TaskUs, Inc. Q4 FY2025 earnings call

• Balaji Shekhar is leaving TASCUS at the end of the quarter. The company secured commitments to amend its existing credit agreement, increasing the term loan to $500 million and obtaining a $100 million revolving line of credit, and declared a $3.65 per share special dividend. - In Q4 2025, revenue was $313 million, beating guidance, and full - year 2025 revenue was $1.184 billion, up 19% year - over - year. - DCX growth was seen in financial services, healthcare, and technology verticals. Trust and safety growth was from existing clients in social media verticals. AI services growth was from various verticals. - Strategy includes doubling down on AI services, increasing investments in agentic AI consulting practice, and automating internal workflows and support operations. For example, deploying AI agents into talent acquisition engine increased hiring efficiency.

In the fourth quarter, TASCUS delivered $313 million in revenue, representing 14.1% year - over - year growth. For the full year 2025, revenue was $1.184 billion, a 19% year - over - year increase. DCX digital customer experience revenue in Q4 increased by 4.8% compared to Q4 2024, resulting in over 8% full - year growth. The trust and safety service line had 18% year - over - year quarterly revenue growth in Q4 and nearly 24% for the full year. AI services had a 45.9% year - over - year growth in Q4 and nearly 59% for the full year. DCX growth was driven primarily by technology and healthcare verticals. Trust and safety growth was mainly from existing client growth in the social media vertical. AI services growth was due to demand from various verticals like travel and transportation, social media, etc.

• Q1 2026 revenues are expected to be between $296 million and $298 million, representing approximately 7% year - over - year growth at the midpoint, with an adjusted EBITDA margin of approximately 19%. - Full - year 2026 revenue is expected to be in the range of $1.21 to $1.24 billion, reflecting approximately 3.5% growth at the midpoint. Adjusted EBITDA margin is expected to be approximately 19%. Expected adjusted free cash flow for 2026 is approximately $100 million.

• AI transformation journey may not be straight - forward, with increased use of AI agents potentially automating work performed by human talent and creating short - term revenue headlines. - Margin pressure in the near term due to AI transformation investments. - Client concentration risk, as the largest client's actions can impact growth. - Currency rate changes not hedged could impact margins.

Q: Jonathan Lee from Guggenheim Partners asked about 2026 outlook and service line acceleration/deceleration.

A: Bryce Maddock said the largest client's actions impact the outlook, AI services and DCX are expected to grow, and trust and safety volumes at largest clients are under pressure.

Q: Antonio Jaramillo from Morgan Stanley asked about pricing and top 20 clients.

A: Bryce said pricing is dynamic with premium position in some services, and top 20 clients outside the largest will grow 15% due to taking share from competition and growth in emerging industries.

Q: David Coning from Baird asked about revenue base shift and interest expense.

A: Bryce said the business will evolve with DCX becoming technology plus talent and AI services growing exponentially, and interest expense will be based on SOFR plus 2.75%.

Q: Puneet Jain from J.P. Morgan asked about existing book of business exposure to AI - related automation and client behavior change.

A: Bryce said while automation is taking place, the company benefits from growth in certain industries and is evolving to outcome - based solutions.

Q: Maggie Nolan from William Blair asked about AI services sustainability and top client risk.

A: Bryce said AI services is expected to be the fastest - growing service line in 2026, and the top client relationship is strong with medium - term vendor consolidation benefits, and other clients are seeing growth due to vendor consolidation and strong execution.