Sykes Enterprises (SYKE) Q1 2019 Earnings Call Transcript

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Logo of jester cap with thought bubble.

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Sykes Enterprises (NASDAQ: SYKE)
Q1 2019 Earnings Call
May. 07, 2019, 10:00 a.m. ET

Contents:

  • Prepared Remarks

  • Questions and Answers

  • Call Participants

Prepared Remarks:


Operator

Good day, and welcome to the Sykes Enterprises first-quarter 2019 earnings call and webcast. [Operator instructions] Please note this event is being recorded. I would now like to turn the conference over to John Chapman, CFO. Please go ahead.

John Chapman -- Chief Financial Officer

Thank you, Claudia. Good morning, everyone, and thank you for joining us today to discuss Sykes Enterprises first-quarter 2019 financial results. With me today on the call are Chuck Sykes, our CEO; and Subhaash Kumar, our head of investor relations. On today's call, I'll provide an operational update followed by a review of the financial results of the quarter, after which both Chuck and I will take questions.

From an operational standpoint, we made a -- we made solid progress on two of the three key performance indicators for the business. Our operating margins came in better than expected relative to implied guidance on the comparable period. We drove similar success and the comparable increase in our facility utilization rate during the quarter. Both of these gains were tied directly to action plans we set in motion as we exited 2017.

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We are close to wrapping up the rationalization, which is consistent with what we -- which -- with what we guided to as we exited the final quarter of 2018. At the same time, we continue to simplify and refine our operating model in the U.S in part to improve agent attrition and absenteeism while executing on revenue growth worldwide. Having successfully delivered on capacity rationalization, we have better line of sight on pursuing the next phase of improvements. I would now like to make some observations about growth opportunities.

Specific to revenue growth, we are seeing three things that are validating our market differentiation and operational readiness: first, the business we have closed for 2019 is ramping faster than we expected. Although this will impact our second and third-quarter operating margins, it is a strong sign of the underlying demand in the business and our state of readiness; second, the mix of demand from a vertical, geographical and line of business perspective is equally encouraging. We are seeing wide ranging opportunities. We are catering consumer and enterprise-focused opportunities with new economic clients and the home automation: fintech, logistics and social media segments in addition to winning opportunities and our traditional Global 2000 client segment.