Q3 2020 Sykes Enterprises Inc Earnings Call
Thanks.
[music].
Good morning, ladies and gentlemen, and welcome to Sykes Enterprises, Inc. third quarter 2020 earnings call on the call today, it's like management.
Including CEO, Chuck Sykes, CFO, John Chapman, and I R Tech she posh Kumar.
Management has asked me to relay to you that certain statements made during the course of this call that relate to the company's future business and financial performance are forward looking.
Such statements contain information that are based on the beliefs of management as well as assumptions made by and information currently available to management.
Phrases such as our goal, we anticipate we expect and similar expressions as they relate to the company are intended to verify to identify forward looking statements. Its important to note that the companys actual results could differ materially from those projected in such forward looking statements.
Factors that could cause actual results to differ materially from those in the forward looking statements right identified in yesterday's press release, and the company's form 10-K, and other filings with the SEC from time to time I will now turn the call over to CEO Chuck Sykes. Please go ahead.
Oh, you all Peter and good morning, everyone and thank you.
Today this goes like sooner.
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When people are doing so.
On today's call mobile.
Mobile overview of our results.
No I don't.
All right.
And John will walk through the numbers.
And then we'll turn the call over Q and Oh.
We were pleased to announce another quarter of solid financial performance.
So the areas that we.
We even broke broader records [laughter] dedication of our employees worldwide, we continue to navigate the pandemic.
Well.
Little role.
In our clients and customers.
No understatement.
Yes, it did.
Let me do one.
For sure, but we're doing everything we can.
The the minimize disruption due to a lot of neighborhoods are boring.
Their families as depends on them, while employing the latest safeguards that if you do the highest operational safety standards with.
With that let me provide a high level summary of our quarterly results. We reported record revenues in the third quarter, which was relatively broad based.
We delivered but in a decade gross margin.
Or resolve abroad.
Activity drivers.
It's still a t. best in a decade non-GAAP operating margin is you take into account that we had almost a 100 basis points.
It's a little goofy call.
Cash flow from operations was also at a record level in the quarter.
We pay down debt does maintaining a robust balance sheet.
To return cash to shareholders.
It will drive organic and inorganic reinvestment.
Our core business.
It all in spite of everything fluid environment, we are extremely proud of our outstanding quarterly financial result.
The job our teams did into the quarter and our business outlook for the fourth quarter.
And both consumer and commercial travel as well as a robotic process automation business.
Upper easily.
We're taking targeted steps in exiting support offices and capacity where clay.
Permanent commitment and their delivery make.
Macy's and brick and mortar.
Quality I tripped on performance.
In terms of key performance indicators.
Scores.
Or is that.
Or even better relative to brick and mortar delivery.
As we see scope for potential cost saving Matt hope reinvest.
Clients increasingly all maintenance solution.
Sure.
Says will vary by geography client and line of business.
And Moreover.
Is likely to be faster.
We were dealing with dedicated clients.
Versus.
Clients centers.
In parallel.
Has to be reduction, we're also green lighting.
To optimize our business and rebates are structural calls permanently.
Overall in parts of our operational by your team.
Hurts.
Fast track and we have made some headway.
And celebrate.
The year, we believe our ongoing investment to strengthen.
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Excluding the FX benefit third quarter revenues were up approximately $30.6 million or 7.7% constant currency organic revenue growth as Chuck alluded in his prepared remarks, our agility in responding to our client needs coupled with a diverse business mix as well as existing and new program.
Growth enabled broad based growth.
By vertical market and on a constant currency basis health care grew 27% technology up 24% financial services up 10% other which includes retail up 4% and communications is flat all of which more than offset the 21% decline in the travel and transfer.
Notation vertical.
Third quarter Twentytwenty GAAP operating loss was $2.1 million versus a profit of 24.7 million same period last year. Thanks.
Third quarter 2020 operating income includes 35.5 million.
Or 8.2% of revenues of noncash impairment of goodwill.
And long lived assets.
Including Ray of these assets and other fixed assets on a non-GAAP basis third quarter 2020 operating margin increased to 8.7% from 7.9% in the same period last year.
Third quarter 2020, operating margin was driven by solid demand execution combined with higher agent productivity increased capacity utilization inclusive of home agent and expense discipline.
Third quarter 2020 operating margin.
Reflects an expense of approximately 100000 or 20 basis points related to market Mark to market adjustment to stop these deferred comp plans funded through Rabbi Trust investments, which were impacted by the increase in global financial markets in the third quarter of Twentytwenty. This.
Third quarter GAAP Twentytwenty earnings per share loss was 13 cents versus diluted earnings per share of 44 cents in the same period last year with third quarter Twentytwenty driven by the aforementioned impairment of goodwill, which is not tax deductible as those impairment of royalties ourselves and other fixed assets.
On a non-GAAP basis third quarter 20 to 22 cents per share were a record 76 cents versus 56 cents on a comparable basis of the 20 cents per share increase approx approximately 12 cents is driven by operations.
The five cents due to positive swing in total other income expense to.
Two cents due to lower share count and obtaining from a lower tax rate.
Turning to our client mix for a moment on a consolidated basis. Our top 10 clients represented approximately 42% of total revenues during the third quarter down from 43% the year ago period.
The top 10 clients in the third quarter of 2020 compared to the top 10 clients in the same period last year grew roughly at 6% driven by existing and new program wins as well as share shift from competitors, we had no 10% client and both comparable quarters.
Now, let's turn to select cash flow and balance sheet items during the quarter cash flow from operations jumps up to 6.4% to $56.3 million from.
Four to 1.3 million junes drilling due to strong earnings on working capital swing factors capital expenditures increased to 3% of revenues from 2% in Utica period. The increase was mostly driven by PC refresh and the sheer number of new Pcs purchase for home agents along with the targeted.
Past the expansion at existing sites to support growth.
Dsos on a consolidated basis for the third quarter were 81 days up four days can parkway and up one day sequentially. The increase in Dsos compared to last year is primarily primarily due to drop off in clients that are mandating receivables factoring.
The DSO was 81 days for both Americas EMEA.
As we stated before we expect some clients continue to stretch out payment terms, even further as the mines liquidity needs more aggressively about.
Our balance sheet, our deficit timber remained strong with cash and cash equivalents $116.3 million of which approximately 17.5% or $92.5 million was held in international operations during the quarter, we repurchased half a million shares at an average price of sub $2 47 per share.
For a total of $16.2 million.
Year to date, we have purchased around 1.9 million shares with prices ranging from $22 33 to $33 21 per share.
We have roughly 1.7 million shares remaining under 10 million share repurchase program authorized in August 2011, and amended in March 2016.
At quarter end with $7 million in borrowings outstanding down 42 million sequentially under our 500 million credit agreement, we continue to hedge some of our foreign exchange exposure for the fourth quarter of Twentytwenty or we have hedged 34% at a weighted average rate of 51.64 Filipino peso.
The U.S. dollar. In addition in addition, our Costa Rica, Cologne exposure for the fourth quarter as hedged approximately 58% at a weighted average rate of 581.33 core warranty as dollar now.
Now, let's review some seat kind of capacity utilization metrics on a consolidated basis, we ended third quarter with approximately four to 6300 seats diner approximately 1200 seats compiling.
The reduction in capacity reflects decisions made by certain client permanently alter the delivery mix away from brick and mortar to a whole new agent solution you to coordinate team sort.
Third quarter seat count can be further broken down to 30700 in the Americas and 7600 media.
From the 13000 707000 day hundreds respectively in the year ago quarter.
Capacity utilization rates at the end of the third quarter of Twentytwenty were 72% of the Americas and 71% for EMEA.
<unk> was 73% for the Americas, and 75% for EMEA and mutable quarter, the capacity utilization rate on a combined basis was 72% versus 73% a year ago period with the decrease skewed mainly due to agent flux inter quarter between a brick and mortars between brick and mortar.
Facility at home agents, including home agents in the comparable utilization calculation. However, the capacity utilization would have increased comparable.
Now turning to business outlook.
Reinstating our business outlook based on improved visibility into the underlying trends present in client forecasts the ability to better probability weigh the assumptions driving those forecasts and the momentum of actual results materialize over the last two quarters.
We are seeing sustained levels of demand stemming from existing and new clients as well as new lines of business across our verticals consistent with the pattern that.
That has driven those verticals to date.
Such we are ramping client programs and expect fourth quarter revenues to see a healthy increase on a sequential basis.
Given the demand cadence under solid operational performance when tempered again, so should the trajectory of the call. It 19 biased the attendant costs uncertainty around fiscal stimulus and the potential for disruption due to continued intimate unlocked phones. We believe we are entering the fourth quarter in a strong competitive position second.
Secondly, we continue to work with clients and determine the future view of their delivery strategy between home agent and brick and mortar facility as.
As such we continue to adjust our capacity footprint similar to actions taken on facility leases in third quarter as we get greater clarity around those decisions.
Third quarter revenues earnings per share assumptions for the fourth quarter and full year were based on foreign exchange rates as of October 2020, Therefore continued volatility in foreign exchange rates between the U.S. and the functional currencies of the markets. We serve could have a further impact positive or negative on revenues and both GAAP and non-GAAP earnings per share relative.
Business outlook for the fourth quarter.
Fourth we anticipate total interest income expenses net of approximately 800000 for third quarter and $3 million for the full year the mines and the other interest income expense now however, exclude the potential impact of any future foreign exchange gains or losses.
Finally, we expect our fourth quarter effective tax rate to be a tick below last year's period, given by a mix shift.
Concerning the above factors, we anticipate the following financial results for three months ending set for December revenues in the range of 49 for fourth 444 effective tax rate of approximately 24%, both GAAP and non-GAAP fully diluted share count of approximately seven to 9.8 million diluted earnings per share.
Approximately 69 to 73 cents non-GAAP diluted earnings per share in the range of 70, 579 cents and capital expenditures in the range of $14 million to $18 million.
For the 12 months ended that first in December we anticipate the following financial results revenues in the range of $1.69 billion to 1.7 or $4 billion.
The effective tax rate of 30%.
On 24% on a non-GAAP basis fully diluted share kind of approximately 40.4 million diluted earnings per share of approximately a $1.45 to $1.48 non-GAAP diluted earnings per share in the range of $2 65 to $2 $2 68 on capital expenditures in the range affected.
$55 million with thought I'd like to open the call to questions operator.
Thank you at this time, if anybody would like to ask a question. Please press star one on your telephone keypad, we ask that you limit yourself to spray question George kick in Atlanta and Eric.
Your first question comes from Jake Williams from Wells Fargo. Your line is open.
Hey, guys. Good morning, it's actually Steve covered on project.
Okay.
Hi, guys, so productivity, obviously higher for home agent versus bricks and mortar.
How many agents remain a significant level workforce going forward.
How much do you think you can retain of the productivity benefit or is that a situation where clients are maybe going to try to clarkson back overtime.
I don't think our whole as you described is productivity difference is really a long term structural cost difference.
You are right I mean, we've always said that without facilities, there's less kind of four or 5% and cost differential as possible over time that clients will look for a share in those savings.
But it's more a buyer.
The ability to ramp quicker not being restricted by a building we will recruit and multiple geographies. Then then on age and be more productive now clearly if we if we hire people in the base, our home and and that makes them hop yellen or job then we might get if you count attrition as our productivity number.
Then we might get gains.
But but thats, where we see the our home is benefiting us no not so much the agent productivity, but long term cost structure.
And yeah, you're right, we might end up sharing some of those gains, but again, we've always shown that.
Margins really hard from we operate significantly below that 80, 85% utilization number and again, our home really helps not have g. any that simply that you're not using so thats the real benefit more than than agent productivity Steve.
Okay Thats helpful. Thank you and then I guess wondering what are the headwinds.
I know you talked in past quarters, but maintaining home agent going forward versus some industry, maybe or maybe a little more hesitant to.
Okay with that as we normalize post co, but how do you think should we think about that that.
That issue going forward.
What was interesting is we've got a wide spread.
If you look at the vertical.
There's no one vertical that decided to stay at home or not go home et cetera.
So we do think that we will get a higher proportion.
Offer.
People moving our home and onshore locations, we still think there will be at a disproportionate change where there will be more you asked.
You asked a minute mainland Europe stay at home than say in an India, Philippines, where the whole infrastructure.
As well as the telecoms infrastructure makes it more of a challenge.
I don't think we're looking on seeing by vertical is very much a client choice.
But we're not we're seeing a broad based in terms of clients, making decisions that you'd like to have lost so much completely our home.
Basically being more more agnostic and supporting the mix than strategy and not mix can be both any one geography or different based on the geography.
But again it is early days.
Taken some auction were seeing movement.
I will take a while for all of that to play out in terms of what is going to be the long term sustainable number.
We still we still feel good that is going to move in a direction that helps long term.
Business profile.
Okay, and then if I could just segue here you talked a bit.
Fair remarks about the communications vertical.
Seeing some.
Improvement there or what have you.
Drill into that a little bit further or the overall movement and kind of how we look at maybe those trends changing over time.
Yes, I mean, I think we've always been clear that the bulk of the telecommunications headwinds with our once largest client.
But we Didnt name, we Didnt like Telecom and then lastly, we kept telling people. This is all about having too much telco and the domestic geography at price points that didn't make sense in geographies and work for the client.
We've never ever shied away from that because its an important add.
Part of the market.
So I think the thing telco telco knows flaw.
And we're really hopeful that we'll start to see a contribute at equal weight to our overall growth targets.
Again, the benefit as we no longer have a 20% plus client so that helps overall.
But we're excited by the fact that we've shown that we can win new business and not vertical and you could see that now coming through the numbers, which despite again, we've still got a largest clients still you describe as as.
Week.
Though got growth, that's offsetting and overall, the vertical and a much better place.
In terms of growth profile employed has been for the last couple of years.
So we don't want to shy away from that we see it growing and again, if you think of our long term target for 6% revenue growth I would hope that occupy an equal contribute over there over the next the medium term.
That's helpful guys. Congrats on the quarter. Thank you.
Your next question will come from.
Dave Koning from Baird. Your line is open.
Yes, hey, guys, thanks and congrats.
Yeah, I guess, you know one thing thats encouraging I mean, it seems like the momentum around.
Signings it seems like it's not just volumes like thats, probably decent right not to but it actually seems like your new signings new business is as good as it's probably almost ever ban in may and maybe talk a little bit about that and just how like why clients might be choosing you and if thats sustainable and then secondly, you know.
This year is still hurt by travel by Symphony Transportation.
Even for as good as it is there is these headwinds that I'm kind of wondering next year could you keep growing.
Above mid single digits, just as some of those headwinds turn into easy comps.
Yeah, Yeah, I mean, you're right David.
Well, we'll see it or thinking back to.
Your question is.
This is not growth is being fueled by call. It let's let's talk about now because I think if you look back to Q3 last year was fine we really signal.
We saw a tongue.
And so yeah, you're right. We have won a lot of nice new business and we've grown existing clients and new lines. I mean, if you look at his broad base.
But that was pretty much in place at the start of the year and we've just been really successful. Despite corbett is actually growing into that and execute on clients. So I think thats the biggest and.
The biggest thing I would like to call out we always saw that the work being done on new sales and we saw the trajectory of the business and you're absolutely right. If you. If you look at the good news is I. Just said is telecom flattened out and divide is as we've got travel, but we achieved this growth despite traveled for all in cost.
Three points of headwind year over year now the only negative there is we expect our travel to stay around that but I think I think in our guidance, we probably got closer up 4% headwind because of travel year over year and Thats why if you look at the numbers you look and say was the deceleration Ll.
If you look at travel and the impact or not we'd be still above up 46%.
Constant currency growth number for Q4.
So we're just excited by the broad based growth.
We still think and if you look at the business development side of the business, we've got a lot of activity.
The question still as is our clients going a way our and keep keep within existing providers are they going to jump attaway, the going rate for corporate.
To become less.
Less intense.
But we've got we've got some nice new business development now that we hope will be the growth for next year beyond growing our existing clients and the new ones that we've got this year and.
That is all over our warning.
Warning there that travel will be tough for us and our comps.
Especially Q1 and Q2 next year unless corvette because as soon as Covance, Don travel is going to be a headwind and a tailwind but until then it will be I will be a headwind.
Yeah, I don't know.
And David just to add.
John Scott.
I would say two things that really you know first of all.
Wake up call that we got about so.
And those that are at around.
Got it.
Yeah, we.
Really.
Very conscious.
Expanding.
Mark we're going after.
Even started going after the smaller recoveries into economy.
With that.
So it's very basic.
Well.
Like I said in my comments, when we do show up now.
We have.
This better restored.
No.
Yes.
And so we may.
No Ed.
So what's your automation or certainly now with our own agent capabilities and I read you know.
So I just wanted to dig our value.
And is there any coupled with our efforts to adjust.
See growth.
So we really target before.
Pretty basic.
Yes, yes, great night.
I guess my one follow up the margin progression has obviously been incredible two year do your clients kind of are they able to kind of noticed that like in say, hey, you're probably saving because at home and so we're going to start putting pricing pressure or.
Are you continuing to feel like your margins are biased to the higher end of what we thought before and more stable like it.
You feeling even more comfortable today than even a few months ago about that progression.
Yes, I mean, it's harder will take time, David for all the impact of a.
If we got people that temporarily working from home.
And so now asking us for the price reduction because we've still pretty much go all RG and in place mean, they understand our in fact I think in Chuck's prepared remarks, we talk about net covered cost some of that has really increased cost, especially in the offshore of people working from home in us providing infrastructure and our you name it.
Yes, so so.
There is.
There will be a time, where clients have made significant permanent changes.
And they understand that it may have been allowed us to basically get facilities that we may end up having to share in some of that benefit I think it's too early to say how much the even as Steve said, even if all of it goes back to the client the whole issue as we don't have the Gionee and an underutilized facility, it's not having a facility.
Really our us as having an underutilized facilities are us and so as we get further through that because it's still the AD oriented things off of Fourq, where clients are going to make permanent decisions on.
The location strategy.
It's too early for me to say how much of that large gain that you only get when you take out those facilities that will keep versus our client base. We said the benefit is not just about the facility is as all of a sudden we can grow without being limited by the size of a building we have in our portfolio.
And not to to eventually help the growth profile business as well as the margin profile.
So.
I think the two things that were very hopeful on David.
Is that with all interest.
Or part of the.
Okay, Great profile is low.
Lumpiness.
[music].
No. So side, so that will certainly help overall margins and then the other thing is to speed.
Oh, sorry.
Okay.
I see.
Yes.
On the on our company.
Yes, it's great to see.
Thanks, so much for the the car great job. Thank you.
Again, if anybody would like to ask a question. Please press star one on your telephone keypad.
Next question comes from Vincent Colicchio Your line.
Our next El pen.
Yes.
Hi, guys.
Couple of remain so.
Curious Chuck financial services are getting it's been larger sometime.
It seems to grow nicely just what are your thoughts on the size of it.
You know really.
Really the point anytime soon where we make.
It may pick like communications, the mature they're going to Edwin.
Hello, everyone about what.
Vince and John obviously not Chuck.
John that was not necessary to explain it.
If you use the word peak, which puts really means in dollar terms. We can reach of that's not as an over where we are with that financial services clearly we've been very successful in that and clearly as a special is that we deliver great services to clients.
But we are succeeding all across the financial services as kind of Fintech.
Money buying credit card being.
Even within Nevada, I call. It is pretty distributed again you'd have big clients in there, but I think I don't see us continuing to grow at a double digit number of the 11 12 or whatever it was and for the last few quarters in financial services, but.
It's not a size, where I don't think it will contribute again to equal if you think about 46% being a growth number I don't see why financial services, Yes may have come off those peaks, but there's no reason for it not to be in that range and there's a lot of opportunity there and we are winning share class.
Since our last cannot to outsource more.
And not dynamic in Nevada, I called means it should be equal.
Equally weighted in terms of how well we succeed newmark, whether that's the largest vertical of at this point in time or not and we are still opportunity out there.
Again, the biggest issue is we don't want to have a 20% client and financial in any vertical and not not everywhere and that's where we were and telco more than what hurt us about the telco vertical itself. So yes. So I don't think its I don't think Youre peak and I think too much mark opportunities out there, but I also don't think will come.
10 years on that 12 can attain 11, 12% growth rate LP topic difficult long term.
And Chuck you had cited clients due to outsourcing is a demand driver.
His co related resulting in an expansion of the market opportunity longer term.
Well I think there's certainly highlighted.
Ian or company is the peak.
No.
Our store teams.
Great way.
Just to achieve that so.
I can.
Good morning.
Got it thanks.
We're certainly not seeing that.
That's for sure.
No.
And John I'm curious.
If you could maybe review how large clearlink is and how it's performing.
I would refer them to the last answer I gave from last quarter.
[laughter].
And I have described it.
It is contributing nicely the overall numbers I mean, it's not moving it's not moved much at all overall Vincent as staying with the connect.
We are growing the business and is a total in the growing nuclear linked business. I mean, we are excited by the growth and what we call the consumer business not.
Where we operate our digital properties to help consumers find use products and services are searching for and we then potentially pass those leads and connections to the brands chosen by the consumer or are we actually then helped to growers and consumers actually.
Consummate the sale and purchase decisions. So we got a really nice business is growing and there and even the performance marketing piece of of Clearlinks doing better.
It was not immune to the 18th the headwinds that we had in the other side of the business, but overall and we've seen a nice margin expansion not business. This year and we actually see a line of sight in 21 to 2021 for even better growth and.
We expanded margins as well so.
Joking aside is it still around the same percentage and has contributed nicely in the some elements of it we're really excited about.
And hopefully, we'll see that coming through the numbers next year.
Thanks, guys glad we could last would be that these days.
Thanks.
And your next question comes from sound like Misinformation, we were not able to gather if you've asked a question. Please go ahead.
Hello can you hear me yes.
Well, Josh Josh This is already hard here guys.
Hey, Josh.
I apologize because I hopped on the call late so if you're repeating any of this.
Sorry, but hopefully it's now a couple of questions here just curious.
When we look at the strength in the recent results.
How much of the recent revenue improvement if at all was short term work or was it buying taken from competitors that may not initially had the virtual capabilities to handle the work. So you took some share there, but now they may have it today, they're taking some of that business back and just curious about the dynamic there.
As a pretty easy answer virtually none.
Of course.
Temporary corporate work or temporarily moved from other clients because it couldnt be awful and I would say is it I mean, we said I think last quarter was roughly 1%, we would kind of lets call. It corporate Southwark is probably less than not definitely less than that this quarter and as I say Atlanta.
Went on but I was just explaining how this growth is not created by Corbett and force excitement is the growth that we saw in spoke about QVC last year was not derailed by corporate and not really test the major operational teams, who basically moved 75% for people to work at home and what's the most in the most difficult.
Year of this company able yet it's going to be potentially the most successful year of this company.
So, yes, so I'll look and I think theres nothing temporary about the revenues and the growth that we've got this year John.
Sounds great. Thank you Ron.
With regard to the impairment of goodwill related to Symphony I'm curious how is symphony performing recorded.
And why the project delays can this work only be done on site and if not why is that unit seen these headwinds are the rest of the business enjoying such a strong performance. Yeah. I mean, what are you got to remember is symphony with growing significantly year over year.
And so when you buy an asset like Symphony go an expectation that you're going to see a small asset. So it doesn't move the needle or overall, but we measure the goodwill and we pay our market price based on what we think this business is going to be worse than the growth rate than.
The issue for symphonies.
Just.
Gain new clients and winning new clients, especially in a project based business is just difficult and a lot of the consulting as done on site in office later, they're trying to work around on now, but the sheer scale of the change is what caused the goodwill write off the level of the business is just.
Impacted and when you've got an asset has grown materially and you'd call an asset that does this go a significant discount factor is part of the whole financial justification of the of the Cardium volume then it doesn't need in March.
Have a relatively material impact on on your let's call. It your calculation of what their current values versus your goodwill.
Overall, we don't see the the long term.
There's been a long term issue. The problem is there is now going to last a long enough time that the pace of the business has changed and we just do the math on the value in the discount factor. It's just not practical that we can hold on to that on the balance sheet and so thats, what youre really seeing coming through initially.
We've not really seen are are recovering that business, yet a low debt signs, but just as we think covance going to dump and help us get into the margin Europe's a big piece of it you can see where Europe is today and none of US saw back in March that this will continue through to Q4, so we like the long term viability.
Business, we are making sure that we are using this and times, where we've got these skilled consultants to help us potentially reengineer end terminals and so we're using them as much as we can but we have no choice, but the the pretty takeout write down indicates well just based on where the business is going but unlike.
And again, you were talking about 50% growth year over year, and and and the normal times are difficult Vancouver times, It's just impossible and it's really the impact of that Josh.
That's helpful. Thank you and there's.
There's a comment in the press release as your.
You know evaluating real estate footprint and potential changes in the future and I'm just curious you know.
What percentage of your client base is committed to the rebalancing of the delivery mix and is it kind of more sector or end market specific yeah. We did speak about it I don't think as vertical specific and we do believe more people make choices. They are home after delivery footprint onshore versus.
Offshore and near shore.
If you think about it we took out just over 2000 seats.
I'd say at this point in time, we've kind of got not number of clients and Cmet permanently you still got a long way April and if you think about it we think staring to 40% to be permanently our home.
Rough number is I think we're probably now of course of therapy.
Thats up from.
Five sex kind of number and breadth and Cnn's yet and as we get these permanent decisions are made we will take action on facilities and switches weve spoken about is great for the long term aspects of the business both in terms of capital intensity.
Eight to grow and less chance you've got and.
Real estate, Thats, underutilized et cetera et cetera.
Okay great.
And just lastly, as I see reinstate guidance and.
No I'm just curious about the visibility in your model that you talked to is it on a rolling three month basis or do you still feel comfortable about how the next nine to 12 months along for the maybe it's kind of like a backend way to asking about the length of the features that change at all and basically.
We get into next year.
Will you give quarterly and full year outlook, yes.
Yes, we'd hope I mean, we.
We are reinstated and.
Well, we've said is we still got we've got more Sam Turner forecasts, but if you asked me the same color and Seventys. We had last year at this time I would say no because we still go into our assumptions that we do have lots of people are and offices. What can we do have covert cases, you've got to quantify.
People, we've still got costs to get people to the office is still got me. There's just there's so many things so many more variables in there and I suspect that as.
It is becoming more of a normal that we can actually two decent guardrails around and Thats why we decided to reinstall guidance I don't think medium term visible is any more or less.
I think obviously the macroeconomic situation is going to be one that we keep an eye on and as well as that the strength of our clients, but as we sit here today I.
I don't look at the brands that we support that with an extension off from one day to March the we've got exposure there.
The obviously.
Quicker, we get into the economy. Moving then there will be there for everybody and as and when we guide in Q1 and I'm sure our conscious not guiding in Q1, we'll hopefully be able to show you how thats coming through our numbers.
Alright, great well thanks for taking my question, though is good talking to you guys as Josh Josh.
Okay brings us to the end of today's Q and a session I will turn the call back over to the presenters for any closing remarks.
No other comments just as always thank.
Thank you for your questions and everybody have a good day and we look forward to catching up with you next.
This quarter take care.
Thank you very much everyone. This does conclude today's conference call you may now disconnect.
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