A：Sine's first quarter of fiscal 2026 was highlighted by strong performance, with nearly 784,000 employees worldwide, bookings of $20.9 billion, and revenues of $18.7 billion. The company experienced broad-based growth across markets and types of work, and maintained a strong competitive position by taking significant market share. They also invested in their workforce, nearly reaching the goal of 80,000 AI and data professionals and delivered adjusted EPS growth of 10%.

A：Sine's bookings from advanced AI grew significantly, with $2.2 billion in bookings for the quarter, nearly doubling from Q1 last year and up from the previous quarter. Revenue from advanced AI reached $1.1 billion. These metrics were consistently measured since Q3 FY 23, and this will be the last quarter in which these specific metrics are shared. Sine has now booked approximately $11.5 billion in bookings across 11,000 projects with revenue of $4.8 billion from advanced AI.

A：Sine's strategic acquisitions for the past year included forming a 65% majority stake in DLB Associates and acquiring UK-based Soban, which expanded their capabilities and presence in the high-growth data center consulting market. They also invested $374 million in six strategic acquisitions to scale their business in various regions and enhance their capabilities in AI and digital transformation.

A：Sine's financial results for the first quarter included revenue at the top of their guided range, with a 5% growth in local currency, strong adjusted operating margin of 17%, and an adjusted EPS of $3.94, representing 10% growth compared to the prior year. The company also generated $1.5 billion in free cash flow and returned $3.3 billion to shareholders through accelerated repurchases and dividends.

A：In EMEA, revenue grew 4% in local currency, driven by banking, capital markets, insurance, and life sciences, with growth led by the United Kingdom and Italy.

A：In the first quarter, $308 million in costs were recorded primarily related to employee severance, with a total of $923 million recorded over the past six months.

A：Gross margin for the quarter was 33.1%, sales and marketing expense was 10%, and general and administrative expense was 6.1%.

A：Adjusted diluted earnings per year were $3.94, compared with diluted EPS of $3.59 cents in the first quarter last year, reflecting 10% growth. Free cash flow for the quarter was $1.5 billion.

A：A quarterly cash dividend of $1.63 per share was paid in November, a 10% increase over the previous year's dividend.

A：The company is focused on delivering Q2 and the year. It is at the center of the reinvention agendas, with strong results and market share growth due to critical reinvention needs for clients and the company's ability to deliver real reinvention with real outcomes.

A：The four strategic growth areas are digital core, cloud, data, and platform modernization; AI and data for improved data quality; security; and enhancing the customer experience through AI and data.

A：The company is helping clients manage all their data, making it accessible, usable, and secure. They modernize data platforms, ensuring data flows securely and consistently across the business. They also use AI to detect threats earlier, respond faster, and simplify complex environments.

A：The company's approach involves bringing together design, creative, data, technology, and industry expertise to reinvent how clients connect with and shape the customer experience. This includes modernizing technology and transforming the entire customer experience.

A：The company's Industry X offerings grew mid single digits. They helped clients in manufacturing and engineering with digital twins, predictive analytics, robotics, and AI to create efficiency and resilience. They also assisted with capital projects, applying expertise to transform how critical infrastructure programs are managed.

A：The IDC estimates the total addressable market for advanced AI is expected to grow more than 40% through 2029, from roughly $20 billion today to over $70 billion. The company plans to support its clients by bridging the gap between technology and achieving real, measurable results.

A：The goal of scaling AI in critical processes is to transform outcomes by embedding AI across these processes.

A：It is critical to integrate AI with a company's existing ecosystem because most companies have fragmented and siloed processes, and they need the right data and a modern digital core to adopt AI. Integrating AI with existing systems is essential for successful implementation and unlocking new value.

A：The speaker implies that enterprise AI requires a foundation of proper security, process work, and a modern digital core, which is different from consumer AI that can be adopted instantaneously. Most companies are still early in their AI journey due to challenges in data and processes.

A：AI partnerships are expected to contribute to growth and costs as clients are not only focused on productivity but also on finding more growth. These partnerships are critical in helping clients achieve their growth agenda and cost agenda.

A：The timeframe for AI partnerships to move the needle on revenue is not specified directly; however, the focus is on the market and enterprise adoption, which is dependent on clients. Revenue growth is expected to scale as needed and is reflected in the company's guidance.

A：The factors driving the increased adoption of fixed price work include revenue per person growth, which is primarily driven by talent rotation and hiring for new skills. This is a long-term trend that is expected to continue.

A：To think about the progression of AI projects from concept to full production, one should consider the types of projects that are moving to production, which may vary by industry or type, and the speaker suggests looking at the types of projects that are advancing to production for insights.

A：The current industry focus is on embedding AI models in solutions across various sectors. Industries such as banking and utilities are mentioned as areas where there is a lot of activity, with an emphasis on knowing the specific requirements and compliance aspects within those industries.

A：Industries like grid and utilities, and pharmaceutical R&D are mentioned as areas where AI applications are expected to scale early. However, these sectors are also recognized as being harder to crack, with banking and insurance being among the leaders in this transformation.

A：The company highlights its strength in the diversity of industry expertise and indicates that clients look to them for bringing this expertise across various industries. The company's focus is on leveraging this expertise to deliver results despite market challenges.

A：The company acknowledges the importance of pricing and contract profitability, indicating that they are seeing pricing proving successful in several parts of their business. They emphasize the importance of balancing pricing with profitability and how it affects their margins and margin growth objectives.

A：The company is focused on delivering results regardless of the market and is pivoting the way they're spending to focus on large transformational deals. They are positioning themselves to benefit from potential tailwinds but are not seeing a catalyst for change in discretionary spending.

A：The company maintains client confidence through fixed price deals by demonstrating the ability to deliver outcomes. They rely on their scale, experience, and strong financials as competitive advantages to ensure clients investing with them will achieve results.

A：The company believes that commercial models will continue to evolve and see a focus on outcome-based approaches. The industry's current commercial model is predicated on technology usage for productivity, and the company anticipates this model will persist.

A：The company is focused on helping clients embrace new tools like Sora to accelerate production and improve productivity. However, they stress that these tools are just a part of the solution and that new products and improved experiences are also critical for growth. The company aims to help clients find new ways to achieve growth, leveraging these tools.

A：Organizations need to understand that adopting AI goes beyond just implementing new technology; it involves changing processes and upskilling talent. The real value of AI is achieved when processes are redefined to integrate across the enterprise, not just in isolated areas. For example, marketing, sales, and service need to be put together, as they used to be in different functions.

A：The company is assisting clients with AI adoption by helping them to rewire their processes, upskill their talent, and integrate AI across the enterprise. This involves working with clients who have already made significant investments in technology and are looking to leapfrog further by adopting AI. The company's approach combines technology with expertise in industry, functional, and change management to unlock the full potential of enterprise AI.

A：Integrating processes across the enterprise is critical because it allows for a more holistic approach to using AI. This integration means breaking down silos between different functions such as marketing, sales, and service to enable a more cohesive use of AI that spans the entire organization.

A：The company expects to increase headcount throughout the year in the US and Europe as part of their talent rotation strategy, which will lead to an increase in headcount that should be visible in the remainder of the year.

A：The rapid growth in the number of advanced AI clients, from 1,300 to 9,000, indicates a significant movement and early-stage adoption within the client base. However, it's noted that it's too early to establish a new metric or draw definitive conclusions about future revenue and bookings scaling. The focus at this stage is on the ongoing momentum and rapid adoption of advanced AI.

A：The 17.3% operating margin represents a strong performance and a 30 basis point expansion for the quarter, which aligns with expectations. It is affected by the level of investments throughout the year. Looking forward, the company expects to maintain the 10 to 30 basis points expansion for the full year. Factors to consider include the tax impact of equity compensation and gains on investments which were specific to Q2. Despite these factors, there is no change to the overall adjusted full-year guidance for operating margin, tax rate, or EPS.

A：The health and public services growth of 7% sequentially was attributed to better-than-anticipated performance in the federal sector and strength in the EMEA and Asia Pacific regions. The company's solid position in these regions and recent investments, including acquisitions, have started to pay off, contributing to the growth.