Second Quarter Revenues of $467.6 Million, Up 18%
Adjusted Income from Operations of $77.8 Million, Up 19%
Net Income of $61.1 Million, Up 57%
NEW YORK, August 1, 2012 – 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, 2012. Genpact also announced that it expects to pay a special cash dividend to all shareholders of $2.24 per common share, or approximately $500 million in total.
Key Financial Results – Second Quarter 2012
- Revenues were $467.6 million, up 17.6% from $397.6 million in the second quarter of 2011, primarily driven by growth in revenues from Global Clients. Business process management and technology services revenues from Global Clients were up 19.8% and 38.4% respectively.
- Net income attributable to Genpact Limited shareholders was $61.1 million, up 56.6% from $39.0 million in the second quarter of 2011; net income margin for the second quarter of 2012 was 13.1%, up from 9.8% in the second quarter of 2011.
- Diluted earnings per common share were $0.27, up 55.4% from $0.17 in the second quarter of 2011.
- Adjusted income from operations was $77.8 million, up 19.2% from $65.3 million in the second quarter of 2011.
- Adjusted income from operations margin was 16.6%, up from 16.4% in the second quarter of 2011.
- Adjusted diluted earnings per share were $0.32, up 46.0% from $0.22 in the second quarter of 2011.
N.V. "Tiger" Tyagarajan, Genpact's president and CEO said, "Genpact had another great quarter, with strong growth in revenues, adjusted operating income, net income and EPS. In addition to the 17.6% year-over-year revenue growth, our revenues grew 7.4% sequentially. Revenue growth was broad based across all our geographies, including Europe, and all major service lines including finance and accounting. We established 35 new client relationships this quarter across all major industry groups, up from 26 in the second quarter of 2011. Our results continue the momentum we have had since the beginning of 2011."
Revenues from Global Clients grew 24.0% over the second quarter of 2011. Revenues from Global Clients now represent approximately 73.0% of Genpact's total revenues, with the remaining 27.0% of revenues, or $126.2 million, coming from GE. GE revenues increased 3.2% from the second quarter of 2011, adjusted for dispositions by GE.
As of June 30, 2012, 62 client relationships each contributed revenues of $5 million or more in the preceding twelve months, up from 56 such relationships as of June 30, 2011. As of June 30, 2012, ten client relationships each contributed revenues of $25 million or more in the preceding twelve months, up from eight such client relationships as of June 30, 2011.
Approximately 76.0% of Genpact's revenues for the quarter came from business process management services, compared to 78.1% for the second quarter of 2011. Revenues from IT services were approximately 24.0% of total revenues for the second quarter of 2012, up from 21.9% for the second quarter of 2011.
Genpact generated $127.2 million of cash from operations in the second quarter of 2012, up from $60.9 million in the second quarter of 2011. Genpact had approximately $441.6 million in cash and cash equivalents and short term deposits as of June 30, 2012.
- Revenues were $903.1 million, up 24.0% from $728.2 million for the six months ended June 30, 2011.
- Net income attributable to Genpact Limited shareholders was $99.6 million, up 32.6% from $75.1 million for the six months ended June 30, 2011; net income margin was 11.0%, up from 10.3% for the six months ended June 30, 2011.
- Diluted earnings per common share were $0.44, up 31.6% from $0.33 for the six months ended June 30, 2011.
- Adjusted income from operations was $149.4 million, up 28.2% from $116.5 million for the six months ended June 30, 2011.
- Adjusted income from operations margin was 16.5%, up from 16.0% for the six months ended June 30, 2011.
- Adjusted diluted earnings per share were $0.53, up 32.1% from $0.40 for the six months ended June 30, 2011.
Genpact's employee attrition rate for the six months ended June 30, 2012 was 24%, measured from day one of employment, down from 29% for the same period in 2011. Annualized revenue per employee for the six months ended June 30, 2012, was $33,400, compared to $34,500 for the six months ended June 30, 2011.
Special Dividend Announced
Genpact expects to pay a special cash dividend to all shareholders of $2.24 per common share, or approximately $500 million in the aggregate. The dividend will be funded through a combination of balance sheet cash and incremental debt expected to be raised from institutional lenders. Genpact expects to establish and announce the record date, ex-dividend date and payment date for the special dividend during August and to pay the dividend by the end of the third quarter. Declaration and payment of the dividend is subject to the receipt of financing by Genpact on satisfactory terms.
Tyagarajan commented, "The management team regularly reviews our capital structure with the Board of Directors. We generate substantial operating and free cash flow, have approximately $442 million of cash on our balance sheet and, taking into account the financial flexibility needed to continue to pursue acquisitions and organic growth initiatives, we concluded that a special dividend, funded in part by additional, modest leverage, would enhance shareholder value."
Tyagarajan continued, "We have delivered a terrific first half of the year, despite some softness around discretionary spending. In an uncertain macro-environment, we continue to expect full-year revenues to be in a range of $1.86 – $1.90 billion, and adjusted operating income margin in a range of 16% – 16.5%."
Conference Call to Discuss Financial Results
Genpact management will host an hour-long conference call beginning at 8:00 a.m. ET on August 2, 2012 to discuss the company's performance for the second quarter of fiscal 2012. To participate, callers can dial +1 800-299-8538 from within the U.S. or +1 617-786-2902 from any other country. Thereafter, callers will be prompted to enter the participant code, 79250959.
For those who cannot participate in the call, a replay and podcast will be available on Genpact's website, genpact.com, after the end of the call. A transcript of the call will also be made available on Genpact's website.
Genpact Limited (NYSE: G), a global leader in business process management and technology services, leverages the power of smarter processes, smarter analytics and smarter technology to help its clients drive intelligence across their enterprise. Genpact's Smart Enterprise Processes (SEPSM) framework, its unique science of process combined with deep domain expertise in multiple industry verticals, leads to superior business outcomes. Genpact's Smart Decision Services deliver valuable business insights to its clients through targeted analytics, reengineering expertise, and advanced risk management. Making technology more intelligent by embedding it with process and data insights, Genpact also offers a wide range of technology services. Driven by a passion for process innovation and operational excellence built on its Lean and Six Sigma DNA and the legacy of serving GE for more than 15 years, the company's 58,500+ professionals around the globe deliver services to its more than 600 clients from a network of 70 delivery centers across 18 countries supporting more than 30 languages. Follow Genpact on Twitter, Facebook and LinkedIn
This press release contains certain statements concerning our future growth prospects and 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 our ability to obtain the financing required to pay the special cash dividend and the terms of the financing, the likelihood and timing of the payment of the special cash dividend, a slowdown in the economies and sectors in which our clients operate, a slowdown in the business process management and information technology services sectors, the risks and uncertainties arising from our past and future acquisitions, our ability to manage growth, factors which may impact our cost advantage, wage increases, changes in tax rates and tax legislation, our ability to attract and retain skilled professionals, risks and uncertainties regarding fluctuations in our earnings, general economic conditions affecting our industry 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. These filings are available at 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 does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of Genpact.
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