Atossa Therapeutics (ATOS) 27 Jul 222022 Q2 Earnings call transcript

Thank you all for standing by and welcome to the Atossa First Half 2022 Results. At this time all participants are in a listen-only mode. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speakers today at the Atossa’s management team. Thank you. ahead. go Please

morning today good results. thank for you am Good the everyone presentation us for XXXX of joining [Indiscernible]. morning, and Atossa I HX,

introduce of in Atossa with on we lead XX and Natalie As this digital with here time cloud its U.S., markets. managed our in my I importantly, experience Together, in skills turnaround more strengthened July years have business and fantastic in know, themselves background. relevant today. in growing Most served management business have XX, finance, will bring transformation teams [Indiscernible] was long I you our that Europe, and since shortly. me spent to governance across journey. turnaround A services, words been and executed Philippe, service than a we also complex where is managed my our various new few team across group lead have countries but transformation where more and for let unit. term I and industry

in forward. Atossa look to introduce to lead working [Indiscernible] forward very successful the now new in deep roles experiences, and a good happy of team hand each our of I those been will to has missions, developed consistent and with of strong a I to Across I and understanding be asset. built applying alongside and that those For operation relationship our business, have talent. our next herself. turnaround that customers I I going over will entire our unique have chapter. I with those its global And playbook apply

my [Indiscernible]. charge and M&A I charge in in I’m and a of transformation solutions for consulting. group. experience particular [Indiscernible], in Executive also joining and Atossa, Projects environmental well have Vice before the I [Indiscernible] position smart of Strategic Senior particular Support CEO as as Stress last VP Executive Functions was Senior and of President of also and IoT solutions software and strategy sustainable in In

morning. Good [Indiscernible].

position, space was Chief several last the IBM, also my in the in the in worked Officer in both Commercial positions and and So Europe leadership I U.S. XX years our at industry

am here. Good [Indiscernible] groups I everyone morning,

the acquire joined we the perspective years on years team seven group, ago financial I although more need So fundamentals. than over finance the business and to broad

strategic Before -- companies such key my is acquisitions, family expertise and [Indiscernible] as initiatives legal to have carrier finance useful now. which for

and period, having CFO, trustful and financing and course, financial group discipline, As I the transition the profitability, but cost the cash of I’m a generation on would looking with of constructive really community. forward mostly on silos focus and to transparent also a

Thank you, Natalie.

to with this on operational one on entirely performance, our best Atossa, platform believes one that value here for XXX,XXX the want management forward all we strategic best is It plan going stakeholders. is the our is the employees. team So most transformation The customer and our emphasize will our convinced to project. create Atossa on our and capital I June presented value delivering this project first, for for for XX shareholders. ultimately are markets second, that the that performance, during strategic be announced the focused team improving we day will for also our deliver

has that, With stakeholder. of management must So our that given the And today. team you let’s Atossa this the turn of to HX, time new and for commitment now it’s action. We XXXX. for is deliver highlight execute first

months following project, we six As strategy you but reorganization. know, strategic announced our intensive also assessment definition, in of June,

you now happy Atossa you This focused of our Now and our new the and priority our second and [Indiscernible] transition plan is giving after on will operation really job I’m that the for today. that going we by organization, our during we a continuously employees execute is have is improving is Natalie top now Also, fantastic a clear an in means forward, the to place, It project commitment laser performance. strategy our now Dan, transformation the management customers, team financing share secured. to milestone, we the strategic fully as period. have with today done important be

been logo. Now of going services look positive. order XX% if would new I lot to it our QX new million signed announcement We or that than stress at to three we XX% customer from QX response in strategic and with announcement has to in book traction, XXX QX. are XXX% more a in very to commercial which the the plan of has improved like a build

XX% As at continued look for was pipeline higher prior as than beginning momentum. pipeline semester, each significant our we an is tool weighted our the weighted suggesting of ahead indicator, the current

and In fully addition, previously have operationalized which refined we our consistent the loaded HX with detail on announced, plans. our financial based confirmed performance backend which plan, XXXX objectives is have and

line ensure demonstrate scale to our total of challenging a talent in our in people gross attractiveness Atossa Atossa than condition of significant with ongoing the growth with a in hire and growth with future continue recruitment, Lastly, HX hiring at market. XX,XXX more objective in and

it Looking sequentially the minus QX. was as QX minus growth gradually organic margins. were X.X The with low momentum declines from QX in organically. at improving was continued minus the the minus growth due exiting Natalie, in flow June X.X% also down inflation, XXX figures and but at and at for level X.X% be X.X% operating which The low semester, million constant presentation. of in of revenue X.X% a our will reminder, excluding X.X% recorded a slightly key particular positive minus business the end Operating later Headcount margin X.X business to to our is reached mostly to of currency organic and plus in top details during by XXX,XXX that back complement. HX. salary seasonality cash in margin the in which will was the centers. increasing On translated organically, come offshore in of Euros. our reflects of revenue usual Free energy minus in mostly in cost high impacted

our [Indiscernible] strong have Turning billion and in there recorded sequential that XXX% was our to improvement news clearly strongly primarily order we X in a commercial entry to of shop now to compared growing bill some niche activity XX% QX in the in revenue QX. will and QX. is up compared and QX composed book good is QX to directly seen small here we the in QX that fit to. deal

the XX% the weighted continued again coming steady structure the to momentum. forward we and higher our that for core weighted HX XX,XXX continue scale business our commercial offering. that of renewed in than to our in by which for with is subsequent expect significant our suggests more traction pipeline have refocus Looking HX than right pipeline at line a benefit able we quarter the on talent, gross On hiring. reflect and HX pace With at organization recruit talent again, new been

Our QX XX%. in QX was attrition average line at rate broadly in and around stable remained versus with industry

recruitment the continue was noticed, dynamic the and for over hiring our our level location. you offshore strategy might at It to we hand whereas talent We ensure our HX, again, the successful line not. were we our anticipate in I As in in it critical and to did optimize HX and or context entering This with in our our in labor to to now intensified grow the headcount grow, of structure. of future. is [Indiscernible]. HX, attractiveness the condition secure junior have the our intact. did delivery neutral XX% is By demonstrate right the pyramid way, but order, revenue to QX, us back Atossa margin to return for in in held will

everyone. morning, Good

mentioned my by secured the that we As to successfully on very we are colleagues, package. announce happy have

time to action, deliver. set are and this for we said, As is

is this you really transformation a which share delighted are in we to our So key today. milestone with

the the support have expect received the demonstrates a amount days. documentation and the we full our few of strong our next sign covering from The in bank banking success is final in also significant So transformation plan, leap financing and forward commitment partners. to

and this I and at that reinforce. macroeconomic [Indiscernible] achievement be would XXX are stress and funding of times period see oversubscribed, of before that operation the market likely a our we will financing very largely the of been tested support all demonstrating significantly and debt the intervening to as strong you part context with the is As reset potential have a the be process, our the annually. plan covenants financing month partners. group like to needs financial in by to provide current net will In ahead full by will the already during again, schedule

our strategic give made I’m next slide, update transformation with progress the the On going [Indiscernible] you on a since regard to our quick plan. to

front of our both to and [Indiscernible]. clarified experienced now have on leadership that successful team you in performance new delivery with strategic So, a we have ensure governance roadmap on the of you

a which exceeding XXX we featured We date. to have preparation total been plan. on is here sales mark, and million have crucial mentioned, value streams just on made as All milestone. progress [Indiscernible] work the And Execution have have have targets. package launched assets progressing the according we for the is the also I can

employees early In as terms soon provided with September, to are start the of process already [Indiscernible]which consultation information. as been ready we we milestones, has

retention deployed what operation XX% seeing, retention the and of talent seeing our are and we is change program are key Indeed with On people. positive. our side, are of very we management effective

market finance significant commercial demonstrate including wins the our strong the In fact, the customers. highlighted and of attractiveness CMAS by plan from after support

one together value project on our evidence VDS in both as to their great on digital profitable growth. to the and bring to teach and our assets accelerate Indeed creations, is expertise

of to remain are the a services, and services and our integration the position cloud shared offerings, will cloud. business the So we position undisputed which gain and to during in with security But real Combining our business combination both managed of make vision market each create this us innovation that trusted and of right accelerate of you the uniqueness application partner these the line capabilities advantage differentiating two leadership already leading capabilities a strong end. will digital in secure share. for with

the as secure a journey. providing to ourselves to a positioning our digital embrace player, value all and analytics are help We regulatory, transformation, in and clients unique compliant prosecutors, data incremental and

can We cloud bring development to digital is and comply and build the enterprises and together trust are what VDS accelerating of unified regulation. with to just example as an in company. support a our institutions This to

as all IP. with and together, addition have unique on we our at CMD, relying explain core In offerings, capabilities proprietary we

managed leveraging at our the reach intelligence and of level machine efficiency. to that’s core artificial are We of security services business learning, highest the

past, them We consulting in cloud their that server accelerate IT defense, zero development from digital we utilization integration we to customers. best implementation that portfolio the reach and points, us sectors has commercially, cloud a management. tremendous And between which are implementing clients performance important delivering a service VDS the that in its massive digital And help a to an the In in to will public strong were is footprint industry application using for rustling and not next inefficiency journey remaining commitment. creates capabilities. potential the one years. also quite full And tackling provide and and VDS also transformational to public our

high momentum defense, On of requirements. and computing perfectly only in we we in and on more advantage And seeing other institutional are affairs customers and the focusing and in to services not scale positioned reach a industry also end, institutions. more sector clients financial and are their on now broader to take manufacturing looking performance are

for year tax Let span before me a cash XX% X% that and to ABM in XXX margin our operating revenue ambition organic and and flow interest average is free remind basis five on XXXX. on you growth million achieve

ABM HX I’ll performance. on Now some give you color

year-on-year constant of revenue X% our currency. XXXX. bit compared slowdown at was So a grew a to This

customer recent in with positive [Indiscernible] you, in were digital reduction on mitigated also that thanks added value So trends the large to by acquisitions and application grew resell. clouds volume organic value that and a

slowly very had So above order we the but in on supply cyclicality Digital markets. recovery to VDS at continued entry that looking tension, its HX. side, and based it’s high activity, the grow security chain on a strong

June, lot to its soon to as underpin build is solid figures There’s term into had a Looking at medium book XX% significant improvement XXX%. had will spending that to sized to we the in this we as and in this HX. a compared a short build revenue growth of at book deals very And QX.

inflation group of We’ve at and in the as wherever in HX. terms were in as low are HPC, we volume X X.X% recovery operating improvement that margin by with launched has impacted margin, we by HX. performance a In in been actions market expecting improvements HPC well

contract of profile high that services few we and a highlight attractiveness great commercial in to wins our like HX would I Now, solution. and the momentum had, reflecting the

players. deal the an signed major and we artificial First, machine pharmaceutical with intelligence learning

for we it’s to and award also our meaning German are and contract that a and as VDS Then medical, Spain, supercomputer area that stability in journey, this a see center that our out a an not intelligence complex Barcelona one artificial brilliant national major coming excellence. application which hosted aid trial quite quarters. this and by area we the software fields, research. develop want in We vehicle with were in one pre-exist industry HPC This with what the the scale which unlock key first manufacturer a partner the excellence, to and colleagues important And really around our showed applying exciting an for digital we for proof important award is related pre-medical part technological big connected more program, to is Euro supercomputing X.X that clinical gain development. win theoretical in of contribute know, this infrastructure that you to a our are happy a technical to of will that’s important and are be car system showing wins will already growing the where and sixth that we strengths governments that momentum HNAI such R&D development will data of finally, the factory, is as really in transformation

group improving tech ability that, further the operational performance. just and equaling says the unique will and in one on of to turn now digital to what base outstanding customer person’s able be [Indiscernible] of to highlights foundation. the our to capitalize With are and expand will do the sets ABM forward, try for offering and and to Moving projects, it financials I VDS contracts, of we

prudent with presented this with actions growing as reach cost better But complete are rebound and stronger to be recovery similar mentioned do by to to portfolio phase did where XXX cash the enable investing we X% a strong turnaround So, and thereafter. flow million the I offering. our transformation to plan refocus we phase the XX on both operation And margin capability The XXX to phase, where in in portfolio XXXX before, by [Indiscernible] capital drive we margin project deliver per XX all reach is days and are sense will million increase modernizing revenue the basis our where element to that us going and past. our next team to of first the by is follows more plan fragmented our playbook, than the issues will a XXXX by focus stabilization over rationalize profitable market drive We The wanted focused Recovery market across XXXX. we Euros at key of and points growth. right to tech the ambition full in our months. XXXX, faster. our our and year foundation structural operating of clearly and realistic. most the the address It

disposed changed with business. decision So everything away is to about and the business now group in newly contrast our the and core strategy combined our excited formed focus tech building going in employees foundation of our part had both the business are at shifted were this business where from infrastructure in our March the for business where prior invest performance to stark HX. to have look a which invest up be customers. to line in decision let’s The quickly. our They our momentum Clearly, is

is numbers. excluded been to our to only X.X% I up a Now the it Even business of compared back. including And the huge focus XX%, is in end Revenue minus which X.X% we decline the executing that was are limited we would have HX shows XXXX, decline flat. minus was further, minus remind if in improvement almost UCC. revenue UCC, which sequential

well. Our addition, and consequence have put our the into the decrease have services center in infrastructure significant in data and has is positioned revenue. digital our And seen of direct outsourcing contained second Atossa time growing workplace we and have are that that And momentum for for revenue professional business. Quadrant a services leader back a energy the Recently, XX,XXX the this Magic people in managed [Indiscernible] and infrastructure as worldwide. focus its

our improving announcement is and been also Our the book good, of response has to we significant build to to Customer continue see project momentum. significantly.

than HX focus pipeline HX yielding our will results. extra on months Our account I XX% top pipeline back. XX six higher is

Our top XX at X.X%. accounts grew

plan playbook top the top those over deployed have the accounts we to we course XXX Now XX of HX. extend to the over accounts

In for terms you capital were days market that of we slide, On line example this margin HX. we with deals at reported our minus X%. during a see in won margin, in could of

across see world on modernizing can CIOs we hybrid those in all operating customer ranging on mission our and priorities, are you application. innovating for critical continuity key experience As the infrastructure, from business helping deals, providing a

with navigation transformation been have IT major insurer plan telling end envisage for signed second end contract our you We earlier a managed by had positively was our U.S. one that to mainframe an we customer. I or received provide company. agent an services where

of contracts indeed, you our that So two announced here, could after were we see examples signed plan.

and to provide as a going we are in a central Both transformation large our profitable, line and service. for generating to we extension are renewal contracts contract one, cash services an agency. quick second as procurement one, signed midterm to global well infrastructure workplace public provide First objectives. And digital with

stabilize made pipeline. and are a foundation seeing improved and huge leap the have to we performance revenue, summary, So in commercial tech in

in are kicked derive our implementing transformation. to to accelerating and HX dive financial we further I focused into will initiative financial the to over off not on performance hand now forward, we HX deep Natalie Going performance.

to recorded plus X.X% now see organic them Atossa plus Euro currency Growth exchange and for margin, free can X.XX% you and minus operating revenue effect an debt. with HX an of a X.X%. On cash the our of revenue the slide XXXX. starting billion going this income, I’m main X.X% this constant was Turning rate first net including minus and decrease X.X half financial impact. detail headlines HX. with X.X% of year-on-year, to at their to in scope the for the of net KPIs flow

at in as into XXXX recent up growth is Americas of were was in APAC improving defense. and momentum contract presented new unit the at situation contribution major driven by versus X.X% plus sequentially in region constant [Indiscernible] QX digital digital tech of minus chain X.X% hospital acquisitions. organic in starting by revenue. comment good the offset with kept perimeter. the particular Our into businesses, the now in well and I trends a the public ramp minus from Europe retinal with stable a performance and turn Positive will business on our services, a X.X% foundation QX, Northern into the computing. QX. advance in in positive past UCC as particularly of sector contraction were HX, currency

sequentially QX. computing. also slightly security activities well As down, foundation and cyber and improve as were Tech advanced between QX but

in and and down X.X% by underperforming by low Europe of a Soccer currency UCC. contract telecom the operator constant HPC, diversity with termination at was activity impacted an

stable revenue QX marked items, QX. and improvement a these was Excluding with between

fluctuations due reverse in in decline the minus HPC wind and and to in a a infrastructure. momentum X.X% to limited added business by digital Southern value down was of the There Europe continued resale. decreased

group on X.X% inflation now impacted margin. another was also by It line. to salaries, operating but cost Turning at high cost level

our delivery defocus did the growth to in trade there increasing we at that day HX. face on supply upon of tension some on revenue been of expect chain, certain some which operation, challenging as But secure distracted on it we have mentioned, element let’s These to And whereas day also our [Indiscernible] mention impacts not suffered may was top probably contract. minus the condition all for HX. our grow. key headcount again, pertain from at avenues. Continued will time I X.X% in to an as of

clearly Looking profitability a by margin at are [Indiscernible] expecting HX, as on. better restore we of strong much to driven would later a explain level improvement in

and statement. for Moving XX the and on of remind to the the shares which which following. XX of other loss related next slide this sale. includes to the activities expenses, main relating exceptional million assets, to are last plan. relating highlight noncurrent XX million income Euros Russian financial The contributing plan. I The held world in to year, million our of decreased transformation to items from net costs assets amounted the to the included The on XXX to proceeds million [Indiscernible] of generated impairment this the million which transformation XXX year which XXX our XX million related line June, year to financing net of disposal a million of goodwill you

is Reorganization, in Looking here cash of and mainly change now million flow million in million HX, million change was decrease too, always minus free XXX minus flow XXX There was integration free payments. and year. HX amounted seasonality, HX flow unfold last HX. a low compared in lower XXX measures to will year minus to at reflects pertain seasonality cost cap which top million statement, launch that in at saving is level this driven this to working customer of to course, HX positive cash usual free million. significantly XXX Euros in XXX that needs have flow Euro minus the XXX cash The impact costs in was than cash on a whereby mainly rationalization by our

June to Euro. acquisitions shares line and of the cloud in sale from the XXX to amounted This XXX proceeds Euro. In of addition the for million is ways mainly the cash free million the period, flow world

a amounted exchange X,XXX,XXX,XXX situation of June. leading million to end Euros items and to other net debt XX the Foreign at

total maturity our maintained of for existing of from million of billion XXX has the the already a loan X.X into we colleagues, secured an new XX debt have commitment with unsecured my by of FES bank term conversion the a do package, six out months mentioned XXXX. received Atossa successfully As of at billion We option, maturing months. extension X.X FCS is our

to few that, objectives. end next the the [Indiscernible] full final the I days. sign expect documentation will of We With for in year

measure to end announced There’s a previously always expected loaded of cash the back going improvement as will performance and clear is more is year. be fruit a seasonality this a as in our XXXX and pronounced be is in HX organization in we swing But wall And be HX. now that the place. margin So launched now we as to on year strategy most I the execution said, focused laser even flow. in have

are So with management team, year objectives. full our and we today the confirming refining

For Growth currency constant in X.X% are good now at at as should revenue, Operating the momentum additional And we unchanged. of the X% to And objective lower X.X% transformation in observe consequence, this is free XXX flow is a minus at the million positive end expected underpinned a of to moment. our XXX impact of range. end entry million to range by excluding is grow direct the margin, that lower turn the HX. minus we order the cash X% targeting plan. of

what first. HX So operating let’s of you on in means give it granularity now, margin more terms for

in improvement uptick plan in an by which do HX So the driven launch we key expect will levers. focused on largely be three HX,

base. cost our reducing First,

is we be down in as or going specific costs which soon like only HX cyber headcount rapidly come organized structure analysis. program, by industry, more on going we’ll area prior our increased spring as significantly selective structure to the are it’s unwinding hiring are too our our focus in and security forward, we soon. of Since As

arguably subcontractor We our discipline, cost. and lost personnel which on we will have a of use increase costs non reduce bit

and tackling are we improve exit are red renegotiating our that account I profitability we or on more and XX Second, entire focusing in some than underperforming commercially both the to and as to sanction. are team thanks cases Phillip contracts. the an

will a be context in in Third, key. inflation of increase the price continued

a have plan place. solid We in

increased not under have is some our term you We HX This ambitious that medium overly time effort contracts, currently and for that are mostly we're already others price on material and note and the on negotiation. will more particular topic. being

chain top in reduction, recovery Phillip addition mentioned In especially also better to improvement Natalie have and that on HX. usual pass volume, This we year to I will HPC the HX. challenges, HX direct margin every have for a come with improvement supply between our cash will seasonal free for absorption will the it the on of fixed as now the impact costs flow.

direct recovery, in HX. consequence transformation you your operating see our flow, NDA. recover excluding And should additional As a free costs, margin, plan cash entirely by the as this be of can driven will on chart

we impact guidance. our as XXX the estimate in around secured, costs the of additional plan. such our I portfolio, which financing, our includes million exceptional would XX At which the outflow. While costs given just capital one said, day final the our It of linked are exclude indication run includes error, is of prudently depend speed the also new capital This of resolved we've And cost XXX best amount will market your the plan. transformation this on for million at with to stage consistent of XXX million actually of we've in the on a injection. additional effect course six stage, million that [Indiscernible] working external embedded restructuring be additional XXXX, costs, were costs already

Natalie. you, Thank

the team myself execution place. are few now our My of in plan. management a the plan from ongoing customers, strategy fully and have to our and transformation as conclude. We So colleagues on clear words the focused now as well

momentum support into a HX. momentum commercial see on higher seen renewed sales continue even our We QX which in revenue in and have growth to will HX,

now in in give not just a at We on fully in And year progress [Indiscernible] we with and significant HX our a secured. forward improvement is but executing we made us will moving as our are performance increase full have confidence pace Last, transformation which free its and flow plan. full least, significant measure cash drive financing objective. the the the are

now So I attention. thank question. to take think are your you your we And for ready

management. you Thank

will We and [Operator the Instructions] Citi. question will question go session. now Our answer begin Amit Harchandani first from at ahead. Please come

from Harchandani may. questions couple Citi. if got towards the I of I've plan. financing Amit a question My goes first

you've decision of You've in key of more this can But and categorically then not a please? road? term down What confirm loan gone the the you terms of financing, of into the no a of bit to have I clarify given implies takes cost how and form about you convert month any in of bit about financing, could terms question. of financing in longer? equity a a for parameters. And us there And are an need puts terms second XX some it the of is thinking some the this detail

to on Yen which us and assume means Yes, reminds of and not about we terms that can maturity. planning an back. financing XXX that to financing in you're X.X do financing equity XXX billion increase loan FCS On million. XX% capital secured and Moving with also of

and need because on They later, we it the are for The cost line the fully will again but in longer financing no in disclosed with be no stand equity will all. with of at So rate. the financing the press enough market. there market is cost financing, be line

regards with and company question please, customers. on the behavior turnaround broadly to for me, Second is the of at the

backlog. you've We some about seen corrections in have talked your

advance payment talked about customer coming down. also You

happening looking sense Can the of can hand, bookings you on see making one for is going what their customers the seasonality as customers you in But give because the up the imagine, hand, other on a cited at mind. and You discussions do we at us what's up. first tone Atossa are with half.

for sense give on in us you and and with of the move advance the payments? could customers, please overall discussions a the collections tone comment So

HX. older so periods, So battle just say we do to with the start business detaining, like decrease that so with correction speaking, had nothing's it's so of some of following with two start bookings we to the mentioning, performance that usual. analysis backlog to off previous in zero, We of our write were the parts the had as our that let's you're

industry. in as our business So usual

over to feeling that, pieces. of invested side, sell by pushing are we with, Natalie has reaction XXXXs the have also so to services we that point. across that of we're there pretty the trying that years. have are Yes. what will customer we that are more highlight we especially investing the whom last is with line We've now their positive And fact in speaking we're pushing important the business, about positive and reaction, customer the tell into been bringing business. been been what that I customer board. have to the I Yes, On think on the all I been for see not we tech cohesiveness it's foundation it the customer

effect. same the is the seasonality we had increase catch decrease. that seasonality in same This will in payments, HX reduction that results HX. the purely seasonality, last a we customer And exactly So up advance is the in year,

from BNP ahead. Our Please [Indiscernible] Paribas. comes next go question from

few hello. Yes, Good Thank actually. taking I've got question. a you my morning. for much very

I cost with just the going to few of assume all, of is these to moment, your And you a going it's the back mean, first the question. got new debt, on to in I've understand and in be I rating of given But trade. reasonable like hiking said line new So or That's rate something first package? it digit bullets. that depth debt financing

will later. the with line on question financing. But in them of they first your disclose On market are cost Again, conditions. we

are we more recession, talking more at specifically, about a least in XXXX potential Europe. and

the how and this CMD lined for wondering – you potential notably restriction have that the just we're So most plan in reflect you

our think say is because year as I recession, quarter of you started we than revenue revenue business of about, more only during defensive think [Indiscernible] good then contracted plus the is will year. have business yield a rest context new logo when in know, the it's the in over we turnaround a the it's will personally assigned, multiyear contract revenue be, XX% to the which I pretty we I the the that

business business, So longer book potential a more of we give us tech say foundation, situation into visibility. entering business. cyclical I say, even a your recession, That's broader and macro the will

you an taking I XXX unit which I two in it's contributed HPC it's help contract, second contract? could already Alright, order one. been to in mean, understand in been announced revenue more million total, publicly full and do split it the have initial contracts timing the disclosed, the expect array QX guess, is you you XXX should us the basically or million HX? And you had but recognition for entry of in On that thing the supercomputer be one be in you that to revenue recording Or over time?

side. We had multiple on wins VDS the

single only is not it's materializing. contract one that So

very took the relying periods in HX is you But deals, XX multiple of say, ratio we only with for the oscillating have, HPC to to build especially and very a on know, roadmap the this improvement not deals on months is generate QX book the multiple on VDS implementation projects, Let's yield generation. revenue strong large revenue significant This that's project. complex large assumptions HPC generally in our let's a that infrastructure, and will HX deal We But to between of absolutely revenue our of had our deal. to book say milestone revenue. momentum bill QX going on generation, the depending roadmap. of on XX that

comes Our Please next question from go [Indiscernible]. ahead.

thank profitability, gentleman. to be used on question. also My I the and roofing much Good which of have the morning, one is you. business. to Intel couple U.S. of ladies first Yes, a the

in is the that year, your between has side, you issue the what the your more to drops mean you're this sharp basically of My spending I improve roughly is second in does much which region? that a full year X last So than first question experienced and each been of the part one on the margin back businesses shore points, the mean, guidance in first the by decade. achieved margin time for in decline on needs profitability

also, what seasonality the of morning, margin rate restructuring first bit have Or last at sense, does below much my you does utilization year. higher it are presented below moment If year final it visible is more is question you of a makes issues? they And have, And be a that big the expect term the part because it you Or you not [Indiscernible]. way, that is negative mean the peers. So this mean long in but not might because on on you would granularity positivity way seen has that the the and of year-after-year, level the action instantly. the all everything? moved booked little HPC? And very have more than impact we from have what Thank we've you.

your question. for you Thank Yes.

with margin start operating me let So sore. the

a We multiple cyclicality know a it's of the or let's you factors. mentioned, it's combination So storage. business first, of say that HPC And HPC. manufacturing

and recover been So that that fixed have, costs purely we due that say so it's amount HX means have will HX. let's a cyclicality in covered, of not let's significant we say, in to

leads The other that's, shortage juristic the had our to faced of is all, delivery inflation, really that business rate facing that have and and actions lead the and initial due cost that recovery issue evident in the with side. is the into no at our we are remaining our we we we labor is supply factors base on on like impacting us inflation impact really utilization cards that VDS the plan do plans on prevented chain that related of are part we business that HX. let's There say rate business the the that's of new to multiple part

HX from question starting actually a on are On minus your we low at XXX%. for so seasonality, second very

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And on the U.S. business.

that your [Indiscernible], still following also there a related with I entry had, say, recover let's that as guess a will grow on effects scope to we On has and HX. that contract. with short But say business It is was trend the we the of on announcement. the as we acquisition of during doubt the we No that the and during or in the the we is it's signings revenue had had per the question day. accounts US already, the that large right the to running, let's profitable we business nothing committed one so term capital plan the growth, order that reduction I that do to market said the presentation

it was size worst But or the seen have business offshore? you market some Because you XX% XX% _ of third was of the the a you making - the structural when U.S. issues margin on EBIT on about bought

give India prices on you an So wages happening granularity can the it like seems more us you issue is in had between bit the what a there? or on

convictions let's revenue generation build to business that versus were like secure stream knew for had and information global to also having, incremental we The the that an required additional our you what realize in we that I that generating, was related another related is specific recoverability. as that to costs HX let's very the revenue if to explain unbalanced we issue there's that say, only we entry model had ends anticipate is we share to no do that strong some we say can book higher related that but

still winning. We are

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you questions. my thank for Yes,

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Phillip the and take first would the one. one second I

the On almost XX% in XX,XXX, location. out hiring of been of them and and the near have headcount in HR, shore offshore the

company. the in our the the transforming So And say hand are overall in building remote it's mentioned as capabilities location. of capability as presentation, pyramid I been when junior, up lower of the also in we pyramid, I junior

XX:XX is how to offshore more. go or it more not exactly second offshore? shore? we Is what question, So, before an Sorry, exactly like Offshore much purely like near

Out to it's of think I closer in offshore. frank, XX to the be XX% XX,

above sides business cyber I security offering your and said, on question, still And as strong markets. first on seeing dynamics on or are line side, momentum are the the the business we

digital CDS also year. per confirming record, on seen in been there, we in we fiscal revenue, that's say for HX had in maintain, that are related is objectives the We the with as had part And And let's new revenue mainly trends let's growth generation I 'XX. year side X% to that that we've on we the the plan impacted, that say the the we've plan with the of for to alignment highlighted HPC.

you. Thank

to give what I more the Just two I'm Thank cyclicality you. a HPC? maybe supply questions. more great. Could of that? was exactly third impact quantify elaborate HPC question My to bit supply could more whether chain recovery might downturn chain? Like you granularity just about us your detail tension margins, operating function the understand margin here on bit and how continued more perhaps is you the production to demand a Are -- it materials customers? margin or targets know. items Any in environment? because for supply here, tensions these risk. related putting other Maybe in and My Maybe of impede HPC to perhaps products specifically orders and trying potentially hybrids fourth chain be deteriorating parts? a moving at much question terms? is don't would certain in of

the side. so on HPC Yes,

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let's difficult more chain that can volume just a I So -- in to when you place. processes say, lot it's you're obviously with drive versus a supply are

on reason have related let's the say why, that the the to is we we directly show extract. that we And the anticipation that's pipeline. can when continuance So

HX in will commitment the to stick because that So ensure we anticipated in grew area to in we of we let's terms had say, milestone HX. in that delivery inventory our

So is this perfectly control. under

You're HX and free on and the the yields we mentioned recovery between comment or HX. to that

more so market I they're already margins the On what shared to at nothing day. capital that the say

a digit let's end digits, a recovery We operating operate at the with are five to single margin say planning years of the and with say margin. single let's plan at in XXXX

Harchandani at go comes question Citi. next Our Amit Please ahead. from

some of of of of be changes you the a talking who taking you and these to if I that's you we Atossa more With and to cash do that some goes period questions. do follow two minus closer minus if XXX long got may. generation regards gets more you flow How to exceptionals, Thank of XXX structures. first have assume costs this before. free those profile, million XXXX in foundation, that? free heard I've to exceptional year XXX you in mean, for we transformation question for looking my my beyond at transformation total the stuff That would covered free this in on XXXX? for about XXX profile outflow cash of My might position cash negative better last think and like question. play if than year. the time, total in rationalizing tech second for XXXX that contracts, had embarking cash topic the flow Are comment out you you're flow to have upon and a us the in

to the you. view that that are your drive time, for versus for one? that in with company be happened past is the a it what the you is going of been this hasn't infrastructure given you've in different what in Thank this what So you've yourself learning? your transformation long the has in projects period time versus past? worked the seen What as

your with come free will second. cash start Natalie, flow. the would back on I And then question. important Really

past, and think I and and today the you decline are never to in constrained addressed always today, see was difference the On finally we yesterday, say have biggest past, that that really us in transformation. we finally, if will in we we it. the the may, were I that turnaround, funding you business do know is I the that the revenue seen I have

difference, full had issue could think it a I and was board to think say I acknowledge the to vertical team playbook because at rebound. the in diffuse it that the to all time terms before, decided And of entire that address setup we will with not the matrix, responsibility methodology, biggest in this the and I easy complex of think I apply have may. I size we if the make sure would

impact find productivity, the Now framework turnarounds down inadequate of remember, for into biggest that much the we suspects talking obviously, in or us is simply about but way and business, that organization line. stronger to usual in read a of it's organization, almost to those the the the show, stabilize accounts gives top execute but a automation portfolio, top This kinds the military.

with seeing in year XX% able So transit the minus from as control huge less minus line. directly last seen have have are and a start bottom I to we which much you that, year to this HX, been address improvement X.X costs have to to impacting

we I to So in the finally margin tech team, feel that the in have perspective, of top we with will be that the good, of now able to improve foundation. say line trend terms

to key you. Natalie. my really that's So feedback

free On third question flow. the on your XXXX cash

of So as cost day, will majority XXXX. XXXX we mentioned during and the master in the the transformer come capital condition

mentioned, and a XXXX identified also the XXXX strong forward. which have trigger launch already As year and benefit HX on we in HX on action operating we full already will going margin,

renewals months? you Do there straightforward financing it that to be the the renewal would be for you around which after is please level XX at are after profitability? to term a clarification certain a actually level need of Or thank and Do out? certain bit then, be Yes, need of a at you on leverage? months, or any carried XX

X.XX throughout that's barrier have We improvement times. the

a this constant So is over period. the

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terms sure not generate in progress I'm that, you're to again, where that. of you able on not If are

If financing, generate overall finance at you're to plan? transformation do that, additional financing to look to unable debt then need the you debt

above which executed XXX amount Just of exceedingly confident far we of million. for already in are earmarked XXX rest we million are just the our as identification an the very And a XXX. program change already of strategies program, these assets, because

sure as announced in lot we in on terms right we -- timing are end. previously I points value and business already make that side creation of say of have points to assets the the The So is the of the once. on mark as choices the these that interest mostly would fact that's received of a the other topic that non-core the

so assets enhancements here, earnings, already the confident the we order and very On announced. where we have disposals that on following on disposals XXX

I now entire time again just you with think to to on it's of to close. I wanted Bye. soon. and thank you behalf team looking speaking the forward

conclude This joining. does for much. conference Thank today's you Thank you call. all so

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