What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-03-08 compared with 2023-03-06 · 177 added, 180 removed, 893 unchanged (29% of the section changed)

42 unchanged sentences

Cash and cash equivalents $ 125,776 $ 133,992

Accounts receivable, net of allowance for doubtful accounts of $ 3,422 and $ 1,819 , respectively

178,678 162,895

Other receivables

Prepaid expenses

Accounts receivable, net of allowance for credit losses of $ 1,978 and $ 3,422 , respectively

176,812 178,678

Income tax receivable

Other current assets

Prepaid expenses and other current assets 23,909 25,876

Total current assets

21 unchanged sentences

Deferred revenue

Deferred rent

Total current liabilities

5 unchanged sentences

Operating lease liabilities 31,475 32,380

Deferred rent

Accrued payroll and employee-related liabilities

10 unchanged sentences

Authorized 2,500,000,000 ;

29,257,651 issued and 27,607,720 outstanding and 27,431,264 shares issued and outstanding, respectively

30,522,570 issued and 18,725,947 outstanding and 29,257,651 issued and 27,607,720 outstanding, respectively

Class B convertible common stock, $ 0.01 par value.

6 unchanged sentences

Accumulated other comprehensive loss ( 9,551 ) ( 10,647 )

Treasury stock, at cost with 1,649,931 and no shares, respectively

Treasury stock, at cost with 11,796,623 and 1,649,931 shares, respectively

( 143,876 ) ( 30,967 )

Total shareholders’ equity

14 unchanged sentences

Loss on disposal of assets 1,322 31 52

Contingent consideration — — 3,570

Total operating expenses 829,327 876,592 814,985

Operating income (loss) 95,038 83,897 ( 54,282 )

Other expense (income) 7,443 177 ( 1,572 )

Other expense (income), net ( 1,711 ) 7,443 177

Financing expenses 21,717 11,921 6,504

28 unchanged sentences

— $ — 91,737,020 $ 917 $ 398,202 $ ( 67,398 ) $ 3,416 — $ — $ 335,137

Net income — — — — — 34,533 — — — 34,533

Other comprehensive income — — — — — — 3,104 — — 3,104

Balance as of December 31, 2020

— $ — 91,737,020 $ 917 $ 398,202 $ ( 67,398 ) $ 3,416 — $ — $ 335,137

Issuance of common stock in the initial public offering, net of offering costs 5,553,154 56 — — 116,636 — — — — 116,692

12 unchanged sentences

Shares issued in acquisition of heloo 200,103 2 — — 7,194 — — — — 7,196

Purchase of treasury stock — — — — — — — 1,649,931 ( 30,967 ) ( 30,967 )

Repurchase of common stock — — — — — — — 1,649,931 ( 30,967 ) ( 30,967 )

Stock-based compensation expense — — — — 68,979 — — — — 68,979

3 unchanged sentences

29,257,651 $ 293 70,032,694 $ 700 $ 631,908 $ ( 135,674 ) $ ( 10,647 ) 1,649,931 $ ( 30,967 ) $ 455,613

Issuance of common stock for settlement of equity awards 1,453,010 13 — — 618 — — — — 631

Shares withheld related to net share settlement ( 188,091 ) ( 1 ) — — ( 2,168 ) — — — — ( 2,169 )

Repurchase of common stock — — — — — — — 10,146,692 ( 112,909 ) ( 112,909 )

Stock-based compensation expense — — — — 52,759 — — — — 52,759

Net income — — — — — 45,690 — — — 45,690

Other comprehensive income — — — — — — 1,096 — — 1,096

Balance as of December 31, 2023

30,522,570 $ 305 70,032,694 $ 700 $ 683,117 $ ( 89,984 ) $ ( 9,551 ) 11,796,623 $ ( 143,876 ) $ 440,711

See accompanying notes to consolidated financial statements.

11 unchanged sentences

Loss on disposal of assets 1,322 31 52

Provision for losses on accounts receivable

Provision for credit losses

103 1,746 1,058

6 unchanged sentences

1,861 ( 15,052 ) ( 76,203 )

Other receivables, prepaid expenses, and other current assets

( 7,131 ) ( 8,611 ) ( 3,768 )

Prepaid expenses and other current assets ( 2,015 ) ( 7,131 ) ( 8,611 )

Operating lease right-of-use assets 14,314 12,726 —

21 unchanged sentences

Proceeds from borrowings, Revolving credit facility

32,500 — 39,878

Proceeds from long-term debt — 270,000 —

Payments for deferred business acquisition consideration ( 1,875 ) — —

Payments on long-term debt

5 unchanged sentences

Payments for taxes related to net share settlement ( 2,169 ) ( 4,145 ) ( 4,607 )

Payments for treasury stock purchases ( 30,967 ) — —

Payments for stock repurchases ( 111,959 ) ( 30,967 ) —

Distribution of dividends

17 unchanged sentences

$ — $ — $ 1,874

Loan receivable exchanged for software

$ 2,182 $ — $ —

See accompanying notes to consolidated financial statements.

1 unchanged sentence

Description of Business and Organization

(formerly known as TU TopCo, Inc.) (“TaskUs” and, together with its subsidiaries, the “Company,” “we,” “us” or “our”) was formed by investment funds affiliated with Blackstone 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.

(formerly known as TaskUs, Inc.) (“TaskUs Holdings”) on October 1, 2018 (the “Blackstone Acquisition”).

(“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.

1 unchanged sentence

The Company is a provider of outsourced digital services and next-generation customer experience to the world’s most innovative companies, helping its clients represent, protect and grow their brands.

The Company’s global, omni-channel delivery model is focused on providing its clients three key services - Digital Customer Experience, Trust and Safety (formerly known as Content Security) and Artificial Intelligence (“AI”) Services (formerly known as AI Operations).

The Company’s global, omni-channel delivery model is focused on providing its clients three key services - Digital Customer Experience, Trust and Safety and Artificial Intelligence (“AI”) Services.

The Company has designed its platform to enable it to rapidly scale and benefit from its clients’ growth.

14 unchanged sentences

(collectively, “heloo”) was completed on April 15, 2022.

therefore, the Company’s consolidated financial statements only include heloo’s results since April 15, 2022.

The acquisition was not material to the Company’s consolidated financial statements.

The accompanying financial statements and related notes to the financial statements give retroactive effect to the stock split for all periods presented.

1 unchanged sentence

The Company has made certain reclassifications to prior period consolidated financial statements to conform to current period presentation.

India, which was previously included in Rest of World, is now reported separately within revenue disaggregation by geographical location and property and equipment by geographic location .

Other receivables, Prepaid expenses and Other current assets have been combined into Prepaid expenses and other current assets.

(b) Use of Estimates

2 unchanged sentences

Significant items subject to such estimates and assumptions include the determination of useful lives and impairment of fixed assets;

allowances for doubtful accounts and other receivables;

allowances for credit losses;

the valuation of deferred tax assets;

6 unchanged sentences

All significant intercompany balances and transactions have been eliminated in consolidation.

The Company has no involvement with variable interest entities.

The Company has no variable interest entities in its corporate structure.

Operating segments are components of a company for which separate financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding on how to allocate resources and in assessing performance.

11 unchanged sentences

Less than 10%

Less than 10% 11 %

For the years ended December 31, 2023 and 2022, the following customers represented greater than 10% of the Company’s accounts receivable:

9 unchanged sentences

Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the consolidated statements of operations.

The Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), effective as of January 1, 2022, using the modified retrospective method and the effective date as the date of initial application.

The Company elected the “package of practical expedients,” which permits the Company not to reassess under Topic 842 any prior conclusions about lease identification, lease classification and initial direct costs.

The Company did not apply the short-term lease exception and will therefore recognize a right-of-use asset and lease liability for all leases.

At inception of a contract, the Company determines whether an arrangement is, or contains, a lease based on the substance of the arrangement.

5 unchanged sentences

ROU lease liabilities represent our obligation to make lease payments arising from the contractual terms of the lease.

ROU lease assets and lease liabilities are recognized at the commencement of the lease and

are calculated using the present value of lease payments over the lease term.

ROU lease assets and lease liabilities are recognized at the commencement of the lease and are calculated using the present value of lease payments over the lease term.

Typically, lease agreements do not provide sufficient detail to arrive at an implicit interest rate.

14 unchanged sentences

Translation adjustments are included in other comprehensive income (loss).

Realized and unrealized gains and losses arising from foreign currency transactions are recognized in other expense (income).

Realized and unrealized gains and losses arising from foreign currency transactions are recognized in other expense (income), net.

For the years ended December 31, 2023, 2022 and 2021, realized and unrealized foreign currency losses (gains) were $ 0.5 million, $( 0.8 ) million and $( 4.2 ) million, respectively.

2 unchanged sentences

(j) Accounts Receivable

Accounts receivable are recorded as revenue and are recognized in accordance with the Company’s revenue recognition policy and bear interest.

Most of our clients pay timely, which results in little to no interest.

The Com pany maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio.

Accounts receivable are recorded as revenue and are recognized in accordance with the Company’s revenue recognition policy.

The Com pany maintains an allowance for credit losses inherent in its accounts receivable portfolio.

In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and customers’ financial condition, the amount of receivables in dispute, and the current receivables aging and current payment patterns.

The Company reviews its allowance for doubtful accounts monthly.

The Company reviews its allowance for losses quarterly.

Past-due balances over 30 days and over a specified amount are reviewed individually for collectability.

8 unchanged sentences

ASC Topic 815, Derivatives and Hedging , establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and hedging activities.

It requires the recognition of all derivative instruments as assets or liabilities on the Company’s consolidated balance sheets and measurement of those instruments at fair value.

It requires the recognition of all derivative instruments as assets (prepaid expenses and other current assets) or liabilities (accrued payroll and employee-related liabilities) on the Company’s consolidated balance sheets and measurement of those instruments at fair value.

The accounting treatment of changes in fair value is dependent upon whether or not a derivative instrument is designated as a hedge and if so, the type of hedge.

1 unchanged sentence

The resulting cash flows are reported as cash from operating activities.

As of December 31, 2022 , the Company was a party to non-deliverable foreign currency forward contract arrangements with two commercial banks which were not designated as hedges.

As of December 31, 2023 , the Company was a party to non-deliverable foreign currency forward contract arrangements with three commercial banks which were not designated as hedges.

(m) Revenue Recognition

5 unchanged sentences

(iii) determine the transaction price;

(iv) allocate the transaction price

to the performance obligations in the contract;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when (or as) the entity satisfies its performance obligations.

9 unchanged sentences

Therefore, revenue is recognized over time as performance obligations are satisfied and we have a “right to invoice.” We do not allocate transaction price to unsatisfied performance obligations.

Certain of the Company’s contracts include clauses which guarantee that the services provided satisfy certain performance indicators.

These performance guarantees do not create a performance obligation.

The Company records a liability at the time payment under such clauses is both probable and reasonably estimable.

Payments under performance guarantees were immaterial for the years ended December 31, 2022, 2021 and 2020.

Differences in timing between the delivery of services, billings, and receipt of payment from customers can result in the recognition of certain contract assets and contract liabilities.

Revenue recognized in excess of billings is recorded as accrued revenue, and is reported under accounts receivable, net of allowance for doubtful accounts on the consolidated balance sheet.

Revenue recognized in excess of billings is recorded as accrued revenue, and is reported under accounts receivable, net of allowance for credit losses on the consolidated balance sheets.

Billings in excess of revenue recognized is recorded as deferred revenue until revenue recognition criteria are met.

Client prepayments (even if nonrefundable) are recorded as deferred revenue on the consolidated balance sheet and recognized over future periods as services are delivered or performed.

Client prepayments (even if nonrefundable) are recorded as deferred revenue on the consolidated balance sheets and recognized over future periods as services are delivered or performed.

ASC 340-40, Other Assets and Deferred Costs—Contracts with customers (“ASC 340”), provides guidance for incremental costs of obtaining a contract with a customer or costs incurred in fulfilling a contract with a customer.

2 unchanged sentences

These commissions are deferred and then amortized on a straight-line basis over the contract period, which is typically one year.

Amortization expense is included in selling, general and administrative expense on the consolidated statements of income.

Amortization expense is included in selling, general and administrative expense on the consolidated statements of operations.

The Company determines the period of benefit by taking into consideration its customer contracts, its technology, and other factors.

1 unchanged sentence

(n) Advertising Expense

Advertising costs are expensed as incurred and are included in selling, general, and administrative expense in the accompanying consolidated statements of operations.

Advertising costs are expensed as incurred and are included in selling, general, and administrative expense in the consolidated statements of operations.

Advertising expense for the years ended December 31, 2023, 2022 and 2021 was $ 1.6 million , $ 2.0 million and $ 1.9 million, respectively.

10 unchanged sentences

Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in profit or loss in the period the item is derecognized.

During the year ended December 31, 2020, management conducted a review of the Company’s assets due to the shift in its operating model in response to the COVID-19 pandemic.

As a result of this review, the Company extended the useful lives

of leasehold improvements from three years to the shorter of five years or lease term, considering the Company’s future use of the underlying real estate to which the leasehold improvements relate.

The impact of this change in estimate for the year ended December 31, 2020 was a net increase of $ 2.5 million and $ 1.9 million in operating income and net income, respectively, and a net increase of $ 0.02 per share in earnings per share on a basic and diluted basis.

Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

21 unchanged sentences

We have determined that we have a single reporting unit.

Historically, the fair value of our reporting unit was estimated using a combination of the income approach, using a discounted cash flow methodology, and a market approach;

the determination of discounted cash flows was based on the Company’s strategic plans and market conditions.

Upon completion of the IPO, a public trading market for our common stock was established and, as a result, we consider our market capitalization (calculated as total common shares outstanding multiplied by the common equity price per share, as adjusted for a control premium factor, as necessary) to represent fair value.

We consider our market capitalization (calculated as total common shares outstanding multiplied by the common equity price per share), as adjusted for a control premium factor, as necessary, to represent fair value.

If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired.

2 unchanged sentences

A s a result of the quantitative assessment, we determined that the carrying value of the reporting unit did not exceed its fair value.

(r) Other Assets

Other current assets and other noncurrent assets consist primarily of refundable security deposits, goods and services taxes, implementation costs capitalized for hosting arrangements, deferred financing costs on the undrawn revolver loan and loan receivable.

(r) Prepaid Expenses and Other Assets

Prepaid expenses and other current assets consists primarily of VAT and goods and services taxes, derivative assets, prepayments for software and insurance, refundable security deposits and implementation costs capitalized for hosting arrangements.

Other noncurrent assets consists primarily of refundable security deposits, implementation costs capitalized for hosting arrangements, deferred financing costs on the undrawn revolver loan and loan receivable.

(s) Share Repurchases

The Company records its repurchases of Class A common stock at cost, including direct and incremental costs, as treasury stock within shareholders' equity on the consolidated balance sheet.

The Company records its repurchases of Class A common stock at cost, including direct and incremental costs, as treasury stock within shareholders' equity on the consolidated balance sheets.

(t) Share-based Compensation

2 unchanged sentences

For liability awards, total compensation cost is based on the fair value of the award on the date the award is granted and is remeasured at each reporting date until settlement.

Awards to employees contain service, performance and market conditions that affect vesting.

Awards to employees may contain service, performance and market conditions, or a combination thereof, that affect vesting.

The Company recognizes expense over the requisite service period using a graded vesting model.

3 unchanged sentences

(u) Employee Benefits

Retirement benefit reserves represent the cumulative amount of remeasurement of the defined benefit liability arising from actuarial gains and losses due to experience and demographic assumptions.

The Company also sponsors a 401(k) retirement plan in the U.S.

whereby contributions made by eligible employees to the 401(k) are matched by the Company up to 4.0 % of compensation.

Employer 401(k) expense is the amount of matching contributions and is recognized in expense.

Defined benefit plans

The Company has certain defined benefit plans that provide eligible employees with retirement income based primarily o n years of service and compensation during specific periods.

Expense recognized for the years ended December 31, 2023, 2022 and 2021 was $ 1.7 million, $ 1.3 million and $ 0.7 million, respectively.

The net obligations under our benefit plans as of December 31, 2023 and 2022 were $ 4.0 million and $ 3.1 million, respectively.

The retirement benefit reserve, which represents the cumulative amount of remeasurement of the defined benefit liability arising from actuarial gains and losses due to experience and demographic assumptions, is included in accumulated other comprehensive loss.

Amounts reclassified into income were immaterial for the years ended December 31, 2023, 2022 and 2021.

Defined contribution plans

The Company has certain defined contribution plans, including a 401(k) retirement plan in the U.S., whereby contributions made by eligible employees may be matched by the Company with certain limitations.

Employer matching contributions recognized in expense for the years ended December 31, 2023, 2022 and 2021 was $ 3.5 million, $ 2.8 million and $ 1.9 million, respectively.

(v) Commitments and Contingencies

3 unchanged sentences

The computation of basic net income per share of common stock (“EPS”) is based on the weighted average number of shares that were outstanding during the period, including shares of common stock that are issuable at the end of the reporting period.

The computation of diluted EPS is based on the number of basic weighted-average number of shares outstanding plus the weighted-average number of common shares that would be issued assuming the exercise of all potentially dilutive common stock equivalents.

Common stock equivalents consist of shares issuable upon the exercise of stock options and vesting of RSUs and PSUs .

Common stock equivalents with performance or market conditions are included as potentially dilutive if the conditions for vesting would have been met if the last day of the period was the end of the contingency period.

(x) Income Taxes

16 unchanged sentences

Recently adopted accounting pronouncements

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), which supersedes ASC 840, Leases.

The Company adopted this standard in the second quarter of 2022, effective as of January 1, 2022, using the modified retrospective method and the effective date as the date of initial application.

The Company recorded right-of-use assets of $ 45.8 million and lease liabilities of $ 48.5 million, respectively, to the consolidated balance sheet.

The Company did not apply the short-term lease exception and will therefore recognize a right-of-use asset and lease liability for all leases.

The adoption of the lease standard did not have a material impact on the Company’s consolidated statement of operations nor on its consolidated cash flows statements.

In October 2021, the FASB issued ASU No.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

ASU 2021-08 requires the company acquiring contract assets and contract liabilities obtained in a business combination to recognize and measure them in accordance with ASC 606, Revenue from Contracts with Customers.

At the acquisition date, the company acquiring the business should record related revenue, as if it had originated the contract.

Before the update such amounts were recognized by the acquiring company at fair value.

The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued.

The Company early adopted ASU 2021-08 as of April 1, 2022.

Recently issued accounting pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments.

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments ("ASU 2016-13").

The revised standard relates to measurement of credit losses on financial instruments, and requires financial assets measured at amortized cost to be presented at the net amount expected to be collected.

The guidance replaces the incurred loss model with an expected loss model referred to as current expected credit loss (CECL).

The guidance replaces the incurred loss model with an expected loss model referred to as current expected credit losses ("CECL").

The CECL model requires us to measure lifetime expected credit losses for financial instruments held at the reporting date using historical experience, current conditions and reasonable supportable forecasts.

The guidance expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating credit losses and requires new disclosures of the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination.

This ASU will be effective for the Company beginning in fiscal year 2023 with early adoption permitted.

The Company does not expect the adoption of ASU 2016-13 to have a material impact on the Company’s consolidated financial statements.

The Company adopted this standard as of January 1, 2023.

The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements.

Recently issued accounting pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This standard requires enhanced disclosure of significant segment expenses, and other segment items, on an annual and interim basis.

This ASU will be effective for the Company for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

This ASU will be applied retrospectively to all periods presented in the financial statements.

The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

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.

Business Combination

10 unchanged sentences

provided that the amount of the holdback shall not serve as any limitation on the indemnification obligations of the sellers under the purchase agreement.

The holdback is payable to the sellers, net of any such claims, 18 months after the Closing Date except for a portion of the holdback related to potential tax claims, which is payable three years after the Closing Date, net of any tax claims.

The holdback is payable to the sellers, net of any such claims, 18 months after the Closing Date except for a portion of the holdback related to potential tax claims, which is payable over three years after the Closing Date, net of any tax claims.

(3) Comprised of 200,103 shares of the Company's Class A common stock issued in relation to this acquisition.

The fair value was determined on the basis of the closing market price of the Company's Class A common stock on the acquisition date.

The Company paid $ 1.9 million related to holdback cash consideration during the year ended December 31, 2023, which is included in payments for deferred business acquisition consideration.

The following table summarizes the fair values of assets acq uired and liabilities assumed as of the date of acquisition:

17 unchanged sentences

The determination of the useful lives is based upon various industry studies, historical acquisition experience, economic factors, and future forecasted cash flows of the Company following the acquisition of heloo.

Subject to heloo's EBITDA (as defined in the share purchase agreement for the acquisition) margin exceeding a minimum level, the former shareholders of heloo are eligible to receive contingent earn-out payments not to exceed € 20.0 million, based on a multiple of EBITDA in excess of certain prescribed EBITDA targets outlined in the purchase agreement during each of the one year periods beginning May 1, 2022 and May 1, 2023, which are payable after the first and second anniversaries from the Closing Date, respectively.

The fair value of contingent earn-out payments was determined to be $ 14.9 million and $ 7.7 million as of December 31, 2022 and the acquisition date, respectively, based on a Monte Carlo simulation model, utilizing a discounted payout analysis based on probabilities and timing of achieving the prescribed targets.

Since these payments are contingent on future service conditions, they will be recognized as compensation expense ratably over the required service period.

For the year ended December 31, 2022, the Company recognized $ 9.7 million in compensation expense related to the contingent earn-out payments included in selling, general, and administrative expenses.

The total fair value of remaining contingent earn-out payments was determined to be $ 0.0 million and $ 14.9 million as of December 31, 2023 and 2022 , respectively, based on a Monte Carlo simulation model, utilizing a discounted payout analysis based on probabilities and timing of achieving the prescribed targets.

Since these payments were contingent on future service conditions, they were recognized as compensation expense ratably over the required service period.

Since the service conditions have been met, future changes will be based only on updates to the expected achievement.

For the years ended December 31, 2023 and 2022 , the Company recognized $ 7.9 million and $ 9.7 million in compensation expense related to the contingent earn-out payments included in selling, general, and administrative expenses.

The Company paid $ 18.3 million related to the contingent earn-out during the year ended December 31, 2023, which is included in net cash provided by operating activities.

During the year ended December 31, 2022, the Company recognized $ 0.6 million of costs, including legal, professional, and other fees related to the acquisition, included in selling, general, and administrative expenses on the statements of operations.

28 unchanged sentences

Contract Balances

Accounts receivable, net of allowance for doubtful accounts includes $ 80.8 million and $ 75.5 million of unbilled revenues as of December 31, 2022 and 2021, respectively.

Accounts receivable, net of allowance for credit losses includes $ 77.2 million and $ 80.8 million of unbilled revenues as of December 31, 2023 and 2022, respectively.

Activity in the Company’s allowance for doubtful accounts consisted of the following:

7 unchanged sentences

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 2022 and 2021, the Company entered into foreign currency exchange rate forward contracts, with two commercial banks as the counterparty, with maturities of generally 12 months or less, to reduce the volatility of cash flows primarily related to forecasted costs denominated in Philippine pesos.

During 2023 and 2022, the Company entered into foreign currency exchange rate forward contracts, with three 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 and Indian rupees.

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.

1 unchanged sentence

The exchange rate forward contracts entered into by the Company are not designated as hedging instruments.

Any gains or losses resulting from changes in the fair value of these contracts are recognized in other expense (income) in the consolidated statements of operations.

The forward contract receivable (payable) resulting from changes in fair value was recorded under prepaid expenses (accounts payable and accrued liabilities).

The following table presents the Company’s settled and outstanding forward contracts and the related realized and unrealized losses (gains):

Any gains or losses resulting from changes in the fair value of these contracts are recognized in other expense (income), net in the consolidated statements of operations.

The forward contract receivable (payable) resulting from changes in fair value was recorded under prepaid expenses and other current assets (accounts payable and accrued liabilities).

The following table presents the Company’s settled forward contracts and realized and unrealized losses (gains) associated with derivative contracts:

Year ended December 31,

(in thousands) 2023 2022 2021

Notional amount of settled forward contracts in Philippine pesos $ 221,014 $ 194,013 $ 109,200

Notional amount of settled forward contracts in Indian rupees 30,950 — —

Total notional amount of settled forward contracts $ 251,964 $ 194,013 $ 109,200

Realized losses (gains) from settlement of forward contracts $ ( 2,577 ) $ 13,336 $ 446

Notional amount of outstanding forward contracts in Philippine pesos $ 169,029 $ 175,050 $ 127,200

Notional amount of outstanding forward contracts in Indian rupees 45,193 — —

Total notional amount of outstanding forward contracts $ 214,222 $ 175,050 $ 127,200

2 unchanged sentences

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.

The Company has implemented the fair value accounting standard for those assets that are re-measured and reported at fair value at each reporting period.

The Company has implemented the fair value accounting standard for those assets and liabilities that are re-measured and reported at fair value at each reporting period.

This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value based on inputs used, and requires additional disclosures about fair value measurements.

3 unchanged sentences

Fair values determined by Level 3 inputs are unobservable data points for the asset and include situations where there is little, if any, market activity for the asset.

For financial statement presentation purposes, we offset assets and liabilities for forward contracts with the same counterparty that we intend to net settle upon maturity;

however, we do not offset assets and liabilities under master netting arrangements that we do not intend to net settle.

For financial statement presentation purposes, the Company offsets assets and liabilities for forward contracts with the same counterparty that it has the right and intent to net settle upon maturity;

however, it does not offset assets and liabilities under master netting arrangements that it does not intend to net settle.

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2023 and 2022 and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value:

2 unchanged sentences

(in thousands) Level 1 inputs Level 2 inputs Level 3 inputs

Money market funds $ 6,069 $ — $ — $ 6,069 $ — $ 6,069 $ — $ 6,069

Forward contract receivable

5 unchanged sentences

(in thousands) Level 1 inputs Level 2 inputs Level 3 inputs

Money market funds $ 6,069 $ — $ — $ 6,069 $ — $ 6,069 $ — $ 6,069

Forward contract receivable

$ — $ 4,845 $ — $ 4,845 $ ( 518 ) $ 4,327 $ ( 1,778 ) $ 2,549

Forward contract payable

$ — $ 3,049 $ — $ 3,049 $ ( 518 ) $ 2,531 $ ( 1,778 ) $ 753

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.

T he 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.

Derivative valuations incorporate credit risk adjustments that are necessary to reflect the probability of default by the counterparty or by the Company.

9 unchanged sentences

Other property and equipment

14,238 10,828

Property and equipment, gross

20 unchanged sentences

Balance as of December 31, 2021

Acquisition of heloo 21,908

1 unchanged sentence

Balance as of December 31, 2022

Foreign currency translation 726

Balance as of December 31, 2023

The results of our goodwill impairment tests for the years ended December 31, 2023 and 2022 did not indicate any impairments of goodwill.

19 unchanged sentences

$ 8,438 $ 257,175 $ 265,613 $ 3,712 $ 265,613 $ 269,325

— — — 39,878 — 39,878

Debt financing fees

4 unchanged sentences

On April 30, 2021, the Company entered into Amendment No.

1 to its 2019 Credit Agreement with the existing lenders providing for $ 50.0 million incremental revolving credit commitments on the same terms as our existing revolving credit facility.

1 to the 2019 Credit Agreement with the existing lenders providing for $ 50.0 million incremental revolving credit commitments on the same terms as the existing revolving credit facility.

On September 7, 2022, the Company entered into the 2022 Credit Agreement (as defined below) and the total outstanding debt under the 2019 Credit Facilities of $ 267.2 million was fully repaid.

5 unchanged sentences

Third party fees of $ 0.3 million associated with the debt modification were recorded in financing expenses on the consolidated statements of operations for the year ended December 31, 2022.

2025, 1.875 % of the original principal amount through September 30, 2026 and 2.50 % of the original principal amount thereafter, with the remaining principal due in a lump sum at the maturity date.

The 2022 Term Loan Facility matures on September 7, 2027, and commencing with the fiscal quarter ending December 31, 2022, requires quarterly principal payments of 0.25 % of the original principal amount through September 30, 2023, 0.625 % of the original principal amount through September 30, 2024, 1.25 % of the original principal amount through September 30, 2025, 1.875 % of the original principal amount through September 30, 2026 and 2.50 % of the original principal amount thereafter, with the remaining principal due in a lump sum at the maturity date.

Voluntary principal prepayments are permitted.

1 unchanged sentence

The 2022 Revolving Credit Facility terminates on September 7, 2027.

As of December 31, 2022, we had $ 190.0 million of borrowing available under the 2022 Revolving Credit Facility.

As of December 31, 2023, we had no balance outstanding and $ 190.0 million of borrowing available under the 2022 Revolving Credit Facility.

Borrowings under the 2022 Credit Agreement, with the exception of swing line borrowings, bear interest, at our option, either at (i) an adjusted Term Secured Overnight Financing Rate (“SOFR rate”) plus a margin of 2.25 % per annum, subject to a SOFR rate floor of 0.00 % or (ii) an alternative base rate plus a margin of 1.25 % per annum, subject to an alternative base rate floor of 1.00 %, Any borrowings under the swing line will be subject to the base rate.

2 unchanged sentences

The interest rate in effect for the 2022 Term Loan Facility as of December 31, 2023 was 7.705 % per annum.

Due to its variable interest rates, the carrying amount of debt approximates fair value based on the present value of future cash flows using Level 2 inputs.

The 2022 Credit Agreement contains a financial covenant requiring compliance with a maximum total net leverage ratio and certain other covenants, including, among other things, covenants restricting additional borrowings, investments (including acquisitions) and distributions.

4 unchanged sentences

(in thousands)

Operating lease costs recorded to cost of services was $ 15.2 million for the year ended December 31, 2022.

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

Rental expense for the years ended December 31, 2021, and 2020 was $ 12.9 million, and $ 11.1 million, respectively.

During the year ended December 31, 2020, the Company terminated its lease at its former Santa Monica Headquarters and San Antonio, which were due to expire in 2022 and 2023.

As a result of such terminations, the Company recorded lease termination cost of $ 1.8 million in 2020.

The following table presents the weighted average remaining lease term and weighted average discount rate for the Company's operating leases as of December 31, 2022:

December 31, 2022

Weighted average remaining lease term 4.1 years

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

Year ended December 31,

(in thousands) 2023 2022

Operating lease costs - Cost of services $ 17,314 $ 15,242

Operating lease costs recorded to selling, general, and administrative expense were immaterial during the years ended December 31, 2023 and 2022.

Rental expense for the year ended December 31, 2021 was $ 12.9 million.

The following table presents the weighted average remaining lease term and weighted average discount rate for the Company's operating leases as of December 31, 2023 and December 31, 2022:

December 31, 2023 December 31, 2022

Weighted average remaining lease term 3.5 years 4.1 years

Weighted average discount rate 6.3 % 5.3 %

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

(in thousands) Year Ended

December 31, 2022

(in thousands) December 31, 2023 December 31, 2022

Cash paid for amounts included in the measurement of operating lease liabilities $ 16,825 $ 14,551

7 unchanged sentences

Total lease liabilities $ 47,347

Future minimum rental commitments under non-cancelable operating leases as of December 31, 2021 were as follows:

(in thousands)

2022 $ 14,036

Commitments and Contingencies

6 unchanged sentences

On October 20, 2022, the Court entered an order appointing Humberto Lozada as lead plaintiff in the lawsuit.

On December 16, 2022, lead plaintiff filed an amended complaint, alleging additional misstatements in certain of the Company’s 2021 earnings releases filed on Form 8-K and at an investor conference, and asserting additional securities claims, including against members of TaskUs’s board of directors as well as BDP FC Aggregator L.P.

The complaint seeks unspecified damages and an award of costs and expenses, including reasonable attorneys’ fees, as well as equitable relief.

We believe that the lawsuit is without merit and intend to defend the lawsuit vigorously.

Our motion to dismiss was filed on February 17, 2023.

On February 17, 2023, TaskUs and the other named defendants filed a motion to dismiss.

On October 16, 2023, the plaintiffs voluntarily dismissed with prejudice certain claims based on certain theories of liability.

On January 5, 2024, the Court granted in part and denied in part the defendants’ motion to dismiss.

Defendants filed an answer to the complaint on February 9, 2024, and an initial pretrial conference was held on February 16, 2024.

We cannot predict at this point the length of time that this action will be ongoing or the liability, if any, which may arise therefrom.

The Company has received three lawsuits that present in large degree the same legal or factual issues, with allegations that are similar in nature.

The Company is currently defending three lawsuits that present in large degree the same legal or factual issues, with allegations that are similar in nature.

We believe that these three lawsuits are without merit and intend to defend each vigorously.

5 unchanged sentences

The complaint alleges the named defendants failed to exercise reasonable care in securing and safeguarding consumer information in connection with a 2020 data breach impacting Ledger SAS cryptocurrency hardware wallets, resulting in the unauthorized public release of approximately 272,000 pieces of detailed personally identifiable information, including Plaintiffs’ and class members’ full names, email addresses, postal addresses, and telephone numbers.

The four named plaintiffs allege aggregate losses of approximately $ 140,000 , and

allege that the damages exceed $ 5 million for purposes of class action jurisdiction.

On December 22, 2022, the Court stayed the case for a 60 day period and vacated the January 11, 2023 hearing on TaskUs' and Shopify's pending motions to dismiss.

On September 16, 2022, a purported class action lawsuit captioned My Choice Software, LLC vs.

Shopify, Inc.

Shopify (USA) Incl., TaskUs, Inc., Does 1-100, No.

CGC-22-601842, was filed in the Superior Court of the State of California, County of San Francisco.

The complaint alleges the named defendants secretly installed tracking cookies on consumers' devices to track individual consumer activity and gather private information and that the defendant Shopify allowed two of its support staff to steal customer data from more than 100 merchants.

The complaint seeks unspecified damages and an award of costs and expenses, including reasonable attorneys’ fees, as well as equitable relief.

This complaint has not been served on TaskUs, Inc.

The four named plaintiffs allege aggregate losses of approximately $ 140,000 , and allege that the damages exceed $ 5 million for purposes of class action jurisdiction.

On April 8, 2022, we filed a motion to dismiss, which is currently pending.

This case is currently stayed.

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 US District Court, Central District of California.

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, TaskUs, Inc.

filed a Motion to Dismiss, which is currently pending.

On February 13, 2023, we 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.

On November 22, 2023, TaskUs was added as an additional defendant in a lawsuit captioned Naeem Seirafi, Edward Baton, Anthony Comilla, Brett Deeney, and Abraham Vilinger, individually and on behalf of all others similarly situated v.

Ledger SAS, Shopify (USA) Inc., Shopify Inc., and TaskUs, Inc., No.

21-cv-02470 pending in the United States District Court, Northern District of California.

The complaint alleges defendants failed to exercise reasonable care in securing and safeguarding consumer information in connection with a 2020 data breach impacting Ledger cryptocurrency hardware wallets, resulting in the unauthorized public release of approximately 272,000 pieces of detailed personally identifiable information, including Plaintiffs’ and “Class” members’ full names, email addresses, postal addresses, and telephone numbers.

The complaint asserts claims against TaskUs for negligence, negligence per se, declaratory and injunctive relief, and for violations of the New York Deceptive Trade Practices Act.

The named plaintiffs’ alleged damages of approximately $ 557,000 and an award of costs and expenses, including reasonable attorneys’ fees, as well as declaratory and injunctive relief, and other damages.

On February 5, 2024, TaskUs filed a motion to dismiss, which is currently pending.

Indemnification

9 unchanged sentences

All other terms were substantially the same as the plan and the agreements as discussed above and were to be settled in cash upon an IPO or in a similar form as the method of purchase used by a future acquirer upon an occurrence of a change in control.

Prior to the IPO, management determined that these triggering events were not probable, and as such no liability or expense was recorded for the year ended December 31, 2020 related to the rollover shares.

Prior to the IPO, management determined that these triggering events were not probable, and as such no liability or expense was recorded prior to the IPO related to the rollover shares.

There were 6,514,360 outstanding phantom shares as of December 31, 2020.

11 unchanged sentences

In connection with the IPO, the Company adopted the 2021 Omnibus Incentive Plan (the “2021 Plan” and, together with the 2019 Plan, the “Incentive Plans”), which provides for the issuance of non-qualified stock options, incentive stock options, stock appreciation rights (“SARs”), restricted shares of Class A common stock, restricted stock units (“RSUs”), or other equity-based or cash-based awards.

The stock options are subject to service-based vesting conditions and generally vest quarterly or

annually ove r three to four years and expire 10 years from the date of the grant.

The stock options are subject to service-based vesting conditions and generally vest quarterly or annually ove r three to four years and expire 10 years from the date of the grant.

The RSUs are typically subject to service-based vesting conditions and generally vest in quarterly or annual installments over two to four years .

The Company initially granted 6,614,122 awards to its founders and reserved an additional 12,160,929 shares of Class A common stock for issuance under the 2021 Plan, subject to automatic annual evergreen increases.

As of December 31, 2022, the total number of shares available for future grants under the 2021 Plan was 9,132,323 .

The Company initially granted 6,614,122 awards to its founders and reserved an additional 12,160,929 shares of Class A common stock for issuance under the 2021 Plan.

As of December 31, 2023, the total number of shares available for future grants under the 2021 Plan was 7,371,346 , subject to automatic annual evergreen increases.

Employee Stock Purchase Plan

23 unchanged sentences

The weighted-average grant-date fair value of options granted during the years ended December 31, 2023, 2022 and 2021 was $ 8.85 , $ 10.73 and $ 9.69 , respectively.

The total pre-tax intrinsic value of the options exercised during the year ended December 31, 2022 was $ 10.9 million.

No stock options were exercised during the years ended December 31, 2021 and 2020.

The total pre-tax intrinsic value of the options exercised during the year ended December 31, 2023 and December 31, 2022 was $ 1.3 million and $ 10.9 million, respectively.

No stock options were exercised during the year ended December 31, 2021.

Awards granted to employees contain service, performance and market conditions that affect vesting.

19 unchanged sentences

Estimated based on the simplified method as we do not have adequate historical data.

The following table summarized the RSU activity for the year ended December 31, 2022:

The following table summarizes the RSU activity for the year ended December 31, 2023:

RSUs Weighted-average grant

7 unchanged sentences

3,864,319 $ 23.60

The weighted-average grant date fair value of RSUs granted during the year ended December 31, 2021 was $ 28.66 .

No RSUs were granted during the year ended December 31, 2020.

The total pre-tax intrinsic value of the RSUs released during the years ended December 31, 2022 and 2021 was $ 20.3 million and $ 12.4 million.

No RSUs were released during the year ended December 31, 2020.

The weighted-average grant date fair value of RSUs granted during the years ended December 31, 2022 and December 31, 2021 was $ 25.97 and $ 28.66 , respectively.

The total pre-tax intrinsic value of the RSUs released during the years ended December 31, 2023, 2022, and 2021 was $ 15.4 million, $ 20.3 million, and $ 12.4 million, respectively.

Performance Stock Units (“PSUs”)

13 unchanged sentences

Total $ 52,759 $ 68,979 $ 173,685

For the year ended December 31, 2020, no change in control, IPO or liquidity event actually occurred or was imminent.

Therefore, none of the phantom shares or options were vested or exercisable, and no expense was recorded for the year ended December 31, 2020 given the performance condition was not probable.

For the year ended December 31, 2021, the change in control condition of our phantom shares became probable upon the IPO.

As a result, the Company recognized expense in the amount of the expected cash settlement of the phantom shares totaling $ 127.5 million in selling, general and administrative expense on the consolidated statements of operations for the year ended December 31, 2021.

Additionally, the Company concluded that the public offering represented a qualifying liquidity event that would cause the performance condition of the options under the 2019 Plan to be probable of occurring, and began recognizing compensation expense in relation to those options, including approximately $ 2.2 million of compensation expense related to nonvested stock options based on the service already provided by the employee at that time.

For the year ended December 31, 2023, there was $ 7.8 million, $ 33.6 million and $ 2.5 million of unrecognized compensation expense related to the Company’s unvested stock options, RSUs and PSUs, respectively, that is expected to be recognized over a weighted-average period of 0.8 years, 1.1 years and 1.1 years.

The tax benefits recognized in the consolidated statements of operations for stock-based compensation expense were $ 3.2 million and $ 4.3 million for the years ended December 31, 2022 and 2021, respectively, and were no t material during the year ended December 31, 2020 .

The tax benefits recognized in the consolidated statements of operations for stock-based compensation expense, including the impact of exercises and releases, were $ 0.8 million, $ 3.2 million, and $ 4.3 million for the years ended December 31, 2023, 2022, and 2021, respectively .

The components of income (loss) before income taxes consists of the following, for the periods indicated:

16 unchanged sentences

1,478 ( 4,384 ) ( 837 )

Total deferred tax expense (benefit) ( 11,755 ) ( 11,477 ) ( 7,021 )

Total deferred tax benefit ( 7,959 ) ( 11,755 ) ( 11,477 )

Total provision for (benefit from) income taxes $ 29,342 $ 24,111 $ ( 2,265 )

5 unchanged sentences

Allowances and reserves

Deferred rent — 108

Intercompany payable

Foreign Tax Credit

Stock-based compensation expense 9,045 8,004

Deferred revenue

Unrealized foreign exchange gain/loss

Section 163(j) interest limitation — 1,364

Operating lease liabilities 1,390 1,292

Unrealized foreign exchange gain/loss

Other capitalized costs 3,750 124

Total deferred tax assets

4 unchanged sentences

Unrealized foreign exchange gain/loss

Other ( 2,129 ) —

Total deferred tax liabilities

14 unchanged sentences

Nondeductible officers’ compensation 6 9 ( 15 )

GILTI Inclusion

Global Intangible Low Tax Income (GILTI)

Foreign Derived Intangible Income (FDII)

( 2 ) ( 1 ) —

Return to accrual adjustment

Nondeductible transaction costs — — ( 2 )

6 unchanged sentences

Tax credits ( 1 ) — 2

Reserves for tax contingencies

Base Erosion and Anti-Abuse Tax (BEAT) — 2 —

Earn-out consideration 2 3 —

Other adjustments

( 2 ) — ( 2 )

Effective tax rate

5 unchanged sentences

As of December 31, 2023, unremitted earnings of the subsidiaries outside of the U.S.

are approximately $ 195.8 million, which the Company has not made a provision for U.S.

were approximately $ 273.7 million, which the Company has not made a provision for U.S.

or additional foreign withholding taxes and state taxes.

1 unchanged sentence

Determination of the amount of any unrecognized deferred income tax liability on this temporary difference is not practicable because of the complexities of the hypothetical calculation.

Various foreign jurisdictions are in the process of enacting Pillar Two legislation to adopt a minimum tax of 15% on the income arising in each jurisdiction in which large corporations operate and would apply to multinational companies with consolidated revenue above €750 million in at least two of the four preceding years.

This is per the “Model Rules”, which are also referred to as the “Anti Global Base Erosion” or “GloBE” rules as issued by the Organization for Economic Co-operations and Development.

The increased focus of Pillar Two and various jurisdictions enacting new tax laws could have a material adverse effect on our effective tax rate, results of operations, cash flows and financial condition.

The impact of this tax will depend on our facts in each year, anticipated guidance from the U.S.

Department of the Treasury, and other developing global tax legislation.

We will continue to monitor the impact of Pillar Two among the jurisdictions where we operate, and Pillar Two legislation has been adopted.

During 2021, the Philippines passed the CREATE Act which, among other changes, reduced the Philippines statutory tax rate from 30% to 25%.

As a result of the law change, the Company recognized an expense of $ 2.4 million as a result of reducing the value of deferred tax assets.

On March 27, 2020, the United States CARES Act was enacted in response to the COVID-19 pandemic.

The CARES Act, among other things, permitted NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021 and the deferral of employer taxes.

The Company chose to avail itself of these CARES Act provisions for NOL carryover and carrybacks and the deferral of employer taxes.

The Company has carried back net operating losses originating in the period from October 1, 2018, through December 31, 2018, to claim a refund for taxes paid in fiscal 2015, 2016, 2017, and the period from January 1, 2018, through September 30, 2018, resulting in a refund of approximately $ 5.2 million.

As a result of NOL carryback, as of December 31, 2021, the Company reduced the 2017 transition tax liability to $ 1.0 million.

Under the CARES Act, the Company received a net cash benefit of $ 5.3 million from the deferral of social security taxes otherwise due from April 10, 2020 through the year ended December 31, 2020.

One-half of the deferred amount was paid by December 31, 2021, and the second half was paid by December 31, 2022.

A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows:

12 unchanged sentences

As of December 31, 2023, the Company accrued interest and penalties of $ 0.1 million and $ 0.2 million, respectively.

The Company files income tax returns in US federal and state jurisdictions, as well as in the Philippines, Canada, India, Greece, Mexico, Taiwan, the United Kingdom, Ireland, Colombia, Japan and Malaysia.

In 2022, the Company established business operations in Poland, Romania, Croatia and Serbia for which the Company will be subject to tax.

The Company files income tax returns in US federal and state jurisdictions, as well as the foreign jurisdictions it operates in, including the Philippines, India, Colombia, Croatia, Greece, Ireland, Japan, Malaysia, Mexico, the United Kingdom and Taiwan.

As of December 31, 2023, the tax years 2018 to 2022 are subject to examination by tax authorities.

16 unchanged sentences

In addition, our ability to pay dividends is limited by covenants in our existing indebtedness and may be limited by the agreements governing any indebtedness we or our subsidiaries may incur in the future.

Liquidation Rights— Upon our liquidation, dissolution or winding up, whether voluntary or involuntary, after payment of the debts and other liabilities of the Company and subject to the rights, if any, of the holders of any outstanding series of preferred stock or any class or series of stock having a preference over or the right to participate with the common stock, the holders of all outstanding shares of Class A common stock and Class B common stock shall be entitled to receive the remaining

assets of the Company available for distribution to its shareholders ratably in proportion to the number of shares held by each such shareholder.

Initial Public Offering

12 unchanged sentences

See Note 13 , “ Shareholders’ Equity ” for additional information.

The following table summarized the computation of basic and diluted earnings per share for the years ended December 31, 2022, 2021 and 2020:

The following table summarizes the computation of basic and diluted earnings per share for the years ended December 31, 2023, 2022 and 2021:

Year ended December 31,

8 unchanged sentences

$ 0.48 $ 0.39 $ ( 0.62 )

Since the Company was in a net loss position for the year ended December 31, 2021 , diluted EPS is equal to basic EPS as the inclusion of potential common stock equivalents would have been anti-dilutive.

The Company excluded 5,719,465 , 2,840,004 , and 105,177 potential common stock equivalents from the computation of diluted EPS for the years ended December 31, 2023, 2022 , and 2021, respectively, because the effect would have been anti-dilutive.

In addition, the Company excluded 7,476,384 potential common stock equivalents from the computation of diluted EPS for the year ended December 31, 2021, since it was in a net loss position;

In addition, the Company excluded 7,476,384 potential common stock equivalents from the computation of diluted EPS for the year ended December 31, 2021 , since it was in a net loss position and the inclusion of potential common stock equivalents would have been anti-dilutive;

however, these awards would have been dilutive if the Company was in a net income position.

As of December 31, 2022 and 2020 , there were 4,917,920 and 8,459,100 , potential common stock equivalents outstanding, respectively, with performance and market conditions which were not met at each date, that were excluded from the calculation of diluted EPS.

As of December 31, 2023 and 2022 , there were 4,296,539 and 4,917,920 , potential common stock equivalents outstanding, respectively, with market conditions which were not met at each date, that were excluded from the calculation of diluted EPS.

Related Party

On October 1, 2018, Bidco acquired 100 % of the outstanding shares of TaskUs Holdings, Inc.

(formerly known as TaskUs, Inc.) at a purchase price of $ 429.4 million (the “Transaction”).

As a part of the Transaction, the Company entered into a Stock Purchase Agreement, which provides that the sellers of TaskUs, Holdings, Inc.

are entitled to receive cash payments for certain tax benefits, if any, realized as a result of the Blackstone Acquisition that are received by the Company for a specified period after the closing date.

The Company recognized expense of $ 3.6 million for the expected payment to the sellers during

the year ended December 31, 2020, which was included within accounts payable and accrued liabilities in the consolidated balance sheets as of December 31, 2020.

The Company made payment to the sellers during the year ended December 31, 2021.

On October 1, 2018, Bidco acquired 100 % of the outstanding shares of TaskUs Holdings at a purchase price of $ 429.4 million (the “Transaction”).

As a part of the Transaction, the Company entered into a Stock Purchase Agreement, which provides that the sellers of TaskUs Holdings are entitled to receive cash payments for certain tax benefits, if any, realized as a result of the Blackstone Acquisition that are received by the Company for a specified period after the closing date.

The Company made a payment of $ 3.6 million to the sellers during the year ended December 31, 2021.

Underwriting of Offerings

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data