Cognizant Technology Solutions Corporation · NASDAQ:CTSH
Cognizant Technology Solutions — Q4 2021 Earnings Presentation
22 slides from Cognizant Technology Solutions's earnings presentation, Feb 2, 2022
Slide 1: Fourth Quarter 2021 Financial Results and Highlights
Exhibit 99.3 Fourth Quarter 2021 Financial Results and Highlights February 2, 2022
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: Q4 2021
Results Summary: Q4 2021 REVENUE OPERATING MARGIN 1 Up 14.2% Y/Y as reported, or 14.5% Y/Y in constant currency Q4 '20 includes -300bps of Samlink Impact 2 Year-over-year growth includes +280bps of Q4 '20 Samlink Impact 15.3% 15.3% $4,777M $4,184M 12.3% 11.1% Q4 '20 Q4 '21 Q4 '20 Q4 '21 1 Q4 '20 Q4
Slide 4: Results Summary: FY2021
Results Summary: FY2021 REVENUE OPERATING MARGIN Up 11.1% Y/Y as reported, or up 10.0% Y/Y constant currency 2020 includes -80bps of Samlink Impact Year-over-year growth includes +70bps of 2020 Samlink Impact 15.3% 15.4% $18,507M 14.4% 12.7% $16,652M 2020 2021 2020 2021 2020 2021 GAAP Operating Marg
Slide 5: Revenue, EPS and Operating Margin
Revenue, EPS and Operating Margin $ In Millions Except Per Share Amounts $4,744 $4,777 $4,585 $4,401 $4,248 $4,284 $4,225 $4,243 $4,141 $4,184 $4,110 $4,000 $1.08 $1.07 $1.06 $1.10 $0.91 $0.94 $0.96 $0.97 $0.97 $0.99 $0.82 $0.67 1 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21
Slide 6: Revenue Performance: Q4 2021
Revenue Performance: Q4 2021 Segments Geography $ IN MILLIONS $ IN MILLIONS REST OF WORLD COMMUNICATIONS, +24.0% Y/Y MEDIA & TECHNOLOGY +25.7% Y/Y CC +12.6% Y/Y 1 +13.1% Y/Y CC 1 EUROPE FINANCIAL SERVICES $346 $744 +33.9% Y/Y +18.5% Y/Y +35.5% Y/Y CC +18.8% Y/Y CC $1,547 $936 PRODUCTS & RESOURCES +1
Slide 7: Revenue Performance: FY 2021
Revenue Performance: FY 2021 Segments Geography $ IN MILLIONS $ IN MILLIONS REST OF WORLD COMMUNICATIONS, +21.0% Y/Y MEDIA & TECHNOLOGY +18.8% Y/Y CC +14.5% Y/Y 1 +13.2% Y/Y CC 1 EUROPE $1,310 FINANCIAL SERVICES $2,843 +19.2% Y/Y +7.6% Y/Y +14.2% Y/Y CC +6.3% Y/Y CC $6,051 $3,561 PRODUCTS & RESOURCE
Slide 8: Financial Services
Financial Services Revenue Q4 2021 Geography $ IN MILLIONS $ IN MILLIONS $1,544 $1,547 REST OF WORLD $1,492 $1,502 $1,473 $1,468 $1,469 +13.8% Y/Y $1,451 $1,458 $1,436 +15.1% Y/Y CC $1,396 1 $1,305 EUROPE $148 +79.5% Y/Y +81.5% Y/Y CC $332 1 1 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20
Slide 9: Healthcare
Healthcare Revenue Q4 2021 Geography $ IN MILLIONS $ IN MILLIONS $1,354 $1,370 $1,325 REST OF WORLD $1,270 $1,288 +50.0% Y/Y $1,221 $1,231 $33 +53.9% Y/Y CC $1,175 $1,194 $1,165 $1,157 EUROPE $1,134 +1.3% Y/Y +3.6% Y/Y CC $160 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3
Slide 10: Products & Resources
Products & Resources Revenue Q4 2021 Geography $ IN MILLIONS $ IN MILLIONS $1,107 $1,116 REST OF WORLD $1,055 28.4% Y/Y $998 29.1% Y/Y CC $966 $963 $954 $948 $914 $927 $927 $867 $86 EUROPE 37.4% Y/Y 38.4% Y/Y CC $283 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21
Slide 11: Communications, Media & Technology
Communications, Media & Technology Revenue Q4 2021 Geography $ IN MILLIONS $ IN MILLIONS $739 $744 $703 REST OF WORLD +31.7% Y/Y $661 $657 +34.6% Y/Y CC $632 $626 $607 $615 $616 $595 $580 $79 EUROPE +7.3% Y/Y +8.4% Y/Y CC $161 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3
Slide 12: Bookings
Bookings Trailing Twelve Month Bookings ($ in billions) Q4 2021 quarterly bookings $23.1 growth of 22% Y/Y $21.7 $20.0 $20.5 FY2021 book-to-bill ratio of 1.2x $19.8 12/31/2020 3/31/2021 6/30/2021 9/30/2021 * 12/31/2021 * *In Q4 ‘21, we modified our definition of bookings to exclude overlap related t
Slide 13: Employee Metrics
Employee Metrics Headcount and Annualized Attrition NUMBER OF EMPLOYEES IN THOUSANDS 37% 35% 31% 23% 24% 21% 22% 24% 21% 19% 18% 19% 33% 31% 29% 16% 19% 18% 16% 16% 18% 13% 11% 10% 285.8 288.2 289.9 292.5 291.7 281.2 283.1 289.5 296.5 301.2 318.4 330.6 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '2
Slide 14: Cash Flow, Balance Sheet & Capital Allocation
Cash Flow, Balance Sheet & Capital Allocation Annual Quarterly Share Repurchases Acquisitions Dividends $ IN MILLIONS $1,621 $2,247 $320 $771 $788 $240 $82 $1,123 $970 $310 $348 $617 $129 $255 $54 $57 $453 $480 $509 $118 $128 $127 $127 $127 FY2019 FY2020 FY 2021 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1
Slide 15: FY2022 Guidance
1 FY2022 Guidance FY2021 FY2022 Guidance Assumptions $20.0 to $20.5B • Includes ~200bps of inorganic Revenue $18.5B contribution, including 100bps from 7.8%-10.8% Y/Y or 8.5%-11.5% Y/Y CC future acquisitions • 20-30bps of expansion vs. FY2021 2 • Q1 expected to decline modestly Q/Q Adjusted Operatin
Slide 16: APPENDIX: About Non-GAAP Financial Measures and Performance Metrics
APPENDIX: About Non-GAAP Financial Measures and Performance Metrics
Slide 17: About Non-GAAP Financial Measures and Performance Metrics
About Non-GAAP Financial Measures and Performance Metrics 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 Fr
Slide 18: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures (in millions, except per share amounts) Three Months Ended: Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 GAAP income from operations $ 539 $ 6
Slide 19: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures (in millions, except per share amounts) Dec 31, Dec 31, Guidance Full Year Ended: 2020 2021 Year 2022 GAAP income from operations $ 2,114 $ 2,826 (a) Class Action Settlement Loss — 20 (b) Realignment charges 42 — (c) 2020 Fit for Growth Plan restructuri
Slide 20: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures Notes: (a) During 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 agre
Slide 21: Reconciliations of Non-GAAP Financial Measures
Reconciliations of Non-GAAP Financial Measures (g) 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 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec 20 21 31 30 30 31 31
Slide 22: 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, Sep 30, Dec 31, (in millions) 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 Net cash provided by operating
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