Q1 2022 Genpact Ltd Earnings Call
Good day, ladies and gentlemen, welcome to the 'twenty to 'twenty two first quarter Genpact Limited earnings Conference call. My name is RJ and I will be your conference moderator for today.
At this time all participants are in a listen only mode.
We will conduct a question and answer session towards the end of this conference call. As a reminder, this call is being recorded for replay purposes. The replay of the call will be archived and made available on the IR section of Gen packs website I would now like to turn the call over to Roger Sachs head of Investor Relations.
That Genpact. Please proceed.
Thank you Jay and good afternoon, everybody and welcome to our earnings call to discuss results for the first quarter ended March 31st 2022, We hope you had a chance to review our earnings release, which was posted to the IR section of our website Genpact Dot com speakers on today's call are Tiger <unk>, our 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 an update on our strategic initiatives. Mike will then walk you through our financial performance for the quarter as well as to provide our current thoughts on our outlook for the full year of 2022.
Tiger will then come back for some closing comments and then we will take your questions. We expect the call to last about an hour.
Some of 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 .
Financial measures that we believe provide additional information to enhance the understanding of the way management views. The operating performance of our business you will find a reconciliation of these 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 first quarter 2022 earnings call.
We had a great start to the year with top line growth adjusted operating income margin and adjusted diluted EPS all coming in ahead of our initial expectations.
Our investments in our strategic choices have positioned us to.
Navigate the many challenges in this macro environment.
We saw another quarter of strong demand for our data and analytics digital and consulting businesses makeup transformation services I was going to ask.
Continued strength in our intelligent operations business.
For the first quarter 2022 we delivered revenue.
Revenue of $1.1 billion up 14% on a constant currency basis.
<unk> revenue of $973 million up 15% on a constant currency basis.
Adjusted operating income margin of 15% expanding 60 basis points from the fourth quarter.
And adjusted diluted earnings per share of 60.
2% year over year.
The macro environment continues to be challenging with inflation rising to a 14 year high a massive spike in energy prices ongoing disruption to supply chains are hot talent market and the Ukraine, Russia Award to name just a few.
Our eastern European delivery footprint, which is centered around Romania, Poland and Hungary with approximately 7000 employees I have not experienced any operational disruptions.
We're also not seeing any material change in client behavior as it relates to our global business.
Demand remains healthy on the backhaul and the momentum we saw last year, particularly as every company such as for solutions to help them undertake the transformation needed in these times.
Bookings reached our highest first quarter level since quarter, one 2019, with 60% being annuity based deals and 50% sole sourced.
While we don't typically share color on quarterly bookings given the environment. We thought this was a good signal to share.
This included two large engagements with total contract value greater than $50 million, both in the banking and capital markets industry.
During the quarter. We also added 32, new clients up from an average of 24, new clients per quarter in 2020 one.
Both our quarter end pipeline and inflows during the quarter reached all time highs copper.
Coupled with robust bookings momentum. This is a clear indication of the expansion of our total addressable market and differentiated value proposition for our solutions and services.
Global client revenue was up 15% year over year on a constant currency basis.
And by continued strong performance from our analytics digital and consulting businesses that make up prompts relation services.
Which grew 29% year over year and now represents 37% of total global client revenue.
On the back of Drams from recent wins intelligent operations grew 7% and represented 63% of total global client revenue.
Global client revenue growth was broad based across all of our chosen verticals, including double digit growth in consumer goods retail life Sciences, and health care High Tech banking and capital markets and insurance.
Revenue from our GE businesses in the first quarter was up 2% as.
As you mentioned last quarter, we continue to believe that GE separation into three independent companies provides us with opportunities to win new work in support of the spinoffs.
Demand for our analytics digital and consulting services that makeup transmission services is being fueled by the strong momentum we are seeing across four specific service lines.
Sales and commercial operations supply chain management financial crimes, and risk and financial planning and analysis.
In each of these areas, we leverage technologies like AI machine learning and the cloud to process complex data sets and very dynamic analytical models that then drive insights.
We then use these insights to drive actions that deliver meaningful business outcomes beyond just cost productivity.
You're going to be used for service lines were up 47% in the first quarter and their importance to clients transformation agenda as in these times underpins the significant expansion of our pipeline.
For example in financial crimes and risk, we are leveraging our cloud based financial crime and regulatory compliance solutions.
I've been a R E <unk> Digital's techs.
Prologis based solutions to enhance the customer experience provided by our banking clients.
So we're seeing great traction with new age Fintech, where we are helping them deal with critical issues around customer fraud, and risk management and providing scale to their operations as they grow.
This was highlighted by the two large deal wins out of a French I referenced earlier all of this is driving growth in our banking and capital markets vertical.
Our global client analytics business grew a very healthy 40% Euro young.
Let me provide a few examples of how we are helping clients use data and analytics for strategic decisions and delivering improved outcomes.
We are working with a large luxury consumer goods brand to significantly improve its data quality by aligning key performance metrics for its online and physical channels and building models to optimize inventory levels.
Additionally, our right point experience team is helping to elevate the consumer experience on e-commerce websites by providing updates to product marketing to improve the client's ecommerce growth by up to 15%.
For a large global insurance company, we've developed an AI and machine learning model that leverages, both internal and external data to quickly and accurately assess risks and prioritize policies to be underwritten to minimize lost opportunities.
Our solution significantly reduces the client's response times from days to ours and is expected to drive an incremental low double digit growth for the client.
For a large global sporting goods brand, we build complex machine learning models, leveraging a vast amount of consumer transaction and demographic data to determine the best price promotion assortment and inventory levels to create personalized engagement with consumers.
Led by our inquiry around big data and analytics team. This solution is increasing the clients direct to consumer market share while improving the profitability.
All of these solutions that drive tangible impact beyond just cost and productivity are replicable across other clients.
We continue to see momentum in driving commercial models based on outcomes that we deliver instead of FTE based pricing alone.
Meaning deeper strategic alignment with our clients.
We are bringing our teams with deep industry and functional domain expertise together with data scientists and digital technology experts to deploy specific solutions that add value to our clients in these times.
Here are three specific examples in there.
Response to the inflationary environment, we have developed a suite of services and solutions.
All leveraging data and analytics to help clients drive proactive actions in sourcing and procurement sales and marketing and supply chain to bolster their financial health.
Solutions and tube supplier privatization and consolidation pricing and promotion optimization strategies and more accurate dynamic and real time supply and demand forecasting.
Russia, Ukraine War enjoyed its third month, we are engaging with clients on cybersecurity issues business continuity planning and geographic diversification of operations given our extensive global delivery model.
And thirdly, most importantly, the war for talent has left companies searching for creative ways to fill critical roles.
Our center of excellence hubs enable clients to access our highly skilled global workforce in sought after areas, including data scientists and digital practitioner that also have deep domain expertise and services, such as finance and accounting supply chain management and financial crimes and risk.
All of this drove a significant expansion in the size of our global client relationships during.
During the 12 months period, ending March 31, 2022 we grew the number of global client relationships with annual revenue over $5 million.
132 to 149.
Clients with more than $25 million in annual revenue increased from 24 to 30.
Clients with more than $50 million in revenue increased from 11 to 12.
Our large client relationships are growing faster than the company average as we open up new buying centers and bring more end to end solutions to them.
The passion and dedication of our global teams to deliver great service to our clients continues to be central to our success.
Our investment in the learning and development of our talent not only helps us access in demand skills, but also provides them with a critical skills needed to build that careers in a changing world.
During the first quarter, we welcomed almost 15000, new team members, reflecting the power of Genpact brand in a very competitive market.
During the first quarter. Our employees also completed over 2 million training hours, leveraging our online on demand learning platform genome.
This include Dark data bridge program that cranes employee and in data analytics decision, making and storytelling capabilities to drive actionable insight generation for clients.
<unk> was recently recognized by IDC as an industry, leading data literacy program.
Scale that could be one of the largest of its kind.
We have so far trained and certified more than 50000 employees through this program.
Using our internal talent match platform, we successfully redeployed or 5000 newly skill talent to support the needs of our clients.
Our attrition rate in the first quarter remained at 33% in line with the rate, we reported or the prior two quarters.
With our ability to rescale redeploy on hire at scale, we continue to see no impact on our client engagements all the successful conversion of new opportunities.
We believe this is a critical competitive advantage, particularly as talent supply pressures across all industries have led to clients needing partners like us more than ever.
As we continue to the yard we expect our overall demand remained robust led by data analytics and digital businesses.
We are also actively engaged with clients on pricing adjustments related to the current inflationary environment and continue to make steady progress to date.
These are complex conversations that take time, but also open up possibilities to drive more value for our clients and to deliver a win to win win win outcome for everyone.
With that let me turn the call over to Mike for a detailed review of our first quarter.
Thank you Tiger and good afternoon, everybody soon and I'll review, our first quarter financial results and provide an update on our full year 2022 financial outlook.
Total revenue was $1 1 billion up 13% year over year or 14% on a constant currency basis, driven by better than expected performance in both global client and GE revenue.
Global client revenue, which represents 91% of our total revenue increased 14% year over year or 15% on a constant currency basis, largely driven by continued strong demand for transformation services that was up 29% in the quarter as well as a 7% growth in intelligent operations.
Primarily related to deal ramps.
<unk> revenue increased 2% year over year, primarily due to short cycle project work during the quarter.
Adjusted operating income margin was 15% down 220 basis points from first quarter of last year as a reminder, a higher than normal adjusted operating income margin levels. During the first quarter of 2021 largely resulted from lower travel expenses and the deferment of certain planned R&D and <unk>.
And marketing investments to the second half of the year, reflecting the impact of COVID-19.
The better than expected adjusted operating income margin performance during the quarter was primarily driven by strong top line performance across our businesses gross margin in the quarter declined 70 basis points year over year to 36, 1%. However, it increased 130 basis points sequentially from the fourth quarter.
This quarter on quarter expansion, largely due to positive impact from scaling up investments made during the fourth quarter related to deal activity and the benefit of improving pricing Tiger referred to earlier.
SG&A as a percentage of revenue was 22, 2%.
100 basis points year over year, largely due to the impact of the investments in sales and marketing and R&D that we dialed up in the latter part of 2021.
Adjusted EPS was <unk> 60 up.
Up 2% year over year from 59 cents in the first quarter of last year. This one cent increase was primarily driven by a one cent impact of lower share count.
Lower taxes of one cent, partly offset by a one cent impact.
Significant.
Currently lower operating income.
There was no material impact on adjusted EPS relating to the $4 million FX Remeasurement gain recorded in the first quarter given our adjusted EPS results in the same quarter last year included a slightly lower $3 million FX remeasurement gains our effective tax rate was 23, 5% down.
From 24, 1% in the same period last year, primarily due to new lower taxes in certain jurisdictions, we operate in in the fourth quarter of 2020, the first quarter of 2022 as compared to 2021.
Turning to our cash flow and balance sheet during the quarter, we utilized $114 million of cash from operations.
The use of cash versus generating cash as typical in the first quarter of most years. However last year in the same period, we did generate $77 million of cash which was not typical due to higher adjusted operating income as well as improved days outstanding and overall working capital levels as a reminder, during the fourth.
Third quarter days sales outstanding benefited from higher level of short cycle work boost booked in the quarter has a higher than we anticipated.
On a year over year basis, our days sales outstanding improved to 82 days compared to 84 days during the first quarter of 2021.
As a typical pattern, we expect these outstanding to improve sequentially each quarter as we continue to believe Dsos will exit the year in the high 70 day range cash and cash equivalents totaled $862 million compared to $899 million at the end of the fourth quarter of 2021, our net debt to EBITDA ratio.
For the last four rolling quarters increased to one five times from one one times a year end relating to general cash management.
With the Undrawn debt capacity existing cash balances with Youtube ample liquidity to pursue growth opportunities and execute on our capital allocation strategy. We expect net debt to EBITDA ratio remain the preferred range of one times to two times on April 1st we repaid $350 million bond that had a two.
Point of 3.7% given the current volatility in the market. We were very pleased that almost 80% of our total debt is fixed rate.
During the quarter, we executed on we executed on a program to a more regular cadence of share repurchases and took advantage of the attractive valuations of our shares and bought back one 6 million shares for a total cost of $76 million or on average 46061 cents. We also paid dividends totaling 12.
$3 million.
Capital expenditures as a percentage of revenue was approximately 1%. We continue to expect this percentage to be in the range of approximately one 5% to 2% 2% for the full year 2022 with higher spend during the remainder of the year as employees return to the office as part of a hybrid delivery model now.
Now Roger.
An update on our full year outlook.
Given our strong start to the year, we now expect total revenue to be between four $4.325 billion and $4 4 billion, representing a year over year growth of 8% to 9%. This incorporates the unexpected larger headwind currency headwind and we provided our full year outlook.
In early February given the highlight heightened market volatility. We now expect total revenue growth between nine and 11% on a constant currency basis up from our prior full year outlook of eight 8% to 10%.
Global client revenue for 2022 are expected to grow in the range of 9% to 11% or 11% to 13% on a constant currency basis up from our prior outlook of 8% to 11% or 9% to 12% on a constant currency basis.
There is no change to our prior full year 2022 outlet for G of approximately 5% year over year decline.
Given the uncertain climate, we continue to expect our full year 2022, adjusted operating income margin to fall within the range of 16% to 16, 5% as we get better visibility as the year progresses, we anticipate tightening this range, we'd fully expect her job adjusted operating income margin will expand in line with their.
<unk> over the medium term.
We now expect adjusted earnings per share for the full year 2022 to be between $2 60, and $2 76 up from our prior outlook of $2 53 to $2.71. This reflects increase in the lower end of our range of the outlook.
The impact of the impact of impact from first quarter, FX Remeasurement gains I referred to earlier and our assumptions related to share repurchases for the year. Lastly, we continue to forecast cash flow from operations of $600 million for full year 2022, with that said, let me turn the call back over to Tiger.
Thank you Mike.
Our strong start to the year reflects our resilient business model and relevancy for our clients in the market.
Our acquisitions of Hulu digital and Carol have integrated well and bolstered our capabilities in digital experience and data and analytics bought critical areas driving end to end digital transformation for clients.
The other targeted acquisitions, we have done.
The right point and experience something digital and digital commerce, becoming in supply chain management and risk and with in financial crimes have all fuel growth in our focused service lines and capabilities.
Our business is primarily made up of annual fee based revenue streams derived from designing transforming and running mission critical operations for clients in our chosen industry verticals.
The more we become a trusted partner of choice. The more we can help our clients drive change so they can better compete in their markets.
We're not reducing fraud, optimizing inventory, creating overall offerings from efficiencies to increase profitability.
Providing a better employee or customer experience to help grow our revenue we help clients navigate the many challenges associated with economic cycles.
We are proud of our progress on environmental social and governance.
We recently published our 2021 sustainability report highlighting some of this progress, including 41% global generic diversity, a 44% reduction in scope, one and scope two emissions since 2017 exceeding 10 million learning ours by our employees or the second year in a row and 11.
<unk> lives in packet to our corporate social responsibility initiatives.
We continue to be recognized for our commitment to ESG initiatives.
Thrilled to have been named to the Forbes list of best employers for diversity 2022 demonstrating our ability to foster a diverse equitable and inclusive environment, where our employees can thrive.
We've also been named that was most ethical company by atmosphere for the fourth time, recognizing our commitment to the highest levels of ethical behavior aligned to our purpose.
We know building a more sustainable world is complex and requires partnerships, we will do our part as a company, but recognize the tremendous opportunity we have to make disproportionate impact by helping our clients do theirs. We are excited about our opportunity to leverage our industry knowledge strength in data and analytics and deep familiarity.
Without climbs processes to help them make progress on their own ESG journey across areas like responsible sourcing supply chain optimization and financial crimes just to name a few.
We believe he is he's a lever to drive transformation that can create a competitive advantage for our clients, while also creating a positive environmental and social impact.
Before I close I am excited to announce that we will be holding an in person investor and analyst day in New York City on June the 20 Cod, we will present Genpact vision for 2026 outlining our strategic blueprint for success and financial outlook.
Details on how to register will be available. Shortly we look forward to seeing you all there with that let me turn the call back to Roger.
Thank you Tiger, we'd now like to open up the call for your questions RJ can I ask you to please provide the instructions.
Thank you.
Ladies and gentlemen, if you would like to ask a question. Please press star followed by the number one on your Touchtone telephone again that is star one let me draw. Your question. Please press the pound or hash key they standby, while we compile the Q&A roster.
Your first question comes from the line of a key.
Keith Bachman with BMO Your line is open.
Hi.
Clark.
Thank you for taking my question.
I wanted to ask about the pricing environment to your question.
He said you are going back to clients to dish gosh pricing to offset wage inflation.
Inflation pressure can you discuss.
What are the opportunity now version a push in the next couple of months to divest to be here to discuss pricing and you mentioned you saw some impact to gross margin.
In the first.
First quarter.
On pricing, how would you expect that cadence to develop throughout the year given.
Still relatively early on in conversations thank you.
So I'll start it off and then I'll have Mike.
Like add to what I'm going to say so we just started.
<unk>.
Late last quarter, and then late late fourth quarter, and then through the first quarter.
Our our relationships with our clients are long term relationships.
And we understand the value that we provide to our clients.
We are very clear back in many of these conversations our objective is to actually tackle the big opportunity of driving value to our clients together. Our clients are also facing a similar inflationary environment and a similar hawk talent market. So they also understand that the skills.
Our needed to deliver that value comes at an inflationary price. These data that allows us the opportunity to sit down and have those conversations but as I said in my prepared remarks, they take time.
They require an alignment of goals.
And we believe that all of the yard and actually into next year, we will be able to navigate that and the early signs of the early steps we have taken with some clients seem to tell us about her journey of Iran. The impact on margins for the yard Mike maybe you can comment on that until the balance sheet.
First address.
The pricing adjustments that we received in the quarter were relatively de minimis they'll compound upon themselves as we move through the year as Tiger alluded too it'll even carried forward into the following year. So it has real no really no impact on the margin in the current quarter. It is potentially there's obviously a lot of puts and takes what will affect us on a go forward.
Basis.
Okay. Thank you very much.
Thank you.
Your next question comes from the line of Dave Koning with Baird. Your line is open.
Yeah, Hey, guys, great job just across the board.
And you know maybe first Nevada he has yeah you're welcome.
I guess first of all looking at verticals I know last year, the BFS side vertical struggle, a little bit and you talked about that through the year, but it sounds like a return to really good growth.
Maybe discuss a little bit of kind of what kind of catalyze that back into really good growth.
No. So so Dave actually a great point.
Last year, we had said there was one particular client and.
In the asset management business that.
Was restructuring themselves and as a result.
Our relationship alternate restructured with them and that had a full year impact that actually was felt even in the first quarter of 'twenty. Two when he took the data back of that as that has to taper at all or.
Core growth in the banking vertical is coming through.
Even in the last couple of quarters in our earnings the prepared remarks, we had talked about the momentum building up in our pipeline and in our in our bookings for the banking vertical we're now beginning to see that come through as the impact of that restructured client.
<unk> undertakes.
And it takes up a lot.
Yes, I would just like to add to it we'll fully lap it actually not this quarter, we'll fully lap at the end of the second quarter. It is going down literally so on a complete on an apples to apples basis will really be put third and fourth quarter.
Nice had one purpose.
The other thing I would say is just just in one.
One of the service lines that we talked about financial crimes risk anti money laundering <unk> see.
The World we are in.
In a world, where a number of the financial institutions across the globe are dealing with having to.
You know use technologies.
Average data and analytics to deal with.
Right.
Compliance to regulations as well as do that in a manner, where customer experience and employee experience.
Is really good part of the problem that the environment in the banking environment is harder that typically those types of compliance situations experience was not good the ability to leverage technology, which is what we bring to the table makes a big difference.
Yeah, No that's really helpful.
And I guess the second question just on gross margins again it.
It seems like usually when attrition spikes and when inflation hits.
There's kind of an immediate.
There's kind of immediate hit but then it sounds like pricing comes a little later is it fair to say you know that's maybe a six to nine month lag from when all this started to when this pricing now starting to kick in in that by the second half your gross margins can actually be up year over year again as you automate just kind of deal with the pressure.
Yeah, I think that's probably a fair statement it would probably more like nine to 12 months.
As we start to get these these adjustments at the beginning of the first quarter. So yeah. It would flow through there.
Companies some of the higher than expected.
Replacement costs that we're dealing with right now compensate us for that.
And the other thing I would say is you know.
We also have to recognize that the inflationary environment continues at the moment.
They haven't abated.
And therefore, we have to be.
Cautious in our.
Forward looking view on that because.
Depends on how well it plays out.
And while we continue to work with our clients.
On getting to the right price point for all of the services that we provide.
Gotcha, Yeah, well, thanks, guys great job.
Good day.
Your next question comes from the line of Maggie Nolan with William Blair. Your line is open.
Hi, guys. This is jesse on for Maggie Congrats on the quarter.
We wanted to dig into the talent.
We wanted to dig into the talent environment, you guys talked about attrition staying stable over the past two quarters, but are you seeing this higher in certain geographies.
Yeah. So so overall, it's a stable 30%, but obviously when.
When you when you slice it into different buckets, let's start with <unk>.
We see attrition to be at that elevated level more at the lower levels of the organization and lowest skill levels of the organization then when you get to higher skills.
Leadership levels in fact at the higher skills and leadership levels, we've actually seen okay.
Attrition levels, not yet reached the pre pandemic levels, which is fantastic.
Second as we've seen attrition in the customer care call center type of environments.
In the U S and in Philippines, Spike up and.
And part of the stability that we see in.
In overall attrition has within it and increase in attrition in those two geographies and those types of skills and one of the special causes in Philippines is the government's mandate to come back to the office for all service providers, which all of US are over the next few months complying.
And that is leading to angst amongst some employees are there's attrition in the whole industry is dealing with that.
And then of course, I would say a niche technology skills and niche data science and data analytics says, it's no surprise that as a very hot skill and attrition levels continue to be.
You know as high as it was in the fourth quarter are continuing into the first quarter.
Understood and then a quick follow up followed by my next question, how many employees does genpact hub in the Philippines and then my second question was how has your view on wage inflation changed since the big.
Getting of the year.
So put it means we have 5000 employees.
It's up it's a very strong sector for us however, it's not as big as some of our other centers.
Including I called out Eastern Europe , where we have 7000 employees across the country. So good excellent service from Philippines, but 5000 employees out of the 110000.
<unk> thousand and the company.
Wage inflation in the first quarter.
Again broadly steady.
Actually very steady across almost all skilled cohorts.
Few skilled cohorts have actually come down they seem to be beginning to trend down they are still hard at elevated buses.
Prior three or four quarters back.
We haven't seen any particular skill set where its gone in Q1 at alere at a rate higher than the fourth quarter.
Awesome. Thanks for taking my question.
Thank you.
Your next question comes from the line of Ashwin <unk> share of a car with Citi. Your line is open.
Hey, Tiger Hey, Mike.
Yes.
<unk>.
Good quarter congratulations.
On that.
Yeah.
I wanted to kick off with the.
Tiger you mentioned large relationships growing at a faster pace.
Than than than the average the average company.
If you could perhaps maybe.
Disaggregate that statement you talk about what's the commonality across the large relationships what's the.
The the remaining opportunity if you will and as you sign these.
Expansions.
Do they.
Do they flow through.
Pretty seamlessly and quickly into into revenues is that a good expectation if you could comment on a few of those things.
Lots of questions that Ashwin and actually very good question, So let's talk with.
Typically.
The typical characteristic of these large relationships that not all running large relationships grow but a number of them do and they typically have a few characteristics. One if you just think about the world. We are in these are enterprises that are driving change. These are enterprises that are transferred.
<unk> themselves to become more competitive. These are enterprises that are undertaken journeys are changing their business models, leveraging technology is going to the cloud leveraging data and analytics.
Most of those things. So therefore, they are the types of organizations that work with partners like us and others to accelerate those journeys, particularly as all of us over the last two years et cetera.
And given the range of services that we now have.
We've always had as you know deep strength in finance and accounting deep strength in core financial services operations be it banking or insurance, but we now have significant strength in financial crimes and risk in supply chain in trade promotions and order management in sales in commercial.
Operations.
And you connect those dots you open up different conversations on a range of topics and they all ultimately do connect app.
That's one big difference today versus four or five years back that allows us to deliver excellence to clients deliver value to clients and continue to grow the relationship with different areas.
Second is the way some of these stocks.
In the old days it used to start with we will outsource this operations for you and run it for you.
These days it doesn't have to stock back very in fact, most often it doesn't start that way. It starts with can we advise you sit down and talk about the right target operating model the right technologies to leverage the right way to align your data clean up your data how do we take our.
Data that resides in multiple technologies and move them all to the cloud. So that then we can orchestrate everything on the cloud.
Then subsequently often leads to.
What one would call in the old days of BP all.
Our intelligent operations deals so the nature of these relationships has become multiple buying centers.
They become transformation services, often stock and then followed by intelligent operations, which then leads me to the last question you had bridges.
These are not things that you would expect in a particular client to grow from start to finish.
Even within the same year.
These are multiyear journeys. So once you start one of these journeys a decline you would consistently go down the path of growing with that client is already keep adding value to their clients, which is what makes this so exciting and then if I end with talking to new clients that we signed during the quarter.
We are so excited by the fact that those tend to clients represent.
The beginning not all of them, but some of them off two or three years later, the journey undertaken but some of our large clients today.
By the way. They also include a number of what I would call new age clients that are in hyper scaling more and there are growing so rapidly and our value proposition. There is to help those clients undertaking those undertake the scaling journeys and being able to deliver the growth that they aspire.
Sure.
And in the process, we are an establish a big relationship with them. We've seen many of those play out over the last five years in broadly what one could call the fintech and short deck E Commerce.
Hi Tech space.
Understood. Thank you put all of those details.
I wanted to also ask about return to office, a might've missed it but where do you stand from a.
Peter go office percentage perspective.
If there is a <unk>.
Financial model expectation, including.
Well, the Philippines perspective.
Literally push push to do return to office.
Yes, so right now we're at the beginning of Richmond Office is still relatively low from where we are the financial outlook and the models that we have going forward in the guidance does incorporate a return to office for.
Geographic area by geographic area, but going back to what I think our return to office is sub 20% at this point now in aggregate.
Great.
Oh sure Lon.
Yes, sorry.
None of the Philippines impact I just wanted to ask.
That also in the Philippines, we are in the process of progressing.
Two the 40, 50% Mark.
The times, where we think for the next few years it'll be remote as long as we can continue to bring the teams back to office with some cadence. So we can <unk>. We can do training. We can build team dynamics, we can sit down and talk to innovation talk with ideas do hackathon and all of those are already doing in many of our.
Operating centers across the globe. So it's gonna be a little bit about the right size to fit the right situation with the right line and that's exactly the extra that are going through with every time.
Take your dog was gonna want to thank you.
<unk>.
Ladies and gentlemen, as a reminder to ask a question. Please press star followed by the number one on your telephone keypad or a touchtone telephone again that is star one to withdraw your question. Please press the pound key.
Your next question comes from the line, Brian Bergen with Cowan Your line is open.
Good afternoon. Thank you wanted to ask bookings so the British commentary is really good to hear it sounds like he converted a lot a lot of opportunities. So I'm. Just curious anything you did differently around sales practices salespeople were investments there that that drove this you know I think it's a typical that Ah Ah first quarter, what would be so strong here. So.
Curious what you think the key drivers were for that conversion.
O'brien. Thank you I don't think we did anything special in quarter one [laughter].
No we didn't do anything special for one I think it's a function of tearful things, while we had a very strong bookings, Florida and water for we did sing when we talked about the fully 2021 that are influencing pipeline, even as bookings are strong, but did you need to be strong at that time.
And that just momentum continued through.
Again I go back to its a reflection of the war of urine and it's a reflection of the fact that I totally.
Jordan addressable market and we used to have this now for probably.
Four or five borders are total addressable market. We believe has grown from what it used to be.
Four or five years back the range of services that we have and the fact that a number of lines too in the past may not have thought about change and may not have thought about a partner to to have in that process of change given the requirement of speed and given that a prominent in brief.
New technologies are all talking about partnerships and talking about change and talking about it now so I wish I could give myself credit and give our team credit only there's no question that I think we had <unk> I think the fact that we often enter these conversations with change agenda digital.
Technology has all the acquisitions, we've done I have to say and I named a number of them in the recent few years I've made a big difference to the way we engage with our clients. Some of the examples that game where are right point experienced team comes in and helps along with our team really improve the experience of users and customers.
That does make a huge difference on the enquirer team comes in and finds a way to orchestrate data to Denver insight for a client who is trying to build on a new e-commerce business and they're really massive global business. So I think it's a combination of all of them.
Okay. Okay makes sense and then the follow up here on on the client repricing. So you said steady progress on that front. He gives maybe a sense of the mix, where you have achieved the pricing judgements versus the next that you're still working on.
It's too early to say, Brian <unk> as I said these are.
You can think about our business.
Let's let's leave the shorter cycle portion of our transportation services business and as as you've described before even though transmission services business, particularly analytics, which is the fastest growing off our transmissions houses business has a significant <unk> component that so all of that annuity component as well all our intelligence operations on long term contracts.
With Burton inflation, a justice what <unk>, what we are talking to clients about is given the current environment given the need for the right talent to be engaged in driving value for our clients and given that our clients also understand.
The situation that they themselves fish.
In their market place I think we are having those conversations but it takes time, so I don't think any meaningful number would.
Could it be given right now so this is going to be a fully are on into next year.
Yeah, we're making progress as we move forward, but it was not material in this particular corner, but we have line of sight to keep on building upon what we're doing and we are pretty high expectations and we're working hard.
Okay. Thank you.
Right in there.
And there are no further questions at this time I would now like to turn the call back to Roger.
Thank you everybody for joining us today and look forward to speaking you with again next quarter.
Ladies and gentlemen, this concludes today's conference call and we thank you all for participating you may now disconnect.
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