Genpact(US:G)2024-08-09 16:46Financial Performance - Net revenues for Q2 2024 reached $1,176,212, a 6.4% increase from $1,105,524 in Q2 2023[13] - Gross profit for the first half of 2024 was $812,856, up 6.9% from $760,281 in the same period last year[13] - Net income for the six months ended June 30, 2024, was $238,937, reflecting a 7.5% increase compared to $222,353 in 2023[13] - The company reported a diluted earnings per share of $0.67 for Q2 2024, compared to $0.63 in Q2 2023, indicating a 6.3% increase[13] - Operating expenses for the first half of 2024 were $474,673, up from $445,911 in the same period last year, reflecting a 6.5% increase[13] - Cash provided by operating activities increased to $183,713,000 in 2024 from $137,382,000 in 2023, reflecting a growth of 33.8%[31] Assets and Liabilities - Total assets increased to $5,178,265 as of June 30, 2024, up from $4,805,713 at the end of 2023, representing a growth of 7.7%[10] - Total liabilities rose to $2,840,506 as of June 30, 2024, compared to $2,557,321 at the end of 2023, marking an increase of 11.1%[10] - The company’s retained earnings increased to $1,176,459 as of June 30, 2024, from $1,085,209 at the end of 2023, a rise of 8.4%[10] - Total equity as of June 30, 2024, was $2,337,759,000, up from $2,248,392,000 as of January 1, 2024, indicating a growth of 4.0%[28] Cash and Cash Equivalents - Cash and cash equivalents increased significantly to $914,171 as of June 30, 2024, from $583,670 at the end of 2023, a growth of 56.7%[10] - Cash and cash equivalents at the end of the period increased to $914,171,000 from $491,308,000, representing an increase of 86.1%[31] Dividends - The company declared a dividend of $0.1525 per common share for Q2 2024, compared to $0.1375 in Q2 2023, representing an increase of 10.9%[24] - The company paid dividends of $54,829,000, which is an increase from $50,286,000 in the previous period, marking an increase of 9.9%[31] Stock and Share Repurchase - The company repurchased and retired 2,784,988 shares, resulting in a reduction of retained earnings by $92,602,000[28] - During the six months ended June 30, 2024, the company repurchased 2,784,988 common shares at a weighted average price of $33.26 per share, for an aggregate cash amount of $92,630[207] - The company has authorized repurchases of up to $2,250,000 under its existing share repurchase program[206] Employee Compensation and Benefits - The net defined benefit plan costs for the six months ended June 30, 2024, were $10,055, compared to $8,794 for the same period in 2023, reflecting an increase of approximately 14.3%[165] - Total contributions to defined contribution plans increased from $67,046 for the six months ended June 30, 2023, to $71,490 for the same period in 2024, a rise of about 6.6%[166] - Stock-based compensation expense decreased to $27,550,000 in 2024 from $41,536,000 in 2023, a reduction of 33.7%[31] - Stock-based compensation costs for the three months ended June 30, 2024, were $18,046, down from $21,344 for the same period in 2023, a decrease of approximately 15.5%[179] Revenue Recognition - The Company recognizes revenue primarily from business process management services, including analytics and consulting, on a time-and-material, transaction, or fixed-price basis[52] - Revenue from fixed-price contracts is recognized ratably over the term of the agreement, while revenues from time-and-materials and transaction-based contracts are recognized as services are provided[52] - Deferred revenue is recorded for process transition activities and recognized ratably over the period in which related services are performed[54] - The Company uses the input method to measure progress towards completion for performance obligations satisfied over time[58] Debt and Financing - As of June 30, 2024, the outstanding amount under the term loan was $489,167, with a maturity profile indicating a significant payment of $423,724 due in 2027[152] - The company had a total of $23,302 and $23,001 available in credit facilities as of December 31, 2023, and June 30, 2024, respectively, with $9,336 and $9,108 utilized[146] - The company was in compliance with the financial covenants of the 2022 Credit Agreement, maintaining a net debt to EBITDA leverage ratio of less than 3x and an interest coverage ratio of more than 3x as of June 30, 2024[150] - As of June 30, 2024, the total long-term debt increased to $1,633,528, up from $1,256,962 as of December 31, 2023, representing a growth of approximately 30%[158] Impairment and Allowance for Credit Losses - The allowance for credit losses increased to $12,638,000 in 2024 from $6,521,000 in 2023, reflecting a rise of 93.5%[31] - The company recorded a charge of $1,338 for credit losses on deferred billings for the three months ended June 30, 2024, compared to $147 for the same period in 2023[97] - The allowance for credit losses on accounts receivable decreased from $18,278 as of December 31, 2023, to $16,833 as of June 30, 2024[95] Business Strategy and Operations - The company divested a business in December 2022 as part of a strategy to focus on services with greater growth opportunities[130] - The Company adopted ASU No. 2023-01 regarding leasehold improvements effective January 1, 2024, with no material impact on consolidated results[90] - The Company is assessing the impact of ASU No. 2023-07 on segment reporting disclosures, effective for fiscal years beginning after December 15, 2023[93]