SYKE - Earnings call transcript Q1 2020

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Operator

Welcome to Sykes Enterprises Inc.'s First Quarter 2020 Earnings Call.

On the earnings call today from management are CEO, Chuck Sykes; CFO, John Chapman; and IR Head, Subhaash Kumar.

Management has asked me to relay 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. Statements contain information that are based on the beliefs of management as well as assumptions made by and information currently available to management.

Phrases such as our goal, we anticipate, we expect and similar expressions as they relate to the company are intended to identify forward-looking statements. note those company's statements. projected to differ results important from materially in is that actual the could It such forward-looking

that SEC were is results in actual Form the XX-K release could call materially filings company's [Operator Factors those with Instructions] other from note the and to the the time-to-time. in being identified differ statements recorded. and yesterday's from press forward-looking cause Please

sir. Sykes. to like the over Please turn go Chuck ahead I would now to conference CEO,

Chuck Sykes

Good and results. first provide everyone, then for you call walk for pandemic, call, is us operator. boosting and you numbers, you, Enterprises' we'll the Thank turn through doing the will Sykes today morning, is COVID-XX business and our quarter joining John thank insight how I Q&A. over to and On our market will discuss operationally the in positioning financial XXXX today's amid

personnel thoughts are employees. thankful COVID-XX are particular, tenacity also and all lost of In I unprecedented we pandemic that say saying those stepped sympathies to face as I with our who want this has have we been grateful IT and we event. up demonstrate to how who our heroically. has Everyone to great agility teams our with those this spread of by front-line begin great to loved have operations our to deepest intensity. to are especially affected want extend by ones able in the and

to the of deliverables enabled distinguish the has hyper-vigilant our delivering of terms disruption to heightened own customers. operational safety in maintaining all clients employee us groups. safeguards livelihoods them been to functional have contribute their do job of has new in folks the across ourselves This our had both of all of Each as to workstream clients amazing have an while continue adaptability these support eyes and to and minimizing enhanced of their state course they this, with leaders our exceptional Amid we readiness. of Of engagement. interconnected in of to and

distinguishing in winning that highly a we a combined are context XXXX, operational of power are you we cloud strategic how which in why have at current of broader of understand capacity the know-how and clients. been transformative share we back recall platform, historical who of us will clients. our to leveraged August deliver made better home business agents work-from-home with over discuss a Those to with frame the Let's remarks Alpine mind I help computing Access. ourselves. was and in prospective best-of-breed my to acquisition more years company you agent following agent-borne model, Founded XXXX Alpine to the home want burst

isn't training, performance in at beginning a Rather to risk just that like requires management, functions value home important brick-and-mortar recruiting, the encompassing our as and management. entire It of many work a appreciate. what reengineering management, work operational home chain note do interaction, you is environment to replicating workforce clients management, are at

business very model experience digital-first is to which experience, a high from transitioning to a a akin is It physical-first bar. a

facilities. all to such, order at deliver re-evaluated, in performance need and reconfigured As refined with parity client be processes programs business re-imagined, to brick-and-mortar excellence around

stretch world. practices taken all able around our the respond best verticals our to to we and industry Ever model model clients various and this a since as the of the scale acquisition inner rapidly agent long facilities complement pandemic geographies, we knowledge around we to home were we such as of workings at home have have agent the to have the running had time gained and Because extend a created tremendous the practices model. across brick-and-mortar

as capability to our of roughly peers the earnings brick-and-mortar scale from agent we XX our impact quarter China taste us appreciate call, and shift. to distinguishes highlight from of scope in days. gave able platform. to base we span as relatively magnitude our which On home you at-home our was of speed believe of agent of agility relates a to than agent will a And it fourth our considering Starting our of March John the were migrate half and the shortly, more XX, the minimal the power we

with number of on To agents put before XX, XX% capacity remaining Savador. agents March now further a were facilities. of the from brick-and-mortar basis were were days with context, Philippines forward The in XX% idle in of almost the facility. working remaining brick-and-mortar the represent first El XX% agents in in the most quarter the a XXX% them these XX% numbers brick-and-mortar roughly consolidated and those in Fast home XX of the that utilization

brick-and-mortar of facilities. segments, By data is EMEA impressive. has XX% brick-and-mortar its home reporting in to remaining with close agents the even agents more XX% transitioned of the from to work

have the than to home XX% agents of and XX% brick-and-mortar idle. in transitioned in are more Americas XX% region the While are around

of lockdowns factors. EMEA certain initially differential and couple in offshore particularly geographies the instituted to is due in between The due abrupt the to jurisdictions. was Part delta a Americas of and ironclad

time As certain Americas difference business various of between reasons. has and on is agent willingness EMEA lines client to the gone the for home

an the in workspace reduced technical said, to is and Salvador. has El dedicated infrastructure a point constraints pervasive the at are reaching Coming while region Americas This we believe the in but such limited delivery on now delivering as that clients and reliable Philippines not particularly case That they home. with solution the density broadband and second are for sufficiently, seeking. mix facility optimal we are

of clients complex embracing that have brick-and-mortar-centric all across These a news agents. businesses. big are steps taken The As this lines is virtually in in look does change that here? verticals scenario play how pandemic in medium-term. play things continues we very the a like short data number from to the to what been home have range clients unfold and So good of

the working in is becoming thing or that brick-and-mortar business to quality business are very Although, above segmenting goes our home they and now operations. working with clear agents levels of emphasis is lockdowns and which that are clients to This performing brick-and-mortar at-home one fits unwinding are shift is Nevertheless, clients see home how occurs as permanent. greater in a a which the stays starts. of at on from much of will take to we

other side the dealing On unknowns a are with perspective. else like everyone we demand from

for Just the gets seen. million days how trajectory last in United pent-up in to consumers this XX XX filed the reconciled be and against have States of the the remains unemployment demand almost

their service centers, to pandemic both scrutiny. of in-house demand as more and terms are business to trying in clients financial whether a clients and this growth is increasing allocate current more importantly, vendors area among we outsourcers Another gauge relatedly manage profile coming then for serves how to future whose clients is catalyst under how own shift

that what which business we for marketplace. of the volatile of with and consumer and clients in none agile-enabled course, a our strong account mind behavior more model business and proactively can increasingly will in top takes to we becoming by well opportunities that capitalize we of our supply is Coupling capabilities. across our positioned diverse in believe potential on believe financial this industry, remain reinvest shifts Of but we given continue likely resilient is much into position a chains our are suite

John the that turn I'd like call Chapman. to with John? over And to

John Chapman

like our and financial cash P&L particularly you, balance Thank highlights. I quarterly discuss sheet Chuck. results would key to flow

that job mentioned have XX Chuck's than that last home tremendous in around underscores XXXX. for Chuck to pandemic. amazing further credit total the agents ramped A less we through deserves than As point the is remarks of team our an times in COVID-XX many X the years as number home days responding eight over February data agents

was with to we the projected. actual revenues reported $XXX.X $XXX.X of what of to revenues $XXX start agents exchange facilities outlook our approximately $X the volatility. lockdowns gap where outlook relative million. COVID-XX In versus $X to XXX midpoint margins gap, not operating quarter million. $XXX basis million roughly revenue Of or $X million to The million let's remaining below million the points. abrupt that, due million business able we roughly related million million $X the of was our projected of million $X This were foreign to by $X our due with With impacted access

they a wage -- and in employees jurisdictions pay We to premium in working. certain who to and if idle some a those continue were even premium were continued are paying we instances

is Turning It and currency on to growth. up in once client By on our in XX%; currency revenues, X% communications than all services offset worth were reported other was on by up basis X% out vertical up X.X% a vertical basis. the market stripping constant on around had travel year-over-year comparable the constant more up that X.X% health up significant basis we X%; communications XX% a care and of vertical was decline a largest decline would and financial a basis technology swing a transportation. double-digit in and decline which have noting communications the our in X% a

negative profitability. First increased have the asset impact quarter basis year. of the with year. quarter Further the acquisition-related same and certain the would XXXX margin operating costs margin last capacity integration On period or excludes a strong to rationalization X.X% the which of in points been period higher. million comparable $X to The operating XXXX from increased of COVID-XX-related of in operating demand the non-GAAP for impacts, approximately margin merger we fixed X.X% X.X% and operating programs income comparable first estimated higher and and first from XXXX due overall was for increase X.X% to utilization absence the basis last in write-offs subpar client quarter intangibles XXX charges

$X.X in which adjustment quarter through global $X.X the XX markets a in swung quarter from XXXX ago and increase or reflects quarter. which deferred mark-to-market in by XXXX expense benefit basis of in ago also first an year operating year are points the the of funded quarter margin or related million programs, financial the Trust impacted investments, to approximately points, approximately XX the stock-based basis of of prior million an Rabbi decrease First comp

$X.XX of First by in quarter impacts. and by utilization a combination the related driven capacity of COVID-XX up of XXXX $X.XX which year, mostly negative period XX% diluted operating same were earnings margins per to higher $X.XX share last were demand versus tempered all

tempered impacts. $X.XX basis, non-GAAP by were earnings XXXX On per a share on $X.XX versus COVID-XX-related a comparable which of first were negative quarter basis $X.XX diluted

Turning to quarter from revenues up XX% basis no during quarter top ramping the for rapidly first XX% our and wins XX we're first in On at the of from same in top more comparable client XXXX of total X%, by driven a year our period. clients our clients largest a The year represented that top offsetting XX% of client. We XX approximately XX once the the mix last consolidated had XXXX, moment. drag program to robust period in than grew client from a roughly the compared the both quarters. ago new

Now and let flow balance select me to items. turn sheet cash

revenues $XX.X increased flow with declined intensity due period. capital the Capital X.X% expansion in in cash of mostly year to driven $XX.X largely quarter swing coupled of of million to a from from and ago by the EMEA in During was million to support increase operations in a refresh. revenues offshore working of capital The with growth. revenue from factors technology X.X% decrease expenditure seats

mandating day on primarily XX clients year increase a up compared a quarter first first last DSOs factoring. is in were four one for and in The consolidated days due drop-off the up quarter comparably that to DSOs days, of Trade basis to – receivable were sequentially.

out The for even weeks XX some and liquidity DSOs further split more they days' and we We days manage expect for needs clients worth XX as a roughly DSO quarter in EMEA. payment collected was of of days since the stretch end couple Americas aggressively. terms to XX between

was XX, balance or XXXX international equivalents million, sheet XX.X% operations. of in $XXX.X with at and million strong which cash held Our March of approximately cash remains $XXX.X

At $XX credit in borrowings $XXX we $X our XX sequentially March outstanding agreement. million had million million under up

During the of $XX.XX shares $XX.X at total share quarter we repurchased per million. for of a an price average approximately XXX,XXX

our to hedge some continue exchange of exposure. We foreign

XX% weighted to XX.XX approximately second the average quarter and the PHP at rate year and hedged dollar of XX.XX full respectively. XX% and PHP a U.S. we're For

addition for respectively. In XXX.XX second for Costa and at the to of our periods CRC full the exposure XX% year CRC quarter rates XXX.XX Rica hedged and approximately XXXX both USD colon is

programs. is seat some metrics. utilization with ended seats On up evenly seats, consolidated between XXX we EMEA – The is rapid split first quarter and and Americas count let's comparably. XX,XXX client Now and approximately expansion approximately seat roughly basis new the a driven the ramp by existing review of capacity and the

XXXXX XX% was to and rates the for further Americas the in region quarter. The can EMEA. the and seat XXXX end first and the the broken EMEA Americas utilization quarter EMEA XX% the in of of for XX% for quarter Capacity for first be count down XX% year-ago the Americas XXXX the in versus at

driven the complement EMEA decrease to utilization in our of rate reduction capacity utilization in mainly with to facilities. versus that in our with platform by due Americas to The higher the rapidly whilst XX% agents to prior our at-home brick-and-mortar was demand was as a brick-and-mortar ago due the XX% our at-home was demand on quarter The a mostly coupled increase basis ability combined service higher to mobilize to demand. year utilization

prudent nature suspend event, given to providing that Before closing, to the believe being. for of like the I unprecedented outlook would it state business this is we time

in the clients, the business, uniform. operates lines impact company geographies be verticals which to likely and unfolds pandemic As the of not is to

robust virtual to from can delivery. a tenured model and agent purely home pivot hub-and-spoke With we

We food related validating to clients are experiencing support agents. facilities shifting up direction for in differentiation fintech and and Similarly for support demand hardship work by and for business providers. picking from we bank agile from strong lines apps. business far, to as are been our digital delivery certain card support such Thus demand Clients of opportunities have brick-and-mortar from shifting credit with we other customer are this providers. along services home

opportunities and as with people the for verticals retail work goes in same The clients home. communications from more

forecasted travel to be Some the by vertical. downturn of this in is demand in expected offset

is demand trends, levels global final model on demand challenging their unemployment as the it of to expectations well given and impact speaking, as in broadly surge Similarly demand. and pent-up

federal uncertain react authorities impact Second, the and of some the the track virus as to how municipal remains state could progresses labor. year access and

Third, their it level will change remains service delivery with expectations strategies. service along uncertain how clients

given a to historical the of scope in trends client trajectory way future calibrate marketplace. we are reviewing have application typically the finally, which as likely and to speed And forecast assess demand to utilize limited dislocation

business as said, with strong to even financial industry to in we client we and reinvesting position which being current believe our emerge the are well is stronger model, and navigate business. wherewithal differentiated have we continue backdrop positioned highly That the to relative many validated in by the actions, a the

With to the that up questions. call I'd for like open Operator?

Operator

Josh Company. Instructions] We question-and-answer The ahead. question will Vogel comes & go of now [Operator Sidoti first the from begin session. Please

Josh Vogel

Hope both you. Thank Good doing well. you are morning John. Chuck guys and

digital you hardship the be that comments term talking played had it well the First service term? about demand or is seeing just over in for providers do fintech you could from question as Is on surge more just think the you're in based John bank out jump business food that support clients. and long delivery as nature, short and this this

John Chapman

described. small that you a of There's amount that

So, it's been very small.

I ramps think them that a think of programs. of on seen we the temporary increase some we've will acceleration away in those more go than

what And believe that a food huge describe that got hundred that guess will on away. long-term growth go like was we you of there's but few as side There maybe always quickly that we're especially, majority and in it's about. our is end the seats now It's program will and it digital the accelerated. So, be swing could a footprint. I delivery government just service we that not definitely is surge, a excited just

offshore Philippines of we've ramping the and much programs especially were we we with those had paused, there challenges down. where slowed programs some some so in like Just in but not the seen

of positives we just call term vertical longer And we've have tomorrow. of every We just negatively got those two with the will believe that out just today majority of really do now, kind kind us to be impacted. we nice is and working wanted and positives. not some here these but So things not gone

Josh Vogel

just could Great. around brick-and-mortar at-home, footprint? state it could And to know to look thoughts what workforce the just on your thinking model out curious X% potentially is I'm could business operations out your And opportunity look just thrown at-home pare margin what coming maybe profile? And shifting labor gears of versus the s do thoughts physical like half you've about the normal this new brick-and-mortar. half XX% if in your down always an this Okay. please. give new and like having of structurally I the what versus Does that targets, the you to

Chuck Sykes

Yes. to and empty take you our Josh, so it's actually long reason the our if home We as why and move this of Chuck all centers and you more today people you is positive -- and And can't they tell. term. agents were all at kept see to to if them looked a margins with a moving what of be profit still platform. intact that of much lot home you our we agents if guys not would it And by be our incur agent because still costs ratio pretty extra that seats XX%. whole okay variable would there's our

home caveat it one COVID, They XXs, a lifestyle. brick-and-mortar that the hours. upper Now, work got was before of is our agent and fewer today more were their early typically XXs, more in people our hours; we

Now agent does question. normal the is and up a this is majority that in here margin becomes general profit because the to commute because they from profile. usually need If then people the lifestyle, the hours bring do of I the home that. new center, a reason not income they like home they work big versus But and things not why are better those don't and if in now time equalling have the have what more have

agent. it actually So purely business if home would profitable instance, in was we that more model have a

don't, to XXX% go to we So, not can And what our have us any going allow sure are that our they is, we're to right estate don't real see do clients they in at-home. allow we expense your then millions Even if XXX% completely eliminate. now us we have if just at-home, if point, margins. of deterioration go expectation current of we to

risk If steady a see from So, we a state we change the in and anything see opportunity for we model. don't downside operating it. an exciting see

that understand hope you can me. I helps So and

Josh Vogel

great Thank you. It's Yes voice to it does. hear always Chuck. your

what of not off facility? or go would if at-home comment potential to of to want not the a that clients building Just allow outside that that some yet you would you're completely confidentiality, or XXX% security of sure -- brick-and-mortar will reasons clients in stay are

Chuck Sykes

security justify reason obviously of you a this be in really bias aspect to no I and -- -- home is for to to with. not want we're to client have even want want to for saying logical over. every at-home internal its seriously some in difficult say the country out I more The think they're why every to hard be get has embraced is There agents. of even that concerns and clients environment comfortable center in in almost to one industry, our every now. security What is it's

So pandemic concerns. to them the and fear forced of respond the to of having get legally the response these over

And of a to do. really I think I it's lot stick going

you people a and not in fraud So cases exposure, felt that a working happens, facility. issue and maybe happens where have irresponsible some I'm bad only client in people for having something home, if we at secured were

area facility. to I is would find think in stay you a that going

if reason we're the outside security particular a won't business fraud things certain sure, things work. So banking for that isn't or certain that. of home really things really around fear handling my there around mind in in But like clients certain agent

big be in going the only I really change to a is business. there's So that exception to do. I The offshoring. think

have from maybe working operations but So that's XX% really embrace we now going in think if our home offshore from we'll offshoring zero. want to you

I reason you'd sure more but probably offshore is is know, there that not add So for domestically. is John that? don't the to legitimate anything business a

John Chapman

is felt do margin that's if the what can that back get yet you but model. deal security the back operational can always around figure it's been know held if if one mean, like terms being and of, higher how at-home If that. – if not a Chuck's center, normal ability we you've you – gives us profile we'll nothing your we negative comments more costs. normal of to of. reduce more to we And just there large do at-home downturn than benefit in physical to we back. a it the G&A utilization those is Other us new and get significantly much you've get is get of is out now understand costs. going as No. have got site with at-home what the so can we And as to if got in not just the neck we flexible aspect and about It's lower do rid SG&A I percentage to that there still occupancy on to

thing we in of ramp. great, always a grow based And at-home on can mean, cetera. I month say the we people classes geography how hire would of can It number and a always only it's one building is rooms but a a et can factor I put training how quickly get how limiting been and in in terms x is is x on quickly in you that's we can that building and in quality many got that ramp was

this that expectations be reassess, give believe for is that margin there's what – be left how are to in-center, how much recall absolutely So that's significant higher us I going hopefully opportunity at-home the matter I to work understand as significantly going is business. back think no and we significant going we higher our to and through to much piece a

hope So that's as forward. my we go

we at and to like coming of – when down you and years which don't there's Syke's brick-and-mortar at going security But it's the thing want last don't a spoken of not thing successfully I what would home were because of I that. is, cohesively What model certainly, reason couple were model, that adequately client that's look And them. utilization was this managing blended our think together. would over about see home the I putting I why any say it's agents working at-home margins managing another other any our but Chuck, embrace up think was one expertise we've implementing EMEA Especially, about outside site how agents. the the

U.S. build until across in the the had to we've We're manage of as And how at-home virtually, how hopefully share understand forward we grab manage expertise sure learnings we now because that we or that office, to our this we brick-and-mortar since it seamlessly really we or XXXX. that team the us whether they're of very believe making at back Europe our share look And and a much now clients. in and program world experience to the the disparate and workforces. as was that at-home that in that's that No line we've where our sight of model go at-home. taking in you when threw matter the of had market a help lead, in impact in market increase

Josh Vogel

Thank you for there. all that insight

then give true look some more at if the do out is is coming from guess, then? to portion Thank the can looking we'd you When vertical, at business $X.X billion that the pie XXXX susceptible that? you. of what what think one. And COVID around you one portion think thoughts about an total Just travel discretionary I impact base of I within quick

John Chapman

that's long Susceptible way. a to COVID

of care. booking of had what a – and In travel know that holidays And at discretionary not are that the say How about travel up? just going you've to open would don't does I The reason X% things think moment. are is on performed where that well vertical not in it let's we that it we've going really is as I that element business But the why guidance pause you number million would $XXX go business quickly QX I said terms roughly for in worth take part is flying discretionary. How piece. that be described it of I unknown basically as perfectly in a of really will And will would to again and is down? customer go. far would the QX yet. the QX. mentioned, not people say million is say be needing question That's okay $X We

Josh Vogel

well thank stay questions. taking doing you safe for my guys out Okay. and you are Well, that Glad there.

John Chapman

you. Thank

Operator

The next Please Bill question Wells Warmington comes ahead. Fargo. of go from

Bill Warmington

do from was mentioned. some trying be and like then the then I to a everyone. also also wanted to decline – to the travel I be that about it. trajectory revenue vertical But make some would was impact X% a Good get expect sense And $X sequential morning, trying softness was the modeling, kind – way trying for can to you the QX. to margin maybe for what modeling perhaps normally sense I we ask the that we're million also the there'd whether in Seasonally, of there there I'm dollar-for-dollar QX?

John Chapman

there. QX I Yeah. it's want I mean, really in from us difficult, you're go Bill. mean to don't I but know we trying to get guidance

those If That take is to worthwhile just $X how was came the I we let's number. COVID. that really The explaining of – we got employees because March. access last think immediately cost margin the that revenue two lost not weeks the closed and purely the use our total we million million, no down had we at you to and the looked just half -- that was in it's in facilities when $X basically

So hard in Philippines and had close not is Salvador. in in the Manila of but that El we really in – XX% the

so that's dollar-for-dollar, had XX,XXX And couldn't XXX% our we just of there was we why people people. literally but access because it

is XX,XXX as down is a would of number today XXXX. number to that we say sit I what Now,

was. So it's XX% less it than

terms people it same And That which that in I And was to is And terms still that we impact effect X,XXX of your you dollar-for-dollar are model cetera. so not number, what trying to labor but that revenue Bill? to the them still work. in there do we're would then of today still if offshore, say, got going is would roughly we're is as QX. XX% -- of now there a end we've is in the that those can to out to got work QX hard less. at you where you're looking employees et of what model That's the QX. modeling paying most want it, get But that

Bill Warmington

thoughts Got wanted to think one? and I lot basis peak. think heading know down I down this also Margins basis it. a revenues a caveats XXX there I into are were And do X%. XXX into on were but you your points, around Last or what heading downturn points the from X% timing ask the then magnitude, the of XXXX, recession. XXXX,

Chuck Sykes

Yes. Bill, different. I wouldn't of things are say, there's a that couple

a people recession slower client in issue First simultaneously. over time. of in crazy affects has of every pace, dreads the that every country it all, in at hit this is been sense And kind

like the next we're in be much are thing pretty box or going really to here ones that really last struggling. in sitting identify retailers. today, positive, about big we can But is we now that's about a now this home thinking talking just because agents we're the couldn't the think think hit shifting say we time we case, recession clients or like travel, we're just which to So, that, and completely

Cloud was E-commerce trend. COVID, place In was you computing whatever so it, trend. about think prior home essence up if a from trend people going trend in gate a a economy. to working was was

not gone All factors now They accelerated. have have those of been away.

non-essential going If to hurt a significantly. trend, retailers really is like, out and negative for you probably extrapolate have that big-box okay, goods,

good pretty different at it's other demand business we and get brick-and-mortar. as able still thing at look we're it portfolio, is of lot a idea. and time, and a see pent-up. This back -- making that the it look we is that our to So But was sit last our

happens subsiding. around the world centers what you've business starts So XX and got is all

going XX% starts work. have to put down model and that you from have to to to a center So sales a facility XX%

we recall to called were all may thing term You they've cheese about our basically in potholes converted like where using all we home. is that situation Well, the Swiss have good vacancy this that of centers. and

to in the seats have hole centers demand. us can we that and recession capture particularly it giving that now So of had hundreds that the market in whereas today capture are America in to North have clients at right we before we the right and hundreds

big So that's a difference.

We an But be going going we we cycle QX, really and other this we So should when to can quickly. exit in is the the governments have now that right we think or behind at something stuff, and we'll is we not right have see demand QX. very have and what on we spike hand that facilities second don't but have whether about is a the how that places, for out, think if kind through we happens see operating or murky QX. capture least of to this all to model through respond to that got we us QX, be worry the

in make last say much acute So as it's the to more be an to many operating we model optimistic because It's QX, a the the recession the future, But will in our response candidly, in about I now. change and hard an will think essential a quite and you've it much different. a true we're big pretty -- in exit is right people when that the And year, a very QX. industry to be. This actually service we so are clients. is needed thing it place we're hurting desperately we're got good that's

hitting and over the agent who's So, hitting kept stronger of going different don't a I stages little to this of anyway determine, the going kind different recession. is just not. you who out think sudden out gives hopefully companies years easier lingered a to the of And and I two to recession color. that see Home everybody way at come simultaneously three impact and the little

Bill Warmington

that you could. very for color. I much more if One Thank

and a pretty sheet. channels strong balance guys got coverage a across global You you've have complete pretty

position. one pick I in the the of up net players with consolidation whether a benefiting? actually specifically around are cash space ask I you're you're few vendor to -- you you guys guys And whether that's helping think wanted share whether

John Chapman

have making don't do think and at making they that know the financial us I'm of Sure. sure sure to any looking of competitors. I position chain are and blue-chip them that relative clearly is yet they we've understand they're out of been supply position clients as seen What their and reaching many our Bill. understand our our sure I

right don't especially hurt it's immediate make services it and this one deliver capacity balance anyway vendor can to much get struggled having their sure an I list. as for don't to want in as see us a got. as I maintains think clients. I sheet strong only such to ones term got I that's employees to a consolidate of And have that not mean think that all the And place its client position when in from we're geographies we've and short these the being that to going reaction

that with customers their levels up to them are they're this. expect once are be will Clients not outside putting where service

don't consumers might I that how to service away. times consolidation. why understand will I levels be think but long will see look and low clients just vendor go short-term will wait

Bill Warmington

it. Thank Got for the you insight.

John Chapman

Okay.

Operator

from ahead. comes question Vincent next Barrington. The Colicchio Please go of

Vincent Colicchio

But pipeline, of you Chuck, cancellations? you're versus Most at mine we if sales could much Yes. how look were characterize seeing asked. the delays

John Chapman

seeing services use I word had cancellations has sites cancellations that client cetera. of Symphony et then in significant lot anywhere. delays any wouldn't Professional business wouldn't we're the works say because -- I a

but -- million business annually. of that's So only $X

So that's huge. not

still few digital describe What the I some touched I've some and ramps you would places is side And and acceleration on slowed but delivery I the think seen in seen game. game is end -- food ramps especially we've services. again we've end and the say a that in it is has

to say slowed. the I cases some postponed. markets. us the in it's some in not I terms cases take those in longer in in cases some would of some get to accelerated; going just there But canceled anything or labor of delayed; of and in some the challenges in It's would describe

Vincent Colicchio

where willingness a quite health the provide very Is spoken assume historically there to model can a at-home? had I use bit wondering even in at-home there both you Chuck industries. financial sensitive those you of going not it's then there's on and care about of everything. services if bit that? for areas. I'm And they're the obviously portion think color sensitive Is characterize for a the more little no way verticals particular any to way

Chuck Sykes

want going if the issues, to probably screen have healthcare on that center in Yes, to that -- If to say fraud if the -- be we to the in center. going doing handling be the I to would privacy want they're information access is then that that and transactions, violates we're we're as well.

it's really to So -- but was his docs will People issue of with what or you up and went that's comfortable that questions billing see on at-home. at-home. be if you bill, you're and underlying is health but doing John the just it claim his understand be don't a the kind screen basic that will

first ramping home outsourced also home in financial In We're are United fact for healthcare work as in to ever agents the as we the of time now new ramping work been seats right that's programs agent. speak, States. new we same ramping hundreds way. the We're third-party

was and forward-looking was not -- changes model. COVID operating a about decision issue. So to this the This the to reacting

in right pandemic. later the the tax say X/XX/XXXX So Recession it now had this tariffs and you I'm has dot.com on heels XX we pandemic, is And think Great have millennium, Then all if as innovation. we We talking -- mother a one used had in years of the necessity XXXX. to the about now XX, in all about bubble. of the

can had we've which think an to in three now stop certainly better uncertain makes issues almost we global have seeing. we're and world have operating that environment I mean and think people I the impacted respond that models that

So, change going are very down I to those come earnest meaningfully. think

overcome But of your the may think technology I question that concerns. just some the we're too though, a much, they'll lot concerns concerns are that where bit. ready or stay answer those -- ones for a getting security centers little to to I mean of fraud there's the But in deploy also help

see. to interesting So it's be going to

Vincent Colicchio

color. Thanks for the

Chuck Sykes

Yes.

Vincent Colicchio

for it me. That’s

Chuck Sykes

right. All

Operator

from Thank Dave go… next comes you. Baird. Please Koning of question The

Dave Koning

Yes. first think when mid-single about think Hey, my question, I up I QX, you of the Thanks. guided of guys. way kind we guess, And all, digits. was

a You maybe to April, would just that kind year-over-year to seeing for But maybe so give give said it what kind I But how exiting far like X%, of ended up, growth through trends a was what mid-March. off. you to of up could kind held insight and context pretty not think really well of little through X% up do trends. little real-time recent about March you you're imagine

John Chapman

to telling people you XX,XXX down number X% we've Other impact COVID, telling mean, the see to David was got is, should think X,XXX kind been only March you QX currency point growth the that than I can now I QX. and and of that's we constant would on now use. organic the in the in that that you the late close have absent -- you in

we're going be demand not these to seasonality. about don't either it. mean want exactly at-home about to I working for other to, just But I really get where yet. to want factor ability April our through capable what's I that And still to would they are guiding folks get start talking or what normal back call, the work. center That's of to I still to us don't talking in strong. start it's is than about really are; a back

Dave Koning

Yes.

given stability; I and guys you the to can to thing, choose are give wanting customer relative pretty a really your ability guess, bit is Does b, -- the some a to advantage, helpful. valuations from cash now, you standpoint, I the get acquisitions, a competitors in something? even time big strong, That's little industry. other then, make maybe to just, clients some disrupted where this And give buy right guess, and I either in relative a you a maybe guess, some Okay. you attractive balance lot maybe

John Chapman

no matter will as would our programs and and resilient, always opportunities that, not come proves are say disparate our we're keep sheet ready working distributed in for force, our manage in to the look there, shareholders they're the many it’s that those we go whether there QX, our an of again, office, and as significantly that focused in whilst basically the we eye out possible; on a keeping disrupted what leap we model after our that's to on. that out balance for a can clients; what manage home or that's of workforce, are as we an this are our got some not capabilities sure is for be when think dividend. It’s safe, force. driving compares But, would our want I'm deliver I driving employees Yes.

does. you opportunities Will there is -- give making balance their they strength? Yes. got Clients a it's of combination understand sure supply look the sheet. be in Absolutely, of at? that just are But Absolutely. business strong things. clients financial position? where not prime will leave us it terms their we probably will you've Yes. that And in chain Does a because

I time, it's than operational that. give of at it for in point our more this to us business that's strength nice because But have they'll capability sure. the think of

Dave Koning

just tax like If quick guess, the And, Great. are certain components can rate one the or a is rate one fixed I margins mid-XXs of around there lot, a on good? rate. tax that tax make lot. move change Like pretty

John Chapman

No, you're good.

rates tax much good. No. much. move won't see this You're David. rate impacting don't Tax I

Dave Koning

All right.

thanks. Well, good. Glad, well. Sounds everybody is

John Chapman

Thanks, David.

Operator

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

Chuck Sykes

Well, forward next Yes. we're to Stay the joining you, safe. thank in looking quarter. All everyone, as and always right.

Operator

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

disconnect. may You now

Sykes Enterprises (SYKE) 9 May 202020 Q1 Earnings call transcript