Genpact Limited

Good day, ladies and gentlemen. Welcome to the 2022 first quarter GenPAC Limited Earnings Conference Call. My name is RJ, and I will be your conference moderator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference call. As a reminder, this call is being recorded for replay purposes. The replay of the call will be archived and made available on the IR section of GenPAC's website. I would now like to turn the call over to Roger Sachs, Head of Investor Relations at GenPAC. Please proceed.

Thank you, RJ, and good afternoon, everybody, and welcome to our earnings call to discuss results for the first quarter ended March 31, 2022. We hope you had a chance to review our earnings release, which was posted to the IR section of our website, genpac.com. Speakers on today's call are Tiger T. Agarajan, our President and CEO, and Mike Wiener, our Chief Financial Officer. Today's agenda will be as follows. Target will provide an overview of our results and an update on our strategic initiatives. Mike will then walk you through our financial performance for the quarter, as well as provide our current thoughts on our outlook for the full year of 2022. Target will then come back for some closing comments, and then we will take your questions. We expect the call to last about an hour. Some of the matters we will discuss in today's call are forward-looking and the vibrant number of risks, uncertainties, and other factors that could cause actual results to differ materially from those in such forward-looking statements. Such risks and uncertainties are set forth in our press release. In addition, during our call today, we will refer to certain non-GAAP financial measures that we believe provide additional information to enhance the understanding of the way management views the operating performance of our business. You will find a reconciliation of these measures to GAAP in today's earnings release, posted to the IR section of our website. And with that, let me turn the call over to Tiger.

Thank you, Roger. Good afternoon, everyone, and thank you for joining us today for our first quarter 2022 earnings call. We had a great start to the year with top-line growth, adjusted operating income margin, and adjusted diluted EPS all coming in ahead of our initial expectations. Our investments in our strategic choices have positioned us well to help clients navigate the many challenges in this macro environment. We saw another quarter of strong demand for our data and analytics, digital and consulting businesses that make up transformation services, as well as continued strength in our intelligent operations business. For the first quarter of 2022, we delivered Total revenue of $1.1 billion, up 14% on a constant currency basis. Global client revenue of $973 million, up 15% on a constant currency basis. Adjusted operating income margin of 15%, expanding 60 basis points from the fourth quarter. And adjusted diluted earnings per share of 60 cents, up 2% year over year. The macro environment continues to be challenging with inflation rising to a 40-year high, a massive spike in energy prices, ongoing disruption to supply chains, a hot talent market, and the Ukraine-Russia war, to name just a few. Our Eastern European delivery footprint, which is centered around Romania, Poland, and Hungary, with approximately 7,000 employees, has not experienced any operational disruptions. We're also not seeing any material change in client behavior as it relates to our global business. Client demand remains healthy on the back of the momentum we saw last year, particularly as every company searches for solutions to help them undertake the transformation needed in these times. Bookings reached the highest first quarter level since quarter one 2019, with 60% being annuity-based deals and 50% sold-sourced. While we don't typically share color on quarterly bookings, given the environment, we thought this was a good signal to share. This included two large engagements with total contract value greater than $50 million, both in the banking and capital markets industry. During the quarter, we also added 32 new clients, up from an average of 24 new clients per quarter in 2021. Both our quarter and pipeline and inflows during the quarter reached all-time highs. Coupled with robust bookings momentum, this is a clear indication of the expansion of our total addressable market and differentiated value proposition for our solutions and services. Global client revenue was up 15% year-over-year on a constant currency basis, led by continued strong performance from our analytics, digital, and consulting businesses that make up Transformation Services. which grew 29% year-over-year and now represents 37% of total global client revenue. On the back of deal ramps from recent wins, intelligent operations grew 7% and represented 63% of total global client revenue. Global client revenue growth was broad-based across all our chosen verticals, including double-digit growth in consumer goods and retail, life sciences and healthcare, high-tech, banking and capital markets, and insurance. Revenue from our GE businesses in the first quarter was up 2%. As we mentioned last quarter, we continue to believe that GE's separation into three independent companies provides us with opportunities to win new work in support of the spinoffs. Demand for our analytics, digital, and consulting services that make up transformation services is being fueled by the strong momentum we are seeing across four specific service lines. sales and commercial operations, supply chain management, financial crimes and risk, and financial planning and analysis. In each of these areas, we leverage technologies like AI machine learning and the cloud to process complex data sets and build dynamic analytical models that then drive insights. We then use these insights to drive actions that deliver meaningful business outcomes beyond just cost productivity. Together, these four service lines were up 47% in the first quarter, and their importance to clients' transformation agendas in these times underpins the significant expansion of our pipeline. For example, in financial crimes and risk, we are leveraging our cloud-based financial crimes and regulatory compliance solutions, as well as our AI and digital technologies-based solutions to enhance the customer experience provided by our banking clients. We're also seeing great traction with new age fintechs where we are helping them deal with critical issues around customer fraud and risk management and providing scale to their operations as they grow. This was highlighted by the two large deal wins I referenced earlier. All of this is driving growth in our banking and capital markets vertical. Our global client analytics business grew a very healthy 40% year over year. Let me provide a few examples of how we are helping clients use data and analytics for strategic decisions and delivering improved outcomes. We are working with a large luxury consumer goods brand to significantly improve its data quality by aligning key performance metrics for its online and physical channels and building models to optimize inventory levels. Additionally, our RightPoint experience team is helping to elevate consumer experience on e-commerce websites by providing updates to product marketing, to improve the client's e-commerce growth by up to 15%. For a large global insurance company, we developed an AI and machine learning model that leverages both internal and external data to quickly and accurately assess risks and prioritize policies to be underwritten to minimize lost opportunities. Our solution significantly reduces the client's response times from days to hours and is expected to drive an incremental low double-digit growth for the client. For a large global sporting goods brand, we built complex machine learning models leveraging a vast amount of consumer transaction and demographic data to determine the best price, promotion assortment, and inventory levels to create personalized engagement with consumers. Led by an Inquiro data analytics team, this solution is increasing the client's direct-to-consumer market share while improving their profitability. All of these solutions that drive tangible impact beyond just cost and productivity are replicable across other clients. We continue to see momentum in driving commercial models based on outcomes that we deliver instead of FTE-based pricing alone, creating deeper strategic alignment with our clients. We are bringing our teams with deep industry and functional domain expertise together with data scientists and digital technology experts to deploy specific solutions that add value to our clients in these times. Here are three specific examples. In response to the inflationary environment, we have developed a suite of services and solutions, all leveraging data and analytics to help clients drive proactive actions in sourcing and procurement, sales and marketing, and supply chain to bolster their financial health. These solutions include supplier prioritization and consolidation pricing and promotion optimization strategies, and more accurate dynamic and real-time supply and demand forecasting. After the Russia-Ukraine war entered its third month, we are engaging with clients on cybersecurity issues, business continuity planning, and geographic diversification of operations, given our extensive global delivery model. And thirdly, most importantly, The war for talent has left companies searching for creative ways to fill critical roles. Our center of excellence hubs enable clients to access our highly skilled global workforce in sought after areas, including data scientists and digital practitioners that also have deep domain expertise in services such as finance and accounting, supply chain management, and financial crimes and risk. All of this drove a significant expansion in the size of our global client relationships. During the 12 month period ending March 31st, 2022, we grew the number of global client relationships with annual revenue over $5 million from 132 to 149. Clients with more than $25 million in annual revenue increased from 24 to 30. Clients with more than $50 million in revenue increased from 11 to 12. Our large client relationships are growing faster than the company average as we open up new buying centers and bring more end-to-end solutions to them. The passion and dedication of our global teams to deliver great service to our clients continues to be central to our success. Our investments in the learning and development of our talent not only helps us access in-demand skills, but also provide them with the critical skills needed to build their careers in a changing world. During the first quarter, we welcomed almost 15,000 new team members reflecting the power of Genpak's brand in a very competitive talent market. During the first quarter, our employees also completed over two million training hours, leveraging our online, on-demand learning platform, Genome. This includes our Data Bridge program that trains employees in data analytics, decision-making, and storytelling capabilities to drive actionable insight generation for clients. Data Bridge was recently recognized by IDC as an industry-leading data literacy program at scale that could be one of the largest of its kind. We have so far trained and certified more than 50,000 employees through this program. Using our internal talent match platform, we successfully redeployed over 5,000 newly skilled talent to support the needs of our clients. Our attrition rate in the first quarter remained at 33%, in line with the rate we reported over the prior two quarters. With our ability to reskill, redeploy, and hire at scale, we continue to see no impact on our client engagements or the successful conversion of new opportunities. We believe this is a critical competitive advantage, particularly as talent supply pressures across all industries have led to clients needing partners like us more than ever. As we continue through the year, we expect our overall demand to remain robust, led by our data analytics and digital businesses. We are also actively engaged with clients on pricing adjustments related to the current inflationary environment and continue to make steady progress to date. These are complex conversations that take time, but also open up possibilities to drive more value for our clients and to deliver a win-win outcome for everyone. With that, let me turn the call over to Mike for a detailed review of our first quarter.