Revenue Guidance and Factors Influencing It
Q: What needs to happen to reach the high end of revenue guidance?
A: To reach the high end of our guidance range, we would need some improvement in discretionary spending in the later part of the year, upside from committed business in large deals if we fulfill well, execution on M&A opportunities (we have 30–40 basis points potential), and possibly rapid ramp-up from rebadge deals. Currently, we're staying true to our original guidance but are watching these factors closely.

Pricing Pressure in Current Environment
Q: Are you seeing pressure on pricing due to low demand?
A: Yes, there's downward pressure on pricing as clients focus on consolidation, cost management, and productivity improvement. Deals come with expectations of better pricing than current work, but this is expected and nothing out of the ordinary in the current demand environment.

Impact of AI on Software Development
Q: How will generative AI change the role of human software developers?
A: Generative AI will enhance developer productivity by handling repetitive tasks, allowing developers to focus more on innovation. This is our second significant productivity boost after cloud adoption. AI will reduce backlog, improve throughput to clients, and increase tech intensity at a lower cost. We see this as a significant opportunity rather than a threat.

Bookings and Large Deal Momentum
Q: What are the expectations for bookings ahead and the nature of deals?
A: We continue to see strong momentum in large deals, mainly focused on cost takeout, consolidation, productivity, and efficiency. While smaller discretionary deals remain soft and hard to predict, we're pleased with our progress, including expansion into Europe and Asia Pacific. The duration of large deals is longer, and revenue realization happens over time.

Margin Outlook and SG&A Reduction
Q: Will the trend of gross margin contraction and strong SG&A reduction continue?
A: Directionally, G&A should continue to show improvement, but not as significantly as in 2023 when we took large actions. The NextGen program will act through the SG&A line during the rest of the year, and SG&A will also benefit from growth leverage.

Discretionary Spending and Deal Leakage
Q: Have you seen any deal leakage or cancellations in recent months?
A: Discretionary spending remains uncertain, but we haven't experienced structural leakage where others are taking our business. While discretionary spend is unpredictable, our client relationships are stable, with increasing Net Promoter Scores and significantly reduced attrition rates.

BFSI Sector Performance
Q: Can you elaborate on the 'green shoots' in BFSI?
A: The sequential drop in BFSI revenue from Q4 to Q1 was only $10 million, indicating some improvement. We've reorganized our BFSI vertical, energized teams, and developed offerings in areas like mainframe modernization in insurance, customer service transformation in banking, and AI projects in insurance. We're seeing progress despite market challenges.

Hiring and Skills Strategy Amid Demand Environment
Q: Is the current environment impacting your hiring or skilling plans?
A: Yes, the nature of projects influences our hiring strategy. Discretionary projects typically require experienced lateral hires, while managed services deals benefit from building up the pyramid with various skill levels. We've improved utilization from Q4 to Q1 and continue to keep our fulfillment engine agile to respond to demand changes.

Revenue Shape and Sequential Growth Expectations
Q: Is a 2.5% sequential growth in Q3 reasonable to assume?
A: Qualitatively, yes. We'll need a strong Q3 and a flattish Q4 to reach the higher end of our guidance range.

New Logos and ACV Metrics
Q: Can you break down bookings metrics by new logos versus renewals?
A: While we track metrics like TCV, deal size, duration, and ACV internally, we haven't published these details externally. We have a healthy new logo program with specific targets and are actively ramping up new clients, but we haven't disclosed the mix of new logos to renewals publicly.