Looking back on data & business process services stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Planet Labs (NYSE: PL) and its peers.
A combination of increasing reliance on data and analytics across various industries and the desire for cost efficiency through outsourcing could mean that companies in this space gain. As functions such as payroll, HR, and credit risk assessment rely on more digitization, key players in the data & business process services industry could be increased demand. On the other hand, the sector faces headwinds from growing regulatory scrutiny on data privacy and security, with laws like GDPR and evolving U.S. regulations potentially limiting data collection and monetization strategies. Additionally, rising cyber threats pose risks to firms handling sensitive personal and financial information, creating outsized headline risk when things go wrong in this area.
The 10 data & business process services stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 5.9% on average since the latest earnings results.
Best Q2: Planet Labs (NYSE: PL)
Pioneering the concept of "agile aerospace" with hundreds of small but powerful satellites, Planet Labs (NYSE: PL) operates the world's largest fleet of Earth observation satellites, capturing daily images of our planet to provide insights on deforestation, agriculture, and climate change.
Planet Labs reported revenues of $73.39 million, up 20.1% year on year. This print exceeded analysts’ expectations by 11.2%. Overall, it was an incredible quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.
“Our second quarter results demonstrate incredibly strong momentum across our business, with record revenue and substantial growth in our backlog. The increased demand for our unique Earth intelligence, highlighted by pivotal contracts including one in collaboration with the German government, one with NATO, and others with the U.S. Department of Defense, underscores the critical role Planet plays in addressing global challenges and supporting peace and security,” said Will Marshall, Planet’s Co-Founder, Chief Executive Officer and Chairperson.
Planet Labs pulled off the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 91.6% since reporting and currently trades at $12.55.
Broadridge (NYSE: BR)
Processing over $10 trillion in equity and fixed income trades daily and managing proxy voting for over 800 million equity positions, Broadridge Financial Solutions (NYSE: BR) provides technology-driven solutions that power investing, governance, and communications for banks, broker-dealers, asset managers, and public companies.
Broadridge reported revenues of $1.59 billion, up 11.7% year on year, outperforming analysts’ expectations by 3.4%. The business had a stunning quarter with a beat of analysts’ EPS estimates and revenue guidance for next quarter exceeding analysts’ expectations.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $222.87.
Is now the time to buy Broadridge? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: Verisk (NASDAQ: VRSK)
Processing over 2.8 billion insurance transaction records annually through one of the world's largest private databases, Verisk Analytics (NASDAQ: VRSK) provides data, analytics, and technology solutions that help insurance companies assess risk, detect fraud, and make better business decisions.
Verisk reported revenues of $768.3 million, up 5.9% year on year, falling short of analysts’ expectations by 1.1%. It was a slower quarter as it posted full-year revenue guidance missing analysts’ expectations and a slight miss of analysts’ revenue estimates.
Verisk delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 7.3% since the results and currently trades at $215.29.
Read our full analysis of Verisk’s results here.
Equifax (NYSE: EFX)
Holding detailed financial records on over 800 million consumers worldwide and dating back to 1899, Equifax (NYSE: EFX) is a global data analytics company that collects, analyzes, and sells consumer and business credit information to lenders, employers, and other businesses.
Equifax reported revenues of $1.54 billion, up 7.2% year on year. This number surpassed analysts’ expectations by 1.4%. Aside from that, it was a mixed quarter as it also recorded a beat of analysts’ EPS estimates but a miss of analysts’ EPS guidance for next quarter estimates.
The stock is down 8% since reporting and currently trades at $212.65.
Read our full, actionable report on Equifax here, it’s free for active Edge members.
EXL (NASDAQ: EXLS)
Originally founded as an outsourcing company in 1999 before evolving into a technology-focused enterprise, EXL (NASDAQ: EXLS) provides data analytics and AI-powered digital operations solutions that help businesses transform their operations and make better decisions.
EXL reported revenues of $529.6 million, up 12.2% year on year. This print beat analysts’ expectations by 1.2%. Overall, it was a satisfactory quarter as it also produced a narrow beat of analysts’ revenue estimates.
The stock is down 3.8% since reporting and currently trades at $39.88.
Read our full, actionable report on EXL here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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