TaskUs, Inc.

1. Description of Business and Organization

TaskUs, Inc. ("TaskUs," together with its subsidiaries, the "Company," "we," "us" or "our") was formed by investment funds affiliated with Blackstone Inc. (“Blackstone”) as a vehicle for the acquisition of TaskUs Holdings, Inc. ("TaskUs Holdings") on October 1, 2018 (the "Blackstone Acquisition"). Prior to the Blackstone Acquisition, TaskUs. had no operations and TaskUs Holdings operated as a standalone entity. TaskUs was incorporated in Delaware in July 2018, and is headquartered in New Braunfels, Texas.

The Company delivers outsourced digital services that power the companies shaping the future. By combining specialized human talent and intelligent technology, the Company solves complex operational challenges for global category leaders within Artificial Intelligence (“AI”), autonomous vehicles, robotics, social media, financial services, healthcare, and beyond. The Company enables its clients to elevate their customer experience, protect their platforms, and grow their brands. The Company’s global, omnichannel delivery model is focused on providing its clients three key services – Digital Customer Experience, Trust & Safety and AI Services. The Company has designed its platform to enable it to rapidly scale and benefit from its clients’ growth. Through its agile and responsive operational model, the Company delivers services from multiple delivery sites that span globally from the United States, Philippines, India and other parts of the world.

The Company’s major service offerings are described in more detail below:

•Digital Customer Experience: Principally consists of omnichannel customer care services, primarily delivered through digital (non-voice) channels. Also included in this offering are learning experience and sales and customer acquisition services.

•Trust & Safety: Principally consists of monitoring, reviewing and managing user and advertiser-generated content on online platforms to ensure it complies with community guidelines, legal regulations and platform specific policies. Also included in this offering are our services for risk management, compliance, identity management and fraud.

•AI Services: Principally consists of large language model support and high-quality data labeling services, annotation, context relevance and transcription services performed for the purpose of training and tuning machine learning algorithms, enabling them to develop cutting-edge AI systems. Also included in this offering are our remote operations and field services for developers of autonomous vehicles and robotics.

2. Summary of Significant Accounting Policies

(a)Basis of Presentation

The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). Our Annual Report on Form 10-K for the year ended December 31, 2025 (the "Annual Report"), as filed with the Securities and Exchange Commission (the "SEC"), includes a discussion of the significant accounting policies used in the preparation of our consolidated financial statements. There have been no changes to the Company’s significant accounting policies described in the Annual Report that have had a material impact on the Company’s condensed consolidated financial statements and related notes.

These unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with US GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2025 included in the Annual Report. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2026 and its statements of income, comprehensive income and shareholders’ equity for the three and nine months ended September 30, 2026 and 2025, and cash flows for the nine months ended September 30, 2026 and 2025. The condensed consolidated balance sheet as of December 31, 2025, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.

(b)Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the determination of useful lives and impairment of fixed assets; allowances for credit losses; the valuation of deferred tax assets; the measurement of lease liabilities and right-of-use assets; valuation of forward contracts; valuation of stock-based compensation; valuation of acquired intangible assets and goodwill, as well as related impairment assessments; determination of useful lives of intangible assets; and reserves for income tax uncertainties and other contingencies.

(c)Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company has no variable interest entities in its corporate structure.

(d)Concentration Risk

Most of the Company’s clients are located in the United States. Clients outside of the United States are concentrated in Europe.

The following table presents the service revenue percentage and accounts receivable percentage for clients that represented greater than 10% of the Company’s service revenue:

The Company’s principal operations, including the majority of its employees and the fixed assets owned by its wholly owned subsidiaries, are located in the Philippines and India.

(e)Dividends

On February 25, 2026, the Board of Directors declared a special cash dividend of $3.65 per share of outstanding Class A and Class B common stock (the “Special Dividend”). On March 25, 2026, the Company paid, in aggregate, $131.9 million and $200.9 million to shareholders of outstanding Class A and Class B common stock, respectively. The Company records dividends to shareholders that are not a legal return of capital under Delaware General Corporation Law as a reduction of retained earnings or an increase in accumulated deficit.

(f)Recent Accounting Pronouncements

The Company currently qualifies as an "emerging growth company" under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Accordingly, the Company is provided the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. The Company has elected to adopt new or revised accounting guidance within the same time period as private companies. The Company will lose its status as an emerging growth company on December 31, 2026, the last day of the fiscal year following the fifth anniversary of its initial public offering. As a result, the Company will no longer be entitled to take advantage of specified reduced reporting requirements after that date.

Recently adopted accounting pronouncements

In January 2026, the Company adopted ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this Update simplify the measurement of credit losses by providing a practical expedient which permits an entity, when estimating expected credit losses for current accounts receivable and contract assets, to make an election to assume that current conditions as of the balance sheet date will remain unchanged for the asset's remaining life. The Company elected to apply this expedient. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements.

Recently issued accounting pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This standard improves the transparency of rate reconciliation and income taxes paid disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. The standard also improves the effectiveness and comparability of disclosures by (1) adding disclosures of pretax income (loss) and income tax expense (benefit) and (2) removing disclosures that no longer are considered cost beneficial or relevant. This ASU will be effective for the Company for fiscal years beginning after December 15, 2025. Early adoption is permitted. This ASU will be applied prospectively, with retrospective application permitted. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expense. The amendments in this Update require (1) disclosure of employee compensation, depreciation and intangible asset amortization included in each expense caption presented on the face of the income statement within continuing operations (“relevant expense captions”); (2) certain amounts that are already required to be disclosed under current GAAP to be included in the same disclosure as the other disaggregation requirements; (3) a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; and (4) disclosure of the total amount of selling expenses and, in annual reporting periods, the Company’s definition of selling expenses. This ASU will be effective for the Company for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. This ASU should be applied either prospectively or retrospectively. The Company is currently evaluating the impact of this ASU.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This standard modernizes the accounting for internal-use software by (1) removing the previous stage-based development model, (2) requiring capitalization to begin when management commits to funding and it is probable the project will be completed, and (3) clarifying that the probability threshold is not met if significant development uncertainty exists. The amendments also supersede the separate guidance for website development costs, incorporating those requirements into the internal-use software subtopic. This ASU will be effective for the Company for fiscal years beginning after December 15, 2027, and interim periods within those years. Early adoption is permitted. This ASU may be applied on either a prospective or retrospective basis. The Company is currently evaluating the impact of this ASU.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. This standard establishes authoritative guidance for the recognition, measurement, and presentation of government grants received by business entities. The amendments require that a government grant not be recognized until (1) it is probable that the entity will comply with the conditions attached to the grant and (2) the grant will be received. The amendment also requires that a grant related to an asset be recognized on the balance sheet as a business entity incurs the related costs for which the grant is intended to compensate, either as deferred income or an adjustment to the carrying amount of the asset. This ASU will be effective for the Company for fiscal years beginning after December 15, 2028, and interim periods within those years, consistent with the timeline for public business entities since the Company will lose emerging growth company status. Early adoption is permitted. This ASU will be applied using either a modified prospective, modified retrospective, or retrospective approach. The Company is currently evaluating the impact of this ASU.

In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818). This standard establishes a comprehensive accounting framework for the recognition, measurement, presentation, and disclosure of environmental credits and related obligations. Environmental credits shall be recognized as assets when it is probable they will be used to satisfy a compliance obligation, transferred in an exchange transaction, or distributed in a nonreciprocal transfer. Costs to obtain all other environmental credits shall be recognized as an expense when incurred. At each reporting date, compliance environmental credits that are probable of being used to settle an environmental credit obligation should be measured at cost, while noncompliance environmental credits should be measured at cost, less impairment losses. Environmental credit obligation liabilities must be recognized when events result in an environmental credit obligation, with measurement based on the cost or fair value of credits expected to be used to settle such obligations. Compliance environmental credits should be presented separately from environmental credit obligations on the balance sheet. This ASU will be effective for the Company for fiscal years beginning after December 15, 2027, and interim periods within those years, consistent with the timeline for public business entities since the Company will lose emerging growth status. Early adoption is permitted. This ASU will be applied on a retrospective basis through a cumulative-effect adjustment. The Company is currently evaluating the impact of this ASU.

3. Revenue from Contracts with Customers

Disaggregation of Revenue

The Company's revenues are derived from contracts with customers related to business outsourcing services that it provides. The following table presents the breakdown of the Company’s revenues by service offering:

The majority of the Company’s revenues are derived from contracts with customers who are located in the United States. However, the Company delivers its services from geographies outside of the United States. The following table presents the breakdown of the Company’s revenues by geographical location, based on where the services are provided from:

Contract Balances

Accounts receivable, net of allowance for credit losses includes $115.5 million and $122.4 million of unbilled revenue as of September 30, 2026 and December 31, 2025, respectively.

4. Forward Contracts

The Company transacts business in various foreign currencies and has international sales and expenses denominated in foreign currencies, subjecting the Company to foreign currency exchange rate risk. During 2026 and 2025, the Company entered into foreign currency exchange rate forward contracts, withsix commercial banks as the counterparties, with maturities of generally 12 months or less, to reduce the volatility of cash flows, primarily related to forecasted costs denominated in Philippine pesos, Indian rupees, Mexican pesos, Colombian pesos and euros. In addition, the Company utilizes foreign currency exchange rate contracts to mitigate foreign currency exchange rate risk associated with foreign currency-denominated assets and liabilities, primarily intercompany balances. The Company does not use foreign currency exchange rate contracts for trading purposes.

Cash Flow Hedges

The following table presents the Company's realized losses (gains) associated with our cash flow hedges reclassified from accumulated other comprehensive loss ("AOCL") to earnings:

The following table presents the Company's settled forward contracts designated as cash flow hedges:

The following table presents the Company's outstanding forward contracts designated as cash flow hedges:

All cash flow hedges were determined to be highly effective, with no component of any gain or loss excluded from the assessment of hedge effectiveness, for the periods presented. Net unrealized losses on cash flow hedges for the three and nine months ended September 30, 2026 were $0.2 million and $0.6 million, respectively. As of September 30, 2026, the net accumulated loss on foreign currency cash flow hedges expected to be reclassified from AOCL into earnings within the next 12 months was $1.5 million. See Note 13, “Accumulated Other Comprehensive Loss” foradditional information regarding changes in accumulated other comprehensive loss.

Fair Value Measurements

The Company’s derivatives are carried at fair value using various pricing models that incorporate observable market inputs, such as interest rate yield curves and currency rates, which are Level 2 inputs. By entering into derivative contracts, the Company is exposed to counterparty credit risk, or the failure of the counterparty to perform under the terms of the derivative contract. Derivative valuations incorporate credit risk adjustments that are necessary to reflect the probability of default by the counterparty or by the Company. For the periods presented, the non-performance risk of the Company and the counterparties did not have a material impact on the fair value of the derivative instruments.

For financial statement presentation purposes, the Company does not offset assets and liabilities under master netting arrangements. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2026 and December 31, 2025 and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value:

5. Property and Equipment, net

The components of property and equipment, net as of September 30, 2026 and December 31, 2025, were as follows:

The table below presents the Company’s total property and equipment by geographic location as of September 30, 2026 and December 31, 2025:

6. Goodwill and Intangibles

The changes in the carrying amount of goodwill during the period were as follows:

Intangible assets consisted of the following as of September 30, 2026 and December 31, 2025:

7. Long-Term Debt

The balances of current and noncurrent portions of debt consisted of the following as of September 30, 2026 and December 31, 2025:

2026 Credit Agreement

On March 11, 2026, the Company entered into a credit agreement (the “2026 Credit Agreement”) with both new and existing lenders which amended and restated the 2022 Credit Agreement (described below). The 2026 Credit Agreement includes a $500.0 million term loan (the “2026 Term Loan Facility”) and a $100.0 million revolving credit facility (the “2026 Revolving Credit Facility” and, together with the 2026 Term Loan Facility, the “2026 Credit Facilities”). The proceeds of the 2026 Term Loan Facility, and cash on the Company's balance sheet, were used to repay all borrowings under the 2022 Credit facilities, pay related fees and expenses and fund a $332.8 million special cash dividend (the “Refinancing”). The Refinancing was accounted for as a debt modification for existing lenders, new debt for new lenders and an extinguishment for exiting lenders. Debt financing fees associated with the Refinancing, including amounts allocated from the 2022 Credit facilities, were $8.6 million associated with the 2026 Term Loan Facility and $2.0 million associated with the undrawn 2026 Revolving Credit Facility. The Refinancing resulted in $0.7 million of third-party costs, recorded in selling, general and administrative expense, and $0.2 million of loss on extinguishment, recorded in financing expenses, on the condensed consolidated statements of income for the nine months ended September 30, 2026.

The 2026 Term Loan Facility matures on March 11, 2031, and commencing with the fiscal quarter ending September 30, 2026, requires quarterly principal payments of 1.25% of the original principal amount of the term loans through March 31, 2029,1.875% of the original principal amount of the term loans from June 30, 2029 through March 31, 2030 and 2.50% of the original principal amount of the term loans thereafter, with the remaining principal due in a lump sum at the maturity date. Voluntary principal prepayments are permitted.

The 2026 Revolving Credit Facility provides the Company with access to a $15.0 million letter of credit facility and a $15.0 million swing line facility, each of which, to the extent used, reduces borrowing availability under the 2026 Revolving Credit Facility. The 2026 Revolving Credit Facility terminates on March 11, 2031. As of September 30, 2026, we hadno balance outstanding and $100.0 million of borrowing available under the 2026 Revolving Credit Facility.

Borrowings under the 2026 Credit Agreement, with the exception of swing line borrowings, bear interest, at our option, either at (i) an adjusted Term Secured Overnight Financing Rate (“Term SOFR”) plus a margin of 2.75% per annum, subject to a Term SOFR floor of 0.00% or (ii) an alternate base rate plus a margin of 1.75% per annum, subject to an alternative base rate floor of 1.00%. Any borrowings under the swing line facility will be subject to the base rate. The 2026 Revolving Credit Facility also requires a commitment fee of 0.40% per annum of undrawn commitments to be paid quarterly in arrears. The Company has elected to pay interest on borrowings under the 2026 Term Loan Facility based on Term SOFR. The interest rate in effect for the 2026 Term Loan Facility as of September 30, 2026 was 6.825% per annum. Due to its variable interest rates based on Term SOFR, the carrying amount of the debt under the 2026 Credit Agreement approximates fair value based on Level 2 inputs.

The 2026 Credit Agreement contains a financial covenant requiring compliance with a maximum consolidated total net leverage ratio and certain other covenants, including, among other things, covenants restricting the incurrence of indebtedness, the incurrence of liens, investments (including acquisitions), dispositions, prepayments of payment, subordinated indebtedness and distributions. The Company was in compliance with all debt covenants as of September 30, 2026. Substantially all assets of the Company's direct wholly owned subsidiary TU MidCo, Inc., its wholly owned subsidiary TU BidCo, Inc. and its material wholly owned domestic subsidiaries are pledged as collateral under the 2026 Credit Agreement, subject to certain customary exceptions.

2022 Credit Agreement

Prior to the Refinancing, the Company’s 2022 Credit Agreement consisted of an original term loan facility of $270.0 million and a $190.0 million revolving credit facility. Upon execution of the 2026 Credit Agreement, all outstanding balances under the 2022 Credit Agreement were repaid in full and all commitments thereunder were terminated in full.

8. Leases

The following table presents operating lease costs recorded to cost of services:

Operating lease costs recorded to selling, general and administrative expenses were immaterial.

The following table presents the weighted average remaining lease term and weighted average discount rate for the Company's operating leases as of September 30, 2026 and December 31, 2025:

The following table presents supplemental cash flow information related to the Company's operating leases:

The future lease payments on the Company's operating lease liabilities as of September 30, 2026 were as follows:

9. Commitments and Contingencies

Legal Proceedings

The Company is subject to various legal proceedings, claims, and litigation arising in the ordinary course of business. Although the outcomes of such matters cannot be predicted with certainty, the Company believes that resolution of all such pending matters will not, either individually or in the aggregate, have a material adverse effect on its business, operating results, cash flows, or financial condition. However, given the inherent unpredictability of litigations, arbitrations, claims, inquiries, investigations and proceedings, it is possible that an adverse outcome in certain matters could have a material adverse effect on our business, operating results, cash flows, or financial condition in any future period. In addition, there can be no assurance that material losses will not be incurred from claims where potential losses have not yet been determined to be probable or possible and reasonably estimable.

On January 15, 2025, putative TaskUs stockholder James Eaton filed a derivative lawsuit in the Court of Chancery of the State of Delaware, captioned Eaton v. Maddock, et al. (C.A. No. 2025-0043-NAC), purportedly on behalf of the Company against certain current and former members of its Board of Directors and officers. Eaton previously delivered a demand pursuant to 8 Del. C. §220 on TaskUs on July 3, 2024, which the Company responded to on September 16, 2024. The Eaton complaint asserts a claim for breach of fiduciary duty and alleges that TaskUs’s public filings included misstatements regarding its low employee attrition rate and high Glassdoor rating in the lead-up periods to the Company’s IPO and secondary public offering in October 2021 (“SPO”). The complaint alleges that because of TaskUs’s breach, the Company has suffered damages in the form of: (1) legal fees associated with litigation; (2) loss of reputation and goodwill; (3) costs associated with investigations into the misstatement allegations; (4) money used to facilitate the IPO and SPO; (5) insider profits derived from the IPO and SPO; and (6) loss of Company revenue and profits. On June 5, 2025, the parties moved to stay the action, which the Court granted on June 6, 2025. The Company is unable to predict, with a reasonable degree of certainty, the likely outcome of this litigation.

On March 6, 2025, putative TaskUs stockholder Kalvin Tucker filed a derivative lawsuit in the United States District Court for the Southern District of New York, captioned Tucker v. Dixit, et al. (No. 25-cv-01875), purportedly on behalf of the Company against certain current and former members of its Board of Directors and officers. The Tucker complaint includes allegations that are substantially similar to those in the Eaton case and asserts claims for contribution, breach of fiduciary duty, aiding and abetting breaches of fiduciary duty, unjust enrichment, and waste. On June 10, 2025, the parties moved to stay the action, which the Court granted on June 11, 2025. The Company is unable to predict, with a reasonable degree of certainty, the likely outcome of this litigation.

On May 27, 2025, a purported class action captioned Nelson Estrada, individually and on behalf of all others similarly situated v. TaskUs, Inc., was filed in the United States District Court for the Southern District of New York against the Company. An amended complaint was filed on September 16, 2025 that added additional plaintiffs Allen Joo, Tiba Parsa, Tim Reynolds, and Craig Burson. The amended complaint alleges that plaintiffs’ data was implicated in a Coinbase data breach announced on May 14, 2025, that the breach involved TaskUs employees providing overseas support services to Coinbase who improperly accessed information related to his account, and that a subset of the plaintiffs had cryptocurrency assets stolen in ways that they allege was related to the breach. The amended complaint asserts claims for negligence, negligent hiring/supervision, conversion, fraud, breach of implied contract, unjust enrichment, declaratory and injunctive relief, violation of the unfair and deceptive trade law statutes of various states, and violation of the California Consumer Privacy Act. Plaintiff seeks to certify a class of all persons in the United States whose personally identifiable information was compromised in the Coinbase data breach, as well as a similarly defined California sub-class, and a sub-class of individuals whose cryptocurrency assets were stolen by those who received personally identifiable information as a result of the breach. Plaintiffs request damages, pre- and post-judgment interest, attorneys’ fees, and any other relief allowable under law. On October 30, 2025, the Company filed a motion to dismiss the amended complaint. On July 28, 2026, the Court granted in part and denied in part the Company’s motion to dismiss. The Company is unable to predict, with a reasonable degree of certainty, the likely outcome of this litigation.

On September 16, 2022, a lawsuit captioned My Choice Software, LLC vs. TaskUs, Inc., Tassilo Heinrich, Shopify, Inc., Shopify Holdings (USA) Inc., Shopify (USA) Inc., Does 1-50, No. 22-cv-1710 was filed in the United States District Court, Central District of California. The complaint alleges the defendants profited off of the plaintiff's information. The complaint seeks unspecified damages and an award of costs and expenses, including reasonable attorneys’ fees, as well as equitable and injunctive relief. On February 13, 2023, the Company filed a motion to dismiss the amended complaint. In May 2023, the Court issued an Order dismissing certain parties, staying the case as to the Company and denying as moot the Company's previously filed motion to dismiss. This case is currently stayed. The Company is unable to predict, with a reasonable degree of certainty, the likely outcome of this litigation.

On July 7, 2026, a lawsuit captioned Tommy Gardner vs. Ledger SAS, Ledger Technologies, Inc., Shopify, Inc., TaskUs, Inc., TaskUs USA, LLC, TaskUs Holdings, Inc., No. 2026-45412, was filed in the District Court for Harris County, Texas. The complaint alleges the named defendants failed to exercise reasonable care in securing and safeguarding consumer information in connection with a data breach impacting Ledger SAS cryptocurrency hardware wallets, resulting in the unauthorized public release and subsequent misuse of personally identifiable information. The plaintiff seeks equitable and monetary relief and alleges damages in excess of $3,000,000. The Company was served on or about July 16, 2026. In September 2026, the Company filed a motion seeking a stay of the responsive pleading deadline until such time as all defendants are served. That motion is currently pending. The Company is unable to predict, with a reasonable degree of certainty, the likely outcome of this litigation.

Indemnification

In addition, in the ordinary course of business, the Company enters into agreements of varying scope and terms pursuant to which we agree to indemnify clients, vendors and other business partners with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, cybersecurity breach, services to be provided by us or from intellectual property infringement claims made by third parties. Historically, we have not experienced significant losses on these types of indemnification obligations; however, the Company may incur significant losses related to such indemnification obligations in the future.

10. Stock-Based Compensation

As required by the 2019 TaskUs, Inc. Stock Incentive Plan and TaskUs, Inc. 2021 Omnibus Incentive Plan (collectively, the "Incentive Plans"), the Company made proportionate adjustments to the terms of outstanding awards in conjunction with the special cash dividend of $3.65 per share (the "Equity Adjustment"). The Company determined that the Equity Adjustment was a modification of the outstanding awards in conjunction with an equity restructuring, in accordance with Accounting Standards Codification Topic 718, Compensation - Stock Compensation. The awards were adjusted as follows:

•Each vested, in-the-money stock option will receive a payment of $3.65, resulting 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 nine months ended September 30, 2026.

•Each unvested restricted stock unit ("RSU") and performance stock unit ("PSU") will receive a payment of $3.65 upon vesting, which did not result in a change in fair value of the awards. The Equity Adjustment resulted in a reclassification of $6.7 million from additional paid-in capital to accrued payroll and employee-related liabilities for the portion of the cash payment earned at the time of the Equity Adjustment for prior service. The unearned portion of the cash payment will be recognized as future service is provided.

•The exercise price for each out-of-the-money stock option was reduced so the intrinsic value did not change. The Equity Adjustment did not result in a change in fair value of the awards.

The following table summarizes the stock option, RSU and PSU activity for thenine months ended September 30, 2026:

(1) Outstanding at September 30, 2026 includes the exercise price reduction for out-of-the-money stock options.

(2) Includes the liability-classified portion of the award as the fair value did not change.

(3) Excludes award tranches for which there is no grant date or grant date fair value.

The PSUs granted during the nine months ended September 30, 2026 vest contingently over three years subject to continued service and the achievement of certain Revenue and Adjusted EBITDA targets (performance conditions). The performance targets for the second and third tranches of these awards shall be determined by the Compensation Committee of the Board of Directors during the first fiscal quarter of each year. As a result, there is no grant date or grant date fair value for these tranches since there is not a mutual understanding between the grantor and grantee of the key terms and conditions.

The following table summarizes the components of stock-based compensation expense recognized for the periods presented:

As of September 30, 2026, there was $18.7 million and $0.5 million of unrecognized compensation expense related to the Company’s unvested RSUs and PSUs, respectively, that is expected to be recognized over a weighted-average period of 1.5 years and 0.5 years, respectively. Certain PSUs contain performance conditions, which may result in a different amount of expense recognized over the term of the awards.

11. Income Taxes

In determining its interim provision for income taxes, the Company used an estimated annual effective tax rate, which is based on expected income before taxes, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates. Certain significant or unusual items are separately recognized in the period in which they occur and can be a source of variability in the effective tax rate from quarter to quarter.

The Company recorded provision for income taxes of $6.2 million and $10.3 million in the three months ended September 30, 2026 and 2025, respectively. The effective tax rate was 19.1% and 24.8% for the three months ended September 30, 2026 and 2025, respectively.

The Company recorded provision for income taxes of $25.7 million and $26.0 million in the nine months ended September 30, 2026 and 2025, respectively. The effective tax rate was 26.1% and 26.3% for the nine months ended September 30, 2026 and 2025, respectively. The difference between the effective tax rate and the 21% federal statutory rate in the nine months ended September 30, 2026 was primarily due to an increase in uncertain tax positions and nondeductible compensation of officers, partially offset by Foreign-Derived Intangible Income ("FDII"). The difference between the effective tax rate and the 21% federal statutory rate in the nine months ended September 30, 2025 was primarily due to state taxes, Global Intangible Low-Taxed Income inclusion and nondeductible compensation of officers partially offset by FDII.

12. Earnings Per Share

The Company has Class A common stock and Class B common stock outstanding. Because the only difference between the two classes of common stock are related to voting, transfer and conversion rights, the Company has not presented earnings per share under the two-class method, as earnings per share are the same for both Class A common stock and Class B common stock.

As required by the Incentive Plans, the Company made proportionate adjustments to the terms of outstanding awards in conjunction with the special cash dividend of $3.65 per share. See Note 10, "Stock-Based Compensation" in the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report for additional information.

The following table summarizes the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2026 and 2025:

The Company excluded 3,035,848 and 3,785,739 potential common stock equivalents from the computation of diluted EPS for the three and nine months ended September 30, 2026, respectively, and 3,118,173 and 3,156,602 potential common stock equivalents from the computation of diluted EPS for the three and nine months ended September 30, 2025, respectively, because the effect would have been anti-dilutive. There were 862,362 and 511,753 potential common stock equivalents outstanding as of September 30, 2026 and 2025, respectively, with market or performance conditions which were not met at the relevant date, that were excluded from the calculation of diluted EPS.

13. Accumulated Other Comprehensive Loss

The following tables summarize the changes in accumulated balances of other comprehensive income (loss) for the three and nine months ended September 30, 2026:

The following tables summarize the changes in accumulated balances of other comprehensive income (loss) for the three and nine months ended September 30, 2025:

14. Segment Information

Our chief executive officer is our chief operating decision maker, who allocates resources to, and assesses the performance of, each operating segment using information based on factors including client demand and capacity and consolidated net income. Therefore, the Company has determined that it operates in a single operating and reportable segment.

The following table presents the significant expenses for the Company’s single segment:

(1) Represents salaries and wages and employee welfare costs, excluding stock-based compensation expense, of employees that can be directly attributed to the delivery of services.

(2) Represents operating costs related to sales and marketing and other administrative departments, including personnel costs (excluding stock-based compensation expense), professional fees, travel expenses, cloud-based capabilities, insurance premiums and other corporate expenses.

(3) Represents stock-based compensation expense for cost of services and selling, general and administrative expense, as well as associated payroll tax.

(4) Represents transaction costs during 2026 and transaction and operational efficiency costs during 2025.

(5) Represents other costs that can be directly attributed to delivery of services, including the costs for sites and technology, recruiting, professional development and employee engagement.

15. Related Party

Refinancing

In connection with the Refinancing, the Company entered into an agreement to pay Blackstone Securities Partners L.P., an affiliate of Blackstone, a fee of $1.0 million, as compensation for the provision of certain financial intermediary and advisory services, which was paid in full as of September 30, 2026. In addition to the fee, the Company agreed to certain indemnification undertakings in connection with these services.