What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-03-06 compared with 2024-03-08 · 244 added, 264 removed, 806 unchanged (39% of the section changed)

5 unchanged sentences

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Statements of Shareholders’ Equity

6 unchanged sentences

We have audited the accompanying consolidated balance sheets of TaskUs, Inc.

and subsidiaries (the Company) as of December 31, 2023 and 2022 , the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023 , and the related notes (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of December 31, 2024 and 2023 , the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024 , and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023 , and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024 , in conformity with U.S.

generally accepted accounting principles.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2022 due to the adoption of Financial Accounting Standards Board’s Accounting Standards Update 2016-02, Leases (Topic 842).

Basis for Opinion

82 unchanged sentences

See accompanying notes to consolidated financial statements.

Consolidated Statements of Operations

Consolidated Statements of Income

(in thousands, except share and per share data)

7 unchanged sentences

Amortization of intangible assets 19,935 20,346 19,882

Loss on disposal of assets 1,322 31 52

Loss (gain) on disposal of assets ( 80 ) 1,322 31

Total operating expenses 902,561 829,327 876,592

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

Operating income 92,424 95,038 83,897

Other expense (income), net ( 3,306 ) ( 1,711 ) 7,443

Financing expenses 21,549 21,717 11,921

Income (loss) before income taxes 75,032 64,533 ( 60,963 )

Provision for (benefit from) income taxes 29,342 24,111 ( 2,265 )

Net income (loss) $ 45,690 $ 40,422 $ ( 58,698 )

Net income (loss) per common share:

Income before income taxes 74,181 75,032 64,533

Provision for income taxes 28,311 29,342 24,111

Net income $ 45,870 $ 45,690 $ 40,422

Net income per common share:

Basic $ 0.52 $ 0.49 $ 0.41

4 unchanged sentences

See accompanying notes to consolidated financial statements.

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Income

(in thousands)

1 unchanged sentence

2024 2023 2022

Net income (loss) $ 45,690 $ 40,422 $ ( 58,698 )

Retirement benefit reserves

790 ( 98 ) ( 55 )

Foreign currency translation adjustments

306 ( 8,386 ) ( 5,524 )

Comprehensive income (loss) $ 46,786 $ 31,938 $ ( 64,277 )

Net income $ 45,870 $ 45,690 $ 40,422

Unrealized loss on derivative contracts, net ( 3,333 ) — —

Retirement benefit reserves, net ( 551 ) 790 ( 98 )

Foreign currency translation adjustment ( 11,954 ) 306 ( 8,386 )

Comprehensive income $ 30,032 $ 46,786 $ 31,938

See accompanying notes to consolidated financial statements.

1 unchanged sentence

(in thousands, except share data)

Capital stock and additional paid-in capital Accumulated deficit Accumulated other comprehensive income (loss) Total shareholders’ equity

Capital stock and additional paid-in capital Accumulated deficit Accumulated other comprehensive loss Total shareholders’ equity

Class A common stock Class B convertible common stock Additional paid-in capital

3 unchanged sentences

27,431,264 $ 275 70,032,694 $ 700 $ 556,418 $ ( 176,096 ) $ ( 2,163 ) — $ — $ 379,134

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

Conversion of common stock 21,704,326 217 ( 21,704,326 ) ( 217 ) — — — — — —

Issuance of common stock for settlement of equity awards 1,819,740 18 — — 3,460 — — — — 3,478

Shares withheld related to net share settlement ( 193,456 ) ( 2 ) — — ( 4,143 ) — — — — ( 4,145 )

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

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

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

Distribution of dividends ( 0.55 per share)

— — — — — ( 50,000 ) — — — ( 50,000 )

Net loss — — — — — ( 58,698 ) — — — ( 58,698 )

Net income — — — — — 40,422 — — — 40,422

Other comprehensive loss — — — — — — ( 8,484 ) — — ( 8,484 )

3 unchanged sentences

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

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

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

1 unchanged sentence

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

Other comprehensive loss — — — — — — ( 8,484 ) — — ( 8,484 )

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

Balance as of December 31, 2023

5 unchanged sentences

Net income — — — — — 45,870 — — — 45,870

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

Other comprehensive loss — — — — — — ( 15,838 ) — — ( 15,838 )

Balance as of December 31, 2024

6 unchanged sentences

Cash flows from operating activities:

Net income (loss) $ 45,690 $ 40,422 $ ( 58,698 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Net income $ 45,870 $ 45,690 $ 40,422

Adjustments to reconcile net income to net cash provided by operating activities:

40,223 40,391 37,915

2 unchanged sentences

Amortization of debt financing fees

Loss on disposal of assets 1,322 31 52

Provision for credit losses

Loss (gain) on disposal of assets ( 80 ) 1,322 31

Provision (benefit) for credit losses

( 15 ) 103 1,746

14 unchanged sentences

18,251 ( 7,877 ) 13,589

Operating lease liabilities and deferred rent

Operating lease liabilities

( 17,312 ) ( 13,823 ) ( 12,391 )

4 unchanged sentences

Other noncurrent liabilities ( 145 ) ( 68 ) ( 1,631 )

Net cash provided by (used in) operating activities 143,670 147,095 ( 32,674 )

Net cash provided by operating activities 138,888 143,670 147,095

Cash flows from investing activities:

11 unchanged sentences

Payments for debt financing fees — — ( 1,821 )

Proceeds from issuance of common stock, net of underwriters’ fees — — 120,698

Proceeds from employee stock plans 6,261 631 3,478

Payments for offering costs — — ( 4,798 )

Payments for taxes related to net share settlement ( 4,255 ) ( 2,169 ) ( 4,145 )

Payments for stock repurchases ( 18,600 ) ( 111,959 ) ( 30,967 )

Distribution of dividends

— — ( 50,000 )

Net cash provided by (used in) financing activities ( 119,085 ) ( 4,035 ) 54,390

Net cash used in financing activities ( 25,176 ) ( 119,085 ) ( 4,035 )

Increase (decrease) in cash and cash equivalents 74,608 ( 7,410 ) 75,067

12 unchanged sentences

$ 6,024 $ 4,451 $ 3,108

Noncash reclass for customer-billed equipment

$ — $ — $ 1,874

Loan receivable exchanged for software

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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 and Artificial Intelligence (“AI”) Services.

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

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

2 unchanged sentences

• Digital Customer Experience :

Principally consists of omni-channel customer care services, primarily delivered through digital (non-voice) channels.

• Trust and Safety :

Principally consists of review and disposition of user and advertiser generated visual, text and audio content for purposes which include removal or labeling of policy violating, offensive or misleading content.

Also included in this area are our offerings for risk management, compliance, identity management and fraud.

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 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.

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.

Summary of Significant Accounting Policies

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The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

The acquisition of Parsec d.o.o.

and Q Experience d.o.o.

(collectively, “heloo”) was completed on 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.

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

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

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

Colombia, which was previously included in Rest of World, is now reported separately within property and equipment, net by geography.

(b) Use of Estimates

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The Company’s CODM is the chief executive officer (“CEO”).

The CEO reviews financial information presented on an entity level basis for purposes of making operating decisions and assessing financial performance.

The CEO reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance 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.

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22 % 19 % 22 %

Less than 10%

Less than 10% 11 %

For the years ended December 31, 2024 and 2023, the following customers represented greater than 10% of the Company’s accounts receivable:

8 unchanged sentences

During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.

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.

In determining whether a contract contains a lease, we consider whether (1) we have the right to obtain substantially all of the economic benefits from the use of the asset throughout the term of the contract, (2) we have the right to direct how and for what purpose the asset is used throughout the term of the contract and (3) we have the right to operate the asset throughout the term of the contract without the lessor having the right to change the terms of the contract.

In determining whether a contract contains a lease, the Company considers whether it has (1) the right to obtain substantially all of the economic benefits from the use of the asset throughout the term of the contract, (2) the right to direct how and for what purpose the asset is used throughout the term of the contract and (3) the right to operate the asset throughout the term of the contract without the lessor having the right to change the terms of the contract.

If a lease is identified, the Company determines whether it should be classified as an operating or finance lease at commencement.

The Company has various leases for office spaces under operating lease agreements which have a range of expiration dates from one to ten years , and often include a renewal option for an additional term.

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

The Company has various leases for office spaces under operating lease agreements which have a range of periods remaining from one to six years , and often include a renewal option for an additional term.

Lease terms include the base, non-cancelable lease term, and any options to extend or terminate the lease when it is reasonably certain at commencement that the Company will exercise such options.

19 unchanged sentences

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.

For the years ended December 31, 2024, 2023 and 2022, realized and unrealized foreign currency losses (gains) were $( 4.0 ) million, $ 0.5 million and $( 0.8 ) million, respectively, recognized in other expense (income), net.

(i) Cash and Cash Equivalents

Cash and cash equivalents consist of cash on deposit with banks and highly liquid investments with maturities of 90 days or less from the date of purchase.

For the years ended December 31, 2024, 2023 and 2022, interest income was $ 5.5 million, $ 1.6 million and $ 0.1 million, respectively, recognized in other expense (income), net.

(j) Accounts Receivable

8 unchanged sentences

Straight line amortization approximates amortization under the effective interest method.

The amortization is included in financing expenses in the consolidated statements of operations.

The amortization is included in financing expenses in the consolidated statements of income.

On the consolidated balance sheets, the debt financing fees related to the term loan and revolver loan are classified as a discount against the associated debt.

2 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 (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.

It requires measurement of all derivative instruments at fair value, recognized as assets (prepaid expenses and other) or liabilities (accrued payroll and employee-related liabilities) on the consolidated balance sheets.

The cash flow effects of all of the Company’s derivative instruments are reflected in operating activities on the consolidated statements of cash flows.

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.

Gains and losses on derivative instruments not designated as hedges are included in earnings.

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

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.

Cash Flow Hedges

The Company performs an assessment, on the designation date and on an ongoing basis, to determine whether the cash flow hedges are expected to be highly effective at offsetting changes in the hedged item.

For the effective portion, changes in fair values of derivative instruments designated as cash flow hedges are recorded in accumulated other comprehensive loss and reclassified into earnings when the hedged transactions occur.

Derivatives Not Designated as Hedging Instruments

Changes in fair value of derivative instruments not designated as hedges are included in other expense (income), net in the consolidated statements of income.

(m) Revenue Recognition

25 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 operations.

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

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 consolidated statements of operations.

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

Advertising expense for the years ended December 31, 2024, 2023 and 2022 was $ 1.7 million , $ 1.6 million and $ 2.0 million, respectively.

4 unchanged sentences

Depreciation is computed on the straight-line basis over the estimated useful life of the Company’s assets, generally three to five years or, for leasehold improvements, over five years or the remaining term of the lease, whichever is shorter.

Construction in process represents property under construction and is stated at cost.

This includes costs of construction and other direct costs.

The account is not depreciated until such time that the assets are completed and available for use.

Fully depreciated assets are retained in the accounts until they are no longer in use and no further depreciation is recognized in profit or loss.

Construction in process represents property under construction and is stated at cost, including costs of construction and other direct costs, which is not depreciated until such time that the assets are completed and available for use.

Fully depreciated assets are retained in the accounts until they are no longer in use and no further depreciation is recognized.

An item of property and equipment, including the related accumulated depreciation and amortization and any impairment losses, is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset.

5 unchanged sentences

Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary.

During the years ended December 31, 2023, 2022 and 2021, no impairment charges were recorded.

(p) Intangibles

6 unchanged sentences

Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, as considered necessary.

During the years ended December 31, 2023, 2022 and 2021, no impairment charges were recorded.

Goodwill is the amount by which the cost of the acquired net assets in a business combination exceeds the fair value of the identifiable net assets on the date of purchase.

9 unchanged sentences

If the carrying amount of the reporting unit exceeds its fair value, an impairment charge is recorded in an amount equal to that excess, but not more than the carrying value of goodwill.

As of October 1, 2023, 2022 and 2021, we opted to bypass the qualitative assessment under Step 0 and proceeded directly to performing a quantitative goodwill impairment test under Step 1.

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) 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.

Prepaid expenses and ot her current assets consists primarily of receivable from insurance, VAT and goods and services taxes, prepayments for software and insurance, advances to suppliers, refundable security deposits and implementation costs capitalized for hosting arrangements.

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

(s) Share Repurchases

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

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

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

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Expense recognized for the years ended December 31, 2024, 2023 and 2022 was $ 1.9 million, $ 1.7 million and $ 1.3 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 net obligations under our benefit plans as of December 31, 2024 and 2023 were $ 6.5 million and $ 4.0 million, respectively, nearly all of which is noncurrent.

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

2 unchanged sentences

(v) Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.

Legal costs incurred in connection with loss contingencies are expensed as incurred.

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recorded when it is probable t hat a liability has been incurred and the amount can be reasonably estimated.

The Company uses third-party insurance to cover liabilities for certain risks and generally recognizes a receivable when a loss event has occurred and recovery is probable.

Insurance recoveries are recorded separately from the liability on the consolidated balance sheets, since insurance generally does not relieve the Company from its obligation to make payments, and recorded within the same line as the loss on the consolidated statements of income.

Legal costs incurred in connectio n with loss contingencies are expensed as incurred.

(w) Earnings per share

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Recently adopted accounting pronouncements

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 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.

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):

1 unchanged sentence

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.

The Company adopted this standard as of December 31, 2024, with retrospective application to all periods presented in the financial statements.

See Note 16, “Segment Information” for disclosure of significant segment expenses.

Recently issued accounting pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

6 unchanged sentences

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 reviewing this ASU.

Business Combination

On April 15, 2022 (the “Closing Date”), the Company completed the acquisition of 100 % of the equity interests of heloo, a Croatia-based Digital Customer Experience solutions provider to European technology companies supporting 20 languages across seven additional Eastern European countries, including Bosnia, Serbia, and Slovenia.

The Company believes this acquisition will be complementary to the Company's growth strategy by expanding its global delivery footprint with a suite of multi-lingual, cost-competitive Digital Customer Experience services.

The acquisition date fair value of the consideration transferred was $ 35.4 million, consisting of the following:

(in thousands)

Cash consideration (1)

Holdback cash consideration (2)

Equity consideration (3)

Total consideration $ 35,366

(1) Represents cash consideration paid to the sellers to complete the acquisition.

(2) Represents consideration, which was retained by the Company as security to satisfy sellers' obligations for potential future contractual claims arising under the terms of the purchase agreement;

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 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:

(in thousands) Preliminary Measurement Period Adjustments Final

Cash and cash equivalents $ 2,771 $ — $ 2,771

Intangibles 11,198 — 11,198

Goodwill 21,582 326 21,908

Other assets acquired 3,947 ( 326 ) 3,621

Total assets $ 39,498 $ — $ 39,498

Total liabilities assumed $ 4,132 $ — $ 4,132

Net assets acquired $ 35,366 $ — $ 35,366

The goodwill is derived from anticipated operational synergies and assembled workforce.

None of the goodwill recorded is deductible for tax purposes.

The purchase price allocation includes $ 11.2 million of acquired identifiable intangible assets, consisting of the following:

(in thousands, except useful lives) Estimated Fair Value Estimated Useful Life in Years

Customer relationships $ 10,872 10

Trade name 326 2

Total $ 11,198

The fair values of the identifiable intangible assets have been estimated using the excess earnings and relief-from-royalty methods.

The intangible assets are being amortized over their estimated useful lives on a straight-line basis that reflects the economic benefit of the assets.

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 ending April 30, 2023 and 2024.

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.

On April 15, 2022 (the “Closing Date”), the Company completed the acquisition of 100 % of the equity interests of Parsec d.o.o.

and Q Experience d.o.o.

(collectively, “heloo”) for $ 35.4 million.

The former shareholders of heloo were also eligible to receive contingent earn-out payments not to exceed € 20.0 million, based on performance compared to prescribed EBITDA targets outlined in the purchase agreement during each of the one year periods ending April 30, 2023 and 2024, respectively.

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.

The results of operations and the fair values of the assets acquired and liabilities assumed have been included in the financial statements from the date of acquisition.

This acquisition was not material to the Company's consolidated financial statements for the current periods presented.

Supplemental pro forma financial information has not been provided as the historical results of heloo were not material to the Company.

The Company recognized compensation expense related to the contingent earn-out payments within selling, general, and administrative expenses of $ 0.0 million and $ 7.9 million for the years ended December 31, 2024 and 2023 , respectively.

The Company paid $ 0.0 million and $ 18.3 million related to the contingent earn-out during the years ended December 31, 2024 and 2023 , respectively, which is included in net cash provided by operating activities.

The total fair value of remaining contingent earn-out payments was determined to be $ 0.0 million as of December 31, 2023, with the second earn-out period expired as of April 30, 2024, with no additional amount paid.

The Company paid $ 0.1 million and $ 1.9 million related to holdback cash consideration during the years ended December 31, 2024 and 2023 , respectively, which is included in payments for deferred business acquisition consideration.

Revenue from Contracts with Customers

6 unchanged sentences

$ 611,837 $ 605,943 $ 637,587

Trust and Safety

Trust + Safety

248,041 186,742 178,409

25 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 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.

During 2024 and 2023, the Company entered into foreign currency exchange rate forward contracts, with five 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 and Colombian pesos.

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.

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), 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:

Cash Flow Hedges

For the years ended December 31, 2024, 2023 and 2022, the Company did not settle any cash flow hedges.

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

Year ended December 31,

(in thousands) 2024 2023 2022

Notional amount of outstanding forward contracts in Philippine pesos $ 152,803 $ — $ —

Notional amount of outstanding forward contracts in Indian rupees 41,819 — —

Notional amount of outstanding forward contracts in Mexican pesos 14,380 — —

Notional amount of outstanding forward contracts in Colombian pesos 35,141 — —

Total notional amount of outstanding forward contracts designated as cash flow hedges $ 244,143 $ — $ —

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 year ended December 31, 2024 was $ 4.2 million.

As of December 31, 2024, the net accumulated loss on our foreign currency cash flow hedges expected to be reclassed from accumulated other comprehensive loss into earnings within the next 12 months was $ 4.2 million.

See Note 15, “Accumulated Other Comprehensive Loss” for additional information regarding changes in accumulated other comprehensive loss.

Derivatives Not Designated as Hedging Instruments

The following table presents the Company’s settled and outstanding forward contracts and realized and unrealized losses (gains) associated with derivative contracts not designated as hedging instruments:

Year ended December 31,

(in thousands) 2024 2023 2022

Notional amount of settled forward contracts in Philippine pesos $ 169,029 $ 221,014 $ 194,013

6 unchanged sentences

Unrealized foreign exchange losses (gains) on forward contracts $ ( 689 ) $ 2,485 $ ( 4,589 )

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.

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.

Fair Value Measurements

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.

1 unchanged sentence

This standard applies to fair value measurements already required or permitted by existing standards.

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.

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.

In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets.

1 unchanged sentence

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, 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.

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 December 31, 2024 and 2023 and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value:

December 31, 2024

Fair value measurements using Total Gross Fair Value Effect of Counter-party Netting Net Amounts on Balance Sheet Effect of Master Netting Arrangements

Fair value measurements using Total Gross Fair Value Effect of Master Netting Arrangements

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

Forward contract receivable

Money market funds $ 60,346 $ — $ — $ 60,346 $ — $ 60,346

Derivatives designated as hedging instruments:

Forward contracts receivable

$ — $ 2 $ — $ 2 $ ( 2 ) $ —

Forward contract payable

Derivatives designated as hedging instruments:

Forward contracts payable

$ — $ 4,221 $ — $ 4,221 $ ( 2 ) $ 4,219

December 31, 2023

Fair value measurements using Total Gross Fair Value Effect of Counter-party Netting Net Amounts on Balance Sheet Effect of Master Netting Arrangements

Fair value measurements using Total Gross Fair Value Effect of Master Netting Arrangements

(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

Derivatives not designated as hedging instruments:

Forward contracts receivable

$ — $ 95 $ — $ 95 $ ( 95 ) $ —

Forward contract payable

Derivatives not designated as hedging instruments:

Forward contracts payable

$ — $ 784 $ — $ 784 $ ( 95 ) $ 689

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India 11,830 17,452

Colombia 12,950 6,638

Rest of World

1 unchanged sentence

$ 66,775 $ 68,893

During the years ended December 31, 2024, 2023 and 2022, no impairment charges were recorded.

Goodwill and Intangibles

On April 15, 2022, the Company completed the acquisition of heloo.

As a result of the acquisition, the Company recorded approximately $ 21.9 million of goodwill and $ 11.2 million of other identifiable intangible assets.

See Note 3, “Business Combination” for additional information .

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

1 unchanged sentence

Balance as of December 31, 2022

Acquisition of heloo 21,908

Foreign currency translation 726

2 unchanged sentences

Balance as of December 31, 2024

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

As of October 1, 2024, 2023 and 2022, the Company opted to bypass the qualitative assessment under Step 0 and proceeded directly to performing a quantitative goodwill impairment test under Step 1.

Based on the quantitative assessments for the years ended December 31, 2024, 2023 and 2022, the Company determined that the carrying value of the reporting unit did not exceed its fair value and no impairment charges were recorded.

Intangible assets consisted of the following as of December 31, 2024 and 2023:

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Total 8.7 $ 293,303 $ ( 120,778 ) $ 172,525 $ 294,035 $ ( 101,077 ) $ 192,958

During the years ended December 31, 2024, 2023 and 2022, no impairment charges were recorded.

Future amortization expense for intangible assets subject to amortization was:

10 unchanged sentences

2022 Credit Agreement

On September 25, 2019, the Company entered into a credit agreement (the “2019 Credit Agreement”) that included a $ 210.0 million term loan (the “2019 Term Loan Facility”) and a $ 40.0 million revolving credit facility (the “2019 Revolving Credit Facility” and, together with the 2019 Term Loan Facility, the “2019 Credit Facilities”) .

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

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.

2022 Credit Agreement

On September 7, 2022, the Company entered into a credit agreement (the “2022 Credit Agreement”) with both new and existing lenders which amended and restated the 2019 Credit Agreement.

On September 7, 2022, the Company entered into a credit agreement (the “2022 Credit Agreement”) with both new and existing lenders which amended and restated its credit agreement entered into on September 25, 2019 (the “2019 Credit Agreement”).

The 2022 Credit Agreement includes a $ 270.0 million term loan (the "2022 Term Loan Facility") and a $ 190.0 million revolving credit facility (the "2022 Revolving Credit Facility" and, together with the 2022 Term Loan Facility, the “2022 Credit Facilities”).

The proceeds of the 2022 Term Loan Facility were used to repay all borrowings under the 2019 Credit Facilities, to pay related fees and expenses and for general corporate purposes (the “Refinancing”).

The Refinancing was accounted for as a debt modification for existing lenders and new debt for new lenders, resulting in debt issuance costs, including amounts allocated from the 2019 Credit Facilities, of $ 1.9 million associated with the 2022 Term Loan Facility and $ 1.1 million associated with the undrawn 2022 Revolving Credit Facility.

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.

The proceeds of the 2022 Term Loan Facility were used to repay all borrowings under the 2019 Credit Agreement, to pay related fees and expenses and for general corporate purposes (the “Refinancing”).

The Refinancing was accounted for as a debt modification for existing lenders and new debt for new lenders, resulting in debt issuance costs, including amounts allocated from the 2019 Credit Agreement, of $ 1.9 million associated with the 2022 Term Loan Facility and $ 1.1 million associated with the undrawn 2022 Revolving Credit Facility.

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

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.

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(in thousands)

2025 $ 15,188

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

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Operating lease costs recorded to selling, general, and administrative expense were immaterial during the years ended December 31, 2024, 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, 2024 and December 31, 2023:

3 unchanged sentences

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

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

(in thousands) December 31, 2024 December 31, 2023 December 31, 2022

Cash paid for amounts included in the measurement of operating lease liabilities $ 19,733 $ 16,825 $ 14,551

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Legal Proceedings

We are 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, we believe that resolution of all such pending matters will not, either individually or in the aggregate, have a material adverse effect on the Company’s business, operating results, cash flows, or financial condition.

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 February 23, 2022, a purported class action lawsuit captioned Lozada v.

22-cv-1479-JPC, was filed in the United States District Court for the Southern District of New York against the Company, our Chief Executive Officer, our President, and our Chief Financial Officer.

The complaint alleges that the registration statement filed in connection with the Company’s IPO and the Company’s second and third quarter 2021 earnings calls contained materially false and misleading information in violation of the federal securities laws.

The complaint alleges that the registration statement filed in connection with the Company’s initial public offering (“IPO”) and the Company’s second and third quarter 2021 earnings calls contained materially false and misleading information in violation of the federal securities laws.

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

1 unchanged sentence

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.

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

On February 24, 2025, the Company entered into a Stipulation and Agreement of Settlement (the “Settlement Agreement”), which is subject to approval by the court .

The Settlement Agreement contemplates a combined payment by defendants of $ 17.5 million, inclusive of plaintiffs’ attorneys’ fees and expenses, and a full and complete release of all claims.

The Company expects its insurance retention and policies to fund the settlement amount.

The defendants have entered into the Settlement Agreement solely to eliminate the burden, expense, uncertainty, and risk of further litigation and have denied, and continue to deny, any and all allegations of liability or wrongdoing.

On January 15, 2025, 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.

2025-0043-NAC), purportedly on behalf of the Company against certain current and former members of its board of directors.

Eaton previously delivered a demand pursuant to 8 Del.

§220 on TaskUs on July 3, 2024, which the Company responded to on September 16, 2024.

The Eaton complaint includes allegations similar to those in the Lozada case.

In particular, the complaint 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 includes one count for breach of fiduciary duty and alleges that because of TaskUs’s breach, the Company has suffered damages in the form of:

(1) legal fees associated with the Lozada 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.

The Company is unable to predict, with a reasonable degree of certainty, the likely outcome of this litigation.

The Company is also 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.

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

The Company cannot predict at this point the length of time that these actions will be ongoing or the liability, if any, which may arise therefrom.

As these actions are still in preliminary phases, any potential loss or impact on financial position or results of operations cannot yet be estimated.

4 unchanged sentences

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.

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

This case is currently stayed.

4 unchanged sentences

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, we filed a motion to dismiss the amended complaint.

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.

6 unchanged sentences

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.

On February 5, 2024, TaskUs filed a motion to dismiss.

On July 16, 2024, the Court granted in part and denied in part the motion to dismiss.

On August 23, 2024, the plaintiffs filed an amended complaint.

On September 19, 2024, TaskUs filed a motion to dismiss, which the court granted on February 6, 2025.

Indemnification

In addition, in the ordinary course of business, we enter 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.

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.

Stock-Based Compensation

Phantom Stock Plan

On June 19, 2015, TaskUs Holdings’ board of directors officially adopted a company-wide phantom stock plan and related phantom share agreements.

The plan and agreements establish key terms and conditions of the grants, including amount of shares reserved for the grant, amount granted to an employee, vesting, and forfeiture terms.

The phantom stock awards 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 (each as defined in such plan).

In connection with the Blackstone Acquisition, the phantom stock awards associated with the plan were settled partially in cash and partially in rollover shares in accordance with the terms of the plan.

The contractual lives and the vesting conditions for the rollover phantom stock varied depending on the employment status of the holder at the acquisition date.

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 prior to the IPO related to the rollover shares.

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

There were 1,399,470 phantom shares forfeited during the year ended December 31, 2021.

As of December 31, 2021, there were no phantom shares outstanding.

2019 Stock Incentive Plan

1 unchanged sentence

The option awards contain service, market and performance conditions.

Stock options under this plan contingently vest over a period of two years in the event of a change in control and over a period of three years in the event of an IPO (each as defined in such plan), with the vesting period beginning on the date of the performance event so long as the holder remains employed.

Stock options under this plan contingently vest over a period of two years in the event of a change in control and over a period of three years in the event of an initial public offering (“IPO”) (each as defined in such plan), with the vesting period beginning on the date of the performance event so long as the holder remains employed.

The amount of options eligible for vesting is contingent upon Blackstone’s return on invested capital in the Company.

3 unchanged sentences

2021 Omnibus Incentive Plan

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.

On June 10, 2021, 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.

16 unchanged sentences

7,523,971 $ 14.19 6.9 $ 30,867

770,937 $ 18.11

Exercised ( 1,271,316 ) $ 4.92

7 unchanged sentences

4,846,497 $ 18.58 6.4 $ 17,505

There were no stock options granted during the year ended December 31, 2024.

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

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.

We use the Black-Scholes model to determine the fair value of stock options with either solely service conditions or with a combination of service and performance conditions.

Prior to the IPO, we valued our options using a combination of Monte Carlo simulation and Black-Scholes model.

A Monte Carlo simulation was first used to determine the number of options eligible for vesting, then a Black-Scholes model was used to estimate the value for the vested options given the simulated scenario.

The grant date fair value of the stock options was estimated using the Black-Scholes option pricing method with the following assumptions:

The total pre-tax intrinsic value of the options exercised during the year ended December 31, 2024, 2023, and 2022 was $ 12.6 million, $ 1.3 million, and $ 10.9 million respectively.

Options granted to employees contain service conditions that affect vesting.

The Company uses the Black-Scholes option pricing model to estimate the grant date fair value of stock options with service conditions with the following assumptions:

Year ended December 31,

2023 2022 2021

Dividend yield (%) 0 % 0 %

2 unchanged sentences

Expected term (years) 5.5 - 6.5

The assumptions used in the Black-Scholes model, other than the fair value of our common stock, are estimated as follows:

The assumptions used in the Black-Scholes model, other than the fair value of the Company’s common stock, are estimated as follows:

• Expected dividend yield:

Zero percent, as we do not anticipate paying dividends on our common stock.

Zero percent, as the Company does not anticipate paying dividends on its common stock.

• Expected volatility:

Based on the historical stock price volatility of comparable publicly-traded companies in our peer group and the implied volatility of our assets and current leverage.

Based on a blended volatility of the Company’s historic stock price volatility and the historical stock price volatility of comparable publicly-traded companies in its peer group and the implied volatility of its assets and current leverage.

• Risk-free interest rate:

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• Expected term:

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

Estimated based on the simplified method as the Company does not have adequate historical data.

The following table summarizes the RSU activity for the year ended December 31, 2024:

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Performance Stock Units (“PSUs”)

The Company had 3,373,417 PSUs with a weighted-average grant date fair value of $ 4.02 outstanding as of December 31, 2023 and 2022.

The majority of the PSUs vest contingently in annual installments over four years subject to continued service and the achievement of certain enterprise value compound annual growth rate ("CAGR") targets.

The remaining PSUs vest contingently in four years subject to continued service and the achievement of certain market capitalization CAGR targets.

The grant date fair value of the PSUs granted during the year ended December 31, 2021 were estimated using the Monte Carlo simulation method with the following assumptions:

The following table summarizes the PSU activity for the year ended December 31, 2024:

PSUs Weighted-average grant

date fair value

Outstanding at January 1, 2024

3,373,417 $ 4.02

320,000 $ 11.58

Released — $ —

Unvested and Outstanding at December 31, 2024

3,693,417 $ 4.67

The majority of PSUs outstanding as of January 1, 2024, vest contingently in annual installments over four years subject to continued service and the achievement of certain enterprise value compound annual growth rate ("CAGR") targets (market conditions).

The remaining PSUs vest contingently in four years subject to continued service and the achievement of certain market capitalization CAGR targets (market conditions).

The majority of PSUs granted during 2024 , vest contingently in annual installments over three years subject to continued service and the achievement of certain stock price CAGR targets (market conditions).

The remaining PSUs vest contingently over three years subject to continued service and the achievement of certain New Business Annual Contract Value targets (performance conditions).

The grant date fair value of the PSUs with market conditions granted during 2024 were estimated using the Monte Carlo simulation method with the following assumptions:

Dividend yield (%) 0 %

2 unchanged sentences

Stock-Based Compensation Expense

The following table summarizes the components of stock-based compensation expense recognized in the Company’s consolidated statements of operations for the periods presented:

The following table summarizes the components of stock-based compensation expense recognized in the Company’s consolidated statements of income for the periods presented:

Year ended December 31,

3 unchanged sentences

Total $ 41,821 $ 52,759 $ 68,979

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 employees at that time.

For the year ended December 31, 2024, there was $ 2.2 million, $ 25.6 million and $ 2.7 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 0.9 years, 1.4 years and 1.3 years.

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:

The tax benefits recognized in the consolidated statements of income for stock-based compensation expense, including the impact of exercises and releases, were $ 0.5 million, $ 0.8 million, and $ 3.2 million for the years ended December 31, 2024, 2023, and 2022, respectively .

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

Year ended December 31,

3 unchanged sentences

40,586 50,023 56,591

Income (loss) before income taxes $ 75,032 $ 64,533 $ ( 60,963 )

The provision for (benefit from) income taxes consists of the following, for the periods indicated:

Income before income taxes $ 74,181 $ 75,032 $ 64,533

The provision for income taxes consists of the following, for the periods indicated:

Year ended December 31,

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Total deferred tax benefit ( 10,889 ) ( 7,959 ) ( 11,755 )

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

The following table presents the tax effects of temporary differences that gives rise to significant portions of deferred tax assets and deferred tax liabilities as of the dates indicated:

Total provision for income taxes $ 28,311 $ 29,342 $ 24,111

The following table presents the tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities as of the dates indicated:

(in thousands) December 31, 2024

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Operating lease liabilities 1,698 1,390

Unrealized foreign exchange gain/loss

Section 267 - Intercompany Payable 3,757 —

Other capitalized costs 3,147 3,750

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State taxes, net of federal benefit

Other permanent differences

Nondeductible officers’ compensation 4 6 9

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Return to accrual adjustment

Nondeductible transaction costs — — ( 2 )

Nondeductible litigation costs 4 — —

Stock-based compensation expense — 7 3

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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.

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

10 unchanged sentences

The Company estimates no material changes to its uncertain tax positions within the next 12 months.

The Company recognizes interest and penalties related to uncertain tax positions as components of provision for (benefit from) income taxes.

The Company recognizes interest and penalties related to uncertain tax positions as components of provision for income taxes.

As of December 31, 2024, the Company accrued interest and penalties of $ 0.1 million and $ 0.1 million, respectively.

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.

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

As of December 31, 2024, the tax years 2019 to 2023 are subject to examination by tax authorities.

Shareholders’ Equity

Dividend Distribution

On April 9, 2021, prior to the IPO, the board of directors declared a cash dividend in the aggregate amount of $ 50.0 million to holders of its common stock.

The cash dividend was paid on April 16, 2021.

Amendment and Restatement of Certificate of Incorporation

On June 10, 2021, the Company amended and restated its certificate of incorporation to effect a ten -for-one forward stock split of its outstanding common stock and authorized three classes of ownership interests:

The Company’s amended and restated certificate of incorporation authorized three classes of ownership interests:

(i) 250,000,000 shares of preferred stock, par value $ 0.01 per share, (ii) 2,500,000,000 shares of Class A common stock, par value $ 0.01 per share, and (iii) 250,000,000 shares of Class B common stock, par value $ 0.01 per share.

After giving effect to the ten -for-one stock split, all outstanding shares of common stock were reclassified into an equal number of shares of Class B common stock (the “Class B Reclassification”) and the selling shareholders participated equally in the Class B Reclassification.

The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting, transfer and conversion rights.

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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

On June 15, 2021, the Company closed its IPO of 5,553,154 shares of Class A common stock (the “primary” offering) and selling shareholders sold 9,626,846 outstanding shares (the “secondary” offering), including shares sold by the selling shareholders pursuant to the underwriters’ full exercise of their option to purchase additional shares, at a public offering price of $ 23.00 per share.

The Company received net proceeds of $ 120.7 million after deducting underwriting discounts and commissions, but before deducting offering expenses.

The Company used the proceeds from the primary offering, together with cash on hand, to satisfy payments of approximately $ 127.5 million in respect of vested phantom shares.

The Company did no t receive any proceeds from the secondary offering.

Secondary Offering

On October 25, 2021, certain of the Company's shareholders completed a secondary offering of 12,077,480 shares of the Company's Class A common stock at a public offering price of $ 63.50 per share.

All of the shares of Class A common stock were offered by existing shareholders.

The Company did not sell any common stock in the offering and did not receive any proceeds from the offering.

Earnings Per Share

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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.

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

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

The following table summarizes the computation of basic and diluted earnings per share for the years ended December 31, 2024, 2023 and 2022:

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(in thousands, except share and per share data) 2024 2023 2022

Net income (loss) available to common shareholders $ 45,690 $ 40,422 $ ( 58,698 )

Net income available to common shareholders $ 45,870 $ 45,690 $ 40,422

Weighted-average common shares outstanding - basic

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Weighted-average common shares outstanding - diluted 92,304,270 96,173,071 102,603,179

Net income (loss) per common share:

Net income per common share:

$ 0.52 $ 0.49 $ 0.41

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The Company excluded 3,296,636 , 5,719,465 and 2,840,004 potential common stock equivalents from the computation of diluted EPS for the years ended December 31, 2024, 2023 , and 2022, 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 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, 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 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

Blackstone Securities Partners L.P., an affiliate of Blackstone, served as underwriter of 1,380,000 of the 15,180,000 million shares of Class A common stock sold in the IPO, with underwriting discounts and commissions of $ 1.265 per share paid by the Company and selling shareholders, with respect to the shares sold by them.

Blackstone Securities Partners L.P.

served as underwriter of 1,021,942 of the 12,077,480 shares of Class A common stock sold in the secondary offering, with underwriting discounts and commissions of $ 2.06375 per share paid by the selling shareholders.

As of December 31, 2024, 2023, and 2022, there were 3,408,972 , 4,296,539 and 4,917,920 potential common stock equivalents outstanding, respectively, with market or performance conditions which were not met at the relevant date, that were excluded from the calculation of diluted EPS.

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss consisted of the following:

(in thousands) Foreign Currency Translation Adjustments Retirement Benefit Reserves Unrealized Gains (Losses) on Cash Flow Hedges Accumulated Other Comprehensive Loss

Balance as of December 31, 2022

$ ( 10,011 ) $ ( 636 ) $ — $ ( 10,647 )

Other comprehensive income before reclassifications 306 736 — 1,042

Income tax effects — ( 31 ) — ( 31 )

Amounts reclassified from accumulated other comprehensive loss — 89 — 89

Income tax effects — ( 4 ) — ( 4 )

Other comprehensive income 306 790 — 1,096

Balance as of December 31, 2023

( 9,705 ) 154 — ( 9,551 )

Other comprehensive loss before reclassifications ( 11,954 ) ( 727 ) ( 4,219 ) ( 16,900 )

Income tax effects — 243 886 1,129

Amounts reclassified from accumulated other comprehensive loss — ( 96 ) — ( 96 )

Income tax effects — 29 — 29

Other comprehensive loss ( 11,954 ) ( 551 ) ( 3,333 ) ( 15,838 )

Balance as of December 31, 2024

$ ( 21,659 ) $ ( 397 ) $ ( 3,333 ) $ ( 25,389 )

Segment Information

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

Year ended December 31,

2024 2023 2022

Operating expenses:

Personnel costs (Cost of services) (1)

$ 505,448 $ 457,937 $ 477,387

Operating costs (Selling, general, and administrative expense) (2)

183,970 170,517 183,437

Stock-based compensation expense (3)

42,391 53,179 69,452

Non-operating costs (Selling, general, and administrative expense) (4)

15,423 8,108 10,682

Other (Cost of services) (5)

95,251 77,527 77,806

Depreciation 40,223 40,391 37,915

Amortization of intangible assets 19,935 20,346 19,882

Loss (gain) on disposal of assets ( 80 ) 1,322 31

Total operating expenses $ 902,561 $ 829,327 $ 876,592

(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, 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) Includes earn-out consideration recognized as compensation expense related to the acquisition of heloo in 2022, professional service fees related to non-recurring transactions in 2022 and 2023, and certain litigation costs that are considered non-recurring and outside of the ordinary course of business in 2024.

(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.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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