Hexaware Technologies Limited ($HEXT)

Ladies and gentlemen, good day. Welcome to Hexaware Technologies Limited's conference call for the Q1 CY '26 earnings call. We'll begin today's session with a presentation from the Hexaware management team, followed by a Q&A segment. [Operator Instructions] I'll now hand the conference over to Mr. Niraj Khemka, Head of Investor Relations. Thank you. Over to you, Mr. Niraj.

Thank you, Sean. Hello, everyone. Welcome to Hexaware Technologies CY '26 Q1 Earnings Call. In the call today, we have with us Mr. R Srikrishna, CEO; and Mr. Vikash Jain, CFO. In the course of this call, we will make certain statements which are forward-looking and may involve a number of risks and uncertainties. All forward-looking statements made herein are based information presently available to the management, and the company does not undertake to update any forward-looking statements that may be made in the course of this call. In this regard, there is a full disclosure, which has been included in the investor presentation and the press release we consider it as that. With this, I'll hand over the call to Keech. Over to you, Keech.

Thank you, Niraj. Good morning or good evening, everyone. Thank you for joining. I want to start by continuing our conversation on AI. If you could actually move to Slide 4, and then we are going to come back to Slide 3. So first, let me say that at the end of Q2 results, shortly after our Q2 results, we will hold an AI Day. We will do it in Chennai. So hoping all of you will find time to get there. And in that, we will walk you through our strategy in detail, but more importantly, the reason for Chennai is that for each element of what we talk about, we will present multiple proof points and platforms. So that's shortly after we announce Q2 results, and we will announce a day soon for you. Now our objective is to become a trusted partner for our customers' AI journey in everything they do. And for that, the first thing is that we have a comprehensive range of services, anything and everything that a customer want to do. And we think of that in 3 buckets: AI for IT, AI for business, and both of these are often enabled by a common foundational we are undergoing the rapid pivot and the pivot is in the services we deliver the talent business model and how we charge for ourselves. Now we've identified across this page, about a dozen areas of new revenue opportunities for us. And this is something we will detail out when we talk about this in the AI Day in detail. But let me give some examples now. If you go to the next slide, please. On AI for IT, we have a fairly comprehensive set of services that both address our current core and protecting and growing our core but also addresses several new opportunity areas. Let me give a couple of client examples. We renewed in a competitive bid a large ITO customer. What our platform enabled us to do is to renew the contract at [indiscernible] that became larger, we were able to address 50% more volume and about 10% more revenue. We give an example on software engineering. This an airline client for which they have their core systems on legacy MS. In this case, legacy is like 10 years old, 15 years old, legacy written in Java. What we're doing is to strangulate the core out by keeping just the core, but everything else, we are moving to Agentic. And this includes the velocity of the product. It reduces the cost and improves the maintainability substantially. The 2 most exciting services we launched in this space, in this quarter. One, and we spoke briefly about it last time was what we call a 0 license offering, which we announced in Jan. SaaS is a $400 billion market. I think the last decade, people have gone from building custom software to building the same functionality on SaaS, I think you're going to see a significant reversal of that. We are the first and probably still the only IT service provider to have a focused offering around getting customers to 0 license and independence from SaaS. And this is not just a concept. It is based on a module we built in RapidX that allows us to do what most customers or most of our competition cannot. The second most interesting service we launched is a new generation of our IT operations platform, Tensai. And what we've built is a reasoning ops capability in this. So this platform actually has 3 differences. First, historic automation in the IT space has focused on task level automation. And you keep automating tasks and there is a ceiling. What it did not do is edge cases, complex edge cases because that requires reason. And so we've changed the fundamental approach gone away from task level automation to complex reasoning that looks at the whole of our customers' IT. The second difference is that we've done this with an SLM for enterprise IT. And we built a custom ontology model that enables us to onboard any clients onto a standard ontology model. And finally, because it is an sale, it captures a lot of the inferencing in the SLM rather than going to LLM. And it saves on token costs for customers. but it's also a new revenue and profit opportunity for us to capture a part of the savings in token cost that customers would have otherwise spent. Go to the next slide, please. Now while AI for IT is interesting, it is still smaller in aggregate, everything in AI for IT is still smaller in aggregate than AI for business. In the last few weeks, there are 2 of our clients in different industries that announced agentic AI platforms. In both these cases, one more and one less, they have been involved in helping the customer launch this platform. In both these cases, these platforms are meant to change fundamentally how our customers do business. So let me give a few examples from different industries. For a client in pharma, we are going to redo their entire clinical data management systems with Agentic AI. Now apart from reducing cost of how they do this, One of the outcomes will also be a 0 license because eventually, the platform we use for clinical data, which is a third-party platform will become irrelevant. To give you an example in airlines. For client, we brought the power of multimodal AI and we are together to help engineers that are repairing complex aircraft parts. Each airline spends about $5 million per aircraft per year. And this not only reduces the cost and time, but also substantially improves compliance while doing that. Now [indiscernible] is to show multiple examples for each of our strategies. If we go back to Slide 3, please. In terms of our quarter, we had a better quarter than what we expected. I think the last time we spoke, we said we will have a soft quarter. In general, we said it will be a quarter with contraction. There wasn't much. We had a decent quarter on revenue, but we had a good quarter on profitability. If you recall, we guided for quite a bit lower. We said there will be improvement in the outer quarters. That part is still true, but we started off better than where we expected we will be. As always, our cash management is very strong, and we closed with a strong cash balance of $220 million. Our IT head count continued to increase. We continued to hire more. We had a net headcount reduction that was on account of DPS. And in IT, we had a net head count addition, which is actually 11th straight quarter of head count addition our attrition to remains amongst the lowest in the industry, and our utilization is range bound. Now we added 2 clients at a $10 million pyramid. So this is good growth because these are the clients that help us now get into higher layers of the pyramid. We are now at 34 clients that give us over $10 million. If you go to Slide 7, please. I want to talk about some of the wins. I think we had numerous wins. At the highest level, I spoke a bit about last quarter that one of the more fundamental changes we've made is to substantially improve our hunting. And we won an enormous number of deals in the quarter. So I've put out 8 here. And first, this is -- as always, the deals are a mix of outsourcing, consolidation and transformation needs. So there's a large speaker manufacturer. We have a full-scale ITO plus some BPO and eventually more of both. This will be delivered globally. There's a nice large deal that will start giving us growth from late Q2 and certainly into H2. The biggest positive surprise for us in Q1 was a large global bank that went through a consolidation deal last year. They had spoken about a Phase 2, but we were not sure if that will happen or not. Not only did they proceed on Phase 2, we wound up on the winning side. This is a very large bank with a very large spend, and they are aggressively consolidating. And we expect to see material increases in volume from that in the second half of the year. The third one, again, a European bank consolidation deal. This is an existing client, but there's a pool of work outside of what we currently do, which is one large program, which they were consolidating down to 2 vendors, and we are one of the 2. This is a global professional services firm, not the one that we won in last year. There's another one that initiated a consolidation of a book of work within the quarter, and we closed it within the quarter. We are now sole provider for a service for this client. We will become the sole provider after we complete the transition. One of the really interesting deals is on AI for business. This is a fab-less manufacturer, which is going through a significant boom due to AI. What -- instead of client expanding and investing in more fabs, one of the efforts is how can you improve productivity in each fab and how can you produce more SKUs per fab. And they've instrumented their plants with any number of sensors. But what we're doing is to help build custom models that will improve fab performance. Now that's how it started. We're also doing other normal IT work for them, but the key basis of why we won is our capabilities in being able to build custom models. The large brand name workspace company for which there's an AMS deal that we won on a -- [Audio Gap] also quick 2 examples from recent acquisitions. The next one here, a data center company, and that in and of itself is good because they're growing quite a bit as are all data center companies. This came from our CyberSolve acquisition. We won a deal here on identity-led cybersecurity. And the last one is a large asset manager for whom we will set up GCC. With that, over to you, Vikash.

Thanks, Keech. Let's move to the next slide. So revenue for the quarter came in at $389 million. In absolute dollar terms, revenue was largely flat, driven by volume growth of close to $3 million, and we had an impact associated with calendar and furloughs, which we had called out, which was a headwind of close to $3 million. Now calendar and furlough impacts are seasonal, and we expect this to reverse materially in Q2. That's what we had called out in the last earnings call, too. The volume growth of $3 million is also reflected in the net headcount additions that we did during the quarter and also has a full quarter impact of the hires that we made in the last quarter. License revenue for the quarter was at $11 million, flat sequentially and was tad below our historical quarterly average, which is close to $13 million. On margins, we have aligned our margin reporting to EBIT. EBIT excludes other income and ForEx impacts related to hedging and translation, which is consistent with the market practice. Reported EBIT for the quarter was 13 percentage, up 570 bps sequentially. Normalized for one-timers that we had last quarter, EBIT was flat sequentially. Now even though the EBIT was flat sequentially, there were a few puts and takes. We did get a bit of a tailwind from ForEx of close to 90 bps. There were operational improvements associated with what we are driving in the business that added close to another 50 bps. The 140 bps that we had from ForEx and operational improvements were offset by lower calendar of 90 bps large deal ramp-ups, which we had spoken about the new deals that we are signing in the initial phase are going to have a bit of a margin headwind and in the later part of the year will start improving and the impact of labor code of 20 bps. The labor code impact is the continuing impact of the new wage code, and it will be a recurring item every quarter. There are no one-offs in EBIT in the current quarter. I'd also like to make a specific call out. During the quarter, there was an earn-out reversal associated with SMC acquisition. The earn-out payable towards the CY '25 achievement was close to $23 million. Of the same, the performance achievement actually is leading to payable of close to $20 million. So a large part of what we thought that the asset that we are acquiring is expected to deliver is happening and close to $3 million was reversed out. Now consistent with the accounting practice, the reversal is recorded in other income and does not impact the reported EBIT numbers. Let's move to the next page. Some color on the unit level performance. Starting this quarter, HTPS has been split into professional services and TPP, technology products and platforms. And this split was done to sharpen the strategic focus. TPP, the business unit led by Ravi, while currently the smallest vertical, represents a meaningful growth opportunity for us. In the quarter, 4 of the 7 verticals delivered year-on-year growth, led by banking, HNI and MNC. Sequential growth was primarily driven by HNI and PS. Now sequential softness in select units is primarily a result of the seasonality and a little bit of GSE client headwind. Keech is going to touch on that later during the presentation, but we did call out a bit of a headwind in the last quarter. So it's an impact associated with it. A few units to be called out. HNI, very strong sequential and year-on-year growth. It's driven by large deal ramp-ups and the broad-based growth across Europe, and that is reflected even in terms of the strong year-on-year growth you've seen from a Europe perspective. In our last earnings, we had called out HNI to grow at a pace faster than the company, and we see that play out from this quarter itself. MNC was a drag in the -- because of the tariff and other macros in H1 of last year. We see that coming back to the growth. So there has been a healthy year-on-year growth supported by traction both in existing accounts and new logos, and it has delivered strong year-on-year growth starting H2 of last year. We expect MNC to be a full year growth contributor. The sequential decline, what you see in MNC is driven by seasonality. Q4 demand is a bit higher on account of festive reasons for some of the client -- retail clients and also calendar. Banking, the sequential decline is due to seasonality. However, a very strong year-on-year growth in line with the last few quarters trend, and we expect the vertical to have a strong CY '26. On geos, all geos delivered year-on-year growth. North America performance is after including the headwind from the GSE client, which we had called out in Q1 and Q4 of last year. So it's an impact of that, which is getting reflected in the year-on-year growth. Europe returns to strong growth and is expected to lead the full year growth driven by account ramp-ups and new logos. APAC sequential softness reflects the Q1 seasonality. Now more commentary on CY '26 outlook by unit will be covered later during the call by Keech. On to the next page. We continue to add meaningful clients to our client base. One of the ways we measure broad-based growth is to track the number of clients delivering greater than $10 million revenue. As you heard Keech say that in terms of the greater than $10 million revenues, we have had 2 clients what we have added on a sequential basis. That number is 4 on a year-on-year basis. Next chart. A bit of a highlight on the operational parameters. Offshore mix continues to improve. On the headcount, as Keech called out, even though the overall headcount is a decline of 46, we continue to add in IT and BPS was declined. This marks the 11th consecutive quarter of IT headcount addition. Utilization closed at 82.6%, 180 bps up sequentially, and this reflects the reversal of the seasonal Q4 impacts, both with respect to the furloughs and the leaves that we had called out. Next page. Closing cash balance of $220 million, and the company continues to remain debt free. DSO for the quarter came in at 75 days, which is within the level we would expect. Last quarter, we had called out that the DSO of 67 days was a high watermark at the year-end. On the cash flow, we have changed our cash flow metric reporting in line with the margin metrics. The OCF to PAT on an LTM basis was 125 percentage and will continue to be -- and it's one of the industry-leading, and we expect it to be -- continues to be high in the coming quarters, too. ETR for the quarter came in at 25.5%, and we continue to reiterate our full year ETR for CY '26 to be between 25% and 26%. With that, I'll pass it over back to you, Keech.

Thank you, Vikash. And if you go to the next slide, please. So we're going to talk a little bit about our outlook for the rest of the year. At the highest level, we feel very good about where our business is. We are hitting a phase of sustained growth. Last quarter, we said we've been running faster for a while, but it's going to show up time to -- it's going to take time to show up in numbers. We're running faster, but we had to outrun some of the headwinds. Booking takes time to translate to revenues and there's calendar issues. So we said it will -- the results will start showing from Q2. We are in Q2. And the next quarter, you will see the outcome of it. And when you see the outcome, it will not just be a one-off, and we think it will be a sustained momentum of growth from this point from us -- for us. At a minimum, we are reaffirming what we said last time as the floor of growth of 7.6%. I've spoken about deals already. I spoke about some of them, but I want to tell you that actually, there are quite a number more. So for this slide, we decided we will do 8 deals. There's quite a bit more that we've won. I would say right now, AI in SDLC is the biggest source of differentiation and the biggest source of deal activity. There's a sudden and extreme urgency with clients to demonstrate serious value in SDLC using AI. And that's driving a lot of conversations and that is driving a lot of deals. Even prior to a decision, there are more headwinds in the year. So at this point, we feel like -- so they did decide. We're down to 3 vendors. They're consolidating a large number of vendors down to 3. So right now, we expect stability. We've had, I don't know, 40%, 45% down over the last 4 quarters. That's not going to happen. So we expect stability, not necessarily growth immediately, but we could see growth coming back over a period of time. And we spoke about the other deals. So essentially, what all these deals and a continued strong pipeline means that we are reiterating our growth. We -- the current growth is underpinned by deals already won. And much like we said the last time, there are pathways and opportunities for us to improve this. But we want to first show Q2 results before talking about what more we could do in the year. There are some changes in verticals. HNI will lead growth. Banking will do well. We've been speaking about MNC turning the corner. I think MNC is going to wind up in a pack that will be among growth leaders. It will lead company growth for the year. I think it's a bit of macros and some of portfolio specific issues that we've solved for, and it is back to decent growth. On the other hand, TNT will lag due to macros, primarily due to fuel price issues that impact the airline industry. We've started better on margins than we planned for. But again, like in revenue right now, we are sticking to our guidance of the range of 13% to 14% for EBIT. However, we also want to reiterate when we said margins will improve through the year, especially in H2, and our exit rate will be higher than what it is for the full year. With that, we will stop for questions.

[Operator Instructions] Our first question is from Prateek Maheshwari.

Congrats on the good set of results. I think this quarter went by much better than what you guys expected at the end of the December quarter. I had 2 questions. First, I would like you to kind of expand on the comment that you have made on the Agentic AI being implemented in the SDLC life cycle and you're seeing strong momentum on that. Also, you commented that you guys are now seeing a phase of very strong -- phase of sustained growth now, right? So if we look at your larger peers, they have commented for higher AI deflation in 2026 versus 2025, right? And you guys are talking about better on this front. Plus also, I've seen your mid-tier peers also saying very similar comments. They have a better growth expectation than larger peers. So just wanted to understand, first of all, on the industry level, how do you guys see the AI deflation? Do you guys also see that mid-tiers are better placed in this front? So that's my first question.

Sure. On AI deflation, we called it out last quarter. There was mixed commentary last quarter from our peers that people are saying the opportunities will kind of outrun the deflation right now. We called out even last quarter, there will be deflation. We certainly budgeted for the deflation in our numbers. I don't think the opportunities are significant. And there are new opportunities. I gave an example on 0 license, $40 million SaaS that will get opportunities we've identified...

Keech, sorry, I think we lost you for a few seconds. Just might have to repeat the last 2 lines, we lost you for a second there.

Okay. Thank you, Niraj. Is it better now?

Yes, better.

Okay. So sorry, I don't know when you lost me, so I'm going to repeat a bit. I was saying we called out the AI deflation last quarter. While there was mixed commentary from our peers, we did say there will be deflation and we budgeted for it in our numbers. Second, I do think the opportunities are real. And we've identified 12 opportunities. One example I gave on 0 license. And in our AI Day, we will talk through what those 12 opportunities are and show you what we're doing and proof points for platforms and customers in each of those. AI SDLC, Agentic AI, right now, what is happening is, I would say, over 90% of clients, maybe 95% of clients have bought some tool. But they don't know what to do with it. Their teams have -- they are experimenting with it, but there's a pretty hard ceiling of iron ore, 10%, 15% that they're getting from that. What we are showing is, hey, you don't go chasing the next best tool. Don't go chasing whatever is announced last week. This is what you already have, we are able to demonstrate to clients how they can materially up the productivity by better use of tools, changing the SDLC process and reconfiguring what squads should look like. And we are not doing this in isolation. We're doing this at scale. And let me give you an example. in our FS vertical, we have 75 delivery AI champions that work across all of our clients to continuously deliver new projects using AI. Now the impact this has on us is that we're certainly reducing the volume of work in our existing lanes. But because we're doing this proactively because we're able to demonstrate better outcomes than our peers, it places us in a great spot to gain market share in SDLC.

I had another question on your GSE client consolidation program. So congratulations on getting in the top 3. And I know you said for some stabilization there. I just wanted to understand what is your confidence level that probably this client could also start growing in this year itself? If you could expand on that, please?

I don't think they'll grow this year. I think it will be next year, okay? They could be moderate, plus or minus, but that's normal course of business. We don't expect anything significant this year.

Okay. And last question is for Vikash. So Vikash, I know you guys expect a bit of improvement in the margins for the full year. And there's also, I think earlier on, there were some transformation costs that would have gone away, but you guys need to invest on that. So I just want to understand, so right now, as Keech said, right, you guys have got 75 champions, right? We are seeing similar kind of setups happening with other ITs as well, right? So do you think the margin expansion that you're getting from the automation or AI implementation right, is that leading -- going into investments in such as these things where you're probably getting much higher caliber team to probably go and disrupt some of your existing business to win new ones?

Vikash, do you mind if I address that at least one dimension of it and then you can add to that, okay? So I think first of all, say that 75 we spoke about is for one vertical. That's for our FS vertical. There are similar in each vertical, right? I will say 2 different things as it pertains to structural profitability, and then Vikash can add more specifics here and now, right? One, I think we are seeing from clients a willingness of about 10% to 15% gap between productivity gains and economic gains. Now that 10% to 15% is from Hexaware and token cost is outside and AI costs are outside. In that 10% to 15%, I think some of it will be higher cost for us, better talent, higher cost of talent that will be deployed. Some of it could result in improved profit pools. But the early views I am seeing clients are okay conceptly saying, Hey, you give me 40% productivity. I'm only expecting 25%. I spoke about 3 differences -- differentiators in our new Tensai reasoning ops platform. One of them is that it's an enterprise custom LLM that we've built. And what that does is to trap the inferencing at the SLM, not 100% of inferencing, but it will trap maybe 80% of inferencing at SLM and 20% or so will still go to LLMs. But that's a savings for clients. And the model we're doing is to charge for a percentage of what customers will save on inferencing with LLMs. So that's a second structural source of potential improved profitability in the future.

Yes, I was just rounding up the whole conversation with the fact that from a full year perspective, we reiterate our margin guidance of 13% to 14%. Even though there are aspects which are leading to improved profitability, we continue to invest in the business because that's what is important from a growth perspective.

Our next question is from Anmol Garg.

I have a couple of questions. One more of a broader question for Keech. Currently, I just wanted to understand what kind of AI models are we using in our delivery. And currently, what is the understanding between us and the clients on who bears the token cost, particularly when it comes down to the outcome-based contracts?

So first off, I think it depends on what service we're delivering. And I will talk about AI for IT and AI for business differently. Let's start with AI for IT. Even within AI for IT, I think there is a difference in fundamental approach between SDLC and in IT operations. And I will say SDLC and data are somewhat similar. So you think of SDLC and data engineering on one pool and IT operations in the second pool. In IT operations, I think there is more willingness. This is consistent with what has happened in the past of giving out holes full pieces of operations through firm outsourcing contracts that includes baked in future productivity benefits from AI. Now like I explained, in our new platform, we are actually providing the inferencing, not 100% of it, but a good chunk of it, which will be lower than inferencing from LLMs. The inferencing that does go out to LLMs, the customers still pay for it. On SDLC, most large customers for most programs and not for all. They kind of -- it's mixed themes. It is client and us, and they are a significant part of the large programs. So they kind of design and tool chains. We help them do it. And they own the licenses and they own the total cost.

Understood. Understood. And secondly, more question for this quarter. So sequentially, we have seen our license revenue at $11 million, up from $7 million, and there were some incremental revenue, which came in from CyberSolve as well. So organically, when it comes down to services, how much decline was there in this particular quarter? And how much of that was an impact from particular GSE client?

So -- sorry, go ahead, Vikash.

Yes. So the license sales for the current quarter was flat. So what we had from a sequential basis was the same license sales in the current quarter as in the last quarter. As I highlighted that the volume growth in the current quarter was $3 million, with close to 2/3 of that coming from the acquisition what we did. The balance of it was organic. In fact, on a gross basis, the organic volume growth was significantly higher, but that was after absorbing the headwind from one of the GSE clients where in the last quarter, we had called out that there was a bit of a ramp down in the month of March. So it had a full quarter impact from the current quarter.

Right. And Vikash, just continuing on the same. So for the -- as per our guidance of 7.6%, which is a floor right now for us, the requirement or the CQGR requirement is nearly about 4.5% for the next 3 quarters. And given that fourth quarter is usually a seasonally weak quarter, the bump up have to happen in second quarter and the third quarter. So what kind of deals do we have, which will be ramping up, which could give us that kind of growth over the next couple of quarters?

So Keech already spoke about the deal wins, right? We announced close to -- we spoke about a few deal wins in the last quarter, which has started wrapping up. Part of those ramp-ups actually got reflected from a Q1 results perspective in the volume growth that I spoke about, net of the GSE decline. And the other deals that we have signed in the current quarter, both of this added with the seasonality benefit, which we'll get from a Q2 and Q3 perspective are the ones which are going to help us deliver those numbers. And as Keith called out, like in any case, is a ramp-up of the existing deals and deals which are already won, plus the new deals which are in the pipeline. Our pipeline continues to be very strong, the conversion of those pipelines and additional revenues from those deals are the ones which will help us in terms of contributing to the current year growth.

And our last question in the queue right now is from Dipesh Mehta.

A couple of questions. I think continuing on the prior question. Do you think usual seasonality of December quarter can be negated based on the deal pipeline which you have as well as ramp-up plan which you have, which will, in a way, lead to more evenly spread growth across 3 quarters? Or how one should expect, let's say, growth trajectory this year, considering all the seasonal pattern plus the deal ramp-up plan or pipeline which you have? If you can give some sense on that. Second question is about the 12 opportunities which you indicated, which can provide you confidence about growth on a medium-term perspective. Can you give some sense about TAM? And based on these 12 opportunities, what kind of cannibalization on existing business, let's say, expected because some of them might have some cannibalization impact. And last question is on vertical perspective. I think you indicated some of the factors affecting this quarter vertical-wise. But can you give some sense about some of the puts and takes which you are expecting in some of the vertical commentary?

So there are 3 questions. On the first one, I just want to say that what we are hoping to demonstrate from Q2 onwards is a sustained kind of growth, right? It's a result of a number of things that have changed or we've changed or in some cases, macro is improving like in manufacturing. So no matter kind of what this year looks like, I think you will see growth and accelerating Y-o-Y growth through the year. Now in terms of patterns for the quarter, I think there are 2 different things. One is no matter what, Q4 will be worse than Q2 and Q3 because of seasonality. But independently, can Q4 kind of be positive in of its own? It could be. But we're not saying that. We're saying, hey, you kind of model how you model, I think you will see we will be okay for the baseline we've called out in Q2. The second question was on the AI services. Sorry, Vikash, keep me honest, was that the second one?

Yes.

The 12 -- these are not the cannibalization. These are not like, let's say, reengineering AI and SDLC or reading IT operations. That's a cannibalization part. These are what we think will be new opportunities. In SDLC itself, 0 license, legacy modernization, which we spoke a little bit about last time. And again, when you come to Chennai, we will show you multiple examples of that. It is things like observability, setting up a foundation and a foundry for AI. There are -- all of this 12 are new revenue streams. They're not cannibalization. And I think I mentioned in the past that the core of our strategy is agility. And so we are kind of pushing ourselves to launch one new service every month. We either completely launch new or relaunch or redo some of what we've done in the past, and we've thus far been sticking to that. So this dozen that we spoke of will get added to over time. The third question, remind me, what it was.

Vertical commentary.

Yes. So I think just in terms of what's changed, I would say, from our last commentary, I think manufacturing will be better off than what we said last time and travel will be worse because of macros. And we will kind of make up for the travel downturn macros through improvement elsewhere.

Thank you, ladies and gentlemen. That brings our Q&A session to a close. I will now hand the conference back over to management for closing comments. Over to you.

Thank you all. Again, I just want to once again extend the invitation. We will probably speak once more the quarterly call Q2, but it will be shortly or immediately after that. So please make time to visit us in Chennai next quarter. Thank you.