CTSH - Earnings call 4 2023 | Cognizant Technology Solutions Corporation

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Operator

Ladies and gentlemen, welcome to the Cognizant Technology Solutions Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Thank you.

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

Tyler Scott

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

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

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

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

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

Ravi Kumar S

year established and to Today, across to the for market finances clients and in in and employees cover and environment, cadence fourth CEO full XX months met client portfolio, services about speaking Cognizant's Thank you, an to topics. regular three used XXX and a and focus and for this our of company's culture. look have afternoon, quarter operations, been to like dig I year a world. ahead into with relationships, the a with and of listening good our I've would XXXX assessment XXXX. results, progress now I've our outlook full Tyler, the everyone. role

company's this a initiative increase and employees has into everything, confirmed say belief confidence about to level more the belief I'll in distinctive as few my nearly as our in XXX,XXX core My strengths. the revenue have of potential have in high motivation I to my full our year and in minutes. well Cognizant immersion of growth,

cost To with while fourth out program. highlights. management three delivered where our implement quarter the start we on call commitments Let's our continuing to

First, range our expectations. adjusted our guidance we ongoing and executed margin well, delivering macroeconomic revenue meaningfully pressures within exceeded operating despite

Second, the made clients in revenue in mix. the in saw QX large continued business percentage last was our quarter. of expected And we further Year-over-year, revenue with line goal we progress currency. in our or reported X.X% limited and new clients quarter voluntary we to and discretionary third, cautious much The guidance provided X.X% spending. down remain the billion overall deals, of was down QX as increase the we developed range on improvement $X.X as constant attrition. as

our QX sustained was cost declined sequentially million adjusted each. I attrition, and next-gen new were to Of X voluntary in stronger We margin XX attrition Driven percentage business XX.X%, tech on our trailing were points management expansions. our by than business our and for momentum large X from see XX-month decline X is exceeding in mix continued the execution of X.X especially operational these operating deal and am pleased renewals down year-over-year. employee meaningfully XX.X% quarter, winning efficiencies. savings program of our deals, better anticipated. and deals we Our $XXX services that down a points to X

of with in ended Turning A approximately year XX.X%. with a full a X% QX prior the We the $XX.X to guidance X.Xx. months margin of QX growth the our XX.X% billion, margin and enabled us call. of a we operating adjusted slightly of up booking of trailing resulting with year QX XX to compared $XX.X book-to-bill year. a year-over-year, from on full achieve down was strong set billion Revenue performance guidance line in

year. We deals XX% compared year-over-year. deals, For TCV, increased deals exceeded the that previous million $XXX TCV $XXX $XXX to million Several our exceeded with contributed Total for XX% of signed above TCV. XXXX, billion-plus TCV XX XX factors XX% in this about million approximately progress.

across lines. service We generation have reoriented large demand teams our deal and all to execution

our with have sell consistent large made to progress strengthened and and we ability enable repeatable productivity see, large And to and in industrializing deals. for automation deals. operating delivery have solutions create shape We efficient and tools a delivery model

demand will business Turning remains two challenging. financial to while performance, segments. our to In environment largest comment Jatin want I financial on responding segments where cover our our a services, to that

our stimulate increasing growth. a We've are number the new efforts of in to leaders across installed segment. We positions key

of and and commercial and relationships. consulting partner resources industries in invested in have targets We

industry focused the and In as healthcare ecosystem we service also expanding technologies industry transformation, new by are major We solutions offerings healthcare the like emerging through our to undergo our Cognizant to Health is continues nucleus become positioned Sciences, our on powered AI. on solutions. data of well enhancing and believe an Generative platform's

solution expansion BPaaS our of With our platform these mind, the we healthcare in and TriZetto are dynamics capabilities. in investing

also AI are We presents the healthcare the market. on Gen to capitalizing opportunity

instance, value For systems. health can clinical clinical to provides to portfolio sciences I of and support processes, our administrative enhance documentation confident payer remain clients. automate used be LLM decision streamline in the

we and company And example, to life For global us to relationship to as have industry. position treatments its in with digital patients transformation. whom management sciences strengthening bring its the selected faster Fortrea the Takeda, in application transformation of long chose a support has deploy ecosystem modern their technology had help a secure while Cognizant biopharma modernize help recently partner a to infrastructure digital

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and of further our of use the solutions deepened expertise at intersection in First, industry industry XXXX, to expertise. industry-specific technology business cases deliver In we outcomes. service

AI-driven and industry-leading strategic of automation ecosystem adoption with partner example A together to clients stitch co-creation industries. ServiceNow advance We across also partnership our good the is and enhanced the collaboration to capabilities. broader our with

return solution WorkNEXT aims enhance improve also next strength, customers. workplace ServiceNow on are to better to collaborating are for enterprise services the second Generative intuitive to AI. more provide experience while employees clients. collaborative for to personalized We we our experiences with core quantify modern and partners with Cognizant's worth Its and helping

earn our An our last better their learning call, succeed. on high for for Promoter believe Cognizant trust, clients help even with problems as to and and annual empathy to we working year. historic and survey QX part Net carefully our a client mentioned we solve from have them clients Score hit become As DNA, at their listening a of

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consolidated long-term the Azure our We AI-powered of expect assistant long on BlueBolt accelerate tool innovation built priorities strategic our employer the choice after measure become three we priorities, a simplify industry, performance objectives, the through service. our success way my to revenue in strategic we operations. a augment our collaboration program and Generative arrival, suggest growth launch Shortly to new Microsoft OpenAI with

our on with progress touch choice. I'll employer of beginning

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compass nearly India, gatherings up year, pleased programs for across program year. I'm promoted women company company-wide Later bring leadership across employee this and career the technology. physical unify we initiative to and with after with that recognize a for population Cognizant's paid advance women in returning along a globally to level work programs a excellence skilling the our and Impact development XX,XXX senior introduced we'll leadership woman last an Late to for called break. virtual our boost last women-centric we Shakti business women to and awards and program, Shakti carriers say Cognizant's our together entire mid-level The Awards. month, and further people

the Cognizant and Our second modern manufacturing, differentiate invested further AI We performance growth. Skygrade to We've in complexity healthcare revenue Neuro to we and cloud-native for performance Cognizant talked next TriZetto wave few. also is year, Last enterprise technologies about to platform smart the objective of help I've approaches built platform-centric platform accelerate We to cost and platform investigators Life to orchestration and reduce clients began asset shared our as heavily solutions such to launched industries. our a name portfolio. core designed operations, select Sciences transition AI-led rapidly introduced IT with industrializing to and Cognizant cloud architectures. infrastructure. our of in

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that plus we our planning We opportunities scale. in have another pipeline to XXX are

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corporate executed environment. objective which the and to third work post-pandemic We optimizing workspace business. on is simplify program, next-gen Our at model, simplifying our reflect consolidating functions to performance aimed our operating our well realigning and is

helps Last achieve and the goes more us innovative. become expectations agile from our our what our -- markets streamlined us exceeded structure and performance to to Our in what beyond XXXX cost also we primarily management business costs. our a structurally earlier reducing service that was and Simplifying operating proactive margin enabled operating It adjusted and metric model we year, lines. integrated on focus complex further a year.

towards and associates We us further layers we teams fewer believe will help moving account company across drive the closer clients decisions. are empower the organization, and bring our to coordination in to make which strong

was strengthening In summary, of year a company's our XXXX fundamentals.

in to Now focus our let's look at -- look XXXX.

one that time, deal are I'll implement expand the selected have These AI our road select map. deliver to imperatives and performance strategic strategy across those industries, ability focus opportunity. imperatives opportunity the to AI capture our is strengthening will help differentiation We only while needs of build in the our In further large achieve clients' IT initiatives, sharpen our on which capturing our primary grow substantial internationally, talent interest of X capabilities, objectives.

testing accelerate results starting been believe we Generative said, That slow a of after ramping play performance up from initiatives includes of Cognizant of we seen adoption AI have is initial concepts use pick system pace slowly. are driving a output, and accuracy This consumer and hallucinations, incorporating proof enterprise in governing expect The AI at building takeoff learning S-curve and role have soon optimization. continued the will like to and use Generative iteratively and AI increasing. to reinforced We managing, movement accountability transparency explore, major integrators in cases Although believe up the scale. very optimizing will reducing Gen that enterprise in sharply.

the the on economy the capabilities and Generative partnerships mentioned XX economy calls, M&A. prior and inject expect generative Economics. our of U.S. Generative Cognizant spanning AI over society and We into in a Economic over to driving platforms, years. for years, believe partnership economy Forum as with to becoming month's developed approximately a X ahead last new compacity up that trillion Oxford force World AI published $X $X is in predicts could we Therefore, our AI people, billion next invest

be in technology. XXXX of the way to scores, predicts research exposure will percent the XXXX, approach growth. this work to from degree stage a which with jobs of Generative that an how we X% occupation meaning to by XX%, XX% AI some affected setting for high the increase in also will be jobs could profound productivity the Our by and economic disrupted shift From

and topic see that's have of recent little early change the uncertain environment. spending from discretionary weak assessment the in to the cover, One We last provided quarters part demand about and in XXXX. we

apply processes savings period that and consolidating to transformation. bought the uncertainty on reducing expect increasing has Given that data focus AI-led modernizing change the clients them costs, and together, are to so both experiencing to a productivity their can vendors and we they continue

XXth stood month. anniversary we test the of last year. celebrated and we and On last just the to extend our a have sustain momentum time, note, are have closing we created we determined

about company's in were market doubly one now. As optimistic January, future significantly whatever than ago strong we when so ahead. the today a joined believe as seize position year I hold, was our I are opportunity last to future I we may I'm the

turn to Cognizant X who call about details pleasure to Jatin, my his observations December joined initial quarter. additional on the it's on over the Now and us for

Jatin Dalal

experience afternoon, Cognizant the I making for organization Ravi, I such growth warm thank everyone. have and mindset, I'm entrepreneurial excited onboarding centricity seamless. to in and admired client the also join would thank like always you, the good Jan a to me and very to Thank welcome. Cognizant's like culture. helping entire for would

opportunity. have opportunity in has and since conviction my to had capability strengthened across While global events X months been This in I our it also sales and the January. has participate energy the only Cognizant's I joined kickoff market are in the our passion organization further apparent.

we partner tremendous opportunity leadership our shareholders. and made in create potential. reach have In I'm our clients and full I growth to XXXX sustainable there associates, the strive Ravi with a excited build value believe on entire as to we progress is team the so, doing to for to long-term

$X.X X.X% turn XXX that, Year-over-year our year-over-year X.X% declined was full points of a Fourth XX Services year quarter in This our which led revenue growth Year-over-year growth revenue to revenue fourth growth points billion, to and of billion, results. full of X.X% Services, constant basis of basis $XX.X constant acquisitions. a or currency. performance declined year constant currency. X.X% With decline and from acquisitions. discussed year-over-year from let's year-over-year representing approximately approximately includes in currency, respectively. quarter X.X% of decline which or in Ravi Financial and Health includes X.X%

the of from currency, our hospitality The quickly acquisitions Resources and ramp contribution will completed and roughly Products revenue offset utility was benefit We the bookings. the which increased included travel constant in comment I year-over-year on and technology currency. X% So Communication, X helped performance other in constant growth flat particularly business. recently This spending in recently segments. completed from pressure. macro-driven better reflected America, ramp and the discretionary North saw clients. acquisitions new and and auto, revenue among relatively of media new

moving on Now margins. to

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

our from tailwinds This NextGen costs. the rupee. compensation margin adjusted offset savings of partially Excluding from the Indian depreciation program this XX.X%. included margin operating was increased Year-over-year, impact, and helped

health year negative As to sciences charge reminder, customer. from noncash impact a related also included prior the period a impairment a a

diluted adjusted rate was in EPS XX.X%. Our $X.XX quarter XX%, quarter $X.XX. QX which the the was QX in is GAAP EPS rate was and X.XX, was tax GAAP tax adjusted

cash short-term billion or Now cash our sequentially ended X to of of sheet. the flat flow mix. the $X.X of XX cash DSO balance to slightly We million income. cash billion. quarter Free and expectations. with was XXXX we free investments $X turn ahead by and billion $X net year-over-year, XX% full QX This business driven our days of increased was in days which flow of the $XXX approximately year was or net brings

repurchased shareholders $XXX quarter, over regular the million and our through During we dividend. shares $XXX returned to million for million X

year, billion full through $X.X shareholders, regular to we including our and the through For billion $XXX share $X.X million dividend. returned repurchases about

$X.X remaining XX, December of our authorization. As repurchase we billion under had share

outlook. to forward our Turning

to quarter, the we a million expect For X.X% constant representing of decline billion, decline first or the currency. X.XX of X.X% revenue X.X% a X% in of range to $X.XX year-over-year to in

a have assumes of impact XX approximately currency basis guidance will Our points. positive

X.X% of of X.X% X% a up For year the decline expect anticipate billion, points, of and Inorganic currency. a X% be year-over-year growth $XX.X full from which contribution to of for billion we year, to in we of decline to range currency. the to impact the the XX XXX approximately revenue basis constant be is or growth to positive in is to expected points basis $XX

$XX Our and in $XXX we NextGen $XXX program changes XXXX our opportunity track cost growth on we This and from assumption no remained still beyond. still additional to million. intend NextGen, expect to savings incurred majority million XXXX. an in total to and approximately XXXX are savings of for expectation million quarter, includes our the reinvest incur of this in the and in the There

adjusted to margins. on Moving

year of of improved XX.X%. finish allowed an pleased XX efficiency XX.X% discipline business operational focused expansion. margin processes. and of We through margin our operating to remain range automation model tools This adjusted increased further XX.X%. of to utilization, XX in expect XXXX, continue our we represents operating driving with on us to and a margin to XXXX, versus are the adjusted to of strong In points XX.X% full We which basis operating deliver guidance

guidance gross interest income. interest introducing prior providing versus net of also our income are for We practice

$XX of anticipate million. full year, the we interest net For approximately income

is tax the XX%. to year full rate XX% adjusted expectations for Our

previously full the The represent of Cognizant authority long-term our to were The income. share ruling India with January funds we repurchase on with bank a presented proceed Indian sheet deposits cash transactions For flow about ruling on negative X approximately And XX% required million tax previously subsidiary. free our funds of by $XXX because Lean. in matter process. with of an deposit relating connection includes as the were XX impact to net in deposited tax appeals undertaken anticipated December under with a year, authorities under tax expect balance to investments. our held India This will disclosed of XXXX in

negatively will The operating the amounts equivalent will sheet, cash due do therefore, process. capital will outflow amounts our refunded any to and impact and appeals our cash be impact or flow, not balance the tax impact determined the of but not allocation at to to Cognizant on Final cash we the priorities. end anticipate authorities

to vigorously complied with that the have regulations applicable matter tax continue this to in defend and position. with believe We all law we our intend accordance to

Moving allocation. on to capital

expect dividends. We including shareholders repurchases over $XXX and to in regular at million return to billion XXXX, million share $XXX $X through least through

continue aligned opportunities will acquisition our also to with strategy. pursue We

to approximately share earnings our outstanding guidance share anticipated full given our flow be the of deposit for the open of to XXX% our therefore, the This With take repurchases, year India we'll negative with $XXX full Based that, is than authorities. flow free guidance more cash For from $X.XX. the per questions. adjusted expect the to to cash on additional deploy shares we, $X.X year, impact free aforementioned tax leads of million.

Operator

from line question the of Sroka Citi. with first our Ashwin comes And Instructions] [Operator

Ashwin Shirvaikar

color new regards Thank by I TCV versus new provide My terms be some growth, if And renewals is influencing know would that, you cadence it can if expectations, sizing you. versus relates ACV with kicking expect to you in just comment bookings, count. first in welcome. when provided contracts Ravi start of and question to of Jatin, great. perhaps? and can you as on by you to that

Ravi Kumar S

Jatin you, chip to going I start I'm Ravi, to hope Thank Ashwin. I'm going and well. is in. you're doing to This ask And start.

these category at a opportunities are a the large they look $XXX I XXXX TCV. ways, $XX our $X lot deals, about and in in services, in million actually because It XXXX Because If has of, $XXX the range may, same discretionary the in to of $X also we upside shaped to if deals, period, kind million The $XX and $X some how million, have was million. comparison or significant takeout to form, say, $XX bookings, managed on it longer cost actually, you by we about them. million spend. actually, to $X driven the year million is consumed about of shorter the get deals as

have ACV We more on we TCV. skewness. versus don't So the comment

on the and expansion. publicly I we over say, in significantly deals, we very of new skewness the expansion smaller new you actually, new will large find renewals, say a new new in again we business deals, mean, Also, we but the high. gone the that, logos on significant numbers -- I upside have more new being Like have deals in on and don't the years. numbers, mix, even commented renewables large have comparison deals up previous would to TCV We expansions have we the think I -- and expansion have

to is these In also a of published in to is with. we market, a ones made large for important some customers Fortrea this one the going signed that be names of fact, make example, quarter, we published the the sure we point we deal

Takeda. published on one also We

lower. didn't but have future into the runway proportion we where When a XXXX, future. from So for did you future But that the the gives effectively, luxury good year they go because runway does we XXXX deals backlog the years you have was into good they you they forward. longer have current because so it a large it period, much large we a as backlog what for the have win, a deal also the is give bigger a

we will we that contribute to what in Now XXXX won XXXX, are XXXX. entering

contribute create to if 'XX will contribute did 'XX, we but to and it It future. a backlog more the for

do revenues. it is, question our the does to what Now

softness, XXXX -- a portion off. discretionary As which a to it kind in to much had of contribute which It as revenues. we sets is of starts -- also there it

kind much on unknown could I time, in the impact. how question in is, XXXX, the happen is we extraordinary it kind to of you large got the in had down discretionary will So deals. going neutralized -- it point XXXX. to run of momentum the to discretionary what's the went year, in to on discretionary, by Discretionary XXXX, don't going the will -- what going it. this contribute XXXX hold, of as in which the see wins at will And is early 'XX well. made depending we happen know continued up but 'XX and mean, to to contribute to it's it

Ashwin Shirvaikar

not So and come what discretionary? Or as in relates terms so to to a the at extent, just consulting investment And beyond it your partnerships incrementally are in waiting assuming you XQ like things if to game? least a you outlook, does on of expect would we back in good still discretionary are relationships, actually contribute?

Ravi Kumar S

some math, is you growth that the notice sequential there you do if our assumed will Ashwin, So in numbers.

will the in do math, there is our get you that if So assumed you numbers. growth sequential

productivity have traction cost consolidation vendor deals, large those are deals winning. AI-led the takeout good We are -- on we

So give expansion winning to continue us run formula, we it, think and business opportunities. give existing want down a which the have us which double those we the will we will We and clients. on our on will new to on

broader is unknown. know -- do know. and So discretionary I what today range because if do that's not guidance we mean not our you we is why notice

simple. is thesis our But very

for comeback be of discretionary. We're a going We prepared fully to for to it. going are prepared be

as remain which of which large ride we've to to opportunity. has We and on a engine contributed winning gear so to fulfillment a gear respective takeout, back swim it engine. either we our will comes down new separate as operating lane, continue Equally, for will on on logos. going our comes XXXX, double well. momentum got miss and We're new that that on from We're not. the formula discretionary business or will cost deals going them We'll don't

go behind will we So it.

be one be and And to on on simulation, prepared to we the want So we we're comes seizing opportunities. going other want down if back, those to double that one.

Operator

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

Tien-Tsin Huang

encouraging. outlook margin The was

margin the was margin utilization like sounds I detail improve. So should on more hoping operating rates versus gross little dynamic. for It

NextGen productivity, of You pricing, thing. talk kind that about benefits,

sure and want understand all callouts So for year the make operating I had. for just That's to okay. margins margin, I the across if the margin for -- gross that's

Jatin Dalal

exists Sure, different. The on in. lines, the really The and operations margin clearly the of drivers I be the for think Tien-Tsin. both kicking opportunity driver efficiency be would gross would

one quite return. have We a capture the as utilization growth of upside bit that can

The some benefits the automation and around AI second deploying relate tools and processes is really get operational to out.

opportunity So of definitely, operating program Gen will there's the that the on in elated upside apart related with SG&A around complete takeout NextGen and On tail traditional led pyramid and end XXXX. an [ some opportunity be on there Zs gross cost margin from traditional the front measures. will ] margin, by of the

the -- have work we I the we about. we'll we think have will go around So by sufficient lines. individual mean, we and spoken overall, on But overall expansion I we where both, be would see actions

Ravi Kumar S

these of by opportunity arbitrage NextGen AI productivity to are We we driven also the this are operational as opportunity margin we program. I deals out, curve, to which efficiency, is our we sharing offshoring. generative Equally, being tooling. program. do -- a in are classical for mean and levers do an margin, of a with those ] [ and operating winning contribute unique go classical clients, technology higher levers we're our share growth impact we the the I the gross will mean, But to benefits on forward. pyramid, year of all utilization, versus benefits in we better said, And -- pleased have why very productivity, higher encased large we better ahead which the full progress. think have the these we then Jatin this Jatin start the the with are addition have on performance with as labor What to lot which NextGen also I very think pointed year arbitrage is of reason the

Operator

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

Moshe Katri

to will And work welcome. again. It Jatin, with great you be

some questions. been So especially question. since factoring what inflection won If fact looking that of we to growth, a see point do That's think couple you've these for flow of winning at at the and start could year ramping deal you revenue it you seeing looking the on first deals time of you you last as ramp. that obviously growth takes we on are that in board, we're my Ravi, deals some when top came and revenue the

Ravi Kumar S

you Thank to started the hear XXXX. ramp in from you, again. in XXXX Moshe. Good to wins

they first partial a and and start back the year. last large higher have new we got it actually we year of course, impact the business, third the Of they more benefit in had end get our which second to into benefits momentum the in year, will Equally, to as more have in more in the new percentage the logos years. future mix of deals, means the

is our does sticky. So this what to us it makes really business

entering nature. deals, large off, in future. for the velocity. tail of they win they are backlog kind discretionary $X is you The mix the they neutralize the if which in the to unknown And And neutralize on of therefore, our the with what year increases million you're kind It deals. only $X fall

think of and XXXX, those 'XX the of 'XX it and actually realized. say fully be in strengthen we to XXXX to when will Otherwise, happen that continuing part deals will do discretionary. is XXXX. was I what's going the in soft deals, discretionary not flow large know it because I happened would in pretty

it not mix that -- is momentum. What then discretionary prepared the comes I be does though unknown back, we by soft, neutralized to discretionary. starts in is to If show want the it does get the mean, soft the much is it how

an start not interesting it's large So it's the deals, small then That's show the because thought about large if it's even it. I deals because if to about also deals start see momentum. will how to the revenue plateau, neutralize deals the the small

they trajectory. these And start that transition, to So this, we know well. with a pretty slower are they year, the in Moshe, first executing deals start always you with

state steady a off, they they And of to revenue. take then once get

about. good do discretionary. on So as not I know to what that. that I'm we I in shape not continue are believe certainly is worried that

Moshe Katri

Okay.

in Okay. terms part to be strategy. then I've Cognizant what that introduction always pretty And TriZetto. think first you've you the indicated numbers actions came does at look healthcare second TriZetto of doing during any That vertical? the sense. you're will for there second is that one taking reflected healthcare makes to practice. there in maybe that on that to board your a to business? intrigued and you in to And been the I related kind big us more trying see when of of Are And the -- used revive more a our of with be

Ravi Kumar S

ecosystem to go will strongest the transformation. significant which It's is for have this, the a through I Cognizant the healthcare in say Moshe, industry an market.

pole pharma So in we life are a position to provider payer management all in the economy, -- from in the benefits healthcare healthcare way sciences.

services. have an platforms of We extraordinary strength plus

million-plus approximately XXX billion TriZetto. we XXX of plus what Just look on million enrollments the order annual magnitude do basis do an an transactions. claims annual basis. interchange data electronic on X We on at of

story of an TriZetto, healthcare the percent of It's our ecosystem. have insured U.S. extraordinary the XX-plus population and through we nucleus fulcrum So goes platforms. of the

double down This to we this going journey going opportunities it and the which and the for on invest clientile be across sector our we're have a which generative seize transform and on will exciting We've an invested AI. significantly come transformational base spectrum. is on clients. So to

including generative multiple the We which embedded announcements we on year entire Microsoft partnership embedding stack. with the have our AI open last have done into piece, AI of

we TriZetto. that, healthcare strategy for sure the doubly very excited our integral I an is going am part to So are future. that be of actually about

Operator

the comes line Thind question of Surinder from next Jefferies. with Our

Surinder Thind

consulting you AI see there services way get road? the the there on is price Can component may to with that conversation command you'll color Or that a the down when clients? some it you and potential that is the acceleration this these On out you just provide more as in you differently? have services, is progresses, you new and a Can a products Is roll maybe year pricing the more? lot that? expectation

Ravi Kumar S

Sure, swim you would that's three Thank great that. lanes a say I for Surinder. question.

from because of to It implement make or all last generative do even enterprise-grade foundational foundation the the them learns optimization reinforced mile, models starts software, mile the have the language work The large the are to ability the in unlike it on learning is take funnel a through that's variety managing, create reinforced through models, after available you which performance models. to to reducing learning -- the orchestrating holding. it a things. hallucinations And the to way last governing AI and models which accuracy first market is of last from to process. goes and The cost doing you

So to lift of there heavy and foundation grade. it needed the production-grade is enterprise make a models lot take

with have a our platforms get have excited how and about have the I I'm we think seen we built, unique I to clients announced the the And helping actually we are market platforms opportunity, and we there. to what

XXX-plus have We prototypes running.

Whenever good those pipeline. monetize on the land. think to in cycles XXX-plus position have the we off, I first a trigger CapEx are swim That's We in that.

your you could is a to on. consulting of in want call it it actually way So put -- bunch we language it's the but it, things work you

on There a How how to What is to productivity. do all do it. kind which swim productivity? with clients. apply that because -- do And benefits call lane, developer I them two technology code to you the about do share of of it cycles and your say, to business to to is testing life to subsegments your would it And cannibalize from to it the design to what you writing one the I things. way switches is does does second all

is do not by are arbitrage of but or don't provocative go one an the as propose to The actually And and work. clients. incumbent, productivity to create the cannibalize second go why rather is our could we better on We something we and reasons large are arbitrage, AI. but with just our that deal and large We with is incumbent actually powered winning not story. disrupt client we pivot -- go where labor deals those which landscapes a on

are a pervasive a So it will of it our on landscapes say then where be be way applying all opportunities it be this cycle through, It would we not I are -- a be to will I will productivity will a to the my it as a would I And opportunity. slow we mentioned get meet primary -- short but from an S-curve, technology it do or all cycle is the comments. and into takeoff business, slow short the takeoff, a sharp say life applying incumbent. there to

has very technology. fast, very a it network. distribution So pervasive it's diffuses a very and good It

So excited excited staying making, I'm the about about the clients. investments we're excited prospects, relevant we're our about with how

We like also embedded it into our platforms Trizetto.

these cycles opportunities to CapEx seize AI work. of the equipped trigger are to enterprise-grade as we generative So

Surinder Thind

you're ask of are see? perhaps of do what counterquestion some given risk? resiliency, more need to as holding would the when they That's Like what that follow-up, back be, at what's guess point? much I spend take Like a this spending is here economic I seeing spend? clients tease then what willing helpful. they to out then environment. why of the And to really the Or I them can the clients on discretionary kind in how to And relative guess pull just question spectrum aren't would you more they're signaling back?

Ravi Kumar S

to would start me Jatin in. I I'll chip let So ask the spend. and discretionary say

take high If a because services industry insurance. burdened interest is interest high view and most services a with there sectors, on of sector the is rates. banking, also Remember, a the strong of which And are discretionary watch pause in financial an is these and is a That's one rates, retail you which of financial and organization. technology has those kind wait work.

dependent they on is much how what is discretionary. So the outsource

my based normally, or rates the of downwards, interest spend means positive the we also transformational is are see catalyst. there And before work if -- a change. of on my a to I've normally in and to rate Discretionary said what X X experience adjustments this when period takes see That such Let's come of is of ahead work. changes back. ours the cycles I uncertainty period shape period the in certainty. of is will a how the tied year. this repeatable off as transformational that mean interest a there start up I we see is seen have change to remarks

if I go discretionary So to starts trigger change will come uncertainty away, think the the back. to

But is The one. drop interest year are so trigger in biggest there many a back trigger year, cycle where of AI don't we know impact does can also elections, the rates the end services back. what at I It's discretionary it discretionary. the the -- parts of the financial back can to the the discretionary world,

in stability discretionary So we the that hoping drive cuts interest that on rate that based back. are sector can

to bit up year little the a for it's how not. shape of waiting come to interest back So or it's really rates I'm in say this -- whether going

Jatin Dalal

Yes.

back was to I'm always an react and in they are add all Surinder, recoveries that there to So was yield sector-specific. it's the then the is of minds current world all is decision-maker. situation as which difficult time, and -- seen the of of it of the back, we it. that quickly, the very Jatin. on And discretionary this is and is the is overall event. if know, a shock. this very from curve, an spectrum call IT you very actually It and It a down new to saw of not It's a comes big interest novel And customers go when what the are to XX little you rates event sharply, in a event the services last just how some I our not history is This high -- interest very, years, led. shops across sure weighing is -- cost across one is will terms there shop industries slowdown demand. there say we bounce down the coping it see is has where and

Ravi Kumar S

going Also, there the during the may, mix through one that is sectors. -- was one other, COVID of if was I either a discretionary event other fact that including in uncertainty. I And the -- there went gone that's course kind correction, through to in a many would that's heavy say,

on discretionary that's -- we we'll watch to year, year interesting the more and go an visibility it. be to probably on get as through probably going it's So

Operator

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

James Faucette

sounds get of Cognizant? in and that you color action competitiveness can a talk in much giving like just the pretty you're terms to you're you're of It Thank et today. and rates for right now perceiving deals But about, the the wondering confident how your all about for win market. you've appreciate wanted very larger I'm really cetera. detail Great. just the talked you there sense

Ravi Kumar S

Yes.

that large good have mean, reasons differentiated why we're holding would one a value -- gave XXXX. we pricing. deals that's on doing doing, of points year. proposition, the margins in were are our And enough good we improvement and XX I these you basis noticed XX So our we are based to this

takeout very which the high strength velocity following: together in deals. are on able what the velocity, to our with deals looking are of the vendor deals clients because is of unify consolidation we our is with these large kind line are company Our mean is cost for. these I the

you come the you unification So DNA. in together. It's velocity, need our need -- the to of

has I DNA, helped XXXX, us have significantly. energized in if So the kind of may, that I and

for I are a strong where there in clients. for are And sectors We can We wait consolidation with actually a request or can provocative to request say second capabilities. formidable those a sectors, is be don't productivity. force. would for our those We we in work we The have sectors. need

the we to very XX client. are a are over our are sticky. years I heritage,we sticky also We mean Cognizant's company of very

So CEO That lead to has those significantly. be see ideas. integral And a the able I provocative our an as of the I've us could DNA. with we part been trade as bold provocative conversations clients. and helped with company, of that

may. if extraordinary have an I front-end We team,

deliver built as well, but just also I'm very The third, in hold us proud we deals say, deals. last about these margins that the has muscle, would which X to year. I not these execution And execute our it. our we is helped

provides would I support share differentiated value I AI, in thinking to board about build to help uniquely opportunity benefits by automation have, a of one, actually the AI us. extraordinary related would led which can construction to also say, and proposition the we to last The productivity say, the mix and is deals provocative these

or which deals. So continue to us like are on X win that these would to helped in XXXX. say I I And X would momentum the have things

James Faucette

the -- head wanted then in it's slightly. is to couple you've And of of ask interesting net count quarters, each last increased great. That's

of the just maintaining I X% usually, a that? your taken nature as as at head in for much talk anticipation larger that about take think thinking about we And count much positive you've even adding about should guided get being kind that's face indicator. these the in booked? end the it managing how you're you're head how and to count bottom as deals Can as of how just and discretionary range Just potentially what is you down of this from a the to thinking of managing is that you're trying already year, come people you're back? smaller could of And just that? sense serve retaining more and deals

Jatin Dalal

Yes.

two seeing really certain that are total plant this that really skill both we to you do addition and systematically sets has comes And If So retaining flexibility to is That's both flexibility is growth should growth you for one. the have a on James, our come. of the contributed on the to certain bench. of sufficient sufficient some small this combination back, that the part addition pyramid headcount.

Ravi Kumar S

cast X improved. I I Jatin how time, XXXX to attrition. gives has were what back player to we should us ready plan. attrition we done to at at it for story any look have said, of where also you now we in have the well quarter That industry-leading add it because an we really be -- significantly comes fulfill. you to mean we retention extraordinary with on to mean are helping and our point discretionary on the start just the now, have Also, and is capacity a top-notch remember, at

Operator

of Ramsey Our the line next from question El-Assal Barclays. with comes

Ramsey El-Assal

And settled much account maybe external I into bake difficult relative for your are normal you if mean is, on year more now guess to comment to right environmental, I kind conservatism underlying ask you question see you at that environment. could are factors this I have that the 'XX to I more you in a relative or to through point? having wanted visibility to this visibility and of how into guess guidance fiscal

Jatin Dalal

is what beginning the Sure, of where know. we know don't a Ramsey, year this typical we don't

growth of -- If have the a mathematically, if certain you you during see that the year. we would assumed really there our sequential course is see dissect guidance, that growth you

remains that we Ravi opening it's walking the to start with in there So environment -- year, certainly a but in indicated as certain growth remarks. uncertain, his and are is slower assumption a

Ramsey El-Assal

Got it.

generative taking a needs on Could extent Okay. your much give be on technologies work are AI? at quick done the point the of to view And me. start then for advantage also still this underlying you sort which embrace How clients of prepared us to to to for follow-up enterprises technology? new

Ravi Kumar S

service continuum here the they're These two opportunities of AI, had remember, most which areas more had is I down the second because customer service. adoption Customer call The to we We would Employee also we there. generative see are potential, the and robotic where it. areas them chain say, areas, and in grade. two highlight I some to confidence. amplifying AI seeing employee human And want when as process always is faster is we uniquely are the ready. is the productivity production big productivity. getting automation,

of a I and I plays like role. system think integrator with important the mentioned, things the they're an grappling as Cognizant is need

accuracy things of remember, the explainability the traceability with the which so from is this computer, of could models, they're sets models, is that the coming the mean, grappling which the be means The thing out of to that's different I but explainability the it means with that is it is data I output, grappling other ways. they're building call behind logic, think you -- I to make enough. in responsible which it hallucinations, And have we is explainability what need the mean, judged.

we and did other economics it is with The jobs some it the of But the grade. XX% it one will studies get with which some go -- that jobs thing grappling more jobs, will disrupted production within Oxford more, will will jobs which And versus can opportunity performance disrupt get will they is we jobs are actually the less. so of will called exposure score make disrupted created disrupt we gives cost of will an to disruption. us get tasks figure out we through disrupted. The jobs something

two cross level, pervasive prepared Needless be But would these bridge the one are high of technologies on to more I at our to be where most probably customers areas embracing the into broad a this to AI the are say, times. going is going generative in say, to enterprises.

So prepared it I'm getting integrator. to -- for about means prospects, equally the I'm the I'm excited system what but

Operator

our Ladies turn management. to concludes like session. you. call and gentlemen, Thank this the I'd question-and-answer to back

Jatin Dalal

in look all Thank to Great. Cognizant call. for quarter. for forward We you joining up interest catching you. and your Thank our next

Operator

conference. concludes This today's

disconnect. You of may now Enjoy the rest evening. your

Cognizant Technology Solutions (CTSH) 6 Feb 242023 Q4 Earnings call transcript