Q3 2022 Grid Dynamics Holdings Inc Earnings Call
Logo business development at based on our current trends in Q4, we expect it to continue strengths from the new logos.
Turning to some additional third quarter segment commentary our technology segment was the largest during the quarter.
And similar to the Q2 some of our largest technology customers continued to ramp aggressively and support our growth as we expanded into new geographies.
Our financial segment grew healthy as we benefited from new programs tied to wealth management applications.
Lager moment.
In the third quarter, we added several new logos across industries, which included a fortune 500 climate control equipment manufacturer at specialty retail and a large online consumer platform.
Im happy to report that in September we signed new contracts and started engaging with two fortune 30 companies one is a global automotive manufacturer.
And another one is the leading membership on the discount chain.
Received revenues from these two customers starting October .
European business expansion.
During the quarter, we made a good progress with our European clients Cyber security is one of our strategic focus areas, we expanded business with a number of cyber security software companies.
In addition.
We witnessed a strong ramp with a global footwear company.
Also continued to scale our business with a large UK based home improvement Chi.
And finally, we secured new business with a major Nordic truck manufacturer.
New business pipeline.
We ended the fourth quarter and 2023 with a robust pipeline of new logos and strong demand across our non retail verticals.
On the new logo front.
Witnessing strong momentum and expect a more logos in Q4 than we've done in Q.
Three this year.
At some of our new large customer servers, we also witnessed faster ramp up as they are willing to scale business more rapidly.
We're expanding our business with an existing programs and we expect to contribute from the meaningfully in 2023.
Partnerships.
What the issues are increasingly playing an important role in our ability to attract new clients in.
In the Q3 total new logos wins came through our partnership channel.
We also made progress in our large cloud partners with Microsoft Azure, we would confirm gold status.
AWS, we were recognized as a launch partner for their Etfs delivery program, which focuses on application modernization across enterprises.
At Google Cloud platform.
We have one of the largest number of facilitation and more all the service providers.
In addition to Hyperscale or cloud partners with strengthen our alliances with SaaS and product companies and digital commerce data and advanced analytics.
M&A.
M&A continues to be an important component of our growth strategy. As a reminder, our M&A focus is on capabilities key customers and deliver locations in early September we successfully concluding raising primary capital one of the key reason for this race was M&A.
Current pipeline is robust and we are actively exploring multiple acquisition opportunities to expand our capabilities complemented with our geographic expansion strategy.
During the quarter.
Britain mimics delivered some notable projects number one.
We're a global technology company, we proposed designed and implemented Snowflake integration drum business intelligence reports on Petabytes of data.
As a result end users were provided with enhanced reporting capabilities to drive the company's business and operational decisions. This solution met all the required data service level agreements for large scale data management and resort previously observed challenges in maintaining.
<unk> capacity and scalability.
For a global technology leader in the cloud space re dynamics was a key partner in the development of one of the core b to B products dedicated to artificial intelligence driven product discovery capabilities.
Great dynamics contribution included end to end worthy engineering of the product and enhanced customer Onboarding tool suite.
The product gives end users.
<unk> product discovery experience and dramatically increases conversion through better search and recommendations relevance.
At a leading financial services firm, we help the client to modernize the primary cost 'cause customer portal.
Our solution provides greater flexibility and speeds up integration processes with each business units. The modernized portal provides end users also with a more streamline experience and highlights financial products and services relevant to their needs.
We're one of the largest manufacturing service company, we develop an intelligent cloud based module for their supply chain management system. This module aggregates information about excessive stock matches against the contractual terms and allow us to generate claim.
<unk> is currently in production and has helped our client and collecting additional revenues.
With that let me turn the call over to our new who will discuss Q3 in more details.
Thank you Linda and good afternoon, everyone. Our third quarter revenue of $81 2 million exceeded our guidance range of $78 5 million to $80 million and was up four 9% on a sequential basis and 41% on a year over year basis.
During the quarter, our revenue was negatively impacted by the weaker euro and British pound against the U S dollar.
On a constant currency basis, our revenue growth on a sequential and year over year basis was five 8% and 43, 1% respectively.
Better than expected revenue in the quarter was driven by strong demand from our large technology customers and revenue contribution from recent logo wins.
TMT, our largest vertical represented 32, 4% of our third quarter revenues and grew 12, 6% on a sequential basis and 49, 7% on a year over year basis.
We witnessed strength across our customer base with some of our largest technology customers.
Where we grew business across existing and new programs.
During the third quarter retail our second largest vertical represented 31, 1% of our revenues and decreased <unk>.
8% on a sequential basis and grew 38, 3% on a year over year basis. The sequential decline was largely driven by some customers who are more cautious in spending with the ongoing macro concerns.
We expect these concerns to persist in Q4 at some of these customers.
Here are the details of the revenue mix of other verticals, our CPG and manufacturing represented 19, 8% of our revenue in the third quarter and decreased 2% on a sequential basis and grew 43, 3% on a year over year basis.
The slight decline on a sequential basis came from the decline at some customers and this was offset by growth at our largest CPG customers.
Finance represented seven 5% of revenue increased 23% on a sequential basis and grew 16 point.
3% on a year over year basis on a sequential basis, we witnessed growth across most of our customers tied to financial services banking and insurance and finally, the other segment represented nine 2% of our third quarter revenue and was up one 1% on a sequential basis.
We exited third quarter with a total headcount of 3746 down from 3763 employees in the second quarter of 2022 and up from 2884 in the third quarter of 2021.
The head count reduction was driven by a couple of factors.
<unk>.
At a company wide level, we streamlined our engineering bench.
In the quarter, our pace of hiring moderated to align with demand.
That said, our average billable head count increased on a sequential basis in the third quarter over the second quarter and this partially contributed to the increase in revenue.
At the end of the third quarter of 2022, our total U S head commerce, 322, or 9% of our of the company's total head count.
And remained on the same level compared to the second quarter of 2022.
And down from 11% on a year ago quarter, the year over year decline as a percentage of the total head count was largely driven by greater mix of non U S head count our non U S headcount, which we sometimes refer to as offshore located in central and Eastern Europe , UK and Netherlands in Mexico and other locations was 3424.
Our 91% of our total headcount.
In the third quarter revenues from our top five and top 10 customers were 44, 5% and 61.
And 1% respectively and.
In the second quarter, our top five and top 10 customer concentration was 44, 2% and 62% respectively and during the same period, a year ago, our top five and top 10 customer concentration was 42% and 58, 2% respectively.
During the quarter, we had a total of 200 customers down from 208 customers in the second quarter and 215 customers in the year ago quarter. The sequential decline in our customers was largely driven by our commercial business, our docks, which we acquired in December 2020, as a reminder.
We only count the revenue generating customers in the quarter and do not include customers or enacted during the quarter.
Moving to the income statement, our GAAP gross profit during the quarter was $32 7 million or 43% up from $28 9 million or 37, 3% in the second quarter of 2022 and up from $25 3 million or 43, 6% in the year ago.
Quarter.
On a non-GAAP basis, our gross profit was $33 million or 47% up from $29 1 million or <unk> 37, 7% in the second quarter of 2022.
And up from $25 4 million or 43, 9% in the year ago quarter.
The sequential increase in gross margin as a percentage of revenue was driven by a combination of third quarter seasonality with more working days and favorable FX trends with the stronger dollar.
non-GAAP EBITDA during the third quarter that excluded stock based compensation depreciation and amortization expenses related to geographic reorganization transaction and other related costs was $17 1 million or 21, 1% of revenue up from $13.
$3 million or 17, two person in the second quarter of 2022 and up from $12 5 million or 21, 6% in the year ago quarter.
The sequential increase in EBITDA, both in terms of dollars and percentage of revenue was due to a combination of higher levels of revenue.
Flattish operating expenses and favorable FX trends.
Our GAAP net loss in the third quarter totaled $6 7 million or a loss of 10.
Based on a share count of 69 million shares compared to the second quarter loss of $13 2 million or <unk> 20 per.
Our share based on 67 million shares and a loss of $5 million.
Our <unk>.
Per share based on 63 million shares in the year ago quarter.
The sequential and year over year increase in GAAP net loss was largely due to higher levels of stock based compensation and geographic reorganization costs offset by higher levels of revenue.
On a non-GAAP basis in the third quarter of our.
non-GAAP net income was $11 million or <unk> 15 per share based on 72 million diluted shares compared to the second quarter of 2022, non-GAAP net income of $8 2 million or <unk> 12 per diluted shares based on 70 million diluted shares and $7 9 million.
<unk> 11 per diluted share based on 69 million diluted shares in the year ago quarter.
The key reasons for the increase in the non-GAAP net income on a sequential basis or higher levels of revenue and flattish operating expenses. The increase in the non-GAAP net income and compassion to the end of the quarter was largely from higher levels of revenue, partially offset by higher levels of operating expenses.
<unk>.
Now coming to the balance sheet on September 32022, our cash and cash equivalents totaled $255 2 million up from $150 million in the second quarter of 2022 and up from $144 4 million in the fourth quarter of 2021 <unk>.
During the quarter, we conducted a primary share offering and raised $115 million of which $109 5 million was received by the company.
Coming to the fourth quarter guidance, we expect revenues to be in the range of $77 million to $78 million with this our full year 2022 revenue expectations will be in the range of $307 million to $308 million.
Our 45% to 46% growth on a year over year basis.
We expect our non-GAAP EBITDA in the fourth quarter to be in the range of 16, 4% to 17%.
Our $12 6 million to $13 2 million.
For <unk> 2022, we expect our basic share count to be in the $74 million to $75 million range and our diluted share count to be in the $77 million to $78 million range.
That concludes my prepared remarks, Ben we're ready to take questions.
Yeah.
[music].
Thank you rania.
That's what I go to the Q&A session of this call I will first Enel, Chile acquaint. Please on mute here alive and turned out a camera.
Our first question comes from the line of Josh secular from Cantor Fitzgerald.
Okay.
Okay.
Yes, hi, Thanks for taking my question and congratulations on the results for that so with concerns over global growth slowdown can you provide some updated color on the robust demand environment. Specifically you know your ability to continue to win new logos in this uncertain macro environment what comp.
Are you hearing from new clients that are driving them to your services. Thank you.
I don't think users it's always good to be first you can ask any questions.
So.
The feedback we're getting is actually what I mentioned in my remarks that.
The dynamics of the growth in multiple industries continues to expand geared toward the revenue generation as we know we all kind of heading to pursue recession inflationary born or other stuff too.
It's more about under a situation where winner takes it all.
So the competition for a dollar become more fierce and.
And we see that the digital services, we offer both engineering.
The customer service as well as the partnership with the <unk> companies become more vital to those secured in those revenue dollars for clients.
Excellent language for the color.
I want to dive a little deeper into the strong margin, we saw this quarter and the guidance of the board.
Especially considering your recent focus on building out its many geographies can you walk us through some of the margin tailwind that you would expect as we move into the fourth quarter.
Sure.
Sure.
Were you meant third quarter rate.
And then when we go into the fourth quarter, we really when you look at it.
There are some puts and takes you're right.
B plus.
Pluses, we continue to expect some tailwind from the on the FX side right.
Now on the other side if you look at the.
<unk>.
Size of the quarter fourth quarter as you know we tend to see furloughs, we tend to be having fewer billable hours, so youre going to be a little bit seeing some of the headwinds there. So when you look at the revenue Josh and actually extrapolate from Q3 to Q4, you could see we are going to have we're going to continue on maintaining some level of.
Opex control and the drop in revenue is basically kind of flows through onto the.
EBITDA front, you could see that but.
But largely the reason for there is.
A number of work days and.
Youre going to be seeing some level of conservatism in terms of some of the other customers.
I want to address that.
The Q3 results.
By and large where was I.
Given the guidance.
The public when we were hitting.
Hi Bureau.
More than two five years ago.
The 40, 40, 20, <unk> and very few companies can accomplish that.
It wasn't <unk>.
Our stretch goal than what we were hearing a lot of obstacles over time.
The World Normalizes, that's where we want to do that we believe will be.
When the time comes to the little bit more stable growth.
I think we just gave them an inspiration to the community to show, where we actually able to do it.
Yeah.
Great. Thank you very much.
Thank you Josh Thanks for your question.
Next question comes from the lie Hawaiian Poddar from Citi. Please go ahead.
Yeah, Hey, guys. Thanks for taking my question.
I want to start by touching on the situation in Ukraine.
Escalations there.
Infrastructure instability and some plant blackouts have you seen any incremental headwinds in terms of productivity utilization out of Ukraine.
Back to your client conversations at all.
Right so.
The short answer is no.
But.
It would be too simple to answer Ryan.
Months and months of hands.
We were preparing for the <unk>.
What is called <unk> is the year of the heating season right.
Centralized activities.
We of course did not know about the hardiness attacks Russians twice during October would renew when.
This whole situation with the infrastructure have been a little bit more stress during the war, we need to be prepared in advance, which warehouses knock on wood.
Our people are safe.
We're adding more micro offices throughout the country.
You actually plan to add up to nine of them Justin.
By the end of November reached are providing even further autonomous control over the <unk>.
Power generators water supply food supply.
Internet connectivity is a drug with Starlink and other services Sue.
We have a relatively smaller size of people. It is still the largest location by number but if you look at how we drive our business.
Dependency of enterprise businesses in parallel has been greatly reduced from the Ukrainian operation there are some of the.
More of the.
Business acquired from docs and little bit more driven by smaller companies startup companies, who are commercial will recall.
By a large we are blessed to be better prepared but you never know what's going to happen in the future of today, we're comfortable to say we are in good shape.
Got it that's good to hear.
And then touching on our vertical wells in the retail and GMC vertical in particular.
Brian real like the overall trends youre seeing in retail in particular is the softness youre seeing kind of a industry vertical of steam or is it more kind of clients or something like that on CMC.
CMC.
Focus on costs or higher presumes that once any change trajectory with your with your clients.
Well, we're not immune.
Retail is retail.
As we learned.
Listen Julian but early quarter days with such a.
Incredible decline of our relationship for short period of time with us in the boardroom stores, we took it very seriously a majority of our retail customers.
Or not as much dependent on the.
Brick and mortar stores, so they're a little bit less affected but are more efficient and there is a blending to go into the.
Recession mode.
Plus don't forget workflows.
Holiday season at the same time.
The usual suspects are putting restrictions.
Same suspects were there two years ago.
Where you were two three years ago. So there is a sequential decline.
Driven by cost savings, we expect it's going out less some period of time.
But we are compensating them with steel and other businesses.
Other very important quarter for retail.
We do again is majority driven by features related to the new generation.
<unk>.
I wouldn't.
While in the chest and say what are the most critical supplier we have but in many cases the core team still remains intact, which means gives you more expectations.
Yeah.
Industry comes back.
Rebounds faster.
Those particular regions.
Got it thanks again.
Thank you.
Thank you.
Next question comes from Maggie Nolan from William Blair. Please go ahead.
Hi, Thank you.
Maybe to follow up on that last topic, a little bit can you talk about how your retail client base comparison to what it maybe it looked like a couple of years ago in terms of any notable differences in the type of clients that youre working with now or type of project.
Youre working on.
Yes.
<unk> well by now and in the constant communications shoe.
The critical path client relationship on the retail comes from the.
Pricing logistics supply chain management, some key data analytics factors areas of efficiencies on rebalancing supply price optimization et cetera et cetera. So those are key areas of our relations.
When it comes to.
General distribution declines, we actually while reducing overall revenue from the.
<unk> on the retail we brought a number of plants both in the U S and in Europe .
These clients tend to be more modernized in terms of their relationship.
Minimizing the impact for example of very painful layoffs right. So during the Covid time, they had to shut down the stores. So the massive number of people had to let go of him as employers employees of the retailers.
We don't see.
Again, the distribution is different.
Because of the product is different.
Other thing, which you've noticed again, there's some subtle too but I think it's notable.
We have a fewer U S based employees.
Good and bad with that but with retailers in particular, we started with a lower cost.
And it comes from near shoring, such as Mexico, and the <unk>.
Jamaica, but it's also offshore and we're adding Indian couldn't change into that so we're not only prepared from the client base doubled product base, but from the cost efficiency when we relate to the retail airplanes.
That's really helpful. Thanks, and then.
My follow up question is just can you elaborate a little bit on what you that can streamline the engineering bench at the now referred to and then are these efforts going to continue into the coming quarters.
Yes Sue.
Some of the bench.
Related to the transition from.
Q2 to Q3.
Russia was kind of catch up some of those tools. So.
There was one area.
The other area is that we.
We tend to look at again.
Our bench with the skill sets, which we.
Project to be less relevant.
The.
Recession time to be more efficient.
But at the same time, we have an incredible investment.
<unk> programs.
Everywhere across all the countries, obviously, including Ukraine and other.
Others.
We signed the University partner shortly here already in Mexico.
Of course bullet for minor Armenia.
The other investments, which we do quite a bit.
We believe it's a perfect storm for us to continue to invest into the R&D.
Into the sales and development.
Our subject matter expertise there is much more upfront preparation for our innovation.
Moses So one thing, which I mentioned in the remarks, but I think it's very important to reiterate.
In answering the first question was you know as our clients come to the time where winner take it all.
I think on our peer group it also relevant with our business, so having a stronger more efficient front end organization with more customer consultancy capability architecture capabilities.
Adding like life science and farmers keep coming it's a great. It's a great no Andrew we had one big customer in order to customers is growing.
Quite a quarter.
Acceleration that's affected so when you look at the total head count that's one the other one which is not noticeable here, but it's also relevant there was some.
The commercial clients from the former docs, we shared some headcounts.
We we had to replace or reduce because there were less relevant for us.
Several customers, which we decided not to continue relationship mutually because we were virtually.
Renaissance of the old pre acquisition time.
Which made no sense for both parties. So if you look at the billable.
Relevant bench, because actually it has grown but if you look at overall, we see a modest.
That's really helpful. Thank you and congrats.
Tumors.
Thank you Ravi.
Next question comes from Panic Chan from Casey Martin Your line is open.
Thanks for taking my question so.
So let me like the what are the projects that typically get any like.
Like in retail vertical all other verticals given the macro environment.
What's your line of sight, maybe based on the past experience when stuff got delayed but your line of sight on.
Bank clients come back with those projects typically like how much like of a lag or duration should we can say that in terms of like the one that gets delayed.
Moving on.
Somewhat February so there are some.
Some few notable declines which maybe.
Not as material most of them happens more temporary so.
We get we get ourselves into conversation with the senior leadership because obviously.
We want to make sure not only.
It was discontinued but they are projects will be continued because we can't guarantee you that keep the banks just to wait for the.
<unk> return rates too as I mentioned earlier.
We most of the time negotiate the core team.
And we understand from the past.
Recessions and declines it's very critical to maintain continues.
And Thats, what we provide but then in some cases.
We find alternative brands.
There are some more critical area and.
Our customers would like to achieve in the workplace.
If you look into from the Big Fissure perspective, we're still a fairly small company.
As one of the very key clients.
You got it.
Our good and will be good.
<unk> all your geographies one of the big conventions area described many of them as India, because your two sigma will be shifted to the right in other words, the strict standard deviation or the value of people, who will remain to be much more technically sophisticated regardless of the locations. So that gives.
This little bit of leverage with our clients and of course, there are many more color points I wouldnt be able to provide by the end of Q4, because there are some discussions to undertaken we are entering this difficult for the industry period.
A bit more.
Concord underwear yesterday I was privileged to be in a small conference where you are.
Distinguish leader Jamie.
Jamie Diamond and.
In a small group of people, who was saying that regardless all the World Show instance, United States has probably been more shielded one because we owe that to ourselves.
Spend money, which we built into our savings accounts more than ever with other people need to cover the debt with the dollars they need to earn recovery the depth we have there.
That's very much resonates with my thinking about how we approach our business.
And then second for you.
Our tech vertical it was great to see like the vertical being so strong despite.
All of the news flow around hiring phase layoffs at some of the large tech companies.
How should we think about like the defensiveness of the working for your technology clients like the nature of work that you do.
That's driving towards that's relevant for clients.
Or is that like just the type of projects like.
That's changing within that vertical maybe youre doing more cost saving projects for them instead of maybe digital transformation in the past.
What's driving strong growth in tech and how defensive that can prove doing well.
I don't want to anger big tumors that I'm going to go into a lot of details.
They are probably going to read the transcripts as well so I'm not going to say my guys are the best.
That's correct.
We have very high capability.
The most important part I know there there are some of the.
Other earnings calls.
Last few days in there.
Some of them most of them.
I don't see that.
Cost savings from the big check cards.
Of course, the cost saving is there, but it's all about mainstream operational capabilities. So when I talk about one of the largest customers. There is a lot of articles where the.
Good.
Handsets are produced and how it would work and what's the supply chain logistic. We've been we're proud of those kind of elements also.
Very humbled we are.
Elevated two very senior level people some amendment scary when you get to the Toronto.
Very large decision made a multimillion dollar project, but they take it seriously because again, we're equally contributing to various strategic elements and those elements are growing.
So I would not say we are in a defensive develop equipment for the cost savings I think are again driving the key elements witness to S&P areas, which today are related to the manufacturing supply chain logistics is their e-commerce there.
<unk> areas and that's just what we do so digital is still there, which we can talk forever. What elements are enrolled what I'm doing is very bullish that this.
Despite all these challenges our core value remains to be.
<unk> unwavering.
Thank you.
Thank you.
Next next question comes from the lives of our Bryan Bergin from Cowen.
Please go ahead.
Hi, guys good afternoon, and thank you.
So you had good strong momentum here in the new logos that you're citing there I'm curious are the priorities of these new clients the programs that youre engaged with them is it any different with these new engagements relative to your existing base as it relates to efficiency programs versus those cyclical growth in revenue generation assets.
That brand the disadvantage to be later in the queue.
Okay.
To answer this question already several times.
But I know, where it's coming from and their respective I think.
The efficiency portion.
Legs beyond the revenue generation just the ways how revenue is being generated for some of those notable clients are very different I would not divulge into the specifics because it's very sensitive to their specific strategies, but I have to assure you what they are asking us to do is revolutionary different.
From how they generate the business before don't get called by very senior leadership to provide services for.
For something.
Linear because they are playing jokes suppliers of doing this so it's it's really truly aligned when we've done and some other businesses as well.
Okay.
And then just talk about current visibility in the business that you have is it any different right now versus a typical year at.
At this stage of the year any early indications as you think beyond <unk> any guideposts.
Yeah, Yeah been prepared so that you already asked this question to one earlier conference today right.
I.
I could ask a nuc to repeat the question, we see the growth of the return to profitability.
Alright.
Increased revenues starting second half of next year would be the pleasure isn't so I'd ask you not to say that to you, but we see similar trends.
In terms of the Q4, you have noticed we came up with a very modest declines from Q3 into Q4 sequentially.
Sequentially.
It's a bit unusual for us.
And the reason we've done it because even there is a little bit of a variance of visibility. So it can have a December was Q4 lows.
Again, we're still a smaller company with a big company.
The variance in enrolling this holiday season may make an impact so I'm not implying that our number preserve way too conservative there somewhat conservative.
I believe that there would be some.
Right.
For the battlefield for the ground.
<unk>.
I wanted to just maybe drill into utilization where was it in the current quarter what are the credit on your expecting given maybe someone to moderation in demand and then I guess, what I'm really getting at is when do B C hiring ran back up.
In terms of when you seek demands Dr. <unk>, how much sooner do you have to start wrapping up recruiting to be able to meet that demand. So it'd be a couple of questions sort of all lumped in around utilization and recruiting plans.
Let me answer the easy boards.
<unk> struggled with the numbers right. So the recruiting the room has not been feeling the.
<unk> modified in terms of the regional strategy.
There are areas, where we continue to push very hard for the group one of the notable example, it is indeed you know the contract surely people are required to stay for several months before the they can change. The you know the job to those offers are being.
<unk>.
So those places we definitely continue to push for expedited rollout.
Lola Lola there's another good example of this because we believe that you know.
<unk> early part of next year will see that's kind of you know the churn and then we need to run very quickly as in.
I don't want to run unintelligible, so we need to <unk> people with very high technical level of training, so you'll see a little bit of this gap because we're not only hiring reached insurance, but we are planning for the bench now as we become bigger needs to become more intelligent because my inspiration is going to.
A significant increase the revenue of the company. So we need to play a little bit of a long passage throws right. So to catch on that and you know the zone of your competitors. So we need to wrong, we prepare the the new cable deal with it. So the bottom line, we have not slowed down on the strategic.
<unk>, we're not slowing down on the training of the people you just see the Sim three adjustment of the workforce. So just <unk> and of course. Another thing is we are much more competitive upscaling of hiring so we can hire on various locations.
Four will be adding new countries again, I I wanted to save some sensations in three months otherwise too boring, but we plan way ahead of the time in various locations as well, but now the yep. So does yours, so make when it comes to utilization. This butter. It turned it up related to the next corner my prepared comments.
Talk about the billable headcount growing up and we talked about the bench and you'll get there so <unk> moving.
<unk> alright utilization Linda.
Alright.
And then maybe just turning the supply side, given that again that seems to be some moderation and demand that does tend to eat some other supply pressures. So could you just talk about where I Christian is today your expectations around that and do you think wage inflation might also start to maybe he's a little bit which had health profitability in the face of maybe slightly slowing demand.
It's interesting if you look at the.
You know you know the cyclical behave or during the Q3 and starting in Q4 demand is not flooring.
The man is continuing to be strong.
I'll make some of the existing business there is.
Some softness right. So there is kind of read.
<unk> right.
That's a bit more difficult task than just <unk> <unk> <unk> <unk>.
So we were doing well in terms of the.
The the supply.
<unk>, it's probably one of the lowest level the volunteer information as we experienced.
In certain regions, they're comforted region, we're helping people tremendous there's no reason for people to run.
And other regions that people that needs to pay some of the sources.
Some other places where <unk> with a very well newly hired area advance leadership team. So people are kind of walk into us to see if we're gonna be any different from the other employees.
So.
<unk> <unk> you know.
Overall, I feel very comfortable this morning.
Alright, <unk> a number of point of view, we're not gonna put it but.
To me voluntary winter.
Last couple of quarters, obviously, we had some involuntary component is we moved out of some places but is Linda Inglis Ma's dropped from a voluntary point of view this book.
Alright. Thank you so much for taking my questions.
Thank you. Thank you ma'am.
Okay. Thank you bye.
At this point and we have no more questions.
<unk> session for today.
Has to call back to that or just for the closing comments.
Thank you everybody for joining us on a call today.
Sounded results and performance.
Our company is strong value to customers and incredible resilience our track record of successfully delivering large and complex projects and I'll repeat game show as a high end engineering provider is driving our growth.
I'm confident that in.
In the course of 2023 will continue to see strong momentum.
Company continues to expand our relationship with global enterprise customers look forward to giving you a business update early next year. Thank you.
Ladies and gentlemen.
Today's conference call. Thank you so much for participating.
Disconnect.