BENGALURU: Cognizant Technology Solutions Corp on Friday posted revenues of $4.2 billion for the first quarter ended March, up 3.5% year-on-year in constant currency. In an interview, Brian Humphries, chief executive officer, spoke about growth drivers, demand environment and its strategy to sail through the covid-19 crisis. Edited excerpts:
What led to the revenue growth during the quarter?
We are seeing positive momentum in our business as a result of the commercial transformation program that we have been executing over the past year. On a trailing 12-month basis, our win-rate is up hundreds of basis points. In fact, our total contracts awarded in the first quarter grew more than 30% year-on-year, with broad-based strength across all of our service lines, industries and geographies. This represents our best quarterly performance since 2017. And finally, our qualified pipeline growth was strong in Q1, and especially robust in larger deals, where we had solid double-digit qualified pipeline growth versus the prior year-period.
You had recently withdrawn the guidance for 2020. Do you see improvements in certain geographies and verticals?
While 2020 will be a challenging year given covid-19, we are confident that our industry, geographic, and customer segment mix, our balance sheet, our momentum in our digital imperatives, and our growing competitiveness will enable us to compete well on a relative basis, regardless of the macro environment. We are less exposed to some of the hardest-hit industries including travel, hospitality, retail, and automotive as more than 60% of our business is in financial services and healthcare. International markets, which tend to rebound more slowly, represent just 25% of our business. We are primarily exposed to global 2000 clients, which we believe will be more resilient than smaller companies. We also have confidence in the strength of our balance sheet and liquidity. We are currently planning for a slow transition back to normalcy and expect year-over-year challenges to continue at least through Q1 2021, but could begin to see the sequential headwinds ease in the second half of this year.
What is your strategy to sail through the turbulence of the covid-19 crisis?
As we navigate this pandemic, our top priority remains the health and safety of our associates whilst maintaining continuity of service for our clients. The pandemic has spurred clients to accelerate their digital transformations. They are looking for ways to modernize their business, accelerate innovation, become more elastic and agile in the face of business uncertainty, and generally re-imagine their businesses for the new normal. We believe that major IT trends such as core modernization, data modernization, and cloud adoption will accelerate. The post-covid world will create new norms and hasten trends to highly mobile, virtual and personal world. We will not just be talking about teleworking but rather “remote everything" ― from digital workflow, to design, to e-commerce, banking, education and telemedicine. Against this backdrop, our strategy in the digital battlegrounds of AI and analytics, digital engineering, cloud and IoT becomes more relevant than ever. We will continue to use M&A to accelerate the execution of our strategy.
How do you see growth in digital business going forward?
Digital revenue grew by approximately 19% year-on-year in Q1 and represents 41% for the first quarter revenue. We think the current pandemic’s shockwaves have spurred clients to accelerate their digital transformations. Our strategy to win in the digital battlegrounds of AI (artificial intelligence) and analytics, digital engineering, cloud and IoT (Internet of Things) becomes more relevant than ever.
How do you see demand from your top verticals – BFSI and healthcare?
Our contract signings in healthcare were a meaningful contributor to the overall strength in bookings this quarter. Our growth in BFSI this quarter was driven by banking, including strong performance in Europe ― attributable to the Samlink deal ― and regional banks in North America.
Have you been able to take control of the Maze ransomware attack?
We have contained the ransomware attack. We responded immediately by mobilising our entire leadership team, drawing on the expertise of our IT and security teams, and bringing in leading cyber security experts, to help us investigate and respond to the attack. We also contacted appropriate law enforcement agencies. Retaining client trust is of paramount importance, so we erred on the side of over-communicating the details of what we knew and how we were working to contain and mitigate this incident. Ransomware attacks are becoming all too frequent across industries. We are using our experience as an opportunity to refresh and strengthen our approach to security.