Genpact Limited

Good day, ladies and gentlemen. Welcome to the 2022 Fourth Quarter GEMPAC Limited Earnings Conference Call. My name is Justin, and I will be your conference moderator for today. At this time, all participants are in 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 GEMPAC's website. I would now like to turn the call over to Roger Sachs, Head of Investor Relations at Genpak. Please proceed.

Thank you, Justin. Good afternoon and welcome to Genpak's earnings call to discuss results for the fourth quarter and full year ended December 31st, 2022. We hope you had a chance to review our earnings release, which was posted to the IR section of our website, genpak.com. Speakers on today's call are Tiger Tyagarajan, our president and CEO, and Mike Weiner, our chief financial officer. Today's agenda will be as follows. Tiger will provide an overview of our results and an update on our strategic initiatives. Mike will then walk you through our financial performance in greater detail and provide our outlook for the full year 2023. Tiger will then come back with some closing remarks, and then we will take your questions. We expect our call to last about an hour. Some of the matters we will discuss in today's call are forward-looking and about a 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. During today's call, we will reference certain non-GAAP financial measures that we believe provide useful information to enhance the understanding of the way managed and today's earnings release posted to the IR section of our website. And with that, let me turn the call over to Thaddeus.

Thank you, Roger. Good afternoon, everyone, and thank you for joining us today for our fourth quarter and year-end 2022 earnings call. We are pleased with our full year 2022 financial results with revenue growth, adjusted operating income margin, and adjusted diluted earnings per share all coming in at the high end of our expectations. highlighting the relevance of our data tech AI services and digital operations services for our clients. Transformation is a pervasive theme across most enterprises, with many of them calling out 2023 as a year of efficiency. We're therefore seeing a robust pipeline of continuous flow of data tech AI and large transformational deals. In the fourth quarter of 2022, we delivered on a constant currency basis, Total revenue of $1.103 billion, up 6% year-over-year. Data tech AI services revenue of $495 million, up 5% year-over-year. And digital operations services revenue of $608 million, up 7% year-over-year. Adjusted operating income margin of 17%, expanding 260 basis points year-over-year. And adjusted diluted earnings per share of $0.70, up 30% year-over-year. For the full year 2022, on a constant currency basis, we deliver total revenue of $4.37 billion, up 11%. Data tech AI services revenue of $1.96 billion, up 18%. Digital operations services revenue of $2.41 billion, up 6%. adjusted operating income margin of 16.5% flat year-over-year, and adjusted diluted earnings per share of $2.74, up 12% year-over-year. This performance during 2022 reflects the non-discretionary nature of a majority of our services and the full suite of services we provide our clients to drive cost, growth, mitigate risk, and improve a variety of such outcomes. Our revenue growth was broad-based across all our industry segments. In particular, financial services and high-tech manufacturing services delivered strong double-digit growth. Data tech AI services, where we design and build solutions to transform our clients' businesses, grew 18% on a constant currency basis. This was driven by the ongoing momentum in our emerging services, including supply chain services, sales and commercial services, and risk services that collectively grew 20% plus during the year. Digital operations services, where we digitally transform and run our clients' operations globally, delivered steady results throughout the year, growing 6% on a constant currency basis. Full year 2022 bookings were $3.9 billion, up 6% year-over-year. We had a record level of deal inflows up almost 25% from the prior year, including a wave of large deal inflows in the last few months of the year. Win rates held steady at 51% and sole source deals continued to represent approximately half our bookings. We also won 126 new logos during the year, up 30% year-over-year. These new logos include a number of companies that we believe will become priority accounts for us in the long term. Our average initial contract value with these new logos was up 10% to over $3 million. Entering 2023, we are excited by the recent momentum around large deals. Our late-stage pipeline has expanded nicely with a strong line of sight to closures over the next few months across all three industry segments. We are in a unique time in the market and are seeing a set of core themes across our clients in all industries and geographies. First, every enterprise is on a journey to transform their business, revisit their portfolio choices, and set their business up for strategic long-term success. The transformation drivers vary from company to company and include factors such as the desire to modernize their technology stack, supply chain volatility and risk management, the need to leverage real-time data and predictions, China concentration risk, and energy transition. Second, at the same time, inflation is hurting, and that has led to a dramatic increase in cost being a huge agenda item for everyone. We have seen cost become a prime motivation for our clients in more than 60% of situations versus 45% just six months back. However, an increasing number of clients are using this moment to not only reduce costs through consolidation, standardization, digitization, and global delivery, but also to build out new operating models and deliver efficiency to redeploy towards long-term investments. Even the largest tech companies have declared that 2023 is a year of efficiency. To quote a client, I want to batten down for a recession and tool up for a transformation and do both at the same time. There's a clear desire to work with fewer strategic partners in technology services. They are revisiting their choices of priority tech partners, and we are being told that we are differentiated in technology because of our domain process and data analytics depth. There is a heightened desire to have us bring our unique approach to building solutions and leveraging cloud-based technology, an approach rich in industry domain, process, and data. There has been a significant increase in spinoffs of businesses getting ready for separation as companies redefine their portfolios. We have seen such opportunities double in the last 12 months. There is an insatiable and rising appetite to leverage data and ensure real-time access, and the arrival of chat GPT and other technologies in generative AI will only further spur that. With structurally shrinking workforces in many countries, companies are unable to meet their demand for talent, particularly data, digital, and technology skills. As always, we respond to these changing client behaviors in an agile way. We are continuing to invest in our priority accounts, which represent a portfolio of select clients that are on a significant transformation journey that we believe have great potential to generate above average company growth. The trust and client intimacy we are building with them across multiple buying centers allows us to drive value for them and growth for us. During 2022, revenue from our priority accounts grew 15% and represents approximately 60% of total revenue. Next, We are expanding our large deal team to take advantage of the increasing opportunities we see in the market to drive more sole source multi-state engagement, given our positioning as a partner with the essential domain depth and suite of capabilities to be able to transform client operations end-to-end. We continue to deepen our relationships with our partners where we design, implement, and support technology and data solutions on AWS, Azure, and Google Cloud platforms, specialized data platforms like Snowflake, enterprise applications like SAP and Oracle, cloud workflow technologies like ServiceNow, and specific micro platforms like Kinexus, Blackline, O9, and HighRadius in specific domain areas. Let me bring these to life with some examples. For a large tech platform provider in the automotive industry, we have been chosen to drive the complete modernization of their tech stack to AWS Cloud, while at the same time consolidating all of their operations globally. Our domain depth in the automotive industry, where we understand not just the vehicle, but its repair, maintenance, financing, and insurance, one of the relationships. For a large global medical technology company, we have been chosen to consolidate all functions leveraging new technology on the cloud and deliver meaningful cost savings in the first two years that allows them to reinvest into strategic growth initiatives. For one of the largest tech enterprises in the world, we will be implementing Kinexus on their cloud platform to deliver better planning for the supply chain for their data centers. The exciting opportunity here is to then take this jointly as a solution along with a tech partner to a range of other clients. For another large tech enterprise, we want a small engagement in sourcing and procurement operations for their cloud business. Another clear example of how efficiency is the mantra for 2023, even for growth-oriented big tech. for a global life sciences company bringing our industry domain and functional depth to set them up for a spin-off of one of their divisions. This is initially a consulting and advisory relationship that we expect will lead to digital operations. And finally, for a leading provider of healthcare liability insurance, we are modernizing their data management practices, migrating their data infrastructure to the cloud, and ensuring broad availability of their data for business decisioning by their finance, underwriting, and claims teams. Our attrition rate significantly improved in the fourth quarter, declining to 31%, which is our lowest level since the second quarter of 2021. Adjusting for involuntary attrition and employees with less than three months of service, our attrition was even lower at 27%. The first five weeks of 2023 continues to show declining trends. We have seen this across the board, across all levels, all skills, including data analytics, digital and technology skills, and in every part of the globe. This augurs really well for delivering sustained value to our clients. During the quarter, we welcomed more than 9,000 new team members across the globe and almost 50,000 for the full year 2022, reflecting Genpact's powerful brand and reputation as an employer of choice, providing many opportunities to learn and advance one's career across the globe. For the third consecutive year, our global workforce completed more than 10 million training hours leveraging our Genome online on-demand platform. Despite the ongoing macro uncertainty, we have a healthy pipeline which includes several large deals. We believe many of these will close over the next few months. This gives us confidence in our ability to deliver total revenue growth for the full year of 2023 of 6.5% to 8% on a constant currency basis. We also plan to expand our adjusted operating income margin to 16.8%. With that, let me turn the call over to Mike for a detailed review of our results and our outlook for the year. Thank you, Tiger, and good afternoon, everyone.