TaskUs (TASK)

Digital outsourcing company TaskUs (NASDAQ:TASK) reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 17% year on year to $298.7 million. Revenue guidance for the full year exceeded analysts’ estimates, but next quarter’s guidance of $303.4 million was less impressive, coming in 1.4% below expectations. Its non-GAAP profit of $0.42 per share was 10.4% above analysts’ consensus estimates.

Company Overview

Starting as a virtual assistant service in 2008 before evolving into a global digital services provider, TaskUs (NASDAQ:TASK) provides outsourced digital services including customer experience management, content moderation, and AI data services to innovative technology companies.

The sector stands to benefit from ongoing digital transformation, increasing corporate demand for cost efficiencies, and the growing complexity of regulatory and cybersecurity landscapes. For those that invest wisely, AI and automation capabilities could emerge as competitive advantages, enhancing process efficiencies for the companies themselves as well as their clients. On the flip side, AI could be a headwind as well as the technology could lower the barrier to entry in the space and give rise to more self-service solutions. Additional challenges in the years ahead could include wage inflation for highly skilled consultants and potential regulatory scrutiny on outsourcing practices—especially in industries like finance and healthcare where who has access to certain data matters greatly.

TaskUs competes with other business process outsourcing companies including Teleperformance (OTCMKTS:TLPFY), TELUS International (NYSE:TIXT), and Concentrix (NASDAQ:CNXC), as well as specialized AI services providers like Scale AI and Appen (ASX:APX).

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $1.14 billion in revenue over the past 12 months, TaskUs is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. On the bright side, it can grow faster because it has more room to expand.

As you can see below, TaskUs grew its sales at an incredible 21.1% compounded annual growth rate over the last five years. This shows it had high demand, a useful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. TaskUs’s annualized revenue growth of 10.8% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, TaskUs reported year-on-year revenue growth of 17%, and its $298.7 million of revenue exceeded Wall Street’s estimates by 2.4%. Company management is currently guiding for a 10.6% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 11.5% over the next 12 months, similar to its two-year rate. This projection is healthy and indicates the market is baking in success for its products and services.

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

TaskUs was profitable over the last five years but held back by its large cost base. Its average operating margin of 7.3% was weak for a business services business.

On the plus side, TaskUs’s operating margin rose by 19.3 percentage points over the last five years, as its sales growth gave it immense operating leverage.

This quarter, TaskUs generated an operating margin profit margin of 12.7%, up 3.2 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

TaskUs’s full-year EPS grew at a decent 8.2% compounded annual growth rate over the last four years, in line with the broader business services sector.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

TaskUs’s unimpressive 9.3% annual EPS growth over the last two years aligns with its revenue trend. On the bright side, this tells us its incremental sales were profitable.

In Q3, TaskUs reported adjusted EPS of $0.42, up from $0.37 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects TaskUs’s full-year EPS of $1.54 to grow 9.1%.

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

TaskUs has shown decent cash profitability, giving it some flexibility to reinvest or return capital to investors. The company’s free cash flow margin averaged 6.3% over the last five years, slightly better than the broader business services sector.

Taking a step back, we can see that TaskUs’s margin expanded by 21.6 percentage points during that time. This is encouraging, and we can see it became a less capital-intensive business because its free cash flow profitability rose more than its operating profitability.

TaskUs’s free cash flow clocked in at $41.96 million in Q3, equivalent to a 14% margin. This result was good as its margin was 11.6 percentage points higher than in the same quarter last year, building on its favorable historical trend.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

TaskUs historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 5.2%, somewhat low compared to the best business services companies that consistently pump out 25%+.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, TaskUs’s ROIC has increased. This is a good sign, but we recognize its lack of profitable growth during the COVID era was the primary reason for the change.

TaskUs reported $210 million of cash and $307.7 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $217 million of EBITDA over the last 12 months, we view TaskUs’s 0.5× net-debt-to-EBITDA ratio as safe. We also see its $2.59 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was good to see TaskUs beat analysts’ revenue EPS expectations this quarter, making for solid performance. On the other hand, its revenue guidance for next quarter slightly missed. Overall, this print was mixed. The stock traded up 6.4% to $13.30 immediately after reporting.

Updated: December 3, 2025 at 11:08 PM EST

Are you wondering whether to buy TaskUs or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.

We think TaskUs is a good business. To kick things off, its revenue growth was exceptional over the last five years. And while its projected EPS for the next year is lacking, its rising cash profitability gives it more optionality. On top of that, its rising returns show management's prior bets are starting to pay off.

TaskUs’s P/E ratio based on the next 12 months is 7.7x. Looking at the business services space right now, TaskUs trades at a compelling valuation. If you’re a fan of the business and management team, now is a good time to scoop up some shares.

Wall Street analysts have a consensus one-year price target of $15.90 on the company (compared to the current share price of $12.06), implying they see 31.8% upside in buying TaskUs in the short term.