Information Services (III) 15 Mar 182017 Q4 Earnings call transcript

Good day and welcome to the Information Services Group 2017 Fourth Quarter and Year End Results Conference Call. Today's conference is being recorded, and a replay will be available on ISG's website within 24 hours. At this time, for opening remarks and introductions, I would like to turn the conference over to Mr. Barry Holt. Please go ahead, sir.

operator. you, Thank morning good Hello, everyone. and My name Holt. Barry is I'm Communications Executive at ISG. the Senior like ISG's to welcome quarter I'd everyone fourth to conference call. by Berger, and I'm Officer; today Michael and Chairman joined Chief and David Financial Executive Chief President Vice Officer. Connors, Executive

ISG read expectations Before forward-looking results, and is concerning the and this may actual beliefs statement. that and which statements, future of a not contain potential we guarantees and These of risks effects. note like forward-looking results to represent materially It I'd communication from begin, to cause important are subject future the management those statements are uncertainties anticipated. events their differ could certain to of that to current

please of risks statement that results. detailed forward-looking section other and X-K more contained covering in listing a Form our Factors Risk year For SEC, was in to the the to ISG's evening refer XX-K furnished Form the last the future and results, that factors could affect full

ISG's Form amendments or also XXXX, filed relevant any including should ending XX-K documents, and to any report these XX, SEC. year fiscal read with supplements documents December You the other for annual the on

able copies of SEC at update events circumstances. or of on statement reflect obtain will forward-looking ISG's to www.sec.gov. website to SEC's subsequent www.isg-one.com or either no any ISG's website the obligation to You filings or at be undertakes free ISG revise any

The the a improves information, ISG key non-GAAP periods performance. this currency or as will EBITDA, measures provided comparability in certain basis. constant and data During selected which results of additional a GAAP. be evaluate greater adjusted financial prepared of accordance adjusted financial isolation the presentation today, believes a on as financial in for substitute transparency we net with not Non-GAAP are earnings should considered and to and include which measures the the discuss company's call, we touch results provides will of measures, measures, used financial company's between non-GAAP on

report X-K, be For the the GAAP to over will Berger. turn Connors, was by Form on filed please the reconciliation followed non-GAAP I'd And SEC. our last Mike? to with refer like closely measures presented most Michael which to of all call the who David applicable current now, measure, to evening

Thank delivered and morning, will and client and discuss fourth our XXXX for will or full everybody. and cloud year you, what provide our call XXXX and Alsbridge good the be an operating Barry our key made brief our and record financials the change EBITDA. step we outstanding and results, ISG. on ARC record review We will revenue Today, automation, focus, guidance for planned year XXXX acquisition. results was robotics our we quarter on which Overall, with you we highlights, we in

integration. the speed our of our the was of keys success One to

first we as combined to the Within to serve firm, going ISG XXX bear market one operating were as bringing one our our capabilities essentially days, clients. to and

client existing products As growth. revenues, our grow a able and that million global synergies and develop more recurring we schedule, will together and $X of new, of future ahead work our to our base relationships client result, deliver our services contribute innovative expand to than to were digital and

the take highlights. Let's at look a

XX%; and three times quarter, quarter record up the of million, record million. EBITDA we revenues $XX quarter year $X up fourth the of delivered operating For adjusted $X.X income fourth million, fourth of from record prior

record of year, $XX.X revenues of the reported we EBITDA up XX%. and up record $XXX For XX% full million, million, adjusted

XX%. in our they the streams, In were $XX recurring million, XX%. revenues our key fourth revenue up $XX reached quarter year, up And for of terms the million,

ago early of year Within quarter. XXX our reached of a $XX year. robotics clients. stage year digital, the share $XXX million the and about Solutions and revenues accounted That's in the fourth for Digital process with it prior development, full the double from revenue closed our Our of in serves XX% for million an business, year automation now than RPA which was more or the

double from insurance grow and with We advisory RPA such the in particularly by as expect tax January, a strong audit, banking, alliance demand Grant segments, digits Thornton, significant industry retail. announced leading XXXX, we with world's firms. one RPA of to strategic In and

United for business of business We year. partner Thornton's are RPA this full a clients range services. Grant able channel to now This exclusive States, our our RPA RPA in their offer represents the new

before, extremely with valuations mentioned for continuing the As high is market decline. RPA

in growing puts $XX the innovation the at RPA the million Play, sign company's over is might RPA. You With Silicon digital of is software valuation enterprise last billion. Series valuation we technology this validating ten-fold This partnership funding earlier further have $X that revenue, platform. a market the largest leading long of raised strategic funding. formed in a XX in times million of Plug That software our its at In April UiPath, since a in XXXX. more company, the firm raised range, read world's $XXX influence, accelerator increase revenues estimated trading B than with Valley a that recently and based over month, the potential of term company

advocate X.X program, will to those As emerging tomorrow. of industry use will the strong Play's clients founding of of the that impact digital and development launched partner our Plug we a newly benefit and for enterprise on the commercial have technologies, greatest our most disruptive voice enterprise

their engage cloud XXXX, journeys. office and move strong platforms, to In its plan And including for technologies, intelligence. the and robotics in the computing to and on Plug clients, to functions. digital robotics automate of clients infrastructure-as-a-service automation, Among next stage Fintech other there Demand we cognitive helping Play Insurtech. with transformation strong and back our artificial are also more interest digital focused our adopt our workloads we and software-as-a-service, forward, cloud. in for their Going leveraging remains of is clients automation,

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technologies, of same Workplace emerging in At this to are March of the transformation double of the the digital In ISG events workplace. a are timely Future New for key all, impacting other we from year XX We week are ago, the trends last topics transformation, also hosting Summit that on interest our technologies York and explore important digital a agenda research rapid driving today's business focusing time, on the clients. is year, today. shining automation and our light holding

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innovations, our in continues a to digital ISG based digital and our voice in technology leading influence differentiate marketplace. Our advice the research growing as support and fact

our manufacturing, energy, in our fourth and strong we and Asia for services, up services, quarter up revenue Key recurring new to reported including Americas, services with growing saw was in Turning included Bank Pacific services, our EMEA, Global. Mellon by S&P verticals. fourth Exelon, banking in the including the client insurance our quarter XX% the Humana slightly. along with we managed demand Americas, XX% segments, Xylem, especially down quarter In the in and industry digital our the our growth General research. regions, of network XX% technology, In York RPA in the growth in revenue New Motors, quarter engagements fueled growth and strong good

as support power and food well their competitive WAN, including of LAN transformed This In large key while engagement ISG and the target beverage operating the selected terms including client majority to us transaction, been innovation. also the The as collaborative management for win a the includes was successful such device a covering managed rationalization the run of new organizational change our transactions, solution, ISG operating global global key ISG engagement of a management services our model helping FutureSource, in a very multinational To approach services. enables ISG aspects quarter the new, sourcing their manufacturer. business, also medical wins, to its management application technology emphasized and with workshops sourcing new a and that change company, as of assets. assignment XXX network, leverage network and FutureSource to model. develop of Fortune ISG awarded has and voice highlighted engagement

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baseline service year. a our XX quarter is of fourth ISG the Paribas the calls a global its support In revised and included have sourcing the full awarded industry to in that Key in segments, major company auto ISG from us and execution also guide continuous on win to supporting our not Turning of is German target The to also to we in based some model In Based in only $XXX,XXX. with solid contract engagement quarter key were moved growth in manufacturer uncertainty services digital insurance, our clients France. excellent Brexit global suite awarded recommend Shifting saw This an opportunity led support by a for core The transformation and relationship it traditional IT verticals. to company We be BASF, the requiring transformation advisor includes for Europe significant Denmark, down key fourth but $X up and Australia Interior saw Allianz, has Transport our win and services due Group. sector engaged revenues has of UK, been services. in digit in do German federal of transformation Ministry up past revenues secured good in remains a this however government, million XX% the a changes a the Europe, capabilities. KMD, and This BNP digital offerings contract from and and verticals. Asia insurance of on financial and digital ISG in their fourth strategy we to the transformation. service growth Europe, journey. energy and of Pacific, the the complex manufacturing, We which digital global operating over a in Westpac full to our is pick number soft digital we and were to in technology, Qantas, in set The media and were in assess technology XXXX. banking, client by healthcare strategy a this locations segment growth company, New up transformation in holistic Insurance mass the one in age. program, in catalog double in anticipate global quarter the the with value, advisory Germany is to and public IT strategy. Italy. which into Europe, the quarter manufacturer our Australian UK during revenues reported South engagements The Fresenius, quarter a a included Key work, to gives multi-year its its good Wales, XX% region XX%

turning XXXX guidance, to on Before our a I to spend sheet. balance our wanted moment

end balance from was September. $XX up at year Our XX% cash million,

the down paid million $X debt shares. year, X we in repurchased in and ISG During million

During the $X and million for operations fourth cash year. from we quarter, in million generated flow XX the

EBITDA $X.X for on current call, our hole details David revenue revenues moment. rules, recognition donut a in previous P&L million a to As year. that were experienced more a Due on anticipated million to that we X.X in will mentioned XXXX. provide the impacted and unable we adjusted recognize and in in

to year with services. start off increasing our XXXX products our portfolio were guidance. a this for of turning Now, We demand expanded good to and

revenues to guidance. we our and of XXXX million XXX are are adjusted an taking and XX general, between million XXXX, we measured For EBITDA targeting and approach XXX between million. In but optimistic, XX million

will release when mid-year earnings. We our quarter in second guidance update we our

let our that, David the turn to over results. Berger summarize will me call with So who financial

Thanks, a XX% with everyone. reported income times good Currency were acquisition million of quarter reported XX% an from in quarter the million in the net income X.X prior in million loss fourth was XXXX. operating We of EBITDA X.X X.X with operating Fourth the and $X.X which loss XX.X million, positively revenues in from quarter fourth fourth for was down XX% in basis million net loss period related Asia an the the on revenues of quarter prior quarter X% XX% up the were X.X million reported of quarter versus million in of $X million or constant $XX.X Fourth compared $XXX,XXX. Mike revenues $XX.X million severance XXXX. in Included operating year. $XXX,XXX in up X.X X.X compared XXXX three fourth The of XX.X the with reported million in compared year, fourth adjusted X.X in was impacted increase was morning, integration currency. Europe, and million XXXX. the costs a in of quarter the up same by XXXX; million. Americas, in million and Reported Pacific, which was and XXXX

Let me on our tax comment quarter provision. fourth

mandatory as per to certain and companies Federal one-time With to fourth re-measure the XX% a Act charge expense, subsidiaries. provisional GAAP $X.X to previously the of enactment that and deferred has in This $X.XX. corporate our tax Cut from from the recorded requirement adjusted balance the related both by US quarter, of earnings Jobs affecting earnings many as rate well is tax reduced Tax In the in December, impacted tax XX%. deferred we the US on million share been non-US

such for year and full in quarter that the for only the of amount was Note we rate of items tax foreign taxes. the paid sourced XXXX, million $X.X also effective income. as cash Our year impacted by

diluted reported a Our compared loss share diluted same XXXX. $X.XX per per $X.XX fully in with loss for was share the of period fully

diluted million basis quarter Excluding $X.XX. the adjusted million fourth compared quarter. share the or Adjusted fourth tax of loss loss fully prior share net would a the adjustment, on $X.XX net basis for share of $X.XX diluted $X.X or in income per loss $XXX,XXX year's our a been was have per on with per $X.X diluted a

holiday from season. the million $X.X for from end four the tax Quarter was XX% down $X.XX. adjusted was impacted share XX%, year by was Excluding last per earnings the year-end and last X,XXX, headcount up quarter. adjustment, quarter one-time approximately Utilization

the to in capital the continues repurchased expenditures cash term. by we sheet In strength million support balance long year to business Our and have and the for million was million X.X million in provided and $X.X flexibility our for XXXX, XX.X Net $X.X the quarter. invested shares. over operations

the XX in year up On reported with cash, XX% the QX. which million the of $XX sheet, was ended we we million from balance

down million, year. million paying XXX.X outstanding during million the quarter $X.X the and debt after X.X full total balance for Our was

Our as XX.X of quarter had X.X% rate million was XX. and for the outstanding average February borrowing we shares

As effective revenue standard prior we X, you discussed adopted recognition. new with on calls, a accounting XXXX, January for

the As hours. over period, implementation a the will is hours revenue percentage total to software on of component the accelerated revenue point result, expected recognized contracts, implementation as for a recognition as the compared to software be the which component software and will implementation be installed, to date while incurred software at on

be the over software contracts the the The the software amortized addition, once the network and be implementation will instead software services no contract. the license. contracts time be of will longer expensed the period will of revenue of revenue term implementation the installed. costs from instead capitalized software Instead, costs the completion over over is In spread will recognized over contingency be managed upon of and of life

the up so-called as hole will earnings approximately reflected changes adoption in net donut Mike to standard the referred in timing, will the of QX, to catch revenues of retained recorded taxes, result million XXXX. $X.X was being in of Instead, $X.X recognition not adjustment, be EBITDA, to these adjusted This approximately P&L. and in earlier. net adjustment million revenue a cumulative Given this

of You a will new find further on explanation our standard XX-K. impact the in

as capital million and the expense terms million; interest XX X.X expenditures between In investment at amortization XXXX expense and compensation taxes of development X of $X with XX% digital between We tax capabilities US intangible cash million depreciation a the acquisition; for a around next increasing of and move for between million, million; X reform million Alsbridge will and of between million; million, which stock due modeling month. tax expense million for looking X incur and our a the to and is we and effective XX%. and X.X in between rate of X XXXX, one-time X legislation the X.X million we're headquarters we bit year between higher continue bit anticipate ISG result X million

international XXXX lower credits offset rate to will exclusions, partially by the expect US tax certain driven provisions. We rate, lower by and changes deductions, business be income corporate tax

we the this our based regulations with go interpretation subject subsequent will of to of now Mike remarks Q&A. and along laws upon share change will All be before to tax guidance. concluding

are we XX%. the Overall, our David. confidence We reported deliver you, XXX to reinforce region, we adjusted have in in to trends XXXX, to Thank shareholders. with building generated million, strategically was market. margin UK. our value of growth and They the XXX largest And the we the our million. we To and EBITDA are than we operating growth EBITDA momentum pleased and our our in revenues including in XX% bit growth more summarize delivered XX.X of record clients over XX% the in Americas basis up revenue double-digit Europe, a points over ability record

services digital as XXXX, climbing. double total strong alliance. delivered digit growth significant XX% We and remains in revenue during Our and in demand our growth and expect Thornton XXXX our we leverage RPA now of Grant represents high

million is $XX back at $X shares Our down paying $X million in balance after in strong and cash buying debt. million,

digital and pivot our cloud and all automation, robotics and we XXXX, firm we are ahead, grow focusing clients. clients' In things to our on digital transformations drive continue ARC for to technologies; the our focus Looking on the business.

our digital and the for excited provided year, by in our evidenced growing digital about Plug with RPA guidance partnership XXXX and driven as by Play. and are for prospects growth, influence have especially We

team our operational we digital a the the over and growing blue creating talented recurring digital the and deliver our session steadfast the clients. very term for for XXXX ground on revolution. focused middle in morning are and revenues, for Thanks long value shareholder list automation the me to operator we always, foundation let clients and to is much a of in of professionals questions. turn this in chip on global excellence our services, the solid, Overall, are now to mission of As calling

Barrington Research. from first comes Colicchio Our Instructions] Vincent [Operator from question

other words, your at look is your what you're your Curious, in taking same percentage as terms similar guidance the of to is terms a years, approach previous of in outlook? visibility

that momentum guidance. provide We Yes. I plan mean mean as And think guidance I on we're be I I'll great and we've very to got excited. to in the conservative. trying I I update we midyear. we think think an say marketplace we said, very Vince. our to are are solid

saw Okay. at And Has then your the pipeline RPA. that continued to for last you grow quarter? rate same

momentum know, than I and growth a, very we RPA and you And is up grew in robotics revenues. essentially 'XX. XX said over the 'XX from significant good have high as in significantly Yes. we automation as process greater million expect we a start to in

at will our are business. we RPA So, looking for plus for that you XX% growth if in range

And missed a UK do I and on? to due XXXX, something largely digit catch double the or will to but then business, else you continue that going growth expect for it, have may be up effect

significant We we but I around very UK, I country, quarter Vince, think haven't in by was what XX%. think are fourth itemized seeing the

have think is year. other still or I mentioned, as to clients for transferable going work, the call introduction automation some year, sorting on and around because the where I of services, last locations anywhere. the XX% automation the the out our I they're are by anyway for of headquarters these think But XX% -

be 'XX we or operations stay they'll Paris UK into all some UK has So now in they next them Frankfurt regardless its the or the with proceed for growth would that the clicked that decisions move or making over the of in some turned whether expect sure. to or think whatever, of We automation they UK can has out of so. and year the corner the they

FBR. Riley B. from Sherbetchyan Sarkis from comes question next Our

parsing of simply you're just a revenues, the flat little kind then if range, just over I and if of modest low rationale the 'XX to like fiscal bit flat guidance, EBITDA margin help any margin? or look if seems that of kind on EBITDA it uptick, year fairly assume just end the the expecting at maybe So range year and up cadence we of the I behind start EBITDA on of higher an end the

XXX we past this grew I over basis Well, points think, by year.

have get So, RPA don't to able consideration. then the business ahead said will during the growing, we which our the we us course increase the have some or sell depend But the year, that mix the Sarkis. a on our why year, I think XX-basis margins. we significantly higher rates we would be we proceed update is, a in trying as at approximately to ultimate bit We could year, up will allow software we're to what recurring of point do a took an revenues, we in that it to hope, the and of depending the be on want so through with conservative mid-year is mix our and skis licenses, we that lower this we'll end of would grows improvement margin with into higher mix be if

expect kind any think continues we or do 'XX that saw kind back half that you of how the mimic a of lower gross just strength of on, kind color entering half look fiscal the the first what first I what the margin the about gross would of think profile of second any in we little just the around kind of half half fiscal 'XX, was maybe 'XX, 'XX, to if should in than fiscal at margin we were help And of around to you margin profile the second cadence? saw

to be It to just it pretty and the business, of be year slightly should year, XXXX. on lower first relation margin. the of I quarter but consistent to in mean, in gross tends slightly full overall, cost with year build revenues, the consistent pretty level the Yeah. during the to the just year it's

to understand guide the that. sets of think fiscal type that us reiterate, in level kind Just and you you of P&L? I wanted kind maybe what in and your making just 'XX? the would hit for to I some of Can of help reflects been will investing of I CapEx 'XX investment suppose heavily understand digital 'XX investment you're And to be the service you've elevated more compared know P&L? solution mentioned the also

Good question.

a for are the X X.X depending or will Normally, in bit be anomaly. somewhere So, expenditure on the an 'XX we capital million of growth. range

spot We stated million of be the is moving our before digital a that startup we're deal, Point assistance getting I've kind building X which move. our Harbor that platforms we And we've the down to the down square that less higher been we significantly I to million the Stamford, or some up front. to from as here X.X from city finish additional are some in terrific expect of make think cost and foot on actually

capabilities So, do all are a a standpoint. it's digital headcount we depending depend of up few what on we're from grow build but want not fast and to quantifying will a of And, to it, those things services our positive us. dollars how for million on year some our automation

we've hot been into the to by able redeploying areas. our headcount leverage people and So manage

the essentially If will follow business flat you traditional sourcing of last done X% each up, XX the months also automation, over you market and the cloud calls service our type robotics we've why the toward is see more the business firm the is quarter, move index that and the to whereas because That's ISG kind X%, work, pivot asset to is more significantly. industry quite growing in that's demanding. what more

differences 'XX if to is through and money digital you'll into is at automation services 'XX we've how into the of services, 'XX the XXXX. the see evolving the plowing where and as growth over the kind the looked that's we 'XX keep cross that that's between over in now So year

from Klee question Sidoti. from comes Our next Allen

for to to understand right, I that think, up, this if it X% me it's high I EBITDA year-over-year, end. your guidance, Tell implies low XX%

X You XX for term your to typically think long guide I model.

be said mentioned into growth reason had in that could the of would the in to going the things longer savings that and rate? the so think what reinvesting the here half is term, change tax two we accounting you earlier accelerate So employees of also the you you're your digital,

at for me let shot take Allen, Yeah. that. that. Thanks a Yes.

the at putting term beginning single year, standpoint, year for XX% revenue we we apply progresses, money at I see point the said the and yes, midyear, for this into a digital feel I in way EBITDA and measured but a growth our and to digit high we're is we we're and year. that's at you'll the the on measured we our growth .So continues the quite in be mid-year long the guidance X% think think again back time as evolve be nicely giving guidance would why you on the of what year this to this

And I then XXX%. hit the deferred rate been rate quarter still tax could have even you tax for tax your little exclude if around for better, readjustment, - tax a would one-time understand over the the the if

could that So maybe away? go something considerations that are it and else follow could to contingent when that not or will maybe is related I considerations - up you on the and deductible is contingent

you is on as to in earnings realize given states the conducted level foreign based non-deductible any have the well rate which mix incurred jurisdictions, of effective as of tax business our in quarter Well, from and to varies the quarter tax expenses of various quarter.

you when I the estimate quarter, and the take for the So, yeah, guess fourth an in full look. year

what was the impacted fourth foreign between by the issued. on the what was in the tax quarter price, and the was versus term in utilize stock some to quarter, shortfalls the stock it when fourth difference and our credit So rate it was shortfalls inability restricted the

quarter. able booked cash it the full But impacted million. which next year, got million; revaluation in use being was our X noted, our some fourth million to year in overall, X as just in combination, and for losses price, year tax rate, stock not to So some X.X the the

just the one no issue. accounting. year mean, of So, there's It's provisional I

You you help that do overall. 'XX that the number versus in planning the margins of you what you how events of Could in size business to of of 'XX. double was and mentioned events think us, the also versus the company 'XX

Again, executive that's the the EBITDA margins this but started share And them well bringing job once We we she's that an we on XXs year. us Allen, getting So, going, is that. that I terrific year, into you launched is, last launched are And events, said yeah, ISG and this done Events the as our what in big business. get double this up a Gartner all why business by we'll actually like Mike. events. and don't revenue

to three events objective events our business our years. $XX get a over to million So business is

started I we've big last event eight year was we're had, on and this XX We first events. was So, year. year, our really - planning it believe, events

these that. interested give we're they're to I'll everybody you the trying we're all right as So future offerings and things service automation to expand base. and of and digital, because workplace us is building the for and a cloud It that into playing how our in works client the flavor for

with So marketing revenue as it us our in on brand. a stream it helps great leads as well works

And utilization. of number then any know you me clients comment - the and or can let

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capital. from next from Ben question Our Klieve comes NOBLE

me. from questions few a So

the and on expected on there'll low if a results do can line. curious the top guidance step I'm to aggressive or XXXX with end is you it you this to from up year? decent throughout ramp level seasonality regard revenue The end, your 'XX will more be Do sorry, the bit the year First, think revenues. elaborate 'XX you a similar of be of guidance think of top

is clients up. to because softer a bit quarter first always build have So,

last We states, not also QX off one in of this in have our year. will that year a tail West Virginia QX of appear that appeared

look the the the both a then of for tends in have in second as quarter is is the the solid what EBITDA similarly so and build to that to first lighter quarter, quarters, weans end because and softest up So be have vacations during you I Europe it that is add over quarter then it for third that will years, FICA you and though with of during full being first be a seasonal on revenue QX. tends quarter, and would but year it even why you first previous itself one the quarter but buildup sometime at the be, the year, the bit the out on on you

here with new, may little Thornton. bit I bit, skis a is relatively you I'm are? this I far. elaborate building impact mean, traction that really XXXX the curious know my I ahead is of 'XX if Also to opportunity is I'm seen wondering the the kind on think How of can conversations this getting so but this advanced be and Grant a what an you've you potential thus has opportunity for here bench or the beyond.

question. good a So,

all the and which this meetings. partner group. have partner XXXX. we area, help have their with group held in tax in financial We area agreement now January. group of first held they partner those signed now They audit. do their all, We've a and in of the We've a So advisory meetings can is think

below program to of, have call, channel Grant When number clients We kind to look Thornton at and call planning is, incremental it we little what base just has us terrific clients, they of use overlap and base. of client as large sell sets was and are client an is of I Grant and companies that our surprisingly what we Fortune group a base it Thornton's client would target the primarily that an for initial XXX into. private

growth attack impact is it to would think on as plan it our So, to happen have an expect I but do will QX we we not probably through and XXXX, in our onwards. progress QX, that

recognized Is in line XXXX, getting It 'XX. to revenue the recognition David, revenue I revenue changes XXXX and will accounting below sure last, but result pulled And understand like changes the in I not rather the be to revenue that correctly. from of pushed to the in correct? want out that going sounds make are XXXX here was

That's correct.

But to a the one it's is now. estimate that neutral first revenue just that right in up book recognition. So impact catch quarter for is of change equity the and - in you is a of impact an what have time basically XXXX,

down, revenue $X.X to year some million revenue some accelerated, we'll will it but revenue we will P&L XX compare be the of equity. year, the total, is be to in the of due when months' never mentioned be worth - of you have face slowed never will to it have You the that see change you that just unfortunate

that X.X, throughout or And was the was was spread that out QX year? event a that entirely

that done you're Well, not particularly what able engagement, you've the quarter it on to work is recognize. is, in fourth

reach we the RPA, was point in did where software So, implemented. the

continue revenue. because recognize booking we on we to the do So not incur as work able the could wasn't XXXX, revenue work on But it operational. start engagement, you software project. in the starting But the we - that the to were

a So you the QX majority is and methods. look yes, at impact revenue recognition the when two

Our Marco next from Rodriguez question comes Securities. from Stonegate

demand of of if wondering maybe you was talk out on your now you're could a seeing about the I more ARC side right guys little driver the bit businesses. there some

maybe demand expecting seeing through parse geographies the can kind fiscal you're the you different that you're in If of cycles 'XX. for

questions. Good Yeah.

I'll then it client many seeing services. the a look, there's industry the north in and Germany both especially in and financial capabilities US automation, so the Europe UK we the we lot think of standpoint where from ARC countries and and as them give banking you we of the services and segments, now great and are and both technology people, XX%. of of think automation a are the US cloud process higher can about are are a and the ROI the that, the our that areas, particular of in So major in segments ROIs insurance and ones call the demand seeing digital

to about ticket can retail they big out pressure retailers out cost the client and move take as workloads margins, take continued more base. for on think becomes cetera. et $XXX their XX%, automations, the We're it in on do it cloud, seeing what million can the help you to a So

particular see Germany both UK we the is say the would and I and demand. the as Europe So in US as where well

think a as seed we feel little trying the the or services kind you guys do have all you you And bit to will. aspect of are have a the beyond the gone type as, or of sales type educational market in you educating if the far cycle, on do still of clients automation

at we're seeing a There every automation, in and move it, dipping do baking, so so of acceleration in in do on almost, other the services sector clients. It's they to some will now are a want almost of are mixed that insurance, then of do will their toes But pace They particular, who slower. faster almost it automation. seeing we're I it now into go proof and Yeah. some that instance, segments some - call But would we we mixed. concept, so POCs. all clients see once

a our that's about So bit mix our margins. little and

move just our can client how So margin Marco. at to by pace. margin things be faster increase depend aggregate we'll overall segment, wants industry will faster if pace, a the - accelerate, a it's fast able but on a It to mixed these at

also I kind with then of the half being potential about was aspect, back there somewhat gross as forward coming second And and versus the a you mix half somewhat a first digital the the and to services mentioned question prior elevated gross margins margin guys historically. going know positive

gross So improve start and versus digital? historical just level probably mix trying low-XXs to to mid-XX% hit could as get to you your revenues margins a on the better the that sense here. you start believe that Do recurring

but you're delivery, for mix margins, year-to-year see the time, dramatic Over increase over to we contribute as all and to improved recurring the we business. going a I of will EBITDA of gross increase improve as Yeah. revenues, continue don't the in margin think utilization, the those time, to margin change

that's do do think later event think fiscal And that you or 'XX you than a it's that.

it to start I - in XXXX, starting think that. is you'll see

question take from Klee We follow-up from will a Sidoti. Allen now

might current of great of done be over recurring if on revenue. You the where guys couple next thoughts provide go years your able that job Could your growing have to just you any? a

Thanks, Yeah. Allen. Sure.

three XX, We ago. we over that. stated was growth our XXX increased of We year year internally. than a year recurring are greater think XX, XX a XX want XX% to were recurring of targeting period on revenue get time. we So to this to million. I up That I've about million that

year this for automation past as So, digital That revenues we're we as million the of way. mix contribute the a on hit time from first help the increased ever. to well XXX margin will our business standpoint

factors particular increase, the to So in point plus this basis increase contributed that margins was our two year. in XXX

of kind on nice forward. now ourselves a state got going we've So steady

subscription the analytical software that some revenues and to are program adding and robotics by as additional software, pro-benchmark. we we're in a expand as terms subscription, our our software So continuing, a benchmarking recurring those in yes, call continuing both of

things So year. this right the moving XXX goal million internal 'XX all an XX% is that But ourselves our moving target. in and yes, got those keep for are we've to direction, up

are further this at There questions time. no

conference to the turn to like over - would I So

Well, Okay. then, much. thank you very

close collective plus writing me for our firm. I road significant on think the they our will strides take in a of the chapters our ten and on around call the of us in by both confidence professionals Let joining thanks your on great for support the behalf to the for story of you years and Thanks over and their last the growth and our firm all contributions world for have and day. continued in to ahead individual saying you thank all

call. your today's for concludes participation. This Thank you

disconnect. now may You