Q3 2023 Concentrix Corporation Earnings Call

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Okay.

Speaker 1: Thank you for standing by and welcome to concentric fiscal third quarter 2023 financial results conference call. At this time, all participants are in a listen to only mode.

Thank you for standing by and welcome to Concentrix fiscal third quarter 'twenty to 'twenty three financial results Conference call. At this time, all participants are in a listen only mode.

Speaker 1: After the speaker presentation, there will be a question and answer session.

After the speaker presentation, there will be a question and answer session.

Speaker 1: To ask a question during the session, you will need to press star 1 1 on your telephone. To remove yourself from the queue, you may press star 1 1 again. I would now like to hand the call over to Vice President Invest Relations David Stein. Please go ahead.

To ask a question during the session you will need to press star one one on your telephone to remove yourself from the queue. You May press Star one one again.

I'd now like to hand, the call over to Vice President Investor Relations David Stein. Please go ahead.

Speaker 2: Thank you, Lateef, and good evening. Welcome to the Concentrics Corporation third quarter fiscal 2023 earnings call.

Thank you Latif and good evening welcome to the Concentrix Corporation third quarter fiscal 2023 earnings call.

Speaker 2: As a result of the combination earlier this week, we now operate as one concentric web We tried to handle response areas similar to other

As a result of the combination earlier this week, we now operate as one concentrix wed help.

This call is the property of Concentrix wet help and may not be recorded or rebroadcast without written permission.

Speaker 2: This call is the property of concentrics web help and may not be recorded or rebroadcast without written permission.

Speaker 2: This call contains forward-looking statements that address our expected future performance and that by their nature address matters that are uncertain.

This call contains forward looking statements that address our expected future performance and that by their nature address matters that are uncertain.

Speaker 2: These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking state.

These uncertainties may cause our actual future results to be materially different than those expressed in our forward looking statements.

Speaker 2: we do not undertake to update our forward-looking statements as a result of new information or future events or developments.

We do not undertake to update our forward looking statements as a result of new information or future events or developments. Please.

Speaker 2: Please refer to today's earnings release and our most recent filings with the SEC for additional information regarding uncertainties that could affect our future financial results.

Please refer to today's earnings release, and our most recent filings with the SEC for additional information regarding uncertainties that could affect our future financial results.

Speaker 2: This includes the risk factors provided in our annual report on Form 10-K and subsequent FCC filing.

This includes the risk factors provided in our annual report on Form 10-K, and subsequent SEC filings.

Speaker 2: Also during the call, we will discuss non- GAAP financial measures, including free cash flow, non-GAP operating income, adjusted EBITDA, non-GAP EPS, and adjusted constant currency revenue growth.

Also during the call, we will discuss non-GAAP financial measures, including free cash flow non-GAAP operating income adjusted EBITDA, non-GAAP EPS and adjusted constant currency revenue growth.

Speaker 2: A reconciliation of these non-GAAP measures is available in the news release and on the company investor relations website under financial.

A reconciliation of these non-GAAP measures is available in the news release and on the company Investor Relations website under financials.

Speaker 2: With me on the call are Chris Caldwell, our President and Chief Executive Officer, and Andre Valentine, our Chief Financial Officer.

With me on the call are Chris Caldwell, our President and Chief Executive Officer, and Andre Valentine, Our Chief Financial Officer.

Speaker 2: Chris will provide a summary of our operating performance and growth strategy, and Andre will cover our financial results and business outlook. Then we'll open the call for your questions.

Chris will provide a summary of our operating performance and growth strategy and Andre will cover our financial results and business outlook.

Then we will open the call for your questions.

Now I'll turn the call over to Chris.

Thank you David Hello, everyone and thank you for joining us today for our third quarter earnings call. We are thrilled to have you with us as we discuss our performance in the third quarter and the exciting news that we have closed our transformative combination with web help.

Speaker 3: Thank you, David. Hello, everyone, and thank you for joining us today for our third quarter earnings call. We are thrilled to have you with us as we discuss our performance in the third quarter. And the exciting news that we have closed our transformative combination with Web Help.

Speaker 3: We're pleased that we executed to deliver revenue and profit growth with strong cash flow in the third quarter. We experienced continued stable demand for high value and technology infused services, achieved solid new business signings and our continued focus on business mix drove margin expansion.

We're pleased that we executed to deliver revenue and profit growth with strong cash flow in the third quarter.

We experienced continued stable demand for high value and technology infused services achieved solid new business signings and our continued focus on business mix drove margin expansion.

Speaker 3: We entered the fourth quarter with a strong pipeline of opportunities that we believe will continue to drive our growth into 2024.

We entered the fourth quarter with a strong pipeline of opportunities that we believe will continue to drive our growth into 2024.

Speaker 3: Where reported revenue in the third quarter was $1.63 billion. On an organic, constant currency basis, revenue grew 1.7%. Our third quarter non-GAAP operating income increased to $231 million and adjusted EBITDA increased to $269 million, both growing by over 4% compared with last year.

Reported revenue in the third quarter was $1 six 3 billion on an organic.

<unk> constant currency basis revenue grew one 7%.

Our third quarter non-GAAP operating income increased to $231 million and adjusted EBITDA increased to $269 million, both growing by over 4% compared with last year.

Speaker 3: Solid execution yielded 10 basis point improvements in both our non-GAAP OI and adjusted EBITDA margins over last year.

Solid execution yielded 10 basis point improvements in both our non-GAAP Oi.

And adjusted EBITDA margins over last year.

Speaker 3: Our non-GAAP EPS was $2.71 per share, compared with $2.95 per share last year, largely reflecting the impact of expected higher interest rates.

Our non-GAAP EPS was $2 71 per share compared with $2 95 per share last year, largely reflecting the impact of expected higher interest rates.

Speaker 3: Given our continued organic growth, strong free cash flow generation, and the accretive web help combination, we are pleased to raise the quarterly dividend by 10%. This increase quarterly dividend translates to $1.21 per share on an annualized basis.

Given our continued organic growth strong free cash flow generation and the accretive web help combination we are pleased to raise the quarterly dividend by 10%.

This increased quarterly dividend translates to $1 21 per share on an annualized basis.

Speaker 3: We continue to grow in each of our strategic verticals, which more than offset continued volume softness with a few select large clients as we discussed last quarter.

We continue to grow in each of our strategic verticals, which more than offset continued volume softness with a few select large clients as we discussed last quarter.

Speaker 3: From a catalyst perspective, we again experienced sequential quarterly revenue growth with our digital CX solutions. Our unique digital IT service capabilities with thousands of staff able to design, deploy and integrate technology-infused solutions at scale differentiates us significantly from our traditional CX peers.

From a catalyst perspective, we gained experience.

Again experienced sequential quarterly revenue growth with our digital CX solutions are unique digital service capabilities with thousands of staff able to design deploy and integrate technology infused solutions at scale.

Chase us significantly from our traditional CX peers.

Speaker 3: From a sales perspective, we continue to focus on our sell as one approach with our combined catalyst and CX operations design, build and run services.

From a sales perspective, we continue to focus on our sellers one approach with our combined catalyst and CX operations design build and run services.

Speaker 3: During the quarter, we saw steady demand across multiple geographies and verticals as clients continued to look for differentiated ways to service their customers while managing their cost structure.

During the quarter, we saw steady demand across multiple geographies and verticals as clients continue to look for differentiated ways to service their customers, while managing their cost structure.

Speaker 3: While clients are still signing smaller deals that ramped more slowly, we are pleased with the higher complexity work that we will be performing with these new wins. We also see a strong pipeline of opportunities as a combined concentric web help organization that we would not have been able to pursue prior to the combination.

While clients are still signing smaller deal that ramp more slowly we are pleased with the higher complexity work that we will be performing with these new wins. We also see a strong pipeline of opportunities as a combined concentrix web help organization that we would not have been able to pursue prior to the combination.

Unknown Executive: Thank you for standing by and welcome to Concentrix Fiscal Third Quarter, 2023 Financial Results Conference Call. At this time, all participants are in a listen to only mode. After the speaker presentation, there will be a question and answer session.

Speaker 3: From an operating perspective, we delivering exceptional service with record client attainment scores this quarter. Our focus remains on being the best partner for our client's relationships and winning more opportunities within each account. The more technology and few services we provide to our clients, the stickier our relationships become.

From an operating perspective.

Living exceptional service with record client attainment scores this quarter, our focus remains on being the best partner for our clients relationships and winning more opportunities within each account.

Unknown Executive: To ask a question during the session, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again.

More technology <unk> services, we provide to our clients the stickier relationships become.

Speaker 3: Notably, we've accelerated our progress in the quarter deploying generative AI solutions both internally and with select client.

Notably we've accelerated our progress in the quarter deploying generative AI solutions, both internally and with select clients.

David Stein: I would now like to hand the call over to Vice President Investors of Relations David Stein. Please, go ahead. Thank you, Lateef, and good evening. Welcome to the Concentrix Corporation Third Quarter Fiscal 2023 Ernst Call. As a result of the combination earlier this week, we now operate as one Concentrix WED help.

Speaker 3: from an internal productivity perspective, our AI and Alex-based recruiting platform now supports 8.6 million career sites visits and processes 3.3 million applications already this year. It has already allowed our team to scale more cost effectively and we see additional benefits as we continue the rollout across our enterprise.

From an internal productivity perspective, our AI and Alex based recruiting platform now supports $8 6 million career sites visits and processes three 3 million applications already this year. It has already allowed our team to scale more cost effectively and we see additional benefits as we continue the rollout across our enterprise.

David Stein: This call is the property of Concentrix WED help and may not be recorded or rebroadcast without written permission. This call contains forward-looking statements that address our expected future performance and that by their nature, address matters that are uncertain. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements as a result of new information or future events or developments.

Ms.

Speaker 3: Our AI-based workforce management solution optimizes concurrent scheduling and peak management for now over 115,000 of our staff where we see better utilization and user experience for the team. This again will have additional benefits as we scale up to the rest of our workforce.

Our AI based management workforce management solution Optimizes concurrent scheduling and peak management for now over 115000 of our staff, where we see better utilization and user experience for the team. This again, we will have additional benefits as we scale up to the rest of our workforce.

Speaker 3: Our most widely used proprietary AI Smart Assist product improves productivity through automation for over 190 team members now to easily access the tools and provide visibility to the information required to the performance of jobs every day easier.

Our most widely used proprietary AI smart assist product improves productivity through automation for over 190 team members now to easily access the tools and provide visibility to the information required to perform their jobs every day easier.

David Stein: Please refer to today's earnings release and our most recent filings with the SEC for additional information regarding uncertainties that could affect our future financial results. This includes the risk factors provided in our annual report on form 10K and subsequent SEC filings. Also during the call, we will discuss non-GAF financial measures, including free cash flow, non-GAF operating income, adjusted EBITDA, non-GAF EPS, and adjusted constant currency revenue growth. A reconciliation of these non-GAF measures is available in the news release and on the company investor relations website under financials.

Speaker 3: From the ability for AI to enhance our client services,

From the ability for AI to enhance our client services.

Speaker 3: We use an AI-based quality automation platform to drive insights from 100% of our customer interactions where deployed. Now, across tens of thousands of seats, the platform has reviewed 129 million interactions to date, delivering 20 to 30% improvements in audit efficiency and insights into customers. Clients that

We use an AI based quality automation platform to drive insights from 100% of our customer interactions. We're deployed now across tens of thousands of seats. The platform has reviewed 129 million interactions to date, delivering 20% to 30% improvements in efficiency and insights into customers.

Clients see high value.

Speaker 3: Our proprietary learning bot utilizes AI to simulate real-world customer scenarios for over 60,000 team members during training, establishing better speed to proficiency, reducing new higher average processing time, and improving effectiveness by 5% to 10% in the ramp periods.

Our proprietary learning bought utilizes AI to simulate real world customer scenarios for over 60000 team members during training, establishing better speed to proficiency, reducing new higher average processing time, and improving effectiveness by 5% to 10% and the ramp periods.

David Stein: With me on the call, our Chris called well, our president and chief executive officer, and Andre Valentine, our chief financial officer. Chris will provide a summary of our operating performance and growth strategy, and Andre will cover our financial results and business outlook. Then we'll open a call for your questions.

Speaker 3: And our cognitive AI bots developed for client specific implementations will handle over 900 million customer interactions by the end of this year delivering significant value for our clients and a higher margin service for us.

And our cognitive AI bots developed for client specific implementations will handle over 900 million customer interactions by the end of this year delivering significant value for our clients and our higher margin service for us.

Christopher Caldwell: Now I'll turn the call over to Chris. Thank you, David.

Speaker 3: We are actively investing in additional generative AI solutions to further enhance workforce productivity and improve the quality of interactions with customers.

We are actively investing in additional generative AI solutions to further enhance workforce productivity and improve the quality of interactions with customers.

Christopher Caldwell: Hello, everyone, and thank you for joining us today for our third quarter earnings call. We are thrilled to have you with us as we discuss our performance in the third quarter and the exciting news that we have closed are transformative combination with web help. We're pleased that we executed to deliver revenue and profit growth with strong cash flow in the third quarter. We experienced continued stable demand for high value and technology infused services, achieved solid new business signings, and our continued focus on business mix drove margin expansion.

Speaker 3: We are on track to deploy our AI tools across nearly 80% of our legacy operations business by year end and start wide deployment of the tool within our new clients from our combination with web help shortly.

We are on track to deploy our AI tools across nearly 80% of our legacy operations business by year end and start wide deployment of the tool within our new clients from our combination with web help shortly.

Speaker 3: Turning to AI with our clients, we are also collaborating with some of the world's largest companies to design, build, and run Generative AI infuse solutions across the services value chain.

Turning to AI with our clients. We are also collaborating with some of the world's largest companies to design build and run generative AI infused solutions across the services value chain.

Christopher Caldwell: We entered the fourth quarter with a strong pipeline of opportunities that we believe will continue to drive our growth into 2024. We reported revenue in the third quarter was 1.63 billion. On an organic, constant currency basis, revenue grew 1.7%. Our third quarter non-gap operating income increased to 231 million, and adjusted EBITDA increased to 269 million, both growing by over 4% compared with last year. Solid Execution yielded 10 basis point improvements in both our non-GAP OI and adjusted EBITDA margins over last year. Our non-GAP EPS was $2.71 per share compared with $2.95 per share last year, largely reflecting the impact of expected higher interest rates.

Speaker 3: Working with one of our large technology clients in the key project this quarter, we use generative AI to power 35% efficiency gains and deliver releases 30% faster than traditional methods in their software development lifecycle.

Working with one of our large technology clients and a key project. This quarter, we used generative AI to power, 35% efficiency gains and deliver releases, 30% faster than traditional methods and their software development lifecycle.

Speaker 3: During the quarter, we also delivered a proof of concept for generative AI knowledge management that builds 3D modeling and augmented reality solutions for a global retail client that couldn't cost effectively be done before.

During the quarter. We also delivered a proof of concept for degenerative AI knowledge management that builds three D modeling and augmented reality solutions for our global retail client that couldnt cost effectively be done before.

Speaker 3: Catalyst also launched its first deployment of our new generative AI infused offering any path that we have been developing for close to two years. For our first implementation, we seamlessly transitioned the entire C-CAST tech staff of a healthcare client in less than eight hours, enabling fully automated generative AI experiences for patients and advisors with our generative AI intelligence insights and reporting capabilities. ENJOY, TRUE,alin, access information is remembered as one of these weregriffas ofios.com'sDLCG will?? this level of aw fatto tusrips.

Catalyst also launched its first deployment of our new generative AI infused offering any path that we have been developing for close to two years.

For our first implementation, we seamlessly transitioned the entire Sekos tech staff of a healthcare client and less than eight hours, enabling fully automated generative AI experiences for patients and advisors with our generative AI intelligence insights and reporting capabilities.

Christopher Caldwell: Given our continued organic growth, strong free cash flow generation, and the accretive web help combination, we are pleased to raise the quarterly dividend by 10%. This increase quarterly dividend translates to $1.21 per share on an annualized basis. We continue to grow in each of our strategic verticals, which more than offset continued volume softness with a few select large clients as we discuss last quarter. From a catalyst perspective, we gained experience, we again experienced sequential quarterly revenue growth with our digital CX solutions.

Speaker 3: Historically, this would have taken weeks to months to transition. This has resulted in substantial saving for our clients and a new, revenue, new opportunity for our business.

Historically this would have taken weeks to months to transition.

This has resulted in substantial savings for our clients and a new revenue opportunity for our business.

Speaker 3: For another key client, we are now working exclusively to train and test a generative AI tool in advance of it becoming customer facing. Using a combination of automation and humans and our unique knowledge of the customer base and domain knowledge, we are building hundreds of thousands of different subject matter conversations to train the AI across multiple categories with a plan to increase the scope to a million conversations in the next six months.

For another key client we are now working exclusively to train and test a generative AI tool in advance of it becoming customer facing using a combination of automation in humans and our unique knowledge of the customer base and domain knowledge. We are building hundreds of thousands of different subject matter conversations to train the IR AI across multiple.

Categories with a plan to increase the scope to a million conversations in the next six months with.

Christopher Caldwell: Our unique digital IT service capabilities with thousands of staff able to design, deploy, and integrate technology-infused solutions at scale differentiates us significantly from our traditional CX peers. From a sales perspective, we continued to focus on our cell as one approach with our combined catalyst and CX operations design, build, and run services. During the quarter, we saw steady demand across multiple geographies and verticals as clients continued to look for differentiated ways to service their customers while managing their cost structure.

Speaker 3: with all of these examples and with many more we have deployed in our working on, I hope it is evident that we see opportunity to grow revenue and be more efficient with AI and see this as a net benefit to our industry.

With all of these examples and with many more we have deployed and are working on I hope. It is evident that we see opportunity to grow revenue and be more efficient with AI and see this as a net benefit to our industry.

Speaker 3: Now, let's turn our attention to the Web Help combination that sets the stage for a new chapter in our business offering evolution. This combination is a historic milestone in our industry.

Now, let's turn our attention to the web help combination that sets the stage for a new chapter in our business offering evolution. This combination is a historic milestone in our industry.

Speaker 3: as a combined organization concentric's web help poses us to distinct strategic advantages that we believe increases our differentiation and will drive our success as a transformative force in the industry.

As a combined organization Concentrix web help possesses distinct strategic advantages that we believe increases our differentiation and will drive our success as a transformative force in the industry. This.

Christopher Caldwell: While clients are still signing smaller deals that ramped more slowly, we are pleased with the higher complexity work that we will be performing with these new wins. We also see a strong pipeline of opportunities as a combined concentric web help organization that we would not have been able to pursue prior to the combination. From an operating perspective, we delivering exceptional service with record client attainment scores this quarter. Our focus remains on being the best partner for our client's relationships and winning more opportunities within each account.

Speaker 3: This combination brings new expertise such as know your customer and anti money laundering and payment services for financial clients.

This combination brings new expertise such as know your customer and anti money laundering and payment services for a natural or a financial clients.

Speaker 3: IT services at scale in Amia, deeper domain expertise in a number of our core verticals, and helps create a robust footprint spanning 70 plus countries, enabling us to offer tailored solutions on a global scale. We also gain over a thousand new clients that we believe have the ability to spend on services and capabilities that concentric historically has offered.

It services at scale in EMEA deeper domain expertise in a number of our core verticals and helps create a robust footprint spanning 70, plus countries, enabling us to offer tailored solutions on a global scale. We also gained over 1000, new clients that we believe have the ability to spend on services and capabilities.

Christopher Caldwell: The more technology-infused services we provide to our clients, the stickier our relationships become. Notably, we've accelerated our progress in the quarter deploying generative AI solutions both internally and with select clients. From an internal productivity perspective, our AI and Alex-based recruiting platform now supports 8.6 million career site visits and processes 3.3 million applications already this year. It has already allowed our team to scale more cost effectively and we see additional benefits as we continue the rollout across our enterprise.

The Concentrix historically has offered.

Speaker 3: Our commitment to nurturing a supportive and inclusive workforce is further reinforced by the harmonious integration of our cultures, which are globally renowned for their excellence in workplace practices and commitment to ESG.

Our commitment to nurturing a supportive and inclusive workforce is further reinforced by the harmless integration of our cultures, which are globally renowned for their excellence in workplace practices and commitment to ESG we.

Speaker 3: We have a clear path to positive financial returns from the combination with Web help, where well-entracted could achieve enhanced revenue growth, profitability, and non-GAP EPS increase in within the first year. We expect double-digit accretion in non-GAP EPS in the second year, further underscoring the financial strength of the combination.

We have a clear path to positive financial returns from the combination with web help.

We're well on track to achieve enhanced revenue growth profitability and non-GAAP EPS, increasing within the first year, we expect double digit accretion in non-GAAP EPS in the second year further underscoring the financial strength of the combination in.

Christopher Caldwell: Our AI-based workforce management solution optimizes concurrent scheduling and peak management for now over 115,000 of our staff where we see better utilization and user experience for the team. This again will have additional benefits as we scale up to the rest of our workforce. Our most widely used proprietary AI smart assist product improves productivity through automation for over 190 team members now to easily access the tools and provide visibility to the information required to the performance of jobs every day easier.

Speaker 3: In addition to these compelling benefits, our integration process is on schedule, and we are confident that we will achieve cost synergies of 120 million by the third year, including 75 million in the first year post-close with substantial progress made already. Since the announcement, we have been able to spend more time with the web help team, which has given us great confidence that this transaction is the right investment.

In addition to these compelling benefits our integration process is on schedule and we are confident that we will achieve cost synergies of $120 million by the third year, including $75 million in the first year post close with substantial progress made already.

Since the announcement, we have been able to spend more time with the web help team, which has given us great confidence that this transaction is the right investment.

Speaker 3: We expect the integration work to be completed within 12 months. And I would like to welcome all of our new game changers to the concentric's web help team. I would also like to welcome our two new board members, Olivia Duha, web help co-founder and CEO , who becomes vice chair of our board of directors, and Nicholas Gehsa, a GBL partner and director.

We expect the integration work to be completed within 12 months and I would like to welcome all of our new game changers to the Concentrix web help team.

Christopher Caldwell: From the ability for AI to enhance our client services, we use an AI-based quality automation platform to drive insights from 100% of our customer interactions where deployed. Now across tens of thousands of seats, the platform has reviewed 129 million interactions to date delivering 20 to 30% improvements in audit efficiency and insights into customers. Clients that see high value. Our proprietary learning bot utilizes AI to simulate real-world customer scenarios for over 60,000 team members during training, establishing better speed to proficiency, reducing new higher average processing time, and improving effectiveness by 5% to 10% in the ramp periods.

I would also like to welcome our two new Board members Olivia Olivia do Hot Web help co founder and CEO , who becomes vice chair of our board of directors and Nicholas K saw a GPL partner and director.

Speaker 3: Finally, I would like to thank our exceptional staff for their commitment to execution, our clients for their trust, our talented board of directors for their support and mentorship, and our investors for your continued support. We look forward to an exciting and prosperous year ahead. And now I'll turn the call over to Andre. Andre?

Finally, I would like to thank our exceptional staff for their commitment to execution our clients for their trust our talented board of directors for their support and Mentorship and our investors for your continued support we look forward to an exciting and prosperous year ahead, and now I'll turn the call over to Andre Andre.

Speaker 2: Well, thank you, Kristen. Hello, everyone. We're excited to close our combination with Web help earlier this week. Adding Web help's talented global staff, strengthens our value proposition, and solidifies our position as a leading global CF solutions company.

Well, thank you, Chris and Hello, everyone.

Excited to have closed our combination with web held earlier this week, adding warehouse talented global SaaS strengthens our value proposition and solidifies our position as a leading global CX solutions company.

Christopher Caldwell: And our cognitive AI bots developed for client-specific implementations will handle over 900 million customer interactions by the end of this year delivering significant value for our clients and a higher margin service for us. We are actively investing in additional generative AI solutions to further enhance workforce productivity and improve the quality of interactions with customers. We are on track to deploy our AI tools across nearly 80% of our legacy operations business by year end and start wide deployment of the tool within our new clients from our combination with web help shortly.

Before I provide additional details on the completion of the transaction I will first review our third quarter results, then I'll conclude with guidance for the fourth quarter, including anticipated contributions from warehouse.

Speaker 2: Before I provide additional details on the completion of the transaction, our first review are third quarter results. Then I'll conclude with guidance for the fourth quarter, including anticipated contributions from Web.

Speaker 2: In the third quarter, revenue increased the non-gap profit and proof reflecting continued strong execution.

In the third quarter revenue increased to non-GAAP profit improved reflecting continued strong execution, both our organic constant currency revenue growth rate and our non-GAAP operating income came in within our guidance ranges.

non-GAAP operating income exceeding the midpoint of our guidance.

Speaker 2: Additionally, our strong cash flow generation reinforces our confidence in achieving our full year expectation of generating over $500 million in free cash flow, not including contributions from what

Additionally, our strong cash flow generation reinforces our confidence in achieving our full year expectation of generating over $500 million in free cash flow not including contributions from <unk>.

Christopher Caldwell: Turning to AI with our clients, we are also collaborating with some of the world's largest companies to design, build, and run generative AI infuse solutions across the services value chain. Working with one of our large technology clients in the key project this quarter, we use generative AI to power 35% efficiency gains and deliver releases 30% faster than traditional methods in their software development life cycle. During the quarter, we also delivered a proof of concept for generative AI knowledge management that builds 3D modeling and augmented reality solutions for a global retail client that couldn't cost effectively be done before.

Speaker 2: The 3.4% increase in reported revenue in the quarter included a 1.7 point positive year-over-year impact from the acquisition of service source in July 2022. There was no meaningful impact from currency fluctuations on reported revenue growth in the quarter.

The three 4% increase in reported revenue in the quarter included a one seven point positive year over year impact from the acquisition of surface source in July 2022.

There was no meaningful impact from currency fluctuations on reported revenue growth in the quarter.

Speaker 2: on an organic cost and currency revenue basis, revenue grew 1.7%. Reflecting a continuation of themes from the prior quarter. Strong growth in health care, banking, financial services insurance, e-commerce and travel. Offset by continued volume softness with a few large clients in the communications and consumer electronics.

And on an organic constant currency revenue basis revenue grew one 7%, reflecting a continuation of themes from the prior quarter strong growth in healthcare banking financial services insurance E Commerce and travel offset by continued volume softness with a few large clients and the communication.

Christopher Caldwell: Catalyst also launched its first deployment of our new generative AI infused offering any path that we have been developing for close to two years. For our first implementation, we seamlessly transitioned the entire CKAS tech staff of a healthcare client in less than eight hours, enabling fully automated generative AI experiences for patients and advisors with our generative AI intelligence insights and reporting capabilities. Historically, this would have taken weeks to months to transition.

And consumer electronics industries.

Speaker 2: revenue increased in each of our four strategic verticals in the quarter. With growth from healthcare clients leading away, up approximately 17% on both and as reported and organic constant currency based.

Revenue increased in each of our four strategic verticals in the quarter with growth from healthcare clients, leading away up approximately 17% on both an as reported and organic constant currency basis.

Speaker 2: Revenue from retail, travel, and e-commerce clients posted 8% growth as reported, and 7% on a constant currency-organic basis, including double digit growth.

Revenue from retail travel and e-commerce clients posted 8% growth as reported and 7% on a constant currency organic basis, including double digit growth with travel clients.

Christopher Caldwell: This has resulted in substantial saving for our clients and a new revenue opportunity for our business. For another key client, we are now working exclusively to train and test a generative AI tool in advance of it becoming customer facing. Using a combination of automation and humans and our unique knowledge of the customer base and domain knowledge, we are building hundreds of thousands of different subject matter conversations to train the AI across multiple categories with a plan to increase the scope to a million conversations in the next six months.

Speaker 2: Revenue from banking financial services and insurance clients grew by 5% on reported basis and 6% on organic constant current

Revenue from banking financial services and insurance clients grew by 5% on a reported basis and 6% on an organic constant currency basis.

Speaker 2: Revenue from technology and consumer electronics clients grew 6% as reported, and about 1% on an organic constant current.

Revenue from technology, and consumer electronics clients grew 6% as reported and about 1% iron organic constant currency basis.

Speaker 2: Revenue from communications clients decreased by 8% as reported, and 9% are in organic constant current.

From communications clients decreased by 8% as reported and 9% iron organic constant currency basis revenue from clients in our other vertical decreased 9% as reported and about 8% iron organic constant currency basis in the third quarter.

Speaker 2: Revenue from clients in our other variable decreased 9% as reported, and about 8% on organic cost and currency basis in the third-

Christopher Caldwell: With all of these examples, and with many more we have deployed in our working on, I hope it is evident that we see opportunity to grow revenue and be more efficient with AI and see this as a net benefit to our industry.

Speaker 2: Turning to profitability, nine-dap operating income was $231 million in the third quarter, compared with $222 million last year.

Turning to profitability non-GAAP operating income was $231 million in the third quarter compared with $222 million last year.

Christopher Caldwell: Now, let's turn our attention to the web help combination that sets the stage for a new chapter in our business offering evolution. This combination is a historic milestone in our industry. As a combined organization, concentric web help poses distinct strategic advantages that we believe increases our differentiation and will drive our success as a transformative force in the industry. This combination brings new expertise such as know your customer and anti-money laundering and payment services for our financial clients, IT services at scale in Amia, deeper domain expertise in a number of our core verticals and helps create a robust footprint spanning 70 plus countries, enabling us to offer tailored solutions on a global scale.

Speaker 2: Our non-gap operating margin was 14.1% up 10 basis points from 14.

Our non-GAAP operating margin was 14, 1% up 10 basis points from 14% in the third quarter last year.

Speaker 2: third quarter last year. Adjusted even dollars, $269 million, compared with $258 million, and the third quarter of last year.

Adjusted EBITDA was $269 million compared with $258 million in the third quarter of last year, our adjusted EBITDA margin of 16, 5% up 10 basis points from 16, 4% in the third quarter last year.

Speaker 2: Our Jeff Zediva Diamarge was 16.5% up 10 basis points from 16.4% in the third quarter-line.

Speaker 2: Third quarter interest expense was $49 million, up $29 million from the prior year quarter.

Third quarter interest expense was $49 million up $29 million from the prior year quarter.

Speaker 2: The increase was approximately $14 million of interest costs related to the web help combination.

Included in the increase was approximately $14 million of interest costs related to the web help combination.

Speaker 2: This included a charge of approximately $11 million in fees associated with our bridge financing for the Web Help Transaction. It also includes approximately $3 million in interest expense on our senior notes that were issued on August 2nd. Net of interest earnings on the invested process.

This included a charge of approximately $11 million in fees associated with our bridge financing for the web help transaction. It also includes approximately $3 million in interest expense on our senior notes that were issued on August 2nd net of interest earnings on the invested proceeds.

Christopher Caldwell: We also gain over a thousand new clients that we believe have the ability to spend on services and capabilities that concentric historically has offered. Our commitment to nurturing a supportive and inclusive workforce is further reinforced by the harmonious integration of our cultures, which are globally renowned for their excellence in workplace practices and commitment to ESG. We have a clear path to positive financial returns from the combination with Web help, where well-entracked to achieve enhanced revenue growth, profitability, and non-GAP EPS increase in within the first year.

Speaker 2: The remainder of the increase in interest expense was due to higher interest rates, as expect.

The remainder of the increase in interest expense was due to higher interest rates as expected.

Speaker 2: Other expenses of approximately $6 million in the third quarter included a $2 million mark-to-market adjustment related to the purchase price currency hedge for the web help transaction. The remainder of this line item in the P&O relates to foreign currency loss.

Other expense of approximately $6 million in the third quarter included a $2 million mark to market adjustment related to the purchase price currency and currency hedge for the web help transaction.

This line item in the P&L it relates to foreign currency losses.

Speaker 2: The non-gap tax rate for the quarter was 26.3%.

The non-GAAP tax rate for the quarter was 26, 3% non.

Christopher Caldwell: We expect double-digit accretion in non-GAP EPS in the second year, further underscoring the financial strength of the combination. In addition to these compelling benefits, our integration process is on schedule, and we are confident that we will achieve cost synergies of 120 million by the third year, including 75 million in the first year post-close with substantial progress made already. Since the announcement, we have been able to spend more time with the Web help team, which has given us great confidence that this transaction is the right investment. We expect the integration work to be completed within 12 months, and I would like to welcome all of our new game changers to the Concentrix Web help team.

Speaker 2: NON-GAP net income in the third quarter was $141 million, compared with $154 million last year. The decreased primary reflects higher interest expense and the change in other income expense, which more than offset the increase in NON-GAP operating.

non-GAAP net income in the third quarter was $141 million compared with $154 million last year. The decrease primarily reflects higher interest expense and the change in other income expense.

Which more than offset the increase in non-GAAP operating income.

Speaker 2: earnings per share were $2.71 cents on a non-gap basis. You've paid a $2.95 in the third quarter of last year.

Earnings per share were $2 71 set a non-GAAP basis compared to $2 95 in the third quarter of last year.

GAAP operating results for the third quarter included $40 million of amortization of intangibles $18 million of expenses related to acquisition related and integration expenses and $11 million of share based compensation expense.

Speaker 2: Gap operating results for the third quarter included $40 million of amortization of intangibles, $18 million of expenses related to acquisition related to integration expenses, and $11 million of share-based compensation.

Christopher Caldwell: I would also like to welcome our two new board members, Olivia Duha, Web help co-founder and CEO, who becomes Vice Chair of our Board of Directors, and Nicholas Gehsa, a GBL partner and Director. Finally, I would like to thank our exceptional staff for their commitment to execution, our clients for their trust, our talented Board of Directors for their support and mentorship, and our investors for your continued support.

Speaker 2: Turning to cash flow, our third quarter cash flow from operations totaled $211 million. Capital expenditures were $44 million.

Turning to cash flow, our third quarter cash flow from operations totaled $211 million and capital expenditures were $44 million. This resulted in a record third quarter quarterly free cash flow of $167 million. We continue to expect free cash flow for the full year to exceed $500 million, excluding the cash flow.

Speaker 2: This resulted in record third quarter quarterly free cash flow of 167 million dollars.

Speaker 2: continue to expect free cashflow for the full year to exceed 500 million, excluding the cashflow contribution of web help in the fourth quarter and transaction and integration.

A wet health in the fourth quarter and transaction and integration costs.

Andre Valentine: We look forward to an exciting and prosperous year ahead, and now I'll turn the call over to Andre. Andre? Well, thank you, Kristen. Hello, everyone. We're excited to close our combination with Web help earlier this week, adding Web help's talented global staff strengthens our value proposition and solidifies our position as a leading global CX solutions company. Before I provide additional details on the completion of the transaction, I'll first review our third quarter results.

Speaker 2: During the quarter, we paid a quarterly dividend of 27.5 cents per share. As Chris mentioned, our board has raised our quarterly dividend to 30 and a quarter cents per share to be paid during the fourth quarter. This increased to our quarterly dividend reflects our financial strength, our confidence in the future, and our commitment to discipline capital deploying.

During the quarter, we paid a quarterly dividend of <unk> 27, five cents per share as Chris mentioned, our board has raised our quarterly dividend to <unk> 30, and a quarter cents per share to be paid in during the fourth quarter.

This increase to our quarterly dividend reflects our financial strength, our confidence in the future and our commitment to disciplined capital deployment.

Speaker 2: Share references resumed in the quarter after our proxy statement finally related to the web help transact.

Share repurchases resumed in the quarter after our proxy statement filing related to the web help transaction.

Andre Valentine: Then I'll conclude with guidance for the fourth quarter, including anticipated contributions from Web help. In the third quarter, revenue increased the non-gap profit and proof reflecting continued strong execution. Both our organic, constant currency revenue growth rate and our non-gap operating income came in within our guidance ranges, with non-gap operating income exceeding the midpoint of our guidance. Additionally, our strong cash flow generation reinforces our confidence in achieving our full year expectation of generating over $500 million in free cash flow, not including contributions from Web help.

Speaker 2: We repurchased 320,000 shares of our stock for approximately $27 million in the third quarter. Repurchasing that their quarter were made at an average price of approximately $84 per share.

We repurchased 320000 shares of our stock for approximately $27 million in the third quarter.

We repurchased in the third quarter were made at an average price of approximately $84 per share.

Speaker 2: at the end of the quarter, we had $312 million remaining on our shared repurchased authors.

At the end of the quarter, we had $312 million remaining on our share repurchase authorization.

Moving to the balance sheet at the end of the third quarter cash and cash equivalents were $2 $1 billion.

Speaker 2: Moving to the balance sheet, at the end of the third quarter, cash and cash equivalents were $2.11 billion. And total debt outstanding was $3.

And total debt outstanding was $397 billion net debt was $1 $86 billion at the end of the third quarter, a decrease of $117 million from the end of the second quarter and a decrease of $218 million since the beginning of the year.

Speaker 2: net debt was $1.86 billion at the end of the third quarter, a decrease of $170 million from the end of the second quarter, and a decrease of $280 million since the beginning of the year.

Andre Valentine: The 3.4 percent increase in reported revenue in the quarter included a 1.7 point positive year-over-year impact from the acquisition of service source in July 2022. There was no meaningful impact from currency fluctuations on reported revenue growth in the quarter. On an organic, constant currency revenue basis, revenue grew 1.7 percent, reflecting a continuation of themes from the prior quarter. Strong growth in healthcare, banking, financial services insurance, e-commerce and travel, offset by continued volume softness with a few large clients in the communications and consumer electronics industries.

Speaker 2: At the end of the third quarter, the elevated cash level reflects funds on hand to complete the web-help transaction.

At the end of the third quarter, the elevated cash level reflects funds on hand to complete the web help transaction.

Speaker 2: The debt balance at the end of the quarter includes 2.15 billion of senior unsecured notes issued to partially fund the Web Help Transaction.

The balance the debt balance at the end of the quarter includes $2 5 billion of senior unsecured notes issued to partially fund the web help transaction and one 185 billion outstanding on our term loan.

Speaker 2: $1.85 billion outstanding on our term.

Speaker 2: our 1.04 billion dollar revolving credit facility was undrawn at the end of the quarter and there were no barring outstanding our five hundred million dollar accounts receivable securitization

Our 1.04 billion revolving credit facility was undrawn at the end of the quarter and there were no borrowings outstanding on our $500 million accounts receivable securitization facility at.

Andre Valentine: Revenue increased in each of our four strategic verticals in the quarter, with growth from healthcare clients leading the way up approximately 17 percent on both as reported and organic Revenue from retail, travel, and e-commerce clients posted 8% growth as reported, and 7% on a constant currency organic basis, including double digit growth with travel clients. Revenue from banking, financial services, and insurance clients grew by 5% on reported basis, and 6% on organic constant currency basis.

Speaker 2: the end of the third quarter, net leverage was 1.7 times on a trailing four quarters pro forma base.

At the end of the third quarter.

Net leverage was one seven times on a trailing four quarters pro forma basis.

Speaker 2: On Monday, we executed on the closing of the Web Health company.

On Monday, we executed on the closing of the web help combination to.

Speaker 2: To complete the combination, we paid approximately $525 million to web help shareholders paid off web help debt of approximately $1.9 billion, issued 14.9 million shares to web help shareholders and incurred a 700 million euro two-year note payable to web help shareholders bearing interest at 2%.

To complete the combination we paid approximately $525 billion to web help shareholders paid off withheld debt of approximately $1 9 billion.

Issued 14 9 million shares to help shareholders and incurred a $700 million Euro two year note payable to web help shareholders bearing interest at 2%.

Andre Valentine: Revenue from technology and consumer electronics clients grew 6% as reported, and about 1% on organic constant currency basis. Revenue from communications clients decreased by 8% as reported, and 9% on organic constant currency basis. Revenue from clients in our other variable decreased 9% as reported, and about 8% on organic constant currency basis in the third quarter. Turning to profitability, non-gap operating income was $231 million in the third quarter, compared with $222 million last year.

Speaker 2: After the closing, we had cash and cash equivalents coaling approximately $440 million and gross debt of approximately $5.3 billion.

After the closing we had cash and cash equivalents totaling approximately $440 million and gross debt of approximately $5 3 billion.

Net debt upon closing was $4 85 billion.

Speaker 2: net debt applying closing was $4.85 billion, which represents net leverage of approximately 3.2 times on a pro forma adjusted EBITDA.

Which represents net leverage of approximately three two times on a pro forma adjusted EBITDA basis.

Speaker 2: The primary components of our gross debt on the balance sheet post closing were $2.15 billion in senior notes, 2.1.

The primary components of our gross debt on the balance sheet post closing we're <unk>.

Andre Valentine: Our non-gap operating margin was 14.1% up 10 basis points from 14% in the third quarter last year. Adjusted EBITDA was $269 million, compared with $258 million in the third quarter of last year. Our adjusted EBITDA margin was 16.5% up 10 basis points from 16.4% in the third quarter last year. Third quarter interest expense was $49 million, up $29 million from the prior year quarter. Included in the increase was approximately $14 million of interest costs related to the web help combination.

<unk>, one 5 billion in senior notes.

<unk>, one $4 billion in term loan borrowings.

Speaker 2: approximately 750 million in notes payable to web help shareholders and 250 million in borrowings outstanding under our council's seatable securitization Our revolving credit facility remains

Proximately $750 million in notes payable to web help shareholders and $215 million in borrowings outstanding under our accounts receivable securitization.

Our revolving credit facility remained undrawn.

Speaker 2: The issuance of shares to web help shareholders increase our outstanding share count to approximately 66.6 million shares.

The issuance of shares to web help shareholders increased our outstanding share count to approximately $66 6 million shares.

Speaker 2: Regarding the 2.15 billion of senior notes, on the data combination close, we entered into cross currency swap arrangements for a total no-show amount of $500 million of the...

Regarding the 215 billion of senior notes on the data combination close we entered into cross currency swap arrangements for total notional amount of $500 million of the notes.

Andre Valentine: This included a charge of approximately $11 million in fees associated with our bridge financing for the web help transaction. It also includes approximately $3 million in interest expense on our senior notes that were issued on August 2nd, net of interest earnings on the invested proceeds. The remainder of the increase in interest expense was due to higher interest rates as expected. Other expenses were approximately $6 million in the third quarter included a $2 million mark-to-market adjustment related to the purchase price currency hedge for the web help transaction.

Speaker 2: The arrangements effectively convert 250 million each of the 2026 and 2028 notes in this synthetic Euro-based debt at lower prevailing interest.

The arrangements effectively convert $250 million each of the.

2026, and 2028 notes and the synthetic euro base debt at lower prevailing interest rates and.

Speaker 2: In addition to aligning the currency of a Porsche of our interest payments to the organization's Euro-denominated cash.

In addition to aligning the currency of a portion of our interest payments to the organization's euro denominated cash flows. The swaps also reduced the weighted average interest rate of the $2. One 5 billion notes from approximately $6 seven zero percent to approximately $6 three 6% as.

Speaker 2: The swap also reduced the weighted average interest rate of the 2.15 billion nodes from approximately 6.70% to approximately 6.366.

Andre Valentine: The remainder of this line item in the P&O relates to foreign currency losses. The non-gap tax rate for the quarter was 26.3%. Non-gap net income in the third quarter was $141 million compared with $154 million last year. The decrease primarily reflects higher interest expense and the change in other income expense was more than offset the increase in non-gap operating income. Earnings per share were $2.71 cents on a non-gap basis compared to $2.95 in the third quarter of last year.

Speaker 2: As we said when we announced the Web Help Transaction, the combination of our strong free cash flow generation and adjusted EBITDA growth gives us a clear path to reducing leverage. And we're committed to reducing our net leverage to about two times adjusted EBITDA within two years after the transaction.

As we said when we announced the web help transaction the combination of our strong free cash flow generation and adjusted EBITDA growth gives us a clear path to reducing leverage and we're committed to reducing our net leverage to about two times adjusted EBITDA within two years after the transaction close.

Speaker 2: Regarding our capital allocation priorities, our focus is on organic growth, the successful integration of web help, realizing the planned synergies and repaying debt. We're committed to investment grade principles. We will prioritize paying down debt and reducing our net leverage while continuing our dividend and discipline share repurchases to offset the delusion of X.

Regarding our capital allocation priorities, our focus is on organic growth the successful integration of warehouse, realizing the planned synergies and repaying debt we're.

Andre Valentine: Gap operating results for the third quarter included $40 million of amortization of intangibles, $18 million of expenses related to acquisition related to integration expenses and $11 million of share-based compensation expense. Turning to cash flow are third quarter cash flow from operations total $211 million and capital expenditures for $44 million. This resulted in a record third quarter quarterly free cash flow of $167 million. We continued to expect free cash flow for the full year to exceed $500 million, excluding the cash flow contribution of web help in the fourth quarter and transaction and integration, in cost.

We're committed to investment grade principles, we will prioritize paying down debt and reducing our net leverage while continuing our dividend and disciplined share repurchases to offset the dilution of equity grants.

Speaker 2: Now I'll turn my attention to the business outlook for the fourth quarter, including anticipated contributions from Web.

Now I'll turn my attention to the business outlook for the fourth quarter, including anticipated contributions from warehouse.

Speaker 2: The Web Help Contribution to Fourth Quarter Guidance includes forecasted financial performance for a period of slightly more than two.

So let her contribution to fourth quarter guidance includes forecasted financial performance for a period of slightly more than two months.

Speaker 2: For the fourth quarter, we now expect reported revenue to be in a range of 2.19 billion to 2.215 billion dollars based on current exchange.

For the fourth quarter, we now expect reported revenue to be in a range of $2. One 9 billion to two to one $5 billion base.

Andre Valentine: During the quarter, we paid a quarterly dividend of 27.5 cents per share. As Chris mentioned, our board has raised our quarterly dividend to 30 and a quarter cents per share, to be paid during the fourth quarter. This increased to our quarterly dividend reflects our financial strength, our confidence in the future and our commitment to discipline capital deployment. Share repurchases resumed in the quarter after our proxy statement finally related to the web health transaction.

Based on current exchange rates.

Speaker 2: Our fourth quarter expectations reflect approximately 2 to 3% of pro-former constant currency growth for the combined organization if the combination had occurred at the beginning of the fourth quarter of 2022. They sued in the...

Our fourth quarter expectations reflect approximately 2% to 3% of pro forma constant currency growth for the combined organization. If the combination had occurred at the beginning of the fourth quarter of 2022.

And the effect of the warehouse combination.

Speaker 2: Our expected constant currency growth in the fourth quarter would be consistent with the prior guidance for the fully.

Our expected constant currency growth in the fourth quarter would be consistent with the prior guidance for the full year.

Speaker 2: Our profitability expectations for the fourth quarter include non-GAAP operating income and a range of $330 million to $340 million.

Our profitability expectations for the fourth quarter include non-GAAP operating income in a range of $330 million to $340 million at the midpoint of our guidance. This equates to a non-GAAP operating income margin of approximately 15, 2% an increase of 10 basis points over the prior year.

Andre Valentine: We repurchased 320,000 shares of our stock for approximately $27 million in the third quarter. Repurchases in the third quarter were made at an average price of approximately $84 per share. At the end of the quarter, we had $312 million remaining on our share repurchased authorization. Moving to the balance sheet, at the end of the third quarter, cash and cash equivalents were $2.11 billion. Total debt outstanding was $3.97 billion. Net debt was $1.86 billion at the end of the third quarter, a decrease of $170 million from the end of the second quarter, and a decrease of $280 million since the beginning of the year.

Speaker 2: The midpoint of our guidance is to equates to a non-gap operating income margin of approximately 15.2 percent, an increase of 10 basis points over the prior use.

Speaker 2: The effect of the web help combination are expected non-dap operating income in the fourth quarter would be consistent with the prior guidance for the full year 20.

Excluding the effect of the web help combination our expected non-GAAP operating income in the fourth quarter will be consistent with the prior guidance for the full year 2023.

Speaker 2: We expect net interest expense in the fourth quarter to be approximately $72 million. With an effective tax rate of 26%, an awaited average deluded share count were approximately $62 million shares.

We expect net interest expense in the fourth quarter to be approximately $72 million with an effective tax rate of 26%.

Weighted average diluted share count of approximately 62 million shares.

Speaker 2: note that the average limited share count for the fourth quarter is less than the 66.6 million outstanding shares posed close as a result of the mid-quarter timing of

Note that the average diluted share count for the fourth quarter is less than the $66 6 million outstanding shares post close as a result of the mid quarter timing of the close.

Andre Valentine: At the end of the third quarter, the elevated cash level reflects funds on hand to complete the web health transaction. The debt balance at the end of the quarter includes $2.15 billion of senior unsecured notes issued to partially fund the web health transaction, and $1.85 billion outstanding on our term loan. Our $1.04 billion dollar revolving credit facility was undrawn at the end of the quarter, and there were no borrowings outstanding on our $500 million accounts receivable securization facility. At the end of the third quarter, net leverage was 1.7 times on a trailing four quarters pro-form a basis.

Speaker 2: Accordingly, we expect nine GAP EPS for the fourth quarter to be in a range of $3.3 per share to $3.15.

Accordingly, we expect non-GAAP EPS for the fourth quarter to be in a range of $3 <unk> per share to $3 15 per share. This expectation for non-GAAP EPS assumes no impact from other income and expense due to the unpredictability of future foreign currency movements.

Speaker 2: This expectation for 9-GAP EPS assumes no impact from other income and expense. Do the unpredictability of future four currency moves.

Speaker 2: continue to expect the business to generate robust cash flows, but free cash flow for the combined organization to be in the range of 200 to 225 million, excluding any transaction and integration costs in the fourth quarter.

We continue to expect the business to generate robust cash flows with free cash flow for the combined organization to be in the range of $200 million to $225 million, excluding any transaction and integration costs in the fourth quarter.

Speaker 2: Our business outlook does not include transaction integration costs associated with the web health combination or any future acquisition.

Our business outlook does not include transaction and integration costs associated with the web help combination or any future acquisitions.

Andre Valentine: On Monday, we executed on the closing of the web health combination. To complete the combination, we paid approximately $525 billion to web health shareholders, paid off web health debt of approximately $1.9 billion, issued $14.9 million shares to web health shareholders, and incurred a $700 million euro to a year note payable to web health shareholders bearing interest at 2%. After the closing, we had cash and cash equivalents co-ling approximately $440 million, and gross debt of approximately $5.3 billion.

Speaker 2: Also not included in the guidance or impacts from future foreign currency flex.

Not included in the guidance are impacts from future foreign currency fluctuations.

Speaker 2: We continue to respect the web help operations to generate approximately 3 billion of revenue and approximately 500 million of adjusted EBITDA for the full year 2023. With a combined organization yielding nearly 9.6 billion in revenue and nearly 1.6 billion in combined EBITDA on a pro-former basis for the full fiscal year 2020.

We continue to expect the web help operations to generate approximately 3 billion of revenue and approximately $500 million of adjusted EBITDA for the full year 2023, with a combined organization, yielding nearly $9 6 billion in revenue and nearly $1 6 billion in combined EBITDA on a pro forma basis for the full fiscal year 2002.

Three.

Speaker 2: We expect Arne's per share accretion of mid to high single digits in the first full year after close and double digit accretion in the second.

We expect earnings per share accretion of mid to high single digits in the first full year after close and double digit appreciation accretion in the second year.

Andre Valentine: Net debt applying closing was $4.85 billion, which represents net leverage of approximately 3.2 times on a pro-form adjusted EBITDA basis. The primary components of our gross debt on the balance sheet post-closing were $2.15 billion in senior notes, $2.14 billion in term loan borrowings, approximately $750 million in notes payable to web health shareholders, and $215 million in borrowings outstanding under our Council's receivable securitization. Our revolving credit facility remained undrawn. The issuance of shares to web health shareholders increased our outstanding share count to approximately $66.6 million shares.

Speaker 2: We also expect to realize $75 million in synergies in the first year after closing, growing to 120 million.

We also expect to realize $75 million in synergies in the first year after closing growing to $120 million in synergies in year. Three we plan to provide guidance for 2024 on our fourth quarter results call.

Speaker 2: We plan to provide guidance for 2024. Our fourth quarter results are called.

Speaker 2: In closing, the Web help combination is showing two leading CX providers into a global platform for growth and value creation, bringing in clients from growing markets, further diversifying our marquee client list, and significantly increasing our presence in Europe , Latin America, and Africa.

In closing the web help combination has joined two leading CX providers into a global platform for growth and value creation, bringing clients from growing markets further diversifying our marquee client list and significantly increasing our presence in Europe , Latin America and Africa.

Speaker 2: Our range and global reach of high value services and digital capabilities have been expanded, enhancing support for clients that both companies couldn't adequately serve in

Our range and global reach of high value services and digital capabilities have been expanded enhancing support for clients that both companies couldnt adequately serve independently.

Speaker 2: We have a strong track record of success integrating prior combinations, which will make the combination and the integration more seem...

We have a strong track record of success integrating prior combinations, which will make the combination and integration more seamless and we believe this highly complementary.

Andre Valentine: Regarding the 2.15 billion of senior notes, on the day the combination closed, we entered into cross-currency swap arrangements for a total notional amount of $500 million of the notes. The arrangements effectively convert $250 million each of the 2026 and 2028 notes in this synthetic Euro-based debt at lower prevailing interest rates. In addition to aligning the currency of a portion of our interest payments to the organization's Euro-denominated cash flows, the swap also reduced the weighted average interest rate of the 2.15 billion notes from approximately 6.70% to approximately 6.36%.

Speaker 2: We believe this highly complimentary union creates a unique customer engagement offering that will keep our business resilient through business.

Union creates a unique customer engagement offering that will keep our business resilient through business cycles. We're excited about the combination of a warehouse, we look forward to the growth and value. It will create in the future at this point, let Heath. Please open the line for questions.

Speaker 2: We're excited about the combination of web health. We look forward to the growth and value it will create in the future. At this point, let's leave.

Speaker 1: Yes, sir, as a reminder, to ask a question, you will need to press star 11 on your telephone. Again, that star 11 on your telephone's ask a question. To remove yourself from the queue, you may press star 11 again. Please stand by while we compile the Q&A Ross.

Yes, Sir as a reminder to ask a question you will need to press star one one on your telephone again Thats Star one one on your telephone is ask a question to remove yourself from the queue. You May Press Star one one again, please standby, while we compile the Q&A roster.

Speaker 1: Again, that star 1-1 on your telephones asks a question.

Andre Valentine: As we said, when we announced the Web Help Transaction, the combination of our strong free cash flow generation and adjusted EBITDA growth gives us a clear path to reducing leverage and we're committed to reducing our net leverage to about two times adjusted EBITDA within two years after the transaction closed. Regarding our capital allocation priorities, our focus is on organic growth, the successful integration of Web Help, realizing the planned synergies and repaying debt. We're committed to investment-grade principles. We will prioritize paying down debt and reducing our net leverage while continuing our dividend and discipline share repurchases to offset the delusion of equity grants.

Again, Thats Star one one on your telephone to ask a question.

Our first question.

Yeah.

Speaker 1: comes from the line of Rupert Blue, Bada Karia, a Bank of America. Hi.

It comes from the line of route Blue Kinda carrier of Bank of America.

Hi, Thanks for taking my questions.

Speaker 4: Andre, if you can, I was wondering if you can kind of simplify what the contribution is from Web help for fourth quarter revenues operating margin and EBITDA. You gave a lot of details, but I'm not sure I got all of that. So can you please specify how much is the revenue contribution operating income contribution?

Andre if you can I was wondering if you can kind of simplified what the contribution is from web help for fourth quarter revenues operating margin.

And in EBITDA.

You gave a lot of details, but I am not sure I got all of that so can you. Please specify how much is the revenue contribution operating income contribution and what is the core business doing in the fourth quarter.

Andre Valentine: Now, I'll turn my attention to the business outlook for the fourth quarter, including anticipated contributions from Web Help. The Web Help contribution to fourth quarter guidance includes forecasted financial performance for a period of slightly more than two months. For the fourth quarter, we now expect reported revenue to be in a range of 2.19 billion to 2.215 billion dollars based on current exchange rates. Our fourth quarter expectations reflect approximately two to three percent of pro-former constant currency growth for the combined organization if the combination had occurred at the beginning of the fourth quarter of 2022.

Speaker 2: Yeah, so I'm happy to do that, Ruple. So from a revenue perspective, the legacy concentric operations pre-web help are very much in line with the prior guidance. So the prior guidance for the full year, Ruple was to grow two to three percent.

Yes, so happy to do that replay so for I'll.

I'll start with revenue so from a revenue perspective.

The legacy.

Concentrix operations pre pre web health are very much in line with the prior guidance. So the prior guidance for the full year <unk> was to grow 2% to 3%.

Speaker 2: for the full year. And so that will be the contribution from the concentric operations will be in line with that guidance. So that kind of covers that. Web helps certainly a creative to the overall growth rate as we expected. And it will be here in the fourth quarter. So that's the...

For the full year, and so that will be the contribution from the.

Concentrix operations will be in line with with.

That guidance so.

That kind of covers that web help certainly accretive to the overall growth rate as we expected.

Andre Valentine: Excluding the effect of the Web Help combination, our expected constant currency growth in the fourth quarter would be consistent with the prior guidance for the full year. Our profitability expectations for the fourth quarter include non-gap operating income and a range of $330 million to $340 million. At the midpoint of our guidance, this equates to a non-gap operating income margin of approximately 15.2 percent, an increase of 10 basis points over the prior year.

And it will be here in the fourth quarter.

So.

That's that from a margin perspective.

Speaker 2: really, you know, if you go back to when we announced the transaction, the margin profiles of the two businesses were very, very close, both from an EBITDA perspective and a non-GAPOI perspective. And so, included in the guidance, you can pretty much, you know, at the midpoint, that 15.2% non-GAPOI margin, you can pretty much apply that to both sides. Depreciation is a little bit, we talked about this in the past, for Web help a little bit higher as to percentage of revenue, so you might see.

Really if you go back to when we announced the transaction the margin profiles of the two businesses were very very close both from an EBITDA perspective, and a non-GAAP perspective, and so included in the guidance that you can pretty much at the midpoint that 15, 2% non-GAAP op margin you can pretty much apply that to.

Andre Valentine: Excluding the effect of the Web Help combination, our expected non-gap operating income in the fourth quarter would be consistent with the prior guidance for the full year 2023. We expect net interest expense in the fourth quarter to be approximately 72 million dollars with an effective tax rate of 26 percent and a weighted average deluded share count were approximately 62 million shares. Note that the average deluded share count for the fourth quarter is less than the 66.6 million outstanding shares post-close as a result of the mid-quarter timing of the close.

Both sides.

Depreciation is a little bit we've talked about this in the past for wet help a little bit higher as a percentage of revenue so.

You might see.

Speaker 2: 10, 20 basis points or so higher adjusted EBITDA margin coming from the web help side. But again, very complimentary from a margin perspective.

10 to 20 basis points or so higher adjusted EBITDA margin coming from the web help side, but again very complementary from a margin perspective in Q4, and I expect significant margin improvement as synergies start to roll in in earnest as we move into 2024.

Speaker 2: and then expect significant margin improvement as synergies start to roll in in earnest as we move into 2020.

Speaker 4: And again, just to clarify, I mean, based on what you just said, would that imply like about 500 million on the revenue contribution from Web help?

And again just to clarify I mean based on what you just said would that imply like about $500 million on the revenue contribution from web help in fiscal <unk> and then can you talk about the below the line items below operating income can you remind us what the interest expense is going to be in the fourth quarter as well as.

Andre Valentine: Accordingly, we expect nine gap EPS for the fourth quarter to be in a range of $3.3 per share to $3.15, for Share. This expectation for nine-gap EPS assumes no impact from other income and expense, due to the unpredictability of future foreign currency movements. We continue to expect the business to generate robust cash flows, but free cash flow for the combined organization to be in the range of 200 to 225 million, excluding any transaction and integration costs in the fourth quarter.

Speaker 4: And then can you talk about the below the line items like below operating

Speaker 4: Can you remind us what the interest expense is going to be in the fourth quarter as well as are there any other expenses? I think you said there was also integration costs. What is the estimate for that for the first time?

Are there any other expenses I think you said there was also integration.

Costs, what is the estimate for that for the fourth quarter.

Speaker 2: Yeah, so the integration costs in a quarter are a little hard to give an exact estimate on. So overall, the integration costs, what we've said about those is they will be one for one from matching the synergy number. So $120 million total in integration costs somewhat front loaded.

Yes so.

Integration costs in it.

Quarter.

Andre Valentine: Our business outlook does not include transaction and integration costs associated with the web help combination or any future acquisitions. Also, not included in the guidance or impacts from future foreign currency fluctuations. We continue to expect the web help operations to generate approximately 3 billion of revenue and approximately 500 million of adjusted EBITDA for the full year 2023, with the combined organization yielding nearly 9.6 billion in revenue and nearly 1.6 billion in combined EBITDA on a pro-forma basis for the full fiscal year 2023.

A little hard to give an exact estimate on so overall the integration costs, what we've said about those they will be one for one.

From a.

Matching the synergy number so the $120 million total and integration costs.

Front loaded.

Speaker 2: with roughly 80 million or so in the first year, I believe, and 40 million in a second. So think of that 80 million, think of what would that equate to in two months and you're probably in line.

With roughly 80 million or so in the first year, I believe and $40 million in the second so think of that $80 million.

Think of what would that equate to in two in two months and Youre probably in line there.

Speaker 2: The other part of your question, I missed it. Oh, the revenue contribution. I think you're a little low.

Andre Valentine: We expect earnings per share accretion of mid to high single digits in the first full year after close and double digit accretion in the second year. We also expect to realize $75 million in synergies in the first year after closing, growing to 120 million in synergies in year three.

The other part of your question I missed it.

The revenue contribution I think youre a little low.

Speaker 2: at five hundred million uh... the contribution for web help is is is higher

$500 million.

The contribution for web help is higher than that.

Speaker 4: And maybe from my last one, maybe a last one to Chris. So you talked about working on some AI, Generative AI projects. So Chris, when we think about this, I mean, based on the experience you have now, clients want to understand the impact of Generative AI. You think, you know, I mean, in the past, you said like 10 to 15% of volumes can get impact.

Okay, and maybe for my last one maybe I'll ask one to Chris.

You talked about working on some AI generated.

Andre Valentine: We plan to provide guidance for 2024, our fourth quarter results to the call. In closing, the web help combination is showing two leading CX providers into a global platform for growth and value creation, bringing in clients from growing markets, further diversifying our marquee client list, and significantly increasing our presence in Europe, Latin America, and Africa. Our range and global reach of high value services and digital capabilities have been expanded, enhancing support for clients that both companies couldn't adequately serve independently.

<unk> so Chris when we think about this I mean based on the experience you have now.

Clients wanted to understand the impact of generate of AI.

I mean in the past, you've said like 10% to 15% of volumes can get impacted.

Speaker 4: I mean, how has your thought changed if at all, now that you're doing more of these projects? And do you think that impact varies by end market, use case, and how should we think about that? I mean, in any way to quantify this.

How has your thoughts changed if at all now that Youre doing more of these projects and do you think that impact varies by end market use case.

And how should we think about that.

Any way to quantify this at this point in the cycle. Thank you.

Speaker 3: I, I root blue. So a couple of different points there. I think when we talk about 10 to 15% of transactions can be automated. That's what we're doing on a yearly basis, regardless of gendered of AI or RPA or anything else that's coming along with it. And what we've talked about is that gendered of AI can probably increase that by a little bit, but not, you know, dramatically more than that from what we're seeing as we deploy these practices.

So a couple of different points there I think when we talk about 10% to 15% of transactions can be automated that's what we're doing on a yearly basis, regardless of generative AI or RPI or anything else, that's coming along with it and what we've talked about is the degenerative AI can probably increase that by a little bit but not.

Andre Valentine: We have a strong track record of success, integrating prior combinations, which will make the combination an integration more seamless. We believe this highly complimentary union creates a unique customer engagement offering that will keep our business resilient through business cycles. We're excited about the combination web help. We look forward to the growth and value it will create in the future.

Dramatically more than that from what we're seeing as we deploy these practices whats offsetting that is the new revenue streams that we're seeing by deploying these new technologies, both from a design implementation and running the new technologies and Curating. The content that goes along with it and as we kind of talked in some of the prepared remarks, even net new.

Speaker 3: What's offsetting that is the new revenue streams that we're seeing by deploying these new technologies, both from design implementation and running the new technologies and curating the content that goes along with it. And as we kind of talked in some of the prepared remarks, even net new areas that we're deploying our own platforms where we're getting net new revenue flows that are coming in for that. So that clearly is what we're focused on of offsetting any revenue headwinds, as well as taking more share within the client.

Unknown Executive: At this point, with ease, please open the line for questions. Yes, sir, as a reminder, to ask a question, you will need to press star 1-1 on your telephone. Again, that star 1-1 on your telephone's ask a question. To remove yourself from the queue, you may press star 1-1 again. Please stand by while we compile the Q&A roster. Again, that star 1-1 on your telephone's ask a question.

Areas that we're deploying our own platforms, where we're getting net new revenue flows that are coming in for that so that clearly is what were focused on offsetting any revenue headwinds as well as taking more share within the clients.

Speaker 3: I think what we're seeing right at the moment is that we're able to deploy generative AI faster than some of our clients can actually deploy it. And so we're seeing that the benefits in our operating cost structure and scalability that we called out a number that are starting to get to scale. And hopefully we'll see additional benefits from those as we get them to across the entire enterprise, including the new web help combination, which I think offsets any kind of cost mitigation that we might have from any impact from a revenue perspective that's coming in from automation, if that makes sense.

What we're seeing right at the moment is that we are able to deploy generative AI faster than some of our clients can actually deploy it and so we're seeing the benefits in our operating cost structure and scalability that we called out a number that are starting to get to scale and hopefully we will see additional benefits from those as we get them to across the entire enterprise, including the new.

Ruplu Bhattacharya: Our first question comes from the line of Ruplu, Badakaria, a bank of America. Hi, thanks for taking my questions. Andrei, if you can, I was wondering if you can kind of simplify what the contribution is from web help for fourth quarter revenues operating margin and EBITDA. You gave a lot of details, but I'm not sure I got all of that. So can you please specify how much is the revenue contribution operating in and Come Contribution, and what is the core business doing in the fourth quarter?

Web help combination.

Which I think offsets any kind of.

Cost mitigation that we might have from any impact from a revenue perspective, that's coming in from from automation if that makes sense.

Thanks for all the details appreciate it.

Speaker 3: No problem. Thank you.

No problem. Thank you.

Speaker 1: Thank you again to ask a question. Please press star one one on your telephone. Again, that star one one on your telephone to ask a question.

Thank you again to ask a question. Please press star one one on your telephone again that star one one on your telephone to ask a question.

Ruplu Bhattacharya: Yeah, so I'm happy to do that, Ruplu. So from a revenue perspective, the legacy concentric operations pre-web help are very much in line with the prior guidance. So the prior guidance for the full year, Ruplu was to grow 2% to 3% for the full year. And so that will be the contribution from the concentric operations will be in line with that guidance. So that kind of covers that. Web help certainly accretive to the overall growth rate as we expected.

Our next question.

Speaker 1: comes from the line of Oliver Davies of Redburn at Lenton.

Comes from the line of Oliver Davies of Redburn Atlantic.

Speaker 5: Yeah, hi guys. I guess a couple of questions. Just firstly, in terms of, you know, you kind of held the revenue growth guidance for the concentric legacy business. So can you just talk about what you're seeing in terms of underlying volumes? And you client decision, I guess, you know, looks like healthcare kind of accelerated in the quarter as you know, most of the other sectors were pretty similar to the last quarter. And I guess following on from that, you know, you know, you said a client's still looking to offshore work hospital or is anything changed on that front?

Yeah, Hi, guys I guess, a couple of questions just firstly in terms as you kind of how the revenue growth guidance for the consensus legacy business. So can you just talk about what youre seeing in terms of underlying volumes.

Our new cloud decision I guess.

Like health care kind of accelerated in the quarter.

Unless you have the sectors were pretty similar to the last quarter and I guess following on to not.

Ruplu Bhattacharya: And it will be here in the fourth quarter. So that's that from a margin perspective. Really, you know, if you go back to when we announced the transaction, the margin profiles of the two businesses were very, very close, both from an EBITDA perspective and a non-GAPOI perspective. And so included in the guidance, you can pretty much, you know, at the midpoint, that 15.2% non-GAPOI margin, you can pretty much apply that to both sides.

Still looking to offshore where possible or has anything changed on that front.

Speaker 3: Hi Oliver, so to answer your first question, what we're seeing is kind of continued consumer

Hi, Oliver so to.

As for your first question, what we're seeing is kind of.

Continued consumer.

Speaker 3: I'll call it budgeting for new consumer electronic devices, subscription spending, other things that are somewhat discretionary. So we continue to see those volumes depressed across some of our larger clients. But the volume is now becoming more steadily depressed, if that makes sense. It's more stable versus what we saw at the beginning of the year, where it tends to fluctuate.

I'll call it budgeting for new consumer electronic devices subscription spending other things that are somewhat discretionary. So we continue to see those volumes depressed across some of our larger clients.

Ruplu Bhattacharya: The depreciation is a little bit, we talked about this in the past, for Web help a little bit higher as a percentage of revenue. So you might see, you know, 10, 20 basis points or so, higher adjusted EBITDA margin coming from the Web help side. But again, very complimentary from a margin perspective in Q4. And then expect significant margin improvement as synergies start to roll in in earnest as we move into 2024.

The volume is now becoming more steadily depressed if that makes sense, it's more stable versus what we saw at the beginning of the year, where it tends to fluctuate.

Speaker 3: We are seeing growth in the strategic verticals that we've called out, primarily because of net new wins and net new services we're putting into those verticals, such as the healthcare vertical banking financial services. And even travel we're doing quite well at. And we still see travel despite sort of my comments about consumers cutting back in some areas being quite robust into the future from from a volume expectation perspective. From just an overall off-shoring, near-shoring comment.

We're seeing growth in our strategic verticals that we've called out primarily because of net new wins and net new services, we're putting into those those vertical such as the health care vertical banking financial services and even travel we're doing quite well and we still see travel despite sort of my comments about consumers cutting back in some areas being quite robust.

Into the future from from a volume expectation perspective.

Ruplu Bhattacharya: And again, just to clarify, I mean, based on what you just said, would that imply like about 500 million on the revenue contribution from Web help in fiscal 4Q. And then can you talk about the below the line items, like below operating income, can you remind us what the interest expense is going to be in the fourth quarter, as well as are there any other expenses? I think you said there was also integration costs.

From just an overall offshoring nearshoring comment as we've talked about before clients for the most part are very focused on managing our cost structure and so pretty much. The majority of all new transactions and deals and ramps of existing clients are tending to be done at the most cost effective short environment, whether that be near.

Speaker 3: As we've talked about before, clients for the most part are very focused on managing their cost structure. And so pretty much the majority of all new transactions and deals and ramps of existing clients.

Speaker 3: are tending to be done at the most cost effective shore environment, whether that be near shore or offshore. Very few starts, in fact, very, very, very, very few starts, are starting out on shore at a higher cost structure. It's just not in client's budgets right at the moment.

<unk> offshore very few starts in fact very very very very few starts are starting out onshore at a higher cost structure.

Ruplu Bhattacharya: What is the estimate for that for the fourth quarter? Yeah, so integration costs in a quarter are a little hard to give an exact estimate on. So overall, the integration costs, what we've said about those is that they will be one for one from matching the synergy number. So 120 million dollars total and integration costs somewhat front loaded, you know, with roughly 80 million or so in the first year, I believe in 40 million in the second.

It's just not in clients' budgets sort of at the moment.

Speaker 5: Okay, great, thanks. And then maybe one for on dates, from the free cash flow, just it looks to be driven by working capital. So you could use comment on the reason for that in terms of free cash flow.

Okay, great. Thanks.

And then maybe one on the just on the free cash side, just it looks to be driven by working capital. So can you just comment on.

The reasons for that.

In terms of free cash flow.

Ruplu Bhattacharya: So think of that 80 million, you know, think of what that equate to in two months and you're probably in line there. The other part of your question, I missed it. Oh, the revenue contribution. I think you're a little low at 500 million. The contribution for Web help is higher than that. Okay.

Hey, Andre Youre not coming through.

Speaker 2: Sorry about that. We muted ourselves for a second. So, Ali.

Okay.

Sorry about that.

We have metered ourselves for a second.

So Ali.

Speaker 2: You're right. The improvement in pre-cash flow is largely coming from working capital improvements. And that's really just a focus on the blocking and tackling of getting bills out on time and collected on time, which was drove roughly a two-day improvement from the prior quarter in our day sales outstanding. It's really just...

You are right the improvement in free cash flow is.

Is largely coming from working capital.

Improvements and Thats really just a focus on the blocking and tackling of getting bills out on time.

Ruplu Bhattacharya: And maybe for my last one, maybe a last one to Chris. So you talked about working on some AI generative AI projects. So Chris, when we think about this, I mean based on the experience you have now, you know, clients want to understand the impact of generative AI. Do you think, you know, I mean in the past, you said like 10 to 15% of volumes can get impacted. I mean, how has your thought changed if at all, now that you're doing more of these projects.

And collected on time, which drove roughly a two day improvement.

From the prior quarter.

Ruplu Bhattacharya: And do you think that impact varies by end market use case. And how should we think about that? I mean anyway to quantify this, at Dispoint in the cycle. Thank you. I Ruplu, so a couple different points there. I think when we talk about 10 to 15% of transactions can be automated. That's what we're doing on a yearly basis, regardless of generative AI or RPA or anything else that's coming along with it.

Our days sales outstanding So it's really just the increased focus on that it's always been a focus but it's just really good execution by the team and getting the bills out and getting them collected and we think it's sustainable as we move forward, we feel very very confident about the free cash flow guide for the.

Speaker 2: increased focus on that. It's always been a focus, but just really good execution by the team and getting the bills out and getting them collected. And we think it's...

Speaker 2: Sustainables as we move forward feel very very confident about the the free cash flow guide for the fourth quarter and if you're really good about hitting the guy

The fourth quarter.

And feel really good about hitting.

Hitting the guide that.

Speaker 2: that we set out at the very beginning of the year to generate, you know, without web help.

We set out at the very beginning of the year to generate.

Without with health.

Speaker 2: half a billion dollars or more of free cash flow this year. We're definitely on track to do that if you look at how we've done through three quarters.

Half a billion dollars or more of free cash flow. This year, we're definitely on track to do that if you look at how we've done two or three quarters.

Great. Thanks very much.

Yes.

Thanks.

Ruplu Bhattacharya: And what we've talked about is that generative AI can probably increase that by a little bit, but not, you know, dramatically more than that from what we're seeing as we deploy these practices. What's offsetting that is the new revenue streams that we're seeing by deploying these new technologies, both from design, implementation, and running the new technologies and curating the content that goes along with it. And as we kind of talked in some of the prepared remarks, even net new areas that, you know, we're deploying our own platforms where we're getting net new revenue flows that are coming in for that.

Thank you once again to ask a question. Please press star one one on your telephone again Thats Star one on your telephone task question.

Speaker 1: Thank you once again to ask a question. Please press star 11 on your telephone. Again, that's star 11 on your telephone. Pass a question.

Please standby for our next question.

Speaker 1: which comes from the line of Divya Goyal, asko Shabay.

Which comes from the line of Vivien <unk> of Scotiabank.

Good afternoon, everyone.

Speaker 6: to have known as a long. So, I'll be briefly address the part of my question, which was on the guide that it provided. So Chris addressed that, you know, there is some content node.

Thank you.

Well part of my question, which was on the guide that you provided so Chris address it.

Ruplu Bhattacharya: So that clearly is what we're focused on offsetting any revenue headwinds as well as taking more share within the clients. I think what we're seeing right at the moment is that we're able to deploy generative AI faster than some of our clients can actually deploy it. And so we're seeing that the benefits in our operating cost structure and scalability that we called out a number that are starting to get to scale.

There is some some continued.

Speaker 6: how should I say slow down in the macro that's been noted across the business. What level of confidence can we see in terms of the overall guidance that you provided for Q4? And how should we expect the business to perform going forward considering obviously what's going on for the AI transformation alongside the macro impact?

How should I say slowdown in the macro that's been noted across the business what level of confidence can be seen in terms of the overall guidance that you provided for Q4 and how should we expect the business to perform going forward.

With me, what's going on there.

Ruplu Bhattacharya: And hopefully we'll see additional benefits from those as we get them to across the entire enterprise, including the new web help combination, which I think offsets any kind of cost mitigation that we might have from any impact from a revenue perspective that's coming in from automation, if that makes sense. Thanks for all the details. Appreciate it. No problem. Thank you. Again, to ask a question, please press star 11 on your telephone. Again, that star 11 on your telephone to ask a question.

<unk> transformation.

The macro impact.

Yes.

Speaker 3: So I was going to want to take that because it ties into some of the AI conversation that we're talking about. So a couple of different points to it. When we look at our guidance for Q4, what we've kind of stated before is that we've stripped out the seasonality of the business that historically has been in Q4 primarily based on what we saw last year. And so when we're talking to our clients and we're looking at their volumes, we're seeing that

Sorry.

Can I take that because it ties into some of the AI conversation that we're talking about.

So a couple of different points. So when we look at our guidance for Q4, what we've kind of stated before is that we've stripped out the seasonality of the business that historically has been in Q4, primarily based on what we saw last year and so when we're talking to our clients and we're looking at their volumes, we're seeing that.

Speaker 3: flatness from a seasonality perspective come through. As I also mentioned, what we're seeing is sort of a steady rate of business from the clients that have seen decreased volumes.

Sort of flatness from a seasonality perspective come through and they also mentioned what we're seeing is sort of a steady rate of business from the clients that have seen decreased volumes based on consumer demand and those are kind of continuing through and they've been kind of trailing as we've expected for the last number of weeks.

Oliver Davies: My next question comes from the line of Oliver Davies of Redburn Atlantic. Yeah, hi, guys. I guess a couple of questions.

Speaker 3: based on consumer demand. And those are kind of continuing through and they've been kind of trailing as we've expected for the last number of weeks and the last quarter. So we're kind of looking at that as pulling through to Q4 as well. And then on the third element from a generative AI perspective, right now we're seeing generative AI as an additive revenue to our business, where we're doing the consulting, we're doing the implementations, we're doing the proof of concepts, we're getting services for building out the models and managing those models as they start to come into production. And so that has real no impact in our fourth quarter. I was outside of the revenue that we expected that's already been booked in or sorry, that's been sold. And now we're going into the implementation and billing phase.

Oliver Davies: Just firstly, in terms of you know, you kind of held the revenue growth guidance for the concentric legacy business. So can you just talk about what you're seeing in terms of underlying volumes? And new client decision, I guess, you know, looks like healthcare kind of accelerated in the quarter as you know, most the other sectors were pretty similar to the last quarter. And I guess following on from that, you know, you said a client is doing a social work or school or is anything changed on that front.

The last quarter. So we're kind of looking at that as pulling through to Q4 as well and then on the third element from generative AI perspective, right now, we're seeing generative AI as an additive revenue to our business, where we're doing the consulting we're doing the implementations we're doing the proof of concepts, we're getting services for bill.

Building out the models and managing those models as they start to come into production and so that has real no impact in our fourth quarter outside of the revenue that we expected.

Christopher Caldwell: Hi, Oliver. So to answer your first question, what we're seeing is kind of continued consumer, I'll call it budgeting for new consumer electronic devices, subscription spending, other things that are somewhat discretionary. So we continue to see those volumes depressed across some of our larger clients, but the volume is now becoming more steadily depressed if that makes sense. It's more stable versus what we saw at the beginning of the year where it tends to fluctuate.

That's already been booked sorry, that's been sold and now we're going into the implementation and billing phase.

Speaker 6: that's helpful. Just following on this, that process here, I want you to understand, have you been seeing any pricing pressure or conversely any margin benefits given the automation that you are trying to bring across the customer?

That's helpful. Just following on this.

Process here I wanted to understand have you been seeing any pricing pressure or Conversely, any margin benefit given the automation.

Turning to bring across the customers.

Christopher Caldwell: We are seeing growth in the strategic verticals that we've called out primarily because of net new wins and net new services. We're putting into those those verticals, such as the healthcare vertical banking financial services and even travel. We're doing quite well at and we still see travel despite sort of my comments about consumers cutting back in some areas being quite robust into into the future from from a volume expectation perspective, from just an overall offshoring near-shoring comment.

Yes, so we do see pricing pressure in highly transactional business and as we've talked about it that's about 10% of our business. Although it continues to decline.

Speaker 3: Yeah, so we do see pricing pressure in the highly transactional business. And as we've talked about it, that's about 10% of our business, although it continues to decline. If you think about it back in February , it was about 13%. Now it's done to 10% and our goal is obviously to continue to drive that down.

If you think about it back in February it was about 13% and I was down to 10% and our goal is obviously to continue to drive that down in that part of the segment part of the business, it's very easy.

Speaker 3: In that part of the segment, or part of the business, it's very easy to ramp. It's quite commodity based business. And there are certainly people who are chasing it for revenue, our preference is to more focus on the higher value services. And, you know, when that business by quality of service, but not worry about it if it goes away from just a pure pricing perspective.

Easy to ramp its quite commodity based business and there are certainly people who are chasing it for revenue our preferences to more focus on the higher value services and.

Christopher Caldwell: As we've talked about before, clients for the most part are very focused on managing their cost structure. And so pretty much the majority of all new transactions and deals and ramps of existing clients are tending to be done at the most cost effective shore environment, whether that be near-shor or offshore. Very few starts, in fact, very very very very few starts, are starting out on shore at a higher cost structure. It's just it's just not in clients' budgets right at the moment.

When that business by quality of service, but not worry about it if it goes away from a from just a pure pricing perspective, and the higher value services, we're seeing it much more stable from a pricing environment clients are more focused on the security.

Speaker 3: In the higher value services, we're seeing it much more stable from a pricing environment. Clients are more focused on the security.

Speaker 3: the work that you're doing, they're focused on compliance of the work that you're doing, they're focused on consistency of the work, they're focused on how you're going to actually deliver the outcomes. And so therefore, where we're putting in technology, where we're putting in sort of this automation for driving better efficiencies internally.

The work that Youre doing there focused on compliance of the work that youre doing there focused on consistency of the work. They are focused on how youre going to actually deliver the outcomes and so therefore, we're putting in technology, where we're putting in sort of this automation for driving better efficiencies internally.

Andre Valentine: Okay, great, thanks. And then maybe one for Andre, it's from the free cash flow, just it looks to be driven by working capital. So you could use comment on, you know, the reason for that in terms of free cash flow. Andre, you're not coming through. Sorry about that. We muted ourselves for a second. So Ali, you're right, the improvement in free cash flow is largely coming from working capital improvements. And that's really just a focus on the blocking and tackling of getting bills out on time and collected on time, which was drove roughly a two day improvement from the prior quarter in our day sales outstanding.

Speaker 3: That is what is supporting our margin stability within those clients. And we expect that that will continue on as we continue to execute on our strategy. Excellent. That's David.

What is supporting our margin stability within those those clients and we expect that that will continue on.

As we continue to execute on our strategy.

That's very helpful.

No problem.

Yeah.

Speaker 1: Thank you. Again, to ask a question, please press star 11 on your telephone. Again, that star 11 on your telephone to ask a question.

Thank you again to ask a question. Please press star one one on your telephone again Thats Star one one on your telephone to ask a question.

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Speaker 1: This does conclude today's conference call. Thank you for your participation. You-

This does conclude today's conference call. Thank you for your participation.

Andre Valentine: So it's really just increased focus on that. It's always been a focus, but it's just really good execution by the team and getting the bills out and getting them collected. And we think it's sustainable as we move forward. Feel very, very confident about the free cash flow guide for the fourth quarter. And if you're really good about hitting the guy that we set out at the very beginning of the year to generate, you know, without web help, half a billion dollars or more of free cash flow this year, where we're definitely on track to do that if you look at how we've done for three quarters.

You may now disconnect.

Unknown Executive: Great.

Okay.

Unknown Executive: Thanks very much for asking questions.

[music].

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Yes.

Okay.

Okay.

Yes.

Okay.

Okay.

Okay.

[music].

Unknown Executive: Thanks. Thank you once again to ask a question. Please press star 11 on your telephone. Again, that star 11 on your telephone to ask a question.

Okay.

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Yes.

Okay.

Okay.

Divya Goyal: Stand by for an next question, which comes from a line of Divya go y'all us goes your bank. So I'm there. You've really addressed the part of my question, which was on the guide that is provided to Chris address that, you know, there is some some content node.

Yes.

Sure.

Okay.

Okay.

Okay.

Yes.

Okay.

Okay.

Okay.

Okay.

Christopher Caldwell: How should I say slow down in the macro that's been noted across the business. What level of confidence can be seen in terms of the overall guidance that you provided for Q4 and how should we expect the business to perform going forward considering obviously what going on with the AI transformation alongside the macro impact. Actually, Vivian, what I'm sorry I was going to want to take that because it ties into some of the AI conversation that we're talking about.

Okay.

Okay.

Yeah.

Christopher Caldwell: So a couple of different points to when we look at our guidance for Q4, what we've kind of stated before is that we've stripped out the seasonality of the business that historically has been in Q4 primarily based on what we saw last year. And so when we're talking to our clients and we're looking at their volumes, we're seeing that sort of flatness from a seasonality perspective come through. As I also mentioned, what we're seeing is sort of a steady rate of business from the clients that have seen decreased volumes based on consumer demand.

Christopher Caldwell: And those are kind of continuing through and they've been kind of trailing as we've expected for last number of weeks and last quarter. So we're kind of looking at that as pulling through to Q4 as well. And then on the third element from a generative AI perspective, right now we're seeing generative AI as an additive revenue to our business, where we're doing the consulting, we're doing the implementations, we're doing the proof of concepts, we're getting services for.

Christopher Caldwell: Building out the models and managing those models as they start to come into production. And so that has real no impact in our fourth quarter outside of the revenue that we expected that's already been been booked in or sorry that's been sold and now we're going into the implementation and billing phase.

Christopher Caldwell: That's helpful. Just following on this thought process here, I wanted to understand, have you been seeing any pricing pressure or conversely any margin benefits given the automation that you are trying to bring across the customers? Yeah, so we do see pricing pressure in the highly transactional business. And as we've talked about it, that's about 10% of our business, although it continues to decline. If you think about it back in February, it was about 13% now it's done to 10% and our goal is obviously to continue to drive that down.

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Christopher Caldwell: In that part of the segment are part of the business, it's very easy to ramp it. It's quite commodity based business. And there are certainly people who are chasing it for revenue. Our preference is to more focus on the higher value services and when that business by quality of service, but not worry about it if it goes away from just a pure pricing perspective. In the higher value services, we're seeing it much more stable from a pricing environment.

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Speaker 1: Thank you for standing by and welcome to concentric fiscal third quarter 2023 financial results conference call at this time all participants are in a listen to only most.

Thank you for standing by and welcome to Concentrix fiscal third quarter 2023 financial results Conference call. At this time, all participants are in a listen only mode.

Speaker 1: After the speaker presentation, there will be a question and answer session.

After the speaker presentation, there will be a question and answer session.

Speaker 1: To ask a question during the session, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. I would now like to hand the call over to Vice President Invest Relations, David Stein. Please, go ahead.

To ask a question during the session you will need to press star one one on your telephone to remove yourself from the queue. You May Press Star one one again I would now like to hand, the call over to Vice President Investor Relations David Stein. Please go ahead.

Speaker 2: Thank you, Lateef, and good evening. Welcome to the concentric's corporation, third quarter fiscal 2023 earnings call.

Thank you Latif and good evening welcome to the Concentrix Corporation third quarter fiscal 2023 earnings call.

Speaker 2: As a result of the combination earlier this week, we now operate as one concentric's wet health.

As a result of the combination earlier this week, we now operate as one concentrix wed help.

Speaker 2: This call is the property of concentric's web help and may not be recorded or re-broadcast without written permission.

This call is the property of Concentrix wed help and may not be recorded or rebroadcast without written permission.

Speaker 2: Discall contains forward-looking statements that address our expected future performance, and that by their nature, address matters that are uncertain.

This call contains forward looking statements that address our expected future performance and that by their nature address matters that are uncertain.

Speaker 2: These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking states.

These uncertainties may cause our actual future results to be materially different than those expressed in our forward looking statements.

Speaker 2: We do not undertake to update our forward-looking statements as a result of new information or future events or development.

We do not undertake to update our forward looking statements as a result of new information or future events or developments.

Speaker 2: Please refer to today's earnings release and our most recent filings with the SEC for additional information regarding uncertainties that could affect our future financial results.

Please refer to today's earnings release, and our most recent filings with the SEC for additional information regarding uncertainties that could affect our future financial results.

Speaker 2: This includes the risk factors provided in our annual report on Form 10K and SESC-SEC filing.

This includes the risk factors provided in our annual report on Form 10-K, and subsequent SEC filings.

Speaker 2: Also during the call, we will discuss non- GAAP financial measures, including free cash flow, non-GAP operating income, adjusted EBITDA, non-GAP EPS, and adjusted constant currency revenue growth.

Also during the call, we will discuss non-GAAP financial measures, including free cash flow non-GAAP operating income adjusted EBITDA, non-GAAP EPS and adjusted constant currency revenue growth.

Speaker 2: A reconciliation of these non-GAAP measures is available in the news release and on the company investor relations website under financial...

A reconciliation of these non-GAAP measures is available in the news release and on the company Investor Relations website under financials.

Speaker 2: With me on the call, our Chris called well, our president and chief executive officer, and Andre Valentine, our chief financial officer.

With me on the call are Chris Caldwell, our President and Chief Executive Officer, and Andre Valentine, Our Chief Financial Officer.

Speaker 2: Chris will provide a summary of our operating performance and growth strategy, and Andre will cover our financial results and business outlook. Then we'll open the call for your questions.

Chris will provide a summary of our operating performance and growth strategy and Andre will cover our financial results and business outlook.

Then we will open the call for your questions.

Now I'll turn the call over to Chris.

Speaker 3: Thank you, David. Hello, everyone, and thank you for joining us today for our third quarter earnings call. We are thrilled to have you with us as we discuss our performance in the third quarter and the exciting news that we have closed our transformative combination with web help.

Thank you David Hello, everyone and thank you for joining us today for our third quarter earnings call. We are thrilled to have you with us as we discuss our performance in the third quarter and the exciting news that we have closed our transformative combination with web help.

Speaker 3: We're pleased that we executed to deliver revenue and profit growth with strong cash flow in the third quarter. We experienced continued stable demand for high value and technology and few services, achieved solid new business signings and our continued focus on business mix, Grove, Margin, expansion.

We're pleased that we executed to deliver revenue and profit growth with strong cash flow in the third quarter.

We experienced continued stable demand for high value and technology infused services achieved solid new business signings and our continued focus on business mix drove margin expansion.

Speaker 3: We entered the fourth quarter with a strong pipeline of opportunities that we believe will continue to drive our growth into 2024.

We entered the fourth quarter with a strong pipeline of opportunities that we believe will continue to drive our growth into 2024.

Speaker 3: where reported revenue in the third quarter was 1.63 billion. On an organic constant currency basis, revenue grew 1.7%. Our third quarter non-gap operating income increased to 231 million, and adjusted EBITDA increased to 269 million, both growing by over 4% compared with last year.

Reported revenue in the third quarter was $1 six 3 billion on an organic.

<unk> constant currency basis revenue grew one 7%.

Our third quarter non-GAAP operating income increased to $231 million and adjusted EBITDA increased to $269 million, both growing by over 4% compared with last year.

Speaker 3: Solid execution yielded 10 basis point improvements in both our non-GAPE-OI and adjusted EBITDA margins over last year.

Solid execution yielded 10 basis point improvements in both our non-GAAP NOI and adjusted EBITDA margins over last year.

Speaker 3: Our non-GAP EPS was $2.71 per share compared with $2.95 per share last year, largely reflecting the impact of expected higher interest rates.

Our non-GAAP EPS was $2 71 per share compared with $2 95 per share last year, largely reflecting the impact of expected higher interest rates.

Speaker 3: Given our continued organic growth, strong free cash flow generation, and the accretive web help combination, we are pleased to raise the quarterly dividend by 10%. This increase quarterly dividend translates to $1.21 per share on an annualized basis.

Given our continued organic growth strong free cash flow generation and the accretive web help combination we are pleased to raise the quarterly dividend by 10%.

This increased quarterly dividend translates to $1 21 per share on an annualized basis.

Speaker 3: We continue to grow in each of our strategic verticals, which more than offset continued volume softness with a few select large clients as we discussed last quarter.

We continue to grow in each of our strategic verticals with more than offset continued volume softness with a few select large clients as we discussed last quarter.

Speaker 3: From a catalyst perspective, we gained experience, we again experienced sequential quarterly revenue growth with our digital CX solutions. Our unique digital IT service capabilities with thousands of staff able to design, deploy, and integrate technology-infused solutions at scale, differentiates us significantly from our traditional CX peers.

From a catalyst perspective, we gained experience.

Again experienced sequential quarterly revenue growth with our digital CX solutions are unique digital service capabilities with thousands of staff able to design deploy and integrate technology infused solutions at scale differentiates us significantly from our traditional CX peers.

From a sales perspective, we continue to focus on our sellers one approach with our combined catalyst and CX operations design build and run services.

During the quarter, we saw steady demand across multiple geographies and verticals as clients continue to look for differentiated ways to service their customers, while managing their cost structure.

Speaker 3: While clients are still signing smaller deals that ramped more slowly, we are pleased with the higher complexity work that we will be performing with these new wins. We also see a strong pipeline of opportunities as a combined concentric web help organization that we would not have been able to pursue prior to the combination.

While clients are still signing smaller deal that ramp more slowly we are pleased with the higher complexity work that we will be performing with these new wins. We also see a strong pipeline of opportunities as a combined concentrix web help organization that we would not have been able to pursue prior to the combination.

Speaker 3: From an operating perspective, we delivering exceptional service with record client attainment scores this quarter. Our focus remains on being the best partner for our client's relationships and winning more opportunities within each account. The more technology and few services we provide to our clients, the stickier our relationships become.

From an operating perspective, we are delivering exceptional service with record client attainment scores this quarter.

Our focus remains on being the best partner for our clients relationships and winning more opportunities within each account.

More technology <unk> services, we provide to our clients the stickier relationships become.

Speaker 3: Notably, we've accelerated our progress in the quarter deploying generative AI solutions both internally and with select client.

Notably we've accelerated our progress in the quarter deploying generative AI solutions, both internally and with select clients.

Speaker 3: from an internal productivity perspective, our AI analytics-based recruiting platform now supports 8.6 million career site visits and processes 3.3 million applications already this year. It has already allowed our team to scale more cost effectively, and we see additional benefits as we continue the rollout across our enterprise.

From an internal productivity perspective, our AI and Alex based recruiting platform now supports $8 6 million career sites visits and processes $3 3 million applications already this year. It has already allowed our team to scale more cost effectively and we see additional benefits as we continue the rollout across our enterprise.

Christopher Caldwell: That's very helpful. Thanks Chris. No problem.

Unknown Executive: Thank you again to ask a question, please press star 11 on your telephone again that star 11 on your telephone to ask a question.

Ms.

Speaker 3: Our AI-based workforce management solution optimizes concurrent scheduling and peak management for now over 115,000 of our staff where we see better utilization and user experience for the team. This again will have additional benefits as we scale up to the rest of our workforce.

Our AI based management workforce management solution Optimizes concurrent scheduling and peak management for now over 115000 of our staff, where we see better utilization and user experience for the team. This again, we will have additional benefits as we scale up to the rest of our workforce.

Speaker 3: Our most widely used proprietary AI Smart Assist product improves productivity through automation for over 190 team members now to easily access the tools and provide visibility to the information required to the performance of jobs every day easier.

Our most widely used proprietary AI smart assist product improves productivity through automation for over 190 team members now to easily access the tools and provide visibility to the information required to their performs their jobs every day easier.

Speaker 3: From the ability for AI to enhance our client services,

From the ability for AI to enhance our client services.

Speaker 3: We use an AI-based quality automation platform to drive insights from 100% of our customer interactions where deployed. Now, across tens of thousands of seats, the platform has reviewed 129 million interactions to date, delivering 20 to 30% improvements in audit efficiency and insights into customers. Clients that

We use an AI based quality automation platform to drive insights from 100% of our customer interactions. We're deployed now across tens of thousands of seats. The platform has reviewed our 129 million interactions to date, delivering 20% to 30% improvements in audit efficiency and insights into customers.

Clients since the high value.

Speaker 3: Our proprietary learning bot utilizes AI to simulate real-world customer scenarios for over 60,000 team members during training, establishing better speed to proficiency, reducing new higher average processing time, and improving effectiveness by 5% to 10% in the ramp period.

Our proprietary learning bought utilizes AI to simulate real world customer scenarios for over 60000 team members during training, establishing better speed to proficiency, reducing new higher average processing time, and improving effectiveness by 5% to 10% in the ramp periods.

Speaker 3: And our cognitive AI bots developed for client-specific implementations will handle over 900 million customer interactions by the end of this year, delivering significant value for our clients and a higher margin service for us.

And our cognitive AI bots developed for client specific implementations will handle over 900 million customer interactions by the end of this year delivering significant value for our clients and our higher margin service for us.

Speaker 3: We are actively investing in additional generative AI solutions to further enhance workforce productivity and improve the quality of interactions with customers.

We are actively investing in additional generative AI solutions to further enhance workforce productivity and improve the quality of interactions with customers.

Unknown Executive: As there appear to be no further questions in queue, this does conclude today's conference call. Thank you for your participation.

Unknown Executive: You may now disconnect. Thank you.

Speaker 3: We are on track to deploy our AI tools across nearly 80% of our legacy operations business by year end and start wide deployment of the tool within our new clients from our combination with web help shortly.

We are on track to deploy our AI tools across nearly 80% of our legacy operations business by year end and start wide deployment of the tool within our new clients from our combination with web help shortly.

David Stein: [inaudible] David Stein, David Stein, David Stein, David Stein,[inaudible] David Stein, David Stein, David Stein[inaudible] After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again.

David Stein: I would now like to hand the call over to Vice-President Investor Relations, David Stein. Please, go ahead. Thank you, Lateef, and good evening.

Speaker 3: Turning to AI with our clients, we are also collaborating with some of the world's largest companies to design, build, and run generative AI and few solutions across the services value chain.

Turning to AI with our clients. We are also collaborating with some of the world's largest companies to design build and run generative AI infused solutions across the services value chain.

David Stein: Welcome to the Concentrix Corporation, third quarter fiscal 2023 earnings call. As a result of the combination earlier this week, we now operate as one Concentrix Wed Help. This call is the property of Concentrix Wed Help and may not be recorded or rebroadcast without written permission. This call contains forward-looking statements that address our expected future performance and that by their nature address matters that are uncertain. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements.

Speaker 3: Working with one of our large technology clients in the key project this quarter, we use generative AI to power 35% efficiency gains and deliver releases 30% faster than traditional methods in their software development lifecycle.

Working with one of our large technology clients and a key project. This quarter, we used generative AI to power, 35% efficiency gains and deliver releases, 30% faster than traditional methods and their software development lifecycle.

David Stein: We do not undertake to update our forward-looking statements as a result of new information or future events or developments. Please refer to today's earnings release and our most recent filings with the SEC for additional information regarding uncertainties that could affect our future financial results. This includes the risk factors provided in our annual report on form 10K and subsequent SEC filings. Also during the call, we will discuss non-GAP financial measures, including free cash flow, non-GAP operating income, adjusted EBITDA, non-GAP EPS, and adjusted constant currency revenue growth. A reconciliation of these non-GAP measures is available in the news release and on the company investor relations website under financials.

David Stein: With me on the call, our Chris called well, our president and chief executive officer, and Andre Valentine, our chief financial officer. Chris will provide a summary of our operating performance and growth strategy and Andre will cover our financial results and business outlook.

Speaker 3: During the quarter, we also delivered a proof of concept for generative AI knowledge management that builds 3D modeling and augmented reality solutions for a global retail client that couldn't cost effectively be done before.

During the quarter. We also delivered a proof of concept for degenerative AI knowledge management that builds three D modeling an augmented reality solutions for our global retail clients that couldnt cost effectively be done before.

Christopher Caldwell: Then we'll open the call for your questions.

Speaker 3: Catalyst also launched its first deployment of our new generative AI infused offering any path that we have been developing for close to two years. For our first implementation, we seamlessly transitioned the entire Ccast tech staff of a healthcare client in less than eight hours, enabling fully automated generative AI experiences for patients and advisors with our generative AI intelligence insights and reporting capabilities. That's all it's up.

Catalysts also launched its first deployment of our new generative AI infused offering any path that we have been developing for close to two years.

Christopher Caldwell: Now I'll turn the call over to Chris. Thank you, David.

For our first implementation, we seamlessly transitioned the entire C cost techs off of a healthcare client and less than eight hours, enabling fully automated generative AI experiences for patients and advisors with our generative AI intelligence insights and reporting capabilities.

Christopher Caldwell: Hello, everyone, and thank you for joining us today for our third quarter earnings call. We are thrilled to have you with us as we discuss our performance in the third quarter and the exciting news that we have closed are transformative combination with Web Health. We're pleased that we executed to deliver revenue and profit growth with strong cash flow in the third quarter. We experienced continued stable demand for high value and technology and few services, achieved solid new business signings, and our continued focus on business mix drove margin expansion.

Christopher Caldwell: We entered the fourth quarter with a strong pipeline of opportunities that we believe will continue to drive our growth into 2024. We reported revenue in the third quarter was 1.63 billion. On an organic constant currency basis, revenue grew 1.7%. Our third quarter non-gap operating income increased to 231 million and adjusted EBITDA increased to 269 million both growing by over 4% compared with last year. Solid execution yielded 10 basis point improvements in both our non-gap UI and adjusted EBITDA margins over last year. Our non-GAP EPS was $2.71 per share, compared with $2.95 per share last year, largely reflecting the impact of expected higher interest rates.

Speaker 3: Historically, this would have taken weeks to months to transition. This has resulted in substantial saving for our clients and a new, revenue, new opportunity for our business.

Historically this would have taken weeks to months to transition.

This has resulted in substantial savings for our clients and a new revenue opportunity for our business.

Christopher Caldwell: Given our continued organic growth, strong free cash flow generation, and the accretive web help combination, we are pleased to raise the quarterly dividend by 10%. This increase quarterly dividend translates to $1.21 per share on an annualized basis. We continue to grow in each of our strategic verticals, which more than offset continued volume softness with a few select large clients as we discussed last quarter. From a catalyst perspective, we gained experience, we again experienced the quential quarterly revenue growth with our digital CX solutions.

Speaker 3: For another key client, we are now working exclusively to train and test a generative AI tool in advance of it becoming customer facing. Using a combination of automation and humans and our unique knowledge of the customer base and domain knowledge, we are building hundreds of thousands of different subject matter conversations to train the AI across multiple categories with a plan to increase the scope to a million conversations in the next six months.

For another key client we are now working exclusively to train and test a generative AI tool in advance of it becoming customer facing using a combination of automation in humans and our unique knowledge of the customer base and domain knowledge. We are building hundreds of thousands of different subject matter conversations to train the IR AI across multiple.

Categories with a plan to increase the scope to a million conversations in the next six months with.

Christopher Caldwell: Our unique digital IT service capabilities with thousands of staff able to design, deploy, and integrate technology-infused solutions at scale, differentiates us significantly from our traditional CX peers. From a sales perspective, we continued to focus on our Sell as One approach with our combined catalyst and CX operations design, build, and run services. During the quarter, we saw steady demand across multiple geographies and verticals as clients continued to look for differentiated ways to service their customers while managing their cost structure.

Speaker 3: with all of these examples and with many more we have deployed in our working on, I hope it is evident that we see opportunity to grow revenue and be more efficient with AI and see this as a net benefit to our industry.

With all of these examples and with many more we have deployed and are working on I hope. It is evident that we see opportunity to grow revenue and be more efficient with AI and see this as a net benefit to our industry.

Speaker 3: Now, let's turn our attention to the Web Help combination that sets the stage for a new chapter in our business offering evolution. This combination is a historic milestone in our industry.

Now, let's turn our attention to the web help combination that sets the stage for a new chapter in our business offering evolution. This combination is a historic milestone in our industry.

Speaker 3: as a combined organization concentric's web help poses to distinct strategic advantages that we believe increases our differentiation and will drive our success as a transformative force in the industry.

As a combined organization Concentrix web help possesses distinct strategic advantages that we believe increases our differentiation and will drive our success as a transformative force in the industry.

Christopher Caldwell: While clients are still signing smaller deals that ramped more slowly, we are pleased with the higher complexity work that we will be performing with these new wins. We also see a strong pipeline of opportunities as a combined concentric web help organization that we would not have been able to pursue prior to the combination. From an operating perspective, we delivered exceptional service with record client attainment scores this quarter. Our focus remains on being the best partner for our client's relationships and winning more opportunities within each account.

Speaker 3: This combination brings new expertise such as know your customer and anti money laundering and payment services for financial clients.

This combination brings new expertise such as know your customer and anti money laundering and payment services for a natural or a financial clients.

Speaker 3: IT services at scale in Amia, deeper domain expertise in a number of our core verticals and helps create a robust footprint spanning 70 plus countries, enabling us to offer tailored solutions on a global scale. We also gain over a thousand new clients that we believe have the ability to spend on services and capabilities that concentric historically has offered.

It services at scale in EMEA deeper domain expertise and a number of our core verticals and helps create a robust footprint spanning 70, plus countries, enabling us to offer tailored solutions on a global.

Scale. We also gained over 1000, new clients that we believe have the ability to spend on services and capabilities. The Concentrix historically has offered.

Christopher Caldwell: The more technology-infused services we provide to our clients, the stickier our relationships become. Notably, we've accelerated our progress in the quarter deploying generative AI solutions both internally and with select clients. From an internal productivity perspective, our AI and Alex-based recruiting platform now supports 8.6 million career site visits and processes 3.3 million applications already this year. It has already allowed our team to scale more cost effectively, and we see additional benefits as we continue the rollout across our enterprise.

Speaker 3: Our commitment to nurturing a supportive and inclusive workforce is further reinforced by the harmonious integration of our cultures, which are globally renowned for their excellence in workplace practices and commitment to ESG.

Our commitment to nurturing a supportive and inclusive workforce is further reinforced by the harmless integration of our cultures, which are globally renowned for their excellence in workplace practices and commitment to ESG.

Speaker 3: We have a clear path to positive financial returns from the combination with Web help, where well-entracted could achieve enhanced revenue growth, profitability, and non-GAP EPS increase in within the first year. We expect double-digit accretion in non-GAP EPS in the second year, further underscoring the financial strength of the combination.

We have a clear path to positive financial returns from the combination with web help we are well on track to achieve enhanced revenue growth profitability and non-GAAP EPS, increasing within the first year, we expect double digit accretion in non-GAAP EPS in the second year further underscoring the financial strength of the combination.

Christopher Caldwell: Our AI-based workforce management solution optimizes concurrent scheduling and peak management for now over 115,000 of our staff where we see better utilization and user experience for the team. This again will have additional benefits as we scale up to the rest of our workforce. Our most widely used proprietary AI smart assist product improves productivity through automation for over 190 team members now to easily access the tools and provide visibility to the information required to the performance of jobs every day easier.

Speaker 3: In addition to these compelling benefits, our integration process is on schedule, and we are confident that we will achieve cost synergies of 120 million by the third year, including 75 million in the first year post-close with substantial progress made already. Since the announcement, we have been able to spend more time with the web help team, which has given us great confidence that this transaction is the right investment.

In addition to these compelling benefits our integration process is on schedule and we are confident that we will achieve cost synergies of $120 million by the third year, including $75 million in the first year post close with substantial progress made already.

Since the announcement, we have been able to spend more time with the web help team, which has given us great confidence that this transaction is the right investment we expect the integration work to be completed within 12 months and I would like to welcome all of our new game changers to the Concentrix web help team.

Speaker 3: We expect the integration work to be completed within 12 months. And I would like to welcome all of our new game changers to the concentric's web help team. I would also like to welcome our two new board members, Olivia Duha, web help co-founder and CEO , who becomes vice chair of our board of directors, and Nicholas Gehsa, a GBL partner and director.

Christopher Caldwell: From the ability for AI to enhance our client services, we use an AI-based quality automation platform to drive insights from 100% of our customer interactions where deployed. Now, across tens of thousands of seats, the platform has reviewed 129 million interactions to date delivering 20 to 30% improvements in audit efficiency and insights into customers. Clients that see high value. Our proprietary learning bot utilizes AI to simulate real-world customer scenarios for over 60,000 team members during training, establishing better speed to proficiency, reducing new higher average processing time, and improving effectiveness by 5% to 10% in the ramp periods.

I would also like to welcome our two new Board members Olivia Olivia do Hot Web help co founder and CEO , who becomes vice chair of our board of directors and Nicholas K saw a JBL partner and director.

Speaker 3: Finally, I would like to thank our exceptional staff for their commitment to execution, our clients for their trust, our talented board of directors for their support and mentorship, and our investors for your continued support. We look forward to an exciting and prosperous year ahead. And now I'll turn the call over to Andre. Andre?

Finally, I would like to thank our exceptional staff for their commitment to execution our clients for their trust our talented board of directors for their support and Mentorship and our investors for your continued support we look forward to an exciting and prosperous year ahead, and now I'll turn the call over to Andre Andre.

Speaker 2: Well, thank you, Kristen. Hello, everyone. We're excited to close our combination with Web help earlier this week. Adding Web help to talented global staff, strengthens our value proposition and solidifies our position as a leading global CX solutions company.

Well, thank you, Chris and Hello, everyone. We're excited to have closed our combination with web held earlier this week, adding warehouse talented global SaaS strengthens our value proposition and solidifies our position as a leading global CX solutions company.

Christopher Caldwell: And our cognitive AI bots developed for client-specific implementations will handle over 900 million customer interactions by the end of this year, delivering significant value for our clients and a higher margin service for us. We are actively investing in additional generative AI solutions to further enhance workforce productivity and improve the quality of interactions with customers. We are on track to deploy our AI tools across nearly 80% of our legacy operations, business by year end, and start wide deployment of the tool within our new clients from our combination with web help shortly.

Speaker 2: Before I provide additional details on the completion of the transaction, our first review are third quarter results. Then I'll conclude with guidance for the fourth quarter, including anticipated contributions from Web.

Before I provide additional details on the completion of the transaction I will first review our third quarter results, then I'll conclude with guidance for the fourth quarter, including anticipated contributions from warehouse.

Speaker 2: In the third quarter, revenue increased the non-gap profit and proof. Reflecting continued strong execution.

In the third quarter revenue increased the non-GAAP profit improved reflecting continued strong execution, both our organic constant currency revenue growth rate and our non-GAAP operating income came in within our guidance ranges.

Speaker 2: Both our organic constant currency revenue growth rate and our non-gap operating income came in within our guidance ranges. With non-gap operating income exceeding...

With non-GAAP operating income exceeding the midpoint of our guidance.

Speaker 2: Additionally, our strong cash flow generation reinforces our confidence in achieving our full year expectation of generating over $500 million in free cash flow, not including contributions from what

Additionally, our strong cash flow generation reinforces our confidence in achieving our full year expectation of generating over $500 million in free cash flow not including contributions from <unk>.

Christopher Caldwell: Turning to AI with our clients, we are also collaborating with some of the world's largest companies to design, build, and run generative AI in few solutions across the services value chain. Working with one of our large technology clients in the key project this quarter, we use generative AI to power 35% efficiency gains and deliver releases 30% faster than traditional methods in their software development life cycle. During the quarter, we also delivered a proof of concept for generative AI knowledge management that builds 3D modeling and augmented reality solutions for a global retail client that couldn't cost effectively be done before.

Speaker 2: The 3.4% increase in reported revenue in the quarter included a 1.7 point positive year-over-year impact from the acquisition of service source in July 2022. There was no meaningful impact from currency fluctuations on reported revenue growth in the quarter.

The three 4% increase in reported revenue in the quarter included a one seven point positive year over year impact from the acquisition of service source in July 2022, there.

There was no meaningful impact from currency fluctuations on reported revenue growth in the quarter.

Speaker 2: on an organic cost and currency revenue basis, revenue grew 1.7%. Reflecting a continuation of themes from the prior quarter. Strong growth in health care, banking, financial services insurance, e-commerce and travel. Offset by continued volume softness with a few large clients in the communications and consumer electronics.

And on an organic constant currency revenue basis revenue grew one 7%, reflecting a continuation of themes from the prior quarter strong growth in healthcare banking financial services insurance E Commerce and travel offset by continued volume softness with a few large clients in the communication.

Christopher Caldwell: Catalyst also launched its first deployment of our new generative AI infused offering any path that we have been developing for close to two years. For our first implementation, we seamlessly transitioned the entire Seacast tech staff of a health care client in less than eight hours, enabling fully automated generative AI experiences for patients and advisors with our generative AI intelligence insights and reporting capabilities. Historically, this would have taken weeks to months to transition.

And consumer electronics industries.

Speaker 2: Revenue increased in each of our four strategic verticals in the quarter. With growth from healthcare clients leading away, up approximately 17% on both and as reported and organic constant currency based.

Revenue increased in each of our four strategic verticals in the quarter with growth from healthcare clients, leading the way up approximately 17% on both an as reported and organic constant currency basis.

Speaker 2: Revenue from retail, travel, and e-commerce clients posted 8% growth as reported, and 7% on a constant currency-organic basis, including double digit growth.

Revenue from retail travel and e-commerce clients posted 8% growth as reported and 7% on a constant currency organic basis, including double digit growth with travel clients.

Christopher Caldwell: This has resulted in substantial savings for our clients and a new revenue opportunity for our business. For another key client, we are now working exclusively to train and test a generative AI tool in advance of it becoming customer facing. Using a combination of automation and humans and our unique knowledge of the customer base and domain knowledge, we are building hundreds of thousands of different subject matter conversations to train the AI AI across multiple categories with a plan to increase the scope to a million conversations in the next six months.

Speaker 2: Revenue from banking financial services and insurance clients grew by 5% on reported basis, and 6% on organic constant current.

Revenue from banking financial services and insurance clients grew by 5% on a reported basis and 6% on an organic constant currency basis.

Speaker 2: Revenue from technology and consumer electronics clients grew 6% as reported, and about 1% on organic constant current.

Revenue from technology, and consumer electronics clients grew 6% as reported and about 1% iron organic constant currency basis.

Speaker 2: Revenue from communications clients decreased by 8% as reported, and 9% are in organic constant current.

Revenue from communications clients decreased by 8% as reported and 9% iron organic constant currency basis.

Speaker 2: Revenue from clients in our other vertical decreased 9% as reported, and about 8% on organic cost and currency basis in the third-

Revenue from clients in our other vertical decreased 9% as reported and about 8% on an organic constant currency basis in the third quarter.

Christopher Caldwell: With all of these examples and with many more we have deployed in our working on, I hope it is evident that we see opportunity to grow revenue and be more efficient with AI and see this as a net benefit to our industry.

Speaker 2: Turning to profitability, nine-dap operating income was $231 million in the third quarter compared with $222 million last year.

Turning to profitability non-GAAP operating income was $231 million in the third quarter compared with $222 million last year.

Christopher Caldwell: Now, let's turn our attention to the web help combination that sets the stage for a new chapter in our business offering evolution. This combination is a historic milestone in our industry. As a combined organization, concentric web help poses us as distinct strategic advantages that we believe increases our differentiation and will drive our success as a transformative force in the industry. This combination brings new expertise such as know your customer and anti-money laundering and payment services for our financial clients, IT services at scale in AMIA, deeper domain expertise in a number of our core verticals, and helps create a robust footprint spanning 70 plus countries, enabling us to offer tailored solutions on a global scale.

Speaker 2: Our non-gap operating margin was 14.1% up 10 basis points from 14.

Our non-GAAP operating margin was 14, 1% up 10 basis points from 14% in the third quarter last year adjust.

Speaker 2: third quarter last year. Adjusted EBITDAI was $269 million, compared with $258 million, and the third quarter of last...

Adjusted EBITDA was $269 million compared with $258 million in the third quarter of last year, our adjusted EBITDA margin of 16, 5% up 10 basis points from 16, 4% in the third quarter last year.

Speaker 2: Our Jeff Zedyva Damarge was 16.5% up 10 basis points from 16.4% in the third quarter-line.

Speaker 2: Third quarter interest expense was $49 million. Up $29 million from the prior year quarter.

Third quarter interest expense was $49 million up $29 million from the prior year quarter.

Speaker 2: included in the increase was approximately $14 million of interest costs related to the web help combination.

Included in the increase was approximately $14 million of interest costs related to the web help combination.

Speaker 2: This included a charge of approximately $11 million in fees associated with our bridge financing for the Web Help Transaction. It also includes approximately $3 million in interest expense on our senior notes that were issued on August 2nd. Net of interest earnings on the invested process.

This included a charge of approximately $11 million in fees associated with our bridge financing for the web help transaction. It also includes approximately $3 million in interest expense on our senior notes that were issued on August 2nd net of interest earnings on the invested proceeds the remainder of the increase in interest expense was due to higher inter.

Christopher Caldwell: We also gain over a thousand new clients that we believe have the ability to spend on services and capabilities that concentric historically has offered. Our commitment to nurturing a supportive and inclusive workforce is further reinforced by the harmonious integration of our cultures, which are globally renowned for their excellence in workplace practices and commitment to ESG. We have a clear path to positive financial returns from the combination with Web help. We are well on track to achieve enhanced revenue growth, profitability, and non-GAP EPS increase within the first year.

Speaker 2: The remainder of the increase in interest expense was due to higher interest rates, as expect.

Just rates as expected.

Speaker 2: Other expenses of approximately $6 million in the third quarter included a $2 million mark-to-market adjustment related to the purchase price currency hedge for the web help transaction. The remainder of this line item in the P&O relates to foreign currency loss.

Other expense of approximately $6 million in the third quarter included a $2 million mark to market adjustment related to the purchase price currency and currency hedge for the web help transaction. The remainder of this line item in the P&L relates to foreign currency losses.

Speaker 2: The non-gap tax rate for the quarter was 26.3%.

The non-GAAP tax rate for the quarter was 26, 3%.

Christopher Caldwell: We expect double-digit accretion in non-GAP EPS in the second year, further underscoring the financial strength of the combination. In addition to these compelling benefits, our integration process is on schedule, and we are confident that we will achieve cost synergies of 120 million by the third year, including 75 million in the first year post-close with substantial progress made already. Since the announcement, we have been able to spend more time with the Web help team, which has given us great confidence that this transaction is the right investment.

Speaker 2: NONGAP net income in the third quarter was $141 million, compared with $154 million last year. The decreased primary reflects higher interest expense and the change in other income expense which more than offset the increase in NONGAP operating.

non-GAAP net income in the third quarter was $141 million compared with $154 million last year. The decrease primarily reflects higher interest expense and the change in other income expense was more which more than.

Offset the increase in non-GAAP operating income.

Speaker 2: earnings per share were $2.71 cents on a non-gap basis. You've paid a $2.95 in the third quarter of last year.

Earnings per share were $2.71 on a non-GAAP basis compared to $2 95 in the third quarter of last year.

Speaker 2: Gap operating results for the third quarter included $40 million of amortization of intangibles, $18 million of expenses related to acquisition related to integration expenses, and $11 million of share-based compensation.

GAAP operating results for the third quarter included $40 million of amortization of intangibles $18 million of expenses related to acquisition related and integration expenses and $11 million of share based compensation expense.

Christopher Caldwell: We expect the integration work to be completed within 12 months, and I would like to welcome all of our new game changers to the Concentrix Web help team.

Christopher Caldwell: I would also like to welcome our two new board members, Olivia Duha, Web help co-founder and CEO, who becomes vice chair of our board of directors, and Nicholas Gehsa, a GBL partner and director. Finally, I would like to thank our exceptional staff for their commitment to execution, our clients for their trust, our talented board of directors for their support and mentorship, and our investors for your continued support.

Speaker 2: Turning to cash flow, our third quarter cash flow from operations totaled $211 million. Capital expenditures were $44 million.

Turning to cash flow, our third quarter cash flow from operations totaled $211 million and capital expenditures were $44 million. This resulted in a record third quarter quarterly free cash flow of $167 million. We continue to expect free cash flow for the full year to exceed $500 million, excluding the cash flow.

Speaker 2: This resulted in record third quarter quarterly free cash flow of 167 million dollars.

Speaker 2: We continue to expect free cashflow for the full year to have seeded 500 million, excluding the cashflow contribution of web help in the fourth quarter and transaction and integration.

Contribution of wet health in the fourth quarter and transaction and integration costs.

Andre Valentine: We look forward to an exciting and prosperous year ahead, and now I'll turn the call over to Andre. Andre? Well, thank you, Kristen.

Speaker 2: During the quarter, we paid a quarterly dividend of 27.5 cents per share. As Chris mentioned, our board has raised our quarterly dividend to 30.5 cents per share to be paid during the fourth quarter. This increased to our quarterly dividend reflects our financial strength, our confidence in the future, and our commitment to discipline capital deployments.

During the quarter, we paid a quarterly dividend of <unk> 27, five cents per share as Chris mentioned, our board has raised our quarterly dividend to <unk> 30, and a quarter cents per share to be paid in during the fourth quarter.

Andre Valentine: Hello, everyone. We're excited to close our combination with Web help earlier this week, adding Web help to talented global staff, strengthens our value proposition, and solidifies our position as a leading global CX Solutions company. Before I provide additional details on the completion of the transaction, I'll first review our third quarter results, then I'll conclude with guidance for the fourth quarter, including anticipated contributions from Web help. In the third quarter, revenue increased the non-gap profit improved, reflecting continued strong execution.

This increase to our quarterly dividend reflects our financial strength, our confidence in the future and our commitment to disciplined capital deployment.

Speaker 2: Share references resumed in the quarter after our proxy statement finally related to the web help transact.

Share repurchases resumed in the quarter after our proxy statement filing related to the web help transaction.

Speaker 2: We repurchased 320,000 shares of our stock for approximately $27 million in the third quarter. Repurchasing that their quarter were made at an average price of approximately $84 per share.

We repurchased 320000 shares of our stock for approximately $27 million in the third quarter repurchases in the third quarter were made at an average price of approximately $84 per share.

Andre Valentine: Both are organic constant currency revenue growth rate and our non-gap operating income came in within our guidance ranges, with non-gap operating income exceeding the midpoint of our guidance. Additionally, our strong cash flow generation reinforces our confidence in achieving our four-year expectation of generating over $500 million in free cash flow, not including contributions from Web help. The 3.4 percent increase in reported revenue in the quarter included a 1.7 point positive year-over-year impact from the acquisition of service source in July 2022.

Speaker 2: at the end of the quarter, we had $312 million remaining on our shared repurchased authors.

At the end of the quarter, we had $312 million remaining on our share repurchase authorization.

Speaker 2: Moving to the balance sheet, at the end of the third quarter, cash and cash equivalents were $2.11 billion. And total debt outstanding was $3.

Moving to the balance sheet at the end of the third quarter cash and cash equivalents were $2 1 billion and total debt outstanding was $397 billion net debt was $186 billion at the end of the third quarter, a decrease of $117 million from the end of the second quarter.

Speaker 2: net debt was $1.86 billion at the end of the third quarter, a decrease of $170 million from the end of the second quarter, and a decrease of $280 million since the beginning of the year.

And a decrease of $218 million since the beginning of the year.

Andre Valentine: There was no meaningful impact from currency fluctuations on reported revenue growth in the quarter. On an organic constant currency revenue basis, revenue grew 1.7 percent, reflecting a continuation of themes from the prior quarter. Strong growth in healthcare, banking, financial services insurance, e-commerce, and travel, offset by continued volume softness with a few large clients in the communications and consumer electronics industries. Revenue increased in each of our four strategic verticals in the quarter, with growth from healthcare clients leading the way up approximately 17 percent on both and as reported, and organic constant currency Revenue from retail, travel, and e-commerce clients posted 8% growth as reported and 7% on a constant currency organic basis, including double digit growth with travel clients.

Speaker 2: At the end of the third quarter, the elevated cash level reflects funds on hand to complete the web help transactions.

At the end of the third quarter, the elevated cash level reflects funds on hand to complete the web help transaction.

Speaker 2: The debt balance at the end of the quarter includes 2.15 billion of senior unsecured notes issued to partially fund the Web Help Transaction.

The balance the debt balance at the end of the quarter includes $2. One 5 billion of senior unsecured notes issued to partially fund the web help transaction and one 185 billion outstanding on our term loan.

Speaker 2: $1.85 billion outstanding on our term.

Speaker 2: our 1.04 billion dollar revolving credit facility was undrawn at the end of the quarter and there were no barring outstanding on our five hundred million dollar accounts receivable securitization

Our 1.04 billion revolving credit facility was undrawn at the end of the quarter and there were no borrowings outstanding on our $500 million accounts receivable securitization facility.

Speaker 2: the end of the third quarter, net leverage was 1.7 times on a trailing four quarters pro forma base.

At the end of the third quarter net leverage was one seven times on a trailing four quarters pro forma basis.

Speaker 2: On Monday, we executed on the closing of the Web Health company.

On Monday, we executed on the closing of the web help combination there.

Speaker 2: To complete the combination, we paid approximately $525 million to Web Help Shareholders, paid off Web Help debt of approximately $1.9 billion, issued 14.9 million shares to Web Help Shareholders, and incurred a 700 million euro two-year note payable to Web Help Shareholders bearing interest at 2%.

To complete the combination that we paid approximately $525 million to web help shareholders paid off wed help debt of approximately $1 9 billion.

Andre Valentine: Revenue from banking, financial services, and insurance clients grew by 5% on reported basis and 6% on organic constant currency basis. Revenue from technology and consumer electronics clients grew 6% as reported and about 1% on organic constant currency basis. Revenue from communications clients decreased by 8% as reported and 9% on organic constant currency basis. Revenue from clients in our other vertical decreased 9% as reported and about 8% on organic constant currency basis in the third quarter.

Issued $14 9 million shares to help shareholders and incurred a $700 million Euro two year note payable to web help shareholders bearing interest at 2%.

Speaker 2: After the closing, we had cash and cash equivalents coving approximately $440 million and gross debt of approximately $5.3 billion.

After the closing we had cash and cash equivalents totaling approximately $440 million and gross debt of approximately $5 3 billion.

Speaker 2: net debt applying closing was $4.85 billion, which represents net leverage of approximately 3.2 times on a pro forma adjusted EBITDA.

Net debt upon closing was $4 85 billion.

Andre Valentine: Turning to profitability, non-gap operating income was $231 million in the quarter compared with $222 million last year. Our non-gap operating margin was 14.1% up 10 basis points from 14% in the third quarter last year. Adjusted EBITDAO was $269 million dollars compared with $258 million in the third quarter of last year. Our Adjusted EBITDAO margin was 16.5% up 10 basis points from 16.4% in the third quarter last year. Third quarter interest expense was $49 million dollars up 29 million dollars from the prior year quarter.

Which represents net leverage of approximately three two times on a pro forma adjusted EBITDA basis.

Speaker 2: The primary components of our gross debt on the balance sheet post closing were 2.15 billion dollars in senior notes 2.1

The primary components of our gross debt on the balance sheet post closing we're <unk>.

<unk>, one 5 billion in senior notes.

One $4 billion in term loan borrowings.

Speaker 2: approximately 750 million in notes payable to web help shareholders and 250 million in borrowings outstanding under our Council's seatable securitization our revolving credit facility remains

Proximately $750 million in notes payable to web help shareholders and $215 million in borrowings outstanding under our accounts receivable securitization.

Our revolving credit facility remained undrawn.

Speaker 2: The issuance of shares to web help shareholders increase our outstanding share count to approximately 66.6 million shares.

The issuance of shares to web help shareholders increased our outstanding share count to approximately $66 6 million shares.

Andre Valentine: Included in the increase was approximately $40 million of interest costs related to the web health combination. This included a charge of approximately $11 million in fees associated with our bridge financing for the web health transaction. It also includes approximately $3 million in interest expense on our senior notes that were issued on August 2nd net of interest earnings on the invested proceeds. The remainder of the increase in interest expense was due to higher interest rates as expected.

Speaker 2: Regarding the 2.15 billion of senior notes, on the data combination close, we entered into cross currency swap arrangements for a total no-show amount of $500 million of the...

Regarding the 215 billion of senior notes on the data combination close we entered into cross currency swap arrangements for total notional amount of $500 million of the notes.

Speaker 2: The arrangements effectively convert 250 million each of the 2026 and 2028 notes in the synthetic Euro-based debt at lower prevailing interest.

The arrangements effectively convert $250 million each of the 2026, and 2028 notes and the synthetic euro base debt at lower prevailing interest rates and.

Andre Valentine: Other expense of approximately $6 million in the third quarter included a $2 million mark-to-market adjustment related to the purchase price currency hedge for the web health transaction. The remainder of this line item in the P&O relates to four and currency losses. The non-gap tax rate for the quarter was 26.3%. Non-gap net income in the third quarter was $141 million dollars compared with $154 million last year. The decrease primarily reflects higher interest expense and the change in other income expense was more than offset the increase in non-gap operating income.

Speaker 2: In addition to aligning the currency of a portion of our interest payments to the organization's Euro-denominated cash.

In addition to aligning the currency of a portion of our interest payments to the organizations Euro denominated cash flows. The swaps also reduced the weighted average interest rate of the $2.

Speaker 2: The swap also reduced the weighted average interest rate of the 2.15 billion nodes from approximately 6.70% to approximately 6.366.

One 5 billion notes from approximately $6 seven zero percent to approximately 636%.

Speaker 2: As we said when we announced the Web Help Transaction, the combination of our strong free cash flow generation and adjusted EBITDA growth gives us a clear path to reducing leverage. And we're committed to reducing our net leverage to about two times adjusted EBITDA within two years after the transaction.

As we said when we announced the <unk> transaction the combination of our strong free cash flow generation and adjusted EBITDA growth gives us a clear path to reducing leverage and we're committed to reducing our net leverage to about two times adjusted EBITDA within two years after the transaction close.

Speaker 2: Regarding our capital allocation priorities, our focus is on organic growth, the successful integration of web help, realizing the planned synergies and repaying debt. We're committed to investment grade principles. We will prioritize paying down debt and reducing our net leverage while continuing our dividend and discipline share repurchases to offset the delusion of X.

Regarding our capital allocation priorities, our focus is on organic growth the successful integration of warehouse, realizing the planned synergies and repaying debt.

Andre Valentine: Earnings per share were $2.71 cents on a non-gap basis compared to $2.95 in the third quarter of last year. Gap operating results for the third quarter included $40 million dollars of amortization of intangibles. $18 million dollars of expenses related to acquisition related to integration expenses and $11 million dollars of share-based compensation expense. Turning to cash flow, our third quarter cash flow from operations totaled $211 million dollars and capital expenditures were $44 million dollars.

We're committed to investment grade principles, we will prioritize paying down debt and reducing our net leverage while continuing our dividend and disciplined share repurchases to offset the dilution of equity grants.

Speaker 2: Now I'll turn my attention to the business outlook for the fourth quarter, including anticipated contributions from web.

Now I'll turn my attention to the business outlook for the fourth quarter, including anticipated contributions from warehouse.

Speaker 2: The Web Help Contribution to Fourth Quarter Guidance includes forecasted financial performance for a period of slightly more than two.

The wet help contribution to fourth quarter guidance includes forecasted financial performance for a period of slightly more than two months.

Andre Valentine: This resulted in a record third quarter quarterly free cash flow of $167 million dollars. We continued to expect free cash flow for the full year to have steed $500 million excluding the cash flow contribution of web health in the fourth quarter and transaction and integration. During the quarter, we paid a quarterly dividend of 27.5 cents per share. As Chris mentioned, our board has raised our quarterly dividend to 30.5 cents per share to be paid during the fourth quarter.

Speaker 2: For the fourth quarter, we now expect reported revenue to be in a range of 2.19 billion to 2.215 billion dollars based on current exchange.

For the fourth quarter, we now expect reported revenue to be in a range of $2. One 9 billion to two to one $5 billion based on current exchange rates.

Speaker 2: Our fourth quarter expectations reflect approximately 2 to 3% of pro-former constant currency growth for the combined organization if the combination had occurred at the beginning of the fourth quarter of 2022. If you didn't...

Our fourth quarter expectations reflect approximately 2% to 3% of pro forma constant currency growth for the combined organization. If the combination had occurred at the beginning of the fourth quarter of 2022.

Andre Valentine: This increased to our quarterly dividend reflects our financial strength, our confidence in the future and our commitment to discipline capital deployment. Share repurchases resumed in the quarter after our proxy statement finally related to the web health transaction. We repurchased 320,000 shares of our stock for approximately $27 million in the third quarter. Repurchases in the third quarter were made at an average price of approximately $84 per share. At the end of the quarter, we had $312 million remaining on our share repurchased authorization.

Excluding the effect of the warehouse combination or.

Speaker 2: Our expected constant currency growth in the fourth quarter would be consistent with the prior guidance for the fully.

Our expected constant currency growth in the fourth quarter will be consistent with the prior guidance for the full year.

Speaker 2: Our profitability expectations for the fourth quarter include non-GAAP ocuring income and a range of $330 million to $340 million.

Our profitability expectations for the fourth quarter include non-GAAP operating income in a range of $330 million to $340 million at the midpoint of our guidance. This equates to a non-GAAP operating income margin of approximately 15, 2% an increase of 10 basis points over the prior year.

Speaker 2: The midpoint of our guidance equates to a 9-gap operating income margin of approximately 15.2 percent, an increase of 10 basis points over the prior use.

Speaker 2: Good in the effect of the web help combination, our expected non-dap operating income in the fourth quarter would be consistent with the prior guidance for the full year 20.

Excluding the effect of the web help combination our expected non-GAAP operating income in the fourth quarter will be consistent with the prior guidance for the full year 2023.

Andre Valentine: Moving to the balance sheet, at the end of the third quarter, cash and cash equivalents were $2.11 billion and total debt outstanding was $3.97 billion. Net debt was $1.86 billion at the end of the third quarter, a decrease of $170 million from the end of the second quarter, and a decrease of $280 million since the beginning of the year. At the end of the third quarter, the elevated cash level reflects funds on hand to complete the web health transaction.

Speaker 2: We expect net interest expense in the fourth quarter to be approximately $72 million. With an effective tax rate of 26%, an awaited average deluded share count were approximately 62 million shares.

We expect net interest expense in the fourth quarter to be approximately $72 million with an effective tax rate of 26% and a weighted average diluted share count of approximately 62 million shares.

Speaker 2: Note that the average limited share count for the fourth quarter is less than the 66.6 million outstanding shares posed close as a result of the mid-quarter timing of

Note that the average diluted share count for the fourth quarter is less than the $66 6 million outstanding shares post close as a result of the mid quarter timing of the close.

Speaker 2: Accordingly, we expect nine GAP EPS for the fourth quarter to be in a range of $3.03 per share to $3.15.

Accordingly, we expect non-GAAP EPS for the fourth quarter to be in a range of $3 <unk> per share to $3 15 per share. This expectation for non-GAAP EPS assumes no impact from other income and expense due to the unpredictability of future foreign currency movements.

Andre Valentine: The debt balance at the end of the quarter includes $2.15 billion of senior unsecured notes issued to partially fund the web health transaction and $1.85 billion outstanding our term loan. Our $1.04 billion revolving credit facility was undrawn at the end of the quarter and there were no borrowings outstanding on our $500 million accounts receivable securization facility. At the end of the third quarter, net leverage was 1.7 times on a training for quarters pro-forma basis.

Speaker 2: This expectation for non-GAPEPS assumes no impact from other income and expense. Do the unpredictability of future foreign currency moves.

Speaker 2: continue to expect the business to generate robust cash flows with free cash flow for the combined organization to be in the range of 200 to 225 million excluding any transaction and integration costs in the fourth quarter.

We continue to expect the business to generate robust cash flows with free cash flow for the combined organization to be in the range of $200 million to $225 million, excluding any transaction and integration costs in the fourth quarter.

Speaker 2: Our business outlook does not include transaction integration costs associated with the Web Help combination or any future acquisition.

Our business outlook does not include transaction and integration costs associated with the web help combination or any future acquisitions.

Andre Valentine: On Monday, we executed on the closing of the web health combination. To complete the combination, we paid approximately $525 million to web health shareholders, paid off web health debt of approximately $1.9 billion, issued $14.9 million shares to web health shareholders, and incurred a $700 million euro to a year note payable to web health shareholders bearing interest at 2%. After the closing, we had cash and cash equivalents coding approximately $440 million, and gross debt of approximately $5.3 billion.

Speaker 2: Also not included in the guidance or impacts from future foreign currency flex.

Not included in the guidance are impacts from future foreign currency fluctuations.

Speaker 2: We continue to expect the web help operations to generate approximately 3 billion of revenue and approximately 500 million of adjusted EBITDA for the full year 2023. With a combined organization yielding nearly 9.6 billion in revenue and nearly 1.6 billion in combined EBITDA on a pro-former basis for the full fiscal year 2020.

We continue to expect the web help operations to generate approximately 3 billion of revenue and approximately $500 million of adjusted EBITDA for the full year 2023, with a combined organization year, yielding nearly $9 6 billion in revenue and nearly $1 6 billion in combined EBITDA on a pro forma basis for the full fiscal year 2002.

Speaker 2: We expect Arne's per share accretion of mid to high single digits in the first full year after close and double digit accretion in the second.

Three.

We expect earnings per share accretion of mid to high single digits in the first full year after close and double digit appreciation accretion in the second year.

Andre Valentine: Net debt applying closing was $4.85 billion, which represents net leverage of approximately 3.2 times on a pro-forma adjusted EBITDA basis. The primary components of our gross debt on the balance sheet post-closing were $2.15 billion in senior notes, $2.14 billion in term loan borrowings, approximately $750 million in notes payable to web health shareholders, and $215 million in borrowings outstanding under our accounts receivable securization. Our revolving credit facility remained undrawn. The issuance of shares to web health shareholders increased our outstanding share count to approximately $66.6 million shares.

Speaker 2: We also expect to realize $75 million in synergies in the first year after closing, growing to 120 million.

We also expect to realize $75 million in synergies in the first year after closing growing to $120 million in synergies in year. Three we plan to provide guidance for 2024 on our fourth quarter results call.

Speaker 2: plan to provide guidance for 2024. Our fourth quarter results are the call.

Speaker 2: In closing, the Web help combination is showing two leading CX providers into a global platform for growth and value creation, bringing clients from growing markets, further diversifying our marquee client list, and significantly increasing our presence in Europe , Latin America and Africa.

In closing the web help combination has joined two leading CX providers into a global platform for growth and value creation, bringing clients from growing markets further diversifying our marquee client list and significantly increasing our presence in Europe , Latin America and Africa.

Speaker 2: Our range and global reach of high value services and digital capabilities have been expanded, enhancing support for clients that both companies couldn't adequately serve in

Our range and global reach of high value services and digital capabilities have been expanded enhancing support for clients that both companies couldnt adequately serve independently.

Speaker 2: We have a strong track record of success integrating prior combinations, which will make the combination and the integration more seem.

We have a strong track record of success integrating prior combinations, which will make the combination and integration more seamless and we believe this highly complementary.

Andre Valentine: Regarding the 2.15 billion of senior notes, on the day the combination closed, we entered into cross-currency swap arrangements for a total notional amount of $500 million of the notes. The arrangements effectively convert $250 million each of the 2026 and 2028 notes in the synthetic Euro-based debt at lower prevailing interest rates. In addition to aligning the currency of a portion of our interest payments to the organization's Euro-denominated cash flows, the swap also reduced the weighted average interest rate of the 2.15 billion notes from approximately 6.70% to approximately 6.36%.

Speaker 2: We believe this highly complimentary union creates a unique customer engagement offering that will keep our business resilient through business.

Union creates a unique customer engagement offering that will keep our business resilient through business cycles. We're excited about the combination of warehouse and we look forward to the growth in value. It will create in the future at this point, let Heath. Please open the line for questions.

Speaker 2: We're excited about the combination of web health. We look forward to the growth and value it will create in the future. At this point, let's ease.

Speaker 1: Yes, sir, as a reminder, to ask a question, you will need to press star 11 on your telephone. Again, that star 11 on your telephone to ask a question. To remove yourself from the queue, you may press star 11 again. Please stand by while we compile the Q&A Ross.

Yes, Sir as a reminder to ask a question you will need to press star one on your telephone again Thats Star one on your telephone is ask a question to remove yourself from the queue. You May press Star one again, please standby, while we compile the Q&A roster.

Speaker 1: Again, that Star 11 on your telephones ask a question.

Andre Valentine: As we said, when we announced the Web Help Transaction, the combination of our strong free cash flow generation and adjusted EBITDA growth gives us a clear path to reducing leverage and we're committed to reducing our net leverage to about two times adjusted EBITDA within two years after the transaction closed. Regarding our capital allocation priorities, our focus is on organic growth, the successful integration of Web Help, realizing the plan synergies and repaying debt. We're committed to investment-grade principles. We will prioritize paying down debt and reducing our net leverage while continuing our dividend and discipline share repurchases to offset the deletion of equity grants.

Again, Thats Star one one on your telephone to ask a question.

Our first question.

Yeah.

Speaker 1: comes from the line of Rupert Blue, Bada Karia, a Bank of America. Hi.

Comes from the line of <unk> <unk> of Bank of America.

Hi, Thanks for taking my questions.

Speaker 4: Andre, if you can, I was wondering if you can kind of simplify what the contribution is from Web help for fourth quarter revenues operating margin and EBITDA. You gave a lot of details, but I'm not sure I got all of that. So can you please specify how much is the revenue contribution operating income contribution?

Andre if you can I was wondering if you can kind of simplified what the contribution is from web help for fourth quarter revenues operating margin.

And in EBITDA.

You gave a lot of details, but I am not sure I got all of that so can you. Please specify how much is the revenue contribution operating income contribution and what is the core business doing in the fourth quarter.

Andre Valentine: Now, I'll turn my attention to the business outlook for the fourth quarter, including anticipated contributions from Web Help. The Web Help contribution to fourth quarter guidance includes forecasted financial performance for a period of slightly more than two months. For the fourth quarter, we now expect reported revenue to be in a range of 2.19 billion to 2.215 billion dollars based on current exchange rates. Our fourth quarter expectations reflect approximately two to three percent of pro-former constant currency growth for the combined organization if the combination had occurred at the beginning of the fourth quarter of 2022.

Speaker 2: Yeah, so I'm happy to do that, Ruple. So from a revenue perspective, the legacy concentric operations pre-web help are very much in line with the prior guidance. So the prior guidance for the full year, Ruple was to grow two to three percent.

Yes, so happy to do that so for.

I'll start with revenue so from a revenue perspective.

The legacy.

Concentrix operations pre pre web health are very much in line with the prior guidance. So the prior guidance for the full year <unk> was to grow 2% to 3%.

Speaker 2: for the full year. And so that will be the contribution from the concentric operations will be in line with that guidance. So that kind of covers that. Web help certainly a creative to the overall growth rate as we expected. And it will be here in the fourth quarter. So that's the...

For the full year, and so that will be the contribution from the Concentrix operations will be in line with that guidance. So.

Is that kind of covers that web help certainly accretive to the overall growth rate as we expected.

Andre Valentine: If soot in the effect of the Web Help combination, our expected constant currency growth in the fourth quarter would be consistent with the prior guidance for the full year. Our profitability expectations for the fourth quarter include non-gap operating income and a range of 330 million dollars to 340 million dollars. At the midpoint of our guidance, this equates to a non-gap operating income margin of approximately 15.2 percent, an increase of 10 basis points over the prior year.

And it will be here in the fourth quarter.

So.

That's that from a margin perspective.

Speaker 2: really, you know, if you go back to when we announced the transaction, the margin profiles of the two businesses were very, very close, both from an EBITDA perspective and a non-GAPOI perspective. And so, included in the guidance, you can pretty much, you know, at the midpoint, that 15.2% non-GAPOI margin, you can pretty much apply that to both sides. Depreciation is a little bit, we talked about this in the past for Web help a little bit higher as to percentage of revenue. So, you might see.

If you go back to when we announced the transaction the margin profiles of the two businesses were very very close both from an EBITDA perspective, and a non-GAAP NOI perspective, and so included in the guidance that you can pretty much at the midpoint that 15, 2% non-GAAP op margin you can pretty much apply that to both sides.

Andre Valentine: Excluding the effect of the Web Help combination, our expected non-gap operating income in the fourth quarter would be consistent with the prior guidance for the full year 2023. We expect net interest expense in the fourth quarter to be approximately 72 million dollars with an effective tax rate of 26 percent and a weighted average deluded share count were approximately 62 million shares. Note that the average deluded share count for the fourth quarter is less than the 66.6 million outstanding shares posed close as a result of the midquarter timing of the close.

Depreciation is a little bit we've talked about this in the past four for wet help a little bit higher as a percentage of revenue so.

You might see.

Speaker 2: you know, 10, 20 basis points or so, higher, adjusted EBITDA margin coming from the web help side. But again, a very complimentary from a margin perspective.

10 to 20 basis points or so higher adjusted EBITDA margin coming from the web help side, but again very complementary from a margin perspective.

Speaker 2: and then expect significant margin improvement as synergies start to roll in in earnest as we move into 2020.

In Q4, and I expect significant margin improvement as the synergies start to roll in in earnest as we move into 2024.

Speaker 4: And again, just to clarify, I mean, based on what you just said, would that imply like about 500 million on the revenue contribution from web help?

And again just to clarify I mean based on what you just said would that imply like about $500 million on the revenue contribution from web hub and in fiscal <unk> and then can you talk about the below the line items like below operating income can you remind us what what the interest expense is going to be in the fourth quarter as well.

Andre Valentine: Accordingly, we expect non-gap EPS for the fourth quarter to be in a range of three dollars and three cents per share to three dollars and 15 cents, for Share. This expectation for nine-gap EPS assumes no impact from other income and expense, do the unpredictability of future foreign currency movements. We continue to expect the business to generate robust cash flows, but free cash flow for the combined organization to be in the range of 200 to 225 million, excluding any transaction and integration costs in the fourth quarter.

Speaker 4: And then can you talk about the below the line items like below of rating

Speaker 4: Can you remind us what the interest expense is going to be in the fourth quarter as well as are there any other expenses? I think you said there was also integration costs. What is the estimate for that for the.

Are there any other expenses I think you said there was also integration.

Costs, what is the estimate for that for the fourth quarter.

Speaker 2: Yeah, so the integration costs in a quarter, are a little hard to give an exact estimate on. So overall, the integration costs, what we've said about those, is they would be one for one, matching the synergy number. So $120 million total in integration costs, somewhat front loaded.

Yes so.

Integration costs in a quarter.

Andre Valentine: Our business outlook does not include transaction and integration costs associated with the web health combination or any future acquisitions. Also, not included in the guidance or impacts from future foreign currency fluctuations. We continue to expect the web health operations to generate approximately 3 billion of revenue and approximately 500 million of adjusted EBITDA for the full year 2023, with the combined organization yielding nearly 9.6 billion in revenue and nearly 1.6 billion in combined EBITDA on a pro-forma basis for the full fiscal year 2023.

A little hard to give an exact estimate on so overall the integration costs, what we've said about those they will be one for one.

From it.

Matching the synergy number so it's about $120 million total and integration costs somewhat front loaded.

Speaker 2: with roughly 80 million or so in the first year, I believe, and 40 million in a second. So think of that 80 million, think of what would that equate to in two months and you're probably in line.

With.

Roughly 80 million or so in the first year, I believe and $40 million in the second so think of that $80 million.

Think of what would that equate to in two in two months and Youre probably in line there.

Speaker 2: The other part of your question, I missed it. Oh, the revenue contribution. I think you're a little low.

Andre Valentine: We expect earnings per share accretion of mid to high single digits in the first full year after close and double digit accretion in the second year. We also expect to realize $75 million in synergies in the first year after closing, growing to 120 million in synergies in year three.

The other part of your question I missed it.

The revenue contribution I think youre a little low.

Speaker 2: at 500 million, the contribution for web help is higher.

$500 million.

The contribution for web help is higher than that okay.

Speaker 4: And maybe for my last one, maybe a last one to Chris. So you talked about working on some AI, Generative AI projects. So Chris, when we think about this, I mean, based on the experience you have now, clients want to understand the impact of Generative AI. You think, you know, I mean, in the past, you said like 10 to 15% of volumes can get impact.

Okay, and maybe for my last one maybe I'll ask one to Chris. So you talked about working on some AI generated AI projects. So Chris when we think about this I mean based on the experience you have now.

Andre Valentine: We plan to provide guidance for 2024 our fourth quarter results to the call. In closing, the web health combination is showing two leading CX providers into a global platform for growth and value creation, bringing in clients from growing markets, further diversifying our marquee client list, and significantly increasing our presence in Europe, Latin America, and Africa. Our range and global reach of high value services and digital capabilities have been expanded, enhancing support for clients that both companies couldn't adequately serve independently.

Clients wanted to understand the impact of generate of AI.

I mean in the past you said like 10% to 15% of volumes can get impacted I mean, how has your thoughts changed if at all now that you are doing more of these projects and do you think that impact varies by end market use case.

Speaker 4: I mean, how has your thought changed if at all, now that you're doing more of these projects? And do you think that impact varies by end market, use case, and how should we think about that? I mean, in any way to quantify this.

And how should we think about that.

Any way to quantify this at this point in the cycle. Thank you.

Speaker 3: I, I root loop. So a couple of different points there. I think when we talk about 10 to 15% of transactions can be automated. That's what we're doing on a yearly basis, regardless of generative AI or RPA or anything else is coming along with it. And what we've talked about is that generative AI can probably increase that by a little bit, but not, you know, dramatically more than that from what we're seeing as we deploy these practices.

So a couple of different points there I think when we talk about 10% to 15% of transactions can be automated that's what we're doing on a yearly basis, regardless of generative AI or RPI or anything else thats coming along with it and what we've talked about is degenerative AI can probably increase that by a little bit but not.

Andre Valentine: We have a strong track record of success, integrating prior combinations, which will make the combination and the integration more seamless. And we believe this highly complimentary union creates a unique customer engagement offering that will keep our business resilient through business cycles. We're excited about the combination of web health. We look forward to the growth and value it will create in the future.

Dramatically more than that from what we're seeing as we deploy these practices whats offsetting that is the new revenue streams that we're seeing by deploying these new technologies, both from a design implementation and running the new technologies and Curating. The content that goes along with it and as we kind of talked in some of the prepared remarks, even net new.

Speaker 3: What's offsetting that is the new revenue streams that we're seeing by deploying these new technologies, both from design implementation and running that the new technologies and curating the content that goes along with it. And as we kind of talked in some of the prepared remarks, even net new areas that we're deploying our own platforms where we're getting net new revenue flows that are coming in for that. So that clearly is what we're focused on of offsetting any revenue headwinds, as well as taking more share within the client.

Unknown Executive: At this point, with ease, please open the line for questions. Yes, sir, as a reminder, to ask a question, you will need to press star 11 on your telephone. Again, that star 11 on your telephone to ask a question.

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Areas that we are deploying our own platforms, where we're getting net new revenue flows that are coming in for that so that clearly is what we're focused on offsetting any revenue headwinds as well as taking more share within the clients.

Speaker 3: I think what we're seeing right at the moment is that we're able to deploy generative AI faster than some of our clients can actually deploy it. And so we're seeing that the benefits in our operating cost structure and scalability that we called out a number that are starting to get to scale. And hopefully we'll see additional benefits from those as we get them to across the entire enterprise, including the new web help combination, which I think offsets any kind of cost mitigation that we might have from any impact from a revenue perspective that's coming in from automation, if that makes sense.

What we're seeing right at the moment is that we're able to deploy generative AI faster than some of our clients can actually deploy it and so we're seeing the benefits in our operating cost structure and scalability that we called out a number that are starting to get to scale and hopefully we will see additional benefits from those as we get them to across the entire enterprise, including the new.

Ruplu Bhattacharya: Our first question comes from the line of Ruplu, Batikaria, a bank of America. Hi, thanks for taking my questions. Andrei, if you can, I was wondering if you can kind of simplify what the contribution is from web help for fourth quarter revenues operating margin and EBITDA. You gave a lot of details, but I'm not sure I got all of that. So can you please specify how much is the revenue contribution operating in and Come Contribution, and what is the core business doing in the fourth quarter?

Web help combination.

I think offsets any kind of.

Cost mitigation that we might have from any impact from a revenue perspective, that's coming in from from automation if that makes sense.

Thanks for all the details appreciate it.

Speaker 3: No problem. Thank you.

No problem. Thank you.

Speaker 1: Thank you again to ask a question. Please press star one one on your telephone. Again, that star one one on your telephone to ask a question.

Thank you again to ask a question. Please press star one one on your telephone again Thats Star one one on your telephone to ask a question.

Ruplu Bhattacharya: Yeah, so I'm happy to do that, Ruplu. So from a revenue perspective, the legacy concentric operations pre-web help are very much in line with the prior guidance. So the prior guidance for the for the full year, Ruplu was to grow two to three percent for the full year. And so that will be the contribution from the concentric operations will be in line with that guidance. So that kind of covers that. Web help certainly accretive to the overall growth rate as we expected.

Our next question.

Speaker 1: comes from the line of Oliver Davies of Redburn at Lenton.

It comes from the line of Oliver Davies of Redburn Atlantic.

Speaker 5: Yeah, hi guys. I guess a couple of questions. Just firstly, in terms of, you know, you kind of held the revenue growth guidance for the concentric legacy business. So can you just talk about what you're seeing in terms of underlying volumes? And you climb decision, I guess, you know, looks like healthcare kind of accelerated in the quarter where it's, you know, most of the other sectors were pretty similar to the last quarter. And I guess following on from that, you know, you know, you said, a client's still looking to offshore work hospital or is anything changed on that front?

Yeah, Hi, guys I guess, a couple of questions. Just firstly incentives you kind of how the revenue growth guidance for the consensus legacy business. So can you just talk about what youre seeing in terms of underlying volumes.

Our new cloud decision I guess, it looks like healthcare kind of accelerated in the quarter horizon.

I see other sectors were pretty similar to the last quarter and I guess following on not.

Ruplu Bhattacharya: And it will be here in the fourth quarter. So that's that. From a margin perspective, really, you know, if you go back to when we announced the transaction, the margin profiles of the two businesses were very, very close, both from an EBITDA perspective and a non-GAPOI perspective. And so included in the guidance, you can pretty much, you know, at the midpoint, that 15.2% non-GAPOI margin, you can pretty much apply that to both sides.

It's still looking to offshore workhorse of or has anything changed on that front.

Speaker 3: Hi Oliver, so to answer your first question, what we're seeing is kind of continued consumer.

Hi, Oliver so to.

So your first question, what we're seeing is kind of is.

Continued consumer.

Speaker 3: I'll call it budgeting for new consumer electronic devices, subscription spending, other things that are somewhat discretionary. So we continue to see those volumes depressed across some of our larger clients. But the volume is now becoming more steadily depressed if that makes sense. It's more stable versus what we saw at the beginning of the year where it tends to fluctuate.

I'll call it budgeting for new consumer electronic devices subscription spending other things that are somewhat discretionary. So we continue to see those volumes depressed across some of our larger clients.

Ruplu Bhattacharya: Depreciation is a little bit. We talked about this in the past for Web help a little bit higher as a percentage of revenue. So you might see, you know, 10, 20 basis points or so higher adjusted EBITDA margin coming from the Web help side. But again, very complimentary from a margin perspective in Q4 and then expect significant margin improvement as synergies start to roll in in earnest as we move into 2024.

But the volume is now becoming more steadily depressed if that makes sense, it's more stable versus what we saw at the beginning of the year, where it tends to fluctuate.

Speaker 3: We are seeing growth in the strategic verticals that we've called out, primarily because of net new wins and net new services we're putting into those verticals, such as the healthcare vertical banking financial services, and even travel we're doing quite well at. And we still see travel, despite sort of my comments about consumers cutting back in some areas, being quite robust into the future from a volume expectation perspective. From just an overall offshoring, near-shoring comment.

We are seeing growth in our strategic verticals that we've called out primarily because of net new wins and net new services, we're putting into those those vertical such as the health care vertical banking financial services and even travel we're doing quite well and we still see travel despite sort of my comments about consumers coming back in some areas being quite robust.

Into into the future from a from a volume expectation perspective.

Ruplu Bhattacharya: And again, just to clarify, I mean, based on what you just said, would that imply like about 500 million on the revenue contribution from Web help in fiscal 4Q. And then can you talk about the below the line items like below of rating income. Can you remind us what what the interest expense is going to be in the fourth quarter as well as are there any other expenses? I think you said there was also integration costs.

From just an overall offshoring near shoring comment as we've talked about before clients for the most part are very focused on managing their cost structure and so pretty much. The majority of all new transactions and deals and ramps of existing clients are tending to be done at the most cost effective short environment, whether that be near.

Speaker 3: As we've talked about before, clients for the most part are very focused on managing their cost structure. And so pretty much the majority of all new transactions and deals and ramps of existing clients.

Speaker 3: Are tending to be done at the most cost effective shore environment, whether that be near shore or offshore? Very few starts, in fact, very, very, very, very few starts, are starting out on shore at a higher cost structure. It's just not in client's budgets right at the moment.

Sure offshore very few starts in fact very very very very few starts are starting out onshore at a higher cost structure.

Ruplu Bhattacharya: What is the estimate for that for the fourth quarter? Yeah, so integration costs in a quarter are a little hard to give an exact estimate on. So overall, the integration costs, what we've said about those is they would be one for one from matching the synergy number. So $120 million total and integration costs somewhat front loaded, you know, with roughly 80 million or so in the first year, I believe in 40 million in a second.

It's just not in clients' budgets right at the moment.

Speaker 5: Okay, great, thanks. And then maybe one for Ande, it's on the free cash flow just, it looks to be driven by working capital, so you could use comment on the reason for that in terms of free cash flow.

Okay, great. Thanks.

And then maybe one on the just on the free cash side, just it looks to be driven by working capital. So could you just comment on the.

The reasons for that.

In terms of free cash flow.

Ruplu Bhattacharya: So think of that 80 million, you know, think of what that equate to in two months and you're probably in line there. The other part of your question, I missed it. Oh, the revenue contribution. I think you're a little low at 500 million. The contribution for Web help is higher than that.

Hey, Andre Youre not coming through.

Okay.

Speaker 2: Sorry about that. We muted ourselves for a second. So Ali.

Sorry about that.

Metered ourselves for a second.

So Ali.

Speaker 2: You're right. The improvement in pre-cash flow is largely coming from working capital improvements. And that's really just a focus on the blocking and tackling of getting bills out on time and collected on time, which was drove roughly a two-day improvement from the prior quarter in our day sales outstanding. So it's really just...

You're right the improvement in free cash flow is is largely coming from working capital.

Improvements and Thats really just a focus on the blocking and tackling of getting bills out on time and collected on time, which drove roughly a two day improvement.

Ruplu Bhattacharya: Okay, and maybe for my last one, maybe a last one to Chris. So you talked about working on some AI generative AI projects. So Chris, when we think about this, I mean, based on the experience you have now, you know, clients want to understand the impact of generative AI. You think, you know, I mean, in the past, you said like 10 to 15% of volumes can get impacted. I mean, how has your thought changed, if at all, now that you're doing more of these projects, and do you think that impact varies by end market use case? And, and how should we think about that? I mean, anyway to quantify this, at this point in the cycle. Thank you.

From the prior quarter in our days sales outstanding. So it's really just the increased focus on that it's always been a focus by Dave just really good execution by the team and getting the bills out gain and collected and we think it's sustainable as we move forward feel very very confident about the free cash flow guide for the.

Speaker 2: increased focus on that. It's always been a focus, but it's just really good execution by the team and getting the bills out and getting them collected. And we think it's...

Speaker 2: Sustainables as they move forward feel very very confident about the the free cash flow guide for the the fourth quarter and if you're really good about hitting the guy

The fourth quarter.

And I feel really good about that hitting.

Hitting the guide that.

Speaker 2: that we set out at the very beginning of the year to generate, you know, without web help.

We said at the very beginning of the year to generate without withheld.

Speaker 2: half a billion dollars or more free cash flow this year. We're definitely on track to do that if you look at how we've done through three quarters.

Half a billion dollars or more of free cash flow. This year, we're definitely on track to do that if you look at how we've done two or three quarters.

Ruplu Bhattacharya: I Ruplu, so a couple different points there. I think when we talk about 10 to 15% of transactions can be automated, that's what we're doing on a yearly basis, regardless of generative AI or RPA or anything else that's coming along with it. And what we've talked about is that generative AI can probably increase that by a little bit, but not dramatically more than that from what we're seeing as we deploy these practices.

Great. Thanks, very much most of the questions.

Thanks.

Speaker 1: Thank you once again to ask a question. Please press star 11 on your telephone. Again, that's star 11 on your telephone task. A question. Again.

Thank you once again to ask a question. Please press star one on your telephone again Thats Star one on your telephone task of question.

Ruplu Bhattacharya: What's offsetting that is the new revenue streams that we're seeing by deploying these new technologies, both from design, implementation, and running the new technologies and curating the content that goes along with it. And as we kind of talked in some of the prepared remarks, even net new areas that we're deploying our own platforms where we're getting net new revenue flows that are coming in for that. So that clearly is what we're focused on offsetting any revenue headwinds, as well as taking more share within the clients.

Please standby for our next question.

Speaker 1: which comes from the line of Divya Goyal, ask all she'll be.

Which comes from the line of <unk> <unk> of Scotiabank.

Speaker 6: to have known as a long. So I'll be really address the part of my question, which was on the guide that it provided. So Chris addressed that, you know, there is some content node.

Good afternoon, everyone.

Thank you Paul.

Well part of my question, which was on the guide that you provided so Chris address that.

There is some some continued.

Speaker 6: how should I say slow down in the macro that's been noted across the business. What level of confidence can be seen in terms of the overall guidance that you provided for Q4? And how should we expect the business to perform going forward considering obviously what's going on with the AI transformation alongside the macro impact?

How should I say slowdown in the macro that's been no data across the business what level of confidence can be seen in terms of the overall guidance that you provided for Q4 and how should we expect the business to perform going forward.

Ruplu Bhattacharya: I think what we're seeing right at the moment is that we're able to deploy generative AI faster than some of our clients can actually deploy it. And so we're seeing the benefits in our operating cost structure and scalability that we called out a number that are starting to get to scale. And hopefully we'll see additional benefits from those as we get them to across the entire enterprise, including the new web help combination, which I think offsets any kind of cost mitigation that we might have from any impact from a revenue perspective that's coming in from automation if that makes sense. Thanks for all the details. Appreciate it. No problem. Thank you. Again, to ask a question, please press star 11 on your telephone. Again, that star 11 on your telephone to ask a question.

With me what's going on.

AI transformation alongside the macro impact.

Actually what I want.

Speaker 3: So I was going to want to take that because it ties into some of the AI conversation that we're talking about. So a couple of different points to it. When we look at our guidance for Q4, what we've kind of stated before is that we've stripped out the seasonality of the business that historically has been in Q4 primarily based on what we saw last year. And so when we're talking to our clients and we're looking at their volumes, we're seeing that

So why don't I take that because it ties into some of the AI conversation that we're talking about so a couple of different points. So when we look at our guidance for Q4, what we've kind of stated before is that we've stripped out the seasonality of the business that historically has been in Q4, primarily based on what we saw last year and so when were.

Talking to our clients and we're looking at their volumes, we're seeing that sort of flatness from a seasonality perspective come through and they also mentioned what we're seeing is sort of a steady.

Speaker 3: flatness from a seasonality perspective come through. As I also mentioned, what we're seeing is sort of a steady rate of business from the clients that have seen decreased volumes.

Rate of business from the clients that have seen decreased volumes based on consumer demand and those are kind of continuing through and they've been kind of trailing as we have expected for the last number of weeks in last quarter. So we're kind of looking at that as pulling through to Q4 as well and then on the third element from <unk>.

Oliver Davies: Our next question comes from the line of Oliver Davies of Redburn Atlantic. Yeah, hi, guys. I guess a couple of questions. Just firstly, in terms of how the revenue growth guidance for the concentric legacy business, so can you just talk about what you're seeing in terms of underlying volumes and new client decision, I guess, it looks like healthcare kind of accelerated in the quarter, whereas you know, most of the other sectors were pretty similar to the last quarter.

Speaker 3: based on consumer demand. And those are kind of continuing through and they've been kind of trailing as we've expected for the last number of weeks and the last quarter. So we're kind of looking at that as pulling through to Q4 as well. And then on the third element from a generative AI perspective, right now we're seeing generative AI as an additive revenue to our business, where we're doing the consulting, we're doing the implementations, we're doing the proof of concepts, we're getting services for building out the models and managing those models as they start to come into production. And so that has real no impact in our fourth quarter. I was outside of the revenue that we expected that's already been booked or sorry, that's been sold. And now we're going into the implementation and billing phase.

<unk> AI perspective, right now, we're seeing generative AI as an additive revenue to our business, where we're doing the consulting we're doing the implementations we're doing the proof of concepts, we're getting services for.

Oliver Davies: And I guess following on from that, you know, you said, a client's doing looking to offshore web hospital or is anything changed on that front. Hi, Oliver. So to answer your first question, what we're seeing is kind of continued consumer, I'll call it budgeting for new consumer electronic devices, subscription spending, other things that are time somewhat discretionary. So we continue to see those volumes depressed across some of our larger clients. But the volume is now becoming more steadily depressed, if that makes sense.

Building out the models and managing those models as they start to come into production and so that has real no impact in our fourth quarter outside of the revenue that we expected.

That's already been booked or sorry, that's been solved and now we're going into the implementation and billing phase.

Speaker 6: that's helpful. Just following on this, that process here, I want you to understand, have you been seeing any pricing pressure or conversely any margin benefit given the automation that you are trying to bring across the customer?

That's helpful. Just following on this.

I wanted to understand have you been seeing any pricing pressure or Conversely, any margin benefit given the automation.

Oliver Davies: It's more stable versus what we saw at the beginning of the year, where it tends to fluctuate. We are seeing growth in the strategic verticals that we've called out, primarily because of net new wins and net new services we're putting into those those verticals, such as the healthcare, vertical, banking, financial services, and even travel we're doing quite well at. And we still see travel despite sort of my comments about consumers cutting back in some areas, being quite robust into the future from a volume expectation perspective, from just an overall offshoring, near-shoring comment.

Turning to bring across the customers.

Speaker 3: Yeah, so we do see pricing pressure in the highly transactional business. And as we've talked about it, that's about 10% of our business, although it continues to decline. If you think about it back in February , it was about 13%. Now it's done to 10% and our goal is obviously to continue to drive that down.

Yes, so we do see pricing pressure in a highly transactional business and as we've talked about it that's about 10% of our business. Although it continues to decline.

If you think about it back in February was about 13% now its down to 10% and our goal is obviously to continue to drive that down in that part of the segment are part of the business, it's very easy.

Speaker 3: In that part of the segment, or part of the business, it's very easy to ramp. It's quite commodity based business. And there are certainly people who are chasing it for revenue. Our preference is to more focus on the higher value services. And when that business by quality of service, but not worry about it if it goes away from just a pure pricing perspective.

Easy to ramp its quite commodity based business and there are certainly people who are chasing it for revenue our preferences to more focus on the higher value services and.

Oliver Davies: As we've talked about before, clients for the most part are very focused on managing their cost structure. And so pretty much the majority of all new transactions and deals and ramps of existing clients are tending to be done at the most cost effective shore environment, whether that be near-shor or offshore. Very few starts, in fact very, very, very, very, very few starts are starting out on shore at a higher cost structure. It's just not in client's budgets right at the moment.

When that business by quality of service, but not worry about it if it goes away from a from just a pure pricing perspective, and the higher value services, we're seeing it much more stable from a pricing environment clients are more focused on the security.

Speaker 3: In the higher value services, we're seeing it much more stable from a pricing environment. Clients are more focused on the security.

Speaker 3: The work that you're doing, they're focused on compliance of the work that you're doing, they're focused on consistency of the work, they're focused on how you're going to actually deliver the outcomes. And so therefore, where we're putting in technology, where we're putting in sort of this automation for driving better efficiencies internally.

The work that Youre doing there focused on compliance of the work that youre doing there focused on consistency of the work. They are focused on how youre going to actually deliver the outcomes and so therefore, we're putting in technology, where we're putting in sort of this automation for driving better efficiencies internally that is what is supporting our margin.

Andre Valentine: Okay, great, thanks. And then maybe one for Andre, it's on the free capsule, it looks to be driven by working capitals. It could just comment on the reason for that, in terms of free capsule. Any Andre, you're not coming through. Sorry about that, we muted ourselves for a second. So, Ali, you're right, the improvement and pre-cash flow is largely coming from working capital improvements, and that's really just a focus on the blocking and tackling of getting bills out on time and collected on time, which was drove roughly a two-day improvement from the prior quarter in our day's sales outstanding.

Speaker 3: That is what is supporting our margin stability within those clients. And we expect that that will continue on as we continue to execute on our strategy. If I remember correctly, the problem is contacts, while the community gives us contact information,

Stability within those those clients and we expect that that will continue on.

As we continue to execute on our strategy.

That's very helpful.

No problem.

Yeah.

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Andre Valentine: So, it's really just increased focus on that. It's always been a focus, but it's just really good execution by the team and getting the bills out and getting them collected, and we think it's sustainable as we move forward. I feel very, very confident about the free cash flow guide for the fourth quarter, and it feels really good about hitting the guide that we set out at the very beginning of the year to generate, you know, without web help, half a billion dollars or more of free cash flow this year, but we're definitely on track to do that if you look at how we've done for three quarters.

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Divya Goyal: Please stand by for our next question, which comes from the line of Divya Goyal. Us goes your bank.

Divya Goyal: Good afternoon, everyone. So, earlier, you've really addressed the part of my question, which was on the guide that is provided. So, Chris addressed that, you know, there is some some continued how should I say slow down in the macro that's been noted across the business. What level of confidence can we see in terms of the overall guidance that you provided for Q4? And how should we expect the business to perform going forward considering obviously what's going on, but the AI transformation alongside the macro impact.

Divya Goyal: Actually, Divya, what are we sorry, I was going to want to take that because it ties into some of the AI conversation that we're talking about. So, a couple of different points to when we look at our guidance for Q4. What we've kind of stated before is that we've stripped out the seasonality of the business that historically has been in Q4 primarily based on what we saw last year. And so when we're talking to our clients and we're looking at their volumes, we're seeing that sort of flatness from a seasonality perspective come through.

Divya Goyal: And they also mentioned what we're seeing is sort of a steady rate of business from the clients that have seen decreased volumes based on consumer demand. And those are kind of continuing through and they've been kind of trailing as we've expected for the last number of weeks and last quarter. So, we're kind of looking at that as pulling through to Q4 as well. And then on the third element from a generative AI perspective, right now we're seeing generative AI as an additive revenue to our business, where we're doing the consulting, we're doing the implementations, we're doing the proof of concepts, we're getting services for building out the models and managing those models as they start to come into production.

Divya Goyal: And so that has real no impact in our fourth quarter outside of the revenue that we expected that's already been booked in or sorry, that's been sold and now we're going into the implementation and billing phase.

Christopher Caldwell: That's helpful. Just following on this thought process here, I wanted to understand have you been seeing any pricing pressure or conversely any margin benefits given the automation that you are trying to bring across the customers? Yeah, so we do see pricing pressure in the highly transactional business and as we've talked about it, that's about 10% of our business although it continues to decline. If you think about it back in February was about 13% now it's done to 10% and our goal is obviously to continue to to drive that down.

Christopher Caldwell: In that part of the segment are part of the business it's very easy to ramp it's quite commodity based business and there's certainly people who are chasing it for revenue are preferences to more focus on the higher value services and you know when that business by quality of service but not worry about it if it goes away from from just a pure pricing perspective. In the higher value services we're seeing it much more stable from a pricing environment.

Christopher Caldwell: Clients are more focused on the security, the work that you're doing they're focused on compliance of the work that you're doing they're focused on consistency of the work they're focused on how you're going to actually deliver the outcomes and so therefore where we're putting in technology where we're putting in sort of this automation for driving better efficiencies internally that is what is supporting our margin stability within those clients and we expect that that will continue on as we continue to execute on our strategy.

Christopher Caldwell: That's very helpful thanks Chris. No problem.

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