What happened
Shares of TaskUs (TASK 1.35%), a company that specializes in helping tech companies connect with customers, fell on Tuesday after the company reported financial results for the first quarter of 2022. Results exceeded previous guidance from management. But full-year expectations weren't raised as a result, which is being interpreted negatively by the market. As of 12:45 p.m. ET, TaskUs stock was down 13% for the session, down more than 60% year to date, and down more than 75% from its all-time high less than a year ago.
NASDAQ: TASK
Key Data Points
So what
When it reported financial results for the fourth quarter of 2021, TaskUs management guided for Q1 revenue of $232.2 million on the high end and an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 22.5%. After the market close yesterday, TaskUs management reported Q1 revenue of $239.7 million (up 57% year over year) and an adjusted EBITDA margin of 22.6% -- slightly besting its previous guidance on both counts.
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For full-year 2022, TaskUs management had previously guided for revenue of $980 million to $1 billion, and an adjusted EBITDA margin of 23%. Typically, a company that beats expectations for a quarter will raise expectations for the year at least by a comparable amount -- in other words, if a company beats guidance by $1 million, it will normally raise full-year expectations by $1 million to reflect this recent outperformance.
By contrast, TaskUs management simply affirmed full-year 2022 guidance. This implies that business isn't doing better than expected. Rather, the timing of revenue is simply off. With investors fleeing the stock market in droves in 2022, simply affirming guidance isn't seen as good enough, and TaskUs stock is getting hammered as a result.
Now what
Net income for TaskUs fell from $16.5 million in the first quarter of 2021 to $11.6 million in Q1 of 2022 as operating expenses grew 68% year over year -- faster than revenue growth. However, TaskUs is profitable nonetheless. And right now, the stock trades at less than two times its projected sales for 2022. That's pretty cheap for a high-growth, small-cap stock and might make TaskUs worth a closer look for investors looking for opportunities.
