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Cognizant Reports Strong Second Quarter Results
Exceeds Revenue and Earnings Expectations

Cognizant Technology Solutions Corporation (NASDAQ: CTSH), a leading provider of IT services, today announced its financial results for the second quarter ended June 30, 2006.

  Highlights - Second Quarter 2006

  *  Quarterly revenue increased to $336.8 million, up 59% from the year-ago
     quarter.
  *  Quarterly diluted EPS on a GAAP basis was $0.37.
  *  Quarterly diluted EPS on a non-GAAP basis, excluding the impact of
     stock-based compensation expense, was $0.41, compared to $0.25 in the
     year-ago quarter.

Revenue for the second quarter increased to $336.8 million, up 18% sequentially from $285.5 million in the first quarter of 2006, and up 59% from $211.7 million in the second quarter of 2005. GAAP net income was $55.1 million, or $0.37 per diluted share. Net income for the second quarter increased to $61.0 million on a non-GAAP basis, or $0.41 per diluted share, compared to $36.0 million, or $0.25 per diluted share, in the second quarter of 2005. GAAP operating margin for the quarter was 18.0%. Non-GAAP operating margin was 20.0%, at the high end of the Company's targeted 19-20% range. Reconciliations of non-GAAP measures to GAAP operating income, net income, and EPS are included at the end of this release.

"We are very pleased with our strong second quarter results, driven by significant revenue growth across an expanding range of industries, service- offerings and geographies," said Lakshmi Narayanan, President and CEO of Cognizant. "As expected, our leadership in financial services, healthcare and life sciences, combined with our competitive expertise in newer verticals, allowed us to generate significant growth from our continually expanding client base. During the quarter we continued to experience strong demand for our full range of service offerings, particularly ERP and CRM, advanced solutions development, testing, data warehousing and infrastructure management. We are also pleased with the considerable traction we have gained in Europe, where the growth rate exceeded that of the rest of the Company this quarter."

Mr. Narayanan continued, "As Cognizant accelerates past the one-billion dollar revenue mark, our focus continues to be on preparing the Company for steadfast growth in 2007 and beyond. Today we have announced an organizational change that we believe will provide a strong foundation for managing that growth, including the appointment of Francisco D'Souza to President and Chief Executive Officer, effective as of January 1, 2007. Cognizant's strength lies in its operational excellence, and by enhancing the depth of our senior management team with leadership from seasoned Cognizant veterans, we are focused on maintaining our industry-leading strategy for growth well into the future."

2006 Outlook - Third Quarter & Full Year

Based on current visibility, the Company is now providing the following guidance:

  *  Third quarter 2006 revenue anticipated to be at least $363 million.
  *  Third quarter 2006 diluted EPS expected to be approximately $0.38 on a
     GAAP basis, and $0.42 on a non-GAAP basis, which excludes the impact of
     stock-based compensation expense.
  *  Fiscal 2006 revenue now anticipated to be at least $1.37 billion.
  *  Fiscal 2006 diluted EPS expected to be at least $1.45 on a GAAP basis.
  *  Fiscal 2006 diluted EPS expected to be at least $1.62 on a non-GAAP
     basis, which excludes the impact of stock-based compensation expense.
  *  Total headcount by end of 2006 expected to exceed 36,000.

"Our strong financial results are clearly the product of our strategic investments to differentiate Cognizant in the marketplace and in the eyes of our clients," said Gordon Coburn, Chief Financial Officer of Cognizant. "Our success in anticipating customer demand through ahead-of-the-curve investments in vertical expertise and service-area capabilities continues to generate high levels of client satisfaction and provide additional drivers of future growth. During the quarter, we also invested further in campus recruitment and training programs for staff members at all levels to ensure that Cognizant continues to attract a superior quality of employees and cultivate their development. As a result of our strong performance over the first half of the year, our confidence in our reinvestment strategy and the growing demand environment, we have increased our revenue and earnings expectations for Fiscal 2006."

Conference Call

Cognizant will host a conference call today, August 2, at 9:00 a.m. (ET) to discuss the Company's quarterly results. To listen to the call please dial (888) 652-6834 domestically or (706) 679-3288 internationally. The call will also be broadcast live via the Internet at Cognizant's web site, www.cognizant.com. Please go to the web site at least fifteen minutes prior to the call to register, download and install any necessary audio software. A replay will be made available on the web site at www.cognizant.com or by calling (800) 642-1687 for domestic callers and (706) 645-9291 for international callers and entering "3072892" from two hours after the end of the call until 11:59 p.m. (ET) on August 9, 2006.

About Cognizant

Cognizant (NASDAQ: CTSH) is a leading provider of IT services. Focused on delivering strategic information technology solutions that address the complex business needs of its clients, Cognizant uses its own on-site/offshore outsourcing model to provide applications management, development, integration, and reengineering; infrastructure management; business process outsourcing; and numerous related services, such as enterprise consulting, technology architecture, program management, and change management.

Cognizant's more than 31,000 employees are committed to partnerships that sustain long-term, proven value for customers by delivering high-quality, cost-effective solutions through its development centers in India and on-site client teams. Cognizant maintains P-CMM and SEI-CMM Level 5 assessments from an independent third-party assessor, was recently named one of Forbes' Best Small Companies in America for the fourth consecutive year, and ranked among the top information technology companies in BusinessWeek's Hot Growth Companies. Cognizant is a member of the NASDAQ-100 Index. Find additional information about Cognizant at www.cognizant.com.

This press release includes statements which may constitute forward- looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the accuracy of which are necessarily subject to risks, uncertainties, and assumptions as to future events that may not prove to be accurate. Factors that could cause actual results to differ materially from those expressed or implied include general economic conditions and the factors discussed in our most recent Form 10-K and other filings with the Securities and Exchange Commission. Cognizant undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

                COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
       CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

                  (In thousands, except per share data)

                                  Three Months Ended     Six Months Ended
                                       June 30,              June 30,
                                   2006        2005      2006        2005

  Revenues                       $336,836    $211,711  $622,315    $393,392

  Cost of revenues                188,320     117,768   346,908     215,762

  Gross profit                    148,516      93,943   275,407     177,630

  Selling, general and
   administrative expenses         80,044      46,126   146,749      87,536

  Depreciation and amortization
   expense                          7,801       5,449    14,831      10,539
  Income from operations           60,671      42,368   113,827      79,555

  Other income (expense):
  Interest income                   3,853       2,061     7,290       3,901
  Other income / (expense), net     1,508        (595)    1,467        (719)
  Total other income / (expense)    5,361       1,466     8,757       3,182

  Income before provision for
   income taxes                    66,032      43,834   122,584      82,737

  Provision for income taxes       10,961       7,802    20,349      14,727

  Net income                      $55,071     $36,032  $102,235     $68,010

  Basic earnings per share          $0.39       $0.27     $0.73       $0.50

  Diluted earnings per share        $0.37       $0.25     $0.68       $0.47

  Weighted average number of
   common shares outstanding      140,542     135,687   140,103     135,086

  Weighted average number of
   common and dilutive
   shares outstanding             150,493     146,554   149,924     146,187



                COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
   CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited)
                              (In thousands)

                                                June 30,        December 31,
                                                   2006              2005

  Assets

  Current Assets

    Cash and cash equivalents                    $203,105         $196,938

    Short-term investments                        265,095          227,063

    Trade accounts receivable, net of
     allowances of $2,962
     and $2,325, respectively                     227,985          153,971

    Unbilled accounts receivable                   38,274           22,725

    Deferred income tax assets, net                50,833           42,752

    Other current assets                           26,298           19,974

             Total Current Assets                 811,590          663,423

  Property and equipment, net                     179,277          146,982

  Goodwill                                         18,430           18,223

  Other Intangible assets, net                     15,414           16,277

  Deferred income tax assets, net                  10,779           17,247

  Other assets                                     10,576            7,741

  Total Assets                                 $1,046,066         $869,893

  Liabilities and Stockholders' Equity

  Current Liabilities

  Accounts payable                                $24,871          $16,420

  Accrued expenses and other liabilities          144,449          137,375

         Total Current Liabilities                169,320          153,795

  Other noncurrent liabilities                      2,553            1,953

  Total Liabilities                               171,873          155,748

  Stockholders' Equity                            874,193          714,145

  Total Liabilities and Stockholders'
   Equity                                      $1,046,066         $869,893



                COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
       CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                       Non-GAAP Financial Measures
                  (In thousands, except per share data)

                                                              Three Months
                                                                 Ended
                            Three Months Ended June 30,         June 30,
                             2006         2006        2006       2005
                          US GAAP  Adjustments    Non-GAAP      US GAAP

  Revenues              $336,836           $-     $336,836     $211,711

  Cost of revenues       188,320       (3,332)(a)  184,988      117,768

  Gross profit           148,516        3,332      151,848       93,943

  Selling, general and
   administrative
   expenses               80,044       (3,437)(a)   76,607       46,126

  Depreciation and
   amortization expense    7,801            -        7,801        5,449

  Income from operations  60,671        6,769       67,440       42,368

  Total other income /
   (expense)               5,361            -        5,361        1,466

  Income before provision
   for income taxes       66,032        6,769       72,801       43,834

  Provision for income
   taxes                  10,961          842(a)    11,803        7,802

  Net income             $55,071        5,927      $60,998      $36,032


  Diluted earnings
   per share               $0.37        $0.04        $0.41        $0.25

  Weighted average number
   of common and dilutive
   shares outstanding    150,493                   150,493      146,554


                                                               Six Months
                                                                 Ended
                                Six Months Ended June 30,       June 30,
                            2006          2006        2006       2005
                         US GAAP   Adjustments    Non-GAAP      US GAAP

  Revenues              $622,315           $-     $622,315     $393,392

  Cost of revenues       346,908       (6,479)(a)  340,429      215,762

  Gross profit           275,407        6,479      281,886      177,630
  Selling, general and
   administrative
   expenses              146,749       (7,892)(a)  138,857       87,536
  Depreciation and
   amortization expense   14,831            -       14,831       10,539
  Income from operations 113,827       14,371      128,198       79,555
  Total other income /
   (expense)               8,757            -        8,757        3,182
  Income before provision
   for income taxes      122,584       14,371      136,955       82,737
  Provision for income
   taxes                  20,349        1,975(a)    22,324       14,727
  Net income            $102,235       12,396     $114,631      $68,010

  Diluted earnings
   per share               $0.68        $0.08        $0.76        $0.47
  Weighted average number
   of common and dilutive
   shares outstanding    149,924                   149,924      146,187

In addition to its reported operating results in accordance with U.S. generally accepted accounting principles (GAAP), Cognizant has included in the table above non-GAAP operating measures that the Securities and Exchange Commission defines as "non-GAAP financial measures." Management believes that such non-GAAP financial measures, when read in conjunction with the Company's reported results, can provide useful supplemental information for investors analyzing period to period comparisons of the Company's results. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP column above for the three and six months ended June 30, 2006 reflects the following adjustment:

  (a) To exclude stock-based compensation expense under FAS 123R, and
      related income tax benefit, recorded during the three and six months
      ended June 30, 2006.

For 2006, the weighted average number of common and dilutive shares outstanding were calculated taking into account the requirements of FAS 123R.

SOURCE: Cognizant Technology Solutions Corporation

CONTACT: Gordon Coburn, Chief Financial Officer, +1-201-678-2712;
Investors: Gordon McCoun, Press: Brian Maddox/Scot Hoffman, Financial
Dynamics, +1-212-850-5600, shoffman@fd-us.com

Web site: http://www.cognizant.com/

Financial