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 Q3.
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 Q3. As a group, revenues beat analysts’ consensus estimates by 2.6% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 1.9% on average since the latest earnings results.
Best Q3: 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 $81.25 million, up 32.6% year on year. This print exceeded analysts’ expectations by 12.7%. Overall, it was an incredible quarter for the company with a beat of analysts’ EPS estimates and a solid beat of analysts’ revenue estimates.
“We delivered a strong third quarter, marked by continued momentum in the business, accelerated revenue growth, and excellent progress on our profitability goals. We’re seeing strong traction with our AI-enabled global monitoring solutions, demonstrated by our recent award under the NGA’s Luno B program and expansion with NATO. We’re announcing our acquisition of Bedrock Research, an AI-enabled solutions company, to accelerate our roadmap in support of this demand,” said Will Marshall, Planet’s Co-Founder, Chief Executive Officer and Chairperson.
Planet Labs scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 32% since reporting and currently trades at $17.29.
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.
The market seems content with the results as the stock is up 4.4% since reporting. It currently trades at $231.
Is now the time to buy Broadridge? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: 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 6.8% since the results and currently trades at $216.45.
Read our full analysis of Verisk’s results here.
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 $1.57 billion, up 7% year on year. This number beat analysts’ expectations by 1.2%. Zooming out, it was a mixed quarter as it also recorded a beat of analysts’ EPS estimates but a miss of analysts’ billings estimates.
SS&C had the weakest full-year guidance update among its peers. The stock is up 7.5% since reporting and currently trades at $86.98.
Read our full, actionable report on SS&C here, it’s free for active Edge members.
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 $279.3 million, up 2.4% year on year. This result topped analysts’ expectations by 0.5%. Overall, it was an exceptional quarter as it also put up a beat of analysts’ EPS estimates and a narrow beat of analysts’ revenue estimates.
CSG had the slowest revenue growth among its peers. The stock is down 1.5% since reporting and currently trades at $77.10.
Read our full, actionable report on CSG here, it’s free for active Edge members.
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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