A：To meet the increased demand for AI expertise, the company is focusing on keeping up with the demand by rebalancing priorities in real time, ensuring the right resources are available in the right markets and vertical expertise. Additionally, they are experiencing increased financial pressure on clients, which has led to a demand for automation solutions and a need to prioritize spend, causing overall reduced spend. This dynamic has introduced an additional 2% headwind into the third quarter.

A：The current competitive market has prompted the company to ensure strong economic returns on their business. They offer solutions that help clients reduce their total cost of delivery through right shoring and automation. As AI becomes more complex, clients are increasingly seeking partners that can deliver across the full ecosystem, which aligns with the company's strengths. This has led to winning more complex deals and demonstrating greater value to clients.

A：In the back half of the year, the company is focused on winning complex, high-value work with technology-led solutions that solve real business problems, as well as running efficiently to invest in new areas of growth while improving profit margins.

A：The company's investments in the second quarter resulted in growth that slightly below guidance at 0.6% in constant currency terms, within the nearly 2% guidance range. They experienced strong growth in areas less impacted by offshoring, such as banking, financial services, and AI solutions, while consumer electronics and media were negatively affected. The non-GAAP operating income was $292 million, and the non-GAAP operating income margin was 11.9%, with adjusted EBITDA at $347 million and a margin of 14.1%. The margins improved from the first quarter.

A：For the third quarter, the company expects revenue between $2.465 to $2.490 billion with a foreign exchange impact, non-GAAP operating income between $295 to $305 million, non-GAAP EPS between $2.65 to $2.77 per share, and a non-GAAP effective tax rate of approximately 25%. For the full year 2026, the revenue is expected between $9.925 to $10.025 billion with a positive foreign exchange impact, and a revenue growth ranging from 0.25% to 1.5%. The non-GAAP operating income is expected between $1.200 to $1.230 billion, and the non-GAAP operating margin is between 12.1% to 12.3%. The non-GAAP earnings per share are expected between $10.83 to $11.18 per share for the full year.

A：The company expects to generate between $630 and $650 million in adjusted free cash flow for the year and to reduce its outstanding debt balance by over $550 million. Furthermore, they aim to bring net debt to below $3.3 billion and achieve a net leverage ratio of less than 2.6 times adjusted EBITDA by the end of fiscal 2026. In fiscal 2027, with continued cost structure evolution and growth in AI-enabled businesses, they expect adjusted free cash flow to be around $550 million, with net debt below $3.3 billion, roughly 2.2 times adjusted EBITDA.

A：Of the 2% headwind for the year, approximately 1% is attributed to genuine reduction in client volumes and budgets, and another 1% due to accelerated offshoring. The offshoring headwind is not solely related to automation of volumes, but also to clients deciding not to support certain customer bases, impacting profit and revenue. The profit impact is expected to be neutral once duplicate costs are absorbed, which typically takes about two to three quarters, while revenue may decline depending on the country of the offshore operation.

A：While the offshoring decisions don't eliminate the need for the company's services entirely, profit is expected to be helped once duplicate costs are offset, typically within two to three quarters. Revenue, however, may decline depending on the specific country where operations are moved offshore. The company has also observed clients rethinking their initial offshoring decisions, as some are beginning to question the wisdom of these moves.

A：The company does not view the offshoring-related challenges as a de facto change in their operational strategy. They expect the headwind to be more moderate in the future as they anticipate a reduced offshoring rate due to budget adjustments. Although the guidance for an inflection in performance was anticipated later in the year, it may be delayed, the company's view on next year's performance remains centered around the expectations and trends currently observable in the business.

A：The revised offshoring expectation for the end of the year is around 11%, which is a reduction from the original projection of 13%. This lower offshoring rate is attributed to budgetary adjustments and is expected to lead to a more moderate increase in offshoring in 2027, as the company does not foresee all the work currently identified for offshoring will actually be moved offshore. This adjustment is significant as it changes the company's expectations for future performance and indicates that the acceleration in offshoring is primarily driven by budget adjustments.

A：The reduction in the full-year operating margin guide is primarily driven by revenue pull-down and duplicate costs associated with the movement of work offshore. The company's confidence in improving margins in Q3 and Q4 stems from restructuring actions, cost reduction related to the offshoring movement, higher-margin offshore delivery, technology solutions scaling, and revenue growth from those solutions.

A：The company reports that revenue per non-billable headcount grew 14%, but does not provide a quantified breakdown of revenue between billable and non-billable headcount categories.

A：The deployment of AI tools internally in Q2 allowed for a reduction in the non-probability of headcount, with revenue per non-billable headcount growing 14%. This indicates that the headcount with billable people tends to be more linear due to the increased efficiency and automation efforts.

A：The company believes that outsourcing and offshoring will accelerate slightly more than the previously estimated 3%, but it does not expect a significant movement of clients away from supporting their customer bases. The offshoring is expected to continue at a rate of 1.5% to 2.5% growth the following year, with most clients either having public pledges to keep work in-market or regulated requirements that prevent offshoring without legal changes.

A：The company is investing in the IX suite by deploying engineers, subject matter expertise, and partner technology to offset general marketplace headwinds. While there has been some initial decrease in revenue, the company projects that by the end of 2025, it will be profitable on its AI investments and continue to drive accretive returns to the overall business.

A：The company believes there are still opportunities for margin expansion due to the momentum in partner and proprietary technology, and the reduction in duplicate costs from moving work offshore. They expect to see margin appreciation and operational leverage as they build up tech installation and deployment talent. For free cash flow, the company is confident in its ability to increase it again next year and plans to use it to continue paying down debt.

A：The IX Suite bookings are entirely incremental revenue for the company since it has never had a product like this before. The revenue from the IX suite is not merely replacing legacy revenue but is contributing to higher growth across the customer set. Presently, 11% of the company's revenue is influenced by the IX suite.

A：The company did not observe much consolidation in Q2 and does not expect it in Q3. However, they anticipate seeing more consolidation near the end of the year in consumer electronics, social media, and telecom sectors, which traditionally consolidate after holiday seasons. This is expected to provide additional market share opportunities.

A：The total spending for the restructuring program will be $175 million, with $45 million expected in Q3 and an additional $30 million in Q4. The restructuring is expected to be fully completed by the end of the year. The free cash flow guidance provided is after these restructuring expenses.