Executive Summary

Delivered record revenue of $298.7M (+17.0% YoY), Adjusted EBITDA of $63.5M (21.2% margin), GAAP diluted EPS $0.34 and Adjusted EPS $0.42, reflecting solid execution and mix shift toward AI Services .
Beat Wall Street consensus on revenue ($298.7M vs $289.7M*) and EPS ($0.42 vs $0.38*), while EBITDA was below S&P-defined consensus ($63.5M company Adjusted EBITDA vs $64.9M* consensus; definitional differences likely) .
Issued Q4 and FY25 guidance: Q4 revenue $302.4–$304.4M with ~19.8% adj. EBITDA margin; FY25 revenue $1.173–$1.175B, ~21.1% adj. EBITDA margin and ~$100M adj. FCF—above the start-of-year (withdrawn) midpoint of ~$1.11B, effectively a raise .
Management highlighted a strategic pivot to agentic AI consulting and increased AI investments; near-term margin pressure likely from wages in the Philippines, seasonal costs, and growth investments—key catalysts for stock narrative shifts .

What Went Well and What Went Wrong

What Went Well

Robust AI Services momentum: Q3 AI Services revenue rose 60.8% YoY to $58.7M; CEO underscored “record revenue” and industry-leading margins, with plans to “increase investments in Generative AI led transformation services” .
Trust + Safety strength: Revenue grew 19.1% YoY to $75.8M, with Everest Group recognizing TaskUs as a Leader for the third year running, validating service differentiation and wellness programs .
Broad-based demand and client concentration leverage: Top 10/Top 20 cohorts grew >20%; multiple-service-line client revenues rose >20%, showing effective cross-sell, bookings strength across verticals (retail, travel, tech, financials, healthcare) .

What Went Wrong

Margin headwinds and guidance for Q4 compression: Q4 adj. EBITDA margin guided to ~19.8% on seasonal expenses (holiday pay, benefits), minimum wage hikes in the Philippines, and growth investments (new facilities, hiring/training, AI) .
Concentration risk ticked up: Largest client was 27% of Q3 revenue (up from 26% in Q2 and 23% last year), implying sensitivity to that customer’s 2026 budgets and AI adoption cadence .
Free cash flow mixed: Despite strong Q3 conversion (66.1%), year-to-date FCF of $63.8M lagged prior-year YTD ($79.4M), reflecting higher capex amid growth investments and timing of costs .

Financial Results

Quarterly P&L Trend (oldest → newest)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$277.8	$294.1	$298.7
GAAP Diluted EPS ($)	$0.23	$0.22	$0.34
Adjusted EPS ($)	$0.38	$0.43	$0.42
Net Income Margin (%)	7.6%	6.8%	10.5%
Adjusted EBITDA ($USD Millions)	$59.3	$65.0	$63.5
Adjusted EBITDA Margin (%)	21.3%	22.1%	21.2%

Actuals vs Wall Street Consensus (S&P Global) – Q3 2025

Metric	Actual	Consensus	Surprise
Revenue ($USD Millions)	$298.7	$289.7*	+$9.0M; +3.1% (beat)
Primary EPS ($)	$0.42	$0.38*	+$0.04; +10.5% (beat)
EBITDA ($USD Millions)	$63.5 (Adj.)	$64.9*	-$1.4M; -2.2% (miss; definition differences likely)

Values retrieved from S&P Global.*

Segment Breakdown – Q3 2025

Segment	Revenue ($USD Millions)	YoY Growth
Digital Customer Experience (DCX)	$164.2	+5.8%
Trust + Safety	$75.8	+19.1%
AI Services	$58.7	+60.8%

KPIs and Mix – Q3 2025

KPI	Value
Headcount	~63,800 teammates
Largest Client Revenue Mix	27% of total
Top 10 / Top 20 Revenue Mix	60% / 71% of total
Geographic Mix	Philippines 54%, India 13%, US 11%, Rest of World 22%
Q3 FCF ($USD Millions)	$42.0; Conversion 66.1%
Q3 Adjusted FCF ($USD Millions)	$48.0; Conversion 75.6%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	Q4 2025	N/A (no prior quarterly guide)	$302.4–$304.4	New
Adjusted EBITDA Margin (%)	Q4 2025	N/A	~19.8%	New
Revenue ($USD Billions)	FY 2025	~$1.11B midpoint (withdrawn)	$1.173–$1.175	Raised vs start-of-year midpoint
Adjusted EBITDA Margin (%)	FY 2025	N/A	~21.1%	Provided
Adjusted Free Cash Flow ($USD Millions)	FY 2025	N/A	~$100	Provided

Management noted guidance factors: seasonal costs, wage increases in the Philippines, continued investments to support growth and AI transformation .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Agentic AI initiatives	Launched agentic AI consulting; strategic partnerships with Decagon and Regal to transform support (May)	Intensifying investment in agentic AI consulting; signed multiple clients; combining AI agents + human support to address 100% of issues	Accelerating
AI Services growth	Fastest-growing line; >50% YoY growth in Q1–Q2	+60.8% YoY in Q3; project/sprint nature, continued double-digit growth expected into 2026	Strong but lumpy
Trust + Safety	>30% YoY growth in Q1; nearly 30% in Q2; Everest Leader	+19.1% YoY; continued leadership recognition; wellness focus supporting operations	Sustained growth
Macro and cost drivers	No quarterly guide due to merger; ramp investments in facilities	Seasonal Q4 costs, Philippines minimum wage, growth investments drive margin down sequentially	Cost pressure near term
Customer concentration	Scaling largest client late 2024/early 2025	Largest client now 27% of revenue; durable relationship but 2026 growth likely slower vs 2025	Elevated concentration risk
Internal AI efficiency	N/A	Automated recruiting pipeline; record hires per recruiter; broader internal AI automation (quality, workforce mgmt)	Improving efficiency
Capital allocation	N/A	Priority use of cash: AI transformation; net debt expected near zero in Q1; buybacks secondary	Reinvesting for growth
Regulatory/legal	Merger announced May; guidance withdrawn	Special meeting failed to approve; mutual termination; remain public	Deal terminated

Management Commentary

“In the third quarter of 2025, we generated record revenue of $298.7 million… Adjusted EBITDA margins of 21.2%… Looking forward, we plan to increase our investments in Generative AI led transformation services to support our clients in the AI era.” — Bryce Maddock, CEO .
“We expect total revenue for the full year 2025 to range between $1.173 billion and $1.175 billion, with an Adjusted EBITDA margin of approximately 21.1% and Adjusted Free Cash Flow of approximately $100 million.” — Balaji Sekar, CFO .
“The best customer support offering today is a combination of AI agents and human talent… we can address 100% of customer issues at launch while dramatically reducing the cost to serve.” — Bryce Maddock .
“Our adjusted EBITDA margin [Q4]… ~19.8%, which includes the impact of seasonal expenses… minimum wage increases, and continued investments to support our revenue growth and AI transformation.” — Balaji Sekar .

Q&A Highlights

Pipeline and largest customer durability: Strong demand across robotics and autonomous vehicles; largest client remains strong, but 2026 growth unlikely to match 2025 ramp; ongoing budget processes .
Margin philosophy: Will trade near-term margins for long-term growth and margin expansion via AI; investments already in “multiple millions” in 2025 and increasing in 2026 .
Gross vs SG&A dynamics: Gross margins pressured by geography mix (Colombia, Greece), wage and ramp costs; offset by SG&A efficiency and internal AI automation; program delivered millions in savings .
Capital allocation: Priority is aggressive AI transformation investment; expect to be net debt-free in Q1; buybacks secondary to growth .
AI Services sustainability: Double-digit growth expected into 2026 but project-driven lumpiness is typical; Q4 implies deceleration .

Estimates Context

Q3 2025: Revenue $298.7M vs consensus $289.7M* (beat); Adjusted EPS $0.42 vs $0.38* (beat); EBITDA vs S&P-defined consensus $64.9M* shows a miss relative to company Adjusted EBITDA $63.5M, likely due to differing EBITDA definitions .
Analyst count: 6 revenue estimates, 7 EPS estimates for Q3 [GetEstimates].
Q4 and FY25: Consensus revenue estimates ~$303.7M* (Q4) and ~$1.174B* (FY25) align with guidance midpoints; EBITDA consensus ~$59.8M* (Q4) and ~$247.7M* (FY25) broadly consistent with margin outlook [GetEstimates] .
Values retrieved from S&P Global.*

Where estimates may need to adjust: modest margin compression into Q4 (~19.8%) and increased AI investment could temper EBITDA trajectories, while top-line trajectory and sector mix (AI Services, Trust + Safety) support higher revenue frameworks vs early-year expectations .

Key Takeaways for Investors

Narrative shift to agentic AI consulting is the core long-term driver; expect ongoing AI investment disclosures and potential near-term margin trade-offs that can move the stock on updates to adoption and client case studies .
Top-line resilience with record Q3 and Q4 guidance; breadth across verticals and service lines reduces risk, but largest-client exposure at 27% remains a watch item for 2026 comp dynamics .
Seasonal and wage headwinds are transitory; internal AI automation (recruiting, quality, workforce mgmt) offers SG&A offset, supporting structural margin durability over time .
Trust + Safety remains a differentiated moat (Everest Leader status), with wellness programs supporting performance; this segment should underpin steady growth and defend margins .
AI Services growth is strong but lumpy; traders should watch for project ramps/pauses and related revenue cadence—beats more likely on strong sprint activity; misses possible on project timing .
Capital allocation favors growth; net debt projected near zero in Q1; any shift towards buybacks could be incremental upside but is secondary to transformation .
Guidance effectively raised vs start-of-year midpoint; expect consensus revisions to reflect higher FY25 revenue and codified Q4 margin seasonality .

Appendix: Additional Data Tables

Cash Flow Conversion (Q3 2025)

Metric	Q3 2025
Net Cash from Operating Activities ($USD Millions)	$54.3
Free Cash Flow ($USD Millions)	$42.0
Adjusted Free Cash Flow ($USD Millions)	$48.0
Conversion of Adj. EBITDA to FCF (%)	66.1%
Conversion of Adj. EBITDA to Adj. FCF (%)	75.6%

Balance Sheet Highlights

Metric	Sep 30, 2025
Cash & Equivalents ($USD Millions)	$210.0
Total Assets ($USD Millions)	$1,037.4
Total Liabilities ($USD Millions)	$469.8
Shareholders’ Equity ($USD Millions)	$567.5

Non-GAAP Reconciliation Notes

Adjusted EBITDA excludes transaction costs, operational efficiency costs, FX, disposal gains/losses, severance, certain litigation costs, stock-based comp, and interest income; margin defined as Adjusted EBITDA / service revenue .
Adjusted Net Income/EPS similarly exclude amortization of intangibles and the above items, with tax effects applied .

TaskUs, Inc. (TASK)·Q3 2025 Earnings Summary