http://www.morningstar.com/earnings/48140245-cognizant-technology-solutions-corp-class-a-ctsh-q4-2012.aspx

Cognizant Technology Solutions Corp Class A CTSH
Q4 2012 Earnings Call Transcript

Transcript Call Date 02/07/2013

Operator: Ladies and gentlemen, welcome to the Cognizant Technology Solutions Fourth Quarter 2012 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you.

I would now like to turn the conference over to David Nelson, Vice President, Investor Relations and Treasurer at Cognizant.

David Nelson - VP, IR and Treasury: Thank you, Operator, and good morning, everyone. By now you should have received a copy of the earnings release for the Company's fourth quarter and full year 2012 results. If not, a copy is available on our website, cognizant.com.

The speakers we have on today's call are Francisco D'Souza, Chief Executive Officer; and Gordon Coburn, President and Karen McLoughlin, Chief Financial Officer.

Before we begin, I would like to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements. These statements are subject to the risks and uncertainties as described in the Company's earnings release and other filings with the SEC.

I would now like to turn the call over to Francisco D'Souza. Please go ahead, Francisco.

Francisco D'Souza - CEO: Thank you, David, and thank you for joining us today. This morning Cognizant released strong fourth quarter results that kept another year of industry leading performance. Revenue grew 3% sequentially and 17% over the year ago quarter to $1.95 billion. This brings full year revenue to $3.75 billion, a 20% growth over 2011.

As I look back on 2012, I'm proud of our results. Our continued track record of market-leading revenue growth and stable margins fueled further reinvestment in the deepest clients relationships, the most robust portfolio of services, and the strongest pool of talent we've ever had.

We increased the number of strategic clients by 23 to 214, at the same time, raising the results of our annual third-party customer satisfaction survey to the highest level in four years. One mark of the strength of our client relationships is that we finished the year with 16 clients, each contributing more than $100 million in annual revenues. Nearly 19,000 net new associates joined our team while we maintained attrition rates that are amongst the lowest in our industry. We recorded the highest employee satisfaction survey results in our history and were recognized as one of the happiest places to work.

I'd now like to turn to our expected financial performance in 2013 and give you some color around the significant market opportunity we see ahead of us.

For the full year 2013, we expect to deliver at least $8.6 billion of revenue, which represents full year growth of at least 17%. Karen will provide you with full details of our expected 2013 financial performance shortly.

As we look to 2013, we see a market shift that is reaching a level of importance that I'd like to share with you. For several quarters, we've been speaking to you about the secular shifts in both the economy and with technology itself. These shifts are now forcing clients to reexamine how they operate, moving from nearly incremental levels of performance efficiency to building new digital business capabilities. For years, you have come to know us as helping our clients manage their businesses better, in helping them run their operations better, faster and cheaper.

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