TaskUs, Inc.

Good afternoon and welcome to TASCUS second quarter 2026 investor call. My name is James and I will be your conference facilitator today. At this time, all lines have been placed on mute to avoid background noise. After the speaker's remarks, there will be a question and answer session. To ask a question during the session, you need to press star 1-1 on your telephone and you will hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised today's conference is being recorded. I would now like to introduce Trent Thrash, Senior Vice President of Corporate Development and Investor Relations. Trent, please go ahead.

Hello, everyone, and thank you for joining us for today's Task Us earnings call. Full details of our results and additional management commentary are available in our earnings release, which can be found on the investor relations section of our website at ir.taskus.com. We have also posted supplemental information on our website, including an investor presentation and an Excel-based financial metrics file. Before we start, I would like to remind you that the following discussions contain forward-looking statements within the meaning of the federal securities laws. including, but not limited to, statements regarding our future financial results and management's expectations and plans for the business. These statements are neither promises nor guarantees and involve risks and uncertainties that may cause actual results to differ materially from those discussed here. You should not place undue reliance on any forward-looking statements. For details on the uncertainties and other factors that may cause our actual results to be materially different than those expressed in our forward-looking statements, see the Risk Factors section of our most recent annual report on Form 10-K, our quarterly reports on Form 10-Q, and other documents filed with or furnished to the FCC. These filings, which may be supplemented with subsequent periodic reports, are accessible on the SEC's website and our investor relations website. Any forward-looking statements made on today's conference call, including responses to questions, are based on current expectations as of today, and TASCUS assumes no obligation to update or revise them, whether as the result of new developments or otherwise, except as required by law. The discussions throughout today's call contain non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP metric, please see our earnings press release, which is available in the IR section of our website. Now, I will turn the call over to Bryce Maddock, our co-founder and chief executive officer. Bryce?

Thank you, Trent. Good afternoon, everyone, and thank you for joining us. Before we dive into the quarter, I want to take a moment to warmly welcome Rishabh Khemka, our new Chief Financial Officer, to his first TAPCA's earnings call. Rishabh brings an extraordinary track record of financial leadership, operational excellence, and disciplined growth across dynamic technology and service companies. He's hit the ground running and has already made an impact on our business in less than two months on the job. We're thrilled to have Rishabh on board, and I know he looks forward to partnering with many of you on today's call. In the second quarter, we again delivered solid performance, generating $308.9 million in revenue, which outperformed the top end of our revenue guidance by $10.9 million, or 3.6%. Our year-over-year revenue growth rate at 5% helped us generate $57.7 million in adjusted EBITDA, or an adjusted EBITDA margin of 18.7%. This was 70 basis points ahead of our margin guidance, and on a dollar basis, it was 7.5% ahead of the adjusted EBITDA implied by the top end of our Q2 revenue guidance. Our business's ability to generate cash was on full display in Q2. We delivered $36.4 million in adjusted free cash flow, bringing our cash balance to $180.3 million. This brought our net leverage ratio down under 1.3 times. giving us a very strong balance sheet with ample liquidity to continue to invest in our AI and growth initiatives. Those investments are paying off. In Q2, we maintained our strong momentum by capitalizing on our biggest growth opportunities in artificial intelligence services and AI-enabled digital customer experience. Our Q2 performance underscores the resilience of our business in the AI era, and reinforces our conviction in the strength of our client partnerships and the quality of Taskus' team and solutions. We remain laser focused on our long-term goal to increase revenue, EBITDA and earnings per share over a multi-year horizon at rates that are among the best in the industry. Next, I'll provide some highlights from C2 along with an update on our 2026 outlook. Then I'll hand it over to Rishabh to walk through our financials in more detail. Again, Q2 revenue was $308.9 million, an increase of 5% on a year-over-year basis. As expected, revenue from our largest client declined by approximately 22% compared to Q2 of 2025. This decline was more than offset by growth from other clients, resulting in revenue concentration from our top client of 20% in Q2 compared to 26% in Q2 of 2025. As we shared in Q1, revenue in the second half of 2026 will reflect additional headwinds from our largest client's automation and cost optimization efforts. However, our relationship with our largest client remains strong. Thanks to our high-quality delivery and proven agility in adapting to their evolving strategic priorities, TaxGus is positioned to benefit as this client consolidates vendors over the medium term. I'm very proud to report that outside our largest client, performance across the rest of our business was once again very strong. If we exclude our largest client, revenue in the rest of our business grew approximately 15% year over year in the quarter. The primary engine behind this was our second through 20th largest client cohort, which grew approximately 30% on a year over year basis in Q2. Notably, these growth rates that exclude the impact of our largest client All accelerated when compared to Q1. Our sales and client service teams carried their momentum into the second quarter, delivering another solid performance. Q2 was once again defined by the expansion of our established partnerships, with more than 50% of signings coming from existing clients. Following exceptionally strong onshore signings in our AI service offering in the first quarter, Q2 returned to a more normalized mix with heavier offshore delivery. Let's look at our service line performance for the quarter in more detail. Digital customer experience delivered $175.7 million in revenue, representing year-over-year growth of 6.4%. DCX growth was primarily driven by clients in our mobility, logistics, and travel, technology, healthcare, retail and e-commerce, and entertainment and gaming verticals. We expect DCX growth in the mid to high single digits for 2026, with growth rates likely to accelerate in the back half. It's important that we pause and highlight this. In the face of countless market headlines predicting that BPO customer care would all be automated, our customer care business is growing at an accelerating rate. Our success is based on our two-part approach. We're using AI to support the automation of simpler customer contacts, while leveraging our talented teammates for premium human-led customer interactions. The accelerated growth of our DCX business in the AI era shows that our strategy is paying off. The future of customer care is combining AI technology with human talent to deliver better customer experiences. Finally, I'll note that our investment in healthcare is also delivering results. During Q2, we're pleased to be named to Evers Group's Healthcare Customer Experience Management Intelligent Operations Peak Matrix Assessment for 2026. Turning to trust and safety, we generated $67.1 million in revenue, a decline of approximately 12.3% year-over-year. This was primarily driven by declining revenue from our clients and our social media vertical, partially offset by growth in our technology and financial service vertical. As we previously shared, as our largest social media clients invest in automating content moderation, we expect our trust and safety revenue to continue to decline year over year during the back half of 2026. We remain optimistic that these declines will stabilize in 2027 as we continue to support complex trust and safety workflows and benefit from vendor consolidation at our largest client. Moving on to AI services, This specialized service offering continues to be our fast-growing service line, with revenue increasing 26% year-over-year to $66.1 million. Here, our strong growth is primarily attributable to our ongoing ramp of clients in our mobility, logistics, and travel vertical, including clients in the autonomous vehicle, autonomous delivery, and robotics industries. This exceptional performance was partially offset by reductions in revenue in our social media vertical driven by the end of certain AI automation projects at our largest client and other social media clients. From an AI services signings perspective, we saw strength in our technology and social media verticals during Q2. Given our results, we continue to believe our investments in our AI service offerings focused on the world's leading foundational models, hyperscalers, and autonomous vehicle, autonomous delivery, and robotics companies are paying dividends. We're confident these investments will enable us to deliver a strong growth in the second half of 2026. In Q3, AI services growth rates will be partly impacted by the sunsetting of the AI automation projects at the social media clients I mentioned earlier. In Q4, we expect AI service growth rates will again accelerate to better than 30% year over year, driven by our continued growth with autonomous vehicle and robotics clients. On that note, I'd like to provide an update on our strategy for the AI-driven future. As part of the first pillar of our AI strategy, we remain focused on building a highly differentiated solution set that strengthens our AI services offerings, specifically within physical AI, autonomous vehicles, autonomous delivery, and robotics. The strategic investments we've made over the past several quarters have positioned us to continue winning market share as these emerging sectors reach inflection points. As part of our commitment to leading in emerging AI technologies, we recently established our first robotics and physical AI training lab in Noida, India. A great example of our work here is our partnership with a leading developer of home-based autonomous robots. Here, our team collects, annotates, and validates physical, spatial data to train our clients' autonomous systems to complete daily tasks. This lab highlights our momentum in moving beyond pure digital AI into complex physical robots, positioning Taskus at the center of our clients' most innovative initiatives. Outside of our labs, we are also leveraging our Taskverse platform to collect egocentric data in diverse real-world settings, providing imitation learning for humanoid robotics. Here, we are making investments in our platform to optimize how we deploy and manage these specialized, Finally, we continue to aggressively recruit domain-specific talent with deep expertise in autonomous vehicles, autonomous delivery, and robotics. By combining modern platform infrastructure and specialized human expertise, Tacitus is solidifying its position as the critical operational partner for industry leaders across these emerging high-growth markets. From high-fidelity data capture and mapping to mission-critical remote assistance and roadside emergency response, our specialized workflows are integral to our clients' real-world deployments. Turning to the second pillar of our AI strategy, investments in our AI consulting practice, I want to outline some improvements we've seen with agentic solutions we've implemented for clients. These results are a direct reflection of our ability to leverage Taskus's intimate knowledge of our clients' products, processes, and workflows into higher-performing autonomous agents and deliver seamless orchestration between these technologies and the human intervention required for a more complex and nuanced resolution. Building on the success of our initial deployment of an agentic customer support solution for a streaming client, we've driven a meaningful increase in the overall contact containment rate. Our deep knowledge of the client's workflows has allowed our AI consulting team to quickly contain more than 70% of contacts in our recent performance. This progress was propelled by expanding our specialized technical troubleshooting capabilities into high-volume workflows, including account management, technical support, and customer trial abuse mitigation. As we scaled these egyptic solutions, we have not compromised customer experience as evidenced by our 4.7 out of 5 CSAT score. Building on the success, we're now extending these proven conversational capabilities into our client's email channel with additional plans to expand into voice to drive further automation and unlock additional operational savings. At another key client in a highly regulated industry, we've deployed an AI voice agent capable of executing end-to-end appointment scheduling, rescheduling, and the initiation of new customer intake. By integrating partner technology with our operational expertise, we've continuously increased containment rates while positively impacting overall booking rates. Complex and sensitive interactions seamlessly escalate the task of teammates, allowing human empathy to shine where it matters most. Since April, first attempt AI agent resolution rates have improved nearly 30%, resulting in fewer human transfers. Our AI scheduling agents have also become more efficient with median AI agent talk time dropping by nearly 12%. Finally, our agents delivered a reduction in appointment cancellations of over 60% in the past three months. Given our success in directly increasing our clients' revenues, we are exploring other work streams and agent capabilities, including adding outbound agent calling, which we anticipate to launch next quarter. Each of those successful agentic deployments showcase our ability to move beyond pilots into production environments The third and final cornerstone of our strategy for the AI era is the automation of our internal processes to drive margin expansion and operational excellence. Beyond our previously discussed agentic AI deployments in our talent acquisition and HR helpdesk functions, we're developing custom solutions to address targeted real-world operational challenges. A critical focus area is putting AI directly into the hands of our frontline leaders, reducing their administrative burden and empowering them to focus entirely on their roles as coaches and leaders of our teammates. A prime example of this is Maestro, our proprietary AI-powered platform for team leads. Maestro acts as an intelligent operational assistant, seamlessly blending automation, predictive AI, and deep integrations with our existing delivery ecosystem. Maestro allows our team leads to explore their team's performance data using natural language. It automates routine administrative reporting and surfaces real-time performance insights, including schedule appearance, average call time, QA, CSAT analyses, and personalized coaching recommendations. This empowers our team leads to focus on high-impact coaching, elevating delivery quality. This will also allow us to improve spans of control over time. By transforming how our frontline operates, Maestro serves the powerful industry differentiator, positioning us to aggressively take market share from the competition. Before handing it over to Rishabh to provide more details on our Q2 results, I want to touch on our 2026 outlook. In light of our strong results, sales momentum, and continued strength of both our digital customer experience and AI service offerings, we are raising our full-year revenue outlook. to $1.22 billion to $1.24 billion. This updated range accounts for the continued headwinds we expect to face at our largest client through the end of 2026. At the $1.23 billion midpoint of our revenue guidance, we expect full-year adjusted EBITDA margins to be approximately 19%. We're also increasing our outlook for full year adjusted free cash flow by approximately 5% to between $110 million to $120 million. For the third quarter, we expect revenue to be between $300 million and $302 million, or roughly 1% year-over-year revenue growth at the midpoint. Adjusted EBITDA margins are expected to be flat sequentially at approximately 18.7% in Q3. Looking ahead to 2027, we plan to continue increasing our level of investment in emerging growth and AI transformation initiatives, including AI services and AI-enabled ECX. These investments are likely to continue to impact margins. Our performance to date increases our conviction that these investments are the right strategic decision to position Taskus for the future. Overall, despite top client headwinds and a choppy overall macro environment, We're pleased to have delivered performance that exceeded our expectations in Q1 and Q2. We remain confident in the trajectory of our business driven by resilient demand for our premium DCX offerings and strategic advancements in AI services. I look forward to updating you on our Q3 results on our next call. With that, I'll hand it over to Rishabh to go through our financials in more detail.