Alithya Group Inc (ALYA) 2024 Q2 法說會逐字稿

Good morning, and thank you once again for joining us for Alithya's second-quarter fiscal 2024 results conference call. The press release and MD&A with complete financial statements and related notes were issued this morning and are now posted on our website. The webcast presentation can also be found on our website in the Investors section.

早安，再次感謝您參加 Alithya 2024 財年第二季業績電話會議。新聞稿和 MD&A 以及完整的財務報表和相關說明已於今天上午發布，現已發佈在我們的網站上。網路廣播演示也可以在我們網站的投資者部分找到。

Please be advised that this call will contain statements that are forward-looking and which are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These statements include, without limitation, our estimates, plans, expectations, and other statements regarding the future growth, results of operation, performance, and business prospects of Alithya that do not exclusively relate to historical facts.

請注意，本次電話會議將包含前瞻性陳述，這些陳述受到許多風險和不確定性的影響，可能導致實際結果與預期有重大差異。這些陳述包括但不限於我們的估計、計劃、預期以及有關 Alithya 未來成長、經營業績、業績和業務前景的其他陳述，這些陳述不完全與歷史事實相關。

Always refer to future events, including statements regarding our expectation of our clients, demand for our services, and our ability to take advantage of business opportunities and meet our goals set in our three three-year strategic plan.

始終參考未來事件，包括有關我們對客戶的期望、對我們服務的需求以及我們利用商業機會和實現三個三年戰略計劃中設定的目標的能力的陳述。

For more information, please refer to the cautionary note in our presentation and to the forward-looking statements and risks and uncertainties section of the MD&A available on our website. All figures discussed on today's call are in Canadian dollars unless otherwise stated, and we may refer to certain indicators that are non-IFRS measures.

欲了解更多信息，請參閱我們演示文稿中的注意事項以及我們網站上的 MD&A 的前瞻性陳述以及風險和不確定性部分。除非另有說明，否則今天電話會議上討論的所有數據均以加幣為單位，我們可能會引用某些非國際財務報告準則衡量指標。

Please refer to the cautionary note in our presentation and to the non-IFRS and other financial measures section of our MD&A for more details. Presenting this morning are Paul Raymond, Alithya's President and Chief Executive Officer; and Claude Thibault, Chief Financial Officer. I will now turn the call over to Paul Raymond. Paul?

請參閱我們簡報中的警示性說明以及 MD&A 的非 IFRS 和其他財務措施部分，以了解更多詳細資訊。今天上午出席會議的有 Alithya 總裁兼執行長 Paul Raymond；和財務長克勞德蒂博。我現在將把電話轉給保羅·雷蒙德。保羅？

Thank you, Benjamin. Good morning, everyone, and thank you for joining us for the review of our second-quarter fiscal 2024 financial results. Despite our lower revenues this past quarter, we are particularly optimistic in respect to progress in key areas that I would like to discuss.

謝謝你，班傑明。大家早安，感謝您與我們一起回顧我們 2024 財年第二季的財務表現。儘管我們上個季度的收入較低，但我們對我想討論的關鍵領域的進展特別樂觀。

I would first like to highlight three notable areas of achievement from our second quarter and then we can dig deeper into how they impact our results and influence our confidence for the future. First off, we're pleased with our continued progress in terms of gross margin as a percentage of revenues.

我首先想強調第二季所取得的三個顯著成就，然後我們可以更深入地探討它們如何影響我們的業績並影響我們對未來的信心。首先，我們對毛利率佔收入百分比的持續進步感到滿意。

We continued our favorable progression both sequentially and year over year, largely due to greater project efficiencies, improved utilization, a reduction of subcontractors, and continued focus on growing our higher-margin segments.

我們繼續取得連續和同比的良好進展，這主要是由於專案效率的提高、利用率的提高、分包商的減少以及繼續專注於發展我們的高利潤細分市場。

Second, during a historically slow summer quarter and despite lower year-over-year revenues, we continued to make progress in reducing our SG&A spending. Along with other ongoing initiatives that trajectory better positions us to increase our profitability faster once the world returns to a healthier economic context.

其次，在歷史上緩慢的夏季季度，儘管收入同比下降，但我們在減少銷售、管理和行政費用方面繼續取得進展。與其他正在進行的措施一起，一旦世界恢復到更健康的經濟環境，我們就能更好地更快地提高獲利能力。

Thirdly, we continue to feed our strong pipeline of bookings for the future, both in terms of newly proposed projects with existing clients and through the addition of 36 new clients in the quarter, which is a good achievement for a company our size.

第三，我們繼續為未來提供強大的預訂管道，無論是與現有客戶的新提議項目還是透過本季增加的 36 個新客戶，這對我們規模的公司來說是一個很好的成就。

I would note that this latest accomplishment reflects Alithya's growing reputation for not only offering robust solutions from leading technology partners, but also for our ability to provide professionals with the end-to-end expertise required to ensure successful outcomes for our clients.

我要指出的是，這項最新成就反映了Alithya 日益增長的聲譽，不僅因為它提供來自領先技術合作夥伴的強大解決方案，而且還因為我們有能力為專業人士提供確保客戶成功所需的端到端專業知識。

So now let's dig a little deeper into those highlights, including the factors driving them. Gross margins are a source of pride in our Q2 results, both as a percentage of revenues and in terms of making progress in our offering of higher margin products and services to our clients.

現在讓我們更深入地探討這些亮點，包括驅動它們的因素。毛利率是我們第二季業績的一個令人自豪的來源，無論是佔收入的百分比，還是在我們向客戶提供更高利潤的產品和服務方面取得的進展。

Despite persistent industry factors beyond our control that our CFO, Claude, will further explain later, we are back above our minimum gross margin threshold of 30%, again in a declining top-line quarter. This is the result of ongoing initiatives in several areas. One of those areas is a reduction of subcontractors than Q2. So our ratio decreased by 5 percentage points, while simultaneously augmenting our utilization rates.

儘管持續存在的行業因素超出了我們的控制範圍（我們的財務長 Claude 將在稍後進一步解釋），但在營收下降的季度中，我們再次回到了 30% 的最低毛利率門檻之上。這是多個領域持續採取措施的結果。其中一個領域是分包商比第二季減少。因此，我們的比率下降了 5 個百分點，同時提高了我們的利用率。

Additionally, we are able to maintain sequential stability in terms of the number of professionals we employ in our higher margins, smart shoring jurisdictions, and we remain focused on increasing our size and reach in that route.

此外，我們能夠在利潤率較高、智慧支撐管轄區僱用的專業人員數量方面保持連續穩定，並且我們仍然致力於擴大我們在該領域的規模和覆蓋範圍。

In terms of SG&A spending, despite the inflationary pressure that we've been feeling for a couple of years now, we were able to exercise strong control over our spending and to flatten our expenses. In fact, sequentially, we experienced a decrease in spending of $2.6 million and a year-over-year reduction of 1.6%.

就SG&A支出而言，儘管我們幾年來一直感受到通膨壓力，但我們能夠對支出進行強有力的控制並壓平支出。事實上，我們的支出連續減少了 260 萬美元，比去年同期減少了 1.6%。

At times that process requires some difficult decisions as part of a push for greater efficiency. And you will see this in the restructuring costs taken in Q2. As a result, considering the slower conditions that we're seeing in certain areas of the information technology services sector, we're doing well and we've taken great strides to operate with greater efficiency as things start to improve. Those cost reduction and efficiency efforts are not completed as we will discuss further in the presentation.

有時，這個過程需要做出一些艱難的決定，以推動提高效率。您將在第二季的重組成本中看到這一點。因此，考慮到我們在資訊科技服務產業的某些領域看到的較慢的情況，我們做得很好，並且隨著情況開始改善，我們在以更高的效率運作方面取得了長足的進步。這些降低成本和提高效率的努力尚未完成，我們將在演示中進一步討論。

Our Q2 revenue amounted to $118.5 million, down year over year, primarily due to a cyclical decrease in IT spending in the Canadian financial services sector. Additionally, cautious spending decisions by some of our clients also had adverse effects on our US training and digital adoption services.

我們第二季的營收為 1.185 億美元，年減，主要是由於加拿大金融服務業 IT 支出的周期性下降。此外，我們的一些客戶謹慎的支出決定也對我們的美國培訓和數位採用服務產生了不利影響。

However, to counter some of those headwinds, we continue to shore up our offering of AI-enabled solutions, targeting greater efficiency. Another client-centric trend is causing a slower start for some projects as well. Investments that typically require to CIO sign-off, are now being certainly more broadly within organizations with increased scrutiny to ensure sustainable ROI.

然而，為了應對其中一些不利因素，我們繼續加強我們提供的人工智慧解決方案，以提高效率。另一種以客戶為中心的趨勢也導致一些專案的啟動速度變慢。通常需要首席資訊長簽署的投資現在肯定在組織內更廣泛地進行，並加強審查以確保可持續的投資回報率。

In response, Alithya is diligently working to present clients with the facts that they need to order to move forward. However, Q2 saw some projects start delays in line with that trend. Additionally, as Alithya's reputation grows, we continue to close on bigger contracts, particularly in our leading US verticals of healthcare and manufacturing.

作為回應，Alithya 正在努力向客戶提供他們需要繼續前進的事實。然而，第二季度一些專案的啟動延遲與這一趨勢一致。此外，隨著 Alithya 聲譽的提高，我們將繼續簽訂更大的合同，特別是在我們領先的美國醫療保健和製造垂直領域。

And as we sign larger deals more frequently, they often require final approvals at the Board levels, which takes more time. In the US, our Microsoft business delivered growth on a year-over-year basis, while our Oracle business also experienced a strong quarter. Both lines of business generate higher margins. And we're excited about the future, given the forecast for growth in some of the key sectors that we service and especially the US healthcare sector.

隨著我們更頻繁地簽署更大的交易，它們通常需要董事會級別的最終批准，這需要更多的時間。在美國，我們的微軟業務實現了同比成長，而我們的甲骨文業務也經歷了強勁的季度表現。這兩條業務線都產生更高的利潤。考慮到我們服務的一些關鍵行業，尤其是美國醫療保健行業的成長預測，我們對未來感到興奮。

In Canada the financial services market remains tight, but steady. Despite an important reduction in volume experienced from a few of our big financial services sector clients, our market shares are not decreasing and the projects and spending remain on track for the long-term.

在加拿大，金融服務市場仍然緊張但穩定。儘管我們的一些大型金融服務業客戶的交易量大幅減少，但我們的市場份額並未減少，項目和支出仍保持在長期軌道上。

We also continue to make progress in the public sector, which accounts for a significant portion of our business in Canada. That progress is largely due to our ability to adapt to emerging trends in that segment. For instance, government agencies are increasingly breaking up their large-scale projects into smaller segments, delighting phases between multiple suppliers in order to manage risks.

我們也在公共部門繼續取得進展，公共部門占我們在加拿大業務的很大一部分。這項進步很大程度上歸功於我們適應該領域新興趨勢的能力。例如，政府機構越來越多地將大型專案分解為較小的部分，在多個供應商之間進行階段性的合作，以管理風險。

Looking ahead, we're inspired by strong bookings of $110 million and a book-to-bill ratio of 1.08, when excluding the impacts of the two long-term contracts signed in April 2021. Additionally, our cross-selling strategy continues to bear fruit, and we're looking forward to engaging in new projects with existing clients as they explore the benefits of Alithya's broader offering of products and services.

展望未來，排除 2021 年 4 月簽署的兩份長期合約的影響，我們受到 1.1 億美元的強勁預訂量和 1.08 的預訂出貨比的鼓舞。此外，我們的交叉銷售策略繼續發揮作用水果，我們期待與現有客戶一起參與新項目，因為他們探索Alithya 更廣泛的產品和服務的優勢。

Simultaneously, we have 36 new clients to explore those same possibilities, but including a growing portfolio of proprietary products outside of our traditional Microsoft and Oracle offerings. So once again, thank you for joining us this morning, and I will now turn the floor over to Claude Thibault, our Chief Financial Officer. Claude Thibault?

同時，我們有 36 個新客戶正在探索這些相同的可能性，但除了我們傳統的 Microsoft 和 Oracle 產品之外，還包括不斷增長的專有產品組合。再次感謝您今天早上加入我們，現在我將把發言權交給我們的財務長克勞德·蒂博 (Claude Thibault)。克勞德·蒂博？

Good morning. As Paul mentioned, revenues for the quarter amounted to $118.5 million, a decrease of 8.1% compared to revenues of $128.9 million for the second quarter of last year. Of note, Alithya had one less billable day in Q2 than in the same quarter last year, which in itself accounts for a reduction of just under 2%.

早安.正如 Paul 所提到的，本季營收為 1.185 億美元，比去年第二季的 1.289 億美元收入下降了 8.1%。值得注意的是，Alithya 第二季的計費天數比去年同期少了一個，這本身就導致了略低於 2% 的減少。

In Canada, revenues decreased by 9.5% to $68 million due mainly to a reduction in IT investments in the banking services sector. However, we're seeing good progress and revenue increases in other areas of our Canadian business.

在加拿大，營收下降 9.5% 至 6,800 萬美元，主要是由於銀行服務業 IT 投資減少。然而，我們在加拿大業務的其他領域看到了良好的進展和收入成長。

Looking at our US business revenues decreased by 6% to $45.7 million. This decrease was primarily due to weaker demand for our digital skilling and change enablement services and some slower project starts, as mentioned earlier by Paul. Increased US revenues were partially offset by a favorable US dollar exchange rate impact of $1.3 million between Q2 of this year and last year.

我們的美國業務收入下降了 6%，至 4,570 萬美元。正如保羅之前提到的，這種下降主要是由於對我們的數位技能和變革支援服務的需求減弱以及一些專案啟動較慢。美國營收的成長被今年第二季與去年同期 130 萬美元的有利美元匯率影響部分抵銷。

As for our international operations, they also reported a softer revenue quarter, decreasing 8.3%, mainly due to reduced activities in Australia, but partially offset by a favorable foreign exchange rate impact of $500,000 year over year.

至於我們的國際業務，他們也報告了季度收入疲軟，下降了 8.3%，這主要是由於澳洲的活動減少，但部分被有利的外匯匯率影響（年比 50 萬美元）所抵消。

Now let's look at our Q2 gross margin dollars, which overall decreased by $3 million or 8% to $34.8 million. However, as a percentage of revenues, our second-quarter consolidated gross margin increased to 29.4%, up from 29.3% for the same period of last year. On a sequential basis, gross margin as a percentage of revenues also increased despite a sequential decrease in revenues. That naturally puts pressure on gross margin performance.

現在讓我們看看第二季的毛利率，整體下降了 300 萬美元或 8%，至 3,480 萬美元。然而，以佔收入的百分比計算，我們第二季的綜合毛利率從去年同期的 29.3% 增至 29.4%。從環比來看，儘管收入環比下降，但毛利率佔收入的百分比也有所增加。這自然會對毛利率表現帶來壓力。

The increase in gross margin percentage is derived from better individual project and general utilization management, increased revenues from higher margin offerings and finally, fewer subcontractors.

毛利率的成長得益於更好的單一專案和綜合利用管理、更高利潤率產品帶來的收入增加以及最終分包商的減少。

Let me take a moment to further comment on our Q2 gross margin percentage. In the second quarter, Alithya recorded a $1.1 million provision adjustment on tax credits receivable from previous periods, reflecting certain changes in estimates and assumptions, with a notable portion relating to the activities of previously acquired business.

讓我花點時間進一步評論我們第二季的毛利率。第二季度，Alithya 對前期應收稅收抵免進行了 110 萬美元的撥備調整，反映了估計和假設的某些變化，其中很大一部分與先前收購的業務活動有關。

While this provision impacts our Q2 numbers, it is not related to the second-quarter performance per se. And as such, if we excluded gross margin as a percentage, revenues would have increased by 1% to 30.3% compared to the same quarter last year. It is not only a notable increase in itself, but it's also brings us back above our minimum threshold of 30%, and this during the quarter with declining revenues.

雖然這項規定會影響我們第二季的數據，但它與第二季的業績本身無關。因此，如果我們排除毛利率百分比，營收將比去年同期成長 1% 至 30.3%。這不僅是其本身的顯著增長，而且還使我們回到了 30% 的最低閾值之上，而且是在本季度收入下降的情況下實現的。

Again, it is very challenging to be increasing gross margin performance during a soft revenue quarter, including as it relates to utilization rates and as such all the factors and initiatives leading to this overall improvement in Q2 bode very well for when our revenues resume a more typical organic growth pattern.

同樣，在收入疲軟的季度提高毛利率表現非常具有挑戰性，包括因為它與利用率有關，因此導致第二季度整體改善的所有因素和舉措都預示著當我們的收入恢復到更多水平時，這是一個很好的兆頭。典型的有機成長模式。

Now let's look at SG&As, which also represent a notable second-quarter improvement. Total gross SG&A expenses in the second quarter totaled $29.9 million, a decrease of $500,000 or 1.6% compared to $30.4 million in the same quarter last year and despite a negative US currency impact of [$0.4 million]. Therefore, this represents a year-over-year quarterly reduction of almost $1 million.

現在讓我們來看看銷售管理及費用 (SG&A)，這也代表了第二季的顯著改善。儘管受到美元[40萬美元]的負面影響，第二季度的銷售、管理及行政費用總額為 2,990 萬美元，與去年同期的 3,040 萬美元相比減少了 50 萬美元，即 1.6%。因此，這意味著季度同比減少了近 100 萬美元。

This decrease comes mainly from remuneration and recruiting expenses, partially offset by increased business development and travel expenses and higher internal improvement project costs. On a sequential basis, SG&As also decreased by $2.6 million from $32.5 million in the first quarter. This $2.6 million reduction reflects a non-recurring impairment charge of $1.4 million in Q1.

這項減少主要來自薪酬和招聘費用，但部分被業務發展和差旅費用增加以及內部改善項目成本增加所抵消。 SG&As 環比也比第一季的 3,250 萬美元減少了 260 萬美元。這一 260 萬美元的減少反映了第一季 140 萬美元的非經常性減損費用。

But even when excluding that amount, there is a sequential quarterly reduction of $1.2 million coming mainly from remuneration elements. We're pleased to see our efforts on that front starting to show actual net reductions in dollars. We look to maintaining the same continued discipline on SG&A spend going forward, and we're actually working towards achieving additional savings in the current context.

但即使排除這筆金額，季度環比減少了 120 萬美元，主要來自薪酬因素。我們很高興看到我們在這方面的努力開始顯示出美元的實際淨減少。我們希望在未來的銷售管理、行政管理支出上保持同樣的持續紀律，並且我們實際上正在努力在當前情況下實現額外的節省。

Overall as a result of decreased revenues and gross margin dollars, including the $1.1 million provision I mentioned partially offset by decreased SG&A expenses, our second quarter adjusted EBITDA amounted to $6.5 million, representing a decrease of $2.9 million compared to an adjusted EBITDA of $9.4 million during the same quarter last year.

總體而言，由於收入和毛利率下降，包括我提到的110 萬美元準備金，部分被SG&A 費用減少所抵消，我們第二季度調整後EBITDA 為650 萬美元，比調整後EBITDA 940 萬美元減少了290 萬美元去年同一季。

Now looking at our adjusted net loss, our Q2 adjusted net loss amounted to $0.2 million, representing a reduction of $3.6 million from a positive $3.4 million of adjusted net earnings for the same period last year. This marginally negative number is a result of the reduction in adjusted EBITDA and the notional effective income taxes relating to future adjustments.

現在來看看我們的調整後淨虧損，我們第二季調整後淨虧損為 20 萬美元，比去年同期調整後淨利 340 萬美元減少了 360 萬美元。這一小幅負數是調整後 EBITDA 和與未來調整相關的名目有效所得稅減少的結果。

As can be seen on page 22 of our Q2 MD&A, without which adjusted net earnings would be positive. Of note, as adjusted EBITDA is lower and as the amounts deducted to calculate the adjusted net earnings do not materially change from quarter to quarter, it is to be expected that the adjusted net earnings amount decreases proportionately more than the adjusted EBITDA amount.

正如我們第二季 MD&A 第 22 頁所示，如果沒有它，調整後的淨利潤將為正值。值得注意的是，由於調整後的 EBITDA 較低，且計算調整後淨利時扣除的金額在每季都沒有重大變化，因此預期調整後淨利金額的下降比例將大於調整後的 EBITDA 金額。

This is also true in the opposite direction and any future improvement in adjusted EBITDA will translate into a proportionately higher adjusted net earnings amount, everything else being equal. Moreover, despite our reduced adjusted EBITDA and adjusted net earnings, it should be noted that Alithya is still generating positive operational cash flow during the quarter, even after considering CapEx, lease liabilities, payments, and interest.

反之亦然，在其他條件相同的情況下，調整後 EBITDA 的未來任何改善都會轉化為相應更高的調整後淨利潤金額。此外，儘管我們減少了調整後的 EBITDA 和調整後的淨利潤，但值得注意的是，即使考慮到資本支出、租賃負債、付款和利息，Alithya 在本季度仍然產生正的營運現金流。

And even after considering our non-recurring business acquisition integration and reorganization dispersed despite our decline in revenues and gross margin dollars. We see well on page 7, our rebounding gross margin percentage, which again would be even higher than 29% when ignoring the previous period impacts.

即使考慮到我們的非經常性業務收購整合和重組也分散了，儘管我們的收入和毛利率有所下降。我們在第 7 頁可以清楚地看到，我們的毛利率百分比正在反彈，如果忽略上一期的影響，毛利率將再次高於 29%。

As for our long-term adjusted EBITDA trend because of our disciplined SG&A performance in the scale, which we have now reached the decrease in adjusted EBITDA is relatively smaller indeed, while our gross margin dollars are $6 million lower than our high watermark in Q4 of last year.

至於我們的長期調整後EBITDA 趨勢，因為我們在規模上嚴格遵守SG&A 績效，我們現在已經達到了調整後EBITDA 的下降幅度確實相對較小，而我們的毛利率比第四季度的高水位低了600萬美元。去年。

Our adjusted EBITDA is only $4 million lower than difference indeed, coming from overall SG&A reductions. Again, this points to potentially enhance EBITDA performance going forward, just as soon as revenues return to a sequential growth pattern.

我們調整後的 EBITDA 僅比差額低 400 萬美元，這是由於整體 SG&A 的削減。這再次表明，只要收入恢復到連續成長模式，未來的 EBITDA 績效就有可能提高。

Now turning to liquidity and financial position on page 9, net cash used in operating activities was $17.3 million, representing an increase of $16.7 million. This amount resulted primarily from $20.9 million in unfavorable changes in non-cash working capital items. Those changes in non-cash working capital items consisted primarily of a $12.2 million decrease in accounts payable and accrued liabilities, a $6.2 million increase in accounts receivable and a $3.1 million increase in unbilled revenues.

現在轉向第 9 頁的流動性和財務狀況，經營活動使用的淨現金為 1,730 萬美元，增加了 1,670 萬美元。這筆金額主要是由於非現金營運資本項目的 2,090 萬美元不利變化所致。非現金營運資本項目的變化主要包括應付帳款和應計負債減少 1,220 萬美元、應收帳款增加 620 萬美元以及未開票收入增加 310 萬美元。

The accounts payable and accrued liabilities reduction comes from both a reduced number of employees and subcontractors and a reduced number of accrued days at the end of the quarter. The increase in accounts receivable mainly comes from delays on certain large customer balances, most of which do not pose any credit risk and have notably receded as of today.

應付帳款和應計負債的減少源自於員工和分包商數量的減少以及季度末應計天數的減少。應收帳款的增加主要來自某些大額客戶餘額的延遲，其中大部分不構成任何信用風險，並且截至目前已明顯回落。

Finally, the increase in unbilled revenue mainly comes from our project-type mix as well as a few specific billing particularities at the end of the second quarter. As such, while this $20.9 million working capital usage is a high amount, it is largely a timing and mix issue. And among others, we already know that the reduction in number of days of accrued salaries will be reversing at the end of Q3. Now back to you, Paul.

最後，未開票收入的增加主要來自我們的項目類型組合以及第二季末的一些特定開票細節。因此，雖然 2090 萬美元的營運資金使用量很高，但這在很大程度上是一個時間表和組合問題。除此之外，我們已經知道應計工資天數的減少將在第三季末逆轉。現在回到你身上，保羅。

Thank you, Claude. So before we go to your questions, let's recap on the three notable areas of achievement of our second quarter. So one, it's very challenging to be increasing gross margin performance during a soft-revenue quarter. And as such, all the factors initiatives leading to this overall improvement bode well for when our revenues will resume a more difficult organic growth pattern.

謝謝你，克勞德。因此，在回答您的問題之前，讓我們先回顧一下第二季度所取得的三個顯著成就。因此，在營收疲軟的季度提高毛利率表現非常具有挑戰性。因此，導致整體改善的所有因素措施都預示著我們的收入將恢復更加困難的有機成長模式。

Two we continue to make progress in reducing our SG&A spending, and we look to continue to improve this measure going forward and finally, our continued strong bookings. And our growing sales funnel are also very encouraging. So we will now take questions. [Joelle]?

第二，我們在減少SG&A支出方面繼續取得進展，我們希望未來繼續改善這項措施，最後，我們的預訂量持續強勁。我們不斷成長的銷售漏斗也非常令人鼓舞。現在我們將提問。 [喬爾]？

(Operator Instructions) Jérome Dubreuil, Desjardins.

（操作員說明）Jérome Dubreuil，Desjardins。

Hey, good afternoon, thanks for taking my questions. First one is on the utilization rate and margins. Is it fair to say that in the past you would always keep a relatively high level of headcount to be ready for a bounce back and now you might be a bit more nimble on that front and maybe more adjusting to the situation you're seeing. Is it fair to say that then is what major changes were done to achieve this?

嘿，下午好，謝謝你回答我的問題。第一個是利用率和利潤率。可以公平地說，過去您總是會保持相對較高的員工數量，為反彈做好準備，而現在您可能在這方面更加靈活，並且可能會更適應您所看到的情況。可以說，為了實現這個目標，我們做了哪些重大改變？

Yeah. Thanks for the question, Jérome. Yeah, so we -- in the services industry and our model, I mean, most of our costs are tied to headcount, right? So we have the ability to adjust up or down based on demand and market, the market conditions.

是的。謝謝你的提問，傑羅姆。是的，所以我們——在服務業和我們的模式中，我的意思是，我們的大部分成本都與員工人數有關，對吧？因此，我們有能力根據需求和市場、市場狀況進行向上或向下調整。

During COVID, as you all know, we had incredible growth and to be able to keep up with that growth, we couldn't hire fast enough. So we actually use a lot of subcontractors where we couldn't find people and if we grew extremely fast, so of course when things slow down or when clients start reducing less strategic stuff, the first place that we cut is the subcontractors that we've reduced our subcontractors significantly in the quarter.

眾所周知，在新冠疫情期間，我們取得了令人難以置信的成長，為了跟上這種成長，我們無法足夠快地招募。因此，我們實際上使用了很多找不到人的分包商，如果我們成長得非常快，那麼當然，當事情放緩或當客戶開始減少策略性較低的東西時，我們首先削減的就是我們的分包商。本季我們大幅減少了分包商。

Those usually have a much lower margin, right, which is why we like having full-time employees that we can invest in. And the other one is utilization. So of course, we take a much closer look at that. And then in tighter markets when there is -- the work is delayed or people are working on less projects, we want to make sure that the utilization is at its maximum. So instead of keeping a very large pool of available people, you have more flexibility in terms of how you use those. So yes, utilization and margins are two things that we can tweak in our type of business.

這些通常的利潤率要低得多，對吧，這就是為什麼我們喜歡擁有可以投資的全職員工。另一個是利用率。當然，我們會更仔細地研究這一點。然後，在市場緊張的情況下，當工作被推遲或人們從事的專案減少時，我們希望確保利用率達到最大。因此，您不必保留大量可用人員，而是可以更靈活地使用這些人員。所以，是的，利用率和利潤率是我們可以在我們的業務類型中調整的兩件事。

Okay, thanks. Second question for me. Maybe not easy to answer because maybe budgeting period isn't fully over with your clients, but what would you consider as a normal state of spending for your financial services vertical? Is it maybe a year ago when you know there was higher spending or is now the normal spending or we can have a bit of an air pocket because of what was done in the past. So during COVID, maybe.

好的謝謝。我的第二個問題。也許不容易回答，因為您的客戶的預算期間可能尚未完全結束，但您認為金融服務垂直領域的正常支出狀態是如何的？也許是在一年前，當你知道支出較高時，還是現在是正常支出，或者由於過去所做的事情，我們可能會有點氣喘吁籲。所以在新冠疫情期間，也許吧。

Yeah. So spending increased significantly during COVID everywhere, every industry. You can imagine that as we've seen and they've put a lot of pressure on salaries and hiring, people moving all over the place and turnover was high everywhere and everybody was scrambling for people. I think the banking industry was the first of our industries used to be hit by the current situation.

是的。因此，在新冠疫情期間，各地、各行業的支出都大幅增加。你可以想像，正如我們所看到的，他們對工資和招聘施加了很大的壓力，人們到處流動，各地的人員流動率很高，每個人都在爭奪人才。我認為銀行業是我們產業中最先受到當前情勢打擊的產業。

And it's simple, right, it's simple math is the rapid change in interest rates have pushed a lot of banks to cut costs. And we see this everywhere, not just in Canada, but everywhere you're seeing the layoffs of the banks, which they're doing, which haven't seen in a few years, significant layoffs, while they're trying to adjust to the position, they end up having mortgages with lower rates than what they're paying for.

這很簡單，對，簡單的數學計算就是利率的快速變化迫使許多銀行削減成本。我們到處都看到這種情況，不僅在加拿大，而且在任何地方你都可以看到銀行的裁員，他們正在這樣做，這是幾年來沒有看到的大規模裁員，同時他們正在努力適應在這個在職位上，他們最終獲得的抵押貸款利率低於他們所支付的利率。

So as that cycle fixes itself, so within the next year or so, we think it's going to level out. And based on the conversations we're having with our clients in the financial services sector, they all expect to be resuming higher spending in about a year. So they are really going with the bare bonds right now, if it's strategic, if it's important, if it cut costs and everything else has been put on hold.

因此，隨著該週期自行修復，我們認為在未來一年左右的時間內，它將會趨於平穩。根據我們與金融服務業客戶的對話，他們都預計將在大約一年內恢復更高的支出。因此，如果它具有戰略意義，如果它很重要，如果它可以削減成本並且其他一切都被擱置，那麼他們現在確實會選擇裸債券。

So we've seen some significant and tactical reductions in our financial services clients in Canada where we had more exposure to that. The other thing, though, that we're seeing and talking to them is they all want to do more with AI in the coming year. So we do have a lot of conversations with these clients about getting ready for projects in the new calendar year to do with data and AI and automation. So that's very encouraging as that's where we're investing the most right now in terms of new offerings, so (multiple speakers).

因此，我們在加拿大的金融服務客戶中看到了一些重大和戰術性的減少，我們在那裡有更多的接觸。不過，我們看到並與他們交談的另一件事是，他們都希望在來年利用人工智慧做更多事情。因此，我們確實與這些客戶進行了許多對話，為新日曆年的數據、人工智慧和自動化專案做好準備。所以這是非常令人鼓舞的，因為這是我們現在在新產品方面投資最多的地方，所以（多個演講者）。

All right, thanks. That's it.

好的，謝謝。就是這樣。

Vincent Colicchio, Barrington Research.

文森特·科利奇奧，巴靈頓研究中心。

Yes, good morning, Paul, a follow-up on the last comment. Are you currently working with a number of AI pilots with clients?

是的，早安，保羅，這是上一條評論的後續內容。您目前正在與客戶合作一些人工智慧試點計畫嗎？

We actually have projects not just pilots. We actually have pilots. If you'll remember, we did an acquisition just over a year ago, Datum Solutions, which is all 100% of what Datum did was data and AI-driven solutions. So we actually had IT that we rolled out at some of our clients to automate some of their back office processes, modernizing legacy systems. So that part of the business is doing extremely well.

我們實際上有項目而不僅僅是試點。我們實際上有飛行員。如果你還記得，一年多前我們收購了 Datum Solutions，Datum 所做的 100% 都是數據和人工智慧驅動的解決方案。因此，我們實際上在一些客戶中推出了 IT，以自動化他們的一些後台流程，以實現遺留系統的現代化。所以這部分業務做得非常好。

And we have other areas we're also doing pilots, not in terms of piloting what we do, but sometimes it's the first time a client actually does a significant AI initiative. And of course, the biggest challenge there is the data. So we actually have data services where we can help the clients clean up the data or figure out what it is that they want to do before they launch into these automation projects. So yes, we are very active in that area.

我們也在其他領域進行試點，不是在試行我們所做的事情，但有時這是客戶第一次真正進行重大的人工智慧計畫。當然，最大的挑戰是數據。因此，我們實際上擁有數據服務，可以幫助客戶清理數據或弄清楚他們在啟動這些自動化專案之前想要做什麼。所以，是的，我們在該領域非常活躍。

Thanks for that. And are you seeing increased demand for offshore services? And if so, are you looking to accelerate that side of your business?

感謝那。您是否看到離岸服務的需求增加？如果是這樣，您是否希望加速這方面的業務？

Yes, that's an area, Vincent, cash where I don't feel we're moving fast enough on that one. And we're making changes there to accelerate that. It's a big upside for us. I mean, you folks know the numbers and you know the difference in costs.

是的，文森特，這是一個現金領域，我覺得我們在這方面進展不夠快。我們正在那裡做出改變以加速這一進程。這對我們來說是一個很大的好處。我的意思是，你們知道這些數字，也知道成本的差異。

We have the business, we have the large contracts. It's our job to move faster on that. And as you see pressure in the industry today with companies trying to get more competitive, to me that's an easy area where we can improve our margins and become more competitive at the same time. So yes, that's definitely an area we're going to be. You're going to be hearing more about in the coming quarters.

我們有業務，我們有大合約。我們的工作就是在這方面加快腳步。正如你所看到的，當今行業面臨壓力，公司試圖提高競爭力，對我來說，這是一個容易的領域，我們可以提高利潤率，同時變得更具競爭力。所以，是的，這絕對是我們要去的一個領域。在接下來的幾個季度中，您將會聽到更多相關資訊。

Okay. One last question. Where is your subcontractor ratio at today and where do you expect to be by year end?

好的。最後一個問題。目前您的分包商比例是多少？您預計到年底會是多少？

We haven't disclosed the number. It's at the lowest that it's been in two years and over two years' events. and their plan is to keep reducing it, so --

我們還沒有透露這個數字。這是兩年及兩年多以來的最低水準。他們的計劃是繼續減少它，所以——

Thank you for answering my questions.

感謝您回答我的問題。

All right.

好的。

Gavin Fairweather, Cormark Securities.

加文‧費爾韋瑟 (Gavin Fairweather)，Cormark 證券公司。

Hi, this is Graham Smith on for Gavin Fairweather. So just my first question is back on the financials. I was just hoping if you guys can maybe quantify the impact on this quarter. And then maybe sort of as well, you talked about some of the Canadian revenue streams or verticals are picking up as well. If you could call out which ones maybe those are that'd be great. Thanks.

大家好，我是加文·費爾韋瑟的格雷厄姆·史密斯。我的第一個問題又回到了財務狀況。我只是希望你們能夠量化對本季的影響。然後也許還有一點，你談到加拿大的一些收入來源或垂直產業也在回升。如果你能說出哪些是可能的，那就太好了。謝謝。

Mostly banking, Graham, we have a handful of clients that represent most of the decrease in Canada.

格雷厄姆，我們的少數客戶主要是銀行業，代表了加拿大減少的大部分客戶。

Okay, that's helpful. Thanks. And just on the ones that you said maybe are picking up as well.

好的，這很有幫助。謝謝。就你所說的那些可能也會出現的問題。

Well, it's interesting because when you exclude those large clients, we're seeing some really positive stuff throughout the business. The Microsoft business is growing. The Oracle business is growing. We have 36 new clients. The size of the projects that we're bidding on keep increasing because of the reputation that we're building and the scale of the company now.

嗯，這很有趣，因為當你排除那些大客戶時，我們在整個業務中看到了一些非常積極的東西。微軟的業務正在成長。甲骨文的業務正在成長。我們有 36 位新客戶。由於我們現在正在建立的聲譽和公司的規模，我們投標的項目規模不斷增加。

And of course, the larger the projects, the longer it takes to close them because of the approval levels within the organizations. But we have $20 million projects that we're bidding on now that two years ago, we weren't even invited to those projects.

當然，由於組織內部的審批級別，專案越大，結束它們所需的時間就越長。但我們現在正在投標價值 2000 萬美元的項目，而兩年前，我們甚至沒有被邀請參加這些項目。

So there's a lot of positive stuff that we're seeing. So that's why we're confident for the future and why it's so important for us to keep focusing on getting our costs down and our margins improve because as the revenue starts picking up, it's going to have a greater impact on the bottom line. So our focus is really on that right now.

所以我們看到了很多正面的事情。這就是為什麼我們對未來充滿信心，以及為什麼繼續專注於降低成本和提高利潤對我們如此重要，因為隨著收入開始回升，它將對利潤產生更大的影響。所以我們現在的重點確實是在這上面。

All right. That's great. Thanks. And then just maybe one more for me. So you talked about the increased utilization, do you see any further efficiency benefits you can get in that utilization department and also just on fixed price projects?

好的。那太棒了。謝謝。然後也許對我來說還有一個。因此，您談到了利用率的提高，您是否認為在該利用率部門以及固定價格專案中可以獲得進一步的效率優勢？

Yeah. So on the fixed price projects, we're doing extremely well. I think the improvement that we can do on the fixed price projects is really the mix of people. So for example, having a bigger portion of those projects being delivered by one of our smart-shore centers is going to have a greater impact on the margins for the fixed price projects. But from a delivery perspective, we're doing extremely well. So that was the first part. What was the second part of your question, Graham?

是的。因此，在固定價格項目上，我們做得非常好。我認為我們對固定價格項目能做的改進其實是人員的組合。例如，如果這些項目中有很大一部分是由我們的智慧海岸中心之一交付，將對固定價格項目的利潤產生更大的影響。但從交付的角度來看，我們做得非常好。這是第一部分。格雷厄姆，你問題的第二部分是什麼？

No, that was mostly -- that was just on utilization and then the fixed price (multiple speakers) --

不，這主要是——這只是利用率，然後是固定價格（多個發言者）——

Yeah, there's always room on utilization. The question there is balancing demand with having people ready to meet the startup. So when we have some delays in project starts, you just want to make sure you're not adjusting to regret it a week later. So that's an art as much as a science in terms of figuring out the mix there. But there's always room for improvement there.

是的，總有利用的空間。問題在於平衡需求與讓人們做好迎接新創公司的準備。因此，當我們在專案啟動方面出現一些延遲時，您只想確保自己不會在一周後後悔。因此，就弄清楚其中的混合而言，這既是一門藝術，也是一門科學。但那裡總是有改進的空間。

And I would reiterate -- repeat sorry, I would repeat that part of our improvement that we're seeing occurred in a down revenue quarter, so in the service business model, it's very difficult to be adjusting utilization on the way down. It's very challenging.

我想重申一下，抱歉，我想重複一下我們在收入下降的季度所看到的改進部分，因此在服務業務模式中，在下降的過程中調整利用率是非常困難的。這非常具有挑戰性。

And the other way around is also very encouraging, so when revenues are going up, then you're scrambling to find resources. You put everybody to work on projects. And in a sense, it's much easier. So the fact that we were able to deliver such good performance on this specific point in Q2 bodes pretty well for the future.

反之亦然，這也是非常令人鼓舞的，所以當收入增加時，你就會爭先恐後地尋找資源。你讓每個人都參與專案。從某種意義上說，這要容易得多。因此，我們能夠在第二季的這一特定點上提供如此出色的表現，這對未來來說是個好兆頭。

That's very helpful. Thanks, guys, and I'll pass the line.

這非常有幫助。謝謝大家，我會過線的。

Thanks, Graham.

謝謝，格雷厄姆。

Brian Kinstlinger, Alliance Global Partners.

Brian Kinstlinger，聯盟全球合作夥伴。

Hi, good morning, guys. Great. When we first spoke, you laid out your primary goal for improving gross margins, so congrats on above 30% and achieving what you said you do, what would you say is a reasonable long-term goal contemplating fixed price execution utilization, subs, pricing, what should investors think about the goal is long term for gross margin?

嗨，早上好，夥計們。偉大的。當我們第一次交談時，您提出了提高毛利率的主要目標，因此恭喜您實現了30% 以上並實現了您所說的目標，您認為考慮固定價格執行利用率、子系統、定價的合理長期目標是什麼，投資人該如何看待毛利率的長期目標？

If you look at the best-in-class in our industry, they are the high 30s, 40% range. I think that's where we need to evolve. To be able to do that, Brian, we need to move a significant portion of our delivery as we grow to our smart-shoring model. And if you think of our long-term target on that mix, we should be at around 40%. I mean, 40% of all of our projects should be delivered through our global network of smart-shoring locations. So that's one area.

如果你看看我們行業中最好的，他們都是 30 多歲、40% 的範圍。我認為這就是我們需要發展的地方。為了做到這一點，布萊恩，隨著我們向智慧支撐模式的發展，我們需要轉移很大一部分交付。如果你考慮我們對這組合的長期目標，我們應該在 40% 左右。我的意思是，我們所有專案的 40% 應該透過我們的全球智慧支撐地點網路交付。這就是一個領域。

The other area is, and we're seeing it now, I think over the coming years, the significant improvement we're going to be seeing in terms of how we deliver services, leveraging AI, is going to have a big impact on that. So that one, I'm still not sure what to tell you in terms of impact it's going to have. All I know is that as we do more and more projects right now, the efficiency gains we're seeing in some of these projects are pretty impressive.

另一個領域是，我們現在看到了，我認為在未來幾年中，我們將在如何利用人工智慧提供服務方面看到顯著的改進，這將產生重大影響。因此，我仍然不確定該告訴您它將產生什麼影響。我所知道的是，隨著我們現在做的專案越來越多，我們在其中一些專案中看到的效率提升非常令人印象深刻。

So I think the old adage of looking at our business is based on head count and revenue per head count is going to change dramatically over the next few years.

因此，我認為以員工數量為基礎來審視我們的業務的古老格言將在未來幾年內發生巨大變化。

Maybe if I may, I would add, I would add that right now that, you know, 31% change is an average. So as we speak, we already have certain business segments, certain business units and certain projects that have gross margins significantly higher than that. You know, sometimes in the 40% range, even higher.

如果可以的話，我想補充一下，我現在想補充一下，你知道，31% 的變化是平均值。正如我們所說，我們已經有某些業務部門、某些業務部門和某些項目的毛利率明顯高於此。你知道，有時在 40% 的範圍內，甚至更高。

And those segments happen to be our fastest growing segments. That's where we can make a difference. That's where we have a fairly unique expertise, and that's where we see the most -- the strongest demand. So just by -- and by difference, we have segments which have a much lower gross margin historically, so just by the changing revenue mix, going forward that we're expecting that alone should be improving gross margin, everything else being equal.

這些細分市場恰好是我們成長最快的細分市場。這就是我們可以發揮作用的地方。這就是我們擁有相當獨特的專業知識的地方，也是我們看到最多、最強烈需求的地方。因此，根據不同之處，我們的細分市場歷史上毛利率要低得多，因此，透過不斷變化的收入組合，未來我們預計，在其他條件相同的情況下，僅憑這一點就應該提高毛利率。

Yeah, that was helpful. And then I reviewed the MD&A, the company generated $15 million or so in adjusted EBITDA during the first half. Operating cash flow was significant to $21 million of working capital outflow. You highlighted the factors. Can you share your expectations for cash flow and/or working capital for the remainder of the year?

是的，這很有幫助。然後我審查了 MD&A，該公司上半年調整後 EBITDA 產生了約 1500 萬美元。營運現金流量相當於 2,100 萬美元的營運資金流出。您強調了這些因素。您能否分享您對今年剩餘時間現金流和/或營運資金的預期？

So we don't provide guidance. As you know, we don't provide outlook. Hopefully, the qualitative comments we made on our Q2 performance will give you a directional -- some directional ideas where we think we're going on every metric.

所以我們不提供指導。如您所知，我們不提供前景。希望我們對第二季業績所做的定性評論將為您提供一些方向性的想法，我們認為我們正在研究每個指標。

In terms of the cash flow, it's really, as I said, it's mainly timing and specific appearances that can drive the amount. It's so what happened at the end of September that the planets aligned against us to get to such a high amount of about $21 million. The good news is that this very much of a worse case. I mean, it will not go further down than that. That's for sure.

就現金流而言，正如我所說，主要是時機和特定的出現可以推動金額。正是在 9 月底發生的事情，行星們對我們不利，導致我們達到了 2,100 萬美元左右的高額金額。好消息是，這是一個非常糟糕的情況。我的意思是，它不會比這更進一步。這是肯定的。

And just like last year, if you remember, last year, we reversed all of these negatives that we also had in Q2, and we have several quarters of positive cash flow. So we're expecting similar trends. As I said, the big -- one of the big chunk is accrued salaries where, again, we are a service model company. Our largest expense by very far is salaries.

就像去年一樣，如果你還記得的話，去年我們扭轉了第二季度的所有這些負面因素，並且我們有幾個季度的正現金流。所以我們預計會出現類似的趨勢。正如我所說，其中很大一部分是應計工資，同樣，我們是一家服務模式公司。到目前為止，我們最大的支出是薪水。

And just depending on the number of days of accrued salaries based on the date of the last payroll of the quarter makes a huge difference. And we know when our last payroll will be in December, and we know the number of days we'll be increasing back, so that without revealing any state secrets, we know that a big chunk of that will be reversing just naturally. And on the other factors, as I explained also -- go ahead.

僅取決於基於該季度最後一次工資單日期的應計工資天數就會產生巨大差異。我們知道我們最後一次薪資單將於 12 月發放，我們也知道我們將增加的天數，因此，在不洩露任何國家機密的情況下，我們知道其中很大一部分將自然地逆轉。至於其他因素，正如我所解釋的那樣——繼續吧。

No I said, thank you so much. I thought you were done with your answer. I apologize.

不，我說，非常感謝。我以為你已經回答完了。我道歉。

No. And on the other factors too, we're expecting improvements, but certainly not a deterioration. So worst case for the upcoming quarters would be flat, but we're actually expecting, as I explained, to recover most of that amount.

不。在其他因素上，我們預計會有所改善，但肯定不會惡化。因此，未來幾季的最壞情況將是持平，但正如我所解釋的那樣，我們實際上預計將收回大部分金額。

Okay. Thank you.

好的。謝謝。

(Operator Instructions) Divya Goyal, Scotiabank.

（操作員指令）Divya Goyal，豐業銀行。

Good morning, everyone. So Paul and Claude if you could provide a little bit more color on some of the high margin offerings that you discussed in the gross margin percentage growth. I understand the subcontractor ratio decline is something you talked about, but were the specific high margin offerings that you highlighted in the call here?

大家，早安。保羅和克勞德能否就毛利率成長中討論的一些高利潤產品提供更多的資訊。我知道您談到了分包商比率下降，但是您在電話會議中強調的具體高利潤產品是嗎？

Sure. There's several there, Divya. Thanks for the question. Our highest margin business today is everything that has to do with AI and data. So we have a lot of projects around AI and data-driven offerings. Some of that includes IP. The gross margins in that business are in the 50% range by zero. So it's a very profitable business.

當然。那裡有好幾個，迪維亞。謝謝你的提問。我們今天利潤率最高的業務是與人工智慧和數據相關的一切業務。因此，我們有許多圍繞人工智慧和數據驅動產品的項目。其中一些包括知識產權。該業務的毛利率在 50% 範圍內為零。所以這是一項非常有利可圖的業務。

And of course, it's something that we're working very hard at cross-selling in all of our accounts. And that comes back to my comment earlier that it's not as much headcount driven. So the margins are it's tough to compare with the traditional consulting business just because of the usage of these tools that make everybody more efficient and are focused on automation.

當然，我們正在非常努力地在所有帳戶中進行交叉銷售。這又回到了我之前的評論，即這並不是由人數驅動的。因此，其利潤很難與傳統諮詢業務進行比較，因為這些工具的使用使每個人都更有效率並且專注於自動化。

So that business is growing very well and we want to invest more in it. The other two higher margin businesses are the ERP business. So our Microsoft and Oracle businesses are also in the 40% range, high-30s, low-40s, depending on the projects. So those businesses to close point you put them all together, they represent a good chunk of our business and probably the fastest growing part of our business.

因此該業務發展得非常好，我們希望對其進行更多投資。另外兩項利潤率較高的業務是 ERP 業務。因此，我們的 Microsoft 和 Oracle 業務也處於 40% 的範圍內，高至 30 左右，低至 40 左右，具體取決於專案。因此，將這些業務放在一起，它們代表了我們業務的很大一部分，而且可能是我們業務中成長最快的部分。

So as we look forward with why we feel -- although the revenue decline in the quarter, we are not happy with it. But by the same token, the higher-margin stuff is doing extremely well. And that's why you're seeing the impacts on the gross margin and it's enabling us to reduce the subcontractors and invest more in these higher margin offerings, which again, as we're focused on and we know that there's these lower margin things we had to do them for our clients.

因此，當我們展望未來時，我們的感受是——儘管本季收入下降，但我們對此並不滿意。但出於同樣的原因，利潤率較高的產品也表現得非常好。這就是為什麼你會看到對毛利率的影響，它使我們能夠減少分包商並更多地投資於這些利潤率較高的產品，同樣，正如我們所關注的那樣，我們知道我們有這些利潤率較低的東西為我們的客戶做這些事。

It was -- as a trusted advisor, the client is asking you for help, you have to be there and you have to answer. But if we had our choice, we'd be focusing a lot more time on the higher-margin stuff. So I think we look at this quarter as an opportunity to do more of that. So for us, there's some positives in there. Does that answer your question, Divya?

作為一個值得信賴的顧問，客戶向你尋求幫助，你必須在那裡並且必須回答。但如果我們有選擇的話，我們就會把更多的時間花在利潤率更高的事情上。因此，我認為我們將本季視為做得更多的機會。所以對我們來說，這有一些積極的一面。這能回答你的問題嗎，Divya？

It did. So I just wanted to confirm, so is it fair to assume that these higher 50%-plus margin contracts that you're talking about, they're more consulting engagements on the AI and other technology forward offerings is what it is, but could they potentially be shorter term? And how should we be thinking about you converting them into longer term, sustained high margin contracts?

它做了。所以我只是想確認一下，那麼假設你所說的這些更高的 50% 以上的保證金合約是否公平，它們更多的是關於人工智慧和其他技術遠期產品的諮詢業務，但可以它們可能是短期的？我們應該如何考慮將它們轉換為長期、持續的高利潤合約？

Yeah. So if you look at our numbers, about 10% of our business today is the long-term recurring IP-driven type revenue. And most of that is tied to the higher margin offerings and services that we have. So that's where we build IP that includes the latest AI, like the Chad GPT modules in there that their clients are using and that they pay a fee to use or we charge by the click or by the documents.

是的。因此，如果你看看我們的數字，我們今天大約 10% 的業務是長期經常性 IP 驅動型收入。其中大部分與我們擁有的更高利潤的產品和服務有關。因此，這就是我們建立包含最新人工智慧的 IP 的地方，例如他們的客戶正在使用的 Chad GPT 模組，他們需要付費才能使用，或者我們透過點擊或文件收費。

So it's not headcount related. It's usage related, which again is we want to do a lot more of that. It usually starts -- they usually start the consulting engagement, right, where we come in and help them figure out how to leverage that technology. And then it usually turns into one of these projects where we can convert that into longer-term revenue.

所以這與人數無關。它與使用有關，這也是我們想要做更多的事情。通常是這樣開始的——他們通常會開始諮詢活動，對吧，我們介入並幫助他們弄清楚如何利用該技術。然後它通常會變成這些項目之一，我們可以將其轉化為長期收入。

That makes sense. So just one more question on this sector. So obviously, you've seen some slowdown in the financial services sector and you can talk briefly about some of the other sectors across. What are some of the sectors where you're truly seeing the growth because broadly the macro and across IT services has been weaker. Where do you see some green shoots as you move towards the end of Q3 or like in '24?

這就說得通了。關於這個領域還有一個問題。顯然，您已經看到金融服務業出現了一些放緩，您可以簡要討論一下其他一些行業。哪些產業真正看到了成長，因為整體而言宏觀和整個 IT 服務都比較疲軟。當你接近第三季末或像 24 年那樣時，你在哪裡看到了一些萌芽？

Yeah, we're seeing a lot of growth in healthcare right now. The size of the projects that we're seeing and the move -- and again, it's projects that drive efficiencies, right. So we're seeing a lot of growth in healthcare right now. That's actually one of our fastest growing sectors right now. The AIP, so I'll come back on that, again. It's not a sector thing. It's really a technology enablement thing we're seeing across the board in all of our industries. We're seeing a lot of demand for those services today.

是的，我們現在看到醫療保健領域有了很大的成長。我們所看到的專案規模和舉措——再說一次，專案可以提高效率，對吧。因此，我們現在看到醫療保健領域出現了很大的成長。這實際上是我們目前成長最快的行業之一。 AIP，所以我會再討論這個問題。這不是一個部門的事。這確實是我們在所有行業中全面看到的技術支援。今天我們看到對這些服務的大量需求。

And manufacturing, so not in the retail sense, but our process manufacturing business, we're also seeing a very high demand right now in that area. I think banking, financial services is going to be slow for the next year or so. And then it's going to come back based on what we're being told by our clients and the time it takes for the mortgage renewals to catch up to the new interest rates.

至於製造業，不是零售意義上的，而是我們的流程製造業務，我們現在也看到該領域的需求非常高。我認為銀行業、金融服務業在未來一年左右的時間內將會放緩。然後它會根據客戶告訴我們的資訊以及抵押貸款續約趕上新利率所需的時間而回來。

Yeah, that totally makes sense. Just one last one on the SG&A savings. You did mention that there is room for SG&A improvement if I may put it that way. Could you provide some more color as to could we expect 50 basis point improvement, 100 basis points, or what's your internal targets if you may be able to share those on a go-forward basis?

是的，這完全有道理。最後一項是關於 SG&A 節省的費用。您確實提到，SG&A 仍有改進的空間，如果我可以這麼說的話。您能否提供更多信息，說明我們是否可以預期 50 個基點的改善、100 個基點，或者您的內部目標是什麼（如果您能夠分享這些目標）？

So we're not going to disclose specifics and obviously, we keep a close eye on our ongoing revenue performance. But we are ready to go as far as we need to go to deliver good performance. We've said before that our general target was 20% of revenues. Now revenues is a moving number. So by reference, our target is also somewhat movable based on that. But we have a number of actions that we are ready to take and which will bring us more in the right direction on that front without going into specifics.

因此，我們不會透露具體細節，顯然，我們會密切關注我們持續的收入表現。但我們已準備好盡我們所能，以提供良好的性能。我們之前說過，我們的整體目標是收入的20%。現在收入是一個動態數字。因此，透過參考，我們的目標也可以在此基礎上進行一些調整。但我們已經準備好採取一些行動，這些行動將使我們在這方面更加朝著正確的方向前進，而無需透露具體細節。

That's helpful. Thank you so much.

這很有幫助。太感謝了。

Thank you, Divya.

謝謝你，迪維亞。

Vincent Colicchio, Barrington Research.

文森特·科利奇奧，巴靈頓研究中心。

Yeah, Paul, any change in your capital allocation focus on the current environment? Because I'm curious, will you be proactive on acquisitions in some of these higher margin areas currently?

是的，保羅，針對當前環境，您的資本配置有什麼變化嗎？因為我很好奇，您目前會在一些利潤率較高的領域積極主動進行收購嗎？

Yeah, we're always looking at events. Again, we're seeing a lot of activity and targets. The three key things I always say we want the right target at the right price that's actually for sale. So we're staying very disciplined on that. And our eyes are wide open and we're looking. So when the right one comes by, we'll be ready.

是的，我們一直在關注事件。我們再次看到很多活動和目標。我總是說的三件關鍵事情是我們希望以正確的價格找到正確的目標並實際出售。所以我們在這方面保持非常嚴格的紀律。我們睜大眼睛觀察。因此，當合適的人出現時，我們就會做好準備。

Has there been any improvement in the multiples?

倍數有改善嗎？

At present for the quality assets, we haven't seen any decrease. Quality assets if anything, I think are drawing more attention. And of course, there's a lot of stuff out there that's for sale, that we don't necessarily want to touch. But for yeah, quality assets, there's still a very high event.

目前優質資產還沒看到減少。我認為優質資產正在引起更多關注。當然，有很多東西正在出售，但我們不一定想碰。但對於優質資產來說，仍然有一個非常高的事件。

Thank you.

謝謝。

All right.

好的。

There are no further questions at this time. Please proceed.

目前沒有其他問題。請繼續。

Thank you, [Joelle]. And thank you, everybody, for joining us today. And I know the holiday season is almost upon us, so enjoy the holidays. And despite everything that's going on, I hope you have a lot of peace and joy in the next few months. And thanks for joining us today. Bye-bye.

謝謝你，[喬爾]。感謝大家今天加入我們。我知道假期即將來臨，所以享受假期吧。儘管發生了這一切，我還是希望你在接下來的幾個月裡擁有很多平靜和快樂。感謝您今天加入我們。再見。