AgileThought, Inc.

First-quarter 2023 revenue was $41.8 million, down 5.4% year over year and 2.8% sequentially. Gross margin was 34.2%, up 290 basis points year over year and 260 basis points sequentially, and gross profit rose 3.4% year over year and 5.2% sequentially. Adjusted operating income was negative $1.2 million versus $1.1 million in the prior-year period; adjusted net income was negative $4.2 million versus negative $0.4 million; adjusted diluted EPS was negative $0.09 versus negative $0.01. Cash and cash equivalents were $3.2 million, and total debt net of unamortized issuance costs was $84.5 million. For full-year 2023, management expects revenue of $185 million, gross margin of 34.5% to 35.5%, and adjusted operating income of at least $13.7 million.

Manuel Senderos framed the quarter as a transition period: revenue was pressured by market uncertainty in mid-March, delayed project starts, and a slower ramp in the newly expanded sales team. At the same time, he emphasized that AgileThought is intentionally exiting small, non-core accounts and focusing on larger $10 million-plus client opportunities with better margins. He sounded constructive on demand, saying deal activity is picking back up and the company expects a stronger second half, while highlighting growing interest in AI and new guilds around Applied AI and gaming.

Amit Singh reiterated the quarter’s revenue pressure came from project delays, slower sales ramp, and the ongoing exit of non-core work. He highlighted gross margin of 34.2% and said the average gross margin on projects closed in the quarter was already above 35%, then noted SG&A increased due to sales, delivery, and people investments but that an SG&A optimization plan reduced the full-year SG&A forecast by more than 15%. He also cited cash of $3.2 million, debt of $84.5 million, $2.1 million of debt repaid in Q1, and updated guidance to at least $13.7 million of adjusted operating income, above prior expectations.

Analysts focused on whether refinancing issues were hurting new logo wins, margin cadence through the year, and the visibility behind the $185 million revenue guide. Management said new logo activity has not degraded, with up to 20 new logos possible in Q2, and that the revenue guide is about 80% visible and should be completed through the remainder of the year. They also said margins could be flat to down slightly in Q2 before improving later, with SG&A expected to step down significantly in the third and fourth quarters.