TaskUs, Inc.

Good afternoon, and welcome to the Tax As Investor call. My name is Livia, and I'll be your conference facilitator today. At this time, all lines have been placed on mute to avoid background noise. After the speaker's remarks, there will be a question and answer session. To ask a question during the session, you will need to press the start and the one key on your touch-tone telephone. I would now like to introduce Alan Katz, Vice President of Investor Relations. Alan, you may begin.

Good afternoon, and thank you for joining the Task Us fourth quarter and year-end 2021 earnings call. Joining me on the call today are Bryce Muddock, co-founder and chief executive officer of Task Us, and Balaji Sarkar, chief financial officer. 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 the website at ir.taskus.com. We also plan to post supplemental information on our website, including an investor presentation and other materials following this call. Please note that this call is being simultaneously webcast on the investor relations section of the company's corporate website. Before we start, I would like to remind you that the following discussion contains forward-looking statements within the meaning of the federal securities laws, including, but not limited to, statements regarding TASCAS's future financial results and management's expectations and plans for the business. These statements are neither promises nor guarantees and involve risks and uncertainties that may cause actual results to differ materially from those discussed here. You should not place undue reliance on any forward-looking statements. Factors that could cause actual results to differ from forward-looking statements can be found in our updated perspectives filed with the SEC on October 22, 2021, which is accessible on the SEC's website as well as in the investor relations section of our website. and may be supplemented with subsequent periodic reports we filed with the FDC. Any forward-looking statements made in this conference call, including responses to questions, are based on current expectations as of today, February 28, 2022, and taskers are seen to have no obligation to update or revise them, whether as a result of new developments or otherwise, except as required by law. The following discussion contains non-GAAP financial measures. for reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP metric, please see our earnings press release, which is available in the IR section of our website at ir.taskus.com. Now, I will turn the call over to Bryce Maddock, co-founder and chief executive officer of Taskus. Bryce?

Thank you, Alan. Good afternoon, everyone, and thank you for joining us. 2021 was a very strong year for Taskus. Our team delivered growth in the fourth quarter that, once again, came in above the high end of our guidance range, and we set ourselves up for another year of solid growth in 2022. Before I dive into the financial results, I want to take a minute to acknowledge the great work of our team in keeping our teammates safe and healthy. The pandemic and recent world events have impacted everyone in different ways. Many of us have seen our mental health impacted. In response, our global wellness and resiliency team stepped up to support our teammates during this difficult year. They completed nearly 30,000 group and one-to-one counseling sessions with Task Us teammates across the globe. At Task Us, our teammates are the most important asset in our company. Our highest priority is to support them and keep them safe. Moving to our financials, Q4 was another very strong year. quarter of top and bottom line growth. Revenue grew organically by 63.4% year-on-year to $226.8 million, above the top end of our guidance range of $217 million. Adjusted EBITDA grew 70.5% year-on-year to $56.2 million for an adjusted EBITDA margin of 24.8%. also above the top end of our guidance range of 23.3%. For the full year, we achieved $760.7 million in revenue and $187.9 million in adjusted EBITDA for an adjusted EBITDA margin of 24.7%, again, above the top end of our guidance ranges. We ended the year with top-line growth of over 59%, while maintaining margins that we believe are among the highest in the industry. To say that I'm proud of what we accomplished this year would be an understatement. 2022 is off to a strong start. The theme for the year will be growth driven by a broad and diversified client base. For 2022, we expect to grow revenues organically at 30% at the midpoint of our guidance range. Apology will provide a more detailed breakdown of our guidance later in the call. For now, I'll turn back to Q4. We continue to make great progress across our five growth levers this past quarter. We executed particularly well on the first two growth levers, expanding with our current high-growth clients and adding new clients across verticals. In digital customer experience, we grew revenue by 69% compared to Q4 2020, driven by expansions with existing clients and new client signings. A big part of our success in this area has been driven by our investments in the fintech and cryptocurrency space, where we're delivering the specialized services these high growth businesses need to grow and protect their brands. We also saw continued expansion with our ride sharing and food delivery clients. These clients' business models continue to evolve and grow, and we're being asked to take on more complex work, handling premium customers, and dedicating teams to support critical rider and driver safety lines, as well as investigate and manage fraud and disputes. Content security revenues grew by 23% compared to Q4 2020, largely driven by volume growth with existing clients. We expect content security growth to be a bit more lumpy than the rest of the business, as volumes from this service are still highly concentrated amongst three leading social media companies. We currently provide these services to one of these companies and believe the other two companies represent meaningful growth opportunities. We have continued to grow our content security services with other clients, such as dating apps, e-commerce sites, and exciting new NFT marketplaces. Finally, AI operations revenues continued to grow tremendously in Q4. Revenue from AI operations grew by 128% year-on-year in the quarter, driven primarily by expansions with new and existing clients in social media, fintech, and e-commerce, and a large autonomous vehicle company. We've been investing heavily in AI operations, developing a crowdsourcing platform that we call the Taskverse, Taskverse.com is now live and accepting sign-ups. This platform will enable gig workers with varying skill sets from across the globe to perform micro tasks for our high-growth tech clients. We believe the most common use case for this platform will be collecting and annotating data sets for machine learning projects, but we're excited to see what our clients demand and our community delivers. We're in the process of rebranding AI Operations as AI Services to better represent our breadth of offerings and align to industry nomenclature. Going forward, I'll refer to this service as AI services, which will be made up of the same types of work that we previously described as AI operations. Moving on to signings, growth from existing clients again accounted for approximately two-thirds of our signings in Q4. We had our largest signing in the quarter with one of our fintech clients. This client is a major player in the cryptocurrency space. We will be expanding the customer experience work that we do for them today, increasing our support for institutional clients, and providing security analysis of blockchain transactions. We signed an expansion with our largest health tech client, a digital health insurance provider, to meet their rapid growth needs. We're providing both inbound and outbound services for their patients and providers and expect revenue from this client to roughly triple in 2022. We added some great new clients in Q4, including an NFT marketplace, a fast growing outdoor retailer with a cult-like following, and a large online genealogy business. Finally, we landed our first contract with one of the largest tech companies in the world. Here, we're helping them to scale their learning and development function by delivering instructional designers, technical writers, and learning specialists. Overall, 2021 was a tremendous year for our sales and client service teams. We ended the year with a new client win rate of 49% and a total new business win rate of 60%. our net revenue retention rate for the year was 141% up from 117% in 2020 because we retained our high growth clients and helped them to scale aggressively. As we head into 2022, we have a strong pipeline of opportunities with both new and existing clients. Before we move on, I want to provide an update on our largest client. As we said in the past, this client is not only our largest client, but also continues to be one of our strongest client relationships. In fact, we did more business with them in Q4 than in any other prior quarter. In January of this year, we began discussing a project to optimize our global delivery footprint for this client. Based on this analysis, we plan to shift hundreds of roles to our operations in the Philippines and India. We continue to grow our teammate population globally with this client and expect to have more teammates supporting them at the end of the year than we do currently. But given the changing geographic mix, we are not forecasting any year-on-year revenue growth from this client in our 30% revenue growth outlook for 2022. This optimization project will begin in Q2 and be completed before the end of the year. Once the transition is complete, we will continue to have teammates supporting this client in all four countries from which we provide them services today. We expect this client to continue to be our largest client for the foreseeable future. It's also important to note that with robust demand across our broadening client base, we do not anticipate having to eliminate any jobs as a result of this transition. Teammates supporting this client today whose roles will be transitioned will move to support some of our most exciting and fast-growing clients. As I said at the start of the call, we expect 2022 to be a year of diversified growth across a growing portfolio of high-tech clients. We did a great job laying the foundation for this last year. For example, in 2020, we had 46 clients at $1 million a year or more in revenue, including eight clients at over $10 million a year. In 2021, we grew to 72 clients over $1 million a year in revenues, and the number of clients for whom we delivered $10 million or more in services doubled to 16 clients. We also continued to expand the number of specialized services that we deliver to our largest clients. In 2020, seven of our top 20 clients used two or more of our specialized services. In 2021, this number more than doubled to 15 of our top 20 clients. That segues nicely into our third growth lever, expansion of our service offerings. We increased our investments in thin crime and risk in the fourth quarter. In Q4, we appointed our former head of legal to lead this new business line. We also began hiring a team of experienced fraud risk and compliance practitioners who and cryptocurrency experts to lead our go-to-market strategy for these offerings. We see this as a natural expansion of our capabilities for FinTech clients and see a tremendous opportunity ahead. We're also expanding our learning experience services. In addition to the signing that I mentioned earlier, we have multiple clients now turning to us to manage learning and training across their enterprise. We're helping them to modernize their learning strategies, deliver learning analytics, and maintain their instructional and knowledge-based content. This service area is born out of our ability to train and develop our own teammates. We're excited to continue our investments and thought leadership in people development by broadening our suite of services. We will announce this new offering publicly this quarter, branding it as Task Us Learning Experience Solutions, or LXS. During the fourth quarter, we also made progress on our fourth level, geographic expansion. We expanded into Japan and Malaysia and expect to expand into Poland and Romania this year. We're also growing in our current geographic footprint, adding capacity in India, the Philippines, the U.S., and Latin America. Lastly, in terms of M&A, our fifth growth driver, we continue to look at deals and have seen some interesting opportunities. We're focusing on companies that are accretive to our long-term growth rates, margin targets, and most importantly, our culture. We're particularly interested in M&A to accelerate our growth in Europe or add to our specialized service capabilities. It's important to note that any M&A completed in 2022 will be incremental to the revenue guidance we are providing today. Our progress on these five growth levers and our broadening base of high-growth clients positions us to deliver on our medium-term revenue growth target of 25% or above for the years to come. Our success in 2021 was equally impacted by our operations. Across the industry, we've heard about the challenges of attracting and retaining talent. In Q4, we added approximately 4,500 net new Taskus teammates and met our clients' hiring requirements. Attracting great talent is key, but retaining talent is equally as important. Our attrition rate for the year, as measured by voluntary attrition after 180 days of employment, was 15.3%. Our glass door rating was 4.6 stars at the end of the year, down 0.1 stars from last quarter, but well above our peers. As of December 31st, approximately 90% of Taskus frontline teammates around the globe continue to work safely from home. We expect to begin to return some teammates to our offices starting in Q2, but given the recent variants, we're taking a cautious approach here. A portion of our global teammate population will likely continue to work from home for the foreseeable future. 2022 is off to a strong start. our growth is being driven by a broadening base of innovative clients. We're expanding our geographic delivery footprint and deepening the specialized services our clients rely on us for. We are well positioned to deliver 30% organic revenue growth at the midpoint of our guidance range. With that, I'll hand it over to Balaji to go through the financials in a bit more detail and provide our outlook for Q1 and the year ahead.