TaskUs, Inc.

Previous wording

This Quarterly Report includes certain historical consolidated financial and other data for TaskUs, Inc. ("we," "us," "our" or the "Company"). The following discussion provides a narrative of our results of operations and financial condition for the three months ended March 31, 2026 and 2025.

Current wording

This Quarterly Report includes certain historical consolidated financial and other data for TaskUs, Inc. ("we," "us," "our" or the "Company"). The following discussion provides a narrative of our results of operations and financial condition for the three and six months ended June 30, 2026 and 2025.

Previous wording

As required by the 2019 TaskUs, Inc. Stock Incentive Plan and TaskUs, Inc. 2021 Omnibus Incentive Plan, we made proportionate adjustments to the terms of outstanding awards in conjunction with the Special Dividend (the "Equity Adjustment"). The Equity Adjustment resulted in $1.2 million stock-based compensation expense, recognized primarily in selling, general and administrative expense on the condensed consolidated statements of income for the three months ended March 31, 2026, and a reclassification of $6.7 million from additional paid-in capital to accrued payroll and employee-related liabilities.

Current wording

As required by the 2019 TaskUs, Inc. Stock Incentive Plan and TaskUs, Inc. 2021 Omnibus Incentive Plan, we made proportionate adjustments to the terms of outstanding awards in conjunction with the Special Dividend (the "Equity Adjustment"). The Equity Adjustment resulted in $1.2 million stock-based compensation expense, recognized primarily in selling, general and administrative expense on the condensed consolidated statements of income for the six months ended June 30, 2026, and a reclassification of $6.7 million from additional paid-in capital to accrued payroll and employee-related liabilities.

Previous wording

Net income for the three months ended March 31, 2026 increased to $24.3 million from $21.1 million for the three months ended March 31, 2025. This increase is due primarily to revenue growth and foreign currency gains, partially offset by higher cost of services. Adjusted Net Income for the three months ended March 31, 2026 decreased 8.9% to $32.8 million from $35.9 million for the three months ended March 31, 2025. Adjusted EBITDA for the three months ended March 31, 2026 decreased 1.2% to $58.6 million from $59.3 million for the three months ended March 31, 2025. Adjusted Net Income and Adjusted EBITDA are non-GAAP financial measures. For definitions and reconciliations to net income, the most directly comparable measure in accordance with GAAP, see "Non-GAAP Financial Measures."

Current wording

Net income for the three months ended June 30, 2026 increased to $22.0 million from $20.0 million for the three months ended June 30, 2025. This increase is due primarily to revenue growth, lower selling, general and administrative expense and foreign currency gains, partially offset by higher cost of services and financing expenses. Adjusted Net Income for the three months ended June 30, 2026 decreased 22.8% to $30.6 million from $39.7 million for the three months ended June 30, 2025. Adjusted EBITDA for the three months ended June 30, 2026 decreased 11.2% to $57.7 million from $65.0 million for the three months ended June 30, 2025. Adjusted Net Income and Adjusted EBITDA are non-GAAP financial measures. For definitions and reconciliations to net income, the most directly comparable measure in accordance with GAAP, see "Non-GAAP Financial Measures."

Previous wording

Trust & Safety was primarily driven by an increase from new clients, mainly in Technology. The remaining increase was primarily driven by existing clients, mainly in Technology and Social Media, partially offset by a decrease in Retail & eCommerce.

Current wording

Trust & Safety was primarily driven by a decrease from existing clients, mainly in Social Media and Retail & eCommerce, partially offset by an increase in Technology. The decrease was partially offset by new clients, mainly in Professional Services and Financial Services.

Previous wording

The increase was primarily driven by higher personnel costs of $19.5 million associated with increased headcount. The remaining increase included facilities costs associated with site expansion and enhanced security measures.

Current wording

The increase was primarily driven by higher personnel costs of $13.5 million associated with increased headcount and the operating shift to higher cost geographies. The remaining increase included facilities costs associated with site expansion and enhanced security measures.

Previous wording

The effective tax rate for the three months ended March 31, 2026 and 2025 was 32.9% and 28.9%, respectively. Costs related to the issuance of stock-based compensation, operational efficiency costs, transactions costs and severance within the provision for income taxes calculation are adjusted for Non-GAAP purposes. If those costs are removed, the provision for income taxes would have been $11.0 million and $10.3 million and the effective tax rate would have been 24.8% and 25.7% for the three months ended March 31, 2026 and 2025, respectively.

Current wording

The effective tax rate for the three months ended June 30, 2026 and 2025 was 25.6% and 25.9%, respectively. Costs related to the issuance of stock-based compensation, operational efficiency costs, transactions costs and severance within the provision for income taxes calculation are adjusted for Non-GAAP purposes. If those costs are removed, the provision for income taxes would have been $7.4 million and $12.1 million and the effective tax rate would have been 21.5% and 25.8% for the three months ended June 30, 2026 and 2025, respectively.

Previous wording

Digital Customer Experience was primarily driven by an increase from existing clients, mainly in Entertainment & Gaming, Mobility, Logistics & Travel, Healthcare and Technology, partially offset by a decrease in Financial Services and Retail & eCommerce. The remaining increase was primarily driven by new clients, mainly in Technology.

Current wording

Digital Customer Experience was primarily driven by an increase from existing clients, mainly in Mobility, Logistics & Travel, Technology, Entertainment & Gaming and Healthcare, partially offset by a decrease in Financial Services and Professional Services. The remaining increase was primarily driven by new clients, mainly in Technology, Mobility, Logistics & Travel and Healthcare.

Previous wording

AI Services was primarily driven by an increase from existing clients, mainly in Mobility, Logistics & Travel. The remaining increase was primarily driven by new clients, mainly in Mobility, Logistics & Travel and Technology.

Current wording

AI Services was primarily driven by an increase from existing clients, mainly in Mobility, Logistics & Travel, partially offset by a decrease in Social Media. The remaining increase was primarily driven by new clients, mainly in Mobility, Logistics & Travel and Technology.

Previous wording

United States: AI Services contributed 46.3% of the total increase primarily driven by clients in Mobility, Logistics & Travel. The increase was partially offset by an 18.9% decrease contributed by Digital Customer Experience, primarily driven by clients in Mobility, Logistics & Travel, Healthcare and Technology, and by a 3.3% decrease contributed by Trust & Safety primarily driven by clients in Social Media, partially offset by clients in Financial Services.

Current wording

United States: AI Services contributed 53.6% of the total increase primarily driven by clients in Mobility, Logistics & Travel. The increase was partially offset by an 15.0% decrease contributed by Digital Customer Experience, primarily driven by clients in Mobility, Logistics & Travel, Financial Services and Healthcare, and by a 4.0% decrease contributed by Trust & Safety primarily driven by clients in Social Media, partially offset by clients in Financial Services.

Previous wording

India: Digital Customer Experience contributed 28.7% of the total increase primarily driven by clients in Mobility, Logistics & Travel, Healthcare and Technology. These increases were partially offset by a 10.3% decrease contributed by Trust & Safety primarily driven by clients in Social Media, and by a 5.0% decrease contributed by AI Services primarily driven by clients in Mobility, Logistics & Travel.

Current wording

India: Digital Customer Experience contributed 22.4% of the total increase primarily driven by clients in Mobility, Logistics & Travel and Technology. These increases were partially offset by a 9.1% decrease contributed by Trust & Safety primarily driven by clients in Social Media and Technology, and by a 5.7% decrease contributed by AI Services primarily driven by clients in Mobility, Logistics & Travel.

Previous wording

Rest of World: Trust & Safety contributed 10.5% of the total increase primarily driven by clients in Social Media and Financial Services. AI Services contributed 3.6% of the total increase primarily driven by clients in Mobility, Logistics & Travel and Social Media. These increases were partially offset by a 1.1% decrease contributed by Digital Customer Experience primarily driven by clients in Mobility, Logistics & Travel and Financial Services, partially offset by clients in Entertainment & Gaming. Growth in the Rest of World was led by Latin America.

Current wording

Rest of World: Trust & Safety contributed 4.8% of the total increase primarily driven by clients in Social Media and Financial Services. AI Services contributed 4.3% of the total increase primarily driven by clients in Mobility, Logistics & Travel and Social Media. These increases were partially offset by a 1.0% decrease contributed by Digital Customer Experience primarily driven by clients in Financial Services, Mobility, Logistics & Travel and Professional Services, partially offset by clients in Entertainment & Gaming. Growth in the Rest of World was led by Latin America and Egypt.

Previous wording

The increase was primarily driven by transaction costs of $1.1 million and software costs associated with enhanced security measures. These increases were partially offset by lower personnel costs of $0.9 million, due to a $2.3 million reduction in stock-based compensation expense, partially offset by increased headcount, and a reduction of operational efficiency costs of $0.3 million.

Current wording

The decrease was primarily driven by lower transaction costs of $9.0 million and personnel costs of $5.5 million, due to a $6.8 million reduction in stock-based compensation expense, partially offset by increased software costs.

Previous wording

The table below sets forth the percentage of our total service revenue derived from our largest clients for the three months ended March 31, 2026 and 2025:

Current wording

The table below sets forth the percentage of our total service revenue derived from our largest clients for the three and six months ended June 30, 2026 and 2025:

Previous wording

(6) Represents tax impacts of adjustments to net income which resulted in a tax benefit during the period, including stock-based compensation expense, transaction costs, operational efficiency costs and severance. After these adjustments, we applied a non-GAAP effective tax rate of 24.8% and 25.7% for the three months ended March 31, 2026 and 2025, respectively, to non-GAAP income before income taxes.

Current wording

(6) Represents tax impacts of adjustments to net income which resulted in a tax benefit during the period, including stock-based compensation expense, transaction costs, operational efficiency costs and severance. After these adjustments, we applied a non-GAAP effective tax rate of 21.5% and 25.8% for the three months ended June 30, 2026 and 2025, respectively, to non-GAAP income before income taxes.

Previous wording

(1) Represents non-recurring professional fees related to the Refinancing and Special Dividend.

Current wording

(1) Represents non-recurring professional fees related to the Refinancing and Special Dividend in 2026 and take-private transaction in 2025.

Previous wording

The following table reconciles GAAP diluted EPS, the most directly comparable GAAP measure, to Adjusted EPS for the three months ended March 31, 2026 and 2025:

Current wording

The following table reconciles GAAP diluted EPS, the most directly comparable GAAP measure, to Adjusted EPS for the three and six months ended June 30, 2026 and 2025:

Previous wording

(1) Represents non-recurring professional fees related to the Refinancing and Special Dividend.

Current wording

(1) Represents non-recurring professional fees related to the Refinancing and Special Dividend in 2026 and take-private transaction in 2025.

Previous wording

The following table reconciles net cash provided by operating activities, the most directly comparable GAAP measure, to Free Cash Flow for the three months ended March 31, 2026 and 2025:

Current wording

The following table reconciles net cash provided by operating activities, the most directly comparable GAAP measure, to Free Cash Flow for the six months ended June 30, 2026 and 2025:

Previous wording

As of March 31, 2026, our principal sources of liquidity were cash and cash equivalents totaling $152.3 million, which were held for working capital purposes, as well as the borrowing availability under the 2026 Revolving Credit Facility of $100.0 million.

Current wording

As of June 30, 2026, our principal sources of liquidity were cash and cash equivalents totaling $180.3 million, which were held for working capital purposes, as well as the borrowing availability under the 2026 Revolving Credit Facility of $100.0 million.

Previous wording

As of March 31, 2026, our total indebtedness, net of debt financing fees was $491.6 million. The interest rate in effect for the 2026 Term Loan Facility as of March 31, 2026 was 6.412% per annum. We were in compliance with all covenants under the 2026 Credit Agreement as of March 31, 2026. See Note 7, "Long-Term Debt" in the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report for additional information regarding our debt.

Current wording

As of June 30, 2026, our total indebtedness, net of debt financing fees was $492.0 million. The interest rate in effect for the 2026 Term Loan Facility as of June 30, 2026 was 6.482% per annum. We were in compliance with all covenants under the 2026 Credit Agreement as of June 30, 2026. See Note 7, "Long-Term Debt" in the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report for additional information regarding our debt.

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2026 was $46.3 million compared to net cash provided by operating activities of $36.3 million for the three months ended March 31, 2025. Net cash provided by operating activities for the three months ended March 31, 2026 reflects net income of $24.3 million and the add back for non-cash charges totaling $23.1 million, partially offset by changes in operating assets and liabilities of $1.1 million. Non-cash charges primarily consisted of $11.1 million of depreciation, $6.6 million in stock-based compensation expense and $5.0 million of amortization related to intangibles. Net cash provided by operating activities for the three months ended March 31, 2025 reflects net income of $21.1 million and the add back for non-cash charges totaling $24.2 million, partially offset by changes in operating assets and liabilities of $9.1 million. Non-cash charges primarily consisted of $10.0 million of depreciation, $8.7 million in stock-based compensation expense and $5.0 million of amortization related to intangibles.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2026 was $89.4 million compared to net cash provided by operating activities of $53.3 million for the six months ended June 30, 2025. Net cash provided by operating activities for the six months ended June 30, 2026 reflects net income of $46.3 million and the add back for non-cash charges totaling $46.4 million, partially offset by changes in operating assets and liabilities of $3.2 million. Non-cash charges primarily consisted of $22.6 million of depreciation, $10.3 million in stock-based compensation expense and $10.0 million of amortization related to intangibles. Net cash provided by operating activities for the six months ended June 30, 2025 reflects net income of $41.2 million and the add back for non-cash charges totaling $44.4 million, partially offset by changes in operating assets and liabilities of $32.3 million. Non-cash charges primarily consisted of $19.9 million of depreciation, $17.1 million in stock-based compensation expense and $10.0 million of amortization related to intangibles.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2026 was $10.2 million compared to net cash used in investing activities of $14.5 million for the three months ended March 31, 2025. Purchase of property and equipment decreased primarily due to lower site build-out costs and a reduction in technology hardware purchases.

Current wording

Net cash used in investing activities for the six months ended June 30, 2026 was $20.7 million compared to net cash used in investing activities of $31.5 million for the six months ended June 30, 2025. Purchase of property and equipment decreased primarily due to lower site build-out costs, partially offset by an increase in technology hardware purchases.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2026 was $88.8 million compared to net cash used by financing activities of $18.0 million for the three months ended March 31, 2025. The increase was due primarily to the $332.8 million distribution of dividends and $242.0 million in payments on long-term debt, as well as $9.0 million in payments for debt financing fees. These uses of cash were partially offset by $500.0 million in proceeds from long-term debt. During the three months ended March 31, 2026, there were no repurchases of common stock, compared to $9.7 million in stock repurchases during the three months ended March 31, 2025.

Current wording

Net cash used in financing activities for the six months ended June 30, 2026 was $89.5 million compared to net cash used by financing activities of $33.5 million for the six months ended June 30, 2025. The increase was due primarily to the $332.8 million distribution of dividends and payments on long-term debt and debt financing fees, partially offset by $500.0 million in proceeds from long-term debt and lower payments for stock repurchases.