Q3 2022 Ibex Ltd Earnings Call
Welcome to the IBEX third quarter full year 2022 earnings conference call. At this time all participants are in a listen only mode. After the Speakers' remarks, there will be a question and answer session to ask a question. During this session you will need to press star one on your telephone. Please be advised that today's conference is being recorded.
Good.
To note. There is also an accompanying earnings deck presentation available on the IMAX Investor Relations website at investors Dod IBEX Dot co I will now turn the conference over to your host Ms. Brittany Johnson with the Blue shirt group.
Good afternoon, and thank you for joining us today before I begin I want to remind you that matters discussed on today's call may include forward looking statements related to our operating performance and mutual goals and business.
Outlook, which are based on management's current beliefs and assumptions. Please note that these forward looking statements reflect our opinion as of the date of this call and we undertake no obligation to revise this information as a result of new developments, which may occur.
These statements are subject to various risks uncertainties and other factors that could cause our actual results to differ materially from those expected and described today for more detailed description of our risk factors. Please review our annual report on form 20-F filed with the U S Securities and Exchange Commission on October 14th 2021.
With that I'll turn it over to Bob decade CEO .
Thank you Bradley <unk>.
Good afternoon, everyone.
Thank you all for joining us today is Carl and I share our third quarter results.
I'm excited to announce that Q3 was the highest growth quarter in our company's history.
We delivered organic revenue growth of 19%.
It accelerated from an impressive 13% growth in Q2.
This continues to be driven by our Omnichannel solutions integrated with way Becks technologies and business analytics across both our new and existing clients.
Our revenue generated from new clients won since FY 16.
Those we call V P O two point old clients.
<unk> grew by its highest rate ever this quarter at 60% year over year.
And from 57% in Q2.
This strong growth is a testament not only to our ability to attract and partner with new clients.
But also.
Our strategy to expand our solutions and differentiate in the marketplace.
I'm most excited that these new customers now make up 70% of our total company revenues.
Up from 52% a year ago.
And I believe we are well positioned to continued growth above our historical 10% rate.
Our revenue growth is driven primarily by our continued success in our profitable new logo engine, which sells differentiated P. P. O two point solutions to many of the world's best brands.
This quarter, we won seven new clients for a total of 19 year to date.
And these wins span across our key verticals and geographies.
We have had an amazing success in the Fintech health Tech space.
This quarter, we had two significant wins in these verticals.
Our success has enabled these two key verticals to grow by 100% over prior year.
And now represent 25% of our total revenues.
Expanding into these verticals insulate the business from the impact of seasonality seen with some of our other verticals.
And leads to increased stability of the revenue base across the fiscal year.
We were also excelling in the digital first space.
To highlight one of our important client wins the number one job search marketplace in the World has partnered with IMAX to deliver premium customer experience support for SMB customers in the U S.
Our solution centralize their program in our English first Jamaica market.
And offered a highly scalable geographic solution for future growth.
This is an example.
IDEXX is award winning B P. O 2.0 capabilities are leveraged to deliver differentiated solutions, enabling us to displace their prior partner.
With the additional new customer wins since the quarter closed we are on track to generate approximately $15 million of in year revenue from our new clients.
And expect this cohort of new customers to generate well over $100 million in revenue in FY 'twenty three.
Another key vector for our revenue growth is expansion within our embedded base clients, where we continue to win market share.
And grow client spend by winning new lines of businesses.
New additional services and new geographies.
I'm incredibly proud in our ability to rapidly expand with these great brands.
As an example in.
In Q2, we launched in the U S with open door.
A leading digital platform for residential real estate.
To support their customers, who are buying and selling homes online.
Since the launch we quickly expanded to provide a multi G O solution.
Adds back office processes to the customer facing support while helping our client greatly improved efficiency and productivity.
Very complex process.
As a result of our new client wins and expansions we.
We have created a business where our client diversification is among the best in the industry and continues to strengthen.
Comparing to the year ago quarter.
Top five customers now represent 38, 5% of our revenue down.
Down from 49, 4%.
Our top 10 customers now represent 56% of total revenues versus 69%.
And our top 25 customers now represent 84% of the revenues down from 90%.
Our business is now driven firmly by the dominant growth engine.
However, our overall growth has been offset by the continued decline of our legacy three clients, which now represent only 19% of our revenue.
Compared to 34% in the year ago quarter.
We expect this trajectory among this cohort to continue into FY 'twenty three as a result of organic demand decline.
And the strategic decision that allowed us to replace our lowest margin business within this client group with the new higher margin health Tech industry clients.
We've been able to utilize skilled frontline agents that were previously dedicated to this client to scale in the U S. While we also expand into the Philippines with this health Tech clients.
This transition.
And subsequent ramp should be completed by early Q1.
And we project this new client to be a top five client for FY 'twenty three.
Wage inflation and labor shortages continue to deliver unprecedented challenges.
We see this amplified in particular in the U S.
We are addressing this by successfully negotiating price increases with many of our clients.
We have also been able to include Kohler provisions in several of our newer contracts that we believe will help mitigate this impact on our P&L.
However, there is another part of the story that is creating a meaningful opportunity for IDEXX.
New and existing clients are facing operational challenges and margin pressure.
From these rising labor costs.
Clients are engaging IBEX during this challenging time to develop solutions that help them overcome this dynamic.
This presents an opportunity for IMAX to demonstrate clear, our oi and efficiency gains for our clients.
We believe this will be a tailwind to our growth as clients are forced to reevaluate cost structures and contact center strategies going forward, while looking for innovative digital partners.
A great example of this was a win we had last quarter with a leading hotel brand with over 600 property franchisees.
For many years operated 100% of their contact centers internally.
Adding to their challenges and complexity is a digital transformation that they are in the process of implementing for their guests.
While wage inflation and COVID-19 simultaneously made it very challenging to operate their centers.
<unk> was able to start in Q2 with an integrated Omnichannel proof of concept launch in Jamaica that was very successful.
This led to C suite level discussions, where IBEX will take over all of their operations, including a re badge of their U S operations, along with continued growth in Jamaica, and the future launch into Honduras, which we expect to complete by October .
We expect more opportunities like this to continue to present themselves given the ongoing wage pressures.
Moving to our profitability.
Adjusted EBITDA margins improved sequentially this quarter to 14, 6%.
But continue to experience some pressures compared to last year as a result of our business growing at a faster pace.
The largest driver this quarter was <unk> 2 million increase in agent training costs associated with ramping our business to attain our very strong revenue growth.
If agent training costs held steady compared to last year.
Adjusted EBITDA margins would have been greater than 16%.
And up on a year over year basis.
We are encouraged about the outlook of margin improvements over the midterm.
The markets in which we operate are now beginning to remove social distancing requirements.
As we continue to win and onboard new programs, we expect a meaningful margin improvement beginning next fiscal year.
We also have the ability to grow revenue into our existing footprint by over $150 million.
Looking ahead, we believe we have reached our peak spending while we have built out world class capacity to sell into for our clients over the last two years.
Our free cash flow on a normalized basis, excluding working capital changes was almost $10 million for the quarter.
Up 67% year over year.
While Carol will review this in greater detail, we expect to see significantly lower capital needs going forward to support our growth and expect an inflection in our free cash flow beginning in FY 'twenty three.
Recently, the Philippines has been an area of concern discussed by several of our competitors on recent conference calls with the government's tax laws impacting margins and the ability to bring employees back to the centers.
We are pleased to report that this continues to be one of our best performing geographies.
And the tax implications for buybacks are relatively negligible.
As a result of the foresight of management to have both approved and non pez of sites.
This allows us to give our employees the choice between in center and work from home jobs without incurring financial or operational challenges.
Our competitive position in the market remains strong and continues to be validated by the increase in demand from our existing and new clients.
In regard to our capital allocation, our net cash position on our balance sheet continues to offer us a tremendous amount of flexibility when opportunities present themselves. As a reminder, our board has authorized us to repurchase up to $20 million.
Common stock and.
And we're excited to continue executing at such attractive prices.
In closing.
We are on track to complete the company's highest growth year.
As such we are reaffirming our full year guidance.
Looking forward to FY 'twenty, three and beyond we expect to sustain our revenue trajectory firmly in excess of 10% per annum.
The majority of our footprint today is operating in a socially distance model complemented with work at home.
As we move forward to a world, where we are able to resume pre COVID-19 operating models. We are in an optimal position to significantly grow with limited capex investments.
We are confident this will soon have a meaningful and positive impact on our margins and free cash flow.
We plan to share our future goals and strategic initiatives in more detail later this year.
I will now turn the call over to Carl.
Carl.
Thank you Bob and good afternoon, everyone. Thank you for joining the call today.
We continue to be excited about our overall results, we delivered a strong third quarter with record year over year organic revenue growth of 18, 6%.
Driven primarily by our integrated Omnichannel solutions across both our new and existing clients.
Our strategic health Tech and Fintech vertical markets.
Kidney to expand as we capitalize on those large and growing addressable markets.
Additionally, our sustainable performance consistently underscores the ongoing response to our differentiated services and technology platform solutions and serves as the foundation and helping our clients transform their customer experience.
In my discussion of financial results references to revenue and net income on an IRS basis, while adjusted net income adjusted EBITDA and adjusted earnings per share are on a non-GAAP basis reconciliations of our IRS. The non-GAAP measures are included in the tables attached to our earnings press release.
<unk>.
Third quarter revenue increased 18, 6% to $129 1 million compared to $108 8 million in the prior year quarter.
We continue to experience high growth and our clients that one since fiscal year 2016.
This cohort grew by 60% over the prior year quarter and now represents 70% of our total revenue.
The revenue growth this quarter was offset by continued decreases related to our legacy <unk> clients.
Which now represent only 19% of our total revenue.
Net income in the third quarter was $6 6 million compared to negative <unk> 2 million for the same period last year.
The increase in net income was primarily driven by stronger operating results, which included a decrease in nonrecurring costs and a deferred tax benefit recognized in the current quarter.
We expect our annual effective tax rate to be in the high single digits on a normalized basis, excluding the effect of the warrant fair value adjustment and a one time deferred tax benefit of approximately $4 million.
This tax benefit is being recognized in the second half of this fiscal year, reflecting the benefits of our ongoing tax planning efforts.
On a non-GAAP basis, adjusted net income was $10 7 million versus $6 million in the prior year quarter and adjusted fully diluted earnings per share was 57 versus starting to <unk> in the prior year quarter.
The increase in adjusted net income and adjusted fully diluted earnings per share was primarily driven by stronger operating results and tax benefits recognized in the current quarter.
Adjusted EBITDA for the third quarter of fiscal year 'twenty, two was $18 8 million or 14, 6% of revenue compared to $16 7 million or 15, 3% of revenue in the prior year quarter.
The adjusted EBITDA margin.
Decrease compared to the prior year quarter, primarily due to an increase in agent training costs associated with ramping our business investment in overhead to support our growth and the opening of our Honduras delivery Center.
Sequentially adjusted EBITDA margin increased 100.
10 basis points over the second quarter.
Switching to our verticals, our Fintech and health Tech verticals continue to grow as a result of our past investments increasing significantly at 24, 6% of revenue in the third quarter up from 14, 5% of revenue in the third quarter of fiscal year 'twenty one.
Yes.
Retail and E. Commerce now represents 23% of revenue compared to 18, 1% in the prior year quarter as we continue to win in a digital first marketplace.
Our exposures to the telecommunications vertical decreased to 17, 1% of revenue as compared to 29, 2% a year ago.
Our top 10 clients now account for 56% of total revenue down from 69% in the year ago quarter.
In summary, we have made great progress on our revenue diversification goals.
Total capital expenditures were $6 1 million or four 7% of revenue in the third quarter of fiscal year, 'twenty, two versus $6 3 million or five 8% of revenue last year.
Net cash generated from operations was $12 million for the quarter compared to $13 9 million in the third quarter of fiscal year 'twenty one.
Excluding the impact of working capital net cash generated from operations increased to $15 5 billion compared to $11 9 billion in the prior year quarter, driven primarily by stronger operating results.
Dsos were 60 days for the third quarter, an increase of 10 days for the same period last year.
Decreased two days sequentially.
Year over year increase was driven by revenue growth and one of our larger clients reverting to standard payment terms in the fourth quarter of fiscal year 2021.
non-GAAP free cash flow decreased to $5 9 million from $7 6 million in the prior year, primarily due to lower cash generated from operations.
non-GAAP free cash flow, excluding the impact of working capital increased to $9 4 million from $5 7 million on approximately the same amount of capital expenditures.
As mentioned by Bob We expect significantly lower capital expenditures next year as we grow into our recently built out capacity.
Our balance sheet remains strong and we ended the quarter with $41 5 billion in cash and total borrowings of 27 4 million and lease liability is $90 6 million compared to cash of 57 8 million total borrowings of $28 5 billion in lease.
The abilities of $84 million as of June 2021.
In closing.
We believe we are extremely well positioned for continued growth.
Our high win rate success and backlog, coupled with the expansion of new lines of business and geographic expansion with our existing client base and our investments in evolution in our wave X technology suite insurers IDEXX remains at the forefront of innovation in the BPM industry.
With that Bob and I will now take questions. Operator, please open the line.
Certainly ladies and gentlemen, if you have a question at this time. Please press Star then one.
Our first question comes from the line of David Koning from Baird. Your question. Please.
Yeah, Hey, guys congrats good job across the board.
Thanks, David.
Please pleased with our results Scott Thanks.
Yeah, that's great.
Maybe first of all just.
This quarter diverged a little from the normal trend, usually Q3 is down a little more sequentially. It was hardly down sequentially in a seasonally weaker period. So clearly the momentum is strong.
Should it should the pace be normal in Q4 or was there anything kind of non normal in Q3 that kind of helped lift lift up revenue a little bit or is it just kind of you know.
Steady as she goes from here.
Sure. So thanks for calling that out yes.
We've had a lot of seasonality historically in Q2 as you go into Q3 and Q4 that goes down.
And reps down now.
David.
The success, we've had in the health Tech and Fintech space.
Structurally changing our business from.
From heavy seasonality Q2 to where we have now I think a much more stable business as we look through the.
Really through the fiscal quarters, and so I feel like we.
We've structured the business to operate.
Like this kind of on a on a go forward basis now now I do want to call out that as we kind of did the swap.
Low margin client for our hope tech clients.
It's kind of piece that in our Q4 and so there are so there will be a little guess, what I'll say just a little revenue loss in the in this quarter as we.
As we just kind of peace.
<unk> from what was low margin to this new client, but we feel good structurally about how the business looks kind of going out going out over the next the.
The next four quarters.
Yeah.
Got you. Thanks, and then yes that was a nice call out you've got about $150 million of revenue capacity in your current footprint, meaning capex and kind of go down.
As we think about margins going forward it sounds like a youre switching into higher margin work on average be you've got.
<unk> got this capacity now so as you grow DNA can be levered operating expense can be levered.
Is that the way to think about it or is there is there some offset right now I mean, obviously wage inflation and some of those things that could offset but I mean should margins keep going up maybe I'll kind of all of those topics I guess.
Sure so.
David.
Thank you.
You've followed this from pre Covid, but really pre COVID-19, we we as a business had.
<unk> had a slope.
Of margin that.
We were at a higher slope of that than our revenue growth. So think of us as a 10% revenue growth and we were driving margin improvements at a much higher rate than that Covid has got us a little bit off of that.
What had been a several year trajectory I think we're getting back on to that and that's what I'm really excited about and so as you as you.
<unk> identified all of those elements are now starting to starting to stack up for us.
The backdrop, though as you also highlighted is just.
A lot of volatility around inflation in wages and all of that stuff. So we're thinking.
Cautiously around those impacts, but I do love our overall trends in the overall trajectory is out over the next several years.
Got you no that's great. Thanks, guys.
Thanks, Kevin. Thank you. Our next question comes from the line of Tobey Sommer from two Securities. Your question. Please.
Hey, good afternoon. This is jasper bibb on for Tobey.
As we've seen growth decelerate at some of the larger consumer facing tech companies are you seeing any impact on your new economy clients.
And they're well is the willingness to invest in customer support.
Great question Jasper Thanks, Thanks for that and.
So.
Look I think we're all aware of hotel.
E Commerce world as well.
Volumes are starting to their businesses are starting to.
We see some headwinds on that.
As well as some of the other.
The other areas in the new economy.
And so.
We are seeing some of that in our overall business and the overall their overall enterprise volumes.
Now what we've been very successful.
Is delivering and then taking market share so inside of that dynamic, we're taking market share, which I think is allowing us to be.
Less subject to those those headwinds that Theyre Habig and one thing I will say is is quite the opposite they are willing to invest into the customer experience and their customer relationships.
<unk>.
We are joined at the hip with them so.
That is the that is the one fundamental part of their business that they are vigilant I will say it like that and as a result in spite of.
They've worked with us in things like price increases, if we need to adjust wages to keep our agents.
In IBEX.
That is a classic example of investing into.
Into those relationships and into their partners like buybacks. So I feel very good about our overall ability to to win with that headwind that's out there and I will say the other element is many are looking at further areas of their internal operation to outsource more so there is a whole another what I'll say vector of growth inside.
That as they look at all areas to try to take cost out of their businesses.
Thanks for that.
The changes to how clients are thinking about allocating capacity between offshore nearshore and the U S. Given some of the inflationary pressures they might be dealing with.
Sure so the.
The example that I gave around.
Our hotel clients is we're seeing this across.
Cross the swath of clients that starts with them evaluating their own captive operations and realizing it is very very difficult for them to operate their internal centers and so they look at a couple of dimensions. They look at dimension one should we move this.
To a partner like buybacks in the U S market.
But they are also looking and saying what areas of that business can we and should we be moving into a low cost labor market.
So our discussions with clients are.
Really.
On two dimensions that allow us to solve those almost simultaneously, which allows us to take.
Take some of their internal captive their internal operations move some of that into the U S. While at the same time moving some of it into a market like Jamaica. So they hit games they get the ability to take cost out of the equation. We are able to run the U S centers more efficiently more effectively we're also able to leverage the low cost markets to really take.
You don't make some big impacts into their overall cost so overall.
I see it.
It's a great tailwind for us as a business.
No.
That makes sense.
Last question for me I, just wanted to ask about the recent elections in the Philippines.
And if youre seeing any expected impacts on your business or the industry as a result.
No impact at all.
Just say if you go back to the prior elections, there was a lot of a lot of concern with the buyers at that point in time.
Turkey.
Came into office.
And shortly.
They all realize there was no issues as it relates to the elections and with Boeing Boeing Marcos winning.
Yeah Big supporter of GPO, So I don't see any change from a client standpoint any concerns no tapping of the brakes I'd say at the prior election, there was a little bit of tapping of the brakes I don't see any of that I think everybody realizes that.
There will be a peaceful transition of power and that that power.
Absolutely supports the BPL world.
Thanks for taking the questions guys.
Thanks, Chris Jasper.
Thank you. Our next question comes from the line of Matthew Roswell from RBC. Your question. Please.
Yes, good evening regulations on a nice quarter.
Couple of question, Thanks, Brent I guess.
First on the on the legacy business are you willing to talk about sort of how much it declined in the quarter and then as we think about the decline in the fourth quarter and going into next year, how much of that is sort of your transitioning away and how much of that would you describe sort of the client pulling back.
Oh sure so.
So on.
Let me say last quarter I highlighted that.
Sequentially.
That cohort of clients had started to flatten out.
And it was down a little bit in Q3 that they as a cohort were down a little bit, but let's say, mostly mostly sequentially.
Yes.
Low single digits down.
That is now.
I would say is.
But if you step back we've been in that 30% the last.
Four or five quarters have been more on the 30% to 40%.
Per annum.
Decline.
I expect.
That 423, we're going to continue on that percentage of the decline.
Bye.
Look at that cohort.
The lion's share of that decline is as we swapped out our lowest margin client for a really exciting relationship with the health Tech company that goes across multiple geographies.
So.
And so we have a little bit of.
What I would say is organic.
Demand declined in.
And what's left.
But that is kind of off to off of it.
Off of its kind of aggressive decline, mostly kind of hitting that.
Well.
Okay.
Here's the way and I'll, just say here's the way I think about that business I think at some point in time either.
Levels.
It levels off and because of just the absolute size of that basically will level off that's what we are.
We think we can operate too as we look down the road.
Past 'twenty three.
However, the worst case scenario is if it kind of <unk>.
Sunsets off.
So it is now.
Such a small part of the business that it's not going to impact our business and that said that part of our business is really the.
Voice centric lower margin Commoditized part of our business and so.
Given the opportunity we thought it was a great opportunity to two.
Engage.
Go forward client.
<unk> formula.
Okay. It might be a little early for this question, but.
You signed a lot of great new logos in the last three years.
Or are we approaching the point, where you stop kind of concentrating less on signing the new logos as opposed to just getting more share at those logos.
Oh.
Look we are I think we do a really good job of.
Taking market share.
Inside those new logos.
And so I look at it is it really is an and.
And let me let me.
We shared this I think last quarter might've been the quarter before but one of our big wins from FY 19. So now fast forward, that's kind of three three.
Three plus years into that.
We have one loss of market share in there, where we've doubled the size of our business and now they've moved themselves into our top three client basis, there are opportunities inside that base to continue to do.
And we're pushing.
That being said I think I think it's I think.
With the trajectory that we have and that these.
The lion's share of the business that we are winning goes into our very high margins geographies.
That.
Growth allows us to stock up.
And get margin gains on the growth vectors are margin drivers and so we're committed to staying a growth leader in the space because really works well for us and I think we're going to get ourselves back into as.
As we start filling this capacity, where you're going to see margin.
Margin expansion accelerating and Thats.
Really exciting for us.
Excellent and then one more.
If I can sneak it in for Carl I think you said the tax benefit was $4 million in the second half of 'twenty two.
What's the split between this quarter and next quarter.
Yeah, I would look at that I think just overall.
Obviously, you have some some differences but.
We've looked at $4 million by the end of the fiscal year and you can look at the comments we've made it was high single digits.
On a normalized basis, excluding the fair value of the work and the one time for the $4 million.
So not to give you the answer on the split but I think if you use that.
Comments for the full year it'll help you with the calculations.
Okay excellent. Thank you very much.
Thank you as a reminder, if you have any questions at this time. Please press Star then one.
Our next question comes from the line of Ashwin <unk> from Citi. Your question. Please.
Thank you.
And good job on the AR on the top line, especially.
Okay, I guess, that's sort of where my maybe my first question is.
Is the unchanged outlook does imply a very well.
Wide growth.
<unk> for Q.
And.
Would you say that you currently.
Based on all the positive commentary you had any traction youre getting into full cube.
Would you say you are leaning more towards the upper part of the range.
Or are there factors that could cause.
Cause that to not be should not be too and then there's a corresponding question of course on the margin side, because we I think we probably need.
Margins to kind of step somewhat close to 17% in <unk> would that be accurate.
Sure Ashwin.
Thanks for that question and as always your your mathematics are very spot on so let me let me just touch on on the topline side.
If we had decided.
Not too.
Not to really get some kind of disengaged with with the.
The low margin climbed at let's say that we did not do that.
I'm pretty confident that this business would be sitting on the <unk>.
Upper end.
From a revenue standpoint, but the opportunities came for us to do this and it was the right thing to do.
Especially as we would move into our Q1, which is a very difficult high ramp no training paid and then move to really low margins. So.
The decision to.
To move past that.
It's a great move.
As we look to Q4 now or full year.
There is a range.
But.
Because what we're basically doing a transition.
There is a little revenue loss, along that that kind of say I would just sit and say I would not say that we're steering us to the high end. If we had not done anything we'd certainly be towards the high end of that range. So that's how we're looking at that from a revenue standpoint now from a.
Margin standpoint.
You're right. It did employees is very strong.
Margin quarter.
And.
That's why I kind of highlighted.
On a normalized basis.
Q3.
<unk> would have been in the 16% plus range.
With continued strengthening and in Q4 for us is a less of a.
Significant ramping.
And significant training quarter. So that's how we're thinking about that.
Really the overall operating performance in the quarter, which was very strong.
And as you kind of move to there.
We're hoping that margins margins continue to move up.
Understood. Thank you for that.
<unk>.
The other question more for operating question I guess is.
Thank you.
Stinker walk away.
The legacy Park can you.
Perhaps use the same tenant.
Maybe a little bit of training.
On the on the new stuff or does that require sort of a.
A bigger reset restart.
Could you talk about some of the dynamics of that because I'm thinking there could be.
Ongoing.
You know potential margin benefits.
As we head into next year.
Would that be accurate.
So so great question and the answer to the can you reuse the talent I have to say it the pets.
It depends on first.
First what markets.
You're going from and to so.
How that fits into our client strategy.
This opportunity.
He was very unique and tailor made because we've been able to deploy.
And in my.
Remarks, I highlighted this let me just clarify to make sure that that's understood.
And this opportunity we're able to take the lion's share of those agents.
And rapidly retrained them and deploy them on our health Tech clients.
And that was that was a very unique that was it.
Really great opportunity for us to do that which made that decision and.
The ability to.
To redeploy those.
What we think is a more strategic clients <unk> clients it made it.
Made it.
Solid reason to go ahead and do that.
That won't happen every single time.
But that's where we look and say we can be opportunistic about our business.
And we're not worried about what that does to our growth.
Engine, because I think we have this really inherent growth engine that we built that is really really on solid.
Solid pudding, which gives us the ability to to to move swiftly when the opportunities when the opportunities come.
And so if I step back.
We will have this new client.
Which will be a top five client will have them across the U S and in the Philippines, and then a provincial Philippines in particular, which is one of our.
Most profitable regions.
And we will have that put together by mid Q1.
<unk>.
And we'll be in a really ideal environment.
Going forward and so I feel very good about kind of the upsides of moves like this.
Got it I appreciate the detail on the timing and the nuances there.
All the best Thank you.
Great. Thanks Ashwin.
Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to Bob <unk> CEO for any further remarks.
Jonathan Thank you and appreciate all of you listening to the call.
In closing.
This team is doing an amazing job dealing with all the challenges and turbulence in this marketplace and I feel like we have built a very very strong.
And resilient business navigates as well through some challenging times.
And we look forward to bigger and better things as we as we move forward. So thank you all and I'd like to thank my team for just the amazing job that they do on a day in day out basis. So thank you all have a good night.
Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.
Okay.
[music].