Cognizant Reports First Quarter 2018 Results

Cognizant Technology Solutions Corporation announced its first quarter 2018 financial results.

Highlights - First Quarter 2018

• Quarterly revenue rose to $3.91 billion, up 10.3% from the year-ago quarter.
• Quarterly GAAP diluted EPS was $0.88, compared to $0.92 in the year-ago quarter.
• Quarterly non-GAAP diluted EPS² was $1.06, compared to $0.84 in the year-ago quarter.

Revenue for the first quarter of 2018 rose to $3.91 billion, up 10.3% from $3.55 billion in the first quarter of 2017. GAAP net income was $520 million, or $0.88 per diluted share, compared to $557 million, or $0.92 per diluted share, in the first quarter of 2017.

Non-GAAP diluted EPS was $1.06, compared to $0.84 in the first quarter of 2017. GAAP operating margin was 17.7% and non-GAAP operating margin² was 20.3% for the first quarter of 2018.

“We achieved solid financial results in the first quarter and progressed our shift to digital services and solutions,” said Francisco D'Souza, Chief Executive Officer. “Cognizant has built the capabilities and scale to help clients digitize their offerings, create personalized customer experiences, instrument their operations, and modernize their IT infrastructure. This digital-at-scale value proposition is winning with clients and positioning us well to deliver a strong 2018."

Second Quarter & Full Year 2018 Outlook

The Company is providing the following guidance:

• Second quarter2018 revenue expected to be in the range of $4.00 billion to $4.04 billion.
• Second quarter2018 non-GAAP diluted EPS³ expected to be at least $1.09.
• Full-year 2018 revenue expected to be in the range of $16.05 billion to $16.30 billion.
• Full-year 2018 non-GAAP diluted EPS expected to be at least $4.47.

“First quarter results demonstrate solid execution of our plan to drive sustainable revenue growth while increasing margins," said Karen McLoughlin, Chief Financial Officer. "Our full year 2018 non-GAAP diluted EPS guidance reflects a higher than originally anticipated effective income tax rate due to the updated interpretation of the U.S. Tax Cuts and Jobs Act of 2017. Our strong balance sheet and cash flows continue to support both our capital return program and our investments in the business to drive future growth and continue our shift to digital service and solutions.”

Return of Capital Program

The Company has declared a quarterly cash dividend of $0.20 per share on Cognizant Class A common stock for shareholders of record at the close of business on May 22, 2018. This dividend will be payable on May 31, 2018.

As previously announced, on March 13, 2018, we entered into an accelerated share repurchase agreement to repurchase an aggregate of $300 million of Cognizant’s Class A common stock. We are on track to complete our plan, announced in February 2017, to return $3.4 billion to our shareholders by the end of 2018.