G - Earnings call transcript Q1 2018

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Operator

Good day, ladies and gentlemen, and welcome to Genpact's First Quarter 2018 Earnings Conference Call. My name is Daniel, and I will be your conference moderator for today. At this time, all participants are in a listen-only mode.

We will conduct a question-and-answer session towards the end of this conference call.

We will expect the call to conclude in an hour.

replay on call Genpact's the the and be website. reminder, available made IR a of will the archived As section of Roger I call Relations to like Genpact. Sachs, to at would Investor Head turn of now over the Please proceed, sir.

Roger Sachs

With review everybody We Thank welcome first a hope discuss results you to to ended quarter to and for me you, had call section good Chief earnings the genpact.com. release, Fitzpatrick, earnings of to our Tiger Officer. are March Genpact's IR and our Daniel was afternoon, Executive quarter Financial Ed XX, and New chance XXXX. which our in Tyagarajan, posted the and our President today Chief York website, our Officer;

quarter will today our will follows: come Our is outlook questions. results back for an discuss a then Tiger we Tiger update closing as full your high-level and our on then you provide financial for detail strategy. and provide the then greater take on year. comments performance our update in Ed agenda will and our first overview some of will

to mentioned, call expect the an about As Daniel just hour. we last

of results in our Some uncertainties that will forth release. matters in in number today's press of statements. uncertainties and are These to actual forward-looking Such involve a could those the other forward-looking. cause differ materially factors forward-looking discuss such and set are statements call we risks, from risks

non-GAAP the the we financial In addition, understanding which certain views our way during to our the management of operating business. measures, to we call provide refer of additional today, believe performance will information enhance

to And that, release posted call the to measures of let You earnings me to today's our of turn can section find these reconciliation Tiger. in a the with IR website. GAAP over

N. V. Tyagarajan

a growth call. currency led verticals. high-tech everyone BPO and afternoon, double-digit global had to joining thank year, We our first capital client Good a basis. earnings on quarter us markets the insurance, This today and Roger. growth mid-teens highlighted financial for start by strong services, for in the banking constant for our XXXX to you, you quarter our Thank and

constant Specifically client XX%. BPO quarter X%, increased global XX%, in increased during revenues the currency, client and increased revenues global revenues total

In adjusted was XX% year-over-year. And up our was expectations. operating XX.X%, addition, income EPS in $X.XX, with adjusted line margin

Our quarter grow nicely during to pipeline good momentum. continued with the

our Transformation we analytics New find growth mind in how real-time well cost City of Many also leverage are are business. situations rates where and in looking boardrooms our engaging are Corporate to recent discussed and you clearly We our ways pleased win consisting our sole-sourced as Services, in with more deals. many and out digital, differentiation Transformation analytics, we in leaders of competitive standing with Day to top is the savings. clients drive in difference their deal increasingly is to businesses, continued resulting to of the York disruption their our predictive Services businesses many way they as C-suites. and digital in search wins made run consulting impact the attended and to in more beyond being traction ways and continue large effectively digital run new change of the Investor for

to focused in business full this automating drive share. journeys their longer repetitive just market transformation. in expand are It engagements. Companies no digital trend and improving about large-scale more on instead, out customer extensively using growth We tasks; are seeing are play towards teams management digital is tools transformation lower-value experience

These and leveraging are journeys. fulfillment reduce claims significantly making more process designing multi-year examples client chains; and fraud the and by risk transformational, in and agile lending and and customer customer supply onboarding faster; losses to data Some satisfaction insurance include flexible improving rates environments.

that order also are and client focused reduce to companies becoming understanding cannot working experiences increase the process. importantly, higher of more more customer these domain to and and our able deep leverage to are drive sharply risks, and is and journeys very clear with reimagine efficiently alone. lasting like ROIs, investments They regulatory partners growth value. have Genpact, need aligned to they also undertake digital It domain Our ability flows, increase capital, and needs more transformation most with to and cash profitability. depth deploy compliance create process in increase Transformation By leaders real and partnering

up our and opening underpenetrated on believe have very well investments capabilities that Our chosen of has process analytics opportunities that Transformation deep more market. lines partner. positioned is coupled be we strategy in We of in service continues set to where this a expertise, domain and digital industry many and verticals us hugely focusing with strategic a

We harvested and from to for depth our deals. Operations. new leading Intelligent is highly domain Services routes Transformation Transformation synergistic market, running solutions Operations UK and Services The And doors many have Intelligent two more Operations Transformation to opens long-term Intelligent Services engagements.

more We opportunities. sole-source systematically have this many seen play strategic are in many and relationships winning out

our to the solutions has Cora, platform that to XXX areas with X more XX% To-date, approximately now domain-specific to our in is set generate global create verticals chosen We automation across billion from Transformation clients our XXX approximately at-scale of over including for transactions all We processing us digital is believe of ecosystem our clients. clients. We allowed top annually. working. and Genpact a Genpact AI different of partners. Services being together platform have strategy than replicable used the revenue Cora power our our deep of flexible deliver those unleashed technologies, of X,XXX in Transformation for enterprises pulls from a scalable deployments

deals in large-sized more currently are We many our pipeline. transformation seeing digital

analytics ERPs and on thereby one our the increasing of many way modules decision-making bots workflow orders with signed as or we manual the databases use engagement quarter, and used fulfillment, SeQuence, with over routine connected basic who tasks customer businesses requests facilities Cora cloud natural is management process adopted AI, fulfill thousands tasks revenue with information of work, one Automating with currently healthcare to automation, client Cora critical multi-year automation, leading organizations higher automate solution automate processes a more and tool first Robotic medical request company. Working processed a along to as the closely Services to few to from long-term intense platforms intelligent to process a we well insurance. the be rule-based simple satisfaction the with of processing, large, Transformation driving client. extraction other months, data Genpact that entry will widely robotic standardize a is are and healthcare Implementing by and our and make much led efficient. data where to information processes. language to-date, an developed higher an yield for for being deal based largest digital During faster

capabilities that to intelligent solutions advanced combine redesign However, RPA thus automation. drive and with focused manage as other with augmented on learn or process fully need governance as such decision-making help automate. bots ROI, controls value to Transformation together with adapt This workflow, exponential are they their seamlessly digital delivers workforce. as creating clients technologies Cora to machine tools Genpact higher clients and these dynamic together learning brings

flows, enabled company client significantly not certain therefore order reduced example. needed installations. the machine for an drove with equipment generate with the were cash when equipment Let and RPA backlog, bots satisfaction. its data procuring improved even intervention. for industrial helped process orders uptime, We Combining to purchase large elements me available This bots learning share minimal an automate human

As Intelligent will Automation increasingly solutions evolves, leverage AI.

predict the incorporate instantaneously now relationships and learning, of of which of to understanding, redefining outcomes dramatically reams cost. data of of This conversational models natural work radically clients. business deep some AI, finding solutions changing the vision, our a reduced language Our in all is computer nature are by at

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Lastly, companies or generate offer recommendations revenue agent customer human chatbot cross-sell and data new upsell together records of can cost in learn understanding millions almost engage natural from to every from use during opportunities. live learning and to to industry conversations with machine language sentiment

we All value the of these replicating these our clients. and with digital are solutions and implementations The many of our are are engagement transformation part huge. endless of are creation possibilities opportunities

together a managing within significantly discussing disrupt in customer strategic significantly we we me we transformation in one to few all and Let now a insurance. highly billion industry. domain we insurance, key are one opportunity service accelerate claims. XXXX, acquisitions to of property Genpact two casualty Insurtechs come solutions identified disrupting our our improve and capabilities this bolstered Cora, Leveraging with our creating for where market, journeys of both and management digital carriers who core claims the verticals, spend compete are to $X the are big seeing lines Through how better differentiated expertise digital experiences in minutes

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reduced seeing and result, satisfaction higher to a due are clients claims for our customer processing. scores much metrics As insurance retention times cycle

the reduce there insurance the industry. to and fraudulent is clients of to able also the disrupt a within industry are help in its opportunity number is stages penetration claims. fantastic Digital for us early We

recently with after Our insurance pipeline is increasing and logos peers. three going new won head-to-head we

targeted ranked journey vision Everest positioned insurance one and the of recognized in strategic With and Group, innovation, and call In execution number a all top execution. to we is the we for Genpact leader over I'll as This lines. to and in service each BPO of verticals. on fact, noted the industry property recently of both aspire research industry digital-led are be our turn analyst the Ed. us verticals at firm, Through a that, its our top quadrant, world-class casualty

Edward J. Fitzpatrick

I'll you afternoon, results financial on outlook. good first quarter XXXX provide our and on full update our operating more Today Tiger you, Thank year with detail you everyone. and

results to to Before our everyone the we the revenue X, January I to remind first adopted XXX not for quarter during it remainder on me expenses recognition. the and material XXXX, the material impact on Genpact standard of or year. revenue that expect accounting ASC begin, adoption be don't of new was The let

During or on $XXX of a Process Business the basis. total quarter, of of currency XX% represent which revenues, revenues Overall million, an Outsourcing constant XX% increase first we generated X% year-over-year a revenues our which or total services XX% basis. increased year-over-year XX% increased Total IT XX% revenue currency total revenue, on revenue client represents of increased X%. Global constant XX% year-over-year. our

Transformation services Global across we the growth of revenue year-over-year, constant chosen Tiger our Global declined XX% at double-digit a many during basis. mid-teen grew As or grew earlier, saw on X% ITO mentioned BPO verticals. Client a currency XX% and rate Client quarter.

from the XXXX, continue the more the expand declined revenues, down that the industry for increasing in XX% of to XX. clients factors due from Transformation with resources ramp course the targeted the year appreciation $XX XX.X%, quarter work. Gross compared during by X% XX% In for annual with quarter quarter the be of client ending in year-over-year the global fourth XX, from to decline as the was in impact grew with annual to anticipated $X we revenue, was GE total last rupee a last you Services revenues represent year-over-year including on of throughout first XX.X% the to GE Capital corresponding our to Adjusted line relationships decline XXXX. seasonality, with quarter, XX-month of period from XXX progress million relationships quarter expect primarily $XX.X number the driven million, revenue, We the including X% XX business which lower during income was expectations. period client of for and a a margin same our operations we XXXX. utilization remain we quarter across the number with from of up expected, and margin over to discussed reflecting revenues March in GE year. We with during dissipate line of we the year, with relationships of our impact to on-shore of to for XX.X% range as XX% quarter The first impact XXX, million our to verticals. than

and We a improve through the due higher to margin balance leverage to of the expect margins of our Services revenue. operating gross year ramp Transformation

in of To margins, of existing provide basis also expect change clarity trajectory relative million further the second approximate there's impact first place. gross the XXX gross lower either quarter will second our margins and in year. in $XXX operating expenses on or we We expectations million, rupee last be no the first the of margins SG&A improvement in half for totaled in year in an hedges based margins. compared full-year are to the on expecting $XXX point both operating the to and quarter

sales percentage marketing leverage X%, this X Our year-over-year due of revenue quarter initiatives a by and a of and savings was expense point Total with to in last support percentage efficiencies are driving as as line G&A our improved operating expense year. revenue functions. that in approximately

appreciation EPS adjusted year. well year-over-year $X.XX driven we the by a our in million from during was $X.XX million increase the export $X.XX primarily as in the Other partially $X Income exchange remeasurement the statement. income was related realized, a is in benefit of Adjusted as income line for India-based expected, Other we of subsidy, $X.XX, loss $XX recognized gains. of to As year-over-year benefit This offset approximately FX compared growth in quarter, change by rupee. included first foreign The to we benefit quarter Income was from primarily $X.XX expected the in last the which operating the the

per the to million of Since $XXX at we per repurchase $XX.XX price shareholders $XXX shares million to weighted We million $XXX our in average including average and initiated program of shares related XXXX, through program. a million have returned of at X.X share $XX.XX repurchase per share share. quarterly repurchased our approximately $X.XX an quarter, price of dividend million we During approximately share. $XX repurchased share we our

Our rate in XX.X%, of XX.X% quarter first quarter year. effective was the tax for first compared to the last

to advantage And able non-recurring During both benefited favorable of this mix the quarter, we discrete were items. certain we take from of periods, income. also in

outlook. rate tax trend rate, year the first now towards the to end XX% XX% lower-than-expected our quarter tax of expect our XXXX lower full Given we effective to

call. we our year zone move economic to We year-end the about expirations as our due increase rate during tax special expect throughout we've talked to XXXX the

full we year. update of the We through you as will year on our the rate tax balance move expectation

Now, to balance cash let flows the sheet. turn me in

days. week were of anticipated in collections during last XX in million quarter weekend part in the the on outstanding cash second resulted of first the deals operations due from the as last due well into the million few days utilized from first slipping we quarter, year, beginning to milestone of large $XX the April, of week into period same the March During days to our increase largely to of of to quarter. timing compared billings the generating related last falling sales the certain to $XX the XX Easter a This long delayed day that in as

range. no accounts the expect As you've throughout we low our remained years, the clear, seen in recover to DSO has prior of seen XX-day have at we and quarters balance year XXXX. in of grow several full the will operations To our no X% change receivable X% past aging ending cash year, the be deterioration. outlook our in for to the from over to consistent approximately There is

cash existing quarters growth have in continue million of EBITDA and Our strategy. up cash our equivalents $XXX rolling X.X net opportunities a compared million revenue $XX first XXXX. the the to the of from capacity as quarter – cash allocation ratio X.X% the debt on of liquidity million at Capital ample capital were of to $XXX quarter undrawn XXXX year-end. percentage expenditures million, of pursue With balances, execute to we and at and of to last $XXX with fourth end debt for X.X, the totaled

to expect growth billion, total revenue year Lastly, billion $X $X.XX year-over-year between X% be representing and full outlook, for continue of X.X%. we to to our

to For global clients, continue to we to X% expect XX%. revenue grow between

the growth mentioned to XX% on I GE X% full impacted for GE XXXX earlier, for be we revenue XXXX. uneven in As of the by growth year. remain quarterly pace for saw to will decline we the balance

to earlier, remeasurement with currency now saw approximately foreign margins during adjusted expect Due our quarter, operating indicated to we increase. the the gain margins expect earnings per revenues share the continue to during XXXX. $X.XX I the to to first $X.XX. approximate of an $X.XX continues $X.XX year I'll adjusted that, As call repurchase activity to during for assume range back be in XX.X%, we expected to benefit we Tiger share This as turn from estimate With his comments. closing the ramping

N. V. Tyagarajan

our and process gaining good analytics We're technologies key the in lines change Ed. expertise to you, start had domain digital We in clients run very service as businesses. traction and to combine together way solutions year. a they need Thank that with transformative their deep the

embracing the them clients to ourselves disrupting allows needs Our help through of navigate their and meet of continuously journeys. change us culture to Transformation our

years culture world-class at there been last into maniacal will known five we the business our client we As never things the always bedrock some are over delivery; of focus future, built which our expertise look Six change; our in outstanding has and in service, and for process that have Lean and operational led are net and to scores; that providing domain deep the with solutions rooted our Sigma. built promoter consistently on

do productivity, employ get on opposed or While end-to-end models, risk, Thinking. paid we commercial focused and Design These we to outcomes and are price fixed growing customer transformations, this achieving business now for centered cash material to new experiences, where clients outcomes, solutions leveraging our are expanding and as have engagements. new traditionally digital leading and revenues, analytics always deals beginning today full lowering around improving tools with time our for by flows. driving delivering We

leveraging game-changing on replicable solely By Thinking and partnerships power of our and we platform disruptive inorganic with bespoke rely clients; a combination the do for together clients. instead, and our organically-built growing digital work for solutions. deployment investments Genpact today analytics use specific organic unleashed strategic longer a tools ecosystem the Additionally, we of accelerate by designed no the we driving of to Cora, embedding Design outcomes of are and solutions

consistently strong a consisted of clients company. with the founded which leadership group up we grew been years our Lastly, for recognized executives team, by many for have who of and

company, from rising bench well company's team, diversified now new of original have up we as outside. which some the of transformed is leaders have of As and our the also from set as both a the the stars, made we leadership

have leaders us these Some and acquisitions. at the of some have our through hired levels joined senior been into team

evolved have While very core that have and different let With to we our a the back and into appreciate. over values our company, me recognize call we retained Roger. clients culture that, still turn

Roger Sachs

the Thank open you, the to to Tiger. you your We'd now can questions. please Daniel, provide call like instructions?

Operator

you. Thank

Our Citibank. from question comes Shirvaikar Ashwin with first

is line Your now open.

Ashwin Shirvaikar

Thank Tiger. Hi, Hi, Ed. you.

N. V. Tyagarajan

Ashwin. Hi,

Ashwin Shirvaikar

Hey. on quarter. a good, that. It's solid Congratulations

N. V. Tyagarajan

you. Thank you, Ashwin. Thank

Ashwin Shirvaikar

comments, your in thing that mentioned Tiger, out. you one stood

to regards said You opportunities. Anything That you opportunity sounds normally sole-sourced? promising. contracts. more tasks many you're with sizing, associate bigger least At metrics, that higher with in that winning I very would bigger value sole-sourced see and

N. V. Tyagarajan

question. they to larger deals Those see likely that been quite Ashwin, a are are larger deals tend seeing, we've that we some we've sole-sourced. we to are, time. great the And a for larger completely less The seeing it's continue and they be So component significant those. transformational been it seeing to to and have

Those we tend which sole-sourced. includes a to into then Transformation deal Services. when larger itself client However, be often Services, enter converts Transformation a with that

either incremental find be we've journeys outcomes add-on the domain to or for sole-sourced. also again, clients, in tend same domain delivered more follow-on that We our in adjacent when great

few as pipeline, and years, proportion gone I seeing just has proportion proportion the over of we booking revenue last a our of are a up. back – clearly a as So as sole-source look if of

Ashwin Shirvaikar

for with start from here? we the to hear. the Got it. this question top-line year? kind for you a a about of had strong Should and good year. good regards to to point the the the of remainder consider low bottom and That's talk pretty I Can line little expectations bit cadence build

N. V. Tyagarajan

on saw had, bit is start the back this just refrain which jump outlook a the in margins still the shouldn't year I'll the but is is overall cycle longer common Ed one to the the it, little to from good; start to it So there to business the three which line. quarter I and go. beginning it quarter; a like much the of bottom is, is a then very at we not year. goes quarter, our a exactly will we and next our always we've does top-line way why about in for top-line at are more The first – perspective have quarters cadence the start

had Our within good. the one our the had. also actually strongest history. of Transformation we've pipeline we've Services is in that pipelines of It's is stronger actually pipeline one

out of those but one all are So it's indicators, quarter good of four.

Edward J. Fitzpatrick

Yeah.

Tiger I top-line. think talked

as think expect was the you the On do last each saw – a I throughout go way of bottom we line, it little progress to year we the quarter lumpy. year kind

be will seen approximately XXX we've guided the first basis throughout will rise did grow year the on this more that in think expect the that of started year. the at points like margin do an that year below of next I prior and full be point half XX.X% we've expectation we we year quarter lower mention the such to. to operating where And periods I basis

full average should year get above the second be there. The to half

much us So, you about. even very expected, a little QX heard feel about trajectory, the better with maybe aligned good what talk as we

So but way, – that's year to the year. out it's no the start in expectations change good good full this for our

Ashwin Shirvaikar

Okay, great. you. Thank

N. V. Tyagarajan

Ashwin. Thanks,

Operator

comes our with question next Dave from And Thank Koning Baird. you.

Your line open. is

David J. Koning

Yeah. Nice guys. Hey, job.

N. V. Tyagarajan

Hi, Dave.

David J. Koning

into strong is a little touch, strong helped keep is of bit kind backlog we growth a kind question, Global really has Yeah, I business tougher the start midteens guess four of head level have growth. acquisitions sustainable now a just little my constant – currency I it's to in quarters that know The strong that but to there, the been and level? way a up? that enough now hit comp QX, of you; as for maybe been of first we BPO Client

N. V. Tyagarajan

going So, add and say. will Ed I'm to off start what I'll to then

as at full our same the kept said Dave than year outlook, quarter first better year reflection look the the actually is of had when I we described. suggests. everything, we've full you which a that just outlook and we year that started as actually That If is

as balance the did that, acquisitions of half we within do last in through it we comps, year go the that Our back tougher. has, get of the And year. also

everything So reason the is our that said you the think for remains year same. outlook overall why the I

Edward J. Fitzpatrick

last Yeah, full that year-over-year percentage I – about talked think was you'll this the X last if is of for M&A points we recall, the from X% about year, the impact about for and year year year. to kind growth effect

So quarter-to-quarter the on you color you'll anomalies detail based for balance. acquisitions. bit have just upon those – a giving different more expect and what But little of the just timing we I'll

David J. Koning

Yeah.

like Now, – and margin I it's Thank what a dramatic historically just the year follow-up. start you've got first it the a more year. it? that's might stronger little of gross to Is you. QX rest half, lot this year left in sure know rupee-driven the been just back And gross But be maybe great. to was half it one than I'm and the of has on little looks little then kind like like not sounds but right a but it else, a of juice a margin. the light for way seems that the of bit think of

Edward J. Fitzpatrick

for year. with planned mean, line I operating aligned in that very where – to we QX and that we think that be when points a he would I The knew was We guided, it thought the talked profits I And low with through. margin, talked remember, much year. Yeah. were fell number bit we'd in aligned hey, points gross QX QX we being was what XX last significant; for about about. known that the FX be basis and I reason had basis XXX was

that what achieve, we much the place. of majority rupee know that we the hedges to the lesser year second for the expect the in revenue have that's half is will one. that impact We in due to see throughout rate we So, be

or that quarter The the side than too, may ramped have year also seen ramp. Services that more. bit – start that very so remember, we've a you be significantly saw in When a higher other coming, lower this piece of big fourth utilization nice the was the we a little impacted difference fourth right? a in QX, that it the – which We we've Well, QX. or But in we bit larger as that you big impact see last is typically Transformation was really quarter, we go year. if where absolutely throughout step was year, a always disconnect lower back being changing

XXX how So, with next that, that's talked that Yeah. see expect about we profits we you'll that improvement particular, comfortable in each to quarter. quarter see feel In the gross will basis about; point progress as profit. gross

N. V. Tyagarajan

we that want we in made; being and chosen our of it lead strategic proportion, the I global verticals the of over choices performance way areas the Services And, in reflection very last have said client strength of relationships. should talked the And lines, made, the Dave, BPM these sole-source as the I has being number is, which marketplace what have into by strong just differentiated quarters. think because service of the a now pipeline question we say, want as a I also a bigger to itself, a often to that's therefore, go we've on back highly first investments and the to impact about I four your had the Transformation

combination yes, to it's Client a fact – the to and to not don't the would should I we I market. react BPM thought of want continuing are So, see market strength I differentiation. say our just Global I that because the of

David J. Koning

you. Thank Yeah. helpful. very That's Got you.

N. V. Tyagarajan

Dave. Thanks,

Edward J. Fitzpatrick

Dave. Thanks,

Operator

Foresi Thank you. And our Cantor Fitzgerald. next question comes Joseph with from

Your line open. is now

Joseph Foresi

Hi.

as the upside? see here. demand half you Could it across as of do like at look you head on better-than-expected wondering, solid financial you just margins? it a quarters Is a see couple than you've Where wondering It back to like top-line? was Maybe towards where I there's performing the year, the seems had bit might bias the little expected. you verticals come back. your a is the better services some I'm results year. are So

N. V. Tyagarajan

let's perform an or broad-based we think you performed really high-tech, our And of insurance things, banking look all top-line verticals could a continuing. that and focus that's or on of growth verticals, to we see we it's capital see being because lot I vertical, upside. year. our your or one, and if to Joe, they our as they've And look see as So four question, verticals, because that the we key full depending the less on markets – at on continue at whether well, dependent is certain where actually the

large about our really ramping some time and in it's revenue starts up. So deals then close whether of

it's more could have range a us that – on could certain that if timing. about that And favorable an that to the So, the impact push of the end changes higher then way, in we've timing given.

Edward J. Fitzpatrick

I agree.

Joseph Foresi

Got it.

Thanks. margins just probably the the and change. they've this anything the which to no just of but beat year, else the to throughout But much, then history ramped And is on is break and aware Are margin call would down not throughout too or there – what Okay. factors started particularly there another, pick-up year company, should slow any always ramp, we the one be XQ they other out between the that like? if look that were of would to in dictate and that way XQ?

Edward J. Fitzpatrick

time to to, really. maybe look was happened – I I few you call, the very think as but over in on a times. the look about new appreciation, talk the has appreciation rupee we've the are we company the which a as back think history called few And this in you've back – it last are the frequently. each rupee think in decade related me Day two we heard The that it's times ones out Analyst things I due last dip margins history, been the part not seen the

that it was piece So, most acute of or what's different.

be so us that's the gap QX full The as larger the That a Transformation significant. in one the of different ramp typical the year, was Services. is that will opposed QX the in Transformation other more you to and than year, say, full in step-back as bit heard because because ramp-up Services growth typical,

and first speak see showing and at quarter good those we're one looking Joe, are month two concerned that it the QX; out. progression into So, already about we're pretty to. Not because to we feel QX

Joseph Foresi

Thank you.

N. V. Tyagarajan

Thanks, Joe.

Operator

question comes Thank our William next with Maggie you. from Nolan And Blair.

now Your line is open.

Maggie Nolan

about... wanted Congrats, I guys. ask Hi. to

N. V. Tyagarajan

Thanks, Maggie.

Maggie Nolan

you're And last the I how more like momentum you vertical capital – in are that know given is and with on much The it you vertical, perhaps driven of good positive by welcome. it RPA expectations? quarter positive fairly now AI? but that your technologies the is You're markets did in results? line seeing were perform then

N. V. Tyagarajan

actually nailed Maggie, it. you

significant no digital we how new a other to performing. played seen buoyancy, the and markets. it RPA like given in have in up markets has projects, that's good we that in do technologies capital work where as think referred momentum technologies and call role in ours markets referred are terms I that earnings four, portion have capital and work markets think as engagements, as the the buoyancy referred new to our through has to is new vertical sensitivity market capital building we reflected that seeing such surprise earlier a vertical IT the .The to of I we that capital therefore But quarter is does of come in in engagements in been

feel overall, the markets good capital performance of about So vertical. the

Maggie Nolan

do of of that for perhaps implement many then Okay. robotics their to failing how discussed that Intelligent clients are building tools? look Great. their you And to of clients automation and on you help. you do perhaps own piece instances to also, have understand risk own failed concept implementation that you then then where RPA Automation that and have up view And it, attempting

N. V. Tyagarajan

for So all new is reality I everyone. is, Maggie, think, this of the

when and try don't little those of would they surprise some no then and experiment and of there a is people So work help. bit seek

So, little it's a bit natural.

So different things. it. unnatural of there's nothing try course about see clients We who

them of work other learning. some and some don't is Some areas; areas, in in work everyone

figure RPA methodology have are FS someone allows think hundreds to in can and ecosystem. client the pipeline that up across a when learn obviously that like have both best the make and the that that mistakes, not Transformation the then digital program, for on to opportunity the they our seeing so us Services adopt And undertake therefore to faster, dramatically. therefore that risk we to pretty where build a engage I out with of in much bring reduces ROI broader us, engagements same they then we learnings

Maggie Nolan

you. sense. Makes Thank

N. V. Tyagarajan

Maggie. Thanks,

Operator

you. from Fargo. Thank Wells Caso, Edward next our And question comes

Your line is now open.

Edward S. Caso

Hi. Good evening.

N. V. Tyagarajan

Hi, Ed.

Edward S. Caso

– to pause? But several an been mine had from from us answered Is far, do you effort you've now? a is March have didn't what of you've repurchase sense any repurchase. repurchase already. done or Some had accretion just aggressive come? mentioned quarter. obviously the quarters where Ed so in a you Why Why then that that there activity and accretion the more you more for Can give sizable

Edward J. Fitzpatrick

So $XXX Yeah. done said Ed, first quarter. repo, That to in about on about right? adds the we $X.XX. share $X.XX we've $X.XX, million the

the at M&A we're right? And based really, And M&A. is the there, $X.XX share look allocation know, extent to is at several to if priority And and if as we'll you attractive, attractive share factors, we'll less of that right an buy capital, it's obviously upon is the buy it's first So repo. for dividend excess then we be less. order Capital more; repurchases, priorities. price, going we'll now. have

capital we plan our as talked in guidance the were we did the be We attractive. to we price this in giving So, we had about going market. do was and that thought to

done. So what that's we've

Edward S. Caso

at if find help struggling So are things right your M&A price? comes model to first, to the you new

N. V. Tyagarajan

I take all. we that one. at certainly me let Ed, don't are think struggling So,

it we've to kind M&A been XX last If we are that added Tel thrilled you or Rage is very the They've the our exactly the in Cora of look PNMsoft consulting AI journey and platform. is has months, group excited Aviv or through TandemSeven that the integral SeQuence platform done on, it whether it we've at really now tremendously become the by. is to and design

– two domain then we did. our acquisitions on insurance, whole insurance built the the with around is coupled or So that I we existing all that our are and trajectory think

now happy really then, we very acquisitions with. are our And So, we have pipeline. a good pretty

clear very for going Those about we look them targeting is defined. build team that we there ever about, areas be always capability that want them. that sharply engage with build exactly that we know that We for of the specific are It's us, solution and and and of does that what to where to fit We know does don't acquisitions. exactly we to price. us, are are it's I with traction fit kind can think with the client? are

Edward S. Caso

Great. Thank you.

N. V. Tyagarajan

you, Thank Ed.

Operator

And from SunTrust. question with Atkins our next comes you. Frank Thank

Your now line is open.

Frank C. Atkins

Can wanted my any in you us around or I specifically question. ask terms rate of size, give pipeline to taking for clients, parameters Cora. of Thanks number growth there?

N. V. Tyagarajan

X Frank, and that that So, that have of XXX measure across clients are thing the three implemented metrics a in talked And an those transactions in. year. implementations that gets understand you we prepared handle I the Cora example help us think billion penetration. about we remarks plus about about kind Genpact X,XXX track the of I'll good give

receivables the Receivable receivables whose going and is that brings kind So, AR chasing slicing quickly think built though a to Cora that overdue, that able are deteriorate someone about every on to of cloud day needs that's very the machine tells follow-up Genpact that based outstanding one solution that only that's day those person is the that behind learning manage allows because receivables it on, that worth us the because to account and managing is AI solution, even down. of chances single Accounts visibility to that dicing

you explain accounting of a of in thousands transactions, about customers across talking users, use that of Cora Cora dollars the about range millions and into of are Genpact example talking about penetration hundreds transaction the and Genpact group, into our kind terms about talking a billions talking simple you AR, services our implement that's flowing dollars are the and that of So, how you're flow managing that you of implementation in you're – through; through, finance of when then of and of and clients. we measure

Frank C. Atkins

give helpful. update count to of and and any little ask in trends I wages Okay. side forward mix in wanted the by attrition And geography then Can about a and/or That's you perhaps the business year? the then the an terms this of head going bit. people us

N. V. Tyagarajan

head numbers. with just start count I'll So

the to And in delivering, we that reflection work one us, growth XX% count of count of grown for per that's growth in nicely Services, grown is single know, digital, about and important growth head high four that's metrics are we last It's to broadly analytics. the a digits very the per on Transformation the mark the close quarters. You basis. value revenue a the revenue by track the of in over head

that our a is addition this of about year-to-year if of So out the last year base increase do no head surprise between XX,XXX on way is in year, a count which which of that a to of is revenue QX the X,XXX lower we last QX of percentage year, growth business had. we've from versus

for over the overall, revenue now. journey So which is on count, decoupling like of five we've trajectory been years we from actually head a

Edward J. Fitzpatrick

more winning big work right is the work, opportunities, count head by the of like our we've some us, up than then ramping And where onshore nothing some right? a and we that United is the are significant, in – customer we geography said, And now. good other So places hey, States that's for sophisticated good better right? have we're which it base, pretty

N. V. Tyagarajan

proud that Nothing we new about intelligence people that regrettable people many significant now, there's managed around to people also is then a way of report select that to over something attrition of. machine that and the training chain, attrition we it because pretty well that's really of And learning is through specialized exactly manage domain taking the on total attrition. and difference. us that we've a so group allows our bunch what just very expertise no training not but our we And through. we move thing managing And digital are are the launched, manage attrition attrition attrition, artificial even we've now curve, straddle of It's the that value years better. that call including we the therefore,

Frank C. Atkins

you very much. Thank Okay, great.

Edward J. Fitzpatrick

Thanks, Frank.

N. V. Tyagarajan

Thank you, Frank.

Operator

And you. question Thank our from Bergin next Cowen. with Bryan comes

line Your now open. is

Bryan C. Bergin

the the you're then you Hey, service context? most guys. Can today, that on sense comment for that deal and the us largest deal Thank wanted And of seeing to size notable the a dig lines changes? can digital large I that on give of you. you regions in a just pipeline.

N. V. Tyagarajan

contract I'll million $XXX deal than one address total is last the first. more That value. in

strategic component, deals But larger the areas. we've Services the as terms its chosen more to question and to importantly, way of a it's that. I is large of of like one exactly described part on of it we got digital would your our be, actually that it's signed. significant pipeline deal Back in and it component So, Transformation color; our

I talked of So the pipeline. vertical. service the have seen in in so claims about areas one deals we surprise insurance, I insurance, no therefore, large in the insurance, in line is claims that talked so insurance where are about our of some good a

and in CPG the manufacturing think us big so we chain of area focus on time, I call and about focus for in service line a us. a for last and talked being big supply

So in again, the chain supply CPG we are seeing pipeline in significant and vertical. manufacturing

we focus acquisitions exactly traction vertical organic investing through of are we and our is for are seeing are line seeing pipeline most both deal areas So, we And a where reflection the industry focused, actually the areas and the both pipeline. in from the that more service our exactly big of are us areas we perspective. where

Edward J. Fitzpatrick

I types right? think seeing Geographically, of our than anything mix. don't different globally, We're the same opportunities

N. V. Tyagarajan

Yeah.

Bryan C. Bergin

Services, expect Transformation say the of I it quarter in that grew business or to then that share mid-teens mention on did I a little you Is fall then a the this of for quarter? at did where you And grow line Services? it rate. Okay. thought Transformation bit heard revenue the And you

N. V. Tyagarajan

in to on Transformation that we and of expect trajectory the third for end expect revenue it's first growth second to exactly growth Bryan. lower way Services. That's the quarter the end don't past; of of into and a well. the fourth the as through the off we trajectory actually quarter higher then report We go climbs between been we basis, the the a the and year quarterly starts at through be share this as quarters. trajectory It But

Edward J. Fitzpatrick

Yes.

that think I to low or XX%-ish change progress the we percentage, we expect closer by said, we've the year. where a XX% no and change, as in No Bryan. – is There's hey, For been there. to XX%

Bryan C. Bergin

lot. a Okay. Thanks

N. V. Tyagarajan

Bryan. Thanks,

Operator

question And Bank. you. comes from Bryan Deutsche Keane next our with Thank

Your line is now open.

Bryan C. Keane

I deal deal. about guys. pricing Is is to ask Hey, the priced? Yeah. arrangement? more that How outcome-based that digital large wanted an

N. V. Tyagarajan

a – Cora technologies there combination of and so of is business; services component the it's And to have services typical licenses on transaction-based components, cloud. I the well a combination mean, then then, course, it's digital significant of plus Cora the actually services that and has it for digital outcome-based would which usage of is some as And there effort-based a It's a so of implementations, implementation-based. as – pricing.

many which combination and short it's deals. would types number and the from find of long a share not of of a of a it, also pulled is of these also that in these So, gain way It we look. will number that has together our different a component, of deals

Bryan C. Keane

targets any the or these Okay. on there operating deals guys typically all digital... margin, certain deals can't Is are hit for that change you, operating risk if you these could better the margin side

N. V. Tyagarajan

so on of be will on it's today, execute, operate deliver way all are Bryan, tomorrow of business, the because well confident our foundation delivery, and which historically, we always why is we built you and can the execution. dependent outstanding outstanding how of

deal. that these on downsides don't, it deals. of have we for deliver has we course, one Of execute every to If and of course then associated

Edward J. Fitzpatrick

share, pretty activity, be days think gain you the in get. going course, a of as of Bryan, conservative what might if gain it's we to share, new we expect can we're on earlier

do going based getting share, start actual the we those results. and we we're experience we're that forecast gain what will that see upon we get As to to on

think ramped we've that I done So up. as has prudently this

Bryan C. Keane

And helpful. that's just then Ed. clarification, a Okay,

the improvement On the basis margins, sequentially talking XQ? points, year-over-year about in or XXX are of you

Edward J. Fitzpatrick

year-over-year, and I gross the year. full we to will the from would be impact it for sequentially be did improve. – really, I the the – QX, say QX thought Yeah, rupee year, also operating Sequential. for expect think we the margins to full

year-over-year call. concern. full was we last points Everything to operating out. and maybe had on I points is basis we'll the XX kind basis else basis see because rupee that on as not think see XXX I said expected. year; points about plays the that of That's how impact XXX a of It's the we

Bryan C. Keane

So the back the then, XX.X%. the in is the model they'll year-over-year, second in but that's down make up at year, enough of And to margins just be will leverage to or increase the quarter difference anniversary... be the half the that just

Edward J. Fitzpatrick

Exactly.

It's spend, very lightly. that will full our As you very, leverage. think SG&A about ramp

grows, G&A. little the going will particularly flow I'd to gross almost to get As a ramp top-line – a going bottom but bit – at that we say bottom. level to and are that through get significant margin from the we're little, leverage you'll

N. V. Tyagarajan

back-ended. And the more of than front-ended rupee the impact is

Edward J. Fitzpatrick

Yeah, significantly, yeah.

Bryan C. Keane

Right.

for Okay. clarity. the Thanks

Edward J. Fitzpatrick

Thank you.

N. V. Tyagarajan

Thanks, Bryan.

Operator

Thank you.

Our Katri next Moshe from question with Securities. comes Wedbush

open. now Your line is

Moshe Katri

taking for question. about deals. my sole-sourced you Tiger, thanks Hey, spoke

what back a the go way is is to a to now topic, kind there a some of levels pipeline specific the deal is pretty there percentage in year-over-year on Just as pipeline on to on based that of us Thanks. give way then, you're to of the robust quantify saying right color is any basis? And that how robust. terms

N. V. Tyagarajan

of more digital couple it's our more more last a an a not transformation, one-time the actually number been deals. the that's Moshe. that, over function So, than as and an sole-source is pipeline And color in add from past. than think I say is then, more at got being integral more change; And into higher part Services I it's all-time years into is, be the any and the don't I'll I'll progressive able high. a a Transformation perspective, and to been what of of sole-source think step percentage we've

Moshe Katri

also a able bit your higher, you competitors win market. mentioned rates. the of this that assuming about then to maybe you're talk then in your I'm win can rates are or some competitors And new suggesting traditional maybe beat that you're and

N. V. Tyagarajan

been rates quarters win steady for they've and So many again are steady actually now.

that win higher. not rates are it's the So,

focused who the – competitors, a suspects. of few industry usual verticals. it if of people changed are set certainly It type in changed hasn't there the competitors And bit certain And a we hasn't competitor look the verticals, is competitors. couple Our transformation actually Transformation consulting last very on are Services, new competitors some landscape the digital little gets then to no back first competitors who industry when in across are of quarter, cut years. surprise, then digital and over a

the big change through gone competitive landscape, quarters. overall, the as any So and we've four haven't we swing last seen

Edward J. Fitzpatrick

steady, the we said a like. steady And rates, that but Yeah. win Tiger really at rate

N. V. Tyagarajan

Yeah. Right.

Edward J. Fitzpatrick

positive So – a it's yeah. very it's right? thing, So,

Moshe Katri

for the follow-up should year? in here. Yeah. What Is And of we any the expect last IT just business this expectations? terms change there

Edward J. Fitzpatrick

No.

we I in range. think we were – flattish said I the think

the be it's it's and in had to mean, been you be to the flattish, steadied, we'll range, year We flattish expect so and there, It update expecting that's steady. as good. we're and progresses. I it it

Moshe Katri

Thanks.

N. V. Tyagarajan

Thanks, Moshe.

Operator

I am like questions this And would time. for not turn call to now Roger the you. further showing to closing any Thank Sachs at over back I any remarks.

Roger Sachs

us call forward look to joining and with for everybody, the Thanks, we you Great. quarter. on next today, speaking

Operator

does conclude in participating you This and conference. for have Everyone, wonderful a today's you program, thank gentlemen, may and today's day. disconnect. Ladies all

Genpact Limited (G) 3 May 182018 Q1 Earnings call transcript