Executive Summary

Q1 2025 revenue was $277.8M (+22.1% YoY), beating company guidance by $5.8M and Wall Street consensus of ~$271.1M; adjusted EPS was $0.38, above the ~$0.324 consensus, while EBITDA (GAAP) missed consensus due to elevated investment and FX impacts *.
All service lines grew double-digit YoY; AI Services grew >50% (fastest), and Trust + Safety grew >30% for the fifth straight quarter, reinforcing mix shift toward higher-value workflows .
Management withdrew full-year 2025 guidance and canceled the earnings call after announcing a take-private agreement at $16.50/share with Blackstone and the co-founders, creating an immediate stock-reaction catalyst and shifting near-term focus to the transaction process .
Free cash flow was $21.8M (down YoY), with adjusted EBITDA-to-FCF conversion of 36.8% given ramp investments and capex timing; cash rose to $196.9M, providing flexibility amidst the pending transaction .

What Went Well and What Went Wrong

What Went Well
- Beat on revenue and adjusted EPS vs consensus; adjusted EBITDA margin of 21.3% exceeded company guidance by 130 bps, reflecting disciplined operations despite growth investments *.
- Structural growth in AI Services (>50% YoY) and durable Trust + Safety growth (>30% YoY for five quarters), validating the strategy to lean into AI-era workflows and safety .
- External validation: Recognized as a Leader in Everest Group’s Trust & Safety Services PEAK Matrix for a third consecutive year, citing AI support services and proactive risk management .
- Management strategic posture: “The era of AI is upon us… This strategic transaction will deliver immediate value to stockholders, while enabling TaskUs to make long-term investments to better support… in the AI age.” — Bryce Maddock (CEO) .
What Went Wrong
- EBITDA (GAAP) missed consensus despite adjusted margin beat; free cash flow conversion fell vs prior year due to increased investments and capex timing * .
- Company withdrew FY25 outlook and canceled the call due to the take-private announcement, reducing near-term visibility and potentially elevating uncertainty in estimate modeling .
- Operating cash flow declined YoY versus Q1 2024 ($36.3M vs $51.2M), and adjusted EBITDA margin ticked down vs Q1 2024 (21.3% vs 22.2%), reflecting ramp costs and currency effects .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Service Revenue ($USD Millions)	$255.345	$274.242	$277.792
GAAP Diluted EPS ($)	$0.14	$0.10	$0.23
Adjusted EPS ($)	$0.37	$0.31	$0.38
Net Income ($USD Millions)	$12.699	$8.859	$21.148
Net Income Margin (%)	5.0%	3.2%	7.6%
Adjusted EBITDA ($USD Millions)	$54.215	$53.795	$59.272
Adjusted EBITDA Margin (%)	21.2%	19.6%	21.3%

Segment performance indicators (Q1 2025):

AI Services YoY revenue growth: >50%
Trust + Safety YoY revenue growth: >30% (fifth consecutive quarter)
All three service lines: double-digit YoY revenue growth

Q4 2024 service line revenue (for context/trend):

Service Line	Q4 2024 Revenue ($USD Millions)
Digital Customer Experience (DCX)	$164.8
Trust + Safety	$70.0
AI Services	$39.4

KPIs:

KPI	Q1 2025
Teammates (period-end)	61,400; +2,400 since Q4
Net cash provided by operating activities ($USD Millions)	$36.276
Free Cash Flow ($USD Millions)	$21.796
Adjusted Free Cash Flow ($USD Millions)	$22.438
Adjusted EBITDA → FCF Conversion (%)	36.8%
Adjusted EBITDA → Adjusted FCF Conversion (%)	37.9%
Cash & Equivalents ($USD Millions)	$196.852
Total Debt ($USD Millions)	$252.886 (LT $236.389 + current $16.497)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	Q1 2025	$270.0–$272.0	Actual: $277.8	Beat (exceeded top-end by $5.8)
Adjusted EBITDA Margin (%)	Q1 2025	~20%	Actual: 21.3%	Above guidance (+130 bps)
Revenue ($USD Billions)	FY 2025	$1.095–$1.125	Withdrawn	Withdrawn
Adjusted EBITDA Margin (%)	FY 2025	~21%	Withdrawn	Withdrawn
Adjusted Free Cash Flow ($USD Millions)	FY 2025	~$100	Withdrawn	Withdrawn

Earnings Call Themes & Trends

Note: Q1 2025 earnings call was canceled due to the take-private announcement; management commentary resides in press releases.

Topic	Previous Mentions (Q3 2024 and Q4 2024)	Current Period (Q1 2025)	Trend
AI/technology initiatives	Agentic AI consulting practice; TaskGPT deployment; plan to be an “AI winner”; accelerating AI services demand (31% YoY in Q4); partnerships to come	Strategic partnerships with Decagon and Regal to deploy agentic AI across voice and digital; internal application of agentic AI to operations	Strengthening AI focus and commercialization
Trust + Safety	>30% YoY growth (Q4); expanded AI safety solutions; multi-country ramps with large social media client	>30% YoY growth (5th consecutive quarter); Everest Group Leader recognition	Sustained double-digit growth
Regional trends	Q4 revenue mix: PH 54%, US 13%, India 13%, RoW 20%; strong growth in LATAM (+35%) & Europe (+43%)	Not disclosed for Q1 in release	Neutral (insufficient Q1 detail)
Security and resilience	Q4 impacted by security incidents; increased investment in security infrastructure	No Q1 call detail; continued growth despite investments	Stabilizing following remediation
Regulatory/legal	Standard risk disclosures; no transaction in Q4	Take-private agreement at $16.50/share; guidance withdrawn; call canceled	Transaction-focused narrative

Management Commentary

“The era of AI is upon us… This strategic transaction will deliver immediate value to stockholders, while enabling TaskUs to make long-term investments to better support both our own business and our clients as we scale and adapt in the AI age.” — Bryce Maddock, CEO (take-private announcement) .
“We intend to be an AI winner… increasing our investments in AI services… deploying AI across our own internal operations… announce our Agentic AI consulting practice.” — Bryce Maddock (Q4 prepared remarks) .
“In the fourth quarter, we earned total revenues of $274.2 million… adjusted EBITDA of $53.8 million… [Q1 2025] revenues $270–$272 million, adjusted EBITDA margin ~20%.” — Balaji Sekar, CFO (Q4 prepared remarks/guidance) .

Q&A Highlights

Largest customer and Trust + Safety scope: Management reiterated strong relationship and growth expectations, emphasizing work in integrity operations and AI services; no “fact-checking” services provided; revenue with the largest client expected to grow faster than overall in 2025 .
Margin trajectory: Expect sequential margin improvement from Q1 through Q3 with typical Q4 seasonal dip; drivers include ramp costs, security investments, and generative AI investments .
Security incidents: Q4 EBITDA shortfall tied to security events and growth investments; management aims to become the most secure provider, with millions of dollars in planned security and AI investments .
Agentic AI practice differentiation: TaskUs positions its deep workflow knowledge to train/maintain AI systems; expects enduring revenue stream from implementation and automation .
Efficiency and revenue per employee: Mix shift from onshore to offshore depressed yield; expect improvement as specialized services grow and agentic AI boosts productivity .

Estimates Context

Q1 2025 vs S&P Global consensus:

Metric	Consensus	Actual	Beat/Miss
Revenue ($USD)	$271.070M*	$277.792M	Beat
Primary EPS ($)	$0.324*	$0.38	Beat
EBITDA ($USD)	$54.076M*	$49.390M	Miss

Values retrieved from S&P Global.*

Implications: Results likely drive upward revenue/EPS revisions, but the withdrawn FY25 guidance and canceled call constrain visibility. Analysts should reconcile consensus EBITDA frameworks (GAAP EBITDA miss) with company’s adjusted EBITDA beat and margin outperformance vs guidance .

Key Takeaways for Investors

Quality beat on revenue and adjusted EPS; underlying demand remains strong across service lines despite ramp investments and FX .
Mix shift toward AI Services (>50% YoY) and sustained Trust + Safety growth (>30% YoY) supports medium-term double-digit trajectory in higher-value workflows .
Adjusted EBITDA margin exceeded guidance (+130 bps), but GAAP EBITDA missed consensus; modeling should differentiate adjusted vs GAAP constructs given non-GAAP addbacks (FX, severance, litigation, SBC, interest income) .
FCF conversion moderated due to growth capex and ramp; cash increased to ~$196.9M, supporting operational flexibility during transaction processes .
Near-term stock narrative is dominated by the take-private at $16.50/share; focus shifts to regulatory/shareholder approvals and deal execution as primary catalysts .
With guidance withdrawn and no Q1 call, expect heightened estimate uncertainty; use prior company guideposts (Q4 guide and Q1 actuals) and disclosed ramp/security investments to anchor scenarios .
Strategic AI partnerships (Decagon, Regal) and Everest recognition strengthen the thesis of TaskUs as an AI-era BPO leader; watch commercialization pace of agentic AI offerings .

TaskUs, Inc. (TASK)·Q1 2025 Earnings Summary