task-20210930
false00018298642021Q312-31http://fasb.org/us-gaap/2021-01-31#ServiceMember00018298642021-01-012021-09-30xbrli:shares0001829864us-gaap:CommonClassAMember2021-11-080001829864us-gaap:CommonClassBMember2021-11-08iso4217:USD00018298642021-09-3000018298642020-12-31iso4217:USDxbrli:shares0001829864us-gaap:CommonClassAMember2021-09-300001829864us-gaap:CommonClassAMember2020-12-310001829864us-gaap:CommonClassBMember2021-09-300001829864us-gaap:CommonClassBMember2020-12-3100018298642021-07-012021-09-3000018298642020-07-012020-09-3000018298642020-01-012020-09-300001829864us-gaap:CommonClassAMemberus-gaap:CommonStockMember2019-12-310001829864us-gaap:CommonClassBMemberus-gaap:CommonStockMember2019-12-310001829864us-gaap:AdditionalPaidInCapitalMember2019-12-310001829864us-gaap:RetainedEarningsMember2019-12-310001829864us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-3100018298642019-12-310001829864us-gaap:RetainedEarningsMember2020-01-012020-03-3100018298642020-01-012020-03-310001829864us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001829864us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-03-310001829864us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-03-310001829864us-gaap:AdditionalPaidInCapitalMember2020-03-310001829864us-gaap:RetainedEarningsMember2020-03-310001829864us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-3100018298642020-03-310001829864us-gaap:RetainedEarningsMember2020-04-012020-06-3000018298642020-04-012020-06-300001829864us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-012020-06-300001829864us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-06-300001829864us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-06-300001829864us-gaap:AdditionalPaidInCapitalMember2020-06-300001829864us-gaap:RetainedEarningsMember2020-06-300001829864us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-3000018298642020-06-300001829864us-gaap:RetainedEarningsMember2020-07-012020-09-300001829864us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300001829864us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-09-300001829864us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-09-300001829864us-gaap:AdditionalPaidInCapitalMember2020-09-300001829864us-gaap:RetainedEarningsMember2020-09-300001829864us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-3000018298642020-09-300001829864us-gaap:CommonClassAMemberus-gaap:CommonStockMember2020-12-310001829864us-gaap:CommonClassBMemberus-gaap:CommonStockMember2020-12-310001829864us-gaap:AdditionalPaidInCapitalMember2020-12-310001829864us-gaap:RetainedEarningsMember2020-12-310001829864us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001829864us-gaap:RetainedEarningsMember2021-01-012021-03-3100018298642021-01-012021-03-310001829864us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001829864us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-03-310001829864us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-03-310001829864us-gaap:AdditionalPaidInCapitalMember2021-03-310001829864us-gaap:RetainedEarningsMember2021-03-310001829864us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100018298642021-03-310001829864us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-04-012021-06-300001829864us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-3000018298642021-04-012021-06-300001829864us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-04-012021-06-300001829864us-gaap:RetainedEarningsMember2021-04-012021-06-300001829864us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001829864us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-06-300001829864us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-06-300001829864us-gaap:AdditionalPaidInCapitalMember2021-06-300001829864us-gaap:RetainedEarningsMember2021-06-300001829864us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-3000018298642021-06-300001829864us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001829864us-gaap:RetainedEarningsMember2021-07-012021-09-300001829864us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001829864us-gaap:CommonClassAMemberus-gaap:CommonStockMember2021-09-300001829864us-gaap:CommonClassBMemberus-gaap:CommonStockMember2021-09-300001829864us-gaap:AdditionalPaidInCapitalMember2021-09-300001829864us-gaap:RetainedEarningsMember2021-09-300001829864us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-30xbrli:pure00018298642021-06-102021-06-100001829864us-gaap:CustomerConcentrationRiskMembertask:CustomerAMemberus-gaap:RevenueFromContractWithCustomerMember2021-07-012021-09-300001829864us-gaap:CustomerConcentrationRiskMembertask:CustomerAMemberus-gaap:RevenueFromContractWithCustomerMember2020-07-012020-09-300001829864us-gaap:CustomerConcentrationRiskMembertask:CustomerAMemberus-gaap:RevenueFromContractWithCustomerMember2021-01-012021-09-300001829864us-gaap:CustomerConcentrationRiskMembertask:CustomerAMemberus-gaap:RevenueFromContractWithCustomerMember2020-01-012020-09-300001829864task:CustomerBMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2021-07-012021-09-300001829864task:CustomerBMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2020-07-012020-09-300001829864task:CustomerBMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2021-01-012021-09-300001829864task:CustomerBMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RevenueFromContractWithCustomerMember2020-01-012020-09-300001829864us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMembertask:CustomerAMember2021-01-012021-09-300001829864us-gaap:AccountsReceivableMemberus-gaap:CustomerConcentrationRiskMembertask:CustomerAMember2020-01-012020-12-310001829864us-gaap:AccountsReceivableMembertask:CustomerBMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-09-300001829864us-gaap:AccountsReceivableMembertask:CustomerBMemberus-gaap:CustomerConcentrationRiskMember2020-01-012020-12-310001829864task:DigitalCustomerExperienceMember2021-07-012021-09-300001829864task:DigitalCustomerExperienceMember2020-07-012020-09-300001829864task:DigitalCustomerExperienceMember2021-01-012021-09-300001829864task:DigitalCustomerExperienceMember2020-01-012020-09-300001829864task:ContentSecurityMember2021-07-012021-09-300001829864task:ContentSecurityMember2020-07-012020-09-300001829864task:ContentSecurityMember2021-01-012021-09-300001829864task:ContentSecurityMember2020-01-012020-09-300001829864task:AIOperationsMember2021-07-012021-09-300001829864task:AIOperationsMember2020-07-012020-09-300001829864task:AIOperationsMember2021-01-012021-09-300001829864task:AIOperationsMember2020-01-012020-09-300001829864country:PH2021-07-012021-09-300001829864country:PH2020-07-012020-09-300001829864country:PH2021-01-012021-09-300001829864country:PH2020-01-012020-09-300001829864country:US2021-07-012021-09-300001829864country:US2020-07-012020-09-300001829864country:US2021-01-012021-09-300001829864country:US2020-01-012020-09-300001829864task:RestOfWorldMember2021-07-012021-09-300001829864task:RestOfWorldMember2020-07-012020-09-300001829864task:RestOfWorldMember2021-01-012021-09-300001829864task:RestOfWorldMember2020-01-012020-09-300001829864us-gaap:ForeignExchangeForwardMember2021-01-012021-09-300001829864us-gaap:ForeignExchangeForwardMember2021-07-012021-09-300001829864us-gaap:ForeignExchangeForwardMember2020-07-012020-09-300001829864us-gaap:ForeignExchangeForwardMember2020-01-012020-09-300001829864us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeForwardMember2021-07-012021-09-300001829864us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeForwardMember2020-07-012020-09-300001829864us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeForwardMember2021-01-012021-09-300001829864us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:ForeignExchangeForwardMember2020-01-012020-09-300001829864us-gaap:ForeignExchangeForwardMember2021-09-300001829864us-gaap:ForeignExchangeForwardMember2020-12-310001829864us-gaap:OtherNonoperatingIncomeExpenseMember2021-07-012021-09-300001829864us-gaap:OtherNonoperatingIncomeExpenseMember2020-07-012020-09-300001829864us-gaap:OtherNonoperatingIncomeExpenseMember2021-01-012021-09-300001829864us-gaap:OtherNonoperatingIncomeExpenseMember2020-01-012020-09-300001829864us-gaap:ForeignExchangeForwardMemberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001829864us-gaap:ForeignExchangeForwardMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-09-300001829864us-gaap:FairValueInputsLevel2Memberus-gaap:ForeignExchangeForwardMemberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001829864us-gaap:FairValueInputsLevel3Memberus-gaap:ForeignExchangeForwardMemberus-gaap:FairValueMeasurementsRecurringMember2021-09-300001829864us-gaap:ForeignExchangeForwardMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001829864us-gaap:ForeignExchangeForwardMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-12-310001829864us-gaap:FairValueInputsLevel2Memberus-gaap:ForeignExchangeForwardMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001829864us-gaap:FairValueInputsLevel3Memberus-gaap:ForeignExchangeForwardMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001829864us-gaap:LeaseholdImprovementsMember2021-09-300001829864us-gaap:LeaseholdImprovementsMember2020-12-310001829864us-gaap:TechnologyEquipmentMember2021-09-300001829864us-gaap:TechnologyEquipmentMember2020-12-310001829864us-gaap:FurnitureAndFixturesMember2021-09-300001829864us-gaap:FurnitureAndFixturesMember2020-12-310001829864us-gaap:ConstructionInProgressMember2021-09-300001829864us-gaap:ConstructionInProgressMember2020-12-310001829864us-gaap:PropertyPlantAndEquipmentOtherTypesMember2021-09-300001829864us-gaap:PropertyPlantAndEquipmentOtherTypesMember2020-12-310001829864country:PH2021-09-300001829864country:PH2020-12-310001829864country:US2021-09-300001829864country:US2020-12-310001829864task:RestOfWorldMember2021-09-300001829864task:RestOfWorldMember2020-12-310001829864us-gaap:CustomerRelationshipsMember2021-01-012021-09-300001829864us-gaap:CustomerRelationshipsMember2020-01-012020-12-310001829864us-gaap:CustomerRelationshipsMember2021-09-300001829864us-gaap:CustomerRelationshipsMember2020-12-310001829864us-gaap:TradeNamesMember2021-01-012021-09-300001829864us-gaap:TradeNamesMember2020-01-012020-12-310001829864us-gaap:TradeNamesMember2021-09-300001829864us-gaap:TradeNamesMember2020-12-310001829864task:A2019CreditAgreementMemberus-gaap:SecuredDebtMember2021-09-300001829864us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMembertask:A2019CreditAgreementMember2021-09-300001829864task:A2019CreditAgreementMemberus-gaap:SecuredDebtMember2019-09-250001829864us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMembertask:A2019CreditAgreementMember2019-09-250001829864us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMembertask:A2019CreditAgreementMember2021-04-300001829864task:A2019CreditAgreementMember2021-04-300001829864task:DebtInstrumentPaymentPeriodOneMembertask:A2019CreditAgreementMemberus-gaap:SecuredDebtMember2019-09-250001829864task:DebtInstrumentPaymentPeriodTwoMembertask:A2019CreditAgreementMemberus-gaap:SecuredDebtMember2019-09-250001829864task:DebtInstrumentPaymentPeriodThreeMembertask:A2019CreditAgreementMemberus-gaap:SecuredDebtMember2019-09-250001829864task:A2019CreditAgreementMembertask:DebtInstrumentPaymentPeriodFourMemberus-gaap:SecuredDebtMember2019-09-250001829864task:DebtInstrumentPaymentPeriodFiveMembertask:A2019CreditAgreementMemberus-gaap:SecuredDebtMember2019-09-250001829864us-gaap:LineOfCreditMemberus-gaap:LetterOfCreditMembertask:A2019CreditAgreementMember2019-09-250001829864us-gaap:BridgeLoanMemberus-gaap:LineOfCreditMembertask:A2019CreditAgreementMember2019-09-250001829864us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMembertask:A2019CreditAgreementMember2019-09-252019-09-250001829864task:PhantomStockPlanMember2020-12-310001829864task:PhantomStockPlanMember2021-01-012021-09-300001829864task:PhantomStockPlanMember2021-09-300001829864task:A2019StockIncentivePlanMemberus-gaap:EmployeeStockOptionMember2019-04-162019-04-160001829864task:A2021OmnibusIncentivePlanMember2021-06-102021-06-100001829864task:A2021OmnibusIncentivePlanMember2021-06-100001829864us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001829864us-gaap:EmployeeStockOptionMembersrt:MinimumMember2021-01-012021-09-300001829864srt:MaximumMemberus-gaap:EmployeeStockOptionMember2021-01-012021-09-300001829864us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-300001829864us-gaap:RestrictedStockUnitsRSUMember2021-09-300001829864us-gaap:PerformanceSharesMember2021-01-012021-09-300001829864us-gaap:PerformanceSharesMembersrt:MinimumMember2021-01-012021-09-300001829864us-gaap:PerformanceSharesMembersrt:MaximumMember2021-01-012021-09-300001829864us-gaap:PerformanceSharesMember2021-09-300001829864us-gaap:CostOfSalesMember2021-07-012021-09-300001829864us-gaap:CostOfSalesMember2020-07-012020-09-300001829864us-gaap:CostOfSalesMember2021-01-012021-09-300001829864us-gaap:CostOfSalesMember2020-01-012020-09-300001829864us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-07-012021-09-300001829864us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-07-012020-09-300001829864us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-09-300001829864us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-01-012020-09-3000018298642021-04-092021-04-0900018298642021-06-100001829864us-gaap:CommonClassAMember2021-06-100001829864us-gaap:CommonClassBMember2021-06-10task:vote0001829864us-gaap:CommonClassAMember2021-06-102021-06-100001829864us-gaap:CommonClassBMember2021-06-102021-06-100001829864us-gaap:IPOMember2021-06-152021-06-150001829864us-gaap:PrivatePlacementMember2021-06-152021-06-150001829864task:IPOAndPrivatePlacementMember2021-06-150001829864task:PhantomStockPlanMember2021-07-012021-09-300001829864task:CommonStockEquivalentsAntiDilutiveMember2021-07-012021-09-300001829864task:CommonStockEquivalentsAntiDilutiveMember2021-01-012021-09-300001829864task:CommonStockEquivalentsAntidilutivePotentiallyDilutiveSecuritiesMember2021-01-012021-09-300001829864task:TaskUsHoldingsMembertask:BidcoMember2018-10-010001829864task:TaskUsHoldingsMembertask:BidcoMember2018-10-012018-10-010001829864task:SellersOfTaskUsIncMembersrt:AffiliatedEntityMember2020-01-012020-09-300001829864srt:AffiliatedEntityMembertask:BlackstoneCapitalPartnersVIILPAndBlackstoneCapitalPartnersAsiaLPAndBlackstoneManagementPartnersLLCMembertask:SupportAndServicesAgreementMember2020-07-012020-09-300001829864srt:AffiliatedEntityMembertask:BlackstoneCapitalPartnersVIILPAndBlackstoneCapitalPartnersAsiaLPAndBlackstoneManagementPartnersLLCMembertask:SupportAndServicesAgreementMember2020-01-012020-09-300001829864srt:AffiliatedEntityMembertask:AlightIncMembertask:ConsultingServicesAndPromotionalItemsMember2021-07-012021-09-300001829864srt:AffiliatedEntityMembertask:AlightIncMembertask:ConsultingServicesAndPromotionalItemsMember2021-01-012021-09-300001829864srt:AffiliatedEntityMembertask:CustomInkMembertask:ConsultingServicesAndPromotionalItemsMember2021-01-012021-09-300001829864task:MphasisLimitedMembersrt:AffiliatedEntityMembertask:ConsultingServicesAndPromotionalItemsMember2020-01-012020-09-300001829864srt:AffiliatedEntityMembertask:InterestInTaskUsCustomersMembertask:VivintSmartHomeIncMember2021-07-012021-09-300001829864task:NorthAmericanBancardMembersrt:AffiliatedEntityMembertask:InterestInTaskUsCustomersMember2021-07-012021-09-300001829864srt:AffiliatedEntityMembertask:CustomInkMembertask:InterestInTaskUsCustomersMember2021-07-012021-09-300001829864srt:AffiliatedEntityMembertask:InterestInTaskUsCustomersMembertask:VivintSmartHomeIncMember2021-01-012021-09-300001829864task:NorthAmericanBancardMembersrt:AffiliatedEntityMembertask:InterestInTaskUsCustomersMember2021-01-012021-09-300001829864srt:AffiliatedEntityMembertask:CustomInkMembertask:InterestInTaskUsCustomersMember2021-01-012021-09-300001829864srt:AffiliatedEntityMembertask:ConsultingServicesMembertask:ManagementConsultingFirmMember2021-07-012021-09-300001829864srt:AffiliatedEntityMembertask:ConsultingServicesMembertask:ManagementConsultingFirmMember2020-07-012020-09-300001829864srt:AffiliatedEntityMembertask:ConsultingServicesMembertask:ManagementConsultingFirmMember2021-01-012021-09-300001829864srt:AffiliatedEntityMembertask:ConsultingServicesMembertask:ManagementConsultingFirmMember2020-01-012020-09-300001829864task:BlackstoneSecuritiesPartnersLPMembersrt:AffiliatedEntityMembertask:IPOAndPrivatePlacementMembertask:UnderwritingOfPublicOfferingMember2021-06-152021-06-150001829864task:IPOAndPrivatePlacementMember2021-06-152021-06-150001829864us-gaap:PrivatePlacementMemberus-gaap:SubsequentEventMember2021-10-252021-10-250001829864us-gaap:PrivatePlacementMemberus-gaap:SubsequentEventMember2021-10-250001829864task:BlackstoneSecuritiesPartnersLPMembersrt:AffiliatedEntityMemberus-gaap:PrivatePlacementMemberus-gaap:SubsequentEventMembertask:UnderwritingOfPublicOfferingMember2021-10-252021-10-250001829864task:BlackstoneSecuritiesPartnersLPMembersrt:AffiliatedEntityMemberus-gaap:SubsequentEventMemberus-gaap:OverAllotmentOptionMembertask:UnderwritingOfPublicOfferingMember2021-10-252021-10-25
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 10-Q
_______________________
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
or
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from_____________to______________
Commission File Number: 001-40482
_______________________
TaskUs, Inc.
(Exact name of registrant as specified in its charter)
_______________________
Delaware83-1586636
State or other jurisdiction of
incorporation or organization
I.R.S. Employer
Identification No.
1650 Independence Drive, Suite 100
New Braunfels, Texas
78132
Address of principal executive officesZip Code
(888) 400-8275
Registrant’s telephone number, including area code
N/A
Former name, former address and former fiscal year, if changed since last report
_______________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.01 per shareTASKThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filero
 
Non-accelerated filerxSmaller reporting companyo
 
Emerging growth companyx
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of November 8, 2021, the number of shares outstanding of the registrant’s common stock was as follows: Class A common stock, par value $0.01 per share: 27,257,480; Class B common stock, par value $0.01 per share: 70,032,694.


Table of Contents
TASKUS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021
Table of Contents
Page No.


Table of Contents
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which involve certain known and unknown risks and uncertainties. Forward-looking statements include all statements that are not historical facts. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “predicts,” “intends,” “trends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Our actual results or outcomes may differ materially from those anticipated. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. We assume no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Our actual results may differ significantly from any results expressed or implied by any forward-looking statements. A summary of the principal risk factors that might cause our actual results to differ from our forward-looking statements is set forth below. The following is only a summary of the principal risks that may materially adversely affect our business, financial condition and results of operations. This summary should be read in conjunction with the more complete discussion of the risk factors we face, which are set forth under “Risk Factors” in our prospectus dated October 20, 2021 (the "prospectus"), as filed with the Securities and Exchange Commission (the “SEC”) on October 22, 2021 pursuant to Rule 424(b)(4) under the Securities Act, and in this Quarterly Report, as such risk factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Such risks and uncertainties include, but are not limited to, the following:
our business is dependent on key clients, and the loss of a key client could have an adverse effect on our business and results of operations;
a loss of business or non-payment from significant clients could materially affect our results of operations;
we may fail to cost-effectively acquire new, high-growth clients, which would adversely affect our business, financial condition and results of operations;
if we provide inadequate service or cause disruptions in our clients’ businesses or fail to comply with the quality standards required by our clients under our agreements, it could result in significant costs to us, the loss of our clients and damage to our corporate reputation;
unauthorized or improper disclosure of personal or other sensitive information, or security breaches and incidents, whether inadvertent or purposeful, including as the result of a cyber-attack, could result in liability and harm our reputation, each of which could adversely affect our business, financial condition, results of operations and prospects;
because content moderation is a large portion of our business we may be subject to negative publicity or liability or face difficulties retaining and recruiting employees, any of which could have an adverse effect on our reputation, business, financial condition and results of operations;
our failure to detect and deter criminal or fraudulent activities or other misconduct by our employees could result in loss of trust from our clients and negative publicity, which would have an adverse effect on our business and results of operations;
global economic and political conditions, especially in the social media and meal delivery and transport industries from which we generate most of our revenue, could adversely affect our business, results of operations, financial condition and prospects;
our business is heavily dependent upon our international operations, particularly in the Philippines and India, and any disruption to those operations would adversely affect us;
our business is subject to a variety of U.S. and international laws and regulations, including those regarding privacy and data security, and we or our clients may be subject to regulations related to the handling and transfer of certain types of sensitive and confidential information; any failure to comply with applicable privacy and data security laws and regulations could harm our business, results of operations and financial condition;
our business depends in part on our capacity to invest in technology as it develops, and substantial increases in the costs of technology and telecommunications services or our inability to attract and retain the necessary
1

Table of Contents
technologists could have a material adverse effect on our business, financial condition, results of operations and prospects;
our results of operations and ability to grow could be materially affected if we cannot adapt our services and solutions to changes in technology and client expectations;
fluctuations against the U.S. dollar in the local currencies in the countries in which we operate could have a material effect on our results of operations;
our business depends on a strong brand and corporate reputation, and if we are not able to maintain and enhance our brand, our ability to expand our client base will be impaired and our business and operating results will be adversely affected;
competitive pricing pressure may reduce our revenue or gross profits and adversely affect our financial results;
the success of our business depends on our senior management and key employees;
our management team has limited experience managing a public company;
the ongoing COVID-19 pandemic, including the resulting global economic uncertainty and measures taken in response to the pandemic, has adversely impacted our business, financial condition and results of operations, and may continue to do so;
affiliates of The Blackstone Group Inc. and our Co-Founders Bryce Maddock and Jaspar Weir control us and their interests may conflict with ours or yours in the future; and
the dual class structure of our common stock has the effect of concentrating voting control with those stockholders who held our common stock prior to the completion of our initial public offering, and it may depress the trading price of our Class A common stock.
We urge you to carefully consider the foregoing summary together with the risks discussed under “Risk Factors” in the prospectus and in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Quarterly Report.
WEBSITE AND SOCIAL MEDIA DISCLOSURE
We use our website and our social media outlets, such as Facebook, Instagram, Youtube, LinkedIn, and Twitter as channels of distribution of Company information. The information we post through these channels may be deemed material. Financial and other important information regarding the Company is routinely posted on and accessible through the Company’s website at ir.taskus.com, its Facebook page at facebook.com/TaskUs/, its Instagram page at instagram.com/taskus/, its LinkedIn page at linkedin.com/company/taskus/, its YouTube account at youtube.com/c/Taskus/, and its Twitter account at twitter.com/taskus. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting the “Email Alerts” section at of our investor relations website at ir.taskus.com. The contents of our website and social media channels are not, however, a part of this Quarterly Report.
2

Table of Contents
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
TASKUS, INC.
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except share data)
AssetsSeptember 30,
2021
December 31,
2020
Current assets:
Cash$61,330 $107,728 
Accounts receivable, net of allowance for doubtful accounts of $2,931 and $2,294, respectively
157,605 87,782 
Other receivables691 105 
Prepaid expenses8,654 13,032 
Income tax receivable2,232 1,606 
Other current assets2,729 1,051 
Total current assets233,241 211,304 
Noncurrent assets:
Property and equipment, net72,143 56,957 
Deferred tax assets539 585 
Intangibles226,160 240,295 
Goodwill195,735 195,735 
Other noncurrent assets3,714 2,630 
Total noncurrent assets498,291 496,202 
Total assets$731,532 $707,506 
Liabilities and Shareholders’ Equity
Liabilities:
Current liabilities:
Accounts payable and accrued liabilities$44,767 $41,935 
Accrued payroll and employee-related liabilities43,920 21,994 
Current portion of debt49,822 45,984 
Current portion of income tax payable2,152  
Deferred revenue6,847 4,711 
Deferred rent394 218 
Total current liabilities147,902 114,842 
Noncurrent liabilities:
Income tax payable2,988 2,988 
Long-term debt191,039 198,768 
Deferred rent2,735 2,194 
Accrued payroll and employee-related liabilities2,640 2,641 
Deferred tax liabilities41,244 50,936 
Total noncurrent liabilities240,646 257,527 
Total liabilities388,548 372,369 
Commitments and Contingencies (See Note 8)
Shareholders’ equity:
Class A Common stock, $0.01 par value. Authorized 2,500,000,000; 15,180,000 and no shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively
152  
Class B Convertible Common stock, $0.01 par value. Authorized 250,000,000; 82,110,174 and 91,737,020 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively
821 917 
Additional paid-in capital539,060 398,202 
Accumulated deficit(195,198)(67,398)
Accumulated other comprehensive income (loss)(1,851)3,416 
Total shareholders’ equity342,984 335,137 
Total liabilities and shareholders’ equity$731,532 $707,506 
See accompanying notes to unaudited condensed consolidated financial statements.
3

Table of Contents
TASKUS, INC.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except share and per share data)
Three months ended September 30,Nine months ended September 30,
2021202020212020
Service revenue$201,053 $122,425 $533,946 $339,254 
Operating expenses:
Cost of services112,423 65,378 304,251 191,296 
Selling, general, and administrative expense60,342 32,190 269,650 83,630 
Depreciation7,422 3,696 20,354 14,225 
Amortization of intangible assets4,711 4,711 14,135 14,135 
Loss on disposal of assets26 155 54 150 
Contingent consideration   3,570 
Total operating expenses184,924 106,130 608,444 307,006 
Operating income (loss)16,129 16,295 (74,498)32,248 
Other expense1,204 628 299 888 
Financing expenses1,633 1,647 4,808 5,849 
Income (loss) before income taxes13,292 14,020 (79,605)25,511 
Provision for (benefit from) income taxes1,656 2,564 (1,805)4,532 
Net income (loss)$11,636 $11,456 $(77,800)$20,979 
Net income (loss) per common share:
Basic$0.12 $0.12 $(0.83)$0.23 
Diluted$0.11 $0.12 $(0.83)$0.23 
Weighted-average number of common shares outstanding:
Basic97,290,174 91,737,020 93,994,896 91,737,020 
Diluted109,426,011 91,737,020 93,994,896 91,737,020 
See accompanying notes to unaudited condensed consolidated financial statements.
4

Table of Contents
TASKUS, INC.
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
Three months ended September 30,Nine months ended September 30,
2021202020212020
Net income (loss)$11,636 $11,456 $(77,800)$20,979 
Retirement benefit reserves37 4 29 6 
Foreign currency translation adjustments(3,957)1,695 (5,296)2,702 
Comprehensive income (loss)$7,716 $13,155 $(83,067)$23,687 
See accompanying notes to unaudited condensed consolidated financial statements.
5

Table of Contents
TASKUS, INC.
Unaudited Condensed Consolidated Statements of Shareholders’ Equity
(in thousands, except share data)
Capital stock and additional paid-in capitalAccumulated
deficit
Accumulated
other
comprehensive
income
Total
shareholders’
equity
Class A Common stockClass B Common stockAdditional
paid-in
capital
SharesAmountSharesAmount
Balance as of December 31, 2019
 $ 91,737,020 $917 $398,202 $(101,931)$312 $297,500 
Net income— — — — — 1,515 — 1,515 
Other comprehensive loss— — — — — — (224)(224)
Balance as of March 31, 2020
 $ 91,737,020 $917 $398,202 $(100,416)$88 $298,791 
Net income— — — — — 8,008 — 8,008 
Other comprehensive income— — — — — — 1,233 1,233 
Balance as of June 30, 2020
 $ 91,737,020 $917 $398,202 $(92,408)$1,321 $308,032 
Net income— — — — — 11,456 — 11,456 
Other comprehensive income— — — — — — 1,699 1,699 
Balance as of September 30, 2020
 $ 91,737,020 $917 $398,202 $(80,952)$3,020 $321,187 
Capital stock and additional paid-in capitalAccumulated
deficit
Accumulated
other
comprehensive
income (loss)
Total
shareholders’
equity
Class A Common stockClass B Common stockAdditional
paid-in
capital
SharesAmountSharesAmount
Balance as of December 31, 2020
 $ 91,737,020 $917 $398,202 $(67,398)$3,416 $335,137 
Net income— — — — — 16,507 — 16,507 
Other comprehensive loss— — — — — — (855)(855)
Balance as of March 31, 2021
 $ 91,737,020 $917 $398,202 $(50,891)$2,561 $350,789 
Issuance on Class A Common stock in the initial public offering primary offering, net of underwriters’ fees and offering costs5,553,154 56 — — 115,844 — — 115,900 
Conversion of Class B Common stock9,626,846 96 (9,626,846)(96)— — —  
Stock-based compensation expense— — — — 5,771 — — 5,771 
Distribution of dividends ($0.55 per share)
— — — — — (50,000)— (50,000)
Net loss— — — — — (105,943)— (105,943)
Other comprehensive loss— — — — — — (492)(492)
Balance as of June 30, 2021
15,180,000 $152 82,110,174 $821 $519,817 $(206,834)$2,069 $316,025 
Stock-based compensation expense— — — — 19,243 — — 19,243 
Net income— — — — — 11,636 — 11,636 
Other comprehensive loss— — — — — — (3,920)(3,920)
Balance as of September 30, 2021
15,180,000 $152 82,110,174 $821 $539,060 $(195,198)$(1,851)$342,984 
See accompanying notes to unaudited condensed consolidated financial statements.
6

Table of Contents
TASKUS, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Nine months ended September 30,
20212020
Cash flows from operating activities:
Net income (loss)$(77,800)$20,979 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation20,354 14,220 
Amortization of intangibles14,135 14,135 
Amortization of debt financing fees387 343 
Loss on disposal of assets54 150 
Provision for losses on accounts receivable705 2,229 
Unrealized foreign exchange losses on forward contracts5,831 1,339 
Deferred taxes(9,692)(2,876)
Stock-based compensation expense25,014  
Changes in operating assets and liabilities:
Accounts receivable(70,560)(25,445)
Other receivables, prepaid expenses, and other current assets(4,753)(10)
Other noncurrent assets(1,211)(397)
Accounts payable and accrued liabilities4,793 9,326 
Accrued payroll and employee-related liabilities24,524 12,788 
Income tax payable1,820 (3,343)
Deferred revenue2,139 1,722 
Deferred rent834 469 
Net cash provided by (used in) operating activities(63,426)45,629 
Cash flows from investing activities:
Purchase of property and equipment(38,603)(21,886)
Net cash used in investing activities(38,603)(21,886)
Cash flows from financing activities:
Proceeds from borrowing, Revolving credit facility 39,878 
Payments on long-term debt(3,938)(1,575)
Payments for debt financing fees(340) 
Proceeds from issuance of common stock, net of underwriters’ fees120,698  
Payments for offering costs(4,327) 
Distribution of dividends(50,000) 
Net cash provided by financing activities62,093 38,303 
Increase (decrease) in cash and cash equivalents(39,936)62,046 
Effect of exchange rate changes on cash(6,462)2,720 
Cash and cash equivalents at beginning of period107,728 37,541 
Cash and cash equivalents at end of period$61,330 $102,307 
See accompanying notes to unaudited condensed consolidated financial statements.
7

Table of Contents
TASKUS, INC.
Notes to Unaudited Condensed Consolidated
Financial Statements
1. Description of Business and Organization
TaskUs, Inc. (formerly known as TU TopCo, Inc.) (“TaskUs” and, together with its subsidiaries, the “Company,” “we,” “us” or “our”) was formed by investment funds affiliated with Blackstone Inc. (“Blackstone”) as a vehicle for the acquisition of TaskUs Holdings, Inc. (formerly known as TaskUs, Inc.) (“TaskUs Holdings”) on October 1, 2018 (the “Blackstone Acquisition”). Prior to the Blackstone Acquisition, TaskUs had no operations and TaskUs Holdings operated as a standalone entity.
In connection with the Company’s June 2021 initial public offering (“IPO”), on June 10, 2021, the Company amended and restated its certificate of incorporation to effect a ten-for-one forward stock split of its outstanding common stock and authorized two classes of ownership interests. See Note 11, “Shareholders’ Equity” for additional information.
We are a digital outsourcer focused on serving high-growth technology companies to represent, protect and grow their brands. Our global, omni-channel delivery model is focused on Digital Customer Experience, Content Security and artificial intelligence (“AI”) Operations. We have designed our platform to enable us to rapidly scale and benefit from our clients’ growth. Through our agile and responsive operational model, we deliver services from multiple delivery sites that span globally from the United States, Philippines, and other parts of the world.
The Company’s major service offerings are described in more detail below:
Digital Customer Experience: Principally consists of omni-channel customer care services primarily delivered through digital (non-voice) channels.
Content Security: Principally consists of review and disposition of user and advertiser generated content for purposes which include removal or labeling of policy violating, offensive or misleading content.
AI Operations: Principally consists of data labeling, annotation and transcription services performed for the purpose of training and tuning AI algorithms through the process of machine learning.
2. Summary of Significant Accounting Policies
(a) Basis of Presentation
The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Our prospectus dated October 20, 2021 (the "prospectus"), as filed with the Securities and Exchange Commission (the “SEC”) on October 22, 2021, includes a discussion of the significant accounting policies used in the preparation of our consolidated financial statements. There were no material changes to our significant accounting policies during the nine months ended September 30, 2021.
These unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with US GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by US GAAP for complete financial statements and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2020 included in our prospectus. In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2021 and its results of operations, comprehensive income (loss) and shareholders’ equity for the three and nine months ended September 30, 2021 and 2020, and cash flows for the nine months ended September 30, 2021 and 2020. The condensed consolidated balance sheet as of December 31, 2020, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.
The accompanying financial statements and related notes to the financial statements give retroactive effect to the stock split for all periods presented. See Note 11, “Shareholders’ Equity” for additional information.
(b) Use of Estimates
The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the determination of useful lives and impairment of fixed assets; allowances for doubtful accounts and other
8

Table of Contents
receivables; the valuation of deferred tax assets; valuation of forward contracts receivable; valuation of stock-based compensation; valuation and impairment of intangibles and goodwill and reserves for income tax uncertainties and other contingencies. As of September 30, 2021, the impact of the novel coronavirus (“COVID-19”) pandemic, including as a result of new strains and variants of the virus and uncertainty of acceptance of vaccines and their effectiveness, continues to unfold. As a result, many of our estimates and assumptions required increased judgement and carry a higher degree of variability and volatility. We continue to closely monitor the outbreak and the impact on our operations and liquidity. As events continue to evolve and additional information becomes available, our estimates may change materially in the future.
(c) Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company has no involvement with variable interest entities.
(d) Concentration Risk
Most of the Company’s customers are located in the United States. Customers outside of the United States are concentrated in Europe and Canada.
For the three and nine months ended September 30, 2021 and 2020, the following customers represented greater than 10% of the Company’s service revenue:
CustomerService revenue percentage
Three months ended September 30,Nine months ended September 30,
2021202020212020
A27 %33 %27 %33 %
B11 %11 %11 %13 %
As of September 30, 2021 and December 31, 2020, the following customers represented greater than 10% of the Company’s accounts receivable:
Accounts receivable percentage
CustomerSeptember 30, 2021December 31, 2020
A26 %22 %
B13 %16 %
The Company’s principal operations, including the majority of its employees and the fixed assets owned by its wholly owned subsidiaries, are located in the Philippines.
(e) Recent Accounting Pronouncements
The Company currently qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Accordingly, the Company is provided the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. The Company has elected to adopt new or revised accounting guidance within the same time period as private companies.
Recently adopted accounting pronouncements
In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 was issued as a means to reduce the complexity of accounting for income taxes for those entities that fall within the scope of the accounting standard. The guidance is to be applied using a prospective method, excluding amendments related to franchise taxes, which should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company adopted this standard in the first quarter of 2021; the adoption did not have a material impact on its consolidated financial statements.
Recently issued accounting pronouncements
In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes FASB Accounting Standards Codification ("ASC"), Leases (Topic 840). The standard is intended to increase the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. In June 2020, the FASB postponed the effective date for ASC 842 for private companies. This ASU will be
9

Table of Contents
effective for the Company beginning in fiscal year 2022, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2016-02 on the Company’s consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The revised standard relates to measurement of credit losses on financial instruments, and requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The guidance replaces the incurred loss model with an expected loss model referred to as current expected credit loss ("CECL"). The CECL model requires us to measure lifetime expected credit losses for financial instruments held at the reporting date using historical experience, current conditions and reasonable supportable forecasts. The guidance expands the disclosure requirements regarding an entity’s assumptions, models, and methods for estimating credit losses and requires new disclosures of the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. This ASU will be effective for the Company beginning in fiscal year 2023 with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2016-13 on the Company’s consolidated financial statements.
In August 2018, The FASB issued ASU 2018-15, IntangiblesGoodwill and Other—Internal-Use Software (Subtopic 350-40). The standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The amendments in this ASU require (i) costs for implementation activities to be capitalized in the statement of financial position in the same line item that a prepayment for the fees of the associated hosting arrangement would be presented, (ii) expense related to the capitalized implementation costs be presented in the same line item in the statement of income as the fees associated with the hosting element (service) of the arrangement and (iii) payments for capitalized implementation costs be presented in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. The guidance should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company intends to adopt this standard, on a prospective basis, for the fiscal year ending December 31, 2021 and interim periods during the fiscal year ending December 31, 2022. The Company is currently evaluating the impact of adopting ASU 2018-15 on the Company's consolidated financial statements.
3. Revenue
Disaggregation of Revenue
Our revenues are derived from contracts with customers related to business outsourcing services that we provide. The following table presents the breakdown of the Company’s revenues by service offering:
Three months ended September 30,Nine months ended September 30,
(in thousands)2021202020212020
Digital Customer Experience$125,310 $76,255 $338,587 $212,817 
Content Security45,376 33,787 124,498 91,401 
AI Operations30,367 12,383 70,861 35,036 
Service revenue$201,053 $122,425 $533,946 $339,254 
The majority of the Company’s revenues are derived from contracts with customers who are located in the United States. However, we deliver our services from geographies outside of the United States. The following table presents the breakdown of the Company’s revenues by geographical location, based on where the services are provided from:
Three months ended September 30,Nine months ended September 30,
(in thousands)2021202020212020
Philippines$103,837 $69,369 $284,096 $188,085 
United States65,866 42,761 175,553 126,835 
Rest of World31,350 10,295 74,297 24,334 
Service revenue$201,053 $122,425 $533,946 $339,254 
Contract Balances
Accounts receivable, net of allowance for doubtful accounts includes $67.6 million and $47.4 million of unbilled revenues as of September 30, 2021 and December 31, 2020, respectively.
10

Table of Contents
4. Forward Contracts
The Company transacts business in various foreign currencies and has international sales and expenses denominated in foreign currencies, subjecting the Company to foreign currency exchange rate risk. During 2021 and 2020, the Company entered into foreign currency exchange rate forward contracts, with a commercial bank as the counterparty, with maturities of generally 12 months or less, to reduce the volatility of cash flows primarily related to forecasted costs denominated in Philippine pesos. In addition, the Company utilizes foreign currency exchange rate contracts to mitigate foreign currency exchange rate risk associated with foreign currency-denominated assets and liabilities, primarily intercompany balances. The Company does not use foreign currency exchange rate contracts for trading purposes. The exchange rate forward contracts entered into by the Company are not designated as hedging instruments. Any gains or losses resulting from changes in the fair value of these contracts are recognized in other expense in the consolidated statements of operations.
For the three months ended September 30, 2021 and 2020, the Company settled forward contracts with total notional amounts of approximately $31.8 million and $26.0 million, respectively, and for the nine months ended September 30, 2021 and 2020, the Company settled forward contracts with total notional amounts of approximately $77.4 million and $62.0 million, respectively. For the three months ended September 30, 2021 and 2020, realized losses (gains) of approximately $0.7 million and $(1.9) million, respectively, resulting from the settlement of forward contracts were included within other expense. For the nine months ended September 30, 2021 and 2020, realized gains of approximately $0.6 million and $3.5 million, respectively, resulting from the settlement of forward contracts were included within other expense.
As of September 30, 2021 and December 31, 2020, the Company had outstanding forward contracts with notional amounts of approximately $116.6 million and $109.2 million, respectively. The forward contract receivable (payable) resulting from changes in fair value was recorded under prepaid expenses (accounts payable and accrued liabilities). For the three months ended September 30, 2021 and 2020, the unrealized losses on the forward contracts of $4.1 million and $1.2 million, respectively, were included within other expense. For the nine months ended September 30, 2021 and 2020, the unrealized losses on the forward contracts of $5.8 million and $1.3 million, respectively, were included within other expense.
By entering into derivative contracts, the Company is exposed to counterparty credit risk, or the failure of the counterparty to perform under the terms of the derivative contract. For the periods presented, the non-performance risk of the Company and the counterparties did not have a material impact on the fair value of the derivative instruments.
The Company has implemented the fair value accounting standard for those assets and liabilities that are re-measured and reported at fair value at each reporting period. This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value based on inputs used, and requires additional disclosures about fair value measurements. This standard applies to fair value measurements already required or permitted by existing standards.
In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset and include situations where there is little, if any, market activity for the asset.
The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2021 and December 31, 2020 and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value:
Fair value measurements using
(in thousands)September 30,
2021
Level 1
inputs
Level 2
inputs
Level 3
inputs
Forward contracts payable$4,051 $ $4,051 $ 
Fair value measurements using
(in thousands)December 31,
2020
Level 1
inputs
Level 2
inputs
Level 3
inputs
Forward contracts receivable$1,780 $ $1,780 $ 
The Company’s derivatives are carried at fair value using various pricing models that incorporate observable market inputs, such as interest rate yield curves and currency rates, which are Level 2 inputs. Derivative valuations incorporate credit risk adjustments that are necessary to reflect the probability of default by the counterparty or by the Company.
11

Table of Contents
5. Property and Equipment, net
The components of property and equipment, net as of September 30, 2021 and December 31, 2020 were as follows:
(in thousands)September 30,
2021
December 31,
2020
Leasehold improvements$32,902 $31,654 
Technology and computers68,589 47,572 
Furniture and fixtures4,000 4,203 
Construction in process14,480 5,194 
Other property and equipment7,059 5,995 
Property and equipment, gross127,030 94,618 
Accumulated depreciation(54,887)(37,661)
Property and equipment, net$72,143 $56,957 
The Company’s principal operations are in the Philippines where the majority of property and equipment resides under its wholly owned subsidiaries. The table below presents the Company’s total property and equipment by geographic location as of September 30, 2021 and December 31, 2020:
(in thousands)September 30,
2021
December 31,
2020
Philippines$44,432 $37,823 
United States11,077 8,983 
Rest of World16,634 10,151 
Property and equipment, net$72,143 $56,957 
6. Goodwill and Intangibles
The carrying amount of goodwill as of September 30, 2021 and December 31, 2020 was $195.7 million.
The components of intangible assets as of September 30, 2021 and December 31, 2020 were as follows:
September 30, 2021December 31, 2020
(in thousands)Life
(Years)
Intangibles,
Gross
Accumulated
Amortization
Intangibles,
Net
Intangibles,
Gross
Accumulated
Amortization
Intangibles,
Net
Customer relationships15$240,800 $(48,161)$192,639 $240,800 $(36,121)$204,679 
Trade name1541,900 (8,379)33,521 41,900 (6,284)35,616 
Total$282,700 $(56,540)$226,160 $282,700 $(42,405)$240,295 
7. Long-Term Debt
The balances of current and non-current portions of debt consist of the following as of September 30, 2021:
(in thousands)CurrentNoncurrentTotal
Term Loan$10,500 $192,150 $202,650 
Revolver39,878  39,878 
Less: Debt financing fees(556)(1,111)(1,667)
Total$49,822 $191,039 $240,861 
2019 Credit Agreement
On September 25, 2019, the Company entered into a credit agreement (the “2019 Credit Agreement”) that included a $210.0 million term loan (the “Term Loan Facility”) and a $40.0 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “2019 Credit Facilities”). On April 30, 2021, the Company entered into Amendment No. 1 to its 2019 Credit Agreement with the existing lenders providing for $50.0 million incremental revolving credit commitments on the same terms as our existing revolving credit facility. We accounted for this amendment as a debt modification and recorded $0.3 million of debt financing fees which will be amortized, along with previously deferred fees, over the remaining term of the Revolving Credit Facility.
12

Table of Contents
Principal payments on the Term Loan Facility are due quarterly in arrears equal to installments in an aggregate annual amount equal to (i) 1.0% per annum of the original principal amount in the first year, (ii) 2.5% per annum of the original principal amount in the second year, (iii) 5.0% per annum of the original principal amount in the third year, (iv) 7.5% per annum of the original principal amount in the fourth year and (v) 10.0% per annum of the original principal amount in the fifth year, with the remaining principal due in a lump sum at the maturity date of September 25, 2024. The interest rate in effect with respect to the Term Loan Facility as of September 30, 2021 was 2.334% per annum.
The Revolving Credit Facility provides the Company with access to a $15.0 million letter of credit facility and a $5.0 million swing line facility, each of which, to the extent used, reduces borrowing availability under the Revolving Credit Facility. The Revolving Credit Facility expires on September 25, 2024, and requires a commitment fee of 0.4% on undrawn commitments paid quarterly in arrears. As of September 30, 2021, the interest rate in effect was 2.334% on outstanding borrowings under the Revolving Credit Facility. As of September 30, 2021, we had $50.1 million of borrowing availability under the Revolving Credit Facility.
The 2019 Credit Agreement contains certain restrictive financial covenants and also limits additional borrowings, capital expenditures, and distributions. The Company was in compliance with these covenants as of September 30, 2021. Substantially all assets of the Company's direct wholly owned subsidiary TU Midco, Inc. and its material domestic subsidiaries are pledged as collateral under this agreement, subject to certain customary exceptions.
8. Commitments and Contingencies
From time to time, the Company may become subject to legal proceedings, claims, and litigation arising in the ordinary course of business. The Company is not currently a party to any material legal proceedings, nor is the Company aware of any pending or threatened litigation that would have a material adverse effect on the Company’s business, operating results, cash flows, or financial condition should such litigation be resolved unfavorably.
9. Employee Compensation
Phantom Stock Plan
On June 19, 2015, TaskUs Holdings’ board of directors officially adopted a company-wide phantom stock plan and related phantom share agreements. There were 6,514,360 outstanding phantom shares as of December 31, 2020. There were 1,399,470 phantom shares forfeited during the nine months ended September 30, 2021. Because the change in control became probable upon the IPO, the Company recognized expense in the amount of the cash settlement totaling $127.5 million recorded in selling, general, and administrative expense on the condensed consolidated statements of operations for the nine months ended September 30, 2021. As of September 30, 2021 there were no phantom shares outstanding.
2019 Stock Incentive Plan
On April 16, 2019, the Company established an equity incentive plan pursuant to which the Company has granted option awards to selected executives and other key employees (the “2019 Plan”). The stock options contain service, market and performance conditions. Stock options under this plan contingently vest over a period of two years in the event of a change in control and over a period of three years in the event of an IPO (each as defined in such plan), with the vesting period beginning on the date of the performance event so long as the holder remains employed. The amount of options eligible for vesting is contingent upon Blackstone’s return on invested capital in the Company. These options have contractual lives of 10 years. Following the IPO and establishment of the Company's 2021 Omnibus Incentive Plan (the “2021 Plan”) as further discussed below, it is not expected that any additional awards will be issued under the 2019 Plan.
At the date of the IPO, the Company concluded that the public offering represented a qualifying liquidity event that would cause the stock option’s performance condition to be probable of occurring. As such, the Company has begun to recognize compensation expense in relation to the stock options issued under the 2019 Plan.
2021 Omnibus Incentive Plan
In connection with the IPO, the Company adopted the 2021 Plan, which provides for the issuance of non-qualified stock options, incentive stock options, stock appreciation rights (“SARs”), restricted shares of Class A common stock, restricted stock units (“RSUs”), or other equity-based or cash-based awards. The Company initially granted 6,614,122 awards to its founders and reserved an additional 12,160,929 shares of Class A common stock for issuance under the 2021 Plan, subject to automatic annual evergreen increases.
13

Table of Contents
Stock Options
During the nine months ended September 30, 2021, the Company granted 2,265,146 stock options to its founders and certain officers and employees with a weighted-average grant date fair value of $9.34. The stock options are subject to service-based vesting conditions and generally vest quarterly or annually over four years and expire 10 years from the date of the grant. The grant date fair value of the stock options was estimated using the Black-Scholes option pricing method with the following assumptions:
Dividend yield (%)0 %
Expected volatility (%)
32-35%
Risk-free interest rate (%)
0.8-1.3%
Expected term (years)
5.1-7.0
As of September 30, 2021, there were 9,744,028 stock options outstanding with a weighted-average exercise price of $10.06 per share. As of September 30, 2021, there was $22.3 million of unrecognized compensation expense related to the Company’s unvested stock options that is expected to be recognized over a weighted-average period of 2.4 years.
RSUs
During the nine months ended September 30, 2021, the Company granted 4,277,543 RSUs to its founders and certain officers and employees with a weighted-average grant date fair value of $27.23. The RSUs are typically subject to service-based vesting conditions and generally vest quarterly or annually over four years. As of September 30, 2021, there was $98.9 million of unrecognized compensation expense related to the Company’s unvested RSUs that is expected to be recognized over a weighted-average period of 2.4 years.
PSUs
During the nine months ended September 30, 2021, the Company granted 3,373,417 PSUs to its founders a certain officer with a weighted-average grant date fair value of $4.02. The majority of the PSUs vest contingently in annual installments over four years subject to continued service and the achievement of certain enterprise value compound annual growth rate ("CAGR") targets. The remaining PSUs vest contingently in four years subject to continued service and the achievement of certain market capitalization CAGR targets. The grant date fair value of the PSUs were estimated using the Monte Carlo simulation method with the following assumptions:
Dividend yield (%)0 %
Expected volatility (%)40 %
Risk-free interest rate (%)
0.1-0.6 %
As of September 30, 2021, there was $11.7 million of unrecognized compensation expense related to the Company’s unvested PSUs that is expected to be recognized over a weighted-average period of 2.7 years.
Stock-Based Compensation Expense
We recognize stock-based compensation expense for all awards using a graded vesting method. The following table summarizes the components of stock-based compensation expense recognized for the periods presented:
Three months ended September 30,Nine months ended September 30,
(in thousands)2021202020212020
Cost of services$451 $ $502 $ 
Selling, general, and administrative expense18,792  152,008  
Total$19,243 $ $152,510 $ 
10. Income Taxes
In determining its interim provision for income taxes, the Company used an estimated annual effective tax rate, which is based on expected income before taxes, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates. Certain significant or unusual items are separately recognized in the period in which they occur and can be a source of variability in the effective tax rate from quarter to quarter.
The Company recorded provision for income taxes of $1.7 million and $2.6 million in the three months ended September 30, 2021 and 2020, respectively. The effective tax rate was 12.5% and 18.3% for the three months ended September 30, 2021 and 2020, respectively.
14

Table of Contents
The Company recorded provision for (benefit from) income taxes of $(1.8) million and $4.5 million in the nine months ended September 30, 2021 and 2020, respectively. The effective tax rate was 2.3% and 17.8% for the nine months ended September 30, 2021 and 2020. The difference between the effective tax rates and the 21% federal statutory rate in the nine months ended September 30, 2021 was primarily due to global intangible low-taxed income (“GILTI”) inclusion, tax benefits of income tax holidays in foreign jurisdiction, nondeductible transaction costs and nondeductible compensation of officers. The difference between the effective tax rates and the 21% federal statutory rate in the nine months ended September 30, 2020 was primarily due to GILTI inclusion, foreign-derived intangible income ("FDII") deduction and tax benefits of income tax holidays in foreign jurisdiction.
The Company is subject to income tax in the United States federal, state and various foreign jurisdictions. Federal income tax returns of the Company are subject to IRS examination for the 2017 through 2019 tax years. State income tax returns are subject to examination for the 2017 through 2019 tax years.
The Company’s practice and intention are to indefinitely reinvest the earnings of its non-U.S. subsidiaries. Determination of the amount of any unrecognized deferred income tax liability on the temporary difference is not practicable because of the complexities of the hypothetical calculation.
11. Shareholders’ Equity
Dividend Distribution
On April 9, 2021, prior to the IPO, the Company's board of directors declared a cash dividend in the aggregate amount of $50.0 million to holders of our common stock. The cash dividend was paid on April 16, 2021.
Amendment and Restatement of Certificate of Incorporation
On June 10, 2021, the Company amended and restated its certificate of incorporation to effect a ten-for-one forward stock split of its outstanding common stock and authorized three classes of ownership interests: (i) 250,000,000 shares of Preferred Stock, par value $0.01 per share; (ii) 2,500,000,000 shares of Class A common stock, par value $0.01 per share; and (iii) 250,000,000 shares of Class B common stock, par value $0.01 per share. After giving effect to the ten-for-one stock split, all outstanding shares of common stock were reclassified into an equal number of shares of Class B common stock (the “Class B Reclassification”) and the selling shareholders participated equally in the Class B Reclassification.
The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting, transfer and conversion rights. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to ten votes per share and is convertible into one share of Class A common stock at any time or automatically upon certain conditions but no later than June 10, 2028 (seven years following the filing and effectiveness of the amended and restated certificate of incorporation).
Initial Public Offering
On June 15, 2021, the Company closed its IPO of 5,553,154 shares of Class A common stock (the “primary” offering) and selling stockholders sold 9,626,846 shares (the “secondary” offering), including shares sold by the selling stockholders pursuant to the underwriters’ full exercise of their option to purchase additional shares, at a public offering price of $23 per share. The Company received net proceeds of $120.7 million after deducting underwriting discounts and commissions, but before deducting offering expenses. The Company used the proceeds from the primary offering, together with cash on hand, to satisfy payments of approximately $127.5 million in respect of vested phantom shares in the third quarter of 2021.
12. Earnings (Loss) Per Share
Following the effectiveness of the amended and restated certificate of incorporation, the Class B Reclassification and the IPO, the Company has Class A common stock and Class B common stock outstanding. Because the only difference between the two classes of common stock are related to voting, transfer and conversion rights, the Company has not presented earnings per share under the two-class method, as earnings per share are the same for both Class A common stock and Class B common stock. The accompanying financial statements and related notes to the financial statements give retroactive effect to the stock split for all periods presented. See Note 11, “Shareholders’ Equity” for additional information.
The computation of basic net income (loss) per share (“EPS”) is based on the weighted-average number of shares that were outstanding during the period, including shares of common stock that are issuable at the end of the reporting period. The computation of diluted EPS is based on the number of basic weighted-average shares outstanding plus the number of common shares that would be issued assuming the exercise of all potentially dilutive common stock equivalents. Common stock equivalents consist of shares issuable upon the exercise of stock options and vesting of RSUs and PSUs.
15

Table of Contents
The following table summarizes the computation of basic and diluted EPS for the three and nine months ended September 30, 2021 and 2020:
Three months ended September 30,Nine months ended September 30,
(in thousands,except share and per share data)2021202020212020
Numerator:
Net income (loss) available to common shareholders$11,636 $11,456 $(77,800)$20,979 
Denominator:
Weighted-average common shares outstanding – basic97,290,174 91,737,020 93,994,896 91,737,020 
Effect of dilutive securities12,135,837    
Weighted-average common shares outstanding – diluted109,426,011 91,737,020 93,994,896 91,737,020 
Net income (loss) per common share:
Basic$0.12 $0.12 $(0.83)$0.23 
Diluted$0.11 $0.12 $(0.83)$0.23 
Since the Company was in a net loss position for the nine months ended September 30, 2021, diluted EPS is equal to basic EPS for that period as the inclusion of potential common stock equivalents would have been anti-dilutive. The Company excluded 12,309 and 23,607 potential common stock equivalents from the computation of diluted EPS for the three and nine months ended September 30, 2021, respectively, because the effect would have been anti-dilutive. In addition, the Company excluded 5,578,525 potential common stock equivalents from the computation of diluted EPS for the nine months ended September 30, 2021 since the Company was in a net loss position; however, these awards would have been dilutive if the Company was in a net income position.
13. Related Party
On October 1, 2018, Bidco acquired 100% of the outstanding shares of TaskUs Holdings at a purchase price of $429.4 million (the “Transaction”). As a part of the Transaction, the Company entered into a Stock Purchase Agreement, which provides that the sellers of TaskUs Holdings are entitled to receive cash payments for certain tax benefits, if any, realized as a result of the Blackstone Acquisition that are received by the Company for a specified period after the closing date. The Company recognized expense of $3.6 million for the expected payment to the sellers during the nine months ended September 30, 2020. The Company made payment to the sellers during the nine months ended September 30, 2021.
In connection with the closing of the Blackstone Acquisition, TaskUs and TaskUs Holdings entered into a support and services agreement (the “Support and Services Agreement”) with Blackstone Capital Partners VII L.P. and Blackstone Capital Partners Asia L.P. and Blackstone Management Partners L.L.C. (“BMP”), an affiliate of Blackstone. Under the Support and Services Agreement, we reimburse BMP and its affiliates for expenses related to support services customarily provided by Blackstone’s portfolio operations group to Blackstone’s portfolio companies, as well as healthcare-related services provided by Blackstone’s Equity Healthcare group and Blackstone’s group purchasing program. The Support and Services Agreement also requires us to, among other things, make certain information available to Blackstone and to indemnify BMP and its affiliates against certain claims. During the three and nine months ended September 30, 2020, the Company made payments of $0.2 million and $0.2 million, respectively, pursuant to the Support and Services Agreement.
From time to time, the Company does business with a number of other companies affiliated with Blackstone, which cannot be presumed to be carried out at an arm’s-length basis. During the periods presented, Blackstone had an interest in Alight, Inc. (“Alight”), Custom Ink and Mphasis Limited (“Mphasis”), entities that supply TaskUs with certain consulting services and promotional items. During the three and nine months ended September 30, 2021, the Company made payments of $0.4 million and $0.9 million, respectively, to Alight. During the nine months ended September 30, 2021, the Company made payments of $0.2 million to Custom Ink. During the nine months ended September 30, 2020, the Company made payments of $0.2 million to Mphasis.
During the periods presented, Blackstone had an interest in Vivint Smart Home, Inc. (“Vivint”), North American Bancard, and Custom Ink, entities that are TaskUs customers. During the three months ended September 30, 2021, the Company received payments of $0.6 million, $0.7 million, and $0.8 million from Vivint, North American Bancard and Custom Ink, respectively. During the nine months ended September 30, 2021, the Company received payments of $1.5 million, $1.3 million, and $1.5 million from Vivint, North American Bancard and Custom Ink, respectively.
Similarly, from time to time, the Company does business with entities affiliated with members of our Board of Directors, which cannot be presumed to be carried out at an arm’s length basis. A management consulting firm affiliated with a member of our Board of Directors provides consulting services to the Company. During the three months ended September 30, 2021 and 2020, the Company incurred fees related to consulting services provided by this consulting firm of $0.1 million and
16

Table of Contents
$0.1 million, respectively. During the nine months ended September 30, 2021 and 2020, the Company incurred fees related to consulting services provided by this consulting of $0.2 million and $0.2 million, respectively.
Underwriting of IPO
Blackstone Securities Partners L.P., an affiliate of Blackstone, served as underwriter of 1,380,000 of the 15,180,000 shares of Class A common stock sold in the IPO, with underwriting discounts and commissions of $1.265 per share paid by the Company and selling stockholders.
14. Subsequent Events
On October 25, 2021, certain of the Company's stockholders completed a secondary offering of 12,077,480 shares of the Company's Class A common stock at a public offering price of $63.50 per share. All of the shares of Class A common stock were offered by existing stockholders. The Company did not sell any common stock in the offering and did not receive any proceeds from the offering. Blackstone Securities Partners L.P., an affiliate of Blackstone, served as underwriter of