Genpact(US:G)2025-11-06 23:00Financial Data and Key Metrics Changes - Revenue for Q3 2025 increased by 7% year-over-year, reaching $1.291 billion, exceeding guidance by $21 million [4][16] - Gross margin improved to 36.4%, and adjusted operating income margin rose to 17.7%, reflecting healthy margin expansion [4][19] - Adjusted diluted EPS grew 14% year-over-year to $0.97, surpassing the high end of guidance by $0.07 [4][19] Business Line Data and Key Metrics Changes - Advanced technology solutions revenue surged 20% year-over-year to $311 million, now accounting for 24% of total revenue [17] - Core business services revenue grew 3% year-over-year to $980 million, driven by digital operations and technology services [17] - Data tech and AI revenue increased by 9.3% year-over-year to $622 million, while digital operations revenue rose by 4.3% to $669 million [17] Market Data and Key Metrics Changes - Revenue growth was strongest in high-tech and manufacturing at 14%, followed by financial services at 3%, and consumer and healthcare at 1% [18] - Non-FTE revenue accounted for 47% of total revenue, benefiting from advanced technology solutions [18] Company Strategy and Development Direction - The company is focused on establishing itself as a global leader in advanced technology solutions through its Genpact Next framework [5][24] - Investments in partnerships and AI talent are accelerating growth, with partner-related revenue increasing by 56% year-over-year [13] - The company aims to sharpen its go-to-market focus in decision support services to enhance execution and market share [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand signals across various client segments and the overall environment [26][28] - The company raised its full-year revenue guidance to a range of 6.1%-6.4% and adjusted diluted EPS to between $3.60 and $3.61, reflecting double-digit growth [15][23] - Management highlighted the importance of building trust with clients as they transition to agentic operations, emphasizing the need for process intelligence alongside AI [40] Other Important Information - The company returned $119 million to shareholders through share repurchases and dividends, representing 59% of free cash flow year-to-date [20] - The company is committed to returning at least 50% of cash flow to investors while maintaining flexibility for strategic investments [23] Q&A Session Summary Question: Can you comment on the bookings performance in Q3? - Management noted strong demand signals across new and existing clients, with five large deals closed in the quarter [26][27] Question: What are the primary reasons clients are not ready to launch agentic operations? - Clients often face issues with data readiness and process standardization, which are critical for implementing advanced technology solutions [31][32] Question: How is the competitive landscape evolving? - The company differentiates itself through last-mile expertise and a strong culture of client centricity and innovation [34][35] Question: Why is a significant portion of agentic work coming from new clients? - New clients are increasingly adopting agentic solutions, while existing clients are also absorbing these solutions, indicating a growing total addressable market [36][37] Question: How are contracts structured for agentic AI solutions? - The company is shifting towards non-FTE models and subscription-based structures for its software solutions [41][42]