Genpact(G)2023-11-09 02:39Financial Data and Key Metrics Changes - Total revenue for Q3 2023 was 0.76, up 1% year-over-year [7][25] - Full year 2023 revenue outlook revised to approximately 500 million, down 2% year-over-year [7][21] - Digital Operations services revenue was $636 million, up 6% year-over-year [7][21] - Revenue from priority accounts grew 6% year-over-year, accounting for approximately 64% of total revenue [11] Market Data and Key Metrics Changes - Financial services revenue increased 6% year-over-year, driven by large deal ramps [21] - Consumer and healthcare revenue declined 2% year-over-year due to pressure on short cycle growth-oriented digital marketing projects [21] - High tech and manufacturing revenue increased 4% year-over-year, primarily driven by new logo wins [21] Company Strategy and Development Direction - Focus on large transformational deals prioritizing cost reductions, with bookings expected to grow at least 25% in 2023 [6][9] - Continued investment in generative AI, with over 90 specific solutions in testing and deployment [14][16] - Expansion of partnerships with cloud technology players to co-innovate and create joint IP solutions [11][12] Management's Comments on Operating Environment and Future Outlook - Management noted increasing pressure in short cycle advisory and project work, leading to lower than expected revenue [6][8] - Confidence in long-term annuity-based services remains strong, with a record high quality pipeline [9][10] - Management expressed cautious optimism for 2024 growth, with limited visibility into short cycle revenue [10][30] Other Important Information - Attrition rate for Q3 was 25%, significantly lower than 36% during the same period last year [13] - The company added 32 new logos during the quarter, indicating a bounce back from the first half of the year [10][64] Q&A Session Summary Question: Comments on short cycle versus large deals - Management acknowledged strong long cycle annuity deals but noted challenges with short cycle projects impacting revenue [32][34] Question: Catalyzing short cycle work - Management indicated that while there are no immediate plans to catalyze short cycle work, generative AI budgets remain stable and could drive growth [36][38] Question: Non-FTE work traction in high priority accounts - Non-FTE commercial models penetration is at 16%, with higher adoption in priority accounts [42][43] Question: Impact of current dynamics on margins - Management discussed the dual dynamics affecting gross margins, with large deal ramp-ups having a dilutive effect in the near term [45][46] Question: Visibility on Data-Tech-AI and Digital Ops - Management confirmed strong growth in Digital Operations and acknowledged weakness in Data-Tech-AI going into Q4 [49][50] Question: New logo additions by verticals - New logos were well distributed across all verticals, indicating a recovery from the first half of the year [63][64]