Sterling Check (STER) 12 Nov 222022 Q3 Earnings call transcript

Hello everyone and welcome to the Sterling Third Quarter 2022 Earnings Call. My name is Seb, and I'll be the operator for your call today. [Operator Instructions] I will now hand the floor over to Judah Sokel to begin.

Thank you, operator. Welcome to Sterling's Third Quarter 2022 Earnings Call.

Josh Chief Executive Financial are and of today Walker, Peter Officer me Peirez, Officer Chief Sterling, Joining of Sterling. will Investor News we accessed slides reference presentation this The can on Sterling's Events. Relations and under website during be The a will slides website. be and the replay on have to available website, posted been our made open we After to prepared will remarks, questions. call this

of explains we non-GAAP and notice on legal discuss review to the statements our Before measures. forward-looking X, financial results, the which listeners the of I use encourage all risks Slide

please to our Form risk Additionally, and actual from filed Exchange could of materially results that XX-K discussion these Securities refer with forward-looking to differ Commission the for factors statements. cause a

and Our include this non-GAAP discussions will call on slide financial presentation certain measures.

comparable to issued call the are For such GAAP turn I'll Peirez. measures, measures the earnings release and reconciliations appendix in this our morning. to Josh the now directly in over to presentation most the

thank XXXX and Sterling's Good half us. you of the morning, joining you, first strong the XXXX. record continued another Thank was throughout XXXX results we and and Judah. our for saw of great quarter third quarter

As you Slide X, growth. quarter of this on double-digit organic can currency revenue our seventh constant represents see straight

business revenue new even XX% in service excellence drove lapped client last year-over-year we as sustained Our constant currency innovation growth quarter growth XX%. of and including XX%, growth of growth, organic revenue year's third

us for from X% confidence growth initial has gives consistently and which approximately EBI, saw also We M&A. great our expectations future outperformed

our results long-term above drivers or driven We performing our encouraged are by all quarter's very revenue X of the were that strong targets. at

X%, eighth from helping drive continue to new consecutive excellence quarter above with X%. third business long-term new and of our business clients, from growth innovation target X% prospective product technology Our of quarter growth the to of resonate

all in cloud-based innovative such We service and continue regions from offerings, our to differentiators, product new and technology. sizes all as due competitive competitors of client win logos to excellence

I'll confidence spend us verification, in we is density giving our leader market solutions proprietary new product prospects and new such wins cross-sell Clients we their as place by partnership to upsell are Our signed where third and global deliver our markets best-in-class with our digital remains revenues. in the ability and highly business innovative partnership a identity In we with to our with identity ID.me. identity recent very continue through with new unique One the international have package identity sell and products. deepening same pipeline exclusive unique and this to us expand strong, strategy solutions. Yoti, differentiated verification of in an expanding the also discuss building we quarter, solutions offerings and shortly. U.K.-based best-in-class vision on workflow U.S. are

other our line targets. X revenue retention and performed in long-term Our base with also drivers, growth revenue

commitment XX% of and completely customer in which rate retention and service our innovation by availability. revenue best-in-class recent Our have excellence, been customer includes ongoing to a redesigned fueled platform is providing tools cloud-based network years that

Turning to Slide X.

sequential seventh quarter year-over-year growth. quarter-over-quarter of we second delivered quarter revenue quarter And now double-digit third marks average revenue of organic XXXX the have our an of The since growth XX% consecutive of XXXX.

and the proud long delivering outperforming very quarter to above generation consecutive our are the was continue We eighth target X% our market over new as the consistency in QX of range, X% expect business term. we to

upsell/cross-sell gross since which the averaged class. growth retention revenue drivers results double-digit showing in been that in of is organic accomplished revenue cross-sell/upsell organic we most strategy our areas third within the business best our XXXX Slide execution during economic the the target in point combined that this solid items. particularly our strong are our to still over demonstrates We our by quarter proud challenging quarter, COVID we perform delivering X This points X% growth for those business, during further, illustrates achieved in our Even this XX% retention has targets, period. and new control, double believe downturn, control. new the and times. growth enabled even From combination we have basis XXX have and improved X% the well to XXXX, that we of first us we and

bit As to last the our grew environment we as back expected moderating basis earlier of XX% their call, many an currency for clients X% we happened XXXX. quarter to X% tempered we while target. our hiring their a this, XX% growth stellar they the discussed in year. from in due on our pattern long-term as macro This saw our are and macroeconomic the now half plans earnings base year the quarter, Despite moderation in a and organic to uncertainty constant third next the of lapping establish holding growth including on assess still than operating we XX%

a and total We basis. constant expect revenues both to on currency organic grow fourth quarter year-over-year

growth performance steps control, have see taking within been operating we've X environment our continue on high-growth the While years. the rightsize we strong quickly extremely given environment, our from the to to execute nearly macro to low playbook, on uncertain drivers we our growth in acted for business

in high our surplus growth needs XX% roughly growth. to year very As a we hiring levels fulfillment our of we maintain explosive QX XX% strategy average us us a XXXX. this have service of beginning during time and shared on the call, our well, to been enabling This labor our served revenue since of support ahead running

revenue in XXXX. in lower now that cost we environment, rightsize fourth or savings the increasing to are into of a As drive starting strategy transition quarter growth acting company, OpEx quickly and recessionary a and we will the

the planning tremendous quarters have growth. last managed few we a our number while initiatives We been of for

Slide We are now X as accelerating growth these key low part of X. our including on initiatives parts summarized playbook,

earlier our additional reduction be the we expanding year. with actions margins strategy and cost at this First, connection streamlining business these through refreshed aimed will measures, automation in the launched

initiatives. in control our on business drivers with revenue an and focus the greater on executing even Second, cross-sell/upsell new

growth to We will actions accretive in And geographic driving scale position company and invest year-over-year market. gains fourth, and to regardless margins will QX basis EBITDA and macro solutions environment allow the of market-leading the as the by us these points. gain become Third, M&A for share in for over believe multiples identity expand more to tuck-ins opportunities expansion adjusted our market XXX attractive.

market run the We will in savings by to also realize expand while year, expect share. our to margins also the rate which significant ability of cost end substantially this future gaining fuel

and key drivers our One reasons of we product is the our in within excel control innovation. the win

be and approach our Turning of a example to first-to-market Identity Slide continues innovation-led great to X. solutions.

some are share things developing. So I thought how on I would updates

earnings We the as Identity transactional pillar background about verification screening, strategic is that in the that equal have previous calls, are early we traction. we instead built and only we on As Sterling solution our future upon a Sterling believe identity provider excited view identity discussed very on built is a to digital To networks. principle. but knowledge, our untrusted offers the this of not best footing

with are Our to in deliver significant differentiators put and exclusive in competitive for U.S. Sterling have and a identity employers the ID.me partnership FINRA services leadership position

space. a will international partnership competitive markets identity our believe seamlessly provides The exclusive throughout In in verification. to use able start in U.S. can QX portable planned to that does a verification Sterling various seconds. have deploying to digital exclusive with integrated We requiring the verify identity and Yoti leader Individuals and with reusable new once the workflow candidates XXXX, offerings opportunities, where in the international to exclusive digital and and create any a have be outside in in allow we market they other expand new Yoti U.S. significant created now are partnership businesses identity XXXX. their will us our the solution for workflow identity in job our Yoti, just trusted a identity share fully process their to identity their we future ID.me advantage expect as details U.K. with excited rollouts age digital markets

first to In integrity now partnership, network all used, messaging ID.me the most candidates rollout testament fraud, X/X all verticals. a of and terms with identity continued the are client experience. across product identity and identity. to power successful of our have The ensuring focus adoption are and pre-verified, and themes responding than is ID.me prospects with resonated our are of our data Clients innovation. that the be ID.me's positively on of to more When has streamlining in clients we seeing come reducing candidate the reusable

to starting see in impact also are identity We place. when screening outcomes is the to

in experienced One prior, compared largest records found months services implementation, financial enhanced of X X screening, increase and better months the during candidate following as Better data integrity. experience the change due XX% We journey. works. with screen to a just updates our innovate to to our as ID.me to reduced our way is to identity continuing look of vision every contribute the background all the forward screening fraud we and identity. provide beginning This to start customers

Turning to X. Slide

to in over XX% and in of and learning, on that achievements accuracy. Automation a fulfillment first over RPA, Our figures XX% offshore are into owning many integrations our a been cost it's clients. have increased to U.S. or differentiator, faster are results we X,XXX representing collecting within these parts simply reductions with has searches our our to that now time differentiate analysis automations our throughout while committed the accelerating us growth. including minutes, product investment characteristics well Over strong easily of hire helping measure Today, more jurisdictions competitive given us have us that drives robotic extend our our for automations our matters. data deeper intelligence, XX% another industry fulfillment It's and critical key within data analysis searches. not and time These APIs criminal areas captive the are automation, machine are access competitors. process enable first within compliance hour number in centers, Investments all automated for through speed is the that But U.S. our not key it also organic artificial less workflow, critical collection, XX completed generation. with in clients, perform first the across over revenue at time. all control report knowledge, our business. we greater to Sterling allow drives These of and for Time drive leveraging turnaround To the businesses day. combined and for seamless data benefits Automation years. APIs class while of best and are the screens us area compromising searching cost-efficient over our our automations data from accuracy. for and most criminal global XX%

and implement We savings significant with vendor to our future we manual footprint yielding expansion optimize millions thus gross as continued strategy reducing have margin realized by cash our expect far of additional investments And flow. of net we savings and dollars and costs. continue

As incremental we part of additional to the and on earlier, Project U.S. first, XXXX growth and several identifying savings revenue gains second, one efficiency low meaningful processes; was executing slowed third, investments focus so automation as and screens have growth international launched year. labor this discussed while we paused reduction; by: opportunities. well a driving Automation cost initiatives fulfillment reengineering with during our cost I is cost and opportunities as and playbook of or savings exciting on drive Nucleus robust

on updated for recovery really best-in-class Peter? well. third current also share great deliver financial take I CFO, the navigated on excited through through to and for the up macro team we you We I continuing and work on times. are hand our delivering to believe front, We margin Peter gains and our in this our already uncertain as building Walker, conclusion, proud ramp COVID it guidance. With to results Sterling quarter for enhancing our further am strongly successfully of deliver improving In our a results. and while financial and capabilities future, subsequent while that, will I the will through environment the improvements over to XXXX

you, Josh, morning, and everyone. Thank good

on of an our performance quarterly to recent Slide overview now XX. most Turning

compared increase we of revenue During quarter approximately growth. constant of currency third the to million, an $XXX third revenue XXXX, quarter of the XXXX organic with XX% XX% reported

believe As Josh is seventh consecutive we revenue mentioned, this industry. quarter are this accomplishment of was of in and double-digit unique . very organic growth, an Sterling's year-over-year proud

client point growth, also XXX The base X% contribution quarter revenue by organic offset approximately basis foreign third existing X%, cross-sell growth attrition. translation. growth to partially a new client of due included and The a increase included from and M&A currency of approximately and of net drag upsell X% including

XX% retention customer-first our Our the rate for to gross at investments turnaround products, coupled our enable remain in strong technology with approximately best-in-class times months. last and and focus, XX

pricing in period change was the relatively across revenues. meaningful Additionally, not the stable and to

at results revenue were quarter's the We drivers that our all target X of above our encouraged range. performing driven by are strong or

most from significant in areas our maintaining well are as We within new industry-leading including success as seeing rates. and our retention clients business revenue control, the of cross-sell/upsell strong growth

our growth. We expanding unpredictability are most feel we and winning help clients wallet offset share momentum focused with and on in of base that market these any share can areas,

our drove less QX, expected versus in which EBITDA described, growth earlier less $X basis points than in Josh base adjusted As approximately million a moderated revenue margin approximately and XXX in our expectations. bit

health Revenue that international performance X% EBI XXXX industrials ahead integration acquisition. third by the International our was XX% in of provides XX% from is prepared growth new verticals X% led due XXXX, initial was with including which performance. has almost verticals grew the particularly business compared this continues and our broad-based Revenue quarter, region, revenue we care, delivered of were very integration EBI, region. in synergistic deal to complete, APAC across industry it constant and this and well We November pursue our third our U.S. In M&A. results and are strength third an Looking strength, quarter expectations. our playbook. client above at revenues on wins including broad-based the Australia executed with to The to growth deal currency in organic our of EBI additional of our us quarter solidly in We exceptional The basis. acquisition. strong expectations. our grew outperformed by to exhibit as from pleased schedule, and client FinBiz a our business retention inorganic underlying consecutive success we we Singapore saw the confidence with as growth

Turning XX. to Slide

XXXX to increase the quarter, of Last that third adjusted $XX compared the margins and year-over-year we indicated in million, third adjusted fourth EBITDA was quarters. third was the quarter Our and quarter a quarter XXXX, X% of for margin EBITDA increase should XX.X%. third

faster I points. As XXX basis our margin mentioned, third growth moderation the quarter by impacted around in base

growth While the low and are implementing macro such, our we environment playbook. unclear, we as growing, are is

points As a result, of basis of expect we in year-over-year expansion more than XXX QX. margin

Our drive investing and cost as in discipline, organic focus revenue margin growth. we continue healthy on will innovation long-term growth expansion even

to XX% effective a was rate third directly can are earnings our diluted provision data with as net tax our adjusted tax this million by to our a An third-party a of of we cost when of incur representing quarter's This cost, per share, reminder, quarter tax is costs cost $XX driven is adjusted primarily per or we compared scale the as rate adjusted decline a of highly share required. adjustment of effective structure As income $X.XX cost XXXX, only of recognized. revenue in XXXX, third year-over-year decline XX.X%. variable tied year-over-year of XX% the additional of to tied in and up we revenues brought had much to down quickly our XX%. rate In XX% of revenues lower quarter labor adjusted

expect For in the fourth XX% quarter, adjusted range an tax XX%. the effective we of to rate

internal income QX's expectations to Slide prior $XX by period. and line and of flow in cash Free acceleration the XX% year increase was with the quarter the in Turning collections. an flow XX. in growth cash our in was free third million, driven operating from an

We be expect conversion of to EBITDA third similar free quarter's rate. cash conversion the fourth adjusted the flow quarter's to

adjusted leverage Xx was of Xx target. the leverage end at net at debt net end Xx to our EBITDA, net Our to low quarter

adjusted the to with remains said, to M&A. organic million absent ended ample M&A. and providing million, to and to EBITDA poised million leverage to growth $XXX of start net multiples expect growing cash future us quarter pipeline available $XX continues any to cash M&A capacity We growth total our with balance declining That of in is our approximately continue decline cash revenue and equivalents of and revolver, due Our we moderate. strategy robust, debt and our growth reinvesting and our under pursuing execute $XXX

for capital organic as and have Our pursuing time playbook since Slides balance time as provide allocation sheet. growth, low maintaining revenue This as in IPO, see we guidance M&A XX, growth not build well XXXX. investing the opportune updated healthy remains true to macro in changed our for our of a On our and XX priorities the we success. foundation instability future

million XX% of to growth income million representing $XXX to million, generate For revenues EBITDA to representing XX.X%. to year-over-year XX% million growth $XXX million, of XX% of million to $XXX to net year-over-year $XXX XXXX, growth and year-over-year of we $XXX of expect to of $XXX XX% XX.X%. representing Adjusted a adjusted now

Slide the to single-digit currency includes As shown currency year organic growth revenue of fourth constant XX% organic XX, on XX.X%, our implying constant guidance low full in growth quarter.

control, from see performance We revenue to good in continue drivers including business, upsell/cross-sell retention. the and new our

current industry against providing most technology. far offset QX, us the impacted verticals, so our helping and growth by and Gig contingent diversification environment. showing the particular, industrials all some are protection retail, region care, in in health declines APAC In Our U.K. is

X.X from contribution the EBI, acquisition revenue previous of to the our we inorganic expect of deal in X% For estimate. points contribute ahead XXXX, of now the

EBI revenues quarter, we contribution the will organic to in be X% expect fourth During inorganic flip the approximately as December. to

currency assumes approximately headwind previous our in fourth a drag the guidance This to full points fluctuation, For includes points impact of basis points. year our of XXX the XXX basis basis compared during foreign XXXX XXX guidance. quarter

to now profitability. Turning

the at guidance XXXX implies midpoint. to year growth full a XX% XX.X% and of Our EBITDA adjusted of updated margin includes XX% adjusted EBITDA

third-party year revenue growth, fulfillment inflationary expectations are support guidance, by higher higher U.S. surplus lower costs labor to in margins extraordinary lower costs Our the and previous verification from driven for the

EBITDA of quarter year-over-year sequential basis low a to adjusted quarter are that the of our we fourth mentioned execute The XX% higher growth our the basis a year-over-year, guidance of earlier. environment. midpoint approximately unclear reflecting for as organization substantially, which points margin implies shifting we expand our margins the fourth expect and both speed playbook on XXX We on Josh at macro

moves are expansion. the ahead, should continued making yield Looking we margin

income XX% growth remain from we growth. to this adjusted line driving We to which of will adjusted our on in by help our strong D&A, adjusted during reaffirming Slide EBITDA even To model, should modeling, growth in the drive our the of reduced growth expansion. income a our to the financial targets XX. bottom excess XXXX. of we've long-term included margin your appendix turning guidance XXXX year for in benefit in absence adjusted we with assumptions encouraged net further Finally, are EBITDA XX.X%, In leverage closing, with net the page

encouraged of At revenue to concludes That year. drivers line continued are as are questions. plans on for improve the control by in profitability execute our We our our prepared in the the our open this please move in operator, forward our time, we and confident business to the ability remarks.

[Operator first Instructions] from Shlomo comes Rosenbaum from Our question Stifel.

But if just could you that what that in the in be kind I'm seeing the you're going wondering one that generally, organic growth generate can you do fourth your still -- with ask give if has into even XXXX? they assume in right upsell bit growth clients no it's XXXX. should expecting growth of think quarter. And clients of ahead environments. in terms and company little able more still organic discussions, the them to wants dig seeing in you environment new said growth that and far happen that in get to a you you that know the expect to just And that tough to to that themselves. I want like drivers things now. you're From I think of fair the into growth you're too

Josh. It's question. Thanks for the

but our seeing and on the out headwinds expectations. currency quarter. seeing So and QX a should point the expectations basis grow we currency guidance given are basis. don't in Peter the both terms we're assume our in now, constant from on like that total to what we're that exchange revenue organic again, of our you to laid month, terms XXX of Obviously, and our any of is what foreign higher headwind And an of reflective expectation in comment than

expect obviously, and think next in we not As But out is that about the to there. this question, reflected is we're that our -- a year. if a any we're on would macro Shlomo, you as in as inorganic the be have expectation total. counting next at remains cloudy point, seeing I year next to year, position now, your it guidance, we we it grow macro don't obviously, And give both

be to long quarters. take I grow it, able us the expect this and last time to growth to will constant would great So and we currency Obviously, be for more we X is lap which a We does take not think as next to we to over XX% were half basis, could and second as XX% in the year. margins on believe would next year. stellar last, that quarter, call actually expecting year lapping expect turn as first growth organic first an more be hold. in bit our But the And rates we macro the XX% rates X expand little challenging. we our XX% actions the importantly, a

our do such rate some While of we actually the wanted hard were that exponential very business, to work it growing expand to was an margins. at to do for we

growth work, grow. do to profitable low period planning this to use to going we're while more So be also that

if you follow-up over And Great. one giving don't here. mind,

APAC called area an of out You as strength. international

you're growth. that to in of contrast a you're in it out give a versus weakness. region airfield and as competitors maybe to I generally more APAC internationally of in stronger you in, of can your little bit wondering one the region And about the another why was of an of One if as kind talk us terms the called verticals kind

Yes.

in Pacific and you areas financial in I international then heavy we had are last those in Australia, headwinds our But break Asia as in for growth don't Europe, really So but of to wipes also Gig And year the which business particular, the into business financial Gig actually also that currency have and shared we currency has continuing have general of other business international good heavy broad-based services verticals, in do in industries. the out after organic think and see services a a impact we're our in being tough performance. we growth should from and down pretty very businesses, U.K., the year all our that pound, almost on growth heavy the stellar XX% constant rate actually but currency Peter the quarter. think

be I where recently. It's of deferred we when strong add see we're Peter. countries I mean and differentiator just in? the APAC, continuing to are to wanted what about to think calls and to probably us between right, a other Australia It's -- going . are we Singapore kind performance.

Our Patnaik Barclays. next question is from from Manav

the regards seeing to with your of from worsen Ronan of visibility ask next does with This please than from slowing conversations visibility potentially May for you've on it you you're that turn should you're clients, How a moderation coming your and environment with recessionary? that what Manav. for indicators, sight can seen from et cetera, line the leading to what into terms in your actually I is base expected? -- assess Kennedy quicker

Thanks, if Ronan, it's follow and in, Peter I'll up. wants to Josh. jump

brought do currency quarter. down. see reflected is first, to we the in for our guidance what why from in think, total I'll and still expect we It's But both seeing QX. I growth, what say revised organic hearing it we're constant clients and is

hearing. that So reflective is what seeing we're and of

given revenues an platform a basis. we In while and have terms our in very our we're and into you, what of the daily seeing, billings terms with and at we trends wanted basis in what share of visibility our share had to impacted XXX hourly in that We $X than see happened won't flow-through earlier quarter which visibility, revenue, we on to time the our would our on any do specifics in changes bit was that on by expected It have more base expected. points. we target margin X% we a of basis in a reversion have saw by to long-term impacted to about have would X% QX. that million little good growth

So share it was terms the we was and important thought in the was in it that of is. where visibility, why guide terms of to margin why

of the which we're So think on midpoint, what our and by revised based already rest guidance happened seeing. million million, about in when that we're is QX, what is reflecting lowered $XX $X you at the

would just seen additional constant has that run then We've totality rate, of organic provided. of revenue kind of will confidence QX. growth. that in us Josh we and and currency that's not in from just I in the grow in of will base sharing guidance add comments down grow QX at we what gives QX to revenue moderation that. and also step on that perform XXXX high-level The we continued kind end the any business saw what an to based

in basis may the helpful. in base from the the what That's just decline for other very I adjusted of confirm points EBITDA drivers then margins were XXX And moderation outside growth? year-over-year the

Yes.

of the about costs. X had So what quarters consistent with talking year, 'XX we've public company I think been very first all

to So those we costs. absorb needed

at will synergized We we're QX, though in ahead also operating fully even not be have schedule, its EBI it, margin and of EBITDA XXXX. there we call

So would margins flow those we commitment points $X sooner that quarter-over-quarter, which in was with expanded and our have the that to because of last see than would our moderating XXX expected, drivers growth the have about basis base revenue think which had million that didn't through, we about along there's X fact would be of earnings call.

Stanley. next from Kaplan question from Toni Our Morgan is

mentioned business? mentioned I more the saw earlier, new on in How what about growth color new on this expected. maybe the base a ask, and quarter. bit know little lighter you being than to little a little you Wanted pipeline this just a know bit bit but business I you

Toni. Josh. It's Sure. Thanks,

So it business quarter which was again, year-over-year proud range, above eighth of growth very target we're consecutive of. long-term our from new our

explosive going that denominator the Of our equation growth means year keeps up. that in course, last

started dollars of raw QX give XXXX, percentage of to already that win not new closed expect to our of in both XXXX in to have new higher on our color, were and that yet least just we and than if not just long-term to our onboard actually, a targets, pipeline, raw strong and would us our continue of continue to perform of dollars of business business So gives a at in in confidence that QX little pipeline we our see deals are deals higher. more ordinary that to

know I this that I come within Peter, you're cetera, helpful. because it ask, valuations I you to it because a M&A targets, on be down a of valuations do environment? potentially, capital in long guess, et since still to you the do challenging sort and when challenging trigger on -- and you're feel Or are the still one really term, you is to on robust, to do and wanted like And Terrific. down? tough just that your solid So of pull you're would I like mentioned anything just I need expecting priorities environment -- like is thinking guess, guess, pipeline a M&A stuff,

Yes.

in that. M&A right, So when the we is think about focusing of market. our seeing part low growth we are a multiples And moderating on key playbook,

M&A of being more deals. seeing how kind We are about structure flexible those acquiring to payments for sellers also

And So environment. is growth an up I quality during full. some is this opportunity assets would to a our pick pipeline say for and us robust think very lower do we

Nicholas from Andrew William is Our from next Blair. question

to half have that when not the expect economic algorithm cyclical next up quarter include we over obviously risk? targets? speaking, wanted growth I should vendors the just that is for cycle terms of to you Toni's growth the tougher supportive? It of year, actually, comps. you the Would challenging growth a partner long-term Or of items. to some the time more and clients below how up think and seems in first Sterling been like switch willingness as or your not of to algorithm a environment to about the operating piece but with even one expect generally would I'm of tougher has But nonbase questions speaking of momentum fourth piece very or despite good on follow

Thanks, X and Peter Josh. start guess key points. Andrew, in. I'll just to wants if I'll I make it's jump

would in to we that's the they terms when in would our First business our We frozen of anyone targets. if have think during off when still of cetera. COVID providers, going long-term grew within was new grew period, switching that XXXX all, you -- et freeze,

best new we over quarter, period. think that's a any little, given pull a comments because I I your in appreciate example the back clients sort say could to it's So long it's what that your of time kind hard on, in of low us the take guess, on actually as happened for which perfect actually environment, is during growth during we well. business to view term is more COVID. think our the a XXXX And

our long-term it of we actual and higher, client in through you that us us terms So much target, was took, perform while it's something the at saw benefited going that value annual last then year.

giving clients way able us our lot market actually want gain So in my and from prepared seeing that to is those remarks. I which to shop confidence in of made a competitors to coming be we a more the RFPs comments share, lot why continue think we'll will market, we're

would Peter. to just X% I during the add COVID. that within our it's cross-sell/upsell Andrew, performed also long-term target X%

will . cross-sell, that a So in upsell perform pudding environment. within really target new business, recessionary the in the proof

maybe makes size from quarter I hoping exiting helpful. you or the whether That's That the my in the run for Project expect savings cost year. And frame it's rate or sense. the fourth Nucleus, follow-up, was then you could

'XX. have that can understand Just impact trying to incremental what of kind on

Yes.

cost said, Project pulled can Nucleus, So of if numbers. and to cost we need. of XXXX. obviously, period first, of little focused us. detail we we is, we That explicit in our earnings client as that has needed X in being mentioned, current is at We'll running significant of But have two, make exponentially at revenue, call. automation Then we're revenue grown year-end the high a share capacity of people sure been And a on investment buffer do fulfillment what levers more we've number I that services. bit our that, of the maybe there look giving on XX% Josh a XX% since of we've 'XX our we've on been business is through 'XX, because terms the what frame doing from more first delivered number grown for is halfway we up without the level that about we carrying give you over just surplus

opportunity up really here. is look and It the version of really of next to hover So kind at what's the for business. automation important our

this. our to and the we of various firm first engaged OpEx, showing Americas International. the on really initiatives quarter actually outside right talked organizing us to that earnings the there's around that proof in call and then about you we've committed assist this when refresh process to go we're now. with And kind We into strategy are So

for work And completed getting we've already force We've looked harmonized layers, so remove of terms that, other things places some but the of they layers were our with savings. where to type organization aligning make in and our annuity commission things competitive which then that. commissions eliminated had there management place will sales our market. in go-to-market we at like plans plan. efficient those terms financially, global We've produce in plans more mark-to-market we're really in And we've sure

be And that's environment in opened holds the I and believe grow been of over it you with macro to from we we take Josh focusing that, can you as margins revenue perspective, give So as today, with the back back XXXX. should believe call, XXXX in come assuming you rate. we is can we But to the expand comment a more of kind places we've terms hopefully, to we'll the we year-end enough detail able on. give think color run

next comes ahead. Please from Needham. Our Peterson question Kyle go at

the particularly U.K. macro a out softness, has some choppy data you I the Gig that in the off? been just is to in of there. business. rest guys know little I over particularly want called how mean up, I some follow business holding of

Gig there? up seeing of are that broader a slowdown you So is guys business over rest Or purely holding issue? I guess a and it's the

It is purely government quarter a Gig of work onetime issue. for COVID. We related had did agency some mention to earlier in the we year related first that a 'XX, in the

the as the the the of up U.S. Obviously, doing into equation, currency overall at So strong as piece -- of you that you performing foreign out of well. when facing the the rest out an business. and look translate you because take where just Gig it you show results business. dollar, we're don't of take that's the equation headwinds that

Got are kind follow just shorter on guys of anything running is any helpful. of screens, pauses your trading it's down downsizing comprehensive clients, lower? stuff see, growth it. base less whether screens whether little of and a That or purely the given Or And of you any that's the less, makes I some just are some hiring is and up it's or seeing and wanted this sense, in place, macro of uncertainty? to as

has say if verifications, shared. screenings still Yes. lesser We This as wouldn't that not than were anyone it. pausing, slowed, is health not seeing were are expected, I the doing just essential criminal purely even they seeing trading they as that's It's on. not the doing, and down. People stopping We're we are stopping, pausing. checks, we happened Peter hiring doing any doing that hiring But faster they've who they're have hiring material. don't anyone That really for hiring slowed roles. clients anybody say

any those seen of occur. behaviors haven't We

question JPMorgan. Steinerman Our next from is from Andrew

said I just have I start then want a to question. and earlier, confirming Peter, just by something that you

to my quarter quarter? us similar to And you down quarter, growth. that got between in you a that say When new clients Was my fourth base existing say And the quarter single-digit for did now X% heard with So that revenue I sort started of low third fourth base we So organic to of growth? the whole break X% base growth also for was and the quarter. help business? has X% currency That's you X% say confirmation. question. the constant could you growth

Sure.

So happy those questions. follow to up on

hear QX, that we moderate to the you to is And in long-term did confirming sooner growth starting base is X% that Andrew, it the was first, shared with gave, original what So because X% so we did we moderate that back range target X% than half we've expected did range, over accurately. the to that say to X%. that to the would of it the year, guidance that

and deliver new So hopefully, that question. organic we within growth. revenue we've the way attrition cross-sell/upsell revenue ranges on think think we constant not in drivers. confidence QX about the that offset performance for the the in will guidance our do should high rate growth that currency QX, closes target is base look declines around there strong specific I you But single-digit give growth got Then that can at we business. and when that low

from comes Goldman Tong Sachs. George question next Our from

range are I of comfortably business changing within the cross-sell a to Just new than in in above to range. expected. business within new you trying you're cross-sell/upsell business the the new the into base a long-term derivative And also range, components you how should operating same not second Are way X% seeing and slowdown Base slowdown and they're whether wanted ranges. see dive and growth. in to growth? the or seeing mentioned beyond to moderated and operate growth drivers cross-sell long-term X% sooner that the

George, it's Josh.

be to So this we is I those hopefully think perform at what helps, expect we've said, able and targets. to

targets. over We been those performing have

X that sort the strong that is So of the lapping Part just question. hopefully, of seen that growth we've for years. last answers really the

lapping you growth think about XX-ish to for Peter XX% last shared, prior the X So QX, of and, kind from as quarters last we're as percent a year QX.

we have do more. are do new and continue to at so to targets, even we And to business our stay more to continuing

shared more in QX we new for had we business than dollars I QX, had of 'XX. of As

course, be the changes, But the than in they to So that. we denominator of and billing a levels new have normal could keep well. lower at slightly environment clients doing as would

and that we long that to moderations happen terms that in the control might is consider and what macro grow the thinking gave those. within might in elements fact occur holds, we as to with into our the of into we're So I the what revised to expect factored would that's as be also in about. all as that guidance versus view the able of factors base is our of something year factored growth going It next

the we're thinking out quarter. guide drivers. bit growth previous hopefully, our of we think, it. them about gives tell you you But calls a that just about I on So these on break on don't from or how color little We

it. . mentioned, Or inch-deep slowdown then was sort saw words, was like that in a the targeted moderation that other broad-based? slowdown? a in areas it this helpful. And base concentrated Got Retail? the you That's and mile In wide, or Yes. the of very phenomenon was respect with you to Gig U.K., growth

Yes, George.

individual out of some this point playing in look in you environment at would shared break of don't where performance diversification what opening terms to by we GEO, care, in are when then health So we retail. in I the we out strong. our seeing we're October, well and the continuing but remarks APAC by I to in is in a are business perform U.S. Gig seeing positive industrials vertical softness contingent or and U.K. And to technology then what and

is question next from from Research. Our Owen McAvoy Wolfe

offset offset wins you to go-to-market growth willing are you willing -- to accelerate sacrifice any are pull from further expected touched there expected to And logo know of you new growth this, to I acceleration? Specifically, here. margin guys kind expansion resiliency can Peller challenge that that but top algorithm? macro? levers that on Darrin invest there your to in to faster-than-anticipated further the for are your some lightly On unpack of the base of guys line you're a 'XX in

Josh. Owen, it's

see quarters. to you outperforming algorithm, long-term . that and we're just X what believe to be even the our for at first, So remind relative consistently competitors, from market-leading that to that performing been would believe X% that we you if we've last we in the our X%,

start So to I there. just want

sacrificing forward, it a In think said as how of it about at going margins next not question. we we we're expect of we've expand margin terms Again, to looking year.

the over by basis of guidance. our midpoint to expect at in XXX points margins We expand QX

going accelerate our We're of things to So things us that back on. map to in for from And to those be to that a plan -- competitors give those who other there share worked are though road be can low-growth I of take want tactics growth. really the further listening environment who view necessarily XXXX. but want a business to take to things planning is are course, there willing give new it they don't to clients in. are more to in might may I bring that some we

there could So that's terms very fraud where on also is or things on like well wrong in they checks, we things money think current information be cross-sell, background That identity if waste shouldn't play growth. entered. we I business the doing playbook are retention there's clients. new can to not think doing, with the true that think actually helping on upsell being And true to we where also of applies them do

performing those on the that how on in think I So on performed proof don't And but give do, best-in-class we at why the of presentation. I of before that where we're Slide want double since competitors with to pudding that those we X been fact here think beginning long-term tell pointed drivers. the to of targets this, what we've highlighted those XXXX the our we tactics the XX% that's is publicly and we've that we

Mark from is Baird. Marcon from question next Our

margins trying in seeing How we next you muscle be period how of we your into if up to during we should what the to philosophically, ended to about what if a the for up how actions? but wanted Philosophically, mild philosophically, you're -- anticipating increasing end margins understand that up, terms Just are terms could what do in in -- the COVID go that? recession versus about recession, of different assuming maintaining clearly how seeing hold year, you relative we would think things thinking business? maintain a

And goes, it job thanks that's to things whatever is slow instituted to relative on growth make growing we Nathan, wherever take beliefs average macro. question. sure it I my It's as as a tell were for There for as for right if I'll X we moderate, our philosophical, in are right? planning Josh. job personal we but recessionary, the maybe just company, I'm that wanted public to growth doing a been an Rather XX% lever quarters shareholders, my to macro on the you the take what's turns over playbook. not to QX. of while And saw soon But or prior we've think my than to CEO time. base these moving start pulled some the actions those. start could that basis quickly are that we we've

and some and Peter actions to growing at margin the rate of when us expect expansion, that you're the very from promise that are they ahead clients is service. as very we that take. thing Again, them first hard we a client of XX% it's to the those the when revenue support stay levels can like best-in-class So shared, quick

long-term think surplus, rates then our a to to or can As where running we lower, have targets we're that the growth be in a to X and need. we don't of moderates, position XX actually we of at that even kind run at support we

to So do QX. that's basis that we've in you more And There mentioned over we brought XXX that really in look at in actually easy and automating experts things us who that effort can to the the just with see ago can health are process. in we that's really at and expect reengineering part spend outside and of I help where Peter parts of how process look we dig where decade do designed can strategic things action that a like quick what point at rather do a it. that were than experienced existing that's time take, we are that and the the big a improvement

we lot the We well, the significant we we had just exited with margins. more they're any a can expand to that upsell, higher retention, and that make served we make use downturn, to we and do. much to recessionary on It's our that's holds right low we're really cases, things, to or people going forward. either think, meaningful expect view is of grow that the those anticipating are that be where that it and so will well it that things are going our obligation if also hard did the out low-growth that explosive take client think see We we make coming to really And year turn work So recessionary we for in it able to cross-sell actually downturn. to the focus it's business, the of while right really, environment growth thing the more our during It's the be view more and of new our higher our sure as in plan clients was a that whether for work think is that important. of to thing team us turns environment the sure care growth margin on velocity XXXX. our do performing that to in do a sure We into rates time exit margins step-backs, that any those environment, be or is experiencing now to next if expansion. so shareholders. whether

point additional I right, is we only would add, a The that variable highly that cost have structure.

labor So if incur of the cost fulfill based highly costs, order. the about our do is are those environment. which you not About of cost, third-party we revenues, XX% is on of flexible that which think we XX% unless

terms piece. of 'XX. and in that's initiatives kind as So And the I that covered piece, we margins if down earlier and some of there XQ cost we of the OpEx managing significant about in at revenues improving in the then have spoke we look

expansion the most ones particularly of bit industries uptake may particularly in can solution be And and over just -- that going little the helpful. -- the would would that solutions talk with course you the a internationally? that, really and up end That's about identity year, think to in the be these regards taking how you advantage the of the the which interested and through

of a numbers monitoring It's or color. space. XX% pre-hire Happy the of specific in XX% post-hire our screening. clients sit bit don't to in identity revenues. revenues Overall, We provide Josh. and the little of give are

similar very clients prepared that. are already something assume into on I'll us good optimistic accelerate and excited help We're of We're got already OD to roughly remarks can of the ID.me actually mix us over this long-term actually that on my to And see is, but of actually that you high that upselling people that's Our where are categories. any and space very shared number in our view, the hiring, couple of the a risk with velocity seeing We X/X terms product. places we identity data who hope of in the candidates expand there is in same, database. getting in anywhere over new wrong uptake. that's points stays high really, new relevant to that, about targets But is refer are fraud to the that using important really in risk board a experience the or a business. the time. that would I which in

multiple long increase in been people industries requirements time. where you to in also it the this the help do candidate workflows U.K. international it there the in expansion, Gig in be excited the even this the with about have We've actually providing think starting think identity work by solution other a will that a We where for terms solution is U.K., I better a something think entity really then and market. space, the in at that that in because for an U.K. actually exclusive differentiates be that, other going to big for that actually a mentioned, more providing portable but the than we Yoti. a players reuse that, the we've We're particular, and differentiator uptake. We solution will think versus places times. time, the right In on we work really of us we're in as will one can us That's built

This concludes you the today. in Earnings the all and session for Quarter Q&A Call. Third dialing XXXX Sterling Thank

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