And we still see travel, despite sort of my comments about consumers cutting back in some areas, being quite robust into the future from a volume expectation perspective. From just an overall offshoring, near-shoring comment, as we’ve talked about before, clients, for the most part, are very focused on managing their cost structure. And so pretty much the majority of all new transactions and deals and ramps of existing clients are tending to be done at the most cost-effective shore environment, whether that be near-shore or offshore. Very few starts — in fact, very, very, very few starts are starting out onshore at a higher cost structure. It’s just not in clients’ budgets right at the moment.
Oliver Davies: Okay. Great. Thanks. And then maybe one for Andre just on the free cash flow, just it looks to be driven by working capital. So could you just comment on the reasons for that in terms of free cash flow?
Chris Caldwell: Andre, you’re not coming through.
Andre Valentine: Sorry about that. We muted ourselves for a second. So Oli, you’re right. The improvement in free cash flow is largely coming from working capital improvements. And that’s really just a focus on the blocking and tackling of getting bills out on time and collected on time, which drove roughly a two-day improvement from the prior quarter in our days sales outstanding. So it’s really just an increased focus on that. It’s always been a focus, but just really good execution by the team in getting the bills out and getting them collected. And we think it’s sustainable as we move forward. Feel very, very confident about the free cash flow guide for the fourth quarter and feel really good about hitting the guide that we set out at the very beginning of the year to generate without Webhelp $0.5 billion or more of free cash flow this year. We’re definitely on track to do that if you look at how we’ve done through three quarters.
Oliver Davies: Great. Thanks very much for answering the question.
Andre Valentine: Thanks.
Operator: Thank you. [Operator Instructions] Please stand by for our next question which comes from the line of Divya Goyal of Scotiabank.
Divya Goyal: Good afternoon, everyone. So Andre, you briefly addressed part of my question, which was on the guide that you provided. So Chris addressed that there is some continued, how should I say, slowdown in the macro that’s been noted across the business. What level of confidence can we see in terms of the overall guidance that you provided for Q4? And how should we expect the business to perform going forward, considering, obviously, what’s going on with the AI transformation alongside the macro impact?
Chris Caldwell: Actually, Divya, why don’t — sorry — why don’t I take that because it ties into some of the AI conversation that we’re talking about. So a couple of different points to it. When we look at our guidance for Q4, what we’ve kind of stated before is that we’ve stripped out the seasonality of the business that historically has been in Q4, primarily based on what we saw last year. And so when we’re talking to our clients and we’re looking at their volumes, we’re seeing that sort of flatness from a seasonality perspective come through. As I also mentioned, what we’re seeing is sort of a steady rate of business from the clients that have seen decreased volumes based on consumer demand. And those are kind of continuing through and they’ve been kind of trailing as we have expected for the last number of weeks in last quarter.
So we’re kind of looking at that as pulling through to Q4 as well. And then on the third element from a generative AI perspective, right now, we’re seeing generative AI as an additive revenue to our business, where we’re doing the consulting, we’re doing the implementations, we’re doing the proof-of-concepts, we are getting services for building out the models and managing those models as they start to come into production. And so that has really no impact in our fourth quarter outside of the revenue that we expected that’s already been booked or sorry that’s been sold and now we’re going into the implementation and billing phase.
Divya Goyal: That’s helpful. Just following on this thought process here, I wanted to understand, have you been seeing any pricing pressure or conversely any margin benefits, given the automation that you are trying to bring across the customers?
Chris Caldwell: Yes. So we do see pricing pressure in the highly transactional business. And as we’ve talked about it, that’s about 10% of our business, although it continues to decline. If you think about it back in February, it was about 13%. Now it’s down to 10%. And our goal is obviously to continue to drive that down. In that part of the segment — part of the business, it’s very easy to ramp. It’s quite commodity-based business. And there are certainly people who are chasing it for revenue. Our preferences to more focus on the higher-value services and win that business by quality of service, but not worry about it if it goes away from just a pure pricing perspective. In the higher-value services, we’re seeing it much more stable from a pricing environment.
Clients are more focused on the security, the work that you’re doing, they’re focused on compliance of the work that you’re doing. They’re focused on consistency of the work. They’re focused on how you’re going to actually deliver the outcomes. And so therefore, where we’re putting in technology, where we’re putting in sort of this automation for driving better efficiencies internally that is what is supporting our margin stability within those clients. And we expect that, that will continue on as we continue to execute on our strategy.
Divya Goyal: That’s very helpful. Thanks, Chris.
Chris Caldwell: No problem.
Operator: Thank you. [Operator Instructions] As there appear to be no further questions in queue, this does conclude today’s conference call. Thank you for your participation. You may now disconnect.
