Good day, and welcome to the Information Services Group second quarter 2022 results conference call. Today's conference is being recorded and a replay will be available on ISG's website within 24 hours. At this time, for opening remarks and introductions, I would like to turn the conference over to Mr. Barry Holt. Please go ahead, sir. Thank you, operator. Hello and good morning. My name is Barry Holt. I'm a Senior Communications Executive at ISG. I'd like to welcome everyone to ISG second quarter conference call. I'm joined today by Michael Connors, Chairman and Chief Executive Officer, and Bert Alfonso, Executive Vice President and Chief Financial Officer. Before we begin, I would like to read a forward-looking statement. It's important to note that this communication may contain forward-looking statements, which represent the current expectations and beliefs of the management of ISG concerning future events and their potential effects. These statements are not guarantees of future results and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. For a more detailed listing of the risks and other factors that could affect future results, please refer to the forward-looking statement contained in our Form 8-K that was furnished this morning to the SEC and the Risk Factors section in ISG's Form 10-K covering full year results. You should also read ISG's annual report on Form 10-K and any other relevant documents, including any amendments or supplements to these documents filed with the SEC. You'll be able to obtain free copies of any of ISG's SEC filings on either ISG's website at www.isg-one.com or the SEC's website at www.sec.gov. ISG undertakes no obligation to update or revise any forward-looking statement to reflect subsequent events or circumstances. During this call, we will discuss certain non-GAAP financial measures, which ISG believes improves the comparability of the company's financial results between periods and provides for greater transparency of key measures used to evaluate the company's performance. The non-GAAP measures, which we will touch on today, include adjusted EBITDA, adjusted net earnings, adjusted net income per diluted share, adjusted EBITDA margin, and the presentation of selected financial data on a constant currency basis. Non-GAAP measures are provided as additional information that should not be considered in isolation or as a substitute for financial results prepared in accordance with GAAP. For the reconciliation of all non-GAAP measures presented to the most closely applicable GAAP measure, please refer to our current report on Form 8-K, which was filed this morning with the SEC. Now I'd like to turn the call over to Michael P. Connors, who will be followed by Humberto Alfonso. Mike? Thank you, Barry, and good morning, everyone. Today, we will review our second quarter financial results, including our record profitability for the quarter, our record revenues and profits for the first half, our efficient use of cash in returning value to our shareholders in Q2, and our outlook for the third quarter. ISG delivered a solid operating performance in the second quarter, continuing our momentum and excellent start to the year. We generated revenues of $71 million, up 5% in constant currency over the prior year. We delivered record adjusted EBITDA of $11 million, up 20% in constant currency, and an EBITDA margin of 15%, up 140 basis points. Our recurring revenues continue to be robust, reaching a record $26 million in Q2, up 11%, driven by our GovernX platform and research businesses. Recurring revenues represented 37% of our firm revenues in the quarter, and that's an all-time high. From a geographic perspective, our Europe and Asia Pacific regions generated double-digit operating revenue growth. Our Americas business, excluding automation, remained strong overall, with growth in excess of 10%, driven by all things digital, including cybersecurity, 5G, and cloud transformation. With our ISG Next operating model continuing to drive a step change in our financials, our utilization for the second quarter was 76%, up 104 basis points compared with the second quarter last year. Now looking at our year-to-date performance, we delivered our best first half ever. Revenue was a record $143 million, up 9% in constant currency, with record EBITDA of over $21 million, up 25% in constant currency over last year. With more than $50 million of recurring revenues in the first half, we are well on our way to our year-end goal of $100 million. From a client perspective, we served nearly 550 clients in Q2, including 69 new to ISG. Clients continue to turn to ISG for our data, insights, advice, and solutions to help them on their digital transformation journeys. Efficient use of technology is a competitive advantage for our clients. That need is even more pronounced in today's environment, with its high inflation rates and talent shortages. With supply chain issues and consumer spending concerns, some clients are beginning to focus more on near-term cost savings. For these clients, ISG has a suite of services ready to help them with rapid cost takeout. No matter their needs, ISG is focused on helping our clients achieve operational excellence and faster growth over the long term. Now moving to shareholder returns. Due to our successful operating model, we were able to return nearly $9 million to our shareholders this quarter, comprised of $5.5 million in share repurchases and $3.4 million of dividends. We also reduced our debt by another $1 million during the quarter, driving our gross debt ratio to another new low. All this due to the strong cash generating power of our business. Now turning to our regions. The Americas delivered $39 million of revenue in the quarter, down 2% versus the prior year. As mentioned, excluding automation, the Americas delivered double-digit growth on the strength of our digital offerings, including cybersecurity, network and analytics. A word on our automation business. As you may recall from previous communication, we won a large automation contract with a major entertainment client early last year. That successful engagement was completed this year. The conclusion of this engagement had a negative impact on our year-over-year growth rate in the Americas this quarter, and it will have a similar negative impact in the $4 million range in Q3. This impact has been taken into account in our Q3 guidance. During Q2, we saw double-digit growth in our media, health sciences, and insurance industry verticals. Among our services, research and GovernX were also up double digits. Key client engagements during the second quarter included McKesson, Tenet Healthcare, PSE&G, and Exelon. During the quarter, we began work on a nearly $3 million engagement with a leading U.S.-based healthcare company. We are helping them digitally transform their entire technology estate, including applications, infrastructure, and cybersecurity. We are also working with a major industrial company on a $1 million human capital management engagement as they prepare for an upcoming spin-off. Turning to Europe, our Q2 revenues of $23 million were up 11% in constant currency over last year. For the quarter, Europe delivered double-digit revenue growth in our public sector, manufacturing and media industry verticals, and in our research and GovernX businesses. Key client engagements in Europe in the second quarter included Munich Re, Ericsson, TalkTalk, and Volkswagen. During the quarter, we continued to grow our business with a long-standing insurance client. We are working with them on a multimillion-dollar transformation engagement involving cybersecurity, cloud services, and a digital workplace strategy. Now turning to Asia Pacific. This region had a record-setting Q2 performance with revenues of $8 million, up 28% in constant currency, driven by growth in our insurance, media, public sector, consumer, and health sciences industry verticals. Key clients in the quarter included the Australian Taxation Office, HCF, Insurance Australia Group, and the Australian Department of Home Affairs. We continue to support the Australian government, serving as primary advisor on the government's large-scale technology infrastructure and telecommunications modernization programs. We're also ramping up a digital transformation engagement with a new client, an international logistics company being spun out and taken private. Now let me turn to guidance. At this point, we see the demand environment remaining strong and believe ISG is in great shape for a solid year of performance. We also remain mindful of the economic factors that could impact our clients, including inflation, supply chain disruptions, higher energy costs, geopolitical concerns, and talent shortages. Taking the current strong demand environment and balancing it with the potential impact of broader macroeconomic factors, for the third quarter, we are targeting revenues of between $71 million and $73 million, including a negative FX impact of approximately 400 basis points, and adjusted EBITDA between $10 million and $11 million. With that, let me turn the call over to Bert, who will summarize our financial results. Bert? Well, thank you, Mike, and good morning, everyone. As Mike mentioned, ISG continues to have momentum in the marketplace with a solid second quarter adding to our strong start to the year. Revenues for the second quarter were $70.7 million, up slightly on a reported basis and up 5% on a constant currency basis compared with the second quarter last year. Currency negatively impacted reported revenues by $3.5 million versus the prior year. The Americas reported revenues were $39.4 million, down 2% versus the prior year, impacted by the completion of a large automation engagement. In Europe, revenues were $23.3 million, down 2% and up 11% in constant currency. In Asia Pacific, revenues reached a record $8 million, up 22% reported and 28% in constant currency. Second quarter 2022 adjusted EBITDA was a record $10.7 million, up 10% from last year's, resulting in an EBITDA margin of 15% and up 140 basis points as compared with the prior year's second quarter. In constant currency, adjusted EBITDA was up 20%. Second quarter operating income increased 22% to $7.1 million, compared to $5.8 million in the prior year. Net income was very strong for the quarter at $5 million or $0.10 per fully diluted share, compared with net income of $4.1 million or $0.08 per fully diluted share in the prior year. Second quarter adjusted net income was $6.8 million or $0.13 per share on a fully diluted basis, compared with adjusted net income of $6.3 million or $0.12 per share diluted in the prior year's second quarter. Consulting utilization was a second quarter record of 76%, up 104 basis points versus the prior year, reflecting the impact of our ISG Next operating model. Headcount as of June 30, 2022 was 1,482, up 5.6% from Q1 as we invest for future growth. Our balance sheet continues to have the strength and flexibility to support our business over the long term. The quarter net cash provided by operations was $0.8 million, and we ended the quarter with $31.5 million of cash, down from $47.5 million at December 31, 2021. During the second quarter, ISG returned approximately $9 million to shareholders through the repurchase of 5.5 million shares and paid first and second quarter dividends totaling $3.4 million. Our next quarterly dividend will be payable September 19 to shareholders of record as of September 6. In addition, we paid down $1.1 million of debt, lowering our debt balance to $72.3 million and our debt-to-EBITDA ratio to 1.7x, a record low. Our average borrowing rate for the quarter was 2.43%, up from 2.15% last year, and we ended the quarter with 47.8 million shares outstanding, down from 48.2 million at the end of Q1. Mike will now share concluding remarks before we go to the Q&A. Back to you, Mike. Thank you, Bert. To summarize, ISG delivered another strong quarter, leading to our best first half ever, with overall revenues up 9% and EBITDA up 25% in constant currency for the half, both record performances. Our recurring revenues set a new quarterly record powered in particular by growing demand for our research and GovernX platform. Recurring now represents 37% of our total revenues, the highest share ever. Despite FX headwinds and other macroeconomic factors, we see our momentum continuing in the second half as clients continue to invest in digital transformation for cost savings and future growth. As always, we are focused on creating shareholder value for the long term, and we are steadfast in our mission to deliver operational excellence to our clients. Thank you very much for calling in this morning. Now let me turn the session over to the operator for your questions. Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question, and we'll pause for just a moment to allow everyone an opportunity to signal for questions. We will take our first question from Marc Riddick with Sidoti. Please go ahead. Hi, good morning. Hey, good morning, Marc. How are you? Very good. Yourself? Good. Thank you. Congratulations. The quarter looks really good. I was wondering if you could touch a little bit on a couple of the comments that you made, because we know historically that you know a lot of clients will engage with you as far as you know various ways of sort of moving forward. Sometimes it's you know revenue growth driven, sometimes it's cost savings driven. I was wondering if you could talk a little bit about the new customers that you. It was about 70, I believe, if I remember correctly. Can you talk a little bit about maybe what the mix of those new engagements were like, and were they kind of similar to what you've seen in prior quarters, or are you beginning to see some of that, you know, some folks coming in new who are looking to save on expense? Yeah. Good. Thanks, Marc. A good question. Actually, we are seeing an increase in the number of clients that are looking to get more, what I would call, cost optimization done quicker. I think it's likely in reaction to clearly the noise in the market regarding recession and inflation, and those kind of areas. Digital transformation still continues to be quite strong. As everybody knows, they continue to move on that, on that journey. I would say a number of the new clients are looking for more rapid cost takeout than maybe prior to what we've been hearing on inflation, et cetera. I would say just a couple of things on the existing client base. In areas like insurance, manufacturing, media, technology, health sciences, they are all still very strong on the digital transformation areas. That's everything from cloud to cyber to customer experience to analytics, if you will, data and analytics. You know, it varies a little bit by industry segment in terms of what is going on. I would definitely say it's a little bit of a mix in terms of the longer-term digital transformation with an influx on cost optimization, Marc. Well, I appreciate your commentary, and within it, you beat me to my next question, which was gonna be around the industry vertical, so I can move on to something else. I wanted to touch a little bit on the recurring revenue mix and maybe how we should think about what. I'm not sure if there's an optimal level, but maybe, you know, sort of maybe how you're viewing what that potential could be now versus maybe what you may have thought in years past. Yeah, no, look, first of all, we're very pleased with how the recurring revenue is being generated. That includes everything from our research to our software to the multiyear, you know, public sector contracts. I mean, we are now at the highest percentage of our revenue. I mean, clearly, we would love to have that number higher. I think I had set a target at the same time we set a target for $100 million of recurring revenue, which was two years ago, that we wanted 35% of our revenues in recurring. It is tracking that way, slightly ahead, as you know, by both the absolute number and the percentage number. As we close out this year and we think about the next couple of years, we will have a target on kind of what we're looking for on an absolute recurring number, and I would hope that we would begin to have that number look north. Right now, we want to achieve what we set out and said we would do, which is roughly 35% and $100 million of recurring revenue. We're on track for that, Marc. Okay. And then the last one for me, at least for now, maybe jump back in queue possibly. But I wanted to touch a little bit on the, you have another quarter where utilization is up year-over-year, adding, you know, the headcount addition was about 5%+. I was wondering if you could talk, you know, when you have both of those sort of moving up at the same time, that's a positive sign usually. I wanna talk a little bit about maybe what your thoughts were as far as headcount additions and then also maybe some technology spend between now and the end of the year. Thanks. Yeah. Okay. Well, first of all, on the productivity, clearly our new operating model, ISG Next, is working exceedingly well. It's allowing us to be more agile in meeting kinda client needs and supplying digital talent, you know, wherever it's needed, whether it's across borders or time zones. Number one, that model is working, I would say, extremely well. We're able to deliver our enterprise solutions faster, with more speed and frankly, more efficient to our client base. Just in terms of the mix of kind of how we're working today, remote, et cetera, you may recall when COVID hit, we went to nearly 100% remote from a model that was more 90% on-site. That number has crept up a bit, but not nearly as much as we anticipated during 2022. We anticipated that over the next two years, that model would look more like 65% remote, 35% on-site, as we think about 2022 and 2023. Right now, that number is more like 85% or slightly higher of remote working. So that is beating our model that we anticipated, and that is helping. On the, your second part of your question, was it on gross margins and SG&A? What was it? Also any you know technology spending you might need to do and that you're thinking about between now and the end of the year. Yeah, on CapEx. Did Humberto wanna take that one? Yeah. Our CapEx needs have not changed dramatically. They're slightly higher, and part of that was the Agreemint deal that we announced, I believe at the end of the first quarter. We continue to be in that sort of $2 million-$3 million range. CapEx needs continue to be modest. Obviously, we do continue to do work on GovernX and some of our other, you know, platforms. I wouldn't say there's any outsized growth on the CapEx side. Gross margin was a bright spot for us in the quarter. Certainly part of it is attributed to the two things that you've just been discussing. You know, continuing to have high utilization rates with our advisors as well as the increase in recurring, which has slightly better margins than other parts of our business. We're actually up, you know, about 270 basis points year-over-year on the gross margin basis and slightly below that on the first half. Good cost control. While we're adding to our headcount, it's a reflection of how we see the back half of the year. SG&A costs grew up slightly, but well below our increases and in our gross margins. We were pleased with that at the end of the quarter. Great. Thank you very much. Thanks, Marc. We'll take our next question from Vincent A. Colicchio with Barrington Research. Please go ahead. Yes. Good morning, Mike. Good morning, Vince. You'd mentioned the large deal in the Americas having an impact in the quarter. I'm curious, were there any other outsized impact from large deals in the other segments in the quarter? Similar question, going forward into Q3, will there be any large deals having an outsized impact, or is the kind of demand basically broad-based? Yeah, no. The answer is no, there is nothing else. Demand is broad-based. The automation engagement with that large entertainment client, which we announced to all of you early last year, is really the only one. It has about a $4 million impact in Q3 that will not be repeated. As we said, we've factored that into our guidance. We have factored in, you know, the FX headwinds, which we've estimated at about 400 basis points. That's how we've looked at it. The demand overall I'd call broad-based, Vince. Can you remind us of your acquisition priorities, what the pipeline looks like, and if there's any changes in you know, valuations in the market given the economic backdrop? Also, would your philosophy maybe if we have a significant economic you know, weakness here, if you'll be aggressive in that environment? Good question, Vince. Our focus on the acquisition front is really number one around all things digital. That would include cyber, customer experience, data, enterprise change, cloud, if you will. We're looking at, you know, all things digital, number one. Number two, kind of concurrent to that, you know, are things that we can add or that we could deploy as recurring revenues or annuity streams into the client channels that we currently have. Whether that's into procurement, whether that's into the CFO, whether that's into the CIO or CTO, that's kind of where our focus is on our kind of string of pearls acquisition strategy. As it relates to the market, you know, I would say that, you know, the market is still a bit choppy in terms of expectations. I would also say that if things softened a little bit, we might pounce faster, just as we did with our asset that we purchased during COVID in 2020. We are very active in the market. We're very disciplined, as you well know, in terms of pricing. We will take advantage if that market kind of swings a bit to our advantage. Okay. Thanks for answering that with great comprehensiveness. On the tax rate was lower than expected, I guess this one's for Bert. What was the cause of that? What should we think about tax rates for Q3 and for the year? Yeah, Vince, thanks for the question. We did have a tax rate that was a bit lower than what we anticipated in the second quarter. It was more of a profit mix, if you will. You know, despite the down 2%, we had higher profits in the Americas than in the other regions, particularly on a dollar basis, as you might imagine. You know, the recurring revenues being as high as they were, that also impacted that. Going forward, we are bringing down the rate to where we thought it might be earlier in the year. While we do think it'll be above more or less the 30% rate of the second quarter, we see the rates are in the mid- to sort of high 30s. We don't see as high a rate as we thought earlier in the year when we thought our mix would actually be going the other way in terms of the geographies. I would say, you know, those are the primary factors around the quarter and how you should think about modeling the back half of the year. Thank you, and nice quarter, guys. Thanks. Thanks. Thanks. We'll take our next question from Joe Gomes with Noble Capital. Please go ahead. Good morning. Thanks for taking the questions. Hey, Joe. Just on the revenue side, just wanna dive a little bit deeper into it. You had guided last quarter for a little bit more than what you ended up generating. I'm assuming you already knew about the automation contract. The little bit of a shortfall, was that really due to the fact that FX was, I think, 500 basis points versus your original estimate of 300? Yeah, there were two factors here, Joe. One is that, clearly the FX was 200 basis points higher than we had forecasted. To your point, it was 500, a bit over 500, and we had factored in 300. Second of all, I think the automation pipeline that we have, it is quite strong. In terms of having to execute anything of significant size against that pipeline did not materialize. It's just taking a bit longer on the automation front with the software players out there as well. Those are the two factors, FX being number one, in that regard. Is there, you know, anything particular as to why it's taking a little bit longer for that pipeline to be realized? I think the decisioning around software, and you can see this with some of the software providers like UiPath, which is public, Blue Prism, which just went from public to private, Automation Anywhere, NICE, et cetera. The length of time to make a decision that I wanna convert on scale, you know, it's different when prior, I would say, to 2022, when there was still a lot of dabbling around with a lot of the software in certain areas of major enterprises. Now they're moving to scale. When you move to scale, you're making a fairly long-term commitment on this automation software. We're seeing that decisioning process take longer, which is in parallel, if you will, with a lot of the software providers in terms of what they're seeing with their sales of software. That would be the difference in 2022 versus prior years, where everyone is now beginning to look to put scale in, and scale means a lot bigger investment. Okay. Thank you for that clarification. On the Agreemint acquisition, just wondering how the integration is going there. Are you seeing it open up any new opportunities that you weren't getting to previously? Yes, actually, we're very pleased with the integration. We've actually now, you know, going into another phase. The first 60 days or so was more about integrating the software and, you know, it is a component of how we think about GovernX and other applications that we have. We are actually in test with two clients at this stage. One which was one of the original thoughts which we had, which went into the decision. We're quite pleased. Peter Bray, who joined us, one of the founders, is doing excellent work with us. We're beyond the first phase of bringing the software in, and now we're more in a deploy mode. It is incremental, if I could call it that, to you know, to the Governance platform that we put into the marketplace today. We're quite pleased with how it's turning out. Okay. On the cash levels, you know, you've been doing a great job, obviously. Last year, generated a lot of cash. You know, this year been returning a bunch of cash to shareholders. Kind of, you know, what level are you comfortable with? Cash, I think, hit a high of about $54 million at the end of the third quarter last year, the end of this quarter at $31.5 million. If you're looking potentially for acquisitions, still returning cash, you know, just kind of walk us through how you see what kind of cash level you'd really be comfortable with. Yeah, that's actually a very good question, and we've been having a lot of discussions about that internally. As you know, and if there is a more significant downturn, we certainly would wanna have a better cash cushion, if you will, which would make a lot of sense for us. If you look at where we were about a year ago, at $47 million, I know we did hit a peak in the 50s. There are a couple one-timers in there, particularly on the tax side. You know, we already talked about the return to shareholders at about $9 million. We paid down some debt, about $1 million there. We've talked in the past about the deferral of taxes in the EMEA region, in Germany in particular, where the 2020 taxes were deferred. They allowed firms to defer those taxes and not pay them. We recently, in the second quarter, paid about $7 million of cash taxes, that was 2020 and 2021. We don't expect that obviously would not expect that to repeat, because it was two years in one, which is an unusual thing around COVID. You know, what I would say is we're a little bit ahead probably with respect to just offsetting dilution. You saw where our shares are down about 400,000. We're a little more aggressive in the quarter when we saw the shares at what we thought was a lower intrinsic value during the quarter. We've since had, obviously, some recovery. We're very conscious of the you know, the cash needs we have going forward. We think all of the components continue to stay in place, whether it's the dividend or the buyback, or you know, obviously the debt pay down, which is not a big number, and anything we might do on the M&A side. You know, we have a revolver, obviously, which is $50 million plus that we could still draw upon. We're conscious of this, if market turns down, that we probably would hold a little bit more cash. Right now, we're pretty comfortable with the levels that we have. Okay. Just one follow-up for me. I heard the 69 new clients. I missed how many clients you served in total in the quarter. Yeah. Let me get that number for you. 5:50. 550. Is that the number? 550 is the number, Joe. Okay. That's what I thought, but I wasn't positive. Yeah. Thanks again. Really nice quarter. I'll get back in queue. Okay, Joe. Thank you. Thanks, Joe. We'll take our next question from Marco Rodriguez with Stonegate Capital. Please go ahead. Good morning, guys. Thank you for taking my questions. Hey, good morning, Marco. Hey, I was wondering maybe if you could spend a little bit of time on Europe. I'm just kinda curious. I know you've had some comments in terms of where you're seeing some strengths and what you're trying to balance in terms of your guidance. Maybe if you can provide a little color on the conversations you're having with the end customers in Europe. I mean, how are they feeling as far as their confidence levels in the second half of the year? Just kinda given, you know, the weakening economic picture that Europe is somewhat moving towards and the potential for, you know, an energy crisis that may come this winter. You know, good question, Marco. Here's what we're seeing in Europe, first of all, in terms of kind of verticals. Manufacturing is up. You may recall last year manufacturing was quite soft in Europe. We've seen an uptick in manufacturing in Europe. We've seen an uptick in digital transformation among the large insurance players in Europe. As you know, there's a number of them based in Europe, so that is also pretty robust in terms of what they are doing around cloud, around cyber, around customer experience, around digitizing their user experience with clients. All of that I think is positive in Europe. I would say, though, if we think about Europe, the one area we keep a very close eye on, of course, is Germany, in terms of how they are responding with the whole Ukraine situation. I think I'd mentioned in the past that, you know, in some ways with the Ukraine situation, with talent shortages among clients, hard to get and recruit people, that plays a little bit to our advantage. And by that I mean that, we are a steady force for our enterprise clients. We're a trusted advisor. We have talent in all of those digital transformation areas. Maybe in instances where they might have tried to bring people in and do it internally without a third party like ISG, this market is enabling us to take a little bit of advantage of that situation, and especially in Europe because there's such a long period of time between people leaving one job and moving to the next. That's how we would look at the European theater right now. Of course, we're cautious. We know about the FX. From an operating standpoint, we feel pretty good about the whole European theater, and clearly they're having a very, very good year so far. Got it. Very helpful. Thinking about North America, maybe, Mike, if you can talk a little bit about what sort of surprises, whether positive or negative, you're seeing from the demand side. On the Americas, on the U.S., let me just put automation to one side, it is very good. The demand is good. Cloud, network, analytics, 5G, software, if you will, all of those areas are still quite robust in the U.S. Those, there's still quite a large demand for this digital transformation work. Different industry segments are at different points along the continuum there. We feel very good about how the U.S. has operated, and we expect that to continue. Automation is the only area that really has just a tough compare with that large entertainment client. Putting that aside, you know, cloud migration, cyber, next gen, if you will, applications, as clients begin to try to simplify the number of applications they have, that plays right into our application modernization of applications, if you will. All of those things, plus our kind of workplace collaboration, workplace of the future type of work, all has played very well into our solution set. Got it. And then, just in terms of your operating structure, the expense side, you know, obviously you heard some improvements in efficiency. The new ISG Next model is definitely helping in terms of improving profitability, improving your margin. But just kinda looking at some of the absolute costs, year-over-year on your SG&A and your direct costs, for your advisors, it seems lower year-over-year, and that's a little bit different than maybe perhaps what might be expected just kinda given the inflationary environment. Can you maybe talk a little bit about those expense structures and what are some of the major drivers behind that look? Yeah. Look, you know, I'd mentioned earlier the gross margin, which I'd, you know, I thought was a real standout in the second quarter. And you know, the components are the ones we talk about. Our utilization rates continue to be in the mid-70s. We're actually at 79 in the first quarter, which we said was likely not a number that we would stay at on a constant basis. But to the extent that our model remains in place and we have that flexibility to move talent around the globe remotely, sure, you know, as we bring in new talent, you know, we're paying the market prices, so it's a little bit higher. But we continue to generate efficiencies on the SG&A side. We have good cost control. You know, our finance and HR costs are quite steady. It's not an area where we need to add talent, frankly. We're very pleased where we are. We think that, you know, with our SG&A at 15%, which are nearing where we said we wanna be at the end of the year, before we reassess, it's an area of the business that continues to operate quite efficiently, both at the advisory side as well as sort of the back office side. You know, not to mention that, you know, we all know that, you know, we have a large contingent of our workforce, which is Bangalore-based in India. When, you know, we talk about the increases to 1,482, about half of those would be in India. We continue to have good labor arbitrage. It's something that we focus on a daily basis, so we don't take that for granted because there is a lot of inflation in the marketplace. For the moment, you know, we feel that that's manageable within the profitability projections that we have in place. Great. Thanks a lot, guys. I really appreciate your time. Thanks. Thanks, Marco. Thank you. I'll take our next question from Vincent Colicchio with Barrington Research. Please go ahead. Yeah. What was the contribution of Agreemint in the quarter? We don't break out that revenue, but think about it as part of GovernX, and GovernX was up double digits in the quarter. Okay. How should we think about geos in Q3? Which should grow most rapidly year-over-year? I think you're gonna see Europe looking strong in third quarter. When you talk about how call it headline growth, it's probably Europe, Asia, Pacific, Americas, in that order, only because of the automation bit. If you take the automation out, then the U.S. and Europe are both gonna grow nicely. Yeah. I think, you know, we'll see normalization in Q4, right? We're not. The automation thing is very much a Q2, Q3 issue for us. Should Americas lead in Q4 year-over-year? I don't wanna predict that 'cause then we'll have competing forces between our regions. They both should perform quite well then. Okay. Thanks for answering my questions. Yeah. Thanks. Thanks. It appears there are no additional questions at this time. Okay. Well, let me thank you, Operator. Let me close by thanking all of our professionals worldwide for their dedication to our clients for working together as a global team to achieve what was clearly a record first half performance for ISG. I know our people have a passion for delivering the best advice and support to our clients as they continue their digital journeys, and I could not be prouder of them. Thanks to all of you on the call today for your continued support and confidence in our firm. Have a great rest of the day. This concludes today's call. Thank you for your participation. You may now disconnect.