Startek Inc (SRT) 2020 Q3 法說會逐字稿

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Startek's financial results for the third quarter ended September 30, 2020. Joining us today are Startek's Chairman and CEO, Aparup Sengupta; and the company's CFO, Ramesh Kamath; and the company's President, Rajiv Ahuja. Following their remarks, we'll open the call for your questions.

Before we continue, we would like to remind all participants that the discussion today may contain certain statements which are forward-looking in nature pursuant to the safe harbor provisions of the federal securities law. These statements are based on information currently available to us and are subject to various risks and uncertainties that could cause actual results to differ materially. StarTek advises all those listening to this call to review the latest 10-Q and 10-K posted on its website for a summary of these risks and uncertainties. StarTek does not undertake the responsibility to update any forward-looking statements.

Furthermore, the discussion today may include some non-GAAP measures. In accordance with Regulation G, the company has reconciled these amounts back to the closest GAAP-based measurement. The reconciliations can be found in the earnings release in the Investors section on their website.

I would like to remind everyone that the webcast replay of today's call will be available via the Investors section of the company's website at www.startek.com.

Now I would like to turn the call over to Startek's Executive Chairman and Global CEO, Aparup Gupta. Sir, please proceed.

Thank you, Rose. Good afternoon, everyone, and thank you all for joining. During the third quarter, we continued to make progress in our recovery from the pandemic and further improve our operational efficiency. We have driven sequential quarterly improvements across all key financial metrics. And we generated significant year-over-year growth on the bottom line.

Our team has demonstrated great agility and dedication in navigating through this difficult period across geographies, and I'm extremely proud of their hard work. Around the world, our team is operating at near full strength with over 90% of our global workforce now active relative to pre-COVID levels and working either remotely or from one of our delivery campuses. This hybrid remote model is not only persevering our team's health and safety, but also improving the already high quality and efficiency of our performance.

In the months since we implemented this model, absenteeism has decreased and our StarCloud omni-channel platform has enabled us to facilitate seamless remote work for our team and innovation-led customer experiences for our client base. Rajiv will be on later in the call and give you some more additional context on our digital optimization initiative as well as our long-term vision for our hybrid work model. These operational improvements have allowed us to expand the scope of our work within our core verticals and launch new client programs, all while carefully managing our costs.

With our StarCloud technology, the digital solutions we are using have become a key competitive advantage in how we go-to-market as well as for the client programs we currently have in market. Robust demand within e-commerce, health care, telecom and banking and financial services as well as ridesharing and food delivery services have prompted our clients to more fully leverage our evolving digital offerings. We are focused on deepening our digital footprint within these and other core verticals and continuing to serve as an adaptive and highly technology-enabled partner to our clients and prospects.

With the progress we have made this quarter, we are in strong financial and operational position to maintain our momentum. Our business has proven resilient to even the most challenging impacts of the pandemic, and we are preparing for the next stages of our long-term growth strategy. The foundation we have placed will allow us to continue evolving our services and improving our position as an innovative strategic partner to our clients.

Before commenting further, I would now like to turn the call over to our CFO, Ramesh Kamath, to take you through Startek's financial results for the third quarter. Ramesh?

Thank you, Aparup. Jumping right into our results. Net revenue in quarter 3 was $162.7 million, up 14% from quarter 2 and slightly down from $164.6 million year-over-year. The sequential increase reflects our recovery from pandemic-related lockdowns in many of our geographies in quarter 2. On a constant currency basis, net revenue increased 3.5% compared to the prior year period. Gross profit for the quarter was $22.9 million, which is a 45% increase from quarter 2 and down from $28.5 million last year. Gross margin was 14.1% compared to 11.1% in quarter 2 and 17.3% in the year-ago quarter.

Similar to our top line, the gross profit and margin increase from quarter 2 reflects our continued recovery from pandemic impacts. The year-over-year decline is a result of higher outsourcing, contract and communication expenses, partly offset by lower travel and recruitment costs and technology-driven productivity improvement. Selling, general and administrative expenses for the quarter were $14.9 million compared to $14.6 million last quarter and $22.9 million in the year-ago quarter.

As a percentage of revenue, SG&A grew to 9.1% compared to 10.3% last quarter and 13.9% in the year-ago quarter, reflecting the sustained benefits of cost reductions we have implemented over the last 12 months. Net income attributable to StarTek shareholders for the quarter increased to $0.4 million or $0.01 per share compared to a net loss of $5.2 million or a loss of [$0.15] per share last quarter and a loss of $2.8 million or $0.07 per share in the year-ago quarter.

Adjusted EBITDA for the quarter was $15.6 million, up nearly 80% from quarter 2 and 17% in the year-ago quarter. As a percentage of revenue, adjusted EBITDA increased to 9.6% compared to 6.2% last quarter and 8.1% in the year-ago quarter. The increase was primarily driven by aforementioned recovery from the lows of pandemic last quarter as well as cost reduction and prudent expense management over the last year.

From a balance sheet perspective, at September 30, our cash and restricted cash increased slightly to $56.6 million compared to $56.4 million at June 30, 2020. The increase in our cash balances was primarily driven by continued strict control over costs and in working capital improvements and deferred principal debt prepayments, $4.2 million of which will now be paid in November. The total debt at the end of the quarter decreased to $136 million as compared to $149.9 million at June 30, 2020, primarily due to lower drawdowns on our revolve and working capital facilities.

As a result, net debt at September 30, 2020, was reduced to $79.4 million compared to $93.5 million at June 30, 2020. We remain comfortable with our liquidity position as it stands today, and we will continue to carefully manage nonessential expenses and other costs to preserve the optimum efficiency of our operations. As we monitor the improving trends in our business and the evolving conditions surrounding the pandemic, we aim to begin reinvesting in both IT and non-IT capital expenditures over the coming quarters.

These additional investments will support further technological enhancements and increased build-out of our sales and marketing capabilities. We will have more to share on the initiatives on future calls, and we look forward to complementing the operational growth we have already made and further positioning our business for future growth.

This concludes my prepared remarks, and I will now turn the call over to Rajiv. Rajiv, over to you.

Thank you, Ramesh. As Aparup discussed earlier, we have made significant progress in optimizing both our digital service offerings and the flexibility of our overarching operational structure. I'd now like to provide some additional detail on these initiatives and the key roles they play in Startek's long-term growth strategy.

In terms of our revamped digital services, our StarCloud technology has been a crucial part of our continued response to the pandemic and enhancement of the services we provide to our clients. StarCloud is our in-house unified cloud that enables our customer engagement specialists to work remotely from any device, whether by computer, phone or tablet. This facilitates a campus in the cloud that connects our team members across multiple geographies.

Further, the platform's AI capabilities, including conversational chatbots will help preserve the quality of our global services by monitoring employee productivity and generating automated reports at the end of each workday. As Aparup mentioned, we are already seeing increased attendance and productivity amongst our workforce since implementing StarCloud. For our clients, the StarCloud platform integrates a variety of automation and omni-channel options to protect sensitive data and deliver seamless customer experiences.

Our security solutions are AI-enabled and PCI and HIPAA-compliant, featuring end-to-end data encryption, facial recognition systems, watermarks and centralize conduct monitoring to ensure that no breaches occur in our customer interactions. StarCloud also includes easy e-learning tools that allow clients to expedite their internal employee onboarding processes and receive additional support for their remote work infrastructures. Taken together, these capabilities are readily and efficiently addressing our clients' evolving business process management needs.

StarCloud also elevates our service offerings beyond the commodity-based services that are typically available from our competitors. We have developed an innovative, scalable and resilient platform that can evolve with our clients as well as the changing operational needs of our global team. Since introducing StarCloud in quarter 2, it has been at the core of how we have supported our clients throughout the pandemic. It has also become one of our defining competitive advantages and will remain at the forefront of our sales and marketing strategy going forward.

Further, these digital offerings are enhancing our margin profile with each incremental deal that we sign. They are allowing us to drive sales and improve the stickiness of our client relationships, while providing us the elasticity to take on higher service volumes without a proportional increase in SG&A costs, creating a very attractive model for our business with strong operating leverage.

As we think about the long-term evolution of our work environment, even post-pandemic, we believe the hybrid work remote work structure we currently have in place is here to stay. Accordingly, we have recently reduced our physical capacity by nearly 10% as our StarCloud capabilities now allow us to preserve business continuity without needing all of our team members to be based out of physical campuses. We will continue to evaluate the proper mix of on-campus versus remote work and adjust our physical footprint accordingly.

This transition to greater reliance on the campus in the cloud was always a part of our long-term road map, but the implementation was accelerated by the pandemic. With the operational improvements we have made over the past few months, we have the agility to quickly adapt to any changes in lockdown status, or resurgence in COVID-19 cases across the geographies that we are present in. Our recent operational shift in Malaysia is a prime example of how nimble our organization has become. When COVID cases began to spike in the Kuala Lumpur region, we successfully pivoted our total Malaysian workforce to a 70% work-from-home and 30% on-campus model within 48 hours of Kuala Lumpur's reinstated lockdown order that was announced.

Prior to the announcement, 70% of our team had been on-campus with only 30% working from home. Our ability to flip our operations so quickly without sacrificing service quality is a testament to our team's dedication and the resilience of our strategy. Hopefully, it is clear that we have made phenomenal progress in improving the quality and efficiency of our services, and we now look forward to further executing on these initiatives in the quarters ahead.

With that said, I'd now like to pass the call back to Aparup for his closing remarks. Aparup? Aparup?

Hi. Thanks, Rajiv. As we continue to navigate this evolving market environment through the fourth quarter and 2021, we are confident in the strong organizational foundation we have established. The health and safety of our global team remains our top priority, and we will continue to closely monitor the status of lockdowns and COVID-19 cases across our geographies. While we cannot predict how the market conditions may change in the months ahead, the flexibility we have built into our operating model keeps us well-prepared for any necessary organization pivots that may arise.

We came in 2020 with a strong global footprint, a dedicated team and strong operational efficiency and our progress throughout the year has bolstered these fundamentals and created even greater long-term growth potential for our business. As we make additional investments in our technology, sales and marketing, we can expand the depth and breadth of our innovative digital solutions to further differentiate StarTek as a value-added and innovations-led partner. Across our organizations, we will maintain our financial and operational discipline and focus on supporting our clients' evolving digital needs.

We are proud of the momentum we are generating and grateful for the support of our team and our shareholders as we further transform our business.

Rose, we will now open the call for questions.

(Operator Instructions) Our first question comes from the line of Dave Koning from Baird.

Congrats on a nice quarter. Yes. Yes. And I guess, first of all, I had a few questions. My first one is just on verticals. The telecom vertical, for the first time in a while, was up nicely sequentially. And then e-com was down about 15% year-over-year. Maybe just talk about those couple of verticals and kind of what you're seeing there.

Rajiv, will you take that question, please?

Sure, Aparup. So yes, amongst the verticals, telecom was -- did see a spike in demand. And we did see some of our other verticals like health care, BFSI and ride-hailing services as also food delivery running hot. E-commerce has also now started showing a major pickup, and we expect this pickup to continue as we move forward because as retail is -- brick-and-mortar retail takes longer and longer to get back on its two feet, we expect a resurgence in volumes as far as the e-commerce vertical goes.

Okay. Great. And I guess my second question, revenues were up 14% sequentially, but operating expenses were hardly even up. I mean, so it's a tremendous amount of leverage you're getting right now. How should we think of that going forward? Like are you pretty well maximized right now that if revenue goes up from here, we'd start to see expenses go up somewhat, too?

I would say, partially, I mean, that is how the intention was. I mean when we embarked on this thesis of operational optimization, the idea is to bring the company to a level which is very efficient. And thereafter, what happens is that the more growth you have, the incremental margins that you get is higher and therefore, at a much better SG&A expenses, you deliver more cash and more profits. So that is fundamentally the thesis of which we worked on, and it took a while, almost a year, to get us to this level. And if you see the year-ago quarter in 2019, our SG&A costs were about $22.9 million, so that's come down to about $14.9 million.

The advantage has been manyfold. And specifically this quarter, as Rajiv mentioned in his verbiage, is that we had some advantages of having lower absenteeism and the productivity was higher during the work-from-home activities that we were performing. So overall, I think it's a fair assumption that going forward as growth comes, I mean we will see, definitely, there will be an expansion in overall profitability for the company. But at the same time, we will continue to invest for our growth. So therefore, we will hire more people in sales. We will invest in some technologies.

So it will not necessarily have the 100% impact of those into profit. But yes, I mean, it's a very good guidance to have that additional revenue growth will significantly improve our margins and our profits.

Okay. Great. And then just one quick one. The non-controlling line was actually quite big. And I assume that's because there was probably a big profit pool somewhere. But how should we expect that to fluctuate? Or what's like driving that up and down?

I just didn't understand the last part of your question. Can you repeat that, please?

Oh, yes, sure. So the non-controlling income was a headwind...

Aparup?

There was a non-controlling item is our JV in Saudi, and it will move along with the profits they make. They've had a good quarter also. And that is why the figure is higher than normal, but normally, that wouldn't be too much.

Your next question comes from the line of Zach Cummins from B. Riley Securities.

Yes, congrats again on the really strong quarter here. So I guess just starting off for me, I mean, can you talk about some of the expansion wins or some of the new client wins that you've had over the recent months? I know you can't talk to specific clients, but can you talk to maybe some of the verticals where you're seeing some strength? And what's really driving your success there on both fronts?

See, I can only tell you that one big competitive advantage we had was a house that is extremely efficient and resilient, and Rajiv mentioned about that. So that has basically spilled over to our client ecosystem. So they feel very proud of us and feel very confident of us. And therefore, not only are we going to potentially get some more existing volumes from our existing customer. But our sales team led by Rick Ferry has been able to drum up some very interesting deal pipeline, of which we closed about 2 programs. One is for the U.S. government work and other is for health care customers. And there are a few other health care clients where we are in active consideration, and we have been down selected in some RFPs.

So overall, we are clearly seeing that health care is going to be a very clear focus area for us, and Rick is driving that. Just to give a little bit of background, Rick Ferry comes with significant entrepreneurial experience, and he has a very deep understanding of this sector. And if you look at his past track record of the companies that he had built, health care was one of the key verticals that he has very deep knowledge. So clearly seeing a momentum on that front. So yes, overall, we have closed 2 deals, and we are in advanced stages of having dialogues with some more health care providers.

So that momentum has started picking up. We are also seeing very interesting growth coming from India and some of the geographies where hitherto where people were using more of their in-house centers, now they are open to outsourcing. And pandemic has taught people a lot of things. So one is, if you are not ready to do it all by yourself, it is good to use a partner. And our ability to transition clients to a StarCloud platform that Rajiv mentioned has given us added confidence to people who were hitherto thinking that they will do it themselves and now looking at us and relying upon us. Rajiv, would you like to add some more to this very interesting question and the momentum that we are seeing in the market, please?

Aparup, I think you've covered most of it. But yes, we acquired 2 new logos during the quarter. And as -- while, of course, credit goes to Rick for having brought in those logos. But I think a lot of credit goes to our operating teams all across the globe that are led by our chief -- Global Chief Operating Officer Mario Baddour, and how he has managed to help us navigate through the last quarter. So yes, I think we are very bullish about what the future has to offer. But Aparup, nothing more to add, I think you've covered most of it.

Yes. Thanks. And I think that's a very good addition, Rajiv, you mentioned that in this business, existing client and existing business and new business is one of the fundamental lever for growth and Mario and team globally led that, and that was a very good uptake that we have seen.

Understood. And it sounds like under leadership of Rick Ferry, sales team has really had some nice success. It sounds like you're planning to make some investments in that area. I mean can you comment on your current sales capacity right now and how you feel about the ability to serve the demand that's out there?

Yes. I think, see, sales is something is not necessarily a science. I mean it's a combination of the amount of leadership that you get and also the quality of leadership that you get. And sales, many people think it's all about numbers, but I strongly believe that if you have the right quality of people with the right understanding with the right contact and the right, I would say, relationship, I think one sees results early on. However, just wanted to caution that sales in this industry has a long sales cycle because there is a long process that goes through evaluating a BPO vendor unlike kind of a synchronous outsourcing because this is synchronous outsourcing, which means the customer is hanging over his most precious clients at the hands of ours.

And therefore, there is a lot of diligence that goes through the whole process. So while it is long, we have decided that we will hire the right people. And Rick is driving that. We are going to invest in hiring more salespeople who are qualified, who have been and done that. And also, we have clearly seen that with our footprint today, we have the ability to offer a very wide range of services. Either you want to do your onshore work, you want to do offshore, you want to do near shore or you want to do cross shore, the way we are seeing in Malaysia, very interesting, I mean, we are having people from other parts of the Asian region coming and aggregating in Malaysia and supporting multiple languages.

So these are some of the capabilities that we have put together. And end of the day, I mean, while sales will drive home business, the business thrives and grows because of phenomenal leadership by the operating team. So I don't just look at sales independently. I look at a combination of sales and operating capacity and the operating ability for starting of a client and doing a stellar job so that customer gets confidence and gives you more. So that's -- that has how this industry has evolved. And I think that we have to believe in one single team.

While we have hunters and salespeople who will get new logos to the door, it is also important for farmers who already have existing clients and ensure that they are growing. So we are having this combination of hunters and farmers and having a razor-sharp focus on each one of them. And I always tell this story that you need to have a great storefront in addition to having good bakery. So we make good cakes, but we need to have a storefront to take it and sales guys and our account managers, our sales team, our digital development team, they all take it out to the marketplace.

Understood. I appreciate the additional color. And just a final question for me, geared toward Rajiv. I mean with the launch of your StarCloud platform and all the capabilities that you can provide now, can you comment in terms of the changes in the mix of volumes that you've seen coming into, I guess, your agents versus kind of the prior voice volume versus the pandemic -- I guess prior to the pandemic, excuse me. So I'm just kind of curious of the amount of digital channels that are being utilized to serve customer needs now.

Sure. Rajiv, will you take this question, please?

Yes. Great question, Zach. Certainly, Aparup. So Zach, it's still a work-in-progress, a large amount of this, and obviously the pace at which digital is being adopted is changing almost by the week. But if I was to give you pre-COVID versus where we are today, approximately we've seen an uptick of close to about 30% in the adoption of different channels that comprise our digital strategy, which now -- where now our agents are employing. So if I was to hazard a guess, it would be in the 30% range.

Understood. That's helpful. Congrats again on the strong quarter.

Our last question comes from the line of Omar Samalot, a private investor.

Impressive quarter. Nice to see that EBITDA margin bumping into the 10% threshold, very, very impressive. My first question is regarding your -- I read in the Q that 50% of your workforce is now work-from-home, around 40% of your facilities. And I did notice that the Canadian facility did not renew the lease. So is that something that we should be expecting going forward, I guess, facilities not renewing as the lease come to expire?

You know what, the best person to answer, our mastermind on this, Rajiv Ahuja. Rajiv, it's your question.

Aparup, why is it that I have to answer all the tough questions? No. Okay. Let me give it -- let me give you a little bit of [boost]. You know what, at someone in time, I'll lead with it, not a problem.

Yes. Okay. Go ahead.

Please go ahead. Please go ahead.

No, no, no. I was saying that (inaudible).

So Omar, coming back to your question -- yes. Aparup, please go ahead.

Rajiv, go ahead. No, no, Rajiv, go ahead.

Okay. So Omar, we've -- like I mentioned, we've given up almost 10% of our global capacity. And we firmly believe that the hybrid model is here to stay. And I think we did discuss this on the last earnings call also. In our opinion, concerted opinion, we feel that number would be roughly about 25% to 30% work-at-home and about 70%, 75% brick-and-mortar. Obviously, these numbers could change in the event there's another wave of the pandemic that comes and strikes us. But at the current slope, we feel that 25% to 30% is a realistic number.

Accordingly, what we've done is we've redrawn our capacity map, and we figured out that we need to give up some surplus capacity as it keeps coming up. So obviously, it's contingent upon our ability to get out of those contracts, which basically means the leases are coming towards an end. And Canada, like you rightly pointed out, we've just given it up, and we moved 100% of the workforce to a work-at-home solution. Do we expect to give up more in times to come? Absolutely, yes. But it's difficult right now to give a number, or put a finger on a positive number, but we will continue to look at ways and means to rationalize capacity, thereby also rationalizing cost, so that we continue to sharpen the pencil in the quarters to come.

Very good. Very good. And that also brings another question because, obviously, the company throughout the history of the company has always tried to focus on higher-margin business. But when you have a situation where your cost structure could actually shift lower as these changes happen, does business that otherwise it would decline due to being on the lower side of the margin would now become maybe more attractive to bring on given the structural changes?

I'll take that question. Let me first tell you that there has been the -- I think you have heard about this company about we did high grading, and therefore, higher-margin business and low grading. I strongly do not believe that there is something called as high-grade and low-grade. I mean we work with some of the customers and they are outstanding customers. The idea is how do you become extremely operationally efficient as an organization. Because end of the day, price at some point in time is determined by the market forces. So it is important for organizations to have what I call is cost leadership.

So at the one hand, you need to have cost leadership. And on the other hand, you need to have phenomenal ability to innovate and come out with service offerings. Today, I think as a management team, and I'm very proud of the entire management team that has led this thesis that every customer that comes through a door is a precious customer, he has the ability to grow and he will be with us if you do a good job. So therefore, obviously, I mean, you will become more profitable once you look at your operating capacity and so on and so forth.

Just to give you an example, I mean, we inherited Philippines infrastructure of one large building that was weakened for a long, long period of time. Some action should have been taken. So what we have done is we have looked at capacity with a magnifying glass. And I said Rajiv is a mastermind largely because of us staring at each other, we had anywhere vacant capacity at the same time with pandemic people working from home, we looked at each other. What should we do? So we took a call that let's go back to a mode where we can bring optimization, not only in the capacity of our organization, but also the manner in which the operations are done, the manner in which efficiencies are unfolded using technology by looking at the final footprint of our ratios of team leaders and the manner in which we check quality, the manner in which you manage hiring process to ensure that you are trying to be right first time all time.

So if once you do those, I mean, you eliminate wastages. So it's not that you are inherently sitting on a large cost structure, you can actually bring lot of efficiency. So once you do that, we believe that with the kind of client profiles we have, each one of them are precious to us, and there's nothing like a high grading or a high-margin or a low-margin customer. By and large, in this business, customers pay you a fee, which is of a certain threshold. The ability is to manage it well.

So therefore, we are -- while we are very happy with our existing set of clients, we are also seeing clearly momentum of some of the clients that we are pursuing, having the ability to pay us more because of who we are and the kind of stuff that we are doing. So I would take our digital offering as a competitive advantage and get larger price points and not by going after the client who give us more. I mean we should be able to command more because of what we do. And that's the strategy. So it's a -- both an inside out as well as an outside in.

Very good, clear, very clear. Okay. Obviously, you guys are showing growing EBITDA margins, much improved ratio. I think we're probably around 1.5x leverage ratio. It seems to me like a perfect recipe for successful refinancing at some point. Is that still in your target? And maybe you can share any status on that?

Ramesh will answer this question, but I can only say, Omar, it's a very good thought. But beyond that, I don't have any comments to make, unless Ramesh, you want to give some idea to Omar.

Thanks, Aparup. Hi, Omar, how are you? Omar, your thoughts are quite correct. Yes. Your thoughts are absolutely right. It's just that the results are out today, and our bankers have been asking for it. So we're going to talk to that and see if they feel the same as you did just now. So yes, that's definitely something we are thinking about, but we were waiting for the results to come out and inform the bankers.

Very good. Fair enough. Fair enough. Okay. And I also noticed a very impressive revenue increase in your Middle East sector quarter-over-quarter, around 21%. I was wondering if you could comment on that, what drove that.

See, I can give you some idea on what's happening on the Middle East side. Today, if you look at Saudi Arabia, it is resurgent into a very different economy, and we are very proud that there are a lot of women who work in Saudi Arabia. We have been one of the employers of a very large number of women in Saudi Arabia. And today -- and consumer experience is also becoming a key competitive advantage. If you look at Saudi Arabia market, it serves itself, but now it could lead -- become an epicenter for kind of Arabic support for the Middle Eastern region because of the stability and the very high-quality infrastructure and the high-quality talent that exists there.

And you'll be very surprised that there are also multilingual possibilities that can be possible out of Saudi Arabia, for example, one very large retail brand team and start their operations in our center. So clearly, while STC is one of the principal client in this joint venture, we are seeing momentum of other companies who have consumer service and other back-office related service that can be decoupled from their internal expensive cost structure to a more efficient service provider. CCC, our joint venture is clearly seeing a lot of momentum in the marketplace.

So we will continue to do that and see that we focus and the idea was to make this as an epicenter for Middle Eastern and Arabic support and multilingual Arabic support. So that led by [Mansur] and team will -- they are already working. And hopefully, we will be able to maintain our momentum. But of course, yes, this sudden surge that you have seen is because we had onboarded a client, and that was the reason why it improved. And we will see how it goes. But yes, we are very optimistic, and we are very hopeful of some of the possibilities in that region.

Well, very good, very good. And congratulations on a great, great quarter.

Thanks. Thanks, Omar.

Thank you, Omar.

At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Sengupta. Sir, please proceed.

Thank you, Rose, and thank you all for joining us this afternoon and for your continued support of StarTek. I look forward to speaking with you next when we report our fourth quarter and our full year results. Thank you.

Thank you. Ladies and gentlemen, you may now disconnect.