TaskUs, Inc.

After conducting a forensic financial and accounting review, Spruce Point believes shares of TaskUs, Inc. (Nasdaq: TASK), a highly promoted business process outsourcing (BPO) firm to digital and emerging technology companies, has a pattern of exaggerated and inflated business claims, including revenue, and is covering-up financial strain with reduced disclosures, cherry-picked market data, and non-standard key performance metrics. With 28% of sales to Facebook and related to the controversial area of “Content Moderation” we find evidence of increasing financial strain in the relationship and believe margins and cash flow are set to contract more than expected. TASK trades at a rich premium to BPO peers on the belief its margins will increase and it can sustain 25%+ revenue growth. With both of these goals at risk, we see 25% – 50% downside risk to ($18 – $27 per share). We are long Concentrix (Nasdaq: CNXC) and Majorel Group Luxrmbourg (MAJ NA) as we believe they are favorably positioned to succeed against TASK and trade at material valuation discounts as a result of being under-covered in the BPO space.