Q2 2024 Cognizant Technology Solutions Corp Earnings Call

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Operator: Ladies and gentlemen, welcome to the Cognizant Technology Solutions second quarter 2024 earnings. All lines have been placed on mute to prevent any background noise.

Operator: Ladies and gentlemen, welcome to the Cognizant Technology Solutions, 2nd quarter of 2024 earnings conference call. All lines have been placed on new to prevent any background noise.

Speaker Change: Ladies and gentlemen, welcome to the Cognizant Technology Solutions second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise.

Operator: After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question at that time, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question key. You may press star 2 if you would like to remove your question from the key. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Thank you.

Operator: After the speakers, there will be a question and answer session. If you would like to ask a question at that time, please press star 1 on your telephone. A confirmation tone will indicate your line is in the queue. You may press star 2 if you would like to remove your...

Speaker Change: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Operator: It may be necessary to pick up your handset before. Thank you. I would now like to turn the conference over to Mr. Tyler Scott, Vice President and Chief Financial Officer. Thank you, operator, and good afternoon, everyone. By now, you should have received a copy of the earnings release and the investor supplement for the company's second quarter 2024 results. If you have not, copies are available on our website, cognizant.com.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Tyler Scott: I would now like to turn the conference over to Mr. Tyler Scott, Vice President and Vestive Relations. Please go ahead, sir.

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

Tyler Scott: Thank you, operator, and good afternoon, everyone. By now, you should have received a copy of the earnings release and the investor supplement for the company's 2nd quarter of 2024 results. If you have not, copies are available on our website Cognizant.com.

Tyler J. Scott: Thank you, operator, and good afternoon, everyone. By now, you should have received a copy of the earnings release and the investor supplement for the company's second quarter 2024 results. If you have not, copies are available on our website, cognizant.com.

Tyler Scott: The speakers we have on today's call are Ravi Kumar, Chief Executive Officer, and Jatin Dalal, Chief Financial Officer. Before we begin, I would like to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements. These statements are subject to the risks and uncertainties as described in the company's earnings release and other filings with the SEC. Additionally, during our call today, we will provide certain non-GAAP financial measures that we believe provide useful information for our investors. Reconciliation of non-GAAP financial measures, where appropriate, to the corresponding GAAP measures can be found in the company's earnings release and other filings with the SEC.

Tyler J. Scott: The speakers we have on today's call are Ravi Kumar, Chief Executive Officer, and Jatin Dalal, Chief Financial Officer. Before we begin, I would like to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements. These statements are subject to the risks and uncertainties as described in the company's earnings release and other filings with the SEC. Additionally, during our call today, we will provide certain non-GAAP financial measures that we believe provide useful information for our investors.

Speaker Change: The speakers we have on today's call are Ravi Kumar, Chief Executive Officer, and Jatin Dalal, Chief Financial Officer.

Speaker Change: Before we begin, I would like to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements.

Speaker Change: These statements are subject to the risk and uncertainties as described in the company's earnings release and other filings with the SEC.

Speaker Change: Additionally, during our call today, we will provide certain non-GAAP financial measures that we believe provide useful information for our investors.

Tyler J. Scott: Reconciliations of non-GAAP financial measures, where appropriate, to the corresponding GAAP measures can be found in the company's earnings release and other filings with the SEC. With that, I'd now like to turn the call over to Ravi. Please go ahead.

Speaker Change: Reconciliations of non-GAAP financial measures, where appropriate to the corresponding GAAP measures, can be found in the company's earnings release and other filings with the SEC.

Tyler Scott: With that, I now like to turn the call over to Ravi. Please go ahead.

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

Ravi Kumar: Thank you, Tyler, and good afternoon, everyone. Thank you for joining us 2nd quarter of 2024 earnings call. I'm pleased with a strong execution and results in what remains a challenging market.

Ravi Kumar Singisetti: Thank you, Tyler, and good afternoon, everyone. Thank you for joining us for our second quarter 2024 earnings call. I'm pleased with our strong execution and results in what remains a challenging market. We delivered revenue above the high end of our guidance range and expanded our adjusted operating margin both quarter over quarter and year over year. sustained a large deal momentum by signing five deals each with a total contract value of $100 million or more and announced an agreement to acquire Belkan, which is expected to expand our ER&D capabilities while diversifying into the high-growth aerospace and defense sector.

Ravi Kumar Singisetti: Thank you, Tyler, and good afternoon, everyone.

Ravi Kumar Singisetti: Thank you for joining us second quarter 2024 earnings call.

Ravi Kumar Singisetti: I'm pleased with a strong execution and results in what remains a challenging market.

Ravi Kumar: We delivered revenue about the high end of a guidance range, expanded our adjusted operating margin both quarter over quarter and year over year, sustained our large deal momentum by signing 5 deals each with total contract value of $100 million or more, and announced an agreement to acquire Belkan, which is expected to expand our ERD capabilities while diversifying into the high growth aerospace and different sectors. Although the demand environment remains challenging and clients' discretionary spending behavior is unchanged from recent quarters, we believe these results demonstrate our rigorous execution against the strategic priorities we set forth last year.

Ravi Kumar Singisetti: We delivered revenue above the high end of our guidance range, expanded our adjusted operating margin both

Ravi Kumar Singisetti: quarter-over-quarter and year-over-year.

Ravi Kumar Singisetti: sustained a large deal momentum by signing five deals each with total contract value of

Ravi Kumar Singisetti: $100 million

Ravi Kumar Singisetti: more and announced an agreement to acquire Belcan which is expected to expand our ER&D capabilities while diversifying into the high growth aerospace and defense sectors.

Ravi Kumar Singisetti: Although the demand environment remains challenging and clients' discretionary spending behavior is unchanged from recent quarters, we believe these results demonstrate our rigorous execution against the strategic priorities we set forth last year. Q2 revenue was $4.85 billion, which was $30 million above the high end of a guidance range and grew 2.1% sequentially in constant current.

Ravi Kumar Singisetti: Although the demand environment remains challenging and clients' discretionary spending behavior is unchanged from recent quarters,

Ravi Kumar Singisetti: We believe these results demonstrate our rigorous execution against the strategic priorities we set forth last year.

Ravi Kumar: Q2 revenue was $4.85 billion, which was 30 million about the high end of a guidance range, and grew 2.1% sequentially in constant currency. This was the highest quarter of a quarter of growth since 2022, with strong execution of a next-gen program and overall cost discipline. We achieved an adjusted operating margin of 15.2%, an increase of 10 basis points sequentially and 100 basis points year over year. Our training 12 months, one entry attrition for tech services was 13.6% compared to nearly 20% in the prior year period. Second quarter of bookings grew 5% year over year, and on a trailing 12 months basis, bookings were 26.2 billion, representing a 1.4x book to bail.

Ravi Kumar Singisetti: Q2 revenue was $4.85 billion, which was $30 million above the high end of a guidance range.

Ravi Kumar Singisetti: This was the highest quarterly over quarterly growth since 2022. With strong execution of a next-gen program and overall cost discipline, we achieved an adjusted operating margin of 15.2%, an increase of 10 basis points sequentially and 100 basis points a year over the. Our trailing 12 months voluntary attrition for tech services was 13.6% compared to nearly 20% in the prior year period. Second quarter bookings grew 5% year-over-year, and on a trailing 12-month basis, bookings were $26.2 billion, representing a 1.4x book-to-bill. In addition to the five deals each with TCV of over $100 million, we signed two deals that were above $90 million each.

Ravi Kumar Singisetti: and grew 2.1% sequentially in constant currency.

Ravi Kumar Singisetti: This was the highest quarter-over-quarter growth since 2022.

Ravi Kumar Singisetti: With strong execution of a next-gen program and overall cost discipline, we achieved adjusted operating margin of 15.2%, an increase of 10 basis points sequentially and 100 basis points year-over-year.

Ravi Kumar Singisetti: Our trailing 12 months voluntary attrition for tech services was 13.6% compared to nearly 20% in the prior year period.

Ravi Kumar Singisetti: Second quarter bookings grew 5% year over year and on a trailing 12-month basis bookings were $26.2 billion representing a 1.4x book-to-bill.

Ravi Kumar: In addition to the five deals each with T-CVO over 100 million dollars, we signed two deals that were about 90 million each. In the first half of this year, we have now signed 13 deals each with T-CVO over 100 million dollars, well ahead of our 2023 pace, which included 17 deals of the size for the entire year. From a segment perspective, we are especially pleased with financial services, which grew 5% sequentially in constant currency, driven by growth in the Americas. Within financial services, our banking business posted a second consecutive quarter of sequential growth and returned to modest year-over-year growth in constant currency for the first time since Q2 of 2022.

Ravi Kumar Singisetti: In addition to the five deals each with TCV of over $100 million, we signed two deals that were above $90 million each.

Ravi Kumar Singisetti: In the first half of this year, we have now signed 13 deals each, with TCBO exceeding $100 million, well ahead of our 2023 pace, which included 17 deals of this size for the entire year. From a segment perspective, we are especially pleased with financial services, which grew 5% sequentially in constant currency driven by growth in the American economy. Within financial services, our banking business posted a second consecutive quarter of sequential growth and returned to modest, year-over-year growth in constant currency for the first time since Q2 of 2022.

Ravi Kumar Singisetti: In the first half of this year, we have now signed 13 deals each with TCB of over $100 million, well ahead of our 2023 pace, which included 17 deals of this size for the entire year.

Ravi Kumar Singisetti: From a segment perspective, we are especially pleased with financial services, which grew 5% sequentially in constant currency, driven by growth in the Americas.

Ravi Kumar Singisetti: Within financial services, our banking business posted a second consecutive quarter of sequential growth and returned to modest year-over-year growth in constant currency for the first time since Q2 of 2022.

Ravi Kumar: We are seeing demand being driven by client investments and hyper-personalization, infrastructure and platform modernization. Our insurance subsequent also grew sequentially in Q2, and one of the five 100 million dollar plus T-CV deals we signed this quarter was with a large American insurance provider. I believe these results reflect our actions to stabilize the BFSI business since last year. Over that period, we put new leadership in place and drove greater industry focus on this customer segments. We also aligned our go-to-market approach and launched industry-led service offerings in areas like real-time payment fraud detection, payments hub modernization, and digital banking.

Ravi Kumar Singisetti: We are seeing demand being driven by client investments in hyper-personalization, infrastructure, and platform modernization. Our insurance subsegment also grew sequentially in Q2, and one of the $500 million plus TCV deals we signed this quarter was with a large American insurance provider. I believe these results reflect our actions to stabilize the BFSI business since last quarter. During that period, we put new leadership in place and drove greater industry focus on this customer segment.

Ravi Kumar Singisetti: We are seeing demand being driven by client investments in hyper-personalization, infrastructure, and platform modernization.

Ravi Kumar Singisetti: Our insurance sub-segment also grew sequentially in Q2 and one of the 500 million dollar plus TCV deals we signed this quarter was with a large American insurance provider.

Ravi Kumar Singisetti: I believe these results reflect our actions to stabilize the BFSI business since last year.

Ravi Kumar Singisetti: Over that period, we put new leadership in place and drove greater industry focus on these customer segments.

Ravi Kumar Singisetti: We also aligned our go-to-market approach and launched industry-led service offerings in areas like real-time payment fraud detection, Payments, Hub Modernization, and Digital Banking. Health sciences grew by 3% sequentially in constant currency, and we see a number of positive secular trends. For example, payers and providers remain focused on reducing the cost of care.

Ravi Kumar Singisetti: We also aligned our go-to-market approach and launched industry-led service offerings in areas like real-time payment fraud detection.

Ravi Kumar: Health Sciences grew by 3% sequentially in constant currency, and we see a number of positive circular trends. For example, payers and providers remain focused on reducing the cost of care. We believe this is benefiting our TriZo platform where we are helping clients manage more than 500 billion dollars in complex claims and improve patient outcomes. TriZo's end-to-end capabilities are gaining traction as clients see the value of in our ability to provide both revenue cycle management and clearing house services. On the payer side, we are seeing demand being driven by data and cloud modernization as a clients seek to deliver a modern best-in-class consumer experience for the members.

Ravi Kumar Singisetti: Payments, Hub Modernization, and Digital Banking.

Ravi Kumar Singisetti: Health sciences grew by 3% sequentially in constant currency and we see a number of positive secular trends.

Ravi Kumar Singisetti: For example, payers and providers remain focused on reducing the cost of care. We believe this is benefiting our Trisedo platform, where we are helping clients manage more than $500 billion in complex claims and improve patient outcomes.

Ravi Kumar Singisetti: We believe this is benefiting our Trezedo platform, where we are helping clients manage more than $500 billion in complex claims and improve patient outcomes. TriZetto's end-to-end capabilities are gaining traction as clients see the value in our ability to provide both revenue cycle management and clearing house services. On the payer side, we're seeing demand driven by data and cloud modernization as our clients seek to deliver a modern, best-in-class consumer experience for their members.

Ravi Kumar Singisetti: TriZetto's end-to-end capabilities are gaining traction as clients see the value in our ability to provide both revenue cycle management and clearing house services.

Ravi Kumar Singisetti: On the payer side, we're seeing demand being driven by data and cloud modernization as our clients seek to deliver a modern, best-in-class consumer experience for their members.

Ravi Kumar: And in life sciences, clients have begun moving beyond cost optimization projects to ones that accelerate the GNII digital transformation in R&D and continue to drive enterprise modernization with SAP as Farana. By region, we are very pleased with the performance in America, where revenue grew 2.8% sequentially and returned to growth year over year. I am extremely proud of the progress the team has made, and I'm confident in our opportunities ahead. Looking back over the last 18 months, we believe our strategic investments and focus on improving our operational rigor has further strengthened the foundation on which we can drive sustainable revenue and earnings growth.

Ravi Kumar Singisetti: And in life sciences, clients have begun moving beyond cost optimization projects to ones that accelerate their Gen AI and digital transformation in R&D and continue to drive enterprise modernization with SAP S4ANA. By region, we are very pleased with the performance in America, where revenue grew 2.8% sequentially and returned to growth year over year. I am extremely proud of the progress the team has made, and I'm confident in our opportunities ahead.

Ravi Kumar Singisetti: And in life sciences, clients have begun moving beyond cost optimization projects to ones that accelerate their gen-AI and digital transformation in R&D and continue to drive enterprise modernization with SAP S4ANA.

Ravi Kumar Singisetti: By region, we are very pleased with the performance in America, where revenue grew 2.8% sequentially and returned to growth year over year.

Ravi Kumar Singisetti: I am extremely proud of the progress the team has made and I'm confident in our opportunities ahead.

Ravi Kumar Singisetti: Looking back over the last 18 months, we believe our strategic investments and focus on improving our operational rigor have further strengthened a foundation on which we can drive sustainable revenue and earnings growth. We invested in our leadership team and attracted new talent to the organization. We drove internal process improvements, particularly around large deals and our people.

Ravi Kumar Singisetti: Looking back over the last 18 months, we believe our strategic investments and focus on improving our operational rigor has further strengthened a foundation on which we can drive sustainable revenue and earnings growth.

Ravi Kumar: We invested in our leadership team and attracted new talent to the organization. We drove internal process improvements, particularly around large gains and our talent. and we focus sharply on strengthening our relevance with clients through investments in our innovation strategy and platform offerings. We believe these changes are starting to pay off and are reflected in our recent revenue performance and year-over-year operating margin expansion in the first half of this year. We have maintained our focus on becoming an employer of choice in our industry, and we are recognized by Newsweek as one of America's greatest places to work and greatest places for job starters.

Ravi Kumar Singisetti: We invested in our leadership team and attracted new talent to the organization.

Ravi Kumar Singisetti: We drove internal process improvements, particularly around large deals and our talent.

Ravi Kumar Singisetti: And we focus sharply on strengthening our relevance with clients through investments in our innovation strategy and platform. We believe these changes are starting to pay off and are reflected in our recent revenue performance and year-over-year operating margin expansion in the first half of this year. We have maintained our focus on becoming an employer of choice in our industry, and we are recognized by Newsweek as one of America's greatest places to work and the best place for job starters.

Ravi Kumar Singisetti: And we focus sharply on strengthening our relevance with clients through investments in our innovation strategy and platform offerings.

Ravi Kumar Singisetti: We believe these changes are starting to pay off and are reflected in our recent revenue performance and year-over-year operating margin expansion in the first half of this year.

Ravi Kumar Singisetti: We have maintained a focus on becoming an employer of choice in our industry and we are recognized by the Newsweek as one of America's greatest places to work and greatest places for job starters.

Ravi Kumar: We also continue to expand our footprint in smaller cities in India with the opening of a newest office in Indore as we remain committed to bringing offices closest to where our employees are. And I'm pleased with Blueboard, our grassroots innovation program, which has generated 210,000 ideas by our associates since its inception last year. We also hearing positive feedback from our customers through our project-level net promoter score, which I'm pleased to say has improved consistently since 2021 through the first half of 2024. This quarter marks our highest NPS to date.

Ravi Kumar Singisetti: We also continue to expand our footprint in smaller cities in India with the opening of our newest office in Indore, as we remain committed to bringing offices closest to where our employees are. And I'm pleased with Blue Bolt, a grassroots innovation program that has generated 210,000 ideas by our associates since its inception last year.

Ravi Kumar Singisetti: We also continue to expand our footprint in smaller cities in India with the opening of a newest office in Indore as we remain committed to bringing offices closest to where our employees are.

Ravi Kumar Singisetti: And I'm pleased with Blue Bolt, a grassroots innovation program which has generated 210,000 ideas by our associates since its inception last year.

Ravi Kumar Singisetti: We're also hearing positive feedback from our customers through our project-level Net Promoter Score, which I'm pleased to say has improved consistently since 2021 through the first half of 2024. This quarter marks our highest NPS to date. We have taken a number of actions to date to accelerate growth and drive operational improvements, and we look forward to continuing to update shareholders on our progress. To that end, we plan to provide an investor update in the first half of 2025 to discuss, among other things, our strategy, our differentiation in the market, our efforts to create long-term value for the shareholders, and others. A prime example of our investments in higher growth industries and expanding capabilities is our agreement to acquire Belkan, a leading global supplier of engineering, research, and development (or ER&D services.

Ravi Kumar Singisetti: We're also hearing positive feedback from our customers through our project level Net Promoter Score, which I'm pleased to say has improved consistently since 2021 through the first half of 2024. This quarter marks our highest NPS to date.

Ravi Kumar: We have taken a number of actions to date to accelerate growth and drive operational improvements, and we look forward to continuing to update shareholders on our progress.

Ravi Kumar Singisetti: We have taken a number of actions to date to accelerate growth and drive operational improvements, and we look forward to continuing to update shareholders on our progress.

Ravi Kumar: To that end, we plan to provide an investor update in the first half of 2025 to discuss, among other things, our strategy or differentiation in the market, our efforts to create long-term value for shareholders and other stakeholders.

Ravi Kumar Singisetti: To that end, we plan to provide an investor update in the first half of 2025 to discuss, among other things, our strategy, our differentiation of the market, our efforts to create long-term value for the shareholders and other stakeholders.

Ravi Kumar: A prime example of our investments in higher growth industries and expanding capabilities are agreements to acquire Belkan and leading global supplier of engineering research and development, or ER&D services. We have seen growing demand in ER&D services and estimated $190 billion market, whose high growth has been fueled by the convergence of digital technology and the physical world. Over the last three years, we have strengthened our ER&D capabilities, starting with our 2021 acquisition of ESG Mobility. A digital automotive ER&D provider for connected, autonomous, and electric vehicles, and at the start of my term last year, we acquired Mobica, which focuses on IoT embedded software engineering capabilities from the chip to the cloud.

Ravi Kumar Singisetti: A prime example of our investments in higher growth industries and expanding capabilities is our agreements to acquire Belkan, a leading global supplier of engineering, research and development or ER&D services.

Ravi Kumar Singisetti: We have seen growing demand for ER&T services, an estimated $190 billion market whose high growth has been fueled by the convergence of digital technology and the physical world. Over the last three years, we have strengthened our ER&T capabilities, starting with our 2021 acquisition of ESG Mobility, a digital automotive ER&T provider for connected autonomous and electric vehicles. And at the start of my term last year, we acquired Mobica, which focuses on IoT-embedded software engineering capabilities from the chip to the cloud.

Ravi Kumar Singisetti: We have seen growing demand in ER&T services, an estimated $190 billion market whose high growth has been fueled by the convergence of digital technology and the physical world.

Ravi Kumar Singisetti: Over the last three years, we have strengthened our ER&T capabilities, starting with our 2021 acquisition of ESG Mobility.

Ravi Kumar Singisetti: a digital automotive ER&T provider for connected autonomous and electric vehicles. And at the start of my term last year, we acquired Mobica, which focuses on IoT-embedded software engineering capabilities from the chip to the cloud.

Ravi Kumar: We expect the Belkan acquisition to provide an opportunity for us to expand our service offerings into growth vectors that help move the physical world of manufacturing aerospace and automotive into the age of digital data and AI.

Ravi Kumar Singisetti: We expect the Belcan acquisition to provide an opportunity for us to expand our service offerings into growth vectors that help move the physical world of manufacturing, aerospace, and automotive into the age of digital data and AI. Earlier this week, we introduced the next evolution of our experience practice area, called Cognizant Moment, which is a new integrated business within Cognizant that builds on our over 20 years of expertise and digital experience. Cognizant Movement will focus on next-generation experience services that are dynamic, data-driven, and AI-powered, harnessing the content generation and personalization power that generative AI brings, combined with human ingenuity, to help clients innovate, differentiate, and grow. The creative and programmatic service lifecycle is expected to go through significant transformation in the years ahead, and we see an opportunity to disrupt the status quo agency model as creative content becomes increasingly generated and orchestra Moving on to additional highlights from the quarter.

Ravi Kumar Singisetti: We expect the Belcan acquisition to provide an opportunity for us to expand our service offerings into growth vectors that help move the physical world of manufacturing aerospace and automotive into the age of digital data and AI.

Ravi Kumar: Earlier this week, we introduced the next evolution of our experience practice area called Cognizant Moment, which is a new integrated business within Cognizant that builds on our over 20 years of expertise and digital experience. Cognizant moment will focus on next generation experience services that are dynamic, data-led, and AI-powered, harnessing the content generation and personalization power that GDI brings, combined with human ingenuity to help clients innovate, differentiate, and grow. The creative and programmatic services life cycle is expected to go through significant transformation in the years ahead, and we see an opportunity to disrupt the status co agency model as creative content becomes increasingly generated and orchestrated by Jenny Island.

Ravi Kumar Singisetti: Earlier this week, we introduced the next evolution of our experience practice area called Cognizant Moment.

Ravi Kumar Singisetti: which is a new integrated business within Cognizant that builds on our over 20 years of expertise and digital experience.

Ravi Kumar Singisetti: Cognizant Movement will focus on next-generation experience services that are dynamic, data-led, and AI-powered, harnessing the content generation and personalization power that generative AI brings, combined with human ingenuity, to help clients innovate, differentiate, and grow.

Ravi Kumar Singisetti: The creative and programmatic services life cycle is expected to go through significant transformation in the years ahead, and we see an opportunity to disrupt the status quo agency model as creative content becomes increasingly generated and orchestrated by Gen AI-led models.

Ravi Kumar: models.

Ravi Kumar: Moving on to additional highlights from the quarter. We extended our relationship with Victory Capital to provide IT infrastructure and data analytics support. Over the next five years, we aim to provide this client with new service management capabilities, improved service productivity, opportunities for cost savings, and the ability for Victory Capital to cost-effectively scale in support of business growth. Additionally, we signed an agreement to provide engineering services to Gentham, the global market leader of innovative thermal management and pneumatic comfort technologies for the automotive industry. Under this agreement, we will expand our existing services to help develop a next generation of products aimed at elevating customer vehicle experiences.

Ravi Kumar Singisetti: Moving on to additional highlights from the quarter.

Ravi Kumar Singisetti: We extended our relationship with Victory Capital to provide IT infrastructure and data analytics support. Over the next five years, we aim to provide this client with new service management capabilities, improved service productivity, opportunities for cost savings, and the ability for Victory Capital to cost-effectively scale in support of business growth. Additionally, we signed an agreement to provide engineering services to Gentherm, the global market leader of innovative thermal management and pneumatic comfort technologies for the automotive industry.

Ravi Kumar Singisetti: We extended our relationship with Victory Capital to provide IT infrastructure and data analytics support.

Ravi Kumar Singisetti: Over the next five years, we aim to provide this client with new service management capabilities, improved service productivity, opportunities for cost savings, and the ability for Victory Capital to cost-effectively scale in support of business growth.

Ravi Kumar Singisetti: Additionally, we signed an agreement to provide engineering services to Gentherm, the global market leader of innovative thermal management and pneumatic comfort technologies for the automotive industry.

Ravi Kumar Singisetti: Under this agreement, we will expand our existing services to help develop the next generation of products aimed at elevating the customer vehicle experience. Our expertise in firmware development and verification and validation from the Mobica acquisition plays a critical role in differentiating our value. We've also seen increased demand for infrastructure-led transformation to the cloud, boosted in part by a Tradera business which we acquired in the first quarter. And our platform investments have helped drive increased Gen-AI adoption. As of this quarter, we have over 200 clients on our AI-led platforms, including Neuro IT Operations, SkyGrid, and FlowSource. Now, where are we with Gen AI?

Ravi Kumar Singisetti: Under this agreement, we will expand our existing services to help develop a next generation of products aimed at elevating customer vehicle experiences.

Ravi Kumar: Our expertise in firmware development and verification and validation from the Mobica acquisition played a critical role in differentiating our value proposition. We also seen increased demand for infrastructure led transformation to cloud, boosted in part by our Thradera business, which we acquired in the first quarter. And our platform investments have helped drive increased the Gen AI adoption. As of this quarter, we have over 200 clients on our AI-led platforms including neuro-IT operations, SkyGrade, and Flow Source.

Ravi Kumar Singisetti: Our expertise in firmware development and verification and validation from the Mobica acquisition played a critical role in differentiating our value proposition.

Ravi Kumar Singisetti: We've also seen increased demand for infrastructure-led transformation to cloud.

Ravi Kumar Singisetti: boosted in part by our third era business which we acquired in the first quarter.

Ravi Kumar Singisetti: And our platform investments have helped drive increased Gen AI adoption.

Ravi Kumar Singisetti: As of this quarter, we have over 200 clients on our AI-led platforms, including Neuro IT operations, SkyGrid, and FlowSource.

Ravi Kumar: Now, where are we with Gen AI? We see one of the biggest opportunities for Gen AI is tech for tech, which applies Gen AI to our software development cycles. With higher cost of capital in recent times, we believe that the need to do more with less combined with the leveraging of Gen. AI with lead companies into a need of hyper productivity. We believe this will fuel the next wave of digital transformation as clients seek to modernize the tech stack and reimagine business workflows with partners like Cognizant. In fact, in recently released follow-on analysis to our 2023 study with Oxford Economics, 70% of the respondents globally indicated they're not moving fast with Gen AI, and 82% indicated a delay in execution could put them at a disadvantage.

Ravi Kumar Singisetti: We see one of the biggest opportunities for Gen-AI is Tech4Tech, which applies Gen-AI to the software development cycle. With the higher cost of capital in recent times, we believe that the need to do more with less combined with the leveraging of generative AI will lead companies into an era of hyper productivity. We believe this will fuel the next wave of digital transformation as clients seek to modernize their tech stack and reimagine business workflows with partners like Cognizant.

Ravi Kumar Singisetti: Now where are we with Gen AI?

Ravi Kumar Singisetti: We see one of the biggest opportunities for Gen AI is Tech4Tech, which applies Gen AI to our software development cycles.

Ravi Kumar Singisetti: With higher cost of capital in recent times, we believe that the need to do more with less, combined with the leveraging of generative AI, will lead companies into an era of hyperproductivity.

Ravi Kumar Singisetti: We believe this will fuel the next wave of digital transformation as clients seek to modernize the tech stack and reimagine business workflows with partners like Cognizant.

Ravi Kumar Singisetti: In fact, in recently released follow-on analysis to our 2023 study with Oxford Economics, 70% of the respondents globally indicated they're not moving fast enough with Gen-AI, and 82% indicated a delay in execution could put them at a disadvantage.

Ravi Kumar Singisetti: In fact, in recently released follow-on analysis to a 2023 study with Oxford Economics,

Ravi Kumar Singisetti: 70% of the respondents globally indicated they're not moving fast with Gen AI, and 82% indicated a delay in execution could put them at a disadvantage. We are seeing a desire from our own clients to move more quickly.

Ravi Kumar: We are seeing a desire from our own clients to move more quickly. Over the past few quarters, we have become more deeply involved in our clients in Gen AI journeys. As of the end of second quarter, we have over 750 early client engagements, up from 415 Q1, and we have over 600 opportunities in the pipeline, compared to 500 last quarter. These early engagements have been across verticals with healthy activity in products and resources, along with financial services and health sciences. We're seeing demand across four key areas: first, customer and employee experience; second, content summarization; third, content generation; and finally, tech for tech to accelerate innovation and technology development cycles.

Ravi Kumar Singisetti: We are seeing a desire from our own clients to move more quickly. Over the past few quarters, we have become more deeply involved in our clients' Gen AI journey. As of the end of the second quarter, we have over 750 early client engagements, up from 450 in Q1, and we have over 600 opportunities in the pipeline compared to 500 last quarter. These early engagements have been across verticals, with healthy activity in products and resources along with financial services and the health care side. We're seeing demand across four key areas. First, Customer and Employee Experience. Second, Content Summarization.

Ravi Kumar Singisetti: Over the past few quarters, we have become more deeply involved in our clients' Gen AI journeys.

Ravi Kumar Singisetti: As of the end of second quarter, we have over 750 early client engagements up from 450 in Q1.

Ravi Kumar Singisetti: And we have over 600 opportunities in the pipeline compared to 500 last quarter.

Ravi Kumar Singisetti: Third, content generation. And finally, technology for technology to accelerate the innovation and technology development cycle. As an example of a recent project, Cognizant designed and recommended a business and technology architecture for AI development for a multinational accounting and audit services firm. This work included identifying the relevant technologies, infrastructures, skill sets, processes, and data required to support AI development across the office.

Ravi Kumar Singisetti: Second, content summarization.

Ravi Kumar Singisetti: Third, content generation. And finally, Tech4Tech to accelerate innovation and technology development cycles.

Ravi Kumar: As an example of a recent work, Cognizant designed and recommended a business in technology architecture for AI development for a multinational accounting and audit services firm. This work included identifying the relevant technologies, infrastructure, skillsets, processes, and data required to support AI development across the organization. And we are building a strong partnership ecosystem to support our Gen AI strategy.

Ravi Kumar Singisetti: This work included identifying the relevant technologies, infrastructures, skill sets, processes, and data required to support AI development across the organization.

Ravi Kumar Singisetti: And we are building a strong partnership ecosystem to support our Gen AI strategy. This quarter, we were selected as an AWS GenAI competency partner, driven by our capabilities in addressing complex industry problems and our expertise in AWS-specific GenAI solutions. And we have signed a strategic collaboration agreement with AWS to bring smart manufacturing solutions powered by Genai to market and transform manufacturing operations across various industries. As another example, we helped set up the world's largest pharmaceutical company, Pfizer, as a part of their Gen AI journey.

Ravi Kumar: This quarter, we have selected as an AWS GenAI competency partner driven by our capabilities in addressing complex industry problems and our expertise in AWS specific GenAI solutions. And we have signed a strategic collaboration agreement with AWS to bring smart manufacturing solutions powered by GenAI to market and transform manufacturing operations across various industries. As another example, we helped set up the world's largest pharmaceutical company, ZWS infrastructure as a part of the Genaiya journey. We also automated that clients' channeling of desperate data sources into a single vector data store to build a foundation for the Genaiya programs. In health sciences, we launched a first set of healthcare large-language model solutions and Google Cloud's Genaiya technology, including Google's Vertex AI platform and Gemini models.

Ravi Kumar Singisetti: This quarter, we are selected as an AWS GenAI Competency Partner, driven by our capabilities in addressing complex industry problems and our expertise in AWS-specific GenAI solutions.

Ravi Kumar Singisetti: As another example, we helped set up the world's largest pharmaceutical company's AWS infrastructure as a part of their GenAI journey. We also automated the client's channeling of desperate data sources into a single vector data store to build a foundation for the GenAI programs.

Ravi Kumar Singisetti: We also automated the client's channeling of desperate data sources into a single vector data store to build a foundation for the Gen-AI program. In health sciences, we launched the first set of healthcare large-language model solutions on Google Cloud's Genii technology, including Google's Vertex AI platform and Gemini model.

Ravi Kumar: The suite of solutions addressing four workflows: marketing operations, call center operations, provider management, and contracted. Our aim is to improve healthcare administrative processes and experiences for clients and their clients. We believe Genaiya has become a catalyst for clients who are behind in the data modernization of cloud journey, and we are pursuing these projects to help them lay the foundation for enterprise-grade Genaiya implementations.

Ravi Kumar Singisetti: The suite of solutions addresses four workflows, marketing operations, call center operations, provider management, and contracting. Our aim is to improve health care administration and experiences for our clients and their clients. We believe Gen-AI has become a catalyst for clients who are behind in the data modernization or cloud journey, and we are pursuing these projects to help them lay the foundation for enterprise-grade Gen-AI implementation.

Ravi Kumar Singisetti: The suite of solutions addressing four workflows, marketing operations, call center operations, provider management, and contracting.

Ravi Kumar Singisetti: Our aim is to improve healthcare administrative processes and experiences for our clients and their clients.

Ravi Kumar Singisetti: We believe GenAI has become a catalyst for clients who are behind in the data modernization or cloud journey, and we are pursuing these projects to help them lay the foundation for enterprise-grade GenAI implementations.

Ravi Kumar: In closing, I want to thank our employees around the world for the dedication to our clients and Cognizant. We've been executing well in a challenging macro environment. In the back half of 2024, we'll remain focused on our strategic priorities to drive revenue growth, become the employer of choice in our industry, and to simplify our operations.

Ravi Kumar Singisetti: In closing, I want to thank our employees around the world for their dedication to our clients and Cognizant. We've been executing well in a challenging macroenvironment. In the back half of 2024, we'll remain focused on our strategic priorities to drive revenue growth, become the employer of choice in our industry, and simplify our operation. With that, I'll hand it over to Jatin.

Ravi Kumar Singisetti: In closing, I want to thank our employees around the world for their dedication to our clients and Cognizant.

Jatin Dalal: With that, I'll hand it over to Jatin. Thank you, Ravi, and thank you all for joining us. Second quarter, revenue and operating margin came in above our expectations. Despite customer behavior and discussionary spending trends remaining largely unchanged, strong execution and the ramp up of large deal supported sequential revenue growth of 2.1% in constant currency. This provides us with revenue exit velocity going into Q3 and has allowed us to increase the midpoint of our organic revenue growth guidance for the full year. Our cost optimization efforts, including structural actions under the next-gen program, have thus delivered adjusted operating margins of 15.2%.

Jatin Pravinchandra Dalal: Thank you, Ravi, and thank you all for joining us. Second quarter revenue and operating margin came in above our expectations. Despite customer behavior and discretionary spending trends remaining largely unchanged, strong execution and the ramp-up of large deals supported sequential revenue growth of 2.1% in constant currency. This provides us with revenue exit velocity going into Q3 and has allowed us to increase the midpoint of our organic revenue growth guidance for the full year. Our cost optimization efforts, including structural actions under the NextGen program, helped us deliver adjusted operating margins of 15.2 percent.

Speaker Change: Thank you, Ravi, and thank you all for joining us.

Ravi Kumar Singisetti: Second quarter revenue and operating margin came in above our expectations.

Speaker Change: This provides us with revenue exit velocity going into Q3 and has allowed us to increase the midpoint of our organic revenue growth guidance for the full year.

Speaker Change: Our cost optimization efforts, including structural actions under the NextGen program, helped us deliver adjusted operating margins of 15.2%. This was a modest increase sequentially and 100 basis point increase from the prior year period.

Jatin Dalal: This was the modest increase sequentially and 100 basis point increase from the prior year period. We are pleased with the cost savings we have achieved under the program, which allowed us to expand adjusted operating margins while funding growth investments.

Jatin Pravinchandra Dalal: This was a modest increase sequentially and a 100 basis point increase from the prior year period. We are pleased with the cost savings we have achieved under the program, which allowed us to expand adjusted operating margin while funding growth investments. Now, we turn to the details.

Ravi Kumar Singisetti: We are pleased with the cost savings we have achieved under the program, which allowed us to expand adjusted operating margin while funding growth investments.

Jatin Dalal: Now, let's turn to the details. Second quarter, revenue was approximately 4.9 billion, which Ravi mentioned exceeded the higher end of our guidance range. This represented a decline of 0.7% year over year, or a decline of 0.5% in constant currency. In constant currency, growth was approximately 50 basis points, better than the high end of our guidance.

Jatin Pravinchandra Dalal: Second quarter revenue was approximately $4.9 billion, which Ravi mentioned exceeded the higher end of our guidance range. This represented a decline of 0.7% year-over-year or a decline of 0.5% in constant current. In constant currency, growth was approximately 50 basis points, better than the high end of our guidance. Year-over-year performance includes approximately 60 basis points of growth from recent acquisitions. Q2 bookings grew 5% year-over-year and were driven by mid-size. Our trailing 12-month book-to-bill ticked up slightly to 1.4x from 1.3x in Q1.

Ravi Kumar Singisetti: Now, let's turn to the details.

Ravi Kumar Singisetti: Second quarter revenue was approximately $4.9 billion.

Ravi Kumar Singisetti: which Ravi mentioned exceeded the higher end of our guidance range.

Speaker Change: This represented a decline of 0.7% year-over-year or a decline of 0.5% in constant currency.

Ravi Kumar Singisetti: In constant currency, growth was approximately 50 basis points, better than the high end of our guidance range.

Jatin Dalal: Strange. Year-over-year performance includes approximately 60 basis points of growth from the recent acquisitions. Q2 bookings grew 5% year over year and were driven by mid-size deals. Our trailing 12 month book to bill ticked up slightly to 1.4x from 1.3x in Cuban. We continue to see a lengthening of contract durations driven by a shift to larger, longer-term contracts. This has extended the revenue conversion timing, but also provided improved forward visibility. As Ravi mentioned, we were pleased with the improved performance in financial services, which grew 5% sequentially. Our health sciences business grew over 3% sequentially, with solid growth across payer, provider, and life sciences customers.

Speaker Change: Year-over-year performance includes approximately 60 basis points of growth from the recent acquisitions.

Speaker Change: Q2 bookings grew 5% year-over-year and were driven by mid-size deals.

Speaker Change: Our trailing 12-month book-to-bill ticked up slightly to 1.4x from 1.3x in Q1.

Jatin Pravinchandra Dalal: We continue to see a lengthening of contract durations driven by a shift to larger, longer-term contracts. This has extended the revenue conversion timing but also provided improved forward visibility. As Ravi mentioned, we were pleased with the improved performance in financial services, which grew 5% sequentially. Our health sciences business grew over 3% sequentially, with solid growth across payer, provider, and life sciences customers. Products and resources revenue was down modestly quarter over quarter and down approximately 4% year over year in constant currency.

Speaker Change: We continue to see a lengthening of contract durations driven by a shift to larger, longer-term contracts.

Speaker Change: This has extended the revenue conversion timing but also provided improved forward visibility.

Speaker Change: As Ravi mentioned, we were pleased with the improved performance in financial services, which grew 5% sequentially.

Ravi Kumar Singisetti: Our health sciences business grew over 3% sequentially, with solid growth across payer, provider, and life sciences customers.

Jatin Dalal: Products and resources revenue was down modestly quarter over quarter and down approximately 4% year over year in constant currency. The decline was due to ongoing discretionary spending pressure among our customers. We have seen demand in areas like grid modernization and cloud modernization investments among our utility customers. We have also seen pockets of strength in the travel and hospitality sector led by improved travel demand, as well as interest in gen AI-powered personalization to deliver differentiated guest experiences. Our pipeline in products and resources remains healthy, and we are excited to close the welcome acquisition, which we expect will provide new growth opportunities in this segment.

Ravi Kumar Singisetti: Products and resources revenue was down modestly quarter over quarter and down approximately 4% year over year in constant currency.

Jatin Pravinchandra Dalal: The decline was due to ongoing discretionary spending pressure among our customers. We have seen demand for areas like grid modernization and cloud modernization investments among our utility customers. We have also seen pockets of strength in the travel and hospitality sector, led by improved travel demand, as well as interest in gen-AI-powered personalization to deliver differentiated guest experiences. Our pipeline for products and resources remains healthy, and we are excited to close the Belkin acquisition, which we expect will provide new growth opportunities in this segment. Communications, media, and technology grew year over year again.

Ravi Kumar Singisetti: The decline was due to ongoing discretionary spending pressure among our customers.

Speaker Change: We have seen demand in areas like grid modernization and cloud modernization investments among our utility customers.

Speaker Change: We have also seen pockets of strength in the travel and hospitality sector, led by improved travel demand, as well as interest in Gen AI powered personalization to deliver differentiated guest experiences.

Speaker Change: Our pipeline in products and resources remains healthy and we are excited to close the Belkin acquisition which we expect will provide new growth opportunities in this segment.

Jatin Dalal: Communications, media and technology grew year over year again, supported by recently completed acquisitions. We have also continued to benefit from the ramp of new business within constant media, which has helped offset lower level of discretionary spending among the technology customers. By geography, we were pleased with the growth in North America, driven in part by large little ramping up over the last few quarters. However, other parts of the world, particularly Europe, remain challenged by soft discretionary spending. Despite this, we were also pleased with a return to sequential growth in our Rest of the World region where we are seeing early progress from recently won large deals and new logos and a healthy pipeline of new opportunities.

Speaker Change: Communications, Media and Technology grew year over year again.

Jatin Pravinchandra Dalal: Supported by recently completed, We have also continued to benefit from the ramp of new business within comps and media, which has helped offset lower levels of discretionary spending among the technology companies. By geography, we were pleased with the growth in North America, driven in part by large-scale ramping up over the last few quarters. However, other parts of the world, particularly Europe, remain challenged by Soft Discretionary Science.

Speaker Change: supported by recently completed acquisitions.

Speaker Change: We have also continued to benefit from the ramp of new business within comps and media, which has helped offset lower levels of discretionary spending among the technology customers.

Speaker Change: By geography, we were pleased with the growth in North America.

Speaker Change: driven in part by large deals ramping up over the last few quarters. However, other parts of the world, particularly Europe , remain challenged by soft discretionary spending.

Jatin Pravinchandra Dalal: Despite this, we were also pleased with a return to sequential growth in our rest of the world region, where we are seeing early progress from recently won large deals and new logos, and a healthy pipeline of new opportunities. Now moving to my Next-gen cost savings continue to progress and have helped us offset the margin impacts of recent large-scale ramps. During the quarter, we incurred approximately 29 million in costs related to next-gen, which negatively impacted our gap operating margin by approximately 60 basis points. Excluding this impact, adjusted operating margin was 15.2%, an increase of 10 basis points sequentially and 100 basis points year-over-year.

Speaker Change: Despite this, we were also pleased with a return to sequential growth in our rest-of-the-world region, where we are seeing early progress from recently won large deals and new logos, and a healthy pipeline of new opportunities.

Jatin Dalal: Now moving to margins. Next-gen cost saving continued to progress and helped us offset the margin impact of recent large deal ramps. During the quarter, we incurred approximately 29 million in cost related to next-gen, which negatively impacted our gap operating margin by approximately 60 basis points. Excluding this impact, adjusted operating margin was 15.2% and increased of 10 basis points sequentially and 100 basis points year over year. As a reminder, the prior period included a 60-basis-points benefit from an insurance recovery. Our gap tax rate for the quarter was 22.7, and adjusted tax rate in the quarter was 23%.

Speaker Change: Now, moving to margins.

Speaker Change: Next-gen cost savings continue to progress and have helped us offset the margin impact of recent large-scale ramps.

Speaker Change: During the quarter, we incurred approximately $29 million in costs related to next-gen, which negatively impacted our GAAP operating margin by approximately 60 basis points.

Speaker Change: Excluding this impact, adjusted operating margin was 15.2%, an increase of 10 basis points sequentially and 100 basis points year-over-year.

Jatin Pravinchandra Dalal: As a reminder, the prior year period included a 60 basis points benefit from an insurance recovery. Our gap tax rate for the quarter was 22.7, and our adjusted tax rate in the quarter was 23%, reflecting a benefit from the timing of discrete items.

Speaker Change: As a reminder, the prior year period included a 60 basis points benefit from an insurance recovery.

Speaker Change: Our gap tax rate for the quarter was $22.7.

Jatin Dalal: Reflecting a benefit from the timing of discrete items, Q2 diluted GAAP EPS was $1.14 and Q2 adjusted EPS was $1.17. Turning to the balance sheet, we ended the quarter with cash and short-term investments of 2.2 billion, or net cash of 1.6 billion. DSO of 80 days was up 2 days sequentially and increased 5 days year-over-year, driven by our business mix. Free cash flow in Q2 was 183 million, primarily reflecting the seasonality. During the quarter, we returned $2.26 million to the shareholders, including $76 million through share repurchases and $150 million through our regular dividends. At the end of Q2, we had $1.6 billion remaining under our share repurchase authorization.

Speaker Change: and adjusted tax rate in the quarter was 23%.

Jatin Pravinchandra Dalal: Q2 Diluted GAP EPS was $1.14, and Q2 Adjusted EPS was $1.17. Turning to the balance, we ended the quarter with cash and short-term investments of 2.2 billion, or net cash of 1.6 billion. DSO of 80 days was upped 2 days sequentially and increased 5 days year over year driven by our business. Free cash flow in Q2 was $183 million, primarily reflecting the seasonal.

Speaker Change: reflecting a benefit from the timing of discrete items.

Speaker Change: Q2 Diluted GAP EPS

Speaker Change: was $1.14 and Q2 Adjusted EPS was $1.17.

Speaker Change: Turning to the balance sheet.

Speaker Change: We ended the quarter with cash and short-term investments of 2.2 billion or net cash of 1.6 billion.

Speaker Change: DSO of 80 days was up 2 days sequentially and increased 5 days year over year driven by our business mix.

Speaker Change: Free cash flow in Q2 was $183 million, primarily reflecting the seasonality.

Jatin Pravinchandra Dalal: During the quarter, we returned $226 million to shareholders, including $76 million through share repurchases and $150 million through our regular dividends. At the end of Q2, we had $1.6 billion remaining under our share repurchase authorization. As of today, other than the expected closing of Belkin, we do not anticipate any material inorganic activity for the remainder of the year, as our immediate focus is on closing the Belkin acquisition and its initial integration work.

Speaker Change: During the quarter, we returned $226 million to the shareholders, including $76 million through share repurchases and $150 million through our regular dividend.

Speaker Change: At the end of Q2, we had $1.6 billion remaining under our share repurchase authorization.

Jatin Dalal: As of today, other than the expected closing of Balkan, we do not anticipate any material inorganic activity for the remainder of the year. As our immediate focus is on closing the Balkan acquisition and its initial integration work. We expect to return approximately $600 million to shareholders in the form of share repurchases and dividends in the second half of this year. This is expected to bring total capital return to the shareholders to approximately $1.1 billion for the full year. These amounts exclude the expected additional share repurchase activity to offset the new shares we plan to issue as part of the Balkan acquisition.

Speaker Change: As of today, other than the expected closing of Belkin, we do not anticipate any material inorganic activity for the remainder of the year, as our immediate focus is on closing the Belkin acquisition and its initial integration work.

Jatin Pravinchandra Dalal: We expect to return approximately $600 million to shareholders in the form of share repurchases and dividends in the second half of this year. This is expected to bring total capital return to shareholders to approximately 1.1 billion for the full year.

Speaker Change: We expect to return approximately $600 million to shareholders in form of share repurchases and dividends in the second half of this year.

Speaker Change: This is expected to bring total capital return to the shareholders to approximately 1.1 billion for the full year.

Jatin Pravinchandra Dalal: These amounts exclude the expected additional share repurchase activity to offset the new shares we plan to issue as part of Belconnex. Turning to our forward hour, our updated guidance does not include contributions from them.

Speaker Change: These amounts exclude the expected additional share repurchase activity to offset the new shares we plan to issue as part of Belkin acquisitions.

Jatin Dalal: Turning to our forward outlook now, our updated guidance does not include contribution from Balkan. We plan to update our outlook after the acquisition has closed, which we still expect to occur in the third quarter. There are no changes to the estimated financial impact that we provided at the time of the announcement. For the third quarter, we expect revenue to be flat to 1.5% year over year in constant currency. Sequentially, this implies a growth of 0.7% to 2.2% in constant currency. For the full year, our organic revenue growth outlook has morelessly improved. We now expect revenue to be in the range of $19.3 to $19.5 billion, which is a decline of 0.5% to growth of 1% year over year, both as reported and in constant currency.

Speaker Change: Turning to our forward outlook now.

Speaker Change: Our updated guidance does not include contributions from Bergin.

Jatin Pravinchandra Dalal: We plan to update our outlook after the acquisition has closed, which we still expect to occur in the third quarter. However, there are no changes to the estimated financial impact that we provided at the time of the announcement. For the third quarter, we expect revenue to be flat, to up 1.5% year-over-year in constant current. This, sequentially, this implies a growth of 0.7% to 2.2% in constant growth. For the full year, our Organic Revenue Growth Outlook, [inaudible] We now expect revenue to be in the range of $19.3 to $19.5 billion, which is a decline of 0.5% to growth of 1% year over year, both as reported and in constant connection. Our updated guidance includes approximately 70 basis points of inorganic contribution versus our prior guidance of up to 100 basis points.

Speaker Change: We plan to update our outlook after the acquisition has closed, which we still expect to occur in the third quarter.

Speaker Change: There are no changes to the estimated financial impact that we provided at the time of the announcement.

Speaker Change: For the third quarter, we expect revenue to be flat to up 1.5% year-over-year in constant currency.

Speaker Change: Sequentially, this implies a growth of 0.7% to 2.2% in constant currency.

Speaker Change: For the full year, our organic revenue growth outlook has modestly improved.

Speaker Change: We now expect revenue to be in the range of $19.3 to $19.5 billion.

Speaker Change: which is a decline of 0.5% to growth of 1% year over year.

Jatin Dalal: Our updated guidance includes approximately 70 basis points of inorganic contribution versus our prior guidance of up to 100 basis points. This reflects the contribution from only our completed transit. Therefore, at the midpoint, our organic growth outlook has improved by approximately 55 basis points. Moving on to adjusted operating margin, we are pleased with our first half performance, and we continue to expect the full year to be in the range of 15.3 to 15.5%. Our guidance includes the expected impact of our merit cycle, which will take effect on August 1st. We expect this will be partially offset by the savings from our next-gen program and operational discipline.

Speaker Change: both as reported and in constant currency.

Speaker Change: Our updated guidance includes approximately 70 basis points of inorganic contribution versus our prior guidance of up to 100 basis points.

Jatin Pravinchandra Dalal: This reflects the contribution from only our completed transactions. Therefore, at the midpoint, our organic growth outlook has improved by approximately 55%. Moving on to Adjusted Operating Margin, we are pleased with our first half performance, and we continue to expect the full year to be in the range of 15.3 to 15.5. Our guidance includes the expected impact of our marriage cycle, which will take effect on August 1st. We expect this will be partially offset by the savings from our next-gen program and operational decisions. For the full year, we anticipate net interest income of approximately 80 million, which compares to 60 million previously. Our adjusted tax rate guidance of 24% to 25% remains unchanged.

Speaker Change: This reflects the contribution from only our completed transactions.

Speaker Change: Therefore, at the midpoint, our organic growth outlook has improved by approximately 55 basis points.

Speaker Change: Moving on to Adjusted Operating Margin, we are pleased with our first half performance and we continue to expect the full year to be in the range of 15.3 to 15.5 percent.

Speaker Change: Our guidance includes the expected impact of our marriage cycle, which will take effect on August 1st.

Speaker Change: We expect this will be partially offset by the savings from our next-gen program and operational discipline.

Jatin Dalal: For the full year, we anticipate net interest income of approximately 80 million, which compares to 60 million previously. Our adjusted tax rate guidance of 24 to 25% remains unchanged. Our full year free cash flow guidance is also unchanged, and we continue to expect it will represent 80% of net income. This includes the negative impact from $360 million payment made to Indian tax authorities in the first quarter in relation to our ongoing appeal of 2016 tax matter. Our guidance for shares outstanding is unchanged at approximately 497 million. This leads to our full year adjusted earnings per share guidance of $4.62 to $4.70, which reflects a seven-cent increase in the midpoint versus our prior range of $4.50 and $4.68.

Speaker Change: For the full year, we anticipate net interest income of approximately $80 million, which compares to $60 million previously.

Speaker Change: Our adjusted tax rate guidance of 24-25% remains unchanged.

Jatin Pravinchandra Dalal: Our full-year free cash flow guidance is also unchanged, and we continue to expect it will represent 80% of net income. This includes the negative impact from a $360 million payment made to Indian tax authorities in the first quarter in relation to our ongoing appeal of a 2016 tax matter. Our guidance for shares outstanding is unchanged at approximately $497 million.

Speaker Change: Our full year free cash flow guidance is also unchanged and we continue to expect it will represent 80% of net income.

Speaker Change: This includes the negative impact from a $360 million payment made to Indian tax authorities in the first quarter in relation to our ongoing appeal of a 2016 tax matter.

Speaker Change: Our guidance for shares outstanding is unchanged at approximately $497 million.

Speaker Change: This leads to our full year Adjusted Earnings Per Share guidance of $4 per share.

Speaker Change: and Sixty Two Cents.

Speaker Change: which reflects a $0.07 increase in the midpoint versus our prior range of $4.50.

Operator: With that, we will open the call for your questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press the star key one on your telephone keypad. A confirmation tone will indicate a line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: This leads to our full year adjusted earnings per share guidance of $4.00 and Sixty Two Cents and Seventy Cents, which reflects a $0.07 increase in the midpoint versus our prior range of $4.50 and $4.68. With that, we will open the call to your questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone. A confirmation tone will indicate that a line is in the. You may press star 2 if you would like to remove your line.

Speaker Change: and $4.68

Speaker Change: With that, we will open the call for your questions.

Speaker Change: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate a line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: If you are using speaker equipment, it may be necessary to pick up your handset before pressing a button. In the interest of time, we ask that you limit yourselves to one question and one... One moment, please, while we... Our first question comes from the line of Jim Snyder with Goldman Sachs. Please proceed with, Good afternoon. Thanks for taking my questions. First of all, on generative AI, helpful commentary. And Ravi, you mentioned the 750 early client engagements. Could you indicate whether any of your clients are moving beyond the proof of concept stage? And what are those larger engagements? What form are they taking?

Operator: In the interest of time, we ask that you limit yourselves to one question and one follow-up. One moment, please, while we pull for a question.

Speaker Change: In the interest of time, we ask that you limit yourselves to one question and one follow-up.

Speaker Change: One moment, please, while we poll for questions.

Jim Snyder: Our first question comes from the line of Jim Snyder with Goldman Sachs. Please proceed with your question.

Speaker Change: Our first question comes from the line of Jim Snyder with Goldman Sachs. Please proceed with your question.

Jim Snyder: Good afternoon. Thanks for taking my questions. First of all, on generative AI, helpful commentary, and Ravi, you mentioned the 750 early client engagements.

Ravi Kumar Singisetti: And can you maybe quantify the amount of bookings you currently have tied to generative AI at this stage? Thank you for that question. The one thing you want to know is generative AI is diffusing into all technology-led projects in a very, very fast way. So the ability to ring-fence it and start to think about what it does to a technology, what it doesn't do to a technology, or how do you trace it back is always hard.

Jim Snyder: Good afternoon. Thanks for taking my questions. First of all, on generative AI, helpful commentary, and Ravi, you mentioned the 750 early client engagements.

Ravi Kumar: Could you indicate whether any of your clients are moving beyond the proof of concept stage, and what are those larger engagements? What form are they taking, and can you maybe quantify the amount of bookings you currently have tied to generative AI at this stage?

Jim Snyder: Could you indicate whether any of your clients are moving beyond the proof-of-concept stage and what are those larger engagements, what form are they taking, and can you maybe quantify the amount of bookings you currently have tied to generative AI at this stage?

Ravi Kumar: Thank you for that question. I think the one thing you want to know is generative AI is diffusing into all our technology-led projects in a very, very fast way. The ability to ring fence it and start to think about what it does to a technology or how do you trace it back is always hard. So the best metric for us was to find out the number of projects we are doing around generative AI. So the number we gave this quarter was 750. which is up from 450 last quarter. So we're very pleased with the number of early engagements.

Speaker Change: Thank you for that question. You know, I think the one thing you want to know is...

Speaker Change: generative AI is diffusing into

Speaker Change: all our technology-led projects in a very, very fast way. So the ability to ring-fence it and start to think about...

Speaker Change: what it does to a technology, what it doesn't do a technology, or how do you trace it back is always hard. So the best metric for us was to find out the number of projects we are doing around generative AI. So the number we gave this quarter was 750.

Ravi Kumar Singisetti: So the best metric for us was to find out the number of projects we are doing around generative AI. So the number we delivered this quarter was 750, which is up from 450 last quarter. So we're very, very pleased with the number of early engagements. We have 600 more in the pipeline. And if you remember, in quarter two of last year, we spoke about 100 active engagements. So we've gone all the way from 100 to 750.

Speaker Change: which is up from 450 last quarter. So we're very pleased with the number of early engagements. We have 600 more in the pipeline and if you remember quarter two of last year we spoke about 100 active engagements. So we've gone all the way from 100 to 750.

Ravi Kumar: We have 600 more in the pipeline, and if you remember quarter two of last year, we spoke about 100 active engagements. So we've gone all the way from 100 to 750. It's a small because of multiple reasons.

Ravi Kumar Singisetti: Now, how much of this is going into real production work? I would say a very small number of projects are going into production work, and that number is small because of multiple reasons. One is that as you get to production-grade work, you need to start to think about your data architecture, you need to start to think about your cloud infrastructure, and you also need to start to think about the cost of compute, the availability of talent, and everything else.

Speaker Change: Now, how much of this is going into real production work? I would say a very small number of projects are going into production work, you know, and that number is small because of multiple reasons.

Ravi Kumar: One is, as you get to production grade work, you need to start to think about your data architecture, you need to start to think about your cloud infrastructure, and you also need to start to think about the cost of compute, the availability of talent, and everything else. So only a small minor portion of it is going into live production work, but what we have pleased is, as we get past this, it needs bitters if I may. We're going to see a sharp S curve. I actually believe this is going to be a sharp S curve.

Speaker Change: As you get to production-grade work, you need to start to think about your data architecture, you need to start to think about your cloud infrastructure.

Speaker Change: And you also need to start to think about the cost of compute, the availability of talent, and everything else. So only a small, minor portion of it is going into live production work. But what we are pleased is as we get past these inhibitors, if I may.

Ravi Kumar Singisetti: So only a small, minor portion of it is going into live production work. But what we are pleased about is, as we get past these inhibitors, if I may say, we're going to see a sharp S-curve. I actually believe this is going to be a sharp S-curve.

Speaker Change: We're going to see a sharp S-curve. I actually believe this is going to be a sharp S-curve. A lot of them are related to productivity and task automation. So the benefits are very tangible, and hence it will go through the sharp S-curve.

Ravi Kumar Singisetti: A lot of them are related to productivity and task automation. So the benefits are very tangible, and hence it will go through a sharp S-curve. But progressively, we will start to see more, more projects related to innovation, more projects related to changing the operating model. And, in fact, one of the surveys we did just a few weeks ago, with 2,200 business executives from 15 countries, has also started to tell us that productivity doesn't mean just cost reduction.

Ravi Kumar: A lot of them are related to productivity and task automation. So the benefits are very tangible, and hence it will go through the sharp S curve. But progressively we will start to see more projects related to innovation, more projects related to change in operating model. So, in fact, one of the surveys we did just a few weeks ago with 2,200 business executives from 15 countries has also started to tell us that productivity doesn't mean just cost reduction; productivity also means new revenue streams and new products and new services. So we are again excited about the fact that if it is renew the revenue generating the acceleration to the smart the sharp S curve is going to be much quicker.

Speaker Change: But progressively, we will start to see more projects related to innovation, more projects related to change in operating model. And in fact, one of the surveys we did just a few weeks ago with 2,200 business executives from 15 countries.

Speaker Change: has also started to tell us that productivity doesn't mean just cost reduction. Productivity also means

Ravi Kumar Singisetti: Productivity also means new revenue streams and new products and new services. So we are, again, excited about the fact that if it is revenue-generating, the acceleration to the sharpest curve is going to be much quicker.

Speaker Change: New Revenue Streams and New Products and New Services. So we are, again, excited about the fact that if it is revenue generating...

Speaker Change: The acceleration to the sharpest curve is going to be much quicker. So that's one metric to know how well we are doing. The second metric I would say, which I spoke about, is we have 200-plus clients.

Ravi Kumar Singisetti: So that's one metric to know how well we are doing. The second metric, I would say, which I spoke about, is that we have 200 plus clients on all our platforms, AI platforms. The AI platforms we have at Cognizant are all related to how do you take Foundation Models and make them production grade, be it accuracy of the models, be it governance, be it management, be it, be it, be it Responsible AI.

Ravi Kumar: So that's one metric to know how well we're doing. The second metric I would say, which I spoke about, is we have 200 plus clients on all our platforms, AI platforms. The AI platforms we have at Cognizant are all related to how do you take foundation models and make them production great, be decorative the models, be it governance, be it management, be it responsible AI. So these 200 clients are experimenting with us to make sure that they're getting ready for production because they're a part of our platform, so that gives me indication that there is a good momentum in the future.

Speaker Change: on all our platforms, AI platforms.

Speaker Change: The AI platforms we have at Cognizant.

Speaker Change: are all related to, how do you take...

Speaker Change: foundation models and make them production grade, be it accuracy of the models, be it governance, be it management, be it responsible AI.

Ravi Kumar Singisetti: So these 200 clients are experimenting with us to make sure that they're getting ready for production because they're a part of our platform. So that gives me an indication that there is good momentum in the future. We also dissect this into four different categories; a lot of it is content aggregation, Customer Experience, and Employee Experience. Again, the benefits in the business case are very tangible here. So we will see faster acceleration.

Speaker Change: So, these 200 clients are experimenting with us to make sure that they're getting ready for production because they're a part of our platform. So, that gives me indication that there is a good momentum in the future.

Ravi Kumar: We also dissect this into four different categories. A lot of it is content aggregation and customer experience and employee experience. Again, the benefits in the business case are very tangible here, so we see we will see faster acceleration. Then, of course, the biggest use cases tech for tech, which is applying it to development cycles. The challenges in that particular case you have to share the productivity benefits with your clients, so the good news is it increases our win rates, and if we are ahead of the curve, we get to save some of that. And the last one I would say is content generation, which is more creative; it will take a little longer time. So overall, we're very pleased with where we are. We are pleased with the fact that some of this is leading to more structural work related to data and cloud.

Speaker Change: We also dissect this into four different categories. A lot of it is content aggregation.

Ravi Kumar Singisetti: Then, of course, the biggest use case is tech for tech, which is applying it to development cycles. The challenges in that particular case are that you have to share the productivity benefits with your clients. So the good news is it increases our win rates. And if we are ahead of the curve, we get to save some of that. And the last one, I would say, is content generation, which is more creative.

Speaker Change: and Customer Experience and Employee Experience. Again, the benefits in the business case are very tangible here, so we will see faster acceleration. Then, of course, the biggest use case is Tech4Tech, which is applying it to development cycles. The challenge is, in that particular case,

Speaker Change: you have to share the productivity benefits with your clients. So the good news is, it increases our win rates, and if we are ahead of the curve, we get to save some of that.

Ravi Kumar Singisetti: It'll take a little longer time. So overall, we're very pleased with where we are. We're very pleased with the fact that some of this is leading to more structural work related to data and cloud, which by itself is a heavy lift for us, which will then get monetized into services dollars. So that's broadly where the generative AI story is, and I think the excitement about how much productivity we can generate for our clients and create a flywheel on this makes it the biggest opportunity for us to tap into the future. Thanks for that!

Speaker Change: And the last one, I would say, is content generation, which is more creative. It'll take a little longer time.

Speaker Change: So overall, we're very pleased with where we are, we're very pleased with the fact that some of this is leading to more structural work related to data and cloud, which by itself is a heavy lift for us, which will then get monetized into services dollars.

Ravi Kumar: Which by itself is a heavy lift for us, which will then get monetized into services dollars. So that's brought broadly with where the device stories and I I think the excitement about. How much productivity we can generate for our clients and create a flywheel of this makes it the biggest opportunity for us to tap into with the future.

Speaker Change: So, that's broadly where the generative AI story is, and I think the excitement about

Speaker Change: how much productivity we can generate for our clients and create a flywheel of this makes it the biggest opportunity for us to tap into the future.

Jatin Pravinchandra Dalal: And second one, if I may, on gross margins. In the quarter, revenue was up sequentially, headcount was down, I believe, and utilization was up. So what were some of the factors that were pressuring gross margins, such as project pricing and higher startup costs on large deals? And can you maybe comment on the prospects for expanding those gross margins over the next couple of quarters? Sure, so quarter 2 was a good execution quarter where we improved our utilization. We continue to deliver sequential growth while actually reducing the trajectory of employees in terms of headcount. So, overall, good execution.

Speaker Change: Thanks for that. And the second one, if I may, on gross margins, you know, in the quarter, revenue was up sequentially, headcount was down, I believe, and utilization was up. So what were some of the factors that are pressuring the gross margins, such as project pricing and higher startup costs on large deals? And can you maybe comment on the prospects for expanding those gross margins over the next couple of quarters?

Jatin Dalal: Could we comment on the prospects of expanding those gross margins over the next couple of quarters? Sure, so quarter two was a good execution quarter where we improve our utilization. We continue to deliver sequential growth while actually reducing the trajectory of employees in terms of the head count. So overall good execution, why you are not seeing it yet reflected in the gross margin is really what you mentioned, the growth or the ramp up of the large deals that we have won in past and they are ramping up and there is an initial investment of slightly lower margin as those deals ramp up.

Speaker Change: Sure, so quarter two was a good execution quarter where we improved our utilization. We continue to deliver sequential growth while actually reducing the trajectory of.

Jatin Pravinchandra Dalal: Why you are not seeing it yet reflected in the gross margin is really what you mentioned, the growth or the ramp-up of the large deals that we have won in the past, and they are ramping up, and there is an initial investment of slightly lower margin as those deals ramp up. And that's the reason that the gross margin number has remained flattish between quarter 1 and quarter 2. We are optimistic that as we move into quarter 3, quarter 4, you should start seeing a slightly better performance on gross margin as we get to quarter 4. Just to link back to your AI question on this, if you look at the math, we sequentially dropped by 8,000 odd people, and year on year we dropped by 9,000.

Jatin Dalal: And that's the reason that gross margin number has remained flatish between Quarter One and Quarter Two.

Jatin Dalal: We are optimistic that as we move into quarter three, quarter four, you should start seeing a slightly better performance on gross margin as we get through quarter. Just to link back to your AI question on this, if you look at the math, we sequentially dropped by a thousand odd people and year on year we dropped by nine thousand people, but we sequentially grew by two percent, and what that really means is a part of it is running running with tight utilization. A part of it is related to AI, doing work with less than a number of people and therefore creating a productivity benefit for us.

Speaker Change: [inaudible]

Speaker Change: Just to link back to your AI question on this, if you look at the math, we sequentially dropped by 8,000 odd people, and year on year we dropped by 9,000 people.

Jatin Pravinchandra Dalal: But we sequentially grew by, and what that really means is part of it is running with tight utilization. Part of it is related to AI, doing work with a lesser number of people and, therefore, creating a productivity benefit for us. So, you know, just to add to the, you know, the AI, the reason why some of that is explainable is also because AI and automation are starting to be applied to our project. Thank you very much. Our next question comes from the line of Bryan Bergin with Cowen. Hey, good afternoon.

Speaker Change: But we sequentially grew by 2%.

Speaker Change: And what that really means is, a part of it is...

Speaker Change: running with tight utilization. A part of it is related to AI, doing work with lesser number of people and therefore

Jatin Dalal: So just to add to the reason why some of that is explainable is also because AI and automation is starting to be applied to our projects.

Speaker Change: creating a productivity benefit for us. So, you know, just to add to the, you know, the AI, the reason why some of that is explainable is also because AI and automation is starting to be applied to our projects.

Jatin Dalal: Thank you very much.

Brian Bergen: Thank you. Our next question comes from the line of Brian Bergen with Cowan.

Ravi Kumar Singisetti: Thank you. I want to ask about bookings. So nice to see a return to growth here. And it does seem like you've had a recent uptick in deal activity, just based on your announcements. Can you comment on the level of bookings that you would say are kind of net new work versus renewals? And just any common threads to highlight across the latest deals that were announced? Let me take a shot at it, and I'll ask Jatin to add more later.

Speaker Change: Thank you very much.

Speaker Change: Thank you. Our next question comes from the line of Bryan Bergin with Cowen. Please proceed with your question.

Brian Bergen: Please proceed with your question.

Brian Bergen: Hey, good afternoon, and thank you. I wanted to have some booking, so nice to see your return of growth here, and it does seem like you've had a recent uptick in deal activity just based on your announcements. Can you comment on the level of bookings that you would say are kind of net new work versus renewals and just any common threads to highlight across the latest deals that were announced?

Ravi Kumar Singisetti: We don't give the split of renewal and new business, but I can tell you one thing: our new business is significantly higher than the renewals in 2024 versus 2023. So we're very, very happy about it. The second thing is that there are also new logos and an expansion in the bookings, so we are again very pleased. One of the reasons why financial services grew well, I mean financial services grew sequentially after 2022, and it grew well because we also opened new logos, and we started to look for expansion in existing customers, so that's all contributing to our bookings. We had five large deals with more than 100 million, and we had two of them in the range of 90 plus.

Bryan C. Bergin: Hey, good afternoon. Thank you. I wanted to ask on bookings. So, nice to see a return to growth here. And it does seem like you've had a recent uptick in deal activity just based on your announcements. Can you comment on the level of bookings that you would say are kind of net new work versus renewals? And just any common threads to highlight across the latest deals that were announced?

Ravi Kumar: Let me get, let me take a shot at it, and I last just into add we don't give the renewal and split of renewal and new business, but I can tell you one thing: that our new business is significantly higher than the renewals in 2024 versus 2023, so we're very, very happy about it. The second is there is also new logos and expansion in the bookings, so we are again very pleased. One of the reasons why financial services grew well. I mean financial services grew sequentially after 2022, and it grew well because we also opened new logos.

Speaker Change: So let me let me take a shot at it and I'll ask Jatin to add. We don't give the renewal and split of renewal and new business but I can tell you one thing that our new business is significantly higher than the renewals in 2024 versus 2023 so we're very very happy about it.

Jatin Pravinchandra Dalal: The second is there is also new logos and expansion in the bookings.

Jatin Pravinchandra Dalal: So we are again very pleased. One of the reasons why financial services grew well.

Speaker Change: I mean financial services grew...

Ravi Kumar: We started to look for expansion existing customers, so that's all contributing to our bookings. We had five large deals with more than 100 million, and we had two of them in the range of 90 plus. In fact, all five of them actually had expansion and new business in the mix. So we are very pleased about how the amount of work we are getting, which is new and expansion is increasing. Of course, the duration of deals is also increasing. On the higher end, I mean, the larger deals, about 50 million dollars, the duration is increasing.

Jatin Pravinchandra Dalal: sequentially after 2022. And it grew well because we also opened new logos, we started to look for expansion in existing customers, so that's all contributing to our bookings. We had five large deals with more than 100 million and we had two of them with in the range of 90 plus.

Ravi Kumar Singisetti: In fact, all five of them actually had expansion in new business in the mix. So we are again very pleased about how the amount of work we are getting, which is new and expansion, is increasing. Of course, the duration of deals is also increasing. On the higher end, I mean the larger deals, about $50 million, the duration is increasing. While it creates stickiness, it also creates a little bit of a tail on when the revenue is going to be realized as we go forward. Okay, I appreciate that detail.

Speaker Change: In fact, all five of them actually had expansion in new business.

Speaker Change: in the mix. So we are again very pleased about how the amount of work we're getting which is new and expansion is increasing. Of course the duration of deals is also increasing.

Jatin Pravinchandra Dalal: On the higher end, I mean the larger deals, about $50 million, the duration is increasing. While it creates stickiness, but it also creates a little bit of a tail on when the revenue is going to be realized as we go forward.

Ravi Kumar: While it creates stickiness, it also creates a little bit of a tale on when the revenue is going to be realized as we go forward.

Brian Bergen: Okay, I appreciate that detail.

Jatin Pravinchandra Dalal: And then my follow-up on Belkin, so understanding you're still waiting to close the deal, I believe you mentioned it was estimated to be about 40 bps of a margin headwind and then some revenue synergies over three years. Can you detail the kind of the transitory costs, the deal costs in that 40 bps versus the structural margin of Belkin? And then just any further detail on kind of how you thought about the phasing of the $100 million plus revenue synergies over three years?

Jatin Dalal: And then my follow-up on Belkin, so understanding still waiting to close the deal, believe you mentioned it was estimated to be about 40 bits of a margin headwind and then some revenue synergies over three years. And you detail kind of the transitory costs, the deal costs and that 40 bits versus the structural margin of Belkin and then just any further detail on kind of how you get thought about the phasing of the 100 million plus revenue synergies over three years. Yeah, so we, I mean, the numbers that you mentioned are accurate: 40 basis points of margin dilution and the synergy numbers.

Speaker Change: Okay, I appreciate that detail. And then my follow-up on Belkin, so understanding you're still waiting to close the deal. I believe you mentioned it was estimated to be about 40 bps of a margin headwind and then some revenue synergies over three years. Can you detail kind of the transitory costs, the deal costs in that 40 bps versus the structural margin of Belkin? And then just any further detail on kind of how you thought about the phasing of the $100 million plus revenue synergies over three years?

Jatin Pravinchandra Dalal: Yeah, so the numbers that you mentioned are accurate, 40 basis points of margin dilution and the synergy numbers. We will share a more detailed update on Belkin on closing, including making sure that our guidance then reflects the Belkin acquisition for the rest of the year. There is no new data point or update to the numbers that we have shared before at this juncture. Thank you. Our next question comes from Jonathan Lee with Guggenheim Partners. Please proceed. Great, thanks for taking my question. I understand some of the efficiency gains you're seeing, but how much room do you have, Hot?

Speaker Change: Yeah, so, uh, so we...

Speaker Change: The numbers that you mentioned are accurate, 40 basis points of margin dilution and the synergy numbers.

Jatin Dalal: We will share a more detailed update on Belkin on closing, including making sure that our guidance and reflects the Belkin acquisition for the rest of the year. There is no new or a new data point or update to the numbers that we have shared before at this juncture.

Speaker Change: We will share a more detailed update on Belkin on closing, including making sure that our guidance then reflects the Belkin acquisition for the rest of the year. There is no new data point or update to the numbers that we have shared before at this juncture.

Jatin Pravinchandra Dalal: Thank you.

Jonathan Lee: Our next question comes from a line of Jonathan Lee with Guggenheim Partners. Please proceed with your question.

Jatin Pravinchandra Dalal: Thank you.

Speaker Change: Our next question comes from the line of Jonathan Lee with Guggenheim Partners. Please proceed with your question.

Jonathan Lee: Great. Thanks for taking my questions and appreciate the insight here.

Jonathan Lee: Understand some of the efficiency gains you're seeing, but how much room do you have in utilization before perhaps runs too hot? And how are you thinking about pace of hiring for the remainder of the year, particularly as you look to supports and the deal and pipeline.

Jonathan Lee: Great, thanks for taking my questions and I appreciate the insight here.

Jonathan Lee: I understand some of the efficiency gains you're seeing, but how much room do you have in utilization before it perhaps runs too hot? And how are you thinking about pace of hiring for the remainder of the year, particularly as you look to support some of the deal wins in pipeline? Additionally, any call-outs here around competition for talent, given the higher attrition you saw?

Jatin Dalal: Additionally, any call out here around competition for talent given the higher tuition you saw.

Jatin Dalal: So, you know, this is Jatin, and I'll go first, and I'll request Ravi to add. I think so far, we are seeing stability in the talent marketplace. It is reflected in our attrition. We are seeing sufficient availability of the talent that we need to hire for the specific skill set that we need to hire from the marketplace.

Jatin Pravinchandra Dalal: And how are you thinking about the pace of hire? Additionally, any call-outs here around competition for talent, given the higher attrition you saw? So, you know, this is Jatin, and I'll go first, and I'll request Ravi to add.

Speaker Change: Yep.

Jatin Pravinchandra Dalal: I think so far we are seeing stability in the talent marketplace. It is reflected in our attrition rate. We are seeing, you know, sufficient availability of the talent that we need to hire for the specific skill sets that we need to hire from the marketplace. There will always be a couple of skill sets that are more hot or difficult to find than others.

Speaker Change: So, you know, this is Jatin and I'll go first and I'll request Ravi to add. I think so far we are seeing stability in the talent marketplace.

Ravi Kumar Singisetti: It is reflected in our attrition.

Ravi Kumar Singisetti: We are seeing, you know, sufficient availability of the talent that we need to hire for the specific skill set that we need to hire from the marketplace.

Jatin Dalal: There will always be couple of skill sets which are more hot or difficult to find than others, but on an aggregate basis, I think we still have a reasonably good market for talent as we look at the second half of the year. Was there a first part of the question as well, Jonathan?

Ravi Kumar Singisetti: There will always be a couple of...

Jatin Pravinchandra Dalal: But on an aggregate basis, I think we still have a reasonably good market for talent as we look at the second half of the year. And on the very first part of the question as well. Jonathan

Ravi Kumar Singisetti: skill sets which are more hot or difficult to find than others but on an aggregate basis I think we still have a reasonably good market for talent as we look at the second half of the year.

Ravi Kumar Singisetti: For the very first part of the question as well, Jonathan,

Jatin Dalal: It was more about the room you have in utilization before it perhaps runs too hot. I think we still have some headspace for sure as we exit quarter to certainly not as I mean it's the headspace we have continued to sort of utilize.

Jatin Pravinchandra Dalal: It was more about the room you have. I think we still have some headspace, for sure, as we exit quarter two, certainly not as much as – I mean, it's the headspace we have continued to sort of utilize, and this is the third quarter of improvement in utilization, so we are continuing to improve it. We have some space, but I wouldn't say it's a significant amount of space, and we are managing the supply chain with that visibility of headspace and the demand which is coming into the door, and we are confident that we'll be able to manage the demand and supply chain equation well as we execute through the second half. Yeah, so just to add some more color Jonathan on this.

Jonathan Lee: It was more about the room you have in utilization before it perhaps runs too hot.

Ravi Kumar Singisetti: I think we still have some headspace for sure as we as we exit quarter two. Certainly not as, I mean, it's the headspace we have continued to sort of utilize and

Ravi Kumar: And this is the third quarter of improvement utilization. So, we are continuing to improve it. We have some space I wouldn't say it's a it's a it's a significant space. And we are we are managing the supply chain with that visibility of headspace and the demand which is coming into the door. And we are confident that we'll be able to manage the demand and supply chain equation well as we execute to the second half. of the year.

Speaker Change: This is the third quarter of improvement utilization, so we are continuing to improve it. We have some space. I wouldn't say it's a significant space. And we are managing the supply chain with that visibility of headspace and the demand which is coming into the door. And we are confident that we'll be able to manage the demand and supply chain equation.

Ravi Kumar: Yeah, so just to add some more color, Jonathan, on this, we are now at a spot where we have significant attractiveness in the market for employees to join us. I mean our momentum in the market also also allows us gives us the ability to hire. We also have returners.

Speaker Change: well as we execute to the second half of the year.

Ravi Kumar Singisetti: We are now at a spot where we have significant attractiveness in the market for employees to join us. I mean, you know, our momentum in the market also gives us the ability to hire. We also have returners.

Ravi Kumar Singisetti: We are now at a spot where

Ravi Kumar Singisetti: We have significant attractiveness in the market for employees to join us.

Ravi Kumar Singisetti: I mean, our, you know, our momentum in the market.

Ravi Kumar Singisetti: also allows us, gives us the ability to hire.

Ravi Kumar Singisetti: In fact, we have a historic return of returners, as I call it. I mean, people coming back who worked at Cognizant before. And our fulfillment engine is a combination of four things: freshers, rotating talent inside the company, re-skilling from the adjacencies, and Hiring Lateral Talent. All four, I think we are getting better and better and better over the last 18 months.

Ravi Kumar: In fact, we have a historic return of returners, as I call it. I mean it is people coming back who worked at Ferguson before, and our fulfillment engine is a combination of four things: pressures, rotating talent inside the company, re-skilling from the adjacencies, and hiring lateral talent. All four, I mean we are getting better and better and better since the last 18 months. So we are getting up for a high demand situation whenever, but we are going to be prepared for it. Our two big industries, financial services and healthcare, together is 60% of our business.

Speaker Change: We also have returners. In fact, we have a historic return of returners, as I call it. I mean, it is people coming back who worked at Cognizant before.

Speaker Change: And our fulfillment engine is a combination of four things, freshers,

Speaker Change: rotating talent inside the company, re-skilling from the adjacencies.

Speaker Change: and Hiring Lateral Talent. All four, I think we are getting better and better and better since the last 18 months.

Ravi Kumar Singisetti: So we are gearing up for a high-demand situation whenever it occurs, but we're gonna be prepared for it. Our two big industries, financial services and healthcare, together make 60% of our business. They're both in great shape, in a good spot.

Speaker Change: So, we are gearing up for a high demand situation whenever, but we are going to be prepared for it. Our two big industries, financial services and healthcare, together is 60% of our business.

Ravi Kumar: They're both great in a good spot. So that gives us confidence. I mean these were two verticals where cognizance, legacy, and heritage was so strong. So we are back on those two verticals with a good positive momentum.

Ravi Kumar Singisetti: So that gives us confidence. I mean, these were two verticals where Cognizant's legacy and heritage was so strong. So we are back on those two verticals with a good, positive momentum there. You know, how should we think about... How do you think about the pyramid structure around staff? Yeah, so, you know, large deals, and Jatin, and Chipin as a complete, large deals always have an upfront cost and downstream revenue kind of a thing because you do transition, and you know, a lot of these are Vendor Consolidation, Cost Optimization kind of deals, so you will have to invest in transition and everything else. So, you know, there is lumpiness in how that works. But we now have the muscle to execute them pretty well. We have done this for 18 months now.

Speaker Change: They're both in a great, in a good spot. So that gives us confidence. I mean, these were two verticals where Cognizant's legacy and heritage was so strong. So we are back on those two verticals with a good, positive momentum.

Ravi Kumar: Thanks for the love that you look there.

Jatin Dalal: How should we think about potential restabilization around large yield project margin, especially given some of the elongation of the duration in these large deals? How do you think about pyramid structure and staffing in these large deals? Yeah, so you know large deals and chip in as I complete. Large deals always have an upfront cost and a downstream revenue kind of a thing because you do transition, and you know a lot of these are vendor consolidation, cost optimization kind of deals. So you will have to invest on transition and everything else. So you know there is lumpiness on how that works, but we have now muscle to you know execute them pretty well.

Speaker Change: Thanks for the lovely details there. How should we think about potential for stabilization around large-deal project margin, especially given some of the elongation of the duration in these large deals? And how are you thinking about pyramid structure around staffing these large deals?

Speaker Change: Yeah, so, you know, large deals, and Jatin, and Chipin as a complete, large deals always have...

Speaker Change: and you know

Speaker Change: upfront cost and a downstream revenue kind of a thing because you do transition and you know a lot of these are vendor consolidation, cost optimization kind of deals so you will have to invest on transition and everything else.

Speaker Change: So, you know, there is lumpiness on how that works.

Speaker Change: But we have now muscle to execute them pretty well. We have done this for 18 months now. We've been on a cycle of winning and delivering to large deals, so we're very confident of...

Ravi Kumar: We have done this for 18 months now. We've been on a cycle of winning and delivering to large deals. So we're very confident of continuing on that process. We are not only doing this on application services now, which was the heritage and the historic muscle of Cognizant. We are doing it in BTO in infrastructure services, and now we're starting to see good traction in ERND. As Belkan comes in subsequently, we will hopefully, as it gets close, we'll hopefully have more of it as well. So it's a much more comprehensive breadth of capability and a breadth of large deals which we are executing on.

Ravi Kumar Singisetti: We've been on a cycle of winning and delivering large deals, so we're very confident of continuing that process. We are not only doing this on application services now, which was the heritage and the historic muscle of Cognizant, but we are doing it for BPO, and Infrastructure Services.

Speaker Change: continuing on that process.

Speaker Change: We are not only doing this on application services now.

Speaker Change: which was the heritage and the historic muscle of Cognizant. We are doing it in BTO and infrastructure services, and now we're starting to see good traction.

Ravi Kumar Singisetti: And now we're starting to see good traction in ER&D, and as Belcat comes in, subsequently, we will hopefully, as it gets closed, we'll hopefully have more of it as well. So it's a much more comprehensive breadth of capability and a breadth of large deals which we are executing on. We are competing in the market, and the levers to compete are not just arbitrage on labor. The levers to compete are also productivity levers powered by automation and AI. And I think we are ahead of the curve. That's one of the reasons why we're winning more.

Speaker Change: in ER&D and as Belcan comes in subsequently we will hopefully as it gets close we'll hopefully have more more of it as well. So it's a much more comprehensive breadth of capability and a breadth of large deals which we are executing on.

Ravi Kumar: We are competing in the market, and the levers to compete are not just arbitrage on labor. The levers to compete are also productivity levers powered by automation and AI, and I think we are out of the curve. That's why the reasons why we're winning more. It is a wallet share which we are picking up from up here.

Speaker Change: We are competing in the market and they leave us to compete.

Speaker Change: are not just arbitrage on labor. The levers to compete are also productivity levers powered by automation and AI. And I think we are ahead of the curve. That's one of the reasons why we're winning more. It is a wallet share which we are picking up from our peers.

Jatin Pravinchandra Dalal: It is a wallet share which we are picking up from our peers. I think the only additional color is that there are two ways of looking at a large deal, sort of for dynamics or financials. One way is that they initially do come with lower margins, but if you see the construct of a large deal, they are typically fixed price projects over a long-term period, which means your ability to improve the overall pyramid into the company, deploy gen-Cs, as we call them internally, or fresh talent at the bottom of the pyramid is much better.

Jatin Dalal: I think the only additional color is there are two ways of looking at a large deal sort of dynamics or financials. One way is that they initially do come with lower margins, but if you see the construct of a large deal, they are typically fixed price projects over a long term period, which means your ability to improve overall pyramid into the company, deploy Gencies as you call them internally, or fresh talent at the bottom of the pyramid is much better. Your ability to execute on your automation goal is far superior in a larger program. So overall, the second way of looking at a large deal is that you can really push the envelope of efficiency and productivity much better than what you would be able to do in a time in material construct.

Speaker Change: I think the only additional color is, there are two ways of looking at a large deal, sort of dynamics or financials. One way is that they initially do come with lower...

Speaker Change: Margins, but if you see the construct of a large deal, they are typically fixed-price projects over a long-term period, which means your ability to improve...

Speaker Change: overall pyramid into the company, deploy.

Speaker Change: Gen Z's as we call them internally or fresh talent at the bottom of the pyramid is much better. Your ability to execute on your automation goal is far superior in a larger program.

Jatin Pravinchandra Dalal: Your ability to execute on your automation goal is far superior in a larger program. So overall, the second way of looking at a large deal is that you can really push the envelope of efficiency and productivity much better than what you would be able to do in a time and material construct. So it also has a positive angle to it as the deal matures. Thank you. Our next question comes from the line... Rod Bourgeois with Deep Dive.

Speaker Change: So overall, the second way of looking at a large deal is that you can really push the envelope of efficiency and productivity much better than what you would be able to do in a time and material construct. So it has also a positive angle to it as the deal matures.

Jatin Dalal: So it has also a positive angle to it as a deal measures.

Jatin Dalal: I always appreciate the color. Thank you, guys.

Jatin Dalal: Thank you.

Speaker Change: Always appreciate the color. Thank you, guys.

Rod Bourgeois: Our next question comes in line of Rod Bourgeois with Deep Dive Equity Research.

Speaker Change: Thank you. Our next question comes from the line of Rod Bourgeois with Deep Dive Equity Research. Please proceed with your question.

Rod Bourgeois: Please proceed with your question. Okay, great.

Operator: Okay, great. Hey, Ravi, a couple of big picture questions. Over the last year and a half, you've been in a turnaround situation while also wrestling with a cyclical downturn in demand. You've definitely made progress on shoring up talent and the culture, and you're now winning these large deals. I just wanted to see if you could now speak to your main goals for the next phase of Cognizant's improvement process. Rod, thank you for that.

Ravi Kumar: Hey, Robbie, a couple of big picture questions. Over the last year and a half, you've been in a turnaround situation while also wrestling with a cyclical downturn in demand. You've definitely made progress on showing up talent in the culture, and you're now winning these large deals.

Rod Bourgeois: Okay, great. Hey, Ravi, a couple of big-picture questions.

Rod Bourgeois: Over the last year and a half, you've been in a turnaround situation while also wrestling with a cyclical downturn in demand.

Rod Bourgeois: You've definitely made progress on shoring up talent and the culture and you're now winning these large deals. I just wanted to see if you can now speak to your main goals for the next phase of Cognizant's improvement process.

Ravi Kumar: I just wanted to see if you can now speak to like your main goals for the next phase of cognizance improvement process. Rod, thank you for that question. You know, I've always been a believer of layering performance and change. So for the first 18 months I've been constantly making changes and generating, you know, performance and using the performance to make more change. At the end of the first year, we bought a company called Thadera, and that was the time I started to believe that performance and change, as you layer it. You also start to get the license to do some big bets, big, big, some big bets.

Ravi Kumar Singisetti: For that question, you know, I've always been a believer in layering performance and change. So for the first 18 months, I was constantly making changes and generating performance, and using the performance to make more change. At the end of the first year, we bought a company called Thadera. And that was the time I started to believe that.

Rod Bourgeois: Rod, thank you for that for that question you know

Rod Bourgeois: I've always been a believer of layering performance and change.

Rod Bourgeois: So, for the first 18 months, I've been constantly...

Speaker Change: making changes and generating, you know, performance and using the performance to make more change.

Speaker Change: At the end of first year, we bought a company called Thadera.

Ravi Kumar Singisetti: Performance and Change As you layer it, you also start to get the license to do some big bets, big, big, some big bets. So we made that big bet of buying Thadera, which is the single largest service now standalone. And right now, we're probably one of the top two players in ServiceNow in the market, and I'm very confident that the journey will continue and in the first half of this year. We started to think that we, you know, our business has four vectors, as I said, tech services, and BPO. Infrastructure-led services, which is security, cloud, everything put together, and ER&D.

Speaker Change: And that was the time I started to believe that

Speaker Change: Performance and Change as you layer it.

Speaker Change: You also start to get the license to do some big bets, some big bets.

Ravi Kumar: So we made that big bet of buying Thadera, which is the single largest ServiceNow standalone company. And right now we're probably one of the top two players of ServiceNow in the market, and I'm very confident that journey will continue. In the first half of this year, we started to think that we are business as four vectors and tech services, BPO, infrastructure led services, which is security, cloud everything put together and ER and E. We always wanted to take another big bet and look for a different buyer group and look for a different industry muscle, if I may, and we took a bet on Belkan, which gives us the opportunity to be in aerospace and automotive embedded software and engineering research and development, which is a different buyer group.

Speaker Change: So we made that big bet of buying Thedera, which is the single largest service now, stand-alone.

Speaker Change: And right now, they're probably one of the top two players of ServiceNow in the market. And I'm very confident that journey will continue.

Speaker Change: In the

Speaker Change: First half of this year.

Speaker Change: We started to think that, you know, our business has four vectors, as I said, tech services, BPO,

Speaker Change: Infrastructure led services, which is security, cloud, everything put together, and ER&D.

Ravi Kumar Singisetti: We always wanted to take another big bet and look for a different buyer group and look for a different industry muscle, if I may. And we took a bet on Belcan, which gives us the opportunity to be in aerospace and automotive embedded software and Engineering Research and Development, which is a different business group, at any of our clients. And we took a bet because we think that's going to increase the breadth of services and it's going to give us a new vector for growth.

Speaker Change: We always wanted to take another big bet and look for a different buyer group and look for a different industry muscle, if I may.

Speaker Change: And we took a bet on Belcan, which gives us the opportunity to be in aerospace and automotive embedded software, and engineering research and development, which is a different biogroup.

Ravi Kumar: Group in any of our clients. And we took a bet because we think that it's going to increase the breadth of services, and it's going to give us a new vector for growth. So I think I'm going to pay; I'm going to layer the performance and change on a constant basis and keep looking for big bets so that we make this a resilient platform. Remember health care and financial services; we are heavy on it. Now we're going to create muscle on manufacturing industrial automotive aerospace, which is going to be a very different industry vector. We are, you know, we will constantly keep looking for bridging those gaps in new industries and a breadth of capabilities and also expanding internationally as we go forward because we are over indexed on the US.

Speaker Change: in any of our clients and we took a bet because we think that's going to increase the breadth of services and it's going to give us a new vector for growth.

Ravi Kumar Singisetti: So, I think I'm going to pair, I'm going to layer the performance and change on a constant basis and keep looking for big bets so that we make this a resilient platform. Remember, healthcare and financial services. We are heavy on them. Now we're going to create muscle in manufacturing, industrial, automotive, and aerospace, which is going to be a very different industry vector. We are, you know, we will constantly keep looking for bridging those gaps in new industries and a breadth of capabilities and also expanding internationally as we go forward because we are over-indexed on the U.S. So that'll be my goal, to create sustained momentum and create a resilient platform for our employees and our clients. That's very helpful. Thanks for sharing that.

Speaker Change: So, I think I'm going to layer the performance and change on a constant basis and keep looking for big bets so that we make this a resilient platform.

Speaker Change: Remember health care and financial services, we are heavy on it. Now we're going to create muscle on manufacturing, industrial, automotive, aerospace, which is going to be a very different industry vector.

Speaker Change: We are, you know, we will constantly keep looking for bridging those gaps in new industries.

Speaker Change: and a breadth of capabilities and also expanding internationally as we go forward because we are over indexed on the U.S. So that'll be my goal to create a sustained momentum and create a resilient platform for our employees and our clients.

Rod Bourgeois: So, that'll be my goal to create sustain momentum and create a resilient platform for our employees and our clients. Great, that's very helpful. Thanks for sharing that.

Ravi Kumar Singisetti: And maybe I'll change my follow-up, given your answer related to Belcan. One of the questions that we're seeing right now, Cap, Jim, and I recently cited weakened demand in aerospace and automotive. Those are verticals that had been very strong over the last year at most players.

Rod Bourgeois: And maybe I'll change my follow-up given your answer related to Belkan. One of the questions that we're seeing right now, Cap Jim and I recently cited, we can demand an aerospace and automotive. Those are verticals that had been very strong over the last year that most players.

Speaker Change: Great, that's very helpful. Thanks for sharing that and maybe I'll change my follow-up given your answer related to Belkan. One of the questions that we're seeing right now, Cap, Jim and I recently cited

Speaker Change: Weekend Demand in Aerospace and Automotive.

Speaker Change: Those are verticals that had been very strong over the last year at most players. Are you seeing similar trends in aerospace and automotive weakening, or is that not really a concern, especially as you onboard the Bellcam business?

Ravi Kumar: Are you seeing similar trends in aerospace and automotive weakening, or is that not really a concern, especially as you onboard the Belkan business? That's a great question. You know, organically we are seeing strength in automotive. Our pivot on Belkan is very simple. We think the next decade is going to be about digitizing everything physical. So, we believe the industry is like, you know, manufacturing industry, a lot of more of aero. If you pivot into services which are embedded software, pivot into services which are digital in nature, there's significant headroom, and there is, you know, there is very little spent in the last 10 years, and therefore, I think the next 10 years are going to be much better.

Ravi Kumar Singisetti: Are you seeing similar trends in aerospace and automotive weakening, or is that not really a concern, especially as you onboard the Belcan business? Well, that's a great question. You know, organically, we are seeing strength in the automotive sector. Our pivot on Belcan is very simple. We think the next decade is going to be about digitizing everything physical. So we believe the industry is like, you know, manufacturing, industrial, automotive, and vehicle. If you pivot into services which are embedded software, pivot into services which are digital in nature, there's significant headroom, and there is, you know, very little spent in the last 10 years, and therefore, I think the next 10 years are going to be much better.

Speaker Change: Well that's a great question. You know, organically we are seeing strength in automotive. Our pivot on Belcan

Speaker Change: It's very simple. We think the next decade...

Speaker Change: is going to be about digitizing everything physical.

Speaker Change: If you pivot into services which are embedded software, pivot into services which are digital in nature, there is significant headroom and there is...

Ravi Kumar: So, therefore, I actually believe there is more space and more room for us. You know, our concentration is very high in healthcare and financial services. So, this actually, you know, this actually gives us much a very different industry vertical, but it also gives us an opportunity to bring technology closer to the physical, the physical manifestation of this industry. So, that thesis of mine still holds. And I think with AI in the mix now, I actually believe, you know, the offerings we will now present to that industry segment are going to be as contemporary, and therefore, we will continue to flourish.

Ravi Kumar Singisetti: So, therefore, I actually believe there is more space and more room for us. Our concentration is very high in healthcare and financial services, so this actually gives us a very different industry vertical, but it also gives us an opportunity to bring technology closer to the physical manifestation of these industries. That thesis of mine still holds.

Speaker Change: Our concentration is very high in healthcare and financial services, so this actually gives us a very different industry vertical, but it also gives us an opportunity to bring technology closer to the industry.

Ravi Kumar Singisetti: And I think with AI in the mix now, I actually believe the offerings we will now present to that industry segment are gonna be as contemporary and, therefore, will continue to flourish. So that's my thesis when I looked at Belcan, and that would be the thesis; it would remain with me even now. Great, thank you.

Speaker Change: That thesis of mine still holds.

Speaker Change: And I think with AI in the mix now.

Speaker Change: I actually believe, you know, the offerings we will now present to that industry segment are going to be as contemporary, and therefore...

Ravi Kumar: So, that's my thesis when I looked at what I can and that would remain; that would be the thesis that it would remain with me even now.

Speaker Change: will continue to flourish. So that's that's my thesis when I when I looked at Belcan and that would that would remain that would that would be the thesis that it would remain with me even now.

Ravi Kumar: Great, thank you. Thank you.

Operator: Thank you. Our next question comes from the line of James Faucette with Morgan Stanley. Great. Thank you so much. Appreciate all the color.

James Fawcetti: Our next question comes from the line of James Fawcetti with Morgan Stanley. Please proceed with your question.

Speaker Change: Great, thank you.

Speaker Change: Thank you. Our next question comes from the line of James Faucette with Morgan Stanley . Please proceed with your question.

James Fawcetti: Great. Thank you so much. Appreciate all the color. Encouraging to see the turn-in in the financial services and market, etc. And it seems like we've heard some other things from others.

James Eugene Faucette: Great. Thank you so much. Appreciate all the color. Encouraging to see the turn in in the financial services.

Operator: It's encouraging to see the turn in, financial services, and the market, etc. It seems like we've heard some of the things from others. Kind of wondering what your visibility is on that part of your end market base and what the nature of the work is that you're doing now versus before it kind of turned down, and if that's changed at all. You know, Financial Services. We've been working on it since 2023. 2023, we stabilize the teams; we ensure that the leaks we had are gone.

Speaker Change: and Market, et cetera. And it seems like we purchased a lot of things from others.

Ravi Kumar: I wonder what your visibility is on that part of your end market base, and what the nature of the work is that you're doing now, say, versus before it kind of turned down, and if that's changed at all.

James Eugene Faucette: Kind of wondering what your visibility is on that part of your end market base and what the nature of the work is that you're doing now versus before it kind of turned down and if that's changed at all.

Ravi Kumar: You know, financial services, we've been working on it since 2023. 2023, we stabilized the teams; we ensured that the leaks we had, we were on the other side. I mean, when consolidation happened, we lost business in 2022. We now are gaining market share when there is consolidation. And we did a very good job of leading that vertical with industry solutions. So that helped us to pivot into some of the small discretionary spend, which is coming back to, you know, we valid behind it. So the industry solution approach, a stable team, walking the corridors to actively pitch for value-led work, breadth of capability now.

Speaker Change: You know...

Speaker Change: Financial services, we've been working on it since 2023. 2023, we stabilized the teams.

Ravi Kumar Singisetti: I mean, when consolidation happened, we lost business in 2022. But we are now gaining market share when there is consolidation. And we did a very good job of leading that vertical with industry solutions. So that helped us to pivot into some of the small discretionary span, which is. Coming back to, you know, we rallied behind it.

Speaker Change: We ensured that the leaks we had, we were on the other side. I mean, when consolidation happened, we lost business in 2022. We now are gaining market share when there is consolidation.

Speaker Change: coming back to you know be valid behind it. So the industry solution approach is stable team, walking the corridors, proactively pitching for value-led work.

Ravi Kumar Singisetti: So the industry solution approach, a stable team, walking the corridors, proactively pitching for... value-led work, breadth of capability now. I mean, you know, we are no longer a tech services firm. We have a breadth of capability. All of that has helped us to stabilize financial services. Of course, there's going to be variability quarter to quarter, but we feel confident about the fact that each one of those sub-segments underneath it is in good shape.

Ravi Kumar: I mean, you know, we are no longer a tech services firm; we have a breadth of capability. All of that has helped us to stabilize financial services. Of course, there's going to be variability quarter to quarter, but we feel confident about the fact that each one of those sub segments underneath it are in good shape. Our business in America's and banking has sequentially done pretty well for two quarters in a row. So now we are starting to progressively take that, take the same template to the international market so that we could replicate that success.

Speaker Change: We are no longer a tech services firm, we have a breadth of capability.

Speaker Change: All of that has helped us to stabilize financial services. Of course, there's going to be variability quarter on quarter.

Speaker Change: But we feel confident about the fact that each one of those sub-segments underneath it are in good shape.

Ravi Kumar Singisetti: Business in America and banking have sequentially done pretty well for two quarters in a row. So now we are starting to progressively take the same template to the international market so that we can replicate that success.

Speaker Change: Business in America and banking has sequentially done pretty well for two quarters in a row.

James Eugene Faucette: So...

James Eugene Faucette: Now we are starting to progressively take the same template to the international market so that we could replicate that success.

James Fawcetti: Got it.

Ravi Kumar Singisetti: And then, You know, back on Gen AI, I'm just wondering if you're seeing those projects crowd out other consulting priorities, and if so, which ones? Or are we still, as you suggested, still so early before moving to full production implementation of Gen AI projects that it's not really having much of an impact? That's a very good question.

James Fawcetti: Appreciate that.

Ravi Kumar: And then, you know, back on Gen AI, I'm just wondering if you're seeing those projects crowd out other consulting priorities and so which ones. Or are we still, as you suggested, still so early before moving the full production implementation of AI, Gen AI projects that it's not really having much of an impact.

Speaker Change: Got it. Appreciate that. And then, you know, back on Gen AI, I'm just wondering if...

Speaker Change: You're seeing those projects crowd out other consulting priorities, and if so, which ones? Or are we still, as you suggested, still so early before moving to full production implementation of Gen AI projects that it's not really having much of an impact?

Ravi Kumar: That's a very good question. In fact, I agree with you that a lot of the consulting dollars are getting diverted to generative AI.

Ravi Kumar Singisetti: In fact, I agree with you that a lot of the consulting dollars are getting diverted to generative AI. I mean, all the way from business case creation to governance to, you know, some companies are reorganizing their, you know, I know companies which are now saying we need to reestablish an enterprise 2.0 so that process and technology can be together, and it could be a distributed networked organization versus a hierarchical setup. So lots of organizational change and experimentation is actually led by generative AI. So some of the discretionary budget is getting diverted there.

Speaker Change: That's a very good question. In fact, I agree with you that a lot of the consulting dollars are getting diverted to generative AI. I mean, all the way from business case creation to governance to

Ravi Kumar: I mean, all the way from business case creation to governance to, you know, some companies are reorganizing their, you know, I know companies which are now saying, we need to reestablish an enterprise 2.0 so that process and technology can be together and it could be a distributed networked organization versus a hierarchical setup. So lots of organizational change and experimentation is actually led by generative AI. So some of the discretionary is getting diverted there. But these are small prototypes, and as you finish the prototypes, you start to see the model next to take it to production.

Speaker Change: Some companies are reorganizing their, you know, I know companies which are now saying...

Speaker Change: We need to re-establish an enterprise 2.0 so that process and technology...

Speaker Change: can be together and it could be a distributed networked organization versus a hierarchical setup.

Speaker Change: So, lots of organizational change and experimentation is actually led by generative AI. So, some of the discretionary is getting diverted there.

Ravi Kumar Singisetti: But these are small prototypes, and as you finish the prototypes, you start to see the bottlenecks to take them to production. The good news is, at least, you know, you start to know what the bottlenecks are, and then you start to work on them, and then you take them to production grade. I have at least, you know, some projects which have started to go to production grade.

James Eugene Faucette: But these are small prototypes, and as you finish the prototypes, you start to see the

Ravi Kumar: The good news is at least, you know, you start to know what the bottlenecks are, and then you start to work on it, and then you take them to production grid. I have at least, you know, some projects which have started to go production grid. I've mentioned it in my earnings, which is, you know, a pharmaceutical company, you know, taking gender way for drug development and ensure to use General AI to support claims which come in, which need to be corrected, because, you know, there are either fields which have not been filled up or there are clarifications.

James Eugene Faucette: model next to take it to production. The good news is at least, you know, you start to know what the bottlenecks are and then you start to work on it and then you take them to production grade. I have at least

Ravi Kumar Singisetti: I mentioned it in my earnings, which is... a pharmaceutical company, you know, taking Genova AI for drug development, and Insurer, using generative AI to support claims which come in, which need to be corrected because, you know, there are either fields which have not been filled up or, or there are clarifications. So I think at a task level, we are starting to see this go forward. The productivity studies we did in 2023 also helped us to put the business case together.

James Eugene Faucette: you know some some projects which have started to go production grade I've mentioned it in in my in my earnings which is

James Eugene Faucette: you know, a pharmaceutical company, you know, taking Genu-AI for drug development, an insurer.

James Eugene Faucette: using generative AI to to support claims which come in

James Eugene Faucette: which need to be corrected because there are either fields which have not been filled up or there are clarifications. So I think at a task level, we are starting to see this go forward.

Ravi Kumar: So, I think at a task level, we are starting to see this go forward.

Ravi Kumar: The productivity studies we did in 2023, that helped us also to put the business case up. So, you know, we've seen in health care, in one of my clients, we have done auto adjudication of claims better using General AI. So, the ability to make this a very outcome centric business case will allow us to take this to more production and great work, and the ability to continue to look for new use cases will help us to build the pipeline as the old ones matured.

James Eugene Faucette: The productivity studies we did in 2023 that helped us also to put the business case up. So, you know, we've seen in healthcare in one of my clients we have done auto adjudication of claims better using generative AI.

Ravi Kumar Singisetti: So, you know, in healthcare, at one of my clients, we've done auto adjudication of claims better using Gen2AI. So, the ability to make this a very outcome-centric business case will allow us to take this to more production-grade work, and the ability to... Continue to look for new use cases will help us to build a pipeline as the old ones mature. Great. I appreciate all that color.

James Eugene Faucette: So, the ability to make this a very outcome-centric business case will allow us to take this to more production-grade work and the ability to...

James Eugene Faucette: continue to look for new use cases will help us to build a pipeline as the old ones mature.

James Fawcetti: We appreciate all that covered.

James Fawcetti: Thank you.

Speaker Change: Great. I appreciate all that color.

Operator: Our next question comes from the line of Tien-Hsien Huang with JPL. Hey, thanks so much. I just wanted to follow up on your answer to Bryan's, I think, question on bookings. Ravi, you mentioned duration. I always ask you, but I'd love to hear your updated thoughts on just the ACV versus TCV dynamic. Has that changed, improved, or worsened? And then also on incremental bookings, where is the work coming from? Is it new work or taken away from other vendors? Has that happened to you?

TN Sins Wang: Our next question comes from the line of TN Sins Wang with JP Morgan.

Speaker Change: Thank you. Our next question comes from the line of Tianxin Huang with J.P. Morgan. Please proceed with your question.

TN Sins Wang: Please proceed with your question. Hey, thanks so much. I just want to follow up on your answer to Brian's, I think, question on bookings. Ravi mentioned duration.

Tianxin Huang: Hey, thanks so much. I just wanted to follow up on your answer to Bryan's, I think, question on bookings.

TN Sins Wang: I always ask you, but I love to hear your updated thoughts on just the ACV versus TCV dynamic. Has that changed, improved, worsened, and then also on incremental bookings? Where is the work coming from? Is it new work or take away from other vendors? Has that changed at all in terms of sourcing deals?

Tianxin Huang: Ravi, you mentioned duration. I always ask you, but I'd love to hear your...

Tianxin Huang: updated thoughts on just the ACV versus TCV dynamic. Has that changed, improved, worsened? And then also on incremental bookings, where is the work coming from? Is it new work or take away from other vendors? Has that changed at all in terms of sourcing deals? Thanks.

Ravi Kumar Singisetti: Has anything changed at all in terms of sourcing deals? Thanks. Yeah, sure. So I think fundamentally, not much change in ACV, as you can imagine, with the deal duration going up from one point. I mean, over the longer term, it has to reflect a slightly slower growth in ACV, and that dynamics continue. However, we are clearly winning market share as we execute every quarter. So the deals that are ramping up, or the deal announcements that we have done, are really a reflection of new work that Cognizant is getting. Sometimes in new accounts but also in many accounts where we were present, but we were not addressing that segment of work with our customers.

Jatin Dalal: Thanks.

Jatin Dalal: Yes, sure.

Jatin Dalal: So, I think fundamentally not much change in ACV as you can imagine. With the deal duration going up from one point or longer term, it has to reflect in a slightly lower growth growth in ACV, and that dynamics continue. However, we are clearly winning market share as we execute every quarter. So, the deals that are ramping up or the deal announcement that we have done are really a reflection of new work that Cognizant is getting. Sometimes in new accounts, but also in many accounts where we were present, but we were not addressing that segment of the work with our customer.

Ravi Kumar Singisetti: Yeah, sure. So I think fundamentally not much change in ACV as you can imagine with the deal duration going up from one point, I mean, over longer term, it has to reflect in a slightly slower growth in ACV and that dynamics continue.

Tianxin Huang: However, we are clearly winning.

Tianxin Huang: Marketshare in as we execute every quarter. So that the deals that are ramping up or the deal announcement that we have done are really reflection of new work that Cognizant is getting

Tianxin Huang: sometimes in new accounts but also in many accounts where we were present but we were not addressing that segment of the work with our customer.

Jatin Dalal: There's also a combination of new logos, expansion, and new work, and I can certainly tell you that the new work is outpacing the renewals, at least in 2024. I heard that.

Jatin Pravinchandra Dalal: There's also a focus on new logos, so it's a combination of new logos, expansion, and... and new work. And I can certainly tell you that new work is outpacing the renewals, at least in 2020. Right, I heard that loud and clear.

Tianxin Huang: There's also focus on new logos, so it's a combination of new logos, expansion and

Tianxin Huang: and new work and I can certainly tell you that

Tianxin Huang: The new work is outpacing the renewals, at least in 2024.

Jatin Pravinchandra Dalal: Just my quick follow-up on the fourth quarter implied from the guide for the full year, which implies some sequential deceleration. Any call-outs there beyond seasonality? Yes, so you are right. At the midpoint of quarter three performance, it would imply a deceleration in quarter four, but that is really seasonality right now as we see it. Terrific. Thank you for your time.

Jatin Dalal: Thank you for that.

Jatin Dalal: Just my quick follow-up on the fourth quarter implied from the guys for the four year. It implies some sequential deceleration; any callouts there, beyond seasonality? Yes, so you are right.

Speaker Change: All right, heard that loud and clear. Thank you for that. Just my quick follow-up on the fourth quarter implied from the guide for the full year. It implies some sequential deceleration. Any call-outs there beyond seasonality?

Jatin Dalal: It does, at the midpoint of quarter three performance, imply a deceleration in quarter four, but that is really seasonality right now as you see it. Terrific.

Speaker Change: So you are right, it does, at the midpoint of quarter three performance, it would imply a deceleration in quarter four, but that is really seasonality right now as we see it.

TN Sins Wang: Thank you for the time. Thank you.

Speaker Change: Terrific. Thank you for the time.

Dan Dalal: Our next question comes from the line of Dan. Dalal with Mizuo, please proceed with your question.

Operator: Our next question comes from the line of Dan Dolev. Hey guys, very strong results, nice to see that. Can you maybe, the number one question we get from investors right now is like, have we seen the bottom in IT services spend? I mean, this is pretty much what everyone is trying to figure out.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Dan Dolev with Mizuho, please proceed with your question.

Dan Dalal: Hey guys, very strong results. Nice to see that.

Dan Dolev: Hey guys, very strong results, nice to see that.

Dan Dalal: Can you maybe, I mean, the number one question we get from investors right now is like, have we seen the bottom in IT services spend? I mean, this is pretty much what everyone is trying to figure out. Can you maybe make a more general comment from your seat on where we are in the cycle?

Dan Dolev: Can you maybe, I mean the number one question we get from investors right now is like, have we seen the bottom?

Jatin Pravinchandra Dalal: Can you maybe make a more general comment from your seat on where we are in the cycle? Thank you. So, you know, it's a broad question.

Dan Dolev: in IT services spend? I mean, this is pretty much what everyone is trying to figure out. Can you maybe make a more general comment from your seat on where we are in the cycle? Thank you.

Jatin Dalal: Thank you. So, you know, it's a broad question. Let me address it from the context of Cognizant. Clearly, for us, we see a growth as a guidance range that we have given for quarter three. After a decline, sort of a performance for in fact, so certainly we are seeing an uptick and an improvement from where we were. So certainly, there is an uptick in the numbers in the positive growth trajectory as we progress through the year. It's difficult to make a comment on a larger market, as we covered in our prepared remarks. Market still remains uncertain, but clearly there are pockets where there are opportunities, and we are capitalizing on those opportunities as it's been reflected in our BFSI performance.

Speaker Change: So, you know, it's a broad question. Let me address it from the context of Cognizant. Clearly, for us, we see

Jatin Pravinchandra Dalal: Let me address it from the context of Cognizant. Clearly, for us, we see growth as a guidance range that we have given for quarter three after a decline. This sort of performance is fast. So certainly, we are seeing an uptick and an improvement from where we were. Certainly, there is an uptick in the numbers, and in the positive growth trajectory as we progress through the year. It's difficult to make a comment on a larger market, as we covered in our prepared remarks.

Speaker Change: A growth as a guidance range that we have given for quarter 3 after a decline sort of a performance for

Speaker Change: So, certainly, we are seeing an uptick and an improvement from where we were.

Speaker Change: So, certainly, there is an uptick in the numbers in the positive growth trajectory as we progress through the year. It is difficult to make a comment on a larger market, as we covered in our prepared remarks. Market still remains...

Jatin Pravinchandra Dalal: The market still remains uncertain, but clearly, there are pockets where there are opportunities, and we are capitalizing on those opportunities, as has been reflected in our BFSI performance, as has been reflected in our health performance, both of which, our largest sector, we have delivered very strong sequential numbers. Just to add to that, you know.

Speaker Change: uncertain but but clearly there are pockets where there are opportunities and we are capitalizing on those opportunities as it's been reflected in our BFSI performance as has been reflected in our health performance with both of which our largest sector we have delivered very strong sequential numbers

Ravi Kumar: S has been reflected in our health performance with both of which our largest sector we have delivered very strong sequential numbers. Just to add to that, you know, I said this before: we don't see deterioration or improvement. We see the market unchanged, as we call it. However, our execution, our fulfillment rates, and our wind ratios continue to be very strong. So, therefore, we are winning wallet share in a market which has remained unchanged.

Ravi Kumar Singisetti: I said this before; we don't see deterioration or improvement; we see the market unchanged as a whole. However..., our execution, our fulfillment rate, and our win ratios continue to be very strong. So therefore, we are winning wallet share in a market that has remained unchanged.

Speaker Change: Just to add to that, you know.

Speaker Change: I said this before, we don't see deterioration or improvement, we see the market unchanged, as they call it.

Speaker Change: However, our execution, our fulfillment rates

Speaker Change: and our win ratios continue to be very strong. So therefore, we are winning wallet share.

Speaker Change: in a market which has remained unchanged.

Ravi Kumar: Understood. And then maybe a follow-up on Gen AI. I know everyone's talking about this, but would you feel comfortable, I guess at some point, providing dollar value of the scope of the AI projects? You know, we have to keep thinking about what are the right ways to tell the market about generative AI. It's a pervasive technology, and therefore it diffuses into everything we do. And because it is diffusing so fast, you almost want to say you almost don't know what to categorize as Gen AI and what not to categorize as Gen AI. The only thing I can say is this: in this market, you could win using genitive AI; you could increase your wind rates; you could create new deals; you could generate more momentum with your clients.

Ravi Kumar Singisetti: I know everyone's talking about this, but would you feel comfortable, I guess, at some point providing a dollar value for the scope of the AI project? You know, We have to keep thinking about what are the right ways to tell the market about generative AI. It's a pervasive technology, and therefore it diffuses into everything we do, and because it is diffusing so fast.

Speaker Change: Understood. And then maybe a follow-up on Gen AI. I know everyone's talking about this, but would you feel comfortable, I guess, at some point providing dollar value of...

Speaker Change: the scope of the AI projects.

Speaker Change: You know, uh...

Speaker Change: We have to keep thinking about what are the right ways to tell the market about generative AI.

Speaker Change: It's a pervasive technology.

Speaker Change: and therefore it diffuses into everything we do.

Ravi Kumar Singisetti: You almost don't know what to categorize as Gen AI and what not to categorize as Gen AI. The only thing I can say is that in this market, you could win using generative AI; you could increase your win rates, you could create new deals, and you could generate more momentum with your clients. Equally, you could flip it around and use it on your own, own self to disrupt your own, your own development cycles of our team and create productivity which you can share with your clients and then create a flywheel of winnability through it.

Speaker Change: And because it is diffusing so fast...

Speaker Change: You almost don't know what to categorize as Gen AI and what not to categorize as Gen AI.

Speaker Change: The only thing I can say is...

Speaker Change: in this market.

Speaker Change: You could win using generative AI.

Speaker Change: You could increase your win rates, you could create new deals, you could generate more momentum with your clients. Equally, you could flip it around and use it on your own.

Ravi Kumar: Equally, you could flip it around and use it on your own self to disrupt your and development cycles of our teams and create productivity, which you can share with your clients and then create a flywheel of winnability through it.

Speaker Change: own self to disrupt your own your own

Speaker Change: development cycles of our of our teams.

Speaker Change: and create productivity which you can share with your clients and then create a flywheel of winnability through it.

Ravi Kumar Singisetti: So, I mean, right now we are talking about projects which we are doing; we're talking about platforms and how many clients have on board on platforms. The traceability to revenues is, I mean, anybody's guess what you call generative AI as generative AI and what you can't. I mean, today a data modernization project or a cloud modernization project, which we do.

Ravi Kumar: So, right now we are talking about projects which we are doing. We are talking about platforms and how many clients have onboarded on platforms. The traceability to revenues is, I mean, anybody who gets what you call genitive AI and what you can't. I mean, today a data modernization project or a cloud modernization project, which we do because genitive AI is going to be the future, I actually can call it a genitive AI or I can say this is not genitive AI. However, it is creating more momentum because that foundation is needed for genitive AI.

Speaker Change: So, I mean...

Speaker Change: Right now we are talking about projects which we are doing. We are talking about platforms and how many how many clients have on board on platforms.

Speaker Change: The traceability to revenues is, I mean anybody's guess, what you call generative AI as generative AI and what you can't. I mean today a data modernization project or a cloud modernization project, which we do.

Ravi Kumar Singisetti: Because Genitive AI is going to be the future, I can actually call it Genitive AI, or I can say this is not Genitive AI. I love it. It is creating more momentum because that foundation is needed for generative AI. So, I mean, we have to evolve this to an extent where we can communicate to all of you in a much more traceable way. But nobody has found, I mean, you know, nobody seems to have found the right way to do it.

Speaker Change: Because generative AI is going to be the future, I actually can call it as generative AI or I can say this is not generative AI.

Speaker Change: However...

Ravi Kumar: So, I mean, we have to evolve this to an extent where we could communicate to all of you in a much traceable way, but nobody has found the right way to do it. We are trying our best to tell you the traction we have. Fair enough.

Speaker Change: It is creating more momentum because that foundation is needed for generative AI. So, I mean, we have to evolve this to an extent where we could communicate to all of you much in a much traceable way, but nobody has found, I mean, you know, nobody seems to have found a

Ravi Kumar Singisetti: We are trying our best to tell you the traction we have. Fair enough. Great results again. Thank you. Thank you very much. Thank you. There are no further questions. I would like to turn the floor back over to management for a moment. Thank you so much. Thank you for joining us today and looking forward to the next quarter, and thank you for all your support. This concludes today's Cognizant Technology Solutions second quarter 2024 earnings conference call. BF-WATCH TV 2021

Speaker Change: the right way to do it. We are trying our best to tell you the traction we have.

Ravi Kumar: Great results again. Thank you. Thank you very much.

Speaker Change: Fair enough. Great results again. Thank you.

Operator: Thank you. There are no further questions.

Ravi Kumar: I would like to turn the floor back over to the management for closing comments. Thank you so much. Thank you for joining in today and looking forward to the next quarter, and thank you for all your support.

Speaker Change: Thank you very much.

Speaker Change: Thank you. There are no further questions. I would like to turn the floor back over to management for closing comments.

Speaker Change: Thank you so much. Thank you for joining in today and looking forward to the next quarter and thank you for all your support.

Operator: Disconclusives, cognitive, technology solutions, second quarter, 2024, or in his conference call.

Speaker Change: This concludes today's Cognizant Technology Solutions second quarter 2024 earnings conference call. You may now disconnect.

Operator: You may now disconnect.