Genpact Investor Day 2025 Summary Company Overview - **Company**: Genpact - **Event**: 2025 Investor Day - **Date**: June 26, 2025 Key Industry Insights - **Industry**: Business Process Outsourcing (BPO) and AI-led solutions - **Market Size**: Total addressable market exceeds $1 trillion and is growing [13] - **Client Base**: Partners with over 125 Fortune 500 companies, many of which have been clients for over a decade [7] Core Themes and Strategic Initiatives 1. **Transformation to AI-First Company**: - Genpact is pivoting to become an AI-first, data-led innovation company [5] - Emphasis on integrating advanced technologies, especially AI, into core business processes [19] 2. **Growth Model**: - The growth model is built on three pillars: capabilities, clients, and catalysts [43] - Focus on partnerships, data technology, AI simplification, and leading with Genpact as a model for AI-led transformation [15] 3. **Advanced Technology Solutions**: - Introduction of four differentiated capabilities: data and AI, digital technologies, advisory, and agentic solutions [23] - Advanced technology solutions account for approximately 20% of total revenues and are growing rapidly [25] 4. **Client-Centric Approach**: - Strong focus on delivering measurable business outcomes and maintaining high client retention rates (over 106%) [62] - Expansion opportunities arise from delivering predictable outcomes in one area, leading to requests for additional services [52] 5. **Investment in Talent and Partnerships**: - Significant investments in AI talent and partnerships with major firms like AWS, Salesforce, and Microsoft [63][67] - Development of a partnership ecosystem to enhance service offerings and accelerate growth [63] Financial Performance and Goals - **Revenue Growth**: Committed to achieving 10% top-line growth, with a focus on rebuilding momentum after falling short in revenue targets [14] - **Revenue Disaggregation**: Detailed revenue breakdown across Data Tech AI, digital operations, advanced technology solutions, and core business services [25] Client Success Stories 1. **Unilever**: - Collaboration to enhance supply chain efficiency and redefine supplier operations using AI and technology [28] - Focus on improving customer and supplier experiences through co-created global process models [29] 2. **Cisco**: - Partnership aimed at transforming core finance and accounting operations, resulting in significant efficiency gains [54] - Deployment of advanced digital systems to modernize processes and automate transactions [55] 3. **Advantage Solutions**: - Partnership to develop an innovative digital solution for order management, expected to significantly reduce response times and improve efficiency [58][60] Challenges and Solutions - **Common Challenges**: Fragmented data, lack of integration between business and technology teams, and a shortage of scalable AI-ready talent [15][16] - **Proposed Solutions**: Genpact is addressing these challenges through new solutions that integrate capabilities, orchestration, and domain understanding [16] Future Outlook - **Genpact Next**: A new strategy focused on innovation and growth, aiming to establish Genpact as a global leader in advanced technology solutions [20] - **AI Gigafactory**: A delivery model designed to help enterprises rapidly deploy AI, resulting in faster implementation times and reduced costs [90] Conclusion - Genpact is at a pivotal moment, focusing on transforming its business model to leverage AI and advanced technologies, aiming to drive significant growth and deliver enhanced value to clients [39]

Core Insights - Genpact is hosting an Investor Day to discuss its growth model and strategic pivot towards AI and advanced technologies [1][2] - The company aims to integrate advanced technologies into its operations to drive business growth for both clients and itself [2] Company Strategy - Genpact's strategy focuses on becoming an AI-first, data-led innovation company [2] - The leadership emphasizes the importance of combining advanced technologies with operational data to enhance service delivery [2] Financial Outlook - The event will include updates on medium-term financial targets and performance for the second quarter and full year 2025 [1] Client Engagement - Presentations will feature testimonials from clients on how Genpact delivers AI-driven value [2]

Core Insights - Genpact has launched the Genpact AP Suite, an advanced solution aimed at transforming accounts payable processes through autonomous, goal-oriented tools powered by Microsoft Azure's AI stack [1][5]. Product Overview - The Genpact AP Suite consists of four modules: AP Capture, AP Advance, AP Trace, and AP Assist, each equipped with AI agents to manage accounts payable nuances [3]. - The suite utilizes pre-trained, self-learning AI agents to optimize the AP process, enhancing touchless processing, resolving exceptions, and adapting to changes in supplier terms and tax rules [4]. Measurable Outcomes - The Genpact AP Suite has demonstrated measurable results, including improved efficiency, reduced errors, and the transformation of finance from a cost center to a strategic differentiator [4]. - Clients have reported significant benefits such as up to 90% early discount capture, enhanced cash visibility, and improved supplier relationships through high-speed processing [6]. Strategic Importance - The launch of the Genpact AP Suite is seen as a significant milestone in the automation of complex workflows, showcasing the potential of agentic AI in finance transformation [5]. - The initiative reflects a broader movement towards agent-based service delivery, emphasizing domain-specific intelligence and end-to-end process redesign [5].

Core Insights - Genpact has launched Genpact RapidReplace, an AI-powered solution aimed at transforming personal property contents claims processing, significantly enhancing customer experience by reducing settlement time from weeks to days [1][3]. Group 1: Product Features and Benefits - Genpact RapidReplace streamlines the fulfillment process through straight-through processing (STP) and rapid goods replacement via Amazon Business, improving the overall claims management experience for customers [1][2]. - The solution reduces fulfillment time from up to 12 days to three days or less, utilizing data extraction and generative AI to quickly compile lists of damaged or lost items and match them with like-kind-and-quality (LKQ) replacements [3][4]. - Integration with Amazon Business enhances efficiency by leveraging its powerful search tools and global logistics network for fast delivery to policyholders [3][4]. Group 2: Industry Impact and Collaboration - The collaboration between Genpact and Amazon Business is positioned as a transformative force in the insurance industry, automating the property loss replacement process and driving innovation [4][8]. - Genpact RapidReplace is part of the broader Genpact Claims Manager platform, which orchestrates claim setup, segmentation, and fulfillment, showcasing the company's commitment to enhancing claims servicing [4][6]. - A previous collaboration with Amazon Web Services (AWS) has already improved property contents inventory creation and LKQ pricing, reducing adjusters' investigation time by up to 75% [4].

Core Insights - The insurance industry has seen significant AI adoption, with 69% of companies deploying AI, yet only 36% of US customers report improved digital experiences, indicating a gap between internal efforts and customer outcomes [1][3] - The report emphasizes the need for insurers to align AI strategies with customer expectations and operational goals to drive innovation and build trust [2][7] Adoption and Impact - While 69% of insurance companies are using AI, only 36% of US consumers feel their digital experiences have improved in the last two years, highlighting an opportunity for better alignment [3] - Trust in AI-driven insurance quotes is low, with 59% of consumers preferring live agents, especially during crises [3] Potential and Challenges - 62% of respondents believe competitive advantage will stem from efficiency in high-volume tasks, while only 30% expect it from high-complexity tasks, and just 8% from growth or monetization, indicating underutilization of AI capabilities [4] - Governance and oversight are significant challenges for scaling AI, with 49% of respondents identifying these as hurdles, alongside data privacy concerns at 62% and regulatory differences at 42% [5] Workforce and Skills - Despite investments in training, only 2% of insurance executives report that nearly all team members are AI fluent, with 69% indicating that very few or some team members possess AI fluency, limiting the industry's ability to scale AI effectively [6] Strategic Recommendations - The report proposes a six-point strategic blueprint for insurers to scale AI: strengthening data foundations, building partnerships, empowering people, designing for scale, balancing governance and risk, and prioritizing business outcomes [8] Methodology - The study surveyed 200 senior insurance executives globally and 1,000 US insurance customers, providing insights into AI's impact, challenges, and opportunities in the insurance sector [11]

Core Viewpoint - Genpact's stock has underperformed the S&P 500 with a 0.1% increase since the last earnings report, raising questions about its future performance leading up to the next earnings release [1]. Group 1: Earnings and Estimates - Estimates for Genpact have trended downward over the past month, indicating a negative outlook [2][4]. - The stock has a Zacks Rank of 4 (Sell), suggesting expectations of below-average returns in the coming months [4]. Group 2: VGM Scores - Genpact has a subpar Growth Score of D, a Momentum Score of C, and a Value Score of B, placing it in the top 40% for the value investment strategy [3]. Group 3: Industry Comparison - Genpact is part of the Zacks Computers - IT Services industry, where ServiceNow has seen a 4.4% increase over the past month [5]. - ServiceNow reported revenues of $3.09 billion for the last quarter, reflecting an 18.6% year-over-year increase, with EPS rising from $3.41 to $4.04 [5]. - For the current quarter, ServiceNow is expected to post earnings of $3.53 per share, indicating a 12.8% increase from the previous year, with a Zacks Rank of 3 (Hold) [6].

Core Insights - Genpact has acquired XponentL Data to enhance its capabilities in AI and data solutions, emphasizing a commitment to an AI-first future [2][3] - The acquisition aims to leverage XponentL's intellectual property to help clients maximize the value of their data, particularly in Life Sciences and Healthcare [2][3] - The deal is expected to strengthen Genpact's Service-as-Agentic-Solutions and the Genpact AI Gigafactory, positioning the company for growth in the agentic AI era [2][3] Company Overview - XponentL Data specializes in innovative Data & AI-driven solutions, focusing on empowering organizations to unlock strategic opportunities [5] - Genpact is a technology services and solutions company that aims to deliver lasting value for enterprises globally through operational excellence and cutting-edge solutions [6] Acquisition Details - The acquisition of XponentL Data was finalized on June 5, 2025, although financial details of the transaction were not disclosed [4]

Group 1 - Genpact Limited (NYSE: G) presents a strong Buy case due to its significant growth potential driven by its focus on data, technology, and AI [1] - The company is positioned as a major growth story both currently and in the long term, emphasizing its Data-Tech-AI strategy [1] - The analyst has a background in financial modeling, valuation, and data analysis, which supports the evaluation of Genpact's fundamentals and growth potential [1] Group 2 - The analyst expresses a commitment to providing value to readers and investors interested in long-term investing, particularly in technology, infrastructure, and internet services sectors [1]

Financial Performance - Net revenues increased from $1,131,237 in Q1 2024 to $1,214,926 in Q1 2025, representing a growth of approximately 7.4%[12] - Gross profit rose from $396,478 in Q1 2024 to $428,994 in Q1 2025, an increase of about 8.2%[12] - Net income for Q1 2025 was $130,853, up from $116,947 in Q1 2024, reflecting a growth of approximately 11.9%[12] - Earnings per diluted share increased from $0.64 in Q1 2024 to $0.73 in Q1 2025, a rise of about 14.1%[12] - Comprehensive income for Q1 2025 was $159,990, compared to $112,303 in Q1 2024, indicating a growth of about 42.3%[15] - Net income for the three months ended March 31, 2025, was $130,853, an increase of 11.5% from $116,947 in the same period of 2024[23] - Basic earnings per common share increased to $0.75 for the three months ended March 31, 2025, up from $0.65 in the same period of 2024[193] Assets and Liabilities - Total assets decreased from $4,987,153 as of December 31, 2024, to $4,894,958 as of March 31, 2025, a decline of approximately 1.8%[9] - Total liabilities decreased from $2,597,542 as of December 31, 2024, to $2,441,897 as of March 31, 2025, a reduction of about 6.0%[9] - Shareholders' equity increased from $2,389,611 as of December 31, 2024, to $2,453,061 as of March 31, 2025, an increase of approximately 2.7%[9] - As of March 31, 2025, the total long-term debt of the company is $1,215,262, a slight decrease from $1,221,440 as of December 31, 2024[137] - The outstanding amount under the Company's term loan was $469,546 as of March 31, 2025, down from $476,089 as of December 31, 2024[128] Cash Flow and Investments - Net cash provided by operating activities increased significantly to $40,436 in 2025, compared to a cash outflow of $(25,561) in 2024[23] - The company reported a net cash used for investing activities of $779 in 2025, a substantial improvement from $(24,672) in 2024[23] - Net cash used for financing activities increased to $(125,544) in 2025, compared to $(48,200) in 2024, indicating higher financing outflows[23] - Cash and cash equivalents at the end of the period rose to $561,615 in 2025, up from $478,398 in 2024[23] Credit and Allowance for Losses - The allowance for credit losses decreased to $7,294 in 2025 from $10,897 in 2024, reflecting improved credit quality[23] - For the three months ended March 31, 2025, the allowance for credit losses increased to $19,747, with net accounts receivable dropping to $1,192,094[79] - The company recorded additions to the allowance for credit losses of $7,582 for the year ended December 31, 2024, and $8,742 for the three months ended March 31, 2025[79] Stock-Based Compensation and Dividends - Stock-based compensation expense increased significantly to $20,036 in 2025, compared to $9,181 in 2024[23] - The company paid $29,784 in dividends in 2025, up from $27,492 in 2024, indicating a commitment to returning value to shareholders[23] - The Company granted 816,936 restricted share units (RSUs) during the three months ended March 31, 2025, with a weighted average grant date fair value of $49.61[165] - The total remaining unrecognized stock-based compensation cost related to RSUs as of March 31, 2025, was $63,728, to be recognized over a weighted average remaining requisite vesting period of 2.1 years[167] Segment Performance - For the three months ended March 31, 2024, the total net revenues were $1,131,237,000, with a year-over-year increase in Financial Services, Consumer and Healthcare, and High Tech and Manufacturing segments[201] - The adjusted income from operations (AOI) for the Financial Services segment was $47,003,000, while Consumer and Healthcare and High Tech and Manufacturing segments reported AOIs of $66,796,000 and $69,046,000 respectively[201] - For the three months ended March 31, 2025, total net revenues increased to $1,214,926,000, reflecting growth across all segments compared to the previous year[204] - The AOI for the Financial Services segment rose to $58,192,000, with Consumer and Healthcare and High Tech and Manufacturing segments reporting AOIs of $70,324,000 and $80,115,000 respectively[204] Compliance and Regulatory Changes - The Company maintained compliance with financial covenants, including a net debt to EBITDA leverage ratio of less than 3x and an interest coverage ratio of more than 3x as of March 31, 2025[127] - The Company adopted ASU No. 2023-07 for segment reporting, enhancing the transparency of segment-related financial information[199] - The company is assessing the impact of ASU No. 2023-09 on its disclosures, which enhances income tax disclosures and is effective for fiscal years beginning after December 15, 2024[75] Operational Presence - The company has over 145,000 employees serving clients in key industry verticals from more than 35 countries, indicating a strong operational presence[26]

Core Insights - Genpact has been recognized as a Leader in the 2025 ISG Provider Lens for ServiceNow Ecosystem Partners in the United States, highlighting its innovative approach to deploying ServiceNow solutions for business transformation and efficiency [1][2] - The ISG report emphasizes Genpact's expertise in AI-powered solutions, particularly in the areas of Innovation and Consulting and Implementation Services, showcasing its ability to drive impact across various industries [2][4] Group 1 - Genpact's consultative approach focuses on non-IT functions such as source-to-pay and healthcare operations, demonstrating its leadership in digital transformation [4] - The company's AI solutions have proven effective, cutting procurement cycles by 50% within eight weeks by automating data extraction and reducing manual tracking [7] - Genpact's generative AI solutions address complex multi-workflow needs across diverse industries, including procurement, lending, and insurance claims [7] Group 2 - The ISG Provider Lens research study evaluates software vendors and service providers in the U.S. market, positioning them based on a multi-phased research and analysis process [5] - Genpact aims to deliver lasting value for enterprises globally through its deep business knowledge and operational excellence, leveraging data, technology, and AI [6]