Genpact reports Results for the First Quarter of 2017

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NEW YORK, May 4, 2017 — Genpact Limited (NYSE: G), a global professional services firm focused on delivering digital transformation for clients, today announced financial results for the first quarter ended March 31, 2017.

“We delivered solid first quarter results, highlighted by continued momentum from our transformational services in consulting, digital and analytics driving our Global Client BPO growth,” said N.V. ‘Tiger’ Tyagarajan, Genpact’s president and CEO. “Our clients are excited about our recent acquisitions. RAGE Frameworks adds tremendous capabilities in the area of Artificial Intelligence, and BrightClaim expands our deep insurance domain expertise. Our investments in digital, domain and analytics have cemented our reputation as a digital transformation thought leader.”

Key Financial Results – First Quarter 2017

  • Total revenue was $623.0 million, up 2% year over year (up ~3% on a constant currency basis).
  • Income from operations was $79.1 million, up 4.6% year over year, with a corresponding margin of 12.7%.  Adjusted income from operations was $88.1 million, up 3% year over year, with a corresponding margin of 14.1%.[4]
  • Diluted earnings per share were $0.26, down 4% year over year, and adjusted diluted earnings per share were $0.31, flat year over year. The current quarter diluted earnings per share includes a $0.02 foreign currency loss resulting from balance sheet re-measurement.
  • Genpact repurchased approximately 9.0 million of its common shares during the quarter for total consideration of $220 million at an average price per share of $24.33.[5]

Revenue Details – First Quarter 2017

At the end of each fiscal year, we reclassify revenue related to certain divested GE businesses as Global Client revenue as of the dates of divestiture. Such reclassifications are reflected in the revenue results and growth rates presented below. In addition, to provide a consistent view of the trends underlying our business, we are also presenting below revenue results and growth rates adjusted to assume that all 2016 reclassifications occurred on January 1, 2016.

  • Revenue from Global Clients was $554 million, up 8% year over year (up ~9% on a constant currency basis), representing approximately 89% of total revenues. If all 2016 revenue reclassifications had occurred on January 1, 2016, revenue from Global Clients would have increased 5% year over year (6% on a constant currency basis).
  • Revenue from GE was $69 million, down 28% year over year, representing approximately 11% of total revenues. If all 2016 revenue reclassifications had occurred on January 1, 2016, revenue from GE would have decreased 17% year over year.
  • Total BPO revenue was $511 million, up 5% year over year, representing approximately 82% of total revenues. If all 2016 revenue reclassifications had occurred on January 1, 2016, total BPO revenue would have increased 5% year over year.
  • Global Client BPO revenue was $462 million, up 11% year over year (up ~12% on a constant currency basis). If all 2016 revenue reclassifications had occurred on January 1, 2016, Global Client BPO revenue would have increased 7% year over year (~9% on a constant currency basis).
  • GE BPO revenue was $49 million, down 31% year over year. If all 2016 revenue reclassifications had occurred on January 1, 2016, GE BPO revenue would have decreased 17% year over year.
  • Total IT revenue was $112 million, down 7% year over year, representing approximately 18% of total revenues. If all 2016 revenue reclassifications had occurred on January 1, 2016, total IT revenue would have decreased 7% year over year.
  • Global Client IT revenue was $91 million, down 5% year over year. If all 2016 revenue reclassifications had occurred on January 1, 2016, Global Client IT revenue would have decreased 5% year over year.
  • GE IT revenue was $20 million, down 17% year over year. If all 2016 revenue reclassifications had occurred on January 1, 2016, GE IT revenue would have decreased 17% year over year.

Cash Flow from Operations

  • Cash generated from operations was $31 million in the first quarter of 2017, compared to cash used for operations of $10 million in the first quarter of 2016.

Revised 2017 Outlook

  • Total revenue outlook increasing by $20 million from the prior outlook to $2.63 to $2.70 billion reflecting expected revenues from our recent acquisitions (including an assumed adverse foreign exchange impact of $32 million, almost all of which is reflected in Global Client revenue). This represents growth of 2% to 5%, or 4% to 6% on a constant currency basis;
  • Global Client revenue growth improving to 5% to 8%, or 6% to 9% on a constant currency basis;
  • Adjusted income from operations margin[6] of approximately 15.7%; and
  • Adjusted diluted EPS[7] of $1.53 to $1.57.