Q1 2025 Genpact Ltd Earnings Call
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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 Weiner Chief Financial Officer.
BK Kalra: BK will start with a high level overview of the quarter.
Mike Weiner: And then Mike will cover our financial performance in greater detail before we take your questions.
Mike Weiner: Please note that during this call we will make forward looking statements, including statements about our business outlook strategies and long term goals.
Mike Weiner: These comments are based on our plans predictions and expectations as of today, which may change over time.
Mike Weiner: 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.
Mike Weiner: Also during this call we will discuss certain non-GAAP financial measures.
Mike Weiner: We have reconciled those to the most directly comparable GAAP financial measures in our earnings press release.
Mike Weiner: These non-GAAP measures are not intended to be a substitute for our GAAP results.
Mike Weiner: And finally this call in its entirety is being webcast from our Investor Relations website, and 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: Thanks, Sean.
BK Kalra: Afternoon, everyone and thank you for joining us today.
BK Kalra: We entered 2025, even with strong momentum.
BK Kalra: Building on the execution innovation.
BK Kalra: And discipline that they find another performance and going to 'twenty four.
BK Kalra: We delivered one point to one 5 billion in total revenues in quarter one.
BK Kalra: Eight 3% eight 3% year over year in constant currency.
BK Kalra: Above the high end of our guidance range.
BK Kalra: Gross margin and then just to the operating income margin also exceeded expectations.
BK Kalra: Driven by better than expected revenue performance.
BK Kalra: And adjusted EPS grew 16% year over year.
BK Kalra: Reaching 84 cents for things above the high end of our age.
BK Kalra: The ability to exceed expectations in Q1, despite a softening macro environment speaks to strength of our execution.
BK Kalra: And be highly energized nature of our business.
BK Kalra: We signed two large deals in Q1.
BK Kalra: More than 80% of associated revenue accounted for as in Utah.
BK Kalra: Yeah.
BK Kalra: This reflects the strength of our pivot to data.
BK Kalra: <unk> and other advanced technologies.
BK Kalra: That said a few additional greatly large deals with higher concentration in digital operations, what pushed out in the latter part of March and April due to supply chain and tariff related uncertainty.
BK Kalra: We are taking a conservative approach.
BK Kalra: Widening of our guidance range and lowering the total revenue to reflect slower cycle times.
BK Kalra: It is important to note that these large deals continue to be ready active.
BK Kalra: We are sole sourced.
BK Kalra: Or are in final stages of contracting.
BK Kalra: We are being deliberate and meeting our clients.
BK Kalra: We are.
BK Kalra: All right.
BK Kalra: Blame is at an all time high and we believe our ability to drive productivity.
BK Kalra: They might've cost and accelerate transformation for clients using AI and other advanced technologies.
BK Kalra: Key differentiator.
BK Kalra: As is our ability to help clients reaping holidays global supply chains are configured Enron.
BK Kalra: We are laser focused on execution and innovation, while deepening client relationships.
BK Kalra: We operate with consistency for clients regain greater market share and build a stronger business.
BK Kalra: That is exactly what we intend to do in this moment as well.
BK Kalra: And everything starts with disciplined execution and our Genpact our T plus one execution framework introduced in Tony Tony Paul has strengthened our foundation.
BK Kalra: It covers partnerships can be better.
BK Kalra: Simplification and plus one and our three plus one framework, which is establishing genpact as our own best credential for E. I led transformation.
BK Kalra: Let me quickly walk you through the key highlights on three plus one in the first quarter.
BK Kalra: With partnerships.
BK Kalra: Yeah.
BK Kalra: Partner related revenues is off to a very strong start in 2025.
BK Kalra: Up 80% year over year, and more than 10% quarter over quarter.
BK Kalra: Reaching 10% of total revenues in Q1.
BK Kalra: We believe partnerships represent a significant ongoing opportunity for genpact, given that technology services and solution companies with mature partner operations. Typically then read 22 50 per cent up revenues from.
BK Kalra: From partner 10 minutes.
BK Kalra: Second on data I think AI, our focus on delivering innovative solutions is driving results with revenue up 12% year over year on a constant currency basis in Q1.
BK Kalra: We now have more than 215, Jamie our solutions in production environment with declines.
BK Kalra: Either deploy ongoing light up approximately 50% quarter over quarter.
BK Kalra: Jimmy I revenues nearly doubling from quarter four.
BK Kalra: We are also seeing early traction with our solutions.
BK Kalra: We launched our first agent Big solutions for accounts payable in February of this year.
BK Kalra: Delivering strong productivity gains for clients with reduced manual effort and faster processing times.
BK Kalra: While we are sharing AI, driven productivity gains with clients with new commercial models in.
BK Kalra: Rental revenue is coming from expanded scope increase volumes or both.
BK Kalra: The other thing and net revenue growth for Genpact.
BK Kalra: We are seeing strong engagement with our AI Giga factory as well.
BK Kalra: Now light Red Cross manufacturing retail and financial services with the Destocking vertical service offerings coming in Q2.
BK Kalra: Since launch in January we have on boarded more than could be existing clients looking to scale more broadly across their operations.
BK Kalra: Third our simplification efforts continue to deliver results.
BK Kalra: As an example, we have meaningfully reduced time to build the average number of days it takes to initiate the claim billing.
BK Kalra: This reflects tighter coordination between our sales and delivery teams and tangible progress in simplifying our internal processes.
BK Kalra: And finally on client Vito, we made meaningful progress in Q1.
BK Kalra: And let me talk about two fronts first.
BK Kalra: Hey, I learned efficiencies allowed us to reduce head count in IP in nature, protecting margins and creating a leaner long term cost structure.
BK Kalra: Second planes.
BK Kalra: Zero is becoming an increasingly effective sales tool we are seeing significant interest from clients, who want access to scout the premier agents, we developed internally and deployed across a in IEP HR and finance organizations.
BK Kalra: Now turning to our guidance in more detail.
BK Kalra: Our outlook at the beginning of the year assumed a stable macro environment.
BK Kalra: It could be second half of 'twenty 'twenty four.
BK Kalra: The operating environment has changed significantly since then.
BK Kalra: As a result, we.
BK Kalra: We are taking a measured approach.
BK Kalra: There are key components to our updated guidance.
BK Kalra: First we are widening our range to reflect.
BK Kalra: Feast and so they may be in certain industry is driven by changes in global trade.
BK Kalra: Second.
BK Kalra: In spite of our record large deal pipeline.
BK Kalra: We are reducing our digital operations at all.
BK Kalra: Outlook to reflect a few large deals that were pushed out in the latter part of March and April.
BK Kalra: Delays in large deals early in the year and disproportionately affect digital operations, because EMEA revenues is more dependent on signing early.
BK Kalra: On data take AI, although the strong momentum has been built and we have not observed any slowdown year debate.
BK Kalra: With strong demand and conversion with continuing through the end of April.
BK Kalra: We are lowering numbers for data turnkey I out of an abundance of caution.
BK Kalra: As mentioned earlier, our pipeline for large deals.
BK Kalra: Current levels up more than 80% year over year, reflecting healthy long term demand and increased focus on cost takeout, which often happens during economic downturns.
BK Kalra: All of these do you got actively in play.
BK Kalra: And we are ensuring we are meeting our clients where they are matching their pace in this uncertain environment.
BK Kalra: Finally, our gross margin guidance remains unchanged.
BK Kalra: We stayed disciplined on cost management, while continuing to invest in our top priorities to accelerate long term growth.
BK Kalra: P S continuing to grow faster than revenue.
BK Kalra: In summary, we entered 2005 with strong momentum delivering a first quarter that demonstrates the power of our business anchored in execution innovation and trusted client relationships.
BK Kalra: While the operating environment has changed and we remain confident in our strategy our pipeline remains strong.
BK Kalra: We continue to execute with discipline, staying tightly aligned with our clients and helping them succeed in today's rapidly changing environment.
BK Kalra: Our focus on execution innovation and long term value creation has never been clearer.
BK Kalra: We have demonstrated our ability to accelerate growth across revenue margins EPS and cash flow and we will continue our momentum by gaining market share as operating environment improves.
BK Kalra: With that.
Mike Weiner: Because over to Mike.
Mike Weiner: Good afternoon, everyone and thank you for joining US today, we're pleased to report a strong first quarter with results ahead of our expectations at the same time as PK mentioned, we're seeing some delayed decision, making in select end markets, particularly those impacted by shifting global trade dynamics as a result, we're taking a conservative approach in ups.
Mike Weiner: Hitting our full year guidance, which I'll walk you through shortly.
Mike Weiner: Turning to the quarter, we delivered 16% adjusted EPS growth well ahead of the 7% net revenue growth of one point to one 5 billion. This marks the sixth consecutive quarter with adjusted EPS, increasing at a faster pace than revenue on a constant currency basis net revenue grew 8%.
Mike Weiner: Our pipeline was up from the fourth quarter and reached a new high with a healthy mix across deal sizes, we achieved win rates up 40% in the quarter with sole source deals accounting for approximately 54% of total bookings up from 35% in the prior year.
Mike Weiner: We added 18, new logos in one two large new deals in the quarter. As a reminder, large deals are $50 million or greater in total contract value.
Data check in AI services represented 48% of total revenue and over $582 million driven by demand for our tech services and data modernization. This was an 11% increase in the prior year and 12% constant currency exceeding the high end of our guide.
Mike Weiner: Digital operations revenue up $633 million was up 4% year over year, 5% on a constant currency basis. This performance was in line with our expectations digital operations accounted for 52% of total revenue.
Mike Weiner: Revenue from priority accounts grew approximately 6% over the prior year and represented 62% of the total.
Growth was balanced across our segments led by high Tech and manufacturing at 11% followed by financial services at 7% and consumer and health care at 4%.
Mike Weiner: Outcome and consumption based deals excluding fixed fee contracts accounted for 22% of first quarter revenue up 19% from 19% in the prior year turning.
Mike Weiner: Turning to profitability, we expanded gross margin by 30 basis points year over year to 35, 3% driven by operating leverage and continued cost discipline SG&A expenses were 19, 8% of revenue down from 28% in the prior year. This reflects both revenue growth and operating leverage even as we can.
Speaker Change: You need to invest strategically across the business.
Speaker Change: Adjusted operating income was $210 million up from $182 million, while adjusted operating income margin expanded 120 basis points to 17, 3% our effective tax rate in the first quarter was 25, 3% that compares to 25, 2% in the prior year.
Speaker Change: Net income for the quarter was 131 million diluted EPS was <unk> 73, and adjusted diluted EPS came in at 84, representing a notable 16% annual increase operating cash flow improved to $40 million from a $26 million outflow in the prior year turning to our balance.
Speaker Change: And capital allocation, we ended the first quarter with a solid balance sheet demonstrated by $562 million in cash and cash equivalents up from $478 million a year ago. Additionally, our dsos were 88 days three days lower than the prior year, we returned $93 million to shareholders in the first quarter.
Speaker Change: Through $63 million in share repurchases and $30 million in dividends.
Speaker Change: Our pipeline has grown to record levels across all cohorts and continues to progress well. However in late first quarter and early second quarter, we saw increasing increasing caution in the buying behavior, particularly in end market sensitive to global trade a few large deals expected to close in first quarter.
Speaker Change: Have been delayed this delay has impacted future quarter revenue timing with the impact more physical and digital operations.
Speaker Change: Given these dynamics, we are taking a more conservative approach to our full year guide.
Speaker Change: Specifically.
Speaker Change: One widening the range to incorporate changing operating environment from 2024 with a notable increase in uncertainty to wear lowing lowering our ex our expectations for digital operations to account for the delayed decision, making impacting revenue timing for future quarters.
Speaker Change: Were also modestly reducing our expectations for DTA I. Despite continued strength through April this adjustment reflects caution due to the current environment three we're reaffirming our outlook for growth in adjusted operating income margins just to be clear, we are not seeing any deal cancellations deletions or cannibalization.
Speaker Change: For the full year on an as reported basis, we now expect to deliver net revenue in the range of 4.86 225.005 billion growth of 2% to 5%, respectively, three 5% at the midpoint.
Speaker Change: At the midpoint data tech and AI and digital operations revenue growth is expected to be approximately five 1% and 2% respectively.
Speaker Change: Given that estimated range our adjusted diluted EPS is expected to be between $3 41, and $3 52, representing five 7% growth year over year at the midpoint again projected to grow faster than revenue for the fifth straight year.
Speaker Change: To provide additional detail to reach the midpoint of our full year revenue guidance of three 5%, we need to achieve a $166 million of growth.
Speaker Change: Of this 84 million was delivered in the first quarter and we're estimating $45 million in the second quarter.
Speaker Change: This means we would need to achieve $37 million in the second half of the year to achieve three 5% of revenue growth target for the year.
Speaker Change: In constant currency terms, we expect net revenue growth in the range of one 9% to four 9% representing three 4% at the midpoint.
Speaker Change: Which translates into data tech and digital operations revenue growth of approximately five 1% and 1.9% respectively.
Speaker Change: Moving on full year gross margin remains at 36% an increase of 50 basis points year over year supported by our operating leverage adjusted operating income margin remains at 17.3% a 20 basis point increase from the prior year operating cash flow is expected to be approximately $610 million on.
Speaker Change: Capital allocation, we continue to aim to return at least 50% of cash flow to investors.
Speaker Change: Through a combination of share repurchases and dividends, while remaining flexible for strategic investments.
Speaker Change: Looking at the second quarter on an as reported basis, we expect to deliver net revenue of between one point to one 1 billion and one point to three 3 billion growth of two 8% to four 8% representing three 8% at the midpoint. This translates to the data Tech and digital operations revenue of approximately 7.6.
Speaker Change: Per cent and 0.6% respectively in constant currency terms, we expect net revenue growth in the range of two 5% to 4.5% representing three 5% at the midpoint, which translate to the data and check in and digital operations revenue growth of approximately seven 4% and 0.1% respectively.
Speaker Change: We are anticipating gross margin of 35, 5% and adjusted operating income margin of 17, 3%, a 40 basis point expansion from the prior period.
Krista: Lastly, we're guiding to adjusted diluted EPS of <unk> 84 to 86 cents, an increase of approximately 8% at the midpoint compared to last year with that let me turn the call over to Krista.
Speaker Change: Okay.
Krista: Great. Thank you Mike Howard I think we're ready to go ahead and queue for question.
Speaker Change: Thank you ladies and gentlemen, if you have a question or comment at this time. Please press star one one on your telephone keypad.
Speaker Change: If your question has been answered or you wish to remove yourself from the queue simply press star one one again.
Speaker Change: Again, if you have a question or comment at this time. Please press star one one on your telephone keypad.
Speaker Change: Please standby, while we compile the Q&A roster.
Speaker Change: Our first question or comment comes from the line of Bryan Bergin from TD Cowen Mr. Virgin. Your line is now open.
Speaker Change: Hi, guys. Thanks for taking the question here, so let's start on growth and the revised outlook, particularly just in digital apps and the magnitude of the change in a short period of time as this is Brian. So can you just help us with the moving pieces here dig in a little bit as it relates to those deals that have gotten pushed out how many we're talking about or and then as we think about as you go through the year they've been delayed.
Speaker Change: But are you relying on them to be signed at any point soon to account for the implied second half sequential pick up.
Speaker Change: Or are you basically just remove those out fully in and youre guiding to a little bit of growth on the existing base of business.
Speaker Change: Hey, Brian It's Mike Let me start it off maybe AK can chime in in a moment or so so you are correct in your assertion that digital operations. The vast majority of the reduction it's not the all of the reduction is really driven by the delay in these large deals just to reminder, large deals are greater than $50 million and these deals have been pushed out.
Speaker Change: We're now well in excess of that so they had a meaningful impact, particularly in the business for the second half of the year right. Our range does not incorporate that those deals will happen in a reasonable period of time again, a deal that is signed and late in the fourth quarter and the fourth quarter will just not have the material revenue impact that would have had fastener.
Speaker Change: <unk> in the first quarter of the year right. So I think from that perspective.
Speaker Change: We feel very good about the outlook and where we are we hope to get those deals consummated as soon as possible again, none of them had been cancelled they've just simply been delayed and I think what's kind of interesting about it when you double click on what those deals are who they are right. It's interesting there will all within manufacturing consumer goods.
Speaker Change: Hi Tech hardware right I don't even look at a deeper level of it and you look at the services underneath those quite a few of them had to do with supply chain related work that we do right, which really ties into the macro which is what we're seeing a greater level of uncertainty really related to tariff related industries, which unfortunately is in.
Speaker Change: Packaging us disproportionately this quarter.
Speaker Change: I'd like to add two more points, thanks, Brian and.
Speaker Change: All of these deals that.
Speaker Change: Mike referred by a few in number Brian.
Speaker Change: Well continue to be in a very active dialogue a number of them are actually sole source commutations.
Speaker Change: Given our clients are also dealing with a multitude of issues.
Speaker Change: It's taking a little longer than we expected.
That is what is reflected in the guide.
Speaker Change: And I think I'll also point out that actually would be couple of large deals that we signed up in the first quarter that we just reported.
Speaker Change: And a higher proportion of the backyard, which talks to the strength of the affiliations that we have developed.
Speaker Change: But just from a.
Speaker Change: Granularity all guided goes more to support data that guy and I think be dual <unk> centered more on the total revenue and because our go to market motions are solving client problems at scale.
Speaker Change: Does the law suit is more characterization of the skills that we bring to bear.
Speaker Change: Feel really good about.
Speaker Change: M B range to deliver a total revenue was though improving did it again Neal.
Speaker Change: Okay, and just to be clear that the follow up on that the deals that are you currently waiting on do you see any situation, where they could be canceled or they carve enough along in there obviously proposing some efficiency measures, where you don't see the risk of those ultimately getting canceled.
Speaker Change: We.
Speaker Change: We don't see any risk off because the dialogue is actually.
Speaker Change: More and more number of conversations that are happening we had expected them to sign obviously by at this time.
Speaker Change: And a member of our team members out in front of both of these large company in Venezuela, so it be known that beef.
Speaker Change: Programs large builds are already meaningful for them. So I don't see them no any chance of getting council actually our pipeline overall for large deals is 8% higher.
Speaker Change: Or why this metric hasn't happened over a period of time. So we feel really good about the demand overall. This isn't this is basically a timing related issue for us.
Speaker Change: Okay.
Speaker Change: And sorry, if I could just touch on margin here so.
Speaker Change: As we look year firm the outlook for the gross margin and the op margin. It does imply that second half gross margin steps up pretty notably can you just help us gain comfort there on what drives that step up.
Speaker Change: Yeah, it's a it's a little counterintuitive when you think about it from that perspective, yes, with the first of all we all we outperformed in the first quarter, both on gross margin and an AOR perspective versus our expectations, which is going to carry forward for the remaining part of the year Brent.
Speaker Change: We continue to execute exceptionally well and our plus one and operational developed and <unk>.
Speaker Change: Operations and then the interesting thing is an absence of these large deals coming in large deals typically come in early on these are multiyear five to seven year deals they come in at a below average gross margin. So the absence of some of those deals or the delay in those deals and from what we anticipated them. We will continue to support that gross.
Speaker Change: And that weren't forecasting.
Speaker Change: Okay makes sense. Thank you.
Speaker Change: Thank you. Our next question or comment comes from the line of Maggie Nolan from William Blair. Your line is open.
Maggie Nolan: Hi, Thank you.
Maggie Nolan: Wanted to follow up on the large deals that were delayed are they showing any signs of pricing pressure given the changing environment.
Maggie Nolan: No.
Maggie Nolan: Okay.
Maggie Nolan: I'm, sorry, we bought them we won't sell it.
Maggie Nolan: Absolutely not really it has nothing to do with the composition of the deal.
Maggie Nolan: Scoping of the deal by any stretch like that or the competitive pressure associated with it it's literally a timing effect on we anticipated. These deals closing in the early part of the year right. We still are looking forward to them closing towards the latter part of the year, but unfortunately because of the revenue cadence pattern of it it's disproportionately impact.
Maggie Nolan: Our business growth rates for the year and notably that's in digital operations Yeah.
Maggie Nolan: Yes, exactly right and I'll also Maggie.
Maggie Nolan: Want me to close deals to land in our guidance range and B are obviously, becoming more conservative.
Maggie Nolan: Relative to the macro environment that we've been memory find ourselves.
Maggie Nolan: Hum beginning of this quarter.
Maggie Nolan: But we are not seeing any pricing pressure in our solutions that actually picking automotive strongly.
Speaker Change: Okay. Thank you and then you mentioned that it was largely unlike manufacturing end markets is there a particular concentration of end markets and segments that you split out the DTI versus digital ops.
Speaker Change: Both manufacturing and then you know any others as we think about what might be impacted by the changing environment.
Maggie Nolan: I wont say there is concentration Maggie.
Maggie Nolan: Actually we have all the game from a very diversified.
Maggie Nolan: Set offering best fees that we work with.
Maggie Nolan: And then.
Maggie Nolan: You don't need to deal with some of these deviations that come in and yes, we have oh.
Maggie Nolan: Strong client base in manufacturing and CPG and retail and all of these end markets.
Maggie Nolan: In times of more uncertainty than a better end markets.
Maggie Nolan: Thank you.
Speaker Change: Thank you. Our next question or comment comes from the line of Jacob <unk> from RW Baird. Mr. Harry Your line is open.
Jacob: Hey, guys. Thanks for taking my question I, just wanted to touch on what kind of deals are being affected here. The deals that are getting pushed off. So you guys mentioned that these are longer term in nature, just kind of curious if these are more cost takeout deals and they're still getting delayed or are these more discretionary more transformational.
Speaker Change: So a lot of part D b.
Speaker Change: Oh Jacob bar in <unk>.
Speaker Change: Supply chain, so far a lot Joe.
Speaker Change: Consumer goods company.
Speaker Change: Big program that we've been running and now this is a large transaction in supply chain.
Speaker Change: And this is much bigger than $50 million.
Speaker Change: And Oh.
Speaker Change: These are I won't say that.
Speaker Change: Not just cost take out obviously I mean, you'll be solutions have significant productivity that comes in over a period of time over a five to seven year period.
Speaker Change: But they are also they are always improve the outcomes to so there's always an efficiency and effectiveness liver.
Speaker Change: It gets deployed with all of these solutions off.
Speaker Change: It didn't take on Jamie I or any of the other.
Speaker Change: <unk>.
Speaker Change: It is a.
Speaker Change: A number of these deals are M D.
Speaker Change: Ottoman views and markets that you referred to.
Speaker Change: And most of the deals that actually came.
Speaker Change: Came in contention odd in those market and those market goes deals continue to be.
BK Kalra: In very active dialogue. It is just taking a bit longer than our expectations to close one thing just quickly add on as BK talked about these are very large deals that are in excess of $50 million, which is our definition of large deals and yes. They are over a long period of time. These deals are contracted for five to seven years wouldn't be.
BK Kalra: An unusual component of it and just for just additional point of clarity on that.
BK Kalra: People don't come in and buy digital operations or data Tech and I for from US. These are solutions and in many of these large deals if not all of them. It is a component of both right. So I just wanted to make that bifurcation clear.
BK Kalra: Thanks, guys.
Speaker Change: Thank you again, ladies and gentlemen, if you have a question or comment at this time. Please press star one one on your telephone keypad. Our next question or comment comes from the line of Sean Kennedy from Mizuho. Your line is open.
BK Kalra: Yeah.
Sean Kennedy: Hi, everyone. Thanks for taking my question nice to hear that there were no deal.
Speaker Change: Cancellations in that data.
Speaker Change: It has remained strong year to date so for data Tech AI can you provide more detail on the outlook for different customer end markets.
Speaker Change: So yeah I mean.
Speaker Change: The way, we don't really think about it from that perspective, right. We think about it when we talk about our data second AI revenue Disaggregation, we really split it between the deals that are greater than 12 12 months in less than 12 months right. So the larger deals that are greater than 12 months really associated with these multiply multi year.
BK Kalra: <unk> deals right, which performed exceptionally well, particularly in the first quarter as BK alluded to these two large deals that we closed had a larger proponent of.
Speaker Change: Data.
Speaker Change: Data Tech and there we are sitting on a record pipeline, which we're working aggressively on closing them down and so we've just taken a very conservative prudent approach on our forecasting on the shorter cycle retail type deals that we do that are sometimes more more susceptible.
Speaker Change: The volt to discretionary buying.
Speaker Change: Buying behavior of our clients.
Speaker Change: And that's really what's reflected in our guide.
Speaker Change: Okay, great. Thank you.
Speaker Change: Thank you. Our next question or comment comes from the line of Puneet Jain from J P. Morgan Your line is open.
Puneet Jain: Hey, thanks for taking.
Speaker Change: Microphone <unk>.
Speaker Change: I wanted to follow up on like all the questions on <unk>.
Speaker Change: A question around <unk> guidance like like the only issue is that around.
Hospitals that are in pipeline.
Speaker Change: But that shouldn't have much impact on second quarter.
Speaker Change: Cool.
Speaker Change: So are you also like had been for some quick math.
Speaker Change: Smart.
Speaker Change: That have already ramped up that the impact in second quarter.
Speaker Change: No I think we feel really good about our second quarter right in terms of where those numbers are irrelevant of those large deals as BK alluded to.
Speaker Change: From that perspective again, what we've that we've talked about not just for large deals but for also different sized deals across both the revenue categorization of tier one data tech at just much more prudent and conservative view right and a greater level of uncertainty and that's really what's reflected.
And our <unk> and our outlook now that said we are sitting here.
Speaker Change: Well into the quarter. So we feel really good about that alright, so way that I talked about in my prepared remarks as to kind of think about our business and think about our three 5% growth that we're forecasting for the year, three 5% growth and arguably about $166 million for US we took down 50%.
Speaker Change: Of that growth in the first quarter alone, we're anticipating taking down 45 million, which is about 27% of that in the second quarter, which we feel really good about so if you think about it from that perspective, the second half of the air really has us projected to grow about $35 million or about 22%. So it does give you some.
Speaker Change: Sense of how we're thinking about the year and how we're approaching arched are pretty conservative guy.
Speaker Change: <unk> really driven by a lot of the uncertainty out there.
Speaker Change: Got it got it.
Speaker Change: And then second like.
Speaker Change: You like compete for some of this lost like but do you book, an AI driven productivity reporting requirements.
Speaker Change: Five.
Speaker Change: Five years.
Speaker Change: What do you typically come with their customers.
Speaker Change: Thank you.
Speaker Change: So overall, especially in these large deals for me there is a holistic solution that walks him.
Speaker Change: Traditionally obviously, we will became.
Speaker Change: Miami.
Speaker Change: Solutions like lean membrane predictive analytics came in.
Speaker Change: Including machine learning and AI.
Speaker Change: I came in and now he's NPI has come and it's always a holistic solution that we bring in.
Speaker Change: Driver <unk> bin.
Speaker Change: <unk> productivity for over a decade and sharing that productivity with clients.
Speaker Change: This time is no different gifts tools are far more visible tools are different and tools are better.
Speaker Change: And therefore, the now five to seven you're a large D b productivity that anywhere from 30 to 40% to 45%.
Speaker Change: And over spread over a five to seven years and that's how you know and it stays in a very competitive zone.
Speaker Change: In our markets and number of being the sole source deals as well.
Speaker Change: We are comparing to be best in the industry.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you again, ladies and gentlemen, if you have a question or comment at this time. Please press star one one on your telephone keypad.
Speaker Change: I show no additional questions in the queue at this time I'd like to turn the conference back over to management for any closing remarks.
Speaker Change: Thank you your hormone before we wrap I want to thank our entire team and claims I am proud of what we have accomplished together and I'm confident in what we will continue to build one quarter at a time.
Speaker Change: Look forward to sharing more about our strategy prior to your long term outlook at our Investor Day in June. Thank you.
Speaker Change: Ladies and gentlemen, thank you for participating in today's conference. This concludes the program you may now disconnect everyone have a wonderful day.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: [music].