AgileThought, Inc.

Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to the Agile Thoughts Second Quarter 2022 Financial Results Conference Call. At this time, all participants are in a 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 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 November 11, 2022. I would now like to turn the conference over to Mariana Franco, the company's head of investor relations. Please go ahead.

Good day, and thank you for joining IL Thought's second quarter 2022 earnings conference call. Our speakers for today's call are Manuel Senderos, Chairman and Chief Executive Officer, and Amit Singh, Chief Financial Officer. Before we begin, allow me to remind you that some of the comments on our call today, including our business and financial outlook and the answers to some of your questions, may be considered forward-looking statements. Such statements are subject to the risks and uncertainties as described in the company's earnings release and other filings with the SEC. The content of this call contains the time-sensitive information that is accurate only as of today, August 11, 2022. Except as required by law, I also disclaim any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. Today's remarks will also include references to non-GAAP financial measures. such as adjusted diluted earnings per share. 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 IELTS Thoughts Investor Relations website at ir.ieltsthoughts.com, where you can also find a copy of our earnings release. I'd now like to turn the call over to Manuel Sendero, our CEO.

Thanks, Mariana. Good afternoon, and thanks to everyone for joining us. It is a pleasure to be here with you today. During our previous earnings call, I emphasized the expansion of the digital market, which continues to remain strong, along with the work we have been doing to build our team and to continue delivering next-generation solutions to our customers. Since speaking with you last quarter, we have made solid progress across multiple fronts of our business that I'm excited to share with you today. I'll start by giving you some highlights for our second quarter results while providing insights into the underlying business trends and the work we have been doing to address the market. I will also talk about how we have been transforming to leverage significant digital transformation opportunities both in the near and long term. This has been, again, a strong quarter for Agile Thought, with revenue totaling $46.2 million above our guidance and representing a growth of 4.4% versus previous quarter and 18.6% year-over-year. Our gross margin for the quarter was 33.3%, representing an improvement of 200 basis points, versus the previous quarter and 220 basis points year over year. Now to talk about the end market. According to industry research firm IDC, digital transformation spending will sustain its accelerated pace of growth and investments will reach 3 trillion in 2026. AI services is forecasted to deliver the fastest spending growth over the next five years. The digital technology services market is expanding quickly, and we continue to see the proof of this in the growing demand from our clients. In the second quarter of 2022, our LTM signed TCV remained strong at $239 million, representing 1.4 times LTM book-to-bill ratio. We now have 32 clients generating revenues above $1 million each year, This is five more clients than one year ago and three more than previous quarter. We have been investing to capitalize on this demand, first with our agile squad delivery model, which we officially launched a couple of months ago when we announced our eight technology guilds. The guilds organize our delivery structure according to specific technological expertise and then form agile squads. Squads are the core delivery teams for our client accounts, formed of anywhere from 4 to 10 plus engineers, pulled from across the guilds based on our client needs. We go to market through market units, where each market unit has three main leaders, a market unit head, an operations head, and a technology head. And then the market units are organized by a major in an industry and a minor in a geography. This framework enables the sales team to not only provide industry expertise to our clients, but also provide a strong technology perspective based on our guilds and allows the delivery teams to continue building expertise on cutting-edge technologies. The technology head of the market unit is responsible for drawing on talent from the guilds to form an agile squad. We approach our clients through our three Ds, discovery, design, and deliver, allowing us to offer them end-to-end services. We typically start with the discovery phase. This is the consulting part of our business, where clients' needs are assessed from the perspective of all guilds. In this phase, we help them decide what problem to solve first and select the products or platforms to rely on. In the design phase, we leverage our guild's expertise to drive tailored outcomes, considering every aspect of the solution, like visuals, functionality, and user experience, before moving on to the delivery phase. During the process, we usually gather feedback or analytics that give rise to an iterative process that allows continuous improvement. Our operating model is a result from drawing best practices and learnings from 20 years in the IT and software development industry as we implemented the lessons our executive team has learned throughout their careers. This model is increasing our speed to market on solutions while driving innovation in an agile manner. Talented, dedicated people are the key to success in our business. and we have been investing in building a world-class scalable ecosystem for talented technologies to thrive and grow their career at our firm. We recently hired a new chief people officer, Gonzalo Monez-Cason, who we are very excited to welcome. Gonzalo is an IT services industry veteran with deep knowledge and passion for people and talent growth and retention. He has experience in building high-performing organizations with a people-first culture that fosters growth. Our goal and Gonzalo's goals as CPO is to make Agile an employer of choice, not just in Mexico but in Latin America and the U.S. Initial key priorities are accelerating recruitment, enhancing global internal processes, and structuring the organization to build clear career paths. Rosalo has already added to the team a global talent acquisition leader who will zero in on our recruiting process to make sure it is strategic, efficient, and technology-focused. We are already working to open new markets in the region to expand our talent pool. These investments should help us accelerate our net headcount growth and better connect to the talent. In the meantime, our sales teams continue working to increase revenue, bringing in new logos and strengthening relations with our current clients. We see a massive opportunity to continue penetrating existing customers as the majority of our top customers are Fortune 1000 companies. We continue to expand our reach and grow our footprint within our accounts. Delivering and building relationships with our clients is essential in our business, and we know how to do it. A good example is a top ten major health insurance provider located in the U.S. We started with them several years ago, working on a small project, and as they grew and acquired or became acquired, we were able to grow with them. We deployed the first low-code tool for a project in 2011. and have been able to consistently expand our footprint into other areas of their business, focusing on next-generation applications for their customer base that can propel them into the digital future. An example is the creation of an RPA solution that significantly reduced redundancies in their pharmacy operations, delivering millions of dollars in benefits for this division. Some of our highlighted differentiators for this client and others are our domain knowledge of their systems and business, along with an understanding of that integration, evolving into a trusted advisor relationship. We have steadily and consistently expanded our footprint in this account and have the honor distinction of being their top service provider category. With a strong focus on quality of delivery, we are their number one services provider for Nearshore, competing with other large and small public and private pure-play digital service providers. Besides healthcare, professional services is also an area of large opportunity for us and a key focus of our talent development and our business development. We are currently working with one of the world's largest strategy consulting firms. They needed a way to provide their clients with planning tools to help design target markets before they invested billions of dollars in growing and emerging markets. The suite of AI-driven products we helped them build are used for predicting the size of the market, real addressable sectors, and the investment and capital needed to win in these ventures. With a combination of their consulting insights, and a digital platform, they are now able to provide at unparalleled speed planning capabilities for their clients. Comprising members of almost every one of our delivery guilds, our agile squads quickly move from prototype to production in a short period of time. Using agile methods for iteration to redesign the user experience and UI, the data modeling and the engineering combination provided scalability to thousands of users at a rapid pace. This also resulted in a new revenue stream for our clients. Our clients trust us to help them reimagine the future. And many times, that means helping them build new business models to create growth. One of those clients is a telecommunications firm attempting to provide solutions that deliver insights for their carrier clients, allowing them to boost revenue. We created a secure and scalable AI laboratory for our customer where large data sets are transformed into machine learning models that train algorithms to predict customers' future spending and travel patterns. Our customer offers these insights to their carrier customers, increasingly the end user experience, growing revenue for the carriers and our client. The AI lab is a dedicated area for us to bring a platform approach with a real-world use case in order to create many use cases for product offerings. As a result, our client now has an additional revenue stream from these customized offers for their customer base. We have the go-ahead to significantly grow this lab and help bring more of these new solutions to life. We are confident that this client will be growing in the coming quarters. In the cognitive computing area, one of our clients, a customer experience firm that provides solutions to large, well-known consumer brands, needed an automated, data-driven way to provide quicker results and deeper insights for their clients. We used natural language processing-based cognitive services to analyze customer feedback from their end customers and predict the severity of the comments. Through machine learning algorithms, we reached 97% accuracy. It was a challenge, but we were able to reimagine their client's contact center data annotation processes. As we reviewed their data, we determined that not all feedback is created equal. and certain responses are far more common than others. To guarantee that the data used in the training was free of bias, we generated synthetic customer feedback comments based on deep learning natural language generation models. The AI-based augmented program provided our client the ability to respond more quickly to their end customer inquiries with a faster resolution. Processing times were reduced from hours and days to mere seconds, allowing for future cost savings and the immediate triaging of complaints. Next up with our clients, two areas look promising. One, using cognitive services to predict the point of sales revenue for our clients' customer locations, giving them an early indication of problem areas. Second, also building a conversational AI bot so their system can respond directly to the client in an intelligent way to solve their problems interactively. To further expand our market reach in the digital space, we have formed a partnership with Experience IT, a digital transformation services firm based in Minnesota. This partnering arrangement will enable our clients to benefit from the combined strength of our companies. deepen our relationships and leverage our integrated delivery squads to rapidly scale and quickly access a global pool of technical talent. We've already started successfully delivering services for some new combined clients, primarily in the healthcare sector. We're excited about the upside potential for both firms and what this exciting partnership means to our clients. As you can see, Our dedicated Agile Thought team brings the necessary experience to develop cutting-edge digital solutions for our clients that ultimately allow our clients to grow in an increasingly digital economy. We expect our growth story to continue to have long legs and to be driven by our IT professionals, our most valuable assets. Now, I will turn the call over to Amit Singh, our CFO, who will provide additional insight into our financial results.