Q4 2022 AgileThought Inc Earnings Call
[music].
Please standby were about to begin.
Ladies and gentlemen, thank you for standing by and good afternoon, and welcome to agile <unk> fourth quarter and full year 2022 financial results Conference call.
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I would now like to turn the call over to Mariana Franco the company's head of Investor Relations with Franco. Please go ahead.
Good day, and thank you for joining <unk> fourth quarter and full year 2022 earnings conference call.
Our speakers today are Manuel Sandoz, Chairman and Chief Executive Officer.
M a C chief financial Officer.
Before we begin allow me to remind you that some of the comments on our call today.
Moving our business and financial outlook and the answers to some of your questions. Maybe go see their forward looking statements.
Such statements are subject to the risks and uncertainties and describing the company's earnings release and other filings with the us.
They can take the visco when they sign sensitivity information that is accurate only as of today March nine 2023.
Except as required by law I always thought disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur.
After these calls today's remarks will also include references to non-GAAP financial measures such as adjusted operating income and I guess isn't that Ingo would.
Would you how we track performance internally and the easiest way to compare I guess, that's all our peers in the industry.
You should note information, including reconciliation between non-GAAP financial information. So they got financial information is provided in the associated earnings release.
This conference call will be available for replay via webcast through that you'll talk to me that's the relations website.
I R, but I always thought that to come well you can also find a copy of our earnings release.
I'd now like to turn the cold weather in the North and Oh I see.
Thank you Martina and thank you all for joining us today I.
I am pleased to be here with you to talk about our fourth quarter and full year 2022 business and financial performance.
As well as our outlook for 2023.
As we mentioned during our last earnings calls, we have been investing heavily across our sales delivery and people functions, which together, we believe will enable us to achieve industry, leading top line growth and margins.
In sales, we have increased our head count by almost 50% in the last few months and with an even more increasing our selling capacity.
We still have a few more higher spending, but we strongly believe that as the new sales team members ramp up in the coming quarters, we should be able to materially accelerate our topline growth.
I've also been encouraged by the quality of talent, we have been able to attract somebody from the leading multinational digital services firms. This new hires along with our executive management team and the board well see the peer path in front of us industry leadership.
Okay.
And deliberate as we have discussed in the previous quarters, we have developed an industry, leading delivery model and strong technical and operational talent that Ken along with our industry experts in the market units delivered to our clients the best consulting design and software development services in the market.
And the delivery function just Hudson sales, we continue to attract very strong talent from the leading digital services firms globally.
Or people function a few months ago, we completely reconfigured our team with a strong focus on reducing attrition and building strong hiring capacity and creating robust value proposition for our employees to help them build a stronger and fulfilling career path within our company.
It gives me great pleasure to report that we ended the year 2022, and attrition levels, which were almost half of what they were at the beginning of the year.
Lastly, alright.
Alright attrition is at industry leading levels.
In addition, now are people function is in a position to buy us strongly to fulfill the robust demand we expect in the coming quarters.
While we expect this investment to show the real results in the second half of the year, we are already starting to witness the benefits, allowing us to close 2022 with a strong quarter.
We reported a solid fourth quarter for 2022.
With revenue totaling $43 1 million above our guidance, representing a two 3% year over year growth and with it we totaled $176 8 million in revenue for the full year 2022, representing.
Representing 11, 5% organic year over year growth.
A little color on our 2022 full year revenue growth.
We have in the past talked about two of our professional services vertical clients.
Which have been declining in revenues maturity over the last two years due to the impact of COVID-19.
Strategic long term business decision by our company and our ongoing efforts to remove noncore work from our portfolio.
The two accounts together represented close to $50 million or almost 30% up our revenues.
A couple of years ago, and now represent below 10% of our revenues. Moreover.
Now our exposure with this to clients is completely digital and we expect them both to stabilize and grow in revenues from here.
We exclude the revenues from this to clients in 2020 to our overall organic revenue growth was 20% plus year over year in 2022.
Health care at a TPU retail were our fastest growing verticals in 2022, with 49% and 21% year over year growth respectively.
An 8% sequential growth for the fourth quarter 2022.
Im also excited to share that we've made important improvements in profitability this year.
Our gross margin for the full year 2022 was 32, 6%.
Above our guidance range and representing a 340 basis point increase from the previous year.
Our CFO Amit Singh will share more on this later.
We are frequently asked about the demand environment and whether we see it slowing down the truth is the digital transformation market is still expected to continue growing and accelerating its growth.
Fortune business insights recently released their updated the digital transformation market, whereas they projected to grow to $6 78 trillion by 2029.
We also continue to experience a strong demand environment from our current clients and I think staying close to their business and offering them. The right solutions for their specific stage of need has made a difference.
An example is a client in the health care industry, one of the largest insurance companies in the U S who had information from its customers Wearables and was not sure how to leverage the best.
By immersing ourselves in the clients' business needs goals and competitive landscape, we discovered together with them. The best use of that information. We initially aggregated the Apple health kit and Google Health connect data into AWS to make it available to the providers.
This offers them a more complete patient pro pilot with additional information to that observable Julian the examination.
The access to the mention database will ultimately result in more accurate diagnosis and prescriptions.
That's forming that and stronger provider payer relationships and savings for our client.
Next we will create a dashboard of the database to simplify the process and make it easier for providers to reach and manage the information which will increase its utilization.
As with this client will continue to strengthen the relationship with our existing customers in every vertical while the majority of our revenues continues to come from our existing customers. We also continue to add new logos to our portfolio.
Strategically focusing on those players who may become large relationships that can grow and scale.
During the fourth quarter of 2022, we added three new logos to our portfolio.
Totally 21, new logos for the full year 2022.
We have talked about the investments changes in additions made to prepare for our future growth now.
Now that all the pieces are in place, we want to reintroduce ourselves onto a new fresh bread.
I am excited to share that we will be revealing a new brand. So what that really represents agile thoughts vision purpose and spirit.
We wanted to remind you all that we don't just want to work we want to focus on doing the right work and we want to raise our clients work to be up off the rest.
Let me give you an example of how we continuously help our clients to exceed expectations.
One of our clients, which offers a platform that allows users to buy and sell fine art with crypto currency needed help implemented its blockchain solution to make art ownership more accessible to the public and expand the market to more buyers.
Together with our partner block spaces, we conducted agile blocks it set off and two blocks in advisory and development services.
We started by determining the level of effort needed to build a blockchain solution and.
Created a cutting edge prototype of a solution that will allow buyers to buy a percentage of fine art and appreciate value over time.
The prototype is backed by a beautiful blockchain technology to handle all cryptocurrency deposits and withdrawals, which will create a permanent ledger a beach or transaction.
Additionally, I just thought custom developed from that experience and the database to handle the majority of the platforms key functionality.
Creating user accounts viewing art on the screen and even enabling.
Order rates, which will give users the ability to bolt on and agreed to the true value of a piece of art.
We plan to continue accompanying our clients' journey, providing innovative launch a blockchain solution.
According to IDC.
Cloud acknowledged presentations will continue to play an even greater role across the industry, Yes enterprises people to a digital first economy.
As it is and will continue to be key in their digital transformation journey.
During 2022, we started investing.
Lengthening our cloud cyber security Guild, and continue accompanying our clients and their cloud transformation journey.
While we cover all the key areas to assure success technology people processes and of course business.
We can discover design and finally delivered the best solution for each client whether it is building a cloud native application or migrating their corn workloads to the cloud.
IDC estimates that by 2025, 70% of enterprises will adopt cloud once and transit networks to improve the availability latency performance reliability and scale of the cloud and edge applications and workloads.
We are enabling our clients have turned to cloud as their future operating model and help them transform their business and the way they interact with their stakeholders.
I see the company grow I am aware that for growth to be sustainable we need to grow responsibly, we always saying higher and the future is not the exception for that reason, we will release, our first ESG report and goals soon.
Nigel thought we've always been committed to our people the environment and the communities around us and integrity has always been part of our DNA.
We understand that sitting down and watching will not make a difference we need to write up for a better future.
The reported what percent of our vision and long term goals and will bring together all the initiatives and ongoing project, allowing us to work towards that.
Rice up our ESG model, it's about our commitment to work towards becoming a net zero company, giving everyone equal opportunities to learn grow and succeed in agile.
Paying it forward to the community and develop effective accountable interest bearing institutions had all levels. So does the right thing as we navigate all kinds of challenges and opportunities.
Now I will turn the call over to Amit Singh, our CFO , who will provide additional insights into our financial results.
Thank you Manuel and good afternoon, everyone. Let me start by summarizing the results of our fourth quarter and full year 2022.
I will then discuss our guidance for the next quarter and for the full year 2023.
Revenues for the fourth quarter were 40 311 million, representing two 3% year over year growth.
For the full year revenues total $176 8 million above our guidance and representing 11, 5% organic year over year growth.
As Manuel mentioned earlier this growth is 20% plus organic year over year. If you only include the revenues from two professional services clients that had been declining, but where we no longer see a big exposure.
Now on gross margins.
During the fourth quarter of 2022, we delivered gross margins of 31, 6%, representing a 190 basis point improvement year over year.
Gross margins for the full year 2022 were $32, 6% above our guidance range and representing an improvement of 340 basis point from the previous year.
As a result of our strong collaboration between finance and operations, we have put in place a very robust deal governance process, which along with our ongoing exit from non core revenues should continue to help us improve gross margins year over year, while we still continue to make investments.
And just to the operating income for the fourth quarter of 2020 June was $5 1 million, representing 11, 8% adjusted operating margin up from <unk> 4 million on the same period of 2021.
Adjusted operating income for the full year 2020 June was $11 4 million, representing six 4% adjusted operating margin and a 218% improvement year over year.
Adjusted net income for the quarter totaled $1 6 million, representing three 7% adjusted net income.
Margin up from a negative $2 1 million from the same quarter of the previous year.
Adjusted net income for the full year 2022 was $2 7 million, representing one 5% adjusted net income margin of 142% improvement year over year.
Adjusted diluted EPS for the fourth quarter of 2022 was <unk> based on $46 5 million average diluted shares for the quarter compared to a negative <unk> <unk> for the same quarter of the previous year based on $42 4 million average diluted shares for the quarter.
Adjusted diluted EPS for the full year 2022 was six cents based on 47 million average diluted shares.
Moving onto the balance sheet, our cash and cash equivalents as of December 31, 2022 added up to $8 7 million.
Every December we have a material cash outflow event as by law enterprises in Mexico are required to pay and Christmas bonus to the workforce based in Mexico.
As you know majority of our workforce is based in Mexico.
During the fourth quarter of 2022, we spent around $2 5 million on this payment.
Now, let's talk about our outlook for the first quarter and full year 2023.
We remain focused on executing revenue growth acceleration and we will continue working towards improving our profitability year over year.
We will also continue to focus on strategically selecting the right customers and projects that help us deliver industry, leading growth and margins.
Our successful efforts to exit the noncore business as we announced a couple of quarters ago should be completed in the first half of 2023.
Which along with the ramp up of all the new sales team members should lead to strong revenue growth towards the second half of the year.
For our first quarter of going into 'twenty, three we expect organic revenues of at least 40 deep one 2 million.
We expect full year 2023 revenues of at least $201 6 million or 14% organic year over year growth.
Gross margins in the range of 33, and a half to 34, 5%.
Thanks, everyone for participating in the call I'd like to turn the call back to Manuel for any closing remarks.
Thank you.
In conclusion, we plan for 2023 to be the year, where we integrate the investments and changes made you in the previous months.
Revenue growth and increasing our margins, we expect to show continuous improvement in the coming years as we benefit from the strong digital transformation demand across the world.
And with that I'd like to turn the call over to the operator, so that we can begin the question and answer session.
Thank you Mr. Some barrels ladies and gentlemen, if you wish to ask this one last quick question on today's call you will need to press Star then the number one on your telephone.
<unk> has been answered in English to withdraw your question May do so by pressing star one again and if you are using a speakerphone. Please pick up your handset before entering your request and speaking on the call. One moment. Please for the first question.
We will go first this afternoon <unk> Tandon Needham.
Thank you good evening, Congrats Manuel and Amit on a strong quarter and outlook I wanted to start with your guidance for fiscal 'twenty, three the 15% plus growth that youre forecasting which is fairly impressive in the midst of this sort of uncertain macro could you maybe parse it out a little bit more in terms of what other areas.
Seeing strength in terms of verticals or services, and which areas would you call out as maybe seeing some incremental softness to give us a better feel for how the different areas are aligning for the year.
Absolutely. Thanks for the question participate.
So we see we see is very strong.
Demand coming in from our health care industry.
And our financial services sector as well our industry.
Both of those have incremental growth within existing clients, which is significant and we've seen that even chrome from Q3 to Q4, and we're seeing that in Q1.
We are investing heavily in it and increasing the sales teams specifically in those industries as well because we see that demand coming in strongly.
We don't have a lot of exposure into the technology.
Industry, which is where others might see softness.
So although we are.
Interested in participating in that industry for now it's not a big chunk of our revenue. So we're not seeing softness in that area, but we are seeing good good healthy strong demand in all of our other industries.
That's helpful. And then just as a quick follow up I wanted to ask maybe for Amit as you think about the growth for the year, how do you square that with the pricing trends room for maybe expanding utilization and head count how do those three factors play into your forecast for the year in terms of revenue growth.
So.
Yeah.
Yes.
Yes.
Yeah.
Alright.
So thank you for the question as you move forward, obviously, we expect pricing trends to be at least in line with wage inflation.
If not higher as we are going through.
Overall process of exiting non core non core work plus continuing to work with our existing clients to increase our overall pricing and driving gross margin improvement. So we expect a strong pricing trend throughout the year.
Utilization for US continues to remain in that mid eight ish percent I mean, obviously from quarter to quarter, it's going to fluctuate.
<unk> feel comfortable operating at that level and I believe that makes sense.
Along with strong demand that we expect.
To be boosted by our increased sales force plus strong pricing both in new work and existing work and then.
And industry level utilization rate gives us confidence in the guidance that you provided for the full year.
Great. Thank you for taking my questions.
Yes.
Thank you. We'll go next now to Bryan Kimzey Linger at Alliance Global partners.
Great. Thanks, so much for taking my questions and the first question is on visibility of revenue at the mid and high point in 2023 guidance how much the midpoint is coming from signed contracts for backlog that we're going to find it and to reach the high end is that a faster ramp of new programs already won or does it depend more.
On new business trends over the next few months.
So I would say the guidance that we have right now the full year guidance that is strongly supported by our existing.
Customers so as you know.
In our industry and especially in the dollar company in the past 90% of our revenues in any given year are around 90% of our revenues in any given year comes from existing customers. So the current guidance assumes a similar.
But that being said.
And we have like Manuel mentioned, we have increased our sales force by you.
And almost 50% and as that sales force becomes.
Effective or.
Becomes by the middle of this year, we could possibly see more revenues from newer clients this year than in the past.
But.
And we'll update the street as you move forward in the year.
Got it that's helpful. And then my follow up is if.
If you can touch on the progress you're making in recruiting in past years quarters. It wasn't inhibitor inhibitor to the topline growth is it still the case or where are you with that progress.
No that's a great question Brian .
As we've mentioned before we've invested heavily in <unk>.
Revamping that whole function the whole people function actually so over the last eight months where practically.
Practically changed the whole team and brought people.
Actually leadership that has operated at much larger scale than we have there.
They themselves put in place different processes and changed talent underneath them implemented.
Implemented technology and implemented.
New ways of attracting people. So we see that already in the attrition coming down significantly, but we also see that in and the attractiveness of bringing people onboard for right now.
Sit here, we feel we have more than enough.
Recruiting capacity for much larger demand at what we're forecasting we purposely overbuilt, the recruiting capacity and people function.
That would not become.
A constraint for our growth and that is where we felt confident now to really increase the size of our sales team by more than 50% because we felt that that component was already solved for and now we could press on the accelerator and how does that work.
Hi.
That's great to hear I have one quick follow up if I could on a number just a quick number I saw the filing.
For the first amendment trying to first lien Theres an amendment I think you paid a fee in kind. So can you tell us how many shares are outstanding as of today given the.
Those shares issued.
So the paid in kind fees is it gets added to the principle of the debt and that is towards the maturity of the debt. So there's no shares for that is it's a it's an actual dollar amount just increases the principle of the debt understood.
Thanks for the clarification yeah.
Yep.
Yeah.
Yeah.
Thank you and the next now to Joseph Buckley at Canaccord.
Yes.
Just.
Maybe we get the kind of real time update on that.
The exiting of some of the non core clients I know, we've got some extra color on that now does that feel like it's on track.
On the schedule you were conveying.
Conveying before do you think that were perhaps moving a little slower a little faster on that and I'll have a couple of follow ups.
We feel good about the progress I wanted to actually to share an example to make that.
More clear for everyone. So let me talk about one of our large.
Accounts Walmart.
In Walmart, we have a long history with them working on on.
Different types of projects, but some of them had lower value added that we provided and consequently, lower margins. So, let's say around 10% gross margin, but on the other side, we have a much much larger.
<unk> with them, which.
We have just signed.
With 40, plus gross margin so we've allowed that.
Low margin business or no value added business to run all the time, we haven't renewed we didn't renew it with them, but at the same time on the same month, we signed a three times larger.
Contract with them for high value at <unk>.
Services in the data space with them with the appropriate gross margins. So we think we're on track we think that.
We will continue to see those improvements come into the gross margin as we've already seen but we will see that accelerating especially on the second half of the year.
But we feel pretty good about making that decision.
Because our target gross margin is to end up at some point very close to 40%. So we think we're on the right track and we think we're making the right the right call and doing that.
Okay. That's helpful and then on mix.
Digital transformation projects is really pretty unique are you are you seeing any opportunities to do more fixed price work.
And in your newer book of business and then also just was was curious on the new brand a little bit what you're trying to convey with the new brand and the branding and what.
What the strategy might be in a role that brand out. Thank you.
Okay.
Okay.
Yes, I can I can chime in on the brand part so we're not changing the name or anything were just refreshing the brand to make it a more cooler technology type.
Rand.
Yes.
More adapt to the type of company, where we have become.
Now with that I think it's good to do a good refresh we have a good internal team that does all of that for our clients who are using the opportunity to do it for us as well.
But you won't see a name change or anything you just see something much much cooler I hope.
And then I mean, if you want to.
As for the other part of your question.
Joe If you don't mind, just repeating what was the first question again, sorry and lost some audio now.
Yes, no worries.
Wondering if youre seeing any opportunity to move any digital transformation is a little different than than other services, but any opportunities to move up any kind of fixed price type component to your mix. Thanks.
So we are definitely working a lot on outcome based or pushing more and more outcome based type of projects were.
It's more.
More about helping the clients drive the topline in half there.
And provide the right solutions for them to be competitive in that market rather than more focused on.
Right.
Just the number of people and all of that so.
We're seeing a lot of that change happening throughout our work obviously all of those in the end, it's still priced more on time and materials.
If you look at our resolve the way the operating just shows a higher fixed price and that that actually is more some regulations related because because in Latin America, a lot of our projects by regulations need to be priced as fixed price.
So even though they are structured as fixed price.
They are they are put in sort of short time duration. So in reality the act more like time and material, but but for reporting purposes, they're more like fixed price, but beneath it all a lot more focus towards outcome based.
And solution delivery.
And that's the trend we're seeing.
Great and then maybe maybe I'll just sneak one more in I mean.
The analyst here, where you hear a lot about the macro we hear a lot about the macro in the U S and I know you do.
Do have some business in that.
Mexico, and the rest of Latin America, which just wondering how clients.
And those geos are responding to the macro thank you very much.
Yes, it's been pretty interesting we've been super disciplined in Latin America to focus on the global clients.
So, especially Latin America, I would say the real global large banks and some of the global retailers and so we've seen pretty stable to growing demand in Latin America.
A little bit on the FX for Mexico helps us on the revenue.
And then the FX.
In other countries helps us on the on the cost of these services, we export into the U S.
But generally the clients.
We keep very disciplined and the right type of accounts global accounts, we see the growth being pretty much on par of what we're seeing elsewhere.
Thanks Manuel.
Sure.
We'll go next to Josh <unk> of Cantor Fitzgerald.
Yes, hi, good afternoon, thanks for taking my call.
So year to date and has there been any shift in terms of the commentary from your clients in regards to how the macro is impacting demand for your services and how do you expect existing client spend the change if the economy were to slow further thank you.
Yes, I would say again from the type of industries that we participate in we haven't seen a shift down two to spend.
Financial services, especially the large ones.
<unk>, which are as you know as well pretty pretty large they have a big backlog of.
Digital transformation work that they need to accomplish.
Just to become competitive and remain relevant.
So we haven't seen we haven't seen any slow we've seen actually very good opportunities to open up in new accounts and a new large banks.
Where they are pushing harder on the digital transformation.
Our Latin America delivery model.
It has become more and more.
<unk> for a lot of accounts as well as the geopolitical tension.
In Asia and even in Europe .
Show that there's a lot of risk for them to have all of her things concentrated in one area. So Latin America or all of a sudden becomes a very interesting place for them to start growing there.
Work, so we've seen that openness.
Really heavily recently I don't know if you have.
Guys have probably heard but the lack of Tesla for example is opening a new Giga factory in Mexico.
That type of mentality, we are seeing elsewhere with other.
Companies working on digital transformation, whereas before they would not think of doing things and in Latin America that will go straight to Asia, maybe India or China, and we see Latin America, Latin America become very interesting for them. So it just makes our job a little bit each year.
Great. That's helpful color and then I was wondering if you could expand upon as Youre ramping up head count do you also expect to see any impact from wage inflation at Samsung.
I think the wage and wage inflation in the last few years has been has been pretty high as everyone is aware.
Sure.
But I think.
We're not really seeing that sign right now, but given how the tech industry has been evolving maybe we could see some.
Tampering down or slowing down of the wage inflation.
But that being said in the past few years of innovation vision was high we were also able to drive the highest pricing. So I think it goes very much very much hand in hand.
But that being said you know that the overall demand for talent in our market.
That that always that remains.
Hi.
This industry will always have some sort of a.
Stronger wage inflation compared to sort of rest of the market.
Understood. Thanks for taking my questions.
Thank you.
And we'll hear next now from Maggie Nolan of William Blair.
Okay.
Hi, Thank you and congrats great to see that revenue guidance out there for the next year here.
Thinking about that sales ramp it's going to be a nice tailwind for you in the second half of the year I'm curious if that was new additions are going to be close to fully ramped are productive at that time or is this something that we could see continues to be a tailwind into 2024.
Yeah I mean.
First of all thanks, Maggie thanks for coming.
Yeah, we.
We on boarded most of that team.
Early early January of this year, so they will become productive and some of them are already becoming productive.
The second half, that's where we see there.
The biggest push we already we're already seeing it in pipeline buildup significant pipeline buildup of significant visibility into that second half. So we're we're pretty happy about that for sure that will.
Have a good tailwind into 2024, because we will have the full year benefit of that increased sales team and as well obviously, we will continue to to acquire.
Uh huh.
The slower pace salespeople throughout each quarter as we meet certain thresholds we have.
<unk>, we will continue to expand the sales team.
So yes, we were really focused on on driving accelerating growth.
That's helpful. Thanks, and then.
You just mentioned you're going to continue to invest there. So when you think about margin expansion I know youre expecting gross margin expansion from your efforts in digital in the genomics.
But what about at the operating level are you able to drive some leverage there.
Over time, and what is your outlook for that.
Yeah, I mean, so again Maggie thank you very much for the question. So as you as you saw in the guidance we're expecting.
Strong gross margin improvement and hopefully we can do.
We can continue to drive that and the goal is on the gross margin side to get you closer to that 40%.
Quickly.
On SG&A, because we've made investments towards the end of this year and especially at the beginning of this year a lot of that getting sort of recognized at the beginning of this year.
Well, you should still see year over year SG&A as a percent of revenue improvement this year.
But that being said you know SG&A as a percent of revenue will still be mid <unk>.
Mid to high 20%, but there is an opportunity to bring it down to closer to 20% very quickly also.
As as our overall delivery delivery infrastructure capacity infrastructure and sales infrastructure. All the core investments are now done right now that now the investments from here are more linear to our growth and this is where along with five you start driving efficiencies in SG&A. So.
Our long term goal is to bring that are hopefully near term goal in the next few years is to bring that SG&A as a percent of revenue closer and closer to that 20%, while we drive our gross margins to closer and closer to the 40%.
Thanks, Matt Thanks Manuel.
Thanks, Matt.
And we'll go next now to Ernesto Gonzalez at Morgan Stanley .
Hi Mara.
Marianna. Thank you so much for taking our question.
One have you seen any shift in the type of projects that clients are demanding for example, more focus on cost efficiency projects and does this have any impact on pricing and margins.
Yeah.
Hi, so thanks for joining us so no we haven't seen.
Projects on efficiency focus on efficiency. We believe we are playing with the right type of projects, where we add high value added and it's more about the front office more about making the customer more competitive.
About making them.
Standout.
And Thats, where were focusing our team and we're looking for problems to solve in that in that area.
What we have seen which is interesting as some companies in the U S, which typically were doing most of the work onshore.
With a lot of scarcity in the talent pool and really high.
Wages in the U S.
We've seen large companies at least two financial.
Services companies.
Come to us to shift a lot of that workforce into Latin America.
But it is still focused on doing high end.
Work for for the front part of the pack, but they are now open to moving and shifting.
What they traditionally have been done only in the U S and now they are open to do it in Latin America. So.
You can call it may be there they are.
They will gain some cost efficiencies.
The nature of the project is a competitive advantage.
Advantage for the bank.
Thank you.
Yeah.
Thank you and it appears we have no further questions. This afternoon, Mr. Sendero, Sops and things back to you for any closing comments.
Hello, Thank you very much I really appreciate everybody participating and appreciate the questions and the time.
I hope you, we answered most of them in.
And we were clear so thanks, everyone.
Thank you, Mr Ladies and gentlemen.
Thank you and thank you for joining the agile <unk> fourth quarter and full year 2022 financial results conference call. Thank you so much for joining us and wish you all a great remainder of your day Goodbye.
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Okay.
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