Good day, ladies and gentlemen. And welcome to the 2023 Fourth Quarter Genpact Limited Earnings Conference Call. My name is Michelle, and I will be your conference moderator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. As a reminder, this call is being recorded for replay purposes. The replay of the call will be archived and made available on the IR section of Genpact’s website. I would now like to turn the call over to Roger Sachs, Vice President of Investor Relations at Genpact. Please proceed.

Thank you, Michelle, and good afternoon, everybody. And welcome to Genpact’s fourth quarter and full year 2023 earnings conference call. We hope you’ve had a chance to read our earnings press release posted on the IR section of our website, genpact.com. Today we have with us Tiger Tyagarajan, our outgoing President and CEO; BK Kalra, our incoming President and CEO; and Mike Weiner, our Chief Financial Officer. Tiger will start with a high-level overview of our performance for the full year 2023. BK will then speak to our strategic priorities and outlook. And finally, Mike will cover our financial performance and outlook in greater detail before opening the floor to your questions. Please also note that during this call, we will make forward-looking statements, including statements about our business outlook, strategies and long-term goals. These comments are based on our plans, predictions and expectations as of today, which may change over time. Our actual results could differ materially due to a number of important risks and uncertainties, including the risk factors in our 10-K and our 10-Q filings with the SEC. And during this call, we will discuss certain non-GAAP financial measures. We have reconciled those to the most directly comparable GAAP financial measures in our earnings press release. These non-GAAP measures are not intended to be a substitute for our GAAP results. And finally, this call in its entirety is being webcast from our Investor Relations website. An audio replay and transcript will be available on our website in a few hours. And with that, let me turn the call over to Tiger.

And I was on mute. Thank you, Roger. Good evening, everyone, and thank you for joining us today for our fourth quarter and full year 2023 earnings call. I will start with a brief overview of our 2023 financial results and then hand the call over to our incoming CEO, BK, to take you through our strategic priorities and outlook for 2024. For the full year 2023, we delivered total revenue of $4.48 billion, up 2% year-over-year and 3% on a constant currency basis, driven by Data Tech AI services revenue of $1.99 billion, up 2% on both an as-reported and constant currency basis, and Digital Operations services revenue of $2.48 billion, up 3% year-over-year as-reported or 4% on a constant currency basis. Gross margins of 35.1%, which was flat year-over-year, income from operations margin of 14.1%, up 260 basis points year-over-year and adjusted operating income margin of 17%, up 50 basis points year-over-year. And diluted earnings per share of $3.41, up 81% year-over-year and adjusted diluted earnings per share of $2.98, up 9% year-over-year. Bookings for the full year reached $4.9 billion, up a strong 26% on a year-over-year basis, as we signed a record 14 new large deals, each with total contract value greater than $50 million. Inflows remained healthy, resulting in a high-quality pipeline that reached near-record levels as we exited the year. Win rates increased to 60% versus 51% in the prior year and we added 91 new logos. Sole sourced deals represented 40% of bookings, below our typical 50% level, reflecting the much higher number of large deal wins, which tend to be more competitive. Throughout the year, we made progress on our key initiatives for 2023. First, revenue from priority accounts grew 4% year-over-year and expanded to 63% of total revenue. Second, we strengthened and expanded relationships with key cloud technology partners to co-innovate and develop joint IP solutions. Third, we opened and scaled three new operating centers in Tier 3 cities in India. Fourth, we continued to drive non-FTE commercial models, with non-FTE deals reaching 20% of total revenue in the fourth quarter and 17% of total revenue for the full year. Fifth, investments in our large deal team generated the strong bookings and pipeline that I described earlier. And finally, for the fourth consecutive year, our global workforce completed approximately 10 million training hours on Genome, our on-demand learning platform. Finally, before I turn the call over to BK, I want to take a moment to reflect on Genpact’s major accomplishments during these last 12 years. During that time, we grew total revenue at a compounded annual growth rate of 9%, driven by a number of important strategic pivots, including our decision to double down on a chosen set of industry verticals, services and geographic markets; our decision to extend beyond business process management with significant investments in Data Tech and AI; and finally, our move over the last five years to the middle and front office with our emerging service lines in supply chain, risk, and sales and commercial services. All of our success would not be possible without the tireless efforts of the Genpact team. Their constant passion and focus on driving client outcomes and value and their insatiable curiosity and desire to learn has become our cultural foundation and has been a source of endless inspiration for me. It is my daily interaction with them that I’ll miss the most as I transition to the next phase of my journey. With regard to BK, our Board could not have picked a better person to be Genpact’s next CEO. His deep understanding of our business, the trust and relationships he has built with our clients, and his strategic leadership with a strong bias for technology and AI has been a key driver of our success, driving the significant expansion of our consumer healthcare and financial services verticals that collectively generated $2.8 billion in revenue in 2023. I am very excited to see him lead this next evolution of Genpact. And finally, I want to sincerely thank our Board for being such great stewards of the company through multiple cycles and on so many occasions, being my and my team’s guide and mentor. With that, let me turn the call over to BK.

Thank you, Tiger, and good afternoon, everyone. Let me start by saying that I am excited and humbled to lead our 125,000 talented people around the world that make up Genpact. I have seen firsthand the incredible dedication of the Genpact team and the significant value we add to our clients, designing, implementing, and running mission-critical operations for some of the world’s biggest brands. In preparation for stepping into the CEO role, I have been carefully assessing our senior leadership team and the strategic priorities we must pursue to put us on the path towards accelerating growth. As I reflect on 2023, there is no doubt that a macroeconomic environment challenges us and the industry as a whole. I am very proud of the team and the long-term accomplishments outlined a moment ago. But I must also say that we must improve our execution to reach our full potential. Digital Operations and Data Tech AI together represent a $750 billion market, growing at a high single-digit growth rate, well above the 3% constant currency growth we delivered in 2023. My number one goal as CEO is to make sure that we realize our full potential. As a longstanding member of the Genpact team, I have a clear point of view about where we can improve execution. We need to sharpen our focus and drive simplification to increase speed and accountability throughout the organization. In 2024, we will be laser-focused on changing the conversation we are having with clients by bringing more data and technology to bear to deliver more holistic and growth-oriented solutions. We will also drive simplification to increase speed and accountability. Let me give you a couple of examples. First, we have simplified our sales and go-to-market leadership structure, moving from a highly matrixed organization to 12-unit leaders that mirror our client organization and roll it into three vertical segments we report externally. Second, we have unified Data Tech and AI under one leader, which matches how clients operate and buy. Both of these changes will increase speed and accountability, driving improved sales execution in 2024, particularly in Data Tech AI. In my first 100 days, I am prioritizing A, spending more time with clients as we partner with them to shape the future, theirs and ours, by leveraging Data Technology and AI first principles. I have already met a number of our clients since the announcement and I am committed to meeting with over 100 clients in my first 100 days to further inform our strategy. B, continuing to build our senior leadership team. We have made a number of important additions to our leadership team in the last few months across operations, finance, marketing, and I am committed to continually identifying and filling gaps quickly. Reaching our full potential will require maximizing our talent and driving greater accountability across the organization. And C, strengthening our partner relationships to deliver holistic solutions. I believe we are in a unique position to further leverage our domain and industry expertise, access to Data, and CXO relationships to deliver improved performance for clients and thereby improve revenue growth and profitability for Genpact. I want to be clear that doing business as usual, just doing what we have done in the past, only slightly better, is not acceptable. That said, improving execution will not happen overnight. It will take time and investment. In 2024, we plan to invest in two key areas: partnerships and AI first. I mentioned partnership a moment ago and we will continue to invest in deepening our relationships with various platform providers, broad and specialized, as well as with enterprise application and cloud workflow technology partners. Second, we are moving quickly to embed AI in all our solutions that we bring to market and investing to make our internal operations AI first as well. For the first time, we have appointed a chief technology and transformation officer who will lead the charge on embedding AI in our internal operations. With regards to gen AI, we continue to make rapid progress. Last year, we had more than 3,000 client conversations, more than 80,000 Genpact team members enrolled in AI training programs, the launch of our first AI innovation center in London, and more than 50 gen AI use cases in testing and 30 gen AI solutions in production environments with clients, either deployed or going live. Turning now to our 2024 outlook, and Mike will go through more details, but I would like to provide a high-level overview up front. First on revenue, 2024 will be a year of building as we strengthen our foundation for future growth. Therefore, we are setting our revenue guidance for the full year at 2% to 3% year-over-year growth on an as-reported basis. On profitability, we expect to keep gross margin and AOI margins roughly flat in 2024 at 35% and 17%, respectively. With regard to any revenue upside we are able to achieve over the course of the year, our bias will be to reinvest a portion of the upside back into the business to drive future revenue growth. Before I hand it over to Mike, I want to say a few words about Tiger. We have been exceptionally fortunate to have Tiger lead us for the past 12 years. He shaped the company to be one of the world’s leaders in domains like finance and accounting, procurement, and supply chain, to name a few. His commitment to clients is unparalleled and will always act as a guide for all of us at Genpact. And his focus on building the capability of our team at scale through platforms like Genome is inspiring. On behalf of all of Genpact, I do want to thank Tiger for his enormous dedication and leadership. Finally, I want to conclude by saying that I am confident that we will achieve our full potential, delivering the revenue growth and profitability we believe we are capable of. That said, I also want you to know that I understand that actions speak louder than words, and on that point, I look forward to providing more details and progress reports to you in the coming quarters. With that, let me turn the call over to Mike.

Thank you, BK. I want to congratulate you on your appointment as Genpact’s new CEO. Having worked with you closely in recent years, I’ve witnessed your strong commitment to execution, financial expertise, and your talent for motivating teams. We are fortunate to have you leading us. I will now go over the fourth quarter results and key highlights from our full-year 2023 performance, followed by our outlook for 2024. Starting with the fourth quarter results, total revenue reached $1.15 billion, reflecting a 4% increase year-over-year, both as reported and on a constant currency basis. Data Tech and AI services revenue, accounting for 44% of total revenue, rose by 3% year-over-year or 2% on a constant currency basis. This growth was mainly fueled by increased sales in Data and Analytical services, particularly in supply chain and risk areas. Digital Operations services revenue, which makes up 56% of total revenue, saw a 5% year-over-year increase or 4% on a constant currency basis, largely due to timely deal ramps from recent significant bookings. From a sector standpoint, Financial Services revenue went up by 4% year-over-year, driven by large deal ramps, though this was partly offset by ongoing pressures on client discretionary tech spending. Consumer and Healthcare revenue grew by 2% year-over-year, largely due to rolling out finance, accounting, and supply chain projects, which faced some headwinds from discretionary tech spending and the effects of last year's divestiture of a business classified as held for sale. High Tech and Manufacturing revenue saw a 6% increase year-over-year, primarily due to growth from new clients in finance and accounting engagements across both Digital Operations and Data Tech and AI services, although impacted by reduced scope from a High Tech client earlier in 2023. Adjusted operating income was 17.7%, an increase of 70 basis points from last year, due to improved gross margins and general operating efficiencies. Note that our performance last fourth quarter benefited from businesses that were later divested. The gross margin in this quarter increased by 70 basis points year-over-year, linked to cost management actions taken earlier. We're seeing better utilization and a favorable mix of Digital Operations revenue, although balanced against the rise in large deal ramps. SG&A as a percentage of revenue decreased by 80 basis points year-over-year to 20.7%, largely due to the absence of expenses from non-strategic businesses that were sold, coupled with overall operating leverage, despite higher investments in sales, marketing, and research and development in the fourth quarter of 2023. Our effective tax rate was negative 83.8%, in contrast to 27.1% for the same period last year, primarily influenced by a one-time $170 million benefit related to the intercompany transfer of specific intellectual property rights. Excluding this effect, our effective tax rate would have been 23.4%. GAAP net income stood at $291 million, a 225% increase year-over-year, with GAAP diluted EPS reaching $1.59, a 231% rise year-over-year. These increases reflect the tax benefits mentioned. Adjusted EPS was $0.82, up 17% from $0.70 in the fourth quarter last year, driven by higher adjusted operating income of $0.07, lower taxes contributing $0.05 each, a reduction in outstanding shares worth $0.02, and a $0.01 benefit from lower interest expense, though slightly offset by a 2% impact from reduced FX remeasurement gains compared to the same period last year. Our attrition rate in the fourth quarter was 23%, close to the lower end of our historical range. When excluding involuntary attrition and employees with fewer than three months of service, the attrition rate was 19%. Now I'll touch on our full-year 2023 performance. Total revenue was $4.48 billion, representing a 2% increase year-over-year or 3% on a constant currency basis. Data Tech and AI services revenue, comprising 45% of total revenue, increased by 2% on both an as-reported and constant currency basis. Digital Operations services revenue, making up 55% of total revenue, climbed 3% year-over-year or 4% in constant currency. During the year, we increased the number of client relationships with annual revenue exceeding $5 million from 158 to 185. Additionally, clients generating more than $25 million rose to 34 from 39, while those with revenues over $100 million increased from three to five. Gross margin for the full year was flat compared to 2022, primarily due to the ramping up of larger deals involving significant onshore delivery, which typically shows lower margins initially. Despite the flat gross margin, adjusted operating income margin improved by 50 basis points year-over-year to 17%, driven by cost efficiencies. SG&A as a percentage of revenue declined by 110 basis points to 20.4%, largely because of the absence of costs linked to the divested non-strategic business and overall operating leverage, though higher investment activity was noted in the latter half of the year. Our full-year tax rate was negative 4.8%, down from 24% in 2022, driven mainly by the one-time benefit from the IP transfer previously mentioned. Excluding that event, the effective tax rate for 2023 would have been 23.4%. Thanks to the tax benefit, our full-year GAAP net income amounted to $631 million, which is up 79% year-over-year, and the full-year GAAP diluted EPS was $3.41, showing an 81% increase year-over-year. Adjusted EPS was $2.98, a 9% year-over-year increase from $2.74 in 2022. This increase of $0.24 was mainly due to a higher adjusted operating income of $0.18, a lower share count contributing $0.05, lower net interest expense providing $0.02, and a $0.04 benefit from reduced taxes, partially offset by lower FX remeasurement gains in 2023, which accounted for a $0.05 decrease. Now regarding cash flow, our year-end cash and equivalents totaled $584 million compared to $647 million at the end of the fourth quarter of 2022. We reduced total debt by $161 million, ending the year with a net debt-to-EBITDA ratio of 0.9 times across the last four quarters. With undrawn debt capacity and existing cash balances, we are well-positioned to pursue growth opportunities and implement our capital allocation strategy that includes reinvestment, M&A, and returning capital to shareholders. Days outstanding increased from 81 days in 2022 to 88 days due to greater use of non-FTE pricing models and client cash management practices in a high-interest-rate environment. Overall, the quality of our portfolio remains very strong. Despite higher days sales outstanding, we generated $491 million in cash from operations, surpassing our expectations for the year, primarily driven by higher adjusted operating income. Capital expenditures were around 1.4% of revenue, aligning with our expectations. During the fourth quarter and the full year of 2023, we returned $100 million and $325 million of capital to shareholders, respectively. This included dividend payments of $25 million in the fourth quarter and $100 million for the year. We also repurchased 2.2 million shares for a total of $75 million at an average price of $34.27 per share during the quarter, and 6 million shares for $225 million at an average price of $37.48 for the year. Our buyback activity in 2023 reduced our net share count by 3%, as we took advantage of significant discounts in our intrinsic value calculations. Now, let me provide insights on our outlook. I want to note that we have established a new guidance structure for 2024. Specifically, we will provide full-year revenue guidance for Digital Operations and Data Tech and AI services revenue, along with first-quarter guidance for total revenue, gross margins, and adjusted operating income margins. Genpact’s outlook for full year 2024 includes total revenue projected to be between $4.57 billion and $4.61 billion, indicating year-over-year growth of about 2% to 3% as reported, and 2.1% to 3.1% based on constant currency. This incorporates Digital Operations services revenue growth of about 3% year-over-year and Data Tech and AI services revenue growth of about 1.9% year-over-year at the midpoint of the range as reported. On a constant currency basis, Digital Operations services revenue is expected to grow around 3.1% year-over-year and Data Tech and AI services is anticipated to grow about 2.1% year-over-year at the midpoint. It is important to note that given our booking mix and the timing of deal ramps, we project revenue to be higher in the second half of the year compared to the first half, consistent with our historical trends. We expect a gross margin of around 35%, an adjusted operating income margin of about 17%, and an adjusted EPS in the range of $3 to $3.03, indicating year-over-year growth of 1% to 2%. This growth includes a positive contribution of $0.06 from the lower share count, offset by an anticipated increase of $0.04 in expected taxes, $0.04 from higher interest expenses, and a negative year-over-year FX impact of $0.02 due to a $4 million remeasurement gain recorded last year. Our effective tax rate is projected to be 24.5%, an increase from the 23.4% reported for the full year 2023, reflecting new global minimum tax rates and a reduced year-over-year benefit linked to stock-based compensation. We are forecasting cash flow from operations of approximately $500 million, with capital expenditures expected to be around 1.5% to 2% of revenue in 2024, which includes investments in internal systems upgrades. For the first quarter, we expect total revenue between $1.108 billion and $1.114 billion, which represents year-over-year growth of about 1.75% to 2.25% as reported, or 1.95% to 2.45% on a constant currency basis. This figure includes approximate year-over-year growth of 2.8% in Digital Operations revenue and 1% in Data Tech and AI services revenue as reported, with 3% growth for Digital Operations and 1.3% for Data Tech and AI services on a constant currency basis. Gross margin is anticipated to begin the year at about 34.5% in the first quarter and increase throughout the year as we progress with offshoring delivery, improving utilization, and continuing to adopt non-FTE pricing commercial models. We expect the adjusted operating income margin to start around 16% in the first quarter, with a gradual increase as gross margin rises. We believe that the investments in partnerships and AI that BK mentioned in his opening remarks will mainly be funded through efficiency gains with no significant increase in overall full-year operating expenses in absolute terms compared to last year. However, as BK noted, if we achieve revenue growth beyond expectations this year, we aim to reinvest a portion of that surplus back into the business to drive future growth. Lastly, we are committed to returning capital to shareholders through regular buybacks and quarterly dividends. We anticipate allocating about 30% of cash flow from operations for share repurchases in 2024. Our Board of directors has approved an 11% increase in our regular dividend to $0.153 per quarter or $0.61 annually. Our dividends have increased at a compounded growth rate of about 15% since we began payments in the first quarter of 2017. With these activities planned, we intend to distribute 50% of our operating cash flow to shareholders this year. In closing, I am confident that the direction BK is setting will enhance focus, speed, and accountability within the organization, positioning us to foster long-term shareholder value. Now, let me turn the call back over to Roger.

Thank you, Mike. We’d now like to open the call for your questions. Michelle, would you please provide the instructions?

Thank you. Our first question is from Puneet Jain with JPMorgan. Your line is open. Please go ahead.

Hey. Thanks for taking my question. Congrats, BK, for the new role, and Tiger, thank you so much for your thought leadership and all the discussions we’ve had over the last more than 12 years, actually.

Thank you.

So, I’d like to start with a question on the guidance, like looking at the guidance for Q1 and the full year, looking at the ranges, it doesn’t look like you expect a steep ramp from Q1 level for the rest of the year in terms of the absolute dollar number for revenue. So I know you mentioned that it will be a year of buildup. Can you double click on those comments, like will all those changes, like the simplification which all it seems like makes sense, could they have any impact on revenue? What do you expect, like for trends the rest of the year?

Yeah. So let me start with talking about the guide in totality. I’ll turn it over to BK if he wants to provide some additional color, right? So, as we think about the guide, yeah, you’re correct in the 2% to 3%. I want to give you a little more color on how we’re thinking about it. I think we took a prudent approach in creating that guide, right? What we did this year, we took a more detailed bottoms-up planning approach at a very granular level. The key change in our assumptions was really regarding the macro. We assumed no improvement from the second half of 2023 with regards to the macro. Now, that being said, we have some good tailwinds coming into the year at the 26% growth in bookings. Remembering that growth in bookings comes in over a three-year to five-year period. Unfortunately, that is netted against the weak macro that we have seen, notably hitting us in small deals. So, as we extrapolate what we’ve seen in the second half of 2023, we’re not predicting any recovery in the guide, right? That’s also netted against the typical productivity and changes in scope that have been factored into our guide. With that said, a better macro and execution, we can do better. And as far as your other comment with regard to, I believe you’re asking about the cadence of the revenue earning in, we gave some general guidance in my comments that will be more skewed towards the second half than the first half of the year. And what we’re committed to do, we’ve given you a first quarter guide. We’ll continue to do that on a quarterly basis as we move through the year. If you want to add anything, BK?

Well, you said it very well. Puneet, thanks so much. And I think you mentioned macro and execution, Mike. And I would say, look, macro, we don’t control. We will deal as we progress. Execution, we do. And the simplification comment that you made, Puneet, as we execute, I do see more potential, but for now, we are wanting to stick to this guidance and we’ll provide you more color as we progress.

Got it. No, that’s helpful and fair. And can you also share your thoughts on Genpact’s long-term guidance that was issued a few years, I think. The prior goal was to hit double-digit topline growth over the medium-term. Is that still doable beyond this year?

Let me take that. And look, I think, how I’ll think about that is following, Puneet. My clear mission is to have Genpact achieve its full potential. And in that full potential, do we believe that we can grow at market or above market? The answer is yes. And it needs improvement in our execution and that is what I am focused on. And as we improve execution, we can certainly come back to overall steer of growing at or above market rates. Am I, if you’re specifically asking, is 2026 we are holding to? I think we are in the early stages of my innings here, and as we progress, we will update you more on that. Got it.

Got it. Thank you and all the best.

Thank you.

Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Keith Bachman with BMO. Your line is open. Please go ahead.

Hi. Thank you very much. I had a couple. You’ve mentioned a few times during your prepared remarks about improving execution. And I’m just trying to understand, I don’t want to steal thunder from any future conversations or presentations. But what type of things do you think need improvement in terms of execution that might translate to better growth?

Great question, Keith. How I think about that is, how do we strengthen our foundation? We have a very high-quality foundation, foundation of domain and data, foundation of trusted client relationships, foundation of global talent. And when I speak about execution, it is how we strengthen and work with it further. So take an example of clients. We are wanting to change our conversation, and we are changing the conversation as we speak to include Data and technology in making the conversation more holistic and making our solution far more holistic. Or if you think from our competency of Data and domain, how do we bring in solutions of partners, and that’s where we are investing in, so that again, we are more focused on growth-oriented solutions and front-to-back solutions for our clients. This is what I mean by execution. Simplification is an integral part of it, and we are driving quick changes as I come into this chair, and that is my thesis — it will improve our agility and accountability, and I’m seeing early results of that. That’s what I mean by execution.

Okay. My follow-up question is how you view the possibility of expanding existing fill sets or entering new market opportunities through M&A. You mentioned allocating 50% of free cash flow to capital projects. How are you approaching changes in strategy regarding M&A, or is it likely to remain consistent? Thank you, that’s all from me.

Thank you. Thank you, Keith. Look, I think, how I’ll think about it is the following. M&A continues to be a key strategic lever for us. It always has and it would be. And as I think of M&A and I want to connect it back to execution, I think we have done reasonably well in finding assets. Can we improve our execution in integrating the assets is the other attribute of execution? But is M&A integral part of our strategy? The answer is yes, yes, yes. And we will continue to be disciplined from an ROIC standpoint and as we execute more. But we will update you as we go along, Keith. Mike?

May I add to that? Our number one thing that we’re looking for is in addition to the financial discipline and everything else BK just alluded to is how we’re building additional capabilities for the organization and organically. So to the extent those capabilities, gen AI related or AI related, come about, you will be deploying capital there to build upon that and build a franchise.

Okay. Many thanks, gentlemen.

Thank you. And one moment as we move on to our next question. And it looks like our next question is going to come from the line of Maggie Nolan with William Blair. Your line is open. Please go ahead.

Hi. Thank you. Can you elaborate on the simplification of the go-to-market strategy and what you hope the outcomes of this are for the business?

Sure, Maggie. So, clearly, I think, as organically you build the organization, you somehow start orienting yourselves to various dimensions, and that is what happened with us as well. And me coming in from inside really understood from the client perspective, as well as from our internal teams as to how we can increase the agility and accountability. So from multiple metrics to organization, what we have done in the last 60 days is oriented ourselves to 12 business units that mirror client organization. When I say that, so take an example of orienting with consumer goods and retail companies or orienting with — we always had, but we had other dimensions, and I think we clarified it for the organization, and oriented everybody to be in the service of clients as we build the capabilities and as we build Data or AI capabilities. And similar simplification exercises we will report back, but this is what I mean by simplification what you specifically asked.

Yeah. I think I’ll just quickly add on to that. Ultimately, what we’re hoping for with all that is speed and clarity to be able to move quicker and quite frankly, grow our revenue at a faster pace. The opportunities are out there.

Thank you. That’s helpful. And then specifically on the DTAI segment, did something change between 3Q and 4Q that allowed you to grow sequentially? And then how should we think about any potential change in the context of 2024 and how you incorporated that into the guidance?

Yeah. So let me quickly talk about the sequential movement in DO from 3Q to 4Q. We had the impact of the new deals we talked about. They ramped as expected. They actually ramped even a little bit better. That was offset by higher productivity and change in scope on existing work, which is typical within our historical average, right? As we move into our first quarter guide, we still have the positive impact of those new large deals. Now quarter three as they continue to move through on a year-over-year basis. However, when you look at the vintage or the historical vintage of existing contracts, we have higher deal related productivity on those existing contracts, which is typical in terms of the timing, which pulls down some of that growth, as well as with the absence of the second half of 2023, we just had large — fewer large deals flowing in, which is going to affect us in the first half of the year. They’re lumpy in nature. As well as DTI, it just has a seasonal low in the first quarter.

Okay. Got it. And congrats, BK, and thank you, Tiger.

Thank you, Maggie.

Thank you, Maggie.

Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Ashwin Shirvaikar with Citigroup. Your line is open. Please go ahead.

Hey. Thanks. Congratulations, BK and Tiger, on the formalization of the changes that you guys announced last quarter.

Thank you.

Maybe I can start with asking a question on margins. Normally, we do see sort of year-over-year margin improvement. You’re kind of holding the line on that. Is that a very specific signal with regards to wanting to invest for growth? And then the part two of the margin question is, you’re starting out with 16%. What’s driving in 1Q, what’s driving that and what kind of margin cadence should we then expect to see?

So I’ll start off and I’ll talk to you. I’ll turn it over to BK at the end of it. So it will expand at a normal cadence throughout the year based on the historical patterns, right? So it will expand also as we have the revenue that will earn in on the growth that we have in the business as we’re projecting. But yeah, you’re right. We’re holding our dollar fixed costs relatively constant. And what we’re doing with those additional monies is we’re putting it into the business quite notably in terms of investments that are staged throughout the year.

And what I’ll add, Ashwin, and thanks so much for your comments earlier. Yes, we are investing to grow. And we always have. Are we infusing more? The answer is yes. But as we go along, we will inform more about — as I understand, as I listen from clients, I will inform you more about our thesis. But clearly, we are wanting to invest to make sure that growth stacks up at or above market rates.

And BK, that’s sort of where I wanted to go with my next question. You mentioned that you have on your schedule meeting 100 plus clients in the first 100 days. That period obviously started already. You’ve met a number of clients. Could you share maybe some granularity, what sorts of commentary you are getting back from the clients with regards to your capabilities where you might need to incrementally invest and perhaps even thoughts on M&A?

Great question again. So look, I’ll say three comments, Ashwin. Point number one, more broadly, clients still are seeing the uncertain environment, and that’s what you see in our macro comments that Mike alluded to. Point number one. Point number two, very quickly, every conversation certainly has a componentry of Data and AI, which wasn’t the case just six months ago, eight months ago. And therefore, a lot of conversation is about transforming them, front-to-back transformation, and thinking about, hey, how do we generate value, not just in a particular function, but across the board in the sectors we operate in? And I think we have demonstrated to them in many number of ways. You take an example of a recent press release that we did for Advantage Solutions, where we announced a partnership with Advantage Solutions, a leading provider of sales and marketing services in the consumer goods space. And we are delivering to our front-to-back solution along with Salesforce, our AI-led decisioning process for them and it is one of the larger deals that we announced recently. So conversations like these are taking shape in a more significant way. And like Mike earlier alluded to, we are constantly looking in our pipeline from an M&A standpoint to purchase our capabilities while staying disciplined on the various pieces of M&A, as well as integrating them. But really exciting time for us. We believe we are ahead in the AI conversations and really feel excited about our capabilities and the ones that we are going to build.

Thank you. All the best.

Thank you.

Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Bryan Bergin with TD Cowen. Your line is open. Please go ahead.

Hi. Thank you, and Tiger and BK, congrats again. My first question, BK, I appreciate the details you shared here on the sales simplification and the DTA leadership consolidation. Those really seem to center more on driving consistent growth execution. So I wanted to ask you about your view on the cost side of the equation. I understand you’ve got growth investments you’re going to lean into here. But are there any structural changes in the organization you may also be considering to improve profitability?

Thanks, Bryan. So look, I think, I’ll answer that in two parts, and Mike, feel free to chime in. Point number one, are we constantly focused on improving profitability? The answer is yes, yes, yes. You see that in 2023, and you see that consistently over the last five years, six years, seven years, year-on-year, and you see the cadence improving. So we have acute focus on improving profitability while clearly investing to grow and ramping our topline growth. Point number one. Point number two, as we go through the cycle, we will constantly evaluate how to invest our dollars. And also, at least for this year, we are thinking if we are able to grow better, we want to stay in the range so that we are investing to grow.

Yeah. I’m going to parse into the two things, right? BK hit it really well when you talk about what we’re trying to do in the 2024 guide about reinvesting in our business. But one of BK’s mantras in the organization is, we are an AI first company, right? So what does that mean? He is pushing every functional area, my own included in finance, on how we can adopt AI solutions embedded in our own organization that will drive cost efficiencies, as well as production efficiencies, and we can be our own test cases for that. So I can foresee ourselves in the future years being able to leverage that from a productivity and cost perspective. But for 2024, we’re going to take all of those efficiencies that we’re having, and we’re just at the beginning of many of them, and we’re looking to plow a lot of them into it and we have a laundry list of investments to execute on, all really supporting our capabilities that will ultimately result in an increased level of sales.

Okay. That’s clear. Thank you. And then my follow-up is just on large client performance. So are there any large client ramp downs that are weighing here as you enter 2024? We know you had the High Tech client last year. Just curious if there’s any further reductions like that this year as you enter the year that may be offsetting the ramp of new bookings?

No. Nothing more than the typical cadence that we have on that. So nothing to call out. We look at it, it’s all within the same historical average. So there’s nothing like we had last year or nothing pending that we’re aware of. So we’re not planning for any of that.

Okay. Thank you.

Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Sean Kennedy with Mizuho. Your line is open. Please go ahead.

Hi, everyone. Thank you for taking my question and congrats on a strong quarter. I was wondering how you see your client gen AI readiness and overall reception to it. Are there any specific barriers to overcome, and do you see a difference depending on the type of client and project? Thank you.

Thank you, Sean. So, overall, I’ll pass this into two parts. Is there a lot of excitement with every single client, which wasn’t the case six months ago? I’ll say the answer is a resounding yes. Every single client conversation before we provoke — and we are always the ones who are wanting to provoke, but they are wanting to have the conversation. So the doors are open is point number one. However, just take the example of Data. Data is not as structured that AI can result into outcomes that they expect in a good fashion. So all of that is helping us bring our Data capabilities, as well as our AI framework that we have. We have been into AI for the last seven years. Since the time we acquired RAGE Frameworks back in 2016, 2017 timeframes. So we have honed frameworks on AI. So that is really helping us with this turn on AI and that’s where I reported in my prepared remarks that we had 3,000 conversations. So many conversations are, we record every single conversation that we have as a disciplined company. But I also reported the numbers that have gone into production, but we do see increased velocity of that. We really feel good about that.

Great. Thanks for all the detail.

Thank you, Sean.

Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Spencer Lebov with Wedbush Securities. Your line is open. Please go ahead.

Hey. Thanks. It’s actually Moshe Katri from Wedbush. BK, welcome, and Tiger, good luck on whatever you’re planning to do next. So a question, BK, when you’re looking at your portfolio, are you happy with the client base, i.e., do you think that you need to prune some of those customers that are not really maybe worth the attention that you have and maybe that also could potentially at least temporarily impact topline growth for this year? That’s my first question.

Thank you, Spencer. So what we feel exceptionally good about is all of our clients. Not just Fortune 50, Fortune 100 clients that get named, but all of our clients. We are very disciplined in onboarding every single client. But we are very, very proud of all the client base that we have. And in their own right, they are iconic companies. So no, there isn’t any plan, Spencer, that you specifically asked.

Understood. And then the follow up is more about for the next six months, 12 months and kind of going back to Tiger’s commentary on win rates. So win rates had a pretty nice uptick. Maybe you can talk a bit about what drove that uptick and what do we need to do to kind of keep on moving that win rate number higher? It’s a pretty impressive kind of improvement on a year-over-year basis.

It’s a great question. I’ll say three specific things, Spencer. One is we are very, very proud of the win rate that we achieved. And there are a few reasons; Tiger also spoke about large deals, and we increased our focus on large deals. And that has helped us increase the win rate percentage in a significant fashion and we — this was in 2023, we had 14 large deals greater than $50 million. That is reflected in the 60% win rate that Tiger spoke about. Point number two, we are increasing our focus on Data and Tech, and that is making our solutions far more holistic. That is also helping us improve our win rate. And point number three, we are increasing our investment and focus on partners, and that is, again, will bring — you see some results. I already spoke about Salesforce. We also announced another press release just a couple of days back on Dropbox. We have ServiceNow and Genpact came together to streamline their procurement function. So partners is also helping us increase our win rates.

Understood. Thanks.

Thank you. One moment. Our next question comes from Surinder Thind with Jefferies LLC. Your line is open. Please go ahead.

Thank you. BK, as I think about the transformation journey that you’re about to kind of take Genpact on at this point, can you talk about how maybe structural it is and how you’re going to evaluate the change in terms of the key metrics and the timeframe that you’re thinking about? Is it just on the sales side or do you really have to kind of rethink about delivery here? And part of the question is also that given all of this conversation about generative AI, are clients asking for a lot more productivity commitments at this point as well?

There are many questions in your question, Surinder. So if I don’t answer any, you can call that out. But let me pass that. Today formally is my first day as CEO. So I think I would just say that, yes, I’ve been here for many, many years. So I understand our clients and Genpact exceptionally well. So therefore, speed is of essence. Having said that, point number one, what we are talking about is front-to-back transformation for us as well, not just for our clients. If you would note that this morning we announced the Chief Technology and Transformation Officer for the first time in Genpact history, and that particular role is to transform Genpact's internal processes with AI-first lens that Mike was earlier alluding to. So it is not just at the front end of the business, but also our own middle office, back office, and how 127,000 of us interact with one another, as well as with clients. And I think we are looking at specific, I also do not want to launch 55 initiatives, just want to stay focused on execution and discipline. And as we progress, there are Stage 1 and Stage 2 initiatives that we are together coming on as the management team and committing to it, and there will be specific lead indicators that we will have internally, and at an appropriate time, we will expose it to all of you.

That is helpful. And then I guess just on the last part of this and related to the commentary earlier about the conversations of the clients focused on the Data component, the AI component. How does that impact maybe the productivity commitments that they are looking for? And then additionally, let us say that there are deals that you signed a year ago before there was all of this excitement about some of these new offerings. Do clients also revisit some of that? Is that what is maybe causing a slower ramp or do clients have an opportunity to revisit maybe what they had wanted six months ago in light of how fast technology and processes and things are changing? How do we think about that dynamic?

So I missed answering that question. Thanks for reminding me. So I’ll answer that in two parts, Surinder. One, there is — we’ve been, AI as a conversation for us, as I mentioned just a while ago, is not new for us. Yes, it is new for clients, but we were always baking all of that in our solutions, and we are now — our pipe has opened up a lot more for having those conversations. Short answer to the question that you are asking, is there more productivity therefore? No, we are not seeing that, because I think we’ve been in a fairly competitive place and competitive market and I think we are leaning in upfront in our contracts that we are demonstrating to clients. And there isn’t a new conversation opening up with clients that, hey, now gen AI has come in, because we’ve been demonstrating them that in our solutions, and I think we are building actually more holistic solutions, including Data. That is, as I mentioned, opening up newer conversations for us. Short answer, Surinder, no, we are not seeing any different productivity curve, and if at all, at any point it happens, we will authentically share with all of you.

Thank you.

Thank you. I’m showing no further questions and I would like to turn the conference back over to Roger Sachs for closing remarks.

Thank you everybody for joining us today and we look forward to speaking with you again next quarter.

This concludes today’s conference call. Thank you for participating. You may now disconnect.