Q2 2020 Earnings Call

Ladies and gentlemen, good Dan welcome to the interest earnings conference call. It.

I said it might go osats to nine so being the listen only mode.

And there will be an opportunity to get to watch questions. After the presentation come towards.

Should you need assistance during the conference call.

Leasing that that'll be told by pressing Star then fetal on you touched on telephone.

Please note that this conference is being recorded.

I now want to continental what Mr. Sundeep my handle.

Thank you went over the yourself.

Thanks, Good luck I know you're running that can be put it on its going to discuss CBS I couldn't be any duty.

Become their distributor termination fees in Bangor gas.

Oh yesterday with a goal this year in and then if anybody feel that typically don't feel pretty similar I mean does not get other members of senior management B.

It's called the somebody lots on the performance of the company's that stupid.

They said is like I mentioned that I'm getting busy figure, but if you take it on the participation.

You bet, but anything that you say that typically what I'll take it appears that any forward looking statements.

Yes, you did in conjunction with it it could become to date.

Thank goodness michna businesses I've lived in up I think you. The if you see it can be found them to mitigate a mid single digit he does.

No I like the bucket them differently.

Thank you Sandy or did I mean, and good morning, Good news on the board and thank you for joining us today.

Interesting just delivered another strong quarter I'm happy with up to 10 minutes in the second quarter.

As robust across multiple dimensions.

One double digit growth for the fourth consecutive quarter.

We continued strong Richard did you do three expansion in operating margin.

In two minutes I appreciate that and the good especially on utilization.

Besides offshore mix five large theater signings and shakes reduction in attrition.

You grew 11.4 percentage you would be you and your intention got in two or 3.3% Qualcomm Coulter.

She takes over seven business segments, and Vince you Western Europe grew double digits constant currency you haven't yet.

I mean, just provide more color on different industry, which occurred in just a few minutes.

Digital revenues in Q1 point 2 billion.

That's what you're doing 58 bed acute per se.

Seven years and with me.

58% grid.

Thank you can see.

Operating margin that you can show how does he came into 51.7%.

Better 10 people in five percentage you yet.

Operating margin is human are deciding compensation. If he gets provided good base jumping back to the ticket in two men and utilization onsite mix and price good improvement and I told you they cost management.

And then elaborate on this during his alone.

Why do you signing in June .

Certainly strong at 2.8 billion.

Well in large Bobby this is the new uses annually.

Yes conditions significantly nice just in time Beach.

Now, let's get you've eaten up by 75% in each one can be exactly which 119.

I'm also pleased with it was actually in attrition, which declined to 19.4% to decline.

The somebody's going to get better Q1.

Well they nutrition voluntary attrition is me I'd be interested.

Good luck guys can do you feel bad news did you guys did the Jeep and yes, you Didnt digital transformation.

I want to highlight the example is Oh boy you Karen.

These.

Steve you any data analytics and CLO.

The global construction has it gotten even.

He asked him that has been flat so that's been delivered its easier.

And in June expedient till the end users.

Yeah, but you can see deals with the benefits platform and in short foster camping.

My question.

That's very efficiently manage multiple designs and their associated with digital assets.

Okay.

And she will pull back.

I mean.

And then pick a deep architecture to support the she is being forecast.

Future audition he do okay.

Multi cast it falls.

No in Tribeca performing stores, you should get suggests the settlements Robinson.

That's a multi million nice subjectivity and that's it that's side it seems seems in all these recommendations.

In the beauty I lead Cascade is yes. The main thing it how big how you would be telematics product father transformation.

Doing well makes begins and president interconnected vacancies.

It doesn't go live in inside children.

Right, but it's certainly after three years experience.

Customers.

These examples among others not strong performance in the quarter.

And then shape.

In closing.

I live in steel plant agenda.

It could you maybe 12 years localization.

As we strengthened its differentiated model to deliver this good services.

During the quarter, we launched the outage.

Did you do tend to.

Accelerate the pace of innovation for U.S. Company, Yes, you lost it did you put aside the security centre in good condition in Romania, This past quarter.

I'm also not even shaygan recognition that each other but then fishes extremely proud off before they didn't number see on this fall just leach.

Yes, that's the guy that competes for decided at night.

In closing I'd like to say that updating our guidance has ever used goods guidance motion is paying 5% to 10%, 9% to 10%, but if we have yet on a constant does your business.

He can fill in <unk> operating margin guidance.

Thank you won't be 23% for this India.

With that let me hand, it over because.

Thank you are selling.

Hello, everyone.

Yes.

Nobody gets done yet on the had good in constant currency.

Good to us dog they.

Fixed it must admit I 95, if its communication.

Have you eat it doesn't tell you said.

It's actually I pick and licenses.

I'm talking about where you could get you had on you got a bit in constant currency.

Let me, let me what North America, Europe , but did you get your yeah in constant currency.

It Playstation excluding things you didn't get caught that you paid by 80 basis points sequentially to 84.9. That's then.

On think that's what makes you said that they couldn't be 8.3 person.

The second largest compensation.

[laughter] in the last thought that.

If you have got what being paid employee bid except that they do you heard us is because I didn't quite a big.

I must be it didnt get you mean that position the claim to 19.4 person had to clean up the person compared to quarter one.

The thing that well into that they shouldn't it even though what below 18 vessels.

I thought that might affect them also continues to be then you look I'm happy.

And the claiming that they should you stupid might depend do you can't do adding across more active employee engagement.

In 50, temptation promotion and good opportunity set in place.

Glenn metrics remain strong.

I didn't 96, new plants during the quarter.

What else could be new content increase they do the 60 them.

He wants to not be.

<unk> 2.8 billion you did the I guess.

Or do you see trading financing services and due date.

It would be in communication and Onebeacon and then do you TV ecosystem said because I.

I think unlikely.

Yes, you're right that's part of America's favorite from Europe , and do some stuff do you like.

And then not far from this love to get new ones. If not then you want somebody despite what the became significantly in existing plans.

Now I'd like to TV, you update we'll have time to pick up and that's one thing.

Thanks, I had 2019.

He comes to do business segment.

And then since everything like because continued its growth momentum you didnt babies and that's a good fiction.

We expect fulfillment thing they liked it can be affected in the next couple of course.

Because when they keep him alipay.

Have you snapping back after the market and European banking State [noise].

But even production in let's say in major geographies and haven't checked them plant that we need.

No I was going back and I'd be spending.

Let's start with it shouldn't across their digital incorporated.

Along that diversified portfolio is helping us to mitigate and grow this business.

I'm happy to share that because this was a big number one player in bad debts itself then yeah.

Oh, that's going to 90.

And I do feel good about maturity of course banking capital markets. It can come back and across all the aspects off function.

He didn't pick men supplement what you've done as land spend costs, yes.

Increasing but feel good that meet the baby bonds.

Yes, it become better.

I'd business volatility. It's costing did you can do they seem to come up a few plant that you I'll give you just doesn't yet opportunity in the medium to long something we felt that the 11.

We expect the Mets uptick and I'm talking about expedient, they get their marketing insights and investments in basketball and but I'm cautiously optimistic.

Wouldn't even be we intend to study the pipeline.

Everything on the factoring that it seemed like because especially in Europe .

That's all paid walk them be getting automobile segment, you pick things up lately.

I'm not looking to never did you pick on did you do your next year, all fishing season that they think and manufacturing operation.

They've got some must manufacturing and itll be.

It's basis I'm, telling you have and keep it may not be going up you Oakland openings, both in Europe and Amedica.

Communication segment remained strong, but you cannot be.

There are different than just the mis modeling of communication plan I beat that when they get them, maybe and would be plants.

He's got the maslowski, but I love to do depend Costco didn't meet in other parts did I live into new markets, that's taking place in type like or be it the storms hit a lumpy.

I want them in and that he would like to refocus since I guess just like it can be it said that on the backup continued momentum and also called a new York on but can you.

I'd look at being that basically piece in Europe , and then maybe if you took the thing that didn't give you do and then Dan Bessey.

No I didn't even portfolio continues to grow song and now what that they put them.

Oh, that's doing nothing yet again.

No I guess, because you didn't business, we see strong, but I can probably what they're doing lodaya independent underpinned.

Pete and Monday abiotic feed it.

You said experience Glenn Beck's begin some employee experience.

The last six caught in the last quarter, we thought that we didnt see.

DHL modernization, you'll be experience and became the I said, because let's face it and if it's everything.

I couldn't they said I like the good thing could there be picking them up.

And then I'm very happy to announce that inputs is going to pick studios and they didn't make sense global climate action mobile, indicating that you put a market that giddy infosys is doing the cost base I mean, there so I'm glad I couldn't even like what's to come but let me see.

That's a handle it to me Linda.

Thanks.

Good evening and lets come through up what it looks like when do you any Paul [noise].

Revenues in Q2 was 3.21 billion going by 11.4% year on year in constant currency done.

Well golf course consecutive quarter, but we think it's real.

<unk> revenue growth in constant currency was three point keeping.

I think 90 Bips implemented one can do symphony data.

Operating margins in Q2 was 21.7% compared to 20.5% in Q1.

During the quarter the benefit there would be depreciation was offset by cost cut it seems that I'm, giving you I do.

Hi, good utilization, nor on seismic and other cost optimization, we made good operating margins, but then 10 basis points like Florida. These I'd probably cost.

So the models on I think they then bases points.

Partially offset by compensation, if they did which impacted margins by 70 basis point.

Increases in the nation. Another thoughtful 30 basis point you didn't do an overall what is going to put them in fees and operating margin compared to quarter one.

Yes, so for the forefront degrees, but do they food 66 days.

Thank you seem to be Magnum.

Operating cash flow into Q2 was $822 million. The kids are you already have north of 90 point they.

Free cash flow to Q2, what do you have to $97 million.

You already have both affairs, 0.2%.

Well I just want to 20 operating cash conversion to next topic, what I'm going to treat the bed compared to 96% thing that's 119.

Cash and cash equivalents declined during the quarter due to the completion of buyback I listed like I have a de levering up 2.5 billion.

You've done other income was 7.9% magnitude or whatever the eight point once the payment you like.

Effective tax paid twice once drinking what 36.5%.

27 quite cheap offended makes 190.

We completed the capital allocation program announced I mean since 2018.

I didn't buy back off would be thousand 260 clause was completed on think it's all the.

Completion of buyback and I actually hold a failed have lifted the increase in Italy.

3.1% didn't used to 19 25.8 offense in Chicago water.

Given by performance and that's why did you have increased revenues I didn't for if I, 29% to 10% getting caught some kind of become.

Operating margin performance.

It's one operating margin that getting lifepoint likes to say, we do not guidance, but.

Because people can see why maybe we remain confident there will be operating why didn't bank I didn't say if I couldn't T. I bring you want to 23%.

We continue to deploy vigorous and I guess was on self there's nothing [laughter] collect directly but certainly onsite offshore mix automation and now the overhead efficiencies either [noise].

Consistent with the new capital allocation policy of being approximately three types of kind of the free cash so similar to deal with five you used to investors.

Border get even better because we didn't have the PZ, which is a 14% growth what do you get into if it didn't know if I might as well.

With that we open up the flow of questions.

[noise]. Thank you very much so ladies and gentlemen, even though they're going to question answer session.

Anyone who wishes to last question <unk> and one on capstone kinda phones.

If you push some of your status on the question killed you'll need Prescott untrue.

Participants had a question do you ever talk to start asking a question.

Ladies and gentlemen, even beat for a moment Wanda questions to assemble thank you.

The first question is something line up and what keeps on from there as far golf. Please go ahead.

Oh, Thank you good evening.

I wanted to drill down a little bit on the banking and capital markets sector would shoot clearly, we're doing very well and considering the headwinds I was hoping you could break it's between Todd digital strength and core strength. If your Oh, you know what kinda ships is it's a did.

Joe Croak still strong there sure added pressure on the core side, and then and maybe couch. Those comments. So then it within the context of North America versus Europe . Thank you.

Sure. So look I think though this is my idea.

Do you feel like clearly on the Coresite. The focus is very much on consolidation.

And you know I'm not traditionally ATM business addition disease that is scaling to focus area.

If you look at you do it on the other than that if money being spent I'd say probably see areas.

First is consummation of use it exceeded.

Basically for the these days and the best management businesses.

The focus on do does cost enterprise and finally, starting to see the beginnings of a fairly significant cloud migration journey.

That's the sort of a the positive news like Oh do see these trends are clearly more to feed the U.S. now than you do in Europe , even though we are starting to see a fed degree of public cloud migration among European banks.

The other piece I'd mentioned that we see a lot more strength on the corporate banking side of the house. So specifically payments transformation trade transmission then do transmission. These continued to remain fairly strong it is across the board right. So what are you looking at the larger deal defense or are you looking at studies.

Thanks.

It is a week, it's clearly odd indeed captive market space or the second bunk I'd mentioned.

Is that especially in Europe the delayed the.

You just got is looking like especially the need Gcgs. If you live in a bank in Belgium for instance, with you spoke with recently, they're making about a negative 80 basis points on a you know under the budgets right at the same time did thing out something like you know between 10 to 15 basis points to the bolstered so we feel that.

So you don't do you just strictly gene he's going to put pressure on banking that and you know you have a downstream in back. So hopefully that gives you a a broad enough globally since.

Hi, My other quick question here is given the tax law change around repurchase shares are we more likely to see special dividends going forward as opposed to repurchase. Thank you.

Yeah, and I've been announced a new capital allocation policy in July like we have increased to 85% anything that gives us feel that runway for investors.

I think that's actually being but we'll give it didnt.

You get some easy for me I thought tuck in acquisition, So I think.

Do you need the football why not buy back toward especially because it is definitely season.

Thank you [noise].

Thank you.

Next question is from the line of the piano <unk>, Yes. Please go ahead.

Thanks for taking my question, that's another solid quarter.

And then my question is on the guidance <unk> given that the top and he's had a very robust. That's the same kind of fun stuff not bad itself and kinda to just kind of looking at an 8% and the second half could you kind of not necessarily the assumptions that you've baked into that kind of Oh I'd have to me because I see the second half.

Because of what you're seeing in banking and they can't supply any surprises that you've had in any of this I guess I said on the upside on the downside or it's my stuff nothing that would be has.

[noise] and so there is segment.

If you eat a few because what we did in Q2.

You see Lotus trend.

For the energy utilities services segment that we should see law this trend in well be showing steady cool hi Tech. So goes up was if there's a as we've gone through this year and some some of the large even.

Over the last few quarters.

Mortgage said his color on a financial services.

It's a couple you'll notice in banking with respect to an overall capital markets are perspective.

Oh, the baby listed the guidance he tried to sanction typically.

I know you're well aware.

She is.

Is the either Selic Walker.

The fully.

You can see some seasonality into that and that's really what we've tried to bake into a default.

These ideas.

Of course, increasing more than Oh, the guidance as we progressed to the Oh, and we get to make school to enjoy all I didn't see where they end up but that's really what's the big given the commentary you heard from Ah Boy.

The positive things, we shared with you when somebody other segments.

What do you own a luxury Bailey and then when studying shed is isn't dogs.

It was put together or is it because these young feel you would see an industry. That's what gives us a view of the guidance.

Okay, and I think you know the margin because he seems to suggest that you know then on track to kind of.

Reap the benefits and all taking leverage some of those investments made in the last few quarter.

How should we think about potentially in pharma companies lessons definitely what I'm trying to understand here is that.

As an opportunity for us to kinda I cant until one disrupting.

If you're looking at a slight moderation I just because of the basis I thought I won't be factors discussed [laughter].

[laughter] allow for that kind of connecting to question.

And now Jim I think.

You show up in London shed isn't really focus on the tension on.

Cost and operations that I'm it does.

Having said that you some of the specific but on the does that improving in the quarter.

He also where should I think last quarter.

All the investments I couldn't leaving behind US. So there is no one else in that sense and that'd be launched about two years or your hospital.

There's no new investments right investments in the Onboarding business, but no one else investment.

He said that the other very high quality franchise, and we feel comfortable that I did you get the operation efficiency bad even see there's the this could be a therefore, we remain confident again as you know uninsured each one lodging is now within the time.

And he was there anything and we remain confident over your progress is to be within the bank anyone's claims.

And Oh my last bookkeeping.

I started this vaccine the game change or is that any of them what what does it thinking on the tax holiday a exemption.

And as much as she's watch what should we be modeling going forward that's about.

Yeah, I think we've looked at its current keep them be India Standalone nothing for the Standalone being GAAP effective tax rate was less than 25. The appeals to both places you didn't fall Oh, I think at the moment be asking to become because even if talking about weird.

As we look back for the next new year, though when we make the conviction in the tunnel vehicle and continuing to be existing that's kind of energy.

Thanks, and have a good dressed up there.

Thank you.

The next question it sounds like enough Nikin phenomenon from Investec. Please go ahead.

Hi, Thanks for taking my question I'm just wanted your thoughts on.

Yes, I and did put together.

Because if we look at a these second quarter in terms of growth excluding state though.

You said, it's relatively Oh, we could then Oh do your Q2 is there do you have seen in the past.

So from that perspective, do you think that Oh boy would be if it's I and did it have been relatively weaker watching sports <unk> portfolio.

This but we had I'd be comfortable.

Hey, letting them more to come in come together.

On the again Uh huh.

We believe that once said David case.

Well I get much more baked locally linked to be thinking my thinking then.

You're not getting that go up and then get that the I'm thinking about might go down that's going on.

You got came from some 10-K BOSSS.

I'm sorry I.

I do they get that have you thought but no. We see it ends up none of us nets out in the retailers and Oh, yeah seemed to come down.

I'm just like me Indian point here, you can do could be like I'd love to get caught up to give up a bunch of CK had double digit growth plus wasn't about popped in second quarter can be used to be felt.

If you're going to predict or not.

Got it right because it's really that then somebody and that go out sometimes if anything it's something you have to wait and watch.

Okay and became thank you also see lot of <unk> you can get that it's Ah Ah like do you could look like aimed to compete aggressively against the Lake Selfie book and I'll be yeah.

They left but I do like.

They they called cost in other parts of the business.

I need to stay engaged with them in that in a way I looked at the same instead of somebody could get doesn't need a name cost again like we did pick up there a the study that they can detect [noise].

[laughter].

And sometimes you can look at it takes like they do I'd like getting that it's something that again the Michael.

Hi, This is Mike So look I think when speaking to edge question I think a I'd given your perspective on these sub sector than the geographic distribution did you see.

The reality is that there's a lot of volatility there. There was another wanted them to be and I would I'd bet, because those sort of sector that is heavily concentrated.

Even if you have a couple appliance for instance that are.

Yes, they do squeeze she will spend more closely or better looking at maybe you can just spend on the cool it amplifies the impact on us.

We've already identified the idea that isn't isn't done. So are you had it been banking alone in dumb Sophie.

Very low spend the capital markets. Please so hopefully that gives you a you know that gives you officially.

Sure thank him what them from in just one more.

Oh, well I'll be what would be the proportion of fun, it's skewed begins on need over TCV.

Now they are less than 90%.

Yeah, we'll be able to spend but I'm just wondering.

Sure. Thanks, so much at all.

Thank you.

The next question is something I know, they've all we're saying kind of something to capital. Please go ahead.

Good evening, Thanks for taking my question I'm not going what are some that's one of course.

Just one question from my side in terms of fighting we've seen very strong hiding in this quarter.

Turning it on <unk>.

So just wanted to do.

I understand youre.

One how its going away I mean, I'm sure we'll be looking at a significant.

[laughter].

I'm not going to finding that you've done so basically how is it or how do you.

Also.

The margin in fact I mean.

Given that could be.

These guys straight a wonderful.

We expect some sort of let's say oh, especially on the margins going forward. That's what do think that sort of baked into the guidance is right.

No I think I mean actually says that you didn't know if you take that maybe.

The modeling remaining to can't do anything because it doesn't bank. So there's no tasted engaging and get comfortable with that.

I'm still fighting this quarter, we hate about.

Then I think they are [noise].

Uh huh.

Because I'm not suggesting down about 5008 into anything anymore, you got South African College it.

And like we had 57000 like in what I think that's sitting down and you see them typically thought them in a bunch of the right.

It seems that well be.

And then in Boston.

Well I didn't see any.

Okay, and even if they didn't came to that or how do we need to bringing them to get them that they've already got connecting to gain.

Sure.

Just lastly, any.

Mission has definitely.

Last quarter.

Generally seasonally.

In terms of attrition so.

Given that we've already taken so much major storms.

Oh, Yeah Christian different standards, but as soon as it simply means about 21 person and before I mean my phone does she was on a same center.

Moving down.

Uh huh.

Well, maybe something would just be together.

[noise] you got anything from export with it so it's about making painful, but then but that's one of them tailing rather than take you can look like while in parallel need somebody keep him and when you compare to what Scott for the Gulf Las Vegas, No one of them back.

But nothing that seems a modeling coming.

The same time my.

I must be given it seems like they have been brought but at least for the last night football club that do something I agree I leave it could go on an ongoing basis. It's the media they tend to get though was that we can focus on.

But at this stage.

Good day.

Exactly I'm feeling I got it says that.

I mean, if you're gaining a better can become equal.

Sure. So thanks for taking my questions Michelle.

Thank you.

The next question is something I know because that's what they see from Cantor. Please go ahead.

Oh hi.

So my first question is just around the revenue growth acceleration you seen a an uptick the last couple of quarters.

Do you believe that.

Your ticking maybe market share from some of your competitors or is it. The fact that a you know digitals growing as strong as it is right now just trying to get a sense of you know what seems to be causing the uptick in the numbers and should we be thinking. This is a high single digits low double digits more low double digits business.

I think.

On the group.

The other words, they seem to agree with it.

Yeah, I was set to all cities, which has really clears too well declines I understand and the digital transformation journey.

These relates to a specific areas you kind of I did in the Bachelor that its data analytics cloud or expedias.

I hope you aside the and show.

That's very team.

Good switches.

Possibly higher than ready overall market for there's other services group.

You also see a strong bush and automation, which is everything or where we had good strong.

All businesses with guns and they should benefit from this ER coming into <unk>.

Well, that's the come into the enterprise and displays is that he was with the automation.

Having said that a b you know that all those things.

Okay, there's quite a an intense focus as we sit in a into the large do could then.

Ongoing activity to execute against that.

We generally do these today.

However, I was very strong position within the mines is our time.

Okay, and now sometimes a the marketing executives and which is helping us drive out there.

In terms of what this means as an ongoing business VB, you're not changing I need you at this stage beyond the end of this fiscal year as good as we come to the end of the Oh. There. She was thought to talk a little bit more explicitly on the next next fiscal year.

Okay and just a couple of quick follow ups are these new engagements or are you are you know taking market share from from others are we talk about the visual practice and how much is pricing a factor across a across you both the new digital business and your traditional business.

[noise] show or in terms of did just didn't work are typically these mhm.

Projects.

Mhm mid and long term contracts.

They are definitely things that there's really in a very competitive environment.

Then just the pricing.

I think we would shed or maybe in the last quarter's a discussion.

Margin.

Digital business is higher than the margin for the company overall should be seen confidence as we shift more anymore, but we'll pull if it does it too.

That that should be a benefit to imagine.

Okay and.

And then just lastly, the business that are the pieces of the business aren't digital are you seeing pricing pressure on the traditional maintenance stuff and you know maybe you can give us an update on the non digital business and how that's performing thanks.

She's there he.

I believe we haven't extremely strong set of capabilities across all of that show. This all things that 'cause it comprises 62% about business. It's a very strong isn't this a long foundation to.

However, the automation play allows us to.

In short of the clients they getting an ongoing productivity benefits, we do see some pressure.

Which is a little bit into play a in pricing discounts on an ongoing basis and especially when you start to see a medium term along comes when you when contracts come up for a discussion.

Thank you.

Thank you. The next question is something.

From JP Morgan. Please go ahead.

Yeah. Thank you for taking my question I had a question on a.

And be says Oh, you know last spoke went to school fynineteen. It was like tracking I'd be glad you want but you do these its shot up to 20 728 days into first half of this young.

Just wanted to try to understand what the cost such a massive jump Oh for the company all size in a in each one.

Yeah, So actually the way we look back revenue beat up based on activity in effect, where does billing milestones I agreed with clients in advance based on delivery dates and that's probably a billing actually happened. So they often times mismatches between the revenue I can be a billing milestones.

Last week line, that's the thing so they have the pluses and minuses and therefore, that's one of the reasons. We also had because of the so you've got I put that acquisition. There was also an increase because their business model I don't think fees on the hadn't been so these are two large reasons.

For this increase but it's got collections overall I think that's the number to look at our collections continued to be very baseball idea. So for the quarter actually was down by two days. So I think that's the key metric.

It would be helpful.

Yeah, but it doesn't I just think Oh, you know when you look back though this in terms of income it goes he is.

It does jumped almost pretty for 25% in each one or whatever the full bought those two if like 19, it looked like I know, 11% so.

But nothing Goodman does this annualized it's done but so so is that possible I mean, how is it bus basketball is it with a notch confusing for the company has not just enforces has given the change in policy or are you sort of thing do they can nice with claims.

From what else and ER revenue recognition milestones in a very different from what used to do a deal.

No nothing like that so in fact the markets. They like there was maybe like all the.

I mean build up the biggest sport there's more to live in export Oh, I'm glad you settle milestones with some but not as if it the legacy because increasingly look I'd be aging of this very very carefully and like I said. This is a combination of in a few clients where do you have a different into billing milestones well because the revenue recognition that like I said hyper converged data.

Sure and my real question on your the D.C.V. I think by these indicated that.

Maybe 10% of the DTV, it's Nick you, which means that 90% is oh, the new is or how does this sort of I'm just sort of compared with maybe no I would just with the recent bust.

Oh.

Hi, good time did that a number.

But or I mean, they lose them I think we do like I mean, I'm glad that you have left.

That's doing another question you have right.

Good stuff and it's coming from them yet.

The baby look I didn't think it's important for us the Wyndham U.S. because it didn't have any married to any more business than probably could I know if anything and the same I'm not really make me on them, but you can't hitting my kitchen, we focus on that but the lula it varies from quarter to quarter.

Why do I feel that well this policy I think the knick be worth about.

[laughter] 35, Okay, what would it be safe food.

Yeah, we did that.

If I'm finding caught the ones that point baby, well get to and what they said something about smoking.

Got it wouldn't be fair to say at least for this quarter the percentage of Nate you generally a lot lower than it might have been.

Huh.

Hello.

Yes, I mean, you're right I mean, if you look at the last two quarters have stopped probably that and put them they can be north.

Okay sure banking on the best.

Thank you. The next question is something I know supports the thoughts on CFC Securities. Please go ahead.

Thanks for taking my question Oh sure.

I wouldn't know, what's what's really constraining us to increase it off and AFFO guidance.

Despite the strong momentum across work the crews are there any client specific issues that you're looking at I'm looking at adult students and it seems like a decline for this quarter, so anything which is incrementally different.

[noise] as we shared the using views that I didn't show on the lower then from even up to nine.

Do you think.

The.

Over the long discussion with the segments, which as you heard from waves.

In terms of financial services.

Well it doesn't shadows listed and that's something that you have to be.

What's going to know.

Yes trends, which we've you said earlier energy utilities on 10 for high Tech.

Those are positive and then we should be can be the second half a in a second Oh second our security in Q4 is did they give me a softer than the first half and especially Q2 with the discussions around so knows and Sean just given all of those factors.

90 minute, we took a downstairs to increase the lower end of the guidance keeping in mind. A this is really really she's actually agree and that's important progresses, we did she.

As you said that you did see they end up and come back you have you ended the quarter and the next steps.

The thing so that's something and then I'm just I'm the margins how do we see that the second half trending up within the band.

And he had been students that you're looking at so perhaps you can call owed to tighten who live in fact that we should be coming in third quarter.

Yeah. So I think the likelihood we gotta. It's why did you have 21.1 or where there isn't a band I think there's a good place to go from here and that's what they're looking at.

Well I do not that material impact or most of that you know people. There because you know that's been probably something big up your were all you can count.

Really going to be small impact or otherwise I think we have a very robust like I said the cost takeout program.

Like I said on multiple you know utilization pyramid and I think they're quite confident that you know this is the machinery, which has to literally journals or every quarter.

As you know they listened to be headwinds in terms of discounts or I don't know wage hike, but I think we've seen good ones. Those are the most making sure that yeah. It looked to pick up these costs in time, so that's area.

Okay, Thanks, and all the best.

Thank you.

The next question or something like.

Bush Securities. Please go ahead.

Hey, Thanks, Congrats on very strong execution going back to be F. Aside is there any way to figure out what if you look he had the organic growth numbers I know you haven't disclosed these but organically was the sector up sequentially year over year any sort of color here will be helpful. One then.

If you do want to disclose that how much they are the acquisition at the growth during the quarter. Thanks.

Look I think you know you haven't really disclose the or you don't but the numbers separately.

Because you have sort of keep in mind that start there was a kind of ours right to be acquisition. So diversify revenues that agreed to the into de emphasis glad to be at good tied to the joint venture as well.

So do not making up the membership.

Okay.

Okay.

Kind of look at this sort of forward basis has anything changed since the ended the quarter in terms of you know sell cycles pipeline conversion rates any sort of spending or project in terms of spot project funding.

Maybe you can talk a bit about those trends since the end of the quarter. Thanks.

[noise] you and he's the ended the quarter you mean, the last last couple of weeks right.

That's correct.

[noise] Oh no no no you don't see any changes in the last couple of weeks from what would that be discussing which is a fourth in view of.

Of course, it's only two weeks. So you don't expect to see any change in that timeframe.

Alright, and then to last question, obviously, the renewal number in terms of bookings was pretty high this quarter on a forward basis. During the next two quarters your pipeline I'm, assuming that's gonna be a trough in terms of snakes and during the next two quarters, we should see a larger.

Mix of renewals in terms of bookings is that correct.

No I don't think that you have seen anything anything that anyone so it varies from quarter to quarter, depending on the contact so I am thinking if anything I think there and you're lucky.

Alright, thank you.

Thank you.

The next question or something like enough of them okay.

Please go ahead.

Oh.

That's on sustaining good execution.

I just had two questions first is on the revenue growth.

If I see over the last four to five quarters.

What do you have been infusing.

<unk>.

This quarter because more than the last quarter.

The guidance.

It is likely to be couple enough wasn't each points you wouldn't know and by the time each Q4 and all my question would hit it.

This thing that let's see a is it like Oh.

How did have a new visibility and you see there putting going down any.

It is more like a cautious stance sorta conservativeness because the.

Macro concerns on you weren't who have or give a conservative guidance on what does it like no whatever it was it when it in some conservatism or do you have visibility and using the noise. It would be turning down that's question number one and second is on the margins like let's see.

Good cost cutting program and over the next four to six quarters in constant currency dumps Oh, you know next.

Most everything would it be dead.

Four to six quarters, you think margin.

From current levels.

Then whatever the headwinds on or whatever cost cutting program do you have like super likes.

From <unk>.

<unk>.

On the revenue.

As lead shaded area I think.

Yes.

A good set a a good.

Over the last four quarters.

You know that's typically there's some seasonality.

In the last quarter of the Columbia Okcupid, Oh, we also know that there'd be some difficult comps.

For Q3 Q4 versus previous Q2 Q4 based on these things and so on a threat is 18 months ago or keeping all that in mind is there we've got one.

I didn't.

Right.

I like he wins, it's been a robust.

It is lumpy as cost of the large even show or we'd be that there are seven.

Good quarters on that I believe it's got a predictable or do you in terms of where the lodging numbers reason other than he was a this is a let me tell you didn't see more and more let's do a in the coming quarters in the pipeline to be I'm I'm convinced that actually gets into the next fiscal year.

Deciding that they did a base are leaders that can help us for that and beyond that there is more the sort of or color on the revenue from outside that tells you bid or the guidance.

In terms of margin.

Very clear view I would just what you create a coupon for the Sylvia.

No you today on the next fall to six quarters. It is in that sense in the next fiscal year I feel this this year.

We do believe though operational efficiency approach.

He is.

Working values and little bit there are good benefits as he believes that we have essentially a high quality franchise.

And the investments are behind us.

We lived through the benefit to that Andy will be a they're not margin guidance already for each one really there's into my lignite and easily ER visits have that fiscal years right.

Thanks.

Thank you.

The next question is something I know.

No that was five please go ahead.

Gentlemen, congrats on a good quarter.

Question, So first on.

Some of the new what are your new players involved it goes to high school will be.

So do you think we can actually push those any further are all going to walk problem I can do with somebody looking at and get them.

Secondly related to that.

I mean, it will stay out like.

Okay for the father and one more question a follow up after that.

[noise] family, Playstation and Oh, yeah, compared to some degree of about 80 foot fine.

But then that said we landed.

Indeed, Bossier, well take badly utilization up what somebody to pick up in place.

So we did you get a good adult taking that maiden because maybe can you dig it my question.

So at this stage got comfortable them, but they've never been the need bad and she'll make believe me too.

He did they play station on the bus did not believe ban business on the payment.

And they said you had a comfortable and they're not they looked like anything.

I think back down yeah that makes that I'm going to get that they need.

And on the read everything out for the call.

No I don't think be coming from it.

Mr.

[noise], sorry, I was reading programs with all that tenant.

Yeah. So you would not comment on debatable failed the problem.

Okay, Yeah, probably have you done.

Many gong to no big anyway, sorry.

I didn't quite kill I'm, sorry, and then just for clarification on right.

Nothing that you're shooting to state, though are within but just a couple different metrics right I think that's what that's where the revenue is falling in.

For your thought it's primarily a beep you, yes, it does the software products.

He feels like.

Why classify this revenue.

Sure sure. If you look at the Pentagon that they've been working on Iraqi started before did you go for the balance sheet demons will do that a work to be platforms is good because you know.

As you know as a one key element in a in digital and this is maybe a little go to get back on it is not though.

It is known to be demos.

There is a mortgage origination knowledge servicing platform.

So there is significant I seem to lessen and the pricing like anybody to get back from is very clearly outcome link.

Great. Thank you.

Thank you.

The next question is something I enough to meet Chen from Goldman Sachs. Please go ahead.

Hi, Thanks for the opportunity.

Understood and revenue growth guidance of nitrogen thing.

Including the recently closed stake.

Acquisition, and if yes can you quantify.

And she says that the that work is a is a business or John .

The pool, so it's very much thought to our business going forward and developed or disclose the specifics on that unless it's a very small or thoughts about VP of business.

Got it sort of onetime anymore. He doesn't impact on your revenue growth trajectory in December .

That's right.

And second do you wanted to understand that owns the subcontracting cost like of your fee for the last.

<unk>.

It has been in the range of 7.3 to 7.5 different levels. So going forward do you think.

Where do you think subcontracting cost would be one of the margin.

No.

Okay.

That's why I think subcontracting is an integral part of the business model I think I'd be looking for talent pool season, especially talent that are needed to climb in threed subcontractors, but as you see for this quarter, we haven't actually being able to watered down enough of contractor costs.

So what we actually do was also the pace. Many of these I come back on to update on a and therefore, we can do you gotta means that if there's some impact but do you have put them back. So I think so if we get this though and it's going as a strong wanted to be able to keep the cost under control and yet it will do higher you know talent on demand. So that's one of the leave US we've updated the.

Well it on margins as well.

Oh God or does the turmoil.

In Q.

Thank you.

Our next question is something I know Kreyenborg from Cowen. Please go ahead.

Hi, Thank you.

Wanted to ask kind of progression of your strategic relationships. If we think back two or three years ago. The prior management team and Tom and embedded thought it was having strategic discussions and conversations at around I think it was our 50 clients at the time when there was a thousand plus what do you think you are today as far as the mix of clients, where you're going to having strategic discussions and how do you expect.

Congrats.

I'm, sorry, I didn't follow the the questions or was it goes strategic relationships you have with our clients.

Yeah. When you think you are perceived as a strict a change in in a strategic partner in your client base. It's you know before you kind of started on this journey. It you know it with a <unk> a small percentage of the client mix I'm curious how you perceive that today.

Well, we maybe a bit optimistic in how we look at it would be absolutely to see that you have more and more popular this strategic or thinking about clients.

One other things either observed in the recent boxes.

So some many of our clients are looking at us.

More than they're looking at some of our competitors and especially with some of the investments we've made in digitally or some of the focus areas automation and the relationships that we have David in terms of the alliances that we have with that strong partners in the pick what that's helping us to be perceived.

Even more central to the agenda of our clients.

Okay and wanted to ask as far as digital contributing to large deal TCV can you give us any metrics there really get a sense of how digital deals are changing in size and scope.

No we don't really break up the but then pick up because of the lobby.

Do you believe that they can't bought <unk> billion to think that they need not be Uh huh.

There's not that there's still but they'll say like they can be basketball I'm not migrate to cloud and song so they need to do it but we didn't daily breakout what are the puts and takes up the billing.

Okay. That's fair I just last one here with MBS. So sorry can you just comment how insurance and U.S. Regional Bank performance is.

Yeah, I think look on the hole in the recent banking continues to be or anybody else would put us a really bad that is a you know some M&A activity going on there was a little bit of a please I'm did legally they want to happen, but oh, we feel that the regional banks Todd.

Neither one we feel that there's a lot of technology investment that's going into the effect of a as they look to compete with the larger universal banks and finally I feel like for even the banks you also very compelling story in terms of our services.

Platforms like de stocking platform.

And the fact that you have a beyond the ones largest stuff.

Banking software platform infinitely right, which is really gaining fairly significant traction. So the ER visit a bunch to continues to be a good one for us.

And I guess he insurance I'd.

I'm sorry did you have a question in terms of <unk>.

Yes, you can just touch on how you're the performance is not sub vertical.

Sure. So look I think Oh in children's continues to be continues to grow study I didn't think we've seen any.

Significant acceleration or any significant the growth beyond the average in that sector, but if it means a it remains a strong institute that difference or the I was hoping that we.

Headroom for growth continues and again like in banking a b. mcinnes platform has been didn't they significant traction.

And we have Ah you don't have a.

Fairly sizable pipeline of opportunities there.

Okay, great. Thanks.

[laughter].

Thank you.

The next question or something like enough to finish my thought from SP I got Securities. Please go ahead.

Yeah, Thanks for the opportunity.

Of course enforced doubled.

They still for.

After a couple of years over here go through it seems to more character see if you're gonna because what these please go to and how you expect Christopher to.

Grow a second question is a host of margin.

Oh I was getting for used to hurry interest, including marching no considering the specific English I mean freeze and one off investment fees, which we investor to return big <unk> industry, leading growth.

I, if you're going forward some color by when you expect industry, leading margin also will be a tier one what are we are trying to get rid of yours and.

Focus would be more on growth and margin. Thank you.

On the Ah that's something.

Thank you again remember that's partly why do you gave a very small part of the business then.

I know our focus is somebody do you make that product families selective on what the big funding gap, though that.

I need to do I like the if you back under study one yeah, Hi, Bob. Good then over the last few quarters I suspect, it's why somebody else Hayden.

Without a out and I could do a book, but there's nothing like then Ah we expect the I'm pleased that they did you have not seeing any anything that maybe it so hopefully add the growth to come back into <unk>.

Yeah.

Well, yeah, that's [laughter] Oh logic.

Yes so.

I didn't get home.

I'm not going to basis.

Yeah, maybe I can repeat.

Are we it you industry, leading revenue growth within revenue growth trajectory seems to be at least not sport Parker returned to double digit good looks good but.

Well look at margin for five years, given Oh, it you industry, leading grindle Oh.

Well for things that can help us understand how whether it'd be really speak with reality, we every citizen two.

Okay in it you industry, leading margin profile thinking.

So on that.

My view is very much that a lot of the authors to measure that we've talked about to this fall.

Heading in place and did he has been if it does give us a nice improvement in our margin in Q2.

Yeah. It was clear guideline or does the guidance for this year beyond this year, we've just come back and have a discussion I'd be ended the year or when they are talking about guidance for next year.

Thank you.

Thank you.

Ladies and gentlemen, that's my last question for today I now hand to content. So what are the management for any closing comments.

Your next to thank everyone for joining up I'm, just wondering if anything it does look forward to doesn't do anything other than that.

Thank you very much on ladies and gentlemen on behalf of insist that concludes this contract.

Thanks for joining us on you may now disconnect your lines.