On November 7, 2023, Thoughtworks Holding Inc (TWKS, Financial), a leading global technology consultancy, released its financial results for the third quarter of 2023. The company reported Q3 revenues of $280.2 million, marking a year-over-year decline of 15.7%. Despite the decrease in revenue, Thoughtworks' restructuring program has resulted in $68 million in cost savings on an annualized basis.
Financial Performance and Restructuring Activities
Thoughtworks' CEO, Guo Xiao, commented on the company's performance, stating, "We delivered revenues of $280.2 million in the third quarter of 2023. We are seeing more stability in the demand environment and new logo acquisition continues to be a strength, with 34 new clients in the quarter. Our restructuring program is moving at pace. In the third quarter, we took actions to achieve $68 million of cost savings on an annualized basis."
The company's restructuring activities, announced last quarter, have led to significant changes in operational functions, the creation of a new organizational home for the majority of the client-facing workforce, a new regional market structure, and key leadership changes. The restructuring program is expected to realize annualized cost savings of approximately $75 million to $85 million.
Q3 2023 Financial Highlights
For Q3 2023, Thoughtworks reported a net loss margin of 9.2%, compared to 11.6% for the same period in 2022. The company's adjusted EBITDA Margin for Q3 was 12.0%, exceeding the guided range of 9.0% to 11.0%. Diluted loss per share for Q3 2023 was $(0.08), compared to $(0.12) for Q3 2022. Adjusted Diluted EPS for Q3 2023 was $0.04, exceeding the guided range of $0.02 to $0.03.
Updated Financial Outlook
Thoughtworks has updated its financial outlook for the full year and Q4 2023. For Q4, the company expects revenues in the range of $265 million to $270 million, reflecting a year-over-year decline of 15% to 13%. The company also anticipates an adjusted EBITDA Margin in the range of 10.5% to 12.5% and adjusted Diluted EPS in the range of $0.02 to $0.04.
For the full year, Thoughtworks expects revenues in the range of $1,139 million to $1,144 million, reflecting a year-over-year decline of 12%. The company also expects an adjusted EBITDA Margin in the range of 11.0% to 11.5% and adjusted Diluted EPS in the range of $0.12 to $0.14.
Thoughtworks will host a conference call and webcast to discuss the financial results in more detail.
Explore the complete 8-K earnings release (here) from Thoughtworks Holding Inc for further details.
