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CTSH Cognizant Technology Solutions

Participants
Tyler Scott Senior Director of Investor Relations
Brian Humphries Chief Executive Officer
Jan Siegmund Chief Financial Officer
Lisa Ellis MoffettNathanson
Ashwin Shirvaikar Citibank
Bryan Bergin Cowen
Rod Bourgeois DeepDive Equity Research
Bradley Clark BMO Capital Markets
Tien-Tsin Huang JPMorgan
James Faucette Morgan Stanley
Call transcript
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Operator

Ladies and gentlemen, welcome to the Cognizant Technology Solutions Second Quarter 2021 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you. to conference like to now would turn over this Mr. I Relations. Vice President Scott, of Tyler Investor Please ahead, go sir.

begin. may You

Tyler Scott

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

have not, Executive we Officer; Siegmund, Financial today's you and The have our cognizant.com. Brian Officer. are Jan copies If call on are available website, speakers on Chief Humphries, Chief

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

the today, measures SEC. to we other non-GAAP be and company's non-GAAP GAAP release found call useful call provide the you financial go certain reference the that turn that, to measures for With appropriate, believe corresponding Humphries. ahead, our our over Reconciliations to financial information Brian. will measures, during investors. in of can Please earnings we Brian Additionally, the I'd with filings like where

Brian Humphries

in Tyler. in to the a backdrop Against Thank recent upside afternoon, to executed significant the deliver we challenging market humanitarian guidance. labor Good you, second everybody. quarter, us crisis India, well and allowing revenue our

the no world of India. to teams our to XX% our the service growth meeting with the major quarter our clients. or Thanks in XX% their year-over-year to Second wave from across constant client of represented the in I'm pandemic of of $X.X disruption all to delivery to revenue currency. grateful unflagging associates second promises billion professionalism consistently for dedication

trailing commercial XX% Qualified in is the growth drive associates which dependents. announced is and the XXX,XXX To I'm up with bookings rates to to up, against second accelerated strength over vaccines pleased key us continued India. Cognizant book-to-bill across significantly to operations date, Bookings XX-month or also execute has our vaccination and metrics. year-over-year for their We previously well basis. in Operation administered we've re-endorsed year-over-year of the XX cities where or win the quarter, continue CX, our our includes in Digital XX% growth a to pipeline quarter. revenue are our positioning year-to-date, ratio accelerated on X.X now momentum. and families

quarter We've excellent increases posted Within successive segments. growth energy levels. to to retail Moving and past sequential over strong Products in industry year-over-year some double-digit Xth the Resources in CAGR and Technology and continue and Communications, Technology, We of hospitality home optimistic consumer and our years and close growth currency travel X Healthcare. prepandemic on and industry logistics, now posted largest to we prospects. their our Communications, Media utilities. achieved post constant double-digit now are and remain Resources Meanwhile, growth This Media and and a clients. and in both Products goods revenue to manufacturing, of revenue is

businesses. I'm strong revenue sciences growth us provider will sustained year. sciences, later which with the U.S. with delighted both in a threshold year-over-year had this the business annualized payer billion life life Healthcare Our cross our and in $X quarter momentum and to double-digit allow

companies, well to strengthen biopharma us our with into we medical and positioning expand are existing and delivery As relationship device logos. client our excellence strong references new

merger Viatris, legacy integration X. resulting readiness a and from the the Mylan division with support formed partnered of we newly for of their to Pfizer, Upjohn, example, day For company

on post-merger integration collaboration We services. continuing are our now

data owned Integration, and manufacturing our company global smart to digital a continue Ireland-based our will in enhance life business. offerings industrial and we sciences the build invest TQS a to support agreed We needs week, that to Last intelligence clients' privately announced will from patient acquire care Technologies Zenith month, improve trials. enable to we global health to alliance develop organizations strategic end-to-end and upon of our clinical will solutions leader successful healthcare health acquisition And that with accelerate XXXX. Philips technology this earlier

Over U.S. and fruit. efforts to These on businesses. the the payer years, focused have started we reinvigorating provider significant past effort bear X

partnerships second product payer the quarter, is During clients market. provider to in strategic business. new highly expanded we Healthcare logos our added The with existing large the TriZetto and business our

spent the Following XXXX post weakness client last map product over X the feedback and soliciting years. some we road acquisition, considerable the refreshing energy

Annual in business. product of growth and We are year. XXXX, doubled now following business half TriZetto XXXX double-digit the in on in growing XXXX, the are momentum track over the seeing in growth double first in again revenue the rates to

executive In to in the year-over-year now Turning our the our have an of over industry the businesses in currency. engagement year-over-year Both and business X% outcomes on now and relationships selling banking, XX Financial Financial sequentially. grew which bringing client the the and we most business, services client-facing seasoned sharpened potential of Services, constant financial half Services about which collaboration past is on partner focus talent with We've months. and banking highest insurance with grew refreshed in ecosystem. delivering emphasis teams,

While strategy, have ongoing we banking erosion global large hindered in are banks, be and results in continue making sustained progress revenue momentum regional banks. by in our seen to client engagement

of grow year repositioning expect to we while Services such, full modestly, business Financial the the As continues. revenues

we've reposition DBO be which us to be of better, Healthcare, flexible of years we demand and to as I their who growth on, business business moderation our turned which more I'm third nonstrategic as been macro that business, commercial Hopkins leading double-digit elements focuses in organization will like-for-like. business. like and platform-based the Hopkins and segments expect digital digital completed content quarter, the cloud-based consulting and and revenue compares coming in business. A the successfully scalable with business platforms This of strategic impacted Year-to-date digital platform operations, we BPaaS a is the analytics be enable segment. by the acknowledge John natives, of would growth moderation made the business And our revised operations. that business and growth. as sustain and had exit the HealthCare to on Medicaid BPO our certain we’ve operations, we've Healthcare now by exit us digital revenue we to to momentum meaningful ago, well the decision can contributor progress of and pleased core to a call operations to direction X We'll years to modern, robust, automation, to patient outcomes. in more legacy position client the process the transition lines BPO operations. leadership trajectory Before example growth BPaaS recent discussing intelligent automation content made of environment, solution. modern like affordable John the this X business the deliver strong of decision in within to in a driven from providing our years, seen results required

Let's turn innovation. their to now particularly the robust modernize which and is macro invest as demand, in clients embrace legacy cloud environments,

We fueling AI phase continue automated become and of is processes that is believe on in digital and an experience. demand to transforming about agile, Hyper-personalization always ML. analytics, eye customer significant next the to with intelligent and

meaningfully our outlook in are scaling Given quarters. bullish the the to strong coming on our committed we headcounts over demand industry,

and imbalance a also has increased backdrop created skills demand macro this key in demand-supply meaningfully has industry However, attrition.

it we in QX, attrition As to go expected up last did. sequentially remarks, we and noted in quarter's

quarter basis XX% XX-month basis. a attrition XX% an Second or annualized on on voluntary trailing reached

attrition, host As metric reduce take services and of engagement backdrop, including to the corporates a job including reskilling actions series captures and entire associated we this of and across activities. to reminder, a IT BPO. our adjustments, rotations, attrition a company both promotions Against trainees and continue compensation

over in of we increased Fortunately, the in second half V-shaped months last XXXX. our meaningfully anticipated recovery the spike as recruiting the X the demand following attrition, capacity we

resources job helping of remarkable mitigate team elevated hiring, programs. has attrition and human Our comprehensive the done us impact onboarding skilling through a

hire to close fact, to In XXXX XXX,XXX laterals in and to we train approximately XXX,XXX expect associates. now

addition, than we acquisitions Over now to revenue XX,XXX for capabilities. shifting onboarding. to XXXX, accounts accelerate graduates In revenue. in graduates mix digital our mergers XXXX and we've more $X approximately billion we've for been onboard to India make XX% XXXX years, our invested to than new recent which in XX,XXX digital, offers and Since more in new our expect of methodically

categories spend a including of growth These investments do. company and given I diligence declined some IoT, it our higher reduced and has acquired the dilution, recent thing of addressing acquisitions to targeted against that changed margins cloud. right our integration margin costs impact moment profile businesses digital battlegrounds, and our in to to categories progress engineering QX to shifting years. the have non-digital the of our company has and by recent have digital While growth nonetheless wanted been Cognizant reducing Today, exposure

in what Managed Services to Europe. expected now the Our has in XXXX. IoT recently U.S. revenues almost of #X million Services the are both IoT ranked in scaled was XXXX, IoT Cognizant size the in twice and and rapidly Evaluation XXXX was for ISG's $XXX business exceed category it

made in Everest in business. Group's PEAK business of In digital a world. months Our been named past one the in the our tremendous Services X our June, making is cloud-related. businesses Engineering cloud largest billion Report. engineering annual Product headway was growing of now XX a XX%, it run We've at over rate, XXXX acquisitions digital have Software leader the $X.X also Matrix engineering for Cognizant

and for from Public a its supported Cloud Microsoft, groups: Infrastructure XXXX. Magic Provider now Player for Niche to you one most in in for Google, for Cognizant by cloud another Managed experts each As specialized Services We Challenger solution AWS to cloud-focused architects. recently may XXXX know, elevated in X and XXXX Providers, have Leader third in Gartner and business a Quadrant

X clouds Business global In our our and financial engaged changed acquisitions we years, system to the we've meaningfully example, one leading formation momentum, become and Contino a with recently the XXth ranking past Magnitude like the of been market of of Microsoft industry and services, partners. New areas health have Signature, to care Microsoft's integrator in thanks ongoing Microsoft's retail. Group, For

to commitment more is technical cloud and our on intensity XXX% growth by certifications. partnership in Microsoft Our year-over-year the demonstrated than focus

leading us Our full logos with in by to to but cross-sell not their and our us by execute engage has to transformation enabling success our new in to client us to base digital. more only positions encouraged existing expanding has take us and our of us made agendas. upsell competitive enables accounts portfolio clients get This more advantage

example, business compliance enhanced For a and us selected IT posture. lead of development to transformation body work related as of as Sciences well Gilead security an to

and recent life collaborative automation our by We framework, will this acquisitions our with knowledge science Technologies and legacy modernization utilize capabilities robust like work. Zenith proprietary augmented along industry support deep to solutions,

foremost its in to digital capabilities and advanced R&D semiconductor given mobility, Our and accelerate digital is solutions and smart and us nearly our cloud-agnostic capabilities. this In every the technology world's Qualcomm a turned companies, car-to-cloud automotive, across vehicle to of aim OEM connected solution. to platform transformation platform vehicle reliable connectivity vehicular its The onboard further aim company's Technologies, another of one engineering applications, connect management the integrated connected example, operations to enhance and build is infrastructure. cloud manage work

to to experience, event is parks XXXX connect commerce clients attendance increasing example than In years, taking with to digital experience A of this closing, more itself partnering into Olympic to the direct-to-consumer theme able Cognizant experiences for been role programs importance strategies, shape. reimagine Games. business between we're and great dots our exceptional I experiences portfolio, platforms CEO high-value personalized see now now results. drive transform in building and business to to data, that the their With struggle new NBC creating the how Summer X their of their supporting interactions customer driving sometimes functions. now marquee the Lastly, I've orchestrate underlying software, and a to who extended is we're and

helps is Our perceive than the This partners stronger outcomes. deliver way changed time any our and differentiated clients in business us solution portfolio has and history. at us

are We our and the it. on prospects bullish industry within

industry's digital and the in in We trends, markets are to across are our details on you, I'll industry international your the over an to to the in accelerating, opportunity are selling we market the outlook markets. recruitment as years, the one and quarter and as expect us from financial coming positioned But a confidence the in Jan, factor that, the that, have programs elevated shortage, our before targeted job of take offset stemming With our to which remain provide who the well With attrition we actions capitalize enormous well transformation to call headwinds will hottest in cover outlook turn our quarters, we Jan. of margin many for year. questions. and talent over

Jan Siegmund

everyone. and good Brian, you, Thank afternoon,

growth end representing and driven billion, approximately points] $X.X which digital, months our was guidance acquisitions total was of revenue by compare attack for of revenue QX [XXX growth easier approximately the early represented continued by grew $XXX growth QX XX% above XXXX. of of XXXX, constant includes high basis ransomware to Our revenues of in from benefited in demand our also range, Revenue where April the currency. revenues. million or in the the XX% XX% Year-over-year recent from an and pandemic our were and impacted XX%

segment where X%, on provided in results, currency. expectations. year-over-year Services revenue increased Moving our growth to in will all rates constant line approximately be with Financial

by performance to the Revenue the recovery reposition a this business strong Healthcare We still increased the we the driven our pipeline. integrated see strong demand was of year. sciences health improvement for solutions and continue make in software both payer we life XX%. organic, our remainder expect businesses. progress observed primarily provider in We as business. revenue in and continue and Again, and within approximately growth paced to through business our improving fundamentals care our Healthcare payer strong

As Resources double-digit increased revenue growth Brian with approximately Segment growth in XX%, from our points consecutive very XXX the we inorganic in approximately pleased quarter the by energy Products manufacturing, life mentioned, revenue. Xth utilities. logistics, business. included of sciences growth and and driven basis remain

within of our the experienced grew in which monitor the continue early consumer impacted with XX%, by was growth of portions certain half of hospitality, attributable we from of growth pleased mentioned, acquisitions. are exit a but Technology conveyors. Communications, approximately This by our As we prepandemic There offset most was the we portfolio. sectors to to the travel and by lapping Brian goods negative and Media revenue XXX growth growth core of pandemic, point are services signs very recent driven to business. closely. partially also part the in retail basis content Overall, our impact and of these stabilization

our our moving basis the approximately cost improved the from basis, margin were Now margin on initiatives from In and impact in year-over-year a ransomware both operating part impact QX XXXX XXXX. to QX, of attack the pandemic infrastructure. drive and operating including recently growth This acquisitions on margin investments, core year-over-year SG&A in benefit related was to completed savings reflecting adjusted IT to XX.X%. On GAAP margins. those revenue as security offset support and in and primarily negative by the organic our and adjusted intended as our modernization well on XXX points, and costs the

our costs, In from addition, elevated cost we higher costs. continued which wages attrition, anticipate higher includes lateral subcontractor pressure recruiting and

rate was in quarter adjusted was with $X.XX and our Diluted EPS XX.X% tax $X.XX. was diluted and expectations. GAAP adjusted our GAAP the XX.X%, Our tax was line rate in EPS

settlement flow $X.X a X we X with customers engagement sheet. were cash We of proposed quarter with Free XXXX Now that the debt. turning was to balance earnings. of investments the of ended the from announced the This our customer in cash billion quarter and $X.X fourth or the short-term exit included million. part payment in net billion $XXX QX of

net period. customers. both third XX Excluding XXX% Negotiations free been onetime payments Overall, resulted sequentially of this are were in expectations the year our day which by this QX. from The settlement, in the days pleased cash have in payment, relationship with to and increased improved client constructive. approximately no ongoing earnings DSO income. and quarter in impact with would our includes flow we with the a were commercial prior has XX made line of and with of X continued outcome the prior days

average $X.X our X end we During we repurchase approximately price the repurchased the share. per June, under $XX at of At remaining a of had weighted $XXX billion for million shares million quarter, authorization. share

our cash million also on for quarterly approximately and of We $XXX acquisitions spent million dividend. $XXX regular

guidance. to Turning

in XX% For constant to to we the or billion, expect QX, of to XX% of revenue range growth billion XX.X% $X.XX XX.X% year-over-year currency. in $X.XX representing

will Our assumes points. impact inorganic points of contribution and approximately currency basis XX favorable have basis guidance XXX a

X% revenue For prior growth growth the XX% X.X% X.X% to X% currency. to of billion, to X% now full in constant currency. This compares XX.X% or in to guidance XX.X% or year, we representing as expect of $XX.X to to our billion reported $XX.X constant

a revenue. impact outlook XXX basis have XXX assumes inorganic includes will contribution basis currency points favorable approximately Our from and points

assumes momentum over Resources, Our outlook of couple Products continued CMT in quarters. a across and expect to Healthcare, paced continue and next recovery while Services we the Financial

margins. to on Moving

midpoint be XX.X%, full our to year margin the prior expect of We guidance approximately adjusted XX.X% operating XX.X%. to of

areas. As costs I is increased leading attrition mentioned to certain earlier, in elevated

training. quarterly also continuing compensation, We promotions, including investments our in and retention to people, are fund

results We set quarters comprehensive remains our initiatives. our as expect high costs these addressing focused a several management through on will next keenly levels on the weigh for attrition of

driven We M&A continue part the growth impact our expect by from for the the year, to remainder of SG&A in activity.

the However, we to full our to EPS of to some $X adjusted initiatives previously. not areas to guidance This this our some mitigate $X.XX directly slowing year which pace $X.XX cost leads are related of pressure. strategic to in to growth $X.XX compared is

of outlook year to million $XX to full previously. assumes million Our $XX $XX income to million million interest $XX compared

a XXX average outstanding assumes which outlook previously tax prior rate to million outlook. and is approximately our unchanged XXX compared XX% of XX%, from to shares Our of million

income our balanced to and dividends free least cash continue at of returning will and strategy to committed through flow we flow Finally, repurchases. full net deployment remain expect for XX% share represent year. We free capital cash shareholders XXX% approximately our the of to

review last a X progress Before you an are fall opening our over on to to will and that update which the I provide and the years. in the planning know hold briefing of investor during we our an strategy wanted call for let I questions, Brian

an weeks. coming Please the save for call open eye provide the and in our will multiyear date With questions. the will We financial out also that, we keep your framework.

Operator

[Operator Instructions].

Our first Lisa comes with the of from Ellis question line MoffettNathanson.

Lisa Ellis

second sure XX the you expand second to related ability -- to while your in you'll half A follow-up you attrition related to ask sort them wondering just you confidence attrition I Just on the is given bit elaborate for environment, little you of still you there. and through example, of at are as Jan, that environment? closely. that's in satisfaction employee I'll high the health. can kind price, this just headcount one gives so demand question, I'm of like employee how -- Like a cetera? I'm battling then my able et what around are more color something faring margins the get And One, take maybe, is year know watch pretty just you're just dynamics. Cognizant? of

So confidence bring what's next in level attrition the your over to quarters? being of down able couple

Jan Siegmund

a Yes. Thank few around dynamics interest. somehow the second for dynamic we being guidance half. that It's Lisa, anticipated margin on impact the in our that and I actually you, situation, going questions quite complex have margin Lisa, of a

for average, to have we you're you're development we year-end. midpoint so second also our margin really, the little And XX.X% rightly are as of meet And a around aware, on concluded the that dynamic half, quarterly a guidance. of our towards expecting bit

due we the we're including to administer the quarter, implement end-of-season dynamics, be thing. than So merit fourth the quarter increase slightly higher in merit are to when the third towards and margins going typical thinking,

point of a elements have margin the few seen, I What to margin So of dynamic. want other the out that's we kind general all dynamic.

of traditional dynamic revenue than gross the healthy is seen, margin and second was shift we with the relative comes are, but digital that we transformation margin margin shifted And why part gross strategic in in accelerated higher quarter, our side, which actually our share, actually, of also margin margin course, a rationale which our fairly we we that business, in effect this on reported the mix, quarter. have improved in the a of business. of We engaging

controlled from half. from we're offsetting course, compensation in So shift we And some say, that the of likely, we more of pressure also end coming measures of anticipate and certain then, P&L. that bring flattish by outcome that second to SG&A the controlling growing the to or benefit into our have see I year. of continue components towards the would to the And growth been a to have that mix kind

we factors the execute following. question that's have to of our principal the P&L number we in to overall a I of it's of keenly over in that are engagement keep, the hand but to dynamic so course, And Brian. place, employee structure And order that

Brian Humphries

Look, Lisa. it's Hi, mind. top very Jan. Thanks, much of

or a you primarily imagine, which As to years. the attrition quarter It's in more also basis, or the organization And levels is the in voluntary the was we've tends seen really has how look more the a on seen can the of mid-levels attrition over we've phenomenon. in trailing at XX%. was but markets hottest junior of it last global India, XX-month one it, But team it's XX-plus industry seen the XX%. our

So with we're dealing it. all

the very had companies they're they in people of They're a as above As actually company as total were Last pleased we benchmarks. engagement same when actually when been our above, annual actually pandemic range a year, our in beyond. I'm see had because at scores company or it where we very pleased and with did, in to or We're results whatnot. average, the from happens the the secure had year, are as particularly of last organization, XXXX the many month, many pleased strong results. the cases, engagement survey. delivery really and much we've jobs industry

the vein, of very, I So good about from the feel very good perspective, in very same one don't feel attrition. about But it. course, I

is, top attrition at well And team a throughput terrific. pleased pace of continue we can something which at, management the lot in recruitment great revenue We hiring attrition, so but our elevated exceeded executed to quarter. and my guidance have our pleased it's of with. got of been we is time, has the hire that's very despite The we mind, been reduce over that hope focus. I'm yet and we're

as been on is X. and promotion, employee last the October here annual obvious increases weeks. course in engagement We've last effective in They're measures Well, fast-tracked the have initiatives and to the is things year: merit-based the few next to host look, cycles are increases, of we capability, education delivery dollars. shift rotations a in announced through for a played job success, promotion really last as doing We've training reskilling we then well across well. with ad attrition value behind resources. months few higher whole as to celebrating which we've enormous put programs That's host question. employees proposition, top retention effort what to billable continue company, quarterly employee select drive the of our our an Academy, out-of-cycle hoc announced So And big of reduce wins, for et a the of Cognizant cetera.

things to the I'm So I'm said, reality XX% while revenue quarter at of in bit pleased whatnot. things. with more also And gives comes the rotations growth I we're the right through look, organization we opportunities, and growth of path coming and back good terms doing and work growth done, career this is a little is confident but as quarter, that, promotions energy this executed be

better, help lot employees I'm today's So other top we'll keep doing. the story of line things all will sure feel we're a doing and

Operator

Shirvaikar question line the of Our with Citibank. from comes Ashwin next

Ashwin Shirvaikar

XQ, quarter, on what's you up been situation? in of face about Could feedback client Good more I to attrition? attrition. a for expect wanted you the little guys. And what follow bit also the XQ talk the

Brian Humphries

the unless can't thing and client-centric perspective, about I our my would you're associate-centric. our from be first you and associates clients, So think look,

yet demand into start how resources like setting prioritization, right quarter, important at mind in regarding do the out right in the as of most to we clients a in Communication about what out Entity of day XX% growing market. you of top Regrettably, much is it imagine, so of help on our time. potential that time our us in, availability full the the thinking expectations despite day and we on engage accounts now time part this, unable execution rigor expectations basis. the lines. how resource signal about resources is gets appropriate just we and the our as right think is strategic -- there this, we're we our facilitate a course, own And very can will and meet Ashwin, getting the we

through working I and employee engagement as as to best at to same the doing time best, maximize we're can whilst we to and our that said, minimize So attrition, onboarding. maximize

my we'll we'll year bring remarks, hires onboard said make XX,XXX freshers. I and on XX,XXX and XXX,XXX XXX,XXX lateral We'll offers people, about alone. this about train to in about freshers As we'll what quite Regardless will rate, we opportunity. of market those about. is because And after with get numbers our attrition to that us demand there go through enough for still that's we're excited

market I the year the that made get and portfolio to ever opportunity. is more we've compelling before, in after than think huge progress last

the feeling and we're it's about good So earnings pretty But that. a heard that through hot market, I think cycle. you've

with dealing all the same problem. we're So

Operator

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

Bryan Bergin

X upfront here. ask just I'll

growing force? and of So building and of well been pipeline force would sales year this you on clarify comment the will balance you versus And it are bookings you how can still trend continued So next? have commercial attrition, say much is called as distributed those you into to across the convert to relates see the resignations out, the then the over optimized and to contribution month-to-month? that converting of just bookings momentum how has your sales on declining

Brian Humphries

up very market and apex hot thereafter. Look, out inherent Well, as in we're net but It's quarter, attritions an a went hit I'll it what guidance, you thought remain then in through it's it's last a with very -- It we there, it's to happens end resignations. -- our went that we and and deal call. elevated -- to the can expecting, first. we'd of difficult see coming actually, we'll the at modestly, and quarter, imagine, at so look

levels a things to be attrition on quarterly not that. we XX-month of bookings, trailing these and really bookings With about or weekly It's a inner our guidance. now slightly that ratio bookings, months think very, important on geographic. assured, of of business across period, a terms the to at the expansion right terms book-to-bill well. in But feel pipeline very which we look is basis, it I mitigate board really X-year think honest. doing solid a have at of rounded the just And as and so we're in to We our across beyond I rest good versus have regards I very the We to basis. look, X.Xx, new at last mix. it of pretty look the board. at renewals. solid it it's good terms over XX in but We healthy. look And is And look

So good Candidly, don't the the this I market is opportunity. problem about I demand for industry. think feel

full exercises you the of in we XX-plus don't of have feel to only our a productivity. a COVID, I to our to XX, this it's real. make asset and a at back get practices in sure we those, for of installed teams we've if XX%, But of X and for our At is though the commercial base, underway time we board. client-facing moment on I out have practices. walk into cross-sell X lot to corridors Look, of now think the constraint think About we this think opportunity virtually great a team time. same portfolio. in able ramping. sales, regard us accounts, huge that gearing or ratios. they're now, the It's we from to I and got brought more our better a we And the if entire is we've and get With stage, true services. about be when it's sell supply got as vein,

the conducted before. a the enables aligned M&A years, have more of last strategy, that opportunity is as indeed, cross-sell X we acquisitions. about than those think to cross-sell cross-sell is business that which huge for digital us. our core And of XXX% case to in So course, And ever the

and course, installed So us. portfolio extended we terms which, with have this can what we're of cross-sell also new priority script the accordingly, of the both And through Qualcomm we example But do pretty a a in non-digital my excited about is in there, for where I after to try base, big opportunity as our of business logos. get And well. we're is leading cited that, we'll digital. example good

Operator

Our Rod next the comes Research. of from question Bourgeois DeepDive with Equity line

Rod Bourgeois

when I'd would your mix over you plan position a inorganic your the next substantially be help remaining over the really mix are that color to shift so, love pipeline forward, and so you to any Brian, the increase or growth year Hey, consider dimension in year? helpful. next your digital going potential further

Brian Humphries

Rob. Hey, Yes.

at the So to the of biggest company for year. as much XX% joined And very part our our and I the XXXX very of than digital was one XX%, was We success has it's parcel been had priorities non-digital It of It's what we're end you mix. business, setting less well or well, a certainly out accelerate very when actually play. into declined and which comes to of quarter, today. XXXX as growth Candidly, good mix in our XX% XXXX. denominator achieve. numerator our know driving in this

digital first this business will But quarter. exposed that becoming be has for digital XX%, like candidly, a, overall, So get of this we to vast that start of we the That's in in to we our accounts have the of half exactly year first helps I'd the with it grow. that to non-digital think the bookings higher the of of growth et added be the base installed growth it versus line part our the the share to intimacy us what bigger leader, portion enables the the and our categories; year, us half C-suite continue as majority increases the broader accounts, CTO organization year, will in and into of beyond the overall business slowed a last latter but sell would the into further, ramping CMO digital. time. it to term closer important b, because: of up Of we'll over us to cetera. mix service of this

or continue, that see client company not Rod, well. nice very for we'll for revenue actually it's mix margin is shift optimistic pretty there. as to So That also a as just will I'm good rate that intimacy, and our continue a good to digital ramp

the though we things. So we're feel as right doing

strategy a installed cross-sell new and this, it get become challenger behind upsell actually arena. M&A really the and logos Our after us and to XXX% in base get our position actually a in is and digital to puts

Jan Siegmund

client a the our revenue assumptions. a growth the organic very is our robust our comment dynamic very organic meeting carefully kind one organic generating seen on that portfolio base, into business cross-sell I but as is have we within most course, that of and from that growth M&A of, in case if cases, digital Rod, add monitor the growth, also, itself, we of

shift and to the not faster acquired the trajectory. only also the adding average very growth in revenues portfolio pleased that portfolio, actually, M&A, growing we're incremental of it's its accelerating than is is only but that not the So

Brian Humphries

grown win to the explicitly digital the our of meant And has non-digital I rates actually, asked at multiples are the win rates our Look, Rod, And in than non-digital. pipeline. higher -- digital pipeline around pipeline. in you

of lot a good there's So leading indicators.

Rod Bourgeois

able that of the was And your an into follow-up looking existing Great. muscle develop. to read a Jan, my in acquisitions. you mind. that's to for newly on your cross-sell And to offerings tends to kind related update being My accounts, take the time progress acquired

just us journey? acquired on some some Are you that into there these maybe left accounts still on that that where well with cross-selling juice So journey? existing the have? newly into you in are thinking Or capabilities is you give

Jan Siegmund

acquisition. to to and acquisitions really solutions closed already product And cross-selling to made force the about I even clients. our would say in there's to capabilities become benefits focus think of plenty sales our prior excitement We we bring of the mid-parts for our so close, into acquired really good are benefits fully which grow, will so we that management will focused generating, what many integrate keenly fold optimistic pipeline reap learning other M&A to continue easier, that digital portfolio they is really I'm the organic out the the of companies I'm the on. acquired to early still we as regarding to now of of of examples we're growth happen outcomes have where for in good We started the the this haven't the journey. will that Cognizant, these

Operator

next from with Keith Bachman Capital comes BMO the Our of question line Markets.

Bradley Clark

or Keith. wage secondly, I future margin the throughout given employees. XX pace planned Clark to is there on on size of then employee ask This that the how and of you the way to the And ongoing your the like XX impact Is the view M&A would if strategy of remainder months? increases to either on forward? quantify pressure past any compared M&A year, views for was to Brad going for do are sustainable? market What

Brian Humphries

Jan?

Jan Siegmund

our don't your so can't compensation We externally, the the Yes, elements really moves reflecting you help with market question. disclose of for is I thank It you that. clearly dynamics.

Cognizant our very We to assessment the and reflect actually moves ability an marketplace. into obviously, of And the are in and been in compensation, reflect in the employer recruiter compensation great. The publications is that. We've data with on about are orienting a really us. as employer pleased Cognizant market competitive keeping -- really our family choice, for India and attract of of market ranked a associates particularly, critical we variety

it and countries. feather on wage based country-specific through market-oriented will those So in developments

dilution compensation we M&A used year, for to talked for the of just good think, about to not for at the to we a end dedicates of position, for strategy. our last program, our about -- XX% And about, which flow capital us allocation I but and cash XX% framework framework M&A our the about really equity of this dividends. XX% the execute to On company, framework a use as offset a reminder,

within execution M&A going So on framework program anticipating to capital in remain that strategic of and objectives forward, battlegrounds. allocation focused on strategy. range digital spend our the our that I'm our the of We support to focus

year, is with transactions, the focus to globalization beginning on keen of of the have and to help executing the Cognizant. You may acquisitions in in describe there that hard also we a have, the of and the using strategy seen this some it's few trend, but

And so on in the in the of in year, leadership with sector. in really Internet leading very the home ESG happy Mobility We which I acquisition Australian with Servian country, have my acquired provider marketplace. keen a automotive IoT, fatherland, an seen about, positions Things, you earlier was the the

still diversion us. So for more is there needed geographic

of on the adapt to groups of needs industry so And our as our and we'll the strategy. progress we make the positioning practices

is our acquisition-driven this for so but strategy yes, a And anticipate execution. long to answer continue you, we

Operator

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

Tien-Tsin Huang

I'll and mix TriZetto. up ask about it

change that. that? extended growth, apply are this think surprised be your well? as driving was areas heard you is curious, that you by of What it I And or on double I'm digits. repositioning can a I doing little I better to differently? could elaborate kind other

Brian Humphries

do I end execute Healthcare, be business that something So think the honest, XXXX. inherited of To acquisition the the through our the really crown think didn't in And in after get optimally. Tien-Tsin, product tried on. I years, TriZetto we at is very we we've of a few jewel integration that better job that that we because opportunity last I it's a to felt could

understand, the to in their meantime, the customer some with had user line sure in competitors I us we the space. didn't given frankly, make needs so we interface something road clients map was that to we that, And and think starting had in got we right purpose. this feedback emerged had, tried the of that and to with the in the And that to solicit eyes beat off had code that was heritage had that fit for appropriate our

is some through again X enables I XXXX itself. margins. course, of double rich and And year-over-year in in we've the of we're track this a now, the stickiness But that rate product doubled, had we're in pull thereafter. suite getting It's business software-centric, growth growth fantastic our to a services a Fortunately, higher said, to logos. of XXXX us great business. as growth row double-digit versus on quarters in And and

time. it a job. done we're XXX% to has business, highly that as team you'll us us, the in that and So and over scale strategic for I view fantastic see committed

Tien-Tsin Huang

training what's supply on type demand on out so with to side maybe grab the I'll quickly, ask purely to lateral cyclical of indicative out that's to of given just there. done needs there necessity, just of we just to Okay. work hires. more hear. just university the versus it is just more the to structural work timing trying encouraging be needs that be meet you of infer need and I'm understand what of done? No, don't hiring side, hires? you the about or you said Or and work, digital to some it's the lateral mind, more go if Can

Brian Humphries

If it's the a is have getting to things. after X doing think see. also we that the you really market about we lateral view that and attrition One addressing the hires, with potential

think across if the And engineers you think is it's also But in to engineering, about ML. think attrition greatest, levels leading hot full digital mid-junior hot pyramid, the so skills. SaaS data, particularly where you and stack AI or And of players, about about in think go India. hyperscalers, back at about skills, it's

and situation And you've an trying so also that's a area where as going our get we can, a in and where to we're find yourself trying them whilst demand-supply imbalance, and well promote lateral got in as to well. train you internal skills as also after employees as quickly

market, the anticipate, I is race given in resilient how a attrition talent the hot sense foreseeable future, elevated across I market. industry. for main the we'll anticipate for feature bullish I my it's And have am red So a the a in services, and

Operator

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

Unidentified Analyst

Mike Jamie. is on for This

So my talk little there? quarter guys your on you with this updated first XG? perspective a And so growing offered about tailwinds well, XG can CMT bit one, has any

Brian Humphries

very to huge major XG other for still industry BXBXB probably, don't both proliferation and days, vertical, the driver of CMT the regards will the latency and talk outlays. to driving. more given BXC. handset industry, our been it need of cases early autonomous CapEx around BXB telco about is date. business terms albeit rather the BXC that not -- is perspective, for my security be from to intrigued its many point We're considerations, a or it a than has With asset inflection people I use in in Look, very justify will think

Mobility the a got the and We've been factor vertical, Germany. in we has massive Jan As acquired indeed to a on emphasis date. ESG on XG automotive not vertical CMT big said, but

stage. XG unlocked but of premature be at cellular will IoT think and it's benefits this the technologies, I by different

Operator

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

James Faucette

the the particularly wanted I some to I we're earlier. you that pricing how really trying pass Great. And to how you on to But mean bit commentary able some responding that? touched are a on trended ask guess in clients of are to And pure what wage quarter, stability? given at is pricing around on pricing. the I of get costs? has

Jan Siegmund

Yes.

pricing in in to in our this We clients in those traditional We the that have expanding time. digital have and to are pricing about quarters, And pressure in changed at past margins my we tight where more I haven't additional benefit, we that observed for the see segment. point continued an also get seen seeking talking the services. more services cost by been we have traditional of pricing pressure ability have type services comments been and good trends allowing that implied pricing gross business, our labor us on market,

James Faucette

quickly. color take believers battlegrounds. that any to acquisition big could under-indexed digital demand there relative digital you're where I around advantage But battlegrounds on early and just you that are the you're currently a in digital And appreciate seeing of? We're the your better strategy,

Brian Humphries

user included areas for applications digital and it about of beyond whole around well for analytics, in I holistically you digital that other and X grow digital this more I'll about which that think experience that, that. those the the that experience engineering, around optimistic core and Look, and so-called IoT cloud, like focused very goes Brian, to think digital when as us, were continue the workflows. becomes digital if address us, James, rather. notably you sale, things battlegrounds arena Hey, is the a I'm on battlegrounds, -- rapidly we not around joined, are data The part

it's engineering So Digital we broad-based. rapidly. prioritize. something It's is growing

the As in it's our growth potential biggest of units said, I one years ahead.

about companies then scaling, just years, acquisition broadly, company of smaller margin meaningfully mix. arena, Jan Roof. a one scaled XXXX, demand our scale, in we're as And complemented it's in our the still engineering the more rate there's we're our with has I of of and we Something about our this that good I it's very Magenic and our portion good the now years, more lot largest and but feel a We've of the capabilities recent the X world. average in Softvision just CAGR. implied, digital for in Tin last potential as higher and feel because good just in more well. The potential has there,

ahead speed full the digital we're opportunity. after So

Tyler Scott

All right.

everyone speaking I look joining, forward think wrap and next you, with for Thank with up. quarter. it we'll that, to everybody,

Brian Humphries

Thank you.

Operator

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

day. at your Enjoy disconnect your you this may for participation. lines time. of your the rest Thank You