Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen. Welcome to the 2023 Second Quarter Genpact Limited Earnings Conference Call. My name is Chrystal, and I will be your conference moderator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. The replay of the call will be archived and made available on the IR section of Genpact's website.

to Investor call Relations like Sachs, to now of Head at would turn over the Roger I Genpact. Please proceed.

Roger Sachs

Thank to the everybody, quarter XXXX. of which you, and welcome earnings review had IR section was you to afternoon, genpact.com. Chrystal. a release, our We chance our hope earnings discuss ended period call for results June XX, posted our the Good to second website, to

Officer. Weiner, Today’s Tyagarajan, Tiger will our full and our through are for Chief Tiger take well call financial current Mike your Financial and our and our closing an follows: year overview then for the will today’s the on as strategic remarks, update Speakers will and an our then come on of agenda will results CEO; XXXX. be President provide as walk some then Tiger our and back provide will Mike questions. quarter as we initiatives. thoughts you for performance our outlook

last We expect the call about an hour. to

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

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

our posted of reconciliation the the find to of in earnings can measures website. to You GAAP today’s IR section these release

to turn let that, over me with And Tiger. call the

Tiger Tyagarajan

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

beyond. XX% second wins. for highlight bookings and in I for in momentum large logo the line go of expect strong year to I financial the XXXX into This currently our XX%, driven strong positions the Before deal new top We full by growth growth would and XXXX that bookings continued quarter, the quarter. performance us

great EPS expectations. bookings a from income adjusted operating diluted exceeded with our quarter, margin, flow cash all Along and adjusted our operations,

digital clients, will they are to While This data high through AI triggered an leverage more accelerate value AI. us reduction us deliver continue to their priority to and journeys, remain end-to-end desire cost allow transformation by increasingly to augmented help services. a to to turning them for our

Specifically during second $X.XXX we of on revenue year-over-year. up basis billion, Data-Tech-AI and revenue services Operation delivered million, quarter services year-over-year up X% of $XXX of constant a of XXXX, revenue up $XXX year-over-year. total X% Digital X% million, currency

operating earnings basis income and XX.X%, points of adjusted XX X% $X.XX, year-over-year. decline We of also margin a adjusted year-over-year diluted delivered per share up

operations, our same Our replatforming spending short the in second areas This at and revenue and below was on across advisory current during continue work. structural pressure verticals to discretionary focusing time cost top related cycle environment expectations. reduction, to seeing incremental prioritize the quarter because transformations large marketing line reflects the on industry while project

volume also macro clients reductions from by high-tech some our saw headwinds. driven We

grew we X% services of a currency solutions our business on and build transform near-term result a As to Data-Tech-AI where constant clients these basis. challenges, design

While run basis. digitally was digital on services our constant currency X% we and operations where up transform operation a clients

to greater our to will total these X% detail currency of updated X.X% the expect year provide result our a now increase expectation to on on outlook. prior revenue of to compared for we full basis, Mike year full As trends, growth. constant X.X% a year-over-year X.X%

business demonstrates bookings. model. remain year with XX% the saw the we our incredible majority near-term revenue services earlier annuity of based, approximately nature, record Despite which our The momentum half long-term strong. remains and first of new as we continue our deal set the a deals year for in being second demand the pressure, for of resilience The in quarter

$XX are were over above at signed Both total the than of this historic large value above levels. In of in rates XX%. year. of we QX averages this our following Win deals, contract well all we period six million more QX, five historic signed

nicely large we roster client the during expanded new added XX also including quarter, teams. logos as Our three

Driven reached all-time large new robust new deal including high, by several inflows, opportunities. pipeline our another

models seeing AI trend them dramatically and better the its machine are We an business getting learning helps and prepare All large data to of and clients consolidated, to in on Gen focused data AI, quality cloud. migrating that this increasing improving and language predictive their outcomes. deliver use orchestrating

of last expect growth our Given XXXX level currently XX% above year-to-date $X.X pipeline, we year XX% of robust full year record bookings to and bookings billion.

a not given in important are outlook the the as it's our the now clients thinking seeing, shared are to themselves so AI Gen do we consistent While we we thought setting up shows in about the future. past, have to it bookings strength leverage way

add me we quarter. the Let some large color the on six signed in deals

we company, and from and of all their their applications systems integrate be technology while processes transition will infrastructure, including For cloud we to data the of platforms, a global disparate their managing insurance acquisitions. and large all

based other the a win-win technology their as will to and use will over management. in their whole will transform fraud operations. to lending, For and operations digital time, pricing, true global providers and run largest and deposits, The AI platform one fraud, technologies alert collections, we run of we create contract is Gen financial chargebacks institutions, transaction

Our domain winner was depth the here.

company security care an and customer We are technology partnering to operations, with all accounting corporate their and run finance services. of eCommerce

AI to create services. technology to and apps, leverage ultimate the Our improve to The Gen the dramatically cloud objective the these is customer run experience. modernize move is capability to them plan to

transform food the to competitive finance America here relationship to North highly to our their data global in markets. EMEA The replicate analytics successful and and our to execution predictive of from advantage a next the in AI with standardize leverage objective all operations streamline journey. Gen drive company expanded their We is

reduce cash and flow. insights Gen advanced to costs, real-time AI finally, And technologies, decision critical analytics business, client, improve for grow we large digital will and their a industrial provide leverage to

We their of combination a also digital with build as office financial our help account and other our designed all build user experienced global front back team, running. and our and The an institution detection to fraud interface, functions, customers. as well technologists launch relationship banking option the customer which and are experts, digital savings service expanded end for we now

quarter, make five great progress During continue the we initiatives. to on strategic our

XX% from our First, approximately grew total the during revenue. quarter represented revenue priority X% year-over-year accounts and of

off paying in approximately these priority half are were first XX% investments from accounts. Our clients bookings our of our as

over the continue We to this average company the expect grow faster than long-term. to portfolio

we technology IP solutions. joint continue and whom players deepen Second, creating partnerships are our to co-innovating the we with cloud with

solution launched top For service real-time we to AI companies example, oX Gen as line supply chain reduce Solutions, a and supply helps with clients help chain supply planning disruption. and leverages costs, growth. The a offering ongoing drive eliminate chain inventory scenario provides navigate excess that

to solutions with global Genpact's Microsoft embedded AI talent services. so collaboration in enables our open new Our service, build Microsoft Gen can access we Azure implement AI and

a with financial We practice of cloud help AI Cloud are verticals, building businesses focus team services. solutions our particular to Google with based chosen on accelerate across for a Gen we're AI the deployment

regulatory are building reporting Gen and bringing In a close we to company. with collaboration AI-based power large solution global AWS, for a market

centers be ServiceNow partnership IT by across capabilities to the multiple our of buying of process strengthen function. domain outside choice deep continue ServiceNow bringing workflow that and our the We to with allows

pricing. new journey to in invest access operating diverse we non-FTE Third, year. in to outcome pools. we're we and new our based seeing Tier providing to Fourth, continuing this of larger based momentum third India, more centers models, In us cities commercial XX% July, our in are great center our now X and with talent transaction These represent such as pricing and revenues. based opened

pricing. we generating driven hit AI-based half our well finally, results, solutions. This now also both and believe our bookings goal were by bookings recent the XXXX. of our one-third in that XX% original large will And are team of increase has investment importantly, And before been in great revenue non-FTE More our first pipeline. of in deals our penetration we

the quarter, at rate significantly lower with and XX%. during last lower of than service, for for same expected, even the level months As now than XX% it's attrition year. stabilized employees our and attrition the has X attrition XX% involuntary was less second our Adjusting time

industries. spend on our I now AI refined leveraging we journey plus X approach back Gen our And relevant our AI then, last and have systematic few me business. services in to our years started since resolutions AI our for Let and of and a we minutes discussed each developed capabilities invested, quarter,

three resources our actions Gen and prioritized in areas. broad AI We’ve

First, we are service Gen are that disrupt wide for open areas us less AI new to for models. penetrated using

gain and support. market care, commercial Great strategy are examples of This such allow us and will this to and off-end We growth. services FP&A, drive us. marketing digital sales calling share include customer for

services third, as This knowledge cases margins as coding. Second, outcomes beyond our financial such HR, recognized internal use services will in a we our And and for training, rapidly can deploying infusing are and services improvement are improve where clients. supply own act function step a such just AI accounting, crimes walls as to areas financial productivity. Gen our within we and software we drive management, chain help and create Gen where risk AI catalyst prioritizing are leader, and

me with few Let now examples. to life this bring a

improved models the weeks process, the of at world, revenue machine SKU at while we and time have companies that to same minutes. cycle in cutting leveraging a range, significantly reimagined consumer the to range forecast time, accuracy one XX% a from forecasting brands largest For learning the level, an global AI XX% from

automotive real gather agility market driving global in Gen using product in response. our time, summarize manufacturer, to AI For competitive we features are and their

insurance we process more and using household reimbursements, to to settlements. accurate information product For we're for claims collect determine pricing for used AI pricing end-to-end to and a analyze leading faster company and their global claims more insurance accurately goods, Gen run where

in reducing AI positive true digital the institution, Gen potential for services. transactions customer to transaction are AML and of using For determine a and notes, financial keywords our false alerts KYC nefarious suspicious we meaning

AI developed time. agents customer that quickly understands are disputes For media data entertainment to care by online responses analyzing a with Gen sentiment resolve customer company, chat global help we real customer and using ideal

global a payment engine and questions devices contract terms we with to equipped medical a causes, company, to Gen real vendor AI team procurement For with related disputes provides address answers actions. time the recommended to that

for emails sales. Japanese and customer and rapid technology we responses charging For a large translating satisfaction customer improving are conglomerate,

While still internally. to tested them. for domain industry and the fine data, for we playbooks language are believe of to We our large our led have specific build with strategic given days, or solutions, XX domain frameworks excited data. and tune client These plus AI create clients are being that understanding conversations data these client verticals to Gen more models and specific I'm the to Gen uniquely roadmap positioned than with XXX deep either AI a clients early we have so across

The delivering other focus have change is deployment, AI on partner processes with of and end-to-end to solutions. new adoption outcomes. advantage This clients management we these and us historical our on understanding our allowed

this growth and new long-term many Gen of deal up new quickly margin expansion. AI, embedded opening All for led with has and opportunities to flows

As will increase market our clean I grappling models cloud large said before, wave data every has to enterprise technology We orchestrating and data total and leverage addressable AI past done. every accessing this language the models. the at is in to with believe

expert and of years, out we acquisitions own investing X IP include data deep co-innovation AI innovation inorganically creating brand our approximately as on R&D and invest organically will Data-Tech well $XXX in analytics both AI as the frameworks skills our programs, next the teams, build This models. to to use groups, plan and continue focused and capabilities. and data in million, training Over to

turn me the over Mike. to let call that, With

Mike Weiner

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

was services discretionary but well for and spending, automating in as and cycle AI total as performance accounting due vertical. of revenue, our X% currency a largely demand services, financial This finance represents tech constant supply Data-Tech X% lower short by core functions. client's revenue to our expectations chain below basis, ongoing our year-over-year, on which XX% increased services driven primarily

partially or high-tech X% our services Operations year-over-year revenue, constant and recent X% a from wins which volume XX% offset reductions Digital of due by currency basis, from total existing in primarily represents our deal counts. on ramps to revenue increased

deal Operations We improve bookings half the to during year ramps second his large to the referred that earlier to expect performance remarks. in Digital of large from relating Tiger

lower Digital vertical Solutions, health strong year-over-year, a spending. discretionary year-over-year, services From by current project X% our largely Consumer insurance financial ramps to largely declined partly driven perspective, client by increased legacy due clients and for offset last and lengthening by demand businesses deal process care second of large held-for-sale. X% and partially well continued as This for half we year, improvement our solutions. the demand saw previously during finance was enabled the tech of of as deal classified as cycles we divestiture recent impact offset accounting tech

and reduced increased new engagements, that High-tech mentioned earlier. volumes chain ramp driven accounts Manufacturing of supply ups X% I offset This logo was by primarily impact wins. by High-tech the partially in and

to XX, During XX-month the number million XXXX, XX and greater clients X than from X. annual from $XX revenues relationships revenue of $XXX ending expanded period million than Client more XX XXX $X grew from than June we greater client the from to XXX. million increased to

points basis efficiencies. higher margin operating sequentially year-over-year XX was gross points to operational and due XX up income XX.X%, down Adjusted margin basis and

year performance is As excluded held-for-sale our our the cost we reduce restructuring a from impact a classification million actions included last non-strategic took asset reminder, a and to positive charge related quarter runway to a of second the $XX for basis.

charge of Gross in XX.X% and to absence percent higher for restructuring basis largely year's was partly a as marketing absence year was of in that the that of quarter of points second prior second due XX cost SG&A to -- sold. and basis more during to as of investment year-over-year XXXX. improved restructuring year-over-year goods mix, leverage sales revenue included the the in quarter the offset the than XX XX.X% revenue operational the margin last points the charge expanded

year-over-year primarily $X.XX. was X% of was shares in as $X.XX income from operating the EPS impact up of of as by last $X.XX higher the the driven year. quarter $X.XX increase adjusted lower positive second outstanding Adjusted well

was last of Our to effective due quarter second in mix year. down compared from tax largely benefits XX.X% of XX.X%, higher last to rate discretionary tax year, the XXXX a

driven $XXX of in from On up our during expansion year-over-year improvements in days was million the During The DSOs our X of operations, days. the $XXX quarter, period by during to same year. we XX XXXX increase cash an a year. same improved primarily the last DSOs generated the from million last period quarter basis second sequential versus

remain remainder the low to the DSOs day continue expect in our year. We the to XX of range for

$XXX largely to Cash and totaled the cash end the return compared reflecting at of equivalents to of shareholders. $XXX the million million $XXX quarter of XXXX, first million

With we reinvesting the growth our debt continue four to Our net rolling capital for to allocation debt liquidity to undrawn of our acquisitions, EBITDA and capacity, ratio ample includes to shareholders. that balances, capital existing X.Xx. opportunities quarters have businesses, strategic cash was our in capability on return pursue and strategy execute

X We EBITDA our to net our to in expect Xx to to ratio continue debt preferred remain range.

year We a average X.X execute the on we full bought expected set $XXX XX% to share for $XX.XX. million off our the program, our During year we full for approximately of repurchase back activity continue dividend, projected XXXX. which will and with is of at our of shares, million shares pay an per line flow. in share of of million repurchased operating total now $XXX this cash quarter, expectations and our our cost With have price

Tier Capital approximately X centers new as a expenditures a of related opening investment We the half was well operational the to during of year in as higher wins, large new second X.X%. percentage revenue as anticipate activity deal of level cities.

our update Now outlook. let you me full on year

skewed the have their project. a than period. become transformational multiyear cautious they mix time, same base gets as less more spending advisory impacts deals. revenue which up revenue dynamic to As as near-term deals over short that Tiger cycle discussed resulted large agendas, clients earlier, towards our large related recognized focus growth cost with bookings on we discretionary on This are At prioritizing in

result, we and billion of or As currency a X% total now between X.X% to be growth a $X.XX billion X.X% to year-over-year X.XX expect basis. on revenue X% to constant representing

including to faster to margin expect income expansion be at margin pace to have approximately investments continue AI, XX.X, operating to We strategy historically. aligned drive related with we than full adjusted year done our a our

onshore continue our relatively to expect bookings down compared of we XXXX field to slightly gross full recent our initial flat year to XXXX be many to having delivery, margin large levels. Given

effective expect XX% of XXXX XX% full We rate year to our continue end our to the be higher tax to range. in

per year share we updated full to and this impact share. $X.XX the year-over-year per repurchases year-to-date outlook, expect XXXX growth Given the now of includes for be adjusted share positive between This of to related $X.XX earnings X% a representing to $X.XX, X%. our

cadence comparisons half year. to large to second year. Let with growth ramp easier year Therefore, bookings, second you related half quarter-over-quarter through fourth to to remainder half the deal expect mid our facing high for our to year adjusted be as me growth the well third the to income quarter. single-digit the update we anticipate the build of and an the revenue slightly year. the on growth the we first relative quarter revenue year-over-year activity as of expect thinking we expected the Due expanding for higher for new the single-digit in the the operating of of

We levels margin the now growth second adjusted sequential expect half investments revenue our operating we modestly expand of the that absorb during with year. the higher of to income

$XXX year to a flow Lastly, approximately of full cash operations expect million. we continue

pipeline, we we billion. to $X.X currently last top XX% As our Tiger return expect double-digit XX% bookings growth, for record to organic to to and year-to-date expect discussed this XXXX. year's line earlier, growth the given over full bookings With robust XXXX grow anticipated in year

Tiger. the me call over to back that With let said, turn

Tiger Tyagarajan

you, Thank Mike.

operating plus organic through the to historic As remain we at pace and revenue a deal our macro with growth ability effects margin expansion XX% the confident very levels challenging adjusted and environment, income XXXX. faster we achieve of in

seen half couple first our trends we of point exciting have I out bookings. a very in want to

technology are for pipeline who and Our year-to-date, the and showing understands XX% drives technology of as is tech us a services our bookings clients up deals partner our have results. desire to robust, business

XX% trend strength position. clearly The that solution, our showing other data as of the and tech differentiated the deals, [ph] AI exciting data we in tech is a embedded market and analytics, domain have

the to With troubleshoot, network see optimize Gen allocation, AI analyze total well to as their with leverage productivity believe, enhance us. amounts the for generate vast we decision-making. as unique clients we tech stack, insights expands code, of for to to market system configuration resource greater help significantly opportunities striving information from right This,

that It an retain heart digital learn work of that to for core a proposition well in innovative engineers new is our great AI the make is helping opportunity data group skills the value fostering generative talent. known is as clear an culture Gen center and domain as and for attract skilled us excellence. of of highly up scientists, our and At AI experts organization AI

employees our our in the we has over journey we more Through program, contextual XX,XXX Bridge AI new members our than X Certification Data XX,XXX This have a program over data and global sets the training us workforce that up where launched past of XX,XXX literacy. enrollments program. trained for AI currently years recently Gen completed

We XX,XXX trained have approximately prompt members on also engineering. team

near-term related our primarily future ready. Despite remains very some discretionary pressures experiencing spending, to

be minimum low pipeline bookings double-digit our sets to XXXX. Our top of record a line nicely for growing year-to-date and up growth quality back to us

back With Roger. that, the let me to turn call

Roger Sachs

open-up instructions? you the Chrystal, We'd please call can you, questions. your our now provide like to Thank to Tiger.

Operator

JPMorgan. [Operator Instructions] question from Huang first our And Tien-Tsin from come will

open. is line Your

Tien-Tsin Huang

wanted me airport. you I first Good on me? the revision. the Can hear revenue you just can hear I'm hope ask in Thanks. to I okay? afternoon. Hi.

Tiger Tyagarajan

Yes. Tien-Tsin. can you Yes, clearly, hear

Tien-Tsin Huang

lower outlook saw. you maybe in revision I the a attribution cycle as assuming ask Great. those volume either that half deal revenue areas? you lower being is outlook? just between the in the really work are want half well as And recovery second of about Thanks, on Tiger. second Or any short large it just [indiscernible] the to and wins the

Tiger Tyagarajan

Yes.

great So Tien-Tsin. question,

short any actually to crystal cycle because you need not that a ball conclusion. we're one, So for get assuming to come recovery

by continuing And consulting work doing that. right half with second we're most the deal not technology see cetera, the of advisory, we're is to and et wraps that driven Data-Tech-AI as the that as in large ongoing journey well going is growth now. So

relates high-tech change work. reduction We are be not earlier the and of your the like, half. part as in for, we the advisory saw volume second clients probably And the other expecting the would that a it accounted recovery XX% XX% to revenue question, for of

Tien-Tsin Huang

the Thank answer there, you for Tiger. complete

margin any ramps. quick Thanks. Any versus the deals, of How follow-on profile to question So deal [ph] momentum, do the great what them comments there. obviously, that's the look just just some the timeliness my and they associated on of large some of with seeing? rebatching accustomed of on you're those

Tiger Tyagarajan

great question so again, Yes, Tien-Tsin.

others And it's about think So have those one, only don't. of but we have. a typical XX% of deals and rebatch, each component the mixture I that's of a deals, the

transaction-based pricing third than That's dramatically more rebatch different. typical half we with significant clear profile not And the that any difference of as margin combination it's So in the it's the know, pretty pricing different that large years. deals, as True the a you and commercial been always not of is model. over one. have have ramp. something non-FTE one many pushing, deals hard I And called regular a these out, first in and that deals

are we to begin it our solutions, into client. win-win to in AI Gen to solutions We a AI seeing solutions allows our think that us makes integrate that momentum value us marketplace propositions around the our the and create ability those that and between

the value we is case the the the margin will about is real deliver is the that but profile margin actually, grow I more as think for clients. So profile no would way here margin our different, base profile opportunity

Mike Weiner

Yes, add that, just I to would on to Tiger. like

XXXX year our putting all increasing on that we through no in and If change a have, think at to strategic higher margin about than and see our we beyond. pace year you plan at

Tien-Tsin Huang

to hear. you Thank That’s both. great

Tiger Tyagarajan

Tien-Tsin. you, Thank

Operator

Thank you.

come will question next Bachman Keith BMO. Our from from

open. is line Your

Keith Bachman

thanks. Many Hi. have I related two questions.

the to thread. The first one, I'm together Tiger, string trying

base XX% talked bookings about double You a XX% to on of X.X. growth

for double XX% obviously of let's I numbers difference? top statement, XXXX. a that thought very use growth in of the interesting just in your is line the I And take expressing round revenues, weak. amount implicit But just but was low hoping assumptions a also within certain could that that, will that the rev And then cycle follow-up. pretty you if have in tie it the I of digits But bookings say short I low seem it was versus the part there's to durability. while manifest XX% double-digit XX% confidence a work so would be XX%, what's XX%, together growth? surrounding and assume to

Tiger Tyagarajan

Yes.

and you yourself. So deal rotation you're question, booking subsequent time, those year. bigger larger a deal that there XX% portfolio answered is partly the short-term growth have long And you're an that happens, a a Therefore, momentum of I an think, deal, the and cycle X-year smaller immediate cannot in what And to Keith, to equal the the XX% deal obviously slower. translate When a is at really, from annuity. longer, while signed, the that to you same advisory work automatically cycle seeing contract. annuity when short making growth

part that's answer. of So the

years. second get growth that in see to through come saying And back that of the the that fact the reflection that we is we will XXXX. The first over you'll double-digit that are is

here. have see difference think this and about where back I but numbers talking our XXXX, the growth kind way, about growth you of and go exactly the we're year, years which bookings could has you will this then year very was out you revenue the a bookings played year, between great mirrors strong many booking If revenue to history, a that where proceeded

Keith Bachman

Right, right.

And do Okay. associated service companies My AI? calling representation. this the disruption significant relates efficiency And know our service Gen in second with particular. of and to that, pundits a models but supply what gains specifically, revenues to I'm you gains many and same provider has leading percent trying or large is, seat-based I efficiency question, customer out but Tiger. service for customer I think are question ask how of -- many Genpact I envision don't

of and -- most be work will an there is on so that basis. And FTE

And statement success-based is part will And thinking about -- there how about offset answer. dollars that same with? talked models how greater would lower be that that the So part customer agree that? a journey. a, is the seats. time, a to b, at you you a know you And you do just I assume as being implemented CFO But AI service would of of want pay activity. I be your at fewer

the how just trying do how does to is really, I'm Gen And the work AI? string b, you'll -- think Thank the most to AI? efficiency about likely? So success-based together offset Gen you. various you with gains that disruption models use Where that

Tiger Tyagarajan

you is XX% Keith, said, service with except customer So correct care, everything that we data agree customer business. one of work us you, just to point, which for our sub

and commercial financial and our remember, of accounting sales If you support. on claims, go can on supply portfolio, chain, underwriting, largest is insurance course, insurance underwriting, lending risk services, I

you. customer very business an script, so typical with comparable large out agree disrupted, customer compared proportion called to my care our only as providers, which then in for care very of be opportunity us completely that provides care, small going I customer is saying So to actually basically

therefore, becomes strategy AI. Gen it us, in For off-end

you are care where as speak, there's solutions new we is customers not and what And doing way it. do this building taking and should we telling the work So we as speak we them, it are is a we do for do model, to customer them.

So you're of will absolutely get disrupted. one that right. areas the It's

the even us are for The By do customer work is of We we running. in that seeing are complex, small. pilots way, work in the high care care. proportion is that already we that that customer value

Keith Bachman

Okay.

Tiger Tyagarajan

customer and strategy. But doing, from skills it that's part elimination Gen and typically call do immediate care one capability what we're to AI. of less exactly commoditize do what is which We why our have not we called easy amenable disruption the would of we often the

disrupted. would remarks is typical clear that to and think with is, my something the marketplace, out the what get I you if in is, application I that that is place think concluded about again, going I very add other The that narrative is to development simple coding,

have our big disruption. pilots do, low looking our done for offense run or way saying, Again, ourselves than part from Again, our strategy and we this coding clients different portfolio. as that XX% for it's and to current we at are not to a a either a you yourself. by your We of anywhere providers taking we you we way are something XX% can being of work in potential internal do piece by the

Keith Bachman

Tiger. answer. for Many interesting, Very Okay. thanks your

Tiger Tyagarajan

Keith. you, Thank

Operator

Thank you.

William next from will Our from Blair. come question Nolan Maggie

line is open. Your

Maggie Nolan

based in outcome a pricing here, Thank you pattern you. little pricing? uptick are terms types or any on terms clients more in what the like provide what based last an Maybe topic of relationship on outcome that that of pricing? of anything more length since can in And of the industry which engagements based embracing are information was outcome then seeing this part of

Tiger Tyagarajan

And start think about themselves our lot almost outcome that saying transaction of transaction Maggie, that, again, the and by based with the services will done answer transactional is headcount the of is to easily based not work great pricing. is related kind lend pricing, to gets is a pricing, non-FTE very in I that and because question. the term which overall would pricing I'm saying pricing start reason that umbrella underneath pricing in order. to then fixed because that I

accounts technology are they provider response financial And not managing is but more the in actually service customer lend financial of transaction on actual whether services with we would called fashion. phone, themselves. work, out, receivable, that insurance move elaborate to that simple example clients start Then services, we you the let's accounts be, or and payable

well themselves insurance underwriting lends management. that based fraud are pricing. to responses, management, doing responses, transaction claims doing You doing you is are transactional insurance learn claim really are Anything you

The have volume, most industry transaction of for based understand this services have open they and throughput. they is frequency pricing, because that's financial they velocity

learning So us bank years, customer this and it more the machine pushing this real customer seeing we well, a and last something for been changed for the one deliver understanding the I actually are agenda the win-win defied that's couple and that's this to technologies consumer because that years -- the for last allows is bank creates but and in through months, marketplace most X journey. model a receptivity AI X all that's because when Gen in and of is AI literally end also which that digital it embed that and the we've of the in us, think to do the a probably customer then solutions build the the the but or we because great really and value of invest for

Maggie Nolan

That's there's helpful, then activity. large Tiger. And been Thank good really deal continued you.

would the competitive So pricing right I'm characterize and then competitive wondering the you environment now environment for deals? how

Tiger Tyagarajan

that it's not actually quite what have is Maggie, things have would the competitive So elevated and two been few years. got for that different been from in I a say probably environment digital importance. important AI of the pandemic are people well coming what's transformation is would motivation out the that journey journey Gen both And thinking through the suspect I big for now as as changing. a always

important deep of things one we've the my think of data, the processes the realization in that most industry, is importance a always there's believed understanding I of journey. my my

our of recognize I beginning clients that. think to most are

where these when And start built AI solutions home you comes have it into really with it intelligence deploying is models. that intelligent

around make want AI, apply intelligence sure is to And for that then guardrails the consumed data really InfoSec around you responsible ethics, and around that You been has when privacy. fully understood. that

of that domain out road I in people on conversations. think the figured bring out playbook process table again, who and and those to map and shine right best the the the and Once are and actually we data. and people all that understand journey the And put

would say environment, competitive So I that different. not

We shining win through, are rates That's our clear. very up. are therefore

winning and through every shining deal. are in We

The we we understanding. world. world guys you excited we in, that's really are about I And think in win data domain and feel that through when and your that we get the first is shone callout

Maggie Nolan

Thank you.

Tiger Tyagarajan

you, Maggie. Thank

Operator

Thank you.

Our next from question Shirvaikar will come from Ashwin Citi.

Your line open. is

Ashwin Shirvaikar

Hi, Tiger, Hope well. Mike, Roger. you’re

Tiger Tyagarajan

Yes, Ashwin.

Mike Weiner

hi. Ashwin, you. thank

Ashwin Shirvaikar

be if discretionary two clients I and of can Data where guess, below -- Tech push I look each portion sort of was remarks your to the by results to down you the really kind shorter is could Ops what stuff I Digital was you in reason XQ When in that because is The work in of Digital each of expectations, look out, versus break to it's down timing. at segments, by ask discretionary the break wanted tends around consensus -- at whereas being your line, terms ask, Ops pushed Data-Tech-AI expectation. I pointed term, while prepared out. that segment it's more

you and of an part idea what that and great. which of us discretionary is down break if So give could would kind of kind of each functions that be

Tiger Tyagarajan

Data-Tech-AI which we to Data-Tech-AI. front-end of out out. impacted the -- in those Mike called also volume of of are but segments, the all reaction a two called in of on out We discretionary in all the quick and the things reduction Those answer the advisory of work. type impact Operations. revenue each high-tech would called Most clients. and that have I that of that portion couple we Digital But a reside is almost

-- the expectation work. high-tech driven soft the Operations have absent being we Digital would seen the in versus So reduction, advisory more Data-Tech-AI volume growth was our on even in with by

Data-Tech-AI the and So a people impact Mike? if where reorienting is expense. The work digital of you much on out parse more the are one-off. discretionary advisory is X operations, is pervasive a the that high-tech

Mike Weiner

volume Yes, we legacy that three really doing it, Data-Tech that one, Digital if bit, the work. that all Operations, [indiscernible] technology click about about the think large think I to. double it it's and on your of to When comes AI, work cohorts you from just if some kind a alluded you do: coming you of

financial work that is our that. indexes then that which lot it's year. whole. affected work level the which in a that And exactly blueprinting, chain do, not we we procurement last the and are were of the outlook in at we work earlier a at much just holding They our the the part do anticipated remaining advisory not we flat on work, -- for market vertical. the flat of also year. supply that and encompasses was primarily Digital And alluded that to, to our operational as advisory marketing experience just pretty Tiger Now the one for relatively

Tiger Tyagarajan

Ashwin, But signed click get clients or we If transformation of one beginning the on. whether we deals big are I journeys on being want working now the to we are -- the deals interesting element. undertaken, specific to are double right add, where

a most that because a one of big those we undertake clients that things transformation a noticing because all journey, of there things stop undertake to are big call actually incremental the journey. don't now interesting is that to I'm kinds dollars And want when beginning of decides One arenas. spend work little transformation stop they those that to I to happening in

order is a but to the a clients hold spend on get order in So this much our of it I to comparatively I value. Even my AI bit XX in to it on do better otherwise, data big rotation. if little deliver to be where of now money, disadvantaged. to have able I'll on consume bigger then things models able be one not they because little thing And want because be

Ashwin Shirvaikar

year. I word the that the still that changed had those of Understood. I Understood. then asked bit similar it and think And but in -- versus And the the up XQ, a want stay to think you just of in with hockey set that the Are implementations ramp part make of what's hate sort -- earlier way has shape kind stick, than sort I that using we that. of but then you the what ramps weighted? of were were higher assume to a XQ that and think, of is Thank back-end unchanged? for in in I through they It's interim? very XQ sure will as ramp some terms of quarter, was question, of I last XQ confidence I planned?

Mike Weiner

revenue growth. to earning we the we large deals all It's good a associated it our as about, signed. been to up with on allows large of tied talking that recognition or feel implement sooner think vertical are we've throughout them them starts when So which I these talked deals, when there's ramp call. again, And us with later. those really we've And component of than start about very we that comfortable rather kind large Tiger the about rebatch revenue revenue

about that. We So projected deals. on good timing it's really feel from just existing that signed

Tiger Tyagarajan

and of versus the Yes. add And elaborate today. color from curve, in just quarter our we Ashwin, talked to shape earnings what zero the more curve second first the our to call said. quarter of The some in what shape on change Mike

advisory all, did versus the I as You QX any that what question. There call call and change high-tech in that I'm earnings schedule. same [ph] we saying spoke asked between slippage now those compared tell is another revenue and of change speak question QX to why call in today, one work today we ramp. And the all our earnings which we their volume by in deals of trajectory in we is we've this And changed ramp had the you did not been is today. last by all and the has earnings time, can call, which projection driven is of reduction. driven that at have Data-Tech-AI no that None the the

that So good feel ramp. about we

Ashwin Shirvaikar

you. Thank [Indiscernible]. Yes.

Tiger Tyagarajan

Ashwin. you, Thank

Operator

Thank you.

Bryan next Bergin Cowen. from comes from Our TD question

is line open. Your

Bryan Bergin

XX% level material on start relying you the growth or you signed Are XX% it you. Thank bookings tracking here to be on you Wanted have afternoon. through yet to are expectation, The Good for above that first that Hi. wins half? deal do to that? first. large to

Tiger Tyagarajan

I quarter, the it. record quarter. than we And mean bookings lumpy. think actually, [indiscernible] as The reality Brian, said bookings. above the And news that first are in the quarter had is, was second is we are the actually better even good I we first

that that, So are second that are not better than we second the half. we first assumption for not above actually tracking making Having half, in tracking first the quarter. only quarter are is said we

it's So curve not exponentially but an a assumption, actually good assumption.

feel about our to XX% the XX% good we for So year. growth

Bryan Bergin

can growth on I exit calling talk may And you and within segment 'XX for for rate? single-digit Okay. follow-up, segments Mike, growth growth updated Ops company total out the and Digital those the worth expectations, Very each anything about then that high on a just just of rates Data-Tech-AI missed this. have good. outlook

Mike Weiner

double-digit mid you'd returning perspective. mid into growth rate well obviously patterns or that, and operations to looked our and expansion then We quarter, didn't so digits So digital and really to to it and in in high our in the cadencing how the growth out. quarter on, the expect Data-Tech high low And double-digit, business patterning Yes. right? quarter, single right? of that's single-digit really address We fourth AI fourth that the sequentially in third then at just from it

AI work You we single then low pattern and are particularly as mid-teens Data-Tech doing. digital we anticipating digits a of return to on in the normal we of Data-Tech move to AI somewhat as normalization, on and to that expect are and of revenue us our mid somewhat growth XXXX operations through

Bryan Bergin

you. Understood. Okay. Thank

Tiger Tyagarajan

Thank you.

Operator

you. from next question will Thind Surinder Instructions] And Jefferies LLC. Thank our from come [Operator

Your line open. is

Surinder Thind

you think about the here? how large Thank do seems experiencing, the longer is you're It you. Tiger, like term view as you bookings elevated. growth opportunity that the

point? cycle should having point, the may expect do we at turn? secular at you there feel you're with to be So like that some discussion this Or clients a

Tiger Tyagarajan

a there talked is actually, lot or across that for conclusion either I it's way, that pervasive our [ph]. there's single think as being question. secular industry the come is verticals. the vertical by are to episodic One, authority to stands don't I other different that a beginning all is a the a direction. it is it's trend here. Surinder, from think, we out I this And the think reason in inside, great secular? about We've this

geographies. across pervasive it's Second,

like involved All the is and Australia. and which and Europe, places Western Germany in, including markets Canada, the U.S. Japan geographic North that America, they're France,

but the So coming hold I We time. And this done. it to still was very we has lot believe now was as journey of a And to be get is don't that the has digital very still and I is sorted days, It's think talent it get out secular trajectory. is AI into a as leveraged. secular third have be whole clear. There's data, will moved and all very long across it's now early AI, and It very of out pandemic that geography. transformation.

examples be in change and all AI-augmented some outcomes of an in deliver will and step to really times provide gave. that the disruption services There services that of we AI-infused ability

very secular is So this across. we think

complex a is or we is interesting start for up us the we of most in care the catch actually work. a client or of start happened this has journey with more things that One that we may customer help client going with accounting may as and finance customer to us that with think

Our services buying then means area, centers out, centers today X ability enterprise dramatically as services long called we the once sign then growing to keep then take sets to that than back, as priority the in C-suite, account I up we a an which execute, ability with all years nicely. multiple almost have is different across think, very up that buying and new particular us that open new in it go we our to and account, accounts

looking And multiple ability cuts then Data to to find way the data. final these statement a are I will all use the across services. clients for of make is

ability to the these then our data other believe value. and great you to services that AI is over traded why where actually a between that's we combination of time take reason actually So create use services

sets trend of us a secular for that up All here. real

Surinder Thind

some people off high-tech that how in the high-tech near-term clients, of big it about should picture the to question in volume of about canary a clients then that a in And more little Is mine bit start When of view some that your helpful. That's of that think just the we was lay the a caution. here? the the kind coal we to were reductions sense first exhibit by to trends. terms

there's now of just seeing this also we clients? weakness of on to this those Is spreads? are see kind that that Or macro so some that conservatism starting there you're bit more some a is chance a part the volume if there? And reductions

Tiger Tyagarajan

last X, X think that of high-tech looking canary now, the X their they X mine that but headcount. way actions And a actually, to seen in own the months X, months. was I not announcements at So the And on the the we've over alarm, bunch sounded actually would all coal the first about took is X, back.

this not them, [indiscernible] to customer. saying, I this work As this treatment reduction, provide do it's I done, when to has they check need much. of at the basically most looked been volume need do I to not that talk so about

to Let's this check not policy content. use this

It's the So it's and that clients. between has trust marketing area and work safety. these in area the the all of in done of high-tech digital

other that reduction. on been reason already flow of into cost The the Part of deals industries, is the big focused our base we on happened. of clients why a has also taking lot have through cost because about talked

come less case on of a reset a be about not ready -- actually in getting doing going number and clubs. a given we these do data fine has it's high-tech actually at of are work. they seeing they've more the come high-tech can't. new time of getting to cost In come clients public there they work models. when annotation, particularly high-tech, back work, to less that will to work, We all to do same to them, from work it I'm what decided as will to going least AI, the domain, that actually relates ready believe that's for up That are based start Gen -- their tune base, the For their There's done. have lot

Surinder Thind

you. Thank

Tiger Tyagarajan

Thank Surinder. you,

Operator

we Thank from And Shirvaikar Citi. have from you. follow-up do Ashwin a

open. is line Your

Ashwin Shirvaikar

ramps conversely, it ramps, margins lot to cash chance or be sees be And flow. ask the Normally, tends tends ramping It's to Appreciate you you. pressure. flow. the when of different to on a one see for margins slower cash put Thank follow-up. and and that positive when actually out

double-digit and margins kind corresponding how that? think that the should be to how we expectation So regards cash of alluded growth for flow should you to, of next year to with

Mike Weiner

margins. about terms that, in let's about of So we'll and talk first, cash talk flow

approximately So our anticipate at and totality. with $XXX million year what business growing is. cash in all, the conversion in changed that flow line I would our hasn't guidance the for

the think, from from, last the year growth XX.X%. went as our identified, huge I margin margin we've this far year piece of As expansion we that

behalf of business, clients the bps. this on guidance component that is that driven flow we just our as The be really right, XX.X%, largest as that in of year through our efficiencies operating So is of well business. to our continued drive about XX leverage going by the

continuous the to and investment, that future. talked for our our we've The capabilities continue is R&D that, our and new about invest offsetting business "organic" to we lever in

to on lever margin continue accordingly that of sequential will we So continue that our expansion to commitment terms a hit to basis. in manage

our well from what really that's works operating It that So plan. perspective. really

Tiger Tyagarajan

And that one investments. our are Yes. part already to that in deliberately We've point, final up of add we dialing just QX. Ashwin. done Remember

R&D as the well with it creating both doing are the speak the having all those We in center AI in particularly and discussions proof-of-concept as the take and marketing clients. QX we and teams in side, as we pilots to sales the excellence, of Gen that had, creating

see to have wait I third And set talked a and have it range of and second an as happens. topic that you a leads with try a okay, when conversations actual a every clients. around leads that Whether of Almost one about ultimate them to this of, pilot we'll a Gen let's AI to conversation. converted then production, pilot. to then

So able seen lot revenue be we of haven't using directly are that a to a be to deployed all that. inflow from clever our we really of big requires do AI, of dollars to but Gen investment and people

Ashwin Shirvaikar

Understood. Thank you.

Tiger Tyagarajan

Ashwin. Thanks,

Operator

Keith come from Thank next question BMO. our you. of And will Bachman

Your line is open.

Keith Bachman

non-FTA some associated back related trends is revenue based adoption some there's then most expect growth Two success is you been jump have experience little you What it presumably, success things. hear been rate? non-FTE growth more as the I I And models? flush business One, go? a And where out Thank that is, bit running Hi, you're based the particularly with guys. Why experience of thought your I'd to do if it, about queue. going actually could say And business. accretive or to if it is couple with in challenges. into they're Tiger, accretive to that models. would about why in business if you think your to you. is, third, successful? where be a in risk non-FTA wanted that to

Tiger Tyagarajan

Keith. part, first the answer me let Yes,

pricing -- over our And for from deliver. work, we the better beneficial years then now learn success some obviously that just had pricing By are is margin hugely it pure that There's I'm [ph]. question. is aggregate no XX for and FTE where ultimate delivery talking is from it improve about definition, client than we the it ultimately perspective the Genpact. And there we've our success non-FTE that therefore, and don't So aggregate. and

hugely for that very aggregate, the on actually So simple. is successful. The reason

domain, change, pace actually more models understand The can we to what therefore, how that and over we we those where our train the risk been what only and through types understand know are taking actually. successful places do where in implement, understand the we of function. to process, technology understand pull, that the the the what what more with to processes at And journey. in go we've to years the AI The model And many speed that? what understand is levers journey in industry, that, we we

see been not beginning that refactored market's not change. enough, and to actually The we're that buying

to our that be an actually makes confident one, innovation alignment will happen. an great So that, an also we of we alignment should is and I don't value we governance There deliver think to feel of that goals, able of clients. alignment that. there's really underestimate

way change and give. actually so have a alignment something much much implementation. It's -- to underestimate easier to should service, order just technology management not I you a that's also -- you the in done change We models is implementation people what for XX these becomes an which going have XX, goals, in agenda change end-to-end take That an not ask just if needed of mean ultimately journey AI full they is if not how years.

So undertaking will journey it this for for because we and be that I actually be are clients very, happy it's great very us. will accretive think

Keith Bachman

the in time? is So you on the success or do rate Tiger, non-FTA with rate upsell model difference once upsell associated any there over base a

Tiger Tyagarajan

Obviously, I that's deliver than we but call to very probably more can value that the therefore, as whether there more sure don't and out want upsell, right. delighted we I'm be more know clients different.

Mike Weiner

that thoughts. the done cohort. at of isolate we the that bookings right? two hard lot have models new or still a of we've these Yes, transaction the end of A of renewal right it's kind that come So an in deal have engage, to alternative models, not commercial now,

we never XX% Tiger is also right we with those and higher get roughly moving the are So And us for we with, XXX%, models to today the client. picking we right? for going than choosing But to that do to think outcomes work it. really will learned on as we've a the learned are that to to notably. in win-win to, should average, exceed and with on. underwriting then move to And for that are to, now. And that's on substantially they're the Tiger are the in them revenue alluded goal XXXX. we situation and a going we client margin with comfortable look pure We has that just we are of have you, we're now right? want XX% going we it, what revenue And just that profitability a associated margin total lot of has have at the to talked

Tiger Tyagarajan

DNA when bit, to we would more trying not little drive big end -- well. -- exactly Six those the works the really Lean, But on little we portfolio that the makes process, it. I therefore, of margin A estimate actually a out and risk. a is aggregate, not you're the of you're Yes. on exact there's you're out plays up Therefore, out it trying aggregate, deals and think work Obviously, wanted to taking. down, way we delivering. higher, risk the that some difference risk when Sigma call defects bit that that of I And

Keith Bachman

thanks. Many Understood.

Tiger Tyagarajan

you. Thank

Operator

to for any remarks. to like phone questions Sachs turn lines. And closing you. Thank now no I'd call from showing Roger I'm the further back our over

Roger Sachs

speaking we everybody, to look and Thanks, quarter. today, with you us for next forward again joining

Operator

This Thank your today's conference concludes call. participation. you for

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

Genpact Limited (G) 9 Aug 232023 Q2 Earnings call transcript