Release Date: February 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you provide more details on the assumptions behind the Q3 guidance and the expected acceleration in Q4? A: Mark Thurston, CFO, explained that North America remains strong, while the UK and Rest of the World show negative trends due to macroeconomic factors. Banking and capital markets are strong, but TMT and mobility are weakening. John Cotterell, CEO, added that large deals, particularly in core modernization, have longer sales cycles but are expected to drive growth in Q4.
Q: Could you elaborate on the behavior of top clients, especially in healthcare and payments sectors? A: John Cotterell, CEO, noted that healthcare clients, particularly those from the Galaxy acquisition, are showing strong growth due to core modernization projects. In contrast, the payments sector is experiencing a slow decline, although demand for payments capabilities remains strong within the banking and capital markets segment.
Q: What visibility do you have into 2025 budgets, and how are clients responding to the current economic environment? A: John Cotterell, CEO, mentioned that clients are still finalizing budgets, with some reshuffling to accommodate new opportunities in AI-driven core modernization. This reflects a shift towards discretionary spending that drives significant organizational change.
Q: Are you engaging in pricing discussions due to spending pullbacks, and how is pricing trending? A: John Cotterell, CEO, stated that pricing is slowly improving, driven by inflation recovery and productivity gains from outcome-based deals. The focus on core modernization and the use of accelerators are expected to enhance efficiency and pricing.
Q: How is the integration of the Galaxy acquisition progressing, and what impact is it having on profitability? A: Mark Thurston, CFO, reported that the integration is well underway, with systems expected to be fully integrated by the end of the month. Initial cost optimizations have focused on G&A, with further opportunities anticipated as the integration progresses, potentially improving profitability into FY26.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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