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Good morning, ladies and gentlemen, and welcome to the Q2 2019 Perficient Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.
I would now like to turn the conference over to your host, Mr. Jeff Davis, Chairman and CEO. Sir, please go ahead.
Well thank you. And good morning, everyone. Thanks for being with us. With me on the call today is Paul Martin, our CFO. I want to thank you for your time this morning. As it is typical, we've got about 10 to 15 minutes of prepared comments, after which we'll open the call up for questions. Paul, would you please read the Safe Harbor statement.
Thanks, Jeff, and good morning everyone. Some of the things we will discuss in today's call concerning future company performance will be forward-looking statements within the meaning of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements and we encourage you to refer to the additional information contained in our SEC filings concerning factors that could cause these results to be different than contemplated in today's discussions.
At times during this call, we will refer to adjusted EPS, our earnings press release, including a reconciliation of certain non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles or GAAP, is posted on our website at www.perficient.com. We have also posted a slide deck, which includes a reconciliation of certain non-GAAP goals to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles or GAAP on our website under investor relation.
Jeff?
Thanks, Paul. Well once again, thank you for joining. We're pleased to be with you this morning to discuss our second quarter results. In many ways, the numbers speak for themselves. I Couldn't be more proud of the team and it's performance during period. We're getting able to raise earnings guidance for the full year. On the first quarter call, we discussed the gain we're making in the market in terms of the perception of Perficient. And we referenced a few existing clients, Fortune 1000 and Fortune 100 firms, where we're expanding the relationships and gaining new work and taking share.
Turning $1 million clients into $5 million clients, $5 million clients into $10 million, $10 million into $20 million and so on is a key focus for us, and critical component of our plan to continue accelerating growth in the years ahead. We're also focused on breaking down new doors and winning [indiscernible]. And on the net front we're succeeding as well. Earlier this year, we began partnering with the largest non-profit healthcare system in the country to evaluate the performance of their digital platform. Our team was subsequently engaged to modernize the client's health facing portal which shares the entire enterprise. Important in winning this work was Perficient expertise and implementing content management processes and technologies. The client's executive team has commended Perficient's speed, efficiency and quality assurance as key differentiator as relative to their prior vendor. So a great example of a substantial new client, whether significant opportunity for additional opportunities and another illustration of the deep the roots we continue to build health sciences.
Another recent partnership we've earned is with a leading financial technology company, where we're developing a wealth management platform for their client, the world's largest wealth manager. We'll deal with modern digital platform that optimizes financial advisory, productivity, creates a richer client experience and transforms enterprise operations. In addition to providing the technical consulting and architectural support for the project, we're building the roadmap and defining the long-term growth strategy for the platform.
One final example of our momentum in gaining customers is the work we won with a $60 billion multiline health insurer, where we're optimizing the corporate performance management function. We'll be using our deep knowledge and expertise in enterprise performance management to develop a comprehensive solution that will modernize and streamline the client's financial consolidation, reporting and work [indiscernible] crisis. We're engaged with the financial team for this initiative, but also talking with other lines of business and departments about additional digital transformation needs and opportunities.
That's an illustration, obviously, of the strength of our model, we have the breadth and depth of -- and skills to penetrate these accounts from a variety of angles and deliver and gain the credibility to engage with other parts of the organization. The great work we delivered for the CMO as an example, often there is a discussion with the CIO or CFO or the leaders of the lines of business and so. And we're seeing the strategic investments, we've made in the business in recent years, coming together right now and the result is solid top line growth and even more pronounced profitability gains.
With that, I want to turn the call back over to Paul to share the great news around these key performance indicators, before I touch on a few additional items and our outlook for the third quarter and updated guidance for the year.
Paul?
Thanks, Jim. Services revenue were $141.2 million for the second quarter of 2019, a 17% increase over the comparable prior-year period.
Services gross margin percentage for the three months ended June 30, 2019, excluding reimbursement expenses and stock comp, decreased 270 basis points to 39.1% compared to the prior period. SG&A expense, excluding stock compensation, increased to $30.5 million in the second quarter of 2019 from $25.3 million in the comparable prior-year period. SG&A expense, excluding stock comp as a percentage of revenue, increased to 21.5% from 20.8% in the second quarter of 2018.
EBITDAS for the second quarter of 2019 was $23.6 million or 16.6% of revenues, compared to $18.4 million or 15.1% of revenues in the second quarter of 2018. The second quarter included an amortization expense of $4 million compared to $4.1 million in the comparable prior-year period. Net interest expense for the second quarter of 2019 increased to $1.9 million from $0.5 million in the comparable prior-year period, primarily due to non-cash amortization of debt discount and issuance cost related to the company's convertible senior notes that were issued in September of 2018. Our effective tax rate for the second quarter of 2019 was 26%, compared to 26.2% for the second quarter of 2018.
Net income increased 46% to $8.5 million for the second quarter of 2019 from $5.8 million in 2018. Diluted GAAP earnings per share increased to $0.27 a share for the second quarter of 2019 from $0.17 in the comparable prior-year period. Adjusted earnings per share increased to $0.52 for the second quarter from $0.38 in the second quarter of 2018. You can see the press release for a full reconciliation to GAAP earnings.
I'll now turn the to the 6 months results. Services revenues were $274.1 million for the 6 months ended June 30, 2019, a 14% increase over the comparable prior-year period. Services gross margin percentage for the 6 months ended June 30, 2019, excluding reimbursement expense and stock comp increased 210 basis points from 38.4%.
SG&A expense excluding stock compensation, increased to $60.3 million, for the 6 months ended June 30, 2019, from $51.7 million in the comparable prior-year period. SG&A expense excluding stock comp as a percentage of revenue, increased to 21.9% for the 6 months ended June 30, 2019, from 21.3%. EBITDA for this first 6 months ended June 30, 2019, was $43.3 million or 15.7% of revenues compared to $35.3 million or 14.5% of revenues in the comparable prior-year period. The 6 months ended June 30, 2019, included $8.1 million compared to $8 million in amortization expense.
Net interest expense for the 6 months ended June 30, 2019, increased to $3.7 million from $0.9 million in the comparable prior-year period, primarily due to non-cash and amortization of debt discount and issuance cost related to the September 2018 convertible senior note offer. Our effective tax rate for the 6 months ended June 30, 2019, was 23.4%, compared to 24.9% in 2018. Net income increased 44% to $15.6 million for the 6 months ended June 30, 2019, from $10.8 million.
Diluted GAAP earnings per share increased to $0.48 a share for the 6 months ended June 30, 2019, from $0.32 in the prior year. Adjusted earnings per share increased to $0.94 for the 6 months ended June 30, 2019 from $0.72 in the prior year. Our earning billable headcount at June 30, 2019, was 3,068 including 2,790 billable consultants and 278 subcontractors, and the SG&A headcount at June 30, 2019, was 519.
Our outstanding debt net of unamortized debt discount and deferred issuance costs as of June 30, 2019, was $122.3 million compared to $120.1 million at year-end. We also have $34.3 million in cash and cash equivalents as of June 30, and our balance sheet continues to leave us very well-positioned to execute on our strategic plans.
Finally, our day sales outstanding on accounts receivable were 69 days at the end of the second quarter compared to 75 days at the end of the second quarter of 2018.
I'll now turn the call back over to Jeff. Jeff?
Thanks, Paul. Well the first half of the year was very strong from a bookings perspective. And the second quarter was another healthy period for large deal bookings, we booked 62 deals, north of $500,000 in the quarter. During the quarter the health sciences, financial services, retail consumer goods, automotive and manufacturing verticals combined to represent 76% of revenue.
Healthcare was at 30%, financial services at 17%, automotive at 10%, manufacturing at 10% and retail consumer goods at 9%. Normalized bookings growth for financial services and manufacturing were particularly stronger in the quarter. Our future success in the manufacturing verticals will be the result of continued progress with existing accounts, but also come from the expertise and client roster that the second quarter acquisition of Sundog Interactive promised. We're very excited to add our manufacturing industry expertise and strong channel ties with the Salesforce team. There's been great collaboration and opportunity already as we've introduced their capabilities into existing account [indiscernible].
I've been with Perficient for nearly two decades and firmly believe we're as well positioned today as we've ever been deliver value to our clients, colleagues and shareholders going forward. The influence we wield with our customers and the impacts we make on their behalf have never been greater. Coming into 2019, we're optimistic that it could be a very strong year for growth. And that certainly held true in the first half of the year. Double digit revenue growth, meaningful margin expansion and continued strong cash flow from operations, resulting from the incredible work delivered by our global team, now more than 3,500 colleague strong. A team, I generally believe is the best in the business.
And the same values that have powered our move from start up to more than $500 million in revenues now will guide us to $1 billion and beyond.
With that, I'm pleased to share our third quarter outlook and updated guidance for the full year. Proficient expects it's third quarter 2019 revenues to be in the range of $140 million to $145 million. Third quarter GAAP earnings per share is expected to be in the range of $0.26 million to $0.29. And third quarter adjusted earnings per share is expected to be in the range of $0.50 to $0.53.
Perficient is adjusting and narrowing it's full year 2019 revenue guidance range to $553 million to $568 million from the previously provided range of $545 million to $570 million, raising its 2019 GAAP earnings per share guidance range to $1.02 to $1.12 from $0.90 to $1.02, and raising its 2019 adjusted earnings per share guidance range to a $1.94 to $2.04 from $1.82 to $1.94.
With that, we can open up the call for questions. Operator?
[Operator Instructions] Our first question comes from the line of Surinder Thind of Jefferies.
I'd like to start with a question on press the top line. But just, can you reiterate the new deal wins that were over $500,000. I missed that number?
62; north of $500,000.
So when I look at organic growth, that hit double-digits this quarter. How broad-based is that good that you're seeing? I mean, when I look at it, the revenues by industry our best solution type of platform, it's a little bit hard to tease out, given the granularity of the data that's provided. So any color there would be helpful.
Yes, now it's pretty broad-based, actually. Led though -- as is indicated for a number of years now by our health sciences. The healthcare continues to be a great growth area for us. We're also seeing financial services coming along pretty strong. And then, I guess, to say the rest is sort of kind of tide lifting all those, there's not a sector that s to mind that's in decline, but those are the leaders.
Understood. And then in terms of -- it seems like you're seeing strength in financial services, if we were to maybe turn to commentary from other management teams, obviously, financial services, at this point, commentaries maybe in a little bit more cautious on recent earnings calls. Any color that you can provide there in terms of obviously, you've seen a lot of strength, but maybe how you're thinking about it on a go forward basis? Is that -- doesn't seem like that's true for you guys.
Well, I think the reason might be this. We've had a great management consulting practice, focused on financial services for a number of years now. And more recently, probably in the last 12 to 18 months, we've been able to more effectively leverage that than in the past to drive digital transformation opportunities. So a lot of what we're seeing new opportunities in growth and financial services is actually the digital transformation space. I mentioned the 1 example during the call, building substantial wealth management platform for a large wealth manager. We've made a lot of other quite interesting things in terms of process workflows, improving loan approval turnaround times, underwriting, using AI, so really pretty amazing stuff from a technology standpoint. Actually that's where we're really seeing the growth although the management consulting business continues to do well also.
Understood. And then maybe one quick follow-up in terms of just the -- can you remind us the level of visibility that you have in terms of your future revenue streams? How good is that visibility into Q3 in terms of what percentage of that revenue is booked, when we think about guidance and maybe how that changes in the subsequent quarters?
Yes, it's a good question. I would say we've got probably about 90% sideline to Q3 as we sit here today. Obviously, we're already a month into it, so that's a benefit. And then for the rest of the year, let's say Q4, I would say we're probably 60%, 70% of solid sideline, but beyond that, a lot of our revenue as you know, is repeat business or repeat relationships. So we actually have pretty good visibility in working with our clients and what their spend is going to be. But it's a project-based business, and so it's not a 100% by any means, but again, I would say 90% for the remainder of Q3 and then drops off to maybe 70% or so for Q4.
Our next question comes from the line of Mayank Tandon of Needham & Company.
This is actually Kyle Peterson on for Mayank. I wanted to start-off, we noticed the ABR and the nice tick up this quarter. Is there anything kind of one time is there or is that just kind of routine pricing increases? Just want to see if that's kind of a sustainable lever to the top line.
I think it is. It's one of those things that again in a project-based business it's going to move around It's not going to be a straight line up. However, we've been talking for a while now about our desire or goal to moved that up 2% to 3% per year. And I think this -- what you're seeing here is a result of those efforts. We've put some new mechanisms in place, more checks and balances on our pricing process. And I think you're seeing a direct results of that. Again, I'm not suggesting it's necessarily going to be a straight line from here, but it is a direct result of some of those efforts.
Great, that's good color. And then just wanted to touch a little bit. Obviously it looks like the services revenue growth organically has been trending up here the last couple of quarters. The deal win cadence has been good. When we think kind of longer term, how should we think about the organic growth potential in the services business?
Yes, it's a great question. And I'm going to -- get Paul back on some of the numbers that I've used for a while now. And it's taken us a while to get there. And again, I'm going to tell you probably not a straight line here either, but our goal has always been 10% plus. I think there's no reason in terms of our portfolio and the market we serve that we can't be drawing at least 10% organically and really beyond that. So that's our goal, again, no guarantees on a straight line there but I do expect that we can get there, and I think we well. Keep in mind also, I've spoken a lot about the work we've done in our sales model, and without getting into all the details there, I think we're seeing some benefits from that. But I think the most important factor is that probably about half of our sales team right now has a relatively short tenure. So aren't as productive yet as those who have been here a while. So there's a lot for dry powder, just the way I would describe it in our sales rank still. So I feel good about that and I think that's going to help us get that level and beyond. Again, probably not a straight line, but we're going in the right direction.
Great, that's helpful. And then last one from me then I'll hop out. Just want to get a little bit of update on your M&A pipeline and outlook for the year. You guys have the acquisition of Sundog earlier, but just wanted to see kind of what's potentially in the works, what you guys are looking for and the like?
Yes. We're been interested for a while now in Latin America, Central America for offshore, primarily. Maybe something that has some domestic services as well that primarily is another offshore and nearshore outlet. So we've got some things in the works there, still fairly early stages. And the pipeline itself is pretty robust. We -- we're always very selective, our goal is to try to get about $50 million of run rate done, but we've come up short of that a few times simply because we tend to be pretty choosy. And we're not going to take on big risks in the -- in M&A when we don't need to. So I'd say the pipeline is good. I'm optimistic we'll get another deal maybe two done this year. But that's where it stands right -- as of right now.
Our next question comes from the line of Brian Kinstlinger from Alliance Global.
I want to touch on pricing one more time if you don't mind. In 2017 and '18 you said 146 by my model, basically all years, both of those years. So I guess I'm trying to understand -- and most of your growth was volume so it's nice to see both hitting right now. I'm trying to understand in the past, some of that increase in rates was you'd acquire -- you make acquisitions with higher rates, sometimes it's technology driven, sometimes you're bringing on customers at higher rates. Can you maybe just touch a little bit more on which these factors or all of them are driving this renewed increase in rates?
Yes, it's a great question. We do occasionally find acquisitions that have higher rates than our average. Oftentimes they're a little bit lower. Usually, they're kind of neutral. And -- but I would tell you this most recent increase year of nearly 2% is primarily organic. So like I said that earlier is a direct result of the efforts that were put in place to try to drive it up. And again, that's not a straight line likely but I would say 75% of these or that is organic. I think the number is like 1.9%, I want to see organic, it's like a 1.7%.
So, is it fair to say that after a couple of years of getting volume on track you're focused a little bit more on price than you were or as you were? Or is it just really a function of that's how it's played out a little bit more here? And maybe you tried in the years passed, it didn't play out like that. I'm just curious is it more -- is it just more of attention now to price in the last two years?
It is, I mean that that's exactly right we backed up off of price. We've focused on volume and we've been working on striking that right balance. So this is again and effort towards doing just that. We don't want to push you too far, obviously, because we want to get the volume count. So -- but it's an effort to try to balance the two.
Now, I saw -- while FinTech and -- financial services and healthcare has always been a strong vertical. One of the verticals I saw that's made a big move on smaller numbers is automotive. So is there something interesting happening there or was that part of the Sundog acquisition? I'm curious what's driven some of that growth.
No, that's primarily organic as well. We've got a couple of nice anchor accounts there. In particular we've talked about Ford for years and -- so we've got a long-term of relationship with Ford Direct, which is a joint venture between Ford and the dealer network. We've also built a relationship over the last -- particularly over the last 18 months or so with Ford Proper [ph]. So that's where some of that growth is coming forward. But from -- but we're also working with I want to say, four or five other auto manufacturers as well as some aftermarket companies and online retailers, where we're seeing some of that growth. And it's fun because a lot of the reason we're able to expand that is building on the expertise that we really have actually in the industry. So our qualification of the industry are good and are -- so we're competing very well there right now.
Two more. The first one -- two more questions. The first one is, Pivotal recently announced some disappointing revenue and It's only 4% of your revenue on your filings. But I'm curious does that change your hiring plans in any way or how your training employees right now? Does it have any impact on your [indiscernible].
Yes, that's a great question. I think that's short-lived for them. I think the sales cycles are longer than they projected. However, yes, we've been able to adapt very effectively to that. The folks that we have trained on Pivotal accordable to a lot of other platforms. And the reality is they're so busy on Pivotal. Even though Pivotal's licensed -- are a little disappointing and we still have a number of accounts and relationships that are growing around Pivotal deployment. So for us it's not as quick -- it's not as much of a growth opportunity as maybe we originally thought it was yet. But we've adapted to that in terms of the hiring and training and like I said, all the folks that we have fully deployed.
Great, last question I have. Supposing U.S. taxes China imports, can you speak to the impact on your business? I remember you got some China delivery. Is there any impact and if there is, what is it? And then do you -- are you able to ship delivery from China to India?
There's really not any impact specifically for our offshore business. The impact for us will be more how it's impacting our customers really. So we've got -- we have a good stable group in China. It's contracted a little bit, by design. And we've been focused on -- focusing on growth in Indian for a variety of reasons for some time. But it's really not tariff related. It's more economics than geopolitical.
Our next question comes from the line of [indiscernible].
So if I think about the guidance, for Q3 and Q4, I think about the midpoint was about 15% growth. And it also implies dramatic slowdown in the fourth quarter, I think the high single-digit. I would imagine the fourth quarter is just being conservative, right? Given the trends in the business.
Yes. Keep in mind that fourth quarter is traditionally seasonally down. We haven't had that scenario in a couple of years, but we're out trying to be cautious, want to make sure we're being conservative there.
Got it, that make sense. I mean it sounds definitely sounds beatable. But a quick follow-up is on the organic growth. Do you have -- do you happen to have the number, the exact organic growth number? Sorry if I missed it.
For -- sorry, Q2?
For Q2, correct.
What was it 13? Yes, 13.7. Well round up 13, over 12.5.
Our next question comes from the line of Vincent Colicchio from Barrington Research.
Jeff, just curious, you mentioned just a few minutes ago that you're target for organic growth is now 10%. I think last quarter you said your target longer term is 5% to 10%. Has something fundamentally change to make you feel this way? Any color would be helpful.
Yes, we actually hit 10%. I'm being a little [indiscernible]. No, not really. I guess that's me saying we got to crawl before we can walk. So what was -- what I said I think earlier in response to Surinder's question is I think we can get to 10% and sustain 10% and perhaps move through that. But it's not going to be a straight line to the receivable 10. So I think the two kind of dovetailed.
And then you -- a few quarters ago, you talked about some of the consolidation of your partners such as Adobe acquiring some of the other partners you've had and you thought you benefit from. Are you steel feeling the same way?
Yes, absolutely. The more revenue you could influence for a partner, even if it's a result of them consolidating it, the better that relationship is. And our Adobe relationship is a result of that. I think it had never been better. We're actually pretty excited about IBM and Red Hat, now that feels close, I expect IBM is going to be putting a lot of muscle on that. And then we're a player there as well. So I think these consolidations are nothing to help pull again just because it includes our influence with those partners.
And my understanding is that some of your clients are getting more comfortable with your offshore model or you're seeing more opportunity there. That's a higher margin business for you. Any sense of when we may see that increase in the mix?
Yes. We should see it now. I think we had a nice last quarter. So I think it's probably watered down the offshore a little bit. I still think that offshore is going to continue to grow on a volume basis faster than onshore. And it's exactly because of what you just touched on. Particularly in the healthcare sector, 5 years ago we were doing essentially no offshore so a substantial amount of work being done on offshore now. And we recently we talked about Kaiser often about being our largest customer, one of our largest customers in that sector. And we won the opportunity to begin doing in offshore work there, which I think we'll have the opportunity to accelerate in the pretty significant volumes here. So yes, I think that will continue.
And we do have a follow-up question from Surinder from Jefferies.
Actually just following up on the earlier question about offshore operations and headcount. With all the acquisitions that you guys do, obviously, that ratio seems to remain stable in the sense that you guys do hire offshore but onshore acquisitions kind of dilute that out so the ration doesn't change. So can you help me understand how the gross margins have improved there in that sense If the ratio over last two years appears to have been about the same. When I look in the quarter here, we saw fairly significant change in gross margins both year-over-year and quarter-over-quarter.
Yes. So if I follow your question, I think you hit the nail on the head where most of the acquisitions we do operate offshore, there has been a few small components. So offshore growth continues to be sort of diluted corporately. But if you look at last quarter or just past quarters, for example, 14% in hours growth year-over-year onshore, 16% offshore. And that's not a huge difference but again, if you think about over the last 12 months, the number of acquisitions we that didn't have offshore, then you can see the offshore still growing a pretty good clip ahead of onshore. And that's -- what comes with that, you touched on it obviously, the gross margin expansion, offshore gross margins. Still running north of 50%. Particularly in India, we're running probably 55% or so in India. By the way, just note are in the process of building out a new facility there, I mean, it's a lease, that is a building we'll be occupying on our own. Substantial increase in space for us to grow that facility. So that's offshore capability.
The one thing I surrender is we've done a pretty good job of adding additional anchor accounts and in India we're going to see some headcount growth so we could that resolve really good over the next two to four quarters.
Fair enough. And then relates to a related question in terms of the headcount growth in India. Is there an opportunity to perhaps accelerate that, given that maybe the large competitor is undergoing some arguably structural changes?
Yes, there is. I don't know, frankly, I think there it is independent of that. To be fully candid, I think I know you're talking about, we're probably not as interested in their employees because I think one of the challenges that company's having is that the skills are outdated. So we're more interested in hiring digital skills, offshore and they're probably having more from other competitors. That said, the beginning of your question, we absolutely are planning to continue to see offshore growth and frankly less opportunistically, than we have in the past. We got a conservative effort that we're kicking off right now. To bring a new offering that I'm not going to dive into more detail right now where we intend to go head to head with some of the digital offshore players.
And then Jeff, I mentioned -- I just want to add we also made investments in infrastructure. We're prepared to ramp up the growth there and have both people and infrastructure to make that happen.
We have good -- we have great success actually with the [indiscernible] in India, that's never been really initiated.
And then one final question. Just on capital use here. Obviously, strategically we've got the M&A targets, but when we think about excess cash beyond that how do you think about debt paydown versus share repurchases, given the stock has had a really good run at this point? And how do you think about that trade off?
Sure. So we think to convert and have no other debt besides conversely about $30 million of cash. So and we'll continue to generate cash. So we'll use that to the combination of M&A and share repurchase obviously, we looked, we're opportunistic on share repurchase, we're deciding and made increase or decrease based on that. But still continue to do both and as part of our M&A strategy, we tend to issue shares that have restrictions on to keep some of those sellers in place and those we try to offset what the issuances of the shares with the share repurchases.
Fair enough or maybe put it another way. Will you be willing to let cash build?
We want to let cash build? Is that the question?
Yes.
Yes. So I mean -- yes, absolutely. I think it -- depending upon the timing of acquisitions which as Jeff mentioned, could be lumpy we have a goal of $50 million but we got to find the right candidates. So you can definitely see cash grow quarter-to-quarter on depending on what action is going on the M&A front.
Our next question comes from the line of Allen Klee with Maxim Group.
Can you tell me what percent of your revenue you would estimate is related to digital transformation?
I think it's safely 70% today, maybe approaching 80% right now.
Our next question comes from the line of Michael Martin from Michael Associates [ph].
Congratulations. I just wonder if you can give us a little flavor about your corporate culture and what's been changing there at all? And also on what turnover is like? And how challenging it is to find new people in the current environment?
Yes. That's a great question. I like to describe the company as (inaudible). We believe giving people the tools they need to succeed and helping them every way we can. And the rest is up to them. And then when the results are good, we believe in giving good rewards for that. And I think that's true throughout the company. Very collegial a bunch of really smart people who like to challenge each other and do great work for our clients is how I would describe us. I wouldn't say that's changed much over the years. I think it's only improved. And we assembled a team here in the recent period, maybe two or three years but think it's just a stellar leadership team from an executive standpoint. And I couldn't be happier with them. But again, it's been a long sort of the same journey, we just arrived at a place where it's very, very solid right now. So we're very pleased with that. In terms of attrition in general and recruiting, we've had great success with recruiting, there's just a nice buzz out there about Perficient right now. I think people are interested in coming here. We have more people reaching out directly to us than we had in recent past.
And we've had good success of recruiting, attrition, trailing 12 months is under 20%. Our goal is actually between 15% and 20%. To be honest, I think below 15% could get unhealthy as well. So we want to keep it in that range. And we managed to keep and under 20% for some time in fact last year, I think, it was even 17%, something like that. So everything on that front right now is pretty solid.
And I'm showing no further questions at this time. I would like to turn the conference back over to Mr. Davis, Chairman and CEO.
All right. Again, well, thank you all for your time today or for listening to the replay, I appreciate it. And we look forward to speaking to you in another 90 days.
And this concludes today's conference call. You may now disconnect.