Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Executives

Dean Ridlon – Director, IR

Alan Herrick – President and CEO

Joe Tibbetts – SVP and CFO

Analysts

Rod Bourgeois – Bernstein

Jason Kupferberg – UBS

Mark Marostica – Piper Jaffray

Julio Quinteros – Goldman Sachs

Matt McCormack – FBR

Ashwin Shirvaikar – Citigroup

Sapient Corporation (SAPE) Q2 2008 Earnings Call Transcript August 7, 2008 4:30 PM ET

Operator

Good day, ladies and gentlemen, and welcome to the Sapient Second Quarter 2008 Results Conference Call. My name is Eric and I'll be your coordinator for today. At this time, all participants are in a listen-only mode. We'll facilitate a question-and-answer session at the end of the conference. (Operator instructions)

I would now like to turn the presentation over to Mr. Dean Ridlon, Investor Relations Director. Please proceed.

Dean Ridlon

Thank you, Eric. And thank you everyone for joining us today. I'm Dean Ridlon, Sapient's Director of Investor Relations. Today, we're speaking to you from our London offices. Our press release announcing this quarter's results is currently available in the investor section of our Web site at www.sapient.com.

Before we begin, I would like to remind everyone that some of the matters discussed during today's call are considered to be forward-looking statements as defined by the U.S. Securities and Exchange Commission.

These forward-looking statements are subject to known and unknown risks and uncertainties which could cause actual results to differ from those expressed or implied by such statements. We have described some of these risks, known risks, and uncertainties in today's press release, and in our annual and quarterly SEC filings, which we strongly urge you to read.

The forward-looking statements included in this call represent the company's views on August 7, 2008. Sapient disclaims any obligation to update these statements to reflect future events or circumstances.

During this call, we will be referring to non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with Generally Accepted Accounting Principles. The most directly comparable financial measures calculated in accordance with GAAP, and the reconciliation to those GAAP measures – of those GAAP measures to these non-GAAP measures are contained in the press release announcing this quarter's results.

I'd now like to turn the call over to our CEO, Alan Herrick.

Alan Herrick

Alright. Great. Thank you, Dean. And thanks everybody for joining our call today. As Dean said, we're joining you from London today, so it's getting a bit late already here, but walk you through the agenda; we got a lot to cover on today's call, but really two sections to our agenda today.

The main section will really focus on our Q2 earnings and our performance and then the second section I'm really going to give you an overview of the acquisition we announced shortly before we released our earnings.

So in the main section I'll take you through press release highlights, an overview of our Q2 performance and give you a little update on the market, and what we're seeing, and our strategy within it, before I jump into the acquisition. Then I'll hand it over to Joe to walk you through financial details.

So let me start with press release highlights. Service revenues of $165.8 million, up by more than 20 – up by 29% year-over-year, 27% in constant currency, and up sequentially over Q1 by 8%. Non-GAAP income from operations, $17.3 million, which is a 10.4% operating margin for Q2. It represents a 74% increase from $9.9 million in Q2 of '07.

GAAP income from operations, $12.2 million, compared to a GAAP income from operations of $1.4 million in Q2 of '07. Non-GAAP diluted income per share was $0.13, up from $0.07 in Q2 of '07 and GAAP diluted income per share for the quarter was $0.09 increasing up from $0.01 in Q2 of '07.

So with that, let me get into the overview of the quarter, but obviously pleased across the board with the quarter, strong performance in all categories, from the top line to the bottom line, to our cash flow from operations, and really our momentum was led by – continues to be led by strong progress in our interactive practice as well as our trading and risk practice.

And our Q2 performance is just a further testament to the position that we hold in the market and Sapient really sits in a highly differentiated position in the marketplace. We know the overall markets uncertain, but for us we've got exciting opportunities that we're focused on, specifically opportunities around interactive, and trading and risk management, which I'm going to talk to you about more in a couple of minutes.

And we did see good growth across consulting and interactive, with interactive making up 45% of our revenues, and as I've mentioned call after call, our win rates continue to be very high.

Let me give you some broad brush across our business units. North America represented 61% of service revenues in Q2 or $100 million. Revenues up 18% year-over-year and 3% sequentially. Constant currency growth of 17% year-over-year and 3% sequentially, and very good growth in North America posted in Q2, really remembering that in North America really Sprint performed as expected and discussed on the Q1 call.

And if you remember, as we talked about Sprint in the Q1 call, we projected it to be 5% to 6% of revenues in Q2. In fact, it fell within the range of 5% to 6% of revenues, down from its historical highs of 10% of revenues, so North America being up 3% sequentially is very strong in my view.

Let me switch to Europe, up – it was 35% of our revenues in Q2, revenues up 54% year-over-year, and 19% sequentially. In constant currency, Europe was up 50% year-over-year and 19% sequentially, driven by growth in interactive, trading and risk management, and communications, and frankly, the European team continues to do just a tremendous job, and those numbers speak for themselves.

Our government services business represented 4% of revenue or $6.9 million. Revenue was up 23% year-over-year and down 6% sequentially.

With that, let me give you a brush across our people. Ending people count for the quarter was 6,265 people, down from 6,389 people in Q1 primarily as a result of small action taking place in India at the beginning of the quarter that we mentioned to you on the last earnings call. Overall, we continued and continue to hire in India.

Our annual attrition rate was 16.8% compared with 20% in Q2 of '07, so continued improvement there as well, which we're also very proud of. Our utilization, 76% compared to 72% in Q1 and the improvement in utilization did yield real economic improvement for us as witnessed in our margin expansion, and specifically in our gross margins.

Utilization up primarily due to our continued focus, and our improved processes to manage utilization, and manage people, and deploy them more effectively, but also on increasing revenue.

I would also just note a couple of key points of recognition for us. We were awarded the Excellence in Diversity award by Consulting Magazine, and once again, we won Canada's 50 Best Places to Work award, by Great Place to Work Institute in Canada.

Let me now move on to what we're seeing overall in the market and give you a little outlook on our strategy – a little outlook on the market, and a little feel for our strategy, but not a lot changed from the last call for us.

If you remember, we said things started slower. You know, they picked up in February, picked up in March, April, seemed better, and things continued, and probably continued a bit better for us, as we got into the back half of the quarter. And obviously a choppier spending environment overall, as we mentioned last quarter.

We saw some slower decisions, and some certain spots and certainly around us. Increased scrutiny on spending, clients looking for really clear return, clear business cases, looking to spend really on things that matter that can move the needle forward.

And frankly, we see spending inside of FS, and outside very similarly where we believe spending in FS still is very good for the kinds of things that we work on. And I think we're well-positioned right now, for the kind of work and the kind of opportunity clients are looking to spend on, and I'm going to try to give you a little more feel for what really drives that across the different components of our business.

So let me start by giving you an overview of interactive, and we continue to see a strong set of opportunities. We're stepping up our senior hiring in interactive to capitalize on the position that we now see ourselves in, and a few of the trends that are driving that is really old media to new media.

We're seeing many global traditional media companies. For example, newspapers or magazines, asking us to really help them retool their business for the digital world. We're also seeing more clients focus investment on going direct where they really focused on enhancing, rebuilding a more effective direct channel, and in some cases, clients are building a direct channel for the first time.

There's also a continued trend over the last year around the growth of social media networks, like Facebook, YouTube, Twitter, and countless other ideas that are not deflected by the current economy.

This is increasingly where brands are battling it out for new customers attention, and we not only can help our clients find customers in that space, but we build the destinations, the experiences they need to convert them into measurable revenue.

And really when you look across the drivers I mentioned, it really comes down to clients are spending to drive customer acquisition and customer acquisition in an increasingly competitive space that is hard to understand, given the rate of consumer growth, and the behavioral changes around online channels.

If I now move to our trading risk business as part of our consulting business and try to get you little feel for the drivers that we see in that market, obviously, volatility is key, specifically in commodities like energy and you've heard me talk time and time again about commodities and about energy, but we really have clients that have a need to better forecast to manage their risk, all kinds, sorts and types of risk.

And I think you read about that obviously in the newspapers everyday. An example from really the energy side of the world is crude prices have doubled in the last year, but more importantly, volatility has gone up tenfold.

As a result, some of the business models on the energy side, and the policies just don't support that business climate and the opportunities and/or the risk that they see, it drives a need for – strong need for trading, better transparency of information, better risk control, better credit risk management, and better systems obviously to implement those things and those techniques.

And then when you look across companies in all industries, energy, including financial services, new compliance, new risk management requirements across those companies, that really turns into processes and systems required to support those requirements.

And this has also led us to what I'm going to talk about in a few minutes which is the opportunity as we see and we also see jointly with the Derivatives Consulting Group to capitalize on some of the opportunities in the marketplace.

Our TRM practice represents half of our financial services revenue, and roughly half of our energy services revenue.

In the final bucket of our business, really staying on the consulting side of our business, but outside of our trading and risk management practice, we also grew very well with strength in many key accounts, and the strength was really led by communications and energy. Recurring revenue grew to 46% of revenue, and our strong relationship base just gives us a great platform to continue, and continue our growth.

And back to the – back to the top, overall very strong quarter for us, and just take you back to Q1 '07 for a minute, when Joe and I laid out a road map, post our Q4 2006 earnings, around the improvement and the trajectory of Sapient, and we continue to be on track, on what we laid out for you, and our progress over the course of 2007 and 2008.

Strong operating profit improvement, 270 basis points of improvement over Q2 of '07, 300 basis points of improvement over Q1 '08, DSO of 63, strong operating cash flow at $22 million, and G&A consistent from last quarter, 18.3% of revenue, which continues at a record low for Sapient. We see a good set of opportunities from here forward.

Of course, we need to execute on those opportunities, and turn them into results, but we like our spot in the market. We've never been more highly differentiated, and we think our Q2 performance is evidence of that.

Now let me switch over to the second section, and spend a couple minutes to give you a feel for the acquisition, and how that fits into our strategy. And as you read in the press release, we're very pleased to announce the acquisition of the Derivatives Consulting Group, a leading provider of derivatives consulting and outsourcing services, DCG.

As I mentioned, our TRM practice is showing just tremendous strength and DCG is additive to an already strong part of our business, and we believe it will perform very well in the choppiness of the current market.

But even more importantly, we think there's a long-term trend there about the expansion of the derivatives business and the complexity of that business that we think we can really help clients with.

I'll give you a quick thumbnail on DCG. $35 million in revenues in the fiscal year ending March 31st '08. They provide services in business consulting, derivatives operation support, benchmarking, and training. They have expertise in equity credit commodities, interest rate derivatives as well as other derivative classes, and underlying cash products.

Approximately, 180 consultants, plus contractors, three locations, London, New York, and Singapore. 85% of their revenues are based in Europe, they got a strong brand, strong brand name client list, good diversification across that client list, and they really differentiate themselves very well around their deep know-how, and the fact that all their senior leaders were formerly in the banking business or part of buy side firms.

And I'm going to try to give you a little feel for what's driving the combined – the opportunity for DCG, but also what's creating the combined opportunity for DCG and Sapient. And I guess simply said, regulatory agencies, especially in this environment right now like the Fed have mandated specific performance levels in derivatives processing.

Along with other drivers the financial institutions have in being able to assess risk, manage their processes efficiently, have all contributed to the opportunity for DCG and now Sapient. And much of the same themes and drivers that talks about overall for the success and the performance that we're seeing out of our trading and risk practice.

I can give you a couple examples of the type of work that they do. So if you look at the operations, support, and business consulting part of their business, an example of what happens is initially clients will engage them to solve processing breaks that they have in their derivatives processing.

Like breaks in equities, commodities, interest rate or FX derivative transactions, and DCG really can come in and help clients fix those breaks, and complete the processing of those transactions.

While they are actually performing that service, they obviously can see some consulting opportunities that they can engage with their clients to really help them identify and solve the root causes that caused those issues to begin with and then help them drive and create solutions.

It might also be obvious that many of those solutions should and can be technology-enabled, but currently, DCG does not have the technology capability that Sapient has, but obviously with Sapient, we have the ability to actually take advantage of that opportunity or help clients with that problem.

If you look at their trading and benchmarking business, I think the simplest way to say, it is their, their benchmarking business really helps clients measure the effectiveness and efficiency in processing derivatives. And then their training services really help their clients understand the theory, and the practice of processing those derivatives, and processing them properly.

And I'll give you one more client example, and then move to the recap. But they have just completed an assignment helping a client review and redesign their procedures and documentation to react to a credit event if one should occur. They then help the client test the processes and procedures by running simulated credit events through the new processes.

So overall, DCG, we think is a great acquisition to Sapient. It really adds to the great momentum we have in the space, and that our trading and risk practice has created in the space. DCG will operate as part of our trading and risk management practice and report to Chip Register, our Global Head of Trading and Risk.

And as we grow and integrate their business over time, we will also see leverage with our global delivery model, as well as systems opportunities I mentioned earlier, that DCG identifies in their work, but can't capitalize on currently.

As well as a final point I would add is they really have access to operational budgets and operational buyers that really drive the kind of work we do. And we love that idea, because we've got access to technology budgets, marketing budgets. So now, starting to be able to tap into operational budgets is also an important idea for us as we go forward.

But back to the top overall, I'm very proud of the team at Sapient. This is just great performance for us, top to bottom, very pleased with where we are, and what we have laid out to accomplish over the last couple years and where we sit today.

So with that, let me hand it over to Joe to walk you through the details and the financials.

Joe Tibbetts

Great. Thanks, Alan. Good evening, everyone. I'm going to take you through the details of the second quarter results. And I'll begin with the P&L and then move on to the balance sheet. I'll wrap up that section with our guidance for the third quarter, and for fiscal 2008, and then I'll also include some more details on the acquisition of the Derivatives Consulting Group.

So on the revenue side, as Alan mentioned at the beginning of the call, consolidated service revenues for Q2 were $165.8 million, an increase of 29% from the same year last year – same period a year ago, and an increase of almost 8% from Q1. On a constant currency basis, Q2 service revenues increased 27% year-over-year, and again, 8% quarter-over-quarter.

Next, looking at our revenue by industry, we saw again, pretty consistent growth across our industries. Financial services once again generated 28% of our total revenue. It was very consistent with Q1, and as you know for several quarters now. Technology and communications generated 20% of total revenue.

In Q2, that was down slightly from 21% in Q1. Consumer and travel was 21% of total revenue. In Q2, that was up slightly from 20% in Q1. Energy services jumped up to 14% from total revenue from 12% last quarter, and then government, health, and education was 15% of total revenue in Q2, down slightly from 16% in Q1.

Moving on to recurring revenue, which includes revenue commitments of one year or more in which the client has committed spending levels, which are cancelable or has chosen us as an exclusive provider of certain services. This was 46% in the quarter, up from 44% in Q1 and up from 36% in Q2 of last year.

The percentage of service revenues coming from our top five clients in the second quarter was 24% compared to 25% in the first quarter and also a year ago. Q2 revenue was split 48% from fixed price contracts, and 52% from T&M.

Moving on from revenue to gross margin and operating margin, again, I'm going to use the non-GAAP numbers we feel they are more accurate reflection of the company's comparative performance.

Overall, second quarter gross margin excluding stock-based comp was 34% compared to 32% in Q1. That's consistent with 34% a year ago quarter. Selling and marketing expenses excluding stock-based comp was 6% of service revenues consistent with Q1 and Q2, a year ago.

G&A expenses, general and administrative expenses, excluding the usual things that we take out for stock, for non-GAAP, for Q2 was 18%, again very consistent with Q1, and compares favorably to 21% in the same quarter a year ago. Our total stock-based compensation expense for Q1 was – sorry, Q2 was $4.4 million versus $4.5 million in Q1 and $4.7 million, a year ago.

Restructuring and other related charges were a benefit of $136,000 in Q2 compared to an expense of $143,000 in Q1. On operating profit, the Q2 non-GAAP operating profit was $17.3 million or a strong 10.4% of service revenues. This compares to $11.4 million last quarter which was 7.4% of revenue and compares to $9.9 million, or 7.7% of revenue in Q2 of last year.

GAAP operating profit was $12.2 million or 7.3% of revenue compared with $5.8 million or 3.8% of revenue in Q1, and in Q2 of last year, where we reported a GAAP operating profit of $1.4 million, or 1.1% of service revenues.

On the foreign currency side of the business here, the foreign currency transactions netted to a gain of $1.3 million. Those as you know were included in general and administrative expenses. This compared to a foreign currency transaction gain of $0.6 million or $600,000 in Q1.

The translation gains in the quarter totaled half a million across all the currencies as sequentially compared to Q1, and the effect of this currency gain is distributed throughout the P&L based on the nature of the expense being translated.

And then we continue to use the 90-day hedging program, using zero cost callers to limit our exposure to the Indian Rupee, and this quarter the impact of those hedges was naturally a loss of approximately 530,000, which partially offset the recorded gains noted above.

On interest and other income, moving on to that, interest and other income net totaled $1.6 million in Q2 compared to $2.8 million in Q1 and $1.2 million, a year ago. You'll remember that in Q1, we had some one time type items in that number. So $1.6 million this quarter. Income tax provision for Q2 was $2.2 million.

The effective tax rate resulting from that on the profit before tax was 15.8%. That included discreet items of about 4.1%, and this reflects our current estimate of the tax rate for the year, and is down slightly or roughly similar to – little bit down I guess from last quarter, and in the range of guidance that we have been giving you for several quarters now.

Our Q2 non-GAAP net income was $16.7 million versus $12.7 million in Q1 and $9.4 million in Q2 of last year. Non-GAAP diluted earnings per share were $0.13 per share in Q2 versus $0.10 in Q1 and $0.07 in Q2 '07.

GAAP net income was $11.6 million in Q2 compared to $7.1 million last quarter, and GAAP net income of $800,000 in the second quarter of 2007. GAAP diluted earnings per share were $0.09 per share in Q2 versus $0.06 last quarter and $0.01 a year ago.

The weighted average common shares for the second quarter were 126 million shares, and 129 million shares on a basic and diluted basis respectively. This is a decrease actually from last quarter as we suggested it might be of approximately 500,000 shares, and that's primarily as a result of our repurchases of stock during the quarter.

Switching over to the balance sheet, I'm just going to walk through the most significant balance sheet accounts. Cash and marketable securities including about $2.5 million of restricted cash increased by $2.7 million to $167.5 million from $164.8 million at the end of Q1.

Cash flows from operating activities in Q2 generated $22 million for us. That versus – that compares to a use of cash in Q1 of $6.8 million. And as you may recall, cash flow for us is seasonal as a result of the compensation payout in Q1 of each year. Cash generated from operations in Q2, a year ago was $5.8 million.

Our investments in the end of Q2 included $19.3 million of auction rate securities as compared to $21.3 million held at the end of last quarter. We continue to carry a temporary impairment on those securities of about $1.2 million, which as you know, we recorded against other comprehensive income in the equity section of the company's balance sheet, and we've classified these securities as long-term to reflect the lack of liquidity currently for these securities in the marketplace.

Reiterating on what we've said in the last few calls, our auction rate securities are collateralized by student loans and to a minor degree now, by municipal debt. To be clear, none of these securities were backed by residential or commercial mortgages or subprime debt.

Accounts receivable, net of allowances increased to $89.2 million at the end of Q2 and $85.8 million at the end of last quarter. Unbilled revenues at quarter-end were $44 million at the end of the quarter compared to unbilled revenues of $37.8 million at the end of Q1.

Deferred revenues totaled $13.3 million in Q2 compared to $10.3 million in Q1. DSO, as Alan mentioned remain flat compared to Q1 at 63 days, and was improved by 17 days; from the 80-day DSO we had a year ago.

Our people count at the end of the quarter 6,265, within that number 5,364 people in delivery, of which 3,589 are India-based delivery, and that compares to our count last quarter of 6,389, with 5,505 in delivery, of which 3,801 were India-based.

We continued to buy back shares in the second quarter, and repurchased approximately 1.1 million shares for $7.9 million. That averages about $6.95 a share, and this used up the remainder of our authorized buyback program.

Currently, we have no plans to renew our buyback authorization, but as you know, this is an ongoing consideration by both management and the board of directors. As you know also perhaps our quarterly report on Form 10-Q was filed earlier today. So that's the quarter picture.

Moving on to the DCG acquisition, relative to that, the terms of the acquisition included initial consideration totaling approximately 14.1 million British pound, which if you use roughly 2 to 1 is about $28 million or just north of that at the current exchange rates in US dollars. That includes transaction costs of approximately 1.1 million pounds.

The initial consideration consisted of approximately 10 million pounds in cash, paid at the closing, and approximately 3 million pounds in company stock. 33% of the company stock was issued at the closing, and the remainder will be retained by the company in escrow until 18 months after the closing date.

In addition, the purchase agreement provides for earn out payments and those payments are contingent on the business meeting define financial performance targets over the next three years. The contingent consideration is payable in company stock, 100% in company stock over the periods of 2009, '10 and '11, and is capped at approximately 18 million pounds in the aggregate if all those targets are met.

A few comments on the financial impact of the acquisition of DCG on our results for the remainder of this year. The company's, meaning DCG's, net revenue for their most recent fiscal year ended March 31st was approximately $35 million.

DCG's margins and operating profits are anticipated to be very much in line with ours, and should not have a material impact on our consolidated expense and profit percentages, and the acquisition is neither accretive nor dilutive to EPS.

Their business is very similar to ours in the way it works, in its nature, and as a result, we expect it will be fairly easy to integrate over time. We don't anticipate a material cost increase from the integration process itself.

Moving on to guidance, as noted in our press release, we expected the third quarter service revenues will be $177 million or higher, and that takes into consideration some good organic – very good organic growth across the business, including financial services, and includes $7 million of post-acquisition revenue in the quarter from the DCG business.

So we'll recognize DCG revenue from the acquisition date yesterday through the end of the quarter, and that we expect will be somewhere in the order of magnitude of $7 million. We expect that our Q3 non-GAAP operating margin will be 10.5% or higher for Q3.

We expect that organic growth in the annual fiscal 2008 service revenues will be in the range of 20% to 25%, so consistent with what we've been saying. And in addition, we expect that revenue from the DCG business post-acquisition in 2008 will total in excess of $18 million.

We also believe that we're still on target to exit 2008 with our non-GAAP operating margin within our targeted range of 13% to 16%, yielding us 10% or more in non-GAAP operating margin for the year. The DCG operating margins, as I mentioned, should not materially alter how our profit margins come out for the year.

Several other small data points I want to share with you. Our guidance is largely foreign currency neutral for the year. We've obviously got some consideration of what we know about Q3 currency movements thus far, but, Q4 is neutral.

Training – trailing expenses for outside services relating to the 2007 restatement are expected to continue at about $400,000 per quarter, and that relates to ongoing tax and legal work.

Stock-based comp is expected to continue at similar ranges of $4.4 million to $4.8 million per quarter. And as I mentioned, our effective income tax rate is expected to remain in the 15% to 20% range for the year – for the third quarter and for the full year 2008.

And just to remind you, this reflects our current expectations for higher level of profit in the U.S. than in 2007, allowing our book tax rate to benefit from our U.S. tax loss carry-forwards. So we end up with a blended rate reflecting our favorable tax position in India. Our transfer pricing arrangement for non-U.S. business and the favorable effect of our US net operating loss carry-forwards.

We expected our weighted average basic share count to increase approximately 500,000 shares in Q3. That's the result of the usual option exercises, RSU vesting, and then also now the shares issued in connection with our DCG acquisition. The weighted average basic shares for the whole year 2008 are now expected to be in the neighborhood of 125.8 million.

And with that, I'll pass the call back to you, Alan.

Alan Herrick

Great. Thanks, Joe. Overall once again, very pleased with our performance, and I think it's a great testament to what we're seeing in the market, and we've got exciting opportunities in interactive and trading and risk to capitalize as we go forward, even in a choppier, less certain environment than there has been in the past.

29% growth year-over-year, 10.4% non-GAAP operating margin, strong cash flows, strong performance on DSO, and of course the strategic acquisition of the Derivatives Consulting Group to extend what's an already extremely successful practice in our trading and risk practice. So strong top to bottom for us, I think Joe and I are both very pleased with where we are, and let me wrap there.

And operator, we'll turn it over to Q&A.

Question-and-Answer Session

Operator

(Operator instructions) Your first question comes from the line of Rod Bourgeois with Bernstein. Please proceed.

Rod Bourgeois – Bernstein

Yes, guys. Just wanted to start by asking about your 2008 revenue and margin guidance, where you attempted to raise this 2008 guidance, given the strong performance in Q2, you certainly are exceeding the street's expectations, so to the extent that you're exceeding your own. Were you attempted to take up the full year guidance?

Joe Tibbetts

Rob, we certainly had a good quarter and helped us with our confidence towards meeting our goals for the year. I think we feel that the low end of some of the ranges we've given are a little easier to achieve now, but we thought we should stick with the ranges that we have.

Rod Bourgeois – Bernstein

Got it. That makes sense. I mean I think in this environment, just keeping the guidance intact probably does make sense given the skepticism of investors not related to the macro environment. The longer-term operating margin goal has been 13% to 16% in the long run. That's also your target for Q4. Are you feeling better about that longer-term target of being able to do 13% to 16% on an annualized basis at some point in the future?

Joe Tibbetts

Yes. I mean I think what we have said before about that is still true. And that is that's a goal we set out for ourselves sometime ago. As you know, we've been marching towards it, and being very successful in approaching in and as we've reiterated tonight, we think we're going to get there. I think the thought is as we get closer to it we're going to be able to look around from that level. We'll look at the market, look at our business, decide what we're doing, and then assess what our next longer-term goal should be, how much additional profit can we add on top of that. So I think it's a little premature for us to react too strongly to that right now, but certainly it's our goal to continue to improve profits of the company.

Rod Bourgeois – Bernstein

Right. Okay. And then just a quick sort of question about the share buyback. Why no plan to add to your share buyback program?

Joe Tibbetts

I think it's just a matter of we want to continue to keep the ability to make strategic moves, if we decide we need to do that, or want to do that based on what we see in the market, what we see for opportunities to serve our clients the way we want to. We've said before, there's always an amount of money you want to have tucked aside for the rainy day, you need your normal working capital, we have the issue of the amount, almost $20 million of auction rate security money that, at this point is not liquid, although we hope and believe that longer-term it will be. And then we've got the usual distribution of cash around the world that some of which access would come at a short-term price of taxation and that sort of thing. So putting that all together, the decision at this point is to hold, but as I said in my remarks, that's a topic of constant discussion as we go forward, and will be something that we continue to address as we go forward and could go either way.

Rod Bourgeois – Bernstein

All right. So final question, I mean, it sounds like there may be more acquisitions to come given the need to sort of hold the cash. So talking about your latest acquisition here, can I just ask why, why acquire this higher end consulting group rather than partner with the group like that? And I mean what was the rational on acquiring rather than partnering? You were probably doing some partnering already, but why the decision to go full bore and actually buy this unit?

Alan Herrick

Yes, I think, Rob, perhaps it's fairly simple. We see a great opportunity in the market, and a great opportunity in where our services cross theirs, and I think you look at the long run and what they do as a business, I think both for them and for us, India is a very important idea to the future of that business, and how it might work. I think that also is kind of one of the keys to how you might scale, and really start to take a very dominant position in the kind of work we – they do, which I mentioned in the overview. So we thought that the – and also I mentioned that they see a lot of technology work, but the ability to see it and to do it, and take advantage of that, we think that becomes much more of an integrated package with onshore and offshore capability with high end consulting and processing capability. And we think that package to the market of more of a full end service offering to our clients, of what we can combine, is a great spot for us, and a spot that we can think we can create dominant mind share for.

Rod Bourgeois – Bernstein

But why are they selling? I mean it sounds like this market segment is pretty hot right now. Are they selling because they want the ability to leverage your offshore capacity and technology abilities? Or are they selling because they want to cash out? I mean can you talk about the rational there?

Alan Herrick

Yes. Sure. I think obviously in long discussions with them about this I think there's couple ideas. One is this opportunity is pretty large and a lot of the competitive set, Rod, in this opportunity is the internal folks and operations. So, it's a different kind of idea where you can actually deploy to help companies be more efficient, but kind of offset some of their internal needs and staffing. And I think you look at the size of the opportunity, and you say, they are doing an excellent job with it, but this opportunity could be very large if somebody really went after it. So I think part of the idea is a combination of the company like Sapient gives you a better chance at reaching your overall aspirations, and really taking a strong mind share position, and really being proud of what you accomplished. But then additionally, as you mentioned, I think they get the offshore idea, and that this is not impervious to offshore, and if you take somebody that's got kind of high end business consulting, our level of business consulting, and TRM, but then a player that really understands how to offshore those types of components of business, you can create a great model for your clients. So I think they see the opportunity to go faster with us, and I think they also see the opportunity to avoid the threat, and become the opportunity around actually deploying India or other distributed types of work and effort into their model.

Rod Bourgeois – Bernstein

Great. Thanks, guys.

Alan Herrick

All right. Thanks, Rod.

Operator

Your next question comes from the line of Jason Kupferberg with UBS. Please proceed.

Jason Kupferberg – UBS

Thanks. And good afternoon, guys.

Alan Herrick

Hey, Jason.

Joe Tibbetts

Hi, Jason

Jason Kupferberg – UBS

Hi. I just want to start with a question on margins, and Joe, I don't think you called anything out, that was one time. (inaudible) obviously you did quite a bit better than you guys had forecasted. Now, it looks like for the third quarter you're forecasting a little bit of quarter-over-quarter improvement, maybe in a normal year there would be a little bit more of a seasonal pickup from Q2 to Q3, but I know you got vacations and stuff, but usually you have some pretty steady margin progression in a normal year across the quarter. Is anything different this year in terms of more margin pickup in Q2? Or any change in the typical seasonal pattern? Or are you just being conservative on Q3?

Joe Tibbetts

Yes. The insight I think on Q3 is this is the time of year where we have to absorb the wage increases, because those are all effective July 1, so right at the beginning of the quarter. So we're considering that in that, there is the vacation impact that may or may not hit us, sometimes it hits us more than others. And I think we're just really looking at that and saying, that 10.5% is the right place to be pointing to at this point.

Jason Kupferberg – UBS

Okay. And on DCG, can you give us a sense of how fast that business has been growing, obviously it's a fairly small base, but, and then how would we think about its growth potential, on kind of an annualized basis going forward?

Joe Tibbetts

Sure. So it is a smaller base, so and they have been growing very nicely. I'm not really at liberty to say how fast, but it was obviously part of what attracted them to us – or us to them, I should say. And then, the fact that we've built – we sort of given you some sense of both Q3 and Q4 here, the partial Q3, and then a full quarter of Q4, we're not prepared to say specifically anything about future growth, but obviously, our expectations in acquiring a company like that is that, and all the kinds of things Alan's talked about in terms of where they sit in the market would lead you to believe that we feel that their growth potential is right there with ours. So, just order of magnitude, you're talking about very strong growth.

Jason Kupferberg – UBS

Okay, and then just a follow-up on DCG, I was trying to triangulate some of the comments, I think Alan you had made in terms of what it represents as the percent of some of your verticals. I'm talking about the total TRM business and with DCG in the mix, am I right that total TRM might now be I don't know 25% or 30%–?

Alan Herrick

Joe, I'll look at you here for a second, but I said it's approximately half of our financial services business, half of our energy business, but then in recutting the numbers with DCG–

Joe Tibbetts

So, you know, half of 28% of financial services is 14, half of energy is another 7, (inaudible) 21, and then the kind of – we've sort of given you the order of magnitude of new revenue there. So when you put that altogether that probably jumps those numbers up another 4% or so.

Jason Kupferberg – UBS

Right. So now TRM plus interactive is like 70% of your business?

Joe Tibbetts

Yes. You got to be a little careful with that, because there is some overlap in that between those two, there're not – sort of you're cutting it two different ways in making that statement. But it gives you some sense of order of magnitude of each of those pieces, yes.

Jason Kupferberg – UBS

And just last housekeeping item, on cash flow guidance, I think you guys had been looking for something north of $60 million of operating cash flow this year, and $30 million of CapEx. Is that still intact?

Joe Tibbetts

Yes, the $60 million, I think we still very confident about. We're running a little bit slower on capital expenditures through the first half, so I think probably the 30s, probably a little bit high at this point. I'm not prepared to decide that up too closely for you, but that's probably going to be the high end of possibility, and then we'll probably run a little bit less than that. We've been little bit frugal on our capital expenditures.

Jason Kupferberg – UBS

Okay. Thanks for the color, guys.

Alan Herrick

Alright.

JoeTibbetts

Thank you, Jason.

Operator

Your next question comes from the line of Mark Marostica with Piper Jaffray. Please proceed.

Mark Marostica – Piper Jaffray

Thank you. I just wanted to ask a question concerning the ending people count being down sequentially in the quarter, and I know you commented on that last call. Maybe go over that for us, and then give us your sense of where your head count expectations are by the end of the year. Should we see that head count pick up in Q3 or continue to go down?

Alan Herrick

Well, let me start with the last question. Joe might be able to recap from the first call and the first question. But the last question obviously is we expand revenue over the back half of the year. We do expect people count to go up. Now, we're also increasing our profitability as we've talked about through increases in effective utilization, and increases in pricing, which you've obviously seen great improvement here on Q2, but there's more planned improvement for the back half of the year. So, if you will, that will create a difference in what the revenue growth outlook is, and what the people count, but there will be – obviously those things won't be correlated exactly, but will still be largely correlated, if you will, as we grow over the back half of the year. And as far as sequential head count down, that was – if you remember – and Joe can walk you through the other quick.

Joe Tibbetts

I don't know if you were just looking for color on the numbers or the numbers again.

Mark Marostica – Piper Jaffray

Actually you don't need to go through that. I was more just looking for the look forward.

Joe Tibbetts

Yes.

Mark Marostica – Piper Jaffray

I got you on that.

Joe Tibbetts

I think the behavior, the sort of number movements in Q2 were very consistent with what we thought they would be given the small action we took in India with a specific segment of people, and then normal turnover and then normal hiring, frankly.

Mark Marostica – Piper Jaffray

Okay. And then regarding your other comments, just among the head count topic, you mentioned, Alan, in interactive, you would be stepping up senior hiring. Can you give us a sense for how many people you'll be planning to hire, maybe what incremental expense we're looking at?

Alan Herrick

Yes, obviously not to mention it on this call, I really don't want to telegraph the details of that probably where there are competitors than you, but I think the best way to think about it is, obviously, we're seeing a strong set of opportunities, so the areas that we're really focused on is increasing our senior business development capability, continuing to increase our marketing services strategy capability would be the best way to sum up those positions. So it's not armies of people. It's the right senior hitters to really take advantage of the success that frankly we've created over the last couple years on the marketing services in the interactive side.

Mark Marostica – Piper Jaffray

Got it. When I look at your selling and marketing costs back in late '07, obviously there is a pretty nice jump into March of '08, and then consistent with that, we saw similar level in June of '08. Is this the run rate now that we're looking at essentially? Or how should we think about how you're targeting to spend in the marketing – selling and marketing line?

Alan Herrick

Yes, I think you'll see a little ebb and flow in that as we make different investments. As we talked about, we had good positive strength. We thought in '08, we continued to hire into Q1. I mentioned that on the last call. And again as I mentioned some of the people that we will be adding would actually be business development expense, but of course, they are running against much – running against higher revenue. So on a percentage basis part, I wouldn't – a little ebb and flow, but I wouldn't expect any – anything to note materially.

Mark Marostica – Piper Jaffray

Just a couple follow-ups on DCG, and I'll turn it over. Have you any client overlap currently with DCG?

Joe Tibbetts

Yes. We do. They have obviously very strong list of clients. We have a lot of client overlap, but almost no buyer overlap.

Mark Marostica – Piper Jaffray

And just one last question. Curious if you worked on any joint engagements with DCG, and any feedback there?

Alan Herrick

Well, we've tested it with some clients prior to announcing today who – and what the combination might look like, and obviously the support with those clients was great, and we're very pleased to hear that. And we are currently pitching work jointly together so that we have companies that obviously know both of us, and we look very excited to put those two ideas together.

Mark Marostica – Piper Jaffray

Great. Thanks. I'll turn it over.

Alan Herrick

Alright. Thanks, Mark.

Joe Tibbetts

Thanks Mark.

Operator

Your next question comes from the line of Julio Quinteros with Goldman Sachs. Please proceed.

Julio Quinteros – Goldman Sachs

Hey, guys. First off, definitely need to eat some crow here for the momentum that you guys have been sustaining here, so great job on that front.

Alan Herrick

Thanks, Julio.

Julio Quinteros – Goldman Sachs

I guess on the first question, I want to understand is, looking at the both the pricing and the utilization as levers for kind of the sustained margin trajectory, which has been basically the issue that we've been sort of picking on, utilization is already running at roughly 76%. How much higher do you think that goes to get to your sort of run rate as far as your margin target is concerned? And then in this environment, what are you guys expecting from pricing to help you sort of sustain the margin trajectory as well?

Alan Herrick

Yes, let me start with the latter, and then move to the former, Julio, that on price – on pricing, we do expect some more gain as we go forward to offset wages and a bit better, but quite frankly, we've seen a lot of good pricing gain over the last few quarters now. So we've gotten a lot of that. Expect some more, but I think probably the – we've talked about kind of when you look at the gross margin improvement in the back half of the year, probably a little more through effective utilization than through pricing at this point, and when you look at effective utilization, it's not the raw number. We've got – as we talked about over the last couple calls, because we got a big fixed price component, we have a loss in that number, right. So when we give away extra days to complete fixed price assignments, that makes our utilization look very strong numerically as a readout, but in actuality, doesn't provide us economic gain, provides us economic loss.

Julio Quinteros – Goldman Sachs

Right.

Alan Herrick

So it's not the raw number. So the 76 I think could go a bit higher, but we're really looking at the quality of that number underneath, and we think there's obviously still good room for improvement. I think I mentioned this last time, not just in 2008, but even in 2009, around really getting the quality of that number right, and the effectiveness of that number right, but making sure that we're operating effectively in the work that we deliver on fixed price engagements.

Julio Quinteros – Goldman Sachs

Is there a way to think about that sort of on site, versus offshore like what levels would you be willing to run to get to that run rate, both on site versus offshore? Assuming that the on site piece is always going to be a little bit higher in terms of utilization?

Alan Herrick

Well, no, not for – well, I'm trying to think how – it's really if you remember, we're – big part of our team is still local citizens.

Julio Quinteros – Goldman Sachs

Right.

Alan Herrick

If you look at our staff, and then obviously the folks in India. And for us, you have a small component that travels, but we don't have a lot of onshore as a component, as I think what you're mentioning what the Indian companies term it as. We really have right – our folks in India and local utilization with our citizens, and really it's around the improvement there is just continuing to improve our execution, and making sure that we execute closer to plan on some of our fixed price assignments, is really probably the material improvement utilization. And of course, it can tick up I think a bit from where it is at 76. I've talked about in the past, a number that looks more like 78 on a blended basis, but it's really the underlying quality of that number.

Julio Quinteros – Goldman Sachs

Got it. And then just in terms of the post DCG head count mix, it sounds like you guys obviously plan on spending some of the DCG work or some opportunities over to offshore. What would the sort of post acquisition mix look like in terms of on site folks versus offshore? Any way to think about that or how much more of that head count could go offshore? I know it's not a big number. I'm trying to get a sense for what you guys are thinking there.

Alan Herrick

Yes, I think there – what we really want to do, and at the time, we just have to make sure that they continue to grow successfully. Great market opportunity. We don't want to do anything to disturb them, but really take them and really tuck them in with our TRM business, and really get those things growing great guns together. I think over time, as their business expands, and they take on more opportunity for technology work, and more expanded work around processes and outsourcing, we'll look to have people from India help out, or other parts of the world, help out with that kind of work. So I would see that more as blending over time as the business expands. But I don't have any specific numbers in front of me I could share.

Julio Quinteros – Goldman Sachs

And then just on the – sorry, the currency impact in the current quarter. Joe, can you just go back through that? I want to make sure I understand, because there was depreciation of the currency in the current quarter. How much of that benefit you guys at the operating margin level if you can just walk back through some of those numbers that you had given us prior on the P&L impacts of currency?

Joe Tibbetts

Sure. Yes. It's about $1.3 million of transactional gain. That's the inter-companies and the third party – anything denominated in foreign currencies as a transaction.

Julio Quinteros – Goldman Sachs

And that's flowing through the income statement or no?

Joe Tibbetts

That flows through the income statement. Then you have translation gains themselves, which is about half a million. That flows through the income statement. And then against that, which is basically the hedge against those translation gains of just another $500,000 going the other way of a loss on our hedging contracts. So largely successfully offset, which in hindsight you didn't have it on a time when you have gains, but we're trying to dampen the effect of the translation aspect of our foreign currency gains and losses. So that went against us. So the net is about $1.2 million or so $1.3 million.

Julio Quinteros – Goldman Sachs

Got it. And then how are you thinking about currency for the rest of the year? I guess more than anything on the Rupee side?

Joe Tibbetts

Yes. There has been a little movement this quarter thus far. Sort of from there on be pretty neutral, not knowing which way the wind will blow on the Rupee, because it is kind of jumping up and down somewhat but pretty unsteady. And that's the biggest, that's the one that moves us the most. The Canadian dollar has weakened against the U.S. dollar. That will hurt our revenues a little bit, but not enough to really talk about right now.

Julio Quinteros – Goldman Sachs

Great. Thanks, guys. Congratulations.

Alan Herrick

Alright. Thanks.

Joe Tibbetts

Thanks, Julio

Operator

Your next question comes from the line of Matt McCormack with FBR. Please proceed.

Matt McCormack – FBR

Yes, hi, good evening. I would like to drill down on the quarter, and obviously, the results were very strong, much stronger than you had guided to, and I think it's surprising given that Sprint declined as much as you thought. So could you just give us a little bit more color on what exactly outperformed versus your prior expectations?

Alan Herrick

I think if you really look at what's performing well for us across the board it's really our interactive business. We continue to see great strength in, from our marketing services components through to e-commercing, platforming, to a variety of different types of services. As clients try to figure out that world and try to really take advantage of acquiring new customers in a variety of different ways in a competitive environment that's less understood everyday.

So I think that continues to drive short-term strength, but also obviously is a secular trend for us. And then as I talked about at the opening, trading and risk in this environment, clients of all types trying to understand how to look at risk, how to forecast it better, how to manage it, new compliance requirements coming down. And they all drive needs for somebody that can help them better understand that risk, and help them look at their processes, can help them implement their system. And again, we think we're in a very unique position there, both what we can do in interactive, and what we can do on the consulting and trading and risk side, and we're seeing obviously a lot of growth in our pipeline around those opportunities as witnessed by the size and the share of those, and as witnessed by our further investment in senior people in interactive, and of course, the acquisition in the Derivatives Consulting Group.

So those are really the main drivers. But also, you saw recurring revenues jump in this quarter. And I think, we've talked about kind of our breakdown across clients before, and I won't walk you through all that again. But we've got a lot of strong relationships in what we've termed in the past with you is house accounts, and those continue to be a great base of operation. Great people doing great work for their clients, committed to getting things done, and that matters in this environment where risk is high you want a partner they can take on that risk, that you can look across the table and say, listen, I need to get this done, are you the guys to do it? And we're the kind of company that responds very well to that, and can offer a broad set of services across our clients problems, and those are really the spots that we're seeing the expansion in.

Matt McCormack – FBR

You had mentioned – I misunderstood competitive environment. Can you remind us again who you specifically compete against both on the interactive side and the TRM side, and if you've seen any change there?

Alan Herrick

I think on the – I'll take TRM first. The competition, there's a lot of folks that compete around TRM, but nobody with the depth and the precision that we have. You might have a lot of western companies that might have financial services, practices, or capital markets practices. You really don't bump into anybody that's got our precision in the space. So you bump into all the western consultancies, but nobody really looks or feels or has the depth we have in that space. And then when you look at the interactive business, there is a lot of folks, because there is a lot of opportunity in that space, some small and some medium, and that go from holding companies to sub-holding companies, to some independents that are out there. But I think what we're seeing also as clients continue to look at this as a bigger idea – because I think they used to look at as, hey we're doing our marketing strategy, and we need to do some online. And I think they're starting to look at it as we need to effectively communicate our brand across all channels, and we've got to communicate our brand effectively, especially online, or the internet will actually lead to commoditization of our brand and to our pricing. So if this really isn't thought through and connected to our brand, our brand promise in a way that we can hold our positioning as a company, our strategy and our pricing, we're not going to be well served in what's one of the most effective economic channels anybody's ever seen for customer acquisition. So I think when you look at that idea, you're seeing a trend to actually move towards companies – well, somebody like us that actually has broader capability, that can help you sort the idea, that can help you drive the business case for the idea, come up with great creative, and ideas, and content, and then actually implement it for you. And I think that's playing to our advantage right now.

Matt McCormack – FBR

And then my last question relates to visibility. You obviously reiterated your guidance, and I just wanted to get a sense of is it predicated on any increase in budget spending in the back half of the year?

Alan Herrick

No, for the back half of the year, as we said, I think we might have said this on the last call we're expecting things to stay as expected, and as they have transpired so far. We have good visibility into the back half of the year and similar to what we had, when we reported our Q1 results. So we think in this environment, we can execute based on where we sit in the market, and the type of value we bring to our clients.

Matt McCormack – FBR

Okay, great. Thank you.

Alan Herrick

All right. Thanks, Matt. Operator, we could take one more call.

Operator

Your next question comes from the line of Ashwin Shirvaikar with Citi. Please proceed.

Ashwin Shirvaikar – Citigroup

Hi. Nice quarter, guys.

Alan Herrick

Thanks, Ashwin.

Joe Tibbetts

Yes.

Ashwin Shirvaikar – Citigroup

My question, M&A seems to be sort of higher up now on your use of cash now than it seemed before. Can you provide some color on the nature of the pipeline you're looking at? Is it more in your faster growing interactive TRM side strategically?

Alan Herrick

Yes. Sure. I think that I don't know if it's higher up, and we've talked a little bit over the last year is but one thing we have to – that we recognize is that we're having great success in the interactive side, and overall for the business right now. But as I've talked about with what's happening with our clients, there's companies formed, and formed, and bought everyday, and there's a lot of different things happening in the interactive space. And I just think we're prudent to be able to see what's happening. And if we see anything, and we don't feel like we're in a position, or we probably would have done something by now, as it relates to interactive, but we don't feel like we're in a position where we – there's something we need to do. But we also recognize that this environment is changing so fast that we want to have the option to – if something arises that again, we think really strategically moves the needle for us that we have the ability to consider that. And I don't know if that's really a change in our thinking, maybe more highlighted by the fact that we've done an acquisition here today. But again, I think it's a fast-moving environment. We want to keep our eyes wide open. We're playing for the long-term here. We think we're in a good position, and that's what we see from here forward.

Ashwin Shirvaikar – Citigroup

And on the interactive side, just going back to that, in the last – just in the last seven to 10 days, some of your comps publishes ICG – IPG, they basically they made kind of pinpoint acquisitions, and obviously, you won't see any impact from small acquisitions in seven, 10 days, but just from these companies sort of maybe finally getting it, is that creating more of a tougher competition for you? Or are you so far ahead of the game you think that it's not much of a concern?

Alan Herrick

I think that, I think we feel very good about our capability set, but the – obviously the opportunity changes its characteristics as our clients evolve, as the market changes, and market evolve. But I think what you're saying is true. More and more people are recognizing what I think we believe going back all the way to 2005 when we did the acquisition of PGI, that this is one of the biggest things people are going to see in changing consumer behavior, and how people function socially around the internet. And as witnessed by our win rates, we think we're in great shape capability wise, and I'm sure there's going to be lots of competitors. Any time you've got an opportunity this size, I think that draws competitors. But again, I think we feel good about our spot. We feel good about our win rates, and we're obviously seeing that opportunity set grow for us.

Ashwin Shirvaikar – Citigroup

And then lastly, any parts on moving to sort of a GAAP basis of presentation now that that number is becoming much healthier than before?

Joe Tibbetts

Yes. I mean I think we're trying to give both, Ashwin. There's very strong mix of our investors and analysts who have different ways of looking at the business, and what they consider important. Some are more oriented towards straight GAAP numbers. Some are oriented towards adjusted GAAP numbers. So we're trying to give both. We try to be very transparent about what progress we're making on both, and as you know, we are making progress on both, and our GAAP numbers are starting to look very good. So I think for now, we'll continue along both paths, and continue to assess how analysts and investors want to look at us, and how we want to be looked at.

Ashwin Shirvaikar – Citigroup

Great. Thanks. Congratulations, again.

Alan Herrick

Alright. Thanks Ashwin.

Joe Tibbetts

Alright.

Alan Herrick

Thanks, Ashwin. All right, operator, we'll end it there, but just some quick comments. Thanks, everybody for hanging in an extra nine or 10 minutes with us, and we appreciate it. Again, strong top line growth at 29%, 10.4% non-GAAP operating margin, and we're pleased in top to bottom as I said with the quarter. Very happy that we sit in this position, and I think simply said, as we have said in this market that's less certain, and more uncertain than markets that people have seen in the past, we've just got some very exciting things to talk about, and I think they continue to perform in both our investments and interactive and TRM, and now with the extension of the Derivatives Consulting Group, and we're very excited about that, and what it's going to do for us long run. So thanks again for joining, and operator, we'll wrap there.

Operator

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a good day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Sapient Corporation Q2 2008 Earnings Call Transcript
This Transcript
All Transcripts