TaskUs — Third Quarter 2026 Earnings Summary

Financial Performance:

• Service revenue reached $314.7 million for the quarter, representing 5.4% year-over-year growth; nine-month revenue totaled $929.9 million, up 6.8% year-over-year.
• Net income was $26.2 million (8.3% margin) for the quarter, a 16.4% decrease from $31.4 million in Q3 2025; nine-month net income was $72.5 million, down 0.1% year-over-year.
• Adjusted Net Income was $31.3 million (9.9% margin) for the quarter, down 19.8% year-over-year; nine-month Adjusted Net Income was $94.7 million, down 17.4% year-over-year.
• Diluted EPS was $0.28 for the quarter (down 17.6% year-over-year); nine-month Diluted EPS was $0.78, flat year-over-year.
• Adjusted EPS was $0.34 for the quarter (down 19.0% year-over-year); nine-month Adjusted EPS was $1.02, down 17.1% year-over-year.
• Adjusted EBITDA was $59.1 million (18.8% margin) for the quarter, down 6.8% year-over-year; nine-month Adjusted EBITDA was $175.3 million, down 6.6% year-over-year.
• Net cash provided by operating activities was $30.7 million for the quarter, down 43.5% year-over-year; nine-month operating cash flow was $120.1 million, up 11.7% year-over-year.
• Free Cash Flow was $22.0 million for the quarter, down 47.5% year-over-year; nine-month Free Cash Flow was $90.7 million, up 42.2% year-over-year.
• Adjusted Free Cash Flow was $23.0 million for the quarter, down 52.1% year-over-year; nine-month Adjusted Free Cash Flow was $101.6 million, up 32.1% year-over-year.
• Conversion of Adjusted EBITDA to Free Cash Flow was 37.3% for the quarter (vs. 66.1% in Q3 2025); nine-month conversion was 51.7% (vs. 34.0% in 2025).
• Conversion of Adjusted EBITDA to Adjusted Free Cash Flow was 38.9% for the quarter (vs. 75.6% in Q3 2025); nine-month conversion was 58.0% (vs. 41.0% in 2025).
• Cash and cash equivalents were $189.7 million at quarter-end; total debt increased to $486.2 million (current portion $23.3 million + long-term $462.9 million) from $241.4 million at year-end 2025.
• Deferred revenue increased to $8.3 million at quarter-end from $3.3 million at year-end 2025.

Guidance and Future Outlook:

• Full-year 2026 revenue guidance raised to $1.249 billion–$1.251 billion (midpoint increased by $20 million).
• Full-year 2026 Adjusted EBITDA margin guidance set at approximately 19.0% at the midpoint of the revenue range.
• Full-year 2026 Adjusted Free Cash Flow guidance raised to $115 million–$125 million (midpoint increased by $5 million).
• Fourth Quarter 2026 revenue guidance set at $319 million–$321 million.
• Fourth Quarter 2026 revenue growth at midpoint expected to be 2.3% year-over-year.
• Fourth Quarter 2026 Adjusted EBITDA margin guidance set at approximately 19.5%.

Business Segments and Product Lines:

• AI Services revenue grew 28% year-over-year in the quarter; trailing twelve-month AI Services revenue exceeded $250 million, marking the seventh consecutive quarter as the fastest-growing service line.
• Digital Customer Experience revenue growth accelerated to 7.1% year-over-year for the quarter, the third consecutive quarter of acceleration.
• Year-over-year revenue growth excluding the largest client was nearly 20% for the quarter.
• TaskUs supports developers of autonomous vehicles, robots, and frontier AI models within its AI Services portfolio.

Market and Competitive Landscape:

• Recognized as a Leader in the Everest Group's Trust and Safety Services PEAK Matrix® Assessment for the fourth consecutive year.
• Company operates with approximately 64,700 teammates at the end of Q3 2026.
• Maintains liquidity of $189.7 million in cash and $100.0 million of borrowing capacity under its revolving credit facility.

Risks and Challenges:

• Financial results are subject to risks including dependence on key clients, potential loss of business or non-payment, and failure to cost-effectively acquire new clients.
• Risks include inability to anticipate client needs, failure to incorporate AI appropriately, security breaches, and unauthorized disclosure of sensitive information.
• Business faces risks related to global economic and political conditions, particularly in social media, meal delivery, and transport industries; reliance on international operations in the Philippines and India; and fluctuations in the U.S. dollar.
• Risks include indebtedness following the March 2026 refinancing, failure to recruit and retain skilled employees, and competitive pricing pressure.
• Forward-looking statements are subject to uncertainties regarding the impact of macroeconomic environments, labor laws, and the control of affiliates of Blackstone Inc. and Co-Founders.

Management Commentary and Tone:

• CEO Bryce Maddock stated the company outperformed the top end of guidance by $12.7 million and set a new record for highest quarterly revenue in company history.
• Management described the growth strategy as working, citing sustained sales momentum and strength in service offerings.
• CFO Rishabh Khemka highlighted the resilience and growing diversification of the business, noting strong year-to-date Adjusted Free Cash Flow of $101.6 million (58% of Adjusted EBITDA).
• Management expressed confidence in driving profitability and funding AI transformation initiatives through disciplined cost management across operations and overhead functions.

Other Key Points:

• The company completed a refinancing and special dividend in 2026, with associated transaction costs included in non-GAAP adjustments.
• A special dividend of $332.8 million was distributed during the nine months ended September 30, 2026.
• Long-term debt proceeds of $500 million were received in the nine-month period, offset by payments of $248.2 million on long-term debt and $9.9 million in debt financing fees.
• Stock-based compensation expense was $4.2 million for the quarter and $14.9 million for the nine-month period.
• Severance costs of $670,000 were incurred in the quarter due to cost optimization measures to restructure support roles.
• Foreign currency gains of $3.6 million were recorded in the quarter, contributing to non-GAAP adjustments.
• No share repurchases were made in the nine-month period, compared to $27.8 million in 2025.