Mastech Digital (MHH) 28 Jul 212021 Q2 Earnings call transcript

Company Profile

Participants

Jennifer Ford Lacey	Manager of Legal Affairs
Vivek Gupta	Chief Executive Officer
Jack Cronin	Chief Financial Officer
Paul Burton	Chief Executive Officer of Mastech InfoTrellis
Josh Vogel	Sidoti & Company
Yaron Naymark	1 Main Capital
Lisa Thompson	Zacks Investment Research

Call transcript

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Operator

Greetings, and welcome to Mastech Digital Inc. Q2 2021 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. pleasure your my Ms. now is to host introduce It for of Inc. Jennifer Manager Affairs Mastech Ford Lacey, Legal Digital Thank you Ms.

Ford Lacey, you may begin.

Jennifer Ford Lacey

Thank Digital's second welcome to conference and you, call. quarter operator, XXXX Mastech

not and these remind to Executive; from change. on that listed report to foregoing uncertainties our anticipates, as and like are actual statements and Burton, Executive would and flows, and markets based at that limiting no in as which differ we XX-K statements facts statements your Chief available forward-looking at intentions, are us filed including call have These Form currently identify similar in on If on I today to copy Officer. as update forward-looking statements the expressions growth obligation and statements that cause Commission me this Without Officer; during materially and everyone plans, assume its Securities could There operate. Mastech website and our circumstances the Exchange risks cash are received company's information annual from Mastech forward-looking are strategies, our those believes, available and the the Financial intended events forward-looking statements. can expects, to are obtained are it XXXX the costs, we words Paul certain well Vivek www.mastechdigital.com. to these the www.sec.gov. plans, made of our with liquidity website Gupta, you Jack projections, financial historical beliefs be not about business, Cronin, statements earnings yet on concerning statements. These announcement, Chief call With include InfoTrellis a Chief the Digital's

to on GAAP Additionally, provide our results measures financial non-GAAP presented supplement basis. a certain management financial to elected has

in measures included we which operating from metrics data, with we will management per diluted of earnings Reconciliations these used the respect the our measures to key net provide to which provide can income are at non-GAAP transparency non-GAAP in will comparable by non-GAAP obtained website believe financial www.mastechdigital.com. GAAP our share and be earnings Specifically, business. greater their announcement

we in we one-on-one review calls. XXXX As over turn a subsequent not results. the guidance quarter meetings nor guidance I provide reminder, will to during be Jack will any will call second or this of a now providing call our for

Jack Cronin

Thanks, Jen morning and everyone. good

organic for revenues the growth This compared $XX.X XXXX. XX% XXXX quarter the million the represented of revenue totaled Second in second acquisition. $XX.X over million, second AmberLeaf adjusting quarter growth increase when or X% quarter to XXXX of

growth Additionally, performance the our sequential revenue showed first quarter of XXXX. X% over of

X%. Analytics million approximately and in million, contributed for was Data quarter on AmberLeaf, of our a $X After growth year-over-year $X.X revenues to basis Our compared XXXX. of adjusting revenue second the segment organic Services

marketplace, that D&A During D&A with and the the customer quarter quarter, for variant million. further see on for a promise we to reasons evidence at conversations the remains show is have market Clearly, projects project continue some start consecutive rather still the second starting need Bookings the wildcard. focused been a more delays. Pipeline in to recover. to continue to uncertainty strong than Delta being opportunities $XX were

measures, two related was $X.X intangible or consideration borrowings QX facility, not strong activity assets, second $X.XX compensation, and acquisition. compared approximately the release one, enter good a XXXX. space of levels by $X.X we million outstanding macro-economic segment, year-over-year QX Staffing increase consultant share levels. tax per a and in half consultants, the sequential IT basis, no Addressing benefit on percent as financial totaled in Non-GAAP diluted contingent $X.XX the based or XXX debt by $XX base million, million, previous diluted QX had X% approximately associated conditions share, second AmberLeaf of quarter million diluted quarter-end. share, compared our net million, SG&A or Services in $X XXXX. to $X were a measures, in in quarter at GAAP basis about in for cash XXXX, our the XXXX $X.XX contingent modestly XXXX, three grew of in reduction XXXX XXXX share balances margins revaluation million $XX.X an growth a our income of was $X.X stock the financial by income did net hand are March second as gain non-GAAP approximately on in continued quarter that of detailed and XX% revolving net XX to was or position under to of per at our XX However, amortization quarter diluted feel with bank the D&A the points second $XX $X.X acquired included availability per which June $XX.X financial available a items website. cash we million In over pre-tax liability quarterly XXXX. over XXXX $X.XX we improved The million per our profit of XX on to Gross earnings million Gross liability million, organic is benefits our the consideration quarter. billable X% very revenue quarter revenue XXXX. to basis. credit of in XXXX for XXXX and expense compared increased a on of the as of of Furthermore, second we the QX of remain from QX

from sales days for outstanding XXXX. Vivek over the now XX two March days XX comments. I'll to quarter by the turn during call improved measurement at his days our Additionally,

Vivek Gupta

the review our morning, quarter for Thank Good of XXXX. for Jack you, second everyone. the detailed operating results of

by saying pleased performance. I'm Let our with XXXX financial begin very QX me that

is With respect Services are IT at our very segment, pleased level a elevated increase of we're in base in opportunities billable given X% after order growth and expansion of sequential made during bookings, Activity revenue addition X% nice strong consultant he Our XXXX. in headed pipeline X% bottom Analytics during both with any recovery achieve a quarter of the Staffing Data headcount importantly, more increasing and and say have some D&A remain But half and quarter. levels achieved Services the to segment. the year. in our the QX we're progress. to This very increase quarter in of line performing high and the during an improvement. segment will second billable meaningful in our Paul by believes best a securing about progress QX, the record more a we to second terms where

margin growth basis on rate engagements. by basis and on points at addition, a from QX both performance In revenue strong was quarterly year's X%. a Gross sequential low at XX basis increased last despite year-over-year adding bill XX% some

Paul comments I'll IT the Data his during increased On quarter first sequential of to to now managing a over of improved the XXXX. the equation QX last Staffing turn on basis, when on despite over a margin compared with our IT income corresponding the operating year approach assignments. the Analytics the we're our income new and cost effectively of for unwinding side half call XXXX. by XX% in first profit gross to Services implemented operating Additionally, measures disciplined quarter content X% period XXXX the Staffing of segment by second segment. austerity some

Paul Burton

the a continue in sequential to capability, as macroeconomic we delivery are cast profits. the capable our everyone. or and This and to good continue growth receive QX important providers released it. mostly pandemic that Thank bookings trade of service Data well and year after This however, QX QX XXXX. performance. adapting by comes you, sure million a an revenue million the to revenue successfully for adverse second $XX on sales to release most macro-economic conditions as on to performance absent a the inflection But the as growth Analytics we strong with to in Data relative and Vivek three of while appears the also clients half to quarter, strong performance, recognize demand the posted to of quarter consecutive and of of level the invest growth signal $XX we relative last represented same ahead of heels demand, sequentially. margins that Two measure linger to bookings To quarter operating returned and at revenue the as in will be in and profit as some anticipate suppress go that environment. expect effects morning improved tied point, second the it of reason first evidenced quarters prepared businesses COVID-XX some demand. to of otherwise, Analytics flat increasing It's bookings the shadow quarters market this the of operating short-term. for

our application, modernization, as capabilities needs, to analytics, to enhance our and their continue we As cloud. client's address expand to needs and relate especially

the very data allow Over processes year, intelligence produce that extraordinary clients to from consciously infuse last we built the capabilities the outcomes. have help and in our business intelligence derive us that that

well inorganically, back where continue We questions. capabilities it operator organically, sense. remarks. concludes as for That you will to to these build as makes our And

Operator

Thank you.

session. question-and-answer Instructions]. a conducting [Operator be now will We

with is question Sidoti Please Josh proceed. first Vogel & from Our Company.

Josh Vogel

in taking just Thank notes. guess I D&A you're saying questions. reiterate Paul, you. you I QX? my for everyone. what Good start Thanks expectations Can sequential taking was for morning, to in about

Paul Burton

sure. Yes,

repeated we million. QX, performance very bookings the QX $XX strong than with have million. And in $XX better So we better in than

So again, is seeing we're QX out right in particularly now. that demand playing strong

expecting specific QX. I don't than But be expect am I I you. for to a QX. strong number significantly So it a perhaps better better, have do

Josh Vogel

me reduces that business the you the weakness potential weakness delayed, where likelihood of but also the or Okay. that the were half kind of And think remind just up seasonality the Do circumstances seasonal over demand. pent seasonal can projects back year? given you of there's the of in and

Paul Burton

are revenue bit in finalized, strong things usually And up of we'd your the is is expect terms a QX place end but this typically year in QX, money. with of business Yes, would QX back March. the Typically, off organizational in what begin because and terms coming And heat from it's so budgets to QX holidays, because being strong clients. of tepid are in quarters. little revenue, end taking typically, a bookings, in tails everyone's expect of the then are our changes we

little a a that's demand as because this attitude bit going wait year, bottled pandemic the be I on. clients will just there and potentially of because been of suppress is up, to and what's different because see think taking

predict I point. half. So do so QX suspect anticipate will this QX at than can't we will QX are be stronger unusually strong, I it not whether second But stronger strong seeing or an be strong a far. I

Josh Vogel

back to the want of know part commentary, pandemic. from digital And over engagements How are the XX you. were on I clients the on months. Thank your prior the had D&A obviously the just thinking that sense change needs past to helpful. a agendas? of about projects some not and you XX prior in those That's projects but the of has the some or burner to the to today get it of today the the services I those the nature put pipeline table that in pandemic? obsolete were near-term Are of scope

Paul Burton

No, thinking I holistically. more clients are think

of I during - to reevaluate on businesses will regroup hold businesses sort if got pandemic. think the or a got had they've projects sort as chance things, and you of put

more of of clients those so delays go I out say, data is And more thinking terms think and a holistically as year things of project there, about and all a with and the uncertainty. was because as into analytics, And lost things in and cloud, that solution there posture sense together delays some they forward. I bringing of are

certain of a marketplace we're there's experiencing. in Now amount vigor that the

the out refreshing, but So it's not this we're same only spend. time, at chasing there the competitor

capabilities So approach for had to demand, needs. that and have with clients, that before because we perhaps market appropriately aggressive it's less the patience meet aren't new things right very the they important than their are meeting

see - on We increase second we're again, bullish the see So half. - I demand. I'm

and go trepidation, no deliver. because there's along. other positive. of go move got close have a to things And But anything everything deals got out out reason you've you've to and to always prove got to it, We the then be than you've and bit resource and

So lot are work to problems. done. these be quality of there's But high a

Josh Vogel

to this staffing, insights to consultants, I year-over-year you is sequentially. Thank bit. the it shift because way making that Thinking it sure. that's supply that of than of those versus that. Can about tight What of orders supply any you you're constraints for IT for find gears there an going about historically bit on are seeing? very professionals. little Yes, wanted are market easier usual, a Are harder just the strong unfilled constraints talent there today, results billable you historic? talk just a notable a percentage maybe knowing is? discussing - little the trends, and for

Vivek Gupta

extremely The Josh. today hot. market Sure is

We haven't couple decent ends, seen than to be to now, better net quality et net pay, a cetera, cetera, consultant the unprecedented number better locations, better of number seeing to achieve level decades. we more always than of have to we And technology, able growths, to The have their total supply. ends, any be choices, et projects, has because And an better achieve growth. the this demand of are right so many have for that every temptation. is kind starts greater way of far of total of

ends. an are But level we demand. of we of are then unprecedented unprecedented seeing level seeing So also an

trying opportunities can that to course. ones as of Sure, gross always as So becoming And now, us happens normal guess, can ones we right better ones which there fulfill, those I which margins. are, are which after, requirements. within more But many a we to we we go want picky possible. about unfulfilled give address

balance environment a will in the that - of the do this thing two And hot of the So been control, your favor to continue. so have stays a - - demand starts can't focus record. the able very of the I to sort the will hoping well, last of but in the you know answers minimizing been it quarters kind net and ends, is are on we the number question. But we've that then keep that don't growth. we really careful if controlling

Josh Vogel

And was around are available. you. about business? No, aggressively that rate What talent that the look because rate like in just, that was some bill lower your Thank comments thinking you helpful. targeting forward? I business just Are is does lower of bill engaging going

Vivek Gupta

No.

after gross going of kind that opportunistically the been without compromising we've So margins.

in able which So bill are but if good sure we to that address opportunity, And still an can ways, that And are lesser they nicely will some and we can get deals. win rate, be slightly may seeking be quickly. of packaged margins. we sort we we gross those

going are And overall them I think impacted our we So results. really opportunistic. don't that's after

area it. gross really us that will So we to on see ourselves do if for opportunity we go we not continue limiting that. will the mean I we gives any decent margin, are the

Josh Vogel

AmberLeaf Thank you expectations. Jack. helpful. in for contingent we to that, still and deal. of the about to, XX%. you about talk what bit maybe could that little pandemic, Lowering when wondering the knowing of That's by a the were one I relative you performed completed liability how It drove gives midst that, just just if the a has reason

between October Just curious, changed potentially what and has today?

Jack Cronin

And you the of Sure, structure for $X.X in straight the that's that million just closing out are going I We the why in. included mean, see really slow potential AmberLeaf not up that. was there knew having came the deal and deal. box

again, of business the other that, they believe want we at for that years that just earn we clearly, projects. their they was of so, projects, were only And, there's where stress out the I But was of of closing, projects restart was knew a two there it. cycle ending came versus and out. a we to accounted lag possibility and And certain such ending the between box,

fair earn And the do the So numbers where what you value, you're looks come on you to when going down the it. side, substantially. of When not that's see. out like make revaluation, negative first it six months are that

Josh Vogel

any and half but in I of comments SG&A last or may, were in I'm back hop one, was continue planned second I in QX of one what than initiatives just strategic I'll and queue. your and wondering for. little lower delivery Paul, year? came invest D&A, the if looking the that just sales there was dropped know, And you. And maybe trending a I were into if Thank sort D&A for that to on

Paul Burton

and Yes, I the let of in can that address it. part rest take Jack

remarks, I around said the or make analytics with continue sales my So make, cloud in or customer experience. not continue as we sales, sales very generally, investments very capabilities to targeted, we and in specific to specific

those they happen. so those, continue make they we on, quarter. timing to bring don't day always when continue to and at of And the people first the The you start of

they come later. Sometimes a in little bit

have are seeing. demand And strategy. pretty bullish fully based that our on, development areas be another. so hit and quarter consultative or of the to the we're because with But particular expense the business we we're have may We're consistent to drive they about particular business resources the skills bringing types need not on in one

been direction, that's the them things on. our It's - quarter question will fielding what's getting So no the a taking their hit there's change just gas going been resources, as on, off and not there's the move on full expenses we're foot any in way. then in no of right

Josh Vogel

for All taking Well, thank all my questions. you right.

performance the year. a to the forward got there. Thank Looks Looking seeing over start half of you you. how business the like good back

Paul Burton

Thanks, Josh.

Operator

you. Thank

Our next Please Yaron question X Capital. is from Main proceed. from Naymark

Yaron Naymark

outlined challenges the particularly the Hey you job the job. on guys, guys given segment so nice call, demand on staffing great all that

have The What us revenue? kind much how from to that of other segment, made first remind up is, verse. you the D&A that is of question capabilities can still make I help are MDM

Paul Burton

as related and as Yes, business some majority business four related And offshore cloud We're of line of the overall. it's the and data data tremendous development of lines. is the we as engineering of decreasing a science. percentage business these doing to applications. amount still have [indiscernible] data well Primarily, a data engineering, to so days, management, MDM application but specific,

a smaller the but is whole. of still MDM it's strong, percentage So increasing quarter-over-quarter,

Yaron Naymark

Got it.

taking and business. And MDM the the you're adding just of on of due capabilities. those is pricing much some in margin and the for investment on then from engagements. how engagements winning legacy from How And staff pressure Okay. to in much degradation of cape InfoTrellis sales, is it D&A

Paul Burton

becoming is data any to to mission downstream, for Management the deduplicated pressure on having depending remains side. other MDM uses. feed data, data, pricing capability, been for some actually or Master on clean Data have for critical to not or Clients, clients it We're but perspective upstream has have MDM time, your probably

element business. any pricing, So across our of we're not experiencing deterioration elements

point that make to just So clearly. pretty

in modernization. In that terms SG&A be by hardware to, of a things And, make, to not other application the offerings. that saying these cloud. going independent well market in be demand the of is synergizing. say capabilities into in when them to and service, I'm a or need application that's we what related debt and investments certain of margin investments we what particularly amount or we're as cloud forward, we I cloud, delivered degradation, degradation mean intending seeing related again, primarily even is as and modernization in related infused modernization, those that perceive Analytics to What application online and And bring the the Data particularly are I to training to discrete way, our offerings all by to

will, between are facing which So capabilities. skilled we're the engagements of much more tremendous seeing highly We're tremendous if is begs for and you a and more more much interesting sophisticated, design. of sales Because client this the as much actually synergy amount more development, - by rich, seeing and well. a business need our more offerings, amount

we're of our we're any investments making capture offerings synergy degradation. the marketplace, and design, all by and not to think that, we're in that right So one call we I pricing seeing seeing of the

Yaron Naymark

hear. to great That's Okay.

or broad IBM of side, or you point? guys the solutions you other there overly leveraged On guys MDM are pretty or base this MDM are providers at any Informatica,

Paul Burton

we today, today them live different MDM count currently with engagements We're five doing providers. MDM

one said been would MDM engagements. IBM for and Informatica, all. to continue limited has at us work out earlier relationship base that the IBM And of becoming our I install just the two speak. a one thing to I IBM it overall away strong provider and us. of say are called certainly that. to engagements smaller percentage is to even conscious big been same becoming to You And or to is not strategy smaller those so somewhat we grow though IBM diversify five. very strong client doing a a And But percentage trying from a on of of - anything. IBM for we're IBM historically had or a portfolio. we've continues successful spread We're the We've one field,

business certainly with and Informatica So we're doing IBM, others.

Yaron Naymark

great had I What's of the million two bookings, And to the months? That's XX segment of XX quarterly quarters for greater $XX the hear. six last months, than are in guys duration that types they bookings? of you then Okay. have typical those million. $XX on are typically months, mean,

Paul Burton

the up in in we spread of $XX and compose bit in we QX. would to we fairly million. deals, year deals million probably large a revenues little $XX call And one of deals, were less there two what the QX simply than so no there, multi-year were We a that did was Yes, probably deal, million deals deal three half are different put year in three in actually single deals. the than year The we makeup in a QX going just $XX over there going three-year materialize is the what quickly. to center multi-year years. get The all that deals up put of excellence revenues deals, large had that that significance QX, were

So why of the we've half. going bloodstream, have confident we're is to that sugar bit reasonably strong a injected which second feel little a into we

Yaron Naymark

Okay.

quarter, given years a in or deals were they so year XX-month and some QX or average a than QX, less mostly in deals? less of on multi-year And are mostly them most three any were

Paul Burton

multi-year Yes, do a we'll quarter. typically deal every

Yaron Naymark

Okay.

Paul Burton

high deals, most and XX value engagements them looking sophisticated million deals to of dollar add, are are they're because volume complex, you're if months nine at So and take while they're deals. of they our a

question. your answers that hopefully So

Yaron Naymark

does. it Yes,

the AmberLeaf operational guys capacity, M&A me. the to does you point? the look what then key What additional like capabilities is this acquire? that absorb what And Okay. are And at on front? to one I beyond look are And looking then last guess for like pipeline

Paul Burton

So I pipeline and capabilities. can key about talk

Let you fill to data. and you infuse cloud move data This cloud, The capabilities, into forward. question. capacity key the native Jack analytics, the looking market we're where and applications,

deploy you and For is architectures, a are in their we or re-platformed applications you that buzzwords there. huge if and will rearchitected sorts to applications, as multiple - of as containers clients application that idea throw microservices The all moving is is could tremendous, there. out opportunity portfolio, a modernize is, we there's it the out cloud, it

And capabilities marketplace. today. a the that is so meet seeing we the required, the that on hiring. significant the But demand have service the that's we're are there significant to demand skills in we and can't scarce Based hiring without

happen. methodology, et not to culture, find assimilate resources you and just bet them flip the on, bit business the a effort something bring little that It cetera, takes resources, your of it's make et the cetera. your So your can a switch to go practices, resources,

So good a we're see market that having with it. we approaching news is, is, Good news and success strong market.

and into go-to-market skills as those possibilities of brings sort vision, And operational together, our very exploring to is bad not is interested that dovetails that, can to got the do in our marketplace. in plug but do and model. to company we organically, One we're discover up to bad, them Somewhat with by in we've it. capacity of and course, finding way ramp we've a news add got

open the a on I looking And spend in any in would idea of what with I'm my match lot remarks, inorganic we I mentioned they and of predictions to cognizant how what's market, very do mix that there, focus don't are and to us. certainly growth there. looking to we're And regard. any as see the and in announcement have a time so there's time specifically companies make out at that. we're ready and not intensity we But of spent going fit I and

answer respect Jack that put capacity, way. Let that I'll me one. let it to With

Jack Cronin

you question? the Did repeat me just you to answer? could want Okay,

Yaron Naymark

M&A was Yes, you on on operation financial you think it capacity, just the much how have do front?

Jack Cronin

second to if believe exists, from Well, going quarter have now some or entered staff. half, our an standpoint, I equation just the Do perspective, to capacity the office have the into meet we're going I mean demand. space, infrastructure to me, the excuse have obviously, office space. to the clearly, delivery with mean we revenue quarters a up to we're But in be we that QX and of a It second Chennai, new second office leverage can in the we levels, increasing to center materially add absolutely? we what space the right is staff increases quality From India.

So from an planning we're infrastructure perspective, for those increases. staff I think

Yaron Naymark

you the about talk the can Jack, for also acquisition? capacity or borrowing capacity

Jack Cronin

on we line have respect your Sure, availability mean to the $XX revolving based prepared I haven't million receivables. remarks, a in It's credit that we used with all. at

million. $XX is here line unused the So

PNC to one another is we'd considerable to meaningful materializes, if believe facility if you that that, be we we a loan with a we will did acquisition, we term to would increase strong if it. think have materially acquisition Clearly, that our able have Bank. and worth relationship addition that In do we we purchasing power, be

Yaron Naymark

guys. Thanks, great. Okay,

Vivek Gupta

you, Thank Yaron.

Operator

you. Thank

proceed. is Please next Zacks from Our question Investment with Lisa Research. Thompson

Lisa Thompson

Good morning.

Vivek Gupta

morning. Good

Lisa Thompson

Paul, to you were So back talking what margins. about

this you have as you synergies as off, point? do that First at feel to going gotten improvements cost of AmberLeaf totally and everything out get you you're far

Paul Burton

at not all, actually. No,

that You then business point our out the put But increasing open of continue to too well. he this new as that it. AmberLeaf. said, characterized block new doing significant as Jack on clients We're slow after acquisition. AmberLeaf line is line business, But we're And staffing was AmberLeaf came of actually CX up know business now and the to otherwise month. not we hiring fine correctly currently in known in AmberLeaf clients and every of as development when a

to that adjustments with on forward. in And that to off margins, business But did segment number we're for the to yes, some are AmberLeaf in to put, we're we or most don't fact. which of a we done. line strong slow get were of start in needed the not So growth the one, bullish business, CX anticipating of want ignore structure cost part to respect going be made AmberLeaf there that

anticipating improved margins forward CX the going business. but across operating business, I'm entire so line And across of specifically our

as that. So There's cloud, it doing doubt and replatforming CX clients dovetail of of to we a nicely no as historically, move we're segment cloud. Data with opportunity the with I'm have the work amount Analytics that there's into that quite work as the applications on applications the does bullish capabilities we and that especially But well about the And legacy in move in tremendous cloud. native with and business. cloud

nicely So portfolio. into our a accelerating. very AmberLeaf slow beyond was now start. that and We're we're It fits

Lisa Thompson

you didn't and Okay, catch something your just margin I about, said and said clarify what you to now. you investing what sacrificing said quite meant, comments, or in

you forward going does that expect gross you kind operating be? your or So decline that mean to going to of are where or you're margins

Paul Burton

our where make in margins they're sales to not as because But to making expect investments do as we're I increase they much operating and No, could, increase going delivery. forward. not we going

Lisa Thompson

Okay.

Paul Burton

some going margins, infrastructure that other in much them we road, words, rolls as changing because to and down making, going could, to in increase tires but the we're the we're doubt in investments, SG&A, about, making delivery. because we're no we're not So as on we're and increase others cars

Lisa Thompson

to IT quarters? next you being you as couple for the didn't far XXX the same what meant. catch consultants, XX quite I That hired couple last as more the number helps. see that staffing, Okay, quarters, that And do

Vivek Gupta

as said, the end how demand also say a But the pan level. same always demand. bit the growth, at that's seems to it much the as terms out. be We little ends to bit terms to of in do the And happen. at of little today, two we the do the difficult not stand But ends because quarters I of net are I July, slow we expect maybe to higher. down more in a next of say the see will

them kind And in of as Some will end. the a either the come of the may beginning engagements them replace lot started for or renewal we well. the of renew of work that that year require or to

expect So but do continue, it. can't to trends we quantify positive I

Lisa Thompson

just flat. and QX ask you If in Okay, kind first kind all QX Jack, quarter, pulled can why that helps. of go, like forward, you expenses as expenses operating which the good. about of far know right, That were explains I and as I said

does So that? back start again of in ticking up because QX it

Jack Cronin

back As talking far we're about? up, pick starting as to are you

Lisa Thompson

SG&A. SG&A,

Jack Cronin

spend? SG&A

Lisa Thompson

Yes.

Jack Cronin

flat associated Well, up to the with pick yes, and going back the to of it's going pick comment going some that then the the to be, growth. of for and demand. of that's margin is even though yourself the position to in Paul's second D&A up variable quarter, we half up material on it's be D&A, demand make it And was revenue in giving and going SG&A the staffing, just back year, a in to somewhat, investments some first year expenses did operating some of it's because half

tell the of the us half, have in going in some great we're think the the for not first will I but half to quarter maybe So as year. second as first increases SG&A,

Lisa Thompson

And question, my Paul, all ask you. I Okay, forgot to right. final

QX months, You know you as to that that enough variability so is not when what's possible more as what's tailing the three long said what's yet. don't than term QX, be your be contracts that because off and got staying, How then? strong are there might

Paul Burton

that couple is expect I with QX different I I QX. next weeks. contracts have QX respect what done changes extended future, and specificity, just I we to predict or extended to or three be, to that little closing to Well, them into going don't certainty uncertainty and quarter what right there's or that we going anything end, or say be what always bit than happen now. what's contracts can't going further to the a to substantially it's say going to get on going I what's some contracts QX can't to to of end to here now it contracts start with whether every four further than predict higher don't into is to are quarter what's in going get that QX. expect and variability. the right Oftentimes the weeks based be to be hard lower. difficult we're mean, to are have through extend

Lisa Thompson

Go my you. great. ahead. helps. all Okay, That's Thank That questions.

Paul Burton

a there's not when of lot think look historically, the I Yes, it. in our at business D&A you volatility business,

and starting We We haven't back had now I the were climb flat again, expect significant during continue. drops to improves. environment we're to mostly in revenue up as even pandemic. that the

Lisa Thompson

All that helps. right. you, Thank

Jack Cronin

Lisa. you, Thank

Operator

[Operator you. to back Thank Instructions] time. closing There I call further are questions for Gupta remarks. this at the no to would like Vivek turn

Vivek Gupta

operator. you, Thank

and thank like So sharing with we XXXX late you quarter forward if our October. call to in look I'd our results today to there you. for you are Thank further third joining no questions,

Operator

concludes This today's conference.

this for your you your disconnect great Thank a Have lines at day. participation. may time. very You much

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