Citi Tech Conference. I'm Brian Keene. I cover the IT services group here for Citi, and we're excited to have Genpact. In particular, we have BK here, who is the CEO and long time, how many years at Genpact? Let's say over two decades. A couple of decades. From the very beginning. A couple of decades. Yeah, yep, from the beginning. BK knows Genpact from the beginning. What we'll do is I'll ask a series of kind of fireside chat questions, and if there's any in the audience, just go ahead and feel free to raise your hand and we'll get to it. With that, BK, thanks for being here. Thank you. Thank you for having me here. I really appreciate that. Let's start with the most obvious place to start, which is just the overall demand environment for IT services. Maybe you could talk a little bit about the last 12 months- 18 months and kind of where we are today and maybe any kind of vision going forward for just demand for IT in general. Sure. I think maybe let's just a little bit go back to what are, in many client conversations that I have been, and what are clients seeing, what are they saying? If I was to summarize, Brian, clients are talking a lot about value creation, not only about cost or productivity. They are not. Yes, they always talk about it, but they are talking more and more about value creation. Clients are talking a lot about AI. It's a change over the last 12 months or 18 months. It wasn't there prior to 18 months or 24 months ago. I think from an AI standpoint, if I just go take a little bit of that particular leg of conversation, more and more about the conversation in technology or AI is, hey, how does it create more value? That's where a little bit of our resonance is increasing because we've been known for process, we've been known for data, we've been known for domain in specific functional areas or verticals or sectors like insurance or banking or consumer goods or manufacturing. I often say internally now, externally as well, that there's no artificial intelligence without process intelligence. That has begun to resonate a lot with the clients. Clearly, as we see it in our pipeline, and we shared with the investors about advanced technology solutions, we are seeing more and more of conversations in that area and how advanced technology solutions or how all of that particular conversation is enabling clients to be on the journey of artificial intelligence or the client conversation that is happening. The move now towards value creation, does that bring in a little more top-line growth, you know, thinking? Is that a little more discretionary spend? You know, how would you characterize that? I think when I talk about value creation, I think from a client standpoint, there is certainly a conversation on how they gain market share in their spaces, in their end markets. Therefore, conversation is a lot around top-line, conversation is a lot around value creation by generating more cash for them from a DSO, DPO standpoint. There is more conversation as to how AI or any of these new technologies, along with the process, can enable better value for them. Obviously, cost is always table stakes. Genpact, I think, has consistently outgrown the IT services peers over the past couple of years. When you look at some of the peer growth rates in IT services versus the way you guys are growing, especially on the top line, what do you think are the differentiating factors that cause Genpact to be kind of a leader in some of the growth rates? I think we have had a very strong foundation, strong foundation of the capabilities of process and data, a strong foundation of operational discipline, a strong foundation of client centricity, a very strong culture, and a combination of that, along with this turn and recognition of how domain is enabling in the ROI of investments, is helping us put great scores on the run board. I am really thrilled and proud of the team as to how execution is stacking up as we progress. It is, be it in the pipeline, be it in the conversion, really feel glad as to how teams are stacking up. Great. I wanted to go back to the Analyst Day in June where Genpact unveiled the new go-forward growth strategy. I think Genpact Next was a particular focus on the advanced technology solutions, ATS, that you mentioned in the previous question. ATS now consists of data, AI, digital tech nologies, and the agentic solutions. My first question is just how did the growth of these businesses grow lower than the company growth rate for the first three quarters of fiscal year 2024 and now is growing mid-teens at 17% in the second quarter? I guess that's a dramatic shift, you know, and I would have thought that those businesses would have still been growing at a higher rate. Yeah. Genpact Next, you know, we all collectively looked at our business, and Genpact Next represents a very clear growth model, a growth model which is centered around our capabilities, our clients, our catalysts that enable these clients on a foundation of a strong culture. The shift that you're talking about, Brian, is clearly that sharp shift that you saw is based on our recognition along with our clients as to what are their needs, where we are aggressively investing, which is advanced technology solutions. You named a few of the key capabilities in there on data and AI or digital technologies where a lot of partner revenue happens or all of the advisory relative to how to create value for our clients and emerging agentic solutions. All combination of this is really shaping the business in a very significant way, almost building a new Genpact within Genpact. Core business services, including digital ops, continues to be a very strong foundation where we run mission-critical processes for our clients. It stays at a very critical foundation as we are continuing to progress. I really feel proud about how advanced technology solutions we actually reported last quarter that it grew 17% year- on- year. We have also mentioned for 2026 and 2027, it'll grow at least 15% and feel really good about that. I noticed that there was some moderating inside of data t ech and AI since the advanced technology solutions is accelerating. What is the call out there that might be moderating inside of data t ech and AI? Look, I think overall, what is advanced technology solutions, it represents our highest value, highest revenue generating per FTE, and a pretty strong margin profile. That is the bouquet of services that is getting classified and getting accelerated growth. A lot of core business services and some sit in data tech, AI, and decision support services are still FTE-based models. A lot of advanced technology solutions, 70% of it is non-FTE-based models. In core business services, be it decision support, some of the technology work, or digital ops work that we do is still based on FTE-based models, which we are progressing towards a lot of non-FTE, but they are mission-critical processes. I think we are also rotating a number of that into advanced technologies. Yeah, I was going to ask about that because I think the percentage of revenue from ATS has increased a couple of points over the past year, but it's still a smaller component of the business. At the same time, we've seen a small change in that mix of non-FTE and core business services, especially digital ops. You basically see it offset in the total revenue mix. With that said, over time, I think you're alluding to we would expect a non-FTE to become a larger part of the mix as ATS also grows as a larger part of the mix. Does that hold true? You're exactly right. Nearly half of our business, actually 46% of our business, is non-FTE. When we say non-FTE, it is fixed, transaction-based, and outcome-based in that order. This proportion is increasing. Advanced technology solution already represents, Brian, 70% as non-FTE. As that accelerates, you will see acceleration on non-FTE in the entire franchise. Got it. Let's get to the big debate in IT services, which is how Gen AI is going to impact the IT services industry. I know you heard when first came out, it was BPO was going to be the number one market that was going to change and potentially be for the worse. You guys seem to have held that off pretty well. There are a lot of peers in IT services that seem to be struggling and growing revenue, so there's kind of this cloud over the whole industry. Can you just talk about how you see the debate, where it started with BPO as being a call out in particular? Are there some areas inside of IT services that are definitely going to be impacted more negatively for deflationary revenue purposes from generative AI versus some other areas of strength that you guys might be showing? So many questions in that question, Brian. Yeah, yeah. All of this conversation for AI conversation is far more nuanced than just one paintbrush. Right. As we've been consistently talking about, we are seeing that in our pipeline. We've been talking about that for almost the last six to eight quarters, that AI is a clear tailwind for us. We have now started to demonstrate that a little bit more. I spoke about, first, I'm just more responding to us, and then I can talk about the industry, that there is no artificial intelligence without process intelligence. You have heard this term technology debt a lot. The conversation that I have always with clients is about the process debt, about the data debt. Unless and until that process debt and the data debt is liquidated, you don't get ROI on the technology debt. You don't liquidate the technology debt. That's what we are consistently seeing in our pipeline and it kind of aligns with our strategy. I mean, a recent, I'm pretty sure all of us have seen that recent study that came out of MIT. It exactly is, you know, that came in maybe last month. In June, we were exactly talking about it. It's just using different words. It's talking about what we spoke about in our June Investor Day. Now, going back to the, and I think that's how you see our conversion. If I go back to now specific things like coding, customer experience, these are not work that we do in codes, but those are the things that are possibly getting impacted a little bit more from an IT services standpoint, if you said just about the application coding or whichever way. Clearly, domain is shining. The last mile, understanding the last mile, understanding the nuances, understanding the flow of work, understanding the friction points, how the flow of work will evolve, you cannot identify if you do not understand the exceptions. You don't need to just understand the exceptions. You need to be following a rigorous methodology, and I'm referring to Lean Six Sigma, or many other methodologies that we have followed over years, over decades. You need to be benchmarking them. You need to be figuring out how to standardize. All of that domain expertise, all of that data expertise, that process leakiness is shining and is what you see as a differentiation from us. The original comments that came out about, and you still hear it in the industry, that BPO is in trouble because of Gen AI, because of all the cost savings and synergies. How come we haven't really seen it as a major negative in your guys' as a result? Is there some fear that in some BPO areas that there could be cannibalization of some of the revenue? Look, I think, again, I'll go back to the mission-critical processes that we run. When I say mission-critical processes, we showcase many of them as real client examples on our Investor Day, Brian. As an example, running supply chain for a large CPG company, running or doing closing of books of many large Fortune 50, Fortune 100 clients, you know, that we do for a living. Some of these are mission-critical work, and which is less, which is different than customer experience or taking calls, you know, and at a broad level, you can just call everything a particular thing. How do you identify those mission-critical processes and build trust with clients? That's where the domain expertise and how you run some of these processes is different versus more transaction-based processes, which are, hey, maybe taking calls or coding, which is not what we do. Yeah. When you think of Gen AI and the productivity gains, do you need to pass some of those savings along to the client as well, and then maybe make it up with either other projects or more volume? Yeah. I think, again, we shared some of the experience on the Investor Day where as we are identifying, and I must say it's early days, we are seeing the volume or scope or new logos increase our TAM and SAM, and therefore revenue accretion, certainly our gross margin accretion and operating margin accretion. Having said that, I think we have been pioneers in sharing productivity and giving productivity to clients, and we will continue to be holding that position. Again, this is a honed science that Genpact has, where as we give more gains to our clients, how do we continue to raise the revenue profile as well as margin profile for them? Yep. I want to talk about partnerships. That growth has been a big part of the outperformance for Genpact. I guess the first question I always get to is why wasn't Genpact doing partnerships earlier? It's not a brand new company, and it's obviously had a big impact. How did that become such a focus and turn the growth engine for you guys? I think it's a fair question, and partnership was always part of Genpact. I think our approach changed. Earlier, partnership was solving for our particular client problem. We have now, for the last couple of years, adopted an approach that it is a catalyst of our growth. With all the innovation that is happening in the partner ecosystem, we are just bringing that as a key catalyst of our own growth, also creating more value for clients, more value for partners, certainly more value for Genpact. I think it is changing the approach. I won't say partners were not part of our ecosystem. They were part of our ecosystem for a long time. Our approach was to solve our particular client problem versus kind of scaling it up and using that as a catalyst for growth of both our top line and bottom line. You've seen it in the results. It's had a delta change. Is there more room to grow there to keep that kind of delta change growth for you guys, partnerships being a big avenue of growth going forward? Yeah, so partnership grew last quarter at 70%, seven zero, but on a small base. We are about 10% of our total revenues are now partner-influenced. I think we are in very early innings of that. We'll see continued momentum in this direction. Maybe get up to 20% or more of total revenue? Yeah, I think we are in very early innings of it, very early innings of it. Got it. After the first quarter, Genpact cut its guidance due to the large deal slippage in supply chain and tariff-related uncertainty. You guys raised guidance back in the second quarter, almost to the same EPS. I guess, maybe hindsight is 20/20 here, but was it necessary to cut, because you're almost back at the same spot? Did you wish maybe you had decided to wait it out and let some of the uncertainty go away? I think let's go to our guidance philosophy first. It is seed imprudence. We always want to steer everybody to the most probable outcome. If you back us up to Q1, it was also sharing transparently with our investors and the analyst community all of our client conversations that are happening. Yes, it had a component of a few deals that had a concentration of digital ops that moved by, let's say, some number of months. Fundamentally, prudence, fundamentally, where we most probably will land. I think we are writing an exceptional story, Brian, as I was just walking here and sharing with you. I don't want numbers to be getting ahead of us. Really thrilled if you look at the execution that we are doing, that the team is doing, and the runs that we are putting on the scoreboard. I think really feel proud about that. Has the large deals closed at a more normalized rate now than the slippage you had seen? I think we are happy with how the cadence is progressing. We reported in the second quarter we closed four large deals, and we continue to make progress in this quarter. Got it. If I look at the reported results for the first half of 2025, data tech and AI is growing that healthy double digits, but digital ops has slowed to 4% with third quarter 2025. If I look at the guide at the midpoint, I think it's about 2.3%. As data tech and AI, obviously, the advanced tech growth is carrying a lot of that business. I'm a little surprised that digital ops is kind of slow, just moderating a little bit. Can you talk a little bit about what's happening in that business for the back half of this year? What gives you confidence that you can get that business back up to your long-term targets? Yeah. Look, I think the first comment I'll make is that I want us to think about the total revenue growth of the company, not because clients don't buy from us, neither digital ops, nor data tech, AI, nor advanced technology solutions, nor code. They don't buy any of these things from us. Client conversations are, hey, these are the issues or these are the solutions and how do they gain advantage out of that? We do that revenue desegregation for giving more transparency to all of our constituents. Therefore, my first ask is really to see at the total revenue growth. Yes, we feel really confident about our midterm broad targets that we have put in of at least 7% as we think of 2026, 2027. Now, I think, as I mentioned, there are, you know, as I mentioned about Q1, certain revenue desegregation is digital ops. That digital ops was this particular deal that is getting a little bit moved this quarter or that quarter. We are not running the company for a quarter. I feel really good about overall revenue growth of the company and where we are taking the entire franchise and how we are rebuilding the new gen. Right. Because of the demand, if the demand comes in through ATS, advanced technology, you're not going to worry about it as long as the whole revenue growth is hitting the targets versus digital ops, which maybe obviously is a little less demand right now. Exactly. Got it. I wanted to ask and go back to thinking about the agentic solutions, the change in your model positively and how that doesn't cannibalize digital ops in the core business. Can you talk a little bit about that? Yeah, I think really pleased, you know, just in February, we launched our first agentic solution, and now we are building up a full-blown agentic roadmap as we do the intentional disruption and take those innovations to our clients. Given that last-mile advantage that we have of understanding the domain, understanding the exceptions, understanding the flow of work, understanding the friction points, and really figuring out what are the right agents. For example, in Accounts Payable, now a number of these agents are live in client environments. We understand this particular domain. In Accounts Payable, I think where we have started is actually within that Accounts Payable, there are four specific different types of agents that kind of do the entire end-to-end work. These are still simpler transactions. Now you think about procurement, you think about supply chain. Those are the domains that we understand really well, or I can pick up in insurance. You know, we have also launched claims agents, pre-buying, underwriting agents. A number of these agents in or in banking, KYC agents. A number of these agents, as we build the agentic roadmap, we are really feeling good about all, you know, all of the expertise that has been gained over the last over three decades to shape the new Genpact. What is the revenue model there? How are you guys charged for those solutions? First thing is all of it is not on any FTE-based model. Yeah, that's for sure. Yeah. A number of these are, and we are hand-holding our clients to go through the journey. A number of these are also on ARR-based. It's still very early days. I'm very pleased with how the teams are progressing on ARR-based models, but they are fixed. A lot of them are transaction-based with minimum volume. Some of them are also outcome-based. I think it's a combination of various, and it also depends, Brian, where the client is, because I was speaking to a client CEO yesterday of a medium-sized bank. They were very excited. I was telling him in the boardroom, this conversation is good. When I come to the procurement, you know, they want a different model. I think it is also driving change management with our clients. Yeah, and that's going to take some time, I think, right? Right. You know, Genpact, in its history, has shown just a little bit of operating leverage, kind of consistently. As big contracts came, landed, sometimes the margins would stay more flattish. You guys recently just raised your adjusted operating margin targets to 17.4%. I think the mid-term targets call for about 25 basis points of margin expansion going forward. What's driving now the leverage when, traditionally, we talked about that revenue growth brought flattish to down margins with long, large contracts? Now we're seeing some leverage in the model. Look, I would say that, and I've been in the company for a very long time, I don't think I'm embodying a particular event in the early 2010s. We have never dropped margins. Yes, large contracts come with their puts and takes, but at a company level, we have never dropped margins, barring a particular event that happened in the early 2010s. I think operational discipline is picking up far more. It's always been a strong forte of Genpact, and it is showing up more and more. I think as we move towards agentic, as we move towards advanced technology solutions, which are more higher value services and higher value solutions, that is aiding the margin profile too. You know, we are one of the companies that gives the gross margin guidance too, possibly one of the only companies that does that. We have demonstrated the progression in there as well. Again, investing heavily through self-funding to really shape the company. Is GenAI showing up in the margins yet or not necessarily? It's early days. Early days. Is it kind of contributing massively? I won't say that, but I am really pleased again how that is getting shaped. Can you talk about what your appetite would be for acquisitions or for M&A activity? If you go down that path, what would be some of the types of assets that you would target? Look, staying very disciplined about capital allocation. I think we have shared our thesis actively with all of the constituents on capital allocation. I'll take an example of Exponential that we closed in the second quarter. It is proving to be a really terrific acquisition. If I was to talk about three attributes in there, on the surface, it looks like, yes, data acquisition, which it is, but it has obviously, from a data strategy standpoint, as well as data execution. It is seeped into domain, domains that we were in any case strong with. It adds to our strength. It is also a really strong partner with a few of the key partners that we had chosen. It ticks many, many boxes. We also are very careful about the culture that we onboard. I think we believe that they are a really terrific culture. Now, three months in almost, it is really proving to be a terrific acquisition of the asset. I think we will always be on the lookout for a very disciplined process, but very lookout for where we can accelerate our journey in this data area. Is there more assets for sale now than usual, or is that not necessarily the case? It stays a pretty competitive market, I would say that. For the right asset, there is always a lot of competition. For us, we are very clear as to what are the areas that we really need to ramp up on and are constantly evaluating both organic or inorganic route to accelerate these. If you have a question, just raise your hand and we can bring a mic to you. I wanted to ask about overall pricing in the environment. Obviously, some of the peers, as we talked about, are struggling more than you guys are. Are you seeing people having to drop price or be more aggressive in some of the deals that you're seeing? Look, I think if I overarchingly look at it, we do not see at a broader level irrational pricing behavior in our sector. Now, in one particular deal, somebody did something, you know, and that's always been the case. It's not just kind of a scenario for 2025. We do see at a more broader level rational pricing versus, you know, whatever you might be getting in our kind of domains and sectors and functions. Got it. The investor base, we've had six, seven, eight presentations in IT services, and then Genpact obviously being a little bit different. What do you think BK investors are missing the most when you kind of explain the Genpact story? Thanks for asking that question. It's a good wrapping question here as we got 60 seconds here to answer that. Thank you. I appreciate it. I think I would say, as I mentioned, AI is more nuanced, you know, and no artificial intelligence, no gain from artificial intelligence without process intelligence. Unless and until you liquidate process debt, data debt, you will not be able to liquidate technology debt. I think all of that thesis and last-mile expertise, understanding flow of work, understanding domain, I think I referred to this MIT report, one of the other elements that was mentioned there, unless and until you have trust with the clients. We have built just over a three-decade trust with, you know, Fortune 500 companies, many of them. I think all of these components and then culture. Culture is very different, very difficult to, I think it is, you know, when I ask many of the clients as to why did we win, you'll be surprised 70%, 80% of the time it is because of the culture. It is not just our capabilities. It's not certainly, I mean, we talk about prices. Never, I have never heard, oh, because your price was great. Culture of client first, relentlessly client first. Even if it's a new client, they always do the reference checks because these are large deals, large relationships. Culture of entrepreneurial agility, culture of learning. These are very tough to replicate. I think it is not understood well about Genpact. Yeah. Okay, with that, BK, we'll keep it there. Thank you very much. Thank you, sir.