GDYN - NASDAQ

Good afternoon, everyone. Welcome to Grid Dynamics Second Quarter 2024 Earnings Conference Call. I'm Cary Savas, Director of Branding and Communications. At this time, all participants are in listen-only mode. Joining us on the call today are CEO, Leonard Livschitz; and CFO, Anil Doradla. Following their prepared remarks, we will open the call to your questions. Please note that today's conference is being recorded. Before we begin, I would like to remind everyone that today's discussion will contain forward-looking statements. This includes our business and financial outlook and the answers to some of your questions. Such statements are subject to the risks and uncertainty as described in the company's earnings release and other filings with the SEC. During this call, we will discuss certain non-GAAP measures of our performance. GAAP to non-GAAP financial reconciliations and supplemental financial information are provided in the earnings press release and the 8-K filed with the SEC. You can find all the information I just described in the Investor Relations section of our website. I'll now turn the call over to Leonard, our CEO.

Thank you, Cary. Good afternoon, everyone, and thank you for joining us today. Grid Dynamics second quarter results were above our guidance range and exceeded Wall Street expectations, both on revenue and non-GAAP EBITDA. We achieved important milestones in the quarter. I'm happy to report that our second quarter revenue was the highest in the company's history and all of it was an organic nature. We also exited the second quarter with the highest number of billable engineers in the company's history. The strong results were due to the strengths from both existing and new customers and are commendable given the recent backdrop of economic cycles. It is a clear testament that Grid Dynamics efforts to stay in the course and maintain laser focus in delivering value to our customers is paying off. Our stated goals around the company grows profitability and becoming a $1 billion revenue company remaining unchanged. In many ways, our second quarter revenue growth of 4% on a sequential basis reflects the company's differentiation. Last quarter, I highlighted the key factors influencing our growth and discuss how we're uniquely positioned across the IT industry. These were, first, our revenue represents a small proportion of our customers or on spend and therefore, the opportunities for growth significant. Second, the new deals that we're winning are tied up to our customer key area of focus, and in many cases, are mission critical. Third, across the majority of our customers who are seeing their spending level either being maintained in the current level or increasing. And finally, fourth, the headwind we were facing last year were driven by drops of the handful of customers. This trend has reversed. And many of those customers have reverted to growth. There are many exciting trends that's just shaping our business, some of which I will share with you today. More important, I believe these trends will persist in shaping the company, both in the second half of 2024 leading into the 2025 to a brighter future. Now coming to the demand environment. Similar to the first quarter, we witnessed improving demand across the majority of our customers. Incrementally, last quarter when customers were more focused on sharing the outlook and forecast plans. This quarter, we were more willing to release the budget to implement those plans. We benefited from the trend in this quarter and expect such trend to continue as the year progresses. Now coming to the third quarter. Trends that I highlighted regarding the second quarter extend into the next quarter as well. We have already seen then in March and July, our customer activity in June [ph] really headcount AI activities continue to be robust. We believe this formula the basis for our continued positive outlook as we look at the third quarter and remaining of 2024. We are in what I call the post vendor consolidation market. As we highlighted over the last two to three quarters, customers have been scaling back on the number of IT vendors they work with. As an example, in one of the global brand, they plan to reduce the number of IT providers by more than two third with Grid Dynamics being one of the remaining strategic partner. With this customer and many more and similar situations, there is a heightening interest in partnering with IT vendors that are strong in technology and catalyst for them to achieving the business cost, both on revenue and cost saving. Time and again, our technological and operational excellence has risen to the top. Also thrilled to announce that in the second quarter, Grid Dynamics won four industry awards across a range of the categories, including Most Innovative Projects and Best Composable E-commerce Project among others. This widespread industry recognition reinforces our company as a benchmark of engineering excellence and the digital transformation and empowering businesses to navigate the complexities of the modern technology landscape with agility and innovation. We expanded our AI capabilities considerably, and now have approximately 30 solution and service offering, targeting Fortune 500 companies across various industries. These solutions focus on enhancing revenue and reducing costs for enterprises. On the revenue side, our solution is focused on relative customer experiences and enhance marketing pricing and product decisions. And on the cost side, the focus is centered on efficiency improvements and better regulatory complaints. Our broad offering position us well to positively impact the business results of our clients. We're witnessing a significant pickup in customers wanting to engage us on MVP and pilot programs beyond the initial approval concepts. Our sales pipeline continues to show robust growth with dozens of active AI opportunities in the progress. Enterprises are increasingly seeking to incorporate AI in their business process as well as services and platform. It's worth noting that we continue to adapt and develop AI tools and best practices to improve the productivity of our own engineers. This goes beyond just coding copilots, extending to tools specifically designed for legacy modernization, test automation and quick prototype. This internal investments, not just boosting our efficiency, but also enhance our ability to deliver cutting-edge AI solutions to our clients. Let me highlight a few noteworthy GenAI projects for the second quarter. And a top workforce solution company, we're developing a comprehensive AI ops and data platform. This platform will host numerous AI applications for job seekers, recruiters and business owners, significantly enhancing the efficiency and effectiveness of the workforce management process. And one of the largest U.S. auto part provider, we’re using GenAI to harmonize and enrich large commerce catalogs. This streamlines the product onboarding process. And additionally, and analyzing product attributes, create consistent product titles and descriptions that resonate with breath. This leads to enhanced customer experience and higher sales through all channels. Additionally, for a leading European regulatory compliance firm, we're developing an AI-enabled solution, we streamlined the product certification process. This project showcases how AI can significantly enhance efficiency in complex regulatory environments. With our city organization, during the quarter, there was significant activity both in AI and non-AI areas. This included the completion of 8 programs across AI, data, machine learning engineering, commerce solutions and search. Some of the projects completed, including intelligent document processing tailored for the financial industry, conversation powered interior design systems. And like previous quarters, our architects and CTO team were instrumental in opening new accounts. In the quarter, there were several trends, I would like to share some of the notable ones with you. Logo momentum. In the second quarter, we signed new 6 logos, many of them in very large enterprises. Of these customers we signed in a quarter, one is a leading North America supply home improvement. One is a large American consumer goods focus on personal and household products, one of the largest lifestyle global company and a European-based large department store chains. Partnerships are at an all-time high at 17% of revenue contribution in the first half of 2024. The quality and quantity of our partnership leads are changing. There are three noteworthy trends that are shaping our partnership business. First, our commitment to technology innovation and engineering excellence has resulted in greater appreciation by global enterprise customers. This has resulted in Grid Dynamics being chosen as many of our partners, Tier 1 customers. Second, our relationship with our partners are evolving. We're now more engaged in strategic discussions with senior management of our key partners. Third, at an operational level, we have enhanced level of collaboration between the sales and marketing and Grid Dynamics as well as our partners. All these translated into more opportunities that include GenAI initiatives and are entering to the global projects and program across industry verticals. Delivery allocation support. During the quarter, we made progress across multiple areas with our global strategic delivery organizations. As we highlighted in the past, our follow-on the sound strategy provides the framework of scaling our global locations. With Bangalore hub operationalized, we now have three fully functional locations in India. India is now in our top two countries by headcount and supports multiple accounts with over a dozen of them being key accounts. Our focus on acquiring high-quality talent out of universities and our activities with interactions, Hekaton, dynamic tox continue during the quarter. In Europe, Poland continued to be the anchor point. And in Mexico, we continue to support our customer seeking nearshore capabilities. European business. With roughly mid-teens of our revenue, Europe continue to be strategic to our growth. Our AI Heritage and GenAI expertise continue to attract enterprise customers who are serious about adapting GenAI to enable business product efficiencies and improve customer experiences. At one of our client, a leader in food and pharma testing, we started development of AI-based or solution. In addition to our AI wins, we provide a platform organization road map to a major UK-based retailer customer that supports their expansion, and we were able to migrate their existing homegrown and commerce platform to the cloud. And an existing global autopilot company, we are launching a composable commerce B2C solution orchestrated using MACH technologies. We expect this effort will continue in Q3 to enable the client to consolidate their technology landscapes and scale the business. During the quarter, Grid Dynamics delivered some notable projects. As a leading global technology company, we modernize their data analytics platform, including data governance and data pipeline throughput. This ensured compliance with strict data privacy and security regulations. Our efforts led to reduce infrastructure costs and improved overall performance. For a leading home improvement retailer, we modernize the legacy monolithic commerce platform, which opened the path to implement AI-enabled services such as search on the Azure platform. For a major CPG breadth, we implemented a wholesale order platform for its North American business, significantly reducing manual labor associated with processing validated orders. This platform integrates order flow data in a client's next-generation ERP system, streamlining operations and enhancing efficiency. For a leading automotive parts supplier, we migrated product data to automotive industry standards and consolidating B2B as well as B2C search capabilities on a common platform. This will improve overall customer experience and enhance product sales. It's also the first step for the company rolling out a conversational AI shopping assistance. For a global footwear brand, we launched 40 country-specific sites in under six months, providing localized features for in-country personalization, shipping and fulfillment. This achievement was made possible by leveraging the underlying MACH architecture we developed, further extending our long-term relationship with the brand. With that, let me turn the call over to Anil, who will discuss Q2 results in more detail. Anil?

Thanks, Leonard. Good afternoon, everyone. Our second quarter results were solid as we exceeded our expectations, both on revenue and non-GAAP EBITDA. Our second quarter revenue of $83 million was ahead of our guidance range of $80 million to $82 million, and our non-GAAP EBITDA of $11.7 million was ahead of our guidance range of $10.5 million and $11.5 million. The strong results were driven from a wide range of customers across industry verticals. During the second quarter, our retail and TMT were the two largest verticals at 32.2% and 28% of our revenues, respectively. Our retail vertical grew 8.7% and 2.9% on a sequential and year-over-year basis, respectively. On a sequential basis, we witnessed growth from multiple customers in the specialty retail and home improvement space. TMT decreased by 3.3% and 3.6% on a sequential and year-over-year basis, respectively. On a sequential basis, the decline largely came from a couple of factors that included a decline in revenue from a technology startup in the security space. Coming to our largest customer in our TMT vertical, it grew both on a sequential and year-over-year basis. Here are the details of the revenue mix of other verticals. Our CPG and manufacturing represented 11.9% of our revenue in the second quarter, an increase of 3% on a sequential basis and a drop of 9.5% on a year-over-year basis. Revenues from the top 3 customers in our CPG and manufacturing vertical grew on a sequential basis. Our finance vertical was the strongest, both on a sequential and year-over-year basis. Similar to last quarter, the growth from customers across the fintech and insurance space. Our newly disaggregated health care and pharma represented 3.8% of our revenues and showed a 5% increase on a sequential basis and 14.8% decrease on a year-over-year basis. And finally, the other vertical represented 9% of our second quarter revenue and was down 10.6% on a sequential basis and up 26.7% on a year-over-year basis. We ended the second quarter with a total headcount of 3,961 up from 3,892 employees in the first quarter of 2024 and up from 3,862 in the second quarter of 2023. At the end of the second quarter of 2024, our total U.S. headcount was 347 or 8.8% of the company's total headcount versus 8.2% in the year ago quarter. Our non-U.S. headcount located in Europe, Americas and India was 3,614 or 91.2%. In the second quarter, revenues from our top 5 and top 10 customers were 38.5% and 57%, respectively, versus 37.6% and 56.6% in the same period a year ago, respectively. During the second quarter, we had a total of 208 customers, down from 210 in the first quarter of 2024 and 216 in the year ago quarter. During the quarter, we added several customers, some of which Leonard referred to in his prepared remarks. The year-over-year decline in the number of customers was primarily driven by our continued efforts to rationalize our portfolio of nonstrategic customers. Moving to the income statement. Our GAAP gross profit during the quarter was $29.6 million or 35.6% compared to $27.7 million or 34.7% in the first quarter of 2024 and $28.3 million or 36.6% in the year ago quarter. On a non-GAAP basis, our gross profit was $30.1 million or 36.2%, up from $28.1 million or 35.3% in the first quarter of 2024 and up from $28.8 million or 37.3% in the year ago quarter. The increase in gross profit, both in dollar and as a percentage on a sequential basis was mainly driven by a combination of higher levels of revenue and better utilization of engineering resources. Our non-GAAP EBITDA during the second quarter that excluded stock-based compensation, depreciation and amortization, restructuring and expenses related to geographic reorganization, transaction and other related costs was $11.7 million or 14.1% of sales, up from $10.3 million or 12.9% of sales in the first quarter of 2024 and down from $12 million or 15.5% in the year-ago quarter. The increase on a sequential basis was largely due to higher revenues, partially offset by increase in operating expenses. Our GAAP net loss in the second quarter was $0.8 million or a loss of $0.01 based on a basic share count of 76.6 million shares compared to the first quarter loss of $3.9 million or a loss of $0.05 based on a basic share count of 76.2 million and an income of $2.6 million or $0.03 per share based on 75.1 million basic shares in the year ago quarter. Our sequential decrease in GAAP net loss was largely from higher gross profit, lower levels of stock-based compensation, and this was partially offset by provision for income taxes. On a non-GAAP basis, in the second quarter, our non-GAAP net income was $6 million or $0.08 per share based on 77.9 million diluted shares compared to the first quarter non-GAAP net income of $5.2 million or $0.07 per share based on 78.4 million diluted shares and $7 million or $0.09 per share based on 76.9 million diluted shares in the year ago quarter. On June 30, 2024, our cash and cash equivalent totaled $256 million, up from $249.4 million in the first quarter of 2024. Coming to the third quarter guidance, we expect revenues to be in the range of $84 million to $86 million. We expect non-GAAP EBITDA in the third quarter to be in the range of $12.3 million to $13.3 million. For Q3 2024, we expect our basic share count to be in the range of 77 million to 78 million and our diluted share count to be in the range of 79 million to 80 million. That concludes my prepared remarks. We are now ready to take questions.

Thank you, Anil. [Operator Instructions] The first question will come from Maggie Nolan of William Blair. Go ahead.

Hey how are you doing?

Good. Thanks, Maggie.

Congratulations. So I wanted to ask about the talent landscape for you all. So you're back to hiring some time has passed since you've reorganized the footprint of the business since you started talking about Follow-the-Sun as well as the thought structure that you rolled out. So I'm curious how you're thinking about managing margins from here on an account-by-account basis now that you have all these different pieces in place and how we might start to see that manifest in the P&L?

Well, you just answered the question, right Maggie? So managing the margins account per account for the key accounts is that what really it comes down to right now. As you can see from the hiring perspective, we continue to hire across all the regions where we execute Follow-the-Sun program. There is definitely emphasis on India. India continues to expand. We still put a lot of effort in Europe, but we are doing a little bit more, I would say, smart hiring because we're again adding more interns for the program which we bring engineers and we promote within. And as the projects have stabilized and grow with the part solution offering, we're able to expand on the breadth of the keeps. And when you have a deeper projects, you can actually manage your cost efficiency within the teams as well. But the short answer is yes. The key is to manage profitability for key client.

Thank you. And then you also talked about maybe an increased willingness of customers to either maintain or even increase their spend. I'm wondering if there is a notable change in the scope of projects, type of projects, duration of projects as you see that resurgence of willingness to spend. Any thoughts you might have on why this is slightly different from some of your competitors in the space.

So I think that fundamentally, when we talk about our differentiation, it's always been the market for Grid Dynamics to be focused on technology projects. And when we do technology projects, the scope is around solutions, which greatly impact the sales. So the reason -- as you know a big part of my conversation was about AI. It's not about just being fashionable. But it's also we have a possibility to implement the number of the internal solutions, which we continue to roll out which I also noted from the pro concept state point to the implementation of the broader base. So yes, technology still stays in the core focus. We are quite broadened the number of platforms, which we use for our innovative AI projects starting around the open source products to specialized solutions to the private models, building the co-pilots together with the clients. And also as we expand our partnerships, there is a deeper breadth of, again, implementation of those projects with the clients. So just to summarize, technology focus breadth of AI, I'm moving from the conceptual stage to broad implementation. And certainly, reputation, which come with that over years of Grid Dynamics managing various data aspects of our clients.

Great. Thanks, Leonard and Anil congrats again.

Thank you, Maggie.

Can we go to the next question?

The next question goes to Gates Schwartzmann from Citi. Please go ahead, Gates. Gates are you there?

Gate, will come back you. Cary, why don’t we go to the next?

The next question comes from Bryan Bergin of TD Cowen. Bryan, please go ahead.

Hi, guys. Thanks, good to see you. I wanted to start on the guidance. It's nice to see the sequential performance in the 2Q and then what's implied in the 3Q, the continued momentum there. As you develop the 3Q plan and consider the balance of the year into 4Q, can you just share some perspective on whether there was thought to reinstating that full year outlook? I'm asking just curious as a signal around overall business visibility.

So Brian, this is a very good question because this is a constant discussion. I think let me leave a couple of thoughts here. Number one is that things are improving. So the likelihood of me installing a full year guidance is higher than what it was maybe a month ago, two months ago or three months ago. So we're moving in that right direction. Look, we tend to be conservative. When we are ready for it, we will put it out. But the bias internally is for a full year guidance, Leonard's inclination is to try to give as much visibility as we can for the Street. So that's what we're working on. So at the right time, we will go out and put it. But definitely, we have more of a bias to get to that point.

Okay, make sense. And then just on the new logos, can you speak to some of the pace of the scaling of these larger enterprise logos you've had good momentum in each quarter here signing several, but those that are ramping faster too. Can you maybe speak to some of the trends in those new relationships that may be common?

Well, the story is not any different from the years of growth, Byran. Each with the client on a RapidScale, and I'm talking about RapidScale, Usually, there is a familiarity with Grid Dynamics from the past. So when you sign a logo where you come from the, I would say, new relationship or partnerships, typically, the projects start relatively small. So it's still land and expect. Usually, it's from highly technical field. Basically, the big enterprise approach Grid Dynamics on referrals to become their technology partners. In a couple of influences the thought that help from very large rapid firms. Perhaps they didn't find that reflection of the specific needs or maybe focused, I would say, attention. And we rapidly picked it up. And we're kind of shifting our relationship with the clients also to understand their business models. So it helps to be a technically astute, but also a bit more business saving. But a couple of instances where we had the leadership of the clients known us for a long time. And those kind of best to thrust because you don't need to prove yourself anymore. You basically get to the point that you're giving business based on your past performance, but you have to rapidly adapt and deliver. And there are a couple of instances of that has happened. As we grow, we've been around for 18 years. Those it are more common. So three cases. The new relationships as well as the partnerships, they grow from technology up. The existing relationship, RapidScale in terms of major implementation across multiple fields.

Great. That’s helpful. Thank you very much.

Thank you, Bryan.

Thank you, Bryan. The next question comes from Mayank Tandon at Needham. Mayank, please unmute yourself and you can start your video.

Yeah, can you guys hear me?

Yes, Mayank. We can hear you.

I’m trying to restart my video, let’s see. Yeah, hi. Thank you for taking my question. Good evening, Leonard, Anil. Congrats on the quarter. I wanted to ask you on the revenue growth for the third quarter. And as you look ahead, could you unpack the growth in terms of headcount additions, utilization? How much more room do you have to expand it and also pricing? Is there more leverage on the upside? Or is pricing basically running flattish at this time?

I’m taking it as the privilege of Anil. Obviously he rolls on [Indiscernible] where you’ll never understand you have some [indiscernible]. But let me try to focus on the key areas because it's a very fundamental question. So I don't see a rapid increase of the pricing per client. In some instances, it's not about increasing the pricing. It's about fair value for the solutions. So when you go to T&M, it's seldom. But when you go into the project base, when you offer a customer a complete proposals that does happen in some of the impact because, again, at end of the day, it’s ROI. At the end of the day, it’s total amount of dollars looked at how much business, how competitive advance is. So the big part is there's no miracle there. Demand is still to the point we have to be smart about pricing. But we see some of those improvements definitely. The other thing is balancing the teams, as I mentioned, that Maggie asked the question, bringing this broader vertically integrated organizations created a higher, I would say, utilization of the broader base people. When you are studying projects, and Bryan asked us who grows and how that impacts. You typically start with very experienced people. And that is not the best margin solution unless you build broader capabilities with all the clients, and we see those broader capabilities coming into play. So if I summarize some of them, I'm making up the growth. Demand is definitely present to Grid Dynamics. When we purely focus on one area, then maybe there's no like a big change of the financial performance, but were expanding now into multiple areas. We see the efficiencies. And the efficiency come with a pyramid of talent, which is -- even during the most dairies downturns, we did not slow down on the internship program on the training program on the internal university program. So those kind of things picked up. And of course, the investment in R&D, when we build more than 30 solutions. They're not just a resolution, they're almost like auction. When people say, I did 100, I did 200, some 5,000, we are more conservative. When we're talking about solutions, it's a fundamental actionable set of rules we drive immediate customer implementation. And when you talk about Fortune 500 that brings that kind of implementation to both performance and financial efficiency. I hope I gave you a little bit of flavor, but ---

Yeah. As a quick follow-up, Leonard and Anil, I wanted to also dive into the clients where you have top 5, top 10. Where do you see them in terms of penetration? Is there more headroom to grow within these clients? Or do you think the growth is going to really come from your non-top 10 as you look beyond 2024 to 2025 and other?

Well, let me start. We just went through our internal executive reviews because it's good on a semi-annual basis assess where you are. So we just finished it. Our strategy comes threefold. The top client, the second most potential plans, meaning the large companies where our footprint is still smaller and the new innovative clients coming either through the hunting or the partnerships. And as you look at our breakdown, no matter what we do, there is still concentration. And this is a different form of shape. Not the same as was some years ago, we were more diverse on an industry basis, but still we have heavy hitters. And with those heavy hitters, you need to make sure you leave with the 24/7 because our success and their success so tightly coupled and when some of them went down in the past quarters, it had damage for us. We're carefully selecting the companies together with the client, which not only inspired to grow and have funds to grow, but dynamic for their own markets help them. So that's from the top tier. From the second tier, we have growth with every client potential. Because you only have some millions of dollars, and those are large clients, then it's our responsibility to offer them competitively, something which makes their business more successful. And this is where we doubled down on technology penetration. So the first rows 24/7. The second one, very selective. And we have those green shoots already start to fruition which means some of them take off, some of them don't, and then we need to understand why not? And the third group, we are spending disproportionate amount of attention to the partnerships because those roles are amazing, but the scope of projects are limited. So we have enough trust with our partners that we can work with them on their own implementations, but also look in parallel to something complete incomparable with. Their mission will help direct clients to grow together. So together, that's kind of focus. So it's a one, two, three.

Perfect. Thank you so much, Leonard. Thank you.

Thank you.

Thank you, Mayank. Appreciate your questions. The next question comes from Puneet Jain of JPMorgan. Go ahead, Puneet. You’re on mute.

Puneet, I think you’re on mute.

Puneet, go ahead sir. Hey, Puneet. You’re now connected sir.

Okay. I just asked all my questions. So thanks, anyway. So this quarter -- the last couple of years, you have added like around 50, 60 enterprise customers. Some of them, for example, the one in financial therapies have done really well. But give us like the state of union on those enterprise clients that you added for some of them, like certainly the ones that might still be somewhat under scale, like what's keeping them from ramping up? And what the potential is for that client?

Basically expanding on the previous question of my about the second group not the top one. Everybody based about successes, what happened with the quiet group, the silent majority. Well, that's why we had this very deep account by account review. And because, again, there are not a huge number of them. There may be 25 to 30 of those clients who stuck in this position of transitioning from 2, 5, 10 to 5, 10, 20, but still more between 5 and 10 instead of 10 and 20. This is exactly where I would say, the thrust is because once you pass a certain level of capacity relationship, you certainly become a preferred supplier. And then hedge of the consolidation, which we also mentioned, staying relevant, you have to be useful, not just to one team, but to many. So from that perspective, we selected about half of those clients as you can run after everyone which they are in different industries, but they have a couple of major, I would say, factors. First of all, we have an alignment on technology road map. With all the greatness of technology, technology by itself, even AI makes zero value unless it's fully supported and expanded and plan for with the clients. They need to have a mindset. They need to have capability, they need to willingness, business cases and patients. It's very easy to do pro of concept. And then they report to the top management saying, okay, we've done it. It's not business. So with about half of those clients, I would say, a dozen and they have or something like that, we want to go much deeper to actually engage into the more business key studies answering ourselves and then the question is, why not? We're not changing our business now. We're not doing like BPOs or any kind of low-end services. So for us, expansion and it's how to proliferate the data business, the cloud business, assessment of cyber securities, learning from that horrible essence of the IT challenges, which happened on the cloud, how to create mission-critical solutions with all the predictable models but still relevant to them. So that group, which we're going to continue to focus, and that's where the, I would say, short-term growth comes from.

That’s wonderful. And then you have like about $250 million in cash on balance sheet. And in the press release, I noticed like you talked about that most of the growth or all the growth is organic now, meaning that it's been more than a year since you last did an acquisition. So talk to us about your use of cash priorities over the near term? And what are you looking for in potential M&A target?

So the person you don't see in a room because he's got behind the scene is our Head of M&A group. So I'm going to put them on the stage to tell you what to do because he may tell you way too much than what we want to tell you. But I think that the level of engagement is tremendous right now. I think there are a couple of reasons. First of all, remember, the geographic. We're talking about technology with clients and geography. I think the stars kind of aligned, we have all the geography we're looking for, all of them right now. And technology is pretty decent. I would not say we're going to make a breakthrough. If everybody can make a breakthrough then why would companies exit? They need to have -- we found the companies which need to have help from the [Indiscernible] call me a big brother. We're still a modern-sized company, but from a technology perspective, we're quite formidable. And they're passionate about to continue the journey as a part of the bigger teams. Now I can't tell you when the date is going to come. What did you say about that going for an annual report? You are more inclined to do now than before. It sounds like we're all waiting for fans to change the rate. So I'm also inclined to be very positive in the next couple of weeks and months, but you have to be very patient. And the reason we're very bullish on it because I think we found the rhythm. It was very important because when you look at the past our four acquisitions, we look at the value we need to bring in 2025 and on. And I think the company, when we go through this period of the slowdown, it matures. Like you all say, if you can't find a job going extend your education. So it's worked for the last 12 months. I believe we're on a very good path now.

That’s good to know. Thank you.

Thank you, Puneet.

Ladies and gentlemen, this concludes the Q&A session of our call today. I will now turn it over to Leonard for closing comments.