Q2 2023 Verint Systems Inc Earnings Call
Hi, and welcome to the Variance Fiscal Year 23 Second Quarter Conference Call. At this time, all participants are on a listen-only mode. If this presentation, there will be a question and answer session. To ask a question at that time, please press star 1 1 on your touch-tone telephone.
As a reminder today's conference colleague is being recorded, I will now enter the call of a key host, Mr. Matthew Frankl, and best relation to the Corporate Development Director. Please go ahead.
Thank you, operator. Good afternoon and thank you for joining our conference call today. I'm here with Dan Bodnar, Varen CEO , Doug Robinson, Varen CFO , and Alan Roden, Varen Chief Corporate Development Officer.
Before getting started, I'd like to mention that accompanying our call today is a slide presentation.
If you'd like to view these slides in real time during the call, please hit the IOS section of our website at barren.com. Click on the Investor Relations tab, and then click on the webcast link and select the latest conference call.
I would also like to draw your attention to the fact that certain matters discussed on this call may contain four different statements within the meaning of the Private Security Litigation Reform Act of 1995 and other provisions of the federal securities laws.
These forward-looking statements are based on management's current expectations and are not guaranteed at future performance. Actual results could differ materially from those expressed in, or implied by, these forward-looking statements.
Before the statements are made as the date of this call and is accept as required by law fairness and all the cases updated or revising investors are cautioned not to place undue reliance on these four different statements.
For more detailed discussion about these and other risks and uncertainties could cause various actual results and different material from those indicated in these four list of statements, please see our Form 10-K for the fiscal year ended January 31, 2022, our Form 10-Q for the quarter ended July 31, 2022, when filed, and other filings we make with the SEC.
The financial measures discussed today include non-GAAT measures as we believe investors focus on those measures and comparing results between periods and among our peer companies.
Please see today's slide presentation or earnings release in the investor relations section of our website at Verant.com for reconciliation of non-GAAP financial measures to GAAP measures. non-GAAP financial information should not be considered in isolation from, as is substitute for, or superior to GAAP financial information, but is included because management believes it provides meaningful supplemental information regarding our operating results when assessing our business and is useful to investors for informational and comparative purposes.
The non-GAAP financial measures the company uses have limitations and may differ from those used by other companies.
Now, I'd like to turn the call over to Dan.
Thank you, Matt.
I'm pleased to report another strong quarter with strong momentum across key cloud KPIs.
Driven by brands looking to close engagement capacity gap.
The LearnthCloud platform is differentiated.
especially for organizations that want to deliver a world-class customer experience.
while managing wage insulation, workforce retention, and other workforce-related challenges.
Changing workforce dynamics make it more urgent for brands to deploy AI-driven solutions.
To help increase their workforce capacity,
and be able to do more with limited resources and budgets.
With our cloud platform in Q2, we experienced continued momentum across Booking, Cloud Mix, Revenue and ETS.
with many significant customer wins.
Our top-line growth metrics were impacted by the US dollar's appreciation.
But at the same time, bottom line results were not impacted.
Later we will discuss how the variant is in a unique position with a natural hedge.
that helps neutralize the impact of current fluctuations.
the bottom line.
Let's take a closer look at our Q2 and H1 results.
Thank you.
Revenue came in at $223 million on a gas basis.
and $224 million on a non-gap basis.
This is our last article.
The dollar continued to appreciate.
and FX impact on our Q2 and H1 revenue growth has been around 2 percentage points.
on a constant currency basis.
non-GAAP revenue came in at $229 million, reflecting 6% year-over-year growth.
And for H1,
Revenue increased 8% on a consistency basis.
Looking at the full year, we are pleased with our first half growth.
Which is on track with our expectations for around 7% revenue growth for the full year
Also, on a constant currency basis.
As a reminder, about 20% of our revenue is generated in foreign currencies.
And given the significant changes in FX rates,
We plan to discuss our results and guidance on a content currency basis.
through the end of the year.
At the same time, I am glad to report that FX has a minimal impact on our bottom line.
because we are uniquely positioned with a natural hedge.
This is due to the fact that about one third of our expenses are in foreign currencies.
Therefore, the appreciation of the US dollar reduces our non-US dollar expenses.
largely offsetting the revenue reduction.
This natural hedge results in minimal FX impact.
to our bottom line reported results and guidance.
In Q2 non-GAAP they use EPS
Came in at 56 cents ahead of our expectations.
For the second half of the year…
We plan to continue hiring to support our growth targets.
For the full year, we continue to expect the loaded EPS of $2.50
unchanged for wire guidance.
According to Voking Growth, in Q2 we had many significant wins from existing and new customers.
New PLE bookings increased 10% on a reported basis and 12% on a reported basis.
on a constant, constant basis.
in line with our target of 10 to 12 percent growth for the year.
Let's take a closer look at some Q2 cloud KPIs.
We received 28 cloud orders in excess of $1 million PCV.
as large enterprise customers continue shifting to the cloud.
These large club orders included some of the more notable brands in the world.
such as auto industry leader Ford.
Global Insurance Provider AXA
Global Logistics Leader FedEx
and leading financial institution Citigroup.
In addition, we continue to win many new customers.
and in Q2 we added more than 100 new logos.
including insurance provider Oscar Health and telecom provider Selcom.
Another strong metric was our booking mix.
With 65% of our new PLE bookings coming from SAS,
in Q2 compared to only 53%
in Q2 of last year.
For the full year, we expect our shift to SAS to continue.
Turning to cloud revenue.
In Q2, constant currency cloud revenue increased 30% on a GAAP basis.
and 29% on a non-GAAP basis.
In H1,
Constant currency cloud revenue increased 34%.
In line with our annual plan
and we are maintaining our guidance of 32 to 34% on a constant currency basis.
As a reminder,
Our cloud revenue includes both SaaS and optional managed services.
We continue to see strong SaaS adoption across industries and geographies and across new and existing customers.
During the first half of the year,
Our SaaS revenue was very strong increasing 41% year over year.
Optional minute services did not grow in the period.
is they are low margin, people driven services, which we provide optionally to our customers.
And I'd like to mention that we do not target growth in men at services.
Can our momentum continue across our existing customer base?
and with new customers.
And this year we expect non-gap cloud revenue to represent about 75% of our total recurring revenue.
As our potential support base,
continues to transition to the cloud.
This metric is up significantly from 62% last year and 49% two years ago.
Our strategy has been to help customers transition to the cloud.
When they're ready.
and to offer a hybrid cloud platform.
for maximum customer flexibility.
We believe that many customers who have not yet moved to the Cloud are in the process of planning a transition over the next few years.
The cloud transition drives more value, not only to variants,
but also for our customers.
as we offer accelerated innovation.
and a faster time to value in the cloud.
Overall, I'm very pleased with a strong cloud momentum in the first half of the year.
Now let's take a closer look at some of the competitive wins in Q2.
I would like to highlight three Q2Cloud WAVES.
The first order for $6 million dollars.
was for a leading transportation company
replacing another vendor and expanding functionality with the Variant Cloud Platform.
We believe we won this large order due to our variant DaVinci AI differentiation.
The strong ROI we offer and the very platform openness and breath
The second order for $3 million was for customers in the healthcare industry.
This fast growing digital based healthcare company
selected the variant cloud platform
to help them manage knowledge and generate insights for the workforce.
We believe various DaVinci AI differentiation, the strong ROI we offer, and the platform's enterprise scalability were key reasons why we want this opportunity.
And the third win for $2 million.
works for customers in the insurance industry.
This customer replaced its legacy vendor
selected the variant cloud platform
to improve the quality of its interactions and customer experience.
We believe we were selected due to variant DaVinci AI differentiation and our reputation as a trusted long-term partner.
Turning to innovation.
I would like to provide an update on our ONE Workforce initiative.
Which we reviewed during our investor day in June
discussed.
Many brands are under pressure to close the engagement capacity gap.
and do more with the same resources and budgets.
Digital Transformation
It has created many organizational workforce silos.
With each silo dedicated to a communication channel.
which leads to poor customer experience and workforce inefficiencies.
One workforce is designed to help brands eliminate those silos and create a unified workforce of people and bots working together to drive world-class customer experiences.
As part of our OneWorkforce initiative, we are going to discuss the importance of the
we launched a new channel automation offering that orchestrates people and bots across digital and social channels.
With the new channel automation offering, a unified workforce can become more efficient
as agent capacity is dynamically allocated across channels based on real-time demand.
More than that!
consumers have the flexibility to seamlessly switch across channels.
For example,
If the customer decides
To terminate an interaction, they started via a social channel.
and to later re-engage via a chat channel.
the history of their prior interactions will be preserved.
and they will not need to start all over.
The VariantOne Workforce Initiative is powered by Variant DaVinci AI.
which is at the core of our platform.
Verindaventur delivers customer engagement specific AI.
that we developed based on decades of machine learning modeling from real customer data.
Variant DaVinci makes the Variant One workforce highly differentiated in terms of the ROI it could offer to our customers.
We are pleased to have received strong industry recognition.
to our very intervention driven platform.
in the conversational AI category.
IDC's worldwide Conversational AI Platforms vendor assessments.
Rent variant as a leader
in the top right quadrant of its highly respected market scape.
More recently in the self-service category
DMG in their AI enabled self-service for the enterprise report
Note that variants receive top scores in multiple customer satisfaction categories.
including a perfect 5 out of 5 in the overall vendor satisfaction and product satisfaction categories.
In summary.
Looking back on our first-half results,
I believe that driving our strong momentum is our focus on helping customers close the engagement capacity gap.
with market-leading AI innovation.
Before turning the call over to Doug, I would like to discuss a succession plan for RCFO.
After 16 years at variant,
Doug will be stepping down as CFO during Q4.
and Grant Highlander will become variant new CFO at that time.
Grant has more than 20 years of experience in financial operations.
He joined Varian seven years ago and has played a leading role in our cloud transformation.
We are very grateful for Doug's expertise and stewardship.
as well as his efforts in developing grants as a successor.
Doug will continue to report to me in an advisory role after we complete the transition.
Let me turn it over to Doug who will provide more details
on our results and guidance.
Doug?
Thanks Dan, good afternoon everyone. I appreciate your kind words Dan, and have very much enjoyed my time at Verant working with you and the team as we've grown and transitioned the company over the years.
We've got a strong financial organization and I feel fortunate to have someone of grants caliber to succeed me, as well as have the strong surrounding team in place to continue to take VARIN forward.
I look forward to working with Grant and the team in an advisory capacity following the transition date.
Now let me get on with the Q2 call.
Our discussion today will include non-GAAP financial measures.
A reconciliation between our GAAP and non-GAAP financial measures is available, as Matt mentioned, in our earnings release and in the IR section of our website.
Differences between our GAAP and non-GAAP financial measures include adjustments related to acquisitions including fair value revenue adjustments.
amortization of acquisition-related intangibles, certain other acquisition-related expenses, stock-based compensation expenses, separation-related expenses, accelerated lease costs, as well as certain other items that can vary significantly in amount and frequency from period to period.
For certain metrics, it also includes adjustments related to foreign exchange rates.
As Dan mentioned, given the significant appreciation of the US dollar this year, I will be discussing certain results on a constant currency basis today to better understand our business performance.
In Q2, non-GAAP revenue increased 6% year-over-year on a constant currency basis and diluted EPS came in at 56 cents ahead of our EPS guidance.
For H1...
non-GAAP revenue increased 8% year-over-year on a constant currency basis.
diluted EPS came in at $1.07.
We're pleased with our Q2 and first half results and I believe we are well positioned to meet our annual targets for both revenue growth on a constant currency basis and for notes of Q3 P academia back to the spent reach page and we will receive a summary paper of
Let me give you a bit more detail on our exposure to the foreign exchange movement.
Most of our foreign exchange exposure is in British pounds, euros and the Australian dollar.
In the first half, around 20% of our revenue was transacted in foreign currencies.
On the expense side, about a third of our cost of revenue and operating expenses are denominated in foreign currencies.
We expect a similar mix in the second half.
Our US dollar mix of revenue and these expenses helps to mitigate the FX impact on our earnings as it creates a natural hedge regardless of whether the dollar appreciates or depreciates against the other major currencies.
Turning to our cloud metrics.
In the first half of the year, our Cloud KPIs came in strong across the board.
In H1,
Cloud revenue increased 34% year-over-year on a constant currency basis.
in line with our outlook for the year.
New PLE bookings increase 19% year-over-year on a constant currency basis.
Our mix of business continues to meaningfully shift towards fast.
In H1, 62% of our new PLE bookings came from SAS, compared to 52% in the first half of last year.
And the percentage of our software revenue that was recurring came in at 84%.
I'd now like to discuss guidance for the current year, ending January 31, 2023.
Today, we are adjusting our prior revenue guidance to reflect the strengthening dollar while maintaining the same guidance of a 7% revenue growth rate on a constant currency basis.
Let's look at the impact of FX on three key metrics.
On a reported basis, our new revenue guidance is $920 million plus or minus 2%.
which corresponds to $940 million, our most recent guidance on a constant currency base is adjusted for recent FX rates.
In other words, we are maintaining our original guidance of 7% growth on a constant currency basis.
We expect cloud revenue growth of 32 to 34 percent on a constant currency basis.
This translates to $515 million of cloud revenue on a reporting basis at the midpoint of our guidance.
And we expect diluted EPS of $2.50, reflecting 10% year-over-year growth at the midpoint of our revenue guidance.
Now let me provide you with some additional information for modeling purposes for the year.
Relative to margins, we expect to see some modest gross margin and operating margin expansion for the full year.
We expect cash flow operations to come in a bit above 200 million for the year, excluding non-recurring items.
Now let's discuss some below the line assumptions.
For the remainder of the year, we expect around $1.5 million per quarter of interest in other expense.
We expect about $300,000 per quarter of net income from a non-controlling interest we have at the small joint venture.
We expect an approximate 11% cash tax rate for each quarter and for the year.
And we expect around 76 million of fully diluted shares flat with last year, reflecting the effect of our stock buyback program.
I would also like to discuss the second half of the year for modeling purposes.
We see the quarterly trend this year similar to prior years with sequential increase in Q2, a modest sequential increase in Q3, followed by a strong Q4.
More specifically, in Q3 we expected 2 to 3 million sequential increase in revenue and 2 to 3 cents sequential increase in diluted EPS.
In summary, we're pleased with our Q2 and first half results and are well positioned for a strong near and longer term growth.
We expect our revenue growth to accelerate to 7% this year on a constant currency basis.
Looking at next year, we expect our revenue growth to accelerate again to around 9% on a reporting basis and around 10% on a constant currency basis.
This results in revenue next year of a little over $1 billion.
We expect our margins to continue to gradually expand and are targeting double-digit diluted DPS growth.
More importantly, we believe the breadth, openness, and flexibility of our cloud platform and the variant DaVinci AI differentiation positions us well for long-term growth.
With that operator, let's open up the line for questions.
Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press star 11 on your touchstone telephone.
Again, if you'd like to ask a question, press star 11.
Our first question comes from Shalya of Cowan. Your line is open.
First, I want to convey my congratulations to Grant on the promotion. Doug, on your end it's been a pleasure working with you over so many years.
Dan, my first question is about the difference between the products and solutions that are being acquired by Ulogos versus those that are being progressed by existing customers. Any outstanding modules in either client category that you can talk about?
Yeah, so I think that's, you know.
From a product perspective, I don't see much difference.
You know, we see demand across the platform. I think that clearly with new logos, we see almost substantially all the new logos are SaaS deals.
Well, as you know, we still have a large base of customers that are in the process of converting to SaaS, so that will be a mix of...
on-prem, SaaS, and sometimes hybrid deals.
But that's clearly when we lend the new customers. They already start with the cloud platform.
But I would say that one workforce is...
An area it's not one solution. It's many solutions, but it's an area that gets a lot of attention
from new logos and from the base.
because of the current environment.
Lots of organizations realize that they have silos, and obviously silos is a source of inefficiency. So they're looking for more efficiency, they're looking to create more capacity in the workforce with the same people and resources.
Because obviously with wage inflation
That's now even more of a problem.
We talked about the industry spending $2 trillion on labor.
and trying to manage that cost.
One Workforce is a solution to help them to close the capacity gap and create more capacity and with a pretty fast ROI. I think customers today.
are not looking just for ROI, but they're looking for fast time to value and short MRI, so I think that's clearly.
you know, an area of great interest, which I think is what's behind our strong Q2.
You know on a constant constant basis. We we overachieved revenue We overachieved on EPS and we had a double-digit booking growth.
And I think what's driving this momentum is, a lot of it is that.
demand for automation and for software that can help them manage the bigger expense of the labor expense by introducing more automation.
Understood. And maybe as a follow-up, any elongated sales cycles, are you seeing any additions cool to me?
specifically as it relates to large transactions.
No, we actually did not sink you to any trend of getting sales cycles. And we were watching this very closely because obviously we heard from other companies that it's ahead.
they did experience. Again, I think first the results.
you know, $229 million on a constant currency basis and
12% PLA growth, new booking growth suggests that we actually achieved our
plan so overall there was no trend. Look, the, anecdotally there were some deals that were pushed out but there were also some deals that came in earlier than we expected and some deals eventually got bigger than where we started the quarter and some shrunk.
But this is Tishan Iqdol. I don't think there was any evidence of...
of cell cycles being allocated. And I think, you know, I speculate that this...
This demand we see in the current environment is because of the benefits that our customers are getting from being able to address the capacity gap and to deal better with their increasing labour costs.
which is not just wage inflation, it's also difficult, still difficult to hire people, retain people, train people, have people working from a hybrid environment and managing the workforce remotely.
so looking for for tools that help to
You know reduce that pain and and I think that's where very comes in very very nicely and can demonstrate our why very quickly
Thank you so much for that. Congrats again to Doug.
Yeah, thank you all. Take care.
Thank you. Our next question comes from Ryan McDonald, Needham & Company. Your line is open.
Taking my questions and I'll echo my congrats for Doug. Best of luck. But maybe to start, Dan, can you talk about new SAS ACV growth? And obviously we saw sort of a sharp deceleration in that growth rate down to 2.7% and just parse out what's going on there and how much of that, if any, is FX impact versus something sort of fundamental within the business.
Yeah, no, I think that.
This metric is always going to be lumpy and we are expecting, you know, similar to last year, about 30 to 40 percent growth in USAS-ACV.
Okay, and then it's a 30 to 40% growth still, but nothing anomalous. I guess that came out in the quarter off of that. No, I think we expect Q3 to be strong in this metric, but it's not unexpected that it will be lumpy.
Last year in Q2 was a tough compare, so if you look at just this quarter growth rate, it's a little bit of an anomaly.
Look at the full year when we've checked good growth.
helpful, Collar. I appreciate it. And then maybe shifting to – so you've been working and sort of integrating in over the last year and a half a consumption-based pricing model in addition to subscription-based pricing. I'm curious, in the current environment, are you seeing any shifts in preference from customers in the pipeline versus consumption versus subscription and whether or not they prefer more of the visibility on the subscription side than consumption? I'm curious if that's changing at all.
Yeah, so there is a lot of interest in this morals but as you know for decades the only pricing model in our industry was
based on the number of users.
So now we provide customers pricing model options. They can still choose obviously the number of users but they can also choose the consumption base.
And the advantage of the consumption model is really obvious when you think about customers buying automation solutions.
because with automation they want to consume more.
because the more they consume the fewer people they need.
So today what we see in this environment that customers are still experimenting with the consumption based pricing and they want to assess the impact on total cost of ownership over time.
So they will test it but not going all the way because we are still in a relatively early stage.
And the consumption based pricing is still a very small part of our revenue.
But we believe that over time this could be a win-win model that motivates customers to consume automation and also the cost of the consumption with much larger ROI.
Excellent. I appreciate the color. I'll hop back in the queue.
Thank you.
Our next question comes from Samad Samana of Jefferies. Your line is open.
This is Mason Marion on Firstamod. Doug, best wishes and good luck on the next stage of life. So, I'm going to ask a macro question from a slightly different angle. In light of the commentary from some other software companies, can you help us understand the booking trends kind of throughout the quarter and what you're seeing today? Are you seeing any changes to customer behavior?
So, Shaul asked about trends and I conclude that we see a lot of anecdotal information.
But I don't think we see clear trends in our...
vision in terms of what customers want to do differently.
Alright, that's one clear trend.
Sorry.
So.
Thank you. Thank you.
Thank you.
So our eyes is how we lead the sales process.
We start with discovery on what's the current status for customers.
what's the potential ROI they can have, and we then help customers to realize how, not only they can.
benefit from our theoretically but many customers want to see that how it's going to work in their own environment and And we are well well well positioned to to do that because we've been selling business applications on an ROI basis for
for many years.
many years.
So if I look at the linearity of the year for example.
We did 48% of our guidance revenue in H1.
That's pretty good. That's better than we had last year in the year before. It was around 47, 47.0 something percent. So...
We think that the linearity from a revenue perspective for the year is good.
And in terms of booking,
Our new booking target is 10%.
We're now reporting a constant currency, so Q2 was 12%, Q1 was more than 20%.
But we still see more than 100 new logos joining us in Q2.
So I think that despite of what we all are monitoring very closely in the macro environment
that despite of what we all are monitoring very closely in the macro environment
So far it looks like we have a
a pretty good outlook for H2.
And you know, we are...
You know our assumption for for guidance is always is You know we look at the demand environment. We're assuming what we can see in the market today For expenses we expect some inflation, but we believe we can manage it
And we're still going to hire more than any other people in H2 to a workforce ahead of next year growth.
And
In terms of the FX impacts on the borderline, we are very fortunate that we don't have an impact on the borderline.
We're maintaining our 10% TPS guidance.
And last one for me on the unbundled SAS metric that you saw this quarter, can you help us understand that metric? Was it perhaps some deals flipping or perhaps that's where the majority of the FX impact was felt? As our point of view today.
I think that unbundled SaaS because of the revenue recognition associated with unbundled SaaS, it will fluctuate quarter to quarter.
But if you look at the overall stress growth in H1, it was 41%.
Actually I was positively surprised with more than 40% growth in SaaS.
This was offset a little bit by managed services which as you know it's a low margin services which we
provide optionally, so We don't have any growth targets for minute services
But the SaaS business was strong in the first half.
I think when you combine that with 65% of our new booking, that's more than 10% up from last year.
Now 75% of our recurring business is more and more customers converting.
their maintenance to sell. So I think that that trend of.
SaaS growth is very strong and customers are moving to SaaS in our...
In our industry, as I mentioned before, even customers that have not moved yet are in discussions with
with variants about when they're going to move next year or the year after.
Most customers are having some sort of a long-term plan.
to transition to the cloud. So I feel pretty good about SAS growth.
So I feel pretty good about, you know, such growth in our industry.
Great, thank you. And from quarter to quarter, it will be a mixed issue, you know, what happens when it goes bundled versus unbundled. But overall...
Nicely.
Thank you.
Again ladies and gentlemen, if you'd like to ask a question, please press star 1 1 on your touchstone telephone.
Again, to ask a question, please press star 11.
Our next question comes from Peter Levine of Evercore ISI. Your line is open.
Question for Doug, best of luck in your next venture. Two for me, maybe I think the perception is that your software gets deployed after a larger contact center transformation, right? So if contact centers deployment get, they slow, sales cycles extend, how do you think or how would you view the impact to your business if the macro kind of environment is worse here?
Yeah, so I think that maybe two parts to my response.
One is I want to address the sickest element of the question. Second is, you know,
how variants will sustain a recession.
So in terms of Stake House, you know, is it.
As I mentioned before, currently we don't see alligator cell cycle.
And you know, if it does happen with six SICAs...
that's not happening for variants. So I can only speculate why maybe there is something in SICOS and we don't see it. But I think more importantly is that our platform is designed to close the engagement capacity gap.
And, you know, maybe that's why, you know, the demand for this, when there's rising labor costs.
the demand to generate ROI from business applications and not from infrastructure is starting to look different than for the infrastructure side.
But in any event I believe that that perception that you know one workforce can only come behind SICA Is wrong we do have many customers
that are deploying one workforce and completely separate from their decision on SIGAS.
So I don't see that connection there.
Now in terms of
you know, the macro environment and...
I can only talk about what happened in prior recession.
And I think that in all prior sessions Varian did much better than the IT industry
Our software is very sticky and our renewal rates are very high.
And even in a bad economy, customers really need a software because they have to run customer service and they need to take care of their customers.
and they have to run it in a very efficient way given the labor cost.
And also, I think another reason is that we, we're an enterprise company and we have, some of the largest companies across many verticals. We have.
10 out of the top 10 banks and 9 out of the top 10 insurance companies and 8 of the top healthcare companies. So these are pretty strong companies that...
Need customer service there are b2c companies is essential for them in good time and in bedtime and and I think that
The combination of all these reasons is why we've done relatively well.
for instance, is why we've done relatively well.
in prior recessions and you know
We certainly know how to manage the bottom line.
Um... There he is.
Even in COVID, which was not a recession, but it was a crisis, we came up with a...
improving bottom line. So I think that on a relative basis we know how to manage downturn in economy.
But more importantly we want to help our customers deal with the greater problem which is labor costs because you know that that's a you know.
Labor, wages inflation is I think the number one issue that customers really are concerned about.
Thank you for that. Just one quick one for Doug. Sorry if I missed it earlier on the call, but can you quantify either in dollar terms or percentage what the FX impact was?
Yeah, well, you know, for the year, it's headwind on the revenue side, but.
when we look at this year.
guidance at last year's rate or current record for the...
It hasn't happened yet, right?
LYNN F terminal again...
This is the title earlier.
But a third of our expenses are in foreign currencies, pound, euro, etc. And so that gives us expense savings when you translate it to US dollar. So we're holding the 250 EPS, so we don't have a headwind to the EPS, just a headwind to revenue and kind of a tailwind to expense offsetting us. So we're fortunate in that regard, it does put a little pressure on the top line. So you really have to look at constant currency to look at the true business performance of our top line.uba Secrets
Thank you for your questions.
Thank you for your questions. Sure, thanks Peter.
Thank you. I'm sure no further questions of this time. Let's turn the call back over to Matthew Frankl for any close remarks.
Thanks Valerie and thank you everyone for joining us today. As always, please feel free to reach out with any questions you have.
And we'll look forward to talking to you again soon. Have a good night.
Thank you.
Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.
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