F3Q26 Follow-up—A Business in Transition as Weak Demand Keeps Growth in Check

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F3Q26 Follow-up—A Business in Transition as Weak Demand Keeps Growth in Check

P PREV 3.98 2.99 3.73 3.37 14.06

and platform solutions, an offering being built through large amounts of M&A. The question is

why? Our sense is that as AI and agentic capabilities advance, the TAM of the company's more

traditional services offerings is shrinking faster than anticipated, especially among its larger more Exhibit 1 - Segment Organic Growth Estimates

sophisticated clients. Going forward, this likely means a higher sustained level of investment and 15.0% 11.0% 11.0%

9.0%M&A to develop and acquire new solutions. How mgmt navigates such a transformation of its 10.0% 7.0%

6.0% 7.0% 5.0% 5.0% 4.5% 4.5% 4.5% 4.5%

5.0% 4.0%business is beyond the scope of this earnings note, but is something we will monitor. Current

-2.0% -2.0% -2.0%valuation, at <10x P/E, implies the market is now pricing in negative organic growth in the future, 0.0% 3Q24 4Q24 1Q250.2% 2Q25 3Q250.2% 4Q250.0% 1Q261.0% 2Q261.0% -0.6% 0.5% 3Q26 4Q26E 1Q27E

something not out of the realm of possibility as AI advances ever more rapidly. -5.0% -2.9% 2Q27E 3Q27E

-4.8%

Things to Think About: . -10.0% -8.6% Consulting (Organic Y/Y) Outsourcing (Organic Y/Y)

Source: Company Data, Jefferies

The midpoint of F4Q revenue guidance implies a further slowdown in organic growth Related Research•

Discretionary spend remains weak as macro and AI concerns are top of mind for clients• F3Q26 First Take—Demand Appears Softer

The pushing out of some large Managed Services contracts from F2026 to F2027• as High End of Revenue Guidance Lowered

The growing negative impact of secondary effects of the war in the Middle East• (6/18/2026)

The need for a new sustained level of M&A spend to transform the business•