Q3 2021 Genpact Ltd Earnings Call
At this time all participants are in a listen only mode. We will conduct a question and answer session. So at the end of this conference call.
Mind you. This call is being recorded for replay purposes.
A replay of the call will be archived and made available on the IR section of Gentex website.
I would now like to turn the call over to Roger Sachs Head of Investor Relations at Chen. Please proceed.
Thank you Anita and good afternoon, everybody welcome to our earnings call to discuss results for the quarter ended September 30 of 2021, we hope you had a chance to have you ever earnings release, which was posted to the IR section of our website Genpact Dot com.
Speakers on today's call are Tango, Thiago, Rajiv Malik President and CEO, and Mike Weiner, Our Chief Financial Officer.
Today's agenda will be as follows Tiger will provide an overview of our results and update you on our strategic initiatives. Mike will then walk you through our financial performance for the quarter as well as provide you our carbons thoughts on our outlook for the full year 2021 Tiger will then come back with some closing comments and then we will take your questions.
The call to last roughly an hour.
The matters, we will discuss in today's call are forward looking and involve a number of risks uncertainties and other factors that could cause actual results to differ materially from those in such forward looking statements such risks and uncertainties are set forth in our press release. In addition, during our call today, we will refer to certain non-GAAP.
So measures that we believe provide additional information to enhance the understanding of the weight management do you have the operating performance of our business you can find a reconciliation of those measures to GAAP in today's earnings release posted to the IR section of our website and with that let me turn the call over to Tiger.
Thank you Roger good afternoon, everyone and thank you for joining us today for our third quarter 2021 earnings call.
Our third quarter performance reflects continued momentum across our business glue.
Global client topline performance, which grew at 11% on a constant currency basis was once again driven by strong demand for transformation services made up of analytics digital and consulting.
Our strategic investments over the years in capability and talent, including the continuous training and development of our global workforce positions us well to address the pressing challenges and opportunities our clients are facing.
This quarter, we achieved the milestone of crossing that threshold of $1 billion in quarterly total revenue for the first time.
While the third quarter 2021, we delivered total revenue of $1.02 billion up 8% on a constant currency basis.
Global client revenue of $921 million up 11.
On a constant currency basis.
Adjusted operating income margin of 16, 6% compared to 17.1% during the third quarter of 2020, and adjusted diluted earnings per share of 66 cents per share up 18% year over year.
Global client revenue growth in the quarter cut across almost all of our industry verticals with double digit growth in consumer goods and retail life Sciences, and health care high Tech and manufacturing and services.
As expected banking and capital markets growth continued to be muted due to the restructured relationship with one client that re sized its asset management business in late 2020.
Our pipeline remains healthy with a mix of both large and regular sized deals we continue to scale, our revenue and bookings from existing relationships.
And add new logos, which sets the stage for future growth.
During the third quarter, we signed four large deals across life Sciences, CPG banking and capital markets and high Tech services.
As we deepen our role as a trusted advisor to our clients. We have seen sole source deals, which was for many quarters above 50% of our bookings now rising above 60% we.
We're also seeing great traction buildup in Fintech digital banking and other fast growth Tech companies read our domain strength and agile development and deployment is helping them scale rapidly.
Global client transformation services continues to grow at a 30% plus rate and now come in for more than 35% of total global client revenue.
Including the contribution from the incredible acquisition.
Year to date, approximately 70% of global client bookings include a component of analytics digital all consulting in them.
The reminder, approximately half of transformation services bookings, our annuity based and often lead to large long term intelligent operations engagements.
Analytics is not only the largest component of transformation services contributing more than half of its revenue over the last several quarters, but its also its fastest growing component.
Insistently growing well above 30%.
Many of our analytics solutions are deeply connected to high growth areas, where we are strategically focused such as sales and commercial supply chain financial crimes and risk and F. DNA.
Our shop differentiation is our ability to orchestrate data and analytics in the cloud.
With deep industry and process knowledge.
The.
Ability of high quality data and the ability to derive actionable insights with analytics to drive decision, making is now more critical than ever.
It is at this insight to action level, where we differentiate ourselves the most.
Our intelligence platform Genpact enterprise 360 enables clients to do just that.
Genpact enable enterprise 316 harnesses the power of data and insights from our operations built on proprietary metrics and benchmarks, we have deployed and developed over the past 20 years in our digital smart enterprise frameworks.
This enables clients to have radical transparency in their businesses.
The platform then uses AI to generate predictive insights.
This further empower clients to take actions either themselves.
Through our work with them to deliver better outcomes today.
Two point transformation opportunities to unlock future growth.
Another differentiator for us is our ability to drive outcome oriented value for clients beyond just cost and productivity such as increased growth lower receivables and inventory lower losses in fraud and better pricing.
This is one of the key reasons why our transformation services solutions resonate so well with our clients.
Some examples include.
For a large global CPG client leveraging our experience in design thinking methodologies, we are using analytics to help them with better sales targeting and automating processes, such as contract management and payments reconciliations.
This enabled our sales teams to focus on a much higher proportion of that time on business development.
For a large fintech client we have designed implemented and are now running a best in class anti money laundering and transaction monitoring process to improve their regulatory risk compliance.
The exterior of hyper growth.
For our large high tech client using our courthouses assist solution, we are leveraging data and analytics to proactively generate and prioritize advertising leads for small and medium business segment to grow the client's top line.
For a large client in the semiconductor ecosystem, we are using digital and analytics solutions to improve supply and demand forecasting diversify their supply base for greater resilience and that global inventory analysis and run spot price forecasting to optimize the timing of purchases.
These examples reflect a five trends we continue to see in every CSO conversation. The five trends are one a significant shift from offline to online across every industry.
To the virtualization of all technology services and solution delivery, three and accelerated consumption of cloud based services and solutions for an exponential growth and real time predictive analytics and five the move to human centered design that creates superior experience.
For customers users and employees.
Clients continue to tell us that our approach of bringing together our expertise in digital and cloud based analytics solutions with our deep industry and process depth to drive action that deliver outcomes is different we continue to see momentum in driving commercial models linked to these outcomes.
Versus traditional inputs because people based models that focus on the.
The cost of FTE.
These commercial model venture golar alignment between us and our clients.
For example, being paid for the outperformance of pre defined metrics.
Junction of transaction based models are fixed fee models.
As the World continues to adapt to the changes that I've seen over the last 18 months companies across every industry are intensely competing for talent across the globe.
While this hot talent market.
Rents challenges for all kind of a business. It certainly creates an interesting set of opportunities for us.
We see many engagements, where we can help our clients access and nurture global talent, given our ability to scale across a range of skill sets and geographies as well as our focus on re skilling.
We are using our investments in our online on demand learning platform genome.
Build the critical skills businesses are looking for across digital data and analytics.
Specific industrial and process knowledge use of lean and six sigma as well as soft skill and personal development.
As an example, our data and analytics certification program equips, our employees with the skills necessary to generate impact immediately after course completion by deriving insights from complex datasets today.
To date, almost 70% of our employees are enrolled with more than 43000 fully trained and tested this.
Business analytics at scale for our clients.
At the height of the pandemic in 2020, we saw historically low attrition rates.
In the third quarter as expected our attrition rate increase above our historical average.
This is a global trend that is impacting our peers and clients alike.
However, given our talent management practices to date, we have had no impact on our client engagements on our ability to convert new bookings.
Year to date, we have welcomed almost 30000, new team members with about 10000, joining in the third quarter alone.
This reflects the strength of our culture of curiosity innovation and learning.
As well as the countless learning development and career opportunities we provide for our employees enabled by investments like genome.
Our redeployment platform talent match.
We are delighted to have had a spate of recent recognitions for being a great destination for talent in the market.
Such as Forbes 2021, world's best employers list.
But definitely as 2021 diversity and inclusion top hundred.
A total of 28 Excellence awards from Brandon Hall of Human capital management.
International Sos is duty of care award for diversity and inclusion.
<unk> top 10 best companies for women in India.
And earlier today.
<unk> 2021 America's best employers for veterans.
We're also being recognized for the work we are doing to improve our communities for example, being named to Fortune's change the World list as one of 100 company celebrated for having a positive societal impact.
We are deeply committed to our environmental social and governance initiatives and are proud to have been recently awarded a gold medal from equal wireless are recognizing our efforts across environment labor and human rights ethics and sustainable procurement.
We also recently concluded our annual Green Aton.
Event with more than 25000 participants to sponsor the planting of more than 14500 tree saplings underscoring our commitment to environmental sustainability.
ESG is not only an important focus for us internally as a company, but also for what we do with our clients.
Given our industry knowledge strength in data and analytics and deep familiarity with our clients' processes. We are in a meaningful position to help our clients achieve progress on their own ESG agenda.
Two areas like responsible sourcing supply chain optimization financial crimes climate footprint of equipment usage, and many others were able to help our clients generate positive social and environmental impact.
We are very excited about the work we're doing on our pursuit of a world that works better for people.
Lastly, as our teams are beginning to return to the office globally and travel more frequently to collaborate in person I'll meet with clients. We are taking every precaution to continue to ensure the health and safety of our own employees and their families.
We are happy to report that a large and increasing number of our employees are getting vaccinated globally.
For example in our <unk>.
Largest delivery ecosystem, India, approximately 80% of our workforce has received at least one dose of a COVID-19 vaccine and we continue to encourage participation for the rest of our population.
With that let me turn the call over to Mike for a detailed review of our third quarter results.
Yes.
Thank you Tiger and good afternoon, everyone. Today I'll review, our third quarter results and provide our latest thinking regarding our full year 2021 financial outlook.
Total revenue was 1.02 billion up 9% year over year or 8% on a constant currency basis.
Global client revenue that expanded to 91% of total revenue increased 12% year over year or 11% on a constant currency basis, primarily driven by ongoing movement in transformation services led by analytics that grew more than 30% in the quarter as we continued underlying.
<unk> strength in our intelligent operation business total global client growth included approximately one point contribution from revenue related to certain divested <unk> businesses that we began including in our global client portfolio as of January one.
During the quarter, we continued to expand the size of our globe Global client relationships. For example, during the 12 month period ended September 30th we grew the number of global client relationships with annual revenue of over $5 million from 129 to 142 or 10% year over year increase this include.
Clients with more than 25 million in annual revenue, increasing from 23 to 26 or 13% year over year.
<unk> revenue declined 15% year over year, driven by our delivery of committed productivity and the overall macroeconomic impact on G. Excluding the effect of revenue related to divested GE businesses I mentioned earlier GE revenue would have declined 6% during the quarter, which was in line with our expectations.
<unk>.
Adjusted operating income margin of 16, 6% decline from the first half of the year largely due to the increase in investment activity that we discussed with you last quarter as well as higher travel expenses.
As we move into the latter part of the year, we expect travel related activity to increase as the macro environment continues to stabilize gross margin in the quarter was 35, 6% compared to 35, 2%. During the same period last year, largely due to increased productivity from higher revenue.
And a more favorable mix, we continue to expect our full year gross margin to expand 70 to 75 basis points year over year.
SG&A as a percentage of revenue was 21, 3% up 10% year over year, and 60 basis points sequentially as we dialed up investment activity to be able to take advantage of long term growth opportunities adjust.
Adjusted EPS was <unk> 66 up 18% year over year compared to 56 cents in 2020. This 10%, 10% increase was primarily driven by higher adjusted operating income of four cents lower taxes of three.
<unk> impact related to FX, remeasurement and he one cent impact related to lower year over year share count.
Our effective tax rate was 17, 3% compared to 22, 6% last year, largely due to discrete benefits in the quarter as well as a nonrecurring prior period tax refund related items. Excluding this onetime tax benefit that equates to three cents per share our effective tax rate.
For the quarter would have been 21, 4%.
Turning to cash flow and balance sheet during the third quarter, we generated $210 million of cash from operation that corresponds to free cash flow being almost two times higher than net income as a reminder, during 2020, we experienced a lower than normal working capital.
<unk> to our cash flow given improved days outstanding as lower revenue growth related to the pandemic.
This helped drive cash flow from operations of $252 million during the third quarter last year. Our days outstanding have remained in a consistent range with third quarter 2021 at 84 days.
Cash and cash equivalents totaled $922 million compared to $753 million at the end of the second quarter of 2021 and includes $350 million related to the 175% bond that we issued in the first quarter. We continue to closely monitor market conditions for the optimum timing.
Of the pay down of our $3, 7% bonds that is scheduled to mature in April 2022.
Our net debt to EBITDA ratio for the last four rolling quarters was one one times with <unk> with Undrawn debt capacity of approximately $500 million and existing cash balances, we continue with ample liquidity to pursue growth opportunities and execute on our capital allocation strategy while.
While we continue to invest to drive organic topline growth, we have a solid M&A pipeline and we remain vigilant and searching for companies that can strengthen our capabilities in our chosen service lines as our track record demonstrates to the extent capitals available, we expect to repurchase shares, particularly when the valuation is attractive.
In comparison to our view of the intrinsic value of the firm.
As expected capital expenditures as a percentage of revenue increase from levels. We saw during the first half of the year due to investments related to deal ramp ups and the measured pace of our global workforce returned office given our year to date spending we now anticipate capital expenditures as a percentage of total revenue for the full year to be in.
The range of one 5% to 2%.
Let me now turn to an update of our full year outlook.
We continue to expect total revenue between $3 96 billion and 4 billion representing year over year constant currency growth of five 5% to six 5%.
For global clients, we expected growth remains in the range of 10, 5% to 11, 5% or 9% to 10% on a constant currency basis.
There is also no change to our full year GE outlook of approximately 20% year over year decline, excluding the effect of approximately $40 million in revenue related to the GE divested businesses. We continue to expect Ges full year revenue to decline 10% to 12%.
We continue to expect our adjusted operating income margin to expand to 16, 5% for the full year factored into this outlook is the impact of continued ramp ups in investment activity in both sales and marketing research and development higher fourth quarter travel and a higher level of transaction costs related to <unk>.
<unk> large deal signings to be clear, our approximate 16, 5% adjusted operating income full year margin remains the baseline for which we think about our trajectory for 2022.
As a result of the nonrecurring tax benefit in the third quarter I referred to earlier, we now expect our full year 2021 effective tax to be approximately 22, 5% to 22.2 to 23, 5%, which compares to the prior year range of 23, 5% to.
<unk> 24, 5%.
Given the outlook I just provided we now expect full year adjusted EPS to be in the range of $2 40 to $2 43.
Up from the prior $2 36 to $2.39 range due to the favorable impact of the nonrecurring tax benefit as well as the balance sheet remeasurement gains during the quarter.
Additionally, given our year to date performance. We can now expect our full year operating cash flow to be at least $550 million up from our earlier outlook of $500 million and we continue to anticipate free cash flow from operations of approximately 1.2 to one three times net income above our historical 1%.
One ratio.
With that said, let me turn the call back to Tiger.
Thank you Mike.
Our results for the third quarter are reflection of the focus long term strategic choices, we have made.
The capabilities, we have built organically and added inorganically over the years are resonating well in the market.
We are pleased with our performance that we believe reinforces our medium to long term trajectory of double digit to low teens global client revenue growth driven by continued momentum in transformation services, particularly analytics with an expanding adjusted operating income margin and adjusted diluted earnings per share growing ahead.
Of total revenue.
All supported by strong cash flow generation.
Clients across all industries are increasingly looking to leverage data and analytics for predictive insights to drive actions and position themselves to compete in this new world.
This secular trend plays to our strengths in transformation services that continues to power our revenue growth led by its largest segment analytics that has been consistently growing more than 30%.
The majority of our transformation services engagements are a longer term annuity based work that often leads to larger intelligent operations engagements that are of costs annually based by definition.
Our outcome oriented solutions are resonating well with clients as we focus on generating value beyond just cost and productivity, which is helping us win many sole source opportunities both with existing client relationships.
That are growing as well as with new logos.
We are at the forefront of developing new ways of working we are conducting many experiments across the globe with and for our clients in a variety of hybrid flexible models that allows our talent to get the benefits of being able to work from home, while coming together as a team in effect rhythm to collaborate.
In a wait and build on our strong team culture that we are known for.
Our clients value us for our talent practices and our ability to rescale globally and at scale. These strengths differentiate us even more in the current market we are today.
This is opening doors to many opportunities to help clients transform their business models with new cloud based digital solutions that leverage newer commercial construct given the changing nature of work away from traditional FTE models.
I want to thank our more than 100000 person global team for their ongoing commitment and the relentless pursuit of a world that works better for people.
I'm very proud of the work we are doing and the impact of our global teams have for our clients colleagues and shareholders and the communities. We live in and I'm very excited about the opportunities ahead of us. Thank you with that let me turn the call back to Roger.
Thank you Tiger now like to open up our call for your questions. Nicole can you. Please provide the instructions.
Therapy.
Okay. It's a reminder to ask a question you will need the press tier one telephone.
Against tier one.
My phone. So enjoy your question are you. If your question has been answered westbound.
Please stand by while we compile the Q&A roster.
Your first question comes from the line of Dave Khani from Baird. Your line is now open.
Yeah, Hey, guys great job.
Thank you Jeff Thank you.
Yeah, and I guess I guess first of all the momentum has been really good you know you got to the 10% plus global client two quarters early you got there last quarter you continuing this quarter.
I guess I'm wondering is is kind of your post ramp up kind of post COVID-19 is it.
It is it fully at scale now and we can just kind of expect that level to keep going or is there more to come I know you said kind of low low teens as possible like you know do.
Do you fully expect that kind of recurring growth to happen kind of into next year as we think about next year.
So Dave Thank you and.
You know.
Let's talk a little bit about the medium long term rather than next year.
As I reiterated on my on my script.
Being lower in queue for it is any of that just having to do with wage inflation or can we kind of look at this year's baseline and kinda think the full year is more how to think about next year rather than how the the trends go into Q4.
Yeah, So tied it's Mike that's exactly how we're thinking about it so we talked and we talked about the baseline for Allied six and a half you can make the same case or or gross margin. As we go forward. You know, we see a lot of things happening in the latter part of the year, notably the thing that we're we're most interested in is.
We're seeing traveling activity pick up investment in our accounts pick up and that's all driving that that margin as we go forward. So we look to use as a baseline to jump into next year.
Awesome, Thanks, great job guys.
And your day.
Your next question comes from Atlanta, Maggie Nolan from helium there. Your line is now open.
Thank you and congrats.
I Wanna get.
Indeed.
First question, a little bit about kind of the sustainability of growth Tiger did you say that the analytic piece S. A T. S was growing at 30% or what that T. As in general and then can you comment on the sustainability of that growth rate given that it's it's quite high and we've seen that increased demand for Angela.
<unk> coming through it and post pandemic.
Yeah. So the overall T. S. Grill. It has been 30 per cent for global clients and within that analytics Kelly is above dogs. So it's a it's a it's a leading engine for growth on it now so I actually for quite a few quarters now it's the largest segment of T. S. So it's always good to have the largest segment.
And also a conservation services business also be the fastest growing uhm transfer <unk> childhood growing up 30 per cent all very good you know obviously as God business continues to scale.
I'm I'm not I'm not <unk> I don't want to I don't want a principal of that that 30 per cent growth is gonna be something that we can expect longer term I think the way it'll play out of the way. We described it which is a factor every enterprise that we are working with every industry.
Is figuring out a way to leverage data and analytics for insights and actions on a real time predict advances in order to add value for bad customer then differentiate themselves in the marketplace. That's the world. We are in right now and that secular trend I would argue is he all for the next time you have to stay.
So the whole analytics injured and the value, we brings declines and driving that insights and benchmarks and the ability to then converted into actions and decisions and then at the end of the outcomes, which is where I'd be really different you at all says it's not just you in fact, we produce.
But it's the outcomes, we deliver and more and more of a stomach commercial construct getting paid for those outcomes. That's what makes us feel really good.
Okay. Thanks Tiger and then you're you're both by referencing the G divestitures and the results and there's obviously more change to come with that client. So can you talk a little bit about one large customers have significant restructurings or the like you know talk about your success historically nappy.
Hating the risk and opportunity that comes out of that.
No. It's a great question and again no surprise after this morning's announcement with with a large reclined G. It's a question that is obvious one of the most interesting things about our history.
Is that we really created amazing playbook, that's pellet softlines allow real flexibility as a apply businesses and spin off businesses separate themselves into independent companies, we've seen that again and again in a variety of <unk>.
<unk> Ah setup consumer goods companies, where we've actually participated in that separation Victor cratered off into companies some of them lifting separately pharma companies. Some of our largest pharma companies have misheard independent companies recently in the last three or four years and V within the middle of all those separations.
Given the work that'd be doing finance and procurement and supply chain in some of the regulatory work.
And then of course talking about G. As G went through with divestiture of the various G capital businesses and then subsequently a number of the industrial businesses over the last three to four years in in almost a majority of them. We've ended up with new contracts with new lines and then searched us.
Set that up for growth. So we really have a very good playbook our relationship with the G businesses is very strong and we continue to find ways to add value to G. So I think we're very well positioned to continue to add value to G. As they undertake their transformation journey.
Alright, Thank you <unk>.
And can I get.
Your next question comes from the line of Ashwin sure that card from city. Your line is now open.
Hey, it's a riot butter on for Ashlin.
I was wondering if they don't give some hay cause what if you could give some coke more color on the sales pipeline are you still seeing a good mix. So some larger and more complex deals as well as first time outsourcers flowing through the pipeline.
And in the jail, they've closed and a quarter or have you seen does this sort of cycles up at all.
No actually a little bit off the answer line is gonna be it's boring same old same old.
The mix of deals between large complex deals and and regular deals is pretty consistent as it's been in the last few quarters.
Uhm mixed between new logos and growing existing lodge relationships and scaling them similar mix that'd be seen in the past cycled times I'm pretty consistent but you know they've been very steady as we went through the fryer, Florida as well as third quarter.
So all very steady Eddie as we've gone through the third quarter out into the fourth quarter.
Got it and then have you guys given any more thought towards the future working model might look like going forward is it likely to be some hybrid of work from home in an office and does them more remote workforce luggage no more easily Anderson knew your television <unk>, we're able to enter.
Before.
Then I think that's a great question I think as as I describe in my in my I'm prepared remarks.
We are at odds B C conducting a whole set of experiments so think about experiments by different times in different industries. Some regulated so I'm not regulated climbs where we provide services from different geographies, ranging from India to Philippines to Europe to onshore the U S to China.
Into markets across the globe.
And then various types of services from auto management supply chain insurance claims financial crimes and risks to receivables management sourcing and procurement.
And all those experiments are forgetting out the right design.
<unk>, what kind of work and what stage off to work in a month and a quarter in our yard should be done from west and what's the best design.
And we think it's gonna be dependent on various clients appetite.
Four how old are designed will work, we're already seeing some time discussion gravitate to almost the entire work being done remotely and for the same type of work other times actually saying that 90% of the work will be done from an office environment.
If you'd asked me I would say it would broadly land somewhere in the middle in a flexible hybrid model.
With a clear understanding that we will bring teams back together into an office kind of an environment, where we will have them in a way it's brainstorm create solutions <unk> team bonding and collaboration that is necessary.
The culture and uhm apprenticeship that is necessary debate that talent and reskilling that we need as we continue to go forward. So I think the word is still in an experimental board I don't think there's a definite of deterministic answer to the question that you just had and the good news for US is that we have so many of these going on that will shape the answer.
For a lot of our clients actually.
Thank you.
That's right.
Once again, if you would like to ask a question you will need the press, Taiwan and your telephone attached.
Your next question comes from the line of Brian breaking from comments your line is that with them.
Hi. Thanks. This is Zachary this went on for Brian first question from US on gross margin how should we think about that puts and takes on on structurally higher gross margins, particularly that's transformation services.
Continues to become a large part of the mix.
So so in a number of things I. This is Mike.
<unk> <unk> so gross margin.
There are a number of puts and takes to go with it you right in the sense that potentially that some higher margin and <unk> lower margin implications associated with wages. There, but you have also productivity that goes against it and as we grow the operating leverage on the business kind of normalizes call. Those things soon we kind of think about it as a <unk>.
In totality why we're having the hyper growth in N T S. As we like to think about it the leverage that we have in some of the other businesses in the productivity kind of normalize it. So I I don't see that as a big risk as we go forward.
Got it and and like maybe while we have you.
Just looking for some of your early observations on junk back any or is that.
You expect to spend a lot of time on over the next 12 months or so just kind of looking for you to shed some light and also as it relates to the capital allocation program, how how do you weigh investments in the car business environment, both organic and inorganic versus Sherri posts, particularly given the devaluation discount here versus peers.
Yeah. So we were going through we're going through our our our typical process that we look at it and we don't look at capital location in any kind of 90 day incremented recorded right. So we're going to allocate our capital first and foremost to supporting our business organically than looking for inorganic acquisitions Ellis.
Support the strategy of our business and becoming more relevant to our client and go into business, but to the extent that those two don't come to fruition again not over any 90 day period of time will continue to look at the look at you know repurchasing shares, particularly when we see it at attractive levels from an inch an intrinsic value perspective.
Oh really no change to what was done prior.
Understood.
Your next question comes from the line of Brian team from night Shebang minus that open.
Hi, guys just wanted to ask about attrition I mean, it's it's an industry wide issue do you feel like you have a handle on it that it that it starts to come down next quarter or is this going to be a multi quarter process and some of the things you're doing to to bring attrition back down.
So Brian is a great question I I think number one it's an industrywide on them and I say industry and you'll probably also meant the same thing we're not talking about our industry. We're talking about all industries. Some of the talent that we're looking for in a competitor they're looking for all the same tolerance at our clients I'm looking for and and that's got to cross.
Supply chain that cuts across did did I engineering analytics.
Digital.
And that comes across almost all geography.
So will that come down in the next quarter I don't think I wouldn't necessarily assume that.
And the good news is I don't think we need to zoom back.
The current attrition levels that we have we have clearly demonstrated that we can manage both the hiring engine.
As well as the redeployment, then training and Rescaling engine to really deliver both to existing lines as well as a new solution then bookings.
Here's the interesting thing that as we slice and dice out attrition that it's important to remember and understand our attrition is the highest at the lowest levels of the company.
I'd be easiest skill levels of the company is where the attrition of the highest.
Those levels are where it's easier for us to a higher fresh talent and train them and then deployed.
As we go up to more skill levels as we go off into more managerial levels and leadership letters order attrition drops off materially ancestor Marty.
It also goes back a little bit to the history of the company and the strange that we've always had talent management people practices are rich R practices. The focus we've had historically on training and development in Korea popping and then the recent focus over the last four years on our dollar and trade.
A development and learning platform on demand self-service genome, that's really been one of the hallmarks of the way we <unk> I mean, just that data analytics program that I described in my prepared remarks is a Fabulous example of the way 70% of our workforce are actually act.
The moment as we speak going through that program. It's 43000 of them already certified and that's a huge benefit for our clients what are trying to scare analytic. So yes, a Christian could continue at these levels for some more quarters as the demand supply stabilizes.
But we've been very comfortable about our ability to manage through that.
But it doesn't seem like there's a surplus of demand that you can't fulfill that attrition is becoming a problem where you can't get the the folks trained enough to do the demand that's out there.
No I I <unk> I would say, Brian that's certainly true across the board at a total levels clearly there'll be pockets, where you have a demand where you are but you need to redeploy and move people around to fulfill supply, but one of the advantages of 100000 people that that'd be <unk> bye.
By the way one of the opportunities that I talked about is the fact that our clients do not have access to that scale. So one of the reasons. We are finding a tailwind and the industry is a current talent situation provides an opportunity for all kinds too actually leverage people like us to be able to deal with the current situation.
So we provide a capability for all kinds to actually act with that kind of talent.
Great Alright, congrats on the sole of execution.
Okay.
There are no forget question at this time I will turn it over back to Rochester.
Thank you everybody for joining us today, and we look forward to speaking with you again next quarter.
This concludes today's conference call. Thank you for participating.
Smith.
[music].