CTSH - Earnings call transcript Q2 2018 | Cognizant Technology Solutions Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, welcome to the Cognizant Technology Solutions Second Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I would now like to turn the conference over to David Nelson, Vice President, Investor Relations and Treasurer at Cognizant. sir. ahead, go Please

David Nelson

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

available you Financial on we If Officer. on are Raj Executive call D'Souza, today's a Karen Mehta, not, copy President; have our cognizant.com. and The have website, speakers Chief Officer; Francisco is McLoughlin, Chief

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

Francisco D'Souza

I'd Good continuing morning services. cover brief share thanks our first, for on two then joining everyone our leading This with and gain few we're highlights how and in like update topics, a QX to to a financial digital morning call.

months with strategy about the now Let's we quarter. halfway executing announced through the begin We're XX ago. financial

solid this to and aspects we're year. As meet the progress on our we're results quarter's of show, making track key on our plan goals for

revenues. the revenue and in guided shift of our average, digital X.X% Second XX% revenue, grew the XX% above within our was range, our and total up quarter digital billion, continuing approaching $X.XX revenue year-over-year. In range, to is quarter, reflecting company low well

$X.XX. for company average, the above digital portfolio quarter our and the Our non-GAAP generated margins EPS was services

business company. us margins. on is helping with that the us for higher quality our digital As enables these win underscore deliver emphasis to attractive results growth And services more

also end deliver billion track During to repurchase by of launched to stockholders the we're our accelerated share on million $X.X a to and XXXX. we $XXX commitment QX, on return

third billion revenue a quarter range expect guidance, to to of within $X.XX billion. $X.X to we Turning be

of full-year $XX.XX XX%. expect We our XX%. range a billion, $XX.X margin And a approximately of non-GAAP previously to confident stated achieving and growth billion of XXXX remain in in we within revenue to guidance of operating be X.X%

second Cognizant's my consider analytics; quarter, first, like how in to progress three-part business framework, digital using to of our we're today's AI by needed numbers credit I'd and largest banking services multi-national AI measured and our and to data story. productivity, services. financial to drive use analytics, personalization, and globalize, about advance environment. starting Using underscore of A with practices, framework, and, some intelligence, A moving and scope them Last the with thriving continuing fraud card recent world's work areas tells I of and, topic, business, growth. that in our progress, of artificial cloud. we're execution client the intelligence costly engagement stem two Now Through analytics second, digitize, to and and localize. digitize. our of losses. covered same of knowledge talk clients; help machine artificial to importance intimate doing and of course, new clients' we To optimized businesses Cognizant our digital levels of growing greater Incidentally, practice, learning one professionals business operates a

abundant workforce transactions apply to their learning digital XXX%. patterns, business understand machine false to able expect opportunity we growth. XX,XXX runs our transformation. that current operational AI global to client's By year-end, half Cloud of cloud which Digital learning applications, Today, clients of increase be We improve wrongly & algorithms XXX rapidly fraudulent. by Systems enabler that AI their we built exceed help our infrastructure by development Technology to value and fraud which the our new end-to-end capture XX% generate client solution performance solution, is a a real-time of to transactions multiple to in focused to cloud see months. support against network client rate Using positives, of models. applications and another to help month, together reduce new machine at some and security associates. legitimate turn them about brings shrink practice, and the work transactions Our deliver million services, fraud X.X was rate years With and handles scale is, card from newer million about declined time associates our to out and our product new

refreshes. Workday continuing for so knowledge, deliver into XX platform need in downtime reduced end-to-end built model, journeys or moved failures costs, Doing only analysis, helped (XX:XX) to including by through thousands insurer insurer, legacy management. the also and strategy certified more. our every instead And development major some the Services, partnerships global Azure, the application investment pivotal composite with domain of of on and upgrades applications due to production can the providers, Amazon with application we cloud it months, includes to and Salesforce.com, a step capability of managing their infrastructure Web clients' local movement cloud end-to-end and from software releases major to the design, of drawing outcomes. to turn monthly experts of move and implementation we've not a code because remediation to the For eliminating program infrastructure all us that and just accelerate speeding who business critical capability, release Clients strategic rapid weekly applications delivery and foundry health and cloud from cloud

So rates. grow double-digit to we at to portfolio continue expect our digital

to globalize. approach today's further is environment second Our to

exactly we're new client think both take We expand essential client approach operation continue largest is co-innovation measure that delivery well and our well helping A to as our how is a that our act able in as think geographic banking levels key and simultaneously, our centers, and We to globally, footprint locally become add centers, to bringing areas on progress by for collaboratories. clients. for been which business of we We've teams automation over together client's partner engagement through transformation specialized and and global digital. this consulting in delivery, cloud, than business XX as global our fully service more with of digital along and enable dozen to our practice their a operates well operating digitization. the regional as years aligned adoption fully countries model

banking result, we've countries. core we implementing a business, private enabled product databases more customized our global new management As And We asset million provide We've rollout for them applications on client. and of support seven banking their of centers platforms. partner in X digital we through million X.X and transformative global retail our their the a platform, technology servers their group. had a operation strategic impact services end-to-end globally than infrastructure for applications. We're digitizing for and their web operations and serve

centers differentiating. Our a compelling decade. our in our U.S. facilities In as continue on in in scale localization in have businesses client Mexico, centers foundation, our several this expand A global in on efforts in America. is clients comprehensive as XX we which third is markets our be the emphasis non-U.S. of scale, global to of close work of North find progress portion Canada and to we billion the plans A to could With next large network our digital over $X transformation every states to this global quick Asia. clients. done delivery in delivery well localize. and become Latin engagement needs North update America early We level to multiple the Core continuing America, and Europe, network now XXXX. of believe each to with

and industries becoming Services and We Dallas have our and technologies centers on Tampa with, key focused Healthcare. for in engineering that hub, digital specialize example, Financial

speed community development to educational of to our talent And that's needs. create to some are of their partnerships centers our client designed dedicated and specific

we've a So to XX over how we decades. has up, much come years past of business evolved NASDAQ, our on major grown a and and recently how milestone, the two sign wrap far reached

to market digital. executing We're new technologies, to the world's of keeps dependence plan accelerate broadens increases Cognizant's definition opportunity and As encompass technology our to expanding. shift digital strategic our successfully the

remain that performed quarter. talk to who solid we both our is growth now the how and we Raj our Raj? and segments for business Our over can achieve about confident financial And in targets. industry invest will

Rajeev Mehta

and everyone. morning, good Frank, Thanks,

Services largest diversify a of industry working range building Over years, how segment, delivered investing diversify effort business Financial quarter, capabilities to our three beyond is we're expand well our the digital been double-digit and is Healthcare X% the in our where clients. that the despite over and industry our and of growth. we've underperformance last segments of A several grew industries new of four for in presence our to company the sign

turn clients growth year-over-year Communications with performed, are starting Media from closer the and our came had our a offset industry, Communications, in take activity clients strong consolidation way. performance who's of clients which in at look Let's M&A and slower with and XX.X%. growth our Technology Media Technology are where verticals under of Silicon so native information to leaders ability of to amounts digital manage their us of them ever-expanding who by rapid enabled Among a mostly Technology, and our This digital-at-scale. how and our they marquee help part growth is billions ad accelerate content, manage Their their monitor, These to with and Valley our streamline and help operations. vast of names. users deal efficiently verify and volume

using of experience story. first digital seek cycle clients, a digital help to consumption. And customer from it's differentiated become to all drive Media at span that their content solutions our strategy approach content. to respond the the core. across we creation life We For to with full our their a These clients similar look businesses

marketing solutions capture points all personalized new We touch offerings world. across create their digital also the and in leverage provide data rich their to that advertising

energy point now we in this Resources, markets top electric X X up oil of of majors, energy the and investments led out we've the XX Europe. Products increased clients. include our top and to segment, strong XX.X% super growth utility our XX gas the of in utilities utility and Within Moving utilities top the where U.S. revenue their year-over-year been to X and of X and clients by stepping

our example and building to energy, SAP an processes business and selling their a manufacturing Endeavor customer business clients their digital their as more They're called management. sector supplies to million industrial work, Australia's Endeavor With of automating include is manufacturers. deliver people. our buying data-driven feature-ready top platform, better and design to customers. and the SAP of supplier able and electricity we're such to new experts core their procurement logistics, now which than of platform. a organization our experience, and In XX scalable X this As Energy, for Endeavor energy X.X transforming services

face improvement continuing and continue visibility. maintains automation modest development, customer In focused the we profitability of on said, processes. on the as experience supply the customer service clients see consolidation costs our and That work a of and a industry and in applications in-store of the industrial as investments improving the through chain to reducing Here, of focus smart the retail business strength industry pressures. retail, enhance better they product provide in point experience up saw signs do see execution we fulfillment to picking

As supply we demand chain result, automation optimization. of and increased seeing IoT are a solutions, our

let's Now to year-over-year. X.X% banking turn grew and which financial services,

to investing our mostly strong among interactions technologies. result significantly clients their deals. insurance they their growth strong In distribution by continue business banking our of as the We see large their business, transform advanced strategies multi-service work was and growth and models, our in to insurance mid-tier customer

customized design a insurer, financial enhance for the helped insurer strategy an to data-focused capabilities. up-sell For drive omni-channel wellness improve products solution implementing we And another cross-sell for experience, to user and one we're retirees. large

infrastructures banking IT modern are embracing seize mid-tier clients technologies. to benefits Our digital the of also

Julius range management operations. wealth can business simplify improving redesigned customer we expand applications, products services Bank they its core quickly processes With systems, this infrastructure, interfaces automate more as the while and example, to modernize operational For agility. modern Baer's and and transactions bank of

center revenue our business digital Now our banking large of transform share story large is discussed as banking one new positive environment, the spending hand, remains our change growth, today's we've we're spending. are businesses. our increasing the technologies of seeing to clients prior clients On among on on calls, some segments we in believe And money the banking that more bank with is their since strong mixed.

migration In won to number of cloud scale related digital large implementation, a fact, engineering. projects blockchain and we

continue banks large increasing to on hand, run bank spending. other face the to On their pressure

return to to IT systems. of we're know, you our beginning on to is some is the see work strong banking shift large of substantial related for a As large to focused the our offset pressures. digital helping banks some of core continues our as And, growth said, these revenue engagement of our a clients from to their digital work, portion legacy That phase. growth

choice this they about optimistic rewrite have banks but that have realized are digital. no to shift their because with futures We

at in every transaction, to look modernize life a In science core Medicare med excel Medicaid which company nearly science biopharma just engagement substantial year-over-year. organization companies closed businesses. engaged installing our large suite, in life the as our helping where programs. revenue boost that's of our why let's of of one their opportunities to transform XX.X% by Now development. with operations, TMG global bots. Within program and was transform XXX government has and automation, we aspect their drug year, us Cognizant up productivity is to And part from last Within processors Healthcare, positioned healthcare helping a has finance, part tech deliver Cognizant our within of another their The practice, in touch business. turn help than IT Healthcare to build the which company, will every practice, be their in to more maintain, application partnering servicing. through process their full at let's enabled manufacturing, and we'll strongest its

substantial now claims Medicare and covered portion in a functions mid Medicaid we U.S. office the fact, other process and back In lives of for and the

product is execution through industry positioned the continued to solid quarter. government healthcare the offered continuing growth. are platform and of And these new our programs we've clients growth of TMG this added in Our Overall, segments. TMG to segment story one capture

up, to talent wrap about offer our I comments few I'd before Now, like a base.

heavily our development relevance of our invest and on we our insights, clients. knowledge-intensive depend associates. global and to continuously to work, and the we their Given passion collaboration And substantially skills maintain in

to So, very reach specialize unhappy tech this demand the of see the we course, global First, is talent annualized a is shortage for three XX.X% attrition skills this attrition factors: we're to quarter, when in, rate at increasing attribute growing. time we our

prior centers our company's third, In months. This strengthen continue there's local these from which who delivery management expect And XX relocate. take strategy the single the of the we light enable operations. our ongoing we've What's factors, location mentioned, engagement more highest can past annual skilled to our to implemented and local without talent us Frank regular and has underway. fourth serve multiple calls, attract clients transition place to we workforce on includes that our which simplify mentioned as retain increases, Second, third in a use highly quarters, our having retain pay development performance of several and more, robust over and to help as programs performers.

others. its working would Forbes employers a recognition. greatest conditions, in proud to be to We're top importance advanced XXXX clear, those for talent rankings, their where criteria our for included likely equity, this to and to how the surveyed, made named their Cognizant we The tier diversity, quartile Cognizant recommend list. And of the of pay top of Now, remains digital last week, technologies Best clients. Women Employers magnet

up, go-to building, business. sum we've and end, our digital Karen, resolved partner To and the that we be will to to strengthening clients' operational Okay. you. transformation comprehensive investing our of sustain over to

Karen McLoughlin

QX, the points up clients. you, billion, and a increased impacted year some of basis ago, grew good weakness from Results negative our were XX.X% the of including Raj, both rest performance Revenue larger was and a positive banking year-over-year impact world X.X% XXX Asia-Pacific in everyone. And currency. UK in in the currency. point X.X% Thank X.X% including solid. from impact XX-basis including from year-over-year, impact currency. Europe morning, $X.XX from of favorable was QX a by

initial in announced months billion are Europe, $X.X through compensation a EPS in further and performance. of $X.X primarily Mirabeau Cognizant which operating by combination Continental acquisition-related ago, the non-GAAP was XX%, repurchases Netcentric leading digital end wins. dividends. leadership XX of a XXXX and like in return of our stock-based to billion due digital stock enhancing was we the $XXX to the a number acquisitions and guidance Foundation, of $X.XX, exceeding to expenses, Non-GAAP expense, margin strong recent million operating stockholders While plan margin, excludes funding U.S. to our and

repurchase declared completion on deliver the share today, record quarterly With previously accelerated business share cash dividend close of announced share And the XXth, early our will a anticipated repurchase of per $X.XX August commitment. on we we QX XX. shareholders June we at the of on for of

update robust having maintaining the program a We anticipate are in an program the and coming to committed return quarters. to capital

grew XX.X% services services the and X% Now Consulting technology QX details of ago. This Outsourcing for to step-up state services a operations grew performance. large the quarter. revenue XX.X% outsourcing moved corresponding revenue in our let a year-over-year. year transformational consulting work. and resulted In shift represented me financial outsourcing. services technology of XX.X% discuss revenue a of and of a from project from with quarter, steady Consulting to additional

Additionally, large outsourcing the as TMG acquisition of such client inclusion of benefited Health. well recent as wins Healthcare Bolder our growth from as

year. as strategic margin brings we are second target at And $X quarter, non-GAAP were those the quarter, contract In operating on as and fixed defined to XXX. strong million second from Transaction-based we with committed over months, to the higher in our the of unit effectively. more to Indian more now margin The revenue annual total non-GAAP in to our the to prior-year function XX the spend half XX% per-member-per-month in of year last update revenue our achieve versus rupee simplification least model. along quarter, corporate increase strategic improvements increases million seven our the build total moving us overhead investments or XXXX. our Net $XX quarter, margins, revenue. as margin our track second of of to pricing and depreciation points. approximately in business an business leveraging on in During by number a continued XX% clients wage on utilization, optimal the This this absorb on to QX strong target such performance margins performance our of with and the made remain while contracts pyramid price the achieve promotions hedges, of staying in to switched benefited came as has structure, had We business XX% the quarter QX, basis the other to in contracts. XX margin levels from of we've customers a EmblemHealth also in added QX potential we of XXX-basis-point approximately sustained nicely XX% our from to set a operating generate structure track the up of the of

Additionally, during continue we by further XXXX, the the remainder structure our improve to of to resource our cost intend higher pyramid. optimizing of end

million $XX of we result a costs. million in incur expect As these $XX severance to actions, to

As XXXX, profitable mix contracts our improving we marketplace. and margins on drive in higher opportunities structured reassessing value position profitability remain our digital through of we our less operating portfolio services, focused toward also focusing that the shift on XX% not within large, non-GAAP the within affecting further business in do

Tax cash Bolder, and and by balance ASR net very sheet, $XXX generation flow, These December $XXX million from dispute the as We This balance, $XXX we the the million our define as Indian acquisition with net XXst, with and end quarter flow million, million. down billion to hand. on This are Income of cash ongoing cash amounts from the flow the of short-term CapEx, $XXX the restricted to had quarter quarter related of healthy. operating short-term the at the to operations free $XXX Foundation cash balance Turning which finished Cognizant $X.X was U.S. funded of million. cash cash investments Department. in strong $XXX the we with debt, was of We of includes with million which investments. of remains restricted

quarter, at revolver. was there no end million balance and of the debt $XXX on outstanding outstanding the balance Our was the

revenue first like guidance, I'd change quarter. the to to a standard to additional on take turning in some we minutes the adopted recognition the color accounting in provide few Before

project types contracts a more of early our With cost cost-to-cost results during straight-line more hours the or life fixed approach. stages XXX, the bid cost The of the recognized of approach adoption of versus basis a hours in on in for us consistent to ASC a contract. certain are historic and margins to revenue over

results our million modifications. to or margins. benefit impact conditions we has vary nature year, Substantially come structure from some XXXX. immaterial now as The our for to new contracts all come the new in the than from do overall While terms of the million operating of outlook QX of has XXXX. would contracts comment the ASC $XX from less XXXX, pricing contracts XXX the for expect full-year and impact months can of on like of based the I modifications. timing, other of existing six see XX, the first standard on new and December revenue full-year to adoption or to $XX revenue of impact significantly services, the and Of on and

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

for the and based course are the Our guidance at is over to does fluctuations time from of the be approximately favorable which not full-year full-year we exchange forecast rates at on XX guidance the points positive currency currency the current on realized versus Based providing year. revenue the currency year-to-date, XXXX. current basis impact the potential is exchange rates expected and the impact

third to of expect revenue the in $X.X range of to For billion. billion XXXX, we the quarter deliver $X.XX

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

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

to the adjustments amortization, Tax realignment income expense one-time to tax losses, Our currency non-GAAP and EPS Reform related charges, and net guidance future our initial and expenses to the Act XXXX foreign U.S. acquisition-related excludes contribution any exchange compensation, the Foundation. gains stock-based Cognizant incremental non-operating

or the revenue does business, areas In and Our guidance positioned deliver has earnings call the impact such in XXXX. along can for as for shifts regulatory of in well also immigration to continued investment us tax. Operator, solid our QX, from account execution in growth the not solid in we summary, another open environment, including with year questions. the

Operator

you. Thank

We conducting Thank session. a will now be you. question-and-answer

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

James Schneider

Good my specifically, little morning question. was I wondering seeing more thanks bit taking you if and banks. with for respect and could color to maybe environment a give you're us large the on financials

about talked larger you give the – continued kind us on accounts. slides some in at pressure talked your you about I the of spend demand signs incremental run-the-bank of You think some can the seeing of but maybe

you fast can might of those in that increased So maybe how demand terms any firm color services us of how a kind give kind that of maybe is, develop? from, about what sense you're seeing and

Rajeev Mehta

for to like is drill really here. one good the an talking example, ones, making Raj, That's of o clients. the as schedule work around banks, that We're largest around that said, of a digital. of a give technology. Financial we banks. North shift the And comes news American And We're couple as is as I large money seeing our accounts. think, insurance terms and we've banks, business center about banking of the And turnaround of going large a well. really is through European-based couple are we of you too, very is story the technology shift. the in towards XX% we is the our relationship different mean still smart making went now and our handful accounts and right, changed. banks a mix these just large as is sure This think where of that healthy it looks and there. is growth when years think seeing where shifting at in well where of doing Jim. are profitable we're we're And said Services our I business Hey, money entire challenges in And that I challenge ago, is center some Look, business on decisions the I one the after well each before, right, us on are mid-tier terms a healthy

as them these they're accounts. making get seen The some would we that as relationships, operations we client, of transform think have can that in digital, in consistent I digital, we revenue digital we digital the continue all I overall revenue but and impact to in there decisions conscious grow to we're So have strategic only in partners. you banking is the But tell that all well. is core we that we've the deliver, a we can company. we these – will to And the not their in technologies. At

turn. turn, also we're to predict but will they that will when hard those optimistic So it's

James Schneider

out, play end follow-up, in Thanks. margins then that doing down. in attrition outlook, cost the to about to a address going color. whether making kind elevated or margin at terms you half you're making quick at the increases tailwind is just of then reductions the how And kind of half? wage whatever as both back terms bottom and of the the the top the ASC you're maybe increases in you on back of can will get the of end? XXX back you're a offset helpful be talked That's Karen, margin Maybe, that And pyramid, what still

Karen McLoughlin

pyramid, promotions bottom happen timeframe. year raises split as one we remarks, the in the Typically, we promotions, for folks the negative we're for the for – that currently a impact timing operating senior will and to promotions, the half more which, This when for reduction do and margin, you'll approximately to continue obviously, Jim, back raises obviously, point prepared XX% see target the in actually we've as – the in QX more the of will folks we the announced, a non-GAAP So, we and just does happen of year. suggest about two QX; said quarter. raises so in junior points half of the the in the

some So you just then hard The as and it quarter. ASC we've on for we don't the target promotions specifics but, overall into – impact contracts. approximately will obviously, year, and back quarter we raises to of a this XXX expect certainly, given know the for year. it's see margins fourth predict. as the of we, material of Obviously, some get benefit XX% to said, to the exact in a on margin our timing we the But the subsequently bump the little and because But half results of rest bit committed from have down will see hard to are year. the pressure is still

Operator

you. Thank

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

Tien-Tsin Huang

Thanks. Good morning.

it margin here, revenue end good lower peers. of looks upside came at the like growth So in but

revisit you're what So targets your aiming growth you relative growth or your wanted at goals to trying your versus the What margin when going for balancing revenue how half setting level growth. I'm how as into to are of your the peers guess, revenue revenue industry? get executing benchmarking you're margin you're of I second growth is to strategy.

Francisco D'Souza

to guided think right I we Look, the for Frank. within It's the was Tien-Tsin. revenue range quarter. Hey,

expect is sort that this sort to to significant industry. and digital general We any accelerate quarter's I to And our certainly execute in think in shift the So focus I anything of revenue don't we've number. balanced ascribe grow pivot with overall on of that we said see don't I revenue growth. line the – particularly as this

on work, that the making but has the said kind because in shift the to I work focused important for on We're margin ago, value think go and the the But of minute we the that's clients focusing certainly grow higher continue We're we choices higher laid of context prudent work that can Services, now offer. comment the made expect our being line margin for – deliver targets a Raj confident in across longevity. business. it's to true accelerating you. digital, Raj work As out the be about of Financial we've that I with to industry

Operator

you. Thank

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

Bryan C. Keane

Hi.

the coming of that gave the revenue guess, low to what range, end QX you towards come in at follow months in end the to I Just number the three ago? when high the wanted I end caused low versus guidance, up guess on

Francisco D'Souza

the – small. is it's relatively Bryan, mean, I range

said, end I and just Given the I specific, size minute quarter. scale of and a ago, to deals and or close, to our swing don't there's point the when think the our they of timing the just revenue. the middle size things, is low of given anything between as scale, of timing the range number during there's high I execution a mean,

Operator

you. Thank

the Caso Wells Edward from with your question. comes of proceed Our next Please with question Fargo. line

Edward S. Caso

expanded disclosure. My Hi. Congrats appreciated. Much around Good morning. the on question is BPO.

space? talked get differentiated really Could about that in being as of recent updated You've and you're area. us being of there you sort that Thank past a you. the positive sort how

Francisco D'Souza

and Ed, ask add then I'll start to if Karen they to Raj, want and it. anything

second on and growth technology is earliest set digital say quarter. is year-over-year to and I business, would technologies, days the faster well really fact or infuse BPO robotic and real very along has the that – in but as IPA the business, we're the quite through forth, comes were ability like drive said become into in to And from so that – able and differentiation a the us. is say artificial business, that more The Operations our all automation strong automation comes we've Digital really Operations and the sequential intelligence using of would differentiation into it's from Digital operations. things one differentiating process of so of I into BPO prevalent and our this our think from doing had I the business, parts we growing

knowledge, it. our always do we're a so business, we've you is industry BPO one part deep as vertically-focused, work That's in had of I it's think most which So BPO that BPO. of very vertically-focused in we the domain-centric, combination know, business, of

business. The of strong have got had it a that we've – second is a in that – we've part platform continue a strategy to

our productivity with and all assets. Bolder part automation artificial of it really to technologies and the RPA then the types strong Healthcare, come using drive strong in intelligence, of drive business. And TriZetto that ability platform TMG, in So is IPA, to with third

position that together we those market. you pretty three unique think a things and have I in put

Rajeev Mehta

Healthcare our providing Communication, story now, the industry Yeah, I would expanded Technology life companies that, the leading thing to we're a – we're and only Services and sciences very players digital BPO from has to think out add Edward, and is in I space, to there. really strong work Financial our the Media of of lots lot the

as to well built you Resources and that in have Products addition In out being story too. group strong our that's a

expanded story it BPO the of has terms ago. couple years was of in where a So significantly

Operator

Thank you.

Please comes Morgan question your with of the proceed next Stanley. Our Essex question. Brian from line with

Brian Essex

morning for you. question Karen, had Hi. taking you Maybe I thank question. the and Good a for

environment As in they willing is challenging labor you what localize company's regard where optimize the at balance a we seeing current your to to visa your more pyramid, to be willingness look what environment? could comment and to the and particularly with maybe you're work done? visa on Are efforts offshore, more appears to

Karen McLoughlin

don't we've from clients' perspective. I think Brian, So, really a any change seen

other are got work got more clients who the to on-site. who keep You've willing, you've prefer some of more clients

really in haven't client shift we seen any perspective. behavior a from So

of to think, from others when there so types say do any clients about talked that I in now, are a some today I to in market and looking any the wouldn't immigration more on-site heavy you're due overall, that development talked we've ratio. some as concerns. seen like are consulting heavier have forth. changes environment time of the But transformation and for we behavior a then more tends clients and a And lot work more that to certain we've about have on-site, agile were in

Operator

Thank you.

question. line your and from of comes proceed question the Please next Bryan of Our Company. with Cowen Bergin

Bryan C. Bergin

and M&A you. expand to at morning. double-digit about continue these Good Tech in within grow you. upon Products Thank you and talk the channel drive more Thank And Resources your to you're Comm, how Can verticals. levels? Hi. efforts Media, you finding the those expect business vertical? the Do to

Rajeev Mehta

Media we others, point, I'll that, ago, if Comm, long Bryan, been clients some Cognizant. Look, become we're let well. clients it right, add we've the seen as the I segment called and heavily in as working we some significant Frank the with recall do I'll will some but So, for jump and not Technology so is you a that at that traction. of our into think that largest of We've space. have investing

I as – in we're core good side work, helping technology doing too, think progress terms of So well, the making so growth. on a digital then operations healthy in and business

in broad, but terms right? is our we think plays those and technology deepen of in at we're think there's of relationships, those I if just geographic that specific or on there's M&A, all capabilities practices, a clients, terms core plays. I consulting there that help CMT, it look at we'll – don't focused of If anything or terms In if relationships key platform us expand help that broaden the

approach So I think CMT that's well. with as our

Operator

you. Thank

question comes the Shirvaikar of with Please Citi. next Our from line with your proceed question. Ashwin

Ashwin Shirvaikar

at XQ guide but taking a seems I a Hi. question. light. is, be there's two-part guess look One demand. relative it the performance, seems guys at have for more mean, then to a specifically Thanks positive, consensus, And question catch-up, my the you're to like. certainly that commentary bit when I related you I demand turning to XQ XQ

the benefit Because January to the kind catch-up a wanted how question of I the sort that's if XXX it of year-over-year about much hit to would of think that year, size ASC the second last the, accounting pronouncement into to your I will, part out. active range. then important is, Thanks. So XQ if had Xst you visibility, And net ask demand of have of been? been revenue

Karen McLoughlin

suggest in. the So, if those XQ I'll guide, you to – some I That's X% QX would let's take try and unusual sequential others for unless unreasonable, and go middle sake, or a to QX say mean certainly you anything that's Karen. look growth. there's like can Ashwin, about of chime it's that. not at furloughs and the But just, range, argument's that the

for million the acceleration then think for in guidance not in to puts revenue the give about the out, ASC we've where of which I We're any $XX is expecting XXX, year. that the us full-year. incremental I way this QX really terms want be you So quarter. really the fourth XXX, there's color it And we think right significant is can only because of we ASC of broken

impossible gotten, we that prior-year that on As it at prepared would contracts redo in existed about – year have the only due back is to or than that. awarded contracts, we we the said primarily the the benefit just which received a so benefit almost $XX results from It's end we've less this current to been based year. go of remarks, look we've contracts that it's that and last the look and really at at impact all my It million be to have year.

Operator

Thank you.

Joseph next Cantor Foresi proceed Fitzgerald. line Our your the question comes from of Please with question. with

Joseph Foresi

wondering, was initiatives? has Hi. within you digital versus in service balance the for do investments the Thanks. need digital shifted. offerings mix I the or And cost-cutting the how

Francisco D'Souza

mix. don't Frank, sort the in it's shifts meaningful Joe, quarter-to-quarter I don't think there think Yeah, digital I – are of

as more and Five, cloud five-year forth talking digital about dramatically, digital course, and talking over, years of has let's the look we're mobile components of the you if and digital. say, what about being addition period. include added Of if were I've and perspective, things, ago those artificial as constituent said, longer seven constitutes you and so to to take a changed definition blockchain a term in social we intelligence analytics on Today and and manufacturing. – so we

new things and of the is All digital definition – that innovation emerge. of new so these happens expanding things, new are certainly as technologies

margin the certainly, and way allocate business about I to a we're – But we'd we thinking the say the which XX, that every look investments make to muscle business and investments, past. and every quarter want don't is dollars a run or investment just and and have say there's how had We period, an look, our those like a process. have, XX want to? the capital or analyzing we we we or days, like up release the that's we've if to have, yeah, changes. this We quarter-to-quarter, quarter make, I as we'd balance We you think that that longer the the we over think period. process this in always we investments mix, That's investments. run for We've during tightened that margin we you shift. that what process. ongoing managing making It's so, investments. what we to. significant list mix investments will, So And We of the do at stagger

we've think XX, that muscle the I XX last over strengthened months.

company. in that discipline think the how the to and investments to – at things have had against good quarter-to-quarter the to develop I continue I we period allocation past have healthy of look return that's and strategic And figure most or going that's capital the the or where dollars developed in think are think out most over growth a we longer return either that have our we month-to-month, allocate time.

Operator

you. Thank

question Merrill Our line from America Lynch. your with question. Please next comes Kupferberg proceed of Bank the with Jason of

Amit Singh

Hi, actually is Singh. guys. This Amit

it the was XXX. the and the remove the in only to understand have guidance would fiscal then in came mean not guidance that Just ASC is, provided much benefit the in if margin what second the million and in range. understand that Does actually quickly trying for part half and now for And XXXX? thing the a the on guidance below then trying I'm would mean? in be first quarter of going negative was mean back is does to your the to second and ASC margins to you close is, that the half if ASC I'm second year to $XX EPS And XXX revenues zero? that quarter? bottom-line you the immaterial the you full-year, revenue, of second in of The last results, your How from top-line part

Karen McLoughlin

Yeah.

guidance, QX, back QX So we of our one, obviously, gave go we to so was May. if right, think, beginning that I the when

adjust we the to investments trajectory think at look contracts, growth of our are guidance, And to and So prior the any semi-annual we're quarterly to we can't out on included back a where Frank's and we can do good really what it going from going make. right, and company. margin really we a to basis had on annual, the margins investments was at perspective. for because what in we a the business you a it break monthly, an both pretty margin And and contracts land, so handle the starting revenue really look make comments, impact revenue to

just can't trade-offs you if pull have XXX made out So in isolation for would that. not ASC other we because

over when So of I we at I in way. at end a it the we're And our don't even think you $XX full-year that full-year bottom basis, at of look look can keep the mean, range, revenue mind, basis. billion on

expect of and revenue is the that X% certainly don't $XXX we million, even ASC So impact revenue XXX large. to be

material it's the for at company not level, a year. So

Operator

Thank you.

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

Moshe Katri

for of those could i.e. top-line down pruning the that you the Thanks. out the are in cap the criteria they'll in and be Thanks road. Are process are or down important Hey. context road, impact accounts. of better some some focusing on and focusing the growth on growth of qualifying growth guys margin opportunities there Raj, kind of of taking potentially context high something the of mentioned in my high question. that within the we your you commentary, not in top-line and obviously

Rajeev Mehta

Yeah.

yes. And our – that doing growth, add from. answer If for you and high-value healthy is digital the we that presents look, sure focus, chosen the criteria, added a and So, have we yes, to we're right? that is being we're doesn't making made were go work strategic long-term – opportunities work more we are definitely commitment are and to going that is shift to us, we some present our to that answer a I feel meet clients we that there healthy healthy smart mean, work business towards walk away so margin margins.

Francisco D'Souza

– say to would would Yeah. Moshe, that. it's I add just Frank. I

run energy points choose level, a may of don't I our out resources for make. would and we demand that to to think the you on. lots I'd but the think demand. are the although there're if constraint focus two less will kind there. work within technology client our do run, as in of business long that think what well, we the There's overall long client say at I more choices that in One is I be the

and So the carefully constraint on it's to and rewarding we work move meaningful the the think that. the be how talent, battles be about work do so successful smart we're long the of that how And them, help going that's for to that do the at the be over develop run. we deploy your how generation our most talent do we significant work talent after generation them pick to the deploy focus the your next run. to against you is then going our And train most strategically give and level careers, over where most to next client is long carefully thinking some you most to them them

high I think there's very think of – the the emphasize. slows value in business lots because that areas we the So I go be don't making the that choices we we are should that I opportunity – that growth to even conclusion kind thoughtful the revenue about run, it after, strategic long of though of the work within and margin, don't revenue growth want things of go high

Operator

Thank you.

Please Loop question. with Our of with next the proceed question Markets. comes from line Joseph Capital your Vafi

Joseph A. Vafi

headwind, something predict But perhaps you XXXX there next I can a could thanks those different could if this year? that we and potentially taking way don't know but is a Maybe different not. on and on you do get I schedules, financial is there's Thanks. clients for overcome the is exiting headwind? answer of my it question. we if know into morning Good Hi. that you kind clients think there lingers Raj, to over or – services mix hump when it or where

Rajeev Mehta

Yeah.

is how thing definitely But them predict in they're is to Joseph. hi, in that technology. because of they're is there, each digital. important scenarios of It terms client through I business leveraging different, invest that going to all various it's hard So, one all think right, realize

one the think they strategic and that business as we just formula partner. the think work exact as the those North doing, key scenario that that digital that like has we continue that shifts do think of all mix nature we I for excel more the it's accounts I work think do size – a of but have we're expertise we on. strengths each clients, winning I digital, because And expect having America, operations our these do accounts well, technology a we'll towards and have the of is predict I at in one have us timeframe impacting there clients, different view the it domain I of and has because the strong so lots that of at to those as because to hard going the the

David Nelson

think have Yeah. we time question. more for I one Operator,

Operator

Thank you.

Harshita will Rawat AllianceBernstein. Our from come your with of final line proceed Please question question. the with

Harshita Rawat

Thank my Hi. you for Good taking morning. question.

acquisitions. for revenue So looks adjust I revenue organic the a have weak, It you growth Healthcare year-over-year question once on growth. very was like

the driving business? path achieving question deceleration? the what's is what's to And my high-single-digit organic in that So to revenue mid- growth

Karen McLoughlin

an inorganic in April. – acquisition. actually which not is really – So acquired that's the and in Bolder, a revenue Healthcare is was only win we client TMG

that So organic is revenue growth.

quarter. XX%, was in year-over-year million a you quarter, it piece Bolder. on if $XX less think out small the practice I the grew in basis, the about than That revenue back of the So of a

I the think don't deal. year TMG lap of half we I to in Healthcare see growth comps back the for have QX we'll Healthcare. large strong will because in get we to actually the and continue think challenging start more in So another

we begin deal, which is XXXX, this platform There in of Last recall, the you the very another in XXXX. QX. to year. started we which if slated Emblem had deal in year, QX not So large contract, currently TMG had started

because the nice So a bit in we But of growth little will that. tougher to see that, strong continue get comps outside healthy Healthcare. of

David Nelson

wrap up. to speaking everybody we'll think with questions. joining again today, for And want and next I I Thank we to quarter. for look you us you. thank that, your With forward Perfect.

Operator

teleconference. Thank This today's you. can concludes

at time. for participation. you lines your your this You Thank may disconnect

Cognizant Technology Solutions (CTSH) 2 Aug 182018 Q2 Earnings call transcript