G - Earnings call transcript Q3 2017

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Operator

Good day, ladies and gentlemen, and welcome to the Third Quarter 2017 Genpact Limited Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time.

As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Mr. Sachs. Roger

begin. may You

Roger Sachs

a Good call and for to XX, was and IR section posted you Chief ended and Tiffany. our third the Fitzpatrick, Chief to With Executive website, of Tiger are Financial the quarter September had York our hope New Officer; We earnings discuss XXXX. in to afternoon, today you, to review welcome Officer. Tyagarajan, earnings which everybody, Genpact's our quarter chance Thank our genpact.com. release, me our President Ed results

for Our agenda will closing as you the for follows: Tiger come greater results, back provide financial will on and overview your then Tiger discuss update then comments year; level quarter of for update today for provide the and in Ed outlook detail is will some we a and questions. financial will performance high initiatives; then take an our on our strategic our our

these an to said, transactions just done the the provide Tiffany underlying January in included As consistent X, occurred XXXX. release. to actual divested the our This growth discussed these view reclassifications was of today business. of to are Client of growth GE impact revenue adjustments about on a we note, include of trends Global The the the if without call as results our earnings the year-over-year businesses rates Capital last hour. expect Please

and set forward-looking from in will actual release. such our factors matters cause a the of that in are statements. in other materially Such are discuss of those to we call and forth number forward-looking differ results forward-looking. press uncertainties, Some involve today's uncertainties These risks, risks statements could

and measures, business. today, performance to reflect we the better operating of information during which the investors will for addition, financial refer In management believe the way provide we views additional non-GAAP our certain call

And in our IR can You in section our of release GAAP website. these to with me Tiger. call turn a to the that, earnings the over reconciliation find let of measures

N. V. Tyagarajan

joining Thank you, for Roger. Good third our afternoon, for earnings everyone, quarter thank us today you and call.

Client chosen third to Our the our was Global most than Clients. comprised fuel analytics across of XX% verticals. of for more Global digital services revenue balanced Transformation quarter and year growth strong XX% industry constant and BPO our continued consulting, of momentum grew for currency

mobility, Specifically, from clients including are increased with currency brand relaunch We basis. a Global response during XX% traction BPO and revenue led in year-over-year. Global margin intelligent the our thinking, basis. looking cloud-based constant XX.X% was positive XX% well with manufacturing, Client chosen basis. for strong to revenues sciences. also and domain as the to happens Client XX% increasing excited are revenue on growth am the $X.XX, most XX% was coupled expertise key solutions, on "Transformation to a adjusted Global acquisitions The constant our domain This Automation tagline, Adjusted capabilities on technologies design workflow platform, constant a quarter, income deep total of really insurance, Cora life lines by was EPS verticals, growth our currency high Client tech here." across CPG, expertise of banking, revenues. currency revenues Client XX% the transformative operating technologies. incorporating are currency BPO and targeted constant gaining in service increased increased Global and process AI our our AI, our in in digital market. deep in all Genpact enhanced the the increasingly resonating I Genpact

Client XX% vertical digitally-led during by with the as Global our the growth. representing the BPO in as year Finance Solid Client on Global services basis. and industry intelligent contributed and exiting less revenue XX% the quarter demand declined up ITO growth during more lines anticipate digitally-embedded our in constant-currency transformation our and strong X% GE total driven quarter. accounting to we nicely for was a continue core run-rate that the grew be operations. basis service well than GE led solutions a to by of quarter, on operations than company also XX%

As expected, of improved first trajectory the from the half the revenue year.

continues significant committed on of While to partners GE value. them remains transformation its key journey, we as relationship our strong are helping strategic their drive one own very and

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operations expand very we re-imagination to relatively these durations they smaller end-to-end tend hand, engagements new completely cycle one see as AI bring analytics of These sole-source larger the clients digital business. embedding and size transformation about embrace and think deals clients faster as ways and be often into services doing shorter On that that in redesign. wide-scale having into times their

of change in standardize and into where to remain deals other On become seeing new more and by looking large to simultaneously operations models to are hand, agile we a genre future. simplify the business to competitive they want order propelled clients the their now

to from deals while just services leveraging immediately digital a come includes in smaller of and analytics undergo the them. that transformation full-scale mentioned, transformation motivated these engagements I others of solutions embedded Some are who come out clients

we chosen Genpact unified to Cora, ability automation, single is is engines mesh demonstrating of flexible to values a Leveraging recent AI all and five received fully have well analysts our first and extremely is to than As total in We deliver million. the by Genpact we launch platform being to which with greater the a significant integrate Cora, $XX contract marketplace of deals modular AI verticals. our believe across our our digital interconnected platform Automation comprehensive in a technologies, firms. research Genpact clients recognized and leading Cora, value year-to-date, are platform. The result, signed analytics is new that

using replicable We bundling thinking creating re-imagine consulting domain are this and solutions scalable clients' their by by with address deep doing transform and digital operations. completely critical analytics problems and together to to design expertise digital

As a result, are top we line. new seeing many to grow opportunities our

helping institution, reduced course, is and, billing dramatically in a at examples time, cash disparate commercial elimination workflow, significant financial insights commercial we life using response. now processes combines standardize of to computation language of markets new of review products dollars AI, of Cora cost savings. ARFlow line asset implemented errors, and experience, machine customer A as we LiveWealth flows, to AI, U.S. of LiveSpread, customer of from lower improved and clients billing, delivering using are in improve tens our grocery different millions using Cora processing few leading with chain of specific the global loans leading identify A share of bring value. leading winning automate funding firm, Cora natural number bottom contracts from significantly the transportation and Genpact the generation large inside language billing global processing Genpact rollout hotel the that real-time dynamic reduce process. to This disputes linguistics XX client which areas and how the is cost accelerated thereby, business. underwriting financial to natural account of customer to to data reporting me Let generate institution service is Genpact of and entire underwrite well more large impact. emerging sources and across they Genpact and to to specifically number predict languages, quality outside To to hospitality improve as business automate A able over are the learning XX and the gather to and resulting leakage top recovery Cora's automate a

and we long-term intelligent more engagements. the grow can the are transformations. win that we digital-led our we the to open the operations Importantly, the finding grow intelligent up more solutions, digital-led opportunities our win more compete we same more time, win operations, At and

right and technology represents management is as by life improvements. We clients largely that potential services with part and supply leader have this our lines manual as high-tech solutions not today bringing had within to manufacturing an the planning, we As strategic one CPG, a to believe clients functions innovative service for add a market of end-to-end value are area identified real for platforms driven a current and our Supply chain digital as domain-led reimagining solved to end-to-end scale. redesign the industries in non-standardized largest we processes. huge outcome chain opportunity to sciences, of

a in supply Group, drive a supply transformation top chain in The digital recognized as reflecting industry to our fact, leader Genpact strategies firm, operations. In three leadership noted research analyst management, in Everest end-to-end recently chain

in entire drive order for demonstrating their to addressing tangible revenue CPG global and embed represents new We partnered geographies. engagement we sets the We've our customer supply supply to driving new supply client management aimed chain Center jointly transformation client's an and Excellence using won planning by transformation recently a The model in supply positioning redesigned performance our and also digital focus. are to a and the significant established basis. to throughout rates, we chain fulfillment visibility map create into and and categories. is By to-date industry. the our Genpact stage to satisfaction example, disruption drive functions unveiled chain. client deal expertise, deep for acumen across This fulfillment run For them across helping to the inefficiencies process road a levels on ongoing designed bring industry largest and in provide chain transform our client at transformational supply U.S. with advanced improve XXX% supply Cora their brand multiple into the real-world digitize operating and large-scale, subsequently operations of analytics the chain higher and engagement long-term improvements

using customer with Our highlights experiences. business deep every clients with domain drive and our that Transformation expertise. operations, "transformation with their transformative digital technologies outcomes people and with process here here," their the happens their day tagline, new we happens advanced and

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Our at at key engagements target events led evolved many accounts. participation to leaders has key of our senior industry with meaningful

mobility over the two capabilities years in past significant digital added have Our dynamic cloud-based acquisitions workflows. AI, and

U.S. in vertical. added insurance also our depth onshore We operations

process to design transform to TandemSeven, our enhancing working As and The from to a a portfolio, TandemSeven's end-to-end customer critical and ability company, digital middle our transformation. by front the is of with complement acquired global digital our recently ROI of and and operations we business which domain clients' extends Genpact's designers addition digital back-offices, thinking maximize consultants, experts technologists capabilities. advanced team connecting to experience innovation

Additionally, TandemSeven's proprietary UXXXX, customer platform, journeys and data. using experience benchmarks customer models detail design cloud-based

allowing recent integrated acquisitions accelerate strategy. expectations our our for to have with and driving clients our across time-to-market us really new well our to businesses our all line of solutions, with are The key various verticals. teams, our in innovation our All with aligned

focus of discussed that ITO last with As business Consistent longer deep that continue IT you our we to divested thinking, European fits to subsequent a actions end small we with our to to strategy. on legacy the areas realign third we our this take domain connected expertise. no with quarter, portfolio quarter,

year current more advantage, over of to better we it sharply Ed data review resources, While the competitive me risk that, banking detailed lending. and leadership this bandwidths allows engineering well more deploy as capital opportunities call year such markets us as a and on to where higher capital and strong commercial and revenue, growth full and expectations. quarter has have a divestiture let marginal define we as impact With believe our and to the turn including for leasing areas

Edward J. Fitzpatrick

XXXX an Thank financial you you, expectations. full with detail afternoon, quarter Tiger; Today, update with you provide provide and our good and everyone. operating results I'll our more to year third on

our up our business During of and process constant-currency revenues expect of during margins currency decline on total X%. services total constant-currency to XX.X% revenue, XX.X%, favorable a IT from from improved the services support year-over-year. Tiger X% year-over-year on of of more increase Global quarter Gross third increased consistent a in constant-currency XX% business $XXX Global an earlier. and for the corresponding revenues, million, Clients, Client XX%, our the basis. XX.X%, our revenues This or Clients, year-over-year and was XX% the Global XX% to last divestiture to revenues, European service year-over-year approximately revenue were grew year. of the GE XX% increased of with third operations total quarter, from currently charge with expectations. includes by related XX% revenues represent we while Global the non-strategic Client XX% third $X a Adjusted increased generated quarter that to Client income a declined led on year-over-year, a year-over-year represent quarter BPO XX% We revenues, the XX% represents the increased now IT $XXX revenue. Within approximately IT increased year-over-year basis, which Global XXXX. which of X% constant our we're basis, million of Revenues total than XX% mix. a quarter or million, mentioned meet by XX% total or leverage XX% track outsourcing XX% revenue ITO of growing on up basis margin due sequentially Overall which full for representing transformation year on revenue, X% total third full-year while

of compared gross quarter margins. in the fourth gross expect million SG&A year. be million in XX%, third to totaled to closer $XXX expenses full-year $XXX We last quarter margins line estimated our to with

quarter as Our by G&A transaction costs approximately by percentage the by partially X.X% and in sales expenses, including related increased and Total expense, same marketing to compared acquisitions, driven points of year-over-year, to a operating revenue, basis recent offset stock-based was as the G&A sales, percentage a roughly flat efficiencies. year. last XX compensation, of higher

income costs year. as compared acquisition-related about well Excluding of is EPS a by year-over-year compensation, as expense increase of $X.XX, would stock-based the and re-measurement of higher offset $X.XX, was partially driven $X.XX $X.XX of expense non-recurring to percentage as be gain $X.XX quarter activity $X.XX foreign G&A a primarily year-over-year. operating higher share by $X.XX of flat repurchase Adjusted revenue exchange last interest The share. per for total third

to the returned current approximately of per third of the During that quarterly to regular equates we in of quarter, our approximately $X.XX form million shareholders a yield X%. share dividend annual $XX

due our third compared Our third primarily certain to year. rate during XX.X% to is the effective items tax the quarter. XX.X% the last quarter in decrease discrete for quarter The in was tax of recorded rate effective

totaled the cash flows. quarter continue sheet existing our execute balance Now pursue third capacity to $XXX million from our opportunities ample of Cash $XXX let flexibility undrawn to of $XXX XXXX. growth the and million and up debt With and balances, at turn cash end we to million, strategy. have allocation me capital and on of cash equivalents

quarter the X.X million debt we Our rolling decreased during total the XX-month EBITDA by $XX from turns quarter. trailing our and during net ratio as last turns reduced from to quarter debt-to-EBITDA X.X improved

outstanding days were with sales last Our line year. in XX days

third days to with to year, the of in operations year-end. We to in period $XXX XXXX by DSOs our same of X.X% quarter during third the as quarter the delivery in percentage generated million line compared two X.X% expect XXXX third million cash of $XXX XXXX centers largely in We global quarter the assets. compared to expectations. last improve our three during revenue by of to from were investments of due of a primarily digital the expenditures Capital expansion and

on approximately to X% We CapEx as to a be expect continue basis. percentage of full-year X.X% revenues to a

total me visibility outlook a With year, the update full-year for full in XXXX. we revenue be you only into greater for now full-year quarter remaining the between expect billion our year prior X% Now billion our and the $X.XX during $X.XX and outlook let approximately have including to $X.XX the growth growth. to billion. range up of total on for the deal now billion, year, $X.XX approximately of expected to Acquisitions a constant-currency contribute from represents TandemSeven basis. This recent X of points on are

of euro, the expect impact top to now approximately expect of the Given currency foreign $XX of points, our We of adverse a approximately exchange XX% recent end XX%. on appreciation expected the a our approximately line grow XX the BPO assumed dollar grow from Client XX% to million now quarter. revenue to pound, British range we prior prior X% on XX% as compared and Global of now to we million basis $XX Global revenue basis down or the the constant constant approximately had in versus Client of Australian by second expectation currency with estimate approximately full-year a basis

margin operating effective XX%. of We XX.X%. our adjusted to approximately be at with XX% remains Our rate XXXX now approximately income rate expect in XX% line tax XXXX's to expectation

rate average our the Tiger the year-over-year closing to me impact. for FX back per There $X.XX, no Finally, full operating to earnings outstanding overall full-year income, the is over due let assumption to and year. remeasurement weighted expected $X.XX lower $X.XX and for up turn expected a is from prior his estimate to that, adjusted between higher now for change $X.XX of be our shares in With the expected share improved call tax comments.

N. V. Tyagarajan

Thank you, Ed.

our our of us process design reflect analytics and drive powerful words positioning and operations digital brand and to uniquely happens Those to that are Global Client reflect positions to combination the current flowing expertise, transformation our intelligent businesses. marketplace along new solutions higher broadcast domain with services the thinking, belief and to traction line three in for here. Our that through full Genpact's expectations the revenues momentum The in seeing digitally-led the transform provide seeing year we to transformation marketplace. are client in top we

relationships demonstrated clients which We across very Promoter providing that bedrock and our our our with the on have and outstanding of Scores. consistently high built deep Net is trusted all service, delivery of been verticals in have

and more digital journeys. We transformation (XX:XX) on viewed are as more their being

teams, through organization, sales across Over leadership the last experts have deals. both M&A targeted our and years, and domain be we not analytics significant position organically this added three teams our rapidly and digital our and our pleased serve talent call turn could world. marketplace Roger. more to current I that, the clients with back in I'll in With to the changing consulting over

Roger Sachs

now We'd call you your provide Tiger. like open you, for Thank to Tiffany, our instructions? can questions. please

Operator

our Keane from question from And Bryan comes first Bank. Deutsche

line now is open. Your

Bryan C. Keane

Hi, guys.

it's couple a been first popped IT a reversed you there a little about the in talk GE strongly is from there what bit quick ones. guess, revenues then I side? Can obviously quarters. several Just and for the outlook had of the on is decline question – just I that GE the IT what pretty

Edward J. Fitzpatrick

the of dipped GE. remember win certain a quarter Yes, still in revenues GE we aligned still were, consolidation for for expectation with new GE, year. XX% is we what to the if the we full where said some full-year And our work that remember, about did range. we with were we that XX% we where we you talked in the talked about timing We're down think, I due efforts that bit second to

that of in itself kind the third quarter. corrected So

Some of that transition-related.

spike the the third revenue a saw a the normalized for with you bit level So to what expected year, more fourth of we such you kind GE get aligned year-over-year. for quarter that full back in we in of are quarter, a

Bryan C. Keane

$X.XX. $X.XX then were in decline range, $X.XX, at Okay. And guess, now, know in I third earnings somewhere $X.XX full-year means a where that be just to looking that from I there'll earnings, I sequentially Street the then, – think the the was in at that and we

maybe pieces about think to we anticipated. to than a So bit margin fourth causing little some about think just there quarter moving that's in trying Thanks. lower the

Edward J. Fitzpatrick

Sure.

pretty the call, straight of we color down break forward. So but lot a it the on I'll for gave you

will than we year. lower, So said line our below maybe you just higher XX% revenue, QX be in calculate Gross be with can bit a XX% margins full will with revenue QX. approximately or

fourth dynamics So mix to gross are for that quarter. margin lower percentage few really a the happening and a other mix of due on there bit revenue the

one So it. piece that's of

$X.XX, XX% currency that closer such I couple of about which big a re-measurement rate that favorable of or the be by roughly talked tax full being about, $X.XX, higher non-strategic the other XX% to the foreign impacts, of the as Tiger spend of marketing excited are business after, year IT The be pieces divestiture a XX%. And impact and we quarter. thereabouts, will cents is And that the that you in we tax about. about, big rebranding a – to that do rate dialing we're will are heard fourth the our to then, typically talk related up we're really the going part

laid So EPS spend will at that talked full for just what should for $X.XX out ramp a about all I year reconcile the we you. about to such with that $X.XX

Bryan C. Keane

Okay. then, just obviously, coming it more finally, in in a pipeline side. just feels just business and along Clients well general, Global the the Tiger, pretty healthy, is And

Thanks we're look out feel into some that of continues that As momentum next so here in XXXX? do much. year, seeing like this you you

N. V. Tyagarajan

believe Bryan, won't. it reason to So, no

how at look they no transformation, there digital you that question globe. and every across actually world do most our and in broadly the how looking drive macro-environment, chugging do to the they data If clients along the given change And that's it of is happening so all and industry seems in at is on. be of

two the we to Cora solutions taking have is that of getting market about, With and engines started domain the our which to very confident and we we kind depth expertise, feel talked Genpact et of to as two to them annuity the contracts. digitally-led other, each connected solutions large transformation One are client And the other. drive through well as cycle, the help to cetera. long leads

year, next model, year. business about and, feel we will therefore, very good feel close about So the the good very enter how

Bryan C. Keane

guys. Thanks, color. the Appreciate Okay.

N. V. Tyagarajan

Thanks, Bryan.

Operator

Fitzgerald. And Joseph next from comes Cantor Foresi our you. from Thank question

Your line now open. is

Joseph Foresi

Hi.

mentioned the the wondering, inorganic you business, better inorganically. was know guidance? in X% drove of contribution core But I performance increase what Was it I a the So or both?

Edward J. Fitzpatrick

the think I three it's that mentioned is doing business better. Joe, organic we So, call. things the on of The all

So we're the that at – for the before, say gave of the as end we that now year. as range in at full I range look we're we viewing high would that

The other the are as doing being contributing well added as which improving items a increase, better. a And made combination third just what to the the FX prior now bigger of that a quarter acquisitions the we've are is we bit in that's part. well as as the acquisitions even

So it's combination a three. of all

Joseph Foresi

Got it.

can you Okay. will on that us done you IT in business grow And divestiture did you there, Are I business? And the that do XXXX? think grow update Europe. in the will cuts the – know

N. V. Tyagarajan

be, One intersects the other call. with technology the are lending. So, actually and identifying quite the that for the have that in two management consistently banking areas those domain capital with in example, in those we've the realigning out depth. And vertical. of calls our a specific few ITO Joe, out this commercial stated that been in markets these our We identified where around on one for area And we we've realigning called focus IT, our and of that is areas leasing bandwidth. our objective would intersects risk actually area has commercial called business, of resources,

that IT that helped that we that And think the forward. directed directed to, Just towards. focused have have take examples. we'll business. We And investments stabilize that identified our of it's two similar resources stable we has set platform areas a sharply

organized. good now we the about way So that IT business feel is

Joseph Foresi

profile figured try. it. lastly, And then, head GE we the into on Got I Thanks. year? thoughts just any I'd as margin next and

N. V. Tyagarajan

said with tend think always as nothing to of continue tends at innovation. the can agenda, have. out. GE be transformation edge do the some Joe, to GE with value the the to we strategic GE evolve. own We they're And We've its solutions drive to other continues we of continue developing be with new some them. leading of relationships continues adding to on focus innovate our that to Those call participate partnership way that to our we to we in as

what perspective. the way from as a about means feel top as for from both a good So well and both it do that our line margin will business we

Joseph Foresi

it. Got Thank you.

N. V. Tyagarajan

Joe. Thanks,

Operator

question And you. our next comes Bryan from from Thank Bergin Cowen.

is Your now open. line

Bryan C. Bergin

guys. you. Thank Hi,

N. V. Tyagarajan

Bryan. Hi,

Bryan C. Bergin

you about new you Tiger, clients, that can think deal the that's the large both what relative and genre year those is to even on when and give the size can the you sense how of seen a whether comment in us this scale time? you last in past then, deals, mentioned, existing of you've

N. V. Tyagarajan

So, Bryan, question. great

so split existing clients. industry. So it's the between clients not of say, a new equally function I would and It's the a function much of client. Interestingly,

the with strategy. in function their it's You are, industry. fit have every clients a transformation their on who And their of are jumping they who leaders journeys do what is agenda, how

would say They is chain followed on services larger couple transformation are transformational complex. By it was be size by end-to-end are average and, these, therefore, that these definition, around managed I more That of supply complex the of are back. years chain. than are to supply have they encompassing. a complex. more end-to-end because scale be and were them. complete global is more one they in therefore, to They of tend very them, a they expected, described deal, CPG the I just of terms they that a embedded company. much services In a But large,

Edward J. Fitzpatrick

to them pause flowing see again. five of deals. to in bit we good this large last Tiger see nice Because It's deals a larger is had them again, flowing about year right? terrific. talked It's year, which

Bryan C. Bergin

Right.

embedded other advanced is more automation that that commitments about as in the what contracts and adding the are then, And tools, Okay. being new you're how productivity digital changing?

N. V. Tyagarajan

those customer pretty ecosystem of higher partnered as their much them or as productivity. players, as is of that available, drive that much more sophisticated I number number number because loss we've outcome must share change game better to acquired, outcome fourth that outcome solutions, digital clients, actually hunt. of of into we at have and market the the become a in a digital drive deals we've often approach technologies, those a our significant third are a digital improvement, actually built obviously tend a increase, drive you satisfaction, working though, number said, capital companies that the outcomes, look while it's our available. approach number actually And say they That's faster a and of these more around digital a technologies reduction, outcome, great around embedded become price growth, these bigger space. is digital much we've and most of And that undergone ecosystem deal you bringing in cost be means improvement technologies you and that with you

Bryan C. Bergin

Okay.

As now deals, your outcome-based at of the those is far as least in how or the much pipeline? portfolio outcome-based,

N. V. Tyagarajan

All can them now process that Lean all We've had components actions improvement, and are from driven that and in have always them. the now drive share share and digital insights them those by also there. except it Six gain gain have they Sigma components process improvements analytics and and driven just redesign, of not by outcome

only not extent our it's actually I deals the color there don't of to think industry always gone as in changed being the So completely all we've think deals been. it's have there. the they very flipped that to and pervasive I has has outcome-based. gone don't

Bryan C. Bergin

right. Thank All you.

N. V. Tyagarajan

Thanks, Bryan.

Operator

question William Blair. Thank next comes from Doradla Anil our you. And from

line now open. Your is

Maggie Nolan

the hoping Anil. made nature that of color for This more magnitude the of you us give on was a and divestiture is little Maggie Hi. revenue-wise? the I could Nolan that you in

Edward J. Fitzpatrick

Yeah.

next-generation that as of legacy focus orders that one Tiger on efforts of our So our to million about made and we IT just had non-strategic these team's dollars that magnitude sense. business per business. couple a it support solutions, just And efforts a quarter, look mentioned,

and management perspective. top a focus, better small So focus growth from line – impact better to

Maggie Nolan

wondering Okay. supply Great. space And mentioned the then, of in your What's I in was the chain what's as you the about services remarks. opportunity? well? And magnitude like then, that competition that prepared

N. V. Tyagarajan

is it's and at level, opportunity. opportunity would the actually of bigger total actually massive. magnitude argue pretty The finance as accounting some that than One a

to Now very solutions trying of find chain industry these in types early are these supply the days the arena. of

manufacturing core products whether consumer company, of XX%, company chain. XX% manufacturing or typical a spent a take revenue you it's is it's supply on If

trajectory we supply And services So the building long-term verticals I think the massive. leading named. that just one the of in opportunity are becoming in a is providers very around we chain

Edward J. Fitzpatrick

Tiger's large about the TAM. is we about one of talked opportunity the The deals. talking that

is and terrific deal as we market large well. think So

Maggie Nolan

And that in great. the space? Okay, competition

N. V. Tyagarajan

services solution for clients. base, end-to-end all and managed cost right long all and of for think this everyone the and It the our typical to all consulting firms. our trying large will such perspective, is that start the that manufacturing it in and suspects, usual includes the get nature usual into it's integration obviously It's is their building system important global trying space. to space technology players, a very so is It from customer by satisfaction It growth for term. companies where again large the a to have find space, include companies. a includes and transformation we the for the that revenue consulting competitors, CPG a We the good

Maggie Nolan

you. All right. Thank

N. V. Tyagarajan

you. Thank

Edward J. Fitzpatrick

Maggie. Thanks,

Operator

Ed And from you. comes Wells from next Fargo. Thank our question Caso

line now open. Your is

Rick M. Eskelsen

Hi. Eskelsen Good Ed. Rick for evening. on It's

client all large the With front-end, on are able that to was Just these the push of earlier. deal last And that made going guys you asked and following couple deals? seen really the in it change years? question over is on a investments shape agenda the you have internally on the you a question still function Or much what's clients? have of within large up how how the

N. V. Tyagarajan

transformation at it of subsequent there's Having That's shaped they question of those the such be. these said of best answer, right than get that There's to more that enterprises automatically these then of the transformation ever are which to shape large involved competitive that tends a that, used managed in no sometime in we been engagement we've services seen. nature that to then leads sure be So forces shaping engagement, they but shaping. which to clearly, consulting-type a start they more we have with make would why tend are are bring time number conversations, the the than the services, agenda. these to

Rick M. Eskelsen

then, on if both side. talent the you going? where the out market there puck And existing see just including more on you're side your retraining new is helpful. of sort the then, in in doing That's about digital acquisition of – terms talent, the areas investing, a what the towards and moving follow-up you. could Thank lot also a the them and finding you of Maybe the talk of in workforce

N. V. Tyagarajan

clearly, companies the talent. the important. as within kind it our out whether companies of or being very every digital surprise, in end talent. for one for I extreme Clearly, war of that something would And industry. both They're the arena, call digital, is war there or artificial intelligence like a think high-tech a don't is at it's

programs. ability to And retain a far certification is been number And then you on programs that of think finds actually opportunity of we it just we that on domain actually I just training true can finding talent get to think are can actually of good digital working that, across us and area play that it you that at level. a at attract inorganic doesn't you a getting to that We've talent here our often both organic as you level delivered. that. have out M&A that value. hinges the an And are We've training doing then whole value to great as We always to we consulting, very is opportunity life someone see leverage AI. as technology the the concerned, and the them and deliver including add a to range at with to competencies so expertise where have like our and stop bring competencies. range added leveraging digital that real historically

Rick M. Eskelsen

very much. Thank you

Rick M. Eskelsen

Thank you.

Edward J. Fitzpatrick

Rick. Thanks,

Operator

you. Thank

comes question next from from Dave Our Koning Baird.

is now line Your open.

David J. Koning

Thanks guys. congrats. Hey, Yeah. and

Edward J. Fitzpatrick

you, Thank Dave.

David J. Koning

Yeah.

the all, at growth sequential. GE here, of right, kind little normal. I IT what we're That's and actual guess, than when down Client little first is the normal And stepping sequentially Global business? of the looking it's first down, made so very at slower about Global the in business you growth a about Client given the up QX looked X% growth I X%, basically underlying stepping comments a is guidance, core strong and very But good the normal, then,

N. V. Tyagarajan

You just described it.

Edward J. Fitzpatrick

GC quarter right. some XX%-ish a down. and think also steps you GC it IT GE we because BPM deals growth heard does down (XX:XX) you bit, us mid-teens, third about lumpy talk there. step – had good. get second in the quarter, I

So that's right. exactly

David J. Koning

Good.

that Okay. way first been then, I to $X size, all three the the guide mean, And that the see – really looks – due like you it it's the Client sequential to IT away? Europe, it year just when IT of full so quarters be drop-off, business trying going guided Europe the roughly. the down understand sequential flattish you've Global size annualized drop-off, divesting, X% the for that and still IT mean Does you're million or that business that is to is the can business

Edward J. Fitzpatrick

a did quarter, couple divested drop lumpy be that is couple which of were deals second higher. I million Yeah, so caused remember, business, third but of say quarter, there to then, a it

lumpy, done; deals quarter I that recur. we had third It that stepped second think we due to was were first up was few they expect that and don't lower a to actually.

seems on that based So right visibility down about right. X% now,

David J. Koning

you. Got

one-off a there XXXX that as should that normalizing think the on this or of to good this about think anything when we just was last very positive there start either for we side, next year little to Margin in think – and Okay. start we that then to progression, to Is bit year. about then one-off anything comps, And quick year, the us margin? is the negative thing.

Edward J. Fitzpatrick

I were but XX% to pluses is of a be. minuses this think and place about not there year, an lot unreasonable

that's kind I think... think where of we

N. V. Tyagarajan

gross about margin. You're talking

Edward J. Fitzpatrick

Oh, oh yeah. gross, gross,

journey and said I so Tiger's that dial or the so it extent pressure, to the on we've that capabilities doing, investments, we been flows, that over to is I opportunities that our the – – the think operating margin been view we'll XX.X%. what up here. at time we this dialing been years. whole – guess, down about on up demonstrate the was able gross few gross investments talking So We've the the all we've have past exactly margin's dial that's And and what been flexibility

Yeah. So of that. the out nothing and we're ordinary managing

N. V. Tyagarajan

direction. In Yeah. either

David J. Koning

crushing it. are you Well, guys Thanks. right. All

N. V. Tyagarajan

end. That's a way to good

Edward J. Fitzpatrick

Thanks, Dave.

Operator

And you. Thank time, back call host for I'd like showing no turn your this And in to the further the remarks. at I'm questions any over to queue.

Roger Sachs

you call everybody speaking on Thank look joining us next with Thank you Great. again and today, quarter. for forward to we the you.

Operator

participation your you today's gentlemen, in Ladies thank conference. and for

a You disconnect. may now have Everyone, day. great

Genpact Limited (G) 7 Nov 172017 Q3 Earnings call transcript