UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended	~~March 31,~~June 30, 2022
☐	Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from to

Commission File Number 0-24429

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

(Exact Name of Registrant as Specified in Its Charter)


Delaware									13-3728359
(State or Other Jurisdiction of Incorporation or Organization)									(I.R.S. Employer Identification No.)

300 Frank W. Burr Blvd.

Teaneck, New Jersey 07666

(Address of Principal Executive Offices including Zip Code)

Registrant’s telephone number, including area code: (201) 801-0233

N/A

(Former Name, Former Address and Former Fiscal Year,

if Changed Since Last Report)

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: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No: ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No: ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of ~~April 29,~~July 22, 2022:


Class						Number of Shares
Class A Common Stock, par value $0.01 per share						~~521,173,838~~517,784,927

Table of Contents

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

TABLE OF CONTENTS


		Page
GLOSSARY		1

PART I.	FINANCIAL INFORMATION	2

Item 1.	Consolidated Financial Statements (Unaudited)	2

	Consolidated Statements of Financial Position (Unaudited) as of ~~March 31,~~June 30 , 2022 and December 31, 2021	2

	Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended ~~March 31~~June 30 , ~~202~~2 2022 and ~~202~~12021	3

	Consolidated Statements of Comprehensive Income (Unaudited) for the Three M and Six ~~onths~~ Months Ended ~~March 31~~June 30 , ~~202~~2 2022 and ~~202~~12021	4

	Consolidated Statements of Stockholders' Equity (Unaudited) for the Three Months Ended March 31, ~~202~~2 2022 and ~~202~~12021 and June 30, 2022 and 2021	5

	Consolidated Statements of Cash Flows (Unaudited) for the ~~Three~~Six Months Ended ~~March 31, 202~~2 June 30, 2022 and ~~202~~12021	6

	Notes to Consolidated Financial Statements (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3338

Item 4.	Controls and Procedures	3339

PART II.	OTHER INFORMATION	3440

Item 1.	Legal Proceedings	3440

Item 1A.	Risk Factors	3440

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3440

Item 6.	Exhibits	3541

SIGNATURES		3642

Table of ~~Contents~~Content s

GLOSSARY


Defined Term			Definition
10b5-1 Plan			Trading plan adopted pursuant to Rule 10b5-1 of the Exchange Act
Adjusted Diluted EPS			Adjusted Diluted Earnings Per Share
ASC			Accounting Standards Codification
ASR			Accelerated Stock Repurchase
CC			Constant Currency
CITA			Commissioner of Income Tax (Appeals)
~~Class Action Settlement Loss~~			~~Loss recorded in connection with the filing of a settlement agreement to resolve the consolidated putative securities class action against us and certain of our former officers~~
CMT			Communications, Media and Technology
COVID-19			The novel coronavirus disease
Credit Agreement			Credit agreement with a commercial bank syndicate, as amended
CTS India			Our principal operating subsidiary in India
DOJ			United States Department of Justice
DSO			Days Sales Outstanding
EPS			Earnings Per Share
ESG			Environmental, ~~social~~Social and ~~corporate governance~~Governance
EU			European Union
Exchange Act			Securities Exchange Act of 1934, as amended
GAAP			Generally Accepted Accounting Principles in the United States of America
High Court			Madras High Court
India Defined Contribution Obligation			Certain statutory defined contribution obligations of employees and employers in India
IoT			Internet of Things
ITD			Indian Income Tax Department
SCI			Supreme Court of India
SEC			United States Securities and Exchange Commission
Second Circuit			United States Court of Appeals for the Second Circuit
SG&A			Selling, general and administrative
Syntel			Syntel Sterling Best Shores Mauritius Ltd.
Tax Reform Act			Tax Cuts and Jobs Act
Term Loan			Unsecured term loan
~~Third Circuit~~ under the Credit Agreement			~~United States Court of Appeals for the Third Circuit~~
TriZetto			The TriZetto Group, Inc., now known as Cognizant Technology Software Group, Inc.
USDC-NJ			United States District Court for the District of New Jersey
USDC-SDNY			United States District Court for the Southern District of New York


Cognizant Technology Solutions			1			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

PART I. FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements (Unaudited).

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited)


(in millions, except par values)	(in millions, except par values)	March 31, 2022		December 31, 2021		(in millions, except par values)	June 30, 2022		December 31, 2021
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	2,192	$	1,792	Cash and cash equivalents	$	1,768	$	1,792
Short-term investments	Short-term investments	127		927		Short-term investments	552		927
Trade accounts receivable, net	Trade accounts receivable, net	3,663		3,557		Trade accounts receivable, net	3,785		3,557
Other current assets	Other current assets	1,095		1,066		Other current assets	918		1,066
Total current assets	Total current assets	7,077		7,342		Total current assets	7,023		7,342
Property and equipment, net	Property and equipment, net	1,171		1,171		Property and equipment, net	1,121		1,171
Operating lease assets, net	Operating lease assets, net	915		933		Operating lease assets, net	907		933
Goodwill	Goodwill	5,605		5,620		Goodwill	5,517		5,620
Intangible assets, net	Intangible assets, net	1,167		1,218		Intangible assets, net	1,101		1,218
Deferred income tax assets, net	Deferred income tax assets, net	333		404		Deferred income tax assets, net	473		404
Long-term investments	Long-term investments	458		463		Long-term investments	443		463
Other noncurrent assets	Other noncurrent assets	708		701		Other noncurrent assets	673		701
Total assets	Total assets	$	17,434	$	17,852	Total assets	$	17,258	$	17,852
Liabilities and Stockholders’ Equity	Liabilities and Stockholders’ Equity					Liabilities and Stockholders’ Equity
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	394	$	361	Accounts payable	$	357	$	361
Deferred revenue	Deferred revenue	455		403		Deferred revenue	408		403
Short-term debt	Short-term debt	38		38		Short-term debt	38		38
Operating lease liabilities	Operating lease liabilities	194		195		Operating lease liabilities	178		195
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	2,105		2,532		Accrued expenses and other current liabilities	2,172		2,532
Total current liabilities	Total current liabilities	3,186		3,529		Total current liabilities	3,153		3,529
Deferred revenue, noncurrent	Deferred revenue, noncurrent	23		40		Deferred revenue, noncurrent	24		40
Operating lease liabilities, noncurrent	Operating lease liabilities, noncurrent	758		783		Operating lease liabilities, noncurrent	747		783
Deferred income tax liabilities, net	Deferred income tax liabilities, net	213		218		Deferred income tax liabilities, net	207		218
Long-term debt	Long-term debt	617		626		Long-term debt	608		626
Long-term income taxes payable	Long-term income taxes payable	378		378		Long-term income taxes payable	283		378
Other noncurrent liabilities	Other noncurrent liabilities	286		287		Other noncurrent liabilities	286		287
Total liabilities	Total liabilities	5,461		5,861		Total liabilities	5,308		5,861
Commitments and contingencies (See Note 1 0)		0		0
Commitments and contingencies (See Note 10)						Commitments and contingencies (See Note 10)	0		0
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Preferred stock, $0.10 par value, 15 shares authorized, none issued	Preferred stock, $0.10 par value, 15 shares authorized, none issued	—		—		Preferred stock, $0.10 par value, 15 shares authorized, none issued	—		—
Class A common stock, $0.01 par value, 1,000 shares authorized, 521 and 525 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		5		5
Class A common stock, $0.01 par value, 1,000 shares authorized, 518 and 525 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively						Class A common stock, $0.01 par value, 1,000 shares authorized, 518 and 525 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively	5		5
Additional paid-in capital	Additional paid-in capital	31		27		Additional paid-in capital	21		27
Retained earnings	Retained earnings	11,956		11,922		Retained earnings	12,193		11,922
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(19)		37		Accumulated other comprehensive income (loss)	(269)		37
Total stockholders’ equity	Total stockholders’ equity	11,973		11,991		Total stockholders’ equity	11,950		11,991
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	17,434	$	17,852	Total liabilities and stockholders’ equity	$	17,258	$	17,852

The accompanying notes are an integral part of the unaudited consolidated financial statements.


Cognizant Technology Solutions			2			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


(in millions, except per share data)	(in millions, except per share data)	Three Months Ended March 31,				(in millions, except per share data)	Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021					2022		2021		2022		2021
Revenues	Revenues	$	4,826	$	4,401			Revenues	$	4,906	$	4,585	$	9,732	$	8,986
Operating expenses:	Operating expenses:							Operating expenses:
Cost of revenues (exclusive of depreciation and amortization expense shown separately below)	Cost of revenues (exclusive of depreciation and amortization expense shown separately below)	3,097		2,764				Cost of revenues (exclusive of depreciation and amortization expense shown separately below)	3,119		2,863		6,216		5,627
Selling, general and administrative expenses	Selling, general and administrative expenses	862		827				Selling, general and administrative expenses	883		881		1,745		1,708

Depreciation and amortization expense	Depreciation and amortization expense	143		141				Depreciation and amortization expense	144		145		287		286
Income from operations	Income from operations	724		669				Income from operations	760		696		1,484		1,365
Other income (expense), net:	Other income (expense), net:							Other income (expense), net:
Interest income	Interest income	6		9				Interest income	9		7		15		16
Interest expense	Interest expense	(2)		(2)				Interest expense	(3)		(2)		(5)		(4)
Foreign currency exchange gains (losses), net	Foreign currency exchange gains (losses), net	—		(9)				Foreign currency exchange gains (losses), net	(4)		(7)		(4)		(16)
Other, net	Other, net	1		(2)				Other, net	(1)		—		—		(2)
Total other income (expense), net	Total other income (expense), net	5		(4)				Total other income (expense), net	1		(2)		6		(6)
Income before provision for income taxes	Income before provision for income taxes	729		665				Income before provision for income taxes	761		694		1,490		1,359
Provision for income taxes	Provision for income taxes	(170)		(160)				Provision for income taxes	(184)		(184)		(354)		(344)
Income (loss) from equity method investments	Income (loss) from equity method investments	4		—				Income (loss) from equity method investments	—		2		4		2
Net income	Net income	$	563	$	505			Net income	$	577	$	512	$	1,140	$	1,017
Basic earnings per share	Basic earnings per share	$	1.07	$	0.95			Basic earnings per share	$	1.11	$	0.97	$	2.18	$	1.93
Diluted earnings per share	Diluted earnings per share	$	1.07	$	0.95			Diluted earnings per share	$	1.11	$	0.97	$	2.18	$	1.92
Weighted average number of common shares outstanding - Basic	Weighted average number of common shares outstanding - Basic	524		530				Weighted average number of common shares outstanding - Basic	520		527		522		528
Dilutive effect of shares issuable under stock-based compensation plans	Dilutive effect of shares issuable under stock-based compensation plans	1		1				Dilutive effect of shares issuable under stock-based compensation plans	1		1		1		1
Weighted average number of common shares outstanding - Diluted	Weighted average number of common shares outstanding - Diluted	525		531				Weighted average number of common shares outstanding - Diluted	521		528		523		529

The accompanying notes are an integral part of the unaudited consolidated financial statements.


Cognizant Technology Solutions			3			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


(in millions)	(in millions)	Three Months Ended March 31,				(in millions)	Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021					2022		2021		2022		2021
Net income	Net income	$	563	$	505			Net income	$	577	$	512	$	1,140	$	1,017
Change in Accumulated other comprehensive income (loss), net of tax:	Change in Accumulated other comprehensive income (loss), net of tax:							Change in Accumulated other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	Foreign currency translation adjustments	(37)		(25)				Foreign currency translation adjustments	(193)		14		(230)		(11)
Unrealized gains and losses on cash flow hedges	Unrealized gains and losses on cash flow hedges	(19)		(4)				Unrealized gains and losses on cash flow hedges	(57)		(13)		(76)		(17)

Other comprehensive income (loss)	Other comprehensive income (loss)	(56)		(29)				Other comprehensive income (loss)	(250)		1		(306)		(28)
Comprehensive income	Comprehensive income	$	507	$	476			Comprehensive income	$	327	$	513	$	834	$	989

The accompanying notes are an integral part of the unaudited consolidated financial statements.


Cognizant Technology Solutions			4			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)


(in millions)	(in millions)	Class A Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total		(in millions)	Class A Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
		Shares	Amount											Shares	Amount
Balance, December 31, 2021	Balance, December 31, 2021	525	$	5	$	27	$	11,922	$	37	$	11,991	Balance, December 31, 2021	525	$	5	$	27	$	11,922	$	37	$	11,991
Net income	Net income	—	—		—		563		—		563		Net income	—	—		—		563		—		563
Other comprehensive income (loss)	Other comprehensive income (loss)	—	—		—		—		(56)		(56)		Other comprehensive income (loss)	—	—		—		—		(56)		(56)
Common stock issued, stock-based compensation plans	Common stock issued, stock-based compensation plans	1	—		31		—		—		31		Common stock issued, stock-based compensation plans	1	—		31		—		—		31
Stock-based compensation expense	Stock-based compensation expense	—	—		56		—		—		56		Stock-based compensation expense	—	—		56		—		—		56
Repurchases of common stock	Repurchases of common stock	(5)	—		(83)		(387)		—		(470)		Repurchases of common stock	(5)	—		(83)		(387)		—		(470)
Dividends declared, $0.27 per share	Dividends declared, $0.27 per share	—	—		—		(142)		—		(142)		Dividends declared, $0.27 per share	—	—		—		(142)		—		(142)
Balance, March 31, 2022	Balance, March 31, 2022	521	$	5	$	31	$	11,956	$	(19)	$	11,973	Balance, March 31, 2022	521	5		31		11,956		(19)		11,973
Net income													Net income	—	—		—		577		—		577
Other comprehensive income (loss)													Other comprehensive income (loss)	—	—		—		—		(250)		(250)
Common stock issued, stock-based compensation plans													Common stock issued, stock-based compensation plans	1	—		21		—		—		21
Stock-based compensation expense													Stock-based compensation expense	—	—		89		—		—		89
Repurchases of common stock													Repurchases of common stock	(4)	—		(120)		(198)		—		(318)
Dividends declared, $0.27 per share													Dividends declared, $0.27 per share	—	—		—		(142)		—		(142)
Balance, June 30, 2022													Balance, June 30, 2022	518	$	5	$	21	$	12,193	$	(269)	$	11,950


(in millions)	(in millions)	Class A Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total		(in millions)	Class A Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total
		Shares	Amount											Shares	Amount
Balance, December 31, 2020	Balance, December 31, 2020	530	$	5	$	32	$	10,689	$	110	$	10,836	Balance, December 31, 2020	530	$	5	$	32	$	10,689	$	110	$	10,836
Net income	Net income	—	—		—		505		—		505		Net income	—	—		—		505		—		505
Other comprehensive income (loss)	Other comprehensive income (loss)	—	—		—		—		(29)		(29)		Other comprehensive income (loss)	—	—		—		—		(29)		(29)
Common stock issued, stock-based compensation plans	Common stock issued, stock-based compensation plans	1	—		43		—		—		43		Common stock issued, stock-based compensation plans	1	—		43		—		—		43
Stock-based compensation expense	Stock-based compensation expense	—	—		62		—		—		62		Stock-based compensation expense	—	—		62		—		—		62
Repurchases of common stock	Repurchases of common stock	(3)	—		(93)		(159)		—		(252)		Repurchases of common stock	(3)	—		(93)		(159)		—		(252)
Dividends declared, $0.24 per share	Dividends declared, $0.24 per share	—	—		—		(128)		—		(128)		Dividends declared, $0.24 per share	—	—		—		(128)		—		(128)
Balance, March 31, 2021	Balance, March 31, 2021	528	$	5	$	44	$	10,907	$	81	$	11,037	Balance, March 31, 2021	528	5		44		10,907		81		11,037
Net income													Net income	—	—		—		512		—		512
Other comprehensive income (loss)													Other comprehensive income (loss)	—	—		—		—		1		1
Common stock issued, stock-based compensation plans													Common stock issued, stock-based compensation plans	1	—		32		—		—		32
Stock-based compensation expense													Stock-based compensation expense	—	—		67		—		—		67
Repurchases of common stock													Repurchases of common stock	(4)	—		(111)		(205)		—		(316)
Dividends declared, $0.24 per share													Dividends declared, $0.24 per share	—	—		—		(128)		—		(128)
Balance, June 30, 2021													Balance, June 30, 2021	525	$	5	$	32	$	11,086	$	82	$	11,205

The accompanying notes are an integral part of the unaudited consolidated financial statements.


Cognizant Technology Solutions			5			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


(in millions)	(in millions)	For the Three Months Ended March 31,				(in millions)	For the Six Months Ended June 30,
		2022		2021			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	563	$	505	Net income	$	1,140	$	1,017
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	143		141		Depreciation and amortization	287		286

Deferred income taxes	Deferred income taxes	70		122		Deferred income taxes	(74)		119
Stock-based compensation expense	Stock-based compensation expense	56		62		Stock-based compensation expense	145		129

Other	Other	27		—		Other	51		(2)
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Trade accounts receivable	Trade accounts receivable	(117)		(131)		Trade accounts receivable	(251)		(279)
Other current and noncurrent assets	Other current and noncurrent assets	(73)		(36)		Other current and noncurrent assets	131		60
Accounts payable	Accounts payable	35		61		Accounts payable	(9)		17
Deferred revenues, current and noncurrent	Deferred revenues, current and noncurrent	36		15		Deferred revenues, current and noncurrent	(8)		(34)
Other current and noncurrent liabilities	Other current and noncurrent liabilities	(434)		(558)		Other current and noncurrent liabilities	(578)		(591)
Net cash provided by operating activities	Net cash provided by operating activities	306		181		Net cash provided by operating activities	834		722
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchases of property and equipment	Purchases of property and equipment	(120)		(88)		Purchases of property and equipment	(163)		(163)
Purchases of available-for-sale investment securities	Purchases of available-for-sale investment securities	(65)		—		Purchases of available-for-sale investment securities	(513)		(105)
Proceeds from maturity or sale of available-for-sale investment securities	Proceeds from maturity or sale of available-for-sale investment securities	310		—		Proceeds from maturity or sale of available-for-sale investment securities	375		—
Purchases of held-to-maturity investment securities	Purchases of held-to-maturity investment securities	(16)		(82)		Purchases of held-to-maturity investment securities	(32)		(89)
Proceeds from maturity of held-to-maturity investment securities	Proceeds from maturity of held-to-maturity investment securities	20		62		Proceeds from maturity of held-to-maturity investment securities	30		76
Purchases of other investments	Purchases of other investments	(39)		(150)		Purchases of other investments	(256)		(642)
Proceeds from maturity or sale of other investments	Proceeds from maturity or sale of other investments	591		30		Proceeds from maturity or sale of other investments	769		322
Proceeds from sales of businesses	Proceeds from sales of businesses	19		—		Proceeds from sales of businesses	19		—
Payments for business combinations, net of cash acquired	Payments for business combinations, net of cash acquired	—		(310)		Payments for business combinations, net of cash acquired	—		(658)
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	700		(538)		Net cash provided by (used in) investing activities	229		(1,259)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Issuance of common stock under stock-based compensation plans	Issuance of common stock under stock-based compensation plans	31		43		Issuance of common stock under stock-based compensation plans	52		75

Repurchases of common stock	Repurchases of common stock	(474)		(240)		Repurchases of common stock	(792)		(560)
Repayment of Term Loan borrowings and finance lease and earnout obligations	Repayment of Term Loan borrowings and finance lease and earnout obligations	(14)		(15)		Repayment of Term Loan borrowings and finance lease and earnout obligations	(26)		(28)

Dividends paid	Dividends paid	(143)		(128)		Dividends paid	(284)		(255)
Net cash (used in) financing activities	Net cash (used in) financing activities	(600)		(340)		Net cash (used in) financing activities	(1,050)		(768)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(6)		(10)		Effect of exchange rate changes on cash and cash equivalents	(37)		(7)
Increase (decrease) in cash and cash equivalents		400		(707)
(Decrease) in cash and cash equivalents						(Decrease) in cash and cash equivalents	(24)		(1,312)
Cash and cash equivalents, beginning of year	Cash and cash equivalents, beginning of year	1,792		2,680		Cash and cash equivalents, beginning of year	1,792		2,680
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	2,192	$	1,973	Cash and cash equivalents, end of period	$	1,768	$	1,368

The accompanying notes are an integral part of the unaudited consolidated financial statements.


Cognizant Technology Solutions			6			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — Interim Consolidated Financial Statements

The terms “Cognizant,” “we,” “our,” “us” and “the Company” refer to Cognizant Technology Solutions Corporation and its subsidiaries unless the context indicates otherwise. We have prepared the accompanying unaudited consolidated financial statements included herein in accordance with GAAP and the Exchange Act. The accompanying unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) included in our Annual Report on Form 10-K for the year ended December 31, 2021. In our opinion, all adjustments considered necessary for a fair statement of the accompanying unaudited consolidated financial statements have been included and all adjustments are of a normal and recurring nature. Operating results for the interim periods are not necessarily indicative of results that may be expected to occur for the entire year.

Note 2 — Revenues and Trade Accounts Receivable

Disaggregation of Revenues

The tables below present disaggregated revenues from contracts with clients by client location, service line and contract type for each of the business segments. We believe this disaggregation best depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected by industry, market and other economic factors. Our consulting and technology services include consulting, application development, systems integration, and application testing services as well as software solutions and related services while our outsourcing services include application maintenance, infrastructure and business process services. Revenues are attributed to geographic regions based upon client location, which is the client's billing address. Substantially all revenues in the North America region relate to clients in the United States.

Three Months Ended
March 31, 2022
(in millions) Financial Services Healthcare Products and Resources Communications, Media and Technology Total
Revenues
Geography:
North America $ 1,080 $ 1,195 $ 761 $ 533 $ 3,569
United Kingdom 151 44 132 126 453
Continental Europe 157 120 145 37 459
Europe - Total 308 164 277 163 912
Rest of World 140 33 92 80 345
Total $ 1,528 $ 1,392 $ 1,130 $ 776 $ 4,826
Service line:
Consulting and technology services $ 1,057 $ 804 $ 754 $ 448 $ 3,063
Outsourcing services 471 588 376 328 1,763
Total $ 1,528 $ 1,392 $ 1,130 $ 776 $ 4,826
Type of contract:
Time and materials $ 890 $ 494 $ 467 $ 448 $ 2,299
Fixed-price 557 618 572 292 2,039
Transaction or volume-based 81 280 91 36 488
Total $ 1,528 $ 1,392 $ 1,130 $ 776 $ 4,826

We have defined our Financial Services, Health Sciences (previously referred to as Healthcare), Products and Resources and Communications, Media and Technology segments as ("FS"), ("HS"), ("P&R"), and ("CMT"), respectively, in our disaggregation of revenues tables.


	Three Months Ended June 30, 2022										Six Months Ended June 30, 2022

(in millions)	FS		HS		P&R		CMT		Total		FS		HS		P&R		CMT		Total
Revenues
Geography:
North America	$	1,104	$	1,210	$	770	$	572	$	3,656	$	2,184	$	2,405	$	1,531	$	1,105	$	7,225
United Kingdom	147		44		134		133		458		298		88		266		259		911
Continental Europe	143		126		143		33		445		300		246		288		70		904
Europe - Total	290		170		277		166		903		598		334		554		329		1,815
Rest of World	148		28		93		78		347		288		61		185		158		692
Total	$	1,542	$	1,408	$	1,140	$	816	$	4,906	$	3,070	$	2,800	$	2,270	$	1,592	$	9,732

Service line:
Consulting and technology services	$	1,078	$	805	$	753	$	465	$	3,101	$	2,135	$	1,609	$	1,507	$	913	$	6,164
Outsourcing services	464		603		387		351		1,805		935		1,191		763		679		3,568
Total	$	1,542	$	1,408	$	1,140	$	816	$	4,906	$	3,070	$	2,800	$	2,270	$	1,592	$	9,732

Type of contract:
Time and materials	$	894	$	505	$	471	$	471	$	2,341	$	1,784	$	999	$	938	$	919	$	4,640
Fixed-price	578		617		581		309		2,085		1,135		1,235		1,153		601		4,124
Transaction or volume-based	70		286		88		36		480		151		566		179		72		968
Total	$	1,542	$	1,408	$	1,140	$	816	$	4,906	$	3,070	$	2,800	$	2,270	$	1,592	$	9,732


Cognizant Technology Solutions			7			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s


		Three Months Ended March 31, 2021											Three Months Ended June 30, 2021							Six Months Ended June 30, 2021
												Three Months Ended June 30, 2021							Six Months Ended June 30, 2021
(in millions)	(in millions)	Financial Services		Healthcare		Products and Resources		Communications, Media and Technology		Total				(in millions)		FS	HS					P&R			CMT			Total			FS			HS			P&R			CMT			Total
Revenues	Revenues														Revenues
Geography:	Geography:														Geography:
North America	North America	$	1,013	$	1,101	$	718	$	451	$	3,283				North America		$	1,049		$	1,131		$	723		$	469		$	3,372		$	2,062		$	2,232		$	1,441		$	920		$	6,655
United Kingdom	United Kingdom	125		40		106		99		370					United Kingdom		130			45			116			112			403			255			85			222			211			773
Continental Europe	Continental Europe	192		118		103		43		456					Continental Europe		186			120			132			44			482			378			238			235			87			938
Europe - Total	Europe - Total	317		158		209		142		826					Europe - Total		316			165			248			156			885			633			323			457			298			1,711
Rest of World	Rest of World	128		29		71		64		292					Rest of World		137			29			84			78			328			265			58			155			142			620
Total	Total	$	1,458	$	1,288	$	998	$	657	$	4,401				Total		$	1,502		$	1,325		$	1,055		$	703		$	4,585		$	2,960		$	2,613		$	2,053		$	1,360		$	8,986

Service line:	Service line:														Service line:
Consulting and technology services	Consulting and technology services	$	967	$	745	$	616	$	396	$	2,724				Consulting and technology services		$	1,012		$	769		$	668		$	422		$	2,871		$	1,979		$	1,514		$	1,284		$	818		$	5,595
Outsourcing services	Outsourcing services	491		543		382		261		1,677					Outsourcing services		490			556			387			281			1,714			981			1,099			769			542			3,391
Total	Total	$	1,458	$	1,288	$	998	$	657	$	4,401				Total		$	1,502		$	1,325		$	1,055		$	703		$	4,585		$	2,960		$	2,613		$	2,053		$	1,360		$	8,986

Type of contract:	Type of contract:														Type of contract:
Time and materials	Time and materials	$	899	$	519	$	418	$	397	$	2,233				Time and materials		$	908		$	514		$	446		$	422		$	2,290		$	1,807		$	1,033		$	864		$	819		$	4,523
Fixed-price	Fixed-price	471		499		481		230		1,681					Fixed-price		500			529			506			249			1,784			971			1,028			987			479			3,465
Transaction or volume-based	Transaction or volume-based	88		270		99		30		487					Transaction or volume-based		94			282			103			32			511			182			552			202			62			998
Total	Total	$	1,458	$	1,288	$	998	$	657	$	4,401				Total		$	1,502		$	1,325		$	1,055		$	703		$	4,585		$	2,960		$	2,613		$	2,053		$	1,360		$	8,986

Costs to Fulfill

Costs to fulfill, such as setup or transition activities, are recorded in "Other noncurrent assets" in our unaudited consolidated statements of financial position and the amortization expense of costs to fulfill is included in "Cost of revenues" in our unaudited consolidated statements of operations. Costs to obtain contracts were immaterial for the periods disclosed. The following table presents information related to the capitalized costs to fulfill for the ~~three~~six months ended ~~March 31:~~June 30:


(in millions)	(in millions)	2022		2021		(in millions)	2022		2021
Beginning balance	Beginning balance	$	394	$	467	Beginning balance	$	394	$	467
Costs capitalized	Costs capitalized	12		14		Costs capitalized	19		25
Amortization expense	Amortization expense	(27)		(29)		Amortization expense	(55)		(58)
Impairment charge	Impairment charge	—		(9)		Impairment charge	—		(9)
Ending balance	Ending balance	$	379	$	443	Ending balance	$	358	$	425

Contract Balances

A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets are presented in "Other current assets" in our unaudited consolidated statements of financial position and primarily relate to unbilled amounts on fixed-price contracts utilizing the cost-to-cost method of revenue recognition. The table below shows ~~significant~~ movements in contract assets for the ~~three~~six months ended ~~March 31:~~June 30:


(in millions)	(in millions)	2022		2021		(in millions)	2022		2021
Beginning balance	Beginning balance	$	310	$	315	Beginning balance	$	310	$	315
Revenues recognized during the period but not billed	Revenues recognized during the period but not billed	259		183		Revenues recognized during the period but not billed	318		266
Amounts reclassified to trade accounts receivable	Amounts reclassified to trade accounts receivable	(202)		(162)		Amounts reclassified to trade accounts receivable	(243)		(229)

Effect of foreign currency exchange movements						Effect of foreign currency exchange movements	(7)		—
Ending balance	Ending balance	$	367	$	336	Ending balance	$	378	$	352


Cognizant Technology Solutions			8			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

Contract liabilities, or deferred revenue, consist of advance payments and billings in excess of revenues recognized. The table below shows ~~significant~~ movements in the deferred revenue balances (current and noncurrent) for the ~~three~~six months ended ~~March 31:~~June 30:


(in millions)	(in millions)	2022		2021		(in millions)	2022		2021
Beginning balance	Beginning balance	$	443	$	419	Beginning balance	$	443	$	419
Amounts billed but not recognized as revenues	Amounts billed but not recognized as revenues	396		341		Amounts billed but not recognized as revenues	385		327
Revenues recognized related to the beginning balance of deferred revenue	Revenues recognized related to the beginning balance of deferred revenue	(361)		(325)		Revenues recognized related to the beginning balance of deferred revenue	(388)		(357)

Effect of foreign currency exchange movements						Effect of foreign currency exchange movements	(8)		—
Ending balance	Ending balance	$	478	$	435	Ending balance	$	432	$	389

Revenues recognized during the ~~three~~six months ended ~~March 31,~~June 30, 2022 for performance obligations satisfied or partially satisfied in previous periods were immaterial.

Remaining Performance Obligations

As of ~~March 31,~~June 30, 2022, the aggregate amount of transaction price allocated to remaining performance obligations was ~~$1,720~~$1,605 million, of which approximately 85% is expected to be recognized as revenues within 2 ye~~ars~~.years. Disclosure is not required for performance obligations that meet any of the following criteria:

(1)contracts with a duration of one year or less as determined under ASC Topic 606: "Revenue from Contracts with Customers",

(2)contracts for which we recognize revenues based on the right to invoice for services performed,

(3)variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a distinct good or service that forms part of a single performance obligation in accordance with ASC 606-10-25-14(b), for which the criteria in ASC 606-10-32-40 have been met, or

(4)variable consideration in the form of a sales-based or usage-based royalty promised in exchange for a license of intellectual property.

Many of our performance obligations meet one or more of these exemptions and therefore are not included in the remaining performance obligation amount disclosed above.

Trade Accounts Receivable and Allowance for Credit Losses

We calculate expected credit losses for trade accounts receivable based on historical credit loss rates for each aging category as adjusted for the current market conditions and forecasts about future economic conditions. The following table presents the activity in the allowance for credit losses for trade accounts receivable for the ~~three~~six months ended ~~March 31:~~June 30:


(in millions)	(in millions)	2022		2021		(in millions)	2022		2021
Beginning balance	Beginning balance	$	50	$	57	Beginning balance	$	50	$	57
Credit loss expense (income)	Credit loss expense (income)	9		(5)		Credit loss expense (income)	—		1
Write-offs charged against the allowance	Write-offs charged against the allowance	(2)		(6)		Write-offs charged against the allowance	(7)		(9)

Ending balance	Ending balance	$	57	$	46	Ending balance	$	43	$	49


Cognizant Technology Solutions			9			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

Note 3 — Investments

Our investments were as follows:


(in millions)	(in millions)	March 31, 2022		December 31, 2021		(in millions)	June 30, 2022		December 31, 2021
Short-term investments:	Short-term investments:					Short-term investments:
Equity investment security	Equity investment security	$	26	$	26	Equity investment security	$	26	$	26
Available-for-sale investment securities	Available-for-sale investment securities	65		310		Available-for-sale investment securities	448		310
Held-to-maturity investment securities	Held-to-maturity investment securities	33		37		Held-to-maturity investment securities	38		37
Time deposits	Time deposits	3		554		Time deposits	40		554
Total short-term investments	Total short-term investments	$	127	$	927	Total short-term investments	$	552	$	927


Long-term investments:	Long-term investments:					Long-term investments:
Other investments	Other investments	$	69	$	66	Other investments	$	68	$	66
Restricted time deposits(1)	Restricted time deposits(1)	389		397		Restricted time deposits(1)	375		397
Total long-term investments	Total long-term investments	$	458	$	463	Total long-term investments	$	443	$	463

(1)See Note 6.

Equity Investment Security

Our equity investment security is a U.S. dollar denominated investment in a fixed income mutual fund. Realized and unrealized gains and losses were immaterial for the three and six months ended ~~March 31,~~June 30, 2022 and 2021.

Available-for-Sale Investment Securities

Our available-for-sale investment securities consist of highly rated U.S. dollar denominated investments in certificates of deposit and commercial paper maturing within one year. As of ~~March 31,~~June 30, 2022, the amortized cost and fair value of the available-for-sale investments were ~~$65~~$448 million. As of December 31, 2021, the amortized cost and fair value of the available-for-sale investments were $310 million. Unrealized ~~gains and~~ losses were immaterial as of ~~March 31,~~June 30, 2022 and December 31, 2021. There were no realized gains or losses related to the available-for-sale investment securities during the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021. There were no sales of available-for sale investment securities during the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021.

Held-to-Maturity Investment Securities

Our held-to-maturity investment securities consist of Indian rupee denominated investments in commercial paper and international corporate bonds. The basis for the measurement of fair value of the held-to-maturity investment securities is Level 2 in the fair value hierarchy.

The amortized cost and fair value of held-to-maturity investment securities were as follows:


		March 31, 2022		December 31, 2021			June 30, 2022						December 31, 2021
(in millions)	(in millions)	Amortized Cost			Fair Value			Amortized Cost		Fair Value		(in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Short-term investments, maturing within one year:	Short-term investments, maturing within one year:											Short-term investments, maturing within one year:
Corporate debt securities	Corporate debt securities	$	17		$	17		$	17	$	17	Corporate debt securities	$	19	$	19	$	17	$	17
Commercial paper	Commercial paper	16			16			20		20		Commercial paper	19		19		20		20
Total held-to-maturity investments	Total held-to-maturity investments	$	33		$	33		$	37	$	37	Total held-to-maturity investments	$	38	$	38	$	37	$	37

As of ~~March 31,~~June 30, 2022, ~~$10~~$12 million of corporate debt securities and $9$16 million of commercial paper were in an unrealized loss position. The total unrealized loss was less than $1 million and none of the securities had been in an unrealized loss position for longer than 12 months. As of December 31, 2021, ~~$17~~$17 million of corporate debt securities and $10 million of commercial paper were in an unrealized loss position. The total unrealized loss was less than $1 million and none of the securities had been in an unrealized loss position for longer than 12 months.

The securities in our portfolio are highly rated and short-term in nature. As of ~~March 31,~~June 30, 2022, the corporate debt securities were rated AA+ or better and the commercial paper securities were rated A-1+ bby C~~y CRISIL,~~RISIL, an Indian subsidiary of S&P Global.


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

Table of ~~Contents~~Content s

Other Investments

As of ~~March 31,~~June 30, 2022 and December 31, 2021, we had equity method investments of ~~$67~~$66 million and $63 million, respectively, primarily related to an investment in the technology sector. As of ~~March 31,~~June 30, 2022 and December 31, 2021, we had equity securities without a readily determinable fair value of $2 million and $3 million, respectively.

Note 4 — Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities were as follows:
(in millions) March 31, 2022 December 31, 2021
Compensation and benefits $ 1,233 $ 1,601
Customer volume and other incentives 271 242
Income taxes 57 74
Professional fees 190 220
Other 354 395
Total accrued expenses and other current liabilities $ 2,105 $ 2,532


(in millions)	June 30, 2022		December 31, 2021
Compensation and benefits	$	1,277	$	1,601
Customer volume and other incentives	279		242

Income taxes	126		74
Professional fees	175		220
Other	315		395
Total accrued expenses and other current liabilities	$	2,172	$	2,532

Note 5 — Debt

In 2018, we entered into the Credit Agreement providing for the $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.

The Credit Agreement requires interest to be paid, at our option, at either the ABR, the Eurocurrency Rate or the Daily Simple RFR (each as defined in the Credit Agreement), plus, in each case, an Applicable Margin (as defined in the Credit Agreement). Initially, the Applicable Margin is 0.875% with respect to Eurocurrency Rate and Daily Simple RFR and 0.00% with respect to ABR loans. Subsequently, the Applicable Margin with respect to Eurocurrency Rate and Daily Simple RFR may range from 0.75% to 1.125%, depending on our public debt ratings (or, if we have not received public debt ratings, from 0.875% to 1.125%, depending on our Leverage Ratio, which is the ratio of indebtedness for borrowed money to Consolidated EBITDA, as defined in the Credit Agreement). The Term Loan is a Eurocurrency Rate Loan.

The Credit Agreement contains customary affirmative and negative covenants as well as a financial covenant. We were in compliance with all debt covenants and representations of the Credit Agreement as of ~~March 31,~~June 30, 2022.

In March 2022, our India subsidiary renewed its 13 billion Indian rupee ($~~171~~165 million at the ~~March 31,~~June 30, 2022 exchange rate) working capital facility, which requires us to repay any balances within 90 days from the date of disbursement. There is a 1.0% prepayment penalty applicable to payments made within 30 days of disbursement. This working capital facility contains affirmative and negative covenants and may be renewed annually. As of ~~March 31,~~June 30, 2022, we have not borrowed funds under this facility.

Short-term Debt

As of both ~~March 31,~~June 30, 2022 and December 31, 2021, we had $38 million of short-term debt related to current maturities of the Term Loan.

Long-term Debt

The following table summarizes the long-term debt balances as of:


(in millions)	June 30, 2022		December 31, 2021

Term Loan	$	647	$	666
Less:
Current maturities	(38)		(38)
Deferred financing costs	(1)		(2)
Long-term debt, net of current maturities	$	608	$	626

The carrying value of our debt approximated its fair value as of June 30, 2022 and December 31, 2021.


Cognizant Technology Solutions			11			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

~~Long-term Debt~~

~~The following summarizes the long-term debt balances as of:~~

(in millions) March 31, 2022 December 31, 2021
Term Loan $ 656 $ 666
Less:
Current maturities (38) (38)
Deferred financing costs (1) (2)
Long-term debt, net of current maturities $ 617 $ 626

~~The carrying value of our debt approximated its fair value as of March 31, 2022 and December 31, 2021.~~

Note 6 — Income Taxes

Our effective income tax rates were as follows:

Three Months Ended
March 31,
2022 2021
Effective income tax rate 23.3 % 24.1 %


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Effective income tax rate	24.2	%	26.5	%	23.8	%	25.3	%

We are involved in two separate ongoing disputes with the ITD in connection with previously disclosed share repurchase transactions undertaken by CTS India in 2013 and 2016 to repurchase shares from its shareholders (non-Indian Cognizant entities) valued at $523 million and $2.8 billion, respectively.

The 2016 transaction was undertaken pursuant to a plan approved by the High Court in Chennai, India, and resulted in the payment of $135 million in Indian income taxes - an amount we believe includes all the applicable taxes owed for this transaction under Indian law. In March 2018, the ITD asserted that it is owed an additional 33 billion Indian rupees ($~~435~~418 million at the ~~March 31,~~June 30, 2022 exchange rate) on the 2016 transaction. We deposited 5 billion Indian rupees, representing 15% of the disputed tax amount related to the 2016 transaction, with the ITD. As of ~~March 31,~~June 30, 2022 and December 31, 2021, the deposit with the ITD was ~~$65~~$63 million and $67 million, respectively, presented in "Other noncurrent assets". Additionally, certain time deposits of CTS India were placed under lien in favor of the ITD, representing the remainder of the disputed tax amount. As of ~~March 31,~~June 30, 2022 and December 31, 2021, the balance of deposits under lien was 30 billion Indian rupees, including previously earned interest, or ~~$389~~$375 million and $397 million, respectively, as presented in "Long-term investments". The dispute in relation to the 2013 share repurchase transaction is also in litigation. At this time, the ITD has not made specific demands with regards to this transaction.

In April 2020, we received a formal assessment from the ITD on the 2016 transaction, which is consistent with its previous assertions. In June 2020, we filed an appeal against this assessment to the CITA. In March 2022, we received a negative decision from the CITA.

We continue to believe we have paid all applicable taxes owed on both the 2016 and the 2013 transactions and we continue to defend our positions with respect to both matters. Accordingly, we have not recorded any reserves for these matters as of ~~March 31,~~June 30, 2022.

Note 7 — Derivative Financial Instruments

In the normal course of business, we use foreign exchange forward and option contracts to manage foreign currency exchange rate risk. Derivatives may give rise to credit risk from the possible non-performance by counterparties. Credit risk is limited to the fair value of those contracts that are favorable to us. We have limited our credit risk by limiting the amount of credit exposure with any one financial institution and conducting ongoing evaluation of the creditworthiness of the financial institutions with which we do business. In addition, all the assets and liabilities related to the foreign exchange derivative contracts set forth in the below table are subject to master netting arrangements, such as the International Swaps and Derivatives Association Master Agreement, with each individual counterparty. These master netting arrangements generally provide for net settlement of all outstanding contracts with the counterparty in the case of an event of default or a termination event. We have presented all the assets and liabilities related to the foreign exchange derivative contracts, as applicable, on a gross basis, with no offsets, in our unaudited consolidated statements of financial position. There is no financial collateral (including cash collateral) posted or received by us related to the foreign exchange derivative contracts.


Cognizant Technology Solutions			12			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

The following table provides information on the location and fair values of derivative financial instruments included in our unaudited consolidated statements of financial position as of:


(in millions)	(in millions)		March 31, 2022				December 31, 2021				(in millions)		June 30, 2022				December 31, 2021
Designation of Derivatives	Designation of Derivatives	Location on Statement of Financial Position	Assets		Liabilities		Assets		Liabilities		Designation of Derivatives	Location on Statement of Financial Position	Assets		Liabilities		Assets		Liabilities
Foreign exchange forward and option contracts – Designated as cash flow hedging instruments	Foreign exchange forward and option contracts – Designated as cash flow hedging instruments	Other current assets	$	34	$	—	$	51	$	—	Foreign exchange forward and option contracts – Designated as cash flow hedging instruments	Other current assets	$	6	$	—	$	51	$	—
		Other noncurrent assets	11		—		15		—			Other noncurrent assets	—		—		15		—
		Accrued expenses and other current liabilities	—		1		—		—			Accrued expenses and other current liabilities	—		21		—		—
		Other noncurrent liabilities	—		1		—		—			Other noncurrent liabilities	—		10		—		—
		Total	45		2		66		—			Total	6		31		66		—
Foreign exchange forward contracts – Not designated as hedging instruments	Foreign exchange forward contracts – Not designated as hedging instruments	Other current assets	3		—		3		—		Foreign exchange forward contracts – Not designated as hedging instruments	Other current assets	3		—		3		—
		Accrued expenses and other current liabilities	—		3		—		7			Accrued expenses and other current liabilities	—		—		—		7
		Total	3		3		3		7			Total	3		—		3		7
Total	Total		$	48	$	5	$	69	$	7	Total		$	9	$	31	$	69	$	7

Cash Flow Hedges

We have entered into a series of foreign exchange derivative contracts that are designated as cash flow hedges of Indian rupee denominated payments in India. These contracts are intended to partially offset the impact of movement of the Indian rupee against the U.S. dollar on future operating costs and are scheduled to mature each month during the remainder of 2022, 2023 and the first ~~three~~six months of 2024. The changes in fair value of these contracts are initially reported in "Accumulated other comprehensive income (loss)" in our unaudited consolidated statements of financial position and are subsequently reclassified to earnings within "Cost of revenues" and "Selling, general and administrative expenses" in our unaudited consolidated statements of operations in the same period that the forecasted Indian rupee denominated payments are recorded in earnings. As of ~~March 31,~~June 30, 2022, we estimate that $3011 million, net of tax, of net ~~gains~~losses related to derivatives designated as cash flow hedges reported in "Accumulated other comprehensive income (loss)" in our unaudited consolidated statements of financial position is expected to be reclassified into earnings within the next 12 months.

The notional value of the outstanding contracts by year of maturity was as follows:


(in millions)	(in millions)	March 31, 2022		December 31, 2021		(in millions)	June 30, 2022		December 31, 2021
2022	2022	$	1,390	$	1,643	2022	$	1,038	$	1,643
2023	2023	1,110		880		2023	1,380		880
2024	2024	175		—		2024	395		—
Total notional value of contracts outstanding (1)	Total notional value of contracts outstanding (1)	$	2,675	$	2,523	Total notional value of contracts outstanding (1)	$	2,813	$	2,523

(1)Includes ~~$53~~$8 million and $78 million notional value of option contracts as of ~~March 31,~~June 30, 2022 and December 31, 2021, respectively, with the remaining notional value related to forward contracts.


Cognizant Technology Solutions			13			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

The following table provides information on the location and amounts of pre-tax gains and losses on our cash flow hedges for the three months ended ~~March 31:~~June 30:


(in millions)	(in millions)	Change in Derivative Gains Recognized in Accumulated Other Comprehensive Income (Loss) (effective portion)				Location of Net Gains Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (effective portion)	Net Gains Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (effective portion)				(in millions)	Change in Derivative Gains and Losses Recognized in Accumulated Other Comprehensive Income (Loss) (effective portion)				Location of Net Gains Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (effective portion)	Net Gains Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (effective portion)
		2022		2021			2022		2021			2022		2021			2022		2021
Foreign exchange forward and option contracts – Designated as cash flow hedging instruments	Foreign exchange forward and option contracts – Designated as cash flow hedging instruments	$	(10)	$	17	Cost of revenues	$	12	$	18	Foreign exchange forward and option contracts – Designated as cash flow hedging instruments	$	(66)	$	(3)	Cost of revenues	$	5	$	12
						SG&A expenses	1		3							SG&A expenses	1		2
						Total	$	13	$	21						Total	$	6	$	14

The following table provides information on the location and amounts of pre-tax gains and losses on our cash flow hedges for the six months ended June 30:


(in millions)	Change in Derivative Gains and Losses Recognized in Accumulated Other Comprehensive Income (Loss) (effective portion)				Location of Net Gains Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (effective portion)	Net Gains Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (effective portion)
	2022		2021			2022		2021
Foreign exchange forward and option contracts – Designated as cash flow hedging instruments	$	(76)	$	14	Cost of revenues	$	17	$	30
					SG&A expenses	2		5
					Total	$	19	$	35

The activity related to the change in net unrealized gains and losses on the cash flow hedges included in "Accumulated other comprehensive income (loss)" in our unaudited consolidated statements of stockholders' equity is presented in Note 9.

Other Derivatives

We use foreign exchange forward contracts to provide an economic hedge against balance sheet exposures to certain monetary assets and liabilities denominated in currencies other than the functional currency of our foreign subsidiaries. We entered into foreign exchange forward contracts that are scheduled to mature in the third quarter of 2022. Realized gains or losses and changes in the estimated fair value of these derivative financial instruments are recorded in the caption "Foreign currency exchange gains (losses), net" in our unaudited consolidated statements of operations.

Additional information related to the outstanding foreign exchange forward contracts not designated as hedging instruments was as follows:

(in millions) March 31, 2022 December 31, 2021
Notional Fair Value Notional Fair Value
Contracts outstanding $ 879 $ — $ 847 $ (4)

~~The following table provides information on the location and amounts of realized and unrealized pre-tax gains on the other derivative financial instruments for the three months ended March 31:~~

Location of Net Gains on
Derivative Instruments Amount of Net Gains on Derivative Instruments
(in millions) 2022 2021
Foreign exchange forward contracts – Not designated as hedging instruments Foreign currency exchange gains (losses), net $ 13 $ 3

~~The related cash flow impacts of all the derivative activities are reflected as cash flows from operating activities.~~


(in millions)	June 30, 2022				December 31, 2021
	Notional		Fair Value		Notional		Fair Value
Contracts outstanding	$	1,072	$	3	$	847	$	(4)


Cognizant Technology Solutions			14			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

The following table provides information on the location and amounts of realized and unrealized pre-tax gains on the other derivative financial instruments for the three and six months ended June 30:


	Location of Net Gains on Derivative Instruments	Amount of Net Gains on Derivative Instruments
		Three Months Ended June 30,				Six Months Ended June 30,
(in millions)		2022		2021		2022		2021
Foreign exchange forward contracts – Not designated as hedging instruments	Foreign currency exchange gains (losses), net	$	32	$	3	$	45	$	6

The related cash flow impacts of all the derivative activities are reflected as cash flows from operating activities.

Note 8 — Fair Value Measurements

We measure our cash equivalents, certain investments, contingent consideration liabilities and foreign exchange forward and option contracts at fair value. Fair value is the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions.

The fair value hierarchy consists of the following three levels:

•Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities.

•Level 2 – Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable and market-corroborated inputs which are derived principally from or corroborated by observable market data.

•Level 3 – Inputs are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

The following table summarizes the financial assets and (liabilities) measured at fair value on a recurring basis as of ~~March 31,~~June 30, 2022:


(in millions)	(in millions)	Level 1		Level 2		Level 3		Total		(in millions)	Level 1		Level 2		Level 3		Total
Cash equivalents:	Cash equivalents:									Cash equivalents:
Money market funds	Money market funds	$	735	$	—	$	—	$	735	Money market funds	$	360	$	—	$	—	$	360
Time deposits	Time deposits	—		5		—		5		Time deposits	—		229		—		229
Commercial paper	Commercial paper	—		254		—		254		Commercial paper	—		205		—		205
Short-term investments:	Short-term investments:									Short-term investments:
Time deposits	Time deposits	—		3		—		3		Time deposits	—		40		—		40
Equity investment security	Equity investment security	26		—		—		26		Equity investment security	26		—		—		26
Available-for-sale investment securities:	Available-for-sale investment securities:									Available-for-sale investment securities:
Certificates of deposit and commercial paper	Certificates of deposit and commercial paper	—		65		—		65		Certificates of deposit and commercial paper	—		448		—		448
Other current assets:	Other current assets:									Other current assets:
Foreign exchange forward and option contracts		—		37		—		37
Foreign exchange forward contracts										Foreign exchange forward contracts	—		9		—		9
Long-term investments:	Long-term investments:									Long-term investments:
Restricted time deposits(1)	Restricted time deposits(1)	—		389		—		389		Restricted time deposits(1)	—		375		—		375
Other noncurrent assets
Foreign exchange forward contracts		—		11		—		11

Accrued expenses and other current liabilities:	Accrued expenses and other current liabilities:									Accrued expenses and other current liabilities:
Foreign exchange forward contracts		—		(4)		—		(4)
Foreign exchange forward and option contracts										Foreign exchange forward and option contracts	—		(21)		—		(21)
Contingent consideration liabilities	Contingent consideration liabilities	—		—		(11)		(11)		Contingent consideration liabilities	—		—		(21)		(21)
Other noncurrent liabilities:	Other noncurrent liabilities:									Other noncurrent liabilities:
Foreign exchange forward contracts	Foreign exchange forward contracts	—		(1)		—		(1)		Foreign exchange forward contracts	—		(10)		—		(10)
Contingent consideration liabilities	Contingent consideration liabilities	—		—		(25)		(25)		Contingent consideration liabilities	—		—		(16)		(16)

(1)See Note 6.


Cognizant Technology Solutions			15			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

The following table summarizes the financial assets and (liabilities) measured at fair value on a recurring basis as of December 31, 2021:


(in millions)	Level 1		Level 2		Level 3		Total
Cash equivalents:
Money market funds	$	507	$	—	$	—	$	507
Time deposits	—		4		—		4
Commercial paper	—		266		—		266
Short-term investments:
Time deposits	—		554		—		554
Equity investment security	26		—		—		26
Available-for-sale investment securities:
Commercial paper	—		310		—		310
Other current assets:
Foreign exchange forward and option contracts	—		54		—		54
Long-term investments:
Restricted time deposits(1)	—		397		—		397
Other noncurrent assets:
Foreign exchange forward and option contracts	—		15		—		15
Accrued expenses and other current liabilities:
Foreign exchange forward and option contracts	—		(7)		—		(7)
Contingent consideration liabilities	—		—		(14)		(14)
Other noncurrent liabilities:

Contingent consideration liabilities	—		—		(21)		(21)

(1)See Note 6.

The following table summarizes the changes in Level 3 contingent consideration liabilities for the ~~three~~six months ended ~~March 31~~June 30:


(in millions)	(in millions)	2022		2021		(in millions)	2022		2021
Beginning balance	Beginning balance	$	35	$	54	Beginning balance	$	35	$	54
Initial measurement recognized at acquisition	Initial measurement recognized at acquisition	1		8		Initial measurement recognized at acquisition	1		8
Change in fair value recognized in SG&A expenses	Change in fair value recognized in SG&A expenses	3		(3)		Change in fair value recognized in SG&A expenses	5		(19)
Payments	Payments	(3)		(2)		Payments	(4)		(3)
Ending balance	Ending balance	$	36	$	57	Ending balance	$	37	$	40

We measure the fair value of money market funds based on quoted prices in active markets for identical assets and measure the fair value of our equity investment security based on the published daily net asset value at which investors can freely subscribe to or redeem from the fund. The fair value of certificates of deposit and commercial paper is measured based on relevant trade data, dealer quotes, or model-driven valuations using significant inputs derived from or corroborated by observable market data, such as yield curves and credit spreads. The carrying value of the time deposits approximated fair value as of ~~March 31,~~June 30, 2022 and December 31, 2021.

We estimate the fair value of each foreign exchange forward contract by using a present value of expected cash flows model. This model calculates the difference between the current market forward price and the contracted forward price for each foreign exchange forward contract and applies the difference in the rates to each outstanding contract. The market forward rates include a discount and credit risk factor. We estimate the fair value of each foreign exchange option contract by using a variant of the Black-Scholes model. This model uses present value techniques and reflects the time value and intrinsic value based on observable market rates.

We estimate the fair value of contingent consideration liabilities associated with acquisitions using a variation of the income approach, which utilizes one or more significant inputs that are unobservable. This approach calculates the fair value of such liabilities based on the probability-weighted expected performance of the acquired entity against the target performance metric, discounted to present value when appropriate.

During the six months ended June 30, 2022 and the year ended December 31, 2021, there were no transfers among Level 1, Level 2 or Level 3 financial assets and liabilities.


Cognizant Technology Solutions			16			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

~~During the three months ended March 31, 2022 and the year ended December 31, 2021, there were no transfers among Level 1, Level 2 or Level 3 financial assets and liabilities.~~

Note 9 — Accumulated Other Comprehensive Income (Loss)

Changes in "Accumulated other comprehensive income (loss)" by component were as follows for the three and six months ended ~~March 31,~~June 30, 2022:


								Three Months	Six Months
(in millions)	(in millions)	Before Tax Amount		Tax Effect		Net of Tax Amount				(in millions)	Before Tax Amount		Tax Effect		Net of Tax Amount		Before Tax Amount		Tax Effect		Net of Tax Amount
Foreign currency translation adjustments:	Foreign currency translation adjustments:									Foreign currency translation adjustments:
Beginning balance	Beginning balance	$	(22)	$	2	$	(20)			Beginning balance	$	(60)	$	3	$	(57)	$	(22)	$	2	$	(20)
Change in foreign currency translation adjustments	Change in foreign currency translation adjustments	(38)		1		(37)				Change in foreign currency translation adjustments	(197)		4		(193)		(235)		5		(230)
Ending balance	Ending balance	$	(60)	$	3	$	(57)			Ending balance	$	(257)	$	7	$	(250)	$	(257)	$	7	$	(250)
Unrealized gains on cash flow hedges:
Unrealized gains and losses on cash flow hedges:										Unrealized gains and losses on cash flow hedges:
Beginning balance	Beginning balance	$	71	$	(14)	$	57			Beginning balance	$	48	$	(10)	$	38	$	71	$	(14)	$	57
Unrealized (losses) arising during the period	Unrealized (losses) arising during the period	(10)		2		(8)				Unrealized (losses) arising during the period	(66)		14		(52)		(76)		16		(60)
Reclassifications of net (gains) to:	Reclassifications of net (gains) to:									Reclassifications of net (gains) to:
Cost of revenues	Cost of revenues	(12)		2		(10)				Cost of revenues	(5)		1		(4)		(17)		3		(14)
SG&A expenses	SG&A expenses	(1)		—		(1)				SG&A expenses	(1)		—		(1)		(2)		—		(2)
Net change	Net change	(23)		4		(19)				Net change	(72)		15		(57)		(95)		19		(76)
Ending balance	Ending balance	$	48	$	(10)	$	38			Ending balance	$	(24)	$	5	$	(19)	$	(24)	$	5	$	(19)
Accumulated other comprehensive income (loss):	Accumulated other comprehensive income (loss):									Accumulated other comprehensive income (loss):
Beginning balance	Beginning balance	$	49	$	(12)	$	37			Beginning balance	$	(12)	$	(7)	$	(19)	$	49	$	(12)	$	37
Other comprehensive income (loss)	Other comprehensive income (loss)	(61)		5		(56)				Other comprehensive income (loss)	(269)		19		(250)		(330)		24		(306)
Ending balance	Ending balance	$	(12)	$	(7)	$	(19)			Ending balance	$	(281)	$	12	$	(269)	$	(281)	$	12	$	(269)

Changes in "Accumulated other comprehensive income (loss)" by component were as follows for the three and six months ended ~~March 31,~~June 30, 2021:


								Three Months	Six Months
(in millions)	(in millions)	Before Tax Amount		Tax Effect		Net of Tax Amount				(in millions)	Before Tax Amount		Tax Effect		Net of Tax Amount		Before Tax Amount		Tax Effect		Net of Tax Amount
Foreign currency translation adjustments:	Foreign currency translation adjustments:									Foreign currency translation adjustments:
Beginning balance	Beginning balance	$	56	$	(1)	$	55			Beginning balance	$	29	$	1	$	30	$	56	$	(1)	$	55
Change in foreign currency translation adjustments	Change in foreign currency translation adjustments	(27)		2		(25)				Change in foreign currency translation adjustments	15		(1)		14		(12)		1		(11)
Ending balance	Ending balance	$	29	$	1	$	30			Ending balance	$	44	$	—	$	44	$	44	$	—	$	44
Unrealized gains on cash flow hedges:	Unrealized gains on cash flow hedges:									Unrealized gains on cash flow hedges:
Beginning balance	Beginning balance	$	67	$	(12)	$	55			Beginning balance	$	63	$	(12)	$	51	$	67	$	(12)	$	55
Unrealized gains arising during the period		17		(3)		14
Unrealized (losses) gains arising during the period										Unrealized (losses) gains arising during the period	(3)		—		(3)		14		(3)		11
Reclassifications of net (gains) to:	Reclassifications of net (gains) to:									Reclassifications of net (gains) to:
Cost of revenues	Cost of revenues	(18)		3		(15)				Cost of revenues	(12)		3		(9)		(30)		6		(24)
SG&A expenses	SG&A expenses	(3)		—		(3)				SG&A expenses	(2)		1		(1)		(5)		1		(4)
Net change	Net change	(4)		—		(4)				Net change	(17)		4		(13)		(21)		4		(17)
Ending balance	Ending balance	$	63	$	(12)	$	51			Ending balance	$	46	$	(8)	$	38	$	46	$	(8)	$	38
Accumulated other comprehensive income (loss):	Accumulated other comprehensive income (loss):									Accumulated other comprehensive income (loss):
Beginning balance	Beginning balance	$	123	$	(13)	$	110			Beginning balance	$	92	$	(11)	$	81	$	123	$	(13)	$	110
Other comprehensive income (loss)	Other comprehensive income (loss)	(31)		2		(29)				Other comprehensive income (loss)	(2)		3		1		(33)		5		(28)
Ending balance	Ending balance	$	92	$	(11)	$	81			Ending balance	$	90	$	(8)	$	82	$	90	$	(8)	$	82


Cognizant Technology Solutions			17			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

Note 10— Commitments and Contingencies

We are involved in various claims and legal proceedings arising in the ordinary course of business. We accrue a liability when a loss is considered probable and the amount can be reasonably estimated. When a material loss contingency is reasonably possible but not probable, we do not record a liability, but instead disclose the nature and the amount of the claim, and an estimate of the loss or range of loss, if such an estimate can be made. Legal fees are expensed as incurred. While we do not expect that the ultimate resolution of any existing claims and proceedings (other than the specific matters described below, if decided adversely), individually or in the aggregate, will have a material adverse effect on our financial position, an unfavorable outcome in some or all of these proceedings could have a material adverse impact on results of operations or cash flows for a particular period. This assessment is based on our current understanding of relevant facts and circumstances. As such, our view of these matters is subject to inherent uncertainties and may change in the future.

On January 15, 2015, Syntel sued TriZetto and Cognizant in the USDC-SDNY. Syntel’s complaint alleged breach of contract against TriZetto, and tortious interference and misappropriation of trade secrets against Cognizant and TriZetto, stemming from Cognizant’s hiring of certain former Syntel employees. Cognizant and TriZetto countersued on March 23, 2015, for breach of contract, misappropriation of trade secrets and tortious interference, based on Syntel’s misuse of TriZetto confidential information and abandonment of contractual obligations. Cognizant and TriZetto subsequently added federal Defend Trade Secrets Act and copyright infringement claims for Syntel’s misuse of TriZetto’s proprietary technology. The parties’ claims were narrowed by the court and the case was tried before a jury, which on October 27, 2020 returned a verdict in favor of Cognizant in the amount of $855 million, including $570 million in punitive damages. On April 20, 2021, the USDC-SDNY issued a post-trial order that, among other things, affirmed the jury’s award of $285 million in actual damages, but reduced the award of punitive damages from $570 million to $285 million, thereby reducing the overall damages award from $855 million to $570 million. The USDC-SDNY subsequently issued a final judgment consistent with the April 20th order. On May 26, 2021, Syntel filed a notice of appeal to the Second Circuit, and on June 3, 2021 the USDC-SDNY stayed execution of judgment pending appeal. We will not record the gain in our financial statements until it becomes realizable.

On February 28, 2019, a ruling of the SCI interpreting the India Defined Contribution Obligation altered historical understandings of the obligation, extending it to cover additional portions of the employee’s income. As a result, the ongoing contributions of our affected employees and the Company were required to be increased. In the first quarter of 2019, we accrued $117 million with respect to prior periods, assuming retroactive application of the SCI’s ruling, in "Selling, general and administrative expenses" in our unaudited consolidated statement of operations. 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 the Indian government will review the matter and there is a substantial question as to whether the Indian government will apply the SCI’s ruling on a retroactive basis. As such, the ultimate amount of our obligation may be materially different from the amount accrued.

On October 5, 2016, October 27, 2016 and November 18, 2016, three putative securities class action complaints were filed in the USDC-NJ naming us and certain of our current and former officers at that time as defendants. These complaints were consolidated into a single action and on April 7, 2017, the lead plaintiffs filed a consolidated amended complaint on behalf of a putative class of persons and entities who purchased our common stock during the period between February 27, 2015 and September 29, 2016, naming us and certain of our current and former officers at that time as defendants and alleging violations of the Exchange Act, based on allegedly false or misleading statements related to potential violations of the Foreign Corrupt Practices Act, our business, prospects and operations, and the effectiveness of our internal controls over financial reporting and our disclosure controls and procedures. The lead plaintiffs sought an award of compensatory damages, among other relief, and their reasonable costs and expenses, including attorneys’ fees. Defendants filed motions to dismiss the consolidated amended complaint on June 6, 2017. On August 8, 2018, the USDC-NJ issued an order which granted the motions to dismiss in part, including dismissal of all claims against then-current officers of the Company, and denied them in part. On September 7, 2018, we filed a motion in the USDC-NJ to certify the August 8, 2018 order for immediate appeal to the Third Circuit pursuant to 28 U.S.C. § 1292(b). On October 18, 2018, the USDC-NJ issued an order granting our motion, and staying the action pending the outcome of our appeal petition to the Third Circuit. On October 29, 2018, we filed a petition for permission to appeal with the Third Circuit. On March 6, 2019, the Third Circuit denied our petition without prejudice. In an order dated March 19, 2019, the USDC-NJ directed the lead plaintiffs to provide the defendants with a proposed amended complaint. On April 26, 2019, lead plaintiffs filed their second amended complaint. We filed a motion to dismiss the second amended complaint on June 10, 2019. On June 7, 2020, the USDC-NJ issued an order denying our motion to dismiss the second amended complaint. On July 10, 2020, we filed our answer to the second amended complaint. On July 23, 2020, the DOJ filed a motion on consent for leave to


~~Cognizant Technology Solutions~~			18			~~March 31, 2022 Form 10-Q~~

~~Table of Contents~~

~~intervene and to stay all discovery through the conclusion of the criminal proceedings in~~ ~~United States v. Gordon J. Coburn and Steven Schwartz~~, Crim. No. 19-120 (KM), except for documents produced by us to the DOJ in connection with those criminal proceedings. On July 24, 2020, the USDC-NJ granted the DOJ’s motion; and on that same day, we filed a motion in the USDC-NJ to certify the June 7, 2020 order for immediate appeal to the Third Circuit pursuant to 28 U.S.C. § 1292(b). On March 17, 2021, the USDC-NJ issued an order denying our motion.

On September 7, 2021, the parties filed a settlement agreement to resolve the consolidated putative securities class action against us and certain of our former officers. The settlement agreement provides for a payment of $95 million to the putative class (inclusive of attorneys’ fees and litigation expenses). Adjusting for indemnification expenses, legal fees and other covered expenses incurred through September 7, 2021, the remaining available balance under the applicable directors and officers insurance policies was $75 million. As a result, we recorded a loss of $20 million in "Selling, general and administrative expenses" in our unaudited consolidated financial statements. The loss is referred to as the Class Action Settlement Loss. We and the other defendants entered into the settlement agreement to eliminate the uncertainty, burden, and expense of further protracted litigation. We and the other defendants expressly deny that the plaintiffs in the consolidated putative securities class action have asserted any valid claims as to us and them, respectively. On September 9, 2021, the USDC-NJ granted preliminary approval of the settlement. On December 21, 2021, the USDC-NJ granted final approval of the settlement and entered a judgment dismissing the consolidated putative securities class action with prejudice. The deadline to appeal the judgment was January 20, 2022, and no appeals were filed before that date.

On October 31, 2016, November 15, 2016 and November 18, 2016, three putative shareholder derivative complaints were filed in New Jersey Superior Court, Bergen County, naming us, all of our then current directors and certain of our current and former officers at that time as defendants. These actions were consolidated in an order dated January 24, 2017. The complaints assert claims for breach of fiduciary duty, corporate waste, unjust enrichment, abuse of control, mismanagement, and/or insider selling by defendants. On March 16, 2017, the parties filed a stipulation deferring all further proceedings pending a final, non-appealable ruling on the then-anticipated motion to dismiss the consolidated putative securities class action. On April 26, 2017, ~~in lieu of ordering the stipulation filed by the parties,~~ the New Jersey Superior Court deferred further proceedings by dismissing the consolidated putative shareholder derivative litigation without prejudice but permitting the parties to file a motion to vacate the dismissal in the future.

On February 22, 2017, April 7, 2017 and May 10, 2017, three additional putative shareholder derivative complaints alleging similar claims were filed in the USDC-NJ, naming us and certain of our current and former directors and officers at that time as defendants. These complaints asserted claims similar to those in the previously-filed putative shareholder derivative actions. In an order dated June 20, 2017, the USDC-NJ consolidated these actions into a single action, appointed lead plaintiff and lead counsel, and stayed all further proceedings pending a final, non-appealable ruling on the motions to dismiss a consolidated putative securities class action that was resolved on December 21, 2021, when the USDC-NJ granted final approval of the settlement of the consolidated putative securities class ~~action.~~action and entered a judgment dismissing the consolidated putative securities class action with prejudice. On October 30, 2018, lead plaintiff filed a consolidated verified derivative complaint.

On March 11, 2019, a seventh putative shareholder derivative complaint was filed in the USDC-NJ, naming us and certain of our current and former directors and officers at that time as defendants. The complaint in that action asserts claims similar to


Cognizant Technology Solutions			18			June 30, 2022 Form 10-Q

Table of Content s

those in the previously-filed putative shareholder derivative actions. On May 14, 2019, the USDC-NJ approved a stipulation that (i) consolidated this action with the putative shareholder derivative suits that were previously filed in the USDC-NJ; and (ii) stayed all of these suits pending an order on the motion to dismiss the second amended complaint in the above-referenced consolidated putative securities class ~~action.~~action that was resolved on December 21, 2021. On August 3, 2020, lead plaintiffs filed an amended complaint. The USDC-NJ extended the stay through February 14, 2022. On February 14, 2022, we and certain of our current and former directors and officers moved to dismiss the amended complaint. Those motions are now fully briefed and pending before the USDC-NJ.

On June 1, 2021, an eighth putative shareholder derivative complaint was filed in the USDC-NJ, naming us and certain of our current and former directors and officers at that time as defendants. The complaint asserts claims similar to those in the previously-filed putative shareholder derivative actions. On August 2, 2021, the USDC-NJ approved a stipulation that stayed this action through the earliest of (i) the conclusion of the criminal proceedings in United States v. Gordon J. Coburn and Steven Schwartz, Crim. No. 19-120 (KM), (ii) the dissolution of the stay in the consolidated putative securities class action, provided that the dissolution of the stay in the consolidated putative securities class action is not the result of a settlement agreement or other mutual resolution of the consolidated putative securities class action, or (iii) the dissolution of the stay in the consolidated putative shareholder derivative action pending in USDC-NJ, provided that we are required to answer, move to dismiss, or otherwise respond to the operative complaint in that action following the dissolution of the stay.action. The stay ended on February 14, 2022. On March 31, 2022, we and certain of our current and former directors and officers moved to dismiss the complaint. Those motions are now fully briefed and pending before the USDC-NJ.


~~Cognizant Technology Solutions~~			19			~~March 31, 2022 Form 10-Q~~

~~Table of Contents~~

We are presently unable to predict the duration, scope or result of the putative shareholder derivative actions. Although the Company continues to defend the putative shareholder derivative actions vigorously, these lawsuits are subject to inherent uncertainties, the actual cost of such litigation will depend upon many unknown factors and the outcome of the litigation is necessarily uncertain.

We have indemnification and expense advancement obligations pursuant to our bylaws and indemnification agreements with respect to certain current and former members of senior management and the Company’s board of directors. In connection with the matters that were the subject of our previously disclosed internal investigation, the DOJ and SEC investigations and the related litigation, we have received and expect to continue to receive requests under such indemnification agreements and our bylaws to provide funds for legal fees and other expenses. ~~As of the filing of the settlement agreement on September 7, 2021, there~~There are no amounts remaining available to us under applicable insurance policies for our ongoing indemnification and advancement obligations with respect to certain of our current and former officers and directors or incremental legal fees and other expenses related to the above matters.

See Note 6 for information relating to the ITD Dispute.

Many of our engagements involve projects that are critical to the operations of our clients’ business and provide benefits that are difficult to quantify. Any failure in a client’s systems or our failure to meet our contractual obligations to our clients, including any breach involving a client’s confidential information or sensitive data, or our obligations under applicable laws or regulations could result in a claim for substantial damages against us, regardless of our responsibility for such failure. Although we attempt to contractually limit our liability for damages arising from negligent acts, errors, mistakes, or omissions in rendering our services, there can be no assurance that the limitations of liability set forth in our contracts will be enforceable in all instances or will otherwise protect us from liability for damages. Although we have general liability insurance coverage, including coverage for errors or omissions, we retain a significant portion of risk through our insurance deductibles and there can be no assurance that such coverage will cover all types of claims, continue to be available on reasonable terms or will be available in sufficient amounts to cover one or more large claims, or that the insurer will not disclaim coverage as to any future claim. The successful assertion of one or more large claims against us that exceed or are not covered by our insurance coverage or changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, results of operations, financial position and cash flows for a particular period.

In the normal course of business and in conjunction with certain client engagements, we have entered into contractual arrangements through which we may be obligated to indemnify clients or other parties with whom we conduct business with respect to certain matters. These arrangements can include provisions whereby we agree to hold the indemnified party and certain of their affiliated entities harmless with respect to third-party claims related to such matters as our breach of certain representations or covenants, our intellectual property infringement, our gross negligence or willful misconduct or certain other claims made against certain parties. Payments by us under any of these arrangements are generally conditioned on the client making a claim and providing us with full control over the defense and settlement of such claim. It is not possible to determine the maximum potential liability under these indemnification agreements due to the unique facts and circumstances involved in each particular agreement. Historically, we have not made material payments under these indemnification agreements and therefore they have not had a material impact on our operating results, financial position, or cash flows. However, if events arise requiring us to make payment for indemnification claims under our indemnification obligations in contracts we have entered, such payments could have a material adverse effect on our business, results of operations, financial position and cash flows for a particular period.


Cognizant Technology Solutions			19			June 30, 2022 Form 10-Q

Table of Content s

Note 11 — Segment Information

Our reportable segments are:

•Financial Services, which consists of the banking and insurance operating segments;

•~~Healthcare, which consists of the healthcare and life sciences operating segments;~~Health Sciences (previously referred to as Healthcare);

•Products and Resources, which consists of the retail and consumer goods; manufacturing, logistics, energy, and utilities; and travel and hospitality operating segments; and

•Communications, Media and Technology

Our segments are industry-based, and as such, we report revenue from clients in the segment with which our clients are most closely aligned. Our client partners, account executives and client relationship managers are aligned in accordance with the specific industries they serve. Our chief operating decision maker evaluates the Company's performance and allocates resources based on segment revenues and operating profit. Segment operating profit is defined as income from operations before unallocated costs. Generally, operating expenses for each operating segment have similar characteristics and are subject


~~Cognizant Technology Solutions~~			20			~~March 31, 2022 Form 10-Q~~

~~Table of Contents~~

to the same factors, pressures and challenges. However, the economic environment and its effects on industries served by the operating segments may affect revenues and operating expenses to differing degrees.

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 costs to the business segments 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 ~~restated~~recast the 2021 results to conform to the new methodology.

Additionally, we made the ~~communications, media~~following changes:

•We renamed the Healthcare reportable segment as Health Sciences. This segment, which was previously comprised of two operating segments, (i) healthcare and ~~technology~~(ii) life sciences, is now comprised of one operating segment - health sciences.

•The Communications, Media and Technology segment, which was previously comprised of two operating segments, (i) communications and ~~media;~~media and (ii) technology, is now comprised of one operating segment - communications, media and technology. ~~This change reflects~~

These changes reflect how ~~this~~these operating ~~segment is~~segments are currently managed and reported to the chief operating decision ~~makers~~maker but ~~will~~did not affect the reportable ~~segment~~segments' financial results.

Expenses included in segment operating profit consist principally of direct selling and delivery costs as well as a per employee charge for use of our global delivery centers and infrastructure. Certain SG&A expenses, the excess or shortfall of incentive-based compensation for commercial and delivery employees as compared to target, a portion of depreciation and amortization and the impact of the settlements of the cash flow hedges are not allocated to individual segments in internal management reports used by the chief operating decision maker. Accordingly, such expenses are excluded from segment operating profit and are included below as “unallocated costs” and adjusted against our total income from operations. Additionally, management has determined that it is not practical to allocate identifiable assets by segment, since such assets are used interchangeably among the segments.

For revenues by reportable segment and geographic area, see Note 2.


Cognizant Technology Solutions			20			June 30, 2022 Form 10-Q

Table of Content s

Segment operating profits by reportable segment were as follows for the three and six months ended ~~March 31:~~June 30:


						Three Months Ended June 30,		Six Months Ended June 30,
(in millions)	(in millions)	2022		2021			(in millions)	2022		2021		2022		2021
Financial Services	Financial Services	$	421	$	398		Financial Services	$	454	$	430	$	875	$	828
Healthcare		368		405
Health Sciences							Health Sciences	388		382		756		787
Products and Resources	Products and Resources	332		302			Products and Resources	359		323		691		625
Communications, Media and Technology	Communications, Media and Technology	245		212			Communications, Media and Technology	271		231		516		443
Total segment operating profit	Total segment operating profit	1,366		1,317			Total segment operating profit	1,472		1,366		2,838		2,683
Less: unallocated costs	Less: unallocated costs	642		648			Less: unallocated costs	712		670		1,354		1,318
Income from operations	Income from operations	$	724	$	669		Income from operations	$	760	$	696	$	1,484	$	1,365

Geographic Area Information

Long-lived assets by geographic area are as follows:


		As of					As of
(in millions)	(in millions)	March 31, 2022		December 31, 2021		(in millions)	June 30, 2022		December 31, 2021
Long-lived Assets: (1)	Long-lived Assets: (1)					Long-lived Assets: (1)
North America(2)	North America(2)	$	387	$	377	North America(2)	$	366	$	377
Europe	Europe	70		75		Europe	65		75
Rest of World (3)	Rest of World (3)	714		719		Rest of World (3)	690		719
Total	Total	$	1,171	$	1,171	Total	$	1,121	$	1,171

(1)Long-lived assets include property and equipment, net of accumulated depreciation and amortization.

(2)Substantially all relates to the United States.

(3)Substantially all relates to India.

Note 12 — Subsequent Events

Dividend

On July 26, 2022, th ~~May 2, 2022, the~~e Board of Directors approved the Company's declaration of a $0.27 per share dividend with a record date of ~~May 20,~~August 19, 2022 and a payment date of ~~May 31,~~August 30, 2022.


Cognizant Technology Solutions			21			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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 ~~have become~~are an ~~increasingly~~ 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.

Q1On 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

Revenue up ~~$425~~$321 million or ~~9.7%~~7.0% from Q1Q2 2021; ~~10.9%~~9.5% in constant currency1

Income from Operations up ~~$55~~$64 million or ~~8.2%~~9.2% from Q1Q2 2021

Operating margin ~~down 20~~up 30 bps from Q1Q2 2021

GAAP

Adjusted1

Diluted EPS up ~~$0.12~~$0.14 or ~~12.6%~~14.4% from Q1Q2 2021

Diluted EPS up ~~$0.11~~$0.15 or ~~11.3%~~15.2% from Q1Q2 2021

During the quarter ended ~~March 31,~~June 30, 2022, revenues increased by ~~$425~~$321 million as compared to the quarter ended ~~March 31,~~June 30, 2021, representing growth of ~~9.7%~~7.0%, or ~~10.9%~~9.5% on a constant currency basis1. Our recently completed acquisitions contributed 220110 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 ~~Healthcare~~Health Sciences (previously referred to as Healthcare) segment was driven by increased demand for digital services among pharmaceutical ~~companies in~~companies. Financial services revenue growth reflects the life sciences operating segment, including digitization of clinical trial processes to drive transformation and manufacturing operations modernization. Revenues in the Communications, Media and Technology segment benefited from our technology clients' growing demand for digital services, ~~related to digital con~~partially offset by the negative impact of the previously disclosed sale of the Samlink subsidiary, which was completed on February 1, 2022. ~~tent.~~ We continue to experience pricing pressure on our non-digital services as our clients optimize the cost of supporting their legacy systems and operations.

~~Operating margin decreased to~~15.0% for the quarter ended March 31, 2022, from 15.2% for the quarter ended March 31, 2021. Our 2022 operating margin was negatively impacted by increased compensation costs for our delivery personnel (including employees and subcontractors), net of the benefit of lower incentive-based compensation, partially offset 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.~~

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			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

Operating margin increased to15.5% 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~~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 ~~March 31,~~June 30, 2022, our annualized attrition, including both voluntary and involuntary, was ~~30.8%~~35.6% as compared to ~~21.0%~~31.4% for the three months ended ~~March 31,~~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. WWe expect these impacts to continue for at least the remainder of 2022. ~~e expect attrition to remain elevated.~~ 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 and operating margin.~~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 U~~kraine~~Ukraine and revenues generated from clients in both countries were immaterial in both 2021 and the first ~~quarter~~half of 2022. ~~However,~~However, the continuation of the hostilities or the expansion of the current conflict’s scope into surrounding geographic areas ~~of the conflict~~ 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			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

Results of Operations

Three Months Ended ~~March 31,~~June 30, 2022 Compared to Three Months Ended ~~March 31,~~June 30, 2021

The following table sets forth, for the periods indicated, certain financial data for the three months ended ~~March 31:~~June 30:


				% of			% of	Increase						% of			% of	Increase
(Dollars in millions, except per share data)	(Dollars in millions, except per share data)	2022		Revenues	2021		Revenues	$		%	(Dollars in millions, except per share data)	2022		Revenues	2021		Revenues	$		%
Revenues	Revenues	$	4,826	100.0	$	4,401	100.0	$	425	9.7	Revenues	$	4,906	100.0	$	4,585	100.0	$	321	7.0
Cost of revenues(a)	Cost of revenues(a)	3,097		64.2	2,764		62.8	333		12.0	Cost of revenues(a)	3,119		63.6	2,863		62.4	256		8.9
Selling, general and administrative expenses(a)	Selling, general and administrative expenses(a)	862		17.9	827		18.8	35		4.2	Selling, general and administrative expenses(a)	883		18.0	881		19.2	2		0.2

Depreciation and amortization expense	Depreciation and amortization expense	143		3.0	141		3.2	2		1.4	Depreciation and amortization expense	144		2.9	145		3.2	(1)		(0.7)
Income from operations	Income from operations	724		15.0	669		15.2	55		8.2	Income from operations	760		15.5	696		15.2	64		9.2
Other income (expense), net	Other income (expense), net	5			(4)			9		*	Other income (expense), net	1			(2)			3		*
Income before provision for income taxes	Income before provision for income taxes	729		15.1	665		15.1	64		9.6	Income before provision for income taxes	761		15.5	694		15.1	67		9.7
Provision for income taxes	Provision for income taxes	(170)			(160)			(10)		6.3	Provision for income taxes	(184)			(184)			—		—
Income (loss) from equity method investments	Income (loss) from equity method investments	4			—			4		*	Income (loss) from equity method investments	—			2			(2)		(100.0)
Net income	Net income	$	563	11.7	$	505	11.5	$	58	11.5	Net income	$	577	11.8	$	512	11.2	$	65	12.7
Diluted earnings per share	Diluted earnings per share	$	1.07		$	0.95		$	0.12	12.6	Diluted earnings per share	$	1.11		$	0.97		$	0.14	14.4

Other Financial Information
Other Financial Information2											Other Financial Information2

Adjusted Diluted EPS2		$	1.08		$	0.97		$	0.11	11.3
Adjusted Diluted EPS											Adjusted Diluted EPS	$	1.14		$	0.99		$	0.15	15.2

(a)Exclusive of depreciation and amortization expense

*Not meaningful


Revenues - Overall

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			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~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 ~~March 31,~~June 30, 2022 as compared to the three months ended ~~March 31,~~June 30, 2021:


		Financial Services					Healthcare					Financial Services					Health Sciences
				Increase / (Decrease)					Increase / (Decrease)							Increase / (Decrease)					Increase / (Decrease)
Dollars in millions	Dollars in millions	Revenues		$	%	CC %3	Revenues		$	%	CC %3		Dollars in millions	Revenues		$	%	CC 3	Revenues		$	%	CC %3
North America	North America	$	1,080	67	6.6	6.6	$	1,195	94	8.5	8.5		North America	$	1,104	55	5.2	5.5	$	1,210	79	7.0	7.0
United Kingdom	United Kingdom	151		26	20.8	23.6	44		4	10.0	14.0		United Kingdom	147		17	13.1	22.3	44		(1)	(2.2)	6.1
Continental Europe	Continental Europe	157		(35)	(18.2)	(13.5)	120		2	1.7	6.9		Continental Europe	143		(43)	(23.1)	(15.1)	126		6	5.0	14.6
Europe - Total	Europe - Total	308		(9)	(2.8)	1.1	164		6	3.8	8.7		Europe - Total	290		(26)	(8.2)	0.3	170		5	3.0	12.3
Rest of World	Rest of World	140		12	9.4	13.2	33		4	13.8	18.2		Rest of World	148		11	8.0	13.5	28		(1)	(3.4)	4.8
Total	Total	$	1,528	70	4.8	6.0	$	1,392	104	8.1	8.8		Total	$	1,542	40	2.7	5.1	$	1,408	83	6.3	7.6

		Products and Resources					Communications, Media and Technology					Products and Resources					Communications, Media and Technology
				Increase / (Decrease)					Increase / (Decrease)							Increase / (Decrease)					Increase / (Decrease)
Dollars in millions	Dollars in millions	Revenues		$	%	CC %3	Revenues		$	%	CC %3		Dollars in millions	Revenues		$	%	CC %3	Revenues		$	%	CC %3
North America	North America	$	761	43	6.0	6.1	$	533	82	18.2	18.2		North America	$	770	47	6.5	6.8	$	572	103	22.0	22.1
United Kingdom	United Kingdom	132		26	24.5	28.2	126		27	27.3	33.1		United Kingdom	134		18	15.5	28.0	133		21	18.8	31.4
Continental Europe	Continental Europe	145		42	40.8	50.2	37		(6)	(14.0)	(7.4)		Continental Europe	143		11	8.3	21.7	33		(11)	(25.0)	(14.0)
Europe - Total	Europe - Total	277		68	32.5	39.1	163		21	14.8	20.8		Europe - Total	277		29	11.7	24.6	166		10	6.4	18.6
Rest of World	Rest of World	92		21	29.6	32.7	80		16	25.0	29.8		Rest of World	93		9	10.7	14.5	78		—	—	6.0
Total	Total	$	1,130	132	13.2	14.9	$	776	119	18.1	19.9		Total	$	1,140	85	8.1	11.6	$	816	113	16.1	19.5


Financial Services - revenues increased ~~4.8%~~2.7%, or ~~6.0%~~5.1% on a constant currency basis3



Banking	é	$~~19M~~8M

Insurance	é	$~~51M~~32M

Revenue growth reflects the growing demand for digital services ~~partially offset by clients' continued focus on cost optimization of supporting their legacy systems~~among U.S. regional banks, public sector clients in the United Kingdom and ~~operations. Revenue in this segment benefited from recently completed acquisitions.~~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 ~~130~~190 basis points. Revenues from clients added since ~~March 31,~~June 30, 2021~~, including those related to acquisitions,~~ were ~~$26~~$22 million.3


~~Healthcare~~Health Sciences - revenues increased ~~8.1%~~6.3%, or ~~8.8%~~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 in the life sciences operating segment, including digitization of clinical trial processes to drive transformation and manufacturing operations modernization.~~companies. Revenues from clients added since ~~March 31,~~June 30, 2021 were ~~$13~~$11 million.

~~Healthcare~~

$~~29M~~83M

~~Life Sciences~~

~~$75M~~

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			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s


Products and Resources - revenues increased ~~13.2%~~8.1%, or ~~14.9%~~11.6% on a constant currency basis4

Manufacturing, Logistics, Energy and Utilities

$~~73M~~40M

Retail and Consumer Goods

$~~42M~~30M

Travel and Hospitality

$~~17M~~15M

Revenue growth in this segment was primarily driven by ~~increasing~~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. R ~~Additionally, revenue~~evenue growth in this segment included approximately ~~500~~260 basis points related to recently completed acquisitions. Revenues from clients added since ~~March 31,~~June 30, 2021 ~~including those related to acquisitions,~~ were ~~$46~~$36 million.4


Communications, Media and Technology - revenues increased ~~18.1%~~16.1%, or ~~19.9%~~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 ~~March 31,~~June 30, 2021 ~~including those related to acquisitions,~~ were ~~$45~~$38 million.

$~~119M~~113M


Revenues - Geographic Markets

Revenues of ~~$4,826~~$4,906 million by geographic market were as follows for the three months ended ~~March 31,~~June 30, 2022:


Q1 2022 as compared to Q1 2021				Increase
Q2 2022 as compared to Q2 2021											Q2 2022 as compared to Q2 2021			Increase
(Dollars in millions)	(Dollars in millions)	$	%			CC %4		(Dollars in millions)		$		%	CC %4
North America	North America			$	286		8.7		8.7		North America			$	284	8.4	8.6
United Kingdom	United Kingdom			83			22.4		26.4		United Kingdom			55		13.6	24.7
Continental Europe	Continental Europe			3			0.7		6.8		Continental Europe			(37)		(7.7)	2.5
Europe - Total	Europe - Total			86			10.4		15.6		Europe - Total			18		2.0	12.6
Rest of World	Rest of World			53			18.2		22.1		Rest of World			19		5.8	11.2
Total revenues	Total revenues			$	425		9.7		10.9		Total revenues			$	321	7.0	9.5

North America continues to be our largest market, representing ~~74.0%~~74.5% of total ~~revenues and 67.3% of total revenue growth. Revenue growth across all regions benefited from recently completed acquisitions.~~revenues. Outside of the North America region, ~~revenue growth was~~revenues were negatively impacted by ~~unfavorable~~ 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 ~~growth~~decline in the Continental Europe region ~~was driven by the German market, benefiting~~includes a negative 600 basis points impact from ~~recent acquisitions, while~~ the previously disclosed sale of the Samlink subsidiary, which was completed on February 1, 2022, ~~negatively impacted revenue growth in this region~~and was partially offset by ~~420 basis points. A significant portion of revenue~~ growth in the ~~Rest of World region was driven by the Australian~~German market, which benefited from recent acquisitions.


Cost of Revenues (Exclusive of Depreciation and Amortization Expense)

$256M

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			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s


~~Cost of Revenues (Exclusive of Depreciation and Amortization Expense)~~

~~$333M~~

~~1.4% as a % of revenue~~

~~% 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 was due to ~~higher compensation costs for~~ ~~delivery personnel (including employees and subcontractors), net of the benefit of lower incentive-based compensation costs, partially offset by delivery efficiencies. Challenges attracting and retaining highly qualified personnel have resulted and are likely to continue to result in higher compensation costs. Cost of revenues also benefited from the depreciation of the Indian rupee against the U.S. dollar.~~


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 ~~primarily~~ to economies of scale that allowed us to leverage our cost structure over a larger organization, ~~lower incentive based compensation costs~~the beneficial impact of foreign currency exchange rate movements and the optimization of non-strategic SG&A expenses.

$~~35M~~2M

~~0.9%~~1.2% as a % of ~~revenue~~revenues

% of Revenues


Depreciation and Amortization Expense

Depreciation and amortization expense ~~increased~~decreased by ~~1.4% but remained relatively flat~~0.7%, or 0.3% as a ~~percentage~~percentage of ~~revenue~~revenues, during the ~~first~~second quarter of 2022 as compared to the ~~first~~second quarter of 2021.~~The increase was due to the amortization of intangible assets from recently completed acquisitions.~~


Operating Margin - Overall

$~~55 million~~

64M

êé

~~0.2%~~0.3% as a % of ~~revenue~~revenues

% of Revenues

The 2022 ~~operating~~operating margin was ~~negatively~~positively impacted ~~by increased compensation costs for our delivery personnel (including employees and subcontractors), net of the benefit of lower incentive-based compensation, partially offset~~ by delivery efficiencies, economies of scale that allowed us to leverage our cost ~~structure~~structure over a larger organization and the ~~depreciati~~ondepreciation of the Indian rupee against the U.S. ~~dollar.~~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 6080 basis points during the three months ended ~~March 31,~~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 2018 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 2712 basis points during the three months ended ~~March 31,~~June 30, 2022 and by 4831 basis points during the three months ended ~~March 31,~~June 30, 2021.


~~Cognizant Technology Solutions~~			27			~~March 31, 2022 Form 10-Q~~

~~Table of Contents~~

We finished the ~~first~~second quarter of 2022 with approximately ~~340,400~~341,300 employees. Annualized attrition, including both voluntary and involuntary, was apapproximately 35.6%~~proximately 30.8%~~ for the three months ended ~~March 31,~~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.

¡ 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 ~~restated~~recast the 2021 results to conform to the new methodology.


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

Table of Content s

Segment operating profit and operating margin percentage were as follows:

In 2022, segment operating margins ~~were negatively impacted by increased compensation costs for delivery personnel (including employees and subcontractors), partially offset b~~ybenefited from delivery efficiencies and the depreciation of the Indian rupee against the U.S. ~~dollar. Th~~dollar partially offset by increased compensation costs for delivery personnel (including employees and subcontractors). eThe 2022 Health Sciences segment ~~operating margin in Financial Services in 2022 reflects the gain on sale of the Samlink subsidiary. In the Healthcare segment, 2022~~ 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 ~~March 31:~~June 30:


(Dollars in millions)	(Dollars in millions)	2022		% of Revenues	2021		% of Revenues	Increase / (Decrease)		(Dollars in millions)	2022		% of Revenues	2021		% of Revenues	Increase / (Decrease)
Total segment operating profit	Total segment operating profit	$	1,366	28.3	$	1,317	29.9	$	49	Total segment operating profit	$	1,472	30.0	$	1,366	29.8	$	106
Less: unallocated costs	Less: unallocated costs	642			648			(6)		Less: unallocated costs	712			670			42
Income from operations	Income from operations	$	724	15.0	$	669	15.2	$	55	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 ~~March 31:~~June 30:


(in millions)	(in millions)	2022		2021		Increase/ Decrease		(in millions)	2022		2021		Increase/ Decrease
Foreign currency exchange (losses)	Foreign currency exchange (losses)	$	(13)	$	(12)	$	(1)	Foreign currency exchange (losses)	$	(36)	$	(10)	$	(26)
Gains on foreign exchange forward contracts not designated as hedging instruments	Gains on foreign exchange forward contracts not designated as hedging instruments	13		3		10		Gains on foreign exchange forward contracts not designated as hedging instruments	32		3		29
Foreign currency exchange gains (losses), net	Foreign currency exchange gains (losses), net	—		(9)		9		Foreign currency exchange gains (losses), net	(4)		(7)		3
Interest income	Interest income	6		9		(3)		Interest income	9		7		2
Interest expense	Interest expense	(2)		(2)		—		Interest expense	(3)		(2)		(1)
Other, net	Other, net	1		(2)		3		Other, net	(1)		—		(1)
Total other income (expense), net	Total other income (expense), net	$	5	$	(4)	$	9	Total other income (expense), net	$	1	$	(2)	$	3

The foreign currency exchange ~~gains and~~ 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 ~~and losses~~ 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 ~~exposure to non-U.S. dollar denominated net monetary assets and liabilities.~~exposures. As of ~~March 31,~~June 30, 2022, the notional value of our undesignated hedges was $~~879~~1,072 million.


Provision for Income Taxes

¡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.

$65M

¡é 0.6% of Revenues


Cognizant Technology Solutions			28			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s


~~Provision for Income Taxes~~

~~$10M~~

¡~~Effective Income Tax Rate~~ ê ~~0.8%~~

~~The effective income tax~~ ~~rate decreased primarily as a result of higher discrete tax benefits in 2022 as compared to the three months ended March 31, 2021.~~


~~Net Income~~

~~The increase in net income was driven by higher income from operations, partially offset by a higher provision for income taxes.~~

~~$58M~~

¡é~~0.2% of Revenues~~

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.


~~Cognizant Technology Solutions~~			29			~~March 31, 2022 Form 10-Q~~

~~Table of Contents~~

The following table presents a reconciliation of each non-GAAP financial measure to the most comparable GAAP measure for the three months ended ~~March 31:~~June 30:


		2022		2021			2022		2021

GAAP diluted EPS	GAAP diluted EPS	$	1.07	$	0.95	GAAP diluted EPS	$	1.11	$	0.97

Non-operating foreign currency exchange (gains) losses, pre-tax (1)	Non-operating foreign currency exchange (gains) losses, pre-tax (1)	—		0.02		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)	Tax effect of non-operating foreign currency exchange (gains) losses (2)	0.01		—		Tax effect of non-operating foreign currency exchange (gains) losses (2)	0.02		0.01

Adjusted Diluted EPS	Adjusted Diluted EPS	$	1.08	$	0.97	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 March 31,					Three Months Ended June 30,
(in millions)	(in millions)	2022		2021		(in millions)	2022		2021
Non-GAAP income tax benefit (expense) related to:
Non-GAAP income tax (expense) related to:						Non-GAAP income tax (expense) related to:

Foreign currency exchange gains and losses	Foreign currency exchange gains and losses	$	(6)	$	—	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

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

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


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.


			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

Table of Content s


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

Manufacturing, Logistics, Energy and Utilities

$113M

Retail and Consumer Goods

$72M

Travel and Hospitality

$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.

$232M


Revenues - Geographic Markets

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


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

Table of Content s


Cost of Revenues (Exclusive of Depreciation and Amortization Expense)

$589M

1.3% as a % of revenues

% of Revenues


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.

$37M

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

$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

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:

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:


(Dollars in millions)	2022		% of Revenues	2021		% of Revenues	Increase / (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:


(in millions)	2022		2021		Increase/ 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.


Cognizant Technology Solutions			34			June 30, 2022 Form 10-Q

Table of Content s


Provision for Income Taxes

$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.

$123M

¡é0.4% 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

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


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




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


Cognizant Technology Solutions			35			June 30, 2022 Form 10-Q

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. ~~In addition, as~~As of ~~March 31,~~June 30, 2022, we had cash, cash equivalents and short-term investments of $~~2,319~~2,320 million and available capacity under our credit facilities of approximately ~~$1,921~~$1,915 million.

The following table provides a summary of cash flows for the ~~three~~six months ended ~~March 31:~~June 30:


(in millions)	(in millions)	2022		2021		Increase / Decrease		(in millions)	2022		2021		Increase / Decrease
Net cash provided by (used in):	Net cash provided by (used in):							Net cash provided by (used in):
Operating activities	Operating activities	$	306	$	181	$	125	Operating activities	$	834	$	722	$	112
Investing activities	Investing activities	700		(538)		1,238		Investing activities	229		(1,259)		1,488
Financing activities	Financing activities	(600)		(340)		(260)		Financing activities	(1,050)		(768)		(282)

Operating activities

The increase in cash provided by operating activities for the ~~three~~six months ended ~~March 31,~~June 30, 2022 as compared to the ~~three~~six months ended ~~March 31,~~June 30, 2021 was primarily driven by higher income from ~~operations and the deferral of certain non-income tax payments due to COVID-19 pandemic regulatory relief in 2020, a portion of which was remitted in 2021.~~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 7274 days as of ~~March 31,~~June 30, 2022, 7071 days as of ~~March 31,~~June 30, 2021, and 69 days as of December 31, ~~2021.~~2021, increasing as revenue growth outpaced collections.

Investing activities

The net ~~cash~~cash provided by investing activities for the ~~three~~six months ended ~~March 31,~~June 30, 2022 was primarily driven by net maturities of investments, partially offset by capital expenditures. ~~Net~~Net cash used in investing activities for the ~~three~~six months ended ~~March 31,~~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 ~~three~~six months ended ~~March 31,~~June 30, 2022 as compared to the ~~three~~six months ended ~~March 31,~~June 30, 2021 was primarily driven by higher repurchases of common stock.


~~Cognizant Technology Solutions~~			30			~~March 31, 2022 Form 10-Q~~

~~Table of Contents~~

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 ~~March 31,~~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 ($~~171~~165 million at the ~~March 31,~~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 ~~March 31,~~June 30, 2022, we have not borrowed funds under this facility.

Capital Allocation ~~Framework~~


			Acquisitions

			Share Repurchases

			Dividend payments

We review our capital allocation framework on an ongoing basis, considering ~~the potential impacts of COVID-19 pandemic,~~ 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

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 1 010 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.


~~Cognizant Technology Solutions~~			31			~~March 31, 2022 Form 10-Q~~

~~Table of Contents~~

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

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;


~~Cognizant Technology Solutions~~			32			~~March 31, 2022 Form 10-Q~~

~~Table of Contents~~

•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.


Item 3. Quantitative and Qualitative Disclosures about Market Risk.

There have been no material changes in our quantitative and qualitative disclosures about market risk from those disclosed in Part II, Item 7A, Quantitative and Qualitative Disclosures about Market Risk, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 16, 2022.


Cognizant Technology Solutions			38			June 30, 2022 Form 10-Q

Table of Content s


Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our chief executive officer and our chief financial officer, evaluated the design and operating effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of ~~March 31,~~June 30, 2022. Based on this evaluation, our chief executive officer and our chief financial officer concluded that, as of ~~March 31,~~June 30, 2022, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

No changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended ~~March 31,~~June 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


Cognizant Technology Solutions			3339			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See Note 1 010 to our unaudited consolidated financial statements.

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the SEC on February 16, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Our stock repurchase program allows for the repurchase of up to $9.5 billion, excluding fees and expenses, of our Class A common stock through open market purchases, including under a 10b5-1 Plan or in private transactions, including through ASR agreements entered into with financial institutions, in accordance with applicable federal securities laws. The repurchase program does not have an expiration ~~date.~~date and has a remaining authorized balance of $1,375 million as of June 30, 2022. The timing of repurchases and the exact number of shares to be purchased are determined by management, in its discretion, or pursuant to a 10b5-1 Plan, and will depend upon market conditions and other factors.

During the three months ended ~~March 31,~~June 30, 2022, we repurchased $~~444~~300 million of our Class A common stock under our stock repurchase program. The stock repurchase activity under our stock repurchase program during the three months ended ~~March 31,~~June 30, 2022 was as follows:

Month Total Number
of Shares
Purchased Average
Price Paid
per Share Total Number of
Shares Purchased
as Part of Publicly
Announced
Plans or
Programs Approximate
Dollar Value of Shares
that May Yet Be
Purchased under the
Plans or Programs
(in millions)
January 1, 2022 - January 31, 2022 400,181 $ 85.86 400,181 $ 2,085
February 1, 2022 - February 28, 2022 2,168,039 87.39 2,168,039 1,896
March 1, 2022 - March 31, 2022 2,468,768 89.33 2,468,768 1,675
Total 5,036,988 $ 88.22 5,036,988


Month	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (in millions)
April 1, 2022 - April 30, 2022	—	$	—	—	$	1,675
May 1, 2022 - May 31, 2022	2,157,300	72.97		2,157,300	1,518
June 1, 2022 - June 30, 2022	2,053,758	69.42		2,053,758	1,375
Total	4,211,058	$	71.24	4,211,058

During the three months ended ~~March 31,~~June 30, 2022, we also purchased shares in connection with our stock-based compensation plans, whereby shares of our common stock were tendered by employees for payment of applicable statutory tax withholdings. For the three months ended ~~March 31,~~June 30, 2022, such repurchases totaled ~~0.3~~0.2 million shares at an aggregate cost of ~~$26~~$18 million.


Cognizant Technology Solutions			3440			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

Item 6. Exhibit Index

EXHIBIT INDEX
Incorporated by Reference
Number Exhibit Description Form File No. Exhibit Date Filed or Furnished Herewith
3.1
Restated Certificate of Incorporation, dated June 5, 2018
8-K 000-24429 3.1 6/7/2018
3.2
Amended and Restated Bylaws, as adopted on September 14, 2018
8-K 000-24429 3.1 9/20/2018
31.1
Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed
31.2
Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Filed
32.1
Certification of principal executive officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350
Furnished
32.2
Certification of principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350
Furnished
101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. Filed
101.SCH Inline XBRL Taxonomy Extension Schema Document Filed
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document Filed
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document Filed
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document Filed
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document Filed
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) Filed

Incorporated by Reference

Number

Exhibit Description

Form

File No.

Exhibit

Date

Filed or Furnished Herewith

3.1

Restated Certificate of Incorporation, dated June 5, 2018

8-K

000-24429

3.1

6/7/2018

3.2

Amended and Restated Bylaws, as adopted on September 14, 2018

8-K

000-24429

3.1

9/20/2018

10.1

2022 Form of Executive Employment and Non -Disclosure, Non-Competition, and Invention Assignment Agreement, to be entered into between the Company and certain Executive Officers

Filed

10.2

UK Form of Executive Employment and Non-Disclosure, Non-Competition, and Invention Assignment Agreement, between the Company and the following Executive Officer : Robert Walker

Filed

10.3

General Release and Severance Agreement between the Company and Gregory Hyttenrauch

Filed

31.1

Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed

31.2

Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Filed

32.1

Certification of principal executive officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350

Furnished

32.2

Certification of principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350

Furnished

101.INS

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

Filed

101.SCH

Inline XBRL Taxonomy Extension Schema Document

Filed

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Filed

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

Filed

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

Filed

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Filed

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Filed


Cognizant Technology Solutions			3541			~~March 31,~~June 30, 2022 Form 10-Q

Table of ~~Contents~~Content s

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 thereunto duly authorized.

Cognizant Technology Solutions Corporation

Date:

~~May 4,~~July 27, 2022

By:

/s/ BRIAN HUMPHRIES

Brian Humphries,

Chief Executive Officer

(Principal Executive Officer)

Date:

~~May 4,~~July 27, 2022

By:

/s/ JAN SIEGMUND

Jan Siegmund,

Chief Financial Officer

(Principal Financial Officer)


Cognizant Technology Solutions			3642			~~March 31,~~June 30, 2022 Form 10-Q


	Three Months Ended March 31, 2022

(in millions)	Financial Services		Healthcare		Products and Resources		Communications, Media and Technology		Total
Revenues
Geography:
North America	$	1,080	$	1,195	$	761	$	533	$	3,569
United Kingdom	151		44		132		126		453
Continental Europe	157		120		145		37		459
Europe - Total	308		164		277		163		912
Rest of World	140		33		92		80		345
Total	$	1,528	$	1,392	$	1,130	$	776	$	4,826

Service line:
Consulting and technology services	$	1,057	$	804	$	754	$	448	$	3,063
Outsourcing services	471		588		376		328		1,763
Total	$	1,528	$	1,392	$	1,130	$	776	$	4,826

Type of contract:
Time and materials	$	890	$	494	$	467	$	448	$	2,299
Fixed-price	557		618		572		292		2,039
Transaction or volume-based	81		280		91		36		488
Total	$	1,528	$	1,392	$	1,130	$	776	$	4,826