TaskUs Inc.

03/05/2026 | Press release | Distributed by Public on 03/05/2026 16:31

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included in Part II, Item 8 of this Annual Report on Form 10-K (this "Annual Report"). In addition to historical data, the following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in our forward-looking statements as a result of various factors, including but not limited to those discussed under "Cautionary Note Regarding Forward-Looking Statements" and disclosed or referenced in Part I, Item 1A "Risk Factors" in this Annual Report. The following discussion and analysis also includes a discussion of certain non-GAAP financial measures. For a description and reconciliation of the non-GAAP measures discussed in this section, see "-Non-GAAP Financial Measures" below.
This Annual Report includes certain historical consolidated financial and other data for TaskUs, Inc. ("we," "us," "our" or the "Company"). The following discussion provides a narrative of our financial condition and results of operations for the fiscal year ended December 31, 2025 compared to the fiscal year ended December 31, 2024.A discussion regarding our financial condition and results of operations for the fiscal year ended December 31, 2024 compared to the fiscal year ended December 31, 2023 can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-Kfor the year ended December 31, 2024, as filed with the SEC on March 8, 2024, which is incorporated herein by reference.
Overview
We deliver outsourced digital services that power the companies shaping the future. By combining specialized human talent and intelligent technology, we solve complex operational challenges for global category leaders within AI, autonomous vehicles, robotics, social media, financial services, healthcare, and beyond. We enable our clients to elevate their customer experience, protect their platforms, and grow their brands. As of December 31, 2025, we supported approximately 200 clients.
Our global, omnichannel delivery model is focused on providing our clients three key services - Digital Customer Experience ("Digital CX"), Trust & Safety, and Artificial Intelligence ("AI") Services. 87% of our revenue for the year ended December 31, 2025 was delivered from non-voice, digital channels or omnichannel services which allow us to utilize resources efficiently, thereby driving higher profitability.
We have designed our platform to enable us to rapidly scale and benefit from our clients' growth. We believe our ability to deliver "ridiculously good" outsourcing will enable us to continue growing our client base. We use our strong reputation and expertise serving the digital economy to attract new innovators and enterprise-class brands looking to transform.
At TaskUs, culture is at the heart of everything we do. Many of the companies operating in the digital economy are well-known for their obsession with creating a world-class employee experience. We believe clients choose TaskUs in part because they view our company culture as aligned with their own, which enables us to act as a natural extension of their brands and gives us an advantage in the recruitment of highly engaged frontline teammates who produce better results.
Business Highlights
During 2025, we won 34 new clients and achieved a 36% new client win rate, while increasing the scope of services provided to our current clients, with 67 current clients signing new statements of work. Since returning to revenue growth of 7.6% in 2024, our continuing focus on clients and focused investments in technology and talent has supported an acceleration of revenue growth to 19.0% while increasing our net income margin to 8.6%.
2025 Developments
AI Investments
Certain of our clients, including our largest client, have announced automation initiatives which include significant investments in generative AI. In some cases, TaskUs is supporting these initiatives, which may lead to revenue growth in the near term but may ultimately result in the automation of some services that TaskUs currently provides for these clients. We continue to pursue opportunities to transform our business, and create new, enduring revenue streams, in response to these developments. This includes our partnerships with developers of agentic AI technologies to help our clients seamlessly integrate advanced AI technologies into their customer experience operations. While certain of our clients' initiatives have driven revenue growth in recent quarters, there can be no assurance that our revenue will continue at the same level, or that revenue in other service offerings will not be negatively impacted by our clients' automation investments.
Recent Financial Highlights
For the year ended December 31, 2025, we recorded service revenue of $1,183.5 million, a 19.0% increase from $995.0 million for the year ended December 31, 2024.
For the year ended December 31, 2025, we recorded net income of $102.3 million a 123.0% increase from $45.9 million for the year ended December 31, 2024, due primarily to higher revenue growth and the impact of foreign currency exchange rates, partially offset by higher cost of services. Adjusted Net Income for the year ended December 31, 2025 increased 27.8% to $151.7 million from $118.7 million for the year ended December 31, 2024. Adjusted EBITDA for the year ended December 31, 2025 increased 18.7% to $249.1 million from $209.9 million for the year ended December 31, 2024. For definitions and reconciliations to net income, the most directly comparable measure in accordance with GAAP, see "-Non-GAAP Financial Measures below."
Our operating results in any period are not necessarily indicative of the results that may be expected for any future period.
Subsequent Events
For a description of subsequent events, see Note 17, "Subsequent Events" in the Notes to Consolidated Financial Statements included included in this Annual Report.
Trends and Factors Affecting our Performance
There are a number of key factors and trends affecting our results of operations.
New client wins and growing with our current clients
We won 34 new clients in 2025, and we achieved a 36% new client win rate for every dollar of new client opportunities we pursued. As our clients grow in size and the complexity of their outsourcing needs increases, we believe we have an opportunity to increase the addressable spend available to TaskUs through enhanced penetration of current services as well as cross-selling new services. We continue to see meaningful opportunities from recent industry consolidation as clients diversify their vendor networks. We are focused on capturing a larger share of their demand for specialized services that support and protect their brands. In 2025, 67 current clients signed new statements of work with us. As of December 31, 2025, we supported approximately 200 of the world's leading companies and generated revenue in excess of $1.0 million from 98 of these clients during 2025. We also made progress on our strategic goal of cross-selling our suite of specialized services to our client base, increasing the number of clients using more than one service line by 14% year-over-year to 73 clients.
Expanded service offerings
We watch trends and work closely with current and potential clients to develop offerings that we believe align with our core competencies and present an attractive market opportunity. This approach has earned us the opportunity to support some of the most innovative companies and has enabled significant expansion opportunities with large global enterprises. During 2025, we focused on expanding the following specialized service offerings:
•AI Deployment Management in the Field: Workingwith autonomous vehicle and robotics companies to deploy and manage the performance of AI in real-world production environments.
•AI Safety:Evaluating and fine-tuning Large Language Models, ensuring client deployments remain compliant with evolving international safety standards and ethical guidelines. Providing an integrated approach that addresses the critical 'human-in-the-loop' requirement for developing trustworthy AI while reducing operational risks associated with generative technology for our clients.
•Agentic AI Partnerships: Partnering with agentic AI platform companies to apply agentic AI upfront to automate many simple, repetitive customer service functions, while providing human support from our talented experts.
Expanding geographically
We expanded our presence to 31 sites in 13 countries as of December 31, 2025. During 2025, we significantly increased our Headcount in India, the Philippines and the Rest of World by approximately 3,300 employees, 2,600 employees and 800 employees, respectively. We plan to continue expanding our geographic footprint to drive growth with both existing and new clients, which may result in one-time costs that may impact profitability.
As we enter new geographies and make new capabilities available, clients may elect to move current work with TaskUs from one geography to another to optimize cost or provide additional business continuity to their operations. This allows us to serve our clients better in the long term in most cases and deepens our relationship as we tend to grow and operate over multiple geographies with our larger clients over time as they grow. As of December 31, 2025, we supported 78 clients from more than one geography, a decrease of 6% year-over-year. These changes in geographic mix may result in fluctuations in revenue and cost of service which are driven by the geography in which the work is being performed. These fluctuations align with our business model, which aims to deliver service out of the optimal geography for our clients. These fluctuations might be especially noticeable in a particular service line or geography on a period over period basis.
Cost management and financial flexibility
During the year ended December 31, 2025, we continued to focus on cost management and financial flexibility. We reviewed our cost structure and invested in process and technology improvements in order to drive efficiencies across functions. While we incurred certain costs associated with these activities, including severance in some cases, we believe these actions will have long-term benefits to the goal of enabling our future growth and profitability. These cost management activities enabled us to make investments in growth including resources in sales and marketing, global delivery locations, and the deployment of technologies.
During the year ended December 31, 2025, we generated net cash flow from operating activities of $137.2 million and Free Cash Flow of $73.7 million, respectively, resulting in an increase of cash and cash equivalents of $19.5 million, while reducing our debt. As of December 31, 2025, we had cash and cash equivalents totaling $211.7 million and $190.0 million of borrowing availability under the 2022 Revolving Credit Facility, which we believe positions us well to continue investing in our future growth and profitability.
Hiring and retention of employees
In order to efficiently and effectively provide services to our clients, we must be able to quickly hire, train and retain employees. We offer our employees competitive wages with annual increases and also invest in their well-being. Our employee benefits and employee engagement costs may vary from period to period based on employee participation. We seek to retain sufficient employees to serve our clients' increasing business needs and position ourselves for growth. We believe our focus on employee culture leads to lower employee attrition levels. Apart from driving our high client satisfaction and retention metrics, lower employee attrition leads to lower hiring and training costs and higher employee productivity. The voluntary attrition rate for employees who were employed by TaskUs for more than 180 days was 26.6% for the year ended December 31, 2025.
Key Components of Our Results of Operations
Service Revenue
We derive revenues from the following three service offerings:
•Digital Customer Experience: 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 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.
As these services are delivered, we bill our clients on either time-and-materials, cost-plus, unit-priced, fixed-price, or outcome oriented basis. Service revenue from time-and-materials or cost-plus contracts is recognized as the services are performed. Service revenue from unit-priced contracts is recognized monthly as transactions are processed based on objective measures of output. Service revenue from fixed-price contracts is recognized monthly as service revenue is earned and obligations are fulfilled. Service revenue from outcome oriented contracts is recognized when it is reasonably certain that the desired outcome has been achieved.
Operating expenses
Cost of services
Cost of services consists primarily of costs related to delivery of services, and consists primarily of personnel costs like salaries and wages, stock-based compensation expense and employee welfare. Additionally, cost of services includes expenses related to sites and technology, recruiting, professional development and employee engagement costs that can be directly attributed to the delivery of services.
Selling, general, and administrative
Selling expenses consist of personnel costs, travel expenses, and other expenses for our client services, sales and marketing teams. Additionally, it includes costs of marketing and promotional events, corporate communications, and other brand-building activities.
General and administrative expenses consist of personnel costs and related expenses for technology, human resources, legal, finance, global shared services, and executives as well as professional fees, insurance premiums, cloud-based capabilities and other corporate expenses.
Depreciation
Depreciation is computed on a straight-line basis over the estimated useful life of our property and equipment assets, generally three to five years or, for leasehold improvements, over the term of the lease, whichever is shorter.
Amortization of intangible assets
Amortization of intangible assets relates primarily to our client relationship and trade name intangibles, which are amortized over their useful lives using the straight-line method, which reflects the pattern of benefit, and assumes no residual value.
Other income, net
Other income, net primarily consists of gains and losses resulting from the remeasurement of U.S.-denominated accounts to foreign currency, gains and losses resulting from changes in the fair value of our foreign currency exchange rate forward contracts which are not designated as hedging instruments, as well as interest income.
Financing expenses
Financing expenses primarily consist of interest expenses related to our term loan as well as commitment fees related to the undrawn revolving credit facility.
Provision for income taxes
Provision for income taxes consists primarily of income taxes related to U.S. federal and state income taxes and income taxes in foreign jurisdictions in which we conduct business.
Results of Operations
Comparison of the Years Ended December 31, 2025 and 2024
The following table sets forth certain historical consolidated financial information for the years ended December 31, 2025 and 2024:
Year ended December 31, Period over Period Change
(in thousands) 2025 2024 ($) (%)
Service revenue $ 1,183,547 $ 994,985 $ 188,562 19.0 %
Operating expenses:
Cost of services 736,361 602,898 133,463 22.1 %
Selling, general, and administrative expense 244,888 239,585 5,303 2.2 %
Depreciation 41,164 40,223 941 2.3 %
Amortization of intangible assets 19,983 19,935 48 0.2 %
Loss (gain) on disposal of assets 525 (80) 605 NM
Total operating expenses 1,042,921 902,561 140,360 15.6 %
Operating income 140,626 92,424 48,202 52.2 %
Other income, net (14,433) (3,306) (11,127) 336.6 %
Financing expenses 18,385 21,549 (3,164) (14.7) %
Income before income taxes 136,674 74,181 62,493 84.2 %
Provision for income taxes 34,399 28,311 6,088 21.5 %
Net income $ 102,275 $ 45,870 $ 56,405 123.0 %
NM = not meaningful
Service revenue
Service revenue by service offering
The following table presents the breakdown of our service revenue by service offering for each period:
Year ended December 31, Period over Period Change
(in thousands) 2025 2024 ($) (%)
Digital Customer Experience
$ 661,899 $ 611,837 $ 50,062 8.2 %
Trust & Safety
307,430 248,041 59,389 23.9 %
AI Services
214,218 135,107 79,111 58.6 %
Service revenue
$ 1,183,547 $ 994,985 $ 188,562 19.0 %
Digital Customer Experiencewas primarily driven by an increase from existing clients, including Technology, Healthcare and Financial Services, partially offset by a decrease in On Demand Travel + Transportation. The remaining increase was primarily driven by new clients in Retail + E-Commerce and Technology.
Trust & Safetywas primarily driven by an increase from existing clients, primarily in Social Media, partially offset by a decrease in On Demand Travel + Transportation.
AI Serviceswas primarily driven by an increase from existing clients, primarily in Social Media, as well as On Demand Travel + Transportation.
Service revenue by delivery geography
We deliver our services from multiple locations around the world; however, the majority of our service revenues are derived from contracts that require payment in United States dollars, regardless of whether the clients are located in the United States.
The following table presents the breakdown of our service revenue by geographical location, based on where the services are provided:
Year ended December 31, Period over Period Change
(in thousands) 2025 2024 ($) (%)
Philippines
$ 638,042 $ 563,032 $ 75,010 13.3 %
United States
132,058 117,773 14,285 12.1 %
India 153,766 123,804 29,962 24.2 %
Rest of World
259,681 190,376 69,305 36.4 %
Service revenue
$ 1,183,547 $ 994,985 $ 188,562 19.0 %
Philippines:AI Services contributed 6.3% of the total increase primarily driven by clients in Social Media and On Demand Travel + Transportation. Digital Customer Experience contributed 5.1% of the total increase primarily driven by clients in Technology, Financial Services and Healthcare, partially offset by clients in Retail + E-Commerce and On Demand Travel + Transportation. Trust & Safety contributed 1.9% of the total increase primarily driven by clients in Social Media, partially offset by clients in Financial Services.
United States: AI Services contributed 22.0% of the total increase driven by clients in Social Media and On Demand Travel + Transportation. Trust & Safety contributed 1.5% of the total increase primarily driven by clients in Social Media. Digital Customer Experience reduced 11.4% of the total increase primarily driven by clients in Technology, On Demand Travel + Transportation, Financial Services and Healthcare.
India:Digital Customer Experience contributed 22.9% of the total increase primarily driven by clients in On Demand Travel + Transportation, Retail + E-Commerce, Healthcare, Technology and Professional Services + Industry, partially offset by clients in Financial Services. AI Services contributed 7.6% of the total increase primarily driven by clients in Social Media. Trust & Safety reduced 6.3% of the total increase primarily driven by clients in Social Media and On Demand Travel + Transportation.
Rest of World: Trust & Safety contributed 28.6% of the total increase primarily driven by clients in Social Media and Financial Services. AI Services contributed 4.4% of the total increase primarily driven by clients in Social Media and Entertainment + Gaming. Digital Customer Experience contributed 3.4% of the total increase primarily driven by clients in Technology, Financial Services and Professional Services + Industry, partially offset by clients in On Demand Travel + Transportation and Retail + E-Commerce. Growth in the Rest of World was driven by Latin America and Europe.
Operating expenses
Cost of services
The increase was primarily driven by higher personnel costs of $108.2 million associated with increased headcount and facilities costs associated with site expansion. The remaining increase includes employee engagement and transportation costs. These increases were partially offset by realized gains on cash flow hedges of $4.1 million.
Selling, general, and administrative expense
The increase was primarily driven by transaction costs of $11.9 million and operational efficiency costs of $2.4 million. The remaining increase includes higher employee and client engagement expenses. These increases were partially offset by a reduction of litigation costs of $15.4 million and personnel costs of $1.0 million, including a $11.0 million reduction in stock-based compensation expense.
Loss (gain) on disposal of assets
The change was primarily driven by the write-off of software due to the determination that it would no longer be used in our operations or provide future economic benefit.
Other income, net
Increase is due primarily to higher interest income. This increase was partially offset by changes driven by our exposure to foreign currency exchange risk resulting from our operations in foreign geographies, offset by economic hedges using foreign currency exchange rate forward contracts. See Part II, Item 7A., "Quantitative and Qualitative Disclosures About Market Risk" in this Annual Report for additional information on how foreign currency impacts our financial results.
Financing expense
Changes in financing expense are primarily driven by changes in the rate of SOFR used to calculate the interest rate of our debt, as well as quarterly payments. See "-Liquidity and Capital Resources-Indebtedness-2022 Credit Agreement" for additional information.
Provision for income taxes
Our effective tax rate for the years ended December 31, 2025 and 2024 was 25.2%and 38.2%, respectively. Costs related to the issuance of stock-based compensation, litigation costs, transaction costs, severance and operational efficiency costs within the provision for income taxes calculation are adjusted for Non-GAAP purposes. If those costs are removed, the provision for income taxes would have been $43.6 million and $35.0 million and the effective tax rate would have been 23.9% and 26.4% for the years ended December 31, 2025 and December 31, 2024, respectively.
Revenue by Top Clients
The table below sets forth the percentage of our total service revenue derived from our largest clients for the years ended December 31, 2025 and 2024:
Year ended December 31,
2025 2024
Top ten clients
58 % 56 %
Top twenty clients
71 % 68 %
For the years ended December 31, 2025 and 2024, we generated 26% and 22%, respectively, of our service revenue from our largest client.
Many of our clients are part of the rapidly growing digital economy and they rely on our suite of digital solutions to drive their continued success. For our existing clients, we benefit from our ability to cross sell new solutions and provide service in multiple geographies, further deepening our entrenchment. We continue to identify and target high growth industry verticals and clients. Our strategy is to win new clients and further grow with our existing ones in order to achieve meaningful client and revenue diversification over time.
Foreign Currency
As a global company, we face exposure to movements in foreign currency exchange rates. Fluctuations in foreign currencies impact the amount of total assets, liabilities, revenue, operating expenses and cash flows that we report for our foreign subsidiaries upon the translation of these amounts into U.S. Dollars. See Item 7A., "Quantitative and Qualitative Disclosures About Market Risk" for additional information on how foreign currency impacts our financial results.
Key Operational Metrics
We regularly monitor the below operating metrics in order to measure our current performance and estimate our future performance:
Year ended December 31,
2025 2024
Headcount (approx. at period end)
65,500 59,000
Net revenue retention rate(1)
113 % 102 %
(1)"Net revenue retention rate" is an important metric we calculate annually to measure the retention and growth in the use of our services by our existing clients. Our net revenue retention rate as of a given fiscal year is calculated using a measurement period consisting of the two consecutive fiscal years ending with and including the most recent applicable fiscal year. Next, we define our "base cohort" as the population of clients that were using our services during the entire 12-month period of the first year of the measurement period. Net revenue retention rate is calculated as the quotient obtained by dividing (a) the revenue generated by the base cohort in the second year of measurement by (b) the revenue generated by the base cohort in the first year of measurement.
Non-GAAP Financial Measures
We use Adjusted Net Income, Adjusted Earnings Per Share ("EPS"), EBITDA, Adjusted EBITDA, Free Cash Flow and Conversion of Adjusted EBITDA to Free Cash Flow, as key measures to assess the performance of our business.
Each of the measures are not recognized under accounting principles generally accepted in the United States of America ("GAAP") and do not purport to be an alternative to net income or cash flow as a measure of our performance. Such measures have limitations as analytical tools, and you should not consider any of such measures in isolation or as substitutes for our results as reported under GAAP. Additionally, Adjusted Net Income, Adjusted EPS, EBITDA and Adjusted EBITDA exclude items that can have a significant effect on our profit or loss and should, therefore, be used in conjunction with profit or loss for the period. Our management compensates for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. Because not all companies use identical calculations, these measures may not be comparable to other similarly titled measures of other companies.
Adjusted Net Income
Adjusted Net Income is a non-GAAP profitability measure that represents net income or loss for the period before the impact of amortization of intangible assets and certain items that are considered to hinder comparison of the performance of our business on a period-over-period basis or with other businesses. During the periods presented, we excluded from Adjusted Net Income amortization of intangible assets, transaction costs, operational efficiency costs, the effect of foreign currency gains and losses, gains and losses on disposals of assets, certain severance costs, certain non-recurring litigation costs, stock-based compensation expense and associated employer payroll tax and the related effect on income taxes of certain pre-tax adjustments, which include costs that are required to be expensed in accordance with GAAP. Our management believes that the inclusion of supplementary adjustments to net income applied in presenting Adjusted Net Income are appropriate to provide additional information to investors about certain material non-cash items and about unusual items that we do not expect to continue at the same level in the future.
The following table reconciles net income, the most directly comparable GAAP measure, to Adjusted Net Income for the years ended December 31, 2025 and 2024:
Year ended December 31, Period over Period Change
(in thousands, except %) 2025 2024 ($) (%)
Net income $ 102,275 $ 45,870 $ 56,405 123.0 %
Amortization of intangible assets
19,983 19,935 48 0.2 %
Transaction costs(1)
11,899 - 11,899 100.0 %
Operational efficiency costs(2)
2,383 - 2,383 100.0 %
Foreign currency losses(3)
(8,029) 1,302 (9,331) NM
Loss (gain) on disposal of assets 525 (80) 605 NM
Severance costs(4)
1,515 487 1,028 211.1 %
Litigation costs(5)
- 15,423 (15,423) (100.0) %
Stock-based compensation expense(6)
30,404 42,391 (11,987) (28.3) %
Tax impacts of adjustments(7)
(9,246) (6,644) (2,602) 39.2 %
Adjusted Net Income $ 151,709 $ 118,684 $ 33,025 27.8 %
Net Income Margin(8)
8.6 % 4.6 %
Adjusted Net Income Margin(8)
12.8 % 11.9 %
NM = not meaningful
(1) Represents non-recurring professional service fees related to the take-private transaction that have been expensed during the period.
(2) Represents professional service fees related to certain efforts to enhance efficiency of client delivery and operations support.
(3) Represents the effect of fair market value changes of forward contracts not designated as hedging instruments and remeasurement of U.S. dollar-denominated accounts to foreign currency.
(4) Represents severance payments as a result of certain cost optimization measures we undertook during the period to restructure support roles.
(5) Represents only those litigation costs that are considered non-recurring and outside of the ordinary course of business.
(6) Represents stock-based compensation expense, as well as associated payroll tax.
(7) Represents tax impacts of adjustments to net income which resulted in a tax benefit during the period, including stock-based compensation, transaction costs, operational efficiency costs, litigation costs and severance. After these adjustments, we applied a non-GAAP effective tax rate of 23.9% and 26.4% for the year ended December 31, 2025and 2024, respectively, to non-GAAP income before income taxes.
(8) Net Income Margin represents net income divided by service revenue and Adjusted Net Income Margin represents Adjusted Net Income divided by service revenue.
Adjusted EPS
Adjusted EPS is a non-GAAP profitability measure that represents earnings available to shareholders excluding the impact of certain items that are considered to hinder comparison of the performance of our business on a period-over-period basis or with other businesses. Adjusted EPS is calculated as Adjusted Net Income divided by our diluted weighted-average number of shares outstanding. Our management believes that the inclusion of supplementary adjustments to earnings per share applied in presenting Adjusted EPS are appropriate to provide additional information to investors about certain material non-cash items and about unusual items that we do not expect to continue at the same level in the future.
The following table reconciles GAAP diluted EPS, the most directly comparable GAAP measure, to Adjusted EPS for the years ended December 31, 2025 and 2024:
Year ended December 31,
2025 2024
GAAP diluted EPS $ 1.10 $ 0.50
Per share adjustments to net income(1)
0.53 0.79
Adjusted EPS $ 1.63 $ 1.29
Weighted-average common stock outstanding - diluted 93,025,189 92,304,270
(1) Reflects the aggregate adjustments made to reconcile net income to Adjusted Net Income, as noted in the above table, divided by the GAAP diluted weighted-average number of shares outstanding for the relevant period.
EBITDA and Adjusted EBITDA
EBITDA is a non-GAAP profitability measure that represents net income or loss for the period before the impact of the benefit from or provision for income taxes, financing expenses, depreciation, and amortization of intangible assets. EBITDA eliminates potential differences in performance caused by variations in capital structures (affecting financing expenses), tax positions (such as the availability of net operating losses against which to relieve taxable profits), the cost and age of tangible assets (affecting relative depreciation expense) and the extent to which intangible assets are identifiable (affecting relative amortization expense).
Adjusted EBITDA is a non-GAAP profitability measure that represents EBITDA before certain items that are considered to hinder comparison of the performance of our business on a period-over-period basis or with other businesses. During the periods presented, we excluded from Adjusted EBITDA transaction costs, operational efficiency costs, the effect of foreign currency gains and losses, gains and losses on disposals of assets, certain severance costs, certain non-recurring litigation costs, stock-based compensation expense and associated employer payroll tax and interest income, which include costs that are required to be expensed in accordance with GAAP. Our management believes that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA are appropriate to provide additional information to investors about certain material non-cash items and about unusual items that we do not expect to continue at the same level in the future.
The following table reconciles net income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA for the years ended December 31, 2025 and 2024:
Year ended December 31, Period over Period Change
(in thousands, except %) 2025 2024 ($) (%)
Net income $ 102,275 $ 45,870 $ 56,405 123.0 %
Provision for income taxes 34,399 28,311 6,088 21.5 %
Financing expenses 18,385 21,549 (3,164) (14.7) %
Depreciation 41,164 40,223 941 2.3 %
Amortization of intangible assets 19,983 19,935 48 0.2 %
EBITDA 216,206 155,888 60,318 38.7 %
Transaction costs(1)
11,899 - 11,899 100.0 %
Operational efficiency costs(2)
2,383 - 2,383 100.0 %
Foreign currency losses(3)
(8,029) 1,302 (9,331) NM
Loss (gain) on disposal of assets 525 (80) 605 NM
Severance costs(4)
1,515 487 1,028 211.1 %
Litigation costs(5)
- 15,423 (15,423) (100.0) %
Stock-based compensation expense(6)
30,404 42,391 (11,987) (28.3) %
Interest income(7)
(5,829) (5,544) (285) 5.1 %
Adjusted EBITDA $ 249,074 $ 209,867 $ 39,207 18.7 %
Net Income Margin(8)
8.6 % 4.6 %
Adjusted EBITDA Margin(8)
21.0 % 21.1 %
NM = not meaningful
(1) Represents non-recurring professional service fees related to the take-private transaction that have been expensed during the period.
(2) Represents professional service fees related to certain efforts to enhance efficiency of client delivery and operations support.
(3) Represents the effect of fair market value changes of forward contracts not designated as hedging instruments and remeasurement of U.S. dollar-denominated accounts to foreign currency.
(4) Represents severance payments as a result of certain cost optimization measures we undertook during the period to restructure support roles.
(5) Represents only those litigation costs that are considered non-recurring and outside of the ordinary course of business.
(6) Represents stock-based compensation expense, as well as associated payroll tax.
(7) Represents interest earned on short-term savings, time-deposit and money market funds.
(8) Net Income Margin represents net income divided by service revenue and Adjusted EBITDA Margin represents Adjusted EBITDA divided by service revenue.
Free Cash Flow
Free Cash Flow is a non-GAAP liquidity measure that represents our ability to generate additional cash from our business operations. Free Cash Flow is calculated as net cash provided by operating activities in the period minus cash used for purchase of property and equipment in the period. Our management believes that the inclusion of this non-GAAP measure, when considered with our GAAP results, provides management and investors with an additional understanding of our ability to generate additional cash for ongoing business operations and other capital deployment.
The following table reconciles net cash provided by operating activities, the most directly comparable GAAP measure, to Free Cash Flow for the years ended December 31, 2025 and 2024:
Year ended December 31,
2025 2024
Net cash provided by operating activities $ 137,215 $ 138,888
Purchase of property and equipment (63,500) (39,104)
Free Cash Flow $ 73,715 $ 99,784
Conversion of Adjusted EBITDA to Free Cash Flow(1)
29.6 % 47.5 %
(1) Conversion of Adjusted EBITDA to Free Cash Flow represents Free Cash Flow divided by Adjusted EBITDA.
Liquidity and Capital Resources
As of December 31, 2025, our principal sources of liquidity were cash and cash equivalents totaling $211.7 million, which were held for working capital purposes, as well as the available balance of our 2022 Credit Facilities, described further below. Historically, we have made investments in supporting the growth of our business, which were enabled in part by our positive cash flows from operations during these periods. We expect to continue to make similar investments in the future.
We have financed our operations primarily through cash received from operations. We believe our existing cash and cash equivalents and our 2022 Credit Facilities will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months. Our future capital requirements will depend on several factors, including but not limited to our obligation to repay any amounts outstanding under our 2022 Credit Facilities, our revenue growth rate, timing of client billing and collections, the timing of expansion into new geographies, variability in the cost of delivering services in our geographies, the timing and extent of spending on technology innovation, the extent of our sales and marketing activities, and the introduction of new and enhanced service offerings and the continuing market adoption of our platform.
To the extent additional funds are necessary to meet our long-term liquidity needs as we continue to execute our business strategy, we anticipate that they will be obtained through the incurrence of additional indebtedness, additional equity financings or a combination of these potential sources of funds; however, such financing may not be available on favorable terms, or at all. If we are unable to raise additional funds when desired, our business, financial condition and results of operations could be adversely affected.
Potential investments in, or acquisitions of, complementary businesses, applications or technologies, could reduce our cash and cash equivalents, require us to seek additional equity or debt financing or repatriate cash generated by our international operations that could cause us to incur withholding taxes on any distributions. Additional funds from financing arrangements may not be available on terms favorable to us or at all.
As market conditions warrant, we and certain of our equity holders, including Blackstone and their respective affiliates, may from time to time seek to purchase our outstanding debt securities or loans, including borrowings under our 2022 Credit Facilities, in privately negotiated or open market transactions, by tender offer or otherwise. Subject to any applicable limitations contained in the agreements governing our indebtedness, any purchases made by us may be funded by the use of cash on our balance sheet or the incurrence of new secured or unsecured debt, including borrowings under our credit facilities. The amounts involved in any such purchase transactions, individually or in the aggregate, may be material. Any such purchases may be with respect to a substantial amount of a particular class or series of debt, with the attendant reduction in the trading liquidity of such class or series. In addition, any such purchases made at prices below the "adjusted issue price" (as defined for U.S. federal income tax purposes) may result in taxable cancellation of indebtedness income to us, which amounts may be material, and in related adverse tax consequences to us.
On December 6, 2024, the Company announced a one-year extension of its share repurchase authorization, extending the previously authorized $200.0 million authorization through December 31, 2025. The share repurchase program was initially announced in September 2022 for up to $100.0 million of shares of our Class A common stock and capacity was increased to a total authorization of $200.0 million of shares of our Class A common stock (exclusive of any commissions, fees or excise taxes) in May 2023. During the year ended December 31, 2025, we repurchased 2,112,247 shares of our Class A common stock under the share repurchase program for $27.7 million, which we funded principally with available cash. The share repurchase program expired in accordance with its scheduled terms on December 31, 2025.
Additionally, on February 25, 2026, the Board of Directors declared a special cash dividend of $3.65 per share, or approximately $333.0 million in the aggregate, payable on March 25, 2026. The Company intends to fund the dividend and the repayment of existing debt obligations using proceeds from a refinancing of its credit facilities and cash on the Company's balance sheet.
Indebtedness
As of December 31, 2025, our total indebtedness, net of debt financing fees was $241.4 million.
2022 Credit Agreement
On September 7, 2022, we entered into a credit agreement (the "2022 Credit Agreement") with both new and existing lenders which amended and restated 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 Agreement, to pay related fees and expenses and for general corporate purposes. The Revolving Credit Facility includes a letter of credit sub-facility of up to $15.0 million, and the 2022 Credit Facilities include an uncommitted incremental facility, which, subject to certain conditions, would provide for additional term loan facilities, an increase in commitments under the Term Loan Facility and/or an increase in commitments under the Revolving Credit Facility, in an aggregate amount of up to $268.8 million (which may increase based on LTM Consolidated EBITDA (as defined in the 2022 Credit Agreement)) plus additional amounts based on achievement of a certain consolidated total net leverage ratio.
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. Voluntary principal prepayments are permitted.
The 2022 Revolving Credit Facility provides us with access to a $15.0 million letter of credit facility and a $15.0 million swing line facility, each of which, to the extent used, reduces borrowing availability under the 2022 Revolving Credit Facility. The 2022 Revolving Credit Facility terminates on September 7, 2027. As of December 31, 2025, we had no balance outstanding and $190.0 million of borrowing availability under the 2022 Revolving Credit Facility.
Borrowings under the 2022 Credit Agreement, with the exception of swing line borrowings, bear interest, at our option, either at (i) an adjusted Term Secured Overnight Financing Rate ("SOFR rate") plus a margin of 2.25% per annum, subject to a SOFR rate floor of 0.00% or (ii) an alternative base rate plus a margin of 1.25% per annum, subject to an alternative base rate floor of 1.00%. Any borrowings under the swing line will be subject to the base rate. The 2022 Revolving Credit Facility also requires a commitment fee of 0.40% per annum of undrawn commitments to be paid quarterly in arrears. We have elected to pay interest on borrowings under the 2022 Term Loan Facility based on the SOFR rate. The interest rate in effect for the 2022 Term Loan Facility as of December 31, 2025 was 6.022% per annum.
The 2022 Credit Agreement contains a financial covenant requiring compliance with a maximum total net leverage ratio and certain other covenants, including, among other things, covenants restricting additional borrowings, investments (including acquisitions) and distributions. We were in compliance with all debt covenants as of December 31, 2025. Substantially all assets of our direct wholly owned subsidiary TU MidCo, Inc., its wholly owned subsidiary TU BidCo, Inc. and its material wholly owned domestic subsidiaries are pledged as collateral under the 2022 Credit Agreement, subject to certain customary exceptions.
See Note 8, "Long-Term Debt" in the Notes to Consolidated Financial Statements included in this Annual Report for additional information regarding our debt.
Cash Flows
The following table presents a summary of our consolidated cash flows from operating, investing and financing activities for the periods indicated:
Year ended December 31,
(in thousands) 2025 2024
Net cash provided by operating activities $ 137,215 $ 138,888
Net cash used in investing activities (63,500) (39,104)
Net cash used in financing activities (44,212) (25,176)
Operating Activities
Net cash provided by operating activities for the year ended December 31, 2025 was $137.2 million compared to net cash provided by operating activities of $138.9 million for the year ended December 31, 2024. Net cash provided by operating activities for the year ended December 31, 2025 reflectsnet income of $102.3 million, as well as the add back for non-cash charges totaling $85.8 million, primarily driven by $29.7 million in stock-based compensation expense, $41.5 million of depreciation and $20.0 million of amortization of intangible assets, partially offset by deferred taxes of $7.5 million. These changes were partially offset by changes in operating assets and liabilities of $50.9 million. Net cash provided by operating activities for the year ended December 31, 2024 reflects net income of $45.9 million, as well as the add back for non-cash charges totaling $90.9 million, primarily driven by $41.8 million in stock-based compensation expense, $40.2 million of depreciation and $19.9 million of amortization of intangible assets, partially offset by deferred taxes of $10.9 million. These changes were partially offset by changes in operating assets and liabilities of $2.1 million.
Investing Activities
Net cash used in investing activities for the year ended December 31, 2025 was $63.5 million compared to net cash used in investing activities of $39.1 million for the year ended December 31, 2024. The increase was primarily due to higher site build-out costs as well as purchases of technology and computers to support revenue growth.
Financing Activities
Net cash used in financing activities for the year ended December 31, 2025 was $44.2 million compared to net cash used in financing activities of $25.2 million for the year ended December 31, 2024. The increase was due primarily to the additional shares acquired under our share repurchase program, higher payments on long-term debt and increased payments for taxes related to net share settlement, partially offset by higher proceeds from employee stock plans.
Contractual Obligations
The following table summarizes our contractual obligations as of December 31, 2025:
Payments Due by Period
(in thousands) Total Current Noncurrent
Long-term debt obligations
$ 241,988 $ 21,938 $ 220,050
Operating lease obligations
63,098 22,418 40,680
Technology solution obligations
35,394 18,187 17,207
Total
$ 340,480 $ 62,543 $ 277,937
Technology solution obligations relate mainly to third-party cloud infrastructure agreements and subscription arrangements used to facilitate our operations at the enterprise level. If we fail to meet the minimum user or license commitment during any year, we are required to pay the difference.
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. We have not included any such indemnification provisions in the contractual obligations table above. Historically, we have not experienced significant losses on these types of indemnification obligations.
Critical Accounting Estimates
Our consolidated financial statements and the related notes included elsewhere in this Annual Report are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, provision for income taxes, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Changes in accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from the estimates made by our management. We evaluate our estimates and assumptions on an ongoing basis. To the extent that there are material differences between these estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.
We believe that the following critical accounting policies involve a greater degree of judgment or complexity than our other accounting policies. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.
Recent Accounting Pronouncements
For additional information regarding recent accounting pronouncements adopted and under evaluation, refer to Note 2, "Summary of Significant Accounting Policies" of the Notes to Consolidated Financial Statements.
JOBS Act Accounting Election
We qualify as an emerging growth company pursuant to the provisions of the JOBS Act. The JOBS Act permits an emerging growth company like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to use the extended transition period until we are no longer an emerging growth company or until we choose to affirmatively and irrevocably opt out of the extended transition period. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements applicable to public companies. We will lose our status as an emerging growth company on December 31, 2026, the last day of the fiscal year following the fifth anniversary of our initial public offering. As a result, we will no longer be entitled to take advantage of specified reduced reporting requirements after that date.
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