GP Strategies (GPX)

Candice Hester Investor Relations
Adam Stedham Chief Executive Officer and President
Michael Dugan Chief Financial Officer
Christopher Howe Barrington Research Associates, Inc.
Jeff Martin ROTH Capital Partners, LLC
Zach Cummins B. Riley FBR, Inc.
Call transcript
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Welcome to the GP Strategies Third Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Candice Hester, Vice President. ahead. go Please

Candice Hester

afternoon, quarter Good welcome GP to Thank earnings everyone, conference third XXXX call. Strategies you. and

On the call and today are: Adam Stedham, Chief Officer. Mike CEO Financial Dugan, and President;

today's like Before Because I potential these of on effects pandemic including to our comments important COVID-XX the and will the factors forward-looking expectations related and could assumptions remind are uncertainties, statements we about statements include would there operations. you and results begin, of based business risks are or statements, forward-looking implied actual different results upon that management's our statements. events by are materially these from that expressed subject cause and be forward-looking to to those and

our are on today's the our file presented for are Investors following of documents of the this XX our SEC, which For A on are section Investors page at be Adam the also the time, available on on being today of days to to website we complete website. Stedham. a of read call. these with Quarterly posted discussion of Releases call turn like webcast available will replay risks, gpstrategies.com. our At slides the section this Earnings I'd website to encourage The over that you

Adam Stedham

Thank you, everyone. Candice, and welcome,

to as I'll pleased execute Then we to company results of disruption of while point forward. financials the Q&A managing session. made out couple strengthen guiding move gives and going same a describe key principles share in the a third call, is ability points about forward. with we confidence our view some initiatives progress situation. COVID-XX current on how to GP's balance current continue competitive our like the managing QX, caused the through the macroeconomic and demonstrate company quarter QX will through high-level landscape the for today's share our I'd pandemic. effectively at data For information by The the the with company how to the some into debt us performance, reduce sheet, We're to provide XXXX COVID time, followed insights by the you Mike GP's detailed we

our million the million to of second or The $XXX.X compared quarter XXXX. revenue for increased million of increased the for gross of QX to to XXXX. $XXX.X or million XXXX, revenue of compared quarter second QX $XX.X During to $XX.X XX% for XX.X% XXXX profit

then to was diluted the of of this XXXX $XX.X $X.XX compared the million quarter $X.XX EPS quarter, compared year. XXXX, the loss of end second QX XXXX. third finally, Our And improved for company's XX, a million the to at long-term $XX.X share for September to as debt to QX per reduced

XXXX, to Now the specifically. of steps I'd like the take minute more summer debt have to company. significant Since delever taken that to discuss a we

discuss to principles operating strategic provide environment GP and direction. the like As strategic strong conversion, was for model growth for sheet. point, This guiding company's our this framework services accomplished and a I'd by like forward-looking also view At and our well is our margins divestitures. the how flow are result, the we cash of balance shifting our positioned of opportunities. I'd expansion to with market improving review a a

have We a principles few direction. key our strategic guiding

from First, where growth margin and GP benefits we're focusing key on revenue markets opportunities.

such positioning services specific financial technology, industry stronger verticals automotive, to and view. advantages superior as Specifically, competitive name a just and GP has in

regional organization Second, on needs by we we a structuring can the our that serve best basis. clients' believe

expansion And generation, the believe expect that on to Within and our evolving city organization, structure and markets. divestiture on nimble X and to clients. maximum flexibility During to included our team we're during the global manage then protect the the months, focused a we state shift our to with be margins provide seen enables on actions our of action margin historically past to many the year even third, to response to capitalize a that cash cost. COVID vary meet we've country, country from economic these with focus city. target needs state, We've our have of recoveries. controlling which We key GP taken this assets to decisive manifested outside of opportunities regional

the aggressively following summary, time, in the same operating shifted superior costs model, service. position divestitures guidelines, that and in clients' So pursued serve to managed company's stronger we're we've deliver a unlock the strategic value. and our needs these At

by in the the move continue flexibility quickly of expect maximum as scale and to We business business manage through cycle. take to unique advantage this marketplace focusing provide to resources opportunities to the we

So look to competitor for expect our the training is what world. business, a GP largest be the overall in services now let's single we for services internal at post-COVID In environment training department. the

add During during back during these costs for to organizations our and back are economic recovery. to to demand an upon typically an Based recovery. an their economic turn external function providers companies services downturn, these economic support slow experience, driving on cut needs, this

needs superior scale, Additionally, regional to people, The and attract and in position Strategies, GP economic due implemented ability processes company talented service. with there's increased of to an deliver enable technology demand and to focus, leadership manage the the our cycle. to associated the training clients through changes team

can and As that add GP expect the market. new We we we the financially laid capitalize anticipate in to in strong emerge will learning expand foundation with from corporate that fully arise clients. economic for multiyear to and to on opportunities talent current forward, cycle significant we've management the ability place the we we look contracts

the and the that more direction be strategic model enable dynamics, company we the marketplace growth. addition to in and believe will to in shift long-term our opportunistic the In marketplace operating drive

to back take demonstrate to some step give economic to quick has our Now past you I'd historical cycles, how reacted a business and like reference.

business cycles, following dot-com the and crisis. notable the back the look X GP over performed years, you has financial If past XX bust well

performed these and competitors prepared historically During more the serve. our we within measures. each buying to shift We events, the GP all as GP's stable emerge from than behaviors business financial across that to markets been believe performance of has as in many our ability X better years cycles due following strong well well of

We expect similar. this very around time to be

the over quarter. point, at and provide details to I'll Mike, current Now you call turn our he'll this with the regarding

Michael Dugan

Thanks, afternoon, everyone. Adam, and good

would get stated into $X.X was Slide million that of balance both in HX the is million $XX.X of XXXX G&A. these flow XXXX I of QX provided results, more cost Before QX want QX the to up briefly that or with severance revenue quarter-over-quarter Adjusted reported some to QX I in and both $XX.X EBITDA I to on sequentially compared and was million drivers details financial in as exceed them onetime highlights through a able or the result, detail providing of the that and adjusted reduce of EBITDA over of QX, our X% million, and outlook on up already QX the able from that to outperformed of details cash year-to-date at compare over the of HX the XX% over revenue EBITDA generate including which this QX QX of were and consistent our QX, positive we In sales will are XXXX. has net go cash with in other on debt QX and adjusted presentation, items results. in XX results go now later was the is in outlook calls. of million in outlook $XX.X of to company our earnings long-term continue to included and growing QX. $X.X

background turning Slide Now operating our XX to on segments. and new some

July reorganized emerging to manage Africa regional As the the Europe, East basis, Asia the Adam which mentioned, principles main Pacific the America, markets of X, Latin we XXXX, business being guiding on company when or EMEA, and America countries. consists Middle strategic and with of direction, markets, X and discussing North geographic our effective a

XX, by For operating QX regional quarter new This profit we to gross Within also provided by will each XXXX. website. and through our back total dating reporting of that strategies this our year of on posted solution organizational learning Setting revenue our reference, on solutions, reported Slide on provides categorize restating sets: and the XXXX be our digital performance aside, have or regional segments focuses set table table geographic workforce segments, services component and managed technical practice or content primary old from development we adoption training primarily learning sales Automotive organizational is and development solutions. business and solution APS the leadership development management customer development, solutions solution company services engineering the our human into and and services, APS is X OPS, focuses and HCM marketing-related from technology leadership plus OPS consulting previous transformation consulting the our sales or old implementation loyalty organizational set TPS previous and our enterprise products, practice. services technology practice. solutions implementation primarily the business enablement solutions, from previous services. from on is sales engineering plus enablement TPS the and Technical practice other capital HCM. adoption and on focuses solution enterprise technical practice. performance performance development set services, or primarily services services, including custom from learning managed the

by on we longer no in solution sets. be these solution a based will While these reporting global our different MD&A structure providing color we have sets,

projects million of revenue and/or reported on identifying Now to other training from to decline to the XX.X% net events the cancellation execution a some is or company be LNG is to an for turning million revenue impact revenue The the tuition reported that due the QX million to COVID-XX decline revenue linked million certain $XX.X company COVID-XX give to revenue in and are and how decrease in background of $XXX.X COVID-XX. in which We gross last divestitures ending decline on directly and million, of of down drivers that the in profit related the primary the businesses, There Slide divestiture year. client revenue delays postponement to $XX.X is can or It due not important is is XX. $X.X attributable revenue FX. of disruptions. QX directly $X.X

out Our categories. business can X main into be broken

The contracts get that long-term multiyear year. first funded clients each with category is

The contract work place, work COVID-XX as can clients. due expected X directly with to related quantified have delivered be Declines and to category the delays in than second less these but annual identified contract categories volumes. we is existing renewal in agreements is as and in delivery cancellations

clients, directly is X primarily shorter-term identifiable work was The category decline This is as delayed disruption in to canceled. X to due the of in with of months seen a has work by or and duration. COVID-XX, but work of caused that project-based $X.X third not work existing overall macroeconomic category That duration overall is million. contracted new primarily QX

changes. rate offsetting million increase exchange the Finally, revenue partially quarter declines to $X was due the in in FX

of percent, severance of profit XXXX expense margin instead terms million cost where gross exempt million, are impact cost-cutting which from accruing time cost-scaling of sales of QX to gross include the our profit gross XXXX. company the taken and related of now or Paid partially Policy, Time down PTO, company offered off. and In in the offset $XX.X X.X% gross Off is in profit reported $X a change the by QX or reported actions flexible quarter, in PTO employees of

a we of for a PTO class longer As are result, employees. no carrying this liability

$XX.X decline for XX.X% that and or profit year. that compared to The adjusted of QX million reported principle and drivers dollars QX excluding the gross for Excluding to Breaking expand last severance drivers $XX.X of million revenue of X, on segment due revenue and and which X, profit is million increase to XXXX and and million in from changes in a guiding net items percent of reporting XX. foreign million currency a North QX revenue the for program on our alternative overhead QX period $XX.X of a that $XX.X same expense the reported segments October in rates. of $X.X to reductions by months XXXX have million COVID-XX January these Primary is in increase onetime X% $X.X portion divestiture XX.X%, last revenue management disruptions, other QX that XXXX, Slide respectively, fuels and gross of to QX strategic taken efficiencies and down million expense are control was regional million in cost division tuition decrease margin last in to XXXX, the out the over QX a year percent the gross XXXX, to of XX.X% than compared XXXX costs. due America $XX.X continue our part margins business $X.X XXXX. revenues forward decrease exchange the due of as on gross million, our of is more in are to expected the due to going X and A place margin $X

Within performance impacting decline solutions service project-based primarily organizational the to North seeing combined work our performance a conditions technical $X.X million macroeconomic America offerings solutions cycle. segment, the and the revenue, are due shorter-term in

our QX saw primarily was a our While pub revenue QX of $X.X million million to multiyear pub up XXXX a the the XXXX. previously was of small $X.X of service ramp-up to compared a shipments. automotive of award year due reported net increase and automotive client the with which from Publication increase performance was revenue revenue publication to offering last the in QX in that solutions contract timing revenue due $X.X million, in in outsourcing announced major of

And down digital $X.X XXXX. disruptions. And due of million the million is million, a revenue revenue is to $XX respectively. QX now is are $X.X down The in drivers conditions is on reported XXXX X X service COVID-XX XXXX, pub decline in Technical replaced scheduled Primary the forecasted from by revenue be a QX $X have as impacting to shorter-term from in offerings in to project-based decline of For QX EMEA been million million, are the actual the segment, $X.X versus X revenue pub QX, due the XX% Solutions XXXX as year. XXXX million and within $XX.X $X.X publications XXXX Performance million pub X, as of XXXX, million, segment million, COVID-XX of revenue revenue, or million QX canceled of quarter are a which of with reported work the result is our seeing revenue $X.X pub last and of the cycle. primarily publication in the the Details versions. $X.X million revenue revenue $XX.X of for $X.X million, actual $XX.X which macroeconomic follows, EMEA forecasted publication

automotive $XX.X Markets of net the offsetting million shorter-term a which segment changes within large and region. Offsetting year. $X.X OPS service impacting QX revenue to currency to due or due cycle in offerings $X.X the exchange automotive foreign revenue an within these XX.X% which year decrease decreases these no or $X.X $X.X work was in the million due to decline of the revenue contract due net increase replacement solutions The of project last disruptions a the conditions Emerging the automotive increase drivers in segment million the performance rates to reported $X.X QX foreign coupled COVID-XX in in service with primarily segment our is currency While million in from macroeconomic million decrease area. declined of contract, rates are in and to a performance offering partially overall, of and decline in $X.X exchange million, million $X completed last revenue of with million in Emerging down decreases $X.X all Primary a due revenue solutions Markets a $X.X million overall was EMEA was - changes million. increase services a

In terms operating PTO while of QX dollars percent segment excluding the the improved profit impact severance of of XXXX the segments to periods margin both in each noted of of for revenue gross are onetime XXXX. previously gross level, due change, gross the dollars comparable at and profit gross declines down the margin expense percent QX to seen have policy and after compared

have the place to due last of cost X same our percent efficiencies mentioned forward months is year to XXXX principle that all expected the to costs. of are other margin continue period compared across and overhead taken and previously, As QX over to last reductions part portion the strategic in margins increase expand in that gross a as segments going control guiding

of FX, million. gross on a COVID-XX, revenue divestitures nets $X.X on X and decrease segments the impact to Moving of and revenue outside the reporting to small for Slide profit changes in year-to-date other of company the our XX,

labor PTO our included drivers other marketing gross increase SG&A months. offset for PTO move in the Axon of the section we percent practice XXXX. year-to-date down in the the compared to fees, of $X.X million expenses the More are primary increases in $XX.X of QX is to are Slide While change, XX. XX.X% reduced change after XX.X% business. XXXX other the $X.X $X.X The this and up QX are and our by million XXXX. $X.X MD&A due expense administrative year-to-date XX-Q. in last from a offsetting expenses IC But dollars call, XX.X% on QX $XX.X implemented was Partially on cutting was versus of the a of down now by in net on million, primarily $X.X increase expense initiatives and our million, a to to General which policy increase million will for million due related the to and and divestiture of severance the to which Sales next of the details year-to-date and year-to-date recently expenses, X incurred cost QX costs decrease primarily the partially margin million, expense was $X.X is profit of reductions, XXXX. these legal million for announced is $X.X severance QX slide of policy in of due net for in excluding gross G&A XXXX million, comparison

the and is upon This expense at XXXX rate mix to in the the a and is income items due few, by last the expense down from tax $X.X P&L decrease year-to-date million, has lower year which $X.X other tax jurisdictional on million to pretax and lower is on to interest $X.X was borrowings year-to-date Moving facility Income down earnings. credit overall XX.X%. effective quarter impacted and interest XX rate in the just Slide QX rates. for of touch million under

Slide XXXX reported Moving is QX was is EBITDA in the down summary for QX we on QX earnings after which earnings from Adjusted QX share the to XX, million, adjusted last items, adjusting in on for $X.X year. same EPS $XX.X million adjusted reported we per for of $X.XX, last the EBITDA of that reported year. special adjusted which

this at appendices to For adjusted you EBITDA, can EPS details of on adjusted and the end the refer presentation.

will Moving relief, $X.X payments on increase come $X.X of due million $X.X through net liability $XX.X A totaling deferred cash is for decrease on year-to-date is million and related million. is are XXXX. million million of $XX a the net that liabilities and XXXX. note currently operating finally, tax other in Slide year-to-date a XXXX paid payments when in And XXXX. to all balance item and due other COVID considering sheet $XX.X QX to company and which during this some decrease XX, be a flow QX cash as drivers One flow of to XXXX, CARES rough the net and has as payroll million deferred wind-down the tax performance Act remaining

the is in not our ratio from Our of The which was were for the ICA without million facility net still XX/XX/XXXX. defined reported under received The until of Net year-to-date. cash the million /XXXX. sheet of of divestiture of reported X/XX would times of proceeds these the does, leverage I however, the out XX/X/XXXX, million the X/XX, as credit IC the debt reduction of is a impact from not and $XX.X was X.X end are deferred divestiture. our of ratio held carve $XX.X that therefore, payments Axon from XXXX EBITDA, note as and is X.X reflected the leverage of $XX.X as million as liabilities company's $XX.X flow down QX related assets at balance to end as X/XX/XXXX XXXX. QX the sale debt which debt long-term

as the the Page divestiture backlog the backlog XXXX. down is decline million, of to QX reported XXXX this to in was $XX to due reductions XX.X% The can $XXX.X which COVID-XX compared attributed backlog QX Finally, LNG disruptions. economic is cancellations primarily that turning of backlog decline $XX.X businesses. of be to on or the million was remainder million XX, to and of due of

Both This most months backlog to to the at for months update. for back in equated look X.X QX financial goals XXXX, our of our you are revenue. now concludes the months figures range of of If within the X.X long-term rate, I QX call revenue backlog of Adam. terms based revenue expressed will historical turn burn metric. XXXX, the and current the equates of this revenue of the quarter on to of backlog

Adam Stedham

you, Thank Mike.

to current we're to in as So, ability strong we're tough the situation. world. said, thrive our well as we through the a position feel is a as though in We environment as that in well manage to pleased the managing with of company post-COVID a world continue COVID

think point, at So turn we this will answer. question I and over to


Thank you.

now Our session. Alex first comes will [Operator go Barrington the We question Please Research. Paris Instructions] from begin with ahead. question-and-answer

Christopher Howe

questions. everyone. taking my Thank for morning, you Good

Adam Stedham

how Alex, you? Hey, are

Christopher Howe

This Alex sitting is in Chris actually. Howe for

Adam Stedham

Chris. okay. Hey, Oh,

Michael Dugan

Hey, Chris.

Christopher Howe

here questions your to listening many Hey, comments. after

mentioned of company, training First typically external to a supplement we you loss providers the to performance recovery moving see the internal off, of corporations department. their in historical the as

into has we what recovery been seen similar different, has we and this to in history, pandemic characterize to and previous line? as what this given the even you've a experienced past impact you different incremental quarter are that top quarter, been recover recoveries? we to recoveries on And fourth and start haven't As what anything this margin than opportunity recovery how the about this recent past expecting

Adam Stedham

the its question. perspective still recovery right now great So, infancy. is in From our

to a So we're definitely levels not we're recovery that at were full point, not one the at scenario. back definitely we but

managing virtual one ways situation more is thing recovery it's The the the to some its and learning, situation So shift, in modality a is different this driving still in more either about or we're is towards that e-learning. driving infancy we think through come. so

delivery. in as face-to-face are that well as positioned provider space as well a We

to there's convinced knowledge different significant to feel with going companies post-COVID pre-COVID. a we trying succeed than the associated transfer And requirements that world. is in post-COVID So be world

navigate Someone has regardless face-to-face, that to e-learning, learning, in areas transfer. them are positioned virtual whether well help them. we of And those knowledge it's all of help successfully the modality, to

that really mix that understand, the will and specific we So modalities we need of we're in too we're positioned is positioned. optimistic that of the well marketplace, about It's arise, that to the are early well regardless mix. feel but

Christopher Howe

follow-up this as one I'll fit And new geographic back you some relates and And ahead? does what we new would to to extent, under queue, that how form strategic of are Great. question backlog backlog then on on perhaps How seeing this set direction jump to geographic changes the the in a it segmentation basis? by you geography. basis? look a characterize as Dissecting

Michael Dugan

I other say, seen there's basis that have backlog answers significant I trend. geographic or a to don't very their area than the signs that is on Chris, by a backlog positive haven't having one negative trend specific the any in significant

the that of across consistency terms of and backlog seeing. how breaks trends and there's that what regions the think we're I down in all

Adam Stedham

one this And better. more of We communicate and model, the that the we'll clarity in we on, get navigate we mind, to keep as this contracts. need global Chris, things model is and to one provide as understand of work things

length in. that, burn of will that of region a point we'll revenue the exactly it's does amount contract what And the contract master of we So, time world don't that in nor exactly for example, get over know, received, the a X all customer, of revenue. client the that's know with

nuances understand a the distribute how most effectively little of bit global accurately those to there's done So work be of considering to backlog geographically, and to contracts.

Christopher Howe

your one great try versus X.X and the helpful previous hear It of very year months. very months of backlog, to That's to to helpful. in I'm the squeeze was X.X And going context more.

look you of of Perhaps contact we through trickle Have on some can with share flipped you're negatives disruptions, how these into maintaining color of disruptions. temporary have and started them the a at back some these As cancellations your to some positive? the some backlog?

Michael Dugan

seen not the significant I that QX. overall would up up. say a I has trend QX jump X% yet revenue Yeah, over mean, was backlog

the our - QX - to at actually If work our turn portion the a year, trend any cycle, not uptick good we're of multiyear in every goes we earned natural of revenue. and down terms our of funding of year the A trend, But month. We again, month it's the the normally. I'm stabilize significant you at from look also the wound-down beginning backlog. kind backlog a seeing throughout contracts. in as backlog is in But from that's of as it lot long revenue that is received per QX, seeing of terms

Christopher Howe

back my for Okay, taking you queue. questions. the Thank great. hop I'll in

Adam Stedham

Thank you.


Our next Jeff question from ROTH comes Martin with go Capital. ahead. Please

Jeff Martin

good morning, guys. Thanks,

Adam Stedham

Hey, good morning, Jeff.

Michael Dugan

Jeff. Hey,

Jeff Martin

of I that? in in-person in that? terms being ballpark can you afternoon initiatives and success to that I you, a suppose. transitioning of scheduled are Are get And from follow-through Good you. contracts percentage virtual? on to seeing to Good talk - to for What a to sense the wanted QX rescheduling. were you rate delayed had some

Adam Stedham

we're But So you seeing for to the would understand it. me how let difficult percentage. be is out very how this I simple answer is no. ballpark and me a playing help

So, working and the for to cancel. we're X, you then, initial Step XXXX budgets we're what classes budget. seeing X Step is as Mike multiyear is changes to the on Xis year? that normal you as then, your Step things touched you to Step try reschedule back do And earlier, have And X that's make schedule. we're versus canceled. our long-term not So, versus anticipated XXXX at budget clients the for XXXX, budget significant following XXXX with looking contract anecdotally, with you a up

to conversations are to normal? budget That to is anecdotally within do going is think So return they are in what seeing terms normal. things of, a we return

quarter? back first the We quarter, scheduling. for time also catch-up return much still in that to think up. to the that. the end a in feel very running normal of for seeing essence, cancellations We we're have the second year And don't How things of catch this is out

for we're that up and XXXX. budget QX set then on ourselves And continuing cycles and to perform for focused in manage really so the

Jeff Martin

helpful. That's Okay.

how environment? second You regards sales the mentioned the the it And be helpful. that on changed that sales pipeline, but have prepared has your on pipeline, from if to if you quarter in remarks would has quantitatively anything

Adam Stedham

is so intact. maintaining sales pipeline Yeah, our relatively

we experiencing can on it's so in huge pipeline. sales the seeing thing intact. incremental any if characterize for We're to steady large a And what normal, jump - one area maintaining steady with seeing the pipeline, particular seeing we're return we'll not and/or relatively a were to I But our follow-up The that that is normal. specifics we're is return spikes that now. you. not What we're sales in - progressive to negative business, for positive

feels we're it experiencing to like currently steady and what returns normalcy. in just increases Now is -

Jeff Martin

And then could. I more one if Okay.

some feel about You you would performing how thought entered XXXX growth. with nice do How XXXX perform the XXXX pre-COVID? perhaps as expectation of organic you

Adam Stedham

really we our giving doing guidance of economic all been but things XXXX that an we to feel And very that has be successful. recovery. from during position We're the favorable not do feel market the perspective, a ourselves right to like to services like we're historically,

with the So in we doing, services. about historically we're very the we're has feel way for the and demand things positive position our reacted the market

Jeff Martin

working on job nice And Thanks. helpful. down the very That's ratio. leverage Great.

for that. you think rewarded should guys I be

Adam Stedham

Great. Thank you.

Michael Dugan

Thank you.


Zach comes [Operator question Riley go Instructions] FBR. Cummins ahead. Please from Our with B. next

Zach Cummins

to solid Yeah. speak Good again, QX. and Adam here Mike, nice the and on you, afternoon, with in congrats results

Adam Stedham

Hi, Zach.

Zach Cummins

this a that lot in you've should of how to made you terms structure, Or this operating in new do I have customers? approach be mean about to place the yeah, of your you've in components now? we different key thinking taken this terms of Adam, now regional - progression changes

Adam Stedham

going region, stuff leadership of for we on some to the in strong lot announced leaders, team have focused verticals the each value have we We to that where a We the though and regions, in some that's be place, made as lot of components clients of we're and what key some we the have do provide in and a feel have need believe we've future. lot to of do. a changes in clients our to our a we

positioned. we well So think we're actually very

the to business the they're and that, a and to regions seeing in COVID clients trying pushing out navigate because In is nuance making well, of we're the as addition our what they're budgeting regional decision world. responsiveness to

regions pushing we're to the aligned they're very the and as well. regions, budget our we're think to responsiveness pushing we decisions So the

Zach Cummins

on year-over-year margin. in the nice seeing I margin that or costs, And excluding aspect, Mike, gross then, mean, Understood. some gross improvements severance restructuring

So sustainable how is about should of continue you plan? progression what upon execute moving think that a somewhat your In forward? we as level to

Michael Dugan

specifics Yeah. cutting, on about but we it, talk any some of right. I cost give can't the you did

our cost we to cost to margin there's portion So in structure be real expect principle guiding That's saw QX able on that - point ongoing gross costs. I'm align that also the percentage in our of quantify part on basis. of of any expansion that expect. that as lower And increase but terms we cuts of there's reduction But a been what and not should improvement continue an within to margins. in scaling we will G&A targeting provide mentioned a year, that that in been cost well permanent overhead revenue, the I in to

Zach Cummins

for forward of what in to Understood. final or and here second quarter the EBITDA, we next half. little you a terms outlook given thinking half perspective? few question already should how next QX a adjusted I about, I I target guess, know of in a And you've terms be for margin expect in kind exceeding your mean with past bit the either quarters, of of me. revenue

Adam Stedham

strategic the the So good We we're canceled the a give but giving situation we lot that. of we're We to comfort for the didn't the give at had who managing made really that feel sense decision we at doing. things. people plan COVID guidance, a guidance right guidance guidance had beginning not we through and ever about what doing more guidance of ease. on feel when get a we're than We COVID We and their their of companies gave we set opposite. went hopefully mind

so we QX have we think that and And demonstrated QX plan. that do have a

that COVID people beyond the think will anticipate continuing give that guidance that the itself environment. through manifest we to We continue COVID, to and are confidence have demonstrate and confidence we don't plan we manage plan. did help processes we it, that But thought we as our results move in the executing to forward-looking in

Zach Cummins

and taking on the Understood. Well, solid congrats again questions, results. my for thanks

Adam Stedham

you. to you. Thank Good to talk

Michael Dugan

Thank you.


to to would the over I like any turn question-and-answer remarks. This concludes back our closing session. conference for management

Adam Stedham

thank you very much. So

respond feel as repeats we a positioned a the And said, we're the post-COVID we We're world many a in future. a to move balance - sheet, in though way. else we about has through We're marketplace if taking front steps. so opportunities history right post-COVID strong with the need do And as is, we're as a marketplace. though to to the excited everyone itself, strong for eager sitting what we us, as just in we but of world well here feel

we call appreciate So about today. the we're position, everybody our excited joining and


The you presentation. conference is Thank today's standing for concluded. now

disconnect. may You now