SYKE - Earnings call transcript Q2 2018

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Operator

Good morning, and welcome to the Sykes Enterprises' Incorporated Second Quarter 2018 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded. Management has asked me to relate to you that certain statements made during the course of this call, as they relate to the Company’s future business and financial performance, are forward-looking. that as on information assumptions to information management beliefs currently contain management. well as made statements are the based of available Such by and expressions anticipate, as intended are forward-looking expect goal, such identify relate we Phrases, and the our to similar as statements. Company they to we results such is forward-looking It actual to from materially that note differ important statements. those Company’s the could projected in and those cause in to in results SEC materially Company’s release the yesterday's statements could to the actual that and from Factors time. XX-K identified forward-looking were press with other the Form differ filings time from I would to call the Mr. over to now like turn Chuck Sykes, President CEO. and Please go ahead, sir.

Chuck Sykes

good us everyone, Sykes quarter discuss you, thank you results. second morning, today Danielle, to for joining Enterprises' Thank financial and XXXX

are our Subhaash John Officer; and of Head today Chief call Financial our the Kumar, Chapman, Relations. on Investor me Joining

Before a friend all be relations truly He as was will world board representing the member of affairs XXXX. away to invaluable. and dedication and of distinction. tribute board of had missed sudden for on He our and Michael delving simply members I He and the on a DeLong, XXth. who and same interests July a and for colleague, companies stunned to a moment was the great of into want to experience. a passed country was shareholders; his behalf tremendous worldwide. his Board on such the pay our Board with to General and he take colleagues We by all all of dearly. Sykes’ quarter international Lieutenant accomplishments since knowledge of served brought our colleague. man a on counsel were of General and saddened decorated been this soldier dedication such was our valuable ours DeLong He passing who Directors, mentor that current the

family. Our to DeLong the condolences deepest

in you thoughts and our prayers. are We keeping

John results. I capacity to numbers comments then will we our through in quarter the progress our of the Q&A. of making rationalization to turning take over are with we about plan. the I’m then pleased execution Overall general the make second call Now, will some you capacity, pace turn excess will and rationalizing

ways fact, ahead we several to X% range the getting quarters of tracking been we One States. is the very the is the In and discussed in excess our capacity in yet interrelated, a many issues suffered. and has are over as challenge other labor These retention operating United have against backdrop plan, twofold. our recruitment also margins two last in challenges consolidated in are XX% tight

year aiding towards our has execution I’m disruption. level all in very high optimal well synchronized way pleased least a had managing the levels. result prior come collateral impacts results improvement getting should amount margin we in year with with parts we the end. through managing buy-in capacity the and quarter to results the should to on client even XXXX from into seats cannot fourth-quarter blueprint targeted targeted we to which in go the of stress a roughly focus front So points I dependencies to heavy as this enough the the eliminated to into in behind of lifting us ways in approximately deliver our seats our rationalization were some quarter third compared on residuals roughly of are with towards the for X,XXX with the in the deliver XXX X,XXX are basis bulk the for operating hundred be the coming getting strategic our of the sharper various as operating when and of everything remaining this second with up transition employees moving process,

our executing Just our to in as we improve also the United plan we are recruitment deliver States. on the retention capacity outcomes and rationalization,

and basis detail terms strategy As I'm absenteeism in of fill of are us wage even programs that levels better in discussed is the this operating we overhauling rates our also leading from XXX capital than improvement aspect encouraging. and rates lower more pleased attrition have report costing the around some to and Part of human geographies before almost prevailing of and drag in every in to are U.S. availability, workforce are indicators terms operating coming costs. management cases tweaking points operational in we margins. client the is rates, aligned Therefore, shifting

agent dramatically are in wage enhances through the launching strategies onboarding discussed. motion. levels improve speed at recruitment point, given level plan optimistic the the we this in the and set the the the to new addressing aligned also to support cautiously local challenges marketplace. using are leadership with well still price in getting in and and do early we are some way we finally empower competency action and to At as as clients innings We remain technology retention We that pilots agent

all mix the and we our weakness fact, vertical in turn In we Outside vertical are to across of outlook. long-term path call to exit or we the the seeing as for to our the the the with double-digits XX% X% over demand we some are revising XXXX. I would opportunities and rates demand John, in a most. since about sales we vertical mix to believe And cycles, extension back talk backdrop like margins business see growth the before implementation communications I in

where winning echo payers healthcare healthcare are retail gaming, various the medical as with are support logging within travel players including device across pharmaceutical companies. corporate manufacturers, system, wins We tech and banking, opportunities healthcare support, well as we

in the healthcare we the was property quarterly XX% and up in the last the dramatically casualty won X% opportunities basis have as potential to sizable. be quarter, our have on the In comparable vertical a vertical in mentioned fact call, quarter; in we insurance accelerating also from first which

four Clearlink And finally, of vertical the leveraging results. in solid the quarters is platforms communications presence players, reopen last are are we and our which new is expand which meaningful has addition, yielding starting off drop possibilities. terms to to economy demand in even seen a XSELL In over among

In market of told, multi opportunity John. the call business lines market fact, the carriers long-term. the significant new industry. actions All would dynamics of current we are taking largest while to recently like over won are hampering with coupled that one growth to John shore our facing delivery offer we the outlook across a the in multiple capabilities I with differentiated for hand scope Chapman, over near-term With

John Chapman

particularly sheet I highlights On flow cash third on and quarter to will P&L the balance after comments focus Thank will outlook today's full-year I you, the and turn morning, and which Chuck my call everyone. quarter good results, second for XXXX. key

$XXX.X between and revenues reported reported of the Let’s was in revenue in midpoint start vertical. million what quarter quarter exchange between with and million the of weakness and was communications $XXX million X.X remaining guidance, guidance the million, quarter second $X our the million our $X.X we the the versus second the delta million; $XXX we fluctuations of of foreign

on up currency constant vertical comparable X.X% and Looking at up currency year-over-year X.X% By on around constant we reported a basis services on revenues a on basis. a was were financial up basis a XX%. market basis

impact technology X% roughly healthcare was XX%. was up The of transportation X%, communications XX% XX% and other and down which which vertical up the up includes offsetting up more leisure retail verticals the than

the a Second from On results of by X.X due in recruitment costs and the year. include period add and as the retention last capacity, comparable X.X integration to quarter from versus back non-GAAP the inefficiencies million margins around second includes margin as which XXXX deal as and and well quarters to The operating X% of was severance capacity the respectively. X.X% both primarily million decreased amortization last quarter the XXXX initiatives. improvement impairment in period inefficiencies was in charges operating The charges of same well rationalization as and year. Comparable year-over-year costs basis the U.S. cost decrease intangibles short-term cutting X.X% and underutilized created X.X% in margins,

second rate corporate from related tax in share period versus with per On by $X.XX expense quarter year. were higher a well items in settlement year versus the non-GAAP diluted versus lower $X.XX year. tax the were XXXX our the dollar XXXX basis were federal last last the same tax per effective interest quarter tax Earnings to quarter share and skewed to same of of diluted negative audits XXXX benefit earnings Second tax same discrete $X.XX rate. of because period share in last per earnings the the period rate a the $X.XX of income the as delta due and second reduction

is offset from $X.XX other midpoint by XXXX effective to to $X.XX quarter of per higher diluted a driven of relative higher share lower rate. $X.XX remaining range business operations $X.XX the were $X.XX expense from which $X.XX outlook tax with Second of the Company’s May XXXX interest by earnings

a by versus demand, of them XXXX inefficiencies of one the is period of demand operational business revenues to moment, continue Turning including have year in largest represents XX.X% our from national. to the second our we combination in mix into client rest only contracts XX% Cleveland, AT&T of quarter a generation client ago latest which client, roughly for and XX.X% driven lower shift

second to service versus quarter, clients Our in represented total revenues in higher largest a from of due from year ago the client X.X% almost approximately second XXXX a the second consolidated period largest basis, On client. XX vertical quarter from the XX% decline our to during XX% represented due solely financial of period which revenues top is in of our significant the X.X% demand. ago year

international June million strong June to were XXX items, million quarter which million of At X% equivalents to ago million was XX had and third available which XX on capital the majority of in of $XXX.X to XX.X% turn EMEA; million adapted be revenues if will sheet consolidated facility. sheet the down XX to X.X% for was split like period. the under of select than not days balance XXX.X basis Americas for DSOs credit and would outstanding XX I to more in with additional comparably, the cash a from XXXX, taxes unchanged cash revenues subject our borrowings expenditures or approximately of and repatriated XXth during held to balance flow with in United we Now second XXX were the some cash States. remain Trade year a operations, by days days our the DSO of for quarter

to U.S. some full-year continue quarter XX% rates approximately of exposure are respectively. exchange dollar, PHP the to foreign at XX.XX average weighted we XX% of the hedged and and of XXXX hedge for third and XX.XX We our PHP

XX% for CRC and XXX.XX weighted XXX.XX at addition, our approximately In Rica the Costa full-year U.S. and roughly average to colón third are respectively. CRC of quarter XX% and exposure hedged rates dollar,

the ended XX,XXX we was counts let's review seat a in offset metrics. seats Company XXX roughly The year-over-year On and basis; down a basis, quarter comparably. seat some however with rationalized positions on utilization worldwide. second approximately Now by that America capacity consolidated X,XXX partly North seats,

can basis count XX% rate period was X,XXX seat XX% the second factors. implementing in for utilization demand created the opportunities also progress initiatives quarter geographies in at part with the the be the for The on further in for quarter by the second decrease XX% ago in underutilized by due year stated in versus a quarter. address and additions region utilization the through driven and Americas operational decline the capacity prior by in XXXX XX% rationalized the to broken and of to utilization The XX% Capacity The EMEA combined the region. to versus of inefficiencies, year inefficiencies EMEA region were XX% certain a capacity. for Americas the XX,XXX down and capacity was end short-term rates and ago Americas previously the EMEA the in Americas

like Now turn to business the outlook. I would to

XX approximately program viability to wind markets this because vertical in to downwardly the full-year We the is specific XX million truly with outlook our long-term XX the or half by communications of with our the million of combination our XX weaknesses revenue related to decision in Company provided out by in May operator. XXXX. relative million related are to approximately million Roughly revision revising XXXX one

slight relative is fourth related are of XX year-over-year volatility sales which exchange a of to revision with as the to Another million in the in new roughly contribution improvement program. well million extension WhistleOut, expected margins start rationalization net of of ramp to clients the as benefit product with flowing the remaining foreign cycle should to revenue XX from fourth initiatives significant quarter through quarter XXXX. yield in XXXX, the the operating The related

of bringing expects the in to upper hundred progress XX% additional XXXX of first target services quarter a on the the close we and Australia XXXX Company on extends of the seats in the Additionally, and based reported discussed rationalized focused WhistleOut. broadband seats, the principally home rationalize geographically comparison Australia rapid the total is May. of its portfolio. mobile, digital gross and thus across In Clearlink's a acquisition platform broadens pace its WhistleOut acquisition of consumer end posted headquartered U.S., marketing pay few TV services product far, capabilities of number

segment acquisition accretive expected of basis. on basis of contribution half per US$X on business a although the million XXXX to second roughly includes the and few years mildly The be a WhistleOut revenue non-GAAP a diluted diluted with GAAP from share impact

Through XX.X of to relative is X.X currencies to of the as exchange on a the on outlook or the foreign basis further non per XXXX and million pre-tax or markets in an total outlook expense, to mostly year anticipate rationalization. after-tax other in pre-tax revenues which business expected continued cash. we capacity both Therefore, charge first quarter of $X.XX third the anticipates full-year. related Our income million GAAP and charge dollar impacts functional July of X.X be share also approximately reflects for and approximately and and We GAAP on The cash. of third quarter negative assumptions rates outlook a net approximately on earnings and the or exchange evenly first share basis, an XXXX. the foreign between positive for charge rates earnings non-cash on Revenues based volatility quarter in for after-tax interest million the quarter full-year $X.XX roughly are million U.S. pre-tax the per X in serve for the split full-year.

income however any to effective interest potential the We XX.X million range XX%, $XX compared of four have on losses. XXXX $X.XX expect of full-year reduction the in foreign benefits rate effective further we rate to September earnings exchange of what gains the ending in impact other basis diluted range of the rate the to per expenditures results expense was And the provided exclude following Revenues XX. discrete XXXX. tax quarter Largely three mentioned Considering in and the due financial in to tax factors, for count anticipate and in XX% approximately above Non May. second we months $XX $X.XX. share share GAAP approximately of to $XXX million, of share $X.XX fully of $XXX non-GAAP Effective $X.XX range the million diluted of diluted million. tax approximately per million. and approximately a capital earnings in future

XXXX, would that, questions. results. expenditures For to range like approximately XX% million. we $X.XX earnings XX.X to in tax capital and of of effective to diluted fully per for $X.XX, in tax of December the share share count ended on the the earnings a to X.XX the to I $XX open in of and share financial XX%, $X.XX; months XX With operator and non-GAAP million over rate approximately $XX of billion basis diluted to anticipate non-GAAP the million the Revenues per range XX effective $X.XX million rate of range following hand diluted approximately X.XX

Operator

now Instructions] begin We The first Wells comes go session. Warmington question-and-answer question Please the from [Operator of Bill ahead. Fargo. will

William Warmington

the I to the and wanted to which the How big did a about So discontinued competitor? it ask that it did client, go go vertical program. was work where was

Chuck Sykes

Yes.

financial some labor to with get got decisions we some of of relationships operations is and we markets talking services of size when done. to in that the some in built it belongs the client past been the but of we the that U.S. firm our make particular one the have larger things So area have, challenges about Bill, in we the our have

labor the so performed just with that decision wasn’t instance, we the like operations and level is just types we just the in are. run needed understand, Company So is like would of prefer the to keep in pricing they made this in can't candidly rate long-term. these particular support unemployment the pricing just we this I it acceptable this the X.X%. market mind difficult and that which really-really we need mean It client We market particular that we for

hasn’t within our realistic this decision, This are going the we little they and having distributed risk did us with about they is labor a move the own life client relationship, internal they what that better. they ended a more took the our south. isn’t of U.S. afford was they our of to the The market. situation some conversation little it the the pricing performance that about market program, relationship order so operations for they staying a that doing So harmed competitors the up respond in bad was into where is some to just some a or the then what's some work on labor going reporting the was could to bit, in felt their U.S.

that we certainly the level this wanting led operations, are what to we to You market the pricing tried as just have we didn’t rationalizing will and strive as alternative had we given think, markets some that outcome. current look but that things are labor at alternatives, to find is a for the to pick them we absorb, that good option, our locations we our

William Warmington

Okay.

the why extension, that verticals sales is it what is happening cycle on happening? Now in,

Chuck Sykes

a as sales cycle earlier a besides too that experience. into of the probably the are in of universes make clients outsourcers seeing their engaging people first to in win longer have market part a outsourcers Well, were is that at anybody the desk I making little it's cycle think sales lot the earlier to know but a really in reasons. that in the trying little But number are wanting are for right time digitally them world cycle is impact as you higher a of over we rate we little theme the higher and putting important Company to the That the there words I a in bit if it's it, complicated more the later today market a with don’t in we some an what element in going opportunities and companies effort now probability some the are of my many - help One is you first is really that, more are and engaging up it with complicated much cyclic in is work where is many time the want to talk a customer of itself overarching like now, of transformed made you employees. RFP timing. I I we to goes to are marketplace have that delay with in big a that comments contributing is right. your are That the just other and where there that, of of to if their statistically typically living just that so things make with a it's on the of

mean we So long-term it is those impacting good, is are or with the rationalization negative engaging yes I us this but be short-term, things like to that this the it is I mean market. way and ought where affecting, really sounds

William Warmington

have the maybe center differentiated, call you And got offering. do States. are for you the have there, Clearlink, question you What have home sounds there can right the the like an me got at portfolio then for got telecom meaning infrastructure, space. is on you last hope It you how in you legacy telecom have

Chuck Sykes

that to the go right the space last that the Well the absolutely not over balance bit vertical. tell think we guys we be there taken One do we that around I the want got we really be index vertical. portfolio. let in perhaps a your want the as that you growth could of of I deemphasize me how communications Yes. and it's is vertical. over I all will learned what are want we adding our that do for to comment, hope word you first commentary lesson messaging probably say years to that Company communications all as in is smarter, to a

the a transformed they rates So make go that certainly the think we in I certainly company And are significant is that is in every and some as for witnessing contact it’s very forever. the visible don't are going causing that is out in over exist throughout today I to to just reducing our sounds happening old are going about we are zero, change today vertical, negative, collectively today our that years so of the but vertical are once answer along in a a are that They we believe XX models digitally the of setting the - how way investments volume the think having right think seeing taken communications. that their normal. they to making chain to big is, be to contact And a feeling [indiscernible] is what rates not serve. operating communications lines way, and with That companies We model. to level business news candidly, in going network. that are new now the supply even

supports domestic the we solution, vertical be ways. new to is needs do do and if that about One right one your are we However going our we pricing second believe disciplined we that wage be the to levels, answers solution, that about the have the the a communications that we to is go in a levels is several has very and thing trouble. it really to question been do is

clients up that wage they are They afford. material the it wages, it we the for beyond going at U.S. You XX% up of it are years is at for and our built know sights a we sector are goes XX% not to of ability lot ago, to and three our going three was price these some a in X.X%.

home on more need to going bigger operate increased we our clients agent are to see I probably The So gross afford or think can focus is importantly, where that communications, let and model a off competitive supply still certainly still us shoring strong is get pricing. to labor them then can market shoring. we off you either still they if the

to know solutions for all to component important little and just of beauty put and vertical. our are want guys our last the Clearlink. place you to all going we the us this I grow they can vertical and we a cost. disciplined Clearlink experience helping in their a while will that grow also to chain that So wanting about be we now make in is is that vertical help that business brings think value of and marketing with them and way delivering commerce big strategic today, talking need reducing part the that how engage firm sales better we And we The assistance the any comment candor, to more the so with and is and that is future. strategic can rational which

got to are I our we that So a dialogue with wins we some part in of are new value those now communications are it. have the big proposition things that so beginning that and and think seeing actually was change them

William Warmington

Well very you thank much.

Chuck Sykes

Will. you Okay. Thank

Operator

comes The Barrington Colicchio Vince go Research. from question ahead. Please of

Vince Colicchio

at? the about you capacity what expect utilization Chuck So exit year curious to do

Chuck Sykes

have here… you are at got the numbers of we John some looking Yes,

John Chapman

facilities. stand our to we low we we we to taking QX enough Yes. about QX, to that the XXs if which assumes are have a U.S. we going count exit to got clearly the in the you think But factor will or is I the but XX let's go guidance as at year-end. XXs, XX% today the exit target, so like of still we about as talking capacity by seat low it's be that out the still that targeting, Vince, are the U.S. not in in are is we look XX% get this really year-end but

Vince Colicchio

think targeting that XX% you Okay. other that? you clients, And right be then other target more touching reach target you an are in some are do going need you to growth traction ongoing growth Do let get that areas. of said like Chuck to and sales getting say, you on areas you do those down of to

Chuck Sykes

Yes. the our John on Vin I with focus to down. I big we strategic would part but you seeing of traction that is are share mean that, John. tell and

John Chapman

Yes numbers that and I mean impact the I the highly that of the actually really you [indiscernible] Telco for that Telco so fact the telecom that time. out year think okay then look a the if know and we if great, you looks provider abort this at not like at can't on of even can last the we but assets really you X.X adjust underestimate business

to benefit wins new we to number. really some by are clearly market And win actually X%. year-over-year ahead start in to in that getting basis do the great way clearly it so and the share X% where think even and we to those Telco the verticals do dragging Then start get that, of and but push edge winning impact start a and should see hope of these if of we through noise on you of the to the that we see QX take telecom excluding MTD decent down, time we we we year-over-year out to from numbers XX% will on we have believe top terms and got the so a we have of growth, at that message be to the impacting is time out other there

Vince Colicchio

the impacts and then positioning are that in and on you Convergys could Chuck deal deal? how interested deal would about you also your a And comment you transformational do

Chuck Sykes

a gives program don't we think at being when look the Yes us something that that we transaction we see positioning for Vince, market us standpoint. concern as from

exciting, can a looking strategic at mean very but mean when I to was program. us more and on sit value think know down deals Certainly But It did been with programs. which a that are to silly logic us of you versus well-known been have we would very matter very on in risk. question. answer the the the that you the a to to financial financial it good it’s the but Company, not transaction, have be for we we play. value do know It would these know, was will go but just a to the have you table, primarily us me. a everybody transformational what engage not think don't Yes, end on big it Company I synergy understand much impact would you know is lost unique wanting on don't can are you concentric such is rationale was are that at a I look tell purely look they your more financial I opportunity. it because sitting down again synergy Convergys it the about had at also play.

had the be of we because just that and be worth value were to term that it thought financial So very was taking risk deliver going we and disciplined to a would that to we our necessarily we and a were wasn't that play things. ranges because within shareholders. felt where made valuation impact strategic It of and something a were value from long-term we big our that

different that. we everything, industry we go, enough the what different to still on to dependent think for need are is I we in a believe compete, and company they believe certainly you every moves have in this in couple good are big delivery and and don’t the what is anyway, size to presence within in we some of markets improvements last make trying are add this other probably others large So platforms but countries comments platform I think I so know would John any been the the opportunity have here in making they to years. concentric to continue to case

John Chapman

in to of for transformational fact done become are effect two kind we very significant so have one, going have to here is that they business. mean competitors us I that strong what No. is on Will an got culture any up opportunity. to their synergy, got deal mix, pressure get financial find the

of we the in have with. that in the don't it's got they that change got of that for as good think that complete we compete comparison element be a and they instead So opportunity can't acquisition. two, one We will next capability two an have one and some worry years three we

Vince Colicchio

companies companies, are something We would with you team context up consider. a BPO center that broader is seeing

Chuck Sykes

we venturing house, That’s doing we customer customer support Well move probably Vince, we connect involved easily the little of we caveat. fairly the that in back-office versus for to but be certainly play wanted I a just we do everything experience are operations. or identifiable side Clearlink, are are outside obviously being kind of the to being the BPO pure with one of us with the think

to referred it to So performance are to if enhance but will, the diversify yes, customer to do of kind very we and want we what stock we our closely still you experience. as wanting be connected

John Chapman

probably Vince, say would back-office between not is we and the point. focus pointing mean, at guess large back-office is I to you really are a transaction I point Yes this What Telenext. TP for

the in its go As in technology improve around and Chuck said, core our we add We these employee are AI us that the to interested the XSELL realized callbots gives Clearlink can we important and field where on to and deals and RPA, our tools solution through using effectiveness. in the invested both efficiency an was in strength our market part chatbots, business. capability complement AI, see that add

we the we service as the replacement our tools sales support of both to clients the the in technology - will augment So not see these agents, of see continue house. work but and side support we

Vince Colicchio

guys. Thanks sense. Makes

Chuck Sykes

Thanks Vince.

Operator

The Baird. next question Please ahead. from of go comes Dave Koning

David Koning

rationalization by of XXXX help basis the a points? margin that to some the XXX all is ballpark XXX points the in what for them are expecting I of margins from you guess of for or go up more, margins first the you is said kind should comment basis

John Chapman

improve But the said are we first the absolutely initiatives you to still I and We remarks David of model all. spoke guiding go U.S. terms not if mean QX prepared right. all the have are we to what extrapolate work further. Chuck think then rationalization in in the have I capacity as Yes. of to you try impact his about

the done that of programs overall we continue So work different right, rationalization through, we in through and is you look overall win the have and what we absolutely that to get you should at would feeding but here do. start as are terms then at new price deals gross we see in I if margin heavy you that, new prices, at capacity lifting you will that we QX extrapolate points, hope

David Koning

and about it's now your And X% of the telecom acquired anniversary, then think its think overly real think don't but growth or that decline I Yes, is that its entering about okay. you of growing of that driver, should so strategic about so organic and I asset now? we how client that that a it’s year-ago, part growth total is like revenue that big buyer was the part a

John Chapman

the none of revenues Telco. And in the Yes. were asset

David Koning

Okay. a Is right asset that growing now? actually

John Chapman

portfolio like strategy buying so I on deal the across shore it’s and buying of we are with leverage offshore, the U.S., and of part client successful. comfortable so the and we that Yes. it been we the and mean assets, very

David Koning

Oh great.

then to year guess this benefits tax it’s can't kind remember not question a XXs pushed overtime? rate I last long-term, that normalized for the more rate year, low just is Should with And some I it’s Okay, is of XX%. good. being this there discrete that than normalized we my still lowered expect if

John Chapman

Yes.

at would XX%. be going XXXX, and out the look eventually a to not close you year, you go guide to XXXX be normal this we discreet the of If is pretty forward a are it’s low get is but on XX%. they I’m have rate to take saying when basis the expect that impact XX% for we said XX% that we rate in total

a the falls in So you are that with especially lot out we mix exactly factors of on depends and XX% XXXX. somewhere where elements eventually XX% guide of mid it between

David Koning

thank Got, you. you. well Great,

Chuck Sykes

Thanks.

Operator

please Frank ahead. from comes question Atkins next of The SunTrust; go

Frank Atkins

to about long-term. my Thanks the how Can the first I talk and into on fits you questions. a there, for bit plan margins doing WhistleOut. that little over strategic work taking want rate the growth are they ask of type

John Chapman

Okay.

then that that to different services try at we brands do digital that a across the piece the is products are and customers. with new sites only We market we and all use you the and products, provide still paid. the and a XX, marketing, products services XX, product insurance the Performance content is me roughly broadband we marketing a we is and three we in consumer an looking into Let and find we U.S, out what find Australia both of client many last and help alive components that the home lead branded agency providing Performance this piece paid many the consumers and customers Frank. And Clearlink, client who three kind clear payTV XX. to case consumer those from through have only we to The business. consumer personalized revenues is relevant is take find verticals design the find they split and products mobile, actually Clearlink in websites Consumer monetizes health is get marketing biggest sale for of converting Clearlink are rights paid kind those PM. sometimes have for agency piece help we either these where managed the by products and just ramp get digital In buy. digital or services market to so the properties given The marketing brand multiple the and are markets work. agency smallest we consumers run different it. record. within and if digital strategies are

is value business great its clients. nice and to it capability a got great really our margin and So

slightly terms of multiple of operating the its growth margin, significant double-digit the ahead imagine portfolio you Clearlink in look at are paying and based as you and like generate. Clearlink we if the even and the that personal its Clearlink double-digit can In operating is terms of in of growing the part margins are

So an Clearlink have business. transaction like think part within that understanding is reason we and of further really that gives growth you kind personal is of enhance the of consumer to a the way we components what hopefully done and exciting

Frank Atkins

you. Okay, about we down was very about those XX%. you will up think half think I ask program What that great. believe back was do the as have thank helpful, driving That some the in the Wanted impact of and financial services what drivers. wind vertical, to

John Chapman

last the time being a million with for But I Yes, real quarter-over-quarter growth go over clearly lot still affect what I in terms the had $XX exit. four or We financial and quarter, that quarters a are on basis increased the headwind call but we mean marking to not services, us next revenues Frank you reduction to a forward will two overall brand, saw absolutely done basis, until five a nice right. we for major comfortable services growth the strength million, is we have a we the financial added disappointing are go on forward hard this very will rate. year it be have XX

start the vertical. did client site in to next on for and was [indiscernible] benefit it a damaged ensure it out, a actually pointed get Chuck way As services headwind give year us financial a not to of that on both the for did going relationship to year the terms we of in

Frank Atkins

outside program wind it tell solid you you growth there one can opportunities if if I East, growth last looks can and segment. us for the Americas pretty the U.S., or Europe, talk was the and and Middle the look revenue me, Africa in Okay is EMEA at about down like

John Chapman

all wind answer will in I right all second down Americas. that Chuck. U.S. part program Frank, the

Chuck Sykes

a delivery because again model Yes. first of are Europe, company we And some the tight in today. the we Europe market more now excited is home Europe about that deploying Europe that market speak to really terms within things that and much agent of platform, now throughout labor receptive you can't really now are has we all a a of are and to but seeing

I think about talking that been labor challenges. is not

So to we like differentiation. our that that, think this we gives

already within that European about the customers thing some we really landed excited is new leverage we our capabilities. that that have The other marketplaces Clearlink

them go about grow is and engage we our that again, to for again with part in for a to presence think is side call what So helping explain I have, clients us. of business short able The expanding strategy in forward difficult our but really across we marketing, service again clients big us and chain. serving sales our is our earnings their commerce being different call the value that

to quickly again outsourcer, still improve our really cost an are on way excited commerce ability team has the And in and we these investments our but embrace a still rather to the do delivered very been people them we continue value the investments new been that. efficiency really more. the they - and experience reason have I us. of marketplace, mean work the that up, new are just its are important which want just we do a trying but verticals Europe able always of too there still a present standpoint get from across the making strategic show going that the that have in connect we to and customer plan there. to historically to about we will But do the excited equation we for it's are lot they but way As about outsource, is side we dots chain and big our way capabilities, a

we some to particularly the We Europe, across when kind in you opportunities this of nice new deliver get players that the are we want economy refer and the to board as the Fintech are all message in what vertical financial and in. in services we seeing

Frank Atkins

Okay. you Great. Thank very much.

Chuck Sykes

Yes. Thanks Frank.

John Chapman

Thanks Frank.

Operator

I session. back closing and would Mr. any remarks. like to for turn question our conference answer over Sykes to the concludes This

Chuck Sykes

has time to as you, with for Thank thank quarter. to just next and Thank have good Daniel. good want you up today and day. everybody we everybody their just you. always catching wish forward the And a week look Everybody

Operator

attending is The concluded. today's now for you Thank presentation. conference

disconnect. You may now

Chuck Sykes	President and Chief Executive Officer
John Chapman	Executive Vice President & CFO
Subhaash Kumar	Head of Investor Relations
William Warmington	Wells Fargo
Vince Colicchio	Barrington Research
David Koning	Robert W. Baird
Frank Atkins	SunTrust Robinson Humphrey

Sykes Enterprises (SYKE) 11 Aug 182018 Q2 Earnings call transcript