Thank you for standing by, and welcome to Perficient's Second Quarter 2023 earnings call. At this time, all participants are in 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. I would now like to hand the call over to Jeff Davis, Chairman and CEO. Please go ahead. Thank you. Good morning, everyone. This is Jeff Davis. With me on the call is Paul Martin, our CFO, and Tom Hogan, our President and COO. I want to thank you for your time this morning. We've got about 10-15 minutes of prepared comments per usual, 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? Thank you, Paul. Once again, thank you for your time this morning. As we discuss Perficient's second quarter and our revised expectations for the remainder of the year. Before we close, I'll comment on my pending transition to the role of Executive Chairman as well. Like Q1, revenue was up 4% during the quarter. Margins were impacted by the extension of sales cycles, clients adjusting budgets, and in some instances, projects ramping more slowly than we'd anticipated. However, we've long prided ourselves on maintaining best-of-breed margins and have already taken appropriate action on discretionary and fixed costs to ensure we return to our historical norms by the end of the year. We can't turn the ship on a dime, but do expect to exit Q3 much closer to 39% gross margins and exit the year closer to 40% gross margins. We're fearing as well as most in the industry, but the market has certainly slowed more quickly than we'd anticipated it would. All that said, we're continuing to pursue and win larger deals than ever before. In fact, Tom will speak to the specifics later, but during the quarter, we signed the largest single statement of work in the company's history. The win is a multiyear extension of an initiative that started in 2017. It's a program worth about a million and a half dollars per year in revenue, and we're now delivering more than $30 million annually to this client on that same work stream, as well as many others. Bill rates remained solid during the quarter. In fact, onshore bill rates were actually up 4% year-over-year. Our customers continue to be comfortable accepting modest rate increases because we're delivering value. Our transformation to a truly global entity remains underway. Offshore revenue grew nearly 20% during the quarter. 6% of that was organic. 58% of our billable resources are now located outside the U.S. Our technology and channel partners continue to recognize our contributions and importance to their businesses with various global and regional awards. In fact, in recent weeks, we've earned prestigious recognition from the likes of Microsoft, Adobe, and Sitecore. While clients are clearly proceeding a bit more cautiously right now, we remain engaged in many seven and eight-figure pursuits. Tom will talk in more detail shortly about the momentum across industries and our excitement around emerging technologies like generative AI. As we mentioned before, digital transformation is morphing into a digital business and is here to stay. Today, enterprises have no choice. They must consistently invest and deploy technology to grow or reduce costs. It's a competitive imperative. With that, I'll turn things over to Paul. Thanks, Jeff. Services revenue, excluding reimbursable expenses, were $226 million in the second quarter, a 4% increase over the prior year. Year- over- year, organic services revenue growth was 0.8%. Software gross margins, excluding reimbursable expenses and stock compensation, was 38.1% in the second quarter, compared to 40% in the prior year. SG&A expense was $44.2 million in the second quarter, compared to $40.9 million in the prior year. SG&A expense as a percentage of revenue increased to 19.1% from 18.3% in the prior year. The increase in SG&A expenses as a percentage of revenue was primarily related to increases in sales-related costs. Adjusted EBITDA was $48.2 million, or 20.8% of revenues, in the second quarter, compared to $51.2 million, or 23% of revenues in the prior year. Amortization was $5.5 million in the second quarter, compared to $6 million in the prior year. Net interest expense for the second quarter decreased to $0.3 million from $0.8 million in the prior year, primarily due to a $500,000 increase in interest income. Our effective tax rate was 24.9% for the second quarter, compared to 28% in the prior year. Net income decreased 5.1% to $26.4 million for the second quarter, from $27.8 million in the prior year. Diluted GAAP earnings per share decreased to $0.73 a share, compared to $0.77 in the prior year. Adjusted earnings per share decreased to $1 for the second quarter from $1.06 in the prior year. You can see the press release for a full reconciliation to GAAP earnings. I now turn to the year-to-date results. Services revenue, excluding reimbursable expenses, were $457 million for the six months ended June 30, 2023, a 4% increase over the prior year. Year-over-year organic services growth was 0.6%. Services gross margin, excluding reversible expenses and stock comp, was 38.6% for the six months ended June 30, 2023, compared to 39.4% in the prior year. SG&A expense was $88.1 million for the six months ended June 30, 2023, compared to $83.1 million in the prior year period. SG&A expense as a percentage of revenue increased to 19%, compared to 18.7% in the prior year. Again, the increase in SG&A expense was primarily related to increases in sales-related costs. Adjusted EBITDA for the six months ended June 30, 2023 was $98.3 million, or 21.2% of revenues, compared to $98.5 million or 22.1% of revenues in the prior period. Amortization was $11.3 million, compared to $12 million in the prior year period. Net interest expense for the six months ended June 30, 2023 decreased to $800,000 from $1.7 million in the prior year period, primarily due to $800,000 of increased interest income. Our effective tax rate was 25.8% for the six months ended June 30, 2023, compared to 23.3% in the prior year period. Net income for the six months ended June 30, 2023 was $53.2 million, compared to $54.9 million in the comparable prior year period. Diluted GAAP earnings per share decreased to $1.48 for the six months ended June 30, 2023, compared to $1.52 for the prior year period. Adjusted earnings per share increased to $2.04 for the six months ended June 30, 2023, from $2.03 in the comparable prior year period. Our ending billable headcount, June 30, 2023, was 6,320, including 5,936 billable consultants and 384 contractors. Ending SG&A headcount at June 30 was 989. Our outstanding debt, net of deferred issuance costs as of June 30, 2023, was $395.7 million. We also had $60.5 million in cash and cash equivalents as of the end of the quarter, and $299.9 million of unused borrowing capacity on our credit facility. Our balance sheet continuously was very well positioned to execute against our strategic plan. Finally, operating cash flow increased to $65.1 million for the six months ended June 30, 2023, from $34 million in the comparable prior year period, primarily due to a reduction in accounts receivable. I'll now turn the call over to Tom Hogan for a little more commentary behind the metrics. Tom? Thank you, Paul. Good morning, everybody. We booked 38 deals greater than $1 million during the second quarter of 2023. Compares to 45 in the second quarter of 2022 and 63 in the first quarter of 2023. While volume did slow during the quarter, it's worth pointing out, thanks to a few very large deals, including the record-setting win Jeff referenced earlier, our average deal size was larger than ever before in the quarter. Our net pipeline, weighted, unweighted, remains very solid. We continue to remain well-diversified from a customer, industry, and platform perspective. Healthcare and financial services remain the strongest verticals. We're also excited about our momentum in both the manufacturing and automotive. We're already working with many of the largest entities in each of those industries. Others are beginning to understand the deep domain expertise, experience, and strategic insights we can bring to their business. For example, in the coming weeks, we'll release a proprietary electronic, or excuse me, electric vehicle market study in which we surveyed more than 1,000 EV and non- and never EV owners and interviewed consumers, dealers, and OEMs to better understand the barriers and rationale for purchasing EVs. Market insights are a significant focus area for OEMs as they prepare for the continued growth of the EV segment and need to build lifetime relationships with owners. We look forward to sharing our industry research and further assisting OEMs on their EV journey. Jeff mentioned the substantial eight-figure win in the manufacturing space earlier. That's a project delivered globally with Perficient colleagues from the U.S., Latin America, and India. Another example of our seamlessly integrated global delivery, leveraging talent from our three primary regions, is where we're assisting a privately held global producer and distributor of architectural products in creating modern, cloud-native, and user-friendly web application. Our global team modernized and consolidated several legacy applications into one application that analyzes several product variables to help the distributor create optimal products for its buyers. After initially launching in Poland, a subsequent launch in Italy, planned for later this year, will kick off the application's rollout to all distributors to their global plans. You may recall on last quarter's call, we discussed the launch of Envision Online, our 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 industries, markets, and companies, is informed by real-life execution and proven results. Enterprises can quickly understand where they stand relative to competitors, determine where gaps exist, and how to address them. Since launching in April, we've continued to mature the platform, which now defines more than 500 capabilities across 13 key business areas such as marketing, sales, AI, customer service, commerce, loan origination and servicing, automation, and data, just to name a few. The platform selection component now includes more than 500 vendors and 6,700 requirements across more than 70 platforms, including digital experience, commerce, marketing, and AI. We currently have five projects leveraging the tool with large customers and have discussions assessment that several more and meaningful inbound interest beyond that. Obviously, there's a lot of discussion around generative AI and its near and long-term impacts on enterprises, industries, and society.... AI in general is a space we've been in for many years, going all the way back to our work with IBM around Watson, among other tools. We have launched countless AI, chatbot, data, customer-centric, and machine learning platforms and products for our clients. Today, we have significant dialogue and engagement around generative AI with customers as they assess what the next step in this technology means for them in terms of risk and opportunity for their organization and their clients. I don't think a day goes by that we aren't engaged with clients on generative AI. Most importantly, we're actively doing billable work, implementing solutions with clients, and talking with many more. Companies are turning Perficient as a partner to help them understand the potential in leveraging generative AI. I'm also excited to share that we have launched the first of its kind global innovation group at Perficient around generative AI. We have hundreds of our colleagues around the world collaborating, sharing knowledge, and developing use cases for our customers, specifically leveraging generative AI. Our customers have always appreciated our pragmatism, experience, and expertise. When working to tackle new areas of opportunity like generative AI, leveraging a global team where our clients can tap into the best talent in the industry, independent of physical location around the world, to solve challenges, this is exactly why organizations turn to Perficient. Finally, it's worth noting Perficient was recently recognized as the number 12 top employer in the United States on Energage's list of top 100 employers. Energage surveys of more than 70,000 organizations annually. To be ranked number 12 in the entire country is something we're very proud of, particularly because the recognition stems directly from feedback of our colleagues and the feedback they provided. The best and brightest individuals in our industry want to be part of our journey at Perficient, and it shows. With that, I'll turn things back over to Jeff. Thanks, Tom. As I mentioned earlier, I was going to comment a little bit on my pending transition. This is somewhere near my 90th earnings call at Perficient. It's kind of hard to think about. I did want to thank the analysts here on the call and those who can't join live. I really appreciate, you know, your, your coverage and feedback over the years. It's really been invaluable as we've grown. I also want to point out or reiterate, as stated in the release, that I'll be remaining as Executive Chairman indefinitely. I will still be a part of the team and am thrilled about that. Beyond that, I have a tremendous amount of confidence, full confidence in Tom and the extended executive team, as well as all the rest of Perficient, really. Our extended executive team, you know, represents folks that have been here on average, a tenure, well over 10 years, and experience in the industry, approaching 20 on average. We've got a deep bench, and I'm very confident in them and their ability to take this very special company forward. Very talented and dedicated colleagues across the world work at Perficient. I appreciate all of them, and I think, again, we've got something really special here. I'm very proud of it and very proud of where the company is headed. I'll turn my attention or our attention to the outlook. Perficient expects its third quarter 2023 revenue to be in the range of $220 million-$226 million. Third quarter GAAP earnings per share is expected to be in the range of $0.56-$0.60. Third quarter adjusted earnings per share is expected to be in the range of $0.89-$0.94. We expect our full year 2023 revenue to be in the range of $900 million-$916 million. 2023 GAAP earnings per share to be in the range of $2.73-$2.84, and adjusted earnings per share to be in the range of $3.93-$4.05. With that, operator, we can open up the call for questions. Thank you. As a reminder, to ask a 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 Kyle Peterson of Needham. Hey, good morning, guys. This is Kyle Peterson. I'm for [uncertain]. Thanks for taking the questions. I just wanted to touch on, you know, the outlook, you know, particularly some of the weaker demand. Was there any concentration in, you know, verticals or types of projects, you know, that were hit, you know, particularly harder than others? Was some of the softness, you know, just pretty broad-based? Yeah, it was pretty broad-based. Again, I want to reiterate that, that the source is mostly delayed decisions or slower starts. A little bit of slower spending, but really, it's, it's kind of a gap in the bookings as it relates to some of these closes. Now, we are seeing some signs of improvement, but we're trying to be very conservative here, obviously, and guide to a number that we're comfortable with. Hey, if we, if things are better than we expected, then that's great, but we don't want them to be worse than we expect. I would describe our outlook that way. Makes sense. Just a quick follow-up on the cost side of things. I know you guys mentioned that you had taken some actions on that and taken the discretionary spending. You know, how should we think about, you know, the margin trajectory as long as, you know, the demand environment remains a little bit softer here? You know, should 3Q be the trough, and then we start to get an improvement in margins in the fourth quarter? Or do some of the cost actions take a little bit longer to flow through the P&L? Actually, we're gonna see some modest benefit from those actions in the third quarter. I think the gross margin in the Q2 was around 38, it's a change. We're looking at about 39 for Q3, so about a 70, 80 bip improvement there, and then actually 40 for Q4. Obviously, that's all dependent on the macro environment, but I think we've got things well at hand in terms of the reductions that we've made and any further ones that are necessary. Makes sense. That's helpful. Thanks, guys. Thanks, Kyle. Thank you. Our next question comes from the line of Brian Kinstlinger of Alliance Global Partners. Congrats, Jeff. It's been great working with you for over two decades. Yeah, likewise, Brian. There's a lot of history there. I think that you're pretty much the longest. I remember when your company was acquired in. You mentioned, I wanna follow up on the margin question in the press release about getting back to industry-leading margins. With the delays, should we assume that you're cutting billable staff to improve utilization, or is it more on the overhead side? You know, it's both. Fortunately, on the billable side, attrition is a natural element of the industry and the business. We're gonna allow that to drive as much as we can before we take, you know, more aggressive steps. We'll do what we need to. I think we've got a long track record of doing that, it'll be a combination of both. Great. My follow-up, I think this quarter as well as last quarter, you mentioned your excitement around automotive. The numbers suggest the segment is down about 50% year-over-year. I'm curious what caused that within the tr--. What makes you so excited about the trends that creates an opportunity for Perficient within automotive? I think Hey, Brian, this is Tom. I think part of that also is we classify some clients differently year-over-year. It's not a fair compare year-over-year. As we looked at manufacturing and the OEMs, we wanted to get a segment that was a little more indicative of more manufacturing versus automotive. Year-over-year, the true automotive is still up, but that's what you're seeing in the year-over-year compare, is just move some clients from one to the other. Thanks, Tom. Particularly within automotive, what excites you so much? Is it that they're late to adopt digital transformation? Is there something going on with the industry? I mean, clearly, we all know the push to EV, but what does it all mean to Perficient, and what's the opportunity for you? You know, candidly, we've had so much success with only a select few number of the OEMs, now we're seeing more breadth and additional OEMs coming on board. That's really where that I see the excitement, is bringing in new OEMs into our family, that we can bring our Perficient story to. It's not necessarily any industry specifically. It's really more on bringing more clients of what we're already doing in that space, that's what's driving the growth and why I'm excited about it. Great. Thank you so much. Thanks, Brian. Thank you. Our next question comes from the line of Maggie Nolan, of William Blair. Hi, thank you. On the demand side, are the slower starts fairly widespread? Were there, in particular, any large, any particular clients or large deals that were slow to start, didn't materialize in the way that you expected, more so than others, or maybe by vertical? Any color you can share there? It's pretty broad-based, but if you dive into it, certainly, you know, as you would expect, there was more impact from some of the larger engagements, that we expected to start sooner than they have. I will, and I'll ask Tom to comment on this, actually, 'cause, we had some recent discussions about, you know, some modest improvement or some signs of positive signs. I think there was a large engagement, as an example, that we've been working on, getting off the ground for a number of months now, that's been delayed and delayed, but now is kicking off, you know, this quarter, or even as we speak. We are seeing... I think it's good to note, and a positive sign, that it's more delays than out halts or cancellations, some budget cuts, but I'd say it's broad-based. Tom, you want to. I agree. You know, it, it's definitely broad-based. You know, the additional piece in there, Maggie, is what we're seeing is, some of these larger deals, which, you know, I'm excited about the larger deals we're seeing and getting in front of, they're incrementally starting, whereas we thought they were going to ramp up a lot faster than they were. What we're seeing is maybe a six-digit type of statement of work, or excuse me, an 8-figure statement of work turning into a seven statement of work, a seven-digit statement of work, and incrementally kind of getting going to start, and then making, you know, decisions in future quarters of when to ramp up the project. We have a handful of those. That's what's really bringing into the delay. It's not necessarily projects aren't starting, it's a matter of they're biting off smaller features and smaller products, which we're getting going, which then we're driving momentum, which then brings in the bigger buys down the line. Okay, that's helpful. Thanks. Then you talked a little bit about where you expect-. ... gross margins to be by the end of the year, in that fourth quarter, and you mentioned perhaps there's maybe some effort to drive some operating leverage as well. What should we expect, in terms of SG&A as a percentage of revenue, and your ability to kind of protect the EBITDA margin? We're, you know, we're actively, as we talked about, looking at some cost reductions in SG&A, and, you know, and we're looking to be able to, you know, to get those back close to last year's levels or maybe even a little better because bonus is going to be less in 2023 than it was in 2022. Okay, great. A couple thanks, and congrats to you both, Tom and Jeff, and thanks, Paul. Thanks, Maggie. Thank you, Maggie. Thank you. Our next question comes from the line of Puneet Jain of JP Morgan. Hey, thanks for taking my question, and congrats to both Jeff and Tom. Excuse me. I quickly wanted to start with, like, the overall demand macro environment. What needs to happen for clients to turn on project-based spending? What are, like, the early indicators or trends that you watch that would suggest that things have begun to improve? Well, it'll be accelerated bookings, re-accelerated bookings. You know, we talked about the fact that obviously bookings slowed, which is, you know, what caused the miss in the, or at least the low end of the guidance in Q2, and what caused the guidance adjustment for the rest of the year. You know, I do think there's a broad-based issue here that, well, quite obviously. You're not, you know, attrition's way down in the industry. That's a key indicator, and a broad-based indicator as well. You know, there's something afoot here that isn't isolated to us, and I would say it's not even isolated to the industry. You know, the short answer, and this is just speculation on my part, is that, you know, I think the sentiment, and the outlook, and the, and the C-suites basically has to improve. You know, I think, there's a lot of uncertainty, I'd say, in the affecting the macro environment right now, and I think that's exactly what's driving some of this caution. Got it. Just to be clear, You see, like, large deals in the pipeline, the clients are delaying signing of those deals, or they are? That's exactly. Ramps of signed work? It's really both. The bigger impact comes from the delayed signings, but the delayed ramp up, and as Tom pointed out, it's not necessarily a delayed start, but it's a slower start than would be typical, because they want to kind of meter out that cash a little slower. It's really those two things. Quickly, are there any currency effects impact Colombian peso? It seems like had appreciated versus the US dollar. Is there any effects impact to margins that we should think about? There has been a little more FX effect in Q3, you know, primarily, with LatAm, you know, it with what currencies have done there. But, you know, we had part of it, but there is some exposures as those, you know, as the Colombian peso strengthens against the dollar, that increases our costs. Got it. Thank you. Thank you. Thank you. Our next question comes from the line of Vincent Colicchio of Barrington Research. Yes, congrats, Jeff and Tom. Jeff, I think this may have been asked, but it wasn't clear to me. Has there been a shift towards cost reduction this quarter versus last quarter? Yes. Yeah. I mean, last quarter, keep in mind, you know, the experience we had last quarter vis-à-vis the bookings was double-digit organic growth. That was the third incrementally incremental growth quarter in bookings. Third quarter improved, fourth quarter improved, and the first quarter improved from, you know, significantly. We didn't really see at that time, that we were gonna have a need for cost reduction. Obviously, that became apparent to us, you know, probably about the middle of this quarter as things started to shift pretty dramatically. We began to take those steps, but as I mentioned in the script, it takes a little time, obviously, for that to sink in, and we do expect to see benefits from those steps that we've already taken it within this quarter. That was helpful, but I was referring to cost reduction projects. Is that, are you seeing a shift in demand towards that type of thing? Oh, sorry. No, no worries. Yeah, that's correct. Those are our own cost reduction projects. Yes, I'll ask Tom to comment on that. Yeah, I think, I don't know if we've seen an uptick in that. That's always an important part of what we deliver to our clients. I don't know if we've seen an uptick in that or not. I'll let Tom comment on that. I would say not materially, Vincent. When we look at the projects we're working on, there's definitely cost improvements and optimization projects in the digital transformation journey we've been on. There's definitely been a focus to that reallocation of dollars to take dollars out. Absolutely, it's happened, but there's still a very healthy pipeline of clients trying to bring revenue in. Client engagement, using new technologies, engaging customers, differently. You know, if you're, go back one year, absolutely it was more on revenue generation versus cost takeout. Yes, there's been an increase in year-over-year projects and cost takeout, but they've always been there. Has there been, to date, any meaningful cancellations, and do you expect any potentials coming here in the next quarter? ... No, there hasn't been any meeting cancellations. We've had a couple of individual organizations have slowed down a little bit. They've shifted some projects to less U.S. employees, more of our team in India or Latin America, but not out cancellations. I don't see any cancellations, you know, knocking on wood, here within the quarter. Those aren't conversations we're having. One last one. I assume it's early to ask. Any thoughts on how coding efficiencies may impact your business from generative AI over time? You know, it's early, as you mentioned. You know, right now the conversation is really more around interacting differently with customers, interacting differently with applications. You know, there are some things we're using internally to look at what we can do on the software development life cycle to use generative AI tools, not necessarily on coding, but more on testing, and things of that nature. We're playing with all of it to see where it goes. To your point, I think it's early, and you know, if nothing else, right now, we see a lot of the conversation about how do we interact differently with our customers, is really more the conversation versus how do we use this technology to generate code. Thanks, Jeff. Thank you. Thank you. Our next question comes from the line of Divya Goyal of Scotiabank. Good morning, everyone. Congratulations, Jeff. Congratulations, Tom. Talking about this demand here, I wanted to understand, what is the level of visibility that you have in your client demand? Is it fair to assume that any sort of cancellation or delays have already been baked into this new guidance, or can we potentially see more coming in the quarter ahead? Yeah, I'm gonna answer the first part of that, and then I'll let Tom address the second part. You know, this is a dynamic business. Perficient's dynamic, maybe, you know, within an industry that's very dynamic, within an economy that's very dynamic right now, as I mentioned earlier. Things can change pretty rapidly, and we're not the only ones seeing that, of course. I'd say a broad-based, you know, answer, you know, we certainly believe that we've got some caution baked in. It's not impossible that, you know, that it's more than we think. It's also possible that it's better than we think. If Tom has more specific to the second half or anything else he wants to add, I'll let Tom take it. I think, you know, as we look at the year, and as Jeff was mentioning, for the last sequential quarters regarding booking results, we're using that for our decision-making on what the future quarter would look like. Using the same information that we know about Q2 and what we're seeing in current conversations with our customers, we think that we have the right level of guidance for Q3. As Jeff mentioned, it's dynamic, but at all the data we know now and the conversations we're having, we think this is directionally correct for the quarter. As Jeff mentioned, it's dynamic and could change one way or another, but I think it takes into effect everything we've learned in the last couple of months, as we look to the second half of the year. I know. That's, that's helpful. Jeff, one thing, if I heard it right, I wanted to reconfirm. You did mention that the customers have been okay with the rate increases. When we look at the broader sector, we hear about the pricing pressure increasing. It just seems, the two thoughts seem a little contradictory here. I'd appreciate if you could provide some more color on these rate increases versus the pricing pressure on the business. You know, I think that's a testament to the value of the work that we're delivering. You know, we've really shifted the portfolio over the last several years to these, to those items that are high value, high demand, high ROI. Clients' tolerance level, because they understand that to deliver these things that are critical in terms of the time frame that they're trying to deliver them, they're meeting market goals. It's critical that we meet things, deliver things on time, and also with high quality. We've got a proven track record of demonstrating the ability to do both of those things. Clients come to us and rely on us to do that, and they don't mind paying a little more to get it. That's great color. Just one last question for me. I was trying to understand if you're seeing any change in dynamics when it comes to the onshore versus the nearshore and the offshore business. Are you seeing reshoring picking up at all, or are you seeing that cost-saving initiatives and enhancements towards the nearshore-offshore demand to continue to pick up? I'll let Tom respond to that. I think we've got a great dynamic going there, but I'll let Tom answer. Yeah, we continue to see, you know, individual organizations liking our Latin America and India story. You know, also, too, the pricing pressure, that's also the release valve we have. As we built out global depth around the world, you're not sacrificing quality of talent as you shift delivery to Latin America or to India, is also how we're able to maintain ABR. As we're looking to reduce ABR for our client, we leverage our teams in Latin America or India versus having to sacrifice ABR on our U.S. team. As far as reshoring, you know, I'd say that that's a pendulum that goes back and forth, but right now, definitely not a situation that we're seeing. A couple of clients have always been interested in that and always will be, but for the majority of our organizations are looking for that global dynamic organization, as we continue to see. You know, just to add one more thing there. As, as, Tom highlighted, LatAm, India, North America, we, we've had clients on a fairly regular basis, and I'm talking large, sophisticated Fortune 100 companies, talk about the fact that we've got a more cohesive, integrated strategy to deliver from any one of those geos and bring together the best team at the best value, that we can for the customer. The feedback that we're getting from, at least to some of those, is that we've got a better capability there than even some of your household, brand names in the industry. That's good to know. Thanks a lot for your answers, everyone. Thank you. Our next question comes from the line of Jack Vander Aarde of Maxim Group. Okay, great. Good morning, guys. Congrats, Jeff and Tom, on your next leadership roles. I'll just start with a question on the M&A front. I don't think that's been addressed yet during this call. Any updates on M&A and potential acquisitions as we head into the second half of 2023? Just any changes to the overall acquisition strategy that you've mentioned in the past? Thanks. Yeah, we're playing a fairly slow game there, due to the valuations are really high. Obviously, you know, there's some uncertainty in the industry, so we wanna make sure we're picking carefully. That said, we do have a couple of firms that we're looking at, that we're in, you know, early stages, but moving along, moving the ball along. We'll see how those play out. Still intended to use M&A as a part of our overall strategy. Yeah, probably playing a little bit of a slow game right now there. Okay, great. I appreciate the color there. Just back to the overall pipeline and just kind of general sense of customer contracts, larger contracts, sales cycles. Just how would you compare maybe your level of visibility and comfort levels with forecasting your deal pipeline and conversions and potential risk of cancellations to maybe what you were looking at a year or two ago during the pandemic and those risk of cancellations in contract delays? Just what's your level? How would you compare where we are today versus your outlook maybe a couple years ago? Yeah, I would say that, you know, that the pipeline remains strong. I would like to see the gross pipeline even larger than it is. Obviously, we're working on that and actually seeing some improvement there. It's still up, by the way, pretty substantially. It's a matter, again, of getting those deals closed and getting them closed, you know, in a timely manner. Visibility, I think, is similar to what it's always been in terms of outlook. What, you know, has obviously muddied the waters here a little bit is that what's shifted, as we mentioned before, is that some of these delayed starts, some of these slower starts, are really just hard to predict. They are atypical of our experience. It's, it's difficult to predict those. Again, as we mentioned earlier, I think we've done a pretty good job of baking in as much of that as we can as a cautionary measure for the second half. Yeah, it's, it's, things can change pretty quickly. Okay, great. I appreciate the color there. Again, congrats on your roles. Thank you. Thanks, Jack. Thank you. I would now like to turn the conference back to Jeff Davis for closing remarks. Sir? Yes, thank you all for your time today, and thank you all, for the last, 20 years that I've had in this role, 22 years. As I said, I will still be around, but not necessarily in this forum anymore. Thank you all. It's been fun. I'm sure Tom and Paul look forward to speaking to you in about 90 days. This concludes today's conference call. Thank you for participating. You may now disconnect.