Julie Huang, Financial Dynamics Lakshmi Naravanan, President and Chief Executive Officer Francisco D’Souza, Chief Operating Officer Gordon Coburn, Chief Financial Officer

Rod Bourgeois, Sanford C. Bernstein & Co Ed Caso, Wachovia Securities Joseph Vafi, Jefferies & Co. Christine Savino, JPMorgan George Price, Stifel, Nicolaus & Company Julio Quinteros, Goldman Sachs

Good morning, my name is Cynthia and I will be your conference operator today. At this time, I would like to welcome everyone to the Cognizant Technology Solutions 1st Quarter 2006 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press “8” then the number “1” on your telephone keypad; if you would like to withdraw your question, press “*’ then the number “2” on your telephone keypad. I would now like to turn today’s call over to Julie Huang with Financial Dynamics for opening remark.

Julie Huang, Financial Dynamics: Thank you, Operator and good morning everyone. By now you should have received a copy of the company’s 1st Quarter 2006 Earnings Release. If you have not, please call our offices at (212) 850-5600 and we will be sure to get you a copy sent to you. On the call today, we have Lakshmi Naravanan, President and Chief Executive Officer, Francisco D’Souza, Chief Operating Officer, and Gordon Coburn, Chief Financial Officer of Cognizant Technology Solutions. Before we begin, I’d like to remind you that some of the comments made on today’s call and some of the responses to your questions may contain certain forward-looking statements. These statements are subject to the risks and uncertainties as described in the company’s Earnings Release and other filings with the SEC. I’d now like to turn the call over to Lakshmi. Lakshmi, please go ahead. Lakshmi Naravanan, President and Chief Executive Officer: Thank you, Julie and good morning everyone. Thank you for joining us today for Cognizant’s 1st quarter 2006 Earnings Call. This morning, I will provide an overview of the highlights of our 1st quarter and discuss the key drivers of our financial performance. I’ll also discuss the investments that we have made steadily making in the business to ensure that we continue to effectively manage our industry leading growth while producing consistently strong results across our key financial and operating matrix. I’ll be joined on today’s call by our Chief Operating Officer, Francisco D’Souza, who’ll give color on some of the operational highlights in the quarter and investments we are making in our infrastructure, and our CFO, Gordon Coburn will take you through our numbers in greater detail. We are extremely pleased with the performance of our business in the 1st quarter. While our numbers are outstanding, what is more significant is how we achieved these results. Continued strong performance of our largest verticals was augmented by strong growth in our new verticals where we have been making significant investments. This performance was also enhanced by the investments we have made in our client relationships, delivery organization, new services, and the development of our growing management team which contributed to continued delivery excellence. As we said in our last conference call, we began the year with all of the required resources firmly in place to sustain our momentum in 2006 and our outstanding 1st quarter results are a testament to the consistent execution of our strategy. Furthermore, our firm continues to outpace the market on strength and our confidence in our ability to deliver another exciting year of growth for Cognizant. Turning to our 1st quarter results, we exceeded our internal expectations and guidance to investors generating 285 points $5 million in revenue which was $10.5 million about our guidance. This represented an increase of 57% from the 1st quarter of 2005. GAAP EPS was $0.32 for the quarter, non-GAAP EPS which excludes stock based compensation expense in the 1st quarter was $0.36 compared to $0.22 in the 1st quarter of last year. We also added a total of 32 new clients in the quarter - five of which have considered strategic and have the potential to generate between $5 million and $40 million a month in annual revenue for Cognizant over the long term. Because revenue was ahead of our expectations this quarter, our GAAP operating margin was 18.6% and a non-GAAP operating margin was a robust 21.3% about our long term non-GAAP target range of 19-20%. We intend to use this out performance to accelerate investments over the next several quarters to remain consistent with our long standing development strategy. Three primary factors where the drivers behind our success in the 1st quarter - first we delivered strong growth across a broader range our vertical practice areas especially in our new verticals including telecom, media entertainment, and new technology verticals; secondly, we saw strong demand for strategic applications development initiatives as well as increased discretionary spending which further enabled us to successfully leverage our expanding set of integrated services to filter the unique needs of our growing customer base; and lastly, we continue to deliver high levels of client satisfaction through our inherent customer centric focus which enabled us to significantly expand existing customer relationships during the quarter and secure new client wins. Focusing on each of these drivers in more detail, we further strengthened our leadership position in our fastest growing verticals with an exceptionally strong performance in healthcare and life sciences which posted a 16% growth from the 4th quarter and 77% growth from the 1st quarter of 2005. This growth was lead by our life sciences practice as we continue to deepen our relationships with 7 of the world’s largest pharmaceutical companies. We are also particularly pleased with the strong decisions of some our more recently develop verticals such as media, new technology, and telecommunications all of which have generated substantial sequential and year-over-year growth as a result of our investments in senior level industry expertise and expansion of our service offerings over the past year. Media, which is an industry awakening to be offshore trend roughly doubled from the year ago quarter. Our new technology verticals, which consists of software product companies and global firms with sizable online businesses continue to build momentum from its strong run at the end of 2005 posting approximately 30% sequential growth through our work and significant web to dot org another developed initiative. Telecom also gained traction during the quarter as a result of the resources added from our integration of (inaudible) which as you know we acquired in the second quarter of last year. The success of vertical strategy is also evident in the range of our strategic client wins during the quarter. We won five new strategic clients spread across financial services, healthcare, manufacturing, media, and new technology. The second driver of our 1st quarter performance was our ability to successfully leverage our expanding portfolio of integrated services. Our strategy is to provide our customers with a complimentary suit of services that allows us to strengthen their businesses; from business analysis and strategy evaluation to applications development and implementation. Our success with this strategy was evident in our 1st quarter results as we experience escalating demand for strategic development work from both new and existing clients capturing both discretionary ideal spending and planned technology upgrade cycles. For example, for one of the large healthcare company’s we have a large team working on an integrated set of services that include application development, a platform development and maintenance initiatives, as well as delivery of services using the platform. Part of the large financial services customer, we have an engagement to transform the technology platform to deliver their services in an interactive manner to their customers. This is an engagement where are business and technology consulting group and the application development groups are collaborating in an integrated seamless manner. We posted healthy double digit sequential growth across our portfolio of services including ERP, TRM, testing, database housing, and our advanced solutions group. As we said on our last conference call, we have continued to aggressively invest in our ERP practice particularly around SAP. This quarter we announced the opening of our SAP net weaver test center in our Banglo facility. Our strong partnership with SAP and demonstrated success in implementation including technology migrations, upgrades, and custom development, we secured several new client wins during the quarter of increasing scale and complexity. For example, we announced that (inaudible) has chosen Cognizant to optimize its supply chain network through strategic ERP and CRM initiatives. Ultimately, our integrated set of service offerings allows us to maximize the value we can add to our clients business and also generates opportunities to cross sell our services and expand or client relationships, both of which contribute to the ongoing success of the company. This brings us to the third catalyst behind our strong performance – our steadfast commitment to client service driven by our long standing strategies of reinvestment in client facing capabilities. During the 1st quarter, we continue to deliver high level of client satisfaction which is supported by our recently completed annual customer satisfaction survey. Our clients commended us for our overall dedication to quality service as our satisfaction scores remained on there historically high phase. In particular, our clients noted, the efficiency of our delivery model, the caliber of our technical expertise, and deep understanding of their businesses and ultimately our ability to apply or expertise in order to drive significant value. To take us through the details our customer survey, I’ll now turn the call over to Frank, who’ll also give color on some of the operational highlights in the quarter including investments we are making in our infrastructure to manage future growth. Francisco D’Souza, Chief Operating Officer: Thanks, Lakshmi and good morning everyone. Let me start with the customer satisfaction survey that Lakshmi referred to. Through this survey, we received many comments from our clients that truly captured the Cognizant customer experience. Some of these comments focused on our ability to scale to the needs of our clients, with one client stating – if you need to ramp up a large project, Cognizant is the one to go do, they have a phenomenal business model – and many highlighted our unique culture as key to our partnership and growth with them. These clients appreciate our approach of flexibility or do whatever it takes attitude and our transparency and openness. For example, one client stated – they are constantly jumping through hoops and making adjustments. They are willing to do that, we know we would not necessarily get that from another vendor – while another client shared – a willingness to be transparent and open and let us interact directly was very important. All of this adds up to the Cognizant customer experience and with our high customer satisfaction scores and growth within our strategic clients, this approach has been key to our strong results. We used the feedback gained from the survey to enhance the quality and consistency of service that we provide to our customers as well as to identify any new areas of investment that would enhance our ability to effectively serve them. Ultimately, the survey confirmed the high level of customer satisfaction that has allowed us to deepen many of the strategic clients brought on board over the last several years and unlocked the tremendous growth potential across our client base. I’d like to now briefly focus on three operational highlights to illustrate how we are managing our exceptional performance across the company. Our success in recruiting, our talent management and development, and our geographic expansion – with recruiting as Lakshmi mentioned earlier, we continue to invest strategically in building our team in order to have the capacity and resources to meet the rapidly growing demand for Cognizant services. In the 1st quarter we increased our headcount by 10% sequentially adding a net of 2,400 employees which brings our global headcount to 26,750. To our highly selective campus program, we constantly comb the top universities and graduate school around the globe to further expand our broad foundation of talent. From recent college graduates to MBA’s; as an example during the 1st quarter, we hired approximately 200 business school graduates, nearly 10% of our net additions in the quarter. In addition to recruiting from campuses, we also recruit experienced talent from the marketplace. We do this selectively in order to compliment or existing teams around the globe with industry geographic or specific technical or management skills. It is interesting to note that over 1/3 of our experienced hiring comes from referrals from existing Cognizant employees - a testament to the fact that our employees consider Cognizant a great place to work and are willing to recommend their friends and past colleagues to us. Through our recruiting program, we strengthen our leadership team adding seasoned professionals including senior level architects, program managers, and key client partners in all our industry practices. In addition, we have significantly added to our European management team. I am also happy to report that all of our efforts relating to our people resulted in turn over including both voluntary and involuntary of just over 11% annualized during the 1st quarter. This is the lowest rate that we have experienced since 2003 and reflects our continued efforts to make Cognizant a terrific place for people to work. In addition to hiring new associates, we continue to proactively manage our growth through investments in training and leadership programs for staff at all levels. Cognizant Academy, our in-house training and development division, continues to support the advancement of our people. We know that our ability to quickly train and retrain our associates is key to our ability to manage our growth. To give you some sense of our training efforts, during the quarter Cognizant Academy delivered almost 1 million hours of classroom training both to new recruits and to existing employees. In continuing with our drive to get our associates around the world certified by externally recognized independent bodies, our employees received about 880 external certifications in the 1st quarter. These certifications covered a range of areas including industry domain certification, project and program management certifications, and various external technical certifications. We also recently launched two important company wide leadership development programs to focus on the crucial development of our management talent and our client relationship management talent. High Five, our leadership development program, reflects industry best practices for high potential leadership development. High Five is focused on developing leaders through career movement, coaching, training, and external education. Closely linked to High Five is our relationship management center, the RMC; which seeks to develop individuals who help create the Cognizant client experience. Cognizant’s relationship managers are key to our business model and our continued ability to grow the business. As such, RMC is a continuing education program to ensure that these critical individuals have the core skills, knowledge, and style to be effective. Perhaps most importantly, the RMC seeks to ensure that the Cognizant customer experience is uniformed across the company. The third operational focus during the quarter was our continued investment in expanding our geographical presence to meet our clients’ needs in respective of where they operate. We believe that having the right people in the right locations around the world will support our growth over the long term. For example Europe is clearly awakening to the offshore trend with a versioning demand for high level application development, maintenance, and DPO work. We continue to make local hires throughout Europe and have also redistributed senior talent from other parts of the world to build strength in Europe. We now have strong teams dedicated to our horizontal and industry vertical businesses located in most major geographic markets of Europe. This expanded presence has enabled us to secure a number of wins in Europe including one key strategic win in continental Europe in the manufacturing sector during the 1st quarter. The scale of our operations in India, North America, and Europe coupled with our gradually expanding presence in China ensure that we are able to meet the needs of the largest and most sophisticated companies across the globe. To sum up our progress in the quarter, we are continuously building out our infrastructure, evaluating and implementing strategies to expand the range of our talent, augmenting our geographic markets, and enhancing our management processes to better our clients and sustain our growth. With that I’d like to turn the call back over to Lakshmi. Lakshmi Naravanan, President and Chief Executive Officer: Thanks, Frank. As I said earlier we are very pleased with our strong start to 2006. We recognize that our financial success to date on industry leading rate of growth is dependent upon both the consistent execution of our strategy and as we are focused on the new investments we are making in the business to sustain our momentum. The foundation of both of these continues to be our customer centric focus which shapes our corporate culture, our operations, and our investments. We are clearly benefiting from the increased discretionary spending by our customers. We believe that as the market increases its technology spent to gain a competitive advantage, we will get a fair share of the increased spreads. With that, I’ll request Gordon to take us through the numbers in detail, Gordon. Gordon Coburn, Chief Financial Officer: Thank you, Lakshmi and good morning to everyone. I’d like to spend some additional time on the 1st quarter and then discuss our financial expectations for Q2 of this year as well as full-year 2006. Revenue for the 1st quarter significantly exceeded our prior guidance due to continued application management ramp up of clients won over the last few years and more importantly continued greater than anticipated strength in discretionary development spending, a trend that started for us in the 2nd quarter of 2003. Revenue grew 11% sequentially and 57% year-over-year. As the quarter proceeded, we continue to see healthy volume growth across a broad range of services and industries. Our core businesses remain vibrant and our pipeline is robust. During the quarter, our financial services segment, which includes our practices and insurance, banking, and transaction processing grew by more than $46 million year-over-year and represented 48% of revenue for the quarter. Healthcare grew over $27 million and represented 22% of revenues. Retail manufacturing logistics grew by over $9 million and represented 16% of revenues. The remaining 15% of our revenues came primarily from other service orientated industries in the telecom, media, and new technology areas. Financial services grew 51% year-over-year and 5% sequentially. Healthcare, as we mentioned earlier, grew 77% year-over-year and 16% sequentially. Growth in our healthcare segment was in particular driven by numerous life sciences clients that we have won recently and are now ramping up. Retail manufacturing logistics grew 25% year-over-year and 12% sequentially. And our other segment grew 103% year-over-year and 26% sequentially. Growth in the other segment benefited from growth in telecom, media, new technologies and alliances, as well as on a year-over-year basis the acquisition of (inaudible) in April, 2005. For the quarter, application management represented 49% of revenues and application development was 51%. Both services grew significantly in Q1 on a year-over-year basis application management grew 49% and application development grew 66%. On a quarterly sequential basis, management grew 9% and development grew 13% reflecting strong demand environment for our service offerings. Within our maintenance and development service lines, we were particularly pleased with the interest shown by our clients in our specialized services as well as our ability to meet this demand. Our ERP and CRM practice grew over a 100% combined on a year-over-year basis. Our data warehousing practice, which we believe is the clear leader in our industry also grew by approximately 100%. And finally, our testing practice grew by approximately 140%. Each of these practices represented approximately 10% or more in total revenues in the quarter. In addition, our infrastructure management practice, advanced solutions groups, and BPO practice all grew at rates faster than the company average. During the quarter, 87% of our revenues came from clients in North America, Europe was 12% of the total, and the remaining 1% of revenue came from the Asian market. Our European business grew 22% sequentially, well above the company average as we continue to invest in that region. We added 32 new customers during the quarter. We closed the quarter with an active customer base of approximately 260 clients. During the quarter, across our verticals and geographies we added five accounts which we consider to be strategic and have the potential to become significant revenue sources for us in the future; bringing our total numbers of strategic clients to 72. We ended work for approximately 19 clients during the quarter. Almost all of which were very small clients. Turning to costs – on a GAAP basis, cost of revenues increased 62% for the quarter as compared to the 1st quarter of 2005. On a non-GAAP basis, which excludes the impact of equity based compensation, cost of revenues increased 59%. The increase is due to additional technical staff of both onsite and offshore required to support our revenue growth. We increased our technical staff by approximately 2,300 people during the quarter and ended the quarter with approximately 25,000 technical staff. This is a net increase over 9,000 technical staff from March 31, 2005. Gross margin was 44.4% for the quarter on a GAAP basis. On a non-GAAP basis which excludes the impact of equity based compensation, gross margin in Q1 was 45.6%; a decline of a 150 basis points sequentially and a decline of 50 basis points compared to Q1 of last year. On a sequential basis, gross margin was negatively impacted by the sequential appreciation of (inaudible), the seasonal impact of FICA in the US, and increase in employee health benefit cost accrual, and a bonus accrual in Q1 well above targeted levels due to our strong performance of desire to share our success with our employees. SG&A expenses, including depreciation, were $73.7 million on a GAAP basis up from $46.5 million in the 1st quarter of 2005. GAAP SG&A expense in Q1 of this year included approximately $4.5 million of equity based compensation expense. As a percentage of revenues, GAAP SG&A was 25.8% for the quarter, non-GAAP SG&A was 24.3% of revenues down 130 basis points from the 1st quarter of 2005 and down 290 basis points sequentially from the 4th quarter of 2005; a quarter in which we had unusually high costs in certain areas including marketing, immigration, and employee reward and recognition programs. GAAP operating for the quarter increased 43% to $53.2 million from $37.2 million in the 1st quarter of 2005. On a non-GAAP basis, which includes the impact of equity based compensation, operating income for the 1st quarter was $60.8 million up 63% from last year and our non-GAAP operating margin of 21.3% significantly exceeded our target operating margin range. With salary increases effective in Q2 and a significant acceleration in investment spending, we expect our non-GAAP operating margin for the remaining quarters of this year to be back within our target range. Interest income for the 1st quarter increased to $3.4 million compared to a $1.8 in the 1st quarter of 2005. Interest income increased due to higher global cash balance as well as an increase in short term interest rates. We had a $41,000 foreign exchange loss during the quarter. Our GAAP tax rate for the 1st quarter was 16.6% and the non-GAAP tax rate which excludes equity compensation costs was 16.4%. Our tax rate for the quarter and expected rate for the full-year is slightly lower than our prior guidance due to a higher than forecasted portion of our expected full-year earnings to benefit from the tax holiday in India. This is a result of our increased revenue and earnings expectations for the year. Turning to the balance sheet – our balance sheet remains very healthy. We finished the 1st quarter with approximately $422.5 million of cash and short term investments; up over $108 million from March 31 of 2005 and down slightly from December 31 of last year. During Q1, sequential cash flow was negatively impacted by the increase in DSO as well as 2005 bonus payouts. During the 1st quarter, operating activities used approximately $4.4 million of cash. Financing activities, primarily of the exercise of stock options generated $22.7 million of cash. These amounts are partially offset by approximately $20.1 million of capital expenditures including expenditures on our India construction program. In addition, we generated approximately $400,000 due to currency translation adjustments. Our collection of trade receivables during the quarter was healthy given certain Q1 seasonality. Based on our $218 million dollar balance on March 31, we finished the quarter with a DSO including unbilled receivables of 69-days compared to 65-days for the same quarter last year. The number of billing days as well as our daily volume during the quarter was skewed toward March negatively impacting our DSO compared to the 4th quarter of last year. During Q1, excluding unbilled receivables, our DSO was approximately 58-days. The quality of our receivables portfolio remains very strong. Our unbilled receivables balance was approximately $33 million at the end of the 1st quarter, up about $14.6 million from March 31 of last year. The increase in unbilled receivables resulted primarily from the timing of billing milestones and the volume associated with our continued revenue growth and ship toward development projects. Approximately 50% of our March 31 unbilled balance was billed in the month of April. During the 1st quarter, overall 25.9% of our revenue came from fixed bid contracts up from 25.7% in both the 1st quarter and 4th quarter of 2005. When we look at the mix by solution type during the quarter, 33% of our development revenue and 19% of our maintenance revenue came from fixed bid contracts. Turning to headcount – at the end of the 1st quarter, our worldwide headcount, including both technical professionals and support staff, totaled approximately 26,750. This result of net increase of over 2,400 people for the quarter and approximately 9.700 people compared to March of last year. Approximately 50% of our Q1 hires were recent college graduates who will enter our training program and the remainders were lateral hires of experienced IT professionals. Based on our 2006 revenue expectations and our ongoing success in recruiting, we currently expect to exceed 35,000 employees globally at the end of 2006 and have the capacity to add staff in additional to that if necessary; and we are moving well along towards this goal. Turn over, both voluntary and involuntary, was just over 11% annualized during the 1st quarter as Francisco mentioned, that is our lowest rate since 2003. On site utilization remains around 85% for the quarter. Offshore utilization excluding recent college graduates who are in our training program was approximately 69% including trainees; offshore utilization was approximately 53% for the quarter. We had approximately 2,500 unbilled people in our training program at the end of the quarter. I’d now like to comment on our growth expectations for Q2 as well as full-year 2006. As Lakshmi and Francisco mentioned earlier in this call, the investments we are making are producing results. The investment allows us to differentiate ourselves from marketplace both in terms of winning and growing new clients and expanding our service offerings. In addition, our client and employee satisfaction levels remain at a level at which we are proud. This is resulted in stronger than expected Q1 results and is allowing us to increase our full-year guidance for 2006. We are now projecting revenue for the 2nd quarter of 2006 of at least $317 million. This represents 11% sequential growth and 50% year-over-year growth. As a reminder, our sequential growth in the 2nd quarter of last year of 2005 included the contributions from our acquisitions of (inaudible) as well as a 3% sequential increase in billing dates compared to a flat number of billing days sequentially in Q2 of this year. We continue to have significant revenue visibility due to our high level of recurring revenue and long term nature of our customer relationships. In fact, today we have customer commitments for well over 90% of our 2nd quarter revenue guidance. For full-year 2006, based on the strong demand environment for offshore services and our favorable experience on ramp up rates, we now project revenue to be at least $1.3 billion dollars; up $40 million from our prior guidance. This represents growth of at least approximately 47% as is been typical in prior quarters, we expect the majority of our growth for the 2nd quarter and full-year 2006 will come from ramp up of clients won over the past few years. During 2006, we intend to continue to closely monitor our spending and expect our operating margin for the remaining quarters of this year to remain in the range of 19-20% - that is before the impact of equity based compensation. In line with our historic margin level and prior guidance; to be clear, our operating margin targets exclude the impact of equity compensation expense. With this expected level of revenue growth and our expected operating margins, we are currently comfortable with our ability to deliver in Q2 GAAP EPS of $0.33 and non-GAAP EPS of $0.36 which excludes equity compensation expense. This guidance includes the anticipation of a Q2 share count slightly more than 150 million shares; a tax rate of 16.6%; and an operating margin in the upper half of our guidance range excluding equity compensation. Based on current business trends, we are increasing our expected GAAP EPS guidance for the full-year to at least $1.37 up from our prior guidance of at least $1.30; and full-year non-GAAP EPS of at $1.52 which excludes equity compensation expense up from our prior guidance of least $1.43. This guidance includes the anticipation of a full-year share count of approximately 151 million shares. In addition, this guidance assumes a tax rate of 16.6% and a full-year operating margin at the top end of our 19-20% guidance range excluding equity compensation expense. We expect a vast majority of our Q2 and full-year growth to come to existing clients, particularly the numerous strategic deals we have won in the past few years. As we look ahead to all of 2006, we are highly encouraged about our prospects for continued industry leading growth. Operator, we’d now like to open the call for questions.

Thank you. Ladies and gentlemen, if you would like to ask a question please press “*” then the number “1” on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Your first question comes from Rod Bourgeois, Sanford C. Bernstein & Co. Rod Bourgeois, Sanford C. Bernstein & Co: Hi, great and good morning to you guys. Gordon, can I ask a question about the margins – so your margins exceeded your 20% target range. What will cause margins over the remaining quarters of the year to come back down? Are you going to take the liberty to invest in growth, lower utilization what is the factor that is going to bring margins down for the remaining quarters? Gordon Coburn, Chief Financial Officer: There are several things, first of all our wage increases go to effect in April and so that will impact margins and I’ll come back and we can talk about the levels there. Second we are significantly accelerating our investments in everything from geographies to adding to management to building out our industries and verticals. We clearly have an opportunity to continue to take market share and our strategy is to invest anything above 20% non-GAAP operating margin to drive long term sustained above industry level growth. On wages, wage inflation for this year is coming in exactly where we planned. We are expecting offshore wage increases in the very low double digits and on site wage inflation in the very low single digit, so we are not seeing any surprises there – it is exactly what we planned but obviously that does have impact on margins on a sequential basis. Maybe Lakshmi would like to just comment a little bit more about why we are seeing wage inflation very different then what you are hearing from many others in the marketplace. Lakshmi Naravanan, President and Chief Executive Officer: Let me add to what Gordon was saying as far the wages and the inflation and I’ll just mention in terms of (inaudible) we had the best quarter so far. There are three reasons that contribute to greater retention and our ability to manage the wage increase. First and foremost, it is the growth because of the higher than expected growth and higher than the industry growth; we are able to provide greater growth opportunities for our people within the organization. We have seen significant number of promotions in our culture people like the way that they are taking greater responsibilities, number one. Number two – I also talked about the increase in the application development work or the discretionary spending. This is exciting work – this is new technology work, this is challenging work that excites the people as they get to work on some of the leading technologies and products. And finally, our philosophy of variable compensation and the philosophy of better the performance, better the pay has been well understood by the entire organization. For example, last year we shared a substantial portion of our performance through the bonus of incentives key. We paid well above the target bonus and given our performance so far we expect to continue to pay a higher variable component on a higher bonus. Given all of which we are able to manage the rate increase offshore at the low double digits and onsite which is US and Europe at the low single digits. Rod Bourgeois, Sanford C. Bernstein & Co: Alright, great - well you answered the second part of my question about your turnover and wage inflation is not the same that you are seeing with your competitors. You hit a positive inflection point in Europe, that business was somewhat lagging relative to the rest of your business, I think you said you did 22% sequential revenue growth, what caused that inflection point in the acceleration in Europe and is that likely to be some of the tail wind that carries you through the rest of the year? Francisco D’Souza, Chief Operating Officer: Yes, hi this is Frank – let me try and address that. You are right, Europe grew 22% sequentially and about 49% year-over-year. As we said in the past, what we are starting to see is that companies in continental Europe in particular are starting to adopt the offshore remodel and we are pleased that this quarter the growth number that I mentioned were nicely balanced between both the UK and continental Europe so we are seeing both those markets picking up nicely. The unknown factor at this point is what impact on our growth, labor regulations and cultural issues in continental Europe will ultimately have. But, we are as I mentioned building a strong team in continental Europe through a combination of local hiring and internal transfers from other parts of the company and so we are looking forward to continued growth in Europe in the coming quarters.

Your next question comes from Ed Caso, Wachovia Securities Ed Caso, Wachovia Securities: Good morning, thank you – I was sort of curious given the traumatic success you’ve had over the last several years with expanding strategic with clients, why do you actually pick up non-strategic clients every quarter? Is that the sort of learn new technologies on or what is the strategy there? Lakshmi Naravanan, President and Chief Executive Officer: Yes, Ed you mentioned part of the answer – it is some of the other customers that we work with, they work with different products, different technologies, and different models. By working with some of these customers, we understand that (inaudible) which we are able to apply in all the relationships that we have. There is a tremendous learning that happens by working with all the customers. Ed Caso, Wachovia Securities: My other question is on a lot of your competitors offer dividends and you have a significant cash position at this point, what are your plans for both share repurchase and a possible dividend? Gordon Coburn, Chief Financial Officer: Ed, as discussed with investors – first of all having a healthy cash balance is very important as we are now winning very large deals. Not because we would use the cash as part of winning the deal, but customers are betting their businesses on us and they want to know we are going to be around for the long term, so we want to continue to have a healthy balance sheet. In addition, we do small acquisitions – the definition of small changes obviously, we used to do – as we get bigger it no longer makes sense to do a $2 or $3 million dollar acquisition the last one we did was $35 million dollar cost or so, so we used some money on acquisitions. And then finally, we want to have the ability if there are opportunities in the marketplace due to external events that either impact our stock or other stock to have that flexibility - so near term no change and no strategy for use of cash.

Your next question comes from Joseph Vafi, Jefferies & Co. Joseph Vafi, Jefferies & Co: Hi gentlemen, good morning and great quarter. I was wondering if we could talk a little bit about the strategic customers that you signed in the quarter relative to maybe penetration in the different verticals. Clearly financial services is probably the biggest adopter and has become the most mature vertical. What are seeing in terms of other verticals and also the maturity of financial services as a ground to find new strategic customers moving forward. Gordon Coburn, Chief Financial Officer: Joe, you are absolutely right. What we have seen this quarter and what you have seen in the past quarters in 2005 left so prior to that, is our wins are becoming much more diversified, our pipeline is becoming much more diversified, and industries beyond just financial services now look at offshore strategically. For example, is pharmaceutical. A couple of years ago, very little interest in offshore, now as we mentioned we are doing work for seven of the top pharmaceutical companies in the world. So I think this is a trend that you are going to continue to see of diversification of our client base. Now do not read that as financial services is maturing. We still have tremendous growth opportunities there. We continue to win strategic clients there but it is now in addition to that we have a lot of other pockets that we are going after. Lakshmi Naravanan, President and Chief Executive Officer: Let me add to what Gordon was saying and just one point about the financial services industry. They are the aggressor verticals of technology. They spend a substantial portion of their revenues on new technology and that is a great opportunity for us to continue to grow there. There is one other industry that I mentioned, very specifically, that is the media and the entertainment industry and that is something that is just awaken to be cause of this outsourcing and offshore outsourcing and combined with telecom, where there is this convergence that is happening – that presents a good opportunity for us to deliver some high end technology solutions to that new industry. So these are the ones that are contributing to the growth and expect to continue that. Joseph Vafi, Jefferies & Co.: Ok that is helpful, and then drilling down into the development business which is clearly doing better – maybe we could get some color on looking at that development market now say vs. a year ago or maybe 18-months ago and your ability to go after a larger piece of the pie in the overall development market because your skill set has advanced and your competing on different types of business then you hadn’t been a year ago and we could get a feel for where that growth might be coming from a larger overall addressable market vs. just a strength in an overall market. Lakshmi Naravanan, President and Chief Executive Officer: I’ll try and give you two data points as far as the development business is concerned. First one is as it relates to integrated application of solutions which includes packages and essentially the system integration type of work. We announce some work that we do with the safety in some of the other (inaudible) products and then there is the new net weaver platform which is something that is being increasingly adopted by customers. So, that is the new type of work that is taking place in the marketplace, one. And the second point is, in addition to the development work that we carry out there is a whole lot of development that corporations are carrying out either using their own in-house tasks or other partners and we get to participate in those activities to our testing. Testing as you know is one of the fastest growing horizontals in Cognizant and we have grown that practice several (inaudible) in the last quarters. These two are examples of what contributes to the growth to the development market. Joseph Vafi, Jefferies & Co.: Ok, and just Gordon – the top five and the top ten and maybe some comments on maturity of those customers and your view of those moving forward? Gordon Coburn, Chief Financial Offi: Certainly, just give me one second – the top five customers was 30% of revenue in the quarter. Now, if you do the math you’ll see that is actually down in terms of dollars sequentially. That was fully expected as a couple of customers we have some projects winding up, we do not view those customers as mature and we actually expect very healthy sequential growth in Q2 so as sort of an anomaly within the quarter on projects, but the growth continues to be very healthy among the top five as we look into Q2. Top ten was 42% of revenue which was about a 3% sequential increase. Obviously over time the top five and top ten as we discussed will come down just because we have more customers outside of the top five and top ten.

Your next question comes from Christine Savino, JPMorgan Christine Savino, JPMorgan: Good morning, just a few questions here – you mentioned that Europe is strong and the uptake in offshore in Europe, can you talk about specific areas in geographies in Europe where you are seeing maybe the strongest demand whether it be France, Germany, Netherlands, UK, etc.? Francisco D’Souza, Chief Operating Officer: Yes, hi this is Frank and let me try to put some color on that – clearly the UK has been our historic area of investment and it’s been where we currently have the strongest presence and the adoption of offshore is probably the most mature of all the markets in Europe in the UK. That is a big factor there is the language being English helps with the India offshore. In terms of continental Europe, in our particular case we are seeing attraction in many markets in continental Europe, I would specifically point out the (inaudible) as the result of an acquisition that we had done there some years ago, we are not beginning to see traction in (inaudible) and also Switzerland. Those are the two markets that I would point to in continental Europe. I think France and Germany, from a Cognizant perspective, we are beginning to see signs there of interest but it is still early days. Christine Savino, JPMorgan: And then you talked about discretionary increased, discretionary spending boosting the application development business, can you talk a little bit more about what you are seeing there – is it just larger IT budgets generally or existing customers reinvesting some of the savings that they’ve yielded from offshore or just more spending being directed towards offshore or probably all three. Lakshmi Naravanan, President and Chief Executive Officer: It is more of the second point that you mentioned as the overall cost of maintenance keeps coming down they are reinvesting to save dollars on new development initiatives with us. That I would consider is the primary reason for the increase in the development of the discretionary spending. In addition, many of our customers experiencing good growth in their respective sectors because of which they are able to increase the budget on some of which comes towards the development initiative. Christine Savino, JPMorgan: And then just one last question on the operating margins – as you continue to grow at these above industry average rates, do you see a point where you won’t be required to make the same investment in the business on a percentage basis and how long will you continue to grow at these rates and keep the operating margin steady state? Gordon Coburn, Chief Financial Officer: Christine, this is Gordon – because the business is somewhat unique and it is very much a long term relationship business not go and then do one project then leave. The name of the game here is while the market is wide open to win as many clients as possible and invest to ramp them up as quickly as possible – so our strategy is to take anything above 20% non-GAAP and use that to grow faster than others in the marketplace because we believe on a long term basis that is what is going to drive shareholder value. Obviously there is going to be a quarter or two where we just don’t spend money fast enough, Q1 was an example of that, March came in very strong and we just couldn’t crank the spending up fast enough. We are fully committed to take anything above 20% non-GAAP and putting it back into making sure our employees are satisfied, our clients are satisfied, and most importantly we deliver on that special Cognizant client experience that Francisco mentioned – in the end that is what it comes down to and we are putting the money there and it is paying off. We are growing our relationships faster than others.

Your next question comes from George Price, Stifel, Nicolaus & Company George Price, Stifel, Nicolaus & Company: Hi, thanks very much – just a couple of follow-ups, first of all Gordon just on the operating margin issue you mentioned some SG&A costs that we a little bit higher than expected, was there any – did the operating margin float up in any way to offset any of that, was it that thinking or was it just purely the timing and the strength of the revenue. Gordon Coburn, Chief Financial Officer: George, just be clear, the SG&A expensed in Q4 of last year were higher than normal because of a couple of items that I mentioned and then came back to normalized level in Q1. What happened in Q1 we just (inaudible) until we got into the latter part of the quarter internally we didn’t realize see how strong revenue was going to be because we really had a strong surge in March. At that point we cranked up the SG&A spending but it takes a little while for it to really crank up and that is why we are saying Q2 will be back to a normal level but we couldn’t get back to a normal level in Q1. George Price, Stifel, Nicolaus & Company: Ok, I am sorry I miss heard you. Then on the competitive landscape, maybe if you could give a little bit more detail inside around what you are seeing from some of your other offshore competitors given the margin pressure and the wage pressure that some of them are seeing, are there any changes out there in the competitive dynamics of the industry that are evolving and also maybe how the multinationals are doing? Lakshmi Naravanan, President and Chief Executive Officer: I think in terms of the competitive landscape there is one factor that is important – the clear separation between the tier one players and the tier two and tier three players. The separation started happening about three or four quarters back and that seems to be strengthening. That gives us the opportunity to hire people from some of the other companies into our fold. That is one opportunity in terms of people and in terms of the competitive positioning in the marketplace, clearly the tier one players will get a greater proportion of the projects of the wins compared to the other tier two companies. And as far as the market (inaudible) corporations are concerned clearly a number of them are investing in India expanding and there is a reasonable amount of computation for us there. From a Cognizant perspective, since we enjoy a good reputation in the academic institutions which is where we hire a bulk of our people, anywhere between 65-70 people on top of the new hire will be (inaudible) college and business schools. And we have a good program going. For this year, we have a lock on all the resources that we need based on the campus hiring that we did last year and we have a plan that is place that will go unlock these resources for next year as well. It doesn’t appear to be too much of a problem. I want to add just one last point. I talked about the wage increases – there is (inaudible) rates pressure at the entry level. There has been no significant change in the compensation because there is a large number of people that are graduating out of these colleges, we can dig deep and get them and because we have a very robust and strong training program in the development program we are able to get them to speak and contribute to the development activities frequently. George Price, Stifel, Nicolaus & Company: And just last thing, maybe a comment if there have been any changes to pricing in the industry continue to hear stable with an upward bias which is pretty often used term – but, what you are seeing maybe as new business comes on if blended pricing how that might be impacted by how the mix of your business is shipping. And then, Gordon, if you could remind us also on a wage percent basis, what percent of the overall cost base is on site vs. offshore wages? Gordon Coburn, Chief Financial Officer: First of all, we sound like a broken record, but I think you summarized it just right – pricing is stable with an upward bias. Our pricing was up very slightly from Q4 and we think we are about right in our planning assumptions for the full-year which was up about 1.5% on a blended basis. Now that includes the impact of moving towards larger customers on the negative side, on the positive side some of the higher value services; but you are absolutely right and we have not seen any change in the belief that it is stable with an upward bias. In terms of wages, about 17-18% of our total costs in our India wages, and about 55% of our total costs are onsite wages and as I mentioned, wages came in exactly where we planned for and budgeted for so no surprises there. Operator, I think we have time for one final question.

Your final question comes from the line of Julio Quinteros, Goldman Sachs Julio Quinteros, Goldman Sachs: Question in ten parts – Gordon Coburn, Chief Financial Officer: Start with the fifth part, right? Julio Quinteros, Goldman Sachs: I’ll start with the first part – Francisco, actually I just wanted to start with you, can you maybe just give us a sense on just the operations. What is different about the way that you guys are executing right now vs. your competitor and maybe if you could just point to one or two things that will help us get our arms around the out performance. And then, the last question that I have was for Gordon, if you could just sort of break up the gross margin impact issues that you highlighted, I think you highlighted the (inaudible) wages – I just wanted to get a sense on what the impact was on a basis point perspective. Francisco D’Souza, Chief Operating Officer: What I’ll point to here is what we are calling the Cognizant customer experience. For some time now we have been talking about the fact that we are continuing to reinvest the customer interface. We put a lot of effort and energy and dollars behind that and that is really the single point of differentiation. We are servicing a smaller number of clients, servicing them very deeply. Investing very heavily at the client interface and what’s happening is that as the services that we are performing for clients are becoming increasingly more sophisticated as we are getting into the discretionary spending, the development that Lakshmi talked about the systems integration work. These are more sophisticated capabilities that require a deeper level of engagement at the client interface. We are very well positioned there to take a client through both the technology but also the business change issues that are involved in those types of sophisticated programs. And, I think that is probably the most important thing that is allowing us to scale client relationships because as clients get more comfortable moving more sophisticated work offshore, our client partners, our industry experts, our program managers, our project managers are all there to surround the client to provide them with a very seamless Cognizant experience. Julio Quinteros, Goldman Sachs: Francisco, do you have maybe a specific number then or some percentages that you could give us just to sort of illustrate the difference. Maybe, a percentage of MBA’s within your billable work staff vs. maybe the industry norm. Do you guys have a sense on what that would look like? Francisco D’Souza, Chief Operating Officer: At this point, Julio, we have about one MBA for 25-30 technologists – it is roughly in that order of magnitude. It is very high percent of MBA’s to non-MBA’s and that actually really helps with that Cognizant experience. And as I mentioned earlier in the call, in the 1st quarter we hired about 200 MBA’s which represented just under 10% of our total net hiring in the quarter. Gordon Coburn, Chief Financial Officer: And Julio, on your question of the break up of the impact of those – we don’t provide a specific breakout. All of them had impact – (inaudible) moved by an average by about 2.3% and as I mentioned in the past, each 1% movement in the (inaudible) impacts operating margin, but most of gross margin is by about 20 basis points. As Lakshmi mentioned we are accruing bonus in Q1 and expect to pay bonus for 2006 at a healthy level. We share the success with our employees. Employee healthcare costs jumped up in Q1 as we start the new year and hire rates and you have to accrue for terminal liability and all that kind of stuff, so that comes back down and then FICA, FICA is probably the least of the four items but each one clearly has impact. Julio Quinteros, Goldman Sachs: And then finally, just the CapEx projection for the full-year? Gordon Coburn, Chief Financial Officer: We are projecting about $120 million; we spent about $20 million in Q1. a lot of it will end up depending on exactly when we stared constructing buildings but at this point our view would be unchanged. Julio Quinteros, Goldman Sachs: Have your construction plans changed at all or you guys still on target with them? Gordon Coburn, Chief Financial Officer: It always moves around – some stuff accelerates some stuff decelerates and a lot of it ties to getting approvals for a special economic zones so it is a shifting playing field but at this point no dramatic changes in the overall plan where exactly buildings may be built is always fluid for the industry. Julio Quinteros, Goldman Sachs: Ok, maybe if I could just wrap up then, Gordon – on the second half of the year, obviously there is in the implied guidance there is a little bit of deceleration, is that just a little bit of cautiousness, conservativeness on your part given the kind of growth that we are seeing now or is there something more that we have to think about in terms of the seasonality of the second half of the year where September/December being more holidays and probably when the World Cup factors into the numbers in the second half. Gordon Coburn, Chief Financial Officer: Clearly there is a seasonality impact in Q4 and normally it is Q1 and Q4. If you rank it Q2 tends to be the strongest then Q3, then Q1, then Q4 – but, without a doubt you have a seasonality impact and billings days in Q4, less so in Q3.

At this time I’d like to turn the conference back to Lakshmi for closing remarks. Lakshmi Naravanan, President and Chief Executive Officer: Thank you and in summary – our strong financial performance in the 1st quarter is the result of substantial growth across our broad range of industry verticals and service offerings. We are confident that this strategy will try our future success and thank you for participating in this call.