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GL

Genpact LTD (G)·Q3 2025 Earnings Summary

Executive Summary

  • Genpact delivered a strong Q3 2025: net revenue $1.291B (+6.6% YoY) and adjusted diluted EPS $0.97 (+14.1% YoY), both above company guidance and beating Wall Street consensus; revenue beat by ~$25M and EPS by ~$0.07. Bold beat: revenue $1.291B vs $1.266B consensus; EPS $0.97 vs $0.898 consensus . Values retrieved from S&P Global.*
  • Full-year 2025 guidance raised: net revenue to $5.059–$5.071B (from $4.958–$5.053B), adjusted EPS to $3.60–$3.61 (from $3.51–$3.58); DTAI growth raised to ~9.2% and Digital Operations to ~3.6% .
  • Advanced Technology Solutions (ATS) revenue accelerated +20% YoY to $311M, now 24% of total; Data-Tech-AI rose +9.3% to $622M; non-FTE revenue reached 47% and 5 large deals were signed—key catalysts for mix shift and margin expansion .
  • Q4 2025 guidance: net revenue $1.298–$1.311B, gross margin ~36.4%, adjusted operating margin ~17.4%, adjusted EPS $0.93–$0.94—supporting continued margin discipline .

What Went Well and What Went Wrong

What Went Well

  • ATS momentum and product innovation: “We delivered strong third quarter results… with another quarter of accelerating growth in Advanced Technology Solutions, up 20% year-over-year” and “Genpact is defining the future of Agentic Operations” .
  • Partnership-driven demand: partner-related revenue grew 56% YoY, with deep integrations (AWS, GCP, Databricks) and domain-led agentic solutions; pipeline improved and five $50M+ TCV deals signed in Q3 .
  • Margin expansion with mix shift: gross margin expanded to 36.4% (+~70 bps YoY) and adjusted operating margin to 17.7%; non-FTE deals reached 47% of revenue, supporting higher margin profile .

What Went Wrong

  • Decision Support Services softness: Core Business Services grew only +3% YoY, with weakness in decision support services partly offset by Digital Operations and Technology Services strength .
  • Variable large-deal timing: management noted mixed sales cycles for large deals—some accelerating, others taking longer as AI benefits are embedded in transformational roadmaps .
  • Cash flow reporting discrepancy: press release cites operating cash flow $308M and $263M net of a $45M prepayment, while CFO commentary references $228M excluding the prepayment; investors should note the difference and seek clarification .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$1.211 $1.215 $1.254 $1.291
GAAP Diluted EPS ($)$0.74 $0.73 $0.75 $0.83
Adjusted Diluted EPS ($)$0.85 $0.84 $0.88 $0.97
Gross Margin %35.6% (derived) 35.3% 35.9% 36.4%
Operating Income Margin %15.0% 15.1% 14.3% 14.8%
Adjusted Operating Income Margin %17.6% 17.3% 17.3% 17.7%
Net Income Margin %11.0% 10.8% 10.6% 11.3%

Segment Breakdown

SegmentQ3 2024 ($USD Millions)Q3 2025 ($USD Millions)YoY %
Advanced Technology Solutions (ATS)$259.184 $310.986 +20.0%
Core Business Services (CBS)$951.766 $980.271 +3.0%
Data-Tech-AIN/A$622 +9.3%
Digital OperationsN/A$669 +4.3%

KPIs

KPIQ3 2025
Non-FTE revenue (% of total)47%
Large deals signed (>$50M TCV)5
DSO (days)89
Operating cash flow ($USD Millions)$308
Operating cash flow net of client prepayment ($USD Millions)$263 (press release) ; $228 (CFO commentary)
Cash & equivalents ($USD Millions, quarter-end)$740.763
Share repurchases (shares/$)~2.0M / ~$90M
Gross profit ($USD Millions)$469.656
Net income ($USD Millions)$145.831

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Revenues ($USD Billions)FY 2025$4.958–$5.053 $5.059–$5.071 Raised
Adjusted Diluted EPS ($)FY 2025$3.51–$3.58 $3.60–$3.61 Raised
Gross Margin (%)FY 2025~36.0% ~36.0% Maintained
Adjusted Operating Income Margin (%)FY 2025~17.4% ~17.4% Maintained
Data-Tech-AI YoY Growth (%)FY 2025~7.4% (as reported) ~9.2% (as reported) Raised
Digital Operations YoY Growth (%)FY 2025~2.9% (as reported) ~3.6% (as reported) Raised
Net Revenues ($USD Billions)Q4 2025N/A$1.298–$1.311 New
Adjusted Diluted EPS ($)Q4 2025N/A$0.93–$0.94 New
Gross Margin (%)Q4 2025N/A~36.4% New
Adjusted Operating Income Margin (%)Q4 2025N/A~17.4% New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3 2025)Trend
AI/Agentic productizationDTAI +11.1% in Q1; focus on AI-led transformation . Q2: ATS +17.3%; raising guidance amid GenpactNext momentum .Launches AI Maestro and agentic suites (Insurance Policy Suite, Record-to-Report); ~100 clients in AI Gigafactory; >330 GenAI solutions deployed/live .Accelerating
PartnershipsEmphasis on ecosystem in prior quarters .Partner-related revenue +56% YoY; embedding domain-led solutions into AWS/GCP/Databricks stacks .Strengthening
Commercial modelsShift toward outcome-based/non-FTE noted .Non-FTE revenue at 47%; ARR/subscription-based structures for agentic software/IP .Mix shift to ARR/outcomes
Demand & bookingsHealthy pipeline; raised full-year outlook in Q2 .5 large deals; pipeline up from Q2; mixed sales cycle timing for large transformations .Robust, timing variability
Adoption constraintsNoted enterprise readiness requirements .Clients need data/process readiness; “no artificial intelligence without process intelligence”—last-mile expertise key .Structural work continues

Management Commentary

  • “Genpact is defining the future of Agentic Operations, rapidly integrating Advanced Technology Solutions, and strengthening our position as an ideal partner for clients looking to lead in the age of AI.” — BK Kalra (CEO) .
  • “Advanced technology solutions now driving more than half our revenue growth… revenue per head count is increasing… incremental revenue is coming in at much higher gross margin.” — BK Kalra .
  • “Non-FTE revenue… accounted for 47% of third-quarter revenue… we signed five large deals… pipeline increased from Q2.” — Mike Weiner (CFO) .
  • “This is our software… convert it into an ARR-type model… move away from non-FTE-related commercial models.” — Mike Weiner (CFO) .
  • Case studies show production deployments and ROI: autonomous GenAI agents for cash lifecycle at Mars; agentic data-quality factory at Heineken (up to 70% automated data quality improvement; 67% faster issue resolution) .
  • Additional Q3 press releases: Wesco’s AP transformation with Genpact AP Suite (40% of >3M annual invoices now touchless) ; Insurance Policy Suite launch (up to 75% cycle-time reduction projected) ; Q4 dividend declared ($0.17/share) ; global rebrand to underscore agentic pivot .

Q&A Highlights

  • Bookings and large-deal momentum: demand strong across new/existing clients; five large deals closed; medium-term growth targets reiterated (2026/2027 ≥7%) .
  • Agentic contracts and margins: awarded agentic contract value >30% from new clients; margin accretion tracking above ~300 bps target—positive mix .
  • Client adoption constraints: data/process debt and governance/change management are gating factors; Genpact’s last-mile/process intelligence drives production adoption .
  • Competitive landscape: differentiation in domain/process expertise, last-mile knowledge, and culture enabling speed/innovation; embedding software atop standard platforms/APIs .
  • Commercial models and disclosure: shift to ARR/value/consumption pricing for agentic; management focused on leading indicators (ATS, core, non-FTE %) with more disclosure emphasis in 2026 .

Estimates Context

MetricQ1 2025Q2 2025Q3 2025
Revenue Consensus Mean ($USD Millions)*1,208.4211,231.5801,265.891
Revenue Actual ($USD Millions)1,214.926 1,254.418 1,291.257
Surprise ($USD Millions)+6.505+22.838+25.366
Primary EPS Consensus Mean ($)*0.79380.853880.89816
Primary EPS Actual ($)0.84 0.88 0.97
Surprise ($)+0.0462+0.02612+0.07184

Bold Q3 beat: revenue +$25.4M and EPS +$0.072 vs consensus.* Values retrieved from S&P Global.

Key Takeaways for Investors

  • Strong Q3 execution with higher-margin mix (ATS up 20%, non-FTE 47%) and margin expansion; narrative supports continued EPS outperformance vs revenue growth .
  • Guidance raised across FY revenue and EPS; DTAI/Digital Operations growth targets increased—setup for Q4 and 2026 momentum .
  • Productization of agentic AI (AI Maestro, Insurance Policy Suite, Record-to-Report Suite) plus ecosystem partnerships are accelerating adoption and deal flow .
  • Watch large-deal timing and decision support services softness; monitor mix shift to ATS/ARR to sustain margin trajectory .
  • Cash flow reporting discrepancy suggests clarifying adjustments; nonetheless capital returns remain robust (Q3 repurchases ~$90M; dividend declared) .
  • Trading implications: near-term positive bias on raised FY/Q4 outlook and visible beats; catalysts include additional agentic deployments, ARR disclosure, and large-deal closures .
  • Medium-term thesis: last-mile/process intelligence advantage plus agentic software/IP should drive durable growth, pricing power, and operating leverage .

Notes:

  • Q3 2025 press release and 8‑K include reconciliations and detailed financial statements .
  • Prior quarter references from Q1/Q2 press releases used for trend analysis .
  • Additional Q3 period press releases provide operational proof points and corporate actions .