Capgemini SE ($CAP)

Good day, and thank you for standing by. Welcome to Capgemini Quarter 1 2026 Revenues Webcast and Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Aiman Ezzat, CEO. Sir, please go ahead.

Thank you. Good morning, and thank you for joining us for this Q1 2026 revenue call. I'll be joined today by our CFO, Nive Bhagat. So the group had a solid start of the year, actually slightly better than what we anticipated. We generated revenue of EUR 5.943 billion which represents a year-on-year growth of 11% at constant exchange rates. Now this reflects robust underlying momentum in line with Q4 as well as the expected contribution from the acquisition of WNS and Cloud4C. Bookings were up 6.2% at constant exchange rates, reaching EUR 6.54 billion, which demonstrate a strong commercial momentum. Now growth rates in Q1 are fueled by solid organic trends, complemented by the scope impact of WNS and C4C. From a sector perspective, all major sectors are growing when excluding acquisitions, strong underlying growth in financial services, public sector and TMT, supported by AI-led transformation. From a dual standpoint, the stronger traction is in North America and in the U.K. backed by solid underlying demand, while Continental Europe, including France, is gradually recovering. Finally, from a business perspective, both strategy and transformation and application and technology have maintained their good momentum. Operations & Engineering grew by 25%. Beyond the scope impact of WNS and Cloud4C activities, it's important to note double-digit like-for-like growth for our digital business process services, which confirm that this remains the fastest growing segment in our business. And what's driving our performance this quarter is very clear. It's focusing on clients' large-scale transformation programs. Clients are accelerating AI adoption and the conversation have moved to agentic AI to transform end-to-end operation and processes. And that shift is forcing a CEO-level agenda around modernizing core technology stacks, data foundation and operating model. So AI can scale safely and deliver measurable impact. So in this context, we are seeing strong momentum around agentic AI driven by clear trends. First, AI is now simply part of every client conversation. Clients are looking at AI, either to drive cost efficiency or to improve business outcomes such as faster delivery, higher reliability, stronger compliance, higher customer satisfaction or better overall operation performance. Second, clients are clearly stepping up the pace of AI-driven transformation. We see a real shift from isolated use cases and stand-alone tools to AI embedded into end-to-end core processes. To enable that, they have to modernize the core technology stack. That's why we increasingly brought into big architecture discussions at scale, which now includes C-level executives around the table. Now we are well positioned to capture this demand. Our offering portfolio, now enriched with intelligent operations is leading to some noticeable deal in Q1. Just to mention a couple of them for U.S. utility provider we are designing, developing and scaling an agentic AI operation platform spanning across customer operations, supply chain, support function and issue resolution. This platform represents a next approach to how large organization harness AI, not as a standalone tool, but as an integrated layer embedded directly in employees way of working. Also for European banking clients, we are replacing fragmented processes, notably onboarding and due diligence with Agentic end-to-end automation. This will allow our clients to reduce its operational efforts strengthened regulatory compliance at lower cost, reinforce data quality, achieve faster processing times and a more scalable operating model, thus realizing measurable business value. So on AI, the message from clients is very clear. It is we need to see measurable business impact. And to get there, they need to run AI at enterprise scale, which implies getting the foundations right, including data quality infrastructure readiness, governance, cyber and trust. And if there's one critical element that people tend to underestimate, it is the human side. This is about people working effectively with AI to ensure that we capture the value at scale. And that's exactly where we make the difference. We are one of the few partners selected by OpenAI, Anthropic to help enterprises capture value from AI because delivering value from AI requires a much broader set of expertise, from strategy and transformation to technology and deep architecture through data and AI engineering and operations. And this needs to be complemented by deep industry knowledge and real domain process expertise. In parallel, we're also accelerating our own AI transformation with 4 streams, all equally important solutions, workforce upskilling, delivery and operations. We are developing, for example, solution that are AI by design, whether we're talking about SAP implementation or SDLC or others. And the point is simple, with a disciplined end-to-end value approach, we consistently turn AI investments into scalable and sustainable value, both for our clients and also for Capgemini. A quick note on defense. We continue to see stronger momentum in defense, driven by 2 structural trends, a sharp ramp-up in defense manufacturing across Europe, including new entrants from civilian industry, and a growing demand from European ministries of defense for software-defined digitally enabled solution to modernize systems and architectures. Now this creates an opportunity to partner in building sovereign European solutions. Our defense business is scaling across 3 areas, helping industrial players scale manufacturing, especially civilian entrants with the digital and systems capabilities required, accelerating innovation platform to develop, integrate and deploy next-generation defense technologies faster and expanding our role in cross-border programs by addressing demand for new air and ground system architecture across Europe. Together, these trends transform our position as a key partner in Europe's defense ecosystem, combining scale, digital expertise and cross-border delivery. Now moving on to the outlook. So Q1 was solid, with underlying growth in line with Q4. For Q2, we expect around 10% constant currency growth, including approximately 6.5% from inorganic contribution. The group's financial target for 2026 are unchanged, revenue growth of around 6.5% up to 8.5% at constant exchange rates and operating margin of 13.6% to 13.8% and on organic free cash flow of around EUR 1.8 billion to EUR 1.9 billion. Our assumption on inorganic contribution and the impact of the Fit for Growth initiatives are also unchanged. And with that, I will hand over to Nive.

Thank you, Aiman, and good morning, everyone. Let me start with the top line. Q1 2026 represents a solid start to the year. Group revenues came in at EUR 5,943 million, slightly ahead of our expectations, up 7% year-on-year on a reported basis. Underlying trends remain steady across the group, and I'll come back to that in a moment. At constant currency, revenue growth was 11% in the quarter, including around 6.5 percentage points of scope primarily from the WNS and Cloud4C acquisitions. As anticipated, foreign exchange was a headwind in Q1, with a negative impact of 400 basis points. Based on current exchange rates, we expect FX to be less of a drag going forward with an impact of around minus 1 to minus 1.5 points in Q2 and broadly similar for the full year 2026. Turning to revenues by sector. We saw a solid underlying performance in Q1. On a like-for-like basis, financial services, TMT and the public sector continue to grow at good pace. Manufacturing saw a modest improvement, although it remains subdued. This underlying momentum was further supported by the contribution from WNS and Cloud4C acquisitions with the impact most visible across Financial Services, Energy & Utilities, Services and Consumer Goods & Retail. At constant currency, Financial Services was the strongest sector growing by 21.9%, followed by Services at 17.4%. All other sectors delivered growth of around 10%, broadly in line with Q4 2025, apart from Manufacturing at 3.5%. Revenues by region. Looking at the business geographically, momentum remained strong in Q1. On a like-for-like basis, North America and U.K. & Ireland delivered another quarter of robust growth. France showed improvement, while still slightly negative, and the rest of Europe remained broadly flat. As in the previous quarter, the scope impact from WNS and Cloud4C acquisitions was most visible in North America, the U.K. and Asia Pacific. At constant currency, North America grew by 20.7%, driven by strong performances in financial services alongside solid growth in TMT and Manufacturing. U.K. & Ireland delivered 21.7% with strong growth across almost all sectors. France declined by minus 1%. Growth in Financial Services and Energy & Utilities was more than offset by weakness in consumer goods and retail and the public sector, while Manufacturing, improved, albeit remaining slightly negative. The rest of Europe grew by 1.7% with strong public sector performance and the return to growth in consumer goods and retail more than compensating for ongoing manufacturing softness. Finally, Asia Pacific and Latin America recorded the strongest growth at 26.9%, primarily driven by Financial Services, with solid traction also seen in Consumer Goods & Retail and Energy & Utilities. Moving to revenues by business line. Strategy & Transformation delivered growth of 6.2% at constant exchange rates. Applications & Technology Services, which is our core business, posted a 4.8% growth. Operations & Engineering Services grew by 25.2%. This reflects solid underlying growth across the portfolio, further reinforced by the contribution from the WNS and Cloud4C acquisitions. At this moment, I would like to highlight 1 important point. Digital business process services maintained double-digit growth in Q1 on a like-for-like basis across both Capgemini and WNS. This clearly confirms the strategic rationale and the strong commercial traction we're seeing in the space. Turning to bookings. We recorded EUR 6.1 billion in Q1, up 6.2% at constant currency. Our book-to-bill came in at 1.02, which is slightly above our 10-year average for the quarter. What is particularly encouraging is the continued momentum we're seeing in large transformation deals and longer-term client commitments. This is especially evident around areas such as AI, intelligent operations and defense which remain key drivers of demand. Now before moving to headcount, a quick update on the Fit for Growth initiatives. You will see the bulk of the 2026 fixed charges in H1 with the benefit starting to come through in H2 of this year. Finally, a quick word on headcount. We closed the quarter at 421,000 employees, up 23% year-on-year, reflecting the integration of WNS since Q4 last year. Compared to year-end 2025, headcount is broadly stable, down around 0.6%. Offshore leverage stands at 66%, up 8 points year-on-year with the WNS integration and flat versus the end of 2025. Since first January 2026, our last 12-month attrition rate now includes WNS and stood at 18.6% in Q1. On a like-for-like basis, this represents a 1.2 point decrease year-on-year. On that note, Aiman, I will hand back to you for the Q&A.

Okay. Please go ahead with the Q&A instructions.

[Operator Instructions] Our first question comes from the line of Sven Merkt from Barclays.

Congrats on a good quarter. Maybe first on the outlook for the rest of the year. The full year guidance implies a slowdown on an organic basis. I know you normally not raised the guidance at the Q1 results, but how should we think about the implied performance for the rest of the year? Is there a conservatism baked in? Or is there any other reason you would point out? And then secondly, I noticed that application technology sequentially slowed. Can you just provide us a bit of color what drove this?

Okay. Listen, as we said, we don't trade at the end of Q1. We don't see a change in the environment so far. So it's -- we'll review guidance as required at the end of H1. We gave you some visibility on Q2. And so far, the -- we are quite confident for the rest of the year. On the application and technology sequentially slowing down, there's nothing really to flag there specifically. I mean it's not a trend. I think it could be some fluctuations or start-up of contracts. But I mean, from my perspective, there's nothing special to flag.

Okay. Perfect. And maybe just rephrasing maybe the first question a little bit. I mean when we're looking at the Q2 guidance that you have just given us, it's also kind of a slowdown versus Q1. Is there anything you would point out there, any puts and takes we should consider when we're thinking about Q2?

Really nothing special. I mean again, it's pretty much in line with Q1, we see around. We'll see where we end up. I mean we're not going to give guidance of plus or minus 10, 20, 30 bps or something like that. So we're not in that level of detail. I think it shows that we continue with a similar momentum going into Q2. There's no change in the environment for us. I mean we don't see a slowdown. We don't see clients scaling back. We don't see things getting canceled or delayed. For me, there's absolutely no change in the environment right now.

Our next question comes from the line of Balajee Tirupati from Citi.

Firstly, congratulations on my side as well. And 2 questions, if I may. First on competitive intensity, with uncertain macro and many of and many of our peers seeing growth pressure, are you observing any incremental change in competitive intensity? And second question on increasing organization's AI investments. Are you seeing acceleration of AI projects moving to production as well as new AI capabilities coming, changing your clients' expectation of what they can achieve with the technology and altering their tech investment decision?

So on the competitive intensity, honestly, I don't see a change. I mean it has been quite competitive for the last 3 years, I would say, because there's been less growth overall. But I cannot say that there's been any change in competitive intensity from our perspective. Clients, they're not yet into production. But I think the realization is that we're moving away from a proof of concept and use cases, individual use cases to understanding that if you want to see a real benefit coming from AI, at enterprise scale, you really have to start looking at fundamental transformation, okay? And that's really what we start embarking on. I mean we have big discussions and projects starting with clients and really, you have to reconceive your tech stack. It's a different one in the agentic world. You have to start putting in place the components to be able to run AI at scale. I mean you see that -- I mean, you're creating a digital -- it's a fundamental change going from Gen AI to agentic AI. Agentic AI is really making the difference. But you're creating a digital workforce, you're going to have to be able to manage it. I mean we see the consequences, people start to see some of the consequences. If you don't put the right guardrails, it's not only about defining what agents should do, but it's about clearly defining what agent should not do. You have to define the red line. So it is complex. It's a complex work with a lot of potential, but it requires significant transformation. And I think clients start to really realize that and I think as opposed to some of the tech work we used to do in the past, here, we're doing transformational work that's clearly visible. When we implement something, we see directly the results. It's not something -- we're not going to enable something to happen. We're actually making things happen. So it becomes visible. And clients are expecting that visibility and we're expecting to see that impact. So this is not a tech budget. You are fundamentally transforming companies. If you're hyper automating processes and improving fulfillment rate, this is what's financing that investment. It is not the tech budget that's financing that investment. So we have to -- we need to start shifting around where the money to do this work is coming from. It's not coming from the tech budget.

Our next question comes from the line of Laurent Daure from Kepler Cheuvreux.

I also have 2 questions and also congrats for the first quarter. The first is on the large transformation program you were alluding to, I was interested to see if you see a difference by regions. And more importantly, if you compare the gross margin you could achieve on such project, are they comparable to the rest of the business or higher? And my second question is, I know it's early stage, but the partnership you have with OpenAI and Anthropic, on typical contract, how do you share the value with them? How is the split between what the customer will pay to the LLM and what you will get in revenue?

Okay. So on the first question, we -- there's definitely more traction in the Anglo-Saxon world today than there is in Continental Europe, right? It doesn't mean that there's no activity in Continental Europe. It's starting. But the urgency seems higher definitely in the U.K. and the U.S. than it is in Continental Europe, okay? But we see good programs as well in Continental Europe. So I think it will accelerate. But yes, there is a lag as usual from that perspective. On the gross margin on this type of deal, Laurent, I think all these things are too early. I mean, as I said, the commercial models are evolving bit by bit. We are at the early stage of some of this transformation. What -- the way I would look at it is different is the potential for value creation is much higher. And it is visible. The difference here is that the value creation is visible. If I go and transform an end-to-end process with agentic, I see the results immediately. It's not I'm developing a technology that's supposed to enable a business, which hopefully will deliver results. So it's measurable, it's visible. And that, of course, will provide opportunities as we deliver to consider the fact that, yes, we should be able to deliver higher gross margin if we create significant value. On the value sharing on partnership with OpenAI, Anthropic, remember, at the end of the day, what they're looking for is consumption, okay? Tokens. This will be the revenue model. We are looking for creating value through services. So we still -- we are definitely not at all on the same driver. I'd say I put OpenAI closer to a software company in terms of what they're looking for in a certain way as opposed to us, which as a service, which are looking to deliver revenue from the transformation. So we are complementary. It's not really a value sharing model, but there's a source of value, and we are sharing it.

Our next question comes from the line of Frederic Boulan from Bank of America.

If I can follow up on the kind of pricing discussion. Is there any area where you see some price pressure for more efficient delivery supported by Gen AI? How do you think about the opportunity around some traditional software implementation? Do you see some faster and cheaper delivery on specific process, say, kind of SAP cloud transformation? How do you think about the opportunity around those processes?

So I mean, I don't think there's any price pressure. I mean there is, of course, listen, if you do managed services deal today, clients have some anticipation in terms of some of the benefits we're going to be able to deliver from deploying Gen AI or agentic AI as part of our delivery, it's nothing new. It has been the case now already for several quarters. So I don't consider it being a price pressure. I think there is an anticipation that's different already, you know very well, every time we do managed services deal or managed services renewal, the client expect some cost reduction. So I don't call it as price pressure, I call it as being improvement that's expected and hence, you basically have to deliver more for the same amount of money. On software -- on traditional software implementation and things like that, yes, I mean, we are redesigning solution delivery, of course. So if you look at SAP, for example, we are reinventing how we deploy SAP. And we are embedding, of course, GenAI and agentic AI as part of that. And part of it, yes, we're going to be able to do that faster in a more efficient way and hopefully at a lower cost as well. So it is part of what we do. But now we're doing it by design before we are giving tools to people telling them, try to make it better. And now we are designing how things should happen for us to be able to deliver more efficiently. And we are redesigning a number of our solutions by embedding as expected, agentic AI and GenAI as part of the design of the solution. So it will all be by design versus hoping that people by using some tools will be able to become more efficient.

Okay. And if I may have a follow-up. Q1 growth still very healthy versus the rest of the industry. Any specific area you can call out that can explain that outperformance? I mean is it an exposure on some specific end markets where you have stronger momentum? I mean any specific area you can flag?

I think it's really -- as you know, we have been focusing on execution, especially focusing around how we can really drive value from AI, what are the fundamentals we need to tackle, really thinking strategically about what really needs to happen there that's not just about use cases or basically, how do you say, staffing a few people to go and do some high-end work. But we really think about transformation and what do we need to line up to be able to drive this transformation. And I think it's starting to pay off in terms of credibility, in terms of getting embarked in some good large-scale transformation programs. And of course, more to come around that when -- at the Capital Market Day.

Our next question comes from the line of George Webb of Morgan Stanley.

A couple of questions, please. I mean, firstly, you mentioned the slightly better-than-expected Q1. Where did you see that outperformance versus your expectations prior to the quarter? Or was it pretty broad-based? And then secondly is kind of a twist on some of the questions that have already been asked. With regards to the latest waves of agentic AI coding tools and the innovation that's come out over the last few months, are your developers seeing any kind of step changes with regards to the ability to reduce delivery time lines and effort in certain project types? Or are those kind of feeling more like incremental improvements than significant ones?

So on the outperformance, I would say probably where we came a bit ahead is in U.K. and North America. On the agentic AI, yes, I mean, we see a difference, but it is not across the board. I think what is difficult is basically what's happening at scale. So yes, there are some areas where we see a real difference, but there are some areas where we still find it complicated to be able to deploy. And also, it depends on client environment and clients themselves. Some clients are still pretty hesitant around some of these. So it is a mixed bag, but where we're able to really deploy well and we're able to have a clean environment with a proactive client and good working environment and the perfect skills, yes, you get really -- you can start to really see some good impact, and that's positive.

Our next question comes from the line of Mo Moawalla from Goldman Sachs.

Congrats on the good performance in Q1 also relative to peers. I had 2. Firstly, could you talk where you are on the extraction of some of the revenue synergies on WNS? I know you sounded quite optimistic in terms of the pipeline, but where are we? I know it's still early in the year. And to what is this also kind of driving the connection to some of these kind of larger transformation deals that you're talking about? And then secondly, just in terms of sort of gross margin evolution, there's obviously pressure on the customer side, you talked about kind of agentic AI now starting to go from pilot to more mainstream projects or larger transformation, how should we think of the kind of impact of this in terms of the gross margin? And really, I would be interesting to get some perspective from prior cycles. So for example, when you went from on-prem to cloud, there was a sort of perception of, look, IT services are not going to be needed. But in the end, digital and cloud drove that big mix improvement. So curious to get your perspective on that kind of more medium-term evolution of the margin as agentic goes more mainstream.

Okay. So listen, on revenue synergies from WNS, as you know, we are quite satisfied so far in terms of some of what's being generated. The pipeline is pretty strong. As you know, it takes a bit of time to shape some of these new larger deals, but they are there. Some very large deals are being shaped up on the back of our intelligent operation concept. So I mean, I'm -- frankly, I'm really quite satisfied, and it's really working well. And we're really generating double-digit growth on the legacy Capgemini part and the WNS part. So -- and it's quite profitable. So I think it's so far, so good from that perspective. On the gross margin, listen, again, for me, you have to think about it is the ability to be able to have improvement in gross margin is coming from value creation, okay? If you take the example, when we move to offshore, the reason why there was margin expansion because there was so much value being created that the value could be shared. And here, I think with the agentic AI transformation, we are on the brink of something that's similar. If you're really able to deliver the value that is expected, there's enough value creation for us and the client to be able to share into that value, okay? If it's an incremental improvement, it gets squeezed. But we are at the early stage. So the value is not yet delivered. There's a perspective about delivering the value, but we haven't yet delivered the value at scale. But if you're able to deliver the value at scale, it will accelerate the deployment and clients will be more willing to give part of that value away to people who really help them achieve it. And that's why we're trying to position ourselves. It's really showing that the value can be created. And I insist, this is a business transformation. It is not a technology transformation. It's a business transformation, supported by technology. And what makes it different is that the value we create is visible, tangible and measurable, okay? It will not come in the future as a consequence of technology deployment. And I think that makes a whole difference because we are associated directly with visible, tangible value creation. And I think that puts us in a great place to see how we can share better in terms of that value creation.

Our next question comes from the line of Nicolas David from ODDO BHF.

Congrats for the very strong start to the year. I have 2. Actually, the first one is regarding the cyclicality of the sector in the context of current macro, which is as you pointed out, currently not affecting the business, but let's say, that if the conflict in Iran continues, maybe it could have an impact. Do you think that this time the sector could be a bit more or a bit less cyclical than previous cycle, macro cycle given that discretionary spending is already at a very low level and there is a sentiment of emergency from client to invest in AI? Or do you think that it's going to be cyclical like it has always been? And my second question is regarding Continental Europe. You are mentioning improvements there, but it's not really visible in the constant currency figures. So is there something that we don't see in the CC figure that you want to point out showing that there is real improvement, notably in terms of other Europe. And we have seen some of your peers in that region, rebounding a bit faster than you. So I know that you're overexposed to automotive, which is a tough sector, but do you think that you can take some action to revise the growth faster. Notably Manufacturing also, you point Manufacturing as a growth driver in the U.S., the drag in Europe. So why is there such a difference between the 2?

Okay. So on the cyclicality of the sector, I mean, listen, I don't see any signs of anything slowing down so far. And yes, the urgency around the AI investment is what was going to carry the sector growth, okay? So right now, I feel quite comfortable. We haven't seen any early signs of things slowing down. So that's positive. On Continental Europe, listen, again, when I look at the details, I look at our different countries, the underlying trends, we are improving. France has improved. France would end up getting back to growth. I remember we were at minus 4% or 5%, 2 or 3 quarters ago. So yes, no, things are improving. In part, we have some unfavorable mix that basically playing against us. Auto is still negative in Europe. So we take auto. It's positive in the U.S., it's negative in Europe. Still negative, so it's still a drag in Europe. It's fading away but it's still a drag. On the other side, aerospace and defense, for example, is now quite positive, same thing on Life Sciences. So we start to see improving trends in Europe. It's slower because of the mix and the size that we have. And then we have 1 or 2 areas of weakness that we're trying to address in some countries, specifically in the next 2 or 3 quarters. But overall, I'm quite confident on the fact that Europe is rebounding and that we will see a better growth rate going into H2.

Our next question comes from the line of Michael Briest from UBS.

Yes. Nive, I think you talked about margin trends for the year being back-end loaded. Can you give a bit more sort of context around that? I'm assuming that WNS has a sort of positive impact on the first half, but how should we think about the seasonality of margins this year given the Fit for Growth program, maybe having more of a second half impact? Is the historical H1, H2 sort of trend something we should look for? And then WNS, I think, historically got about 20% of its revenues from travel and leisure and shipping and logistics. And I appreciate your comments, Aiman, about broader demand seems constant. But anything you could say about the profile of customers in those sectors and whether you're expecting any sort of challenges in Q2, and that's why you're looking for a slight deceleration in organic growth?

Okay. Michael, let me address the first point. So I think I first want to reiterate that we are confident about our full year margin guidance. I just want to set that out upfront. Now as far as H1 is concerned, we expect the reported margin to be broadly in line with last year. And coming back to your point on seasonality. The seasonality is pretty straightforward. The benefits from the Fit for Growth initiative will be visible in H2 and not H1. And I think to further sort of mention that in the context of the Continental Europe point that was asked earlier and Aiman made, we do have some bench that continues to sort of build up in Q1. So it's like a bit of a headwind there, which we expect will then get sorted and resort in H2 as we go through from our Fit for Growth initiatives. So sort of that gives you a perspective of essentially how we're thinking about margins.

So the revenue from travel and leisure, no. frankly, we don't see -- we haven't seen any slowdown so far. There might be small fluctuation, but there's nothing that's significant that would impact the revenue at this stage, Michael.

And maybe just to confirm, you're saying stable on last year's Capgemini stand-alone margin for H1 because WNS obviously was a higher-margin business. You're not saying pro forma.

I'm saying on a like-for-like basis, yes.

On a like for like basis.

Meaning the full Capgemini, Capgemini plus WNS. That's what I mean.

Our next question comes from the line of Ben Castillo-Bernaus from BNP Paribas.

Just 2 for me, please. Just one on bookings, up 6%. Could you just give us a sense of the contribution from WNS and Cloud4C in here. I'm just curious on the bookings front, how is that relative to your expectations? Did you see any impact in late March from the Middle East conflict? And second question just on gross margins, please, again. You mentioned last year, Continental Europe was a drag here. We're seeing some stabilization, some improvement. How confident are you that last year was a sort of low point for gross margins and perhaps some thoughts on the trajectory from here?

Okay. Sorry. So on bookings contribution, I mean, at this stage on WNS, we take bookings equal revenue. So when we make acquisition for the first couple of quarters, we don't track direct bookings, and we take booking equal revenue because most of the time when some of these companies don't really track bookings directly the same way we do them as we have a different way of doing it. So it will be -- we start tracking real bookings from WNS starting in Q2. But overall, taking the concept of bookings out the business expectation coming out of WNS and the growth remains pretty good. So what we have in the pipeline, the deal we're signing will continue to fuel growth in the coming quarters, if that's really what was underlying your question. On the gross margin -- sorry, what is a -- yes, I'm not sure about the low point of last year on gross margin, I'm not sure I understand the question. If you can rephrase it, please.

Sure. Yes. Last year, gross margin saw a little bit of pressure. Our understanding was that was really driven by the softness in Europe. And we're now starting to see Europe stabilize. You're talking about some improvement there. So I guess with that in mind, should we think that last year gross margins were low point and it should trend higher from here?

Yes. We should see improvement as we deploy our Fit for Growth program. Okay. So we should definitely see improvement in H2. It's a bit early to talk about the one in H1. But for the full year, we should see improvement as fit for growth to get deeper.

It kicks into H2 more than H1.

Thank you very much. That was the last question. We wish you a great day and look forward to interacting with you pretty soon. Next time, Capital Market Day, May 27. Thank you. Bye-bye.

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