Cognizant Technology Solutions Corporation announced its fourth quarter and full year 2016 financial results.

Highlights – Fourth Quarter 2016

• Quarterly revenue rose to $3.46 billion, up 7.1% from the year-ago quarter and 0.3% sequentially.
• Quarterly GAAP diluted EPS was $0.68, compared to $0.69 in the year-ago quarter.
• Quarterly non-GAAP diluted EPS was $0.87, compared to $0.80 in the year-ago quarter.

Revenue for the fourth quarter of 2016 rose to $3.46 billion, up 7.1% from $3.23 billion in the fourth quarter of 2015. GAAP net income was $416 million, or $0.68 per diluted share, compared to $424 million, or $0.69 per diluted share, in the fourth quarter of 2015. Non-GAAP diluted EPS was $0.87, compared to $0.80 in the fourth quarter of 2015. GAAP operating margin was 16.2% and non-GAAP operating margin1 was 18.7% for the fourth quarter of 2016.

“As we enter 2017, the time is right for us to accelerate the shift to digital services and solutions to meet the growing demands from our clients to transform their business models in the face of the rapid business and technology shifts disrupting their industries,” said Francisco D’Souza, Chief Executive Officer. “To meet this opportunity, we are evolving our business model to focus on aggressively scaling our digital capabilities, driving efficiencies in our core business, and launching a robust capital return program. We believe these changes will enable us to deploy our world-class team to best serve our clients and enhance value for our shareholders.”

Highlights – Full Year 2016

• Revenue increased to $13.49 billion, up 8.6% from 2015.
• GAAP diluted EPS was $2.55, compared to $2.65 in 2015.
• Non-GAAP diluted EPS was $3.39, compared to $3.07 in 2015.  

Revenue for 2016 increased to $13.49 billion, up 8.6% from $12.42 billion for 2015. GAAP net income for 2016 was $1.55 billion, or $2.55 per diluted share, compared to $1.62 billion, or $2.65 per diluted share, for 2015. Non-GAAP diluted EPS was $3.39 in 2016, compared to $3.07 in 2015. GAAP operating margin was 17.0% and non-GAAP operating margin was 19.5% for 2016.

First Quarter & Full Year 2017 Outlook

The Company is providing the following guidance:

• First quarter 2017 revenue expected to be in the range of $3.51 billion to $3.55 billion.
• First quarter 2017 non-GAAP diluted EPS2 expected to be at least $0.83.
• Full year 2017 revenue expected to be in the range of $14.56 billion to $14.84 billion.
• Full year 2017 non-GAAP diluted EPS expected to be at least $3.63.

 Plan to Accelerate Shift to Digital Services and Solutions and Enhance Shareholder Value

Today the Company announced a comprehensive plan to accelerate the shift to digital services and solutions, execute on operational opportunities to drive leverage in its cost structure and return significant capital to shareholders. Faced with business and technology shifts disrupting their industries, clients are both accelerating their adoption of digital services and solutions and, at the same time, optimizing their core systems and processes. This plan will allow the Company to leverage its position as a leader in the services sector and accelerate its shift to be a leading provider of digital services and solutions.