Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How integrated were the businesses being phased out with other units, and how difficult will it be to carve them out? Also, why is there a gap between the growth rates of free cash flow and earnings? A: The businesses being phased out were not heavily integrated with other units, and we've been planning this transition to ensure minimal disruption. Regarding the gap between free cash flow and earnings growth, they don't always track one-to-one due to various factors, but we are confident in our business's ability to convert earnings to cash effectively. Historically, our conversion rates have been strong, and we expect this to continue.
Q: Can you discuss the overall demand environment and how it compares to previous years? A: The demand environment remains strong, particularly in cloud services, where we've seen double-digit growth. While there is no significant change from previous quarters, we continue to see a robust pipeline and high win rates in managed services and new transformations. The demand for cloud-related services is particularly strong, and we are well-positioned to capitalize on these opportunities.
Q: What is the expected cadence of revenue growth for fiscal year 2025, and how should we think about the trajectory of the business? A: We expect revenue growth of 1% to 4.5% on a pro forma basis, excluding the phased-out businesses. This reflects our confidence in the conversion of our pipeline into revenue. While the exact trajectory can vary, we anticipate an acceleration in revenue growth throughout the year, driven by strong sales momentum and execution.
Q: How do you view the spending environment for 2025, and what are your expectations for customer willingness to invest in projects? A: We don't see a deterioration in the spending environment compared to 2024, but we also don't see a significant recovery. The demand remains stable, with strong interest in cloud services and managed services renewals. While some legacy systems face headwinds, our cloud growth engine is performing well, and we are optimistic about our ability to capture opportunities as they arise.
Q: Are you concerned about customers transitioning to point solutions from competitors when moving to the cloud? A: We are confident in our retention rates and believe our position in cloud operations is strong. Our cloud services often expand our role with customers, as we manage both the systems and cloud infrastructure. This comprehensive approach enhances our value proposition and strengthens our customer relationships.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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