Cognizant Technology Solutions (CTSH) 1 May 242024 Q1 Earnings call transcript

Ladies and gentlemen, welcome to the Cognizant Technology Solutions First Quarter 2024 Earnings Conference Call.

[Operator Instructions]

Thank you. I would now like to turn the conference over to Mr. Tyler Scott, Vice President, Investor Relations. sir. ahead, go Please

results. and a everyone. release copy for quarter investor operator, should and now, have supplement XXXX first company's received of the good you, By afternoon, you the Thank the earnings

cognizant.com. If you have Officer; Ravi we copies are and are Jatin on call Chief Financial The Officer. our today's available have Kumar, speakers on not, website, Executive Dalal, Chief

the of responses like the the I described your are Before would to and the release remind earnings some that statements call we other the in contain of made comments risks may SEC. filings some to on questions as These forward-looking with today's begin, you company's and and statements. uncertainties to subject

measures Reconciliations believe our corresponding other Additionally, in information the company's to non-GAAP that of GAAP useful found the during appropriate release call non-GAAP earnings we measures we the provide to investors. today, measures will financial SEC. and where reference be the with can financial filings certain

With that, go the to I'd over turn ahead. like to Ravi. Please call

Tyler, Thank afternoon, everyone. good and you,

navigating laid environment. excellence. joining high last we Voluntary focus year-over-year. of for you that on end we simplification year-over-year. and against decline earnings continue as again, operating to our range pleased the points ended trailing I'm improved representing guidance adjusted operational Services Technology make on program the and quarter priorities our attrition And attrition business the XX-month continued that first percentage to remains and with We during strategic our delivered voluntary I margin Thank revenue at track expanded XX NextGen call. a report quarter, QX while progress demand XXXX year we our a exceeded for challenging to out growth of our XX.X%,

dynamics that drive companies headlines, and future. As savings we risks near-term towards These projects and spending fund discretionary peer continue. demand recent remains the uncertain for will innovation have results the and shifting priorities economic from are near-term projects for environment seen in our earnings client geopolitical all cost

of Now to $X.X we of moving on to and points and revenue take flat sequentially was operating X% delivered out basis represented as our in execute decline as our constant expanded which and billion, XX by both XX.X% margin reported year-over-year, continue cost optimization to QX highlights. currency. costs. We adjusted We structural a strategy

$XX.X First year increase were of -- first trailing year-over-year. basis billion, X% bookings a XX-month quarter on an

smaller tight While range is in million traction with large saw there of to our total sustained discretionary deals environment. deals, the the reflecting good value, we X $XX in softness contract

our in signed seen year in by quarter momentum quarter of strong in X with more fact North compared X or million only APJ deals the than two evidenced region. efforts deal $XXX was we contracts the each diversify outside greater to we period. to And X, We've TCV shoots prior green the of our early in with America. $XXX large Our signed X of the deals million the in also

the On provides opportunities ratio next improve revenue strong, several healthy XX-month a our a of over remains basis, backlog of X.Xx believe performance which trailing to quarters. book-to-bill we

We pipeline of bookings. against and larger to the continue increasing progress deals of our deals grow for make our in large our value goal

Financial and We trends recent perspective, growth have Technology in Resources. were Media & and and with saw what Sciences seen consistent Communications, by Services demand Health offset From segment we quarters. in in Products a sequential declines

we our clients, segments particularly overall are the practice more about and of which did has automation financial in other services the financial we intuitive services segment XX% among growth seeing been discretionary than and area. by meaningfully our While our by represents spending, within pipeline Financial sequential encouraged Services and impacted see banking are operations weaker opportunities

investments continued demand to several for believe to engineering, includes we in developing hyper infrastructure AI, of We cloud technology that drive data digital helping are and example projects prioritization One services. modern new the global flavor. technologies, themes ] a we & in customer experience client, see and clients' our and agreement need related with This of [ deliver Company, quarter infrastructure personalization McCormick signed a a innovation. was leader modernization an this

while global the financial Over will and McCormick's help transform we and years, X next automated customer driving infrastructure, enhance clients. employee our for tools savings manager's leveraging AI technology to productivity experience improving

Google alliance, monetization transformation and our will modernization elevate strategic telecom hyper-personalization agreement customers' to We elevate software leading a generative recently week, must believe and with help from retailers is we drive brands agenda with this modernization, Cloud. Another to signed capabilities new and unlock users end platform enabling example experiences. this alliance announced and strategic value innovation drive retailers and a business of AI. Australia's today's and to Shopify their their company their we technology experience. while digital customers Telstra, engineering Under investing enhance Earlier global in

quarter. operational experience. them with And employee our Financial decommission strategic market. AI innovation, leverage superior long-standing more fourth a and we efficiency in a this systems their improve believe and key engineering legacy as drive operations APJ a engineering C&O example, our our ID And to and we is software relationship support to experience building We will Group during enable tools win efficient extended by the

technologies engineering and to Under digital agreement, help drive personalized digital to and to deliver solutions help We'll enterprise cloud infrastructure, convenient more efficiencies C&O, across applications, expanded gen will leverage also this and technologies software services. AI the we implement customers.

desire need impacted innovation own end to interactions, clients' markets. uncertainties apparent demand Our client innovation our for in our being that drive clients' funding by and in is all is but

unknown, and a supporting in our inorganic be to investments. continuing We of when those returns. our it learning while remains capability and with But people, return thesis plan prepared but enhancing investments initiatives discretionary spending remains organic in timing platforms The innovation simple. development

the our the in beginning X XX% years. Net our a is a client the We cycle first this from this feedback result since of created collaboration project believe we Score level over for of improvement On tighter through our regarding the XXXX. data side, year, client quality a self-reinforcing delivery of quarter client last Promoter shows process project

to testament our on as Innovative Most magazine helping America's during recognized the clients a Companies the quarter, innovate XXXX. one in Fortune As of Cognizant focus longtime

our innovation Our already reflected than more which focus been associates, we a in April. initiative, which generated has Board than Cognizant implemented on XXX,XXX ideas year been our innovation grassroots associates from have Blue trained Overall, launched with Board Blue on is more XX,XXX have of ago Board. in Blue clients. XXX,XXX

in in our And we collaborative than innovation. more of recognitions choice on named of will Year. opportunities for wins Cognizant at moment. Google industry's focus our on one Cloud valued recognized employer in pipeline. the of employer the AI. Breakthrough India. These one of demonstrate core is that Partner #X a the in LinkedIn associates. a more is just the becoming list client addition, This in In Google month, than most our paying is country as the repeat early Cloud Google And demand that additional awards. recognition India, the home I more top elaborate This have our differentiators, XXX nowhere this which its innovation Cognizant's than XXX more engagements and Cognizant gen else at XXXX on date, a client company's our is distinguished off of industry to in reminder than of heart XXX,XXX To XXXX is is success higher

We services key have seen areas. for increased demand AI X across

AI employee customer accelerate finally, content and second, innovation and deliver hyper-personalization; summarization to to generation; interactions empower to as First, third, experience gen leveraging and seek improved through technology clients insights cycles. and development content decision-making;

artificial proofs London, industry. of AI upon pending. assess at of to state-of-the-art to innovation lab lab San return with we San AI studios Francisco, our for the patents see as XX has Francisco, our advanced Bangaluru. on efforts investing artificial and builds concept continue by AI We network York, strong recently from Incidentally, in where in they our are of opportunities. of are many produced position launched these us in innovation clients investment research forefront applications interest intelligence Dallas supported This the aimed in core These already advanced intelligence and New more our

granted partnerships generative we series This a announced $X X, this announced we invest strategy quarter patents to AI In X years. alone, new behind AI to X approved over billion in and co-innovations us. year we had and last of quarter new

health This provide TriZetto and service includes our administration. The infuse platform into assistant collaboration interface. user gen TriZetto within AI care to the will on AI with Facets our AI ] Gen Microsoft canal access to open to Azure [ leverage Symantec

last transformation help strong to progressing already phase of are and and customers. are of transformation our care our and and to generative health another benefits plan We technology. seeing advisory Microsoft. digital element strategic interest week, from the realize of with leverage CoPilot piloting from we customers announced We expanded to from enterprise largest concept AI services some And and our business this Cognizant's Microsoft employees partnership operationalize proof

In technology. the part the will Cognizant addition, developers Copilot, Cognizant on of program, as of Snaps train trained use a XX,XXX the skilling doubling number of Girath

clinical There we to domain suite general expertise -- as collaboration, pre-trend services, also train viable between and cutting-edge [indiscernible]. of data. this will using clients gen By path life interactions predict AI are industry-specific models a NVIDIA with collaborating interfaces. a pretrained a and infused through drug making including of with and create frameworks We to deep models, and sift models, accurately to offer leveraging clients proprietary pathways. data our extensive researchers compounds drug leverage NVIDIA's access provide part AI can development sciences offered through rapidly model models sets, programming application AI That an accelerated customized the enterprise more new

expanded AI test efficiency tools, ways: Gemini operations training assistance; Cloud platforms. the be capabilities with more faster Cloud, code with use Google and applications. Using will two Gemini's effectively for will developers advanced first, the second, to adopt Cloud reliability and integrating by We help of cost development client Cognizant's Gemini our deploy building to and of software write, for Cognizant also by partnership Google for within improving powered equipped and internal associates Gemini Google managing and in and Cognizant's

XX,XXX upskill Cognizant AI than Over the Google This initiative our offerings. expects next upscale more to million [indiscernible] another globally XXXX. XX on is months, Cloud's by in associates individuals cross-functional milestone X to

source to and the platforms of beginning automated Additionally, recently for Gemini integrate developers. suite Cognizant its work into flow accelerators will announced Cognizant platform with

platform, responsibility since social As our have recently skilling programs a million we for underrepresented we funds philanthropic to of in global announced $XX XXXX, awarded part that communities.

intend to capabilities landscapes. enable productivity and cycles and of better through that in Cognizant's be great for diversity combined culture equalizer continuous grants advanced other on the future scaling of prioritization focus philosophy can XXX our technology technologies a mile the and last the studies faster to and empowering We in into These infrastructure AI work. investing participating continue and AI enterprise by innovation following of integration platform

the XX and on In onboarded and studies, productivity platforms the as deployment and clients significant scaled which cycles, cases. cover to and we the of embrace phases AI anatomy our different goes investing the AI last in driving traction skills platforms sky months, assisted neuro gained realizing dissect by AI of various have to occupations source in grade AI our newer the clients of we roles, value map exposure use flow

to to age investing in industries. continue help prepared on focused be we soft by industry the this technology intensity adoption cost differentiated productivity, remain and the boost we investing capture and remain navigate for As AI ongoing like demand capabilities demand reduce to in better enable And remain we of in and new future. technologies our select platforms of current total ownership, clients areas enhanced environment,

We important element an of inorganic our investment opportunities strategy. remain believe also

We and where underexposed are our including deepen industries and geographic improve seek capabilities, into business, our expand continue to we to mix. diversify

QX direct this capabilities of healthy which early our with of existing opportunities pleased client ServiceNow within base. acquisition cross-sell expanded as For of industry-leading and platform, are credentials. already example, significantly pipeline see [indiscernible] to our the our acquisition We we and traction of has a result

our our to we industry In closing, and working over increase become Jatin, clients XXXX, you. for revenue to I choice their will of operations. simplify to Cognizant. around world the to our our want employer employees dedication XXX,XXX and In thank in growth, keep our the to

thank Ravi, and you, for joining Thank you all us.

year-on-year. our XX I across of adjusted a supported what my our also the I economic CFO, month As impressed enter and representing first range, pleased us organization. remains actions by exited remain expansion a Communications, with of by Healthcare high [indiscernible] quarter deeply I segments. in our growth NextGen guidance the sixth am the on culture, execution XX.X% and Media margin program disciplined execution client Technology points basis environment. our our tough and of sequential Cognizant's cost hardening. was the in segment optimization to operating The Strong Revenue end deliver as allowed passion

Looking objectives support strategic of am in ahead, broader focused our several I on priorities.

second, strengthen organization margin profile our AI in enhancements, our to process programs leveraging NextGen continue partnerships improve collaborations by driven the across growth; First, to our improve revenue and tools. and cost through part

focus Next, designed programs drive continue with people including to our the management latest on on employees train large our improving focus execution on And to and invest maximizing from a supporting with risk our finally, our investments a M&A employee in skilling our framework. AI. company-wide value gen creation technology, sales disciplined

geopolitical the spend more headwinds geographies, quarter. revenue our muted. a XX the environment and in also industry of uncertain volatile have decline weigh Health year-over-year kept which currency. pronounced of priorities, basis client from rates. global and points basis, sequential their of we includes X.X% outlook acquisitions. are discretionary constant interest quarter from These higher financial billion, headwinds. Year-over-year and a First spending is impacted was X.X% inflationary decline was Sciences revenue by the susceptible on has to or environment segments a prior approximately are $X.X industry-specific representing recent flat being Across On seen economic growth performance in customers services, more which

transformation time, same can the and investments quickly continue spending fund to deliver At and savings clients in prioritize continue to innovation. that cost

XXXX Resources For opportunities S/X utility by of This seen we example, and customers drive the critical been with remains has grid which SAP where modernization Utegration, within a Products resiliency utilities helps our among customers. cloud further our priority. supported segment, have acquisitions

In is and area digitization and seen technology and positive our in software-defined customers have the automotive addition, driving like where priorities. Products amongst in convergence of we segment trends and vehicles Resources transformation operational IT

and we recently which performance of and segment, grew Media customers. contribution were Finally, year-over-year, wins with and pleased communications of acquisitions with driven the media by Technology our completed Communications, the

on spending This been impacted helped by has discretionary focused offset believe our have technology customers, clients among pressure which we costs. reducing

to moving margins. on Now

Our program and next-gen helping us operations. structural savings simplification has well progressed cost in optimization our drive of

$XX costs XX margin approximately our incurred This operating we basis impacted related negatively by quarter, million the this approximately During of program. to GAAP points.

operating our of savings NextGen rupee. adjusted depreciation benefited to which and impact, XX.X%, margin this from Indian related program was the Excluding the

Both and adjusted our GAAP QX $X.XX EPS was rate diluted $X.XX. were and QX in the GAAP XX.X%. tax quarter adjusted EPS was

payments and in was days as last of our bonuses of cash X well X the QX by was flow Indian made year-over-year, $XX million mix. as accrued up cash and that balance included primarily to Now sheet. to the authorities impact payout turning flow of and Free previously disclosed the business driven DSO were XX $XXX days million tax sequentially year. day increased

the our the end tax due The to As process was authorities tax refunded amounts at required proceed payment a the the to be Cognizant reminder, to process. final the to matter. ongoing relating or will tax appeal Indian appeals with tax of and is XXXX determined to authority

$XXX million $XXX including shareholders, to [ million regular through million $XXX share dividends our ]. returned also through We repurchases and

Third acquisition for short-term January factors we million. acquired cash consideration cash of Era billion. of completed net cash $X.X and These total net $XXX In or in of our a billion investments of $X.X approximately quarter drove of addition, end

In XXXX, including we regular dividends. share $XXX to and least to over million to expect $X our return through at continue $XXX repurchases through billion million shareholders,

opportunities growth portfolio. investment help our expand to evaluate capabilities profile, and our diversify strategic We also continue to will inorganic accelerate our

outlook. Now let me speak about the forward

growth in expect X.X% For currency. second constant we to sequentially, the flat be quarter, revenue to of

to decline constant reported a decline decline $X.XX to billion to of of a Year-over-year, this of X.X%. this basis, X.X% currency. to representing X% a decline a $X.XX of a revenue implies On year-over-year billion, a in of X.X% translates

providing year, of we expect range growth billion to of this to see to support the revenue capabilities of in a to our of X% The up assumptions. the and of continue inorganic translates in and we basis, a We for assets to reported a our evaluate we For XXX guidance full continue currency. X% a of pipeline assumes growth contribution. decline constant to acquisition an $XX.X X.X% billion basis active to strategic of On right $XX.X exchange decline latest X.X%, are a points revenue reflecting to today priorities. opportunities,

Our the the We and on changes of are program NextGen savings to assumptions to still NextGen remains track, majority opportunities beyond. our no regarding there intend our growth and reinvest program. XXXX in in

Moving on to adjusted operating margin.

XX.X%. be We are continue year range full with to to we expect of in the XX.X% our pleased QX performance and to the

For margin am number deals QX, of driving operating from are cost in I utilization in and further ramp the sharply sequential pleased negative impact we focused mix. around and during savings improved utilization range large improvement quarter, we by the will support with adjusted the quarter. a to offset improvements margins and be expect being initial NextGen narrow with our revenue next on QX's

year, we anticipate to previously, updated reflecting million $XX approximately assumptions. cash interest of primarily million, For the rate balances full which net and $XX income compares interest

guidance remains adjusted rate unchanged. Our XX% XX% tax to of

Our we full our flow exist free also unchanged, do cash will year of and income. XX% net represent to is guidance continue

includes our previously tax relation discussed method. tax negative ongoing the XXXX in impact of Indian million to authorities made of This $XXX ] with [ our appeal payment

$X.XX, for Our we'll open earnings our to unchanged guidance our million. full This adjusted is guidance. approximately from guidance leads per questions. at outstanding previous year the of for With unchanged $XXX your share $X.XX shares call to that,

[Operator Instructions]

comes TD Cowen. question line of from first with Bergin the Our Bryan

if how areas XQ guide? And here the start, that we do we performed as better quarters, improvement implied I sequential than large in the your with on of midpoint, improvement on least guess deals seen in some coming then you're improvement what your at can some forecasting to versus expectations the or decision-making comps you comment the at reconcile recovery. growth in kind it's if discretionary in driven timing and of ramp of commentary of that discretionary the environment unknown easier an curious too? about that I'm the actually by

Thank Adam. here, you, The to the do we range. for And way we upside Thank committed is try, clients it an Bryan. ask the and from and in a look And visibility is basis we XXX deal M&A, you on you which based question. add XX ramp of what's Jatin up XX I will our M&A. points get then points there the available is to you then middle we for Ravi spend large This look basis range available. is based on let the me that of give if get at guidance The it this to of upside of yet many guidance momentum, are to includes can sometimes because upside on well. the our

So put range. a we We in that's a put it range. broad Why did standpoint. the broad in this

this in at XXX Normally, time, of you point range. points have would basis

market the XXX of have We because a basis sluggish. is points range

well sluggish, While you we we discretionary is today? well, do doing We of last don't change of X. kind to range. we How see spoke so are kept in discretionary we've quarter. see market since we all broader performed The quarter a

same, the hasn't it remains changed. it So

let's X. Now come to performance of quarter

and If been been us and you've well as drop past, financial for the sector the that noticed as for has has services discretionary in I in -- biggest mean, industry. the in the

care sequential insurance. BFS, seeing is well. which quarter And in and X If shoots services BFSI. doing is you've banking, only noticed financial green from we million X are to XX% Health quarter for of us in drop is $XX the

We to growth. our on have strong portfolio with continue managed sequential

phenomenal about us. communications, been heard for it's a You've CMT, run

some you out is we a expand X confidence of that as XX that large the backed where months. these We X to deals deals. is large [indiscernible] expansion have and year. fact large X, well renewal, that continuing quarter compare a plus And it year, sequential last This that me we gives last of last were of the deals won deals, -- with X growth the lot have by about in we're growth X if also on quarter had large is

continues. deal momentum large The

are softness is and of kind to to in India. and there of course, X deals, Of million which discretionary million in X $XX $XX

I how to is stable. that have So that's pretty and manufacturing And I broadly add shape if products it.

So this is the I is got X. how sales. we how This in quarter see to we how guidance performed

of our of We seen have also Asia outside deals Pacific. to Americas expansion

We have actually over which have Pacific. X come Asia from deals X,

announcement of part we Telstra, You've already a is did else? Jatin, the seen our with which release. anything

are we Bryan, Yes. good.

any can have follow-up, you we take. If

appreciate No, on thoughts I that. margin. very that detailed. My was

So still? trend the just profile gross comfort 'XX, with margin in that the the the expect reduction. [indiscernible], ramping of talk given through maybe, level attribution NextGen you move just we as large kind and year-over-year, just unpacking but margin should SG&A will your continue deal strong about a SG&A the reducing contraction that and Is

right very will have puts every around show as takes There 'XX. we large G&A But a but much in because not quarter, continue be improvement, taken you momentum and so should action well directionally, know. a to

compared NextGen won't through So SG&A. SG&A the a an That's you it the on course impact number back the our acting see of would of the big year, end but program view of XXXX. during rest be the as the line to or large

I would is add only thing leverage the said also would Jatin I growth. has SG&A what with to say

you So SG&A. comes if our leverage growth will see back,

from comes with the question next of Tien-Tsin JPMorgan. line Huang Our

question following Bryan's on Just there.

call you new versus on quarter, deals second or well. large? horizon half logos ahead see Just expectations in do maybe outs Any there? bookings the as What around the thinking renewals there short about second versus

thank so for question. that Tien-Tsin, you much

XXXX deals a the us helping mean to of quarter. the been in This large continue is good We we this rest ramp-up whole -- that good the year. has whatever through build continue and I to did for momentum see on we'll year. XXXX of

notice would as up. you announcements the if of fact, gone announcements made have earnings part just see with also release, our we of In number that the clients you a

started Europe pleased expand progress. pleased with have and I'm into to the Pacific. that very now Asia that we also the with I'm So fact

we do productivity, predict last, million. going million since improvements, green of The some reflected or that's and and some That that the changed to between to $XX and hasn't softer rest but financial like deals hard nature is in X of I down the $XX million it, shoots to in year. spoke BFSI X we look our much services it's smaller $XX how results, see for we cost on continuing about efficiency of area the keenly. for deals. going that, we Essentially, to market very, Those deals kind seem are watch deals takeout -- the to momentum excited that of we when are fact should large well very are that continue offers that. most consolidation, us. are is on the very -- are be the we to winning And and to

period deals the these of -- deals, course, of duration the is Of because deals the large -- are period cost-takeout those longer.

see over revenues through is fulfillment will period create but you opportunity you a So time, of gives realization and to better managed sticky, an it of also services. it

So XXXX have to the runway XXXX, the into XXXX. things tracking now know that be total addition us we how exciting contributing so are we to from will value, going we'll contract from other much is is contract annual a for a internally value this in it have XXXX into start is year. we one of What and to runway

Our next comes line with Keane Bryan Bank. Deutsche from of the question

ask right in rate is you're pricing industry seeing And environment bottom wanted since the in just insight that the Wondering right for any the card low. pressure I kind of to demand if on about now? now

so forth. current is consolidation improvement Fundamentally, management, productivity environment on for your question. and Jatin. the is cost of and Bryan, of spend This thanks in so that Yes. the

pricing, By an pricing current characteristics come are superior with the inherent deals which deals these the the of expectation design, seeing is of that than we what work. in the in is this is So market. the

on yes, one in is the So a nothing pressure audit pricing, it environment. would expect current but that demand out there downward is of

as I out of standpoint. we it's a the fair We that are ordinary think behavior play expectation And not market seeing compete. in from

to What as narrow kept for work think, uncertainties. fiscal Got guide, due mentioned short-term the, you've need come towards but would then guys currency you normally, some range the come for it. X% range? revenue to constant enough And guys range. the And get Would would high to year end need the that the my of even back? this to to demand I up P&L towards you happen back that of hit of it get the it would fast to revenue to follow-up, you you some impact the

Sure.

-- midpoint reason larger the is get the So Ravi we mentioned, range of large one and can overall, outcome mean, the see is for to. what that as we Then expected range start look follows, the as we I possibilities. with at

if also you X X Now are and X, that will an is our own the quarter X. see quarter to quarter we sequentially we quarter in guidance improvement giving that versus X -- vis-a-vis range in there guidance means gave we quarter grow in that

overall, at environment, So we as which you if progress. no what see environment tough, But our at the remains is the factoring environment in good making well we as are reasonably own we than beginning the spoke year. in demand that different us. surrounding the look we of is performance the And of there in as are uncertainty a sort we look hence,

range of are the us. go or more one us towards and help could a the can higher few what things, Now help this end of

some there is in discretionary that improvement later part of the One the year. spend is in

well, as a is, you large go business, second. win is is the times, they're mentioned a business, committed. deal, second fulfill and to But after to go earlier, if when naturally sort committed upside you Ravi of we The there can of delivery committed which if after your lot that's that right not is business a good,

spoke we our guidance. inorganic component is of third the The about

because is on. basis fourth in of beginning large see volume up deal, to And that the of done sometimes a mean the getting faster in potential at points XX that year. execute to deal. maybe ramp-up added the the a have only of normal which second than we to the X half, could have rebatch a We comes the acquisition XX And get performance that since you relatively a revenue with pace ramped kind could

So of could play. be this one at or more

sort now, have original we true of to guidance. Right our remained

where keep sitting beginning now, meet range the it the year, narrow we will year. we'll are But this thought right we in as time. of we you same range We of next was considering the the when in the all

comes question [ ] next of with Our Guggenheim Jonathan from Securities. the Lee line

your call Ravi, your in in? if or or are delays verticals months? prepared seen which given talk cancellations this And you leakage seeing recent out have across you commentary, or to so, any may can sort types of you remarks products your of through deal

Yes.

So let get year. and earned be me has add. to to Jatin Discretionary start every

it is doesn't call if So somebody not back, like but leakage, could you structural taking the else as may, that isn't come away. discretionary I as it -- it's much

always So if discretionary may. the part, I unknown is

On started because a XXXX, had that clients. a are very was The mean the customers. somebody isn't company-specific are clients which that we happening led leakage challenges it no us, stable when platform. I in I -- we and else our in year or to when the consolidation, not there was winning as a anymore. have see to there very There's leakage. potential is continuing with stable leakages invest of We

with is quarter In Promoter fact, my scale to since the XXXX. clients continuing up every Net Scores

quarter. clients like trust fallen rates points significantly. percentage XX part this dropped The we That's an providers important have attrition have Our Y-o-Y us. what of

not discretionary are back may. it I would back be sometimes, So coming behavior the Those you spurts, delayed there about. leakage, in spend which coming discretionary, is coming to if a watchful of back is structural -- shorter The ones no way. in the leads

both which I as are existing with we mean see the [indiscernible], new managed it. services So are I bid. that's proactively most winning of well, of deals broadly some how business

the so. side. are on the the last, winning XX on or we I mostly are bidding would in side months say, We

to that faster won won the see will XX thought. Typically, thought expected I deal, executing go And at what last, add have you deals you you say, of you customer Yes. if a you are fulfilling than when and time you we better would let's the the Typically, better, just in compared you perspective months, initially that what because sometimes are

slower cetera. And management to sometimes with, it more are et deal need change issues they there would be because

on there of is time some the expectation. that evenly out one without There in are we win deal. ramp deals of of placed little client change a execution because I anything don't up taking think I So be out always will nothing of ordinary. longer versus to pace is see the ordinary the a that but is organization, versus the

of question line the next America. Bank Jason Our with of comes Kupferberg from

on Ravi, gen mentioned start know, and because kind AI. development couple of times. the accelerating X-part there to had I wanted software rural just of I I a gen you question AI a

average what curious gen size Can Just potentially role give of human and engagements. will your XXX you are of the there? mentioned on then AI software tools of as change do actual longer-term you coding gen the a active AI views more project a us just client sense developer

Jason. client long let you, with XXX-odd XXX engagements, one. Thank -- start first the we've me The The way. come a

XXX you If are. kind are early have opportunities we deals. the where of how prototype XXX in spoke and we XXXX, the is will more these engagement. remember, for monetizable now these rapid quarter client And go XXX short clients. And scaled that's to now pipeline of we about them of -- in and them for XXX, have X very of many our the [indiscernible] execution than into thing watch

continuing So made are managing things means AI our it. platforms, grade, can is last the be have AI, rather second, improve of last so black That or this work first, of a raw In you do we of mile the three: How is make mile infrastructure are cycles you other case we the drop take investing grade it we AI; grade. over broadly that production on have follow How and infrastructure all mile platforms the to are clients. related X unlike the so accuracy discontinuities, How power enterprise observability, the which on do There AI to, innovation I build for production those of kind create to orchestration. create helps last how the of announced you do of because and box? infrastructure do models? you explainability referred explainability? us to built we

and operations for industries, of The is do with we much to as do cohorts it. different start to we and embrace figure broader every that larger an AI how how second create then thing and then templates that do out And on to created of of Oxford much can -- we every on Economics I AI what much studies. different a and many embrace we're and different tasks, productivity investing we we enterprise. industry, does make I so role roles faster partnered a call faster it mean

where So future to machine be plus people the going we preparing for are this enterprises is believe endeavor.

Now years came what of cloud plumbing, but a does a it where, picture you into a it. model developer, couple lot productivity the time very the it you tech innovation. as do operating or It, When the spend of a changes the time of ago, our on to spend of flips for little as call on tech, course, productivity developer. I

pass, at You on lot developer actually improving and actually building. not shot actually time things a time on time repetitive innovation. productivity productivity spending a machine spend write, on not developer can but our pivot which you spending second This on of is could

it. at backlog, lead the the more lower we the would this increasing what intensity believe And a So this And did. is will cost. probably will the reducing is happen this to clients, tech improving second disruptive shot I is our what at throughput cloud than to think

always intensity. this the is if I can And that a well. the have Every industry opportunity ourselves intensity. we creating be than about to threat doesn't So going opportunity an that pivot tech believe is

software So which mean at a this and intensity need to code, goes be opportunity developer don't that down. unique lower you the embrace I a we barrier create lower have a entry cost entry barrier. means to to

for the long we our as as have opportunity think own we it. and can a we use embrace bigger cases equally this So clients embrace to into before than landscape build our

uniquely Cognizant. this companies as see a I opportunity big So like for

follow-up. And That's good a color. quick just then

large deals quarter, original X revenue? in Are XXXX TCV, million think. contribute you guidance? plus the contemplated expected to You your revenue already in materially so, mentioned to I $XXX they those won And were if

won, mean second won The this this. XXXX last year Right same range. doing so the you have we know But was we now, challenge in a have much sustained the that in we as XXXX. challenge because the throughput not deals got we of deals then XXXX win in keep a have we this to guidance because had were And we in good, deals the the better contributing into pipeline this will The in baked that's manner. healthy I XXXX deals. on we throughput and playing visibility we our did don't I year I backlog far have we better Jason, it year. the into have this have Yes, half year a have on And XXXX.

We tail will XXXX velocity. into exit with

because to span So second the second end the rate is have year come the it's has deals large And Earlier, be the to a cost it of plus now to large first normally the by unlike years related than year, unlike run changed. deals. transformation model, takeout lower deals X.X now, you lower has or get normally, the transformation-related year. you on of the to

group. start we execute shape, because bid get good a new over the once in the in the But the versus to committed spend you're then will and did flip then spend already

once have you as mean, are the start So from well. on betting more perform we lines. well, that's you what our to I take license to

Morgan Faucette comes next the Our of with question from James Stanley. line

ask to a questions. follow-up of couple Wanted

deals and trying needed there I of to what looking what of towards range. would get mean, return out at just to the we laid the in scenario of end to mind particularly your deals? would to high happen, of end lower guidance that gauge in guided the the discretionary kind starting of bottom of end. on the be Conversely, order range? your in You up end with you Or incremental delays are pushouts I'm that

Yes, sure.

do and I'm and performance the already negative that you those quarter happens performance furloughs. typically numbers rest sure you at mean for year that flattish given very a So if looked in those X numbers, mathematically, really a of the

of So our that's markets trajectory didn't at if looking we performance any show really and progress. the positive sort are tank

it. Got Got it.

perspective? profitability, that's and the then about what skilling like types your a have lot now. focus it from discretionary that the transformational more into of persists? things been doing right what on terms if kind And to a that think or next into impact the any how we we or is bookings you're you'll pipeline having cetera? Okay. year deals And there's able hiring And that, on and of on put transformation. that environment how we impacting considerations should taking this be be impact seems in talk and et should as that hiring But directly of there other account into you're about in of Are go could

Yes.

pyramid So you versus healthy in discretionary normally you have where if kind different much projects. of deals a may. is small I a smaller large have projects, pyramid,

So the in experience. services you discretionary with deal hires rightly -- with normally managed because hire And when hire pyramid more discretionary the comes deals, you when in, fits there. lateral you pyramid

how So is. that's probably it

to noticed, you've utilization X quarter If we improved X. from quarter

And So sharpen to that we'll extra gave us the continue runway. our utilization.

that the engine the continued happens. and existing newer So to projects us people the agile people to hire the enough keep need into senior that as extra gives and you teams grow rotate runway from

So as just the well we with for what on -- discretionary we have not have fulfillment I environment. done how We're demand pleased I'm the our very deals about what won think tackled and we engines. have on have prepared that have we of eventually comes getting spend the agility whenever now pleased we very on as back. fulfillment done it utilization

for as demand, is as we the we the spike if engine agile those are placed well situation the is So current to a well seize demand enough think opportunities. as there in

Our from line Katri comes Wedbush with next of question the Moshe Securities.

down there of and to the kind of Katri kind in mentioned a execution It's and way environment. to to last Wadbush. just congrats on I Ravi, to book-to-bill. back ACV. [indiscernible] want renewals Moshe booking maybe pretty as from compared go logos break you metrics, by X.Xx new it year, tough strong extensions Is a to

there a way of kind on bookings said for X%. ACVs? you same think a Is the I basis were to XX-month get up comps

hear you. Moshe, from good to

have visibility. do we that So

the We published size track that things. have that track of we total the track What is contract the we the or the ACV of externally. deals, needed. year duration the not to the We multiple how the of months value, next And and year for and the much translates also capability deals, pyramid the XX months. next attached it set first this for to XX for ACV

I better. forecast that well on have rely to so get our fulfillment engine information can So pretty that as much intact as we

something we have. it So is

deals, the deals. go they that duration goes small deals, you of know Moshe, I'm the but down. book-to-bill the of are depends ratios, constant it. sure I you because you what It you We have track also not question the externally, of this published duration deals, large The on that. take this. up keeping I'm asked it mean a and when take on

book-to-bill has a meaningful X. impact the the So between

calendar we because other that metrics is tracking is ACV the us the then of internally what incremental revenue year. for the current one get are gives we So

So is together it's to growth. a going combination have know much of contribute put to it a how where things you to incrementally to you get point

to And is you Or get disclose way to logos don't that's also mix new a and Okay. renewals? there internal that of kind then that? of

we logo have new Since for specific on Moshe. we had I've new very So program, healthy board, logos. program have a come a

I $XXX is We thing, logos program them million ramping one of opening annual up also million new a $XX have $XXX -- million $XX spend $XX logos mean account a a is new thing. but to another million or to client. million, client to, ramp say,

So we put have and swim in very both active lanes journey. are very, our

of very hunting now the has annual have mining target new separated the -- engine a coming to as the of engine hunting logos transition of mining because engine from accounts geo-based. changes. a have we is there's list kind well. engine those to the the that in And also We And size

on very this are is we to and in are But we're opening we information are pack how we created What we logos market and where not how with we the market. very, expressed have new we internally, pleased not have it external that many new not have logos done up. ramping our

you. Thank

with Jamie Friedman next from SIG. line Our question comes the of

Does a I'm the it's sound I thinking make of If simple you're if in the the of sure how just sequential make want years, QX. I'm you? understanding and getting to I just assumption about flat, is QX I not, math, take most about in the for the that I shape QX that the X.X% and to year. know but midpoint sequential about Jatin, right your

math quarter for a in I our me, we'll quarter sure. that I higher and the range, X you have don't qualitatively, X I'm range to to with front mean, yes, strong us -- flattish -- a of the I agree for would -- the have higher towards get to of but have end

first And letters with shoot that? you letters I Okay. in in the Ravi, used think use -- that most of years. Can you BFSI. company then time those on word BFS context the the X green And it's or language heard the in I've your companies elaborate

Yes.

the look sequential the the you last was few BFS, at notice you quarters of drop relatively X. that drop if between quarter and X context So in sequential would is smaller quarter

between. So happened in something has

worked months, the hires. teams we on BFSI with in we vertical, energized new XX some have So the have reorganizing our last

good and offerings. for now I list operate financial exceptionally insurance. banking an now have for mean, services list We of I have

-- opened opportunities fintech for on and spend created have AI dose we ourselves. taken small have We discretionary

give few Just projects sense a a to running. AI have in we you insurance, quite

we variety So happening. things have a of

is services, is are customer initiative. insurance platforms P&C In network, which digitizing distribution a is you modernization, X financial going platforms. In admin benefits going significant insurance, change. through and through which In or policy primarily important The that is examples. give banking group the mainframe I'll X there is transformation. agents the and a significant and service

AI. and with is offering have we which bundled offering So an it is an

detection takeout. which have prevention, important The through cost is massive and are going opportunity. regional an We fraud banks

offering there. out an We have

So reality BFSI. market reality. strength of think to a what is organizational And mean, there in happening market the is there I -- have now is we counter that I

So stable shop ladder. a the and offerings the all are the with place climbing right up are we teams with we in

tough market. everything trying are We a we can in

upper the what back likely saying, sorry, I before is at both the go response reacting to to Yes, -- midpoint so what reflect range earlier James, we I just to possibility guidance. then range in on expected see our just just of on to asked, mean ends completeness. said said you I what specifically end. that to its accordingly was we want in And the the the an of question outcome of is the want I to and see possibility when I you I respond had I to

Earnings This concludes Solutions today's Conference Technology QX Call. XXXX Cognizant

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