CVG
#<UNK>, it's <UNK>.
Good morning.
I think we feel very, very good about the breadth of offerings that we have.
<UNK>a has just spoken about channels but also across the various geos.
So we can basically handle for our clients any call-type they want us to handle in any geo and across all these various channels.
We continue to think that the value proposition for offshoring is compelling and strong and certainly, as channels shift more and more to digital, that helps support even more the growth offshore.
That said, we also feel strong that we have one of the longest largest onshore footprints in the industry and ability to basically handle volumes for our clients wherever they want them handled.
That's what they're looking for from us.
And, <UNK>, also to add to that, we also do see growth in our clients that are non US-based.
And we see that growth across some of our European clients, et cetera, and are feeling good about that.
Interestingly enough, we talked a lot about the communications vertical in the past and we're actually beginning to see some stabilization outside our two large clients in that vertical and some return to growth in some of our European opportunities in that space.
So as it relates to kind of in-country different client base other than our US, we're also seeing ---+ I'm encouraged by what I see in that team's pipeline.
Sure.
Sure.
We have been making investments, significant ones and in a vertical structure ---+ vertically aligned structure with presidents of each vertical and dedicated resources from a marketing and go-to-market perspective around the verticals for the last year or so.
And so I believe we're starting to see that pay off.
And you see that, Dave, in our new business signings and you do see it in the breadth of the verticals represented.
We're getting better at tailoring our offerings to these various verticals and making our broad capabilities very specific and relevant to their vertical needs.
And so that's playing out and we had a record year of deal signings overall.
And in each of those quarters, we saw deal signings across all of those other verticals.
So I feel good as we drive to stabilize in the communication space and particularly these two large clients that, behind the scenes, we've been gaining consistent traction in growing our other verticals at or above market.
And that's part of our long-term investment approach and overall strategy to return to an organic growth basis in the business while we pursue inorganic as well where it makes sense to diversify the client base and add capabilities, for instance, by geo or in the digital realm that help enhance our service offerings.
So I think what you're seeing and we're seeing play out ---+ certainly the just getting tighter and better through those resourcing investments and a structural change that has us have instead of one chief commercial officer that covers every vertical in a generic way, four presidents that line up around each of those verticals specifically and can really customize our breadth and depth of offerings and make them relevant and sell them better, frankly, to our clients to help solve their needs and issues.
And as we talked about, the other vertical ---+ that's where we've been talking about the strong demand we've seen over time for healthcare and retail.
Mostly nearly 75% of the growth you see in the quarter in that vertical is organic.
So, yes, there's some contribution from buw but the vast majority is organic.
In financial services ---+ again, strong demand there.
And about half of that growth is organic and the other half is coming from acquisitions.
That's exactly right and you heard that in our remarks.
We're masking with those two large relationships.
In one case, it's something that I would describe as episodic.
The one where we're talking about a need for return that we just simply can't chase or won't chase because I don't think it's a market-based pricing scenario.
The other is part of our business model ---+ working with our clients to make sure we can do the work in their shore of choice is part of our business model.
But no question, we're growing around those things and I feel very good about the returns on the business we're signing, the breadth of the type of opportunities that were signing, the complexity of the work moving up that complexity chain.
We're seeing that investment thesis and strategy and value prop play out in the deal signings in those other verticals.
Maybe we were not clear enough about that.
We largely have paid that down and drawn on the AR securitization.
So as we expanded that, we were able to make the pay down of $115 million, I believe, on the term loan.
We think that's advantageous.
The borrowing costs are lower there by roughly 100 basis points when you're all said and done.
But not quite as big an impact as you just suggested.
That's right.
There will be no required payments in 2017.
We've looked ---+ we've made a couple discretionary contributions back in ---+ a couple of years ago as mentioned and here in this quarter.
And we'll look to do that over time.
But there's no requirement to do that.
Thanks.
No.
Not really.
We are still seeing demand and in those signings, <UNK>, would be a great example.
In those quarterly signings numbers, that represented demand for each of our geos in that signing number.
So we haven't yet seen anything that I would say is a trend impacting our business.
Now episodically, as you well understand, even in a given client relationship across multiple programs, we can have something being moved to the US and something at the same time on another program being moved to a near shore or offshore location.
So we constantly have shore migration choices being made based on client programs, needs, cost structures.
But I am not seeing yet anything that would be a trend toward not having offshore or near shore choices in our client's mix of solutions.
So, <UNK>, it's <UNK>.
I would say that we still view the market as a slow grower ---+ think low single digits ---+ 3% or so.
That's what the prognosticators have.
As you look at our guidance for next year and you strip out the impact of the acquisition and the impact of the two large clients, even after that we're guiding to relatively flat.
So we are still a little bit sub market.
But I think over time the investments we're making in the other verticals in the go-to-market structure, et cetera, will help us out there.
<UNK>, I haven't given a whole lot of thought to that.
The other segment represents roughly 20% of revenue or so.
There's no individual vertical there that is as large as the financial services vertical.
And so don't really have a timeline for when we would break that out in any more depth.
Clearly the largest two pieces there would be retail and healthcare.
And, again, those are both smaller than the financial services vertical for us.
It's a fairly unique situation in that case with that client where on a certain call type, <UNK>, we had a significant, significant share of that call type.
Because when they needed us to handle that volume, we had the size and scale to do it and to ramp up quickly and do it.
The expectation was over time, they would look to diversify.
We're talking about something close to 100% share here.
They diversified it across a couple of providers.
We still have the work.
We still do it well but we have, what I would call, a more normal share baked into our outlook for 2017.
The movement to that more normal share is a piece of the revenue change we're seeing with that client.
It is the smaller piece of the moment.
The bigger piece is us walking away from an opportunity to do work at sub-market pricing.
All right.
Well with that, thank you all for joining us for the call and have a good day.
