TaskUs Announces Fiscal Fourth Quarter and Full Year 2023 Results
- TaskUs reported a 3.3% decrease in total revenue to $234.3 million in Q4 2023 compared to the previous year.
- GAAP net income stood at $16.3 million, while non-GAAP Adjusted Net Income was $32.2 million.
- Adjusted EBITDA was $59.0 million with a margin of 25.2%.
- The company aims to achieve consistent year-over-year revenue growth in the latter half of 2024.
- TaskUs diversified its client base, added 47 new clients in 2023, and ended the year with nearly 200 clients.
- The company repurchased 2.0 million shares in Q4 and 10.1 million shares for the full year 2023.
- TaskUs introduced AssistAI, a knowledge assist technology built on the TaskGPT platform.
- The company was named a Leader in Everest Group's Financial Crime and Compliance (FCC) Operations Services PEAK Matrix® report for 2024.
- None.
Insights
The financial results of TaskUs, Inc. reflect a mixed performance with a slight year-over-year decrease in total revenue but an increase in GAAP net income and margins. The reported decline in revenue by 3.3% juxtaposed with the 13.0% increase in GAAP net income suggests improved operational efficiency or cost control measures. Particularly noteworthy is the Adjusted EBITDA margin of 25.2%, which indicates a strong ability to convert revenue into earnings before interest, taxes, depreciation and amortization and is above industry norms which often hover around 20-22%. The company's Free Cash Flow growth of 27.3% is a positive sign for liquidity and potential for reinvestment or shareholder returns.
TaskUs's stock performance may be influenced by this earnings report. Although the revenue decline may concern investors, the increase in profitability and cash flow could be seen as a sign of strength, particularly if the cost efficiency programs are sustainable. The company's forward-looking statements about returning to consistent year-over-year revenue growth in the latter half of 2024 will be key in investor sentiment, as it suggests confidence in their business strategy and market opportunities.
TaskUs's diversification into healthcare and banking services is a strategic move reflecting industry trends where digital service providers are expanding into verticals with robust growth potential. The company's client expansion, with 47 new clients in 2023, the most since 2018, indicates successful market penetration and the potential for scaling operations. The introduction of AssistAI, a Generative AI application, into its core offerings is a significant development, as it positions TaskUs at the forefront of integrating AI into customer experience solutions—a rapidly growing segment.
However, the projected revenue growth at the midpoint for the full year 2024 is just 0.1%, which may not excite investors looking for high-growth opportunities. The company's performance in the first quarter of 2024 will be critical in setting the tone for the year and the market will be watching closely to see if the investments in sales and marketing translate into accelerated growth.
TaskUs's financial results must be contextualized within the broader macroeconomic environment. The company's resilience in the face of economic headwinds, as evidenced by its strong adjusted EBITDA and free cash flow, suggests that it has a flexible cost structure and the ability to adapt to changing economic conditions. The net debt to Adjusted EBITDA leverage ratio of 0.6 times indicates a conservative capital structure, which may provide financial stability amid potential economic volatility.
Looking forward, the company's cautious revenue outlook for 2024 mirrors the uncertainty in global economic forecasts, with concerns about inflation, interest rates and potential slowdowns affecting client budgets and spending. TaskUs's ability to maintain profitability in such an environment will be a key indicator of its operational resilience and strategic adaptability.
-
Fourth quarter total revenue of
$234.3 million 3.3% . -
GAAP net income of
$16.3 million 6.9% . -
Non-GAAP Adjusted Net Income of
$32.2 million 13.8% . -
GAAP diluted earnings per share of
$0.18 $0.35 -
Adjusted EBITDA of
$59.0 million 25.2% . -
Net cash provided by operating activities of
$39.8 million $31.7 million 53.7% conversion of Adjusted EBITDA.
“Despite a challenging macroeconomic backdrop, we finished 2023 strong, delivering both revenue and Adjusted EBITDA that were well ahead of our guidance. We further diversified our client base and expanded our business in new areas like healthcare and banking and financial services while maintaining our leadership serving fast-growing technology companies,“ said Co-Founder and CEO, Bryce Maddock. “We also accelerated our investments in sales, marketing, and technology, including embedding Generative AI applications like AssistAI into our core client offerings. As we look to 2024, we are encouraged by the opportunities we won in Q1. Our number one goal is to return to consistent year-over-year revenue growth, and we expect to achieve this in the back half of 2024.”
Fourth Quarter and Full Year 2023 Financial and Frontline Highlights
($ in thousands, except per share amounts) |
Three months ended December 31, |
|
|
|
Year ended December 31, |
|
|
||||||||||||||
|
2023 |
|
|
|
2022 |
|
|
% Change |
|
|
2023 |
|
|
|
2022 |
|
|
% Change |
|||
Service revenue |
$ |
234,264 |
|
|
$ |
242,220 |
|
|
(3.3 |
)% |
|
$ |
924,365 |
|
|
$ |
960,489 |
|
|
(3.8 |
)% |
GAAP net income |
$ |
16,277 |
|
|
$ |
15,742 |
|
|
3.4 |
% |
|
$ |
45,690 |
|
|
$ |
40,422 |
|
|
13.0 |
% |
GAAP net income margin |
|
6.9 |
% |
|
|
6.5 |
% |
|
|
|
|
4.9 |
% |
|
|
4.2 |
% |
|
|
||
Non-GAAP Adjusted Net Income |
$ |
32,248 |
|
|
$ |
33,303 |
|
|
(3.2 |
)% |
|
$ |
126,542 |
|
|
$ |
142,815 |
|
|
(11.4 |
)% |
Non-GAAP Adjusted Net Income margin |
|
13.8 |
% |
|
|
13.7 |
% |
|
|
|
|
13.7 |
% |
|
|
14.9 |
% |
|
|
||
GAAP diluted EPS |
$ |
0.18 |
|
|
$ |
0.16 |
|
|
12.5 |
% |
|
$ |
0.48 |
|
|
$ |
0.39 |
|
|
23.1 |
% |
Non-GAAP Adjusted EPS |
$ |
0.35 |
|
|
$ |
0.33 |
|
|
6.1 |
% |
|
$ |
1.32 |
|
|
$ |
1.39 |
|
|
(5.0 |
)% |
Adjusted EBITDA |
$ |
59,016 |
|
|
$ |
57,943 |
|
|
1.9 |
% |
|
$ |
220,797 |
|
|
$ |
223,204 |
|
|
(1.1 |
)% |
Adjusted EBITDA margin |
|
25.2 |
% |
|
|
23.9 |
% |
|
|
|
|
23.9 |
% |
|
|
23.2 |
% |
|
|
||
Net cash provided by operating activities |
$ |
39,775 |
|
|
$ |
32,631 |
|
|
21.9 |
% |
|
$ |
143,670 |
|
|
$ |
147,095 |
|
|
(2.3 |
)% |
Free Cash Flow |
$ |
31,684 |
|
|
$ |
24,883 |
|
|
27.3 |
% |
|
$ |
112,675 |
|
|
$ |
103,337 |
|
|
9.0 |
% |
Conversion of Adjusted EBITDA |
|
53.7 |
% |
|
|
42.9 |
% |
|
|
|
|
51.0 |
% |
|
|
46.3 |
% |
|
|
||
Free Cash Flow (excluding payment for earn-out consideration) |
$ |
31,684 |
|
|
$ |
24,883 |
|
|
27.3 |
% |
|
$ |
131,016 |
|
|
$ |
103,337 |
|
|
26.8 |
% |
Conversion of Adjusted EBITDA (excluding payment
|
|
53.7 |
% |
|
|
42.9 |
% |
|
|
|
|
59.3 |
% |
|
|
46.3 |
% |
|
|
||
-
Continued client expansion, ending full year 2023 with nearly 200 clients, which included 97 with revenue of at least
$1 million - Added 47 new clients in 2023, the most since 2018.
- Ended the year with 48,200 teammates.
- Net Debt to Adjusted EBITDA leverage ratio was 0.6 times as of December 31, 2023.
- Repurchased 2.0 million shares in the fourth quarter and 10.1 million for the full year ending December 31, 2023.
- Announced AssistAI, our knowledge assist technology built on the TaskGPT platform.
- Named a Leader in Everest Group's Financial Crime and Compliance (FCC) Operations Services PEAK Matrix® report for 2024.
“In 2023 our disciplined cost efficiency program delivered strong adjusted EBITDA margins of
First Quarter and Full Year 2024 Outlook
For the first quarter and full year 2024 TaskUs expects its financial results to include: |
|||
|
2024 Outlook |
||
|
First Quarter |
|
Full Year |
Revenue (in millions) |
|
|
|
Revenue growth (YoY) at midpoint |
(5.0)% |
|
|
Adjusted EBITDA Margin1 |
~ |
|
|
Free Cash Flow (in millions)2 |
N/A |
|
|
| 1. | With respect to the non-GAAP Adjusted EBITDA margin outlook provided above, a reconciliation to the closest GAAP financial measure has not been provided as the quantification of certain items included in the calculation of GAAP net income (loss) cannot be calculated or predicted at this time without unreasonable efforts. For example, the non-GAAP adjustment for stock-based compensation expense requires additional inputs such as number of shares granted and market price that are not currently ascertainable, the non-GAAP adjustment for foreign currency gains or losses depends on the timing and magnitude of changes in foreign currency exchange rates and cannot be accurately forecasted. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could have a potentially unpredictable, and potentially significant, impact on its future GAAP financial results. |
|
| 2. |
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. At the mid-point of our guidance, net cash provided by operating activities for the full year 2024 is expected to be approximately |
Conference Call Information
TaskUs senior management will host a conference call today to discuss the Company’s fourth quarter and full year 2023 financial results and financial outlook. This call is scheduled to begin at 5:00 pm ET. Analysts and investors who wish to participate in the call can register by visiting https://register.vevent.com/register/BIfd551ae0cd5a4093919a893579a3b808. To listen to a live audio webcast, please visit TaskUs’ Investor Relations website at IR.Taskus.com. A replay of the audio webcast will be available on the same website for 12 months following the call. At the time of the conference call and webcast, the Company will post a slide presentation and other materials available on its website.
About TaskUs
TaskUs is a leading provider of outsourced digital services and next-generation customer experience to the world’s most innovative companies, helping its clients represent, protect and grow their brands. Leveraging a cloud-based infrastructure, TaskUs serves clients in the fastest-growing sectors, including social media, e-commerce, gaming, streaming media, food delivery and ride-sharing, Technology, FinTech and HealthTech. As of December 31, 2023, TaskUs had a worldwide headcount of approximately 48,200 people across 28 locations in 12 countries, including
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts, and further include, without limitation, statements reflecting our current views with respect to, among other things, our operations, our financial performance, our industry, the impact of the macroeconomic environment on our business, and other non-historical statements including the statements in the “First Quarter and Full Year 2024 Outlook” section of this press release. 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,” “position us” 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. These factors include but are not limited to: the dependence of our business on key clients; the risk of loss of business or non-payment from clients; our failure to cost-effectively acquire new clients; the risk that we may 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; utilization of artificial intelligence by our clients or our failure to incorporate artificial intelligence into our operations; our inability to anticipate clients’ needs by adapting to market and technology trends; unauthorized or improper disclosure of personal or other sensitive information, or securities breaches and incidents; negative publicity or liability or difficulty recruiting and retaining employees; our failure to detect and deter criminal or fraudulent activities or other misconduct by our employees or third parties; global economic and political conditions, especially in the social media and meal delivery and transport industries from which we generate significant revenue; the dependence of our business on our international operations, particularly in
Non-GAAP Measures
TaskUs supplements results reported in accordance with
TaskUs, Inc. Condensed Consolidated Statements of Operations (unaudited) (in thousands, except per share data) |
|||||||||||||||
|
Three months ended December 31, |
|
Year ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Service revenue |
$ |
234,264 |
|
|
$ |
242,220 |
|
|
$ |
924,365 |
|
|
$ |
960,489 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Cost of services |
|
137,290 |
|
|
|
139,397 |
|
|
|
538,745 |
|
|
|
558,761 |
|
Selling, general, and administrative expense |
|
48,940 |
|
|
|
64,489 |
|
|
|
228,523 |
|
|
|
260,003 |
|
Depreciation |
|
10,889 |
|
|
|
9,929 |
|
|
|
40,391 |
|
|
|
37,915 |
|
Amortization of intangible assets |
|
5,070 |
|
|
|
5,117 |
|
|
|
20,346 |
|
|
|
19,882 |
|
Loss on disposal of assets |
|
550 |
|
|
|
49 |
|
|
|
1,322 |
|
|
|
31 |
|
Total operating expenses |
|
202,739 |
|
|
|
218,981 |
|
|
|
829,327 |
|
|
|
876,592 |
|
Operating income |
|
31,525 |
|
|
|
23,239 |
|
|
|
95,038 |
|
|
|
83,897 |
|
Other expense (income), net |
|
(1,745 |
) |
|
|
(8,599 |
) |
|
|
(1,711 |
) |
|
|
7,443 |
|
Financing expenses |
|
5,576 |
|
|
|
4,256 |
|
|
|
21,717 |
|
|
|
11,921 |
|
Income before income taxes |
|
27,694 |
|
|
|
27,582 |
|
|
|
75,032 |
|
|
|
64,533 |
|
Provision for income taxes |
|
11,417 |
|
|
|
11,840 |
|
|
|
29,342 |
|
|
|
24,111 |
|
Net income |
$ |
16,277 |
|
|
$ |
15,742 |
|
|
$ |
45,690 |
|
|
$ |
40,422 |
|
Net income per common share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.18 |
|
|
$ |
0.16 |
|
|
$ |
0.49 |
|
|
$ |
0.41 |
|
Diluted |
$ |
0.18 |
|
|
$ |
0.16 |
|
|
$ |
0.48 |
|
|
$ |
0.39 |
|
Weighted-average number of common shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
89,189,646 |
|
|
|
97,697,881 |
|
|
|
93,938,931 |
|
|
|
97,815,679 |
|
Diluted |
|
91,504,594 |
|
|
|
101,193,087 |
|
|
|
96,173,071 |
|
|
|
102,603,179 |
|
TaskUs, Inc. Condensed Consolidated Balance Sheets (unaudited) (in thousands) |
|||||
|
December 31,
|
|
December 31,
|
||
Assets |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents |
$ |
125,776 |
|
$ |
133,992 |
Accounts receivable, net of allowance for credit losses of |
|
176,812 |
|
|
178,678 |
Income tax receivable |
|
2,021 |
|
|
2,879 |
Prepaid expenses and other current assets |
|
23,909 |
|
|
25,876 |
Total current assets |
|
328,518 |
|
|
341,425 |
Noncurrent assets: |
|
|
|
||
Property and equipment, net |
|
68,893 |
|
|
75,053 |
Operating lease right-of-use assets |
|
44,326 |
|
|
41,510 |
Deferred tax assets |
|
4,857 |
|
|
6,165 |
Intangibles |
|
192,958 |
|
|
212,993 |
Goodwill |
|
218,108 |
|
|
217,382 |
Other noncurrent assets |
|
6,542 |
|
|
7,487 |
Total noncurrent assets |
|
535,684 |
|
|
560,590 |
Total assets |
$ |
864,202 |
|
$ |
902,015 |
Liabilities and Shareholders’ Equity |
|
|
|
||
Liabilities: |
|
|
|
||
Current liabilities: |
|
|
|
||
Accounts payable and accrued liabilities |
$ |
26,054 |
|
$ |
37,062 |
Accrued payroll and employee-related liabilities |
|
40,291 |
|
|
48,663 |
Current portion of debt |
|
8,059 |
|
|
3,334 |
Current portion of operating lease liabilities |
|
15,872 |
|
|
11,614 |
Current portion of income tax payable |
|
7,451 |
|
|
5,730 |
Deferred revenue |
|
4,077 |
|
|
3,481 |
Total current liabilities |
|
101,804 |
|
|
109,884 |
Noncurrent liabilities: |
|
|
|
||
Income tax payable |
|
4,621 |
|
|
2,293 |
Long-term debt |
|
256,166 |
|
|
264,225 |
Operating lease liabilities |
|
31,475 |
|
|
32,380 |
Accrued payroll and employee-related liabilities |
|
3,978 |
|
|
2,818 |
Deferred tax liabilities |
|
25,214 |
|
|
34,514 |
Other noncurrent liabilities |
|
233 |
|
|
288 |
Total noncurrent liabilities |
|
321,687 |
|
|
336,518 |
Total liabilities |
|
423,491 |
|
|
446,402 |
Total shareholders’ equity |
|
440,711 |
|
|
455,613 |
Total liabilities and shareholders’ equity |
$ |
864,202 |
|
$ |
902,015 |
TaskUs, Inc. Condensed Consolidated Statement of Cash Flows (unaudited) (in thousands) |
|||||||
|
Year ended December 31, |
||||||
|
|
2023 |
|
|
|
2022 |
|
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
45,690 |
|
|
$ |
40,422 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
Depreciation |
|
40,391 |
|
|
|
37,915 |
|
Amortization of intangibles |
|
20,346 |
|
|
|
19,882 |
|
Amortization of debt financing fees |
|
596 |
|
|
|
569 |
|
Loss on disposal of assets |
|
1,322 |
|
|
|
31 |
|
Provision for credit losses |
|
103 |
|
|
|
1,746 |
|
Unrealized foreign exchange losses (gains) on forward contracts |
|
2,485 |
|
|
|
(4,589 |
) |
Deferred taxes |
|
(7,959 |
) |
|
|
(11,755 |
) |
Stock-based compensation expense |
|
52,759 |
|
|
|
68,979 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
1,861 |
|
|
|
(15,052 |
) |
Prepaid expenses and other current assets |
|
(2,015 |
) |
|
|
(7,131 |
) |
Operating lease right-of-use assets |
|
14,314 |
|
|
|
12,726 |
|
Other noncurrent assets |
|
(132 |
) |
|
|
(1,240 |
) |
Accounts payable and accrued liabilities |
|
(9,825 |
) |
|
|
1,822 |
|
Accrued payroll and employee-related liabilities |
|
(7,877 |
) |
|
|
13,589 |
|
Operating lease liabilities |
|
(13,823 |
) |
|
|
(12,391 |
) |
Income tax payable |
|
4,910 |
|
|
|
3,826 |
|
Deferred revenue |
|
592 |
|
|
|
(623 |
) |
Other noncurrent liabilities |
|
(68 |
) |
|
|
(1,631 |
) |
Net cash provided by operating activities |
|
143,670 |
|
|
|
147,095 |
|
Cash flows from investing activities: |
|
|
|
||||
Purchase of property and equipment |
|
(30,995 |
) |
|
|
(43,758 |
) |
Acquisition, net of cash acquired |
|
— |
|
|
|
(23,235 |
) |
Investment in loan receivable |
|
(1,000 |
) |
|
|
(1,000 |
) |
Net cash used in investing activities |
|
(31,995 |
) |
|
|
(67,993 |
) |
Cash flows from financing activities: |
|
|
|
||||
Proceeds from borrowing, Revolving credit facility |
|
— |
|
|
|
32,500 |
|
Proceeds from long-term debt |
|
— |
|
|
|
270,000 |
|
Payments for deferred business acquisition consideration |
|
(1,875 |
) |
|
|
— |
|
Payments on long-term debt |
|
(3,713 |
) |
|
|
(273,080 |
) |
Payments for debt financing fees |
|
— |
|
|
|
(1,821 |
) |
Proceeds from employee stock plans |
|
631 |
|
|
|
3,478 |
|
Payments for taxes related to net share settlement |
|
(2,169 |
) |
|
|
(4,145 |
) |
Payments for stock repurchases |
|
(111,959 |
) |
|
|
(30,967 |
) |
Net cash used in financing activities |
|
(119,085 |
) |
|
|
(4,035 |
) |
Increase (decrease) in cash and cash equivalents |
|
(7,410 |
) |
|
|
75,067 |
|
Effect of exchange rate changes on cash |
|
(806 |
) |
|
|
(4,659 |
) |
Cash and cash equivalents at beginning of period |
|
133,992 |
|
|
|
63,584 |
|
Cash and cash equivalents at end of period |
$ |
125,776 |
|
|
$ |
133,992 |
|
TaskUs, Inc. Non-GAAP Reconciliations Adjusted EBITDA (unaudited) (in thousands, except margin amounts) |
|||||||||||||||
|
Three months ended December 31, |
|
Year ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income |
$ |
16,277 |
|
|
$ |
15,742 |
|
|
$ |
45,690 |
|
|
$ |
40,422 |
|
Provision for income taxes |
|
11,417 |
|
|
|
11,840 |
|
|
|
29,342 |
|
|
|
24,111 |
|
Financing expenses |
|
5,576 |
|
|
|
4,256 |
|
|
|
21,717 |
|
|
|
11,921 |
|
Depreciation |
|
10,889 |
|
|
|
9,929 |
|
|
|
40,391 |
|
|
|
37,915 |
|
Amortization of intangible assets |
|
5,070 |
|
|
|
5,117 |
|
|
|
20,346 |
|
|
|
19,882 |
|
EBITDA |
$ |
49,229 |
|
|
$ |
46,884 |
|
|
$ |
157,486 |
|
|
$ |
134,251 |
|
Transaction costs(1) |
|
— |
|
|
|
365 |
|
|
|
245 |
|
|
|
953 |
|
Earn-out consideration(2) |
|
— |
|
|
|
4,753 |
|
|
|
7,863 |
|
|
|
9,729 |
|
Foreign currency losses (gains)(3) |
|
(885 |
) |
|
|
(8,400 |
) |
|
|
431 |
|
|
|
7,967 |
|
Loss on disposal of assets |
|
550 |
|
|
|
49 |
|
|
|
1,322 |
|
|
|
31 |
|
Severance costs(4) |
|
224 |
|
|
|
— |
|
|
|
1,852 |
|
|
|
821 |
|
Stock-based compensation expense(5) |
|
10,454 |
|
|
|
14,292 |
|
|
|
53,179 |
|
|
|
69,452 |
|
Interest income(6) |
|
(556 |
) |
|
|
— |
|
|
|
(1,581 |
) |
|
|
— |
|
Adjusted EBITDA |
$ |
59,016 |
|
|
$ |
57,943 |
|
|
$ |
220,797 |
|
|
$ |
223,204 |
|
Net Income (Loss) Margin(7) |
|
6.9 |
% |
|
|
6.5 |
% |
|
|
4.9 |
% |
|
|
4.2 |
% |
Adjusted EBITDA Margin(7) |
|
25.2 |
% |
|
|
23.9 |
% |
|
|
23.9 |
% |
|
|
23.2 |
% |
(1) |
Represents professional service fees related to the acquisition of heloo in 2022 and other non-recurring transactions. |
|
(2) |
Represents earn-out consideration recognized as compensation expense related to the acquisition of heloo. |
|
(3) |
Realized and unrealized foreign currency losses include the effect of fair market value changes of forward contracts and remeasurement of |
|
(4) |
Represents severance payments as a result of certain cost optimization measures we undertook during the period to restructure support roles. |
|
(5) |
Represents stock-based compensation expense, as well as associated payroll tax. |
|
(6) |
Represents interest income earned on short-term savings and time-deposit funds beginning in 2023. |
|
(7) |
Net Income Margin represents net income divided by service revenue and Adjusted EBITDA Margin represents Adjusted EBITDA divided by service revenue. |
TaskUs, Inc. Non-GAAP Reconciliations Adjusted Net Income (unaudited) (in thousands, except margin amounts) |
|||||||||||||||
|
Three months ended December 31, |
|
Year ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income |
$ |
16,277 |
|
|
$ |
15,742 |
|
|
$ |
45,690 |
|
|
$ |
40,422 |
|
Amortization of intangible assets |
|
5,070 |
|
|
|
5,117 |
|
|
|
20,346 |
|
|
|
19,882 |
|
Transaction costs(1) |
|
— |
|
|
|
365 |
|
|
|
245 |
|
|
|
953 |
|
Earn-out consideration(2) |
|
— |
|
|
|
4,753 |
|
|
|
7,863 |
|
|
|
9,729 |
|
Foreign currency losses (gains)(3) |
|
(885 |
) |
|
|
(8,400 |
) |
|
|
431 |
|
|
|
7,967 |
|
Loss on disposal of assets |
|
550 |
|
|
|
49 |
|
|
|
1,322 |
|
|
|
31 |
|
Severance costs(4) |
|
224 |
|
|
|
— |
|
|
|
1,852 |
|
|
|
821 |
|
Stock-based compensation expense(5) |
|
10,454 |
|
|
|
14,292 |
|
|
|
53,179 |
|
|
|
69,452 |
|
Tax impacts of adjustments(6) |
|
558 |
|
|
|
1,385 |
|
|
|
(4,386 |
) |
|
|
(6,442 |
) |
Adjusted Net Income |
$ |
32,248 |
|
|
$ |
33,303 |
|
|
$ |
126,542 |
|
|
$ |
142,815 |
|
Net Income (Loss) Margin(7) |
|
6.9 |
% |
|
|
6.5 |
% |
|
|
4.9 |
% |
|
|
4.2 |
% |
Adjusted Net Income Margin(7) |
|
13.8 |
% |
|
|
13.7 |
% |
|
|
13.7 |
% |
|
|
14.9 |
% |
(1) |
Represents professional service fees primarily related to the acquisition of heloo in 2022 and other non-recurring transactions. |
|
(2) |
Represents earn-out consideration recognized as compensation expense related to the acquisition of heloo. |
|
(3) |
Realized and unrealized foreign currency losses include the effect of fair market value changes of forward contracts and remeasurement of |
|
(4) |
Represents severance payments as a result of certain cost optimization measures we undertook during the period to restructure support roles. |
|
(5) |
Represents stock-based compensation expense, as well as associated payroll tax. |
|
(6) |
Represents tax impacts of adjustments to net income which resulted in a tax benefit during the period, including stock-based compensation expense and earn-out consideration. |
|
(7) |
Net Income Margin represents net income divided by service revenue and Adjusted Net Income Margin represents Adjusted Net Income divided by service revenue. |
TaskUs, Inc. Non-GAAP Reconciliations Adjusted EPS (unaudited) |
|||||||||||
|
Three months ended December 31, |
|
Year ended December 31, |
||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
GAAP diluted EPS |
$ |
0.18 |
|
$ |
0.16 |
|
$ |
0.48 |
|
$ |
0.39 |
Per share adjustments to net income(1) |
|
0.17 |
|
|
0.17 |
|
|
0.84 |
|
|
1.00 |
Adjusted EPS |
$ |
0.35 |
|
$ |
0.33 |
|
$ |
1.32 |
|
$ |
1.39 |
|
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding – diluted |
|
91,504,594 |
|
|
101,193,087 |
|
|
96,173,071 |
|
|
102,603,179 |
(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. |
TaskUs, Inc. Non-GAAP Reconciliations Free Cash Flow (unaudited) (in thousands) |
|||||||||||||||
|
Three months ended December 31, |
|
Year ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net cash provided by operating activities |
$ |
39,775 |
|
|
$ |
32,631 |
|
|
$ |
143,670 |
|
|
$ |
147,095 |
|
Purchase of property and equipment |
|
(8,091 |
) |
|
|
(7,748 |
) |
|
|
(30,995 |
) |
|
|
(43,758 |
) |
Free Cash Flow |
$ |
31,684 |
|
|
$ |
24,883 |
|
|
$ |
112,675 |
|
|
$ |
103,337 |
|
Payment for earn-out consideration |
|
— |
|
|
|
— |
|
|
|
18,341 |
|
|
|
— |
|
Free Cash Flow (excluding payment for earn-out consideration) |
$ |
31,684 |
|
|
$ |
24,883 |
|
|
$ |
131,016 |
|
|
$ |
103,337 |
|
Conversion of Adjusted EBITDA(1) |
|
53.7 |
% |
|
|
42.9 |
% |
|
|
51.0 |
% |
|
|
46.3 |
% |
Conversion of Adjusted EBITDA (excluding payment for earn-out consideration)(1) |
|
53.7 |
% |
|
|
42.9 |
% |
|
|
59.3 |
% |
|
|
46.3 |
% |
(1) |
Conversion of Adjusted EBITDA represents Free Cash Flow divided by Adjusted EBITDA. Conversion of Adjusted EBITDA (excluding payment for earn-out consideration) represents Free Cash Flow (excluding payment for earn-out consideration) divided by Adjusted EBITDA. |
Definitions of Non-GAAP Metrics
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, earn-out consideration, the effect of foreign currency gains and losses, gains and losses on disposals of assets, non-recurring severance 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.
Adjusted EBITDA Margin represents Adjusted EBITDA divided by service revenue.
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, earn-out consideration, the effect of foreign currency gains and losses, gains and losses on disposals of assets, non-recurring severance 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.
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.
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.
Free Cash Flow (excluding payment for earn-out consideration) is a non-GAAP liquidity measure that represents Free Cash Flow before the payment of earn-out consideration which would hinder comparison of the performance of our business on a period-over-period basis or with other businesses. Our management believes that the inclusion of this supplementary adjustment to Free Cash Flow is appropriate to provide additional information to investors about this unusual item that we do not expect to continue at the same level in the future.
Conversion of Adjusted EBITDA represents Free Cash Flow divided by Adjusted EBITDA. Conversion of Adjusted EBITDA (excluding payment for earn-out consideration) represents Free Cash Flow (excluding payment for earn-out consideration) divided by Adjusted EBITDA.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240228259088/en/
Investor Contact
Trent Thrash
IR@TaskUs.com
Media Contact
Heidi Lemmetyinen
mediainquiries@taskus.com
Source: TaskUs, Inc.
FAQ
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