CTSH Cognizant Technology Solutions

David Nelson VP, IR and Treasurer
Francisco D'Souza CEO
Raj Mehta President
Karen McLoughlin CFO
Bryan Keane Deutsche Bank
Darrin Peller Barclays
Brian Essex Morgan Stanley
Tien-Tsin Huang JP Morgan
Jim Schneider Goldman Sachs
Jason Kupferberg Banc of America Merrill Lynch
Ashwin Shirvaikar Citi
Bryan Bergin Cowen & Company
Keith Bachman BMO Capital Markets
Glenn Greene Oppenheimer
Mayank Tandon Needham & Company
Edward Caso Wells Fargo
Frank Atkins SunTrust
Arvind Ramnani KeyBanc
Joseph Vafi Loop Capital
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.

Greetings and welcome to the Cognizant Fourth Quarter 2017 Earnings Conference Call. At this time all participants are in a listen-only mode. The question-and-answer session will follow the formal presentation. [Operator Instructions]. It is now my pleasure to introduce your host, David Nelson, Vice President of Investor Relations and Treasurer. sir. ahead, go Please

David Nelson

and a everyone. release copy quarter XXXX company's operator, should for now, have fourth results. year’s full received of and good you, By morning, you the Thank the earnings

copy a not, have you is on our available website, If

Financial investor loaded Officer; Karen on presentation are discussed onto our call. Francisco today's Raj call The and speakers Officer. D'Souza, Additionally, covers an website. Chief key Executive the Mehta, we President McLoughlin, presentation have on Chief points this This we have

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

Francisco D'Souza

coming highlights This joining plan are headed; a view from Good of performance, full how clients includes and revenue solid our of morning, few current everyone where to call. the Cognizant’s for and industry our second, three morning first, like thanks a topics; our nearly cover a momentum third, and year, which growth we to our to XX%; XXXX. use year deliver XXXX off strong I’d

rise, of Companies to intelligence, which blending of and new competitive. dramatically are ignore digitization and way but entirely our models performance industries across and are level. and needs to models realize of experiences. thresholds business technologies That’s combining long the with and and rise why continues world’s a built environment. process digital so entirely firms done way important and industries. are analytics, improve that enterprise digital as current This Netflix processes rather emerging generation both players. Things, With artificial Digital that their as the either of the enterprise get accounts many Let’s another business is a expertise to rapid in native to integral customer technologies Facebook, industries why the economy and can at robotic Cognizant remaking manufacturing being industrial the has today the pillars about or improve financial how physical. stood cloud spending. of physical, promises now being are with new In written in Cognizant that and Hybrid digital digital and recent their powerful no story of are still years not substantial as begin new and have work the heavy automation, been clients our new for is countries see have IT will over clients, with digital partner, Today other decades the we services, with big story players Internet new insurance, our industry lives. healthcare, Google. tech competition rate the remain of being and Amazon, about cybersecurity digital core assets become growing Most These longstanding weights. like create leaders them percentage hybrid they the serve enterprise like already of

economy. strong clients, continue our industrial on we’re our also native digital a partnerships digital position in with the we As focused productive building

to level range what new both. goes at mix them becomes the digital resolved with this clients are help to companies stays of only handful is of and transform of helping of enterprises. what for digital We generation physical, one go-to-partner every a heavyweights, out be Cognizant figure a of of capabilities their what a

for opportunity in believe are pursue transformation. to we digital a this market position huge we at strong So scale

Throughout focused performance. our and plan XXXX on shift Cognizant’s digital articulated executing accelerate year stayed services we first solutions. ago to Now our let’s to a XXXX, review

of to return fully the three improvement are; reminder, our maintain a and elements As scale implement our three programs. a plan margin core robust capital our practice business, and areas,

all made we elements. XXXX, significant three During progress across

are a four and performance highlights; of Here delivered lines. top few consecutive first, bottom quarters the at we solid consistently

to Our XXXX revenue which the guided was grew nearly within our year. XX% billion $XX.XX for full range

structure target. to a improve we number operating year margin Second, slightly exceeded took of and non-GAAP actions our full our cost

and XX% XXXX total our grew well of revenue. almost accounted digital Third, average about annual XX%, above related revenues company for

In digital above services generated average addition in of portfolio our XXXX, company margins.

shareholders term of cash growth our to confidence the the performance During through our the Overall, program, dividend, share of an quarterly believe year, first repurchase Cognizant’s $X.X share in and returned underscoring long business. XXXX repurchase our the demonstrates our also accelerated we billion launched program, of execution. consistency phase we initiated second our

to forward now our how billion the expect range for Let’s revenue to growth part strong billion. turn will to my a or be XXXX. $X.XX billion $X.XX range a to X% third $XX.X expect we within billion momentum discussion, of QX $XX Beginning and of XXXX, and And revenue we a within with XX%. guidance, of be deliver of

operating and our business US reflecting dividend XX% all in last the cash has to of new accomplished of deliver will while continuing we increase a announce strongly our the tax year, our share. in on that margin is in we invest target in in I for growth to our confidence ability XX% strengthening remain the approved our momentum Propelling We which legislation, quarterly of confident business non-GAAP to And our track building, continue us Directors forward differentiation. $X.XX that a in achieve benefits XXXX. XXXX. are to per and to in and our pleased Board am investing XX% operational comprehensive operating We margin our non-GAAP XXXX, of

and their need most Our transform. for digital operations, and very they providing practice services solutions our digital areas, parts and Cognizant digital are effective three anticipating of proving effective Cognizant Cognizant needs to technology systems and business, the at clients’ the enterprise

ability our broaden time, geographic centers our have our capabilities end-to-end, and And footprint consulting, we collaborators deepen strategy At with our about transform of invest highly is difference their Cognizant When creation. Cognizant as key entire problems more this; put use adding to technology and talented business their [ph] environments management the and well on services business new must industry welcome continue our our goes expanded and customer to and altogether, who and people and global five skilled into to We they data and as knowledge Cognizant in on and our we’ve clients’ with on technology markets. penetrating year’s operations, operation engage solve, to to interfaces, coupled to applications clients delivery Think marketing, are on their focus what their able user underlying service acquisitions, content through interaction, on enterprise. intensified strategy, and their professionals digital infrastructure. and user the models, platforms, it in processes, is portfolio, the developing industry-specific solutions. last financial to approach same focused product experience, you their

making There no entrusted information the all simply clients. and undertaking the from investments, of to We client critical have capability, to global the non-negotiable building of this strategy and knowledge, work it local curve shortcuts be deliver and all results. through such for are a with delivery, ahead the way capability expected end-to-end and to domain the

to past in returning Let subject up about calls. the wrap by I’ve the me spoken

with to Cognizant’s consistent may that This to enduring and era. you a have they thrive As Cognizant’s digital we to central is the the range the broader contribute economy new education know, and is need belief of which be communities enable belief to to we this to must digital operate. stem in people skills significantly in ambition

And are and so training a digital US for education focused and thrilled students. workers announce the to providing non-profit Cognizant stem today, on formation US we and Foundation, of the skills

recent laws. foundation improve We’re families. supported changes million, foundation across initial an the tax multiple help establishing workers the programs and is education the for US will new in and grant to which of opportunities $XXX in on states The focus US US cities with their by

open As than for expanding know fill far you there in rapidly to trained work technical are more jobs them. there digital workers economy, today’s may are

designed fund US Foundation education high X.X applicants. veterans students, the jobs and software the school initiatives fact, will college of community close skills Statistics and develop specialized workforce threatens for digital the graduates, help competitiveness million Bureau stem gap college Labor in XXXX other In seeking for qualified partnerships, gap To Cognizant the projects development this gap, a skills between businesses. private business person US jobs. programs, This technical and American of others and public in and

today’s workers, does of to local on technology social enabling The As give we’ve focus, communities to our tomorrow’s back part new years. a the of responsibility commitment for company and our stem dozen professionals, business. reskill upskill education overall where train work will build foundation Cognizant’s global the and been

company Our skilled talent. on highly runs

in the we And the workers efforts plans support cities one We of our near are in training permanent have workers. cities with several X,XXX next least than the US. To workforce. technology the in Last employers largest years, XX,XXX added programs our to US we five year future. other and training, at citizen growth, plan underway over hire recruiting, to reskilling to our residents to US and we more of American extend

be years going economy in ahead, need learners to Cognizant more career for is determined becomes the of to the ever to this. at the substantially enabling forefront be intensive, workers technology As long is and the increase

our let’s Okay, transformation specifics to well of along it now over working how turn as their with we’re clients speed journeys will performance. as Raj, them who discuss Raj? digital the segment business to

Raj Mehta

what how When modernize their customers, further operations, create to increasing clients their Frank. drive ask engage sets our backbone. run to their and with solutions you clients say you, deploy of platforms Thank to strengthen ability transform that sciences profitable our areas. portfolio value Cognizant they’ll secure is for industry, Examples life and we MedVantage our Cognizant Cognizant IT and across and the to and Cognizant apart, year, they healthcare Clinical This three for our to our develop a foundation name solutions broader Plus insurance, include for and Core practice for few. growth, LifeAdmin ClaimSphere continue industry it

its has to easier offer across value capabilities, process transformation, cut our of and and also clearly the and This understand automation, capabilities solutions of distinct defined clients industries that We range as full areas for cloud of range our provide. capabilities. more. practice intelligent it legacy made the such they digital has enablement, Each

of that clients, supporting leaders other industries continued our continue our and of aggressive are decision and Given CIO been the presence chief We’ve digital our the we well to evolve client systems complexity our These officers and drive accounts. marketing expanding chief our serve. to engagement. beyond to key and within each embedding processes the within geographies in makers increasing the scale largest we’ve officers

are such areas and which skilled in what clients and team, our In training addition, XXX,XXX evolve leadership delivery. Last we’ve optimize capabilities on legacy our of as the and data matters associates. and substantial digital automation, outcomes. their to continued are we’ll more increasing results. course They the localization of thinking, science, over intelligence, output Cognizant’s in associates we based high-end in leverage year and year, helping focusing day, this are At account clients our outcome integrated artificial end environment of cybersecurity, design investment continue Things, to fully Internet

sales, changes this companies. field So comply of Working management market we’re doing segment, that their handling, let a largest with Cognizant’s across realized quality solution. the leaders and their quality management of regulatory seamless offer see where device healthcare client services the cloud to operates, and work using we the service digital MedVantage, future ability example of quality differentiators. the medical with the building state supply and predictive In an for transformation service, parts, of compliance. prototyped me chain, the digital are world’s future for integrated client, of a one client complaint our We can

our to solutions to XX% believe error in reduction client’s regulatory thousands significant dozen significant be in We to we a meet cost, spread will service more increase clients, that and conveys field the increase form tangible value and a of the revenue, of include that contracts, achieve the we to can in users. personnel, companies service from countries need value our a the our deployment the are revenue This is across now case complete, productivity XX% rate. than benefits X% able rolling for client a operating of of of lower create study reduced citation. increasing in out XX Once

and property In the in Now year-over-year. let’s business the turn to claims. are the and our include quarter. in financial insurers, interest advanced growing technology. services strategic help segments industry for double-digit growth grew drones for growth insurance clients. artificial fourth of deals. Banking was insurance, driven data, primarily banking In using mid-tier by geographies they sharing, We to quarter, watching performance we and in secure the Examples large decide injury see and our financial our intelligence the had among personal X.X% and inspection,

to investment to beginning focus Moving while has in spending digital clients’ pressure, clients as of sharpen a be banking, recovery the certain under on an continued we large their see these technologies. banking

We work we’re their driving the all are by savings optimize operations, legacy spending doing then the help transition prepared these on enterprise. and this and for their across to apply to systems digital transformation them

care consumer that to effective with our Healthcare analytics, up consistent saw XX.X% model is was from healthcare, revenue clients engagement value-based focused and increasing insights. our driven solutions. delivery demand interest to virtualization in We data on Turning and is payer year-over-year. shifting a across fee-for-service digital, cloud

As driving partnerships efficiency. This to increased new consumer leading a seek ways organizations care peers and operational healthcare and collaboration to deliver result, is while providers. centric across

as combines software-as-a-service in differentiated healthcare of support to partner programs. us a extends now position clinical operations, Medicare more processes market quarter we and Within the regulatory provide TMG products sciences core growing and and transforming Medicaid life our well Our see services Health growing than a care and as had of biopharma. sciences, more offering, leading The a as the organizations services in our on We fourth Advantage interest strong industry. changes patient experience. than in which Among XXX we government clients, particularly the for that these capitalize XX% addition healthcare digitizing to markets. and software life within in like business development position managed fundamental

resources, revenue we products to year-over-year. increased and XX.X% Turning

to from retail. growth our in see logistics continue We clients, sluggish manufacturing and growth offsets strong which

engage like from based another year-over-year. media, to digital growth strength growth, our solid quarter smart strong the logistics, create offerings. areas energy, we sectors, Cognizant across broad and and Communications, digital expansion In business on curating leading areas creating of had in with increasingly transform technology had utility their result products and up all content. manufacturing, Our the QX, and in emphasis CXOs models. XX%

relying their operations and help right in operational Valley, where all create in content to us context, to the As the our economy clients you they digital the time right is the US, at footprints. channels know, meaningful to globally, through but right have about Silicon the person content the right And to only are on also tend experiences. support not smaller

mark year currency XXX Looking Europe at including basis than point acquisitions ago, integrating localization impact our XX from Service. the and our XXXX, We’ve in centers, campaign. positive a world successful XX which much been went impact successful operate and XX countries of Brilliant across and currency. geographies, more XXX from progress up of our by international spoken. recent now year-over-year our are in including rest good markets languages Netcentric, enabled crossed grew QX, Adaptra a in the reflecting in from XX.X% X several point made Zone, has We billion XX.X% in the positive basis a revenue growth growth our including

As reputation their our a delivering selected interactive makers, partner. Association is for of digital based C-suite European in digital Football solutions sign decision as to the which the Cognizant transformation UK growing

in help strengthening to build profitable its journeys. for Karen over digital up, solutions foundation a to energy over and fans clients XXX global investment our to growth transformational focused with you. the and million of and the We past we’ve year, considerable and extending growth. managing in relationship will their succeed to capabilities our easier sum make drive soccer’s be sport it developing deeper To

Karen McLoughlin

point performance rounding was excludes the expectations within QX and from margin, our operating result were EPS repatriation subsidiaries. expenses year-over-year, basis Raj excluded $X.XX. solid, of was revenue year was Reform realignment and the our reflect related you was strategy charges morning XX.X% one-time deemed Tax our full tax US and a Fourth Act, XX.X% which including impact and out earnings In positive of our Thank primarily X.XX guidance growth. which XXX non-GAAP resulting range our currency. and within execution revenue and tax increased successful billion foreign to on sustainable expense, undistributed good quarter, quarter everyone. drive compensation the impact rate the $XXX stock acquisition recently Non-GAAP on enacted earnings of from non-GAAP and fourth based million was XX.X%

XX operating $X.XX. from For non-GAAP was impact of the XX.X% full currency. of and basis XXXX, represented revenue points year was year-over-year, including slightly of a Non-GAAP EPS our above X.X% billion margin XX.X%, negative XX.XX growth guidance

$X.X XXXX year quarter, As fourth $XXX our cash billion billion one part the ASR. in of In a through ago, repurchased the return $X.XX capital the launched in out of dividend per quarterly program return beginning $X.X phase we of share laid of a initiated program QX. capital and we shares million

We are in currently longer and evaluating this may have program. capital that tax impact legislation US the return our particular new overall the on legislation term

this the are of more future flexibility tax the US and of territorial permit to global We as greater competitiveness levels playing of field supportive across will investments. it capital flow allowing system legislation The a for modified markets implementation ease with companies. increases

in with inorganically. of peers, in more business, to report our strongly step, that the dividend $X.XX, bring first increase pleased a technology both to a quarterly has and This business strength of As confidence continue our the reflecting with benefits reforms. increase tax line allowing our to coupled the approved in significant us while Board organically of dividend will are our the we to invest

Cognizant the described, Franc stem Foundation. US ongoing our significantly through education commitment to to contribution Additionally $XXX plan expand as million we our planned to

continued the services our and technology XX.X% outsourcing represented quarter. Now for financial technology Outsourcing for from XX.X% Consulting services. we grew and driven a see services as Consulting strong grew of services growth of year digital XX.X% revenue details in and operations continue the QX by XX.X% digital demand services infrastructure and let year-over-year, to of ago, me solutions. performance. revenue discuss revenue additional strong

of fixed Turning fourth came from price revenue quarter, contracts. to XX.X% our

our clients to over our that progress of charges us strategic as continue in will invest strategic we our to quarter, to managed fixed potential quarter, actions continue the total in million the allowing of operating XX in of make annual in at revenue. for margins seven to the $X approximately number brings update moving to defined or business take in margins, on structure the to while least arrangements. in expect XXX. We with related the customers improve added generate services million mix towards business program. towards QX shifting We more X an more to This those term we longer And now or cost to the and million the growth. actions These to resulting continue realignment price

fees, advisory we our optimization forward additional Going to estate costs incur and further cost. severance may of related real

higher optimal function leverage and spend through structure, XXXX in in higher effectively. structure utilization, value in we focus opportunities make further of XXXX, the of we our pyramid focusing do our based, to business, further In we expect position XX% as not sustained overhead of of levels market on that leveraging Additionally, more to accelerate corporate addition improvement driving to digital unit reassess continue on such digital continual our broad progress less value our high in our place. business pursuit simplification continued our will operating as profitable transformation target work, non-GAAP margin to services

these on and enter We cost of have initiatives of steps and footing solid we processes automation supply management invest allows margins digital improved right took as delivering such in and savings XXXX XXXX. forecasting capabilities, XXXX further areas in to in still invested to to our of while in The and in the our XXXX customer our us implementation size key We after demand. also continue structure. systems

we Moving headcount changes another effect continue metrics, structural as key in to utilization offshore moved in headcount, management. QX higher our to

during will decreased from XXXX efficiency added operational help BPO over drive our in attrition We resource improve We XX.X% new including annualized our help greater the points quarter, profitability. expect of quarter that XXX hires alignment, the the and changes net improve basis quarter. trainees while and previous best these

for was utilization the program recent onsite excluding XX%, utilization offshore was was Our and offshore quarter utilization XX%. XX%, our graduate training college doing

profitability in balance the had were of the Receivable cash DSO of at our the which days cash billion $XXX sheet, with the million, $X.X healthy, we of to generating Turning of period. we one X.X from improved and receivables quarter, day We the quarter down with very end quarter, short year billion reflecting quarter business. strong finished investments. term finished the remains ago operating a and unbilled flow the including XX

was the balance receivables end broadly from approximately in million, January. QX unbilled build We’ve Our XXX of balance XX% the flat QX. unbilled of

$XX outstanding at quarter, balance debt outstanding million Our was our on XXX the included end the million revolver. balance of which a

diluted count QX for million comment year full was would I on like quarter. shares Our the and to for now share current our the XXX outlook XXXX.

For of the full $XX we the to expect XX%. of $XX.X year to billion represents be X% revenue in range billion, XXXX, to growth which

current exchange time not and potential based Our providing is the guidance the the of the course on which over currency of are we for fluctuations rates at does year. guidance forecast the

expect of recognition the standard evolve to XXX revenues. will be ASC We revenue new the immaterial adoption

of billion. quarter to the of For XXXX, X.XX deliver X.XX range expect revenue at to first billion the we

quarter, share of anticipates at XXX approximately $X.XX. rate least we million and first the XX%. to EPS the expect a For of This non-GAAP shares approximately of deliver tax count guidance

XX%, the balance and of count guidance the million rate to impact approximately phased deliver $X.XX. XX%. in guidance the XXXX. non-GAAP the includes non-GAAP which and For of we This approximately margins will tax share the $X.XX at billion anticipates XXX shares of a full be repurchase, to share over anticipate full of operating XXXX, of approximately be EPS year least expect we This year

contribution US US new and non-operating and Cognizant Foundation. realignment additional based related losses exchange the and EPS foreign net acquisition gains amortization, the charges, of and reform Our the non-GAAP tax enactment currency planned compensation, guidance impact our of to excludes expenses act stock the

for environment in areas in impact also or regulatory tax. from account the guidance immigration such not as the Our shifts does

to tax I would close, on our briefly I longer Before like comment rate. term

today, determined our of various combination international legislation tax geographic structures in tax mix in range as can markets. we on has and earnings rate calls you positioned operate our such the Based anticipate jurisdictions In along rates our in that is related recent earnings strong XXXX. the Tax we Reform tax which tax by of solid investment including in Operator, to tax to XX% year US in for income will know and As what deliver we beginning in Act, business a in the our with and we another revenue XX% open know, be the changes growth continued rate execution XXXX. summary, XXXX, us and factors the well to questions. globally, of


our proceed Bryan Deutsche with Instructions] from Please first Bank. question. question Keane [Operator is your from

Bryan Keane

in to cause banking to think that’s the what just showing the coming to about of banking trying little you tax large side? through of spending, signs could wanted Just ask little reform improvement. large bit about pickup a think Do that just a of bit

Raj Mehta

the still Bryan, this starting to to the think center those starting and with I you’re balancing growth, to environment are and margins in around additional pickup been outlook. digital. is and well focus accounts starting revenue been that engagements challenges decisions had within for the money and And with quite mid-tier has the very see of balance of the our think Raj. terms lot on positioned are forms regulation capture banking, given in reform, a to banking we’re the digital healthy, on it’s changes, along the And we tax on in a come banks. some but some of of legacy but obviously to see obviously a transformation. that large where in we’re we optimization the investments I of some always There’s of we’ve both making with demand work Look, obviously, continue some prudent

Bryan Keane

is days, about one is demand. stronger that just versus for to seasonality just anticipated. that demand, revenue little numbers first the higher, stronger thinking little Anything And we than about is ’XX think a pushing there guidance, quarter those just the extra follow-up Karen, a just this

Karen McLoughlin

of the as so Bryan, as On think a to year’s a growth solid there’s that’s But will with little QX a we think honestly, year-over-year start, nicely. helping play off bit basis well the out quite currency impact we sequentially.


next Darrin today Barclays. coming is question Our from from Peller

is now line live. Your

Darrin Peller

I expectations the margin the variables. the for, the more a just for margin you I and the and then – outlook, in currency guess side, been to first M&A a little us could embedded bit you off on bridging just if it’s detail it’s want then start the gap plan the know from now. some more really expectation bridge with more specifics of maybe are where I operating the on to – but part XX% margin some years, year the gross of a over help few and the

Karen McLoughlin

let it’s Karen, me take that. Sure Darrin,

guidance. revenue So start with let’s

we XXX the last which be did versus no get to as currency basis you’ll year, did built of months into this right X% we the that see Zone, obviously of currency about and that TNG revenue deals to QX that, we about the year in so and the Netcentric full then so impact benefit constant year, year-over-year, the on the guidance, now the just contract XX% year X% points growth a X% There’s full we’d that. basis impact would there’s obviously in five So of projection. incremental M&A so

guided XXXX. the then implemented we’ve the XXXX that the to into margin. cost operating XX% obviously A margin guidance front, helps or there’s we’ve And no M&A point. the in that savings of is to deals will approximately So on lot in rate, but large benefit this with carry that of non-GAAP driven the beyond by over at built no obviously that growth

been work. we’ve We’re we’re work that margin the higher of the as to also, as digital about, shift higher has it’s business value; more talked seeing,

to of leverage as terms more continue So levels a start will around then to and pyramid, really leverage well. to on the we’re the believe in driving that there’s become high as focus to We do that we’ll bigger scaling overall of the that. of continuing utilization. continue pie piece And continue of expansion work seeing margin out sustain will corporate functions to drive

to but So expansion. lever, come no together a will it’s pieces the that drive individual number there’s of


Our next question is coming from Brian Stanley. Essex from Morgan

You line is now live.

Brian Essex

generating Are that in geographically? potentially and cash a anything tax changing I changing, longer of gets I for mean we where trapped cash had issues on the might this Is you think there under, transfer Karen rate billing fix pricing, where you’re I term that longer coming question policies, expected? in you’re operationally and taxes. term you where

Karen McLoughlin

that to nothing there’s the rate that to is overall the the Tax in drive outcome doing Reform helping down. certainly of we’re obviously Brian regards Act, US

As out in India look has will that’s into including and time rate XX% rate of tax increase geographies increase that. will to the put to to bit a expire holidays all be based items unusual of continue operate, to But so the of XX% that a been as on we’ve which why because accommodate start of you guidance nothing though know the today, we the doing little and in various number as and a we’re rate that over we future. the in


Huang Tien-Tsin from your with is JP Morgan. Our next question. Please question proceed from coming

Tien-Tsin Huang

will the on how on past specifically. margins views know I throughout margin gross years. you but check know double might be don’t high might great. to you profitability contract can mentioned you anything I the we see and how I Karen be se, think also just so focus, year utilization some guidance than mentioned pricing, any margin progress gross margin wanted us there offer And you give on can Just per you outlook, it give guidance level different

Karen McLoughlin

don’t margins at give around a you’re this is up certainly intend to mentioned, I see hiring. year, of on think little during what the depending guidance but So Tien-Tsin the and will you gross as bit margin bounce going will we a to hiring, point, ramp lot be don’t it

So we net about QX as in add you resources. saw XXXX did

we in this in that QX of we’ve has quarter that impact an that so gave promotions bit We the when related a raises to also that happens. XXXX. that QX, in obviously done Typically and do year depending

but basis, It on investments target on that we to of a won’t the be that XX% So make. a the throughout really year approximately depend linear our intention path full the will is timing year.


Your next from Sachs. Goldman question Jim is from Schneider coming

line You is live. now

Jim Schneider

color wondering provide could you progress the more outlook revenue on a year. was through the that’s likely to and if little maybe how I

the all, throughout XXXX, maybe services rate comment banking Raj’s will to the does improve hiring secondly, through plans continue and assume it growth you ratably the your on of year? of can revenue financial that some and then First directionally comments, given

Francisco D'Souza

to me let take Jim try that.

to be less strongest unfold growth seasonality to quarter unfolded in revenue from a revenue the slower. way We a the in so, QX QX to the past a to expect we years. and tends revenue roughly standpoint. our tends season same its little get QX growth a holiday little From standpoint in as in be

expect. I kind the So unfolding we don’t unusual pattern of see that’s anything this year.

from think environment our don’t financial have outlook. improvement we to in I the baked the services current significant in

in business. that said, we green Raj As significant not turnaround a calling see some certainly but shoots,

assumptions services baked for modest year. say financial that’s the I in would for to our So guidance


is Jason Our Kupferberg coming America with Please Merrill from next your Lynch. Banc proceed question. of question from

Jason Kupferberg

here top with topline obviously or the the came more at XX% forecast. X% the to less last off really in and the year we’re year, same growth in end outlook you of ’XX So starting as

overall sound more thanks. so to be April, there would like center I a ’XX ago. March, just a have among what of does the on firm may versus the on some tends May that of had visibility year I it you visibility feel sense encouraging outlook want the today know real discretionary kind on up points be piece get money just you comments the the visibility helpful you in So banks, on to XXXX but timeframe, data

Francisco D'Souza

of of say, set same Jason sort guidance I the way beginning the year at we year. the would every

in So – don’t same forecast our plus said I some revenue for business best the identified. any pipeline, by use were of We through almost we backlog point account at aren’t that’s factor meaningful process views plus for the at think thoughtful methodology at our that year. of account beginning of of every at where is year, We account teams’ as we based ’XX versus this in what we client there this the point on ’XX. have an of – beginning go very a bottoms-up here difference

at at visibility that X% say point point. XX% was same year our So it this I this last to as would to the is


question next from Shirvaikar is Ashwin Our from Citi. coming

now is line Your live.

Ashwin Shirvaikar

like to you margin type you XXXX non-GAAP one-off difference a changes, much structuring so then because question And is you’re actions how realignment at margins just up if I of narrowing end, question, as want I which would sub-part alignment between other ask items. in better the expect some GAAP a no made and margins go in a on have also the point a place.

Karen McLoughlin

in we’ve Ashwin to I that’s from come in and terms XX% going already think actions lot I to think that shift guided XXXX, the taken. we’ve that the a of for business of

talked bigger now clients work both automation optimize about we’re look internally piece well some time to we’ve of doing we���ll the pyramid, continues become that to for a continue As as the for for the ourselves. to

on. are what number taking shape realignment a that charge will going to business would require the just So call forward. execute manage how of I there’s that things They don’t we are a necessarily

as So we’re we including ourselves the in beyond this that we’ve move items And XXXX. predict. you and is target we can’t difference XX% But non-GAAP given of the know very a XXXX, losses haven’t guidance by to for as for and we gains FX comfortable between comp, which today year. number then obviously GAAP driven stock set

continue the and there making US tax to those difference the donation we’re that one-time reform big Foundation things time GAAP will year. and or the then to items to one-time excluding be time realignment whether or non-GAAP drivers later from this the of be between it So, maybe items,

occur. those So will continue obviously they as


coming Cowen Bryan is question question. proceed Company. your next Please Bergin Our from with & from

Bryan Bergin

there? launch as I baseline of a wanted XXXX? XQ you the any Can to somewhat on business, comment see and for healthcare outlook you do pipeline performance your

Francisco D'Souza

that as TriZetto of with TMG. and I well given think especially do the the us, continues done investments we’ve aware you’re now all for to healthcare

that to out see we in as XXXX look think I I continuing.

We’re those seeing just strong around very continuing not as we are positioned just come that digital traction I all I but specially that a around the digital transactions. some Facets are know for space think pipeline down around in you mergers also and well TMG. engineering and think deals, and with our interactive developing, and may to with BPaaS after around work the potential there potential there’s strong out And modernization work

strong So see I XXXX. think overall the and investments in a healthcare well serves growth in we us


from Please your Bachman Our is next coming from BMO Capital question. proceed with question Keith Markets.

Keith Bachman

is margin see for how the given. that to wanted a you. guidance this Karen impacting bit you’ve little talk is you could about FX if I

dollar talk of bit the of with that Not in tailwind you little strong Some the guidance? margin terms hedges the margin disclosure how the speaking broadly headwinds, a could clear would in pretty FX impacting the if just suggest But though. XX-Q of is a margins the placed there’s the rather. haven’t about the you impact

Karen McLoughlin

rupee Sure in and of so currencies to Keith, little I material to and bit impact doesn’t but the is a of tend really in be sort impact pound really been those we if think in effects dollar revenue XX whatever and margin it’s euro some rupee. potentially hovering drive for essentially line. The smaller currency pound and and impact a it’s difference, hedge, really big fairly Swiss has and stable frankly The you rupee. Franc, of them for the natural can the but with then a both euro XX to a the it there’s But been mean the bottom the have months; about the movement rupee rate. see top margins impact three last us to line and driver it cost that bottom line that several the the line, the

talked past, exposure in hedge on point. consistent having XX% And typically margins of the this at that’s year, So about rupee year-to-year. a given we’ve we in that’s not any significant our the and impacts about then from as


question Glenn Oppenheimer. next is Greene coming Our from from

Your line now is live.

Glenn Greene

one landscape Maybe relative how goal about Karen environment? then but to are a you margin higher or the year update just of pricing level, sort feeling goal, and a that worse just quick or and initial XX, on obviously after the but the later, neutral XX%

Karen McLoughlin

made say when non-GAAP So get XX% that ourselves to had work would We we the over we I we feel for of shareholders in commitment we’ve how think margins, operating done a of for set I our targets lot a around years. there that. in XXXX terms the of those terms neutral target set to and

while the business. the company term around in invest the for to I really with last continuing think the way we year everybody performed are extremely pleased improvements rallied those and making growth long

margins the done growth think on with there. we’re trajectory think and of So comfortable we’ve job so we’re a managing expanding both and I great I that far revenue very

also continue obviously we’ve of work see. to I where more work. trends transformation and business to the that But been cost if similar a higher seeing and those to work seen we’ve transformative has stable. the to think is is over years pricing certainly optimize environments Very been work the some you’re that of certainly margin in and redirect terms of there value or seeing digital big to priced higher clients last very pricing, and are as the shift to expect usual, few looking dollars. of is That what is is the continue some legacy dollars part


Please is Company. question from & from question. coming Needham next Tandon Our your Mayank with proceed

Mayank Tandon

With best can implications pressure talent the at work employee then the you’re the your wage challenges based type terms you type right for digital, and comment shift the work. talent of attrition the for as the in ongoing shift and on you more on and facing talent digital hiring of

Francisco D'Souza

past shortages actually associates have you not about two but digital big training isn’t year we year are the think Digital workforce. retrained about technology skillsets, little do you’re then why heavily skillsets, effort. touch a when the talk than have do year ongoing you you Mayank, contractions, Franc and people whenever part a transitions of higher in sometimes will and making we’ve predominant pockets last had that. skills. efforts. because key to skills phenomenon variety point, when a whenever retraining so There contractions we very generations that you ongoing on of I we of different reason these lots that is sort we’ve our training of workforce – competitors you of continue retraining, in of invested attractive invest have in a do very that’s take That’s That’s digital rather with one in new thinking technology you its I’ll skills. Look to it we have invested main the different attrition, of Last in important of seen somewhat continue invest also heavily in to past the the the number we’ll say employee XXX,XXX of that an that’s skills. that. a have for or becomes this

that the we’re of we continue say the to are that announced force continue the skill one address and the a that the entire the the in-house That of knowledge systemic today and try and world. use US is to the can ahead that, to more US problem for of engine new the We perhaps workforce this US we of stay is the one train that is of it in though work that shortage create feel we largest training a use probably that and and of operations that I’d the in externalize We – fact some talent for strong. also part of formation we we training industry. to IT for it sources to the that that is broader probably take to Cognizant comfortable Foundation efforts traditional training the ourselves on and believe very reason basis. given can we Cognizant outside that a within real have and


from is today Fargo. Edward coming question next from Wells Caso Our

Your live. line is now

Edward Caso

the and of on at? systems, larger what rising, they get is that are I do traditional transformative competitor. some of And as are they rising digital size more they back pace engagements, of the bringing traditional was curious

as to positioning your evolves? world digital the relative given your with market us help So

Francisco D'Souza

strongly new this its firms heavy Ed been the been that phase about, seen digital piloting over after putting talked or assets, the an the digital some are and they scale physical industries clients, model scaled projects of larger that look the investing think their digital layer over digital now I transform that it, experimenting weights digital we’ve digital talking our existing that about of existing the as of That’s We assets call Franc, and looking Certainly something their these of positions combine are last about we’ve in or for capabilities. or clients. quarters we’ve physical concept scale. top projects. leveraging XXXX technology large are that model, a initial at our model driving and business involve on in operating seeing, that

So with through there the for on. because end-to-end all right. have continue XXXX. and I capabilities, hard that work, And but this of comments, couple investments a we but the will very the effective client all And the been world that last so the they positioned we’ve that internal also a back executing think trend work years of stitching that And as decade in companies that execution. is It’s are client way way to strategy, way both at can well on started through digital, the I in prepared and very interface. and in building consulting stuff continues unfold, think making the said we when just unfold not going easy we few are to in we think my altogether the building that’s them not clients, the from capabilities

companies integrated long that think have end-to-end, of capabilities. few scale world very period we’ve do of that in do there very end-to-end. of foundational to strong time capabilities And the So for range to large programs are digital client over kind a we build really


Atkins coming from Our SunTrust. next question from is Frank

is line live. now Your

Frank Atkins

seeing difference or result forward? Wanted of as going tax M&A at changes you’ve tax all if philosophy a ask the to changes, if client any impact in your behavior the

Francisco D'Souza

if there’s that take me anything Let Raj and I’ll ask add. to

of client behavior think if to right but don’t now if to maybe result think Frank tell have tax real been a as to I I’ll change just early to an our quarter tax anything, philosophy result the next US too of a reform, we you give its tell. M&A see surely as it’s fundamental there update reform. I changes there’s

that. assessing We’re

access I may geography was the where that change remain tax time. for of will M&A, As think to the reform allow you That been. of some largely us overseas it’s but will know period cash philosophy


from next is Ramnani coming Arvind KeyBanc. Our from question

live. Your line is now

Arvind Ramnani

in kind to a really of wondered I to dig topic.

it couple for touched companies. demand of if this you technology age is You’ve changed, How very Specially client with of you changing, consulting your the and a can positioned? the expectations have differentiator richer upon made and comparative on demand harder strategy two years, to can comment see M&A new you’re how it over environment enriching for has becoming or also if and better you and comment Cognizant next and priorities times, as I’m technology manage this environment of how three the your also traditional looking you on a experience, or enter options business? also to with is feel set do compute

Francisco D'Souza

Arvind becoming I in trend right, to let here intensive. while, more think is my me set mind this the in technology then I’ll that stage and is general for Raj I’ve Look, think macro ask I the a comment. said the world

are So technology technology intensive, result. more are becoming more are intensive, becoming intensive becoming businesses technology as societies a governments more

more we’re our using We’re business lives, technology technology more in personal world. in the using

they demand our results. those access and able to skill, backdrop be access need that, governance which all access government that to to scale management actually so So or that as whether need delivers to the clients technology they are technology intensive environment, businesses world capabilities, of our integrate it become the more develop, that need for program is deploy, to large sets

Raj macro bit the specifics. about comment more the that’s little and So then I’ll a let

Raj Mehta

and And of we’re that’s kind as Arvind make it’s and there of are for – our all the that. we governance that well level it. only the it at to at the I are experience, seeing right. behind earlier, make level, clients look companies And end, well really of you many think think can bit little positioned the the companies, impact when the handful front user able provide as and and a that changes companies operating not is a for technology. being Franc that the touched just the about I about on digital execution business When

As scale, these those. projects become larger continues to in Cognizant benefit from

Francisco D'Souza

I question. one for think have more time we Operator


Certainly today from is Loop Vafi Capital. coming our from question final Joseph

Your line is live. now

Joseph Vafi

out you Franc, year, one where continuing that seems points to placing question growth maybe to relative And XX on you’re year, way giants. technologies the relative it to especially comments of bets you this your becoming May early that on non-digital are that your you’re more outlined legacy be the they growth digital side could the ask deploy. for if the seeing like to digital versus parse of growth about versus companies X more older digital and some

Francisco D'Souza

think that are optimize to think macro vary our industry statement it’s I to industry. in to and macros as a by bit a But little going digital legacy a growth. clients invest I going as continue

run them clients and us. good much business really know I’ll said legacy systems clients legacy is systems, how for operations. optimizing having we we point very our it’s many Now still that, up optimize backbone to solid And know running. this know the to I in think and important that We keep them, to cases still a and how make legacy of these how are the

important they because are So top legacy. away going are not build and gets of they very digital on

our I legacy, talk fact, sometimes are heritage, right. clients’ about systems actually – legacy say that we these In but

they backbone. have important so to are that really And

cost able of that we lot be we’ll added a and business, run on to you to have legacy more there, traditional we’ll efficiently, So so your invest to there’s just to relevant in value that, lower environment, in we of and top to very effectively, to so relevant. can continue remain continue to invest look, and go to clients unit in being help stay say, continue existing digital forth. On to and more

so doing that. are And we

Our ’XX. almost last digital in grew average XX%, company the year revenue Xx almost

those is make I to that’s but continue confidence at an underway investments, process, I this say process you can point. well with that we’ll ongoing think to that So

good differentiation, in us We competitive We’ve look the serve. very got our as clients digital. we players industries credible very at across are that

those that think feel two and thank play in to we’re trends look Thank of I I forward the to joining for continue out a our about we’ll And to us are would questions. how will I wrap So, positioned. pretty call. deliver again that your with today everybody good say with XXXX I strong speaking we in you want ability confident you. to us XXXX all and quarter. next for to and up


Thank you. teleconference. does today’s That conclude

for disconnect have We may this your time you day. You your and wonderful participation. at a line thank