Sykes Enterprises, Incorporated (NASDAQ:SYKE) Q3 2016 Earnings Conference Call - Final Transcript
Nov 01, 2016 • 10:00 am ET
Good morning and welcome to the Sykes Enterprises Third Quarter 2016 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.
Management has asked me to relay to you that certain statements made during the course of this call, as it relate to the Company's future business and financial performance are forward-looking. Such statements contain information that is based on the beliefs of management, as well as assumptions made by, and information currently available to management. Phrases such as our goal, we anticipate, we expect, and similar expressions as they relate to the Company are intended to identify forward-looking statements.
It is important to note that the Company's actual results could differ materially from those projected in such forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements were identified in yesterday's press release and the company's Form 10-K and other filings with the SEC from time to time.
I would now like to turn the call over to Mr. Chuck Sykes, President and Chief Executive Officer. Please go ahead, sir.
Thank you, Carrie, and good morning everyone and thank you for joining us today to discuss Sykes Enterprises' third quarter 2016 financial results. Joining me on the call today are John Chapman, our Chief Financial Officer; and Subhaash Kumar, our Head of Investor Relations.
On today's call, I will provide a brief recap of our third quarter results and talk broadly about the State of the Industry. After which I will turn the call over to John and then we will open it up for Q&A.
Turning to our financial results, in the third quarter, we delivered revenue growth of 21.3%. Non-GAAP revenue growth which adjust for Clearlink and foreign exchange fluctuations was up a solid 7.9%. This was the highest third quarter non-GAAP gross number in over 12 quarters. Demand was broad-based with growth coming from both new and existing clients. In fact growth from our largest client, excluding Clearlink rebounded sharply up roughly 11% on a comparable basis. This comes after four straight quarters of decline after a program expiration last year. But our still client concentration among our top 10 clients remain roughly unchanged, when stripping our Clearlink underscoring the breadth of growth across our client portfolio.
Operating margins remained unchanged at 7.7% comparably. On a non-GAAP basis they came in at 8.5% better than what was implied in our forecast owing the better agent productivity and better expense management. As we discussed last quarter ongoing ramp expenses and operational inefficiencies continued to weigh our margins.
And finally, we sustained our healthy balance sheet ending the quarter in the net cash position while maintaining high levels of reinvestment in our business, both for current expansion and future renovation. All in all we delivered respectable results for the quarter, demonstrating our ability to navigate through the challenges, while taking a