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COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

(CTSH)
  Report
Delayed Nasdaq  -  04:00 2022-09-29 pm EDT
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COGNIZANT TECHNOLOGY SOLUTIONS CORP Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

07/28/2022 | 06:07am EDT

Executive Summary



Cognizant is one of the world's leading professional services companies,
engineering modern business for the digital era. Our services include digital
services and solutions, consulting, application development, systems
integration, application testing, application maintenance, infrastructure
services and business process services. Digital services are an important part
of our portfolio, aligning with our clients' focus on becoming data-enabled,
customer-centric and differentiated businesses. We are continuing to invest in
digital services with a focus on four key areas: IoT, digital engineering, data
and cloud. We tailor our services and solutions to specific industries with an
integrated global delivery model that employs client service and delivery teams
based at client locations and dedicated global and regional delivery centers. We
help clients modernize technology, reimagine processes and transform experiences
so they can stay ahead in a fast-changing world.

On July 6, 2022, we announced that we will be simplifying our internal operating
structure around practice areas and delivery operations by merging our Digital
Business & Technology and Digital Business Operations practice areas with their
respective delivery organizations to create four new integrated practices:
Software & Platform Engineering, Core Technologies & Insights, Enterprise
Platform Services, and Intuitive Operations & Automation. This change will not
impact our reportable business segments.

Q2 2022 Financial Results

Revenue


Income from Operations


Operating Margin


Diluted EPS








    GAAP    Adjusted1


                    [[Image Removed: ctsh-20220630_g2.jpg]]
                    [[Image Removed: ctsh-20220630_g3.jpg]]
                    [[Image Removed: ctsh-20220630_g4.jpg]]
                    [[Image Removed: ctsh-20220630_g5.jpg]]











Revenue up $321 million       Income from Operations up $64               Operating margin up 30              GAAP                 Adjusted1
or 7.0% from Q2 2021;         million or 9.2% from Q2 2021                bps from Q2 2021                    Diluted EPS up       Diluted EPS up
9.5% in constant                                                                                        $0.14 or 14.4% $0.15 or 15.2%
currency1                                                                                               from Q2 2021   from Q2 2021


During the quarter ended June 30, 2022, revenues increased by $321 million as
compared to the quarter ended June 30, 2021, representing growth of 7.0%, or
9.5% on a constant currency basis1. Our recently completed acquisitions
contributed 110 basis points to revenue growth. Revenue growth also reflected
our clients' continued adoption and integration of digital technologies.
Revenues in the Communications, Media and Technology segment benefited from our
technology clients' growing demand for services related to digital content.
Products and Resources revenue growth was driven by increasing client interest
in delivering cloud-based, data-driven enhanced customer experiences, the
automotive industry's shift toward electric and connected vehicles, and client
investment in supply chain modernization and smart factory solutions. Revenue
growth in the Health Sciences (previously referred to as Healthcare) segment was
driven by increased demand for digital services among pharmaceutical companies.
Financial services revenue growth reflects the growing demand for digital
services, partially offset by the negative impact of the previously disclosed
sale of the Samlink subsidiary, which was completed on February 1, 2022. We
continue to experience pricing pressure on our non-digital services as our
clients optimize the cost of supporting their legacy systems and operations.

1 Adjusted Diluted EPS and constant currency revenue growth are not measures of
financial performance prepared in accordance with GAAP. See "Non-GAAP Financial
Measures" for more information and reconciliations to the most directly
comparable GAAP financial measures, as applicable.





            Cognizant Technology Solutions    22     June 30, 2022 Form 10-Q


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Table of Content s


Operating margin increased to 15.5% for the quarter ended June 30, 2022, from
15.2% for the quarter ended June 30, 2021. Our 2022 operating margin was
positively impacted by delivery efficiencies, economies of scale that allowed us
to leverage our cost structure over a larger organization and the depreciation
of the Indian rupee against the U.S. dollar, partially offset by increased
compensation costs for our delivery personnel (including employees and
subcontractors).

Business Outlook

As we seek to increase our commercial momentum and accelerate growth, our four strategic priorities are:

•Accelerating digital - growing our digital business organically and inorganically;

•Globalizing Cognizant - accelerating the growth of our business in key international markets and diversifying our leadership, capabilities and delivery footprint;

•Increasing our relevance to our clients - ensuring industry-aligned thought leadership and capabilities to address clients' business needs; and

•Repositioning our brand - improving our global brand recognition and becoming better known as a global digital partner to the entire C-suite.


We continue to expect the long-term focus of our clients to be on their digital
transformation into software-driven, data-enabled, customer-centric and
differentiated businesses. The COVID-19 pandemic accelerated our clients' need
to modernize their business, which has led to increased demand for digital
capabilities.

As our clients seek to optimize the cost of supporting their legacy systems and
operations, our non-digital services have been, and may continue to be, subject
to pricing pressure. In addition, clients will likely continue to contend with
industry-specific changes driven by evolving digital technologies, uncertainty
in the regulatory environment, industry consolidation and convergence as well as
international trade policies and other macroeconomic factors, which could affect
their demand for our services.

As a global professional services company, we compete on the basis of the
knowledge, experience, insights, skills and talent of our employees and the
value they can provide to our clients. Our success is dependent, in large part,
on our ability to keep our supply of skilled employees, in particular those with
experience in key digital areas, in balance with client demand. Competition for
skilled employees in the current labor market is intense, and we continue to
experience significantly elevated voluntary attrition. For the three months
ended June 30, 2022, our annualized attrition, including both voluntary and
involuntary, was 35.6% as compared to 31.4% for the three months ended June 30,
2021. Challenges attracting and retaining highly qualified personnel have
resulted in increased cost of delivery and have negatively impacted our ability
to satisfy client demand and achieve our full revenue potential. We expect these
impacts to continue for at least the remainder of 2022. Further, our ongoing and
anticipated future efforts with respect to recruitment, talent management and
employee engagement may not be successful and are likely to continue to result
in increased compensation costs. While we strive to adjust pricing to reduce the
impact of compensation increases on our operating margin, we may not be
successful in fully recovering these increases, which could adversely affect our
profitability.

The invasion of Ukraine by Russia and the sanctions and other measures being
imposed in response to this conflict have increased the level of economic and
political uncertainty worldwide. We do not have employees, facilities or
significant operations in either Russia or Ukraine and revenues generated from
clients in both countries were immaterial in both 2021 and the first half of
2022. However, the continuation of the hostilities or the expansion of the
current conflict's scope into surrounding geographic areas could directly impact
us, our clients, vendors or subcontractors, which could impact our operations
and financial performance. We continue to monitor the situation closely to
ensure business continuity plans are in place for neighboring countries where we
have a presence.

Our future results may be affected by potential tax law changes and other potential regulatory changes, including possible U.S. corporate income tax reform and potentially increased costs for employment and post-employment benefits in India as a result of the Code on Social Security, 2020.







            Cognizant Technology Solutions    23     June 30, 2022 Form 10-Q


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  Table of Content    s

Results of Operations


Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021

The following table sets forth, for the periods indicated, certain financial data for the three months ended June 30:

                                                                 % of                                  % of                                Increase
 (Dollars in millions, except per share
data)                                           2022           Revenues               2021           Revenues                       $                   %
Revenues                                     $ 4,906             100.0             $ 4,585             100.0                   $     321                  7.0
Cost of revenues(a)                            3,119              63.6               2,863              62.4                         256                  8.9
Selling, general and administrative
expenses(a)                                      883              18.0                 881              19.2                           2                

0.2


Depreciation and amortization expense            144               2.9                 145               3.2                          (1)                (0.7)
Income from operations                           760              15.5                 696              15.2                          64                  9.2
Other income (expense), net                        1                                    (2)                                            3                

*

Income before provision for income taxes         761              15.5                 694              15.1                          67                

9.7

Provision for income taxes                      (184)                                 (184)                                            -                

-

Income (loss) from equity method investments       -                                     2                                            (2)              (100.0)
Net income                                   $   577              11.8             $   512              11.2                   $      65                 12.7
Diluted earnings per share                   $  1.11                               $  0.97                                     $    0.14                 14.4

Other Financial Information2

Adjusted Diluted EPS                         $  1.14                               $  0.99                                     $    0.15                 15.2



(a)Exclusive of depreciation and amortization expense

*Not meaningful


Revenues - Overall


During the quarter ended June 30, 2022, revenues increased by $321 million as
compared to the quarter ended June 30, 2021, representing growth of 7.0%, or
9.5% on a constant currency basis2. Our recently completed acquisitions
contributed 110 basis points to revenue growth. Revenue growth also reflected
our clients' continued adoption and integration of digital technologies. We
continue to experience pricing pressure on non-digital services as clients
optimize the cost of supporting their legacy systems and operations. Revenues
from clients added since June 30, 2021, including those related to acquisitions,
were $107 million.


2 Adjusted Diluted EPS and constant currency revenue growth are not measures of
financial performance prepared in accordance with GAAP. See "Non-GAAP Financial
Measures" for more information and reconciliations to the most directly
comparable GAAP financial measures, as applicable.





            Cognizant Technology Solutions    24     June 30, 2022 Form 10-Q


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Table of Content s

Revenues - Reportable Business Segments

The following charts set forth revenues and change in revenues by business segment and geography for the three months ended June 30, 2022 as compared to the three months ended June 30, 2021:


                                                                  Financial Services                                                                  Health Sciences
                                                                           Increase / (Decrease)                                                            Increase / (Decrease)
Dollars in millions                      Revenues               $                    %                  CC 3               Revenues              $                    %                  CC %3
North America                         $     1,104               55                   5.2                  5.5            $   1,210               79                   7.0                  7.0
United Kingdom                                147               17                  13.1                 22.3                   44               (1)                 (2.2)                 6.1
Continental Europe                            143              (43)                (23.1)               (15.1)                 126                6                   5.0                 14.6
Europe - Total                                290              (26)                 (8.2)                 0.3                  170                5                   3.0                 12.3
Rest of World                                 148               11                   8.0                 13.5                   28               (1)                 (3.4)                 4.8
Total                                 $     1,542               40                   2.7                  5.1            $   1,408               83                   6.3                  7.6

                                                                Products and Resources                                                    

Communications, Media and Technology

                                                                           Increase / (Decrease)                                                            Increase / (Decrease)
Dollars in millions                      Revenues               $                    %                  CC %3              Revenues              $                    %                  CC %3
North America                         $       770               47                   6.5                  6.8            $     572              103                  22.0                 22.1
United Kingdom                                134               18                  15.5                 28.0                  133               21                  18.8                 31.4
Continental Europe                            143               11                   8.3                 21.7                   33              (11)                (25.0)               (14.0)
Europe - Total                                277               29                  11.7                 24.6                  166               10                   6.4                 18.6
Rest of World                                  93                9                  10.7                 14.5                   78                -                     -                  6.0
Total                                 $     1,140               85                   8.1                 11.6            $     816              113                  16.1                 19.5


Financial Services - revenues increased 2.7%, or 5.1% on a constant currency basis3


                    [[Image Removed: ctsh-20220630_g6.jpg]]
                                 Banking     é    $8M

                                 Insurance   é    $32M


Revenue growth reflects the growing demand for digital services among U.S.
regional banks, public sector clients in the United Kingdom and insurance
companies. The previously disclosed sale of the Samlink subsidiary, which was
completed on February 1, 2022, negatively impacted revenue growth in this
segment by 190 basis points. Revenues from clients added since June 30, 2021
were $22 million.3

Health Sciences - revenues increased 6.3%, or 7.6% on a constant currency basis3

Effective in the second quarter of 2022, we combined the healthcare operating segment with the life sciences operating segment and renamed our Healthcare reportable segment as Health Sciences. See Note 11 to our unaudited consolidated financial statements for additional information.

Revenue growth was driven by increased demand for digital services among pharmaceutical companies. Revenues from clients added since June 30, 2021 were $11 million.

                    [[Image Removed: ctsh-20220630_g7.jpg]]
                                        é   $83M




3 Constant currency revenue growth is not a measure of financial performance
prepared in accordance with GAAP. See "Non-GAAP Financial Measures" for more
information.





            Cognizant Technology Solutions    25     June 30, 2022 Form 10-Q


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Table of Content s


Products and Resources - revenues increased 8.1%, or 11.6% on a constant currency
basis4


                    [[Image Removed: ctsh-20220630_g8.jpg]]
             Manufacturing, Logistics, Energy and Utilities           é   $40M

             Retail and Consumer Goods                                é   $30M

             Travel and Hospitality                                   é   $15M


Revenue growth in this segment was primarily driven by increased client interest
in delivering cloud-based, data-driven enhanced customer experiences, the
automotive industry's shift toward electric and connected vehicles, and client
investment in supply chain modernization and smart factory solutions. Revenue
growth in this segment included approximately 260 basis points related to
recently completed acquisitions. Revenues from clients added since June 30, 2021
were $36 million.4

Communications, Media and Technology - revenues increased 16.1%, or 19.5% on a constant currency basis4

In 2022, we combined the communications and media operating segment with the technology operating segment. See Note 11 to our unaudited consolidated financial statements for additional information.


Revenues in this segment reflected growing demand from our technology clients
for services related to digital content, primarily driven by the largest clients
in this segment, as well as demand for personalized user experiences and data
modernization. Revenues from clients added since June 30, 2021 were $38 million.

                    [[Image Removed: ctsh-20220630_g9.jpg]]
                                             é    $113M

Revenues - Geographic Markets

Revenues of $4,906 million by geographic market were as follows for the three months ended June 30, 2022:

                    [[Image Removed: ctsh-20220630_g10.jpg]]

Q2 2022 as compared to Q2 2021                                   Increase
(Dollars in millions)                   $      %               CC %4
North America                                     $     284              8.4        8.6
United Kingdom                                           55             13.6       24.7
Continental Europe                                      (37)            (7.7)       2.5
Europe - Total                                           18              2.0       12.6
Rest of World                                            19              5.8       11.2
Total revenues                                    $     321              7.0        9.5



North America continues to be our largest market, representing 74.5% of total
revenues. Outside of the North America region, revenues were negatively impacted
by foreign currency exchange rate movements. Revenue growth in the United
Kingdom was strong among Financial Services clients, including certain public
sector clients, Products and Resources clients, and Communications, Media and
Technology clients. Revenue decline in the Continental Europe region includes a
negative 600 basis points impact from the previously disclosed sale of the
Samlink subsidiary, which was completed on February 1, 2022, and was partially
offset by growth in the German market, which benefited from recent acquisitions.

Cost of Revenues (Exclusive of Depreciation and Amortization Expense)


                    [[Image Removed: ctsh-20220630_g11.jpg]]
                             é $256M
                             é 1.2% as a % of revenues
                             ¡  % of Revenues


Our cost of revenues consists primarily of salaries, incentive-based
compensation, stock-based compensation expense, employee benefits,
project-related immigration and travel for technical personnel, subcontracting
and equipment costs relating to revenues. The increase, as a percentage of
revenues, was due to higher compensation costs for delivery personnel (including
employees and subcontractors), partially offset by delivery efficiencies and the
depreciation of the Indian rupee against the U.S. dollar. Challenges attracting
and retaining highly qualified personnel have resulted and are likely to
continue to result in higher compensation costs.

4 Constant currency revenue growth is not a measure of financial performance
prepared in accordance with GAAP. See "Non-GAAP Financial Measures" for more
information.





            Cognizant Technology Solutions    26     June 30, 2022 Form 10-Q


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  Table of Content    s
SG&A Expenses (Exclusive of Depreciation and Amortization Expense)


SG&A expenses consist primarily of salaries, incentive-based compensation,
stock-based compensation expense, employee benefits, immigration, travel,
marketing, communications, management, finance, administrative and occupancy
costs. The decrease, as a percentage of revenues, was primarily due to economies
of scale that allowed us to leverage our cost structure over a larger
organization, the beneficial impact of foreign currency exchange rate movements
and the optimization of non-strategic SG&A expenses.

                    [[Image Removed: ctsh-20220630_g12.jpg]]
                             é $2M
                             ê 1.2% as a % of revenues
                             ¡ % of Revenues

Depreciation and Amortization Expense



Depreciation and amortization expense decreased by 0.7%, or 0.3% as a percentage
of revenues, during the second quarter of 2022 as compared to the second quarter
of 2021.

Operating Margin - Overall


                    [[Image Removed: ctsh-20220630_g13.jpg]]
                             é $64M
                             é 0.3% as a % of revenues
                             ¡ % of Revenues



The 2022 operating margin was positively impacted by delivery efficiencies,
economies of scale that allowed us to leverage our cost structure over a larger
organization and the depreciation of the Indian rupee against the U.S. dollar
partially offset by increased compensation costs for our delivery personnel
(including employees and subcontractors).


Excluding the impact of applicable designated cash flow hedges, the depreciation
of the Indian rupee against the U.S. dollar positively impacted our operating
margin by approximately 80 basis points during the three months ended June 30,
2022. Each additional 1.0% change in exchange rate between the Indian rupee and
the U.S. dollar will have the effect of moving our operating margin by 18 basis
points.

We enter into foreign exchange derivative contracts to hedge certain Indian
rupee denominated payments in India. These hedges are intended to mitigate the
volatility of the changes in the exchange rate between the U.S. dollar and the
Indian rupee. The settlement of our cash flow hedges positively impacted our
operating margin by 12 basis points during the three months ended June 30, 2022
and by 31 basis points during the three months ended June 30, 2021.

We finished the second quarter of 2022 with approximately 341,300 employees.
Annualized attrition, including both voluntary and involuntary, was
approximately 35.6% for the three months ended June 30, 2022. In both 2021 and
2022, voluntary attrition constituted the vast majority of attrition for the
period. Attrition in all periods presented is weighted towards our more junior
employees.

                    [[Image Removed: ctsh-20220630_g14.jpg]]
                             ¡ Annualized attrition



Segment Operating Profit


In 2022, we made certain changes to the internal measurement of segment
operating profits for the purpose of evaluating segment performance and resource
allocation. The primary reason for the change was to charge to the business
segments costs that are directly managed and controlled by them. Specifically,
segment operating profit now includes costs related to non-delivery personnel
that support consulting services, which were previously included in "unallocated
costs." We have reported 2022 segment operating profits using the new allocation
methodology and have recast the 2021 results to conform to the new methodology.










            Cognizant Technology Solutions    27     June 30, 2022 Form 10-Q


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  Table of Content    s
Segment operating profit and operating margin percentage were as follows:

                    [[Image Removed: ctsh-20220630_g15.jpg]]

                    [[Image Removed: ctsh-20220630_g16.jpg]]

                    [[Image Removed: ctsh-20220630_g17.jpg]]

                    [[Image Removed: ctsh-20220630_g18.jpg]]

In 2022, segment operating margins benefited from delivery efficiencies and the
depreciation of the Indian rupee against the U.S. dollar partially offset by
increased compensation costs for delivery personnel (including employees and
subcontractors). The 2022 Health Sciences segment operating margin was
additionally negatively affected by investments to support revenue growth and
elevated pricing pressure on non-digital services.

Total segment operating profit and operating margin were as follows for the
three months ended June 30:
                                                                                                                                 Increase /
(Dollars in millions)                          2022            % of Revenues            2021            % of Revenues            (Decrease)
Total segment operating profit              $ 1,472                30.0              $ 1,366                29.8              $         106
Less: unallocated costs                         712                                      670                                             42
Income from operations                      $   760                15.5              $   696                15.2              $          64


Other Income (Expense), Net


The following table sets forth total other income (expense), net for the three
months ended June 30:

                                                                                                   Increase/
(in millions)                                                2022                 2021             Decrease
Foreign currency exchange (losses)                        $   (36)             $   (10)          $      (26)
Gains on foreign exchange forward contracts not
designated as hedging instruments                              32                    3                   29
Foreign currency exchange gains (losses), net                  (4)                  (7)                   3
Interest income                                                 9                    7                    2
Interest expense                                               (3)                  (2)                  (1)
Other, net                                                     (1)                   -                   (1)
Total other income (expense), net                         $     1           

$ (2) $ 3



The foreign currency exchange losses were attributed to the remeasurement of net
monetary assets and liabilities denominated in currencies other than the
functional currencies of our subsidiaries. The gains on foreign exchange forward
contracts not designated as hedging instruments related to the realized and
unrealized gains and losses on contracts entered into to offset our foreign
currency exposures. As of June 30, 2022, the notional value of our undesignated
hedges was $1,072 million.

Provision for Income Taxes


                    [[Image Removed: ctsh-20220630_g19.jpg]]
                      ¡ Effective Income Tax Rate ê 2.3%


The effective income tax rate decreased as a result of higher discrete income
tax benefits, primarily related to our undistributed foreign earnings, in the
second quarter of 2022 as compared to the second quarter of 2021.
Net Income


The increase in net income was driven by higher income from operations and a lower effective income tax rate.



[[Image Removed: ctsh-20220630_g20.jpg]]
é                     $65M

¡ é 0.6% of Revenues








            Cognizant Technology Solutions    28     June 30, 2022 Form 10-Q


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  Table of Content    s
Non-GAAP Financial Measures

Portions of our disclosure include non-GAAP financial measures. 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 non-GAAP financial
measures to the corresponding GAAP measures, set forth below, should be
carefully evaluated.

Adjusted Diluted EPS excludes unusual items, 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.
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 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 executive officers and for making comparisons of our operating
results to those of our competitors. We believe that the presentation of
non-GAAP financial measures, which exclude certain costs, along with
reconciliations to the most comparable GAAP measure, as applicable, 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 may
exclude costs that are recurring such as 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 non-GAAP financial measures to allow investors to evaluate such
non-GAAP financial measures.

The following table presents a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure for the three months ended June 30:

                                                                         2022                    2021

GAAP diluted EPS                                                      $  1.11                 $  0.97

Non-operating foreign currency exchange (gains) losses, pre-tax (1) 0.01

                    0.01
Tax effect of non-operating foreign currency exchange (gains) losses
(2)                                                                      0.02                    0.01

Adjusted Diluted EPS                                                  $  1.14                 $  0.99




(1)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.

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

                                                          Three Months Ended
                                                               June 30,
       (in millions)                                        2022              2021

Non-GAAP income tax (expense) related to:


       Foreign currency exchange gains and losses   $      (14)             

$ (6)



The effective tax rate related to non-operating foreign currency exchange gains
and losses varies depending on the jurisdictions in which such income and
expenses are generated and the statutory rates applicable in those
jurisdictions. As such, the income tax effect of non-operating foreign currency
exchange gains and losses shown in the above table may not appear proportionate
to the net pre-tax foreign currency exchange gains and losses reported in our
unaudited consolidated statements of operations.





            Cognizant Technology Solutions    29     June 30, 2022 Form 10-Q


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  Table of Content    s
Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021

The following table sets forth, for the periods indicated, certain financial data for the six months ended June 30:

                                                                   % of                               % of                     Increase / Decrease
 (Dollars in millions, except per share data)     2022           Revenues            2021           Revenues                  $                    %

Revenues                                       $ 9,732             100.0          $ 8,986             100.0             $       746                 8.3
Cost of revenues(a)                              6,216              63.9            5,627              62.6                     589                10.5
Selling, general and administrative
expenses(a)                                      1,745              17.9            1,708              19.0                      37                 2.2

Depreciation and amortization expense              287               2.9              286               3.2                       1                 0.3
Income from operations                           1,484              15.2            1,365              15.2                     119                 8.7
Other income (expense), net                          6                                 (6)                                       12          *
Income before provision for income taxes         1,490              15.3            1,359              15.1                     131                 9.6
Provision for income taxes                        (354)                              (344)                                      (10)                2.9
Income (loss) from equity method investments         4                                  2                                         2               100.0
Net income                                     $ 1,140              11.7          $ 1,017              11.3             $       123                12.1
Diluted EPS                                    $  2.18                            $  1.92                               $      0.26                13.5
Other Financial Information5

Adjusted Diluted EPS                           $  2.23                            $  1.96                               $      0.27                13.8



(a)Exclusive of depreciation and amortization expense.

*Not meaningful

Revenues - Overall


During the six months ended June 30, 2022, revenues increased by $746 million as
compared to the six months ended June 30, 2021, representing growth of 8.3%, or
10.2% on a constant currency basis5. Our recently completed acquisitions
contributed 160 basis points to revenue growth. Revenue growth also reflected
our clients' continued adoption and integration of digital technologies. We
continue to experience pricing pressure on non-digital services as clients
optimize the cost of supporting their legacy systems and operations. In
addition, our revenues from clients added since June 30, 2021, including those
related to acquisitions, were $179 million.

5 Adjusted Diluted EPS and constant currency revenue growth are not measures of
financial performance prepared in accordance with GAAP. See "Non-GAAP Financial
Measures" for more information and reconciliations to the most directly
comparable GAAP financial measures.





            Cognizant Technology Solutions    30     June 30, 2022 Form 10-Q


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Table of Content s

Revenues - Reportable Business Segments

The following charts set forth revenues and change in revenues by business segment and geography for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021:


                                                                  Financial Services                                                                 Health Sciences
                                                                           Increase / (Decrease)                                                            Increase / (Decrease)
Dollars in millions                      Revenues              $                    %                  CC %6               Revenues             $                    %                  CC %6
North America                         $     2,184             122                   5.9                  6.0             $   2,405             173                   7.8                  7.8
United Kingdom                                298              43                  16.9                 22.9                    88               3                   3.5                  9.8
Continental Europe                            300             (78)                (20.6)               (14.2)                  246               8                   3.4                 10.8
Europe - Total                                598             (35)                 (5.5)                 0.7                   334              11                   3.4                 10.6
Rest of World                                 288              23                   8.7                 13.4                    61               3                   5.2                 11.5
Total                                 $     3,070             110                   3.7                  5.5             $   2,800             187                   7.2                  8.2

                                                                Products and Resources                                                    

Communications, Media and Technology

                                                                           Increase / (Decrease)                                                            Increase / (Decrease)
Dollars in millions                      Revenues              $                    %                  CC %6               Revenues             $                    %                  CC %6
North America                         $     1,531              90                   6.2                  6.4             $   1,105             185                  20.1                 20.2
United Kingdom                                266              44                  19.8                 28.1                   259              48                  22.7                 32.2
Continental Europe                            288              53                  22.6                 34.2                    70             (17)                (19.5)               (10.8)
Europe - Total                                554              97                  21.2                 31.2                   329              31                  10.4                 19.7
Rest of World                                 185              30                  19.4                 22.8                   158              16                  11.3                 16.7
Total                                 $     2,270             217                  10.6                 13.2             $   1,592             232                  17.1                 19.7


Financial Services - revenues increased 3.7%, or 5.5% on a constant currency basis6


                    [[Image Removed: ctsh-20220630_g21.jpg]]
                                 Banking     é    $27M

                                 Insurance   é    $83M



Revenue growth reflects the growing demand for digital services among U.S.
regional banks, public sector clients in the United Kingdom and insurance
companies. The previously disclosed sale of the Samlink subsidiary, which was
completed on February 1, 2022, negatively impacted revenue growth in this
segment by 160 basis points.6Revenues from clients added since June 30, 2021
were $39 million.
Health Sciences - revenues increased 7.2%, or 8.2% on a constant currency basis6


Effective in the second quarter of 2022, we combined the healthcare operating segment with the life sciences operating segment and renamed our Healthcare reportable segment to Health Sciences. See Note 11 to our unaudited consolidated financial statements for additional information.

Revenue growth was driven by increased demand for digital services among pharmaceutical companies. Revenues from clients added since June 30, 2021 were $19 million.

                    [[Image Removed: ctsh-20220630_g22.jpg]]
                                       é   $187M



6 Constant currency revenue growth is not a measure of financial performance
prepared in accordance with GAAP. See "Non-GAAP Financial Measures" for more
information.





            Cognizant Technology Solutions    31     June 30, 2022 Form 10-Q


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Table of Content s


Products and Resources - revenues increased 10.6%, or 13.2% on a constant currency
basis7


                    [[Image Removed: ctsh-20220630_g23.jpg]]
            Manufacturing, Logistics, Energy and Utilities        é    $113M

            Retail and Consumer Goods                             é     $72M

            Travel and Hospitality                                é     $32M



Revenue growth in this segment was primarily driven by increased client interest
in delivering cloud-based, data-driven enhanced customer experiences, the
automotive industry's shift toward electric and connected vehicles, and client
investment in supply chain modernization and smart factory solutions. Revenue
growth in this segment included approximately 370 basis points related to
recently completed acquisitions. Revenues from clients added since June 30, 2021
were $57 million.7
Communications, Media and Technology - revenues increased 17.1%, or 19.7% on a constant
currency basis7


In 2022, we combined the communications and media operating segment with the technology operating segment. See Note 11 to our unaudited consolidated financial statements for additional information.


Revenues in this segment reflected growing demand from our technology clients
for services related to digital content, primarily driven by the largest clients
in this segment, as well as demand for personalized user experiences and data
modernization. Revenues from clients added since June 30, 2021 were $64 million.

                    [[Image Removed: ctsh-20220630_g24.jpg]]
                                       é    $232M


Revenues - Geographic Markets

Revenues of $9,732 million by geographic market were as follows for the six months ended June 30, 2022:

                    [[Image Removed: ctsh-20220630_g25.jpg]]

YTD 2022 as compared to YTD 2021                                    Increase / (Decrease)
(Dollars in millions)                      $      %                            CC %7
North America                                        $                  570              8.6        8.7
United Kingdom                                                          138             17.9       25.5
Continental Europe                                                      (34)            (3.6)       4.6
Europe - Total                                                          104              6.1       14.0
Rest of World                                                            72             11.6       16.3
Total revenues                                       $                  746              8.3       10.2


North America continues to be our largest market, representing 74.2% of total
revenues for the six months ended June 30, 2022. Outside of our North America
region, revenues were negatively impacted by foreign currency exchange rate
movements. Revenue growth in the United Kingdom was strong among Financial
Services clients, including certain public sector clients, Products and
Resources clients, and Communications, Media and Technology clients. Revenue
decline in the Continental Europe region includes a negative 510 basis points
impact from the previously disclosed sale of the Samlink subsidiary, which was
completed on February 1, 2022, and was partially offset by growth in the German
market, which benefited from recent acquisitions. Revenue growth in the Rest of
World region was primarily driven by the Australian market, which benefited from
an acquisition that closed in the first half of 2021.




7 Constant currency revenue growth is not a measure of financial performance
prepared in accordance with GAAP. See "Non-GAAP Financial Measures" for more
information.





            Cognizant Technology Solutions    32     June 30, 2022 Form 10-Q


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Table of Content s

Cost of Revenues (Exclusive of Depreciation and Amortization Expense)


                    [[Image Removed: ctsh-20220630_g26.jpg]]
                             é $589M
                             é 1.3% as a % of revenues
                             ¡ % of Revenues



Our cost of revenues consists primarily of salaries, incentive-based
compensation, stock-based compensation expense, employee benefits,
project-related immigration and travel for technical personnel, subcontracting
and equipment costs relating to revenues. The increase, as a percentage of
revenues, was due to higher compensation costs for delivery personnel (including
employees and subcontractors), partially offset by delivery efficiencies and the
depreciation of the Indian rupee against the U.S. dollar. Challenges attracting
and retaining highly qualified personnel have resulted and are likely to
continue to result in higher compensation costs.
SG&A Expenses (Exclusive of Depreciation and Amortization Expense)


SG&A expenses consist primarily of salaries, incentive-based compensation,
stock-based compensation expense, employee benefits, immigration, travel,
marketing, communications, management, finance, administrative and occupancy
costs. The decrease, as a percentage of revenues, was primarily due to economies
of scale that allowed us to leverage our cost structure over a larger
organization and the optimization of non-strategic SG&A expenses.
                    [[Image Removed: ctsh-20220630_g27.jpg]]
                             é $37M
                             ê 1.1% as a % of revenues
                             ¡ % of Revenues

Depreciation and Amortization Expense



Depreciation and amortization expense increased 0.3%, or decreased 0.3% as a
percentage of revenues, during the six months ended June 30, 2022 as compared to
the 2021 period.

Operating Margin - Overall


                    [[Image Removed: ctsh-20220630_g28.jpg]]
                              é $119 million
                                Flat as a % of revenue
                              ¡ % of Revenues


The 2022 operating margin was positively impacted by delivery efficiencies,
economies of scale that allowed us to leverage our cost structure over a larger
organization and the depreciation of the Indian rupee against the U.S. dollar,
offset by increased compensation costs for our delivery personnel (including
employees and subcontractors).

Excluding the impact of applicable designated cash flow hedges, the depreciation
of the Indian rupee against the U.S. dollar positively impacted our operating
margin by approximately 70 basis points during the six months ended June 30,
2022. Each additional 1.0% change in exchange rate between the Indian rupee and
the U.S. dollar will have the effect of moving our operating margin by
approximately 18 basis points.

We enter into foreign exchange derivative contracts to hedge certain Indian
rupee denominated payments in India. These hedges are intended to mitigate the
volatility of the changes in the exchange rate between the U.S. dollar and the
Indian rupee. The settlement of our cash flow hedges positively impacted our
operating margin by 20 basis points during the six months ended June 30, 2022
and by 39 basis points during the 2021 period.












            Cognizant Technology Solutions    33     June 30, 2022 Form 10-Q


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  Table of Content    s

Segment Operating Profit


In 2022, we made certain changes to the internal measurement of segment
operating profits for the purpose of evaluating segment performance and resource
allocation. The primary reason for the change was to charge to the business
segments costs that are directly managed and controlled by them. Specifically,
segment operating profit now includes costs related to non-delivery personnel
that support consulting services, which were previously included in "unallocated
costs." We have reported 2022 segment operating profits using the new allocation
methodology and have recast the 2021 results to conform to the new methodology.
Segment operating profit and operating margin percentage were as follows:

                    [[Image Removed: ctsh-20220630_g29.jpg]]

                    [[Image Removed: ctsh-20220630_g30.jpg]]

                    [[Image Removed: ctsh-20220630_g31.jpg]]

                    [[Image Removed: ctsh-20220630_g32.jpg]]

In 2022, segment operating margins were negatively impacted by increased
compensation costs for delivery personnel (including employees and
subcontractors), partially offset by delivery efficiencies and the depreciation
of the Indian rupee against the U.S. dollar. The 2022 Financial Services segment
operating margin reflects the gain on sale of the Samlink subsidiary while the
2022 Health Sciences segment operating margin was negatively affected by
investments to support revenue growth and elevated pricing pressure on
non-digital services.

Total segment operating profit and margin were as follows for the six months
ended June 30:
                                                                                                                                 Increase /
(Dollars in millions)                          2022            % of Revenues            2021            % of Revenues            (Decrease)
Total segment operating profit              $ 2,838                29.2              $ 2,683                29.9              $         155
Less: unallocated costs                       1,354                                    1,318                                             36
Income from operations                      $ 1,484                15.2              $ 1,365                15.2              $         119


Other Income (Expense), Net


The following table sets forth total other income (expense), net for the six
months ended June 30:
                                                                                                   Increase/
(in millions)                                                2022                 2021             Decrease
Foreign currency exchange (losses)                        $   (49)             $   (22)          $      (27)
Gains on foreign exchange forward contracts not
designated as hedging instruments                              45                    6                   39
Foreign currency exchange gains (losses), net                  (4)                 (16)                  12
Interest income                                                15                   16                   (1)
Interest expense                                               (5)                  (4)                  (1)
Other, net                                                      -                   (2)                   2
Total other income (expense), net                         $     6           

$ (6) $ 12



The foreign currency exchange losses were attributed to the remeasurement of net
monetary assets and liabilities denominated in currencies other than the
functional currencies of our subsidiaries. The gains on foreign exchange forward
contracts not designated as hedging instruments related to the realized and
unrealized gains and losses on contracts entered into to offset our foreign
currency exposures.










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  Table of Content    s

Provision for Income Taxes


                    [[Image Removed: ctsh-20220630_g33.jpg]]
                    é                                      $10M

                    ¡ Effective Income Tax Rate ê 1.5%

The effective income tax rate decreased as a result of higher discrete tax benefits, primarily related to our undistributed foreign earnings, in the six months ended June 30, 2022 as compared to the 2021 period. Net Income

The increase in net income was driven by higher income from operations and a lower effective income tax rate.


                    [[Image Removed: ctsh-20220630_g34.jpg]]
                            é                    $123M

                            ¡ é 0.4% of Revenues

Non-GAAP Financial Measures


See "Three Months Ended June 30, 2022 Compared to Three Months Ended June 30,
2021 - Non-GAAP Financial Measures" above for additional information about our
use of non-GAAP financial measures.

The following table presents a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure for the six months ended June 30: (Dollars in millions, except per share amounts)

2022                    2021

GAAP diluted EPS                                                      $  2.18                 $  1.92

Non-operating foreign currency exchange (gains) losses, pre-tax (1) 0.01

                    0.03
Tax effect of non-operating foreign currency exchange (gains) losses
(2)                                                                      0.04                    0.01

Adjusted Diluted EPS                                                  $  2.23                 $  1.96




(1)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.

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

                                                                Six Months Ended
      (in millions)                                                 June 30,
                                                              2022             2021
      Non-GAAP income tax benefit (expense) related to:

      Foreign currency exchange gains and losses             (20)               (6)


The effective tax rate related to non-operating foreign currency exchange gains
and losses varies depending on the jurisdictions in which such income and
expenses are generated and the statutory rates applicable in those
jurisdictions. As such, the income tax effect of non-operating foreign currency
exchange gains and losses shown in the above table may not appear proportionate
to the net pre-tax foreign currency exchange gains and losses reported in our
unaudited consolidated statements of operations.





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  Table of Content    s
Liquidity and Capital Resources


Our cash generated from operations has historically been the primary source of liquidity to fund operations and investments to grow our business. As of June 30, 2022, we had cash, cash equivalents and short-term investments of $2,320 million and available capacity under our credit facilities of approximately $1,915 million.


The following table provides a summary of cash flows for the six months ended
June 30:
(in millions)                             2022          2021        Increase / Decrease
Net cash provided by (used in):
Operating activities                   $    834      $    722      $                112
Investing activities                        229        (1,259)                    1,488
Financing activities                     (1,050)         (768)                     (282)


Operating activities

The increase in cash provided by operating activities for the six months ended
June 30, 2022 as compared to the six months ended June 30, 2021 was primarily
driven by higher income from operations.

We monitor turnover, aging and the collection of accounts receivable by client.
Our DSO calculation includes receivables, net of allowance for doubtful
accounts, and contract assets, reduced by the uncollected portion of deferred
revenue. Our DSO was 74 days as of June 30, 2022, 71 days as of June 30, 2021,
and 69 days as of December 31, 2021, increasing as revenue growth outpaced
collections.

Investing activities


The net cash provided by investing activities for the six months ended June 30,
2022 was primarily driven by net maturities of investments, partially offset by
capital expenditures. Net cash used in investing activities for the six months
ended June 30, 2021 was driven by cash used for acquisitions, net purchases of
investments and capital expenditures.

Financing activities

The increase in cash used in financing activities for the six months ended June 30, 2022 as compared to the six months ended June 30, 2021 was primarily driven by higher repurchases of common stock.


The Credit Agreement provides for a $750 million Term Loan and a $1,750 million
unsecured revolving credit facility, which are due to mature in November 2023.
We are required under the Credit Agreement to make scheduled quarterly principal
payments on the Term Loan. As of June 30, 2022, we had no outstanding balance on
the revolving credit facility. See   Note 5   to our unaudited consolidated
financial statements.

In March 2022, our India subsidiary renewed its one-year 13 billion Indian rupee
($165 million at the June 30, 2022 exchange rate) working capital facility,
which requires us to repay any balances drawn down within 90 days from the date
of disbursement. There is a 1.0% prepayment penalty applicable to payments made
within 30 days after disbursement. This working capital facility contains
affirmative and negative covenants and may be renewed annually. As of June 30,
2022, we have not borrowed funds under this facility.

Capital Allocation

                    [[Image Removed: ctsh-20220630_g35.jpg]]
                                  Acquisitions

                                  Share Repurchases

                                  Dividend payments


We review our capital allocation framework on an ongoing basis, considering our
financial performance and liquidity position, investments required to execute
our strategic plans and initiatives, acquisition opportunities, the economic
outlook, regulatory changes, the potential impacts of the COVID-19 pandemic and
other relevant factors. As these factors may change over time, the actual
amounts expended on stock repurchase activity, dividends, and acquisitions, if
any, during any particular period cannot be predicted and may fluctuate from
time to time. While we have not completed any acquisitions in 2022, our
longer-term capital allocation framework is unchanged.





            Cognizant Technology Solutions    36     June 30, 2022 Form 10-Q


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Table of Content s

Other Liquidity and Capital Resources Information


We seek to ensure that our worldwide cash is available in the locations in which
it is needed. As part of ongoing liquidity assessments, we regularly monitor the
mix of domestic and international cash flows and cash balances. We evaluate on
an ongoing basis what portion of the non-U.S. cash, cash equivalents and
short-term investments is needed locally to execute our strategic plans and what
amount is available for repatriation back to the United States.

We expect operating cash flows, cash and short-term investment balances,
together with the available capacity under our revolving credit facilities, to
be sufficient to meet our operating requirements, including purchase
commitments, make Tax Reform Act transition tax payments and service our debt
for the next twelve months. The ability to expand and grow our business in
accordance with current plans, make acquisitions, meet long-term capital
requirements beyond a twelve-month period and execute our capital return plan
will depend on many factors, including the rate, if any, at which cash flow
increases, our ability and willingness to pay for acquisitions with capital
stock and the availability of public and private debt, including the ability to
extend the maturity or refinance our existing debt, and equity financing. We
cannot be certain that additional financing, if required, will be available on
terms and conditions acceptable to us, if at all.
Commitments and Contingencies


See Note 10 to our unaudited consolidated financial statements. Critical Accounting Estimates



Management's discussion and analysis of our financial condition and results of
operations is based on our unaudited consolidated financial statements that have
been prepared in accordance with GAAP. The preparation of these financial
statements requires management to make estimates and assumptions that affect the
amounts reported for assets and liabilities, including the recoverability of
tangible and intangible assets, disclosure of contingent assets and liabilities
as of the date of the financial statements, and the reported amounts of revenues
and expenses during the reported period. On an ongoing basis, we evaluate our
estimates. The most significant estimates relate to the recognition of revenue
and profits, including the application of the cost-to-cost method of measuring
progress to completion for certain fixed-price contracts, income taxes, business
combinations and valuation of goodwill and other long-lived assets. We base our
estimates on historical experience, current trends and various other assumptions
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. The actual amounts
may differ from the estimates used in the preparation of the accompanying
unaudited consolidated financial statements. For a discussion of our critical
accounting estimates, see "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" in our Annual Report on Form 10-K
for the year ended December 31, 2021. Our significant accounting policies are
described in Note 1 to the audited consolidated financial statements included in
our Annual Report on Form 10-K for the year ended December 31, 2021.
Recently Adopted and New Accounting Pronouncements


There have been no changes in the information provided in our Annual Report on
Form 10-K for the year ended December 31, 2021.
Forward Looking Statements


The statements contained in this Quarterly Report on Form 10-Q that are not
historical facts are forward-looking statements (within the meaning of Section
21E of the Exchange Act) that involve risks and uncertainties. Such
forward-looking statements may be identified by, among other things, the use of
forward-looking terminology such as "believe," "expect," "may," "could,"
"would," "plan," "intend," "estimate," "predict," "potential," "continue,"
"should" or "anticipate" or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy that involve risks and
uncertainties. From time to time, we or our representatives have made or may
make forward-looking statements, orally or in writing.

Such forward-looking statements may be included in various filings made by us
with the SEC, in press releases or in oral statements made by or with the
approval of one of our authorized executive officers. These forward-looking
statements, such as statements regarding our anticipated future revenues or
operating margin, earnings, capital expenditures, impacts to our business,
financial results and financial condition as a result of the COVID-19 pandemic,
the competitive marketplace for talent and future attrition trends, anticipated
effective income tax rate and income tax expense, liquidity, financing strategy,
access to capital, capital return strategy, investment strategies, cost
management, plans and objectives, including those related to our digital
practice areas, investment in our business, potential acquisitions, industry
trends, client behaviors and trends, the outcome of and costs associated with
regulatory and litigation matters, the appropriateness of the accrual related to
the India Defined Contribution Obligation and other statements regarding matters
that are not historical facts, are based on our current





            Cognizant Technology Solutions    37     June 30, 2022 Form 10-Q


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Table of Content s


expectations, estimates and projections, management's beliefs and certain
assumptions made by management, many of which, by their nature, are inherently
uncertain and beyond our control. Actual results, performance, achievements and
outcomes could differ materially from the results expressed in, or anticipated
or implied by, these forward-looking statements. There are a number of important
factors that could cause our results to differ materially from those indicated
by such forward-looking statements, including:

•economic and political conditions globally, including the invasion of Ukraine
by Russia, and in particular in the markets in which our clients and operations
are concentrated;

•the continuing impact of the COVID-19 pandemic, or other future pandemics, on our business, results of operations, liquidity and financial condition;


•our ability to attract, train and retain skilled employees, including highly
skilled technical personnel and personnel with experience in key digital areas
and senior management to lead our business globally;

•challenges related to growing our business organically as well as inorganically through acquisitions, and our ability to achieve our targeted growth rates;

•our ability to achieve our profitability goals and maintain our capital return strategy;

•our ability to meet specified service levels or milestones required by certain of our contracts;


•intense and evolving competition and significant technological advances that
our service offerings must keep pace with in the rapidly changing markets we
compete in;

•legal, reputation and financial risks if we fail to protect client and/or our data from security breaches and/or cyber attacks;


•the effectiveness of our risk management, business continuity and disaster
recovery plans and the potential that our global delivery capabilities could be
impacted;

•restrictions on visas, in particular in the United States, United Kingdom and
EU, or immigration more generally or increased costs of such visas or the wages
we are required to pay employees on visas, which may affect our ability to
compete for and provide services to our clients;

•risks related to anti-outsourcing legislation, if adopted, and negative perceptions associated with offshore outsourcing, both of which could impair our ability to serve our clients;


•risks and costs related to complying with numerous and evolving legal and
regulatory requirements and client expectations in the many jurisdictions in
which we operate, including the increased stakeholder emphasis on ESG matters;

•potential changes in tax laws, or in their interpretation or enforcement,
failure by us to adapt our corporate structure and intercompany arrangements to
achieve global tax efficiencies or adverse outcomes of tax audits,
investigations or proceedings;

•potential exposure to litigation and legal claims in the conduct of our business; and

•the factors set forth in "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2021.


You are advised to consult any further disclosures we make on related subjects
in the reports we file with the SEC, including this report in the section titled
"Part I, Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Part I, Item 1. Business" in our Annual Report on
Form 10-K for the year ended December 31, 2021. We undertake 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 laws.

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