Telus Digital Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
November 3, 2023

Key Takeaways

  • TELUS International delivered 8% year-over-year Q3 revenue growth and boosted its adjusted EBITDA margin by 370 bps sequentially to 21.7% through aggressive cost optimization.
  • Revenues were pressured by a 23% decline from the third-largest social media client and elongated sales cycles, highlighting ongoing client concentration risk.
  • The company officially launched FuelIX, its end-to-end Generative AI platform for customer experience, positioning TI as a partner of choice for GenAI-driven CX transformation.
  • Its AI & Data Solutions unit is on track to complete 1 billion tasks in 2023—up 160% in GenAI and LLM services—and has grown its customer base by 30%.
  • Management reaffirmed full-year 2023 guidance (revenues of $2.70–$2.73 billion; adjusted EBITDA of $575–$600 million; EPS of $0.90–$0.97) while emphasizing prudence amid macroeconomic uncertainty.
AI Generated. May Contain Errors.
Earnings Conference Call
Telus Digital Q3 2023
00:00 / 00:00

There are 13 speakers on the call.

Operator

Good morning, ladies and gentlemen. Welcome to the TELUS International Third Quarter 2023 Investor Call. My name is Jonathan, and I will be the conference facilitator today. At this time, all lines have been placed on mute to avoid background noise. After the speakers' remarks, there will be a question and answer period.

Operator

I would now like to introduce Jason Meyer, Head of Investor Relations and Treasurer at TELUS International. Mr. Meyer, you may begin.

Speaker 1

Thank you, Jonathan. Good morning, everyone. Thank you for joining us today for TELUS International's Q3 2023 Investor Call. Hosting our call today are Jeff Pierrot, President and Chief Executive Officer and Vanessa Canoe, our Chief Financial Officer. As usual, we'll begin with some prepared remarks, where Jeff will provide an operational and strategic overview of the quarter, followed by Vanessa, who will provide some key financial highlights.

Speaker 1

We'll then open the line to questions from prequalified analysts before turning the call back to Jeff for his closing remarks. Before we begin, I'd like to direct your attention to slide 2 of the supplementary presentation available for download on this webcast and also available on our website at telusinternational.com/investors. The statements made during this call may be forward looking in nature, including all comments reflecting expectations, assumptions or beliefs about future events or performance that do not relate solely to historical periods. These forward looking statements are subject to risks and uncertainties, which may cause actual results to differ materially from our current projections. We assume no obligation to update any forward looking statements.

Speaker 1

Jeff and Vanessa will also discuss certain non GAAP measures that the management team consider to be useful in assessing our company's underlying business performance. An explanation of these non GAAP measures and a reconciliation to the comparable GAAP measures can be found in the appendices of today's supplementary presentation, along with the earnings news release issued this morning and regulatory filings available on SEDAR Plus and EDGAR. I I would also like to remind everyone that all financial measures we're referencing on this call and in our disclosure are in U. S. Dollars unless specified otherwise and relate only to TELUS International results and measures.

Speaker 1

With that, I'll now pass the call over to our President and CEO, Jeff Pierrot.

Speaker 2

Thank you, Jason. Good morning, everyone. Despite an operating environment that continues to be challenging, Sallis International delivered steady 3rd quarter revenue growth of 8% on a consolidated basis. We've made good progress Improving our profitability profile relative to the 2nd quarter with our adjusted EBITDA margin increasing 3 70 basis points, Thanks to our team's focus and diligence in executing upon multiple cost optimization programs across the business. Since last quarter, we've worked to better balance demand and supply, especially in our European operations, which in turn has contributed to the sequential quarter margin improvement we delivered as Vimeshwar will share in more detail shortly.

Speaker 2

Encouragingly, Our sales funnel still sits north of $2,000,000,000 and while sales cycles remain elongated, our global sales team continues to acquire new logos. For example, during the Q3, we won new business with the largest food ordering and delivery company in the U. S, a luxury fashion retailer and a well known property and casualty insurance company in the U. S. Within our existing client base, we expanded engagements with a leading Canadian bank, the world's largest technology company by revenue, a leading live sharing and food delivery provider and the world's leading short form video platform.

Speaker 2

We also continue to successfully expand volumes with now our 2nd largest client, Google. Moreover, despite the challenging environment, Our team at WillowTree continues to win new business as well, with new client adds in the quarter that included a U. S.-based payment processing and information management services provider, an American Multinational Consumer Credit Reporting Agency, an American Multinational Financial Services Corporation that owns and operates stock exchanges in the U. S. And one of North America's top banks, an impressive roster of new clients that we're very encouraged by.

Speaker 2

Similarly, WillowTree also deepened its engagement with several existing clients in the financial services sector and across other verticals, including an American multinational pizza restaurant chain And importantly, with our parent company TELUS. Among our joint wins with WillowTree are one of the world's most trusted providers of mission critical software for legal, financial and business professionals as well as a leading innovator in connected enterprise safety technology. Let me now turn our attention to a topic that's top of mind across our industry. The opportunities and impacts of generative AI in our business, On our operations and team and our clients is a key strategic focus of our executive leadership team. At a broader economic and multi industry level, We believe that the disruptive impact of generative AI will affect most business functions.

Speaker 2

To quote the findings of a recent McKinsey study, The total percentage of work hours that could theoretically be automated by integrating technologies that exist today is estimated to be 60% to 70%, With the acceleration of GenAI adoption, pulling forward the potential for technical automation and making it a key strategic consideration with long term implications for virtually all businesses. While digital transformation has been a priority for many businesses for several years now, The advent of GenAI has placed even more emphasis on our clients' need to embrace these latest technology advancements In order to unleash efficiencies and design, build and deliver enhanced customer experiences or risk being left behind. Specifically, when it comes to CX center operations, according to Deloitte, nearly 2 thirds of contact centers are delivering disjointed customer experiences Across communication channels and 34% of customers according to the Call Center Management Association are most frustrated When passed to another representative during a contact or call. To address these issues, we believe that the time is now for GenAI to help transform the CX journey, offering meaningful value creation for customers as well as the businesses that serve them. And at TI, we positioned our business as a partner of choice to our clients as we bring them the latest tools and strategic thinking to best transform their operations.

Speaker 2

With our assets across CX, AI and full digital stock, including WillowTree in particular, we're uniquely positioned to be a leader In this next big phase of the transition to digital first CX. To that end, I trust you've all seen our announcement earlier this week Marking the official launch of Fuel IX, TELUS International's enhanced solution to integrate GenAI into our clients' customer experience operations. It would have been easy to race out earlier this year issuing press releases with 1 off JAI tools and single task bots. At Intellus International, we instead focus on enhancing our existing solutions, advancing the development of incremental capabilities and bring together under one umbrella an end to end offering for clients to address their evolving needs around integrating Jinai into customer experience operations From ideation to implementation, Fuel IX brings together a full spectrum of intelligent experiences across customer, Digital, voice, user, employee and human interaction. It's a robust and comprehensive suite of capabilities that includes digital consulting, At GemAI Jumpstart 8 week accelerated program for clients new to AI, along with data services and analytics, as well as web and mobile application development.

Speaker 2

We believe it's only through this holistic view encompassing all of the internal and external aspects of a customer engagement The Gen AI technology can create tangible value for our clients. With Fuel IX, our clients have end to end support around how they should think about Aon, integrated into their CX operations or enhance already existing capabilities. Importantly, our integrated solution addresses the bottleneck many companies face in getting accurate, high quality data sets To enable the success of GenAI capabilities and accelerate the pace of a proof of concept design to getting a GenAI enabled solution into production. Critically, all of this work is done within a secure environment where client data is protected and private. And at each step of our engagement is guided by TELUS International's humanity in the loop approach with reinforcement learning through human feedback to suppress data inaccuracies and bias.

Speaker 2

In terms of monetization, we're using a solution as a service model with Fuel IX being available via an agile hybrid pricing structure With licensing tiers tied to accurately reflect how our clients are leveraging the various capabilities enabled by the platform. Several of our clients are already benefiting from the Fuel IX offering, including our parent company TELUS as well as iRobot to name but 2 who were both quoted in our press release from earlier this week. Additionally, as part of our JennyI Jumpstart program, Our team at WillowTree is working with a leading global financial services firm to create a GenAI customer service chatbot to empower customers With a robust conversational literacy tool. I look forward to sharing more details about Fuel IX and the proliferation of compelling use cases In the quarters ahead. As we typically have found these calls, I'd like to now share some of our other examples of our work over the past quarter.

Speaker 2

For many years, TI has engaged with some of the world's largest games publishers, developers and platforms supporting millions of gamers. One such client, A popular gaming platform that enables players to create their own games as well as play other user created games was experiencing a surge in its player community to quickly overwhelm their existing content moderation systems, revealing insufficient staffing and technology infrastructure, which led to a rise in complaints, Scams, offensive content and toxicity. They turned to TELUS International to protect their current global player community and to ensure their safety program was designed to rapidly scale in order to be able to keep pace with the community's future growth. Right away, our trusted safety experts identified the need to moderate an array of user generated content both in game and on Discord servers as well as within the immersive experiences created by players on the platform. Additionally, given the prevalence of young players on the platform, ensuring adherence to community and government guidelines was paramount For player safety, we deployed a team of content moderators or digital first responders to promptly remove bad actors, Eliminate violating user generated content and block spam.

Speaker 2

What's more, we set up a critical incident investigation process with law enforcement notifications for situations deemed to be high risk. In our role as a trusted advisor, we helped our clients align their player safety program with strategic initiatives, including the addition of new lines of business like voice moderation and moderation related appeals. As a result, in close partnership with our clients, We've created a dedicated content moderation team for them as well as a comprehensive wellness program and mentorship program to ease the learning curve for new team members serving this client. We've now grown this team to well over 1,000 moderators with the capacity to process more than 11,000 tickets per day and up to 20,000 moderated items Per team member per month. Moreover, we've achieved impressive results in improving and sustaining operational excellence metrics for this client, including content moderator attendance, Customer satisfaction and quality assurance, whilst guiding the creation of the policy documents and framework for phishing prevention and information security, which has since been applied across the client's entire vendor network.

Speaker 2

Another example I'd like to share with you today comes courtesy of our Digital Solutions line of business where TI reimagined and subsequently constructed a sophisticated cloud infrastructure for a successful telecommunications company in the U. S. This large service provider of pay television and retail wireless services Needed to transform their offering after acquiring a mobile virtual network operator or MVNO in order to offer affordable mobile services to current and potential customers. They needed to build the technical infrastructure that would resolve the incompatibility between the acquired operators' infrastructure And what our client envisions for the combined entity in the future, in particular to reimagine their operations and billing support systems. Our clients turn to TELUS International to lead the configuration of numerous but highly complementary Amazon Web Services Technologies to create a future midi operations and building support infrastructure.

Speaker 2

The solution was implemented on the AWS cloud platform, Providing scalable and flexible hosting for the application components, leveraging the AWS toolset to create the infrastructure specifically tailored for our clients' needs, Our TI team enables efficient order management and provisioning to the client's operations, ensuring proper sequencing of tasks and facilitating communication with external systems. Other features of our solution include a task, progress monitoring and management of tickets to maintain operational efficiency and reliability as well as enhanced data collection And proactive alert setup, enabling our clients to gain real time insight into the performance and health of the deployed technology stack. Our team's expertise in identifying and implementing the right technology for a client specific need help this particular telecom provider realize significant And customer improvements, including greater self-service functionalities for new plans and multi line accounts, the introduction of new compatibility and enhanced account management With a 70% reduction in build cycle process time and a 35% acceleration in time to market for new plans, new devices and activations, as well as optimal system uptime and successful completion of goals for key operational processes. The next example I'd like to share today is from our team at LittleTree and their work to enable a better travel experience for customers of BrightLine Trains Florida, a new high field railroad in the United States.

Speaker 2

As operations resumed emerging from pandemic lockdowns, BrightLine Trains Florida realized its original digital properties needed to scale with rising passenger demand and planned market expansion. They chose WillowTree as a digital partner to help get its flagship mobile and web app experiences on the right track. WillowTree began with a comprehensive omnichannel audit of the existing customer journey. From passenger interviews to deep dive with experts in rail travel, They moved rapidly from problem exploration to envisioning a new travel experience that sold for pain points along the journey. WillowTree's North Star, the guiding objective for this engagement, is identifying scalable in app revenue opportunities for this client.

Speaker 2

That is creating frictionless path to purchases and upgrades. Once the future state customer journey was clearly defined, The WillowTree development squad built the next generation of the client's front end web and mobile experiences powered by Adobe Experience Manager. With the WillowTree solution, our clients' customers are able to efficiently find and book tickets, customize their trip and easily access tickets through a digital wallet. In addition, this consolidated platform unifies customer data to deliver more personalized marketing campaigns that engage customers and drive revenue opportunities for BrightLine Trains Florida. In another example, our team at WillowTree spearheaded the digital transformation of a medical learning library to the release of native iOS and Android apps for a major global education company McGraw Hill.

Speaker 2

With the rapid digitization of education materials, McGraw Hill's global professional team is partnering with WillowTree to fundamentally reimagine how they educate the next generation of medical professionals. Today, our team at WillowTree is supporting McGraw Hill Professional as they develop the portfolio strategy for their flagship medical education franchise for the modern intuitive and flexible digital platform. This includes exploring innovative new ways of surfacing a massive library of content Across the medical student to resident and attending journey, all supported by a common design system and a shared technical foundation. The app developed by WillowTree enable McGraw Hill Professional to gain critical insights into user behaviors and personas throughout their medical education journey, while leveraging an enhanced learning experience, driving engagement with the full portfolio. Through collaboration and partnership, we've helped make remarkable progress Putting content such as audio, video, textbooks, images and more at students fingertips wherever they go.

Speaker 2

Finally, while the broader near term operating environment remains challenging, it's been a truly encouraging year for our AI Data Solutions business. It's always been a dynamic space, but we're seeing good momentum and demand this year in particular, led by the work we do to support market leading generative AI foundational model builders And we're now on pace to complete 1,000,000,000 tasks in a single year for the first time ever. In 2023 thus far, We've seen a roughly 10 60 percent increase in generative AI and large language model services with leading use cases including supervised fine tuning and reinforcement learning from human feedback, dataset sourcing and data engineering. Our workforce solutions are supported by new technology offerings, including Experts API, our proprietary platform, which streamlines and optimizes the framework of matching key specialist talent With reinforcement feedback passed, we continue to evolve this suite of offerings across execution models with multiple new in facility engagements also now in implementation. Other high growth areas within our TI AI portfolio include UX research data sourcing, where we partner with innovative technology customers to evaluate and capture human machine interactions to enhance production development life cycles And we continue to see remarkable diversification and opportunity in the autonomous vehicle space to support safety use cases, including 2 d, 3 d and LiDAR Sensor Fusion, plus driving data set sourcing across a multitude of scenarios.

Speaker 2

We've grown our TI AI customer base by 30% in 2023 and have continued to expand a number of key partnerships across multiple Fortune 50 tech companies, including our long time collaborations with Google and Microsoft, where we continue to support their needs for high quality human annotated data sets across numerous locales and product use cases. Before I hand the call over to Vanessa, I'd like to conclude by acknowledging our global team's continuing achievements as evidenced by several notable awards we received in the Q3. Starting with TELUS International being the leader in the Americas for a 5th consecutive year by global research and advisory firm Everest Group It is Peak Matrix for Customer Experience Management. Additionally, TI was included on Everest's inaugural Global Peak Matrix assessment Following our delivery site expansion that now encompasses 5 continents, TELUS International was also ranked a leader in Nelson Hall's NEAT assessment for content transformation services, specifically within subcategories for cost optimization and revenue generation. Similarly, TELUS International maintained our strong positioning on Constellation Research's shortlist for CX Operations Services, again within the global category.

Speaker 2

In recognition of our team's efforts to bring our caring culture to life, SaaS Company selected TELUS International as a finalist And it's 2023 best workplaces for innovators within the international category. And to wrap up this list, TELUS International was the recipient of 3 2023 Gold Stevie Awards for great employers, which highlighted our leadership development program, Our technical training program and specifically the use of digital coworkers as well as our efficient skills training solution. These awards continue to reflect and illuminate the TI team's global efforts and I thank our team members for consistently delivering value for our clients and for the communities where we live, work and serve. With that, I'll now invite our CFO, Vanessa Knue, to share details of our financial results, And I'll return to answer your questions as usual. Vanessa, over to you.

Speaker 3

Thank you, Jeff, and good morning, everyone. Thank you all for joining us today. As usual, in my review of the financial results, I will refer to some items that are non GAAP measures. And for descriptions and a reconciliation of our GAAP to non GAAP measures, please see our earnings release And regulatory filings from earlier this morning. In the Q3, TELUS International delivered revenues of 663,000,000 up 8% year over year on a reported basis and 6% on a constant currency basis.

Speaker 3

Revenue contribution from WillowTree in the quarter was 42,000,000 Excluding WillowTree, our revenue increased $6,000,000 or 1%, which included a favorable foreign currency impact of approximately 2% compared with the same quarter of the prior year associated with the weakening U. S. Dollar against the euro. Revenues in the quarter continued to be impacted by reduced Spending by certain clients. Most meaningfully, our revenues were impacted by a reduction in volumes from our 3rd largest client, a leading social media company, whose revenue declined in Q3 by 23% year over year.

Speaker 3

Excluding the impact of this particular client, our total revenues grew by 13% year over year. Revenues from our 1st and second largest clients, TELUS and Google, Grew year over year by 23% 25%, respectively. Looking at our revenues by vertical. In the tech and games vertical, revenues grew 4% year over year, impacted by the volume reduction from the aforementioned leading social media company. Excluding the impact of this client, revenues in the tech and games vertical increased 17% year over year in Q3, reflecting continued growth in AI related revenues from Google and notable growth with other clients, including a highly popular gaming platform that Jeff referenced earlier.

Speaker 3

Revenues from the e commerce and FinTech verticals increased 6% year over year with softer performance in certain FinTech clients offset by growth delivered by WillowTree in this vertical. Revenues from the Banking, Financial Services and Insurance, or BFSI, vertical Declined 19% year over year, primarily due to lower service volumes from a global financial institution client, which we mentioned on last quarter's call, Partially offset by the addition of new clients from our acquisition of WillowTree. Communications and Media grew 3% year over year, Supported by the ongoing digital transformation revenues from TELUS Corporation along with another leading U. S. Telco and new clients added with WillowTree, Partially offsetting softness in certain other accounts.

Speaker 3

Speaking of our work for TELUS Corporation, revenues in our healthcare vertical increased by more than 200% year over year on strong growth with TELUS Health. We expect continued growth in this vertical over time, reflecting yet another example of our mutually beneficial relationship with TELUS. Finally, revenues from all other verticals, which includes travel and hospitality, energy and utilities, retail and consumer packaged goods amongst others Grew 14% year

Speaker 2

over year.

Speaker 3

Turning now to our revenue performance by geography. Revenues in Europe declined 4% year over year resulting from service volume reductions in the region, including most notably the reduction from the aforementioned social media clients. Revenues in North America grew by 16% year over year as contributions from WillowTree, Healthcare and other Tekken Games Clients were partially offset by lower volumes in BFSI. In Asia Pacific, revenues increased by 9% year over year Through contributions from TELUS and other customers within e commerce and FinTech and 2nd Games verticals. Finally, Central America and other revenues grew 19 year over year from growth in 2nd game and communications and media clients, including TELUS.

Speaker 3

Moving on to operating expenses. Salaries and benefits expense in the 3rd quarter were $403,000,000 an increase of 16% year over year Due to higher team member counts, investments in our team members through increased average employee salaries and wages and temporarily disproportionate higher cost of service delivery in certain regions, As you may recall from our last discussion last quarter, these had a much more significant effect beginning in the Q2 of 2023 and principally in Europe. These increases were partially offset by the positive impact of our cost efficiency efforts executed to date, including decreases in team member counts as we rebalance supply with demand and adjustments made to variable compensation based on operating performance metrics, which resulted in a sequential quarter over quarter decline Our goods and services purchased were $116,000,000 an increase of 5% year over year, Primarily attributable to the addition of WillowTree as well as other higher costs tied with higher revenue, partially offset by lower dependency on external contractors in favor of continued development and investment in our own internal capabilities. Share based compensation in the 3rd quarter was $5,000,000 a decrease of 17%, primarily due to corporate shares of unvested awards in relation to employee departures.

Speaker 3

Largely as a result of our cost reduction efforts, acquisition, integration and other charges in the Q3 were $11,000,000 an increase of $4,000,000 primarily due to expenses associated with cost efficiency efforts, principally in Europe, including stock reductions to address lower service volumes from certain clients. Depreciation and amortization expense was $80,000,000 an increase of $19,000,000 primarily due to capital and intangible assets arising from WillowTree as well as other investments made over the prior 12 months. Interest expense in the Q3 was $38,000,000 an increase of $28,000,000 which was primarily due The higher average debt levels arriving from WillowTree, higher average interest rates and interest accretion recognized on the provision for written put options associated with the WillowTree acquisition. Our income tax expense decreased by $23,000,000 to $3,000,000 during the quarter. The effective tax rate decreased from 30 6% to 25%, primarily due to a change in income mix, whereby proportionately less income was earned in higher tax jurisdictions And a reduction in certain adjustments in the current period for income tax of prior periods.

Speaker 3

Moving on to profitability measures. Adjusted EBITDA was $144,000,000 in the 3rd quarter, a year over year decrease of 9% and adjusted EBITDA margin was 21.7% compared with 25.7 percent in the same quarter of the prior year. Adjusted net income was $58,000,000 and adjusted diluted earnings per share was $0.21 reflecting decreases of 33% and 34% year over year, respectively. While our profitability was impacted by cost imbalances Arising from reductions in service demand, these pressures were partially offset by cost efficiency efforts we realized during the quarter, which helped to drive an adjusted EBITDA margin improvement of 370 basis points from last quarter. As previously announced, we rationalized our team member counts, particularly in areas where we had excess capacity Resulting from volume ramp down.

Speaker 3

These efforts were accelerated since our last call, and the actions completed to date We'll now generate over $45,000,000 of in year savings or $96,000,000 on an annualized basis. Reflecting in large part these downsizing efforts, our team member count decreased to 73,045 as of September 30, 2023 or 5% lower from last quarter. Turning now to the balance sheet and cash flow. At the end of the Q3, cash and cash equivalents were $132,000,000 and available capacity under our credit facility was 435,000,000 We generated free cash flow of $159,000,000 in the quarter, primarily due to higher net inflows from working capital, Which included higher cash receipts for services provided to TELUS during the quarter, lower share based compensation payments and lower income taxes paid, which were partially offset by lower operating profit. Our capital expenditures in the quarter were $26,000,000 consistent with the same quarter last year.

Speaker 3

Our leverage ratio as of December 30th was 2.9x, which improved from last quarter and remains within our communicated steady state range. This improvement reflects our focus on ongoing reductions in our debt outstanding. Now turning to our outlook. We are reaffirming our full year guidance today. We continue to expect revenue for full year 2023 in the range of $2,700,000,000 to $2,730,000,000 now including $190,000,000 to $200,000,000 from WillowTree, representing year over year revenue growth of 9% to 11% on a reported basis And growth of 1% to 2% excluding WillowTree.

Speaker 3

This assumes an average exchange rate of €1.01 to €1.08. In terms of profitability, we continue to expect adjusted EBITDA in the range of $575,000,000 to $600,000,000 which will continue to benefit from the cost efficiency efforts In addition, we are continuing to reduce discretionary costs, continuing to optimize our 3rd party vendor relationship, Rationalizing our facilities footprint where feasible and maintaining prudence in hiring to manage our staffing in line with near term with the near term demand environment. And finally, we continue to expect adjusted diluted earnings per share in the range of $0.90 to $0.97 for full year 2023. We believe this outlook remains prudent given the continued macroeconomic uncertainty as we remain relentlessly focused on managing what is in our With that, let's move on to questions. Jonathan, over to you.

Operator

Certainly. Thank you. One moment for our first question. Our first question comes from the line of Ramsey El Assal from Barclays. Your question please.

Speaker 4

Sure. Thanks so much for taking my question. Good morning, Deepa. Vanessa and or Jeff, you mentioned a lengthening of the sales cycle in the press release. And I wanted to ask you a couple of things about that.

Speaker 4

I guess one is, Is that a comment about signing deals or converting bookings to revenue or both? And I guess if Maybe you could also overlay that on to the sort of it seems like there's a particularly large headwind coming from the large social media client versus the rest of the business, which is doing Better, is that comment sort of equally applicable if you remove the impact of the one large social media client, if that makes sense?

Speaker 2

So let me start, Ramsey, and then Vanessa can top up as ever with additional detail as needed. I think it's both. And it's not an exacerbation of what we discussed last quarter. It's a continuation of those elongated sales cycle. And so it's taking longer for deals to be consummated and it's longer Taking longer for deals to come to fruition.

Speaker 2

So both once we kind of get the notional verbal green light, but getting to end of job and So kicking off the engagement as well as just generally the pursuits continue to be elongated. And indeed, I think your observation is fair and accurate. We are having, I would suggest, disproportionately more challenge with respect to one of our customers in particular. And we're hopeful that in the not too distant future, things finally start to turn around. But given the size of that client And this speaks to what we've all been mindful of frankly from our inception as a public company, client concentration risk.

Speaker 2

It has an outsized impact on our business. If I normalize out the performance of that account, I think you'd see considerably healthier growth in totality across the business right now. So we have our work to do and As I say, improving and turning around that situation and we continue to be hopeful that that will indeed occur.

Speaker 4

Got it. Thank you very much.

Operator

Thank you. One moment for our next question. And Our next question comes from the line of Maggie Nolan from William Blair. Your question please.

Speaker 5

Thank you. I wanted to

Speaker 3

ask about visibility into potential cuts, additional cuts with that 3rd largest customer. And then what are some of the potential catalysts to reinvigorate not only business with that customer, but the service line in general?

Speaker 2

So we continue to work closely with them. And as before, we We're reasonably confident that we have the requisite visibility regarding the volume demand and profile for the work. And I think we're taking prudent steps in terms of matching supply and labor to support the existing demand profile. I think one of the sources of turning things around is really leveraging our capability set, particularly As I referred to earlier, in the AI space, I think, obviously, content moderation, in particular, I have seen an interesting evolution as many of our clients, particularly in the social media space, look to rely more and more on AI enabled capabilities As a first line of identification and defense and less and less so on human Digital engagement where possible. And so we hope, we believe that once again, we have what the doctor is ordering In terms of addressing this opportunity and evolution, but as I said in response to Ramsey just a moment ago, we still have some work to do to demonstrate to this client in particular that we can indeed be the right partner for them in that regard.

Speaker 2

And hopefully, we'll see progress there in the quarter ahead.

Speaker 5

Thank you, Jeff.

Speaker 2

Thanks Maggie.

Operator

Thank you. One moment for our next question. And our next question comes from the line of Aravinda Galappatthige from Canaccord Genuity. Your question please.

Speaker 6

Good morning. Thanks for taking my question. First of all, Jeff, I was wondering if you could just Delineate between perhaps some of your larger clients and maybe, sort of the small to mid, are you seeing sort of the same trends you talked about in Sort of a length in sales cycle and maybe taking time to in terms of converting the pipeline. Is there any kind of delineation between the sectors, between size that I think is worth calling out? And I also wanted to just for Vanessa, given the sort of the substantial free cash flow, how should we think about Q4 should would some of that working capital kind of flow out again, just to get a sense of how the year Would kind of close from a free cash flow conversion of EBITDA perspective.

Speaker 2

Thanks. Thanks, Aravinda. I think it's fair to say that elongated sales cycles are somewhat pervasive and not Exclusive to this one client, but I think it's equally accurate to reference the fact that things are decidedly, Helpably more challenging with that one client in particular, whether it's in sort of the TI core business, if you will, and even in WillowTree, We've seen continued elongation despite the fact that opportunities continue to be plentiful as reflected in the size of our funnel overall. And that's equally true for our WillowTree division, just getting to go continues to be a bit of a challenge for all of us. But As I say, palpably more so with this one client in particular and we are encouraged by some of what we're seeing at late around our TIA portfolio in So we'll hopefully have something better to report in that regard in the next quarter.

Speaker 2

And with that, I'll invite Vanessa to respond to the second half of the question.

Speaker 3

Thanks, Jeff. And Aravinda, absolutely, I think the We had a very, very strong free cash flow quarter and some of that is timing. Having a 24% free cash flow as a percentage of revenue is not Typical quarter for us. I would look more at the year to date because Q1 and Q2 were just slightly light, and I expect that to normalize as we look at Q4. So On a year to date basis, we're really around sort of close to mid teens in free cash flow as a percentage of revenue, and that's what I would expect us to be at in Q4.

Speaker 6

Thank you. I'll pass the line.

Operator

Thank you. One moment for our next question. And our next question comes from the line of Tien tsin Huang from JPMorgan. Your question please.

Speaker 7

Hey, thanks. Good morning. Glad to see the study results and Jeff you sound good. I think the question I had was just on visibility for the Top two accounts, any change there or notable call outs? And similarly with WillowTree and some of the wins you mentioned, Any surprise in the type of work you're seeing or your views on synergy potential now that you've owned it for another quarter?

Speaker 7

Thanks.

Speaker 2

Hey, Tien Tsin, thanks for the question. Indeed, we're very pleased with the double digits starting with the true 2 growth for Clients 12 tell us in Google and anticipate continued performance in that regard for the foreseeable future. No surprises in particular with respect to WillowTree client wins. Most of the client wins of late have been sort of within their Domain expertise and targeted industry verticals, disappointingly, obviously, the growth trajectory there not quite Where we had expected hopes to be, but again, I'm still confident in the longer term thesis And the WillowTree capability as the front door, if you will, to our QIEX offering is where I think we're going to Prove out the thesis and the value of that investment in the next year and beyond. So Well, hindsight is always 2020 and I think we will yet prove that capability was a critical strategic addition to our Overall service

Speaker 7

offering. Thank you.

Operator

Thank you. One moment for our next question. And our next question comes from the line of Stephanie Price from CIBC. Your question please.

Speaker 8

Good morning. In terms of AI, to expand its service volumes with Google and TELUS, and thank you for the color on the call around the offering as well. Just curious around what you're seeing in terms of demand outside of your largest customers and what portion of your customer base is looking at AI work at this point? Any further color, that would be great. Thank you.

Speaker 2

So almost everybody is talking to us about AI. There is a, I think, not entirely surprising level of curiosity, interest, excitement And frankly, trepidation and worry about how GenAI, in particular, AI more broadly, will likely impact Their business models and they're looking for help, insights, suggestions, guidance and I'm cautiously optimistic that we're going to start to really See some meaningful engagement adoption of this offering. Obviously, I drank my own Kool Aid some time ago here, Stephanie, but I think we really do have something quite unique, differentiated because of AR experience and expertise and because of the Comprehensive nature of the offering where we can engage in a conversation in terms of a consulting advisory basis to really explore together with our customers the art of the possible and how their environment might lend itself favorably to Gen AI implementation and adoption to help both their own internal team members exploit that capability as well as to better serve their customers. We can then move to the next phase of that engagement with them and helping to structure their data such that when you're deploying these generative AI capabilities, you're producing more relevant insights, actionable Takeaways rather than just garbage in, garbage out.

Speaker 2

We can then again engage in the next phase of that evolution with them and build the web interface And or mobile application capabilities so that both team members and customers alike have access on a real time basis to all of that more valuable information that generative AI is now producing. And then last but not least, having this proprietary platform that gives customers access right now on day 1 to a myriad of capabilities in terms of agent assist bot capabilities and language translation capabilities on a real time basis. And it is essentially Switzerland, if you will, in terms of technology agnostic, such that if they have a predilection to work with One language transition capability rather than our proprietary offering and or a different cloud environment, AWS, GCP, Azure, etcetera, We really are capable of supporting them in any of those environments with any of the plug in API capabilities. That kind of agnosticism, I think, again, lends itself favorably to adoption and very excited about the opportunity going forward.

Operator

Thank you. One moment for our next question. And our next question comes from the line of Richard Tse from National Bank Financial Markets. Your question please.

Speaker 9

Yes, thank you. Jeff, could you talk about sort of any service areas that have been sort of more resilient relative to some of the Other ones that are a bit softer. And then secondly, I think last quarter you talked about price competition in the market or pricing And wonder if we can maybe get an update on that too, please. Thank you.

Speaker 2

Thanks very much, Richard. I think unfortunately the challenge is our results by industry service line are a bit skewed because of that Concentration profile that we talked about already. As I said before, we normalize up to that. I I think we're seeing reasonable opportunities for continued growth everywhere, but obviously not surprising the TIAI service line in particular enjoying The biggest bump and I expect that continued for the reasons we've just discussed. In terms of pricing dynamics, feels to me like it's simply a continuation of the same, I.

Speaker 2

E, There is a pervasive persistent pressure around more for less. And so finding a way to mitigate Those challenges, even customers that historically were over indexing on quality and we're willing to pay for that quality, where that's becoming less Available, if you will, creates the necessity for service providers like we to find a way to create the headroom in our service offering so that we can capture the demand opportunity at those pressurized price points, but still generate Our targeted margin yields and so as you heard Vanessa detail in her prepared remarks earlier, we have undertaken a fairly Comprehensive optimization effort that's not just rightsizing labor to demand, but We're also looking to, as you've heard me say often in these calls, drink our own champagne, eat our ownourmet cooking, where we're deploying AI enabled and automation capability inside TI to drive down our own costs to serve to create that headwind we need so we can We'll continue to enjoy our targeted margins. I think we've made some progress in terms of our enterprise architecture and data access, so So we can be making better decisions more quickly in terms of how we're allocating resources and serving our customers.

Speaker 2

In our HR Our team was deploying AI in terms of reducing the time and effort that we need to deploy and building recruiting profiles for Hiring and then leveraging guide and trying to expedite, bringing the right match skills to the required Talent, we're looking to onboard more quickly, more expediently and the list goes on and on. We still have a lot more work to do Essentially reduce the proportion of labor that goes into generating every dollar of revenue by exploiting these exciting new technologies and capabilities. Pretty optimistic about the progress we've made in a reasonably short time. Would that we'd move faster, sooner admittedly, but We are on the right track indeed. And as I mentioned, I think a lot of those efficiency gains that were reflected in the quarter are absolutely And we continue to amplify in the quarter year ahead.

Operator

That's great. Thank you. Thank you. One moment for our next question. And our next question comes from the line of Divya Goyal from Scotiabank.

Operator

Your question please.

Speaker 10

Good morning, Jeff and Vanessa. We've spoken about it briefly, but I wanted to get some color on your client diversification efforts and you did provide some Context in the press release this morning, but I'm trying to understand, how can we over time to see concentration slightly move on from TELUS. And is there a certain timeline that you have Internally to get to reduce that concentration given it's been picking up with WillowTree's work that you're doing with TELUS. And just to add on, in general, I also wanted to understand how are some of the budget discussions going with some of the customers for 2024 And what sort of traction are you seeing there?

Speaker 2

Thanks very much, Divya. In terms of Trying to ameliorate the client concentration profile, continuing to expand our direct Sales capability, both hunters in particular, but farmers as well. We've deployed A TELUS framework around premier sales organization methodology to try and ensure that we're more disciplined and Better data driven around how we approach our account planning activity so that we can make More meaningful accelerated progress around reducing our dependency on just a few large clients. As I've said in the past, It's a bit difficult obviously when you're enjoying the patronage of these large clients who want and need so much of the great service We have to offer. We don't want to artificially slow down their continued spend just because we want to try and improve the overall proportion distribution of Revenue derived from our customers, but again increasing the number of feet on the street, if you will, in our commercial organization to try and win New clients more quickly.

Speaker 2

We've not set arbitrary targets in terms of how quickly we have to get from 54% to 52% to 50% to 48% Revenue concentration from our top 10 clients, but we recognize that we were the beneficiaries on the hyperscale is where we're growing quickly and we were over Indexed on them and suffered the consequence of late when things turned around the other way. And I've been reminded that we needed to make more progress more quickly on that front.

Speaker 10

And just on those 20

Speaker 2

Sorry, thank you. In terms of 2024 budget, early days still engaging with a number of our clients around those discussions and We're not ready to guide for 2024 yet, but as I think you heard from Vanessa, in particular in her prepared remarks, we're still Moving with caution and prudence, we're not yet seeing and hearing that people feel like we're at the bottom of the trough. I think folks are still feeling a bit trepidatious. There's still some uncertainty regarding when or if interest rates finally stop being raised and We see some better predictability and stabilization across the planet in terms of geopolitical issues in particular. So Cautious optimism regarding what 2024 is going to look like for now.

Speaker 3

That's very helpful. Sify, I think we're going to have Q4 is going to be a critical Just in terms of how our clients are thinking about their budget because this is the time in fact that clients are working on their budgets. And so to Jeff's very points, I think when we come back in the next quarter and we start talking about guiding for 2024, we'll have a lot more color there because we would have had More meaningful conversations because every single company right now that the color of the year end company is right now going through their internal budget discussion.

Speaker 10

That's very helpful. Thanks Jeff. Thanks Vanessa.

Operator

Thank you. One moment for our next questions. And our next question comes from the line of Casey Chan from Bank of America. Your question please.

Speaker 5

Hey guys, thanks for taking my question. So I just wanted to make sure that I understood your full year outlook correctly. So For WillowTree, the full year revenue outlook was taken down by about $15,000,000 and FX is a little bit better than expected, hence unchanged like reported outlook. On an organic FX neutral basis, is the guide also essentially unchanged? And What are some of the underlying factors that's going to drive the implied 4Q acceleration if so?

Speaker 5

Thank you.

Speaker 3

Yes. So, Kathy, we did trim WillowTree down by about $15,000,000 It's a bigger percentage on their revenue, just given the size of their revenue, but not really A big impact on the total, dollars 2,700,000,000 total company view. So that obviously implies a slight uptick. We show our organic revenues around it. We don't get it down to the decimal place.

Speaker 3

So that does indeed imply a slight uptick in organic Revenue growth, but where is that coming from? I think we've spent quite a bit of time on this call sort of talking about where those drivers are coming from. So it's not That meaningfully different from last quarter, it is a very, very slight uptick. We've talked about some stabilization in what we're seeing in revenue. We've talked about the strength that we're seeing in AI.

Speaker 3

We've talked about when you sort of normalize for that large social media clients, we're seeing pockets of positivity growth within tech and certain games clients growing their book of business with us not only year over year, but also sequentially. Some of the other declines that we've seen like BFSI still quite meaningful, but as I look quarter by quarter, it is now starting to stabilize. So all of these factors, Kathy, and of course, last but not least, we've talked about the work we're doing with TELUS and others, of course, Google. So That's what's driving that, and that's why we're fairly comfortable reiterating the overall guide, even though we do see about $15,000,000 of softness within the WillowTree specific part of the portfolio.

Speaker 5

Okay. That's all helpful. And just I know last quarter you mentioned the $40,000,000 in the annual cost savings. Is that still the right number to think about? And how

Speaker 3

much of the optimization In terms of

Speaker 5

your cost is just headcount versus the other discretionary cost that you also had mentioned before. Thank you.

Speaker 3

Yes. So the $40,000,000 is actually now $46,000,000 $45,000,000 that I mentioned in my prepared remarks, Cassie, and the annualized value of those savings is $96,000,000 As I mentioned in my prepared remarks, so that's an acceleration from what we reported last quarter. It is a combination of not only Headcount reductions, but also some of the other efforts I mentioned around vendor optimization, facilities footprint, etcetera. But if you look at our cost structure, most of our costs are in fact SMB salaries and benefits. So as a result, disproportionately, that is where we're seeing the overall cost savings that I mentioned.

Speaker 5

That's helpful. Thank you. Thank you.

Operator

Thank you. One moment for our next question. And our next question comes from the line of Keith Bachman from BMO. Your question please.

Speaker 11

Hi, many thanks. Appreciate taking the call. I wanted to ask a couple and I'll just do it successively because they're sort of paired. The degradation of WillowTree is certainly a bit startling. And so what do you think you what needs to happen to really Turn that asset around and then more broadly, number 2 is how do you think about M and A with your leverage ratio at 2.9, But asset prices presumably have come down on the sell side.

Speaker 11

And so how does that make you think about M and A in this environment? And the last one just to throw in there. Vanessa, I just wanted to see if there's any directional comments, not specific That you want to make about FY 2024. You're currently growing about 1% to 2% organically and the Street has 6% to 7% or something like that for FY 'twenty four revenue growth and just anything philosophically you want to say or directionally about FY 'twenty four. That's it for me.

Speaker 11

Many thanks.

Speaker 2

Thanks, Keith. I'm not sure if it's just Nomenclature, but I don't agree with your characterization of the significant deterioration of Little Trees performance. I would agree that there's been a deterioration in the outlook for the growth trajectory. But in terms of year over year, It's pretty much flat. So I don't think that's deterioration, but I would agree that Our expectations of in year growth are certainly not being met right now.

Speaker 2

And as I said earlier, it's because the customers that they're serving, The customers they're aspiring to serve are unfortunately taking a lot longer to get around to making the decision to move forward with the transformation initiative that We've been discussing with WillowTree for quite some time now because like so many businesses out there, their budgets are being constrained or they're being invited to take a bit of a wait and see approach As everybody seems to conserve cash and wait to see what's going to happen in terms of the macroeconomic and geopolitical landscape. But as I said also a moment ago, We continue to be very bullish on the WillowTree capabilities and their addition to our portfolio. And in the form of time, I'm confident that will be borne out. In terms of M and A, I mean, I think it's not surprising that these unfortunate price points putting our transaction currency, our publicly traded shares to work It would be a bit heartbreaking, frankly. And so I think you should expect that we're not likely to be pursuing something at scale in the near term that requires the use of our equity given the dilutive impact at these price points.

Speaker 2

Similarly, where we are in terms of our Leverage ratio, not again in a big hurry to try and take our leverage outside of our steady comfortable state of 2 to 3 times where we sit comfortably right now, Unless there was something quite compelling and irresistible, you're right, prices have moderated somewhat, but attractive assets always seem to Come with attractive work, perhaps less attractive price points. So we need to be thoughtful about that. And again, we've always About M and A is that you earn the right to go shopping. And one of the ways that's going to be a prerequisite is you have to have your organic House in order. And I think what we demonstrated in Q3 over Q2 is we've made meaningful progress to getting our house in order, if you will.

Speaker 2

But we have more work to do still. And I think other than perhaps some tuck in activity, you shouldn't expect to see Significant M and A activity from us until we show that we are back on track in terms of our targeted margin yields and organic growth trajectory. I want my management team focused on that. 1st and foremost, the distraction, the complexity And the risk associated with M and A activity is not something we take lightly. And before we embark upon the next one, I want to get a little bit more Continuity and stability on the organic business under our belt, and we're making good progress on the integration of WillowTree, obviously, but We're not quite finished that yet either.

Speaker 2

I'd like to bring that to fruition before I stress the team with the next one. On the 2024 outlook, I'll invite Vanessa To respond to the extent that she's able.

Speaker 3

Sure. And maybe I'll just To your earlier comment, Jeff, with respect to WillowTree performance, clearly not where you would have expected it to be based on our The date of close of the acquisition, but I would agree, I think degradation is probably a bit of a strong word. And we are seeing Softness in that discretionary spending, which of course is not only impacting WillowTree, but I would suggest it's a fairly common thing we're seeing across their peer sets. So We're not seeing that WillowTree stands out uniquely in that regard. We're actually seeing that they're somewhat maintaining their own relative to what we're seeing across their peer group.

Speaker 3

For 2024, Keith, it's a good question. And as we're now planning around 2024, If I just start from a revenue perspective, for now we're thinking about 2024 revenue very, very cautiously, Perhaps low single digits for now, we want to see a bit of stabilization in the current environment. To Divya's earlier question, Q4 right now is going to be critical in terms of what we hear from clients as they go through their budget cycle. So those conversations are happening in real time. So that's what's going to inform how we think overall about revenue growth for 2024.

Speaker 3

But I would say as of where we are right now, we are approaching that with a lot of caution and not at this particular point in time planning for a significant we expect an improvement, but I wouldn't suggest going back And then from a cost perspective, one of the benefits is we have taken out the $96,000,000 of annualized cost, as I mentioned earlier. But as we think about the New Year, obviously, we're going to see wage pressures. We'll see things like Performance based compensation that came down this year, just given performance metrics. So obviously, that has to normalize again next year. So we will see some of those puts and takes.

Speaker 5

I think for right now, as

Speaker 3

we look at margins, we're if you look at our guide, we're in that Sort of 21%, 22% range for the full year. My expectation is we should be able to make some modest improvements in that in 2024 directionally. But obviously, we'll come back with more specifics, particularly as we work with our clients in this critical time as they finalize their budgets.

Speaker 11

Okay, perfect. Terrific feedback. And Jeff, I thought your comments on that M and A made a ton of sense.

Speaker 2

Thanks, Keith.

Operator

Thank you.

Speaker 2

Jonathan, maybe one last question and then we'll wrap it up.

Operator

Certainly. One moment for our final question today. And our final question for today comes from the line of James Faucette from Morgan Stanley. Your question please.

Speaker 12

Great. Thank you so much. I wanted to ask quickly, 2 questions. Clearly, there's been A lengthening of sales cycles. Jeff, I'm wondering how much of that you attribute to macro, how much it seems like there's a lot Versus customers potentially evaluating their needs and especially with the changing Capabilities that TELUS is able to deliver especially on using AI etcetera and just trying to get assess what the potential there is.

Speaker 12

And separately on hiring, how should we think about hiring going forward whether not just on overall headcount, but where You maybe need to shift delivery locations to and from etcetera. Thanks.

Speaker 2

Thanks, James. Good questions. The first one, candidly, I'm not sure I can offer you a high level of Scientific insight on what the balance would be from macro versus TI Evaluation specific, although I think there's probably some degree of interconnectedness there. I think the macro is probably the more dominant Driver of elongated sales cycles right now, I just think businesses almost across every vertical are Nervous are concerned about what the future may hold. And as a consequence, they are taking a more cautious wait and see Approach to committing to large multimillion dollar transformation engagements and the conversations Across the board, but particularly highlighted in our military engagements, I think are emblematic of what we're hearing and seeing, which is Everybody seems to recognize that they can't do nothing indefinitely, that they see the necessity of engaging, deploying these Exciting technological enablers so that they can drive costs out of their service requirements.

Speaker 2

They can delight their customers. They can facilitate self serve to the customer, which is a growing pervasive dynamic out there and few businesses are fully Capable of meeting their customers where, when and how they want. So they all seem to recognize they got to get there, but they're just not being given the green light to deploy capital as quickly as they would like. But it's amazing how often we're hearing, Just not now, but we definitely know that this has to come. And so we're hopeful that early next year, we start to see that situation change.

Speaker 2

In terms of how much of that is TI? Well, again, we need to do more obviously on the marketing front, on the awareness front, on helping The existing and prospective customers to recognize that there really is something here at TI that they can exploit and leverage to positive effect and to help them Through this complicated, but exciting transformation journey, obviously, we need to double down on our efforts To create more awareness and confidence in the customer ecosystem so that they work more with GI more quickly. So on the shift on hiring, we're not seeing anything other than Europe being a particularly challenging environment for us right now. And unfortunately, our Europe experience is disproportionately tainted admittedly because of our over indexation on serving that one client and that one service line. If I normalize out for that, it's not like things are rosy and Terrific for us right now, but I think we would be feeling a lot differently than we do on our experience around rightsizing our labor force and looking to grow, I think would be different.

Speaker 2

But in totality, I think what this whole AI revolution is representing is, As I talked about for quite some time now, simple, predictable, repeatable human system engagements are being displaced by technology, by automation, by AI enablement. And that means humans in the loop need to be more sophisticated, More well trained, more capable of intra operating technology and AI enabled technologies in particular, and that's sort of the labor force, and we're looking to continue to grow. And excitingly, I don't think that there's a monopoly there. I think there's tremendous opportunities across Asia and Latin America and Europe and North America to access that talent. And despite these challenges, I think TELUS International has done a really good job of differentiating itself as an Employer of choice and destination for talent.

Speaker 2

And as demand from our customers returns and grows, I think we're going to do a Disproportionately better job than most in attracting that particular skill set and talent pool to support that growth opportunity. Great. Thanks for the commentary there, Jeff. Thank you. Appreciate the questions.

Operator

This does conclude the question and answer session of today's program. I'd like to hand the program back to Mr. Purit for any further remarks.

Speaker 2

Thanks, Jonathan, and thank you all for your questions today as always. While we look forward to making further progress in quarters ahead and throughout next year. Our intent for this call was to provide you with a balanced view of the near term conditions we continue to operate through and insights into the longer term fundamentals of our business. A diverse array of end to end capabilities is illustrated today Probably the specific examples I've shared from Gen AI adoption and CXM to our content moderation expertise within Trust and Safety to Digital transformation projects led by our digital solutions team and finally, some of the exciting work underway in our AI data solutions line of service. Since our company's inception, we've been committed to driving value for our clients by helping them grow revenue, take costs and risks out of their business And serve and exceed the expectations of their customers more effectively by evolving, advancing, enhancing our capabilities to incorporate leading edge technology.

Speaker 2

When it comes to the gen AI impact on CXM in particular, in many ways FuelIX is a culmination of our significant efforts over the years to carve out a role for TELUS International as a provider of a complete end to end CX journey fueled by the latest technology and enabled by our engaged global team. A lot has been said about the impact of GenAI on our industry and more broadly on society. While the hype is starting to settle, the focus is now on detailed use cases, feasibility of implementation and Specific monetization approaches, and I'm hopeful that you all now lead this call with a better understanding of TI's strengths in this area and thoughtful positioning as an end to end CX partner to clients. On that note, Vanessa and I look forward to connecting with many of you in person at upcoming investor conferences Or we'll meet again on our next quarterly investor call that will take place in February. With the holiday season fast approaching, I wish you all a safe and joyous end of the year.

Speaker 2

Thank you once again for your time and attention today. Bye bye all.

Operator

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

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