Surinder Thind: Growth rates onshore.
Jeffrey Davis: Growth rates, for sure, are going to be greater offshore just like they have been. Onshore, our overall guidance is pretty conservative, as you can see. So that would include we implying flat to slightly up U.S. or onshore-based resources and a lot of that growth coming, as you pointed out, from offshore.
Operator: Thank you. Our next question comes from the line of Mayank Tandon from Needham. Go ahead.
Mayank Tandon: Thank you, Jeff and Paul. I just wanted to first talk about the linearity of the year. So your guidance basically reflects, I think, flat to slightly down revenue sequentially based on the guidance. How should we expect the year to build? Are you looking at maybe more of a second half rebound? Or should we expect a more linear trajectory over the course of 2023?
Jeffrey Davis: Yes, I think it’s going to be a little bit happier in the second half, for sure. So I think you’re right on the Q1 guide, which by the way, it seems like a pretty common in the industry for the year, everybody sort of sees a stronger back half. And I think we see the same thing, and I would underscore that with my comments earlier on the pipeline of bookings — the bookings, I think, sort of troughed out, if you will, in Q3, and we’re experiencing that from a revenue standpoint, basically now. correlation factor between free bookings and revenue for us. And it’s not that high because it tends to be somewhat lumpy, but the highest correlation is about a five month rolling average. So literally, if you look five months out from a kind of a weaker Q3 bookings, then you’re seeing that now.
Bookings were stronger in the fourth quarter and they’re starting stronger in the first quarter. So again, we would expect to see the benefit of that more towards the latter part of Q2 or at the beginning of the second half.
Mayank Tandon: That’s helpful. And then just more in terms of housekeeping items. I wanted to ask you on the offshore. In terms of the drag on the growth, what have you built in to your expectations? And on the flip side, I’m assuming it’s going to help margins. So maybe could you just quantify the benefit on margins and the drag on revenue based on your guidance?
Jeffrey Davis: Yes. It’s probably 3% or 4%. It’s sort of hard to — three or four points. It’s sort of hard to predict, it’s a 3.5:1 ratio. So you can sort of back into it from the guidance that we put out there based on offshore — historic offshore and near-shore growth, is what I would tell you on that. And the…
Paul Martin: From a margin perspective, Mayank. Obviously, there’s a lot of things going on with wages as well. And we’ve modeled just modest gross margin improvement, and that’s another one where hopefully as the demand picks up that could prove to be conservative.
Jeffrey Davis: Keep in mind that’s our strategy. The whole point of endeavoring organically and through M&A and offshore and near-shore is to bring our rates down to accelerate ultimately top line growth. And be more competitive with the — against the digital transformation firms that we run into. So we’ll be careful about leveraging all that as margin and actually putting a lot of it into more attractive, more competitive rates.
Operator: All right. Thank you. Our next question comes from the line of Brian Kinstlinger from Alliance Global Partners. Go ahead, Brian.
Brian Kinstlinger: Hi, guys. Thanks for taking my questions. Jeff, you mentioned a few large deals that if you win could significantly change the revenue trajectory of the company. Is that captured in the high-end of revenue guidance? Or is this more a 2024 driver given long sales cycles and therefore, maybe not contemplated in this year’s guidance?
