Q4 2024 EPAM Systems Inc Earnings Call
Speaker Change: Good day and welcome to the fourth quarter and full year 2024 EPAM Systems Earnings Conference Call. All lines have been placed on mute to prevent any background noise.
Speaker Change: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again.
Speaker Change: Finally, I would like to advise all participants that this call is being recorded. Thank you.
Speaker Change: I would now like to welcome Mike Rowshandel, Head of Investor Relations, to begin the conference.
Mike, over to you.
Speaker Change: Good morning, everyone, and thank you for joining us today. As the operator just mentioned, I'm Mike Rowshandel, Head of Investor Relations.
Speaker Change: By now, you should have received your copy of the earnings release for the company's fourth quarter and full year 2024 results. If you have not, a copy is available on epam.com in the Investor Relations section. With me on today's call are Arkadiy Dobkin, CEO and President, and Jason Peterson, Chief Financial Officer.
Speaker Change: I would like to remind those listening that some of the comments made on today's call may contain forward-looking statements. These statements are subject to risk and uncertainties, as described in the company's earnings release and SEC filings.
Speaker Change: Additionally, all references to reported results that are non-GAAP measures have been reconciled to the comparable GAAP measures and are available in our quarterly earnings materials located in the Vesta Relations section of our website.
Ark: With that said, I will now turn the call over to Ark. Thank you, Mike. Good morning, everyone.
Thank you for joining us today.
Ark: It's good to share that our fourth quarter results came in better than expected.
Ark: It was another quarter of strong execution, thanks to our core engineering differentiation and relevance of our advanced capabilities and service offerings across our new and existing client portfolios.
Ark: Many of the encouraging themes we shared last quarter have carried through into this quarter.
Ark: Before discussing our Q4 results and some thoughts on 2025, I would like to step back and reflect on the full year 2024, which was a year of uneven demand, improved stabilization, and building some sequential momentum.
Ark: There are three key points I would like to highlight on our performance over the past year.
Ark: Number one, we were successfully executing our global business strategy while simultaneously addressing many challenges we have accumulated during the last few years.
Ark: We've done this both organically and through acquisitions with a continuous focus on becoming the most globally geo-balanced trading company in the world for AI-native digital business services.
Ark: The two most recent acquisitions, NeurIAS and Forced Derivative, or EFD, are good examples of how we are investing to accelerate our strategy.
Ark: They allowed us to meaningfully expand our existing global client relationship and further penetrate new markets and talent geo hubs.
Ark: While still early, we see encouraging progress across several net-new opportunities with more than a dozen joint pursuits that combine EPAM new orders and FD capabilities together.
Number two.
Ark: We are pleased to end the year with an underlying improvement on our stand-alone business, delivering better results than our expectations earlier in the year when we had to adjust our tool for a weaker-than-expected H1.
Ark: And finally, number three. Exiting 2024, we feel good about the sequential momentum we've built over the past two quarters. And stay encouraged in science as we look ahead into 2025.
Ark: But there is still plenty of caution and broad macro sensitivity. We believe we see some fundamental improvements in the business.
Ark: It gives us optimism that 2025 will be a much more transformative and better year for us than 2024 was.
Now, turning to our Q4 results.
During Q4, we grew mid-single digits both year-over-year and sequentially.
Ark: Notably, returning to organic revenue growth for the first time since Q1 of 2023.
Ark: We continue to see improvements in client sentiments and engagement across all our verticals and geogrids.
and particularly around our AI-related capabilities.
Ark: Our performance in Q4 was driven by our ability to increase our clients' trust and reassure a continuous superior quality execution in our key horizontal and vertical domains, while simultaneously offering more globally diversified talent.
Ark: On a stand-alone basis, excluding recent acquisitions, we saw 4 out of 6 verticals grow year-over-year, with 5 out of 6 growing sequentially.
reflecting strong momentum from last quarter.
Ark: Key articles to call out include life science and health care, software and high tech, financial services, and emerging.
Ark: Across geographies, we see a similar story to last quarter, with Americas and IPAC leading growth year over year, with Europe continuing to show organic sequestration revenue growth.
Now, turn it into demand.
Ark: We are encouraged to see a modestly more positive demand environment compared to 90 days ago.
Ark: Sentiment continues to improve across our existing and newly acquired client portfolios. These clients rely on us for our core engineering DNA as well as our advanced genetic capabilities.
Ark: In some cases, we are consolidating work from other suppliers as clients shift over to more engineering-led and scaled programs.
in our most recent conversations across the C-suite.
Ark: The underlying tone and bind signals are higher than they were last year.
with Further Accumulation of Technical and Data Depth.
Ark: For the past 12 months, we are seeing accelerated take-up in more scaled and transformational AI programs.
Ark: Based on the significant backlog of technical and data modernization, along with new AI-related demand, we believe that 2025 will be the year where we begin to see real demand for smaller advantages.
Well, we're relatively optimistic about the midterm outlook.
Ark: is more encouraging client buying signals than 12 months back. We do still see multiple packets of caution driven by broad macro risks, policy-specific uncertainty due to a very dynamic geopolitical environment, and certain challenges in some of our clients and silent
Bye, everyone. Bye.
Ark: Post very much remains in focus and continues to be an important decision factor for many of our clients.
Ark: So based on these uncertainties in our current vantage point, we are balancing our optimism as clients continue to transition and modestly expand their discretionary spend.
Ark: Moving into our global delivery approach, we demonstrated strong execution throughout the year.
Ark: As we continue to diversify our global talent pools and bring in more
Ark: optionality to our clients across all four of our major delivery hubs in Europe, India, Latin America, and Western Central Asia.
Ark: Thank you for the so sequential improvements of net organic additions, which was broader than just India and included some of our traditional European locations.
Ark: Europe remains core to us as a top talent pool, and we believe we will continue to grow in the region as discretionary spend returns to higher levels.
Ark: Ukraine is an interesting example to share, given the geopolitical environment.
Ark: While production headcount remained mostly in line year over year, in Q4 we saw sequential net additions for the first time since the start of the Russian invasion.
Ark: We believe this is a positive signal of our clients' comfort level and desire to return to some of our traditional locations.
Ark: In India, we hit an important milestone for the company, as it now represents our largest single-country delivery location and second in the region.
Ark: In just 10 years, IPAN has achieved 10x growth in India with now over 10,000 employees.
Ark: This speaks to our ability to adapt to changing market conditions and our commitment to investing in globally diverse and talented workforce in line with EPAM's work DNA.
Ark: In Latin America, we significantly strengthen our footprint with New Orleans, making Latin America our third largest delivery region and a very important pillar in our global model.
Ark: We believe you have now the right mix of talent focusing on delivery for North American clients, coupled with deep local expertise and strong capabilities to engage and deliver in LATAM.
Ark: In Western Central Asia, as you mentioned last quarter, we continue to progress quite nicely with our still relatively new delivery hub of over 7,300 people now.
Back to the two acquisitions we closed in Q4.
In overall, with NeurIS-NFD, we significantly increased our global footprint.
Ark: is the addition of nearly 6,000 people combined, primarily across Latin America, Canada, Spain, UK, and Ireland.
We remain committed to executing our global delivery strategy further.
Now shifting to GNI.
Ark: Even with all the recent noise, sometimes with significant level of confusion in debates, we are seeing indicators of positive change and growing impact.
Ark: Overall, we continue to make significant action across our client portfolio, with now 75% of our top country clients engaged on GNI initiatives.
Ark: Our early-stage projects continue to show strong growth year-over-year with hundreds of new vertical use cases emerging and turning into agentic AI pilots.
Ark: We are beginning to see more volume, and we believe this speaks to the investment and traction clients are making in this space.
Ark: These programs have a high probability of turning into agentic transformation plays in key horizontal and vertical domains.
Ark: Finally, in our larger-scale AI factories, we manage the entire AI portfolio of agents and applications throughout the program lifecycle and generate tens of millions of dollars in value by each such engagement.
Ark: Our Gen-AI and AI-Driven Client Engagement could also be presented in three major dimensions.
Ark: Dimension one is DLC and other related areas of individual and team productivity improvements.
Ark: Dimension 2. Data and cloud engagements triggered by the need to enable AI and data programs on scale.
Ark: Dimension 3, scaled AI-native programs and platforms, is a goal to drive value against proven business cases and when clients already solve their data in cloud infrastructure challenges.
Let me expand a bit on this.
Ark: With Dimension One, we are addressing the need of concrete enterprise-level engagements to orchestrate individual efforts toward total productivity improvement at large teams and programs levels via all latest GNI advances.
Ark: Often to have real engagement impact, our hybrid-based client teams must have the same level of modern engineering maturity as purposefully trained our own teams.
Ark: That is why we are offering to clients GNI-enabled software development lifecycle for HDLC transformational programs.
Ark: Utilizing market-leading tools and methodologies, along with the EEPAM AI-RAN framework, built on top of our own Dial, Elita, CodeMe, and some other IP assets.
Ark: It made significant impact on large companies' engagement and helps to advance the adoption of AI in large-scale enterprises by bringing measurable value through both cost optimization and the creation of new revenue streams.
Well, I believe Dimension 2 is very much...
self-explanatory. Dimension three is our go-to market business transformational programs.
Natively enabled by JN-AI and AI technology.
Ark: As we move into a more comprehensive, agentic proposition, our AI-native engagements are starting to be picked up in volume and size.
compared to the first half of 2024.
Ark: where we were generating single-digit millions of revenue from these AI-native programs.
Ark: Q4 stands out by generating about $50 million in that category.
Ark: Let me share two client examples to further illustrate how our efforts are driving client engagement and generating real pragmatic value.
Ark: Let's start with Canadian Tire Corporation, the largest retail chain in Canada, where we have embarked on a journey to standardize and modernize software delivery lifecycle.
Ark: The Combined Power of CTC Product Engineering Center of Excellence and IPAM Know-How.
Ark: We already derived an initial result with very real optimization and efficiency savings.
Ark: So far EPAM has effectively deployed the ELITA platform across CTC delivery organization, trained more than 700 individuals, and ensured comprehensive adoption of new modernized tools.
Ark: This is a real example of how our approach amplifies organizational productivity, reduces cost, and improves in-team and cross-team collaboration, and serves as a foundation for the next-generation agentic platform for SDLC.
Ark: Another notable example of real progress at scale is our expanded engagement with Baker Hughes, one of the world's largest oilfield services, industrial, and energy technology companies.
Ark: We are enabling Baker Hughes in building and offering to their clients large AI-native digital platforms by combining the Palm Western-class product engineering capabilities with Baker Hughes' expertise in energy technology.
Ark: Just a few weeks ago, Baker used NAMTPAM as a key partner for digital and AI to transform the energy sector by leveraging advanced AI-native digital platform implementations at scale.
We believe the Parliament is one of the few
Ark: A&E Native Service Providers, who can demonstrate scaled programs with proven AI-ROI today. This is also well-enabled by our growing global partnerships with cloud and data major providers.
Ark: is who we are expanding our collaborations and focusing on general and agentic AI road to marketplace.
Ark: We believe the demand for advanced AI-native energetic software and data engineering services will only increase.
Ark: As engineering productivity gains will be significantly outsized by incremental demand to build new and replace the legacies. As clients quickly expand in their focus to solve more complex tasks more efficiently.
Ark: Further, the need for security modernization and managing enterprise data platforms will continue to demand skilled expertise that combines critical AI skills with modern engineering and data science capabilities.
All areas in which IPAM excels.
to conclude.
Ark: We are pleased with our stronger-than-expected Q4 results and stabilization achieved during the last year.
Ark: Our new AI-native capabilities, data and core engineering differentiation, remained evident.
Well, they are more globally diversified today than ever before.
Ark: We continue to see clients return to quality and reliable execution, and we believe that is putting us into a stronger competitive position today compared to last year.
Ark: At the same time, we do believe 2025 will be still a challenging and transformative year for the industry, with a lot of pressure to navigate two opposite trends across our client base.
Ark: One is still being driven by cosensitivity, while another by the need to return to more discretionary spending and addressing accumulated during the last few years' backlogs.
Ark: which means also that the fund will be performing during 2025 with continuous margin pressures triggered by necessity to invest across several important for us in 2025 areas.
Ark: such as critical skills and talent retention and development, agentic AI, engineering IP, and tooling advancements, integration efforts of our recent acquisitions, and go-to-market strategies.
Ark: That should allow us to be in the right standard when the discretionary demand environment will fully rebound.
Ark: So while we remain vigilant to potential headwinds, we believe our strategic positioning and ongoing initiative places on the trajectory for sustainable performance and growth in 2025 and beyond.
Ark: Let me now turn the call over to Jason, who will provide additional details on our Q4 results and 2025 outlook.
Jason Peterson: Thank you, Ark, and good morning everyone. In the fourth quarter, EPIM generated revenues of $1.25 billion. A year-over-year increase of 7.9% on a reported basis, including revenues from recent acquisitions, NEORAS, and First Derivatives.
Jason Peterson: On an organic, constant currency basis, revenues grew 1% compared to the fourth quarter of 2023.
Jason Peterson: In Q4, we are pleased to return to year-over-year organic revenue growth. Organic revenues exceeded our Q4 guidance due to higher-than-expected new project starts indicating modestly improving client sentiment.
Jason Peterson: Due to the quarter's significant inorganic revenue contribution, I will speak to both organic and inorganic revenues as I discuss industry vertical and geographic performance.
Ark: Beginning with industry verticals, I want to echo Ark's comments that in Q4, five out of six of our industry verticals delivered sequential organic revenue growth. Only the travel and consumer vertical declined Q3 to Q4.
Ark: Financial services delivered very strong growth at 15.9% year-over-year, reflecting 4.3% organic and 11.6% inorganic growth.
Ark: Driven by continued strength in the banking, insurance, and payment sector.
Ark: Life Sciences and Healthcare increased 8.6% on a year-over-year basis, reflecting 5.7% organic and 2.9% inorganic growth. Growth in the quarter was driven primarily by clients and Life Sciences, including some revenues derived from new logo accounts.
Ark: Software and high-tech increased 7.7% year-over-year, reflecting 6.4% organic and 1.3% inorganic growth.
Ark: Consumer goods retail and travel decreased 3% year-over-year, reflecting a negative 5.7% organic and a positive 2.7% inorganic growth, largely due to declines in consumer products and retail, partially upset by growth in travel.
Ark: Business information and media declined 3.9% year-over-year, reflecting negative 4.7% organic and positive 0.8% inorganic growth.
Ark: Revenue in the quarter was impacted by the previously discussed ramp down of a top 20 client.
Ark: However, sequentially, we were encouraged to see the vertical return to strong growth as we continue to build momentum. And finally, our emerging verticals delivered very strong growth of 24.8%, reflecting 3% organic and 21.8% inorganic growth.
Ark: Growth was primarily driven by clients in energy, manufacturing, and industrial materials, with significant contribution coming from Neoris.
From a geographic perspective,
Ark: The Americas, our largest region, representing 60% of our Q4 revenues, increased 11.4% year-over-year, reflecting 2.7% organic and 8.7% inorganic risk.
Ark: AMEA, representing 38% of our Q4 revenues, increased 3.1% year-over-year, reflecting negative 1.4% organic and positive 4.5% inorganic growth. In the quarter, the region continued to show sequential organic revenue improvement.
Ark: And finally, APAC increased 4.3% year-over-year and represents 2% of our revenues.
Ark: In Q4, revenues from our top 20 clients grew 4% year-over-year, while revenues from clients outside our top 20 increased 10%.
Ark: Moving down the income statement, our gap gross margin for the quarter was 30.4% compared to 31.1% in Q4 of last year. Non-gap gross margin for the quarter was 32.2% compared to 33% for the same quarter last year.
Ark: Relative to Q4 2023, gross margin in Q4 2024 was negatively impacted by compensation increases, including those resulting from our 2024 promotion campaign, which we were not able to offset through pricing, as well as lower profitability of recent acquisitions.
Ark: GAAP SG&A was 17.4% of revenue compared to 18.5% in Q4 of last year. Non-GAAP SG&A came in at 14.4% of revenue compared to 14.2% in the same period last year.
Ark: SG&A measured as a percent of revenue is now higher in part due to our recent acquisitions running with higher SG&A levels compared to our standalone business.
Ark: SG&A expense for Q4 2024 reflects SG&A associated with recent acquisitions as well as higher variable compensation compared to Q4 2023.
Ark: Non-GAAP income from operations was $208 million, or 16.7% of revenue in the quarter, compared to $200 million, or 17.3% of revenue in Q4 of last year.
Ark: Our GAAP effective tax rate for the quarter came in at 24.8%, and our non-GAAP effective tax rate was 24%.
Ark: Diluted earnings per share on a gap basis was $1.80. Our non-gap diluted EPS was $2.84.
Ark: reflecting an increase of 9 cents or 3.3% compared to the same quarter in 2023.
In Q4, there were approximately 57.4 million diluted shares outstanding.
Ark: Turning to our cash flow and balance sheet, cash flow from operations for Q4 was $130 million, compared to $171 million in the same quarter of 2023.
Ark: Free cash flow was $115 million compared to free cash flow of $161 million in the same quarter last year.
Ark: We ended the quarter with approximately $1.3 billion in cash and cash equivalents.
Ark: which is lower compared to the same quarter last year due to our recently completed acquisitions.
Ark: At the end of Q4, DSO was 70 days, compared to 74 days in Q3 2024 and 71 days in the same quarter last year.
Ark: Share repurchases in the fourth quarter were approximately 53,000 shares for $13 million at an average price of $241.99 per share.
Moving on to a few operational metrics for the quarter.
Ark: We ended Q4 with more than 55,100 consultants, designers, engineers, trainers, and architects.
Ark: a growth of 16.3% compared to Q4 of 2023. This was a result of recent acquisitions which contributed nearly 6,000 delivery professionals.
Ark: in addition to Solid Organic Growth, which contributed sequential net additions of around 1,500 employees in the quarter.
Our total headcount for the quarter was 61,200 employees.
Ark: Utilization was 76.2% compared to 74.4% in Q4 of last year and 76.4% in Q3 2024.
Ark: Turning to our 2024 full-year results, revenues for the year were $473 billion, up 0.8% on a reported basis year-over-year. On an organic constant currency basis, revenues were down 1.7% year-over-year.
Ark: Gap income from operations was $545 million, an increase of 8.6% year-over-year, and represented 11.5% of revenue.
Ark: Gap income from operations benefited from the recognition of $69 million of incentives related to research and development activities performed in Poland and was negatively impacted by $31 million of severance-related costs.
Ark: Our non-GAAP income from operations was $779 million, a growth of 1.8% compared to the prior year, and represented 16.5% of revenue.
Ark: Our non-GAAP income from operations benefited from the recognition of $45 million of incentives related to research and development activities performed in Poland in 2024.
Ark: Our GAAP effective tax rate for the year was 22.2 percent. Our non-GAAP effective tax rate was 24 percent.
Ark: Diluted earnings per share on a GAAP basis was $7.84. Non-GAAP EPS, which excludes adjustments for stock-based compensation, acquisition-related costs, and certain other one-time items, including costs associated with our cost optimization programs, was $10.86.
reflecting a 2.5% increase over fiscal 2023.
Ark: Cash flow from operations was $559 million, compared to $563 million for 2023, and free cash flow was $527 million, reflecting an 83.7% adjusted net income conversion.
And finally, shares repurchased in 2024 were approximately 1,854,000 shares.
Ark: for $398 million at an average price of $214.65 per share.
Now let's turn to guidance.
Ark: Before moving to the specifics of our 2025 and Q1 outlook, I would like to provide some thoughts to help frame our guidance.
Ark: We have been pleased with the progress we are making on demand generation and will continue to prioritize revenue growth into 2025. We see stability in client budgets and some degree of shift in spending towards growth and strategic programs.
Ark: In 2025, we expect flat year-over-year organic revenue growth in Q1, followed by continued improvement throughout the year.
Ark: In terms of profitability for 2025, we do expect to run the business at somewhat lower levels of profitability than we have in past years.
Ark: As Ark mentioned, we are investing in retaining our top talent, as well as further accelerating investments in our advanced Gen-AI platforms and tools.
Ark: Compensation increases to retain talent for future growth combined with a limited ability to improve client pricing in the near term and additional pressure from dilutive impact of recent acquisitions will continue to put pressure on profitability this year.
Ark: However, we do expect to see improvement in our profitability levels from the first half to the second half of the year.
Ark: Our guidance assumes that we will continue to be able to deliver from our Ukraine delivery centers a productivity level similar to those achieved in 2024.
Ark: Now starting with our full year outlook, revenue growth will be in the range of 10% to 14% with an inorganic contribution of approximately 10% for 2025.
Ark: We expect gap income from operations to be in the range of 9-10% and non-gap income from operations to be in the range of 14.5-15.5%.
Ark: We expect our gap-effective tax rate to be approximately 24 percent. Our non-gap-effective tax rate, which excludes excess tax benefits related to stock-based compensation, will also be 24 percent.
Ark: Earnings per share, we expect the GAAP-diluted EPS will be in the range of $6.78 to $7.08 for the full year. And non-GAAP-diluted EPS will be in the range of $10.45 to $10.75 for the full year.
Ark: We expect weighted average share count of 58.1 million fully diluted shares outstanding.
Ark: For Q1 of 2025, we expect revenues to be in the range of $1.275 billion to $1.290 billion, producing year-over-year growth of approximately 10 percent.
Ark: Our guidance reflects an inorganic contribution of 11.4% with a 1.4% negative FX impact during the quarter.
Ark: For the first quarter, we expect GAAP income from operations to be in the range of 6.5% to 7.5%, and non-GAAP income from operations to be in the range of 12.5% to 13.5%.
Ark: Our Q1 Income from Operations Guide reflects the impact of resetting social security caps, the negative impact of 2024 compensation increases which we were unable to offset with better pricing, dilution from recent acquisitions, and a slightly softer revenue in the month of January as clients in certain verticals finalize budgets.
Ark: For the first quarter, we expect GAAP income from operations to be in the range of 6.5% to 7.5%.
Ark: and non-GAAP income from operations to be in the range of 12.5% to 13.5%.
Ark: Our Q1 Income from Operations Guide reflects the impact of resetting social security caps.
Ark: The negative impact of 2024 compensation increases, which we were unable to offset with better pricing, dilution from recent acquisitions, and slightly softer revenues in the month of January as clients in certain verticals finalized budgets.
Ark: We expect a weighted average share count of 57.7 million diluted shares outstanding.
Ark: Stock-based compensation expense is expected to be approximately $194 million, with $50 million in Q1, $44 million in Q2, and $50 million in each remaining quarter.
Ark: Amortization of intangibles is expected to be approximately $68 million for the year, with approximately $18 million in Q1 and $17 million in each remaining quarter.
Ark: The impact of foreign exchange is expected to be approximately 1 million loss each quarter.
Ark: Tax Effective Non-Gap Adjustments is expected to be approximately $61 million for the year, with $17 million in Q1, $14 million in Q2, and $15 million in each remaining quarter.
Ark: We expect excess tax benefits to be around $14 million for the full year, with approximately $7 million in Q1, $2 million in Q2, $1 million in Q3, and $3 million in Q4.
Ark: Severance, driven by our 2024 Cost Optimization Program, is expected to be $6 million in Q1 and $1 million in Q2.
Ark: Finally, one more assumption outside of our GAPs and non-GAP items, we maintain a significant level of cash and are generating a healthy level of interest income.
Ark: However, based on the reduction in cash, resulting from the recent acquisitions, we are expecting interest and other income to be smaller in 2025 compared to 2024.
Ark: With around $18 million for the 2025 full year with $4 million in Q1, and Q2 and $5 million in each remaining quarter.
Ark: My Thanks to all of the payment is made 2020 for a successful year and will help us drive growth throughout 2025.
Speaker Change: Operator, let's open the call for questions.
Ark: Okay.
Ark: If you wish to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.
Ark: If you would like to withdraw your question simply press Star one again.
Ark: You are called upon to ask your question and are listening via loud speaker on advice. Please pickup your handset and ensure that your phone is not on mute when asking your question.
Ark: Ask you limit yourself your questions to one and one follow up so we are able to take as many questions as possible.
Speaker Change: And your first question comes from the line of Maggie Nolan with William Blair. Your line is open.
Maggie Nolan: Thank you Jay.
Maggie Nolan: Jason I was hoping you could elaborate a little bit on the expectations that are embedded in the top end and the low end of revenue guidance.
Maggie Nolan: Company specific and.
Maggie Nolan: From a macro perspective.
Maggie Nolan: Yes, so I think we've been fairly careful about our expectations for <unk> and ft.
Maggie Nolan: <unk> generally delivered at the level of revenues that we expected in Q4.
Maggie Nolan: We have them both with some modest degree of growth as we go from 2024 to 25 and then as I think we said in the prepared remarks is that we've got it effectively kind of a zero to a 4% growth.
Maggie Nolan: Yeah.
Maggie Nolan: For <unk>.
Maggie Nolan: Organic <unk> introduced their foreign exchange headwinds, you've got a one 5% growth.
Maggie Nolan: Again, using an organic constant currency.
Maggie Nolan: Now what we're seeing is a somewhat slow start in January but we are seeing.
Maggie Nolan: Stansell program starts and clients.
Maggie Nolan: Beginning to really get started here in 2025, as we entered February and as we work through the month.
Speaker Change: If I were to talk about that and maybe is this for revenue or is this for the revenue in EMEA. The revenue. Okay. So what we have to have.
Maggie Nolan: Yes.
Maggie Nolan: Clearly some degree of sequential growth.
Maggie Nolan: Q1 to Q2.
Maggie Nolan: We are seeing substantial sort of project starts in certain areas of our business and we've got.
Maggie Nolan: A couple of clients, one, particularly in sort of high tech that we expect to show substantial growth.
Maggie Nolan: In the year again.
Maggie Nolan: 4%.
Maggie Nolan: It's clearly some degree of sequential revenue growth.
Maggie Nolan: In the back half.
Maggie Nolan: Yes.
Maggie Nolan: You were to end up in the middle part of the range, it's kind of a softer.
Maggie Nolan: So I am not certain that helps too much but what we are seeing is its very strong sort of program starts and customer demand here in February. Despite the fact, we had sort of a slower start to January.
Maggie Nolan: Yeah.
Maggie Nolan: Thank you that's helpful.
Maggie Nolan: And then on the margin side.
Speaker Change: Our Katie you mentioned that.
Speaker Change: Investments that you are clearly going to be making I'd be particularly interested in some of the commentary around.
Speaker Change: Gentex AI and IP since it services companies don't typically.
Speaker Change: Retain a significant amount of the IP that they generate.
Speaker Change: And then how are you thinking about balancing those investments with.
Speaker Change: Perhaps the need to drive some cost synergies in these acquisitions that you're onboarding.
Speaker Change: Yeah. So let me just do a quick bridge on adjusted <unk>, and then I'll, probably let <unk> talk a little bit more about the importance of the investments in.
Jenny: And Jenny.
Speaker Change: We've got 2000.
Speaker Change: 24 at 16, 5% adjusted so.
Speaker Change: The midpoint of our guided range for 2025 that would be 15%.
Speaker Change: We've talked about dilution due to the due to that.
Speaker Change: The acquisition of FTE.
Speaker Change: And.
Speaker Change: In Europe, both in Denmark accretive from an EPS standpoint, but they are dilutive from an adjusted Idaho, and so I think that we've updated our assumption and that's about a 60 basis point dilution of 16, 5%.
Speaker Change: With a 60 basis point dilutive impact of the acquisitions were down 15, nine and then 15 nine compares to that 15%.
Speaker Change: <unk>, which is the midpoint of the 14 five to 15 and a half and what we're seeing is some incremental investment in Gen AI, which is causing both an increase in SG&A a little bit the gross margin.
Maggie Nolan: Then Maggie as we've kind of talked throughout 2024, and I think also as we've talked about what we expected in 2025.
Maggie Nolan: We have been focused on retaining our top technical talent and so we have had some degree of.
Maggie Nolan: Cost increases or increases.
Maggie Nolan: Compensation in 2024 in a year when it was very difficult to get rate increases we still expect that this is.
Maggie Nolan: More challenging certainly in the first half of 2025. So what we are expecting to have is our traditional promo campaign in the first half.
Maggie Nolan: Of 2025 with limited ability to offset those compensation increases with salary increases.
Maggie Nolan: When do you expect the pricing environment to improve somewhat throughout the year clearly we're focused on utilization impairments in that type of thing.
Maggie Nolan: But really what is happening at 15 50 915.
Maggie Nolan: Some amount of compression.
Maggie Nolan: Price sensitivity with clients, India still runs better than average profitability, Ukraine still runs at high levels of profitability. So we feel good about that.
Maggie Nolan: <unk> overall, but just the pricing environment.
Maggie Nolan: Still it's kind of a pressure on is pressurizing, our gross margin and ultimately our adjusted Idaho.
Maggie Nolan: Yeah.
Maggie Nolan: I assume.
Maggie Nolan: Yes.
Maggie Nolan: Yeah.
Maggie Nolan: Let me pause.
Maggie Nolan: Yeah.
Maggie Nolan: This type of investment is not something new for us.
Maggie Nolan: <unk>.
Maggie Nolan: Vehicles do something due diligence and we all understand that investments in Jimmy yes.
Maggie Nolan: So lots of investment in training changes, Manitoba you.
Maggie Nolan: We will open tomorrow.
Maggie Nolan: New software deals.
Maggie Nolan: So on top of this loan growth accelerators.
Maggie Nolan: IP as well so you can claim this transitional period.
Maggie Nolan: Mark is itself not bleeding to witness stable solutions to build new type of.
Maggie Nolan: So.
Maggie Nolan: And we didn't flag.
Maggie Nolan: <unk> welcomed isn't the most governance and as well as significant investments it was a tough market environment.
Maggie Nolan: Thanks, Joe.
Maggie Nolan: But we do believe since we cannot use.
Maggie Nolan: This investment.
Maggie Nolan: As soon as.
Maggie Nolan: Yes.
Maggie Nolan: Hoping to drive.
Maggie Nolan: Real transformation, we need to be radiant epilepsy.
Speaker Change: Your next question comes from the line of Jamie Friedman with Susquehanna.
Speaker Change: Your line is open.
Jamie Friedman: Hi, Good morning, I just wanted to ask one question in terms of.
Arkady: Your prepared remarks arkady.
Speaker Change: You say and I'm quoting in 2025 clients will balance their cost focus with the need to accelerate their transformational journey a journey.
Speaker Change: That to me sounds like kind of a change that business versus run the business narrative.
Speaker Change: Wondering.
Speaker Change: In the context of your pricing commentary.
Speaker Change: Is the pricing do you have any exposure to the run the business opportunities is it.
Speaker Change: Really the change the business transformation side, whether it's G&A or otherwise and is the pricing pressure that you're feeling on the new stuff or on the old stuff for both thank you.
Speaker Change: So we definitely picked up.
Speaker Change: Due to the low single use excluded to run the business.
Speaker Change: Novel ingredients and <unk>, who is trying to do differently then.
Speaker Change: Additionally, it was executed, especially as evolution of what you're seeing.
Speaker Change: Let me just ask.
Speaker Change: But.
Speaker Change: Uh huh.
Speaker Change: But it's a pressure pricing pressure.
Speaker Change: Still due to the less so.
Speaker Change: <unk> is a really big.
Speaker Change: And this to change it.
Speaker Change: Okay.
Speaker Change: But in in 2025 more visibly, but there is a price pressure at the gross run and build as well.
Speaker Change: And change as well.
Speaker Change: Until again the change we will become much more.
Speaker Change: Got them into more traditional levels of the web.
Speaker Change: Okay. Thank you for that I'll jump back in the queue.
Speaker Change: Alright.
Speaker Change: Your next question comes from the line of Bryan Bergin with TD Cowen Your line is open.
Speaker Change: Hi, guys. Good morning, Thank you.
Speaker Change: On demand I was hoping you could dig in more on how the client spending behavior progressed through each month in <unk> and really trying to dig into commentary on new clients versus existing clients. So I guess can you talk about that and any interesting bookings data or anything like that as you look at new versus existing.
Speaker Change: Okay.
Speaker Change: So I don't think I can give you specific numbers, but definitely.
Speaker Change: Yes.
Speaker Change: <unk> plan.
Speaker Change: It's not Kevin.
Speaker Change: When you launch right away.
Speaker Change: There are some clients which quickly.
Speaker Change: Moving to the range of kind of annualize 10 meal. So at the same time, there are lots of new clients to each.
Speaker Change: Through G&A.
Speaker Change: Kind of a proof of concept and then starting to scale.
Speaker Change: I also would probably mentioned that for us.
Speaker Change: Alright.
Speaker Change: Sometimes its old clients as well because for the timeline.
Speaker Change: Starting from the beginning it was a lot of declines we've seen in each one of these clients.
Speaker Change: Alright.
Speaker Change: But recently.
Speaker Change: For example.
Speaker Change: Jason mentioned one of the Big Tech.
Speaker Change: That company.
Speaker Change: No.
Speaker Change: Leach only went to zero now starting to bring to scale.
Speaker Change: So we should be considering.
Speaker Change: In some venue.
Speaker Change: It will be debt free.
Speaker Change: Let's only with Youku.
Speaker Change: Let's come.
Speaker Change: Come back to us because because they need quality level and understand the dosage.
Speaker Change: Which we focus.
Brian: Hey, Brian So I'm, just going to introduce a couple of numbers here.
Speaker Change: Guide was one five to one to one five.
Speaker Change: Europe performed as expected, we said that we would do about $54 million with Urs FTE would've been incremental to that and I can tell you that that was about $12 million again as we expected. So if you added the FTE to the guide it would have been 12, 17% to 12 27.
Speaker Change: We landed at $12 48, and so it clearly was in what we call our stand alone business, where we saw strength.
Speaker Change: We did see sequential growth in Europe, we did see improvement in financial services, including growth in ERP and financial institutions and so overall it was.
Speaker Change: Quite a bit stronger quarter from a revenue growth growth standpoint than we had expected.
Speaker Change: Particularly with good revenues in the month of November and December.
Speaker Change: Okay very good I appreciate all that detail.
Speaker Change: And then just actually on the margin took my follow up here. So thank you for the bridge.
Speaker Change: Obviously, a lot of moving parts here with the R&D tax credit, but that in the market that the acquisition margin profiles incremental investment and the different GL footprint, but as we kind of just think ahead as demand ultimately normalizes.
Speaker Change: Dissipate a return to profit levels, where you've been before or is it too early to make that call.
Speaker Change: Yes.
Speaker Change: Only expecting to see improved profitability in the second half.
Speaker Change: Relative to the first half and then clearly we're looking to drive profitability back Ted what I would call more capital I noticed some externally think about 17, plus I've always sort of thought of us as a 16 to 17 company and so that focus on getting.
Speaker Change: Getting back to a 16% or better which certainly be cycles for the company and again with a slightly different environment.
Speaker Change: Thats achievable.
Speaker Change: Okay.
Speaker Change: Your next question comes from the line of David Grossman with Stifel. Your line is open.
David Grossman: Hi, Thank you can bring.
David Grossman: I'm wondering maybe if you could speak a little bit.
David Grossman: You're sure capacity and your ability.
David Grossman: To accelerate revenue growth.
David Grossman: Once demand improves.
David Grossman: And part of your response, you could help dimension.
David Grossman: What the headwind we should expect from the bill rate dynamic from GM that geographic mix shift in 'twenty, five and how much that may be impacting the growth outlook.
David Grossman: Okay.
David Grossman: Okay. So in terms of our ability to grow revenue.
David Grossman: We have continued to sort of.
David Grossman: <unk> operate with.
David Grossman: Strong sorry.
David Grossman: <unk>.
Speaker Change: Capabilities. So we feel good about our ability to grow in India. We felt good about obviously our ability to grow in our traditional eastern Europe, and our ability to grow in the Americas.
Speaker Change: We are beginning to see some return and we are seeing a little bit of growth even in places like Ukraine, obviously, depending on how things resolve themselves there that could open up further demands for that geography, and so I think David we feel good about.
Speaker Change: The opportunity to kind of grow revenues across a broad range of geographies.
Speaker Change: I do think you are going to continue to see a little bit of this headwind that we talked about in 2024, where as you shift into.
Let's say Latin America with kind of local to local kind of revenues with New York, There's some further growth in India.
Speaker Change: And growth in places like kind of cocoa, which is at an attractive price point.
Speaker Change: Continue to see a little bit of compression.
Speaker Change: Yes, I don't want to say, it's a compression, but youll continue to see some headwinds.
On the revenue per head count number as we as we move through 2025 would be my expectation.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Did you provide just some color until what you think that mix shift headwind to revenue growth and 25.
Speaker Change: We did not win.
Speaker Change: You talked about last year.
Speaker Change: Yes.
Speaker Change: This year I think.
Speaker Change: Clearly it depends and I think that the answer is that what I would say is we are beginning to see somewhat broader demand clearly.
Speaker Change: Continuing to see more growth in India, but we are beginning to see demand for our more traditional TV stern European geographies as well so maybe I would say, it's somewhat less of an impact than what I talked about.
Speaker Change: In the middle of 2024, but I would say youll continue to see some impact from that.
Speaker Change: Havent sized it.
Speaker Change: Okay, great. Thank you for that and then.
Speaker Change: Just in terms of the margins I think you've already given a lot of color there.
Speaker Change: One thing you didn't mention was again any headwinds from diversifying your geographic capacity will just wondering what impact if any of that's having on the margins currently.
Speaker Change: Just curious whether there is anything unique about <unk>.
Speaker Change: Your specific ability to price versus wage increases versus your peers, because I don't I don't think your peers are seeing quite as much compression as you may be experiencing currently or in 2024 and the expectation for 25.
Speaker Change: Yeah.
Speaker Change: Yeah, I think one of the things is that we continue to focus on retaining talent and our attrition continues to decline throughout 2024, so our voluntary attrition right now.
<unk>.
<unk> digits.
Speaker Change: Same park Hyatt can probably talk better than I could we do think what has made us successful over time is really the ability.
Speaker Change: To deliver base with very high quality talent, we do want to make sure that we're able to retain that talent, particularly as we head towards a time, where we think there is going to be more transformative programs. We are beginning to see.
Speaker Change: <unk>.
Speaker Change: Certain buyers come back to us, where they've had either failures or fatigue with.
Speaker Change: With other providers.
Speaker Change: Still think that the quality of execution is important and we do think that there is an opportunity to improve price over some period of time, but I'll, let mark talk about the topic.
Speaker Change: This is what we mentioned in <unk>.
Speaker Change: It works so it is kind of.
Speaker Change: Double wounds.
Speaker Change: All of these changes proportionally much guys.
Speaker Change: Ladies and volunteers and I think we tried to make sure this becomes right.
Speaker Change: To come back.
Speaker Change: Nick.
Speaker Change: With demand to be normalized.
Speaker Change: No.
Speaker Change: Yes, there is pressure on that.
Speaker Change: Ill, let agents people so.
Speaker Change: <unk> two.
Speaker Change: Some of them to other countries in central Europe, some of them to Western Central Asia, and there is a very different.
Speaker Change: <unk> been trying to keep the right Wellington creates opportunities to grow the initial dislocations.
Speaker Change: Great. Thanks for that just any thoughts on the cadence that you said margins better in the second half or the first half.
Speaker Change: Yeah.
Speaker Change: Any other color you want to provide around that.
Speaker Change: Yes, I would just say.
Speaker Change: Probably Q1 Q2, you wouldn't see.
Speaker Change: <unk>.
A substantial improvement in gross margin.
Speaker Change: We are taking the classic sort of steps chug through profitability throughout the year. That's all the things we've been talking about.
Speaker Change: Utilization.
Speaker Change: Improvement in pyramid, and then some amount of scaling.
Speaker Change: Would you want to be prepared for us we.
Speaker Change: We want to exit 2025, with an ability to drive closer or above that.
Speaker Change: Profitability target of 16% or above.
Speaker Change: Yeah.
Speaker Change: Got it okay.
Speaker Change: It is produced here well profitability increase.
Speaker Change: Okay.
Speaker Change: Great. Thank you.
Speaker Change: Okay.
Speaker Change: Your next question comes from the line of Jason Kupferberg with Bank of America. Your line is open.
Jason Kupferberg: Good morning, guys. Thanks for taking the questions. The first one is just on revenue I wanted to dive in a little bit just in terms of what's embedded.
Jason Kupferberg: In terms of assumptions on further improvement in discretionary spending obviously, you've started to see some pick up and I'm wondering if the slope of that line. If you will does that does that need to improve to get to say the midpoint at the high end of the revenue guide.
Jason Kupferberg: The underlying assumption there that you've built in.
Jason Kupferberg: Mark.
Jason Kupferberg: So.
Jason Kupferberg: What does it take to hit the high end of the range and what's our assumption on improving.
Jason Kupferberg: Discretionary.
Jason Kupferberg: <unk>.
Jason Kupferberg: So.
Jason Kupferberg: But what are you seeing as this is what you should.
Jason Kupferberg: During the previous call we've seen some discretionary change.
Jason Kupferberg: <unk> clearly different.
Jason Kupferberg: 12 months ago.
Jason Kupferberg: And we saw it in Q4 and we're seeing that as this is right now in Q1.
Jason Kupferberg: The Chilean sheet pricing.
Jason Kupferberg: Pricing environment is still challenging.
Jason Kupferberg: Mentioned.
Jason Kupferberg: And I was going to change.
Jason Kupferberg: We need to see what those.
Jason Kupferberg: But it just size this is exactly what we expect.
Jason Kupferberg: So the range is starting to happen because they're already introduced improve stove.
Jason Kupferberg: Businesses.
Jason Kupferberg: Advantages Lindsay has started to do or the transformations.
Jason Kupferberg: Skill.
Jason Kupferberg: Well scale programs.
Jason Kupferberg: G&A related.
Jason Kupferberg: This is bill.
Jason Kupferberg: Thanks.
Jason Kupferberg: So the others.
Jason Kupferberg: Great.
Jason Kupferberg: Together business.
Jason Kupferberg: As more like.
Jason Kupferberg: High end assumption.
Jason Kupferberg: Okay.
Jason Kupferberg: Huge change because we've got some.
Jason Kupferberg: More.
Jason Kupferberg: Pragmatic view.
Jason Kupferberg: Company used to be we'd like to run the change programs.
Jason Kupferberg: And we saw.
Speaker Change: You guys it was opportunity to support us in menu program swelling.
Speaker Change: We have excluded this facility build out.
Speaker Change: Very good Todd we meant to to do it.
Speaker Change: And just to follow up on the on the margin. So I guess wage inflation is eclipsing pricing. This year I think you said margins down about 90 bps on an organic basis I was curious which countries are driving some of that wage inflation you mentioned as your.
Speaker Change: Investing to retain the talent.
Speaker Change: Yes, I would generally say, it's probably more than what I would prefer.
Speaker Change: Offsite.
Speaker Change: Countries.
Speaker Change: Hey, Ken.
Ken: It would be hard for me specific on one country or another what you're just seeing is again a focus on retaining.
Speaker Change: Top technical talent.
Speaker Change: In an environment, where it continues to be hard as Ark said to pass on price increases.
Speaker Change: So we are again.
Speaker Change: But generally the U S.
Speaker Change: Been fairly careful on that expensive onsite talent, but it really is for that and the delivery locations outside of the U S and Europe.
Speaker Change: Just on the specifics of his ability to understand.
Speaker Change: U K Youll see Bluetooth.
Speaker Change: The ability to work with us.
Speaker Change: Enabled by AI.
Speaker Change: And so subsidiary.
Speaker Change: So this is becoming.
Speaker Change: Property.
Speaker Change: Trying to build.
Speaker Change: Uh huh.
Speaker Change: You just reported for zoom and <unk>.
Speaker Change: Essentially since we need like to focus exactly right now.
Thank you art.
Speaker Change: Yeah.
Speaker Change: Your next question comes from the line of Darrin Peller with Wolfe with Wolfe Research. Your line is open.
Darrin Peller: Hey, good morning, guys.
Darrin Peller: We exclude the couple of acquisition. It does look like your organic had grown head count growth inflect. It for the first time in some time, so maybe a bit more color on your hiring plans for the year geographies you plan to hire any maybe specific skill sets and then just as a attached to question to that Geo politically.
Darrin Peller: Obviously, no one knows where things are going from Ukraine, Russia standpoint, but if we were to see any change.
Darrin Peller: Around the war in any any change in terms of abilities for sure.
Darrin Peller: For multinational to operate in those areas more your head count is still I mean, you still have a decent head count in Belarus, and Ukraine, just remind us the mix of where your head count is going forward for this year and if that could impact you guys in any way from a margin or labor optimization standpoint of where you guys already have some head count.
Darrin Peller: Okay. So just as a reminder, we had net head count additions that was organic in Q3 of this 2024 that was somewhat less than a thousand but still.
Darrin Peller: A decent number of additions.
About 1500 as I indicated in Q4.
Darrin Peller: Again on an organic basis of course, we had incrementals in yours and then for Q1 of 2025, we are also expected to be something.
Darrin Peller: Approaching 1000, really probably a little bit below based on kind of a slower start to the January month.
Darrin Peller: So we are definitely adding head count as I think you've talked about although im not going to be specific about which countries is that we are beginning to see demand return to certain geographies in Europe will clearly still be growing in India will clearly still.
Darrin Peller: Hello.
Darrin Peller: Yes.
Speaker Change: We still we have seen a decline in head count in Belarus on a year over year basis.
Speaker Change: And we want us decline in head count in Ukraine on a year over year basis, but actually we did see a little bit of growth late in Q4, and the Ukraine and Russia.
Speaker Change: The resolution to the conflict, we think that could.
Speaker Change: Clients are open to it.
Speaker Change: Ed.
Speaker Change: Yes to putting more projects programs, particularly in the Ukraine.
Speaker Change: Okay. Okay. So I guess walk us through what goes but.
Speaker Change: I I imagine from a margin standpoint, some of those comps some of those labor forces that you guys have could be helpful. From just relative to the mix you had in other markets you've got to build out and then I guess.
Speaker Change: And let me just quickly that's very good point, yes, Okay, Ukraine has historically and continues to be one of our most profitable geographies.
Speaker Change: Okay. Thanks, just a quick follow up I think you've seen somewhere around four to 500 basis points improvement, our inquiries and fixed contract percent economic stake in over the last couple.
Speaker Change: A couple of soft periods, maybe just the overall trend if you could just give us a little bit more color on what youre seeing there.
Speaker Change: And the driver we've got probably three things one is that we are growing in the middle east, which tends to be more of a fixed fee environment and so a little bit of the mix shift there we are seeing some more consulting led.
Speaker Change: Brands, where there's.
Speaker Change: More of a consulting engagement and then the tail associated with build those oftentimes have kind of a fixed fee component and we probably have a little bit more kind of managed service or fixed monthly fee.
Speaker Change: And again that would obviously contribute to that to the mix.
Speaker Change: Fixed fee business as well.
Okay.
Speaker Change: Very helpful. Thanks, guys.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Our final question comes from the line of Jonathan Lee with Guggenheim Partners. Your line is open.
Jonathan Lee: Great. Thanks for taking our questions can you help us understand what's contemplated across your outlook range from a vertical perspective, any vertical is expected to accelerate or decelerate.
Speaker Change: Throughout the year.
Speaker Change: I think it's pretty much in line with what we see due to the law.
Speaker Change: Last year in quarter, So life science.
Speaker Change: This disciplined financial services.
Speaker Change: So in good good genomics so.
Speaker Change: We still will.
Speaker Change: I'll exclude those details for example.
Speaker Change: Business information <unk> covenant, because it will be <unk>.
Speaker Change: <unk>.
Speaker Change: Declines, which we.
Speaker Change: We looked last year, and then sub components of emerging including energy would probably be areas of growth as well.
Speaker Change: In general it seems like.
Speaker Change: <unk> is expected to grow.
Speaker Change: And then I think the only other point I'd say, we do expect to see an acceleration in Tac.
Speaker Change: And we are certainly seeing an improvement there in Q4 and do you expect to see an improvement in.
Speaker Change: Understood.
Speaker Change: And is that the pricing environment is somewhat challenging but what in your view would catalyze a potential return to a better pricing environment.
Speaker Change: Yeah.
Speaker Change: So this in some spots where clients are actually starting to focus more on change and.
Speaker Change: In this program.
Speaker Change: So I understand the pricing should be changed or did you see in this example.
Speaker Change: Oh listen again.
Speaker Change: Views on sort of what we assume can devote all.
Speaker Change: Sure.
Speaker Change: Hi range.
Speaker Change: To achieve this shouldn't be sampling and Linda.
So blips.
Speaker Change: Let's see what market will be we will disclose it.
Speaker Change: Okay.
Speaker Change: Joining us today I think we.
Speaker Change: This is slide <unk>.
Speaker Change: Lee.
Speaker Change: Yes.
Speaker Change: Each deal is touching.
Speaker Change: Some new unknown because with them to.
Speaker Change: You see them that much but.
Speaker Change: Going to happen.
Good.
Speaker Change: Yeah.
Speaker Change: No.
Speaker Change: We.
Speaker Change: I would say Shannon wells causes yes, Tim Klein Communications point of view, we are also trying to be ready.
Speaker Change: Right.
Speaker Change: No.
Speaker Change: Annual.
Speaker Change: Guidance and.
Speaker Change: Let's talk in three months, thank you very much.
Speaker Change: That concludes our conference for today. Thank you for participating you may now all disconnect.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: [noise].