Persistent (PSYS) reported a 4% QoQ decline in USD revenue in 2QFY19 below estimates as seasonal weakness in IP business was exacerbated by an unanticipated project foreclosure (USD c.1mn impact). Management exuded confidence in growth recovering over 2HFY19 3Q is seasonally strong for the IP business. However, we expect the quarterly volatility to continue given the weak trajectory in the core services business (43% of revenues); growing reliance on the IBM ecosystem is an added risk. Thus, while the currency tailwinds have helped minimise the flow-through of 2QFY19 revenue miss on margins/EPS changes to our FY19/FY20 EPS estimates are minor (1.7%/-0.5%) the low predictability of revenues could...