Cognizant Technology Solutions Corporation (NASDAQ: CTSH), a leading provider of information technology, consulting, and business process outsourcing services, today announced its third quarter 2009 financial results.

Highlights – Third Quarter 2009

• Quarterly revenue rose to $853.5 million, up 16% from the year-ago quarter and 10% sequentially.
• Quarterly diluted EPS on a GAAP basis was $0.45, compared to $0.38 in the year-ago quarter.
• Quarterly diluted EPS on a non-GAAP basis, which excludes stock-based compensation expense and income related to the repeal of the stock-based Indian fringe benefit tax, was $0.48, compared to $0.40 in the year-ago quarter.
• GAAP and non-GAAP diluted EPS includes the impact of $0.01 in net non-operating foreign currency exchange losses.

Revenue for the third quarter of 2009 rose to $853.5 million, up 16% from $734.7 million in the third quarter of 2008. GAAP net income was $136.6 million or $0.45 per diluted share compared to $112.8 million, or $0.38 per diluted share, in the third quarter of 2008. Diluted earnings per share on a non-GAAP basis was $0.48. GAAP operating margin for the quarter was 19%. Excluding stock-based compensation expense of $11.9 million and income of $1.3 million related to the repeal of the stock-based Indian fringe benefit tax, non-GAAP operating margin was 20.2%, above the Company’s targeted 19-20% range. Earnings for the quarter included $2.9 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.

“We experienced strong organic growth across all industry sectors, geographies and service lines this quarter.  The sequential revenue increase of $76.9 million is the largest in the history of the company,” said Francisco D’Souza, President and CEO of Cognizant. “Our constant focus on customer service and reinvesting in our business continues to generate industry-leading results. Clients, who have come to rely on us to help them achieve operational efficiencies, are now increasingly approaching us to serve as a consultative business partner, as their industries face comprehensive upheavals from the recession, and secular shifts resulting from new technologies and other market forces.”

Fourth Quarter & Full Year 2009 Outlook

The Company is providing the following guidance:

 Fourth quarter 2009 revenue anticipated to be at least $880 million.
 Fourth quarter 2009 diluted EPS expected to be $0.45 on a GAAP basis and $0.49 on a non-GAAP basis, which excludes $0.04 of estimated stock-based compensation expense.
 Fiscal 2009 revenue expected to be at least $3.255 billion, up at least 15.5% compared to 2008.
 Fiscal 2009 diluted EPS expected to be $1.75 on a GAAP basis, and $1.88 on a non-GAAP basis, which excludes $0.13 of estimated stock-based compensation and stock-based Indian fringe benefit tax expense.
 Due to continued volatility in the currency markets, EPS guidance excludes any future non-operating foreign currency exchange gain or loss.

“We are delighted that, despite the ongoing weak global economic environment, we delivered strong, broad-based revenue growth during the quarter.  Our long-held strategy of investing in differentiated domain, relationship and service offering capabilities is enabling us to win marquee clients as well as grow our existing relationships,” said Gordon Coburn, Chief Financial and Operating Officer. “During the quarter we remained, as always, focused on operational discipline—enabling us to quickly ramp up to meet the surge in demand, while maintaining healthy operating margins and high quality of service.  In addition, we continued to strengthen our balance sheet with our cash, short- and long-term investments increasing by over $195 million during the quarter to a total of approximately $1.34 billion.”

Conference Call
Cognizant will host a conference call November 3 at 8:00 a.m. (Eastern) to discuss the Company’s quarterly results. To listen to the conference call, please dial (800) 374-0467 (domestically) and (706) 679-3288 (internationally) and provide the following conference ID number: 34496779.

The conference call will also be available live via the Internet by accessing the Cognizant web site at 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 (706) 645-9291 for international callers and entering 34496779 from a half hour after the end of the call until 11:59 p.m. (Eastern) on Wednesday, November 11, 2009. The replay will also be available at Cognizant’s web site for 30 days following the call.