Q3 2023 Grid Dynamics Holdings Inc Earnings Call

[music].

Speaker 1: Good afternoon, everyone. Welcome to Green Dynamics, third quarter, twenty twenty three earnings conference.

Hello, everyone.

Come to Great Genetics third quarter 2023 earnings conference call I've been Jr. Head of Investor Relations at this time all participants.

Speaker 1: I think you have had an investor relations. At this time, I'll participate in some of your latest homies.

So the ratio of whole neighborhood.

Speaker 1: Join us on the call today, our CEO Leonard Niepius and his CEO Anil Durrada.

Joining us on the call today are CEO letters their shifts.

So a new yorker out of it.

Speaker 1: Following their prepared remarks, we'll open the call to your questions. Please note today's conference is adjourned.

Following their prepared remarks, we'll open the call to your questions.

Today's conference is being recorded.

Speaker 1: Before we begin, I would like to remind everyone that today's discussion will campaign forward looking statements. This includes our business and a financial outlook and the answers to some of the are working and becoming ahead of votes.

Before we begin I would like to remind everyone that today's discussion will contain forward looking statements. This includes our business and our financial outlook and the answers to some of your questions.

Speaker 1: Such statements are subject to the risks and uncertainty as described in the company's earnings release and other findings which ICC. During this call, we will discuss certain non- GAAP measures of our performance. Gap to non- GAAP financial reconsulations and slightly mental financial information are provided in the earnings classities and the AK filed with disease.

Such statements are subject to the risks and uncertainties as described in the company's earnings release.

Their findings we should ICT.

During this call, we'll discuss certain non-GAAP measures of our performance GAAP to non-GAAP financial calculations and supplemental financial information are provided in the earnings press release, and the 8-K filed with SEC.

Speaker 1: You can find all of the information I have just described in the Investor Relations section of our list.

You can find all of the information I have just described in the Investor Relations section of all of that effect.

Speaker 1: With that, I will now turn the call over to Leonard, our CEO .

With that I will now turn the call over to Leonard our CEO.

Speaker 2: Thank you, Ben. Good afternoon, everyone, and thank you for joining us today. As you have seen from our last session, we will be back with more information on the new COVID-19 pandemic.

Thank you Ben.

Good afternoon, everyone and thank you for joining us today.

As you have seen from our published results.

Speaker 2: Read an image, start quarter revenue, and not get in the dump, or within guidance range, and exceed it Wall Street Expo tape.

The name is third quarter revenue and non-GAAP EBITDAR.

The guidance range and exceeded Wall Street expectations.

Speaker 2: Our results reflect the company's under relentless commitment to our existing clients and our continued ability to execute to our stated goals. So.

Our results reflect the companies on the relentless commitment to our existing clients and our continued ability to execute to our stated goals.

So it was a lot of activity during the quarter.

Speaker 2: This includes some momentum with new clients, great traction with artificial intelligent projects, as it continues to gardener significant interest across our customer base.

This includes strong momentum with new clients, great traction with artificial intelligence projects continue.

Continues to garner significant interest across our customer base.

Speaker 2: And the progress without the YouTube initiatives as we continue to operationalize is across.

Programs without ear tube initiatives as we continue to operationalize is across the globe.

On the macro demand environment points to a level of stabilization.

Speaker 2: On the macro, the demand environment points to a level of stability.

Speaker 2: Well, we still have some ways to go before calling it a strong snapback or back to normalized levels of demand. And more optimistic than I was before. In many ways,

Well, we still have some ways to go before calling it a strong snap back we're back to normalized levels of demand I'm more optimistic than I was three months ago.

In many ways. This is was not expected.

Speaker 2: As enterprises need to spend toward their business imperatives, then include digital transformation initiatives.

As enterprises need to spend towards their business and burgers that include digital transformation initiatives.

Speaker 2: In other words, for enterprises to remain competitive, they need to spend a crucial business digital transformation.

In other words for enterprises to remain competitive they need to spend a crucial business digital transformation needs.

Speaker 2: For the best recorders, you have seen that our Reminium has been fled.

Or is it best shrink orders you have assumed that our revenue has been flattish as.

Speaker 2: As we've highlighted before, the Gerald Tranwin concert are from the headwind with a handful of customers, which are set by other existing customers in New York.

As we've highlighted before the general trend, we encountered a form the headwinds with a handful of customers, which offsets, but other existing customers and new logos.

Speaker 2: Going forward, we observe the headwind trend reverse.

Going forward we had.

I observed that headwind trend reverse.

Speaker 2: vicious incremental and positive and we anticipate companies growth in 2020.

This is incrementally positive and we anticipate company's growth in 2020.

Speaker 2: Now, if I were to look at the Google head conference, some positive trends are emerging.

Now if I were to look at the doable that had gone through some positive trends are emerging.

Speaker 2: For the past six weeks, we have seen a stadium rise in the bill of overhead.

Over the past six weeks, we have seen a steady rise in the billable head count. Additionally.

Speaker 2: The decision, the demand for these billable headcounts started coming from existing laws.

Additionally.

The demand for these billable head count started coming from existing logos.

Speaker 2: less but not the least. New logos and recent logos continue to trend in the right direction.

Last but not the least new logos and recent logos continue to trend in the right direction.

Speaker 2: Once again, the underwriting fundamentals are pointing in the right direction, which leads us to be incrementally.

Once again, the underwriting fundamentals are pointing in the right direction, which leaves us to be incrementally positive.

Speaker 3: So, in summary, I would like to leave you with three thoughts on the demand environment. First, the magnitude of research across our customer is diminishing. Secondly, for the vast majority of the cons businesses table, and third, momentum without new engagements is robust.

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.

Speaker 2: We're more than one month into the fourth quarter and the summary thoughts I have shared with you today extend to the fourth quarter.

We're more of a one month into the fourth quarter and the summary thoughts I have shared with you today extend to the first quarter as well.

Speaker 2: A buildable headstrong continues to grow. Our AI activity is robust. And then make those big lines from the handbook customers continued.

Billable headcount continues to grow our activity is robust and then making those declines from the handful customers continued to diminish we continue to invest in our engineering resources toward building, new R&D artefacts accelerators and AI capabilities.

Speaker 2: We've been gearing to invest in our engineering resources toward building new R&D artifacts, accelerators, and AI capable.

Speaker 2: In the quarter, there was a lot of activities without technology organization, including interest in our broad technology offering including air.

During the quarter, there was a lot of opportunities with our technology organization, including continued interest in our broad technology offering including area.

Speaker 2: During the quarter, we complete multiple enter Virginia and Jordi pragmatic crutch.

During the quarter, we completed multiple enterprise AI and Jody Red budgets with our journey of I F.

Speaker 2: With our GNI effort, our NDM issues resulted in several new solutions. It didn't include GNI for intelligent document processes and GNI.

Efforts, our R&D initiatives resulted in several new solutions. These include G&A for intelligent document processes and Jennie O four software developed.

Speaker 2: Without double projects, we're going to be engaged across the spectrum of our clients with a multitude of solutions. These projects are at the different stages of development that include global financial institutions, retailers, hotel chains and other modernization.

With our double projects, we're going to need to be engaged across the spectrum of our clients with a multitude of solutions. These projects are at different stages of development to include global financial institutions, Retailers' hotel chains and automotive suppliers.

Speaker 2: Our strength has always been our engineer training around leading technology specialists.

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.

Speaker 2: To support the strong demand for AI skill sets, we have established a comprehensive AI training program.

Speaker 2: Our curriculum is segmented across three tracks and ranges from introductory eye to more events.

Our acreage is.

As segmented across three trucks and ranges from introductory to more advanced features.

Speaker 2: Engineers are going through the rigorous program, which takes up to several quarters to complete the entire.

Engineers are going through the rigorous broker, which takes up to several quarters to complete the entire group.

Speaker 2: As I remind, the three dynamics the I engagements are based on more than seven years of a journal research and successful employment.

As a reminder, <unk> engagements are based on more than seven years of internal research and successful implementations with our Cherokee brand offering we partner with customers to employ large language models and pronged guided image iteration for applications in product design and visit organization knowledge retrieval wealth.

Speaker 2: With our journey with AI offering, we partner with customers to employ large language models and prompt guided image generation for the applications and product design and visualization, knowledge retrieval, wealth management, and customer.

Management and customers.

On the Giga to British wood regime to make good progress as you know <unk> was our strategic Blueprint then lays out a framework for our company toward a $1 billion revenue goal.

Speaker 2: On the GigaCube initiative, we continue to make good progress. As you know, GigaCube is our strategic blueprint that lays out a framework for a company toward a billion dollar revenue goal. During the quarter, we made some key fires across our CTO organization and sales organization. Our effort continues to focus on industry verticals, such as manufacturing, pharmaceuticals, and BFI.

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.

Speaker 2: In the quarter, there were several trends, and I want to share with you some of the notable ones.

In the quarter, there were several trends and I want to share with you some of the notable ones.

Hello government.

Speaker 2: In the third quarter, we signed 10 new enterprise customers.

In the third quarter, we signed 10, new enterprise customers. This brings that new enterprise logos editing 'twenty two 'twenty three to a total of 2008. We believe Q3 client acquisition is a further testament of our pump.

Speaker 2: This brings that new Enterprise Logos added in 2023 to a total of 28.

<unk> and <unk> for a large global enterprises to sign up with us.

Current environment.

Speaker 2: Some of the more notable ones to mention include a global food company.

Some of the more notable ones you mentioned included a global food company.

Speaker 2: global automotive parts supplier, a large direct-to-consumer home improvement solution provider, a large office supply retail company, a U.S.-based insurance company, and European tax advice.

Global 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.

Speaker 2: Our strong momentum is the testament of our differentiation and value we bring to our

Our strong momentum is a testament of our differentiation and value we bring to our cost.

Speaker 2: Delivery location support. We operate in 18 countries spawning across North America and Europe . We also continue to expand in India and adding another engineering center location.

Delivery locations support we operate in 18 countries spanning across North America and Europe.

We'll also continue to expand in India, and adding another engineering center location.

Speaker 2: which is a testament of Greenland has been a truly global company.

Which is a testament of <unk>.

Miami has been a truly global company.

Speaker 2: Our Follow the Sun strategy enables our clients to be supported in uninterrupted fashion around the clock.

Ill follow the sound strategy enables our clients to be supported in uninterrupted fashion around the clock.

Speaker 2: Clients embrace our geographic diversification and choice of locations for the engineering

Clients embrace.

All of our geographic diversification and choice of locations for the engineering.

Speaker 3: 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.

During the quarter were able to quickly put together and ramp up dedicated teams across our global delivery locations or some of the new and recent clients. Additionally, our integration with next year unusual noble is in full swing and we have started to implement synergies across engineering operations and <unk>.

Speaker 3: Additionally, our integration with NextSphere and Mutual Mobile is in a full swing, and we have started to implement synergies across engineering operations and back-end offices going into the current sales activities.

Offices going into their 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 lifeboat or upload forming for global footwear company.

Speaker 3: During the quarter, we made good progress in expanding our footprint across industry verticals with a new European goal.

Speaker 3: We completed a major digital commerce platforming for a global footwear company, delivered on time and within the budget. We're leveraging experiences to develop similar competencies across other industry versions.

We're on time and within the budget, we're leveraging experiences to develop similar competencies across other industry verticals.

Speaker 2: Additionally, we're implementing a large composable commerce modernization platform for a global specialty auto parts company and a mission to modernize their vehicle.

Additionally, we are implementing a large possible commerce modernization platform for our global specialty auto parts company, and then mission to modernize their b to C business.

Speaker 3: Leveraging our expertise, partnerships, and references, we expect to expand our brand in the market.

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 governments and the goal is to enhance the efficiency of sales reporting process.

Partnerships.

Speaker 3: Partnerships continue to be a vital part of our growth and have become increasingly important in our long-term plan toward becoming a billion-dollar company.

Partnerships continued to be a whiteboard part of our growth and they haven't become increasingly important in our long term plan towards becoming a $1 billion com.

Speaker 2: We currently have over a dozen partners with whom we work. For these, only half of them contribute 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 net partnership.

We currently have over a dozen partners with whom reward for this on a number of them contributed revenue meaningfully.

On an individual basis. This also means that there is a significant scope to scale as we tap into this large opportunity.

This should be persist.

Speaker 2: We have extended our partnership with the Hyperscalers to their AI and Gen AI offering, and we're actively developing solutions and accelerators on BART and Vertex AI from Google, Azure OpenAI from Microsoft, Amazon Bedrock from AWS.

We have extended our partnership with Empire for scale as to the AI engineer will free and where.

We're actively developing solutions and accelerators on Martin verdict, CA for Google Azure opening hours from Microsoft Amazon bedrock for AWS.

Speaker 3: Additionally, we continue to invest in growing independent software vendor partnerships and supply chain, digital experience, marketing and commerce domain.

Additionally, we continue to invest in growing independent software vendor partnerships and supply chain digital experience marketing and commerce domains.

Speaker 2: This effort aims to enhance the value we provide to executives in the C-suite, including CEOs, CMOs, and chief products.

This effort aims to enhance the value we provide to executives in the C suite, including shows Cmo's and Chief product Officer.

Speaker 2: In the third quarter, all 10 new enterprise logos, three came from our partnership release.

For the third quarter.

Our 10, new enterprise logos three came from our partnership relationships and.

Speaker 2: In addition, last quarter we announced a significant global partnership with Google Cloud to develop and implement innovative journey-based solutions.

An additional.

Last quarter, we announced a significant global partnership with Google cloud to develop and implement in a major Germany various solutions.

Speaker 3: We have been diligently working on leveraging Google Cloud's Vertex AI, a platform that incorporates powerful foundation, large language models, and advanced image generation capabilities.

We have been diligently working on leveraging global Google close vertex AI platform that incorporates powerful foundation large language models and advanced image generation capabilities.

Speaker 3: Building on that, this quarter, we're invited to participate in Google's next leadership forum, where we expanded our business relationships. During the quarter, three dynamic

Knocking on that this quarter, we are invited to participate in Google's next leadership for us.

Where we expanded our business relationships.

During the quarter.

Great dynamics delivered some notable projects.

In manufacturing.

Speaker 2: For one of the world's largest tire manufacturers, we've piloted an AI-based platform for tire recognition, health evaluation, and predictable maintenance.

For one of the worlds largest tire manufacturer.

Piloted an AI based platform for diabetic recognition helped because elevation and predictable maintenance.

Speaker 2: The platform is based on deep learning and was delivered as a cloud-based solution to the dealers. The goal of the solution is to significantly increase the productivity of their service centers, simplify predictive maintenance, and enable seamless integration with the whole solution.

The platform is based on deep learning it was delivered as a cloud based solution to the dealers.

All of this solution is to significantly increase the productivity of their service centers simplify predictive maintenance and enables 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.

Speaker 3: For one of the world's largest technology company, we successfully designed and implemented a cutting edge intelligent tool for measuring and allocating computing infrastructure that combines on-premises data centers with public.

Speaker 2: Our solution measures resource utilization across departments, associated costs, and produces 360 views on...

Our solution measures resource utilization across department associated cost and produces 360 view on spend.

Speaker 2: The framework in bars of line with substantial savings in their cloud and premise infrastructure.

This framework in Basel client with substantial savings in their cloud on premise infrastructures.

Speaker 2: And the leading European base was where Manifation read that image was selected as the primary technology partner for their high profile of composable commerce, Wr???? Alice Bruegel reforming investment fund.

As a leading European based footwear Manitex, great dynamics was selected as the primary technology partner for their high profile at some possible commerce re platforming Paul.

Speaker 3: by seamlessly integrating best-of-breed cloud-native products. The LARRH-AWS platform to architect a cutting-edge solution that's most capability flexibility and future full capabilities. Our solution will enable the client in addressing creating key capabilities that will drive customer acquisition and retention branding, as well as process efficiency.

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 acquisition.

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.

Speaker 2: It's one of the largest beverage distribution company in the North America. Green Dynamics built a framework for a new enterprise cloud platform.

Speaker 2: The Significant Program will be the basis for the company's multi-year digital transformation strategy. The program intends to enhance user experience across multiple sales channels, ensure dynamic scalability, and technology readiness for building custom applications to enable new business capabilities.

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.

Speaker 2: With that, let me turn the wall over to a new we will discuss Q3 results in more key kick.

With that let me turn the call over to our new who will discuss Q3 results in more detail.

New.

Speaker 4: Thanks Leonard, good afternoon everyone. Our third quarter revenue of 77.4 million was within our guidance range of 76 million to 78 million and exceeded Wall Street.

Thanks, Lynn good afternoon, everyone.

Third quarter revenue was 77 4 million was within our guidance range of 76 million to $78 million and exceeded wall Street expectations.

Speaker 4: On a sequential basis, our revenue grew modestly and was done 4.6% on a Eurovere.

On a sequential basis, our revenue grew modestly and was down four 6% on a year over year basis.

Speaker 4: Relative to last quarter, we saw greater stabilization across the majority of our

Relative to last quarter, we saw greater stabilization across the majority of our accounts.

Speaker 4: During the third quarter, retail are largest vertical, representing 34.3% of revenues, increased by 2% on a sequential basis, and grew 5.1% on a EOV.

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>.

Speaker 4: Within retail vertical on a sequential basis, we witness growth from areas such as home improvement, department stores and specials.

Specialty retail team.

Speaker 4: TNT are second largest vertical represented 30.7% of our third quarter revenues decreased by 1.5% on a sequential basis and 9.9% on a year of year.

PMT, 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.

Speaker 4: On a sequential basis, we witness continued caution at some of our larger TMT customers. Here are the details.

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 <unk>.

Speaker 4: Our CPG and manufacturing represented 12.5% of our revenue in the third quarter at decrease of 11.1% on a sequential basis and 39.8% on a year of year.

Speaker 4: The decline on the sequential and euro-year basis came from some of our large customers as they re-agisted their spending levels to the current macro-in.

Large customers as they readjusted their spending levels to the current macro environment.

Speaker 4: That's it at our largest CPG customer we're witnessing stabilization and this should benefit us in the fourth quarter.

That said at our largest CPG customer we are witnessing stabilization and this should benefit us in the fourth quarter.

Speaker 4: The finance of a vertical representative is 9.4% of revenue and increase of 8.2% on a sequential basis and 20.2% on the ear of your business.

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.

Speaker 4: The growth in the quarter came from a combination of financial technology customers and new low.

Speaker 4: And finally, the other segment represented 13.1% of our third quarter of Nu and was up 6.1% on a sequence of...

And finally, the other segment represented 13, 1% of our third quarter revenue and was up six 1% on a sequential basis.

Speaker 4: The strong sequential growth was driven by both from new loboes and existing customers that span across healthcare, distribution, and the restaurant in.

The strong sequential growth was driven by both from new logos and existing customers that spanned across health care distribution in the restaurant industry.

Speaker 4: We exit at the third quarter with the total head count of 3,823 versus 3,862 employees in the second quarter of 2023, and up from 3,746 in the third quarter of 20.

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.

Speaker 4: At the end of the third quarter of 2023, our total US head count was 322 or 8.4% of the company's total.

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.

Speaker 4: This remained at the same level compared to 8.2% in the second quarter of 2023, and slightly decreased from 8.6% in the year-go quarter. Our non-US account located in Europe , North American India was 3501 or 91.

Our non U S headcount located in Europe, North America, and India was 3501 are 91, 6%.

Speaker 4: In the third quarter, revenues from our top five and top 10 customers were 36.8% and 54% respectively versus 44.5% and 61.1% in the same period of year goal risk.

In the third quarter revenues from our top five and top 10 customers were 36, 8% and 54% respectively versus 44, 5% and 61, 1% in the same period a year ago, respectively.

Speaker 4: We witness continuous diversification and greater contribution from our recently acquired.

We witnessed continuous diversification and greater contribution from our recently acquired <unk>.

Speaker 4: During the third quarter, we had it all 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.

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.

Speaker 4: Moving to the income statement, our gap gross profit during the quarter was $28.2 million or 36.4% and remain almost in chain compared to $28.3 million or 36.6% in the second quarter of 2023 and down from $32.7 million or 40.3% in the year ago.

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, 43% 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.

Speaker 4: On a non-gap 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 40.7% in the year ago quarter. The decrease in gross margin as a percentage on a year of your basis, both for gap and non-gap, was largely due to a combination of FX headwinds.

Year ago quarter, the decrease in gross margin as a percentage on a year over year basis, both for GAAP and non-GAAP was largely due to a combination of FX headwinds.

Speaker 4: cost associated with expansion in new geographies and investments in AI related expertise.

Cost associated with the expansion in new geographies and investments in AI related expertise.

Speaker 4: Non-Gaeth Ibita during the third quarter that excluded Stockway's compensation, depreciation and amortization.

non-GAAP EBITDA during the third quarter that excluded stock based compensation depreciation and amortization.

Speaker 4: Restructuring and expenses related to the geographic reorganization, transaction, 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 yearbook.

Restructuring and.

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.

Warner.

Speaker 4: Our cabinet income in the third quarter total, 0.7 million or one cent based on a basic share count of 75.5 million shares, compared to the second quarter income of $2.6 million or three cents based on a basic share count of 75.1 million and a loss of $6.7 million, or a loss of 10 cents per share based on 68.6 million basic shares in the year ago quarter.

Our GAAP net income in the third quarter totaled <unk> 7 million or <unk>.

Based on a basic share count of $75 5 million shares compared to the second quarter income of $2 $6 million or <unk>.

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.

Speaker 4: The year over year increase in gap net income was largely due to lower levels of stalphase competition and significant decrease in geographic reorganization.

Year over year increase in GAAP net income was largely due to lower levels of stock based compensation and significant decrease in geographic reorganization expenses.

Speaker 4: on a non-gap basis, in the third quarter, our non-gap net income was 5.9 million, or 8 cents per share based on 77.3 million diluted shares compared to the second quarter non-gap net income of 7 million, or 9 cents per share based on 76.9 million diluted shares, an 11 million or 15 cents per diluted share based on 71.9 million diluted shares in the year ago.

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 15 cents per.

Diluted share based on $71 9 million diluted shares in the year ago quarter.

Speaker 4: Coming to the balance sheet on September 30th, 2023, our cash and cash equivalents drove the $253.7 million, up from $246.2 million in the second 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.

Speaker 4: Coming 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.

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.

Speaker 4: For the fourth quarter, we expect our basic share count to be in the range of 76 to 77 million shares.

For the fourth quarter, we expect our basic share count to be in the range of 76 to 77 million shares and.

Speaker 4: and diluted share count to be in the range of 78 to 79.

And diluted share count to be in the range of $78 million to $79 million.

Speaker 4: That concludes my prepared remarks. Ben, we're ready to take a...

That concludes my prepared remarks, Ben we're ready to take your questions.

Speaker 5: I B.

[music].

Thank you Aneel.

Speaker 1: At this moment, once we start the Q&A session, I will first announce your name, and please unmute yourself and turn on the camera. Our first question comes from the line of Maya Kendan from Needham. Please go ahead.

At this moment once we start the Q&A session I will first start Alex for ne.

I'm pleased financially I'll stop and turn out of the camera.

Our first question comes from the line of my attendance from Needham. Please go ahead.

Speaker 6: Thanks Ben, good evening Leonard and Anil. Good job on the quarter.

Thanks, Ben Good evening, Leonard and Enel.

Good job on the quarter.

Speaker 6: Let me start with just the guidance and then any framework for how to think about fiscal 24. I imagine you have maybe a few less billing days in 4Q, so that would suggest clearly stability from 3Q to 4Q. But then as you look ahead into the early part of 2024, I imagine once you have higher billing days, so trying to get a better read on what you expect in terms of recovery as you go into 2024.

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.

From <unk> to <unk>, but then as you look ahead into the early part of 2024.

Imagine once you had higher billing days, so trying to get a better read on what you expect in terms of recovery as we go into 2024.

Speaker 4: So Wang, thanks for your question. You're right with your observation on Q4 versus Q3. And if you look at Leonard's comments about billable headcount, which is a steady increase, our flat-ish outlook, suggest, or you can extrapolate from that, is that we expect these trends 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 headcount.

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 trends 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.

Speaker 4: So right now when we look at it, we're in Medley, bullish. Now, as you know, Mike, we do one quarter at a time. So let's come back in, you know, three and a half months and give a lot of incremental color on Q1. So for now, let's just deal with Q4.

Right now when we look at it were 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.

Right.

Sure.

Speaker 6: Got it. Okay. I'll save my Jenny. I have questions for the analyst. I won't go there. Okay. My next question is if you want to see everything I asked. I'll save them for that. You know, I want to focus more on just some of the financials. So I know kind of related and maybe letter two just on the

Got it Okay I'll save my journey questions for the analyst day, So I won't go there.

My next one.

You're going to ask me.

I'll save them for that I want to call it.

More on just some of the financials, so kind of related and maybe one or two just on the.

Speaker 6: both revenue and then, of course, this extra profitability too, is where is utilization today and how much gas do you have left in the tank to expand utilization for you? You really have to crank up hiring when demand does come back to hopefully a trend level sometime in 2024.

Both revenue and then of course, the effects profitability too is where 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 I've kind of levels sometime in 2024.

Speaker 4: So Mike, in terms of utilization, we've done a good job in general. So utilization numbers obviously, have held up within our range and it hasn't changed from quarter to quarter. As you know, we've seen, we put in place a little bit more disciplined approach towards we look at our engineering headcount and as well as non-engineering headcount. Now you're right, it's a very good question.

So I think in terms of utilization we've done a good job in general so utilization numbers obviously.

And up.

Within a range and it hasnt changed.

From quarter to quarter as you know we've seen we've put in place a little bit more disciplined approach towards we have we look at our engineering head count and as well as noninterest head count now you're right. It's a very good question.

Yes.

Speaker 4: with some of the demand trends unfold and we'll of course see how it plays out.

Some of the demand trends unfolds 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.

Speaker 4: The hiring, the acquisition of talent, these are important elements.

Speaker 4: And yes, we are looking at that. But again, it's one quarter of a time, right? We have to plan on that. We have in all these countries we're now, we've got teams and we are constantly focused on some of these movements and depending upon that, we will act upon. So but yes, this is something we're just...

It's one quarter at a time right we have to plan on that.

We have in all of these countries, where now we've got teams and we are constantly focused on some of these.

So depending upon that we will act upon them.

So but yes. This is something we are discussing.

Speaker 6: Got it. Well, thank you so much. See you in a few weeks. New year. Thank you.

Got it well. Thank you so much see in a few weeks.

Thank you.

Hi, Mike Thanks for your question next.

Speaker 1: Next question comes from the line of Josh Figler from Canterbury Fisheries. Please go ahead.

Our next question comes from the line of Josh Sigler from Cantor Fitzgerald. Please go ahead.

Speaker 7: Yeah, hi guys, thanks for taking my question today and congrats on my results. Leonard, 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 logos largely driven by AI demand? Or is there a broader thought process about returning to that general digital transformation spending?

Yes, hi, guys. Thanks for taking my question today and congrats on a results later.

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.

Speaker 2: Well, Myron mentioned that we'll have much more.

Mark mentioned that we'll have much more to do brief on the AI just in two weeks in New York on though.

Speaker 2: keep debrief on AI just in two weeks in New York.

Speaker 2: You know, and on this day and we'll have a very large team there. So I will say a little bit of mystery of that, but fundamentally it's a great door opener at this point. There are multiple projects.

And on this day and we will have a very large team go 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.

Speaker 2: You notice there's something unusual even in a new statement in the financials that there's some additional investments in going on with training people. And by the way, that's also kind of address potential growth because, you know, when you take more senior people, retain them and, you know, we build even more capable teams because.

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 retain them and build even more capable teams because.

Speaker 3: In our assumption that more in two years who we train through internships or direct hire will be easier to attract or scale the maintain the large core of the technology people. So that's about it. In terms of my confidence level, basically again, I knew mentioned that one quarter of the time, but what it happens is, we give very careful statistics.

Our assumption that are more junior school trades, where internships or direct buyer would be easier to attract skilled that maintain the large core of the technology people. So that's about eight in terms of my confidence level.

So basically again I mentioned that one quarter over 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 approach. So 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 and.

Speaker 2: not only on a rate of change of the billable.

Speaker 2: but the content of the project. So AI was one part, but we're doing so much more complex work, not only in retail and the past and, you know, and CDGs, but in the broader base of the market, the manufacturing in, you know, pharmaceutical, we're getting insurance business, we're going into this, you know, the life science, we're doing so much more.

And cpg's, but in the broader base of the market do manufacturing in the pharmaceutical awaiting insurance business were going into this.

The life Science, we're doing so much more and we are able to start converting our horizontal expertise into vertical recommendations. So I see a deeper level of discussions in addition to that we will pick.

Speaker 3: And we are able to start converting our horizontal expertise into vertical recommendations. So I see a deeper level of discretion.

I'm a little bit more selective screen you know there is a what was the expression, but you know beggars can't be choosers, right, where we've been going through.

Speaker 7: frankly, tough times for the clients. Now we see that as we plan our business today, going into 2024, we'd like to bet on the partners who will carry the implementations of complex systems throughout the bigger project. We expect that our commitment is gonna be matched with their commitment to the business. So that gives me a little bit more, I would say complex comprehensive positive outlook. Understood, and that's great to hear. Clearly, as you alluded to, there's.

Sprague's lit dark times when the clients now we see that.

When our business today going into 2024, we'd like to bet on.

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 Oh, you know I would say accomplish comprehensive possibly welcome.

Speaker 2: So that gives me a little bit more, you know, I would say, complex, comprehensive, positive outcome.

Speaker 7: Understood and that's great to hear. Clearly as you alluded to, there's a lot of organic reinvestment going on in the business right now with the accelerating, visible headcount. 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.

Understood and that's great to hear.

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.

Speaker 3: Yeah, so it would be nice to tell you we have a deal coming right at the closing tomorrow, but it's probably not there yet. I'm not going to comment beyond tomorrow. But in reality, again, the market is very interesting.

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.

Speaker 2: We are becoming more selective with the deals. As I mentioned, we did a couple of deals in India, and then we started doing broader. We look at Europe . We look at the depth of the relationship with the potential, you know, best for clients.

We are becoming more selective in the deals as I mentioned that we did couple of deals in India and then we started doing broader we looked at Europe, we looked at the depth of the relationship with the potential for clients will look at Latin America, we're not giving up of course on the Indian part but.

Speaker 2: We look at Latin America. We're not giving out, of course, on Indian part, but we have a bigger roster within deeper engagement. We are also attracting more like advisory sites. Don't call me every day now, the bank is over the services.

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 capital we will deploy as you can imagine that.

Speaker 3: we're becoming more selective in the capital we will deploy, as you can imagine that the cost of capital has increased, right? So we would like to make sure we are going to get the right targets. But I'm actually, again, I see a little bit of a turn to the good, what I say, better targets rate.

The 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.

Speaker 7: Understood. That's very helpful. Thank you very much for taking my questions and looking forward to the analyst day. Thank you. Thank you

Okay understood. That's very helpful. Thank you very much for taking my questions and looking forward to the analyst day.

Thank you. Thank you.

Thank you Josh.

Speaker 1: Next question comes from the line of Brian Bergen from TD Cowan. Please go ahead.

Next question comes from the line of Bryan Bergin from TD Colin. Please go ahead.

Yeah.

Speaker 8: Hey, guys, good to see you and good to hear the momentum here. Thanks for having questions. I want to start on the new logo to enterprise so you bring in. So can you just talk about when some of these new enterprise logos in 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 this year?

Hey, guys good to see and good to hear the favorite.

Favorite 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, we 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.

Speaker 2: Well, again, Brian , what Anil mentioned, there are some additional revenues that are coming, what he called reason-blowers. Remember, in the very old time, I was talking about it.

Well again, Brian.

You mentioned there are some additional revenue start that means what she called recent blowers remember it's been a very old timer, who was talking about 85% to five where it started getting more dynamics in the similar fashion show. There is there are some payouts or they did not believe also some of the more older more mature.

Speaker 3: you know, 85 to 10 to 5, we're starting getting more dynamics in the symbols fast and show the reason.

Speaker 3: There are some payouts already happening. Also, some of the older, more mature loggers are coming back. The inventory of the technology development, which happened, let's say, a year ago, started getting to deplete, and they...

He will oversee our comments about the inventory of the.

Technology and development, which have been let's say a year ago started getting to deplete and they returned back to score competitive positioning because their gross deployment 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 surfing.

Speaker 3: So again, we see more and more engagements are coming in the form of the partnerships.

Again, we see more and more engagements are coming in the form of the partnerships.

Speaker 3: And that's been consistently a good story for us. In addition to that, we invested into SMEs and we do quite a bit of white papers and also educating our clients on the relevancy of the specific initiatives. So that's.

And that's been consistently a good story for US. In addition to live we are investing 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.

Speaker 3: And number three is, we are playing a very broad-based relationship as we invested in the more sophisticated Salesforce, which you haven't heard from me probably ever.

We are playing in a very broad base.

Relationship as we invested into more sophisticated salesforce, which you haven't emerged for me, probably whatever but I'm getting freight a little bit more satisfied. So all three things combined with what we invested into R&D and you know and accelerators started crunching going a bit more confidence of acquisition because you know.

Speaker 2: but I'm getting finally a little bit more satisfied. So all three things combined with what we invested into R&D and accelerators, start crunching on a bit more confidence of acquisition because it's not just momentum, you just hire, you've got a logger and it goes away. No, we see more corrections and stability.

Just momentum newswire.

So you've got a logo and that goes away no.

Assume more corrections and stability.

Speaker 8: OK, OK, that's good to hear. And I'll do a follow up here on kind of two of your key industries, ones that have been a little more variable for you. So as we think about tech and CPG, just on tech, can you talk first about how the conversations with some of those large tech clients are evolving and how is the outlook there? And then for the CPG, I heard the comment about the largest CPG client stabilizing.

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 you. So as we think about tech and CPG. Just on Tech can you talk first about how the conversations with some of those large tech clients are evolving and how is the outlook there and then for the CPG.

The comment about the largest CPG clients stabilizing.

Speaker 8: Do you have visibility to the balance of that bulk of business stabilizing and other CPG and manufacturing clients yet?

Do you have visibility for the balance of that bulk of business stabilizing and other CPG and manufacturing clients yet.

Speaker 2: Yes, let me start with a second. It's easy. We see more RFPs and we see more QBR discussions. And they're not just discussion on the formal level. They wouldn't go job. That tendons of those discussions is overwhelming.

Yes.

Starting with the second is easy and we see more rfps than we assume more of you know to be our discussions and they're not just discussion in the form of a level you were doing a good job. The attendance of those discussions is overwhelming and because we are at the time of a drought invested in the relationship.

Speaker 2: And because we, in the time of a drought, invest in the relationship with the broader-based teams, not just engineering team, but also the logistics guys, the marketing team, experience team. So there's a broader base of interest for us. So, and it's not just with the top one. With the top one, it's a notable difference indeed, but we see others are becoming more diversified in terms of what conversation they have with us.

With the broader based teams and then just huge new team, but also the logistics guys. The marketing team experienced team. So there is this a broader base of interest for us so.

It is not just with the top one was down one is a notable difference you need but we see others are becoming more diversified in terms of what conversations bandwidth.

Okay.

Speaker 8: That's kind of a broader base, right? And I forgot the story of the first one. So that was the CPG's half of that question. The large PMC ones, yeah.

That's that's kind of a broader base right and I forgot the first part of it.

The CPG is half of that question.

PMT once yeah.

Speaker 3: Yeah, so that's why you know the research forgot because nothing extraordinary bad is happening. So I usually the angel

So that's part of the reason I forgot because nothing extraordinarily bad has happened right.

So I usually.

Angela.

Speaker 3: People run to me when something is happening, and the number one is doing very well. And we are capturing more and more position there. And we're a preferred supplier to some extent. And again, I want to be very modest. Preferred supplier for the Giants is still not a dominant force. It's just a more contributing value.

People run to me when something happening in.

So 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 still.

Got 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 interests. You remember I mentioned to you that it was a rapid change is there a change in their own layoffs.

Speaker 3: But the other one, there were projects which were won recently. That's another interesting thing. You remember I mentioned to you that it was a rapid change? Is it their own change and their own layoffs? Again, if you're patient enough and you retain relationships, you win some programs. Now, that's an inviting change. It's not projects, it's programs. But it puts more responsibility on.

Again, if you're patient enough and you regained relationships.

You win some programs down.

That's inviting change its not projects as programs, but it puts more responsibility on us.

Speaker 3: And that's what, again, like one quarter at a time. And we have a few more weeks this time to talk because we want to make sure that those programs are financially successful. And as I mentioned before, we're really playing much more deep dive on the sustainability of those relationships. It's very important that it's not just give a few people and hope for the best. I think there's much more sustainable analytics beyond the relationship.

That's where again I mean, this is like one quarter at a diamond.

I have a few more weeks this time to talk because what it make sure that those programs are a financially successful.

As I mentioned before as you tumor we really play in much more deep dive on the sustainability of those relationship because it's very important that it's not just you know you have a few people and hope for the best assessing theres much more sustainable and Olympics beyond the relationship.

Speaker 8: Okay, that's clear. Thank you guys. See you in a couple of weeks. Thank you.

Okay. That's clear thanks, guys see in a couple of ways.

Yeah.

Thank you Brian.

Speaker 1: Next question comes from Maggie Nolan from William Blair. Maggie, you like it too.

Next question comes from Maggie Nolan from William Blair.

Your line is open.

Speaker 9: I know, I wanted to dig into that more positive outlook comments as well. I'm curious if there's any nuance between how you're looking at Europe versus North America, maybe over the next couple of quarters, just given that Europe is becoming a larger part of your business.

Hum.

And now Hi, my name is.

Wanted to dig into that more positive outlook comment 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.

Speaker 3: Yeah. So, we still have fans in Europe . You know, there's always a cycle, right? So, we put a lot more investment into the U.S. too, because it's a larger portion. We're investing into Europe , but I would tell you that I will drop success when we are going to be significantly diversified from the U.K.

Yeah. So.

We still have things in Europe.

You know 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 would tell you that I will grant success.

When we are going to be significant diversified from U K.

Speaker 3: Again, every word can say a good thing and a bad thing. So we love our UK clients, but it's also similar to the distribution of the business in the US in the early days. So we are now working with automotive supplier, manufacturing supplier, insurance companies, those businesses, which will make it much more distinct in terms of the position in Europe . So some of the projects in Europe were a bit rolled off. Some of the new projects started, but I would say that

Yeah. So everyone can say the good thing about the Greg So we love our UK clients, but it's 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.

Our bids are rolled off some new projects started but I would say that.

Speaker 2: There's a little bit of uncertainty, of course, you know, the political situation, the Middle East in addition to history or puts a little bit extra pressure as well. I'm positive, we just came back from Europe , we met quite a few, because I'm positive on the growth, but I would be a little bit more caution on the near term growth in Europe compared with my more bullish positioning on our main plans in the United.

There is a little bit over.

Uncertainty of course, you know the political situation in the Middle East in addition to eastern Europe puts a little bit extra pressure as well.

I'm positive agenda, we just came back from Europe, we met quite a few cost I'm positive on the growth, but I would be 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.

Speaker 9: But that's helpful. And then you've made some recent investments in the Salesforce. Can you just talk about how you're incentivizing wins at existing clients versus new logos, particularly in this type of environment and then in general just how the integration of some of those new hires is going?

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 when's that existing clients versus new logos.

Early in this type of environment and then in general just how the integration of some of those new hires as guy.

Speaker 3: Okay, very good. So again, I invite you even though your ugly besnoble changed you to New York. But, I mean, and the investor analysis date, in addition to great spiel about technology, we'll talk about the other aspects and.

Okay very good so again I invite you, even though you're opening the snow will change due to New York.

And Uh huh.

Investor and analyst day.

In addition to great feel about technology will talk about the other aspects and.

Speaker 3: Cells is not the least one, right? We actually have quite a good representation of cells.

The sales is not the least right we actually have quite a good group prestige also.

Speaker 3: sells people, in my opinion, and I'm not going to take the whole.

Salespeople in my opinion.

I'm going to take the whole story of the Skus you know the divided by.

Speaker 3: story of this, because you know, they divided by under-symptomers, right? So people who work on existing counts, and we've done quite well on existing gone relationship, we could have done better and we're doing better. But spring into the new plans and expanding new slides and positioning that's in you. That's something we invested in. And, you know, we recently brought on the head of the hunting

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 glasses positioning that's a new that's something we invested in.

Recently.

Brought in kind of the hunting.

Speaker 3: sales in the United States and that's started picking up as well. So the quality of approach to start turning on now, incentives, you know, it's certainly a very different disposition than regular account management or, you know, account performance itself. It's a very much driven by incentives on the performance.

Sales in the United States and that start picking up as well so the quality of approach start turning on now incentives.

It's certainly a very different disposition than a regular <unk> management or you know the.

Accounts performance itself, it's a very much driven by incentives on the performance now.

Speaker 3: Now, I'm very excited about it because I like to see when people put more bets in line with the companies. So they would like to get rewarded. It's my executive team and rewarded from something you guys never liked. It's a start-based compensation. I see sales people who are, they must put more emphasis on their reward on the performance of their...

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 with my executive team and ordered on something you guys never liked this stock based compensation issues salespeople, where they are much put more emphasis from the award on the performance of their accounts. So again, please join us on the 16th we will do more.

Speaker 7: So again, please join us on the 16s, we'll do more, but I just feel much more attached. I mean, I love my old experience with a big company's like HP and Philips, and I've seen some amazing people in a hardware business, but we're not in a product, we're not in a hardware, and I see that level of quality is coming back. Thank you.

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 our 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.

Speaker 1: Our next question comes from the pedophile line from Ryan Potter from city. Ryan, please go ahead.

Our next question comes from the telephone lines from Ryan Potter from city.

Please go ahead.

Brian I guess.

Speaker 1: Okay, not sure about the technical issue from telephone line. Let's switch to the next panelist.

Okay I'm not sure about the technical issue from Caterpillar, let's switch to the next analyst.

Speaker 1: Next one is from Kuneet Jain from KC Morgan. Kuneet, please go ahead.

Next one is from Puneet Jain from Jpmorgan.

Please go ahead.

Speaker 4: Hey, thanks for taking my question. So Leonard, can you talk about the potential of 28 new enterprise customers that you added this year? Looks like these are large companies, but is the scope and nature of work any different from what you would have done in the past? And should we expect maybe higher contribution from such clients than typical 85-10-5 model?

Hey, Thanks for taking my question.

So can you talk about like the potential 28, new enterprise customers that you added this year. It 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.

Climbs than typical 80 510 five model.

Speaker 3: Well, I would not run ahead of the numbers, right, that's expectations. Remember I mentioned before that we need to make sure that the programs are performed, right? So we have more client commitment to us.

Well.

I would not run ahead of the numbers sprite, that's expectations remember mentioned before means that we we need to make sure that the programs are performed right. So we have more client commitment to us.

Speaker 3: and we have a higher commitment to the clients. But it means that the deployment of the projects are longer and the performance of these projects are required, you know, the proven putting, not everybody will survive, obviously. There's some people are a bit also jeanery about technology now. Again.

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.

The proven pudding not everybody will survive on this where there is some people are a bit also January about technology.

Speaker 3: In some cases, we go with our partners. We want to make sure our partners also sustain their values. But in many cases, our clients look at Great Dynamics, what I always dreamed about. OK, well, you come with a partner, but what's your point of view on the world? And we make an agreement that it's a Great Dynamics business. We're obviously going to promote where we came from, but we're building much more comprehensive roadmaps.

Again.

In some cases, where we go with our partners. We wanted to make sure. Our partners also sustained their values and 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.

<unk> business, we're obviously going to promote where we came from we were building a much more comprehensive roadmaps. So I will not promise you that next quarter I can definitively say that all 24 or 20 clients will be there I expect some level of improved mortality because there are too many of them very good.

Speaker 3: So I will not promise you that next quarter I can definitively say that all 24 or 28 plans will be there. I expect some level of implementality because there are too many of them.

Speaker 3: But I would say that mid-next year, I think that contribution may grow now. That's a 10% remember, it would not be the 5%. It would be increased of this kind of recent acquisition, which has to be because you really think about it, the 85 would not work anymore. We had one year of stagnation, right? So we're gonna maintain the same course.

Once but I would say the mid next year I think that contribution mangrove now that's the 10% remember it would that be in the 5% increase of this kind of.

Our recent acquisition.

She 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 the combination of the technical capabilities technical Brewer sales.

Speaker 2: 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 pre-sales, you know, programs with the clients, and the relevancy of the logos should give us the boost into this middle of recent clients to be able to achieve this desired two-digit plus growth, as we always expect.

Programs with their clients and the relevancy of the logos should give us the boost of Louis middle of recent clients to be able to achieve this desire to digit plus growth as we've always expected from ourselves.

Speaker 10: it now. Thanks for explaining that. And many of your peers have talked about seeing margin headwinds from pricing and wage inflation dynamics, which could potentially contribute.

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.

Speaker 10: So can you share your thoughts, what you are seeing at your client base?

Can you share your thoughts what you are seeing at your client base.

Speaker 3: So, first of all, now we have a berry and granule.

So.

First of all now we have a very angry anew.

Speaker 3: And so, your friend is becoming much more clear in terms of the very detailed action items going into next year.

And Oh, So your brand is becoming much more clear in terms of the <unk>.

Very detailed action items going into next year.

Speaker 2: You know, you don't always take the wish for thinking for implementation.

You don't always take the wish for thinking for implementation.

Speaker 2: We moved from Russia to some countries in the central Europe , right? There was a bomb.

We moved from <unk>.

Russia too.

Some countries in Central Europe, there was the bulk right.

Speaker 3: Right. We moved and we continue to expand in India.

We continue to expand in India.

Speaker 2: And we need to see that margin profile to capitalize because still there's a significant contribution to India comes from the acquisitions. It's growing organically and that's why remember I suppose let me prove that I can do more organic before I can I keep job in creating companies but you probably noticed we mentioned the third center right I mean

We need to see that margin profile to capitalize because still there is a significant contribution during there comes from the acquisitions, it's growing organically and that's right nobody is positive.

With that I can do organic you're probably gonna keep germinating companies, but you probably noticed.

We mentioned the storage center rates I mean.

Speaker 3: I'm sure you don't have to be a super genius to know where the third city is. If you were in Chennai or Hyderabad, it's Bangalore, 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...

I'm sure you don't have to be the supergene use to know where the city is if you were 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.

Speaker 2: address this follow the sun strategy. The other thing is when we expand in Europe , we're becoming more selective on not going to many digitized countries.

Address this follows the same strategy and the other thing is when we expand in Europe, we're becoming more selective on not going too many digitize punches.

Speaker 3: It's just stuff called crazy. People love to collect the countries. And we have 18, right? But, you know.

Stockholm right people love to collect the country. So we have 18 right, but you know.

Speaker 2: Smaller is merrier. We can control the internship programs, training programs, maintain the depth in the office.

Smaller is merrier, we can.

And install the internship program screening progress named him as the depth in the offices, where we are I think that's another word but they'll go back to the most the hardest part it's the pricing.

Speaker 2: where we are, that's another way. But now go back to the hardest part. It's the price.

Speaker 2: Right, so we started making some calls, and those are tough calls. Again, there is always a balance. In my life, I've seen multiple banks. You can choose revenue, you can choose profits.

Right.

We have started making some calls and those are tough goals again.

There is always a bill on my 11th ship multiple pumps, you can chase revenue can chase profits.

Speaker 3: So the way to chase revenue is to chase stable, long-term revenue, at least how you plan it, and then bring the value to the client then they actually pay for it, right? We signed some really interesting contracts, but I'm not the little bowling guy too. I'm trying to be honest and I want to make sure Green Dynamics brand remains that we are going into the fair relationship.

Neither a success.

The way to chase revenues to choose stable long term revenue at least how you're planning and then bringing them down into declines.

Actually Bryan we signed some really.

Interesting conflicts, but I'm not a little more engaged to I'm trying to be honest and I'm gonna make should read dynamics brand 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 on the proper.

Speaker 3: 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 pricing position. But in some cases, we have to do some more aggressive investment into the product. And I don't like the word investment because to me, investment is technologies, people. When you invest in a customer, you invest in their ROI, not of the discounts.

Pricey positioning but in case someone 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 there are white knight of the discounts.

Again, thank you so much.

Speaker 2: Of course. So maybe we can go back and see if Ryan is still there.

So maybe we should go back and see if Brian Ryan is still there.

Speaker 1: Sure, let me try one more time. Ryan, can you please try your telephone line?

Sure, let me try one more time right.

Triad or telephone line.

See if it works.

Speaker 1: So I guess there's some technical limitation for zoom.

Okay.

There's some technical limitations hartzell pellets.

Speaker 1: Okay, at this moment, that would be all of the Q&A session for today. I will now pass the call back to Leonard for the closing remarks.

At this moment.

That would be all of the Q&A session for today.

I will now pass the call back to letter just about the closing remark.

Speaker 3: Thank you, everybody, for joining us on the call today. I'm more bullish than I am.

Thank you everybody for joining us on the call today.

I'm more bullish than I was three months ago.

Speaker 2: Our board business is rebounding and revenue is for our new lovers and recent lovers continue to grow. Our goals are career. To leverage our GigaQ Broadmap to become a billion dollar revenue company. We're using my focus on executing the stated goals. More importantly, our clients continue to place their confidence in green dynamics of building.

Our core business is rebounding and revenues for our new logo and reached the lowest continue to grow.

Those are career to leverage our <unk> 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.

Speaker 2: This is a testament of the hard work across the entire company. And I truly appreciate the contribution from each and every one of you.

This is a testament of the hard work across the entire company and I truly appreciate the contribution from each and every employee.

Speaker 2: On November 16th, we'll be hosting our first Investor and Analyst Day. I would highly recommend you.

On November 16th we will be hosting our first investor and analyst day, our device will recommend you to attend in person it.

Speaker 2: It will be a great opportunity to meet the expanded management team. We plan to delve into our capabilities and our service offerings. We plan to have dampers around generating AI. They will provide some insights into our technology that

It will be great opportunity to meet the expanded.

Management team, we plan to delve into our capabilities and our service offerings, we plan to have damaged or on generators AI that will provide some insights into our technology and that issue.

Speaker 3: I also believe the investors will find the event insightful. I'm looking forward to seeing all of you in two weeks. Thank you.

I also believe the investors will find that event insight I'm looking forward to seeing all of you in two weeks. Thank you.

Speaker 5: Ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect. Thank you. Thank you.

Yeah.

Ladies and gentlemen, this concludes today's conference call. Thank you all for participating you may now disconnect.

Yes.

[music].

Yeah.