Puneet Jain : Got it. Thank you.
Operator: Our next question is from David Koning with Baird. Please proceed.
David Koning: Yeah. Hey guys, thanks so much. And yeah nice results. When we think about you gave your employee count 47,000, maybe just reflect a little on morale of the just given the backdrop right now, just maybe talk a little bit about wage, whether inflation or how pay is going, but just kind of the whole feeling of employees and, how that’s all going right now?
Bryce Maddock: Yeah. Well, I’ll start, with our frontline teammates, which is the primary focus of everybody in our business. We want to make sure that we’ve got the best experience for our employees around the globe. And the experience here, I think, really varies based on the geography. We’ve got some geographies where we’re growing 70% or more year over year, like our near shore geographies in Mexico and Colombia. And so it’s very easy in that type of environment, I think, to have positive employee morale, lots of opportunities for upward mobility. I think that our offshore business continues to be one where employees are very satisfied very engaged. In our onshore business, we definitely have challenges. And these challenges exist from the fact that we’ve seen a substantial decline.
I mentioned nearly 34% decline in revenue over the course of the last year. And that’s led us to have to say goodbye to a lot of really great frontline talent in the US. So that does make for a challenging, environment. And then I think more broadly from our leadership team’s perspective, it has been a challenging 18 months, so there’s no doubt about that. But the team has stuck together and I’m incredibly proud of the work that they have done.
Balaji Sekar: Yes. Let me just repeat the catch up on the wage inflation question that you have. So, we did see significant wage inflation in 2022, but this has returned to more normalized levels in 2023. And since the share of onshore business is expected to be lower, the impact of wage inflation will be mostly in our offshore location, which has been offset by the mix shift, which is margin accretive as we work from onshore to offshore locations. And second is we do have cooler provisions in our contracts that, that we’ve been enforcing this year.
David Koning: Got it. Okay, thanks. And maybe just as my follow-up, within the content business, how do you see the next several months kind of going with the political cycle, like maybe how much of that business is political, how much of it is other stuff, just kind of how the backdrop might be for that the next few quarters.
Bryce Maddock: Yes. So, I mean, clearly, our trust and safety business continues to grow, and this is being driven both by risk and response work in the financial space as well as content moderation, for a variety of different companies, including social networks. As we head into 2024, we do expect, to have more work in the political realm. And I think we’re well positioned to capture growth that comes from that. I would just sort of moderate expectations though and just say that we have a team today. I think that staff to handle, everything that we’re expecting, amongst our current clients. We also have a lot of opportunities amongst large, social media video streaming companies that aren’t TaskUs clients today in that realm.
David Koning: Got you. Thanks. And congrats on the great margins too.
Bryce Maddock: Yes, thanks so much Dave.
Operator: Our next question is from James Faucette with Morgan Stanley. Please proceed.
James Faucette: Thank you. I wanted to follow-up on the margin collection. Balaji, I hear you loud and clear that, the December quarter, you have some SG&A pressure just given the nature of the calendar. But with as much growth as you guys are seeing overseas and then new delivery geographies, in particular. How can we think about that as a source of SG&A as well as CapEx on a go forward basis? Where are we at the point where we can start to get good leverage on those operations already?
Balaji Sekar: Yeah. No. So, James, like, in terms of margins for next year, like I said that while we’re not providing any guidance there, but we will continue to optimize on G&A, you know, so there still opportunities for us to continue to optimize DNA and that’s something that I feel like the team did really good work. And in terms of the EBITDA margin guidance for the full year at 23.3%, I feel like it’s one of the industry leading margins currently. And we’ll continue to optimize G&A. And second is we’ll continue to gain additional leverage from our offshore dollar base, but we’ll also see the impact of wage inflation getting into next year. Some of this additional leverage that we’ll get will be an offset to wage inflation.
And then the third is we’ll continue to grow our specialized service lines, which we believe is going to be margin accretive. And then, again, from a CapEx perspective, if you kind of look at, what, the year to date CapEx has been about 3.3% of revenues, And then for the full year, at about $35 million, it’ll probably be at about 3.8%. So we will continue to invest back in the business, both in terms of OpEx, in sales and in Generative AI and also from a CapEx perspective where it is required in terms of expansion. But again, we’ve been very mindful this year in terms of where we have to invest, which is leading to these current CapEx projections.
James Faucette: Got it. Appreciate that. And then Bryce, I want to go back to something you talked about. You talked about some of the engagements you have around Generative AI and large language model training, etcetera. How are you thinking about the type of investments that TaskUs needs to make over at the next cycle of Generative AI development. I’m training seems like it’s the 1st, but what comes after that and how can we think about the ways that you’ll look to pursue that investment? Thanks.
Bryce Maddock: Yeah. I mean, we’ve been investing pretty heavily in building a technology organization that’s capable of building a platform in the form of TaskGPT. We also have a team of AI experts that lead our AI services line. I think that those investments will increase as we go into next year. We expect to invest more in generative as well as more in sales and marketing to drive growth. And then I would just say also though that there’s a huge opportunity for us to grow revenue, through the training of large language models and the trust and safety services that these image generation and language models are going to require.
James Faucette: Got it. Appreciate that.
Operator: Our next question is from William McNamara with BTIG. Please proceed.
William McNamara : Hi. This is Bill on for Matt. With the support of autonomous driving that is currently in use, is there a number of agents per car we should be thinking about or is it too early to know for vehicle safety operations and kind of how large do you think this can become for Task?
