TASKUS, INC. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q (this "Quarterly Report"), the financial statements and related notes included in our Annual Report on Form 10-K for the year endedDecember 31, 2021 (the Annual Report"), as filed with theSecurities and Exchange Commission (the "SEC") and the information included under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Annual Report. In addition to historical data, the following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in our forward-looking statements as a result of various factors, including but not limited to those discussed under "Cautionary Note Regarding Forward-Looking Statements" in this Quarterly Report and under Part I, Item 1A, "Risk Factors" in the Annual Report. This Quarterly Report includes certain historical consolidated financial and other data forTaskUs, Inc. ("we," "us," "our" or the "Company"). The following discussion provides a narrative of our results of operations and financial condition for the three months endedMarch 31, 2022 and 2021.
Overview
We provide digital outsourced services, focused on serving high-growth
technology companies to represent, protect and grow their brands. Our global,
omni-channel delivery model is focused on providing our clients three key
services - Digital Customer Experience, Content Security and Artificial
Intelligence ("AI") Services (formerly known as AI Operations). We have designed
our platform to enable us to rapidly scale and benefit from our clients' growth.
We believe our ability to deliver "ridiculously good" outsourcing will enable us
to continue to grow our client base.
At TaskUs , culture is at the heart of everything we do. Many of the companies
operating in the Digital Economy are well-known for their obsession with
creating a world-class employee experience. We believe clients choose TaskUs in
part because they view our company culture as aligned with their own, which
enables us to act as a natural extension of their brands and gives us an
advantage in the recruitment of highly engaged frontline teammates who produce
better results.
Recent Financial Highlights
For the three months ended
Net income for the three months endedMarch 31, 2022 decreased to$11.6 million from$16.5 million for the three months endedMarch 31, 2021 . This decrease included non-cash stock-based compensation expense which we began recognizing upon our initial public offering ("IPO"). Adjusted Net Income for the three months endedMarch 31, 2022 increased 24.0% to$35.0 million from$28.2 million for the three months endedMarch 31, 2021 . Adjusted EBITDA for the three months endedMarch 31, 2022 increased 36.9% to$54.1 million from$39.5 million for the three months endedMarch 31, 2021 .
The operating results in any period are not necessarily indicative of the results that may be expected for any future period.
Subsequent Events
For a description of subsequent events, see Note 12, "Subsequent Events" in the
Notes to Unaudited Condensed Consolidated Financial Statements included in this
Quarterly Report.
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Results of Operations
Comparison of the Three Months Ended
The following tables set forth certain historical consolidated financial
information for the three months ended
Three months ended March 31, Period over Period Change
(in thousands, except %) 2022 2021 ($) (%)
Service revenue $ 239,680 $ 152,871 $ 86,809 56.8 %
Operating expenses:
Cost of services 141,282 88,030 53,252 60.5 %
Selling, general, and administrative
expense 64,247 31,498 32,749 104.0 %
Depreciation 8,901 6,203 2,698 43.5 %
Amortization of intangible assets 4,711 4,712 (1) -
Loss (gain) on disposal of assets (15) 27 (42) (155.6) %
Total operating expenses 219,126 130,470 88,656 68.0 %
Operating income 20,554 22,401 (1,847) (8.2) %
Other expense 1,053 754 299 39.7 %
Financing expenses 1,602 1,581 21 1.3 %
Income before income taxes 17,899 20,066 (2,167) (10.8) %
Provision for income taxes 6,313 3,559 2,754 77.4 %
Net income $ 11,586 $ 16,507 $ (4,921) (29.8) %
Service revenue
Service revenue for the three months ended March 31, 2022 and 2021 was $239.7
million and $152.9 million , respectively. Service revenue for the three months
ended March 31, 2022 increased by $86.8 million or 56.8% when compared to the
three months ended March 31, 2021 .
Service revenue by service offering
The following table presents the breakdown of our service revenue by service
offering for each period:
Three months ended March 31, Period over Period Change
(in thousands, except %) 2022 2021 ($) (%)
Digital Customer Experience $ 159,731 $ 99,711 $ 60,020 60.2 %
Content Security 45,852 36,127 9,725 26.9 %
AI Services 34,097 17,033 17,064 100.2 %
Service revenue $ 239,680 $ 152,871 $ 86,809 56.8 %
The year over year growth in Digital Customer Experience, AI Services and
Content Security contributed 39.2%, 11.2% and 6.4%, respectively, of the total
increase of 56.8% for the three months ended March 31, 2022 . The 60.2% growth in
Digital Customer Experience was primarily driven by an increase in volume of
services to our existing customers and new customer wins. The 100.2% growth in
AI Services was driven by an increase in volume of services to our existing
customers and new customer wins. The 26.9% growth in Content Security was
primarily driven by an increase in volume of services to our existing customers.
Service revenue by delivery geography
The majority of our service revenues are derived from contracts with clients who are either located inthe United States , or with clients who are located outside ofthe United States but whereby the contract specifies payment inUnited States dollars. However, we deliver our services from multiple locations around the world. 16
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The following table presents the breakdown of our service revenue by
geographical location, based on where the services are provided, for each
period:
Three months ended March 31 , Period over Period Change
(in thousands, except %) 2022
2021 ($) (%)
Philippines $ 120,080 $ 84,578 $ 35,502 42.0 %
United States 79,131 50,757 28,374 55.9 %
Rest of World 40,469 17,536 22,933 130.8 %
Service revenue $ 239,680 $ 152,871 $ 86,809 56.8 %
Revenue generated from services provided from our delivery sites in the
Philippines grew from expansion in all three of our service offerings, Digital
Customer Experience, Content Security and AI Services, which contributed 30.0%,
7.4%, and 4.6% of the total increase of 42.0% in the Philippines , respectively.
Revenue generated from services provided from our delivery sites in the United
States grew primarily from expansion in two of our service offerings, Digital
Customer Experience and AI Services, which contributed 42.6% and 13.2% of the
total increase of 55.9% in the United States , respectively, while Content
Security remained mostly flat, contributing 0.1%, due to certain clients
electing to shift work to the Philippines . We expect this shift to continue
through the rest of the year as we work to deliver service out of our clients'
optimal geography, which allows us to serve clients better in the long-term.
Revenue generated from services provided from our delivery sites in the Rest of
World grew primarily from expansion in
Operating expenses
Cost of services
Cost of services for the three months endedMarch 31, 2022 and 2021 was$141.3 million and$88.0 million , respectively. Cost of services for the three months endedMarch 31, 2022 increased by$53.3 million , or 60.5%, when compared to the three months endedMarch 31, 2021 . The increase was primarily driven by personnel costs of$46.2 million related to an increase in headcount to meet the demand in services from our clients. The remaining increase included costs associated with site expansions, investments in software, as well as recruiting and professional development costs to support revenue growth as we expand into new geographies.
Selling, general, and administrative expense
Selling, general, and administrative expense for the three months endedMarch 31, 2022 and 2021 was$64.2 million and$31.5 million , respectively. Selling, general, and administrative expense for the three months endedMarch 31, 2022 increased by$32.7 million , or 104.0%, when compared to the three months endedMarch 31, 2021 . The increase was primarily driven by higher personnel costs of$26.7 million due primarily to stock-based compensation expense for equity-classified awards of$18.9 million and increased headcount across functions in support of our growth. The remaining increase included investments in software, insurance expense and recruiting and professional development.
Depreciation
Depreciation for the three months endedMarch 31, 2022 and 2021 was$8.9 million and$6.2 million , respectively. The increase in depreciation is a result of capital expenditures for additional technology and computers in support of our company-wide work-from-home policy, as well as leasehold improvements associated with site expansions to support revenue growth.
Amortization of intangible assets
Amortization of intangible assets for the three months endedMarch 31, 2022 and 2021 was$4.7 million . Amortization can be attributed to the recognition of client relationship and trade name intangible assets recognized in connection with the Blackstone Acquisition that are being amortized on a straight-line basis.
Other expense
Other expense for the three months endedMarch 31, 2022 and 2021 was$1.1 million and$0.8 million , respectively. Changes are driven by our exposure to foreign currency exchange risk resulting from our operations in foreign geographies, primarilythe Philippines , offset by economic hedges using foreign currency exchange rate forward contracts.
Financing expenses
Financing expense for the three months endedMarch 31, 2022 and 2021 was$1.6 million and$1.6 million , respectively. Changes in financing expense are primarily driven by the the rate of LIBOR used to calculate the interest rate of the term loan. See "-Liquidity and Capital Resources-Indebtedness-2019 Credit Agreement" for additional discussion on term loan. 17
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Provision for income taxes
Provision for income taxes for the three months endedMarch 31, 2022 and 2021 was$6.3 million and$3.6 million , respectively. Our effective tax rate for the three months endedMarch 31, 2022 and 2021 was 35.3% and 17.7%, respectively. There are certain items included within the provision for income taxes calculation which are directly related to the IPO and not expected to recur in future periods, including equity awards made to officers which are not deductible under Section 162(m) of the Internal Revenue Code. Additionally, there are costs related to the issuance of stock-based compensation included within the provision for income taxes calculation. If those costs directly related to the IPO and stock-based compensation expense are removed, the provision for income taxes would have been$8.7 million and the effective tax rate would have been 23.1% for the three months endedMarch 31, 2022 .
Revenue by Top Clients
The table below sets forth the percentage of our total service revenue derived from our largest clients for the three months endedMarch 31, 2022 and 2021: Three months ended March 31, 2022 2021 Top ten clients 61 % 64 % Top twenty clients 75 % 78 % Our clients are part of the rapidly growing Digital Economy and they rely on our suite of digital solutions to drive their continued success. For our existing clients, we benefit from our ability to grow as they grow and to cross sell new solutions, further deepening our entrenchment. For the three months endedMarch 31, 2022 and 2021, we generated 24% and 29%, respectively, of our service revenue from our largest client, and we generated 10% and 11%, respectively, of our service revenue from our second largest client. We continue to identify and target high growth industry verticals and clients. Our strategy is to acquire new clients and further grow with our existing ones in order to achieve meaningful client and revenue diversification over time.
Foreign Currency
As a global company, we face exposure to movements in foreign currency exchange rates. Fluctuations in foreign currencies impact the amount of total assets, liabilities, revenue, operating expenses and cash flows that we report for our foreign subsidiaries upon the translation of these amounts intoU.S. dollars. See Item 3., "Quantitative and Qualitative Disclosures About Market Risk" for additional information on how foreign currency impacts our financial results.
Non-GAAP Financial Measures
We use Adjusted Net Income, Adjusted Earnings Per Share ("EPS"), EBITDA and Adjusted EBITDA as key profitability measures to assess the performance of our business.
Each of the profitability measures described below are not recognized under GAAP and do not purport to be an alternative to net income as a measure of our performance. Such measures have limitations as analytical tools, and you should not consider any of such measures in isolation or as substitutes for our results as reported under GAAP. Adjusted Net Income, Adjusted EPS, EBITDA, and Adjusted EBITDA exclude items that can have a significant effect on our profit or loss and should, therefore, be used in conjunction with profit or loss for the period. Our management compensates for the limitations of using non-GAAP financial measures by using them to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. Because not all companies use identical calculations, these measures may not be comparable to other similarly titled measures of other companies.
Adjusted Net Income
Adjusted Net Income is a non-GAAP profitability measure that represents net
income or loss for the period before the impact of amortization of intangible
assets and certain items that are considered to hinder comparison of the
performance of our businesses on a period-over-period basis or with other
businesses. During the periods presented, we exclude from Adjusted Net Income
amortization of intangible assets, transaction costs, the effect of foreign
currency gains and losses, losses on disposals of assets, COVID-19 related
expenses, natural disaster costs, stock-based compensation expense and employer
payroll tax associated with equity-classified awards and the related effect on
income taxes of certain pre-tax adjustments, which include costs that are
required to be expensed in accordance with GAAP. Our management believes that
the inclusion of supplementary
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adjustments to net income applied in presenting Adjusted Net Income are appropriate to provide additional information to investors about certain material non-cash items and about unusual items that we do not expect to continue at the same level in the future.
The following table reconciles net income, the most directly comparable GAAP measure, to Adjusted Net Income for the three months endedMarch 31, 2022 and 2021: Three months ended March 31, Period over Period Change (in thousands, except %) 2022 2021 ($) (%) Net income$ 11,586 $ 16,507 $ (4,921) (29.8) % Amortization of intangible assets 4,711 4,712 (1) - % Transaction costs(1) 192 3,329 (3,137) (94.2) % Foreign currency losses(2) 1,153 787 366 46.5 % Loss (gain) on disposal of assets (15) 27 (42) (155.6) % COVID-19 related expenses(3) - 2,394 (2,394) (100.0) % Natural disaster costs(4) - 442 (442) (100.0) % Stock-based compensation expense(5) 19,688 - 19,688 100.0 % Tax impacts of adjustments(6) (2,350) - (2,350) (100.0) % Adjusted Net Income$ 34,965 $ 28,198 $ 6,767 24.0 % Net Income Margin(7) 4.8 % 10.8 % Adjusted Net Income Margin(7) 14.6 % 18.4 %
(1) Represents non-recurring professional service fees related to the acquisition of heloo
in 2022 and the preparation for public offerings that have been expensed during the
period in 2021. (2) Realized and unrealized foreign currency losses include the effect of fair market value
changes of forward contracts and remeasurement of
foreign currency. (3) Represents incremental expenses incurred related to the transition to a virtual
operating model and incentive and leave pay granted to employees that are directly
attributable to the COVID-19 pandemic. (4) Represents one-time costs associated with emergency housing, transportation costs and
bonuses for our employees in connection with the natural disaster related to the severe
winter storm in
(5) Represents stock-based compensation expense and employer payroll tax associated with
equity-classified awards. (6) Represents tax impacts of adjustments to net income which resulted in a tax benefit
during the period, including stock-based compensation expense after the IPO. (7) Net Income Margin represents net income divided by service revenue and Adjusted Net
Income Margin represents Adjusted Net Income divided by service revenue.
Adjusted EPS
Adjusted EPS is a non-GAAP profitability measure that represents earnings
available to shareholders excluding the impact of certain items that are
considered to hinder comparison of the performance of our business on a
period-over-period basis or with other businesses. Adjusted EPS is calculated as
Adjusted Net Income divided by our diluted weighted-average number of shares
outstanding, including the impact of any potentially dilutive common stock
equivalents that are anti-dilutive to GAAP net income (loss) per share - diluted
("GAAP diluted EPS") but dilutive to Adjusted EPS. Our management believes that
the inclusion of supplementary adjustments to earnings per share applied in
presenting Adjusted EPS are appropriate to provide additional information to
investors about certain material non-cash items and about unusual items that we
do not expect to continue at the same level in the future.
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The following table reconciles GAAP diluted EPS, the most directly comparable GAAP measure, to Adjusted EPS for the three months endedMarch 31, 2022 and 2021: Three months ended March 31, 2022 2021 GAAP diluted EPS $ 0.11$ 0.18 Per share adjustments to net income(1) 0.23 0.13 Adjusted EPS $ 0.34$ 0.31 Weighted-average common shares outstanding - diluted 104,122,026 91,737,020
(1) Reflects the aggregate adjustments made to reconcile net income to Adjusted Net Income,
as noted in the above table, divided by the GAAP diluted weighted-average number of
shares outstanding for the relevant period.
EBITDA and Adjusted EBITDA
EBITDA is a non-GAAP profitability measure that represents net income or loss
for the period before the impact of the benefit from or provision for income
taxes, financing expenses, depreciation, and amortization of intangible assets.
EBITDA eliminates potential differences in performance caused by variations in
capital structures (affecting financing expenses), tax positions (such as the
availability of net operating losses against which to relieve taxable profits),
the cost and age of tangible assets (affecting relative depreciation expense)
and the extent to which intangible assets are identifiable (affecting relative
amortization expense).
Adjusted EBITDA is a non-GAAP profitability measure that represents EBITDA
before certain items that are considered to hinder comparison of the performance
of our businesses on a period-over-period basis or with other businesses. During
the periods presented, we exclude from Adjusted EBITDA transaction costs, the
effect of foreign currency gains and losses, losses on disposals of assets,
COVID-19 related expenses, natural disaster costs and stock-based compensation
expense and employer payroll tax associated with equity-classified awards, which
include costs that are required to be expensed in accordance with GAAP. Our
management believes that the inclusion of supplementary adjustments to EBITDA
applied in presenting Adjusted EBITDA are appropriate to provide additional
information to investors about certain material non-cash items and about unusual
items that we do not expect to continue at the same level in the future.
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The following table reconciles net income, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA for the three months endedMarch 31, 2022 and 2021: Three months endedMarch 31 , Period over Period Change
(in thousands, except %) 2022 2021 ($) (%) Net income$ 11,586 $ 16,507 $ (4,921) (29.8) % Provision for income taxes 6,313 3,559 2,754 77.4 % Financing expenses 1,602 1,581 21 1.3 % Depreciation 8,901 6,203 2,698 43.5 % Amortization of intangible assets 4,711 4,712 (1) - % EBITDA$ 33,113 $ 32,562 $ 551 1.7 % Transaction costs(1) 192 3,329 (3,137) (94.2) % Foreign currency losses(2) 1,153 787 366 46.5 % Loss (gain) on disposal of assets (15) 27 (42) (155.6) % COVID-19 related expenses(3) - 2,394 (2,394) (100.0) % Natural disaster costs(4) - 442 (442) (100.0) % Stock-based compensation expense(5) 19,688 - 19,688 100.0 % Adjusted EBITDA$ 54,131 $ 39,541 $ 14,590 36.9 % Net Income Margin(6) 4.8 % 10.8 % Adjusted EBITDA Margin(6) 22.6 % 25.9 %
(1) Represents non-recurring professional service fees related to the acquisition of heloo
in 2022 and the preparation for public offerings that have been expensed during the
period in 2021. (2) Realized and unrealized foreign currency losses include the effect of fair market value
changes of forward contracts and remeasurement of
foreign currency. (3) Represents incremental expenses incurred related to the transition to a virtual
operating model and incentive and leave pay granted to employees that are directly
attributable to the COVID-19 pandemic. (4) Represents one-time costs associated with emergency housing, transportation costs and
bonuses for our employees in connection with the natural disaster related to the severe
winter storm in
(5) Represents stock-based compensation expense and employer payroll tax associated with
equity-classified awards. (6) Net Income Margin represents net income divided by service revenue and Adjusted Net
Income Margin represents Adjusted Net Income divided by service revenue.
Liquidity and Capital Resources
As of
We have financed our operations primarily through cash received from operations.
We believe our existing cash and cash equivalents and our 2019 Credit Facilities
will be sufficient to meet our working capital and capital expenditure needs for
at least the next 12 months. Our future capital requirements will depend on
several factors, including but not limited to our obligation to repay any
amounts outstanding under our 2019 Credit Facilities, our revenue growth rate,
timing of client billing and collections, the timing of expansion into new
geographies, variability in the cost of delivering services in our geographies,
the timing and extent of spending on technology innovation, the extent of our
sales and marketing activities, and the introduction of new and enhanced service
offerings and the continuing market adoption of our platform.
To the extent additional funds are necessary to meet our long-term liquidity
needs as we continue to execute our business strategy, we anticipate that they
will be obtained through the incurrence of additional indebtedness, additional
equity financings or a combination of these potential sources of funds; however,
such financing may not be available on favorable terms, or at all. In
particular, the widespread COVID-19 pandemic has resulted in, and may continue
to result in, significant disruption of global financial markets, reducing our
ability to access capital. If we are unable to raise additional funds when
desired, our business, financial condition and results of operations could be
adversely affected.
Although we are not currently a party to any material definitive agreement
regarding potential investments in, or acquisitions of, complementary
businesses, applications or technologies, we may enter into these types of
arrangements, which could reduce our cash and cash equivalents, require us to
seek additional equity or debt financing or repatriate cash generated by our
international operations that could cause us to incur withholding taxes on any
distributions. Additional funds from financing arrangements may not be available
on terms favorable to us or at all.
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As market conditions warrant, we and certain of our equity holders, includingBlackstone and their respective affiliates, may from time to time seek to purchase our outstanding debt securities or loans, including borrowings under our 2019 Credit Facilities, in privately negotiated or open market transactions, by tender offer or otherwise. Subject to any applicable limitations contained in the agreements governing our indebtedness, any purchases made by us may be funded by the use of cash on our balance sheet or the incurrence of new secured or unsecured debt, including borrowings under our credit facilities. The amounts involved in any such purchase transactions, individually or in the aggregate, may be material. Any such purchases may be with respect to a substantial amount of a particular class or series of debt, with the attendant reduction in the trading liquidity of such class or series. In addition, any such purchases made at prices below the "adjusted issue price" (as defined forU.S. federal income tax purposes) may result in taxable cancellation of indebtedness income to us, which amounts may be material, and in related adverse tax consequences to us.
Indebtedness
As of
2019 Credit Agreement
OnSeptember 25, 2019 , we entered into a credit agreement (the "2019 Credit Agreement") that included a$210 million term loan (the "Term Loan Facility") and a$40 million revolving credit facility (the "Revolving Credit Facility" and, together with the Term Loan Facility, the "2019 Credit Facilities"). OnApril 30, 2021 , the Company entered into Amendment No. 1 to its 2019 Credit Agreement with the existing lenders providing for$50.0 million incremental revolving credit commitments on the same terms as our existing revolving credit facility. We accounted for this amendment as a debt modification and recorded$0.3 million of debt financing fees which will be amortized, along with previously deferred fees, over the remaining term of the facility. The Term Loan Facility matures onSeptember 25, 2024 and requires quarterly principal payments of 0.25% of the original principal amount per quarter throughSeptember 30, 2020 , 0.625% of the original principal amount throughSeptember 30, 2021 , 1.25% of the original principal amount throughSeptember 30, 2022 , 1.875% of the original principal amount throughSeptember 30, 2023 and 2.50% of the original principal amount thereafter, with any remaining principal due in a lump sum at the maturity date. As ofMarch 31, 2022 ,$197.4 million was outstanding under the Term Loan Facility. The interest rate in effect for the Term Loan Facility was 2.707% as ofMarch 31, 2022 . The Revolving Credit Facility matures onSeptember 25, 2024 and requires a commitment fee of 0.4% on undrawn commitments paid quarterly in arrears. As ofMarch 31, 2022 , the interest rate in effect was 2.707% on$39.9 million of outstanding borrowings under the Revolving Credit Facility. As ofMarch 31, 2022 , we had$50.1 million of borrowing availability under the Revolving Credit Facility. The 2019 Credit Agreement contains certain affirmative and negative covenants applicable to us and our restricted subsidiaries, including, among other things, limitations on our Consolidated Total Net Leverage Ratio (as defined in the 2019 Credit Agreement) and restrictions on changes in the nature of our business, acquisitions and other investments, indebtedness, liens, fundamental changes, dispositions, prepayment of other indebtedness, repurchases of stock, cash dividends, and other distributions. The 2019 Credit Facilities are guaranteed by our material domestic subsidiaries and are secured by substantially all of our tangible and intangible assets, including our intellectual property, and the equity interests of our subsidiaries, subject to certain exceptions.
See Note 7, "Long-Term Debt" in the Notes to Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report for additional information regarding our debt.
Cash Flows
The following table presents a summary of our consolidated cash flows from operating, investing and financing activities for the periods indicated:
Three months ended (in thousands) 2022
2021
Net cash provided by operating activities$ 36,890
Net cash used in investing activities (17,770)
(10,127)
Net cash used in financing activities (4,094)
(1,313)
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Operating Activities
Net cash provided by operating activities for the three months endedMarch 31, 2022 was$36.9 million compared to net cash provided by operating activities of$39.9 million for the three months endedMarch 31, 2021 . Net cash provided by operating activities for the three months endedMarch 31, 2022 reflects the net income of$11.6 million , as well as the add back for non-cash charges totaling$34.6 million , primarily driven by$19.6 million in stock-based compensation expense,$8.9 million of depreciation and$4.7 million of amortization related to intangibles. These changes were partially offset by changes in operating assets and liabilities of$9.3 million . Net cash provided by operating activities for the three months endedMarch 31, 2021 reflects the net income of$16.5 million , the add back for non-cash charges totaling$13.1 million , primarily driven by$6.2 million of depreciation and$4.7 million of amortization related to intangibles, as well as changes in operating assets and liabilities of$10.3 million . Investing Activities Net cash used in investing activities for the three months endedMarch 31, 2022 was$17.8 million compared to net cash used in investing activities of$10.1 million for the three months endedMarch 31, 2021 . Net cash used in investing activities primarily consisted of investments in technology and computers as well as build-out costs associated with site expansions to support revenue growth.
Financing Activities
Net cash used in financing activities for the three months endedMarch 31, 2022 was$4.1 million compared to net cash used in financing activities of$1.3 million for the three months endedMarch 31, 2021 . Net cash used in financing activities for the three months endedMarch 31, 2022 consisted of payments on long-term debt and payments for taxes related to net share settlement of equity awards. Net cash used in financing activities for the three months endedMarch 31, 2021 consisted primarily of payments on long-term debt.
Critical Accounting Policies and Estimates
Except as described in Note 2, "Summary of Significant Accounting Policies" in the Notes to Unaudited Condensed Consolidated Financial Statements, there have been no material changes to our critical accounting policies or in the underlying accounting assumptions and estimates used in such policies as reported in our Annual Report.
Recent Accounting Pronouncements
For additional information regarding recent accounting pronouncements adopted and under evaluation, refer to Note 2, "Summary of Significant Accounting Policies" in the Notes to Unaudited Condensed Consolidated Financial Statements.
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