AgileThought, Inc.

Good day and welcome to the Agile Thought, Inc. fourth quarter and full year 2021 financial results and corporate update conference call. At this time, all participants are in a list-numbing mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star N2. Participants on this call are advised that the audio of this conference call is being broadcast live over the internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call through June 30th, 2022. I would now like to turn the call over to Scott Gordon of Core IR, the company's investor relations firm. Please go ahead, sir.

Good afternoon, and thank you for participating in today's Agile Thought conference call. Joining me from the company's leadership team are Manuel Senderos, Chairman and Chief Executive Officer, and Ana Hernandez, Chief Financial Officer. Before we begin, allow me to provide a disclaimer regarding forward-looking statements. This call, including the Q&A portion of the call, may include forward-looking statements related to the expected future results of the company, and are therefore forward-looking statements. The content of this call contains time-censored information that is accurate only as of today, March 31st, 2022. Except as required by law, Agile Cloud disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. The company's actual results may differ materially from its projections due to a number of risks and uncertainties. The risks and uncertainties that forward-looking statements are subject to are described in our earnings release and other SEC filings. Today's remarks will also include references to non-GAAP financial measures, such as adjusted EBITDA. Additional information, including reconciliation between non-GAAP financial information to the GAAP financial information, is provided in the associated earnings press release. This conference call will be available to replay via webcast through Agile Thought's investor relations website at ir.agilethought.com. Manuel will begin with an overview of Agile Thought, followed by the company's fourth quarter highlights. Anna will then take you through a review of the quarterly and full-year financials before we proceed to the Q&A section. With that, it is my pleasure to now turn the call over to CEO Manuel Cinderos. Manuel, please go ahead.

Thanks, Scott. Good afternoon. And thanks to everyone for joining our fourth quarter and year-end conference call. For those still a bit new to our story, I will provide a brief corporate background before highlighting the key themes and results from 2021, as well as our outlook for the coming year. We are a leading provider of next-generation software development and digital transformation services for our corporate clients, many of which are Fortune 1000 companies. We leverage our engineers and IT professionals to help our clients achieve their business goals and accelerate ROI. While our corporate customers are diverse across many industries and their markets, they all share the desire and need to adapt to the evolving digital landscape. The driving forces of mobile analytics, cloud technologies, AI, and IoT, just to name a few, are extremely strong secular winds that are forcing companies across the world to accelerate, or in many cases, begin their digital transformation process. This digital transformation services are the fastest growing segment of IT services. This market is forecasted to grow up to 15% annually over the next four years. In fact, industry analysts at Gartner expect this market segment to reach 750 billion by 2024. Only a small fraction of businesses have begun digital transformation, which is expected to account for 53% of overall tech spending by 2023. So against that background, how does IGELPOD fit into the IT landscape? We deliver full lifecycle software offerings and implement interwoven technologies to help our clients digitally position themselves. We segment our full cycle capabilities into three verticals we call Innovate, Build, and Run, which offers strategic consulting, digital delivery services, and digital operations services, respectively. Our clients especially value our custom product development capabilities, our agile development methodologies, and the iterative design process we have developed, which allows for continuous improvement as they run through our DevOps framework. Our blue chip clients are the larger corporations in their industries that have ample IT and digital transformation budgets. Currently, corporate clients based in the U.S. account for approximately 65% of our revenue. However, we are focusing our sales and new client efforts in the U.S. with a goal of reaching 85% on that metric within two years. We service our clients utilizing our growing team of approximately 2,600 employees, of whom 87% are in Latin America, with the remainder based in the U.S. Thus, we use a strategic hybrid onshore-nearshore approach, as we benefit from being able to tap into a deep pool of STEM talent in Latin America with a regional focus on technology. We then foster new hires with our corporate culture and training programs to build a sustainable workforce that forms the foundation for our anticipated growth. The regional proximity to our U.S. clients and the ability to offer client support in most of the time zones for our U.S. clients makes our near-shore delivery a win-win for both sides. The bottom line for us is that as we increase our mix of revenue from U.S. clients and expand our near-shore delivery from Latin America, we can accelerate revenue growth and improve gross margin percentage. Couple this basic strategy with a recent achievement of minimum scale to obtain operating leverage of the SG&A that is in place to support our multi-year growth targets. We can now expect to grow our bottom line at a faster rate than our top line. As we have previously indicated, our long-term goals are organic revenue growth of 20%, gross margins of 35%, and adjusted EBITDA margin of 18%. In addition to our strong organic growth, another significant growth driver is M&A. As illustrated by 11 acquisitions completed over the past six years, we will continue to look for talking acquisitions that can strengthen our capabilities and offerings while providing additional sustainable upside and operating leverage. With that background, let us now turn our attention to where we are today. The year 2021 was transformational for Agile as we made considerable progress on several key elements of our strategy, positioning the company for accelerated growth in 2022 and beyond. Our decision to invest aggressively in our U.S.-focused commercial sales force has paid dividends, as we have delivered four consecutive quarters of sequential sales growth, added 36 new customers to our enterprise customer base in 2021, and signed new contracts, or TCV, worth $218 million, which represents a strong 1.4x book-to-bill ratio for full year 2021. We have also made tremendous strides this year in both our recruitment initiatives and additions to our senior management team. In 2021, we added a net of 298 billable employees to our staff. Despite a competitive market for talent, our attrition shows initial signs of steady decline as a benefit of new internal programs and employee benefits. while our recruiting efforts continue to drive new talent into the iJobPod family. Turning our attention to our financial performance during the fourth quarter of 2021, revenue increased 22% year-over-year and 4.2% sequentially to $42.1 million. Both growth rates align well with our targeted 20% year-over-year organic revenue growth. We added nine new clients during the fourth quarter and 36 in total in calendar 2021. This is compelling evidence that our investments are beginning to pay off. As new client acquisitions is critical component of our accelerating long-term growth. The trend in new client acquisition is strong as we have added 19 new clients in the second half of 21 as compared to 17 in the first half of 21. We are further excited about trends in contract bookings and increased percentage of revenue from the U.S. Thus far, in the first quarter of 2022, total contract value in the fourth quarter of 2021 was $53 million, which was up 130% year-over-year and represented a book-to-bill ratio of 1.3x. Encouragingly, our internal data thus far indicate that bookings in the first quarter of 2022 will increase 25% sequentially, paving the way for strong revenue growth later in calendar 2022. In the third quarter of 2021, gross margin percentage was a bit weak due to increased staffing ahead of new projects and engagements that were expected to start fourth quarter of 21. However, Gross margin percentage rebounded to more historically consistent levels of 29.7% in the fourth quarter, leading to 41% year-over-year and 16% sequential increases in gross profit. Key to our growth is our ability to source and onboard talent to convert expanding bookings to revenue. As we consistently deliver sequential organic revenue growth, we do expect quarterly gross profit and gross margin to potentially fluctuate over the next couple of quarters as we ramp up our talent acquisition and onboarding and prepare teams for new projects. However, we anticipate that our strategic focus on securing a higher U.S. revenue mix coupled with an increase in our near-shore delivery will lead to an increasing trend in gross margin percentage in the coming quarters, and in particular, in second half 2022. Again, we are targeting 35% gross margin in the longer run, as compared to 29.7% gross margin in the fourth quarter. With our higher expected revenue and margins, we also expect to see a substantially improving trend in adjusted EBITDA. In many respects, we are right on the cusp of that right now. It is worth pointing out that over much of 2021, we have been scaling our organizational structure. making investments for future growth, and preparing to enter the public market. All these elements have come with increased costs in our SG&A, but some of these expenses will have run their course, and we believe such expenses will begin to normalize going forward. SG&A, as a percentage of revenue, is expected to decline, increasing our operating leverage in the process and accelerating our adjusted EBITDA growth. Turning to the balance sheet, we materially reduced our debt, total outstanding debt of $57 million as of December 31, 2021, compared to $137 million on December 31, 2020. In 2022, we expect to continue our deleveraging effort, refinance our external credit facility in the second quarter, which will extend the maturity, lower our interest costs, and provide greater operating capital and flexibility. In summary, our strategic objectives are to grow our market share in the digital transformation market, place more emphasis on acquiring new businesses in the U.S., increase our new short delivery in our engagements, and grow Latin American billable employee base. We believe we are extremely well positioned to continue to execute on these goals in the coming quarters. And with that, I will now turn the call over to our CFO, Ana Hernandez. who will provide additional insights into our quarterly and yearly financial results. Ana?