Perficient Inc (PRFT) 2012 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Q1 2012 Perficient earnings conference call. My name is Laura and I will be your operator for today. At this time all participants are in a listen-only mode. Later we will conduct a question and answer session. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes.

I would now like to turn the conference over to your host for today, President and CEO, Jeff Davis. Please proceed.

Thank you very much and thanks, everyone, for joining. With me on the call today, as usual, is Paul Martin, our CFO. I want to thank you all for your time today. We're excited to talk about our results and outlook. We've got about, per usual, 10 to 15 minutes of prepared comments and then we'll open the call up, of course, for questions.

Before we proceed, Paul, will you please read the Safe Harbor statement?

Thanks, Jeff, and good morning everyone. Some of the things we will discuss in today's call concerning future Company performance will be forward-looking statements within the meaning of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements and we encourage you to refer to the additional information contained in our SEC filings concerning factors that could cause those results to be different than contemplated in today's discussion.

At times during this call we will refer to adjusted EPS. Our earnings press release, including a reconciliation of certain non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles, or GAAP, is posted on our website at www.perficient.com.

We have also posted a slide deck, which includes a reconciliation of certain non-GAAP goals to the most directly comparable financial measures prepared in accordance with GAAP on our website at www.perficient.com under Investor Relations.

Jeff?

Thanks, Paul. Again, thanks everyone for joining. As I mentioned at the intro, we're excited to be here today to talk about our quarter. Q1 got off, I think, to a great start and got our year overall off to a strong start. We'll, obviously, talk more about that later. But the quarter itself was a fourth consecutive record revenue quarter with revenue growth at 33%.

By the way, I think it's just one of many more that I expect in terms of record revenues. We're on a good -- have a good momentum running right now and I expect that to continue. Again, we'll talk a little bit more about that later.

EBITDA increased 56% in the quarter and expanded by 160 basis points on a year-over-year basis while net income increased 67% on a year-over-year basis. GAAP EPS was up 67% and adjusted earnings per share was up 33%.

Utilization for North American employees was 81% during the quarter, slightly below where we like to run but still a solid quarter and actually expect that to be moving into higher numbers right now in the current quarter and going forward.

Average bill rate increased to $127 an hour for our North American employees and $117 an hour for all employees, including offshore. That's a high point we've reached just once previously and we expect ABR to continue to increase. I mentioned before that there's a gap between us and some of our higher priced competitors that I think we can continue to close and we continue to prove that or validate that theory with each quarter ticking by.

I think the best news, though, for the quarter on top of the strong revenue was that we realized an even more impressive quarter for bookings, as you probably saw in the press release. Quarterly bookings were up 75% year-over-year in total, 40% higher than the Q4 2011 bookings which previously represented the strongest bookings quarter in Company history.

The press release also mentioned that we are winning a larger and longer term deals. We sold 28 deals north of $0.5 million during the quarter and those deals averaged about $1.2 million each. Now that compares with 16 deals over $0.5 million in the fourth quarter of 2011 that averaged about $946,000 each and 22 in the first quarter of 2011 that averaged only $866,000, so not only more deals over $0.5 million but considerably larger deals over $0.5 million as well.

So Paul is going to share some financial details for the quarter and I'll be back to share some more insight into our performance in Q1 and the outlook for Q2. Paul?

Thanks, Jeff. Total revenues for the first quarter of 2012 were $74.7 million, which represents a 33% increase over the year ago quarter. Services revenue for the first quarter of 2012, excluding reimbursable expenses, increased 32% to $66.2 million. Year-over-year organic growth was 13%.

Services gross margin for the first quarter of 2012, excluding stock compensation and reimbursable expenses, increased to 34.1% from 32.4% in the first quarter of 2011, continuing our ongoing trend of year-over-year margin improvement.

SG&A expense increased to $14.8 million in the first quarter of 2012 from $11.3 million in the comparable prior year quarter. SG&A as a percentage of revenues was 19.8% in the first quarter of 2012 compared to 20% in the first quarter of 2011.

EBITDA as defined as earnings before interest, taxes, depreciation, amortization and stock compensation for the first quarter of 2012 was $10.1 million or 13.5% of revenues compared to $7.1 million or 12.6% of revenues in the first quarter of 2007 (sic) and represents a 42% increase.

First quarter 2012 included an amortization of $1.6 million compared to $1.1 million in the comparable prior year quarter. This increase is associated with the acquisitions we've completed in 2011 and 2012.

The first quarter of 2012 also included acquisition costs of $0.7 million related to the acquisition of PointBridge completed in the quarter and accretion in the fair value of contingent consideration related to a 2011 acquisition of $0.2 million. Net income increased 67% to $3 million for the first quarter of 2012 from $1.8 million generated in the first quarter of 2011.

Diluted GAAP earnings per share increased to $0.10 a share for the first quarter of 2012 from $0.06 a share in the comparable prior year period. Adjusted GAAP earnings per share increased to $0.20 a share for the first quarter of 2012 from $0.15 a share in the first quarter of 2011.

Adjusted earnings per share is defined as GAAP earnings per share plus amortization expense, non-cash stock compensation, transaction costs and fair value adjustments of contingent consideration net of related taxes, divided by fully diluted shares outstanding for the period.

Our effective tax rate for the first quarter 2012 was 40.1% compared to 40.9% for the first quarter of 2011. The decrease in the effective tax rate is primarily due to certain fixed items being recognized over a larger income base.

Our ending billable headcount at March 31, 2012 was 1,507 colleagues, including 1,310 billable consultants and 197 subcontractors. This includes the addition of 67 billable consultants and 36 subcontractors acquired as part of the PointBridge acquisition completed during the quarter. Ending SG&A headcount at March 31, 2012 was 273, which includes 12 SG&A employees acquired in the PointBridge acquisition.

During the first quarter of 2012 we bought back 54,000 shares for a cost of $597,000 and as of March 31, 2012 we have spent $55.6 million on buying back 7.5 million shares since the program's inception in 2008. We continue to believe that our share repurchases will drive future accretion and shareholder value.

We ended the quarter with $6.2 million in outstanding debt and $2.7 million in cash and cash equivalents. Our balance sheet continues to leave us well positioned to execute against our strategic plan. Our days sales outstanding on accounts receivable were 78 days at the end of the first quarter, which is flat with the fourth quarter of 2011.

I'll now turn the call over to Jeff for a little more commentary behind the metrics. Jeff?

Thanks, Paul. Well, again, a great quarter all around, I think particularly when you consider how those bookings that we've talked about really for the last couple of quarters will translate to revenue throughout the remainder of the year. I think it validates the optimism that we shared as we started the year and probably even extends it from my perspective, so we're very pleased with those results.

We continue to make great progress in the healthcare vertical and I wanted to highlight our success in partnering with Blue Cross Blue Shield entities. We continue to rapidly expand within that group. During the first quarter we served nine distinct Blue Cross Blue Shield organizations and we continue to, as I said, aggressively pursue that.

We've got a very, very strong foothold, I would say, within those organizations and a lot of reference ability among them. While they're independent there's no centralization, there's a lot of discussion and sharing and, again, reference ability. We've got great success moving forward within those organizations, substantial amount of revenue on a run rate basis and, again, I expect that to only increase.

Additionally our land and expand go-to-market strategy has continued to help us secure new clients and then grow them into large recurring relationships. I referred earlier in the call to those larger deals, the number of them as well as the size, so I wanted to highlight this as well. During the quarter our top 50 customers represented about 64% of our total revenue and that customer subset had an average annualized run rate of $3.4 million a year.

So on average top 50 customers producing $3.4 million a year in revenue. You can imagine the efficiencies that come along with that. And it also speaks to our strategy that we enacted really going back a couple years to move more towards that Fortune 1000 base or at least large customer IT spending base that allows us to do that.

So that 64% and $3.4 million compares with 60% of total revenue and a run rate of $2.9 million for those customers, those top 50 customers in 2011. So we've increased that, again, by about nearly 20% from $2.9 million to $3.4 million per customer and from 60% of our total revenue to 64% in the first quarter of this year.

So we were able to discuss on the M&A front the PointBridge acquisition some on the year-end call and, again, we want to reiterate that was a very impressive business, solid customers, great set of folks and capabilities added to the mix here. Great bill rates as well and it's really accelerated our momentum with Microsoft. In fact, I'm confident we're far and away the largest Microsoft National Systems Integrator in the US now.

And the integration there with -- PointBridge, by the way, is largely complete and their assimilation is well underway, so the guys are fitting in right away already leveraging those skills on existing accounts or new pursuits with the Legacy company. As you know, when we do these acquisitions we integrate them very tightly. We get the kind of basic block and tackle stuff done very, very quickly, typically within the first 30 days, and then we're on to cross-selling and really assimilating these guys onto our teams.

Regarding M&A, as I said before, our goal remains to add an additional $50 million in run rate revenue before the year end and to do the same thing in 2013. So, as I think I said on the last call, I kind of viewed PointBridge as a carryover from last year's M&A program and so we still expect to get three more distinct deals done this year trying to drive towards about $50 million additional on top of PointBridge run rate revenue. We remain in active discussions with several firms. The pipeline there remains strong.

The business has significant momentum right now, as I mentioned earlier. I don't know that I've ever been more excited, as you can probably tell from my tone, about our performance and prospects. And while there's no guarantees on this, of course, it appears that 2012 could well exceed our original projections, so we're excited about that. As I said, as long as that momentum continues we should be posting some really solid numbers for several quarters, if not years, to come.

So on to Q2 in 2012, Perficient expects its second quarter 2012 services and software revenue, including reimbursed expenses, to be in the range of $77.5 million to $82.3 million comprised of $74.1 million to $77.9 million of revenue from services, including reimbursed expenses, and $3.4 million to $4.4 million of revenue from sales of software.

The midpoint of the second quarter 2012 services revenue guidance represents 21% growth over the second quarter 2011 services revenue, so 21% year-over-year. We're optimistic about that or actually excited about those results and those numbers, so we're looking forward to just stamping out another good quarter here as we move into Q2. And as you may have noted, the midpoint of that range in total services is pretty close to $80 million or pretty close to a $320 million run rate, hence my comment earlier about an opportunity here for us to potentially exceed our original guidance range.

Now despite that potential and opportunity, we're still going to reaffirm the existing range that we put out just a couple months ago of $320 million in top line revenue and our full year adjusted earnings per share guidance of $0.88 to $0.98. Again, we may be adjusting that down the road, but given that we provided it just a couple months ago we're going to stick with that range.

With that, we can open the call up for questions. Operator?

(Operator Instructions). Your first question comes from the line of George Price from BB&T Capital Markets. Please proceed.

Thanks very much for taking my questions and, guys, congratulations on a very nice quarter and a very positive outlook.

Thanks, George.

Jeff, my first question you just hit right at the end there given that we didn't see anything in the press release on 2012, so sounds like you're very comfortable with the guidance you gave. I guess maybe since, as you said, you don't want to be more specific now but can you maybe just talk a little bit about what you think is behind the momentum in the business from the demand perspective. Are you seeing -- why are you seeing clients kind of moving forward with more work or is it just success in kind of broadening the market, the client base that you're going after?

I think it's a combination of things, first of all. I think we continue to see recovery for the type of work that we do. I probably referred to this before, the larger big brand name guys, the mega integrators I think at the first opportunity in a recovery for some of the pent-up demand. And I think frankly some of that block and tackle heavy lifting that they do is kind of winding down, and a lot of the projects are shifting or spend is shifting more to the boutique or fine-tuning, high value, high ROI work that we do. I'd say that's first and foremost because we're seeing this across the board.

But I think right behind that, healthcare is there too, and I'll talk about that in a second, but right behind that I think actually is the strategy that I referred to in this land and expand approach to going to market where we're pursuing larger accounts, where we've got a broad enough portfolio now to get in there, perform good work and expand those relationships. A lot of those accounts, those top 50 that I alluded to, many of those start at a couple hundred thousand dollars and are now running $3.4 million annualized per year and I expect that to only increase.

I think that speaks a lot to the talent of our folks, our capabilities. Our value proposition, although our rates are increasing as I mentioned, so it's not necessarily a low cost provider. But honestly I think we position ourselves and hear from our clients that we're a breath of fresh air compared to some of the larger competitors. We're easier to work with, we're more nimble and flexible and I think deliver higher value ultimately.

And then, of course, I can't go without mentioning healthcare. The healthcare vertical continues to drive nice revenue for us and growth. I will tell you that the relative growth in healthcare may be a little less than I expected only because we're seeing so much improvement across other sectors. So we're excited about that and, like I said, for us the pipeline remains just incredible and the future looking forward from here, at least in the near-term, looks very strong. So hope that answered your question.

Yes, it does. I guess specifically on healthcare, what percent of revenue was healthcare in the quarter?

32%, I think, for the quarter.

Right.

Okay. And then just to confirm, Paul, that I got them all but you had $900,000 of acquisition, one-time acquisition related expenses in the quarter.

Right.

No other one-time expenses or benefits?

So there's the $900,000 of acquisition costs, amortization was around $1.6 million and it'll be similar to that in Q2 and that's, as I said, is ramped up related to the recently completed acquisitions.

Okay. And I guess lastly and then I'll turn it over, you gave some nice revenue guidance for the second quarter, qualitatively talked about gross margin -- further gross margin improvement and earnings improvement. Would you care to kind of quantify that at all or maybe expand on that?

For the year I would just reiterate what I said at the onset that we're looking for about 100 to 150 bip improvement in gross margins on net services and about the same amount on EBITDA for the year. So I hope that we can exceed that, but ultimately the goal again is to drive those two figures to close to 40% on gross margins and probably about 15% on EBITDA or high teens close to 20% on EBITDA net of stock comp by the time we get to that $500 million run rate by the end of next year.

So we expanded, I think, about 150 or so last year and again we're looking for about the same thing this year maybe a little slower momentum there, little slower velocity so 100 to 150 but, again, working hard to improve that and I think we'll see, again, improvement in Q2.

If you look back at last year, there's a natural improvement in gross margins and EBITDA as we burn off a lot of the state and federal payroll taxes and things like that, and so we have additional costs in Q1 that go away in Q2. And in addition, Q2 is always a higher utilization quarter as well. So we're pushing for moving from 81% to 85% utilization, which should deliver improved margins as well in the quarter. But again, for the year overall 100 to 150 on both those metrics.

Okay, great. Thanks very much. Great job.

Thank you.

Your next question comes from the line of Peter Heckmann from Avondale. Please proceed.

Morning, guys.

Morning, Pete. How are you?

Some of the concentration by vendor, it looks like Oracle is down year-over-year, is that primarily within Siebel CRM type projects or could you kind of provide some color to that?

You know, it is. Oracle, and hence our Siebel practice, continues to kind of sputter along, I would say, with the Siebel brand. I think it's a great product. I do -- I will tell you that we're seeing some improvement there, or at least some interest from a pipeline perspective. That's an area that took a big hit because it's a big dollar item, the on-premise implementation of that.

I will say salesforce certainly and our other competitors certainly have an impact on it and are a factor in why it's down, but a lot of it also has to do with spend. There's a lot of capabilities that Siebel brings to the table in terms of a complete comprehensive CRM capability that the competitors can't produce.

But again, it's a big ticket item, a big ticket implementation and it hasn't fully recovered yet. And even with that, my view on it is that full recovery won't be back to what it was, say, in 2007 anyway. It'll be something lesser than that, although I still think there's some improvement coming.

Yes, I think one other contributing factor to that is the acquisitions that we did of JCB in July and PointBridge in February increased the IBM and Microsoft component as you look at the split.

Yes, that makes sense. Okay. And then in business process management, what kind of tools are you using there and do you feel that that business process management, business intelligence, are those some of the areas where you're seeing the most interest or spending effort?

That's certainly an area where we see a lot. I'll tell you, business analytics and integration and it's kind of hard to separate the two, so as we breakdown the platforms keep in mind or take it with a grain of salt that business integration and analytics and even portal are kind of hard to separate out. Often you're doing all three, and in fact, in the case of analytics you're always doing some kind of integration where you're pulling data out to provide back through some kind of an analytic tool. So certainly the area of business intelligence, business analytics is strong.

DPMS is also very strong, to your point. Both on the TIBCO platform, as well as IBM's platform. WebSphere Process Server, Lombardi, IBM continues to shore up that product and capability to be a very, very formidable competitor given especially that they built most of that from scratch and were a late entrant against someone like a TIBCO. But they're very formidable now and there's a lot of demand for that product. We've got a lot of business going on in that space, again, both IBM as well as TIBCO and to a lesser degree just workflow in general also on Microsoft and the Oracle platforms.

Okay. And then lastly on the hiring front, can you talk a little bit about your plans to add to the bench organically this year and what type of expectations do the candidates have? As well, do you foresee any changes in H1B or your ability to hire from offshore?

Yes, I'll give you a simple view on the hiring plan or the midpoint, we're just working off the midpoint of our guidance is 10%. I'm hoping to get a couple percent of that out of rates and a couple percent on a year-over-year basis. We were 81% utilization last year, and I'd like this year to be 83% or closer to it. So literally you could say we're going to hire on average across the year linearly 6% roughly a headcount increase, and that's probably across the board.

We'll probably hire a little faster than that offshore if things continue on the track they are right now ultimately throughout the entire year. But actually we're seeing a lot of onshore demand for these kinds of projects that I mentioned earlier, very high ROI, very hands-on, very high touch so don't necessarily lend themselves to a lot of offshore out of the gate. But that's the general plan for hiring.

In terms of what we're seeing in the market, it's still reasonable. I would say it's not markedly changed from last year or maybe even the year before. We're still able to find highly talented folks at a reasonable rate. We've got an incredible recruiting engine here now that we've built. We view that, as I think I mentioned before, as a best practice and we built an excellent team that does a great job of both sourcing candidates and landing them here.

So we're not concerned about our ability to recruit and, again, the cost of recruits' salaries coming in is the same or less in some cases than our current average salaries. As I mentioned before, we're still building out a lot of the bottom of the pyramid allows us to hire little less experienced people than we already have on average on board.

In terms of H1Bs, we don't see any change there, meaning we don't plan to do much hiring with H1Bs with the current political climate. The clamps are still down on that for everyone. We're not immune to that. Thankfully we weren't heavily dependent on it either, so I think it impacts us potentially less than it does some of our other competitors.

We are looking at bringing people over from our offshore development centers. You can leverage an L1 visa, as an example, once they've been an employee for a year and we've done that to some degree already over the years from our China facility but we're looking to do the same thing out of India as well to help meet that need.

But honestly domestic hiring is going okay. There's always a shortage in this industry and certainly a shortage of good people, but we've got some new recruiting strategies that we deployed over the last six to nine months where we're doing a lot more passive recruiting, actually reaching out to people who aren't looking for a job, what we call sourcing, which are the -- tend to be the really talented folks. Like I said, the best people are always employed and don't necessarily have their resume out on the message boards or Monster, et cetera. So there's an overview of recruiting for 2012.

All right, I appreciate it.

You bet.

(Operator Instructions). Your next question comes from the line of Brian Kinstlinger from Sidoti & Company. Please proceed.

Hi, guys. How are you?

Hi, Brian.

A couple of -- first just some numbers questions. You mentioned healthcare was 32%, I didn't get to open the Q yet. What about financials and some of your others as a percent of revenue?

So healthcare was 32%, financial services, banking, et cetera 13%, auto and transportation 9%, energy and utilities 8%, and we actually have a deck out on the website that gives you those details.

Okay. And does it also have the headcount numbers? I wasn't able to write them down fast enough.

Yes. So the numbers I provided in the script for the ending headcount but we have the average headcount information out there in that deck.

Okay. And then maybe, Jeff, can you give us some update on the progress, and maybe I missed it, for Premier and the consortium that you were bidding on, where are they and maybe where are other member firms in discussing integration with you?

It's still progressing well. We actually expect to have two customers signed up in the next few weeks, so the two more of the consortium that I've referred to in the past. Like I said, we've got the one now and we had verbal from the other guys before. So it's moving along at a decent pace, a little slower than maybe we had originally expected, although as you can tell it hasn't impacted us, so this should just be more upside for the company this year. So two of them signed up literally within the next few weeks, according to my sales guy.

And we're also proposing another factor that was maybe a little bit of a twist that's coming probably sooner than I expected, which is a good thing, is the SaaS model that we're proposing to actually build and host and manage for Premier, has a number of customers interested in that as well. And we're actually working right now to develop the proposal for our initial phase of that and cost to Premier so that's a direct relationship for Premier that we'll have for this SaaS operating model.

But, obviously, the revenue stream comes from their customers and they've got enough customers lined up with interest in that to go ahead and make that investment with us to build that out presumably. Like I said, we're in the proposal stage there so it's coming along nicely. And, like I said, the good news is it was a small amount of bookings in the -- less than 2%, I think, or 2%, 3% of bookings in the first quarter from the Premier relationship.

So, like I said, I think still that'll heat up this year, as I mentioned, probably more this quarter beginning by the end of this quarter and into the second half of this year and then, again, combined with what we already got going should add some nice upside for us for the year.

And are the deal sizes of those two similar to what you had been talking about? And I think there were more than two originally in that consortium; I think there were four. So are the other two -- have they decided not to go forward or are they just dragging their feet a little bit more?

I would say they haven't decided. They may in fact look at this SaaS model and decide to go that route. The initial -- these will be multi-phase deals, keep in mind, so the ultimate deal size, the ultimate transaction over time, which might be two or three projects/contracts with those consortium members, will end up being similar to the size we talked about in the past.

Okay. You mentioned specifically Blue Cross and all the Blue Cross's you're working with separately, I think that you had mentioned on the last call you were doing I think it was an ICD-10 assessment for them, is that right?

Yes, we're doing ICD-10 work for a number of those guys, and that's not all the work we're doing for them and that's not the work we're doing for all of them.

The one I probably mentioned before was NASCO; about a $2.5 million initial -- beyond assessment. It was assessment plus actually architecture and some initial services that bring them off of a COBOL mainframe environment to an Enterprise Service Bus environment where they could create services to provide all they had -- all the needs they have around claims processing beyond just ICD-10 compliance. Literally, think of it as kind of throwing away what they have versus remediating it for ICD-10; they're just starting over.

And when might the larger implementation piece go up for RFP?

The initial size -- the initial piece is a pretty good size so we're -- timing on that I'm not even certain when we're going to be wrapping it up. I would say it wouldn't be before the second half of the year for sure.

Okay.

But that initial piece was $2.5 million.

Right. And then you mentioned a 40% increase in your bookings, I was going to ask if it's mostly healthcare but then you mentioned that other sectors may grow faster than healthcare. So maybe talk about where else the bookings -- you're seeing the strength and what's driving that, you think.

Just to be careful, what I said was that healthcare may not grow as much faster than the other sectors as I originally thought it would for the year. In other words, I at one time said we might end up with 40% revenue from healthcare by the end of the year and that still may be true. But, like I said, the good news is there's some other upside out there I hadn't necessarily anticipated where we're picking up some momentum in other sectors.

And which sectors are those?

Do we have a breakdown on the bookings by --

No, we don't have that by sector.

Maybe without numbers, where does it feel like?

Retail.

Yes, retail was a nice area for us. We're actually seeing consumer goods, retail come back for us, and actually I'd say retail was never a strong sector for us. I would say we're entering more into retail.

But consumer goods is strong, automotive remains strong and, of course, financial services we expect to see more pick up there, although we really haven't seen that yet. It was 13% of revenue. I'm expecting that again to move probably into the higher teens hopefully by the end of this year as we get more traction from the vertical that we're building out there. But we can get you a specific breakdown by vertical, no problem.

Great. And I guess the last question, I don't want to push you to commit to any higher numbers, of course, but bookings are up 75%, and I think you mentioned, year-over-year, they're up 40% from peak levels in December. Revenue growth is about 12% or 13% I think organically is what you said, 13%.

So I guess I'm wondering do you expect to keep accelerating towards 20%? I mean 20% is still much less than the increases you're seeing in bookings; no timeframe. But I mean is that generally how you feel based on what's going on in healthcare and then some pick up in some other industries?

I do think ultimately -- so we we've guided to 13% organic only, and the bookings were not inorganic but I'll tell you that bookings for the quarter organically were up 54% year-over-year. So we're seeing a lot of [spike] here.

Still strong.

Yes. So that's good news. So organic midpoint of guidance or organic midpoint -- I'm sorry, organic growth for Q1 was about 13%, 12.5%, Q4 was actually 14%, September quarter last year was 10%. I think 15% is doable. I'd like to see us posting some quarters at that level and I think that's certainly possible.

The gap between that and the bookings that we're seeing, though -- and again, ultimately I think this is good news and it could in fact drive us to 20% at some point, Brian, but it is more of a function of these being longer term engagements. So our backlog has grown but it's grown more into the future than necessarily in the near-term, if that makes sense.

Again, that being said that's still a great platform for growth and we're certainly not too large to post 20% numbers. Am I going to speculate to that within this year? Probably not. But I would say in the second half of the year getting us to maybe a 15% year-over-year level within the third and fourth quarter is possible.

But, as I said before, reaffirming our existing guidance, we of course will revisit that each quarter and maybe we'll have an opportunity to increase it in the next quarter. But I mean we just put it out there a couple months ago. I want to stick with that and see how bookings unfold this quarter.

Great. Thank you so much.

Thanks, Brian.

There are no further questions at this time. I'd like to turn the call back over to Jeff Davis for closing remarks.

Well, again, thank you all for your time today and your interest in Perficient going forward. We look forward to speaking to you again in a quarter. Thank you.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect.