Genpact Reports Results for the Second Quarter of 2015

genpactRevenues of $609.5 Million, Up 9% (11% on a constant currency basis)

Adjusted Income from Operations of $100.6 Million, Up 15%

 

NEW YORK, August 4, 2015 — Genpact Limited (NYSE: G), a global leader in designing, transforming, and running intelligent business operations, today announced financial results for the second quarter ended June 30, 2015.

 

Key Financial Results – Second Quarter 2015

 

  • Total revenue was $609.5 million, up 9% year over year (up 11% on a constant currency basis).

 

  • Income from operations was $89.4 million, up 22% year over year.

 

  • Adjusted income from operations was $100.6 million, up 15% year over year, with a margin of 16.5%, compared to $87.6 million with a margin of 15.6% in the second quarter of 2014.

 

  • Diluted earnings per share were $0.28, up 28% year over year, and adjusted diluted earnings per share were $0.32, up 21% year over year.

 

  • Genpact repurchased approximately 3.0 million of its common shares for a total of $68.1 million under its $250 million share repurchase program.  Year to date, Genpact has repurchased approximately 3.6 million of its common shares for a total of $81.4 million.

 

“We are very pleased with our second quarter results.  Despite significant foreign exchange headwinds, our outlook for full year revenues remains unchanged, driven by solid Global Client growth,” said N.V. “Tiger” Tyagarajan, Genpact’s president and CEO.  “Recent trends in the marketplace are forcing companies to rethink the way they do business, causing them to leverage new business models and be more disruptive in their industries.  This provides us with a terrific opportunity to work with clients through their transformation journeys, as our best-in-class process and domain expertise, combined with our ability to leverage cloud-based component technologies and insights from data and analytics, enables us to develop innovative solutions for them.”

 

Revenue Details – Second Quarter 2015

 

  • Revenue from Global Clients was $495.0 million, up 12% year over year, representing 81% of total revenues.

 

  • Revenue from GE was $114.5 million, down 4% year over year, representing 19% of total revenues.

 

  • Total BPO revenue was $481.2 million, up 13% year over year, representing 79% of total revenues.

 

  • Global Client BPO revenue was $391.0 million, up 18% year over year.

 

  • GE BPO revenue was $90.3 million, down 3% year over year.

 

  • Total IT revenue was $128.3 million, down 6% year over year, representing 21% of total revenues.

 

  • Global Client IT revenue was $104.0 million, down 5% year over year.

 

  • GE IT revenue was $24.3 million, down 11% year over year.

 

  • Annualized revenue per employee for the quarter was $36,600, up from $35,600 in the second quarter of 2014.

 

Cash Flow From Operations

 

  • Cash from operations was $90.3 million in the second quarter of 2015, up 15% from $78.8 million in the second quarter of 2014.

 

Client Relationships as of June 30, 2015

 

  • For the 12-month period ended June 30, 2015, the number of client relationships generating annual revenue over $5 million increased to 102 from 85 as of June 30, 2014. This includes client relationships with more than $15 million in annual revenue increasing to 31 from 27, client relationships with more than $25 million in annual revenue increasing to 17 from 14, and client relationships with more than $50 million in annual revenue increasing to 4 from 3.

 

Employee Statistics as of June 30, 2015

 

  • Genpact had approximately 69,800 employees worldwide, up from approximately 66,900 as of June 30, 2014.

 

  • Genpact’s employee attrition rate for the quarter was approximately 29%, measured from the first day of employment, compared to 26% for the same period in 2014.

 

New $1.15 Billion Five-Year Credit Facility

 

  • On June 30, 2015, Genpact entered into a five-year, $1.15 billion credit facility consisting of an $800 million term loan and a $350 million revolving credit facility.  Proceeds from this financing were largely used to repay all amounts outstanding under Genpact’s prior $925 million credit facility.  Borrowings under the new facility will be available at prevailing base or LIBOR rates and an applicable margin, with anticipated savings of 125 and 100 basis points on the new term loan and revolver, respectively, compared to the rates on our prior facility.

 

  • Genpact incurred a $10.1 million, or $0.03 per share, charge during the second quarter of 2015 related to the write-off of upfront fees for our previous facility.

 

2015 Outlook

 

Genpact expects:

 

  • Total revenue to be in the range of $2.46 to $2.50 billion.

 

  • Adjusted income from operations margin to be in the range of 15.0% to 15.2%, compared to an initial outlook of approximately 15%.

 

Conference Call to Discuss Financial Results

Genpact’s management will host an hour-long conference call beginning at 4:30 p.m. ET on August 4, 2015 to discuss the company’s performance for the second quarter of 2015. To participate, callers can dial +1 (877) 299-4454 from within the U.S. or +1 (617) 597-5447 from any other country. Thereafter, callers will be prompted to enter the participant code, 86868714.

A live webcast of the call including slides with our comments will also be made available on the Genpact Investor Relations website at http://investors.genpact.com. For those who cannot participate in the call, a replay and podcast will be available on the Genpact website after the end of the call. A transcript of the call as well as the presentation slides will also be made available on the website.

 

About Genpact

Genpact (NYSE: G) stands for “generating business impact.” We design, transform, and run intelligent business operations including those that are complex and specific to a set of chosen industries. The result is advanced operating models that assist our clients in becoming more competitive by supporting their growth and managing cost, risk, and compliance across a range of functions such as finance and procurement, financial services account servicing, claims management, regulatory affairs, and industrial asset optimization. Our Smart Enterprise Processes (SEPSM) proprietary framework helps companies reimagine how they operate by integrating effective Systems of EngagementTM, core IT, and Data-to-Action AnalyticsSM. Our hundreds of long-term clients include more than one-fourth of the Fortune Global 500. We have grown to over 70,000 people in 25 countries, with key management and a corporate office in New York City. Our global critical mass doesn’t dilute our flexible and collaborative approach, and our management team still drives client partnerships personally. We believe we are able to generate impact quickly because of our business domain expertise and experience running complex operations, driving our focus on what works and making transformation sustainable. Clients attribute much of our success to our unique history: behind our passion for process and operational excellence is the Lean and Six Sigma heritage of a former General Electric division that has served GE businesses for more than 16 years. For additional information, visit www.genpact.com.

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