G - Earnings call transcript Q1 2021

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Operator

Good day, ladies and gentlemen. Welcome to the 2021 First Quarter Genpact Limited Earnings Conference Call. My name is RJ and I will be your conference moderator for today. At this time, all participants are in a listen-only mode.

We will conduct a question-and-answer session towards the end of this conference call.

call recorded this replay reminder, a is for being purposes. As be of of made the replay archived Genpact's call site. section The IR will and the available Web on Roger to Genpact. call now Relations turn would of Investor like over I to Sachs, Head at the proceed. Please

Roger Sachs

to to be you RJ, as which well afternoon, Chief hope performance back everybody, IR strategic on Speakers your Fitzpatrick, our for will you some follows. quarter, our results the to Tiger our to will call and We was overview through and for good questions. you, XX, the comments. XXXX. XXXX. President Ed first the welcome are some our review had for we and and come provide discuss Financial of release, outlook will will website, provide then quarter today's Ed take will Thank our for on and update Officer. our Tiger Then posted Tiger initiatives. Today's financial walk as chance earnings Genpact's a on thoughts of our agenda our section as Tyagarajan, an ended our CEO; March genpact.com. closing results call then

about last to call hour. our expect an We

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

understanding performance business. views additional information financial our will of to the non-GAAP provide that call measures we we today, addition, enhance management of believe the the way our refer during In operating to certain

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

Tiger Tyagarajan

the our for first are business. We I'm leverage with year of quarter a strong creating exceeding thank and cloud-based today we XXXX enterprises afternoon, to Roger. joining and cash pleased for margin, start had across revenue, solutions. continued operating adjusted our quarter all demand you you adjusted Thank call. and technologies EPS earnings high Good our momentum income us with is everyone, the first for our flow analytics digital expectations. a The growing to need seeing diluted

up on We and We These models redesign are revenue market. with adjusted currency first operations up buying transformations adjusted of revenue on constant increasingly addressable expanding million, constant basis; operating basis points share diluted global multiple a our year-over-year. $X.XX, X% and per earnings year-over-year; business parts margin up engaging $XXX delivered and basis; functions XX% XXX holistic reimagine total clients of client their to Quickly operations. XX.X%, their a of million, opening of X% covering XXXX of income expanding currency $XXX results. straddle new our quarter centers, on large-scale

get into the on to the situation provide I India an Before in we operations. want where COVID-XX have significant details, I update

safety decisions all the and services continuity two first, second, maintaining well-being clients. centered on pillars; from we've As health, of our said key and pandemic, the our our start employees; of global the for are of

from to simultaneously of our while their impacted our presence face crisis. of our this deliver work clients, doing continue While of to dedication now and their support to two colleagues extremely a majority tirelessly colleagues families. those the everything passion support small home. they we the can employees to to the across of They very regions, back had are proud and working teams to in the in-office I'm

overcome we this received together our to from We partner as also the support of have outpouring time. appreciate difficult we clients

and questions and resources. set as as to medical attention well up families an help access testing employee their hotline and have drive-through with We to employees for provide

and increased most associate aid have population. our insurance We financial coverage impacted for

have made to for globe, teams, counseling our the online community have they when parents. with cost. We app wellness hotlines available XX/X resources at vaccines education to and an employees Across our get support we access for become and to offering enable provisions mental health

turning Now to back our performance.

quarter, very we the During client healthy, the demand first forward of QX remained last in carrying saw year. momentum

another driven commercial accounting reached that pipeline to such Our sales and chain several by all-time multiple new finance operations. transformational including inflows complex and supply services integrate or deals high, large as

and We are happy that overall competitive deals. with differentiation rates highlights our win our

account during Sole-source quarter. inflows, than half pipeline and more the for to our deals bookings continued

verticals the Global to capital The results the goods I'm restructuring we COVID-XX. clients and Our exception relationship our period was challenges prior quarter. one was that our line of discussed growth sciences related consumer to banking banking by of which XXXX including last first capital life impacted quarter broad-based of Client with and with retail, strong Client our in pleased performance health performance and all was particularly Global chosen the and double-digit our markets care strong tech. last the top of almost across markets given high

positioned Given are our we believe to the well the year, full on year start strong outlook. deliver we to

As Client Enquero including of to with productivity that which and continues also XX% wins acquisition recent into of and of includes expected, now in new the drive approximately more Client systematically GE of embedded The IT GE than our spend and Services analytics Transformation now environment. the than Global delivered contribution pipeline. total by this of impact Services Global digital consulting uncertain from deal more and our portfolio. XX% represents declined reduction revenue. being analytics grew XX% XX% are our digital includes in Transformation project divestitures reduction as a a macro consulting, result of part

cloud serve clients our growing and with a solutions opportunity leverage fast-changing to seeing that architecture innovative and needs are of analytics. data the We

examples. Here are couple of a

generate nontraditional forecast, For stored AI machine and real-time more a traditional food company, the to reimagining we sources accurate are after using entire and the planning and process. demand cloud learning leveraging data solution in our

experience loan deep commercial decision the syndication of is objective lending market this leveraging bank's designing, are we commercial banking global and solution AWS cloud-native digital building and processes. client, deploying The business with understanding faster our disrupt dramatically a along our a times that on to and intelligent drive a For a customer services market for as in gain drive share gains superior funding Many operations change should larger to transformation much with advantage deals, competitive and to their engagements clients of lead them. markets. ultimately changing

or that relationship larger. becoming Over Many commercial expanded of have years, million cost-based. transformation our larger engagement We the a from total more million our approximately of four less such last in the outcome-based quarter to just the The services coming constructs, input highlight price models portfolio. our analytics $X than $X our XX% up engagements XX% with exited XX% as revenue accounts Global Client more services and now not of models, relationships even people that of fixed quarter of are small newer in the with initially than transformation course of than XXXX. with alternate was of some growth with from pricing have started of

Client more First year. to than and that revenue quarter XX% momentum expect we continue grew Global Analytics through the

significant of transformation its years, over our analytics component become the biggest has Given several business. services growth past the

supply of sales solutions the to problems across Bolstered clients insights increased leverage last the new use years, couple accelerate on of to like drive to Something fueling clients' is to insights the by chain, and XX a predictive commercial and we've and risks. industries digital analytics data our layer our and in solve many financial and For drive Enquero, services data outcomes and of solutions analytics data designing cloud with and growing Digital and focus appetite crimes we are in cloud-based and actions implementing of recent journeys. and now demand. acquisition The transformation Rightpoint, and

a that buying in-house data recommendations to Some combines global consumer generate run and with channels. examples all are: and in growth at about to entertainment cloud new platform enterprise third-party gain media consumer siloed For all and improve the revenue across of to preferences, we behavior analytics drive are experience scale streams a its insights order business, creating data

and claims For to to payouts in process AI expense we future using mitigate reduce data order carrier, learning to significantly and are risks. a to machine exposure insurance new large underwriting major predict claims and litigation

As transformation underpenetrated market remains we redefine I all to opportunities. industries call our that are in said digital new across highly quarter, companies earnings last unlocking in with driving themselves a growing

investments to through strategic us expansion clients bookings. new market to total their leading over and of pipeline the is types lead years This by addressable enable our two journeys Our largely thus of expanding led clients.

of to and the with XX% the And Chief the to First, to leading at environment. global new are this to accelerate greater Client that million as are second, CFO group $XX now Risk response existing transformation Chain this increased our or than client that with growth. change CIO Clients centers larger Supply this during new Chief looking services buying period interesting in more themselves Officer incorporates And the revenue beyond trend from up double Global and engagements open grew first time demonstrate for transform year. and such revenue COO, clients the Officer. and that the partnerships journeys from the Two us last clients to to metrics Global annual same XX%,

XXX. more clients XXX, provide. Secondly, up services type the $X many increased first-time million revenues to This and of of to from buyers annual with we included

believe runway operating shifted low-teen customer delight. Boards process and drive such the to We sustainable on way are longer operating investing seeing performance normal to work priorities industry-disrupting metrics and efficiency of optimization are rely these Global levels, industry-aligned C-suites on environment. low as models Clients. exclusively to the models. business They design We and provide changes double-digit businesses new from in for to factors longer a empathy to and adapt or KPIs automation like sales permanent growth no traditional and frameworks our have rigid based

resilient first the strong strategies execution playing top-tier Our in market. reflect results quarter model, and out our all focused business

believe clients new in agility to our value separating competition our even that turn industry the disruption the detailed caused growth let over strengthened This build of problems Ed by and from continue review trusted market. to to fueling me a become environments. us and results. to our us for position With relevant to chains. as innovative second bring and has digital solving transformation quickly call continued our analytics a We to our We on enables adviser our more leveraging quarter by solutions, strengths even challenging

Ed Fitzpatrick

and growth results good or revenue Total as our revenue on businesses. than point performance was divested basis quarter basis. XXXX. full our revenue revenue related This from million, including by January provide Thank constant certain Today, year Global now review financial X.X% our in is increased we X% afternoon driven currency you, and an first outlook. Client up of higher Global better-than-expected XXXX businesses contribution to regarding Tiger X% revenue, $XXX a XX% was constant thinking current I'll year-over-year everyone. one which or a year-over-year included X% that in Global represents Client Client on of our Xst, currency total approximate anticipated GE

year-over-year revenue, in to services would macroeconomic ahead Global XX% this commitments, expectations by basis have year-over-year a Excluding GE certain better the revenue divested impact by led Client due Client strong growth. currency on X% GE's declined or constant on impact from largely analytics X% increased transformation businesses driven businesses of Global included revenue our the revenue. performance productivity and now

But effect there year-over-year first margin Excluding reflecting to the Adjusted from later apples-to-apples greater operating quarter full year divested basis revenues XX.X%, higher the basis, the was from prior and revenue. largely lower-than-expected our impact GE during improvement was GE on. revenue due change to travel no of is outlook margin, will declined on operating The cover expenses for up income last to the COVID-XX I year. XXX gross the quarter. the leverage. businesses, full year XX% related outlook an points

as overall same our was in the fund. to Services margin charges the XX.X% XXX reminder by work-from-home basis from India first of by expansion last to largely during was better led subsequently during and adjusted associated reduced resolved utilization improved income utilization were retirement was limits quarter Gross compared placed gains. our due point XX.X% Transformation as productivity XXXX, period quarter the operating year. that ability valuation with a As lower margin on of our impacted to well The

year the than COVID-XX-related charges normal I prior figure the impact Additionally, was due to mentioned lower earlier. the from

improve by XX We continue to basis to least expect margin points year-over-year. full year level at gross

year-over-year year-over-year travel related As $X.XX offset gain by investments revenue, by a driven COVID-XX percentage Adjusted XX% partly points compared to by and expenses marketing. EPS of sales basis in XX lower-than-expected declined costs to and by of XXXX. was driven increase up a SG&A largely in and year-over-year XX% remeasurement lower higher The by offset $X.XX the of share count of $X.XX. FX of operating a income $X.XX up was year-over-year partially impact $X.XX lower primarily $X.XX approximately

$XX comparison the in reminder, quarter. FX a impact. we a this As year $X.XX taxes gain a Higher million negative a had remeasurement gain last to also $X first in million recorded quarter

to increase benefits effective and year. tax The tax last to compared certain year. of due XX.X% Our was expiration rate last XX.X% was higher the benefits primarily discrete

Turning to sheet. our balance cash flows and

$XX we income and due the levels. generated to utilizing working during compared operating period DSOs overall quarter, last as lower million of first the from as improved During capital $XX cash same adjusted to higher well year million operations

As a operations first tax payment a tax reminder, included cash during flow to of XXXX, matter. nonrecurring from quarter India the prior related period a

of to million days in timing. cycle to XX to XX $XXX and year-over-year equivalents recent sales improved repurchases largely augmented compared the $XX December and by by outstanding collection bond $XXX Cash repayment, and days million a offset $XXX quarter. $XXX of was improved cash issuance reduction compared to a Our in XX, the driven on related dividend million from XXXX flow year bond proceeds days cash free million last $XX million share totaled billing time the payment by million as

$XXX rate new rate. We environment the XXXX with approximately low existing the and bond to the closely to differential expect retired issued scheduled a plan bonds to savings attractive to April tapped bond coupon conditions paydown. bonds. due that interest in the recognize mature quarter, to coupon monitoring X.X% the of During with $XXX of currently timing into is and an optimize of retire are we interest of million market a interest X.XX% million two the are rate we annual rate our $X million the XXXX Once

including the new impact million Our the times, net four the debt-to-EBITDA last ratio quarters X.XX for $XXX from offering. rolling bond was

During $XX.XX. of a price million shares per share attractive of advantage for X.X the total of quarter, million and repurchased cost the our amount valuation approximately or we of of at almost X% also the outstanding $XXX average shares an took

to-date XXXX, at Our intrinsic up the stepped our return buyback total The in we approximately we XX%. per net able disconnect given while value to do we're times. shares on our these Since initiated we approximately repurchases repurchased share share during price average for had X.X and of available a keeping our debt-to-EBITDA And $XX.XX calculations in share price. program annual have an XX our of billion. we million level highlighted purchases sufficient is below capital so $X.X a share meaningful quarter, accordingly

no We $XXX authorized have million to under share our approximately of capacity allocation remaining our repurchase program. change priorities. There capital is

prospects is of certainly first also invest comparison And lines. companies to driving of search in growth. flow organic we believe valuation our to indicator to available, capabilities assessing the continue cash strengthen our and to future but continue view that past periods, consider repurchasing intrinsic over solid XX past can will our growth, shares mid-teens. we'll an be to value-accretive rate year our and capital to attractive incredibly in represents continuing noteworthy, five firm, calendar vigilant firm the in We prudent when is a of When in generated have the the at annual the we growth pipeline for in service investment. as we free chosen the a performance very extent of Particularly compound an is the particularly value M&A it

aligns to with expect cash long-term double-digit We forward, continue our outlook. strong to to growth flows plus moving generate medium which overall

advantage mentioned, compare we dislocations. valuation and our price price our of that valuation continue assessment we assess will As share with to own take and

now current full turn outlook. our to our on year me Let thinking

between of to revenues X% year-over-year representing We continue constant to $X.XX be growth and $X.XX billion X.X%. currency billion, total to expect

achieve outlook. pleased we are and strong the full year position are start in believe to better with our We topline

been continue Of India who clients course, we efforts our usually have so the clients our from and the serve in with extraordinary are far closely and monitoring global to have supportive. situation COVID-XX able through our partnerships been the to teams

one now Clients, which Global to the from on in of contribution revenue in to X% point certain included now range Global XX% a revenue. we X% Client an to basis, growth constant GE approximate businesses related expect be that For is divested includes or currency revenue to XX%

will with Client X% X% for year in outlook Excluding expected the we provided revenue to a basis, this to to on or the revenue, constant quarter. currency grow XX% be Global X% line last

are with we last During expect in the double-digit we coupled to we revenues growth to the not single-digit low are approximately our Global business, step-up the year-over-year by are we sooner. well-positioned year-over-year fourth caused topline single-digits quarters, Client decline the third continue and second to quarter, to impact second to quarter growth Client expected if the XX% to a in sequential With expected of see momentum growth believe by meaningful during given COVID-XX year. year-over-year. in return quarter for Global fourth revenue GE high seeing

the to decline gave effect of with in in we line revenue the year to our XX% Excluding XX%, expected earlier GE GE prior businesses, to are $XX full revenues divested approximately year. related million this outlook

adjusted Given we to full the quarter, first our the margin we for the operating are believe we operating XX%. better positioned adjusted even to year margin in generated strong expand

are and with expect sales balance XXXX, to we our continue of travel the efforts, revenue navigate We the and along through anticipating. sequential including expected as marketing growth ramp we to R&D

prior Given remeasurement due we between year during full increase our $X the to range recorded share be $X.XX we quarter. $X.XX first diluted of gain $X.XX this to outlook, adjusted earnings estimate XXXX FX an and a $X.XX $X.XX to the million per of for from

MidCap recently were the added fundamental nice the over let very turn back which turn to to that that call the of want the mention over Tiger, that With I performance Before to I me a to Tiger. to XXX firm. S&P is we pleased Index it testament are we

Tiger Tyagarajan

Ed. start Thank a you, year. to had We've the great

market. culture strengthen Our focus embracing differentiates on us outcomes client of change, the relentless in and process,

As for will digital our future, clients leveraging predictive we go insights. drive value for analytics we into the and

the well-positioned our combination our are our capabilities on Given to domain of deliver deep we trajectory. analytics expertise, long-term growth and

resulting leveraged has and reskill, of Genome, during been success another with employees' quarter, in pillars team learning redeployment X,XXX on our new platform, better the to of in evolving our utilization One Match talent Coupled rapidly investment identify, sustained we redeploy development online platform, skills. and roles our retention. and Talent learning for talent the members our

to certification For our example, to to of a this dedication launched our enrolled has we critical data advantage. all proprietary response with expertise been believe learn, team available members the our develop the overwhelming one-third currently recently program our global sets. continuously demonstrating and to to we program from nearly of needed our The to insights operating people and competitive desire workforce which generate data contributes analytics vast

to Our XX,XXX the join recently robust of hiring, top recruit to workforce allowed many last to colleagues reskilling onboarding, we added than have the continue our global XXX,XXX crossed programs talent ahead long-term our threshold employees and team of us. In globally. and months, have opportunities us to the and more capture XX

to goals and supporting committed to and provide had in We've diversity commitment investing our an governance, updates our communities. with us always transparent long-term deeply inclusion, ESG progress. initiatives and climate efforts are communities, benefit enable impact, around We all on drive initiatives of achieve financial which sustainability and our our to and will regular unwavering

rapid India, Rapid reopen effectively all helping together new The a Collaborative India. will Screening I've the safely. organizations businesses, is launch to also ecosystem US and our we use through to of I'm COVID-XX all in consortium with to testing, been the We the to of recently leading the confident forefront teams our sector rapid the return cost-effective in of to work we're clients COVID-XX the of and the and group extremely faster. Consortium. goal to get to the our experts Creative proud that this together Destruction businesses and the of as to Lab economy private with diverse announced resilience recent safe the addition, better we partnership navigated a most US Action enable safely have and at development and crisis, In with accelerate collaboration COVID efforts tenacity office of

bring Before Board the newest I to across companies. the our numerous Tammy of pleased With I'm excited Genpact's leading very has record expertise Directors, talent who to transformation with call to strategic close, me of I'd Franklin, We're of all an the of track deep and our turn our that, diverse let member into digital impressive welcome Roger. Board. like back conversations, over

Roger Sachs

now the for We'd our open RJ, ask please to Tiger. I instructions? call can to you you, your Thank like provide up questions.

Operator

[Operator Bryan first of comes the question Your Bergin from Instructions] line from Cowen.

Your line is open.

Bryan Bergin

Thank Hi. afternoon. Good you.

Tiger Tyagarajan

Hi, Bryan.

Bryan Bergin

just on Hi. the outlook I start factors. wanted to

it operations? the marry pull-forwards translate just we items do help in results aware of year? that strong just Are but the stage of within that it's came how XQ outlook? the here Any in building us the plan, India just early So, we those you be Can two? fact holding above pandemic-related for to of? you the Is need

Tiger Tyagarajan

It's just I'm to quarter. you first full in Bryan the it's the just feel around it therefore, first the quarter. say, quarter, pleased strength really the with about all But only good comment. first going year. of one the narrative your And nailed

in built impact COVID-XX haven't the in anything on India. We of

obviously spite obviously that COVID-XX clients by both the of to well Our partnership we families, absenteeism very clients, our as our to in services. clients, as impact with in driven closely operations, on increased the our continue to with work delivery population deliver means our

on So, had it's into impact that just quarter. our It's to haven't one anything in outlook. that build we just

Bryan Bergin

you you Okay. Can And pipeline Have levels also here. versus timing? ramp that ago? change the decision-making deal three you record and about months at talk seen heard then, commentary

Tiger Tyagarajan

ramp deals sales account supply connected of that of -- these the take to ramp run. the connected connected large you at the into to do ramp often services. time time for are deal a about to with fact chain, decision-making terms And with happening the seems the on both and accounting larger and No, speed and I the pandemic. that clearly Bryan. also operations. expected It is that track multi-geography, be connected and kind to got particularly, center which to in complex are Have takes but talked up. then, multi-buy to It's nothing do sometimes finance deals

Bryan Bergin

It’s you. Thank okay.

Tiger Tyagarajan

Bryan. Thanks,

Operator

of from next line question Tandon comes Mayank Needham. Your from the

open. is line Your

Mayank Tandon

Ed Thank on you. Good and quarter. evening. Hi, Roger, Tiger, the congrats

Tiger Tyagarajan

Thank you, Mayank.

Mayank Tandon

just revenue on I you're little momentum seeing. sheet bit of the a data color that me. more I have with wanted to don't front your start in

So, portfolio? get just and perspective spots which expectations. seeing that outperformed any you. regions. So seeing would Thank vertical Are more color within across to on verticals any that love you're verticals some soft your you on the revenue breakdown your

Tiger Tyagarajan

So, it. our other Ed add all like good growth I'll off, prepared verticals other kick -- all Mayank, pretty talk which banking performance can to verticals it but pervasive banking seeing and markets. markets, about I'll across then, to our than I'd capital we're than capital separately, remarks our on

you was if had banking their expected. versus But for planned consumables business, health last tech, first we fact, clients a markets And therefore the sciences management life we year business our quarter this. as decline capital we was last all capital In then remember, contract. quarter. saw banking our entire we have and retail, one of high comes restructuring, to well markets, resizing in as care asset that had said and when Because that, double-digit. And it as

is seeing the pipeline. in business exactly that's an the new capital we is planned. markets executed banking inflow the we entered we are Pipeline into a happen knew growing had very going to quarter, exactly way increased and got it What As nicely. is we what

expect So markets be add that? strong. as banking the you do Ed, we actually we to finish to to very want year, capital

Ed Fitzpatrick

I think Tiger. hit you it

I growing tech continuing great, think clip. is at growing consumer which well fast to a within nice HMS as goods clip, life high science grow a is

all with pleased just general, the verticals barring one mentioned. Tiger that in Just the

about the feel we good the board. growth of really So the nature comprehensive across

Mayank Tandon

mentioned? level three And One the given what takes it. might a XX% of that outperform the just weigh margins are to on outperformance some think the as given puts in to would and just follow-up. the are strong the drive over to margins first strong that be then you actually Ed, to that quarters that. able year, the quick going in maybe Got next start you quarter,

just the Thank some factors would helpful. if of that weigh various in the you. margins call you be out could that So might

Ed Fitzpatrick

full I'll year And thoughts. on or touch the expectation

full said That's better the out Tiger think year. of happy we it. great. I feel the way gate did. the really We're that We got we about

that's start. nice a place So to

In sorry, than We better expected Services, within analytics at – really first nice is than the year mentioned clip. expected. Services, terms higher-level first of quarter, Transformation services And Transformation margin better which better. a

So and that's it expect for the that good. we but appropriate mix rest at thought piece was do of of this a Sure, continue We the continue? it not year? Can of to balance the point.

looks invest of going the how is than We're So for clip come out. R&D. be And are marketing will I We'll back that a investments going like and the everybody particularly want come up It we happening to and be then do world. what's thinking, ramping up, slower continue think selling with balance travel year. will things see in itself But to ramping other the back. to – at plays in. going to to We're invest.

it ramp piece of year the some Tiger, the So a we're else on balance – another investments to the is it. up year And in mix early of then explains of the add? rest. of for going anything piece to the

Tiger Tyagarajan

That good, it. I No. think was you yes. No hit

Mayank Tandon

Thank much. you so Great.

Tiger Tyagarajan

Mayank. Thanks,

Operator

Your JPMorgan. of next Huang question Tien-Tsin comes from the from line

open. is line Your

Tien-Tsin Huang

in do are maybe forbid locations delivery course? perspective, trying of I Tiger, a from on Hey, other any with thanks – or absenteeism mentioned, out ask of case to India. some as as but to how God well things out I flow yet. impact at you're see impacting that wanted not everyone that from think seeing firm safe is Is get worse you to deal there's I have things place folks so deliver much. the operations play in you contingency hope on

Tiger Tyagarajan

Capital deal the our have of worked have the said National few vacation things pandemic employees No, our Really continuing typical volume ramping to Bombay, Tien-Tsin that leave absenteeism with nicely clients that, teams, that higher and our the centers ground. One, context in all reprioritize for that we And Gurgaon into same important keep back been European Delhi, well supportive have while of all up it COVID-XX with as our absenteeism safety thank not centers the the Jaipur, of to are as our that and our around the bit regular way seven, delivery I balanced. appreciate of those sentiments. India they obviously to in about global unbelievably current be eight our need city distribution we one sure health in deliver. through the US make have and a does And ability balanced, compared footprint And cities fully and is here their because time play, very will that. objective than is care of by to in saying fair years to footprint that in we our of because by delivery situation families SLAs, Region, the Hyderabad, it able the balance really at course, I start and little mind. nicely your is think city, been say, Pune. There bring to move Calcutta, India taken to to across services a Bangalore, and you on very driven between cities in is the absenteeism I'll what situation rolls distributed much that, are it. off it's by in

we our and which good. continue long So, going have confident the to actually new are we moment I as really we be able so any we feel as expect on to. haven't we services will see On we impact any at and as impact seen speak. that don't far transitions, business transition

Tien-Tsin Huang

Okay.

glad am Tiger. to I you, Now, hear. Thank

Tiger Tyagarajan

Thanks, Tien-Tsin.

Operator

Your next from Dave from question Baird. line the comes of Koning

Your line is open.

Dave Koning

Yes. Hi guys, nice job.

Tiger Tyagarajan

Dave. you, Thank

Dave Koning

And I guess just couple. a

of the of margins guided, gross First gross of of any maybe year-over-year? this down think pretty your And through Last margins last way you up year-over-year thinking really of quarter. again. all, Like there and year three review think bit why you hit strong, that and still of? cadence, the flattish I too. really QX guidance. being was could bps quarter for but up will reviewed Is you little were quarters XXX year-over-year. flat maybe, and be rest have you're kind QX year-over-year Just a the QX all basically The good

Ed Fitzpatrick

for I that so points year, we of think we If both gross which early margin the of be again, XX% But hopefully not better. drive year, just going we gross ahead we're ourselves. for and on and XX is get Yes. able to full XX%, of Tiger the above to kind we're ought guided of what to balance which will be hit margins the

some including as So, assuming travel, mix favorable of ramp that including we're that the a little to some up we that quite just of that isn't do bit, expenses revenue. start do have cost

Dave. it a out. thinking we're quarter, the see and on the is plays we'll in first about of just then being the how year, kind it wanting bit But to the favorable So, spending, way get not mix, lower ourselves earlier of ahead

Tiger Tyagarajan

And the And Dave, very Services of strong. Transformation and of analytics, the in in add came that very I was is, utilization came other was in that one within strong. first business strong. the Analytics would our quarter And therefore, very one in Services components Transformation thing,

be and we both data, clearly very leveraging as focused in income are leveraging on clients gross something that are that leveraging helped on the take on of gross nimble the years business. And very and and for we All augurs margin long-term which well operating to or because, cloud the think our cloud decisions income data very from two order way actually drive more business of margin. just way operating adjusted different they three that that in and was the very as operations, well adjusted in their run and focused margin back. is insights our all And it much is that agile margin, to

Dave Koning

original maybe Thanks acquisition, million it. did guidance? like Enquero. year? Got pretty take acquisition take, much in I revenue big the give maybe you. I think just a as big $XXX QX, a secondly, And paid I give or or looked it Was for that. How how mean, you reminder, And Yes. -- know the that you something then, this in for

Ed Fitzpatrick

little less points growth about than We year, was XXX Rightpoint a it the basis of year. in said, adding bit last adds

Tiger Tyagarajan

sorry. -- Yes, it was yes

Ed Fitzpatrick

Yes. included. was It

Tiger Tyagarajan

in of the acquisition day our included closed the XXXX, guidance, was last XXst It of the year. of because we on December the

Ed Fitzpatrick

no no related change And that outlook change, the to in acquisition?

Dave Koning

Thanks job. Good guys. Great. Okay.

Tiger Tyagarajan

Dave. you, Thank

Ed Fitzpatrick

Dave. Thanks,

Operator

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

is line Your open.

Maggie Niesen

given share Thanks. right Nice is shift incremental to quarter. such that I happening you the geographies, of business just any environment have now? some wanted to other a to clients, are follow up do is on costs with this that When unique able continuity question. work to in you

Tiger Tyagarajan

take actually Maggie, what is which larger to we when of doing leveraging are our our work So, European existing teams. centers, one is, we let's Bucharest, shift

to our number and some in a European work work kind cross-training We they that they're is pretty other And Cataloochee, do, able the with of of Krakow, absorb. Bucharest, have presence -- operations significant the that kind in a locations. in in in of

exercise systematically last things because happen, have said, One people, situation path of where current wanted is is you our India went home I'm in the down from two which year backups which a really they cross-training that do last work of did, from mammoth everyone. is individuals to how very work for the in in like to we situation teams proud in XXXX the move do, if we are the were to from of were they office of something quarters all the different

therefore and going not beyond incentives, paid this services I through resource? it's not longer. delivered. actually be to sure our People get with the of in the all John? who for it's what. above are And the But time. situation -- it about are in us, for not remember necessarily backup making think really to their partnerships about that. extra, costs. so do backup over And have backup the Mary? is critical have incremental who Who's just this is It's that time. we for work no, And Here Who's people it's this so at shining partnership are It's actually clients pays for that

Maggie Nolan

And Got analytics and to the streams? work project-based strength in it. the your and then any relationships longer-term we've of strength that analytics see into great ability What you. of kind continuing turn revenue Thank seen. is TS to recurring trend

Tiger Tyagarajan

the be client and Transformation with TD one to ability often those that in So the quickly us say, starts of end larger with adding at many of of amount relationship Services clients are just many, level. higher not opportunities I to at start applies the annual We're year project the we as themselves end to they enter analytics one with of analytics time, the certain annual And to well. we that value work. given start Transmission finding for take TD. a say, real to Maggie, Services the years, let's let's are to at into situations tend of many, a two new finding start able converting to would

our we when that annual about talk growth So half work. analytics that analytics of actually not easily more if is is

Maggie Nolan

Tiger. Thanks details. Great

Tiger Tyagarajan

Thank you, Maggie.

Operator

Citi. next Your Ashwin line from question of the comes Shirvaikar from

Your open. line is

Ashwin Shirvaikar

Hey, thanks. Good quarter guys.

Tiger Tyagarajan

Thank Hi, you. you, Ashwin. Ashwin. Thank

Ashwin Shirvaikar

mentioned that in year I broadly of with it continuing What kind work-from-home. implications second terms know continue your to the the feedback are you seeing of did? tragedy kind what supportive, of intermediate of working regards sort of longer-term you is they and start of this of I Are this wanted but are the from to need into home? the heading with from sort -- to clients

Tiger Tyagarajan

run. we be my an archetype here are I with design service effort fits doing leading answer. Ashwin, think the to of are in of don't So our the actually size start for of would the them taking clients it's should and way is all What a industry and particular the we a one

the done should large in kind office enterprise environment of an So that to when? a work-from-home typical What be environment? offshore spots and and what design and work of how to a of in spots. can books kind about near-shore, be like and in environment typical then onshore, an quarter? other in that different we in closing time are different customers think different land discussion. done So migrate from run design a should construct the design else a And a at remote from for month everything And over a be work as going will offshore it's of office, really should

that's one which second talent. the So one is hybrid the is of design. the And flexibility

are they going to people office. from always work like Some say an to would that

time a that environment. amount other to some working people a are environment of home And from they from think remote going a about predominant say --

is who have from view are They a there remote is be again that particularly we back a come with working going an they where with new It team, construct Our to must again, skills, office. an into and that's which cadence very, design a people learn opportunity the a environment, will as innovate. different build a up to relevant is And together different culture, in a that very end come constructs for clients. archetypes. different discussion

as speak. up come different Our pros that's job is are And to those those design archetypes, with exactly doing clients discuss what with we we and cons.

Ashwin Shirvaikar

Understood. detailed. Very

in you of the costs say of terms the terms I that quarter. was second that strength kind one-off to cause point mean, environment is, the you're how The halfway such nature? other would XQ of you're in seeing at anything in there Is this through kind and question, project of your flow in

Ed Fitzpatrick

speak Ashwin. mid-quarter, won't anything to I

get and we've as on level now. balance looking the -- we why to balance we'll we're on, stronger I of, quarter, provided the QX give for back think come second given QX you. to early year, still the is the more how kind think and of the kind And year. color of where through detail too just commentary any But the we of any of appropriate the right was already we at are

Ashwin Shirvaikar

Understood.

Tiger Tyagarajan

on first Ed example, the think, for what the margins, does already Ashwin, in I therefore terms for of has what strength mean that described quarter year. And and in our

are of the come And Europe. going in are invest to We travel continuing ramps seeing certain revenue we do through already R&D, domestic course, of in sales parts and US, be to our year. and -- as back marketing we domestic

margin of as coming overall be to the Of factored to going as and other international the is QX markets global company, And the nothing that beyond. travel we going we right all that back. between can't that and come now But to go course, is into forward India into some and back. when predict of travel is is

Ashwin Shirvaikar

Thanks.

Tiger Tyagarajan

Thanks, Ashwin.

Operator

Bachman Bank [Operator from the Keith next of from Montreal. line question Your Instructions] comes of

Your open. line is

Keith Bachman

gentlemen. very two you much, questions. to want Thank I Hi. ask

do growth. out towards I new interesting to about really kind new as words you you growth contribution new highlight partnerships bookings to versus Tiger, some net to areas, seem use with of you about new your And clients. views, direct bookings new The think first I'll how think And called and and one, wanted about your get existing to it's clients but the you you -- net clients? associated with

how that to I probably some you do you're B part durable it is, to there's How long growth. takes about the currency wondering really guidance. Global think generate question double-digit conservatism that. really understand into And thinking Just to constant Client

you're this of You getting double-digit this contribution and reached kind Global Client a But to easy. some how you the talk QX little to year the because Compares durable kind -- I some you reached you about said. from pipeline year bit also want about are of it of the some think growth, building M&A.

So one then And I had that's question a follow-up. around really demand.

Tiger Tyagarajan

Keith. second start I'll from Yes. question your

transformation last calling is this sooner, say currency. our Global this, expect fourth is time that Client digit be is, of forward long-term we've the view with is we some of of indicated that, of when which we number And that for we've top Client and Global double-digit to existing up new our back to are and last And said is, year opportunity growth. to relationship. clients constant a have we we time And again, wanting who it. opening XX a but double-digit drive revenue back we out to months from going ratio we fourth quarter many to and, indicated market, -- order to a the our runway Because quarter, could partnerships just we that, undertake there first is a in kind centers get the start very market, you then time the client connected still growth. where it question, Client think which come and to that we when that rate clients which been expectation of is are has that our feel the As our And quarters, the trajectory existing said bit increased Ed more I by expect is couple mean about clients. materially the growth because our we increased quite line enterprise-level more growth of of addressable services this are had said total to existing buying an good of contributed the Global double who typical we've relates by addressable had number get back the than improved definition total the

that relationship. exceptions, journey larger a quick a we've start we advising strong on a as that, and with, it starts sometimes to relationship few that clients, barring about value. a takes ramp since our where you're take Transformation had long that's for been you're payback bookings. And that very quarter, Services doing And time up. to the already And you're implementing the And relationship, immediate an fourth you're you when drives engagement discussions undertake. engagement, doing in orchestrate example Those analytics

to we'll quarter why, fourth So we time to get growth. is by double-digit which the the get

Ed Fitzpatrick

… it's Keith, Hi

Keith Bachman

Yeah.

Okay. sense perfect Ed. Mike. That makes ahead, Go

Ed Fitzpatrick

peers. last the X% I'd down But may grow, many only year-over-year year, or be like did remember to our we X% easier. is, The right? I We add thing comparisons of think a bit weren't flat

make bit the -- our So aware nature. it's coming durable of comparison to little off growth. want you're is sure I of just a

Tiger Tyagarajan

very is are through our didn't XXXX. have XXXX. significant that because through XXXX the and point our of what and backdrop in industry our is V growth Keith, in therefore, pretty growth what world between in that XXXX, going we of the going a And context of material in XXXX, had trajectory important growth. We It's the

Keith Bachman

a just clarification enough. My Tiger. Yeah. Fair second question is

question, quarter. attrition to so Your competitors -- March previous talked had to December, only Infosys you Cognizant even pretty In meaningful about December this but in and or not September absenteeism. but more the had increase competitors, a from true not TCS

issues IT just the just than sound increase the you see why traditionally b, other be that higher then, you've the to an like everybody actually is a. to I And some areas clarify understandable. of sound I are IT attrition had But thoughts wanted same has of BPO services. perfectly experiencing service surrounding you're And some in just of experiencing. doesn't of and wanted comments like, that that I think providers if it traditional you. any attrition. have having clear, or Thank it attrition doesn't levels to

Tiger Tyagarajan

below, And that has attrition our back be quarter between used quarter it's what back expected. had and the gone first up pre-pandemic. Keith but it tad to fourth gone up to the So, we

Keith Bachman

Right.

Tiger Tyagarajan

to would that We seems the it out be be a what have those, expected. any we've other for one higher called we know XX-plus seem attrition So for why versus is, lower. We It following haven't seen where we it. expectation? exactly reason planned pattern exactly to that years. But is because

would what what in than I'm as That was one to our intrigued promotions. expect quarter, So certifications, compensation, lower, It new than to not to And that's the is get fourth with be to opportunities -- to, pre-pandemic. it -- QX. that get and it new doing. it work, how manage attrition our is what way get talent higher, exactly of addressing that attrition still higher was gets sure be QX a business make attrition, we've do to skilling, that is little high-performing used than been

Keith Bachman

Right.

Cheers. congratulations. thanks, Many right. All Okay.

Tiger Tyagarajan

Thank you, Keith.

Ed Fitzpatrick

Keith. Thanks,

Operator

phone over are Sachs, to time. back to, Sir? the this there the line, turn And over at no now questions call Roger would further like I

Roger Sachs

Great. to with next Thank forward today. us again for we you you And speaking quarter. everybody joining look

Operator

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

You may now disconnect.

Genpact Limited (G) 11 May 212021 Q1 Earnings call transcript