Genpact (G, Financial) has announced the successful acquisition of XponentL Data, a provider specializing in data products and artificial intelligence solutions. This strategic move aims to bolster Genpact's focus on data, AI, and cutting-edge technologies, enhancing their ability to guide clients through the complete AI transformation journey, from strategic planning to execution.
With this acquisition, Genpact gains access to XponentL's unique domain-led data strategy, design, and engineering expertise, as well as their extensive industry knowledge and strategic partnerships. The integration of these capabilities is expected to strengthen Genpact's ability to help clients leverage data effectively and deploy AI solutions efficiently.
Genpact's President and CEO, Balkrishan 'BK' Kalra, emphasized the importance of rapid AI deployment supported by strong data foundations. He noted that the acquisition aligns with Genpact's ongoing commitment to delivering innovative solutions that enhance client value. The transaction was finalized on June 5, 2025, although financial terms were not disclosed.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 9 analysts, the average target price for Genpact Ltd (G, Financial) is $51.92 with a high estimate of $56.00 and a low estimate of $48.00. The average target implies an upside of 23.32% from the current price of $42.10. More detailed estimate data can be found on the Genpact Ltd (G) Forecast page.
Based on the consensus recommendation from 11 brokerage firms, Genpact Ltd's (G, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Genpact Ltd (G, Financial) in one year is $47.14, suggesting a upside of 11.97% from the current price of $42.1. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Genpact Ltd (G) Summary page.
G Key Business Developments
Release Date: May 07, 2025
- Total Revenue: $1.215 billion in Q1, up 8.3% year-over-year in constant currency.
- Adjusted EPS: $0.84, a 16% increase year-over-year.
- Gross Margin: Expanded by 30 basis points to 35.3%.
- Adjusted Operating Income Margin: Expanded 120 basis points to 17.3%.
- Net Income: $131 million.
- Operating Cash Flow: Improved to $40 million from a $26 million outflow in the prior year.
- Cash and Cash Equivalents: $562 million, up from $478 million a year ago.
- Data-Tech and AI Revenue: $582 million, up 11% year-over-year, representing 48% of total revenue.
- Digital Operations Revenue: $633 million, up 4% year-over-year, representing 52% of total revenue.
- SG&A Expenses: 19.8% of revenue, down from 20.8% in the prior year.
- Shareholder Returns: $93 million returned through $63 million in share repurchases and $30 million in dividends.
- Full Year Revenue Guidance: $4.862 billion to $5.005 billion, growth of 2% to 5%.
- Full Year Adjusted EPS Guidance: $3.41 to $3.52, representing 5.7% growth at the midpoint.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Genpact Ltd (G, Financial) reported a strong Q1 2025 with total revenues of $1.215 billion, up 8.3% year-over-year in constant currency, exceeding the high end of their guidance range.
- Adjusted EPS grew 16% year-over-year, reaching $0.84, which was $0.04 above the high end of their range.
- The company signed two large deals in Q1, with over 80% of associated revenue accounted for as data AI revenue, reflecting their successful pivot to advanced technologies.
- Genpact's pipeline is at an all-time high, indicating strong long-term demand and increased focus on cost optimization and transformation for clients.
- Partner-related revenues increased by 80% year-over-year, representing a significant ongoing opportunity for Genpact Ltd (G).
Negative Points
- Several large deals were delayed due to supply chain and tariff-related uncertainties, leading to a more conservative approach in revenue guidance.
- The company widened its guidance range and lowered total revenue expectations to reflect slower cycle times and increased uncertainty in certain industries.
- Despite strong demand, Genpact Ltd (G) reduced its digital operations and data-tech AI outlook due to delays in large deals.
- The operating environment has changed significantly, with increased caution in buying behavior, particularly in markets sensitive to global trade.
- There is a notable increase in uncertainty affecting revenue timing for future quarters, particularly impacting digital operations.
