G - Earnings call transcript Q3 2024

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Operator

Good day, ladies and gentlemen. Welcome to the 2024 Third Quarter Genpact Limited Earnings Conference Call. My name is Sherri, and I will be your conference moderator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. The replay of the call will be archived and made available on the IR section of Genpact's website.

to Investor call Relations like Bessinger, to now of Head at would turn over the Krista I Genpact. Please proceed.

Krista Bessinger

and Thank Call. had everyone, XXXX our website, you, and welcome of Relations BK posted genpact.com. release BK then to afternoon, Sherri. will on financial greater our and Financial Mike Genpact's us Weiner, earnings of our CEO; the press the Earnings We chance will a Kalra, Conference overview Mike you've and quarter, hope with cover performance to start detail Officer. take read President Today, section a have Good before high-level with Investor your Chief QX in we questions. we

may today, our and to business important strategies number goals. that of based our change Actual comments materially factors long-term differ during our on time. outlook, uncertainties, risk are call, due which These the note results SEC. a predictions filings the with in of make this and as about over and forward-looking expectations plans, risks could will including and XX-Q Please statements we XX-K statements, including

during measures. non-GAAP call, we financial Also will certain this discuss

and is GAAP reconciled in webcast to for release. the available on to have directly measures audio being Investor results. website And not and an most GAAP website, press our replay in a our few We our entirety in from be call earnings These comparable its are those measures hours. transcript substitute non-GAAP will financial intended a this Relations be finally, our

like it BK. I'd to turn to that, with And over

Balkrishan Kalra

to our report growth we accelerating Revenue X% $X.XX exceeded continued today. of everyone, joining Hello, of Gross expectations driven as efficiency. market share with operating of growth the range, accelerating delivering also up and Digital and revenue healthy guidance for Krista. and us growth supporting Thank quarter XX.X% our I billion, above end to am pleased margin strong while XX.X% you drive and high operating by margin also invest from Data-Tech-AI another year-over-year, gains. growth reached adjusted with Operations. you, income thank

We are equally Both leading on color how growth. I'll it talk and results. give are a at innovation Genpact, on innovation. some to you about is here lot we and execution focused accelerating delivering

innovation with results, our now row. to on are as and credential growth in we Framework faster and muscle will is about track in EPS expected at XXXX, focus is fourth revenue adjusted from simplification the We midpoint, Relentless XXXX AI-led X% for a our on on best own up and partnerships, than Framework, X% deliver execution execution comprehensive sharp Data-Tech-AI X+X our the in continue Genpact our delivering solutions, establishing X to revenue build X+X with which a transformation. grow year to for plus the in

you through on me highlights Let the key each. walk

First, on partnership.

We see increase and of as our growth accelerate in of our investments organization beginning continue to a meaningful partner continue we revenue progress. the We make the meaningful ramping relationships. to the to year partnership started at opportunity strength

since recent announcements I'll earnings important our of We highlight of made have last a number couple ones. a call.

is improve Finance proprietary AI to This AWS. full learning, machine GenAI our of data hold platform. we have Data to achieved we suite proud CFOs competency efficiency. GenAI AWS teams with their competencies now a provides and And is powered significant very a by accomplishment, in first data AI-led faster This The available are Databricks' Consulting solution data accurate intelligence and to operational and Hub, access Services. and boost with decision-making analytics,

Data-Tech-AI. Second, on

market. double significantly X% and our growth Both the more at is execution total here. Data-Tech-AI than with Our year-over-year, up focus delivering play innovation are addressable second is GenAI solutions accelerating comprehensive in on growth driving revenue expanding quarter. our

about and we their we October. AI live, are about to absolute and advanced generative the heart productivity, knowledge in analytics operational GenAI just power advances either generating We than achieve GenAI AI, XXX and and more empowering GenAI data is production value. That it's the accelerate or are clients about in transformative were than the with environments previous technology of of together now innovation GenAI not was in long-term the at the to early going By quarter. versus XXX numbers brought more clients, small, solutions expertise, clients outcomes. This combining deployed partners event meaningfully learning, bookings have excellence, up still up approximately quarter-over-quarter. machine industry XX% Day journeys While at learn the latest hosted Genpact Genpact.

theme AI turning innovation of The for into today. Genpact on a is specific outcomes focus business how was direct Now clients with

We on others, meaningful and it or proud value be organization. of that partners our their are our Advantage clients valued clients a driving Solutions, in shared who solutions stage, and are number how Foods, Sysco it Resolution Life were our was

a Mondelez and International, of world's interface CPG best companies, action few Genpact next about real-time provides a examples. insights you one recommended predictive give I'll with conversational spoke that the CFO the largest hub actions.

planning leveraging AI Google their Penske actionable challenges. Transportation finance operations, lower solutions streamlines availability, solution into and in takes uptime and and Pro on model insights inventory built logistics, transportation and The storage fleet Solutions, improve vehicle Each all to on-site forecasting to customer brought about enhances address pricing, logistics unique AI-based perspective overall account and identifies a an Genpact details, solution. Our leader demand costs. Gemini client our experience. specific industry on the Genpact's spoke tailored vendor

knowledge, them Genpact processing. and Mutual the business drive a competencies, efficient we value. artificial or about sector AI key for from industry the develop and accounting, many finance proprietary data, leveraging Amazon of And the casualty Bedrock these client can the property across we how resolution combined power spoke number insurances, transform of of insurance, and solutions and the insurance supply demonstrated one claim superior and Insurance, AI-enabled drive also to Day stories, being including solution Liberty Apart intelligence global more largest and at a data us, chain for claim illustrating processes

payable. our LLM, learning It productivity capital which our business this AI solution than existing experience. just across Powered end-to-end more is the solutions. and cost one the process, and machine accounts proprietary automation for I'll of enhances agentic significantly operations, user's achieving working to leverages solution finance reduces increase our solutions, these improves by of highlight

to Coming back more so to can continue the our which Framework, efficiently. operations we is we third scale element our X+X in simplification, that streamline

to which is cash we process, example, an have to flow. and taken bill our As operating simplify steps time improvement in cash-to-collection delivering

resulting own well. as we working process, accounts both In capital and in simplifying are improved automating addition, further our payable

covered detail translating employee. leading best we available to brings for at I'll Scout the our give Day. on as every We example, Genpact a everyday power content. to family of we AI-led in progress. make AI finally, have And meaningful with documents work which one with called transformation, credential continue also now AI of Genpact to AI Scout you agents or summarizing

today development. like IT, solve complex our production more have also stages functions agents in problems. we XX customizing and specialized Still are more to we over agents many For HR early in with of in adoption,

and cycle is created greater the cycle. generate agent focus In different us to life on with also life selection, own software a of we accuracy. development and AI our developing agents from speed specific management, model This with training process the classic Scout, allowing development

turning results, full are again for our guidance. year. another of Now we better-than-expected quarter raising to outlook With the

revenue We previously. are growth at X% expected basis, points midpoint, up by increasing X.X% guidance on basis the with XXX as-reported now from

to XX year AOI increasing gross the of for and are our by reflect with $X.XX $X.XX raising are midpoint we full adjusted approximate to margin We EPS increase basis the of the performance. range an year-to-date each. And also points strong at outlook

results can and are deliver for said, both to we about work shareholders. ahead. there optimistic XXXX, is As our for clients we look the significant That ahead we our

the latest at we Genpact reimagining for Our about and It our transformative technology. fundamentally about deliver is how just excellence is not operational journey value clients. adopting

are start Genpact. what's on good building and next and focus We heads to off down, innovation but execution for remain a

well expanding believe a with we are ahead. data, and our In closing, is we addressable we see and GenAI unique total of domain. bright our technology future combination positioned market,

we witnessed improving not making, importantly we are most but have data, across board, the proud and delivered are perhaps the in year-to-date. are innovation tech while of We and performance also easy, execution The incredible changes clients. to dedication bring have of want incredible thank we passion. I team value immense I the the one AI. the and of Genpact every every for to their day employees our

With that, to the turn over me let Mike. call

Michael Weiner

generation. adjusted we growth the the remainder revenue results as BK, third Thanks, growth, of we're positioned strength and everyone. third flow quarter insights diluted broad-based quarter, demonstrated into for the cash and for Thank review us accelerating year. XX% you afternoon, We our in X% EPS good how joining achieving and provide

for reflecting rates at total sole-source XX% remains balanced achieved sizes. bookings. We pipeline of Our record of XX% the quarter levels, mix accounting deals a win with deal for approximately of

We new large also and X XX added in deals the won logos quarter.

a value. are million large greater or in reminder, contract total As $XX deals

revenue Our $X all-time footprint high generating to number annual quarter. expanding. is grew this clients in XXX The more million an of of than in

$XX million of increased also the number XX, more than the annually, contributing with We in of reflecting over clients million solutions generating success. driving importance their $XXX in clients X revenue to

and revenue performance statement. the a execution. constant all was total of an year-over-year underscores constant currency terms. million, revenue both for X% a X% billion, $XXX was increase quarter. currency the income Data-Tech-AI, Growth as-reported and Turning components disciplined Total reported revenue strong was is to in This of by approximately Data-Tech-AI on $X.XXX both which representing XX% of driven increase basis. year-over-year our

fixed on Digital deal total continued ago. Operations Revenue total at up Operations excluding constant XX% revenue, X% contracts, and currency additions. from deals, outcome year Digital fee a million, $XXX comprised in and of primarily XX% contributed the from quarter. consumption-based revenue of an as-reported revenue was growing XX% basis, new

tech to approximately data, X X% While grew of growth. services, and deal X approximately posted X%, while high services of All accounts last Health All new analytics financial revenue advanced and tech X% year. care healthy with saw and segments growth Consumer AI. were priority year-over-year. total ramps, and XX% approximately manufacturing compared gains up both contributed segments revenue in

to We revenue the gross from XX margins basis Moving up period. from points expanded XX.X%, profitability. year at prior

In addition revenue our enhanced to we accelerated driving productivity. growth,

more basis of investments by XX.X% optimization of SG&A reflecting to in year-over-year reduced G&A. Our expense by XX points were offset revenue, efforts sales that than increased

margin to operating year-over-year basis adjusted our points income increased also XX.X%. by We XX

effective the was the year-over-year. rate to Diluted year-over-year. $XXX XX% Our income Net in $X.XX to a grew was increase prior EPS million, XX.X% period. year XX% tax XX.X% or in quarter compared

the On a increase from period. prior EPS $X.XX, non-GAAP basis, was year-over-year adjusted a diluted XX%

million Importantly, year. cash operating as achieved higher cash EPS flow each of this $XXX XX% flow working has outpaced operating capital. growth XX% EPS improvements was we Year-to-date, growth. supported growth -- quarters adjusted growth increased We in revenue revenue diluted year-over-year, versus the revenue in of X% delivering achieved

that On a the at $X cash issuance at cash and $XXX a year stood the be to bond proceeds sheet, million driven debt balance a last ago, of of quarter equivalents will from maturity month. approximately billion, by end this largely used the repay up

the months quality of strong. our were As XX last our X.Xx at net our EBITDA quarter. at of the to XX ratio days. low portfolio a The remains range result, DSOs end debt for remained credit the for -- overall

Even as capital for long-term repurchases. through a of we're we shareholders significant our share returning to invest dividends amount and growth,

year, X $XX includes This of shares million million In million X.X during returned and we billion. in $XX the of $X.XX dividends repurchases the third first for months quarter. the nearly

points flow returning at the quarter was dividend flexibility from prior XX% value Attrition in philosophy, the least our XX% delivering investments. allocation growth capital operations at commitment shareholder cash to through lower demonstrates and XX%, via for share of maintaining while strategic disciplined payments, than basis repurchases period. XXX Our

Now let me to turn guidance.

increased raising our visibility remainder year. guide are the the of We with for

Our midpoint. our are points by the to full basis approximately X% guide revenue year, XXX at we increasing

and Additionally, points AOI margin them growth XX.X%, basis we are each, bringing and raising to XX our XX.X% respectively. projected

outlook now is for to is Our $XXX year now by the flow approximately revised million. increasing our to the bringing adjusted Operating expected diluted $XX being EPS million, guide reach by midpoint. cash also total upwards full at $X.XX, $X.XX

you to be walk the detail range. at guide Fourth and and $X.XXX with in our billion Now with and to revenue we expect the the respectively, starting X.X%, quarter Digital deliver in total growth quarter. through of Data-Tech-AI range projected quarter, to full billion X% the midpoint $X.XXX I'll fourth Operations year up-and-coming of

be Our XX.X%. be XX.X%, operating margin to our to is adjusted and gross expected margin expected is income

year-to-date X.X% For the our results billion midpoint and total billion previously, growth revenue full the from year, of represents our by solid we driven a are our across reported. in $X.XXX as $X.XXX to of X% business. up projecting This continued at range range, revenue the strength

X.X% the to Data-Tech-AI and the expect of now Operations year range. We and full X.X% the midpoint at for Digital increase

by at reduced our share range and year-over-year higher to impacts. and $X.XX the EPS We by operating midpoint $X.XX. from $X.XX interest increase of approximately expected tax $X.XX, approximately This guide diluted driven adjusted by $X.XX to income the are count, of raising expected be a offset benefit of higher partially adjusted consisting $X.XX expense to $X.XX is

are pleased profitable growth the while we results, making investments key conclude, To delivering with future. our in

let With turn to me that, call Krista. the over

Krista Bessinger

Great. Thank Sherri, you, to questions. and Mike ready we're BK. take

Operator

Our Instructions] with the TD from come of question, Bergin first [Operator that will Cowen. Bryan line

Jared Levine

Jared for Bryan it's on Yes, Levine actually tonight.

it. advisory that short-cycle XX Over in strong has improvement the good growth, curious that days, just benefited projects It the and DTA there but last any see to been work? was if

Balkrishan Kalra

Yes.

me can I you think overall okay? -- hear

Jared Levine

Yes.

Balkrishan Kalra

Okay.

strong driving execution is I So that think, there been, result. has this overall,

see continue business environment, we stable deliver but is better stronger execution think to results. us I helping

Michael Weiner

quickly BK, to that. add to just on maybe

to really AI-related you're to technologies-led are that on of growth, advanced referring involving initiatives. generative component continuing our also of solutions If DTA we're our right, AI a and well lot execute

pretty we're within pleased Data-Tech-AI. with performance So this our quarter

Jared Levine

you then most fastest-growing? your source on an on partnerships important currently Who can your Okay. and which expanding update provide are the Great. partnership progress are revenue? And

Balkrishan Kalra

Yes.

of top, our knowledge these of each the solutions keystroke in in the I we and partners. multiplier specific Google, about or solutions these a continue they Salesforce clients. bring enhance so in of as think it mean proprietary the number be or it we differentiation a is understanding developments effect operational are our way solutions strong which us Microsoft very imagine, building can continue like partner partners, is then act AWS for in on our as and can be for to to people keystroke or you these think we ServiceNow, and domain-led to bring I domain think as where hyperscalers,

Michael Weiner

Yes.

Let me just quickly add on to that.

how business it's the partnerships you to and much revenues low the still If contributed whole. to compared a as of think relatively from partnerships, industry

investments to and for alluded So how going lot the really it or a a our driving ones us forward. BK revenue in moment currently, partnerships we'll goes ago are and see of so

you Sorry, I off. cut

Operator

next line question, our for will moment the William that Nolan One Maggie and Blair. from of with come

Kathleen Kronstein

you of with clients that's on for Kate what nice My are Data-Tech-AI that business Maggie. feel the results on like driving It's Congrats is the the resonating now parts really today. first growth? most do question accelerated right

Balkrishan Kalra

is applications any of there the not evolve. underlying and And parts it with would helping there Data-Tech-AI. AI the obviously, then those all technology the various conversation us. understanding or say that, not that without is is and And to only It I AI, how is GenAI. certainly of data. applications is GenAI Yes, But and the need that complete our

we deal Data-Tech-AI. in to do bring in even Data-Tech-AI, it deal Point So and I approach holistic without I more point think operations, is two, attention and which or book of digital medium-sized execute one. large clients' any of not number number our know all our

operations of those changing And or attributes Data-Tech-AI. deals, significant strong component. these are both Data-Tech-AI is always digital of In a a game our each pretty in

Kathleen Kronstein

of just Great. that bit. then Okay. And going a off little

During the technology progresses? that get bit getting the you are comfortable sense AI generative held, starting with customers that time the AI a you Day little to as more are

Balkrishan Kalra

is is or had to adoption production early is what that I more proof us bit happening. who credible is the was more a clients always the stories talking endearing lot stage solution a generating quite are operators because more and And clients that on how days, still putting clearly, it environments. that Yes. those would in can how value, to listening little change but is our say meaningful from replicability for the number just and a interest and concept we there the Clearly, in of it clients were about our happen. of

early it yes, days. is good it say it's -- would making still is progress. So pretty still a I

Operator

question, of and next Bamberger with Baird. for the will moment from come One our that Robbie line

Robert Bamberger

Is expectations about implies think we we we about organic year-over-year think of X% one-offs constant into good thinking we point growth QX, if should look XXXX as if a about that starting it year? that FX be So any about or sort next growth.

Michael Weiner

hand Let over it it you, and BK. kick off to me

we So the to of you're fourth I the right, business, we when give for you guide -- see and we be full us. for X% a of. provide was think kind off that we'll now. if there. year, fourth back formal or for referring year from stable about that when into growth for you does projecting think that when guidance meet We'll to moving But we're Again, our X also buying represent the quarter, it in quarter good which the it continue our months X% environment a and from

But where to the pretty So also comp fourth stronger feel grow the it we off be again, for year. of a will there. for about we good full quarter and are

Balkrishan Kalra

Yes.

we a XX specific in early we will XX, more we'll as meet and clients January, in stable how at to see XX give it buying look more but are that tougher And we what execution, gets company, think heads execution, guide add, a in this you XXXX, certainly still a company, and But beginning. where we innovation. really well are we gift still progress another I days. environment, of on we just but are have is stand. small that are delivering to us as yes, And we so how year, about as feel a feel for down specific we say yes, we the But will large I Mike as I we also while And guide said, give to great comps. in And just look, another days. yes, early it's you too. days would are layering a good must

Robert Bamberger

I guess Maybe about -- I just Awesome. last GenAI GenAI-type about be now you QX pricing, then that in remember time what's And in you acceleration? and this update quarter, than about and what terms is more materials. on deals percent you will outcome-based. was quarter noted have noted just talking how Do outcome-based of causing Is I XX% think last outcome-based thinking an then outcome-based dynamic.

Michael Weiner

Sure.

to revenue. drive sequentially, -- flat our relatively ago. it's second of the year at at that solutions. it's commercial to model absolutely while That classification look We from a XX% part revenue you're of XX%, will So so XX% XX%, about of had question. important your more attributed outcome-based alternative -- starting But up it's total

So we're quite bullish models, on continue AI itself, the to particularly these as point-based alternative that. gain And in on total bullish also generative quite solutions and solutions we're to traction. commercial continue pivot industry to

Operator

our will come Thind moment next Surinder with Jefferies. One of and question, that line the for from

Surinder Thind

you of more color provide larger bit commentary that this your can at set point, services. for a maybe BK, around TAM a the expecting you're,

about lot Just How on how of a should a Or any from color is plan we working it broader services it of that look a at just technologies more on that that? perspective? you with? client there's range breadth you can think just Is about you that? think

Balkrishan Kalra

Yes.

think attributes to is expanded end-to-end bear, were were helping think scope. thinking, having, we increase bring were we has more is I point the in in that number are because in that which just one. certain GenAI us observing possibly our I activity of conversations GenAI our clients yes, certain pipeline, Even Surinder, the solutions how scope not

also Day, solutions, they for solutions. our reflected well also I number of earlier embedded were AI a And then about. bringing thinking clients as domain-led two, they not are for as number stand-alone engaging Point us which are AI as

it strong data-led but it, understood very And us clients then analytics, data is franchise main real. therefore, helping addressable GenAI, And pretty data all of data, was always in is the conversation. increasing total become AI, and we while and data that none conversations, So and the tech that the because as at actor the well. is the And now franchise. has a sidebars, grow have and market

seeing we So are what the is approach sharing you. that it is are holistic we with more in pipeline

Surinder Thind

an what the acceleration it a I the that enough understand a are offering then or now? of Or perhaps AI feel environment, And think it's it, bit you've relatively you're think any describing willing perspective from are perspective you I if budget bit more clients growth why maybe more we color where open maybe differentiated? just stable to the like but to can proprietary mature a annual think up the improvement take in solutions on when that's about that something clients should that how or see helpful. that I trying seeing and you're the you're about go-forward execution the hear built seeing understand That's interesting I'm we is on basis. you that around part in is a that you certain to magnitude demand just they of -- little the

Balkrishan Kalra

elements to, What I is X+X stable demand as I that And both us will Framework. go as a helping execution in think back well innovation, in those better. Surinder, is our deliver of environment

when clearly including becoming are is partnership, that sitting what that's more is still It So of sharing are is a days. at a early say and with and in we lot you, and stronger results, it Data-Tech-AI. X+X, showing I we muscle

is we key find the this advanced early clients of are still the have to solutions, we we clients. second in lot Day entire control data, AI an that our X, as our are second entire Data-Tech-AI driving it number really beginning be and the areas for as also bringing days, in it accelerating technology where we transformation inspiration that control have that -- is or at infrastructure the how for pivot AI, quite a a of accelerate. was of intriguing that we we act journey. endearing And our helping And initiative clients are shared in our data, on the Similarly, be and we are plus in these because of be it that it -- X+X, within our us ourselves

Operator

with that and from BMO question, line of Capital will next our Bradley for Clark moment come One Markets. the

Bradley Clark

demand business quarters. of a for stable sort number mentioning been of You've

budget an business turning looking your a and signs for perhaps environment? calendar you of of year, signs start we could customers that signs suggest the are -- what improved early influx As

Michael Weiner

Yes.

me let So kick that off.

what seeing year side, is environment and So you're budget the potentially what to next year going redo of remainder what in our signs refine a definition think any business alluding their as from we budgets. I through flushes are into -- the of people we're stable or seeing of our

We our have not seen we that that assuming in are and guidance now. nor

early quarter, guidance Listen, as really clients a We'll be for have fourth some enter provide that we into year on from third XXXX. additional days so, doing our the finish up actually for they going next to quarter. -- additional in we quarter the what is hope or when but we to color refocus they're meet

Bradley Clark

a The quick Okay. as deals down ticked And then slightly. just sole-source percentage of follow-up.

And generative what to projects. off pricing around the any sources wanted changes competitive especially sort of has see the or any been just like of that, if back more AI of there've if I been sort pricing, there's environment of been perhaps

Michael Weiner

the and didn't question. you of first repeat your the us. it So part hear can answer I maybe second part I'll for

has Our relatively environment pricing constant. remained

haven't anybody anything dramatically of kind seen We different. doing

of a it's I the hear apologize. But I'd didn't I environment. So pricing question, say first stable your part

Bradley Clark

Yes.

of into of XX% was this noticed deals, pricing sole-source that XX% The last I just in dynamic. And quarter. that I question, just I was tied wondering the any sort was first if think, part change quarter, the

Michael Weiner

When deals. typically read like No, are deals not be sole-source on sole-source -- the Again, that. deals going versus disproportionately, they're sole-source you into at I things on look much are smaller nature lumpy larger side. wouldn't to in

to read So into that basis. there's lumpy. They're a nothing on quarterly really

Operator

will [Operator Instructions] One moment JPMorgan. of our question, next the from Puneet come that for Jain line with

your Puneet, please line is mute, your line. on up Again, open if

Krista Bessinger

not pick might be be he think, I in up. transit, to he may Sherri, available so

Operator

showing to to further the remarks. questions I no back for management closing I'm in would like at time. any this the Okay. call queue turn over

Balkrishan Kalra

clients before Thank support. all I our all ongoing Genpact our to want choosing shareholders their we to and And sign you, to for of say thanks off, just for of Sherri.

again to look to forward we innovating, and excited are you you. keep next talking to Thank quarter. We

Operator

Thank program. today's you for participating. concludes This

You disconnect. may now

Genpact Limited (G) 7 Nov 242024 Q3 Earnings call transcript