The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Planet Labs (NYSE: PL) and the rest of the data & business process services stocks fared in Q1.
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 11 data & business process services stocks we track reported a satisfactory Q1. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 7.2% on average since the latest earnings results.
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 $66.27 million, up 9.6% year on year. This print exceeded analysts’ expectations by 6.5%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EPS estimates and full-year revenue guidance slightly topping analysts’ expectations.
“We had an excellent first quarter, exceeding our expectations, demonstrating solid validation of our strategic direction and great execution,” said Will Marshall, Planet’s Co-Founder, Chief Executive Officer and Chairperson.
Planet Labs scored the biggest analyst estimates beat of the whole group. The stock is up 26.9% since reporting and currently trades at $5.09.
Best Q1: 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 $299.5 million, up 1.5% year on year, outperforming analysts’ expectations by 1.4%. The business had an exceptional quarter with full-year revenue guidance exceeding analysts’ expectations and a solid beat of analysts’ EPS estimates.
CSG delivered the highest full-year guidance raise among its peers. The market seems content with the results as the stock is up 4.9% since reporting. It currently trades at $64.29.
Is now the time to buy CSG? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $1.81 billion, up 4.9% year on year, falling short of analysts’ expectations by 2.5%. It was a slower quarter, leaving some shareholders looking for more.
Broadridge delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 1.4% since the results and currently trades at $238.76.
Read our full analysis of Broadridge’s results here.
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 $501 million, up 14.8% year on year. This print beat analysts’ expectations by 2%. More broadly, it was a satisfactory quarter as it also produced a solid beat of analysts’ EPS estimates but a slight miss of analysts’ full-year EPS guidance estimates.
EXL delivered the fastest revenue growth among its peers. The stock is up 5.7% since reporting and currently trades at $47.55.
Read our full, actionable report on EXL here, it’s free.
SS&C (NASDAQ: SSNC)
Founded in 1986 as a bridge between technology and financial services, SS&C Technologies (NASDAQ: SSNC) provides software and software-enabled services that help financial firms and healthcare organizations automate complex business processes.
SS&C reported revenues of $1.51 billion, up 5.4% year on year. This number surpassed analysts’ expectations by 0.8%. Aside from that, it was a mixed quarter as it also logged a decent beat of analysts’ EPS estimates but full-year revenue guidance meeting analysts’ expectations.
The stock is up 3.1% since reporting and currently trades at $79.79.
Read our full, actionable report on SS&C here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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