Good morning and welcome to the 2025 Annual Meeting of Shareholders of Cognizant Technology Solutions Corporation. I am John Kim, Chief Legal Officer, Chief Administrative Officer, and Corporate Secretary of the company. I will be acting as Secretary of today's meeting. Joining me today is Ravi Kumar, Chief Executive Officer and Director of the company. Mr. Kumar will be the Chairman of this meeting. I would like to remind you that some of the comments made during today's meeting and some of the responses to your questions may contain forward-looking statements. These statements are subject to the risks and uncertainties described in the company's earnings releases, annual report on Form 10-K, and other filings with the SEC. Additionally, in response to your questions, we may reference certain non-GAAP financial measures that we believe provide useful information for our investors.
Where appropriate, reconciliations of non-GAAP financial measures to corresponding GAAP measures can be found in the company's earnings releases and other filings with the SEC, which may be found on our website at investors.cognizant.com. I'd like to now turn the floor over to Ravi.
Thank you, John. Good morning. The time is 9:31 A.M. EST on June 3rd, 2025, and I now call the meeting in order and declare that the polls are open for voting on all matters. At this time, I would like to introduce you to the directors of the company, all of whom are present today. They are Chair of the Board, Steve Rohleder, Zayed Abdallah, Vinita Bali, Eric Benevides, Archana Deskus, John Denyeau, Leo Mackay, Michael Patsalos-Fox, Brian Shott, Karima Sylvent, Joe Velley, and Sandra Weinberg. I would also like to introduce you to certain other officers of the company. In addition to John Kim, we are joined today by Jatin Dalal, Chief Financial Officer, and Tyler Scott, VP and Head of Investor Relations. In addition, Scott Davis of PricewaterhouseCoopers, our independent registered public accounting firm, is with us today.
We have a virtual shareholder meeting website for this annual meeting, which is listed in our proxy materials. You can find the agenda and the rules of conduct for the meeting on the website. In addition, questions or comments related to the annual meeting should be submitted via the website. Good morning and thank you all for joining us. It's a pleasure to welcome you to Cognizant's 2025 Annual Shareholder Meeting. Let me begin by expressing my gratitude to our clients and partners. Thank you for your trust, collaboration, and shared ambition. To our 35,000 associates around the world, your commitment, ingenuity, and resilience are powering us forward. To our shareholders, thank you for your continued support. Before we talk about where we are going, let's take a moment to acknowledge how far we have come. In 2024, we delivered on our commitment to return to growth.
We accelerated revenue growth, expanded operating margin, and delivered earnings per share growth that outpaced revenue growth. We signed 29 large deals, up from 17 the year before, and reinvested in the business while returning $1.2 billion to shareholders. Our momentum has carried into 2025. In the first quarter, we delivered YoY revenue growth of 7.5% or 8.2% in constant currency, with our organic growth rate accelerating from the fourth quarter of 2024. Our YoY margin expansion story continued, and adjusted earnings per share increased YoY for the sixth straight quarter in quarter one of 2025. Most importantly, we believe our pivot from stabilization to growth has reignited confidence from our clients, from the market, and in ourselves. Our first quarter performance puts us squarely in what we define as the winner's circle. That is just the first step. True winners will build through consistency over time.
Our ambition is to continuously earn a place one quarter at a time. We made critical investments in 2023 and 2024 in an effort to strengthen the company, rebuild our leadership team, and create the foundation for durable success. We launched a company-wide cost discipline initiative. We sharpened our go-to-market strategy, and we set out to modernize our operations to better serve clients globally. Our efforts are paying off. We enter 2025 in what we believe is the strongest position we have been in for years. Our client net promoter scores are near all-time highs. Our attrition is low, and our employee engagement scores are well above global and IT industry benchmarks. In fact, we currently have more than 13,000 active associates who have rejoined Cognizant, a testament to our culture and momentum.
Our work and portfolio spread across industries, geography, and the breadth of services are adding to our resiliency, positioning Cognizant as a company that can thrive in both high velocity and uncertain markets. Whether clients seek innovation, cost optimization, or both, Cognizant stands out. As we shared at our March Investor Day, we invested and are continuing to invest in AI-powered software-led engineering at the intersection of digital and physical worlds. Our goal is to help clients build products that are intelligent, connected, and autonomous. We are combining our expertise in embedded software and IoT with new capabilities from recent acquisitions in autonomous systems, chip-to-cloud engineering, and Belcan's engineering skills and deep domain knowledge in the aerospace and defense industry to create a stronger engineering platform. We believe the future of IT services will be powered by a dual transformation: hyperproductivity from AI and innovation from intelligent systems.
True to our heritage, we sensed this shift early and began investing at a pace we believe is ahead of the industry in platforms such as our NeuroSuite and FlowSource in training and in partnerships. We now have approximately 1,400 early GenAI engagements across industries, from pharmaceutical R&D to smart manufacturing, from claims processing to customer service. Our AI platforms are helping clients unlock productivity and innovation simultaneously. In addition to deploying AI, we are redefining how it is developed, applied, and governed. Our AI strategy is formulated upon our belief that the AI story will play out in three distinct vectors. Vector one is about AI-led productivity applied to software development cycles, helping clients address the $2 trillion in technical debt on their balance sheets. More than 20% of our code is now AI-generated, which is resulting in cost savings for our clients.
Vector two is focused on helping enterprises embrace AI by addressing their last-mile challenges, which includes modernizing their cloud and data infrastructure, updating their tech stack, and customizing AI models to fit their unique needs. Our partnerships with Microsoft, AWS, Google, and NVIDIA are accelerating client adoption of AI. With ServiceNow and Salesforce, we are delivering solutions with unique value. Vector three is the next frontier, tapping into new labor pools through identification. Through multi-agent systems, AI can perform work previously only possible by humans. It is a shift that we believe will significantly deepen our relevance and expand our addressable market.
I'm excited that our AI labs recently introduced a patent-pending technology that can evaluate confidence in GenAI responses to enable potential hallucinations by LLMs to be managed by setting uncertainty thresholds on LLM outputs that would then allow for fallback logic, making multi-agent systems safer and more consistent. We believe this is responsible AI in action. To fully capture AI's potential and sustain our momentum, we have evolved our strategic imperatives, amplifying talent, scaling innovation, and accelerating growth. First, amplifying talent. Delivering on our strategy starts with our people. The more we invest in our associates, the more value we unlock for clients. Our Synapse program has trained more than 400,000 individuals towards a goal of 1 million. In Chennai, we are building a new 14-acre immersive learning campus to train 100,000 people annually by integrating cutting-edge infrastructure with immersive learning, advanced AI skilling, and executive leadership programs.
We are also expanding into new cities and investing in fresh talent. The industry is taking notice. In 2024, we were named one of the world's best companies by Time and one of the world's best employers by Forbes. Next, scaling innovation. We're focused on building a culture of innovation and using it to differentiate ourselves in the market. Blue Bolt, our flagship grassroots innovation initiative, recently celebrated its two-year anniversary with 85,000-plus ideas generated and over 69,000 implemented for our clients. With ServiceNow, we recently launched an AI-powered solution for mid-market banks, streamlining operations, cutting manual work, and speeding resolution times. Google Cloud named us Global Partner of the Year in Data and Analytics and Retail Industry Solutions Partner of the Year.
These awards recognize our work transforming data ecosystems and helping clients apply AI to reshape customer experiences, like the auto management system we delivered for a major North American retailer. Our work is earning attention as we were named to Fortune's list of America's most innovative companies once again. Thirdly, accelerating growth. We grow by leading with innovation to solve difficult problems across industries. For example, in our CMT practice, we partnered with Telstra to use our AI tools to drive innovation, enable more client software engineering, and decommission legacy systems to improve operational efficiency. In embedded engineering, we have joined forces with Omron to co-create smart manufacturing solutions that blend IT and OT, which we plan to roll out to automotive and industrial clients. In financial services, our work with Manulife's John Hancock is helping modernize retirement planning through digital platforms enhanced by embedded AI.
Our global capability center strategy is gaining ground. We recently partnered with Citizens Financial Group to build its first GCC in Hyderabad, accelerating the digital technology modernization in part with our NeuroSuite and FlowSource platforms. Let me end with how we are delivering value for our shareholders. In 2024, we returned $1.2 billion to you through dividends and buybacks. This year, we expect that figure to grow to $1.7 billion. At the same time, we are investing in the future through platforms, learning, AI innovation, and M&A. We remain disciplined and focused. We are confident the strategy we are executing today will drive sustained value creation in the years ahead. In closing, while the near-term macro environment is uncertain, we are focused on building a long-term advantage.
We are broadening our portfolio, deepening our industry focus, strengthening our execution engine, and we are fostering a culture that attracts, develops, and celebrates talent. I'm so proud to be on this journey with you. Thank you for your continued support and trust. With that, I'd like to move to today's official business. We'll conduct the business portion of our meeting first. After the formal portion of the meeting, we'll answer questions of general interest submitted by shareholders as time permits. Only validated shareholders may ask questions in the designated field on the web portal. You can submit your questions before the question-and-answer portion of the meeting begins. Only questions that are consistent with the posted rules of conduct will be considered. Please note that this meeting is being recorded, and a replay will be made available after the conclusion of this meeting on our website for approximately one year.
We do not authorize any other recording of this meeting. John will now discuss some of the procedural matters in connection with this meeting.
Thank you, Ravi. Today's meeting is being held pursuant to a notice included in the Cognizant Proxy Statement and sent to Cognizant shareholders on or about April 18, 2025. The company's agents have certified that the proxy materials were made available to shareholders on such date. We will file copies of the notice and related affidavit of mailing with the minutes of this meeting. The company has designated Linda Cascadlo of American Election Services to serve as the inspector of election of this meeting. I received an oath signed by the inspector of election stating that she will faithfully execute her duties, which we filed with the minutes of this meeting. The board has set April 7, 2025, as the record date for this meeting.
As of that date, there were 492.9 million shares of the company's common stock issued and outstanding. The inspector of election has advised that a majority of those outstanding shares are represented here today. As we have quorum, I declare that this meeting is properly constituted and convened, and we may now carry out the official business of the meeting. I would like to outline the voting procedures. Only Cognizant shareholders, as of the record date for this annual meeting, who have logged into the meeting using their 16-digit control number are entitled to vote during the meeting. Shareholders who have already voted by proxy need not vote again today unless they wish to change their vote. If you have not yet submitted a proxy or you'd like to change your vote, you may do so now by clicking the Vote Here button on your screen.
Once all items of business have been addressed and shareholders have been provided an opportunity to submit their votes online, the chairman will close the polls for voting. The preliminary voting results will be outlined at the end of this meeting, and the final vote totals will not be known until the inspector of election certifies the tabulation after the meeting. Those final results will be reported by the company in the current report on Form 8K filed with the Securities and Exchange Commission. This meeting will be conducted in accordance with the agenda and rules of conduct that have been provided on the virtual meeting website. To maintain an informative, orderly, and constructive meeting, we ask that participants abide by these rules.
According to the rules of conduct, when presenting their shareholder proposal, each proponent must limit the time of his or her presentation to three minutes and must limit the substance of their presentation to the subject matter of the shareholder proposal being addressed. Any proponent who would like to ask questions or provide their views on matters other than their proposal may do so during the question-and-answer portion of the meeting. We will now present the matters to be considered by shareholders at this meeting. The proxy statement describes each of these proposals in detail, so I will only outline them here. If any shareholder would like to make a comment or ask a question regarding any of the proposals, please submit your comment or question through the question section of the web portal.
The first voting item concerns the election of the following 13 director nominees to serve until the 2026 annual meeting of shareholders or until their respective successors have been duly elected and qualified: Zayed Abdallah, Vinita Bali, Eric Benevides, Archana Deskus, John Denyeau, Ravi Kumar, Leo Mackay Jr., Michael Patsalos-Fox, Steve Rohleder, Brian Shott, Karima Sylvent, Joe Velley, and Sandra Weinberg. Additional information about each nominee is contained in your proxy materials. The second item is an advisory vote on the company's executive compensation. The third item is a proposal to ratify the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2025. A representative of PwC is available to respond to any questions you may have during the question-and-answer session. The board recommends a vote for each of these proposals.
The fourth item was submitted by a shareholder and will be introduced by a proponent or representative of the proposal. The proposal is regarding support for special shareholder meeting improvement. At this time, I'd like to invite John Chevedden, who is representative, to present this proposal. I ask the operator to please open the line for the proponent.
Hello, this is John Chevedden. Proposal 4, special shareholder meeting improvement. Shareholders ask the board of directors to remove the current shareholder rights provision that considers the voice of certain Cognizant Technology Solutions shareholders as non-shareholders. Currently, all shares not held for one continuous year are considered non-shareholders if they seek to call for a special shareholder meeting on an important business matter.
The reason to enable all shareholders to call for a special shareholder meeting is to allow one shareholder or a group of shareholders to quickly acquire Cognizant shares to equal the challenging 10% share ownership requirement, $3 billion, from all shares outstanding to call for a special shareholder meeting to incentivize a turnaround of Cognizant as Cognizant is in a continuing slump. Cognizant stock is in a long-term slump. Cognizant stock was at $93 in 2022 and at only $80 now. The best strategies for turning around a company do not necessarily come from a company's existing shareholders. If Cognizant continues in its slump, Cognizant shareholders and potential Cognizant shareholders will not even consider acquiring more shares in order to call for a special shareholder meeting if they have to sit on their shares for one year to call for a special shareholder meeting.
A one-year holding period makes no sense. A slumping stock price demands a quick response before the window of opportunity passes. If one shareholder or a group of shareholders can quickly acquire more shares to call for a special shareholder meeting, this is an incentive for the Cognizant directors to avoid a slump in the first place since the continuing service of certain Cognizant directors could be terminated by a special shareholder meeting. This is a good incentive for Cognizant directors to have for the benefit of all Cognizant shareholders. There is no concern that allowing all shareholders to be part of the share ownership requirement to call for a special shareholder meeting is too easy. It's almost unheard of for any special shareholder meeting called for by shareholders to ever occur in any company, even though a significant number of companies allow all shareholders to participate.
The reason to have this right is that with this right in place, companies are more likely to engage productively with their shareholders because shareholders have an alternative ability to call for a special shareholder meeting. Nonetheless, with the widespread use of online shareholder meetings, it's much easier for a company to conduct a special shareholder meeting for important business matters, and Cognizant bylaws need to be updated accordingly. Please vote yes, special shareholder meeting improvement proposal 4.
Thank you. I would like to note that the board of directors has recommended that shareholders vote against the shareholder proposal for the reasons set forth in the company's proxy statement. We will now pause to address any shareholder questions we have received relating to these proposals. At this time, the window to submit questions on the proposals has closed.
We will now check to see if any questions on the proposals are in the queue. There are no questions in the queue relevant to the proposals. This concludes the presentation of all items on the agenda for shareholder action at the meeting. We will close the polls shortly. Any shareholder who has not yet voted or who wishes to change their vote should do so now by clicking on the Vote Here button on the web portal and following the instructions provided. Shareholders who have sent in proxies or voted via the telephone or internet and do not wish to change their vote do not need to take any further action. We will pause for an additional one minute to allow shareholders to submit their votes.
Thank you, John. The time is 9:54 A.M. on Tuesday, June 3, and the polls are now officially closed.
Thank you, Ravi.
We've received the preliminary report of the results of voting from the inspector of election. The preliminary report of the inspector of election indicates that each of Zayed Abdallah, Vinita Bali, Eric Benevides, Archana Deskus, John Denyeau, Ravi Kumar, Leo Mackay, Michael Patsalos-Fox, Steve Rohleder, Brian Shott, Karima Sylvent, Joe Velley, and Sandra Weinberg have been duly elected as directors of the company to serve until the 2026 annual meeting of shareholders. The shareholders have approved on an advisory basis the company's executive compensation as disclosed in the company's proxy statement. The shareholders have ratified the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for fiscal year 2025. The shareholders have not approved the shareholder proposal regarding support for the special shareholder meeting improvement.
Thank you, John. As there is no further business, the business portion of the meeting is now adjourned.
We'll now begin the question and answer session.
For those of you participating via the web portal, you can submit a question by typing a question in the Ask a Question field on your screen and clicking Submit. Please note we will answer as many questions as time permits. In accordance with the rules of conduct of the meeting, we ask that you limit your questions to matters relevant to the business of the company. Our first question is, will tariffs have any impact on CTSH, and what % of CTSH employees are in India? I refer this question to Jatin Dalal, our CFO.
Thank you, John. Thank you for the question. As you know, the tariffs are not directly applicable for the services business, so Cognizant is not directly impacted by tariffs.
We do have a secondary impact on our demand through a set of industries which may have temporary uncertainty related with the tariff situation. We have spoken about this in our earnings calls. This is essentially manufacturing, retail, and consumer products industry. Some of our largest business segments, such as BFSI, remain unimpacted and continue to show robust progress or demand in those segments.
Let me speak about the second question: what percentage of Cognizant employees are in India? A little over 72% of our global strength of employees is based in India.
Thank you. Our next question reads, why did Zayed Abdallah and Leo Mackay get more than 50 million against votes each in 2024? I can respond to that question. We do not necessarily have visibility into why shareholders vote against certain directors.
That being said, we are pleased that all of our directors received more than 85% support from our shareholders in 2024. The next question reads, great praise for the financial situation. However, how much investment will be in the US, and will the employee raise be better than the paltry 1% of last year?
Yeah, this is Jatin Dalal. I'll take this question. Thank you for your compliment on the financial performance. We are committed and looking forward to investing in each of our geographies of operation based on the growth needs in geography and market conditions. As regards to the second question, we have yet not finalized our 2025 compensation raise approach. As and when we finalize that, we'll share it with our employees. Thank you.
Thank you.
As we have no further questions and as we're reaching the end of our scheduled time for Q&A, we will be ending the call at this point. If there are further questions, please post them, and we will answer them as applicable, and you can post them on our investor website in the next few days. Thank you for participating in the 2025 Cognizant Annual Meeting of Shareholders. Mr. Chairman, that concludes our question and answer session.
Thank you, John, and thank you to all our shareholders for attending. The conference is now concluded. You may now disconnect. The meeting has now concluded. Thank you for joining, and have a pleasant day. The host has ended this call. Good.