Genpact Limited (NYSE: G), a global leader in business process management and technology services, today announced financial results for the second quarter ended June 30, 2013.
Key Financial Results – Second Quarter 2013
• Revenues were $534.8 million, up 14.4% from $467.6 million in the second quarter of 2012. Revenues from Global Clients were up 19.8%, and business process management revenues from Global Clients were up 18.1%.
• Income from operations was $78.0 million, up 23.5% from $63.2 million in the second quarter of 2012.
• Net income attributable to Genpact Limited shareholders was $63.9 million, up 4.5% from $61.1 million in the second quarter of 2012. Net income margin for the second quarter of 2013 was 11.9%, compared to 13.1% in the second quarter of 2012.
• Diluted earnings per common share were $0.27, unchanged from the second quarter of 2012.
• Adjusted income from operations was $89.2 million, up 14.6% from $77.8 million in the second quarter of 2012.
• Adjusted income from operations margin was 16.7%, up from 16.6% in the second quarter of 2012.
• Adjusted diluted earnings per share were $0.32, unchanged from the second quarter of 2012.
N.V. ‘Tiger’ Tyagarajan, Genpact's president and CEO said, “Continuing our momentum in 2013, in the second quarter Genpact delivered strong growth in revenues and adjusted operating income, as well as solid cash flows from operations. Our results demonstrate that the key elements of our growth strategy are resonating with the marketplace. With an increasingly targeted focus on the most promising industry verticals and solutions that integrate process, technology and analytics, we are unlocking innovation, driving client loyalty and strengthening our foundation for long-term sustainable growth.”
Revenues from Global Clients grew 19.8% over the second quarter of 2012. Business process management revenues from Global Clients grew by 18.1%, led by growth in Banking and Financial Services, Consumer Packaged Goods, Life Sciences and Healthcare and Business Services. Revenues from Global Clients represented approximately 77.3% of Genpact's total revenues, or $413.2 million, with the remaining 22.7% of revenues, or $121.6 million, coming from GE. GE revenues decreased 0.9% from the second quarter of 2012, adjusted for dispositions by GE of businesses that Genpact continues to serve.
In the 12 months ending June 30, 2013, 55 client relationships each contributed revenues of $5 – $15 million, up from 41 such relationships as of June 30, 2012, 14 client relationships each contributed revenues of $15 – $25 million, up from 11 such relationships as of June 30, 2012 and 12 client relationships each contributed revenues of $25 million or more, up from 10 such client relationships as of June 30, 2012.
75.1% of Genpact's revenues for the quarter came from business process management services, compared to 76.5% in the second quarter of 2012. Revenues from IT services were 24.9% of total revenues for the quarter, up from 23.5% in the second quarter of 2012.
Genpact generated $76.1 million of cash from operations in the quarter, compared to $127.2 million (including approximately $45 million from an up-front client payment) in the second quarter of 2012. Genpact had approximately $535.9 million in cash and cash equivalents and short term deposits as of June 30, 2013.
As of June 30, 2013, Genpact had approximately 60,200 employees worldwide, up from approximately 58,600 as of June 30, 2012. Genpact's employee attrition rate for the quarter was approximately 27%, measured from the first day of employment, compared to 25% for the same period in 2012. Annualized revenue per employee for the quarter was $36,700, up from $33,900 for the three months ended June 30, 2012.
Year-to-Date Results
• Revenues were $1.039 billion, up 15.0% from $903.1 million for the six months ended June 30, 2012.
• Income from operations was $151.9 million, up 22.9% from $123.6 million in the six months ended June 30, 2012.
• Net income attributable to Genpact Limited shareholders was $110.6 million, up from $99.6 million for the six months ended June 30, 2012; net income margin was 10.6%, compared to 11.0% for the six months ended June 30, 2012.
• Diluted earnings per common share were $0.47, up from $0.44 for the six months ended June 30, 2012.
• Adjusted income from operations was $171.9 million, up 15.1% from $149.4 million for the six months ended June 30, 2012.
• Adjusted income from operations margin was 16.6%, up from 16.5% for the six months ended June 30, 2012.
• Adjusted diluted earnings per share were $0.55, up from $0.53 for the six months ended June 30, 2012.
Genpact's employee attrition rate for the six months ended June 30, 2013 was 25%, measured from the first day of employment, compared to 24% for the same period in 2012. Annualized revenue per employee for the six months ended June 30, 2013 was $35,600, up from $33,400 for the six months ended June 30, 2012.
2013 Outlook
Tyagarajan continued, “The macro environment continues to be mixed: challenging for some industries and geographies, improving in others. Our pipeline is healthy and stable, with a significant uptick in larger, transformative deals. Large, transformational engagements are where we want to be, but they are complex and do have a longer decision cycle time. As a result of these longer cycle times, together with more subdued GE revenues, we now expect revenues for the full year 2013 to be in the lower half of our range of $2.15 – $2.20 billion. We continue to expect adjusted operating income margin in a range of 15.8% – 16.3%.”
Conference Call to Discuss Financial Results
Genpact management will host an hour-long conference call beginning at 4:30 p.m. ET on August 6, 2013 to discuss the company’s performance for the second quarter of 2013. To participate, callers can dial +1 877 703-6104 from within the U.S. or +1 857 244-7303 from any other country. Thereafter, callers will be prompted to enter the participant code, 90030810.
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 Genpact’s website, www.genpact.com, 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.
Key Financial Results – Second Quarter 2013
• Revenues were $534.8 million, up 14.4% from $467.6 million in the second quarter of 2012. Revenues from Global Clients were up 19.8%, and business process management revenues from Global Clients were up 18.1%.
• Income from operations was $78.0 million, up 23.5% from $63.2 million in the second quarter of 2012.
• Net income attributable to Genpact Limited shareholders was $63.9 million, up 4.5% from $61.1 million in the second quarter of 2012. Net income margin for the second quarter of 2013 was 11.9%, compared to 13.1% in the second quarter of 2012.
• Diluted earnings per common share were $0.27, unchanged from the second quarter of 2012.
• Adjusted income from operations was $89.2 million, up 14.6% from $77.8 million in the second quarter of 2012.
• Adjusted income from operations margin was 16.7%, up from 16.6% in the second quarter of 2012.
• Adjusted diluted earnings per share were $0.32, unchanged from the second quarter of 2012.
N.V. ‘Tiger’ Tyagarajan, Genpact's president and CEO said, “Continuing our momentum in 2013, in the second quarter Genpact delivered strong growth in revenues and adjusted operating income, as well as solid cash flows from operations. Our results demonstrate that the key elements of our growth strategy are resonating with the marketplace. With an increasingly targeted focus on the most promising industry verticals and solutions that integrate process, technology and analytics, we are unlocking innovation, driving client loyalty and strengthening our foundation for long-term sustainable growth.”
Revenues from Global Clients grew 19.8% over the second quarter of 2012. Business process management revenues from Global Clients grew by 18.1%, led by growth in Banking and Financial Services, Consumer Packaged Goods, Life Sciences and Healthcare and Business Services. Revenues from Global Clients represented approximately 77.3% of Genpact's total revenues, or $413.2 million, with the remaining 22.7% of revenues, or $121.6 million, coming from GE. GE revenues decreased 0.9% from the second quarter of 2012, adjusted for dispositions by GE of businesses that Genpact continues to serve.
In the 12 months ending June 30, 2013, 55 client relationships each contributed revenues of $5 – $15 million, up from 41 such relationships as of June 30, 2012, 14 client relationships each contributed revenues of $15 – $25 million, up from 11 such relationships as of June 30, 2012 and 12 client relationships each contributed revenues of $25 million or more, up from 10 such client relationships as of June 30, 2012.
75.1% of Genpact's revenues for the quarter came from business process management services, compared to 76.5% in the second quarter of 2012. Revenues from IT services were 24.9% of total revenues for the quarter, up from 23.5% in the second quarter of 2012.
Genpact generated $76.1 million of cash from operations in the quarter, compared to $127.2 million (including approximately $45 million from an up-front client payment) in the second quarter of 2012. Genpact had approximately $535.9 million in cash and cash equivalents and short term deposits as of June 30, 2013.
As of June 30, 2013, Genpact had approximately 60,200 employees worldwide, up from approximately 58,600 as of June 30, 2012. Genpact's employee attrition rate for the quarter was approximately 27%, measured from the first day of employment, compared to 25% for the same period in 2012. Annualized revenue per employee for the quarter was $36,700, up from $33,900 for the three months ended June 30, 2012.
Year-to-Date Results
• Revenues were $1.039 billion, up 15.0% from $903.1 million for the six months ended June 30, 2012.
• Income from operations was $151.9 million, up 22.9% from $123.6 million in the six months ended June 30, 2012.
• Net income attributable to Genpact Limited shareholders was $110.6 million, up from $99.6 million for the six months ended June 30, 2012; net income margin was 10.6%, compared to 11.0% for the six months ended June 30, 2012.
• Diluted earnings per common share were $0.47, up from $0.44 for the six months ended June 30, 2012.
• Adjusted income from operations was $171.9 million, up 15.1% from $149.4 million for the six months ended June 30, 2012.
• Adjusted income from operations margin was 16.6%, up from 16.5% for the six months ended June 30, 2012.
• Adjusted diluted earnings per share were $0.55, up from $0.53 for the six months ended June 30, 2012.
Genpact's employee attrition rate for the six months ended June 30, 2013 was 25%, measured from the first day of employment, compared to 24% for the same period in 2012. Annualized revenue per employee for the six months ended June 30, 2013 was $35,600, up from $33,400 for the six months ended June 30, 2012.
2013 Outlook
Tyagarajan continued, “The macro environment continues to be mixed: challenging for some industries and geographies, improving in others. Our pipeline is healthy and stable, with a significant uptick in larger, transformative deals. Large, transformational engagements are where we want to be, but they are complex and do have a longer decision cycle time. As a result of these longer cycle times, together with more subdued GE revenues, we now expect revenues for the full year 2013 to be in the lower half of our range of $2.15 – $2.20 billion. We continue to expect adjusted operating income margin in a range of 15.8% – 16.3%.”
Conference Call to Discuss Financial Results
Genpact management will host an hour-long conference call beginning at 4:30 p.m. ET on August 6, 2013 to discuss the company’s performance for the second quarter of 2013. To participate, callers can dial +1 877 703-6104 from within the U.S. or +1 857 244-7303 from any other country. Thereafter, callers will be prompted to enter the participant code, 90030810.
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 Genpact’s website, www.genpact.com, 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.