CNXC - NASDAQ

Good day, and thank you for standing by. Welcome to the Concentrix Fiscal First Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Stein, Vice President, Investor Relations.

Thank you, Josh and good evening. Welcome to the Concentrix first quarter fiscal 2024 earnings call. This call is the property of Concentrix and may not be recorded or rebroadcast without the written permission of Concentrix. This call contains forward-looking statements that address our expected future performance and that by their nature address matters that are uncertain. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements as a result of new information or future expectations, events or developments. Please refer to today's earnings release and our most recent filings with the SEC for additional information regarding uncertainties that could affect our future financial results. This includes the risk factors provided in our annual report on Form 10-K and in our other public filings with the SEC. Also during the call we will discuss non-GAAP financial measures including adjusted free cash flow, non-GAAP operating income, non-GAAP operating margin, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP EPS and constant currency revenue growth. A reconciliation of these non-GAAP measures is available in the news release and on the company Investor Relations website under Financials. With me on the call today are Chris Caldwell, our President and Chief Executive Officer; and Andre Valentine, our Chief Financial Officer. Chris will provide a summary of our operating performance and growth strategy and Andre will cover our financial results and business outlook. Then we'll open the call for your questions. Now I'll turn the call over to Chris.

Thank you, David. Hello, everyone and thank you for joining us today for our first quarter 2024 earnings call. We had a strong start to the year with solid first quarter financial performance, operational excellence across our business and a strong pipeline. Revenue increased 47% as reported and nearly 3% on a pro forma constant currency basis in the quarter, which was at the high end of our guide. Our growth reflects the differentiated offerings across our key verticals, particularly in retail, travel and e-commerce and banking and financial services. Achieving our target underscores the strength of our business model, our diversified portfolio of clients and capabilities and the effectiveness of our execution. We delivered record first quarter non-GAAP operating income and adjusted EBITDA, up 47% and 50% respectively. We're excited about the sustainable momentum in our Catalyst business, which posted growth for a third consecutive quarter resulting in year-over-year pro forma constant currency growth of over 10%. Catalyst' return to double-digit growth is a testament to the successful execution of driving integrated high-value technology offerings into our client base. As a reminder, our Catalyst business includes our data engineering, advanced analytics, application, design and development, platform integration and cloud transformation practices, as well as our strategy consulting and CX Enterprise technology services team. Our pipeline is strong with our preferred mix of transformational and technology-led deals. Some of this pipeline comes from sales traction and commercial cross-selling synergies from the Webhelp combination. A few examples of wins in the quarter include, a top European retailer, signing a tech-led solution that includes our generative AI agent automation technology, analytics and ongoing services to take care of their customers. While a services client from Webhelp, Concentrix was able to introduce technology and transformation to increase the value of the relationship for both parties. We also won a public transportation agency in Asia Pacific that chose us to provide a CCaaS technology platform, automation, analytics and technical teams to support their customer base. And then finally, a large global consumer products company in Europe awarded us, a contract to design build and run a CCaaS instance in over 40 markets as their managed service provider including, custom software development to improve the customer experience. This example was a services client of both Concentrix and Webhelp that turn to us for an integrated technology solution, since we knew their business so well on the global stage. To understand, why we are pushing automation so heavily in our business, one example of scale I can share with you is, for one of our region's largest airlines. We previously handled 90% -- 95% of the airlines transactions through a voice channel, with thousands of game changers. Today, using our technology, some generative AI and some machine learning AI chatbots, more than 50% of transactions have been automated. With this implementation of technology, we reduced the number of game changers needed by close to 500, while the remaining game changers process the more complex transactions. With the growth of the client's business, our revenue and gross margin with this client are higher today than before the introduction of automation, while also raising the client's NPS for their customers. That's why in the first quarter of 2024, we automated significant portions of over 60 million transactions for our clients yet, was still able to grow our revenue. Our technology-led approach, with clients continues to demonstrate we are successfully integrating automation solutions into client projects, solidifying our position as a leader in this field. Our investment in AI tools, remain a key priority and we're increasing our investment to accelerate deployment of the cutting-edge solutions. While this investment is impacting margins in the short term, we believe that this increased investment will allow us to demonstrate faster to the market, why we see generative AI as a benefit. To be clear, much of this is our own intellectual property, we have developed that is now deployed in hundreds of our clients. We have an extensive R&D department that is innovating internally for our own workforce, as well as for customers around all forms of automation including generative AI. Earlier this month, we announced the creation of a dedicated technology product organization led by our new Chief Product Officer, Ryan Peterson, underscoring our commitment to and investing in scalable technology. Examples of the platforms we are driving to scale include: our enhanced large language intelligence for enterprises or ELLIE platform that uses the power of generative AI to help CX leaders understand customer feedback from millions of transactions, more efficiently and effectively. Our marketing engagement platform built on Salesforce that combined with our custom application, helps businesses run marketing campaigns that are globally consistent, but have local and regional intimacy. And finally, our payment integrated analytics platform that automates complicated payment processes, detecting and reducing fraud and mistakes. As you can see from these examples, we have robust offerings that drive automation enhance results for our clients and deepen long-term relationships. Regarding the Webhelp integration, we remain on track to achieve the anticipated cost synergies. Importantly, the combination has come together very quickly in the areas that matter most, our delivery of global solutions for our clients and our go-to-market motion. We are confident that we will continue to thrive in generating significant value for our clients and shareholders. For the remainder of 2024, we maintain our outlook for sustained revenue growth, profit improvement, strong cash flow generation, and responsible use of capital throughout the rest of the year. Given our confidence in our outlook and our future prospects, we are committed to making $100 million in share repurchases between March 1, 2024, and the end of our fiscal year, approximately doubling the capital return through share repurchases from the prior year. This will not stop us from rapidly reducing leverage over the balance of 2024, as we committed when completed the Webhelp transaction. In closing, I would like to thank our dedicated game changers for their hard work and commitment to excellence and our clients for their trust and business. Now, I'll turn the call over to Andre.

Thank you, Chris, and hello, everyone. I'll begin with a look at our financial results and then discuss our business outlook. Our performance in the first quarter was a solid start to the year. Revenue was at the top end of our guidance range, and we achieved our profitability range for the quarter. First quarter revenue was $2.4 billion. On a pro forma basis, as if the Webhelp combination was completed at the beginning of 2023, constant currency revenue growth was approximately 2.8%. Revenue increases with clients in key verticals such as retail, travel and e-commerce, and banking and financial services led the way. On a pro forma basis, revenue from retail travel and e-commerce clients grew 11% year-over-year. Pro forma revenue from banking, financial services, and insurance clients grew 4%. Our other clients vertical grew 2% and revenue from technology and consumer electronics clients grew by 1% on a pro forma basis. Revenue from communications and media clients decreased by 4% on a pro forma basis, primarily due to lower volumes from a few North American communications clients continuing to trend from previous quarters. Turning to profitability. Non-GAAP operating income was $319 million in the first quarter, up $102 million compared with the first quarter of 2023. Our non-GAAP operating margin was 13.3% the same as the first quarter last year. Adjusted EBITDA was $384 million, up $129 million year-over-year. Our adjusted EBITDA margin was 16.0%, up 40 basis points from the first quarter of 2023. Flow-through from revenue growth and efficiency gains across our business more than offset investments to ramp new programs, and accelerate investment in AI development and deployment. On a pro forma basis, first quarter profitability metrics improved as follows. Non-GAAP operating income was up $12 million, and non-GAAP operating margin was up 30 basis points compared with last year. Adjusted EBITDA was up $14 million, and adjusted EBITDA margin was up 30 basis points from last year. Non-GAAP net income was $176 million in the quarter, compared with $136 million in the first quarter of last year. Non-GAAP EPS was $2.57 per share, compared with $2.59 per share in the first quarter of 2023. GAAP results for the first quarter of 2024, included $116 million in amortization of intangibles, $30 million in expenses related to the Webhelp combination and integration, $22 million in share-based compensation expense, $3 million in step-up depreciation, a $15 million change in acquisition contingent consideration, $7 million in net foreign currency losses and $4 million in imputed interest related to the seller's note issued in connection with the combination. While our cash generation in the quarter reflects typical seasonality cash generation in the quarter was further impacted by a onetime large client payment delay and bringing forward some integration expenses related to the combination. The client payment was received early in the second quarter and we expect integration expenses to moderate over the course of the year. We remain confident in our full year free cash flow guidance of $700 million. To provide a better view of cash generation in the quarter, we've added an adjusted free cash flow metric that isolates and eliminates the impact of the Webhelp factoring program that we have continued since the combination. This adjustment aims to provide a clear understanding of cash generation by eliminating the temporary impact of increases and decreases in outstanding factored accounts receivable. During the quarter, the amount of factored accounts receivable decreased by $22 million. Turning to the balance sheet. At the end of the first quarter, cash and cash equivalents were $235 million and total debt was $5.037 billion. Net debt was $4.802 billion at the end of the first quarter. Net leverage stood at 3.0x pro forma adjusted EBITDA at quarter end. With the seasonal pattern of strong free cash flow expected in Q2 and expected to continue for the balance of the year, we plan to achieve a meaningful reduction of net debt and net leverage beginning in the second quarter and continuing through the end of 2024. We're committed to our plan to reduce net leverage to close to 2x adjusted EBITDA within two years of the close of the Webhelp combination. Our commitment to investment-grade principles continues. Accordingly, our capital allocation priorities are to drive organic growth, realize integration synergies related to the combination, repay debt while continuing a disciplined program of returning capital to our shareholders, through our dividend and disciplined share repurchases. During the first quarter, we repurchased approximately 240,000 shares of our stock for approximately $22 million at an average price of approximately $90 per share and we paid $21 million through our quarterly dividend. At quarter end, the remaining authorization on our share repurchase plan was approximately $268 million. Our liquidity remained strong at $1.45 billion, including our over $1 billion line of credit which is undrawn. Now I'll turn my attention to the business outlook for the second quarter and the full year 2024. For the second quarter, we expect revenue to be in the range of $2.325 billion to $2.372 billion based on current exchange rates. This reflects approximately 1% to 3% pro forma constant currency growth net of an approximately 160 basis point exchange rate headwind. Pro forma revenue assuming the Webhelp combination occurred at the beginning of 2023 would have been $2.339 billion in the second quarter of 2023. In terms of profitability in the second quarter, we expect non-GAAP operating income in the range of $320 million to $330 million. At the midpoint of our guidance, this equates to a non-GAAP operating income margin of approximately 13.8%, an increase of 10 basis points over the prior year and 60 basis points on a pro forma basis. On a pro forma basis, non-GAAP operating income was $309 million in the second quarter of 2023. Our non-GAAP EPS expectations for the second quarter are a range of $2.55 per share to $2.70 per share. We expect interest expense in the second quarter to be in a range of $78 million to $80 million excluding $4 million of imputed interest on the seller's note. We expect a non-GAAP effective tax rate of approximately 26% to 27%. We expect weighted average diluted share count of approximately 65.5 million shares. For the second quarter, we estimate that about 4% of net income will be attributable to participating securities and about 96% of total net income will be attributable to common shares. Finally based on our strong start and continued confidence in our strategy and execution, we're affirming our full year 2024 guidance. We expect 2024 revenue to be in a range of $9.51 billion to $9.70 billion, reflecting approximately 1% to 3% pro forma constant currency growth, net of an approximately 70 basis point exchange rate headwind. We expect non-GAAP operating income in the range of $1.39 billion to $1.45 billion, which represents a 14.8% margin at the midpoint, an increase of 90 basis points on a pro forma basis. We continue to expect to realize first year synergies of $65 million. The current run rate is approximately $65 million on an annualized basis. Our non-GAAP EPS expectations for the full year remain in a range of $11.69 per share to $12.50 per share. We expect full year interest expense to be in the range of $300 million to $304 million excluding $60 million of imputed interest on the seller's note, an effective tax rate of approximately 26% to 27% and a weighted average diluted share count of approximately 65.3 million shares. In terms of cash flow, we expect adjusted free cash flow of $700 million in 2024 inclusive of acquisition and integration costs. This assumes no change to the amount of factored accounts receivable from the beginning of the year. This will position us to further reduce our net leverage to approximately 2.5 times adjusted EBITDA by year-end, while committing to the enhanced share repurchase activity Chris mentioned earlier. Our business outlook and cash flow expectations did not include any future acquisitions or impacts from future foreign currency fluctuations. In conclusion, we are pleased with our performance in the first quarter; we remain optimistic about the opportunities ahead, most importantly we are executing our strategic plan. We are confident in our ability to deliver our full year guidance for revenue, profitability and cash flow. Thank you for your continued support and we look forward to updating you on our progress in quarters to come. With that Josh, please open the line for questions.

Thank you. [Operator Instructions] Our first question comes from Joseph Vafi from Canaccord Genuity. You may proceed.

Hey guys, good afternoon. Good results. Nice to see the reiteration of the guide. A lot to look at here, Chris a lot of interesting prepared remarks here this quarter. I thought, we kind of drill down a little bit. You hadn't talked about Catalyst all that much here. The last couple of quarters, looks like perhaps they are seeing a bit of a tailwind from kind of AI-related activities across your customer base. So, I thought maybe we could drill down on that a little bit to begin with and kind of I guess, the high-level update on kind of the puts and takes of AI across your customers and what they're talking about with the most recent updates on what they're thinking about the technology. And then, I have a follow-up.

Yes, for sure Joe. So, a couple of things. Just in terms of Catalyst, we are really happy with it returning back to double-digit growth. That's a combination of sort of strength across a number of different areas, not only sort of CCaaS application deployment, our analytics business is doing nicely, strategy and consulting is doing nicely, and our development business, which has an AI component, is definitely getting some strength from that. That's not only the AI we do. We also do a lot of automation and AI that's built into solutions that doesn't get classified as Catalyst revenue that goes through the rest of our client success business. And so, you kind of have to see the whole picture to see all the services that we offer. That being said, we are very happy, because we are seeing a lot more demand of clients coming to us looking for integration services and looking for deployment of technology and we expect to see that continue. Just in terms of AI, we continue to have literally hundreds and hundreds of conversations with clients. We're continuing to deploy our own tools. We're now up to hundreds of our own clients who are using our tools that we've developed internally for productivity gains and for better outcomes and better insights into what we do for our clients. We're also continuing to deploy and develop, albeit smaller at-scale solutions that directly go to end customers that might completely automate work as well as augment work. Certain sectors are moving a little faster. Banking, financial security, just because of compliance issues and security issues and just kind of risk-averse issues that are taking a little longer to kind of put out a thing to scale. Other clients are moving a little faster from a scale perspective. We're balancing that off by making sure that we have the right solutions for them.

Got it. That's great. And then, I think Andre, you talked -- you kind of drilled down on growth across some of your verticals. It kind of seems like most everything is at least in the positive column except for maybe telco. So, maybe we kind of drill down on what you're seeing kind of real time and volume commitments across verticals. Do you think it's really just -- is it really kind of just telco at this point that this -- the big weight on the growth number? Any comments there would be appreciated. Thank you very much guys.

Sure. So yes, telco, Joe, dropping by 4% year-over-year is the only vertical that is decreasing revenue for us. And that's been a continuation of a trend that we've seen. I should point out, telco is a bit of a mixed bag. We do have -- the overall headwind, as I said, it's a few North American telcos that are shifting volume declines or our -- some of that work is also commoditized work where we've said in the past that we don't want to chase the work on pricing. The good news there is we're actually seeing a lot of strength in European telco and a lot of strength within the telco vertical in the Catalyst business. That is certainly one of the verticals within Catalyst that is leading to that double – that Chris spoke about. So then as we look across the other verticals just tremendous strength in retail, travel and e-commerce; banking and financial services remain strong and so forth.

Great, guys. Thanks for the color. Nice quarter. A - Chris Caldwell Thank you, Joe.

Our next question comes from Ruplu Bhattacharya with Bank of America. You may proceed.

Hi. Thank you for taking my questions. Andre, I was wondering if you can clarify the guidance a little bit. Seems you're guiding 2Q somewhat below Street, but you've kept the full year revenue and operating income guidance unchanged. The EPS guidance is also unchanged but now includes $100 million of buybacks. So does the overall guidance imply a more back half weighted year? And is there something happening below the operating income line that the same EPS range now includes $100 million of buybacks? So if you can just clarify the guidance and the seasonality this year.

Sure. So certainly, our confidence in the guidance is based first and foremost in what we see in the pipeline, what we're hearing from our clients and what we feel we can deliver through continued efficiency in our delivery whether that be on the client success side of things, the core operations or within Catalyst. Our initial expectation for EPS for the full year did include some buyback in it. So what we've – and as a result, the full year guide if you go back to the last guidance was based on shares. I think we said it was 65.6 million fully diluted shares. With the increased buyback activity which again is an averaging function for the full year. That is down to about 65.3 million shares. So not that big of an increase. We have seen offsetting that – the benefit of that, we have seen if you go to my prepared remarks a little bit of an uptick in interest expense largely from the delays that we've seen in some of the rate cutting that was built into the expectation that was built into our earlier guide. So those are the things that are happening there. Again, we're very confident in the profitability guide for the back half of the year, again with strong revenue growth and the ability to drive more efficiency in our operations as we move forward. And of course, the synergies continuing to come online. And I should – I'm glad I mentioned the synergies. I may have misspoke in my prepared remarks and said, our full year – first year expectation was 65 million, let me clarify that. It's 75 million, which is what we said when we announced the transaction and closed it.

Okay. Thanks for that. And maybe Chris, can I ask you to talk a little bit about the operating environment, specifically in terms of new logo wins, deal sizes and sales cycle and also the new economy client growth? Has the operating environment changed materially in the past 90 days?

So let me answer the question in reverse. From the new economy clients, we're seeing them really growing in line with the enterprise clients. We're not seeing any material difference in what we saw sort of a year or two years ago. So fintechs are growing kind of in line with what we're seeing in healthcare growing in line with what we're seeing et cetera, et cetera, et cetera. They are still very focused on profitability and optimizing their footprint versus growing for the sake of growth which has been a consistent theme for probably the last year. We are seeing with our new combination a lot more larger transformational deals coming into our pipeline which we're very, very happy about. And these tend to be much more global, a lot more tech integration, a lot more services combination, some definitely with AI whether it's generative AI or machine learning depending on what they're trying to accomplish. Those will take longer. What we're happy about is that we are now engaged with them. We're having good meetings with them and those are working through the pipeline. They always take longer. Our general deals that we're winning from a new logo perspective no real change in time line. My comment about them though is that they still are coming in and we're generally doing some transformation with them as they come in. And so they tend to come in at a revenue level and don't necessarily grow as much primarily based on the macroeconomic conditions that are out there. We see them increasing when they start to grow at a much more rapid pace than they're growing now internally. What we're happy about is the quality of logos. We're very happy about how they're consuming tech and services and the combination. We're very happy about where they're starting deliver from. And we're very happy that we're starting to see that synergistic combination of what we called out in the some of the wins between bringing the two organizations together a little sooner than we expected.

Okay. Maybe I'll try and sneak just one more quick one. In terms of capital return, you've announced the $100 million in buybacks. How should we think about the pace of that Andre over the next three quarters? And Chris I mean now that you're integrating Webhelp, can you talk about your propensity for further M&A? I mean is this something you're considering now? Or do you want to fully integrate Webhelp first? So just your thoughts on further inorganic growth. Thank you so much.

Yes. So just -- I'll answer the first question and -- sorry I'll answer the last question and Andre will answer the capital return question. From an M&A perspective, we're very, very far along in the integration of the two businesses like very, very far along from the integration of the two businesses. We definitely want to finish that. We definitely want to make sure that we get our synergies. Clearly, we'd also like to overachieve our synergies. So that is a big focus of ours. From an M&A perspective what we really look at is something that if it made sense economically tuck-in add some capabilities, add a discipline, add some technology that we think that we could get a fairly high return on very quickly. That might be of interest. But really the focus is on completing the integration and driving the value out of that for the shareholders first.

And then from a share buyback perspective Ruplu again we certainly feel our shares are significantly undervalued at this point in time. But I think you'll see the pace and cadence there be relatively spread over the balance of the year. Now that's quite an increase from the pace in Q1 particularly if you think about it on a shares basis based on where we're currently trading. While it's about a 50% increase in dollar amount of share repurchases the number of shares if we continue to buy at this kind of share price would be twice the number of shares per quarter that we retired in the first quarter.

Thanks for the details. Appreciate it.

Sure.

Thank you. One moment for questions. Our next question comes from Divya Goyal with Scotiabank. You may proceed,

Good afternoon, everyone. So -- good quarter here. Thanks a lot for taking my question here. I wanted to get some color on the scale of automation that Chris you talked about. So it's interesting obviously and something that we've been doing about more often nowadays. Could you help us understand from a CX standpoint, how do you see a shift in revenue model going forward with the scale of automation now coming in and with obviously AI playing a bigger role going forward?

Yeah. So let me talk about two dimensions. The first thing is that what do you have to look at is the complexity of the transaction. It doesn't matter how the transaction happens, voice non-voice that's immaterial. It's really about the complexity of the transaction. And what we're seeing is that clients are clearly focused on the most cost-effective way as they've always been, this is not new, most effective way of automating work. AI is just another tool or generative AI is just another tool to make that happen. What we're seeing and what we want to demonstrate with the example of the large regional airline that we've done is that as we have automated work, we've seen the client be able to be more efficient be able to maybe grow faster in the marketplace or look at additional work that they've done in-house and outsource it to us because we're more effective in dealing with their work. And so we continue to see as a benefit and continue to want to make sure that we automate it, plus we get stickier with the clients if we're driving the automation within their account base. And so we see it as frankly a strong positive. With generative AI specifically, look really hundreds and hundreds and hundreds of combinations or conversations with clients. Clients primarily are still focused on staff augmentation and delivering a better service with better productivity than complete labor replacement. That will come for sure. We're doing that now in some places like again, a regional airline as an example and a large retailer in Europe that we're doing it. That will definitely remove some work, but they're giving us more work than historically they have outsourced to offset that because we're far more efficient at being able to deliver these solutions.

That's helpful. So along the same lines like you did talk about your Catalyst business that's growing very, very well. And Catalyst from what I understand is obviously predominantly digital engineering. You did provide the breakdown of what exactly does it comprise. But given the competitive pressure out there, given the lack of discretionary spending and the recent results by some of the larger companies out there, do you see pricing pressure? Or what are some of the drivers for that growth in the Catalyst business?

Yeah. Good question. So I would agree the sentiment out in the marketplace is people are not signing off on multi-multiyear transformational deals or replatforming deals, et cetera. And that was a big part of our Catalyst business 2.5 years ago. Now people are looking for much faster return on investment within the fiscal year, within a couple of quarters. And so that's changed the type of engagement that we've seen, but we also do very, very well of that because we understand the domain knowledge of our clients so well that we can see where there's low-hanging fruit to be able to put in our technology. And catalyst is not only aligned with sort of the platforms that are out there, but also we can build bespoke. We also are very good at sort of journey mapping consulting. So we can actually do the whole design build run within that business specific to that client. And because we're servicing that client generally, for the vast majority of those clients, we have the domain knowledge to understand where the best benefit is for that client. And that is really resonating in the marketplace and certainly has resonated more in the last couple of quarters where we're actually seeing that consumption of services in an integrated fashion better than what we've seen prior.

That's helpful. Thanks a lot for all the color.

Thank you. [Operator Instructions] Our next question comes from Vincent Colicchio from Barrington Research. Your may proceed.

Yes. Chris, curious, are the productivity benefits from some of the new tools you've developed meeting your expectations? And is there any way to quantify the margin benefit for '24?

Yes. So, the vast majority are, I think meeting our expectations. There's a few that we think we can do a lot better with. And some of this requires a lot of changes within our client data structures and cleaning our clients' data to get the best benefit from it. That's one of the big things that you need to do when you're driving better efficiencies with either machine learning AI or generative AI. And we see there being a lot more benefits as we roll it out further, both from a margin perspective and really value to our client perspective. We haven't really quantified it in terms of a margin perspective because we're taking a lot of those savings and reinvesting it in more deployments and more features in the tools. So, I'd hesitate to kind of give you a number, but I'll tell you like it's thousands of people we've been able to -- I don't know what's the best way of putting it. It's basically thousands of people we haven't needed to hire, while we've been able to grow the business, based on the productivity and we just see that increasing.

And second question, in terms of geographies, can you give us some color? Number one, what geography should lead growth for the balance of '24? And has there been any -- are there any geographies where you're feeling different than you were a quarter ago?

So the great news there Vince is, we're actually growing quite nicely across most of our geographies and seeing strong demand. The one place where that is not the case is North America. And so, we've talked for a while about, as there's been more cost pressure on people certainly, we look to automate more, but also they look to move and switch shore. So our very, very strong nearshore offerings and offshore offerings are helpful in that regard. It does come with a bit of a revenue headwind in North America. But frankly from a sustainability and long-term profitability perspective, we're very happy to make those moves.

Thanks, guys. Nice quarter.

Thank you.