Cognizant Technology : to Present at the Bank of America Securities 2025 Global Technology Conference Transcript

Published: 2025-06-06 10:23:07 ET CTSH

Published on 06/06/2025 at 10:23

04-Jun-2025

Cognizant Technology Solutions Corp.

(CTSH)

Bank of America Global Technology Conference

Surya Gummadi

President-Americas, Cognizant Technology Solutions Corp.

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Jason Kupferberg

Analyst, BofA Securities, Inc.

Jason Kupferberg

Analyst, BofA Securities, Inc.

Yeah. All right. I think we're going ahead and get started. Apologies. We're running a few minutes behind here. I'm Jason Kupferberg, the Payments, Processors and IT Services analyst here at Bank of America and we're really excited to have Surya back with us at the conference again. Thank you very much for your reappearance here.

Surya Gummadi

President-Americas, Cognizant Technology Solutions Corp.

Thank you, Jason. Thank you for having me.

Jason Kupferberg

Analyst, BofA Securities, Inc.

Great to see you. Yeah. No. Absolutely. And it's good timing. You guys had an Investor Day.

Surya Gummadi

President-Americas, Cognizant Technology Solutions Corp.

Yes.

Jason Kupferberg

Analyst, BofA Securities, Inc.

A couple of months ago. There's - very quiet on the macro front, right? Nothing to talk about there. We'll get to all of it. But I just wanted to start by having you give the group a little bit of historical perspective. Because you've been at Cognizant for 25 years.

Surya Gummadi

President-Americas, Cognizant Technology Solutions Corp.

Correct.

Jason Kupferberg

Analyst, BofA Securities, Inc.

And you've seen a lot. And Ravi came in as CEO 2.5 years ago now. Just take us through like the main bullet points of change that you've really seen be effected into the organization?

Surya Gummadi

President-Americas, Cognizant Technology Solutions Corp.

Yeah. You're right. Thank you. Thank you again. Good afternoon, everyone. And apologies for coming in a couple of minutes late. So this is my 25th year at Cognizant and I grew up with the firm in many ways.

So from the beginning that Cognizant is anchored on four key pillars, call it culture, call it DNA. They are agility, entrepreneurial culture, empowerment and these values have remained constant for many, many years.

So in the initial years of hypergrowth, Cognizant was growing very fast for the past 15, 20 years and all these things really helped with the growth. And the growth started leveling out. We came across as a little process-light. Then we knew we had to correct it to get to the right levels of agility, right levels of entrepreneurial mindset, right levels of empowerment and things like that. So - and in process, we may have overcorrected it between 2015 and 2020. So then when we were extremely agile, when we had this entrepreneurial culture from the beginning, associates loved it, our clients loved it, and our clients loved working with Cognizant. They thought Cognizant was easy to work with and things like that. But when we corrected it and rather probably unintentionally overcorrected it, clients started seeing us as extremely rigid, hard to work with. Associates started feeling a bit more congested. They thought they lost their entrepreneurial ability and they lost agility in the system.

So now in the last three years after Ravi came back, we started calibrating the pendulum towards the middle. We are not going back to the initial days where we had extreme everything. But we are getting it to the right middle where we are having agility, we are having - we are promoting the entrepreneurial mindset and at the same time we are having the right checks and balances. Now, clients are liking it again. They are saying that Cognizant is back. We are seeing the original Cognizant DNA resonate now. Associates are liking it. So I think I have been across all these three eras. I can tell you that we are finding the right middle right now.

Jason Kupferberg

Analyst, BofA Securities, Inc.

That's how you got back into the winner's circle.

Surya Gummadi

President-Americas, Cognizant Technology Solutions Corp.

Yes. Yes. We did. Yeah.

Jason Kupferberg

Analyst, BofA Securities, Inc.

So let me get your perspective also on just - so this macro backdrop is obviously super-unique or so it seems. But again you've seen a lot of very interesting points in time in the macro, right? There was post-911, there was the Great Financial Crisis, there was like the beginning of COVID when COVID first hit. How does the current macro compare and contrast to those periods [indiscernible] (00:03:49)?

Surya Gummadi

President-Americas, Cognizant Technology Solutions Corp.

I would rather not compare one with the other because each of these instances that you just mentioned had their own nuances and the macro dynamics were different with each of these crises. But one thing that was uniform across all these crises was the uncertainty in these crises have [ph] induced (00:04:10)...

Jason Kupferberg

Analyst, BofA Securities, Inc.

And that's the worst environment. It is uncertainty, right? Yeah.

Surya Gummadi

President-Americas, Cognizant Technology Solutions Corp.

And - but one thing that is different this time around compared to the past ones, is that in the past ones we were dealing with one-dimensional element, uncertainty. Now, during this time, we are not only dealing with uncertainty, we are also dealing with change. AI is disrupting or AI or GenAI is disrupting almost every single enterprise across the planet. Almost all the value chains. So now we are having to deal with uncertainty and change at the same time. So like every adversity, it presents an opportunity. We see this as an opportunity.

Jason Kupferberg

Analyst, BofA Securities, Inc.

So let's - so you run North America. You run 75% of the business, right. And I think North America is where a lot of the macro controversy really sits right now. So maybe just take us through your four main verticals and what you guys are actually seeing on the ground right now in terms of customer demand patterns, discretionary spending, appetite, et cetera?

Surya Gummadi

President-Americas, Cognizant Technology Solutions Corp.

So we work - we operate in four markets; Financial Services, Health, Communications, Media and Tech and Products and Resources. Financial Services, this segment has been under pressure for a long time but we

started seeing green shoots in this segment, in Financial Services. We started seeing discretionary spend come back. I won't say that it has fully come back or it has - there's a trend here but it has leveled out. So Financial Services is relatively positive than where it was many quarters ago.

Healthcare. Healthcare, Health Sciences as we call it, has two dimensions. Healthcare and Life Sciences. Within Healthcare, we payer and provider. With the Life Sciences, we have biopharma and medical devices. Healthcare,

there's as all of you are aware, there's a lot of discussion on DOGE, the government efficiency in spending, particularly on the government-funded programs like Medicare and Medicaid. So there is an element of caution in the Healthcare segment of the business. Now, coming to Life Sciences as well, Life Science has a different dynamic. With the tariffs and the uncertainty around tariffs, there is an element of anxiety and caution on the Life Sciences side. So, the overall Healthcare segment, I would characterize it as cautious right now. Financial Services, relatively positive. Healthcare cautious.

Products and Resources which include retail, manufacturing, auto and things like that, this is a segment that is dealing with the turbulence of tariff uncertainty. So, now with all the retailers announcing what they with respect to their guidance and things like that but that is cascading down to their IT projects, the IT spend. So. I would characterize Products and Resources as dealing with the turbulence related to tariffs.

Communications and Media and Tech (sic) [Communications, Media and Technology] (00:06:56), I would call it neutral. There is no significant departure in the spending patterns in this segment from where it was a quarter or two ago.

Jason Kupferberg

Analyst, BofA Securities, Inc.

Okay. Okay. So, if we're going to sort of rank them right now; Financial Services is best. Maybe CMT and then...

Surya Gummadi

President-Americas, Cognizant Technology Solutions Corp.

Healthcare.

Jason Kupferberg

Analyst, BofA Securities, Inc.

...Healthcare and then Products and Resources. Okay. Okay. Understood.

Now, I think when you guys were on the first quarter earnings call, you talked about some of these moving parts at the vertical level, right, and you accounted for that I think in your outlook for the second quarter and for the full-year. Would it be fair to say that things are basically trending as you expected at this point?

Surya Gummadi

President-Americas, Cognizant Technology Solutions Corp.

Yes. For the most part, yes.

Jason Kupferberg

Analyst, BofA Securities, Inc.

Okay. Okay.

Surya Gummadi

President-Americas, Cognizant Technology Solutions Corp.

I mean in the earnings call, we have characterized that - we have said that there are isolated pockets for all of this. And we also said that we don't see large scale ramp-downs but there is a delay in decision-making for longer sales cycles and things like that. Yes. [ph] For most of it. (00:07:57)

Disclaimer

Cognizant Technology Solutions Corporation published this content on June 06, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on June 06, 2025 at 14:22 UTC.