Good day, and thank you for standing by. Welcome to Perficient Q2 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask the question during the session, you will need to press star one one on your telephone. I would now like to hand the conference over to your speaker for today, Jeff Davis, Chairman and CEO. You may begin. Thank you, and welcome everybody. Appreciate your time. With me on the call today is Paul Martin, our CFO, and Tom Hogan, our President and COO. We have 10-15 minutes of prepared comments per usual, after which we'll open up the call for Q&A. Before we proceed, Paul, would you please read the safe harbor statement? Thanks, Jeff, and good morning, everyone. Some of the things we will discuss in today's call concerning future company performance will be forward-looking statements within the meaning of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements, and we encourage you to refer to the additional information contained in our SEC filings concerning factors that could cause those results to be different than contemplated in today's discussion. At times during this call, we will refer to adjusted EPS and adjusted EBITDA. Our earnings press release, including a reconciliation of certain non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles or GAAP, is posted on our website at www.perficient.com. We have also posted a slide deck which includes a reconciliation of certain non-GAAP guidance to the most directly comparable financial measures prepared in accordance with GAAP on our website under Investor Relations. Jeff? Thanks, Paul, and once again, we appreciate your time this morning as we discuss our second quarter performance and continued growth, as well as our optimism for the remainder of the year. Adjusted earnings per share was up 26% during the period, with revenue up 21%. North American average bill rates remained at an all-time high, and offshore rates increased by double digits. While there are always project cancellations and delays, there were more than a normal number in the quarter. In evaluating each of these, we are confident they are isolated incidents, and we do not believe them to be indicative of any broader trends. These events, combined with an accelerated shift to offshore, modestly impacted revenue in the quarter. In fact, our bookings and pipeline remained robust with the quarter up more than 40% versus the prior year period. Let me repeat that. Q2 bookings were up 40% organically versus the prior year period, representing also an all-time high for Q2 bookings. Q3 is also off to a great start. July was an incredible month for bookings. Just last week, we closed more than $55 million of bookings in a single day at a single client. We continue to pursue nearly 200 seven-figure-plus opportunities and a number of deals well into eight figures. Organic offshore revenue grew 44% in the quarter, and offshore revenue grew 93% overall. Our fully integrated global delivery model continues to resonate with clients who value the combination of our local and global reach. Offshore ABR reached an all-time high, as I mentioned before, in double-digit range, and, as did the percentage of revenue delivered by our non-U.S. colleagues. We're delivering more and more revenue offshore, which again, as I alluded to earlier, had some impact on the top line revenue in the quarter. We continue to scale in both Latin America and India. We recently opened a new office in Argentina and increased our office space by nearly 60% in India, expanding into new territory in Hyderabad and Pune, adding satellite offices in both Chennai and Bangalore, and adding space to our facility in Nagpur. Industry analysts and partners continue to recognize us for our capabilities and expertise. In fact, recently, Forrester named Perficient a strong performer in the Modern Application Development Service Provider Wave. Just this week, our enterprise partner, Sitecore, awarded us with their Sales Excellence Award. A solid quarter of continued growth. With that, I'm going to turn things over to Paul for more details on the numbers. Paul? Thanks, Jeff. Services revenue, excluding reimbursable expenses for the quarter, was $219.8 million, a 21.3% increase over the prior year. Year-over-year organic services revenue growth was 14.1%. Services gross margin, excluding reimbursed expenses and stock comp, was 40% for the second quarter, compared to 40.2% in the second quarter of 2021. SG&A expense was $40.9 million for the second quarter of 2022, compared to $37.4 million in the prior year. SG&A expense, as a percentage of revenue, decreased to 18.3% from 20.3% in the second quarter of 2021. Adjusted EBITDA for the second quarter of 2022 was $51.2 million, or 23% of revenues, compared to $39 million, or 21.2% of revenues, for the second quarter of 2021. The second quarter of 2022 included amortization of $6 million, compared to $6.3 million in the prior year period. The decrease in amortization is primarily due to certain intangibles from our acquisitions becoming fully amortized. Net interest expense for the second quarter of 2022 decreased to $0.8 million from $3.4 million in the prior year, primarily as a result of adopting a new accounting standard for convertible debt in the first quarter of 2022. Our effective tax rate was 28% for the three months ended June 30th, 2022, compared to 27% in the comparable prior year quarter. Net income increased 67.6% to $27.8 million for the second quarter of 2022 from $16.6 million in the second quarter of 2021, primarily as a result of higher revenues and lower SG&A as a percentage of revenue. Diluted GAAP earnings per share increased to $0.77 a share for the second quarter of 2022 from $0.49 in the second quarter of 2021. Adjusted earnings per share increased to $1.06 for the second quarter of 2022 from $0.84 in the second quarter of 2021. You can see the press release for a full reconciliation between GAAP and adjusted earnings. I'll now turn to the year-to-date results. Services revenue, excluding reimbursable expenses, were $439.3 million for the six months ended June 30, 2022, a 26.4% increase over the comparable prior year period. Year-over-year organic growth for services was 18.4%. Gross margin for the six months ended June 30, 2022 increased 10 basis points to 38.1% compared to the prior year period. SG&A expense was $83.1 million compared to $71.4 million in the comparable prior year period, and SG&A expense as a percentage of revenues decreased to 18.7% from 20.2% in the six months ended June 30, 2021. Adjusted EBITDA for the six months ended June 30, 2022 was $98.5 million, or 22.1% of revenues, compared to $73.6 million or 20.8% of revenues in the comparable prior year period. The six months ended June 30, 2022 included amortization of $12 million compared to $13.4 million in the comparable prior year period. Net interest expense for the six months ended June 30, 2022 decreased to $1.7 million from $6.7 million in the comparable prior year period, again, primarily as a result of adopting the new accounting standard for convertible debt in the first quarter of 2022. Our effective tax rate was 23.3% for the six months compared to 23.6% for the comparable prior year period. Net income for the six months ended June 30, 2022 was $54.9 million compared to $30.2 million in the comparable prior year period, primarily as a result of higher revenues and lower SG&A as a percent of revenues. Diluted GAAP earnings per share increased to $1.52 for the six months ended June 30, 2022 compared to $0.09 for the prior year period. Adjusted earnings per share increased to $2.03 for the six months ended June 30, 2022 from $1.58 in the comparable prior year period. Our ending billable headcount at June 30, 2022 was 5,810, including 5,455 billable consultants and 355 subcontractors. Ending SG&A headcount at June 30 was 937. Our outstanding debt, net of deferred issuance costs, as of June 30, 2022 was $393.5 million. We also had $38.9 million in cash and cash equivalents as of June 30, 2022, and $199.8 million of unused borrowing capacity on our credit facility. Our balance sheet continuously was very well positioned to execute against our strategic plan. I'll now turn the call over to Tom Hogan for a little commentary behind the metrics. Tom? Thank you, Paul, and good morning, everybody. As Jeff mentioned, bookings momentum continued during the second quarter, and the third quarter is off to a very fast start. Historically, we've classified large deals as those worth $500,000 or more, and we've shared our progress each quarter winning work in that range. Given our success and scale, we now feel $1 million and greater is a more appropriate framework, so we'll be sharing those results moving forward. Of course, at some point in the future, we'll reach a place where it makes sense to again adjust higher. We booked 45 deals greater than $1 million during the second quarter of 2022, which compares to 28 in the second quarter of 2021. Again, we booked 45 deals greater than $1 million during the second quarter compared to 28 in the second quarter of 2021. In addition to that large deal volume growth of greater than 50%, the average deal size was up as well. A couple of Q2 highlights I wanted to share. We're building on a long-term partnership with a global health services and insurance company. We recently secured a multiyear, eight-figure deal, one of the largest in our company's history, positioning Perficient as the trusted partner for healthcare data and analytics modernization. Our multi-shore team will work across several technology stacks to build a platform that provides the company with better financial data, accurate financial transactions, enhanced reporting capabilities. Not only are our global teams contributing to many of our largest accounts, they're also generating meaningful bookings. Our Latin America sales team recently pursued and won a seven-figure project providing managed services to a pharmacy benefit management healthcare provider. Our team will work with the provider to run all IT operations for their end client. This work will include software development, testing, and support services for the end client's core systems and custom service applications. We continue to remain well-diversified from a customer, industry, and platform perspective. During the quarter, healthcare remained solid, and the financial services, automotive, energy, and utility verticals continued to demonstrate strong performance from a revenue and booking perspective. We continue to land new enterprise clients and expand in existing accounts. We remain focused on investing in development of our internal systems and applications that enable us to scale more rapidly and create competitive advantages. We spoke on the Q4 and year-end calls about our investment in Compass, a custom-developed proprietary tool that provides our business and project leaders with incredibly detailed project performance metrics, including real-time project profitability data as granular as the margins associated with an individual's contribution to particular work streams. The tool also surfaces client insights, budget burn dashboards, and even resource availability that ensures we're maximizing utilization across the world. We continue to add functionality to the tool that can further enable leaders to manage current and upcoming projects. We added alerts for senior leaders when project or client performance metrics cross key thresholds, allowing us to proactively respond and improve financial outcomes. For project leaders, we made additional enhancements to further centralize project administrative tasks into one tool, freeing them to spend more time working directly with our clients. Future innovation will include additional standardized reports and scale and certification management, which will make it easier to identify ideal resources for specific project tasks at scales as we continue to grow globally. With that, I'll turn things back to Jeff to discuss the third quarter and our remainder of 2022. Thanks, Tom. Perficient expects its third quarter 2022 revenue to be in the range of $227 million-$233 million. Third quarter GAAP earnings per share is expected to be in the range of $0.75-$0.78. Third quarter adjusted earnings per share is expected to be in the range of $1.08-$1.12. We expect full year 2022 revenue to be in the range of $907 million-$923 million. We're reaffirming our 2022 GAAP earnings per share range of $3.08-$3.19, and reaffirming our 2022 adjusted earnings per share range of $4.24-$4.36. Let me just comment that the adjustment that we're making in top line revenue reflects what I mentioned earlier, which were a couple of cancellations above the norm, but also a material impact of our accelerated shift to offshore, which actually is a positive. It's actually enhancing margins, which, of course, is what's enabling us to reaffirm earnings, even while adjusting revenue somewhat down. With that, we'll open up the call for questions, operator. Thank you. As a reminder to ask the question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from the line of Maggie Nolan with William Blair. Your line is open. Hi. Thank you. A lot of good details here on how you're feeling about Q3 and the large deals. I have to ask on the cancellations, just a little bit more info on what are the circumstances there. What gives you confidence that they're isolated rather than indicative of a trend? Did they involve any maybe, like, top ten clients or hit any particular verticals? You know, that's one of the reasons that we're pretty confident or quite confident actually, that it's not a trend. It was not isolated to any particular industry. As we looked at each of them, again, in isolation, it was really a function of shifting business priorities or business conditions which weren't macro related. Again, this is a nature of the beast in this industry. It happens. It was unusual in terms of the number that we had in the quarter. Okay. Understood. On the offshore impact to revenue, you know, good to see that that's a positive for profitability and that you reaffirmed bottom line guidance. But I'm curious, is that accelerated move driven by client preferences or requests, or was it a matter of, you know, trying to absorb the amount that you had planned in the face of some of these cancellations? It's really more a function of the market, and it's not so it is client preference, but a lot of it is, you know, represents what would be incremental revenue to us. What I was really specifically referring to, and I'll be very specific, we exceeded our forecast for offshore revenue in the quarter by, you know, more than $1 million. If you translate that back to U.S. revenue, it's about a $4 million difference, right? It's a 4:1 ratio on the rate. We're seeing that trend continue through the year. Again, in addition to the cancellations, that's some of the reason that we or a material component of the reason that we're adjusting revenue. Again, it did have some impact in the quarter. Okay. Thanks so much. Thanks, Maggie. Thank you. Please stand by for our next question. Our next question comes from the line of Mayank Tandon with Needham & Company. Your line is open. Thank you. Good morning. Jeff, I wanted to just get maybe a broader sense of demand. Clearly, the bookings are positive, and that's a good sign for the back half of the year. But given the economic uncertainty, and obviously you've lived through some trying times for the economy before, how is this different, if at all, in terms of client decision-making and client priorities, as you look over the next six months and beyond? You know, I would say the current climate remains robust. We certainly don't want any surprises going forward, so we've put what we believe is a pretty conservative guidance out there. You know, to also, again, reflect the things I mentioned earlier, but also reflect, you know, some of the volatility that exists. However, having said that, we don't believe these recent events are related to macro. The activity in the pipeline remains very robust from what we see right now. To your point, you know, everybody in this industry has seen ups and downs, and so the climate can change quickly. I would say right now, you know, I'm more confident than ever in terms of what we're seeing right in front of us, which is the pipeline and the bookings that we've already locked in. Got it. Turning to the supply side, I just wanna get a sense of how are you navigating the cost pressures. I'm sure, like everyone in the industry, you're probably seeing some incremental wage inflation impact. Are you able to pass on these higher costs to your clients through price increases? Are there other levers you can pull beyond the offshore mix to help protect margins and earnings? Actually we are. You know, the... I mentioned earlier that ABR for North America was actually up, as well as substantially up offshore. Both of those increases, which I'm not gonna disclose for proprietary reasons specifically, but both of those increases exceeded our cost increases, at least modestly. We're having great success in terms of passing that on. It's the climate we're in. Clients understand it, particularly new engagements and new clients, we have a lot of pricing control on that. And like I said, they're pretty reasonable and understanding. In terms of you know, additional capacity and other ideas, we're bringing in the largest... We've already begun to and will continue to bring in the largest campus recruiting groups that we ever have in our history. That's a relief area in terms of capacity. Very exciting to get this new fresh blood in as well. It's great to see these guys and gals. Then also our Bright Paths program where we, you know, we're serving or pursuing underserved constituents and getting them in here as well. Those are a couple of areas that, you know, that we're leveraging. I'll, you know, reiterate, you mentioned it, but, you know, offshore is going extremely well. Very well received. When I say offshore, I'm lumping nearshore into that. We're seeing a tremendous amount of demand in both Asia, specifically India, as well as Latin. Oh, just. Sorry, Jeff, one housekeeping item. I think you addressed this in response to Maggie's question, but what is the breakdown between the guidance adjustment for the cancellations versus the offshore revenue mix shift? If you could just give that detail, that would be helpful. Thank you. Sure. I don't have the specific numbers in front of me, but I would estimate it's about 50/50. Got it. Thank you. Thanks, Mayank. Thank you. Please stand by for our next question. Our next question comes from the line of Brian Kinstlinger with Alliance Global. Your line is open. Hi. Thanks for taking my questions, guys. I know for North American billable headcount, quarter end was lower than the average for the quarter, which is unusual for a growing company like Perficient is, and it's actually unusual for Perficient in general for the last several years. With your growing revenue, I'm curious, in addition with bookings up 40%, what's behind that? Is it involuntary? Is it voluntary? Maybe some details would help. Thanks. Yeah, sure, Brian. It's a combination of both. There was also a function of us allowing attrition, both voluntary and involuntary, to adjust the headcount to reflect those cancellations that we've been talking about. As you pointed out, that's North America. We've continued to add headcount at a very accelerated pace for both offshore and nearshore. You know, it's. Again, a lot of it's the shift that we're experiencing. Hiring in North America has picked back up in this current quarter, I assume. That's likely. Yeah, that's likely. Yeah. My other question, I'm sure everyone's gonna focus on the top line, given the commentary on the guidance. In the second quarter, again, in the many years I've covered Perficient, especially as you invest in growth, I've rarely seen cash SG&A decline as much as it did sequentially in the second quarter versus the first quarter. Was there a one-time benefit? Was there some cost-cutting? Just maybe, some detail behind that. Thanks so much. Yeah. There were a number of areas where we cut costs, to your point. Obviously, we continue to enjoy scale. Q1 tends to be a seasonally high expense quarter. Of course, a component of that based on the Q2 results is tied to bonus accrual. That was substantially down from the first quarter. Great. Thank you so much. Thanks, Brian. Thank you. Please stand by for our next question. Our next question comes from the line of Surinder Thind with Jefferies. Your line is open. Thank you. Jeff, can you please elaborate on the comment about the client preferences for offshore? It's obviously been a secular theme for a while. Is it accelerating at this point, or is there anything where you're getting a sense that there's client concerns around costs and budgets, and that's maybe perhaps driving a little bit more sensitivity to how they want their global delivery? You know, I think it's really us taking share more than anything. Certainly in this climate that it's been this way for a long time, you've made this point, where clients are always looking for more for less, right? I would too. That's a factor, and it's been there for a while. You know, it's a space that we really didn't have the critical mass to go and pursue aggressively, and we do now. A lot of it is, you know, our own strategy that's driving it and taking share away from others that would normally have gotten that work. When I talk about that work, I mean, you know, combined onshore, offshore, with a significant offshore component. It's a blend of the two. You know, we're not necessarily competing against guys that do everything offshore, which is why our rates and margins are substantially better. It's a blend of the two, and that blend is increasing on the offshore side. Got it. Then just following up on the question about the cancellations. I realize it's been asked in a few different ways, but it sounded like there wasn't a pattern, whether it was industry, but anything to do with maybe the types of projects that the clients were thinking or client durations, or was it truly just everyone was literally unique to, you know, internal client reorganizations? Put another way, is that potentially a theme where, again, if we have a deteriorating economic environment, we may see more internal deliberations of clients that may potentially impact work? Yeah, it really was shifting priorities. It was businesses that might be struggling on their own, but again, not a trend for their industry, as an example. Frankly, you know, one of it is, you know, one or two of them, I should say at least one of these, you know, sometimes is the case, the regime change. With that come new priorities and often new partners. Some of it's that. Like I said, if you take each one and its story in isolation, you won't be able to put any correlation together among them. Got it. A final question here on the revision to the metrics on the deal size. Any color on what the metric would be under the old methodology of project sizes greater than $500,000? Yes. If you look at the over $500,000, we did 107 in the second quarter, and that compares to 75 in the second quarter of last year. Thank you. In terms of just further breakdown of that number, obviously, where does kind of the breakpoint start to move at this point? Is it $2 million? Is it $5 million-dollar projects? I know that in the past you've talked about, you know, potentially even pursuing eight-figure projects, but any kind of sense of the distribution of the deals that are greater than $1 million here? Yeah, I think, let me have a look here. We have the $1 million+ deals making up about 50% of our revenue, and that's, you know, up substantially from 40% a year ago. Okay, got it. Thank you. Yep. Thank you. Please stand by for our next question. Our next question comes from the line of Jonathan Lee with Morgan Stanley. Your line is open. Hey, guys. Thanks for taking my questions. Have you seen any notable changes to engagement type over the course of the quarter, whether that's, you know, because of shifting delivery or macro-related concerns? Any sort of color there would be helpful. Yeah. Not much beyond what we talked about. I mean, if anything, it's improved throughout the quarter. If you look at bookings, right, and the types of projects, their size and duration, complexity, all are increasing. I think that's a function of our building brand. A lot of those are with repeat customers. You know, much of our revenue comes from repeat customers, which I think is a testament to our quality delivery, and them having more confidence and faith in giving us more business and then letting us take on larger and more complex engagements. That said, we've got a lot of new engagements that are starting at a higher level. You know, the way this business works, and always has, is often in a new relationship, you start pretty small and build from there as you gain trust. We're actually seeing clients willing, I think because of reputation and brand and things like that, willing to bite off a bigger chunk out of the gate. That's helping move up the average as well. Got it. That's helpful color. Look, historically, you've been very acquisitive. You know, any sort of update as to how you're thinking about future acquisitions? Sort of what are you looking for in these acquisitions, and what's the current landscape or pipeline like for targets? Yeah. You know, sort of all things digital, of course, as we, you know, as we move our focus more and more almost exclusively to that in terms of our revenue base. We also really like the nearshore. That's worked extremely well for us as the offshore continues to. We're gonna continue to look for things that are digital that also have that component. That isn't to say we wouldn't do something that was North American only, but we like the combination, and we like that back end for sure. We're pretty optimistic. It's been a while since we've gotten a deal done. We've been in a lot of discussions, a lot of talks, and we are in later stages now, with a couple of firms. We're optimistic that we'll have a deal done here, probably in this quarter, and perhaps another one before the end of the year, behind that, possibly even two more. Thanks for the color, guys. Thank you. Thank you. One moment for our next question. Our next question comes from the line of Puneet Jain with JP Morgan. Your line is open. Hey, thanks for taking my question. A question on margins for this year, given higher offshore, potentially higher offshore and with a further expansion into Argentina, India, what should we expect for margins like this year, EBITDA margins for this year or maybe for next year? Like, can you remind us the sensitivity, margin sensitivity with increase in offshore mix? Yeah. If you look at the, you know, the guidance that we reaffirmed, that's gonna point to probably about 150 basis points or more of adjusted EBITDA expansion. You know, we've got a serious opportunity there that will continue for some time in terms of the scale, particularly obviously in SG&A. In terms of gross margin, I've said for some time we're gonna hold it intentionally, strategically at around 40%, low 40%s, because we wanna stay as competitive as possible. We're a little more concerned about growing the top line than we are necessarily expanding gross margins. Again, that said, even holding gross margins flat, we do have an opportunity to continue to expand EBITDA. I do think, however, that gross margin can and will expand gradually. You know, in the face of wage inflation and everything else, we're applying some of that additional margin on a location basis, to your point, more to pricing and more to the wage increase. Got you. Second, like, Jeff, like if you take a step back, like look at the business, like you are a lot more globally distributed in delivery now. The projects that you are trying to pursue are larger than what they used to be before. Is there like a risk or rather like, maybe not risk. Is there a consideration about project management, like, or contract management? Like a few years ago, I think you talked about Insight platform, a proprietary platform for project management, internal project management. Is that something that you need to pay more attention to as you become larger, as you become more distributed and service global customers? Yeah, most definitely. I'm not sure if you made the early part of the call in the prepared statements, but Tom covered what we're referring to as Compass or what is our internal proprietary tool that is custom called Compass that does exactly what you described. It's a tool that management can use to not only allocate resources and make sure we've got the right people aligned with the right opportunities, but also monitor in real time the performance of any given project in terms of financial as well as progress. You're right. You know, it is important to scale the entire business, including the infrastructure, not just headcount, and we're doing that with Compass. Got you. Thank you. Thank you. Please stand by for our next question. Our next question comes from the line of Vincent Colicchio with Barrington Research. Your line is open. Yes, Jeff. I'm curious on the healthcare and financial services verticals, which have been mainstays for the company in terms of growth. They were down sequentially. Should we expect a rebound in the near future? Yeah, absolutely. Both of those are actually very healthy. You know, I make no secret, we've talked about, you know, Kaiser Permanente for a long time. We did $30-some-odd million in business with them last year. I've mentioned for a long time that we're exiting that account, and that's gonna be down to single digits this year. Some of the sort of at least year-over-year basis is coming from just that account. At the same time, we're adding more and more and growing the existing ones we have, so we still continue to see robust demand in healthcare. Super excited about financial services. I mean, you're gonna see us, I think increase that obviously absolutely, but also relatively, going forward, where we've finally gotten to the point where we've penetrated more of the technology side. We've done a lot of management consulting over the years in that space, but have been underrepresented on the technology piece, which we're gaining a lot of traction with right now and starting up a lot of new accounts and new engagements in existing accounts. I think you'll see that move the meter, you know, pretty substantially material here by the end of the year. Any thoughts on the changes in Colombia's government, any impact they may have on the business? You know, there, you know. Any thoughts on the changes in Colombia's government, any impact they may have on the business? You know, you know, I have some concern, 'cause you never know in those situations. I think the individual, you know, has a reputation of, you know, maybe not being the most, maybe U.S. friendly. However, you know, I was at least pleased that now he's maybe U.S. friendly. However, you know, I was at least pleased that now he's saying and, you know, shortly after the election, he's, you know, announced that he wants a good relationship with the U.S. you know, we'll just have to see how it goes and take it as it comes. Right now, from what we understand in talking to the folks that live there, of course, and understand the climate better than I do, they're pretty optimistic. One thing I'd add there, Vince, is, you know, we did the Overactive acquisition last fall, which essentially broadened our delivery capability in Latin America. As Jeff said on the M&A front, you know, if we do something in Latin America, we would likely again further reduce our dependence on Colombia. One macro question. I think I know the answer, but any easing in wage inflation in any of your geographies? You know, I would say it's been surprisingly manageable. You know, it's definitely increased, but not as much as you'd think given the you know, the lack of supply, right? A lot of these folks are I guess Gen Z not necessarily motivated just by money. Of course, everybody needs to make a good living and that's an important sort of yardstick for where you are in your career. There are other factors that come into that. I think we're seeing that come into play. We're you know, I think very competitive on both wage increases as well as new hire wages. We're faring well in terms of you know, landing new people. I feel like we've got it at the right level, and right now it's very manageable. as I said before, our rates are actually slightly ahead of it. Thanks for answering my questions. Thanks, Vince. Thank you. Please stand by for our next question. Our next question comes from the line of Jack Vander Aarde with Maxim Group. Your line is open. Great. Good morning. Thanks for taking my questions. Jeff, good to see the EPS guidance range maintained for the year despite the lower revenue guide. I know you mentioned contract cancellations and offshore mix shifts as factors. Was there any other impact maybe from currency fluctuations, stronger dollar, maybe delays in large projects or just maybe a greater uncertainty of the timing of large projects? How much did that play a role? That's a good question. You know, we have FX pretty largely hedged, so it doesn't play much of a factor in reality. Of course, most of our revenue is, you know, North American revenue, so it's really more on the cost side. Again, we have that mostly hedged, and we'll continue to do that as we continue the expansion, obviously in the offshore and nearshore. Okay, great. Maybe just in terms of organic growth, and maybe Paul can help here too. Any chance you can share what the overall organic growth rate was in the second quarter? And then the implied, if you can, organic growth for the third quarter guidance and the 2022 rev guide. Sure, yeah. The organic growth for Q2 was 14%, and the guide is 11.5%-14.5% in Q3 and 14%-16% for the year. Okay, great. Thank you. That's it for me, guys. Thank you. Thank you. Thank you. Please stand by for our next question. Our next question comes from the line of Divya Goyal with Scotiabank. Your line is open. Good morning, everyone. I have a specific question on the guidance for the year. You did cut the guidance down by approximately $10 million-$20 million, but you continued to maintain your EPS guidance. Do we anticipate material cost-cutting here, or is it due to the offshoring is why you see that benefit? It's mostly offshore. We're not, you know, we're not aggressively cutting any costs. We always try to manage costs carefully. In fact, we're actually making, you know, investments with, you know, obviously baked into that guidance, above and beyond what we've done, you know, in most recent years, I would say. It's more, it's a little bit of a bonus reduction, but mostly it's scale. That's great. On that same topic, could you talk to us a little bit about your expansion across India? Currently all these offshore locations are your cost bases, but do you see them becoming revenue bases eventually as you continue to expand your presence there? Sure. Yes. Yeah, we're gonna continue to expand. I think we see the market primarily as delivery centers for U.S. customers. The acquisitions that we did in Latin America, we do a modest amount of work for in-country customers, and you know, we'll continue to evaluate that with our scale in India and, you know, likely would pick up in-country customers, so to speak, over time there. There is no such plans for now? Right now, not so much in India. We do actually do that in LATAM and a little bit in China. You know, China is actually servicing a client that we already had a pre-existing relationship with in the US. Currently, no, we're managing India as basically a, you know, development center. Perfect. On and one more topic on the staffing side of things. You did mention that you're aggressively hiring, and obviously you do see a huge amount of demand. Something that is an industry-wide theme is tech services are doing well. All companies on the tech services front seem to be hiring. Could there be a risk of over-hiring or over-staffing considering your expansion across India and in general, this trend of college hiring? Yeah, I think that's a good question, and that's always, you know, a balance in the business. I think we're doing a good job with it. As I mentioned before, we've got tools in place, proprietary tools that we're using to manage the proper capacity. Again, mainly allowing attrition if we feel like we need to slow increase, more allowing attrition than slowing hiring. We've got a very kind of real-time hiring model with 20-some-odd full-time people in our talent acquisition pool. We'll continue to flex that as we need. Perfect. Just my last question. On the M&A front, do you see M&A coming more from access to technology or would it be more offshore? What are your general expansion plans in the next few quarters? Yeah. We're very interested in adding to our offshore and nearshore capacity, but also in a way that you know fills skill gaps, right? It isn't just a headcount play. These are targets that have a meaningful account base that we'll be introducing additional services into, but also a great talent pool that in many cases have either more depth or even unique skills that we don't have enough of or have gaps in today. Great. Sorry, can I just ask one more last question here? Sure. Just on Compass. Hello? Sorry. On Compass, is that an internal tool only or is that an IP that you use externally as well? Operator? Yes. Can you hear me? Yes. All right. There was a question. Do we have a question? The line is open. Sorry, Jeff. I was just asking about Compass as a tool. Do you use that internally or do you use that as a proprietary tool externally as well and sell it to external customers? Currently it's internal. Of course a lot of it, the information data coming out of it is geared toward driving client success. The future plans for it is to extend it actually to the client where they can log in and see a lot of these details directly. Perfect. Thank you so much for answering my questions. Thank you. Thank you. Please stand by for our next question. We have a follow-up question from the line of Brian Kinstlinger with Alliance. Your line is open. Great. Thank you. In your presentation, healthcare is 25% of revenue compared to 31% in the prior second quarter. Using back-of-the-envelope, it suggests the industry contribution is down despite M&A. If I use that same methodology, retail and CPG were down as well. Last quarter you talked about the natural conclusions of some projects. With the 40% increase in bookings and the solid pipeline you're discussing, when should we expect these verticals are gonna return to growth? Oh, I think you'll see it this year. You know, I'm not sure if you caught it earlier, but some of the material contributor on a year-over-year basis to healthcare is KP. We talked about that in the past. Substantial decrease there this year. As I think I mentioned earlier, financial services is increasing. Retail CPG, it's an interesting climate out there, you know, consumer driven economy. We'll see what happens. I'm probably not as bullish on that in general as I am on healthcare. I do think that we'll see an increase there. I think some of the percentage declines are actually dilution from increases in other industries. Great. Thank you so much for the follow-up. Thanks, Brian. Thank you. Please stand by for our next question. We have a follow-up from the line of Surinder Thind with Jefferies. Your line is open. Thank you. A question about just your expansion in India and the addition of the new global delivery locations. Can you talk a little bit about that in terms of the relative cost of opening up a new location versus maybe expanding an existing location? Also in terms of the selection of the location, perhaps moving to smaller cities, is there maybe more of a work from home model there? How should we think about the forward-looking expansion plans versus existing real estate footprints? Sure. During the pandemic and when we were doing a lot of work from home that was happening in India, we were pretty strategic in where we made those hires, where everybody's working remotely. Actually, the infrastructure we're building is just to support the individuals we've hired specifically in certain areas. We are expanding in Chennai. It's a very large city. We're actually expanding to another side of Chennai which helps us there. Costs are relative. They are in a good position for us there. As well as when we look at Pune and Hyderabad, we have an infrastructure for the team that we're providing a place for them to work as they now come back into the office and provide better collaboration and get out of their homes and work more in our office space. The locations are very specific to hiring that we did during 2021 and currently. Is there any? On the cost- Oh, sorry, go ahead. Please go ahead. I was gonna say on the cost side of that, I think you asked about it, you know, you probably know well, it's very effective and pretty low cost. However, you know, as part of your question, we are actually expanding in existing facilities where we can. It's a pretty darn low cost canvas. Got it. A follow-on on the M&A question earlier. Sounds like you're in the process or you're, you know, maybe a deal this quarter, maybe something, you know, thereafter in the following quarters. Can you talk a little bit about valuations? It seems that it's been more difficult to get deals done simply because valuations are higher, and they haven't quite reset the way the public markets have. Any color there in terms of the attractiveness and in consideration of valuation versus the strategic-ness of the deal? Yeah, absolutely. There is a higher premium today than there was, you know, a year ago and the year before that. We really haven't seen a lot of a pullback, maybe a little bit. I think the difference between that and the public market is that there are other factors impacting the public market that aren't impacting these private businesses. I mean, or our own in terms of demand. I mean, you know, other than what we've already talked about, these folks are very optimistic. They're not desperate and, you know, there continues to be a premium. However, again, we work hard, look at a lot of different businesses and a lot of different elements of those businesses and whether they're gonna be a fit for us or not. We will walk away from deals that we think are just too expensive and have. One final housekeeping question. Under the new large project metric, are you able to provide the numbers for last quarter? Got 53 deals over $1 million in Q1 of 2022 and 47 in the similar quarter last year. Got it. Thank you. That's it for me. Thank you. Thank you. I'm showing no further questions in the queue. I would now like to turn the call back over to Jeff for closing remarks. Well, thank you all for your time today. While the results, I'm sure from many perspectives were mixed, I think the outlook is fantastic and hopefully we can fade that result. Thank you. We'll be back here in 90 days with another great result. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.