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spk06: Good day, and thank you for standing by. Welcome to the 2022 Q4 Perficient Call Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star 1-1 again, and you'll hear an automated message that your hand is lowered. Please be advised that today's conference is recorded. I would like now to hand the conference over to our speaker today, Jeffrey Davis, Chairman and CEO. Please go ahead. Our apologies, everyone. We've been experiencing some technical difficulties with our proficient call. We're just going to wait one second here while we make sure that the call is being heard on the audio portion of the session.
spk03: Yeah, just to add to that, this is Jeff Davis. We will restart here in just a moment once we confirm that our provider has everything working. It appears that we do, so I'm just going to go ahead and launch back into this. This is Jeff Davis, Proficient's Chairman and CEO with me on the call. Per usual, this is Paul Martin, our CFO, Tom Hogan, our President and COO. I want to thank you for your time this morning. We have 10 to 15 minutes of prepared comments per usual. But before we proceed, I'm going to ask Paul to read the state partner's statement again. We apologize for the technical difficulties.
spk12: Thanks, Jeff, and good morning, everyone. Some of the things we will discuss in today's call concerning future company performance will be forward-looking statements within the meaning of the securities laws. Actual results may materially differ from those in these forward-looking statements, and we encourage you to refer the additional information contained in our SEC filings concerning factors that could cause those results to be different than contemplated in today's discussions. At times during this call, we will refer to adjusted EPS and adjusted EBITDA. Our earnings press release, including a reconciliation of certain non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles or GAAP, is posted on our website at www.proficient.com. We have also posted a slide deck which includes a reconciliation of certain non-GAAP guidance to the most directly comparable financial measures prepared in accordance with GAAP on our website under Investor Relations. Jeff? Thanks, Paul.
spk03: And again, once again, I apologize for the delay this morning. We certainly appreciate your time as we discuss the fourth quarter and full year performance and our continued growth and profitability. The fourth quarter capped another solid year of growth and increased profitability at Perficient with adjusted earnings per share up 14% and revenue up 8% during the period. We're of course monitoring the macro environment and sales cycles in some cases are extended somewhat based on the same. But there are a lot of positives of notes and we're confident that Perficient is as well positioned as it's ever been and that our business is performing well actually relative to some others in the space. Services gross margin was up 30 basis points during the quarter. Our profitability remains best of breed as the direct result of our customer's willingness to place a premium on the value we deliver combined with our strong fiscal discipline. The ongoing success we're having in our journey transforming proficient into a truly unique and unparalleled global force continues. We're delivering more work offshore than ever before and commanding higher rates for that work than ever before. Rates, in fact, that are materially higher than many of our competitors, by the way, again, reflecting the superiority of our fully integrated model of talent. And our culture and truly integrated model is helping us retain that global talent as well. Our attrition during the quarter was well in line with our targets. Overall, 2022 was a remarkably successful year in our global transformation. We realized 68% growth in our total offshore revenue, with organic accounting for half of that total at 34%. Tom will speak to booking specifically in a minute, but large deal wind volume was again stronger in the quarter, up meaningfully sequentially and year-over-year. The pipeline remained strong, and while we do not forecast deals not yet closed, we remain in pursuit of several that if one could materially change the trajectory of the year. As I mentioned earlier, some clients are taking more time with decisions, but we're confident demand for our services will remain robust and we're poised for another year of solid growth. In fact, although we saw modest expansion in sales cycles during the quarter, we're actually seeing more urgency in terms of project timelines on large deals, meaning those deals are more compressed than they have been historically. That will actually be a benefit certainly in the near term. Customers are more concerned with their competition than ever before and more ambitious than ever before in terms of moving quickly once commitments have been made. As we mentioned on last quarter's call, whether our clients are investing in growth or seeking to reduce costs by leveraging efficiency, proficient is the answer. And a reminder on our strategy, we expect growth everywhere but continue to believe our non-U.S. presence will scale disproportionately fast and that this next shift in the near term will help margins but also top-line growth. However, as we move toward our long-term goal of a 50-50 revenue mix, that is, half of our revenue delivered domestically and half delivered globally will reach an inflection point where the headwind becomes a tailwind and an accelerant to revenue growth. With that, I'll turn things over to Paul.
spk12: Thanks, Jeff. Services revenue, excluding reimbursed expenses, were $228.8 million in the fourth quarter, a 9% increase over the prior year, and year-over-year organic services growth was 6%. Gross margin percentage increased 60 basis points to $39.4 in the fourth quarter compared to the prior year, and services gross margin, including reimbursed expenses and stock compensation, was 40.8% in the fourth quarter compared to 40.5% in the prior year. SG&A expense was $43.7 million in the fourth quarter compared to $41.7 million in the prior year. SG&A expense as a percentage of revenues decreased to 18.8% from 19.4% in the prior year. Adjusted EBITDA was $54.3 million or 23.4% of revenues in the fourth quarter compared to $47.7 million or 22.2% of revenues in the prior year. Amortization expense was $6.5 million in the fourth quarter compared to $5.8 million in the prior year. The increase in amortization expense was primarily due to the addition of additional intangibles from our two acquisitions in 2022. The interest expense for the fourth quarter decreased $0.8 million from $3.9 million in the prior year, primarily as a result of adopting the new accounting standard for convertible debt in the first quarter. Our effective tax rate was 28% in the fourth quarter compared to 476.5% in the prior year. The decrease in the effective tax rate was primarily due to the convertible debt transaction impact on the prior year. Net income increased to $26.5 million for the fourth quarter from $4.5 million in the prior year, primarily due to the loss from extinguishment of debt of $28.7 million in the prior year and improved operating performance. Polluted gap earnings per share increased to 74 cents a share for the fourth quarter from 13 cents in the prior year. Adjusted earnings per share increased to $1.14 or 14% for the fourth quarter from $1 in the prior year. You can see the press release for a full reconciliation of the gap earnings. I'll now turn to the full year results. Services revenue excluding reimburse expenses were $893.1 million for the year ended December 31, 2022, a 19% increase over the prior year. Year-over-year organic services growth was 13%. Gross margin percentage for the year ended December 31, 2022 increased 50 basis points to 38.9% compared to the prior year. Services gross margin excluding reimburse expenses and stock compensation for the year ended December 31, 2022 was 40.2% compared to 40% in the prior year. SG&A expense for the year ended December 31, 2022 was 171.1 million compared to 152.4 million in the prior year. SG&A expenses percentage of revenues decreased to 18.9% from 20% in the prior year. Adjusted EBITDA for the year end of December 31, 2022 was $205.8 million, or 22.7% of revenues, compared to $162.9 million, or 21.4% of revenues in the prior year. The year end of December 31, 2022 included amortization of $24.5 million compared to $23.5 million in the prior year. Net interest expense for the year end of December 31, 2022 decreased to $3.2 million from $14.1 million In the prior year, again, primarily as a result of adopting the new accounting standard for convertible debt at the beginning of the year. Our effective tax rate was 25.9% for the year ended December 31, 2022 compared to 16.6% in the prior year. The increase in the effective rate is primarily due to a decrease in stock compensation deductions and a decrease in research credit benefit compared to the prior year. for the year ended December 31, 2022 was $104.4 million compared to $52.1 million in the prior year, primarily as a result of higher revenues, lower costs as a percent of revenues, lower interest expense, and the loss from extinguishment of debt of $29 million that was included in the prior year. Diluted Gantt earnings per share increased to $2.90 for the year ended December 31, 2022 compared to $1.50 in the prior year. Adjusted earnings per share increased to $4.28 2022 from $3.50 in the prior year. Our ending billable headcount as of December 31, 2022 was 6,321, including 5,944 billable consultants and 377 subcontractors. Ending SG&A headcount was 949. outstanding debt that of deferred issuance costs as of december 31 2022 was 394.6 million in addition we have 30.1 million in cash and cash equivalents as of december 31 2022 and 199.8 million of unused borrowing capacity on our card facility our balance sheet continues to leave us very well positioned to continue to execute against our strategic plan i'll now turn the call over to donald hogan a little more commentary tom thank you paul and good morning everybody
spk02: We booked 56 deals greater than a million dollars during the fourth quarter of 2022, which compares to 43 in the fourth quarter of 2021 and 37 in the third quarter of 2022. Again, that's 56 deals greater than a million in the fourth quarter of 2022 compared to 43 in the fourth quarter of 2021 and 37 in the third quarter of 2022. We're still winning big deals and we won more than ever before in Q4. Our NET pipeline, weighted and unweighted, reigns very strong. A couple recent wins to highlight. We're working with a multinational pharmaceutical corporation on a nearly $8 million, excuse me, eight-figure engagement to improve their patient data flow. Our unified team of global experts are delivering a custom-built clinical data review and cleaning environment that provides an accurate real-time view of clinical studies, which allows the enterprise to holistically monitor progress and drive critical decision-making. We also expanded our partnership with a leading automotive manufacturer, supporting the global CRM rollout for their commercial-focused vehicle services and distribution business. As part of the engagement, our team of architects will migrate the manufacturer's legacy platform and develop a global rollout roadmap that includes their existing commercial and retail instances. We also recently launched a new employee website for the same leading auto manufacturer. Our global team worked with the automaker to deliver a next-generation employee experience featuring advanced personalization options, threaded comments, and an updated search function with more features planned in the coming months. The new site now serves more than 180,000 employees, including ride-attirees, and receives more than 1 million visits per week. We continue to remain well-diversified from a customer, industry, and platform perspective. Healthcare and financial services led the way from a revenue and booking perspective. We're particularly excited about the accelerating momentum we have in the financial services industry, where our revenue has grown materially in recent years. Jeff mentioned some lengthening in sales cycles and the macro uncertainty, but let's be clear, digital transformation is going nowhere. The work we're delivering for our clients is in many cases imperative, mission critical, and core to their competitive success. And with that, I'll turn things back over to Jeff to discuss first quarter and 2023 full year open.
spk03: Thanks, Pat. All right. Proficient expects its first quarter 2023 revenue to be in the range of $227 to $233 million. First quarter gap earnings per share is expected to be in the range of $6 quarter adjusted earnings per share is expected to be in the range of $1.01 to $1.06. Proficient expects this full year 2023 revenue to be in the range of $945 to $985 million. 2023 gap earnings per share to be in the range of $3.24 to $3.40. And 2023 adjusted earnings per share to be in the range of $4.16 to $4.75. And with that, operator, we can open up the call for questions.
spk06: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you'll need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, press star 1-1 again. Please stand by as we compile the Q&A roster. All right. Our first question comes from the line of Surrender Thin from Jefferies. Go ahead, Surrender.
spk11: Thank you. I'd like to start with a high level question of kind of where demand sits at this point in the client decision making process. If we were to rewind maybe a year ago, the thought was that there was perhaps a new elevated level of demand across the industry. So not just for yourselves, but more broadly, including your peers. Fast forward to today, It seems like that wasn't quite the case, right? There's obviously long-term demand is still intact, but clients are making more short-term decisions. So can you help us understand that disconnect or what you're seeing at clients at this point and their willingness to push off projects? And if there is a further deterioration, should we expect continued weakness, I guess, for the foreseeable future?
spk03: Yeah, it's a good question. I'll start and ask Tom to add some color as he's spent. So obviously, yeah, the year didn't end the way it started, to your point. I think that from what we've seen via the pipeline as well as recent bookings, even in this year so far, is that, you know, that seems to be moving behind us. In other words, things seem to be improving now from where they were, say, six months ago in terms of, again, bookings and pipeline. You know, I think there's a number of contributing factors to that. Certainly, again, we were overly optimistic on the macro environment. And I do think that sentiment shifted, but, and a no crystal ball, but it seems to be improving. And as for proficient standalones, As Tom mentioned and I alluded to on the call, we actually have quite a number of large new opportunities, some in existing accounts, but maybe more importantly at new accounts that have the potential to be very, very meaningful for us even within the years. So I think the general environment, while it did sort of stall or slow, seems to be improving. Now, no crystal ball, but a good reason for optimism.
spk02: I agree, and I think also as we've moved to larger deals that also compounds a little bit, you know, the market is still very rich with opportunity. There's definitely some caution in buying behavior. However, I'll also say is the deal size is large. So there's definitely a level of stringency that executives are going through that historically maybe they didn't have to go through. And as we continue to see larger deal sizes as representative of our Q4 bookings, that has a little bit of a headwind for us specifically, not necessarily industry.
spk11: That's helpful. And then as we kind of look at the year ahead, two related questions. One is it sounds like the project timelines themselves are compressing. So I just wanted to make sure I understood that comment correctly, that clients are still signing on for work, but they want that amount of work done to be quicker. So that would suggest cost takeout projects, or is the focus materially shifted in some of the projects that you're working on? And then in terms of just the guide itself, is the vast majority of the growth It sounds like it's offshore, which it has been in the past or more recently as well. What does your outlook for onshore or U.S. growth look like?
spk03: Yeah, good question. So, yes, you heard that correctly in terms of the large deals, specifically the large deals and those compressed timelines. I would say the majority of our work is actually not based on cost reduction. It's based more on new products and services and time to market is as critical as ever. So I think that's what's driving a lot of that. Some of that also is they're catching up now, right? So some of these deals I'm talking about are from clients who were in that slow sales cycle, but then once they got through that, made that commitment, they're like, okay, we're behind now, so what can we do to accelerate this, right? So I think the majority of it is coming from that primarily. And what was the other question? Growth rates onshore. Growth rates for sure, you know, are going to be greater offshore just like they have been. Onshore, you know, our overall guide is pretty conservative, as you can see. So that would include or imply, you know, flat to slightly up U.S. or onshore-based resources and a lot of the growth coming, as you pointed out, from offshore.
spk06: Thank you. Our next question comes from the line of Nyack Tandon from Needham. Go ahead.
spk10: Thank you, Jeff and Paul. I just wanted to first talk about the linearity of the year. So your guidance basically reflects I think flat to slightly down revenue sequentially based on the guidance. How should we expect the year to build? Are you looking at maybe more of a second half rebound or should we expect a more linear trajectory over the course of 23?
spk03: Yeah, I think it's going to be a little bit heavier in the second half, for sure. So I think you're right on the Q1 guide, which, by the way, seems like pretty common in the industry for the year. Everybody sort of sees a stronger back half. And I think we see the same thing. And I would underscore that with my comments earlier. you know, on the pipeline of bookings that, you know, the bookings, I think, sort of troughed out, if you will, in Q3. And we're experiencing that from a revenue standpoint basically now. The highest correlation factor between bookings and revenue for us, and it's not that high because it tends to be somewhat lucky, but the highest correlation is about a five-month rolling average. So literally, you know, if you look five months out from kind of a weaker Q3 bookings, then you're seeing that now. Bookings were stronger in the fourth quarter and they're starting stronger in the first quarter. So again, we would expect to see the benefit of that more towards the latter part of Q2 or at the beginning of the second half.
spk10: That's helpful. And then just more in terms of housekeeping items, I wanted to ask you on the offshore, in terms of the drag on the growth, what have you built in to your expectations and On the flip side, I'm assuming it's going to help margins. So maybe could you just quantify the benefit on margins and the drag on revenue based on your guidance?
spk03: Yeah, you know, it's probably, you know, three or four percent. It's sort of hard to, three or four points. It's sort of hard to predict that, you know, it's a three and a half to one ratio. So you can sort of back into it from the guidance that we put out there based on offshore, historic offshore and nearshore growth.
spk12: Um, it is what I would tell you on that and the, uh, it's from a margin perspective by obviously, there's a lot of things going on with with wages as well. And, you know, we model just modest gross margin improvement. And that's another 1 where hopefully, um, you know, as the demand picks up that could prove to be concerned.
spk03: Keep in mind that that's our strategy, that the whole point of endeavoring organically and through M&A and offshore and nearshore is to bring our rates down to accelerate, ultimately, top-line growth and be more competitive against the digital transformation firms that we run into. So we'll be careful about leveraging all that as margin and actually putting a lot of it into more attractive, more competitive rates.
spk06: All right, thank you. Our next question comes from the line of Brian Kinsingler from Alliance Global Partners. Go ahead, Brian.
spk07: Hi, guys. Thanks for taking my questions. Jeff, you mentioned a few large deals that if you win could significantly change the revenue trajectory of the company. Is that captured in the high end of a revenue guidance or is this more a 2024 driver given long sales cycles and therefore maybe not contemplated in this year's guidance?
spk03: It's not contemplated because, as you mentioned earlier, we really are very cautious about trying to make it anything that's not yet booked. But I would say if this is rare, but if all those deals close, I think that would represent upside to the guidance for the year. Again, that's probably an unlikely event, but it's possible. But certainly, even without that, I think you're spot on that it's going to be more of an indicator and a boost to certainly the latter part of this year, but also 24. Great. And then healthcare.
spk07: is lower year over year and sequentially. You've talked about stronger demand in the second half of 2023, and I think you've also, at the second half of the year, experienced a large program winding down. So can you share with us for this vertical, are there any indicators of stronger demand trends in healthcare?
spk03: Yeah, we're seeing, at least for us, we're seeing certainly positive there. Stronger I don't know if the demand is that much stronger, but we have finally shed that account that we've been talking about. So that account represented over $30 million of revenue in 21, and it was still over $10 million last year. It's essentially zero now, so we've lapped that. And I think we'll see growth improvement then in health care. I think that was the biggest drag in health care for us. At the same time, I was going to say financial services is growing tremendously fast, which of course has a dilutive effect as a percent of revenue on healthcare.
spk06: Thank you. Awesome. Our next question comes online of Jonathan Lee from Morgan Stanley. Your line is open, Jonathan.
spk09: Hey, thanks for the questions, guys. Yeah, I wanted to talk through engagement type and pricing just given the macro. Have there been any notable changes to that in the quarter just given, you know, what we're hearing across macro environment or perhaps shifting of delivery?
spk03: I'm sorry, you're talking about pricing?
spk09: Yeah, like where are you seeing, if any, notable changes to engagement type or pricing in the quarter given some of the macro-related concerns?
spk03: You know, other than, as we mentioned, some actual compression, which is a positive, pricing's been solid. And we've actually managed to move ABR up. And again, as I mentioned before, we're going to be cautious about that because the whole point of the offshore is to be as competitive in pricing as possible. But we've had good pricing power. And I think, as I mentioned in the script, and I think Tom alluded to or mentioned as well, you know, that speaks, I think, quite a lot to the value that clients place on our services. That said... We need to be doing – we've got the same skills, same capability, same strength and experience offshore that we do onshore, and we need to be leveraging that more and more, and we are, and that's where you're seeing the growth differential.
spk09: Got it. And on the hiring front, can you provide an update on what you're seeing in the hiring market across your geographies? You know, where are you seeing it easier to hire versus tougher to hire? Sure.
spk03: You know, I'm going to let Tom, I'll just say something real quickly about attrition, and I'm going to let Tom take the recruiting question. He manages talent acquisition. But, you know, we mentioned earlier that attrition rates were well within our range. So, you know, the grade resignation seems to have moved behind us. So that obviously bodes well for talent acquisition. But I'm going to let Tom comment more specifically on that.
spk02: The talent we're looking for, easy is never a word that's really used, but we definitely have a multi-talented approach to the way in which we bring talent to the organization. We have robust university hiring programs globally, great success in India and Latin America as well as the United States. We're constantly making sure we have the right value proposition for our team. Quite honestly, great talent wants to work with great talent, so our competitive advantage of environment, project work, and the way in which we drive culture here, we haven't seen any challenges with hiring individuals and with a multi-tenant approach and a multi-geography approach. There is not one specific area where it's quote-unquote easier to find talent. Across the board, we compete quite nicely against the industry peers for talent.
spk06: Thank you. Our next question comes from the line of Dan from J.P. Morgan.
spk00: Hey, thanks for taking my question. I'd like to ask about what does like the EPS guidance imply for assume for EBITDA margins this year and what do you expect for utilization and pricing throughout this year?
spk03: So EPS, the guidance for EPS as it relates to margins would be, you know, potentially a modest increase to EBITDA. As we discussed earlier, we're looking to keep gross pardons flat, not down, but not up materially either, so that we can maintain that competitive pricing. But I do think that, you know, adjusted EBITDA as an example, you know, will have some expansion this year. Although I think it'll be modest, you know, we've guided to a little bit lower than normal growth. So until we get back to that higher growth level, I think adjusted EBITDA will be modest in terms of expansion. But again, not negative, but expecting modest expansion. And then utilization, will maintain and has consistently maintained over the average of the year at about 80%. So that's still our goal, and we'll be driving that this year. Again, historically, over the last at least three or four years, we've had really great success with that. We expect more of the same.
spk12: And with respect to bill rates, et cetera, obviously there's wage inflation, as we talked about, and we're looking to notionally offset those having The global delivery capability in our portfolio is allowing us to manage where the delivery is done to offset wage increases with rate increases.
spk00: Right, right. And is there a way to estimate the benefit from a higher offshore mix? Like the deals or the new business that's coming your way, something that you wouldn't be eligible to compete for a few years ago? So is there a way to estimate like how much that increased offshore mix is helping drive new wins for you?
spk03: Yeah, absolutely, including existing accounts and existing relationships. We've got a number of large, very long-term relationships that just a few years ago, as you point out, we're already doing a lot of offshore work or nearshore work that we really couldn't pursue because we didn't have the capacity or even the capability. Now that we do, we're actually taking quite a lot of shares. So a lot of the growth that we're enjoying from offshore and nearshore is not only new relationships, new clients, which almost always involve some level of offshore right out of the gate, right at the beginning, but also actually in existing accounts, relationships that we've had 10, 15 years We've actually been able to take share away from some of the larger offshore competitors.
spk12: Just to give you some perspective, we've doubled the percentage of revenues done offshore in the last two years, and as Jeff said, we're on a journey to 50 plus percent. Operator?
spk06: All right, our next call comes from the line of Vincent Colicchio from Barrington Research. Go ahead, Vincent.
spk08: Yes, Jeff, are there any vendor or solution categories that have significantly weakened since last quarter?
spk03: You know, I wouldn't say that exactly. There's no standout. You know, I think it's, we saw it kind of slow down across the board, but You know, our revenue tends not to be, you know, if each kind of quarter goes on, we're less and less coupled to specific technology. Certainly, there's a lot of disruption on the software side. We've pivoted around that, but I wouldn't say over the last six months or so there's been any major shift with any particular technology or vendor.
spk08: Okay, thanks. One more for me. Is client consolidation an issue currently, you know, given the pressures these companies are under? And if so, is it more of an opportunity or a threat for you?
spk03: It's proven to be an opportunity. We are, you know, that auto manufacturer that Tom gave a little vignette on in the preparing statements, long-time client. We're now one of only six tier one global suppliers with them. And that story is repeated over and over and over. So even when there is a sort of a reconciliation or rationalization, we almost always emerged as a key player.
spk06: Thank you. Our next line comes from the line of Kate Cromston from William Blair. Go ahead, Kate.
spk05: Hi everyone, thanks for taking my question. This is Kay Kronstein on for Maggie Nolan. My first question I wanted to touch on was can you guys provide the exact percent of revenue right now that is offshore based and then when do you expect you'll be able to reach that 50-50 revenue mix that you touched on at the beginning of the call?
spk03: So the, I'll answer the second part of that and then Paul could address the first part, but our goal would be about three years on that 50-50. So that's what we're working hard towards. I don't know if that's going to be aggressive or not, but if we maintain the pace of growth that we have, I think that's very doable. And one thing I want to point out is that we certainly, I do think 50-50 is a really key pivot point for the business, but of course, the whole thesis is linear, right? So as we work towards that 50-50, the headwind that offshore represents becomes less and less along the way. So it's not a stair-step function, but I do think that that'll be the critical point where things really shift to a tailwind and an accelerant.
spk12: Yeah, and Katie, with respect to the percentage of revenues, as I said a little bit before, it was about 13% in the fourth quarter of 20, and it's about double that today. And we'll continue to accelerate into 23. Okay, great.
spk05: That's all very helpful. Thank you. And then one final question from me. Within the 56 deals that are greater than One million. Are most of these short-term deals or are these deals that have the potential to grow in a longer-term transformational deal?
spk02: Definitely have the ability to continue to grow. As Jeff mentioned, the compression as far as the length of the backlog, it is multiple phases within this work. So it should continue to build upon itself in the coming quarters.
spk05: Okay, great. Thank you all.
spk03: Thank you.
spk06: Perfect. And our next question comes from David Goyo from Scarlet Bank.
spk01: Good morning, everyone. Jeff, I had a quick question on the broader technological aspect of the company. So, given the competition out there, the pace at which technology is changing, what are some of the things that proficient's doing in order to stay on top of the pace, kind of be competition, have more deal wins, and then how is your M&A strategy aligned with this?
spk03: I'll take the, I'll take a high level. We've got a group of strategists. that not only help clients, but also Tom and I rely on, and of course the whole management team, to help us navigate that and pivot around what we think are going to be good opportunities for us. You know, not all too new technology, at least early on, is necessarily a big services opportunity because not everybody adopts it, you know, right away. But we keep a close eye on that. We've got a team that focuses specifically on that. And I'm going to let Tom, you know, add, oh, I'll mention the M&A as well. I'm sorry. We do have M&A in the pipeline. We consciously kind of put that on hold, really, for the fourth quarter. We closed one deal the fourth quarter, as you know. And we kind of slowed things down a little bit. We wanted to see what the macro environment was like. And also I wanted to give the valuations a chance to catch up with the public markets because we weren't seeing that then. Things do seem to be improving now, and so we're going to be getting back in the game likely in the second quarter.
spk02: Just to take on that a little bit, so our team globally has a bunch of explorers around technology really looking at the next thing. So as an example, it's Internet of AI. So we have interest groups around the world, not necessarily just within that strategy team, although our strategy team is looking at the next great of technologies to come. We actually then put together interest groups around the world, individuals from Latin America, India, Serbia, China, the United States, working together collectively on newer technologies around use cases, how clients can utilize them, You're probably familiar with ChatGPT, which is a general AI tool. We have clients working with us regarding how can they leverage technology, not just for us to play with, but for them to actually gain true ROI. And we do that with our collective 7,000-plus consultants around the world. So we have specific interest groups around that domain and technology that we, you know, maybe we'll talk a little bit more in the future, but it's a very big part of our culture is to look at those technologies and see how they can be of value to our customers.
spk01: That's great color. Looking forward to what's coming next.
spk03: Thank you.
spk06: Wonderful. I would like now to turn it back over to Jeff Davis for closing remarks.
spk03: All right. Well, thank you all for your time and thank you for your patience and sticking around as we work through some of the technical issues at the outside of the call. But thank you and look forward to seeing you again here in about 60 days.
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