Go od day, and thank you for standing by. Welcome to the Q1 2023 Perficient Earnings Conference Call. At this time, all participants are on a listen only mode. After the speaker 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. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker, Chairman and CEO, Jeff Davis. Please go a head. Thank you. Good morning, everyone. This is Jeff. With me on the call today is Paul Martin, our CFO, and Tom Hogan, our President and COO. I'd like to thank you for your time this morning. As typical, we'll have about 10-15 minutes of prepared comments, after which we'll open up the call for questions. Before we proceed, Paul, would you please read the safe harbor statement? Thanks, Jeff. 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. 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. Well, thank you all again for your time this morning as we discuss Perficient's start of the year and continued growth and profitability. Revenue was up 4% during the 1st quarter and already investing free services gross margin has expanded by 10 basis points, excuse me. We remain confident that 2023 will prove to be another year of solid revenue and earnings growth and that our position in the market continues to strengthen. As our brand and reputation builds, we're getting more of that and winning work that was previously granted to other firms. Today, we're engaged in more discussions than ever. The Fortune 100 enterprises are reconsidering incumbent providers, and we're talking about 7, and in many cases, 8-figure opportunities and relationships. Our customers continue to place increasing value on our services, as evidenced by the bill rates we're commanding, the types of conversations we're having, and the audiences we're having with them. Our success growing ABR is helping offset some of the revenue headwinds created by our continued global transformation and the increasing mix of revenue delivered offshore. Growth there, by the way, was 25% during the quarter. More than 57% of our billable headcount is now outside North America, and the portion of our total revenue that is delivered offshore has nearly doubled in just two years to over 27%. Our news release mentioned our optimism around our bookings performance during the quarter. It was the strongest bookings quarter in our history, with organic bookings up double-digits. Tom will speak to the large deal wins data shortly. In terms of the macro environment, our perspective remains consistent with what we described in the past couple of calls. The pipeline remains robust, and sales activity and pursuit volume is quite high, especially considering the backdrop. A key reason we're seeing the continued demand is our breadth and depth and our expertise across platforms and industries. Those broad-ranging capabilities help insulate us from the standard ebbs and flows that may impact more narrow providers. Digital transformation is morphing into digital business. It's here in earnest, imperative for survival, and never going away. Whether our clients are investing in growth or seeking to reduce costs by leveraging efficiencies, Perficient is the answer. An important part of our winning mix are the channel relationships and deep, well-established partnerships we've cultivated with the world's leading platform providers. They continue to help us drive demand and win work. During the quarter, Adobe, where we've built a $100 million-plus business in just a few years, recognized us as their Digital Experience Emerging Partner of the Year for the Americas. M&A remains an important part of our strategy. As you're aware, we intentionally slowed activity there in recent quarters for a couple of reasons. As we've discussed, private market valuations have remained high. Now that they've come down a bit, we're back in active discussions on some opportunities. We wanted some time to further integrate our most recent acquisitions, particularly the three we completed in Latin America in recent quarters. Great progress has been made there, we're ready to move forward when we find the right next deal. With that, I'll turn things over to Paul for the financials. Thanks, Jeff. Services revenue, excluding reimbursed expenses, were $228.4 million in the first quarter, a 4% increase over the prior year. Year-over-year organic services growth was 0.4%. Gross margin percentage increased 10 basis points to 37.7% in the first quarter compared to the prior year. Services gross margin, excluding reimbursable expenses at stock comp, was 39% in the first quarter compared to 38.9% in the prior quarter. SG&A expense was $43.9 million in the first quarter compared to $42.3 million in the prior year. SG&A expenses as a percentage of revenue remained constant at 19%. Adjusted EBITDA was $50.1 million or 21.7% of revenues in the first quarter, compared to $47.2 million or 21.3% of revenues. Amortization expense was $5.8 million compared to $6 million in the prior year quarter. Net interest expense for the first quarter decreased to $0.5 million from $0.9 million in the prior quarter, primarily due to $300,000 of interest income. Our effective tax rate was 26.6% for the first quarter compared to 17.9% in the prior year. The increase in the effective tax rate was primarily due to a relative decrease in share-based compensation deductions compared to the prior year. Net income decreased 1.2% to $26.8 million for the first quarter from $27.1 million in the prior year. Diluted earnings per share remained constant at $0.75 a share, and adjusted earnings per share increased to $1.04 or 6% for the first quarter from $0.98 in the prior quarter. You can see the press release for a full reconciliation to GAAP earnings. Ending billable headcount on March 31 was 6,315, including 5,953 billable consultants and 362 subcontractors. Ending SG&A headcount was 973. Our outstanding debt net of deferred issuance costs as of March 31, 2023 was $395.2 million. We also had $41 million in cash and cash equivalents as of March 31 and $299.8 million of unused borrowing capacity on a recently extended credit facility. Our balance sheet continues to leave us very well positioned to execute against our strategic plans. I'll now turn the call over to Tom Hogan for a little more commentary on the metrics. Tom? Thank you, Paul. Good morning, everybody. We booked 63 deals greater than $1 million during the first quarter of 2023, which compares to 53 in the first quarter of 2022 and 56 in the fourth quarter of 2022. As Jeff mentioned, the first quarter was the strongest booking quarter in our history, and the pipeline, both weighted and unweighted, remains strong. We continue to remain well-diversified from a customer, industry, and platform perspective. Healthcare and financial services led the way from a revenue and bookings perspective. We're particularly encouraged about the accelerating momentum we have in the financial services industry, where our revenue has grown materially in recent years. One example of our ongoing industry success is a recent eight-figure win with a leading global financial group where we are supporting their customer remediation and loan administration reconciliation efforts. This program will help improve the provider's overall risk management function by ensuring their operations and technologies meet regulatory and audit milestones. The client selected Perficient due to our deep technical expertise in financial services and our track record for driving value. Across vertical markets, our customers value the depth of our expertise and the intellectual property we're bringing to their challenges. In recent quarters, we've created dozens of proprietary industry solutions that address specific market challenges by leveraging knowledge from our impressive team of industry and technology experts. With these repeatable solutions, we're able to deliver value very quickly for our clients. Particularly exciting was the recent launch of our Envision Online tool, a comprehensive and unparalleled digital transformation platform that provides a suite of proprietary strategy tools, historical industry data, and best practices to quickly deliver actionable insights. This data, collected across the industries, markets, and companies, is informed by real-life execution and proven results. Enterprises can quickly understand where they stand relative to competitors, determine their gaps, and how to quickly address them. Envision Online is a suite of tools. To give you a sense of the tool's depth, one individual component, the platform selection tool, helps customers understand the relative value of more than 300 vendors based on their client priorities across more than 5,000 potential requirements. Beyond our market momentum, we also remain excited about and committed to the impact we're having in communities around the world. We recently published our first annual community impact report, a 42-page compilation of just some of the philanthropy, community involvement, and environmental and society activity Perficient and its colleagues invest in and support across the globe. It's available within the Investor Relations section of our website. I encourage you to take a look. Within it, you'll find reference to investments like our Bright Paths program, where we continue to expand in the training and hiring of underserved constituencies and communities. 125 students have already graduated from that program in various markets. This year, we've opened the program up on a national basis. We intend to enroll 70 students into this fully funded program in just the first half of this year. You'll also find information about our partnership with the Mark Cuban Foundation and our hosting of artificial intelligence boot camps in several cities. We'll continue to expand this program as well, which serves to educate high school students on the fundamentals of AI, build their technology literacy, and to encourage them to consider a career in technology. Finally, our existing employee resource groups are thriving. Thousands of colleagues are participating in various capacities and events, discussions, and activities with our Women in Technology and Giving ERGs. We're excited to soon add more groups which will celebrate the diversity inherent in our global workforce. These investments we're making in our colleagues, our culture, and our communities are important to our employees, and it's certainly helping us recruit and retain great people so we can deliver value for our customers. With that, I'll turn things back over to Jeff to discuss the second quarter. Thanks, Tom. Great stuff. Perficient expects its second quarter of 2023 revenue to be in the range of $231 million-$237 million. Second quarter GAAP earnings per share is expected to be in the range of $0.74-$0.78. Second quarter adjusted earnings per share is expected to be in the range of $1.08-$1.13. With that, operator, we can open up the call for questions. Thank you, sir. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. I show our first question comes from the line of Mayank Tandon from Needham. Please go ahead. Thank you. Good morning, Jeff. I wanted to get one thing out of the way in terms of the guide. Are you still confirming the guidance for the full year? I think you'd given guidance last quarter on revenue and earnings. Just wanna reconfirm if that guidance still holds true given what you're seeing in the market. Yeah, absolutely. Yeah, we won't typically reaffirm guidance unless it changes. There was no change to the outlook, we didn't feel the need to reaffirm. Got it. Then just based on your comments in the press release and what you said earlier in terms of, you know, maybe given the bookings trends you're seeing and the solid deal activity, you know, just could you maybe help us understand the linearity of the quarters, especially in the back half? Do you expect a big step-up in growth to get to that type of, you know, the 4% organic growth that you'd guided to last quarter? Or, like, what is sort of the makeup of the growth given some of the uncertainty on the macro front? Yeah, absolutely. It is an expectation of an increase in the second half. The reason we have some optimism around that, obviously, we'll keep an eye on it as we march forward. One of the key things is the bookings that I and Tom mentioned during the script is, you know, we've had a really, really nice bookings quarter here in the first quarter. Actually, bookings improved in the fourth quarter. If you look at the trend of bookings over, say, the last 4 quarters, the bottom, which was still a little better than flat, was Q3 of last year. By the end of this quarter, we'll be mostly through that, and enjoying some of the improved bookings that we had in Q4. As we move into the second half of the year, we'll see some of the bookings that we've had from Q1 kick in. Bookings for Q2 look pretty solid. Again, we'll be monitoring all this closely and update the market if anything changes. Got it. That's all I have. Thank you so much. Good job on the quarter. Thanks, Mayank. Thank you. I show our next question comes from the line of Jonathan Lee from Morgan Stanley. Please go ahead. Hey, guys. Thanks for taking our question. You historically talked about things with cancellations that seemed to accelerate through last year. Have you seen any this past quarter? Is there anything embedded from a cancellation perspective in your outlook? I missed your question, the very first part of it. What are you asking? What are we seeing? Yeah. Historically, you've talked about seeing some of the cancellations, that seemed to accelerate through last year. Is there anything to call out this past quarter? You know, is there anything embedded from a cancellation perspective in your outlook? I gotcha. Yeah, I would say the outlook is more conservative than, you know, it would've been a couple of years ago, just based on that uncertainty. I'll also say that, you know, knock on wood, while we had kind of a spat of that in the early part of last year or the first half, we haven't seen much since then, outside of what I would describe as the norm. In this industry, there are always cancellations, and there's always new work to fill that in, and that's how we operate it. You know, that got a little bit out of kilter again in the first half of last year. It seems to be more aligned right now, and again, something we'll have to keep an eye on, close eye on. That we seem to have moved past that and not seen, any more than usual right now. Got it. That's helpful color. I wanna build on a prior question around bookings. I mean, last quarter, you talked about this idea of urgency in bookings despite some of the elongation in decision cycles. Are you still seeing that persist? What are you seeing in terms of demand for different types of projects? Yeah. We are seeing the number of or the duration of projects being a little bit condensed compared to where it was. That trend continues. It's not a, it's not a huge factor, but obviously it does help. If you're shaving off 5% of the timeframe to deliver something, obviously you're gonna be able to recognize that revenue faster. We're still seeing that a bit. Like I said, it's not a huge factor, but it is helpful, and that does continue. Then, Tom, would you like to comment on the sort of body of work that we're seeing out there and the cycle of projects? Sure. Definitely around revenue growth, we see a still heavy demand for our services as clients continue to maximize their revenue. We also see some additional demand regarding operational efficiency. That large program I was mentioning, a lot of that was around operational efficiency and cost takeout of businesses, which is where we play really well as well as we think about digital transformation and cost improvement. We are seeing a little bit more uptick there, which is all great news for us as well as we continue to improve the bottom line for our customers. Thanks for the helpful color, guys. Thank you. Thank you. I show our next question comes from the line of Surinder Thind from Jefferies. Please go ahead. Thank you. Just following up on the bookings question, Jeff. A point of clarification here is the idea that it takes about 2 quarters for you to begin to realize some of the bookings numbers in terms of revenues. You've had 2 consecutive record quarters at this point, and yet revenues have been flattish at this point. Well, actually, you know, keep in mind that from a record standpoint, that's a lot of that's because the company's larger than it's ever been. Revenue technically is actually a record as well. We're not contracting, right? We were a little bit flat, or we were flat in Q1. I think we've guided to a little bit better than that in the midpoint of Q2. Again, our guide for the year is better than that. The correlation factor to bookings tends to be about a five or six-month rolling average. Now, that's just the highest correlation point. Most of these bookings, the projects behind them will begin immediately. They, you know, the revenue curve on a project or an engagement tends to be a bit of a bell curve, right? It's a little bit bigger at the end than it is at the opening tail. That left tail starts pretty slow, and then, and then we hit our stride, you know, typically in about five to six months on average. Got it. Does that help? Got it. Yeah. Yeah. No, that's helpful. I just wanted to understand the cadence there or verify that. Moving on from there. In terms of just, obviously, a lot of discussion around generative AI, how have you kind of evaluated the technology at this point in terms of internal deployment plans? Yesterday there was a piece in the media about IBM and their thoughts on productivity gains. Any thoughts there for yourselves? Well, we're actually already leveraging it to some degree. If you look at the, you know, the tool, the tool that Tom spoke to earlier, we're leveraging some of the technology or similar technology. You know, used to be big data, now it's AI, now it's generative AI. Yeah, it's gonna be very fascinating to see how it unfolds. We're approaching it cautiously, but also with an open mind. I think there's a lot of ways you could probably get yourself in trouble as a service provider over-leveraging it, at least early on. We'll, we'll be sorting that out. I don't know, Tom, do you have anything you'd wanna add in terms of, you know, actions we're currently taking? I know we're doing some research. Yeah. We're looking at, we also have an internal tool called Compass, which we use for project delivery. We're using it for some insights within project delivery. Candidly, we're doing more with our clients. Generative AI, although interesting for us internally, we're really helping our clients understand how they're gonna leverage generative AI. We've done a number of speaking engagements. You can see some information on perficient.com regarding our perspective on generative AI. A lot of our clients are turning to us to figure out how they can leverage it. We're a bit cautious on that and giving some understanding. There's a number of tools out there that we're working with our partners as well as they try to figure out how to use their generative AI products. We're more excited for our client base, although we'll be judicious in using it internally as well. That's helpful. Turning to just attrition rates and utilization levels here. I'm assuming the attrition rate's fallen probably dramatically. Any color there on how that might be impacting some of the inflationary pressures that you were seeing earlier in the year or, you know, last year? Are there any geographic differences that we should be aware about, let's say India versus LATAM? I guess on the utilization, just what level of bench maybe you're currently maintaining, and how does that compare historically? Utilization's been pretty consistent. You know, our goal continues to be 80% overall. We're hovering right around that. We actually intentionally manage offshore a little lower so that they have a capability of ramping quickly, as well as, we tend to engage in more training there than we do here in the U.S. So that's, you know, kind of the story on utilization. In terms of attrition, I mean, the last couple of quarters has been down, pretty dramatically compared to what it was before. I think a lot of that, you know, some of that might have to do with macro and obviously you see the layoffs from big tech. There's not a lot of overlap there, in my opinion. A lot of the skills that some of the big tech folks have, frankly, aren't gonna be applicable to our industry. However, I'm sure some of that sort of spreads. I think the biggest factor is that we're through or at least at the downside, you know, of the Great Resignation. I think that's calmed down now and we're seeing sort of the aftereffect of that. You know, people can only change jobs so many times in two or three years. Actually, again, I think it's a benefit. I think there's a little bit of a macro read in it, but it's certainly helpful to us that we're not distracted with having to replace people, and instead we can focus on hiring new folks and new additions. Got it. Just the final point on that, any geographic differences we should be aware of? Sorry. No. Actually, it's kind of remarkably consistent. I think we probably have the lowest attrition of most firms in India, including Indian firms. In fact, like certainly, Indian firms. Yeah, we're enjoying about the same level, which is quite low, really at the low end of our goal range, and in all three major geos. Got it. Thank you. Thank you. Thank you. I show our next question comes from the line of Brian Kinstlinger from Alliance Global Partners. Please go ahead. Great. Thanks so much. You touched on financial services. In terms of business development, can you talk specifically about the trends you're seeing in your other large vertical being healthcare? Are you seeing signs of improvement as vertical based on bookings or general discussions around projects and pipeline, or is this vertical facing pressure in terms of business development? No. Brian, there's a number of opportunities we're actually chasing right now within the Healthcare vertical. We actually had, even in Q4, we talked about a large 8-figure deal or close to 8-figure deal in the Healthcare industry. We're chasing actually a couple other 8-figure deals in the Healthcare industry as well. We've seen a little bit of a shift from the provider to the payer side of the world and more into the medical device and pharmaceutical, as people are working on, you know, just cost optimization more in the payer side right now. No, we actually, you know, are seeing a lot of great tailwind in financial services, but, you know, keep an eye on Healthcare. There's some great things coming that way as well. Can I just clarify that? Sorry, one thing to add, Brian. You know, keep in mind as we've been pretty, very public, you notice, some of the, some of the healthcare shift has to do with Kaiser, you know, and winding Kaiser down over the last two years. Of course. Yep. You know, now that that's completely out of the picture now and well, almost completely. There's a little bit of tail from last year, I think that alone will, you know, will help us or see an improvement or an uptick in healthcare as a% of rev. Yep, of course. Just, one more question, but in terms of the discussion on project or pipeline, are we talking pipeline or bookings have also been solid? My follow-up question is, I saw the reversal of contingent consideration. Given the environment, should we expect structure of acquisitions to have less contingent consideration? More how does the environment change the structure of how you plan to finance companies or pay for them? I'll start on the contingent consideration one. You know, obviously we closed on a couple deals in September and October. Some performance of those business not up to the original estimates, so we made those adjustments. From the overall deal structure, you know, we're gonna continue with the structure that's made us successful to this point. You know, we've done whatever, 20, 30 deals, you know, with that structure, we're likely to continue with that. Then the second part of that was around bookings versus revenue. I think both. You know, the bookings continue to be strong, and the pipeline continues to be just as strong. It's both. Great. Thanks so much, guys. Thanks, Brian. Thank you. I show our next question comes from the line of Puneet Jain from JP Morgan. Please go ahead. Hi. Thanks for taking my question. Was there any impact on client behavior in the financial services vertical or maybe more broadly in your overall business post-financial crisis in March? Was there any change in the trends before and after those events in the month of March? I'm gonna let Tom comment on this, but just real quick, I will tell you that there's an underlying factor here for Perficient that probably muddles that question a little bit, and it's a good thing actually. We've been pretty underrepresented on the technology side in financial services for some time. We've been primarily or have been primarily focused on management consulting. In the last two years, we've had great success beginning to penetrate more on the technology side, some in new accounts and some in existing accounts. I'll let Tom provide some more color on that. I'd see, specific to our client base, we're dealing with the largest banks in the world. Those organizations actually saw more of an uptick as individuals looked for an alternative to those regional providers. If anything, we saw increased demand in certain areas based on that. We don't really work at the regional banking level. We have a couple of examples, but zero impact with the couple we work with, and zero impact from the larger banking network that we're providing services to. Got it. It was good to hear like M&A focus coming back. Can you remind us like M&A areas, like which areas you will look at to add skills? Like, will it continue to be to increase offshore mix? Could there be shift in that strategy given like the new tools around generative AI and whatnot might become more interesting and could be more on-site focused? We're always looking to add skills, whether that's, you know, emerging newer technology, that we wanna ramp up quickly or in some cases it might even be just to add capacity and momentum to an area that we're already covering. It's a combination of all those things. I think we're always looking for new skills. To your point, you know, generative AI is interesting. I suspect there's not gonna be much out there in terms of opportunity around acquisitions yet, because it's so new in terms of, you know, certainly in terms of a service to clients. Then in terms of offshore, whether it's nearshore or offshore in India, yes, we're gonna remain open to that. If we find good tuck-ins that again fill gaps that we might have in those spaces, we'll pursue those. However, as Tom mentioned, and I think I mentioned in the script as well, we've got a great platform running in Latin America and Central America now as well. That team has gelled extremely well and has done a great job of rising to the added demand that we've provided them. We don't feel that we've got to do anything there. Again, we'll look for tuck-ins opportunistically in those areas, and then we'll continue to focus on skill gaps. Got it. Thank you. Thank you. Thank you. I show our next question comes from the line of Vincent Colicchio from Barrington Research. Please go ahead. Yeah, Jeff, could you give a little bit more color on, you know, the increased discussions you're having around taking business away from others? Is it, you know, consolidation to save costs? Is it, you know, unhappy with the deliveries of others? What is it? You know, it's a combination. Well, ultimately, it's more likely the latter, right? Most of the time. Clients are always looking to, and particularly our Fortune 1000 base that we focus on, have sophisticated procurement departments. They're always looking to rationalize the partner list, right? Their vendor list. We continue to emerge, in some cases, as one of the smaller players, but not always. We're one of the larger players in some cases. We continue to merge on the top or top tier of those lists across both existing and new customers. When that happens, typically, you know, somebody's losing out. We've been taking share away quite a lot. It is a satisfaction issue, that, you know, ends up resulting in a rationalization or a reconciliation of the vendors that are being used. It's a combination of both. We are certainly seeing some dissatisfaction. I won't name the names, but I think some firms out there are a little overstretched, and then obviously there's, you know, there's one that has other unique challenges. We've definitely seen some pickup there. Are you seeing increased, incremental increase in demand for offshore given cost sensitivities in the current environment? Also, I think I missed the organic growth offshore for the quarter. Yeah, the for last quarter? It was about 10%. This quarter, yeah, the Q1, I'm sorry. It was about 10%. In terms of... What was the first part of your question? Are you seeing an acceleration in demand for doing more work offshore given, you know, cost? Yeah, absolutely. No doubt about it. I think that's gonna continue, and, if anything, only accelerate. You know, right now we're running, you know, as I mentioned, about 10% versus, onshore was, you know, flat last quarter. That's, that ratio is what we expect now as we see revenue picking up and growth picking up, then we'll also expect that ratio, that kind of ratio to continue. It's been about 3 to 4 to 1, in terms of the organic growth offshore/nearshore versus onshore. To the heart of your question, absolutely. I think that's continuing now, and I think it's gonna continue into the future and only accelerate. Thanks, Jeff. Thanks, Vincent. Thank you. I show our next question comes from the line of Jack Vander Aarde from Maxim Group. Please go ahead. Okay, great. Good morning, guys. Thanks for the update. I only have a couple questions. Jeff, can you touch on the average billable rates and pricing power for both the onshore and offshore business? Maybe just how do your billable rates compare relative to the largest competitors today versus how your rates compared a few years ago? I would say our rates are higher relative to offshore, as it relates to offshore, relative to the big guys, right? They're still operating in a kinda 25-30 range, but that's because of their mix of business. They've been late to the game in digital, I think are still struggling, and that's where you're gonna get better bill rates. If you compare us to more of the self-proclaimed, native digital firms, we're actually getting a little bit better rate or maybe materially better rate than they are. I think that's because, in fact, we are more of a full-service company. We have more end-to-end capability, including the upfront strategy component, which tends to bring higher bill rates than they do. I would say, you know, in terms of the digital realm, we're at the higher end, but faring very well. In terms of the big picture, we're definitely above, you know, the big guys. That's all offshore. Onshore, our rates are still, you know, probably materially lower than the really big guys, like an Accenture, et cetera. Again, you've really got to look at the mix of business that they're providing, and then that's what's behind a lot of that. In terms of the ABR increase, by the way, I think maybe we mentioned this on the call, but I think it's out there in the stats. You know, it was about 4% in the U.S. and around 10% in both India and nearshore. That's a pretty healthy, a robust improvement in ABR. It helps to offset, I would say completely, wage inflation in all those geos. Okay, great. Appreciate the color there. Maybe just a follow-up for Jeff or maybe Paul as well. On the organic piece of the business, just given your comments on the pipeline strength, Tom was indicating the number of 7- and 8-figure deals continues to grow, it seems like this would set up an organic growth rebound in 2024. Is it too early to touch on that? Just any color on how you see organic growth and maybe as we get into 2024? Thanks. Yeah, absolutely. Our guide for this year is out there, pretty modest for the year, which I think is, you know, judicious given the backdrop. Who knows, maybe there's some upside surprise, I feel pretty good about the numbers we have out there now. In terms of 2024 and looking beyond, look, if the macro holds out to, you know, to at least status quo, if not maybe some improvement, God willing, I think our growth rate long term has to be in double digits. You know, I've talked about this before. One of the real important pivot points for the business, and we touched on this in the last question, is the growth of the offshore component. Once that offshore component gets beyond the 27% of revenue that it is today to closer to 50, this won't be a stairstep function, it's gonna be linear. It'll become more and more of a tailwind to top-line revenue growth. Again, some of the challenge right now is that we're still shifting and, of course, the bill rate ratio is about 3.5 to 1. That's a little bit of a hindrance or a little bit of a challenge to growth. Long-term, growth prospects, double digits. 2024, you know, same macro environment. I actually think we could be close to that level, if not beyond it. Back to your question, we'll know more as the year unfolds. It's a little early to talk about 2024, but that's, you know, at least philosophically or generally speaking, that's exactly where we expect, we would expect revenue growth to be. Okay, great. I appreciate the color. Thanks, guys. Thank you. Thanks, sir. Thank you. I show our next question comes from the line of Divya Goyal from Scotiabank. Please go ahead. Morning, everyone. Great color on the pipeline and the bookings here. Just wanted to understand, like, I know you, financial services and healthcare are two of your key segments. Are there any other industries where you're seeing that material uptick in that bookings and pipeline? What are some of the factors that might be driving that kind of a growth? Financial services and healthcare continue to be the largest industry verticals that we're in, but across automotive, retail, manufacturing, a little bit of telecommunications, we are actually seeing all sectors up as far as pipeline. You know, quite honestly, the solutions we provide really do cut across industry, and our client base is very well diversified. The reasons really vary by industry, but the macro is definitely between driving revenue growth for them and their clients and/or operational efficiency, and that cuts across all industries. Those two digital transformation trends are really industry agnostic. Yeah, no, that's helpful. Just on that question, like, just a follow-up to that is could you elaborate on what exactly is the kind of work that you do for the financial services client, including the banking sector or the insurance? Because, you know, from a digital consultancy standpoint, it's slightly different from what the cloud service providers or the IT services providers in that space do, right? I'm just trying to understand that key difference between what you provide versus what the other global IT companies are providing. Sure. Well, depending on which sector you're looking at as far as the global software vendors, we make their technology happen. Really depends on how you're comparing it. That being said, as I mentioned, you know, a great example would be the one I mentioned during the prepared remarks. You know, in that situation, we're working with the risk management arm of a very large Fortune organization, helping them with their Office of the Comptroller, working with regulatory and audit milestones, helping both from a technology perspective as well as a process improvement perspective. It's very specific to industry. We're bringing industry experts that understand their audit processes, as well as their loan origination processes, and then the underlying cloud technologies and automation technologies to make that more efficient. Okay. That's good color. Maybe I'll follow up later if I need to. Just one last question. I noticed that your software and hardware revenue went down, but the services went up. It was not materially down, slightly down, but it's just kind of curious if there was a trend that you noticed this quarter in the hardware/software spend. You know, I would say that we are not exposed enough really to that market. That's very opportunistic for us. It's good profit because we're already doing the work, right, to help the vendor partners sell the software, so we might as well take that margin. It's not a strategic focus for us. I wouldn't say that what we experience on that is really reflective of the broader market. Yeah. I guess the thing I'd add on that, too, is it's relatively lumpy and a small piece of our business. That's great color. Thanks, everyone. Thank you. Thank you. Thank you. I show our last question comes from the line of Maggie Nolan from William Blair. Please go ahead. Hi. Thank you. I heard your earlier commentary around utilization and attrition and, you know, just kind of balancing that with your thoughts around the back half of the year growth starting to pick up a little bit. Can you talk about, you know, your expectations for hiring in the coming quarter and the back half of the year, whether or not we'll see net additions on a quarterly basis again? Yeah, I think you will, as things begin to pick up. Obviously, we're gonna make sure that the utilization is running where we want it to, so we'll focus on that first and make sure we don't have any unnecessary bench. Certainly I would expect us, if we go the way we expect, that we will be hiring primarily offshore slash nearshore over the next couple of quarters, maybe a little bit in the U.S. Let me back off of that a little bit. We're always hiring, right? To replace even low attrition, we're always hiring. We're always looking for key talented people, you know, key people. We're always hiring at that level. In terms of just hiring into revenue, again, and I think we'll see some of that in the second half, making sure that we get utilization or maintain utilization where we want it. Okay. Then you gave some commentary as well around the, you know, bill rates that you're seeing, and the kind of annual increases there. Can you comment a little bit on client receptiveness to continued increases in bill rates, just given this environment and given kind of their shift in focus to maybe some different types of service offerings that you have? Yeah, I'd say, Maggie, as far as the rate conversation, you know, we typically don't have a lot of rate conversations. You know, we're not getting a lot of pushback. Our win rates are definitely not being adversely affected by rate. You know, I think we're judicious in our approach. Typically, with the shift to a mixed global approach, you know, we're able to see the cost savings on the macro, and it's not necessarily at the individual ABR perspective we receive pushback. You know, I think we have a good game plan as far as pricing strategy. I don't see any material changes to that in 2023. Okay. Thank you. Thanks, Maggie. Thank you. Thank you. That concludes our Q&A session. At this time, I would like to turn the conference back over to Mr. Jeff Davis, Chairman and CEO, for closing remarks. Once again, thank you all for your time today. Obviously, you see that we've got some good momentum going, in spite of the backdrop. We're looking forward to reporting how this next quarter comes along here in 90 days. Thank you again. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.