Genpact(US:G)2026-02-05 23:02Financial Data and Key Metrics Changes - Genpact reported revenues of $5.08 billion for 2025, reflecting a 6.6% year-over-year increase [4][25] - Adjusted diluted EPS increased by 11% to $3.65, marking the fifth consecutive year of growth faster than revenue [26] - Gross margin expanded by 60 basis points to 36%, while adjusted operating income margin improved by 40 basis points to 17.5% [26][24] Business Line Data and Key Metrics Changes - Advanced Technology Solutions revenue grew by 17% to $1.2 billion, now representing 24% of total revenue [4][25] - Core Business Services revenue increased by 3.7% to $3.876 billion [26] - Data-Tech-AI revenue rose by 9.3% to $2.442 billion, while Digital Operations revenue grew by 4.1% to $2.638 billion [25] Market Data and Key Metrics Changes - High Tech and Manufacturing sector grew by 9.9%, Financial Services by 5%, and Consumer and Healthcare by 1.5% [22] - Non-FTE revenue, reflecting a strategic shift, accounted for 48% of fourth-quarter revenue [22] Company Strategy and Development Direction - Genpact is focusing on scaling data, AI, and domain-driven agentic solutions to transform client operations [4][6] - The company is pioneering a new operating model called Agentic Operations, which integrates AI with human expertise [9][10] - The strategy includes expanding partnerships and investing in AI talent, with over 7,000 AI builders and nearly 20,000 AI practitioners [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong demand and a robust pipeline entering 2026, expecting at least 7% revenue growth [28][29] - The company anticipates continued margin expansion and double-digit adjusted EPS growth [29][31] - Management highlighted the importance of integrating AI into business processes to drive measurable financial outcomes for clients [9][10] Other Important Information - Genpact returned $401 million to shareholders through share repurchases and dividends in 2025 [27] - The company has a significant backlog and is well-positioned to capitalize on the growing demand for Advanced Technology Solutions [28] Q&A Session Summary Question: Changes in contracting conversations due to market pressures - Management noted that the excitement in Silicon Valley is accelerating their pivot and driving outcomes for clients faster, viewing it as a tailwind [35] Question: Factors driving confidence in ATS growth - Management indicated increased conversations and invitations to participate in larger deals, with over a third of bookings coming from Advanced Technology Solutions [40][41] Question: Adoption patterns of new clients for AP Suite - Management highlighted that many new clients are mid-market and existing clients expanding their use of finance technology, significantly enhancing the total addressable market [48] Question: Improvements in sales cycle or ramp times - Management acknowledged that large deals have varying timelines but expressed confidence in the record levels of pipeline across cohorts [49] Question: Drivers of margin expansion - Management attributed margin expansion to the shift towards Advanced Technology Solutions and disciplined operational efficiencies [57][58] Question: Client expectations regarding efficiencies - Management confirmed that while client aspirations are high, they are successfully offsetting costs and creating higher value solutions [70] Question: Decision-makers for agentic solutions within client organizations - Management stated that both business managers and CIOs are integral in driving the adoption of agentic AI solutions [79]