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Cognizant Reports Record Fourth Quarter Results
Industry-leading Growth Continues Company Forecasts Revenue to Exceed $2 Billion in 2007

Cognizant Technology Solutions Corporation (NASDAQ: CTSH), a leading provider of IT services, today announced its financial results for the fourth quarter and full-year ended December 31, 2006.

  Highlights - Fourth Quarter 2006
  -- Quarterly revenue increased to $424.4 million, up 65% from the year-ago
     quarter.
  -- Quarterly diluted EPS on a GAAP basis was $0.46, compared to $0.39 in
     the year-ago quarter.
  -- Quarterly diluted EPS on a non-GAAP basis was $0.50, excluding
     stock-based compensation expense of $0.04, compared to $0.31 in 2005,
     excluding a one-time income tax benefit of $0.08 relating to the
     repatriation of earnings under the American Jobs Creation Act.

Revenue for the fourth quarter of 2006 increased to $424.4 million, up 12% sequentially from $377.5 million in the third quarter of 2006, and up 65% from $256.9 million in the fourth quarter of 2005. GAAP net income was $69.5 million, or $0.46 per diluted share, compared to $57.7 million, or $0.39 per diluted share, in the fourth quarter of 2005. GAAP operating margin for the quarter was 18.0%. Excluding stock based compensation expense of $8.1 million, non-GAAP operating margin was 19.9%, at the high end of the Company's targeted 19-20% range. Reconciliations of these non-GAAP financial measures to GAAP operating results and diluted EPS are included at the end of this release.

  Highlights - Full Year 2006
  -- Revenue increased to $1.424 billion, up 61% compared to 2005.
  -- Diluted EPS on a GAAP basis was $1.55, compared to $1.13 in 2005.
  -- Diluted EPS on a non-GAAP basis was $1.72, excluding stock-based
     compensation expense of $0.17, compared to $1.05 in 2005, excluding a
     one-time income tax benefit of $0.08 relating to the repatriation of
     earnings under the American Jobs Creation Act.

Revenue for 2006 increased to $1.424 billion, up 61% from $885.8 million in 2005. GAAP net income was $232.8 million, or $1.55 per diluted share, compared to $166.3 million, or $1.13 per diluted share in 2005. GAAP operating margin was 18.2%. Excluding stock based compensation expense of $29.9 million, non-GAAP operating margin was 20.3%. Reconciliations of these non- GAAP financial measures to GAAP operating results and diluted EPS are included at the end of this release.

Business Highlights

"We are very pleased with our record fourth quarter and full-year 2006 results," said Francisco D'Souza, President and CEO of Cognizant. "During the quarter, we capitalized on the escalating demand for our entire portfolio of services and leveraged our industry expertise to win many new clients. We performed impressively in several verticals where we continue to make strategic investments -- including healthcare and media/information services. We continue to see strong growth in our newer customer markets, particularly Continental Europe, where business more than doubled in the last year."

D'Souza continued, "Our strong financial performance in the quarter and throughout 2006, coupled with our track record of industry-leading growth, is the result of the steadfast execution of our strategy, as we converted investments in our verticals, solutions and geographies into significant growth opportunities. This reinvestment strategy sets us apart in the marketplace, especially in the eyes of our customers and prospective clients. We continue to build cutting-edge expertise and new capabilities across our global platform, enhancing our ability to drive tangible returns on our clients' IT investments and, ultimately, make their businesses stronger. We believe that our growth strategy and strong leadership team around the world will continue to drive strong performance in 2007."

2007 Outlook - First Quarter & Full Year

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

  -- First quarter 2007 revenue anticipated to be approximately $448
     million, up 57% compared to the first quarter of 2006.
  -- First quarter 2007 diluted EPS expected to be $0.47 on a GAAP basis,
     and $0.52 on a non-GAAP basis, which excludes a stock-based
     compensation expense of $0.05.
  -- Fiscal 2007 revenue anticipated to be at least $2.04 billion.
  -- Fiscal 2007 diluted EPS expected to be at least $2.10 on a GAAP basis,
     and at least $2.31 on a non-GAAP basis, which excludes a stock-based
     compensation expense of $0.21.
  -- Total headcount by end of 2007 expected to reach at least 56,000.

"As demand for our services has escalated, we have maintained our long-term focus on expanding our strategic platform, enabling us to capture that demand and manage the Company's industry-leading growth," said Gordon Coburn, Chief Financial and Operating Officer. "Investment in recruitment, retention and training are central to our strategy. We added a net total of almost 4,500 employees in the fourth quarter and more than 14,500 employees in 2006 overall. We are also making investments in our infrastructure in India and expanding into more geographies that enable us to tap new sources of talent. For example, we recently opened a development center in Kochi, our eighth city in India. We are also making steady, long-term investments in China, as we continue to expand our global delivery platform. Based on the positive demand environment and the strength of our growth platform, we believe that Cognizant will continue to outpace our overall market in 2007."

Conference Call

Cognizant will host a conference call February 5, 2007 at 10:00 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 "6630289" from two hours after the end of the call until 11:59 p.m. (ET) on February 12, 2007.

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 has more than 40,000 employees who 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, SW-CMM and CMMI Maturity Level 5 assessments from an independent third-party assessor and ranked among the top information technology companies in Business Week's Hot Growth Companies. Cognizant is a member of the NASDAQ-100 Index and the S&P 500 Index. Find additional information about Cognizant at www.cognizant.com.

Forward-Looking Statements

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.

About Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with GAAP, this press release includes the following measures defined by the Securities and Exchange Commission as non-GAAP financial measures: non-GAAP operating margin and non-GAAP diluted earnings per share. These non-GAAP 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 measures used by other companies. In addition, these non-GAAP measures, the financial statements prepared in accordance with GAAP and reconciliations of Cognizant's GAAP financial statements to such non-GAAP measures should be carefully evaluated.

For its internal management reporting and budgeting purposes, Cognizant's management uses financial statements that do not include stock-based compensation expense related to employee stock options and employee stock purchases for financial and operational decision making, to evaluate period- to-period comparisons and for making comparisons of Cognizant's operating results to that of its competitors. Moreover, because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use when adopting FAS 123R, Cognizant's management believes that providing a non-GAAP financial measure that excludes stock-based compensation allows investors to make additional comparisons between Cognizant's operating results to those of other companies. In addition, management excluded the income tax benefit related to the repatriation of foreign earnings under the American Jobs Creation Act in its non-GAAP financial measures since this temporary tax incentive is not likely to recur. Accordingly, Cognizant believes that the presentation of non-GAAP operating margin and non-GAAP diluted earnings per share, when read in conjunction with the company's reported results, can provide useful supplemental information to investors and management regarding financial and business trends relating to its financial condition and results of operations.

A limitation of using non-GAAP operating margin and non-GAAP diluted earnings per share versus operating margin and diluted earnings per share calculated in accordance with GAAP is that non-GAAP operating margin and non-GAAP diluted earnings per share exclude costs, namely, stock-based compensation, that are recurring. Stock-based compensation has been and will continue to be for the foreseeable future a significant recurring expense in Cognizant's business. Management compensates for this limitation by providing specific information regarding the GAAP amounts excluded from non-GAAP operating margin and non-GAAP diluted earnings per share and evaluating such non-GAAP financial measures with financial measures calculated in accordance with GAAP.

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

                    (In thousands, except per share data)

                                Three Months Ended         Years Ended
                                    December 31,           December 31,
                                 2006        2005       2006         2005

  Revenues                     $424,430    $256,902  $1,424,267    $885,830

  Cost of revenues (exclusive
   of depreciation and          232,588     135,978     787,923     479,915
  amortization shown
   separately below)

  Selling, general and
   administrative expenses      105,019      64,604     343,238     206,899

  Depreciation and
   amortization expense          10,471       5,280      34,163      21,400
  Income from operations         76,352      51,040     258,943     177,616

  Other income (expense):
  Interest income                 5,538       2,860      17,615       8,982
  Other income / (expense), net     397        (737)      1,253      (1,326)
  Total other income /
   (expense)                      5,935       2,123      18,868       7,656

  Income before provision for
   income taxes                  82,287      53,163     277,811     185,272

  Provision (benefit) for
   income taxes                  12,754      (4,510)     45,016      19,006

  Net income                    $69,533     $57,673    $232,795    $166,266

  Basic earnings per share        $0.49       $0.42       $1.65       $1.22

  Diluted earnings per share      $0.46       $0.39       $1.55       $1.13

  Weighted average number of
   common shares outstanding    142,021     138,617     140,858     136,494

  Weighted average number of
   common and dilutive
   shares outstanding           151,566     147,924     150,562     146,895



                  COGNIZANT TECHNOLOGY SOLUTIONS CORPORATION
  Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Measures
                    (In thousands, except per share data)

                    Three Months Ended             Three Months Ended
                        December 31,                  December 31,
                  2006     2006        2006     2005     2005        2005
                  GAAP  Adjustments  Non-GAAP   GAAP  Adjustments   Non-GAAP

  Income from
   operations   $76,352   $8,093 (a)  $84,445   $51,040       $-    $51,040

  Operating
   margin          18.0%     1.9%(a)     19.9%     19.9%       -       19.9%

  Diluted earnings
   per share      $0.46    $0.04 (b)   $ 0.50    $ 0.39   $(0.08)(e) $ 0.31


                        Year Ended                    Year Ended
                        December 31,                  December 31,
                  2006     2006        2006     2005     2005        2005
                  GAAP  Adjustments  Non-GAAP   GAAP  Adjustments  Non-GAAP

  Income from
   operations  $258,943  $29,934 (c) $288,877 $177,616      $-    $177,616

  Operating
   margin          18.2%     2.1%(c)     20.3%    20.1%      -        20.1%

  Diluted earnings
   per share      $1.55    $0.17 (d)    $1.72    $1.13  $(0.08)(e)   $1.05


  (a) Adjustments to exclude stock-based compensation of $8,093 from income
      from operations of which $3,480 was reported in cost of revenues and
      $4,613 was reported in selling, general and administrative expenses in
      our unaudited condensed consolidated statements of operations.
  (b) Adjustments to exclude the per share effect of stock-based
      compensation expense net of the related tax benefit of $1,399.
  (c) Adjustment to exclude stock-based compensation of $29,934 from income
      from operations of which $13,400 was reported in cost of revenues and
      $16,534 was reported in selling, general and administrative expenses
      in our unaudited condensed consolidated statement of operations.
  (d) Adjustment to exclude the per share effect of stock-based compensation
      expense net of the related tax benefit of $3,915.
  (e) To exclude one-time income tax benefit of $12,411 or $0.08 per diluted
      share related to the repatriation of $60,000 of Indian earnings under
      the American Jobs Creation Act of 2004.



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

                                               December 31,   December 31,
                                                   2006          2005
  Assets

  Current Assets

    Cash and cash equivalents                    $265,937       $196,938

    Short-term investments                        382,222        227,063

    Trade accounts receivable, net of
     allowances of $3,719
     and $2,325, respectively                     259,210        153,971

    Unbilled accounts receivable                   39,265         22,725

    Deferred income tax assets, net                61,257         42,752

    Other current assets                           32,500         19,974

             Total Current Assets               1,040,391        663,423

  Property and equipment, net                     220,154        146,982

  Goodwill                                         27,190         18,223

  Intangible assets, net                           20,463         16,277

  Deferred income tax assets, net                   1,024         17,247

  Other assets                                     16,759          7,741

  Total Assets                                 $1,325,981       $869,893

  Liabilities and Stockholders' Equity

  Current Liabilities

  Accounts payable                                $27,839        $16,420

  Deferred revenue                                 19,401         14,707

  Accrued expenses and other liabilities          202,263        122,668

         Total Current Liabilities                249,503        153,795

  Other noncurrent liabilities                      2,979          1,953

  Total Liabilities                               252,482        155,748

  Stockholders' Equity                          1,073,499        714,145

  Total Liabilities and Stockholders' Equity   $1,325,981       $869,893

First Call Analyst:
FCMN Contact: christina.corcoran@fd.com

SOURCE: Cognizant Technology Solutions Corporation

CONTACT: Gordon Coburn, Chief Financial & Operating Officer,
+1-201-678-2712; or Investors: Gordon McCoun, or Press: Brian Maddox/Scot
Hoffman, all of Financial Dynamics, +1-212-850-5600, scot.hoffman@fd.com

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

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