Cognizant Technology Solutions Corporation · NASDAQ:CTSH
Cognizant Technology Solutions — Q2 2021 Earnings Presentation
18 slides from Cognizant Technology Solutions's earnings presentation, Jul 28, 2021
Slide 1: Second Quarter 2021 Financial Results and Highlights
Exhibit 99.3 Second Quarter 2021 Financial Results and Highlights July 28, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements This earnings supplement 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 assum
Slide 3: Results Summary: Q2 2021
Results Summary: Q2 2021 REVENUE OPERATING MARGIN 1 Up 14.6% Y/Y as reported and 12.0% Y/Y constant currency Growth reflects continued demand for our digital services, recent acquisitions and the negative impact on 2020 revenues from the pandemic and April 2020 ransomware attack 15.2% 15.2% $4,585M
Slide 4: Revenue, EPS and Operating Margin
Revenue, EPS and Operating Margin $ In Millions Except Per Share Amounts $4,585 $4,401 $4,248 $4,284 $4,243 $4,225 $4,184 $4,110 $4,141 $4,000 $1.08 $1.07 $0.99 $0.91 $0.94 $0.96 $0.97 $0.97 $0.82 $0.67 1 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Revenue Adjuste
Slide 5: Revenue Performance: Q2 2021
Revenue Performance: Q2 2021 Segments Geography $ IN MILLIONS $ IN MILLIONS REST OF WORLD COMMUNICATIONS, +25.7% Y/Y MEDIA & TECHNOLOGY +19.1% Y/Y CC +21.2% Y/Y FINANCIAL SERVICES +17.9% Y/Y CC +7.6% Y/Y EUROPE +4.8% Y/Y CC $328 $703 +20.7% Y/Y +10.2% Y/Y CC $1,502 $885 PRODUCTS & RESOURCES +21.7% Y
Slide 6: Financial Services
Financial Services Revenue Q2 2021 Geography $ IN MILLIONS $ IN MILLIONS REST OF WORLD $1,492 $1,502 $1,473 $1,468 $1,469 +8.7% Y/Y $1,451 $1,458 $1,436 +2.6% Y/Y CC $1,396 $1,305 EUROPE $137 +8.2% Y/Y (0.5%) Y/Y CC $316 1 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 $1,049
Slide 7: Healthcare
Healthcare Revenue Q2 2021 Geography $ IN MILLIONS $ IN MILLIONS $1,325 $1,288 REST OF WORLD $1,270 $1,221 $1,231 EUROPE $29 +45.0% Y/Y $1,194 +41.8% Y/Y CC $1,165 $1,175 $1,157 +19.6% Y/Y $1,134 +11.3% Y/Y CC $165 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 $1,131 Revenue
Slide 8: Products & Resources
Products & Resources Revenue Q2 2021 Geography $ IN MILLIONS $ IN MILLIONS $1,055 REST OF WORLD $998 31.3% Y/Y $966 $963 $954 $948 23.4% Y/Y CC $914 $927 $927 $867 $84 EUROPE 35.5% Y/Y $248 21.5% Y/Y CC Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 $723 Revenue Growth Q1 '19
Slide 9: Communications, Media & Technology
Communications, Media & Technology Revenue Q2 2021 Geography $ IN MILLIONS $ IN MILLIONS $703 REST OF WORLD +52.9% Y/Y $661 $657 +45.5% Y/Y CC $632 $626 $607 $615 $616 $595 $580 $78 EUROPE +30.0% Y/Y +17.7% Y/Y CC $156 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 $469 Revenu
Slide 10: Employee Metrics
Employee Metrics Headcount and Annualized Attrition NUMBER OF EMPLOYEES IN THOUSANDS 31% 23% 24% 22% 24% 19% 21% 19% 21% 18% 29% 19% 18% 18% 16% 16% 16% 13% 11% 10% 285.8 288.2 289.9 292.5 291.7 281.2 283.1 289.5 296.5 301.2 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2
Slide 11: Cash Flow, Balance Sheet & Capital Allocation
Cash Flow, Balance Sheet & Capital Allocation Annual Quarterly Share Repurchases Acquisitions Dividends $ IN MILLIONS $248 $1,596 $74 $1,621 $2,247 $320 $788 $240 $580 $348 $1,123 $1,292 $403 $54 $310 $617 $453 $480 $493 $121 $120 $118 $128 $127 FY2019 FY2020 Trailing 12-Months Q2 2020 Q3 2020 Q4 20
Slide 12: FY2021 Guidance
1 FY2021 Guidance FY2020 FY2021 Guidance Assumptions $18.4 - $18.5B Revenue $16.7B 10.2-11.2% Y/Y or 9.0-10.0% Y/Y CC 2 Assumes modest sequential increase in Q3 Adjusted Operating Margin 14.4% ~15.4% and modest sequential decline in Q4 Reflects lower interest income Y/Y as a Interest Income (in mill
Slide 13: APPENDIX: About Non-GAAP Financial Measures
APPENDIX: About Non-GAAP Financial Measures
Slide 14: About Non-GAAP Financial Measures
About Non-GAAP Financial Measures To supplement our financial results presented in accordance with GAAP, this earnings supplement includes references to the following measures defined by the Securities and Exchange Commission as non-GAAP financial measures: Adjusted Income From Operations, Adjusted
Slide 15: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures (in millions, except per share amounts) Three Months Ended: Full Year Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Dec 31, Guidance Full 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2020 Year 2021 GAAP income from
Slide 16: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures Notes: (a) During 2019 and 2020, we incurred realignment charges that consisted of employee separation costs, employee retention costs and professional fees. The total costs related to the realignment are reported in "Restructuring charges" in our conso
Slide 17: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures (f) Presented below are the tax impacts of each of our non-GAAP adjustments to pre-tax income: 2019 2020 2021 FY Adjusted Effective Tax Rate Reconciliation Guidance Three months ended: Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 Mar 31 Jun 3
Slide 18: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures Reconciliation of free cash flow Three Months Ended Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, (in millions) 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 Net cash provided by operating activities $ 269 $ 575 $ 7
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