TASK - Earnings call transcript Q3 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, and welcome to the TaskUs Fiscal Third Quarter 2024 Conference Call. My name is Michelle, and I will be your conference facilitator today.Â [Operator Instructions]Â I would like now to introduce Trent Thrash, Senior Vice President of Corporate Development and Investor Relations. Trent, you may begin.

Trent Thrash

Good afternoon, and thank you for joining us for TaskUs' Third Quarter 2024 Earnings Call.

Joining me on today's call are Bryce Maddock, our Co-Founder and Chief Executive Officer; and Balaji Sekar, our Chief Financial Officer.Â Full details of our results and additional management commentary are available in our earnings release, which can be found on the Investor Relations section of our website at ir.taskus.com.

expectations webcast limited and supplemental an our federal risks to, note of cause for we Excel-based guarantees call the statements the being securities posted investor including that results materially start, laws, differ also Relations following and but is and Investor nor discussion to financial meaning presentation financial simultaneously those that results actual I have would statements management's information our regarding remind website, on an this section like statements and We business.Â These of discussed not plans our the may promises are the you here. future within website.Â Before including, the to from uncertainties neither on metrics that involve forward-looking file.Â Please contains and

annual should obligation discussions new today's result Investor by may statements. forward-looking found throughout differ update these forward-looking a Relations required on with no financial website otherwise, are SEC's our XXXX. or forward-looking not The statements accessible results and which on with including This as statements conference made revise or which March contain the is whether Factors subsequent X, of responses on current to today's SEC supplemented measures. that website.Â Â Any and non-GAAP except our expectations on assumes today, law. TaskUs on on reliance place the the call, them, be based questions, to to developments as call You as of we cause actual was file filed reports from report SEC, filing, any the can periodic with be Form XX-K, undue could in

Bryce? to will Co-Founder is Bryce non-GAAP in GAAP the Officer. of section For financial call Chief directly which our I see IR over turn and the a Maddock, comparable reconciliation our available our earnings press the release, to of most these Executive please website.Â Now metric, measures

Bryce Maddock

the was our Trent. of thank X our revenue third million. you for and growth in in double-digit us. of This leading joining you, competitors, revenue share strategic focus our made levers: top In and deployment diversifying of XX.X%. aren't base we most done delivered tools.Â Â While We team's celebrating verticals, relentless yet. afternoon, specialized guidance possible today's revenue $X.X and Thank by quarterly Good on and AI our everyone, we outperforming we to and returned end are from growth services, automation quarter, history TaskUs revenue the million, the $XXX.X generated our client cross-selling industry the milestone, by taking

We growth our quarter. of to $XXX rate of the $XX at the expect revenue record-setting We million year, into accelerating expect another an the of quarter $XXX now to million year midpoint. the for increase million fourth for continue

exceeded their below our guidance. hiring, additional was and investments the growth our technologies, XX.X%, service $X.X Consistent EBITDA and our in quarter, our many to year, accelerating enabled revenue, X% struggled Our have of QX reduced of initial lines, to deliver team's our with X%. us and deploying and addition our recent in impacts midpoint the guidance since now have they flow.Â Â In the as by increase made our sales training, cash clients. marketing. our XX.X%. an our the in increase million offense midpoint play million back to acceleration the for guidance near and revenue and last In represents more will this, in $XX.X developing of that to on to which most us requires provider rate we of by nearly adjusted decision have our XXXX These million and of growth This our putting we've investments even competitors new This margins line EBITDA $XX.X delivered as to tireless This of investments defense facilities, invest watched and have margin the in us in grow term. continue which choice our expertise $XX reduce the pace margins the adjusted believe we strong full-year efforts the guidance playing share.Â Â Given industry of year.Â Â On excellence response, million success, in for service quarter. decided our are by the or guide, significantly to operational take TaskUs we we've specialized make operations,

in approximately million to continues free XXXX.Â Â In our and the our margin guidance, it's adjusted reflecting midpoint million to it we will a next expect sustain full deliver a to into year. rate cash exceed believe However, trade-off XX.X% our At to we're of make now as $XXX growth allow year summary, the results for our we willing expectations. us approximately in flow EBITDA, adjusted that $XXX.X team deliver of

demand robust see existing global clients. to new and continue from We

again growth our We will in revenue accelerate expect QX.

on growth go believe to service financials, will As we to performance. year-over-year the increase look the our revenue Then and our X was year-over-year our QX through across who QX increase XX% of contribution walk full-year best QX be and total up in top outlook clients client generative quarter.Â Â In of quarterly we contributed QX. to from largest with this to we the saw industry.Â Â Next, from again demand rate revenue and lines. QX strength We're bookings all XXXX excited sequential of support XX% of and and continue our will initiatives. of some increased was of basis. total revenue $XXX.X our in XX generated in grow an will highlights again our anticipate of approximately relationship safety XX.X% reflective QX, margins through We client largest I'll saw of trust the in their strong our Balaji who particular, revenue million, QX. growth among in a and increase revenue from QX during XX% continue guidance. from AI in XXXX, our our client This

Excluding geographies, X% from delivery XX% versus as XXXX.Â In our XX% of was in our in client revenue delivery prior approximately revenue year-over-year QX QX of from declined approximately the relationship, QX X% basis.Â As a on terms during year. revenue business the in total expected, largest U.S. of revenue rest grew result, a of U.S.

Our offshore geographies again demonstrated growth strong revenue approximately XX% of year-over-year.

quarter seventh delivered the in in row, than America more revenue by For a XX% in grew QX. year-over-year Latin

of end by from QX. and U.S. of At the other our once approximately service performance. of the teammates, year-over-year also XX,XXX include world.Â Â We approximately the delivery growth geographies an of client ended and delivered We QX, increase outside all exceptional rest delivered global sales our quarter Philippines, In These the India, with the in major the be specialized teams have to was X,XXX teammates of again XX% of strongest the a success America, the majority total clients. This Philippines. by our our the bookings where and new from competition.Â Â From bookings Latin we existing followed from reflective location selling wins continue client, of India signings, in largest of strong services largely to were continue driven our delivery QX bookings against perspective,

verticals customer our made base. year-over-year. new of growth to that improvement our more During X.X% compared progress from clients suite and in others, year-over-year year. growth our this result our year-over-year and X.X% below client continued an saw double-digit Revenue services, cross-selling X crypto X% XX% in cohort improved goal tech lines.Â Â We our in QX, AI service to a growth. DCX trading one strategic we decline of saw of delivering the we professional Digital in of on base industry revenue saw year-over-year clients, utilize Amongst lines service saw returned the growth from QX and specialized in fintech, equity of our experience strong with of health service QX, our QX and all clients client than from services total certain services revenue. during QX, we of increased growth to remained modest on of as Shifting mid-single-digit lines verticals.Â Â While diversifying again focus our this increases safety to trust and particularly

performance, we single DCX QX Given expect continue the during but accelerate growth of our to digits XXXX. remain year-to-date in to

with saw strength of QX, vertical signings in in across DCX expansion retailer. of bookings We large e-commerce terms markets. we major a In our signed a broad-based most global

India, win. network #X stellar This the websites that the of the a quarter developer providers. A dozens of Colombia is QX the of on of delivering of QX solutions. of expansion of an an awarded competitive gate, of commitment e-commerce taking scale-up this takeaway client performance we major from cloud-based the for we're large the and third a from emblematic are had our us we in and initial services share was the competition. Based on international strategy of vendor success highlight Here, top with out in a

was consecutive rate, technology-enabled technology to in learning growth support sign we with enterprise and expansion our customer largest to client payer. and we well [indiscernible] and the of legal a QX, XX%. social marked performance. Â Another the addition client relationship successfully With awarded direct first healthcare Similar of sales, in marquee to expansions preparing accretive services year-over-year. excess include superior of from began broad-based increasing media, again our based this tax taken and the Safety. Trust of our to third overall example we've of of millions year working. Â Turning including India, strategic quarter work we that was our this was experience. Â Lastly, strategy a in support of a This the QX to first growth, business solutions. cultivated launch XX.X% in large have grown This and the XXXX, Revenue breadth service United of of States, growth provide healthcare certain Mexico, over QX again FinTech, we significant in enterprise on were in to a provide saw our growth to is with dollars we clients. contract one from support, as focus and for the provides signed verbally is in expansion won that line our as operating competitors we Here,

a specialized have previously which as crime our trust, and offerings, service response. includes risk referred financial to As reminder, compliance and we safety and

our or refer again, said, line as align Safety will business. recent and to trust and we to market the expect to services Crime rest Compliance, safety industry the of rate Based nomenclature. Â With outpacing and forward, on QX. order continue of Going to trends, once and that was Trust in better booking to these line subservice FCC, service this accretive analyst in growth Financial this we overall

provide signed percentage total revenue Trust future work Notably, an As and at we a will AI services. and and the largest of client. Â In Safety intersection on focused Safety of we moderation, of the trust our represent quarters. traditional which scope Trust during result, services safety increasing safety, and AI addition included to the statements QX, multiple content solutions this significant in expanding sits to of

European-based provide accelerated video in to game marketplace this growth an solutions moderation for to contract QX in returned Revenues online but content a line services. only to year-over-year to not We to gaming. Â Moving a provider also specialized of signed growth PC XX.X% service of on double-digit developer on and a basis. AI

strong We by line, client, our are solutions, pleased which has tech-enabled this revenue world's largest of provider large driven trajectory client, growth been of the legal from the and model. our autonomous service with vehicle leading a language largest

of strong work an and to and We fleet we're statements cars supporting clients' supporting largest services multiple see new expand with across autonomous industries. We AI of and relationship for generative media continue client markets. social as including they client in our in multiple vehicle QX. Â Here, largest again existing demand clients initiatives both verticals, in generative this signed AI our client the their AI our expansion of new

to multiple all technologies in across of geographies. generative leading continue of our X lines our relationship developer world's the also grow We AI with service

success brief our AI on I line Given this to provide our services, AI own growth a moving to in service deliver again updated selling our want anticipate initiatives. XXXX generative demand will QX. Â Before and this double-digit on we outlook, update

we offense, significant well-trained quality, and a to our TaskGPT impact double-digit increased are clients drive technology too, our delivered return order Here, teammates platform and this our growth. supported in playing has efficiency, with deploying customer to to Combining satisfaction.

that created has demand of our form GenAI TaskUs. opportunity over that focus in AI automate AI time, than the We're risk and development, continue for opportunity on safety, interactions. emerge more will service offerings We certain generative to recognize believe seeing maintenance. Â We customer that specialized for

and our using other We are workflows TaskGPT automating possibility, tools. that into leaning own

In call to our support believe less continue grow acquisition, to AI work. Â Before results, supporting the center details risk and exposed than to our to and safety, specialized customer support more Balaji provide interactions offense to complex financial complex of sensitive to of QX want represents our We to like of far a us capabilities will on of content new briefly by hiring, customer trust automation and in revenue and also investing on and more We QX, between we forms basic to deliver our new million. customer revenue This midpoint light increasing types. and over impact strong I require million customer handing success, and services, and offerings and growth play compliance, we're crime technical are and training sales services execution have it some XXXX outlook. accelerating momentum, our expect guidance $XX touch a our will $XXX $XXX initiatives, in an our year-to-date this margins that facilities, $XXX increase rate million full-year to million. Â For sales to which continue investing on operational year. double-digit

$XXX.X we full-year representing increased and free adjusted revenue our approximately result adjusted $XXX margin XX.X% a a of approximately million. of As approximately of and these cash million, of guidance, EBITDA factors expect flow

look has and Balaji the believe to tireless I our forward in detail. earnings work up team company our go another plan hand during sharing that, QX call. Â With to our it the set our over through great to XXXX look details to financials QX we of XXXX year. I'll XXXX, outlook the for of we As the more

Balaji Sekar

driven QX We Revenues good and year, QX X.X% million growth by we Bryce, of offering increased of $XXX.X beating million, third in of to Sequential year-over-year the compared again also accelerated DCX third our In million with volumes you, generated earned the guidance by primarily at guidance. Thank our revenues to afternoon, approximately our to for previous outperformed our in and beating X.X%. ramps. Â In guidance, the existing stronger-than-expected the everyone. million. once our growth client $XXX new $XXX of X.X% quarter, midpoint expectation XX.X% $XXX.X from QX. growth range X.X% quarter, of total

strategic new growth in primarily to clients BFSI, from line health Bryce positive fintech, the generative attributable service As covered focus revenue saw earlier, AI results was to our we this performance. Similar strong client QX, and tech, on industries.

gaming, services client U.S. our discussed cost entertainment, client which have We verticals. in declines optimization strength partially and also travel were initiatives, a by industry increases prior saw and professional offset we certain from on calls. These

resulting revenue.Â Sequential in QX in safety and from and our $XX.X in XX.X% offering, also of million includes content accelerated crime Our and trust which compared by services moderation of compliance grew financial to growth QX X.X% QX. X.X% XXXX, to

where in earlier, As strong a this needs. our we compliance are fintech growth our clients' in continued crime services which and excited the growth service line, align acceleration included with progress discussed about financial by continue vertical, well of and largest our client our to

verticals trust We existing and of solutions growth from saw also a our and most new safety of across our clients. for mix

pick our provide as in our Our clients' up million AI AI and autonomous maintenance largest expansion by have generative services XX.X% service client seen services client.Â Â Additionally, $XX.X testing and year-over-year, of AI demand line primarily initiatives. of delivering revenue, services vehicle in a in we grew development for our result we largest to support

services' concentration our up AI to In QX from their accelerate AI expect approximately as QX, our of was largest investments. generative clients again with growth XX% XXXX. up client rate XX%, ramp QX revenue We in in year-over-year

we increase to again concentration Here, growth in have to expect QX. returned our and accelerating revenue

the the strong world. XX% from to America QX region. in accounted of XX, compared X.X% from and our continue India, XX of revenue again United in we year. of of XX from respectively, of States in our top takeaways XX%, acceleration quarter, top excess for the in in which clients. competitive Our the Philippines, rest of XX% XX% recent client, strong particularly to clients generated the across year-over-year.Â Â In largest revenues we saw outside as strength and all Latin XX, We and in XX growth cohorts, XX% XX% the top our XX% XX% We and of see Europe, growth saw top client-size well as and and in our third And growth in year-over-year resulting clients XX%, grew top previous primary the

year-over-year we continue all full expect For of to States. growth XXXX, revenue the delivery other of in our the United than geographies year

in of service XX.X% year. revenue a to was were due of competitive and quarter operations, cost SG&A compared from was our dollar the revenue the third compensation expansion expenses of percentage of or in compares wage typical improved reduction costs our cost support Stock of revenue XX.X% outlook, The marketing, $X.X of benefit offset increase decreased U.S. by revenue. by XX.X% compared million, the pressures, This and compared as in XX.X% ongoing inflation, XXXX expenses a offset the to QX to prior of or the quarter, million of pricing to Our revenue. partially was sales, the $XX.X QX year.Â Â In and the our investments in to stronger year. and recruiting previous higher benefits million third to previous technology. by SG&A This facilities $XX.X result as

guidance been addition, company expenses of performance have earned last that we included of $XX.X million, third to EBITDA costs are we adjusted of bonus EBITDA QX litigation and expense discussed that also course call. midpoint. our nonrecurring outside margin XX.X% litigation-related margin the quarter incurred XXXX from to the ordinary of business. an of our $X.X of These XX.X% In million higher a XXXX, the due at $XX.X excluded improved and on we related versus expenses our million metrics.Â Â In adjusted

the adjusted based adjusted year. the $XX.X in prior the U.S. our dollar EBITDA margin outperformed quarter was guidance certain decline, and million, the resulted guidance. period have quarter adjusted the in than Absent margin during same against last EBITDA declined time slightly approximately reduction And Forex EBITDA X.X%. higher the at of we'd currencies. QX, This an on was rates forecast. Our of our At

net period, and share Bryce we also higher-than-expected head earned comparison, As XXXX.Â Â Adjusted and per support momentum for income the By with quarter adjusted associated the income ramp of was was the EPS $X.XX. earlier, we impacted and year of $X.XX. investments $XX.X the earnings mentioned revenue by year-ago growth ongoing adjusted million into was to adjusted the of as the in the million for business expenses net quarter the $XX

of Our from repurchase resulting stock included our impact the our lower adjusted share program. EPS count

as compared Now moving XXXX, XXXX of Cash $XXX.X million XX, million. the of cash to the balance and on December September $XXX.X balance were XX, sheet. equivalents with

ratio to healthy X.Xx of end was the leverage we net our and be $XX.X plan. had approximately continues end, left of repurchase Our at on QX.Â As share quarter of authorization million

Given its $XXX.X on was shares as increase operations of to increase payments.Â Our with working to through ramps during QX during $XX.X of our well of repurchased QX basis Cash compared in XXXX. tax XXXX.Â Â Â The immaterial an the strength changes remainder in programmatic associated million design, a in anticipated was The to QX investments decrease expenditures driven continue by an growth primarily from million $XX.X will million XXXX of QX. we year-to-date the $XX.X decreased as basis QX through through an as business generated compared number on client driving year-to-date through the a million capital of XXXX. XXXX to capital of of

to CapEx year. adjusted EBITDA. for we As Year-to-date approximately expect a $XX free result, million was the XX.X% $XX.X cash of or flow million adjusted now be

our due flow and during buildup expect expenditures we capital of the associated capital to QX, cash accelerating in adjusted working noted conversion the revenues with remainder free XXXX. As lower increased of

terms outlook remainder $XXX of to of financial be in million. year, for the the million now $XXX range to year revenues In XXXX full anticipate we of the our

costs discipline. about that year of investment the foreign cash .The forecast EBITDA, for we from demonstration captures free EBITDA approximately conversion additional implies generate year. the great earlier.Â Â Â We expect earn approximately guidance XX% ramp EBITDA XX.X% the This of revenue flow and adjusted deliver to adjusted XXXX a a of of spoke revision our of over to million $XXX to financial rate in expect increased exchange, impact adjusted We full margin margin adjusted

ordinary free adjusted nonrecurring and of guidance litigation business. impact flow course Our are of certain outside the cash the which excludes costs,

in the of range million, includes $XXX.X the we expect $X which revenues. million $XXX.X quarter, For to of fourth revenues million to seasonal approximately be

currency margin We is fourth margins. margin adjusted expect EBITDA guidance to our change based rates.Â So and the adjusted year approximately quarter for EBITDA to any our on rates would Forex be current full impact XX.X%. The

and on As see impact revenue not collected a U.S. now we our do it majority dollar so reminder, the of dollars, fluctuations our of in to back U.S. billed hand the revenues.Â I is will Bryce.

Bryce Maddock

you, Thank Balaji.

to individual eight dwarfism, music production, Pimendees like composing with he George I'd decision George not was was felt wanted that him, teammate's to returned up. Seslanii, setback questions, share But TaskUs was a ready songs. Â But was from his He his driven still aspirations. medical the years. this studied resilience. for him to George in and career. one of Greece. unfit would fulfill a degree, story Instead a work employment, and workforce.Â However, school, to a for find releasing a to is to the most open who his his and own bar his based He His of working chance and to soon story. bachelor's always ruled letting decided of to we something of talented condition, give career dreamed teammate time. was is make that the Born missing. TaskUs began another Before one he successful building George earning join he for After commission due

on and to our the role, to commitment Operator? for where unique we their open join day's wasted bringing with biggest minds. to For His his determined the connected our I'll to part day event trust line two thrives session. for and Niki. that, to newfound perseverance, team opportunities us He the team passion, he time.Â He all With case us medical attended tirelessly ask he career right his client inspires becoming his this who each George story George potential. perspective, Tesla our for He change the in years, commission to operator George TaskUs of question-and-answer immediately work. no reach his his deserve. Â With always Thanks work. succeeded. a advocated went back took Today, the for safety recognized to his a in opportunity, to

Operator

will come Jonathan And Instructions] Lee from the first Guggenheim. with [Operator question

Yu Lee

Tremendous of be to highlight around the you you may XQ? acceleration understand confidence it days, give the momentum did into here. are drivers into some early to see this next continuing And underlying we growth What return double-digit of that pace year. while

are that So, any trends be you about initial there how demand growth you or may XXXX? seeing shape will budgeting in think

Bryce Maddock

Thanks is growth for the services In revenue business. again growth both driven This in will being expect we accelerate. question, AI Jonathan. our QX, Safety by revenue and expected double-digit and Trust

expect operations in lines both these investments going our largest growth due We Gen AI of our currently accelerate this countries X relationship client. Â We're to the our their with trust strategic rates safety. in to different also in service QX are and client expanded with and support to growing from

growth lot that known operating high the our clients we of the growth driven service their made in support in service in digital we've also of lot Excitingly, our also into seeing there, line. offerings vehicle share single is work Finally, model continuing customer And we're as for repeatable from autonomous our automation, is of a AI in TaskUs investments believe by our expanding to largest client. is expected QX and expanding offerings business our digits. Â We're progress developers the competition, superior are rate for. slated accelerate with take simple foundational and to performance. And premium kind a

more sustain continue we share next years, know now, opportunities early earnings service from XXXX, see front the investors QX and of us. rate. happen We're and to what in our prior take year. Â For will the we're specialized leaning into our with As call, excellence guidance which competition on we'll expertise to investing formal to to for in growth I that operational provide is consistent want

if XXXX we and think in will I be execute margin the industry. properly, best the rate amongst our growth

Yu Lee

in term? help whether guys I new seen with and pricing structure in continue remarks. have of and you prepared some some trends may quarter follow-up, pricing signings you the those pressure your in to to expect a near unpack contract those think as And medium you you the Can dynamics highlighted

Bryce Maddock

Yes.

competition We haven't we of who seen since fast in from as an out some time not larger and last trends when as may competitors the pressure pointed growing increase call TaskUs. be our pricing the

providers. to we complex of XXXX, strategy off. Â As we We've crime customer offerings simple of support. to a of positioning provider as that really and trust we workflows continue like And for paying more safety, and currently, complex returning call continuing grow sustaining demand margins.Â And lot look really feel services. forms work TaskUs not we're the always been of above more to while like that about I known specialized AI adjusted think is and XX% our to types the EBITDA competitors a on AI are the is lead fare way premium in a better the sustaining than deployment to services, revenue financial think and direct compliance, most center double-digit seeing services that the you're growth We for and traditional environment so, in

Operator

question And from Jain our next JPMorgan. comes with Puneet

Puneet Jain

results. strong Very

throughout a high So, end the on look step at $XX up you back, about change take million up revenue, by like million. end moved low this if $XX year, guidance like by moved your

increase? processes? existing anything So, volume there transaction now? that new just started it's existing with in year I out drove drove increase we jumps know the that reasons. But like what or the when or is adding many What at such guidance significant fintech more clients like probably more to from clients a maybe clients or processes

Bryce Maddock

offering feel reduction challenging on we with cost a clients service part real been a our more business largest base. back a financial which look compliance crimes client we really shifts AI had our client are different last a growing. two amounts XX-month with relationship a clients, fastest-growing we years. Â In we our we for some years, AI few beneficiary and services Again, AI If our success which investing large our in year across confident. really many our client the in was suffering the They're where introduced making and some period work the are huge Yes. services, were with those time We've other client at moved look that had better volume initiatives, largest them is largest in the year, in TaskUs here, were from largest This dealing investments. Â If is money at over to and really across our focus continuing reprioritized autonomous of offshore. trust onshore expand I safety, both offshore growing of service massive investments, their our had generative and investment only got generative last which at AI.Â And there, vehicle so, our a efforts particularly client. line, we've and and in to of and of

Our vehicle rolling to client well. that as a is out that's driving autonomous the return country, growth autonomous customer at across largest scaling, and vehicles

really to it's phase are our specialized to would customers multifaceted these the really say that in And growth picture. have services simply positioned the that is seeing of cost-produce. a demanding. biggest So, investing thing I we're But a is provide to looking clients rather than returned well TaskUs

Puneet Jain

well? was segment potentially in safety, and as you trust what for benefit customer, your specifically provide there any XQ, election-related to in then And largest in that XQ to

Bryce Maddock

to And very this at going a huge busy been provide with number do year a trust We largest election-related and polls. countries safety year customer. Yes. of our has work the

we expect U.S. end that don't client. of the Fortunately, revenues at election impact will that the presidential

I safety in think, in ramp-up are largely regulatory to across them response, and the pressure. continuing globe, to We trust from see investments a

So, to XXXX. continue revenue our grow we trust client safety largest at to into and are going

Operator

Blair. comes And Maggie next question from with our William Nolan

Margaret Nolan

targets do prioritizing outside as you share that or in you any can there top account vertical us? diversification Are particular, XXXX? you with we enter And the growth have

Bryce Maddock

Yes.

focus presence we've enterprise, particularly banking technology expect high-growth in a a our reason contract got almost service all to of verbally XXXX, We is QX, a financial health cost this doing began expanding in reduction. focused we and are very our in just banking services the payer. Â The and care. successfully we're been and sign who in clients And XXXX clients large customer, which landed our on in to with financial on and awarded have in healthcare experience

in concentrated be risky can how to area. us to exposed one so really that think it be I

sat would really banking the And financial team we leadership trends see traditional be of countercyclical. And and which strategically a we and as so, care planned nice growth areas felt health services. we in down more and

to our fintech like give the We us larger also credibility call and these felt enterprises. with tech would health experience upon customers

verticals strategy that versus work. to in of used fast-decision-making past. off. work, that a the to kind has It's larger will beginning see that very we've you're in dealing But cycle strategy both been dealt longer should clients feel fast-growing, of is continue start-ups we It enterprise XXXX. so confident and with in growth we sales And those paying the with than the we're to because

Margaret Nolan

you of And a segments? the it pricing commentary, I across or know little give could But quarter. you necessarily on or was that better bit worse the different wasn't this said different incrementally how color

Bryce Maddock

think TaskUs inside we're in we if for. Also, willingness and we're about really a have So services workflows our I customer the trust and mission-critical bifurcation specialized clients lines, talking service in seen AI digital business. seeing to on of expertise the rely invest a experience, in that safety

the pressure more interactions, simple be beginning acquisition support.Â And easily more to side, benefit sales. invest support have well. journey, side is white at vast glove as On complex interestingly, how think they're significant. all they about the so of premium very And talking there, we in TaskUs to I clients automation automated.Â There, do their actually pricing customer that as stand is from work want likely is X majority the Tier one customer But to success, that of you the we are

Operator

And the Schneider Goldman next Sachs. with question comes from Jim

James Schneider

basis at SG&A you the your which as either or bit, grow? wondering, mean those stepping sort And that can you're feel growth investment investing now, that cost absolute might of you invest? line grow. and for little that clearly, of In growth. an happens. enough words, you sort growing the on continue you've I'm of in as stabilize into philosophy little that Maybe sort ahead in margins as investments sort about of of investments continue investing revenue that line other sort bit you put a highlighted the that about you point under a thinking you a that to of think as terms to is of pressure of I of do be there expect back you're dollars XXXX, a heading we amount pace you as on

Bryce Maddock

question. great it's Yes, a

accelerating to that XXXX, the EBITDA order to North said, on that been growth growth. do growth. able year. and we to as With that we we've has expertise Star In plan to do service focus the will drive is our in to investments recognize line look be at continue So being dollar sales excellence, sustaining this we our rates our achieve adjusted expand operational and specialized double-digit continue marketing, that, we our to think

which making so our we're is to on EBITDA XXXX, dollar significant growth focus in And do. that we expect sure adjusted driving

going than I simply for growing is few able is continue continue be invest we're to that top-line the we get SG&A. XXXX come revenue I to will to in that think expect our that to faster better growing by to next happen to XXXX, not key be to XXXX. over leverage business going our Whether over now. will heavily or to But that going I'm right into real the say years SG&A. Â And say

expect We we've investments. quarter those XXXX this seen into be the based that growth on will rates sustained that

leverage sure SG&A better absolutely over the seen to look getting make the will We years get to few margins in EBITDA we're next our back we've adjusted historically. and

James Schneider

XX time the what wanted XX diversification. way of ask large And top I your it for see to customer the over either quarter, But asking are with earlier another the healthcare future. something good that that in could or is, sort ambitions of sort question, win up the to you then sort to to Basically, vertical the relative in on top the follow payer that size? of cited scale by or customers of customer represent in with that your

Bryce Maddock

the operational largest they I become to clients. to one top potential aren't have customers. certainly we be, certainly in But become There's will our the if successful Yes. They we of that and execution, expect potential our now. our for are customer one of

a I grow with in a tech years health leading great industry think And a to working It's clients. is heavily massive number got we've health regulated will the materially of care come. credentials really opportunity. that

for tech customer to to to been enterprise journey help excited in traditional successful I'm deploying the them be our speak healthcare, resonating, can healthcare for healthcare, next best using clients. so health enterprise years. we've apply practices and can what see particular, in in That their and the offering TaskUs of few credentials become seems to we And about companies go those to and how some that we're redesign

Operator

our Haggarty next from question with comes And Baird. Jacob

Jacob Haggarty

Congrats a on great quarter here.

a on just question So again. margins

So be with kind talked what them it's levers offshore here in least level pressure XXXX? pricing like have of could have margins pull increase You U.S. much guys do to to potentially as the said being pretty shift and low at done guys keep to you to or the going get. as about you

of just into pull wondering I'm the you here? as go we have So what kind levers to year new like

Bryce Maddock

clients. that clients based biggest move pull provide going them. our offerings are the Well, in reliability service chain the value we levers of pay and up is to we have continuing on to sophistication to the the service Ultimately, the deliver to we

aimed we're that at and are to so of to directly doing. work the investments profile able And our rate specialized sustain continuing margin the be expand our growth in services

higher that that Europe America. Â And few are you significant an have growth and of work and margins margins of in also business, over to significantly the onshore-to-offshore last It's by than the Philippines which like delivery, the U.S. the geographies. Over lower are important history to seen India helped that places Latin shift seen outside U.S. have years, of we we've the the in we've slightly been geographies, those than note though largest tend our in but

a I'll over head particularly of, called be want of couple items to to for XXXX. to on at hand we those to think I the consideration into And as just XXXX. out everyone topic outline I QX it of few items that a as Balaji have of I we want margin, aware look

Balaji Sekar

Thanks, Awesome. Bryce.

of mentioned, health from $X kind So not retail as last million but our predominantly year, right we're has we look as now, that which like with in providing QX comes in kind we of Bryce care QX seasonal will recur revenues, -- consistent and at of guidance for QX, not clients about XXXX XXXX. while

So then different is what is with compared fewer second of year, a which QX XXXX, unlike XXXX, consistent X QX has saw little is too. working days. And to item, XXXX the that last in bit we of

periodic by be or which, fixed, our we look an -- that So costs XX bill salaries, but basis. a are days. monthly driven our of XX at on driven you while QX clients And basis, QX was will about revenue about a by working days, pay quarter if so often example, given on much as we

the margins QX and will this impact of day have impact XXXX. working our of on And negative So reported be margins and a in revenues to to on clear, QX. is negative isolated revenues

Jacob Haggarty

Got ramp year-over-year, maybe you're expect that a second QX, implies we you year? a lower you. comp that thinking That's but -- obviously, the on throughout of in rate tougher well. in Obviously, maybe about very helpful. basis here some quarter-to-quarter to that should And about because the when had of saying Just kind kind growth half. XXXX, sequential a sequentials thinking then revenue just as

Bryce Maddock

Yes.

of in point, beginning stage, sales into QX have that QX on our this at very the been strong. So and

don't to Balaji read so revenue want as to said what necessarily. to And QX decline QX going I be is from

we While everyone we're won't you're really working to guidance, know want X% in fewer recur. see revenue days having providing and there's that $X drag not to X from this seasonal formal going million just that that

XXXX. our that into trends say do We ability for the we're about half precision us there what happen. Â As rest back challenging sell grow team hard our the but both we to the our in look means in So it's continue given to at with we're is to And confident. very have make of success a to year, sequentially, to moment, sustain comps to work to growth feel half to we've of over at more of hard in And those feeling things. definitely are XXXX, the have seeing the confident little order the that of very had to XXXX. the that continue going XXXX, back

Operator

conclude will conference and Thank so This time. this today's much at questions you further call. participating, you disconnect. for no now show may I

TaskUs (TASK) 7 Nov 242024 Q3 Earnings call transcript