Thank you, operator, and good afternoon, everyone. By now you should have received a copy of the earnings release and the investor supplement for the company's second quarter 2023 results. If you have not, copies are available on our website, cognizant.com. The speakers we have on today's call are Ravi Kumar, Chief Executive Officer; and Jan Siegmund, Chief Financial Officer. Before we begin, I would like to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements. These statements are subject to the risks and uncertainties as described in the company's earnings release and other filings with the SEC. Additionally, during our call today, we will reference certain non-GAAP financial measures that we believe provide useful information for our investors. Reconciliations of non-GAAP financial measures where appropriate to the corresponding GAAP measures can be found in the company's earnings release and other filings with the SEC. With that, I'd like to turn the call over to Ravi. Please go ahead.

Thank you, Tyler. Good afternoon, everyone. I would like to discuss four topics with you today. Our second quarter results, the demand environment of comprehensive commitment to generative AI, and an update on our long-term priorities. We made continued progress during the quarter in what remains an uncertain global macroeconomic environment. Q2 came in at $4.9 billion at the high end of our guidance range. We were pleased to return to sequential revenue growth of more than 1%. Year-over-year Q2 revenue showed a modest decline of 40 basis points, or essentially flat in constant currency. Our adjusted operating margin was 14.2%, and adjusted EPS was $1.10. We recorded another quarter of strong bookings growth, 17% year-over-year, ending quarter two with record trailing 12-month bookings of $26.4 billion. A book-to-bill of 1.4x. Approximately 30% of our in-quarter Q2 bookings were large deals, and five of these deals exceeded $100 million each. Our bookings continue to be a balanced mix of renewals, extensions, and new opportunities. The leadership team and I remain intensely focused on talent. So I am glad to see the continued reduction in our attrition, with trailing 12-months voluntary attrition for our tech services business declining to 19.9%, down 3 percentage points sequentially and 11 percentage points year-over-year. While Jan will cover our performance at a business segment level, I want to offer a quick word about financial services. Our quarterly year-over-year revenue decline in the segment reflects the soft market and continuing weakness in discretionary spending. In response, we are transitioning more existing work in the sector towards managed services as many clients remain focused on driving cost takeout, vendor consolidation, and productivity initiatives. We are also stepping up our engagement with fintech companies, which we believe offer a great opportunity for digital transformation. And we are strengthening our capabilities with a goal of capturing discretionary spending on transformation work when it returns. For example, we continue to support the modernization of S&P Global's Configure Price Quote System to enable end-to-end digitization in what we believe is the world's largest CPQ implementation on Salesforce. And we are collaborating with Max Life Insurance to launch an innovation and development center in Chennai to help accelerate the digital transformation efforts. With a flexible client-centric operating model, we can assist clients across industry sectors, take out costs, consolidate their vendors, and achieve both technology and operational efficiencies which provide opportunities for large deals. We can also help them develop digital platforms to deliver richer and more personalized experiences to their customers. What's more, we recently extended a partnership with Gilead Sciences. This agreement includes the renewal and expansion of Cognizant services for a total expected value of $800 million over the next five years. We'll manage Gilead's global infrastructure while leading digital transformation initiatives designed to enhance their overall client experience and enable faster time to market for the products. We will apply the power of GenAI and Intelligent Automation to help improve Gilead's customer service experience and assist in driving greater manufacturing efficiencies. To support clients' transformation leads, we've established a distinctive position across industry using a platform-centric approach designed to speed clients' consumption of technology. You've seen the emphasis we've given to this platform approach. For example, Cognizant, TriZetto and healthcare, our shared investigator platform in life sciences, asset performance excellence in smart manufacturing, and Car-to-Cloud in automotive. Last quarter, we launched two new platforms with applications across industries, new royalty operations, which enables AI-led autonomous operations and Cognizant Sky-grade, designed to help clients maximize the full potential of cloud. Turning to AI in quarter two, we expanded our platform portfolio further with Cognizant Neuro AI. It's designed to speed the adoption of generative AI and harness its value in a flexible, secure, scalable, and responsible way. With Neuro AI, we are helping clients advance from identifying company-specific use cases to operationalizing AI. I should point out that generative AI is a natural evolution of a workforce crossover with cognitive AI applications in data analytics services. To extract value from GenAI, the data must be curated, trained, modernized, and made production-ready. You also need a deep understanding of clients' data estate, data architectures, data usage patterns, and business applications of the data. Our current approach leverages third-party foundational models, enhances them with our platforms and IP, and then fine-tunes the models for clients. Today, we have more than 100 active client engagements in various stages with a focus on cognitive and generative AI, as well as hundreds more projects using AI services within the context of delivery. We're designing generative AI offerings for industry-specific solutions, cross-industry use cases in productivity enablement, under themes like transforming code processes, improving the customer and employee experience, product innovations, software and coding, and knowledge management, to name a few. For example, for one of the world's largest healthcare product companies, we are helping to speed up the research process by deploying GenAI to author scientific content. We developed a workbench that uses GPT models to summarize and generate content from unstructured and structured data, such as laboratory information management systems, with the aim of automating the generation of regulatory content. For a top-20 property and casualty insurer, we have helped frame its GenAI strategy and conduct real-world tests based on company data. For example, we built a GenAI-based digital virtual assistant that analyzed large loss complex claims submissions. By referencing the insurer's claim data, the virtual assistant was able to guide a human claims handler to gather nearly 100% of missing claims information. This simple application is expected to produce millions of dollars in savings through improved operational efficiency and reduced claim costs. In addition, we signed a new multi-year agreement with Nuance Communications, a Microsoft company, to help scale the resources for Nuance's Dragon ambient experience operations. This solution is at the forefront of conversational AI and ambient clinical intelligence. Let's turn to the essential role partners play in delivering our AI capabilities. We expanded our alliance with Google Cloud to help enterprise clients create, migrate, and modernize their AI journeys, and offer clients innovative industry solutions founded on the tenet of responsible AI. Our investments in developing GenAI capabilities include launching the Cognizant Google Cloud AI University, a program designed to train 25,000 Cognizant professionals on Google Cloud AI technologies. We'll offer this program to our clients as well. And earlier today, we announced that as part of our expanded partnership with Google, we'll be building on Google Cloud's Generative AI technology with Cognizant's AI domain expertise to create a healthcare large language model. This LLM is designed to simplify and improve the accuracy of complex healthcare administrative tasks and strengthen business outcomes for healthcare organizations. We've also expanded our relationship with Microsoft to deliver industry solutions and enable AI-led transformation. This includes expanding the focus of our Microsoft Center of Excellence in AI and other next-gen technologies to drive competencies across architecture, technology leadership, value delivery tools, and enablement. Cognizant and ServiceNow have announced a strategic partnership to accelerate the adoption of AI-driven automation across industries. Our industry expertise and solutions integrated with ServiceNow's intelligent platform for end-to-end digital transformation will bring to market offerings that are designed to solve complex problems, automate operations, and enhance employee as well as end-customer experiences through the use of AI. Now, a quick update on our three long-term performance objectives: becoming an employer of choice in our industry, accelerating revenue growth, and enhancing operational discipline. Let's start with the employer of choice. During our Q4 call, I talked about how tightly linked the client and employee experience are, giving Cognizant the opportunity to create self-reinforcing cycles. Highly engaged talent with a passion for clients and a growth mindset attract the best clients. These clients, in turn, attract more of the best people, keeping the flywheel turning faster. Now, two quarters later, we are seeing the early benefits of this interdependent relationship between employees and clients. Our trailing 12-month voluntary attrition has been trending downwards for the last four quarters. And our just-completed annual people engagement survey showed meaningfully improved engagement results. Among the many questions the survey posed to associates, we saw multi-point increases in three areas strongly correlated to engagement. Would you recommend Cognizant as a great place to work? Are you excited about Cognizant's future? And do you plan to be working at Cognizant two years from now? On the client side, data from our project-level client feedback process through the first half of this year shows solid improvement over the previous period scores as well as our best net promoter score since launching this program in 2021. I see us making real progress on creating a self-reinforcing cycle. From day one, my commitment to our associates has been to cultivate a diverse organization that reflects the world in which we operate. Our top priority has been to increase a diverse talent, including at leadership levels. I’m delighted to say that in the past couple of months we have appointed seven women to fill strategic roles at the Senior Vice President level. We are resolved to help all our associates bring their best selves to work, and that means focusing on all aspects of their Cognizant experience. For example, we develop talent early through educational partnerships and apprenticeships. We invest heavily in upskilling and reskilling current employees through our award-winning leadership and development ecosystem. We also employ innovative train-to-hire initiatives such as Cognizant's Skills Accelerators aimed at people seeking to kickstart a technology career in the U.S. and the Cognizant internship program for technology professionals looking to restart their careers. Our next priority is to accelerate revenue growth, which is the absolute focus of the entire management team. We are differentiating Cognizant in large-deal opportunities by scaling our capabilities for cost takeout and optimization and focusing more on managed services. And we continue to see a strong pipeline of opportunities in the cost and efficiency side. Given the groundswell of interest in generative AI, the number of projects we have underway focused on cognitive and generative AI is generating a new wave of opportunities for us. Accordingly, we expect to invest approximately $1 billion in our generative AI capabilities over the next three years. Our third long-term priority is to enhance our operational discipline. We are working to fortify day-to-day business execution and optimize the cost of delivery by driving higher productivity powered by advances in tooling platforms and automation technologies, and by improving our operational labor in areas like billable utilization. Our NextGen program, which we announced last quarter, is on track. We are making progress on removing structural costs as we continue to simplify our operating model and realign our office space to the future of hybrid work. In our last call, I talked about a plan to redistribute some of our development centers from India's largest cities to smaller cities. I'm pleased to announce the first phase of this shift with the planned opening of two new centers, one in Bhubaneswar and the other in Indore, India, which offer great talent pools. Keep in mind that the NextGen program's overriding aim is to generate savings to invest in our people and our growth. Jan will provide additional details in his remarks on the NextGen program. In closing, I'm now seven months into my tenure as CEO. I've met with more than 200 clients, dozens of our partners, and through in-person and virtual town halls with most of our workforce. I've also made a point to continuously solicit ideas and perspectives from our top thousand leaders on strategic topics of importance to our future. Further, a company-wide grassroots innovation movement launched earlier this year, Blue Bolt, has led to such a surge of fresh ideas with more than 32,000 generated so far that it's now serving as the company's innovation engine. I'm convinced Cognizant's path to winning in the marketplace runs through fully embracing our heritage and DNA. We are leaning into our heritage at the intersection of industry and technology, a flexible client-centric operating model, and a distributed delivery network that brings together global and local capabilities. All in all, we've been making good progress, but I recognize how much more work lies ahead, continuing to build on our growth imperatives is the goal on which everyone in the company is focused. I especially want to express my heartfelt gratitude to all our associates for the extraordinary work they do each day. Before I turn the call to Jan, I want to comment on his plans for the future. Jan let me and the board know his intention to retire from Cognizant early next year. Jan has been a wonderful business partner to me, and over the past three years, he has played an instrumental role in designing and executing a strategic financial and operating plan while developing superb talent within our finance organization. As we begin the search for the company's next CFO, I'm grateful for Jan's willingness to work closely with his eventual successor to ensure a smooth transition. With that, I turn the call over to him to provide additional details on the quarter. Thank you.

Thank you, Ravi, for the kind words. I'm proud of what we have accomplished over the last three years, including our work together over the last seven months. I'm looking forward to continuing our partnership in the months ahead while the search for my successor is underway. Until then, it's business as usual, so with that, let's turn to our second quarter results. We delivered second quarter revenue at the high end of our guidance range and adjusted operating margins above expectations. We were pleased to deliver another strong quarter of bookings growth, driven by larger and longer-duration deals. Our pipeline for larger bookings also remains strong and is up meaningfully year-over-year. Additionally, our NextGen program is on track and yielding early savings through our efforts to structurally reduce our cost base and fund investments for growth. Moving on to the details of the quarter. Second quarter revenue was $4.9 billion, representing an increase of over 1% sequentially and a decline of 40 basis points year-over-year, or roughly flat in constant currency. Year-over-year growth includes approximately 130 basis points of contribution from our recent acquisitions. Bookings growth in the quarter was again driven by a mixed shift towards larger deals, resulting in longer average duration of our bookings. We are pleased with our bookings performance in the quarter and are focused on building momentum in the quarters ahead. Consistent with the first quarter, we have continued to experience softness in smaller, shorter-duration contracts, which we attribute to weaker discretionary spending. The translation of bookings to revenue growth is impacted by this change in deal mix. As duration has increased, the conversion to revenue will be longer, but helps to improve our forward visibility. Moving on to segments results for the second quarter, where all growth rates provided will be year-over-year in constant currency. Within financial services, revenues declined 5%, which reflects a softer overall demand environment and weak discretionary spending. As we navigate this environment, we have continued to strengthen our leadership team and sharpen our client engagement. While our pipeline for work related to cost takeout and productivity-led initiatives remains healthy and meaningfully higher than prior year period, we expect the uncertainties of the macro environment to continue to impact the pace of client spending over the next several quarters. Health sciences revenue grew 2%. Growth was again driven by strong demand from healthcare clients for our integrated software solutions, which increased mid-teens year-over-year. While the life sciences were down year-over-year and impacted by softer discretionary spending, we experienced strong sequential growth driven by increased volumes with existing customers. Products and resources revenue grew 4%, reflecting the benefit from recently completed acquisitions, ramp-up of recent wins, and demand from automotive and travel and hospitality clients. This was partially offset by softer discretionary spending across industries. Communications, media, and technology revenue declined 40 basis points, reflecting softness among both technology and our communications and media clients. We expect growth to improve in Q3 as recent new bookings have already begun to ramp. Continuing with year-over-year revenue growth in constant currency, from a geographic perspective in Q2, North America revenue declined 2%, reflecting softness within our financial services and CMT portfolio. This was partially offset by growth in health sciences and products and resources. Our global growth markets, or GGM, which includes all revenue outside North America, grew approximately 5%. Growth was led by Europe, which grew 6%, and included strong growth within CMT and products and resources, particularly within automotive. Now moving on to margins. During the quarter, we incurred approximately $117 million in costs related to our previously announced NextGen program. This negatively impacted our GAAP operating margin by approximately 240 basis points. Excluding this impact, adjusted operating margin was 14.2%. Operating margin included the negative impact from an increase in compensation costs, primarily the result of our two merit cycles since October 2022. This has impacted both gross margin and SG&A. This was partially offset by tailwinds from the depreciation of the Indian rupee and higher utilization. It also included an approximate 60 basis points benefit from an insurance recovery related to our previously disclosed 2020 cyber incident. Our GAAP tax rate in the quarter was 21.1%. Adjusted tax rate in the quarter was 21.7%. Our effective tax rate included a discrete benefit from a settlement related to U.S. state income taxes. Q2 diluted GAAP EPS was $0.91 and adjusted EPS was $1.10. Now turning to the balance sheet. We ended the quarter with cash and short-term investments of $2.1 billion or a net cash of $1.4 billion. DSO of 75 days increased two days sequentially and one day year-over-year. Free cash flow in Q2 was a negative $32 million, reflecting the previously disclosed impact from the change in U.S. law that we discussed earlier this year. This change negatively impacted Q2 free cash flow by approximately $420 million, which included tax payments of approximately $300 million related to 2022. This impact was largely in line with our expectations and we continue to expect free cash flow to represent approximately 90% of net income this year. During the quarter, we repurchased about three million shares for $200 million under our share repurchase program and returned $148 million to shareholders through our regular dividend. Year-to-date, we have repurchased approximately six million shares for about $400 million. At quarter end, we had $2.4 billion remaining under our share repurchase authorization. Turning to our forward outlook. For the third quarter, we expect revenue in the range of $4.9 billion to $4.94 billion, representing a year-over-year increase of 0.6% to 1.6%, or a decline of 50 basis points to an increase of 50 basis points in constant currency. Our guidance assumes currency will have a positive impact of 110 basis points as well as an inorganic contribution of approximately 100 basis points. For the full year, we are reiterating our constant currency revenue growth guidance. Our range is slightly wider than our historical practice reflecting a heightened level of uncertainty and the recent pace of client decision-making. For 2023, we expect revenue of $19.2 billion to $19.6 billion, representing a decline of 0.9% to a growth of 1.1% or a decline of 1% to growth of 1% in constant currency. Inorganic contribution is still expected to be approximately 100 basis points. The midpoint of our guidance suggests a softer fourth quarter relative to historic norms as we anticipate softer demand and more volatile discretionary spending patterns driven by macroeconomic uncertainty to continue throughout the end of the year. As I mentioned earlier, the NextGen program is on track and our assumptions for cost savings are unchanged. However, we now expect to incur $350 million in total charges versus $400 million previously. This reflects our assumption for lower employee separation costs as a result of voluntary attrition trends. We now expect to incur approximately $250 million of NextGen costs in 2023, including approximately $100 million relating to employee severance and an unchanged $150 million related to the net consolidation of office space. Moving on to adjusted operating margin, our guidance is unchanged at 14.2% to 14.7%. Our margin outlook is impacted by several factors but primarily the negative impact from recent merit cycles. It also reflects our assumption for NextGen savings and growth investments including the dilutive early impact associated with large deals. We anticipate 2023 interest income of approximately $115 million versus $85 million previously reflecting the higher interest rate environment. The adjusted tax rate is expected to be in the range of 23% to 24% versus 24% to 26% previously due to several discrete items in the first half of the year. In 2023, we continue to expect to return approximately $1.4 billion to shareholders through share repurchases and our regular quarterly dividend. We continue to expect full year average shares outstanding of approximately 506 million. This leads to our full-year adjusted earnings per share guidance of $4.25 to $4.48 versus $4.11 to $4.34 previously. With that, we will open the call for your questions.

Thank you and good execution in the quarter. I think my first question is with regards to the bookings. If you can provide maybe a little bit more color with regards to the nature of bookings, the nature of discussions with clients, and maybe even any CCD versus ATV balance that you can maybe talk about. Because I think the bigger issue here is not the bookings but the conversion.

Thank you, Ashwin. This is Ravi. We had a strong quarter with a 17% year-over-year growth in bookings. We have previously discussed that our focus is on two main areas for large deals: transformation and efficiencies related to productivity and cost reduction. Currently, the deals in the market are predominantly leaning toward efficiency, cost reduction, and consolidation. We are pleased that we are starting to secure these deals and convert them into future revenues. It's important to note that these deals typically have a longer gestation period compared to smaller or transformational deals. We secured five deals exceeding $100 million in total contract value during this quarter, including two renewals, one renewal with expansion, and two new deals, providing a healthy mix in our bookings. The advantage of pursuing large deals is that they create momentum, which can positively impact revenue in subsequent years, even if the initial period is lengthy. It would have been beneficial to have a larger pipeline the previous year to contribute to this year’s results. Creating this momentum is essential. In financial services and most sectors, we have observed reduced discretionary spending on smaller deals, aligning with our observations. We remain enthusiastic about our capability to win these opportunities and establish the necessary organizational infrastructure to execute them, including the productivity improvements we have integrated into these deals. Jan, would you like to add anything?

Yes. Ashwin, to your question about translating those bookings into revenue, I think intuitively you have already touched on one of the components of the characteristics of our bookings this quarter, namely that, on average, the duration of the deals that we signed up in the last year has very much lengthened. So we have been signing up longer-term deals, on average, with a higher deal value. We actually saw an absolute decline in smaller deals below $5 million in our pipeline, and that softness in discretionary spending and smaller-type deals was just offset by the really excellent performance that we had on the larger deal volume, and that led to the 17% overall bookings growth. But with respect to translating it into revenue, the actual contribution of this booking volume just to give you an example for the rest of the year, revenue is actually lower than it was in the comparable quarter. So we have really built a pipeline for longer-term revenue streams in the future, which obviously gives us good comfort into the quality of revenue stream going forward, but it also explains why we are not seeing immediate uptake in our revenues as these bookings will take time to translate into revenue.

Thank you, that's very useful. This second question on margins, pretty solid performance here and the question with regards to why you might not increase the full year range. I think Jan you answered part of that question in your prepared remarks when you said that there's a ramp cost. I just want to make sure there are other things, investments you're making, from an R&D perspective perhaps into GenAI capabilities or things like that, investment payment, are there non-deal related factors also included in your decision to keep the margin unchanged.

Yes, I think the starting point for the market discussion is for the rest of the year. The one thing that's different compared to prior periods is that we won't have an October quarter for a merit cycle this year, because as you know, we moved our merit cycle forward into April. So that's going to be important as you build a quarterly model. Secondly, I would use this moment to talk a little about the progress we have been making on our NextGen initiative. We have been recording severance costs in the quarter, as well as costs related to the restructuring of our real estate portfolio, and we're going to start seeing increased impact from the NextGen action relative to our people in the third and fourth quarters, which gives us basically the room to offset some of the pressures that we're seeing, namely some of the expected pressure on the large deal rollout and letting those larger deals season. And I think the general expectation, given the higher uncertainty in our business environment, could create some kind of unspecified yet to be seen pressures in our portfolio. We have seen a number of clients reach out to us due to their own economic pressures. So we do see an economic environment in which there is pressure, and so it turns out that NextGen is well-timed to help us through this, but it would be too early to celebrate any false success on that but we are moving along in the execution of that program which gives us a bit of confidence to just reaffirm the operating margin outlook.

Hi, good afternoon. Thanks for taking my question. Oh, follow up. Maybe first on the GenAI thread and Ravi you commented extensively on what at Cognizant you're doing on GenAI externally with partners and to help clients transform their businesses. Can you comment maybe a little bit more detail on how you are deploying GenAI internally at Cognizant and how you see it over time; you know, being able to transform your business operations and maybe give you more competitive edge relative to peers. Thank you.

Thank you for that question. I did extensively speak about it because it is in the middle of everything we do in the company today. I see this in three parts. The first part is how do we apply it to our business to run our operations, which is akin to eating our own dog food. The second is how do we make sure that we build our operating model with GenAI? How do we make the average developer's productivity increase multifold? How do we make sure that we build the platforms and instrumentation, the technology we needed? I also call it the ability to leverage technology. I mean, over the last 40 or 50 years, tech services companies did labor arbitrage and capability arbitrage. I would say this is our time to actually do an arbitrage on technology. The more instrumentation we create, the more we can enhance our model to achieve efficiency with productivity gains. The question is how much of the productivity has to be shared with our clients so that we stay competitive and still keep a part of it for ourselves. So I'm not as concerned about a smart developer; I'm concerned about the average developer, how to lift productivity so that the organization's overall productivity goes up. That is my second part regarding GenAI. We have extensively worked on building those platforms, and we have also started to partner with big tech companies. I would say that we made an announcement with Google to train 25,000 people. We have made great progress on it. We ran an initiative with Microsoft on GenAI and the co-pilot initiative. Today, along with the earnings, we also timed a large language model in partnership with Google. I think that's a significant step. I mean, in general, we are curating data, leveraging our expertise in healthcare, and the asset we have and our install base in that industry. We thought it was a good move to actually build a large language model with Google. Now the third part of the GenAI story is, how we actually embrace it with our clients. I've spoken about a couple of examples in my earnings script, which is starting with a client in financial services. We have one on healthcare. All of those need front-end consultative skills to start with and platforms to support it. We almost have 100-plus early engagements either in proof-of-concept or prototype models, where we are experimenting on how to embrace generative AI with our clients. These 100 early engagements are in various areas, most notably in customer service. I would say the initiatives are primarily related to efficiency, productivity, and better experience. So I'm excited about all that we've done. We've also allocated $1 billion over the next three years to continue our investments in this space, and we want to stay ahead of the curve and be the cutting-edge partner that our clients are looking for.

Terrific. Thank you. And then maybe for my question, my follow-up. I guess thinking about it as I'm being sad about Jan’s departure. But Ravi, maybe back on you know that you've been at Cognizant I guess coming up on a year or so. How are you thinking about kind of shaping the senior executive team at Cognizant? Are there some other kind of senior leaders you would point to that you're bringing in and that you're thinking about finding a replacement for Jan, sort of what's the profile of folks that you're looking at and bringing in, given the priority you highlighted about making Cognizant a top choice and an employer of choice? Thank you.

Thank you for that question. Jan is going to be with us until we identify a new CFO, and we'll have some overlap period to it, and he's been kind enough to partner with me in the last seven months. I've not spent a full year yet, but in the last seven months, I'm very hopeful that as we finish the transition, I will continue to have his support for the next few quarters. On leadership, we have a very healthy bench. As I put my structure in place, I am excited about promoting and progressing people inside the company and giving them opportunities. In fact, we have a sizable workforce that has spent more than seven to eight years at Cognizant, and I'm actually leaning toward building that leadership from within. We're also excited about Cognizant employees coming back. I mean, some of the leadership that left us in the last few years, which we believe are invaluable, have returned to call Cognizant their home. I have one leader who's come back to do my Industry Solutions Group. I have another leader who has returned to run my infrastructure sales team. I'm also excited about other external hires we've made. We've hired a leader for our telecom business. So, the excitement about being part of this journey allows me to straddle the three areas: looking for people inside the company who can take up those roles, and I think we have a robust bench of people who have been in the company for a long time, and I'm excited about grooming them into future leaders. The second is bringing back some of the people who want to return, and we believe they will add significant value to our future, and of course, external hiring as well. In fact, I recently hired a senior leader for managing my partner organization. So we have made good progress in assembling a leadership team to support us for the future.

Hi, good afternoon. Thank you. So Ravi, I wanted to follow up with a demand question here. Just did you get a sense of any real changes in demand KPIs over the past three months? Or would you say it's been largely consistent as it relates to the level of macro and spending uncertainty that you have been conveying here over the course of 2023? And I guess based on these current client conversations, are you getting any sense of how long you anticipate discretionary spending to remain under pressure?

That's a great question, actually. I mean, the demand profile has certainly been very volatile. I mean, if you are capturing opportunities related to discretionary spending, capturing opportunities related to future transformation of enterprise landscapes, it's either been uncertain or it has diminished in some areas. And that's one of the reasons why Jan mentioned that we have seen a reduced volume of smaller deals, which is true for the market situation. Of course, Financial Services is the most impacted, but we do see that in other sectors as well. I equally believe it also opens up an opportunity in places to consolidate. It opens up an opportunity to proactively approach our clients who are concerned about costs and provide them with a value proposition that appeals to them where their total cost of ownership decreases. We have been proactive in this process. It's a win-win value proposition. So I'm seeing more of those deals, and I'm doubling down on those ventures, which enables me to maintain a healthy large deal pipeline. And this presents us with an opportunity to even proactively pursue some of the business. For instance, one of the deals we announced is with Gilead Sciences, which is an existing customer. Not only did we renew the contract, but we also secured an expansion on it. The key point there is that in the past, these consolidation initiatives were driven by a smaller productivity attached to technology and by a larger productivity driven by the efficiency of our labor model, including offshoring and maintaining a better ratio. I think we have a unique opportunity to leverage that into technology arbitrage, which I discussed earlier, allowing us to deliver better productivity and share the benefits with our clients. Therefore, I see two swim lanes: one that has somewhat diminished and another that continues to show positive growth. The goal is to double down on the area that is showing traction to offset the losses elsewhere. However, discretionary spending remains weak, and that is something I want to stress.

Understood. I appreciate all the insights. And then just shifting to the workforce. I understand headcount is down slightly quarter-over-quarter, primarily due to the NextGen flow through. Just thinking forward into the second half, is it fair to assume this workforce level remains relatively flat to down, just given the optimization in the workforce and utilization?

The way I see it is there is opportunity for us to increase billable utilization, and I think there is some more headroom for me to do that. As I continue to do this, we all want to reach a point where we maximize increased utilization. That's when you'll see a turn in how we need to expand our headcount to add more billable personnel. I previously said this last quarter that there was capacity for us to heighten utilization; and that has also contributed to our margin trajectory. I think we have additional capacities to enhance our operational efficiency to run our firm so that we can arrive at a point where we can begin to increase our net headcount. It is also crucial to mention that we have also noted a positive trend with regards to attrition. In fact, we ended up with 19.9% on a trailing twelve months basis, which is 3 percentage points lower than last quarter and nearly 11 percentage points down year-over-year. As we continue to keep that down, it will also help us maintain our headcount. By the time we conclude the NextGen cycle, it will further assist us in our efforts. Therefore, I believe there is still headroom for operational efficiency to increase billable deliveries before we see a rise in headcount.

Hi, good afternoon. My name is I'm dialing in for Rayna. I had a question about generative AI. While the advantages of GenAI have been extensively covered, we haven't discussed the potential risks as much. Considering that GenAI could enhance internal productivity, do you think there’s a risk to revenue over the medium term due to shorter contract lengths or pricing pressures?

This industry has always had productivity tools. If you go back to the last 20 or 25 years, productivity tools have served as a differentiator, and it has been well incorporated into our estimation model and subsequently our execution model. In addition to labor arbitrage, these productivity tools are a primary reason why our clients typically select us because we have the capability, capacity, and productivity tooling necessary to help deliver projects. I would argue that the rise of automation technologies over the past five years, including robotic process automation, has become an ingrained element of our services. I want to highlight that the universe we operate within is no longer confined to tech expenditures of enterprises. Instead, it's about operational expenditures as technology is now woven into operations. Therefore, embedding these tools has become second nature to the industry as well as Cognizant. The ones who adopt these tools extensively are the ones who reap the benefits, and they subsequently embed it into their estimation models. These models then enable them to remain competitively priced and win more business. As they succeed in winning business, they continue striving for even better engineering to stay ahead of the competition. GenAI presents a larger inflection point. Although it's not entirely different from the existing paradigm, it's a more significant shift. I firmly believe, and on behalf of Cognizant, I suggest that we embrace it fully to turn it into an opportunity for the future. If we don't harness it, it could become a threat. Embracing it and creating the technology arbitrage I've mentioned earlier allows us to engage our clients in ways that even prompt them to consider outsourcing where they might otherwise resort to in-sourcing. I'm genuinely optimistic about the potential opportunities ahead, and I view this as a seismic shift in our operating model.

Hi, I'm just curious as to — in terms of the environment for the second half, what do you see as the factors that could put you, say, towards the higher or lower end of the guidance, with furloughs contemplated potentially for the fourth quarter?

We try to give guidance that reflects at the midpoint our true expectations of what we can achieve. So that's our core belief. The elements that we are monitoring closely in the next couple of quarters include the implementation scaling of some of our large contracts that we signed. Those are complex deals that need to be executed in collaboration with our clients. Challenges with these projects can lead to delays or yield positive results. This is something that I am observing very cautiously. Certainly, there is a theoretical possibility that some of these projects could scale a little faster than we expected, and that would confer some upside. However, we have also encountered economic instability affecting us, and there is always the risk of unpredicted negative news emerging. Certain deals may be canceled or downscaled, or the smaller deals may simply vanish. The overall economic climate and the sentiment among our clients, and Ravi just conveyed his assessment, indicate that this pressure will likely persist in the final two quarters of the year concerning discretionary spending. This casts some pressure on our outlook. However, we are fortunate to have the revenue from large deals as part of our revenue mix, which unlike last year, is a truly incremental opportunity for us. But as with all, we are experiencing some downward pressure in the remainder of our portfolio. I believe that I have provided a fair and balanced outlook based on those expectations. Yes, I think the one that we're trying to signal in my comments is that we feel that for the next few quarters, we'll certainly sustain financial services performing below our expectations. I hope so, but the reality is that the sector has shown weakness across the board in our industry. I do not anticipate that will change. We do see some strength on a relative basis in healthcare due to our strong market position with clients in that area. So those would be the major factors. These trends are consistent with what we've observed in the first two quarters of the year.

Hi, thanks so much for taking my questions. And Jan, congrats on the retirement news. I want to ask on the booking success, especially on the larger deals you have been discussing here. What changes are working? Is there a way to rank that for us because we get a lot of inquiries on pricing, of course? Where does pricing rank among all the factors concerning winning larger deals? And is there any impact here on gross margins for the second half to consider?

From my perspective, pricing is indeed a significant factor. The vast majority of these deals are competitive, and pricing must align with client expectations. That's essentially table stakes. The commitment that the company brings to the table as we compete for these large deals, from Ravi at the top to the entire team, from our markets to our integrated service lines, is truly different and has influenced our successes in securing these deals. Our clients have observed the level of commitment and the importance we place on their specific requirements, which is reflected in the access our teams have during the process, along with the quality of our solutions. I would argue that these deals we have secured this quarter, and starting from the beginning of the year, are geared more strongly towards traditional agreements, emphasizing cost takeout and some consolidation, which represents a solid portion of the wins.

Yes. So large deals come with a rhythm of their own. We have ensured that we have outreach to our partners, hyperscalers, deal advisories, and a variety of other stakeholders in the mix. Secondly, our ability to establish institutional infrastructure is crucial because many deals do not merely require substantial investment upfront; they also require significant downstream execution. Therefore, pricing them competitively is critical, but we must also ensure that we can deliver them while maintaining margins. Our expertise in bringing all of that together had previously existed, but I have consolidated and strengthened it further. The entrepreneurial spirit to proactively present our clients with provocative opportunities that create a win-win situation has equipped us to foster a growth mindset or large-deal mindset. I firmly believe that this has now been integrated into our company's competencies. As we continue to invest in deal infrastructure in reaching the market, we also ensure we maintain the mindset necessary to support our clients' bold visions while building out robust downstream infrastructures such as AI-led productivity. This is vital. The deals may be traditional, but the levers we pull could be relatively innovative, using automation and AI to create seamless operations and establish elevated productivity both for our clients and for operating our businesses.

Great. Thank you very much, and thank you all for joining us tonight. We look forward to catching up with you on our next earnings call. Talk to you soon.

This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.