Hannah Sloane - Financial Dynamics, IR Francisco D'Souza - President and CEO Gordon Coburn - COO and CFO

Rod Bourgeois - Sanford C. Bernstein Moshe Katri - Cowen and Company Joseph Foresi - Janney Montgomery Adam Frisch - UBS George Price - Stifel Nicolaus Bryan Keane - Credit Suisse

Ladies and gentlemen, thank you for standing by and welcome to the Cognizant Technology Solutions First Quarter 2008 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. [Operator Instructions]. I would now like to turn the call over to Hannah Sloane from Financial Dynamics. Please go ahead. Hannah Sloane - Financial Dynamics, Investor Relations: Thank you operator and good morning everyone. By now you should have received a copy of the company's first quarter 2008 earnings release. If you have not, please call our offices on 212-850-5600 and we will send you a copy. The speakers we have on today's call are Francisco D'Souza, President and Chief Executive Officer and Gordon Coburn, Chief Financial and Operating Officer of Cognizant Technology Solutions. 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 D'Souza - President and Chief Executive Officer: Thank you Hannah and good morning everyone. Thank you all for joining us today for Cognizant's first quarter 2008 earnings call. This morning I'll provide highlights of our first quarter results and discuss the key drivers of our financial performance. I will also discuss our outlook for the remainder of 2008 and the key focus points for the company in order to drive the business forward in the coming months and years. As always I'll be joined on today's call by our Chief Financial and Operating Officer, Gordon Coburn. We are pleased to report our first quarter 2008 financial and operating results during which particular geographies and verticals have demonstrated significant growth despite pockets of weakness and uncertain economic conditions. Our performance is a result of the diversification of our business across multiple industries and geographies. Starting with our financial and operating and results for the first quarter, we exceeded our guidance for revenue generating $643.1 million during the quarter which represents an increase of 40% from the first quarter of 2007 when we recorded $460.3 million in revenue, and an increase of 7.2% sequentially from $600 million in the 2007 fourth quarter. During the quarter our non-GAAP operating margin remained solidly within our target range. We continue to see demand for our services across a range of industries, geographic markets and solution offerings. We experienced strong performance in the health care sector which grew 45% year-over-year and 10% sequentially. Manufacturing, retail and logistics which grew 40% year-over-year and over 12% sequentially and our other segment which includes communication, information, media and entertainment and technology business areas which grew 11% sequentially and 41% year-over-year. And despite turmoil in the financial markets during the quarter, our financial services sector showed growth of 3% sequentially and 37% year-over-year. I will provide further color on the market environment and financial services in a few moments. Geographically, Europe continued the strong trend we've seen for several quarters growing 87% year-over-year and 12% sequentially and comprised 19% of our revenues, compared to 14% of our revenues in the first quarter of 2007. It is worth noting there are significant growth in Europe, five full percentage points of total company revenues over a one year period is the result of our focused efforts to increase our presence in this geography. Our growth in Europe has come across service lines in countries and is a testament to Cognizant's ability to higher and develop strong local teams across the world and to seamlessly integrate these teams with colleagues in our global delivery centers. We believe that this ability to build strong multi-cultural teams around the globe is the core strength of the company. On the client front, we had a growth addition of 56 new customers during the quarter. The number of accounts which are considered strategic, increased by 6 to 113, meaning these clients have the potential to generate between $5 million and $50 million or more in annual revenue for Cognizant over the long-term. We recently completed our 2007 annual customer satisfaction survey, a formal and exhaustive survey conducted by a third party. This year we had over 1,300 of our clients provide feedback on their experiences with Cognizant. Customer satisfaction at Cognizant remains extremely high with 89.3% of respondents indicating that they were either satisfied or extremely satisfied, an increase of 9% from the prior year. Furthermore when we questioned our clients more specifically about our individual core offerings we saw that was the satisfaction increase year-over-year, with a number of our solution areas including IT infrastructure services, SAP services, our customer solutions practice and our data warehousing and business intelligence practice. We were able to increase customer satisfaction in a year when we grew revenues by 50% and expanded our services portfolio and geographic footprint. Fully two-thirds of these clients said that Cognizant rated either better or much better than our competitors, and in particular they gave us very high scores on relationship management and project management and quality. At Cognizant customer satisfaction stands as our true north and has been the key element in our consistent growth. During the quarter, we increased headcount with the net addition of approximately 2,600 employees around the world, and in the quarter with approximately 58,000 employees. Our annualized employee attrition during the quarter remained flat compared to Q4 at 12.4%. I am also pleased to report that based on our 2007 annual revenues of over $2.1 billion, Cognizant was recently added for the first time to the Fortune 1000 list, where we now rank number 859. I'd like to take this opportunity to thank all the Cognizant associates around the globe who have played an integral part in making this accomplishment possible. Gordon will take you through our financial and operating results in greater detail in a few moments, but first I would like to provide some context on the current market environment, and our outlook for the remainder of 2008 and our key focus areas. During the later part of Q1, we saw a further weakening in the U.S. economy particularly in the financial services industry. Over the past 6 to 8 weeks, we have seen some project delays in IT spending cutbacks with our banking and capital market customers. As a result of the environment we are adopting a more conservative approach to Q2 and full year 2008. In the first quarter, growth in all our segments outside financial services was strong, all growing approximately 10% sequentially or greater. Europe was also strong. Our current guidance for Q2 is based on a similar pattern as we saw in Q1, with our usual risk adjustments. We assume that sequential financial services growth will be in the single digit during Q2. We expect to see continued healthy growth in Europe and across other industry segments. We believe that this is a reasonable but cautious approach to take given our current visibility to sold business, and our April revenues results. As we look to the full year 2008, we expect an increase in our sequential growth in the second half of the year based on several factors. First, our pipeline of new business with existing and new customers continues to be strong, the general trend towards spending more with offshore providers still remains intact as clients under pressure seek additional ways to do more with fewer dollars. As a result, our pipeline of large deals is extremely strong. We are currently tracking 50 large opportunities at various stages in our pipeline each having a revenue potential of many million dollars over several years. Several of these deals are with... are existing clients who are looking to move additional work to an offshore model, more aggressively. This category of pipeline opportunities tends to have shorter sale cycles since our existing clients are experienced in working with us. We have also recently won a number of large deals that are expected to begin, to ramp up during June and beyond. As I mentioned, the number of strategic customers increased by 6 during Q1. Another data point, demonstrating that robust demand continues. Current economic conditions are driving demand for our services, focus on improving client efficiency as companies feel the need to invest in cost rationalization in order to compensate for the pressures on their businesses. We saw solid growth in our business line focused on efficiency during Q1, with maintenance services increasing 10% sequentially and 37% year-over-year. Similarly, during the quarter other practices such as BPO, testing and ITIS, IT infrastructure services continued to show robust growth. Overall, we are seeing the cyclical slowdown to drive a greater desire amongst clients to do work using an offshore model. We also expect to see continued growth in Europe. Our pipeline of new business there remains strong, as offshore services are relatively under penetrated in Europe. In addition our recently announced alliance with T-Systems provides us with additional access to the German market, our previously under leveraged source of opportunity for Cognizant. Finally, it's worth noting that in parallel with the cyclical economic changes, many of the industries we serve are in periods of rapid secular change. This provides Cognizant with an opportunity to partner with our clients, to provide services to help navigate these industry level structural changes. Within client facing these types of pressures, we are engaged at a much higher consultative level with a very specialized set of services. Often these engagements identify significant technology and outsourcing opportunities that we are then well positioned to undertake. The investments that we have been making in building deep industry expertise through Cognizant Business Consulting or CBC enable ask to provide services that help our clients to identify and make sense of these industry levels structural changes and to operationalize new approaches to drive results. As we move forward in 2008, we see client demand being driven by two trends that I have already mentioned. Our cyclical trend related to the current micro economic environment and a secular trend resulting from different structural pressures within the industries we serve. It is at the confluence of these two trends one cyclical and the other secular that we feel Cognizant is exceptionally well positioned. Life Sciences companies for example our facing pressures from declining pipeline, pipelines of new drugs and increased regulatory scrutiny. During the quarter, we began work on our previously announced agreement with AstraZeneca to help drive greater R&D efficiencies and clinical data management through improved process standardization, consistency of delivery economies of scale and cost savings. This agreement is one the largest such contracts within the pharmaceutical industry and deliver economies scale and cost savings that will have AstraZeneca R&D deliver its commitments to improving effectiveness. Similarly banking and financial services, healthcare payors, communications companies, media and entertainment all face periods of rapid structural change in their respective industries. Let me give you an example of some of work we are doing in the communications area. We recently worked with the North American Tier-1 ILEC or incumbent local exchange carrier. That was seeking to rapidly add new features and functionality in order to differentiate their services to compete effectively with other ILECs and cable providers. Continuing problems with application performance and stability issues had impacted their ability to meet their revenue growth targets. Over a six-month period, we work closely with the client, executives, business operations leaders, and IT leaders to identify more then 2,300 improvement opportunities spanning business processes, technology and change management in order to stabilize the operations and delivery capabilities. These improvements opportunities were further assessed and prioritized in terms of value, effort, risks and dependencies. As a result of these, the client was most recently able to maintain greater then 99.99% up time across the major core application and improve key metrics such as auto order flow through by 45%. These results have directly supported the client revenue achievement goals and improved market position through higher levels of customer satisfaction. I have provided these two examples to give you some color around the types of works that Cognizant is now routinely opt to perform. These case studies build in to the bigger picture to which I would now like to speak. as we look to the year ahead, we remain committed to ensuring that our services, industry vertical segments, and geographies continues to service our client in the best and most efficient means possible, ensuring we are... we continue to our industry leading growth. To us this means building the capabilities at Cognizant which enables clients to navigate through difficult economic times and also to cope with secular industry level challenges. With this objective in mind I would like to turn to the goal we have set for the remainder of the year and beyond which the entire management team is focusing upon achieving and which we believe will drive our continued expansion. First, in the short term we have focused on the areas where we have seen core market strength such as healthcare and life sciences, retail and manufacturing, and media and entertainment. In addition, we will continue to focus on growth in Europe. Second, we continue to see the benefits of deepening our knowledge of the industries that we serve, having deep industry expertise positions us well to help clients navigate structural changes in their industries. We expect to be active in strengthening our vertical expertise during the course of the year. Third, in addition to focusing on growth opportunities, we will continue to examine our own internal cost efficiencies, and maintain a focus on higher utilization to optimize efficiencies in our own business to maximize our ability to invest in such areas as developing our leadership talent and building out our global delivery networks to support the long term growth of the company. And finally, we believe the key to long term growth in the current environment is to maintain our focus in culture and being the partner of choice to companies seeking help in navigating economic uncertainty and secular disruptions in their industries. We are focused on expanding our range of service offerings and we will aggressively focus on securing higher value relationships that encompass a range of our offering across the number of geographies and contribute financially to Cognizant, through direct engagements and downstream pull through. We look forward to discussing our progress in each of these areas throughout the year. Now I'll turn the call over to Gordon who will walk you through our financial and operating results in greater detail. Gordon? Gordon Coburn - Chief Financial and Operating Officer: Thank you Francisco and good morning to everyone. I'd like to provide some additional information on the first quarter and then discuss our financial expectations for the second quarter as well as the full year. Revenue for the first quarter grew 7.2% sequentially and 39.7% year-over-year. During the first quarter, our Financial Services segment, which includes our practices and insurance, banking and transaction processing, grew by over $78 million year-over-year and represented 45.5% of revenue for the quarter. Healthcare, grew over $49 million and represented almost 25% of revenues. Retail, manufacturing and logistics grew by almost $28 million representing just over 15% of revenues for the quarter. The remaining 15% of our revenues came primarily from other service oriented industries of communications, media and new technology which grew by over $27 million. For the quarter, application management represented 52% of revenues and application development was 48%, both services continue to grow significantly in Q1. Application management grew 37% year-over-year and 10% sequentially. Development grew, 43% year-over-year and 5% sequentially. The sequential strength in application management, we believe was driven by client seeking to optimize efficiency and non-discretionary spending due to budget concerns. During the quarter, almost 80% of revenue came from clients in North America. As Francisco mentioned, approximately 19% of revenues were from Europe, just over 1% of revenue came from the Asian market, Europe grew 12% sequentially and 87% year-over-year, as a result of our continued investment in that region. We had a gross addition of 56 new clients during the first quarter. We closed the quarter with 505 active clients. During the quarter the number of accounts which we consider to be strategic and have the potential to ramp up to at least 5 to more than $50 million in annual revenue increased by 6, bringing our total number of strategic clients to 113. Turning to costs, on a GAAP basis cost of revenues exclusive of depreciation and amortization increased by 44% for the quarter as compared to the first quarter of 2007. First quarter cost of revenue included approximately $5.5 million of stock-based compensation expense as well as $400,000 of non-cash expense related to the accounting or in the end fringe benefit tax expense recovered from employees related to the exercise of stock options. Due to weak stock price in the first quarter the number of options exercised was unusually low resulting in a lower than anticipated fringe benefit tax expense in the quarter. As I discussed during the call in February, the Indian fringe benefit tax expense represents accounting impact of the conversion of a portion of taxation in India, from employee stock option gains from an employee income tax to a company paid fringe benefit tax which is then recovered from the employee. We are treating these tax payments made by Cognizant as an operating expense the equivalent now is recovered from the employee as option exercise proceeds which are booked direct with equity. There is no cash impact to the company from this taxation. Now I will return to cost of revenues. The increase in cost of revenues is primarily due to additional technical staff both onsite and offshore required to support our revenue growth offset slightly by the impact of utilization and several other factors. We increased our technical staff by more than 2,300 people during the quarter and ended the quarter with approximately 54,400 technical staff. First quarter SG&A, depreciation and amortization expenses were $165.1 million on a GAAP basis, up from $121.8 million in the first quarter of. GAAP, SG&A expense in Q1 of 2008 included approximately $7.5 million of stock-based compensation expense and $500,000 of non-cash expense related to the Indian fringe benefit taxes which I mentioned earlier. GAAP operating income for the quarter increased approximately 34% to $111.7 million, from $83.6 million in the first quarter of 2007. On a non-GAAP basis, which excludes the impact of $13 million of stock-based compensation expense and $900,000 of fringe benefit tax expense, operating income for the first quarter was $125.6 million, up 38% from last year. Our GAAP operating margin was 17.4% for the quarter and our non-GAAP operating margin which excludes stock-based compensation expense and stock-based non-cash Indian fringe benefit tax expense was 19.5% for the quarter, within our target range of 19% to 20%. The average rate for the Indian rupee was approximately 39.7 in the first quarter versus 39.3 in the fourth quarter of 2007. Interest income for the first quarter was $6.2 million, compared to $6.7 million for the first quarter of 2007, and $8.5 million in the fourth quarter. Sequential interest income decreased primarily due to a lower average, local cash balance in the first quarter resulting primarily from the full quarter impact of our Q4 share repurchase and Q4 acquisition of marketRx, as well as the very significant decline in short-term interest rates from the United States. We had a $3.9 million foreign exchange gain during the quarter, primarily due to the impact on our inter-company balances from the strengthening of the Swiss franc and euro against the U.S. dollar. Our GAAP tax rate for the first quarter was 16.4%, we expect the 2008 tax rate to be around 16.4%, As has been previously discussed, some of our tax holidays are currently schedule to end in March 2009, in last few weeks the government of India has proposed extending the current STPI holiday by one year ending in March 2010, compared to 2009. We are monitoring the situation and expect formal approval of this extension in the very new term. Our GAAP tax rate can be... can vary based on extent of the Indian fringe benefit tax expense which I discussed earlier since such expenses are non-cash and therefore not eligible for tax deduction. Our diluted share count for the fourth quarter was 299.1 million, down from 302.2 million in Q4 2007. This decline from our Q4 share count was due to the full quarter impact of our repurchase approximately 3.4 million shares during Q4, as well as a lower average stock price in Q1, as compared to Q4 2007 which impacts the diluted share calculation. Turning to the balance sheet, our balance sheet remain very healthy. We finished the quarter with just over $645 million of cash, short term and long term investments. During the quarter, approximately $170.4 million of auction rate securities were reclassified as long term investments. During the quarter, operating activities generated approximately $22 million of cash. Financing activities generated approximately $17 million of cash on the proceeds of option exercises and related tax benefits as well as our employee stock purchase program. In addition, we spent approximately $53 million on capital expenditures during the quarter, and approximately $9 million towards the book value purchase of T-Systems India operations. For 2008, we continue to expect to spend approximately $250 million on capital expenditures, the substantial majority of which is related to the construction and equipping of additional development facilities to support our long-term growth. Based on our $452.7 million receivable balance that December 31st... on March 31st we finished the quarter with a DSO including on those receivable of 73.5 days compared to 68 days in the same quarter of 2007. And up about 67 days in the fourth quarter of 2007. During Q1 excluding on those receivables our DSOs approximately 64.1 days. The quality of our receivables portfolio remains strong, our unbilled receivables balance is approximately $66.7 million at the end of the first quarter, an increase of $20 million from March 31, 2007, and up approximately $13 million from Q4 of '07, approximately 54% of the March 31 unbilled balance had already been build. During the first quarter, overall 26.8% of our revenue came from fixed price contracts, up from 25.6% in the fourth quarter 2007, and up from the 25.3% in the... 25.6% in the fourth quarter of '07 and 25.3% in the first quarter of '07. When we look at the mix of solution type during the first quarter 32% of our development revenue and 22% of our maintenance revenue came from fixed price contracts during the quarter. We are very pleased with this upward trend and the potential revenue coming from fixed price contracts this is a long-term strategy that seems to be starting to pay off. Turing to head count, at the end of first quarter our worldwide head count including both technical professionals and support staff totaled 58,000 people. Turnover as Francisco mentioned, including both voluntary and involuntary was approximately 12.4% annualized in the first quarter. First quarter attrition represented 265 basis point improvement versus the first quarter of 2007, and was essentially flat with the fourth quarter of 2007. Due to the very large intake of college graduates during the latter part of the fourth quarter of last year, our average offshore utilization including these trainees declined as we had planned during the first quarter to approximately 53% from 56% in the fourth quarter. Offshore utilization excluding recent college graduates who are in our trainee program during the quarter was approximately 70%. Onsite, utilization remains at 88% during the quarter, throughout the remainder of 2008, we will be increasing our utilization rates to take advantage of scaled economies and to leverage our historically heavy over investment and bench resources and large number of trainees we had on board coming into the year. We strongly believe this is the right thing to do for the business, providing several benefits including more challenges for employees through faster deployment and more frequent assignment rotations, which in turn positively impacts morale and attrition, freeing up of additional dollars to invest in clients facing activities and long-term growth initiatives, and creating desired flexibility in our business model, given the current environment. As you probably, noticed we are no longer providing year-end head count objectives. As we continue to increase utilization levels it is our desire to have flexibility in our staffing decisions in order to determine the optimal level of utilization. Furthermore, as we continue to diversify our services mix, there is a corresponding change in the talent mix that we require in the business. We are not concerned about our ability to step up for upcoming growth in the business since we are currently have a very strong pipeline between these due to significant trainee on-boarding in Q4 and the economic softness in our financial services businesses in the front part of this year. At the end of Q1, we have closer to 9,000 unbilled people in our training program. We believe that our pipeline of trainees combined with unbilled resources is an important indicator our capacity to meet demand. Going forward, we continue to provide you with visibility into our pipeline of trainees and unbilled resources to provide you with visibility on our rate ramp up capacity. Finally, I would like to remind you that we have the ability to adjust our head count needs real time as the year progresses to adjustments, to the rate of lateral hiring or campus hiring and timing of on-boarding the cost of 2008. For example in 2006, when demand for our services turned out to be significantly higher than we anticipated at the start of the year, we were able to quickly respond to a combination of the leverage I just mentioned. I would now like to comment on our growth expectations from the second quarter of 2008 as well as full year. The investments we are making continue to produce results. It is allowing us to different ourselves in the marketplace both in terms of winning and growing new clients, expanding our service offers and strengthening our geographic presence. In addition, our client and employee satisfaction levels remain at a level, which we are proud. This is resulting strong Q1 results and despite the economic uncertainty continues to provide us with a strong foundation for growth in 2008. That said, we have adjusted our full year guidance to reflect the increased economic uncertainty over the past two months, particularly in the financial services industry our pipeline group remains robust, and we continue to win significant projects. However, this is muted by a either IT spending environment than we saw just three months ago. We continue to focus on working with our clients and leverage the advantage of our business model to help them in these challenging economic times. For the second quarter of 2008, we are projecting revenue of at least $680 million. This represents sequential growth of at least 5.7%. We continue that significant revenue... visibility due to our high level of recurring revenue and long-term nature of our customer relationships. Today we have customer commitments for 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 indication. We expect revenue of approximately $2.95 billion. This represents growth of approximately 38% compared to 2007. As it's been typical in past years, we expect majority of our growth in 2008 will come from the ramp up of clients own over the past several of years. During 2008, we intend to continue to closely monitor our spending assuming no material movements in the rupee, which actually has moved in our payment last few days. We are expecting operating margin to remain in the range of 19% to 20% before the impact of equity based compensation and non-cash fringe benefit tax expense from on the exercising stock options in India. This margin expectation is in line with our historic margin level goals. With this expected level of revenue growth and our expected operating margins, we are currently comfortable with our ability to deliver in Q2 GAAP EPS of $0.34 to $0.35, and non-GAAP EPS of $0.38 to $0.39, excluding estimated stock based compensation and non-cash stock base and the fringe benefit tax expense of $0.04. This guidance includes the anticipation of a Q2 share count of approximately 301 million shares, a tax rate of 16.4%, and an operating margin within our target range of 19% to 20% on a non-GAAP basis. For the full year 2008, based on current business trends, we currently project GAAP EPS to be approximately $1.50 and full year non-GAAP EPS to be approximately $1.67, excluding stock-based compensation and Indian fringe benefit taxes expense of $0.17. This guidance includes the anticipation of a full year share count of approximately 301.3 million shares. Finally, please remember that the accounting for the non-cash stock-based Indian fringe benefit tax expense adds a level of complication and forecasting GAAP, operating expenses since the GAAP expense is driven by employees decision to exercise other options, which is obviously difficult to predict or control. We've put a place... in our full year GAAP guidance of $10 million for the full year, but the actual option exercise is dependent on many factors including our stock pricing at a given quarter. With that, Francisco and I would now like to open the call for questions. Operator? Question And Answer

[Operator Instructions]. Your first quarter comes from the line of Rod Bourgeois with Sanford C. Bernstein. Rod Bourgeois - Sanford C. Bernstein: Yes, its' Rod Bourgeois here. Gordon, I wanted to enquire about the full year guidance of approximately 38%. This is somewhat new language in terms of the way you are giving guidance versus the past. And so I was wondering if you could give us some more specificity on what approximately 38% means. Is there anyway that you can give us kind of a low end of the realistic range for 2008 versus the upper end of the realistic range that you are looking at? Gordon Coburn - Chief Financial and Operating Officer: Yes, obviously we changed the words as we mentioned in our script from at least 38% to approximately. And the reason we did that is we... the economy has clearly worsened particularly in the last six to eight weeks. And where we in our at least guidance we had both in cushion for the weakening economy, we feel that reduce a good amount of that cushion. There is no specific range that the 38% means. But I think what it indicates is we don't expect it to be dramatically higher or lower than based on that what we see today. Rod Bourgeois - Sanford C. Bernstein: Okay. And then Gordon, is there any more color you can give on what cause the uncertainty over the last couple of month that you are referring within financial services? Can you give some example of the nature of disruption that might have occurred in some of your project? And then as you look at that going forward, what assumptions are you making about that type of project disruption going forward. Are you assuming as the uncertainty that was created in the last couple of months, do you assume that gets rectified as the year progresses or are you continuing to assume that type of activity might continue? Gordon Coburn - Chief Financial and Operating Officer: Let me hit the first part of question and Francisco will pick it up. Obviously in early March, the world of financial services changed a bit with the announcement from Bear Stearns and both the reality and perception that triggered throughout the financial services industry, and clearly had an effect on people's decision and their outlook on the health of their businesses for the year. So there was a very real event that happened, really right around early March. And that's when we saw a change in attitude. But let me have Francisco comment both on some more specific on what we are seeing and more importantly what our sense is on how people can be acting in the medium term. Francisco D'Souza - President and Chief Executive Officer: Yes, great. Rod, as Gordon said, things did change significantly during March. And we saw clients as a result of that step back and say we want to reassess our spending plans going forward. So, we certainly saw some project delays during March in particular and some cut backs as a result of that. Now, looking forward I will tell you, what we are seeing and then I will also tell you, what we've assumed as we've looked at Q2 guidance. What we are seeing is that, clients in financial services are beginning to digest the news. They are sort of re factoring their plans. And I would say beginning to start to spend again having digested the economic news of March. Now, in our guidance for Q2, we have been somewhat conservative on that front, and what we have assumed is that financial services... our growth in financial services is in the single digits sequentially in Q2. So, I think that a prudent and conservative approach at this point, given what we are seeing; it's possible that our clients will have factored in there the economic news and will start to spend again and ramp up in Q2. But at this point, we are not comfortable assuming that in our guidance. Rod Bourgeois - Sanford C. Bernstein: That's very helpful. And then I guess on a more positive note; can you give us an update on how the early stages of the T-Systems relationship is going and when might we see some benefit from that relationship? Is that a 2009 event or that helps your growth in Europe or are you starting to see new revenues come into the pipelinepretty soon in Germany? Thanks a lot. Gordon Coburn - Chief Financial and Operating Officer: Sure, we have been in the T-System thing now for about two months or so, on the ground transitions, re-batching people, that's all have been going very well. That process is essentially done. The other core part of the relationship obviously is jointly going to market in Germany and we are starting to do that. Obviously, there is lead time when that stuff hits, so I think you are right in assuming for joint opportunities for new clients, there are some lead times. We are also leveraging T-Systems in certain situations, where we need hosting capabilities and we've already won our first joint field on that and kind of some others in the pipeline. But we are in the process of building that joint sales pipeline. And so far, it's looking good. But I think your assessment is right, but the new stuff takes a little while to kick in. Rod Bourgeois - Sanford C. Bernstein: Thank you, guys.

Your next question comes from the line of with Moshe Katri Cowen and Company. Moshe Katri - Cowen and Company: Hi, thanks; good morning. Can you hear me? Gordon Coburn - Chief Financial and Operating Officer: Yes; go ahead, Moshe. Moshe Katri - Cowen and Company: Great. So, are you assuming any contributions from T-System in your '08 guidance, Gordon? Gordon Coburn - Chief Financial and Operating Officer: Absolutely, because we... that's part of winning that relationship. We took over responsibility for their offshore operations, so... Moshe Katri - Cowen and Company: Can you remind us what's the contribution by couple of 100 basis points? Is that kind of a good number for the year? Gordon Coburn - Chief Financial and Operating Officer: We took over about 1,000 people that include some support people and so forth. So, I don't have the exact number in front of me, but it will... certainly one of many new customers that will help drive both during this year. Moshe Katri - Cowen and Company: Understood. And then you didn't talk revenue concentration. Usually, you talk about, I don't know number if you mentioned half one, but you do talk about outside of top ten and when you're talking about the deferrals that you've seen during the quarter, was it concentrated in the top five, especially obviously our focus is on your largest client that's more on the banking side? Gordon Coburn - Chief Financial and Operating Officer: Let me just give you the statistics and then answer the question. In the first quarter, the top five were approximately 20.5% and the top ten were approximately 31% of revenue. If you do the map, you will see that in terms of sequential dollars, the top five was down in Q1 same exact trend that we saw in Q1 of last year, the top five in dollar terms was down and then you picked up, so you always have some gyration. So, do the top five contribute to that? Certainly. Was it just the top five and then... Moshe Katri - Cowen and Company: Okay. Can you comment on your largest client? Is there... at this point if you've seen a slow down there and what you are expecting to see from this client throughout the year? Gordon Coburn - Chief Financial and Operating Officer: We don t comment on specific clients, but among our largest clients, we still believe there is a meaningful growth opportunities. Moshe Katri - Cowen and Company: Okay. Gordon Coburn - Chief Financial and Operating Officer: But gyrations absolutely just like we had gyrations last yea and the year before that. Moshe Katri - Cowen and Company: Okay. And then finally, what sort of expectation should we have for application development growth there in the second half of '08? Gordon Coburn - Chief Financial and Operating Officer: I am hesitant to set expectations for that. As we are talking to clients there, are still... clearly talking about discretionary development stuff. But when I think about where exactly the year settles down the... the ultimate answer will be more dependent on that. So clearly we expect a growth... how much growth, I'd be hesitant to give us specific number. Moshe Katri - Cowen and Company: Okay, then... sorry, go ahead. Francisco D'Souza - President and Chief Executive Officer: Hi, Moshe, just a very quick macro commentary on that. In my comments, there really are two things going in the... in our marketplace right now. You've got the cyclical trend, which is driven by obviously the sort on we're seeing and then you've got secular trends in each of our industry. And each of those trends actually driving different kind of demand for us. So the cyclical trend tends to drive demand for services that are focused on helping customers reduce costs. So, the cyclical trend drives application, outsourcing drives it seems like certain types of BPO, IT infrastructure services, our testing services and so and so forth. On the secular side, as customers look to cope with fundamental structure changes in the industry, that tends to drive more of the application development and new system implementation type of work, because the structural changes in the industries are generally requiring clients to do things in new and different ways, and that tends to drive the demand for new systems in some form. So, it really depends as you go to 2008, which of these two trends is going to be a stronger trend. I think both of them are going to play into the mix, which is why it's a little difficult for us to predict exactly how development and maintenance are going to behave over the course of this year. Gordon Coburn - Chief Financial and Operating Officer: Given... I want to officially call 9:30 for the market opening for everyone, let's go on to the next question, operator.

Your next question comes from the line of with Joseph Foresi with Janney Montgomery. Joseph Foresi - Janney Montgomery: Hi guys. And in the essence of keeping a quick... just two quick ones. Just first in talking to the clients, what was the reasoning for the quick hold back? If you can give us an idea of that and then conversely, pickup in the strategic client, when we can talk about their reasoning to potentially outsource more. Francisco D'Souza - President and Chief Executive Officer: The pull back I think, Joe, was just the increased level of uncertainty. Clients... there is uncertainty out there. We are not sure what this means and we're going to reassess our current spending to see if it aligns with the new view of the world. That's actually very, I don't know, I think I would say expected behavior given what we saw in March in the broader economy. Gordon Coburn - Chief Financial and Operating Officer: In terms of the strategic customers, clearly what we are seeing is the comfort level with sourcing a broader range of services used in global delivery model is expanding very quickly, and that' why as Francisco mentioned the pipeline of large deals the strongest it's ever been, and we are winning larger deals. And that's tied to people are now saying let's look at kind of the broad range of offshore. We understand offshore model works, so let's make the decision and get going. So, that's part of why... let me look at back half of the year, we are saying based on what we are winning, it actually looks pretty good. Joseph Foresi - Janney Montgomery: And just as a... guidance of approximately; does that... are you factoring an improvement in the economy or are you expecting it to be stable or down? What are your views in taking that? Gordon Coburn - Chief Financial and Operating Officer: Our guidance assumes the economy is stable... stable with current condition. Joseph Foresi - Janney Montgomery: Okay. And then one last quick one; two part are here. Obviously, you sort of are de-linking hiring from revenue growth by not giving a guidance here. We have heard from sort of other vendors that the ability to pick up employees in just in time has improved. Is that something you are seeing and also if you can give us, what your annual wage increase for this year, that will be great. Gordon Coburn - Chief Financial and Operating Officer: Sure, in terms of our ability to resource people, yes, it has improved; there is no question about it. And also we are sitting with a very healthy resource pool right now, combination of both lateral people, who are ready to run the projects as well as we hired a lot of trainees late last year. So, we are very comfortable with both our ability to meet demand with people we have and then... if it turns out, we need more... we can easily get them in the market. So that's not a concern, what we don't want to do is set a number that and then start to hit that even if it's not operation, the right thing for the business. In terms of wage inflation, clearly it's coming below last year offshore. Our competitors most have announced results and have indicated sort of 10% and 11% offshore wage inflation. The devil is obviously in the details on that and we are just watching make sure what exactly happens on ground, and so my expectation is when it all settles down, it will be at that level maybe even a little bit low back when you sort of calculate the real number. Joseph Foresi - Janney Montgomery: Okay, thank you.

Your next question comes from the line of Bryan Keane with Credit Suisse. Gordon Coburn - Chief Financial and Operating Officer: Hi, Bryan. Operator, why don't we go to next one?

Your next question comes from the line of Adam Frisch with UBS. Gordon Coburn - Chief Financial and Operating Officer: I think everyone went home. Adam, are you there? Adam Frisch - UBS: Hello? Gordon Coburn - Chief Financial and Operating Officer: Yes, got ahead. Adam Frisch - UBS: Okay, thanks. The June quarter guidance implied some stronger results or at least some stable results in the second quarter to get to the full. Again, is that... my call got chopped up a little bit in between, but I think Francisco was going through that. Is that a measure of what you have now on the pipeline and what the projects that are already ramping or telling you or does that anticipate deal flows moving through cycle as anticipated? Did that take account into any potential delay? Francisco D'Souza - President and Chief Executive Officer: Adam, I missed first part of your question. You cut out a little bit there, but as it relate to Q2, we've taken somewhat cautious approach with financial services assuming that financial services will grow in the single digit sequential in Q2. And then we still expect healthy growth in Europe and in some of the other industries, the industry segments. As... our Q2 view is based on our current visibility into coal business and also revenue results, which we haven't at this point. As we look to full year, obviously that's based on the combination of deals that we have in the pipeline as Gordon... as I mentioned, we are tracking 50 large opportunities. We've won a number of deals that we'll start to ramp up in June. And it's also based on existing business with clients that we see in the third and fourth quarters. Adam Frisch - UBS: Okay. On the 38% guidance, obviously still close to 50% better than your largest competitors, yet the multiples are the same. We think that provides some opportunities for the stock to achieve some upside. But what could happen to threaten the 38% on the year? Would that have to be something catastrophic or would it just be a further deterioration? Gordon Coburn - Chief Financial and Operating Officer: It's just a significant further deterioration in the economy. Clearly, that's not factored in, obviously there has been a lot of deterioration already, so you were assuming the economy and the industry we play in are kind of stable from here on now. Adam Frisch - UBS: Okay. And then last question, and I will get off. The majority of your strategic client base that has always meant to be kind of a secret sauce here for the continued growth. Where are you in that maturity cycle or your key client? Gordon Coburn - Chief Financial and Operating Officer: This is part of what I think is a core part of the story, because of the range of services that people want to do offshore, keeps expanding. Now infrastructure management, business process outsourcing, the higher end consultants, clients that in theory should have matured by now, still aren't maturing, because we can tap additional budget pool. So, when I look at our under 13 strategic clients overall, we are 20, 30% penetrated. That number just hasn't changed a lot, because the denominator keeps getting bigger as the numerator increases. Adam Frisch - UBS: Great, thanks guys.

Your next question comes from the line of George Price with Stifel Nicolaus. George Price - Stifel Nicolaus: Hi, thanks very much. I guess just you mentioned financial services, single digit quarter-over-quarter for 2Q. Are we talking low single digits again? And typically given that 2Q, I think tends to be your strongest seasonally quarter in terms of quarter-over-quarter growth. And guidance is basically in the mid single digits. Is there anything else pressuring revenue outside of financial services going into the second quarter? Gordon Coburn - Chief Financial and Operating Officer: The primary thing is financial services. We had a little bit conservatism on other areas; yes, we'd be crazy not to. Bu the big driver of why Q2 has not been... we are not forecasting to be the same strength as it has historically been the primary driver is financial services. George Price - Stifel Nicolaus: Okay. You mentioned that you have the April numbers and you've looked at them. What are they telling you? Can you give us a little detail and maybe how things progressed sequentially in March and April? Gordon Coburn - Chief Financial and Operating Officer: Yes, we don't really break out sequentially, but what it tells us that basic guidance that we laid out that the business continues to be healthy. So, eve it's the base of our guidance, the 680, we are still guiding to sequential growth levels up what the industry is guiding to. And we need to watch financial services and we book out into our guidance. George Price - Stifel Nicolaus: Okay, and maybe let me ask one more on pricing, given what you are seeing, you thought it previously about expectations around 2% intended to be less aggressive at least in commentary than many of your peers. What do you see now for the year? You're seeing clients backing off a price increases, are you seeing any as per concession? What are you seeing competitors doing? Gordon Coburn - Chief Financial and Operating Officer: Yes a few people always ask for concessions and lower prices, yes, that happen for us 10 years, but have we seen anything that changes might view on where pricing will end up for the year, no change in the my price application. George Price - Stifel Nicolaus: Okay, great. Thanks very much. Gordon Coburn - Chief Financial and Operating Officer: Thanks. And I think we have time for one more call operator.

Your next call from the line of Bryan Keane with Credit Suisse. Bryan Keane - Credit Suisse: Hi. I am not sure what happened there. I guess is the weakness just in financial services or are there other vertical for the weak as well? Gordon Coburn - Chief Financial and Operating Officer: When you look... the primary... I think the financial service is not big piece of the pie for us. And what do you look at where things really change during the quarter, obviously the financial services industry has pretty big shock as we went into March. So, when we look at the over all business, the... do you have to keep an eye on everything just because of the weak economy, yes, but the one we are keeping a close eye on is financial services. Bryan Keane - Credit Suisse: Okay, and then the key systems deal, I though that was about 5 million on an annual basis; is that... am I close, Gordon? Gordon Coburn - Chief Financial and Operating Officer: You broke up; you thought it was what? Bryan Keane - Credit Suisse: About 35 million in annual revenues. Gordon Coburn - Chief Financial and Operating Officer: We haven't broken out the exact number for confidentiality reasons, but as we pick up 1,000 people offshore, that includes a bunch of support people and bench folks. So, it's one where we get some revenue from winning that deal and I think someone asked the question earlier. As we look out to the potential to jointly sale particularly in the German... European and German market, we think medium term and long-term, the part that's most exciting about deal is the upside opportunity from winning new customers. Bryan Keane - Credit Suisse: Is there any other acquisitions in the revenue guidance? Gordon Coburn - Chief Financial and Operating Officer: No. Bryan Keane - Credit Suisse: Okay. And then just I guess finally, I guess guiding double-digit sequential third and fourth quarter revenue growth, I guess I'm just wondering how realistic that is considering you're talking about project delays and IP cut backs. And I know throughout quarter people are going be pushing you guys on why not take the guidance down. Francisco D'Souza - President and Chief Executive Officer: The... no, I think... we look at that as you can imagine long and hard. We look at it from multiple different perspectives, Bryan. And we went out in March, and then again in April, did a bottoms up reforecast of the business from the field. And when we looked at all of that data and layered on top of that, our pipeline of large deals that I mentioned, the business that we have won and expect to start ramping in June. We felt that the guidance we provided of approximately 38% felt reasonable. Bryan Keane - Credit Suisse: Okay. And then lastly, Gordon, 16.5% for 2009 tax rate; is that probably where we're going to come out? Gordon Coburn - Chief Financial and Operating Officer: Give or take, I don't expect any big movements from this year's rate. It will be up a little, down a little. I don't know, but for modeling, for right now I think that would be a good assumption. Bryan Keane - Credit Suisse: Okay, great. Thank you, guys. Gordon Coburn - Chief Financial and Operating Officer: Okay, and... Francisco D'Souza - President and Chief Executive Officer: Well, thanks everyone again for joining us on the call today. In conclusion, we are very pleased with our strong financial and operating performance in the first quarter across the company. We remain excited about the opportunity ahead for the company as we execute on our growth strategy both in the short and long-term. We remain absolutely committed to ensuring our leading edge services. Industry vertical segments and geographies continue to service our clients in the best and most effective way possible ensuring that we continue our industry leading growth. We look forward to talking to you again next quarter. Thank you.

Thank you. This concludes today's Cognizant Technology Solutions first quarter 2008 earnings conference call. You may now disconnect.