As the Q4 earnings season wraps, let’s dig into this quarter’s best and worst performers in the data & business process services industry, including 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 9 data & business process services stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 0.5% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.9% 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 $481.4 million, up 16.3% year on year. This print exceeded analysts’ expectations by 1.1%. Despite the top-line beat, it was still a slower quarter for the company with a miss of analysts’ full-year EPS guidance estimates.
Rohit Kapoor, chairman and chief executive officer, said, “As we executed our data and AI strategy in 2024, we achieved several key milestones, including launching an enterprise AI platform in partnership with NVIDIA, introducing our insurance-specific large language model (LLM) and expanding our data management capabilities with the acquisition of ITI Data. Our focus on innovating with speed led to industry-leading full-year revenue growth of 12.7% and adjusted EPS growth of 15.4%. As AI adoption continues to increase, EXL is well positioned to capture this opportunity and continue its strong growth momentum.”
EXL scored the fastest revenue growth of the whole group. Still, the market seems discontent with the results. The stock is down 0.5% since reporting and currently trades at $46.83.
Is now the time to buy EXL? Access our full analysis of the earnings results here, it’s free.
Best Q4: CSG (NASDAQ: CSGS)
Powering billions of critical customer interactions annually, CSG Systems (NASDAQ: CSGS) provides cloud-based software platforms that help companies manage customer interactions, process payments, and monetize their services.
CSG reported revenues of $316.7 million, up 6.5% year on year, in line with analysts’ expectations. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates and full-year revenue guidance exceeding analysts’ expectations.
CSG achieved the highest full-year guidance raise among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $61.15.
Is now the time to buy CSG? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: Dun & Bradstreet (NYSE: DNB)
Known for its proprietary D-U-N-S Number that serves as a unique identifier for businesses worldwide, Dun & Bradstreet (NYSE: DNB) provides business decisioning data and analytics that help companies evaluate credit risks, verify suppliers, enhance sales productivity, and gain market visibility.
Dun & Bradstreet reported revenues of $631.9 million, flat year on year, falling short of analysts’ expectations by 4%. It was a disappointing quarter as it posted a significant miss of analysts’ full-year EPS guidance estimates.
Dun & Bradstreet delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 21.5% since the results and currently trades at $8.24.
Read our full analysis of Dun & Bradstreet’s results here.
ADP (NASDAQ: ADP)
Processing one out of every six paychecks in the United States, ADP (NASDAQ: ADP) provides cloud-based human capital management solutions that help businesses manage payroll, benefits, talent acquisition, and HR administration.
ADP reported revenues of $5.05 billion, up 8.1% year on year. This print surpassed analysts’ expectations by 1.7%. Overall, it was a very strong quarter as it also logged revenue guidance for next quarter beating analysts’ expectations and a decent beat of analysts’ EPS estimates.
The stock is flat since reporting and currently trades at $296.07.
Read our full, actionable report on ADP here, it’s free.
TransUnion (NYSE: TRU)
One of the three major credit bureaus in the United States alongside Equifax and Experian, TransUnion (NYSE: TRU) is a global information and insights company that provides credit reports, fraud prevention tools, and data analytics to help businesses make decisions and consumers manage their financial health.
TransUnion reported revenues of $1.04 billion, up 8.6% year on year. This result topped analysts’ expectations by 1%. However, it was a softer quarter as it recorded a significant miss of analysts’ EPS guidance for next quarter estimates and revenue guidance for next quarter meeting analysts’ expectations.
The stock is down 9.3% since reporting and currently trades at $84.81.
Read our full, actionable report on TransUnion here, it’s free.
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