Thoughtworks Holding, Inc. (TWKS): history, ownership, mission, how it works & makes money

A Brief History of Thoughtworks Holding, Inc.

Thoughtworks Holding, Inc. (TWKS) was founded in 1993 and has grown to become a prominent player in the IT services sector, focusing on providing digital transformation and technology consulting services. The company went public in 2021, listing on the NASDAQ with an initial public offering price of $21 per share.

Financial Performance Overview (2024)

As of June 30, 2024, Thoughtworks reported a significant decrease in revenue compared to previous periods. The total revenues for the three months ended June 30, 2024, were $251.7 million, down from $287.2 million in the same quarter of the previous year, representing a decline of approximately 12.4%. For the six months ended June 30, 2024, revenues amounted to $500.3 million, down from $594.3 million, indicating a 15.8% decrease year-over-year.

Key Financial Metrics

Thoughtworks' performance metrics indicate a challenging financial environment. The net loss for Q2 2024 was $36.5 million, compared to a net loss of $12.3 million in Q2 2023. The adjusted EBITDA margin also saw a significant decline, from 10.2% in Q2 2023 to 2.3% in Q2 2024.

Operating Expenses and Cost Management

The company reported operating expenses of $274.1 million for Q2 2024, slightly down from $288.8 million in Q2 2023. The decrease is attributed to reduced selling, general, and administrative (SG&A) expenses, which totaled $79.8 million in Q2 2024, down from $86.6 million in the same quarter of the previous year.

Debt and Liquidity Position

As of June 30, 2024, Thoughtworks had cash and cash equivalents of $47.7 million and total long-term debt of approximately $289.8 million. The availability under the revolving credit facility remained at $300 million, with no borrowings outstanding at that time.

Global Operations and Market Presence

Thoughtworks operates globally, with significant revenue contributions from North America, APAC, Europe, and LATAM. For Q2 2024, North America generated $88.3 million (35.1% of total revenues), APAC contributed $89.1 million (35.4%), Europe accounted for $63.1 million (25.0%), and LATAM brought in $11.3 million (4.5%).

In summary, Thoughtworks has faced significant revenue declines and increased losses in 2024, prompting strategic adjustments to enhance operational efficiency and financial resilience amidst a challenging market environment.

A Who Owns Thoughtworks Holding, Inc. (TWKS)

Ownership Structure

As of 2024, Thoughtworks Holding, Inc. (TWKS) has a diverse ownership structure comprising institutional investors, individual shareholders, and company insiders. The major shareholders include:

Major Institutional Investors

Key institutional investors in Thoughtworks Holding, Inc. as of 2024 include:

Insider Holdings

Insider ownership is a significant aspect of the company’s equity structure, with notable insiders holding substantial shares:

Recent Stock Performance

As of June 30, 2024, the stock price of Thoughtworks Holding, Inc. was $3.74, with a total market capitalization of approximately $1.21 billion. The company has seen fluctuations in its stock price, attributed to various market factors and performance metrics:

Recent Financial Highlights

For the six months ended June 30, 2024, Thoughtworks reported:

Market Trends and Future Outlook

Thoughtworks operates within the IT services sector, which has experienced a 12.4% revenue decline in Q2 2024 compared to the previous year. The macroeconomic environment has led to cautious client budgets and shorter contract terms, affecting overall performance.

Despite these challenges, Thoughtworks aims to enhance its service offerings and expand its client base. The company is focusing on diversifying its revenue streams and improving operational efficiencies to navigate the current market landscape.

Thoughtworks Holding, Inc. (TWKS) Mission Statement

Overview

Thoughtworks is committed to delivering innovative technology solutions that help organizations achieve their business objectives while fostering a culture of inclusivity and sustainability. The company emphasizes collaboration and partnerships with clients to drive transformation through technology.

Core Principles of the Mission Statement

• Innovation: Thoughtworks aims to leverage cutting-edge technology to create impactful solutions.
• Collaboration: The company focuses on working closely with clients to understand their unique challenges.
• Sustainability: Thoughtworks is dedicated to minimizing environmental impact and promoting social equity.
• Diversity and Inclusion: The organization values diverse perspectives and strives for an inclusive workplace.

Mission Statement Details

The mission statement of Thoughtworks encapsulates its goal to harness technology for positive change, emphasizing the importance of client partnerships, innovation, and a commitment to social responsibility.

Financial Performance Metrics (2024)

Client and Market Insights

As of June 30, 2024, Thoughtworks reported a total of 502 clients, with 27 clients generating over $10 million in revenues. The net dollar retention rate declined to 85% from 100% in the previous year, indicating challenges in maintaining existing client revenues amid a cautious macroeconomic environment.

Geographic Revenue Distribution

Operational Highlights

Thoughtworks experienced a significant decrease in revenues, primarily attributed to a reduction in client budgets and shorter contract terms. The company is actively adjusting its strategies to enhance client engagement and operational efficiency in response to the current economic climate.

Stock Performance and Shareholder Information

Conclusion

The mission statement of Thoughtworks emphasizes its dedication to innovation, collaboration, and sustainability, with a strong focus on delivering value to clients. The company continues to adapt to market challenges while striving to fulfill its mission through strategic initiatives and financial prudence.

How Thoughtworks Holding, Inc. (TWKS) Works

Overview of Operations

Thoughtworks Holding, Inc. (TWKS) specializes in providing software and consulting services, focusing on digital transformation for clients. The company operates globally, offering services across various sectors including technology, healthcare, and finance.

Financial Performance

As of June 30, 2024, Thoughtworks reported revenues of $251.7 million for the three months ending June 30, 2024, a decrease from $287.2 million in the same period of 2023. For the six months ended June 30, 2024, revenues totaled $500.3 million, down from $594.3 million in the prior year.

Operating Expenses

Operating expenses for Q2 2024 were reported at $274.1 million, slightly down from $288.8 million in Q2 2023. This includes:

• Cost of Revenues: $181.4 million
• Selling, General and Administrative Expenses: $79.8 million
• Depreciation and Amortization: $5.7 million
• Restructuring Costs: $7.2 million

Market Performance

The company experienced a net loss margin of (14.5)% for Q2 2024, compared to (4.3)% for Q2 2023. This reflects the challenges faced in the IT services market due to a cautious macroeconomic environment, shorter contract terms, and lower bill rates.

Revenue by Geographic Region

Revenue sources are primarily from North America, APAC, Europe, and LATAM. For Q2 2024, the revenue breakdown is as follows:

Key Performance Indicators

Key performance indicators for the company include:

• Revenue Growth Rate: (12.4)% Q2 2024 vs. Q2 2023
• Adjusted EBITDA Margin: 2.3% Q2 2024
• Weighted Average Shares Outstanding: 323,000,992

Debt and Liquidity

As of June 30, 2024, Thoughtworks had total current liabilities of $141.6 million and long-term debt of $282.7 million. Cash and cash equivalents stood at $47.7 million.

Employee Compensation and Stock Options

As of June 30, 2024, the company had 17.99 million stock options outstanding with a weighted average exercise price of $3.79. The total stock-based compensation expense for Q2 2024 was $9.3 million.

Conclusion

The company continues to navigate a challenging market environment while implementing strategic changes to improve its financial health and operational efficiency.

How Thoughtworks Holding, Inc. (TWKS) Makes Money

Revenue Streams

Thoughtworks Holding, Inc. primarily generates revenue through consulting and technology services. For the six months ended June 30, 2024, the company reported total revenues of $500.3 million, a decrease of 15.8% compared to $594.3 million for the same period in 2023.

Revenues by Industry Vertical

The following table outlines Thoughtworks' revenues segmented by industry vertical for the six months ended June 30, 2024 and 2023:

Revenues by Customer Location

Thoughtworks' revenues are derived from various geographic locations. The following table shows the revenue contributions from different regions for the six months ended June 30, 2024 and 2023:

Cost of Revenues

For the six months ended June 30, 2024, the cost of revenues was $360.3 million, down from $405.9 million in 2023, representing a decrease of 11.2%.

Operating Expenses

The total operating expenses for the six months ended June 30, 2024 were $536.9 million, compared to $590.2 million in the prior year. The breakdown is as follows:

Net Loss and Adjusted EBITDA

Thoughtworks reported a net loss of $67.4 million for the six months ended June 30, 2024, an increase from a net loss of $20.4 million in 2023. The Adjusted EBITDA for the same period was $12.5 million, down from $64.2 million.

Client Metrics

As of June 30, 2024, Thoughtworks had 502 clients, with 27 clients generating over $10 million in revenue. The net dollar retention rate was 85%.

Cash Flow and Liquidity

For the six months ended June 30, 2024, cash used in operating activities was $34.0 million. The company had cash and cash equivalents of $49.4 million as of June 30, 2024.