Q3 2023 Grid Dynamics Holdings Inc Earnings Call
<unk> got strong momentum with new clients, great traction with artificial intelligence projects.
Genius to garner significant interest across our customer base.
And progress with our gear tube initiatives as we continue to operationalize is across the company.
On a macro demand environment points to a level of stabilization.
We still have some ways to go before calling it a strong snap back for back to normalized levels of demand are more optimistic than I was three months ago.
In many ways. This is was not expected.
As enterprises need to spend towards the business imperatives that include digital transformation initiatives.
In other words for enterprises to remain competitive they need to spend on crucial business digital transformation needs.
For the past three quarters, you had assumed that our revenue has been flattish.
As we've highlighted before the general trend, we encountered a form the headwinds with a handful of customers, which offset by other existing customers and new logos.
Going forward, we observe the headwind trend reverse.
This is incrementally positive and we anticipate company's growth in 2020.
Now if I were to look at the billable headcount brands some positive trends are emerging.
Over the past six weeks, we have seen a steady rise in our billable head count. Additionally.
Additionally.
The demand for these billable head count started coming from existing logos.
Last but not the least new logos and recent logos continue to trend in the right direction.
Once again, the underwriting fundamentals are pointing in the right direction, which leads us to be incrementally positive.
So in summary, I would like to leave you with three thoughts on the demand environment first the magnitude of resets across our customer is diminishing and secondly for the vast majority of the comms business is stable and third momentum with our new engagements is robust.
Now coming to the fourth quarter.
We're more than one month into the fourth quarter and the summary thoughts I have shared with you today extended in the fourth quarter as well.
Billable headcount continues to grow our activity is robust and then making those declines from the handful customers continue to diminish we continue to invest in our engineering resources toward building, new R&D artifacts accelerators and AI capabilities.
During the quarter, there was a lot of opportunities with our technology organization, including continued interest in our broad technology offering including area.
During the quarter, we completed multiple enterprise AI in Germany with AD budgets with our journey.
Efforts, our R&D initiatives resulted in several new solutions. These include G&A for intelligent document processes and Gen AI for software development with.
With our double projects, we continue to be engaged across the spectrum of our clients with a multitude of solutions. These projects are at different stages of development that include global financial institutions, Retailers' hotel chains and automotive suppliers.
Our strength has always been our engineering training around leading technologist specializations to support the strong demand for our skill sets. We have established a comprehensive training program.
Our acreage.
As segmented across three trucks and ranges from introductory to more advanced features.
Engineers are going through the rigorous broker, which take up to several quarters to complete the entire Caribbean.
As a reminder, three dynamics AIA engagements are based on more than seven years of internal research and successful implementations with our Cherokee brand offering we partner with customers to employer large language models and from guided image iteration to the applications and product design and visualization knowledge retrieval wealth.
Management and customer support.
On the Giga Joule, British we continue to make good progress.
<unk> was our strategic Blueprint, then lays out a framework for our company toward a $1 billion revenue goal.
During the quarter, we made some key hires across our CTO organization sales organization. However continues to focus on industry verticals, such as manufacturing pharmaceuticals in BFS.
In the quarter, there were several trends and I want to share with you some of the notable ones.
Well government.
In the third quarter, we signed 10, new enterprise customers. This brings that new enterprise logos added in 2023 to a total of 2008. We believe Q3 client acquisition is a further testament of our competency and the confidence for a large global enterprises too.
Sign up with us.
Current environment.
Some of them one notable wants to mention include a global food company.
Automotive parts supplier.
A lot of direct to consumer home improvement solution provider.
Office supply retail company U S based insurance company and European text Advisory group.
Our strong momentum is a testament of our differentiation and value we bring to our customers.
Delivery locations support.
Operating in 18 countries spanning across North America and Europe.
We'll also continue to expand in India, and adding another engineering center location.
Which is a testament of premium has been a truly global company.
Ill follow the sound strategy enables our clients to be supported in uninterrupted fashion around the clock.
Clients embrace our geographic diversification ensures a locations for the engineering.
During the quarter.
We're able to quickly put together and ramp up dedicated teams across our global delivery locations for some of the new and recent clients. Additionally, our integration with next year in mutual mobile is in full swing and we have started to implement synergies across engineering operations and Becker offices going into.
The sales activities.
European business during the quarter, we made a good progress in expanding our footprint across industry verticals within European plants, we completed a major major digital commerce less about upload forming for global footwear company.
We're on time and within the budget, we're leveraging experiences to develop similar competencies across other industry verticals.
Additionally, we are implementing a large possible commerce modernization platform for our global specialty auto parts company and our mission to modernize their b to C business.
Leveraging our expertise partnerships and references we expect to expand our brand in the market.
For a large medical device company, we're launching initiatives and data engineering and generative AI to tackle challenges related to data inefficiency and governance and the goal is to enhance the efficiency of sales reporting process.
Partnerships.
Partnerships continue to be a whiteboard part of our growth and they have become increasingly important in our long term plan towards becoming a $1 billion com.
We currently have over a dozen partners with whom we work with these when these novel them contributed revenue meaningfully on an individual basis. This also means that there is a significant scope to scale as we tap into this larger opportunity in partnership ecosystem.
We have extended our partnership with Empire for scale as to their AI engineer offering and we are actively developing solutions and accelerators on Martin verdict on Google Azure opening for Microsoft Amazon bedrock for AWS.
Additionally, we continued to invest in growing independent software vendor partnerships and supply chain digital experience marketing and commerce domains.
This effort aims to enhance the value we provide to executives in the C suite, including <unk>, <unk> and Chief product Officer.
In the third quarter.
Our 10, new enterprise logos three came from our partnership relationships.
An additional.
Last quarter, we announced a significant global partnership with Google cloud to develop and implement in a major Germany various solutions.
We have been diligently working on leveraging global Google cloud vertical <unk> a platform that incorporates powerful foundation large language models and advanced image generation capabilities.
Knowing that this quarter, we are invited to participate in Google's next leadership for us.
Where we expanded our business relationship.
During the quarter.
Great dynamics delivered some notable projects.
In manufacturing.
For one of the worlds largest tire manufacturer with piloted an AI based platform for tire recognition.
Validation and predictable maintenance.
The platform is based on deep learning it was delivered as a cloud based solution to the dealers.
The goal of this solution is to significantly increase the productivity of their service centers simplify predictive maintenance and enable seamless integration with downstream applications.
For one of the world's largest technology company, we successfully designed and implemented a cutting edge intelligence tool for measuring and allocating computing infrastructure that combines on premises data centers was public law.
Our solution measures resource utilization across department associated cost and produces 360 view on spend.
This framework and powers, our client with substantial savings in their cloud on premise infrastructures.
As a leading European based footwear manufacturer grid dynamics was selected as the primary technology partner for their high profile outcome possible Commerce re platforming Paul.
By seamlessly integrating best of breed cloud native products to leverage AWS platform to architect a cutting edge solution that both scalability flexibility and future proof capabilities, our solution will enable decline and addressing creating key capabilities that will drive customer.
<unk> and retention branding as well as process efficiency optimization.
It's one of the largest beverage distribution company in the North America <unk> build a framework for a new enterprise cloud.
This significant program will be the basis for the company's multi year digital transformation strategy.
<unk> intends to enhance user experience across multiple sales channels ensure dynamics kill ability and technology revenues for building custom applications to enable new business capabilities.
With that let me turn the call over to our new who will discuss Q3 results in more detail.
Thank you.
Thanks, Lynn and good afternoon, everyone.
Our third quarter revenue was 77 4 million was within our guidance range of 76 million to $78 million and exceeded wall Street expectations on.
On a sequential basis, our revenue grew modestly and was down four 6% on a year over year basis.
Relative to last quarter, we saw greater stabilization across the majority of our accounts.
During the third quarter retail our largest vertical representing 34, 3% of revenues increased by 2% on a sequential basis and grew five 1% on a year over year basis within retail vertical on a sequential basis, we witnessed growth from areas such as home improvement Department stores and <unk>.
<unk> retail.
TMT, our second largest vertical represented 37% of our third quarter revenues decreased by one 5% on a sequential basis at nine 9% on a year over year basis on a sequential basis. We witnessed continued caution at some of our larger TMT customers.
Here are the details of the revenue mix of other verticals, our CPG and manufacturing represented 12, 5% of our revenue in the third quarter, a decrease of 11, 1% on a sequential basis and 39, 8% on a year on year basis, the decline on a sequential and year over year basis came from some of.
Our large customers as they readjust to the spending levels to the current macro environment.
That said at our largest CPG customer we are witnessing stabilization and this should benefit us in the fourth quarter.
The finance vertical represented nine 4% of revenue an increase of eight 2% on a sequential basis and 22% on a year over year basis. The growth in the quarter came from a combination of financial and technology customers and new logos.
And finally, the other segment represented 13, 1% of our third quarter revenue and was up six 1% on a sequential basis.
The strong sequential growth was driven by both from new logos and existing customers that spanned across healthcare distribution and the restaurant industry.
We exited the third quarter with a total headcount of 3823 versus 3862 employees in the second quarter of 2023 and up from 3746 in the third quarter of 2022.
At the end of the third quarter of 2023, our total U S. Head count was 322 or eight 4% of the company's total head count. This remained at the same level compared to eight 2% in the second quarter of 2023 and slightly decreased from eight 6% in the year ago quarter.
Our non U S headcount located in Europe, North America, and India was 3501 are 91, 6%.
In the third quarter revenues from our top five and top 10 customers.
36, 8% and 54% respectively versus 44, 5% and 61, 1% in the same period a year ago, respectively.
We witnessed continuous diversification and greater contributions from our recently acquired Voss.
During the third quarter, we had a total of 224 customers up from 216 in the second quarter of 2023 and up from 200 in the year ago quarter. The increase in customers on a sequential basis was largely from our core enterprise business.
Moving to the income statement, our GAAP gross profit during the quarter was $28 $2 million or 36, 4% and remained almost unchanged compared to $28 3 million or 36, 6% in the second quarter of 2023 and down from $32 7 million or 40 40.
3% in the year ago quarter on a non-GAAP basis, our gross margin was $28 7 million or 37% versus $28 8 million or 37, 3% in the second quarter of 2023 and down from $33 million or 47% in the year ago quarter the decrease in.
Gross margin as a percentage on a year over year basis, both for GAAP and non-GAAP was <unk>.
Largely due to a combination of FX headwinds.
Costs associated with the expansion in new geographies and investments in AI related expertise.
non-GAAP EBITDA during the third quarter that excluded stock based compensation depreciation and amortization restructuring.
And expenses related to the geographic reorganization transaction and other related costs was $10 7 million or 13, 9% of sales down from 12 million or 15, 5% of sales in the second quarter of 2023 and down from $17 1 million or 21, 1% of sales in the year ago.
<unk>.
Our GAAP net income in the current quarter totaled <unk> 7 million or one based on a basic share count of $75 5 million shares compared to the second quarter income of $2 6 million or three.
Based on a basic share count of $75 1 million and a loss of $6 7 million or a loss of <unk> 10 per share based on $68 6 million basic shares in the year ago quarter. The year over year increase in GAAP net income was largely due to lower levels of stock based compensation and significant decrease.
Geographic reorganization expenses.
On a non-GAAP basis in the third quarter, our non-GAAP net income was $5 9 million or <unk> <unk> per share based on $77 3 million diluted shares compared to the second quarter non-GAAP net income of $7 million or <unk> <unk> per share based on $76 9 million diluted shares and $11 million or <unk> 15 per.
Diluted share based on $71 9 million diluted shares in the year ago quarter.
Coming to the balance sheet on September 30 of 2023, our cash and cash equivalents totaled $253 7 million up from $246 2 million in the second quarter of 2023.
Turning to the fourth quarter guidance, we expect revenues to be in the range of 76 million to $78 million, we expect non-GAAP EBITDA in the fourth quarter to be in the range of 10 million to $11 million.
For the fourth quarter, we expect our basic share count to be in the range of 76 to 77 million shares.
And diluted share count to be in the range of $78 million to $79 million.
That concludes my prepared remarks, Ben we're ready to take your questions.
[music].
Thank you Aneel.
At this moment once we start the Q&A session I will first announced her name.
And pre financially ourself and turned out a camera.
Our first question comes from the line of my attendance from Needham. Please go ahead.
Thanks, Ben Good evening, Leonard and Enel <unk>.
Good job on the quarter.
Let me start with just the guidance and then any framework for how to think about fiscal 'twenty four I imagine you have maybe a few less billing days in <unk>, so that would suggest fairly stability.
<unk> <unk> to <unk>, but then as you look ahead into the early part of 2024.
Once you have higher billing days, so trying to get a better read on what you expect in terms of recovery as we go into 2024.
So thanks for your question you are right with your observation on Q4 versus Q3, and if you look at <unk> comments about billable head count, which is a steady increase or flattish outlook.
You can extrapolate from that is that we expect these trend to play out. So if you look at the foundations of our business core enterprise business, we're seeing across the board stabilization, we're seeing increased head count.
So right now when we look at it we're incrementally bullish now as you know Mike we do one quarter at a time, so let's come back in three and half months and gifts.
Incremental color on Q1, so for now, let's just deal with Q4.
Yeah.
Yeah.
Got it Okay I'll save my journey I question is for the analyst day, So I won't go there.
My next one I want to ask me.
I'll save them for a for that.
It's more on just some of the financials so kind.
Kind of related and maybe one or two just on the.
Both revenue and then of course, the effects profitability too is whereas utilization today and how much gas do you have left in the tank to expand utilization before you really have to crank up hiring when demand does come back to hopefully a spend levels sometime in 2024.
So I think in terms of utilization we've done a good job in general so utilization numbers, obviously, you now have.
End up.
Within our range.
It Hasnt changed.
From quarter to quarter as you know we've seen we've put in place.
But more disciplined approach towards we have we look at our engineering head count and as well as noninterest head count now Youre right. Its a very good question.
As.
Some of the demand trends unfold and we'll of course see how it plays out the hiring the acquisition of talent. These are important elements and yes, we are looking at that but again it's.
It's one quarter at a time right we have to plan on that we.
We have in all of these countries, where now we've got teams and we are constantly focused on some of these movements.
Movements in depending upon that we will act upon them.
So but yes. This is something we are discussing.
Got it well. Thank you so much see in a few weeks.
Thank you.
Hi, Mike Thanks for your question next.
Our next question comes from the line of Chuck Cycolor from Cantor Fitzgerald. Please go ahead.
Yeah, Hi, guys. Thanks for taking my question today and congrats on the results I wondered on the call you mentioned that you've grown more optimistic over the past three months I was curious are those more positive discussions with.
Some of your logo is largely driven by AI demand or is there a broader.
Thought process about returning to that general digital transformation spending.
Myra mentioned that we'll have much more cheaper debrief on the AI just in two weeks in New York, and though a handheld.
Handle this day and we will have a very large team there. So I will save a little bit of a mystery of that but fundamentally it's a great door opener at this point there are multiple projects you'll notice there's something unusual even in.
A new statement in the financials that there is some additional investments in going to a training people and by the way. That's also kind of a gross potential growth because we take more senior people redeem them.
Build even more capable team is because in our assumption that are more junior school would trade for internships or direct buyer would be easier to attract skilled that maintain the large core of the technology people. So thats about AI in terms of my confidence level.
Basically again, I mean, you mentioned that one quarter at a time, but what happens is.
We keep very careful statistics not only on a rate of change of the billable people, but the content of the projects or if there was one part but you know we're doing so much more complex work.
Not only in retail in the past as you know.
Cpg's, but in the broader base of the market do manufacturing in.
Pharmaceutical awaiting insurance business were going into this.
The life Science, we're doing so much more.
We were able to start converting our horizontal expertise into vertical recommendations. So I see a deeper level of discretion. In addition to that we will pick.
I'm a little bit more selective I mean are you know there is a what was the expression, but you know beggars can't be choosers, right, where we've been going through.
Frankly, it's tough times with the clients now we see that.
When our business today and going into 2024, we'd like to Badger.
Our partners, who will carry of the implementations of complex systems draw the bigger price you would expect.
Our commitment is going to be matched with their commitment to the business. So that gives me a little bit more.
I would say accomplish comprehensive possibly welcome.
Understood and that's great to hear it.
Clearly as you alluded to there's a lot of organic reinvestment going on in the business right now with the accelerating billable head count, but I was also curious if you could give an update on how you're thinking about the M&A environment right now and any updates on that regard.
Yeah sure it would be nice to tell you we have a dual coming right at the closing tomorrow, but it's probably not there yet and I'm going to comment beyond tomorrow, but the reality is again.
The market is very interesting.
We are becoming more selective in the deals as I mentioned and we did a couple of deals in India and then we start doing broader we look at Europe, we look at the depth over the relationship with our potential.
<unk> clients will look at Latin America, we're not giving up of course on the Indian part but.
We have a bigger roster with a deeper engagement. We are also attracting more like advisory side, Don don't call Me every day now the bankers or the services, we are becoming more selective in the.
The capital we will deploy as you can imagine that.
Cost of capital has been fixed rate so we.
We would like to make sure we are going to get the right targets, but I'm actually again, you alluded a return to the good what I say better targets right now.
Understood. That's very helpful. Thank you very much for taking my questions and looking forward to the analyst back.
Thank you. Thank you.
Thank you Josh.
Next question comes from the line of thought Bryan Bergin from TD Colin. Please go ahead.
Yeah.
Hey, guys good to see and good to hear the.
Thanks for taking the questions.
I wanted to start on the new logos that you're breaking up so can you just talk about.
When some of these new enterprise logos this quarter will begin to ramp and then any change in the pace or really the starting point from some of those other attractive large logos that you signed earlier in the year.
Well, Brian I know you mentioned there are some additional revenue start that means what she called reason blowers remember it's been a very old timer, who is totally there, but no 85% to five where it started getting more dynamics in the similar fashion show. There is there are some payouts or it is happening.
Oh some of the more older more mature in August are coming back the inventory of the technology development, which have been let's say a year ago start getting two degrees and they returned back to score.
Relative positioning because they're a correspondent fields. So that's one thing the other one is our concern the big enterprise logo of the consistent long term deployment and make sure. It doesn't happen just by stuffing. So again, we see more and more engagements.
Our timing in the form of the partnerships.
That's been consistently.
Good story for us.
Turning to live we are invested into Smes and we do have quite a bit over white papers and also educating our clients on the relevance of the specific initiatives. So that's number two and number three is where are playing a very broad base a relationship as we.
And do more sophisticated sales force, which you havent heard from me, probably whatever but I'm getting final that a little bit more satisfied. So all three things combined with what we invested into R&D and and.
Accelerators start crunching going a bit more confidence of the acquisition because it's not just momentum newswire.
He's got a logo and that goes away no. We wish you more corrections and stability.
Okay. Okay, that's good to hear.
I'll do a follow up here on kind of.
Two of your key industries are ones that have been a little more variable for yet so as we think about tech and CPG. Just on Tech can you talk first about how the conversations with some of those large clients are evolving and how is the outlook there.
Then for the CPG I heard the comment about the largest CPG clients stabilizing.
Do you have visibility for the balance of that.
Bulk of business stabilizing and other CPG and manufacturing clients yet.
Yes, let me start with the second is easy and we see more rfps than we assume more of a QBR discussions and they're not just discussion in the form of level you were doing a good job. The attendance of those discussions is overwhelming and because we are at the time of a drought.
We invested in our relationship with the broader based teams and then just engineered tune, but also the logistics guys. The marketing team experienced team. So there is this a broader base of interest for us.
It is not just with the with the top one with Doug One is a notable difference you need but we see others.
I mean more diversified in terms of what conversation bandwidth.
Sure.
That's that's kind of a.
Broader base scribe and I forgot the first part of it.
That was the cpg's half of that question.
PMT once yeah got.
So that's part of the reason I forgot because nothing extraordinarily bad has happened.
Usually.
Angela.
It will run to me when something happening in.
The number one is doing very well and we.
We are capturing more and more position there.
We are a preferred supplier to some extent and again I want to be very modest preferred supplier for the Giants, it's still not a dominant force it just more contributing value for us but the other one also start good you know there were projects, which were won recently that that's another interesting you remember I've mentioned to you that it was a rapid change.
Is there a change in their own layoffs.
Again, if you're patient announced with you regained relationships.
You win some programs.
Inviting change its not projects as programs, but it puts more responsibility with.
And that's where again I mean this is like one quarter at a time and we have a few more weeks.
At this time to talk because I want to make sure that those programs are our financial success and the amount I mentioned before as your tumor.
Really putting in much more deep dive on the sustainability of those relationship. It's very important that it's not just you know you were a few people and hope for the best assessing theres much more sustainable analytics be under relationship.
Okay. That's clear thanks, guys stay in a couple of ways.
Okay.
Thank you Brian.
Next question comes from Maggie Nolan from William Blair, Maybe your line is open.
Oh.
And now Hi, My name is and I wanted to dig into that more confidence out my comments as well I'm curious if there's any nuance between how you're looking at Europe and North America.
Maybe over the next couple of quarters, just given that Europe is becoming a larger part of your business.
Yeah. So.
We don't have fans in Europe.
Oh there is.
Theres always looks like right. So we put a lot more investment into U S. Two because it's a larger portion reinvesting into Europe, but I.
I would tell you that I will grant success drove when we are going to be significant diversified from U K.
Yeah, so everyone can say that.
Thinking about the Greg So we love our UK clients, but it also was similar to the distribution of the business in the U S. In the early days right. So we are now working with automotive supplier manufacturers with insurance companies those businesses, which will make it much more distinct in terms of the positioning in Europe.
Some of the projects in Europe.
A bit of a rolled off some new projects started but I would say that.
There is a little bit over.
Uncertainty of course, you know the political situation in the Middle East. In addition to this year it puts a little bit extra pressure as well.
I'm positive agenda, we just came back from Europe, we met quite a few calls so I'm positive on the growth, but I wouldn't be at a little bit more caution on the near term growth in Europe compare with my more bullish positioning on all main plants in the United States.
Got it that's helpful. And then you've made some recent investments in the sales force can you just talk about how you're incentivizing wins at existing clients and long Island.
Early in this type of environment and then in general just how the integration of some of those new hires as guy.
Okay very good so again I invite you, even though you're opening the snow will change due to New York, but.
And Uh huh.
Master in analyst day.
In addition to great feel about technology will talk about the other aspects and.
The sales is not the least right we actually have quite a good group prestige of silver.
Salespeople in my opinion.
I'm going to take the whole story of the Skus you know the divided by.
Under some farmers right. So the people who work in the existing accounts and we've done quite well in existing gone relationship, we could've done better and we're doing better but spring into the new clients and expanding news glass positioning that's a new that's something we invested in.
Recently.
Brought it on the head of the hunting.
Sales in the United States and that start picking up as well so the quality of our approach to start turning on now incentives.
It's certainly a very different disposition than a regular account management or you know the accounts performance itself. It's a very much driven by incentives on the performance now.
I am very excited about it because I like to see when people.
Put more bats aligned with the company. So they would like to get rewarded as my executive team and ordered when something you guys never liked this stock based compensation issues salespeople, where they are much put more emphasis from the reward on the performance of their accounts. So again, please join us on the 16th we will do more.
But I just I just feel much more engaged.
I Love My all the experience with the big companies like HP, and Philips and I've seen some amazing people in the hardware business, but we're not in the product, but we're not in hardware and I see that level of.
Quality is coming back.
Thank you Suzanne.
Sure.
Thank you Maggie.
Our next question comes from the telephone lines from Ryan Potter from city.
Ryan. Please go ahead.
Brian I guess.
Okay I'm not sure about the technical issue problem Caterpillar, let's switch to the next analyst.
Next one is from Puneet Jain from Jpmorgan.
Please go ahead.
Hey, Thanks for taking my question.
So can you talk about like the potential of 28, new enterprise customers that you added this year.
Looks like like these are large companies, but does the scope and nature of book any different from what you would have done in the past.
And should we expect like maybe higher contribution from such declines than typical 80 510 five model.
Well.
I would not run ahead of the numbers sprite, that's expectations remember mentioned before that we we need to make sure that the programs are performing great. So we have more client commitment to us.
And we have a higher commitment to their clients, but it means that the deployment of the projects are longer and the performance of these projects are required.
You know the proven pudding not everybody will survive on this where there is some people are a bit also generate about technology.
Again.
In some cases.
Go with our partners, we want to make sure our partners also sustained their values, but in many cases, our clients looked at green dynamics, what I always dreamed about okay, well, if you come with a partner with what's your point of view on the World and you know we make an agreement that it's a it's agreed dynamics business obviously.
They're going to promote where we came from because we're building a much more comprehensive roadmaps. So I will not promise you that next quarter I can definitively say that old 'twenty four or 'twenty plants will be there expect some level of infant mortality because there are too many of them very good ones, but I will.
Say that mid next year I think the contribution mangrove now that's the 10% remember it would that be in the 5% it would be for use of this kind of.
Our recent acquisition.
Has to be because if you really think about it David is probably would not work anymore. We had one year of stagnation right. So we're going to maintain the same course, we're going to go on a much slower ramp up when things become more aggressive so it's a combination of the technical capabilities technical Brazil's.
Programs with the clients and the relevance of the logos should give us the boosted Louis middle of recent clients to be able to achieve this desire to digit plus growth as we always expect from ourselves.
Patrick Thanks for explaining that and many of your peers have talked about seeing.
Margin headwinds from pricing and wage inflation dynamics.
Which could potentially continue into next year.
Can you share your thoughts what you are seeing at your client base.
So.
First of all now we have a very angry anew.
No.
So your brand is becoming much more clear in terms of the <unk>.
Very detailed action items going into next year.
You don't always take the wish for thinking for implementation.
We moved from.
Russia too.
Some countries in Central Europe, there was the bulk right.
We continue to expand in India.
And we need to see that margin profile to capitalize because still there is a significant contribution during their costs from the acquisitions, it's growing organically and that's why everybody is progress.
With that I can do organic you're probably gonna acute germinating companies, but you probably noticed.
We mentioned the third center range I mean.
I'm sure you're not you don't have to be the supergene use to know where the search city is if you are aware in Chennai hydro but.
Specular right and there's a good reason why it's Bangalore right. So it gives us the momentum on this margin profile, because we need to.
Address this followed the same strategy and the other thing is when we expand in Europe, we are becoming more selective on not going too many digitized punches you know.
Stockholm, Brian people love to collect the country. So we have 18, Ryan, but who knows.
Florida is merrier. So we can begin to install the injunction program screening progress named him as the depth in the offices.
We are thinking that's another one but that will go back to the most the hardest part is.
Pricing.
Right.
We started making some calls and those are tough goals again.
There has always been my love achieved multiple times you can chase revenue can chase profits.
Neither a success so the way to chase revenues to choose stable long term revenue at least how you're planning and then bringing them down into the client then they actually pay for Bryan we signed some really interesting conflicts, but I'm not the low volume day, two I'm trying to be honest and I want to make sure.
Dynamics, Brent remains that we are going into the fair relationship.
So that means a few of the project could have been you know the feathers may not be there because we want to start on the proper.
Pricey positioning but in case some of Casey we had to do some more aggressive investment into Bryan I don't like the word investment because to me investment its technologies people you invest in the customer invest in their ROI.
Discounts.
Again, thank you so much Chris.
So maybe we'll go back and see if Brian Ryan.
Brian is still there.
Sure, let me try one more time right.
Please try to our telephone Lake Cfe.
See if it works.
Okay.
Yes, Theres, some technical limitation of Hartzell catalyst.
At this moment.
That will be all of the Q&A session for today.
I will now pass the call back to ladder the closing remark.
Thank you everybody for joining us on the call today.
I'm more bullish than I was three months ago.
Our core business is rebounding and revenues for our new logo and reached the lowest continued to grow.
Our goals are Korea too.
To leverage our gigabit cube roadmap to become a billion dollar revenue company. We are diligently focused on executing the stated goals more importantly, our clients continue to place their confidence in green dynamics abilities.
This is a testament of the hard work across the entire company and I truly appreciate the contribution from each and every four employees.
On November 16th we will be hosting our first investor and analyst day, our deposit recommend you to attend in person it will be great opportunities to meet the expanded.
<unk> management team, we plan to delve into our capabilities and our service offerings, we plan to have damaged or on generating data that will provide some insights into our technology and that issue.
I also believe the investors will find that event insight I'm.
I'm looking forward to seeing all of you in two weeks. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you all for participating you may now disconnect.
[music].
Yes.
[music].
Yeah.