Q4 2023 Perficient Inc Earnings Call
[music].
Operator: Ladies and gentlemen, thank you for standing by. Welcome to the fourth quarter 2023 Perficient Earnings Conference Call. At this time, all participants are in a listen-only mode.
Ladies and gentlemen, thank you for standing by welcome to the fourth quarter 2023 perfect <unk> earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised.
To ask a question during this session you would need to press star one one on your telephone.
Didn't hear an automated message advising your gains its right to withdraw your question. Please press star one one again please be advised that today's conference is being recorded I would like now to turn the conference over to Tom Hogan President and CEO. Please go ahead.
Operator: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Tom Hogan, President and CEO. Please go ahead.
Tom Hogan: Good morning, everyone. This is Tom Hogan, Perficient's president and CEO. And with me on the phone today is Paul Martin, our CFO. I'd like to thank you for your time this morning. As usual, we'll have some prepared comments, after which we'll open the call up for some questions. Paul, can you please read the safe harbor?
Good morning, everyone as Tom Hogan proficient president and CEO and with me on the call today is Paul Martin our CFO.
Thank you for your time this morning as usual will have some prepared comments after which we'll open the call up for some questions. Paul can you. Please read the safe Harbor statement.
Paul E. Martin: Thanks, Tom. And good morning, everyone. Some of the things we will discuss in today's call concerning future company performance will be forward-looking statements within the meaning of the securities laws. However, actual results may materially differ from those discussed in these forward-looking statements. We encourage you to refer to the additional information contained in our SEC filings concerning factors that could cause these results to be different than contemplated in today's discussion. At times during this call, we will refer to adjusted EPS and adjusted EBITDA. Our earnings press release, including a reconciliation of certain non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles or GAAP, is posted on our website at www.perficient.com. We have also posted a slide deck that includes a reconciliation of certain non-GAAP guidance to the most directly comparable financial measures prepared in accordance with GAAP on our website under "natural relations." Tom?
Thanks, Tom and good morning, everyone. So, let's say, we will discuss in today's call concerning future company performance will be forward looking statements within the meaning of the securities laws actual results may materially differ from those discussed in these forward looking statements. We encourage you to refer to the additional information contained in our SEC filings concerning factors that could cause these results to be.
Different than contemplated in today's discussions.
During this call we will refer to adjusted EPS and adjusted EBITDA, Our earnings press release, including a reconciliation of certain non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles or GAAP is posted on our website at www dot proficient dotcom we have.
Also posted a slide deck, which includes a reconciliation of certain non-GAAP guidance to the most directly comparable financial measures prepared in accordance with GAAP on our website under Investor Relations. Tom. Thanks, Paul Good morning, again, everybody. We appreciate your time as we discussed proficient fourth quarter and full year results and share our outlook for 2024.
Tom Hogan: Thank you, Paul. Good morning again, everybody. We appreciate your time as we discuss Perficient's fourth quarter and full year results and share our outlook for 2024. As we have previously discussed, the second half of 2023 was a challenge with extended sales cycles and a shift in client buying behavior. That said, several things have happened in recent weeks that give us optimism that in 2024, we'll return to growth, particularly in the second half. First of all, we're excited to have completed the acquisition of Smedics earlier this year. This team is incredibly skilled at the development of software that runs medical devices, and their joining Perficient makes us an even more formidable provider in the healthcare and life sciences industry. Almost all of the nearly 200 colleagues who joined Perficient are based in Romania, and with these new team members, nearly 60% of our billable headcount is now located outside of the United States.
As we've previously discussed the second half of 2023 was a challenge with extended sales cycles and a shift in client buying behavior that said several things have happened in recent weeks that give us optimism that in 2024 will return to growth.
Particularly in the second half.
First of all we're excited to have completed the acquisition of <unk> earlier. This year. This team is incredibly skilled and development of software that runs medical devices and they're are joining proficient makes us even more formidable provider in the healthcare and life Sciences industries.
Almost all of the nearly 200 colleagues, who joined proficient or based in Romania, and with these new team members nearly 60% of our billable head count is now located outside of the United States.
Tom Hogan: As a reminder, we're unique in the marketplace. We're the only firm in our space with true global depth across the United States, Latin America, and India. And our intentions long-term are for Romania to become our hub in Europe, as we replicate there what we've already built in India and Latin America.
As a reminder, we're unique in the marketplace. We're the only firm in our space with true global depth across the United States, Latin America and India.
And our intention is long term or for Romania to become our hub in Europe as we replicate them.
Are what we've already built in India and Latin America.
Tom Hogan: Another data point contributing to our confidence for 2024 was Q4 bookings, up nearly double digits on an annual basis and even stronger sequentially. As we talked about on occasion on these calls over the years, there's a strong correlation between bookings realized and revenue recognized five to six months out. The deals we want in Q4 will be ramped up to drive revenue beginning in the second quarter. The strong Q4 bookings were driven primarily by larger deals. We booked 56 deals greater than a million dollars during the fourth quarter of 2023, flat year-over-year, but sequentially up from 37 in the third quarter of 2023. While annual deal volume was flat, the size of the wins is what drove the near double-digit increase I mentioned earlier.
Another data point contributing to our confidence for 2024 with Q4 bookings up nearly double digits on an annual basis and even stronger sequentially.
As we talked about on occasion on these calls over the years, there's a strong correlation between bookings realized and revenue recognized five to six months out.
The deals we won in Q4 will be ramped in driving revenue beginning in the second quarter.
Q4 strong bookings was driven primarily by larger deals, we booked 56 deals greater than $1 million during the fourth quarter of 2023 flat year over year, but sequentially up from 37 in the third quarter of 2023.
While annual deal volume was flat the size of the wins is what drove the near double digit increase I mentioned earlier.
Tom Hogan: A final point worth sharing that underscores the momentum building is the update on the large project win I mentioned in the last call. During October, we closed a multi-year program with a client that will acquire hundreds of Perficient colleagues to support their digital transformation initiatives. The program began to ramp up in Q4, and we expect the team will be fully staffed by early second quarter. This program is an example of what we believe will be several capacity model relationships we'll gain in the coming quarters and years. These programs will help provide revenue consistency and serve as the foundation for continued project-based initiative growth.
A final point worth sharing that underscores the momentum building is the update on a large project win I mentioned on our last call during.
During October we closed a multi year program with a client that will require hunter proficient colleagues to support their digital transformation initiatives that program began to ramp in Q4, and we expect the team will be fully app by early second quarter.
This program is an example of what we believe will be several capacity model relationships will gain in coming quarters and years. These programs will help provide revenue consistency and serve as the foundation for continued project based initiative growth.
Tom Hogan: We continue to remain well-diversified from a customer, industry, and platform perspective. Healthcare and financial services remain the strongest verticals, but we're also excited about our momentum in both manufacturing and automotive. I will say clients across each of our industry verticals are expressing strong interest in our perspective and capabilities related to artificial intelligence, and this is a discipline we've had for nearly a decade. A subset of leaders within our Generative AI Innovation Group, which consists of more than 800 colleagues around the world, have been working in global blended Scrum teams developing multiple proofs of concept, client demos, and frameworks both on behalf of clients and in exploration of Additionally, we're engaged with our clients delivering significant usable AI projects. I'm talking about applications that provide personalized responses based on customer intent and natural language analytic chatbots to help the customer experience, analyze, understand, and understand customer sentiment.
We continue to remain well diversified from a customer industry and platform perspective health care and financial services remain the strongest verticals, but we're also excited about our momentum in both manufacturing and automotive.
I will say clients across each of our industry verticals are expressing strong interest in our perspective and capabilities related to artificial intelligence and this is a discipline that we've had for nearly a decade.
A subset of leaders within our general AI innovation group, which consists of more than 800 colleagues around the world have been working in global blended scrum teams developing multiple poc's client demos and frameworks both on behalf of clients and an exploration of efficiencies we can gain across internal.
Yes.
Additionally, we are engaged with our clients delivering significant usable AI projects I'm talking about applications, which provide personalized responses based on customer intent and natural language analytic Curie chatbot.
<unk> to help customer experience analyze understand and understand the customer sentiment.
Tom Hogan: I'm extremely proud of the work we've been doing with one of the largest and leading pharmaceutical companies in the world, providing AI capabilities to their clinical research. These AI capabilities provide researchers with data anomaly detection, natural language querying, generative narratives of data, and can help predict critical items like study setup. All of these AI capabilities will help provide a major global impact on health. And finally, in January, we launched our PACE framework, which provides a holistic approach to responsibility, an approach to responsibly operationalizing AI across an organization, and empowers organizations to unlock the benefits of AI while proactively addressing risks. Pace addresses the key factors in responsible Gen AI adoption, including company policies, advocacy, Controls, and Enable. Also exciting is the continual progress being made on our proprietary Envision Online platform.
I'm extremely proud of the work we've been doing with one of the largest and leading pharmaceutical companies in the world, providing AI capabilities to their clinical research teams. These AI capabilities provide researchers with data anomaly detection natural language querying guarantor of narratives of data and to help predict critical items study set.
All of these AI capabilities will help.
Provide a major global impact on health incomes.
And finally in January we launched our pace framework, which provides a holistic approach to responsibility.
And operate excuse me.
Approach to responsibly operationalize AI across an organization and empowers organization is to unlock the benefits of AI, while proactively addressing risks pace addresses the key factors and responsible Ken AI adoption, including company policies add with fees.
Controls and enablement.
Also exciting is the continual progress being made to our proprietary envision online platform the business capability Library module within the tool has grown to more than 700 defined capabilities new capabilities for introduced for marketing commerce.
Tom Hogan: The business capability library module within the tool has grown to more than 700 defined capabilities. New capabilities were introduced for marketing commerce, order management, customer service, and product information management. The platform selection module now addresses more than 8,000 system requirements, 500 vendors, and 80 different types of platforms across disciplines like order management, analytics, marketing automation, product information management, customer data platforms, personalization, BI reporting, and many, many more.
Order management customer service and product information management platform selection module now addresses more than 8000 system requirements 500 vendors in 80 different types of platforms across disciplines like order management analytics marketing automation product information management customer data platforms personalization <unk> reporting and many many more.
Tom Hogan: And finally, we're excited about the launch of Perficient's fourth employee resource group, Live Well, which is a global colleague community focused on supporting our colleagues with physical, emotional, and financial curriculums and content. LiveWell joins Women in Technology, Giving, and Cultural Connections as forums for our global colleagues to connect, collaborate, and make a difference around topics and causes they're passionate about. We continue to focus on investing in programs our colleagues express a desire for, which results in an enthusiastic and engaged workforce and leads to even greater outcomes for our enterprise customers. And with that, I'll turn things over to Paul to speak about the financial results. Thanks, Tom.
And finally, we're excited about the launch of proficiency fourth employee resource group live well.
Which is a global colleague community focused on supporting our colleagues with physical emotional and financial curriculum and content live well joins women in technology, giving and cultural connections as forums for our global colleagues to connect collaborate and make a difference around topics and cause that passionate about.
We continue to focus on investing in programs, our colleagues expressed desire for which results in an enthusiastic and engaged workforce and lease even greater outcomes for our enterprise customers and with that I'll turn things over to Paul I'll speak to the financial results.
Paul E. Martin: Let me start with the fourth quarter results. Services revenue, including reimbursable expenses, was $216.5 million in the fourth quarter, a 5% decrease over the prior year. Services gross margin, excluding reimbursable expenses and stock compensation, was 37.7% in the fourth quarter, compared to 40.8% in the prior year. SG&A expense was $40.3 million in the fourth quarter, compared to $43.7 million in the prior year. SG&A expense as a percentage of revenues decreased to 18.3 percent from 18.8 percent in the prior year.
Thanks, Tom Let me start with the fourth quarter results services revenue included Reimbursable expenses were $216 5 million in the fourth quarter, a 5% decrease over the prior year services gross margin, excluding reimbursable expenses and stock compensation was 37, 7% in the fourth quarter compared to 48.
In the prior year SG&A expense was $40 3 million in the fourth quarter compared to 43 point.
$7 million in the prior year G&A expense as a percentage of revenues decreased to 18, 3% 18, 8% in the prior year. The decrease in SG&A expense as a percentage of revenues was primarily due to lowest lower bonus expense and bad debt recoveries that occurred in the fourth quarter adjusted EBITDA was $46 7 million.
Paul E. Martin: The decrease in SG&A expense as a percentage of revenues was primarily due to lower bonus expense and bad debt recoveries that occurred in the fourth quarter. Adjusted EBITDA was $46.7 million, or 21.1 percent of revenues in the fourth quarter compared to $54.3 million, or 23.4 percent of revenues in the prior year. Immunization expense was $4.3 million in the fourth quarter compared to $6.5 million in the prior year.
Our 21, 1% of revenues in the fourth quarter compared to $54 3 million or 23, 4% of revenues in the prior year.
Amortization expense was $4 3 million in the fourth quarter to $6 five in the prior year net interest income was <unk> four and in the fourth quarter compared to <unk> 8 million of net interest expense in the prior year, primarily due to $1 2 million increase in interest income, resulting from higher cash balances and higher <unk>.
Paul E. Martin: Net interest income was $0.4 million in the fourth quarter compared to $0.8 million of net interest expense in the prior year, primarily due to a $1.2 million increase in interest income resulting from higher cash balances and higher interest. Our effective tax rate was 29.5% in the fourth quarter compared to 28% in the prior quarter, and total income was $23.2 million for the fourth quarter compared to $26.5 million in the prior year. Diluted GAAP earnings per share decreased to $0.65 per share compared to $0.74 in the prior year.
Crist rates, our effective tax rate was 29, 5% in the fourth quarter compared to 28% in the prior.
Net income was $23 2 million for the fourth quarter compared to $26 5 million in the prior year.
Diluted GAAP earnings per share decreased to 65 cents a share compared to <unk> 70 for the prior year and adjusted earnings per share decreased to 99 cents a share for the fourth quarter from $1 14 in the prior year. Please see the press release for a full reconciliation to GAAP earnings now turning to the full year services revenue, including Reimbursable expenses.
Paul E. Martin: And adjusted earnings per share decreased to $0.99 per share for the fourth quarter from $1.14 in the prior year. Please see the press release for a full reconciliation to GAAP earnings. Now turning to the full year, services revenue, including reimbursable expenses, was $892.9 million for the year ended December 31, 2023, essentially flat compared to the prior year. Services gross margin, including reimbursable expenses, in stock comp was 38% for the year ended December 31, 2023, compared to 40.2% in the prior year period. SG&A expense was $170.6 million for the year ended December 31, 2023, compared to $171.1 million in the prior year period. SG&A expenses, a percentage of revenues, decreased to 18.8% from 18.9% in the prior year.
Fences were a $192 9 million for the year ended December 2031, 2023, essentially flat compared to the prior year services gross margin, excluding reimbursable expenses and stock comp was 38% for the year ended December 31, 2023 compared to 42% in the prior year period.
SG&A expense was $176 million for the year ended December 31, 2023, compared to $171 1 million in the prior year period.
SG&A expense as a percentage of revenues decreased to 18, 8% from 18, 9% in the prior year adjusted EBITDA for the year ended December 31, 2023 was $190 7 million or 21% revenues compared to $205 8 million or 22, 2% of revenues in the prior year period.
Paul E. Martin: Adjusted EBITDA for the year ended December 31, 2023 was $190.7 million, or 21% of revenues, compared to $205.8 million, or 22.2% of revenues in the prior year period, which continues to exceed the peer group average. Amortization expense was $20.6 million for the year ended December 31, 2023, compared to $24.5 million in the prior year. That interest expense for the year ended December 31, 2023 decreased to $0.4 million from $3.2 million in the prior year, primarily due to a $2.7 million increase in interest investment. Our effective tax rate was 27.5% for the year ended December 31, 2023, compared to 25.9% in the prior year. The increase in the effective tax rate was primarily due to a decrease in the research credit benefit and an increase in the impact of stock compensation, partially offset by a decrease in the effective acquisition costs compared to the prior year.
Which continues to exceed the peer group average amortization expense was $20 6 million for the year ended December 31, 2023, compared to $24 5 million in the prior year net interest expense for the year ended December 31, 2023 decreased <unk> 4 million from $3 2 million in the prior year primarily due.
Due to a $2 7 million increase in interest income our.
Our effective tax rate was 27, 5% for the year ended December 31, 2023, compared to 25, 9% in the prior year. The increase in the effective tax rate was primarily due to a decrease in research credit benefit and an increase in the impact of stock compensation, partially offset by a decrease in the effective <unk>.
Acquisition costs compared to the prior year.
Net income for the year ended December 31, 2023 was $98 9 million compared to $104 4 million in the prior year diluted GAAP earnings per share decreased to $2 76 for the year ended December 31, 2023 compared to $2 90 in the prior year adjusted earnings per share was.
Paul E. Martin: That income for the year ended December 31, 2023 was $98.9 million, compared to $104.4 million in the prior year. Diluted GAAP earnings per share decreased to $2.76 for the year ended December 31, 2023, compared to $2.90 in the prior year. Adjusted earnings per share was $3.95 for the year ended December 31, 2023, compared to $4.28 in the prior year. Our ending billable headcount at December 31, 2023 was 5,849, including 5,578 billable consultants and 271 subcontractors. Ending SG&A headcount was $969. Our outstanding debt, net of deferred issuance costs as of December 31, 2023, was $396.9 million. We also had $128.9 million in cash and cash equivalents and $300 million of unused borrowing capacity under our credit facility.
$3 95 for the year ended December 31, 2023 compared to $4 28.
In the prior year.
Our ending billable headcount at December 31, 2023 was 5849, including 5578 billable consultants and 271 subcontractors ending SG&A head count was 969, our outstanding debt net of deferred issuance costs as of December 31, 2023 was 390.
$6 9 million, we also had $128 9 million in cash and cash equivalents and $300 million of unused borrowing capacity under our credit facility. Our balance sheet continues to leave us very well positioned to continue to execute against our strategic plan operating cash flows increased to $103 million.
In 2023 from $118 1 million in the prior year, primarily due to increased cash inflows related to accounts receivable I'll now turn the call back over to Tom for the outlook, Tom Paul purpose and expect first quarter of 2020 for revenue to be in the range of $212 million to $218 million first.
Quarter GAAP earnings per share is expected to be in the range of 31 to 35.
Paul E. Martin: Our balance sheet continues to leave us very well positioned to continue to execute against our strategic plan. Our recurring cash flow has increased to $143 million in 2023 from $118.1 million in the prior year, primarily due to increased cash inflows related to accounts receivable. I'll now turn the call back over to Tom for the outlook.
First quarter adjusted earnings per share is expected to be in the range of 74.
To 79.
Proficient expects its full year 2020 for revenue to be in the range of 925 million to $965 million.
Expect its 2024 GAAP earnings per share to be in the range of $2 64.
Tom Hogan: Thank you, Paul. Perficient expects first quarter 2024 revenue to be in the range of $212 million to $218 million. First quarter gap earnings per share are expected to be in the range of $0.31 to $0.35.
$2 77.
<unk> expects its 224 adjusted earnings per share to be in the range of $4 <unk>.
To $4 20.
And with that operator, we can open up the call questions.
Thank you.
Operator: First quarter adjusted earnings per share is expected to be in the range of $0.74 to $0.79. Perficient expects its full-year 2024 revenue to be in the range of $925 million to $965 million. It expects its 2024 GAAP earnings per share to be in the range of $2.64 to $2.77 and expects its 2024 adjusted earnings per share to be in the range of $4.05 to $4.24. And with that, Operator, we can open up the call for questions. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again.
A reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.
The first question comes from Jesse Wilson Wolf William Blair. Your line is open.
Hi, Good morning, guys. This is jesse on for Maggie.
For my first question I wanted to talk about booking.
What have you seen in the first two months of this year and how do you see the cadence of revenue growth for the full year given your comments about the second half and due to the fact that you probably have more visibility to the second quarter at this time.
Hey, good morning Jessy.
So the pipeline continues to be very robust January was a good solid booking month for us we have a number of months to go here in the quarter pipeline continues to be there we continue to see the delay though.
Operator: Please stand by while we compile the Q&A roster. The first question comes from Jesse Wilson, William Blair. Your line is open. Hi. Good morning, guys. This is Jesse on for Maggie.
Our bookings we saw in Q4.
Tom Hogan: So for my first question, I wanted to talk about bookings. What have you seen in the first two months of this year? And how do you see the cadence of revenue growth for the full year, given your comments about the second half and due to the fact that you probably have more visibility into the second quarter at this time? Hi, good morning, Jesse.
And I felt the GAAP number of deals we're still going after.
That is still a couple of months left or a month, but here in the quarter with some big deals were still chasing.
As far as revenue.
Per my comments, you really see it ramping towards the second half of the year.
I think theres a lot of great conversations, we definitely see a tailwind from our clients shifting from.
Tom Hogan: So the pipeline continues to be very robust. January was a good, solid booking month for us. We, you know, have a number of months to go here in the quarter. The pipeline continues to be there. We continue to see the delay, though, in our bookings. We saw it in Q4.
The cost Takeouts and talking more about some of that discretionary spend that we are definitely a favorable environment for proficient in the past and where.
Where we're seeing some nice trends that should give that give us some indication that we should have some nice second half ramping.
Tom Hogan: And, you know, I still think a number of deals we're still going after that. We still have a couple of months left or a month left here in the quarter with some big deals we're still chasing. As far as revenue, per my comments, you'll really see it ramping up towards the second half of the year. I think there are a lot of great conversations.
But the first two quarters here and the bookings are going to really dictate what that ramp looks like and the pace of the ramp throughout the year.
Okay.
Okay. That's helpful. And then for my follow up can you talk about your expectations for gross margin and utilization throughout the year.
Tom Hogan: We definitely see a tone from our clients shifting from cost takeouts and talking more about some of that discretionary spend that was definitely favorable environments for Perficient in the past. And we're seeing some nice trends that give us some indication that we should have some nice second half ramping. But the first two quarters here and the bookings are going to really dictate what that ramp looks like and the pace of the ramp throughout the year. Okay, that's helpful.
Wanted to understand what might be causing the headwinds to profitability. This year.
Sure so from a utilization standpoint.
The January timeframe December challenging with the with the holidays.
January usually a little slower to the ramp of some projects, but we ramp up to 80% we expect for the quarter and will continue to run the business at 80% throughout the year gross margins in the first quarter are always challenging as we have some reset after taxes and the like so.
Paul E. Martin: And then for my follow-up question, can you talk about your expectations for gross margin and utilization throughout the year? I'm trying to understand what might be causing the headwinds to profitability this year. So from a utilization standpoint, you know, the January timeframe, December is challenging with the holidays, January usually a little slower with the ramp of some projects, but we ramp up to, you know, we'll be at 80% of what we expect for the quarter, and we'll continue to run the business at 80% throughout the year. Gross margins in the first quarter are always challenging as we have some resets to taxes and the like. So margins are challenging in the first half, but we plan to ramp the gross margins to 40% by the end of the year. Yeah, Jesse, margins are generally lower in the first quarter.
<unk> are challenging in the first half, but we plan to ramp the gross margins to 40% by the end of the year.
Yes, Jesse margins are generally lower in the first quarter.
This year in particular.
We've had some higher benefit costs that will impact Q1, but.
Our overall strategy has been talking about as we continue to ramp faster offshore which has higher margins.
We're going to continue to see.
Some some improvement from that.
We will get is fairly close to to this year's margins are a little higher for the full year.
Okay. Thank you both I'll hop back in the queue.
Please standby for the next question.
The next question comes from Miami tandem with Needham Your line is open.
Paul E. Martin: You know, this year, in particular, we've had some higher benefit costs that will impact Q1. But you know, our overall strategy has been talking about as we continue to ramp faster offshore, which has higher margins, you know, we're going to continue to see some improvement from that that, you know, will get us fairly close to, this year's margins are a little higher for. Okay, thank you both. I'll hop back in the, Please stand by for the next question. The next question comes from Mayank Tandon with Needham.
Thank you good morning, Tom and Paul I wanted to double click on the second half recovery what is the level of visibility today I only ask because you've had so many head fakes across the industry. So I'm just trying to get maybe some more data points more color in terms of our client budgets that have.
They committed to a certain projects. So just want to gauge your level of confidence on that second half recovery that's implied in the guidance.
Yes, I think Mike what you are seeing is.
Mayank Tandon: Your line is open. Thank you. Good morning, Tom and Paul. I wanted to double click on the second half recovery.
A couple of things, which I alluded to in the comments first the bookings in Q4 were quite strong we see it's typically about five to six months out where we start seeing that really start to ramp. So that plays for some nice second half ramp the large program that we kicked off in Q4 can be ramped in Q2.
Tom Hogan: What is the level of visibility today? I only ask because we've had so many head fakes across the industry? So I'm just trying to get maybe some more data points, more color in terms of, you know, our client's budget set. Have they committed to certain projects? So just want to gauge your level of confidence in that second half recovery that's implied in the guidance. Yeah, I think what you're seeing is a couple things which I alluded to in the comments.
Should add some nice ramp as well to the year. We're also seeing a number of projects we were able to kick off here at the beginning of the year.
One project actually was a mid to low eight figure deal that was.
Tom Hogan: First, the bookings in Q4 were quite strong. It's typically about five to six months out where we start seeing that really start to ramp, so that applies for some nice second half ramp. The large program that we kicked off in Q4 should be ramped up in Q2. We should add some nice ramp as well this year.
Brought down to a seven figure deal that we continue and are very.
I'm very hopeful that will continue to ramp throughout the year, which will give us a nice second half ramping as well. We also have a number of deals. We're chasing like we were for the daily relented October we're hopeful to have one of those deals also Don here by mid year.
Tom Hogan: We're also seeing a number of projects we were able to kick off here at the beginning of the year. One project actually was a mid to low eight-figure deal that was brought down to a seven-figure deal that we continue and are very hopeful that will continue to ramp throughout the year, which will give us some nice second half ramping as well. We also have a number of deals we're chasing like we were for the deal we were in in October.
A year, which will give us some ramp for the second half not to mention that.
Alluded to earlier, we definitely see a different conversation with our clients.
Budgets opening up here and having conversations now about second half projects.
<unk> are more in line with our spending for them discretionary side versus just cost takeout. So all those things together.
Tom Hogan: We're hopeful to have one of those deals also done here by mid-year, which will give us some ramp for the second half. Not to mention, as I alluded to earlier, we definitely see a different conversation with our clients about budgets opening up here and having conversations now about second half projects that are more in line with spending for the discretionary side versus just cost takeout. All those things together give us insight into what the second half looks like. Now the question, ultimately, is what that ramp looks like.
Is what really gives us the insight to what the second half looks like now the question ultimately is what that ramp looks like is it.
That ramp that we see at the top end of our range for the second half of the year, which will give us a really nice growth number for the year I think compared to our peer groups or is it going to be a little bit more waver as we saw in that 2023.
And quite honestly time will tell for the next couple of quarters.
Tom Hogan: Is it the ramp that we see at the top end of our range for the second half of the year, which will give us a really nice growth number for the year, I think, compared to our peer groups? Or is it going to be a little bit more volatile, as we saw in the 2023 period? And quite honestly, time will tell for the next couple of quarters. Got it. That's a very helpful color.
Got it Okay. That's very helpful color and then as it.
Quick follow up I wanted to get a sense of the conversations youre, having with your clients around pricing and then that ties into sort of the revenue trajectory from.
What you can push on the utilization side I think you mentioned, Tom 80%, but just wanted to get a sense if thats the number for the full year or is that where you're progressing towards and then last but not least.
Paul E. Martin: And then as a quick follow-up, I wanted to get a sense of the conversations you're having with your clients around pricing, and then that ties into sort of the revenue trajectory from what you can push on the utilization side. I think you mentioned 80%, Tom, but just want to get a sense of whether that's the number for the full year, or is that where you're progressing towards? And then last but not least, are you actually hiring organically today, or is the headcount increase that we saw in the fourth quarter all driven by the acquisition? The acquisition was a big part of the Q4 headcount increase. There are a couple different things in there Mike as far as the I, clients, and what we're seeing from the revenue perspective.
Are you actually hiring organically today or is the head count increase that we saw in the fourth quarter all driven by the.
Acquisition.
Acquisition was a big part of the Q4 head count increase.
A couple of different things there.
As far as E.
Clients and what we're seeing from the revenue perspective.
It definitely is something that I think will work too in the second half of the year.
The question.
When I think about.
The types of deals that we're going after right now and the ramping of that great New talent, we brought into Q4.
Paul E. Martin: You know, it definitely is something that I think we'll work on in the second half of the year. I think that the question is, when I think about the types of deals that we're going after right now and the ramping of the great new town we brought in in Q4, I'm just not really sure what that growth curve is gonna look like. So, Paul, do you wanna?
I'm, just not really sure what that growth curve is going to look like so Paul you want to.
Yes, so we continue to manage the head count to 80% so so with.
The numbers in Q1 ramping throughout the year the head count growth will really start picking up more in Q2, three and four.
Paul E. Martin: Yeah, so Mike, we continue to manage the headcount at 80%, so with the numbers in Q1 ramping throughout the year, the headcount growth will really start picking up more in Q2, 3, and 4. Okay, and then, just to be clear, do you still have any gas left in the tank to drive utilization higher, or are you already at levels where you want to sustain? And then I also just wanted to get your comments, Tom, on pricing. I think that was the other part of the question.
Okay, and then do you still have just to be clear do you still have any gas.
Gas left in the tank to drive utilization.
Higher or are you already at levels, where you want to sustain and then also just wanted to get your comments that comment on pricing.
The other part of the question yes.
So utilization I think we're in a good spot.
We're at a place where around 80% in the United States will maintain that.
There is a little lower so we think all of our global utilization together will be at 80% for the organization.
Paul E. Martin: Yeah, so utilization, I think we're in a good spot. We're at a place where around 80% of the United States will maintain that. Utilization is a little lower, but as we think of our global utilization, together, we'll be at 80% for the organization. We'll be there in Q1, like I mentioned, a little slower in January. From a pricing standpoint, keep in mind that project-based, the deals that we're working on, allow us to really have a very flexible pricing model that, you know, we're closing deals, three- to six-month-type projects, which allows us to really make sure we're pricing appropriately based on our costs. So, we'll continue to pass on, as we need to, the pricing model to maintain the margins in the United States.
We'll be there in Q1 like I mentioned, a little slower in January from a pricing standpoint keep in mind that the project base.
The deals that we're working on allows us to really have a very flexible pricing model that we're closing deals three to six month type projects, which allows us to really make sure we're pricing appropriately based on our cost. So we will continue to pass on as we need to that pricing model to maintain the margins then.
I would state, but keep in mind really where we have the the pricing levers as well as we leverage our global teams. So our utilizing our teams in India leveraging our teams in Latin America allows us to be competitive for a price standpoint, obviously the margins are nice in those regions as well, where we don't have to sacrifice on pricing.
Paul E. Martin: But keep in mind, really where we have the pricing leverage is where we leverage our global teams. So, utilizing our teams in India and Latin America allows us to be competitive from a price standpoint. Obviously, the margins are nice in those regions as well, where we don't have to sacrifice pricing in the United States because we can get to the price target utilizing our global headcount. So, we shouldn't see an adverse impact on margins because we can be price sensitive utilizing our global network. Thank you so much.
State because we can get to the price target utilizing our global head count. So we shouldnt see really an adverse impact to margins because we can be price sensitive utilizing our global network.
Great. Thank you so much.
One moment for the next question.
The next question comes from Brian Ken Slinger with Alliance Global Partners. Your line is open.
Great. Thanks, so much for taking my questions I.
Operator: One moment for the next question. The next question comes from Brian Kinstlinger with Alliance Global Partners. Your line is open.
I'm wondering first if you can speak to the pricing and wage trends, especially as it relates to new wins and new hires.
Brian David Kinstlinger: Great, thanks so much for taking my questions. I'm wondering first if you can speak to the pricing and wage trends, especially as it relates to new wins and new hires. Yeah, I mean pricing is pretty aggressive right now, but I would say we're not seeing tremendous downward pressure. I think ABR essentially was flat quarter over quarter.
Yes.
Pricing is pretty.
Aggressive right now, but I would say, we're not seeing a tremendous downward pressure I think ADR essentially was flat quarter over quarter.
We're not seeing that we're going to have to really get price aggressive to win deals. Once again as we continue to shift to our global teams, that's really where the conversation comes in on price versus having to get aggressive on individual avr's.
Tom Hogan: You know, we're not seeing that we're going to have to really get aggressive on price to win deals. Once again, as we continue to shift to our global teams, that's really where the conversation comes in on price versus having to get aggressive on individual ABR. And then, thank you.
And then thank.
Thank you and then on the.
Tom Hogan: And then, on the large wins that you've discussed, are they with existing customers, where you're replacing slightly smaller projects with larger projects, or are they new customers generally? Not necessarily replacing smaller projects with big projects; I think expanding the footprint within our clients is a big part of it. We have some nice new logos as well, but our thesis on growth has always been land and expand, building relationships. You see that in our top 50 accounts, which continue to grow year over year in the relationship as well as the size of the relationship. So the majority is expanding the current footprint within our current clients. And Brian, as we talked about, there was also, in the quarter, the big win in health care, you know, of a, you know, 100 plus person project. So it's a mix of both.
Large wins that you've discussed are they with existing customers, where you are replacing slightly smaller projects with larger projects or are they new customers generally.
Not necessarily replacing smaller project with a price that they are expanding the footprint within our clients is a big part of it we have some nice new logos as well.
Yes.
Our thesis on growth has always been land and expand building relationships you see it in our top 50 accounts to continue to grow year over year in the relationship as well as size of relationship.
So the majority is expanding current footprint within our current clients.
And Brian as we talked about there was also in the quarter the big win in health care.
Okay.
100, plus person projects. So it's a mix of both but as Tom said most of the deals themselves were.
Paul E. Martin: But as Todd said, most of the deals themselves were existing clients, which is consistent with how we run our business. Great. My last question on the first quarter guidance... Typically, the fourth quarter has fewer billable days.
Existing clients, which is consistent with how we run our business.
Great. My last question on the first quarter guidance.
For the fourth quarter was less billable days, you've got a large project ramping you've got an acquisition that is going to give a full quarter as opposed to I think a partial quarter.
Brian David Kinstlinger: You've got a large project ramping up. You've got an acquisition that's going to give you a full quarter, as opposed to, I think, a partial quarter. I'm just wondering, at the low end of guidance, is it that you have projects that are falling off and a lack of wins in the middle of last year that are replacing them? I'm just wondering, typically, there's not that big of a drop from the fourth quarter to the first quarter. If you can help me understand that,
I'm just wondering at the low end of guidance is it that you have projects that are falling off and a lack of wins in the middle of last year that are replacing I am just wondering typically there is not that big of a drop from the fourth quarter to the first quarter. If you can help.
Help me understand that thank you Garrett.
Not a full quarter with the acquisition.
Tom Hogan: Thank you. Sure, I think it's not a full quarter with the exit. Puneet Jain, Surinder Thind, Brian Kinstlinger, Paul Martin, Perficient Inc., perspective there. But quite honestly, it's just a ramp that we saw in January. What you're seeing there is, you know, as we end projects, start the next project, and that calendar year. Some years are very seamless, and they continue to move from one calendar cycle to the next. Others, we see some challenge of clients being ready to onboard and bring people into projects, and that really is what you're seeing there. So it's not necessarily understanding where people are going to go; it's really ramping them into the current engagements that we know about. I think clients have been a little more cautious, particularly early in the quarter, on ramping up. Project Size
So just perspective there.
Quite honestly, it's just a ramp that we saw in January on what Youre seeing there is.
As we end projects start next projected that calendar year.
Some years, it very seamless and they continue to move from one calendar cycle.
Others, we see some challenge of of clients being ready to onboard and bring people into projects and I really liked what youre seeing there. So it's not necessarily understanding where people are going to go it's really ramping them into their current engagements that we know about.
I think clients have been a little more cautious, particularly early in the quarter on ramping up <unk>.
Project size. So as a result of that we had some delays that affected the Q1 estimate.
Great. Thank you guys.
Please standby for the next question.
The next question comes from Vincent Colicchio with Barrington Research. Your line is open.
Tom Hogan: So, you know, as a result of that, we had some delays that affected the Q&A. Great. Thank you, guys.
Yes, Tom how do you feel about the direction of client budgets is it still sort of.
Difficult to assess that.
Yes.
Vincent Colicchio: Please stand by for the next question. The next question comes from Vincent Colicchio with Barrington Research. Your line is open.
It's difficult to assess I will say if there is a definite.
More optimistic tone, though and the conversations we're having so we'll see when the rubber hits the road as far as the buying process, but as we're seeing right now projects that we're seeing delayed in 2023, we're definitely seeing reengagement in and discussing when to ramp those projects up which is good which is the lead.
Tom Hogan: Yeah, Tom, how do you feel about the direction of client budgets? Is it still sort of difficult to assess that? You know, it's difficult to assess.
Tom Hogan: I will say that there's a definite... more optimistic tone, though, in the conversations we're having. So, you know, we'll see when the rubber hits the road as far as the buying process goes, but as we're seeing right now, projects that we were seeing delayed in 2023, we're definitely seeing re-engagement and discussing when to ramp those projects up, which is good, which has to lead to closing those and having some bookings associated with them. I'll also say, and I mentioned earlier, that a lot of the conversations we're having are regarding optimization of operations, cost takeouts. We are seeing a return to conversations regarding more discretionary spend, more revenue-generating spend with customers, and projects that were delayed in 2023 because they wanted to hold back. We're seeing more engagement around that in 2024. But, as I keep saying, I want to see the rubber hit the road and see the bookings come true.
Two closing those and having some bookings associated with them I will also say and I mentioned earlier that a lot of the conversations we're having we're regarding optimization of operations. The cost Takeouts. We are seeing a return to conversations regarding more discretionary stand more revenue generating spend with customers projects that were delayed.
2023.
<unk>.
Because they wanted to hold back we're seeing more engagement around that in 2024.
But as we as I keep saying I want to see the rubber hit the road and see the bookings come through but the tone from our clients definitely is becoming more optimistic here in the late part of 2023 early part of 2024.
And question on the acquisition side should we expect you to be active I think you usually do three three year, we'd be back to that this year end.
Will there be a theme to it will you be doing some eastern European deals for example.
Tom Hogan: But the tone from our clients definitely is becoming more optimistic here in the late part of 2023 and early part of 2024. And a question on the acquisition side: should we expect you to be active? I think you usually do three a year.
We are active.
We're always looking for <unk>.
Great acquisition to really benefit our portfolio and then geographic I will say that Europe is of interest and we're in conversations and looking at where we could add to our portfolio in Europe, all that being said.
Tom Hogan: Will you be back to that this year, and will there be a theme to it? Will you be doing some Eastern European deals, for example? We are active. You know, we're always looking for a great acquisition to really benefit our portfolio and then geography.
Yes, we were.
We are very acquisitive, and we will continue to be so in 2024.
So we'll have something done in Q2, but a long way to go with nothing too.
<unk> right now, but we are targeting we'd like to have something done in Q2, but we will see what happens in conversations but nothing else really to report at this point.
Tom Hogan: I will say that, you know, Europe is of interest, and we are in conversations and looking at what we could add to our portfolio in Europe. All that being said, yes, we are very inquisitive and will continue to be so in 2024. Hopefully, we'll have something done in Q2, but, you know, a long way to go with nothing to, you know, eminent right now, but we are targeting. We'd like to have something done in Q2, but we'll see what happens in the conversations, but nothing else really to report at this point. Thanks, Tom. Please stand by for the next question. The next question comes from Jack Vander Arda with the Mixing Group.
Thanks, Tom.
Please standby for the next question.
The next question comes from Jack Vander <unk> with Maxim Group. Your line is now open.
Okay, Great Good morning, Tom and Paul Thanks for taking my questions.
So I believe it's been covered a little bit, but just just so I can I can be clear last quarter. There was some commentary regarding some delayed project starts and maybe customer buying decisions, but there was no major project called or cancellations.
Operator: Your line is now open. Okay, great. Good morning, Tom and Paul. Thanks for taking my questions. Um, Tom, so I believe it's been covered a little bit, but just so I can be clear, last quarter there was some commentary regarding some delayed project starts and maybe customer buying decisions, but there were no major project halts or cancellations. Do you feel like visibility and just things in general have improved since last quarter? Thanks. No worries. Good morning.
Do you feel like visibility and just things in general have has improved since last quarter.
No.
Good morning, I'm not sure about since last quarter quite honestly I think it's.
It's the same as last quarter I think we have some good insight to your point, we haven't seen major cancellations were not in conversations there's always lumpiness of this business a little bit but.
Tom Hogan: I'm not sure about since last quarter. Quite honestly, I think it's the same as last quarter. I think we have some good insight. To your point, we haven't seen major cancellations. We're not in conversations.
I don't see any.
Major cancellations.
Horizon knock on wood.
The conversation, though that we've always had is really more around delays and then we continue to have insight into the pipeline.
Tom Hogan: You know, there's always a little lumpiness in this business, a little bit, but I don't see any major cancellations on the horizon, knock on wood. The conversation, though, that we've always had is really more around delays, and then we continue to have insight into the pipeline. I keep going back to what we saw in Q4 2023.
I keep going back to what we saw in Q4 2023, I would like to see a change in this first half is is moving forward with these buying decisions. So.
The insight I would say is is the same remains the same.
And the difference being is a bit more of a positive tone, but we'll see where that turns here towards the first half of 2023 and the bookings.
Tom Hogan: I'd like to see a change in this first half as we move forward with these buying decisions. So, you know, the insight, I'd say, is the same, remains the same. And the difference is a bit more of a positive tone, but we'll see where that turns here towards the first half of 2023 in the book. Okay, great. And then maybe just a follow-up, maybe for either Paul or Tom.
Okay, Great and then maybe just a follow up maybe for either Paul or Tom.
Yes, just wanted to I think a few quarters ago, you guys were talking about organic growth and longer term organic growth targets.
Just given your comments on the bookings strength.
Do you see the potential to support a double digit organic growth rebound towards the back half of the year or just heading into 2025, just what's your confidence or overall plan around organic growth okay.
Tom Hogan: You know, just one of the I think a few quarters ago, you guys were talking about organic growth and longer-term organic growth targets. Just given your comments on the booking strength, do you see the potential to support a double-digit organic growth rebound, you know, towards the back half of the year or just heading into 2025? Just what are your comments or overall plan around organic growth? Thanks.
So the long term thesis of the business is not does not change.
Provided and produced.
With our peers when you think of a like for like business of our non U S based business.
Teens to 20% type grow at 30% growth.
Tom Hogan: So the long-term thesis of the business does not change. You know, we have provided and produced with our peers when you think of a like-for-like business of our non-US based business for teens to 20% type growth, 30% growth, you know, a number of years ago. As we continue to grow, we continue to see that we will see that high teens to low 20s for non-US based and then single-digit in the US. Will we get there in 2024? I think that may be aggressive.
Three years ago.
As we continue to grow.
We continue to see that we will see that high teens to low twenties for non U S. Based and then single digit in the U S.
We get there in 2024.
I think that may be aggressive I think from all the conversations we're having the pipeline what were seeing at the macro level were favorable to 2025, returning to those volumes, where we be in the double digit organic growth perspective.
Tom Hogan: You know, from all the conversations we're having about the pipeline, what we're seeing at the macro level, you know we're favorable to 2025 returning to those volumes where we are in the double-digit organic growth perspective. There's a lot of variables in there as far as the macro is concerned, but that is the thesis of the business, and you know I'd like to think we are on that run towards the second half of the year, but it's not going to be implied, obviously, by an organic number for 2024. But if we can get some of these bookings in, we start seeing the discretionary spend come back. You know, 2025, I think is a good environment for Perficient. Now Jack, I think from our view, digital transformation is still in the relatively early innings, and one of the things we've seen is that at some level, it's discretionary as to timing, but there's big ROI in the projects that we do, so eventually, they get funded, and when the spigot gets turned back on in a meaningful way, I think we feel very well about how we are. Okay, excellent. I appreciate the color, guys.
There's a lot of variables in there as far as the macro but that is the thesis of the business and I'd like to think we are at that run rate towards the second half of the year, but it's not going to be implied obviously have a an organic number for 2024, but if we can get some of these these bookings and we start seeing the discretionary spend come.
Back two.
2025, I think is a good environment for proficient Jack I.
I think from our view digital transformation is still in the relatively early innings and one of the things. We've seen is there's been all this uncertainty is at some level, it's discretionary as to timing, but theres big up ROI in the projects that we do so eventually they get funded and when the when the spigot gets turned back on in a meaningful way.
We feel very well about how we're positioned.
Okay excellent I appreciate the color guys. Thank you.
Yes.
One moment for the next question.
The next question comes from Puneet Jain with Jpmorgan Your line's open.
Hi, Thanks for taking my question.
Operator: Thank you. One moment for the next question. The next question comes from Puneet Jain with J.P. Morgan. Your line is open.
So I wanted to ask.
Also wanted to ask about visibility.
This years.
Puneet Jain: Hey, thanks for taking my question. So I want to ask about visibility into this year's revenue number. How much of the full-year guidance, maybe at the midpoint or at the low point, is already under contract? And also, how large is that large health care client? I think, Paul, you mentioned 100 people.
<unk> numbers, how much of the full year guidance, maybe a dumb mcmoran Derrick the low point is already under contract.
And also how large is that.
Now lets healthcare client I think Paul you mentioned.
People so.
Is it fair to assume that the contract should be about 10 to 15 million.
Tom Hogan: So is it fair to assume that the contract should be about 10 to 15 million in annual revenue? To the insight, Puneet, keeping in mind that our project length is typically less than six months, so I think we have insight from a pipeline perspective. However, from a backlog perspective, it would be abnormal for us to have the majority of the range already booked. It's just not the business we run.
For Luna.
So the insight puneet.
Keeping in mind that our project length is typically less than six months. So I think we have insight from a pipeline perspective.
However from a backlog perspective.
There'll be abnormal for us to have the majority of the range already.
But it's just not the business they run I.
Tom Hogan: I would say we have a line of sight to where we can and will grow the organization, but obviously, we have a lot of work to do to capitalize on the insights we know about business and the pipeline that we have. In regards to the second part, yes, so in regards to the health care account, that's going to ramp up to notionally a couple hundred people. So obviously, it's a nice-sized project.
I would say we have line of sight to where we can and will grow the organization, but obviously a lot of work to do to capitalize on the insights we know about business in the pipeline that we have in regards to the second part yes. So in regards to the health care account, that's going to ramp into the.
Notionally a couple hundred people.
So.
Paul E. Martin: It's been ramping since probably October or November and should be fully ramped for the pieces that we have under contract by the end of the quarter, and there are also additional opportunities out there. And just for perspective, the challenge with ramping is more at the client level than it is at our level. You know, we have the ability to ramp much faster.
Obviously, it's a nice sized project its been ramping starting probably in October our.
Our November and should be.
Fully ramp for.
The pieces that we have under contract by the end of the quarter and there is also additional opportunities out there with that customer and just for perspective.
The challenge on the ramping is more at the client level. Then it is our level, we have the ability to ramp much faster as a matter of the decline to be able to consume the talent that we're providing as well as they've actually decided to move out one of the majors from that relationship. So there is some knowledge transfer.
Paul E. Martin: It's a matter of the client being able to consume the talent that we're providing, as well as they've actually decided to move out one of the majors from that relationship. So there's some knowledge transfer and shifting of work, shall we say, from this other organization to us, which is taking place as well. So the ramp isn't fully dictated by us, which is why we're also seeing a little bit slower ramp than we initially anticipated as the client prepares to be able to absorb our talent. Got it, got it.
And.
Shifting of work shall we say from this other organization to us which is taking place as well so the ramp isn't fully dictated by US which is why we're also seeing a little bit slower ramp than we initially anticipated as the client prepares to be able to absorb our team.
Gotcha Gotcha.
Puneet Jain: And it's nice to see an addition in Romania. Um, So my question is, when you got into Latin America through the PSL acquisition in 2020, that was an absolute home run for Perficient, like that business grew so much. So now that you are getting into Central Europe, can you talk about what client conversations look like? It could be a little bit early, but are you seeing anything or what you expect for Ramp in the Romanian location? I agree, by the way, Puneet. I agree that Latin America was a home run and am looking forward to step into the batter's box to keep that analogy going and hit another home run. I will say that it is early.
And.
It's nice to see like a addition in Romania.
Sure.
So my question is like when you got into Latin America, two PSL acquisition alright, believing.
That was an absolute homerun for Fisher.
That business grew so much.
So now that you are getting into central Europe, the new talk about like what client conversations looked like it could be a little bit early.
But are you seeing anything or what do you expect for example in Romania.
Patients.
I agree by the way if anyway I agree that Latin America was a homerun and looking forward to step into the Batter's box to keep that analogy going and hit another homerun I will say it is early.
Tom Hogan: We just finished that acquisition here a month or so ago. I will say, though, that a number of our clients are quite interested in us now having a foothold in Europe. Most of our U.S.-based customers have some – large fortune organizations have some European presence. They have been asking for our ability to service them in Europe. Also, there were some nice relationships that came with Medix that were interested in representing the full portfolio of Perficient offerings to them as well. So I think that bidirectional excitement is really there.
We just finished that acquisition here a month or so ago I will say, though that a number of our clients are quite interested in now is having a foothold into Europe.
Our U S based customers have some.
A large fortune organizations have some European presence and they've been asking for our ability to service them in Europe.
Also there were some nice relationships that came with <unk> that we're interested in representing the full portfolio of proficient offerings too as well. So I'd think that bi directional excitement is really there.
Tom Hogan: As I mentioned – once again, it is still early, still in the conversation phase, but I think Europe is going to be a nice place for us to hit another home run for Perficient. It will take a little bit of time. Latin America was great through some acquisitions, and I am really excited about the team that comes from Medix, very highly-talented engineers that are right now focused on MedDevice, but we are really excited about bringing different areas of our portfolio into that region. And I think, Puneet, similar to what we did with PSL, we have a beachhead, so to speak, now in Central Eastern Europe, similar to what we did, as I said, with PSL.
Once I mentioned once again it is still early still in the conversation face, but I think Europe is going to be a nice place for us to hit another homerun for proficient it will take a little bit of time Latin America was great through some acquisitions.
I'm really excited about the team that comes through <unk> very high talented engineers that right now are focused on med device, but we're really excited about bringing different areas of our portfolio into that region.
And I think similar to what we did with with PSL.
We have a beachhead so to speak now.
Central Eastern Europe, similar to what we did as I said with PSL.
Paul E. Martin: Yeah, so we fully intend, I think, to build that out, as Tom said in his opening remarks, and I think that's a big opportunity. Okay, thank you. I have no further questions at this time. I would now like to turn the call back to Tom Hogan for closing remarks. All right, well, thank you, everybody. I look forward to connecting with you shortly. In the next couple of months, we'll talk about Q1 and where we look for Q2.
Yes, so we.
Fully intent I think.
Build that out as Tom said in his opening remarks, and I think that that's a big opportunity for us.
Okay. Thank you.
I show no further questions at this time I would now like to turn the call back to Tom Hogan for closing remarks.
Alright, well thank you everybody.
Look forward to connecting here shortly.
The next couple of months to talk about Q1, and where we look for Q2, so have a great day everybody. Thank you.
Tom Hogan: So have a great day, everybody. Thank you. Thank you for your participation in today's conference call. This does conclude the program. You may now disconnect. Thanks for watching!
Thank you for your participation in today's conference call. This does conclude the program you may now disconnect.
Okay.
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Okay.
Good.
Yes.
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Okay.
Thank you.
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