Ruplu Bhattacharya: Okay. The Catalyst business, Chris, I believe, in fiscal ’22 was about $450 million of revenues. I thought I saw in the presentation that you have the opportunity now to take some of that Catalyst business into the footprint of Webhelp into some of their customers. So off the $9.8 billion in revenues that you’re targeting for fiscal ’23 on a pro forma basis, how much would you say would be that combined digital IT service revenue? Or how much — or another way of asking it is, of the $3 billion that you’re seeing from Webhelp, do they — is that all BPO or core? Or is there some digital IT services in there? And do you see that the Webhelp combination helping you expand on the digital IT services side.
Christopher Caldwell: Yes, Ruplu, great question. So the mix of pure digital IT services within the Webhelp business is slightly smaller than what it is within Concentrix. And so when we come together, it will go from about 9%, 10% of revenue to 8% to 9% of revenue, although obviously, a much bigger base. That’s one part of the story. The other part of the story is that Webhelp has some very, very strong engineering and technical talent, both in Europe, in Eastern Europe and in Latin America. Both places that Concentrix has been focused on trying to build out development centers as we’ve talked about, to drive a higher margin profile within our Catalyst business. . And so we get the benefit of that once the transaction closes right away.
So you have to look at about those 2 factors. We believe we can grow faster by doing this because we have additional access to more talent into markets that we’ve been trying to build out. And then two, there is already a solid base within the Webhelp business that we believe it can continue to grow.
Ruplu Bhattacharya: Okay. Can I ask on the cost synergy side, I mean you’ve — you’re targeting $120 million of cost synergies by year 3. Can you talk a little bit about — a little bit more on the integration effort that’s required, do you expect any integration charges? Because for example, you talked about rationalization of the real estate footprint. I mean do you know like — do you expect to close some call centers or reallocate some of the employees. So are there any charges that you’re factoring in? And what would be the mix of onshore versus nearshore versus offshore for the combined company on a pro forma basis?
Christopher Caldwell: Yes. So I’ll let Andre talk about the split of the voice business — sorry, split of the business across onshore, nearshore and offshore. To answer your first question, Ruplu, we generally model about for every dollar of cost synergy, $1 of charge. So if you think about $120 million, $120 million of charge over the 3 years. The charges tend to come in a little heavy at the beginning as you close things out versus on the back half when sort of contracts expire, et cetera, et cetera, within the charges. We have historically done better than that, but that’s historically what we’ve modeled. When you think about the real estate footprint and you think about some of the savings, it’s pretty simple. The reality is that Webhelp uses third-party data centers in some cases.
We have some of our own data centers. We overlap some data centers in some areas. That’s a very simple process to kind of consolidate while it takes a while to get that savings in the business. It’s not a — it’s very easily identifiable. And in terms of our delivery sites and delivery centers, there are a few markets, very, very small percentage, but a few markets where we have literally buildings similar to past transactions across the street, within a kilometer or mile depending on which side of the pond you’re on. And it’s very simple if we bring them together, we get the economies of scale of putting those 2 buildings together, while still keeping our capacity that we need in order to grow within the market. And so we really see that as what you do.
And to your point, you have some charges as you exit leases and bring the 2 organizations together for the most part. Our history of kind of hitting our synergy numbers, as you know Ruplu, I think every transaction we’ve done, we’ve hit our synergy number, and we’ve hit it on time. So we’re quite confident about what we can achieve and do within it. And clearly, we think we’ve modeled appropriately for the charge perspective. And Andre, I’ll pass it to you on the offshore, nearshore, onshore.
Andre Valentine: Yes. So on the shore mix perspective, Ruplu, both companies operate about 43% onshore, where the difference comes in, there’s a bit of a heavier mix for Webhelp with nearshore capabilities. And so the combined company will have 43% onshore, 30% offshore, 27% nearshore. So that nearshore percentage is a bit higher than we would look at Concentrix on a stand-alone basis. And what that is, is those really strong capabilities and scale that they have in Latin America as a nearshore offering, in Eastern Europe as a nearshore offering for languages and also in Africa. And so that’s something that’s attractive to us. We end up with a very, very balanced mix between onshore, offshore and nearshore.
Ruplu Bhattacharya: Got it. Maybe I’ll ask you one question on the quarter. You talked about new economy revenue growth of 7%. It was 13% last quarter. You think that we’re now at a level that can be sustained in terms of new economy revenue growth? And then looking at the new economy clients that Webhelp has, are they growing at a similar rate? And how do you expect that to trend in fiscal ’23?
Christopher Caldwell: Yes. So Ruplu, the new economy companies, as we talked about some of the softness in e-commerce are impacted by that. And so as I think some of those areas come back from a perspective of the economy, I expect that we’ll see probably a little better growth in that area, but I think it’s sustainable with what we’re seeing right at the moment at the current run rate. The Webhelp new economy companies are actually growing a little faster than that. And part of it is sort of the diversity of their client base. You’ll notice that they have more new economy clients than we do. And part of it is that in the European market, how the model of Webhelp has and their Nest business that we talked about, is really a big differentiator around how they think about going to market in these local markets, supporting these businesses as they go.
And so that’s driven a faster growth rate. And we expect even in more challenged economic times that they can continue that type of growth rate within that customer base.
Ruplu Bhattacharya: Okay. Maybe if I can just squeeze one more in. It looks like you’re keeping the full year guide to 4% to 6% organic constant currency. I guess the reported number is maybe $30 million lower or $20 million lower. I think that — would you attribute that just to the higher FX impact? And just from a sales cycle standpoint, I mean, any in or has there been any change in the close rates or — and the sales cycle?
