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Genpact Reports Third Quarter 2024 Results

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Genpact (NYSE: G) reported strong Q3 2024 results with total revenue of $1.21 billion, up 7% year-over-year. The company's Data-Tech-AI revenue grew 9% to $569 million, while Digital Operations revenue increased 5% to $642 million. Net income rose 13% to $133 million, with diluted EPS up 16% to $0.74. The company has increased its 2024 guidance, now expecting 6% revenue growth, up from 2% in the prior year. Genpact repurchased approximately 1.9 million shares for $75 million during the quarter.

Genpact (NYSE: G) ha riportato risultati solidi nel terzo trimestre del 2024, con entrate totali di 1,21 miliardi di dollari, in aumento del 7% rispetto all'anno precedente. Le entrate da Data-Tech-AI sono cresciute del 9% raggiungendo i 569 milioni di dollari, mentre le entrate delle Operazioni Digitali sono aumentate del 5%, toccando i 642 milioni di dollari. L'utile netto è aumentato del 13%, arrivando a 133 milioni di dollari, con un EPS diluito in crescita del 16%, pari a 0,74 dollari. L'azienda ha rivisto al rialzo le previsioni per il 2024, ora prevedendo una crescita del fatturato del 6%, rispetto al 2% dell'anno precedente. Genpact ha riacquistato circa 1,9 milioni di azioni per 75 milioni di dollari durante il trimestre.

Genpact (NYSE: G) informó resultados sólidos en el tercer trimestre de 2024, con ingresos totales de 1.21 mil millones de dólares, un aumento del 7% interanual. Los ingresos de Data-Tech-AI crecieron un 9% hasta alcanzar los 569 millones de dólares, mientras que los ingresos de Operaciones Digitales aumentaron un 5% hasta 642 millones de dólares. Las ganancias netas aumentaron un 13% hasta los 133 millones de dólares, con un EPS diluido que subió un 16% hasta 0.74 dólares. La empresa ha elevado su previsión para 2024, ahora esperando un crecimiento de ingresos del 6%, frente al 2% del año anterior. Genpact recompró aproximadamente 1.9 millones de acciones por 75 millones de dólares durante el trimestre.

Genpact (NYSE: G)는 2024년 3분기 강력한 실적을 발표했습니다. 총 수익이 12억 1천만 달러로 전년 대비 7% 증가했습니다. 회사의 데이터-기술-AI 수익는 9% 증가하여 5억 6천9백만 달러에 달했으며, 디지털 운영 수익은 5% 증가하여 6억 4천2백만 달러가 되었습니다. 순수익은 13% 증가하여 1억 3천3백만 달러에 이르렀고, 희석 주당순이익(EPS)은 16% 상승하여 0.74달러가 되었습니다. 회사는 2024년 가이던스를 상향 조정했으며, 이제 전년의 2%에서 6%의 수익 성장을 기대하고 있습니다. Genpact는 분기 동안 약 190만 주를 7천5백만 달러에 재매입했습니다.

Genpact (NYSE: G) a annoncé des résultats solides pour le troisième trimestre 2024, avec un chiffre d'affaires total de 1,21 milliard de dollars, en hausse de 7 % par rapport à l'année précédente. Les revenus de Data-Tech-AI ont augmenté de 9 % pour atteindre 569 millions de dollars, tandis que les revenus des opérations numériques ont progressé de 5 % jusqu'à 642 millions de dollars. Le bénéfice net a augmenté de 13 % à 133 millions de dollars, avec un BPA dilué en hausse de 16 % à 0,74 dollar. L'entreprise a revu à la hausse ses prévisions pour 2024, s'attendant désormais à une croissance des revenus de 6 %, contre 2 % l'année précédente. Genpact a racheté environ 1,9 million d'actions pour 75 millions de dollars au cours du trimestre.

Genpact (NYSE: G) hat im dritten Quartal 2024 starke Ergebnisse gemeldet, mit Gesamterlösen von 1,21 Milliarden US-Dollar, was einem Anstieg von 7% im Jahresvergleich entspricht. Die Einnahmen aus Data-Tech-AI stiegen um 9% auf 569 Millionen US-Dollar, während die Einnahmen aus digitalen Betrieb um 5% auf 642 Millionen US-Dollar anstiegen. Der Nettogewinn stieg um 13% auf 133 Millionen US-Dollar, während das verwässerte EPS um 16% auf 0,74 US-Dollar zunahm. Das Unternehmen hat seine Prognose für 2024 angehoben und erwartet nun ein Umsatzwachstum von 6%, nach 2% im Vorjahr. Genpact hat im Laufe des Quartals etwa 1,9 Millionen Aktien für 75 Millionen US-Dollar zurückgekauft.

Positive
  • Revenue growth of 7% YoY to $1.21 billion
  • Net income increased 13% YoY to $133 million
  • Data-Tech-AI revenue grew 9% to $569 million
  • Diluted EPS up 16% to $0.74
  • Cash flow from operations increased to $228 million from $162 million YoY
  • Raised full-year 2024 revenue growth guidance to 5.9-6.1%
Negative
  • None.

Insights

The Q3 2024 results demonstrate robust performance with several positive indicators. Total revenue reached $1.21 billion, showing a healthy 7% year-over-year growth. Notable strength in Data-Tech-AI revenue, up 9%, signals successful execution in high-growth technology segments.

Profitability metrics are particularly impressive, with net income increasing 13% to $133 million and diluted EPS growing 16% to $0.74. The company's operating efficiency is evident in the improved operating margins and strong cash flow generation of $228 million.

The raised full-year guidance, including revenue growth projection increase from 4-5% to 5.9-6.1% and adjusted EPS upgrade to $3.23-$3.24, reflects management's confidence in sustained momentum. The company's strategic focus on AI and technology services positions it well for continued growth.

The standout performance of Data-Tech-AI segment, contributing 47% of total revenue, demonstrates Genpact's successful transformation into a technology-driven services provider. The 9% growth in this segment underscores strong market demand for AI and data analytics solutions.

The recent AI Day event hosting over 100 clients highlights Genpact's commitment to leveraging generative AI and advanced technologies. The company's integrated approach combining data, domain expertise and AI capabilities creates a compelling competitive advantage in the digital transformation space.

The increased guidance for Data-Tech-AI revenue growth from 3.8% to 6.2% suggests accelerating adoption of these services among clients, positioning Genpact favorably in the growing enterprise AI market.

Total Revenue of $1.21 billion, Up 7% (7% constant currency)1

Diluted EPS of $0.74, Up 16%; Adjusted Diluted EPS2 of $0.85, Up 12%

NEW YORK, Nov. 7, 2024 /PRNewswire/ -- Genpact Limited (NYSE: G), a global professional services and solutions firm delivering outcomes that shape the future, today announced financial results for the third quarter ended September 30, 2024.

"We delivered strong results again this quarter, with accelerating revenue growth, driven primarily by client trust in our ability to innovate across Data, Tech and AI. As a result, we are increasing guidance with 6% revenue growth now expected in 2024, up from 2% in the prior year with continued discipline driving adjusted EPS growth faster than revenue for the fourth year in a row," said Balkrishan "BK" Kalra, Genpact's President and CEO. "Our recent AI Day was another important milestone, bringing together more than 100 clients and partners to demonstrate our unique combination of data, domain, and advanced technologies, including AI. Moving forward, we will build on this strong foundation, leveraging gen AI and other advanced technologies to drive superior value for clients."

Key Financial Highlights – Third Quarter 2024

  • Total revenue was $1.21 billion, up 7% year-over-year, both on an as reported and constant currency basis.1
  • Data-Tech-AI revenue was $569 million, up 9% year-over-year, both on an as reported and constant currency basis,1 representing 47% of total revenue.3
  • Digital Operations revenue was $642 million, up 5% year-over-year, both on an as reported and constant currency basis,1 representing 53% of total revenue.3
  • Gross profit was $431 million, up 7% year-over-year, with a corresponding margin of 35.6%.
  • Net income was $133 million, up 13% year-over-year, with a corresponding margin of 11%.
  • Income from operations was $182 million, up 10% year-over-year, with a corresponding margin of 15%.
  • Adjusted income from operations was $213 million, up 9% year-over-year, with a corresponding margin of 17.6%.4
  • Diluted earnings per share was $0.74, up 16% year-over-year.
  • Adjusted diluted earnings per share2 was $0.85, up 12% year-over-year.
  • Cash flow from operations was $228 million, up from $162 million in the third quarter of 2023.
  • Genpact repurchased approximately 1.9 million common shares during the quarter for total consideration of approximately $75 million at an average price per share of $38.72.

Outlook

Genpact's outlook for the fourth quarter of 2024 is as follows:

  • Total revenue in the range of $1.222 billion to $1.233 billion, representing year-over-year growth of approximately 6.6% to 7.6% as reported, or 5.8% to 6.8% on a constant currency basis.1
    • Digital Operations revenue growth of approximately 5.4% year-over-year and Data-Tech-AI revenue growth of approximately 9.0% year-over-year at the midpoint of the range, as reported.
    • Digital Operations revenue growth of approximately 4.0% year-over-year and Data-Tech-AI revenue growth of approximately 9.0% year-over-year at the midpoint of the range, on a constant currency basis.1
  • Gross margin of approximately 35.6%.
  • Adjusted income from operations margin5 of approximately 17.6%.
  • Genpact's updated outlook for the full year 2024 is as follows:
  • Total revenue in the range of $4.740 billion to $4.751 billion, representing year-over-year growth of approximately 5.9% to 6.1% as reported, or 6.0% to 6.2% on a constant currency basis,1 up from the prior guidance of approximately 4.0% to 5.0% as reported.
    • Digital Operations revenue growth of approximately 5.9% year-over-year and Data-Tech-AI revenue growth of approximately 6.2% year-over-year at the midpoint of the range, as reported, up from the previous midpoints of 5.2% and 3.8%, respectively.
    • Digital Operations revenue growth of approximately 6.0% year-over-year and Data-Tech-AI revenue growth of approximately 6.2% year-over-year at the midpoint of the range, on a constant currency basis,1 up from the previous midpoints of 5.5% and 3.9%, respectively.
  • Gross margin of approximately 35.4%, up from 35.3%.
  • Adjusted income from operations margin5 of approximately 17.1%, up from 17.0%.
  • Adjusted diluted EPS6 in the range of $3.23 to $3.24, up from the prior range of $3.14 to $3.18.

 










1

Revenue growth on a constant currency basis is a non-GAAP measure and is calculated by restating current-period activity using the prior fiscal period's foreign currency exchange rates adjusted for hedging gains/losses in such period.

2

Adjusted diluted earnings per share is a non-GAAP measure. A reconciliation of GAAP diluted earnings per share to adjusted diluted earnings per share is attached to this release.

3

Genpact updated the classification of certain service revenues from Digital Operations to Data-Tech-AI in the quarter ended March 31, 2024 to more accurately reflect the nature of, and mode of delivery for, the services provided, which have evolved over time. As a result, the revenue from Digital Operations and Data-Tech-AI for the third quarter of 2023 originally reported was $636 million and $500 million, respectively, which is $612 million and $523 million, respectively, in accordance with the updated classification.

4

Adjusted income from operations and adjusted income from operations margin are non-GAAP measures. Reconciliations of each of GAAP income from operations and GAAP net income to adjusted income from operations and GAAP income from operations margin and GAAP net income margin to adjusted income from operations margin are attached to this release.

5

Adjusted income from operations margin is a non-GAAP measure. A reconciliation of the outlook for each of GAAP income from operations margin and GAAP net income margin to adjusted income from operations margin is attached to this release.

6

Adjusted diluted earnings per share is a non-GAAP measure. A reconciliation of the outlook for GAAP diluted earnings per share to adjusted diluted earnings per share is attached to this release.

 

Third Quarter 2024 Earnings Call

Genpact's management will host a conference call on November 7, 2024, at 5:00PM ET to discuss the company's performance for the third quarter ended September 30, 2024. Participants are encouraged to register here to receive a dial-in number and unique PIN for seamless access. It is recommended to join 10 minutes before the call starts, although registration and dial-in will be available at any time.  A live webcast will be available on the Genpact Investor Relations website. For those unable to attend the live call, an archived replay and transcript will be available on the website shortly after the call.

About Genpact

Genpact (NYSE: G) is a global professional services and solutions firm delivering outcomes that shape the future. Our 125,000+ people across 30+ countries are driven by our innate curiosity, entrepreneurial agility, and desire to create lasting value for clients. Powered by our purpose – the relentless pursuit of a world that works better for people – we serve and transform leading enterprises, including the Fortune Global 500, with our deep business and industry knowledge, digital operations services, and expertise in data, technology, and AI.

Safe Harbor

This press release contains certain statements concerning our future growth prospects, including our outlook for 2024, financial results and other forward-looking statements, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those in such forward-looking statements. These risks, uncertainties, and other factors include but are not limited to macroeconomic uncertainty and general economic conditions, any deterioration in the global economic environment and its impact on our clients, our ability to manage our CEO transition and retain senior management, technological innovation, including AI technology and future uses of generative AI and large language models, and our ability to invest in new technologies and adapt to industry developments at sufficient speed and scale, our ability to develop and successfully execute our business strategies, our ability to effectively price our services and maintain pricing and employee utilization rates, general inflationary pressures and our ability to share increased costs with our clients, wage increases in locations in which we have operations, our ability to attract and retain skilled professionals, our ability to protect our and our clients' data from security incidents or cyberattacks, the economic and other impacts of geopolitical conflicts and any related sanctions and other measures that have been or may be implemented or imposed in response thereto, as well as any potential expansion or escalation of existing conflicts or economic disruption beyond their current scope, a slowdown in the economies and sectors in which our clients operate, a slowdown in the sectors in which we operate, the risks and uncertainties arising from our past and future acquisitions or divestitures, our ability to convert bookings to revenues, our ability to manage growth, factors which may impact our cost advantage, changes in tax rates and tax legislation and other laws and regulations, our ability to effectively execute our tax planning strategies, risks and uncertainties regarding fluctuations in our earnings, foreign currency fluctuations, political, economic or business conditions in countries in which we operate, as well as other risks detailed in our reports filed with the U.S. Securities and Exchange Commission, including Genpact's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. These filings are available at www.sec.gov. Genpact may from time to time make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. Although Genpact believes that these forward-looking statements are based on reasonable assumptions, you are cautioned not to put undue reliance on these forward-looking statements, which reflect management's current analysis of future events and should not be relied upon as representing management's expectations or beliefs as of any date subsequent to the time they are made. Genpact undertakes no obligation to update any forward-looking statements that may be made from time to time by or on behalf of Genpact.

Contacts

Investors


Tyra Whelton



 +1 (908) 418-2995



tyra.whelton@genpact.com




Media


Siya Belliappa



 +1 (718) 561-9843



siya.belliappa@genpact.com

 

GENPACT LIMITED AND ITS SUBSIDIARIES

 

Consolidated Balance Sheets

(Unaudited)

 (In thousands, except per share data and share count)




As of December 31,
2023


As of September 30,
2024

Assets





Current assets





Cash and cash equivalents


$                          583,670


$                     1,022,647

Accounts receivable, net of allowance for credit losses of $18,278

and $14,833 as of December 31, 2023 and September 30, 2024,

respectively


1,116,273


1,214,098

Prepaid expenses and other current assets


191,566


164,064

Total current assets


$                   1,891,509


$               2,400,809






Property, plant and equipment, net


189,803


207,592

Operating lease right-of-use assets


186,167


185,666

Deferred tax assets


298,921


288,773

Intangible assets, net


53,028


33,337

Goodwill


1,683,782


1,683,053

Contract cost assets


202,543


200,440

Other assets, net of allowance for credit losses of $4,096 and $6,440 as of

December 31, 2023 and September 30, 2024, respectively


299,960


325,990

Total assets


$                   4,805,713


$                5,325,660






Liabilities and equity





Current liabilities





Short-term borrowings


$                            10,000


Current portion of long-term debt


432,242


426,069

Accounts payable


27,739


18,513

Income taxes payable


38,458


52,793

Accrued expenses and other current liabilities


759,180


747,489

Operating leases liability


50,313


49,865

Total current liabilities


$                    1,317,932


$                 1,294,729






Long-term debt, less current portion


824,720


1,201,439

Operating leases liability


168,015


162,004

Deferred tax liabilities


11,706


11,577

Other liabilities


234,948


261,218

Total liabilities


$                    2,557,321


$                2,930,967






Shareholders' equity





Preferred shares, $0.01 par value, 250,000,000 authorized, none issued



Common shares, $0.01 par value, 500,000,000 authorized, 179,494,132

and 176,347,167 issued and outstanding as of December 31, 2023 and

September 30, 2024, respectively


1,789


1,758

Additional paid-in capital


1,883,944


1,922,042

Retained earnings


1,085,209


1,207,387

Accumulated other comprehensive income (loss)


(722,550)


(736,494)

Total equity


$                  2,248,392


$                2,394,693






Total liabilities and equity


$                   4,805,713


$                5,325,660

 

GENPACT LIMITED AND ITS SUBSIDIARIES

 

Consolidated Statements of Income

(Unaudited)

(In thousands, except per share data and share count)

 




Three months ended September 30,


Nine months ended September 30,



2023


2024


2023


2024

Net revenues


$               1,135,792


$              1,210,949


$              3,330,635


$              3,518,398

Cost of revenue


732,962


779,511


2,167,524


2,274,104

Gross profit


$              402,830


$              431,438


$             1,163,111


$          1,244,294

Operating expenses:









Selling, general and administrative expenses


229,731


243,315


675,642


717,988

Amortization of acquired intangible assets


7,497


6,495


24,009


19,980

Other operating (income) expense, net


(91)


(22)


(4,665)


(5,561)

Income from operations


$               165,693


$              181,650


$              468,125


$               511,887

Foreign exchange gains, net


2,975


1,133


3,698


4,424

Interest income (expense), net


(13,255)


(12,387)


(35,020)


(36,167)

Other income (expense), net


(508)


5,091


6,947


14,128

Income before income tax expense


$               154,905


$               175,487


$              443,750


$              494,272

Income tax expense


37,312


42,669


103,804


122,517

Net income


$               117,593


$              132,818


$             339,946


$               371,755

Earnings per common share









Basic


$                      0.65


$                       0.75


$                       1.86


$                       2.07

Diluted


$                      0.64


$                       0.74


$                       1.83


$                      2.06

Weighted average number of common shares used in
computing earnings per common share









Basic


181,399,897


177,595,400


182,808,518


179,221,213

Diluted


183,801,791


179,714,223


185,737,729


180,854,682

 

GENPACT LIMITED AND ITS SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)




Nine months ended September 30,



2023


2024

Operating activities





Net income


$                 339,946


$                   371,755

Adjustments to reconcile net income to net cash provided by operating activities:





Depreciation and amortization


54,410


51,830

Amortization of debt issuance costs


1,473


1,749

Amortization of acquired intangible assets


24,009


19,980

Loss on the sale of the business classified as held for sale


802


Allowance for credit losses


5,081


12,395

Unrealized gain (loss) on revaluation of foreign currency assets/liabilities


1,283


(7,909)

Stock-based compensation expense


63,850


47,276

Deferred tax (benefit) expense


(7,092)


14,509

Others, net


1,512


386

Change in operating assets and liabilities:





    Increase in accounts receivable


(73,400)


(95,790)

    Increase in prepaid expenses, other current assets, contract cost assets, operating lease
    right-of-use assets and other assets


(110,227)


(5,752)

    Decrease in accounts payable


(9,196)


(8,021)

    Decrease in accrued expenses, other current liabilities, operating lease liabilities and other liabilities


(80,694)


(5,056)

    Increase in income taxes payable


87,149


14,825

Net cash provided by operating activities


$               298,906


$                 412,177

Investing activities





Purchase of property, plant and equipment


(37,330)


(63,049)

Payment for internally generated intangible assets (including intangibles under development)


(2,569)


(1,787)

Proceeds from sale of property, plant and equipment


21


128

Payment for business acquisitions, net of cash acquired


(682)


Payment for divestiture of business


(19,510)


Net cash used for investing activities


$               (60,070)


$                (64,708)

Financing activities





Repayment of finance lease obligations


(9,168)


(8,238)

Payment of debt issuance and refinancing costs



(4,123)

Proceeds of long-term debt



400,000

Repayment of long-term debt


(19,875)


(26,500)

Proceeds from short-term borrowings


148,000


50,000

Repayment of short-term borrowings


(244,000)


(60,000)

Proceeds from issuance of common shares under stock-based compensation plans


34,638


12,170

Payment for net settlement of stock-based awards


(19,687)


(21,307)

Payment of earn-out consideration


(2,399)


Dividend paid


(75,230)


(81,768)

Payment for stock repurchased and retired (including expenses related to stock repurchase)


(150,548)


(167,656)

Net cash (used for) provided by financing activities


$             (338,269)


$                  92,578

Net (decrease) increase in cash and cash equivalents


(99,433)


440,047

Effect of exchange rate changes


(6,328)


(1,070)

Cash and cash equivalents at the beginning of the period


646,765


583,670

Cash and cash equivalents at the end of the period


$                541,004


$             1,022,647

Supplementary information





Cash paid during the period for interest


$                     31,551


$                    39,180

Cash paid during the period for income taxes, net of refund


$                  123,395


$                    77,983

 

Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with GAAP, this press release includes the following non-GAAP financial measures:

  • Adjusted income from operations;
  • Adjusted income from operations margin;
  • Adjusted diluted earnings per share; and
  • Revenue growth on a constant currency basis.

These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. Accordingly, these non-GAAP financial measures, the financial statements prepared in accordance with GAAP and the reconciliations of Genpact's GAAP financial statements to such non-GAAP financial measures should be carefully evaluated.

Given Genpact's acquisitions of varying scale and size, and the difficulty in predicting expenses relating to acquisitions and the amortization of acquired intangibles thereof, since July 2012 Genpact's management has used financial statements that exclude all acquisition-related expenses and amortization of acquired intangibles for its internal management reporting, budgeting and decision-making purposes, including comparing Genpact's operating results to those of its competitors. For the same reasons, since April 2016, Genpact's management has excluded the impairment of acquired intangible assets from the financial statements it uses for internal management purposes. Acquisition-related expenses are excluded in the period in which an acquisition is consummated. Genpact's management also uses financial statements that exclude stock-based compensation expense. Because of varying available valuation methodologies, subjective assumptions and the variety of award types that companies can use when adopting ASC 718 "Compensation-Stock Compensation," Genpact's management believes that providing non-GAAP financial measures that exclude such expenses allows investors to make additional comparisons between Genpact's operating results and those of other companies.

During the second quarter of 2022, Genpact approved a plan to divest a business that was no longer deemed strategic. Given the specialized nature of this business, we anticipated completing a transaction within twelve months after the end of the second quarter of 2022, and therefore, we classified the revenues and expenses related to this business as held for sale with effect from April 1, 2022. During the first quarter of 2023, the Company consummated this transaction and recorded a loss on the sale of the business.  During the second quarter of 2023, the Company terminated a lease for office property which was fully impaired as part of a restructuring in the second quarter of 2022 and recorded a gain on such lease termination as restructuring income in the second quarter of 2023. Genpact's management believes that excluding the loss on the sale of, and the revenues and expenses associated with, the business previously designated as held for sale and the gain on the lease termination in calculating its non-GAAP financial measures provides useful information to both management and investors regarding the Company's financial performance and underlying business trends. Additionally, in its calculations of non-GAAP financial measures, Genpact's management has adjusted foreign exchange gains and losses, interest income and expense and income tax expenses from GAAP net income, and other income and expenses, and certain gains from GAAP income from operations, because management believes that the Company's results after taking into account these adjustments more accurately reflect the Company's ongoing operations. In its calculations of adjusted diluted earnings per share, Genpact's management adds back stock-based compensation expense, amortization and impairment of acquired intangible assets, acquisition-related expenses and the related tax impact of such adjustments from GAAP diluted earnings per share. For the purpose of calculating adjusted diluted earnings per share, the combined current and deferred tax effect is determined by multiplying each pre-tax adjustment by the applicable statutory income tax rate.

Genpact's management provides information about revenues on a constant currency basis so that the revenues may be viewed without the impact of foreign currency exchange rate fluctuations compared to prior fiscal periods, thereby facilitating period-to-period comparisons of the Company's true business performance. Revenue growth on a constant currency basis is calculated by restating current-period activity using the prior fiscal period's foreign currency exchange rates adjusted for hedging gains/losses in such period.

Accordingly, Genpact believes that the presentation of adjusted income from operations, adjusted income from operations margin, adjusted diluted earnings per share and revenue growth on a constant currency basis, when read in conjunction with the Company's reported results, can provide useful supplemental information to investors and management regarding financial and business trends relating to its financial condition and results of operations.

A limitation of using adjusted income from operations and adjusted income from operations margin versus income from operations, income from operations margin, net income and net income margin calculated in accordance with GAAP is that these non-GAAP financial measures exclude certain recurring costs and certain other charges, namely stock-based compensation expense and amortization and impairment of acquired intangible assets. Management compensates for this limitation by providing specific information on the GAAP amounts excluded from adjusted income from operations and adjusted income from operations margin.

The following tables show the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures for the three months and nine months ended September 30, 2023 and 2024:

Reconciliation of Net Income/Margin to Adjusted Income from Operations/Margin

(In thousands)




Three months ended
September 30,


Nine months ended
September 30,



2023


2024


2023


2024

Net income


$        117,593


$        132,818


$       339,946


$        371,755

Foreign exchange (gains), net


(2,975)


(1,133)


(3,698)


(4,424)

Interest (income) expense, net


13,255


12,387


35,020


36,167

Income tax expense


37,312


42,669


103,804


122,517

Stock-based compensation expense


22,314


19,726


63,850


47,276

Amortization and impairment of acquired intangible assets


7,495


6,494


23,895


19,963

Restructuring (income) expense




(4,874)


Operating loss from the business classified as held for sale




1,201


Loss on the sale of the business classified as held for sale




802


Adjusted income from operations


$     194,994


$      212,961


$     559,946


$     593,254

Net income margin


10.4 %


11.0 %


10.2 %


10.6 %

Adjusted income from operations margin


17.2 %


17.6 %


16.8 %


16.9 %

 

Reconciliation of Income from Operations/Margin to Adjusted Income from Operations/Margin

(In thousands)




Three months ended
September 30,


Nine months ended
September 30,



2023


2024


2023


2024

Income from operations


$        165,693


$        181,650


$       468,125


$        511,887

Stock-based compensation expense


22,314


19,726


63,850


47,276

Amortization and impairment of acquired intangible assets


7,495


6,494


23,895


19,963

Other income (expense), net


(508)


5,091


6,947


14,128

Restructuring (income) expense




(4,874)


Operating loss from the business classified as held for sale




1,201


Loss on the sale of the business classified as held for sale




802


Adjusted income from operations


$     194,994


$      212,961


$     559,946


$     593,254

Income from operations margin


14.6 %


15.0 %


14.1 %


14.5 %

Adjusted income from operations margin


17.2 %


17.6 %


16.8 %


16.9 %

 

Reconciliation of Diluted EPS to Adjusted Diluted EPS7

(Per share data) 




Three months ended
September 30,


Nine months ended
September 30,



2023


2024


2023


2024

Diluted EPS


$      0.64


$      0.74


$       1.83


$      2.06

Stock-based compensation expense


0.12


0.11


0.34


0.26

Amortization and impairment of acquired intangible assets


0.04


0.04


0.13


0.11

Restructuring (income) expense




(0.03)


Operating loss from the business classified as held for sale




0.01


Loss on the sale of the business classified as held for sale





Tax impact on stock-based compensation expense


(0.03)


(0.02)


(0.10)


(0.03)

Tax impact on amortization and impairment of acquired intangible assets


(0.01)


(0.01)


(0.03)


(0.03)

Tax impact on restructuring income (expense)




0.01


Tax impact on operating loss from the business classified as held for sale





Tax impact on loss on the sale of the business classified as held for sale





Adjusted diluted EPS


$      0.76


$      0.85


$       2.16


$       2.37










7

Due to rounding, the numbers presented in this table may not add up precisely to the totals provided.

 

The following tables show the reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP measures for the year ending December 31, 2024:

Reconciliation of Outlook for Net Income Margin to Adjusted Income from Operations Margin8




Year ending December 31, 2024

Net income margin


10.6 %

Estimated interest (income) expense, net


1.1 %

Estimated income tax expense


3.4 %

Foreign exchange (gains), net


(0.1) %

Estimated stock-based compensation expense


1.4 %

Estimated amortization and impairment of acquired intangible assets


0.6 %

Adjusted income from operations margin


17.1 %

 

Reconciliation of Outlook for Income from Operations Margin to Adjusted Income from

Operations Margin8




Year ending December 31, 2024

Income from operations margin


14.6 %

Estimated stock-based compensation expense


1.4 %

Estimated amortization and impairment of acquired intangible assets


0.6 %

Estimated other income (expense), net


0.5 %

Adjusted income from operations margin


17.1 %

 

Reconciliation of Outlook for Diluted EPS to Adjusted Diluted EPS8

(Per share data)




Year ending December 31, 2024



Lower


Upper

Diluted EPS


$               2.80


$                2.81

Estimated stock-based compensation expense


0.38


0.38

Estimated amortization and impairment of acquired intangible assets


0.15


0.15

Estimated tax impact on stock-based compensation expense


(0.05)


(0.05)

Estimated tax impact on amortization and impairment of acquired intangible assets


(0.04)


(0.04)

Adjusted diluted EPS


$                3.23


$                3.24










8

Due to rounding, the numbers presented in this table may not add up precisely to the totals provided.

 

The following tables show the reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP measures for the quarter ending December 31, 2024:

Reconciliation of Outlook for Net Income Margin to Adjusted Income from Operations Margin9




Quarter ending December 31, 2024

Net income margin


10.7 %

Estimated interest (income) expense, net


1.3 %

Estimated income tax expense


3.3 %

Estimated stock-based compensation expense


1.7 %

Estimated amortization and impairment of acquired intangible assets


0.5 %

Adjusted income from operations margin


17.6 %

 

Reconciliation of Outlook for Income from Operations Margin to Adjusted Income from

Operations Margin9




Quarter ending December 31, 2024

Income from operations margin


14.9 %

Estimated stock-based compensation expense


1.7 %

Estimated amortization and impairment of acquired intangible assets


0.5 %

Estimated other income (expense), net


0.4 %

Adjusted income from operations margin


17.6 %










9

Due to rounding, the numbers presented in this table may not add up precisely to the totals provided.

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/genpact-reports-third-quarter-2024-results-302299182.html

SOURCE Genpact Ltd.

FAQ

What was Genpact's (G) revenue growth in Q3 2024?

Genpact reported a 7% year-over-year revenue growth to $1.21 billion in Q3 2024, both on an as reported and constant currency basis.

How much did Genpact (G) spend on share repurchases in Q3 2024?

Genpact repurchased approximately 1.9 million common shares for total consideration of $75 million at an average price of $38.72 per share.

What is Genpact's (G) revenue guidance for full-year 2024?

Genpact raised its full-year 2024 revenue guidance to $4.740-4.751 billion, representing year-over-year growth of 5.9% to 6.1% as reported.

What was Genpact's (G) earnings per share in Q3 2024?

Genpact reported diluted earnings per share of $0.74, up 16% year-over-year, and adjusted diluted earnings per share of $0.85, up 12% year-over-year.

GENPACT LIMITED

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