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spk06: Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to the Agile Thought first quarter 2022 financial result conference call. At this time, all participants are in listen-only 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 then two. Participants of this call are advised that the audio of the 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 August 12, 2022. I would now like to turn the call over to Scott Gordon of CoreIR, the company investor relations firm. Please go ahead, sir.
spk04: 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, Amit Singh, Chief Financial Officer, and Anna Hernandez, Chief Operations Finance 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 for the company and are therefore forward-looking statements. The content of this call contains time-sensitive information that is accurate only as of today, May 12, 2022. Except as required by law, Agile Thought 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 Thoughts and Best Relations website at ir.agilethoughts.com. Manuel will discuss the company's first quarter highlights and provide some comments about the business and the corporate outlook. Amit will then walk through a review of the quarterly financials and our financial guidance before we proceed to the Q&A section. With that, it's now my pleasure to turn the call over to CEO Benoit Senderos. Benoit, please go ahead.
spk08: Thanks, Scott. Good afternoon. And thanks to everyone for joining our first quarter 2022 conference call. In our previous earnings calls, we outlined who we are, the sizable market opportunity, what do we do for our customers, and importantly, the strategic and financial goals we plan to achieve over the next several years. I Just Thought reported strong first quarter 2022 financial results, beating our guidance, and with revenue subsequently for the fifth consecutive quarter. We posted total revenue of $44.2 million during the first quarter of 2022, 19% higher than the same period in 2021, and 5% higher than our fourth quarter 2021. This performance is a direct result of our ongoing investments to build our sales and delivery capability in North America and to position us as a leading end-to-end at scale digital transformation services provider. We remain confident in our ability to continue to deliver sequential revenue growth. Signed total contract value is a strong indicator of future revenue performance. In the first quarter of 2022, our assigned TCV was a record $64.4 million, up 22% from $53 million in the fourth quarter of 2021, positioning us well for the next several quarters. Most of this TCV came from our U.S. clients. New customers are a key component of our organic growth as they feed our land and expand strategies. For the first quarter of 2022, we added nine new customers to our base, ranging from the financial services sector to healthcare, which are two of our strategic industry verticals. We expect this growth trend to continue over the rest of the year. While new client growth remains strong, we believe we have a continuing significant opportunity to materially expand our wallet share among existing customers. A key metric for us is the number of clients contributing $1 million or more in annual revenue. In the first quarter of 2022, we had 29 of these customers, as compared to 27 in the same period last year. Building our team of agile thinkers continues to be one of the top priorities for us, specifically our ability to attract, onboard, and retain top talent to deliver next-generation solutions to our customers. We continue to make steady progress in both our recruiting and onboarding, as well as managing our attrition rates. Some of our retention programs are in progress, such as enhancing our employee value proposition and tying it to our overall company value proposition. Additional programs being implemented involve better connection points between the business market units and a focused recruitment and retention of talent teams that are tied to the delivery functions. which allow a more effective way to work together and are resulting in dividends. On top of hiring strong experienced digital talent, our campus hiring program in LATAM and our higher risk initiatives are accelerating, which together with our strong training infrastructure is enabling us to better serve and staff our clients' needs more quickly. Another initiative is the launch of a dedicated staffing team in each region, creating better capacity planning and resulting in getting the right skills at the right time. We ended the first quarter with 2,268 billable resources, increasing 13% from first quarter 21. With the addition of key delivery executive talents over the last several quarters, including the addition of former Global Executive Alejandro Manzocchi last quarter as our Chief Delivery Officer and Chief Technology Officer, we are witnessing improved talent acquisition and retention metrics, as the initiatives launched by these new leaders are taking effect. We also continue to strengthen our senior leadership team. On the back of key executive moves and additions in 2021, last week we announced the addition of our new CFO, Amit Singh, formerly with Globan as head of finance for the US and global head of investor relations. Amit has vast experience serving corporate clients and the investment community and a track record for delivering strong shareholder returns. We welcome Amit to the team and are excited to have him continue the work of building our finance team into a world-class organization. Now, I would like to provide some details on how we take insights and transform them into reality. It is a key reason customers choose CyclePod over our competitors. The best way to do this is to highlight some of our customers who have accomplished this with our help. One of our clients in the state and local government sector had an IT organization that required transforming their inefficient operations to provide more innovation. higher functional resiliency, and a faster yield in the IT organization. Using agile methods, we aligned their business strategy to move to an output-based, higher-performing organization, eliminating waste and increasing productivity in a significant way. We moved their vision into reality that provided rapid scale, a natural progression of workflows, and speed to business results in a faster and connected way. Another example a healthcare lab management software company, was focused on chronic kidney disease for early detection testing. Using the client lab records to proactively screen incoming patients and alert doctors, we deployed casual AI techniques to identify drivers that were not based on traditional disease measures, leveraging cloud-based causality platforms and AI-driven machine learning platforms. we built a suite of high-accuracy predictive models in a very short period of time. The result was the creation of a new line of service for proactive testing that can now be offered in the highly competitive diagnostics and surveillance lab sector for early detection of disease progression. Another reason organizations choose Agile Thought over our competition is due to our advanced thinking in the agile transformation and AI data analytics space for digital transformation. During the first quarter, we conducted our Accelerate by Agile Thought, a two-day virtual conference, which is our annual thought leadership event. This virtual event focused on organizations that look to move away from the concept of digital transformation to reality. Our events showcase conversation on use cases with our clients and partners, ranging from fireside chats to panel discussions. We discussed a range of topics such as using agile methods to transform an organization to implementing AI and how organizations can cultivate a culture of innovation. The sessions were real examples from a variety of industries, sectors with additional initiatives. All discussion sessions were recorded and are available for viewing on our website. In closing, We are encouraged by what we have achieved to date and are extremely excited about our future opportunities. Our ongoing journey towards industry leadership is a direct result of the dedication and hard work of our agile thinkers. And it is why we have high conviction in our ability to continue to achieve our objectives. Now I will turn the call over to Amit Singh, our CFO, who will provide additional insights into our financial results. Amit?
spk07: Thank you, Manuel, and good afternoon, everyone. Before I jump into the financial discussion, I would like to take this opportunity to thank Manuel, the board, and the Agile thinkers around the globe for putting their trust in me for this role. Coming from another leading digital transformation services company, I've always seen Agile thought as a very strong competitor in this sector, and I'm extremely excited about working with the team to help the company attain industry leadership. Now, I would like to start by providing a brief summary of our first quarter 2022 financial results. I'll then provide our second quarter and full year 2022 financial guidance. Agile Thought delivered a solid quarter with the revenues of $44.2 million, an increase of 5% sequentially, and an increase of 19% year-over-year. Revenues also beat our first quarter guidance we had provided at the last earnings call. These results were mainly driven by the expansion in the demand of our services within both existing and new clients. As we fulfilled the TCV we had signed in our prior quarters. Gross margins in the first quarter were 31.3%, beating our guidance and improving 156 basis points sequentially and 175 basis points year over year. As previously discussed, we have a number of initiatives and trends in our business that we expect will gradually drive us towards our goal of industry-leading gross margins. These include pricing increases, increased efficiencies in our delivery infrastructure, and increased revenues from U.S.-based engagements. That said, we anticipate the possibility that our gross margins may fluctuate from quarter to quarter, as we want to remain nimble in our investments to drive DCV and revenue growth. Demand for our next-generation services is currently extremely strong, and we remain focused on hiring aggressively to capture that demand and implementing initiatives to increase talent growth and retention. Adjusted EBITDA for the first quarter of 2022 was 1.1 million, a sequential increase of 272% compared to the 0.3 million in the fourth quarter of 2021. The main driver of the sequential increase was the aforementioned increase in gross margins. Compared to the same period of prior year, adjusted EBITDA decreased 45%, from 1.9 million in first quarter of 21 to 1.1 million in first quarter of 22. The increase in SG&A we experienced during the second half of 2021 as a result of investments to accelerate growth and becoming a public company were the main drivers of the year-over-year adjusted EBITDA decline. We expect that SG&A as a percent of revenues will normalize to industry levels in the mid-long term, providing strong operating leverage. Net loss for the first quarter was 6.3 million as compared to a net loss of 6 million in the fourth quarter of 2021 and a net loss of 3.8 million in the first quarter of 2021. Switching to the balance sheet, total debt at the end of first quarter 2022 stood at 57.7 million. compared to 57.1 million at December 31st, 2021. Cash at March 31st, 2022 was 2.7 million. Now, I'd like to provide forward guidance for the second quarter and full year 2022. We expect revenues for the second quarter of 2022 to be at least 45.5 million. Also, we expect revenues for the full year 2022 to be at least 184.1 million. implying at least 16% year-over-year growth. Growth margin for the full year 2022 is expected to be in the range of 31% to 32%. This concludes my prepared remarks, and now I'd like to turn the call back to Manuel for any closing remarks. Manuel, please.
spk08: Thank you, Amit. In conclusion, we are confident about our revenues and margin momentum and expect to show continuous improvement in the coming years. We believe we are very well positioned to benefit from the strong digital transformation demand across the world. And with that, I'd like to turn the call over to the operator so that we can begin the questions and answers session. Operator?
spk06: Ladies and gentlemen, if you wish to ask a question on today's call, you will need to press the star key followed by the number one on your telephone. If your question has been answered and you wish to withdraw your question, you may do so by pressing star then two. If you're using a speakerphone, please pick up the headset before entering your request and speaking on the call. One moment, please, for the first question. Our first question comes from Maggie Nolan with William Blair. Please proceed with your question.
spk02: Thank you and congrats on the strong start to the year. I wanted to ask about the revenue growth that you saw and what drove upside to revenue in the quarter and what gives you confidence in the outlook that you've put out for the full year?
spk08: Hi, Maggie. Good afternoon. Thanks for joining us. So I would say that the TCV that we've been signing over the last quarters is becoming a big backlog for us to be able to implement the growth that we want. And our main constraint here is how fast and how quickly can we start those projects and staff them with the right talent and quality. In the first quarter, actually, I would say that a combination of price increases and new engagement starting throughout the quarter are the two main impacts on us achieving the revenue growth that we just mentioned. And going forward, I think we have very strong backlog from the TCV we've been signing. And our main efforts right now are in accelerating our staffing and obviously retaining more of our talent because the attrition The discussion is an industry-wide problem, so I think we're all battling to that. So those are the two key levers that we're trying to move in a positive way.
spk02: Thanks, Manuel. And on that last point, can you talk a little bit about your progress in your talent retention initiative?
spk08: Yeah, absolutely. So, yeah, you want to go ahead?
spk07: Sure, sure. So, Maggie, as you As you understand, and as you've seen in the industry, the attrition currently remains a little higher than where we would like it to be. And then, Manuel, you can go into, you know, the details of all the efforts that we are taking. But I just wanted to point out that if you look at the trend In attrition, you know, over the last few months, we're already seeing a month-over-month improvement in that trend. I don't know, Manuel, if you want to go into the steps that we are taking.
spk08: Yeah, I would say with the addition of Alejandro Mansoque, which came in at the beginning of the year, we've implemented quite a few new strategies to be able to retain more people. One of them is developing the employee value proposition, which was probably not sufficiently clear. And within the different geographies where we participate in throughout Latin America, it wasn't strong in all of the geographies. So Alejandro has done a very good job in the short time that he's been with us implementing that employee value proposition to tie it with our overall company value proposition. We think that our engineers really stick around because of the interesting work that we do and the possibility of progressing in their career in a company that is doing really interesting work. So we're really trying to make sure that we put that message out there and not only to retain more people but also to attract more people.
spk02: Very good, and then great to hear those client examples that you gave on the call. Are there any particular industry verticals that you're excited about that you think pose a good opportunity for Agile Thoughts?
spk08: Yes, I think that for now the two strongest industries for us are healthcare, really strong. There's a lot of large and mid-sized companies technology-based healthcare companies out there in the U.S. that require our services and that we can add value to them. So we've been very, very successful in capturing new logos in that sector. The financial sector as well is a very big sector for us and they consume a lot of our services. So we've been able to expand throughout Latin America where we have a good presence, but also bring that knowledge into the U.S. market. So we're excited about expanding more financial services in the U.S. market because as it is today, most of our financial services are throughout Latin America, I would say. But those same firms are U.S. firms or global firms, so we have the same opportunity to move with them into the U.S. market.
spk02: Thank you. And then last one for me. Can you comment a little bit on kind of client sentiment as they talk to you about their budgeting and their intentions to spend within these service areas that you provide in the coming quarters and year?
spk08: Absolutely. I mean, what we're seeing is that those budgets continue to grow. There's a combination of budgets that were traditionally placed for traditional IT and now are being enhanced with budgets for marketing and business operations. And those combinations are expanding the budgets for companies like us to do work that now becomes probably the most important in many of our clients, the most important driver for their future and for them to be successful in their industries. So we've seen those budgets grow. as well as we've been able to capture new logos. So I think there's a very big opportunity to grow within the accounts that will participate already. Most of them have huge spending in digital transformation, and we can very easily grow with those, as well as capturing new logos of the same caliber and scope that we have now.
spk02: Just one follow-up since you mentioned new logos. Is there any kind of increase in inbound of clients given this disruption in some other Eastern European delivery locations or any changes otherwise in the competitive environment? Thank you.
spk08: Yes, of course. It's been very interesting to see how this has played out. There's a lot of existing clients and new logos that we've been able to to capture because they've been disrupted by what's going on in Central or Eastern Europe and Ukraine. And even some of our competitors that have reached out to us for help because they need to continue their projects and they've also been impaired by the war in Ukraine. So we've been actually working with some competitors doing some cooperation but also being able to capture new business from our existing clients and new logos. So definitely it has played out for us. I believe in the future, this really puts in front of the IT managers for the budget owners, the requirement of distributing their work with looking at geopolitical risks. And obviously Latin America plays a very good hedge for that type of strategy for the global clients. So we are benefiting from that. Amit, you wanted to compliment?
spk07: Yes. You know, what I would add is, Nagi, obviously the company is witnessing an improving revenue growth profile. And, you know, given if we get a small amount of benefit from you know, our location advantage, delivery location advantage. I think the bigger thing to sort of look for us going forward is, you know, the broader market that we are playing in and how we have over the last couple of years significantly expanded our services and the breadth of services and hence targeting a bigger overall TAM in the market. So, yes, you know, we are guiding to a certain growth for this year, but internally we know that the company has the ability to continue improving on that growth to reach or exceed sort of, you know, the industry-leading growth that exists right now.
spk02: Helpful context. Thank you.
spk08: Thank you, Maggie.
spk06: Our next question comes from Brian Virgin with Cohen. Please go ahead.
spk03: Hi, thanks. This is Zach Azerman on for Brian. First question, Amit, congrats on the new role here. As a recent joiner with that experience, can you maybe talk about what drew you to Agile thought? As you assess the company, what do you find most attractive? And at the same time, where do you now plan to focus on most in your early tenure?
spk07: Perfect. Thank you very much, Zach, and good to have you on the call. So, look, I mean, when I was at my prior firm, I'd always seen Agile Thought as a very strong competitor, right? I mean, a smaller competitor, but a very strong competitor in the digital transformation space. So that was sort of my, you know, so I knew the firm and the work that the firm had been doing, and that was the primary sort of attraction factor for me for the company. And as we have discussed in the past, there are obviously certain things that, you know, we can continue improving on and which should help us, you know, hopefully as we move forward, you know, materially improve our top line profile and materially improve our margin profile to be industry leading. So given Azure Thought's existing capabilities plus the opportunity of this improvement both in you know, top line and margins to be industry leading was the attractive factor for me. And then after talking to all the management inside where, you know, everyone's focus was towards, you know, not just playing in this field, but being the leader in this field is, you know, another factor that attracted me. Plus, you know, as we all know, and we have seen it, You know, as we grow bigger, obviously the company at some point will become a multinational company. But as we have seen right now, delivery from Latin America obviously has its benefits for clients across North America. So that's a benefit for the company as well. As I come in to the firm, there are a couple of things that I'll be focusing on. One is making finance, call it a business enabler, using all the data from finance to help us better approach clients, better drive revenue growth within clients, better drive margin growth within clients. So rather than keeping finance as a separate organization within the company, tying finance very closely to our business and margin growth. That would be my sort of number one target. Then, given my background working with shareholders and investors, you know, trying to work more and more on our internal forecasting and, you know, our overall analysis on how we see our growth and margins trending over the next, you know, in the near term and the mid-long term. And then keeping the shareholder base and then the analyst completely aware and on board with that trajectory. So that'll be a big focus. And then finally, more operational. You know, there's a lot of opportunity as it is in all the companies to drive more and more automation and more and more, you know, efficiencies within the operations of the organization. So, I know it's just my second week at work, but those are the initial things that I'm focusing on and very excited about because I see, you know, every look in any of these departments, it's all opportunities to further improve. And, you know, the whole team is on board. We already have a very strong sales team. base set up. We already have a very strong delivery network set up. Now it's just about, you know, executing from here on. And our deal activity already shows that that execution is working out well as well.
spk03: Appreciate the complete 360-degree view there. Our follow-up, we want to dig in a bit on the workforce. So specifically just looking to see where utilization levels in the quarter versus historical dorms, and then more broadly, we know Agile Thought is well-positioned in Mexico and other parts of Latin America, and it's nice to hear the confidence on the anticipated hiring front, but curious if you've seen incremental resource and competition as vendors with outside exposure to Eastern Europe accelerate their hiring efforts in Agile Thought's backyards.
spk07: I mean, look, that has been, first of all, utilization is in low 80s. And generally for a company like us, anywhere from that 80 to 85% sort of makes sense. And for certain type of project in certain area, you can drive it higher than that. And the competition from, call it non-LATAM firm, that has always been there. Even in my prior firm, it was the same question, but when you look at a lot of, you know, not just now, even in the past, if you look at a lot of these multinational firms, they've always had presence and have always tried to grow in LATAM. So what I would say is the digital transformation market has always been competitive for talent. So I know given the current situation with Ukraine, Russia, maybe certain players will be a little bit more aggressive in their hiring techniques. But we feel very confident given our base, you know, especially in Mexico, our relatability with the talent in the region and now increasingly more building out, as Manuel had mentioned, enhancing our value proposition and all of that. We feel very comfortable in us being able to sort of continue to drive or drive strong headcount growth. And then, you know, finally, just on top of all of this, we also have to keep in mind that right now for the company, the base of headcount is low, right? Like we're still a small firm. We expect to, you know, materially accelerate on all the different areas, but the absolute number of people that we are hiring is still, relatively small. So all that works, you know, very positively for us going forward.
spk03: Thanks very much.
spk06: Our next question comes from Puneet Jain with JP Morgan. Please go ahead.
spk05: Yeah, hi. Thanks for taking my question and let me also take this opportunity to congratulate Amit. So let me ask about macro environment, more like follow up to Maggie's question. Are you seeing with obviously stocks being down a lot, concerns around strength of macro economy as specifically in second half? Are you seeing any change in client behavior, maybe reallocation of budgets or any delays in new project starts anywhere in the business at all?
spk08: Hi, Puneet. Go ahead.
spk07: Sorry, Puneet. Thank you very much. Maybe I can start and then please jump in. Look, I mean, a couple of themes that I've always played out sort of for digital transformation firm, you know, digital transformation firm, which are generally working to help drive top line versus sort of just cutting costs, they sort of become counter to economic sort of slowdown, right? Like, I mean, when the economic slowdown happens, that's when the clients need digital partners to drive their top line and help them be more competitive and better placed in the end market. So we feel, you know, what we are witnessing among our clients, we see very positive trend and continue to see that positive trend. And that is evident in the TCV that we have been reporting. And I'll leave it to Manuel to add any color, please.
spk08: I think I agree with that, Amit. I think the demand side of our business is super strong. We haven't seen any decline at all. I think we'll continue to be strong, and it's actually accelerating. I think the main component of of all of our business and for us and our peers is the ability actually to grow our teams in a way that can meet the market demands. But the market demand is very, very strong.
spk05: No, that's very good to hear. You actually answered my second question already about if you had demand constraint or supply constraint. Let me ask about hirings. for your needs, where do you hire from? Can you talk about a mix of new hires in terms of entry-level versus experienced levels, and where do you typically hire from? Sure.
spk08: Today, because of the high level of work that we do, we hire more senior individuals into the company. But we understand that going forward to be able to achieve a larger growth and meet the demand expectation, we probably need also to expand the bottom of our pyramid to college hires. So we're doing both. The college hires program is continuing to grow for us. Every month we're adding more. new programs and partnering up with different universities in different locations where we operate. So we think that is part of our future. But the reality is that the high-end type of work that we do requires senior developers and senior consultants. So I would say today most of our hires are coming from the most senior part of the pyramid.
spk05: Got you. Thank you.
spk06: Our next question comes from Surrender Thin with Jeffrey. Please go ahead.
spk09: Thank you. Just blowing up a little bit on some of the earlier commentary, I mean, it clearly sounds like it's not a demand issue at this point in time. So can you help me understand fully what the gating factor is? Does it really just come down to your ability to recruit and, you know, retain the talent? Or are there other considerations as well that we should think about, you know, scale, brand recognition, some of those other kinds of things?
spk08: I would say that the main constraint is just our ability to hire and retain people. That's the most stressful point in the whole organization because the projects are sold, the TCV is signed, and clients are hired. expecting to start the projects on certain dates. So the most stress that we have right now is hiring and just trying to meet the demand. So, you know, I think we have a big opportunity in the throughput of our hiring. Alejandro Manzocas, I mentioned, that came in in the beginning of the year. He's implementing a lot of changes, both in the recruiting and the value proposition and the attraction, the brand. uh, develop deployment through the different geographies where we hire. Um, and, and we think we have a, a, a lot of opportunity to improve our throughput and the hiring. And obviously the same, there's the same levers that you move to attract, uh, as you do to retain. So, uh, we feel very positive that, uh, with Alejandro here, we can, significantly improved both of those levers, and those have a very direct impact on the amount of revenue that we can actually recognize every quarter.
spk07: You know, if I could just add to Manuel's comments, the most important part of being able to hire strong talent is the work that a company does, and that we already have, right? And now... it's more about, call it the periphery around it, you know, just further enhancing the overall, you know, methods around it and, you know, putting in more sort of, you know, procedures in place to improve retention and all. But the good thing is we are already working with, you know, the leading companies across the U.S. We're already doing very strong digital transformation work. So we have that which is the core component of being able to hire strong talent, we already have that in place. And the other things are being put in place, and a lot of them are, so we feel very confident that we should be, as we move forward, we should be able to start hiring enough talent to fulfill sort of the demand that we are seeing.
spk09: Understood. So is it fair to characterize that the firm is going through kind of the transition from what I would call a more niche player to a larger organization in the sense that a lot of these, I'll call it, you know, processes still need to kind of be put in place at this point. How should we think about that in terms of just truly getting the value proposition to where it needs to be to make sure that you do have the talent that you do need and you are able to retain it and stuff? Is it just the small company versus the big company mentality here at this point, or how should we think about that?
spk08: Well, I've made a big effort here in, in making sure that the management team comes from big company mentality. So people from, from Goldman or DXC or IBM or others. So our management team knows how to operate at scale. And I've made a big effort in making sure that that's the case so that they know exactly what that looks like. So there is part of that, what you're saying. So transitioning and there's, there's a lot of, of, of, processes that are being changed, have been changed over the last couple of years with Kevin Johnson, for example. So there's part of that as a transition. There's also, I think, that the demand acceleration is probably faster than what we anticipated. And so the demand is more strong. And we probably need to catch up with the supply part of it. I think that's kind of what's happening. I think we didn't expect that high of a demand coming in over the last year after the pandemic. And we have, so that's just an opportunity for us. We just need to make sure that we are on par with that on the supply part of the equation.
spk09: Got it. And then just in terms of the Earlier, obviously, confidence was expressed in the full-year forecast. Can you maybe talk about if there's any sensitivity there to a potential downturn in the market? Obviously, the markets have been very volatile. There is considerable macro risk. I do understand that there was some earlier commentary about agile thought or digital transformation being a little bit more macro-proof, but how should we really think about how macro-proof you really are?
spk07: Sure. Yeah, yeah, definitely. Look, I mean, the way and, you know, as you've seen, this is the first time we're guiding to sort of full year as well. And the strategy here is going to be when we guide to something, you know, we have very high visibility in those numbers, right? Similar to something, you know, we have followed or I have followed in the prior companies. So that's where we stand. And, you know, a lot of this work is already, as you've seen in the last couple of quarters, we've already signed. It's in our signed TCV. So all of this gives us very strong confidence in this guidance that we have provided. You know, hopefully we can do, you know, slightly better than this guidance. That would be hope. But one thing, you know, we all know inside and that, you know, guiding to a 16% growth, you know, the opportunity for us to materially accelerate it from this level in the coming years is there. So I think the way to think about this company is, okay, this is the guidance of this year and we have strong confidence in this guidance. But as we move forward in the coming years, all of the metrics that we are guiding to should see year-over-year improvement. So, yeah, I'll leave it at that. And, you know, when the question was asked earlier about, you know, my goals here and then the second goal that I mentioned to make sure that the street is completely aware and always kept, and then there's a huge amount of communication between the company and the street to make sure, you know, everyone knows the direction that we are going in and all of that. You know, we'll make sure that that happens as well.
spk09: Understood. That's helpful, and I think that's it for me. Thank you.
spk06: Our next question comes from Brian Kinselinger with Alliance Global Partners. Please go ahead.
spk01: Hi, guys. Thanks for taking my question. Sorry I joined late. In a typical year, how much revenue comes from customers that have been with the company for more than a year? What's churn or customer retention, either one? And then lastly, can you comment on the average duration of a program And once they're starting a major transformational program, how easy or hard is it for them to slow their plans if their priorities change?
spk08: Hi, Brian. Good afternoon. Thanks for joining. So I would say that we always plan ahead. The way we plan is that 85% of our business is coming from our existing clients. And we plan for quite a bit of growth within those existing clients. And then the rest of the growth or the rest of the budget typically comes from new accounts. Now, I have been surprised over the last couple of quarters on the new business that we've been able to bring and the ability to rapidly grow them from a new account into a large account, large contributor into a revenue. So I am very encouraged for that. Now, in terms of churn, we actually don't have churn, I would say, very close to zero. I don't want to say completely zero, but I would expect very close to zero, uh, because we do look, uh, at a client profile very carefully before we engage. And we make sure that those clients, uh, have the potential to being very long-term clients for us, that we have the ability to, uh, to help them in their strategy. And, and we try to engagement in a very long-term fashion. So, uh, every time we landed new client, we, we, We hope and believe, and that's been the case, that it's going to be a 5-, 10-year-old account for us. I think that's the first part of your question, and could you repeat the other part, Brian?
spk01: Yeah, I guess I'm just curious. I mean, it's along a similar line of questioning that a few have asked. If a customer starts and is deep in the transformational program with you guys, how easy is it or hard is it for them to – ramp up or ramp down, more or less actually ramp down if their priorities change?
spk08: Well, what we see typically is that they have a very large funnel. Typically, the client profile that we see that we attack has a very large funnel of projects to be done, and they have limited resources in terms of budget. There's never enough budget to do all the projects they want to do. So what the client is typically trying to do is managing priorities. Now, they have, obviously, the ability to ramp down. We typically try to engage them in a manner where we take on board a large initiative and we put in place different agile squads or strong teams for a long term. They have the ability to ramp them down, but we very seldom see that what we more often concept they see is, in fact, adding scrum teams or squads to existing clients every quarter all the time. So it's mostly growing accounts for us at this moment.
spk01: Great. Thanks so much.
spk08: Thank you, Brian.
spk06: This concludes the question and answer session. I would like to turn the conference back over to Manuel Sendero for closing remarks.
spk08: I'd just like to appreciate everybody that attended and the questions that we received. I hope we were clear enough and you were able to get the information you needed. But if you need more, please don't hesitate in reaching out to us to unmute directly or even myself. Thank you, everyone, and enjoy your evening.
spk07: Thank you, everyone.
spk06: The conference has now concluded. you for attending today's presentation. You may now disconnect.
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