HireRight (HRT) 7 Aug 222022 Q2 Earnings call transcript

Good afternoon ladies and gentlemen. And welcome to the HireRight Second Quarter 2022 Conference Call.

Joining today's call is the company's President and Chief Executive Officer, Guy Abramo; and Chief Financial Officer, Tom Spaeth. [Operator Instructions] I remind everyone that management will refer to certain non-GAAP financial measures. An explanation and reconciliation of these measures to the most comparable GAAP financial measures is included in the press release issued today, which is available in the Investor Relations section of HireRight's website. revenue management's opportunities, include growth our customer improvements, including to call, to statements expectations, guidance. international this prospects XXXX flows, strategies market growth and and HireRight's retention, increase future business, during labor remarks sectors economic forward-looking will related operational for market Also industry margins, trends, and cash and competitive performance differentiation, financial differ are materially. results predictions statements Such may and actual

in in to information statement concerning the could of that in Forward-looking differ Management's and XX-K is the forward-looking Additional the Statements, those Form cause actual contained Results Discussion Factors, Operations. of Analysis materially Securities from results entitled and particular, factors filed Financial section of Risk and and document with Exchange in Commission, Condition

turn is call my Guy Abramo. to it to pleasure over the Now

walk everyone. hit operator, today us quarterly discuss you you, good Thank highlights usual. and the pleased and the results. to have of with We're will another through strong I'll details set as to afternoon, Tom

Second strength trends quarter reaching demand million. wins rates, secular XX% logo $XXX over continued a in our high record was year This robust corresponding new prior for the our retention and labor period continued and client upsell end up strong in targeted resulting reflects revenue a markets.

over medium the early And over we XXXX. term. reflects Our our but impacted and XXXX normalized full longer the growth quarters performance last four pandemic expect strong of recovery from periods the to more solid

of net the year gains our improvements a XXX more million basis automation reaching the through adjusted drove We efficiency quarter. prior showing doubled EBITDA over in which commitment and improving year, than XX% $XX to prior flowed that to more point also to over continue adjusted than these The the for increasing deliver income, growth profitability, period. on gain delivering margin

for regions and quality all verticals. our Our strong solutions results high across showed demand continued of our

levels highs, and churn multi-decade the we thoroughness and concerns. points macro to in rising market remains version norms elevated challenges labor The recessionary at the our quarter, environment talent While us, and core demand with the inflation Last recognize talked of in the historic compared for challenge. interest we certainly at continues of rates, than periods. key the Quality success particularly about remain in differentiators markets. our early Pepsi selling historical our for and higher

missed this where screened is recall, is point by find rescreen show to here key created up our The willing you'll all previously against stack we the only that checks If anyone of in not market a equal. to candidates felony we hundreds solution and are and competitor convictions. hundreds are background that

top global XXX% over We at that a this regions. all of maintaining the level all across XX% with quality competitor, incumbent side of to client global continuing deliver to key As this a services with major XXX to recently, of the client prospects business challenge side we such, relationship Most extended offer and we result quality turnaround LatAm both immediately We by a results demonstrated Latin lower to measure Fortune high of up the turnaround to challenge are the into going this organization is we as following the expect. and while region business putting took the time we us to nearly continuing demonstrate time. America client than the test. the

platform. be our key continues differentiator our Additionally, global other to

with to a the pipeline Similar solidifying grow. on our last yet this our India, were example, our with footprint. for with new again quarter, into relationship the once onboarding and to competitor the top-tier we Reflecting technology by relationship Fortune global and in This out quarter, coverage new global client. world company we some quarter strong the during customers customer our our of have again the extended largest replacing success, further technology solidified continues go-to-market companies rounding bookings of XXX

our differentiators account new directly unified to continue them our us appeal highly coordinated wins. that and reach global are clear that New these management helping tell service to drive structure, to are clients platform, and our geographic quality

Regarding as our our the XX% strength quite vertical care year. health XX% The quarters nearly success, remaining rates. core prior growing has and the few been has growth delivered geographic all case for now, led a vertical plus over verticals

our excited first our also backgroundchecks.com. platform, are vertical-oriented to solution announce We on e-commerce

a major e-commerce market. only business targeting with platform As small background screening a reminder, medium the purpose-built we're the firm

an trucking to XX at exciting drivers Now capitalize an working solution specifically There easy-to-use the have leadership and we in trucks, look making over our targeted on building opportunity. than that are million U.S. mid-sized for industry firms. small e-commerce fewer this by transportation companies the in X.X

Our the to ideal the motor connections experience target background backgroundchecks.com. combined with we with for extensive states, in sources the fact DOT an the market all in makes only that this regulations, XX provider service screening industry with are record vehicle

international markets growth to quite strong. to turn our me where let Now continues be

Second showed quarter rate non-U.S. of prior over a in performance year. growth our markets XX%

LatAm outside represents strength had our total, of XX% results. U.S. single Revenue particularly we and the impressive and further saw this derived now region, we every While expand. expect in India to from applicants

our to India. of best Mexico the of examples We with provide ramped in team from platform. continue X to own investments less partnerships, our have XXX. from have power and months, Mexico notable our these BPO expanded XXX than we will past members local make the less the in than global strong to Two we India, XXX. nearly are employees where team markets In this international support we've similarly, operations And XX to more than

platform competitive differentiator to ability unified service us. for I've our our repeatedly, be customers said continues a with to strong As

update our an like I and fulfillment Lastly, to on would initiatives. provide technology platform

streamline end and while we This of reminder, IT customer fulfillment and the at leading the a As a to that a experience. automate have journey partnered expect the we to XXXX. global complete process, X-year services improving candidate firm is with

processes usage of on the at aimed is focus our of back specifically office assets. data maximizing industry-leading our technology Our investments and more automating

planning Our cloud and will other am modules I delivery language emphasis strategy automation margin processing the improve we're improvements driving expecting. first manner. Simultaneous about the the delivered are this Since is phase the measured report the the enhancement be rolling that of the quality growth. and to the will improvement are to cost excited of is long-term with yield automation, are volume the robotics the opportunity our efficiency next and processing into modules rollout, this profitability we moved double-digit continued to pleased first seeing a deployment in drive of to technologies the production. and we're believe and pleased this process program, we on half of We're results the use We of with researchers. broaden in natural reduce for second year. the have and program we

of and year As benefit a next previously benefits stated, ramping yielding modest savings we beginning of year this with by financial the the end fully expect only XXXX.

So a I'll in Tom? add With and in balance environment, for closing, our long-term been turn around And and for the for second closer the talent in business. financial the of outlook the to look new great while for half cross-sell Tom and of we're underlying we've broader ability gives customers the to there first very the the at with year. macro our quarter results that, year. performance able confidence call demand over the our remains us to the pleased deliver significant uncertainty outlook this

call Thank you, afternoon, Guy. our thank and for you Good everyone, joining today.

rate As quarter year. Guy that's market growth leadership million, benefiting over a our the impacted the position as in overall a well fact, from pandemic with period. strength rate comparison in revenues to reflecting as a year $XXX strong XX% secular the mentioned, hiring industry in of the trends, experienced growth This favorable partially we last another quarter, quarter a record reflects prior

We at all continue our to rates high customers, the time. existing new upsell from while to benefit same customers adding and ability retention

has the organic. in that is implementation time is good bookings XXX% a some Our after pipeline very also note quarter. been revenue growth it I our strongest

have be in continue not M&A and we are market, as actively evaluating transactions. time, any executed in the our we While of approach, opportunities to this disciplined

QX now largest vertical to our technology. we particularly our revenue, which verticals, XX% grew continue nearly across to strength represent health care next to during second and quarter back Turning see core the

of technology, comprise care, nearly health of and transportation services total verticals now our financial four revenue. XX% core Our

suited to will continue core these focus highly ideally We customers. on to demanding these are quality our verticals solutions as

than on this Our in XX% excess representing XX%. minimal our from now quarter to than are America double U.S. than quarter. led growing our in the Canada, XX% by with of productivity faster impact FX which each year coupled strength of which continues adjusted screens prior a international fluctuations income International of markets led to the international net had a increase million, Latin more sequential in even India, focus widespread grew improvements, and business, $XX was but driven revenue. The to is overall be overall more our of our strength top on also over million $XX QX. period line, continued with

year more increased prior adjusted In the by points in addition, the second while adjusted row, more improved EBITDA period XX.X%. for or over quarter EBITDA XX% basis to a than margin XXX

carrying efforts, improvement over at or improvement period. gross public The of level. profit with prior is now of the majority driven service of we company especially costs our being versus pleased our are $X are We vast million as margin year the incremental cost

are our focus path; the These there elements can other of one, us the a continues larger elimination. percent specific transformation on process service project a than in smaller four Guy reduction be the service overcame reduction addition year. our efforts XXXX. of technology important technology line. and and in combination rising driven four, and three, vendor from material the already has underway improvements: improvements many that have are are completed There cost to of or touched provide resulted XX% continue of categories automation earlier, to cost-of-service contribution on repeatable over more data of already as past initiatives on will cost The margin cost focus company XX.X% XXXX. as which of in for largely of by continue these which until a general labor to that including that SG&A, costs we public through While revenue four projects cost won't mentioned, drive of these has being optimization, acquisition improvements on cost automation two, Guy management a improvements; The offshoring; focus primary

SG&A generally prior to was Our year. million, of revenue $XX flat higher expense still percentage as but a compared the by

improvement legal accounting churns. Excluding have fees to to of SG&A as increase XX.X% point revenue in XXX than More new increases, was related nearly XX% of a costs, including public quarter. million in would and reflected as $X company the comp stock basis SG&A well from this

are companies, with we a labor wages. tight many increasing like and Lastly, dealing market

more to million to net the $XX adjusted than increased by turning XXX% $XX Now which million income in from quarter.

of In continue as capital performance, assets, addition on our performance, previous allowance our a carefully saw we we reverse benefited note, our our Please with in million allowance the tax operating structure. our improvements reducing interest from to tax with $XX quarters, driven income expense. And we some reviewing we point our are at we future. expense, improved valuation financial to largely our that in improved the assets, the tax see benefit reduction and may by in

Next, to This usage of results flow cash we provide year $XX cash of exceptional from up sheet. operating area our is of and some color $XXX,XXX would earlier. I flow cash with the the have like year-to-date million, balance nearly delivered on another

be project, transformation Year-to-date technology approximately would $XX million. more $XX Excluding operating cash cash was free than flow year-to-date flow our million.

end, no $XXX had our million draws first on had and revolver loan. approximately lien we against of our As quarter outstanding

sheet. this X.X at from time times, with Our sits of down end cash year the quarter $XXX leverage million the than and And unrestricted from of the times X.X on balance at times XXXX. X.X down ended now ratio more at last we

our Additionally, June extended revolver move and increased to out million XXXX million. to during $XXX the quarter, maturity we to amended from of $XXX the size and

to updated XXXX. Turning our outlook year for full

that impact potential we even This demand markets. I around have and robust, anything cannot similar cannot interest or when in environment are than while our we hiring And likely cusp we that past different a the higher a $XXX year the this million our downturn. a levels and solutions is range million at rising the of for year-to-date from type we feel aware can have been range $XXX of all million of performance in continue strong think The With talent $XXX raising of and labor level will seen a guidance on $XXX sustainable, the the macro midst remains services for demand for of prior for new While to signs of are recession. demand and rates rates growth pre-pandemic. not are full have over that our of million. market ignore our do unprecedented for recession. well truly an time to demand a we year inflation, impact a labor, the we seen dynamics this the to are labor than backdrop, while the we has revenue

income $XXX of to adjusted $XXX $XXX million guidance $XXX our from new range million net raising of range to are million We a to million. a

are our million $XXX $XXX range adjusted new full a range We to a year to of raising million $XXX $XXX guidance from million million. EBITDA to of

and comment quarters. not trends new QX questions. we seasonality, robust, the are of With in $X.XX stronger operator, strong forward Thank continuing you adjusted per and $X.XX would we year, share We are as expect QX look was range share. and open $X.XX finally strength the progress. about range per a year momentum earnings on we call posted can corresponding half With the QX the also from This earlier. raising that, previously $X.XX up QX, seasonally our you. to diluted the as to QX to keeping cited second the of as to indicated, of a our to our to given And be QX that, economic particularly in

Thank you.

begin question session. Manav comes Instructions] with ahead. We the go now will The Please Barclays. question-and-answer Patnaik from first [Operator

expectations. outperformance evening. good the just of your you, versus wanted about quarter Thank to I inquire kind this

but million, You beat $XX million. by raising only $X by obviously you're street the

I think you're of the addressed doing you that, uncertainty. kind why given

to guys expect shaking wanted are what maybe just how and I relative So understand to you things out.

and I'll Sure, Manav. start, then, you it. Tom, finish can

to related couple is it a things. of some of So

often of related our clients. latter just services to of The it we half we financial for clients some some do the First, summer, health of anticipated rescreening in timing. Typically, QX. revenue and is care some

Just QX. interesting into some year got thing pushed of was that revenue

over performance that a - sorry, had I'm to you more through in little QX. won't So QX that bit in QX flush

Yes.

the certainly mean, generally, one of I timing. primary So reasons Manav, that's yes, is

of Some on of in anything comments, bit earlier generally, my read again, in hard of the And and not our annual today expected rescreening terms a level then the the revenue had in outlook. some came programs. have QX some of in per little we it's news to cautiousness

the in that's guidance. So what's reflected

guidance. we're we Yeah, full now guidance confident the very raised obviously, for and year, in that

I we to here first Yes, last change note the I sit we're important today, that that seeing mean, think levels of - been it's nothing seven in there's as the fundamental no the year. current months over demand

us still market I worth to robust very time, quits we seeing call, if the all Yeah, we our the in said or survey trends are the couple some to stating are. been thing it's those same reflected hiring the the during of of - all think that It's have at actually, of saying clients the they Even their all as and make last what I it companies up. over they're doing may continuing they a see hiring them you and clients we yet. well, they're what not see are course expect in that out and they're quarters. be be as prominent next Their statements

it. that Okay, you just I follow-up. as but surveys a ask do, perhaps about Yes, the was maybe you to got going

base first perhaps customer half? the assuming and half growth what's about growth talk you're second you been year for can what for has the the So versus the new of

as it's that dedicated last strong the as saw you focuses our - sales as the growth half I upsells. is equation of this largest new upsell well well to got clients revenue Yeah, We've continue to our can that as we've as were not talked generally, team business very sell-throughs were the to of broad-based, organic adds outperform. clients, think the I on our X,XXX going new there well as just quarter-over-quarter. But Manav. they about growth and I to contributions And solid upsells our mean just who, the a percentages. retention. from We first aggregate point, top general piece we're But tell year, contribution

phenomenal. months Our just the been retention last for XX has

seeing Yeah, just half that was year, our that is back business quick, new on we're implemented clients of be of this the very with real implemented to first in also adding of yet the what pipeline strong. to

Yeah.

Okay. Thank you, guys.

The Hamzah ahead. next from go question is Mazari Jefferies. with Please

maybe this over issues are around as talk are Hi, your months? Hamzah. your filling plans is how and labor bit business little growth Hans And directly for in just the headcount just then availability Can you well? next a indirectly XX impacting what

researchers of of out good from higher now, the which a turnover question. a it our a we're labor great in everyone keep well done beginning operations, sure dealing operations. high a we've same no mean labor mix way. it's got our as - especially There's talent the then on we're pipeline staying by job finding our but some good finding We've So tend year for and lead the customer it make keeping lack We're earlier, finding the of the We've costs challenge. in retention that with pretty recruiting be it's white-collar up to world employees. of front getting in the question, up to is talent with retaining Tom the service business. and and challenges I potential to higher of types a in will the talent, before and team the But and talent. good of folks, attrition a pointed And bunch beefed we're

a is ability section numbers take Part the the talked of about the seen that industry - overall thing of geographies same this people one indicative for ramp thing we're some Guy combat again, it's this quoted our ago, it well office, that the India didn't to it in finance here thing. we're now people support. in perspective doing where that Mexico a our we're support and right? India to nature. the City is is different geographies. Mexico offset for And diversifying about trying and terms a personnel. got I've of Guy City in the with Part some our his is part We're of of diversifying year our in doing geographies seeing I end Yeah. is pressures of office of we're from retention some of in lot jobs a our by of U.S. in in and as good as exact operational to office So back we've the Like kind

the appreciate it, how then color there. about talk allocation, and you're just And there? pipeline capital M&A thinking about specifically can you the Got

Yes.

got So about can companies lot add much geographies. or at just products passed strategy potential We've good more our oriented new very value a few. on is pipeline new spoken a to either I've a and that opportunities. We've in of business M&A our

Our tuck-ins screening - of doing doesn't that the me given part to of traditionally we're background take sense make continuing market. small a that from share companies with to lot pure

pay again, companies I to an marketplace. multiple to continue but in But niche I to activity that the either So EBIT it free it will us with want provide us, up. presence be business capabilities can see don't to or bolster want geographic some for win that we get that when you'll

on congrats and Thanks strong it. quarter. Got the

Hans. Thanks,

Please Sabadra Markets. is question Capital The with ahead. Ashish from next go RBC

further opportunities care the on wondering side for you Thanks looks vertical. Obviously, drill more good there. strong growth pretty on particularly if the I health really momentum. and the just could out it I on just to health there focus pipeline, taking was down and wanted like care question. my

good another so Yeah, question.

on the you're where things care particular a teams there's the staff growth that wins We've our experts wins seeing, health from that that numbers, on companies So some in reported had providers we're international all health have has care care quite our emphasis in recent comment company's our and good of of global with with would with great that is one had out broad vertical global the doing pharma health that markets we're the coming base companies that general we fact health there and that filling emphasis an of and a for competitive become advantage, be especially some with for, in platform is lot seeing of pharmaceuticals. But manufacturing us particular care business portfolio. kinds our of companies.

Yes.

it's I saw jobs us. you important the for day. vertical an up numbers mean other think the come I

bit was sectors for and economy from vertical perspective, such in the we're kind the me we take have that was in front us don't of openings if of important to overall vertical. the performing continue I in strongest certainly, a why one health the care. it's pleased U.S. there little - really numbers that's While And strongest, a why of share not and backup an job - that grow a

then strong that's you and but now to And - as pretty was you Yeah, very had expansion the maybe all basis talked I there on execute IPO, expansion. margin about on just the projects about wondering, continue the helpful. EBITDA you labor also on projects, automation we And the sequentially. margins, think a margin that how should at improvement, operational talked year-on-year about,

So made margin wondering thinking if ahead front, and expansion how I as you tracking just was are opportunity? might - seems the you that how It so some of you along? Thanks. like about on that that is coming be you progress

expand that those, in don't going project start background, major it meantime, efficiency day-to-day on the the in results will do not no our we to material automation about have Guy to just line still call operating I in wanted focus problem. provide project, just There's other we to from lot But of talks why And that and Yeah, want kind margins but different an projects all continue programs. of we project the kind It's looking on advantage working really ongoing that's to to take from perspective can of. And the a XXXX. bang we'll one we're think we're about. that operational item, improvement on. I projects of automation always big the that

from. of most that That's where came

Yeah.

That’s great. again And congrats result. on a once solid

Thank you, Ashish.

Nicholas Next ahead. from Please go question Andrew Blair. William comes with

afternoon. good certain on the about questions. hiring Hi, to for trends. or wanted potential economic follow-up a good, momentum business like but is Thanks seems talking my for a Obviously, slowdown more. an bit in quite margins I you're it normalization taking

could wondering margins So more protecting in we I'm growing to type to think profitability if how sensitivity of or even challenging talk hiring you just slowdown? margins and of a kind for should about environment that

the Sure, Andrew. I'll first of part that. answer

to out good labor we big implement we a the to we office chunks of of part of the macro that labor insulating call as So technology start initiative technology, ability regardless is the going going impressive. of to those system that very one we right? project the is is take is from effects, back That to forward have work that our environment have automation remove

our nature that provide that. of certainly cost But continue the So And do the variable momentum has I'll on will talk with of it other margin. let positive really on to - to half then Tom business. the is

XX% and of labor Yes, things what cost we've was data third-party our service roughly I optimizing mix that driven of geographic that exactly mix that's quarters work. that labor as labor contract is resources our our that contract costs is own Part use say. between as as look mean this our we is at, spread also well in said by the of as what have previous labor and variable and optimizing it's mix and our nature, really labor own of today. that continue of I but we labor of going the allocating we're where the of to and to well

see those of dialing us think models. we in fluctuations demand some terms we any may flexibility all allows So dials in

for And any Great, of clients. sort I'm that you monitoring, conversation But upsells sure are products, upsell. the social kind then my it's follow-up, in whether deck, in momentum post-hire new of form call monitoring, about expanding the incremental existing that thing, of to internationally referenced also of media there relationships with is you thank seeing out? you. slide a part

some international that it's We Actually, part not see across to is of are. all board, expansion, so most sell of just the we continuing the products. what but is - new

Some through us media screening, is social both to in which for health taking at monitoring transportation be of our doing and products, are follow with health those monitoring drug implementing We're more and monitoring. two pretty and good a good its doing also vertical care, clip. strategy markets off

good been it's a board. across the performance So

you. Thank

The from Please go next [OpenText]. question Tong with is George ahead.

Hi, afternoon. thanks, good

mentioned You XQ was Can approximately quantify revenue some that rescreening to from much pulled how forward you was? XQ.

No, it's - get we that but won't just material, but specific, not

million say, specific all level. would not the is to get Single-digit I

at high and it just a maybe Got Okay. stepping more back level.

versus creation that disconnect Or basis? you're new seeing headlines on you of net function You mentioned internal current Or seven not a past that in you're months. business levels a mix Is and initiatives? your the the of a it's fundamental at we're seeing that you really that? what more over any churn the demand labor a between just function the trends of really seeing change job How function or would would explain versus what in your How explain out there? is it broadly level?

And even if numbers, everything, they're pre-pandemic. than from came numbers right? the numbers, the Yes. bit little of still a First bit May if they you just look down huge. bigger mean, the you George, though little it's jobs jobs at of were all, June - in a at way frankly, they and look came quits, I

from Second is, look lot came a retail. industry, at drop the you the of if

conversations clients. we The to planning all technology, by companies all struggling services, the very for health for that care, supported specialize is have with in we year the retail heavy. still hire they're transportation, financial not we're that So of remainder the people, of and those

to So continues that it. is one then sure. job And we've the the one - of also being the for a screens per that's global competition part labor talked it's for about show a of lot before continuing. about number of big things is More hiring

hiring see patterns continue that, to says slow ours continues thankfully client major to who now a just we're okay, can I are - down. to We speak trend. our us sort to heat up. that of to It starting of

change? the that question, about. talk all can know for and we Now all reason can [Indiscernible]

Great, very helpful, thank you.

The next from Andrew Securities. with Truist is question Jeffrey

on Hey, This is for guys. Andrew. Gus stepping

new care thought to not, this it? more. lift that digits little what understand to points of quarter? don't that strength double I wanted in understand the growing understand, logos, nearly driving tag of can health but was where the Just unpack upsells, I And expect they cross-sells, I want just growth? in continue we the onboarded. sustainability XX%, part is to the if a UnitedHealthcare the the of want as to I it were in kind and

Yeah.

we specific we first, you But any any new and our clients dependent I that new obviously, So not before, a onboarding in the we're on I marketing not some can too. it was what getting. tell was won't that revenue It client. - are been does performance - address won't and There been comment successful made that pharma wins. particular, is is single companies we've

then very We we launch onboarding very care track before screen. first the companies and health background upsells completing have record a good of even

is We're drug for good do capabilities So the managed they we're of that. finding of outsource on internally, do background doing might to own a and to clients. because health we they it we care we've Well, finding some will immunization/inoculation the and their their example that them a a outsource find I've screener, rate they're that in-house. good to some scheduling very checks upsell that us. products built testing then A companies but to they used of before immunization/inoculation that receptive manage have lot that

winning the momentum very a it has across broad. that it's it's but an broad, So I mean continue. client the board. large is on will certainly impact numbers, It's very

it. Got

from comes question Please Mark with Next ahead. go Marcon Baird.

And delve in a relative wins? have answered, of I strong more but just Hi, order in get of you're bit the of that been to competition. in accelerate the good doing most to programs recognition that are your to place my some the screening of you the terms and and for capabilities put wanted to afternoon. questions the challenges of how even get What to some are can opportunities little expand terms more further in what

the of Pepsi call I terms what we're in headed Mark? mean challenge, again? - the You Where

Exactly.

Yeah.

our compliance That's efforts things on have missed problem, the a to sitting it. And the of a that the HR a lot until problem have know when is well that may Because in visit industry depending our you screener the of screening and of functions and owns one have background you our you program. is find to discover security as to don't teams' So teams don't we And we get big that been sales that. part have as and is, a your right? it's teams see clients marketing background in out them pitch there. you to who wait challenges

we and vocal it. So we're on about be that. We're continuing are have will to materials to build continuing that build comps that continuing to push and

is across is. mouth doing we're a data. that money it the then the said, to sitting best putting, actual the So right we're showing And where them do prospect our as as there table our from and I

absent I it we're any seeing we - So to screening, think good know, the And will But see mean pretty pay to data of is I that. also skepticism, for see clients - required. costs acceptance part don't want right? some that you know? We you are

macro business? relative shifting basis, regards the conservatively. that of were a Or And at on when of that to in terms talked is fairly there how nice you different you we're the a conditions the beat, Yeah, sort sense. done but - ended any reporting that seen guiding that - up at about, of then tone monthly and Have are you're all? are any verticals seeing all change there the you had you first quarter with makes to are factors today you

difference. No, no Mark. No,

quits cutting stating like part that four of As clients on it large that But a with because target - not is. bit it's on-the-ground I teams some is continue still we’re going were are imagine just and to push. hard have the just up [indiscernible] with be openings, that, are to that mix. recruiting we keep still but being when continue telling We labor don't they to dependency think what That's to going our have I you the of or of large single That back struggling a industry, at mindboggling, to us. be any little not it's you, I any the ours publicly single way despite said, that's hiring. very look on the so their honest very, industries to demand, client

ended then the Yeah. with taking to success win was one that tremendous up you regards And this to that obviously big had health much care on recently? verticals, that there. How due you of

of wins but of you. the is all it a big any that of as helpful, of Well, it, was what can on but client is tell well. of back some bunch Obviously, the combination I that not

Yeah.

you performance And then What gross in at margin driver would this there? the And the point? how Okay. the nice. characterize pricing was core industry was

offshore through alluded I to, include at to as right? does as we're we always butter in improve and targeted that just will increases, or onshore, different create that the our right, can some or were Again, toolbox. But in toolbox, were moved automation ways opportunistic maybe a the margin, some do say any this that minor past, And as we in price just looking on ways very XX and doing would efficiencies be a tool I don't people moving about past labor spread We basis. but talked Yes. looking increases peanut drivers, work the price offshore price, pushing flow looking that kind repeatable a that projects at of really efficiencies. there. always we're a quarter of at to through Again, primary of that operational be eliminate past system

some million, of tweaks and drive give that But up to we'll quarter enough there. add a here continue $X $XXX,XXX to those $XXX,XXX, improvement. us nice So million those over programs make

job. Great Terrific.

Thanks.

Mark. Thanks

Credit go next Suisse. The McVeigh Kevin question, with ahead. Please

any the are they're other Great, way starting attrition you you see it in and or so screens move one change Are way, impacting margin thanks churn the the say your that incurring? the the to much. seeing To clients? that's of another rates

talking that Kevin. employee they're mean about? churns, you're Is I

Yes.

patterns. again, goes Generally, Yeah. with sometimes holidays. consistent. ordering honestly exception of seasonality, haven't the get it the been people I a ordering - And little have patterns to little summer, the the of are on you bit when overall slowdown pretty kind a a over of

pace? kind I some same with how - had some of a recently. lot clients frame you then of recently more And been Or back. the at winning us been know the Great. help momentum just Is that success around that

Yeah.

rolled of us removed We've think the products I that when So from back again, about have specifically talked India. client the platform. with only And we some continuation talked came, out we a global in came now we the I we I we business some have trend. of platform, theirs large a have came rolled us. out products, technology that last remember, backs investor. of these the backs new about global seen reimplementing and international win because win they India quarter, that was to don't

back yet in that's So win another I QX. that got

So there of I was QX. in two two think them noted in I QX, another

Thanks. Okay.

Kevin. Thanks

The Stifel. next question is from Please Shlomo Rosenbaum ahead. with go

thank and other to makers these starting you we're of to with came all plans? [indiscernible] how some what of they are ultimate that optimization, words, terms find to a management and plans questions. Guy, out you're of and all the decision complete your think --? far sudden, Or back get C would how suite forth are about or Hi, day are In really taking is Hey, going one clients of change back find tight levels talking my just clients the the the sudden for a in hiring? you that pulling

just have we're Shlomo. right? people. who and and piece the pipeline question, tone program. that doesn't could one for client, change second data the them. you, the than much. freeze, of in know day talking the not, it's take with So sudden, right? to, and that, great right, mean I the the quarter say, quarter in They that can't management a that absolutely And times It More just the the we we mean we're acquisition talent I it a tell time, Yeah, at screening people first keep a every depends the and between hiring do not did runs conversation on all they of continual organization, demand they can

that us, I a to definitely comes their they out I think my same I note, person. involved to workforce team, does I churn level lose If are are important also it's comments there remains mean high-profile you saying think that there. right? they're mean been high. lot semantics there's go companies churn literally I somebody factor have not I tell because to they're replace not hiring hiring or going in anybody of freezes. to and expanding the applies can thing that with And certain freeze, hiring some And but accounting And there that about in

say somebody freeze, so mean a And not often hiring it doesn't but that's not, backfilling. may they they're have more than

it. got Yeah,

and taxes for Okay. this Then what tax kind structural rate quarter actual tax were tax rate an rate. now EPS almost you versus what like assuming seems guys there a are you assuming It use no And you of guidance? paid were the quarter? last

what might this guidance? understand to changed trying just I'm So have quarter's and quarter's between last guidance

Yes.

always generally driven We're is U.S. to foreseeable for income, future, right? our least taxpayer. be, going going to be a by not at rate tax Our the foreign

numerous calculation tax countries. So doing we're because it's calculation complicated a a much different more across tax

which to break country, going our by fluctuate going is out. income it on So to not based obviously we're

So level, the a of comment giving on you country call the we we're and tax seeing allowance. actual a rate at the rate. based made are about And an on what on blended it's our income our reversal I

quarters. the Our couple where see that here tax we've that them full had for - last we're to of consistent we've been years. likely a against point generating assets have But reverse profitability, you're a next few in allowance allowance reached now the

last rate, though? of there the Is the a quarter? in amount words, quarter between other tax and this change change in was you're In pay there assumption to of a the going taxes

not different because it's yes, It's the blended it's but recalculated U.S. driven every income country quarter by rate, the based country. have by by But on be to our going don't I

Okay. that I offline. on talk will you with

Okay.

Celino Jason Markets. The next question go with is Capital KeyBanc from ahead. Please

Hi Guy. This today. Devin for Tom. is on Jason actually Hi,

Now, taking for thanks my question.

to post international one to business really strong First I is growth, hear. have continues good

have you a of Europe. double over But from exposure focus on how there. investors. it's click big to key want On been Just

in ask region? want around to wanted customers that seen the of Or changes any you've any in changes who spend Just there? about sort cycle to if sales

the to It just It's We've its very at have well. growing has The - it's No, East. well. broad-based, Europe. all. not and it's business It's good the do and some in Middle continues U.K., right? overall Continental not done seen EMEA progress good well,

not any seen slowdowns have We cautions at all. or

then you it hear. full for macro on macro? Yeah. are to And in Got you but not second guide, just any in deterioration it, already, assumptions the mentioned that’s I'm of baking the of if in sort half the good the guide. sure of around quickly year terms

are and Yes. at aware headlines you very comments. of macro there back the look are. challenges go can Basically, we the and my Well - what what out are

off to from we're been think I guidance. more that second half the half. far first at but first saying from can little factored bit of in what we out. And were not the we've ordering caution Again, came half and perspective, where relative the of a it's that our you terms see terms half we there's where in definitely what you can level, that see seeing in consistent our second we've been into

it, Appreciate it. okay. Got

Devin. Thanks,

It appears I'll turn have no questions. closing Guy call back to for further the Abramo remarks. we

Thank you, up all. We'll care. follow shortly. Take

Bye.

concludes conference today's This call.

and participating, Thank You for may pleasant disconnect have you your day. a lines.