David Nelson - Francisco D'Souza - Chief Executive Officer and Director Gordon J. Coburn - President Karen McLoughlin -

Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division Edward S. Caso - Wells Fargo Securities, LLC, Research Division Nitin Mohta - Macquarie Research Rod Bourgeois - Sanford C. Bernstein & Co., LLC., Research Division Darrin D. Peller - Barclays Capital, Research Division Julio C. Quinteros - Goldman Sachs Group Inc., Research Division Christopher Hickey - Atlantic Equities LLP Ashwin Shirvaikar - Citigroup Inc, Research Division James E. Friedman - Susquehanna Financial Group, LLLP, Research Division Joseph D. Foresi - Janney Montgomery Scott LLC, Research Division Bryan Keane - Deutsche Bank AG, Research Division Moshe Katri - Cowen and Company, LLC, Research Division Glenn Greene - Oppenheimer & Co. Inc., Research Division George A. Price - BB&T Capital Markets, Research Division

Ladies and gentlemen, welcome to the Cognizant Technology Solutions First Quarter 2012 Earnings Conference Call. [Operator Instructions] Thank you. I would now like to turn the conference over to David Nelson, Vice President, Investor Relations and Treasury at Cognizant. Please go ahead, sir.

Thank you, and good morning, everyone. By now, you should have received a copy of the earnings release for the company's first quarter 2012 results. If you have not, a copy is available on our website, cognizant.com. The speakers we have on today's call are Francisco D'Souza, Chief Executive Officer; Gordon Coburn, President; and Karen McLoughlin, 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. I would now like to turn the call over to Francisco D'Souza. Please go ahead, Francisco. Francisco D'Souza: Thank you, David, and good morning, everyone. Thanks for joining us today. On the call this morning, we'd like to cover a few topics. First, I'll provide highlights of our first quarter results and our revised 2012 guidance. Next, Gordon will discuss our detailed operating results with a particular emphasis on the trends we've been seeing in the demand environment for our services over the past 90 days. And then Karen will come back and cover our financial metrics and revised guidance in more detail, at which point I'll return to put some color around the investment that we continue to make over the remainder of 2012 to ensure that we maintain industry-leading growth. As always, we'll leave time at the end for questions and answers. Our first quarter revenue grew nearly 3% sequentially and nearly 25% over last year to over $1.71 billion. These financial results slightly exceeded our guidance and demonstrate continued industry-leading growth. While we delivered solid performance in the quarter and we continued to gain market share relative to our competition, we did not see as strong an acceleration in growth as we typically see coming out of Q1 and into April. This has led us to take a conservative approach and to reset our full year 2012 revenue guidance to at least $7.34 billion. When we provided our prior 2012 outlook in February, we anticipated a softer and volatile European business but expected North America to be on a normal revenue trajectory. However, when we looked at revenue for the month of April, the acceleration we usually see in our North American business coming out of Q1 is slower than what we anticipated. This trend was particularly evident in the banking portion of our financial services segment and the pharmaceuticals portion of our healthcare segment. Gordon will provide more detailed characterization of demand in these segments shortly. While our full year performance will be below our prior expectations, we're very pleased that our forecasted growth rate continues to lead the industry. The drivers of demand remain intact, as reflected by business development metrics that remain at high levels, both in relative and absolute terms. We're confident that Cognizant will meet our revised growth targets for 2012 and continue to lead our sector in growth. In support of our continued confidence in the business this morning, we announced an expansion of our existing share repurchase program $1 billion from its current $600 million approval level. Karen will provide more details on this expansion shortly. Our confidence stems from the belief that exceptional execution over differentiated strategy distinguishes us from our peers. Our unique reinvestment approach affords us the ability to invest in superior client-facing teams, deeper industry expertise, and importantly, the right portfolio of services to meet clients' rapidly evolving needs. In our core business, what we call Horizon 1, we continued to drive growth by deepening penetration in existing accounts, entering new accounts and expanding to under-penetrated geographies. Horizon 2 offerings, such as Business Process Outsourcing or BPO, IT Infrastructures Services or ITIS and Cognizant Business Consulting or CBC have achieved critical mass and have been leading the company in terms of growth rates as they scale across the industries and geographies. And we're pleased with our progress around our newly formed portfolio of emerging Horizon 3 offerings, in which we have seeded investment. In a short period of time, the focus on these services has created strong interest with our clients. Today, we will again use our 3 Horizon model to explain how we are addressing the changes happening in the marketplace. I'll now hand the call over to our President, Gordon Coburn, who'll walk you through the demand environment in our core Horizon 1 and 2 businesses. Gordon? Gordon J. Coburn: Thank you, Francisco. Although we had to reduce our full year growth expectations, due primarily to the performance of our core Horizon 1 businesses, it's very important to keep in perspective that these businesses are still extraordinarily healthy, as demonstrated by our continued industry-leading growth. We believe that the market for our Horizon 1 and 2 businesses is under-penetrated, which provides a strong -- which provides strong opportunities for continued growth, and that our unique financial model, global delivery network and intimate client relationships positions us to capture an outsized share of that market. The longer-term demand environment remains strong. We are helping clients navigate secular shifts in their industries while at the same time driving more efficient and effective operations. For Horizon 1 services, we continue to see broad opportunities to expand our global delivery model. Our clients continue to turn to us to help drive greater levels of productivity through best-in-class methodologies. At the same time, the dual mandate of driving both operational efficiencies and innovation has resulted in a notable increase in large transformational deals across our business. Clients are reinvesting savings generated from these cost-optimizing programs into initiatives that will enable them to rethink their business model, rewire operations or reexamine which activities are core to their competitive edge versus which would have been -- which would be better handled by a partner like Cognizant with deeper, more scalable expertise. From a demand standpoint, this is creating newer opportunities for partnership with our clients across multiple service lines. Within Horizon 2, our addressable market is expanding, particularly within the BPO area. Our core BPO offerings continue to show solid growth, supported by expansion of work with existing clients and recent wins with new clients. The vertical focus of our BPO practice based on deep knowledge of the industries we serve, coupled with the ability to deliver value via wage arbitrage, productivity improvements and technology-enabled modernization and automation drives our competitive strength. This is evidenced in some of our most recent wins, including several multiyear deals with major healthcare payer firms to provide claims processing, enrollment and several other industry-aligned services. We've also added another multiyear deal involving the delivery of clinical data management and drug safety services, this time for our pharmaceutical firm in Asia-Pacific. Within ITIS, we continue to focus on scaling across industries and clients. ITIS is becoming more mainstream as clients continue to adopt the global delivery model, which is fueling "higher than company average" growth in the space. Q1 brought us some key wins in the space, particularly in Financial Services and Healthcare. Of note, we won a key ITIS deal with a Scandinavian financial services client this quarter. Growing interest in ITIS projects has kept our pipeline robust. Cognizant Business Consulting continues to grow faster than the company average. We continue to see a growing interest in large-scale IT and business transformation work as well as cost optimization projects. Importantly, as recognized by industry analysts, we have built a strong upstream consulting organization focused on delivering value-added consulting. To illustrate, we recently won an assignment with a major retailer to analyze the current state of multichannel operations, store operations, merchandising and ERP and create a roadmap for business transformation. Additionally, for a top 10 insurer, we are defining the future functional state of their customer relationship landscape. Now let me shift to an industry view of our business. In Financial Services, which includes our banking and insurance clients, we saw mixed results between these 2 subsectors, particularly in North America. Our overall banking sector remained flat during the quarter. This was driven primarily by softness among our top North American backing clients. While we expect our banking sector to grow in 2012, the pace of growth will certainly be slower than we expected 3 months ago. This is especially true among our large North American clients, where there remains a heightened focus on cost optimization due to the macroeconomic and regulatory pressures which are driving fundamental changes in their business models. As a result, their IT spend acceleration with us is not as strong as we originally anticipated and as many of them indicated at the beginning of the year. Among these larger clients, there's a slower ramp in discretionary projects. Interestingly, the same industry dynamics are resulting in robust growth among our midsized banking clients. Generally, these clients are not as far along in their transition to a global delivery model, and the industry pressures are serving as a catalyst to accelerate this transition. Our insurance customers saw a strong growth of 6% in the first quarter, and we expect continued solid growth both in Q2 and for the rest of the year. Across insurance, we continue to consolidate positions with existing clients and added several new logos this quarter. As such, our insurance pipeline remains healthy. Within healthcare, it's another mixed story. Our pharmaceutical business declined 4% sequentially in Q1, while the payor side of healthcare grew 7%. To some extent, the softness in the first quarter for the pharmaceutical industry is a normal seasonal pattern. However, the Q1 weakness was more pronounced this year than in prior years. The industry continues to go through a significant transformation due to the large number of drugs coming off patent. The pullback on discretionary spend as a result of this patent cliff has had a more significant impact on our rate of growth in this industry than we anticipated 90 days ago as we see our pharma clients underspend their original plans for the year. Our revenue mix in the pharma industry is more weighted towards discretionary work than our overall company mix. Therefore the slower-than-anticipated revenue discretionary spend is impacting us. We expect our growth rate for this subsector to lag the overall company growth rate in Q2 and for the rest of the year. Meanwhile, the payor side of healthcare continues to be driven by changes in the regulatory environment. It grew 7% sequentially in Q1. We continue to see an increased number of large-scale complex transformational opportunities in this space. Moving to our performance by geography. As I just highlighted in our Q1 North America performance, we saw sluggishness in banking and life sciences. Excluding these subsectors, business is generally playing out as expected, with clients increasing spend on both cost-containment and innovation-related initiatives. Despite protracted economic issues, which constrained spending by some clients and increased demand for cost containment by others, European revenue grew 3.5% sequentially and 11% year-over-year. We had several significant wins during the quarter, including a large SAP program for a U.K. utility company, a managed-services-based application outsourcing engagement for a French life sciences company and a large enterprise application development and maintenance program for a major consumer goods company. While we did have a solid quarter in Europe, our expectations remained cautious in the short term for this market. However, as we have stated before, Europe remains an attractive long-term market for us. After all, the overall European IT services market is roughly the same size as the North American IT services market. Yet the penetration of the global delivery model in Europe is currently a fraction of that in North America. As such, we believe Europe merits our continued focus and investment. In particular, we continue to focus on building local teams on the ground across key markets in Europe to address the specific needs of European clients. We are also systematically ensuring that we have the capability to deliver the full range of Cognizant service offerings in discrete European markets to meet client demand. Despite representing a small revenue share, we were very pleased with the strong growth in Asia-Pacific and rest of the world, which grew 7% sequentially and 47% year-over-year. Growth in the sector was driven by a few key wins in some of our high-growth service areas, like ITIS, such as our recent win with a large global bank to provide IP infrastructure and application support across all critical areas of the bank from 3 different global locations. This program, which is designed and delivered as a utility service across the bank, emphasizes a strong transformational agenda which is targeted at optimizing costs while enhancing the end user experience. I will now hand the call over to Karen to comment on our financial performance and guidance. Karen?

Thank you, Gordon, and good morning, everyone. As detailed in our press release, our first quarter revenue grew 2.9% sequentially and 24.8% over last year to over $1.71 billion versus our guidance of at least $1.7 billion. We were pleased with the growth across our business segments and geographies. Although the first quarter played out as we anticipated and we have seen acceleration in demand as we entered Q2, the acceleration is slower than we would expect at this time of year. Given this, we have taken a conservative stance towards our assumption for reacceleration of growth for the remainder of the year, and we are accordingly revising our full year 2012 guidance. For ease of reference, we have included a fact sheet with the earnings release to provide key data on revenue by industry and revenue by geography, which has already been discussed by Gordon. Now let me discuss some of our other results, and I'll begin with revenue and customers. Application development represented 51.4% of revenue and application management, 48.6% for the quarter. Development grew 27.9% year-over-year and 3% sequentially. Management grew 21.7% year-over-year and 2.7% sequentially. We saw fairly balanced growth between development and management as clients expanded outsourcing projects to address their 2012 savings objectives. 31.3% of our revenue came from fixed-price contracts during the first quarter. As expected, on a sequential basis, our pricing during the first quarter was stable. We closed the quarter with 805 active customers, and the number of accounts which we consider to be strategic increased by 5. This brings our total number of strategic clients to 196. Turning to costs. On a GAAP basis, cost of revenues exclusive of depreciation and amortization was approximately $984.5 million and included $4.6 million of stock-based compensation expense. The increase in cost of revenues is primarily due to additional staff, both on-site and offshore, required to support our revenue growth. We increased our technical staff by over 2,200 during the quarter and ended the quarter with over 131,600 technical staff. First quarter SG&A including depreciation and amortization expenses was $408.9 million on a GAAP basis and included approximately $26.8 million of stock-based compensation expense. Our GAAP operating margin was 18.6% for the quarter, and our non-GAAP operating margin, which excludes stock-based compensation expense, was 20.4%, slightly above our target range of 19% to 20%. This is a normal pattern for us in Q1 and positions us well to absorb promotion and wage increases scheduled to start taking effect during the second quarter. We have further extended our Indian rupee expense hedging program with over $3.7 billion in outstanding hedges of our rupee expenses, which will mature each month through 2015 at an average rate of approximately 51.9. We had $11.1 million of interest income. In addition, we had a $6.7 million loss on nonoperating income. This included a net foreign exchange loss of $7.3 million. Our GAAP tax rate for the quarter was 24.4%. Our diluted share count for the quarter was 309.2 million shares, up slightly from Q4. During the first quarter, we repurchased just over 600,000 shares at an average price of $70.84 for a total cost of $42.7 million. This morning, the company announced that its Board of Directors has authorized the expansion of its existing share repurchase program by $400 million, bringing the total authorization under the current repurchase program to $1 billion. To date, 6.2 million shares at a cost of $423.3 million has been repurchased under this program. Turning to the balance sheet. Our balance sheet remains very healthy. We finished the quarter with almost $2.5 billion of cash and short-term investments. During the first quarter, operating activities generated $101.7 million of cash. Financing activities generated approximately $7.1 million of cash. This was comprised of net proceeds of $49.8 million related to option exercises and related tax benefits as well as our employee stock purchase program, partially offset by expenditures of $42.7 million towards our share repurchase program. We spent approximately $60.5 million for capital expenditures during the quarter. And during 2012, we expect our capital expenditures to total approximately $370 million. Based on our approximately $1.4 billion receivable balance on March 31, we finished the quarter with a DSO including unbilled receivables of 75.6 days, up from the last quarter and up from 73.7 days from the first quarter of 2011. The unbilled portion of our receivables balance was approximately $187 million, up from $140 million at the end of Q4. Approximately 60% of the Q1 unbilled balance was billed in April. Net headcount increased by almost 2,800 people during the quarter. 30% of gross additions for the quarter were direct college hires, while 70% were lateral hires of experienced professionals. We ended the quarter with approximately 140,500 employees globally. Attrition in the first quarter was 10.5%, marginally higher than our Q4 attrition of 10.1%. As we have discussed in the past, there is no consistent methodology in the industry to report attrition. We have historically reported attrition by annualizing the turnover which occurred within the quarter, including both voluntary and involuntary. Our attrition statistics include all departures, including BPO and employees in our training program. Utilization decreased slightly on a sequential basis during Q1. Offshore utilization was approximately 67%. Offshore utilization excluding recent college graduates who were in our training program was approximately 78%. On-site utilization was 93% during the quarter. I would now like to comment on our growth expectations for the second quarter of 2012 as well as the full year. As previously mentioned, we have adjusted our full year guidance to reflect the slower-than-anticipated acceleration in demand coming out of Q1. For the second quarter of 2012, we are projecting revenue of at least $1.79 billion. This represents sequential growth of at least 4.6%. We have significant revenue visibility into our second quarter guidance due to the high level of recurring revenue and long-term nature of our customer relationships. In fact, today, as in typical quarters, we have customer commitments for well over 90% of our second quarter revenue guidance. For the full year, we continue to expect industry-leading revenue growth. Based on current conditions and client indications, we expect to deliver revenue of at least $7.34 billion. This represents growth of at least 20% compared to 2011. As has been typical in past years, we expect the majority of our growth for the remainder of 2012 will come from the ramp-up of clients that we won over the past month and years. During the remainder of 2012, we intend to closely monitor our spending while continuing to invest in our Horizon 1, 2 and 3 businesses. We expect our non-GAAP operating margin to remain in the range of 19% to 20%, excluding the impact of stock-based compensation expense. Therefore, we are currently comfortable with our ability to deliver in Q2 GAAP EPS of $0.80 and non-GAAP EPS of $0.87, which excludes estimated stock-based compensation expense of $0.07. This guidance anticipates a Q2 share count of approximately 309.5 million shares and a tax rate of approximately 25%. Our guidance excludes any future nonoperating FX gains or losses. For the full year 2012, we expect our GAAP EPS to be at least $3.36 and our full year non-GAAP EPS to be at least $3.62, excluding $0.26 of estimated full year stock-based compensation expense. This guidance anticipates a full year share count of approximately 309 million shares and a tax rate of approximately 25%. It also excludes any future nonoperating FX gains or losses. Now I would like to turn the call back over to Francisco to comment on the demand environment in our Horizon 3 businesses and plans for the remainders of the year. Francisco? Francisco D'Souza: Thanks, Karen. I'd like to end our prepared comments by putting our Q1 results and our projected 2012 results into context. I want to make sure that we don't lose sight of the fact that our performance in terms of first quarter sequential growth and our outlook for Q2 and for the rest of the year is at the very top of our peer group. Relative performance compared to our peer group is the best indicator of our competitiveness. We continue to increase our market share, and we are still benefiting from the investment that we've made over the years to gain advantage in the marketplace. As we look forward, our objectives for the remainder of 2012 and beyond are clear. We're focused on running our company in a prudent manner today while at the same time making the necessary investments to ensure that we remain competitive in the long run and continue to post industry-leading revenue growth Our priorities going forward are as follows: First, our teams are laser-focused on working with our customers in order to ensure that we maintain our track record of winning a disproportionate share of opportunities in our robust pipeline; second, we'll maintain our focus on operational excellence to maintain our target operating margins within the 19% to 20% range on a non-GAAP basis. We're confident that we can deliver this while still protecting our core areas of investments. And finally, we continue to invest in our Horizon 3 services to ensure that we remain the best partner to help clients to deliver on the dual mandates of both cost-saving and revenue-generating solutions that address the specific needs of their businesses. We're pleased with the progress that we're making in our Horizon 3 areas. Though these services don’t meaningfully contribute to revenue today, they lay a foundation for strong future growth and differentiate us as top leaders. We remain focused on 3 key areas within Horizon 3. The first area is new markets, which includes new geographies like Latin America and new industries like the government. The second Horizon 3 area in which we are focused is new delivery models, including platform-based services that break linearity between revenue and headcount. And our third area of Horizon 3 focus is based on the strong client interest that we're seeing in what we are calling the SMAC stack, that is, the new emerging corporate IP stack based on social, mobile, analytics and cloud, or SMAC, for short. Though driven by technology change, the SMAC stack has far-reaching impact on all aspect of business models. Let me give you some examples of the traction we're seeing in some of these H 3 areas. In our new markets area, we are selectively pursuing public sector clients around the world. And we've achieved a number of significant wins recently, including the World Bank, the U.K. Financial Services Authority and the healthcare services area of 1 of the 50 states from the United States. These examples illustrate our success leveraging our core competencies in IT and application services and deep domain expertise in banking and healthcare to unlock avenues of growth in new markets. In another example, this time in our new technologies or SMAC area, this quarter we were -- we added 3 more of our largest banking clients to the list of companies that consider us their preferred mobile solutions provider, one of which also selected us as a preferred social computing provider after we developed a social media command center to monitor what their customers were saying about one of their subsidiary brands on the Internet. This example illustrates our ability to rapidly develop solution offerings based on new technologies and, equally importantly, leveraging our strong client-facing teams and solid relationships with our clients to rapidly scale these new offerings. Our Horizon 3 offerings, while in their infancy, lay a solid foundation for Cognizant's long-term growth. At the same time, as Gordon highlighted, there remains ample -- growth opportunity in our core Horizon 1 and 2 services. I'll end by saying that we continue to remain optimistic about the market opportunity ahead of us and about our ability to capture an outside share of that market based on our competitive position and approach to investing for long-term growth. For over a decade, we have demonstrated that reinvesting in our business in the form of more intimate client teams, deep-industry insights and a robust portfolio of services generates consistently higher growth rates than the rest of the industry. That remains true today. We'd now like to open the call for questions. Operator?

[Operator Instructions] Your first question comes from the line of Tien-Tsin Huang with JPMorgan. Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division: I guess my one question, maybe if you can just give us an idea on North America and the expectations for growth in the second quarter, maybe the same thing for Financial Services, just to give us an idea of what the second quarter might look like and then just the balance of the year. And then maybe just as a follow-up, if we can get an idea -- I know you give it usually in the Q, but just your growth in your top 5 and your top 10 clients? Gordon J. Coburn: Sure, Tien-Tsin. Let me comment on North America, then Karen can talk about the top 5 and 10. In North America, we would expect in Q2 where we guided to about 4.6% overall growth. North America, we would expect to drive that growth, so it will probably grow a little bit faster than company average. And we're assuming Europe would grow a little bit slower than company average in the second quarter. And that's -- that obviously bakes in all our assumptions about the slower-than-expected acceleration in Financial Services. Karen, do you want to talk about the top 5, top 10?

Sure. Top 5 for the quarter was 14% of revenue and top 10 was 25% of revenue. Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division: Okay, maybe I can just sneak in one more, just your strategy for buying back stock. I'm curious, obviously stocks indicating weaker. I'm curious if it's going to be 10b5-driven, opportunistic? What's the strategy? Gordon J. Coburn: We have in place a 10b5 program from before increasing the authorization today. How we'll use the additional authorization, I think it will be somewhat opportunistic, certainly depending on where exactly this stock price settles down. We're in no huge rush to do it, but certainly depending on valuation, we would look at doing it on an accelerated basis.

Your next question comes from the line of Edward Caso with Wells Fargo Securities. Edward S. Caso - Wells Fargo Securities, LLC, Research Division: Can you talk a little bit about the wage increases that you may be giving this year. Karen mentioned sort of controlling expenses and just curious how that part of the equation worked into it? Gordon J. Coburn: Sure, Ed. Let me be very clear on this. We're still growing at a great pace. Yes, we're certainly disappointed. We had to take our growth from 23% down to 20%, but that's still tremendous growth. That change in full year expectations has no impact whatsoever on our plans for salary increments. We communicated earlier this year that our salary increments for our junior middle population go into effect this month and for more senior people, at the end of the quarter. Those plans are unchanged. The magnitude of the salary increases, I think, are going to be very consistent with what we're seeing at other top players in the industry. We're expecting approximately 8% offshore, that excludes promotions and low single-digits on-site. So no change in our plans. Edward S. Caso - Wells Fargo Securities, LLC, Research Division: Can you talk a little bit about the visa challenges, and how that's causing you to change or not change your sort of workforce deployment? Gordon J. Coburn: Sure. We've been evolving our workforce deployment for a number of years now. As we have scale, as we have credibility in the U.S. market, we're certainly doing more U.S. hiring, both of lateral hires and the last 2 years, college hires. We now recruit at 15 to 20 campuses, we hired several hundred U.S. college students this year. The challenge is there are not enough U.S. IT workers. It's very simple math. We're not graduating enough. So we can certainly continue to supplement what we can find locally with talent from around the world. We continue to have access to visas. That access to visas has not caused us any revenue leakage. Clearly, there's a very significant cost to it that's baked into our plans. We certainly monitor the situation carefully, but it has not impacted the business. Nitin Mohta - Macquarie Research: Last question, given the lower -- the still low attrition here and then its lower forecast, are you going to be pulling back your growth, your hiring expectations for this year? Gordon J. Coburn: Sure, Ed. Absolutely. Remember, the way the business model works and is supposed to work, is that we can flex up and down our lateral just-in-time hiring. Obviously, now that we're expected to grow at a slower pace this year, we'll still add a lot of people. But we will add not -- fewer people than what we would have otherwise, so we'll continue to do lateral hiring, but the pace of lateral hiring, obviously, will not be as fast as if we were growing at 23%. We're obviously going to honor all of our offers from colleges for the people who are joining this year. So there's no change in plans for that, but certainly the pace of hiring will not be as fast and it will be adjusted for the revised guidance. It's exactly the way the model should work as the demand environment changes.

[Operator Instructions] Your next question comes from the line of Rod Bourgeois with Bernstein. Rod Bourgeois - Sanford C. Bernstein & Co., LLC., Research Division: All right, guys, so the lack of acceleration in the U.S. Can you elaborate more, almost mathematically whether this reflects a weaker pipeline, decision slowness or is there a situation where there's cutbacks at existing large clients that's offsetting the benefit of new deals that are currently ramping? If you could give us a little more specificity on what's mathematically driving the lack of acceleration. Francisco D'Souza: I think, let me -- this is Frank. Let me take a crack at it, and then I'll ask Gordon to jump in as well. I think what we're seeing in North America is at the first level that, as we said coming into the year, that IT budgets remain flat, perhaps at the slightly upward bias year-over-year. The -- and when we look at the overall level of deal activity across the business, we continue to be -- to see a number of deals in the marketplace. Clients are actively out there. What we have seen, though, is that some deals are, particularly in financial services and in life sciences, are shifting out, particularly on the discretionary side. We saw a slow start to the year. We talked to you about that in the first quarter. What we would normally expect to see at this time of the year, as we've said to you in past years, is that coming into the second quarter, we would see a -- quite a significant acceleration in growth as budgets get finalized and you start to see the full quarter impact of approved budgets. That's what we -- we've seen that acceleration this year, but not to the extent that we would have expected when we gave you our prior guidance. And that's really what -- that phenomenon is really what's caused us to temper our full year expectations. Gordon J. Coburn: I think that's accurate. And as you said, particularly pronounced in life sciences and the large banks. And why the large banks and not the midsized banks? The midsized banks, there's still a lot of low-hanging fruit. So one of the ways that they can control their cost is to transition existing activities to global delivery. Obviously, the larger banks have already done most of that, so therefore they look at are the activities necessary or are there ways to reduce the total cost of ownership? So it's -- given the pressure in the industry, we understand what's happening. Clients are being very transparent with us about their need to do this. In some cases, their need to understand budgets; in some cases, the need to move things around. It's a challenging time out there for some of our clients. But once again, the good news is our clients are still growing with us. It's just issue of the pace of growth is not as robust as we would like. Rod Bourgeois - Sanford C. Bernstein & Co., LLC., Research Division: And Gordon, can you just elaborate, kind of as a follow-up, is the -- has the pipeline actually contracted over the last 3 months? Or are these discretionary projects remaining in the pipeline, they're just further down the road in terms of when they'll get funded? Gordon J. Coburn: Oh, I think it's the latter. The discretionary projects, particularly ones that were originally in scope for this year, are obviously ones that are priorities for clients. So when they don't have the dollars, you, generally, you're not seeing them say, "Okay, we'll never do it." They're saying, "Yes, it's not going to make this year's cut." Will there also be examples of projects that are shuttered? Yes, of course, but that's the small piece of it. The bigger piece is clients are saying, "I have to make tough decisions on what I can afford to do this year."

Your next question comes from the line of Darrin Peller with Barclays Capital. Darrin D. Peller - Barclays Capital, Research Division: One question on Europe and a quick follow-up to Rod's question in the North America. But on Europe, it looked like to us in the first quarter, the trends were a little bit are milding [ph] better than at least we would have expected, especially following last quarter's results. A, is that kind of trend with confidence in your view sustainable through the rest of the year out of the European sequential growth rates, or was that also seasonal? Can you give us a little more color on what drove the pick-up there sequentially? And then just back to North America, and in the bank side, specific to drivers, what are the drivers specifically that are going to leave that to come back down the road? I mean, obviously, right now capital markets, banks are a little weaker. Can you give us some specific examples? Gordon J. Coburn: Sure, let me take Europe, and then Frank will talk about Financial Services. In Europe, I would not, not expect the trend of strong performance that we saw in Q1 to continue. Our assumption is that, as I've mentioned earlier, in Q2, we would expect North America to grow faster than Europe. The strength in Europe in Q1 was somewhat isolated. It was 1 or 2 accounts that primarily drove that growth. Outside of that, Europe really -- outside those 1 or 2 accounts, Europe really played out the way we were originally anticipating for the quarter. Francisco D'Souza: And when we look at -- let me just sum it on the question about banking. When we look at our banking clients, I think that in North America with the banking clients, the incredible volatility that many of our clients are seeing right now is causing them to pause, particularly as Gordon said, the bigger clients who have significantly already leveraged the global delivery model, that's causing them to pause and to sneak out a new floor. What I expect is that once that industry stabilizes and then starts to -- and we start to see spend reemerge, because many of the banks do realize that they need to continue to innovate for growth and they do need to -- and there's also some drive based on the regulatory changes that are happening in the industry. So my expectation is that, that growth will reaccelerate, but it will probably take 1 quarter or 2 for that to emerge. And certainly, our current planning assumption is that banking, while we expect to see growth, will not be at the company average for the remainder of this year.

Your next question comes from the line of Julio Quinteros with Goldman Sachs. Julio C. Quinteros - Goldman Sachs Group Inc., Research Division: So Gordon, I think in the past, and Francisco, we've talked about this idea that as growth eventually decelerates for the model over some period of time that you guys would actually allow the margins to rise essentially to offset some of that potential impact. How far along are we in that thought process? Is this really just a temporary situation, or are you beginning to think about the potential for letting the margins expand at this rate with the growth beginning to decelerate? Gordon J. Coburn: Sure, Julio. Let me be absolutely clear about that. I don’t think we are anywhere near that issue. There is, in our belief, a lot of growth left in this business. Once again, put it in perspective, yes, we came down from 23% to 20%. Compared to any other industry, that's -- that would be exponential growth. Even in our industry, it's dramatically above others. So we don't view the fact we took growth down by 3 points this year, especially given everything that's happened in the economy, as a signal or inflection point that growth, long-term growth for the industry is over. We still think there's a lot of growth left for this industry.

Your next question comes from the line of Chris Hickey with Atlantic Equities. Christopher Hickey - Atlantic Equities LLP: Could you provide us a little bit more color on dynamics in the pharma business, please? Specifically, color around the client behavior. It seems some of the challenges the pharma companies are facing are fairly structural. So just trying to understand why the discretionary plans changed in a 3-month period? Francisco D'Souza: I think it's a -- this is somewhat of a normal pattern that we see. As we've said in our prepared comments with pharma, although this year, that trend was more pronounced than we've seen in prior years. We see pharma companies, as a general trend, every year, once they go through their budget process, in the first quarter, they will then sort of assess what their view of is of demand for that year, and based on that, moderate or regulate their discretionary spending for that year. And so, while you're right that many of the issues that pharma are facing are longer-term structural issues, there is the quarter-to-quarter volatility that we always see in the Q1, Q2 timeframe based on what their outlook is for that particular year. This year, we saw that, as we said during the prepared comments, pharma as a group declined 4% in the first quarter. That's unusual. We normally, in past years, have seen that sector be roughly flat, maybe slightly up. It's unusual for us to see a decline, even in the first quarter. So the severity of that was a little more than we have seen in the past. And as a result of that, we're expecting that this year will be a weak year for discretionary spending in pharma and that for the full year, pharma will lag the overall company in terms of growth. Christopher Hickey - Atlantic Equities LLP: If I could just sneak in a quick follow-up. Given what happened there and also the change in the banking dynamics in Q1 and also if we go back a year ago, the European situation, are you comfortable with your internal forecast, then, and that this is genuinely just changing dynamics of the end clients rather than anything else? Gordon J. Coburn: The answer is, yes we are. The March, April timeframe each year is a very critical period for us, because that's when we see what is the pace of acceleration -- and which really sets the tone for the rest of the year. And quite honestly, it's tough to get that exact. When we look at the differences, it was primarily, as we said, financial services, life sciences. We understand why those things happen. So I don't think this is a breakdown in processes or a breakdown in our ability to forecast. But it's a very dynamic environment out there. And of the entire year, this March, April time point and the information we learn in March, April sets the tone for the year. So it's -- that's when we get, really get to understand what clients are going to do and how fast they're going to do it.

Your next question comes from the line of Ashwin Shirvaikar with Citi. Ashwin Shirvaikar - Citigroup Inc, Research Division: Guys, can you comment on the third quarter? Do you expect third quarter to be an acceleration from 2Q, or is it pretty much going to be similar to 2Q in terms of how spending plays out? If I use the low end of your 2Q guidance, it implies that Q2 year-over-year growth might actually be lower. And I just want to find a bit, is that caution or is that something you're seeing in the business LAMPs continuing that way? Gordon J. Coburn: We think that's the appropriate assumption at this point. So if you back-calculate Q3 and Q4, we said, we're essentially saying that we expect sequential growth to be steady for Q3 and Q4 compared to Q2. We think that's appropriate right now based on the pace of acceleration that we're seeing. Once again, would we like it higher? Of course. But we're still very proud of the fact that we're expecting to grow at least 4.6% in Q2. And we're quite comfortable that, that pace of growth would continue for the remainder of the year. Ashwin Shirvaikar - Citigroup Inc, Research Division: And can you provide a breakdown of pharma and payor within healthcare and maybe a similar breakdown between banks, insurance and other financial services within BFS side? Gordon J. Coburn: Just give us a second. If you look at banks versus insurance to start with, I'm rounding a little bit here. But banks is about 2/3 of our BFSI segment, and insurance is about 1/3. And if you look at healthcare versus life sciences, there it's a little bit more weighted towards healthcare.

Your next question comes from the line of James Friedman with Susquehanna. James E. Friedman - Susquehanna Financial Group, LLLP, Research Division: I wanted to get your perspective about the application maintenance versus development. In terms of the Q2 guidance and the remainder of the year, what are your assumptions with regard to which of those drive the growth? And what the percentage contributions may be? Gordon J. Coburn: If -- my expectation is that for the year, we would see maintenance revenue grow faster than development revenue based on the revised guidance. The exact numbers are, obviously, always difficult to predict. But obviously, we think it will be a bit of a weaker development environment this year. So probably faster growth and maintenance. James E. Friedman - Susquehanna Financial Group, LLLP, Research Division: Then maybe as a follow-up, with regard to the Horizons 1, 2 and 3, could you map similar assumptions? It sounds like Horizon 1 may be more discretionary versus 2 and 3. Can you flesh out some perspective as to the assumptions about those 3 buckets? Gordon J. Coburn: Think about that a little bit differently. Don’t think about it so much as maintenance versus development. Think about it as where they are in their life cycle. So Horizon 3 is all the brand-new stuff where we're planting the seeds for the future. So on a percentage basis, it will grow very fast. But as a impact on revenue, it will be minimal, because it's growing off of a negligible base. Horizon 2, which are the businesses that have recently hit critical mass, certainly, I would expect those to grow faster than the business overall. If you look at Horizon 2, obviously, both ITIS and BPO, we put it into the maintenance category. Consulting would be the discretionary category. And then in the Horizon 1, which is the vast majority of our revenue, that's the one where I think we would expect greater strength in maintenance than development.

Your next question comes from the line of Joseph Foresi with Janney Montgomery Scott. Joseph D. Foresi - Janney Montgomery Scott LLC, Research Division: My question here is, first, what do you think in your opinion is the delta in the back half of the year spending? Is that discretionary spending? And if it is, what's your confidence in that delta and why? Gordon J. Coburn: Are you saying delta for over-performance of guidance or to get to guidance? Joseph D. Foresi - Janney Montgomery Scott LLC, Research Division: Either one, Gordon, whichever one you want to take first. Both would be great. Gordon J. Coburn: Sure. So to get to guidance, we're assuming there's no acceleration in growth rates compared to Q2. So, yeah, the math kind of works out to same sequential growth in Q3 and Q4 as we're projecting in Q2. So there's no hockey stick whatsoever built into our guidance. If there were to be over-performance for the year, that, I think, would come more from the discretionary work, because, obviously, we're being quite conservative on our assumptions for discretionary work based on the trends that we're seeing in March and April. Joseph D. Foresi - Janney Montgomery Scott LLC, Research Division: Okay. And then is there anything outside of sort of what that particular piece is? I mean, discretionary side, I mean, you've lowered it once here. How do we have confidence that the back half of the year and visibility increase on the back half of the year, are you taking less of a cut at discretionary spending? I'm just trying to get a full feel for how you would characterize the lowering of guidance and what gives you confidence that this is the only time you're going to have to do it? Gordon J. Coburn: Sure. As I said earlier, March and April are the critical period for us, because that's when people start spending their current year budget. So we now have that under our belts, so we understand what the trajectory is. And that -- so that gives us much a better ability to forecast what people are planning, because now they're actually spending those dollars, and we're seeing it at the pace that they're ramping it up. Obviously, we've -- obviously, we're being conservative on discretionary spend, which I think is appropriate in this environment. And the fact that there is no hockey stick in the back half of the year I think is very important. So we're not assuming that there's this great rebound in discretionary spend in the second half of the year. We're assuming it will kind of continue at the pace of growth that we're seeing in Q2.

Your next question comes from the line of Bryan Keane with Deutsche Bank. Bryan Keane - Deutsche Bank AG, Research Division: In banking, do you think Cognizant is reaching a full penetration level inside these larger banking clients? I guess in other words, there isn't a lot of -- maybe there isn't a lot wallet share gains left in those large banking clients? Francisco D'Souza: I think that in the traditional services application, development, application maintenance, that might be true in some of the very largest banks. But remember that we've got a whole range of new services, IT Infrastructure Services, Business Process Outsourcing, consulting and so on and so forth, not to mention the Horizon 3 services that we're now working on, where I think there's still plenty of growth available. What I think is also the case, though, is that as penetration rates increase in some of these larger banks, it does make us, perhaps, more sensitive to their ups and downs in their business environment because in past cycles, what we've seen is that as our clients, whether in banking or in any other industry, as they come under cost pressure, that serves somewhat as a catalyst to move more work to a global delivery model. That tends to -- that trend tends to be somewhat muted as penetration rates in these banks increase. So I think there's a little bit of an offset there. But in general, I don’t think that even in the largest banks, I would say, that penetration rates across our full range of services are -- we're fully penetrated. I think there's still growth there. Bryan Keane - Deutsche Bank AG, Research Division: Okay, just one quick follow-up. I think, Gordon, you said Q3 and Q4 look probably pretty similar. But isn't Q4 usually seasonally weak? So just wanted to get your thoughts there. Gordon J. Coburn: Q4 can go either way. When it's seasonally weak is in years that are very robust. Obviously, we're not going to see clients spend at their full budget capacity early in the year. So I don't think we're going to have a situation where clients run out of budget dollars during the year. So it's -- where you see that is where people run out of dollars. And given the pace, there's -- typically, clients are under-spending their budgets early in the year. So, I'm not particularly concerned about that.

Your next question comes from the line of Moshe Katri with Cowen. Moshe Katri - Cowen and Company, LLC, Research Division: Your thoughts about the recruiting for the remainder of the year, just given the fact that the additions during the quarter were kind of light? Gordon J. Coburn: Sure. Let me -- that sort of sets up to hit on just people in general. Our people statistics are unbelievably good this quarter. We had 10%, 10.6% attrition. And that's an all-in number. Just by comparison, that number was 15% last year. And even last year was a pretty good year. So we are doing terrifically in terms of both attracting people and retaining people. Our slots on colleges are the best they've ever been. Our yield ratios are great. Our -- as I think we may have mentioned on our last call, our most recent employee satisfaction survey, highest scores in our history. The headcount additions in Q1 are light. That was intentional. And part of the reason why is we onboarded our -- all of our college students last year on schedule, so we didn't defer any of it. So a lot of people joined us sort of Q3 of last year, so we have a lot of people coming out of the training program and becoming available for billing, so -- during late Q1, Q2. And that's why we didn't have to, obviously, do a whole lot of lateral hiring. And you never do a lot of college hiring in Q1. So the light attrition -- additions in Q1 make sense. In Q2, we're now starting to onboard the current year class. So you'll certainly see a pickup in the number of additions of college students in Q2 compared to Q1. Moshe Katri - Cowen and Company, LLC, Research Division: And then just a quick comment, a quick follow-up. Did you have any project cancellations during the quarter? Anything that's kind of notable? Gordon J. Coburn: Nothing, no trends. We always have normal course-of-business cancellations. We had 1 larger project that's ramping down due to some M&A work in one of our industries. That would be the only one that's material, and that actually had nothing to do with the economy. That was due to M&A.

Your next question comes from the line of Glenn Greene with Oppenheimer. Glenn Greene - Oppenheimer & Co. Inc., Research Division: Maybe just a little bit more color on the North America financial services, specifically, the large banks. Was it more specific to capital markets? Or was the weakness broader-based across both the consumer and commercial banks as well as capital markets? Gordon J. Coburn: No, it was broad-based at the large banks, more pronounced in capital markets, yes, but not -- certainly not isolated to capital markets. Some of the broad banks just have set overall cost-containment goals at the corporate level. Glenn Greene - Oppenheimer & Co. Inc., Research Division: Okay. Then just a quick follow-up, sort of the timing on when you saw the weakness. We obviously heard from a lot of your peers throughout the quarter. And it seems like a clear trend that there was some apparent weakness, even at the beginning of March, let's say? Did you kind of see this sort of slower ramp of demand throughout the quarter? Or did it become very apparent as you kind of went into the beginning of the second quarter? Gordon J. Coburn: No, remember, it's compared to expectations. So January is always soft. That's exactly what we would expect. February picked up a bit. The key is what's happening in the back half of March and April, because that's normally when you see the significant acceleration. And we did not see as much acceleration in -- coming out of March and into April. Glenn Greene - Oppenheimer & Co. Inc., Research Division: Okay. And then just quickly, the expectations for pricing for '12?

We would continue to expect pricing to be stable as maybe a slight upward bias but essentially stable overall. Because if you remember, most of our rate increases kicked in, in the early part of last year in 2011. Gordon J. Coburn: The pricing was flat in the first quarter sequentially, so it played out just as we anticipated.

Your next question comes from the line of George Price with BB&T Capital Markets. George A. Price - BB&T Capital Markets, Research Division: Many of my questions have been answered. But I did want to ask you about whether the continued volatility and uncertainty in BFSI -- it doesn't seem like that's really going to end anytime soon. If that drives any increased urgency in your part to expand and diversify your vertical footprint maybe more quickly away from that industry. Francisco D'Souza: It's Frank. Clearly, we're seeing volatility in some of our industry segments, financial services, as we said, also parts of the healthcare segment, we saw volatility. Clearly, our long-term growth is -- growth objective is to continue to diversify the business into new geographies, into new industries. It's part of our Horizon 3 effort to look at new markets, like, as I mentioned, the government and -- new industries like the government and new markets like Latin America. That's an ongoing process. I wouldn't expect to see that shift happen rapidly, given the concentration that we have in Financial Services. So while it's a long-term strategic objective, I wouldn't expect to see significant changes there over the short run. George A. Price - BB&T Capital Markets, Research Division: Okay, and then just one more. We've been hearing about a trend of an increased desire by clients to increase the mix of higher-end on-site resources. Part of this, I think, is probably a follow-on from what's going on with visas. But I think there's more to it than that. How are you addressing that? And, I guess, what are the -- more importantly, probably, what are the implications for your global delivery mix going forward? Francisco D'Souza: No, I think that to the extent that we're seeing that trend, it's -- I would say that it's confined to some of the newer, what I would think of as higher-value services, what we have been characterizing as our Horizon 3 services and some portion of what we would characterize as Horizon 2 services. So for example, our management consulting business and some of our new practices in areas like mobility and social will require a much stronger on-site presence. But this has been, I think, a key strength of Cognizant over many, many years. We think that we've invested over many years in building extraordinarily strong front-end teams. And in fact, I don't see that, that trend presents any sort of challenge for us. I'm very comfortable with our front-end teams. And in fact, I think it's a point of differentiation for the company. So I don't expect it to change our mix. I think that it's an area of strength of Cognizant's. It's one of the reasons that I'm very optimistic about our growth prospects going forward. And with that, let me wrap up this call by thanking all of you for joining and saying that I'd like to reaffirm that we're very confident in our ability to deliver our revised 2012 revenue growth guidance and maintain our position as the growth leader in our industry. Our businesses remains incredibly healthy, and we continue to invest in our long-term future. So thanks, everyone, for joining us, and we'll see you on the next call.

This concludes Cognizant Technology Solutions' First Quarter 2012 Earnings Conference Call. You may now disconnect.