Thoughtworks(US:TWKS)2024-05-07 11:10Financial Performance - Revenues for Q1 2024 were $248.6 million, a decrease of 19% compared to $307.1 million in Q1 2023[20]. - Total operating expenses in Q1 2024 were $262.8 million, down from $301.4 million in Q1 2023, reflecting a reduction of 13%[20]. - The net loss for Q1 2024 was $30.9 million, compared to a net loss of $8.1 million in Q1 2023, representing an increase in loss of 282%[20]. - Basic and diluted loss per common share for Q1 2024 was $0.10, compared to $0.03 in Q1 2023[20]. - The net loss for the three months ended March 31, 2024, was $30.88 million, compared to a net loss of $8.10 million for the same period in 2023[24]. - Adjusted EBITDA for the three months ended March 31, 2024, was $6.8 million, with an adjusted EBITDA margin of 2.7%, down from $34.9 million and 11.4% in the previous year[78]. - The net loss for the three months ended March 31, 2024, was $30.9 million, compared to a net loss of $8.1 million for the same period in 2023, reflecting a significant increase in the net loss margin by 9.8 percentage points[82][86]. Assets and Liabilities - As of March 31, 2024, total assets decreased to $1,268,520,000 from $1,327,236,000 as of December 31, 2023, reflecting a decline of approximately 4.4%[18]. - Total current liabilities decreased to $132,590,000 from $159,280,000, a reduction of approximately 16.8%[18]. - Stockholders' equity decreased to $753,356,000 from $773,130,000, reflecting a decline of about 2.5%[18]. - Total liabilities decreased to $515.2 million as of March 31, 2024, compared to $554.1 million at the end of 2023[18]. - Long-term debt, including the current portion, was $291.5 million as of March 31, 2024, slightly down from $293.2 million at the end of 2023[122]. Cash Flow - Cash flows from operating activities showed a significant decrease, with a cash outflow of $15.75 million compared to an inflow of $33.05 million in the previous year[25]. - Cash used in investing activities was $4.14 million, a decrease from $17.56 million in the prior year, primarily due to lower acquisitions[25]. - Cash used in financing activities amounted to $4.78 million, down from $102.04 million in the previous year, reflecting reduced long-term debt obligations[25]. - The total cash, cash equivalents, and restricted cash at the end of the period was $74.21 million, down from $110.56 million at the end of the previous year[26]. - The company expects existing cash and cash equivalents, along with projected cash flow from operations, to be sufficient for operating and capital expenditure requirements for at least the next twelve months[136]. Revenue Sources - Revenue from North America for the three months ended March 31, 2024, was $88.8 million, representing 32.7% of total revenues, down from $115.1 million or 34.4% in 2023[44]. - Revenue from international operations accounted for 67.3% of total revenues for the three months ended March 31, 2024, compared to 65.6% in 2023[40]. - Revenues from North America decreased by 22.8% to $88.8 million, while revenues from APAC decreased by 11.0% to $86.7 million[95]. Stock and Compensation - The company reported a total stock-based compensation expense of $10.6 million for the three months ended March 31, 2024, down from $17.7 million in the same period in 2023[87]. - The unvested balance of Restricted Stock Units (RSUs) at March 31, 2024, is 12,814,567, with a weighted average grant date fair value of $7.89[60]. - The total compensation cost related to RSUs not yet recognized is $85.4 million, to be recognized over a weighted-average period of 2.5 years[61]. Restructuring and Organizational Changes - The company reported a restructuring expense of $2.1 million in Q1 2024, which was not present in Q1 2023[20]. - The company announced a structural reorganization on August 8, 2023, aimed at centralizing operational functions and evolving its regional market structure[70]. Client and Market Activity - The number of clients increased to 501 as of March 31, 2024, from 442 in the same period in 2023, while the net dollar retention rate dropped to 86% from 106%[89]. - The company contracted with 49 new logos during the first quarter of 2024, focusing on sectors such as energy, public and health services, and technology[90]. Compliance and Regulatory Risks - The company continues to face risks related to compliance with laws and regulations, which may impact financial performance and investor confidence[17].