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01/10 15:55
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture. Strong financial performance with revenue and EPS growth, coupled with increased dividends and share repurchases, is positive. However, supply chain challenges and regulatory issues leading to delayed deals and conservative guidance create uncertainty. The Q&A section reveals no pricing pressure on delayed deals, but management's unclear responses on specific impacts add to the uncertainty. Overall, the positive aspects are balanced by the risks and uncertainties, resulting in a neutral outlook for the stock price over the next two weeks.
Total Revenues $1.215 billion, up 8.3% year-over-year in constant currency, driven by strong execution and innovation.
Adjusted EPS $0.84, up 16% year-over-year, exceeding expectations due to better than expected revenue performance.
Gross Margin 35.3%, up 30 basis points year-over-year, driven by operating leverage and continued cost discipline.
Adjusted Operating Income $210 million, up from $182 million, with adjusted operating income margin expanding 120 basis points to 17.3%.
Operating Cash Flow $40 million, improved from a $26 million outflow in the prior year, reflecting better cash management.
Cash and Cash Equivalents $562 million, up from $478 million a year ago, indicating a solid balance sheet.
Days Sales Outstanding (DSOs) 88 days, down 3 days from the prior year, reflecting improved billing efficiency.
Digital Operations Revenue $633 million, up 4% year-over-year, in line with expectations.
Data-Tech-AI Revenue $582 million, up 11% year-over-year, driven by demand for tech services and data modernization.
SG&A Expenses 19.8% of revenue, down from 20.8% in the prior year, reflecting revenue growth and operating leverage.
Gen AI Solutions: More than 215 Gen AI solutions in production environment with clients, either deployed or going live, up approximately 50% quarter-over-quarter.
Agentic Solutions: Launched first Agentic Solutions for accounts payable in February, delivering strong productivity gains for clients.
AI Gigafactory: Live across manufacturing, retail, and financial services with more than 30 existing clients onboarded since launch.
Partnership Revenue: Partner-related revenue up 80% year-over-year, reaching 10% of total revenues in Q1.
Large Deal Pipeline: Record levels of large deal pipeline, up more than 80% year-over-year.
Time to Bill: Meaningfully reduced time to bill, reflecting tighter coordination between sales and delivery teams.
Headcount Reduction: AI led efficiencies allowed reduction in headcount in IT and HR, protecting margins.
3+1 Execution Framework: Strengthened foundation with focus on partnerships, Data-Tech-AI, simplification, and establishing Genpact as a credential for AI-led transformation.
Conservative Guidance Approach: Widening guidance range due to increased uncertainty in certain industries and delayed large deals.
Supply Chain Challenges: A few large deals with higher concentration in Digital Operations were pushed out in March and April due to supply chain and tariff-related uncertainty.
Regulatory Issues: The operating environment has changed significantly due to shifting global trade dynamics, which has led to delayed decision-making in select end markets.
Economic Factors: The company is taking a conservative approach to guidance due to increased uncertainty in certain industries driven by changes in global trade.
Competitive Pressures: Despite a strong pipeline, the company is experiencing caution in buying behavior, particularly in end markets sensitive to global trade.
Revenue Growth Risks: The company is lowering expectations for Digital Operations and Data-Tech-AI due to delayed decision-making impacting revenue timing for future quarters.
Total Revenues Q1 2025: $1.215 billion, up 8.3% year-over-year in constant currency, exceeding guidance.
Adjusted EPS Q1 2025: $0.84, a 16% increase year-over-year, exceeding expectations.
3+1 Execution Framework: Focus on partnerships, Data-Tech-AI, simplification, and establishing Genpact as a leader in AI-led transformation.
Partnership Revenue Growth: 80% year-over-year increase, contributing 10% of total revenues.
Data-Tech-AI Revenue Growth: 12% year-over-year increase, with 215 Gen AI solutions in production.
Client Zero Progress: AI efficiencies led to reduced headcount in IT and HR, enhancing margins.
Full Year Revenue Guidance: Expected in the range of $4.862 billion to $5.005 billion, growth of 2% to 5%.
Adjusted Diluted EPS Guidance: Expected between $3.41 and $3.52, representing 5.7% growth year-over-year.
Digital Operations Revenue Growth: Expected to be approximately 2%.
Data-Tech-AI Revenue Growth: Expected to be approximately 5.1%.
Operating Cash Flow Guidance: Expected to be approximately $610 million.
Q2 2025 Revenue Guidance: Expected between $1.210 billion and $1.233 billion, growth of 2.8% to 4.8%.
Dividends Paid: $30 million in dividends were returned to shareholders in Q1 2025.
Share Repurchase: $63 million in share repurchases were executed in Q1 2025.
The earnings call reflects strong financial performance, with expanded margins, 14% EPS growth, and significant cash returns to shareholders. The company raised its revenue and EPS guidance, indicating confidence in future growth. Advanced Technology Solutions show robust growth, and the Q&A session reveals optimism about deal momentum and competitive positioning. Despite some unclear responses, the overall sentiment is positive, suggesting a likely stock price increase in the short term.
The earnings call shows strong financial performance with revenue and EPS growth, a healthy pipeline in AI and technology solutions, and positive sentiment towards AI's impact. Despite a cautious Q3 outlook, the company has already achieved 70% of its annual target. The Q&A section reveals confidence in achieving growth targets and strong client engagement in AI solutions. The market is likely to react positively to the 8.3% revenue growth and 16% EPS increase, as well as the optimistic guidance for future quarters.
The earnings call presents a mixed picture. Strong financial performance with revenue and EPS growth, coupled with increased dividends and share repurchases, is positive. However, supply chain challenges and regulatory issues leading to delayed deals and conservative guidance create uncertainty. The Q&A section reveals no pricing pressure on delayed deals, but management's unclear responses on specific impacts add to the uncertainty. Overall, the positive aspects are balanced by the risks and uncertainties, resulting in a neutral outlook for the stock price over the next two weeks.
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