Earnings call transcript Q2 2023

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Operator

Thank you for standing by. And welcome to Perficient’s Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]

to CEO. call like Davis, to now and Chairman would hand over the Jeff I ahead. go Please

Jeff Davis

for Thank up you. our of XX everyone. want morning. the after Hogan, Good We’ve morning, usual, President prepared to call the me Davis. our we’ll questions. XX your which is comments on thank With got you per Paul time COO. about minutes Martin, and CFO; call for Tom This and open I is this Jeff to minutes

Before proceed, please the we would Paul, read Safe you Harbor statement.

Paul Martin

Thanks, good morning, Jeff, and everyone.

things call the the forward-looking securities performance of statements we future be Some will discuss today’s will of laws. concerning in within meaning the company

those factors different than results those contained additional forward-looking in be information these encourage that results our to today’s to in Actual from statements, filings SEC could the materially in may cause concerning discussed discussion. you differ contemplated we to refer

adjusted EBITDA. At refer call, we this will to adjusted EPS times and during

Our most certain earnings with Accounting press release, is measures Principles in website www.perficient.com. or comparable posted Generally measures directly to accordance Accepted at GAAP of prepared financial non-GAAP our financial on including a reconciliation the

financial with guidance Investor slide have of prepared non-GAAP We includes directly to Jeff? measures Relations. GAAP accordance comparable a the a which in on certain our most under reconciliation also deck, posted website

Jeff Davis

year. quarter Once you, second expectations as our and morning, of Perficient’s Paul. again, discuss revised the Thank the thank you this your we time for remainder

on my well. I’ll transition comment as of we Before Chairman the close, pending to role Executive

and we instances, ramping QX, were adjusting of quarter. cycles, impacted some Margins was by projects during budgets invention X% than sales had the slowly Like the client more anticipated. revenue up in

and taken on the end on ensure pride margins maintaining to to and of our discretionary have want by appropriate already costs best-of-breed year. the norms return we we to historical ourselves action fixed However,

has margins. exit the anticipated expect And closer We closer to a gross but than QX gross exit and the the XX% year as most industry, slowed well to it can’t shift as on the more margins do guide, in certainly XX% market quickly we’re would. fearing much start to but we’d

continuing larger deals and All than that pursue ever said, we’re before. win to

will In we to history. statement But in single the work of quarter, during signed company’s largest the the Tom fact, later. speak specifics

win extension an XXXX as well that program same that as others. million The in started and million as initiative we’re many is client about this multiyear than annually now per more a of stream, $X.X delivering in revenue a worth to year $XX work on

solid remained rates Bill during quarter. the

up actually year-over-year. In fact, were bill onshore X% rates

accepting we’re Our rate continue to value. because comfortable modest delivering increases be customers

a organic, during truly outside the Offshore of Our transformation grew of XX% revenue U.S. to global XX% that X% quarter, was are resources now underway. billable entity our remains located the nearly

various their with Our technology and continue channel global our importance to contributions and recognize and businesses regional awards. to partners

weeks, earned Sitecore. the recent in from Microsoft, we’ve prestigious recognition fact, likes of In Adobe and

clearly in excitement in While a our are technologies remain industries across generative like right detail pursuits. more bit more cautiously we shortly the proceeding and emerging will talk many momentum around clients about seven-figure AI. Tom now, engaged

enterprises transformation to competitive digital or costs. reduce choice. stay. business grow deploy invest digital into is before, a mentioned is morphing to technology here have and we As Today, a imperative. It’s must consistently that They no

to over I’ll Paul. With that, turn things

Paul Martin

me, Year-over-year, growth was Thanks, organic, X% increase Jeff. Services expenses, the excuse quarter, the over revenue, -- million organic a organic excluding services revenue second services were year. $XXX reimbursed in prior X.X%.

the compared excluding XX.X% stock expenses margins, XX% second was the year. in gross prior to in and reimbursable Software compensation quarter,

sales related primarily in year. of expenses related XX.X% the in of was in revenue a quarter, expense the as SG&A from revenue to The as $XX.X $XX.X expense in percentage year. costs. SG&A million to XX.X% in SG&A prior the was compared percentage million second prior a to increased increases increase

$XX.X EBITDA of XX% year. in revenues XX.X% or the in revenues million second prior Adjusted compared $XX.X quarter, was or million the of to

the compared million million increase $X.X Amortization year, to million second in due second the interest million in quarter, the in in decreased to from was the interest prior $X $X.X quarter prior to $X.X expense a primarily year. for $XXX,XXX income. Net

Our tax XX.X% quarter in the compared the $XX.X for second the in effective quarter, the was $XX.X prior to million income decreased for million year. to year. Net prior rate second XX% X.X% from

year. to Adjusted quarter from to per for $X.XX to share the year. Diluted decreased the in in earnings a share share, $X.XX $X decreased the earnings GAAP compared second $X.XX per prior prior

for earnings. a to full can reconciliation the release You GAAP press see

expenses, results. June year-to-date the organic to XX, ended months stock expenses a compared the in XX.X% months Year-over-year the reimbursable year. XXXX, services growth XXXX, margin, prior XX, prior the XX.X% million six turn year. for Services X.X%. Services excluding over $XXX reimbursable X% excluding and ended revenue, now were gross was I’ll for was up June the six to increase

in six million the $XX.X prior primarily period. ended increases to in increased XXXX, expense was XX, revenue costs. the compared in XX%, a months of SG&A XX.X% compared expense to year. related increase Again, for the SG&A expense was June SG&A $XX.X the percentage as sales to prior year related million to in

of to period. months Adjusted million compared or the $XX.X prior in EBITDA revenues in Amortization of year million period. for XXXX $XX prior was was revenues, million, the June $XX.X compared the to six million XX, XX.X% XX.X% ended or $XX.X

Net interest in to interest XX, the period expense XXXX, due year $XXX,XXX June primarily for the increased from million of prior decreased six $XXX,XXX income. $X.X to end

tax was prior XX.X% compared months Our XXXX, the in XX, period. the for effective XX.X% rate ended six June year to

six year to June GAAP in compared earnings the decreased for the million, the prior ended June XXXX, ended share period. compared $X.XX year XX, income to period. $X.XX months per for XXXX, prior comparable million Diluted for $XX.X six $XX.X the was XX, Net months to

Adjusted increased the XX, in ended year earnings per for from $X.XX $X.XX prior share the months June XXXX, six to comparable period.

billable at consultants XXX and adding including Our X,XXX, headcount SG&A X,XXX XXX. ending headcount XX June at was was XX, billable contractors XXXX, June

costs issuance deferred of XXXX, was net of XX, million. June $XXX.X debt, as outstanding Our

had on of capacity our million end as and and also facility. cash $XX.X We cash borrowing quarter $XXX.X the unused credit the of in equivalents of million

continues sheet to very plan. well execute against positioned balance our to strategic Our us leave

operating flow XX, ended the prior year Finally, to primarily to June increased reduction comparable in six million from months period, the a XXXX, receivable. million due cash $XX.X in $XX accounts for

Tom I’ll a little now Tom? over turn the call more Hogan to behind for meter. the commentary

Tom Hogan

the Paul. you, quarter in the XXXX, everybody. XX during the Thank of quarter Good of XX first second of XXXX to than and million booked XXXX. in quarter morning, greater deals We $X compares second XX

record-setting deals, to the was to average thanks slow Jeff did quarter pointing a including out, earlier, our size win than referenced ever quarter. the the worth before While volume larger deal during very few large in

Our remains pipeline weighted, unweighted, net solid. very

perspective. manufacturing and industry strongest We well diversified continue both and remain verticals, to also excited we’re in the Healthcare a services financial from automotive. momentum and remain the about but customer platform our

in experience bring with largest the of and and entities we are many strategic working insights industries already of others to understand their We’re business. can domain to each beginning those deep expertise, the

rationale and example, [ph] which we’ll proprietary for and the weeks, we better EV understand barriers and dealers in interviewed in the coming consumers, to than Vehicle For X,XXX and purchasing EVs. OEMs release more Electronic owners market surveyed non-EV Electric study

lifetime OEMs, further in sharing prepare continued our forward insights the relationships focus EV owners. as research for area and for under assisting are to segment look journey. growth EV Market with significant industry the to and they OEMs a We build need

Jeff win Perficient a Latin earlier. the project mentioned in manufacturing America U.S., delivered India. the with from substantial eight-figure space globally the That’s colleagues and

architectural regions, and is products three modern primary our global cloud-native leveraging talent delivery application. of where producer seamlessly integrated a our assisting from example and Another distributor global web privately of user-friendly held and we’re creating

kick Our optimal modernize product initially help variables application one launching to for applications all the distributor Poland, supplement off the rollout distributors later year applications create this in and analyzes global consolidate several Italy its into buyers. global team product the to in a legacy several planned plans. launch to their that After will

insights. and [ph] to can provides Envision discussed actionable we practices suite our last This call, gap unparalleled address deliver on relative to historical and can exists digital where markets industry where them. and they understand results. is across life data quickly of and by comprehensive execution Online, strategy to and industries, best data You platform competitors, determine recall proprietary transformation launch companies quickly stay the real is of how that collected tools, proven informed a quarter’s Enterprises of

and continued mature platform, areas data, and large such meaningful origination X,XXX servicing, AI. customers we’ve a to several now including discussions interest loan defines component XXX which We than capabilities that. marketing leveraging and beyond the AI, that a more and assessments April, more commerce, in than across key to experience, automation tool launching XX name have projects currently few. than platform selection just now customer have sales, service, more as requirements Since business vendors XX with and commerce, across The platforms, includes digital more inbound XXX marketing,

discussion of way the and lot enterprises, tools. going back other IBM AI a years, for there’s on around a long-term been many and society. to space Watchman is in industries all AI Obviously, we’ve general or and impacts among its generative in near-

and for clients. significant generative launched means engagement have data, products next assess and them in what’s customer-centric opportunity and technology we We for dialogue chatbot, risk for outlets, learning terms AI, machine clients. AI their organization in the customers around have with and Today, of step our they as platforms this and their

with engaged actively on don’t more. clients leveraging goes AI, talking day Perficient we’re generative clients many importantly, with billable and that them are help to potential are and generative implementing a turning we to doing to in AI. I a partner work, the understand most solutions with think by Companies

share its I’m to innovation launched kind also AI. of first around group have excited Perficient generative global of that the we

cases knowledge hundreds We AI. specifically collaborating, world colleagues our customers, for around developing have our and the use generative leveraging sharing of

have tackle leveraging talent location global of tap AI team solve around when generative can appreciated Perficient. experience into best the practitism, challenges. our the is why a working turn the always industry, customers physical our opportunity independent to organizations and new to This clients in expertise like to where exactly world Our areas

in employers. best because Energage’s they XX industry brightest shows. recognized very individuals XX,XXX particularly States surveys country directly the of, recognition Energage Finally, The Perficient and was and and annually, is want our to organizations top of on very, and is [ph] our -- or colleagues worth noting, the the Perficient it’s more part so XX of feedback to entire recently provided. feedback Top the we’re stems XXX list ranked in the United than of journey number proud as something number be be it from Employer

Jeff. with things I’ll And over back that, to turn

Jeff Davis

Well, thanks, Tom.

mentioned pending to hard of somewhere think I was my XXth going I a earlier, transition. my But Perficient little about. bit on near This kind at is earnings to As comment call I appreciate really over did want analysts been coverage the call it’s the on and we’ve years, here those and feedback who thank as really can’t invaluable grown. live your and to join the

will also Executive full beyond to be as out I’ll executive as extended release and reiterate thrilled I a the and be and in point really. But have Chairman that. part Perficient team, as indefinitely the rest all and stated of amount so that, I still team want the that a confidence the about of in Tom tremendous as of I confidence, well remaining

that average. represents been Our approaching years XX-year, well experience on industry folks XX on have extended and average XX over in executive the here team

some think, very got very in very I colleagues to take very we’ve Perficient. company in proud is I’m again, special ability and all the it and we’ve very working a So I forward, across world where of the special appreciate proud their deep them. got company here. confident bench, I’m dedicated of of And really talented, this headed.

in its $XXX million range quarter to I’ll expects Perficient attention or the my revenue the our to be Now XXXX to $XXX of million. third outlook. attention turn

expected Third earnings share $X.XX. the $X.XX to per of quarter in range GAAP is to be

to to Third to $XXX expect per year adjusted of to XXXX $X.XX. the $XXX million, of to is be $X.XX be and be range we per revenue XXXX $X.XX earnings earnings million $X.XX, share the to be to per range in adjusted range in share $X.XX earnings the our in GAAP share full to in quarter and of of expected range $X.XX the

up we for can call open the With that, Operator, questions.

Operator

Instructions] Thank of Needham. line [Operator you. first question. Kyle Peterson comes Our the from of

Kyle Peterson

or Thanks demand. the some Mayank. verticals projects there to Good questions. or Hey. that of for just I outlook, pretty weaker just types broad-based? particularly in on was taking the harder wanted This morning, on particularly the were others guys. is Person any Was the hit of some Kyle concentration of touch softness than for

Jeff Davis

kind of reiterate of little was of a really, bit again, want it now. decisions It broad-based. slower these Yeah. is pretty a starts, mostly the source And closes I or bookings slower that But to to gap spending. it’s as delayed the some relates in

here, some we we’re it be seeing signs we if don’t better expect. guide hey, things and very but obviously, to that’s be to expected we’re with. trying we are But We great. that conservative than and of And to improvement, comfortable number a are than want worse

would So outlook describe I our way. that

Kyle Peterson

through environment cost in should and be get Makes follow-up quarter the longer P&L? fourth to side taken take actions spending. then in things. guys XQ of sense. the to quick demand long on do of little an And go margin and a trough the about the on remains we you here, little I a to the And you had softer mentioned as flow margins that a discretionary we on that actions the then bit just as cost know some bit How the the think or improvement trajectory start should some

Paul Martin

benefit see modest in third we’re to from Actually, the those actions going some quarter.

think the XX%, QX gross about for change in and looking margin a I around at QX. was XX% we’re

a bp, well about XX and environment. think So things in there But got necessary. of and hand that’s made that the ones at improvement XX% bps terms for then Obviously, on the reductions I QX. improvement, dependent that macro XX all bp actually we’ve are further any we’ve XX

Kyle Peterson

helpful. That’s guys. Thank sense. Makes you,

Jeff Davis

Thanks, Kyle.

Operator

Thank you.

of comes question the from Brian line Partners. of Alliance next Global Our Kinstlinger

Brian Kinstlinger

And… over Congrats, Jeff. great It’s with been two you working for decades.

Jeff Davis

Likewise, of there. Brian, history there’s a lot

I long. pretty so you’re think much

Brian Kinstlinger

company your acquired when in. Remember was

to the margins. release want to So back press getting on about margin you mentioned the industry-leading -- in question I follow-up

more should we delays, you’re improve assume the is the side? cutting staff it to utilization billable that on or overhead With

Jeff Davis

It’s both.

is the billable the side, a attrition industry business. of the on Fortunately, element natural and

as take more So need we do we’re going to before But allow can that steps. we we’ll what much aggressive to as to. drive we

record both. will that, we’ve of but a a combination long track it think of got I doing be

Brian Kinstlinger

about as as My quarter, is follow-up, Great. the well your mentioned this XX% excitement suggest quarter, segment last automotive. down numbers I around think, you The year-over-year.

caused curious opportunity an what creates within the what I’m that for within So and Perficient then -- so about you excited the that makes automotive? trends

Tom Hogan

I This Tom. think hey, Brian. -- is

we I some is of part differently think also year-over-year. clients classify that

compare So not it’s fair a year-over-year.

look of at that manufacturing and indicative run was little the segment a versus we manufacturing we OEMs, a more As automotive. more

other. clients year-over-year So automotive you’re just is that’s or one seeing the up. in still comparison from what But new true the the year-over-year

Brian Kinstlinger

Thanks, Tom.

they does so And what we something it the automotive, there is Is on digital relate you? transformation? so clearly, much? the opportunity all and adopt what’s particularly to to -- with going but for Is within industry? you excites mean, mean to what push it Perficient it that the I all know EV,

Tom Hogan

seeing similar breadth Candidly, now number OEMs with few and had additional coming only the on a of success board. we’ve we’re more select OEMs and

too. families in So see bring where bring new that’s really I OEMs our can excitement into Perficient that that our story is we

I’m growth at So more we’re it’s necessarily and that’s clients space the any and why attracting what bringing more doing issue specifically. about excited on already in that It’s it. really

Brian Kinstlinger

much. so you Thank Great.

Jeff Davis

Thanks, Brian.

Operator

Thank you.

William comes question Maggie line of of next from Nolan Blair. the Our

Maggie Nolan

you. Thank Hi.

side, start there, didn’t deals particular, fairly or to were slower in in than or are there? more you you expected the by start, large share -- the clients large Any can that any any On way the materialize particular so were that widespread, others demand color maybe vertical? slow

Jeff Davis

impact from this improvement some I’ll signs to you had you because dive signs. will some more expect, comment was recent some of Tom larger I we there we or some to -- have. engagements discussions positive pretty but they modest start if about and some -- the ask broad into on as than it, expected would It’s that certainly, based, of sooner actually

been example of for that we’ve off a I off ground getting number on now we this and kicking working a as even the was is large think been speak. as delayed ones have now engagement that or delayed. an there But quarter

budget say also Tom, broad are do cuts. note cancellations, you to. we I out, a seeing So it’s delayed it’s some is -- want think, I’d based. that to than good more sign But again, in positive

Tom Hogan

deals, I excited is, front we were. are than The going ramp we’re starting, whereas the broad-based. these getting seeing incrementally additional faster some seeing and which were larger to larger of, is, about in there thought agree. of they’re we’re a they definitely in piece It’s up lot they what deals

a type statement we’re seeing station eight-figure me, work what excuse statement or So -- of of work, is turning six-digit of statement maybe seven-digit into a a seven-digit of work. work, or

decisions of the the delay. and in to future of really when kind incrementally And up then bringing ramp making start going to That’s and of have we a project into getting those. handful what’s quarters

off products, of down aren’t buy which smaller matter it’s bigger smaller features the getting they biting driving necessarily line. brings a then momentum, going, So not then are we’re which It’s projects we’re in starting. which the and

Maggie Nolan

where the perhaps there’s percentage you operating expect the some margin? bit effort ability expect drive about fourth That’s kind to What and of by of Thanks. we gross in year be maybe to mentioned SG&A Okay. quarter margins leverage that And talked a should a little helpful. then of you revenue protect and you end terms as as well. to some in EBITDA your of

Paul Martin

Yeah.

we’re cost XXXX. less to looking in SG&A close is about looking better, a to be in active because some little it we year’s and get even levels, we’re XXXX last at those going as maybe able So was back than to be to talked bonus reductions in

Maggie Nolan

helpful. Jeff, both, That’s and Paul. Thanks and and Great. you congrats thanks, to Tom Okay.

Jeff Davis

Maggie. Thanks,

Tom Hogan

Thanks.

Paul Martin

you, Thank Maggie.

Operator

Thank you.

line Our of of Puneet JPMorgan. next from the question Jain comes

Puneet Jain

and Hi. Excuse contracts both Thanks my to Tom. question and taking Jeff for me…

Jeff Davis

Thank you.

Puneet Jain

I overall like macro quickly wanted demand environment. with start the to

would that have happen spending? like to that to indicators for the suggest early on watched are you What trends improve? needs project-based to what begun that turn So or clients things

Jeff Davis

reaccelerated be bookings. it bookings, accelerated Well, will

or what the that year. low which QX adjustment bookings guidance the slowed, obviously of is in and at the would in end the guidance the miss we least So of the cause fact caused about for rest talked the

that, do down well. -- obviously, key attrition indicator there’s in way think well, not the here you’re issue and I a quite That’s a broad-based a as indicator broad-based industry.

isn’t it’s even so been to afoot isolated something and say that us here the isolated And I would there’s to industry.

just right short I outlook a and has that, improve. the say, some is uncertainty, I’d there’s -- I and and exactly sentiment caution. driving So of the C-suites that’s I is macro the factoring think, answer environment what’s the my on this And lot of to speculation think basically in now in this the the in part think

Puneet Jain

just Got large like so see clear, like -- seeing the you clients it. delaying be are to pipeline, the in or are are And they but are… clients that you those the deals of signing deals

Jeff Davis

That’s exactly…

Puneet Jain

work? ramps signed … of

Jeff Davis

out both. from signings, start ramp but And start, The impact Tom a delayed to but It’s would than that cash out, bigger really it’s necessarily the delay delayed a comes of be they as meter because slower. a pointed in want the it’s little typical, kind slower up. not

So it’s right? really two those things,

Puneet Jain

impact, there quickly, appreciated peso, versus any seems FX currency And are it the had dollar. Colombian like

margins about? So is we think should to there FX that any impact

Paul Martin

Yeah.

been done that has the those against there a is the in FX But there. as QX, -- but it, there dollar, increases -- what effect our have primarily part costs. as the LatAm Colombian are currencies strengthens peso some little So exposures with of more we had

Puneet Jain

you. Thank it. Got

Jeff Davis

Thank you.

Operator

Thank you.

line Colicchio of Our of from next question Barrington Research. comes Vincent the

Vincent Colicchio

last -- Yes. there to quarter? shift me. towards Tom. been but quarter have think, cost clear the Jeff wasn’t asked, Jeff, Congrats a has reduction versus this and this been Is it I may

Jeff Davis

keep double-digit seen quarter incrementally -- and last the bookings. I experience was we last growth we’ve -- incremental the was had third the quarter, in bookings that growth. vis-à-vis mind, And Yeah. in quarter organic mean Yes.

fourth significantly. and improved, improved quarter improved first quarter third So quarter the

Obviously, us this were So dramatically. going didn’t became of for need at cost have about started as really to time apparent reduction. that things to that quarter shift probably middle see to a we the we pretty that

see we it we the hit to obviously, expect begin little taken takes steps, do to script, time, within those So from take but already I benefits as to quarter. that this we’ve steps for sink in mentioned the that and a

Vincent Colicchio

type… you’re as helpful. Is demand referring I was a that -- reduction was cost shift projects. seeing That in But towards to that

Jeff Davis

Sorry. Oh!

Vincent Colicchio

worries. No No.

Jeff Davis

clients. Yeah. And I important at we that. I’ll don’t that. always of comment an if yes, Those seen uptick that. Yes. uptick deliver not. cost what ask our in are on an I’ll on reduction That’s projects. to Tom we’ve to that own know comment an But I we I think, our or But know let Tom don’t can if part see

Tom Hogan

would say, and materially, look There’s the when I in not Yeah. there take dollars reallocation we to optimization announced. during definitely focus the improvements it’s to of project dollars is a projects happened. been roadmap, digital that transformation at Vince, Absolutely, cost out. we definitely

But of course, there’s still in. a bring revenue very healthy to pipeline, trying

new technologies, And engaging customers so using differently. client engagement

was go takeout. a absolutely, year, it versus revenue back You more generation on cost

projects there’s there. increase and yes, takeout, they’ve So cost but been always an year-over-year been in

Vincent Colicchio

cancellations And been do coming in meaningful the any potentials any has there expect quarter? you to-date next and here

Tom Hogan

We’ve couple of No. There hasn’t a individuals cancellations. been little bit. had meaningful a have down slowed

don’t So employees, they’ve in I if see cancellations. our more of those not not having. to we’re cancellations, Latin less here shifted America, the wood And but U.S. any India team in quarter, conversations are on project or help some

Vincent Colicchio

one. may over One it’s but early on impact AI I to ask, efficiencies from any thoughts generative business how last your time? coding assume

Jeff Davis

differently with we using testing the things to do applications. more generative basically as There look internally around conversation are you use Right differently development is at and nature. with interacting but It’s really more what life interacting that tools, on the of coding, to mentioned. things cycle on customers, not we’re can early, software now, some AI

with now, it see your But use So goes. customers. we right with And technology else it lot versus code? nothing our all see conversation a playing it’s really generate if conversation the to of more to of point, how interact to early. we’re the about differently Is think, I to we of how this it where

Vincent Colicchio

Jeff. Thanks,

Jeff Davis

Thank you.

Operator

you. Thank

of Our line of next question the Goyal from Divya comes Scotiabank.

Divya Goyal

fair the about baked you client or this can that Congratulations, Tom. Talking visibility what into see is to level can assume have this we delays demand? already of we Good in it potentially more have cancellation or new your understand been I Congratulations, guidance everyone of morning, demand quarter And Jeff. here, sort coming in the is ahead? that to wanted any --

Jeff Davis

I’m dynamic, dynamic, answer is within this that’s that economy maybe very right an part dynamic the let industry second I’ll earlier. Tom Yeah. within going a to business, an dynamic now, the as then part. address very I But first and of that’s mentioned Perficient’s

So things and one the can seeing change we’re pretty of that, not rapidly course. only

certainly So take. I’d caution than answer, more Tom possible, let we’ve we say Tom that has baked not you a more that so It’s impossible the think. broad-based or it’s in. but add, But believe better it’s got we anything we specific think. second to It’s want also I’ll half than to else

Tom Hogan

year, I were Jeff the the we and look making think, last decision for at Divya, booking our mentioning using for we like. what results, that sequential the as and future quarters as quarter regarding would was look

the this Using for But of the right dynamic. we’re we our with as same and level have information customers, QX, is we we’re that for we Jeff think know seeing directionally about think data we we conversations the correct having, now quarter. all is guidance QX, current what the that the mentioned, know conversations in

But second the I everything effect of we’ve think, as in way it we change couple Jeff dynamic but to of another, half the it’s could takes months the or into one look year. learned last as mentioned, and

Divya Goyal

No. That’s helpful.

Jeff, I wanted to I thing, So, heard reconfirm. if it one right,

look When we sector, pressure about increasing. we pricing increases. You been customers with did rate the mention broader at that the the the hear have okay

on seem some little two contradictory. color could on seems I’d appreciate more -- thoughts pressure increases a the just if rate the pricing provide business. these versus the it So you

Jeff Davis

Yeah.

I items value, over high last really portfolio high we’re We’ve the think that’s the years of that testament to are several those high demand, delivering. work a the to shifted the ROI. that value

So clients’ deliver they’re to that we that things meet level, so them, quality. deliver are terms market timeframe on goals to that critical trying meeting and high they of they’re understand it’s critical the to because that with and deliver in time also tolerance things these things

to to to and the little record both a things track on clients get proven don’t it. us those mind ability do they a got we’ve so of that and of more paying us come demonstrating rely and to So do

Divya Goyal

color. great That’s

you’re Just Are one to any you last if to to demand change offshore saving it when up enhancements at towards comes seeing question for that and cost seeing and versus the to onshore understand was seeing the up? trying all the offshore reshoring in picking initiatives pick or me. nearshore, continue business? the dynamics you nearshore I are

Jeff Davis

respond I’ll let Tom to that.

think got we’ve dynamic Tom I great but I’ll a there, going answer. let

Tom Hogan

Yeah.

India out depth continue liking Latin our to at see to or this, the have Latin the America That’s also individual pricing to India We we story. we’re it’s of as sacrificing to least we talent the and you Also organizations delivery the pressure. America quality built or also global around is world, ship how not to able maintain ABR.

America team. sacrifice for or our ABR as leverage our to ABR having India U.S. our Latin in versus looking reduce teams we to we’re So clients, on

clients we’re majority of be. that’s reshoring, are but for the we have situation to A pendulum that, as interested organizations say the in forth, definitely that global far As looking organization always right goes see. seeing. the But now, I’d back that not that dynamic of and will been that continue always our in that couple

Jeff Davis

to Just one more add thing there.

North some we’re feedback we than at from brand from I’m for some the even together of household we’ve any a bring Fortune got Tom names sophisticated and As more clients the And to is can highlighted, to best the deliver one your fairly about India, LatAm, that a those least we’ve we in those that talk of capability large the team, and industry. customer. regular XXX that value geos got talking getting integrated cohesive the fact there that the companies best of a America, strategy better had on basis

Divya Goyal

a for That’s everyone. answers know. lot good to your Thanks

Operator

you. Thank

Maxim Aarde Our of the next Group. line Vander Jack question comes of from

Jack Vander Aarde

leadership guys. yet morning, M&A next think on Congrats that’s during call. with a Good Tom this on don’t roles. question to I’ll your just start Great. address Okay. and going Jeff the front. I

any mentioned just second acquisitions M&A updates acquisition on strategy any you’ve to into And that the potential Thanks. head XXXX. changes as past? the So we half in and the overall of

Jeff Davis

Yeah.

a due industry. game high. in uncertainty planning really -- the fairly the valuations the there We’re some to are slow Obviously,

play picking we’ll intended So play couple have right early to to of a looking said, ball moving we’re slow out. of do use game strategy. part we probably, bit those M&A the overall make carefully. our along, want little That sure But, stages, how along, of as Still see now we a moving at in but we’re yeah, a that that firms there. a we’re

Jack Vander Aarde

overall then kind Okay. Great. And I contracts, cycles. of sense contracts, there. of the to general back pipeline color customer just and sales appreciate the larger just

level Just your you potential deal of would during comfort cancellations in were looking and levels maybe of a and pandemic -- cancellations forecasting risk your conversions or pipeline and two most the compare and at of what with year visibility contracts. to ago how you maybe risk

Just we what’s where compare, versus outlook maybe a your you ago? are couple your level, how today years of would

Jeff Davis

say getting way, of a in obviously, that I pretty manner. would gross It’s see and substantially. actually we’re larger still It’s pipeline the on that Yeah. those pipeline again it working I would getting a some up, matter remains even the deals them by strong. closed closed there. and seeing timely than and like to improvement is, the

starts, terms So bit waters some some what hard really predict. we the before, are visibility, to mentioned been is What delayed what’s these these has muddied a just shifted, as similar that to in is of it’s starts little that of always I is think, slower outlook. of obviously here

our of are They atypical experience.

can. of measure earlier, predict of I we’ve again, difficult Again, But it’s -- quickly. second the we that half. things can to in it’s a baking those. done pretty we think, change good a So pretty mentioned as It’s cautionary job for much as as

Jack Vander Aarde

to roles. Thank there, new I Great. appreciate Okay. guys again, in and congrats the you color you.

Jeff Davis

Thanks, Jack.

Operator

now turn would I remarks. you. to Thank for conference the like Jeff Davis back Sir? to closing

Jeff Davis

not still Thank will had Yes. for your anymore. XX years. for And years all today in XX forum last around, this I and that all the you said, be in I thank role, as but time necessarily this you I’ve

days. and So all. speaking Tom fun. Paul about sure look to forward It’s you thank in I’m good you XX to

Operator

you for call. today’s Thank concludes This conference participating.

disconnect. may You now

Perficient (PRFT) 27 Jul 232023 Q2 Earnings call transcript