Thoughtworks Holding, Inc. reported a decline in revenue and an increase in net loss for the third quarter and the first nine months of 2024 compared to the same periods in 2023. For the three months ended September 30, 2024, revenues totaled $261.4 million, a decrease of 6.7% from $280.2 million in the same quarter of 2023. For the nine months ended September 30, 2024, revenues were $761.7 million, down 12.9% from $874.4 million year-over-year. The decline in revenue was attributed to reduced client budgets and smaller contract sizes, particularly in the time-and-materials contracts segment, which saw a drop from $215.8 million to $182.3 million for the quarter.

Despite the revenue decline, the company reported a net loss of $6.1 million for the third quarter of 2024, an improvement from a net loss of $25.9 million in the same period of 2023. However, for the nine months ended September 30, 2024, the net loss increased to $73.4 million from $46.2 million in the prior year. The improved quarterly net loss was primarily due to a significant increase in foreign currency gains and a reduction in payroll expenses.

Operating expenses for the third quarter decreased to $267.3 million from $289.4 million in 2023, while for the nine months, they fell from $879.6 million to $804.3 million. Restructuring expenses increased significantly, totaling $22.6 million for the third quarter and $31.9 million for the nine months, reflecting ongoing efforts to centralize operations and create a Digital Engineering Center.

On the strategic front, Thoughtworks announced a definitive merger agreement with affiliates of Apax Partners LLP on August 5, 2024, to acquire all outstanding shares at $4.40 per share. The merger is expected to close in the fourth quarter of 2024, pending customary conditions. The company incurred $10.2 million in transaction costs for the third quarter and $11.5 million for the nine months related to the merger.

As of September 30, 2024, cash and cash equivalents stood at $47.0 million, down from $100.3 million at the end of 2023. Total assets decreased to $1.27 billion, while total liabilities were reduced to $534.8 million. The company’s long-term debt was reported at $288.2 million, down from $293.2 million at the end of 2023.

Overall, Thoughtworks is navigating a challenging market environment while pursuing strategic restructuring and a significant merger, which may impact its future financial performance.