On August 8, 2024, Genpact Ltd (G, Financial) released its 8-K filing for the second quarter of 2024, showcasing a robust performance that surpassed analyst estimates. Genpact Ltd, a global provider of business process management services, reported significant growth in both revenue and earnings per share (EPS), leading to an upward revision of its full-year guidance.
Company Overview
Genpact Ltd is a leading provider of business process management services, catering to various industry verticals including banking and financial services, insurance, capital markets, consumer product goods, life sciences, infrastructure, manufacturing and services, healthcare, and high-tech. The company's services encompass aftermarket, direct procurement, risk and compliance, human resources, IT, industrial solutions, collections, finance and accounting, and media services. Genpact's end market by revenue is India, and it remains a significant revenue source for General Electric, from which it was spun off.
Q2 2024 Financial Highlights
Genpact Ltd reported total revenue of $1.18 billion for Q2 2024, marking a 6% increase year-over-year (7% on a constant currency basis). This figure exceeded the analyst estimate of $1.143 billion. The company's diluted EPS stood at $0.67, up 6% year-over-year, while the adjusted diluted EPS was $0.79, up 10% year-over-year, surpassing the analyst estimate of $0.75.
Segment Performance
Genpact's revenue growth was driven by its two main segments:
- Data-Tech-AI: Revenue of $546 million, up 4% year-over-year, representing 46% of total revenue.
- Digital Operations: Revenue of $630 million, up 9% year-over-year, representing 54% of total revenue.
Income Statement and Key Metrics
Genpact's gross profit for Q2 2024 was $416 million, up 7% year-over-year, with a gross margin of 35.4%. Net income was $122 million, up 5% year-over-year, with a net income margin of 10.4%. Income from operations was $170 million, up 8% year-over-year, with an operating margin of 14.5%. Adjusted income from operations was $198 million, up 7% year-over-year, with an adjusted operating margin of 16.9%.
Balance Sheet and Cash Flow
As of June 30, 2024, Genpact's total assets were $5.18 billion, up from $4.81 billion as of December 31, 2023. The company reported cash and cash equivalents of $914 million, a significant increase from $584 million at the end of 2023. Cash flow from operations was $209 million, up from $171 million in Q2 2023.
Share Repurchase and Outlook
During the quarter, Genpact repurchased approximately 1.9 million common shares for a total consideration of $63 million at an average price of $32.63 per share. The company has raised its full-year 2024 guidance, now expecting total revenue in the range of $4.656 billion to $4.701 billion, representing year-over-year growth of approximately 4.0% to 5.0% as reported, or 4.2% to 5.2% on a constant currency basis. Adjusted diluted EPS is projected to be in the range of $3.14 to $3.18, up from the prior range of $3.01 to $3.04.
Conclusion
Genpact Ltd's strong Q2 2024 performance, characterized by revenue and EPS growth that exceeded analyst estimates, underscores the company's effective execution and strategic focus on innovation. The upward revision of its full-year guidance reflects confidence in sustained growth and operational efficiency. Investors and stakeholders will be keenly watching how Genpact leverages its capabilities in Data-Tech-AI and Digital Operations to drive future performance.
Explore the complete 8-K earnings release (here) from Genpact Ltd for further details.
