twks-20211231
0001866550FALSE2021FYP3YP1Y43.611143.643.6143.60.002800018665502021-01-012021-12-3100018665502022-03-04xbrli:shares00018665502021-06-30iso4217:USD00018665502021-12-3100018665502020-12-310001866550us-gaap:SeriesAPreferredStockMember2020-12-31iso4217:USDxbrli:shares0001866550us-gaap:SeriesBPreferredStockMember2020-12-310001866550us-gaap:CommonClassAMember2020-12-310001866550us-gaap:CommonClassAMember2021-12-310001866550us-gaap:CommonClassBMember2020-12-310001866550us-gaap:CommonClassCMember2020-12-3100018665502020-01-012020-12-3100018665502019-01-012019-12-3100018665502018-12-310001866550us-gaap:CommonStockMember2018-12-310001866550us-gaap:TreasuryStockMember2018-12-310001866550us-gaap:AdditionalPaidInCapitalMember2018-12-310001866550us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-310001866550us-gaap:RetainedEarningsMember2018-12-310001866550us-gaap:RetainedEarningsMember2019-01-012019-12-310001866550us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-12-310001866550us-gaap:CommonStockMember2019-01-012019-12-310001866550us-gaap:AdditionalPaidInCapitalMember2019-01-012019-12-310001866550us-gaap:TreasuryStockMember2019-01-012019-12-3100018665502019-12-310001866550us-gaap:CommonStockMember2019-12-310001866550us-gaap:TreasuryStockMember2019-12-310001866550us-gaap:AdditionalPaidInCapitalMember2019-12-310001866550us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001866550us-gaap:RetainedEarningsMember2019-12-310001866550us-gaap:RetainedEarningsMember2020-01-012020-12-310001866550us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-12-310001866550us-gaap:CommonStockMember2020-01-012020-12-310001866550us-gaap:AdditionalPaidInCapitalMember2020-01-012020-12-310001866550us-gaap:CommonStockMember2020-12-310001866550us-gaap:TreasuryStockMember2020-12-310001866550us-gaap:AdditionalPaidInCapitalMember2020-12-310001866550us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001866550us-gaap:RetainedEarningsMember2020-12-310001866550us-gaap:RetainedEarningsMember2021-01-012021-12-310001866550us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-12-310001866550us-gaap:IPOMember2021-01-012021-12-310001866550us-gaap:CommonStockMemberus-gaap:IPOMember2021-01-012021-12-310001866550us-gaap:IPOMemberus-gaap:AdditionalPaidInCapitalMember2021-01-012021-12-310001866550us-gaap:CommonStockMember2021-01-012021-12-310001866550us-gaap:AdditionalPaidInCapitalMember2021-01-012021-12-310001866550us-gaap:TreasuryStockMember2021-01-012021-12-310001866550us-gaap:CommonStockMember2021-12-310001866550us-gaap:TreasuryStockMember2021-12-310001866550us-gaap:AdditionalPaidInCapitalMember2021-12-310001866550us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001866550us-gaap:RetainedEarningsMember2021-12-310001866550us-gaap:SeriesAPreferredStockMember2021-01-012021-12-310001866550us-gaap:SeriesAPreferredStockMember2020-01-012020-12-310001866550us-gaap:SeriesAPreferredStockMember2019-01-012019-12-310001866550us-gaap:SeriesBPreferredStockMember2021-01-012021-12-310001866550us-gaap:SeriesBPreferredStockMember2020-01-012020-12-310001866550us-gaap:SeriesBPreferredStockMember2019-01-012019-12-310001866550us-gaap:IPOMember2021-09-172021-09-170001866550twks:IPOCommonStockMember2021-09-172021-09-170001866550twks:IPOSellingStockholdersMember2021-09-172021-09-170001866550us-gaap:OverAllotmentOptionMember2021-09-172021-09-170001866550us-gaap:IPOMember2021-09-1700018665502021-09-172021-09-1700018665502021-09-162021-09-16twks:segment0001866550country:US2021-12-310001866550us-gaap:GeographicConcentrationRiskMembertwks:LongLivedAssetsMembercountry:US2021-01-012021-12-31xbrli:pure0001866550country:US2020-12-310001866550us-gaap:GeographicConcentrationRiskMembertwks:LongLivedAssetsMembercountry:US2020-01-012020-12-310001866550country:BR2021-12-310001866550country:CN2021-12-310001866550country:IN2021-12-310001866550country:BR2020-12-310001866550country:CN2020-12-310001866550country:IN2020-12-310001866550twks:OtherForeignCountriesMember2021-12-310001866550twks:OtherForeignCountriesMember2020-12-310001866550us-gaap:OtherCurrentAssetsMember2021-12-310001866550us-gaap:OtherCurrentAssetsMember2020-12-310001866550us-gaap:OtherNoncurrentAssetsMember2021-12-310001866550us-gaap:OtherNoncurrentAssetsMember2020-12-310001866550srt:MinimumMember2021-01-012021-12-310001866550srt:MaximumMember2021-01-012021-12-310001866550srt:MinimumMembertwks:FurnitureAndEquipmentMember2021-01-012021-12-310001866550srt:MaximumMembertwks:FurnitureAndEquipmentMember2021-01-012021-12-310001866550srt:MinimumMemberus-gaap:ComputerEquipmentMember2021-01-012021-12-310001866550srt:MaximumMemberus-gaap:ComputerEquipmentMember2021-01-012021-12-310001866550srt:MinimumMemberus-gaap:SoftwareAndSoftwareDevelopmentCostsMember2021-01-012021-12-310001866550srt:MaximumMemberus-gaap:SoftwareAndSoftwareDevelopmentCostsMember2021-01-012021-12-310001866550us-gaap:AutomobilesMember2021-01-012021-12-310001866550us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2021-01-012021-12-310001866550us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2020-01-012020-12-310001866550us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2019-01-012019-12-310001866550us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2021-12-310001866550us-gaap:SoftwareAndSoftwareDevelopmentCostsMember2020-12-310001866550us-gaap:CustomerRelationshipsMember2021-01-012021-12-310001866550twks:TermLoanMemberus-gaap:SecuredDebtMember2021-12-310001866550twks:TermLoanMemberus-gaap:SecuredDebtMember2020-12-310001866550us-gaap:GeographicConcentrationRiskMemberus-gaap:NonUsMemberus-gaap:SalesRevenueNetMember2021-01-012021-12-310001866550us-gaap:GeographicConcentrationRiskMemberus-gaap:NonUsMemberus-gaap:SalesRevenueNetMember2020-01-012020-12-310001866550us-gaap:GeographicConcentrationRiskMemberus-gaap:NonUsMemberus-gaap:SalesRevenueNetMember2019-01-012019-12-310001866550us-gaap:GeographicConcentrationRiskMemberus-gaap:AccountsReceivableMemberus-gaap:NonUsMember2021-01-012021-12-310001866550us-gaap:GeographicConcentrationRiskMemberus-gaap:AccountsReceivableMemberus-gaap:NonUsMember2020-01-012020-12-310001866550us-gaap:NonUsMember2021-12-310001866550us-gaap:NonUsMember2020-12-310001866550srt:NorthAmericaMember2021-01-012021-12-310001866550srt:NorthAmericaMember2020-01-012020-12-310001866550srt:NorthAmericaMember2019-01-012019-12-310001866550srt:AsiaPacificMember2021-01-012021-12-310001866550srt:AsiaPacificMember2020-01-012020-12-310001866550srt:AsiaPacificMember2019-01-012019-12-310001866550srt:EuropeMember2021-01-012021-12-310001866550srt:EuropeMember2020-01-012020-12-310001866550srt:EuropeMember2019-01-012019-12-310001866550srt:LatinAmericaMember2021-01-012021-12-310001866550srt:LatinAmericaMember2020-01-012020-12-310001866550srt:LatinAmericaMember2019-01-012019-12-310001866550us-gaap:GeographicConcentrationRiskMembercountry:USus-gaap:SalesRevenueNetMember2021-01-012021-12-310001866550country:US2021-01-012021-12-310001866550us-gaap:GeographicConcentrationRiskMembercountry:USus-gaap:SalesRevenueNetMember2020-01-012020-12-310001866550country:US2020-01-012020-12-310001866550us-gaap:GeographicConcentrationRiskMembercountry:USus-gaap:SalesRevenueNetMember2019-01-012019-12-310001866550country:US2019-01-012019-12-310001866550us-gaap:GeographicConcentrationRiskMembercountry:AUus-gaap:SalesRevenueNetMember2021-01-012021-12-310001866550country:AU2021-01-012021-12-310001866550country:CNus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2020-01-012020-12-310001866550country:CN2020-01-012020-12-310001866550country:CNus-gaap:GeographicConcentrationRiskMemberus-gaap:SalesRevenueNetMember2019-01-012019-12-310001866550country:CN2019-01-012019-12-310001866550us-gaap:GeographicConcentrationRiskMembercountry:DEus-gaap:SalesRevenueNetMember2021-01-012021-12-310001866550country:DE2021-01-012021-12-310001866550us-gaap:GeographicConcentrationRiskMembercountry:GBus-gaap:SalesRevenueNetMember2021-01-012021-12-310001866550country:GB2021-01-012021-12-310001866550us-gaap:GeographicConcentrationRiskMembercountry:DEus-gaap:SalesRevenueNetMember2020-01-012020-12-310001866550country:DE2020-01-012020-12-310001866550us-gaap:GeographicConcentrationRiskMembercountry:GBus-gaap:SalesRevenueNetMember2020-01-012020-12-310001866550country:GB2020-01-012020-12-310001866550us-gaap:GeographicConcentrationRiskMembercountry:DEus-gaap:SalesRevenueNetMember2019-01-012019-12-310001866550country:DE2019-01-012019-12-310001866550us-gaap:GeographicConcentrationRiskMembercountry:GBus-gaap:SalesRevenueNetMember2019-01-012019-12-310001866550country:GB2019-01-012019-12-310001866550twks:TechnologyAndBusinessServiceMember2021-01-012021-12-310001866550twks:TechnologyAndBusinessServiceMember2020-01-012020-12-310001866550twks:TechnologyAndBusinessServiceMember2019-01-012019-12-310001866550twks:EnergyPublicAndHealthServicesMember2021-01-012021-12-310001866550twks:EnergyPublicAndHealthServicesMember2020-01-012020-12-310001866550twks:EnergyPublicAndHealthServicesMember2019-01-012019-12-310001866550twks:RetailAndConsumerMember2021-01-012021-12-310001866550twks:RetailAndConsumerMember2020-01-012020-12-310001866550twks:RetailAndConsumerMember2019-01-012019-12-310001866550twks:FinancialServicesAndInsuranceMember2021-01-012021-12-310001866550twks:FinancialServicesAndInsuranceMember2020-01-012020-12-310001866550twks:FinancialServicesAndInsuranceMember2019-01-012019-12-310001866550twks:AutomotiveTravelAndTransportationMember2021-01-012021-12-310001866550twks:AutomotiveTravelAndTransportationMember2020-01-012020-12-310001866550twks:AutomotiveTravelAndTransportationMember2019-01-012019-12-310001866550twks:OtherRevenueMember2021-01-012021-12-310001866550twks:OtherRevenueMember2020-01-012020-12-310001866550twks:OtherRevenueMember2019-01-012019-12-310001866550us-gaap:TimeAndMaterialsContractMember2021-01-012021-12-310001866550us-gaap:TimeAndMaterialsContractMember2020-01-012020-12-310001866550us-gaap:TimeAndMaterialsContractMember2019-01-012019-12-310001866550us-gaap:FixedPriceContractMember2021-01-012021-12-310001866550us-gaap:FixedPriceContractMember2020-01-012020-12-310001866550us-gaap:FixedPriceContractMember2019-01-012019-12-310001866550us-gaap:LicenseMember2021-01-012021-12-310001866550us-gaap:LicenseMember2020-01-012020-12-310001866550us-gaap:LicenseMember2019-01-012019-12-3100018665502021-01-012021-03-31twks:business0001866550twks:GeminiSolutionsLLCAndFourkindGlobalOYMember2021-01-012021-03-310001866550twks:GeminiSolutionsLLCAndFourkindGlobalOYMember2021-01-012021-12-310001866550twks:GeminiSolutionsLLCAndFourkindGlobalOYMember2021-03-310001866550us-gaap:CustomerRelationshipsMember2021-12-310001866550us-gaap:CustomerRelationshipsMember2020-12-310001866550us-gaap:TrademarksMember2021-12-310001866550us-gaap:TrademarksMember2020-12-310001866550us-gaap:ForeignCountryMember2021-12-310001866550us-gaap:ForeignCountryMember2020-12-310001866550twks:SeparateUSFederalNetOperatingLossCarryforwardsAndFederalLimitationOfBusinessInterestMember2021-12-310001866550twks:SeparateUSFederalNetOperatingLossCarryforwardsAndFederalLimitationOfBusinessInterestMember2020-12-310001866550twks:CertainForeignTaxCreditsMember2021-12-310001866550twks:CertainForeignTaxCreditsMember2020-12-310001866550us-gaap:StateAndLocalJurisdictionMember2021-12-310001866550us-gaap:StateAndLocalJurisdictionMember2020-12-310001866550us-gaap:StateAndLocalJurisdictionMembersrt:MinimumMember2021-01-012021-12-310001866550us-gaap:StateAndLocalJurisdictionMembersrt:MaximumMember2020-01-012020-12-310001866550us-gaap:AutomobilesMember2021-12-310001866550us-gaap:AutomobilesMember2020-12-310001866550us-gaap:ComputerEquipmentMember2021-12-310001866550us-gaap:ComputerEquipmentMember2020-12-310001866550us-gaap:LeaseholdImprovementsMember2021-12-310001866550us-gaap:LeaseholdImprovementsMember2020-12-310001866550us-gaap:FurnitureAndFixturesMember2021-12-310001866550us-gaap:FurnitureAndFixturesMember2020-12-310001866550twks:VotingSeriesAPreferredStockMember2021-12-310001866550twks:NonVotingSeriesAPreferredStockMember2021-12-310001866550twks:VotingSeriesBPreferredStockMember2021-12-310001866550twks:NonVotingSeriesBPreferredStockMember2021-12-3100018665502021-04-062021-04-0600018665502021-04-060001866550twks:VotingSeriesAPreferredStockMember2020-12-232020-12-230001866550twks:VotingSeriesAPreferredStockMember2021-01-012021-01-310001866550twks:VotingSeriesBPreferredStockMember2021-06-012021-06-300001866550us-gaap:CommonClassAMember2021-01-012021-03-310001866550us-gaap:CommonClassBMember2021-01-012021-03-310001866550us-gaap:CommonClassCMember2021-01-012021-03-3100018665502021-09-170001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMembertwks:ShareBasedPaymentArrangementTrancheElevenMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMembertwks:ShareBasedPaymentArrangementTrancheSevenMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMembertwks:ShareBasedPaymentArrangementTrancheNineMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMembertwks:ShareBasedPaymentArrangementTrancheEightMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMembertwks:ShareBasedPaymentArrangementTrancheSixMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMembertwks:ShareBasedPaymentArrangementTrancheTenMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMembertwks:ShareBasedPaymentArrangementTrancheFourMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMembertwks:ShareBasedPaymentArrangementTrancheFiveMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMembertwks:ShareBasedPaymentArrangementVestingUponChangeOfControlMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMember2021-10-012021-12-310001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMember2021-07-012021-09-300001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMember2020-12-310001866550twks:ShareBasedPaymentArrangementTimeVestingOptionMemberMember2021-12-310001866550twks:ShareBasedPaymentArrangementPerformanceVestingOptionMemberMember2020-12-310001866550twks:ShareBasedPaymentArrangementPerformanceVestingOptionMemberMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementPerformanceVestingOptionMemberMember2021-12-310001866550twks:ShareBasedPaymentArrangementPerformanceVestingOptionMemberMembertwks:ReturnOfTwoTimesSponsorInvestmentMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementPerformanceVestingOptionMemberMembertwks:ReturnOfTwoAndAHalfTimesSponsorInvestmentMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementPerformanceVestingOptionMemberMembertwks:ReturnOfThreeTimesSponsorInvestmentMember2021-01-012021-12-310001866550twks:ShareBasedPaymentArrangementPerformanceVestingOptionMemberMember2021-09-092021-09-09twks:employee0001866550us-gaap:EmployeeStockOptionMember2021-01-012021-12-310001866550us-gaap:EmployeeStockOptionMember2020-01-012020-12-310001866550us-gaap:EmployeeStockOptionMember2019-01-012019-12-310001866550us-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:StockAppreciationRightsSARSMember2021-01-012021-12-310001866550us-gaap:StockAppreciationRightsSARSMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2021-01-012021-12-310001866550us-gaap:ShareBasedCompensationAwardTrancheOneMemberus-gaap:RestrictedStockUnitsRSUMember2021-01-012021-12-310001866550us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2021-01-012021-12-310001866550us-gaap:RestrictedStockUnitsRSUMember2021-09-172021-09-170001866550us-gaap:StockAppreciationRightsSARSMember2020-12-310001866550us-gaap:StockAppreciationRightsSARSMember2021-01-012021-12-310001866550us-gaap:StockAppreciationRightsSARSMember2021-12-310001866550us-gaap:RestrictedStockUnitsRSUMembertwks:ShareBasedPaymentArrangementCliffVestingSubsequentToIPOClosingDateTrancheOneMember2021-01-012021-12-310001866550us-gaap:RestrictedStockUnitsRSUMembertwks:ShareBasedPaymentArrangementCliffVestingSubsequentToIPOClosingDateTrancheTwoMember2021-01-012021-12-310001866550us-gaap:RestrictedStockUnitsRSUMembertwks:ShareBasedPaymentArrangementVestingSubsequentToIPOClosingDateTrancheOneMember2021-01-012021-12-310001866550us-gaap:RestrictedStockUnitsRSUMembertwks:ShareBasedPaymentArrangementVestingSubsequentToIPOClosingDateTrancheTwoMember2021-01-012021-12-310001866550us-gaap:RestrictedStockUnitsRSUMembertwks:ShareBasedPaymentArrangementRatableVestingSubsequentToIPOClosingMember2021-01-012021-12-310001866550us-gaap:RestrictedStockUnitsRSUMembertwks:ShareBasedPaymentArrangementRatableVestingSubsequentToIPOClosingTrancheOneMember2021-01-012021-12-310001866550us-gaap:RestrictedStockUnitsRSUMembertwks:ShareBasedPaymentArrangementRatableVestingSubsequentToIPOClosingTrancheThreeMember2021-01-012021-12-310001866550us-gaap:RestrictedStockUnitsRSUMembertwks:ShareBasedPaymentArrangementRatableVestingSubsequentToIPOClosingTrancheTwoMember2021-01-012021-12-310001866550us-gaap:RestrictedStockUnitsRSUMembertwks:ShareBasedPaymentArrangementRatableVestingMember2021-01-012021-12-310001866550us-gaap:RestrictedStockUnitsRSUMembertwks:ShareBasedPaymentArrangementRatableVestingTrancheOneMember2021-01-012021-12-310001866550us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-12-310001866550us-gaap:RestrictedStockUnitsRSUMember2020-12-310001866550us-gaap:RestrictedStockUnitsRSUMember2021-12-310001866550twks:RestrictedStockUnitsStateAdministrationOfForeignExchangeOfThePeoplesRepublicOfChinaMember2021-01-012021-12-310001866550country:US2021-01-012021-12-310001866550country:US2020-01-012020-12-310001866550country:US2019-01-012019-12-310001866550us-gaap:ForeignPlanMember2021-01-012021-12-310001866550us-gaap:ForeignPlanMember2020-01-012020-12-310001866550us-gaap:ForeignPlanMember2019-01-012019-12-310001866550twks:CreditAgreementsMemberus-gaap:SecuredDebtMember2017-10-120001866550us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMembertwks:CreditAgreementsMember2017-10-120001866550twks:CreditAgreementsMemberus-gaap:SecuredDebtMember2021-03-260001866550us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMembertwks:CreditAgreementsMember2021-03-260001866550us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMembertwks:CreditAgreementsMember2019-05-130001866550twks:CreditAgreementsMemberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:SecuredDebtMember2021-01-012021-12-310001866550twks:CreditAgreementsMemberus-gaap:SecuredDebtMemberus-gaap:BaseRateMember2021-01-012021-12-310001866550twks:CreditAgreementsMemberus-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:SecuredDebtMember2021-03-262021-03-260001866550twks:CreditAgreementsMember2021-12-310001866550twks:CreditAgreementsMemberus-gaap:SecuredDebtMember2021-01-012021-12-310001866550twks:CreditAgreementsMemberus-gaap:SecuredDebtMember2021-08-102021-08-100001866550twks:CreditAgreementsMemberus-gaap:SecuredDebtMember2021-10-202021-10-200001866550us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMembertwks:CreditAgreementsMember2021-12-310001866550us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMembertwks:CreditAgreementsMember2020-12-310001866550us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310001866550us-gaap:AccumulatedTranslationAdjustmentMember2019-12-310001866550us-gaap:AccumulatedTranslationAdjustmentMember2018-12-310001866550us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-12-310001866550us-gaap:AccumulatedTranslationAdjustmentMember2020-01-012020-12-310001866550us-gaap:AccumulatedTranslationAdjustmentMember2019-01-012019-12-310001866550us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310001866550us-gaap:RestrictedStockUnitsRSUMemberus-gaap:SubsequentEventMember2022-01-182022-01-180001866550us-gaap:RestrictedStockUnitsRSUMemberus-gaap:SubsequentEventMember2022-01-180001866550twks:RestrictedStockUnitsStateAdministrationOfForeignExchangeOfThePeoplesRepublicOfChinaMemberus-gaap:SubsequentEventMember2021-01-012022-03-080001866550twks:RestrictedStockUnitsStateAdministrationOfForeignExchangeOfThePeoplesRepublicOfChinaMemberus-gaap:SubsequentEventMember2022-01-012022-03-08

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For transition period from ____ to ____
Commission File Number 001-40812
https://cdn.kscope.io/4f589a5cb499817713ba0673a69821bd-twks-20211231_g1.jpg
THOUGHTWORKS HOLDING, INC.
(Exact name of registrant as specified in its charter)
Delaware82-2668392
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
200 East Randolph Street, 25th Floor
Chicago, Illinois 60601
(312) 373-1000
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock, $0.001 par valueTWKSNasdaq Global Select Market
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes ☐ No
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.



Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes No ☒
The registrant was not a public company as of the last business day of its most recently completed second fiscal quarter and therefore is unable to calculate the aggregate market value of its common stock held by non-affiliates as of such date.
As of March 4, 2022, there were approximately 305,132,181 shares of the registrant's common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The information required by Item 14 will be filed (and is hereby incorporated) by an amendment hereto or pursuant to a definitive proxy statement pursuant to Regulation 14A that will contain such information.


Table of Contents

THOUGHTWORKS HOLDING, INC.
ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
Page
Part I
Part II
Part III
Part IV



Table of Contents

FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY
This annual report on Form 10-K (the “Annual Report”) contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements include statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” "strive," “will,” “would” or similar expressions and the negatives of those terms, but the absence of these words does not mean that the statement is not forward-looking. The forward-looking statements are contained principally in the sections captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.” Forward-looking statements may include information concerning our possible or assumed future results of operations, client demand, business strategies, technology developments, financing and investment plans, competitive position, our industry and regulatory environment, potential growth opportunities and the effects of competition.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Given these uncertainties, you should not place undue reliance on forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Annual Report. You should read this Annual Report and the documents that we have filed as exhibits to the Annual Report, completely and with the understanding that our actual future results may be materially different from what we expect.
Risk Factor Summary
Important risk factors that could cause actual results to differ materially from our expectations include:
the COVID-19 pandemic has impacted our business and operations, and future business and operational challenges posed by the COVID-19 pandemic could materially adversely affect us;
we may be unable to implement our growth strategy;
our ability to generate and retain business depends on our reputation in the marketplace;
we must successfully attract, hire, train and retain skilled professionals to service our clients’ projects and we must productively deploy our professionals to remain profitable;
increases in wages, equity compensation and other compensation expenses could prevent us from sustaining our competitive advantage and increase our costs;
our business and operations may be harmed if we cannot positively evolve and preserve our Thoughtworks culture;
if we fail to manage our acquisition strategy, our culture and growth plans could be materially adversely affected;
our global business exposes us to operational, geopolitical, regulatory, legal and economic risks;
our business, financial condition and results of operations may be adversely affected by fluctuations in foreign currency exchange rates;
our effective tax rate could be materially adversely affected by several factors;
if we fail to adequately innovate, adapt and/or remain at the forefront of emerging technologies and related client demands, we could be materially adversely affected;
we face intense competition and operate in a rapidly evolving industry, which makes it difficult to evaluate our future prospects;
we may not be successful at attracting new clients or retaining and expanding our relationships with our existing clients;
we generally do not have long-term commitments or contracts with our clients;
we face risks associated with having a long selling and implementation cycle for our services;
our cash flows and results of operations may be adversely affected if we are unable to collect on billed and unbilled receivables from clients;
our profitability could suffer if we cannot accurately price our solutions and services, maintain favorable pricing for our solutions and services, are unable to collect on receivables from clients or fail to meet our contractual and other obligations to clients;
3

Table of Contents

if we cause disruptions to our clients’ businesses, provide inadequate service, or breach contractual obligations, our clients may have claims against us, which our insurance may not adequately protect against, and our reputation may be damaged;
we face risks associated with security breaches as well as privacy and data protection regulations, and we may incur significant liabilities if we fail to manage those risks;
a significant failure in our systems, telecommunications or IT infrastructure could harm our service model, which could result in a reduction of our revenues and otherwise disrupt our business;
changes in privacy and data protection regulations could expose us to risks of noncompliance and costs associated with compliance;
we are subject to laws and regulations in the U.S. and other countries in which we operate, compliance with these laws requires significant resources and non-compliance may result in civil or criminal penalties and other remedial measures;
we may become subject to disputes or legal or other proceedings that could involve significant expenditures by us, which could have a material adverse effect on us, including our financial results;
our existing indebtedness could adversely affect our business and growth prospect;
we may face intellectual property infringement or misappropriation claims that could be costly to defend or if we do not protect our brand through our intellectual property rights, our business may be harmed;
we may not be able to prevent unauthorized use of our client's intellectual property and our business and competitive position may be damaged as a result;
our stock price may be volatile, and the value of our common stock may decline;
our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans, or otherwise will dilute all other stockholders;
if securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, the market price and trading volume of our common stock could decline;
we do not intend to pay dividends for the foreseeable future and, as a result, the ability of the holders of our common stock to achieve a return on their investment will depend on appreciation in the price of our common stock;
investment funds (the "Apax Funds") advised by Apax Partners L.L.P. ("Apax Partners") control us, and such control may give rise to actual or perceived conflicts of interests;
our status as a “controlled company” will grant us exemptions from certain corporate governance requirements, and our status as an “emerging growth company” will allow us to comply with reduced public company reporting requirements;
we will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices;
we may fail to comply with the rules that apply to public companies, which could result in sanctions or other penalties;
provisions of our corporate governance documents could make an acquisition of us more difficult and may prevent attempts by our shareholders to replace or remove our current management, even if beneficial to our shareholders;
provisions of our certificate of incorporation could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us; and
a significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future, which could cause the market price of common stock to drop.
For more information, see “Item 1A. Risk Factors.”
We derive many of our forward-looking statements from our operating budgets and forecasts, which are based on many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements as well as other cautionary statements that are made from time to time in our other Securities and Exchange Commission (“SEC”) filings and public
4

Table of Contents

communications. You should evaluate all forward-looking statements made in this Annual Report in the context of these risks and uncertainties.
We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this Annual Report are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

5

Table of Contents

PART I
Item 1. Business
Overview
Thoughtworks Holding, Inc. ("Thoughtworks," the "Company," "we," "us," or "our") is a premium global technology consultancy that integrates strategy, design and software engineering to enable enterprises and technology disruptors across the globe to thrive as modern digital businesses. Thoughtworks exists to deliver extraordinary impact for clients, employees, partners and the communities we serve through our culture and technology excellence.
In the face of ongoing digital disruption, many companies lack the capabilities and talent necessary to keep pace with the accelerating rate of technological change. Thoughtworks has been a thought leader at the forefront of technology innovation for the past 28 years. We leverage our vast experience to improve our clients’ ability to flourish in the digital era.
We are a globally diversified business, with clients across all major verticals and geographies. Our global distributed agile delivery model operates where our clients are, with over 10,600 employees working across 17 countries on five continents, including North America, South America, Europe, Asia and Australia. Further, our unique, diverse and cultivating culture, with a reputation for technology excellence and thought leadership, enables us to attract and retain what we believe is the best talent in the industry. That is why our clients trust Thoughtworks as their premium digital transformation partner.
Global spending on the digital transformation of business practices, products and organizations is forecast by International Data Corporation ("IDC") to reach $2.8 trillion in 2025, more than double the amount spent in 2020.
Thoughtworks provides premium, end-to-end digital strategy, design and engineering services and we are well positioned to capitalize on this opportunity. We connect strategy to execution, using cross-functional teams to deliver value to our clients at scale. Our four global service lines provide specialized capabilities and thought leadership to drive digital transformation:
Enterprise Modernization, Platforms & Cloud
Customer Experience, Product & Design
Data & Artificial Intelligence ("AI")
Digital Transformation & Operations
Our unique service offerings, differentiated delivery, global talent and culture have enabled us to attract over 370 current clients, including global enterprises and technology disruptors. Our clients are highly diversified across industry verticals. We have relatively low client concentration, with only 27.3% of our revenues coming from our top 10 clients in 2021. Our deep client integration and senior executive relationships have enabled us to drive long-standing partnerships with our clients, as demonstrated by an average tenure of seven years across our top 10 clients by revenue in 2021. As a result, 86.5% of our revenues in 2021 were generated from recurring clients.
Since our inception, we have been pioneers in technologies that now underpin today's modern digital businesses, such as agile software development, continuous delivery, microservices, evolutionary architecture and data mesh. We have established ourselves as a thought leader and are continually advancing digital trends with our innovations. We believe our approach enables us to deliver the innovations that deliver value for our clients before new technologies reach mass adoption.
We utilize a distributed agile delivery model, leveraging a broad base of high-quality, poly-skilled global technology talent. Our professionals seamlessly work with clients both where they are located and nearshore/offshore. Our local presence enables us to develop deep client intimacy and assimilate market context and knowledge. Blending our local presence with our nearshore/offshore capabilities allows us to innovate rapidly at scale. Our differentiated delivery model enables us to generate an average annual revenue per employee of over $100,000 in each of 2019, 2020 and 2021 (based on the average number of employees for the relevant
6

Table of Contents

year). For more information regarding our average annual revenue per employee in historical periods, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Performance—Expanding our technical capabilities and client solutions."
Our differentiated approach is rooted in a unique culture that is championed by our executive leadership team, which has an average tenure of 17 years. Our reputation for technology excellence, thought leadership and advocacy for social change enables us to attract what we believe is the best talent in the industry. Allied to this, our cultivating culture enables us to develop and retain talent. In addition, Thoughtworks is widely recognized for leading the technology industry through our efforts on diversity and inclusion. For example, 60% of our executive officers are women. Thoughtworkers are incredibly engaged and loyal, as evidenced by our 2021 annual employee engagement survey, where our overall engagement increased to 8.7 which is in the top 25% for the technology sector. Our diversity and inclusion score increased to 8.9 which puts Thoughtworks in the top 5% in the sector. Our attrition rate of 15.1% in 2021 is lower than the industry average.
We believe the Thoughtworks value proposition is sustainable and difficult to replicate. The core elements form a virtuous cycle: clients trust us to deliver on their most complex and business-critical projects; those experiences allow us to explore cutting-edge technologies and expand our thought leadership; this enables us to continuously attract, develop and retain the very best global talent; which gives us the ability to meet and exceed our clients’ needs. Our position is at the forefront of successive waves of technological change — spotting important trends early.
Our approach has enabled us to consistently grow our revenues and profits. In 2021 our revenues surpassed the one billion mark at nearly $1.07 billion, representing 33% of year-over-year revenue growth. Net loss for the full year was $(23.6) million, compared to net income of $79.3 million in 2020. Adjusted EBITDA for the full year was $223.2 million representing year-over-year growth of 45.7%. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations —Non-GAAP Financial Measures" for a definition of and a reconciliation of Adjusted EBITDA to net (loss) income, the most directly comparable GAAP measure, how we use Adjusted EBITDA and an explanation of why we consider this non-GAAP measure to be helpful for investors.
Key milestones for our business include:
1993—Thoughtworks was founded.
1999—Guo Xiao and Dr. Rebecca Parsons joined Thoughtworks.
2000–2004—Opened offices in Australia, United Kingdom, India, Canada and China.
2001—Manifesto for Agile Software Development published (co-authored by our Chief Scientist Martin Fowler).
2004—Surpassed 500 Thoughtworkers; Selenium, the leading web application testing framework today, was developed based on work started at Thoughtworks.
2005—Established Thoughtworks University.
2009–2010—Opened offices in Brazil and Germany.
2011—Published first edition of Thoughtworks Technology Radar, tracking new developments in technology across techniques, tools, platforms, languages, frameworks.
2012–2014—Opened first offices in Singapore, Ecuador and Italy.
2014—Surpassed $300 million in annual revenues and 3,000 Thoughtworkers. Published the seminal article Microservices and Building Microservices.
2015—Collaborated with Save the Children in the fight against Ebola, developing an open-source and adaptable electronic medical record system for Sierra Leone.
2016—Opened offices in Spain and Chile; Awarded winner of the AnitaB.org Institute’s Top Companies for Women Technologists, winning again in 2017 and 2018 and recognized as a leader in 2019 and 2020.
2017—Surpassed $500 million in annual revenues; Apax Funds acquired Thoughtworks.
2018—Thoughtworks surpassed 5,000 Thoughtworkers.
2019—Surpassed $700 million in annual revenues. Published the Digital Transformation Game Plan: 34 Tenets for Masterfully Merging Technology and Business and How to Move Beyond a Monolithic Data Lake to a Distributed Data Mesh.
7

Table of Contents

2020—Named strong performer in digital product development by Forrester Research Inc.; committed to the Valuable 500, the global movement putting disability on the business leadership agenda; awarded IT Vendor of the Year by the UK IT Industry Awards.
2021—Acquired Gemini and Fourkind; completed initial public offering (IPO) and began trading publicly on the NASDAQ.
Our Growth Strategies
We continue to differentiate ourselves as a leading global technology consultancy that drives digital innovation by leveraging the following key growth strategies:
Deepen our relationships with existing clients. We have a successful track record of expanding our relationships with our existing clients. This is reflected in our total percentage of revenues from recurring clients, which represented 86.5% in 2021. In addition, in 2021, we had 26 clients generating between $5 million and $10 million in revenues and 30 clients generating over $10 million. In 2021 we reached a new milestone with one of those top 10 clients reaching $50 million in revenues. We will continue to focus on larger, higher value projects. We believe we have a substantial opportunity to cross-sell additional services to our existing clients.
Establish new client relationships. We believe there are significant untapped opportunities to win new clients across current and adjacent industry verticals and geographies. To that end, we increased the total number of clients to 371 in 2021 from 320 in 2020. Adding new clients has also enabled us to maintain relatively low client concentration with only 16.8% and 27.3% of our revenues coming from our top five and 10 clients, respectively, in 2021.
Develop new technical capabilities and client solutions. For 28 years, we have been at the forefront of innovation, pioneering numerous innovative trends. We have built a thought leadership engine that we believe is consistently pioneering technology-driven business change. We accomplish this by giving our teams, who work in close proximity to our clients, autonomy to experiment with new technologies while solving complex client problems. When they discover new innovations, we give them resources to develop and harvest them, then scale them through our global delivery model.
Develop and grow our strategic partnerships. While we remain technologically agnostic and work with the appropriate technologies for our clients, we have expanded our relationships with hyperscale cloud providers, including Amazon, Google, Microsoft and Alibaba. This enables us to deepen our capabilities, target new clients and drive meaningful growth. We partner with other third-party product and service companies to expand our delivery capabilities as well as identify additional client opportunities.
Pursue strategic, targeted acquisitions. Our historic growth has been predominantly organic and we expect this to continue. In 2021, we made two strategic acquisitions: (i) Gemini Solutions in Romania to increase our nearshore European presence and (ii) Fourkind in Finland and the Netherlands to enhance our advisory, digital transformation and AI consulting capabilities. Going forward, we believe there is further opportunity to augment our growth by selectively pursuing acquisitions that broaden our service offerings, add leading talent, expand our client base and addressable market and enhance the depth of our capabilities in all of our verticals and geographies.
Focused-geographic expansion. Thoughtworks has throughout its history expanded into key new countries and will continue to do so, as and when opportunities to do so make strategic sense.
Thoughtworks' Differentiation
Thoughtworks was founded in Chicago in 1993 by a small team with a unified purpose. At that time, information technology functions were largely regarded as ineffective cost centers. As a digital native business, Thoughtworks aspired to change this through experimenting and learning to drive continuous improvement and the pursuit of excellence in the craft of software development.
Today, we believe our clients benefit from our differentiation, including our:
Ability to digitally transform global enterprises at scale by applying strategic consulting and cutting edge technologies. Digital transformation requires alignment across the entire organization. Thoughtworks' unique and consistent global approach and end-to-end capabilities span strategy, design, software engineering and organizational transformation. We believe that is why we can enable
8

Table of Contents

clients to realize value swiftly, and why our clients rely on Thoughtworks to solve their most complex problems.
Deep agile and technical expertise coupled with a history of thought leadership. Thoughtworks was an early visionary behind some of today’s leading technologies, as reflected by our range of publications, including approximately 100 software engineering and technology books Thoughtworkers have collectively authored. We have been delivering software and subsequently digital transformation, in an agile manner for over 20 years, long before it was a mainstream practice.
Poly-skilled, transformational and global talent. We believe we deliver transformational change to our clients through our differentiated and diversified talent base of over 10,600 Thoughtworkers. To achieve that, we hire poly-skilled, high-aptitude Thoughtworkers who can learn new skills quickly. We see this as a competitive advantage in the talent market.
Global and distributed agile delivery with a strong local presence. We use highly skilled, distributed teams to deliver custom software projects more effectively and to give our over 370 clients access to the diverse talent they need. Our global delivery ensures our ability to meet our clients’ global demands, while our local presence provides us with specialized knowledge of the local market and culture, enabling us to work side-by-side with our clients in their time zones and languages on innovative and effective solutions.
Award-winning and cultivating culture. Since our founding, we have relentlessly focused on evolving our culture, creating a differentiated brand that Thoughtworkers are proud to be a part of. We believe our culture not only drives higher quality work but also enables us to efficiently recruit and retain Thoughtworkers to drive growth.
Experienced management team with a long history of working together. Our management team has an average tenure of 17 years at Thoughtworks and the majority have been working together as a team for over a decade. Most of the team members have worked across multiple functions and geographies, giving the group a diverse and well-rounded experience-base on all facets of our business.
As a result of our competitive advantages, we have created a virtuous cycle that is difficult to replicate. We earn our clients’ trust to deliver on their most complex and business-critical projects. Our demonstrated track record of success encourages us to further develop cutting-edge technology solutions and expand our thought leadership. As a result, we continuously attract, develop and retain high caliber talent, enabling us to meet and exceed our clients’ needs. The reputation we have built as the go-to partner for digital transformation allows us to command premium bill rates.
Our Culture & People
Since inception, revolutionizing the technology industry has been a core part of Thoughtworks’ mission. We are driven by a desire to “create an extraordinary impact on the world through our culture and technology excellence.” Our people relentlessly pursue our values of integrity, excellence, global-first, cultivation, curiosity, autonomy, inclusivity and courage. We aim to be an awesome partner for clients and their ambitions.
Diversity & Inclusion
Thoughtworks proudly and actively seeks to make itself and the technology industry more reflective and inclusive of the society that we serve. We believe that our flat organizational structure means that every voice can be heard, as evidenced by our 2021 employee engagement survey: we scored 8.7 as an aggregated average across Thoughtworks.
Diversity and inclusion has been a core guiding principle since we were founded. Sixty percent of our executive officers are women and approximately 38.2% of our technologists are women.
Our Recognition
Our differentiated culture has been widely recognized by the industry, earning us numerous awards, including:
Twelve Thoughtworks’ countries now have the Great Place to Work certification. We’re proud that we have achieved industry-leading Great Place to Work trust index scores, with a global average of 90%.
9

Table of Contents

In Q4 2021, our overall global Glassdoor rating is 4.5, higher than the Glassdoor rating for the IT services sector of 3.95.
Attracting Talent
Our employee brand is strong in the market and in 2021, we had 250,000 applications for roles. Our recruitment capability is a source of key differentiation, with 99.99% of all hires being recruited internally through our recruitment and recruitment marketing teams on a 30/30/30 model — with a goal of 30% referrals, 30% direct applicants and 30% sourced, with the help of channels like Access Thoughtworks, our online community for career development and job opportunities.
Thoughtworkers come from a variety of traditional and non-traditional technology backgrounds and include career changers and/or self-taught technologists, valuing transferable skills, adaptability and continuous learning. Our blended delivery approach gives us a clear advantage when it comes to attracting talent. Candidates have the opportunity to work on in-region service line projects, as well as in distributed agile teams — either as part of a nearshore or far-shore delivery team. We believe candidates are attracted by our career development opportunities. We continue to innovate in our recruitment and onboarding processes and tools.
Training Talent
As a pioneer of agile and extreme programming practices, in 2005 we set up Thoughtworks University, our immersive entry-level program for new hires. This provides guidance on career coaching and progression, ensuring our newest Thoughtworkers have the full toolset required for them to build long-term careers at Thoughtworks. As of December 2021, there have been approximately 3,600 graduates from Thoughtworks University since its inception, including 51% women and under-represented gender minorities in 2021.
Retaining Talent
Cultivation and empowerment is a core part of our culture; we call this "Empowering Thoughtworker Growth"—enabling Thoughtworkers to have a personalized, integrated journey of cultivation and growth. We developed tools, including "Pathways" for career planning and growth paths and "Summit" for self-assessment, expectation-setting and feedback, as well as offering Thoughtworkers extensive online training opportunities.
When we became a public company in September 2021, every Thoughtworker with us at that time became an equityholder. Going forward, we can offer equity as part of the total reward package to a broad set of our people. This approach aligns with our inclusive culture and proactive approach to employee retention.
Our Differentiated Service Offerings
We are passionate about creating exceptional customer experiences and helping clients achieve their unique business goals. As our clients continuously evolve and grow their modern digital business capabilities, they capitalize on our end-to-end services that combine strategy, innovative experience design and world-class software engineering. Our four global service lines influence thought leadership, capability development, community building and client work to reinforce our premium brand position.
Enterprise Modernization, Platforms & Cloud
Our Enterprise Modernization, Platforms & Cloud service line focuses on evolving clients’ platforms, processes and talent to deliver business value quickly and enables continuous innovation and development. Key offerings include: modernization strategy and execution; digital platform strategy and engineering organization transformation; cloud modernization; cloud-native application support and evolution; and platform assessment and remediation.
Customer Experience, Product & Design
Our Customer Experience, Product & Design service line brings together design and product thinking with software engineering excellence, integrating product and platform strategies to help our clients build quality,
10

Table of Contents

digital products and deliver differentiated customer experiences. This service line delivers: idea to market; customer experience strategy; product management transformation; product design and delivery.
Data & AI
Our Data & AI service line combines best-in-class data and software engineering practices, product thinking and data science expertise to help our clients extract value, insights and information from their data assets, connect data silos and create effective predictive analysis tools. This service line delivers: data strategy; intelligent products; data platforms and data mesh; continuous delivery for machine learning (CD4ML); and data governance.
Digital Transformation & Operations
Our Digital Transformation & Operations service line connects strategic understanding with software and platform expertise to deliver fast, effective organizational transformation, enabling clients to respond to ever-changing market expectations. This service line delivers: delivery transformation; digital fluency; organizational transformation; value-driven portfolio management; technology strategy; executive advisory services; and digital foundations training.
Our Global Distributed Agile Delivery Model
Thoughtworks is a global business, operating as a single organization, with consistent global capabilities, regardless of country. We have a broad geographical presence with proven capabilities in key regions. As of December 31, 2021, we have 8.6% of our employees in North America, 14.6% in Europe, 15.9% in Latin America ("LATAM") and 60.9% in Asia-Pacific ("APAC").
Our blended delivery model means we are able to partner with our clients in ways that suit them. By offering a combination of onshore and nearshore/offshore talent, we are able to deliver the services our clients need, while balancing costs and proximity considerations.
Our Clients
During 2021, we served over 370 clients ranging from large, global enterprises to technology disruptors, who utilized our services and talent to help them evolve the digital capabilities within their organizations. We have a diversified client base spanning a range of geographies and industry verticals. In 2021, our revenues as a percentage of total revenues were as follows across geographies: 37.1% North America; 33.5% APAC; 25.0% Europe; and 4.4% LATAM. In addition, in 2021, our revenues as a percentage of total revenues were as follows across industry verticals: 27.0% technology and business services; 25.7% energy, public and health services; 19.0% retail and consumer; 15.9% financial services and insurance; and 12.4% automotive, travel and transportation. Additionally, our top five and 10 clients in 2021 represented just 16.8% and 27.3%, respectively, of our revenues.
We have long-term and trusted relationships with our clients. In 2021, 86.5% of our revenues came from recurring clients and our 10 largest clients in 2021 have been clients with us for an average of seven years. We look to partner with clients who recognize the importance of technology as a central component of their business strategy. With that shared understanding, we engrain ourselves in their organizations and collaborate with them to translate that strategy into higher business value over the long term.
11

Table of Contents

Technology &
Business Services
Energy, Public &
Health Services
Retail &
Consumer
Financial Services &
Insurance
Automotive, Travel & Transportation
Ambevtech
Arkose Labs
Authority Brands
Chemonics
EZ-Link
Hipages
MYOB
Paypal
REA Group
Siemens
Simon & Schuster
Xero
Bayer
MCG Health
Telus
U.K. Government Department of Works and Pensions (DWP)
U.K. Government National Health Service (NHS)
U.S. Department of Veteran's Affairs
VAKT
84.51°, a wholly owned subsidiary of The Kroger Co
Falabella
Mackmyra
Metro
Natura
Otto
Sephora
Sonic
Axis Bank
Bank of Ayudhya (Krungsri)
Credit Suisse
InfoArmor
Nimble
Saxo Bank
AutoScout24
Daimler
Finavia
ImmoScout24
Jungheinrich
Porsche
SHARE NOW
Key Challenges Our Clients are Facing
As much as digital transformation is considered an imperative, companies face several key challenges in their digital transformation journeys, including the ability to:
Keep up with the latest technological innovations. Often companies lack the ability to synthesize and prioritize the latest technology to drive value and to compete.
Embrace digital to drive sustainable change across the enterprise. Often, companies are unable to align key functional stakeholders on competing priorities between business and technology.
Deliver digital products and experiences rapidly and at scale. Many organizations struggle to adapt to the pace of change required to thrive in a digital marketplace.
Adopt platform thinking. To benefit fully from digital platforms requires significant investments and, often, cultural changes.
Recruit and retain high-quality talent. Competition for digital talent is fierce. Korn Ferry estimates that there will be approximately $450 billion worth of unrealized output by 2030 due to the massive shortage of skilled digital workers.
Sales & Marketing
Our sales and marketing strategy is focused on increasing revenues from existing clients, generating revenues from new clients and continuing to maintain our brand to appeal to current and prospective clients and employees.
Sales
Our sales strategy emphasizes a team-based approach involving client partners, account managers, delivery professionals, country heads and senior leaders. We have created a three-prong model for our demand teams. One group targets new client acquisition, a second looks after existing clients and the third builds on growing our partner business.
In 2021, we saw larger, longer term client deals and clients with ambitions to scale their digital transformations at a faster pace.
Excellence in Client Services Initiative
Our approach to client relationships is based on the understanding that technology and delivery are as important as sales. Each of our clients has a Client Leadership Team (“CLT”), whose mission is to drive success for the client’s business. The CLT consists of three senior leaders. They are supported by the Excellence in Client Services program, which enables the CLTs to execute strategic change with their clients
12

Table of Contents

through masterclasses, workshops and tools. This has been an effective model for us, allowing us to stay close to not only the client but also the work we deliver and how we deliver it.
Marketing
Our reputation as a leading digital transformation services provider helps us generate new business opportunities. In addition to the flagship Thoughtworks Technology Radar, we have a portfolio of high impact publications such as our annual Looking Glass report, as well as thought leadership events, such as XConf, a global event series focused on the latest thinking from Thoughtworks’ technology community.
The investment in our Digital Experience Platform — including the implementation of a new customer relationship management system and migration to a new content management system — has strengthened our ability to reach and influence our target business executive audience, support account growth with personalized account-based marketing and collate real-time insights to inform our go-to-market strategy.
Our focus on building our premium brand has resulted in Thoughtworks being ranked as a Brand Finance top 25 global IT services brand.
Environment and Social Impact
Environment
Thoughtworks is passionate about sustainability and the environment, and has a long-standing commitment to creating positive social change through our technology contributions. This includes in May 2021, co-founding the Green Software Foundation, along with Microsoft, GitHub, Accenture and the Linux Foundation, which seeks to build a trusted ecosystem for green software. In 2019, Thoughtworks committed to set near-term company-wide emission reductions in line with climate science with the Science Based Target Initiative ("SBTi").
Social Impact
Diversity and inclusion has been a guiding principle since we were founded as evidenced by our 2021 employee engagement survey: Our diversity and inclusion score increased to 8.9 which puts Thoughtworks in the top 5% in the sector. In 2021, 40.6% of Thoughtworkers were women and underrepresented gender minorities.
We work with communities around the world on over 70 initiatives, and strive to make significant contributions to the United Nations ("U.N.") Sustainable development goals ("SDGs"), particularly goals three (good health and well-being), five (gender equality), nine (industry, innovation and infrastructure), 10 (reduced inequalities) and 13 (climate action). We believe that our social impact ethic is a key pillar of our culture and business and is considered a board-level priority. Thoughtworkers seek to undertake transformational social impact projects around the world. An example of this is the work we do in support of the Digital Public Goods Alliance, whose mission is to promote digital public goods to create a more equitable world. In 2021, we provided support to open source digital solutions that may play a role in advancing the SDGs in climate action, good health and well-being, and reduced inequalities.
Revolutionizing the Technology Industry
Alongside our commitment to diversity and inclusion in the technology industry, Thoughtworks has been at the forefront of revolutionizing the technology industry and thought leadership and authorship are part of our DNA.
Books
Thoughtworkers have published approximately 100 books on a wide variety of topics, cementing Thoughtworks’ industry-leading ideas around distributed agile, lean thinking, microservices and evolutionary architecture. Through nurturing talent and supporting would-be authors, Thoughtworks has established a reputation as an attractive place to work for top talent.
13

Table of Contents

Thoughtworks Technology Radar and Thoughtworks Looking Glass
Published twice a year over the past 12 years and now in its 25th edition, Thoughtworks Technology Radar has become the go-to guide for software developers. It helps technologists keep up with the rapid innovation and the ever-evolving technology landscape. The publication received endorsements from Porsche, Redgate and REA Group.
Thoughtworks Looking Glass is our annual report into the day’s most important technology trends. It gives business executives advice on how advances in technology will impact their organization and how quickly they need to react.
Open Source
Thoughtworks has always been an ardent supporter of open source software. This support stems from a philosophical perspective on how the best software is created and from a practical perspective, in that many of the software tools and products we have developed have been created through the use of open source licenses; many Thoughtworkers are dedicated contributors to a wide variety of open source projects.
We believe that open source enables us to build superior solutions to those based on proprietary software in terms of cost, freedom, privacy, security, quality and community. Building open source software allows us to share new ways of working and learn from the wider community.
Our Industry
Modern, next-generation technologies have spawned a digital revolution, advancing the global economy towards a digital age driven by seamless connectivity, efficient cloud computing and advanced data analytics. This is redefining business models, disrupting the competitive landscape and increasing consumer expectations. To survive and enable growth, companies across all industries and geographies need to adapt to the accelerated pace of technological change by undergoing holistic and continuous digital transformations.
Key Technology Industry Trends Driving Digital Transformation
A number of key industry trends are driving spending for digital transformation:
Realizing the potential of platforms. Platform building connected to clearly defined goals is a critical component for modern business.
Rapid advancement of AI- and ML-based tools. AI and Machine Learning ("ML") tools are delivering productivity gains and better, faster decision making.
Enhanced consumer experiences. The way we interact with the digital world is changing — opening up new possibilities for businesses.
Accelerating towards sustainability. Environmental impact is a core concern for every business. Technology presents both challenges and opportunities to being sustainable.
Growing impact of hostile tech. Data is increasingly valuable. This attracts attackers and heightens privacy concerns.
Our Market Opportunity
As companies struggle to keep pace with this accelerating rate of technological innovation, they need to rely on service providers to drive digital transformation, creating a massive market opportunity. According to IDC, global spending on the digital transformation of business practices, products and organizations is forecast to reach $2.8 trillion in 2025, more than double the amount spent in 2020.
Competition
We operate in a global, dynamic and rapidly evolving market and, as a result, face competition from a wide number of organizations and service providers, both global as well as local. These include software
14

Table of Contents

engineering specialists, large global consulting firms, strategic consulting firms, traditional IT services providers and our clients’ in-house development teams.
We believe that our thought leadership, excellence in modern software engineering capabilities, end-to-end solutions that we are able to deliver to our clients rapidly and at scale, differentiated global delivery model and unique culture with a focus on diversity and inclusion provide us with strong, sustained differentiation from our competition.
Limitations of Other Digital Service Providers
While the market for digital transformation services is large and growing rapidly with a range of quality providers, many face some key limitations, including:
Inability to deliver new technological innovations ahead of mass adoption. Many service providers offer expertise around digital innovations only after such innovations reach mass adoption. As a result, they struggle to innovate and adopt newer technologies earlier to differentiate their clients’ digital products and experiences.
Lack of expertise to provide early stage strategy for complex digital transformations. Many service providers are optimized to execute once a template for scaling is designed, but often lack early stage strategy expertise. If technology expertise is absent from strategic decision-making, then the resulting solution may be ineffective or undifferentiated.
Employees focused on narrower specialties. Many service providers train their employees in narrower specialties, resulting in both siloed development and solutions. By taking this approach, employees often lack the full context needed to identify potential problems and opportunities, limiting the speed and depth of innovation.
Limited onshore talent. Many service providers have a high concentration of employees offshore, but offer limited onshore talent. As a result, they may lack important local market context, client intimacy to drive innovation and the ability to influence culture, transfer knowledge and enable sustained organizational change.
Concentration of talent in fewer offshore geographies. Many service providers rely on a limited number of international geographies to recruit their offshore talent. As a result, they may miss out on broader pools of high-quality talent to support demand and are unable to consistently provide talent in the client’s preferred location.
Intellectual Property
Our intellectual property rights are important to our business, particularly around our branding. We rely on a combination of copyright, trademark, patent and unfair competition laws, as well as intellectual property assignment and confidentiality agreements and other methods to protect our intellectual property rights. We require our employees, independent contractors, vendors and clients to enter into written confidentiality agreements upon the commencement of their relationships with us. These agreements generally provide that any confidential or proprietary information disclosed or otherwise made available by us be kept confidential.
We customarily enter into non-disclosure agreements with our clients with respect to the use of their software systems and platforms. Our clients usually own the intellectual property in the software or systems we develop for them. Furthermore, we usually grant a perpetual, worldwide, royalty-free, nonexclusive, transferable and non-revocable license to our clients to use our pre-existing intellectual property but only to the extent necessary to use the software or systems we developed for them.
We have invested and plan to continue to invest in research and development to enhance our domain knowledge and create complex, specialized solutions for our clients. We have registered (or applied for registration of) the trademark “Thoughtworks” in over fifteen jurisdictions, including the United States, the European Union and the United Kingdom, as of December 31, 2021. We have developed several tools, including consulting frameworks and software applications, that we use to deliver digital services to our clients. We have also secured patent protection for certain internal asset tracking and human machine interaction designs. In addition, to ensure we maintain the ability to engage with our clients, employees and the public, we have registered and maintained dozens of domain names.
15

Table of Contents

We do not believe that any individual intellectual property right, other than our rights in our name and logo, is material to our business.
Government Regulations
Due to the industry and geographic diversity of our operations and services, our operations are subject to a variety of rules and regulations. Several foreign and U.S. federal and state agencies regulate various aspects of our business. We are subject to laws and regulations in the United States and other countries in which we operate, including export restrictions, economic sanctions, like the California Consumer Privacy Act (CCPA), the California Privacy Rights Act ("CPRA") and the General Data Protection Regulation (GDPR), among others. Compliance with these laws requires significant resources and non-compliance may result in civil or criminal penalties and other remedial measures.
Corporate & Website Information
Thoughtworks Holding, Inc. was incorporated in Delaware in 2017 to serve as the indirect holding company of Thoughtworks, Inc. and its direct and indirect subsidiaries. Our principal executive offices are located at 200 East Randolph Street, 25th Floor, Chicago, Illinois 60601. Our telephone number is (312) 373-1000. Our website address is www.thoughtworks.com. The information contained on, or that can be accessed through, our website is not incorporated by reference into this Annual Report or any other report or document we file with the SEC.
Available Information
The SEC maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov. We are subject to the information and reporting requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance with this law, will file periodic reports, proxy statements and other information with the SEC. These periodic reports, proxy statements and other information will be available at the website of the SEC referred to above. We also maintain a website at www.thoughtworks.com. You may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Our website also provides access to reports filed by our directors, executive officers and certain significant shareholders pursuant to Section 16 of the Exchange Act. In addition, our Code of Conduct, Code of Ethics for Senior Financial Officers and charters for the committees of our Board of Directors (the "Board") are available on our website as well as other shareholder communications.
Item 1A. Risk Factors
Our business, financial condition, cash flows, and operating results can be affected by a number of factors, whether currently known or unknown, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results and stock price. Before making a decision to invest in our common stock, you should carefully consider all of the risks and uncertainties.     
Risks Related to COVID-19
Our results of operations have been adversely affected and could in the future be materially adversely affected by the COVID-19 pandemic.
The COVID-19 pandemic has created widespread economic disruption and uncertainty, including as it relates to our operations, our people’s ability to work and demand for our services and solutions. For example, the majority of the COVID-19 impact on our business was seen in the second quarter of 2020, following a slowdown in our new business pipeline along with one-time pauses and select cancellations in projects as certain clients were addressing the initial challenges of the pandemic. The initial impact of COVID in early 2020 negatively impacted our revenues, however, we returned to pre-COVID revenue growth by the fourth quarter of 2020 and continued to have positive revenue growth trends in 2021.
16

Table of Contents

The extent to which the COVID-19 pandemic will further impact our business, operations and financial results will depend on numerous factors that are frequently changing or unknown, and that we may not be able to accurately predict, including: the duration and scope of the pandemic, including the development of new and unique variants of COVID-19; governmental, business and individuals’ responses or planned responses to the pandemic, including availability, adoption, efficacy and administration rates of vaccines (or any potential vaccine mandates and societal response thereto); the impact of the pandemic on economic activity and any interventions or government relief or stimulus intended to mitigate decreased economic activity; the effect on our clients and client demand for our services and solutions; our ability to sell and provide our services and solutions, including as a result of travel restrictions and social distancing; our ability to acquire new clients or deepen relationships with our existing clients due to budgetary constraints or changes in business strategy at our clients as a result of the COVID-19 pandemic; the ability of our clients to pay in a timely manner, if at all, for our services and solutions with or without discounts requested by our clients; bankruptcy or other insolvency procedures among our clients; and closures of our and our clients’ offices and facilities.
Certain clients, such as those in the hospitality and travel industries, have experienced broad disruptions in their businesses, which have disrupted, and continue to disrupt, the demand for our services and solutions. Among other things, we have experienced, and could continue to experience, reductions in work orders, delays or interruptions in the performance of contracts, losses of revenues and an increase in bad debt expense. However, certain clients have increased their work orders as those clients have accelerated or initiated digital transformation projects as a result of the COVID-19 pandemic. We cannot be certain that any increased levels of demands for our services will be sustained.
We have also experienced higher than normal employee absentee rates due to illness, family medical leave and bereavement leave. For example, we have seen more of our employees unable to work during a more localized surge of COVID-19 cases. Such a surge, if sufficiently widespread, could materially impact our operations. In addition, government policies, such as China’s Zero-COVID policy, may result in periodic lock-downs, border closures, supply chain disruptions and employee absenteeism, which could have an impact on our business directly or may affect our clients and their engagement with us. An overall or prolonged labor shortage, lack of skilled labor, increased turnover or labor inflation could have a material adverse impact on our operations, results of operations, liquidity or cash flows.
Further, travel and immigration restrictions may delay or prevent our people from accessing worksites. Even as employees return to our worksites, we may be prevented from conducting business activities at full capacity for an indefinite period of time. Moreover, there may be additional costs that we will have to incur in connection with further changes to, or a return to, normal operating conditions. Further, maintaining a hybrid remote/in-office workforce may exacerbate talent management issues and result in issues relating to the onboarding of new employees remotely, dilution of our culture, mismanagement of current employees by failing to identify high performers or misallocation of resources for projects, and may create increased risk of cyber incidents. Alternatively, we potentially risk losing some employees if we cannot offer hybrid or remote working arrangements. We may experience additional absenteeism in the future as travel restrictions are reduced and employees feel more comfortable traveling. To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this section of this Annual Report.
Risks Related to Our People and Growth
We may be unable to implement our growth strategy.
We have grown rapidly and significantly expanded our business over the past several years. Our growth has resulted in part from developing innovative solutions at the forefront of emerging technologies for our clients. However, this requires that we invest substantial amounts of cash in human capital and the infrastructure to support our growth, including training, administration and facilities. Our growth strategy places significant demands on our management and our administrative, operational and financial infrastructure, and our growth strategy creates challenges, including:
recruiting, training and retaining sufficiently skilled professionals and management personnel;
planning our staffing needs on a consistent basis and efficiently using on-site and off-site staffing;
maintaining close and effective relationships with a larger number of clients in a greater number of industries and locations;
17

Table of Contents

controlling costs and minimizing cost overruns and project delays in delivery center and infrastructure expansion;
effectively maintaining productivity levels and implementing process improvements across geographies and business units; and
improving our internal administrative, operational and financial infrastructure.
We intend to continue our expansion and pursue available opportunities for the foreseeable future. As we introduce new services, enter into new markets, integrate corporate acquisitions, and take on increasingly innovative projects, often implementing or introducing new technologies to our clients, our business may face new risks and challenges. If our clients do not choose us for innovative projects or we do not effectively manage those projects, our reputation, business and financial goals may be damaged. We need to generate business and revenues to support new investments and infrastructure projects. The challenges associated with expansion could negatively impact our anticipated growth and margins. As a result, our business, prospects, financial condition and results of operations could be materially adversely affected.
Our ability to generate and retain business depends on our reputation in the marketplace.
Our services are marketed to clients and prospective clients based on a number of factors, including reputation. Our corporate reputation is a significant factor in our potential clients’ evaluation of whether to engage our services. Our clients’ perception of our ability to add value through our services is critical to the profitability of our engagements. We believe that the Thoughtworks brand name and our reputation are important corporate assets that help distinguish our services from those of our competitors and contribute to our efforts to recruit and retain talented employees.
Our corporate reputation is potentially susceptible to damage by actions or statements made by current or former clients and employees, competitors, vendors, adversaries in legal proceedings, government regulators, as well as members of the investment community and the media. We and our officers and directors are and may from time to time be subject to legal proceedings in the ordinary course of business or otherwise, which could adversely affect our reputation even if we or they ultimately prevail. There is a risk that negative information about us, even if untrue, could adversely affect our business, could cause damage to our reputation and be challenging to repair, could make potential or existing clients reluctant to select us for new engagements, could lead to a loss of revenue or litigation, and could adversely affect our recruitment and retention efforts. Damage to our reputation could also reduce the value and effectiveness of the Thoughtworks brand name and could reduce investor confidence in us.
We must successfully attract, hire, train and retain qualified professionals to service our clients’ projects and we must productively deploy our professionals to remain profitable.
Identifying, recruiting, hiring and retaining professionals with specialized and diverse skill sets across our broad geography of operations and consistent with our evolving client delivery model is critical to maintaining existing engagements and obtaining new business. If we are unable to recruit skilled professionals and if we do not deploy those professionals productively, our profitability will be significantly impacted. We must manage our professionals well and by planning and training for future needs effectively and staffing projects appropriately while accurately predicting the general economy and our clients’ need for our services. Increased hiring by technology companies, and increasing worldwide competition for skilled technology professionals may lead to a shortage in the availability of skilled professionals in the locations where we operate and hire. If we are unable to attract, hire, train and retain highly skilled professionals and productively deploy them on client projects, we will jeopardize our ability to meet our clients’ expectations and develop ongoing and future business, which could adversely affect our financial condition and results of operations.
Competition for highly skilled professionals is intense in the markets where we operate, and we may experience significant employee turnover rates due to such competition. If we are unable to retain professionals with specialized skills, our revenues, operating efficiency and profitability will decrease. Cost reductions, such as reducing headcount, or voluntary departures that result from our failure to retain the professionals we hire, could negatively affect our reputation as an employer and our ability to hire skilled professionals to meet our business requirements in the future. Inability to attract or retain professionals with specialized skill sets may disrupt our ability to provide certain client services and impact our reputation for innovation on our industry. Increased compensation to retain skilled professionals could lead to lower margins or to price increases that may in turn lead to a decline in demand for our services.
18

Table of Contents

Any significant growth in the market for our services or solutions or our entry into new markets may require an expansion of our employee base for managerial, operational, financial and other purposes. During any period of growth, we may face problems related to our operational and financial systems and controls, including quality control and delivery and service capacities. We would also need to continue to expand, train and manage our employee base. Continued future growth will impose significant added responsibilities upon the members of management to identify, recruit, maintain, integrate and motivate new employees.
Increases in wages, equity compensation and other compensation expenses could prevent us from sustaining our competitive advantage and increase our costs.
In all countries in which we operate, wage inflation, whether driven by competition for talent, macroeconomic pressures, or ordinary course pay increases, may also increase our cost of providing services and reduce our profitability if we are not able to pass those costs on to our clients or charge premium prices when justified by market demand. If we do not keep up with wage inflation in the markets in which we operate, we could reduce our ability to attract and retain talent. As a corollary, if we increase operations and hiring to a significant degree in developed countries above the hiring rate in emerging countries, our compensation expenses may increase at a faster rate because of the higher wages for technology professionals in those developed markets. In addition, if we are unable to maintain our premium pricing model, we may see reduced profitability or be unable to pay wages consistent with market practices, which may result in higher attrition.
If we cannot positively evolve our Thoughtworks culture as we grow, we could lose the innovation, teamwork, passion and execution that we believe contribute to our success, and our business may be harmed.
We believe a critical component to our success has been our corporate culture. We have invested substantial time and resources in building our team and developing our leaders. Our culture has evolved over time, including in ways that may be unforeseeable or unfavorable to us. As we develop the infrastructure of a public company, our operations may need to change to support that infrastructure. In particular, we are committed to a business culture that promotes intentional sharing of business information and decision-making processes so that our team members are engaged and invested in our mission and operational success. Due to certain operational changes needed to become a public company, we may find it difficult to maintain important aspects of our corporate culture. Further, we may have difficulties maintaining our culture in an environment where employees are working remotely.
If we fail to integrate or manage acquired companies successfully, or if acquisitions do not perform to our expectations, our overall profitability, our culture and growth plans could be materially adversely affected.
As part of our growth strategy, we expect to acquire businesses that we believe are a strategic fit with ours, both culturally and operationally, to augment our organic growth or to keep us at the forefront of emerging technologies. However, we may not be able to find acquisition targets that meet our criteria, and there may be intense competition for acquisition targets that are attractive to us. In addition, we do not have extensive experience integrating and managing acquired businesses or assets. Such acquired businesses or assets may not advance our business strategy or achieve a satisfactory return on our investment; we may not be able to successfully integrate acquired employees into our culture, client relationships or operations; and acquisitions divert significant management attention and financial resources from our ongoing business. Historical practices, policies and controls of acquired companies may present reputation and business risks to us. Furthermore, contracts between our acquisition targets and their clients may lack terms and conditions that adequately protect us against the risks associated with the services we provide, which may increase our potential exposure to damages. If not effectively managed, the disruption of our ongoing business, increases in our expenses (including significant one-time expenses and write-offs) and the difficulty and complexity of effectively integrating acquired operations may adversely affect our overall growth and profitability.
Risks Related to Our Global Operations
Our global business exposes us to operational, geopolitical, regulatory, legal and economic risks.
Our operations and our clients are located throughout the world, and a significant part of our revenue comes from international sales. The global nature of our business creates operational and economic risks. Our results of operations may be affected by global, regional, and local economic developments, monetary policy, inflation, and recession, as well as political, trade and military disputes. War, terrorism, riot, civil insurrection
19

Table of Contents

or social unrest; and natural or man-made disasters, including famine, flood, fire, earthquake, pandemics and other regional or global health crises, storm or disease may cause difficulties in staffing and managing foreign operations, cause clients to delay their decisions on spending for the services we provide, give rise to sudden significant changes in regional and global economic conditions and cycles and may create unanticipated challenges for our growth strategy. Further escalation or expansion of the war between Russia and Ukraine could impact our European business operations including disrupting our client service delivery and negatively impacting the demand for our services. Emerging nationalist trends in specific countries may significantly alter the trade environment. Changes to trade policy or agreements as a result of populism, protectionism, or economic nationalism may result in higher tariffs, local sourcing initiatives, or other developments that make it more difficult to sell our services and solutions internationally. Travel restrictions resulting from natural or man-made disruptions and political or social conflict increase the difficulty of obtaining and retaining highly-skilled and qualified professionals and could unexpectedly increase our labor costs and expenses, both of which could also adversely affect our ability to serve our clients.
Operational, geopolitical and economic events may pose significant security risks to our employees, the facilities where they work, our operations, electricity and other utilities, communications, travel and network services, and the disruption of any or all of them could materially adversely affect our financial results. Our crisis management procedures, business continuity plans and disaster recovery capabilities may not be effective at preventing or mitigating the effects of a disaster.
Certain legal systems or policy decisions may make it more difficult to obtain, maintain, protect and enforce intellectual property, contractual or corporate rights. Disruptions of these kinds in developed or emerging markets could negatively impact demand for our services and solutions or increase our operating costs.
We have significant operations in China. While we believe that our unique position in the Chinese market presents long-term opportunities, doing business in China has increased risks given the uncertainties around domestic legislation, foreign policy, trade policy and international relations. Our reliance on our employees in China to help deliver our services to clients world-wide presents the risk that clients may refuse to accept, or may be prohibited from accepting, services originating from China. Furthermore, we face the risk that our business operations in China will be impacted by government regulations and/or foreign sanctions. Escalation of current geopolitical tensions may implicate China and could increase the risk of government regulations and/or foreign sanctions. In addition, our information technology systems may be at risk of being blocked from our world-wide operations. Ongoing human rights concerns in China may result in boycotts of our services or client requests not to use Chinese operations to support their projects.
Our business, financial condition and results of operations may be adversely affected by fluctuations in foreign currency exchange rates.
Our functional currency is the U.S. dollar. However, we are exposed to foreign currency exchange transactions related to our non-U.S. operations. Our profit margins are subject to volatility as a result of changes in foreign exchange rates. Any significant fluctuations in currency exchange rates may have a material impact on our business and results of operations. In some countries, we may be subject to regulatory or practical restrictions on the movement of cash and the exchange of foreign currencies, which would limit our ability to use cash across our global operations and increase our exposure to currency fluctuations. This risk could increase as we continue expanding our global operations, which may include entering emerging markets that may be more likely to impose these types of restrictions. Currency exchange volatility caused by political or economic instability or other factors could also materially impact our results. See “Item 7A. Management's Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures About Market Risk—Foreign Currency Risk.”
Our effective tax rate could be materially adversely affected by several factors.
We conduct business globally and file income tax returns in multiple jurisdictions. Our effective tax rate could be materially adversely affected by several factors, including changes in the amount of income taxed by or allocated to the various jurisdictions in which we operate that have differing statutory tax rates; changing tax laws, regulations and interpretations of such tax laws in one or more jurisdictions; and the resolution of issues arising from tax audits or examinations and any related interest or penalties. The determination of our income tax expense and other tax liabilities requires estimation, judgment and calculations where the ultimate tax determination may not be certain. Our determination of tax liability is always subject to review or examination by authorities in various jurisdictions. If a tax authority in any jurisdiction reviews any of our tax returns and proposes an adjustment, including, but not limited to, a determination that the transfer prices and terms we
20

Table of Contents

have applied are not appropriate, such an adjustment could have a negative impact on our results of operations, business and profitability. In addition, any significant changes to the Tax Cuts and Jobs Act (“U.S. Tax Act”) enacted in 2017, or to regulatory guidance associated with the U.S. Tax Act, could materially adversely affect our effective tax rate.
Risks Related to Our Industry
If we are unable to adapt to rapidly changing technologies, methodologies and evolving industry standards, we may lose clients and our business could be materially adversely affected.
Rapidly changing technologies, methodologies and evolving industry standards are inherent in the market for our services and solutions. Our ability to anticipate developments in our industry, enhance our existing services, develop and introduce new services or tools, provide enhancements and new features for our solutions and tools, and keep pace with changes and developments are critical to meeting changing client needs. Our ability to keep pace with, anticipate or respond to changes and developments is subject to a number of risks, including that:
we may not be able to develop new, or update existing, services, applications, tools and software quickly or inexpensively enough to meet our clients’ needs;
we may find it difficult or costly to make existing software and tools work effectively and securely over the internet or with new or changed operating systems;
we may find that operating in a rapidly evolving industry, it is difficult to evaluate future prospective clients;
we may find it challenging to develop new, or update existing, software, services and tools to keep pace with evolving industry standards, methodologies and regulatory developments in the industries where our clients operate at a pace and cost that is acceptable to our clients;
we may find that the services, tools, technologies or methodologies we develop or implement may not be successful in the marketplace; and
we may find it difficult to maintain high quality levels of performance with new technologies and methodologies.
Further, services, tools, technologies or methodologies that our competitors develop may render our services or tools non-competitive or obsolete. Our failure to enhance our existing services and tools and to develop and introduce new services and tools to promptly address the needs of our clients could have a material adverse effect on our business.
We face intense competition from a range of technology and software services providers, and an increase in competition or our inability to compete successfully could materially adversely affect our business.
The market for technology services and solutions is intensely competitive, highly fragmented and subject to rapid change and evolving industry standards and we expect competition to intensify. Our success depends on creating software services and solutions that deeply connect our clients with consumers and employees. For example, if we are unable to anticipate technology developments, enhance our existing services or develop and introduce new services to keep pace with such changes and meet changing client needs, we may lose clients and our revenues and results of operations could suffer. Our results of operations would also suffer if our innovations are not responsive to the needs of our clients, are not appropriately timed with market opportunities, are not effectively brought to market or are commoditized. Our competitors may be able to offer engineering, design and innovation services that are, or that are perceived to be, substantially similar or better than those we offer, or they may offer such services at a discounted rate. In addition, our competitors may have greater financial, technical and other resources and greater name recognition than we do. Certain competitors may also have, or over time will have, a stronger presence in certain geographic markets. We may also face competition from in-house development by our clients, academic and government institutions, and the open-source community who may offer similar solutions or an adequate substitute for our services and solutions. These factors may force us to compete on other fronts in addition to the quality of our services and to expend significant resources in order to remain competitive, which we may be unable to do.
21

Table of Contents

Risks Related to Our Client Relationships
We are dependent on our existing client base and our ability to retain and expand our relationships with such clients.
Historically, a significant percentage of our revenues has come from our existing client base. For example, during the fiscal year ended December 31, 2021, 86.5% of our revenues came from recurring clients (as defined elsewhere in this Annual Report). However, the volume of work performed for a specific client is likely to vary from year to year, especially since we generally do not have long-term commitments from our clients and are often not our clients’ exclusive technology services provider. A client in one year may not provide the same level of revenue for us in any subsequent year. Further, one or more of our significant clients could be acquired, and there can be no assurance that the acquirer would choose to use our services in respect of such clients to the same degree as previously, if at all. In particular, some of our clients are owned by private equity firms and are therefore inherently more likely to be sold at some point in the future.
In addition, the services we provide to our clients, and the revenues and income from those services, may decline or vary as the type and quantity of services we provide changes over time. In addition, our reliance on any individual client for a significant portion of our revenues may give that client a certain degree of pricing leverage against us when negotiating contracts and terms of service.
Our business model depends on relationships our teams develop with our clients so that we can understand our clients’ needs and deliver solutions and services that are tailored to those needs. If a client is not satisfied with the quality of work performed by us, or with the type of services or solutions delivered, we could incur additional costs to address the situation, the profitability of that work might be impaired, and the client’s dissatisfaction with our services could damage our ability to obtain additional work from that client. In particular, clients that are not satisfied might seek to terminate existing contracts, which could mean that we could incur costs for the services performed with no associated revenue. This could also direct future business to our competitors.
We generally do not have long-term commitments from our clients, our clients may terminate contracts before completion or choose not to renew contracts, and we are not guaranteed payment for services performed under contract. A loss of business, non-payment or a decrease in the scope of business from significant clients could materially affect our results of operations.
We are generally not our clients’ exclusive IT services provider and we generally do not have long-term commitments from clients to purchase our services. Our clients’ ability to terminate engagements with or without cause and our clients’ inability or unwillingness to pay for services we performed makes our future revenues and profitability uncertain. Although a substantial majority of our revenues are typically generated from clients who also contributed to our revenues during the prior year, our engagements with our clients are typically for projects that are singular in nature. Therefore, we must seek to obtain new engagements when our current engagements end.
There are a number of factors relating to our clients that are outside of our control, which might lead them to terminate or decline to renew a contract or project with us, or be unable to pay us, including:
financial difficulties;
corporate restructuring, or mergers and acquisitions activity;
our inability to complete our contractual commitments and bill and collect our contracted revenues;
change in strategic or operational priorities or economic conditions, resulting in elimination of the project or a reduced level of technology-related spending;
change in outsourcing strategy resulting in moving more work to the client’s in-house technology departments or to our competitors;
replacement of existing software with packaged software supported by licensors; and
uncertainty and disruption to the global markets including due to public health pandemics, such as the ongoing COVID-19 pandemic.
Termination or non-renewal of a client contract could cause us to experience a higher-than-expected number of unassigned employees and thus compress our margins until we are able to reallocate our headcount.
22

Table of Contents

Clients that delay payment, request modifications to their payment arrangements, or fail to meet their payment obligations to us could increase our cash collection time, cause us to incur bad debt expense, or cause us to incur expenses in collections actions. The loss of clients, a significant decrease in the volume of work our clients outsource to us or the price they are willing or able to pay us, if not replaced by new service engagements and revenue, could materially adversely affect our revenues and results of operations.
We face risks associated with having a long selling and implementation cycle for our services that require us to make significant resource commitments prior to realizing revenues for those services.
We have experienced, and may in the future experience, a long selling cycle for our services. Our sales cycle is defined as the elapsed time between the date of opening a qualified client opportunity and to the date the opportunity is closed with an agreement to provide services to the client, and is on average 71 days. Before potential clients commit to use our services, they require us to expend substantial time and resources educating them on the value of our services and our ability to meet their requirements. Therefore, our selling cycle is subject to many risks and delays over which we have little or no control, including our clients’ decision to select another service provider or in-house resources to perform the services, the timing of our clients’ budget cycles, and client procurement and approval processes. If our sales cycle unexpectedly lengthens for one or more large projects, it could negatively affect the timing of our revenues and our revenue growth. In certain cases, we may begin work and incur costs prior to executing a contract, which may cause fluctuations in recognizing revenues between periods or jeopardize our ability to collect payment from clients.
Implementing our services also involves a significant commitment of resources over an extended period of time from both our clients and us. Our current and future clients may not be willing or able to invest the time and resources necessary to implement our services, and we may fail to close sales with potential clients despite devoting significant time and resources to them. Any significant failure to generate revenues or delays in recognizing revenues after incurring costs related to our sales or services processes could have a material adverse effect on our business.
Our cash flows and results of operations may be adversely affected if we are unable to collect on billed and unbilled receivables from clients.
Our business depends on our ability to successfully obtain payment from our clients of the amounts they owe us for work performed. We maintain provisions against receivables. Actual losses on client balances could differ from those that we currently anticipate and, as a result, we may need to adjust our provisions. We may not accurately assess the creditworthiness of our clients. Macroeconomic conditions, such as a potential credit crisis in the global financial system, could also result in financial difficulties for our clients, including limited access to the credit markets, insolvency or bankruptcy. Such conditions could cause clients to delay payment, request modifications of their payment terms, or default on their payment obligations to us, all of which could increase our receivables balance. Timely collection of fees for client services also depends on our ability to complete our contractual commitments and subsequently bill for and collect our contractual service fees. If we are unable to meet our contractual obligations, we might experience delays in the collection of or be unable to collect our client balances, which would adversely affect our results of operations and could adversely affect our cash flows. In addition, if we experience an increase in the time required to bill and collect for our services, our cash flows could be adversely affected, which in turn could adversely affect our ability to make necessary investments and, therefore, our results of operations.
If our pricing structures are based on inaccurate expectations and assumptions regarding the cost of performing our work, or if we are not able to maintain favorable pricing for our services, then our contracts could be unprofitable.
We face a number of risks when pricing our contracts and setting terms with our clients. Our pricing is highly dependent on our internal forecasts, assumptions and predictions about our projects, the marketplace, global economic conditions (including foreign exchange volatility) and the coordination of operations and our people in multiple locations with different skill sets and competencies. If our pricing for a project includes dedicated professionals or facilities and the client were to slow or stop that project, we may not be able to reallocate resources to other clients. Our pricing and cost estimates for the work that we perform may include anticipated long-term cost savings that we expect to achieve and sustain over the life of the contract. Because of such inherent uncertainties, we may underprice our services, fail to accurately estimate the costs of performing the work, or fail to accurately assess the risks associated with potential contracts, such as defined performance goals, service levels and completion schedules. The risk of underpricing our services or underestimating the costs of performing the work is heightened in fixed-price contracts and other similar
23

Table of Contents

commercial contracting arrangements, which may become a larger portion of our revenues if our pricing structures change. If we fail to accurately estimate the resources, time or quality levels required to complete such engagements, or if the cost to us of employees, facilities, or technology unexpectedly increases, we could be exposed to cost overruns. Any increased or unexpected costs, delays or failures to achieve anticipated cost savings, or unexpected risks we encounter in connection with the performance of the services, including those caused by factors outside our control, could make these contracts less profitable or unprofitable. In addition, our industry is sensitive to the economic environment and the industry tends to decline during general economic downturns.
Risks Related to Our Services and Solutions
If we cause disruptions to our clients’ businesses, provide inadequate service, or breach contractual obligations, our clients may have claims for substantial damages against us and our reputation may be damaged. Our insurance coverage may be inadequate to protect us against such claims.
If our professionals make errors in the course of delivering services or we fail to meet contractual obligations to a client, these errors or failures could disrupt the client’s business or expose confidential or personally identifiable information. Any of these events could result in a reduction in our revenues, damage to our reputation, and could also result in a client terminating our engagement and making claims for substantial damages against us. Some of our client agreements do not limit our potential liability for occurrences such as breaches of confidentiality and indemnification relating to intellectual property infringement, misappropriation or other violations, and we cannot generally limit liability to third parties with which we do not have a contractual relationship. In some cases, breaches of confidentiality obligations, including obligations to protect personally identifiable information, may entitle the aggrieved party to equitable remedies, including injunctive relief.
Although we maintain professional liability insurance, product liability insurance, commercial general and property insurance, business interruption insurance, workers’ compensation coverage, cyber insurance and umbrella insurance for certain of our operations, our insurance coverage does not insure against all risks in our operations or all claims we may receive. Damage claims from clients or third parties brought against us or claims that we initiate due to the disruption of our business, litigation or natural disasters, may not be covered by our insurance, may exceed the limits of our insurance coverage, and may result in substantial costs and diversion of resources even if insured. Some types of insurance are not available on reasonable terms or at all in some countries in which we operate, and we cannot insure against damage to our reputation. The assertion of one or more large claims against us, whether or not successful and whether or not insured, could materially adversely affect our reputation, business, financial condition and results of operations.
Security breaches, cyber-attacks, employee and other internal misconduct, computer viruses, the mishandling of personal data and other disruptions to network security could compromise our information and expose us to liability, which would cause our business and reputation to suffer.
In the ordinary course of business, we collect, use, store, process, transmit and view sensitive or confidential data, including intellectual property, proprietary business information or personally identifiable information belonging to us, our clients, respective employees and other end users. This information is stored on our networks or in the data centers and networks of third-party providers. Physical security and the secure processing, maintenance and transmission of this information is critical to our operations and business strategy. Some of our clients have sought, and may continue to seek, additional assurances for the protection of their sensitive information, including personally identifiable information, and attach greater liability in the event that their sensitive information is disclosed.
Despite security measures, information technology and infrastructure may be vulnerable to attacks by hackers, computer malware, viruses, social engineering (including phishing and ransomware attacks), or breached due to software bugs, human error, employee theft, misuse, misconduct or malfeasance, system failure or other disruptions. Any such breach could compromise our networks, or the networks of our third-party providers, and the information stored there could be accessed, held for ransom, publicly disclosed, misappropriated, lost or stolen. Some of our systems will not be fully redundant and any problems at our third-party providers’ data centers could result in lengthy interruptions in service. Such a breach, misappropriation or disruption could also disrupt our operations and the services we provide to clients, damage our reputation, and cause a loss of confidence in our tools and services, as well as require us to expend significant resources to protect against further breaches and to rectify problems caused by these
24

Table of Contents

events. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under applicable laws, and regulatory penalties and could adversely affect our business, revenues and competitive position.
The techniques utilized and planned by hackers, bad actors, and other unauthorized entrants are varied and constantly evolving and may not be detected until a breach has occurred. As a result, despite our efforts, it may be difficult or impossible for us to implement measures that fully prevent such attacks or react in a timely manner. Unauthorized parties may in the future attempt to gain access to our systems or facilities through various means, including, among others, hacking into our or our clients’ systems or facilities, or attempting to fraudulently induce our employees, clients or others into disclosing usernames, passwords, or other sensitive information, which may, in turn, be used to access our information technology systems and gain access to our data or other confidential, proprietary, or sensitive information. Such efforts may be state-sponsored and supported by significant financial and technological resources, making them even more difficult to detect and prevent. There can be no assurance that any security or other operational measures that we or our third-party providers have implemented will be effective against any of the foregoing threats or issues.
In addition, certain of our third-party providers may also be subject to such attempts, which then can be used to attempt to infiltrate our systems or to access our data or other confidential, proprietary, or sensitive information. Because we do not control our third-party service providers or the processing of data by such providers, other than through our contractual relationships, our ability to monitor our third-party providers’ data security may be very limited such that we cannot ensure the integrity or security of measures they take to protect and prevent the loss of our or our clients’ data. As a result, we are subject to the risk that cyber-attacks on, or other security incidents affecting, our third-party providers may adversely affect our business even if an attack or breach does not directly impact our systems. It is also possible that security breaches sustained by, or other security incidents affecting, our competitors could result in negative publicity for our entire industry that indirectly harms our reputation and diminishes demand for our services and solutions.
Furthermore, federal and state regulators and many federal and state laws and regulations require notice of certain data security breaches that involve personal information, which, if applicable, could lead to widespread negative publicity, which may cause our clients to lose confidence in the effectiveness of our data security measures. In addition, we may incur significant costs and operational consequences in connection with investigating, mitigating, remediating, eliminating, and putting in place additional measures designed to prevent future actual or perceived security incidents, as well as in connection with complying with any notification or other obligations resulting from any security incidents.
Our insurance policies may not be adequate to reimburse us for losses caused by security breaches, and we may not be able to collect fully, if at all, under these insurance policies. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could adversely affect our business. Furthermore, we cannot be certain that insurance coverage will continue to be available on acceptable terms or at all, or that the insurer will not deny coverage as to any future claim.
If we are unable to fully protect the security and privacy of our data, or if we or our third-party service providers are unable to prevent any data security breach, incident, unauthorized access, and/or misuse of our information by our clients, employees, service providers, or hackers, it could result in significant liability (including litigation and regulatory actions and fines), cause lasting harm to our brand and reputation and cause us to lose existing clients and fail to win new clients.
A significant failure in our systems, telecommunications or IT infrastructure could harm our service model, which could result in a reduction of our revenues and otherwise disrupt our business.
Our service model relies on maintaining well-functioning voice and data communications, online resource management, financial and operational record management, client service and data processing systems between our client sites and our client management locations. Our business activities may be materially disrupted in the event of a partial or complete failure of any of these technologies, which could be due to software malfunction, computer virus attacks, conversion errors due to system upgrades, damage from fire, earthquake, power loss, telecommunications failure, unauthorized entry, demands placed on internet infrastructure by growing numbers of users and time spent online, increased bandwidth requirements or other events beyond our control. Such events could result in interruptions in service to our clients, damage to our reputation, harm to our client relationships, and reduced revenues and profitability. Further, because we rely
25

Table of Contents

on third-party service providers, we may be affected by security incidents that we can neither control nor mitigate, including their vulnerability to damage or interruption from physical theft, fire, natural disasters, acts of terrorism, power loss, war, telecommunications and other service failures, computer viruses, degradation of service attacks, ransomware, insider theft or misuse, break-ins, software bugs, human error, technical malfunctions and similar events.
Our crisis management procedures, business continuity plans and disaster recovery capabilities may not be effective at preventing or mitigating the effects of such disruptions, particularly in the case of a catastrophic event. Loss of all or part of the infrastructure or systems for a period of time could hinder our performance or our ability to complete client projects on time which, in turn, could lead to a reduction of our revenues or otherwise materially adversely affect our business and business reputation.
Risks Related to Regulation, Legislation and Legal Proceedings
Changes in privacy and data protection regulations could expose us to risks of noncompliance and costs associated with compliance.
We are subject to federal, state and international data privacy and data security regimes due to our global business. For example, among others, we are subject to the European Union’s General Data Protection Regulation (the “GDPR”), California’s Consumer Privacy Act (the “CCPA”), China’s PRC Cybersecurity Law and Brazil’s General Protection Data Law. Each regulatory regime imposes significant restrictions and requirements relating to the processing of personal data. These and other national and international data protection laws are more burdensome than historical privacy standards. Each regime has established complex legal obligations that organizations must follow with respect to the processing of personal data, including a limitation on the transfer of personal information to third parties or to other countries, and the imposition of additional notification, security and other control measures. Compliance with such regimes, including U.S. and foreign data protection laws and regulations, could require us to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate.
In the United States, numerous federal and state laws and regulations, including state data breach notification laws and state consumer protection laws, which govern the collection, use, disclosure and protection of personal information could apply to our operations. Many state legislatures have adopted legislation that regulates how businesses operate online, including measures relating to privacy, data security and data breaches. Laws in all 50 states require businesses to provide notice to clients whose personally identifiable information has been disclosed as a result of a data breach. The laws are not consistent, and compliance in the event of a widespread data breach is costly. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches. Additionally, a new privacy law, the California Privacy Rights Act (the “CPRA”), was approved by California voters in the November 2020 election. The CPRA, which will take effect in most material respects in January 2023, modifies the CCPA significantly, potentially resulting in further uncertainty and requiring us to incur additional costs and expenses in an effort to comply.
Foreign data protection laws, including the GDPR, may also apply to other personal information obtained outside of the United States. The GDPR introduced new data protection requirements in the European Union (the “EU”), as well as potential fines for noncompliant companies of up to the greater of €20 million or 4% of annual global revenue. Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EU and the United States remains uncertain. For example, in 2016, the EU and United States agreed to a transfer framework for data transferred from the EU to the United States, called the Privacy Shield, but the Privacy Shield was invalidated in July 2020 by the Court of Justice of the European Union.
Enforcement actions and decision notices taken by the European Union data protection authorities, in the case of GDPR, by individuals or the California regulatory authorities, in the case of the CCPA, or by other relevant supervisory bodies as well as audits or investigations by one or more individuals, organizations, or foreign government agencies could result in civil or criminal penalties and fines for non-compliance or direct claims against us in the event of any loss or damage as a result of a breach of these regulations. The burden of compliance with additional data protection requirements may result in significant additional costs, complexity and risk in our services. Clients may seek to shift the potential risks resulting from the implementation of data privacy legislation to us. We are required to establish processes and change certain
26

Table of Contents

operations in relation to the processing of personal data as a result of these many regulatory regimes, which may involve substantial expense and distraction from other aspects of our business. The rate of change in the privacy and data protection landscape compounds these risks. Claims that we have violated individuals’ privacy rights, failed to comply with data protection laws or breached our contractual obligations, even if we are not found liable, could be expensive and time consuming to defend, could result in adverse publicity and could have a material adverse effect on our business, financial condition, results of operations and prospects.
We are subject to laws and regulations in the U.S. and other countries in which we operate, including export restrictions, economic sanctions, the Foreign Corrupt Practices Act (the “FCPA”) and similar anti-corruption laws. Compliance with these laws requires significant resources and non-compliance may result in civil or criminal penalties and other remedial measures.
We are subject to many laws and regulations that restrict our international operations, including laws that prohibit activities involving restricted countries, organizations, entities and persons that have been identified as unlawful actors or that are subject to U.S. sanctions. The U.S. Office of Foreign Assets Control, or OFAC, and other international bodies have imposed sanctions that prohibit us from engaging in trade or financial transactions with certain countries, businesses, organizations and individuals. We are also subject to the FCPA and anti-bribery and anti-corruption laws in other countries, all of which prohibit companies and their intermediaries from bribing government officials for the purpose of obtaining or keeping business or otherwise obtaining favorable treatment. We operate in many parts of the world that have experienced government corruption to some degree, and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices, although adherence to local customs and practices is generally not a defense under U.S. and other anti-bribery laws.
Our compliance program contains controls and procedures designed to ensure our compliance with the FCPA, OFAC and other sanctions, and laws and regulations. The continuing implementation and ongoing development and monitoring of our compliance program may be time consuming, expensive, and could result in the discovery of compliance issues or violations by us or our employees, independent contractors, subcontractors or agents of which we were previously unaware.
Any violations of these or other laws, regulations and procedures by our employees or agents, including third parties with whom we associate or companies we acquire, could expose us to administrative, civil or criminal penalties, fines or business restrictions, which could have a material adverse effect on our results of operations and financial condition and would adversely affect our reputation and the market for shares of our common stock and may require certain of our investors to disclose their investment in us under certain state laws.
We may become subject to disputes or legal or other proceedings that could involve significant expenditures by us, which could have a material adverse effect on us, including our financial results.
The nature of our business exposes us to the potential for disputes or legal or other proceedings from time to time relating to product liability, tax matters, personal injury, labor and employment matters, contract disputes, intellectual property, data privacy and data security, and other issues. These disputes, individually or collectively, could affect our business by distracting our management from the operation of our business or impacting our market reputation with our clients. If these disputes develop into proceedings or judgments, these proceedings or judgments, individually or collectively, could involve significant expenditures and any reserves relating thereto may ultimately prove to be inadequate.
Risks Related to Our Indebtedness
Our existing indebtedness could adversely affect our business and growth prospects.
As of December 31, 2021, we had $509.6 million outstanding under our Term Loan (as defined below) and $165.0 million of availability under our Revolver (as defined below). We expect our total debt service obligation for 2022 to be approximately $25.6 million (inclusive of interest). See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Our Credit Facilities.” Our indebtedness, and any future indebtedness we may incur, could require us to divert funds identified for other purposes for debt service, which could adversely affect our business and growth prospects.
27

Table of Contents

Our level of indebtedness may place us at a competitive disadvantage to our competitors that are not as highly leveraged. Fluctuations in interest rates can increase borrowing costs. Increases in interest rates may directly impact the amount of interest we are required to pay and reduce earnings accordingly. In addition, developments in tax policy, such as the disallowance of tax deductions for interest paid on outstanding indebtedness, could have an adverse effect on our liquidity and our business, financial conditions and results of operations.
The Credit Agreement governing our Term Loan and Revolver contains a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interests, including our ability to incur additional debt, create or incur liens, engage in mergers or consolidations, sell, transfer or otherwise dispose of assets, make voluntary prepayments to subordinated debt, pay dividends or distributions, make investments, and enter into certain transactions with affiliates. In addition, the restrictive covenants in the Credit Agreement require us to satisfy a financial condition test for the benefit of our Revolver in the event our Revolver usage exceeds 35% of our available Revolver (subject to certain exclusions for letters of credit). Our ability to satisfy those tests can be affected by events beyond our control.
A breach of the covenants or restrictions under the Credit Agreement could result in an event of default, which could permit our creditors to accelerate our debt and terminate commitments to extend credit to us. In addition, if we cannot generate sufficient cash flow from operations to service our debt, we may need to refinance our debt, dispose of assets or issue equity to obtain necessary funds, which we may not be able to do on favorable terms, or at all.
In addition, the Credit Agreement currently uses LIBOR as a reference rate for the Term Loan and Revolver. It is expected that US banks will phase LIBOR out as a benchmark for loans by mid-2023. The Credit Agreement allows us to continue to use LIBOR until that time with the option to switch to Secured Overnight Financing Rates (SOFR) prior to the LIBOR phase out. While the Credit Agreement includes LIBOR replacement provisions, it is impossible to predict the effect of LIBOR being phased out on our interest expense or financial condition generally.
Risks Related to Our Intellectual Property
If we cannot protect our brand through our intellectual property rights, our business may be harmed.
We believe that developing and maintaining our brand is critical to achieving widespread acceptance of our services and solutions and is an important element in attracting new clients and retaining existing clients. We rely on our brand names, trademarks, trade names and service marks to distinguish our services and solutions from the services of our competitors. If we are unable to adequately protect our brand, trademarks and other intellectual property rights, third parties may use brand names or trademarks similar to ours in a manner that may cause confusion or dilute our brand or trademarks, which could decrease the value of our brand. From time to time, third parties may challenge our use of our trademarks. If we do enforce our trademarks and our other intellectual property rights through litigation, we may not be successful and the litigation may result in substantial costs and diversion of resources and management attention. In the event that our trademarks are successfully challenged, we could be forced to rebrand the affected services and solutions, which could result in loss of brand recognition and could have a material adverse impact on our business.
We may not be able to prevent unauthorized use of our or our clients’ intellectual property, and our business and competitive position may be damaged as a result.
We rely on a combination of copyright, trademark, patent and unfair competition laws, as well as intellectual property assignment and confidentiality agreements and other methods to protect our intellectual property rights. Protection of intellectual property rights and confidentiality in some countries, including China, India and Brazil, in which we operate may not be as effective as in other countries with more developed intellectual property protections.
We require our employees and independent contractors to assign to us all intellectual property and work product they create in connection with their employment or engagement. These assignment agreements also obligate our people to keep proprietary information confidential. While it is our policy to require our employees and independent contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such
28

Table of Contents

an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own. The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. If these agreements are not enforceable in any of the jurisdictions in which we operate, we cannot ensure that we will own the intellectual property they create or that our clients’ proprietary information will not be disclosed. Reverse engineering, unauthorized copying or other misappropriation of our clients’ proprietary technologies, tools and applications could enable unauthorized parties to benefit from our clients’ technologies, tools and applications without payment and may make us liable to our clients for damages and compensation, which could harm our business and competitive position.
We may face intellectual property infringement, misappropriations or other violation claims that could be time-consuming and costly to defend. If we fail to defend ourselves against such claims, we may lose significant intellectual property rights, our reputation may be damaged, we may lose clients and our business could be materially adversely affected.
Our success largely depends on our ability to use and develop our technology, tools, code, methodologies, solutions and services for our clients without infringing, misappropriating or otherwise violating third parties’ intellectual property rights, including patents, copyrights, trade secrets and trademarks. We may be unaware of intellectual property rights relating to our solutions or services that could give rise to potential infringement, misappropriation or violation claims against us or our clients. If those intellectual property rights are potentially relevant to our service offerings, we may need to license those rights in order to continue to use the applicable technology, but the holders of those intellectual property rights may be unwilling to license those rights to us on commercially acceptable terms, if at all.
We typically indemnify clients who purchase our services and solutions against potential infringement of third-party intellectual property rights, which subjects us to the risk and cost of defending the underlying infringement claims. These claims may require us to initiate or defend protracted and costly litigation on behalf of our clients, regardless of the merits of these claims, and our indemnification obligations are often not subject to liability limits or exclusion of consequential, indirect or punitive damages. Intellectual property litigation could also divert our management’s attention from our business and existing or potential clients could defer or limit their purchase or use of our software product development services or solutions until we resolve such litigation. If any of these claims succeed, we may be forced to pay damages on behalf of our clients, redesign or cease offering our allegedly infringing tools, services or solutions to that client, or obtain a license for the intellectual property that such services or solutions allegedly infringe. If we cannot obtain all necessary licenses on commercially reasonable terms, the affected client may be forced to stop using our services or solutions.
Any of these actions, regardless of the outcome of litigation or merits of the claim, could damage our reputation and materially adversely affect our business, financial condition and results of operations.
Risks Related to Our Common Stock
Our stock price may be volatile, and the value of our common stock may decline.
The market price of our common stock may be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control, including without limitation:
actual or anticipated fluctuations in our financial condition or results of operations;
variance in our financial performance from expectations of securities analysts;
changes in our projected operating and financial results;
announcements by us or our competitors of significant business developments, acquisitions, or new offerings;
significant data breaches, disruptions to, or other incidents involving our services;
our involvement in litigation;
future sales of our common stock by us or our stockholders, including as a result of our contractual and other Company-imposed equity plan lock-up releases, beginning in March 2022 or the perception that such sales may occur;
29

Table of Contents

changes in senior management or key personnel;
the trading volume of our common stock;
changes in the anticipated future size and growth rate of our market; and
general macroeconomic, geopolitical and market conditions beyond our control.
Broad market and industry fluctuations, as well as general economic, political, regulatory, and market conditions, such as recessions, interest rate changes, or international currency fluctuations, may also negatively impact the market price of our common stock. In addition, technology stocks have historically experienced high levels of volatility. In the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future, which could result in substantial expenses and divert our management’s attention.
Our issuance of additional capital stock in connection with financings, acquisitions, investments, our equity incentive plans, or otherwise will dilute all other stockholders.
We expect to issue additional capital stock in the future that will result in dilution to all other stockholders. We expect to grant equity awards to employees, directors, and consultants under our equity incentive plans. We may also raise capital through equity financings in the future. As part of our business strategy, we may acquire or make investments in companies, products, or technologies and issue equity securities to pay for any such acquisition or investment. Any such issuances of additional capital stock may cause stockholders to experience significant dilution of their ownership interests and the per share value of our common stock to decline.
If securities or industry analysts do not publish research or publish unfavorable or inaccurate research about our business, the market price and trading volume of our common stock could decline.
The market price and trading volume of our common stock is heavily influenced by the way analysts interpret our financial information and other disclosures. We do not have control over these analysts. If securities analysts or industry analysts cease coverage of us, our stock price would be negatively affected. If securities or industry analysts do not publish research or reports about our business, downgrade our common stock, or publish negative reports about our business, our stock price would likely decline.
We do not intend to pay dividends for the foreseeable future and, as a result, the ability of the holders of our common stock to achieve a return on their investment will depend on appreciation in the price of our common stock.
We do not intend to pay any cash dividends in the foreseeable future. Any determination to pay dividends in the future will be at the discretion of our Board. Accordingly, holders of our common stock may need to rely on sales of our common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.
The Apax Funds control us, and their interests may conflict with ours or yours in the future.
The Apax Funds indirectly beneficially own approximately 64.8% as of March 4, 2022, of our common stock. As a result, the Apax Funds are able to control the election and removal of directors on the Board and thereby determine our corporate and management policies, including potential mergers or acquisitions, payment of dividends, asset sales, amendment of our certificate of incorporation or bylaws, and other significant corporate transactions for so long as the Apax Funds and their affiliates retain significant ownership of us. This concentration of our ownership may delay or deter possible changes in control of the Company, which may reduce the value of an investment in our common stock. Even when the Apax Funds cease to own shares of our stock representing a majority of the total voting power, for so long as the Apax Funds continue to own a significant portion of our stock, the Apax Funds will still be able to significantly influence the composition of our Board and the approval of actions requiring shareholder approval. Accordingly, for such period of time, the Apax Funds will have significant influence with respect to our management, business plans and policies, including the appointment and removal of our officers, decisions on whether to raise future capital, and amending our charter and bylaws, which govern the rights attached to our common stock. In particular, for so long as the Apax Funds continue to beneficially own a significant percentage of our stock, the Apax Funds could cause or prevent a change of control of the Company or a change in the composition of our Board and could preclude any unsolicited acquisition of us. The concentration of ownership could deprive you of an
30

Table of Contents

opportunity to receive a premium for your shares of common stock as part of a sale of us and ultimately might affect the market price of our common stock.
On September 17, 2021, we entered into a director nomination agreement (the "Director Nomination Agreement") with the Apax Funds through their control of Turing EquityCo. II L.P. that provides the Apax Funds the right, but not the obligation, to nominate a number of individuals designated for election as our Board at any meeting of our stockholders (the “Apax Directors”), such that, upon the election of each such individual, and each other individual nominated by or at the direction of our Board or a duly-authorized committee of the board, as a director of our company, the number of Apax Directors serving as directors of our company will be equal to: (i) if the Apax Funds and their affiliates together continue to beneficially own at least 50% of the total voting power of the outstanding shares of our common stock, the lowest whole number that is greater than 50% of the total number of directors comprising our Board; (ii) if the Apax Funds and their affiliates together continue to beneficially own at least 40% (but less than 50%) of the total voting power of the outstanding shares of our common stock, the lowest whole number that is at least 40% of the total number of directors comprising our Board; (iii) if the Apax Funds and their affiliates together continue to beneficially own at least 30% (but less than 40%) of the total voting power of the outstanding shares of our common stock, the lowest whole number that is at least 30% of the total number of directors comprising our Board; (iv) if the Apax Funds and their affiliates together continue to beneficially own at least 20% (but less than 30%) of the total voting power of the outstanding shares of our common stock, the lowest whole number that is at least 20% of the total number of directors comprising our Board; and (v) if the Apax Funds and their affiliates together continue to beneficially own at least 10% (but less than 20%) of the total voting power of the outstanding shares of our common stock, the lowest whole number that is at least 10% of the total number of directors comprising our Board. The Apax Funds may also assign such rights to their affiliates. The Director Nomination Agreement also provides for certain consent rights for the Apax Funds so long as they own at least 50% of the total voting power of the outstanding shares of our common stock. Additionally, the Director Nomination Agreement also prohibits us from increasing or decreasing the size of our Board without the prior written consent of the Apax Funds for so long as the Apax Funds hold at least 40% of the total voting power of the outstanding shares of our common stock.
Apax Partners, the Apax Funds and their affiliates engage in a broad spectrum of activities, including investments in the software industry and technology industry generally. In the ordinary course of their business activities, Apax Partners, the Apax Funds and their affiliates may engage in activities where their interests conflict with our interests or those of our other shareholders, such as investing in or advising businesses that directly or indirectly compete with certain portions of our business or are suppliers or clients of ours. Our certificate of incorporation provides that none of Apax Partners, the Apax Funds, any of their affiliates, or any director who is not employed by us (including any non-employee director who serves as one of our officers in both his or her director and officer capacities) will have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. Apax Partners and the Apax Funds also may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. In addition, Apax Partners and the Apax Funds may have an interest in pursuing acquisitions, divestitures and other transactions that, in their judgment, could enhance their investment, even though such transactions might involve risks to you.
We are a “controlled company” within the meaning of Nasdaq rules and, as a result, we will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections as those afforded to stockholders of companies that are subject to such governance requirements.
The Apax Funds continue to indirectly control a majority of the voting power of our outstanding common stock. As a result, we are a “controlled company” within the meaning of the corporate governance standards of Nasdaq. Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:
the requirement that a majority of our Board consist of independent directors;
the requirement that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
31

Table of Contents

the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
In the future, we may not have a majority of independent directors on our Board, our Compensation and Talent Committee and our Nominating and Governance Committee may not consist entirely of independent directors, and our Compensation and Talent and Nominating and Governance Committees may not be subject to annual performance evaluations. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of other companies listed on Nasdaq.
We are an “emerging growth company” and we expect to elect to comply with reduced public company reporting requirements, which could make our common stock less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we are eligible for certain exemptions from various public company reporting requirements. These exemptions include, but are not limited to, (i) not being required to comply with the auditor attestation requirements of Section 404 of Sarbanes-Oxley, (ii) reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements, and (iii) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved, We could be an emerging growth company for up to five years after the first sale of our common stock pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), which fifth anniversary will occur in 2026. However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenues equal to or greater than $1.07 billion, or we issue more than $1.0 billion of non-convertible debt securities in any three-year period, we would cease to be an emerging growth company prior to the end of such five-year period. We have made certain elections with regard to the reduced disclosure obligations regarding executive compensation in this annual report and may elect to take advantage of other reduced disclosure obligations in future filings. As a result, the information that we provide to holders of our common stock may be different than you might receive from other public reporting companies in which you hold equity interests. We cannot predict if investors will find our common stock less attractive as a result of our reliance on these exemptions. If some investors find our common stock less attractive as a result of any choice we make to reduce disclosure, there may be a less active trading market for our common stock and the market price for our common stock may be more volatile.
In addition, Section 107 of the JOBS Act provides that an emerging growth company can use the extended transition period provided in Section 7(a)(2)(B) of the Securities Act to delay adoption of new or revised accounting standards until such time as those standards apply to private companies. We have elected to “opt-in” to this extended transition period for complying with new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that comply with such new or revised accounting standards on a non-delayed basis. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.
We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices. We may fail to comply with the rules that apply to public companies, including Section 404 of the Sarbanes-Oxley Act, which could result in sanctions or other penalties that would harm our business.
As a public company, and particularly after we are no longer an "emerging growth company", we will incur significant legal, accounting, and other expenses that we did not incur as a private company, including costs resulting from public company reporting obligations under the Securities Act, the Exchange Act, or the regulations regarding corporate governance practices. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules of the SEC, the listing requirements of Nasdaq, and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. These requirements will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. These costs are difficult to predict or estimate.
Pursuant to Sarbanes-Oxley Act Section 404, we will be required to furnish a report by our management on our internal control over financial reporting beginning with our second filing of an Annual Report on Form 10-K
32

Table of Contents

with the SEC after we become a public company. To achieve compliance with Sarbanes-Oxley Act Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. There is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Sarbanes-Oxley Act Section 404. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.
Provisions of our corporate governance documents could make an acquisition of us more difficult and may prevent attempts by our shareholders to replace or remove our current management, even if beneficial to our shareholders.
In addition to the Apax Funds’ beneficial ownership of 64.8% as of March 4, 2022, of our common stock, our certificate of incorporation and bylaws and the Delaware General Corporation Law (the “DGCL”) contain provisions that could make it more difficult for a third party to acquire us, even if doing so might be beneficial to our shareholders. Among other things:
these provisions allow us to authorize the issuance of undesignated preferred stock, the terms of which may be established and the shares of which may be issued without shareholder approval, and which may include supermajority voting, special approval, dividend or other rights or preferences superior to the rights of shareholders;
these provisions provide for a classified Board with staggered three-year terms;
these provisions provide that, at any time when the Apax Funds beneficially own, in the aggregate, less than 50% in voting power of our stock entitled to vote generally in the election of directors, directors may only be removed for cause, and only by the affirmative vote of holders of at least 662⁄3% in voting power of all the then-outstanding shares of our stock entitled to vote thereon, voting together as a single class;
these provisions prohibit shareholder action by written consent from and after the date on which the Apax Funds beneficially own, in the aggregate, less than 50% in voting power of our stock entitled to vote generally in the election of directors;
these provisions provide that, for as long as the Apax Funds beneficially own, in the aggregate, at least 50% in voting power of our stock entitled to vote generally in the election of directors, any amendment, alteration, rescission or repeal of our bylaws by our shareholders will require the affirmative vote of a majority in voting power of the outstanding shares of our stock and at any time when the Apax Funds beneficially own, in the aggregate, less than 50% in voting power of all outstanding shares of our stock entitled to vote generally in the election of directors, any amendment, alteration, rescission or repeal of our bylaws by our shareholders will require the affirmative vote of the holders of at least 662⁄3% in voting power of all the then-outstanding shares of our stock entitled to vote thereon, voting together as a single class; and
these provisions establish advance notice requirements for nominations for elections to our Board or for proposing matters that can be acted upon by shareholders at shareholder meetings.
Our certificate of incorporation contains a provision that provides us with protections similar to Section 203 of the DGCL and will prevent us from engaging in a business combination with a person (excluding the Apax Funds and any of their direct or indirect transferees and any group as to which such persons are a party) who acquires at least 15% of our common stock for a period of three years from the date such person acquired such common stock, unless board or shareholder approval is obtained prior to the acquisition. These provisions could discourage, delay or prevent a transaction involving a change in control of us. These provisions could also discourage proxy contests and make it more difficult for you and other shareholders to elect directors of your choosing and cause us to take other corporate actions you desire, including actions that you may deem advantageous, or negatively affect the trading price of our common stock. In addition, because our Board is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our shareholders to replace current members of our management team.
These and other provisions in our certificate of incorporation, bylaws and Delaware law could make it more difficult for shareholders or potential acquirers to obtain control of our Board or initiate actions that are opposed by our then-current Board, including delay or impede a merger, tender offer or proxy contest involving our company. The existence of these provisions could negatively affect the price of our common stock and limit opportunities for you to realize value in a corporate transaction.
33

Table of Contents

Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our shareholders and the federal district courts of the United States as the exclusive forum for litigation arising under the Securities Act, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us.
Pursuant to our certificate of incorporation, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our shareholders, (iii) any action asserting a claim against us arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws, or (iv) any other action asserting a claim against us that is governed by the internal affairs doctrine; provided that, for the avoidance of doubt, the forum selection provision that identifies the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation, including any “derivative action,” will not apply to suits to enforce a duty or liability created by the Securities Act, the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the U.S. shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. However, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce a duty or liability created by the Securities Act or the rules and regulations thereunder; accordingly, we cannot be certain that a court would enforce such a provision. Our certificate of incorporation further provides that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the provisions of our certificate of incorporation described above; however, our shareholders will not be deemed to have waived (and cannot waive) compliance with the federal securities laws and the rules and regulations thereunder. The forum selection clause in our certificate of incorporation may have the effect of discouraging lawsuits against us or our directors and officers and may limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us. If the enforceability of our forum selection provision were to be challenged, we may incur additional costs associated with resolving such a challenge. While we currently have no basis to expect that any such challenge would be successful, if a court were to find our forum selection provision to be inapplicable or unenforceable, we may incur additional costs associated with having to litigate in other jurisdictions, which could have an adverse effect on our business, financial condition and results of operations and result in a diversion of the time and resources of our employees, management and Board.
A significant portion of our total outstanding shares are restricted from immediate resale but may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.
Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. We had 305,132,181 shares of common stock outstanding based on the number of shares outstanding as of December 31, 2021. Approximately 87% of our outstanding shares (the "Lock-Up Shares") are subject to a 180-day lock-up period provided under lock-up agreements executed in connection with our initial public offering ("IPO") and restricted from immediate resale under the federal securities laws. This lock up period will end on March 14, 2022. In addition, we have agreed with the underwriters to (i) prohibit the transfer of all outstanding shares of common stock, options to acquire common stock and any similar securities held by our employees who are not subject to lock-up agreements, subject to certain exceptions, and (ii) not to modify or waive that restriction, in each for the same 180-day period. All of the Lock-Up Shares (including shares issuable upon the exercise of options) will, however, be able to be resold after the expiration of the lock-up period, as well as pursuant to customary exceptions thereto or upon the waiver of the lock-up agreement by on behalf of the underwriters, in each case, subject to the additional lock-up restrictions imposed under our 2017 Stock Option Plan, if applicable to such securities. If registered, the Lock-Up Shares can be freely sold in the public market upon issuance, subject to the lock-up agreements and the additional lock-up restrictions imposed under our 2017 Stock Option Plan, if applicable to such shares. As restrictions on resale end, the market price of our stock could decline if the holders of currently-restricted Lock-Up Shares sell them or are perceived by the market as intending to sell them.
In addition, pursuant to a Registration Rights Agreement, certain holders of shares of our common stock, including the Apax Funds, have the right, in certain circumstances, to require us to register shares of our common stock under the Securities Act for sale into the public markets. Upon the effectiveness of such a registration statement, all shares covered by the registration statement will be freely transferable.
34

Table of Contents

Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Our corporate headquarters are leased and located at 200 E. Randolph Street, in Chicago, Illinois. We also lease additional office space domestically in Atlanta, Georgia; Chicago, Illinois; Dallas, Texas; Denver, Colorado; New York, New York; and San Francisco, California. In addition, we lease office space in various international locations, including offices in Australia, Brazil, Canada, Chile, China, Ecuador, Finland, Germany, India, Italy, Netherlands, Romania, Singapore, Spain, Thailand and the United Kingdom.
We may procure additional space as we add employees and expand geographically. We believe that our facilities are adequate to meet our needs for the immediate future and that suitable additional space will be available to accommodate any expansion of our operations as needed.
Item 3. Legal Proceedings
From time to time, we may be involved in litigation relating to claims arising out of our operations and businesses that cover a wide range of matters, including, among others, intellectual property, data privacy and cybersecurity, contract and employment, personal injury, product liability and warranty. Currently, there are no claims or proceedings against us that we believe will have a material adverse effect on our business, financial condition, results of operations or cash flows. However, the results of any current or future litigation cannot be predicted with certainty and, regardless of the outcome, we may incur significant costs and experience a diversion of management resources as a result of litigation.
Item 4. Mine Safety Disclosures
Not applicable.
35

Table of Contents





PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information for Common Stock
Our common stock began trading on the Nasdaq Global Select Market under the symbol “TWKS” on September 15, 2021. Prior to that date, there was no public trading market for our common stock.
Holders of Record
As of March 4, 2022, there were 66 holders of record of our common stock. Because many of our shares of common stock are held in street name by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these holders of record.
Dividend Policy
We currently intend to retain all available funds and any future earnings to fund the development and growth of our business and to repay indebtedness and, therefore, we do not anticipate paying any cash dividends in the foreseeable future. Additionally, our ability to pay dividends on our common stock is limited by restrictions on the ability of our subsidiaries to pay dividends or make distributions to us, including as a result of the restrictions in our credit agreement. Any future determination to pay dividends will be at the discretion of our Board, subject to compliance with covenants in current and future agreements governing our and our subsidiaries’ indebtedness and requirements under Delaware law, and will depend on our results of operations, financial condition, capital requirements and other factors that our Board may deem relevant.
Because we are a holding company and have no direct operations, we will only be able to pay dividends from our available cash on hand and any funds we received from our subsidiaries.
Under Delaware law, dividends may be payable only out of surplus, which is calculated as our net assets less our liabilities and our capital, or, if we have no surplus, out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.
See “Risk Factors—Risks Related to Our Common Stock—We do not intend to pay dividends for the foreseeable future and, as a result, the ability of the holders of our common stock to achieve a return on their investment will depend on appreciation in the price of our common stock.”
Securities Authorized for Issuance under Equity Compensation Plans
The information required by this item will be filed (and is hereby incorporated by reference) by an amendment hereto or pursuant to a definitive proxy statement pursuant to Regulation 14A that will contain such information.
Stock Performance Graph
The performance graph shall not be deemed "soliciting material" or to be "filed" with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.
The following graph and related information shows a comparison of the change in the cumulative total return for our common stock, the Nasdaq Composite Index and the S&P 500 Information Technology Index, between September 15, 2021 (the date our common stock commenced trading on Nasdaq) and December 31, 2021. All
36

Table of Contents



values assume an initial investment of $100 and reinvestment of any dividends. The comparisons are based on historical data and are not indicative of, nor intended to forecast, the future performance of our common stock.
https://cdn.kscope.io/4f589a5cb499817713ba0673a69821bd-twks-20211231_g2.jpg
Use of Proceeds
Our Registration Statement on Form S-1 (File No. 333-258985) for our IPO was declared effective by the SEC on September 14, 2021. On September 17, 2021, we closed our IPO pursuant to which we received net proceeds of $314.7 million.
As previously reported, we used $100.0 million of the net proceeds from the IPO to repay outstanding amounts owed under the Term Loan. We used the balance of the net proceeds from the IPO consistent with our intended use thereof as described in our final prospectus dated September 14, 2021 and filed with the SEC pursuant to 424(b) under the Securities Act, on September 16, 2021.
Unregistered Sales of Equity Securities
There were no unregistered sales of equity securities during the year ended December 31, 2021, except as previously reported.
Issuer Purchases of Equity Securities
None.
Item 6. [Reserved]

37

Table of Contents
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should read the sections titled “Risk Factors” and “Forward-Looking Statements and Risk Factor Summary” herein for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
A discussion of our financial condition and results of operations for the fiscal year ended December 31, 2021 compared to the fiscal year ended December 31, 2020 is presented below. A discussion of our financial condition and results of operations for the fiscal year ended December 31, 2020 compared to the fiscal year ended December 31, 2019 is included under "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our prospectus for our initial public offering (the "IPO"), dated September 14, 2021, and filed with the Securities and Exchange Commission (the “SEC”), pursuant to Rule 424(b)(4) on September 16, 2021 (the “IPO Prospectus”).
Overview
We are a global technology consultancy that integrates strategy, design and engineering to drive digital innovation. We are 10,600+ Thoughtworkers strong across 49 offices in 17 countries. Over the last 25+ years, we’ve delivered extraordinary impact together with our clients by helping them solve complex business problems with technology as the differentiator.
Our revenues are generated from providing professional services based on the mix and locations of delivery professionals involved, the pricing structure, which is predominantly time-and-materials, and the type of services, including: enterprise modernization, platforms & cloud; customer experience, product & design; data & artificial intelligence; and digital transformation & operations.
Initial Public Offering
On September 17, 2021, we successfully completed and closed our IPO, in which 42,368,421 shares of our common stock were sold at $21.00 per share, including 5,526,315 shares sold upon the exercise of the underwriters’ option to purchase additional shares from certain of the selling stockholders. The Company received net proceeds of $314.7 million, net of the underwriting discounts and commissions and other offering expenses of approximately $30.3 million. Prior to the completion of the IPO, all shares of the Company's common stock then outstanding were converted into 5,259,163 shares before the Stock Split (as defined below) of common stock on a 1-for-1 basis, and upon the completion of the IPO, all 1,365,058 shares before the Stock Split of the Company’s outstanding redeemable convertible preferred stock converted into an equivalent number of shares of common stock on a 1-for-1 basis.
Additionally, prior to the completion of the IPO, the Company effected an approximately 43.6-for-1 split of each outstanding share of common stock (the “Stock Split”). All share and per share information has been retroactively adjusted to effect the Stock Split for all periods presented, except as otherwise noted.
38

Table of Contents
Key Operational and Business Metrics
In addition to the measures presented in our consolidated financial statements, we use the following key operational and business metrics to evaluate our business, measure our performance, develop financial forecasts and make strategic decisions (in thousands, except percentages):
Year Ended December 31,
202120202019
Revenues$1,069,945 $803,375 $772,191 
Revenue Growth Rate as reported (1)33.2 %4.0 %19.3 %
Revenue Growth Rate at constant currency (1)29.3 %5.1 %22.7 %
Net (loss) income$(23,623)$79,283 $28,420 
Net (loss) income margin(2.2)%9.9 %3.7 %
Adjusted Net Income (2)$125,400 $86,383 $40,507 
Adjusted EBITDA (3)$223,247 $153,193 $107,129 
Adjusted EBITDA Margin (3)20.9 %19.1 %13.9 %
(1)Certain of our subsidiaries use functional currencies other than the U.S. dollar and the translation of these foreign currency amounts into the U.S. dollar can impact the comparability of our revenues between periods. Accordingly, we use Revenue Growth Rate at constant currency as an important indicator of our underlying performance. Revenue Growth Rate at constant currency is calculated by applying the average exchange rates in effect during the earlier comparative fiscal period to the later fiscal period.
(2)We use Adjusted Net Income as an important indicator of our performance. See “—Non-GAAP Financial Measures” below for a definition of and reconciliation of Adjusted Net Income to net (loss) income, the most directly comparable GAAP measure, how we use this measure and an explanation of why we consider this non-GAAP measure to be helpful for investors.
(3)We also use Adjusted EBITDA and Adjusted EBITDA Margin as important indicators of our performance. See “—Non-GAAP Financial Measures” below for a definition of and a reconciliation of Adjusted EBITDA to net (loss) income, the most directly comparable GAAP measure, how we use Adjusted EBITDA and Adjusted EBITDA Margin and an explanation of why we consider these non-GAAP measures to be helpful for investors.
Revenue Growth Rate and Revenue Growth Rate at constant currency
The initial impact of COVID-19 in early 2020 negatively impacted our revenues, however, we returned to pre-COVID revenue growth by the fourth quarter of 2020 and continued to have positive revenue growth trends in 2021. For the year ended December 31, 2021, we reported revenue growth of 33.2% over the prior year. Had our consolidated revenues been expressed in constant currency terms using the exchange rates in effect for the year ended December 31, 2020, we would have reported revenue growth of 29.3%. The positive impact to revenues, from foreign currencies, was as a result of the depreciation of the U.S. dollar relative to certain principal functional currencies of our subsidiaries.
For more detail regarding our exposure to foreign currency rate fluctuations, see Note 2, Revenue Recognition, to our consolidated financial statements and “Item 7A. Quantitative and Qualitative Disclosures About Market Risk.”
Net (Loss) Income, Net (Loss) Income Margin and Adjusted Net Income
For the year ended December 31, 2021, we reported positive revenue growth of 33.2% over the prior year (discussed above), reflecting strong demand for our services and our continued focus on obtaining new clients and growing our existing client relationships. During 2021, cost of revenues and operating expenses were impacted by an increase in stock-based compensation expense compared to the prior year. Selling,
39

Table of Contents
general and administrative expenses as a percentage of revenues were 32.1%, compared to 23.6%, and included increased payroll expenses (excluding stock-based compensation) of $172.9 million for 2021 as we invested in additional headcount to support revenue growth. Income taxes decreased compared to 2020, primarily due to our pre-tax loss as a result of stock-based compensation expense. For more information, see “—Results of Operations.”
For the year ended December 31, 2021, we reported a net loss of $23.6 million, a decrease of $102.9 million, or approximately 129.8%, compared to net income of $79.3 million in 2020, and we reported a net loss margin of 2.2%, a decrease of approximately 12.1%, compared to a net income margin of 9.9% in 2020. The decrease in net income and net income margin was driven by increased stock-based compensation expense of $156.3 million, which includes (a) $61.0 million related to the accelerated vesting of certain employee stock options; (b) $83.4 million related to the new RSU grants issued in connection with the IPO; (c) $6.0 million related to RSU grants awarded in the fourth quarter; and (d) $5.9 million related to options granted earlier in the year. We consider net income margin as the most directly comparable GAAP measure to Adjusted EBITDA Margin.
For the year ended December 31, 2021, we reported Adjusted Net Income of $125.4 million, compared to $86.4 million for the corresponding period in 2020, an increase of $39.0 million, or approximately 45.2%. The increase was primarily due to higher revenues as a result of strong demand for our services, improved staffing leverage alongside our differentiated value proposition and premium services driving a higher bill rate, improved efficiencies in the cost of delivering the general and administrative activities of our business, and lower income tax expense. This was partially offset by increased payroll expenses (excluding stock-based compensation) to support revenue growth.
Adjusted EBITDA and Adjusted EBITDA Margin
For the year ended December 31, 2021, we reported Adjusted EBITDA of $223.2 million, compared to $153.2 million in 2020, an increase of $70.1 million, or approximately 45.7%, and we reported an Adjusted EBITDA Margin of 20.9%, an increase of approximately 1.8%, compared to 19.1% in 2020. The increase in Adjusted EBITDA and Adjusted EBITDA Margin was due to higher revenues as demand for our services increased, improved staffing leverage and efficiencies in our general and administrative expenses, partially offset by operating expenses such as increased payroll expenses (excluding stock-based compensation) to support revenue growth and an increase in professional fees.
Business Update Regarding COVID-19
Since early 2020, the COVID-19 pandemic has caused general business disruption worldwide. As a result of the COVID-19 pandemic, we took precautionary measures to minimize the risk of the virus to our personnel, our clients and the communities in which we operate, including the temporary suspension of all non-essential business travel of personnel and the temporary closure of all of our major offices. Although a significant portion of our workforce has worked remotely through the COVID-19 pandemic, there has been minimal disruption in our ability to effectively provide our service offerings, as our employees are accustomed to operating in remote and distributed environments. Going forward, we will continue to monitor working conditions and adapt as needed.
We may continue to experience a modest adverse impact on certain parts of our business, including a lengthening of the sales cycle for some prospective clients and delays in the delivery of professional services and trainings to our clients. In addition, the continuing pandemic or potential recovery may impact our ability to retain our workforce, integrate new employees, preserve our culture and attract skilled talent. We also experienced, and we may continue to experience, a modest positive impact on other aspects of our business, such as slower growth in certain operating expenses due to reduced business travel and the virtualization or cancellation of in-person client and workforce events. The COVID-19 pandemic has caused substantial global public health and economic challenges. Our employees, communities and business operations and the global economy and financial markets continue to be affected. We cannot accurately predict the extent to which the COVID-19 pandemic will continue to directly and indirectly impact our business, results of operations and financial condition. Future developments and actions to contain the public health and economic impact of the COVID-19 pandemic in the markets we serve are rapidly evolving and highly uncertain.
40

Table of Contents
Key Factors Affecting Our Performance
Our long-term financial trend is characterized by strong organic growth, strong client retention, a significant amount of revenues from recurring clients and substantial margin optimization with the support of onshore, nearshore and offshore delivery centers. Our performance for historical periods and future periods is driven by numerous factors discussed, including the following key factors.
Ability to retain and expand existing client relationships
In 2021, we served more than 370 clients, many of whom we work with across multiple geographies. We actively manage our client portfolio and target clients where we believe there is opportunity to develop long-term relationships and drive significant growth. Accordingly, for the years ended December 31, 2021 and 2020, 86.5% and 91.9%, respectively, of our revenues were derived from recurring clients, which we define as clients for whom we have done work and generated revenues in excess of $25,000 within the preceding fiscal year. For the year ended December 31, 2021, 30 clients generated greater than $10 million in revenues, a 30.4% increase compared to 23 clients in the prior year.
While we continue to derive a substantial part of our overall revenues from recurring clients, we maintain relatively low client concentration among our largest clients. For the year ended December 31, 2021, revenues from our top five and ten clients as a percentage of total revenues were 16.8% and 27.3%, respectively, compared to 19.8% and 32.0%, respectively in 2020. The overall decrease is a result of a higher contribution of revenues from our top 20 and top 50 clients growing at a faster pace than our top five and top 10 clients in 2021 as compared to 2020.
Net Dollar Retention Rate
We also utilize the net dollar retention ratio to measure revenue growth from our clients. Net dollar retention rate provides visibility into the risks associated with our revenues and expected growth, and it measures our ability to continually offer and deliver innovative services to our clients. We use this metric to appropriately manage resources and client retention and growth, such as account management and capability development of our account leadership teams. The net dollar retention ratio is calculated by dividing (a) the current period revenue from recurring clients by (b) the prior comparative period revenue from recurring clients.
The net dollar retention ratio was approximately 125.6% and 102.4% for the years ended December 31, 2021 and 2020, respectively. Fiscal year 2020 was largely driven by the impact of COVID-19. Starting in the second quarter of 2020, we experienced pauses in ongoing engagements and select project cancellations as certain of our clients focused on the immediate challenges linked to the COVID-19 pandemic. We believe that the financial challenges caused by COVID-19 contributed to lower technology spending by our existing customers concentrated in certain verticals, such as automotive, travel and transportation and retail and consumer. To partially offset the impact on revenue from the affected verticals, we pivoted our focus to companies that were increasing their spending on digital transformation in response to the COVID-19 pandemic. During this period, sector diversification enabled us to re-balance sales exposure to verticals that were spending incrementally through the pandemic, such as technology and business services and energy, public and health services. As a result of our continued experience of positive growth trends in 2021, the net dollar retention rate increased for the year ended December 31, 2021.
Ability to acquire new clients
We intend to continue to acquire new clients through programs designed to generate new business demand and position us as a trusted partner. Winning new business in existing and new geographies and industry verticals is a critical component of our growth strategy. Dedicated new business teams work with marketing using data-driven approaches to focus on client acquisition efforts. Commensurately, our total number of clients, which we define as clients with annual spend in excess of $25,000 in the relevant year, increased to 371 as of December 31, 2021 from 320 as of December 31, 2020, as we saw increased demand for our global services, including in North America, Europe, APAC and LATAM. Going forward, we may also add new clients, including in new geographies and industry verticals, through selective strategic acquisitions.
41

Table of Contents
Expanding our technical capabilities and client solutions
We combine strategy, design and software engineering expertise to offer premium, end-to-end solutions to our clients. Our value proposition is based on our thought leadership and expertise across innovative new technologies, differentiated client solutions across our service lines and local and nearshore capabilities (i.e., those delivered from nearby countries in similar time zones) and offshore capabilities (i.e., those delivered from distant countries in different time zones). Our premium position enabled us to drive average revenue per employee of approximately $116,000 for 2021, compared to approximately $108,000 for 2020. We believe our average revenue per employee is meaningfully higher than all our pure-play competitors. We define average revenue per employee as total revenues for the period divided by the average number of employees in such period. The year-over-year increase reflected the increase in demand for our services driven by economic recovery from the pandemic where we have seen continued revenue growth and the overall ramp up in hiring to meet the anticipated increase in demand for our services. Our ability to continue delivering premium and innovative services to our clients depends on evolving our technical and engineering capabilities.
Ability to recruit and retain talent
To provide services to our clients, we must efficiently hire, train and retain skilled professionals without compromising on the high standards we set for our people. We believe our ability to attract and retain top talent drives high client satisfaction and enables us to deliver on strong client demand to generate growth. Apart from driving high client satisfaction, lower attrition leads to lower hiring and training costs and increased productivity. For 2021, our voluntary attrition rate was 15.1%, up from 11.5% for 2020 driven by strong market demand for digital talent. Meanwhile, we increased our total number of employees to 10,642 as of December 31, 2021 from 7,976 as of December 31, 2020, a 33.4% increase as we continued to invest in additional headcount to meet demand.
Ability to optimize our global delivery
We have a global footprint with the ability to deliver services from multiple geographic regions. As of December 31, 2021, 9 out of our top 10 clients relied on Thoughtworks’ delivery from more than one region. We utilize a blended delivery model, which means we are able to offer a combination of local talent with nearshore/offshore talent, allowing us to maintain close proximity to our clients for context and local market knowledge, while driving rapid and high-quality delivery at scale.
Components of Our Operating Results
We operate and manage our business as one reportable segment. While the Company has offerings in multiple market segments and operates in multiple countries, the Company’s business operates as one operating segment. Almost all of the Company’s service offerings are delivered and supported on a global basis. Additionally, most of the Company’s service offerings are deployed in a nearly identical way and the Company’s chief operating decision maker, who is the Company's Chief Executive Officer, evaluates the Company’s financial information and resources and assesses the performance of these resources on a consolidated basis.
Revenues
Time-and-Materials Revenues. We generate the majority of our revenues under time-and-materials contracts, which are billed using hourly, daily or monthly rates to determine the amounts to be charged to the client. Revenue from time-and-material contracts is based on the number of hours worked and at contractually agreed-upon hourly rates and is recognized as those services are rendered as control of the services passes to the customer over time.
Fixed-Price Revenues. Fixed-price contracts include application development arrangements, where progress towards satisfaction of the performance obligation is measured using input methods as there is a direct correlation between hours incurred and the end product delivered to the client. Assumptions, risks and uncertainties inherent in the estimates used to measure progress could affect the amount of revenues, receivables and deferred revenues at each reporting period. Revenues under these contracts are recognized using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying performance obligations.
42

Table of Contents
For a detailed discussion of our revenue recognition policy, refer to Note 2, Revenue Recognition.
Cost of Revenues
Cost of revenues consists primarily of personnel and related costs directly associated with the professional services, including salaries, bonuses, fringe benefits, share-based compensation, project related travel costs; and costs of contracted third-party vendors. Also included in cost of revenues is depreciation attributable to the portion of our property and equipment utilized in the delivery of services to our clients.
Gross Profit and Gross Margin
Gross profit represents revenues less cost of revenues. Gross margin represents gross profit as a percentage of revenues.
Selling, General and Administrative Expenses
Selling, general and administrative expenses represent expenses associated with promoting and selling our services and general and administrative functions of our business. These expenses include the costs of salaries, bonuses, fringe benefits, stock-based compensation, severance, bad debt, travel, legal and accounting services, insurance, facilities (including operating leases), advertising and other promotional activities.
Depreciation and Amortization
Depreciation and amortization consist primarily of depreciation of fixed assets, amortization of capitalized software development costs (internal-use software) and amortization of acquisition-related intangible assets.
Other (Expense) Income
Other (expense) income consists of interest expense, impacts from foreign exchange transactions, gains (losses) on the sale of assets and the write-off of deferred financing fees.
Income Tax Expense
Determining the consolidated income tax expense, deferred income tax assets and liabilities and any potential related valuation allowances involves judgment. We consider factors that may contribute, favorably or unfavorably, to the overall annual effective tax rate in the current year as well as the future. These factors include statutory tax rates and tax law changes in the countries where we operate as well as consideration of any significant or unusual items. Our income tax expense includes the impact of provisions established for uncertain income tax positions, as well as any related interest and penalties. These reserves are adjusted given changing facts and circumstances, such as the closing of a tax audit, statute of limitation lapse or the refinement of an estimate. To the extent the final outcome of an uncertain income tax position differs from the amounts recorded, such differences will impact our income tax expense in the period in which such determination is made.
43

Table of Contents
Results of Operations
The following table sets forth a summary of our consolidated results of operations for the periods indicated (in thousands, except percentages):
Year Ended December 31,
202120202019
Revenues$1,069,945 $803,375 $772,191 
Operating expenses:
Cost of revenues (1)689,443 475,560 476,631 
Selling, general and administrative expenses (1)343,786 189,497 203,886 
Depreciation and amortization17,599 17,479 15,776 
Income from operations19,117 120,839 75,898 
Other (expense) income:
Interest expense(25,456)(25,767)(26,428)
Net realized and unrealized foreign currency (loss) gain(5,465)7,190 (1,750)
Other (expense) income, net(1,671)185 117 
Total other expense(32,592)(18,392)(28,061)
(Loss) income before income taxes(13,475)102,447 47,837 
Income tax expense10,148 23,164 19,417 
Net (loss) income$(23,623)$79,283 $28,420 
Effective tax rate(75.3)%22.6 %40.6 %
(1)Includes stock-based compensation as follows (in thousands):
Year Ended December 31,
202120202019
Cost of revenues$80,440 $— $— 
Selling, general and administrative expenses77,506 1,667 1,949 
Total stock-based compensation expense$157,946 $1,667 $1,949 
Summary Comparison of Year Ended December 31, 2021 with the Year Ended December 31, 2020
Revenues for the year ended December 31, 2021 increased $266.6 million, or 33.2%, to $1,069.9 million, compared to $803.4 million for the year ended December 31, 2020. The increase in revenues was driven by higher demand for services as certain clients accelerated their digital transformation projects. The majority of our revenues are generated from recurring clients or those expanding their usage of our services. Revenue recognized from our recurring client base was approximately 86.5% for the year ended December 31, 2021 and approximately 91.9% for the year ended December 31, 2020, with the remainder of our revenue attributable to new clients.
Our revenue growth primarily depends on our ability to retain and drive growth from existing clients. Our net dollar retention ratio was approximately 125.6% for the year ended December 31, 2021 and approximately 102.4% for the year ended December 31, 2020. For a discussion of the factors impacting our net dollar retention ratio, see "—Key Factors Affecting Our Performance—Net Dollar Retention Rate."
Income from operations for the year ended December 31, 2021 decreased $101.7 million, or 84.2%, to $19.1 million compared to $120.8 million for the year ended December 31, 2020. Income from operations as a percentage of revenues for the year ended December 31, 2021 was 1.8%, compared to 15.0% for the year ended December 31, 2020. The decrease was primarily driven by costs incurred in conjunction with the IPO, specifically additional stock-based compensation expense of $156.3 million, as previously discussed.
44

Table of Contents
Our effective tax rates for the years ended December 31, 2021 and 2020 were (75.3)% and 22.6%, respectively. The effective tax rate in each period differed from the U.S. statutory tax rate of 21% principally due to U.S. corporate state income taxation and the effect of foreign operations which reflects the impact of different income tax rates in locations outside the United States. The decrease in the effective tax rate for the year ended December 31, 2021 over the prior year was primarily due to the unfavorable impact of establishing valuation allowances on deferred tax assets of select foreign operations and the non-deductibility of executive compensation expense in compliance with §162(m) of the Internal Revenue Code, offset by excess tax benefits on stock-based compensation. The negative effective tax rate for the year ended December 31, 2021 is a result of the aforementioned unique net unfavorable items when compared to the pre-tax loss recorded for the year.
Net income for the year ended December 31, 2021 decreased $102.9 million to a loss position of $23.6 million compared to net income of $79.3 million for the year ended December 31, 2020. The decrease was driven by costs incurred in conjunction with the IPO, specifically additional stock-based compensation.
Revenues
We continue to expand our international presence and nearshore capabilities in different geographies. For the year ended December 31, 2021, total revenues grew 33.2%, to $1,069.9 million compared to $803.4 million over the prior year. The increase in revenues was attributable to strong demand for our services, including strong growth across geographies and verticals, expansion in our top 20 and top 50 clients, and revenues from new clients growing from 8.1% to 13.5%, a 5.4% increase from 2020.
Revenues by Industry Vertical
The following table presents our revenues by industry vertical and revenues as a percentage of total revenues by industry vertical for the periods indicated (in thousands, except percentages):
Year Ended December 31,
20212020
Technology and business services$288,70927.0%$228,51428.6%
Energy, public and health services275,27925.7%200,78525.0%
Retail and consumer203,19319.0%141,72917.6%
Financial services and insurance170,49215.9%123,29115.3%
Automotive, travel and transportation132,27212.4%108,65613.5%
Other—%400—%
Total revenues$1,069,945100%$803,375100%
During the year ended December 31, 2021, we continued to see a strong demand environment and sustained revenue growth in the retail and consumer, financial services and insurance and energy, public and health services verticals which grew by 43.4%, 38.3%, and 37.1%, respectively. We also continued to leverage market tailwinds in our technology and business services vertical compared to 2020, as companies focus on digital transformation. In addition, we experienced a recovery in the automotive, travel and transportation vertical compared to 2020.
Revenues by Customer Location
Our revenues are sourced from four geographic markets: North America, APAC, Europe and LATAM. We present and discuss our revenues by the geographic location where the revenues are under client contract; however, the delivery of those client contracts could be supported by offshore delivery locations.
45

Table of Contents
The following table presents our revenues by customer location and revenues as a percentage of total revenues by customer location for the periods indicated (in thousands, except percentages):
Year Ended December 31,
20212020
Customer Location:
North America$396,49137.1%$321,23740.0%
APAC358,59633.5%248,77631.0%
Europe267,12125.0%195,37224.3%
LATAM47,7374.4%37,9904.7%
Total revenues$1,069,945100.0%$803,375100.0%
For the year ended December 31, 2021, we had revenue growth of 23.4% in North America, with the United States contributing $372.8 million of our North America revenues, compared to $307.2 million for the same period in 2020. The largest client demand came from the energy, public and health services and technology and business services industry verticals which was primarily driven by our clients' increased focus on digital transformation in the technology and business services vertical and increased demand to modernize operations and accelerate digital innovation in the energy, public and health services vertical. Further, our ability to retain existing clients and increase the level of services we provide resulted in incremental revenue expansion from 2020 to 2021 where our technology and business services industry vertical remained as our top revenue contributor.
For the year ended December 31, 2021, we had revenue growth of 44.1% in APAC where the top three revenue contributing customer location countries were Australia, China and Singapore generating revenues of $116.5 million, $96.2 million and $59.3 million, respectively, compared to $65.2 million, $83.5 million and $39.1 million, respectively, for the same period in 2020. The increase in revenues for APAC was driven by increased client demand on digital transformation projects in the retail and consumer vertical as well as the technology and business services industry vertical.
For the year ended December 31, 2021, we had revenue growth of 36.7% in Europe where the top two revenue contributing customer location countries were the United Kingdom and Germany generating revenues of $115.2 million and $113.8 million, respectively, compared to $89.2 million and $81.5 million, respectively, for the same period in 2020, with the largest driver of client demand coming from our automotive, travel and transportation industry vertical where certain automotive manufacturers and service providers continued to focus on digital transformation.
For the year ended December 31, 2021, we had revenue growth of 25.7% in LATAM, with Brazil being our largest customer location in LATAM contributing revenues of $28.8 million compared to $16.4 million for the same period in 2020. The largest driver of client demand came from our retail and consumer vertical where our clients continue to focus on digital transformation.
Revenues by Client Concentration
We have long-standing relationships with many of our clients. We seek to grow revenues from our existing clients by continually increasing the value we provide and expanding the scope and size of our engagements. Revenues derived from these clients may fluctuate as these accounts mature or upon beginning or completion of multi-year projects. We believe there is a significant potential for future growth as we expand our capabilities and offerings within existing clients. In addition, we remain committed to diversifying our client base and adding new clients to our client mix.
The following table presents revenues contributed by our largest clients by amount and as a percentage of total revenues for the periods indicated (in thousands, except percentages):
Year Ended December 31,
20212020
Top five clients$179,75516.8%$158,67919.8%
Top ten clients$291,78727.3%$256,82532.0%
46

Table of Contents
During the year ended December 31, 2021, revenues from our top five and top 10 existing clients experienced strong but slower growth compared to our year-over-year growth rate of 33.2% as we saw a higher contribution of revenues from our top twenty and top fifty clients growing at a faster pace in 2021 as compared to 2020. Additionally, we continued to focus on opportunities with new and existing clients, with 13.5% of revenues from new clients and 86.5% of revenues from existing clients, representing increases of 120.8% and 25.3% in revenues from new and existing clients, respectively, from the prior year.
Bookings
We use Bookings ("Bookings") as a forward-looking metric that measures the value of new contracts, renewals, extensions and changes to existing contracts during the fiscal period. We believe Bookings provides a broad measure of useful trend information regarding changes in the volume of our business. We use Bookings to evaluate the results of our operations, generate future operating plans and assess the performance of our company. However, Bookings can vary significantly quarter to quarter due to both timing and demand from our clients and thus the conversion of Bookings to revenues is uncertain. The amount of Bookings involves estimates and judgments and is not a reliable predictor of revenues over time. There is no standard definition or measurement of Bookings thus our methodology may not be comparable to other companies. Bookings were $1,531 million and $952 million for the years ended December 31, 2021 and 2020, respectively.
Cost of Revenues
Year Ended December 31,
(in thousands, except percentages)20212020Change% Change
Cost of revenues$689,443$475,560$213,88345.0%
For the year ended December 31, 2021, cost of revenues (including stock-based compensation) increased by $213.9 million, or 45.0%, compared to 2020. This increase was primarily driven by an increase in payroll and benefit expenses of $122.5 million due to higher headcount as we invested in additional talent to support growth, cumulative stock-based compensation expense of $80.4 million ($15.0 million related to the accelerated vesting of certain employee stock options in conjunction with the IPO and $65.4 million primarily related to the new RSU grants issued at the time of IPO) and an increase of $13.4 million related to third-party contract labor.
Gross Profit and Gross Margin
Year Ended December 31,
(in thousands, except percentages)20212020Change% Change
Gross profit$380,502$327,815$52,68716.1%
Gross margin35.6%40.8%
Our gross margin decreased by 5.2% for the year ended December 31, 2021 compared to 2020, primarily due to costs incurred in conjunction with our successful IPO, specifically additional stock-based compensation of $80.4 million. This was partially offset by our revenue growth from the increased demand for our services along with our ability to execute certain strategic operational efficiency initiatives.
Selling, General and Administrative Expenses
Year Ended December 31,
(in thousands, except percentages)20212020Change% Change
Selling, general and administrative expenses$343,786$189,497$154,28981.4%
For the year ended December 31, 2021, selling, general and administrative expenses were $343.8 million, representing an increase of approximately 81.4% as compared to $189.5 million in 2020. Our selling, general
47

Table of Contents
and administrative expenses increased due to an increase in stock-based compensation expense of $75.8 million, which includes $45.9 million due to the accelerated vesting of certain employee stock options in conjunction with the IPO and $29.9 million primarily related to the new RSU grants issued at the time of IPO. Further, payroll expenses (excluding stock-based compensation) increased by $50.4 million, acquisition-related retention payments by $7.9 million, facility expenses by $7.7 million and professional fees by $13.2 million, partially offset by a decrease in bad debt expense of $8.3 million.
Depreciation and Amortization
Year Ended December 31,
(in thousands, except percentages)20212020Change% Change
Depreciation and amortization$17,599$17,479$1200.7%
Depreciation and amortization relate to depreciation charges on our fixed assets, capitalized software amortization expense and intangible asset amortization expense. There were no material changes in depreciation and amortization in the year ended December 31, 2021 as compared to 2020.
Interest Expense
Year Ended December 31,
(in thousands, except percentages)20212020Change% Change
Interest expense$(25,456)$(25,767)$311(1.2)%
Interest expense is primarily related to our term loan and revolving credit facilities. There were no material changes in interest expense in the year ended December 31, 2021 as compared to 2020.
Other (expense) income, net
Year Ended December 31,
(in thousands, except percentages)20212020Change% Change
Other (expense) income, net$(1,671)$185$(1,856)(1003.2)%
Other (expense) income, net is primarily related to the write-off of deferred financing fees and gains (losses) on the sale of assets. The increase in the expense in the year ended December 31, 2021 as compared to 2020 was due to the write off of $2.1 million of deferred financing fees as a result of debt prepayments.
Income Tax Expense
Year Ended December 31,
(in thousands, except percentages)20212020Change% Change
Income tax expense$10,148$23,164$(13,016)(56.2)%
The Company’s income tax expense decreased by $13.0 million for the year ended December 31, 2021 as compared to 2020 primarily due to the pre-tax loss recorded for the period from IPO related stock-based compensation and related excess tax benefits on stock-based compensation, offset by the unfavorable impact of establishing valuation allowances on deferred tax assets of select foreign operations and the non-deductibility of executive compensation expense in compliance with §162(m) of the Internal Revenue Code.
48

Table of Contents
Foreign Currency Exchange Gains and Losses
See “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” as well as “Item 1A. Risk Factors—Risks Related to Our Global Operations—Our business, financial condition and results of operations may be adversely affected by fluctuations in foreign currency exchange rates."
Non-GAAP Financial Measures
We define Adjusted Net Income as net (loss) income adjusted for unrealized gain (loss) on foreign currency exchange, stock-based compensation expense, employer payroll tax on employee equity incentive plan, amortization of acquisition-related intangibles, acquisition costs, certain professional fees that are considered unrelated to our ongoing revenue-generating operations, tender offer compensation expense that is considered one-time in nature, certain costs related to business rationalization, IPO-related costs, executive compensation expense that is considered one-time in nature and income tax effects of adjustments.
We define Adjusted EBITDA as net (loss) income adjusted to exclude income tax expense, interest expense, other expense (income), net, unrealized gain (loss) on foreign currency exchange, stock-based compensation expense, employer payroll tax on employee equity incentive plan, depreciation and amortization expense, acquisition costs, certain professional fees that are considered unrelated to our ongoing revenue-generating operations, tender offer compensation expense that is considered one-time in nature, certain costs related to business rationalization, IPO-related costs and executive compensation expense that is considered one-time in nature. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenues.
We use Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Net Income as measures of operating performance and the operating leverage in our business. We believe that these non-GAAP financial measures are useful to investors for supplemental period-to-period comparisons of our business and in understanding and evaluating our operating results for the following reasons:
Our management uses Adjusted Net Income to assess our overall performance, without regard to items that are considered to be unique or non-recurring in nature or otherwise unrelated to our ongoing revenue-generating operations, net of the income tax effect of the adjustments;
Adjusted EBITDA and Adjusted EBITDA Margin are widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as stock-based compensation expense, employer payroll tax on employee equity incentive plan, depreciation and amortization expense, interest expense, other expense (income), net, and income tax expense which can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired or costs that are unique or non-recurring in nature or otherwise unrelated to our ongoing revenue-generating operations;
Our management uses Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA Margin in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including the preparation of our annual operating budget, as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance; and
Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA Margin provide consistency and comparability with our past financial performance, facilitate period-to-period comparisons of our core operating results, and also facilitate comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.
Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA Margin have limitations as analytical tools, and you should not consider these measures in isolation or as substitutes for analysis of our financial results as reported under GAAP. Some of these limitations are, or may in the future be, as follows:
Although depreciation and amortization expense is a non-cash charge, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA and Adjusted EBITDA Margin do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA Margin exclude stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy;
49

Table of Contents
Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA Margin do not reflect changes in, or cash requirements for, our working capital needs;
Adjusted EBITDA and Adjusted EBITDA Margin do not reflect (i) interest expense, or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us; or (ii) accruals or tax payments that may represent a reduction in cash available to us;
Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA Margin do not reflect transaction costs related to acquisitions; and
The expenses and other items that we exclude in our calculations of Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA Margin may differ from the expenses and other items, if any, that other companies may exclude from similarly-titled non-GAAP measures when they report their operating results, and we may, in the future, exclude other significant, unusual or non-recurring expenses or other items from these financial measures.
Because of these limitations, Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA Margin should be considered along with other financial performance measures presented in accordance with GAAP.
The following tables present a reconciliation of Adjusted Net Income, Adjusted EBITDA and Adjusted EBITDA Margin to their most directly comparable financial measure prepared in accordance with GAAP for the periods indicated (in thousands, except percentages):
Year Ended December 31,
202120202019
Net (loss) income$(23,623)$79,283 $28,420 
Unrealized foreign exchange losses (gains)5,024 (5,351)703 
Stock-based compensation157,946 1,667 1,949 
Amortization of acquisition-related intangibles12,046 10,537 10,635 
Acquisition costs (a)8,524 633 158 
Certain professional fees (b)1,991 56 1,512 
Non-recurring tender offer compensation expense (c)2,715 — — 
Business rationalization (d)— 1,316 4,589 
IPO-related costs (e)2,713 315 — 
Non-recurring executive compensation expense (f)— — 802 
Employer payroll tax on employee equity incentive plans (g)1,154 — — 
Income tax effects of adjustments (h)(43,090)(2,073)(8,261)
Adjusted Net Income$125,400 $86,383 $40,507 
50

Table of Contents
Year Ended December 31,
202120202019
Net (loss) income$(23,623)$79,283 $28,420 
Income tax expense10,148 23,164 19,417 
Interest expense25,456 25,767 26,428 
Other expense (income), net1,671 (185)(117)
Unrealized foreign exchange losses (gains)5,024 (5,351)703 
Stock-based compensation157,946 1,667 1,949 
Depreciation and amortization29,528 26,528 23,268 
Acquisition costs (a)8,524 633 158 
Certain professional fees (b)1,991 56 1,512 
Non-recurring tender offer compensation expense (c)2,715 — — 
Business rationalization (d)— 1,316 4,589 
IPO-related costs (e)2,713 315 — 
Non-recurring executive compensation expense (f)— — 802 
Employer payroll tax on employee equity incentive plans (g)1,154 — — 
Adjusted EBITDA$223,247 $153,193 $107,129 
Net (loss) income margin(2.2)%9.9 %3.7 %
Adjusted EBITDA Margin20.9 %19.1 %13.9 %
(a)Reflects costs for certain professional fees and retention wage expenses related to certain acquisitions.
(b)Adjusts for certain transaction expenses, non-recurring legal expenses, and one-time professional fees.
(c)Adjusts for the additional compensation expense related to the tender offer completed in the first quarter of 2021.
(d)Adjusts for business rationalization revenues and costs related to closing Thoughtworks Studios, which was completely shut down as of December 31, 2020. Thoughtworkers previously associated with Thoughtworks Studios have been transitioned to other revenue generating functions.
(e)Adjusts for IPO-readiness costs and expenses that do not qualify as equity issuance costs.
(f)Reflects executive compensation expenses for certain roles that were eliminated in connection with our acquisition by the Apax Funds.
(g)We exclude employer payroll tax expense on equity incentive plans as these expenses are tied to the exercise or vesting of underlying equity awards and the price of our common stock at the time of vesting or exercise. As a result, these taxes may vary in any particular period independent of the financial and operating performance of our business.
(h)Adjusts for the income tax effects of the foregoing adjusted items.
Liquidity and Capital Resources
The following table summarizes certain key measures of our liquidity and capital resources (in thousands):
As of December 31,
20212020
Cash and cash equivalents$368,209 $490,841 
Availability under revolving credit facility165,000 85,000 
Borrowings under revolving credit facility— — 
Long-term debt, including current portion (1)504,530 439,757 
(1)The balance includes deferred financing fees. A reconciliation of gross to net amounts is presented in Note 14, Credit Agreements.

Our cash generated from operations and financing activities has been our primary source of liquidity to fund operations and investments. Our capital investments focus on our technology solutions, corporate infrastructure and strategic acquisitions to further expand into new business sectors and/or expand sales in
51

Table of Contents
existing sectors. The Company generates sufficient cash flows for working capital and expects to do so for the foreseeable future.
On September 17, 2021 we completed our IPO, in which an aggregate of 42,368,421 shares of the Company's common stock were sold at $21.00 per share, including 5,526,315 shares sold upon the exercise of the underwriters’ option to purchase additional shares by certain of the selling stockholders. In connection with the IPO, the Company issued and sold 16,429,964 shares and received net proceeds of $314.7 million, after deducting underwriting discounts and commissions and offering expenses of approximately $30.3 million. See Note 1, Business and Summary of Significant Accounting Policies, to our consolidated financial statements.
As of December 31, 2021, our principal sources of liquidity were cash and cash equivalents of $368.2 million and $165.0 million of available borrowings under our revolving credit facility. Cash and cash equivalents as of December 31, 2021 included (a) proceeds from the issuance of preferred stock in the first and second quarter of $322.8 million, net of equity issuance costs of $7.2 million, which proceeds were subsequently used to repurchase equity from existing shareholders; and (b) proceeds from the completion of our IPO in the third quarter of $314.7 million, net of the underwriting discounts and commissions and other offering expenses of approximately $30.3 million. Refer to the notes to our consolidated financial statements for more information.
In the future, we may enter into arrangements to acquire or invest in complementary businesses, services and technologies, or intellectual property rights. To fund these acquisitions or investments, we may seek to access the debt or capital markets. Our ability to obtain additional funding will be subject to various factors, including general market conditions, our operating performance, the market’s perception of our growth potential, lender sentiment and our ability to incur additional debt in compliance with our contractual restrictions, including those in our Credit Agreement (as defined below).
Our Credit Facilities
Our subsidiaries are party to an amended and restated credit agreement, dated as of March 26, 2021 (as amended, the “Credit Agreement”), among Thoughtworks, Inc., Turing Acquisition LLC and Turing Midco LLC (collectively, the “Borrowers”), Turing Topco LLC (“Holdings”), Credit Suisse AG, Cayman Islands Branch, as administrative agent, the lenders party thereto and the other parties from time-to-time party thereto. The Credit Agreement provides for a senior secured term loan of $715.0 million (the “Term Loan”) and a senior secured revolving credit facility of up to $165.0 million (the “Revolver”). As of December 31, 2021, we had $509.6 million outstanding under our Term Loan with an interest rate of 3.50% and no borrowings outstanding under the Revolver.
Borrowings under the Credit Agreement are guaranteed by substantially all the Borrowers’ direct and indirect wholly owned material domestic subsidiaries subject to customary exceptions (the “Guarantors” and together with the Borrowers and Holdings, the “Loan Parties”). The obligations under the Credit Agreement and the guarantees of the Guarantors are secured by substantially all of the Loan Parties’ assets, subject to customary exceptions and thresholds.
Borrowings under the Term Loan bear interest at a rate per annum equal to an applicable margin plus either (a) a base rate or (b) a LIBOR rate, at our option, subject to interest rate floors. Borrowings under the Revolver bear interest at a rate per annum equal to an applicable margin plus either (x) a base rate or (y) a LIBOR rate at our option. In addition to paying interest on outstanding borrowings under the Revolver, we are required to pay a commitment fee to the lenders under the Revolver in respect of unutilized commitments thereunder and customary letter of credit fees. The applicable margins in respect of both the Term Loan and the Revolver are subject to adjustments based on our first lien leverage ratios and corporate family ratings plus a permanent reduction by 25 basis points of the interest rate applicable to our Term Loan and our Revolver upon the completion of the IPO.
The Credit Agreement requires compliance with certain covenants customary for agreements of this type. As of December 31, 2021, we were in compliance with our debt covenants.
52

Table of Contents
Cash Flows
The following table shows a summary of our cash flows for the periods indicated (in thousands):
Year Ended December 31,
202120202019
Net cash provided by (used in):
Operating activities$118,304 $125,296 $29,271 
Investing activities(70,309)(14,993)(18,597)
Financing activities(140,630)318,197 (6,564)
Effect of exchange rate changes on cash and cash equivalents(4,622)6,543 944 
Net (decrease) increase in cash and cash equivalents$(97,257)$435,043 $5,054 
Operating Activities
Net cash provided by operating activities in 2021 decreased $7.0 million compared to 2020. Non-cash charges primarily consisted of amortization of intangible assets, depreciation of property and equipment, and stock-based compensation. The decrease in 2021 was primarily driven by a $36.1 million increase in trade receivables as a result of increased revenue in 2021 compared to 2020 partially offset by a $30.1 million increase in accrued expenses and other liabilities.
Investing Activities
Net cash used in investing activities in 2021 was $70.3 million compared to $15.0 million used in 2020. The change was primarily attributable to the acquisition of Gemini and Fourkind and purchases of property and equipment.
Financing Activities
Net cash used in financing activities in 2021 was $140.6 million, primarily attributable to the repurchase of shares and vested options from our securityholders using the proceeds from the issuance of $720.0 million of preferred stock, partially offset by proceeds from an increase in our term loan (which were subsequently used to pay a dividend to our securityholders in April 2021). In addition, our net financing activities were driven by the repayment of long-term debt of $336.7 million, offset by $314.7 million of net proceeds received from our IPO.
Net cash provided by financing activities in 2020 of $318.2 million was driven by $322.8 million of proceeds from the issuance of preferred stock (net of issuance costs).
Contractual Obligations and Future Capital Requirements
Contractual Obligations
See Note 10, Commitments and Contingencies for information regarding contractual obligations and commitments. Except as disclosed in “—Our Credit Facilities” and those mentioned within Note 10, Commitments and Contingencies, we did not have other material contractual obligations for cash expenditures.
Future Capital Requirements
We believe that our existing cash and cash equivalents combined with our expected cash flow from operations will be sufficient to meet our projected operating and capital expenditure requirements for at least the next twelve months and that we possess the financial flexibility to execute our strategic objectives, including the ability to make acquisitions and strategic investments in the foreseeable future. However, our ability to generate cash is subject to our performance, general economic conditions, industry trends and other factors. To the extent that existing cash and cash equivalents and operating cash flow are insufficient to fund our future activities and requirements, we may need to raise additional funds through public or private equity
53

Table of Contents
or debt financing. If we incur new debt, the debt holders would have rights senior to common stockholders to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends on our common stock. If we issue additional equity or convertible debt securities, existing stockholders may experience dilution, and such new securities could have rights senior to those of our common stock. These factors may make the timing, amount, terms and conditions of additional financings unattractive. Our inability to raise capital could impede our growth or otherwise require us to forego growth opportunities and could materially adversely affect our business, financial condition and results of operations. There is no assurance that we would be able to raise additional funds on favorable terms or at all.
Commitments and Contingencies
Certain conditions may exist as of the date of the consolidated financial statements which may result in a loss to the Company but will only be resolved when one or more future events occur or fail to occur. Such liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources, are recorded when the Company assesses that it is probable that a future liability has been incurred and the amount can be reasonably estimated. Recoveries of costs from third parties, which the Company assesses as being probable of realization, are recorded to the extent of related contingent liabilities accrued. Legal costs incurred in connection with matters relating to contingencies are expensed in the period incurred. The Company records gain contingencies when realized.
Off-Balance Sheet Arrangements
We did not have during any of the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Recent Accounting Pronouncements
See Note 1, Business and Summary of Significant Accounting Policies, in the notes to our consolidated financial statements for a discussion of recent accounting pronouncements.
Critical Accounting Policies
Our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report are prepared in accordance with GAAP. In preparing the consolidated financial statements, we make estimates and judgments that affect the reported amounts of assets, liabilities, stockholders’ equity, revenues, expenses and related disclosures. We re-evaluate our estimates on an on-going basis. Our estimates are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Because of the uncertainty inherent in these matters, actual results may differ from these estimates and could differ based upon other assumptions or conditions. The critical accounting policies that reflect our more significant judgments and estimates used in the preparation of our consolidated financial statements include those noted below.
Revenue Recognition
We generate revenues by providing professional services in software development and consulting services to companies across the globe.
We determine revenue recognition through the following steps in accordance with Accounting Standards Codification (“ASC”) 606:
identification of the contract, or contracts, with a client;
identification of the performance obligations in the contract;
determination of the transaction price;
allocation of the transaction price to the performance obligations in the contract; and
recognition of revenues when, or as, we satisfy a performance obligation.
54

Table of Contents
Revenue is recognized when control of services is passed to a client in an amount of revenue that reflects the consideration the Company expects to be entitled to in exchange for those services. Such control may be transferred over time or at a point in time, depending on satisfaction of obligations stipulated by the contract. The Company records sales and other taxes collected from clients and remitted to governmental authorities on a net basis.
The Company generates revenues from a variety of professional service arrangements. Fees for these contracts may be in the form of time-and-materials and fixed price. The Company also reports gross reimbursable expenses incurred as both revenues and cost of revenues in the consolidated statements of (loss) income and comprehensive (loss) income.
Revenues are measured based on consideration specified in a contract with a client, which may consist of both fixed and variable components, and the consideration expected to be received is allocated to each separately identifiable performance obligation based on the performance obligation’s relative stand-alone selling price. The standalone selling prices are generally determined based on the prices at which the Company separately sells the services.
Stock-Based Compensation
We grant equity incentive awards to certain of our employees and directors. These compensation arrangements are settled in equity, or in certain cases at our discretion, in cash, at a predetermined price. The equity incentive awards generally vest over a period of one to four years and, in certain cases, vest in full on a liquidity event involving the Company. The options have a contractual term of 10 years from the grant date. We measure share-based awards at the grant date based on the fair value of the award and we recognize such fair value as compensation expense over the vesting period using the accelerated amortization method.
Performance Vesting and Time Vesting Options
Through September 17, 2021 (the "IPO Closing Date"), the Company estimated grant date fair value for stock option awards using a hybrid of the Probability-Weighted Expected Return Method (“PWERM”) and the Option-Pricing Model (“OPM”) that used assumptions including expected volatility, expected term, and the expected risk-free rate of return. Prior to the completion of our IPO, we relied, in part, on valuation reports prepared by unrelated third-party valuation firms to assist us in valuing our share-based awards.
On September 9, 2021, the Board, through unanimous written consent, approved a modification to the Company's 2017 Stock Option Plan which, upon completion of the IPO, a sponsor return of 2.8x times sponsor investment was achieved, and the service condition under the Plan that participants must provide at least 18 months of continuous service following the grant date in order for performance vesting options to vest was waived. Additionally, the Board also approved accelerated vesting of all remaining, unvested former Class C performance vesting options, after the achievement of such sponsor return, which resulted in all performance vesting options becoming fully vested upon pricing of the IPO. Unless otherwise prohibited by law in local jurisdictions, time vesting options will continue to vest according to the Plan. No stock option awards were granted during the third or fourth quarters of 2021. For more information regarding the stock option awards, see Note 12, Stock-Based Compensation, to our consolidated financial statements.
Stock Appreciation Rights (“SARs”) Conversion
On September 9, 2021, the Board, through unanimous written consent, approved a modification to the Company's Stock Appreciation Rights Plan (the “SARs Plan”) which, upon completion of the IPO, was discontinued and all outstanding stock appreciation rights (“SARs”) converted to restricted stock units (“RSUs”). RSUs granted in connection with the SARs conversion will vest after six months and twelve months after the IPO closing date with 50% at each vesting date, such that 100% of RSUs related to the SARs conversion will be fully vested on September 17, 2020, twelve months after the completion of the IPO. See Note 12, Stock-Based Compensation, to our consolidated financial statements for additional information.
Restricted Stock Units (“RSUs”)
In September 2021, the Board approved the 2021 Omnibus Incentive Plan (the “Omnibus Plan”). Under the Omnibus Plan, RSUs are awarded to eligible employees and entitle the grantee to receive shares of common
55

Table of Contents
stock at the end of a vesting period. The fair value of the RSUs is determined based on the market price of our common stock on the date of grant.
All RSUs granted as a result of the IPO, including the RSUs granted in connection with the SARs conversion, include a lock-up period of 6 months before the participants may redeem the shares. Throughout the vesting period and the lock-up period, shareholders are subject to the market risk on the value of their shares.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to certain market risks in the ordinary course of our business. These risks primarily result from changes in concentration of credit, interest rates and foreign currency exchange rates. In addition, our international operations are subject to risks related to differing economic conditions, civil unrest, political instability or uncertainty, military activities, broad-based sanctions, differing tax structures, and other regulations and restrictions. Refer to Note 1, Business and Summary of Significant Accounting Policies, for discussion related to concentration of credit risk.
Interest Rate Risk
We are primarily exposed to changes in interest rates with respect to our cost of borrowing under our Credit Agreement. We monitor our cost of borrowing under our credit facilities, taking into account our funding requirements and our expectations for interest rates in the future. In 2021, a hypothetical 100 basis point increase in the average LIBOR/base rate applicable to our borrowings would have resulted in a $5.3 million increase in our interest expense, while a hypothetical 100 basis point decrease in the average LIBOR/base rate would have resulted in a $6.2 million decrease in our interest expense reflecting a LIBOR/base rate floor under our credit facilities of 0.5%.
Foreign Currency Risk
We operate in several countries across the world. Our international sales are primarily denominated in foreign currencies, and any unfavorable movement in the exchange rate between U.S. dollars and the currencies in which we conduct sales in foreign countries could have an adverse impact on our revenues. A portion of our operating expenses are incurred outside the United States and are denominated in foreign currencies, which are also subject to fluctuations due to changes in foreign currency exchange rates. In addition, our suppliers incur many costs, including labor and supply costs, in other currencies. While we are not currently contractually obligated to pay increased costs due to changes in exchange rates, to the extent that exchange rates move unfavorably for our suppliers, they may seek to pass these additional costs on to us, which could have a material impact on our gross margins. Our operating results and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates. However, we believe that the exposure to foreign currency fluctuation from operating expenses is relatively small at this time as the related costs do not constitute a significant portion of our total expenses. We have generally not entered into derivatives or hedging transactions, as our exposure to foreign currency exchange rates has historically been partially hedged as our foreign currency denominated inflows have covered our foreign currency denominated expenses. However, we may enter into derivative or hedging transactions in the future if our exposure to foreign currency should become more significant.
In 2021, our revenues denominated and recorded in currencies other than U.S. dollars amounted to 65% of our total revenues. A hypothetical 10% increase or decrease in the value of the U.S. dollar against the principal foreign currencies in which our revenues are measured (namely, the Australian dollar, Chilean Peso, Chinese Yuan, British Pound, Euro, Indian Rupee and Brazilian Real) would have caused our revenues to decrease or increase, respectively, by approximately $59.5 million.
Inflation Risk
We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and operating results.
56

Table of Contents

Item 8. Financial Statements and Supplementary Data
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
57

Table of Contents


Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of Thoughtworks Holding, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Thoughtworks Holding, Inc. (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of (loss) income, comprehensive (loss) income, changes in redeemable convertible preferred stock and stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.





/s/ Ernst & Young LLP



We have served as the Company’s auditor since 2017.

Chicago, Illinois

March 8, 2022
58

Table of Contents

THOUGHTWORKS HOLDING, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
December 31, 2021December 31, 2020
Assets
Current assets:
Cash and cash equivalents$368,209 $490,841 
Trade receivables, net of allowance for doubtful accounts of $8,916 and $10,385, respectively
145,874 113,183 
Unbilled receivables104,057 88,340 
Prepaid expenses 15,994 9,442 
Other current assets44,805 9,960 
Total current assets678,939 711,766 
Property and equipment, net34,500 26,347 
Intangibles and other assets:
Goodwill346,719318,151
Trademark273,000273,000
Customer relationships, net125,867129,055
Other non-current assets25,125 16,904 
Total assets$1,484,150 $1,475,223 
Liabilities, redeemable convertible preferred stock and stockholders' equity
Current liabilities:
Accounts payable$4,773 $4,349 
Long-term debt - current7,150 4,565 
Income taxes payable15,693 11,032 
Accrued compensation79,460 49,896 
Deferred revenue13,807 11,720 
Value-added tax and sales tax payable7,954 6,846 
Accrued expenses51,693 29,749 
Total current liabilities180,530 118,157 
Long-term debt, less current portion497,380 435,192 
Deferred tax liabilities78,944 98,310 
Other long-term liabilities18,805 16,052 
Total liabilities775,659 667,711 
59

Table of Contents
THOUGHTWORKS HOLDING, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
December 31, 2021December 31, 2020
Commitments and contingencies (See Note 10)
Redeemable, convertible preferred stock:
Series A redeemable convertible preferred stock, $0.001 par value; zero and 217,902,632 shares authorized, zero and 23,493,546 issued and outstanding at December 31, 2021 and December 31, 2020, respectively
— 322,800 
Series B redeemable convertible preferred stock, $0.001 par value; zero shares authorized, zero issued and outstanding at December 31, 2021 and December 31, 2020, respectively
—  
Stockholders’ equity:
Convertible preferred stock, $0.001 par value; 100,000,000 and zero shares authorized, zero issued and outstanding at December 31, 2021 and December 31, 2020, respectively
 — 
Common stock, $0.001 par value; 1,000,000,000 and zero shares authorized, 356,117,752 and zero issued, 305,132,181 and zero outstanding at December 31, 2021 and December 31, 2020, respectively
356 — 
Class A common stock, $0.001 par value; zero and 416,194,027 shares authorized, zero and 272,054,182 issued and outstanding at December 31, 2021 and December 31, 2020, respectively
— 272 
Class B common stock, $0.001 par value; zero and 116,577,908 shares authorized, zero and 5,002,488 issued, zero and 4,474,514 outstanding at December 31, 2021 and December 31, 2020, respectively
— 5 
Class C common stock, $0.001 par value; zero and 55,565,172 shares authorized, zero and 1,838,757 issued, zero and 1,794,020 outstanding at December 31, 2021 and December 31, 2020, respectively
— 2 
Treasury stock, 50,985,571 and 572,711 shares at December 31, 2021 and December 31, 2020, respectively
(629,424)(1,608)
Additional paid-in capital1,390,630 381,172 
Accumulated other comprehensive loss(10,863)(1,589)
Retained (deficit) earnings (42,208)106,458 
Total stockholders' equity708,491 484,712 
Total liabilities, redeemable convertible preferred stock and stockholders' equity$1,484,150 $1,475,223 
The accompanying notes form an integral part of the consolidated financial statements.

60

Table of Contents
THOUGHTWORKS HOLDING, INC.
CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME
(In thousands, except share and per share data)

Year Ended December 31,
202120202019
Revenues$1,069,945 $803,375 $772,191 
Operating expenses:
Cost of revenues689,443 475,560 476,631 
Selling, general and administrative expenses343,786 189,497 203,886 
Depreciation and amortization17,599 17,479 15,776 
Total operating expenses1,050,828 682,536 696,293 
Income from operations19,117 120,839 75,898 
Other (expense) income:
Interest expense(25,456)(25,767)(26,428)
Net realized and unrealized foreign currency (loss) gain(5,465)7,190 (1,750)
Other (expense) income, net(1,671)185 117 
Total other expense(32,592)(18,392)(28,061)
(Loss) income before income taxes(13,475)102,447 47,837 
Income tax expense10,148 23,164 19,417 
Net (loss) income$(23,623)$79,283 $28,420 
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments(9,274)8,478 2,894 
Comprehensive (loss) income$(32,897)$87,761 $31,314 
Net (loss) earnings per common share:
Basic (loss) earnings per common share$(0.33)$0.26 $0.10 
Diluted (loss) earnings per common share$(0.33)$0.26 $0.10 
Weighted average shares outstanding:
Basic 254,271,997 278,225,009 277,762,271 
Diluted 254,271,997 284,582,536 281,495,640 
The accompanying notes form an integral part of the consolidated financial statements.

61

Table of Contents
THOUGHTWORKS HOLDING, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY
(In thousands, except share data)
Redeemable, Convertible Preferred StockCommon StockTreasuryAdditional
Paid-In Capital
Accumulated Other Comprehensive LossRetained (Deficit)
Earnings
SharesAmountSharesAmountSharesAmountTotal
Balance as of December 31, 2018  276,826,982 $277 229,689 $(565)$562,326 $(12,961)$(1,245)