Thoughtworks tops fourth-quarter estimates, but stock tumbles 17%+

Nasdaq-listed expertise consultancy Thoughtworks Holding Inc. topped income and earnings per share estimates within the fourth quarter, however its shares however misplaced over 17% of their worth throughout right now’s buying and selling session.

The selloff could also be related to the corporate’s pessimistic first-quarter outlook. In its earnings report right now, Thoughtworks projected a low single-digit income decline for the three months via March 31.

Chicago-based Thoughtworks is a significant supplier of expertise consulting providers. The corporate’s providers span a wide range of use instances starting from software growth to shifting on-premises functions to the cloud. It additionally helps its enterprise purchasers with much less technical duties, equivalent to creating more practical developer recruiting workflows.

Thoughtworks launched in 1993 and has since grown to greater than 12,500 workers. It listed its shares on the Nasdaq in 2021 via an initial public offering that raised $773 million. The corporate counts main manufacturers equivalent to Atlassian Corp., Porsche AG and Etsy Inc. as prospects.

Thoughtworks’ income grew 8.3% year-over-year, to $310.7 million, throughout the fourth quarter, a hair above the Zacks consensus estimate. The corporate has topped analysts’ income projections in every of the previous fourth quarters. 

“We’re happy with our efficiency within the fourth quarter and our purchasers proceed to look to us to assist them navigate these unsure occasions and sort out their largest expertise challenges,” stated Chief Government Officer Guo Xiao. “Our revenues have been $310.7 million for the fourth quarter, up 8.3% yr over yr and 14.7% in fixed forex, and $1.3 billion for the complete yr 2022, up 21.1% or 26.8% in fixed forex.”

Thoughtworks skilled gross sales development throughout all of the areas the place it operates. Its income in North America climbed 14.7% year-over-year, whereas enterprise items at different areas skilled single-digital development.

When damaged down by sector, the’ fourth-quarter outcomes paint a extra blended image. The corporate’s expertise and enterprise providers, journey, transportation, vitality, public and well being providers and auto sector income segments grew within the fourth quarter. However income from prospects within the retail, shopper, monetary providers and insurance coverage sectors declined barely on a year-over-year foundation. 

Thoughtworks generated a internet revenue of $16.1 million within the fourth quarter, in contrast with a $16.9 million loss 12 months earlier. That translated into adjusted diluted earnings per share of $0.1. Analysts polled for the Zacks consensus estimate had projected $0.09 per share.

The corporate expects to generate between $303 million and $305 million in income this quarter, or 5% to five.5% lower than the identical time a yr in the past. Nonetheless, it expects to return to development throughout the full fiscal yr. Thoughtworks expects to conclude 2023 with year-over-year income development of between 0.5% and a pair of.5%.

Picture: Thoughtworks