Earnings results often indicate what direction a company will take in the months ahead. With Q2 behind us, let’s have a look at EXL (NASDAQ: EXLS) 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 satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 2.5% while next quarter’s revenue guidance was 0.7% below.
Thankfully, share prices of the companies have been resilient as they are up 8.5% on average since the latest earnings results.
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 $514.5 million, up 14.7% year on year. This print exceeded analysts’ expectations by 1.6%. Overall, it was a strong quarter for the company with a beat of analysts’ EPS estimates and a decent beat of analysts’ revenue estimates.
Chairman and Chief Executive Officer Rohit Kapoor said, “I am pleased to report another strong quarter as we delivered revenue growth of 15% and increased our adjusted diluted EPS by 20%. Our sustained double-digit growth demonstrates the strength of our competitive position as a global data and AI company. EXL’s recognized leadership in embedding AI in the workflow is resonating strongly with our clients and fueling our growth.”
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $42.10.
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, outperforming analysts’ expectations by 11.2%. The business had an incredible quarter with a beat of analysts’ EPS and revenue estimates.
Planet Labs delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 139% since reporting. It currently trades at $15.68.
Is now the time to buy Planet Labs? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: 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 7.4% year on year, exceeding analysts’ expectations by 1.5%. Still, it was a slower quarter as it posted a miss of analysts’ full-year EPS guidance estimates and a miss of analysts’ EPS guidance for next quarter estimates.
As expected, the stock is down 7.3% since the results and currently trades at $241.
Read our full analysis of Equifax’s results here.
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 $2.07 billion, up 6.2% year on year. This number was in line with analysts’ expectations. Aside from that, it was a mixed quarter as it also logged a narrow beat of analysts’ EPS estimates but revenue guidance for next quarter meeting analysts’ expectations.
The stock is down 4.8% since reporting and currently trades at $236.60.
Read our full, actionable report on Broadridge here, it’s free for active Edge members.
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 $772.6 million, up 7.8% year on year. This result met analysts’ expectations. Taking a step back, it was a mixed quarter as it also recorded a beat of analysts’ EPS estimates but a miss of analysts’ full-year EPS guidance estimates.
Verisk had the weakest performance against analyst estimates among its peers. The stock is down 16.9% since reporting and currently trades at $244.46.
Read our full, actionable report on Verisk here, it’s free for active Edge members.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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