Good day, and thank you for standing by. Welcome to the Concentrix second quarter financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press * 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press * 11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Sara Buda, Vice President, Investor Relations. Please go ahead. Great. Thank you, Operator, and good evening. Welcome to the Concentrix Second Quarter 2025 Earnings Call. This call is the property of Concentrix and may not be recorded or rebroadcast without the written permission of Concentrix. This call contains forward-looking statements that address our future performance and that, by their nature, address matters that are uncertain. These uncertainties may cause our actual future results to be materially different from those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements as a result of new information or future expectations, events, or developments. Please refer to today's earnings release and our most recent filings with the SEC for additional information regarding uncertainties that could affect our future financial results. This includes the risk factors provided in our annual report on Form 10-K and other public filings with the SEC. Also, during the call, we will discuss non-GAAP financial measures, including adjusted free cash flow, non-GAAP operating income, non-GAAP operating margin, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP EPS, and constant currency revenue growth. A reconciliation of these non-GAAP measures is available in the news release and on the company's investor relations website under financials. With me on the call today are Chris Caldwell, our President and CEO, and Andre Valentine, our Chief Financial Officer. Chris will provide a summary of our operating performance and growth strategy, and Andre will cover our financial results and business outlook. We will open up the call for your questions. Now I'll turn the call over to Chris. Thank you very much, Sara. Hello, everyone, and thank you for joining us today for our Second Quarter 2025 Earnings Call. We are seeing momentum from the investments we have been making, accelerating our growth rate and demonstrating the value of our differentiated offerings. Today, I'll give you a bit more detail on our progress, and then Andre will talk about our view of ongoing revenue, margin, and cash flow growth in the second half of the year. Now, let's start with the quarter. We reported yet another solid revenue quarter above our guidance, which outpaced both in our core offerings and our adjacent solutions. We saw growth in our pipeline across verticals and geographies with the desired mix of services and accretive margin profiles. Operational margins for the quarter were lighter than anticipated, driven by two reasons: our decision to hold labor in April while clients reacted to tariffs and temporarily paused projects, and, two, preparing for accelerated growth in the second half we won in quarter. As anticipated, by the end of May, we exited the month with our margin trending more favorably and expect that by later in Q3, we will again see improvement year-over-year in our margin. The goodwill we have seen from clients because of our decisions has already produced benefits. We also delivered over $200 million in adjusted free cash flow in the quarter. As you can see from our outlook, we are excited about our second half momentum across all metrics, as Andre will detail. We are outperforming due to a few primary factors. First, our strategy to deliver pragmatic, deployable AI solutions aligned with what clients want is working. This is being driven both by embracing third-party technology partners as well as our own iX suite of products. Clients are over the AI hype and want practical solutions. A Gartner study recently revealed that enterprises are adopting a digital-first but not digital-only approach. Our own third-party survey of 450 global enterprises showed a similar sentiment, revealing that 85% of these enterprises expect to increase their outsourcing budget over the next two to three years. The majority of that increase is expected to be net new investments in supporting their AI agenda. Further, even though the survey was completely blind and independent, enterprises' selection of Concentrix as a partner to build and deploy their AI initiatives was significantly ahead of all other traditional companies, CX companies combined. It was even higher than many IT services companies. This is clear third-party validation of our recognition as a technology solutions provider in the marketplace. Over the past 18 months, we have made thoughtful investments in our technology and our teams to position ourselves for this exact aha moment. In Q2, we also launched iX Hero, our agentic AI-powered application that gives humans superpowers to more accurately and efficiently complete tasks with more consistent outcomes. This complements our autonomous AI assistant product, iX Hello, giving clients an array of AI solutions to meet their needs for both full automation and human augmentation. We are delighted with the early market traction we are gaining, and our pipeline of integrated product solutions deals is strong. We believe we are on track for our products to be accretive to the business as we exit the end of the year and believe we can deliver accelerated levels of revenue growth for our products without increasing our spend this year. Within our marketplace, we are also winning on the side of partner consolidation. This is enabling us to grow and win new business that tends to have more complexity as we introduce new adjacent services that can be deployed securely and at scale. In summary, we delivered another strong revenue and cash flow quarter and are on track to exceed our revenue forecast for the year. We are confident the strategy we implemented several years ago is working. The strategy centered around, one, bringing integrated technology-led solutions to market that align with clients' needs, and two, expanding the value we provide clients across a broader portfolio of business solutions to grow share, and finally, three, keeping our underlying business healthy by automating or reinvesting in commodity work. The market is evolving as we anticipated. Clients are centralizing spend with partners that have scale, breadth, and expertise to deliver real-world solutions that drive tangible results. We are well positioned against our competitor set, particularly for large-scale programs that combine consulting, IT integration, CX expertise, and AI. We have made and will continue to make the right investments in the business for ongoing profitability. I would like to thank our game changers for their passion this quarter and the clients for their trust. With that, Andre, I'll turn it over to you. Thank you, Chris. In the second quarter, we exceeded our revenue guidance yet again, delivering revenue of approximately $2.4 billion, an increase of 1.5% year on year on both a constant currency and as reported basis. The growth in the quarter was broad-based across our client base and reflects continued strength in our core AI-led customer experience offerings and ongoing growth in our adjacent AI solutions. These adjacent services are growing at a rate that is faster than the company as a whole, and we continue to believe that as these solutions increase in scale, there is an increasing opportunity for them to contribute to revenue growth. Looking at our second quarter revenue growth by vertical on a constant currency basis, growth was well-balanced across verticals. Revenue from retail, travel, and e-commerce clients grew 3% year-over-year, led by growth with travel clients. Media and communications also grew 3% year -on 0year this quarter. This is positive to see as this vertical has been flat to down in the past few years. Revenue from banking, financial services, and insurance clients grew 2%, and our tech vertical and our healthcare vertical were both relatively flat, reflecting offshore movement. Turning to profitability, our non-GAAP operating income was $304 million. This is below the guidance range we provided on our last call. As Chris mentioned, in April, some clients paused programs as they sorted through the impact of tariffs on their business. During this time, we kept their programs stable with the expectation that the programs would start to resume in May, as they have. We also made elevated investments to support the acceleration of revenue growth in the second half of 2025. Margins improved in May, and we expect meaningful sequential margin improvement in both the third and fourth quarter of the year. Adjusted EBITDA in the quarter was $357 million, a margin of 14.8%. Non-GAAP diluted EPS was $2.70 per share within our guidance range and an increase of 1 cent year on year as we benefit from lower interest expense, a more favorable tax rate, and a lower share count as we continue to repurchase our shares. GAAP net income was $42 million for the quarter, and GAAP diluted EPS was $0.63 per share. Reconciliations for GAAP and non-GAAP measures are provided in today's earnings release. Adjusted free cash flow was $200 million in the quarter, an improvement of about $240 million sequentially from Q1. We returned approximately $67 million to shareholders in the quarter, which included repurchasing $45 million of our common shares, or approximately 920,000 shares at an average price of approximately $49 per share. The remaining $22 million in shareholder return was in the form of our quarterly dividend. At the end of the second quarter, cash and cash equivalents were $343 million, and total debt was approximately $4.9 billion, bringing our net debt to $4.5 billion. We also reduced the amount of our off-balance sheet factored accounts receivable, with the balance standing at approximately $142 million at the end of the quarter. As previously disclosed, we refinanced a portion of our debt maturities and extended our revolving credit facility on favorable terms in the quarter. Late in the quarter, we made a $150 million voluntary principal payment against our term loan that matures in December of 2026, bringing the balance on that term loan down to $600 million. At the end of the quarter, we had approximately $1.5 billion in liquidity, including our $1.1 billion revolver, which is undrawn. Overall, we delivered a strong revenue quarter above expectations with steady growth across verticals. We continue to complement our core CX growth with strong momentum from our adjacent solutions, such as data annotation, analytics, B2B sales, and AI implementation IT solutions. Our pipeline is strong, and the new business we are signing is accretive to margins as these programs scale. Now, I'll turn to our outlook. For the third quarter, we expect the following: revenue of $2.445 billion-$2.470 billion. Based on current exchange rates, these expectations assume an approximate 140 basis point positive impact of foreign exchange rates compared with the prior year period. The guidance implies constant currency revenue growth for the quarter ranging from 1-2%. We expect operating income of $162 million-$172 million and non-GAAP operating income of $318 million-$328 million. This translates into expected non-GAAP EPS of $2.80 per share-$2.91 per share, assuming approximately $68 million in non-GAAP interest expense, 62.7 million diluted common shares outstanding, and approximately 5% of net income attributable to participating securities. The effective tax rate is expected to be approximately 25.5% in the quarter. Our guidance for the full year 2025 is as follows: fiscal year reported revenue of $9.720 billion-$9.815 billion based on current exchange rates, which assumes a de minimis impact [audio distortition] compared with the prior year period. Accordingly, we are increasing our guidance for constant currency revenue growth for the full year to 1%-2%. We expect operating income of $675 million-$695 million and non-GAAP operating income of $1,300 million-$1,320 million. This is within our initial profit guidance for the year and adjusts for the results in Q2 and a currency headwind to profit as compared to our initial guidance. We do expect our non-GAAP profit margin to increase sequentially in both the third and fourth quarters as revenue follows the upfront investments we've made and as our technology suite moves to being accretive to the business in the fourth quarter. Our guidance for non-GAAP EPS is $11.53-$11.76 per share, assuming non-GAAP interest expense of $273 million, approximately 63.1 million diluted common shares outstanding, and approximately 5% of net income attributable to participating securities. The effective tax rate is expected to be approximately 25% for the full year. We continue to expect adjusted free cash flow of $625-$650 million. Included in this expectation is an improvement in day sales outstanding from current levels and the expected sequential improvement in profitability and lower integration costs. In regard to capital allocation priorities, as we said in January, we expect our spending on share repurchases to modestly exceed last year, taking advantage of the disconnect between the fundamentals of our business and our current valuation while continuing to pay down debt. We remain committed to maintaining our investment-grade principles. Of course, we will continue to support our dividend, which currently has a yield of approximately 2.4%. In summary, we are seeing a steady acceleration in our growth rate and are confident that our strategy to differentiate Concentrix in the market will continue to drive stronger growth in the second half of 2025 and beyond. We expect margin improvement in the second half and are committed to driving strong year-on-year free cash flow growth. We have made the right investments in the business that are allowing us to outperform and over the long term position us to generate mid-single-digit growth we believe this business can deliver. We are committed to having the right capital structure and continued capital return through a combination of share repurchases and dividends while reducing our leverage. With that, Operator, please now open the line for questions. Thank you. As a reminder, if you would like to ask a question, please press * 11 on your telephone. You hear an automated message advising your hand is raised. We also ask that you please wait for your name and company to be announced before proceeding with your question. One moment for the first question. The first question will be coming from the line of Joseph Vafi of Canaccord. Your line is open. Hey, everyone. Good afternoon. Great to see another solid quarter here relative to expectations. Congrats on that. Maybe just a few quick ones for me. I know it did sound like some of the weaker verticals kind of from a broad base are doing a little bit better. I know you're looking for a little bit of revenue acceleration here in the second half. Just wanted to drill down on that a little bit. Is revenue acceleration more broad-based here, or is it more reliant on a couple specific contracts, and maybe other color there on where it might be coming from from a vertical basis? I have a quick follow-up. For sure, Joe. It's Chris. The momentum is broad-based. As we talked about from a pipeline perspective, we're seeing very solid pipeline building not only from a geography perspective in all of our geographies, but also on a vertical perspective. I think banking, as Andre alluded to, tech and media and comms, we're starting to see some good momentum. Healthcare, we're starting to get to the end of the offshoring mutation or muting of our growth. We are really excited about what we're seeing. Frankly, as we kind of indicated in our comments, the type of deals that we're winning and the solutions that we're winning are the type that we've been after. They're much more stickier. They're more complex. A big chunk of them use our technology. We're pretty happy with that. That's great. And then kind of talking about your technology, just definitely congrats on getting that market research recognition for the technology. Where are we in this journey now? It's been, I think Concentrix has done a great job here in turning AI into a clear positive from an unknown over the last year, year and a half. I know you're rolling out some standalone software products. It sounds like it's helping you gain share. Just maybe just kind of maybe just some more broad, some more detailed commentary here on how AI is treating you right now in the market and what you may what we should expect here for the next year or so. Yeah, for sure, Joe. I'll tackle the question in two parts. The first part is really our own technology. As we talked about sort of two years ago, not, frankly, many clients were buying real AI. We developed a suite of products internally ourselves and started to see some very strong benefits. In the middle of last year, our clients started talking about wanting to deploy what we had basically been showing them internally working. That's where we started to commercialize the product and launch the first fully autonomous product late last year. I'll call it the human augmentation product, iX Hero, at the beginning of Q2. What we've been super happy with is not only are we getting clients to think about how to use it internally and are adopting it sort of a little ahead of where we expected them to adopt it, but also from the size of deployments, we're very happy that we're starting to see some scale. The one thing that we are seeing is the economic model is slightly different than what we expected. We're seeing clients willing to give us more work because of our platform, which we're obviously costing into that and we're getting economic return from, but it's not necessarily always turning into discrete billing. We are also growing our discrete billing, though, when a client is deploying it across their enterprise or wants to split how they're buying products and services from us. We are super, super happy with how that is going. As we talked about, our expectation is that we'll be accretive by the end of Q4. As I also mentioned, we expect to be able to accelerate growth on those products without investing more at this rate because we built sort of and took the time to build it into a commercial product at the beginning of the year. As painful as it was at the beginning of the year, we're starting to see the benefits of that investment and that time taken to build it that way. The second part of the AI discussion is really about our third-party technology partners and our adjacent services. The third technology partners are really coming to us because they've got this technology. They do not understand how to implement it in the last mile that drives value for clients. Many of them have had failed POCs or where they can't get growth out of it. They're coming to us to say, "How do we actually implement this and use it?" Working with the clients to do that. We're seeing good growth in those implementation services. We're seeing good growth in the pipeline. We're also selling services around that from a delivery of services perspective. From an adjacent services perspective, the growth in our data annotation, our analytics business, our implementations business, our consulting, our managed services business, and even our B2B business where we're actually selling AI solutions on behalf of software vendors, as we talked about a quarter or two ago, is now getting to $1 billion and growing much faster than our core business. We're seeing all these positives from this AI, as we talked about two years ago, despite a lot of people not necessarily believing us at that time. We're excited to see where the momentum can take us. Sure. That's great. A lot of color there. Much appreciated, Chris. Congrats on all the progress, you and the whole team. Thank you very much, Joe. Thank you. One moment for the next question. The next question will be coming from the line of Robbie Bamberger of Baird. Your line is open. Yeah. Thanks for taking my question. Can you maybe provide just a little bit more color on kind of what happened to margins in Q2 that caused you to be about 80 basis points below last guide? And then how much of that was due to that pause from tariffs that you mentioned? And then also how much was due to impacts like FX or anything else that went off this quarter? For sure, Bobby. No problem. Let me walk you through the quarter because it might provide a little better color. The first month of the quarter, March, was well in line with everything that we expected, growing well, pipeline doing well. When the tariffs kicked in, I think some of our clients, it was a small subset of clients who are in the logistics industry and some who are manufacturing product, were quite surprised about how robust the tariffs were. What they did was they paused and they said, "Look, we need a couple of weeks to kind of figure out what to do. We want to halt some of these projects to kind of figure out are they going to be driving the returns that we expected? Do we need to reorganize our supply chain before we continue to shift? Et cetera, et cetera, et cetera. With a few, and again, this is less than a handful of clients who are relatively larger clients with us, we had a conversation where we said, "Look, we can downsize all this labor. We can put all these projects on isolation, but our expectation is that tariffs will get sorted out, that you'll be able to rebound pretty quickly. That is going to delay you three or four months of support and cause you other problems." We worked out where we actually held the labor. We paused the projects, but kept sort of the investment going from that perspective. We started already in May starting to see those margins coming back in line. As we talked about in my prepared script, we'll see those margins come back in line through the first part of Q3. By the end of Q3, we expect to be up again year on year on margins. The benefit we got from that, which is really important for investors to understand, is that the clients very much appreciated what we did. They didn't miss a beat in their supply chain. They've now started to ask us to take on more volume because some other partners pulled back and we were able to capture that. That's allowed us to kind of accelerate some of the investments that we talked about going in. If you look at sort of the midpoint of our earnings guide, and Andre can chip in, but if you look at the midpoint of our earnings guide from a margin perspective, you can think of it as really the majority held labor, a small portion of it as being investments that we won in the quarter because of the held labor that people were going to move volume to us for. And then FX, Andre, if you want to comment on FX. Yeah. FX certainly a mixed bag for us, Robbie. As you think about the top line, certainly it was more of a tailwind than we expected. When you net things out, it was a bit of a tailwind, sorry, a headwind for us from a profitability perspective. Obviously, we benefited from the strength of the euro and the pound. At the same time, the weakening of the USD versus the unhedged portion of our exposure to the Philippine peso and Indian rupee had an impact. Overall, it was certainly smaller than the impacts that Chris has talked about. Yeah. That's very helpful there. If we look in the back half, we can imply sort of mildly above 2% organic constant FX growth in H2 after about 1.5% in the first half. I guess what gives you confidence in the mild acceleration there? Is it partly due to the April revenue volumes kind of being a little bit lower because of those clients essentially pausing spend due to the tariffs? Q3 guide implies mildly above that 1% sequential that we've seen sort of the past three years. Is that due to the tariff impact? Yeah. I would not read too much on the tariff impact. I will let Andre kind of go through some of the other comments. Just to be very clear, we started seeing the volume coming back in our expectations by the end of May from the volume that was held off in April from the tariffs. That is layered in. If you think about how we have guided for the last two quarters, we have been quite conservative in coming over our guide. I think that is still our philosophy from a revenue perspective. If you extrapolate that out, you can see that we came over the guide even with this pause. We would have probably come in even more over the guide with this pause and our expectations that we are going to continue to perform well and accelerate through the back half of the year. Yeah. I think our confidence, Robbie, comes from the new business that we've signed so far this year that is ramping, as well as the extra share that we think we've picked up because of the actions we took in the second quarter to gain even more traction with some clients. Very confident in our guide. As Chris has said, we've tried to be very conservative, very much focused on coming in at the top end of the range for every period that we've given, which would imply a nice acceleration through the second half. Awesome. Thank you, guys. Thank you. Thank you. Our next question will be coming from the line of Ruplu Bhattacharya of Bank of America. Your line is open. Hi. Thanks for taking my questions. Chris, how should we think about the revenue contribution from iX Hello and iX Hero AI offerings this year and beyond? Since it looks like operating margin guide for the full year is now lower by 40 basis points to 13.4% at the midpoint, are you planning to moderate your spending on AI? Yeah. So a couple of things. First, from a comment perspective, as we mentioned, we're spending about $50 million incrementally, $100 million total on internal tools, but $50 million specifically to our iX suite. When you look at that, we've talked about in Q4, our expectation is that we're accretive and we're on plan to do that from an economic value perspective. We've also said that we can hold our spending as is and continue to accelerate revenue on that. Honestly, our expectation is that we'll continue going into the next year and our guiding for the next year that we'll see continued margin expansion capabilities with it and also tying into growth by clients bundling services and technology with us going into the new year. From our perspective, we're very happy where we're positioning. We're very happy with the comfortable of spend. We do not need to increase our spend to continue to see the benefit. And are using sort of generative AI tools internally ourselves to drive better value from our development team. That is all going very, very, very well. We would not, Ruplu, be investing in these suite of products to get a business that just covers our development costs. We see this as a very strategic initiative. We see this as a very differentiated initiative. Our clients are seeing it that way as well. We are getting some great recognition from a number of different analysts around our AI technology and what we are able to do with it. Over the coming years, we continue to see it as a benefit by taking the strategy. Okay. Thanks for that. Andre, I'd like to follow up a little bit more on operating margins. I mean, like fiscal 2Q operating margins were 80 basis points lower than the midpoint of your guidance, but revenue was higher than guidance. When we look at the guide, it is 50 basis points higher sequentially to 13.1%, but just on $40 million higher revenue sequentially at the midpoint. I think that implies like a sequential incremental margin of something like 46%, which is just the change in operating income over the change in revenue. I'd like to ask you, what gives you the confidence that you're going to get that level of margin improvement on just $40 million higher revenue sequentially? You said margins are trending better now. What are the operating margins trending at currently in the quarter? Yeah. Again, I'll start, Ruplu, by reminding you we're very focused on the higher end of our revenue guide. Therefore, the incremental revenue that we're trying to drive in Q3 is certainly higher than the $40 million at the midpoint. We should see we've always talked about incremental revenue driving roughly 20%-25% of flow through. You can do the math and see what that would give us. We expect the impact from the tariff pause to start to mostly get weaned away completely as we go through this course. Most of that benefit, most of that hurt being one time. That will drive improvement as we move into Q3. Then just other underlying improvements in our operations as we scale programs. Lastly, moving to a more positive position, getting towards accretion in the AI investment. All those things are kind of baked into the stepping stones to the midpoint of our guide. Okay. Chris, if I can ask you one more real quick. I mean, just looking at the general operating environment, can you talk about how sales cycles are trending? You said that some customers are trying to move their services offshore. What was the impact to revenues and margins? Can you also talk about the catalyst business? How should we think about revenue growth there? If you can just give us these details about the operating environment. Thank you so much. Yeah. For sure. I'll tell you, transformation deals that obviously we're winning and have in our pipeline tend to take longer, but they're not elongated and they're not shrinking. They tend to go through a lot more sign-offs just because of the type of investment that's required. We're quite happy with what we're seeing in our pipeline. We're quite happy with our win rate within those. In the traditional operating environment, where we can drive savings for clients and show them what we can do with them with our own technology or with third-party technologies, those continue to move at a reasonable pace. We're talking a quarter to two quarters to go from start to close of a deal, and then again, probably two quarters before it gets to revenue and starts to contribute to our organization, which historically has been the case for a long, long time. What clients are looking for is something different. They're looking for something unique. They're looking for something that works. They're looking for something that's pragmatic. I think we fit very, very well in that space. Clients are also looking for a service provider that can bring them the technology, the integration, the managed services, and the delivery of what they need to do. That is sort of a unique position that we see ourselves in and where we are winning very, very, very nicely. We are quite happy with the operating environment. Because we're succeeding in that space, obviously, our catalyst business is a key part of that. Now, our catalyst revenue is going in line with our business, but it is enabling more growth within the business that we do not necessarily count under the catalyst label that sometimes fits in other parts of our P&L, for lack of a better term. You should see this going forward more and more as an integrated offering as we execute. In terms of pricing, from a transformational perspective, from a complexity perspective, that pricing is, as we talked about, accretive. It is healthy. I mean, it is always competitive. Things that are very commodity-based, which obviously we are walking away from that type of work, are very, very, very price sensitive right now. That is why we just do not pursue it. If we cannot automate it, we are deinvesting in that space. From an onshore to offshore perspective, Ruplu, it's about a 2% headwind that we see from a growth perspective, 1.5-2% depending on the quarter of work moving from a high-cost country to an offshore country. We tend to duplicate costs for about a quarter, quarter and a half, to possibly sometimes two quarters, depending on the complexity of the program, before we see margins go up, even though revenue kind of drops right out of the gate as we move the stuff offshore. That will continue to become less and less of a burden as you go through because, as we've mentioned for the last year or two, the primary new wins are coming in nearshore and offshore. They're not coming on onshore for the most part. That tends to fade down. The last thing that we've talked about is that from a complexity of work product perspective, we have about 7%. It's actually a little less now. But 7% of our revenue is commoditized. Our expectation is to get to 5% by the end of the year. It is about a 2% headwind. We're on pace to do that. If you would like to think about us halfway through the year being halfway through that move, you've got that headwind, which we do not expect to repeat next year, which gives us further cause for why we see acceleration in our business as we go in and again, not guiding for next year, but going into next year. Sorry, Ruplu. I know that was a very long-winded answer, but hopefully that covered all your points. Yeah. No, thank you for all the details. Appreciate it. Thank you. One moment for the next question. Our next question will be coming from the line of Vincent Colicchio of Barrington Research. Your line is open. Yeah. Chris, it's nice to see additional consolidation benefits for the company. Can you give us some color on how these came about, why you are benefiting from this trend, and if we have legs here into the second half of additional consolidation? Yeah. Let me start with the last part of your question first. Yes, we have legs into the next part of the back half of the year and frankly beyond because we do see this trend of clients as a whole wanting fewer partners, and they want partners with broader services so that they can obviously boil it down to fewer partners. Really, around consolidation comes to three things. The first thing is being top of the stack rank, operational excellence. We perform and are always focused on trying to be number one for our clients. Where we are number one for our clients, we tend to win from a consolidation perspective. The second thing that's super important to clients is technology to help them automate and improve their delivery. With our own iX suite of products, as well as with third-party products, we tend to do very well from that perspective as well. The third thing that's important from a consolidation perspective is scale. Scale not only on a footprint perspective, but also on a capabilities perspective. If you think about a client dealing with three or four partners, one partner for analytics, one partner for some tech, one partner for CX, one partner for back office, and yet they can come to Concentrix and we can say, "Look, we can do all this for you. We can help you with your platforms. We can run it. We're very flexible from a commercial perspective." That really resonates with these clients, and that's where we tend to do very, very well. Across those three pillars, we continue to see lots of ability to execute going into the back half of the year and into 2026. Thanks for that color. Could you give us some color on managed services? Does that continue to grow? What level are you at in terms of managed services as a percent of the business? Yeah. We do see managed services growing. We really see it actually, AI is one of the big areas that we see managed services continue to grow much faster than historically what we've done in managed services because with AI, it's not plugging it and it's done. It requires a lot of maintenance to continue to drive the efficiencies that AI can do. We see that growing. Right now, the managed services business in our overall business is not massive. It's a portion of our catalyst business. If you think of our catalyst business as being 8% of revenue, it's smaller, but it is one of the areas that is growing faster than our overall business. We see that continue to grow based on the demands of what AI drives for managed services. Thanks, Chris. Thank you. As a reminder, if you would like to ask a question, please press * 11 on your telephone. One moment for the next question. The next question will be coming from the line of Divya Goyal of Scotia Bank. Your line is open. Good afternoon, everyone. Thanks a lot for all the color that you provided here on profitability. Andre and Chris, I wanted to get a little bit more color in terms of the elasticity of your headcount as the revenue potentially continues to grow from an automation standpoint and an offshoring standpoint. Obviously, what happened this quarter where you ended up holding on to a lot of labor and staff despite slight weakness. Help us understand how do you potentially see it trending with increasing automation and AI getting more prominent across the revenues? For sure, Divya. I appreciate that. The first thing that you should appreciate, and I think you know because you know the industry well, is that we can lower our costs pretty quickly from a headcount perspective if we need to. We took a conscious decision in April to keep it based on not only the client relationships and where we saw it as a competitive advantage. If we had not seen that, we could have exited the labor very, very, very, very quickly and kind of had a different result. Net-net-net economically, we think it was better with what we did. From an elasticity perspective of labor, I'm hesitant to give too much details because I see people coming out with these things saying like, "40% of our work is done by AI. 90% of our work is done by AI," but they're not decreasing their headcount, which is a little dubious. What we find is that our efficiencies, depending on the role and job that is done, is anywhere from about 5-40%. I know that's quite a large range, but it depends where we're putting it in. It depends on the task that we're doing it in, and it depends on the skill set of the individual. We are seeing some of that elasticity now. We are using some of that for competitive advantage on getting volume from others because we can be more competitive in the space while still maintaining and growing our margins. We also see that as where we are helping our clients be more cost-efficient, and therefore, they're buying our technology to do that. Long-term, we do see our ability to continue to grow our revenue without growing our headcount. If you look at our headcount numbers for the most part through the course of the year, they have not really materially changed, yet we have grown our revenue. That's very helpful. As of now, given the potential increase in automation and AI, you don't see a decline in headcount. I'm just wondering from a global employment loss standpoint, right? That's where my head's at, and I'm thinking about how can we best preempt that situation? Yeah. Divya, our goal is frankly to keep our headcount flat as we grow revenue and maybe possibly decline headcount depending on our growth of revenue. Clearly, we are going to take advantage of as much automation as we can. I think from our perspective, what we look at is kind of our margin profile of our business is accretive of the complexity of the work that we are dealing with. There is some automation. More will come. As that comes in, we will take the appropriate action. Right now, we do not see a massive decrease. In fact, if you look at some of the analyst studies like, I think, Gartner has come out with it, and McKinsey just came out with a report recently, and there was an FT column on it, they all expect that employment and outsourcing will actually increase over the next three years. It's an interesting phenomenon and goes in the face of some of what the pure tech companies are saying because they might not necessarily understand the dynamics of how to deliver services around their tech. That's very helpful. I'll just ask one last question here. You briefly spoke about the shift in pricing dynamics out there. Could you talk to us a little bit more about how exactly are you seeing your pricing strategy evolve? Again, with increasing automation, increasing AI, increasing offshoring, are you seeing a shift from time and material to more outcomes-based pricing and plus with your iX Hello-like solutions, right? Talk to us a little bit about your pricing strategy and how are you broadly competing with the increasing consolidation in mind as well. That'll be all for me. Thank you. No problem, Divya. First off, we're not seeing, when you look at the size of our business we have, we're not seeing a material change. We are seeing more interest in outcomes-based pricing. We're seeing more interest in sort of the transformational deals that we're doing that will lower costs, but it still tends to come to a transactional unit times by a revenue unit, and there you get the revenue. We do expect that will continue to slowly change, but we've said that for the last 10 years, and it hasn't necessarily moved that much. It might be another 10 years we're still discussing it for the most part. I think from our perspective, what we are focused on is growing net new streams of revenue such as our iX suite. While I mentioned we do have some of it bundled into our services, we also have discrete revenue. That is very much like software SaaS revenue, and our goal is certainly very much to grow that as a discrete revenue line. We also have managed services contracts that I think Vince brought up where we actually are billing for a set fee for the whole year, and we manage the equipment and services that we are doing. That is a bit of a different revenue flow. All these different revenue flows are well under half of our revenue. Just to set expectations, the margin profile is great. We definitely want to grow it, but we do not see it getting over half our revenue for, well, for the foreseeable future by any stretch of the imagination. That's helpful. Thank you. Thank you. There are no more questions in the queue. At this time, this does conclude the conference call for today. You may all disconnect and have a great evening.