Genpact 2025 Q1 Earnings Strong Performance as Net Income Rises 12%

Genpact (G) reported its fiscal 2025 Q1 earnings on May 12th, 2025. Genpact achieved robust revenue growth in Q1 2025, surpassing expectations with a 7.4% year-over-year increase, reaching $1.21 billion. Despite this positive start, the company adjusted its full-year revenue guidance downward, reflecting caution in the operating environment. EPS guidance was also revised, aligning with the adjusted outlook. Genpact's performance was marked by strong growth in its Data-Tech-AI segment, yet challenges persist, prompting a strategic reassessment for the remainder of the year.

Revenue
Genpact saw a notable 7.4% rise in total revenue for Q1 2025, reaching $1.21 billion, compared to $1.13 billion in Q1 2024. The Data-Tech-AI segment contributed $581.95 million, showcasing substantial growth. Digital Operations added $632.98 million, further supporting the overall revenue increase. These segments collectively underpin Genpact's strong financial performance.

Earnings/Net Income
Genpact's EPS increased by 15.4% to $0.75 in Q1 2025 from $0.65 in Q1 2024, highlighting ongoing earnings growth. Net income grew 11.9% to $130.85 million from $116.95 million in the previous year, underscoring the company's sustained profitability and stable business performance. The EPS growth reflects a positive trend for the company.

Post-Earnings Price Action Review
The strategy of investing in Genpact stock after revenue misses and holding for 30 days yielded a 34.07% return, significantly lagging behind the benchmark return of 95.08%. This approach exhibited substantial risk and volatility, as evidenced by a Sharpe ratio of 0.24 and a maximum drawdown of -48.01%. These metrics highlight the importance of careful risk management and suggest that shorter holding periods may be beneficial in navigating such volatile investment conditions.

CEO Commentary
Balkrishan "BK" Kalra, President & CEO of Genpact, emphasized a strong start to 2025 with an 8% year-over-year revenue increase in Q1, driven by 12% growth in the Data-Tech-AI segment. He acknowledged challenges in the operating environment, which led to a reduction in the full-year revenue growth forecast. Despite these hurdles, Kalra expressed confidence in Genpact's strategy to enhance innovation and deepen client relationships, aiming for future growth.

Guidance
Genpact revised its full-year 2025 revenue growth guidance to a range of 2.0% to 5.0%, down from the previous 5.5% to 7.5%. The adjusted diluted EPS guidance was also lowered to $3.41 to $3.52 from $3.52 to $3.59. For Q2 2025, the company expects net revenues between $1.21 billion and $1.23 billion, with adjusted EPS anticipated in the range of $0.84 to $0.86.

Additional News
Genpact has been recognized as a Leader in the 2025 ISG Provider Lens™ for ServiceNow Ecosystem Partners in the United States, showcasing its advanced technology services and solutions capabilities. The company also announced a multi-year partnership with BJ's Wholesale Club to enhance efficiency and support growth plans. Additionally, Genpact conducted a share buyback, repurchasing approximately 1.2 million shares at a cost of $63 million, demonstrating its commitment to returning capital to shareholders.

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