George Tong: Hi. Thanks. Good morning. Within the International business, Finance and Risk continues to grow very nicely. Can you talk about the drivers of the strong growth there and help us explain the difference in growth trends between International Finance and Risk and North America Finance and Risk?
Anthony Jabbour: Sure, George. Thanks for the question. Yeah, a lot of it was driven in internationally by our third-party and supply chain risk management solutions growing nearly 40%. And when we look at our Sales and Marketing business, there was a nice bounce back after weaker comps we had last Q1 2023. So as that’s kind of stabilized and as we’ve got more momentum throughout Europe and in particular, in the Scandinavian region, and that’s the reason. I’d say from a North American side and International, there’s a timing aspect to our business as well. And there are some timing delays in North America, some timing accelerations internationally. So nothing worth, I’d say, being concerned about. We’ve got confidence in the underlying businesses in both regions.
Bryan Hipsher: And George one of the pieces, I think in there too, that’s unique to North America, to Anthony’s point, yeah, there’s really big Finance Solutions business, very sticky, very deep, driving nice pricing from that perspective. Third Party Risk & Compliance both internationally, as Anthony said, and domestically in North America growing really strongly. The credibility business is unique, I would say, to North America, and that’s one piece that does sit in that Finance and Risk business, George. But again, as we think about it in improving its trajectory as we head through the first half of this year and into the second half, that’s going to be something that obviously just allows the North America F and R business to shine through a little bit more in terms of what it’s doing in the core Finance Solutions and the core Third Party Risk & Compliance.
George Tong: Okay. That’s helpful. And related to that, on the credibility side in North America Finance and Risk, how would you expect the improvement to play out over the next couple of quarters in terms of benefit or lift to overall organic revenue growth?
Anthony Jabbour: Well, currently in the quarter, credibility was a 60 basis point headwind for us. And what we see is, should be headwind in Q2 as well. And midway through the year, we see it pivoting to the low single digits.
George Tong: Got it. Thank you.
Anthony Jabbour: Thank you, George.
Operator: Your next question is a follow-up from Craig Huber with Huber Research Partners. Please go ahead.
Craig Huber: Thank you. On the cost side of things I think I heard you say — talked about the cloud platform migration and part of the technology movement there was hurting your margins in the first quarter. Just update us please on the timing of the cloud migration in North America. And separately in International win also, when do you think this will be actually accretive to your margins and stuff for both regions? Thank you.
Bryan Hipsher: Yeah. Craig, I think it’s interesting because on the overall investment side, we made a really big step and Anthony mentioned it I think earlier in some of his remarks ,but we have migrated off of kind of a data center that was really legacy. And frankly some of the move on to the cloud it drives the innovation side to throughput our ability to scale and expand from that perspective. So I think you’ll see kind of a mix and obviously where the expenses start to stabilize as we head into later 2024 and into 2025. but then also you’re seeing just the pure benefits of operating on an even more modern infrastructure stack and especially as we’re cranking the wheel on innovation those are all significant progresses.
But when I think about the investment cycle, we really started in the last part of last year the second half. And we said that that will kind of run through at least the first half of this year. And then start to taper off as we head into the second half of 2024 and certainly down into 2025.
Anthony Jabbour: And Craig the other part of your question was looking at the margins between the two worth noting in North America it carries the innovation expense within it. So where we’re investing heavily around generative AI you’ll see those expenses burden in the North American business line and International distributing those capabilities.
Craig Huber: Great. Thank you very much.
Anthony Jabbour: Thanks, Craig.
Operator: Your next question comes from Surinder Thind with Jefferies. Please go ahead.
Surinder Thind: Thank you. I was hoping that you can provide a bit more color on the partnership with IBM and the build-out of a procurement solution. Just how does something like that work in terms of the arrangement the IP revenue share model? Any color there would help.
Anthony Jabbour: Well sure. I’ll be careful obviously not to share any confidential contractual information that we have with it. But I’d say at a high level with their watsonx capability and with our capabilities internally with our data and our analytics capabilities, we plan to go to market with them. And Ask Procurement is the first generative AI solution that we’re coming out with. As you look at IBM different from Google for example where we have a partnership as well, the whole generative AI marketplace is enormous. And you look at where strengths that each of them have. So with Google it might be with the SMB space as an example whereas IBM I think we’d all agree they’re very strong on the enterprise side. So — and they have large practices around SAP.
Salesforce et cetera. And so with that partnership and with the collaboration that we have together with them. we want to go to market in the enterprise space and helping both clients that we both share benefit from this technology and from the data that we provide.
Surinder Thind: Thank you. And then as a follow-up just related to an earlier question on the call, roughly the 10% of revenues that aren’t growing strategically how are you thinking about them not necessarily from a divestiture perspective, but just is there incremental investment that you’re maybe thinking of how patient are you willing to be to allow things to kind of stand the way they are? Just any color there of how we should think about that.
Anthony Jabbour: Yes. No, it’s a great question. If I focus on credibility as an example that’s one where we’ve retooled our customer value proposition and our sales force. And as we’re — the crux of the businesses small businesses reaching out trying to improve their credit score and what we’re working on with them is if they provide us a lot more information so access to the bank account or credit card statements taxes et cetera if they give us permission to pull their consumer credit bureau where we can blend their consumer score with the business score. And all of those what we’ve seen in our labs is that we’re getting roughly a 20% increase by getting this extra data and being able to leverage it. So that’s an example where we’re going to market with a revised value proposition and working on how much of that can we guarantee to make it a value prop simpler and more effective for that space.
