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TaskUs, Inc. (TASK)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 revenue grew 23.6% year over year to $294.1M and beat Wall Street consensus by ~$21.2M; Adjusted EPS of $0.43 beat consensus by ~$0.09, while GAAP diluted EPS was $0.22 .
  • Adjusted EBITDA was $65.0M (22.1% margin), up 26.7% y/y; net income was $20.0M (6.8% margin), up 59% y/y .
  • Free cash flow fell to ~$0.04M on elevated capex and transaction/security-related payments, with Adjusted Free Cash Flow of $6.5M (10% EBITDA conversion) .
  • Management did not provide Q2 guidance amid the pending take-private; prior FY25 guidance from Q4 was withdrawn in Q1 due to the merger process, but operational momentum and AI services strength remain key stock catalysts .

What Went Well and What Went Wrong

What Went Well

  • All three service lines delivered double-digit y/y revenue growth; Trust + Safety was “nearly 30%,” and AI Services remained the fastest-growing service line for the second consecutive quarter .
  • Strategic partnerships with Decagon and Regal to accelerate Agentic AI-powered customer experience, reinforcing TaskUs’ AI-centric roadmap .
  • Management emphasized the intent to be an “AI winner,” launching an Agentic AI consulting practice and broad AI investments to drive durable growth and margin efficiency over time: “We intend to be an AI winner… Agentic AI consulting practice” .

What Went Wrong

  • Free cash flow conversion collapsed to 0.1% in Q2 (vs 49.8% in Q2’24), reflecting higher capex and non-recurring payments; operating cash flow fell 43% y/y to $17.0M .
  • Non-GAAP add-backs were substantial, including $10.2M of transaction costs and $8.4M of stock-based compensation in Q2 .
  • Earlier (Q4) security incident required suspending operations and incremental security investments, contributing to margin pressure; management is “hardening defenses” with ongoing spend factored into FY25 margin outlook .

Financial Results

Core P&L, Cash Flow, and Non-GAAP Metrics

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$274.242 $277.792 $294.086
Net Income ($USD Millions)$8.859 $21.148 $20.047
Diluted EPS ($USD)$0.10 $0.23 $0.22
Adjusted EPS ($USD)$0.31 $0.38 $0.43
Adjusted EBITDA ($USD Millions)$53.795 $59.272 $64.952
Net Cash from Operations ($USD Millions)$40.658 $36.276 $17.009
Free Cash Flow ($USD Millions)$20.375 $21.796 $0.038
Adjusted Free Cash Flow ($USD Millions)$25.137 $22.438 $6.518

Margins

MetricQ4 2024Q1 2025Q2 2025
Net Income Margin %3.2% 7.6% 6.8%
Adjusted EBITDA Margin %19.6% 21.3% 22.1%

Estimates vs Actual (Q2 2025)

MetricConsensus*ActualDifference# of Estimates*
Revenue ($USD Millions)$272.869*$294.086 +$21.2186*
Primary EPS ($USD)$0.336*$0.43 +$0.0947*
EBITDA ($USD Millions)$56.213*$55.432*-$0.781N/A

Values retrieved from S&P Global.*

Service Lines and KPIs (disclosed items)

KPI / ItemQ2 2025
Service line growth highlightsAll three lines double-digit; Trust + Safety “nearly 30%”; AI Services fastest growing
Ending headcount~60,400 teammates
Cash and Cash Equivalents$181.916M
Total Debt (LT + current)$249.605M ($231.421M LT + $18.184M current)
Accounts Receivable (net)$231.442M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent (Q2 2025)Change
RevenueFY 2025$1.095B–$1.125B at midpoint ~$1.110B No guidance provided; pending mergerWithdrawn vs Q4 guide
Adjusted EBITDA MarginFY 2025~21% No guidance provided; pending mergerWithdrawn
Adjusted Free Cash FlowFY 2025~$100M No guidance provided; pending mergerWithdrawn
RevenueQ1 2025$270M–$272M Actual: $277.8M (exceeded) Beat prior guidance

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 Call)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
AI/technology initiatives“Agentic AI consulting practice,” TaskGPT rollout; AI Services expected fastest-growing in 2025 No call; press release only (withdrew outlook due to merger) AI Services fastest growing; partnerships with Decagon and Regal Strengthening
Largest client exposureStrong relationship; revenue expected ~70% larger vs 2023 by end of 2025; focus on AI safety/Trust & Safety; no fact-checking No call Trust + Safety remains strong; AI safety mentioned Concentration rising but healthy
Margins and investmentsSequential margin improvement through Q3; security incidents and ramp costs pressured Q4; FY25 ~21% margin No call Adjusted EBITDA margin 22.1% in Q2; heavy non-GAAP adjustments Improving y/y; conversion weaker
Regional trendsStrong growth in LATAM (+35%) and Europe (+43%) in Q4; U.S. +10% y/y No call Regional mix not quantified; headcount 60.4k globally Diversifying footprint
Regulatory/legal/securityQ4 security incident; increased security investments Merger announced and outlook withdrawn Forward-looking statements highlight merger risks Ongoing risk management

Management Commentary

  • “We intend to be an AI winner… we’re proud to announce our Agentic AI consulting practice… By reselling, implementing and maintaining these tools… we will create an enduring revenue stream from the AI revolution” (CEO) .
  • “We expect year-over-year revenue growth [in AI Services] to materially accelerate in the first half of this year… making AI services our fastest-growing service offering” (CEO) .
  • “Our largest client… revenue grew faster than the overall business in 2024… we expect that revenue… will grow even faster in 2025” (CEO) .

Q&A Highlights

  • Largest client and content policy: No “fact-checking” work; Trust & Safety and AI safety remain focus; relationship expected to be ~70% larger vs 2023 by end of 2025 .
  • Margin trajectory: Q1 ~20% Adjusted EBITDA, sequential improvement through Q3, modest Q4 seasonal dip; investments in generative AI, security, ramp costs embedded in outlook .
  • Security incident: Suspension impacted Q4 margins; ongoing multi-million-dollar investments in security posture and AI; full-year margins expected roughly flat with 2024 .
  • Agentic AI practice: Partnerships to automate simple customer interactions; enduring revenue stream via implementation and maintenance; leverage TaskUs’ domain knowledge .
  • Revenue per employee: Mix shift to offshore depressed yield; expect improvement with automation and specialized services .

Estimates Context

  • Q2 2025 beats: Revenue $294.1M vs $272.9M consensus (+$21.2M); Primary EPS $0.43 vs $0.336 consensus (+$0.094). Both indicate upward bias to near-term estimates, especially in AI-driven workloads .
  • EBITDA consensus ($56.2M) vs S&P-reported actual ($55.4M*) is below company’s Adjusted EBITDA ($65.0M), reflecting definitional differences; investors should anchor on company-defined Adjusted EBITDA while tracking consensus EPS and revenue for stock reaction .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Q2 delivered a clean top-line and EPS beat versus consensus, underpinned by AI Services momentum and resilient Trust & Safety growth; expect near-term estimate revisions upward on revenue/EPS .
  • Watch FCF conversion: near-zero free cash flow in Q2 reflects elevated capex and non-recurring payments; if conversion normalizes, valuation support improves, but sustained capex/security spend is a risk .
  • Margin path remains constructive: Adjusted EBITDA margin at 22.1% in Q2; management is investing in efficiency and AI automation to expand margins over 2025 despite security and wage pressures .
  • Client concentration rising: largest client mix increased in late 2024, with strong 2025 trajectory; concentration risk is offset by multi-service cross-sell and AI safety exposure .
  • Merger overhang: absence of current guidance reflects take-private process; trading may skew to beats/misses and AI narrative while deal progress and shareholder actions create headline risk .
  • Tactical: Near term, focus on AI-related announcements/partnership deployments and any updates on security investments; medium term, watch service mix shift (Trust & Safety, AI Services) and regional scaling for durability of double-digit growth .
  • Monitor Q3/Q4 seasonality and working-day effects; management flagged predictable sequential patterns that can affect quarterly prints and sentiment .