Genpact Ltd (G) Q2 2024 Earnings Call Highlights: Strong Revenue Growth and Strategic Advancements

GuruFocus News
4 min read

In This Article:

  • Revenue: $1.18 billion in Q2, up 6% year-over-year.

  • Gross Margin: 35.4%, exceeding expectations.

  • Adjusted Operating Income Margin: 16.9%, above expectations.

  • Net Income: $122 million, a 5% improvement year-over-year.

  • GAAP Diluted EPS: $0.67, a 6% increase year-over-year.

  • Adjusted Diluted EPS: $0.79, up 10% from last year.

  • Cash from Operations: $209 million, compared to $171 million in the prior year period.

  • Cash and Cash Equivalents: $914 million, up $491 million from the same period last year.

  • Attrition Rate: 23%, 200 basis points lower than the same quarter last year.

  • New Logos Added: 23 in Q2, totaling 53 new logos in the first half, a 29% increase year-over-year.

  • Revenue Guidance Increase: Raised by 150 basis points to 4% to 5% growth for the full year.

  • Adjusted Diluted EPS Guidance: Raised to $3.14 to $3.18 for the full year.

  • Operating Cash Flow Guidance: Approximately $525 million for the full year.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Genpact Ltd (NYSE:G) reported a strong quarter with revenue reaching $1.18 billion, up 6% year-over-year, exceeding the high end of their guidance range.

  • Gross margin of 35.4% and adjusted operating income margin of 16.9% surpassed expectations, driven by operating efficiencies.

  • The company has seen significant growth in GenAI bookings, which are up more than 10 times compared to the full year of 2023.

  • Genpact Ltd (NYSE:G) added 23 new logos in the quarter, bringing the first half total to 53 new logos, a 29% increase year-over-year.

  • The company raised its revenue and EPS outlook for the full year, reflecting strong performance in the first half of 2024.

Negative Points

  • Client sentiment has remained cautious and unchanged over the past 12 months, with no improvement in discretionary spending.

  • Despite strong performance, Genpact Ltd (NYSE:G) is not assuming any improvement in the buying environment for the remainder of the year.

  • The company faces a significant gap in partnership revenue compared to peers, although efforts are being made to close this gap.

  • Attrition remains at historical lows but still stands at 23% for the second quarter.

  • The guidance for the third quarter indicates a deceleration in growth rate compared to the strong performance in the second quarter.

Q & A Highlights

Q: Can you provide an update on overall client sentiment and how it has evolved over the past quarter? A: Balkrishan Kalra, President and CEO, stated that client sentiment has largely remained the same over the last 6 to 12 months. There has been no significant improvement or deterioration in discretionary spending, with clients remaining cautious and watchful due to ongoing uncertainties.

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