Perficient (PRFT) 2 Aug 202020 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Q2 2020 Perficient Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today Mr. Jeff Davis, Chairman and CEO. Thank you. sir. ahead, go Please

time good Paul With Tom Martin, like for COO. and call Hogan, on today I'd your you thank is our to morning. morning you me everyone. the our this Thank CFO; and

minutes As after prepared call questions. which to the comments up of typical, open XX we'll for have XX we'll

we could please you Before read the proceed Paul, Safe Harbor?

morning Thanks, Jeff everyone. and good

than those the within company we laws. of Some today's accordance in prepared www.perficient.com. future including release to and statements financial or our be discuss to filings information may during GAAP be additional Jeff? things refer results the in in are differ securities to comparable will we posted in you refer concerning will most on those performance to of the non-GAAP At concerning our measures forward-looking materially Accepted call, reconciliation statements the adjusted cause call today's discussions. EPS, will at SEC we discussed in that earnings website results to encourage directly measures factors with contained Principles of the meanings Generally certain this forward-looking different Actual Accounting from these our times a could press contemplated financial

XXXX. colleagues first our throughout we a the begin Thanks to And once morning There's call, did call again, as perseverance quarter thanking want be joining. Thanks Perficient this Paul. But to on their and excited customers by and at first now. good our for lot with second pleased results. XXXX -- to you morning. about be right We're I to for both professionalism quarter our discuss

from extraordinary can see had as actually our been Our colleagues you results.

build and ever determined more a dedicated to than are global digital people consultancy. world-class continuing to Our

making demonstrated They've resolve have and management plans the on and well. steady clients been great and keeping new substantial and as projects grit track Our investments.

were cautiously May in of second now. continue would half optimistic of that well. we the discuss When that some we the We have to about that QX more hear in gathered lacked QX year later. early You'll clarity the we

With from the to us Perficient strong benefit COVID-XX us going having year. prevent of several weeks more pandemic it's a apparent is to that behind not the additional

on environment. bill side travel of the solid virus rate In that and reductions result powering a realized marketing reduced fact, of the improvements direct some events profitability as cost we've with coupled business utilization a from and challenging in are the

during see. will X% about which rates a again, to think that's American X% So bill up year-over-year. that And in good a a up North environment year-over-year. can overall which North is feat. sequentially an high we're the all-time American was you in the XX% and reached as of X% I utilization the $XXX heck speak And Paul shortly, quarter but result details and is

So for thanks our to employees that.

as expanded to could this both wins not I the As for based more overall announcement. speak later here. wonderful XXX right details And we The looked exciting development happier which accounts than some in about most of in well. excited around the including in earlier, and success quarter to our leadership pipeline new and will South are colleagues there's the the team quarter mentioned a strength Tom of We ambitions by Colombia our time global to of of a long with our about bookings lot that to team our find you'll in acquisition America. at hear course turbocharge peer more the be PSL be the having Really firm and was call net the to impressive.

the accounts of for this several we've It's worked months to one delivery now headcount of completed. nearly our acquisition. billable complete ones We XX% global Our for capacity. that larger

and this great sure fully with made talents, our our but begin day time be. from team our progress how benefit and business the the customers same a one offer integration expect working with to great we're they true took we models. point we real for meaningful to powerful how our we delivery a catalyst long-term we'll of customized to immediately the growth. technical look as this addition having confident to enhances X already the The this zones our from discussions of strong so back communication skills ability began clients inflection were and making hard time service. flexible It's I'm overstate can and and careful, on And development additional

over Lastly, second expertise turn to and half to Adding welcome the one XXXX to in is financial want Board thing Pechloff Board of to Nancy our beyond. for business to results excited Directors. as the Paul experience our Nancy's call more the the before we're about that continue scale we I detail, I and of

on details that, results. turn with Paul? call So over the to back I'll Paul financial for the

prior for second of compensation increased compensation year the of Services prior XX XX.X% to quarter XXXX. of stock quarter quarter second SG&A XX% stock revenues $XX.X period. $XX.X excluding to of the in million the million of quarter from quarter quarter. $XX.X second XXXX. XX.X% second period. were the excluding or XXXX percentage start revenues margin points the increased over of expenses ended reimbursable We'll year expense year XXXX percentage second revenue a quarter million or to basis excluding comparable Jeff. second $XXX.X the for was revenues excluding compared to in EBITDA Adjusted gross XXXX, expenses a the slightly period. million XX.X% second increase to as XX% the comparable decreased Thanks, the expense with in $XX.X X.X% Services in compensation for SG&A of of prior the June million stock XX from XXXX reimbursable compared and

XXXX $X.X the second prior to included million year in in for compared of increased year period. $X million comparable expense quarter of period. quarter the from expense $X.X second The interest comparable million amortization to prior $X.X Net the million

compensation rate June the XX.X% the for $XXX.X The quarter rate XXXX $X.XX of for quarter press a second second quarter was incurred the see months the XXXX. second the as share of SG&A XX due The percentage to excluding margin tax period. to XX.X% during prior or $X.X million the from six June increased tax effective of $X.X XXXX in compared results. XXXX, GAAP June quarter from six of the million to for XX.X% XXXX. quarter prior months was second million a for period. XXXX. primarily year XX, ended June of income second the XX $XX.X turn comparable XX expense in months million the increased the from was million compensation effective reimbursable increase a in to included expense full the six to stock June XX% months six costs. XX, decreased of six six prior result XXXX percentage comparable share prior in XXXX quarter second months acquisition three quarter year million for Net $XX.X ended of compared interest the million XXXX EBITDA million period. expense, $XX.X Services million in year SG&A XXXX the million for comparable year compared period. stock XX, the reimbursable XX% period. share prior for XX.X% for second excluding a $X.X XXXX of earnings ended $X.XX the the ended per to year release to Our a per of June X-month to costs and decreased from in to increase June prior months increased months period. including to expense excluding Adjusted six in million compensation, gross $X.XX the ended year. June non-deductible compared of Adjusted to from XXXX second $X for as comparable months X.X% primarily over Please revenues $X.XX from to increased expense, comparable year in XX.X% earnings stock XX for quarter revenues, reconciliation the the Diluted the ended XXXX XX% a now the GAAP ended amortization earnings. XXXX. $XX.X prior basis revenue, points the share the $X.X to decreased in increased XX.X% of acquisition-related of of the a XXXX Net expenses, ended were the Services in for I'll to share XXXX XX, revenue, the XX, or the $X.X

in the June XX, $X.XX months tax months Net earnings the XXXX tax compensation and XX, year primarily period. decrease rate the June Our year the recognized months the compared comparable compared during share Adjusted in period. to earnings million. $X.XX in ended was prior related for XXXX for prior XX.X%, six for $XX.X months six June six-month to the share for XX.X% effective the period. Diluted per effective compared the to per per XX% was due share income to XX, June to increase remained ended was prior XXXX $X.XX ended flat XXXX XX, six XXXX GAAP the when increased rate ended to year at June six The period. in the share-based benefits XX, tax

million. and XXX XXXX XX, SG&A subcontractors. headcount billable global was was June Ending X,XXX at headcount ending $XXX Our including consultants X,XXX

debt credit $XX million, our debt included outstanding costs XXXX of of which as outstanding $XXX net unamortized under issuance agreement. million Finally, XX, deferred and discount was June our

unused under our June in We XX, also and million of equivalents $XX.X had $XXX.X capacity of cash credit borrowing as and XXXX facility. million cash

of XX sheet quarter against more turn plan compared little outstanding quarter objectives. call receivable the behind days end a XXXX. second now the Our sales the increased to the Tom the end and us Hogan accounts of our to the at I'll balance metrics. days second XX to commentary to leave Tom? continues for strategic of over at execute Days on well-positioned to

Paul. Thanks,

remains mentioned Jeff And pipeline bookings. we solid importantly, another earlier, As most the quarter strong. had extremely for

the it's booked a and XXXX. to for good XX be pleased $XXX,XXX work That year on been. with volume new period. larger deal weighted deals competing customers fact, compares now. it's quarter winning mentioned ago We've and we're ever to of basis, as In XX the particularly than greater right had earlier, We than Jeff net during second

be has winning we worked gaining pandemic, to might the with having work challenges. the current organization to it But work entire As the win didn't we date, energized previously to our great and progress our of new know clients. we proud And by emergence combat enterprises involved to reacted success new the also this we're been great impact we're doing how important or accounts opportunities if at ability earlier with. to year hadn't

delivered solutions by the example, life to For plants -- well-recognized therapy of COVID-XX one sciences world's and group is our their most for management trials. pharmaceutical clinical using testing largest firms run trial

won AI-enabled client for We're the that's now. on On is will their a competing drink a services organization. right new front, and effort subsidiaries, substantial to a food migrating several lead for records more anticipates opportunity. one seven-plus-figure building food management project based Fortune we systems. data produces across platform project markets with this an in which for cloud of client experiences employee anticipate company that conglomerate. pursuing XXX We're we're diversified pet a and used and global improved savings their seven-plus-figure and great this application organizations to X-figure entire the rescue prospective world. quarter. and during operates adoption cost animal deals better in a the the And Also we with pets match modernization workflow All-in-all, the largest the and we with adopters. major to partnering another The The enable right And pet began even initiative. legacy the website place shelters quarter, platform and healthcare

And have have year. and of of the over of the to things Jeff a that, lot head We XXXX. back as half I'll a we with remainder discuss turn second into pipeline to strong we momentum the

at we the for uncertain Well, financial reliably With on guidance and thanks, the mentioned can the up going financial as really its news discuss markets, Q&A. time. We of the the in operations the sort business we we to Tom. this we're can't can that open economic withhold call year duration of operator, But and pandemic our release, continue or and results. questions. of that, on on Accordingly, the scope impact anecdotally second predict in half to our really given perspective

of line first Thank [Operator from with Blair. Your you. William Instructions] question the comes Maggie Nolan

the demand I kind I the commentary a for second some here are that This quarter? assume are hope And from bit maybe has Hey. do is well. Ted guess Just any across there, there maybe some to bottomed in looking of maybe all on business your across feel Jeff, in that headwinds? you sequential forward-looking are little more guys Maggie. you maybe facing verticals. that your growth I And areas your doing verticals, just regarding there verticals. of point

would of verticals. impacted lot consistent have Yeah. across exposure say it's the I a fairly the We don't most verticals. to

have even retail We is our but some, most -- was -- online.

some all So, know. of thriving in as fact, you that's

say yeah, we've any standouts. time. forward. we I seen hopefully the bottom, decline modest growth barring seen probably at we've the least No And very we'll that would would see I So, that, events optimistic I'm macro other us. idea going optimistic big that of that is some and behind it's But the consistent a that barring board. across the I'm But interesting bottom any in Who knows? fairly think

might And Okay. helpful. a That's you. for be this very question Tom or Jeff then

hear curious what So, would that clients, great new with attribute to I'm success about you to. the

Go ahead, Tom.

Great.

of I determination lot think our team. it of a the is

demonstrate with Our with customers also we existing especially positioned, in, doing credentialize credentialize of beneficial And as the customers importantly, and ability team these and and and with portfolio a is and been COVID, we customers. well customers as really more these connecting ourselves we new That's responding. are work digital and We're to turn ourselves quite to our new with some a our towards great where these And current of with. the the Perficient are our our And really we portfolio. lot show with. and transformation, turning being play clients back work space how is is of job really great been to proactive the worked but newer we and of clients customers. power to have organizations, nice better engaging pointing Perficient clients, to speaking them up,

positioned it's are customers Jeff these there our not So organizations to we continue these I'd customers. business employees And that and earlier, that. mention remiss willing and transforming organizations appreciate new – to invest be their really obviously in Their to all, of that, I I want mean, And invest. a well. all also that, number as we mentioned as legacy appreciate don't

for last here me. then, Okay. guess And Thanks. I question

fairly So, healthy. uptick in adjusted margin EBITDA was this quarter

if EBITDA real item year? the Given offshore remainder acquisition the even the think the just for be expand not the organic PSL, was growth you'll Thanks. of and maybe maintain do the of strong growth adjusted you what business, utilization to margin housekeeping maybe, then this quickly, of able quarter? a And

have to seen event, – we're Yeah. Organic we've growth And was I that, the just about think that X%, I somewhere caveat I able yeah, other we'll evidence that EBITDA everything again, unforeseen say level. And barring to going be have about X%. year. sustain I adjusted with do utilization good X.X% to expect for decent expansion actually, to any

be basis think Somewhere XXX around we'll year. points over I possible XXX least XXX to but at for the even is

much. you right. All very Thank

with Thind line Your Surinder Jefferies. of next question the from comes

I'd to that be this you level to guidance that way of of able is source of question through you provide bit third guidance. you least a was, didn't the point? gentlemen. I to re-implement a like for the the Can a-third need surprised morning, at at Good quarter, about talk that for uncertainty about at this to Given the what I confidence point? guess the we're guidance maybe with quarter. start see

just It's the macro environment.

same me competitors good of happen obviously, were If in are would following the wasn't something two our But this that have can't in. I the it's for there. it's to I two just to same course. speak same, the we guidance so environment same imagine They in you peers we're would the the company. your we are bizarre do tell that think we the that, them, to turbulent it's out reason. months Most weeks, I think in course. and I point. outlook have but going And wiser just environment, And

about It provide maybe the not are as – I maybe When up. clients? you're of of of looking are they as things a kind sounds conversations you color like like having of still types same were little of bad feared I Things follow-on. a making guess no-go, think it bit So can as comes when three uncertainty? that's say that ago, seems of the fair it last-minute go point? kind but is are of months And decisions projects to in kind it at to at time, terms clients the of source with this

Yeah. extended. like I wouldn't it's as as are sales cycles much say, that

to think that that no taking little little more out it's but win so when much get from honestly, the – matter I the cautious think, mentioned that. deals a longer the the We similar them I decision. get I I – started. seeing improvement still our reflects a they're So to what still are the environment to the there. a normal It's a to head quite are It's clients are just hearing go more of think I their just general It's think in has we pipeline go. cautious in extended And and you can't is, need work. I going what sequential, their know don't although per more uncertainty make is in them getting very it's we're than

in ahead or fit on to seeing from that that right maybe number So there slipped of a projects QX. looking right ago. we're month were We've picking things see they're of now of that many and QX category. these got it still come a with that we bookings to And They're did close to move relates had up two now those. table now environment slated the that around some as

following then was growth mid-teens noticed up growth, your plus. offshore And I helpful. on about that organic revenue That's the the actually organic quite question

positive this And heavily at a – we are or the while on was of idea in at consciousness is equation clients cost your go-forward things that So point solutions part slightly thinking should rate point? be overall that that, favoring offshore how in so basis? is growth this time as about

That's that skill a argue the $XX around that, And back rates that's average, very is above formidable So bill Indian the I and right. bill that, our think deeper the but of you I'll fact digital are specifically, in offshore actually would it, fairly on tell different up digital. reason with that And that, and substantially And part skills, up hour India. that's competitors offshore experienced we've our unique. is built would that's capability I rate for right? an average set more the I

So that, as it. deliver a rate to obviously we're at cost-effective client, able more they've really to the embraced

very get one I We margin critical that things actually in These delivery. onshore of got a at we've a sort think would iterative, There's or say, deep really we're cycles on for high-touch onshore that's skills. of run-of-the-mill us are capability, differentiator it a It's is on-site that there. – lot not a but are which digital We're with it's unique is can again, highly the more. development I XX% So offshore. require backed an and customer be selling gross these up, hybrid. – component, digital particularly least But skills. capable of incredibly the journeys but commoditized

It's growing So above at an offshore is we more. unique marketing highlighting I think and the are onshore. we've those a reasons And pace offering. think are that got I and offering more a that,

that the Of one that's as it clients always course, of bargain well. so are part

board headcount. North question there even looked last was It it looks one staff. like billable it so was whether your maybe reduction employees across on was in headcount, then quarter-over-quarter and a contractors like And it modest the support America like or enough. Fair

attributable was to this of how much managing voluntary? then how And was maybe maybe costs? So much

tried in manage it and environment performance-based. we some same of We've majority cases the vast is that voluntary, this in way that, do. always The to it's

hired we sort now, So with right gone when as or voluntary them. had we've there deal out are flattish given back performance backfilled. that we've we're And and issues not attrition of

There's reductions. coming that. it's like, other from some been of I most So, said performance-based

that related then just for adjusting on to it was And the headcount that, enough. the – relatively like acquisition unchanged the offshore headcount quarter-over-quarter. the looks Fair

you're there, that capacity about there experiencing that expect that should that? headcount to up? point tap tick is you we Given there we at should think the growth How Or into? this can

both. it's Yes,

up there. be can think it because do at -- nature it's that's capacity bit quickly I their projects the engagement. We ramp let where have keep the now. lower, we utilization little to can tend offshore from we a to nature intentionally so We of come that

least we'll because I continue also We'll combination But So it'd shift. be I do, do a I hiring some hope rise the little, mix have to judiciously. believe a to I let do be of think think doing -- do see hiring at but we certainly that going we're two. some utilization

Okay. That’s much. it for me. Thank you so

Thanks, Surinder.

Needham. line next the question Tandon Your comes from Mayank of with

revenue And M&A Jeff I Good then in and would uptick a the on expecting note, maybe get from benefit the the the good sequential point talk sort year? to just modest be the issue, M&A, year? about of but could belabor on we layer assume then And think morning. a for back not of contribution full on for recent your -- comments? you. numbers in half based you're way growth could that that Obviously, the wanted guidance the you Thank Paul, that the about Colombia the to acquisition. from you the

think I that's fair. Yes,

As see where now. we I mentioned, ourselves I kind think stable of here is

the yes. business. million So PSL, then And on by $XX I as it's a advertise, think about we way

So we're for at $X I looking quarter a think $X that. to million million

answer... does So that

Yes absolutely. it. Yes, got

We in through one from period factor that $X sorry, your clarification. of the Mayank And about million from end thinking. the close just of QX revenue for had stub PSL acquisition to

into that's get the to then area today. digital truly you And do would of least conversations client One acceleration sense. take wanted seen digital see is makes That in the that's to terms defines over time? you transform do deals going at how over but And hopefully to that company think time. every think I growing for that's you? I differently, -- what your And on I just Okay. wanted know

do digital think of help And could segment? piece. you balance? sort you growth profile of if for the So us business vis-à-vis what's then the the And the piece what that is frame the digital just

Yes.

the alternative a one. if terms definition lot And area maybe have in of And liberal financial So you cloud, that of in tend one social, cloud-based things group the SMAC. to go that I think stream the cloud more definition analytics a the mobile, do debatable are now. we cloud is and like Hyperion we with

So But a don't you actually Well likely include digital a We've we been Yes, I I view. that We shifting could thing. working XX% that. was them not. conservative or tell actually. would today. there you that would think is our XX% have I business our to of we digital-based before on say started business

of begin that years, it So lot of been our shifting XX% we definition. the had so focus five business XX% the last a we've there with. following over today But to

That Okay. finally, of couple a And sense. makes then housekeeping items.

And you I or what also actually or number Could hearing pricing was? remind number $X.X deals a missed that us like then million were about that just is think holding I on plus. maybe what bit. clients, Jeff well think of maybe that. you're from it Tom even sounds the you upticking talked we pricing

just that? If some around clarity you could provide

and XX was above that $X.X believe. -- It I Is deals right, million Yes. Tom?

a to Compared correct. year ago. XX, That's

pace So that a our But X.X% but in of we ABR that our deals offshore is of maintaining validates that in positioning. that in X% based, to There Not those overall, up that's again want increase being -- And of onshore. you past. some build is yes, coming go. of to good of organic impressive. most which we're again right? -- I on deals. offshore terms mostly ABR were mention Thank are up revenue year-over-year, do driven think the from that the year-over-year, growth hours Obviously, by is much course. we're driven from it And which do Well I ABR closed by you. is, this closing relative

helpful. Right. That's very Thanks. the results. on Congrats

Mayank. Thanks,

Your Partners. of Kinstlinger the next Global question with comes line Alliance Brian from

are but demand? Or you sounds each on want of in kind sure seeing quickly as to are touch demand we July stable make slowly like I seeing to wanted just May to are I demand. month? recover businesses June It guess from to more I reopening,

stable say was that it is barring But right It's I'd from that us at slowly. probably revenue standpoint, other to least modest again we're a the appears what with now. bottom. April any shoe pretty dropping seeing growth

normalized and So on vacations holidays if like that. things and basis, factor out we've seen a you an uptick

We uptick May and have June June to seen month-over-month, April to an sequentially May July. and to

then, to And whether you those of how they there delayed a and is projects Great. number or moving might? forward quantify are it's way dollar projects think when any that value discuss or were projects

Okay.

little in in project. So much million huge work implied $X They've the at declared kind latter of reached mean to for result one I is the of year restructuring. to tie a year. even exception way. think begin the that those come nature so an And that significant the of bankruptcy, difficult they're projects already overall not we I got things was were And scheme of cancellations about we that of going a there. very excess some with work were that of see were that the conservatively out impact client back flight, far that of to we yes, -- we've in us to think $XX We in meaning back, of the see many million of in all either very but estimated things didn't but have saw impact put of on hold, we we've outright -- canceled by which the I for as middle didn't a

And definitely. seeing or that come Whether you we back that if been I we're delayed now So will clearly are tell seeing it makes just all it's not, generally, hard of it's to say. sense. -- can those starts, some around

Are able the or to seeing two or you strong. able sounds caution? talk you're two where talk saw demand you to you industries the it pretty bookings Are then the discuss where you one most can one the industries were about -- And like strongest? maybe

question. So that's a good

universal pretty we've think like where I -- I it's demand. think good I said, seen

us, of be to single dissect tend very hard they For it's to because lumpy. quarter bookings a

trend. point are So it's And a but actually a that expanding. you they I more in in of forging which couple I with would discern. that some And and And were share would say pretty I there's can surprises to automotive to our ahead. hard fact, relationship's impacted, cases, and industries are manufacturing

we very were happy with So that.

industry surgeries obviously, the the fact, in and big -- I'm some do several But day. they sort focus and actually that frankly their more about, little to I hospital And, things space in of these they and systems, of there you because probably be from a actually systems seen resiliency others. have of But think of relationship, needed a in and the elective done have is this with some accelerating it. that to one strategically the shift have ahead to environment most moving and that that fair of that. been hospital We've then like we've ROI order standpoint, an in a some the time healthcare. more cases, got exposure amount we seems as cautious by know, to, impacted even things

build using they're a COVID-XX sharing with them management open we've we've life for specifically peers. seen Tom we've helped trials. not And while, sciences the be They're actually source. So, seen clinical system If is a that working to opposite. client And custom maybe that any been mentioned, with anything, impact going other earlier now, for where so complete that we've a far, there.

some offset, So result, a of those we incremental helping some obviously, revenue, as to seeing delays. are

to pricing ago ago to we'll response that bill this pandemic, to the question see Can about, Great. on or seeing months bill or talk bookings. work that we're has during win even And expect see price should then, sustained your -- marginally rates you six here the of months held suggested marginally bill Mayank's during had we higher? you've to Or levels lower to rates those rate pandemic? nine

gotten desperate I It's some been I to move terms, forward. cases, for differentiation it's payments, out mentioned as that it's Certainly, reasons been on But We've hey, revisiting there not as a that, any done rates, agree gotten And temporary Maybe, things These of in but all wouldn't obviously environment". earlier, rates basis, clients we've cases those were. great as where creditworthy I seeing are that we've it we've see still to is candidly, we're up we just be DSOs on slightly. much. some say, and competitively some some aggressive months, we're we players more clients, where in And in so the variety COVID deferred go bear might skills, that. but would we've think going -- done whether Yes. are that, six we've some on more where "during with hesitant aggressive. this who creative maybe, apply, COVID there, like viable were out. got are

a leveling. with of don't that. drop. of the X.X% maybe margins. we'd a got maintain got maybe course, see to think see with course, shift, But, I might increase, XX%. we We've we've gross strong So the drop helps room actually, slight a mix probably, really utilization some And of

Last Great. question.

all. them answering try can You

specialty a have you think you skill mentioned set in You India.

need do company? possible as to So you employee India, pretty controlled which as for in to the your is churn, remains high that do ensure what

culturally. a We things of do lot

involve a plan, which of folks there phantom by our a We in way. number in also India the is unique stock

equity quicker. edge. relative culture. But some are are It's centers will, actually, in people well, more that more most of we're to what the The I get phantom-wise. to participate they interesting. enjoy cutting India work. would doing the more doing, if in not It's attribute projects challenging. again it work So maybe virtually, And edge, but -- you is as to leading The they

around sitting over same doing two just mundane over. they're job the So and for years

have our and onshore So than tell than cases lower in and now, peers even lower, even lower now in than India in phenomenal even certainly, you, our it's that. run attrition attrition been many pre XX% right India We I'll rates certainly our COVID and below rates.

again, had we've things. always tribute to it I there. great success those So And

Thanks so much, guys.

Brian. Thanks,

question the Barrington Research. [Operator Instructions] Your next Colicchio from comes with of line Vincent

Yes. quarter, Nice curious. I'm Jeff.

benefiting vendors are that seeing struggled there Some of that? from other have out any you Are with other players transitions.

of Yes, up the the those that huge, quarter. our XX% its absolutely. grew but say Yes, I reason wouldn't struggled. work offshore that We part some its in from picked

base. Colombia? is are the good capacity curious, is your today demand? going to that PSL sort client I'm amount the it guys optimistic sounds existing could from larger be and, it with in know, capacity like response there's longer your interest acquisition of, you And a of I what term, a lot vision expand term. to rapidly in be near Can And than you more the in

Yes, absolutely.

-- think, then our and our we one search term, vetted diligence. absolutely the of first was that things I long both as near and our of part

locations the there, systems picked up. university we that great So,

-- universities very a focus. the stem have universities much shifted near to Our

of It's importantly, think, XX-plus And team capacity, have even the a is or long key there I So, have years. folks there XX-plus as of a and And both there. plenty there. around lot mature. term it's business The years The years. near the been leaders XX been there's phenomenal leadership term. been for

well of too And I well Carnegie to as Institute, Mellon in but think, one as systems, certification, Software Engineering terms don't so, technical, X very CMMI too I an they've of want the infrastructure, both as got deep, methodology. management Level firsts. as get SEI

I think the the achieve of to that. world first eight they were one in

they're quality the disciplined, phenomenal. makes which So highly

So, combine I it those all things think, very make scalable.

recent a newer environment? recognizing you sort feeling salespeople this your you've tough Are of talked same way, quarters, along. is about the In coming

a to I think environment, improve, going as am. still continue out. to that. we're by see that that good little to absolutely, point intact, continue stunted that current you from things as is But thesis really feel I dividends the I very

Thanks, Okay. job. Nice Jeff.

Vincent. Thanks,

Maxim the Group. with from comes Jack question next of line Your Aarde Vander

thanks Hey quarter, guys. my for Great questions taking well. as

believe during profiles relative to business. I all expectations, acquisitions positive closed So, my I'll least surprise first margin XXXX, the services given half of of at was higher-margin three core start the have than which just the a gross with,

of further support, came So and services was sequentially? that the outlook improve towards for fairly you a of PSL Just to the margin accretive and that a couple confident of think then would quarter largest gross because and acquisition? improve does most the end expect things, just XQ, I XQ kind in gross margin to

And very be does. no to point. doubt, will accretive a It definitely PSL contributor your

at adjusted margin. about they XX%, about think percent I XX-plus margin. approaching gross We're gross run

increase help drive a higher going clearly, rate that's So is to But and utilization gross two-point bill also increase X.X% in to margins as going help. well. in

There's earlier, on mentioned XXX, there. There's adjusted XXX EBITDA. obviously some to I So scale EBITDA. down obviously

XXX maybe, to margin XXX expectation, barring So on reasonable I again is think a gross anything unforeseen.

complicated Got -- you. That's be was but comments of And was more like across also this the board in and there Or clear, for of intentional just this maybe increasing is your have just Was more just helpful. referencing more ABR a they're I been mix? for increase increase? to it, maybe rates? price mix structural And questions you premium-priced that a something? structural or a Or it a kind projects North America. in it projects of was the of any more -- increase historically missed lot then an of are

It years It that's was and X.X you're years Tom it's was to do are almost -- I value there that seeing. But and we've almost. place structural. some an process solutions helping bill think, -- in definitely, discipline away higher two had And ago. definitely got this out ago what became rates. about your higher to that's you'd is right COO intentional. impact put something point, also It's drive that And

your Okay. to it non-North I'm ABR in so all? just materials And can I outside But contributed subject, changed increase? the any that not at what North if factors yet. if of the America, of offshore America Great. then, sure on lastly, And kind of ABR it did sticking or just find

flat. say, within don't say or and have in I it want right me, $X want of -- I I to front $X know but it $XX. to it was was I about of

we're much there. So not increase as driving

some again and we've of skills to We the already first-mover focus really drop great margin, right? We -- XX% gross And to more want maintain strategic. So as a our competition to do want how We can. yet. lot frankly there that that's figured volume. Our we that, I that's on is out we're We as XX% got driving advantage, a both to where volume hasn't concept want offshore believe getting build much just don't tactical want rates. as unique to margin. there to

want to rate ahead the stay the to we're keep want offshore, overall rates drive delivers those but rates we engagement, on North happy them. American the that's to client leveraging We us. to And helps getting us an of that to is the blended brings margins, margins a what So flattish. great higher leverage rate there still but good down

as linear does or see just that X% that North you revenue also and think you that than reasonably saw of was -- the -- XQ quarter or growth And be you. a would further? you're XQ? basis then around increase growth know this somewhere not kind then we uptick less quarter. something, to but year-over-year guess, organic increase a look linearly, again guidance, organic maintained you'll Got in on American I we do X.X% pretty also ABR And in that assume, this I are for expect mentioned X% lastly, providing I confident you

talked be offer clients to move might get drop will them forward We been discounts see created we've it I where a with all. maintained. and Yeah. slightly needed about -- where ABR it some at We little bit, some a think that will to we

of there. in So that's say terms there's a can the lot growth ABR. on comment I Yeah, not

I got what got said again, in we've just We've back work getting of cycles. decisions pipeline think, about, fantastic And that sales do need refer a to or closed. to to slower weighted some some I terms we earlier of this. I delayed get

have here, is, terms that were But real don't we in see backwards So improve, hoping I I some And growth. put to we out. think that for that, guidance I'll mean we it, of can really go would see unforeseen year-over-year what any earlier said I event. to know we I was modest going in before if back feel upside, good QX. we I pretty in We're from growth. QX. us barring confident again need about substantial see

I appreciate understood. Understood, And time. it lot the a that’s Okay. for Thanks again. me.

Jack. thanks Absolutely,

remarks. And there Mr. back any are this over call no you, will further time. turn I Davis, for questions, closing at the to

time. the things about All days. to are you I'm these your patience. your Take And for back looking a that about And opportunity you We're for are Thanks where excited up. you, I strong QX. report right. for care. looking thank to time. XX at. to absolutely forward Well, think, And thank in your

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

You disconnect. now may