Q1 2022 Perficient Inc Earnings Call
Good day and thank you for standing by welcome to the Q1 2022 proficient earnings conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time.
Any one should require assistance during the conference. Please press Star then zero on your Touchtone telephone.
I would now like to turn the conference over to your host Chairman and CEO , Jeff Davis. Please go ahead Sir.
Thank you and good morning, everyone with me on the call today is Paul Martin, our CFO and Tom Hogan, our president and CFO .
As typical about 10 to 15 minutes of prepared comments after which we will open up the call for questions, but before we proceed Paul would you. Please read the safe Harbor statement.
Thanks, Jeff and good morning, everyone. Some of the things we will discuss in today's call concerning future company performance will be forward looking statements within the meaning of the securities laws.
Actual results may materially differ from those discussed in these forward looking statements and we encourage you to refer to the additional information contained in our SEC filings concerning factors that could cause those results to be different than contemplated in today's discussions at times. During this call. We will refer to adjusted EPS and adjusted EBITDA, Our earnings press release, including a reconciliation.
Liliaceous of certain non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles or GAAP is posted on our website at www dot proficient dot com. We've also posted a slide deck, which includes a reconciliation of certain non-GAAP guidance to the most directly comparable financial measures.
Prepared in accordance with GAAP on our website under Investor Relations Jeff.
Thanks, Paul well once again good morning, we're excited to be with you. This morning to discuss our first quarter performance and provide some thoughts on the second quarter and beyond.
22 has begun as 2021 ended strongly.
Revenue was up 31% and adjusted earnings were up 38% during the period.
North American average Bill rates reached an all time high utilization was strong and on the heels of setting a quarterly large win bookings record in Q4, we again set a record in Q1 and felt the overall bookings were up substantially sequentially as well as internally.
And the success extends beyond sales our delivery teams are doing amazing work in customer satisfaction remains very high and felt just two weeks ago, our customer right. Now previously interacted with much reached out to me directly to show how wonderful our team is performing on behalf of her organization.
We would keenly received positive feedback through our client insights program, which solicits real time feedback at various stages throughout the project lifecycle, but when a CEO proactively reaches out directly to complement our team and offer to serve as a reference it really underscores the value we're delivering.
So as our brand grows in word spreads within accounts between accounts and with end markets in between markets.
Current customers are often has more opportunities and new clients are asking us to propose on more work than ever before.
Organic offshore revenue grew 49% in the quarter and offshore revenue overall grew 111% are.
Our fully integrated global delivery model continues to resonate with clients who value the combination of our local and global approach.
In fact, it's a fully integrated global delivery model that is the primary catalyst behind our performance.
You may recall, a few years back we began to articulate our intentions to transform provision into a truly global entity.
To bring the world's best technology talent to the strong client relationships we forged.
Our long standing standing and ubiquitous domestic domestic presence.
We've done just that and it's paying real dividends our clients now benefit from a seamless blended experience where skilled colleagues a world away support them collaboratively with other provision experts who are just down the street.
It's driving portfolio expansion of current accounts and enabling us to land new clients and our customers are increasingly willing to pay more for both our domestic and our global resources.
The record North American build rates earlier offshore ADR gains were impressive as well up 3% sequentially and 13% versus the prior year period.
We believe we've built a true competitive advantage and one that's sustainable because it's difficult to replicate.
Remarkably even in the midst of the tremendous bookings success, our pipeline continues to replenish.
And so right now we're pursuing nearly 207 figure deals.
Our talent acquisition function continues to selling rapidly falling quite rapidly homegrown talent into new roles to support our aggressive growth.
Scale, coupled with increase in ABR is enabling us to offset wage increases despite the tight labor market. So on all fronts, a great quarter and a great start to 2022 and with that I'll turn things over to Paul.
Thanks, Jeff.
Services revenue, excluding reimburse expenses were $219 5 million for the first quarter of 'twenty, two a 31, 8% increase over the prior year services gross margin, excluding reimbursable expenses and stock compensation remain constant at 38, 9% SG&A expense was $42 3 million for the first.
Quarter.
<unk> 22, compared to $34 million in the prior year SG&A expense as a percent of revenues decreased to 19% from 21% in the first quarter of 'twenty one adjusted.
Adjusted EBITDA for the first quarter of 2022 was $47 2 million or 21, 3% of revenues compared to $34 6 million or 24% of revenues in the first quarter of 2021.
The first quarter of 2022 includes amortization of $6 million compared to $7 1 million in the prior year period. The decrease in amortization is primarily due to certain intangibles from our acquisitions, becoming fully amortized net interest expense for the first quarter of 'twenty two.
Of 2022 decreased $2 9 million from $3 3 million in the prior year, primarily as a result of adopting the new accounting standard for convertible debt in the first quarter of 2022 net income nearly doubled to $27 1 million for the first quarter of 2022 from $13 6 million in the first quarter of 2021, primarily as a.
<unk> of the higher revenues and gross margin diluted GAAP earnings per share increased to 75 cents a share for the first quarter of 2022 compared to <unk> 41 cents a share in the first quarter of 2021 adjusted earnings per share increased to 98 cents a share for the first quarter of 2022 from <unk> 75.
In the first quarter of 2021, and please see our press release for a full reconciliation to GAAP earnings are any global head count at March 31, 2022 was 5833, including 5420 billable consultants and 413 subcontractors ending SG&A head count was 900.
Third 80 for our outstanding debt net of deferred issuance costs as of March 31, 2022 was $392 9 million. We also had $24 2 million in cash and cash equivalents as of March 31, and $199 8 million of availability on our credit facility our balance sheet.
Continues to leave us very well positioned to execute against our strategic plan.
Sales outstanding on accounts receivable increased to 68 days at the end of the first quarter of 2022 compared to 66 days at the end of the first quarter of 2021, I will now turn the call over to Tom Hogan for a little more commentary beyond.
Behind the metrics Tom.
Thanks, Paul Good morning, everybody as Jeff mentioned after a record setting quarter of bookings to close 2021, our large tailwind volume grew again and substantially we booked 124 deals greater than $500000. During the first quarter of 2022, which compares to the prior record 98.
Set in the fourth quarter of 2021, and 92 from the year ago period.
Let's take a minute and highlight some of the type of work we're winning.
We continue to be a proven leader in the health care vertical.
As an example, this past quarter, we closed one of the largest deals in company history with a large private health insurance company.
Had a 12 year relationship with this client and our team has demonstrated through partnership as we digitally transform their product offerings.
This two year extension of services includes agile rapid development fully digital teams our structure enables projects to efficiently scale up and down based on business needs.
Our U S based industry leaders, coupled with multi shore engineering teams will support digital development testing and support for the company as member experience and mobile applications.
As you know, we're a proven digital partner within many industries not just health care. Obviously as an example, we also recently secured a three year agreement to provide website and content support for an international holding company that operates as the owner of a leading brand of trucks in diesel engines.
Through this agreement our multi shore delivery teams will support the company's 30 public facing web properties and worked closely with their digital marketing team to provide content updates across the organizations portfolio.
Our U S based Dev ops teams.
We'll also conduct extensive integration work to ensure operations are keeping up with their customers' evolving needs. We continue to remain well diversified from a customer industry and platform perspective.
And Excitingly our colleagues have recently began returning to our offices, we're always going to ensure we're providing the flexibility and work life balance, we all need but its really been invigorating to see our teams return collaborate in person and see smiles, replacing masks I'm also excited that during the quarter, we launched two more of our bright path programs in key markets.
We have already fully trained and hired 67 colleagues to this innovative program, which is providing new fleet new futures for deserving an ambitious members of underrepresented constituencies and communities.
As we scale, we continue increase our influence and impact on behalf of the world's biggest enterprises. We also remained focused on growing the positive change we can make on the world around us and with that turn things over to Jeff discussed second quarter and the remainder of 2022.
Sure Thanks, Tom <unk>.
Proficient expects its second quarter 2022 revenue to be in the range of $224 million to $230 million second quarter GAAP earnings per share is expected to be in the range of 71 to 74 cents and second quarter adjusted earnings per share is expected to be in the range of $1 four to $1 seven.
Proficient is raising its full year 2022 revenue guidance to the range of $917 million to $942 million, raising 2022, GAAP earnings per share guidance to the range of $3.08 to $3 19.
And raising 2022 adjusted earnings per share guidance to the range of $4 24.
Two $4.36.
With that operator, we can open up the call for questions.
Thank you.
Have a question at this time please press the star and then the number one on your Touchtone telephone you for your question has been answered or you Mr yourself from the queue. Please press the pound key.
We have your first question coming from the line of MS. Janet Chen from <unk>. Your line is open.
Thank you.
Morning, Congrats Jeff on a strong start to 2022.
I wanted to first start with just a housekeeping item in terms of organic growth could you give us a sense of what the organic growth was in the first quarter and what's embedded in your expectations for <unk> and the full year.
Yes, it was 23% in the first quarter and for the second quarter.
The mid point I'd want to say is around 17 sort of high end is just below 20.
And then the same for the year, it's about 17 at the mid and just below 20 at that time.
Got it and then.
Although demand sounds really good so I'm going to ask a supply side question could you just give us a sense of.
Your ability to recruit to be able to meet the strong demand climate and are you exploring other delivery hubs you've done a great job of scaling in Latin America, and India. Just curious on your supply side initiatives to be able to meet the strong demand curve.
Yeah, actually I'm going to ask Tom to add some color to this but.
The team has done a remarkable job our talent acquisition team they've scaled that team itself.
They've done a great job of recruiting against that you're really just kind of unprecedented demand and what obviously is a pretty tight market.
As our ABR increases sort of reflect in terms of.
Kind of hedging if you will we're really focused on still.
Latin America, as well as South Asia, primarily India.
But within India, we have a decent presence, but very little you know nothing close to saturation, So where else are you looking at expanding more within India.
And within Latin America.
Still exploring acquisitions also.
That might be able to contribute in that regard.
Europe is a possibility.
Given the uncertainty there right now we're kind of holding on that but Tom do you want to add some color to that.
Chin.
Mike we definitely increase.
<unk>.
Capacity of our talent acquisition team globally, not just United States, but in Latin America.
And in India as Jeff mentioned, we're looking at additional cities, we're pretty strategic in the last couple of years of of hiring individuals in cities outside of where we are in and building more of a presence beyond the three major hubs, we have India. So we see a lot of organic growth potential in India as Jeff mentioned, we're still relatively small in that.
Scheme of things in the India.
Marketplace, so plenty of room for growth and in our <unk>.
<unk> continues to differentiate ourselves in the marketplace and become the employer of choice. So it's a we've been able to continue to meet demand.
Practically higher along the way as well, which is really exciting.
Got it and then just finally, given the strong demand is the pricing leverage strong enough to be able to offset the wage inflation impact just any comments around that that would be helpful. Thanks, Jeff.
Yes, we have actually I mentioned that.
North American ABR is at an all time record.
The increase reflects is actually higher more than.
Then the wage increase actually the the differential there is about 90 bps. So we actually have rates up about 90 bps.
More than than average wages thats in the U S.
And it's even better offshore I mentioned.
13% increase offshore that's certainly outpacing wage increases.
And so.
So we're pretty optimistic we're going be able to maintain that again as the market is.
On the supply side.
Customers see that and our competitors see that so.
I think we're gonna be able to at least offset.
Cost increases.
That's great to hear thank you so much.
Thank you.
And we have your next question is from the line of Bryan Keane Stephen Ju from Alliance.
Our global partners. Your line is open.
Hi, guys great quarter.
Can you talk about the two verticals, we don't care as much about automotive and business services. While these arent your largest verticals they've enjoyed some of the strongest growth rates back of the envelope from what you provide.
In the presentation. So you can provide some details there whether it's a large client addition, or two if those industries are late to the digital transformation or something else you were able to call out and then I have one follow up.
Yes, automotive we've got a couple of phenomenal anchor accounts there.
One is actually one of our largest.
Might be currently running is our largest account at the moment so.
We've been able to move up the ladder their it's a long standing client that we've had for gosh I think it's been 20 years and.
We're now one of I want to say five or six global suppliers there.
So that continues to grow but we have a lot of other clients beyond that.
Within automotive.
Manufacturing similar story Big Big anchor account their longstanding relationship is going very very well and expanding.
And then actually we didn't talk about this some but it's worth mentioning again.
Really starting to see some great traction in Tac within fin serve you know, we've always had a great Street strategy practice.
This consulting practice.
I'll always had been really underrepresented on the tech side and that's changing the teams really worked hard on that and we're seeing some real dividends there as well.
Great.
Maybe one for Paul just to dig into the numbers.
The gross margin you mentioned was flat at 38, 9% on services.
About 9% more work being delivered offshore.
Obviously, it's fantastic, but generally we think of those as higher margin delivery and you talked about a 90 point improvement on the spreads for labor. So is that lower utilization that's offsetting that.
<unk> margin improvement or if not can you help us bridge that gap.
Sure Yes.
Utilization is modestly lower year over year, but.
Certainly in line with our expectations and see that strengthening in Q2, and I don't know Tom Hogan, if you want to add.
Anything from that perspective.
Yes.
A couple of things that Brian contribute there as well as we also as I mentioned in the past program. So we had 67 people joined through there we had a big College program come on and all of those individuals start coming online here as we go into Q2 so.
Hiring head training building up the bottom of the pyramid.
Great utilization here in Q1, but you're also adding capacity for the second quarter and beyond.
So essentially just to make sure I understand.
Utilization is only down modestly, but some of the people you've hired are not yet counted in utilization as youre preparing for growth.
Maybe that's why the margins flat despite other metrics, suggesting it would be otherwise is that right yes.
Yes, they're mostly actually included and utilization that would be a very small differentiator, yes utilization was about 81% last year and by the way you might recall that Q1 and Q4 typically are kind of lower seasonally. So it was actually 81, which is quite good but last year was about 83, so on a year over year basis.
As Paul mentioned slightly.
We still had gross margin expansion of about 30 bps I think so so of that 90, we're seeing about 30 of it any.
All the rest.
Probably got absorbed in that differential.
Great. Thanks, John .
Thanks, Brian .
Your next question comes from the line of Jonathan <unk> from Morgan Stanley . Your line is open.
Hey, guys congrats on the quarter, thanks for taking my questions.
It looks like sequential headcount for saw a slight deceleration can you provide some color around that and how youre thinking about head count growth over the remainder of the year, what do you see as the appropriate number of net billable headcount additions that you'd be able to add on a quarterly basis.
Oh gosh, it's it's well into the hundreds and actually we have added.
You'll see in Q2, we've had kind of a surge here so that was by design.
We sort of held back a little bit again, where we're going to let that utilization rise. But then also we had a large influx from both bright pads as well as that campus recruits that youll see revealed in the numbers when we report Q2 so.
I'd hesitate to put a fixed number on how many people we can recruit in a given quarter, but.
And actually Tom might have a comment on that but it's well into the high hundreds.
We have done in the past actually Tom do you want to add anything to that.
So you hit it all it's in the hundreds every month.
Got it that's helpful and then.
A follow up on acquisition how are you thinking about your acquisition strategy for the remainder of the year. What's the pipeline like have you seen private market valuations compress in the same way that we're seeing public market valuations compressed and does that if so does that make things a little more palatable.
It's a good question. So we're still very very active we've got some deals in the hopper now we.
We had some deals we were close on a didn't get done.
Actually.
What we're seeing is the opposite in terms of valuation at least right now.
I'd love to see it come down, but if anything it's gone up there's a lot of a lot.
Yes, as I mentioned, there's a lot of competition out there.
At the moment and valuations remain pretty high we are undeterred based on that that's not really the issue with a couple of exceptions by the way that it really just kind of got nutty.
From my perspective, so, but we're still on the hunt we've got a good pipeline, there's still a lot of opportunities and but directly on the valuation question I would say, we're not seeing it come down.
To your point like we've seen in the public market.
Really good color thanks, guys.
Thank you.
And your next question comes from the line of Matthew O'brien from William Blair. Your line is open.
Thank you.
Am I interpreting your commentary right that maybe you're seeing more in the way of unsolicited client inbounds and then if that's the case when did you kind of start noting this inflection and do you think there are.
Beyond just kind of come back effects that we've seen for the last couple of years any specific recent drivers of any kind of.
Uptake of inbound.
Yes, I think so I wasn't specifically alluding to to more inbound we are seeing more of that than we have in the past.
And I think that the reason for that is simply brand awareness as we continue to build the brand word of mouth et cetera that does happen, but a lot of that is really a result of the increased capacity that we have.
Driven and sales so it's not so much unsolicited as much as it is getting.
Getting those otherwise called relationships and getting a foot in the door.
Difficult to do where clients are sort of entrenched and existing relationships and kind of playing their way and there is hard to do it we're getting really really good success with that our win rates it's interesting.
Rates against our competition the typical household names.
It has not have not gone down it's still in the kind of mid sixties around 60% to 65%.
And we expected as we increased capacity in sales.
That you would naturally expect that to come down as we got more at bats, but the reality is once we get our incredible talent out in front of clients and that sales process the win rates stay high so.
Which again is an encouraging sign about the sustainability of our current growth rates if not acceleration.
Okay, Great and then yeah.
Years ago, you have to kind of talk in the contact center solution area.
Can you give us some insight into what you feel are some of your largest solution areas currently or maybe the fastest growing solution areas for the business and that's important and things like analytics consulting custom product development.
Types of buckets.
Yes, it's interesting.
The mix has stayed fairly stable so there's not any particular sort of runaway.
Or even necessarily decline foreign away custom App Dev remains number one.
Keep in mind that that you know the.
Vast majority of the time, when we're delivering for our clients, it's really a multitude of solutions. So when we're doing custom app development.
Almost every engagement analytics involved there's integration involved in those are we sort of measure those as separate services, but in reality. They all fit together. So so the mix has stayed.
Similar on a again on a relative basis custom active again continues to remain very very strong we.
We are seeing more opportunities with some newer technologies, maybe would have considered a little more niche in the past and newer platforms, but I still think custom App Dev.
It remains.
Kind of our bread and butter and like I said, the things around that are more complementary probably to that than anything some of them standalone, but it all really fits together like a puzzle.
Okay. Thank you your next corner.
Thank you.
And we have a question from the line of Ben <unk> from Jpmorgan. Your line is open.
Okay.
Thanks for taking my question and nice quarter.
So you talked about.
Finding lots of claims 100 plus clients this quarter.
<unk> bookings.
Pipeline is strong you're seeing price increases.
Guidance is it fair to say that you had not seen.
Adverse impact from potential macro slowdown.
In your.
Business may be in the sales cycle or anywhere.
Vertical are you seeing any signs of slowdown at all in that business.
I would say no not not at the moment and obviously, where we are.
I'm aware of the demand.
Current environment and are always nervous about that.
But gosh, if you look at our metrics when you look at our pipeline. It's it's.
There's no indication there the year over year.
Weighted pipeline deals at 50% and above.
Is phenomenal I mean, it's the best it's ever been and I'm talking about the year over year comp.
It was probably the best it's ever been both obviously in absolute dollars, but also as a percentage so you.
At the moment, we're not seeing that.
Clients ebb and flow in terms of their budgets some clients and I don't think it's a broad macro thing I think it's more again on an individual client by client basis.
In a broad sense knock on wood, we're not saying that at least not yet.
Understood not expert does yes, that's very good actually.
Then.
Youre subcontractor mix slowed on sequential basis little bit ending head count was about the same as athletes had com am I reading too much into it or should we expect.
Some sort of slowdown in sub contact that mix over the near term and what does that mean for margins.
Yes, we would like to drive the sub number down.
By design, we prefer to have full time employees, and we leveraged subcontractors and <unk>.
Very valuable asset, but we leverage them.
When when we have a unique skill set that we don't necessarily have a long term need for or flexible capacity.
But yes, I mean, we feel very confident right now so our preference would be to hire full time employees.
And reduce.
The number of subcontractors, both absolutely on a relative basis.
But as market environment cutting environment at a point that you can achieve.
<unk> reduced that's a contract that makes high most people.
Instead of relying on subcontractors.
Yes, I think youll see that.
As I mentioned earlier, what's not showing up in those numbers is the large groups that were bringing in in Q2, particularly the.
May graduates are that would be bringing in.
Yes, I feel confident that the market will allow us to do that were having really really good success differentiating the business.
Beyond.
Beyond our compensation and benefits.
We have attractive employer employees like it deal with a good culture.
We're a.
Very collegial and there's a greatest breeder Cory proficient.
I appreciate it thank you.
Okay.
Yes.
And your next question comes from the line of Vincent Colicchio from Barrington Research. Your line is open.
Yes, Jeff you had mentioned in your prepared remarks.
Some some large deals youre going after.
And.
I missed the size if you could clarify that and also I'm curious.
The average deal size is increasing that pipeline.
The answer the second question is yes definitely.
It is not like dramatic quarter over quarter, but we definitely add a few percent.
If not may be 10, plus.
To that number pretty much every quarter.
And yeah, what I said was that we have 200 deals over 200 deals that are seven figures plus so $1 billion plus.
Yeah.
And the pipeline or <unk>.
Business Youre working on 10%, yes in pursuit.
Fairly evolved.
Okay.
And.
If we take out the.
The relatively large healthcare.
Deal that comments broken about.
I'm curious how is the overall health of the <unk>.
<unk> care business.
The mix has declined and I heard from some of that.
Due to burn out of employees from health care providers are looking to minimize change I'm wondering if that's impacting you at all.
Yes, it's a good question.
Actually think our healthcare business is really really healthy keep in mind that we've had a long standing large relationship there that we're still in the process of winding down.
That said being a little bit of an impact on that but we're actually seeing it sort of turnaround now if you look at bookings.
In Q1, the bookings were substantially higher than revenue growth.
In Q1, so I think we're going to see that trend reverse.
And I can understand on the provider side the challenge but.
These folks are both provider and payer are still so far behind the curve.
In terms of technology that you know.
Still think there's a kind of a must spend.
And maybe even more pressure on the provider side than on the payer and we're seeing certainly digital transformation is in most industries in health care is no exception as being a top priority, so even where they may be reducing budgets elsewhere.
They are still spending on that and in some cases, it's interesting your observation about the employee.
Burnt out or employee health mental health maybe.
A lot of the digital transformation work that we're doing is actually designed to make their lives better. So so I feel pretty good that there's going to be a good stable base of demand there first.
At least the foreseeable future.
Uh huh.
Thank you and good quarter. Thanks, Vince.
And again as a reminder to ask a question. Please.
Please press star one on your telephone keypad again Thats Star one on your telephone keypad you. Our next question comes from the line of Jack Vander <unk> from Maxim Group. Your line is open.
Great. Good morning morning, Gents, Congrats on the continued execution.
Maybe a question for Jeff and Paul.
You touched on gross margin and <unk>.
ABR, both onshore and offshore are increasing.
Do you see a similar gross margin and AVR profile across all your various <unk>.
Orange or offshore teams are there differences and then are these recent increases linear across the groups our earnings growing faster than the others and for whatever reasons.
Yes, good question.
In terms of the margins, yes, the the rates and associated costs are lower in.
India.
Then in Latin America, but the margins are fairly consistent with them.
Five 5% five points, so maybe it's somewhere around that 50 to 55 range.
We are seeing an increase in ABR.
Particularly standing out in some of the more recent acquisitions that we've done in Latin America, where we've been able to introduce different types of accounts, there with different kinds of relationships I would say.
And they've actually driven so a lot of that.
Some of that 13% is skewed and some of it is not even really in our organic number yet because a couple of these haven't anniversaried yet but.
But we've managed to drive rates, they're up in the kind of 15% to 20% range. So.
I would say Latin America is leading the way they were probably a little bit under pricing when we did those acquisitions and.
It is rapidly changing.
That's great color.
I appreciate that and then I'm sorry, if this has been mentioned like twice, but remind me of the number of seven figure deals you're pursuing currently.
It's over 207 figure plus yeah.
Okay. Okay and then just one last question is on the win rates you mentioned those are remaining strong around 60% to 65% overall.
Can you maybe just talk about the win rates across the size of deals. So you know whether it's not considered a large deal and then there are deals over 500 K now.
Now these seven figure deals is there any sort of variance across wind deal our win rates and what your expectation for when rates are.
Yes, we do look at that I don't have it in front of me now, but when we do sales analysis. That's one of the metrics we look at.
I would say it but theres a lot of variability there right and in a lot of our relationships, particularly those new ones that I was alluding to where we're actually able to open up doors a lot of them do start small.
Again, as the opportunity to get our foot in the door and shine.
As what we do at the same time, we have more and more of these days than ever before.
We do it we are able to get in to deals that are sometimes multiple seven figures. You know we talked about back during I think was 2020, we initiated with the client at around $25 million. So.
So there are those occasionally but.
It's still a good mix I would say, there's not I can't sit here and say gosh, a $750000 deal closes 80% of the time.
Or are our win rates are 80% versus 40 somewhere else.
Got it very helpful. I appreciate the color I'll hop back in the queue.
Thank you.
I am showing no further questions at this time I would like to turn the call back to Jeff Jeff Davis for further comment.
Alright, well that obviously concludes our call I really appreciate everybody's time today as always and as you can see more momentum than ever a really really great quarter, great start to the year and Super optimistic about not just the rest of this year, but.
The outlook beyond that so I appreciate your time and look forward to seeing you all again in 90 days. Thank you.
Yeah.
Thank you and this concludes today's conference call. Thank you all for joining you may now disconnect.
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Yeah.
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Good day, and thank you for standing by and welcome to the Q1 2022 proficient earnings conference call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time, if anyone should require assistance. During the conference. Please press Star then.
Zero on your Touchtone telephone I would now like to turn the conference over to your host Chairman and CEO , Jeff Davis. Please go ahead Sir.
Thank you and good morning, everyone with me on the call today is Paul Martin, our CFO and Tom Hogan, our president and CFO .
We've got as typical about 10 to 15 minutes of prepared comments after which we will open up the call for questions, but before we proceed Paul would you. Please read the safe Harbor statement.
Thanks, Jeff and good morning, everyone. Some of the things we will discuss in today's call concerning future company performance will be forward looking statements within the meaning of the security laws.
Actual results may materially differ from those discussed in these forward looking statements and we encourage you to refer to the additional information contained in our SEC filings concerning factors that could cause those results to be different than contemplated in today's discussions.
During this call we will refer to adjusted EPS and adjusted EBITDA, Our earnings press release, including a reconciliation of certain non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles or GAAP is posted on our website at www dot proficient dot com we have also.
Posted a slide deck, which includes a reconciliation of certain non-GAAP guidance to the most directly comparable financial measures prepared in accordance with GAAP on our website under Investor Relations Jeff.
Thanks, Paul well once again good morning, we're excited to be with you. This morning to discuss our first quarter performance and provide some thoughts on the second quarter and beyond.
22 has begun as 2021 ended strongly revenue was up 31% and adjusted earnings were up 38% during the period nor.
North American average Bill rates reached an all time high utilization was strong and on the heels of setting a quarterly large wind bookings record in Q4, we again set a record in Q1 and felt that overall bookings were up substantially sequentially as well as annually.
Right.
And the success extends beyond sales our delivery teams are doing amazing work in customer satisfaction remains very high.
Just two weeks ago, a customer right now previously interacted with much reached out to me directly to show how wonderful our team is performing on behalf of her organization.
We're keenly received positive feedback through our client insights program, which solicits real time feedback.
Are your stages throughout the project lifecycle, but when a CEO proactively reaches out directly to compliment our team and offer to serve as a reference it really underscores the value we're delivering.
So as our brand grows in word spreads within accounts between accounts and with end markets in between markets.
I think customers are offering has more opportunities.
New clients are asking us to propose on more work than ever before.
Organic offshore revenue grew 49% in the quarter and offshore revenue overall grew 111%.
Fully integrated global delivery model continues to resonate with clients, who value the combination of our local and global approach.
And that it's fully integrated global delivery model that is the primary catalyst behind our performance you may recall, a few years back we began to articulate our intention is to transform provision into a truly global entity to bring the world's best technology talent to the strong client relationships we forged.
Long standing standing and ubiquitous domestic domestic presence.
We've done just that and it's paying real dividends our clients now benefit from a seamless blended experience where skilled colleagues a world away support then collaboratively with other prevention experts who are just down the street.
Driving portfolio expansion of current accounts.
Labeling us to land.
New clients and our customers are increasingly willing to pay more for both our domestic and our global resources I mentioned the record North American build rates earlier offshore ADR gains were impressive as well up 3% sequentially and 13% versus the prior year period.
We believe we've built a true competitive advantage at one that's sustainable because it's difficult to replicate.
Remarkably even in the midst of tremendous bookings success, our pipeline continues to replenish.
Right now we're pursuing nearly 207 figure deals.
Our talent acquisition function continues to scale rapidly falling quite rapidly talent into new roles to support our aggressive growth.
Scale, coupled with increasing ABR is enabling us to offset wage increases despite the tight labor market. So on all fronts, a great quarter and a great start to 2022 and with that I'll turn things over to Paul.
Thanks, Jeff sorry.
Services revenue, excluding reimburse expenses were $219 5 million for the first quarter of 'twenty, two a 31, 8% increase over the prior year services gross margin, excluding reimbursable expenses and stock compensation remain constant at 38, 9% SG&A expense was $42 3 million for the first.
Quarter.
Of 22 compared to 34 million in the prior year SG&A expense as a percent of revenues decreased to 19% from 21% in the first quarter of 'twenty one adjusted.
Adjusted EBITDA for the first quarter of 2022 was $47 2 million or 21, 3% of revenues compared to $34 6 million or 24% of revenues in the first quarter of 2021.
The first quarter of 2022 includes amortization of 6 million compared to $7 1 million in the prior year period. The decrease in amortization is primarily due to certain intangibles from our acquisitions, becoming fully amortized net interest expense for the first quarter of 'twenty two D.
Of 2022 decreased $2 9 million from $3 3 million in the prior year, primarily as a result of adopting the new accounting standard for convertible debt in the first quarter of 2022 net income nearly doubled to $27 1 million for the first quarter of 2022 from $13 6 million in the first quarter of 2021, primarily as a.
<unk> of the higher revenues and gross margin diluted GAAP earnings per share increased to 75 cents a share for the first quarter of 2022 compared to <unk> 41 cents a share in the first quarter of 2021 adjusted earnings per share increased to 98 cents a share for the first quarter of 2022 from 75.
In the first quarter of 2021, and please see our press release for a full reconciliation to GAAP earnings are any billable headcount at March 31, 2022 was 5833, including 5420 billable consultants and 413 subcontractors ending SG&A head count was 900.
Third 80 for our outstanding debt net of deferred issuance costs as of March 31, 2022 was $392 9 million. We also had $24 2 million in cash and cash equivalents as of March 31.
$199.8 million of availability on our credit facility, our balance sheet continues to leave us very well positioned to execute against our strategic plan.
Days sales outstanding on accounts receivable increased to 68 days at the end of the first quarter of 2022 compared to 66 days at the end of the first quarter of 2021, I'll now turn the call over to Tom Hogan for a little more commentary beyond.
Behind the metrics Tom.
Thank you Paul Good morning, everybody as Jeff mentioned after a record setting quarter of bookings to close 2021 of our large scale wind volume grew again and substantially we booked 124 deals greater than $500000. During the first quarter of 2022, which compares to the prior record 98.
Set in the fourth quarter of 2021, and 92 from the year ago period.
Let's take a minute and highlight some of the type of work we're winning.
We continue to be a proven leader in the health care vertical as.
As an example, this past quarter, we closed one of the largest deals in company history with a large private health insurance company.
Had a 12 year relationship with this client and our team has demonstrated through partnership as we digitally transform their product operates this.
This two year extension of services include agile rapid development fully digital teams our structure enables projects to efficiently scale up and down based on business needs.
Our U S based industry leaders, coupled with multi shore engineering teams will support digital development testing and support for the company as member experience and mobile applications.
We're a proven digital partner within many industries not just health care. Obviously as an example, we also recently secured a three year agreement to provide website and content support for an international holding companies operate as the owner of a leading brand of trucks in diesel engines.
Through this agreement our multi shore delivery teams will support the company's 30 public facing web properties and worked closely with their digital marketing team to provide content updates across the organizations portfolio.
Our U S based Dev ops teams.
We'll also conduct extensive integration work to ensure operations are keeping up with their customers' evolving needs.
Continue to remain well diversified from a customer industry and platform perspective.
And Excitingly our colleagues at recently began returning to our opposite we're always going to ensure we're providing the flexibility and work life balance, we all need but its really been invigorating to see our teams return collaborate in person and see smiles, replacing masks I'm also excited that during the quarter, we launched two more of our bright path programs in key markets.
We have already fully trained and hired 67 colleagues to this innovative program, which is providing new fleet new futures for deserving an ambitious members under representative constituencies and communities.
As we scale, we continue to increase our influence and impact on behalf of the world's biggest enterprises. We also remained focused on growing the positive change we can make on the world around us and with that turn things over to Jeff discussed second quarter and the remainder of 2022.
Sure Thanks, Tom <unk>.
Proficient expects its second quarter 2022 revenue to be in the range of $224 million to $230 million second quarter GAAP earnings per share is expected to be in the range of 71 to 74.
And in second quarter adjusted earnings per share is expected to be in the range of $1 four to $1 seven.
Proficient is raising its full year 2022 revenue guidance to the range of $917 million to $942 million, raising 2022, GAAP earnings per share guidance to the range of $3.08 to $3.19 and raising 2022 adjusted earnings per share guidance to the range of $4 24. Thanks.
Two $4.36 so with that operator, we can open up the call for questions.
Yeah.
Thank you and if you have a question at this time. Please press the star and then the number one on your Touchtone telephone you for your question has been answered or you wish to remove yourself from the queue. Please press the pound key.
We have your first question coming from the line of Miami, Ken Zhang from <unk>. Your line is open.
Thank you good morning, Congrats Jeff on a strong start to 2022.
I wanted to first start with just a housekeeping item in terms of organic growth could you give us a sense of what the organic growth was in the first quarter and what's embedded in your expectations for <unk> and the full year.
Yes, it was 23% in the first quarter and for the second quarter.
The mid point I'd want to say is around 17. So the high end is just below 20.
And then just.
And for the year, it's about 17 at the mid and just below 20 at that time.
Got it and then our demand sounds really good so I'm going to ask a supply side question could you just give us a sense of that.
Our ability to recruit to be able to meet the strong demand climate and are you exploring other delivery hubs you have done a great job of scaling in Latin America, and India. Just curious on your supply side initiatives to be able to meet the strong demand Corp.
Yeah, actually I'm going to ask Tom to add some color to this but.
The teams did a remarkable job of our channel and acquisition team they've scaled that team itself.
Done a great job.
Recruiting against that you're really just kind of unprecedented demand and what obviously is a pretty tight market as that is our ABR increases sort of reflect in terms of.
Kind of hedging if you will where we're really focused on and still are.
Latin America, as well as South Asia, primarily India.
But in India, we have a decent presence.
Very little you know nothing close to saturation, so where else are you looking at expanding more within India.
And within Latin America.
We're still exploring acquisitions also.
It might be able to contribute in that regard.
Europe is a possibility.
But given the uncertainty there right now where we're kind of holding on that Tom do you want to add some color to that.
And Mike we definitely increase the.
The capacity of our talent acquisition team globally, not just in the United States, but in Latin America.
And in India as Jeff mentioned, we're looking at additional cities, we're pretty strategic in the last couple of years of hiring individuals in cities outside of where we are in and building more of a presence beyond the three major hubs, we have India. So we see a lot of organic growth potential in India as Jeff mentioned, we're still relatively small in the <unk>.
Scheme of things in the India.
Marketplace, so plenty of room for growth and.
Our team continues to differentiate ourselves in the marketplace and become that employer of choice.
We've been able to continue to meet demand and <unk>.
We're actually higher along the way as well, which is really exciting.
Got it and then just finally, given the strong demand is the pricing leverage strong enough to be able to offset the wage inflation impact just any commentary on that that would be helpful. Thanks, Jeff.
Yes, we have actually I mentioned that north.
North American ABR is at an all time record.
The increase reflects is actually higher more than.
Then the wage increase actually the differential there is about 90 bps. So we actually have rates up about 90 bps.
More than than average wages thats in the U S and.
And it's even better offshore I mentioned.
13% increase offshore that's certainly outpacing wage increases.
And so.
So we're pretty optimistic we're going be able to maintain that again is that the market is.
<unk> contracted on the supply side.
Customers see that and and our competitors see that so.
I think we're going to be able to at least offset.
Our cost increases.
That's great to hear thank you so much.
Thank you.
And we have your next question from the line of Bryan Spillane.
From Alliance.
Our global partners. Your line is open.
Hi, guys great quarter.
Can you talk about the two verticals, we don't see much about automotive and business services. While these arent your largest verticals they've enjoyed some of the strongest growth rates back of the envelope from what you provide.
In the presentation. So you can provide some details there whether it's a large client addition, or two if those industries are late to digital transformation.
Alex you are able to call out and then I have one follow up.
Yes, automotive we've got a couple of phenomenal anchor accounts there one.
Actually one of our largest.
Might be currently running is our largest account at the moment so.
We've been able to move up the ladder their it's a long standing client that we've had for gosh I think it's been 20 years.
We're now one of I want to say five or six global suppliers there.
So that continues to grow but we have a lot of other clients beyond that.
Within automotive.
Manufacturing similar story Big Big anchor account their longstanding relationship is going very very well and expanding.
And then actually we didn't we talked about this some but it's worth mentioning again.
Really starting to see some great traction in Tac within fin serve you know, we've always had a great Street strategy practice.
Consulting practice.
But I'll always had been really underrepresented on the tech side and that's changing the teams really worked hard on that and we're seeing some real dividends there as well.
Great.
Maybe one for Paul just to dig into the numbers.
The gross margin you mentioned was flat at 38, 9% on services.
You have about 9% more work being delivered offshore, which obviously is fantastic, but generally we think of those as higher margin delivery and you talked about a 90 point improvement on the spreads for labor. So is that lower utilization that's offsetting that.
<unk> margin improvement or if not can you help us bridge that gap.
Sure Yeah, so utilization is modestly lower year over year, but still.
In line with our expectations and see that strengthening in Q2, and I don't know Tom Hogan, if you want to add.
Anything from from that perspective.
Yes.
A couple of things that Brian contribute there as well as we also as I mentioned the bright pass program. So we had 67 people Julien through there we had a big College program come on and all of those individuals start coming online here as we go into Q2 so.
Hearing head training building up the bottom of the pyramid.
Great utilization here in Q1, but you're also adding capacity for the second quarter and beyond.
So essentially just to make sure I understand.
Utilization is only down modestly, but some of the people you've hired are not yet counted in utilization as youre preparing for growth.
That's why the margins flat despite other metrics, suggesting you'd be otherwise is that right yes.
Yes. They are mostly actually included and utilization that would be a very small differentiator, yes utilization was about 81% last year and by the way you might recall that Q1 and Q4 typically are kind of lower seasonally. So it was actually 81, which is quite good but last year was about 83, so on a year over year basis.
As Paul mentioned slightly.
We still had gross margin expansion of about 30 bps I think so so of that 90, we're seeing about 30 of it.
And yet the rest.
Probably got absorbed in that differential.
Great. Thanks, John .
Okay.
Thanks, Brian .
Your next question comes from the line of Jonathan <unk> from Morgan Stanley . Your line is open.
Hey, guys congrats on the quarter, thanks for taking my questions.
It looks like sequential headcount growth saw a slight deceleration can you provide some color around that and how you're thinking about head count growth over the remainder of the year, what do you see as the appropriate number of billable headcount additions that you'd be able to add on a quarterly basis.
Oh gosh, it's it's well into the hundreds and actually we have added.
You'll see in Q2, we've had kind of a surge here so that was by design.
Sort of held back a little bit again, where we're going to let that utilization rise. But then also we had a large influx from both bright pads as well as that campus recruits that youll see revealed in the numbers when we report Q2 so.
Hesitate to put a fixed number on how many people we can recruit in a given quarter, but.
Actually Tom might have a comment on that but it's well into the high hundreds.
Now that we've done in the past.
Tom do you want to add anything.
Yes.
You hit it on some of the hundreds every month.
Got it that's helpful and then.
Follow up on acquisition, how are you thinking about your acquisition strategy for the remainder of the year, what's the pipeline like and have you seen private market valuations compress in the same way that we're seeing public market valuation compressed and does that if so does that make things a little more palatable.
I would say good question. So we're still very very active we've got some deals in the hopper now.
We had some deals we were close on.
Didn't get done.
Actually.
What we're seeing is the opposite in terms of valuation at least right now.
I'd love to see it come down, but if anything it's gone up there's a lot of.
Yes, as I mentioned, there's a lot of competition out there.
At the moment and valuations remain pretty high.
Undeterred based on that that's not really the issue with a couple of exceptions by the way that it really just kind of got <unk> from.
From my perspective, so, but we're still on the <unk>. We've got a good pipeline, there's still a lot of opportunities and but directly on the valuation question I would say, we're not seeing it come down.
To your point like we've seen in the public market.
Really good color thanks, guys.
Thank you.
And your next question comes from the line of Maggie Nolan from William Blair. Your line is open.
Thank you.
Yes.
Interpreting your commentary right that maybe you're seeing more in the way of unsolicited client inbounds and then if thats. The case when did you kind of start noting this inflection and do you think there are.
Beyond just kind of come back effects that we've seen for the last couple of years any specific recent drivers of any kind of.
Uptake of inbound.
Yes, I think so I wasn't specifically alluding to to more inbound we are seeing more of that than we have in the past.
I think the reason for that is simply brand awareness as we continue to build the brand word of mouth et cetera that does happen, but a lot of that is really a result of the increased capacity that we have.
Driven in sales so it's not so much unsolicited as much as it is.
Getting those otherwise cold relationships and getting a foot in the door.
It's difficult to do where clients are sort of entrenched and existing relationships and kind of pricing you're way and there is hard to do we're feeling really really good success with that our win rates. It's interesting our win rates against our competition that typical household names has.
It has not have not gone down it's still in the kind of mid sixties around 60% to 65%.
And we expected as we increased capacity in sales.
That you would naturally expect that to come down as we got more at bats, but the reality is once we get our incredible talent out in front of clients and that sales process the win rates stay high so.
Which again is an encouraging sign about the sustainability of our current growth rates if not acceleration.
Okay, Great and then.
Years ago, you have to kind of talk in the context of your solution area.
Can you give us some insight into what you feel are some of your largest solution areas currently or maybe the fastest growing solution areas for the business and thats important and things like analytics consulting custom product development.
Types of buckets.
Yes, it's interesting.
The mix has stayed fairly stable so there's not any particular sort of runaway.
Even necessarily decline foreign away custom App Dev remains number one.
Keep in mind that that.
Vast majority of the time, when we're delivering for our clients, it's really a multitude of solutions. So when we're doing custom app development.
Almost every engagement analytics involved there's integration involved in those are we sort of measure those as separate services, but in reality. They all fit together. So so the mix has stayed.
Similar on again on a relative basis custom active again continues to remain very very strong.
We are seeing more opportunities with some newer technologies, maybe would have considered a little more niche in the past.
And newer platforms, but I still think custom App Dev.
It remains.
Kind of our bread and butter and like I said the things around that.
More complimentary probably to that than anything some of them standalone, but it all really fits together like a puzzle.
Okay. Thank you next quarter.
Thank you.
And we have a question from the line of Quinn.
From Jpmorgan your line is open.
Hey, Thanks for taking my question and nice quarter.
So you talked about.
Finding lots of clients 100, plus clients this quarter.
Then.
<unk>.
Pipeline is strong.
Price increases.
Your guidance is it fair to say that you would not see.
Adverse impact from potential macro slowdown in your.
Business at all maybe in the sales cycle or any with any vertical are you seeing any signs of slowdown at all.
That business.
I would say no not at not at the moment and obviously, where we are.
I'm aware of the.
The macro environment and are always nervous about that.
Gosh, if you look at our metrics when you look at our pipeline.
There is no indication there the year over year weighted pipeline deals at 50% and above.
Is phenomenal I mean, it's.
To the best it's ever been and I'm talking about the year over year comp.
It is probably the best it's ever been both obviously in absolute dollars, but also as a percentage so.
At the moment, we're not seeing that.
Clients ebb and flow in terms of their budgets some clients.
I think it's a broad macro thing I think it's more again on an individual client by client basis.
In a broad sense knock on wood, we're not seeing that at least not yet.
Understood not expert does yes, that's very good actually.
And then.
Youre subcontractor mix slowed on a sequential basis little bit ending headcount was about the same as average head count.
Reading too much into it or should we expect some sort of slowdown in.
Contact that mix over the near term and what does that mean for margins.
Yes, we would like to do.
<unk> the sub number down.
By design, we prefer to have full time employees and we leveraged subcontractors.
Valuable.
Asset, but we leverage them.
When when we have a unique skill set that we don't necessarily have a long term need for or is flexible capacity.
But yes, I mean, we feel very confident right now so our preference would be to hire full time employees.
And reduce.
The number of subcontractors, both absolutely on a relative basis.
But this market environment cutting environment at a point that you can.
But can you produce that subcontract that makes high most people.
Morning, everyone instead of relying on for contractors, yes.
Yes, I think youll see that.
As I mentioned earlier, what's not showing up in those numbers is the large groups that were bringing in in Q2, particularly the.
May graduates that would be bringing in.
Yes, I feel confident that the market will allow us to do that were having really really good success differentiating the business.
Beyond.
Beyond our compensation and benefits.
We have attractive employer employees like a deal what's a good culture.
Uh huh.
Very collegial and that was the greatest breeder Cory professional.
I appreciate it thank you thank.
Thank you.
[noise].
And your next question comes from the line of Vincent Colicchio from Barrington Research. Your line is open.
Okay.
Yes, Jeff you had mentioned in your prepared remarks.
Some some large deals youre going after.
And.
I missed the size.
You could clarify that and also I'm curious if the average deal size is increasing that pipeline.
The answer the second question is yes definitely.
It does it is not like dramatic quarter over quarter, but we definitely add a few percent.
If not may be 10, plus.
To that number pretty much every quarter.
And yes, what I said was that we would have 200 deals over 200 deals that are seven figures plus so $1 billion plus.
That's in the pipeline or.
Youre working on and percent, yes in pursuit.
Fairly evolved.
Okay.
And.
If we take out the.
The relatively large healthcare.
Deal that comments broken about.
I'm curious how is the overall health of the <unk>.
<unk> care business.
The mix has declined and I heard from some of that.
Due to burn out of employees from health care providers are looking to minimize change I'm wondering if that's impacting you at all.
Yes, it's a good question.
Actually think our healthcare business is really really healthy keep in mind that we've had a long standing large relationship there that we're still in the process of winding down.
That saving a little bit of an impact on that but we're actually seeing it sort of turnaround now if you look at bookings.
In Q1, the bookings were.
<unk> higher than revenue growth.
In Q1, so I think we're going to see that trend reverse.
And yes, I can understand on the provider side the challenge but.
These folks both provider and payer are still so far behind the curve.
In terms of technology that you know I still think there is a kind of a must spend.
And maybe even more pressure on the provider side than on the payer and we're seeing certainly.
Digital transformation is in most industries in health care is no exception as being a top priority, so even where they may be reducing budgets elsewhere.
They are still spending on that and in some cases interesting your observation about the employee.
Burnt out or our employee health and mental health maybe.
A lot of the digital transformation work that we're doing is actually designed to make their lives better. So so I feel pretty good that there's going to be a good stable base of demand there first.
The foreseeable future.
Thank you and good quarter.
Thanks Vince.
And again as a reminder to ask a question.
Please press star one on your telephone keypad again Thats Star one on your telephone keypad you. Our next question comes from the line of Jack Vander <unk> from Maxim Group. Your line is open.
Great. Good morning, good morning, Gents congrats on the continued execution.
Maybe a question for Jeff.
And Paul.
Can you touch on gross margin and.
ABR, both onshore and offshore are increasing.
Do you see a similar gross margin and AVR profile across all your various onshore offshore teams are there differences and then are these recent increases linear across the groups our earnings growing faster than the others and for whatever reasons.
Yes, good question.
In terms of the margins, yes, the the rates and client associated costs are lower in.
In India.
Dan in Latin America, but the margins are fairly consistent with them.
Five 5% five points, so maybe it's somewhere around the 50 to 55 range.
We are seeing an increase in ABR.
Standing out in some of the more recent acquisitions that we've done in Latin America, where we've been able to introduce different types of accounts, there with different kinds of relationships I would say.
Actually driven so a lot of that.
Some of that 13%.
Skewed.
It's not even really in our organic number yet because a couple of these haven't anniversaried yet.
But we've managed to drive rates, they're up in the kind of 15% to 20% range. So.
I would tell you is Latin America is leading the way they were probably a little bit under pricing when we did those acquisitions and.
That is rapidly changing.
That's great color.
Appreciate that and then I'm sorry, if this has been mentioned like twice, but remind me of the number of seven figure deals you're pursuing currently.
It's over 207 figure plus yeah.
Okay and then just one last question is on the win rates you mentioned those are remaining strong around 60%, 65% overall.
Yes.
Can you maybe just talk about the win rates across the size of deal. So whether it is not considered a large deal and then there are deals over 500 K now now the seven figure deals is there any sort of variance across wind deal of win rates and what your expectation for when rates are.
Yes, we do look at that I don't have it in front of me now, but when we do sales analysis Thats one of the metrics we look at.
I would say it but theres a lot of variability there and a lot of our relationships, particularly those new ones that I was alluding to where we're actually able to open up doors a lot of them do start small.
<unk>.
Again, as an opportunity to get our foot in the door and shine is what we do at the same time, we have more and more of these days than ever before.
We do it we are able to get in to deals that are sometimes multiple seven figures, we talk about <unk>.
During 2020, we initiated with the client at around $25 million. So.
So there are those occasionally but.
It still is a good mix I would say there is not.
Kansas sit here and say gosh $750000 deal closes 80% of the time.
Or are our win rates are 80% versus 40 somewhere else.
Got it very helpful. I appreciate the color I'll hop back in the queue.
Thank you.
I am showing no further questions at this time I would like to turn the call back to Jeff Jeff Davis for further comments.
Alright, well that obviously concludes our call I really appreciate everybody's time today as always and as you can see.
More momentum than ever really really a great quarter, great start to the year and Super optimistic about not just the rest of this year, but.
The outlook beyond that so I appreciate your time and look forward to seeing you all again in 90 days. Thank you.
Okay.
Thank you and this concludes today's conference call. Thank you all for joining you may now disconnect.