Q3 2025 Coforge Ltd Earnings Call Transcript
Key Points
- Coforge Ltd (BOM:532541) reported an exceptionally strong quarter with a sequential constant currency (CC) growth of 8.4% and a year-over-year (YoY) CC growth of 40.3%.
- The company closed four large deals during the quarter, contributing to a 12-month signed order book of USD 1.37 billion, up 40.1% from the previous year.
- Coforge Ltd achieved a significant expansion in EBITDA margins, with adjusted EBITDA increasing by 122 basis points sequentially.
- The integration of the Cigniti business has been successful, with its EBITDA margins jumping more than 600 basis points to 17.3%.
- The company has made substantial progress in becoming an AI-first organization, expanding its portfolio of AI and Gen AI service offerings to over 30 capabilities.
- The company faced headwinds due to furloughs, impacting margins by approximately 50 basis points in the current quarter.
- ESOP costs increased to 2.1% of revenue, up 130 basis points from the previous quarter, affecting EBITDA margins.
- Despite strong growth, the company reported a net cash position of only USD 30 million, with a working capital loan of USD 80 million.
- The integration and merger-related expenses are ongoing, with significant costs already incurred for audit, legal, and merchant banker fees.
- The company's utilization rate is at 81%, which is lower compared to peers operating at higher utilization levels, potentially impacting operational efficiency.
Ladies and gentlemen, good day, and welcome to the Coforge Limited Q3 FY 2025 earnings conference call. (Operator Instructions) This conference is being recorded.
(technical difficulty) Mr. John Speight, Chief Customer Success Officer; and Mr. Saurabh Goel, CFO. We will begin the call with opening remarks from the management team. And post that, we will open the floor for questions.
Before we begin, please note that some of the statements made in today's discussion relating to the future should be construed as forward-looking statement and may involve risks and uncertainties. Please refer to the disclaimer to this effect in the company's Q3 FY 2025 earnings press release.
With that, I now hand the call over to Mr. Sudhir Singh. Over to you, sir.
Thank you, Inba, and a very good morning, and a very good evening to you across the world, ladies and gentlemen. Thank you for joining us today as we share our quarter three performance and the business outlook.
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