Q3 2020 Globant SA Earnings Call
Hey, and welcome to the global third quarter 2020 earnings Conference call.
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I would now like turn the conference over to Paula <unk> Investor Relations Officer. Please go ahead.
Thank you operator, and thanks, everyone for joining us today on a we're going to review our third quarter 2020 financial results.
By now you should have received a copy of the earnings release. If you have not a copy is available on our website investors start glove and dot com. Our speakers today are Martin Migoya co founder and Chief Executive Officer, One another period, Chief financial officer, and whether its upon delivery and people officer before we begin.
Like to remind you that some of the comments on our call today may be deemed 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 uncertainties as described in the company's earnings release and other filings with the SEC. Please note that we follow I have for EPS accounting rules.
Our financial statements.
During our call today, we will report Monet for EPS or adjusted measures, which is how we track performance internally and the easiest way to compare Globant total peers in the industry you will find a reconciliation of hire for EPS and non I infer as measures at the end of the press release, we published in our Investor Relations website announcing this quarter's.
Google I'd like now to turn the call over to Martin Migoya, our CEO thinks bowler and Hello, everyone.
Happy to be with you again as we continue on our journey to reinvent. This industry you three glom brought in $207.2 million in revenue delivering at 20 point.
The 9% year over year growth.
I'm happy to see how our Globers continued to demonstrate their amazing talent and resilience in the face of uncertainty.
This year for us men to Bush, our vision to reinvent the industry even further.
Yes.
He predicts that there will be over 6.8 trillion of direct digital transformation investment between now and 2023.
Despite the uncertainties, we have a unique opportunity and we will keep working to make companies are Joel an accelerated.
Our.
Our positioning remains at the forefront of the market as a pure play in the digital uncommitted transformation space.
Recognizing these I'd see marketscape named Globin, I say global leader in its worldwide customer experience improvements services Twentytwenty vendor assessment.
We're very honored because this shows our commitment to creating products and customer experiences that connect with millions of consumers in a different way men.
Many special thanks to our clients like Directv Latin America lines, Rockwell automation, and Prisma, who share their experience with the C. A may.
May this recognition possible.
Now I'd like to turn the call over to Buttery Chip on me is our chief delivery people officer to share with you some of our new initiatives butter. Please.
Thanks, Martin Hello, everyone. It's nice to be with you all again I.
As I have shared with you before.
At Globant, we have more than a vision of changing the world through technology, we want to change the technology sector itself.
At a time when all of US are reinventing ourselves, we are evaluating our opportunities and reminding ourselves of what is truly important in life Globant is taking those steps forward as a company.
Our peak kind initiative is taking on a new project. This fall we are presenting the Globant awards.
Women that built addition to recognize women, who have shown tremendous leadership and technology and who are the future of the sector. We.
We will we have recognizing these women across the 16.
Because where we work with this initiative, we aim to build a community of support awareness and education for greater female participation in the tech sector and to close the gender gap.
This is meant to create a virtuous circle of ideas innovation and growth.
Leaders from.
Our business academic and Civil Society Filth will be in our panel of judges.
Last for my tea as well as in the Ruttenbur from endeavor and the edge from you too will make our global recognition.
I invite you all to discover more at women awards that club and that come.
No.
Now I'd also like to take this opportunity to mention our ongoing investment in our talent our digital education platform Luverne University continues to be used by our global Upskill riskier in the most sought after capabilities of the sector.
Since our launch last quarter and.
So happy to see that so many of our global have taken advantage of this opportunity.
As a digital trend continues this is our company's moment to take a global a step blow.
Globin has never been a more exciting place to work where professionals have the opportunity to join teams from all over the world and.
Except in solutions for some of the most innovative brands in the planet realizing the uniqueness of this opportunity combined with our constant search for the best talent. We are looking to hire talent from the war to execute our ambitious growth initiatives. We are collaborating with many press tissues businesses coal.
Calls to offer graduates our worldwide hands on a multi sector experience I.
I look forward to sharing with you more of these initiatives in the near future. Thank you Martine. Please.
Thanks, Pat though as.
As you May remember our Beacon initiative was first presented on this call one year ago.
Great was based on three pillars be kind to our peers to humanity and our planet.
For Us. This vision is we want to positively impact the state of our world.
In addition to diversity and inclusion programs, we continue to dedicate our sales to the planet.
We will meet our objective of relying on 100% renewable energy this year, but today I also want to share with you that we are committing ourselves towards a new a more ambitious goal, we will become a full carbon neutral by the end of 2021.
We make this commitment because we know that as global citizens. We must set an example of sustainability over the long term aligned to this as we evolve our organization. We also believe that we have a commitment to helping our clients reinvent themselves.
For a long time the concept of sustainability has focused mostly on environmental issues, but we believe that this sustainable development of the world should take into consideration a holistic approach where people profit I'm planet are interconnected.
This calls for.
New approach.
I'm glad to share that we have just launched our new sustainable businesses studio.
This is studio will operate as intersection between digital technology and sustainability, bringing together you know how and capabilities, we want to provide organizations and stakeholders.
Our investors with the tools and expertise to support climate actions Amber form us responsible businesses.
It is an exciting era and I expect to share more news soon for more information about this new studio feel free to visit sustainable business that globin Dot com.
So now I'd like to go over what we have been working on.
We believe the future of all companies lice heavily on their ability to embrace artificial intelligence.
I have talked to you in the past about augmented globin, especially element it calling our solution to a low coders to work.
Beaker and with greater collaboration and creativity.
September during converge, we officially percent it omitted coding with Steve was in yet as our special guest.
Lumped into the current reality. This was the first online version of converge, which enable us to expand the typical attend.
Couldn't to over 9000 people watching live now regarding our clients as.
As I mentioned on our last earnings call. The pandemic has accelerated the shift to digital for many of our clients across several industries.
This trend is accelerating Q3.
With the engagement we de lever.
We have brought in 40, new logos in the past quarter across many different industries.
Let me double click on a few.
We have continued to work with Phoenix international throughout the covered crises.
Globin created.
Tim Robbins 19 partnership program for finish line to support several projects throughout Twentytwenty we.
We have also just started multiple long term engagement with the BOP immobile fashion marketplace.
We're working on their mobile development and quality assurance services in gaming were providing.
Co development services for two of Warner Brothers games cohorts legacy and got some nights.
In the retail space, we want to strategic mobile development project with the gap in early Q3.
Our project is directly aligned to increase the company's revenue from its online channels.
The CLO a critical adoption to the new normal in the financial sector glowing continues to capitalize on this shift to digital finance one such project at so fine where we are providing that technology support for the integration process of one of their acquire companies.
We also continue.
He is to broaden our relationship with open bank space first and largest digital bank.
So tissue partner, we are involved in the international rollout of their multi country platform with more than 27 projects in nine countries. We're working that every layer and with a broad technology stack.
This will help open bank to scale up their banking platform that will drive future expansion.
In the food and beverage sector, we are working with Grupo Rikeld may holding that produces distributors and sales in Paraguay.
It has a strong supermarket chain and it's in a way.
Thing an E commerce platform, we are partnering with them. So they can offer an integrated value proposition and develop a data driven work culture with a capabilities necessary for our industry in disruption.
Closing out I'm happy to say that our global family keeps on growing.
Impersonal, we have ended the quarter with 14340 Globers worldwide.
During Q3, we broke records in recruiting while attrition remains low at 12.6% for the last 12 months Twentytwenty made something very clear.
Organizations everywhere need to truly harness the power of AI and have the agility necessary to build and leverage their unique capabilities.
This would be global positioning as we move forward as we continue to craft the right solution for our clients with that I'll turn.
Turn it over to one to go further into the financials.
Thank you very much one please.
Thanks Marty.
Everyone Hope you are all doing well im staying safe, let me start by summarizing our third quarter 2020 results.
I will then discuss guidance for the fourth quarter.
We are very pleased we are with overall results for the third quarter of this year as well.
Strong execution in these challenging times.
Our revenues for Q3 amounted to $207.2 million within our guidance.
On representing a solid 20.9% year over year growth on a sequential basis, our revenue for Q3 increased 13.4% showing our very healthy recovery Q3 revenue growth was 21.9% year over year.
And just on currency.
In line with our expectation the overall demand environment largely stabilized in the latter half of the second quarter.
Witnessed an improvement in market in the last several months, which is reflected in our strong sequential organic top.
Going improvement in the third quarter, we remain bullish about the demand environment post the COVID-19ien team crises and are encouraged by the ongoing positive trend in our bookings that said, we also remain cautious about any impact to our end market due to the potentially new waves of luck.
Dumps.
Like the ones, where currently witnessing in Europe and in some parts of the U.S. as discussed in our last earnings call. We always prioritized the health and safety of our employees and almost all of our employees continue to work from home, while maintaining seamless delivery.
We have services to our customers.
Our delivery and people teams continue to develop and execute strong an innovative initiatives to keep employee productivity morale high debt.
Disney was once again, our largest customer for the quarter growing our strong 10.2% year revenue.
Year on 14.8% quarter over quarter, we continue to be very well diversified within DC, serving the majority of its subsidiaries other than Disney rest of our accounts collectively grew at a solid 22.4% year over year with revenues from the top.
Five on top 10 accounts, increasing at a robust rate of 49.3% and 41.1% respectively over the third quarter of 2013, consistent with Q2, our top accounts are proving to be more resilient to COVID-19 impact relative to the rest.
As mentioned before we experienced sequential improvement in DC with revenue growing 14.8% quarter over quarter outside of this money rest of the accounts collectively also grew strongly at 13.2% quarter over quarter as we experienced improvement.
And in most industry verticals, our customer concentration numbers for Q3 2020 remained similar to Q2 2020.
Our top one top five and top 10 accounts, representing 10.8%, 32.2% and 45% of revenue.
As compared to 11.9%, 26.1% and 38.6% of revenues, respectively for the third quarter of 2019.
Looking at diversification of our revenues by industry verticals, we remained balanced across the different industries with financial services and maintenance.
Attainment, leading the pack accounting for 23% and 22.8% of our revenues respectively.
Professional services and financial services, where are the fastest growing industry verticals in Q3 growing at 39.1% and 30.6% year over year.
Respectively, starting this quarter, where our disclosure or exposure to the health care vertical healthcare represented 8.8% of our revenue snare third quarter, and we believe has a massive growth potential for us.
Regarding the progress of our Hunter square strategy during the last.
12 months ended September 3200, 20, we shut 16 accounts about $10 million in annual revenues compared to 13 customers for the same period last year, and we saw 118 customers with more than $1 million of on your revenues compared to 104 one.
In year ago, we continued to expand our relationships with our key accounts device for our continues growth in.
In terms of geographic regions during the third quarter of 2020, 70% of our revenues were in North America, 22.4% in Latin America, and others and so.
Improved 6% where in Europe in Europe, we witnessed strong acceleration in revenues growing at 56.1% year over year and at 34.4% on a sequential basis also Latin America and others showed continued strength growing at 58.7%.
The year over year, and 22.1% sequentially during the third quarter of 2020, 84.5% of our revenues were denominated in us dollars, providing a hedge to our top line against currency fluctuations turning.
Turning now to profitability, our adjusted gross profit.
For the period increased to $80.8 million, representing 39% adjusted gross margin compared to $69.6 million, representing 40.6% adjusted gross margin in the third quarter of 2018 year over year adjusted gross margin declined.
Mainly explain bakeries 19 related lower utilization, however, on a sequential basis adjusted gross margin improved 80 basis points helped by the sequential improvement in utilization.
Partially offset by salary increases and FX fluctuations, we finished the quarter with four.
14340, Globers 13476 of which were technology design and innovation professionals in the second quarter, we have decided to focus on only selective hiring of IP professionals in response to the impact on the demand environment from Covidien teen crises.
However, since the latter half of Q2 and continuing into Q3, we serving witnesses gradual improvement in the demand environment in response to this with stronger restated our hiring entering Q3 and how their robust addition of 1863 80 professionals somewhat.
Actually organic sequential net additions of fighting professionals, excluding G. Ace acquisition stood at 717, representing a solid return to preqin lending levels of employee additions over the last few years no. One has invested heavily in establishing a robust training and.
Hiring infrastructure across the globe, which gives us a string ability to seamlessly ramp up hiring and training as required at this moment, we'll look for see any challenges in finding the right talent to meet the demand attrition for the last 12 months continued to decrease and was up.
12.6% compared to 14.1% one year ago normalizing from the impact of the recent SIHI acquisition acquisition would have been 13.4% still very healthy we continue to expect attrition in the 14% to 16% level once we come.
Into a post COVID-19 worked adjusted EPS DNA came at 20% of our quarterly revenues a decrease of 70 basis points compared to Q2, 2020, but an increase of 60 basis points year over year, we continued investing for the future primarily to expand our sales coverage.
In our target markets, mainly in Europe, we.
We believe this focus will better prepare us to capture the robust demand expected bostic agreement in crisis and help maintain a strong long term revenue growth profile as a result, our adjusted operating income for the quarter amounted to.
[music] fell $1.6 million or 15.3% of revenues compared to $3.9 million or 18.1% of revenues for the third quarter of 2019 on a sequential basis adjusted operating margins improved 180 basis points as our revenue growth.
Retrophin and Utilizations continue to trend towards the Pregabalin entering levels. It will have a positive impact on our adjusted operating margins. However, we will continue to strongly mentioned the company as well to weather. This leads us to believe that adjusted operating margin will trend in the 15 to seven.
The 10% range in the near and mid term.
Share based compensation expense for the third quarter of 2020 amounted to $6.6 million, representing 3.2% total revenues for the period. This expense is mainly related to the planned of restricted stock units granted to certain key.
Employees and directors of the company as part of our long term retention plan finance expenses amounted to $2.3 million in the third quarter of 2020 compared to $1.8 million for the same period last year. This loss is mainly composed of interest expense on the list.
In diabetes and interest expense on borrowings other financial result, net amounted to a loss of $1.5 million for the quarter compared to a loss of $2.1 million during the third quarter of 2019.
This item is primarily composed of FX results.
Islam from monetary assets and liabilities in local currencies results from our hedging strategies and gains from transaction with bonds in the third quarter. We recorded a loss of 3.7 million orders in other income and expenses net this is related to remeasurement of the fair value of contingent.
Consideration associated with one of our acquisitions in 2019, our IRS effective tax rate for the quarter was 23.4% coming in line with our expectations of 22% to 24%, we expect our fourth quarter 2000 ton effective tax rate.
To be between 23% to 25% adjusted net income for the third quarter of the year totaled $24.4 million, representing 11.8% adjusted net income margin compared to $23.5 million representing 13.7%.
And adjusted net income margin for the third quarter of 2000 and team on a sequential basis. Adjusted net income margin increased by 90 basis points adjusted diluted EPS for this quarter was 60 cents based on 40.8 million average diluted shares for the quarter compared to six.
Two cents for the third quarter of 2019 based on 37.8 million average diluted shares for the quarter.
Moving on to the balance sheet, our cash and investments as of September 32020 amounted to $395.6 million.
Orders, while borrowings amounted to $78.6 million during the third quarter, we shinhan rating strong free cash flow of $21.6 million Q3 was another solid quarter for free cash flow. Despite the ongoing koby the environment on our free cash flow to adjusting that.
Net income was around 90%.
We also continued to execute on our M&A strategy with the latest acquisition of Te eight on July 31st She ate is performing as expected and integration is proceeding very smoothly.
Now, let's talk about the nine months ended September.
Larry 2020 revenue for the nine months ended September 32020 was $591.5 million, implying a solid 22.4% year over year growth revenues, starting on a strong footing in the first quarter followed.
Earlier period of softness in the second quarter, resulting from Cobiz and then showcasing strong sequential strength in the third quarter adjusted gross profit for the nine month period was $226.2 million or 38.9% adjusted gross margin compared to 193.
$3 million or 40.6% adjusted gross margin for the same period last year, a decrease of 170 basis points on a year to date basis. This margin compression was mainly explained by lower revenues to the impact from COVID-19ien, ending and lower utilization as previously discussed.
Despite the impact our top line from the ongoing economic we have decided to not let go of our employees with the assumption that kobin maintain crises is short term in nature adjusted EPS Una for the nine month period accounting for 20.3% of revenues, increasing 60 basis points.
Compared to the same period last year attacked profit from operations for the nine month period ended September Thirtyth 2020 was 86.1 million orders or 14.8% adjusted profit from operations margin compared to $81.6 million.
Or 17.2% adjusted profit from operations marketing for the same period last year, representing a decrease of 240 basis points and driven primarily by the impact of Cobiz and effects on gross margins.
Adjusted net income for the nine month period ended September 32020.
And was $68.8 million or 11.8% adjusted net income margin compared to $61.9 million or 13% adjusted net income margin for the same period last year adjusted diluted EPS for the nine month period ended September 32, 20 Twond.
Tony was $1.75 cents based on 39.3 million average diluted shares for the period compared to one daughter and 65 cents for the same period last year based on 37.6 million average diluted shares to wrap up I would like to share with.
Our outlook for Q4 based on current visibility, we expect Q4 2020 revenues to be at least $220 million or 19.4% year over year growth at this point, we do not expect any FX impact.
To our fourth quarter revenues Q4, adjusted operating margin is expected to be largely in line with Q3 2020, and adjusted diluted EPS is expected to be at least 66 cents, assuming 41.3 million average diluted shares outstanding for the quarter.
Also we expect our tax rate to be in the 23% to 25% range. In Q4 2020, thanks, everyone for participating in the call for your coverage and support operator can you. Please queue questions. Thank you.
We will now begin the question and.
Sir session to ask a question you May Press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing the key to withdraw your question. Please press Star then too.
This time, we will pause momentarily to assemble the roster.
The first question today comes from 10 Gen <unk> of JP Morgan. Please go ahead.
Thank you so much very good results here I wanted to ask you know what the improvement that you saw from from the second quarter, including from your larger strategic.
Clients Martina is it safe to say.
That your visibility is is back to to treat covered levels, especially amongst your your larger clients I know it cant really say were [noise].
You know beyond the pandemic, yet but are you at a point now where you feel like the visibility is back to you know pretty.
Pre pre cover levels.
I think Jason Thank you so much for coming today.
In General terms I would say, yes. There is some caveats are happening you know on the.
The ramp up of gift so some of those customers that ramp down.
And.
But I feel that it is by far.
Compensated by activity on other on another play this uneven other other areas of that of those same customers that are growing very very fast.
So visibility is good pipeline remains at very healthy levels.
And increasing.
From from previous levels.
So I'm optimistic in general.
The visitation is good although you know covered you never know what's going to happen.
So I would never be 100% sure about the visibility, but but it's much better than last quarter.
Yes, so it sounds that way and it sounds like you're you also as my follow up question that you're hiring your organically back to sort of pretty covert hiring it sounds.
While you're talking about your your no no issues or challenges from a from a hiring standpoint, so I'm just thinking if this if this demand trend continues.
Do you feel.
Evident that you have the resources to deliver if we want to get back to you know sort of your pre Cove. It revenue growth in 2021 for instance, do you have the resources and the delivery.
To do it.
Yes look we took a very serious condition.
When the when the crisis is started.
Okay around which would be how were you know.
Our Wu would do we you know the bench and the the lower you know utilization that we were having I would think.
I think now you know looking it from further.
Our took a wise decision given that we choose to preserve the people.
You know to have the people are ready whenever the business comes back.
US the other decision could have been to preserve margins in order to preserve the the utilization.
And.
With.
To not be ready whenever the business come back and I think we were the winners in this decision because we choose to preserve the people we serve a talent.
People hiring you know we slow down of course during the crisis.
But now we are back full steam ahead 763 organic you know.
New people in the quarter blast another amazing you know one 1100 people.
From the acquisition.
So I feel very confident.
And we can compete and we can fulfill the needs.
Of the talent that we need looking forward and into next year.
Very good thank you nice job.
Thank you.
The next question comes from.
Brian Virgin.
Cowen. Please go ahead.
Hi, good evening. Thank you.
I wanted to follow up on that last question can you talk about where you're focused on adding head count any regions.
Are you are you have a greater emphasis in any regions that you havent historically been adding.
Yes, Hello, Brian This is Juan.
One.
You know accordingly.
Latin America.
Our largest talent development center.
We are seeing a lot of growth.
Mm, Colombia, Mexico also.
Also in Argentina at this point.
Double that.
Operation, which is.
You know extremely healthy and growing.
This is another area, where we are going fast.
And of course, we still need to do.
No more work to accelerate eastern Europe, but we're doing good progress.
So you should expect.
Latin America.
And India believes the gross and then later.
For Europe, which is another area, where we are.
Buddhism investment.
Okay, and then just as it relates for the for the Fourq. Your revenue guide is there anything to call out on organic trajectory assumed the network you outlook outside.
Just a more difficult comp and from Fourq in 19 relative to Threeq you hearing the obviously the momentum and the positive comments on visibility.
Just curious if there you know what you might be baking into that Fourq, you growth rate anything to call out.
Look I mean Q4 EPS.
Another sequential.
And on a sequential organic growth.
We continue to see us as Marty was mentioning before you know.
Very good hirings.
HM.
We've proven the Q3 more than before so.
No in the guidance.
For which is almost 20%.
The new organic project comes from Jerry is pretty much what we mentioned in the last call and even though the teams are already integrated on and where we've started cross selling into the two companies and the customers of the two companies at this point no.
We can say that GA is about $16 million.
In Q4, but again this is probably one area. The last time, we will be able to display that revenue.
Clearly us as the teams are.
Really integrated into different regions.
Okay, what were they in what you thought they would be from a revenue contribution for this quarter.
Yes. They are in line with what we mentioned in the last call.
Good.
Close to $11 million.
Okay, great. Thanks, guys.
Your next question comes from Ashley.
When Shirvaikar of Citi. Please go ahead.
Hi, Thanks Hope you guys are well [laughter].
So my first question was to ask if you know you are seeing very soon.
Strong sequential growth here some of that park.
Okay, because if the if the.
Beating on base that we're kind of going through do you expect that to persist. The next couple of quarters, you know heading looking into next year.
So not looking for guidance, obviously, but it is pretty pretty good solid sequential growth.
[noise].
So who wants we thank you for the question so I'm going to go with smart people, saying we are <unk>.
Hello.
Future you know it is easy to improving Oh, we are seeing good momentum in our top accounts, even though even those not new clubs.
Some coverage, but we are starting to see.
You know some some come about some business units within those customers or another in at this point, we would expect.
I you know provided that the global situation does not deteriorate or does not come back.
Our good 2021, I mean, we did.
Everything seems to be.
Moving to the right direction in terms of pipeline in terms of visibility, but I think.
Thank you know, we still need to weigh diluted EPS.
Until the vaccine or or new treatments.
Our out there on the mobile App.
All the uncertainty that did you see the route but all in all I think we are optimistic about 2021.
Okay and so in other words as you can you speak with your clients and talk to them about.
Our budgets for next year.
You know that can get a bit delayed here and there of course the budget itself in a.
When times are tougher, but you're seeing for that type of work do you do that.
That demand should continue to be strong correct.
Yeah.
And ashwin. Thank you.
Mike My approach to that is that I I believe that the the thing it's totally across the board I mean, yes, I can so I can talk with my customers are accounted so talk with other new new customers and potential gas.
Most on pretty much all of them are thinking about.
Increasing.
That's spending or do the transformational faster so.
I mean, I think the two to answer your question.
Rather than just talking about the customers I would talk about the general environment up to demand in the in the in the.
Industry, which I feel is strong.
So this is my way.
So this is what we are seeing for next year or two I mean this is just the beginning and.
I I'm, we're optimistic because of that reason.
On top of that than some of the customers are we are seeing.
Steve you know.
Trend in terms of what well how fast they want to do the transformations.
Understood. Thank you.
Thank you guys.
The next question comes from Maggie Nolan of William Blair. Please go ahead.
Thank you.
When you think about the changes in the last couple of quarters and this year have there been any changes in that top 10 customer group.
And can you give us an idea of the makeup of that group in terms of vertical exposure length of relationships with those customers and other similar detail.
Else, how it may have changed over the last couple of quarters.
Yeah Hello.
So you're on the top accounts.
So you would expect.
Some of the trough.
Companies are out of the top 10 you.
No they were impacted favorably by.
Kobi on those accounts were replaced by some manufacturing companies.
By some professional services company.
Some financial institutions, so I think that.
Well actually.
Aspirational way.
This year, we lost a lot of revenue from the travel hospitality industry.
If you look at that number last year and was 92 million. If you look at the number or.
You know and you do kind of a run rate, we're going to end up somewhere in the $65 million to $68 million right.
So even you know.
Scenario, where we basically no more than 200 million in trouble. We are we are still.
Achieving a very very healthy growth on hopefully you know at some point in the future but.
Those accounts start to come back I mean, we.
Very good relationships with all those accounts and we feel that once you know once all these core institutions over and they are able to do to come back to investment mode. We'll be in a very good situation. So those are the main changes in top accounts might I would say less travel and a little bit more of.
Thanks to all the other industries.
Health care and so in summary, another industry that that Salinger three you will continue to see growing not stealing top 10, but new expenses some of those customers showing up in the top accounts overtime.
Okay. Thank you and then can you talk about the pace of project ramp ups and how that's changed since last quarter.
Yes so.
You know I would say that.
When you look at Q2.
Q2 basically was initially.
You know things started to slow down then they stabilized on towards the end of the quarter you started to see recovery right and on the recovery accelerated all throughout Q3, you know every month was a little bit better than the other than the previous one.
We.
We started all recurring engines and we ended up with a very solid.
Hiring number very very very solid honestly.
And you know the needs from the customers the customers have more visibility now so they are more comfortable.
Were starting or accelerate.
In some of the projects the additional transformation, but they kind of in the pipeline and I think that we worked some of that benefit and the fact that we kept it basically pretty much everyone in the company.
We kept on hiring selectively and we accelerated very early in the quarter a hell pass.
To to take part of that.
Growth very quickly.
Okay. Thank you.
You're welcome.
The next question comes from Diego, our Alco of Goldman Sachs. Please go ahead.
[noise].
Yes. So thank you for taking my question.
Actually.
My question is more like a follow up with a view for Tony just one from me just would like to try to extend what are the factors that should drive most of your growth and maybe if you can also comment about like the sectors that youre moves, but the concern.
About at this point that it would be helpful. Thank you.
Let's start with you wouldn't be able to repeat the question. There was some some noise on the line and we couldn't get it.
Yes sure so.
Just wanted to hear your views about the factors that should drive moves.
Pure growth.
2021, and also what are the sectors that you are more concerned about at this point in terms of what they should projects.
They are being delayed.
It will be helpful. If you can comment about abuse.
So the main sectors. So you will be providing.
Thank you.
And Eagle Scout now we go to <unk>. Thank you.
Lindsay Martine.
Jim healthcare.
Financial sector payments.
Retail online retail.
Those segments grew quite fast and.
I feel that they will keep on growing there and then the catch up will come back from from those that were not.
Enjoying the COVID-19 created on the sectors that.
Where are you with more complicated with their business.
And.
So the driver for us doing this.
Month has been basically entertainment.
On balance.
Entertainment not the online as determined by the.
Another another strong central for Us was gaming.
And gain creation.
The game operations.
And.
And the other guys that went live it slower on EPS in person entertainment.
And of course.
The whole travel segment from airlines to cruise lines.
And hospitality and hotels.
Sure.
Well it was a drag on the EPS scenarios, where the others.
Now you mentioned.
Well that answer your question. Okay. That's helpful. Thank you.
Thank you so much.
The next question comes from Arvind Ramnani of Piper Sandler. Please go ahead.
Hi, Thanks for taking my question.
You have talked a lot about the acceleration of digital work over the next couple of years.
Can you talk a little bit more about how you're preparing to take advantage of this.
Demand.
I think from a sales operations delivery perspective, there's there's a lot left to be done and and also if you can give us some color on sort of differences between how you're approaching it from existing clients versus prospecting new client.
Hello, everyone. Thank you for the question.
Yeah, you know and we are doing.
Many many things on the on the hiring front and.
We continue expanding our recruiting teams and we're starting to use.
In the regions, where we are as you know.
We have taken the decision to have presence in.
In Latin America, and in Europe and.
And I think thats going to be a a positive in the future because we are a percent industry largest talent pools idea right. So.
From where we were in a lot of things if.
If you look at the official number that has cost continue to come.
Come down.
No we have done a lot of work to co where people engage with the company to keep all the more senior people in the company all the knowledge. They have gained over the last several years in the company.
And I think the training that we are putting for these guys.
Mulder different.
All the different.
Skewed study our gaming I want to be very very important and those are some of the things that we're doing just to make sure that we from a delivery point of view, we travel the talent available that we need we've been hiring quite a lot in advance.
As you can see in our numbers I mean, we haven't really stopped hiring except from a little bit in Q2, and that's part of getting ready and then on top of that as you know we've been investing quite a lot in our internal.
You know strategic initiatives like the amended gold in.
And those are things that element is recruiting as many staffing knowledge and went to knowledge multiple internal strategic initiatives that we believe are gonna help us change the industry I want to help us be really.
When all these opportunities out there that are happening.
Our in front of US right. So I think that those investments blast hold investment didnt bring people into the company and retaining people and training people.
Are the right decisions to to take advantage of this opportunity that is in front of us.
Great Perfect and I also wanted to ask.
On business to the extent that you are able to share certainly definitely has been been really strong.
And you've talked previously about our kind.
Kind of work with Disney plus.
Yes.
It's not like it's.
One of the better work that's been done at Disney I mean for example, its box so.
Like.
That's kind of good account are sort of.
Should we expect kind of a pent.
Pent up demand in parks as we look into two to 2021.
This is a success story for US as you know we have been growing a lot over the last.
There will be years.
You know in the last quarter, we said that we weren't expecting recovery in Q3, and we weren't done recovery. Once again, we're expecting sequential growth for this quarter. Additionally on hopefully.
The open older products on.
Signals the vaccine.
It's readily available I'm sure that's going to be a very positive factor for these new.
But if that doesn't happen we're still here, we have been able to expand our center.
Yes.
Into multiple areas within that account.
That is the reason why we are going to.
To cover our business to keep growing our business, even the middle of the of the of the pandemic. So we feel optimistic all business. It's a great accounting charge more than 11. He has already working with them and we have expanded our offering in multiple areas in that customer.
Great. Thank you.
Okay.
The next question comes from Steve and nurse at Keybanc. Please go ahead.
Hi, great. Thanks for taking the question.
And just wanted to follow up on what you are hearing from your clients when it comes to demand outlook and other.
We have discussed or other vaccines, so fairly fairly recent but is.
Is there an opportunity the second unlock even further budget within your customers as we move into 21.
Yeah, the demand outlook is ace.
Interesting I mean, what's going on.
In different industries is it's really something that we are seeing a very positive trend.
And.
Again, you know.
When you talk about certain spaces, where.
The transformation were slow down for example, as tick.
And everything that is having on that happening of an education and you're seeing now that every single carrier in the planet is they is being taken offline.
Online sorry, and even you know an even mix times are happening online.
That's a huge transformation diverse.
Well to cut them, but never happened and now suddenly you have 100% of the population of the world pretty much you know starting from home.
Well that will require and that this is just an example, and I think it's a very illustrative example, because that will require like a hole through us.
Set off tick.
Well achieve that needs to happen.
I need to get ready for this massive amount of things that maybe 23% of all things will come back to classes to two physical connection, but 7% will remain or somebody that we remain you know.
On line and Thats a massive.
Jump in terms of.
The technology that is needed. So I'm, taking this example, because I think it's one of the most basic an example, but in the same way in many other industries. The same thing is happening. So what do we talk about this acceleration in the demand we're talking about this kind of.
Ill make changes that are happening.
Not all of them will not at present would change, but many industries will have a deep and profound impact.
After these.
No.
Deep deep I would say, we discovery of how to do things.
So I'm very possibly because of that because of those kinds of examples I'm mentioning.
That's the that's that's my my outlook on what's going to happen in that it came the coming months quarters and maybe years.
Okay, Great. That's really helpful. And then just as a follow.
I just had.
The converge conference back in September and talked about Augmenix Odeon, then, but what kind of interest have you seen from clients, so far and what you're doing with augmented coding.
Well, we actually see pretty positive I mean.
It.
Typically it takes a while to to be able to deploy the whole technology because it has to do with.
With the with the source code that they use in each of the client. So there's a lot of work around to be enabled to install the applications and to train the models for Dod specific environment.
Permit but.
But were being very successful in that we have a huge pipeline of customers and a lot of interest from most of our customers seem to move into these.
To this new technology and the results so far from what we have been seeing are pretty impressive not just you know providing.
During the quarter with a piece of coal that is ready to be used and then you just need to change the wireless but now we are playing with the outer complete. So why you are typing then the next sentence that is the most probable centers that you need appears on your screen and this chart is not.
In Texas out of complete like UK, you may have on any I'd, but it's something that is bringing is being brought by artificial intelligence in front of you, which is even more amazing that what we had before so I'm very positive on the EPS decide the adoption of these technologies and I'm very pleased.
Positive about how these will differentiate global when we talk to our customers.
This is very important I mean, it's not just.
This is a platform that will allow us to differentiate our offering when creating software.
Andy One instance of reinvention of the industry. So.
Oh I see every time I explain these it via adoption and it's also the opportunities that talking about this is providing in front of our customers and positioning for our customers to see us as the reinvention of these industry using an accelerated by artificial intelligence.
Lesions on much learning.
Okay, Great. That's a that's really helpful. Appreciate the insight there.
Thank you so much.
This concludes our question and answer session I would like to turn the conference back over to you mentioned Mcgrath for any closing remarks.
Okay. Thank.
Read much for everyone.
Coming to our Q3 Twentytwenty earnings call.
Thank you for your support for your help.
During all these years and.
Looking forward to see you on our next earnings call. Thank you.
The conference.
It is now concluded. Thank you for attending today's presentation you may now disconnect.