Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the Endava second quarter fiscal year 2022 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question, during this keypad . If you would like to withdraw your question, again, press star one. Thank you. Laurence Madsen, Head of Investor Relations. You may begin your conference.
Thank you, operator. Good afternoon, everyone, and welcome to Endava second quarter fiscal year 2022 conference call. As a reminder, this conference call is being recorded. Joining me today are John Cotterell, Endava's Chief Executive Officer, and Mark Thurston, Endava's Chief Financial Officer. Before we begin, a quick reminder to our listeners.
Our remarks Q3 fiscal year 2022 and for the full fiscal year 2022, and statements regarding our perceived opportunities and anticipated future growth and geographic expansion, our expectations regarding digital transformation of businesses and industries and other industry trends, the necessity of digital transformation for many companies, technological advances, our expectation for future partnerships and abilities to expand our existing relationships, anticipated client demand for Endava services, our ability to attract and retain employees and be an employer of choice in multiple geographies, our integration of FIVE and Levvel, and our ability to execute on our sustainability objectives as well as other forward-looking statements.
These statements are subject to risks and uncertainties that could cause actual results to differ materially from those contained of certain events may differ materially from the results or timing predicted or implied by such forward-looking statements, and reported results should not be considered as an indicator of forward-looking statements made during this conference call speak only as of today's date, and the company undertakes no obligation to update them to reflect subsequent events or circumstances. Please refer to the Risk Factors section of our annual report on Form 20-F, filed with the Securities and Exchange Commission on September 28, 2021, which contains a discussion of important factors that could cause actual results to differ materially from those contained in any forward-looking statement.
Also, discussion of non-IFRS measures is included in today's earnings press release, which you can find on our investor relations website. A link to the replay of this call will also be available there. With that, I'll turn the call over to John.
Thank you, Laurence. I'd like to thank you all for joining us today, and I hope you're all staying safe and well. We're pleased to be here to provide an update for the year ended December 31st, 2021. Endava continues to experience very strong demand for our digital services. In all of our regions and verticals, demand outweighs supply, and therefore, we are having to be very selective in the work that we take on. The situation in Russia and Ukraine is one that we continue to monitor, as we have no people based in Russia, Ukraine, or Belarus. Endava reported revenue of GBP 157.7 million for Q2 of our fiscal year, 4% year-on-year increase in constant currency from GBP 105.2 million in the same period in the prior year.
We ended the quarter with an adjusted profit before tax for the period of GBP 33 million, representing a 60.4% year-on-year increase from GBP 20.6 million in the same period in the prior year. Our strong revenue growth continues to be driven by the expansion of work for our existing clients and the acquisition of new ones during the quarter. As I've mentioned previously, we continue to see an increasing flow of new client opportunities, which start small with ideation or proof of concept engagements, and then scale as we move into production system development. The scaling of these projects as engagements expand is now driving the growth of larger clients. In the quarter, 689 active clients, up from 521 at the end of the same period in the prior year. A 32.2% year-on-year increase.
Importantly, we grew the number of larger clients with a total of 107 clients who are paying us in excess of GBP 1 million a year, compared to 75 in the same period last year, representing a 42.7% year-on-year increase. The average spend of our top 10% year-on-year in the 3 months ended December 31st, 2021. Our business in the U.S. continues to expand strongly, helped by the successful integration of our most recent acquisitions, FIVE and Levvel. Revenue from North America grew 79.8% for the 3 months ended this year. Revenue from the rest of the world is also growing strongly, up 109.1% year-on-year, driven mainly by the payments and financial services vertical.
Revenue in our payments and financial services vertical grew by 55.8% year-on-year. Driven by strong growth in all the sub-segments of that vertical. Bank investments in consolidated data platforms, cloud migration, and the crypto and distributed ledger technology space. While business-driven initiatives such demand in payments is driven by the continued shift to frictionless payments, facilitated primarily by e-commerce, merchant onboarding, and open banking in combination with real-time payment rails. Across our insurance vertical, we've seen significant growth in delivery of no-code/low-code solutions for underwriting and pricing, and in the application of automation to areas such as straight-through processing of claims. Our other vertical also grew very strongly, being the key driver. Mobility, the movement of people and goods, is experiencing a long-term shift towards autonomous electric vehicles, and we're seeing accelerated innovation and sharing and warehouse intralogistics.
I'd now like to give some highlights on what we've been doing on the technology front. For many years, much of our business has been serving. More recently, we started working with software product vendors to develop their products, particularly in the financial services and technology industry areas. We have a range of successful products, such as collaboration platforms or software development tools, as well as some clients who develop well-known products for the capital markets industry. The product solutions run by the product vendor on behalf of their customer. This area has grown strongly for us, and we found strong demand for our architecture, product design, development, testing, and creative services skills with these clients. Looking at the demand landscape through an industry-based lens, I would like to provide an update on our work in the private equity sector.
Work for PE portfolio clients has been a significant proportion of Endava's business over the years. We estimate that over 25% of our revenue comes to begin putting to work their record piles of unpacked cash at a record rate to account for 20% of M&A activity. These financial sponsors account in 2021, a 111% year-over-year increase and a new record. We remain confident in our ability to continue to grow this portion of our business. We helped expand our PE footprint in the mid-market space. We continue to grow our work with the larger funds as their demand for transformational large-scale IT investments continues to increase.
We've seen the opportunity for technology change become a more important driver of the value creation thesis for buyers, and as a result, where we are advising PE firms on the potential impact of post-acquisition technology transformation activities. Our cross-functional teams of engineers, product strategists, and subject matter experts are specialists in this field, and we are particularly active in sectors where we have deep engineering expertise, such as payments and insurance. We've been asked by multiple funds to help them in their ambitions to acquire payments businesses. Given our deep understanding of the industry, we help validate the growth potential of the achievable product and technology roadmaps. For one such fund, we have now kicked off a large multi-year product transformation program. We worked with a global peer to deliver product propositions leading to an engineering roadmap.
During the work, we discovered issues of technical debt and proposed a future architecture. This advisory work has led Endava is working with a global PE portfolio company that is one of the largest digital real estate organizations. The various brands of this company functioned independently on a group powered by a single technology platform. Endava is now advising on the architecture, solution design, and overall programming, as well as working alongside the existing tech the U.S. West Coast, who have engaged several LATAM Scrum teams and continue to open up new business units to Endava engagements as we demonstrate our added value. We've been seeing a growing demand for investments to accelerate the migration to a cloud-native tech stack, where packaged business capabilities sit at the heart of a customer-centric omni-channel commerce uptime.
Our ability to combine our understanding of the deal drivers with our architecture and product expertise makes us a unique partner for PE houses. Our relationship with the U.S. PE firms. As we see an increase in commercial demand across all regions and industries, we've also seen an increase in our growth. From December, we reached a milestone of 10,000 Endavans. This is more than just a number. It's about having a great team doing amazing work for our clients. We ended the quarter with 10,391 employees, a 39.2% increase from 7,464 in the same period. Attrition remains intense. Our focus on recruiting the best talent in the countries where we are located is unchanged, and we continue to recruit and retain the people we need in Ireland and Canada.
We are proud to be an employer of choice in Romania, Serbia, and North Macedonia, where we have won Best Employer awards. We continue to grow our LatAm presence with over 1,600 Endavans in the region at the end of December, up 79% year on year, showing that we continue to be a very. I would now like to provide a bit more granularity on our recruiting program to explain how we continue to be an employer of choice. We have a strong internal referral. 50% of our new hires joined Endava through this referral program. This is a strong element of the Endava culture and helps with knowledge-sharing and team spirit and attract talent. For the 12 months ended in December, 21% of our new hires came from graduate recruiting from partner universities.
University graduates begin their professional careers with either specific industry vertical or discipline expertise. We also have a rehiring program which allows for easy integration as the balance of the hiring is mainly targeted towards recruitment of senior people. We believe diversity and inclusion are key to our culture forum to bring together a broad and varied group of passionate Endavans from across the business to drive and deliver sustainable organizational inclusion. We believe our was 5% as of December 2021. We also continue to introduce new incentives to better align rewards to our people with Endava's growth. Sustainability, we recently announced our focus on achieving net zero emissions from our organization and value chain, accelerating our journey to a net positive impact with the utmost integrity.
With this in mind, we recently signed a commitment letter to Science-Based Targets which sees Endava joining the Race to Zero. Additionally, we celebrated our 10,000 Endavans milestone by planting 10,000 trees, and we have a commitment to plant at least 30,000 trees by Next-Generation Technology Provider. We are mindful of the environmental impact of the software and technology infrastructures we design and deliver. We believe that we have the ability to drive sustainability through digital acceleration, and we are proud to help our clients build environmentally conscious solutions. As demonstrated by our financial results, we are excited about the opportunities in front of us and remain confident in our ability to execute on our objectives. I'll now pass the call on to Mark, who will walk you through our financial results for the year.
Thanks, John. Endava's revenue totaled GBP 157.7 million for the 3 months ended December 31, 2021 compared to GBP 105 million. In constant currency, our revenue growth rate was 53.4%. Profit before tax for Q2 fiscal year 2022 was GBP 19.1 million. Adjusted PBT for the 3 months ended December 31, 2021 was GBP 33 million compared to GBP 20.6 million for the same period in the prior year. Our adjusted PBT margin for the 3 months ended December 31, 2021 compared to 19.6% for the same period in the prior year. Adjusted PBT excludes realized foreign currency exchange gains and losses, all of which are non-cash items. Adjusted PBT margin is adjusted PBT as a percentage of total revenue.
December 31, 2021, calculated on 58.0 million diluted shares as compared to 29% the same period in the prior year. From our 10 largest clients accounted for 34% of revenue for 3 months ended December 31, 2021, compared to 37% for the same period last fiscal year. Clients increased from GBP 3.9 million to GBP 5.4 million for the 3 months ended December 31, 2021, representing a 40.4%. December 31, 2021, North America accounted for 35% of revenue, compared to 29% in the same period last fiscal year.
Europe accounted for 21% of revenue, 42% in the same period last fiscal year, while the rest of the world accounted for 3% of revenue, compared to 2% in the same period last fiscal year. Comparing the same periods, revenue from Europe grew 17.1%, U.K. grew 46.9%, and the rest of the world grew 109.1%. Revenue from payments and financial services accounted for 51% of revenue, compared to 49% in the same period last fiscal year. Revenue from TMT grew 58.2% for 3 months ended December 31, 2021 over the same quarter of 2020, and now accounts for 24% of revenue compared to 23%. Activities, plus grants received less net purchases of non-current tangible and intangible assets.
Our adjusted free cash flow was GBP 31.2 million for 2021 compared to GBP 69.9 million at June 30th, 2021. CapEx for the 3 months ended December 31, 2021 was GBP 1 million to GBP 163 million, representing constant currency revenue growth of between 44% and 45%. Endava expects adjusted diluted revenues will be in the range of GBP 636 million to GBP 640 million.
Representing constant currency growth of 44%-45% or pounds per share. The above guidance for Q3 fiscal year 2022 and the full fiscal year 2022 assumes the exchange rates at the end of January as per the prepared comments. Operator, we are now ready to open the line for Q&A.
At this time, I would like to remind everyone, in order to ask a question, press star, then the number. First question comes from the line of Ashwin Shirvaikar from Citi. Your line is open.
Thank you. Good morning, John, Mark. John, to how you started your prepared remarks. You said you're being selective in terms of what projects you seek and approve. In what way are you focused on, you know, eventual TAM? Are you looking at profitability? Could you provide more granular.
A long-term scaled relationship. Indeed in industries where those prolonged tech transformations that we've been talking about are underway. Relationship can expand. I mean, that's always a judgment call, but that's the call that we're making. Essentially, you know, with our business model, we wanna get in the product that we help them build. Then as that product is successful in the market, we see clients coming back for more. We're looking for our geographic and vertical mix of clients. You know, Endava goes down that diversification road. We essentially pick areas which business we're gonna do and to prioritize where we allocate our people.
Got it. I appreciate the detail on recruiting that was very much a North America opportunity. Is it just par for the course? Then you did mention obviously there's no directive of where Romania is. Are you expecting any sort of indirect sort of social pressure on things like that affect you?
The growth that we're seeing in North America, we are pushing more of the growth that we achieve with clients in North America into our LATAM delivery centers. Sharp acceleration in LATAM. On your question around the sort of Central and Eastern European pressure, we have about half of our staff in Romania, just under. So, you know, I think in some ways being based in our territories in Romania and Poland actually opening opportunities up for us if the situation continues to worsen. Thanks, Ashwin.
Your next question comes from the line of Bryan Bergin from Cowen. Your line is open.
Hi. Good morning. Good afternoon. Remain stable and low, which is good. Have you noted any accelerated competition for talent, though, as some providers may be looking to diversify beyond that current deal?
I mean, you know, recruitment in our markets is always a huge competition. I wouldn't say that it's been any sharper in the last quarter than the numbers that we actually recruit in a quarter to give some context to it. It's not a huge factor driving attrition for us and well under control. If you look at some of the markets that we've got our eyes on, I've mentioned that we're moving into Poland reasonably small and we'll get the culture well established so that we progress as an employer of choice in those locations as well before you see a huge impact in terms of acceleration.
GBP +1 million revenue clients. I think that may have been a record uptick on a quarter-over-quarter basis for you here. Can you just talk about the mix of those new large clients? Is it broadly represented across industries and regions that have really spurred that nice uptick over this quarter and in the last several?
Yeah. I mean, one of the things that I touched on in more prototype-type basis doing some ideation work around how technology could be applied to their business and where benefits would come. Then as that proves, for clients in the main, it's those smaller customers bubbling up into production system engagements. Then as we scale, our PE also does that. We engage with them on a smaller basis as they're considering investing in a prospective portfolio company, and then as they make that investment, that pushes that growth in the one-million-plus clients. You know, we continue to see a strong pipeline of going into that larger client size.
All right. Thank you.
You know, the growth in different regions and different. The U.S. was up 80% year-on-year last quarter. We're just putting people on the ground in the rest of the world, which more rest of the world. It's starting to pull through into the larger clients there as well.
Thanks.
Your next question comes.
We break it down between just recruiting, so sort of linear headcount growth versus is there any room for utilization to improve? I know you've been running pretty hot just given how strong demand is.
A lot of the headline growth that we've had this quarter, 53%. The average headcount was up 37%, so that drives part of it. We have about 4% added to that percent, which is a slight tweak in the onshore offshore mix. The balance is actually the man-day rate increase in which is 4 percentage points of growth to go to 50. The headcount growth is still going to remain, you know, a driver of that growth. We're not gonna get much leverage from a utilization perspective. I also seem to believe, you know, that guidance is gonna be headcount related, but also through to, you know, passing on that cost pressure that we're and others are experiencing through rate rises.
10 clients, and you've had, again, very strong growth within the top 10 based on some of the metrics you shared. Where are you in terms of maturity with these clients? Is there still plenty of room to grow, or do you believe that you've now been going forward?
We believe there's lots of room for growth in many of the top 10. Our footprint has got a lot of room for expansion. There's probably a couple in there where, you know, we get into the place where it's gonna start to plateau. We do expect that the top 10 as a proportion of our overall business will slowly come down simply because, you know, one of our stated aims is pushing for other clients to grow faster as part of that diversification into new geographies and territories and so on. But lots of room.
Your next question comes from the line of James Faucette from Morgan Stanley. Your line is open.
Thanks very much. Wanted to follow up on the question around hiring, and if the current rate of hiring is more of a surge and that sustaining that above that 30% is probably going to be difficult and not likely.
30% is probably a sensible max. There were a couple of factors coming out of the pandemic that contributed to us being able to push it a bit faster during the pandemic. With recruitment being slower during that period, the organization became more senior and that gave us an opportunity. Secondly, our attrition is low. You know, we're at 12.5% this quarter, which is below the 15% that we target. Lower attrition means that we can grow while utilization remains stronger. Those factors together have enabled us to push the 38% year-on-year growth that you saw in Q2. We do expect that will 30% max running a little bit higher, but I don't think it will continue at the 38% level going forward.
Useful color. Appreciate an opportunity or at least some benefit from doing tuck-in acquisitions of talent and specific skill sets. What are you seeing and thinking about in the current environment, and especially with the, how should we think about that part of capital allocation?
We are always looking for good opportunities and acquisitions. We have a team that others that have the right DNA that are gonna integrate well with Endava. Namely ones with an ideation to production type mindset with an Agile approach. Obviously, there's nothing that I can report that we're working on right now. If there is anything material, we would report that. Strategically pushing into some of the new territories that we wanna build up in. Secondly, in the sector acceleration of some of the industry verticals that we're very focused. Sometimes there's businesses that bring some skills or technology capabilities that just help us boost an area within the business. Of course, sometimes you find a business that brings all.
That's what we're always looking for. The strategy remains the same. You know, in capital allocation terms, there are simpler businesses that we can buy.
Thank you.
Thanks, James.
Your next question comes from the line of Maggie Nolan.
Thank you. Congratulations. Could you talk a little bit about the growth drivers in private equity, you know, particularly how the Intuitus acquisition has services vertical regardless of what industry the portfolio company you're working on might be in?
Private equity, as I touched on in the opening remarks, is, and it's the portfolio companies of private equity owners, is around the 25%. Those sorts of businesses, which is why we highlight it. The Intuitus acquisition really helped us with the earlier stage conversations with PE firms. i.e., you know, a lot of the work that we're doing with them is actually before they put a bid in and complete an acquisition around how the technology platform can be transformed as part of their investment thesis. That's attractive to our business. With that investment thesis, we can help them with the downstream work in transforming it. We report those portfolio companies in the industry segment that the portfolio company sits in.
It doesn't pop into payments and financial services just because it's got a PE owner. Most of the PEs, even the upfront work when they buy a business, the consultancy type work we're doing upfront, they will book against the portfolio company. Even that will get reported in the wider industry verticals. Where it gets reported into the PE firm and will go against payments and financial services where they don't win the bid, and they carry the cost themselves. Did I fully cover your question?
Yes, that's great. Thanks. My other question is on the revenue per employee, which has been trending up nicely. Could you just talk about some of the drivers behind that and then how sustainable this trend is in the near to medium term?
Hi, Maggie. The revenue per head is basically a function of the man-day rate and utilization. It's sort of been indicating that we're probably in our sweet spot, you know, in terms of utilization. We're in that sort of low 70s. It depends on quarter to quarter whether we are accelerating in terms of building bench ahead of demand, which, you know, has an impact. Then it's the man-day rate. The utilization, I think, will broadly be around where it is bar those sort of spurts. It's a function of pricing. You know, the pricing in terms of quarterly progression, we believe will improve. We're confident in our ability to balance. I think there'll be some stability and probably some upward movement on our revenue per head.
Thanks, Mark. Thanks, John.
Thanks, Maggie.
Your next question comes from the line of Bryan Keane from Deutsche Bank. Your line is open.
Hi, guys. I wanted to ask about the disruption to any of your peers leading to new work potentially for Endava. How do you think about that, John? Hello?
This is the operator looks like we have lost connection with the speaker line, please stand by your line will be placed on music hold until they return.
Ladies and gentlemen, thank you for standing by. Your next question comes from the line of Bryan Keane from Deutsche Bank. Your line is open.
Hi, Brian. Unfortunately, we dropped just as you were starting to ask your question, so if you could pitch it again, we didn't hear it.
Yeah, yeah, no problem. I just wanna ask about the tension going on in Russia and Ukraine. Does that disruption, what does that mean for your business, and what do you think it means for peers? Do peers definitely have disruption issues that lead to more work to Endava?
I mean, I couldn't really comment on peers, but we are certainly seeing some of our clients who have footprint with other players in those territories start to have conversations with us about whether they could build up what they're doing with us a little bit more, just because of the risk. You know, I wouldn't expect it to be a huge flow of work. Indeed, as you'll have picked up, we're already on. If it's the right client and the right opportunity, we'll certainly engage with some of those opportunities that are coming through.
I think the other thing is we are starting to see some movement of staff who are currently particularly in the Ukraine who are thinking maybe it's time to move to another country. You know, that's actually at relatively small levels at the moment is starting to be visibly stronger.
If you look at the implied 4Q revenue guide, it comes down a little bit from where you guys have been running this fiscal year in 3Q. Just trying to think about when we get to 4Q, I know the current growth rates that started in fourth quarter. How much of the fourth quarter run rate is kind of conservatism, anniversarying of acquisitions, just more normalization of the growth? Just trying to think about the factors for 4Q by the time we get there.
I mean, the guide at the top is around 28% for organic constant currency growth. That may look as though it's slowing when you compare it with the quarters, you know, Q1, Q2, Q3, but it is taking out the M&A impact of 2021. Our organic constant currency was 35%, you know, of a very sort of strong sort of recovery from COVID. We have a combination of a tough comp we executed in Q3 last fiscal. But the momentum is very strong. You know, we anticipate keeping utilization where it is, and we're also making some allowance for man-day rate expansion.
Got it. How much was the M&A contribution for the quarter again, Mark?
This quarter?
Yeah, yeah.
It's about 10%, around 44%.
Got it. Thanks and congratulations on all the success.
Thanks.
Thanks, Brian.
Your next question comes from the line of Jamie Friedman from Susquehanna. Your line is open.
Hi, good morning. Let me echo the congratulations. I'll just ask my two upfront, John, since we have you. How are you thinking about IT budgets for 2022 calendar? I realize you guys make your own weather, but, in general, how are the budget trends? That's the first one. The second one is in your prepared remarks, John, you talked about the insurance vertical. You had an example, but I was wondering if you could elaborate there, as to how you're seeing.
Yeah. You rightly, Jamie, call out that the IT budget spend that clients pushing in our direction, you know, partly comes from their IT world. A lot of it comes from business investment mindset around how technology can have a real impact on the relevant parts of the business. You know, we're not as directly exposed to ebbs and flows in IT budgets as some of the more traditional players are. You know, to me, it doesn't feel like there's any issues. There's plenty of money that clients are pushing in the direction of what we do. But I don't have the same sense of the wider IT budget spending trends that a lot of the more traditional wider-based services business would have.
On the insurance vertical, you know, we've a lot of what's happening in the insurance space is around data, around the move to clouds. Data being the ability to create more competitive insurance product to provide foundations for better use of automation, things like straight-through processing of claims, which we've successfully done with a few clients, as in no human touches the entire process of the claim once the client has entered. There's also a bit of activity around no-code and low-code solutions for underwriting and quite a bit of direct-to-market website type capability where more, say, broker type clients are actually pushing direct into the consumer market. Those are a number of areas across insurance where we're seeing growth and activity.
Thank you for that.
Thanks, Jamie.
Your next question comes from the line of Moshe Katri from Wedbush Securities. Your line is open.
Hey, thanks for squeezing me in, and let me add my congratulations to strong results. Two big picture kind of questions. One, can you give us some color on what you're seeing in terms of wage inflation, maybe in terms of ranges? Given the supply constraints issues that we're seeing out there, are you having to bump up the number of comp increases that you're doing on an annual basis? Maybe you can kind of give us kind of a color in terms of how often have you been doing those comp increases on an annual basis? Thanks.
I mean, on the wage inflation, we're seeing slight elevation. Our main pay rise has gone through in January. We don't see any sort of uptick in terms of attrition at this stage. We'll see how we go with that. Typically, the average cost per head, we've managed to contain within our normal sort of distribution curve. We're seeing sort of a sequential uplift in costs of about 3% or so when you look at it from one quarter to the other. Actually, when it translates into a gross margin impact, where we've lost probably about 1% when you go from Q2 to Q3. That's something that we've you know usually experienced as we've gone through the year.
It is our major sort of pay round, and it does have that impact. We start to recover it through the balance of the year, through discussions with clients, around rate increases, around the appropriate, you know, renewal, stage. I think you had a backup, didn't you? I couldn't catch the last question you had.
I'll pick it up. On our annual pay review is the main point at which we do comp increases. The only other significant element is we do have quarterly reviews on promotions across the business. Obviously, when we promote someone, we review their comp at the same time. Apart from that, it is mainly the annual cycle. You see, you know, quite a large pay component coming through in our Q3, and then it takes the rest of the year, as Mark touched on, for the price rises to come through that then push the margins back up again.
Understood. Thank you.
Thanks.
Your next question comes from the line of Steve Enders from KeyBanc. Your line is open.
Hi. Great. Thanks for taking the question. Just wanna ask a bit about some of the underlying demand drivers you called out in the comments. I think one of the areas was working with the SaaS vendors and some of the packaged software vendors and helping enable that. I guess one, just how are you kind of seeing that, the underlying opportunity from here to work with them, and how should we kind of think about that as a percent of the mix going forward?
Yeah, I mean, that's something that sits within our TMT space. We've been, you know, very excited to see more work coming through with the SaaS technology providers, typically on the West Coast, in the U.S. You know, the work we're doing for them is around the engineering of the products that they push out there. You know, there are a number of them, and they're a big opportunity for us, so we're excited to see that picking up.
Okay, great. You mentioned as well that you're planning to move into Malaysia or establish a new corporate entity there. I think we've talked in the past about, you know, how some of the plans to enter the Asia market. Does this kind of change how you're thinking about a build versus a buy point of view as you think about targeting Asia more broadly?
We will look at M&A opportunities. You know, if we can find the right sort of business, we'll look at M&A as a route to expanding. The Malaysia one, we are building organically. We just have opportunities with clients in the Asia Pacific region, you know, and we wanted to. A big part of our model is that similar time zone Agile delivery capability that we push through. For clients in Australia, you know, as we're scaling beyond early engagements, we really needed capability on the ground in Asia Pacific. We're not waiting for an M&A opportunity to come through. We're going through it organically in Malaysia.
Okay, perfect. Appreciate you taking my questions.
Thank you.
This concludes our question and answer session. I will turn the call back over to John Cotterell for some closing remarks.
Great. Well, thank you all for joining us today. As you all have noted, the demand for our services remains strong, and that is across all of our verticals and geographies. We remain very positive about our business position. I look forward to speaking to you in a few months at our next earnings call. Thank you.
This concludes today's conference call. Thank you for your participation. You may now dis.