Cognizant Technology Solutions Corporation (CTSH) 管理层出席第 40 届纳斯达克投资者大会 (成绩单)

[机器翻译] 电话会议 · 2019年06月14日 · 115 次阅读 · 高知特

Cognizant Technology Solutions Corporation (NASDAQ:CTSH) 40th Nasdaq Investor Conference June 13, 2019 5:15 AM ET

Cognizant Technology Solutions Corporation(纳斯达克股票代码:[CTSH])第40届纳斯达克投资者大会2019年6月13日美国东部时间上午5:15

公司参与者

Karen McLoughlin - CFO

  • Karen McLoughlin - 首席财务官

电话会议参与者

Jared Weisfeld - Technology Sector Specialist at Jefferies

  • Jared Weisfeld - Jefferies的技术部门专家

Jared Weisfeld

So I guess we’ll try and get started here. For those who don’t know me, I’m Jared Weisfeld; recently joined Jefferies as a Technology Sector Specialist and it’s my pleasure to introduce Cognizant’s CFO. And maybe we would love to just get started, if you want to give us a brief overview for those not familiar with Cognizant and we can get started from there.

所以我想我们会尝试在这里开始。 对于那些不了解我的人,我是Jared Weisfeld; 最近加入Jefferies担任技术部门专家,我很高兴介绍Cognizant的首席财务官。 也许我们想要开始,如果你想给那些不熟悉Cognizant的人简要概述,我们可以从那里开始。

Karen McLoughlin

Sure. So thank you and good morning everyone. Thank you for having us. As we have several years in a row now we have been here to know that conference authorities had a great opportunity to get over and see folks here in London. For those of you who are not familiar with Cognizant, we are a Fortune 200 Technology Services Provider. We are about a 25-year old company and headquartered in North America. We provide everything from IT services to Consulting, BPO, Outsourcing etcetera to primarily Fortune 2000 companies around the world. And increasingly over the last few years as with many others in our space, we’ve seen a big shift in our business from traditional IT outsourcing to much more digital transformation and really working with our clients and our partners on helping our clients become digital enterprises around the world.
About 75% of our business is based in North America revenue, the remaining 25% is scattered across the U.K., Europe and what we call the rest of the world, which includes the Middle East and Asia and so forth. We’re about 285,000 people around the world, so while the headcount and historically have been a very fast growth company. In Q1 of this year we grew about 6.8% on a constant currency basis and on track to go a little bit further than the rest of the year, but about two-thirds of our business comes from financial services and healthcare, so those are our two largest industry segments and we got a market from an industry perspective. So within what we call financial services practise that includes banking and insurance and then in our healthcare segment, that includes primarily a payer healthcare business, so U.S. payer companies a large and fast growing life sciences and pharma business and a small business in a provider space. And then our two other industry segments, one is called products and resources which includes retail and manufacturing consumer goods and our fourth industry segment which is our communications media and tech and those two are actually our fastest growing businesses right now, but on a slightly smaller base than our financial services and healthcare practice.

当然。非常感谢大家早上好。谢谢你拥有我们。由于我们连续几年现在已经在这里知道会议当局有很好的机会在伦敦看到这里的人们。对于那些不熟悉Cognizant的人,我们是财富200强技术服务提供商。我们是一家拥有25年历史的公司,总部位于北美。我们提供从IT服务到咨询,业务流程外包,外包等全球各地的财富2000强企业。在过去的几年里,与我们领域的许多其他人一样,我们已经看到我们的业务从传统的IT外包转向更多的数字化转型,并真正与我们的客户和合作伙伴合作,帮助我们的客户成为数字化企业环游世界。

我们约75%的业务基于北美收入,其余25%分散在英国,欧洲和我们称之为世界其他地区,包括中东和亚洲等。我们在全球约有285,000人,因此,虽然员工人数和历史上一直是一家发展迅速的公司。在今年第一季度,我们按固定汇率计算增长了约6.8%,并且有望比今年剩余时间更进一步,但我们业务的约三分之二来自金融服务和医疗保健,所以这些是我们的两个最大的行业细分市场,我们从行业角度看待市场。因此,在我们所谓的金融服务业务中,包括银行和保险,然后在我们的医疗保健领域,主要包括付款人医疗保健业务,因此美国付款公司是一个大型且快速增长的生命科学和制药业务以及提供商领域的小型企业。然后是我们的另外两个行业细分市场,一个是产品和资源,包括零售和制造消费品,我们的第四个行业细分市场是我们的通信媒体和技术,这两个实际上是我们目前发展最快的业务,但略小一些基础比我们的金融服务和医疗保健实践。

Jared Weisfeld

So that's helpful. Thank you. Maybe before we get into some of the sub segments it's been almost a full quarter now since Brian Humphries began his role as Cognizant’s new CEO. I think during the call, Brian remarked that he's connecting with employees, clients, partners across the business. Can you just give us some of Brian’s initial impressions of CEO, positives, negatives and how stakeholders are responding at this point?

这很有帮助。 谢谢。 也许在我们进入一些子细分市场之前,自从Brian Humphries开始担任Cognizant的新CEO以来,这已经差不多整整一个季度了。 我想在电话会议期间,Brian表示他正在与整个企业的员工,客户和合作伙伴建立联系。 你能否给我们一些Brian对CEO,积极因素,消极因素以及利益相关者在这一点上如何回应的初步印象?

Karen McLoughlin

Sure. So, Jerry mentioned that our new CEO Brian Humphries, he's joining us on April 1st. And he is our first outside CEO. We -- our prior CEO Francisco D'Souza is still actually Executive Vice Chairman until the end of this month, and then will be a board member thereafter. Francisco was one of the co-founders of the company. He’s been with the company for 25 years and CEO for about twelve, so long term CEO, and Brian came on board and has really spent the last nine or 10 weeks traveling the world, meeting with employees, meeting with clients, getting to know the business, and our teams, and as to your point what's working, and where he thinks there's room for improvement. I think, if he were sitting here, he'd say some of his observations are that there is tremendous passion and energy inside this company that has always been a part of the spirit of Cognizant. Our teams are very focused on delivering good value and high quality services to their customers.
We also have a wealth of talent and solutions. And I think even surprised him to some extent the depth of the solutions and the talent that's across the organization, and the offerings that we can bring to our clients. And perhaps, we haven't always done a good enough job of really marketing that and making people aware of all the solutions that we have. I think at the same time, you know one of the things he really wants to focus on is actually accelerating and returning to growth above and beyond what we're doing this year. We have historically been known in the market for being a very high growth organization and our growth rate slipped a little bit recently. So, really looking at the organization structure, and what's getting in the way potentially of that growth. And so some of things we're looking at right now are really around has the organization structure become more complex over time? And so, if so, how do we simplify that. And return to putting decision making in the hands of the client teams and really allowing our client teams to do what they do best, which is working with their clients and moving very quickly to help clients transform their business.
So that's probably our first and foremost priority, and then looking to ensure that we free up enough investment dollars to continue to drive that growth, to continue to accelerate the shift to digital, which has become so prevalent in our industry. He and I both continue to believe that there is room to take cost out of parts of our business and to streamline that and to reinvest those dollars in continuing to accelerate the shift, both in digital as well as expanding our market presence across both the industries that we serve as well as the geographies that we serve.
In particular, we think there's a very large opportunity for expansion outside of North America, where we continue to be under penetrated.

当然。所以,杰里提到我们的新任首席执行官布莱恩·汉弗莱斯,他将于4月1日加入我们。他是我们的第一位外部CEO。我们 - 我们的前首席执行官Francisco D'Souza在本月底之前仍然是执行副主席,之后将成为董事会成员。 Francisco是该公司的联合创始人之一。他已经在公司工作了25年,担任首席执行官大约12岁,这么长期担任首席执行官,Brian加入进来,在过去的九到十周里真的在世界各地旅行,与员工会面,与客户会面,了解业务和我们的团队,以及您的观点是什么在起作用,以及他认为哪里有改进的余地。我想,如果他坐在这里,他会说他的一些观察结果是这家公司内部充满激情和活力,这一直是Cognizant精神的一部分。我们的团队非常注重为客户提供高价值和高质量的服务。

我们还拥有丰富的人才和解决方案。我认为甚至在某种程度上让他感到惊讶的是整个组织的解决方案和人才的深度,以及我们可以为客户带来的产品。也许,我们并不总是能够做到真正做到这一点并让人们了解我们所拥有的所有解决方案。我想与此同时,你知道他真正想要关注的一件事实际上是在加速并回归到今年我们正在做的事情之上和之后的增长。我们在市场上一直以来都是一个非常高增长的组织,我们的增长率最近有所下滑。因此,真正关注组织结构,以及这种增长潜在的方式。因此,我们现在正在关注的一些事情是否随着时间的推移组织结构变得更加复杂?所以,如果是这样,我们如何简化它。然后回到客户团队的决策制定中,真正让我们的客户团队做他们最擅长的事情,与客户合作,快速行动,帮助客户转变业务。

因此,这可能是我们的首要优先事项,然后期望确保我们腾出足够的投资资金来继续推动增长,继续加速向数字化的转变,而数字化在我们的行业已经变得如此普遍。他和我都继续相信,我们有部分业务可以降低成本并精简这些成本并将这些美元再投资于继续加速转变,无论是数字还是扩大我们在这两个行业的市场占有率我们服务的地理位置以及我们服务的地理位置。

特别值得一提的是,我们认为在北美之外扩张的机会非常大,我们仍然在那里进行渗透。

Jared Weisfeld

So maybe along those lines when you talk about priority with respect to returning to growth I think last quarter you mentioned a couple things specifically, things and company specific execution issues as well as some external factors that impacted the results, maybe you can talk us through a couple of those and sort of how we can bridge from last quarter to getting to that growth phase?

因此,当你谈到恢复增长的优先权时,也许沿着这些路线我想上个季度你提到了一些具体的事情,事情和公司特定的执行问题以及影响结果的一些外部因素,也许你可以通过我们谈谈 我们如何能够从上一季度到达增长阶段的桥梁?

Karen McLoughlin

Sure. So I think in particular if we talk about financial services and then healthcare. So within financial services, our banking practice has been under some pressure for the last several quarters primarily in our top five banks, and we held our first Investor Day last November for those of us, for those who don't follow us. And at our Investor Day, we talked about how within our top five banks we had seen significant pressure on a year-over-year basis and in fact the decline overall in that portfolio.
But what had happened towards the middle of last year is we actually saw two of those clients return to very nice growth. And this plays to this notion of the shift to digital. So over the last few years, we've seen a lot of pressure in what we call run the business, so clients really looking to optimize their spend and their infrastructure and running their core operations, while they shift investment towards digital transformation.
And because of the large footprint we had in many of these banking clients, we felt a lot of that pressure on the cost optimization side, but where we've been able to successfully shift our relationships with the clients to being much more of a thought leader and more solution oriented. We've been able to shift that work now to digital work and in fact in one of our largest banking relationships about 40% of our work today is digital.
But we do have three of those clients that are still under pressure and going through cost optimization. And I expect that that trend will continue for a little bit. A little bit of a different trend we saw in banking in the first quarter was really two pieces. One is, we have a couple of our regional clients that have agreed to merge now. Those mergers won't actually close until the middle or late 2020. But typically when we see clients going through a merger situation, you tend to see a pullback at least in some of their discretionary spending while they're going through the merger process and then post the merger you tend to see an acceleration in spending as they get into integration work.
So we saw a little bit of that pullback and we saw a little bit of sluggishness just overall in what we call our regional banks in the U.S., nothing significant in any one client or another, but a little bit of a pause. I think, they were a little bit late to open up budgets and spending for the year. Obviously there's been a little bit of consternation in the market about whether there is or is not a recession looming at some point. And so, I think we saw a little bit of trepidation with that.
But then if I flip to healthcare. Healthcare is also a bit more challenging, a lot more challenging this year as we look at 2019. Two things happened in healthcare. One is, we have a very large footprint in healthcare across the U.S. and are one of the predominant players in the healthcare care space. And in that space, we had four large companies last year agreed to merge into two companies, the four companies that merged were CBS and Aetna and Sigman Express Scripts.

当然。所以我想特别是如果我们谈论金融服务和医疗保健。因此,在金融服务领域,我们的银行业务在过去几个季度一直面临一些压力,主要是在我们的前五大银行中,我们去年11月为我们这些人举行了第一个投资者日,对于那些不关注我们的人。在我们的投资者日,我们谈到了我们在前五大银行中如何看到同比出现的巨大压力,实际上该组合的总体下降。

但是去年年中发生的事情是,我们实际上看到其中两个客户恢复了非常好的增长。这就是这种向数字化转变的观念。因此,在过去几年中,我们看到了我们所谓的运营业务的巨大压力,因此客户真正希望优化其支出和基础设施并运行核心业务,同时将投资转向数字化转型。

由于我们在许多银行客户中占据了很大的空间,我们在成本优化方面感受到了很大的压力,但我们能够成功地将我们与客户的关系转变为更多的想法领导者和更多解决方案。我们现在已经将这项工作转移到数字化工作上,事实上,在我们最大的银行业务之一,我们今天约有40%的工作是数字化的。

但我们确实有三个仍处于压力之下且经历成本优化的客户。而且我预计这种趋势会持续一点点。我们在第一季度在银行业看到的一个不同的趋势实际上是两件。一个是,我们有几个区域客户同意现在合并。这些合并实际上不会在2020年中期或后期关闭。但通常当我们看到客户经历合并情况时,您往往会看到至少在他们的整个合并过程中的一些可自由支配的支出中出现回调然后发布合并,你往往会看到他们进入整合工作时的支出加速。

所以我们看到了一点点的回调,我们在美国所谓的区域性银行中看到了一点点的低迷,在任何一个客户或其他客户中都没有什么重要,但有点暂停。我认为,他们在开放预算和支出方面有点晚了。显然市场上有一点令人惊愕的是,某个时候是否存在经济衰退。所以,我认为我们看到了一点点的惶恐。

但是,如果我转向医疗保健。医疗保健也更具挑战性,今年看起来更具挑战性,因为我们看看2019年。医疗保健领域发生了两件事。一个是,我们在美国的医疗保健领域拥有非常大的足迹,并且是医疗保健领域的主要参与者之一。在那个领域,我们去年有四家大公司同意合并为两家公司,合并的四家公司分别是CBS,Aetna和Sigman Express Scripts。

And given our presence in the healthcare market, we had a very large dominant position in each of those clients. And what you typically see in a merger, and we saw this even more aggressively this time than usual is once the deal closes, clients will look to consolidate contracts and then try to optimize those contracts. In this case, those contract renegotiations have been more protected, and a little bit more challenging than we initially expected, and so that has put pressure both on Q1 as well as, as we look to the rest of the year.
Now those are large strategic relationships for us. We felt it was really important to work through these negotiations with these clients. There will be at some point a lot of transformation and integration spend, but certainly in the short term. It costs some pressure on our healthcare business. That was compounded by we have one client in the healthcare space that is also doing some building out a captive, which put a little bit of pressure on our business, but we think that was a fairly isolated situation.

鉴于我们在医疗保健市场的存在,我们在每个客户中都拥有非常大的支配地位。而你通常在合并中看到的,我们这次比平常更加积极地看到这一点,一旦交易结束,客户将寻求合并合同,然后尝试优化这些合同。在这种情况下,那些合同重新谈判受到了更多的保护,比我们最初的预期更具挑战性,因此这对第一季度以及我们对今年剩余时间的预期都施加了压力。

现在这些对我们来说是很大的战略关系。我们认为与这些客户进行这些谈判非常重要。在某种程度上会有很多转型和整合支出,但肯定是在短期内。它对我们的医疗保健业务造成一定压力。由于我们在医疗保健领域有一个客户正在做一些俘虏,这给我们的业务带来了一点压力,但我们认为这是一个相当孤立的情况。

Jared Weisfeld

You mentioned in one of your banking clients that 40% of the work is digital. How does that compare to sort of company average and do you think that you can see that mix increase with respect to some of your other banking clients as well?

您在一位银行客户中提到,40%的工作是数字化的。 这与公司的平均水平相比如何?您是否认为您可以看到与其他一些银行客户相比增加的组合?

Karen McLoughlin

First, so about 30% of our work today is what we call digital. Now our definition of digital excludes all of our platform business, we’ve got slightly different definitions of digital today. So, on a like-on-like basis, for us it's about 30% of our business today. And as I said, and you pointed out about 40% and one of our largest banking clients, we do expect to see a continued shift to digital. And you know, in many ways almost every new project you take on today has some component of digital to it. And we believe that, that will be a trend that will continue for quite some time to come.

首先,我们今天约30%的工作是我们所说的数字化。 现在我们对数字的定义排除了我们所有的平台业务,我们今天对数字的定义略有不同。 所以,在类似的基础上,对我们来说,今天我们的业务约占30%。 正如我所说,你指出了我们最大的40%银行客户和我们最大的银行客户之一,我们确实希望看到继续转向数字化。 而且你知道,在很多方面,你今天所接受的几乎每一个新项目都有一些数字化的组件。 我们相信,这将是一个将持续相当长一段时间的趋势。

Jared Weisfeld

So before we focus on that in terms of what's being done to help pivot the organization toward digital, maybe just to touch on products, resources and communications, media impact, because I think those are showing some positive momentum. Can you just talk about some specific investments that you're making within these verticals and some of the trends that you're seeing?

因此,在我们关注正在做什么以帮助将组织转向数字化之前,可能只是触及产品,资源和通信,媒体影响,因为我认为这些正显示出一些积极的动力。 您能谈谈您在这些垂直行业中所做的一些具体投资以及您所看到的一些趋势吗?

Karen McLoughlin

Yes. So products and resources, I'll start there. So in that business, there's really five components to that, so one is traditional retail, consumer goods, manufacturing and then energy and utilities, and travel and hospitality. Those are -- individually smaller businesses for us. And so have been very good growth businesses over the last few years particularly energy and utilities is a very new business for us, and so something that we are seeing some very good traction in. What's interesting in that business is because in some ways we relate to the market a lot of the work we do there is digital and tends to be much more transformative than maybe sort of the core traditional I.T. services business.
And, and so we've seen very nice traction in those businesses, a lot of consulting, a lot of transformation work. A lot of solution work going on, and we believe that there will be continue to be a lot of opportunity to expand their – the retail industry as we all know is undergoing significant transformation. And we have been fortunate in terms of the clients that we have, and part of that is you know are you in the right places with the right clients? And then certainly as we look at things, like manufacturing 4.0 and so forth impacting not just manufacturing, but also we'll talk about other parts of our business down the road, we think there's lots of opportunity there.
In our communications media and tech businesses, that's a little bit of a different business. What we used to call information media and entertainment, we now call it part of our CMT business. It’s part of the Cognizant heritage. We were born out of done and Bradstreet. For those of you who don't know our heritage and so we come from a strong business of analytics and have always had a strong presence in the information and media space. We've more recently over the last decade or so developed a better presence in particularly the North America communications businesses.
I think, there's a lot of opportunity for us to expand that business across the globe. And then, we have what we call our tech business, which we use to sort of call high tech. That business is interesting because it's historically been much more of a development focused business less of a traditional outsourcing or run the business type business model. And over the last several years, we've built very nice relationships with some of the very large names in Silicon Valley on the West Coast of the U.S. and have really expanded our footprint there.
Now a lot of the work that we've done over the last two years or so has come through digital operations and some content work and so forth. But again, we believe there is significant opportunity to continue to expand that work and particularly the services we provide into those clients given the nature of the work they do.

是。所以产品和资源,我会从那里开始。因此,在这个行业中,实际上有五个组成部分,一个是传统的零售,消费品,制造业,然后是能源和公用事业,以及旅游和酒店业。那些 - 对我们来说是个别小企业。在过去的几年里,一直是非常好的增长型企业,特别是能源和公用事业对我们来说是一项非常新的业务,所以我们看到了一些非常好的牵引力。这项业务的有趣之处在于我们在某些方面与对于市场而言,我们在那里做的很多工作都是数字化的,而且往往比传统的核心IT更具变革性。服务业务。

而且,我们已经看到这些业务非常好的牵引力,大量的咨询,大量的转型工作。许多解决方案正在进行中,我们相信将继续有很多机会来扩展它们 - 众所周知,零售业正在经历重大变革。我们在客户方面很幸运,其中一部分是你知道你是否在合适的地方拥有合适的客户?当然,当我们看待制造4.0之类的东西时,不仅仅影响制造业,而且我们会谈论我们业务的其他部分,我们认为那里有很多机会。

在我们的通信媒体和技术业务中,这是一个不同的业务。我们以前称之为信息媒体和娱乐,我们现在将其称为CMT业务的一部分。它是Cognizant遗产的一部分。我们出生于完成和Bradstreet。对于那些不了解我们的传统的人,我们来自强大的分析业务,并且始终在信息和媒体领域拥有强大的影响力。在过去十年左右的时间里,我们最近在北美通信业务中建立了更好的业务。

我认为,我们有很多机会在全球范围内拓展业务。然后,我们拥有所谓的科技业务,我们用它来称呼高科技。这项业务很有意思,因为它在历史上更多地是以发展为重点的业务,而不是传统的外包或运营业务类型的业务模式。在过去的几年里,我们与美国西海岸硅谷的一些知名人士建立了非常友好的关系,并真正扩大了我们在那里的足迹。

现在,我们在过去两年左右所做的很多工作都是通过数字操作和一些内容工作等来完成的。但同样,我们相信,鉴于他们所做工作的性质,我们有充分的机会继续扩展这项工作,特别是我们为这些客户提供的服务。

Jared Weisfeld

So on this notion of pivoting to digital, when you think about the efforts that are being done within the organization, I think you know Brian also on the call talked about a flatter organization going forward and some of the initiatives that you can, that you can engage in, so maybe sort of how do you balance the two in terms of taking out costs from an organizational structure perspective as well as pivoting the organization to more digital footprint?

所以在这种转向数字化的概念上,当你想到组织内部正在进行的努力时,我想你也知道Brian在电话会议上谈到了一个更加扁平的组织,你可以做一些你可以做的举措,你 可以参与进来,所以或许你可以从组织结构角度从成本中获取成本以及将组织转向更多数字化足迹,从而如何平衡两者?

Karen McLoughlin

Sure. So I think you know the great thing about having a large organization with a lot of different businesses is we have that flexibility and we know that in parts of our business and we've been talking about this now for a couple of years that there is room to optimize the cost of delivery and our overhead structure. We've made some progress there over the last two years. We outlined a framework back in 2017, where we talked about opportunities to increase or to reduce costs through better utilization, to managing our pyramid, to managing our overhead structure, simplifying our corporate structure etcetera. But we believe there's a lot more opportunity there to be had. And, and in particular, simplifying the org structure and really getting back to allowing our account teams to be the drivers of the business and being able to make decisions quickly and on the ground. And so that's something that we're very much focused on.
Now we'll take those dollars and really redirect those dollars to investment and growth. And that's both in terms of making sure that we have enough feet on the streets or enough salespeople, enough client partners with the right skills that we're surrounding them with the right talent in terms of consulting talent, and digital talent, and that we also continue to build out solutions and capabilities. Partnerships are much more important now in our business than perhaps they were say eight or nine years ago. So real, really building out those capabilities and making sure that we have the right go to market presence.

当然。因此,我认为你知道拥有一个拥有许多不同业务的大型组织的伟大之处在于我们拥有这种灵活性,而且我们知道在我们的部分业务中,我们现在已经讨论了几年,优化交付成本和我们的架空结构的空间。过去两年我们在那里取得了一些进展。我们在2017年概述了一个框架,在那里我们讨论了通过更好地利用,管理我们的金字塔,管理我们的架构结构,简化我们的公司结构等来增加或降低成本的机会。但我们相信还有更多的机会。而且,特别是,简化组织结构,并真正回到允许我们的客户团队成为业务的驱动因素,并能够快速和实地做出决策。所以这是我们非常关注的事情。

现在我们将拿走这些美元并真正将这些美元重新定向到投资和增长。这既是为了确保我们在街头有足够的脚,也有足够的销售人员,足够的客户合作伙伴拥有合适的技能,我们在咨询人才和数字人才方面拥有合适的人才,我们还将继续构建解决方案和功能。在我们的业务中,合作伙伴关系比8年或9年前更为重要。如此真实,真正建立了这些能力,并确保我们有权利进入市场。

Jared Weisfeld

That makes a lot of sense. So along those lines I think operating margin came in a little bit below expectations given some of the challenging revenue dynamics, say about 16% in the quarter. When you think about some of the potential drivers to operating margins, can you help us think about the trajectory into the June quarter and perhaps the balance of the year?

这很有道理。 因此,考虑到一些具有挑战性的收入动态,本季度约为16%,我认为经营利润率略低于预期。 当您考虑一些运营利润率的潜在驱动因素时,您能否帮我们思考一下进入六月季度的轨迹,或许还有一年中的平衡?

Karen McLoughlin

Sure. So the margins for Q1 that non-GAAP what we call adjusted operating margin was about 16%. We've said it will stay flat sequentially from Q1 to Q2, and then we will see some acceleration as we get into the back half of the year and average about 17% on a full year basis. The reasons margins came in a little bit light in Q1 were primarily due to the revenue being a little bit lower than we expected it to be. We had ramped up hiring starting late last year, to accommodate what we expected to be the revenue growth this year. And so our headcount in Q1 grew about 9% on a year-over-year basis versus our revenue grew about 6.8% on a constant currency basis. And this is a fairly linear business that we're in and the vast majority of our cost is people. So, when your headcount grows faster than your revenue that obviously puts pressure on margin.
Now, as we get into Q2 and into the back half of the year we will continue to add heads. It is important to ensure that we have the right talent and enough talent on the street to do that, but we will slow the pace of the net hiring versus where it was in Q1 and that will allow us to modify the margins as we get into the back half of the year and then supplement that with some of the cost optimization activities that are underway in the company and had already started before Brian joined. But we will continue to ensure we stay on track for those as well.

当然。因此,非GAAP我们称之为调整后经营利润率的第一季度利润率约为16%。我们已经表示它会在第一季度到第二季度之间保持平稳,然后我们会看到一些加速,因为我们进入后半年,平均每年约17%。第一季度利润略有下降的原因主要是由于收入略低于我们的预期。我们从去年年底开始加大招聘力度,以适应我们预计的今年收入增长。因此,我们在第一季度的员工人数同比增长约9%,而我们的收入按固定汇率计算增长约6.8%。这是一个我们所处的相当线性的业务,我们的绝大部分成本都是人。因此,当您的员工人数增长快于您的收入时,显然会给保证金带来压力。

现在,当我们进入第二季度并进入今年下半年时,我们将继续增加头脑。重要的是要确保我们在街上拥有合适的人才和足够的人才来做到这一点,但我们将减缓净雇用的速度与第一季度的情况相比,这将允许我们在进入时调整利润率在今年的后半部分,然后补充了公司正在进行的一些成本优化活动,并且在Brian加入之前已经开始。但我们将继续确保我们保持正轨。

Jared Weisfeld

So, in the context of Q1 results and your fiscal 2019 guide, is the medium term outlook guidance of call it 7% to 11% growth with about 10 bps operating margin expansion per year. Is it still fairly reasonable despite the shortfall?

因此,在第一季度业绩和2019财年指引的背景下,中期前景指引是将其称为7%至11%的增长率,每年约10个基点的营业利润率增长。 尽管有不足之处,它仍然相当合理吗?

Karen McLoughlin

So, yes, what we've outlined at Investor Day last year was 6% to 9% organic constant currency and then that we would add about a point to one and a half to two points a year of growth through acquisitions. We clearly believe that there continues to be market opportunity and we will continue to also focus on growing both organically as well as through acquisitions. In terms of more long term guidance around the structure of that growth and the margin trajectory once finds a little bit more time to get his arms around the business and think about where he wants to make his investments, we’ll come back to clarify that.

所以,是的,我们去年在投资者日所概述的有机固定货币为6%至9%,然后我们通过收购增加了一年半至两点的增长点。 我们清楚地认为,市场机会仍然存在,我们将继续关注有机增长和收购增长。 就围绕这种增长结构和利润率轨迹的更长期指导而言,一旦找到更多的时间来关注业务并考虑他想要投资的地方,我们将回过头来澄清这一点。。

Jared Weisfeld

So then, taking that a little bit in terms of thinking about your free cash flow generation which is pretty robust, can you just maybe walk us through buybacks dividends in M&A and how you're thinking about it from an allocation perspective through each of those three buckets?

那么,考虑到你的自由现金流量生成非常强大,你可以稍微考虑一下我们在并购中的回购红利,以及你如何从分配的角度考虑每一个 三桶?

Karen McLoughlin

Sure. So last year we outlined new capital allocation framework for the company. On average think about free cash flow generation being about one-to-one with net income. It will move around from quarter-to-quarter but on an annual basis that's about the right trajectory. And what we had said last year is that we would take our annual free cash flow allocate about 50% of that to buybacks and dividends, 25% of that to M&A, and then the remaining 25% given our structure goes to India. And while the cash that's in India actually generates quite a bit of interest income for us. It is essentially held in India and a little bit harder to tap into.
And so that is still the framework that we're operating under. We certainly have a strong balance sheet and can and will use that for acquisitions as we see fit. Historically, we don't believe in doing acquisitions just for scale sake. We prefer smaller tuck-in acquisitions but acquisitions that bring us enabling skill, so skill sets that are easier to fit perhaps buy versus build acquisitions that have a digital footprint, a geographic expansion footprint and bring us some IP and platforms are typically the types of things we're looking for.

当然。因此,去年我们为公司概述了新的资本配置框架。平均而言,考虑自由现金流量与净收入一对一。它将每季度移动一次,但每年一次,这是关于正确的轨迹。我们去年所说的是,我们将每年的自由现金流量分配给回购和股息的50%左右,其中25%用于并购,然后剩下的25%给予我们的结构到印度。虽然印度的现金实际上为我们带来了相当多的利息收入。它基本上在印度举行,有点难以接受。

所以这仍然是我们正在运营的框架。我们当然拥有强大的资产负债表,并且可以并且将在我们认为合适的情况下将其用于收购。从历史上看,我们不相信仅仅为了规模而进行收购。我们更喜欢较小的收购,但收购会带来我们的技能,因此更容易适应的技能组合或购买与具有数字足迹,地理扩展足迹并为我们带来一些IP和平台的构建收购通常是类型我们正在寻找的东西。

Jared Weisfeld

And also give the audience an opportunity to ask questions if anyone has any questions you can submit something online or raise your hand and a microphone will come to you if anyone has anything.

如果有人有任何问题,你可以在线提交或举手,如果有人有任何东西,麦克风将会给你,并让观众有机会提问。

问答环节

Hi. Thanks. Just want to ask a question on the non-digital business, so, roughly 70% of revenues. Can you talk about some of the pressures there -- the price pressure? What we should expect sort of growth-wise there?

你好。 谢谢。 只想问一个关于非数字业务的问题,大约70%的收入。 你能谈谈那里的一些压力 - 价格压力吗? 我们应该期待那种增长方式吗?

Karen McLoughlin

Sure. So, in the -- what you would call non-digital business, there’s a number of components there including our platform business. So that for us is not part of digital but it is a very fast growth part of the business and important part of the business. I don't know how many folks are familiar with our platform business, but that business is important in the sense of it does a few things. It allows us to bring solutions to market that are drive very long term relationships with our clients and also start to drive what we call non-linearity. So this ability to separate revenue from headcount growth in our business is something that everybody's been searching for.
And so, with a platform we typically go in and take over the client's operations for that process end-to-end. We own the platform. We host the infrastructure. We do all of their operations work and so these are very nice long term sticky relationships and we think a very critical part of the business today. The vast -- the scale of the platforms that we have is primarily in healthcare, so we did an acquisition of the company called TriZetto back in 2014 which allowed us to launch our healthcare platform business and so that is the largest part of the platform business, but increasingly we have platforms now in life sciences and in our pharma business.
We do a lot of work around clinical trials. We have platforms in other parts of the business insurance, some in retail et cetera and then most recently we bought a company based here in the U.K. back in Q1 a company called Meritsoft which is in the banking space. And then we also just recently announced a relationship with three Finnish banks where we're going to be building a new platform for those, banks based on the Temenos platform and that will ultimately be a market that we take more broadly. So I think platforms will continue to be a big piece.
Then also in that business you also are in the non-digital work. You have traditional application, maintenance and testing and infrastructure services. And over time those businesses will continue to morph to be more digital. And so what you tend to see clients doing now is look to optimize their run the business, what we call the run the business spend, so their traditional support of their infrastructure and their operations and their applications and move that work to digital.
Now application maintenance obviously doesn't go to zero. You still have to keep the lights on and run the business, but clients are being more thoughtful about where they spend their money looking to use automation, more productivity levers, other ways of driving down that cost and redirecting that spend. It's less right now about pricing compression in that space as it is about productivity and you can drive productivity through a number of levers today. And so I think we'll continue to see that.
Now, we have seen some price and compression in these health care contracts that we're renegotiating, but I think that's a little bit more of a one-off versus more systemic pricing issue in the industry, increasingly today CEOs and clients more generally are interested in speed to market agility. Can you bring me the thought leadership? Can you bring me the solutions? And it's less about a rate card conversation, but more can you really deliver value to a client.

当然。因此,在您所谓的非数字业务中,有许多组件,包括我们的平台业务。因此,对我们而言,它不是数字化的一部分,但它是业务增长的一部分,也是业务的重要组成部分。我不知道有多少人熟悉我们的平台业务,但从某种意义上讲,这项业务很重要。它使我们能够为市场提供与客户建立长期合作关系的解决方案,并开始推动我们所谓的非线性。因此,这种将收入与员工人数增长分开的能力是每个人都在寻找的。

因此,通过平台,我们通常会进入并接管客户端端到端流程的操作。我们拥有这个平台。我们托管基础设施。我们所有的运营工作都是如此,因此这些都是非常好的长期粘性关系,我们认为这是当今业务中非常关键的一部分。广泛 - 我们拥有的平台规模主要是医疗保健,因此我们在2014年收购了名为TriZetto的公司,这使我们能够启动我们的医疗保健平台业务,因此这是平台业务的最大部分,但我们现在越来越多地拥有生命科学和制药业的平台。

我们围绕临床试验做了很多工作。我们在商业保险的其他部分有平台,有些在零售等等,然后最近我们在英国购买了一家位于英国的公司,这家公司名为Meritsoft,位于银行业。然后我们最近才宣布与三家芬兰银行建立合作关系,我们将为那些基于Temenos平台的银行构建一个新平台,这最终将成为我们更广泛采用的市场。所以我认为平台将继续成为一件大事。

然后,在那个行业,你也从事非数字化工作。您有传统的应用程序,维护和测试以及基础结构服务。随着时间的推移,这些企业将继续变得更加数字化。因此,您倾向于看到客户现在所做的是优化他们的业务运营,我们称之为业务支出的运营,以及他们对基础架构及其运营和应用程序的传统支持,并将这些工作转移到数字化。

现在应用程序维护显然不会归零。您仍然需要保持亮灯并开展业务,但客户对于他们花钱寻求使用自动化,更多生产力杠杆,降低成本和重新定向花费的其他方式更加周到。现在关于在该领域定价压缩的不太正确,因为它与生产力有关,你可以通过今天的许多杠杆来提高生产力。所以我想我们会继续看到这一点。

现在,我们已经看到我们正在重新谈判的这些医疗保健合同中的一些价格和压缩,但我认为这更多的是一次性与行业中更系统性的定价问题,今天越来越多的CEO和客户更普遍的是对提高市场敏捷性的速度感兴趣。你能带给我思想领袖吗?你能带给我解决方案吗?而且它不是关于价目表的对话,但更多的是你能真正为客户提供价值。

Jared Weisfeld

Great. One thing I just want to follow-up on before going back to the audience with respect to some of the free cash flow generation and you talked about allocated across buybacks dividends and M&A. What desire is there to increase the allocation towards M&A from the perspective of diversifying away from some of those top five banking clients. I know that's a question that we've been receiving a lot.

非常好。 有一件事我只是想在回到观众面前跟进一些自由现金流量,你谈到了回购分红和并购。 从远离一些前五大银行客户的角度来看,有什么愿望增加对并购的分配。 我知道这是一个我们收到很多的问题。

Karen McLoughlin

Yes. So, I think diversifying the portfolio doesn't necessarily require M&A when it comes to client -- the client structure. So most of the acquisitions we do to be honest they tend to be very small companies and so they may have a few nice large client relationships, but they also tend to have a lot of smaller client relationships and what we're really buying them for tends to be the capability less than the client relationships. The client relationships for the most part we can build on ourselves. Now for many years it made a lot of sense in the company, a lot of the growth came from really expanding your existing client relationships and the footprint within an existing client.
We used to talk about the fact that with new services as they came online we were essentially doubling the capacity within a client to take market share, and where the spent would come from within a client. What we're seeing now is that we've done that very effectively in a handful of clients in each of the industry portfolios. But we think there's an opportunity to broaden the range of services across a larger part of our portfolio of existing clients. And really drive growth not just in sort of the top 20 or 50 clients but more broadly across the top several hundred clients within the portfolio of the company. There is also the ability to go get new logos and that is something that we will, I think put more focus on in the coming months and years certainly. And that will be both in North America looking to broaden the portfolio, but especially outside of North America where as I said continue to believe we're under penetrated.

是。所以,我认为多样化投资组合并不一定需要并购客户 - 客户结构。所以我们做的大部分收购都是诚实的,他们往往是非常小的公司,所以他们可能有一些很好的大客户关系,但他们也倾向于有很多较小的客户关系和我们真正购买他们的往往是能力低于客户关系。客户关系在很大程度上我们可以建立在自己身上。多年来,它在公司中产生了很多意义,很多增长来自真正扩展现有客户关系和现有客户的足迹。

我们过去常常谈到这样一个事实:随着新服务的上线,我们基本上将客户的容量增加一倍以占据市场份额,并且花费的来自客户端。我们现在看到的是,我们已经在每个行业组合中的少数客户中非常有效地完成了这项工作。但我们认为,有机会扩大我们现有客户组合中的大部分服务范围。真正推动增长的不仅仅是排名前20或者50的客户,而是更广泛地推动公司产品组合中的前几百个客户。还有能力获得新的标识,这是我们将要做的事情,我认为在未来的几个月和几年中我们会更加关注。这将是北美寻求扩大投资组合,但特别是在北美之外,正如我所说,我仍然相信我们已经渗透。

Jared Weisfeld

I guess, I have one question over here.

我想,我在这里有一个问题。

身份不明的分析师

There's actually two questions interrelated. So first is just the impact of U.S. immigration policy like HB-1 visas and how that affects your business model? And the second point is you talked about the shift to digital and you can think of off work for example, where tasks can be put on to a platform and distributed to anywhere in the world to low cost sources of skilled and semi-skilled labor not wanting to do these tasks and then send data back home. Obviously, there are many iterations. But how does that affect your business? And what -- how they related? So can you use the new platforms as a way to get around the visa issues? Or is it rather the other way that you’ve got two headwinds facing you?

实际上有两个相互关联的问题。 首先,美国移民政策如HB-1签证的影响以及这对您的商业模式有何影响? 第二点是你谈到了向数字转变的问题,你可以考虑下班,例如,可以将任务放到平台上并分发到世界上任何地方,以低成本的熟练和半熟练劳动力来源 想要做这些任务,然后将数据发回国内。 显然,有很多次迭代。 但这对您的业务有何影响? 什么 - 他们如何相关? 那么您可以使用新平台来解决签证问题吗? 或者是另一种方式,你有两个不利因素面对你?

Karen McLoughlin

So immigration is something that we've been living with for years and the noise in the U.S. has been on-going for at least four or five plus years at this point. And we’ve really have shifted the model in the U.S. to be much more local hiring focused. And so while we do apply for a small number of new H-1B visas every year that the number that we apply for in any given year has decreased substantially over 70%, 80% versus what it used to be. And then typically we get about 50% of the visas that we apply for in a given year. And so, we do continue to believe that an immigration and good immigration policy is important particularly to the success of the U.S. economy, but also economies across the world.
There continues to be a shortage of technology talent in most of the countries in which we operate. We can build and develop some of that talent, but it does take time and that's certainly something that's been underway. And I think that will continue. We've also been a big user of the green card program historically in the U.S. and so we're very focused on good green card policy reform if that could happen as well. So I think that will continue to be something that everybody focuses on and really developing the skill sets and the talent around the world. That is not in itself hindering growth at this point.
I think your question around automation is interesting. I do think to some extent automation gives us the ability to do things around the world in different ways than we have in the past. But at the same time you're also seeing a lot of countries become more nationalistic and want to bring more back into country, while that's being driven by privacy and other regulatory issues and so that's shifting some of the work both for ourselves and our competitors and that's work we do for clients as well as work we do for ourselves. So I think there's a number of moving parts around the world today. And obviously you need to make sure that we stay on top of what's happening around the world both from a regulatory as well as a business and technology environment.

因此,移民是我们多年来一直生活的东西,而美国的噪音至少已持续了四五年。而且我们真的已经将美国的模式转变为更多的本地招聘重点。因此,虽然我们每年都申请少量新的H-1B签证,但我们申请的任何一年的申请人数大幅减少了70%以上,与以往相比减少了80%。然后通常我们获得约50%的签证,我们在一年内申请。因此,我们仍然相信移民和良好的移民政策对美国经济的成功尤为重要,而且对全世界的经济也很重要。

在我们经营的大多数国家,技术人才仍然短缺。我们可以建立和发展一些人才,但这确实需要时间,这肯定是正在进行的事情。我认为这将继续下去。我们也是历史上美国绿卡项目的大用户,所以如果可能的话,我们也非常关注良好的绿卡政策改革。因此,我认为这将继续成为每个人关注并真正发展世界各地技能和人才的事情。在这一点上,这本身并不妨碍增长。

我认为你对自动化的问题很有意思。我认为自动化在某种程度上使我们能够以与过去不同的方式在世界各地做事。但与此同时,你也看到许多国家变得更加民族主义,并希望将更多的国家带回国内,而这又受到隐私和其他监管问题的驱动,因此这对我们自己和竞争对手的部分工作都有所改变。这是我们为客户所做的工作以及我们为自己所做的工作。所以我认为今天世界上有许多活动部件。显然,您需要确保我们始终掌握全球范围内的监管以及业务和技术环境。

Jared Weisfeld

We have time for one more, so maybe just to finish up. When you think about flattening the organizational structure, continuing to pivot to digital when pivoting new division for renewed growth, I think Brian also talked about IoT as a potential core growth driver. Maybe give us a little bit of background in terms of what you see the opportunities that looking like and how you can capitalize upon that?

我们还有一个时间,所以也许只是为了完成。 当你考虑扁平化组织结构时,继续转向数字化,以便重新启动新部门,我认为布莱恩还谈到了物联网作为潜在的核心增长动力。 也许就我们看到的机会以及如何利用这些机会给我们一些背景知识?

Karen McLoughlin

Sure. I think this is a really exciting time to be in our industry. There is tremendous opportunity to really help our clients transform their business and to bring creative and thoughtful solutions to market and to bear with our clients. And so it is about ensuring that you have made enough of the investments and the right investments that you have the thought leadership. You have the consulting capabilities because first and foremost a lot of this is really led with very thoughtful consulting projects and having people who can really sit down and have a business conversation with a client not just a technology conversation.
And so, we were fortunate in that. We started building out our consulting practice many years ago. We have a large consulting practice. We will continue to evolve that business and to focus on that, but we see tremendous opportunities for growth in the coming years and the ability to expand the business into new industries as well as new geographies and solutions.

当然。 我认为这是我们这个行业非常激动人心的时刻。 真正有机会真正帮助我们的客户转变业务,为市场带来创造性和深思熟虑的解决方案,并与客户合作。 所以它是关于确保你已经做出足够的投资和正确的投资,你有思想领导力。 您拥有咨询能力,因为首先,很多这方面都是通过非常周到的咨询项目和让真正坐下来与客户进行业务对话的人而不仅仅是技术对话。

所以,我们很幸运。 多年前我们开始建立咨询业务。 我们有大量的咨询业务。 我们将继续发展这一业务并专注于此,但我们看到未来几年的巨大增长机会以及将业务扩展到新行业以及新的地理位置和解决方案的能力。

Jared Weisfeld

Great. And with that we're out of time. I want to thank Karen and Cognizant. And thank you so much.

非常好。 由此我们没时间了。 我要感谢Karen和Cognizant。 非常感谢你。

Karen McLoughlin

Thank you very much.

非常感谢你。

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