StarTek, Inc. (SRT) Q4 2021 Earnings Call Transcript

StarTek, Inc. (SRT)
Q4 2021 Earnings Call
Mar 10, 2022, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon, everyone, and thank you for participating in today's conference call to discuss StarTek's financial results for the fourth quarter and full year ended December 31, 2021. Joining us today are StarTek's Global CEO, Bharat Rao; and the company's global CFO, Nishit Shah. Following their remarks, we'll open the call up 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 laws.

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 the summary of these risks and uncertainties. Startek does not undertake the responsibility to update any forward-looking statements. Further, the discussion today may include some non-GAAP measures in accordance with Regulation G, the company has reconciled those amounts back to the closest GAAP-based measurement.

The reconciliations can be found in the earnings release on the Investors section of our website. I would now like to remind everyone that a webcast replay of today's call will be available via the Investors section of the company's website at www.startek.com. Now I'd like to turn the call over to StarTek's global CEO, Bharat Rao.

Bharat Rao -- Chief Executive Officer

Thank you, Jonathan. Good afternoon, everyone, and thank you all for joining. I would also like to introduce Ronald Gillette, who has just come on board toward the end of January and he has joined us as Head of Business Transformation. Ron is the former chief operating officer of WNS and brings a wealth of experience to StarTek.

So please welcome Ron onboard. Since joining as president in October 2021, I've had the pleasure to travel across the globe and meet with our employees, customers and stakeholders to get a firm grasp on the opportunities and challenges across our entire organization. Before I jump into the details, I wanted to start this call by taking time to thank all our dedicated employees and stakeholders across the globe. Your commitment and dedication to StarTek throughout all the difficulties we have faced in the macro environment has been instrumental to our continued progress, and we deeply appreciate the support.

For the structure of this call, I'm going to begin by walking through our accomplishments in the fourth quarter and what we've been able to achieve in the first five months that I've been on the helm and then I'm going to pass it to our new Global CFO, Nishit Shah to walk through our financial results for the quarter and provide the full year in more detail. Finally, I'll return to discuss our strategic growth initiatives going forward. On that note, let's dive into the fourth quarter. Our fourth quarter performance was primarily focused on supporting our steady growth across core verticals and developing our operational foundation to hit the ground running in 2022.

Our progress was reflected by our year-on-year revenue growth for both the fourth quarter and the full year, which occurred in conjunction with the cost management initiatives we've implemented throughout the year. Our revenue in 2021 and the fourth quarter increased year over year, primarily resulting from the growth we experienced in our key verticals. Telecom continues to be our largest vertical in terms of percentage of revenue. And we saw a healthy growth, largely driven by adding new lines of business with our existing clients.

The large win with the South African telecom client that we spoke to in the previous quarter went live on October 1 and has ramped well through the quarter. Although e-commerce and consumer saw a slight overall decline due to volume reduction of a U.S.-based client, we were able to offset some of that due to a substantial ramp in our e-commerce and food delivery platform in India. While the uncertainty brought on by the pandemic has started to recede, our travel and hospitality verticals have yet to rebound. However, the discussion with clients have started to refocus around growth and ramp and therefore, we expect the travel sector to rebound sometime in the second half of 2022.

On the other hand, financial and business services saw large recoveries back to pre-pandemic levels as we began to move away from the macro constraints that we've brought up in the past. As mentioned before, our vaccination program in the second quarter was a success, leading to a 32% increase in revenue within our healthcare and education verticals for the year. Despite some of our verticals having slight declines due to macroeconomic conditions and volume reductions, we were able to largely offset these decreases with sustained growth across our leading verticals. Operationally, we continued to be focused on strengthening our technological infrastructure.

As many of you know, we were hit with a malicious cyber-attack earlier in 2021. Since then, we bolstered our operations and security to ensure that our company stays resilient to any future events. Our initiatives included adding multiple layers of security to our data servers and emails, including geofencing and a two-factor authentication, establishing a 24/7 center of excellence monitoring and scanning our networks across the world, among other efforts taken to ensure that we provide an enhanced, secure environment to both our clients and employees. As technology continues to evolve at a rapid pace, we believe it is our responsibility to maintain our platform, and that is up-to-date with the state-of-art security measures for our customers, and we remain committed to that responsibility going forward.

We also spent much of the past quarter evaluating consolidation and rightsizing opportunities across our footprint. It has been our goal to maintain a lean and efficient organization that will be increasingly important as we look to produce meaningful revenue growth. We have already begun improving efficiency in some of our U.S. delivery centers, especially as we transition to our overall hybrid and remote work plan.

We remain set on our outlook of having 75% and a 25% split of campus versus remote agents, respectively, which will have a substantial effect on the utility of each campus. As such, we are working to maximize the utility of each center as part of our rightsizing strategy, which includes the consolidation of facilities and enclosures. We'll keep you abreast of any material changes to our footprint as we further evaluate the best course of action. In addition to evaluating optimal efficiency across our footprint, we also continued to build out our executive team.

Our company is rooted in the business of people and that starts with our leaders in the organization. In October, we appointed Vivek Sharma as global chief revenue officer, who has helped us lead our efforts to deepen our existing relationships with customers, as well as pursue new growth opportunities coming on the horizon. Vivek has a stellar record in the outsourcing industry, having spent over a decade at Infosys BPO, where he headed the global sales and marketing team and was also a member of their executive counsel. Rebecca Goltry joined us in November as our chief marketing officer with more than 20 years of experience in brand marketing.

She will be using her expertise to ensure that StarTek has a strong presence across all channels and drive our new go-to-market strategies. Around the same time, we appointed Abhinandan Jain as chief digital officer, who will be spearheading our digital innovation and ensuring that we remain focused on leveraging and expanding our digital partnerships. Our leadership team has seen a large transformation in the past year, including my transition to my current role as Global CEO, and each member new and incumbent have been paramount in driving company initiatives. Our executive team was not only part of the organization we expanded upon.

We consider our sales ecosystem as one of the main pillars of this company, and we invested heavily in this area by revamping our sales infrastructure with a reorganized solutioning and lead generation team. We also invested into our marketing team to better identify our brand positioning and effective go-to-market strategies. In addition, we placed much of our attention in driving digital partnerships by entering into POCs with our clients. These POCs are being supported by leading digital companies and start-ups with whom we intend to establish partnerships to boost our digital practice and provide most advanced and flexible solutions to our clients.

For a leading computer manufacturer, for instance, we are deploying a hyperintelligent automation tool for triaging and case creation, which helps them drive customer response times down by 70%. Leveraging an AI-based noise cancellation application for a major telecom customer to deliver superior voice support, deploying a voice-based artificial intelligence omnichannel platform to transform customer service for a major utilities company. These are a few examples of the kind of POCs that I alluded to earlier. The fourth quarter and much of the back half of the year shared a common theme in preparing this company for its future growth opportunities, which I will discuss later on during the call.

Overall, I'm very proud of the progress we've made across the organization and firmly believe that future is bright for starting. Before I jump into our strategic initiatives for the year and going forward, I would like to turn the call over to Nishit Shah, our global CFO, to provide further details on our fourth quarter and full year financial results.

Nishit Shah -- Chief Financial Officer

Thank you, Bharat, for the introduction. I'd like to first begin by expressing my excitement to join this organization and use my expertise to help accelerate the growth and enhance value for all stakeholders. There is much to look forward to with the strong foundation we have in place and look forward to executing on our growth priorities. With that being said, let's drive into our financials for the quarter four.

Starting on the top line. Net revenue in Q4 slightly increased to $178.7 million compared to $174.5 million in the year-ago quarter. On a constant currency basis, net revenue increased by 2% compared to the year ago quarter. This year-over-year growth reflects continued performance strength across our key verticals and geographies.

Gross profit for quarter four was $26.8 million compared to $30.2 million in the year-ago quarter. Gross margin was 15% compared to 17.3% in the year ago quarter, which was primarily attributable to the growth in our telecom and banking and financial services vertical that are delivering onshore. The gross margin for the quarter for 2021 was also impacted by a special bonus payout of around $2 million that was distributed across the organization. Selling and general administration, SG&A expenses for fourth quarter increased to $15.1 million, compared to $14.7 million in the year ago quarter.

As a percentage of revenue, SG&A was the same at 8.4% compared to the year ago quarter as a result of continued operating leverage on the back of higher revenue base, we generated during the quarter. Our investments in high-performing sales solutioning and marketing and digital team in order to drive growth and depreciation impact our SG&A in the fourth quarter. Our net income attributable to StarTek shareholders for quarter four increased significantly to $6.7 million or $0.16 per share compared to a net loss attributable to StarTek shareholders at a negative $7.6 million, or $0.19 per share per year-ago quarter. Net income in the fourth quarter of 2021 included an approximate $4.5 million of impairment charge on the right-to-use asset that was driven by the decision taken to rationalize our brick and motor facility across multiple geographies, where the company -- client services in pivoting toward at-home deliveries the net income attributable to StarTek shareholders also include $16.7 million in fair value gains from the investment made in CSS cost.

Net adjusted income attributable to StarTek shareholders for quarter four increased 47% to $12.9 million or $0.32 per diluted share compared to an adjusted net income attributable to StarTek shareholders of $8.8 million or $0.22 per diluted share in the year ago quarter. Adjusted EBITDA in quarter four was $18.9 million compared to $23.3 million in the year ago quarter. As a percentage of revenue, adjusted EBITDA was 10.6% compared to 13.4% in the year ago quarter. The decline was primarily a result of impact to gross profit associated with the special performance bonus declared in December and due to high base in 2020 that had benefited from government grants.

The quarter was also impacted by increase in IT costs related to upgrading of our applications and major [inaudible] to enhance secured infrastructure. From a balance sheet perspective, at December 31, 2021, our cash and restricted cash increased to $55.4 million compared to $50.6 million at December 31, 2020. The total debt at December 31, 2021 was $117 million compared to $136 million at December 31, 2020. The net debt, excluding restricted cash at December 31, 2021 was $122.1 million compared to $91.5 million at December 31, 2020.

We remain comfortable with our liquidity position as it stands today. In addition, we repurchased an aggregate of 353810 shares of our common stock under our repurchase plan during the fourth quarter at an average cost of $4.44 per share. This was testament to our continued confidence in our long-term growth prospect, as well as our strong execution of this initiative. As we progress into 2022, we have maintained our commitment to further support our investments in key market-facing growth initiatives.

We also plan to invest further in improving our IT and the go-to-market strategy, including enhancing our digital first capabilities and further building out our sales and marketing teams. We expect this investment in our enhanced infrastructure to -- have put in place to boost our operational foundation for the quarter ahead. And we look forward to provide further updates on our growth trajectory. Now let me briefly review StarTek's 2021 performance.

Net revenue in 2021 increased 10% to $73.6 million compared to $60.2 million in 2020. Gross profit in 2021 increased 12% to $197.6 million, compared to $87.2 million in 2020. And our gross margin increased 30 basis points to 13.9%, compared to 13.6% in 2020. Adjusted EBITDA in 2021 increased 24% to $172.4 million, compared to $58.2 million in 2020.

As a percentage of revenue, adjusted EBITDA was 10.3% in 2021, up by 120 basis points compared to 9.1% in 2020. Net income attributable to StarTek shareholders in 2021 increased significantly to $11.5 million or $0.04 per share, compared to a net loss of $39 million or $0.99 per share in 2020. Adjusted net income attributable to StarTek shareholders in 2021 increased 221% to $127.3 million or $0.67 per share, compared to $18.5 million or 0.22% in 2020. This concludes my prepared remarks.

I will now turn the call back over to Bharat.

Bharat Rao -- Chief Executive Officer

Thanks, Nishit. I want to take this time to provide some commentary on our strategic initiatives for 2022 and beyond. I've been involved with StarTek's strategic direction since the merger with Aegis in 2018. And I have seen the steady progress we have made these last few years to transform a company burdened with loaded cost structure into a lean and efficient organization ready to grow.

Being in the helm of an operational -- from an operational perspective, our focus over the past five months has been on preparing this company for the growth opportunities we've identified across our core verticals. With all the initiatives that I discussed earlier, we have the utmost confidence in our position heading into 2022, and we feel that we are now prepared more than ever to capitalize on the opportunities at hand. Subsequent to the year-end, we continued our initiatives in bolstering our leadership team with the appointment of Ronald Gillette as strategic advisor and head of business transformation. Ron was most recently the CEO at Continuum Global Solutions and was previously the chief operating officer for WNS.

He will lead the charge in optimizing our CX delivery capabilities to ensure that our platform can handle the ramp-up in volumes that we are expecting. We also have Nishit Shah and Jayanta Lahiri, joining us as our newest members serving as our global chief financial officer and global chief information officer, respectively. Nishit brings years of industry experience and financial reporting, mergers and acquisitions, legal and compliance and much more. He will be integral in our mission to maintain a balanced and efficient organization with healthy financials.

Jayanta is one of our investments to ensure our platform is fully capable in today's environment. He will continue to drive our IT transformation into an agile and secure environment for StarTek and its clients. Having a strong leadership team in place is paramount to accomplishing our goals that we set out for ourselves, and I'm confident in the C-suite that we have assembled. Going into 2022, we will be continuously expanding our overall capacity and optimizing our platform to enhance our omnichannel capabilities.

We will continue to invest in our sales ecosystem, and we plan on hiring more senior sales staff to implement new initiatives in those areas such as targeting strategic verticals like BFSI, healthcare, e-commerce and high-tech. Our marketing team will be ramping up its efforts in communicating our brand unique digital-first capabilities to existing and potential customers. We reviewed and further defined our target audience to enable more focused demand generation activity. And as part of our brand building activity entered into partnerships with several third parties to develop our leadership content.

Furthermore, another key area we are focused on is driving new digital partnerships in 2022. In fact, Abhi Jain has been driving a few very interesting POCs with some of our strategic clients that have vast potential to become stand-alone solutions that we can bring to the market. We are also focused on taking up very strategic digital projects and partnerships that can help us offer cutting-edge and relevant solutions to our clients. We will continue to optimize our delivery centers as our efficiency ramps up further.

Our campuses will undergo some internal efficiency changes in order to maximize their utility. And we're exploring all options to ensure our company is at the right size. We have begun discussions with clients in establishing more sustained hybrid working models and we have had very encouraging and engaging responses from our clients. Most of the new deals that Vik is participating in also have a greater preference for the work at home model, which we believe is going to be more prevalent going forward.

We are, therefore, closing down some of our sites, particularly in the high-cost geographies. Lastly, I would like to provide an update on the nonbinding acquisition proposal by CSP Management Limited. On December 20, 2021, our largest shareholder issued a nonbinding proposal to acquire all the shares of StarTek that it does not already own -- for $5.40 per share in cash. Subsequently, our Board of Directors formed a special committee of independent directors to evaluate the proposal.

They have brought on legal and financial advisors to thoroughly examine the deal, while the committee continues to value its evaluation process, I don't have any material updates to provide, but we'll continue to keep shareholders updated on any meaningful progress. Overall, we have taken necessary steps to prepare for accelerated growth, and we are ready to hit the ground running. Although we continue to expect top line growth, we will continue to invest heavily for the future, which we anticipate will limit growth to the bottom line in the near term. Our core verticals are right with the opportunity, and we are confident in the foundation we have built to capitalize on those prospects.

With that, we will now open the call for questions. Jonathan, over to you. Thank you.

Questions & Answers:

Operator

Thank you. [Operator instructions] Our first question comes from the line of Chris Howe from Barrington Research. Your question please.

Chris Howe -- Barrington Research -- Analyst

Good afternoon, everyone. First off, I wanted to welcome everyone to the call that's new, and it's a good meeting, everyone for the first time. I wanted to talk about fiscal year '22. You mentioned some of the performance within key verticals.

For example, travel and hospitality, you said sometime in the second half, you should see some recovery. As we look at the first half of fiscal year '22 versus the second half of fiscal year '22, how would you place revenue and the expense structure into context versus what you saw this last fiscal year?

Bharat Rao -- Chief Executive Officer

Thank you for the question. Am I audible at your end?

Chris Howe -- Barrington Research -- Analyst

Yes, you are.

Bharat Rao -- Chief Executive Officer

Wonderful. So just to make sure I understand your question because we had a bit of a disconnect on the call at our end. Is the question around the -- how do we see the first half of '22 versus the first half of last year? Did I understand that correctly?

Chris Howe -- Barrington Research -- Analyst

No. That's not the question. Well, in regards to the key end markets, you mentioned that certain end markets should see a recovery in the second half of fiscal year '22. So as we look at the first half of fiscal year '22 and the second half of fiscal year '22, how would you compare and contrast them to this last fiscal year on revenue and also the expense structure?

Bharat Rao -- Chief Executive Officer

Right. So on the first, I'll just provide an overview and then we can take any more -- any specific questions. When we look at the first half of '22 versus the second half of '22, what we do expect is that some of the initiatives we have put in place from a digital perspective with the buildup of our sales team in the first half of '22 will start showing us results in the second half of '22 typically. As you would expect, some of these initiatives, especially in our industry, they do take time to come to fruition.

So there is some lag between the investments made, the people that come on board. So we are working through that. So we do expect to have more sustainable revenue and base going into the second half of '22. I did mention that we should see recovery in some of the verticals, the travel, etc., going into the second half of 2022.

So in summary, I think it would be fair to say that the first half of 2022 won't have the same benefits that we had in 2021 because in 2021, we still had the benefit in the first half of some of the COVID-related work that we provided a lot of support for but we should see the efforts of the first half of 2022 culminate into a much stronger pipeline from a revenue perspective going into the second half of 2022. Equally, the investments clearly have to be front-ended. So we would expect from a bottom line perspective, the first half of 2022 to be relatively flattish in terms of bottom line because we do see the investments that we have to make upfront to be able to realize the benefits in the second half and then into 2023.

Chris Howe -- Barrington Research -- Analyst

That's very helpful. And the follow-up will dig into the -- you mentioned you're identifying centers with suboptimal performance for further evaluation and consolidation. Can you talk about this in more detail what you've discovered as you've -- obviously, you have more flexibility with the work from home modality. What's your time line for this consolidation or optimization of your footprint?

Bharat Rao -- Chief Executive Officer

Sure. I think that's a very good question. What we have done, so just to ensure that I'm very clear in terms of what we mean I wouldn't call them suboptimal performance. This is more in the context of the point that you just made on a transition to work from home and therefore, some idle capacity.

So what we -- the way we looked at it was, how do we right-size the organization and ensure optimal capacity utilization. So that's the way we looked at it as opposed to looking necessarily at suboptimal performance, if you will. So, we looked at how do we optimize capacity so that we can ensure that we are also able to provide the optimal focus from an operational perspective. So we have done -- we have already taken steps in that direction.

And toward the end of this of quarter four, we identified the executive team work through to identify the facilities that we could potentially consolidate. And we've already taken that upfront. So going into 2022, we will actually see the benefits of that flowing through into 2022. Nishit, do you want to add anything to that in terms of -- would you want to add any more color to that?

Nishit Shah -- Chief Financial Officer

Yes, Bharat. So if you go back to the initial discussion that we had in the call, we did cover that on some impairment charge that we had done in quarter four. And that's precisely linked to the discussion that you just mentioned on some of the facilities that we're looking at to optimize and that will give us a benefit in 2022.

Bharat Rao -- Chief Executive Officer

Thanks, Nishit. Does that provide you some more color and helps you get a better understanding?

Chris Howe -- Barrington Research -- Analyst

Yes. That's perfect. And one last one, if I may squeeze it in. You mentioned some of the details as much as you could regarding the nonbinding proposal and the special committee is ongoing its review of this proposal.

Does this in any way affect how you go forward with your growth initiatives just to get it out there.

Bharat Rao -- Chief Executive Officer

Sure. I think very, very pertinent question in light of everything that's happening currently. But a short answer to your question, no, there will be no impact from an operational perspective. The initiatives that we have identified and our priorities for investment will continue unawaited.

So there will be no impact from a management perspective on the direction that we've chartered and the initiatives that we have prioritized going into 2022.

Chris Howe -- Barrington Research -- Analyst

OK. Thank you so much for all the details.

Bharat Rao -- Chief Executive Officer

You're very welcome.

Operator

Thank you. Our next question comes from the line of Zachary Cummins from B. Riley Securities. Your question please.

Zach Cummins -- B. Riley Financial -- Analyst

Hi, good afternoon. Thanks for taking my question. Bharat, I just wanted to ask you around some of these foundational aspects that you spoke to in the call. Ever since you took over the leadership position, you've been building out some of these key aspects to really get the company ready to scale as we move forward.

I mean can you discuss maybe some of the areas that you focused on and kind of some of the key actions that you took to really get the foundation in place for the company to grow moving forward?

Bharat Rao -- Chief Executive Officer

Hey. Sure, Zach and good to reconnect. It's -- so in terms of the areas that we have prioritized going into 2022, and the work already started in quarter four of 2021, when I stepped in as President. The three pillars of our growth will be digital solutions and building our digital capabilities.

As I mentioned last time, and I continue to reiterate that our focus will be on our digital initiatives, partnerships, working closely with clients to identify areas of optimization internally and solutions and customer insights that we could offer to our clients. The second area is revamping and rebuilding our entire sales ecosystem. And the third area for us is building a robust technology platform. We continue -- we have always invested in our technology, but clearly, after what we went through, we wanted to ensure that we have significantly improved capabilities on our technology front to ensure a stable and a secure environment.

So these are our three pillars. And going forward, we will also build serious capabilities on our technology infrastructure across a few horizontals. Now given that these three areas are our key areas of focus on the digital side, we are building out our capabilities with Abhi Jain, who joined us in quarter three of 2021, and he's currently building out a team. And as I mentioned, he's already got a few proof of concepts and pilots underway.

So I'm pretty excited about everything that we're doing in that space because this is going to create serious IP for us as we go into 2022 and beyond. From a sales ecosystem perspective, as I mentioned, we brought in, in quarter four, we had Vivek Sharma, who joined us from Infosys BPO. And Vivek is now building out his team. We have already revamped our solutioning and lead generation team because that effectively is the foundation for a much stronger sales ecosystem.

We also brought in Rebecca, who brings a wealth of experience in brand management and knows the industry very well. She joined us from Cytel and is working on some very interesting initiatives on the brand repositioning front. As I mentioned, we have also strengthened our lead generation and solutioning capabilities and added on a few experienced resources across geographies in that area. On the technology front, apart from implementing a number of recommendations that the team -- the technical expert team from Palo Alto Networks that we had retained provided us after we had the ransomware attack.

So A, we implemented a number of their recommendations. B, we have strengthened the team and recently had Jayanta Lahiri, who was the CIO of FirstSource, and he brings extensive experience from large organizations such as Wipro and Accenture and he brings a wealth of experience and will be building out our entire IT and infrastructure ecosystem. So what we have done is identified our key areas of investments and ensured that we get the right people to build out those areas. And last but not least, in fact, is having Ron on board.

I mean Ron brings a wealth of experience, and he's kind of come in to help us with our entire transformation and provides the kind of deep domain expertise. As I mentioned earlier, he was the COO of WNS. And prior to that, a very senior partner at Accenture, Deloitte, a number of other organizations having spent over three decades building this business. Ron, if you would like to add some of your insights and provide some more color on the kind of initiatives that we have going into FY '22? I really appreciate that.

Thank you.

Ron Gillette -- Strategic Advisor and Head of Business Transformation

Sure, Bharat. Let me just add to that. I think Bharat covered a lot of it. I think the work that's being done by Abhi and the digital space is really important.

As we -- as StarTek and all companies experienced the pivot to work from home during COVID and some of the other things that they had brought home to us was certainly, the need for more technology enablement and then to work in the new operating model going forward for North America, the United States, in particular, there is the layer on the app of employees and employers. So in this case, our clients to have agents work from home, which presents some technology challenges that many of them were addressed in a fashion to be able to enable that pivot from home. But as Bharat mentioned, strengthening our technology platform and our environment to enable that, not just here in North America, but globally is important because work from home is caught on in some other locations as well. and we'll find itself more institutionalized.

But the initiatives that Abhi is focused on the use of AI and machine learning and robotic process automation to strengthen our service delivery, I think, are very promising. Certainly, we've had some of that in place with some clients, but now it's adding to that and building that out and making it available to more clients making part of our core offering going forward. So very promising potential here and opportunity. So the hard pitch that was delivered from COVID has also been something that StarTek responded too well at the time and has learned from and is making that part of a guiding principle here of what we do with the company going forward.

Bharat Rao -- Chief Executive Officer

Thank you, Ron. -- that provides you some clarity?

Zach Cummins -- B. Riley Financial -- Analyst

Yes, absolutely. I always appreciate the additional insight there. And... Just one other question.

Is really on potential cost pressures. I mean, just given the current inflationary environment and the challenges to find talent to really execute upon these projects, how are you planning on kind of managing the associated costs with that and being able to maintain margins here in the near and longer term?

Bharat Rao -- Chief Executive Officer

A very good question, Zach. And I guess this is an issue that is faced not only by StarTek, but by everyone globally. And that's where we talk about, A, ensuring that we have the right delivery platform, look at what we can offer onshore versus nearshore and offshore, so right shoring, if you will, of our proposition. That is one element.

The other element is where we start having a lot of technology enablers to the solutions we provide. The benefit of which clearly flows through to customers. And therefore, they see the value that our proposition brings in, and therefore, to a certain extent, insulates us from the kind of cost pressures that we face. But equally, I think what is going to be important is technology is also going to be a big enabler in helping us improve the kind of engagement that we maintain with our agents, Ron alluded to some of the challenges around the work-from-home situation.

So to the extent we have technology and technology enablers that provide us to improve the experience that agents have when they work from either from any remote location or from our centers will go a long way in helping us create the right environment and culture to be able to offset some of these cost pressures. Does that give you some guidance in terms of what we are looking to use to mitigate the effect of the cost pressure?

Zach Cummins -- B. Riley Financial -- Analyst

Yes, yes, extremely helpful. I think that's all the questions I have for now. So thanks again for taking the questions and I'm looking forward to reconnecting soon offline.

Bharat Rao -- Chief Executive Officer

Thanks. Thanks, Zack. You are very welcome.

Operator

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Bharat Rao for any further remarks.

Bharat Rao -- Chief Executive Officer

Thank you, Jonathan, 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 first-quarter results.

Operator

[Operator signoff]

Duration: 50 minutes

Call participants:

Bharat Rao -- Chief Executive Officer

Nishit Shah -- Chief Financial Officer

Chris Howe -- Barrington Research -- Analyst

Zach Cummins -- B. Riley Financial -- Analyst

Ron Gillette -- Strategic Advisor and Head of Business Transformation

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