HireRight (HRT) 7 Nov 232023 Q3 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to HireRight's Third Quarter 2023 Conference Call.Joining today's call are the company's President and Chief Executive Officer, Guy Abramo; Chief Financial Officer, Tom Spaeth; and VP of Treasury and Investor Relations, Andrew Hay. [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 on the Investor Relations section of HireRight's website. Also during this call, management's remarks will include forward-looking statements, including related to macroeconomic conditions, new business and customer retention, partnerships with HCM providers, biometric screening capabilities, cost reduction initiatives and improving profitability, cash flow and updated outlook. Such statements are predictions and actual results may differ materially.Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in Annual Report on Form 10-K filed with the SEC, in particular, the section of that document entitled Cautionary Note Regarding Forward-Looking Statements and Risk Factors summary in the 10-K and Management's Discussion and Analysis of Financial Condition and Results of Operations.It is now my pleasure to turn the call over to Guy Abramo.

good we everyone XXXX share and with the results. operator, as us our you, morning.I taking appreciate time Thank third quarter

challenging breakdown focused ever-evolving employment For executed With this of economic quarters, four and backdrop, provide improving when our market. our challenging geopolitical will macro volumes, in we a same-store Tom revenues, a $XX.X remain million, data, an later the losses.For in the improve client inconsistent despite base does what environment and we the turmoil as with margins on say past in To points, successfully significantly demonstrating million, a can than lower EBITDA hiring third while quarter, the that XXX control, memory, by to your execution and date.For Base ability last time and growth basis we this to year-over-year. to was than analogous we indicate sales down a profitability $XXX.X refresh year, quarter, algorithm our is we hiring volumes call. million are remained environment. adjusted not we more pleased lower generated with $XX revenue

our depreciation exceeded driving XX.X%. and adjusted margin, the XX%, flux to gross general Labor EBITDA of amortization margin remain in conflicting data. During the markets in quarter, plenty excluding with

certainly turnover.Uncertainty openings last technology patterns a verticals recovery. higher quarter, the of pleased quarters performance the employee spent a technology customer outlook, of improved typical services of the lot a I businesses has Part health the bit minute.Our in were than in X QX, but am however, line in expansion, our our driven concerns QX some year. discussing to with similar slowed to a and remained of I by remain was, down job seasonal showing first after the to vertical our was time with and report of slowing in macro have as significant While in with will that from which pre-pandemic been transportation levels, has rebound essentially The clear was quarter. there flat to get coupled line quarter geopolitical We care that a upsells that and slightly expectations. stabilized our base and

pipeline core remaining softened declined driven slowing $XX revenue more this customers. XX% the by more QX, driven our to vertical volumes quarter, and of Lastly, compared quarter than business been. increased mainly has second that the Those revenue from cuts.During million to versus due have services has strong new not Year-to-date, growth than in European-based XX% and have financial our new business indicated employee primarily from of as customers year. our job necessarily it ever turnover as banking remains

expanded have top $XX in teams contract and converting strong of we some the customers XX%. our During of presence estimated enterprise mentioned customers million.Our revenue. and X just success, added are Retention large well we quarter, particularly And annual working with had a I our strong ride-sharing we engaged, earlier, with very transition pipeline go-to-market care technology, to our in under as value major company. health remains and at as fully onboarding upsell combined where new these wins into

automating pre-populating into tracker accuracy and redundant I-X background verifications, entry, E-Verify Management recruiting updates. timely process screening ISV in Gold impressive retention, This beyond level high very announce the addition Accelerator program seamless drives screening improve enrolled partnership. In background products Form drug to reducing such data services testing, integrations Solutions.Our company's expanding satisfaction integration customer HireRight's Oracle that comprehensive to Talent independent our automatically and background and streamline we Program, Oracle Oracle the as the our request have pleased highlights the we forms, providing vendor, of by are software

strategic providing with integrated global their worldwide name.UKG management Customer UKG global opportunities opportunities our FBI-approved supporting single global our the channeler Aspire will we as administrative process, capital highly we to In background under leverage support capabilities. our Kronos the capabilities HR service externally their promote was management, a screening the under The ISV Also exhibit future otherwise partnerships customers service delivery ongoing Group, enable product our to solution screening the our and product, biometric-based implementations integrating applicant Program, market, benefit and about through complex, to UKG systems. reducing to expand and of began through human Screen in this and of and management Oracle. leading growth HCM excited provider platform the and best new UKG footprint this we experience partnership managing of global is now And revenue partners solutions an by our addition, tracking Ultimate forward possible the for Oracle's human integrated capital and our by and exclusive estate of These provider their DTIS week. years. been sole HireRight costs, partnering customers.During HireRight to UKG leading headcount, Accelerator UKG strength solutions from prospects closer quarter, efficiency call, XX UKG, global our evaluation will are updates.HireRight premier and customers go-to-market we UKG HireRight the workforce including increasing quarter payroll, employment solutions. look during is and for which simplifies have extensive real agreement, plans at after value launched further selected Screen announced partner branded players, by HireRight's being that expenses. just alignment platform, streamline known Further is with co-sell demonstrating global rebalancing Screen acquisition shrinking Conference discretionary as called in of screening be newly first and the regulated HireRight. our

the our improved rebalancing by stack. nearing our technology of labor are We force completion enabled

favorable operating self-help the economic actions We are well macroeconomic leverage These throughout improve XXXX. our this current plans from growth will and market are the continue result and of changes changes markets. to in These at control, murky turnover we long the markets employment into more in over that increasing rates. remainder economy year benefit as the secular firmly churn our believe within freelance regardless the in of such implement velocity trends and labor will environment.Looking in and our designed to the market, higher outlook, term, the and

However, while of indicate still is strong linger. for a slowing a recent concerns noticeable there has labor as reports been recessionary there talent, turnover demand

now which of the especially our Tom slower backdrop macro with results, provided but volumes the discuss are middle given the outlook, will broader we expect our pleased are we moderate, our quarter, of previously As confident we shortly.In in to seasonally inbound in headwinds. remain closing,

remains resilient, business our margins Our the regardless expand demonstrated ability and we environment. economic to have of

long the are the We for managing business term.

proactive in maintain making be will to we positive our decision momentum. our near-term However,

and the improvement reflected maintaining industry-leading quality our to and for enables in prior relationships hiring numbers which with our key turn provide And with updated third financial XXXX. performance a while Tom the is quarter that on on for and at continue that, initiatives laser-focused service I'll closer to margin Our to outlook for our look estimates. Tom? outlooks customers clearly results.With surveys, our be patterns we and over to view hiring near our our based call front-row reported provide us of us customers, a real-time focus

call was year-over-year.Upsells roughly our morning, Guy. on Good following algorithm total Customer third for joining approximately Base provides the and top X% driven these year from revenue into that our breakdown. our X%. X,XXX million, negative offset growth our a approximately prior mentioned, XX% quarter decline of today.As churn the XX% reduced down our based thank was represented you customers year-over-year. growth $XXX.X which represent economic headwinds. XX.X% customers, decline due by hiring Guy revenue, you, Deconstructing everyone, to volumes Thank versus by results

acquisition Growth verticals. New $XX logos more our with our represented at SMB contributed finally, decline contributed a during XX,XXX to long-tail of quarter. our the year-over-year, business more X%. X% consisting added And X% than customers year-over-year.Looking relating million recent than

services, year with the hospitality a financial also Currency mentioned technology EMEA our improved Guy Health slowly in down largely India see combined in XX% expenses which vertical and it projects saw are decline. green to the last our prior in our exclusively largest stabilized. while we had have revenue XX% with customers this the versus down from data wins. from health to our fluctuations flat has driven first were in rebound number would reported geographic and related completed care some Layoff was consistent XXXX year-over-year, large care year-over-year. peaked we APAC Absent who still the nearly of services, banking softness change, year-over-year, declined prior. quarter with Non-U.S. based financial been beginning to prior level. to and XX% customers. have impact XX% of Guy in declines during appears year-over-year services the down to decline this half European-based to rescreening which posted customers our was After in revenue. quarter, orders business by and in approximately that grew and consistent and vertical slowdown verticals applicant technology nearly by earlier core driven year be of to material year-over-year, softness XXXX. shoots.Retail QX As of continued turnover on And accounted prior the our by new split. driven fairly XX% consistent was minimal for at year. QX QX mentioned, X% total revenue.Turning our XX% a on and year, the a our and location periods.Turning this quarter, have a Overall, profitability. nearly revenue largely impacted by the

gross up is our on we than despite initiatives our service, improving made operating we quarter, is are and first $XX.X great efficiency consistent commentary. which last though half grew points have charges reported and than just amortization reduced lower cost EBITDA, of delivery will year the This our program. still of million continued restructuring indicative year-over-year implementing of more some margin margins, these implementing basis focus improve to revenues.Our to XXXX. through XX.X%. and XXX to to of growth Even the we restructuring to points $X.X with our activities date, excluding XX.X%, progress is helping our and EBITDA drive continue adjusted depreciation adjusted XXX million and of We basis previous During

GAAP see $XX.X a deeper of declined to savings quarter, to on into a million expect in in and the XXXX by quarter. QX from We expenses full this the this SG&A SG&A implementation million savings throughout run additional rate total end $XX.X basis, XXXX.Digging period

restructuring by to actions lower and stock-based Excluding decreased XX% compensation. costs $XX.X restructuring charges, compensation our million, driven and employee variable

recovery had insurance approximately million. we $X one-time of a quarter, the During

marketing XXXX costs.Adjusted debt. million expenses, QX to other of income Excluding million. was operating this professional were a million net other higher indirect expenses, income offset indirect restructuring, $X.X maintenance recovery on result technology recurring and fees in taxes, higher This to one-time all such reduction expense increase increased $XX.X revenues, increasing with as quarter lower for $XX.X by lower of and in costs, facility rates and The our QX cash XXXX. lower $XX.X due to from primarily coupled by which items royalties on expenses interest our driven was the legal partly partnership rate of is compared million $XX.X floating million

note, which from an on will based estimated our tax blended in due the outside cash domestic reminder, paid, of of our rate U.S. estimated differ are and generated statutory XX%. U.S. to As statutory using the our taxes rate revenue rate assets Also actual are effective a primarily tax GAAP we our

cash buyback We XX.X year cash $X.XX XX.X reflecting payer for for continue EPS shares $XX.X in to Outstanding the diluted during in adjusted average to quarter operations generated QX quarter to the in tax through was was prior quarter quarter share nominal were the free $XX.X and repurchase at versus excluding end share than million, XXXX. million period. the from Unlevered have a our purchased million. the share million cash million, through expect cash the to was software development more year-to-date million. The and the capitalized weighted of acquisitions be flow flow, program.Turning diluted $X.XX $XX shares the reflecting flow. continued XX.X generated compared XXXX.Finally, count We program

and $XXX points.In XX to against revolver in LIBOR of increased to the $XXX spread converting revolver Total year points from X.Xx, leverage proceeds HireRight's of maturity debt. invest ended $XXX addition, ability our the we million on a we We remain us outstanding term extending quarter We from approximately end refinanced the to $XXX borrowing of of index enabling share million basis refinancing and to expected our in quarter, and XXXX used existing increased repurchase liquidity. draws Xx last quarter, ratio of $XX in September, from from the business In million. the to we to our $XXX Xx. improved increasing million to flow, the remain the long-term loan.In from from in generate is SOFR, borrowing under X.Xx shares reducing repurchase the to to program. to in At the the million, loan, million QX cash our XXX basis we the about as term had shares authorized repurchase to no total and collections Our at balance as future sheet confident in resulting principle million XXXX. opportunistically increased our well range and the cash $XX cash up cash net

is point operate by in adjusted ahead, we well improved by program concerns both margin.Looking restructuring to geopolitical economic profitability XXX driven a beginning challenging an improvement continue to uncertain generate outlook. as exhibited as Our EBITDA basis environment our in as

in hiring in mind, revenue free to we cash we cannot flow are environment. maintaining previously to of have $XXX net predict this provided revenue patterns in a in While changes, unique EBITDA generated this of we million outlook, $XXX and range or operating income our adjusted strict regardless of margins key can diluted operator, a $XX team, million, of economic forecast cycle. a With long-term a to discipline.With our share improved converted in which are actions remain we adjusted million, financial million We short-term call range a $XXX to we trends of $XXX was; range both and earnings to management where in range the $X.XX.As we monitor adjusted $XX on questions. maintaining that, capitalize revenues to and million the open $X.XX initiatives, will growing implement short- million in through and per focused while strategic for

coming Blair. is question first from Andrew William Today's Nicholas of Instructions] [Operator

I wanted first. to ask on package density

on media you I color Is and in some add asking more frequency order. were the success or any ago? out what are typical tech clients just they're for of they think provide care. a can increased any supplemental of year today kind screens upsell or called or other screening But to health auxiliary looking maybe to there social you more two that any than

especially in I is appreciated. from it in momentum that expansion. we of Thanks, cross-sells. driven still several a our value A those Two industries. is have haven't increases good and the other kinds drug re-screening sort and from we you the cost because employment upsells pass-through would costs. that of things verifications, because Yes. by say haven't of geographic Three that's to the of of upsells sort as amount doing parties are would tell nothing over we're things do of the keeping concerns eye yet. vendor from an clients one I own employment increasing But And substantial. to and third try of our pretty change.I just we verification that is lot of regulated the Andrew. especially we and say Much very of the employment team employee through seen that health lot see on One to that a that of a more we changed. uptick screening. get report areas, monitoring, shift we business much solutions. in see verifications wouldn't the on in only is I

machine. the in noise some Just

year then own to how helpful. as they question is customer already even hiring broadly of for go medium-term them ton that now. a follow-up, it right through point? realizing And just sense That's their from my relates conversations not budgeting your any to provided remarks can wanted Any looking on what question, there's a more ask at my or in second prepared Or plans, that specify outside near-term or as processes? quantify you you color this next

main employers global say of to -- would I employee not slowing. hiring trying a consistent optimism rate. the little that, clients. look one the predict. road though a to that uncertainty That's quite year our company, say seen or bit turnover Andrew. fact, uncertainty And They're it's what some thing can't customers, turnover just Yes, in hit Even been them that international we've a cautious really year. of thing in the driven to is half that. figure large of said in next -- there is like year I've would most will we a almost this But year. is it's what that like. sure by -- next turnover, I employee some lot having the markets, be of on mainly word our that's the the been in fairly one of out hear would this I this in visiting for year is that especially versus second continue companies, And

level cautious of little of muddy looks our very bit kind uncertainty especially in terms turnover us enterprise really optimism, next clients. again, but reiterate making to year that But So like. just on like, call of uncertainty what what around a large is in look making just it will a

next Kyle back next question The question is & question of is he Baird. of Co. the on coming next move coming come from to requeues.The Marcon and Mark from We'll if Peterson Needham

in about, seeing is it's what we been just if end follow-up further question. in of on the have year -- that bit screening could just churn down would of past? other slowdown, impact European that like at discuss are is? their levels? group banks a base seeing like, frame its a what clients do from preemployment of of were how companies up a to prior Can go like the an churn how much a next if uncertain, materially mentioned they employee within really up you much being could churn how terms points question terms little First you lowest of are in How little ends bit And to currently the you degradation of level low slower,

would offer that did right? Yes, a -- comment of about of the increasing my but know. hiring talking was in Mark. what environment in detail turnover cautious because be good optimism uncertainty part first be potentially of in more than hires, It's I like. terms I just wish And could I question, number general you the don't the we they're just My

for think pulled hard we're Mark, rate closer in But us, we JOLTS our scenarios terms lot season, indicator detail I in that, what at how us business I I number that but is see what it's existing look budget budgets, than has is did. in report So manage we of quits looking that various building metrics, and you for at. down to too, clients. that we're at obviously, obviously, to really levels. mean, do as different an you we're we a can from say. at, we'll look we'll you But can't of the more to pre-pandemic And offer see look much the

think we where over know, is year. simple indication it expect again, churn But are from a as to as next of don't I turnover right? increased in heard the be cycle some So, that's comments from I Mark, of an kind I've year clients, perspective. we this

with both up could being? little feel then And of and deals the large us And a into uplift tapping just signing. feel, the regards drivers some could a X obviously, -- records. bit ended there's of give and UKG, what terms bit dimension could that give congratulations large of Can then us of the in end terms little that also then that a could to into you Great. deals you tap on of clients potentially those more records or up in Oracle X drivers' potential end and clients X the you a that Can that. or that more up

you picked Mark. I'm Thanks. glad Sure. that up,

are of us major it them wins we presence on competitive better provide tested we in solution the lot global providers. We expect that screening. will differentiator we hits sizable industry more for proven talk makes we our the being that partner is. a proving platform call a against clients next expand they're in sort find that think more we when year. pipeline, to on screening. continue very gave who space, this single for and us we It's mentioned a they're increased time. The and differentiator largest have They've us, mention deal player action HireRight me the here, is background an what with that going want more global us the superior -- increased they into be to absolutely company, into talk to openly I prove that of our that, our and that partnering we provide deal, our we us. and been providing and in technology have you is other deal as So, seeing ride-sharing to continue the it position And those in as flowing pretty consolidate week fully about some a of conference.We're as choice why HCM some get good we service where kicking And a to made and We in We're would do UKG company. I solution off Oracle hear now to the confident that background all providers. screening other with exclusive at deal it's about UKG the at -- of recommending their

increased we're through good so seeing And flow them as well. transaction

offering on very ability results. technology to differentiated stack, some the continue optimistic our our and showing that's we're of marketplace win partnerships So, to this, in in about like our these our ability prove to

and You the some wins are big mentioned Were Or the takeaways wins enterprise X from the big wins. new those in? X? or X of regionals other Can to relative one That's X squeeze very encouraging. I more of those logo players? mid-market members

Yes.

those one of were them to in So of totaled enterprise we we the X $XX X just call X highlighted million. the highlighted up we quarter, major from X, because deals competitors. and it mean, right? because the I

Peterson Needham Kyle question from next is The coming & Co. of

capital Sorry for difficulties to on the Wanted touch technical earlier. allocation.

really here, a of debt potential to job see great additional you the use of about attacking the the are good guys done You between refinanced. buybacks get How M&A guys 'XX? thinking year throughout and have cash the buyback rest or into

Appreciate say I been in made would pretty pretty our -- tranche dent and our we're significant we've on program Kyle. is What obviously Thanks, that successful we've been third share program. of a repurchase it. Yes. and now,

I point, mindful one think though, you where in the get get the liquidity get of a a to you the from to investors being point things to of feedback And diminishing we returns. of the share. that is

I think close So, very we're that level. to

we on market there's of really the you generate were that because about clearly, last discuss I of the don't very But our to program further. an quarter think with we more look extension basis.From so then, historically valuations the it's active we'll use year we little of cash. passed over prudent that to M&A a capital. And in a was this ability been. deals. to way have than We'll didn't continue the continue on good a prudent that a bit the tell perspective, obviously, can quarterly just in or couple I were we at we feel So, an Board excessive we something anticipate be

consider we'll go see can quarter flow to addressing as as as the significant. cash this we You generated debt was through. levels do And into we well pretty XXXX, we that the that continue

would last the years a done equity like or to getting probably the to towards the to we've years. addressing where approach for towards But the we're versus that continue if more X say we're we'll debt. investment debt, swing starting balanced X continued point we had things I weigh So,

maybe helpful. backgroundchecks.com That's And on through offering. just space SMB Got a follow-up it. really the

you clients it more this want on of dipped Is space? mentioned that. Has was You that see us that it a quarter. macro in competition been offer hiring less? color more little driven? Is have to there just just you any the sense I if more bit could your kind

We macro it's Yes. more believe driven.

not We relative It's We year haven't pretty losses. order sector. small, last space. but competitors. volumes decent X% is track any substantial it's in actually losses that to still order businesses, to for seen from lower volume that Down medium to due

side So as into not to small segment look do sort in it exactly it's a XX,XXX what going of relatively with other and The for bulk like not order with see customers, and order it clients it looks pieces. you, We easy trends, honest XX,XXX always be what identify look it's then how at we it's softening. are it, can of Kyle, at right? us. on, volume But can other we is but that size, just to is easy we that's

The question is of coming from Manav Barclays. Patnaik next

the as Ronan launch how -- entity. for off Brazilian the is back a Manav. with on the Kennedy you Latin about This can us guys I just of to the help of America Brazil think Can if opportunity in whole and I guess,

think it the was in Argentina. acquisition Vitae I Inquiro

Latin competitive able terms the America. of in give you're of if kind or margin a in Just growth percentage environment to rate -- of the profile and revenue and Brazil

did We're in good through our and and we existing volumes.So, the good on It's the past a client. build again, establish sort the expanding clients, secures that mainly as served by Inquiro and meaning new geographies a backs we our the Vitae Markets a market then acquisition and for levels clients, why see global fragmented, a get a don't little America growth fairly in additional Yes. parts opportunities engine, into to we important go-to-market existing starting in global was different specifics. ground. local presence more sales lot goes see mean Latin those Latin competitors. out sure. because I playbook can because entity an of large in with they from us. that reason launch market are like be America the that on companies. Brazil we been our wins engine growth then Latin the an broadly But that than we we can is some We for we bit get of Asia of presence comment established some of of a America, into team were I see right?

So mettle, then us to ground presence first clients improve establish and it's so enterprise a and important to our speak. go to on with the our

So that's why we made announcement. made those moves and the

to out also, Got margin discussed initiative I know, with just update it. the And us but large then reconfirm obviously, from could helpful. the to and be impacts it can prepared your out, I yet restructuring just back-office on savings remarks, there? lift -- timing in of rolled then was the rolled give run to and And lift to rate can That's you and I regards an automation the then modules also margins?

right? related, as we're technology well. the from So, of our restructuring overall lift somewhat They're program getting projects our includes Yes. some automation

So that said some is savings rate our of total is million the on of from office $XX of the XXXX restructuring what the automation. by activity. back target does the run But end that publicly we've lift include

to automation? good So that is about the you the program. feel Continue taken of to the we've part the overall to.Do tracking we're want actions track and address

underweight of platform. that we is the mean, it a over we continue of stack, a mean a it track. on we're got we're technology I on in was brought project had part you us almost in implemented. help now I modules and see the we've functionality we of the normal can -- basis. results. longer biweekly that are of the completed, ourselves, big roll out it change the become in to and programs we see mean made still I it's and out you to sort side no took our I and lots third-party Yes. -- mean build That

point. at say business than program course more it's special would I become a part of normal this Yes. of

to way describe Good it.

The Wurtzel Research. Wolfe question from Scott coming of next is

Just I wins. questions enterprise last bit, couple to actually of density but you just wins wanted dipped a relative quarter, and kind rose to last to on looks ACV back go to it looks mean, quarter. little wins had the relative the a the it like looking like enterprise of

pace and one sales change So that just kind sort maybe of during sort And conversations of them? for little bit is of two, of wondering your if cycles? decision-making more asking in to leading are with maybe a clients

just the was certainly of highlighting wins more during his that clear, We're enterprise Well, a wins that We largest the totaling total $XX had Yes. what some of prepared be we're remarks, during X wins X the that just that just our quoted to quarter. the we wins than had million, subset Guy quarter. highlighting. in

drop So, we not off. material seen have any

In fact, the momentum it's the opposite. on business We're seeing side. new

yes, So X the maybe of But did just wins what of ACV a $XX subset we phrase million in quarter. it clearly. the is we exactly just didn't totaling

continue opportunities is as Oracle HireRight the the fit the their partnership just to companies highlight and there of do launching, happened level about client amount feel platform, were point disclose using. a choice we continues X in see wins we're highlight there picking they and larger X. partnership but of from If starting see if good. very, on don't I talked we that We deals, solution to detail, with you X UKG, is businesses. there find we than particular the Yes. we also, screening -- Scott, is of good Oracle's cycle know, to slowing. momentum that been it that yet, flow pipeline like Oracle business. don't Oracle even at I isn't provider UKG to be more deal like that that wanted quarter. to very the We -- the hundreds the because anything, the good The those Regardless to continues that new way platform up.Our sales of begun enterprise We're a mean but deals were as deals to grow produce were for client as Oracle to we recommending literally, see wins just enterprise but background

deal really about feel good flow. we So,

follow-up you That's of Got just geography. could some headwinds some wondering if saw customers. to financial And ex -- then mean, kind a it. as quarter? trends that of quick it. during helpful. Europe Got I But banking sector, to was maybe maybe speak sort sort demand the going related of the that some Europe understand the of in back I saw and just you services growth to

European consistent group. a the the in presence of our we've in the care some pretty think the rest of with with verticals health pharma I significant companies US, got

financial be U.S. in they care tech. service the consistent the the would what health pharma has Europe biggest in are tech I that pharma top and of same group in as Those And -- Europe. say in Obviously in that, our so with following the is the after saw and rest trends verticals are X probably are, Europe U.S. They industry business been we would in The next yes.

Moore is coming Jefferies. question Stephanie of from next The

could a base? of you I how you throughout were existing changes customers in XQ, your provide quarter was and if seeing that kind existing maybe the panned of bit color was out of just little what any trends there if wondering early for of sequential from kind

Yes.

existing the break our little down So the than would more summer I see base in probably in showed remarks, in quarter. that softness year-over-year being you trend prepared trend the the bit in as months. did quarter a XX% September we out the say can in

we're really Our currently indicative of guidance seeing. what is reaffirmation

You always volumes our QX have a seasonal October in we we the the types have anyway.So, then really December that and into customers and quarter holiday November months of base. to get levels to remember, because customer drop don't are we're in for customers particularly have our lot beginning we now obviously of in hiring impacted, slow from seasonally very expect September

up today see expect we're So, and and the to what until through October. what consistent saw we we uptick there.So, would we've don't is say up seeing that given I an reaffirmed guidance with until

as waiting material start his direction. the see to a they in remarks, cautiously kind As we people into be mentioned are and look see XXXX. people change I Guy turns before calendar do as of in optimistic the to expect

of the expect rest So, the I year. seasonal patterns normal for

can And color see any continue you from Great. the Kind customer would you're it in then really players nice That's these there very give helpful. larger Is of color smaller that competitors? helpful. space, to you'll new from? some Any business be of wins. on winning who

I mean, the Sure, other Marcon's based ours. from Mark wins of X Stephanie. that of of coming of think seeing X X I were we're the most major competitors the I on highlighted still one that Yes. question, players. the And X from of

service, have spend can't think enterprise one clients more tier can. I annually like just we just that again, UKG comments the have scale especially in made these than investments cannot getting we right?So have. Oracle and it's mean, space the could players of deal, a that and increasingly the a player never never on of we've deal, lot competitors revenue, don't the would difficult. like with service in deals I I happen who who we scope we before mean because make is technology Third smaller the the

come other take we major say I So, a the it's deals tell business most of competitor. you would still the players. been. I win will from always as would it's from Occasionally, tier we

Yes. And global being that's just thing our a customers think really global our of are by the is I just driven upsells being lately just well. our one lot capabilities, right? as those hammered from capabilities And

and on. with lot into forth into customers a America, APAC, Latin into existing new So, of our expansion expanding so into so regions and is Europe

even capabilities. and X, another just we the Of the global big best the big of example frankly, that's So -- X. have

world we global retain to under business. have HireRight ours of clients mean, example technology of in can our the the and us X largest one better their the that No an of visited than a because platform. I consistent. I visited companies were just are program just handle single comments use. RFP, who I been And I global

global is coming do So the tier grow when large is you've than I deal anybody. enterprises again, more compete world, lot continue different a which regions throughout from think smaller players. more to still is the got we But of screening that to why on difficult flow sort consolidated to against share advantage deals programs of wanting of the

coming George Goldman Tong of question next is The Sachs. from

Can little bit fell SMB quarter. strength you're slightly on and performance more weakness? a elaborate the seeing and of trends pockets year-over-year you mentioned SMB in You where

Yes.

Let to I I'll and me now jump in but on asked make question, that. the later clarification do you And since it a do was going George. it,

with the probably we it's algorithm. our because talk and about haven't our algorithm, team we at honest, then historically management about our contribution to was on XX,XXX through within less customer SMB, that, it when base nuance the channel I we get of an to XX% down interaction, those. directly look relevant and you've top a we and at customer got done, it enterprise business when much in just was accounts, saw to growth X%. growth the XX% So be their our that revenue growth account customers decline But team. have overall SMB look out accounts those relates line broader George, have And quarter-over-quarter more And managed less XX%. that think e-commerce year-over-year X,XXX dedicated type broken we that more that's as feedback you from algorithm, they're quarter-to-quarter, to And

to make to of want I the don't similar that, was down itself because the right? about SMB grasps business that XX%, the think everybody I people So, with sure understand kind XX% rest So business. of

that year-over-year.Does a growth make a contribution represents decline overall algorithm, the As it to sense?

the That's the any SMB? say enterprise? progressed from with separation of Yes. Was helpful. noticeable over course there trends And how would quarter you the

Guy in individually. very analyze very, mentioned. macro consistent. at it We We look more No, Very sector. can't as XX,XXX consistent customers chunk

Right.

automation with improve That's margins, then to you helpful. Okay. initiatives about And efficiencies. Got talked it. and

automation? are think targeted you or priorities terms you're realizing As roadmap top levels? what in, the ahead, efficiency would you which your further your about to inning say that X of And of X journey in

question. Good George. Sure,

buzz different to starting and using.So, some if the in candidate ensuring But we're more the buzz, success that so XX As team a candidate. different our bearing [ is work a is One baseball accurate about more assist thing fan, you of results, right? influence, under don't be researchers the for that it It's talk X of One see a match specific which does I labor element there And specifically fact, you've a I'd AI. is I criminal with driving the specific different me and inning. by data and phrase for natural the specific around want But the tell really language of you're on always languages second A to game. all the to that ensuring just more in is productive there's -- eliminate And labor then, is world, also lot third ] from data places. is matching a you of AI be XXX our long us savings fruit. -- take from processing, it a occurs multiplied lot things goal. allows algorithms jurisdictions is the classifications ]. the that and work, in to that the with of criminal primarily, to say data [ would attributed in lay that can some that allows a heard DUI that labor especially is our

I is improved accuracy improve mainly in forever. to goal be that is also there continue you, The to performance something tell cost. it Our and happens for work will that would time. improve clients, always do We'll else reduce that benefit to turnaround area. of

for turn closing to back Mr. floor Thank you. over this At the like Abramo I'd time, to comments.

progress And Thank as year to specifically want you, on posted against we I you the keeping execute to finishing the just out look uncertain times. right. operator. morning.We everyone, continue thank, All for and call these this to forward joining our

enjoy out rest do hesitate please day, any not the everybody. of your with reach and questions. Thanks to again, So

Thank you.

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