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United States securities and exchange commission logo
April 6, 2021
Jeffrey Chugg
Vice President, Legal
TaskUs, Inc.
1650 Independence Drive, Suite 100
New Braunfels, TX 78132
Re: TaskUs, Inc.
Amendment No. 3 to
Draft Registration Statement on Form S-1
Submitted March 23,
2021
CIK No. 0001829864
Dear Mr. Chugg:
We have reviewed your amended draft registration statement and
have the following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Form S-1 DRS/A Submitted March 23, 2021
Summary Historical Consolidated Financial and Other Data, page 20
1. With respect to
Adjusted EBITDA margin and Adjusted net income margin, disclose the
respective comparable
ratios calculated using GAAP amounts. Refer to Items
10(e)1(i)(A) and (B) of
Regulation S-K and footnote 27 of non-GAAP adopting Release
No. 33-8176. Please
revise disclosure on pages 80-84 and 96-101 accordingly.
2. We note that you have
included incentive and leave pay granted to employees that are
directly attributable
to the COVID-19 pandemic and you also included payments that will
be due to sellers in
the Blackstone Acquisition for certain tax benefits realized as a result
of the Blackstock
Acquisition. Please expand the disclosure to clarify whether the
adjustments are
incremental to normal operations, how the adjustments are directly
Jeffrey Chugg
FirstName LastNameJeffrey Chugg
TaskUs, Inc.
Comapany
April NameTaskUs, Inc.
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attributable to COVID-19 and whether the adjustments are based on
actual or hypothetical
amounts. Refer to CF Disclosure Guidance Topic 9 for guidance. Please
also expand the
disclosure on pages 82, 84 and 99-101 accordingly.
Dilution, page 78
3. Clarify that there is a net tangible deficit.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Trends and Factors Affecting Our Performance
New Client Wins, page 87
4. Please explain why you no longer provide your metric Annual Contract
Value ( ACV ) in
your prospectus. You previously disclosed that ACV was a leading
indicator of revenue
opportunity in existing and new clients. In your explanation, please
clarify if there were
material changes in ACV in fiscal year 2020 from the fiscal year 2019.
Further, please
clarify whether your win rate metric is consistent with your ACV
year-to-year changes.
5. On page iii, we note that you changed the definition of New Client Win
to remove the
reference that it may include new business generated from new unit or
division of an
existing client. Please explain the change in the definition and
clarify whether your New
Client Win metric no longer includes business from new divisions or
units of existing
clients.
Hiring and Retention of Employees, page 88
6. We note that you disclose your voluntary attrition rate for employees
employed for more
than 180 days for 2020. Please consider including the rate for 2019
for comparability or
tell us why you believe such disclosure is not required.
Key Operating Metrics, page 96
7. We note that your Net Revenue Retention Rate declined from 139% in
2019 to 117% in
2020, which you attribute to reduction in volumes in certain
clients who experienced a
decline in their end customer volumes because of lockdown restrictions
globally. Please
discuss whether this is a known material trend or uncertainty that
will have, or is
reasonably likely to have, a material impact on your revenues in any
material way. To the
extent material, provide more details of these clients and clarify and
quantify how much of
the decline is attributable to specific clients or client verticals.
Financial Statements
Note (2) Summary of Significant Accounting Policies
(j) Revenue Recognition, page F-10
8. We note on page 49 that your contracts with customers include
obligations to satisfy
certain performance indicators, such as average handle time, job
count, productivity, total
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TaskUs, Inc.
April 6, 2021
Page 3
review time and accuracy and that if you fail to meet such performance
indicators, you
could be obligated to reduce your clients' payment under such
contracts. Please expand
your revenue recognition accounting policy to explain how these
contract terms impact
your determination of performance obligations and amount and timing of
revenue
recognition.
(l) Property and Equipment, page F-11
9. We note that you extended the useful lives of leasehold improvements
in 2020. In light of
your recent lease terminations, please expand the disclosure to
explain the basis for your
belief that the useful lives should be extended. Also, in light of
your disclosure that the
shorter lives are based in part on your historical use of the asset
and normal
practice, supplementally provide us with your analysis as to why this
change is a change
in estimate rather than a correction of an error.
Note (10) Income Taxes, page F-25
10. We note on pages 57 and 137 that under the PEZA registrations,
favorable tax treatment
for some of your PEZA-registered sites expired at the end of 2020 but
may be renewed for
subsequent periods provided you meet certain criteria. Please expand
the disclosure to
detail these expirations and clarify whether you continue to meet
criteria subsequent to
year end. If material, disclose the amount of the favorable tax
treatment that may not
meet the certain criteria subsequent to year end.
Note (14) Subsequent Events, page F-28
11. We note on page 1 that references to "common stock" includes your Class
A common
stock, Class B common stock and Class C common stock. We also note on
page 166 that
Class B will have 10 votes and Class B shareholders will control the
registrant following
the IPO. Please include detailed disclosure of the capital structure
change as a subsequent
event that occurs prior to effectiveness. Please include in your
disclosure the terms of the
new classes on common stock and whether all shareholders prior to the
capital structure
FirstName LastNameJeffrey Chugg
change participated equally in the issuance of Class B common stock. If
not, disclose
Comapany
yourNameTaskUs, Inc.
accounting methodology for the change in capital structure
regarding any preferential
April 6,treatment of 3certain investors (i.e. special stock dividends).
2021 Page
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Jeffrey Chugg
FirstName LastNameJeffrey Chugg
TaskUs, Inc.
Comapany
April NameTaskUs, Inc.
6, 2021
April 46, 2021 Page 4
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You may contact Claire DeLabar, Staff Accountant, at (202) 551-3349 or
Robert Littlepage, Accounting Branch Chief, at (202) 551-3361 if you have
questions
regarding comments on the financial statements and related matters. Please
contact Edwin Kim,
Staff Attorney, at (202) 551- 3297 or Jan Woo, Legal Branch Chief, at (202)
551-3453 with any
other questions.
Sincerely,
Division of
Corporation Finance
Office of Technology
cc: Edgar J. Lewandowski, Esq.