Q3 2024 Genpact Ltd Earnings Call
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Okay.
Good day, ladies and gentlemen, welcome to the 2024 third quarter Genpact Limited earnings Conference call. My name is Sherry and I will be your conference moderator for today.
At this time all participants are in a listen only mode. We will conduct a question and answer session towards the end of this conference call. As a reminder, this call is being recorded for replay purposes. The replay of the call will be archived and made available on the IR section of Gentex website.
Speaker Change: Now I'd like to turn the call over to Krista Bessinger head of Investor Relations at Genpact. Please proceed.
Speaker Change: Thank you Sri good afternoon, everyone and welcome to Genpact Q3, 'twenty 'twenty four earnings conference call.
Speaker Change: We hope you've had a chance to read our earnings press release posted on the Investor Relations section of our website Genpact dotcom.
Speaker Change: Today, we have with us BK, Kalra, President and CEO, and Mike Wiener Chief Financial Officer.
Speaker Change: BK will start with a high level overview of the quarter and then Mike will cover our financial performance in greater detail before we take your questions.
Speaker Change: Please note that during this call we will make forward looking statements, including statements about our business outlook.
Speaker Change: Strategies and long term goals.
Speaker Change: These comments are based on our plans predictions and expectations as of today, which may change over time.
Speaker Change: Actual results could differ materially due to a number of important risks and uncertainties, including the risk factors in our 10-K and 10-Q filings with the SEC.
Speaker Change: Also during this call we will discuss certain non-GAAP financial measures.
Speaker Change: We have reconciled those to the most directly comparable GAAP financial measures in our earnings press release.
Speaker Change: These non-GAAP measures are not intended to be a substitute for our GAAP results.
Speaker Change: And finally this call in its entirety is being webcast from our Investor Relations website.
An audio replay and transcript will be available on our website in a few hours.
BK Kalra: And with that I'd like to turn it over to BK.
BK Kalra: Thank you Christoph.
BK Kalra: Hello, everyone and thank you for joining us today.
BK Kalra: I am pleased to report another strong quarter with.
BK Kalra: Accelerating revenue growth and continued market share gains.
BK Kalra: Revenue reached one point to $1 billion.
BK Kalra: Up 7% year over year above the high end of our guidance range.
BK Kalra: Excellent writing growth driven by data.
BK Kalra: Yes.
BK Kalra: And he'll be supporting growth from digital operations.
BK Kalra: Gross margin of 35, 6%.
BK Kalra: Adjusted operating income margin of 17, 6% also exceeded our expectations as we invest to drive growth, while also delivering operating efficiency.
BK Kalra: We talk a lot about execution here that genpact and we are equally focused on innovation.
BK Kalra: Both are delivering with those.
BK Kalra: I'll give you some color on innovation and how it is leading to accelerating growth.
BK Kalra: We are now on track to deliver 6% revenue growth in concrete on before.
BK Kalra: At the midpoint up from 2% in 2023.
BK Kalra: Adjusted EPS expected to grow faster than revenue for the food you aim at rules.
BK Kalra: Relentless execution on our three plus one framework is delivering results.
BK Kalra: And we will continue to build our execution and normally it shouldn't marcello with a sharp focus on partnerships.
BK Kalra: Comprehensive deep ethic AI solutions.
BK Kalra: Simplification.
BK Kalra: And the plus one in our three plus one framework, which is about establishing genpact.
BK Kalra: Our own best credential for AI led transformation.
Let me walk you through the key highlights on each.
BK Kalra: First on partnerships.
BK Kalra: We continue to see a meaningful opportunity to accelerate revenue growth as we increased the strength of our partner relationships.
BK Kalra: We started ramping investment in our partnership organization at the beginning of the year and continue to make meaningful progress.
BK Kalra: We have made a number of important announcements since our last earnings call.
BK Kalra: I'll highlight a couple of recent ones.
BK Kalra: The first is our proprietary <unk> data hub.
BK Kalra: By data <unk> data intelligence platform.
BK Kalra: <unk> <unk> solution provides cfos and their teams with faster access to accurate data to improve decision, making and boost operational efficiency.
BK Kalra: And we are very proud to have achieved Jamie I competency in.
BK Kalra: WNS consulting services.
BK Kalra: There is a significant accomplishment and we now hold a full suite of data analytics machine learning AI and Jamie I comprehensive available with AWS.
Second on data.
BK Kalra: Our focus on delivering comprehensive solutions.
BK Kalra: It's driving accelerating growth.
BK Kalra: Revenue up 9% year over year more than double our growth in the second quarter.
BK Kalra: Both innovation and execution are at play here.
Speaker Change: Jamie I significantly expanding our total addressable market.
Speaker Change: While the absolute numbers are still small Jamie I bookings were up meaningfully quarter over quarter.
Speaker Change: And now have approximately hundred could be Jamie I solutions in production environments with clients.
Speaker Change: Either deploy end up going live.
Speaker Change: Up more than 60% versus the previous quarters.
Speaker Change: Jamie is not just about productivity, it's about generating long term value.
Speaker Change: By combining the power of Genpact advance technology expertise.
Speaker Change: Industry knowledge and operational excellence, we are in Walgreens clients to accelerate their Jimmy I journeys and achieve transformative outcomes.
Speaker Change: This innovation will that'd be hard of the AI maybe hosted in early October.
Speaker Change: The event brought together more than 100 clients and partners to learn about the latest advances in Denver.
Speaker Change: AI machine learning big data and analytics at Genpact.
Speaker Change: The team was awesome.
Speaker Change: No.
Speaker Change: With a specific focus on how genpact is stunning.
Into direct business outcomes for clients to date.
Speaker Change: We are proud that a number of our valued clients and partners what onstage B Sysco foods and granted solutions resolution life or others and of course, our clients who shared how our solutions are driving meaningful value in their organizations.
Speaker Change: I'll give you a few examples.
Maldon Lee's international one of the worlds largest CPG companies.
Speaker Change: Talk about the Genpact CFO accent hub that provides real time predictive insights.
Speaker Change: With a conversational interface and recommended mixed but actions.
Speaker Change: Our <unk> solution built on Google exam in April streamlined finance operations identifies actionable insights.
Speaker Change: Hence the overall customer experience.
Speaker Change: Each client brought a unique perspective on leveraging our solutions to address their specific challenges.
Speaker Change: Transportation solutions and industry leader in transportation and logistics.
Speaker Change: <unk> about genpact.
Speaker Change: Demand planning and forecasting solution.
Speaker Change: The Genpact model takes into account all fleet details Brendan availability pricing.
Speaker Change: On site storage and logistics to improve vehicle uptime and lower inventory costs.
Speaker Change: And insurance being a key factor for us.
Speaker Change: Liberty mutual insurance, one of the largest global property and casualty insurers.
Speaker Change: Spoke about the claim resolution and the solutions, we develop for them and leveraging Amazon bedrock and Genpact proprietary data to drive more efficient claims processing.
Apart from these client stories.
Speaker Change: Also demonstrated a number of AI enabled solutions that B I D.
Speaker Change: Many comprehensive, including finance and accounting supply chain quality assurance.
Speaker Change: Illustrating how the combined power of industry knowledge data artificial intelligence can transform business processes and drive superior value.
Speaker Change: I'll highlight one of these solutions Richard that wasn't a big solution bought accounts payable.
Speaker Change: Powered by our proprietary LLM.
Speaker Change: Our solution Leverages machine learning and Jamie I to increase automation across this end to end business process achieve.
Speaker Change: Achieving significantly more productivity than existing solutions.
Speaker Change: It reduces the cost of operation.
Speaker Change: Proves the working capital and enhances the finance users' experience.
Speaker Change: Coming back to the third element in our T plus one framework with the simplification, we continue to streamline our operations. So.
Speaker Change: So that we can scale more efficiently.
As an example, rehab taken steps to simplify our cash to collection process.
Speaker Change: Which is delivering improvement in time to bill and operating cash flow.
Speaker Change: In addition, we have board simplifying and further automating our all accounts payable process, resulting in improved working capital as well.
Speaker Change: And finally on leading with Genpact as our best credential for AI led transformation, we continue to make meaningful progress.
Speaker Change: I'll give you. One example, which we also covered in detail at AMB.
Speaker Change: We now have a family of AI agent called Scout available to every Genpact employee.
Speaker Change: Scout brings the power of AI to everyday work with summarizing documents are translating content.
Speaker Change: For the specialized functions like HR and it.
Speaker Change: We are also customizing our agents to solve more complex problems.
Speaker Change: Still in early stages of adoption, we have over 20 agents in production today with many more in development.
Speaker Change: In the process of developing scout.
Speaker Change: <unk> also created our own development.
Speaker Change: Development lifecycle.
Speaker Change: This is different from the classic software development lifecycle with a specific focus on model selection Creaming Amendment.
Speaker Change: Joining us to generate.
Speaker Change: With greater speed and accuracy.
Now turning to guidance.
Speaker Change: With another quarter of better than expected the dose we are raising our outlook again for the full year.
Speaker Change: We are increasing revenue guidance by 150 basis points.
Speaker Change: Good point.
With 6% growth now expected on as reported basis up from four 5% previously.
Speaker Change: We are also increasing bras N E AOI margin for the full year by 10 basis points each.
Speaker Change: And we are raising our outlook of adjusted EPS.
Speaker Change: Two key dollar 24 cents.
Speaker Change: The proximate in St increase at the midpoint of the range to reflect strong year to date performance.
Speaker Change: As we look ahead to 2025 and we are optimistic about the results we can deliver both for our clients and for our shareholders.
Speaker Change: That said there is significant work ahead.
Speaker Change: Our journey at Genpact is not just about adopting the latest technology. It is about fundamentally re imagining how we deliver customer value and operational excellence for our clients.
Speaker Change: We are off to a good start but remain heads down.
Speaker Change: Focused on execution and innovation and building whats next for Genpact.
Speaker Change: In closing, we see a bright future ahead.
Speaker Change: Jamie I is expanding our total addressable market and we believe we are well positioned with our unique combination of data technology and domain.
Speaker Change: We are also proud of the performance we have delivered year to date.
Speaker Change: The changes, we are making while not easy our improving execution and innovation across the board.
Speaker Change: Perhaps most importantly data big EMEA.
Speaker Change: I have witnessed the incredible dedication of the Genpact team every day.
Speaker Change: <unk> live we bring to clients.
Speaker Change: I want to thank every one of our employees for their incredible passion with that let me turn the call over to Mike.
Mike Wiener: Thanks P J and good afternoon, everyone. Thank you for joining us as we review our third quarter results and provide insights into how we are positioned for the remainder of the year, we demonstrated broad based strength in the third quarter, achieving 7% revenue growth, 12% adjusted diluted EPS growth and accelerating cash flow generation.
Mike Wiener: Our pipeline remains at record levels, reflecting a balanced mix of deal sizes. We achieved when rates are 43% for the quarter with sole sourced deals accounting for approximately 42% of total bookings. We also added 21, new logos and won three large deals in the quarter as a reminder.
Mike Wiener: Large deals are $50 million or greater in total contract value.
Mike Wiener: Footprint is expanding the number of clients generating more than 5 million annual revenue grew to an all time high of 188 in this quarter. We also increased the number of clients contributing more than $25 million in revenue to 43 with five clients generating over 100 million annually.
Mike Wiener: Selecting the importance of solutions and driving their success turning to the income statement total revenue was one point to one 1 billion a year over year increase of approximately 7% on both an as reported and constant currency basis. This strong performance underscores our disciplined execution.
Mike Wiener: Data Tech and AI revenue was $569 million, representing a 9% year over year increase in both reported in constant currency terms.
Mike Wiener: This was driven by all components of data Tech and AI, which is 47% of total revenue for the quarter.
Mike Wiener: Digital operations revenue was $642 million growing at 5% on an as reported and constant currency basis, primarily continued new deal additions.
Mike Wiener: Digital operations contributed 53% of total revenue in the quarter.
Mike Wiener: Revenue from outcome and consumption based deals excluding fixed fee contracts comprised 20% of total revenue up 17% from a year ago.
Mike Wiener: While priority accounts contributed 62% of total revenue with growth of approximately 4% year over year.
Mike Wiener: All three segments posted healthy growth.
Mike Wiener: Consumer and health care revenue grew approximately 8%, while both high tech and manufacturing and financial services were up approximately 6% compared to last year. All three segments. So our gains in new deal ramps advanced Tech services data analytics and AI.
Mike Wiener: Moving from revenue to profitability, we expanded gross margins at 35, 6% up 10 basis points from the prior year period.
Mike Wiener: In addition to driving accelerated revenue growth, we enhance our productivity our efforts reduced SG&A expense by 10 basis points year over year to 21% of revenue, reflecting increased investments in sales that were more than offset by optimization of G&A. We also increased our <unk>.
Mike Wiener: Adjusted operating income margin by 40 basis points year over year to 17, 6%.
Mike Wiener: Active tax rate was 24, 3% compared to 24, 1% in the prior year period.
Mike Wiener: Net income in the quarter was $133 million, a 13% increase year over year diluted EPS grew to 74 or 16% year over year.
Mike Wiener: On a non-GAAP basis, adjusted diluted EPS was <unk>, 85% to 12% increase year over year from the prior period importantly, EPS growth has outpaced revenue growth in each of the quarters. This year year to date adjusted diluted EPS growth was 10% versus 6% revenue growth.
Mike Wiener: We achieved operating cash flow.
Mike Wiener: We achieved increased operating cash flow of 41% year over year, delivering $228 million as higher revenue supporting improvements in working capital.
Mike Wiener: On the balance sheet cash and cash equivalents stood at approximately $1 billion up $541 million from a year ago, largely driven by the proceeds of a debt issuance last quarter that will be used to repay a bond maturity at the end of this month as a result, our net debt to last 12 months EBITDA ratio for the remained firm.
Mike Wiener: <unk> remained at the low end of our range at <unk> eight times for the quarter Dsos were 90 days. The overall credit quality of our portfolio remained strong even as we invest for long term growth. We're returning significant amount of capital to our shareholders through dividends and share repurchases in the first nine months of the year we were.
Mike Wiener: Turned nearly a quarter billion dollars.
Mike Wiener: This includes $75 million for repurchases of $1 9 million shares and $27 million in dividends during the third quarter.
Mike Wiener: Our disciplined capital allocation philosophy, returning at least 30% of cash flow from operations through share repurchases and 20% via dividend payments demonstrates our commitment to delivering shareholder value, while maintaining flexibility for strategic growth investments.
Mike Wiener: Attrition in the quarter was at 25% 100 basis points lower than the prior period.
Speaker Change: Now, let me turn to guidance.
Speaker Change: We are raising our guide with increased visibility for the remainder of the year. Our full year, we are increasing our revenue guide by approximately 150 basis points to 6% at the midpoint. Additionally, we are raising our projected growth and NOI margin 10 basis point, each bringing them to 35, 4%.
Speaker Change: And 17, 1%, respectively. Our adjusted diluted EPS Guide is also increasing by approximately eight now.
Speaker Change: Now expected to reach $3.24 at the midpoint operating cash flow for the full year is now been revised upwards by $35 million, bringing our total outlook to $560 million.
Now I'll walk you through our full year and fourth quarter guide in detail, starting with the up and coming quarter fourth quarter, we expect to deliver total revenue in the range of one to two 2 billion to one to $3 3 billion with data Tech and AI and digital operations growth projected to be 9% and five four.
Speaker Change: <unk>, respectively at the midpoint of the range.
Speaker Change: Gross margin is expected to be 35, 6% and our adjusted operating income margin is expected to be 17, 6% for the full year. We're projecting total revenue in the range of 4.740 to $4 75 1 billion as reported this represents a 6% revenue growth at the.
Speaker Change: Midpoint of our range up from 4.5% previously driven by our solid year to date results and continued strength across our business we.
Speaker Change: We now expect data tech and AI and digital operations to increased six 2% and five 9% for the full year at the midpoint of the range. We are raising our adjusted diluted EPS guidance by approximately <unk> <unk> the midpoint of the range to $3 23 to $3 20 for this.
Speaker Change: Approximately approximates a 26 year over year increase is expected to be driven by higher adjusted operating income of <unk> 19.
Speaker Change: A <unk> 10 benefit from reduced share count, partially offset by <unk>, consisting of higher interest expense and expected tax impacts.
Speaker Change: Conclude we are pleased with our results delivering profitable growth, while making key investments in the future with that let me turn the call over to Kristin.
Speaker Change: Great. Thank you, Mike and BK, Sharon, we're ready to take questions. Thank.
Speaker Change: Thank you if you would like to ask a question. Please press star one one on your telephone and wait for your name to be announced so withdraw your question Press Star One again, one moment, while we compile the Q&A roster.
Speaker Change: Okay.
Speaker Change: Our first question.
Speaker Change: That will come from the line.
Speaker Change: Of Brian bargain with TD Cowen Your line is open.
Speaker Change: Yes, that's actually cared Levine on for Brian Tonight over the last 90 days has there been any improvement in the short cycle projects and advisory work. It was good to see that strong DTA growth, but just curious if that benefited it.
Speaker Change: Yes, I think overall.
Speaker Change: It is.
Speaker Change: Can you hear me okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: There has been overall I think strong.
Speaker Change: <unk>.
Speaker Change: That is driving this reserve I think we continue to see stable.
Speaker Change: Cable.
Speaker Change: The business environment.
Speaker Change: Stronger execution is helping us deliver better results.
Speaker Change: Hey, maybe quickly just to add onto that if you're referring to our debt GTI.
Speaker Change: Component of our growth, we're continuing to execute really well on advanced technologies are.
Speaker Change: Led solutions that also are involved at about <unk>, a lot of generative AI and AI related initiatives. So we're pretty pleased with our performance this quarter within well within data Tech and AI.
Speaker Change: Okay, Great and then can you provide an update on your progress on expanding partnership source revenue.
Speaker Change: Who are your most important partnerships currently in which are the fastest growing.
Speaker Change: Yeah, I think we need.
Speaker Change: To think about it is.
Speaker Change: Pink off hyper scaler, so be it in AWS or Microsoft or Google.
Speaker Change: Then.
Speaker Change: We continue to be.
Speaker Change: Drawing a partner for us or people like service dollar sales force and then very specific domain led solutions.
Speaker Change: We are we bringing in a number of these partners.
Speaker Change: Each of these partners, but differentiation is we are building our proprietary solutions on the top.
Rich can act as a multiplier effect as we continue to enhance our development.
Speaker Change: And bringing our operational keystroke knowledge.
Speaker Change: Keystroke on defending in these domain solutions for our clients Yeah, Let me just quickly add on to that.
Speaker Change: If you if you think of partnerships and how much revenues contributed to the business from partnerships. It is still relatively low compared to the industry as a whole so our investments and partnerships in the ones BK alluded to a moment or so ago are really driving a lot of revenue for us currently and we'll see how it goes going forward.
Speaker Change: I'm, sorry, I cut you off.
Speaker Change: Great. Thank you.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And that will come from the line of Maggie Nolan with William Blair. Your line is open.
Speaker Change: Hi, Michael.
Speaker Change: From Nikkei congrats on the nice results today.
Speaker Change: First question is what parts of the data catch AI business do you feel like are resonating the most with clients right now that's really driving that accelerated growth.
Speaker Change: It is all parts of <unk> and golf.
Speaker Change: We're not seeing that David only AI or Jamie I ask that is certainly helping us but been bad.
Speaker Change: And you won't be AI, Jamie I conversation is not complete without Todd data.
Speaker Change: And then obviously it is the underlying technology and be various applications and our understanding there then how those applications need to evolve. So it is more holistic approaching data.
Speaker Change: Point number one.
Speaker Change: Number two I think in all of our digital operations.
Speaker Change: I do not know of any.
Speaker Change: Large deal even medium size, beating.
Speaker Change: Which we.
Speaker Change: Bring to our clients' attention and execute them book without <unk> in each of these digital operations deals.
Speaker Change: Dave I think AI is always.
Speaker Change: A significant on a pretty strong component and both of those attributes are changing our gaming did that occur.
Vijay: Okay, great. Thank you Vijay.
Speaker Change: And then just going off of that a little bit dream.
Speaker Change: But do you how are you starting to get the sense that customers are getting a little bit more comfortable with the generator of AI technology as time progresses.
Speaker Change: Yes, I would still say it is early days.
Speaker Change: But clearly a lot more adoption is happening.
Speaker Change: Clearly there is.
Speaker Change: Our team from just being a proof of concept to more.
Speaker Change: Putting these solution in production environments.
Speaker Change: And our workforce.
Speaker Change: A quite enduring for us, where we had a number of our clients on the stage.
Speaker Change: And operators and our clients who were talking about how it is generating meaningful value.
Speaker Change: And that is all.
Speaker Change: Always a little bit more credible because of the claim filed lifting for both story than Howard that the applicability Cam happen. So yes. It is.
Speaker Change: Still making pretty good progress I was still too early days.
Speaker Change: Okay, great. Thank you guys congrats on Macquarie.
Speaker Change: Thank you.
Thank you one moment for our next question.
Speaker Change: And that will come from the line of Robbie Bamberger with Baird. Your line is open.
Robbie Bamberger: Yes. Thanks for taking my question. So if we think about Q4, it implies about 6% year over year organic constant FX growth is that sort of a good starting point. If we think about 2025 growth expectations are any one offs that we should.
Robbie Bamberger: <unk> be thinking about as you look into next year.
Speaker Change: So let me kick it off in either already so when you think about our business right I think youre, referring to the guide for the fourth quarter and also for the full year, which is represent that 6% and 7% growth that we're projecting for the fourth quarter. If you kind of back into it from from there we will provide formal guidance when we give our <unk>.
Speaker Change: Three months from now, but we continue to see a stable buying environment that we'll be moving off of.
Speaker Change: It was a good year for us so.
Speaker Change: A stronger comp to grow offer there, but again, we feel pretty good about where we are for the fourth quarter and also for the full year.
Speaker Change: Yes, I think Scott what I would add as Mike said, certainly feel great about the progress on execution Javier leading innovation.
Speaker Change: But I must also say.
Speaker Change: Yep.
Speaker Change: We are just beginning and yes, we are a small company, but we are a large company too.
Speaker Change: And.
Speaker Change: While we are heads down execution.
Speaker Change: Still early days.
Speaker Change: Yes.
Speaker Change: We have.
Gift all delivering well this year it's about.
Speaker Change: It gets us to a tougher comp.
Speaker Change: But we will give you more specific guidance in another 90 days for 2020 by but feel really good.
Speaker Change: As to where we stand and yes. It is still stable buying environment than we would see as to how.
Speaker Change: Clients look at in early January and we'll give you more specific I do.
Speaker Change: Wow.
Speaker Change: 60 90 days.
Speaker Change: Awesome. Thank you and then in terms of its outcome based pricing I remember last quarter, you noted about 20% was outcome based.
Speaker Change: You have an update on what percent is outcome based now in Q3, and then I guess, what's causing this acceleration is Jenny I think you noted.
Speaker Change: Last quarter talking about how Jenny I type deals will be more outcome based on.
Speaker Change: Materials, maybe just thinking about that dynamic.
Speaker Change: Sure So Europe starting in the second part of your question that will absolutely drive more outcome based alternative commercial model solutions, we had about 20% of our total revenue.
Speaker Change: Attributed to that classification of revenue, but it's important to look at it while it was relatively flat sequentially, 20%, 20%, it's up from 17% a year a year ago.
Speaker Change: So we're quite bullish on that and we're also quite bullish on the industry itself continuing to pivot to these alternative commercial models, particularly as chairman of AI point based solutions and solutions in total continue to gain traction.
Speaker Change: Yeah.
Speaker Change: Awesome. Thank you.
Speaker Change: Thank you. Thank you one moment for our next question.
Speaker Change: And that will come from the line of surrender ascend with Jefferies. Your line is open.
Speaker Change: Thank you.
Speaker Change: BK can you maybe provide a bit more color around your commentary.
Speaker Change: You are at this point expecting a larger Tam for the set of services just any color on.
Speaker Change: How you think about that is it just there's a lot more breadth of services or bet that you can look at it from a client perspective or is it just a broader range of technology that you plan on working with how should we think about that.
Speaker Change: Yeah.
Speaker Change: I think how we are observing in our body planes with Lindbergh.
Speaker Change: Is.
Speaker Change: Yes.
Speaker Change: We've in the scope of activity because certain.
Speaker Change: <unk>, which were possibly our clients, we're not thinking I think I mean, I have expanded scope even M b.
Speaker Change: You know at certain conversation that we were having.
Speaker Change: Jamie I is helping us bring more end to end solutions to bear appointment of at one point.
Speaker Change: Point number two then.
Speaker Change: You know as I reflected also 40 I'd be a number of our clients.
Speaker Change: Are they engaging us for bringing domain led AI solution, which be able not earlier thinking about MBR also standalone as well as embedded solutions. So that is increasing the total addressable market as well.
Speaker Change: And then data was always at.
Speaker Change: Sidebars and data has become a meme active conversation.
Speaker Change: And because it might not be a Jimmy I.
Speaker Change: While all of the clients understood, but now it is <unk> view, and therefore data led and conversations and we have pretty strong franchise in data and analytics and that is helping us grow the data tech franchise. So it is more holistic approach.
Speaker Change: We are seeing in the pipeline is what we are sharing with you.
Speaker Change: That's helpful.
Speaker Change: And then when we think about the acceleration in the growth that you see in what I think you're describing is it relatively stable demand environment.
Speaker Change: Any color around maybe why now I.
Speaker Change: I understand right here you on the execution part of it.
Speaker Change: But is it that you feel like you've built certain proprietary solutions that you can take to the clients.
Or perhaps mature enough from an AI perspective are offering perspective, what's differentiated R.
Speaker Change: Our clients just a bit more willing to.
Speaker Change: May be opening up the budget a little bit more if they see something thats interesting anyway, I'm just trying to understand.
Speaker Change: The magnitude of the improvement that youre seeing and how.
Speaker Change: We should think about that on a go forward basis.
What I will go back to something that is our three plus one framework.
Speaker Change: And.
Speaker Change: Even that.
Speaker Change: Execution as well as innovation.
Speaker Change: Both of those elements in a stable demand environment is helping us deliver better.
Speaker Change: So when I say, a T plus one including partnership is it becoming a more stronger more selling we are still at early days.
Speaker Change: It is clearly showing that those and that's what we are sharing with you in a lot of that is sitting in beef I think AI.
Speaker Change: Similarly.
Speaker Change: It will be data. Thank you.
Speaker Change: Second we've been.
Our second key.
Speaker Change: <unk> been three plus one.
Speaker Change: <unk> advanced technology that we are bringing us in our solutions.
Speaker Change: He is helping us accelerate.
Speaker Change: And a lot of our clients find it really in building that we are driving this transformation on <unk>, two and plus one and that was also quite intriguing.
Speaker Change: What our clients happy I, Dan because we shared a number at all.
Speaker Change:
Speaker Change: We are we are we have been tighter control of Paypal, we have been back control of infrastructure and how we are accelerating that journey and that is.
Speaker Change: Still early days beginning to act as an inspiration for our clients.
Speaker Change: Thank you.
Speaker Change: Thank you one moment our next question.
Speaker Change: And that will come from the line of Bradley Clark with BMO capital markets. Your line is open.
Speaker Change: Hi, Thanks for taking my question, you've been mentioning sort of stable business demand.
Speaker Change: Correct number every quarter.
Speaker Change: During a calendar year, what time that youre looking for your customer.
Speaker Change: Perhaps congestion budget in flux.
Speaker Change: Early signs of an improved.
Speaker Change: <unk> environment.
Speaker Change: Yeah, So maybe let me kick that off so what we're seeing from our side I think what you're alluding to.
Speaker Change: Are we seeing any signs in our definition of what a stable business environment is of budget flushes going through the remainder of the year and potentially into next year as people re dealer refine their budgets.
Speaker Change: We have not seen that and nor are we assuming that in our our guidance now.
Speaker Change: It's early days as we finish up.
Speaker Change: Finish up to third quarter to actually enter into the fourth quarter, we'll provide additional guidance.
Speaker Change: <unk> for.
Speaker Change: For next year, when we meet in a quarter or so, but we hope to have some additional color from our clients as they really refocus on what theyre going to be doing for 2025.
Speaker Change: Okay. Thank you and then just as a quick follow up.
Speaker Change: Per ton vessel Fort Hills, ticked down slightly and kind of off the back of that I wanted to just see what the sort of pricing environmental Denmark, if there've been any changes perhaps yes.
Speaker Change: Then any sources of more competitive pricing, especially around general debate AD cloud guys. Thank you.
Speaker Change: So I didn't hear the first part of your question I'll answer the second part and maybe you can repeat it for us or the pricing environment is main relatively constant we haven't seen anybody.
Speaker Change: Doing anything dramatically different so I would say, it's a stable pricing environment.
Speaker Change: I didn't hear the first part of your question I apologize.
Speaker Change: The first part of the question I, just noticed that self sourcing deals I think was 42 this quarter of <unk> 45 last quarter and I. Just was wondering if that tied into any sort of change in the pricing dynamic.
Speaker Change: No I wouldn't read much much into that again, they're going to be lumpy in nature on sole source deal. When you look at things like disproportionately on larger deals are not sole source versus.
Speaker Change: Our sole source deals are typically on the smaller side. So there's nothing really to read into that on a quarterly basis, they're lumpy.
Speaker Change: Thank you.
Speaker Change: Thank you as a reminder, if you would like to ask a question. Please press Star 111 moment for our next question that will come from the line of Puneet Jain with Jpmorgan. Your line is open.
Speaker Change: Tony If you are on mute please UN mute your line.
Speaker Change: Again Puneet is your line is on mute. Please open up your lines.
Yeah.
Speaker Change: I think he might be in transit.
Speaker Change: So you may not be available to pick up.
Speaker Change: Okay, I am showing no further questions in the queue at this time I would like to turn the call back over to management for any closing remarks.
Speaker Change: Thank you Sri.
And before we sign off I just wanted to say thanks to all of our clients were choosing genpact and to all of our shareholders for their ongoing support.
Speaker Change: We're excited to keep innovating and we look forward to talking to you again next quarter. Thank you.
Speaker Change: Thank you for participating. This concludes today's program you may now disconnect.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].