Cognizant Technology Solutions Corporation · NASDAQ:CTSH
Cognizant Technology Solutions — Q2 2019 Earnings Presentation
19 slides from Cognizant Technology Solutions's earnings presentation, Jul 31, 2019
Slide 1: Second Quarter 2019 Financial Results and Highlights
Exhibit 99.2 COND QUARTER 2019 Financial Results and Highlights wuly 31,2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements This earnings supplement includes statements which 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 assu
Slide 3: Second Quarter Headlines
Second Quarter Headlines REVENUE $4.14B, up 3.4% (4.7% CC!) Y/Y + GAAP Operating Margin of 14.9%, down 18Obps Y/Y OPERATING MARGIN ; : oe + Adjusted Operating Margin! of 16.1%, down 310bps Y/Y NETINCOME — - $509M,up 11.6% Y/Y DILUTED EARNINGS ° GAAPdiluted EPS of $0.90, up 15.4% Y/Y PER SHARE _ .- A
Slide 4: $2.00 $1.80 $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $-
$2.00 $1.80 $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $-
Slide 5: Revenue Performance
Revenue Performance Segments Revenue by Geography $ IN MILLIONS $ IN MILLIONS COMMUNICATIONS, : REST OF WORLD MEDIA & TECHNOLOGY | 16% YN 412.2% Y/Y | +6.4% Y/V CC 141% YVCC H H EUROPE FINANCIAL 48.6% Y/V SERVICES H 142% Y/Y CC 40.3% Y/Y | +H7% YIYCC H PRODUCTS | & RESOURCES | 10.4% Y/Y S$ 412.3% Y/
Slide 6: GAAP & Adjusted Operating Margin
GAAP & Adjusted Operating Margin 18.3% 9 9 17.7% 16.5% 17.2% 17.2% 16.7% 16.8%) 14.9%) 13.1% QUi7 Q217 Q3'17 Q417 Qris Q2'8 Q318 Q48 Qnig Q2'19 m GAAP OPERATING MARGIN ADJUSTED OPERATING MARGIN § Cognizant
Slide 7: Financial Services
Financial Services Revenue Revenue by Geography $ IN MILLIONS “ $ IN MILLIONS REST OF WORLD (6.7%) YY (2.6%) Y/Y CC $1,461 $1469 $1464 $1,427 $1,427 $1,406 $1,376 | | L QV17, Q217, Q317 Q417 QI18 Q218 Q318 Q418 QII9 Q2'19 Revenue Growth Rates EUROPE 12.2% YN +17.4% Y/Y CC NORTH AMERICA (2.0%) Y/Y (2
Slide 8: Healthcare
Healthcare Revenue $ IN MILLIONS $1,189 $1,202 $1,156 $1,165 $1,125 $1,121 $1,134 $1,085 $1,050 $1,003 [] | QU17 Q27 Q317 Q417 QI18 Q218 Q318 Q418 QI19 Q219 Revenue Growth Rates Y/Y 9.7% 9.5% 93% 1.9% 1.8% 10.1% 9.6% 6.8% 3.9% (1.9%) yyycc 10.0% 9.9% 91% 1.6% 1A% 9.8% 9.7% 7.0% 4.6% (1.5%) Revenue b
Slide 9: Products & Resources
Products & Resources Revenue Revenue by Geography $ IN MILLIONS “ $ IN MILLIONS REST OF WORLD 48.8% Y/Y 416.3% Y/¥CC geo $914 $927 a21 $840 $863 TT T 1 l I L L | QI17) Q2'17 Q3'17 Q417 QI18 Q218 Q318 Q418 QI19 Q219 EUROPE a +45% V/V +LI% Y/Y CC Revenue Growth Rat« evenue GrowthiRates NORTH AMERICA +
Slide 10: Communications, Media & Technology
Communications, Media & Technology Revenue $ IN MILLIONS $562 sago $494 $509 i i l \ L [ | $585 $595 $607 QI17 = Q2'17 Q3'17 Q4'17 QI18 Q2'18 Q3'18 Revenue Growth Rates Y/Y 16.5% 16.8% 18.2% 19.0% 184% 15.8% 17.1% yycc 18.5% 184% 17.7% 17.2% 15.1% 145% 18.1% Q418 QI19 Q2'19 18.4% 20.1% 16.9% 19.6% 1
Slide 11: Employee Metrics
Employee Metrics Headcount and Attrition NUMBER OF EMPLOYEES IN THOUSANDS 24% 23% 22% 20% a Qi Q2"17 Q3"'17 Q4'17 Qi Q2'18 Q3 18 Q418 Qing Q2"19 MR HEADCOUNT )=@== QUARTERLY ANNUALIZED ATTRITION, Utilization 1% 93% 93% 92% 92% 93% 93% 92% 1% 92% 82% 83% 83% 83% 83% 83% 83% 83% 79% 80% Q1i7 Q2'17 Q31
Slide 12: Cash Flow, Balance Sheet & Capital Allocation
Cash Flow, Balance Sheet & Capital Allocation $ IN MILLIONS $18 $116 $116 $116 % $633 $267 ug $7 $89 $90 $332 on $116 $632 [so mall $144 |_$45_] $197 Qli7 Q2'17 Q3'17 Q417 Qris Q2'18 Q3'18 Q418 Qig Q219 MACQUISITIONS SHARE REPURCHASES = DIVIDENDS PAID ($ IN MILLIONS) Qi'7 Q2'17 Q3'17 Q4'17 Qi Q218 Q
Slide 13: Revenue & Operating Metrics
Revenue & Operating Metrics REVENUE BY... Qr18 Q218 Q3'18 (Q418 Qri9 Q219 SERVICE LINE OUTSOURCING 42.0% 42.9% 42.3% 418% 414% AlI% CONSULTING & TECH SERVICES 58.0% 57.1% 57.7% 58.2% 58.6% 58.9% CONTRACT TYPE FIXEDBID 38.9% 36.2% 36.4% 36.6% 35.7% 35.7% TIME & MATERIAL 52.6% 52.9% 52.6% 52.0% 52.4%
Slide 14: Guidance
Guidance 3Q 19: 3.8-4.8% Y/Y CC? FY19: 3.9-4.9% Y/Y CC REVENUE FY19 ADJUSTED OPERATING MARGIN® + Approximately 17% FY19 TAX RATE 24-26% FY19 SHARE COUNT * Approximately 562 million FY 19 ADJUSTED DILUTED EPS® $3.92-§3.98 ' Guidance is as of July 31, 2019 2 3Q'19 revenue guidance based on current exc
Slide 15: Appendix: About Non-GAAP Financial Measures
| Cognizant APPENDIX: About Non-GAAP Financial Measures
Slide 16: 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 17: Reconciliations of Non-GAAP Financial Measures (Unaudited)
Reconciliations of Non-GAAP Financial Measures (Unaudited) (in millions, except per share amounts) ‘Three Months Ended Mar3i,Jun30, Sep30,Dec3i, _Mar31,Jun30, Sep30, Dec31, Mar3i,__Jun30, Guidance 2017-2017 «201720172018 20820182018. 20192019 32019 (942019 Full Year2019 GAAP income from operations $
Slide 18: Reconciliations of Non-GAAP Financial Measures (Unaudited)
Reconciliations of Non-GAAP Financial Measures (Unaudited) Notes: (a) Realignment charges include costs associated with our CEO transition and the departure of our president, employee separation costs, professional fees related to the development of our realignment program and non-routine shareholde
Slide 19: Reconciliations of Non-GAAP Financial Measures (Unaudited)
Reconciliations of Non-GAAP Financial Measures (Unaudited) (e) Presented below are the tax impacts of each of our non-GAAP adjustments to pre-tax income: Three Months Ended Mar31, Jun30, Sep30, Dec31, Mar31, Jun30, Sep30, Dec31, Mar31, Jun30, 2017, 2017, «2017 2017, 2018 «2018S 2018 2018 2019 _2019
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