TaskUs (TASK) Q2 Revenue Jumps 24%

Key Points

• GAAP revenue rose 23.6% year-over-year to $294.1 million in Q2 2025, beating estimates by $22.6 million.

• Non-GAAP EPS reached $0.43, surpassing the $0.34 non-GAAP estimate and climbing 38.7% from last year.

• Free cash flow (non-GAAP) dropped sharply to near zero ($38 thousand) due to elevated capital expenditures and non-recurring costs.

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TaskUs (NASDAQ:TASK), a digital outsourcing provider focused on AI-powered customer support and content moderation, reported its fiscal second quarter 2025 earnings on August 7, 2025. The company delivered GAAP revenue and non-GAAP earnings that decisively beat analyst expectations. GAAP revenue totaled $294.1 million, up 23.6% year over year and $22.6 million above estimates. Non-GAAP earnings per share were $0.43 for the second quarter ended June 30, 2025, exceeding the $0.34 non-GAAP forecast. Despite these positive surprises, free cash flow (non-GAAP) fell sharply to nearly zero, driven mainly by higher capital spending and non-recurring expenses. The period showed strong operational performance, but outstanding questions remain about cash generation and future financial flexibility.

Source: Analyst estimates for the quarter provided by FactSet.

Company Overview and Success Factors

TaskUs provides outsourced digital operations services for technology, media, and e-commerce companies. The company helps clients support end-users, moderate online content, manage trust and safety functions, and deliver AI services. It operates globally, supporting approximately 200 clients as of December 31, 2024, including major social media and streaming platforms.

In recent years, TaskUs has focused on integrating advanced technology into its client offerings, investing in AI-driven services, and expanding to new industry verticals. Key success drivers include technology adoption, operational efficiency, employee training and retention, and strong partnerships with high-growth technology companies. Maintaining compliance with regulations, such as data privacy and content moderation rules, is also essential.

Highlights from the Quarter

GAAP revenue reached $294.1 million, representing 23.6% year-over-year growth and well ahead of the $271.5 million GAAP analyst estimate. The company attributed growth to double-digit gains across all three service lines, especially in AI Services and Trust Safety. Trust Safety, which includes content moderation and online safety management, recorded nearly 30% year-over-year revenue growth.

Non-GAAP earnings per share were $0.43 for the second quarter ended June 30, 2025, up 38.7% compared to the previous year and beating expectations by $0.09 (non-GAAP). Adjusted EBITDA grew to $65.0 million, up 26.7% year over year. Adjusted net income increased to $39.7 million, up 38.6% from the prior year period. The adjusted EBITDA margin was 22.1%, up from 21.5% (non-GAAP) in Q2 2024.

The company reported higher expenditures during the quarter, particularly for capital projects. Capital spending was $17.0 million, a large jump from $4.5 million in Q2 2024. Non-recurring expenses also increased, including $2.547 million for transaction costs, $2.7 million for litigation costs, and $1.227 million for operational efficiency costs. The impact of these expenditures was evident in free cash flow (non-GAAP), which declined to just $38,000, compared to $25.5 million in Q2 2024. The conversion of adjusted EBITDA into free cash flow dropped dramatically to 0.1% from 36.8% in Q1 FY2025.

TaskUs emphasized progress in technological development, specifically its AI Services business, which was the fastest-growing segment for the second consecutive quarter. The company announced partnerships with Decagon and Regal to accelerate the integration of what it calls "Agentic AI-Powered Customer Experience." This refers to a set of digital customer support and automation tools powered by artificial intelligence, designed to improve speed, efficiency, and customer satisfaction. Overall headcount grew, ending the period at 60,400 teammates.

Looking Ahead

TaskUs did not provide forward financial guidance for the next quarter or full fiscal 2025. The earnings release cited significant ongoing uncertainty, partly related to a proposed take-private merger transaction, which could affect strategy and operational flexibility in the months to come.

Investors will want to monitor trends in cash flow, capital spending, and working capital performance closely in upcoming periods. Factors such as the pace of technology integration, expansion into new digital verticals, and the impact of any future merger will be important to track.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool recommends TaskUs. The Motley Fool has a disclosure policy.