TaskUs, Inc. (NASDAQ:TASK) Q4 2022 Earnings Call Transcript

James Faucette: Great, thank you very much. I just wanted to go back to this point around offshoring. I think Balaji, you mentioned that in the fourth quarter you’d expected to move some work offshore and then that didn’t happen, so that result in some better revenue. But hey, I want to make sure that I understood that correctly, and if you are expecting that to still go offshore in the future. But more importantly and more broadly, what are the conversations that you’re having with beyond your existing customers where it sounds like you’ve kind of did an analysis of what could happen there. But with new customers, are they looking to TaskUs to amp up or ramp up what they can do offshore from a customer support perspective, et cetera?

Bryce Maddock: Yes. I’ll take that question, James. So to be clear here at our largest client last quarter, we talked about the fact that we would be transitioning some additional work offshore in Q4. That shift got pushed from the end of Q4 to the start of Q1, thus the revenue impact. We saw an additional just reduction of work at that client, which brings the total permanent workforce supporting that client in the U.S. to just a handful of teammates. So effectively, all of the recurring revenue from that client is no longer going to be in the U.S. When we think about this trend more broadly, we’ve looked across our U.S. client base and really asked the question, which of these revenues must stay in the U.S. because of regulation or process compliance reasons. And we factored those risks into the guidance that we provided today, which at the midpoint contemplates U.S. revenues dropping to 15% in the back half of the year.

James Faucette: That’s great. And then just quickly sequential headcount growth looks somewhat muted in the quarter. How much of that is a function of the mix shift offshore? And really what I’m trying to get at is, how should we think about your pace of hiring into calendar 2023 especially as we think we’re probably reaching some level of mix stabilization here.

Bryce Maddock: Yes, it’s a great question. So we added 800 net new teammates in the fourth quarter. That number was lower than it would have been if we factored in all of the seasonal volumes. And the reason for that is that a lot of the seasonal hiring that we do happens in September preparing us for the full quarter. As we look at this year, we will see a reduction in our global headcount in the first quarter as those seasonal volumes are removed. And we take into consideration some of the additional reductions in the U.S. business. But we expect to get back to sequential headcount growth in the second quarter of this year.

James Faucette: Thank you very much.

Operator: Thank you. There are no further questions at this time. This does conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation.