Ladies and gentlemen, welcome to the Cognizant Technology Solutions Third Quarter 2012 Earnings Conference Call. [Operator Instructions]. After the speakers remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you. I would now like to turn the conference over to David Nelson, Vice President, Investor Relations and Treasurer at Cognizant. Please go ahead, sir.

Thank you, operator, and good morning, everyone. By now you should have received a copy of the earnings release for the company's third quarter 2012 results. If you have not, a copy is available on our website, cognizant.com. The speakers we have on today's call are Francisco D'Souza, Chief Executive Officer; Gordon Coburn, President; and Karen McLoughlin, the Chief Financial Officer. Before we begin, I would like to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements. These statements are subject to the risk 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. Francisco?

Thanks, Dave, and good morning, everyone. This morning, Cognizant released third quarter results, and I'm once again pleased with our performance. Revenue grew to just over $1.89 billion, a 5.4% sequential increase and an 18% increase over the same quarter last year. We maintained our non-GAAP operating margin at the top of our guided range at 20%. Our results reflect broad-based growth across nearly all sectors, services and geographies, with outperformance primarily driven by a stronger-than-expected quarter in banking and Financial Services and Continental Europe. Gordon will provide additional color around this during his remarks. Our ability to deliver another quarter of industry-leading growth is continued validation of the strength of our approach and the uniqueness of our value proposition. For several quarters, we have been speaking of the dual mandate with which we see our clients grappling. The dual mandate refers to the fact that clients need to drive efficiency and effectiveness on the one hand as they cope with cyclical economic pressures, and they need to invest in innovation and growth on the other hand as consumers, employees and other stakeholders increasingly demand ever greater digital experiences based on new technologies. Our results this quarter once again show that our intimate client relationships, deep industry and technology knowledge and robust global delivery network position Cognizant to anticipate and deliver the services that clients need to tackle this dual mandate. Our ability to respond to market needs is the result of our focus across 3 horizons of investment. Within Horizon 1, our core application development maintenance, system implementation and testing services continue to show solid performance as clients embrace managed services models that allow them to create a variable cost structure that more closely matches their business demand. Within Horizon 2, we saw growth rates that exceed the company…

Thank you, Francisco. We're very pleased to have delivered another strong quarter of industry-leading growth that was broad based across our portfolio of services and geographies. We continue to solidify our position in Horizon 1. These services are in central strength that we leverage in order to penetrate existing clients, new clients, as well as new geographies. Our industry-leading position in this Horizon has been recognized time and again by analysts. Most recently, we were named a leader in Gartner's Magic Quadrant for customer relationship management consulting and solution implementation services worldwide. Our position in this quadrant speaks to our deep understanding of and vision for developing best-in-class CRM solutions for our clients. Also the Everest Group recognized Cognizant as a leader in their matrix for health care payer application outsourcing. When evaluated on performance, experience, ability and knowledge, we scored exceptionally high on the success we've had in this market, our scale and scope of services, investments in domain expertise and our global footprint. Horizon 2, which includes Business Process Outsourcing, IT Infrastructure Services and Cognizant Business Consulting, continues to grow faster than company average and is now approaching 20% of our total revenue. We have achieved global scale and competitiveness within these offerings, and our pipeline remains strong as the addressable market continues to grow. The value of our vertical focus is particularly evident in our core BPO offerings, which are continuing to show strong growth both with existing and new clients. Our clients want providers that understand their industries and businesses. Our deep knowledge of the industries we serve drives our competitive strength in this area and is further enhanced by 2 factors: the quality and capability of the talent we hire and our focus on continuous productivity improvement. Our BPO workforce of over 17,000 professionals includes…

Thank you, Gordon, and good morning to everyone. As detailed in our press release, our third quarter revenue grew 5.4% sequentially and 18.2% over last year to $1.892 billion ahead of our guidance of $1.875 billion from last quarter. Application development represented 51.2% of revenue, while application management represented 48.8% of revenue for the quarter. Development grew 18.4% year-over-year and 4.6% sequentially. Application management grew 17.9% year-over-year and 6.2% sequentially. 33.5% of our revenue came from fixed-price contracts during the third quarter. Fixed bid revenues have grown by 27.8% over last year, reflecting further acceptance of the managed services model of engagement by our clients. As expected, on a sequential basis, our pricing during the third quarter was stable. We closed the quarter with 821 active customers, and the number of accounts which we consider to be strategic increased by 6. This brings our total number of strategic clients to 208. Turning to cost. On a GAAP basis, cost of revenues, exclusive of depreciation and amortization, was approximately $1.1 billion and included $3.9 million of stock-based compensation expense. The increase in cost of revenues is primarily due to additional staff, both on-site and offshore, required to support our revenue growth. We increased our technical staff by over 4,600 during the quarter and ended the quarter with approximately 140,500 technical staff. Third quarter SG&A, including depreciation and amortization expenses, was $424.4 million on a GAAP basis and included approximately $18.4 million of stock-based compensation expense. Our GAAP operating margin was 18.8% for the quarter and our non-GAAP operating margin, which excludes stock-based compensation expense, was 20%, at the high end of our target range of 19% to 20%. We have further extended our Indian rupee expense hedging program. As of September 30, we have approximately $3.7 billion in outstanding hedges of…

[Operator Instructions] Your first question comes from the line of Bryan Keane with Deutsche Bank.

Francisco, I just wanted to ask. I think you said that preliminary conversations you had with some clients talked about flat spend in fiscal year '13. Can you just remind us how that's going to end up comparing to spend this year, this fiscal year?

Yes, Bryan, thanks. We had about a month ago, give or take, we got -- we ran our annual customer conference, Cognizant Community, where we had 400 or so of our clients, or individuals from across our client base, together for 2.5 days. And we covered a wide range of topics. Most of what we covered was sort of longer term, but we also did have an opportunity to talk to them about their plans and views for 2013. And most of them came back and said, "While it's still early, the budget cycles are just in the process of getting kicked off." They expect overall IT budgets to be somewhat flat going into next year. And I just want to clarify that this is mostly a North American sample. This was our North American Cognizant Community. That's largely consistent with the trend we've seen in past years where IT budgets have been flat with, in past years, perhaps sort of slight moderate upward bias. I think what's really important in -- that the trend with budgets, and we heard it again this year, was this continuing share shift to the global delivery model. We heard that again this year where clients were telling us that as they look to budgets next year, because their overall budget will remain flat, they're going to look to move an increasing amount of work to the global delivery model, not just IT work but now also increasingly business process kind of work, and take the savings that they achieve from that shift and redeploy those or reinvest those back in innovation and new technology investments that they need to make to keep their businesses competitive.

Okay, and just a quick follow-up. Originally, you guys stated the revenue growth would likely be fairly evenly split sequentially between second through fourth quarters. But after having a solid 5.4% sequential growth this quarter, you guys are now guiding to a little bit of a slowdown to that 2.6%. Is there anything to read into that change?

If you look historically, Q4 has been weaker than Q3 sequentially. Last year, Q4 grew about half the pace of Q3. There are some real seasonal stuff. We have holidays and vacations. Retail in particular, which was a very important growth driver for us in Q3, we do not expect to be a growth driver in Q4 due to the holiday shutdowns that are normally in the retail business. And most importantly, we got clarity with -- at our Cognizant Community that there's not going to be a budget flush. So when we look at our guidance, we had a very solid Q3. We're pleased. We'll continue to good sequential growth in Q4 but it'll clearly be at a slower pace, which is not unlike prior years.

Your next question comes from the line of Chris Hickey with Atlantic Equities.

The composition of your operating margin was really so different to our expectations with gross margin down quite sharply, offset by SG&A. You mentioned hiring, but were there any other drivers of this? And could you kind of help us separate out currency from any other dynamics within the OpEx and COGS profile this quarter?

Sure. Chris, it's Karen. I'll try to answer that. So FX wasn't actually a huge impact between Q2 and Q3. The real impact came particularly in COGS with the timing of our wage increases. So we have 2 rounds of wage increases over the summer. The first round kicks in, in May so you had the full quarter impact of that first round kicking in, in Q3. And then we also do a second component which kicks in, in July. So that's the primary driver of the movement in COGS. And then down in SG&A, frankly, primarily the timing of payment for visas, some immigration costs. A lot of our immigration filings are done in the early part of the year, and so the SG&A decline that you saw from Q2 to Q3 was the timing of those payments.

And just to be clear, the May versus July salary comment, it's not the same people getting a second increase. It's a portion of the population gets it in May and the remainder of the portion -- the remainder of the population gets their increase in July.

Great, that's very helpful. And Gordon, you mentioned the data center spending will be phased over time. To what extent does this change the CapEx profile we should expect over the next few years?

I don't think it has any material CapEx impact. This buildout of the 4 centers is costing us around $25 million or so with a CapEx budget of $370 million. It's reflected in that $370 million. So I don't think it has any material impact on the overall capital intensity of the company.

Your next question comes from the line of Rod Bourgeois with Bernstein. Rod Bourgeois - Sanford C. Bernstein & Co., LLC., Research Division: I just wanted to inquire a little more about how your revenue outlook has changed over the last 3 months. 3 months ago, it seems you were expecting sequential growth in Q4 of about 4.5%. I'm wondering if anything happened in Q3 that alters your view on Q4's growth prospects. I know you, earlier on the call, cited holidays, vacations, retail seasonality and the expectation of no budget flush, but it seems these factors were clearly known 3 months ago. So I'm wondering if Q3, the strength in Q3 essentially pulled forward some revenues that you were previously expecting in Q4, or if you're now starting to assume that some of the Q4 revenue growth prospects are being pushed out into 2013, either because of the need to be conservative here or because you're actually seeing things not ramp as quickly in Q4 as maybe you thought. Can you clarify any of that?

Sure. It's Frank, Rod. I think it's mostly reflected in the fact that revenues that we were expecting in Q4 will pull forward a little bit into Q2 and into Q3. It's hard to -- as we look out 2, 3 quarters, we have a general sense of what work clients need to get done over the next 2 or 3 quarters. But to actually predict exactly how that lays out over the -- in a quarter-by-quarter pattern, there's obviously some variability with that. So we had a pretty good sense 2 or 3 quarters ago of how the year was going to -- or what the year was going to look like. We still feel comfortable with that. But how that exactly lays out quarter-by-quarter, there's always going to be some variability. So this quarter, we saw some of the Q4 work actually getting executed in Q3. One other factor I'll point to, it's relatively small, but I will also mention that we do expect some impact to the business from the superstorm or whatever, Sandy. And we feel comfortable that we can absorb that into our guidance. But that also does take out some of the potential upside that we had for the fourth quarter. So I think it's a combination of largely those factors in addition to the seasonal factors that Gordon talked about earlier in the Q&A. Rod Bourgeois - Sanford C. Bernstein & Co., LLC., Research Division: Okay, is the Sandy impact roughly maybe 0.5 point? I mean, we had tried to do some back of the envelope math on that. I mean, is it 0.5 point or could it be more than that?

It's less than that.

It would be less than 0.5 point. It would be measured in millions of dollars but certainly not tens of millions of dollars. Rod Bourgeois - Sanford C. Bernstein & Co., LLC., Research Division: Okay, great. And so it sounds like though there was nothing meaningful that happened in Q3 other than you perhaps pulled forward some Q4 revenues. You were able to book it faster than you thought. There were no other meaningful changes in the demand trends that causes you to think about a different outlook for Q4. Am I reading that right?

I think that's right. I think, as I said, we pulled forward revenue or revenue came in, in Q3 that we were expecting in Q4. I will point out though, I think there are 2 important elements of demand that we saw in the third quarter that are important. First of all, as Gordon and I both mentioned in our comments, we continue to see good traction in IT Infrastructure Services, BPO and consulting and the so-called Horizon 2 service offerings, and those represented just under 20% of revenue during the quarter. I think that's an important indicator of the strength of those service offerings. And the other point I would talk about with respect to demand in the second quarter -- excuse me, in the third quarter, was that financial services, the core banking part of our BFS segment and Continental Europe, were a little stronger than we anticipated when we gave you guidance the last time. And so I think those were -- all of those were net positives in demand for the quarter. Rod Bourgeois - Sanford C. Bernstein & Co., LLC., Research Division: And great, Francisco, just to complete that thought, I mean, earlier in the year when you reduced your guidance, it was due to banks and pharma. Are you also feeling better about pharma/life sciences, or is that still in a similar position as it was earlier in the year from a demand outlook standpoint?

Clearly, pharma and Healthcare in general remained soft. As I mentioned, it was flat sequentially, similar to where we had stronger than expected results. And banking and Continental Europe certainly, Healthcare underperformed even our adjusted expectations. So we would expect that trend to continue for the remainder of the year.

Your next question comes from the line of Sara Gubins with Bank of America Merrill Lynch.

Maybe just to follow up on the question about Healthcare. Can you talk about where it was underperforming your expectations? I know that you've talked about patent cliff being an issue this year, but was there anything more that drove the weaker performance in the third quarter?

Sure. So if you split the payers from life sciences, on the payers, we were impacted by M&A. There was M&A occurred with several of our large customers, and that did impact near-term discretionary spending. We think it may set us up well for the future once we get through the M&A work, but clearly right now that's a distraction and had impact on some of the programs. On life sciences, the patent cliffs are real now. Obviously, the life sciences companies knew they were coming but now that they've hit and in some cases as drugs have come off patent, the revenue decline is faster than anticipated. That is impacting IT spend in a significant way. So this is one that we knew was coming. I think it's probably hit the life sciences industry a little harder than anticipated, but that sector is going through a tough patch right now. Will it come back? Yes, of course it'll come back. But right now it's a tough sector.

And then just one last question. Sequential growth in the other category picked up although it was still weaker than financial services and the manufacturing segment. I know that you've talked about that being more discretionary development work. Can you discuss what you saw there in the quarter?

Sorry, I think Sara, as you said, it was -- sequential growth in the quarter was about 3.8%, so still below company average. Because it does have a higher concentration of discretionary spending, it tends to be a little bit more volatile. But we are seeing -- we've got some very nice new logo wins, particularly in the high-tech sector and starting to see some good traction there.

Your next question comes from the line of Julio Quinteros with Goldman Sachs.

Looking at the -- actually, real quickly, can I just get the additional metrics that you guys usually provide on the top accounts and the on-site/offshore mix real quick?

So top 5 for the quarter, Julio, was 14% of revenue. The top 10 accounts for the quarter are 25% of revenue. And the on-site/offshore ratio was just below 79%. It's about 78.9%. Right movement toward on-site this quarter, primarily due to the ING transition.

More towards on-site, got it. And just looking at the metrics into next year, if you think about the drivers for the business, obviously, headcount growth and pricing and utilization, a mix of all these things are important to the way we think about the bottom-up build of the model. Any one of those in particular that you guys can call out as you think about strength or weaknesses for drivers that we should be considering into 2013?

So let's hit those one by one, Julio. Headcount will simply be a driver with what revenue is. As you know, our model is a mix of the longer terms -- longer cycle college hiring, as well as just-in-time lateral hiring, so we can move that up and down very quickly. So the -- rather than us -- rather than that being a driver of growth, it's a result of what demand is. Pricing is stable, which is good. I wouldn't expect any big overall price increases next year, but we're certainly in a stable environment. So I think ultimately revenue growth will largely be driven by volume next year.

And do you guys have a number or target for headcount adds then in the fourth quarter relative to the revenue guidance?

We stay away from giving specific headcount growth guidance, but certainly we will continue to add people in the fourth quarter. Our business is continuing to grow. We had very good headcount additions in the third quarter and we don't give specific guidance for the fourth quarter, but certainly there will be headcount growth.

Your next question comes from the line of Katy Huberty with Morgan Stanley.

Cloud and analytics software companies missed numbers this quarter. Just curious if you're seeing in the Horizon 3 business any delay of projects. I know it's very small from a revenue prospective, but anecdotally, have you seen any delay of those transformative deals in the uncertain macro and fiscal environment?

I wouldn't -- I don't think we've seen a significant trend that I would point to. I think that as with the Horizon 1 business, where the systems integration business in Horizon 1, I think our projects, specifically in cloud and analytics, tend to be less dependent on short-term movements in how licenses of those or sales of the SaaS companies or the analytics companies tend to do projects. Tend to be longer-term; they tend to be more focused on implementation of those technologies. And so we haven't seen any meaningful change that leads me to having a degree of concern.

Your next question comes from the line of Mayank Tandon with Needham Securities. Mayank Tandon - Needham & Company, LLC, Research Division: I had a question, Gordon, Karen and Francisco, on sort of the mix between the headcount additions. I think you said 35% freshers and 65% laterals. That seems to be not consistent with, in prior years, when freshers would make up a larger percentage of recruiting. Can you just talk about that impact?

Sure. So it's an important issue that we're working through, Julio. We on-boarded a lot of fresh -- oh, Mayank, sorry. Sorry about that, Mayank. We on-boarded a lot of freshers late in 2011, probably more than we should have at that time because obviously, we thought revenue growth through '12 would be stronger than anticipated. So it's taken us a bit to work through all those people that we on-boarded very late last year, so that's impacted the timing of on boarding the 2012 class. So you're absolutely right, that the -- when I look at the gross hires in 2012, the mix is not as heavily towards college grads as I would have anticipated. But that's largely driven by, I had a very large pipeline or people in training in the classroom at the end of 2011. Mayank Tandon - Needham & Company, LLC, Research Division: And should we expect that to shift back to more freshers versus laterals in 2013?

I think it should be more balanced, yes. Mayank Tandon - Needham & Company, LLC, Research Division: Okay, and then just finally, as these different services evolve, Horizon 3, 2 and 1, as they sort of change the mix, do you expect to change the types of people that you're recruiting? Does that have any implications on your operating model over time?

Let me talk about Horizon 2, and then Frank can talk about Horizon 3. Certainly for Horizon 2 there's a big impact, and it's both extremes. And consulting is a very different profile than our typical engineer. In BPO it's also a different profile, not necessarily a low-end profile. As I mentioned, we have 1,700 doctors, nurses and statisticians. We have 5,000 financial services specialists, but those are very different than engineers. ITIS is obviously closer to the engineers, but it's a broader range of people. And Frank, you want to talk a little bit about Horizon 3?

Yes, I think you have a very similar dynamic in Horizon 3. We've got a range of businesses in the Horizon 3 portfolio ranging from the new delivery models, which are the platform services we're working on where we're tending to bring in folks more from the traditional ISE [ph] or software background. We've got new geographies, which tend to be largely a similar people profile to the core business. And then we've got the new technologies, which again, tend to be largely similar but obviously focused on these new technology areas. So within Horizon 3, again, a broad range of talent we're bringing in. But I think that I don't see any of this Horizon 2 or Horizon 3 meaningfully changing the operating model. We've been dealing with a changing mix of workforce for a decade now. And I don't see that these will change these -- in the short-term, will change that dramatically.

Your next question comes from the line of Joseph Foresi with Janney Montgomery Scott.

I just wanted to get, I guess, full clarity on the Healthcare question. Are you expecting the headwinds to leak into 2013? I mean, how should we think about that? And I know you said that it's going to come back, but I'm just trying to get general sense without obviously getting any kind of guidance on just what the trajectory of that business would be.

Sure. So I think it's a little too early to tell for the payer side of Healthcare, but for pharma, I think answer is clearly, yes, it will weaken 2013. 2013 is going to be a tough year for pharma. When you talk to most of them, 2014 actually looks okay as they have some new drugs come online. But 2013 is a trough year for them.

Okay, and then just the same questions, sticking with the regulatory theme. Financial services obviously seems to have rebounded. Have we had a level of stability in that business? And how do you view the IT budgets next year given the regulatory requirements?

We've had a couple of quarters now where financial services have been a little stronger than we expected. I'm still cautious to call 2 quarters a trend, but I do have a greater degree of optimism with financial services than I had, say, 3 or 4 quarters ago. So I'd like to watch it another quarter or 2 to make sure that we can continue to drive the performance that we've seen over the last 2 quarters of it. I think that when I -- when we talk to banks in terms of budgets for next year, I think it's largely consistent with the commentary that we gave earlier on budgets overall. Most of our banking clients are saying sort of flat budgets next year with a share shift to the global delivery model, I think that continues. We said -- we've also started to see the midsized banks, we talked about this last quarter, starting to adopt the global delivery model a little bit more actively and aggressively than they have in the past, so that's also contributing to overall performance in that sector. I would also say that as we look to that industry sector, we continue to feel that there is a lot of growth that we're driving because of the deep industry knowledge that we have in financial services, which we continue to invest in. And I think that, that's really positioned us well. So I feel cautiously optimistic, but I'd like to watch it for another 2 -- quarter or 2 to make sure that the trend continues.

Okay, and just -- finally, just for clarity in financial services, is there still weakness in capital markets? And on the regulatory side of the spending, do you expect that to just be part of the budget, or could that provide upside in 2013?

So clearly, capital markets, there is a fundamental restructuring going on there, and overall IT budgets in the capital market space is coming down. Now we have less exposure to pure play capital markets firms than others. We tend to have more exposure to the capital markets divisions in money center banks. I think what you're seeing there is they're pushing the envelope on outsourcing and use of global delivery and open to look in much more broader opportunities, in the context of needing to reduce their budgets. Regulatory change for next year? Obviously the election just happened last night and so forth. But in the end, it's going to be neutral to positive for us as regulatory spend may pick up. It's not going to all be incremental spend, clearly. A portion of it hopefully will be, and I think we're well positioned to capture regulatory spend. But how much happens and how quickly and how much of it is incremental, those are questions that, yes, I think we'll get clarity for over the coming months or so now that the election's out of the way.

Your next question comes from the line of Darrin Peller with Barclays.

Discretionary [ph] consulting trends playing out. Development's actually been relatively similar to your outsourcing growth rates in the past couple of quarters, perhaps due to implementation around Horizon 2 offerings. But if you can give a little more color on what you see of being drivers underlying more discretionary consulting trends, and it was a little weaker earlier in the year. It seems to have come up a little bit now. How do you see that playing out? And then just a quick follow-up.

Yes, I think that at a macro level, what's driving discretionary spending is the so-called dual mandate that I spoke about. We have this -- and we spent virtually all of our time at Cognizant Community discussing this with clients, we have this wave of new technologies, the so-called SMAC stack, social, mobile, analytics and cloud. And these, we think truly represent -- and our clients agree, truly represent in some senses the next generation of IT architecture. The impact that these technologies are having and will have on businesses is probably as profound, if not more profound, than what the -- than the impact that the Internet had a decade or so ago. And so we expect that a big driver of discretionary spending will be sort of adoption of these new technologies as clients look to say how do I take social, mobile, analytics and cloud and apply them across our businesses. And we feel like we're very, very well positioned because of our Horizon 3 offerings in that space. So that's sort of the macro commentary. If you sort of take it down to a quarter-by-quarter play, discretionary spending tends to be stronger in the middle of a calendar year because that's the time when clients have -- they're past the budget cycle, budgets have been approved and you tend to get in Q2, and to some extent in Q3, the full impact of those budget approvals. And then as we go into Q3, the back half of Q3 and Q4, discretionary spending tends to slow down as clients go into the budget process. So at a more micro level, that's, I think, the trend that we'll see playing out this quarter or next quarter and going into next year.

All right, that's helpful. Just one quick follow-up, again, one of the most notable attributes of Cognizant is its ability to consistently maintain leading growth rate in the top line, again, as evidenced by this past quarter. While this has been achievable in your Horizon 1 offerings for a while, I mean, and getting back to the Horizon 2 and 3, I'd just be curious how you expect to continue to differentiate yourselves in these offerings when you really do see just about every other company in the industry investing heavily in a lot of these same areas?

I think that when we talk about -- if you think about the strength of the company across all 3 horizons, I think what underpins our differentiation and what has allowed us to drive the industry-leading growth is the fact that we -- I think we truly have a unique and differentiated approach to building domain expertise, creating deep intimate relationships with our clients and making that all feasible in a very seamless way to the client through a world-class global delivery model. Those core underlying strengths underpin our differentiation across Horizon 1, Horizon 2 and Horizon 3. And I think that it is because we are building Horizon 1, 2 and 3 on top of those 3 core underlying strengths that we will be differentiated across all of those Horizons and which, in turn, will allow us to drive industry-leading growth across all of those areas of investment.

Your next question comes from the line of Jason Kupferberg with Jefferies & Company. Jason Kupferberg - Jefferies & Company, Inc., Research Division: [indiscernible] on the top line, so I'll switch over to margins here. I guess, the non-GAAP operating margins have been at or slightly above the top end of your target range for, I think, the past 4 quarters or so. Does it still make sense for 19% to be the low end of your range? I think it's been forever since you've even been below 19.5% in any given quarter. And maybe as part of that, can you just talk about what you would attribute the great margin performance to being at or above the top end of the range because the rupee are largely hedged on, and it does seem like you're continuing to reinvest in the business. So is it pricing, utilization, some economies of scale emerging? Or what would you attribute it to?

So let's start with your first question of is 19% to 20% the right range. And our belief is absolutely yes. We have tremendous opportunities for investment. We're continuing to invest in Europe. You're seeing the results of the investment we're making in Asia right now; it's incredible. So we're going to continue to accelerate that investment. We're starting to invest down in South America now. We're investing in Horizon 2 and Horizon 3 simultaneously. So we're not in the business of selling a one-off piece of software and then moving on. These are long-term relationships with greenfield opportunities, so we want to take as much market share as we can rather than top margin. And the strategy's working. We're growing materially faster than the industry this year. Our brand is the strongest it's been in our history. Our recruiting statistics are the strongest that it's been in our history. And this strategy of reinvestment is clearly working. This year, we have been running at the upper end of the range and part of that is driven by -- yes, we did have to take our revenue guidance down during the year, and we wanted to try to minimize the impact on EPS of that change in guidance early in the year. But as long as the investment strategy is working, we're going to stick with it. Jason Kupferberg - Jefferies & Company, Inc., Research Division: Okay, and then just as a follow-up to talk about the balance sheet. Obviously, the cash balance continues to grow tremendously. I think you're almost up to about 15% of your market cap, and I think the Street realizes you guys need a big cushion on the balance sheet to compete for larger deals against bigger competitors. But should investors be looking for larger share buybacks or some other form of return of cash going forward just to try and enhance total shareholder returns?

Sure, a couple things. First of all, remember not all that cash is sitting in the U.S., and it's not all accessible for dividends or buybacks. That's a very important point. Jason Kupferberg - Jefferies & Company, Inc., Research Division: How much of that?

Over half of it is outside the U.S. or needs to be outside the U.S. When we look at the strategy, we've been opportunistic on share repurchases. Obviously, when the stock was down, we were quite aggressive on the share repurchases. We still have some gunpowder left on that program. Near term, I think the strategy will continue of opportunistic share repurchases, making sure we have plenty of gunpowder for acquisitions. That being said, acquisitions, we expect to continue to be our strategy of either for geography, industry or technology capability. The definition of tuck under continues to grow as we get bigger. Longer term, we'll have to look at what do we do with the cash, but also part of that is working our strategies for where will the cash be and how is it accessible. And we need to figure out some of those things first.

Your next question comes from the line of James Friedman with Susquehanna.

I wanted to ask first, I know you don't give explicit guidance, but just qualitatively, how we should think about the composition of application development versus maintenance in the Q4. What typically happens in a Q4 in that regard?

Yes, so I think as you saw a little bit in Q3 [ph] we wouldn't -- Q4, very few clients tend to start application development projects unless it's something small that could be completed in the quarter. So I think we would expect to see maintenance grow slightly faster than the development as it did in Q3 as we go into Q4 as well. And then that trend typically starts to reverse as you get into the middle part of next year.

That's helpful. And then, Karen, I want to check. Could you just remind us what you include in application development in a general way?

So it's all of our software implementation, testing, consultings and all the front-end type work that goes along with development and implementation projects.

And then lastly for me, Gordon you have this impressive health care practice and you stated repeatedly on this call and in other calls, the deep domain expertise of those professionals. Nurses, doctors, clinicians, et cetera. In the instance that Healthcare doesn't come back -- and I only to split hairs with you because it was a great quarter. But in the instance that Healthcare doesn't come back, at least in the near term, how do you move those people into other parts of the organization to make sure they're utilized?

Let's be clear. Healthcare not coming back does not mean Healthcare is negative sequential growth. Healthcare not coming back means it doesn't -- it's a driver of growth, so therefore it's growing well below company average. I don't see a scenario where 2013 Healthcare has negative growth over 2012.

I think we're just about out of time here, so let's wrap up. I want to thank all of you for joining us for this quarter. We're obviously pleased with our performance this quarter, and we look forward to talking to you again on our Q4 call and full year. Thanks very much.

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