in
the third quarter of 2021 and the effect of recognition in the
third quarter of 2022 of an income tax benefit related to a
specific uncertain tax position that was previously unrecognized in
our prior year consolidated financial statements, 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 excluded from Adjusted Diluted EPS 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. Accordingly, we believe that the presentation of our
non-GAAP measures, which exclude certain costs, 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.
Performance Metrics
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 subsequent
terminations, reductions 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. In
the first quarter of 2022, we modified our definition of digital
revenue to reflect our latest assessment of digital skills, growth
priorities and pricing initiatives. Under the updated definition,
digital revenue as a percentage of total revenue was 46%, 47%, 49%
and 49% for the first, second, third and fourth quarter of 2021,
respectively, and 48% for full year 2021.
Investor Relations
Contact:
|
|
|
|
Media
Contact:
|
Tyler Scott
|
|
|
|
Jeff
DeMarrais
|
VP, Investor
Relations
|
|
|
|
VP, Corporate
Communications
|
+1
551-220-8246
|
|
|
|
+1
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,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
$ 4,857
|
|
$ 4,744
|
|
$
14,589
|
|
$
13,730
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of revenues
(exclusive of depreciation and amortization expense
shown separately below)
|
3,080
|
|
2,947
|
|
9,296
|
|
8,574
|
Selling, general and
administrative expenses
|
838
|
|
924
|
|
2,583
|
|
2,632
|
Depreciation and
amortization expense
|
141
|
|
144
|
|
428
|
|
430
|
Income from
operations
|
798
|
|
729
|
|
2,282
|
|
2,094
|
Other income (expense),
net:
|
|
|
|
|
|
|
|
Interest
income
|
17
|
|
7
|
|
32
|
|
23
|
Interest
expense
|
(6)
|
|
(3)
|
|
(11)
|
|
(7)
|
Foreign currency
exchange gains (losses), net
|
3
|
|
(3)
|
|
(1)
|
|
(19)
|
Other, net
|
—
|
|
1
|
|
—
|
|
(1)
|
Total other income
(expense), net
|
14
|
|
2
|
|
20
|
|
(4)
|
Income before provision
for income taxes
|
812
|
|
731
|
|
2,302
|
|
2,090
|
Provision for income
taxes
|
(183)
|
|
(187)
|
|
(537)
|
|
(531)
|
Income (loss) from
equity method investment
|
—
|
|
—
|
|
4
|
|
2
|
Net income
|
$
629
|
|
$
544
|
|
$ 1,769
|
|
$ 1,561
|
Basic earnings per
share
|
$ 1.22
|
|
$ 1.04
|
|
$ 3.40
|
|
$ 2.96
|
Diluted earnings per
share
|
$ 1.22
|
|
$ 1.03
|
|
$ 3.40
|
|
$ 2.96
|
Weighted average number
of common shares outstanding - Basic
|
516
|
|
525
|
|
520
|
|
527
|
Dilutive effect of
shares issuable under stock-based compensation plans
|
1
|
|
1
|
|
1
|
|
1
|
Weighted average number
of common shares outstanding - Diluted
|
517
|
|
526
|
|
521
|
|
528
|
COGNIZANT TECHNOLOGY
SOLUTIONS CORPORATION
CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
(Unaudited)
|
|
(in millions, except
par values)
|
September
30,
2022
|
|
December 31,
2021
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
2,042
|
|
$
1,792
|
Short-term
investments
|
689
|
|
927
|
Trade accounts
receivable, net
|
3,686
|
|
3,557
|
Other current
assets
|
900
|
|
1,066
|
Total current
assets
|
7,317
|
|
7,342
|
Property and equipment,
net
|
1,105
|
|
1,171
|
Operating lease assets,
net
|
873
|
|
933
|
Goodwill
|
5,425
|
|
5,620
|
Intangible assets,
net
|
1,038
|
|
1,218
|
Deferred income tax
assets, net
|
520
|
|
404
|
Long-term
investments
|
431
|
|
463
|
Other noncurrent
assets
|
638
|
|
701
|
Total
assets
|
$
17,347
|
|
$
17,852
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
367
|
|
$
361
|
Deferred
revenue
|
345
|
|
403
|
Short-term
debt
|
—
|
|
38
|
Operating lease
liabilities
|
173
|
|
195
|
Accrued expenses and
other current liabilities
|
2,338
|
|
2,532
|
Total current
liabilities
|
3,223
|
|
3,529
|
Deferred revenue,
noncurrent
|
17
|
|
40
|
Operating lease
liabilities, noncurrent
|
711
|
|
783
|
Deferred income tax
liabilities, net
|
190
|
|
218
|
Long-term
debt
|
636
|
|
626
|
Long-term income taxes
payable
|
283
|
|
378
|
Other noncurrent
liabilities
|
329
|
|
287
|
Total
liabilities
|
5,389
|
|
5,861
|
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, 514 and 525 shares
issued
and outstanding as of September 30, 2022 and December 31, 2021,
respectively
|
5
|
|
5
|
Additional paid-in
capital
|
17
|
|
27
|
Retained
earnings
|
12,447
|
|
11,922
|
Accumulated other
comprehensive income (loss)
|
(511)
|
|
37
|
Total stockholders'
equity
|
11,958
|
|
11,991
|
Total liabilities and
stockholders' equity
|
$
17,347
|
|
$
17,852
|
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
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
Full Year
2022
|
GAAP income from
operations
|
$
798
|
|
$
729
|
|
$ 2,282
|
|
$ 2,094
|
|
|
Class Action
Settlement Loss(a)
|
—
|
|
20
|
|
—
|
|
20
|
|
|
Adjusted Income From
Operations
|
$
798
|
|
$
749
|
|
$ 2,282
|
|
$ 2,114
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
16.4 %
|
|
15.4 %
|
|
15.6 %
|
|
15.3 %
|
|
|
Class Action
Settlement Loss(a)
|
—
|
|
0.4
|
|
—
|
|
0.1
|
|
—
|
Adjusted Operating
Margin
|
16.4 %
|
|
15.8 %
|
|
15.6 %
|
|
15.4 %
|
|
15.6 %
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings
per share
|
$
1.22
|
|
$
1.03
|
|
$
3.40
|
|
$
2.96
|
|
|
Effect of above
adjustments to income from operations, pre-tax
|
—
|
|
0.04
|
|
—
|
|
0.04
|
|
—
|
Non-operating foreign
currency exchange (gains) losses, pre-tax(b)
|
(0.01)
|
|
0.01
|
|
—
|
|
0.03
|
|
(b)
|
Tax effect of above
adjustments(c)
|
0.03
|
|
(0.02)
|
|
0.07
|
|
(0.01)
|
|
(b)
|
Effect of recognition
of income tax benefit related to an uncertain tax
position(d)
|
(0.07)
|
|
—
|
|
(0.07)
|
|
—
|
|
(0.07)
|
Adjusted Diluted
Earnings Per Share
|
$
1.17
|
|
$
1.06
|
|
$
3.40
|
|
$
3.02
|
|
$4.43
- $4.46
|
Notes:
|
(a)
|
In the third quarter of
2021, the parties to the consolidated putative securities class
action suit filed a settlement agreement that resolved the
consolidated putative securities class action against us and
certain of our former officers. The settlement agreement provided
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 third quarter 2021 unaudited consolidated
financial statements.
|
(b)
|
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.
|
(c)
|
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:
|
(in
millions)
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Non-GAAP income tax
benefit (expense) related to:
|
|
|
|
|
|
|
|
Class Action
Settlement Loss
|
—
|
|
6
|
|
—
|
|
6
|
Foreign currency
exchange gains and losses
|
(15)
|
|
3
|
|
(35)
|
|
(3)
|
The effective tax rate related to non-operating foreign currency
exchange gains and losses varies depending on the jurisdictions in
which such income and expenses are generated and the statutory
rates applicable in those jurisdictions. As such, the income tax
effect of non-operating foreign currency exchange gains and losses
shown in the above table may not appear proportionate to the net
pre-tax foreign currency exchange gains and losses reported in our
unaudited consolidated statements of operations.
(d)
|
During the three months
ended September 30, 2022, we recognized an income tax benefit of
$36 million related to a specific uncertain tax position that was
previously unrecognized in our prior year consolidated financial
statements. The recognition of the benefit in the third quarter of
2022 was based on management's reassessment regarding whether this
unrecognized tax benefit met the more-likely-than-not threshold in
light of the lapse in the statute of limitations as to a portion of
such benefit.
|
Reconciliations of
net cash
|
|
(in
millions)
|
|
September 30,
2022
|
|
December 31,
2021
|
Cash and cash
equivalents
|
|
$
2,042
|
|
$
1,792
|
Short-term
investments
|
|
689
|
|
927
|
Less:
|
|
|
|
|
Short-term
debt
|
|
—
|
|
38
|
Long-term
debt
|
|
636
|
|
626
|
Net cash
|
|
$
2,095
|
|
$
2,055
|
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, 2022
|
|
|
|
|
|
Year over
Year
|
|
$
|
|
% of
total
|
|
%
Change
|
|
Constant
Currency
% Change (a)
|
Revenues by
Segment:
|
|
|
|
|
|
|
|
Financial Services
(b)
|
$
1,521
|
|
31.3 %
|
|
(1.5) %
|
|
1.6 %
|
Health
Sciences
|
1,405
|
|
28.9 %
|
|
3.8 %
|
|
5.5 %
|
Products and
Resources
|
1,148
|
|
23.7 %
|
|
3.7 %
|
|
8.2 %
|
Communications, Media
and Technology
|
783
|
|
16.1 %
|
|
6.0 %
|
|
10.4 %
|
Total
Revenues
|
$
4,857
|
|
|
|
2.4 %
|
|
5.6 %
|
Revenues by
Geography:
|
|
|
|
|
|
|
|
North
America
|
$
3,621
|
|
74.6 %
|
|
3.9 %
|
|
4.0 %
|
United
Kingdom
|
446
|
|
9.2 %
|
|
3.7 %
|
|
18.7 %
|
Continental Europe
(b)
|
438
|
|
9.0 %
|
|
(9.5) %
|
|
2.9 %
|
Europe - Total
(b)
|
884
|
|
18.2 %
|
|
(3.3) %
|
|
10.3 %
|
Rest of
World
|
352
|
|
7.2 %
|
|
2.3 %
|
|
9.3 %
|
Total
Revenues
|
$
4,857
|
|
|
|
2.4 %
|
|
5.6 %
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2022
|
|
|
|
|
|
Year over
Year
|
|
$
|
|
% of
total
|
|
%
Change
|
|
Constant
Currency
% Change (a)
|
Revenues by
Segment:
|
|
|
|
|
|
|
|
Financial Services
(b)
|
$
4,591
|
|
31.5 %
|
|
1.9 %
|
|
4.2 %
|
Health
Sciences
|
4,205
|
|
28.8 %
|
|
6.0 %
|
|
7.3 %
|
Products and
Resources
|
3,418
|
|
23.4 %
|
|
8.2 %
|
|
11.4 %
|
Communications, Media
and Technology
|
2,375
|
|
16.3 %
|
|
13.1 %
|
|
16.4 %
|
Total
Revenues
|
$
14,589
|
|
|
|
6.3 %
|
|
8.6 %
|
Revenues by
Geography:
|
|
|
|
|
|
|
|
North
America
|
$
10,846
|
|
74.3 %
|
|
7.0 %
|
|
7.1 %
|
United
Kingdom
|
1,357
|
|
9.3 %
|
|
12.8 %
|
|
23.1 %
|
Continental Europe
(b)
|
1,342
|
|
9.2 %
|
|
(5.6) %
|
|
4.0 %
|
Europe - Total
(b)
|
2,699
|
|
18.5 %
|
|
2.8 %
|
|
12.7 %
|
Rest of
World
|
1,044
|
|
7.2 %
|
|
8.3 %
|
|
13.8 %
|
Total
Revenues
|
$
14,589
|
|
|
|
6.3 %
|
|
8.6 %
|
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.
|
(b)
|
The sale of the Samlink
subsidiary, which was completed on February 1, 2022, negatively
impacted revenue growth for the three months ended September 30,
2022 in Financial Services, Continental Europe and Europe-Total by
180 basis points, 580 basis points and 310 basis points,
respectively. For the nine months ended September 30, 2022, revenue
growth was negatively impacted in Financial Services, Continental
Europe and Europe-Total by 170 basis points, 530 basis points and
290 basis points, respectively.
|
COGNIZANT TECHNOLOGY
SOLUTIONS CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
(in
millions)
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
|
$
629
|
|
$
544
|
|
$
1,769
|
|
$
1,561
|
Adjustments for
non-cash income and expenses
|
175
|
|
237
|
|
584
|
|
769
|
Changes in assets and
liabilities
|
228
|
|
167
|
|
(487)
|
|
(660)
|
Net cash provided by
operating activities
|
1,032
|
|
948
|
|
1,866
|
|
1,670
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
(79)
|
|
(51)
|
|
(242)
|
|
(214)
|
Net (purchases)
maturities of investments
|
(187)
|
|
(299)
|
|
186
|
|
(737)
|
Proceeds from sales of
businesses
|
9
|
|
—
|
|
28
|
|
—
|
Payments for business
combinations, net of cash acquired
|
—
|
|
(57)
|
|
—
|
|
(715)
|
Net cash (used in)
investing activities
|
(257)
|
|
(407)
|
|
(28)
|
|
(1,666)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Repurchases of common
stock
|
(315)
|
|
(129)
|
|
(1,107)
|
|
(689)
|
Repayment of term loan
borrowings and finance lease and earnout obligations
|
(21)
|
|
(12)
|
|
(47)
|
|
(40)
|
Dividends
paid
|
(141)
|
|
(127)
|
|
(425)
|
|
(382)
|
Issuance of common
stock under stock-based compensation plans
|
19
|
|
29
|
|
71
|
|
104
|
Net cash (used in)
financing activities
|
(458)
|
|
(239)
|
|
(1,508)
|
|
(1,007)
|
Effect of exchange rate
changes on cash and cash equivalents
|
(43)
|
|
(6)
|
|
(80)
|
|
(13)
|
Increase (decrease) in
cash and cash equivalents
|
274
|
|
296
|
|
250
|
|
(1,016)
|
Cash and cash
equivalents, beginning of period
|
1,768
|
|
1,368
|
|
1,792
|
|
2,680
|
Cash and cash
equivalents, end of period
|
$
2,042
|
|
$
1,664
|
|
$
2,042
|
|
$
1,664
|
SUPPLEMENTAL CASH
FLOW INFORMATION
|
|
(in
millions)
|
|
Three Months
Ended
|
Stock Repurchases
under Board of Directors' authorized stock repurchase
program:
|
|
September 30,
2022
|
|
September 30,
2021
|
Number of shares
repurchased
|
|
4.6
|
|
1.3
|
|
|
|
|
|
Remaining authorized
balance as of September 30, 2022
|
|
$
1,075
|
|
|
Reconciliation of
Free Cash Flow Non-GAAP Financial Measure
|
|
(in
millions)
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net cash provided by
operating activities
|
$
1,032
|
|
$
948
|
|
$ 1,866
|
|
$ 1,670
|
Purchases of property
and equipment
|
(79)
|
|
(51)
|
|
(242)
|
|
(214)
|
Free cash
flow
|
$
953
|
|
$
897
|
|
$ 1,624
|
|
$ 1,456
|
1 Constant currency ("CC") revenue growth, Adjusted
Operating Margin, Adjusted Diluted Earnings Per Share ("Adjusted
Diluted EPS") and free cash flow 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.
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 reconciliation
at the end of this release.
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SOURCE Cognizant Technology Solutions