XELA - Earnings call transcript Q2 2021 | Exela Technologies, Inc.

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Operator

Good morning, and welcome to the Exela Technologies Second Quarter 2021 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to William Maina, Investor Relations. Please go ahead.

William Maina

morning, good and you, everyone. Thank the And conference second XXXX Technologies welcome to call. quarter Exela today Exela’s I’m and Ron by joined Cogburn, our Financial Shrikant Chief Chief Officer. Sortur, Officer; Executive

take release, being broadcast exelatech.com. via made XXXX. this and by Investor listed Following on website. is A live Information be Today’s of August Exela’s is Relations prepared is Shrikant, press page webcast, remarks to of we’ll on call conference the your will available available page replay Ron call on the which questions. XX, at of available is access replay today’s Relations the which also through Investor Exela’s the website

certain Act actual beliefs, of assumptions During to statements are under differ forward-looking August events statements. update subject obligation and forward-looking regarding current statements events number future performance of that reflect and those Private management’s as a any no differ categorized materially expectations today’s XX, will and that to may Litigation Securities statement factors XXXX. XXXX, as call, the make These could this Reform from reflects materially statements today, results of that statements. Exela undertake and financial actual call, after may from any the to forward-looking We occur cause results that be

filings of report other information, Investor Relations more Company’s the XX-K, Form on along from Exela’s periodic the in please and the website. with are recent the available For refer press or most to discussed the SEC. factors page Exela’s SEC today’s release Copies risk with

Cogburn. how views our believe these found on to of the certain additional of the regulatory refer this like website. way, operating our call be between out financial on website. Investor can the FD over non-GAAP information the also Ron, and With business. call Ron call, results GAAP Reconciliations call mandatory all We provide please note of accompanies the we non-GAAP we that to to today’s conference go turn measures. page presentation available disclosures today’s will the Relations During performance Please financial measures management ahead. CEO, our is on I’d discuss on non-GAAP our

Ron Cogburn

us I I shown morning, like and quarter for second our to want On joining thank take recently. thanks, would everyone, conference that and and thank folks. the call. our a confidence XXXX to on and behalf Directors Board existing for they the Good employees, our moment and have shareholders, new some of support of

for brighter inspired We are performance a our future. reported to recent build upon

to frontline, key our have XX,XXX minds of globally employees on of and focus takeaways. to We grateful customers. on the three been like are I the and business who Today, also winning our would taking hearts care

is digital the Exela’s where growth. seeing we opportunity opportunity accelerate to launched large we for in and First, market significant coming This plan have by in small recently are for strong medium quarters. our and solutions our strong where position strategy a enhanced business segment, growth

Second, Exela’s improving fundamentals.

pipeline base growth. multiple of revenue and stable, our is Our reflects avenues

margin plans. and and This financial QX. as our evident flexibility. strong our to Exela’s focus margin is are gross profitability we our efficiency position In addition, liquidity expansion continue third, in improving improved EBITDA metrics strong on And in

of schedule We million. target delivered November achieving on $XXX net over liquidity plan, debt our have our reducing XXXX ahead by and our

of on begin let’s Exela’s highlights. that, with X overview slide number So, with investment an

and in a into we underscores have the since slide experienced $XXX even Exela entrance addressable because and market market globally. estimated opportunity process various XXXX. business at growth our prior we see strong larger late on SMB space We growing significant in it an billion, a incremental for strong where serve our is large calls management We this total of have iterations discussed solutions position. leader

moat and We well including serve across competitive technology our industry of in that to digital investments and with XX% solutions win extensive customers Our position Fortune numerous XX X,XXX drive the automation. as us a over and verticals, serve transformation patents XXX.

work with management of some where in of relationships. opportunities the large world see companies experience, So, our to the diverse, the in not base long-tenured large customer is on that we and decades believe have have blue-chip but And with only we we place we finally, we industry significant team ahead. right capitalize

of provide. X. turn the by strong number position X market the and services the reach to number highlighting let’s scale, slide our we underscores Now, Slide criticality

countries is sets The of ability us can market. important, helps is transformation the critical operations tremendous to something you our proposition, slide, here a is from which the only value a long-tenured digital and critical this blue-chip core of automation processes This of scale, powerful well operations, increased relations. we and population from that customer are see as business the our as the which majority BPA that presented business Furthermore, solutions drive serve. this apart our handle facts power As help lives the our that an part facilitate customers’ in touch but everyday they us at our also efficiency. not our integral solutions demonstrate day-to-day

in achieved business. number would we’re Let’s reflect to at mainly $XXX pleased our like modestly Total COVID-XX QX. I’m increased the line impact, down in we nonstrategic with from now good slide X. that highlights. by to quarter seeing stabilization discuss say Variations contracts. pruning momentum revenue for second see turn second the in after continued the quarter our offset million, revenue our I -- some to of was expectations

renewal ACV Our improved to XX% in QX. rates

sector well. the our exceeding all solid vertical growth key is new We and as The many of for have our expectations. added statements SMB across of potential work public is showing of customers

strong $XX and important in million worth of margin adjusted We noting. the and delivered believe an pre-pandemic up considering we improvement efforts headwinds second current XX% of and our in it XXXX. We our profitability. our the QX further continued this in generated quarter. noteworthy Also, Now, find EBITDA adjusted COVID-XX fact increase with to underscores line here’s EBITDA year-over-year sequentially in QX, approximately XX%

Our was sequentially XXX points increase gross an margin QX of basis year-over-year. points XXX basis XX.X%, approximately and

points XXX last XXX of XX.X%, basis Our points increase adjusted and EBITDA QX from margin from XXXX. was of quarter an basis

past, As mentioned in well in work-from-anywhere our we the consolidations, automation utilize with to our facility implementing business. as technologies as model we have continue additional

operating with through a profits $XX gross increased result, by As total have transactions, in to reduce liquidity August XXXX. late These the combined equity as target our efficiencies, $XXX liquidity to us million reach $XXX promised of of our $XXX achieving of QX. in of Since million million have million, our offerings. cost, X, million we to total XXXX, as increased of $XXX enabled raised beginning strategy proceeds our range

us outstanding efforts to In debt. provided capital portion addition, a our the repurchase with of our

We X Our net to meet the ended rising of $XXX debt August and headcount QX as at with employees, expect million XX,XXX approximately to increase second our reduction demand. $X.XXX year-to-date. we billion, in half stood the

like second on Now, X. offerings. our that I’d us users our new up update our were strong with XXXX. this turn SMB into slide QX customers users growth this number XXXX, have from confidence to the on new slide quarter, XX% segment mailroom SMBs. let’s progress in and sequentially, XXX% of our The entrance digital solutions. in and customers you of number In in or small stats to SMB mailroom digital Since SMB current in the of late the you of give our our seen our see businesses the DrySign grew medium DrySign the success we consistent and

launch of recent month DMR and DrySign of the as the we our in launches launch India, Kingdom and Germany With United well in strong expect as will this the continue. QX in momentum France in

the in which near achieved solutions, we to and our market space have will DMR in we to SMB far the SMB Americas, across with additional solutions discuss success Asia, the we and plan With DrySign Europe the future. so add the

let’s revenue and results. Solutions to improved X. to adds, new customer number Now, of work, segment a statements XX%, due growth Healthcare reflecting our QX larger strong our backlog. I’d We segment of on turn in sequential volumes to new delivered slide focus like

growth also with and last Legal a nice XX% had over year. quarter QX of Our segment growth XXXX XX% from

we to volumes once people are to revenue current from subsides. and base COVID-XX our volumes COVID-XX, stable and standpoint. slowly is had geographic back lower believe segment see revenue segment coming And the in well to diversified ITP work. Our to Overall, and are improvement but return we this continue a due industry as positioned customer,

our substantial and we reaffirmed is This gives confidence in growth backlog remains increased us outlook, XXXX pipeline Our strong. today. which our

Now, let’s move to slide number X.

scratched over surface the the and have only We opportunity. in We X,XXX believe we trusted of terms potential customers deep have market partnerships worldwide. with

slide, As addressable as market. serve I billion and shown have massive -- we before on total $XXX currently mentioned this a we a

earlier. discussed over going companies addition, which and The TAM In enormous, and an our billion is medium business market after XXXX and growth in expect by XXX we small estimated market, spend. IT I further to opportunity $XXX SMB million globally the representing expand

us items in to brought our be and assets, quarter the technologies the capitalize focus team will right having closing, our that a on continue global in place So, successful team. growing by to

expansion. efficiency plans on We our to and execute improvement further drive continue operational will to margin

continue in also continue benefit to impacts numbers run normalize, on over and and our the of half an the our improvement our from with sheet in the and optimistic, balance XXXX second recovery through market. Shrikant? rates. We in becoming the strong, results focus as financial to and we seeing customer the expect and to stable, our base renewal guidance turn Sortur the will more to I’ll and SMB COVID results COVID-XX Shrikant volumes is our CFO, pipeline sentiment positive the revenue economy global also detail. our the call -- now flexibility. to great strengthening we’re remain We more is In from

Shrikant Sortur

well full prepared we year-over-year everybody. profit results report for take morning. and liquidity adjusted and as the position, will strong sequential and balance remarks, update segment our good call consolidated Thank to discuss of plans. revenue, balance sheet and provide you the guidance expansion gross as In my you, and joining are EBITDA sheet and Good year. execution Ron. improvement margin an EBITDA margin happy our morning, this adjusted I for on Overall, you through our Thank

done we are are we the The GAAP the reconciliations numbers. filings presentation. have our reporting and in past, both, in As appendix in and of the non-GAAP

Revenue million, of a $XXX.X COVID-XX for work and the year-over-year. for on-site totaled Revenue XXXX decline continued second results. from of XX volume driven $XXX sequentially XX.X% the and impacted of review to slide year-over-year. and ITPS decrease quarter is by on QX segment lower second start our decrease primarily the our Let’s was that due transaction million, impact X.X% ITPS X.X% This a X.X% delayed and segment. quarter

larger increase new statements by was driven client backlog. revenue volume and year-over-year. XX.X% $XX.X and primarily Solutions Healthcare increase XX% a from of of due sequentially increased an Our segment existing million, clients work, to totaled The growth

Legal our Loss XX.X% QX and Lastly, was and XX% from million, revenue year-over-year, segment up and predictability. an Prevention signaling improvement $XX.X more

on metrics. our to profitability Moving

million, Our derecognition due termination. profit facility or increased QX lease gain $XX.X focus This by management. gross from from cost million approximately lease reflecting on ongoing our also to XX.X% a includes $XX.X operating $X.X million production an of liability to

and for costs, points will the sequentially, points higher representing XXX We second EBITDA the Our XX% gross of $XX.X XX.X% increased adjusted QX sales. profit lower decline mostly expenses quarter margin half SG&A to offerings, of million, professional million, The in to the quarter we delivered sequentially related advisory sequentially year-over-year and and the costs equity delivered expect of We XX.X% basis back year-over-year. and despite totaled which year-over-year our basis for up fees G&A $XX.X XX.X%. sequential second XXX year. down X.X% in

XXXX. Our points QX basis XXX the basis quarter from second second from margin was points XXX up the adjusted for of and EBITDA quarter XX.X%,

efficiencies, our and which our deployments, of million were expansion solutions, infrastructure I including cost expectations. facilities QX are our benefited $X plan helped multiyear of X.X% with which real just our estate costs of have our as IT expenditures benefiting margin line Our reduce or expenses. deployment Capital facility in from QX work-from-anywhere mentioned, which in part cloud sales,

A June as ATM timing quarter on credit XXth Please of due the million million proceeds and was $XXX XXXX. million million include and excludes services June for from that for of million difference well of cash results our offering closed $XX XXXX, XX, of Finally, under fees and the of $XXX equity on agreement net view consisting This global found reference. transactions as respectively. to Xnd, be X, our on XX our your of Xst not our advisory XX, does sheet facilities. of our professional cash, for settled XXth and add-backs XXXX year-to-date August paid availability slide note, XX June June for $XXX for can credit balance detailed second $XX through as liquidity June

industries and strength customers Exela. and long-tenured and First, as Two to this that customers prospective XX. Turning with across our that diversification trusted key significant we of partnership, providing existing to industry of with solutions tremendous with I’d of vertical. The slide: a breadth serve cut make points to our revenue customers. points like thousands slide both reference enables, and This have every gives critical major stability for us

as low Second, well-positioned have the concentration, tech, we growth, vertical and to services, economy like global for deep customer expertise the post-pandemic. continues banking, insurance, industries that growth, and strongest financial with especially projected are recover, healthcare

high-margin business revenue. Our DAG total the of represents X%

the execution discuss more slide I’d our deleveraging detail. like a announced presentation This strategic our XX. of initiatives. powerful successful slide equity in to to is Moving strategic recent and previously offerings of

the conviction liquidity markets million that and and growth our XXXX. continue has million Company QX strengthening $XXX the announced of to capital report the in of its $XXX to $XXX target million equity sheet. with pleased very balance be on in resonated are of exceeded the focused current our to have plans, We We’ll

offering August ATM for And Ron million has stock of $XXX and Exela gross X, gross under as gross raised ATM a buybacks year, $XXX stock of aggregate As in million. March XXth, shares million $XX.X of Xst million we equity proceeds the from ATM announced ATM offerings. $XX sale common of program. $XXX gross $XX proceeds On $XXX XXth, On Exela Exela aggregate XXXX, $XX.X million offering. the completed completed aggregate three this of of completed approximately Utilization proceeds. debt or Exela of of stock in program. the equity from January an million shares at-the-market since the million common offering of for an completed million common offering warrants total mentioned, under million June a previously for has $XX.X sale under proceeds remaining offering, in in ATM our this we proceeds of

year interest improvement debt the increased pleased We our lowered expense against value-creation this our cash opportunities. and with are balance We progress reducing by our our sheet made in growth strengthened flexibility burden, our financial plan. and and annual and have we debt increasing to reduction pursue liquidity resulting

key business on summarize and Moving slide XX. to I operational updates. to would like our

momentum. revenue business several our base and As stable we Ron mentioned, see of is areas

customers We have added new new several and statements of work across also added many logos. customer key

indicating the is for potential growth. pipeline sector public Our solid

to business growth our backlog Healthcare first volumes quarter revenue. the million improved to benefit on is Our $XX internal from expected rising profits from With GAAP exceeding is and clearance, leverage improvement, and respect flattish SMB operating expectations. operating by our

cloud efficiencies neural and We data document such of and implementation processing, have usage. tools increased have as intelligent the and automation expanded our through we networks

several facilities also of We of closure model. the leveraging completed work-from-anywhere success the our

our revenue to expect leverage utilization Looking as ahead, we drive additional growth higher from operating improves.

in XXXX to for three reduce the us million flexibility. equity flows. strategically offerings to ultimately, of strengthened debt, interest gross enabled we and annual and Finally, net lower half expense completed first $XXX have increased free balance financial which higher cash our proceeds, our our sheet leading We of

at high, has is and we and support we as continue liquidity to been capacity historic believe penetrate growth have Our sufficient COVID to our we anticipated as TAM subsided. a

slide XX. to Turning

this today’s presentation. at today. length will You from takeaways We’ve on discussed slide the everything see

cover of we say our again. work for Exela’s it and to that going not hard to I’m members to and our their thank want dedication success. all So, Company’s I team customers would XX,XXX-plus

in half focus continued and our support. shareholders want for the continue upon momentum of We positive in to XXXX on second we beyond. building to QX, We’ll the thank their generated also

our to like upon touch Finally, I would XXXX guidance. now

you for to to the all between very please X% With revenue range XX% our we for operator, be and ranges, gross Ron to guidance to As thank open be in year margin which billion; are margin questions. include much on $X.XX $X.XX prior I’d ‘XX levels full that, be mentioned, call to to reiterating CapEx of between the XX%; of adjusted the call approximately us like EBITDA of XX%; billion XX% XXXX joining today. revenue. for

Operator

question ahead. Josh [Operator Instructions] The Please Cantor first Siegler Fitzgerald. go of is from

Josh Siegler

Yes. the to a year? pace of taking you speak or segments half call. morning. little which my the the revenue Can accelerate Thanks volume? for back about expect Hi. of as we move Good you industries And through bit

Shrikant Sortur

Sure. Thanks for that question, Josh.

As you probably seen our we both year-over-year noticed, Healthcare growth. sequential have and LLPS, and

the we public We seeing positive those has sector professional including Healthcare. expect in particularly with other to stable the utilities services. Within see ITPS, where revenue. those are It’s in growth industries, commercial a and few been trends been segments,

year, in expect other hopefully our payments of and the where yet back as not up the of to the we to industries hopefully, some from volumes perspective. subside back bills headwinds half are the start where and pick So, COVID for up

Josh Siegler

How And SMB the That’s shifting increased any of future the you to biggest looking are expect a there? then, little Great. super seeing future, helpful. And DAG. of going? product is which gears the DAG further build-out bit you also, sales out to growth? source traction be do And force to the

Ron Cogburn

the is DrySign, The for more first the DAG we’re two Josh. expected. question into ever the Ron. were number with or in and question, as than subscriptions sales and we looking climbed adoption. launch have And we market, a the terms This entrants seen, of of the And good those of DMR users you’ve is seen, has

help with And we’ve Europe, And sales and Germany offerings. at and manage the look have the going offer products both as this, have second a pointing that. launch India. separate of quarters, and to or force solutions in call these coming to probably force look we’ll we see announcement and We mentioned of some the when we particular we have products, we’re sharing that launched with to half, in to the very in those. now roll France as at but And in those dedicated we those that begin forward and place other excited to out on along how drive sales everybody separate it we’re

Josh Siegler

half XXXX? more take Last feeling me. how Thanks noncore alternatives give on one what ballpark figure terms Can for of strategic sale equity an out Great. the the in just the perhaps us color Company of for there. strategies the year. kind you’re to provide and trying asset may of a a issuing or kind update of back completing you Just in of through your

Shrikant Sortur

a question, one. an great again, Josh, important Sure. right,

simple Given initiatives saying of -- importantly, as is that operating focus quarter, are there headed on executing, we front that out said, laid That of this direction. targets focused it have to we’ll things know, from are so our That executing, lot that comfort we that front. financial led an a the are have the way us many such gives to or continue a us more and an in we on on post to been hit. do impressive able you right on be we

what sure with making terms to want cost the the then, value shareholder and of it’s of the really in near-term future, capital. shareholders. into do had So, We in equity we value account, create debt to is taken for balance

and we’ll have when Rest to We figure things updates various arise. provide they assured, out. as specific

Operator

is of The The Jerry from Wang Please Carlyle Group. go ahead. next question

Jerry Wang

a I in check Hey, we business. other the made quarter. a It lot two. guys. the for year. the the softer bit versus last that wanted Thanks of late on questions. sometime to promises is Met Good ITPS

third fourth balanced XXXX, that the third like in that the expect more come in -- expect the or the we’re fourth in reaffirmed quarters? expecting fourth growth you to back Given more do and quarter. quarter, you kind for growth of guess, guidance for revenues you your Do in in -- or I

Shrikant Sortur

year again. you in usually little the unified Sequentially, bit. question. back $XX.X on drops. $XX.X zero in I year-end Josh million Thanks Since Josh, it’s for it’s end on so our the or zeroed Josh. are it’s ITPS, a business, let’s communications down -- said, of year-over-year, -- your a million revenue sorry, Sequentially that from

Sorry, Jerry. I misquoted.

driver. which serves sequentially Year-over-year, drives year-end that different was That’s certain to I a the ITPS it’s ITPS down. a So, of indicated, seasonality, variety revenue the as statements industries. major

Bills in hope additional not seeing are a in couple business. is payments, We QX. momentum -- we volumes on-site Where We seeing to on we’d positive and the of pick upticks there’s other QX or that it public in like sector to. as softness up as starts are gets much and areas. to and

that the come material people are confidence ramp a to said, project will As -- revenues side back or we Particularly, higher in time will confident up. late in That be pick there that to QX that our business business is that projects ramp. the will expect that are start frame. are to there’s work, we that of driving which QX, industry QX,

of probably had SOWs you we won. As that have saw, we’ve number a

been Our QX positive. renewal rate has

us where some of that could a from the half pan gives the things confidence want year we of be second So, out the these to perspective. revenue

Jerry Wang

mention Okay, all quarter revenues million gone exited might quoted transitional stuff ITPS? cost appreciate second this you that’s of that’s ‘XX, the call kind -- there, didn’t last transitional as by $XXX that first revenue that great. The be Are Granted, the in the stranded quarter year, at point ‘XX now transitional late largely outlined back in of I -- but -- of some that or much. sometime of there then done. color. sometime it, you the

Shrikant Sortur

Jerry, Yes, it is.

$XXX think I I months of quarter, a so kind at against trending last or we QX, million. of trailing a XX target mentioned were So million on $XXX

a in million, That said, It’s of revenue. transition similar business there’s trailing it’s are around for where million XX the higher months of $XXX QX. transition We the on-site side range $XXX revenue.

last Some of QX QX were those exits in and of year.

of perspective. answer of volume seeing is, from A quick also transition run and sites, couple a simple the off are of we apart trailing your the volumes, compression tail from on-site the one rate last see ITPS to a question the XX-month quarters is it’s other that reasons So, in of the down million you $XXX revenue. for

Jerry Wang

Okay. Good hear. to

so or you employees. XX,XXX Your mentioned in employees, I think

Are are same lower you still I or in think, you XX,XXX. now? you’re context, to that down

Shrikant Sortur

We It’s employees. same XX,XXX context. are in the

Jerry. context, same the in we’re So,

Jerry Wang

of Okay, back really or views great. you to I know buyback? the million one. And of you what’s then, looking kind last the Are $XX debt. bought of that, retire

Shrikant Sortur

We evaluating and options our strategies. are all

important make or retain lastly, get we to is keep to it’s to goal sure liquidity, debt sure our costs The for flexibility costs interest low. the and service and us we make financial delevering,

In terms we it’s about retiring, share of when specific more. strategy that something obviously, we’ll have probably

Jerry Wang

Okay. Fair same enough. you say piece Would the $XX ATM stub million the left? for of of

Shrikant Sortur

is Yes. That right.

Jerry Wang

Thank Okay. you. Fair enough. Great.

Shrikant Sortur

Jerry. Thanks,

Operator

Graf The next Cowen. from question is of Alexander Please go ahead.

Unidentified Analyst

I just revolving had in buying a question that’s levels? liability current given fresh -- are the that near-term the regarding more the addressing facility. at debt, are the trading this with How management how during credit in? And you guys -- a potentially all back balancing and about light regarding you. you thinking capital maturity discount come maturity Thank with of

Shrikant Sortur

for thanks question. Jerry, I Similar told be to Alex, right, Yes. the to what about we’re it. going strategic

have key have And I the the to we’re the over sheet, operational good as -- now, that the it thinking right when going us drive how That and we when sure do next some put we use. to cash months also and financial that improving of hand, have importantly, few of flexibility is something it is improved that the balance focus and we unfold the the the quarters the gives in at that the revolver, to said, have, make right? achieve we protect it, thing, it keep based liquidity stronger or the does of good on the through. flexibility So, targets flows. financial said, we that other importantly, things are we margins, more one on liquidity context More to liquidity

Unidentified Analyst

that of what’s the loans terms you aggregate in between And the kind Great. of back, $XX amount and it. Got split purchased? purchased bought bonds million

Shrikant Sortur

likely it our most event will information are the That XX-Q, pass will subsequent that else, anywhere disclosing be we probably not on we in given on footnote that.

Unidentified Analyst

cash want I the does cash to a enough. right? number? confirm million, include Fair for That’s the agreement, credit any number true adjustments just not that $XXX of Okay.

Shrikant Sortur

correct. is That

Unidentified Analyst

And up great. XX%, on expansion, margin just as Okay, around you gross to mentioned.

million. So, the four think is XXXX talked about I that? about and the help year that closures, real facilities in Can your business. certainly roughly, operating $XX leverage maybe this and delta between quantify us you have the helped had of You estate employee reductions roughly

some saving helpful how just via to that be maybe plans. on your different saves cost quantify cost granularity So, would super --

Shrikant Sortur

higher And with the a how a extremely cost said, that a is Sure, million $X.X QX stranded exiting, out, of of the margin gives perspective. had existing gross from in job came Again, deliver performance things margins. of That pickup kind look we that -- at in question sure. at is capacity have -- particularly rationalizing, volumes. more our perspective, highlighted cost particularly the those us to a to That’s or probably and real coming it pleased for we or onetime we higher of example I QX right? from one to quarters the where we fairly Great you’ll where One prepared see it’s that there. derecognition two, A, we are That increased it’s really so of revenues way are the decent exited. project-based done and few more of linked remarks are come a estate we the is facility that we B, footprint through. in last use a a Number

of of higher be experienced in are Second, managing were projects general, QX, these That some to helping. through favorable that apart, So, it probably some right? can in we when demand-driven capacity are only a And revenue. margins. there’s our words, QX. the know certain going other long-term management, operating call you we leverage for we very recurring capacity or well, capacity expansion happens In

Operator

Cantor of follow-up Siegler Josh a go from have we Next, Fitzgerald. Please ahead.

Josh Siegler

case the first on Are touch some to moving seeing wanted or delta. how any you any forward? of clients? of impact volume change your just And any Obviously, sort on globe. spreading may from hesitation that throughout I it’s

Ron Cogburn

This is it. crack Josh, a take Ron. good at a I’ll it’s question.

to We facility, at have been it. customers how manage more COVID-XX, mode manage now a in year react how around this operational than how a you for it sort you of our

around kind of or discipline, impacts. those to if manage we’ve will, that types So, that of through had you cadence how

out variant took Delta the is seen it but the really so, when we reaction third saw that last there, COVID-XX And haven’t from we the initially of hold certainly kind second and quarter. year,

of our partners. optimistic happen, as previous So, look I but we’ll us look can we through any that navigate you might today, remain long-term calls. at didn’t mention that some it customers because changes the

Our than XX our customers been XX, with largest us have top customers, years. XX more

their of crisis a waters have So, year. confidence, got last rough brought through we have and real we a navigated through lot we them

pretty headed. good about things where we So, feel are

Josh Siegler

That’s your hear. prepared I you increased Also, you XXXX great to mentioned that in your Great. outlook. believe in confidence have remarks,

what bolstered about occurred feel XQ stronger maybe events you that confidence So, outlook? in and that your

Shrikant Sortur

take more that. you I’ll add Yes. Okay. can color. Ron,

addressed will QX. I we’ve we’re one months they ramping coming a volumes we hopefully, other it keeping of but mind unknowns they think to that’s it’s next up. a some the volumes project few back QX the over ramping us up. projects point, the your have that are the coming us One, we not had, it relates couple steady It’s could headwinds quarters. on To delta, recently that are and that up the the line we rates revenue particular SOWs and as of statements run back renewal into, the give sight in and Josh. -- are earlier up sure, of that in question, work that’s and That’s thing. questions, late earlier gives of I that have signed one It’s a -- of

Ron Cogburn

That was good, Shrikant.

quarters and And work indications not we two first have looked behavior, of facilities normalize. look of cities when the in Josh, at when of of on-site looked at normal months for beginning to talk a will Company, this least Let about we we’re signs call operations year at from we’ve of new at quickly. we for. the forecast, normal, how see the save what -- there’s it overall, XX to in hoped we how me larger just lot the the come that that as the months, at a we for we how that more look of maybe perspective for things we’ll But business. XX have future, planned we have back seen And we add, the things the

So, for a that testimony, ACV. XX% is The anything. as I as the quarter in rates much the think renewal

we we’re a what confidence that’s real -- clear positive. have sign for So, are them. a it they see in that And as doing people

Operator

turn question-and-answer concludes This like to session. remarks. I for Cogburn would to over our closing back the conference Ron

Ron Cogburn

reiterate Thanks, heroic Thank in given well. by the our and the the us they’ve that we thanks that has future. for announcements XX,XXX as look employees that have been to shareholders, call. new QX the near and we confidence us, SMB efforts today. to we’re on around everybody operator. the us we that of existing, just offer I’d to for It going solutions some those brought are and support have they And the tuned Stay you. in and more like seeing employees have where business the forward

Operator

The Thank now attending you concluded. conference has for presentation. today’s

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Exela (XELA) 10 Aug 212021 Q2 Earnings call transcript