Cognizant Technology Solutions Corp. - School Of Business

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School of BusinessInvestment ProgramCognizant Technology Solutions Corp.September 24th, 2019Hunter BeaudoinMcKenzie ShearonFootnotesSpecial Events CoordinatorPerformance Analyst

CognizantSchool of BusinessInvestment ProgramTable of ContentsInvestment ThesisGeographic BreakdownCompany Overview and HistoryFinancial HighlightsLeadershipFinancial Guidance/StrategyCompany StrategySWOT AnalysisCompetitive LandscapeValuation/ModelsPrice HistoryRecommendationFootnotes

CognizantSchool of BusinessInvestment ProgramInvestment ThesisTransformation OfficeFuture Growth in Software ConsultingCustomer Relationship StickinessClient, Industry, and Geographical Diversification

CognizantSchool of BusinessInvestment ProgramCompany OverviewCognizant ConsultingCognizant DigitalBusiness Reshapes business models,modernizes products, and enhancescustomer experience to drive growthServices: AI, Digital ProductEngineering, Digital Strategy,Interactive, IoTSource: Cognizant IRCognizant DigitalOperations Reinvents and manages clients’most essential business processeswith new ways of workingServices: Enterprise Services,Industry and Platform Solutions, andIntelligent Process AutomationCognizant DigitalSystems & Technology Simplifies, modernizes, and securesthe IT infrastructure and applicationsthat are the backbone of clients’businessServices: Application Services,Cloud Enablement, CognizantInfrastructure Services, CognizantSecurity, Core Modernization, DigitalProduct Engineering, EnterpriseApplication Services, and QualityEngineering and Assurance

CognizantSchool of BusinessInvestment ProgramCompany OverviewRevenue Segment Mix14.60%22.40%27.40%Financial ServicesHealthcareProducts and ResourcesCommunications, Media, and TechnologySource: Cognizant IR

CognizantSchool of BusinessInvestment ProgramLeadershipBrian HumphriesChief Executive Officer CEO of VodafoneGroup ‘17-’19Previous experience atDell and HewlettPackardYoungest CEO of anylarge IT service firmSource: Cognizant IRKaren McLoughlinChief Financial Officer Been with CTSH for 16years (CFO for 7)Sits on Best Buy Boardof DirectorsFinancial managementexperience at Spherionand Ryder SystemMalcolm FrankPresident of CognizantDigital Business Been with CTSH for 14yearsAuthor, entrepreneur,and well-knownspeakerSits on FactSet Boardof DirectorsSrinivasanVeeraraghavacharyChief Operating Officer Been with CTSH for 21years (COO for 3)Leadership roles inProduct & Resourcesand Banking &Financial Services

CognizantCompany StrategyInvest in Digital Capabilities Align digital-related skills in business, operations,and systems & technologyExpand into Global Markets Develop depth in existing industries and expand intounderpenetrated marketsStrategic Acquisitions Continue acquisitions to beef up its digitalizationexpertise and bolster its healthcare offeringsInvest in their Talent Base Significant reinvestment into onshore and offshoresenior leaders, industry experts, and MBA’sSource: Cognizant 10KSchool of BusinessInvestment Program

CognizantSchool of BusinessInvestment ProgramCompany StrategyFundamental totheir businessmodel, culture,operatingphilosophy, andorganizationalhierarchyHybrid model ofconsulting firms andoffshore providersTwo-in-a Box (TIB) Relationship ModelSource: Cognizant IRRemoves the “death bydistance”Onsite relationshipmanagement team withstrong industry backgroundCTSHEliminates “us” and “them”More than 90%of annualrevenue fromreturning clientsDelivery ExcellenceClient FocusClient30% of the entireCognizant project teamresides at the client’ssite

CognizantSchool of BusinessInvestment ProgramCompany History Founded in 1994 as the technology arm of The Dun & Bradstreet Corporation Conducted IPO in 1998, raising 34 million Hit high growth in the 2000s and transitioned into a digitalization specialtyTransition to Digitization ThroughAcquisitionsSource: Cognizant IR20172017Brilliant hTechnologies

CognizantSchool of BusinessInvestment ProgramCompetitive Landscape Headquartered in New Delhi, India143,900 employeesFounded in 1976Software development, internettelephony, and component basedobject technologiesSource: HCL, Infosys, Wipro Sites Headquartered in Pune, India231,000 employeesFounded in 1981AI-powered core that prioritize theexecution of changeAgile digital solutions at scale frominnovation ecosystem Headquartered in Bengaluru, IndiaFounded in 1945195,000 employeesHarness the power of cognitivecomputing, hyper-automation,robotics, cloud, analytics andemerging technologies

CognizantSchool of BusinessInvestment ProgramPrice HistoryEarningsMiss &DowngradesHarderHitting TaxLaw 85EarningsBeat 80 75 70 65 60 55 50 45 40Source: BloombergQ4 Rev MissCompetitorQoQ BFSILossEarningsBeatHumphriesNamed CEO

CognizantSchool of BusinessInvestment ProgramGeographic Revenue Breakdown31Source: Cognizant IR21

CognizantSchool of BusinessInvestment ProgramSector Financial HighlightsKey Drivers in the Industry Strong corporate profit growth and constantly risinginvestment in computers and software Heightening security concerns One of the largest and most resilient industries in the USeconomyIT Services Revenue ( 0430,000410,000390,000370,000350,0002010Source: CompTIA, IBISWorld2013201620192022

Cognizant2018 Financial HighlightsSource: Conoco IRSchool of BusinessInvestment Program

CognizantSchool of BusinessInvestment ProgramEPS Financial HighlightsCash Flow & Capital Allocation1.30%CTSH Dividend YieldSource: Conoco IR 738MShare Value to beRepurchased15

CognizantSchool of BusinessInvestment ProgramQ2 Financial Highlights 4.14BQ2 Business Segment PerformanceRevenue 3% 0.90GAAP EPSFinancial Services 0.3%Healthcare-1.9%Products and Resources 10.4% 15%Communications, Media, & Technology 12% 509M 0.94Net IncomeNon-GAAP EPS 11%Source: Conoco IR-10%

CognizantSchool of BusinessInvestment ProgramFinancial StrategyTurn around Banking & Non-lifeSciences Portion of HealthcareTransformation OfficeAccelerateRevenueGrowthShift to DigitalSource: Cognizant IRReduceCostsZenith Technologies Acquisition

CognizantSchool of BusinessInvestment ProgramFinancial GuidanceQ3 Guidance Revenue growth 3.8-4.8% YoYAdjusted Diluted EPS 3.95Align headcount growth withrevenue growth (align withconstant currency revenueguidance)Enhance oversight ofsubcontractorsSource: Conoco IRFull-Year Guidance Revenue growth expected to 3.94.9% YoYIncreased Adjusted Diluted EPSguidance to 3.92- 3.98Muted outlook for banking andhealthcareImproved margins as coststructure is aligned with revenueexpectationsLong-Term Guidance 65mm savings through actions atsenior level to simplify operationsImprove Cash ConversionContinue stock repurchaseprogram

CognizantSchool of BusinessInvestment ProgramSWOT AnalysisStrengths Long-term Demand Environment Client SatisfactionWeaknesses Concentration of business in North Americanmarkets Client Switching Costs Employee Attrition Reinvestment Strategy Restricted depth and infrastructure in Managementconsulting business as compared to its peersOpportunitiesThreats Emerging Technologies Highly competitive marketplace Geographical Expansion May be a target of takeover by bigger firms like IBM, Transformation OfficeAccenture Earnings volatility due to foreign exchangemovements

Valuation Overview Banking/HealthcareRevenue SegmentsHeadcount GrowthTCV on LegacyProgramsAcquisitionsTax GuidanceSource: Proprietary ModelSchool of BusinessInvestment Program

Valuation OverviewSensitivity AnalysisSource: Proprietary ModelSchool of BusinessInvestment ProgramCompetitor Ratio Analysis

CognizantSchool of BusinessInvestment ProgramMonte Carlo & Portfolio VaRPortfolio VaRMonte Carlo SimulationMedianPrice 78.11MeanPrice 78.54Source: Mark WoldExcludingCTSH: 1.40%IncludingCTSH: 1.44%

CognizantSchool of BusinessInvestment ProgramRecommendationCurrent Portfolio AllocationFDX IYHHD1% 2%2%Proposed Portfolio AllocationFDX IYHHD1% DR9%LADR9%V12%IGSB24%V12%IGSB24%NEE12%Source: BloombergNEE12%

School of BusinessInvestment ProgramThank You!Footnotes

School of BusinessInvestment ProgramAppendixFootnotes

AppendixSchool of BusinessInvestment Program

Cognizant Consulting. Cognizant Digital Business. Cognizant Digital Operations. Cognizant Digital Systems & Technology Reshapes business models, modernizes products, and enhances customer experience to drive growth Services: AI, Digital Product Engineering, Digital Strategy, I

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Cognizant Technology Solutions (CTS ) About the Company Cognizant technology solutions is an American Multinational corporation that provides custom information technology, consulting and business

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