Genpact(G) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Financial Highlights Genpact delivered strong Q2 2025 results, exceeding guidance with accelerated growth in Advanced Technology Solutions and an upward revision of its full-year outlook Executive Summary Genpact achieved strong results in Q2 2025, exceeding guidance, driven by accelerated growth in Advanced Technology Solutions, and raised full-year outlook - Genpact achieved strong growth in Q2 2025, with revenue increasing by 7% year-over-year and Advanced Technology Solutions growing by 17%, exceeding guidance[2] - The company raised its full-year guidance, expecting revenue growth of 5% and adjusted diluted EPS growth faster than revenue[2] - The company's strategic focus is on integrating Advanced Technology Solutions and strengthening its "last-mile advantage" to become a preferred partner for AI-driven transformation[2] Key Financial Metrics Genpact reported Q2 2025 net revenue of $1.254 billion, with strong growth in Data-Tech-AI and Advanced Technology Solutions, alongside increased diluted EPS Q2 2025 Revenue Overview | Metric | Q2 2025 Amount | YoY Growth | Constant Currency YoY Growth | % of Total Net Revenue | | :----------------------------- | :----------------- | :--------- | :----------------------- | :--------------- | | Net Revenue | $1.254 billion | 6.6% | 6.2% | 100% | | Data-Tech-AI Net Revenue | $599 million | 9.7% | 9.5% | 48% | | Digital Operations Net Revenue | $655 million | 4.0% | 3.4% | 52% | | Advanced Technology Solutions Net Revenue | $293 million | 17.3% | N/A | 23% | | Core Business Services Net Revenue | $962 million | 3.8% | N/A | 77% | Q2 2025 Profitability and EPS | Metric | Q2 2025 Amount | YoY Growth | Margin | | :----------------------------- | :----------------- | :--------- | :------- | | Gross Profit | $450 million | 8.1% | 35.9% | | Net Income | $133 million | 8.8% | 10.6% | | Income from Operations | $179 million | 5.4% | 14.3% | | Adjusted Income from Operations | $217 million | 9.5% | 17.3% | | Diluted EPS | $0.75 | 11.9% | N/A | | Adjusted Diluted EPS | $0.88 | 11.4% | N/A | - Cash generated from operating activities in Q2 2025 was $177 million, lower than $209 million in Q2 2024[8] - Approximately 700,000 shares of common stock were repurchased during the quarter for a total consideration of approximately $30 million, at an average price of $43.40 per share[8] Outlook Genpact provided updated financial guidance for Q3 and the full year 2025, reflecting anticipated revenue growth and adjusted diluted EPS Third Quarter 2025 Guidance Genpact anticipates Q3 2025 net revenue between $1.258 billion and $1.270 billion, with Data-Tech-AI growth and adjusted diluted EPS of $0.89 to $0.90 Q3 2025 Financial Guidance | Metric | Q3 2025 Guidance | YoY Growth (Reported) | YoY Growth (Constant Currency) | | :----------------------------- | :--------------------- | :--------------------------- | :----------------------------- | | Net Revenue | $1.258B - $1.270B | 3.9% - 4.9% | 3.1% - 4.1% | | Data-Tech-AI Net Revenue | Approx. 6.7% at midpoint | N/A | Approx. 6.2% at midpoint | | Digital Operations Net Revenue | Approx. 2.3% at midpoint | N/A | Approx. 1.3% at midpoint | | Gross Margin | Approx. 36.0% | N/A | N/A | | Adjusted Operating Margin | Approx. 17.5% | N/A | N/A | | Adjusted Diluted EPS | $0.89 - $0.90 | N/A | N/A | Full Year 2025 Updated Guidance Genpact raised its full-year 2025 guidance, projecting net revenue of $4.958 billion to $5.053 billion and adjusted diluted EPS of $3.51 to $3.58 Full Year 2025 Updated Financial Guidance | Metric | Full Year 2025 Guidance | YoY Growth (Reported) | YoY Growth (Constant Currency) | Prior Guidance (Reported) | Change from Prior Guidance | | :----------------------------- | :--------------------- | :--------------------------- | :----------------------------- | :------------------------ | :------------------------- | | Net Revenue | $4.958B - $5.053B | 4.0% - 6.0% | 3.7% - 5.7% | 2.0% - 5.0% | Upgraded | | Data-Tech-AI Net Revenue | Approx. 7.4% | N/A | Approx. 7.2% | Approx. 5.1% (midpoint) | Upgraded | | Digital Operations Net Revenue | Approx. 2.9% | N/A | Approx. 2.5% | Approx. 1.9% (midpoint) | Upgraded | | Gross Margin | Approx. 36.0% | N/A | N/A | Approx. 36.0% | No Change | | Adjusted Operating Margin | Approx. 17.4% | N/A | N/A | Approx. 17.3% | Upgraded | | Adjusted Diluted EPS | $3.51 - $3.58 | N/A | N/A | $3.41 - $3.52 | Upgraded | Company Information This section provides essential details about Genpact, including its business overview, forward-looking statements, and investor contact information About Genpact Genpact is a global leader in advanced technology services and solutions, leveraging data, technology, and AI to deliver lasting value to clients - Genpact is a leading advanced technology services and solutions company, delivering lasting value to global enterprises through deep business knowledge, operational excellence, and cutting-edge solutions[9] - The company's team leverages data, technology, and artificial intelligence to help companies across industries stay ahead[9] Safe Harbor Statement This press release contains forward-looking statements subject to various risks and uncertainties, with no obligation for the company to update them - This press release contains forward-looking statements protected by the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995[10] - Risk factors include, but are not limited to, macroeconomic uncertainties, AI technology innovation, pricing ability, ability to attract and retain talent, data security, and geopolitical conflicts[10] - The company undertakes no obligation to update any forward-looking statements, and investors should not place undue reliance on these statements[10] Investor Relations Contact This section provides contact information for investor relations and media inquiries - Investor Contact: Tyra Whelton, Phone: +1 (908) 418-2995, Email: tyra.whelton@genpact.com[11] - Media Contact: Judith Schunke, Phone: +44 (0) 7887 661155, Email: judith.schunke@genpact.com[11] Consolidated Financial Statements This section presents Genpact's balance sheets, income statements, and cash flow statements, detailing the company's financial position and performance Consolidated Balance Sheets Genpact's total assets increased to $5.308 billion by June 30, 2025, driven by higher receivables, goodwill, and a significant rise in current portion of long-term debt Consolidated Balance Sheet Summary (USD in thousands) | Metric | December 31, 2024 | June 30, 2025 | Change | | :-------------------------- | :------------- | :------------- | :----- | | Total Assets | $4,987,153 | $5,307,680 | +$320,527 | | Total Liabilities | $2,597,542 | $2,721,069 | +$123,527 | | Total Equity | $2,389,611 | $2,586,611 | +$197,000 | | Accounts Receivable, Net | $1,198,606 | $1,266,653 | +$68,047 | | Goodwill | $1,669,769 | $1,793,903 | +$124,134 | | Current Portion of Long-Term Debt | $26,173 | $375,714 | +$349,541 | Consolidated Statements of Income Q2 2025 net revenue reached $1.254 billion, with net income increasing to $133 million and diluted EPS to $0.75, reflecting improved profitability Consolidated Statements of Income Summary (Q2 2025 vs. Q2 2024, USD in thousands) | Metric | Q2 2024 | Q2 2025 | YoY Change | | :-------------------------- | :------------- | :------------- | :--------- | | Net Revenues | $1,176,212 | $1,254,418 | +$78,206 | | Cost of Revenue | $759,834 | $804,350 | +$44,516 | | Gross Profit | $416,378 | $450,068 | +$33,690 | | Income from Operations | $170,251 | $179,402 | +$9,151 | | Net Income | $121,990 | $132,716 | +$10,726 | | Diluted EPS | $0.67 | $0.75 | +$0.08 | Consolidated Statements of Income Summary (Six Months Ended June 30, 2025 vs. 2024, USD in thousands) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | YoY Change | | :-------------------------- | :----------------- | :----------------- | :--------- | | Net Revenues | $2,307,449 | $2,469,344 | +$161,895 | | Cost of Revenue | $1,494,593 | $1,590,282 | +$95,689 | | Gross Profit | $812,856 | $879,062 | +$66,206 | | Income from Operations | $330,237 | $363,104 | +$32,867 | | Net Income | $238,937 | $263,569 | +$24,632 | | Diluted EPS | $1.32 | $1.48 | +$0.16 | Consolidated Statements of Cash Flows Net cash from operating activities increased to $217.8 million for the six months ended June 30, 2025, while investing and financing activities saw significant shifts Consolidated Statements of Cash Flows Summary (Six Months Ended June 30, 2025 vs. 2024, USD in thousands) | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Change | | :------------------------------------------ | :----------------- | :----------------- | :------- | | Net Cash Provided by Operating Activities | $183,713 | $217,801 | +$34,088 | | Net Cash Used in Investing Activities | $(44,420) | $(104,420) | $(59,999) | | Net Cash (Used in) Provided by Financing Activities | $202,314 | $(106,673) | $(308,987) | | Net Increase in Cash and Cash Equivalents | $341,607 | $6,708 | $(334,899) | | Payments for Business Acquisitions, Net of Cash Acquired | — | $(80,621) | $(80,621) | | Repayments of Long-Term Debt | $(19,875) | $(13,250) | +$6,625 | | Payments for Repurchase and Retirement of Stock | $(92,686) | $(92,999) | $(313) | Non-GAAP Financial Measures and Reconciliations This section explains and reconciles Genpact's non-GAAP financial metrics to GAAP equivalents, providing a clearer view of underlying business performance Explanation of Non-GAAP Measures Genpact utilizes non-GAAP metrics like adjusted operating income and constant currency revenue growth to provide a clearer view of ongoing performance - The company uses non-GAAP financial measures such as adjusted income from operations, adjusted operating margin, adjusted diluted EPS, and constant currency revenue growth to supplement GAAP financial statements[19][25] - Non-GAAP measures exclude all acquisition-related expenses, amortization of acquired intangible assets, impairment of acquired intangible assets, and share-based compensation expense[20] - Management also adjusts for foreign exchange gains and losses, interest income and expense, and income tax expense to more accurately reflect the company's ongoing operations[21] Reconciliation of Historical Non-GAAP Measures This section details reconciliations of GAAP net income, operating income, and diluted EPS to their adjusted non-GAAP equivalents for historical periods Net Income/Margin to Adjusted Income from Operations/Margin Reconciliation Adjusted operating income for Q2 2025 was $217.27 million (17.3% margin), up from $198.41 million (16.9% margin) in Q2 2024 Net Income/Margin to Adjusted Income from Operations/Margin Reconciliation (Q2 2025 vs. Q2 2024, USD in thousands) | Metric | Q2 2024 | Q2 2025 | | :-------------------------------- | :------------- | :------------- | | Net Income | $121,990 | $132,716 | | Foreign Exchange (Gain) Loss, Net | $(2,454) | $(376) | | Interest (Income) Expense, Net | $13,538 | $13,485 | | Income Tax Expense | $40,427 | $44,022 | | Share-Based Compensation Expense | $18,369 | $21,798 | | Amortization of Acquired Intangible Assets | $6,544 | $4,315 | | Acquisition-Related Expenses | — | $1,310 | | Adjusted Income from Operations | $198,414 | $217,270 | | Net Income Margin | 10.4% | 10.6% | | Adjusted Operating Margin | 16.9% | 17.3% | Income from Operations/Margin to Adjusted Income from Operations/Margin Reconciliation Q2 2025 operating income was $179.40 million (14.3% margin), adjusted to $217.27 million (17.3% margin) after non-GAAP adjustments Income from Operations/Margin to Adjusted Income from Operations/Margin Reconciliation (Q2 2025 vs. Q2 2024, USD in thousands) | Metric | Q2 2024 | Q2 2025 | | :-------------------------------- | :------------- | :------------- | | Income from Operations | $170,251 | $179,402 | | Share-Based Compensation Expense | $18,369 | $21,798 | | Amortization of Acquired Intangible Assets | $6,544 | $4,315 | | Other Income (Expense), Net | $3,250 | $10,445 | | Acquisition-Related Expenses | — | $1,310 | | Adjusted Income from Operations | $198,414 | $217,270 | | Operating Margin | 14.5% | 14.3% | | Adjusted Operating Margin | 16.9% | 17.3% | Diluted EPS to Adjusted Diluted EPS Reconciliation Q2 2025 diluted EPS of $0.75 was adjusted to $0.88, reflecting the impact of share-based compensation, acquisition-related amortization, and tax effects Diluted EPS to Adjusted Diluted EPS Reconciliation (Q2 2025 vs. Q2 2024, USD per share) | Metric | Q2 2024 | Q2 2025 | | :------------------------------------------ | :------------- | :------------- | | Diluted EPS | $0.67 | $0.75 | | Share-Based Compensation Expense | $0.10 | $0.12 | | Amortization of Acquired Intangible Assets | $0.04 | $0.02 | | Acquisition-Related Expenses | — | $0.01 | | Tax Impact of Share-Based Compensation Expense | $(0.02) | $(0.02) | | Tax Impact of Amortization of Acquired Intangible Assets | $(0.01) | $(0.01) | | Adjusted Diluted EPS | $0.79 | $0.88 | Reconciliation of Forward-Looking Non-GAAP Measures This section provides reconciliations for Genpact's full-year and Q3 2025 forward-looking non-GAAP guidance, including adjusted operating margin and EPS Full Year 2025 Outlook Reconciliations Full-year 2025 adjusted operating margin is projected at 17.4%, with adjusted diluted EPS between $3.51 and $3.58, after estimated non-GAAP adjustments Full Year 2025 Adjusted Operating Margin Outlook (Percentage) | Metric | As of December 31, 2025 | | :------------------------------------------ | :------------------- | | Net Income Margin | 10.6% | | Estimated Interest (Income) Expense, Net | 1.0% | | Estimated Income Tax Expense | 3.5% | | Estimated Share-Based Compensation Expense | 1.8% | | Estimated Amortization of Acquired Intangible Assets | 0.5% | | Adjusted Operating Margin | 17.4% | Full Year 2025 Adjusted Diluted EPS Outlook (USD per share) | Metric | Low End | High End | | :------------------------------------------ | :--- | :--- | | Diluted EPS | $2.98 | $3.05 | | Estimated Share-Based Compensation Expense | $0.52 | $0.52 | | Estimated Amortization of Acquired Intangible Assets | $0.14 | $0.14 | | Estimated Acquisition-Related Expenses | $0.01 | $0.01 | | Estimated Tax Impact of Share-Based Compensation Expense | $(0.09) | $(0.09) | | Estimated Tax Impact of Amortization of Acquired Intangible Assets | $(0.04) | $(0.04) | | Adjusted Diluted EPS | $3.51 | $3.58 | Third Quarter 2025 Outlook Reconciliations Q3 2025 adjusted operating margin is forecast at 17.5%, with adjusted diluted EPS between $0.89 and $0.90, incorporating non-GAAP adjustments Third Quarter 2025 Adjusted Operating Margin Outlook (Percentage) | Metric | As of September 30, 2025 | | :------------------------------------------ | :------------------- | | Net Income Margin | 10.4% | | Estimated Interest (Income) Expense, Net | 1.0% | | Estimated Income Tax Expense | 3.4% | | Estimated Share-Based Compensation Expense | 2.0% | | Estimated Amortization of Acquired Intangible Assets | 0.6% | | Adjusted Operating Margin | 17.5% | Third Quarter 2025 Adjusted Diluted EPS Outlook (USD per share) | Metric | Low End | High End | | :------------------------------------------ | :--- | :--- | | Diluted EPS | $0.74 | $0.75 | | Estimated Share-Based Compensation Expense | $0.14 | $0.14 | | Estimated Amortization of Acquired Intangible Assets | $0.05 | $0.05 | | Estimated Tax Impact of Share-Based Compensation Expense | $(0.03) | $(0.03) | | Estimated Tax Impact of Amortization of Acquired Intangible Assets | $(0.01) | $(0.01) | | Adjusted Diluted EPS | $0.89 | $0.90 | Segment Net Revenues This section details Genpact's net revenues by segment, highlighting the performance of Advanced Technology Solutions and Core Business Services Advanced Technology Solutions and Core Business Services Net Revenues Advanced Technology Solutions net revenue continued its growth trend, reaching $292.655 million in Q2 2025, alongside growth in Core Business Services Advanced Technology Solutions and Core Business Services Net Revenues by Quarter (USD in thousands) | Segment | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | | :-------------------------- | :------------- | :------------- | :------------- | :------------- | :------------- | :------------- | :------------- | :------------- | :------------- | :------------- | | Advanced Technology Solutions | $236,102 | $257,161 | $248,124 | $243,326 | $239,849 | $249,461 | $259,184 | $280,639 | $277,627 | $292,655 | | Core Business Services | $853,217 | $848,363 | $887,668 | $902,927 | $891,388 | $926,750 | $951,766 | $968,102 | $937,299 | $961,763 | | Total | $1,089,319 | $1,105,524 | $1,135,792 | $1,146,253 | $1,131,237 | $1,176,212 | $1,210,949 | $1,248,741 | $1,214,926 | $1,254,418 |