CHICAGO - Thoughtworks Holding, Inc. (NASDAQ:TWKS), a global technology consultancy firm, reported its first-quarter financial results, demonstrating a revenue beat against analyst expectations. TWKS shares were up 3% in premarket trading Tuesday.
The company announced a quarterly revenue of $248.6 million, surpassing the consensus estimate of $243.09 million. The company reported Q1 EPS of ($0.02), in-line with the analyst estimate of ($0.02).
Despite the challenging macroeconomic environment, Thoughtworks achieved revenues that exceeded their initial projections for the first quarter. CEO Guo Xiao expressed gratitude towards the company's employees for their dedication to delivering significant impact for clients.
Thoughtworks' focus on driving efficiencies through its restructuring program is anticipated to support the company's margin profile for 2024. The firm expects to see a return to sequential quarter-over-quarter revenue growth in the second quarter of 2024.
The company's restructuring efforts, which began on August 8, 2023, have led to $87 million in annualized savings, exceeding the targeted range of $75 million to $85 million. Thoughtworks is now expanding its restructuring program to achieve additional savings of $25 million to $30 million, aiming for total savings of $100 million to $115 million by the end of the third quarter of 2024.
For the first quarter, Thoughtworks reported a year-over-year (YoY) revenue decline of 19.0%, or 18.7% in constant currency. The net loss margin was (12.4)% compared to (2.6)% for the same quarter last year, and the adjusted EBITDA Margin was 2.7%, down from 11.4% in the previous year.
Looking ahead, Thoughtworks provided guidance for the second quarter of 2024, with expected revenues between $250 million and $255 million, reflecting a YoY decline of 13% to 11%. The adjusted EBITDA Margin is projected to be between 5.5% and 7.5%, and the adjusted diluted loss per share is forecasted to range from ($0.01) to $0.01. This guidance is optimistic compared to the consensus estimate for Q2 EPS of $0.01 and revenue of $243.2 million.
For the full year 2024, Thoughtworks has raised its revenue outlook to a range of $995 million to $1,020 million, indicating a YoY decline of 12% to 9%. The adjusted diluted EPS is expected to be between $0.02 and $0.08, with the midpoint of this range slightly below the consensus estimate of $0.05. The full-year adjusted EBITDA Margin is anticipated to be between 8.0% and 10.0%.
Thoughtworks' CEO highlighted the company's thought leadership and skilled technologists as key factors in positioning the firm to assist clients in leveraging cloud, data, and AI technologies for future success.
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