Good day, and thank you for standing by. Welcome to the Q3 2022 Perficient 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 a question during the session, you will need to press star one one on your telephone, and you will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chairman and CEO, Jeff Davis. Please go ahead. Thank you, and good morning, everyone. With me on the telephone today is Paul Martin, our CFO, Tom Hogan, our President and COO. I'd like to thank you again for your time this morning. We have about 10-15 minutes of prepared comments, after which we'll open up the call for questions. Before I 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? Well, thanks, Paul. It's good to be with you today as we discuss our third quarter performance and our continued growth and profitability. Adjusted earnings per share increased 26% during the period, with revenue up 18%. North American average bill rates were up 4.4% year-over-year, accelerating to an all-time high. Gross margin also reached an all-time high at 40.1% or 41.3% on an adjusted basis. The pipeline remains strong, in fact, larger than ever, and we're pursuing several eight-figure deals. Now we are seeing a modest increase in sales cycles with some customers deliberating a little longer given the macroeconomic inputs. Because our work primarily involves mission-critical projects in which enterprises must invest and do prioritize, we're not overly concerned at this point. The breadth and depth of our portfolio ensure Perficient delivers material value in environments of strength or weakness. Whether our clients are investing in growth or seeking to reduce costs by leveraging efficiency, Perficient is the answer. Organic growth revenue or organic offshore revenue grew 32% in the quarter, and overall offshore revenue grew 72%. On an apples-for-apples basis, that component of our business is growing as fast as anyone in the industry. Our fully integrated global delivery model continues to resonate with clients who value the combination of our local and global approach. We continue to scale in both Latin America and in India. In fact, the Q3 acquisition of Inflection Point Systems in Mexico and the acquisition closed earlier this month of Ameex Technologies in India increased our headcount in those regions by more than 600 colleagues. As we've long discussed, we're uniquely positioned due to our two decades of presence and strength in the United States. We've now built and continue to build meaningful global depth in Latin America and India with tremendous talent. Our teams in those regions are not bolt-on staff augmentation resources. They are true experts, peers on par with our senior leaders in the United States. Our fully integrated approach is what customers want and ensures we can deliver meaningful value from anywhere in the world. We've also discussed many times that this mix shift in the near and medium term will expand margins but also pose a modest headwind to our overall top-line growth. Eventually, however, it will prove an accelerant to both. We just reported adjusted earnings per share of $1.11 for the third quarter. Three years ago, in the third quarter of 2019, we reported 0.56, essentially a doubling of earnings while the world entered and emerged from the pandemic. Just for perspective, revenue was up 57% during that same time period. Clearly, investors who value earnings, continued profitability growth, and strong margins will continue to appreciate Perficient as a consistent best-in-class performer. With that, I'll turn the call back to Paul for some more color on the numbers. Yep. Let me turn to the third quarter results. Services revenue excluding reimbursable expenses were 224.9 million in the third quarter, an 18% increase over the prior year. The year-over-year organic services revenue growth was 12%. Services gross margin excluding reimbursable expenses and stock compensation was 41.3% in the third quarter compared to 40.3% in the prior year. SG&A expense was 44.3 million in the third quarter compared to 39.3 million in the prior year. SG&A expenses percentage of revenue decreased to 19.5% from 20.4% in the prior year. Adjusted EBITDA was 53 million or 23.3% of revenues in the third quarter compared to 41.5 million or 21.5% of revenues in the prior year. Amortization expense was 6.1 million in the third quarter compared to 4.3 million in the prior year. The increase in amortization expense was primarily due to the additional intangibles from acquisitions in 2021 and 2022. Net interest expense for the third quarter decreased to 0.6 million from 3.5 million in the prior year, primarily as a result of adopting the new accounting standard for convertible debt in the first quarter of 2022. Our effective tax rate was 29.4% for the third quarter compared to 28.1% in the prior year. Net income increased 32.3% to 23 million for the third quarter from 17.4 million in the prior year, primarily as a result of higher revenues, higher gross margins, and lower SG&A as a percent of revenue. Diluted GAAP earnings per share increased to 0.64 per share for the third quarter from 0.48 per share in the prior year. Adjusted earnings per share increased to 1.11 or 26% for the third quarter from 0.88 per share in the prior year. You can see the press release for a full reconciliation to the GAAP earnings. I'll now turn to the year-to-date results. Services revenue excluding reimbursable expenses were 664.2 million for the nine months ended September 30, 2022, a 24% increase over the prior year. Year-over-year organic services revenue growth was 16%. Services gross margin, excluding reimbursable expenses and stock compensation for the nine months ended September 30, 2022 was 40.1% compared to 39.8% in the prior period. SG&A expense for the nine months ended September 30, 2022 was 127.4 million compared to 110.7 million in the prior year. SG&A expense as a percentage of revenue has decreased to 18.9% from 20.3% in the prior year. Adjusted EBITDA for the nine months ended September 30, 2022 was 151.5 million, or 22.5% of revenues, compared to 115.1 million or 21.1% of revenues in the prior year. The nine months ended September 30, 2022 included amortization of 18.1 million compared to 17.7 million in the prior year. Net interest expense for the nine months ended September 30, 2022 decreased to 2.3 million from 10.1 million in the prior year. 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 25.2% for the nine months ended September 30, 2022, compared to 25.3% in the prior year. Net income for the nine months ended September 30, 2022 was 77.9 million compared to 47.6 million in the prior year, increasing primarily as a result of higher revenues, gross margins, and lower SG&A expense as a percent of revenues. Diluted GAAP earnings per share increased to 2.17 for the nine months ended September 30, 2022, compared to 1.39 in the prior period. Adjusted earnings per share increased to 3.14 for the nine months ended September 30, 2022 from 2.49 in the prior year. Again, you can see the press release for a full reconciliation to GAAP earnings. Our ending billable headcount at September 30, 2022 was 5,959, including 5,605 billable consultants and 354 subcontractors. Ending SG&A headcount was 886. Our outstanding debt, net of deferred issuance costs at September 30, 2022 was 394.1 million. We also had 20.8 million in cash and cash equivalents as of September 30, 2022, and 199.8 million of unused borrowing capacity in our credit facility. Our balance sheet continues to be very well positioned to execute against our strategic plan. I'll now turn the call over to Thomas J. Hogan for a little more commentary. Thomas J. Hogan? Thanks, Paul, and good morning, everybody. We booked 37 deals greater than $1 million during the third quarter of 2022, which compares to 40 in the third quarter of 2021. As Jeff already mentioned, we did see some clients stretch negotiation cycles as they navigate these plans internally. The deals aren't going away though. They're just taking a bit longer to close. Our net pipeline, weighted and unweighted, is larger than it's ever been and continues to grow daily. A couple recent wins to highlight for the quarter. We've entered into a new phase of our work with a global architectural corporation to improve their existing cloud platform. This win is an extension of our work to modernize the client's supply chain technology. As part of the ongoing partnership, our trusted global team of experts are consolidating 12 legacy applications into a single software service cloud with primary focus to continue building and enhancing the client's formulation product. We recently won work with a new client that provides information management services to deploy ERP and supply chain management platform throughout Asia-Pacific, South America, Europe, the Middle East, and Africa. Our proven track record of delivery of similar projects and our reputation of quality, talent, and our ability to support the deployment onshore and offshore prompted the enterprise to switch from their previous provider to Perficient. Just a great example of our trifecta of the United States, Latin, and India team, and it was all perceived as a superior alternative to their incumbent. We continue to remain well-diversified from a customer, industry, and platform perspective. Healthcare and financial services remain the strongest industries during the quarter. Automotive also remains strong as well. I've talked in recent quarters about the internal and external investments we've made to improve our colleagues' work lives, but also making increased impacts in the global communities where we operate. We're seeing that our colleagues value these investments more and more with an already below-industry average attrition slowing even further. Our feedback about the colleague experience is as high as it's ever been. In our most recent all-colleague engagement survey, nearly 90% of our colleagues responded, and 90% of them expressed that they'd recommend Perficient as a great place to work. For the first time ever, we engaged an external partner to administer our engagement survey. This well-known partner was able to provide us with cross-market benchmark data and data specific to our industry, enabling us to glean additional insights from our colleagues' feedback. Their findings were that Perficient materially exceeded the benchmarks across virtually every category surveyed. Our colleagues are telling us that they value the investments we've made and will continue to make in total rewards programs and community efforts like BrightPath, into the innovative internal products we've built, and into the internal initiatives like our Women in Technology and Perficient Giving, employee resource groups. They love that collectively and individually, Perficient and its colleagues are making so many positive differences in the world. Most of all, what they value is the collaborative culture that we've built at Perficient without silos or borders based on geography. At Perficient, each and every day, the vast majority of our colleagues are working across time zones, countries, and continents to deliver world-class solutions for our customers, which results in a world-class experience for our colleagues. With that, I'll turn things back over to Jeff to discuss the fourth quarter and our remainder of 2022. Thank you, Tom. Perficient expects its fourth quarter 2022 revenue to be in the range of $233 million-$239 million. Fourth quarter GAAP earnings per share is expected to be in the range of 0.69-0.74. Fourth quarter adjusted earnings per share is expected to be in the range of $1.11-$1.16. Perficient is updating its full year 2022 revenue guidance to a range of $905 million-$911 million, updating its 2022 GAAP earnings per share guidance to a range of 2.85-2.90, and narrowing its 2022 adjusted earnings per share guidance to a range of 4.25-4.30. Now with that, we can open up the call for questions. Okay, thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you need to press star one one on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A roster. Our first question comes from Mayank Tandon of Needham. Your line is now open. Thank you. Good morning. Jeff, I just wanted to first start with, last quarter you had mentioned, the impact from cancellations and delays. Did that play a role in your revised guidance? I see a little bit of a downtick in terms of organic growth that's embedded in your four Q numbers. Maybe if you could just speak to that. Then on a related note, if you could also just give us the organic growth numbers, for four Q that you're building into your expectations. Yeah, sure. Yes, I would say that the cancellations we experienced have still impacted the quarters carried over into Q3. You know, you're seeing that reflected somewhat in the Q4 guidance as well. It was, you know, really a matter of how quickly we're able to build that back. You know, also keep in mind, everybody knows, you know, we had that one large healthcare account that we exited this year. That represented about $30 million in revenue last year. It's about $5 million this year. So that was a headwind again, that I think is a unique situation, and that's now lapsed. Of course, Q4 was a tough comp. You know, obviously we had a really strong Q4 last year. That's factored in as well. On the organic growth for the fourth quarter, I want to say the midpoint's at about 8%. Paul, is that right? Yes, 7%-8% is the midpoint. Got it. Maybe I could just piggyback off that, Jeff and Paul. I know you're not going to give guidance for next year, but just given what you're seeing in the market right now, I'm sure clients are going through the budgeting process and then the Q4 organic growth expectation that you just laid out. Is that a good baseline on how we should think about at least the early part of 2023 as we're building our model, just to set realistic expectations on this current uncertain macro? Yeah, I think that's fair. You know, we'll, I think a lot will be revealed between now and the end of the year, you know, on the macro sense, obviously, there's no crystal ball. Yeah, I think that's a good starting point. Paul, just one housekeeping item. Just in terms of the revenue contribution in the fourth quarter from your two recent acquisitions, could you just size that for us just so again, we have a good handle on the impact? Yeah, I think it's about somewhere between 8 million and 9 million. Great. Thank you so much. Thanks, Mayank. Thank you very much. One moment please for our next question. Okay, our next question comes from Surinder Thind of Jefferies LLC. Your line is now open. Hi, good morning. Jeff, I'd like to start with a question around the demand environment. More specifically, it seems like there's increasing desire for continued offshore work relative to onshore work, and that seems to be impacting the top line. Can you talk about that? Is that explicitly being driven by clients concerned about cost, and so they'd rather continue with current projects but rather have them offshore? Or are there just other considerations here? Because it just seems like that's a continuing headwind at this point for the top line. Yeah, I think that's right. It's a combination of both. We have our top 50 accounts have an average tenure of 10 years. We've evolved a lot over that long period of time, as have they. In particular, our offshore and nearshore capabilities have evolved a lot around the digital space. We're completely digitally native in our offshore and nearshore delivery centers. That really didn't exist anywhere for the most part five years ago. All of these things have evolved to definitely a higher pace growth for our offshore nearshore. Certainly, a lot of the motivation for that is the value that it brings. It is definitely a cost factor. I don't know any clients that aren't always cost sensitive, when it comes to services. Fair enough. Then is there what I would call internal realignment at the clients as well, in the sense that I'm assuming most of the new work is that primarily offshore? What about existing projects? Are clients transitioning existing projects offshore as well? Or is it generally when there's a new cycle for a new project that the work shifts to offshore? Yeah, it's a good question. It's generally a new cycle, and there are still a number of clients who prefer the onshore, you know, experience. There are still clients that are sticking with 100% onshore, but most clients have transitioned. I mean, a great example on an industry basis is healthcare. You know, I kind of mentioned the five-year cycle. Five years ago, no healthcare companies that we worked with would touch offshore, and now I can't think of one that isn't leveraging it in some way or another. That's just a competitive necessity. Got it. One more related question to the offshore. At this point in time, about what percentage of revenues are generated by your offshore teams? It's approaching 30%. It's probably a little below 30%. With these latest acquisitions, though, it should be right around 30%. Got it. I'm looking forward to us getting to what I refer to as a tipping point of 50%, by the way. I think that's the point where we'll really see offshore and nearshore helping to contribute to accelerated top-line growth, in addition to the contributions they're already making to gross margin. Understood. My final question here is your earlier comment about the increase in the sales cycle. Any color on that? Is that clients simply delaying existing projects, or are they starting to maybe change the nature of the types of projects that they're asking you to focus on? We've heard commentary from, let's say, competitors about, well, maybe there's a bit more focus on cost, but how does that impact you, or what are you guys particularly seeing? Yeah, I wouldn't say that the mix of the drivers has really changed much. You know, it's still primarily a customer acquisition, new products and services, you know, customer support, et cetera. Of course, there's a lot of work around efficiency gains as well. I don't think that mix has changed much so far. In terms of the sales cycles extending, I do think it's the climate that we're in. It's a pretty oversimplification to say, you know, maybe they're waiting for the midterms. I do think there's a factor there as well. I think we're just at a stage, you know, in this year's evolution where people are taking a little more cautious approach. We do know of some clients that are, you know, going through reprioritizations. In those cases, the projects that we're working on, you know, tend to move forward. I expect that'll continue. They do still have to go through that prioritization process, which introduces some delay. Got it. That's very helpful. Thank you. That's it for me. Thank you. Thank you. Please stand by for our next question. Okay, our next question comes from Jonathan Lee of Morgan Stanley. Your line is now open. Hey, guys. Thanks. My questions. You know, last quarter you signaled some of the softness given change in client priorities, not necessarily the macro environment. I want to build on some of the prior questions. How has that evolved over the last few months? What's contemplated in your outlook from a macro perspective? Yeah, we've definitely taken a little more conservative approach on guidance, understandably, I think, you know, given the current climate. Yeah, I would also say that, you know, what we saw as primarily kind of macro in Q2, I think, you know, admittedly is revealing itself to be a little more macro than we thought, and, you know, as I've alluded to earlier in the prepared comments. I do think it's a little softer environment. Not dramatic, though, like I said. You know, we're still putting up a good result. I think the guidance is really solid, although I will say that we've tried to be quite conservative in this guidance and feel, you know, very confident at hitting that midpoint. That's helpful color. Then one more, if I may. You know, can you talk us through the current pricing environment, just given some of the macro headwinds that you may be seeing? And sort of what's contemplating your outlook as it relates to you being able to take up price? Yeah, that's pretty interesting, that in spite of what intuition might tell you, we've managed to move rates up pretty nicely. You know, we mentioned in the earlier part of the call 4.4% for U.S., North America. And the fact of the matter is actually nearshore has been about 15% and India has been similar. We've got decent or I'd say quite good pricing power, and that's really just based on results. Once clients make the decisions to move ahead and make those commitments, we successfully negotiate what we believe is an appropriate price for what the market will bear. Again, I think the fact that we've been able to move rates up as much as we have supports that. Now, you know, if moving forward, you know, into the maybe medium term, you know, I don't know, mid, late next year, that might change. As of right now, I think that momentum looks like it's going to continue. Helpful color. Thanks, guys. Thank you. Please stand by for our next question. Our next question comes from Puneet Jain of JP Morgan. Your line is now open. Yeah. Hey, thanks for taking my question. I wanted to ask about margins. Given, like, the two recent acquisitions, how should we think about pro forma margins for the entire company on going forward basis? You know, I think the two acquisitions are going to be somewhat neutral, and that's not uncommon. We, you know, I mentioned the price improvement that we've made in nearshore in particular. As we drive more demand from our existing client base into those newly acquired businesses, I expect that the margins will expand. I think we're going to see similar results next year to this year. You know, I started this year saying, gosh, you know, I think it's going to be maybe 50 basis points in gross margin. I'd probably say the same thing about next year, depending what the macro environment holds in store. I want to reiterate, you know, we're not trying really to drive higher gross margins. In terms of margin expansion, we're really more focused on EBITDA. I want to see the price increases going to offset cost increases, right? Wage inflation. Also us being able to leverage that offshore and to maintain and drive competitive pricing, you know, versus letting it all flow through. I think the results that we're seeing right now are exactly the result of that. I'm very pleased with, you know, we may end up closer to 100 basis points on gross margin, but we're going to put up a couple of 100 basis points of EBITDA expansion this year. I think that's what I'd encourage investors to focus on. Got it. How should we think about use of cash priorities given a rising interest rate environment, specifically, as it relates to M and As, potential M and As to further increase that offshore mix to 50% of revenue over medium term? Yes, absolutely. The two primary, you know, uses of cash for us, of course, are M and A and stock buyback. On the M and A front, you know, we do have some things still in the pipeline that we're going to continue to work on. We may slow the pace a bit as we again keep a close eye on that macro, primarily here over the next couple months. Again, I do think the midterms, you know, may determine some direction there. In terms of the buyback, I think it was in our press release that the board just approved an expansion to the buyback program of additional $60 million. I want to say with that, we've got about $70 million in dry powder approval for a buyback. We'll certainly be pursuing that. Certainly at these levels of the stock price, I think it's a great use of cash and certainly accretive. Got it. Let me quickly follow up on that. How often you adjust the cutoff rate for organic investments or for M and A or whether it's buyback internally for your internal models? I didn't quite catch that. I don't know, Paul, did you get that? Would you mind repeating that, Puneet? The cutoff rate that you use for use of cash decisions internally, like, how often you adjust those rates? We look at those annually, you know, based on the environment, based on interest rates, you know, based on the macro. We evaluate that annually really as part of our budget process. Got it. Thank you. Thank you. Thank you, and stand by for our next question. Our next question comes from Vincent Colicchio of Barrington Research. Your line is now open. Yes, Jeff. With the year-over-year decline in million-dollar-plus deals, I'm curious, the pipeline, as you said, which is healthy, are deal sizes declining in the pipeline? Actually, the deal sizes are pretty consistent. It was the number of deals, and I'd kinda chalk that up more to just the lumpy nature of the business. That's how bookings tends to flow. Again, that's you know why we talked about the fact that we had seen some delays. We expect we'll be able to pick some of those up again still in the fourth quarter. I think it does reflect some of the slower decision timeframes that we're experiencing. I'm curious, the nearshore deals you did in 2021, Talos and Overactive, are you hitting on the cross-sell objectives there with your existing base? Yes. Yeah. They've been really strong. You know, customers are, I'd say nearshore is the component that's highest in demand right now, and I don't think that's going to end anytime soon. Just the time zone alone is such a benefit. Maybe one last one. You had a sequential decline, you know, in healthcare, which you've had for the reason you mentioned, you know, year-over-year declines with a big client. When do you expect that to return to sequential growth? You know, we've got a lot of deals out there. I do think that it's probably going to take, you know, the better part of at least the first half of next year for us to kind of rebuild that. We do have a lot of new opportunities, new logos in the pipeline and in the works. I think we'll see that turn again sometime in the first half of next year. The good news is, you know, we've got a lot of a big head of steam coming on in other industries, particularly financial services. Thanks, Jeff. Thank you. Our next question will come from Brian Kinstlinger at Alliance Global Partners. For Brian Kinstlinger. I'm sorry. Stand by for that question. I'm sorry. The next question will come from Brian Kinstlinger of Alliance Global Partners. Your line is now open. Hi there. This is Sherman on for Brian. Thanks for taking my question. At the very beginning of the call, you mentioned that your pipeline still remains strong and that you're pursuing multiple eight-figure deals. Could you allude to these eight-figure deals, what industry they're in, whether it's healthcare, financial services, et cetera? It's both. I mean, Do you see, like, any sort of heavy shift in one direction? Yeah. I would say there's not a heavy shift other than, like I mentioned, you know, certainly, financial services is accelerating, you know, probably beyond in terms of demand, probably beyond or close similar to healthcare right now. But it's a good cross-section, I would say, across a number of industries. Those two in particular stand out. But you know, we still have a lot of great relationships and work going on in automotive and manufacturing as well. All right. Thank you. That's all I have. Thank you. Okay. As a reminder, to ask a question, you'll need to press star one one on your telephone. Please stand by for our next question. Our next question comes from Maggie Nolan of William Blair. Hi, everyone, and thanks for taking my question. I'm Kate [Leschyshyn] on for Maggie Nolan. I wanted to start off talking a little bit more about the offshore growth. Was it stronger than expected for the quarter? Was it a factor in the guidance change, or were the sales cycle increases a bigger factor? Yeah, I would say it was a contributor, but I think the sales cycle increase is probably the major factor. You know, it was probably in line, maybe a little bit accelerated again beyond our expectations, which, of course, I think is a positive. You know, it's been strong and looks to be strong going forward. Okay. Helpful. Thank you. Thank you. You expected hiring originally to ramp up in the second half. Does this still hold true as we look to year-end? Certainly, you know, it's a little slower in the U.S. with this mix shift going on. So I think we're up a couple% organically on hiring in the U.S., but we're definitely hiring a lot faster than that, both offshore and nearshore. I want to say, do Paul, you or Tom have the net on that? What was the net organic on the offshore, nearshore headcount? Yeah. This has the acquisition in it, but without it, I, you know, it was definitely up sequentially, I think, 3% or 4%, maybe a little bit higher than that. Okay, great. Thank you. Thank you. Okay, at this time, I would like to turn the conference back over to Jeff Davis for closing remarks. All right. Well, thank you all once again. Another great quarter for Perficient. Appreciate your time today and look forward to speaking to you in about 120 days about what I'm confident will be a great quarter of the fourth quarter. Thank you all for your time. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.