WNS (Holdings) Limited (WNS) Q2 2024 Earnings Call
WNS (Holdings) Limited (NYSE:WNS) Q2 2024 Earnings Call Transcript October 19, 2023 8:00 AM ET
Company Participants
David Mackey - Executive Vice President, Finance, Head of Investor Relations
Keshav Murugesh - Chief Executive Officer
Sanjay Puria - Chief Financial Officer
Conference Call Participants
Bryan Bergin - TD Cowen
Mayank Tandon - Needham
Ashwin Shirvaikar - Citi
Maggie Nolan - William Blair
Nate Svensson - Deutsche Bank
Puneet Jain - JP Morgan
Moshe Katri - Wedbush
Surinder Thind - Jefferies
Vincent Colicchio - Barrington Research
Operator
Good morning, ladies and gentlemen. And welcome to the WNS Holdings Fiscal 2024 Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After management's prepared remarks, we will conduct a question-and-answer session and instructions for how to ask a question will follow at that time. As a reminder, this call is being recorded for replay purposes.
Now, I would like to turn the call over to David Mackey, WNS' Executive Vice President of Finance and Head of Investor Relations. David?
David Mackey
Thank you. And welcome to our fiscal 2024 second quarter earnings call. With me today on the call, I have WNS' CEO, Keshav Murugesh, and WNS' CFO, Sanjay Puria. A press release detailing our financial results was issued earlier today. This release is also available on the Investor Relations section of our website at www.wns.com.
Today's remarks will focus on the results for the fiscal second quarter ended September 30, 2023. Some of the matters that will be discussed on today's call are forward-looking. Please keep in mind that these forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially, from those expressed or implied by such statements. Such risks and uncertainties include but are not limited to those factors set forth in the company's Form 20-F. This document is also available on the company's website.
During today's call management will reference certain non-GAAP financial measures, which we believe provide useful information for investors. Reconciliations of these non-GAAP financial measures to GAAP results can be found in the press release issued earlier today. Some of the non-GAAP financial measures management will discuss are defined as follows: net revenue is defined as revenue less repair payments; adjusted operating margin is defined as operating margin, excluding amortization of intangible assets, share-based compensation, acquisition-related expenses or benefits and goodwill impairment; adjusted net income or ANI is defined as profit excluding amortization of intangible assets, share-based compensation, acquisition related expenses or benefits, goodwill impairment and all associated taxes. These terms will be used throughout the call.
I would now like to turn the call over to WNS's CEO, Keshav Murugesh. Keshav?
Keshav Murugesh
Thank you, David. Good morning, everyone. In the second quarter, WNS delivered healthy financial results in the face of a challenging macro environment and continues to make progress on our AI and generative AI initiatives.
The company posted Q2 net revenue of $325 million, representing a year-over-year increase of 12.3% on a reported basis and 11% constant currency. Sequentially, net revenue increased by 2.4% on a reported basis and 2.1% on a constant currency basis after adjusting for FX.
In the quarter, WNS added seven new logos and expanded 27 existing relationships. The company also posted adjusted operating margins of more than 22% and delivered year-over-year growth in adjusted EPS of 16%. While second quarter results were solid, we do expect increasing revenue pressure in the second-half of fiscal 2024 driven by further reductions in volume commitments from certain clients, slowing demand for project-based work and delays in the ramp of our large insurance captive.
Overall Q2 volumes remained fairly resilient. However, we did see some erosion in September, and have received additional reductions in volume commitments for Q3 and Q4 from certain clients. These reductions are most evident in the travel vertical and are driven by both macro trends and some client-specific dynamics. We've also seen a modest deterioration in demand for certain types of projects. This is impacting our Analytics and Procurement businesses, including a deceleration in growth for our newly acquired entities.
Additionally, second-half visibility has also been reduced, to reflect client delays in the ramp of our large insurance carve out. This revenue, which is contractually committed over the life of the contract is now expected to show meaningful ramps in both 2025 and fiscal 2026. Despite these short-term macro challenges, demand for our services remain strong and the demand to long-term outlook is excellent.
Our new business pipeline continues to be extremely healthy, driven by clients' need to digitize and automate their processes, as well as reduced cost. The pipeline now includes more large deal opportunities than ever which are spread across verticals, services, as well as geographies. We also continue to see solid deal flow and client decision making with both new client additions and existing client expansions remaining robust.
I would also like to reiterate that the pressure we are facing is entirely related to macro challenges and client-specific issues and not impacts from AI, or generative AI. We currently anticipate that the outsized revenue headwinds of 18% that we are facing in fiscal 2024, including the ramp down of a large healthcare process, the transition of a top procurement client from onsite to offshore and slowdowns in both volume and discretionary projects should present an accelerated growth opportunities for WNS in fiscal 2025.
I would now like to provide you with an update on our progress with AI as well as generative AI. First, let me begin by saying that we have seen nothing to date, which changes our belief that AI and Gen AI are tools that are most impactful, when integrated as part of a broader end-to-end digital solution. Every use case WNS is developing requires deep domain expertise, process knowledge, analytics capabilities and human intelligence to leverage these technologies and deliver business outcomes.
In addition, co-creation remains foundational to how we collaborate with our clients to identify opportunities, build and then deploy these solutions. Since last quarter, we have formalized strategic partnerships with industry leaders, including Microsoft, Azure, Open AI, AWS and Google. And are working closely with other partners like Ampion, Imagia, BlackLine and Nice, who are building Gen AI into their products. We have also rolled out company-wide AI and Gen AI training programs, which today include 25 unique courses across four tracks designed to promote awareness, evangelism, expertise and leadership.
WNS is partnered with industry leaders such as Google, Mind Map Consulting, KPMG, LinkedIn Learning and Oxford University to create these programs. As a result of our focused efforts, we have now expanded the number of use cases to more than 90 with approximately 20 currently built and ready for deployment and an additional seven of our proprietary digital assets which now have Gen AI embedded.
Our active client conversations have doubled to more than 40 with over 10 of these in advanced discussions and three already committed to Gen AI implementation with us. And while we continue to make solid progress across the pipeline of activities, it is important to note that we are seeing many clients wanting to proceed carefully on Gen AI initiatives as they move towards the implementation phase. This is the result of a wide range of issues and risks, including build and run cost, data privacy concerns, legal and regulatory issues and the inherent potential for poor data quality and false results.
With that being said, we now have two examples of in production solutions, we would like -- which we would like to share with you today. In August, The Smart Cube launch a new release of Amplify Pro, the company's on demand digital Procurement Intelligence platform. The latest version is powered by Gen AI and a custom natural language Query Framework to provide enhanced search capabilities, expanded category coverage and improved user experience. The upgraded platform leverages GPT 3.5 models which have been specifically trained for procurement professionals based on proprietary content curated by The Smart Cube's category and commodity specialists. The model also provides traceability of answers to source data, an area where many current GPT models often fall short. The enhanced capabilities are currently being used by more than 80 clients who subscribe to Amplify Pros unlimited paid tier model. And clearly feedback in the early days has been extremely positive. We expect these new enhancements along with future upgrades to the platform will now help drive increases in paid subscription revenue.
In addition, WNS has also recently implemented a new recovery as a service solution for a large client in the insurance vertical. This proprietary offering combines AI models and a team of claims specialists with deep insurance expertise to identify and recover property claims costs which should have been paid by third parties. WNS has engineered, cleansed and structured the client's historical data, built and train the models, integrated them into the client's cloud technology environment and started delivering immediate results. This solution was identified by the WNS Digital Consulting team using our co-creation approach and represents a completely new offering for the industry -- for the insurance industry and our clients.
Claims recoveries are a key area of focus for our P&C insurance clients and the WNS solution is able to meaningfully reduce cost leakage when compared to current approaches. The offering has been priced in an outcome based model where WNS receives a percentage of the amounts recovered for the client. This results oriented approach ensures that we're rewarded for performance and that both WNS and the client share in the value delivered.
In summary, while the macroeconomic environment is creating some challenges for WNS in the back half of this year. The company continues to expect double-digit revenue growth and industry leading stable margins. We also remain optimistic that the company's healthy pipeline strong underlying business momentum and reducing headwinds sets the company up for accelerated growth in fiscal 2025.
In addition, we have seen nothing that changes our belief that AI and Gen AI represent more opportunity than risk for our business. By actively embracing this technology shift, WNS remains well positioned to deliver meaningful business outcomes and help our clients create value.
I would now like to turn the call over to our CFO, Sanjay Puria to further discuss our results as well as the outlook. Sanjay?
Sanjay Puria
Thank you. Keshav. In the fiscal second quarter, WNS net revenue came in at $325 million, up 12.3% from $289.3 million posted in the same quarter of last year and up 11% on a constant currency basis. Sequentially, net revenue increased by 2.4% on a reported basis and 2.1% on a constant currency basis.
Our sequential revenue growth was driven by broad-based momentum with both new and existing client and favorable currency movement. This benefit was partially offset by volume reductions with certain client, primarily in travel. In the second quarter, WNS recorded $0.5 million of high margin short-term revenue. Adjusted operating margin in quarter two was 22.4% as compared to 20.6% reported in the same quarter of fiscal 2023 and 21% last quarter. Year-over-year adjusted operating margin improvement was a result of operating leverage on higher volumes, improved productivity, lower SG&A expenses, driven by provision reversals for performance incentives and bad debt and favorable currency movements. These benefits more than offset headwinds from annual wage increases, and increased return to office costs. Sequentially, margins increase as a result of higher volumes, improved productivity and lower SG&A costs. This benefit was partially offset by wage increases and higher return to office costs.
The company net other income expense was $3.6 million of net expense in the second quarter as compared to $0.7 million of net expense reported in quarter two of fiscal 2023 and $2 million of net expense last quarter. Year-over-year net interest expense increased due to higher debt level and lower cash balances driven by our acquisition and share repurchases. Sequentially, the unfavorable variance was a result of higher debt levels and lower average cash balances and $0.8 million of interest income on tax refunds received in quarter one.
In quarter two , the company also reverse $21.9 million provision for contingent consideration relating to our acquisition of Vuram. The reversal is based on current growth expectations, which remain healthy but below targeted level. This benefits has been excluded from our existing net income. WNS effective tax rate for quarter two came in at 22%, up from 19.8% last year and up from 21.8% last quarter. Both year-over-year and sequentially, changes in our effective tax rate are largely the result of shifts in our geographical profit mix and changes to the mix of what delivered from tax incentive facilities.
The company's existing net income for quarter two was $54.1 million compared with $47.2 million in the same quarter of fiscal 2023 and $50.6 million last quarter. Adjusted diluted earnings were $1.09 per share in quarter two, up 16% versus 19% in the second quarter of last year and up 8% from $1.01 last quarter. As of September 30 2023, WNS balances in cash and investments total $248.1 million and the company had $164.1 million in debt. In quarter two, WNS generated $68.5 million of cash from operating activities, incurred $15.7 million in capital expenditures and made debt repayments of $38 million.
DSO in the second quarter came in at 35 days as compared to 30 days reported in quarter two of last year and 34 days last quarter. In September, at our Annual General Meeting WNS shareholders approved a 3.3 million share repurchase proposal. Our Board of Director had also approved a new repurchase program and the company expects to begin buying back shares during fiscal quarter three. With respect to our key operating metrics, total headcount at the end of quarter was 59,873 and our attrition rate in the second quarter was 30% as compared to 41% reported in quarter two of last year and 32% in the previous quarter. We expect accretion to average mid 30%, but the rate could remain volatile quarter-to-quarter in the current labor environment.
Build seat capacity at the end of the quarter two increase to 39,775 and WNS continued our progress towards in-person operations averaging 69% work from office during the quarter. In our press release issued earlier today, WNS provided our revised full-year guidance for fiscal 2024. Based on the company's current visibility levels, we expect net revenue to be in the range of $1,254 million to $1,300 million representing year-over-year growth of 8% to 12% on both reported and constant currency basis.
Topline projection assumes an average British pound to US dollars exchange rate of 1.23% for the remainder of the fiscal year. And we currently have 97% visibility to the mid-point of the range. As Keshav mentioned, our revised revenue guidance includes additional headwinds from reduced volume projection from certain client, lower project revenue expectations, and delays in the ramp of our non-insurance captive. As was the case last quarter, it is important to note that some of the volume reductions are based on client commitments which could prove to be conservative, based on the forecasting process. We have incorporated this lower estimate into our guidance consistent with the company's visibility based approach.
Full year adjusted net income for fiscal 2024 is expected to be in the range of $201 million to $211 million based on an INR83 to US dollar exchange rate for the remainder of fiscal 2024. This implies adjusted EPS of $4.04 to $4.24, assuming a diluted share count of approximately $49.8 million shares. With respect to capital expenditures, WNS currently expects our requirement for fiscal 2024 to reach up to $60 million.
We'll now open the call for questions. Operator?
Question-and-Answer Session
Operator
Certainly. [Operator Instructions] And our first question coming from the line of Bryan Bergin with TD Cowen. Your line is open.
Bryan Bergin
Hi, thank you. Um, I wanted to start here with one around kind of client behavior. So I'm trying to understand what appears to be a hurry up and wait behavior from a lot of enterprises say you have clients with an urgency for cost reduction pipeline coming is all positive and we all see solid deal signings across the services sector associated with productivity and reductions, but then these ramps seem to move more slowly and maybe the insurance captive is a company-specific situation, but can you share your perspective on what seems to be causing this disconnect or there common threads that are not leading to more normal or faster ramps to effect to achieve faster cost savings across these clients?
David Mackey
Sure. Let me take that, Brian. And Keshav and Sanjay can chime in as well. But I think when you look at our business for this year, the topline engine is really working well, right? I mean we were -- as Sanjay mentioned in his prepared remarks, we're facing an 18% headwind in terms of lost revenues for this year, which is a combination of ramp downs in volume, project related issues, the productivity commitments that we give to clients, the fact that we've walked into the year with unusual headwinds from a large HealthCare client, from an Internet client moving work offshore. So these are all kind of headwinds to the business. The 10% that we have guided to at the midpoint is, it's actually shows a gross growth number of 28% for the year.
So we believe that when you look at deal signings, deal closures, deal flow, especially, as it relates to the cost reduction types of initiatives, we're not seeing slowdowns. I think the issue with the insurance captive is they completely separate one and it is highly company specific. And it's structural in nature based on priorities within the organization. But again with that initiative, the goal was to drive cost savings, right?
So I think we're not seeing significant delays in cost reduction-based activities, where we've seen the delays in most in the impact this guidance, versus last quarter is more on the volumes that are being pumped through the processes we own already and the discretionary projects or the shorter-term projects as they relate to the acquisitions that we've done in Procurement business.
Keshav Murugesh
And I just add to what Dave said. This client volume forecast, still we believe is conservative, because quarter two, what we have seen that those volumes in fact have not reduced. Only in September, very specific to some clients in travel what we saw some reduction but broadly in place. And this reduction is also to be just consistent with our visibility based, right? We dive now have 97% visibility, I guess 92% visibility last quarter, what we mentioned and still this does not include the short-term revenue where we don't have visibility. So, and this is also with a net of a growth of 1% what we saw in quarter two. So I think what the impact what Dave was trying to allude is definitely, very client-specific. And some conservatism in the client forecast.
Bryan Bergin
Okay. Just a quick follow-up on the 18%. What is kind of transitory within that gives you the confidence for the 25 recovery. And then just my follow-up as we think about the second-half headwinds on the topline that you talked about. Do you take an immediate reduction in 3Q and have the ability to build off of that, or should we think about the second-half the 3Q, 4Q being more level in revenue?
David Mackey
Sure. So let me step with that, Brian. I think when you look at the point if we don't make assumptions about volume and projects as we head into next year, right? If we assume that it's status quo, right? And obviously, we know that those numbers could get slightly better, could get slightly worse, but we're looking at least a 4% headwind to the business in that 18% that is transitory.
We typically see in a given year anywhere between the 10% and 11% headwind to our business, which is 3% to 4% on the productivity side. 1% to 2% on the project side. And then we typically have 4% to 5% of the business that are known ramp downs. The transitory stuff really relates to the large HealthCare process, which obviously is going to anniversary here in Q4 of this year. And having a large Internet based client that we do procurement work for that has transitioned the solution from onsite-centric software-centric.
So these are really kind of the two unusual ones. Obviously, the hope is that the volume stabilize or pick back up and that the project-based work starts to starts to settle in here as well, but the reality is in that ramped down we're looking at at least a 4% improvement on a year-over-year basis. On top of the fact that our insurance captive which Sanjay mentioned has committed revenues will have to ramp next year fiscal 2026 in order for them to meet their five-year commitment targets. So we feel pretty good about the opportunity as we head into next year, both in terms the abatement of the headwinds, as well as the acceleration in some of the things that are creating challenges right now. [Multiple Speakers] I'm sorry, continue.
Sanjay Puria
Yes, I was just talking about quarter three, Dave. So you're specific then definitely the quarter three, we believe and we expect that is going to be 3.5% to 4% lower as compared to quarter two. Right now it's impact 1% almost coming from an FX because quarter two was almost at 1.27 from a pound perspective and now what we assume is 1.23 for the balance half. As well as what Dave was talking about large Internet client from an off-shoring perspective that impacted quarter two as well as going to impact quarter three by that fees if we just complete it entire opportunity.
But it also gives us a lot of opportunity from a growth perspective because the client is intact, the relationship is there as well as we have renewed signed this contract for a much longer term, as well as it has to drive our margins. Also I just wanted to remind that quarter three is usually our Travel seasonality. And that impacts the quarter three revenue, but as we move forward, we believe that we should come back from quarter four onwards as compared to quarter three.
Keshav Murugesh
Yes, this is Keshav just want to add one last bit here and that is that first and foremost in terms of just the quality of discussions we're having with clients and prospects there at a level that we have not seen before. So I just wanted to give the confidence that there is a lot of activity taking place around both the transformation agenda as well as the cost saving agenda. And I think a lot of clients focus a lot on the transformation agenda earlier but are now doubling down on the cost saving agenda but while it's moving ahead I think the potential for some of it to accelerate sometime later is much higher. I think a lot of them are taking a conservative view because of the disruption involved in their kind of programs to do it. The second thing I want to mention is pricing has been extremely stable from our point of view. So I think that's a very, very good sign. And overall the large deal progress, the pipeline, the interaction with customers, the travel between customers and our people up and down across sites continuously there very strong.
And the conversations around all the new trends again continues to be strong. So I think it's a very unusual headwind that we're seeing in fiscal 2024 as Dave and Sanjay explained. And we are quite confident that 2025 will be quite different.
Bryan Bergin
Okay, that's great detail. Thank you very much.
David Mackey
Thanks, Bryan.
Operator
Thank you. And our next question coming from the line of Mayank Tandon with Needham. Your line is open.
Mayank Tandon
Thank you. Keshav, thank you for sharing those examples on the Gen VI opportunities. I wanted to focusing on that for a second, as you look to take advantage of the opportunities down the road. Do you have to overhaul your sales engine, you have to revamp it, you have to retool and re-skilled your workforce. What are the investments you have to make to truly be positioned to take advantage of the opportunities down the road?
Keshav Murugesh
Yes, that's an excellent question, Mayank. And I would say all of the above whatever spoke or asked about, I think what we're doing is really focusing on making sure that first of all, the capability engines inside the company are well taken care of and invested in like I spoke about in my prepared remarks. We are building relationships outside of WNS also beyond just the traditional partner network, but also with universities in the US, UK, and other places in order to just ensure that we have direct access to research as well as have our people interacting with the research there to be useful to our clients, that's the second.
The third is accelerated kind of learning programs that we are using with our sales people in order to bring them up to speed in terms of what we have inside, how we are changing some of those offerings and to actually have intelligent and penetrate conversations with our clients. I think the most wonderful thing that we're seeing as a result of these investments being made, the excitement being created as well as the fact that AI and Gen AI obviously, something that is top of the attention in all board rooms is that WNS sales people and leaders, across technology, across domains are actually having far better and more conversations with clients and prospects that than we have ever seen before, right?
So I just want to mention that we are investing in every one of those areas, but at the same time, we're also seeing the quality of conversations has increased, we recently had our advisor day in the US and we had the highest ever attendance of both clients as well as the advisors at that event, because clearly where we showcased a lot of examples of things that were being created at WNS. And we have clients actually talk about how they were impacted by some of these ideas.
Mayank Tandon
Got it. Very helpful. And then I have to ask you a follow-up on that. What do you see in terms of the impact on the model, when do we actually see the effects on revenue or margins or for that matter also want to get a sense of the size and scope of these engagements going to be larger or smaller as you think about it longer term. Just from a financial standpoint how should we view it?
Keshav Murugesh
Yes, I think I'll take a stab at that first and then have Dave and Sanjay talk a little more on the financial models. But I think right now some of these topics are front and center and receiving a lot of attention at the top of the house. I think most clients at this point in time as the hype is settling down to more business oriented kind of discussions, I'm just getting much more comfortable with who are the partners that can actually help them navigate some of these new technologies and whom they can trust, who understand their businesses, first and foremost, their business domains and who can help them take them through the changes, right? And I think in that journey, WNS has made all the investments, is having lots of conversations, is building a lot of confidence with our clients, that we are the right partner to work with for the long-term, that is one.
At the same time we are also seeing that a few clients are wanting to post the early conversations, willing to actually take the risk of dipping their toes and in the model and actually taking -- adding on more disruption to what they're already seeing from a macro point of view or from their own business point of view. So we gave examples of a few clients and where this is already being experimented with. But my own commitment with my internal teams is to start pushing for more commitments from clients during this year somewhere along this fiscal but driving much more of it next year.
So I would expect that this whole year will be all about building commitments, getting clients to actually get comfortable and then over a period of time as they get more comfortable about willing to add on more disruption to their models vote with their feet, so to speak, in terms of get -- getting on board with some of these models. And the clients who are experimenting are already seeing the change in productivity, the kind of impact that we are able to give them even those minor processes in terms of their cost management programs and now they're able to get a sense of how they can size it and scale some of these projects even into areas that they may not have outsource or handed over before.
So I think the potential is high, but we will have to wait and watch because we have to build confidence and we have to get the clients to actually be willing to take the risk of doing some of these things.
David Mackey
I would just add to that, Mayank, from a financial perspective. You know, we've seen nothing to date that changes our philosophy that for clients to really take advantage of what AI and Gen AI can do. It does require that the process that completely re-engineered. And as a result, we continue to see that the opportunity for the financial model going forward is to move away from FTD-based types of pricing schemes and more toward transaction outcome subscription based models where the clients pay for results instead of for bodies. You know, when you look at logically how these engagements are going to have to work, there's going to be a lot of effort on the front end to clean data to build models, right? And unless those costs are amortized over the life of the project. It's going to be very difficult for client to justify.
So when we look at these types of initiatives, we see a clear catalyst with AI and Gen AI if clients get more comfortable with these types of engagements, as Keshav said. Moving us away from FTE-based models, and obviously, as we've shown over the last seven, eight years, we believe that as we move away from FTE-based models our opportunities for margin expansions improve.
Mayank Tandon
That's helpful. Thank you so much.
Keshav Murugesh
Thank you, Mayank.
Operator
Thank you. And our next question coming from the line of Ashwin Shirvaikar with Citi. Your line is open.
Ashwin Shirvaikar
Thank you. Good day. Good day, guys. I guess this is -- it's a mathematical question. If I look at 97% of the new range versus 92% of the prior range, so it is basically the visibility metric times the midpoint, right? The number -- the dollar -- the actual dollar number you have visibility to seems to have gone up by about $20 million. So gone up, right? So my question is, what needs to happen for you to call something visible? And I guess the flip side of the question is when did you learn of some of these changes that are causing your actual overall range to go down, but your visibility to go up? That makes sense?
Sanjay Puria
Yes. Ashwin, you're absolutely, right. And the visibility goes up specifically when we have a committed sign contract from the client perspective. Whether it's a volume commitments, whether it's a new logo expansion, it's all about the client commitment. So you're right, $20 million goes up from a visibility which is all about those contract we executed at this particular stage.
And as we keep on moving forward under discussion from a visibility perspective, it is all about the conservative what we kept on saying what we mentioned that clients when they give the volume, they committed, we take it, because we have no other mean, from at client and perspective that how their volumes from a future perspective are going to be because they have a better understanding of that particular business at this stage.
Keshav Murugesh
Yes. And just to add to the second part of your question, Ashwin, I think a lot of the deterioration that we've seen as Keshav mentioned in his prepared remarks. From a volume perspective, we started seeing some erosion in the travel vertical in September, you'll see that when you look at our second quarter financials. In addition to seeing the volume erosion show up in September. We also got forecast in September that showed lower commitment levels going forward.
Some of this was really a function of what happened in September. Similarly with the delays in our captive those discussions were ongoing throughout the quarter, but it really wasn't until later in the quarter that we had acknowledged that the client was going to be pushing out Phase 2 of this relationship. So I think a lot of this was clearly not visible to us in July when we provided guidance. Some of this is related to a deterioration in the macro, right?
I think some of that is showing up in the travel vertical on the volume side, some of it is showing up in the lack of accelerated growth and in the project side of our business where, when you look at our visibility remember when we came into the year, we actually came into the year with 2% lower visibility than we typically did, right? We started with 88, set of 90 and the reason was because we had added 6% of revenue through our acquisitions that were growing at a much faster clip than the company.
So we have comfort in those assets being able to bridge that gap. And obviously given what's going on with the macro here. While those assets continue to grow at a healthy clip, they're growing below our expectation. And as a result, our ability to bridge that gap has dropped. But at the end of the day, I think a lot of what you're seeing here, you're right, we've got new commitments from clients. We've been able to add revenue to the top line that the challenge has been the erosion -- stuff it's fallen out of the bottom.
Ashwin Shirvaikar
Understood. And then with regards to the expected inorganic contribution, I think it was supposed to be 300 basis points before, but I do believe Vuram, it's left in the quarter. What's the new expected inorganic contribution and just given some of the commentary that you had with how these acquisitions are doing, I mean, Vuram, for example, the low code intelligent automation services company. I would imagine that's the -- that's exactly the kind of work that clients are demanding now. So why the, suggested weakness, and it may not be associated with specifically Vuram. So, I know there may be other factors. But could you provide some color on that?
Sanjay Puria
Yes. So Ashwin, still 3% is in fact from an acquisitions perspective. You know, what we guided earlier. In fact Vuram and the other acquisitions have been growing north of 20% much better than the company level growth. I think the reversal, what we've spoken about is based on the business plan of the target revenue what was given based on the valuation, which was discussed with them.
So accordingly, it was much higher expectation from a growth perspective and accordingly that visibility of those growth is not there and according those reversal. But in fact, the growth is much healthier, much better discussion what we're having, including the top line as well as driving the productivity internally as well for the client.
Keshav Murugesh
Yes. Demand for the acquisitions remains healthy, Ashwin. You know, like Sanjay said they are still growing all three of the assets faster than the company average by a significant margin. The only issue is that they're growing below what we had hoped or anticipated and below what they've grown historically. So there's clearly been a slowdown and that's why the word we used in the prepared remarks with a deceleration in their growth. But make no mistake, these are still really good assets that are growing at really healthy rates. We're just seeing some of that top end get removed here.
Ashwin Shirvaikar
Okay. Can I throw in a quick clarification question with regards to the buyback. It was re-upped, I think it relatively late in the quarter. Is that why we haven't seen an impact in the quarter and should we expect you to continue to maybe stuff indicated down, would you be willing to step up and defend and so on. If you can comment on that.
Sanjay Puria
So Ashwin, we didn't see any share repurchases during the quarter because we got completed with our share repurchase approval. What we have from a shareholder's perspective and as the AGM was there in September we got that new approval for $3.3 million shares from our shareholders and as in my prepared remarks, as I mentioned that the Board has already approved to start the new program for the share repurchases, and accordingly, we expect to start the share repurchases in quarter three as we move forward.
Ashwin Shirvaikar
Understood. So no limitations there. Thank you.
Operator
Thank you. And our next question coming from the line of Maggie Nolan with William Blair. Your line is open.
Maggie Nolan
Hi, thank you. You mentioned the expectation for continued industry-leading margin profile, given some of the headwinds on the revenue side, can you talk about some of the puts and takes on the margins and the trajectory for the remainder of this year?
David Mackey
Sure. Let me take that. Maggie, you're right. Obviously, we had a really good quarter here in terms of margin in Q2. Some of that was what I would call non-recurring in nature, especially as it relates to the SG&A benefits that we had during the quarter. You know, to Sanjay's point when you look at a reduction in Q3 on the topline in the 3.5% to 4% range sequentially, I think the margin profile is also going to be down. So I think what we get back to for Q3, Q4 in terms of margins is a more normal cadence. So something in the range of 21% plus in Q3 and 22% plus in Q4, which when you average out over the full-year will bring us again somewhere slightly north of the mid-point between 21% and 22% for the full-year. Yes, the big issue obviously, in terms of Q3 margins is coverage of expenses given the revenue drop.
Maggie Nolan
Sure. Thank you. And then on the client that shifted from onshore to offshore. How long do you expect that shift will take, um, or is it already complete and then are there other parts of the portfolio where you're evaluating the potential for them to do similar things throughout the remainder of the year. And what do you expect the impact to be and the timing of the impact on the margins from this shift.
Keshav Murugesh
So Procurement line which began is journey from an off-shoring perspective in fact we started in quarter two and that's going to take at least couple of more quarters, which is going to be -- we expect it to get completed by year-end and accordingly, when we will step in FY 2025 from next year onwards perspective, that is where we will start seeing some of the improvement from a margin perspective. Also as we will be done with their entire offshoring. We expect the growth also to be rapid as we move forward, because of our long-term relationship.
Maggie Nolan
Thank you very much.
Operator
Thank you. And our next question coming from the line of David Koning with Baird. Your line is now open.
David Mackey
Hey, Dave, are you on -- are you on the call?
Operator
Please check your mute button. All right. If you like me to go to the next person in the queue?
David Mackey
Yes, let's do that and we can get Dave back into the queue.
Operator
Sure. And our next question coming from the line of Nate Svensson with Deutsche Bank. Your line is open.
Nate Svensson
Hi guys, thanks for the question. So I wanted to ask about your outlook for headcount growth going forward. So I think headcount grew 8% last year. And just looking sequentially in 1Q and 2Q was pretty flat. So just wondering what your thoughts on headcount additions sort of in the current macro environment and in light of your revised revenue expectations for the year? And I guess the related question there is you've had this talk about shifting projects from FTE-based to outcome-based and you called out the P&C insurance project in your prepared remarks as one example of that. So maybe what percent of projects today are outcome-based versus the FTE-based? And kind of where do you see that going over time?
Sanjay Puria
Maybe I'll start from a headcount postpaid and then Dave can add further. You know, we expect headcount to come down at least in quarter three based on what we are seeing from a revenue reduction perspective, based on certain reasons like offshoring and others of what we spoke about. But as we had in quarter four, we expect the headcount to go up because we will start hiring for some of the revenue growth, which is going to be there in FY 2025 and beginning from quarter one and including depending upon how soon the ramp from the insurance captive what we spoke about start, we may have to start hiring because there is always a trading period which are required. So if those things are well intact, we believe that we may be having either flat or a little higher headcount as compared to today.
David Mackey
Yes. And just to add to Sanjay's comment to kind of get the rest of your question here. The expectation while headcount should be flattish here and then hopefully pick up here again in Q4, the expectation is that similar to what we've been able to deliver over the last three years to four years. We do expect revenue per employee to increase in that 3% to 4% range, which, again, I think, gives us that long-term margin leverage and really demonstrates the shift towards the nonlinear models.
When you look at revenue by contract type, we're still in that kind of 70-30 mix between FTE and non-FTE. I will tell you guys though that, that true mix has been masked by the large healthcare client that we -- the process that we lost, which was entirely subscription-based. So I think had we not had that headwind from a revenue perspective and that headwind from a non-FTE perspective, you would have seen the mix starting to move here. So part of what you're seeing is a function of kind of client behavior, but part of what you're seeing here in terms of the mix between FTE and non-FTE is also client specific and specific to the WNS portfolio.
Keshav Murugesh
I just want to...
Nate Svensson
Very helpful.
Keshav Murugesh
I just want to underline one more thing, one more point here. And that is in -- we've added almost 830 new seats in this quarter. And we're also looking at -- we are also bringing on stream some more facilities that will add more seats over the next few months. So on the one hand while we're seeing all these headwinds at this point in time for H2, we are also confident that based on the conversations we are having, the fact that some of these revenues that we're talking about will actually get deferred and move into the outer -- the rest of the year or go beyond and we will actually have much more coming into 2025. We're already preparing for the ramp for 2025, I must mention that as well.
David Mackey
Yes. And we need to continue to de-link that growth in revenue from net growth in headcount.
Nate Svensson
All very helpful. I appreciate the detailed answers there. So my follow-up question. I was hoping you could compare and contrast, some of the demand trends that you're seeing across regions. I know you've called out the travel vertical before, but just kind of looking at your results in North America and the UK, specifically. So it looks like you're seeing a bit of a deceleration in North America, whereas the UK has had a couple of quarters of sequential acceleration, which is nice to see sort of given the macro headlines that you see around the country.
So maybe you could compare contrast what you're seeing across your different geographies, how much that's tied into what you're seeing and say travel just more color, that would be very helpful. Thank you.
David Mackey
Sure. Let me take that, I think when you look at our business, and you kind of look at Keshav's commentary about the pipeline and demand for both digitization automation as well as cost reduction. What you'll see is that across services, across geographies, across verticals. Our demand is really healthy, right? Where you see gaps, whether they're in a vertical, or in a geography, or in service offering, they're more about the client-specific issues that we've been talking to you about, right?
So obviously, we're going to see HealthCare is weak because of the HealthCare process that we lost, right? That's also going to show up as a headwind to the US revenues. It's also going to show up as a headwind to the non-FTE revenues. When you look at the large procurement client that's transitioning from onsite to offshore, that's going to show up as a headwind to our manufacturing retail, it's going to show up as a headwind to finance and accounting. And it's also going to show up as a headwind to our US-based revenues. So the reason you see US soft isn't because US demand is soft. The reason you're seeing the US is being soft is because of the HealthCare clients, the large Internet based client and the softness in traffic.
So a lot of what you see, what I'm trying to get at here is that the optics on these are not really what I would call macro trends. But more about the specific company issues that we have within our portfolio.
Nate Svensson
Thanks, Dave, I appreciate it.
David Mackey
Thank you.
Operator
Thank you. And our next question coming from the line of Puneet Jain with JP Morgan. Your line is open.
Puneet Jain
Hi, thanks for taking my question. Sanjay or David, like if you can break down the revenue guidance of $40 to $50 million in annual revenue, into various components, like the insurance clients, travel volume, project delays and I believe currency should also have an impact of around $10 million increment related to prior guide.
Keshav Murugesh
Yes. So you're talking about the reduction in the guidance. The component of that specifically put it.
Puneet Jain
Yes.
Keshav Murugesh
Yes. So I think 1% is coming from FX itself, as I mentioned earlier. You know, 2% is coming from a large insurance captive are different, that -- there is the 1% from client, volume forecast from a conservative perspective and another 1% is some slowdown in decision making from project based on some of the acquisitions, what we spoke about. And just getting net out with the 1% growth, what we had in quarter two, specifically. So net-net, if you see it shows that 4% on a reported currency, and 3% on constant currency.
Puneet Jain
Got it. And I also wanted to ask -- Sorry, go ahead.
Keshav Murugesh
No, Puneet, go ahead.
Puneet Jain
Okay. And I also wanted to ask about like the lower growth expectations from Vuram, we thought like their services would be more relevant in the current environment as clients looking to cut cost. Could you share more details on what drove the weakness there.
Keshav Murugesh
And just -- So, Puneet, again, it's not the weakness from a growth perspective, Vuram has been growing more than 20% a year-over-year as expected. This is all about contingent consideration, what was agreed with them for a much higher growth from a valuation perspective. And accordingly, that particular number is not there or is not expected at this stage and according reversal. But having said that it's much relevant, it's providing a much healthier growth as we discussed with our clients as well as the pipeline is very, very healthy across all the verticals wherever we are discussing with our existing clients, all the new logos.
David Mackey
Yes. And Puneet, I think at the end of the day, whether it's the services from Vuram or whether it's what we're seeing in Procurement projects or what we're seeing in certain instances on the analytics side, right? I think it's more about client prioritization. And if the type of service that you're selling requires the client to pay upfront for something that they need to get the benefit of over time, these are the kinds of things the clients are having to make hard decisions on, right?
There's a bulk of our business, doesn't involve an upfront payment from the client, right? Our core mission-critical process outsourcing work does not require the client to make an upfront investment, right? Whereas even though projects like what Vuram does in terms of low code no code automation drives cost reduction over time. The reality is the client has to pay for that service upfront. So in this environment I think clients are thinking about what they want to do first, how they want to prioritize, right? And we believe that these projects will all get done, right? Clients need to do this, right?
The question is, in this environment, is it now, is it next quarter, Is it in 2025, but to Sanjay's point Vuram's business remains extremely healthy, it's growing at a very nice clip. It's growing well above company average you said over 20%. The issue is, it's not growing at the expected level that we had had.
Puneet Jain
Got it. Now that makes sense. Thanks for the clarification.
Keshav Murugesh
Thanks, Puneet.
Operator
Thank you. Now our next question coming from the line of Moshe Katri with Wedbush. Your line is open.
Moshe Katri
Hey, thanks. Just some clarification, you spoke about the travel vertical where you're seeing some weak volumes. I guess the last time we really spoke about the travel vertical that's being a headwind here was during the pandemic, maybe you can talk a bit about some of those weaker volumes. What's really kind of driving that and what sort of visibility do you have into this vertical for the next few quarters. That's my first question, thanks.
David Mackey
Sure. Let me take a crack at that motion. So look, I think when you look at what's going on in travel, right? You can bifurcate it by geography. You can bifurcate it by sub vertical, right? I mean some of the behaviors that we're seeing in the IoT space for example, the online travel space are different than some of the behaviors we're seeing in the airline space. We have certain clients where the volumes are higher than they were, the prior quarter. We have other clients, where the volumes are lower, right? So some of this is at a macro level, I think there's pressure, right? Some of this also to Sanjay's comment earlier is about client-specific issues, whether it's about changes in the business models, whether it's about market share gains and losses, right? So there are volume issues within the travel industry that go beyond just kind of macro. We did see some of that show up in September, when we look forward to the projections that we've gotten over the next couple of quarters. Again, we hope they will prove to be conservative.
We've historically seen that and as we've discussed many times on these calls, we believe that the way these contracts are structured and the way the forecasting process works, incent devices clients in this type of an environment to be conservative. So the hope certainly that some of these reductions don't materialize, but to be completely transparent. We did see a little bit of a dip in September. So I think hopefully, what we've done is we've derisked the forecast based on the volume commitments that clients has given us and what we've included in our visibility, which is now up to 97%. But again we kind of have to watch and wait. And we're dealing with both potential macro issues as well as client-specific issues under that umbrella.
Moshe Katri
Okay. So you brought down the mid-range by about 350 basis points in terms of constant currency revenue growth for the year from the last quarter, which part of that came from the travel vertical specifically.
David Mackey
So close to 1%, right? I mean, the bottom line is Sanjay kind of reconciled for you the -- that the 3.5% and by the way the midpoint constant currency revenue was only down 3%.
Moshe Katri
Yes, understood. And then the last question.
David Mackey
Sorry.
Moshe Katri
Sorry. Go ahead, Dave.
David Mackey
No, go ahead. I was going to say, so the 1% that we've seen in client volume reductions that we've baked into the guidance is predominantly driven by the travel vertical.
Moshe Katri
Okay. Okay. And then the last question here is I guess more about capital deployment, the amount of cash we have on the balance sheet. Clearly, the market is not giving you guys any sort of credit for your ability to outgrow actually to outperform in this market compared to your peers. Um, I mean what can we do internally to kind of offset that, given the multiple, given evaluation, given the free-cash flow generation on an annual basis.
Keshav Murugesh
I think, I'll take that. I think from our point of view we will -- we continue to look at how our business, overall, it's trending for the long term. We may have a short term issue with H2 of this year, which we have spoken about this call and during these results. But overall, we continue to be very confident about how our business is trending, the kind of conversations we're making and the pivot the company is making around some of the new technology changes that are exciting clients. And therefore creating opportunities for WNS.
So from our point of view in terms of capital allocation first and foremost, we will continue to keep looking for those tuck-in M&A targets that we have spoken about that can add more capabilities so that's things turn around, we can leverage that capability to big become even more impactful with every one of our clients. There is a strong pipeline of candidates that we're constantly looking at. And if something that makes sense for us and adds the right kind of impact from a capability point of view, we will pull the trigger there.
Other than that as Sanjay and Dave mentioned, we've also taken approvals for our buyback programs, right? So we continue to be very, very positive about the overall health of the business, the momentum that we can create for the long term. And as and when we believe the opportunity is right, we will continue to accelerate our buyback programs like we did earlier this year.
Moshe Katri
Thanks, guys.
Operator
Thank you. And our next question coming from the line of David Koning with Baird. Your line is now open. David, your line is open, please check your mute button.
David Mackey
Dave seems to be having a problem with the speaker.
Operator
Our next question coming from the line of Surinder Thind with Jefferies. Your line is open.
Surinder Thind
Um, good morning. So I'd like to start with a question about just the commentary earlier about having more large deal opportunity than at any point in the past. And then you also mentioned something about potentially a mix shift changes ever increasing, um, focus on cost takeout projects versus the transformation projects. Can you quite a little bit of additional color there in terms of, is that a lot of the product of recruitments uncertain macro environment that we're seeing, what's kind of driving that. And if we should begin to see the macro economy normalize. How should we think about that opportunity in client decision making it that point should we expect a step back or what is the big picture look like for perspective.
Keshav Murugesh
Yes, maybe I'll take a stab at that. You know, first and foremost, I think the pivoting of the model around some of the new technology changes as well as the requirements that customers are facing because of the stress macros, also means that they are looking for partners who can actually engage with them at the highest levels and can really help them in terms of navigating the current crisis and creating opportunity for the future.
And that is actually resulting first and foremost in number of CXO level conversations for us at a level that we have not seen before. I think it's very exciting to see the kind of conversations we're having with prospects as well as existing clients in terms of completely new programs that they might not have considered before, but are now being pushed to look at, because they want to stay ahead of the game as far as AI, Gen AI some of these new trends are concerned. And at the same time also be smart in terms of cost leadership programs. So that is the excitement for WNS in terms of just a quality of conversations we're having, the size of some of the deals that we're looking at. Let me start with the captive takeout which may have deferred but is committed to providing us that revenue that we spoke about earlier. So that's the first aspect.
Beyond that as we come out of the macro environment. I actually think because of the quality of conversations that are taking place and the new relationships being built by WNS will be client community, the prospect community as well as the analyst and advisor community. The ability for us to continue to lead them in terms of programs that they must do to stay relevant and ahead of their competition is going to be front and center. And that gives us a lot of confidence about the business momentum for WNS, as well as I would say for the sector for the long-term.
David Mackey
Yes. And just to reiterate Keshav's comments, Surinder. I think when you look at, for example, the four-years prior to the pandemic, when the macro was healthy. What you'll see is that our business was steadily accelerating. And to the extent that traditionally people looked at these businesses as cost reduction types of plays, the reality was, I think what you saw in a healthy macro both in terms of clients willingness to look at strategic outsourcing engagements in terms of the types of clients that we're looking at them, right? These is were clients that weren't struggling these were clients looking for competitive advantage looking for digitization and automation, looking for excess capacity, right? The reasons clients were coming to us for the four years prior to the pandemic were not about cost reductions. They were about needing to automate in order to remain competitive. The fact that we're in this environment now where automation, digitization and now the potential impacts for AI and Gen AI are front and center, right? That digitization theme is not going away.
The only question is does cost reduction layer an additional catalyst on top of that or not. But again, I think back to my comment earlier when you look at our top line growth. When you look at the growth engine in our business. Extremely healthy right now in this environment. It's the lost business, it's the volume, it's the projects. It's the healthcare clients that's creating a challenge for us this year.
Surinder Thind
Understood. And then as a follow-up, just the commentary on how important it is to kind of continue increasing that number of employees that are working from the office. Is that being driven by client requirements here and maybe how does that impact your margin profile in terms of just the optimization of global delivery.
Keshav Murugesh
Yes, so work from office basically depending upon various factors, one definitely as you mentioned that's based on the client requirement. It can be regulatory because of the data privacy and some of those other requirement. Third, it can be also from a geography specific. And specifically in the year two, because of the infrastructure, right? Whether it's because in Tier 2 cities you have power outages you have bandwidth challenges. So employees are required to be working from office.
So these are various factors which get consider return to office and we believe at this stage by the year end as an average 70% is a good number from a work from office. And it will depend as we move forward. You know, just to remind, you weren't from a country like India where -- it is a temporary concession, what has been given by the government to work from office -- work from home at this stage. And we'll have to wait and watch how those things move as we move forward.
But having said that, if those things continue we believe 70%, 75% is a good ratio to have work from office as a mix. Because this is a new -- this hybrid model of the new way of from a B2B perspective as we move forward, because clients want to be much prepared for that.
David Mackey
Yes. And I think from a margin perspective. What that means is that we should have easing headwinds, right? I mean this has been a pretty significant headwind for us over the last year, year and a half as we got back into the office here but, we moved from 65% last quarter to 69% now, what you should see over the next several quarters is, if we're targeting 75% for example as an end state here that quarter-to-quarter and the year-over-year headwinds that we see should start to abate from a margin perspective.
Surinder Thind
Got it. Thank you.
Operator
Thank you. And our next question coming from the line of Vincent Colicchio with Barrington Research. Your line is open.
Vincent Colicchio
Yes. Curious if we look at the travel volume decline, how much in order of magnitude is company related versus the macro?
David Mackey
Yes, good question. Vince. I think if you look at, again, it's hard to tell, sometimes it's very difficult and working with the client to decipher if the volume is down, is that because the macro has dropped for their services and their geography or for the type of services that they are providing versus they're losing market share to another player or they've got internal challenges that they're dealing with or they've got other structural issues. I would just putting a cocktail napkin on this, I would say that two-third of this is company specific and the third of this is macro.
Vincent Colicchio
Okay. And then my follow-up is, if we look at the customer-interactive business and we way opportunities and threats, over say a three to five year time horizon from Gen -- from Generative A -- Generative AI. So what is your current thinking?
David Mackey
I think we look at it as an opportunity, Vince. I mean certainly there will be productivity pressure, but some of that is standard to our business as it is our contracts typically include 3% to 4% headwinds on a year-over-year basis, structurally today. What we've seen in the use cases and the client conversations that we've had to date and remember WNS is not operating at the entry-level on CX. We're not doing low-end level one helped us work. The stuff that we're doing is domain been centric specialized, and that's the reason why clients are using us and not a pure contact center, pure call center, right?
But when we look at the opportunities that we're seeing in CX moving forward, especially as they relate to our customer base. It's more about improving quality of service, it's more about improving retention of end customers or end customer satisfaction or hyper personalization of these interactions, then it is about removing costs from the system, so. As Keshav said in his prepared remarks, everything that we're looking at here involves the human in the loop. When we look at these types of activities and benefits that we're going to be able to deliver for clients. I think they're not thinking about this is how do I take 10%, 20%, 30% out of my cost. I think they're thinking about this thing, how do I improve the quality of my service so that I can drive topline.
Keshav Murugesh
Yes, I just want to add here that our dependence on pure contact center work is minimal, really, what we do is much more digital CX kind of work, where we are doing a lot of technology related work and the human interacting much more to deliver an outcome for our clients. So the need for both to work together is critical. I think clients understand that WNS is constantly adding new technology including Gen AI models to possibly cannibalize some part of our own digital CX revenue in order to stay very relevant and become far more sticky in terms of the client relationship.
And that's where the trust gets built out significantly. And we're also seeing a trend where clients have moved completely to automated models, customers -- their end customers are now pushing back saying that's not the model they want particularly in a premier kind of processes where ultimately an end customer very quickly wants the solution, wants to have an interaction, sometimes with a high quality individual as well.
And that's the space, that we are taking that we have been spending a lot of time on, which is high growth if you ask me, has potential for the long-term as well as has high margin profile as well. Whatever we have discussed as of now on this call till now has been more around H2 related issues and more around specific customer-related issues around volumes, project based work the delay that we spoke about in the large insurance captive ramp.
And most importantly around conservative client outlooks, that have been provided to us at this point in time. But if you look at the macro kind of interactions that WNS having, we're actually having really top-quality interactions with prospects on the sides. Our existing customers beyond the three or four areas three or four clients that we spoke about actually having great conversations with that, all are acquired entity looking at growing even faster through new conversations that having on an integrated business with our client partner teams.
And finally, we believe that with the investments we've made in AI and Gen AI and the pilots that we're now driving, sooner rather than later boards of companies where our clients reside will also be asking them about how quickly they want to take the benefits of some of the solutions that people like WNS providing for them. So I think the pressure will also be on the clients will start moving with their feet over the next few quarters. I think at that point in time, we will see a lot more opportunity and revenue streams as well as margin uptick coming from some of those opportunities. So quite bullish about the long-term future based on how we're seeing our business momentum.
Vincent Colicchio
Thanks for all the color.
David Mackey
Thanks, Vince.
Operator
Thank you, ladies and gentlemen. At this time we have no further questions in the Q&A queue. This will conclude today's conference call. Thank you for your participation. You may now disconnect.
