There are few events more powerful for a publicly traded stock than an encouraging earnings report. That was the case Tuesday with Thoughtworks Holding (TWKS +0.00%); the IT consultancy delivered a first-quarter set of figures that surprised on the upside with certain elements of its guidance. For this, the company was rewarded with a nearly 20% gain in share price on the day, a far better figure than the marginal gain posted by the S&P 500 index.
Two declines; one beat
That morning, Thoughtworks divulged that it earned just under $249 million in revenue for said quarter. This was 19% lower on a year-over-year basis, but analysts tracking the company were bracing for worse -- they collectively estimated a figure of slightly over $243 million.
As for the bottom-line result, Thoughtworks flipped to a non-GAAP net loss of $7.4 million, or $0.02 per share, from the year-ago profit of $10.1 million. This matched the consensus pundit forecast.
Despite the declines and the flip into the red, Thoughtworks sounded a bullish note about its future. It said that bookings were strong during the quarter, and it signed up 49 new clients. It also sounded the magic tech sector buzz phrase of the moment, artificial intelligence (AI), stating that customers are expressing high interest in the company's AI services.
NASDAQ: TWKS
Key Data Points
Strong quarterly and annual revenue guidance
An optimistic tone and the mention of AI weren't the only factors behind the sharply positive investor reaction to the earnings report. Thoughtworks also proffered guidance for both its current second quarter and the entirety of 2024.
For the former, it's anticipating revenue of $250 million to $255 million, and an adjusted bottom-line result ranging from a loss of $0.01 per shares to an income at the same amount. The consensus analyst estimates for the two are, respectively, $243 million and a profit of $0.01.
As for full-year 2024, the outlook is for $995 million to $1.02 billion on the top line and $0.02 to $0.08 per share for net income. The respective prognosticator projections are just under $989 million and $0.05 per share.
