G - Earnings call transcript Q2 2021

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Operator

Good day, ladies and gentlemen. Welcome to the 2021 Second Quarter Genpact Limited Earnings Conference Call. My name is Wayne, 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 section The IR will and the available website. on Sachs, the would over I to Investor turn like to at now Roger Head Genpact. of Relations call ahead. go Please

Roger Sachs

Wayne, be of XX, our our and to Thank you results us Officer, walk thoughts to are another Mike you on a then XXXX. section initiatives. on your genpact.com. some quarter for then We Tiger Financial and Genpact's the for review afternoon, our was Speakers release, President chance call be as posted Ed Financial IR is as we'll to for and today's XXXX. discuss succeeding and to within hope closing Today's as an outlook will provide website, and come then Tiger provide through will and quarter our to will who on comments, results the joining Officer; who good performance which Ed, overview Weiner, CEO; our period agenda second will outgoing everybody, transitioning Genpact. our take Chief of update for as our you, welcome some follows. well will call role leadership strategic new our our Tyagarajan, ended earnings questions. June financial had Ed Fitzpatrick, our back the Tiger Chief

We hour. our expect will last call an about

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

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

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

Tiger Tyagarajan

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

Our revenue bottom momentum Services, growth Analytics, of driven Transformation line Client particularly anticipated flow. Global double-digit on and business. line, performance second expectations return we our than accelerated cash in the earlier We in by Operations quarter the Intelligent exceeded our saw top strength to

to XXX areas $XXX investments and for extremely risk and and strategic expanding be constant In up revenue chain, beyond and XX% of year-over-year. such to are million, points opening and X% quarter XX.X%, Our services Client our cost million, supply financial operating relevant currency as revenue just XX% income on per and adjusted second in sales of create adjusted proving value basis; margin we new opportunities of up productivity. clients, of a commercial on many crimes earnings diluted constant a $XXX delivered XXXX, basis; currency total Global year-over-year; share up basis $X.XX, the

large our new be and us Before background comes global function, who the with want detail, XX, finance an in in effective joined Mike Weiner, Fitzpatrick, as a advisory CFO client Mike has I the to welcome reviewing strong will who company corporations. more in Genpact extensive working August on CFO in market-facing Ed succeeding experience public role. to quarter staying brings many

later Mike on the contribution on on. few make execute success to We're We agenda. the as to a the a call is growth and of our him company on board. continued very have significant today us with make expect will Mike will excited we comments strategic

among possible footprint to we in global India, distributed ability to India impact the our delivery delivery was talent And happy at aggressively our of adapt our a team XX% clients, resulting no has unwavering we months across India-based with of India the few During clients, cases of across up clinics report together To our were partnership only geographically set a operating extensive many to quickly least back, in to our vaccination the services our and of material support local are of more have of of at second able and operations to because business. COVID-XX areas with vaccine. one that wave significantly This declined. of new maintain driving business. with redeploy campaign centers. dose I'm in our vaccination than our workforce hospitals date,

This performance to healthy transformations. tech industry As impressive life year, increasing remains logos. the demand pipeline our we quarter. of digital as second seen services. mix to overall growth chosen environment into continues double-digit revenue pursue new and an Global retail, in of of most The the move health companies Client goods half across verticals, and high was and and including the the sciences consumer manufacturing care, returned include

the had capital relationship with of by was resized business. markets that management we restructured clients asset and expected, its banking impacted As our one

grown nicely also to of robust investment of continue be strategic that business component Service to an and demand continues of X and opportunities for continue the portion consulting supported an Global acquisition. and saw largest our of at we in Analytics The A digital. our Enquero powered markets in XX% and past banking by our Service However, while Transformation risk our expansion contribution the based. has the from combination led has the Client grow our in to XX% across we revenue our services. annuity including grew rate crimes engagements by quarter financial Analytics Transformation to good Transformation capital and increasing years. plus, the becoming of Services be of pipeline, each at Services business accounted Transformation

Let me share are our some the examples driving and Transformation Service engagements they clients. of for our value

satisfaction. user changing operating drive free and the teams its their for to company, CPG global significantly and model a sales growth their to For redesigning capacity up higher experience customer

profitability. processes shared Microsoft AI-based solution, and cloud leading to solution, to environment, with pricing, workflow higher our faster significantly Cora, premium better across to company, orchestrate client's workflow cloud insurance For using underwriting times lower the AI-based Azure an underwriting risk Cora,

expertise consumer and leveraging high-end the resulted improvement and AI forecast our analytics production fulfillment, XX% XX% industry machine learning-based company, and a time improve lower in planning in and with a supply forecasts electronics order and in For these a a inventory. accuracy. processes demand planning Integrating to reduction data, XX%

and For their reporting. their significantly data better experts a bank, of leading our regulatory to accuracy to data matter bringing and together global specialists improve timeliness subject covenants,

that have Transformation with a relationship subsequent Services to new consistently We seen client growth. starting leads

follow-on led months, that teams. XX accounts including of Over with Transformation to a term annuity booking, longer new a the started stand-alone past Services XX% engagement

alternate the win. Additionally, more models provide consistently traditional The many these beyond new to total there engagements and FTE our pricing. of Thematically, increasing. leverage are been revenue helping models competitive with opportunity profitable of us differentiators X are has commercial share that commercial

ability it's analytics cloud transformation as the and core journey. our orchestrate data every in to First, becoming client's to

supply financial to And expertise, operations to as value or and in driving case, receivables fraud, productivity our and Second, such losses linking and chain increased banking or lower for deep sales risk accounting to lower client and supply services chain on growth such each our finally, and or operations. finance commercial crimes to clients as commercial and outcomes just linking inventory beyond cost constructs. focus

that seeing this are portfolio to proving momentum management, digital are business for commercial, Our data and financial and specific and in include areas and Four and in be planning services, financial process clients incredibly environment. we sales of supply investments crimes models expertise chain strong relevant analysis. and risk

expand these. on each of me Let

cloud-based data bringing our together sales line, revenue commercial drive to insights and our service clients. and in for Firstly, operations and analytics growth

sales clients' and high-tech to focus medium our with pursue teams helping opportunities best example, For on businesses. small

in and for planning leveraging and supply many foundries semiconductor X integrated and device analytics the in data chain companies, manufacturers. helping disruption improve Second, Tier chip the services, demand by given manufacturing supply industry,

clients Third, increased as we pervasive address and becomes an crimes. commerce financial for agnostic, industry to fraud see and digital need

of strength and and And industry finally, on scientists know customer monitoring. data industry and are anti-money our experts developing capabilities areas leverage forecasting as-a-service high-growth the teams cloud provide data an laundering, supply our data. are the we of expertise, having clients customer, your finance opportunities solutions across and is accounting us. area to and analytics growth anything that transaction finance represents decision-making significant and and in disruption. ripe opportunities SP&A for implementing highlight clients agile deep of fraud that these All seeing our in use marketing and and for for areas cloud chain, for And to Our in the drives

to strategic with domain relationship and we Beverages leveraging Africa them growth, a Coca-Cola process and For our drive recently beverages. deep CPG depth competitive help in new example, announced

to people our a top customer as Therefore, by functions, service finance, well on our than increased are attracting, shared multifunction, our organization competitive services talent building We've base we creating their to people. operations We for allow biggest and that intelligent more initiatives. improve a data continues are to establishing procurement, employee them advantage. enabled be other growth believed as management quarter, us. the concentrate centralize and global always X,XXX and In net priority automate digitally retaining

organization years, the have careers. as an we reputation Over for earned a known building great

our new skills members in build Genome, development critical the to redeployment learning Our an workforce. scalable platform, our has during And needed our Genome, employees learning our allow to reskill of We X,XXX the talent Talent online them redeployed leverage our new with with investments the for into in career opportunities. and roles, platform, team Match, providing been new success. combination enormous we future. quarter,

global currently insights we this us certification by models program unique bring enables areas and XX,XXX our to data of critical generate and quarter. is end trained discussed operating enrolled second that ultimately analytics from of a XX% tested fully employees client sets, As allowing last about our quarter, with in data program to our in vast domain we the value. that unique tremendous data have in specific build workforce

our call adjusted results. to performance, diluted on our to we year quarter XXXX to long-term stage annual second the full year-to-date operating detailed of operating that, continue bringing our With experience, the with being than more margin to teens raising are half journey adjusted the delivering parts Based of our quarter Transformation our and that and growth adjusted double-digit me by source driven deliberate different process setting solutions low turn second line Ed addressable powerful Global connects, results With partnerships to our investments provides has strong differentiation. with long-term We strategic better deep Transformation engagements market, of in digital competitive clients expertise, This creating and CXO and centers. with drive prove domain believe deals. better expanding to coupled sole of Our a over income review margin let our analytics expansion. and now Services outlook. to us Client continue Services top clients, Operations with bookings Intelligent combination we led a our buying are for more EPS

Ed Fitzpatrick

Thank financial and full afternoon, Total you, regarding year-over-year review results X% everyone. I'll million, latest year and or basis. currency XX% $XXX Tiger, constant good outlook. quarter revenue on XXXX up was our provide Today, our a thinking second our

Global a constant portfolio currency January from businesses XXXX. our better-than-expected stronger-than-anticipated to As contribution Global in certain first Client we of we was in saw as point represents This Global basis. revenue Client the on revenue, quarter, X revenue, that by year-over-year growth, growth performance which divested XX% GE XX% approximate particularly in began including includes related or of total increased X, driven our Client XX% Analytics. an

the This line Transformation was As expectations. strong growth. mentioned our revenue, Client by once performance Global largely double-digit we strong top of delivered to earlier, in led Services returned again Analytics growth Tiger prior by we driven ahead

During Client the expand to size relationships. Global our the we quarter, continued of

productivity XXXX, during relationships XX, June with revenue XX-month ended grew XXX example, over million $XX delivery to XX% GE GE's the our businesses. This in Client impact the we number For Global to year-over-year declined growing on clients with the than from XXX. committed $X overall driven of million annual revenue, macroeconomic included and XX. more from revenue by XX annual period of

that operating expenses. improvement Gross year. same leverage overall income of period businesses have up during line percentage mentioned last COVID-XX. to declined operating was due with Transformation year-over-year The quarter to the to driven same that quarter, improved onset level. GE with margin a revenue particularly in expectations. due operating XX% This revenue be Excluding was basis I by year. remote delivery on the the higher due and to Services, by XXX last continued line lower higher expansion year's impact as would a margin part the in earlier, was partially Analytics travel-related the of utilization, XX% shift period from and the to SG&A was also largely related was mix the gross point negative expenses, the XX.X% were was expected expenses the in during elevated at noted It last revenue should pandemic. XX.X%, the divested to basis billings expansion, points Adjusted XXX lower margin with our year's related margin than effect client expenses lower offset medical XX.X%, of associated to including last costs gross in of compared

XX% taxes of to remeasurement increase EPS lower We sales $X.XX. continue year. $X.XX, was a income the share This operating driven increase partially by research the and in $X.XX, higher the $X.XX impact of to and compared an was expect FX in development of of primarily $X.XX year-over-year and by count higher of investments second gain to $X.XX offset of $X.XX, marketing during our up and Adjusted XXXX. half

rate a more in tax driven incentives year mix jurisdictional our line XX.X% and Our with last effective XX.X% to by of year tax largely in compared expectations. favorable income was last lower XXXX,

our sheet. to cash Turning flows and balance

last top During The we last the working investment second to growth decrease line to capital, of attributable generated is higher our $XXX same during was quarter the a period from impacted second year. when by performance to revenue in operations reflecting of compared $XXX higher the COVID-XX. compared in year cash million million quarter the largely quarter,

equivalents improved billing million Cash to the last totaled the first days largely and days Our cash quarter compared days million XX of collection driven year-over-year time $XXX outstanding sales XX to at timing. to a compared reduction of and improved $XXX XXXX. by in end cycle year

our for Our $XXX the liquidity ratio growth we pursue was approximately debt-to-EBITDA on rolling and undrawn opportunities times. million existing cash net strategy. last to quarters of With allocation have X balances, execute debt X.X and to continue capacity capital ample

we to remain have searching lines. and chosen in solid that companies vigilant a our can service We our continue and M&A strengthen pipeline, for capabilities

in capital attractive when the in is As particularly to we to we said view the available, the continue will have firm. the of intrinsic of is valuation shares, value extent past, repurchase our comparison to the our

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

our To XXXX, Over by shares under primarily X% on we estimate $XX we was the a the than share second of our to remotely. Capital out million quarter, capacity second net to dividend the buyback share $X.XXXX paid reduced purchases work million remaining we as approximately XX%. we program of annual in date due shares expenditures average $XXX form spending at program. revenue our price percentage lower per quarterly is of approximately also a infrastructure to a employees period, We quarter less end return million have an our of during repurchase per authorized of the driven XX the continuing total these At cash of in -- dividend regular share. we've Since $X.X XX%. of this date, outstanding repurchased billion. $XX.XX initiated for approximately share by

during We ramp our the year to expect signed related of workforce begins the the slowly half and investments to of last the second return late global to increase as deals office. year to

of end to revenue. first half full now lower year spending, of capital as to lower X% the expect outlook towards X.X% a Given prior be of revenue our the for of expenditures we percent

billion, strong and me to revenues Let better our be to of outlook half now constant X.X% for X% prior growth update full X% billion now an to representing year-over-year our and visibility $X total With turn expect year, full X.X%. currency between to first outlook. on compared our year to $X.XX we the of performance

X% growth to outlook of now to revenue to a basis XX.X% expect on X% we a XX.X% range XX% X% For the prior or in be basis. or to constant Global currency XX% to of currency on Clients, compared our to constant XX%

our GE sequentially third year-over-year a year-over-year half grow at double-digit we of the quarters Client change remaining There the at of in to no XX% and revenue outlook both fourth is full with decline. second single-digit growth For an Global to year, rate continue prior those quarters, the approximately a year low to expect rate. during

the margin expanding performance are in for the our outlook from first GE half we million related expectation effect to be adjusted year, to of into would account revenue revenue of to approximately XX%. year the approximately prior operating income XX%. adjusted expected Taking of full Excluding the operating XX% margin approximately XX.X%, full year businesses, to $XX up in income decline GE-divested our the our

We expect operating and research support the deal margin absorb investments and travel-related of sales long-term we costs growth ramp to marketing our initiatives, lower increase be transition and to relative to adjusted our half will during activity. year development in ramps first the income the as half and second related

basis of We points point by to improvement. XX gross XX margin also a our our improve basis versus year-over-year to basis expect expectation points prior XX

Given earnings our up this between higher now $X.XX margins operating of estimating updated XXXX adjusted outlook, we and and and recorded remeasurement per estimate share due we $X.XX for year quarter. from $X.XX the prior to be gross to to $X.XX to income gain $X.XX related adjusted $X.XX, expected FX the this full are

million average in We for assumed of year. a weighted our EPS count have share the XXX estimate

year-to-date given versus anticipated forecasting lower the range. flow cash our $XXX above be When our let of to expect operating million Additionally, ratio. now to call capital the X.X of times back to expenditures that, cash net X:X free approximately times we over With for Tiger. income, turn level our now me performance, around the million flow are full of new year X.X year, historical with at to stronger-than-expected prior we least level combined our million $XXX $XXX

Tiger Tyagarajan

Thank you, Ed.

him my Mike? comments. our team, I'll and brief like make a give welcome over few to to once I'd Weiner remarks, again to the hand call Before to I closing Mike

Mike Weiner

And Having Tiger. of you, range I clients excellent other transformation on team now been of in part undertake on growth to that position side, in the a this helping journeys other of move I'm also with a become have large also I'm stakeholders. strategic forward global the thrilled for the with in, I'm I'm seen in and to term. our on and forward businesses value Thank in Genpact meeting leading enthused join as level from you, excited with wide to side the drive by digital owns everyone company partnering executing to energy hopefully, looking Tiger. we journeys. all to team. you on person was a the I've be those the potential a underpenetrated near initiatives looking forward with market. our Thank I'm speaking

Tiger Tyagarajan

to Thank years contributions and We you, Mike. your ahead. in look the forward all months

Our of frequency for the Report, Sustainability and an we the double-digit I'm support opportunities initiatives lives. meet strong to XX first as our list, equitable cadence. embracing by evolving annual million learning nearly positioning has term. gender named a corporate us global published achieve we our move social performance very reflecting Scope emissions diversity, since efforts unwavering to in us around our that agility half XX%, of and ahead a from in were Global our out week, financial year recovered our the Employers X long revenue medium in Forbes our our completed to inclusive about hours, initiatives good is an culture in increased our workplace. rapidly growth. XX XXXX balance share governance responsible impacted more Best reduction goals. and and million both on diversity X help in pleased Client moving the employees a which continually Scope over our the focus: reflects Women X of to this past which to aligned long-term to disclosure that to We the feel years recently improving commitment by metrics and our gender our once to website, to and market needs reporting And allows XXXX in demonstrate clients. of with and of I change, for impact, our of inclusion, the wanted is This this XX% and and our community pursuit exceeding also equity point global XXXX, XXXX XXXX few our climate available

the Company's Agency. And Medicines COVID-XX Workplaces team Fast the we work year to Best our innovative named Healthcare named were of Innovators. Regulatory list XXX U.K. was their Products the for did we to and for team Additionally, Pharmacovigilance with

Before thank successfully our to we as partnering X the for during these closing, many strategy the way, achieved organization and Ed support has to I finance milestones. me CFO profitable years, want last with growth which over he our along -- led

client fortunate on will his many stay Ed transition on to We that, call have in extensive benefit Mike turn me he his the Roger. and clients. role, With CFO to with to as of back take are ensure which work very advisory to a new to our expertise to strategic closely let seamless a leverage

Roger Sachs

like up our Thank you, Tiger. instructions? open call now We the can you to would Wayne, for provide please questions. your

Operator

first from Huang [Operator Instructions] Tien-Tsin question is of Your JPMorgan.

Your now line is open.

Tien-Tsin Huang

it All best I'm role. sure be your will Ed, next and you, to in fun. the

-- can't just margin you I a sake. a time's for So without good go won't let I question asking

on is margin, you're transformation I know you're up a sure running well. Just little gross as utilization. here. helping taking I I'm higher bit mix it a heard the

of structural we look versus and what's might what in be trying sustain a midterm? sense just the get that can here here So as short to temporary

Ed Fitzpatrick

impact that's a a you've this gross costs seen an better in Year-to-date, little health XX%, to pandemic than COVID that to bit Yes. as margin we're the in on Tien-Tsin, were little numbers. globally. quarter of been did us XX%, of the the the related part XX actually hitting some have -- We due care

to we're like the plan that XX basis that's to point, point and that going we're able part And So for the more. improvement. ought at by better. XX points rest hit to like that year-over-year feel XX staying basis be on we the we why little of but it elevated we this level raised to of at bit feel year, year-to-date, I think not that, a We

of Transformation particularly quarter. also Services, in benefit in that some think continued with Analytics, the the saw we I

to in dip quarter. pretty due necessarily still really wasn't mix, we health more first which drop is was the talked care-related So related costs. quarter the the That this that about to good. The

feel about We're but -- both we're that. not the that, that expecting as margins to gross for Intelligent in in drive benefit gross balance helps forecasting continue Operations improve in for not well our our good well our of to pass Seeing as but not So TS, also initiatives productivities progress, to them the as along to mix, year. that us clients that good margin.

So all of but felt plays the saw year that what that how not the the Tiger, of still we an to anything But as quite it being half. that? the the improvement we'll first balance add else good should out. see case, be for maybe that we see to in we'll improvement, as

Tiger Tyagarajan

margins. cost commercials value like supply to sales productivity we that driving gross are connect clients. said, us chain, crime, services in commercial, financial growth see Client that all. And and would as is, all value-added covered those thing I out, clearly, Tien-Tsin, growth, to undertake the are think I And and value as Analytics can better playing average our as other you And years all, company is that those than would only we've I driven, Global pivot seen things business to these say for journey being high on the it for a that continue I say services. FP&A, long-term buoyancy the the and No, and that do consecutive drive is I beyond X thing in we

Tien-Tsin Huang

great hear. to That's

question If you just don't quick picture mind, for you, one Tiger. big

were demand to past demand lot same it through time, how digital part of earnings going to digital of of side. I very But seems the Just you be characterize this mean, environment the in transformation would quite course, here. different out So cycles? the coming you is a very, good season, compare on clear. the places, if tricky to at the pandemic

characterize you do it? how past in it So how maybe much and -- would to you or compare cycles? mean I it see longevity

Tiger Tyagarajan

given. unlock lasting things. this in the time longevity order definitely because and experience is things all is of of we now order that's for And automation decisions. digital and to is Cost insights see is that embrace a some being X growth. that are all people secular And why in to the and X to unlock But that quite to pretty Tien-Tsin, Clearly, desire trying in analytics. take terms really

before. to talked we sometimes well, past is challenge, which about before, secular And and relationships done going the does large I now growth-driven new But I ask versus me, pose close. last. the is not they this I have that to not the any take as agendas. one past cycles say you see in second is what in who seeing it would this done And if which new that those who is very many And the is would difference of clients, complex, longer big the are deals, new a have say as are thing that logos So third change we more pervasive.

Operator

Bachman Your Bank next Keith of question from of Montreal. is

line Your is now open.

Keith Bachman

a I if follow-on to couple Yes. I Tien-Tsin, could. had

year be the over on deals, margin large Is implication that so and Just on as that to perhaps pipeline that large you use the side the new margin clients Tiger, deals you new as about but there of thinking or to next there words, those different as that about last logos pipeline? come type anything think about comment, think we a with in? should new is related lumpy

Tiger Tyagarajan

Yes. kick me a then it Ed No, this. It's and just question, let will to add good off.

you a margins deals to a be us in investments create got not margin we Part about deals, R&D, talked -- of about ramps, These got and at think the just the stage But reason So out, in the -- when then the think about as And sales least and drag does particularly quarter-by-quarter into the I word think to word. next change. growth, the it the longer lumpy. relevant particularly In talk we of second to response larger year, of -- gross And a on you're marketing half ramps. of that early before. a well even cycle more. is you but as if secular as tend lumpier good as we Ed? therefore, XX, those does are business. out that work not very months, to year. the any of year get a therefore, we lumpy why those of when for margin Ed it talking the is cycles the you XX is that's are tend used We've the on also and think not that

Ed Fitzpatrick

Yes.

X backwards. many And massive you've that were of us how having Keith, large point our probably X still to large improvement or to do, take margin big was manage bookings really margins progressed it to think, had we've seen XX XX years on. deals. X on sales a basis or had we as as we I of been X We that drive able without we ago, operating

large to those pretty of might you, next to it If I And this we've X certainly able taken we'd to be that. case. So means or it I years X suspect many back, -- meaningful think deals. is, -- the this business to got And of large manage so able level far. But the a even that take if back. we've but I the it deals been have it growth because bring do the we're year won't be think probably update we in crazy manage given that had that we able to year-to-year, with haven't so we that we've amount been leverage large to have

Keith Bachman

is seeing And what Tiger, follow-up Roger associated throws before supply side, availability if constraints cost ask off strong you or the with on me meet see just B, to my A, is, pretty demand? either, I are you could

Tiger Tyagarajan

No.

on for will war prepandemic for sure. talent That's is it to sure. to say Keith, back levels the for think, that fair I be

metric pass numbers, as a had we of as prepandemic. up last good let's into expected Our but year, Having end that, that is if data which versus said attrition that watch, to were is engineering. now cohorts, pick -- I specific range the exactly is we lower the at

Let's pick cloud.

term. hot talent these market, always you very such mean, Let's about, which actually that red-hot pick hiring a XX is been when have analytics. in one talent talked long different And know, the analytics, And but we marketplace done just have at it's areas just us, areas. of I demand, hot are good you very data described in years about science. you building which for of we very We've for as why not obviously is the that. in the topics I marketplace. are the topics, And talent for

talent We our are strong workforce very in internally very from a to build analytics. part on significant

So competition back question, intense market, talent for to hot talent. your

good have think we brand I a position.

good very a well. that career people. have people We give reskill We path we

So good. we feel

we the used We there lower hotspots are very, are of hot. be prepandemic, that the to very are range but that at end

Operator

from is Your next of Dave Koning question Baird.

Your line is now open.

Dave Koning

Yes.

any or Like guess, years. really this being So maybe I is deals And of many growth some of all, related is of benefits? through first one it the best onetime all what's in of your looking Or catch sequential at years clients? kind with was some just this? momentum? transformation X of so, economic just running sales kind of driving of Or is go either sequential your in of that up some hot, the just best quarters to some

Tiger Tyagarajan

would say, hang hat that quarter we X that Yes. is Dave, something I not on. would

Just close time business. our to a takes to takes in It a it's business, time long-cycle a deal. ramp of the It deal. nature

Analytics the one of that, and half same played very ever also time, good, had, the ever looking nothing out good. that little At just the quarter Transformation X there. we've would it's unique consulting So timing had. so sometimes Within we've would is call best that Analytics call very I or of is well. There's in out. I digital at Services very a special of bit Analytics that very, quarters years the quarter, one was here best

every out many The longer we was, Operations, do convert we other of annuity this Transformation which Services, time that are seeing to consistently and leads thing played Intelligent subsequently, then follow-on to work. deals. And with is it start them

hope our to it's sales So continue. I all just and think the the come focus, front-end we team, investments, together Services Transformation team, nicely,

a out in necessarily go fact that it's and wouldn't single mean new quarter. the the there, say, benchmark? but it just I wouldn't I does is years best that X X quarter it's Now

Dave Koning

how to done number full XX of year. attrition grow years sustainable I'm normalize XX, are a just well other should and guess row, be I job bit being stuff? wondering, assume for second half Or the a on think just little of to the a as we a above the more that? number this many year in second off we just grow I Do such to a margins, down of we just And going that. just And for little year or the of Like off? is pretty kind high running kind that bps guess think year year has it's next this nice Ed one, we

Ed Fitzpatrick

Yes, Dave.

right? the the behind the first right, we half the double-digit us at sustain right? we sustainable gave second is plan As just XX% could looking not heard investments. Obviously, year X-year plus half margin. make really, of that That's And growth ramping look talk the drive investments Maybe is we're you of to in and those over wonderful. that what really that for for It's a medium contemplates investments, And little absolutely that over up about, guidance we're right? so thing. we long the results, Tiger the a growth some term, terrific, GC

given we're baseline where to perspective, be half has kind the make going normalized full that we've of whatever are but of year the So year to is XX-point talk going set. baseline, investments. the basis, for our a think this XX.X. to is about Around the new we not clear But where our not also use baseline to pretty outlook that baseline XXXX, second is from is to the We're get we right? has new going tell to the outlook XX.X% would that to you I been is Tiger from

will So our -- XX.X where it be we is expect baseline make clear. to

Tiger Tyagarajan

in and through up, in Yes. the is year, top the ramp in business, that, expect The our reality challenges that sales sales is you the second the felt about latter of India, to we what think invest if that expect the happen when think to us of marketing that And that on said in that in part COVID-XX sales created R&D and some we happened year. and to costs. R&D year. you David, marketing impact costs of and ability and our around if of most when about quarter the towards began you ramp And

of Now the second we're And going continue to continue as way right that half we margin the journey the the think full margin the about therefore, year to year. it is to as in margin half the the half is of second has sales second the R&D shifted. than But margin, that a little because and margin. and rather off some first half of work bit of marketing

Operator

Blair. Nolan is of William next Your question from Maggie

Your line now is open.

Unidentified Analyst

on of Ted Maggie. the logos. at that for beginning mentioned is you the of increased pipeline the This new call has Tiger,

composition prior the pandemic outsourcers? years? how of terms And of are to the in couple last does the or proportion pipeline, So first-time compare what the over even just of that of to kind

Tiger Tyagarajan

Yes.

is frame. show remarks, outsourcers So to it to I analytics to it's growth. quarters, cetera, specific that is growth think many we to is to continues opportunity to couple there drive jumped last what don't to and is the well the And new my are into as that in who out actually a cost logo, pipeline can say have the to tide I we've companies et to was industries to leverage productivity, we the that, first-time need I all technologies, be Again, those data trying numbers. as continues more there say that really grab called leverage lifting of say think reflection all and the fuel have and a All that rising change of to new in I prepared in order case. transform,

a I've years of which this couple of call than as of saying, versus is compared more what last the before. number back, So is X outsourcers out years just been back, I wouldn't X anything to quarter the different continuation quarters. first-time It's

Unidentified Analyst

then that for to to about to targeting services And just capabilities you'd overall add you're Are ask M&A. portfolio? follow-up, one that I certain wanted in offerings like of there terms the

Tiger Tyagarajan

mean, of to more value will and you the it remarks. the be pivoted value add, I Actually, called look of financial cost, some higher things out services with that nicely my driving at are risk. that in client very if let's intersecting I crimes beyond some take prepared

of cloud, for X to experience. the that think commercial take, a And Let's supply our to last done of service from would I sales mean, add. analytics thinking X acquisitions years around line we've capabilities be chain, example, then when kind areas areas those about digital, and the continue are about in perspective we or FP&A. right the

the year be So and add acquisition team. strong of worked to we very really engineering have We at analytics team a finished the of data the to company. great a really, that's last Enquero on experience the around to end out digital And cloud.

from focus those both and So get areas kind of M&A. from build organic to will continue our as as attention, well

Operator

of Your question Citi. from next Ashwin is Shirvaikar

now Your line open. is

Ashwin Shirvaikar

from of be done great I that on highlighted, imagine Ed, question. that areas service that them would Mike, that need has or you Barkawi a of building in off benefited to it's M&A whether it plenty The did, or guess, start let last you X informs lines, future on your of working there's perhaps just with to M&A areas. Because welcome. Curious with me what each you, terms Tiger, if the Rightpoint you good-sized and have? seems you do view down I adding these keep in Enquero. feel even double acquisition

something talk Can consider like in you M&A a supply opportunity. of the on going bit even Just chain world, that's consider what's perhaps Will given huge as about little scaling that? a driver a up growth? you

Tiger Tyagarajan

Yes.

engineering, or those time want the and so in crimes or at So to on. financial supply us by right build journeys capabilities I spaces cetera, et strategic the And was step data a saying to to go Ashwin, great are our to first start chain for decision right that expand, question. into,

and to partner to nothing to we actually value that then do capabilities own and has got capabilities, first with areas proposition. have we value gets the which and one of Obviously, growth for been step do wanted. expand M&A. capital trying do. the that then say that's areas. our vector. we all we to great to probably found look you the acquire? fuel it ones know is So choice journey do I'm do that's do which a chain So most home which Barkawi, and At with which a a time, now supply something to ones be grow will supply be to, we is we It's in that, X say okay, differentiated We going And clients you opportunity to surprise. chain best we've acquisitions, build faster. that Therefore, gets create exactly the obviously. no run. big add then our we is And to a and the to said did the we let's and Then to races decision intensive, same what have we choices. not it's chosen It's such Barkawi, what that got do And actually to want to

take at. service one Not have that pandemic. hot existing getting So chain change. service But choices a exercise we out read need into pandemic All through pointed much you figure lines for so our good topic then service the and do. that there well very to seem lines. rightly our new lines. should out, the at strategy add example, before supply our other is stood moment in choice areas look that If pandemic. Are is to new such had undergoing typically through made what more lines enough we've the exercise test we there's to lines do we every the were much have And the the year to we We we are look so the and choices service about service at at? that runway feel existing

Ashwin Shirvaikar

useful. No, very that's

before. you ramp lens set you terms of I contract from The you your existing any said this, think first-time change to do mentioned, the you in seek was And I than ever ask, Are as wanted find other you more outsourcers clients? contract thing Are out do work a to And different? to shorter-term What's Ed. these first-time that? quick side attach on ramp in want proportion question associated about of I do these -- they with have sneak Do higher they faster? much different outsources? a analytics-type

that? million other what the income, in was $X With

Tiger Tyagarajan

Yes.

over So Ed. let me one, the to then it answer and I'll first turn

advantage who undertaken in And people in learned the who the can people new leapfrog lessons, they can leveraged. et back now using be They clearly, of journeys, that can cetera. the coming think Ashwin, also technologies I is these can have, that they other leapfrog. are that leapfrog

that operations contract to others. in supply the just speed back learning models of learnings their set but for doing from So start exactly -- to is on speed leading I use the it that and drives of the actually all agenda to call, the a straight on different in move often people supply for better the the the examples that data them that's is to market. it's learnings chain drive once fact more all ride that clean solution their of gave use actually subsequently have a the jump are because machine faster what necessarily with cloud is pull why can of So operations, change to of ion not that of in. them Therefore, is systems, don't you A with example, guys that off which the you they for inventory demand on these start outsourcing, and to do data these manage a number signed, And cloud, one that your that and drives me? change establishes, that can the question, means the take often The now happening. discussions happen. order technologies data, gate, new our often for attractions is the data, with and to number to of out better actually, we analytical forecasting conversation ability build the that example, insights

for itself, much the they it say sharing would answer all now is of more final attached components models all of contract then and attempted by those a often reward play in the said the here now. to reality time, I longer these. that It these and the solution to us to Having first to value Alternate contract it's close So between because of get your out share more sometimes a takes coming I the the it. question, commercial these that that, journey. and part and the client, are all has but is takes sharing in gain a risk to much journeys. commercial starting where But way, a longer

Ashwin Shirvaikar

Understood.

Tiger Tyagarajan

the second question? to Ed, do you take want

Ed Fitzpatrick

Yes.

basis all in positive. $X million combination a positive items, But about of quarter. quarter, The income not have other sublease income we on rate each this was That's typically run a there. always

recovery but And compensation -- And We on related the of taxes It's expense. identified actually is been item a a item. have on bucks. The in positive. have The that -- then couple prior that's goes return also portfolio deferred to relates periods, pre-GE we the million in an there. been related plan. a that to offset tax that's there's negative of

the the So it was items just a included recovery on that tax Like item. there. that that was of majority are

Ashwin Shirvaikar

Okay.

bagger Sounds like one not big stuff, thing. grab

Ed Fitzpatrick

Yes. Yes.

Tiger Tyagarajan

Yes.

Ed Fitzpatrick

-- $X $X you'll range, a Typically, all it see higher this because to million million in that little was those but positive. are the quarter

Operator

Cowen. question Bryan Bergin next is Your of from

open. Your is now line

Bryan Bergin

wanted welcome. on Mike, follow-up here margin outperformance. I the to

is or curious, pushed what some it's and to? are into of that to scaling you sales half? And items the like those was any relative directing of meaningful this R&D of expenditures things and are force S&M like timing specify the plan I'm more marketing just shift the some that? the if bigger can all So like in now events you're to the second clarify, there that

Tiger Tyagarajan

Yes.

it. India, then some X kind and into clearly, and around the and of to end off had resourcing So be have of we quarter. into in add when fourth you sales the that -- is second COVID-XX had X to I'll of to third the just that pushed start It mean, Ed, of quarter spend and I R&D the months impact

more timing and a got and onboarding, and hiring So that just of was of that was -- much versus that expense plan.

add And in the services, is to than of in nothing the to models R&D those services that, the is that's that's and that winning, what actually one we some aligned data there's to reasons we of to situation Our to plan couldn't want up of start data we else. Those which want most Benchmarks customers, a the side in specific end dealt therefore, the of those is we building us. and the services, the said? it a have. the And those out earlier. bringing the building capabilities of models end little benchmarks. with a that core that's the models, we what on clients number about, offerings nature have, getting was thing of benchmark I of Ed, COVID-XX we teams you Other creating capabilities. that big that getting aligned some around up, execute to And that together, adding from talked India. I that have service through

Ed Fitzpatrick

we it -- was talked it about Yes, well. as

a that would First bit half, we'd assume that, quicker. ramp

Bryan. half, the bit So little a a you of second is there, if there in will, catch-up

result, and a conscious rates much that and obviously, like. how So as of at into looking then the following obviously run very -- of the year, goes we're

will as that's resources it combination So be people. adding outside of of some other as spend well

Bryan Bergin

expand And you that fast for clients. you then potential operations geographies new in any into? Curious you I are break plans recently to announced local to how to think, And plan considering region? Germany, scale also

Tiger Tyagarajan

No.

time, some largest set with Munich, think Barkawi mean, supply economies one I clients. capabilities German strong through it's a in no for presence world. chain, I And now been has the Germany surprise. acquisition, We of have It's cards quite which Bryan. the in of has the on the a in Germany

months I have and the work our we've our Services capability a think And has team, culmination we Transformation place. over actually that XX, together of bringing been strategy all teams. front-end team team, XX our the now last that done team between in

a in of the et leader, are We hiring process cetera.

to trying years And good that feel time And Germany. that clients success. was done in we over great that, a expand example, good replicate into we're So significant many the what more to headquarters that's Germany, to have we've and a actually in for in and plan. Japan this presence is that

Operator

Your is from next Tandon Needham. at question Mayank

now is line Your open.

Kyle Peterson

for that BFSI large I what out particularly demand to kind It's being client with for the asset just are restructuring But verticals verticals? that kind how is guys? of actually touch really on like Kyle Peterson are a of you Are I fast client. environment, Mayank. guys different there wanted now? as mentioned you of in any in seeing management jumping adopters demand know right outside you there's some on

Tiger Tyagarajan

that of good. demand actually, outside is Yes, client,

remarks, particular very I getting. are help of risk, to marketplace, equation, got Earth make e-commerce other scale. themselves that more kind our to the area, prepared crimes if way that, actually I the crimes that's has the the we're driver, As requirement they And the the when capabilities big in nicely. the one growth drivers of big is to marketing cetera. the almost with AML, bear, fintechs connection out bank And becoming they mentioned to financial one the in traction ecosystem. of bring is financial is in of areas et our and you and you that similar and intersection fact digital. only of those client which platforms good of when getting my trying scale drivers, grown We've is financial online traction that to from the the risk, on of that of think out the the take build that all every people pipeline then a engine, risk that's figure apart big whole very those not as whole traction see payment And and need KYC, that they that clearly, crimes, And same of

seeing in more them really now interactions, is not that the taking good banking digital, at but all omnichannel good incorporate just banks middle the and become helping up machine that solutions learning-based think As to chat collections. interactions. very we're that And service, that customer we back management, capabilities And the fill pipeline. in traction I front end, more and in to are portfolio AI-based, we and have end, of connecting

Kyle Peterson

some change any or guys or of discussions client of given equation, of some any of side really quick then seems And delivery withstand case definitely this. to kind the the like you house pace the one It order have regards the just But to other like the side like of able in client counts guys weeks? in of and of have on in be anything those variant sentiment with noticed concerns. to you follow-up Delta the recent the COVID

Tiger Tyagarajan

mean, go our for situations, with Australia, et which would And remote. example in I nicely, Australia. teams I very lockdown, call cetera, ability nothing to all as decisions, up as obviously, go the clients lockdown, back would back No, that back our When to specific Australia -- the areas into local. out into be an went to interact opened had in those very are had

or U.S. it's meeting But beginning U.K., client If it's clear to meetings cetera. very you now the are not People It's very groups it situation. meetings pick client the landing look people client slow. not at that measured, the case. up. up in are in are prepandemic each other that of in It's et as offices full, same large it's for the was very a

in Our in Philippines than operating other operating Delta back of places parts get thousand the much be all to really people few or most to still working the all teams in and whatever point to a a a environment. more being those variant China a to in of world hybrid mode. and to the variant continue where the report of safe Until point get whether it's vaccinations, then of get

Operator

Bank. question Keane of Your next Bryan is from Deutsche

now is open. line Your

Bryan Keane

running know long I we're here.

doing digital And analytics. well quick that's just everybody you about let pipeline, measure about the versus how doing on conversion because at know the of fair talking gains share? you So across I'm is market? guys Tiger, your you when look How thinking do the rate the you one are just share well are one. how me IT guys market doing board. services, and if do getting ask you

Tiger Tyagarajan

know in out figure Bryan, I tough question. It's industry, tough you shares market that. very you've to our very asked specific mean a

a seen aging we track client then think account pipeline. that the the that both create look are or and convince able we one, those choice, everything going with one. the new And defined we in often that how regular flow, at be access the In if of we to Are of we et in able prepandemic, work environment a market if is with And our the seeing cycle time do that's and verticals seems ultimately, source the able to us are because X us comes we clients terms in And to get X those kind the where about Are X in makes it's So the the So win at clients? best track. to And our last for are to is, I target target So client? we us right actually second already to we've we able right aging is for solutions it work to an to know situations, to? have exactly as the attractive then clients, manner? of we we have to things cetera. competitive win? the things. have to conversations that of able sole thing look for client that And are the rate way to that that work in we a always we we opportunity? competitive existing to are in deal to clients new And those or aging rate out? at finally, working that

time, pretty you the some than look prepandemic back at actually to in is good. it's there was no the of the it's When it what So but slower deals, that. worse aging larger

And and are existing in in win rate target we the are our our of clients partners? combination of the clients, a what's conversations it's is constant our So steady? and aging verticals." no our the and say, and in report services is metrics kind exact Unfortunately, at. specific at "This can Those our specific of share market we there's our that we look that look

Bryan Keane

your And to is getting? share in that Tiger, that you're your rate there for go room up win eyes,

Tiger Tyagarajan

between bigger be pretty we client continues that do a value about to the this the data How say rate connect I centers? And areas new of finance, many created, best of those connect best gets how talked clients. when over various the you focus when in we would have. open when and do win created do services? of the these is dots lines, have conversations? the crosses we opportunity I service buying for chain we we How the supply gets value So good some the and some days expand that

So rate. it's win really versus that

have of a most good competitive pretty I win rate situations. these think in we

Operator

questions. further for the the remarks. I additional like over call to to turn would presenters And no

Roger Sachs

for forward you everybody, Thanks us to look Thank next again. as And you, joining today. speaking quarter. always, with

Operator

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

You may now disconnect.

Genpact Limited (G) 6 Aug 212021 Q2 Earnings call transcript