$1.06
$10.01
bear $1.06
base $6.46
bull $10.01
margin of safety $3.50
market price* $8.22
TaskUs provides outsourced digital services to companies in the digital economy from 31 locations; in 2025, 54% of its revenue came from work delivered in the Philippines, 13% from India, 11% from the United States and 22% from other countries, where growth was driven by Latin America and Europe. In 2025 it earned $1,183.5 million of revenue in three lines: Digital Customer Experience (customer support and related work, $661.9 million), Trust & Safety (content moderation, fraud and compliance review, $307.4 million) and AI Services (large-language-model support, data labeling and annotation, $214.2 million). Blackstone formed the company in 2018 to buy the business, took it public in 2021, and together with the co-founders still controls the vote through a dual-class share structure. A May 2025 agreement for Blackstone and the co-founders to take the company private was terminated in October 2025 after it failed to win stockholder approval. In March 2026 the company borrowed a new $500 million term loan (due March 2031, at SOFR plus 2.75%) and paid a special dividend of $3.65 per share, about $333 million. How we measured earnings. We start from operating cash flow, strip out swings in working capital, subtract stock-based pay as a real cost, and subtract the capital spending needed to keep the business running (spending tied to revenue growth is treated as optional). On that basis, owner earnings were $72.0 million in 2023, $59.5 million in 2024 and $104.8 million in 2025. Because we value the business before its lenders and subtract the debt separately, we add back interest paid, giving cash flow before lenders of about $93.5 million, $80.6 million and $122.6 million in those three years. We use 2023-2025 as the representative window: 2020 was a private-company year with no stock pay expense, 2021 carried about $134 million of one-time bonuses tied to the IPO, and 2022, the first full year after the IPO, carried $69 million of stock pay, more than double 2025's level (it has fallen every year since). The median of the window is about $0.97 per share. About $20 million a year of amortization of client relationships and trade name from the 2018 buyout is a non-cash charge and is added back; because those client relationships wear out, no growth is credited and every case fades out after its explicit period rather than running forever. Recent results. Owner earnings rose 76% in 2025 on 19% revenue growth, led by AI Services (+59%) and Trust & Safety (+24%). Growth has since slowed: first-half 2026 revenue was $615.1 million, up 7.6%, and second-quarter revenue rose 5.0%. Cash from operations in the first half was $89.4 million against $53.3 million a year earlier, and stock pay fell to $10.3 million from $17.1 million, so the higher earnings level has held for two further quarters. We still set the base case's first year at about $105 million, roughly 14% below 2025's actual, because the company's own annual report warns that clients, including its largest, are investing heavily in automation that could eventually replace work TaskUs does today. No revenue growth is credited in any case: TaskUs has no long-term contracted backlog, its growth has come from winning more work from a concentrated set of clients rather than a steady repeatable process, and revenue fell 3.8% in 2023. Concentration. Meta was 26% of 2025 revenue; the top ten clients were 58% and the top twenty 71%. The largest client was 22% of first-half 2026 revenue. Debt. At June 30, 2026 the company owed $492.0 million on the term loan with its $100 million revolver undrawn, and held $180.3 million of cash. We treat about $60 million of cash as needed to run a payroll-heavy business, leaving net borrowings of about $372 million. Second-quarter 2026 financing expense of $8.8 million implies the loan costs roughly 7% a year, about one percentage point above our 6% discount rate, so for its remaining life to 2031 we add about $18 million, for about $390 million owed, or roughly $4.20 per share. Base case: cash flow before lenders of about $105 million a year for ten years, then fading to zero over the following ten as client relationships and service lines are automated or replaced. The business is worth about $988 million; less about $390 million owed, the shares are worth about $598 million, or $6.46 per share. Bear case: the largest client halves its volume over 2027-2028 and automation keeps eroding customer-support work, taking cash flow before lenders from about $95 million to $65 million by year three and then down 5% a year to about $45 million in year ten, fading to zero over the next five years. With cash flow still roughly $65 million or less, the loan due March 2031 must be refinanced on worse terms, which we charge at about $25 million. The business is worth about $513 million against about $415 million owed, leaving about $98 million, or $1.06 per share. Most of the value in this case goes to lenders. Bull case: the higher level earned in 2025 and the first half of 2026 holds at about $128 million a year for ten years, then fades to zero over fifteen years as the client base proves more durable. The business is worth about $1,316 million; less about $390 million owed, the shares are worth about $926 million, or $10.01 per share. What could make this wrong: a faster loss of Meta or other top-ten volume to automation would push value toward or below the bear case; on the other side, a record of several more years at 2025's earnings level with a broader client base would support the bull case. The shares are also controlled by Blackstone and the co-founders, so outside holders have little say over future borrowing, dividends or another buyout offer. Because of the heavy client concentration, the debt taken on in 2026 and the automation risk to the core service, the margin-of-safety price is set with a wide margin: about $3.50 per share.