Surinder Thind

Surinder Thind questioned the drivers behind the expected 50 basis points of gross margin expansion, asking about the specific levers being utilized and the potential for this trajectory to continue into 2027 and 2028.

Answer

CEO Balkrishan Kalra attributed the margin expansion primarily to the shift towards Advanced Technology Solutions (ATS), which offers higher value to clients and generates higher-value revenue for Genpact, alongside disciplined operational capabilities. CFO Michael Weiner added that the increased mix from ATS, particularly non-FTE commercial models, supports margin growth, and that the adjusted operating income margin expansion is net of significant strategic investments. Mr. Weiner clarified that margin benefits stem from both the mix shift to ATS and internal efficiencies gained from embedding AI through their 'Client Zero' approach.

Surinder Thind asked about the levers driving the expected 50 basis points of gross margin expansion and the potential for this trajectory to continue into 2027 and 2028.

Answer

Balkrishan Kalra, CEO of Genpact, attributed the expansion primarily to the shift towards Advanced Technology Solutions (ATS), which provides higher value revenue for clients and Genpact, alongside disciplined operational capabilities. He declined to comment on 2027-2028 but affirmed the clear trajectory demonstrated over the past years. Michael Weiner, SVP and CFO, added that the increased mix from ATS, particularly non-FTE commercial models, supports margin, and the Adjusted Operating Income (AOI) margin grew 40 basis points net of significant investments. Surinder Thind sought clarification on whether margin expansion is predominantly a mix shift benefit or if other benefits from delivery footprint and AI advances contribute. Michael Weiner confirmed it's both: the mix shift to ATS and the nature of that work, plus internal use of AI ('client zero' perspective) for efficiencies, which helps fund future investments. Surinder Thind then asked for elaboration on Genpact's 'aggressive investments in strategic areas,' the ability to do more, and how the company balances investment levels, referencing the high CapEx spend of hyperscalers. Michael Weiner explained their disciplined process with ROIs and strategic implications for investments, evaluated quarterly, affirming they are not pulling back on investments in partnerships and training. Balkrishan Kalra listed clear investment areas: partnerships, talent building, Agentic operations (product/engineering), and sales/front-end, emphasizing the rapid change in the business's shape.

Surinder Thind from Jefferies asked for more detail on the Advanced Technology Solutions (ATS) pipeline, including conversion speed and project length, and for color on the demand environment across business segments.

Answer

CEO Balkrishan Kalra stated the ATS pipeline is growing at a healthy pace with a faster conversion rate, noting it delivers over twice the revenue per headcount and is approximately 70% amortized and non-FTE. On segment performance, Kalra highlighted strong growth in High-tech and Manufacturing (13%) and Financial Services (6%), attributing the slower 1% growth in Consumer and Healthcare to specific macro-sensitive clients.

Surinder Thind from Jefferies Financial Group posed a question about the need for more technical talent and how Genpact differentiates itself from pure software firms. He also asked about the company's current stance on using M&A to accelerate capability development.

Answer

CEO BK Kalra positioned Genpact as a solutions firm whose deep domain and process expertise allows it to solve business problems at the 'key stroke level,' a capability he argues software firms lack. This value proposition helps attract top tech talent. On M&A, Kalra affirmed that the company maintains a disciplined approach, viewing acquisitions as a strategic option to add capabilities when organic development is not fast enough.

Surinder Thind requested more detail on the expanding Total Addressable Market (TAM) and asked about the timing of the current growth acceleration, questioning if it's driven by mature proprietary solutions or a shift in client spending.

Answer

CEO Balkrishan Kalra attributed the TAM expansion to GenAI increasing the scope of services and elevating the role of data in client conversations, which benefits Genpact's data and analytics franchise. He credited the growth acceleration to improved execution and innovation within the company's '3+1 Framework,' which is delivering results even in a stable demand environment, rather than a change in client budgets.

Surinder Thind inquired about the increasing client demand for AI, its impact on ASGN's consulting versus staffing businesses, and details on the company's cost savings plan for 2026.

Answer

Theodore Hanson, CEO, stated that the staffing business remains sequentially steady, with clients being judicious about spend and focusing on outcome-based projects, not significantly impacted by AI. Shiv Iyer, President, elaborated that AI drives demand across various dimensions, from specific use cases to readiness and modernization, with scaling challenges creating opportunities for ASGN. Marie Perry, CFO, reiterated the net $80 million in structural cost savings over three years, with moderate savings in 2026 and a ramp-up in 2027 and 2028.

Surinder Thind asked for more color on the increasing client demand for AI in the consulting business, its potential impact on the staffing business, and an elaboration on the expected structural cost savings plan for 2026.

Answer

Theodore Hanson, CEO, clarified that staffing moderation is due to clients being more judicious with spend and controlling outcomes, not directly impacted by AI. Shiv Iyer, President, explained that AI demand spans from use cases to readiness and modernization, with scaling challenges driving further need for ASGN's services. Marie Perry, CFO, reiterated the net $80 million cost savings target over three years, with moderate savings in 2026 and building in 2027-2028, noting the $10.7 million in Q4 2025 acquisition/integration costs were separate.

Surinder Thind questioned the differing performance between ASGN's staffing and consulting businesses, asking if increased tech complexity is driving clients towards outside expertise over internal staff augmentation. He also asked about the rising percentage of cost-reimbursable federal contracts, its drivers, and impact on federal gross margins.

Answer

President Shiv Iyer noted that while staffing is stable sequentially, clients are increasingly seeking partners for outcomes and value, benefiting consulting but creating headwinds for staffing. CEO Ted Hanson added that clients prioritize short time-to-value and total cost of ownership in the current macroeconomic environment. Regarding federal contracts, Mr. Hanson stated that the increase in cost-reimbursable contracts is due to the natural ebb and flow of contract wins and completions, with no significant impact on margins. CFO Marie Perry clarified that Q3 federal margins returned to a more normal state after a surge in license revenue in Q2.

Surinder Thind asked about the contrasting performance of ASGN's staffing versus consulting businesses, and the drivers behind the increasing percentage of cost-reimbursable contracts in the federal segment and their impact on margins.

Answer

President Shiv Iyer and CEO Ted Hanson noted that while staffing is stable sequentially, it faces year-over-year declines as clients increasingly seek partners for outcomes, benefiting consulting. Ted Hanson stated that the rise in cost-reimbursable contracts is due to natural ebb and flow, with no significant margin impact, and Marie Perry (CFO) added that federal gross margins are returning to normal after a prior quarter's license revenue surge.

Surinder Thind of Jefferies Financial Group inquired about ASGN's AI investment strategy, particularly regarding the development of proprietary IP, and asked for the appropriate baseline revenue run-rate for the volatile government segment.

Answer

President Shiv Iyer detailed a strategy of developing account-specific IP and leveraging partnerships with AWS and Workday, while also applying AI internally for future monetization. CEO Ted Hanson added that the baseline revenue for the federal segment is in the mid-$290 to mid-$295 million range after adjusting for Q2's pass-through revenues. He also pointed to the 1.1x book-to-bill and new defense funding as positive future indicators.

Surinder Thind from Jefferies questioned the widened guidance range, asking about intra-quarter visibility and client behavior. He also challenged the Q2 margin outlook, suggesting the sequential improvement appeared weaker than historically expected, even with the TopBloc acquisition.

Answer

CEO Ted Hanson clarified that widening the guidance was a prudent measure due to macro uncertainties like tariffs and DOGE, not a reflection of project cancellations, as bookings remain strong. CFO Marie Perry addressed the margin question, explaining that the Q2 outlook is impacted by a higher mix of lower-margin federal revenue and the loss of some high-margin federal work due to DOGE, which partially offsets the positive contribution from TopBloc.

Surinder Thind asked for an update on the assignment business, including any signs of stabilization, and questioned how GenAI productivity might impact the long-term staffing model.

Answer

Executive Theodore Hanson reported that the assignment business is generally stable quarter-to-quarter, though permanent placement has weakened slightly. Regarding GenAI, he explained that while client skill needs will evolve, the fundamental need for technical talent will persist, and ASGN is also using AI to enhance its own internal productivity.

Surinder Thind questioned Gartner's willingness to maintain its medium-term guidance given recent challenging years and the accelerating pace of change, asking about the confidence in achieving targets despite ongoing disruption and the timeframe for realizing full benefits of investments.

Answer

CEO Gene Hall stated that Gartner assumes the world will remain challenging, necessitating increased client value through BTI transformation. Early indicators are positive, but full benefits will take a couple of years due to the subscription business model. CFO Craig Safian emphasized the large addressable market, unparalleled value proposition, and belief that enhanced value will drive penetration and retention, supporting the medium-term outlook, with CV growth reacceleration expected to continue beyond 2026.

Surinder Thind questioned Gartner's confidence in maintaining its medium-term guidance given a history of challenging years and ongoing disruption, asking what gives them confidence in achieving targets.

Answer

CEO Gene Hall explained that Gartner now assumes a perpetually challenging world, necessitating a significant increase in client value through the BTI transformation. He expressed confidence in CV acceleration over time due to these changes, acknowledging that the full benefits will take a couple of years to materialize due to the subscription business model. CFO Craig Safian added that a large addressable market, unparalleled client value, and enhanced value proposition through the four transformation elements support their unchanged view on market opportunity.

Surinder Thind asked about the potential downsides of shifting to an enterprise model for broader penetration and stickiness. He also questioned the sustainability of Gartner's cost management efforts, distinguishing between one-time benefits and ongoing advantages for 2026.

Answer

Chairman and CEO Gene Hall explained that an enterprise model is not currently suitable because Gartner's content is specifically targeted at senior executives (C-level and their direct reports), not all employees within a large organization. He acknowledged that it could be a future growth avenue for different product types. CFO Craig Safian stated that cost management focuses on achieving ongoing, 'permanent savings' to ensure strong profitability and free cash flow for 2026 and beyond, rather than short-term benefits, allowing for continued strategic investments to catalyze CV growth.

Surinder Thind followed up on the downside of moving to an enterprise model for Gartner's services. He also asked about the sustainability of cost management, specifically how much of the lower stock-based comp and CapEx is one-time versus ongoing benefits for 2026.

Answer

Gene Hall (Chairman and CEO, Gartner) reiterated that their target audience is senior executives (C-level and direct reports), a small group for whom enterprise licenses don't add value as content is targeted. He acknowledged it's a future growth avenue. Craig Safian (CFO, Gartner) stated that cost management focuses on 'permanent savings' and optimizing the exit run rate for 2025 to ensure strong profitability and free cash flow in 2026, rather than one-time benefits.

Surinder Thind asked about behavioral differences between U.S. and international clients regarding tariffs, particularly in Canada and Australia, and inquired about quota-bearing headcount (QBH) expectations for the year.

Answer

CEO & Chairman Eugene Hall stated that tariff-impacted companies behave similarly globally, but noted that Canada and Australia face separate issues: Canada has tougher procurement processes, and Australia's recent election paused government purchasing. EVP & CFO Craig Safian added that QBH is expected to be roughly flat for the year, with a focus on 'territory optimization' before re-accelerating hiring in 2026.

Surinder Thind asked about the cyclicality of the tech vendor business, how unusual the recent cycle has been, and what normalized growth looks like. He also inquired about the status of the nonsubscription lead-gen business and its demand and pricing trends.

Answer

Executive Eugene Hall described the recent tech cycle as an 'extraordinary' and 'unusually large bubble' in VC spending that he doesn't expect to repeat. CFO Craig Safian added that the company's medium-term 12-16% CV growth target includes tech vendors, and they expect this segment to continue accelerating. Regarding the nonsubscription business, Hall stated it was also impacted by the tech bubble and expects traffic and pricing to stabilize over the next few quarters.

Surinder Thind inquired about the potential long-term impact of AI on sales force productivity and sought more color on the weaker demand seen in the sales and marketing practices within GBS.

Answer

CEO Gene Hall stated that while internal AI prototypes are promising, he expects the long-term productivity impact to be positive but modest. Regarding the sales and marketing practices, he attributed the relative weakness to a combination of overweight exposure to the tech sector, a higher proportion of legacy CV, and the tendency for marketing spend to face scrutiny in tough economic times.

Surinder Thind from Jefferies asked about FICO's software business strategy, specifically the target of 500 named accounts (350 in financial services, 150 outside), how this compares to the Gen One platform, and the aggressiveness of expanding beyond financial institutions. He also asked about the current number of named accounts in financial services and the reasons behind the sustained discrepancy between platform and non-platform ARR growth.

Answer

Will Lansing, CEO, described the current phase as the beginning of "phase two," emphasizing FICO's historical strength in financial services while noting the platform's horizontal design is gaining traction in other verticals like telco, supported by partner programs and the marketplace. He declined to disclose the exact number of named accounts but indicated "several hundred to go." Steve Weber, CFO, explained that the discrepancy in ARR growth is due to a gradual migration of customers to the more efficient platform, increased sales, and the "land and expand" strategy driving new use cases and increased usage. Mr. Lansing added that FICO balances supporting profitable legacy code with encouraging migration to the superior next-gen platform.

Surinder Thind inquired about FICO's target of 500 named accounts globally, comparing it to the prior Gen One platform strategy and the aggressiveness of expanding beyond financial institutions. He also asked about the current number of named accounts in financial services and the sustained discrepancy in platform versus non-platform ARR due to migrations.

Answer

CEO Will Lansing stated that FICO is in the beginning of a 'phase two' for its platform, aiming to broaden reach through partners in other verticals while direct selling remains focused on financial services. He indicated there are 'several hundred' more financial services accounts to target. CFO Steve Weber explained that FICO aims to gradually migrate all customers to the platform for efficiency, which will lead to a sustained discrepancy in ARR numbers, driven by both migrations and new sales.

Surinder Thind asked for details on FICO 10T adoption in the non-conforming market, including evaluation specifics and the time lenders took to make decisions.

Answer

CEO Will Lansing explained that non-conforming lenders prioritize default and prepayment risk, which drives their adoption of FICO 10T. He noted that FICO provides both Classic and FICO 10T with data for analysis, leading to positive feedback. He acknowledged that, like all scoring markets, things move slowly, but FICO is pleased with the progress.

Surinder Thind asked for details on FICO 10T adoption in the non-conforming mortgage market, including the specifics of the evaluation process and the typical timeline for lenders to make a decision.

Answer

CEO Will Lansing explained that non-conforming lenders prioritize default and prepayment risk, driving their adoption of FICO 10T due to its predictiveness. FICO provides both Classic and 10T scores with data for analysis. He noted that market adoption moves slowly, requiring time for testing, but expressed satisfaction with current progress.

Surinder Thind of Jefferies asked why clients are adopting FICO 10T now, particularly in the non-conforming market, and inquired about the upgrade process for existing customers moving to the next-generation FICO Platform.

Answer

CEO Will Lansing explained that clients adopt 10T for its superior predictive power, which translates into lower credit defaults. He described the transition for existing customers to the new FICO Platform as 'very straightforward,' designed to be seamless and provide cost benefits and new features.

Surinder Thind from Jefferies asked for a breakdown of the slowdown in the dollar-based net retention rate (DBNRR), questioning if it was due to slower adoption of new use cases or less frequent use of existing ones. He also asked about the SG&A expense run rate, excluding the impact of the FICO World conference.

Answer

CEO Will Lansing clarified the DBNRR slowdown was primarily due to lower usage of existing, usage-based services, which he attributed to the macro environment, rather than clients postponing new use cases. CFO Steve Weber indicated that expenses would be moderately higher in the second half of the year due to FICO World and other marketing activities, as well as some headcount additions.

Surinder Thind from Jefferies asked for the cause of the slowdown in the dollar-based net retention rate (DBNRR) and inquired about the SG&A expense run rate, excluding the impact of the FICO World conference.

Answer

CEO Will Lansing clarified the DBNRR slowdown was driven by lower usage of existing services due to the macro environment, not slower adoption of new use cases. CFO Steve Weber confirmed expenses will rise in the second half, primarily due to FICO World and other marketing, but that headcount growth is not a major driver.

Probed the reasons for the software platform ARR slowdown, asking if it was usage-based, and inquired about the market implications of having both FICO 10T and classic FICO scores in use for mortgages.

Answer

The ARR slowdown was due to a combination of lower customer usage, which can be seasonal, and the lagging effect of weaker bookings from prior quarters. Management sees no issue with both classic and 10T scores coexisting in the mortgage market, as both are highly effective and provide similar risk assessments.

Surinder Thind inquired about the breakdown of the fiscal 2025 guidance, specifically the expected performance of the software segment, and asked for more details on the company's strategic partnerships for building industry-specific solutions.

Answer

CFO Steven Weber stated that FICO does not provide guidance at the segment level (Scores vs. Software) or for sub-segments like platform vs. non-platform. CEO William Lansing elaborated on partnerships, using TCS as an example, explaining that partners leverage their own distribution and vertical expertise to build solutions, such as in logistics, using FICO's core decisioning IP, creating a complementary and economically beneficial relationship.

Surinder Thind questioned why there isn't a greater urgency among clients to improve infrastructure and data platforms for AI, given its importance, and asked for clarification on the expectation of continued sequential improvement over the rest of the year, specifically if it applies to organic constant currency growth.

Answer

François Boulanger, CEO of CGI Inc., explained that the lack of urgency stems from the complexity of data quality, managing vast data volumes, integrating AI with thousands of applications, and cybersecurity concerns, emphasizing it's a journey. He confirmed expectations for sequential improvement, especially in Europe, aiming to improve overall growth on a constant currency basis, including organic, assuming no further U.S. federal shutdowns.

Surinder Thind questioned why there isn't a greater urgency to improve infrastructure, data, and platform modernization for AI, given its importance. He also sought clarification on the expectation of 'continued improvement over the rest of the year,' specifically regarding sequential, constant currency, and organic growth.

Answer

François Boulanger, CEO, explained that the complexity of data quality, integrating AI into thousands of existing applications, and cybersecurity concerns are slowing adoption. Clients are cautious after investing in tools without immediate returns. Mr. Boulanger confirmed expectations for sequential improvement, especially in Europe, aiming for improved overall growth on a constant currency basis, including organic growth, barring further U.S. federal shutdowns.

Surinder Thind inquired about CGI's organic growth trends, excluding currency and acquisition impacts, and asked for an update on the company's partnership strategy and its contribution to bookings.

Answer

President and CEO François Boulanger explained that while specific organic growth numbers are not disclosed, the environment presents challenges in European manufacturing due to tariffs but creates opportunities in managed services. He highlighted strong organic growth in the financial sector. Regarding partnerships, he noted that investments in relationships with large technology companies are yielding significant results, contributing $2.6 billion in bookings over the first nine months of the fiscal year, a 120% increase year-over-year.

Surinder Thind (Jefferies) asked about FactSet's approach to establishing medium-term growth and margin targets, questioning the feasibility of confident long-term outlooks given the accelerating pace of market change and uncertainty.

Answer

Sanoke Viswanathan, CEO of FactSet, expressed confidence in developing strong medium-term guidance, viewing market uncertainty as an opportunity. He stated that FactSet's strategy focuses on differentiation, capturing new growth vectors, and leveraging existing assets, and he will share more details in future quarters.

Surinder Thind asked about FactSet's approach to establishing medium-term growth and margin targets, given the accelerating pace of change and market uncertainty, and whether the company can confidently build such an outlook for the next two to three years.

Answer

CEO Sanoke Viswanathan expressed confidence in building strong medium-term guidance, viewing market uncertainty as an opportunity due to FactSet's strong positioning. He stated that the developing strategy aims to differentiate FactSet from competition, capture new growth vectors, and maximize existing assets, with more details to be shared in future quarters.

Surinder Thind inquired about FactSet's internal productivity initiatives, seeking quantification of expected benefits and clarification on whether AI's role is to materially improve margins or enable more work with similar resources, including its impact on future headcount.

Answer

Helen Shan, CFO, explained that internal AI initiatives have already led to increased output for StreetAccount and engineering productivity improvements, focusing on faster product delivery and market entry. She noted that while there's a narrative of material cost changes, FactSet's focus is on getting data connected to reduce manual processes. She anticipates a slowdown in employee growth, with talent redeployment leading to greater productivity and higher output, ultimately driving top-line growth rather than immediate margin expansion through headcount reduction.

Surinder Thind asked for a better understanding of FactSet's internal productivity initiatives, including any quantifiable expectations, and how AI's role in these initiatives balances potential margin benefits against increased investment, particularly regarding headcount implications.

Answer

Helen Shan, CFO, explained that AI is already increasing output for products like CallStreet and StreetAccount and improving engineering productivity. The current focus is on accelerating product delivery and market entry, which contributes to top-line improvement. She anticipates a slowdown in employee growth, with talent redeployment driving greater productivity and higher output, ultimately leading to top-line growth rather than immediate, significant cost reductions.

Surinder Thind sought a clearer understanding of FactSet's internal productivity initiatives, asking for any quantifiable expectations and addressing the narrative that AI should significantly benefit margins. He questioned whether AI investments enable doing more with the same resources or doing the same with fewer, and the implications for headcount.

Answer

Helen Shan, CFO, FactSet, explained that internal AI efforts have already led to increased output for StreetAccount and engineering productivity improvements, focusing on faster product delivery. She stated that while a slowdown in employee growth is expected, the primary benefit will be redeploying talent for greater productivity and higher output, driving top-line growth rather than immediate material cost reductions.

Surinder Thind of Jefferies asked a high-level question about the trade-off between growth and margins over the next few years and whether expenses are nearing a peak.

Answer

Chief Financial Officer Helen Shan reiterated that the company expects to land within its current margin guidance for the year. She mentioned that investments are being self-funded through efficiencies and lower hiring, and that current trends are expected to continue, without providing a specific long-term outlook.

Surinder Thind asked whether the current renewal cycle is a result of natural contract expirations or proactive efforts by FactSet to renew deals early, and if clients were pushing to lock in pricing.

Answer

Chief Revenue Officer Goran Skoko explained that the current timing is primarily driven by contract expiration dates, but noted that FactSet is implementing more proactive renewal playbooks to better manage the cadence going forward. CFO Helen Shan added that they are not sacrificing price to secure renewals, highlighting that recent large banking renewals were, in aggregate, up in value.

Surinder Thind asked about the value proposition of generative AI products, specifically the revenue uplift for FactSet versus the savings for the client, given that AI can be expensive and client budgets are tight.

Answer

CEO Frederick Snow emphasized the value proposition is 'brute force efficiency,' citing products like Portfolio Commentary and Pitch Creator that save clients hours of manual work. Chief Revenue Officer Goran Skoko added that FactSet uses a subscription-plus-consumption pricing model to give clients visibility and control over their spending on these new tools.

Surinder Thind of Jefferies LLC asked about the value proposition of FactSet's AI products, specifically the revenue uplift for FactSet versus the cost savings or efficiencies realized by clients, given the high cost of some gen AI solutions.

Answer

CEO Frederick Snow stated the primary value proposition is saving clients' time and providing "brute force efficiency," citing examples like Portfolio Commentary and Pitch Creator. Chief Revenue Officer Goran Skoko added that FactSet has optimized its own costs and uses a subscription-plus-consumption pricing model to provide clients with visibility and control over their spending.

Surinder Thind inquired about the pricing environment assumed in the ASV guidance and the pricing model for new generative AI offerings like FactSet Mercury.

Answer

CFO Helen Shan explained that while the annual price increase faces some headwinds, price realization on new sales remains strong, above 80% against adjusted rate cards. Executive Frederick Snow detailed the AI pricing strategy, which includes a mix of baking features into the core product, usage-based fees for deep workflow solutions like Portfolio Commentary, and a federated approach for conversational APIs. Executive Goran Skoko added that this federated API approach is repeatable and helps clients accelerate their own internal development.

Surinder Thind from Jefferies questioned Mitek's current investment pace, asking if it represents a normalized level or if the company is in the early stages of an investment cycle with many ideas to pursue, particularly given market changes. He also sought clarification on whether Mitek could invest more if desired, balancing this with margin objectives. Additionally, Mr. Thind inquired about the decision-making dynamics of large financial institutions regarding Check Fraud Defender adoption and its implications for the solution's growth rate.

Answer

CEO Ed West stated that Mitek's investment level is driven by confidence in market positioning and a desire to accelerate growth, while remaining disciplined and margin-focused long-term. CFO Dave Lyle added that the current pace strikes a good balance, with significant investment directed towards R&D in AI decisioning, biometrics, and fraud intelligence, alongside go-to-market expansion. Regarding Check Fraud Defender, Mr. West explained that while large institutions have lengthy procurement processes, the increasing value from more data and insights should accelerate adoption over time, noting that multiple top 10 institutions are already engaged.

Surinder Thind asked about Mitek's current level of investment, whether it's a normalized pace or early in an investment cycle, and sought clarification on the extent of ideas being pursued. He also questioned the dynamic of large financial institutions taking time for Check Fraud Defender (CFD) pilots and its impact on CFD's growth rate.

Answer

CEO Ed West stated that investment is disciplined and driven by confidence in market positioning to accelerate growth, emphasizing a balanced approach. CFO Dave Lyle added that the focus is on R&D for AI decisioning, biometrics, and fraud intelligence, alongside increased go-to-market investment. Regarding CFD, Mr. West explained that while large institutions have lengthy processes, the increasing data and insights accelerate value creation, leading to growing participation from top-tier institutions.

Surinder Thind inquired about the scope, timeline, and cost of Mitek's integration and transformation program, asking if expenses would be adjusted out of reported results. He also asked about the normalized level of expenses beyond fiscal 2025 and sought more detail on the decision to reduce spending in the identity business while simultaneously targeting it for growth.

Answer

CEO Edward West stated that the integration program will be executed swiftly in fiscal 2025, with all associated costs already incorporated into the provided guidance. CFO David Lyle added that successful execution should lead to margin expansion beyond 2025. West clarified that the flat-to-slightly-down spending in identity is a matter of disciplined focus and driving efficiency after years of heavy investment, not a reduction in innovation or customer-facing capabilities.

Surinder Thind from Jefferies asked about the status of internal restructuring, the potential for sales 'air pockets' due to product simplification, and for a comparison of the revenue opportunity between Check Fraud Defender and mobile deposits.

Answer

CEO Ed West clarified that the major restructuring actions were completed in Q1, and the team is now stable and focused on execution. He does not anticipate sales disruptions, viewing the product focus as a positive for customer conversations. He positioned Check Fraud Defender as a key strategic growth platform addressing increasing fraud threats, without providing a direct revenue comparison to mobile deposits.

Surinder Thind of Jefferies inquired about the trends in gross revenue retention and the challenges observed in net revenue retention, particularly concerning the upsell process despite strong prior-year comparisons. He also asked about the evolution of LLM training data partnerships and the expected conversion of upfront data purchases into long-term ARR relationships.

Answer

Or Offer, Co-Founder and CEO, explained that NRR reflects the average of the past four quarters, noting that significant one-time LLM data engagements, which are a large part of recent expansions, do not immediately impact ARR-based NRR but are expected to convert to ARR deals. He expressed confidence that most LLM data engagements, which involve lengthy evaluation processes, will convert to sticky, long-term ARR deals, citing successful conversions already in place.

Surinder Thind asked about Similarweb's gross revenue retention (GRR) trends and net revenue retention (NRR), noting that while GRR is improving, NRR suggests challenges in the upsell process. He also inquired about the evolution of LLM training data partnerships and their conversion from upfront data purchases to longer-term ARR relationships.

Answer

Or Offer, Co-Founder and CEO, explained that NRR reflects the average of the past four quarters, and many large LLM data deals initially start as significant one-time tasks before converting to ARR, which impacts the NRR calculation. He expressed confidence that the majority of these engagements would convert to ARR deals due to the proven impact on other players. Rami Myerson, Head of Investor Relations, added that the NRR decline reflects strong expansion activity in 2024, particularly from large contracts booked in Q2 and Q3 of the previous year.

Surinder Thind questioned the behavior of larger clients (>$100k ARR) and the slight dip in NRR. He also asked about demand trends from smaller clients and the company's strategy for building out insights for various chatbots.

Answer

CEO Or Offer attributed the 1% NRR dip to a tough comparison from a large upsell in the prior year's Q1. He noted strong top-of-funnel demand from smaller clients and a significant increase in multi-year contracts. He also detailed plans to launch a full "AI intelligence" model this quarter, combining traffic data with market share and sentiment analysis for chatbots.

Surinder Thind inquired about the allocation of the incremental ~$20 million in spending between go-to-market and R&D, the hiring cadence, and the rationale for the 15% growth outlook for 2025 given the increased investment.

Answer

CEO Or Offer explained that the majority of the spend is for accelerating go-to-market teams, with some allocated to R&D and to offset foreign exchange pressure. He stated the 15% growth guidance for 2025 is a starting point, anticipating softness in Q1 due to hiring ramp-up and FX headwinds, followed by significant growth acceleration in the second half of the year, setting a higher exit rate for 2026.

Surinder Thind asked for more detail on the journey of the two 8-figure customers, specifically their recent growth trajectory, and questioned where the accelerated sales hiring would be focused.

Answer

CEO Or Offer described the 8-figure deals as the culmination of nearly decade-long relationships that expanded across multiple solutions before growing into major data partnerships. He explained the hiring acceleration is focused on two areas: capturing increased inbound demand and proactively targeting enterprise clients in key industries.

Surinder Thind asked about the current demand environment, client sentiment towards innovation spend, and the sustainability of EXL's double-digit organic revenue growth.

Answer

Rohit Kapoor (CEO) and Vikas Bhalla (COO) characterized the demand environment as very strong with an expanded total addressable market (TAM). They highlighted a significant shift to data and AI-led revenue, now 56% of total revenue and growing at 18%, driven by Gen AI and Agentic AI moving from POCs to production. They expressed confidence in sustaining double-digit growth due to EXL's strategic positioning and ability to win new clients and market share.

Surinder Thind asked about the evolving demand environment, client sentiment towards innovation spend, and the sustainability of EXL's double-digit organic revenue growth. He also inquired about the deflationary impact of AI and how incremental revenue is generated to sustain growth.

Answer

Vikas Bhalla, Chief Operating Officer, characterized demand as strong, noting an expanded total addressable market and a visible shift to data and AI-led revenue, which now constitutes 56% of total revenue and grew 18% in Q3. He expressed confidence in sustained double-digit growth, driven by the data and AI-led business. Regarding AI's deflationary impact, Mr. Bhalla explained that while AI can deliver significant productivity benefits (e.g., 30% for a client), EXL maintains revenue by winning additional work from clients, expanding penetration, and opening new, higher-value revenue streams like Agentic AI, thus offsetting potential deflation.

Surinder Thind inquired about the competitive moat for EXL's proprietary AI solutions and the reasons for slower growth in Digital Operations compared to the Data & AI segment.

Answer

Chairman & CEO Rohit Kapoor detailed that EXL's moat is built on two pillars: access to proprietary datasets from its owned platforms for training unique AI models, and an accelerating pace of creating patented solutions. He clarified that the firm's overall double-digit growth target is driven by a strategic pivot to the faster-growing Data & AI segment, which is increasingly being embedded into traditional Digital Operations services.

Surinder Thind questioned the sustainability of EXL's first-mover advantage in AI and how the company plans to maintain it. He also asked about clients' willingness to adopt new AI technologies amid the current business cycle and the rapid evolution of the technology.

Answer

Rohit Kapoor, Chairman and Chief Executive Officer, attributed EXL's advantage to long-term foundational investments in domain expertise, data, and analytics, culminating in the excelerate.ai platform. He stressed that sustained investment is key to maintaining this lead. Regarding client adoption, Kapoor noted that clients are focused on reducing costs to fund strategic AI investments, a dual objective where EXL's value proposition of driving both efficiency and transformation fits perfectly.

Surinder Thind asked a strategic question about the increasing emphasis on developing proprietary IP in the current technology cycle. He also followed up on the challenge of client infrastructure readiness for AI and how EXL is successfully implementing solutions where competitors may be struggling.

Answer

Rohit Kapoor, Chairman and CEO, confirmed that developing proprietary IP and innovation are now critical for growth. He explained that EXL addresses client infrastructure challenges by assisting with the shift to the cloud, modernizing legacy platforms with tools like Code Harbor, and managing data assets, particularly unstructured data. This comprehensive approach enables clients to effectively leverage AI.

Surinder Thind asked about EXL's strategy for building proprietary AI models versus leveraging the broader ecosystem, and inquired about the level of investment required to support this build-out.

Answer

CEO Rohit Kapoor explained that EXL's strategy is twofold: build proprietary AI models in areas of deep domain expertise and proprietary data, and also integrate a mix of third-party LLMs and Agentic AI to optimize client outcomes. He noted EXL's models offer higher productivity and lower costs. Both Rohit Kapoor and CFO Maurizio Nicolelli confirmed that EXL will significantly step up OpEx and CapEx investments, funded by driving higher gross margins from value-added services, leading to incremental annual AOPM increases.

Surinder Thind asked about Cognizant's partnership strategy, specifically whether it's more important to partner with all major providers or be selective and a partner of choice with individual providers like Google Cloud Services, Anthropic, or OpenAI. He followed up by asking about the IP Cognizant is building, specifically the 1,500 agents in production, and how this impacts the revenue model, including charging for IP or custom building agents.

Answer

CEO Ravi Singisetti explained that the partnership lens is broader now, including SaaS companies, classical software companies, cloud hyperscalers, frontier model companies (like Anthropic), and startups. He emphasized building proprietary platforms and IP while also partnering to leverage external engines and build service layers around them. Regarding IP, he stated it's a combination: Flow Source platform improves productivity, impacting revenue and margin per person, while other IP and platforms focus on making raw AI enterprise-grade (accuracy, responsible AI, new pre-training methods). He cited multi-agent systems and context engineering as pioneering efforts, indicating a 'platforms plus capability' model.

Surinder Thind asked about Cognizant's partnership strategy, specifically whether it's more important to partner with all major providers or be selective and a partner of choice with individual providers like Google Cloud Services, Anthropic, or OpenAI. He followed up by asking about the IP Cognizant is building, specifically the 1,500 agents in production, and how this impacts the revenue model, including charging for IP or custom building agents.

Answer

CEO Ravi Singisetti explained that the partnership lens is broader now, including SaaS companies, classical software companies, cloud hyperscalers, frontier model companies (like Anthropic), and startups. He emphasized building proprietary platforms and IP while also partnering to leverage external engines and build service layers around them. Regarding IP, he stated it's a combination: Flow Source platform improves productivity, impacting revenue and margin per person, while other IP and platforms focus on making raw AI enterprise-grade (accuracy, responsible AI, new pre-training methods). He cited multi-agent systems and context engineering as pioneering efforts, indicating a 'platforms plus capability' model.

Surinder Thind of Jefferies Financial Group asked if the increased discussion of "innovation spend" signals a recovery in client discretionary spending. He also questioned whether OpenAI's new consulting services offering represents a competitive threat to Cognizant.

Answer

CEO Ravi Kumar S clarified that "innovation" currently means applying agentic AI to transform core business processes for better experience and lower cost, which is happening even with limited discretionary budgets. He asserted that frontier model providers are not a direct competitive threat, as implementing enterprise-grade AI requires deep domain knowledge, system integration, and "IP on the Edge" to handle business context, which is Cognizant's core strength.

Surinder Thind asked about the sustainability of Cognizant's proprietary AI solutions and whether the shift to a software-plus-services model is durable. He also inquired about the primary drivers of 2025 growth between large deal ramps and discretionary spend.

Answer

CEO Ravi Kumar S described their proprietary solutions like Flowsource as 'practical tooling' to bridge immediate client gaps, stating that as platforms evolve, Cognizant will move to solve the next set of problems. CFO Jatin Dalal clarified that the 'texture' of growth in 2025 will be different from 2024, driven by both the ramp-up of large deals and a recovery in short-term discretionary spend, which is reflected in a significant jump in Annual Contract Value (ACV) in Q4.

Surinder Thind asked about the broader VantageScore adoption curve, specifically how the decision between VS4, classic FICO, and FICO 10T plays out for lenders, and the competitive positioning of VS4. He also inquired about Equifax's strategic shift to be more than a data provider, asking if it signifies a move towards a platform and analytics approach.

Answer

Mark Begor, Chief Executive Officer, acknowledged FICO 10T's introduction but noted its higher price. He asserted that VantageScore 4.0 performs at or better than FICO classic and is on par with 10T, but at half the price, creating a strong incentive for change given the potential $500 million increased cost to the industry from FICO's 2026 pricing. He confirmed the shift, highlighting heavy investment in EFX.AI for scores, models, and products, which has shown significant performance lifts. He also mentioned deploying AI internally for productivity and enhancing the Ignite platform with AI capabilities to make it more user-friendly and deliver higher-performing analytics, driving adoption and share gains.

Surinder Thind asked about the VantageScore adoption curve, specifically how VantageScore 4.0 competes against FICO classic and the role of FICO 10T. He also inquired about Equifax's shift to being more than a data provider, focusing on a platform and analytics approach.

Answer

CEO Mark Begor stated that VantageScore 4.0 performs comparably to or better than FICO classic and is on par with FICO 10T, but at half the price, creating a strong incentive for change. He explained that Equifax is investing heavily in EFX.AI™ for scores, models, and products, delivering higher predictability and enhancing the Ignite analytics platform with AI capabilities to make it more user-friendly and deliver higher-performing analytics.

Surinder Thind inquired about secular considerations, such as AI, impacting long-term hiring trends in the talent business and asked for a realistic implementation timeline for VantageScore 4 and FICO 10T in the mortgage market.

Answer

CEO Mark Begor acknowledged that AI will likely lead to less hiring over the long term but noted the immediate impact is from economic uncertainty. CFO John Gamble added that currently, employee churn is simply down. Regarding the scores, Begor emphasized the implementation is highly complex and will take significant time, with no meaningful change expected in the second half of the year, as it depends on individual lender decisions.

Surinder Thind of Jefferies inquired about the importance of the purchase versus refinance mix in achieving the $1.1 billion mortgage revenue recovery opportunity. He also asked for color on the expected strength of pricing benefits in 2025 compared to 2024.

Answer

CEO Mark Begor explained that the mortgage recovery model assumes a return to historical 2015-2019 averages, which includes a significant purchase component. He expressed confidence in the pent-up demand for both purchase and refi activity as rates decline. Regarding 2025 pricing, Begor declined to provide specific guidance but confirmed that Equifax plans to implement price increases on January 1, consistent with past practice, with more details to be shared in February.

Surinder Thind from Jefferies Financial Group asked how the company's delivery footprint is evolving with new AI tools, specifically regarding the seniority mix of its workforce. He also questioned how EPAM, as a pure-play engineering firm, fits into a future that may require managed services for agentic workflows.

Answer

Balazs Fejes, President of Global Business & CRO, responded that the goal is a sustainable, balanced pyramid of talent, emphasizing that engineering skills, not just coding, remain critical. CEO Arkadiy Dobkin clarified that while EPAM avoids traditional legacy managed services, it does manage the complex platforms it builds for clients, which is a dynamic and continuous engagement model distinct from traditional outsourcing.

Surinder Thind of Jefferies asked about the structural impact on margins from a more diversified global delivery footprint. He also sought to quantify the opportunity from reshaping the employee pyramid by hiring more junior talent.

Answer

CFO Jason Peterson explained that margin profiles across different geographies are more similar than perceived and that the main pressures are the senior-heavy pyramid and the gap between wage inflation and pricing. CEO Arkadiy Dobkin added that while there is an opportunity to benefit from hiring more junior talent, the timing and extent of that benefit depend on how the demand environment evolves. Both executives agreed it is a dial that takes time to show results.

Surinder Thind of Jefferies Financial Group asked about the sales performance and attach rates for premium modules in the current market and requested an update on trends in the international business.

Answer

CEO Ryan Barretto noted strong progress in building a multiproduct pipeline with solutions like Guardian and NewsWhip, adding that significant opportunity remains to increase attach rates. He described the international market as a strong, albeit smaller, opportunity. CFO Joe DelPretto confirmed the international revenue mix was materially unchanged from the previous quarter.

Surinder Thind asked about the longer-term implications for Semrush as search evolves with fewer traditional blue links. He also inquired about any detectable changes in enterprise customer purchasing behavior from Q1 to Q2 and the rationale behind the strategic shifts announced.

Answer

CEO Bill Wagner explained that links within AI-generated answers convert at a rate over four times higher, creating a new priority for brands that plays to Semrush's strengths. Regarding enterprise, Wagner reiterated his increased conviction since becoming CEO, leading to a strategic reallocation of capital away from low-return marketing spend and towards high-demand areas like Enterprise and AI, complemented by a share repurchase program.

Surinder Thind from Jefferies inquired about the trend of vendor consolidation in the go-to-market tech stack and whether this is becoming a primary growth driver for ZoomInfo.

Answer

CEO Henry Schuck confirmed that recent product innovation has positioned ZoomInfo to be a beneficiary of consolidation, winning deals where clients unify their sales, marketing, and operations teams on the platform. While he sees it as a contributor to growth, he noted that DaaS, Go-to-Market Studio, and Copilot expansion are expected to be larger drivers.

Surinder Thind from Jefferies asked about the theme of vendor consolidation in the go-to-market tech stack and whether it will be a primary growth driver for ZoomInfo.

Answer

CEO Henry Schuck confirmed that recent product innovation has positioned ZoomInfo to be a beneficiary of tech stack consolidation, winning deals that span sales, marketing, and operations teams. However, he believes that while consolidation will be a contributor, the expansion of DaaS, Go-to-Market Studio, and Copilot will be bigger growth drivers in the near term.

Asked for a breakdown of Net Revenue Retention (NRR) by customer segment, the mix of new business wins compared to the current ARR mix, and for clarification on the timing of the $18 million Copilot ARR figure.

Answer

Henry Schuck stated that new business from enterprise and mid-market was at a high watermark, representing a larger percentage than their historical mix. The current customer base is roughly 40% enterprise and under 30% mid-market. He also confirmed the $18 million Copilot ACV figure was as of the end of Q2.

Surinder Thind of Jefferies asked a long-term strategic question about the end-state Grid Dynamics is solving for with its AI transformation, specifically wondering what level of AI-driven automation in software development, such as 50% or 75%, the company is planning for.

Answer

CEO Leonard Livschitz responded that for basic coding, automation will likely go well beyond 50%, but the percentage will be lower for more complex system management and integration. CTO Eugene Steinberg differentiated between AI's strength in rapid prototyping versus the continued need for human supervision and creativity for mission-critical production systems. SVP & Head of Americas Vasily Sizov added that simple AI assistants will see near-100% adoption, while more complex agent-based coding has a longer adoption curve.

Surinder Thind asked a big-picture question about the company's investment philosophy: if revenue outperformance would flow to margins or be reinvested, and if the company is entering a period of elevated investment given the opportunities ahead.

Answer

CFO Eric Abouaf responded that the approach is a balanced 'both and' strategy. The company needs to reinvest in products, coverage, and technology to drive future revenue growth, but it also aims to expand margins. He explained that productivity initiatives help fund these investments, allowing the company to grow while widening margins, as reflected in the current full-year guidance. President & CEO Martina Cheung added that the medium-term plan will be shared at the upcoming investor day.

Surinder Thind asked a big-picture question about investments: if the company outperforms, will the upside flow to margins or be reinvested, and whether investors should anticipate a period of elevated investment.

Answer

CFO Eric Abouaf described the company's philosophy as a balanced 'both and' approach. He explained that investments are necessary to drive revenue growth, and the company uses productivity gains to fund those investments while also expanding margins. He pointed to the current full-year guidance as proof of this model. President & CEO Martina Cheung added that the broader multiyear vision will be detailed at the upcoming Investor Day.

Surinder Thind requested details on the specific expense management levers S&P Global can utilize to manage its cost base and navigate the range of performance expectations.

Answer

CFO Eric Aboaf outlined several key levers, including managing headcount and hiring for backfills, variable incentive compensation that flexes with performance, discretionary third-party and professional services spend, and, as a last resort, adjusting investment timing. He confirmed that selective tactical adjustments are already being made.

Surinder Thind asked for more color on the creation of the Chief Client Officer role, specifically what challenge it aims to address and if it implies a more integrated sales approach.

Answer

Incoming President and CEO Martina Cheung explained that the role is designed to address the challenge that clients using products from one division are often unaware of the full breadth of S&P Global's offerings. The new function, led by Sally Moore, will ensure customers understand the company's complete capabilities, bring consistency to go-to-market practices, and bolster strategic client relationships.

Surinder Thind requested a strategic update on Blue Prism's product lifecycle and pipeline, and asked about the extent of the slowdown and recovery outlook for the Intralinks business.

Answer

Chairman and CEO William Stone highlighted that SS&C is using its own successful internal deployment of Blue Prism as a case study to drive client interest in its AI solutions. President and COO Rahul Kanwar noted that leading indicators for Intralinks, such as deal counts and bookings, are now up, and he expects positive growth in the second half of the year.

Surinder Thind of Jefferies asked for an outlook on the Intralinks business in the current environment, an update on the Blue Prism rollout strategy, details on the complexity of internal digital worker use cases, and the resulting impact on operating margins.

Answer

Rahul Kanwar (Executive) stated that Intralinks is conservatively forecasted to grow in the mid-single digits, with potential upside if markets improve in the second half. For Blue Prism, he highlighted the opportunity in providing trusted, governed AI platforms for regulated industries. He confirmed that internal AI use cases are growing in complexity, serving as powerful proof points for customers. Bill Stone (Executive) added that these internal efficiencies help maintain and expand margins, noting the 30-40 basis point increase in adjusted EBITDA margin despite heavy investment.

Surinder Thind asked for clarification on the implied slowdown in the Q4 organic growth forecast and questioned the potential strategic impact of recent healthcare industry news, such as a potential Cigna-Humana merger, on the DomaniRx business.

Answer

Chairman and CEO Bill Stone attributed the Q4 organic growth outlook primarily to a challenging comparison, as Q4 2023 was a substantially stronger quarter than the rest of that year. Regarding healthcare M&A, he stated that SS&C sees opportunity regardless of the outcome, citing long-standing client relationships with both companies and the advanced capabilities of the DomaniRx platform, which he believes will be viewed positively in any scenario.

Surinder Thind asked about the specific changes made to the sales incentive model and how they are impacting performance.

Answer

CEO Matti Shem Tov detailed a multi-faceted approach, including upgrading sales leadership, empowering the customer success team (which improved renewal rates by 1%), and rebalancing incentive plans to better reward subscription revenue growth, retention, and new logo wins.

Surinder Thind asked why the company isn't taking margins down further to accelerate investment and whether leveraging technology across segments could complicate a potential divestiture process.

Answer

CEO Matti Shem Tov responded that the business segments can operate on a stand-alone basis and that the potential for separation is considered when sharing technology. He asserted that the current investment level is appropriate and that the strategic focus is on being more laser-focused on a smaller number of high-impact projects, rather than simply increasing spending by lowering margins.

Speaking on behalf of Surinder Thind, Colton Feldman asked for more detail on lower renewal rates and which specific segments were experiencing higher churn.

Answer

CFO Jonathan Collins clarified that renewal rates in the A&G segment remain strong. He specified that the renewal pressure was concentrated in the Life Sciences & Healthcare and IP segments, driven by customer budget constraints and, for IP, customers awaiting the new Derwent product launch.

Surinder Thind inquired about the characteristics of the new large deals, such as contract duration and productivity improvement clauses, and how client expectations are changing with the integration of AI. He also questioned the guidance assumption of 'no improvement in discretionary spend,' asking if a potential degradation should be considered given macro uncertainty.

Answer

CEO Keshav Murugesh explained the large deals are shifting conversations from simple cost savings to a Total Cost of Ownership (TCO) model, creating 'Black Box' relationships. Executive David Mackey added the deals are 5+ years in duration and that productivity commitments vary based on upfront AI deployment. Regarding discretionary spend, CFO Arijit Sengupta and Mackey stated the guidance is largely de-risked, as WNS's project work is primarily focused on cost reduction themes, making it less likely to be deprioritized.

Surinder Thind asked for characterization of the sales cycle for normal deals and sought more detail on the 13 unique digital Gen AI assets, questioning if they are proprietary or integrated with partners.

Answer

CEO Keshav Murugesh stated the typical sales cycle is 6-9 months and that the current macro and tech environment is adding momentum. Executive David Mackey noted that new logo signings and relationship expansions are up year-over-year. Regarding Gen AI, Mackey explained the assets are proprietary but integrate best-in-class third-party tech, designed to be reusable and customizable rather than standalone products.

Surinder Thind of Jefferies inquired about the client benefits and revenue impact from WNS's recent Generative AI implementations, and also asked for clarification on the drivers behind the expected volatility in employee attrition.

Answer

Executive David Mackey explained that Gen AI deals have been additive to revenue, focusing on expanded benefits like customer satisfaction and new revenue streams rather than cost reductions. He noted that while some pressure is expected over time, current niche solutions are not negatively impacting revenue. Regarding attrition, Mackey stated that while the rate is expected to stabilize in the low-to-mid 30% range, normal quarter-to-quarter fluctuations are expected and not unusual for the current environment.

Surinder Thind from Jefferies asked for an assessment of the SMB market, questioning if it was weaker than expected and what the outlook is for the remainder of the year.

Answer

CEO Paul Bay confirmed that the SMB segment was down by double digits in Q4 but noted there are early signs of a recovery. He believes a comeback is tied to the broader recovery in Advanced Solutions. While a significant rebound may not occur in Q1, customer conversations suggest pipelines are building for the second half of the year.

Surinder Thind of Jefferies Financial Group Inc. asked about the progress of the Xvantage platform and the company's internal digital transformation, seeking to understand the potential for future efficiency gains.

Answer

CEO Paul Bay stated that Xvantage is now active in 14 countries, built upon a $600 million cloud platform investment and enhanced with new code and over 100 AI models. He characterized the current phase as the 'early days' of decommissioning legacy ERP systems, which implies that significant future operational efficiencies are expected as the company transitions away from running parallel systems.

Surinder Thind asked about the business impact of the changing insurance landscape in California, particularly the state's increasing role as an insurer.

Answer

President and CEO Lee Shavel explained that the situation highlights the need for increased, risk-based pricing. He noted that California's recent decision to allow forward-looking models is a positive step, and Verisk was the first to submit its wildfire model. He believes the situation ultimately heightens the importance of catastrophic risk modeling and analytics for the industry.

Surinder Thind asked how Verisk is assessing the current transition in the insurance industry, where companies are focusing more intensely on profitability amid challenges in certain markets.

Answer

President and CEO Lee Shavel framed the industry's focus on profitability as a significant opportunity for Verisk. He explained that this environment increases demand for Verisk's data and analytics for better risk selection and for its solutions that automate functions and improve internal process efficiency. Shavel noted these topics are central to high-level enterprise discussions with clients' C-suite executives, citing the Whitespace platform in London as an example of improving ecosystem efficiency.

Surinder Thind asked if the natural scaling down of large projects won in previous years is creating headwinds and contributing to increased volatility in the business.

Answer

CFO Juan Urthiague acknowledged that the post-COVID market is more volatile, with varied performance across industries and regions, unlike the broad-based growth of the past. However, he emphasized that Globant's business is highly diversified. CEO Martín Migoya added that projects naturally evolve and turn over. He stressed that Globant's ability to continuously expand its offerings to meet clients' changing needs with new technologies is the key driver of sustained growth within these long-term relationships.

Surinder Thind requested more details on the MIT review findings and asked about Globant's own progress and future potential in deploying AI internally.

Answer

CTO Diego Tartara explained that Globant has been 'super aggressive' in adopting AI, developing its own agentic tools to automate full workflows in areas like code fixing and testing. He noted that while AI models are plateauing, the next frontier is working with these models through agents and other techniques to extract maximum value, a process Globant is actively pursuing to bring efficiencies to clients.

Surinder Thind asked about the impact of accelerating product innovation on TransUnion's future growth rate, questioning whether it is intended to drive above-trend growth or simply support a normalized growth rate.

Answer

CEO Christopher Cartwright reiterated his belief that the business can compound at high single-digit revenue growth, positioning the current wave of innovation as a 'net positive' that enhances their ability to win, retain, and grow. He provided the example of consolidating 87 marketing products into the single TruAudience solution as evidence of the profound and competitiveness-enhancing nature of their transformation.

Surinder Thind asked about the duration of the revenue headwinds from the SaaS transition, questioning if they would persist beyond 2025. He also inquired whether the lighter revenue outlook has prompted adjustments to the company's spending and investment plans.

Answer

CFO Roni Giladi explained that the SaaS transition's impact will extend beyond 2025, likely over a 2-to-5-year period, as it involves both new deal implementations and a multi-year process of converting existing customers. He noted the headwind's percentage impact should decrease over time. Regarding spending, he stated Sapiens is maintaining its operating margin target by reinvesting growing profit dollars into strategic areas like sales, marketing, and R&D, rather than expanding the margin percentage.

Surinder Thind posed a high-level question about the metrics used to evaluate the success of Homes.com beyond net bookings, and how patient investors should be with the initiative.

Answer

CEO Andy Florance responded that a conclusive result cannot be expected in just seven months. He said the company is focused on leading indicators like growth in consumer awareness, site preference, and improving member NPS scores. He stated that while the micro-level sales metrics are laying out a path to a good result, it will likely be next year before the success becomes obvious to the public.

Surinder Thind sought clarification on management's comment about a willingness to 'make any changes' to challenged revenue streams, asking about potential strategic options, the integration level of these businesses, and the pace of investment in new technologies like AI.

Answer

CEO Anthony Jabbour confirmed that for the challenged 10% of revenues, 'everything is on the table,' including strategic partnerships, licensing, or other options. He clarified that Digital Marketing is less integrated, while the SMB/Credibility business's data is valuable and would likely involve ongoing licensing in any deal. Regarding AI, Jabbour expressed confidence in the current investment level, noting that efficiencies from completed projects are funding new initiatives and that AI capabilities are developing faster than anticipated.

Surinder Thind from Jefferies requested more details on the partnership with IBM for the 'Ask Procurement' solution, including the arrangement and revenue model. He also asked about the strategy for the 10% of revenues that are not growing, such as the credibility business.

Answer

CEO Anthony Jabbour described the IBM partnership as a go-to-market collaboration leveraging IBM's watsonx technology and enterprise client base with Dun & Bradstreet's data and analytics. Regarding the credibility business, he detailed a strategy to retool the value proposition by incorporating more client data to improve credit scores and by cross-selling a simplified version of the Hoovers solution to help these small businesses grow.

Asked for color on the 20 million daily data insights, specifically how they are changing adviser behavior and benefiting the business. Also questioned why the overall AUMA fee rate has remained stable over the years despite a significant increase in the proportion of higher-fee AUM within the total AUMA mix.

Answer

Executives explained that a handful of the 80 insight use cases are gaining traction, such as identifying tax and annuity opportunities. The key is delivering these insights directly within the adviser's workflow, with benefits expected to grow over time. Regarding the fee rate, they reiterated that the blended rate is dragged down by very low-fee reporting-only AUA. While these assets are essential for client relationships, their low fee rate masks the positive mix shift towards higher-fee AUM products.

Asked for details on the company's 'growth algorithm,' clarification on growth targets relative to the market, and the outlook for the Data and Analytics business for the upcoming year.

Answer

The growth algorithm is based on market appreciation plus secular flows and deepening relationships with existing clients by cross-selling integrated solutions, with a goal of double-digit growth. The Data and Analytics business is considered stabilized after a challenging 2023, showing sequential growth in Q4, and is focused on new products for medium-term recovery.