Document

Employee Metrics:

December 31, 2019

December 31, 2018

Number of employees

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 2, 2020

Cognizant Technology Solutions Corporation

(Exact Name of Registrant as Specified in Charter)




Delaware	0-24429	13-3728359
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Glenpointe Centre West
500 Frank W. Burr Blvd.
Teaneck,	New Jersey	07666
(Address of Principal Executive Offices)		(Zip Code)

(201) 801-0233

(Registrant’s telephone number, including area code)

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).



☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).



☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).



☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 par value per share	CTSH	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).



Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02.	Results of Operations and Financial Condition.

On February 5, 2020, Cognizant Technology Solutions Corporation (the “Company”), issued a press release to report the Company’s financial results for the quarter and year ended December 31, 2019. The full text of the press release is attached to this current report on Form 8-K as Exhibit 99.1.*


Item 5.02.	Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On February 2, 2020, Francisco D’Souza informed the Board of Directors (the “Board”) of the Company that he will leave the Board effective March 31, 2020.

On February 3, 2020, the Board appointed Vinita Bali to the Board to fill a current vacancy effective February 24, 2020. Ms. Bali will serve until the 2020 annual meeting of stockholders of the Company. The Board determined that Ms. Bali qualifies as an “independent director” under the rules of The Nasdaq Stock Market, LLC. Ms. Bali was selected as a director based on her extensive experience leading large multinational corporations in senior business and marketing roles and as a public company director, as summarized below.

Ms. Bali, 64, was most recently Managing Director and Chief Executive Officer of Britannia Industries, an India-based food company, from 2005 to 2014. Prior to Britannia, she spent most of her career serving in leadership roles across the world for The Coca-Cola Company and Cadbury Schweppes Plc. She spent nearly a decade with Coca-Cola in several roles including Vice President and Head, Corporate Strategy, based in the United States, as President, Andean Division, based in Chile, and as Worldwide Marketing Director, based in the United States. Prior to that, she spent 14 years with Cadbury serving in senior marketing roles across a number of geographies, including South Africa, Nigeria, India and the U.K. Ms. Bali currently serves on the board of directors of two public companies listed on the New York Stock Exchange (NYSE): Bunge Ltd. (NYSE: BG), an agribusiness and food company, since 2018, where she is a member of the Compensation Committee, the Sustainability and Corporate Responsibility Committee and the Audit Committee; and Smith & Nephew Plc (NYSE: SNN), a global portfolio medical technology business, since 2014, where she is a member of the Remuneration Committee and the Compliance & Culture Committee. She also currently serves on the boards of directors for two companies listed on the National and Bombay stock exchanges in India: Syngene International Ltd., a research and manufacturing company, since 2017; and CRISIL Ltd., a global analytical company providing ratings, research and risk and policy advisory services, since 2014. She previously served on the board of directors of several other companies listed on the NYSE or in India.

Ms. Bali holds an M.B.A. from the Jamnalal Bajaj Institute of Management Studies in India, and a B.A. in Economics from the University of Delhi, India.

In connection with her appointment, Ms. Bali will receive compensation for serving on the Board as follows:


•	A cash retainer of $25,082 (the pro-rated portion of the $90,000 annual cash retainer amount paid to all directors for service between the 2019 and 2020 annual meetings of stockholders of the Company);

•

The grant of a number of restricted stock units equal in value to $58,525 as measured by the closing price of the Company’s Class A Common Stock, par value $0.01 per share on February 24, 2020 (rounded down to the nearest whole share), with such stock grant to vest on February 24, 2021 (such grant being the pro-rated portion of the $210,000 in restricted stock units, based on fair market value on date of grant, granted to all directors for service between the 2019 and 2020 annual meetings of stockholders of the Company); and


•	For service on any committee of the Board Ms. Bali may be appointed to, $1,500 per meeting (excluding telephonic meetings of 30 minutes or less).

Ms. Bali is expected to enter into the Company’s standard form of indemnification agreement for directors and officers with the Company.


Item 7.01.	Regulation FD Disclosure.

The Company’s investor presentation containing additional financial information for the quarter and year ended December 31, 2019 is attached to this current report on Form 8-K as Exhibit 99.2*.


Item 9.01.	Financial Statements and Exhibits.

(d) Exhibits.



Exhibit No.		Description
99.1		Press Release of Cognizant Technology Solutions Corporation, dated February 5, 2020.
99.2		Investor Presentation, dated February 5, 2020.
104		Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document).



*	The information in Item 2.02, Item 7.01, Exhibit 99.1 and Exhibit 99.2 of this current report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

By:	/s/ Karen McLoughlin
Name:	Karen McLoughlin
Title:	Chief Financial Officer

Date: February 5, 2020

Exhibit 99.1



				Glenpointe Centre West
				500 Frank W. Burr Blvd.
				Teaneck, NJ 07666

COGNIZANT REPORTS FOURTH QUARTER AND FULL YEAR 2019 RESULTS

Annual revenue of $16.8 billion, up 4.1% (5.2% in constant currency) over 2018

Increases quarterly dividend by 10% to $0.22 per share and share repurchase authorization by $2 billion

TEANECK, N.J., February 5, 2020 - Cognizant Technology Solutions Corporation (Nasdaq: CTSH), one of the world’s leading professional services companies, today announced its fourth quarter and full year 2019 financial results.

Highlights - Fourth Quarter 2019


•	Quarterly revenue increased to $4.3 billion, up 3.8% (4.2% in constant currency¹) from the year-ago quarter.


•	GAAP operating margin was 14.6% compared to 16.8% in the year-ago quarter.


•	Adjusted Operating Margin¹ was 17.0%, flat compared to the year-ago quarter.


•	Net income was $395 million compared to $648 million in the year-ago quarter.


•	Quarterly GAAP diluted EPS was $0.72 compared to $1.12 in the year-ago quarter.


•	Quarterly Adjusted Diluted EPS¹ was $1.07 compared to $0.98 in the year-ago quarter.

"Our steady progress against key initiatives is increasingly evident in our commercial and financial performance," said Brian Humphries, Chief Executive Officer. "We enter 2020 with renewed vigor and optimism."

Highlights - Full Year 2019


•	Revenue increased to $16.8 billion, up 4.1% (5.2% in constant currency) from 2018.


•	GAAP operating margin was 14.6% compared to 17.4% in 2018.


•	Adjusted Operating Margin was 16.6% compared to 18.1% in 2018.


•	Net income was $1.8 billion compared to $2.1 billion in 2018.


•	GAAP diluted EPS was $3.29 compared to $3.60 in 2018.


•	Adjusted Diluted EPS was $3.99 compared to $4.02 in 2018.

_______________

¹Constant currency revenue growth, Adjusted Operating Margin and Adjusted Diluted Earnings Per Share ("Adjusted Diluted EPS") are not measurements of financial performance prepared in accordance with GAAP. See “About Non-GAAP Financial Measures” for more information and reconciliations to the most directly comparable GAAP financial measures at the end of this release.

Fourth Quarter 2019 Performance by Business Segment

Financial Services (34.3% of revenues) revenue grew 1.2% year-over-year, or 1.5% in constant currency, driven primarily by insurance. Growth in banking was stable, driven primarily by the contribution of the previously announced partnership with three Finnish financial institutions to transform and operate a shared core banking platform. This was partially offset by continued softness with a few of our largest banking and insurance clients.

Healthcare (28.5% of revenues) revenue grew 1.6% year-over-year, or 1.8% in constant currency. Segment revenue was driven by double-digit growth in life sciences, primarily from demand within Digital Operations, continued momentum within our industry-specific platform solutions and the contribution of Zenith Technologies, which we acquired in July 2019. This was partially offset by a decline in revenue within healthcare as results were negatively impacted by industry consolidation and the movement of work to a captive at a large North American client.

Products and Resources (22.4% of revenues) revenue grew 8.1% year-over-year, or 8.6% in constant currency, driven by broad-based growth across industries, including retail and consumer goods, manufacturing, logistics, energy and utilities, and travel and hospitality. Results reflect demand for core modernization services of enterprise applications and for services within Digital Business.

Communications, Media and Technology (14.8% of revenues) revenue grew 8.0% year-over-year, or 9.0% in constant currency, driven by broad-based growth across all the industries in this segment. Revenue growth in technology was negatively impacted by our previously announced decision to exit certain portions of our content services business.

First Quarter & Full Year 2020 Outlook

The Company is providing the following guidance:


▪	First quarter 2020 year-over-year revenue growth in the range of 2.8-3.8% in constant currency² which includes our estimate of a negative 60 basis points impact from the exit of certain content services business.


▪	Full year 2020 year-over-year revenue growth in the range of 2.0-4.0% in constant currency² which includes our estimate of a negative 110 basis points impact from the exit of certain content services business.


▪	Full year 2020 Adjusted Operating Margin³ expected to be in the range of 16.0-17.0%.


▪	Full year 2020 Adjusted Diluted EPS³ expected to be in the range of $3.97-4.13.

"Our operating performance and strong free cash flows in the fourth quarter reflect the actions taken throughout 2019 to improve our cost structure and instill greater operating discipline across the company,” said Karen McLoughlin, Chief Financial Officer. “Our 2020 outlook reflects our commitment to further improve our cost structure to fund investments in growth. We are executing a balanced capital deployment strategy that is focused on reaccelerating top-line growth through strategic acquisitions and other investments while returning capital to shareholders.”

__________________________

² Based on current foreign exchange rates, we expect first quarter revenue growth to be negatively impacted by 30 basis points while full year 2020 revenue growth is not expected to be impacted, translating to reported growth of 2.5-3.5% ($4.21-4.25 billion) and 2.0-4.0% ($17.11-17.45 billion), respectively.

³A full reconciliation of Adjusted Operating Margin and Adjusted Diluted EPS guidance to the corresponding GAAP measures on a forward-looking basis cannot be provided without unreasonable efforts, as we are unable to provide reconciling information with respect to unusual items, net non-operating foreign currency exchange gains or losses, and the tax effects of these adjustments.

Return of Capital to Shareholders

As part of its ongoing balanced capital deployment strategy, the Company announced a 10% increase to its quarterly cash dividend and increased its share repurchase authorization by $2.0 billion. The Company declared a quarterly cash dividend of $0.22 per share on Cognizant Class A common stock for shareholders of record at the close of business on February 18, 2020. This dividend will be payable on February 28, 2020.

Conference Call

Cognizant will host a conference call on February 5, 2020, at 5:00 p.m. (Eastern) to discuss the Company’s fourth quarter and full year 2019 results. To listen to the conference call, please dial (877) 810-9510 (domestically) or (201) 493-6778 (internationally) and provide the following conference passcode: “Cognizant Call.”

The conference call will also be available live on the Investor Relations section of the Cognizant website at http://investors.cognizant.com. Please go to the website at least 15 minutes prior to the call to register and to download and install any necessary audio software. An earnings supplement will also be available on the Cognizant website at the time of the conference call.

For those who cannot access the live broadcast, a replay will be available. To listen to the replay, please dial (877) 660-6853 (domestically) or (201) 612-7415 (internationally) and enter 13697961 from two hours after the end of the call until 11:59 p.m. (Eastern) on February 19, 2020. The replay will also be available at Cognizant’s website www.cognizant.com for 60 days following the call.

About Cognizant

Cognizant (Nasdaq-100: CTSH) is one of the world’s leading professional services companies, transforming clients’ business, operating and technology models for the digital era. Our unique industry-based, consultative approach helps clients envision, build and run more innovative and efficient businesses. Headquartered in the U.S., Cognizant is ranked 193 on the Fortune 500 and is consistently listed among the most admired companies in the world. Learn how Cognizant helps clients lead with digital at www.cognizant.com or follow us @Cognizant.

Forward-Looking Statements

This press release 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 assumptions as to future events that may not prove to be accurate. These statements include, but are not limited to, express or implied forward-looking statements relating to our expectations regarding opportunities in the marketplace, our cost structure, investment in and growth of our business, our realignment plans, the timing, cost and impact of the 2020 Fit for Growth Plan, our shift to digital solutions and services, our anticipated financial performance, our capital deployment plan and clarification, if any, by the Indian government as to the application of the Supreme Court's ruling related to the India Defined Contribution Obligation. These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ materially from those expressed or implied include general economic conditions, changes in the regulatory environment, including with respect to immigration and taxes, and the other factors discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. Cognizant undertakes no

obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.

About Non-GAAP Financial Measures

To supplement our financial results presented in accordance with GAAP, this press release includes references to the following measures defined by the Securities and Exchange Commission as non-GAAP financial measures: Adjusted Income From Operations, Adjusted Operating Margin, Adjusted Diluted EPS, free cash flow and constant currency revenue growth. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures should be read in conjunction with our financial statements prepared in accordance with GAAP. The reconciliations of our non-GAAP financial measures to the corresponding GAAP measures should be carefully evaluated.

Our non-GAAP financial measures, Adjusted Operating Margin, Adjusted Income From Operations and Adjusted Diluted EPS exclude unusual items. Additionally, Adjusted Diluted EPS excludes net non-operating foreign currency exchange gains or losses and the tax impact of all the applicable adjustments. The income tax impact of each item is calculated by applying the statutory rate and local tax regulations in the jurisdiction in which the item was incurred. Free cash flow is defined as cash flows from operating activities net of purchases of property and equipment. Constant currency revenue growth is defined as revenues for a given period restated at the comparative period’s foreign currency exchange rates measured against the comparative period's reported revenues.

Management believes providing investors with an operating view consistent with how we manage the Company provides enhanced transparency into our operating results. For our internal management reporting and budgeting purposes, we use various GAAP and non-GAAP financial measures for financial and operational decision-making, to evaluate period-to-period comparisons, to determine portions of the compensation for our executive officers and for making comparisons of our operating results to those of our competitors. Therefore, it is our belief that the use of non-GAAP financial measures excluding certain costs provides a meaningful supplemental measure for investors to evaluate our financial performance. Accordingly, we believe that the presentation of our non-GAAP measures, when read in conjunction with our reported GAAP results, can provide useful supplemental information to our management and investors regarding financial and business trends relating to our financial condition and results of operations.

A limitation of using non-GAAP financial measures versus financial measures calculated in accordance with GAAP is that non-GAAP financial measures do not reflect all of the amounts associated with our operating results as determined in accordance with GAAP and may exclude costs that are recurring such as our net non-operating foreign currency exchange gains or losses. In addition, other companies may calculate non-GAAP financial measures differently than us, thereby limiting the usefulness of these non-GAAP financial measures as a comparative tool. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from our non-GAAP financial measures to allow investors to evaluate such non-GAAP financial measures.



Investor Relations Contact:				Media Contact:
Katie Royce				Rick Lacroix
Global Head of Investor Relations				VP, Corporate Communications
201-679-2739				201-470-8961
[email protected]				[email protected]

- tables to follow -

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in millions, except per share data)



	Three Months Ended December 31,						Twelve Months Ended December 31,
	2019			2018			2019			2018
Revenues	$	4,284		$	4,129		$	16,783		$	16,125
Operating expenses:
Cost of revenues (exclusive of depreciation and amortization expense shown separately below)	2,749			2,540			10,634			9,838
Selling, general and administrative expenses	676			769			2,972			3,007
Restructuring charges ^(a)	101			7			217			19
Depreciation and amortization expense	132			120			507			460
Income from operations	626			693			2,453			2,801
Other income (expense), net:
Interest income	40			49			176			177
Interest expense	(6		)	(8		)	(26		)	(27		)
Foreign currency exchange gains (losses), net	(36		)	81			(65		)	(152		)
Other, net	2			—			5			(2		)
Total other income (expense), net	—			122			90			(4		)
Income before provision for income taxes	626			815			2,543			2,797
Provision for income taxes	(174		)	(168		)	(643		)	(698		)
Income (loss) from equity method investment	(57		)	1			(58		)	2
Net income	$	395		$	648		$	1,842		$	2,101
Basic earnings per share	$	0.72		$	1.12		$	3.30		$	3.61
Diluted earnings per share	$	0.72		$	1.12		$	3.29		$	3.60
Weighted average number of common shares outstanding - Basic	548			578			559			582
Dilutive effect of shares issuable under stock-based compensation plans	—			1			1			2
Weighted average number of common shares outstanding - Diluted	548			579			560			584

(a)Restructuring charges include costs related to our realignment and 2020 Fit for Growth programs. See notes (a) and (c) in our “Reconciliations of Non-GAAP Financial Measures" for more information.

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited)

(in millions, except par values)



	December 31, 2019			December 31, 2018
Assets
Current assets:
Cash and cash equivalents	$	2,645		$	1,161
Short-term investments	779			3,350
Trade accounts receivable, net ^(a)	3,256			3,190
Other current assets	931			909
Total current assets	7,611			8,610
Property and equipment, net	1,309			1,394
Operating lease assets, net	926			—
Goodwill	3,979			3,481
Intangible assets, net	1,041			1,150
Deferred income tax assets, net	585			442
Long-term investments	17			80
Other noncurrent assets	736			689
Total assets	$	16,204		$	15,846
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	239		$	215
Deferred revenue	313			286
Short-term debt	38			9
Operating lease liabilities	202			—
Accrued expenses and other current liabilities ^(a)	2,191			2,200
Total current liabilities	2,983			2,710
Deferred revenue, noncurrent	23			62
Operating lease liabilities, noncurrent	745			—
Deferred income tax liabilities, net	35			183
Long-term debt	700			736
Long-term income taxes payable	478			478
Other noncurrent liabilities	218			253
Total liabilities	5,182			4,422
Stockholders’ equity:
Preferred stock, $0.10 par value, 15.0 shares authorized, none issued	—			—
Class A common stock, $0.01 par value, 1,000 shares authorized, 548 and 577 shares issued and outstanding at December 31, 2019 and 2018, respectively	5			6
Additional paid-in capital	33			47
Retained earnings	11,022			11,485
Accumulated other comprehensive income (loss)	(38		)	(114		)
Total stockholders’ equity	11,022			11,424
Total liabilities and stockholders’ equity	$	16,204		$	15,846

(a) In 2019, we changed our policy with regard to the presentation of certain amounts due to customers, such as discounts and rebates. As a result, in 2019, we reduced "Trade accounts receivable, net" by $99 million for amounts due to customers, which under our previous policy would have been included in the caption "Accrued expenses and other current liabilities". To conform to the current year presentation, we reduced "Trade accounts receivable, net" and "Accrued expenses and other current liabilities" by $67 million each as of December 31, 2018.

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

Reconciliations of Non-GAAP Financial Measures

(Unaudited)

(dollars in millions, except per share amounts)



	Three Months Ended December 31,						Twelve Months Ended December 31,						Guidance
	2019			2018			2019			2018			Full Year 2020
GAAP income from operations	$	626		$	693		$	2,453		$	2,801
Realignment charges^(a)	53			7			169			19
Incremental accrual related to the India Defined Contribution Obligation^(b)	—			—			117			—
2020 Fit for Growth Plan restructuring charges^(c)	48			—			48			—
Initial funding of Cognizant U.S. Foundation^(d)	—			—			—			100
Adjusted Income From Operations	$	727		$	700		$	2,787		$	2,920

GAAP operating margin	14.6		%	16.8		%	14.6		%	17.4		%
Realignment charges	1.3			0.2			1.0			0.1			0.2% - 0.4%
Incremental accrual related to the India Defined Contribution Obligation	—			—			0.7			—			(b)
2020 Fit for Growth Plan restructuring charges	1.1			—			0.3			—			0.5% - 0.9%
Initial funding of Cognizant U.S. Foundation	—			—			—			0.6			—
Adjusted Operating Margin	17.0		%	17.0		%	16.6		%	18.1		%	approximately 16.0% - 17.0%

GAAP diluted earnings per share	$	0.72		$	1.12		$	3.29		$	3.60
Effect of above adjustments, pre-tax	0.18			0.01			0.60			0.20			(a), (b), (c)
Non-operating foreign currency exchange (gains) losses, pre-tax^(e)	0.08			(0.14		)	0.11			0.26			(e)
Tax effect of above adjustments ^(f)	(0.05		)	(0.01		)	(0.15		)	(0.03		)	(a), (b), (c), (e)
Effect of the equity method investment impairment^(g)	0.10			—			0.10			—
Effect of the India Tax Law ^(h)	0.04			—			0.04			—
Effect of adjustment to the one-time income tax expense related to the Tax Reform Act ⁽ⁱ⁾	—			—			—			(0.01		)
Adjusted Diluted Earnings Per Share	$	1.07		$	0.98		$	3.99		$	4.02		$3.97 - $4.13

Notes:

(a)

During the three months ended December 31, 2019, we incurred $53 million in realignment charges that include $4 million in employee separation costs, $27 million in employee retention costs and $22 million in third party realignment costs. During the year ended December 31, 2019, we incurred $169 million of realignment charges that include $64 million of employee separation costs, $22 million of costs associated with our CEO transition and the departure of our president, $45 million of employee retention costs and $38 million in third party realignment costs. The total costs related to the realignment are reported in "Restructuring charges" in our unaudited consolidated statements of operations. Our guidance anticipates pre-tax realignment charges in the range of $0.08 to $0.11 per diluted share for the full year 2020. The tax effect of these realignment charges is expected to be in the range of $0.02 to $0.03 per diluted share for the full year 2020.

(b)

In the first quarter of 2019, a ruling of the Supreme Court of India interpreting certain statutory defined contribution obligations of employees and employers (the “India Defined Contribution Obligation”) altered historical understandings of such obligations, extending them to cover additional portions of the employee’s income. As a result, the ongoing contributions of our affected employees and the Company are required to be increased. In the first quarter of 2019, we accrued $117 million with respect to prior periods, assuming retroactive application of the Supreme Court’s ruling. There is significant uncertainty as to how the liability should be calculated as it is impacted by multiple variables, including the period of assessment, the application with respect to certain current and former employees and whether interest and penalties may be assessed. Since the ruling, a variety of trade associations and industry groups have advocated to the Indian government, highlighting the harm to the information technology sector, other industries and job growth in India that would result from a retroactive application of the ruling. It is possible that the Indian government will review the matter and there is a substantial question as to whether the Indian government will apply the Supreme Court’s ruling on a retroactive basis. As such, the ultimate amount of our

obligation may be materially different from the amount accrued and therefore, the amount and timing of an adjustment to this accrual, if any, cannot be provided on a forward-looking basis without unreasonable efforts. The incremental accrual related to the India Defined Contribution Obligation is reported in "Selling, general and administrative expenses" in our unaudited consolidated statement of operations.

(c)

During the three months and year ended December 31, 2019, we incurred $48 million in restructuring charges, as part of our 2020 Fit for Growth Plan, that include $45 million in employee separation costs, $2 million in employee retention costs and $1 million in third party costs. The charges described above include $5 million of costs incurred in 2019 related to our exit from certain content-related services. The total costs related to the 2020 Fit for Growth Plan are reported in "Restructuring charges" in our unaudited consolidated statements of operations. Our guidance anticipates pre-tax charges in the range of $0.17 to $0.27 per diluted share for the full year 2020. The tax effect of these charges is expected to be in the range of $0.04 to $0.07 per diluted share for the full year 2020.


(d)	In the second quarter of 2018, we provided $100 million of initial funding to Cognizant U.S. Foundation. This cost is reported in "Selling, general and administrative expenses" in our unaudited consolidated statement of operations.

(e)

Non-operating foreign currency exchange gains and losses, inclusive of gains and losses on related foreign exchange forward contracts not designated as hedging instruments for accounting purposes, are reported in "Foreign currency exchange gains (losses), net" in our unaudited consolidated statements of operations. Non-operating foreign currency exchange gains and losses are subject to high variability and low visibility and therefore cannot be provided on a forward-looking basis without unreasonable efforts.


(f)	Presented below are the tax impacts of each of our non-GAAP adjustments to pre-tax income:



	Three Months Ended December 31				Twelve Months Ended December 31
	2019		2018		2019			2018
	(in millions)				(in millions)
Non-GAAP income tax benefit (expense) related to:
Realignment charges	$	13	$	2	$	43		$	5
Foreign currency exchange gains (losses)	—		3		(1		)	(12		)
2020 Fit for Growth Plan restructuring charges	$	13	$	—	$	13		$	—
Incremental accrual related to the India Defined Contribution Obligation	—		—		31			—
Cognizant U.S. Foundation funding	—		—		—			28

The effective tax rate related to each of our non-GAAP adjustments varies depending on the jurisdictions in which such income and expenses are generated and the statutory rates applicable in those jurisdictions.

(g)

As a result of recent events, indicating one of our equity method investments experienced an other-than-temporary impairment, we assessed its fair value and determined that the carrying value exceeded the fair value and therefore recorded an impairment charge of $57 million in the fourth quarter of 2019 within the caption "Income (loss) from equity method investments" in our consolidated statements of operations.

(h)

In December 2019, the Government of India enacted a new tax regime ("India Tax Law") effective retroactively to April 1, 2019 that enables domestic companies to elect to be taxed at a lower income tax rate of 25.17%, as compared to the current income tax rate of 34.94%. Once a company elects into the lower income tax rate, a company may not benefit from any tax holidays associated with Special Economic Zones and certain other tax incentives, including Minimum Alternative Tax credit carryforwards, and may not reverse its election. As a result of the enactment of the India Tax Law, we recorded a one-time net income tax expense of $21 million due to the revaluation to the lower income tax rate of our India net deferred income tax assets that are expected to reverse after we elect into the new tax regime.


(i)	In the third quarter of 2018, we finalized our calculation of the one-time net income tax expense related to the enactment of the Tax Cuts and Jobs Act ("Tax Reform Act") and recognized a $5 million income tax benefit, which reduced our provision for income taxes.

The above tables serve to reconcile the Non-GAAP financial measures to the most directly comparable GAAP measures. Please refer to the “About Non-GAAP Financial Measures” section of our press release for further information on the use of these Non-GAAP measures.

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

Schedule of Supplemental Information

(Unaudited)

(dollars in millions)



	Three Months Ended December 31, 2019
					Year over Year
	$		% of total		% Change		Constant Currency % Change ^(a)
Revenues by Segment:
Financial Services	$	1,468	34.3	%	1.2	%	1.5	%
Healthcare	1,221		28.5	%	1.6	%	1.8	%
Products and Resources	963		22.4	%	8.1	%	8.6	%
Communications, Media and Technology	632		14.8	%	8.0	%	9.0	%
Total Revenues	$	4,284			3.8	%	4.2	%

Revenues by Geography:
North America	$	3,241	75.7	%	3.1	%	3.1	%
United Kingdom	337		7.9	%	2.1	%	2.7	%
Continental Europe	429		10.0	%	4.6	%	7.4	%
Europe- Total	766		17.9	%	3.5	%	5.3	%
Rest of World	277		6.4	%	13.1	%	14.5	%
Total Revenues	$	4,284			3.8	%	4.2	%


	Twelve Months Ended December 31, 2019
					Year over Year
	$		% of total		% Change		Constant Currency % Change ^(a)
Revenues by Segment:
Financial Services	$	5,869	35.0	%	0.4	%	1.6	%
Healthcare	4,695		28.0	%	0.6	%	1.0	%
Products and Resources	3,770		22.4	%	10.4	%	12.0	%
Communications, Media and Technology	2,449		14.6	%	11.5	%	13.1	%
Total Revenues	$	16,783			4.1	%	5.2	%

Revenues by Geography:
North America	$	12,726	75.8	%	3.5	%	3.6	%
United Kingdom	1,313		7.8	%	3.1	%	7.1	%
Continental Europe	1,691		10.1	%	8.2	%	13.3	%
Europe - Total	3,004		17.9	%	5.9	%	10.5	%
Rest of World	1,053		6.3	%	5.8	%	9.8	%
Total Revenues	$	16,783			4.1	%	5.2	%

Notes:


(a)	Constant currency revenue growth is not a measurement of financial performance prepared in accordance with GAAP. See “About Non-GAAP Financial Measures” for more information.

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in millions)



	Three Months Ended December 31,						Twelve Months Ended December 31,
	2019			2018			2019			2018
Cash flows from operating activities:
Net income	$	395		$	648		$	1,842		$	2,101
Adjustments for non-cash income and expenses	155			85			556			898
Changes in assets and liabilities	388			(31		)	101			(407		)
Net cash provided by operating activities	938			702			2,499			2,592
Cash flows from investing activities:
Purchases of property and equipment	(93		)	(96		)	(392		)	(377		)
Net (purchases) sales of investments	(43		)	178			2,597			(139		)
Payments for business combinations, net of cash acquired	(239		)	(632		)	(617		)	(1,111		)
Net cash (used in) provided by investing activities	(375		)	(550		)	1,588			(1,627		)
Cash flows from financing activities:
Repurchases of common stock	(163		)	(267		)	(2,247		)	(1,261		)
Net change in borrowings and finance lease and earnout obligations	(12		)	19			(28		)	(145		)
Dividends paid	(110		)	(116		)	(453		)	(468		)
Issuance of common stock under stock-based compensation plans	32			39			159			181
Net cash (used in) financing activities	(253		)	(325		)	(2,569		)	(1,693		)
Effect of exchange rate changes on cash and cash equivalents	(8		)	(5		)	(34		)	(36		)
Increase (decrease) in cash and cash equivalents	302			(178		)	1,484			(764		)
Cash and cash equivalents, beginning of period	2,343			1,339			1,161			1,925
Cash and cash equivalents, end of period	$	2,645		$	1,161		$	2,645		$	1,161

SUPPLEMENTAL CASH FLOW INFORMATION

(in millions)



	Three Months Ended
Stock Repurchases under Board of Directors' authorized stock repurchase program:	December 31, 2019		December 31, 2018
Number of shares repurchased	2.5		3.6

Remaining authorized balance	$	369

Reconciliation of Free Cash Flow Non-GAAP Financial Measure

(in millions)



	Three Months Ended December 31,						Twelve Months Ended December 31,
	2019			2018			2019			2018
Net cash provided by operating activities	$	938		$	702		$	2,499		$	2,592
Purchases of property and equipment	(93		)	(96		)	(392		)	(377		)
Free cash flow	$	845		$	606		$	2,107		$	2,215

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 assumptions as to future events that may not prove to be accurate. These statements include, but are not limited to, express or implied forward-looking statements relating to our expectations regarding opportunities in the marketplace, our cost structure, investment in and growth of our business, our realignment plans, the timing, costs and impact of the Fit for Growth Plan, our shift to digital solutions and services, our anticipated financial performance, our capital deployment plan and clarification, if any, by the Indian government as to the application of the Supreme Court's ruling related to the India Defined Contribution Obligation. These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Factors that could cause actual results to differ materially from those expressed or implied include general economic conditions, changes in the regulatory environment, including with respect to immigration and taxes, and the other factors discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. Cognizant undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law. Adoption of New Accounting Standard On January 1, 2018, the Company adopted Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers,” or the New Revenue Standard, using the modified retrospective method. Results for reporting periods beginning on or after January 1, 2018 are presented under the New Revenue Standard, while prior period amounts are not adjusted and continue to be reported in accordance with the Company’s historic accounting policies. 2

Results Summary • Q4 $4.3B, increased 3.8% (4.2% CC1) Y/Y REVENUE • FY19 $16.8B, increased 4.1% (5.2% CC1) Y/Y • Q4 GAAP Operating Margin of 14.6%, declined 220 bps Y/Y • Q4 Adjusted Operating Margin1 17.0%, was flat Y/Y OPERATING MARGIN • FY19 GAAP Operating Margin of 14.6%, declined 280 bps Y/Y • FY19 Adjusted Operating Margin1 of 16.6%, declined 150 bps Y/Y • Q4 $395M, declined 39% Y/Y NET INCOME • FY19 $1.8B, declined 12% Y/Y • Q4 GAAP diluted EPS of $0.72, declined 36% Y/Y DILUTED EARNINGS • Q4 Adjusted Diluted EPS1 of $1.07, increased 9% Y/Y PER SHARE • FY19 GAAP diluted EPS of $3.29, declined 9% Y/Y • FY19 Adjusted Diluted EPS1 of $3.99, declined 1% Y/Y • FY19 free cash flow1 of $2.1B represented ~114% of net income FREE CASH FLOW • Repurchased 34.2M shares in FY19 for $2.2B & CAPITAL RETURN • February 2020: share repurchase program increased by $2.0B • February 2020: quarterly dividend increased by 10% to $0.22 per share 1 Constant currency revenue growth, Adjusted Operating Margin, Free Cash Flow and Adjusted Diluted Earnings Per Share (“Adjusted Diluted EPS”) are not measurements of financial performance prepared in accordance with GAAP. See “About Non-GAAP Financial Measures” at the end of this earnings supplement for more information and reconciliations to the most directly comparable GAAP financial measures. 3

Revenue and GAAP & Adjusted Diluted EPS $ IN MILLIONS EXCEPT PER SHARE AMOUNTS $4,248 $4,284 $4,141 $4,078 $4,129 $4,110 $4,006 $3,912 $3,828 $3,766 $3,670 $3,546 $1.08 $1.07 $1.05 $1.05 $0.98 $0.96 $0.94 $0.91 $0.94 $0.83 $0.88 $0.75 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 Reported Revenue Adjusted Diluted EPS Revenue Growth Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 ’19 Q3 ’19 Q4 ’19 Y/Y 10.7% 8.9% 9.1% 10.6% 10.3% 9.2% 8.3% 7.9% 5.1% 3.4% 4.2% 3.8% Y/Y CC 11.8% 9.9% 8.5% 9.4% 8.2% 8.2% 9.0% 8.8% 6.8% 4.7% 5.1% 4.2% GAAP DILUTED EPS $0.92 $0.80 $0.84 ($0.03) $0.88 $0.78 $0.82 $ 1.12 $0.77 $0.90 $0.90 $0.72 ADJUSTED DILUTED EPS $0.75 $0.83 $0.88 $0.96) $0.94 $1.05 $ 1.05 $0.98 $0.91 $0.94 $ 1.08 $ 1.07 4

Revenue Performance: Q4 2019 Segments Geography $ IN MILLIONS $ IN MILLIONS REST OF WORLD COMMUNICATIONS, +13.1% Y/Y MEDIA & TECHNOLOGY +14.5% Y/Y CC +8.0% Y/Y +9.0% Y/Y CC $277 FINANCIAL EUROPE $632 SERVICES +3.5% Y/Y +5.3% Y/Y CC +1.2% Y/Y $766 $1,468 +1.5% Y/Y CC PRODUCTS & RESOURCES +8.1% Y/Y $963 +8.6% Y/Y CC $3,241 $1,221 NORTH AMERICA +3.1% Y/Y +3.1% Y/Y CC HEALTHCARE +1.6% Y/Y +1.8% Y/Y CC 5

Revenue Performance: FY2019 Segments Geography $ IN MILLIONS $ IN MILLIONS REST OF WORLD +5.8% Y/Y COMMUNICATIONS, +9.8% Y/Y CC MEDIA & TECHNOLOGY +11.5% Y/Y $1,053 +13.1% Y/Y CC FINANCIAL EUROPE $2,449 SERVICES +5.9% Y/Y +10.5% Y/Y CC +0.4% Y/Y $3,004 $5,869 +1.6% Y/Y CC PRODUCTS & RESOURCES +10.4% Y/Y $3,770 +12.0% Y/Y CC $12,726 $4,695 NORTH AMERICA +3.5% Y/Y +3.6% Y/Y CC HEALTHCARE +0.6% Y/Y +1.0% Y/Y CC 6

GAAP & Adjusted Operating Margin 19.2% 18.3%18.5% 17.6% 17.2% 17.7% 17.2% 17.3% 17.7% 17.7% 17.3% 16.4% 16.5% 16.7% 16.8%17.0% 17.0% 16.1% 16.0% 16.1% 15.7% 14.9% 14.6% 13.1% Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 GAAP OPERATING MARGIN ADJUSTED OPERATING MARGIN 7

Financial Services Revenue Q4 ‘19 Geography $ IN MILLIONS $ IN MILLIONS REST OF WORLD $1,492 +6.2% Y/Y $1,469 $1,464 $1,473 $1,468 $1,461 $1,451 +6.0% Y/Y CC $1,427 $1,427 $1,436 $1,406 $137 $1,376 EUROPE +2.0% Y/Y +3.8% Y/Y CC $299 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 $1,032 Revenue Growth NORTH AMERICA Y/Y 7.0% 4.1% 3.8% 5.4% 6.2% 4.5% 2.6% 1.7% (1.7%) 0.3% 1.9% 1.2% +0.3% Y/Y Y/Y CC 8.1% 5.2% 3.1% 4.2% 3.9% 3.5% 3.5% 2.8% 0.2% 1.7% 3.0% 1.5% BANKING | Stable year-over-year growth in banking driven by revenue associated with Samlink deal partially offset by continued softness in some larger clients INSURANCE | Year-over-year growth moderated following a ramp-down of project based work in Q3 ‘19 8

Healthcare Revenue Q4 ‘19 Geography $ IN MILLIONS $ IN MILLIONS REST OF WORLD $1,221 +84.6% Y/Y $1,202 EUROPE $1,189 $1,175 +85.1% Y/Y CC $1,156 $1,165 +31.4% Y/Y $24 $1,125 $1,121 $1,134 +34.6% Y/Y CC $1,085 $134 $1,050 $1,003 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 $1,063 Revenue Growth NORTH AMERICA Y/Y 9.7% 9.5% 9.3% 11.9% 11.8% 10.1% 9.6% 6.8% 3.9% (1.9%) (1.2%) 1.6% (2.2%) Y/Y Y/Y CC 10.0% 9.9% 9.1% 11.6% 11.1% 9.8% 9.7% 7.0% 4.6% (1.5%) (0.9%) 1.8% HEALTHCARE | Results continue to be negatively impacted by industry consolidation and the movement of work to a captive at a large North American client LIFE SCIENCES | Double-digit year-over-year growth driven by demand within Digital Operations, industry-specific platform solutions and the contribution of the Zenith acquisition 9

Products & Resources Revenue Q4 ‘19 Geography $ IN MILLIONS $ IN MILLIONS REST OF WORLD $966 $963 +16.4% Y/Y $914 $927 +20.9% Y/Y CC $863 $891 $821 $840 $64 $774 $782 $737 $747 EUROPE +1.0% Y/Y +2.6% Y/Y CC $207 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 $692 Revenue Growth NORTH AMERICA +9.7% Y/Y Y/Y 16.4% 13.2% 14.0% 13.7% 11.4% 12.4% 11.5% 13.9% 11.3% 10.4% 11.9% 8.1% Y/Y CC 18.1% 14.7% 13.2% 11.7% 8.2% 10.7% 12.3% 15.4% 13.8% 12.3% 13.4% 8.6% PRODUCTS & RESOURCES | Solid year-over-year growth across industries driven by demand for core modernization services of enterprise applications and for services within Digital Business 10

Communications, Media & Technology Revenue Q4Q4 ‘19 Geography Geography $ IN MILLIONS $ IN MILLIONS REST OF WORLD +8.3% Y/Y +12.2% Y/Y CC $632 $585 $595 $607 $615 $541 $562 $509 $52 $467 $480 $494 EUROPE $430 (10.0%) Y/Y (8.6%) Y/Y CC $126 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 $454 Revenue Growth NORTH AMERICA Y/Y 16.5% 16.8% 18.2% 19.0% 18.4% 15.8% 17.1% 18.4% 16.9% 12.2% 9.4% 8.0% +14.4% Y/Y Y/Y CC 18.5% 18.4% 17.7% 17.2% 15.1% 14.5% 18.1% 20.1% 19.6% 14.1% 10.6% 9.0% CMT | Improved year-over-year growth in Communications & Media. Technology growth decelerated driven by our previously announced decision to exit certain portions of our content services business 11

Employee Metrics Headcount and Annualized Attrition NUMBER OF EMPLOYEES IN THOUSANDS 24% 21% 24% 23% 23% 22% 23% 20% 19% 18% 19% 289.9 292.5 15% 288.2 281.6 285.8 274.2 268.9 261.2 260.0 261.4 256.8 256.1 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 HEADCOUNT QUARTERLY ANNUALIZED ATTRITION Utilization 93% 93% 93% 93% 91% 92% 92% 92% 91% 92% 92% 92% 84% 85% 82% 83% 83% 83% 83% 83% 83% 83% 79% 80% Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 OFFSHORE EXCLUDING TRAINEES % ONSITE UTILIZATION % 12

Cash Flow, Balance Sheet & Capital Allocation $ IN MILLIONS $118 $116 $116 $116 $1,514 $633 $267 $86 $118 $771 $1,054 $111 $110 $332 $45 $632 $163 $30 $89 $13 $90 $477 $116 $35 $259 $6 $316 $239 $66 $144 $197 $146 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 ACQUISITIONS SHARE REPURCHASES DIVIDENDS PAID ($ IN MILLIONS) Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 Q4 '18 Q1 '19 Q2 '19 Q3 '19 Q4 '19 FREE CASH FLOW1 $211 $461 $695 $756 $292 $549 $768 $606 $163 $479 $620 $845 CASH AND SHORT- $4,274 $4,378 $4,713 $5,056 $4,989 $4,247 $4,763 $4,511 $3,668 $3,003 $3,077 $3,424 TERM INVESTMENTS2,3 1 Free Cash Flow is not a measurement of financial performance prepared in accordance with GAAP. See “About Non-GAAP Financial Measures” at the end of this earnings supplement for more information and a reconciliation to the most directly comparable GAAP financial measure. 13 2 Includes $348, $419, $405, $423, $427, $429, $419 and $414 million in restricted time deposits in Q1 ‘18, Q2 ‘18, Q3 ‘18, Q4 ‘18, Q1 ’19, Q2 ’19, Q3 ‘19, and Q4 ‘19 respectively 3 Includes $159 million in restricted cash in Q1 ‘18

Revenue & Operating Metrics REVENUE BY… Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4 ‘19 FY18 FY19 SERVICE LINE OUTSOURCING 42.0% 42.9% 42.3% 41.8% 41.4% 41.1% 40.4% 40.1% 42.3% 40.7% CONSULTING & TECH 58.0% 57.1% 57.7% 58.2% 58.6% 58.9% 59.6% 59.9% 57.7% 59.3% SERVICES CONTRACT TYPE FIXED BID 38.9% 36.2% 36.4% 36.6% 35.7% 35.7% 36.3% 37.3% 37.0% 36.3% TIME & MATERIAL 52.6% 52.9% 52.6% 52.0% 52.4% 51.7% 51.8% 50.5% 52.5% 51.6% TRANSACTION BASED 8.5% 10.9% 11.0% 11.4% 11.9% 12.5% 11.9% 12.2% 10.5% 12.1% CUSTOMER CONCENTRATION TOP 5 9.0% 8.6% 8.7% 8.9% 8.8% 8.0% 7.9% 7.8% 8.6% 7.9% TOP 10 15.9% 15.4% 15.5% 15.6% 15.7% 14.5% 14.4% 14.0% 15.4% 14.6% OPERATING METRICS DAYS SALES OUTSTANDING 741 731 1 In 2019, we changed our policy with regard to the presentation of certain amounts due to customers, such as discounts and rebates. As a result, in 2019, we reduced "Trade accounts receivable, net" by $99 million for amounts due to customers, which under our previous policy would have been included in the caption "Accrued expenses and other current liabilities". To conform to the current 14 year presentation, we reduced "Trade accounts receivable, net" and "Accrued expenses and other current liabilities" by $67 million each as of December 31, 2018. This change in policy had the effect of reducing our DSO by two days and one day as of December 31, 2019 and December 31, 2018, respectively.

2020 Fit for Growth Plan Protect and optimize the core Eliminate costs to fund growth investment Drive efficiency, tooling, delivery optimization, protect Reduce duplication and simplify delivery. renewals, strengthen industry mix and scale internationally Reinvest in sales, branding, talent and automation tools Streamline operating model Leverage core business to win in digital battlegrounds Drive efficiency, scalability and empowerment Invest and reskill to accelerate momentum in data, digital Improve role clarity and accountability engineering, cloud and IoT 2020 Fit for Growth Plan Updates October 2019 Estimate February 2020 Update Total restructuring charges $150-200M Low-end $150-200M Gross Annualized savings $500-550M Unchanged Updated view of restructuring charges Transformation actions reflects lower expected # of employees impacted 10-12K Unchanged severance due to employee reductions Targeted reskilling and training ~5K Unchanged through attrition and potentially lower Net headcount exits (majority by mid-2020) 5-7K Unchanged headcount exits from content services Content services actions Headcount exit ~6K ~5-6K Annualized revenue loss $240-270M $225-255M 15

Guidance1 • Q1 ’20: $4.21-4.25B representing 2.5-3.5% reported growth or 2.8-3.8% in constant currency2 Assumes negative ~60bps impact from the exit of certain content services business REVENUE • • FY20: $17.11-17.45 representing 2.0-4.0% growth as reported and in constant currency3 • Assumes negative ~110bps impact from the exit of certain content services business FY20 ADJUSTED • Approximately 16.0-17.0% OPERATING MARGIN4 FY20 TAX RATE • 24-26% FY20 SHARE COUNT • Approximately 548 million FY20 ADJUSTED • $3.97-4.13 DILUTED EPS4 1 Guidance is as of February 5th, 2020 and does not account for any potential impact from events like changes to immigration and tax policies 2 1Q’20 revenue guidance reflects our assumption of a 30 bps for foreign exchange impact 3 FY20 revenue guidance reflects our assumption of no foreign exchange impact 4 A full reconciliation of Adjusted Operating Margin and Adjusted Diluted EPS guidance to the corresponding GAAP measures on a forward-looking basis cannot be provided without unreasonable efforts as we are unable to provide reconciling information with respect to unusual items, net non-operating foreign currency exchange gains or losses, and the tax effects of these adjustments 16

APPENDIX: 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 Operating Margin, Adjusted Diluted EPS, free cash flow and constant currency revenue growth. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures should be read in conjunction with our financial statements prepared in accordance with GAAP. The reconciliations of our non-GAAP financial measures to the corresponding GAAP measures should be carefully evaluated. In 2018, we modified our non-GAAP financial measures to present non-GAAP financial measures that more closely align with how we manage the Company. All historical non-GAAP financial measures presented in this earnings supplement have been restated to reflect the new definitions. Our non-GAAP financial measures, Adjusted Operating Margin, Adjusted Income From Operations and Adjusted Diluted EPS exclude unusual items. Additionally, Adjusted Diluted EPS excludes net non-operating foreign currency exchange gains or losses and the tax impact of all the applicable adjustments. The income tax impact of each item is calculated by applying the statutory rate and local tax regulations in the jurisdiction in which the item was incurred. Free cash flow is defined as cash flows from operating activities net of purchases of property and equipment. Constant currency revenue growth is defined as revenues for a given period restated at the comparative period’s foreign currency exchange rates measured against the comparative period's reported revenues. We believe providing investors with an operating view consistent with how we manage the Company provides enhanced transparency into our operating results. For our internal management reporting and budgeting purposes, we use various GAAP and non-GAAP financial measures for financial and operational decision-making, to evaluate period-to-period comparisons, to determine portions of the compensation for our executive officers and for making comparisons of our operating results to those of our competitors. Therefore, it is our belief that the use of non-GAAP financial measures excluding certain costs provides a meaningful supplemental measure for investors to evaluate our financial performance. Accordingly, we believe that the presentation of our non-GAAP measures, when read in conjunction with our reported GAAP results, can provide useful supplemental information to our management and investors regarding financial and business trends relating to our financial condition and results of operations. A limitation of using non-GAAP financial measures versus financial measures calculated in accordance with GAAP is that non-GAAP financial measures do not reflect all of the amounts associated with our operating results as determined in accordance with GAAP and may exclude costs that are recurring such as our net non- operating foreign currency exchange gains or losses. In addition, other companies may calculate non-GAAP financial measures differently than us, thereby limiting the usefulness of these non-GAAP financial measures as a comparative tool. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from our non-GAAP financial measures to allow investors to evaluate such non-GAAP financial measures. 18

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, 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 GAAP income from operations $ 570 $ 606 $ 648 $ 657 $ 693 $ 670 $ 745 $ 693 $ 539 $ 619 $ 669 $ 626 Realignment charges (a) 11 39 19 3 1 - 11 7 2 49 65 53 Incremental accrual related to the India Defined - - - - - - - - 117 - - - Contribution Obligation (b) Initial funding of Cognizant U.S. Foundation (c) - - - - - 100 - - - - - - 2020 Fit for Growth Plan restructuring charges (d) - - - - - - - - - - - 48 Adjusted income from operations $ 581 $ 645 $ 667 $ 660 $ 694 $ 770 $ 756 $ 700 $ 658 $ 668 $ 734 $ 727 GAAP operating margin 16.1% 16.5% 17.2% 17.2% 17.7% 16.7% 18.3% 16.8% 13.1% 14.9% 15.7% 14.6% Realignment charges 0.3% 1.1% 0.5% 0.1% - - 0.2% 0.2% - 1.2% 1.6% 1.3% Incremental accrual related to the India Defined - - - - - - - - 2.9% - - - Contribution Obligation Initial funding of Cognizant U.S. Foundation - - - - - 2.5% - - - - - - 2020 Fit for Growth Plan restructuring charges - - - - - - - - - - - 1.1% Adjusted operating margin 16.4% 17.6% 17.7% 17.3% 17.7% 19.2% 18.5% 17.0% 16.0% 16.1% 17.3% 17.0% GAAP diluted earnings per share $ 0.92 $ 0.80 $ 0.84 $ (0.03) $ 0.88 $ 0.78 $ 0.82 $ 1.12 $ 0.77 $ 0.90 $ 0.90 $ 0.72 Effect of above adjustments, pre-tax 0.02 0.07 0.03 - - 0.17 0.02 0.01 0.20 0.09 0.12 0.18 Effect of non-operating foreign currency exchange (gains) (0.08) (0.01) 0.02 (0.04) 0.06 0.14 0.21 (0.14) (0.01) (0.03) 0.09 0.08 losses, pre-tax (e) Tax effect of above adjustments (f) (0.02) (0.03) (0.01) (0.01) - (0.04) 0.01 (0.01) (0.05) (0.02) (0.03) (0.05) Effect of the equity method investment impairment (g) - - - - - - - - - - - 0.10 Effect of the India Tax Law (h) - - - - - - - - - - - 0.04 Effect of net incremental income tax expense related to - - - 1.04 - - (0.01) - - - - - the Tax Reform Act (i) Effect of recognition of income tax benefit related to an (0.09) - - - - - - - - - - - uncertain tax position (j) Adjusted diluted earnings per share $ 0.75 $ 0.83 $ 0.88 $ 0.96 $ 0.94 $ 1.05 $ 1.05 $ 0.98 $ 0.91 $ 0.94 $ 1.08 $ 1.07 19 Please refer to page 21, 22 and 23 of this earnings supplement for corresponding Non-GAAP notes.

Reconciliations of Non-GAAP Financial Measures (In millions, except per share amounts) Year Ended: Dec 31, Dec 31, Guidance 2018 2019 Full Year 2020 GAAP income from operations $ 2,801 $ 2,453 Realignment charges (a) 19 169 Incremental accrual related to the India Defined - 117 Contribution Obligation (b) Initial funding of Cognizant U.S. Foundation (c) 100 - 2020 Fit for Growth Plan restructuring charges (d) - 48 Adjusted income from operations $ 2,920 $ 2,787 GAAP operating margin 17.4% 14.6% Realignment charges 0.1% 1.0% 0.2-0.4% Incremental accrual related to the India Defined - 0.7% (b) Contribution Obligation Initial funding of Cognizant U.S. Foundation 0.6% - - 2020 Fit for Growth Plan restructuring charges - 0.3% 0.5-0.9% Adjusted operating margin 18.1% 16.6% 16.0-17.0% GAAP diluted earnings per share $ 3.60 $ 3.29 Effect of above adjustments, pre-tax 0.20 0.60 (a), (b), (d) Effect of non-operating foreign currency exchange 0.26 0.11 (gains) losses, pre-tax (e) (e) Tax effect of above adjustments (f) (0.03) (0.15) (a), (b), (d), (e) Effect of the equity method investment impairment (g) - 0.10 Effect of the India Tax Law (h) - 0.04 Effect of net incremental income tax expense related to (0.01) - the Tax Reform Act (i) Adjusted diluted earnings per share $ 4.02 $ 3.99 $3.97-4.13 20 Please refer to page 21, 22 and 23 of this earnings supplement for corresponding Non-GAAP notes.

Reconciliations of Non-GAAP Financial Measures Notes: (a) During the three months ended December 31, 2019, we incurred $53 million in realignment charges that include $4 million in employee separation costs, $27 million in employee retention costs and $22 million in third party realignment costs. During the year ended December 31, 2019, we incurred $169 million of realignment charges that include $64 million of employee separation costs, $22 million of costs associated with our CEO transition and the departure of our president, $45 million of employee retention costs and $38 million in third party realignment costs. The total costs related to the realignment are reported in "Restructuring charges" in our unaudited consolidated statements of operations. Our guidance anticipates pre-tax realignment charges in the range of $0.08 to $0.11 per diluted share for the full year 2020. The tax effect of these realignment charges is expected to be in the range of $0.02 to $0.03 per diluted share for the full year 2020. (b) In the first quarter of 2019, a ruling of the Supreme Court of India interpreting certain statutory defined contribution obligations of employees and employers (the “India Defined Contribution Obligation”) altered historical understandings of such obligations, extending them to cover additional portions of the employee’s income. As a result, the contributions of our employees and the Company in future periods are required to be increased. In the first quarter of 2019, we accrued $117 million with respect to prior periods, assuming retroactive application of the Supreme Court’s ruling. There is significant uncertainty as to how the liability should be calculated as it is impacted by multiple variables, including the period of assessment, the application with respect to certain current and former employees and whether interest and penalties may be assessed. Since the ruling, a variety of trade associations and industry groups have advocated to the Indian government, highlighting the harm to the information technology sector, other industries and job growth in India that would result from a retroactive application of the ruling. It is possible that the Indian government will review the matter and there is a substantial question as to whether the Indian government will apply the Supreme Court’s ruling on a retroactive basis. As such, the ultimate amount of our obligation may be materially different from the amount accrued. The incremental accrual related to the India Defined Contribution Obligation is reported in "Selling, general and administrative expenses" in our unaudited consolidated statement of operations. (c) In the second quarter of 2018, we provided $100 million of initial funding to Cognizant U.S. Foundation. This cost is reported in "Selling, general and administrative expenses" in our unaudited consolidated statement of operations. (d) During the three months and year ended December 31, 2019, we incurred $48 million in restructuring charges, as part of our 2020 Fit for Growth Plan, that include $45 million in employee separation costs, $2 million in employee retention costs and $1 million in third party costs. The charges described above include $5 million of costs incurred in 2019 related to our exit from certain content-related services. The total costs related to the 2020 Fit for Growth Plan are reported in "Restructuring charges" in our unaudited consolidated statements of operations. Our guidance anticipates pre-tax charges in the range of $0.17 to $0.27 per diluted share for the full year 2020. The tax effect of these charges is expected to be in the range of $0.04 to $0.07 per diluted share for the full year 2020. (e) Non-operating foreign currency exchange gains and losses, inclusive of gains and losses on related foreign exchange forward contracts not designated as hedging instruments for accounting purposes, are reported in "Foreign currency exchange gains (losses), net" in our unaudited consolidated statements of operations. Non-operating foreign currency exchange gains and losses are subject to high variability and low visibility and therefore cannot be provided on a forward-looking basis without unreasonable efforts. 21

Reconciliations of Non-GAAP Financial Measures (f) Presented below are the tax impacts of each of our non-GAAP adjustments to pre-tax income: 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, 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 Tax impacts of non-GAAP adjustments: Realignment charges $ 4 $ 14 $ 6 $ 1 $ - $ - $ 3 $ 2 $ - $ 13 $ 17 $ 13 Incremental accrual related to the India Defined - - - - - - - - 31 - - - Contribution Obligation Cognizant U.S. Foundation funding - - - - - 28 - - - - - - 2020 Fit for Growth restructuring charges - - - - - - - - - - - 13 Foreign currency exchange gains and losses 5 - (1) 6 (1) (8) (6) 3 1 - (2) - Year Ended Dec 31, Dec 31, 2018 2019 Tax impacts of non-GAAP adjustments: Realignment charges $ 5 $ 43 Incremental accrual related to the India Defined - 31 Contribution Obligation Cognizant U.S. Foundation funding 28 - 2020 Fit for Growth restructuring charges - 13 Foreign currency exchange gains and losses (12) (1) The effective tax rate related to each of our non-GAAP adjustments varies depending on the jurisdictions in which such income and expenses are generated and the statutory rates applicable in those jurisdictions (g) As a result of recent events, indicating one of our equity method investments experienced an other-than-temporary impairment, we assessed its fair value and determined that the carrying value exceeded the fair value and therefore recorded an impairment charge of $57 million in the fourth quarter of 2019 within the caption "Income (loss) from equity method investments" in our consolidated statements of operations. 22

Reconciliations of Non-GAAP Financial Measures (h) In December 2019, the Government of India enacted a new tax regime ("India Tax Law") effective retroactively to April 1, 2019 that enables domestic companies to elect to be taxed at a lower income tax rate of 25.17%, as compared to the current income tax rate of 34.94%. Once a company elects into the lower income tax rate, a company may not benefit from any tax holidays associated with Special Economic Zones and certain other tax incentives, including Minimum Alternative Tax credit carryforwards, and may not reverse its election. As a result of the enactment of the India Tax Law, we recorded a one-time net income tax expense of $21 million due to the revaluation to the lower income tax rate of our India net deferred income tax assets that are expected to reverse after we elect into the new tax regime. (i) In the fourth quarter of 2017, in connection with the enactment of the Tax Reform Act, we recorded a one-time provisional net income tax expense of $617 million. In the third quarter of 2018, we finalized our calculation of the one-time net income tax expense related to the enactment of the Tax Reform Act and recognized a $5 million income tax benefit, which reduced our provision for income taxes. (j) In the first quarter of 2017, we recognized an income tax benefit previously unrecognized in our consolidated financial statements related to a specific uncertain tax position of $55 million. The recognition of the benefit in 2017 was based on management’s reassessment regarding whether this unrecognized tax benefit met the more-likely-than-not threshold in light of the lapse in the statute of limitations as to a portion of such benefit. Reconciliation of FCF 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 30, (in millions) 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 Net cash provided by operating activities $ 277 $ 521 $ 773 $ 836 $ 388 $ 640 $ 862 $ 702 $ 269 $ 575 $ 717 $ 938 Purchases of property and equipment (66) (60) (78) (80) (96) (91) (94) (96) (106) (96) (97) (93) FCF $ 211 $ 461 $ 695 $ 756 $ 292 $ 549 $ 768 $ 606 $ 163 $ 479 $ 620 $ 845 Year Ended Dec 31, Dec 31, (in millions) 2018 2019 Net cash provided by operating activities $ 2,592 $ 2,499 Purchases of property and equipment (377) (392) FCF $ 2,215 $ 2,107 The above tables serve to reconcile the Non-GAAP financial measures to the most directly comparable GAAP measures. 23