Core Viewpoint - Genpact Limited (G) is identified as a potential stock pick due to a recent "golden cross" event, indicating a bullish breakout possibility [1] Technical Analysis - The "golden cross" occurred when G's 50-day simple moving average surpassed its 200-day simple moving average, a significant indicator of bullish momentum [1] - A successful golden cross involves three stages: a price decline bottoming out, the shorter moving average crossing above the longer one, and maintaining upward momentum [1] - G has experienced a 13.8% increase over the last four weeks, suggesting it may be on the verge of a breakout [1] Earnings Outlook - The company currently holds a 2 (Buy) rating on the Zacks Rank, reinforcing the bullish sentiment [1] - For the current quarter, there have been no cuts to earnings estimates, indicating a positive earnings outlook [1]

Core Insights - Genpact's Chief Financial Officer, Mike Weiner, will present at the Citi Global TMT Conference on September 4, 2024, at 3:00 p.m. Eastern Time [1] - The presentation will be available via live webcast on Genpact's Investor Relations website, with a replay accessible until September 5, 2025 [1] Company Overview - Genpact is a global professional services and solutions firm with over 125,000 employees across more than 30 countries [2] - The company focuses on delivering outcomes that shape the future, driven by curiosity, entrepreneurial agility, and a commitment to creating lasting value for clients [2] - Genpact serves and transforms leading enterprises, including those in the Fortune Global 500, leveraging deep business and industry knowledge, digital operations services, and expertise in data, technology, and AI [2]

Core Insights - Genpact (G) is currently rated as a 2 (Buy) by Zacks Rank and has an A for Value, indicating strong potential for investors [2] - The stock has a P/E ratio of 11.69, significantly lower than the industry average of 23.76, suggesting it may be undervalued [2] - Genpact's Forward P/E has fluctuated between 9.75 and 12.05 over the past year, with a median of 10.95, indicating stable valuation metrics [2] - The PEG ratio for Genpact is 1.48, compared to the industry average of 2.56, further supporting the notion of undervaluation [2] - The P/CF ratio for Genpact stands at 9.08, well below the industry average of 15.80, highlighting its strong cash flow outlook [3] - Overall, Genpact's financial metrics suggest it is an impressive value stock with a strong earnings outlook [3]

Core Insights - Genpact's shares have increased by 13.5% over the past month, reaching a new 52-week high of $38.37, and have gained 10.1% since the start of the year, outperforming the Zacks Business Services sector and the Zacks Outsourcing industry [1] Financial Performance - Genpact has consistently exceeded earnings expectations, reporting an EPS of $0.79 against a consensus estimate of $0.73 in its last earnings report on August 8, 2024, and beating revenue estimates by 2.64% [2] - For the current fiscal year, Genpact is projected to achieve earnings of $3.07 per share on revenues of $4.67 billion, reflecting a 3.02% increase in EPS and a 4.39% increase in revenues [2] - The next fiscal year forecasts earnings of $3.35 per share on $4.97 billion in revenues, indicating a year-over-year change of 9.07% in EPS and 6.3% in revenues [2] Valuation Metrics - Genpact's current valuation metrics show it trading at 12.5X current fiscal year EPS estimates, below the peer industry average of 16.7X, and at 12.2X on a trailing cash flow basis compared to the peer group's average of 12.5X [4] - The stock has a PEG ratio of 1.49, which does not place it among the top tier of stocks from a value perspective [4] Zacks Rank - Genpact holds a Zacks Rank of 2 (Buy), supported by rising earnings estimates, which aligns with the recommendation for investors to select stocks with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B [5] - The company has a Value Score of A, with Growth and Momentum Scores of B, resulting in a combined VGM Score of A, indicating strong potential for future performance [3][5]

Core Insights - Genpact Limited reported better-than-expected second-quarter 2024 results with an EPS of 79 cents, surpassing the consensus estimate by 8.2% and showing a year-over-year growth of 9.7% [1] - Revenues reached $1.18 billion, beating the consensus mark by 2.6% and increasing 6.4% from the previous year [1] Quarterly Performance Details - Data-Tech-AI services revenues, accounting for 46% of total revenues, increased 4% year over year to $546 million, exceeding the estimate of $508.8 million [2] - Digital Operations services revenues of $630 million (54% of total revenues) grew 9% year over year but missed the estimate of $637.2 million [2] - Adjusted income from operations was $198.4 million, reflecting a 7% year-over-year growth, with an adjusted operating income margin of 16.9%, up 10 basis points year over year [2] - Cash and cash equivalents at the end of the quarter were $914.2 million, a significant increase from $478.4 million in the previous quarter, while long-term debt rose to $1.2 billion from $818.3 million [2] Cash Flow and Shareholder Returns - The company generated $209 million in cash from operating activities, with capital expenditure at $19.3 million [3] - Genpact returned $27.3 million in dividends to shareholders and repurchased shares worth $63 million [3] Future Guidance - For Q3 2024, Genpact expects revenues between $1.18 billion and $1.186 billion, with gross margin and adjusted income from operating margin anticipated at around 35.4% and 17.2%, respectively [4] - For the full year 2024, the revenue forecast is between $4.656 billion and $4.701 billion, with adjusted EPS expected in the range of $3.14 to $3.18 [4] - Gross margin and adjusted income from operating margin for 2024 are anticipated to be around 35.3% and 17%, respectively [4]

Core Insights - Genpact has been recognized as a Leader in the HFS Research Supply Chain Services 2024 Horizon assessment for its innovation in supply chain strategy and technology [1][2] - The company is focusing on enhancing supply chain agility through advanced technologies and AI, enabling clients to make quick decisions and meet shifting consumer demands [2][3] Group 1: Company Recognition and Strategy - Genpact's service capability includes managing both forward and after-sales supply chain services through an outcome-driven model, potentially boosting client revenue by up to 45% [2] - The company has formed strategic partnerships with AWS and Salesforce to enhance its supply chain tools, emphasizing data management and predictive analytics for efficient operations [2][3] Group 2: Technological Innovation and Sustainability - Genpact is reshaping the supply chain management landscape with a circular supply chain vision and a commitment to sustainability [3] - The company is expanding its capabilities in real-time analytics and AI-driven decision-making, positioning itself as a leader in next-generation supply chain innovations [3]

Financial Performance - Net revenues for Q2 2024 reached $1,176,212, a 6.4% increase from $1,105,524 in Q2 2023[13] - Gross profit for the first half of 2024 was $812,856, up 6.9% from $760,281 in the same period last year[13] - Net income for the six months ended June 30, 2024, was $238,937, reflecting a 7.5% increase compared to $222,353 in 2023[13] - The company reported a diluted earnings per share of $0.67 for Q2 2024, compared to $0.63 in Q2 2023, indicating a 6.3% increase[13] - Operating expenses for the first half of 2024 were $474,673, up from $445,911 in the same period last year, reflecting a 6.5% increase[13] - Cash provided by operating activities increased to $183,713,000 in 2024 from $137,382,000 in 2023, reflecting a growth of 33.8%[31] Assets and Liabilities - Total assets increased to $5,178,265 as of June 30, 2024, up from $4,805,713 at the end of 2023, representing a growth of 7.7%[10] - Total liabilities rose to $2,840,506 as of June 30, 2024, compared to $2,557,321 at the end of 2023, marking an increase of 11.1%[10] - The company’s retained earnings increased to $1,176,459 as of June 30, 2024, from $1,085,209 at the end of 2023, a rise of 8.4%[10] - Total equity as of June 30, 2024, was $2,337,759,000, up from $2,248,392,000 as of January 1, 2024, indicating a growth of 4.0%[28] Cash and Cash Equivalents - Cash and cash equivalents increased significantly to $914,171 as of June 30, 2024, from $583,670 at the end of 2023, a growth of 56.7%[10] - Cash and cash equivalents at the end of the period increased to $914,171,000 from $491,308,000, representing an increase of 86.1%[31] Dividends - The company declared a dividend of $0.1525 per common share for Q2 2024, compared to $0.1375 in Q2 2023, representing an increase of 10.9%[24] - The company paid dividends of $54,829,000, which is an increase from $50,286,000 in the previous period, marking an increase of 9.9%[31] Stock and Share Repurchase - The company repurchased and retired 2,784,988 shares, resulting in a reduction of retained earnings by $92,602,000[28] - During the six months ended June 30, 2024, the company repurchased 2,784,988 common shares at a weighted average price of $33.26 per share, for an aggregate cash amount of $92,630[207] - The company has authorized repurchases of up to $2,250,000 under its existing share repurchase program[206] Employee Compensation and Benefits - The net defined benefit plan costs for the six months ended June 30, 2024, were $10,055, compared to $8,794 for the same period in 2023, reflecting an increase of approximately 14.3%[165] - Total contributions to defined contribution plans increased from $67,046 for the six months ended June 30, 2023, to $71,490 for the same period in 2024, a rise of about 6.6%[166] - Stock-based compensation expense decreased to $27,550,000 in 2024 from $41,536,000 in 2023, a reduction of 33.7%[31] - Stock-based compensation costs for the three months ended June 30, 2024, were $18,046, down from $21,344 for the same period in 2023, a decrease of approximately 15.5%[179] Revenue Recognition - The Company recognizes revenue primarily from business process management services, including analytics and consulting, on a time-and-material, transaction, or fixed-price basis[52] - Revenue from fixed-price contracts is recognized ratably over the term of the agreement, while revenues from time-and-materials and transaction-based contracts are recognized as services are provided[52] - Deferred revenue is recorded for process transition activities and recognized ratably over the period in which related services are performed[54] - The Company uses the input method to measure progress towards completion for performance obligations satisfied over time[58] Debt and Financing - As of June 30, 2024, the outstanding amount under the term loan was $489,167, with a maturity profile indicating a significant payment of $423,724 due in 2027[152] - The company had a total of $23,302 and $23,001 available in credit facilities as of December 31, 2023, and June 30, 2024, respectively, with $9,336 and $9,108 utilized[146] - The company was in compliance with the financial covenants of the 2022 Credit Agreement, maintaining a net debt to EBITDA leverage ratio of less than 3x and an interest coverage ratio of more than 3x as of June 30, 2024[150] - As of June 30, 2024, the total long-term debt increased to $1,633,528, up from $1,256,962 as of December 31, 2023, representing a growth of approximately 30%[158] Impairment and Allowance for Credit Losses - The allowance for credit losses increased to $12,638,000 in 2024 from $6,521,000 in 2023, reflecting a rise of 93.5%[31] - The company recorded a charge of $1,338 for credit losses on deferred billings for the three months ended June 30, 2024, compared to $147 for the same period in 2023[97] - The allowance for credit losses on accounts receivable decreased from $18,278 as of December 31, 2023, to $16,833 as of June 30, 2024[95] Business Strategy and Operations - The company divested a business in December 2022 as part of a strategy to focus on services with greater growth opportunities[130] - The Company adopted ASU No. 2023-01 regarding leasehold improvements effective January 1, 2024, with no material impact on consolidated results[90] - The Company is assessing the impact of ASU No. 2023-07 on segment reporting disclosures, effective for fiscal years beginning after December 15, 2023[93]

Core Insights - Genpact reported quarterly earnings of $0.79 per share, exceeding the Zacks Consensus Estimate of $0.73 per share, and showing an increase from $0.72 per share a year ago, representing an earnings surprise of 8.22% [1] - The company generated revenues of $1.18 billion for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 2.64% and up from $1.11 billion year-over-year [1] - Genpact has consistently outperformed consensus EPS estimates over the last four quarters, achieving this four times [1] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.78 on revenues of $1.16 billion, while for the current fiscal year, the estimate is $3.04 on revenues of $4.61 billion [4] - The estimate revisions trend for Genpact is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [4] Industry Context - The Outsourcing industry, to which Genpact belongs, is currently ranked in the bottom 29% of over 250 Zacks industries, which may negatively impact stock performance [5] - The performance of Genpact's stock may also be influenced by the broader industry outlook and trends in earnings estimate revisions [3][5]

Revenue Performance - Total revenue for Q2 2024 was $1.18 billion, representing a 6% year-over-year increase and a 7% increase on a constant currency basis[5]. - Data-Tech-AI revenue reached $546 million, up 4% year-over-year, accounting for 46% of total revenue[5]. - Digital Operations revenue was $630 million, up 9% year-over-year, representing 54% of total revenue[5]. - Net revenues for the three months ended June 30, 2024, increased to $1,176,212, up from $1,105,524 in 2023, representing a growth of approximately 6.4%[14]. Earnings and Profitability - Adjusted diluted earnings per share (EPS) was $0.79, reflecting a 10% year-over-year increase[5]. - Net income for Q2 2024 was $122 million, up 5% year-over-year, with a margin of 10.4%[5]. - Gross profit for Q2 2024 was $416 million, with a corresponding margin of 35.4%[5]. - Basic earnings per share for the three months ended June 30, 2024, increased to $0.68 from $0.63 in 2023, marking an increase of about 7.9%[14]. - Adjusted income from operations for the six months ended June 30, 2024, was $380,293, compared to $364,952 in 2023, indicating a growth of approximately 4.2%[25]. - The adjusted income from operations margin for the six months ended June 30, 2024, was 16.5%, slightly down from 16.6% in 2023[25]. Cash Flow and Financial Position - Cash flow from operations increased to $209 million, up from $171 million in Q2 2023[5]. - Net cash provided by operating activities for the six months ended June 30, 2024, was $183,713, up from $137,382 in 2023, representing a growth of approximately 33.8%[16]. - Cash and cash equivalents at the end of the period for June 30, 2024, were $914,171, compared to $491,308 at the end of June 30, 2023, showing a significant increase of about 86.1%[16]. Guidance and Projections - Genpact's updated full-year 2024 revenue guidance is between $4.656 billion and $4.701 billion, indicating a year-over-year growth of approximately 4.0% to 5.0%[7]. - The company anticipates adjusted diluted EPS in the range of $3.14 to $3.18, an increase from the previous range of $3.01 to $3.04[7]. - The company projects an adjusted income from operations margin of 17.0% for the year ending December 31, 2024[29]. - The outlook for diluted EPS in 2024 ranges from $2.69 to $2.72, with an adjusted diluted EPS forecasted between $3.14 and $3.18[32]. - For Q3 2024, the company anticipates a net income margin of 9.9% and an adjusted income from operations margin of 17.2%[33]. Share Repurchase and Other Financial Activities - Genpact repurchased approximately 1.9 million common shares for a total consideration of approximately $63 million at an average price of $32.63 per share[5]. - The company recorded a loss on the sale of a business classified as held for sale amounting to $802 during the six months ended June 30, 2023[16]. - The company experienced a foreign exchange loss of $3,291 for the six months ended June 30, 2024, compared to a loss of $723 in 2023[25]. - Estimated stock-based compensation expense for 2024 is projected at 1.5% of income from operations margin[30]. - The estimated amortization and impairment of acquired intangible assets for 2024 is projected at 0.6%[30].

Core Insights - Genpact Limited reported total revenue of $1.18 billion for Q2 2024, reflecting a 6% increase year-over-year, or 7% on a constant currency basis [1][2] - The company achieved a diluted EPS of $0.67, up 6% year-over-year, and an adjusted diluted EPS of $0.79, up 10% [1][2] - Genpact raised its earnings expectations for the year following strong performance in the first half [1] Financial Performance - Total revenue for Q2 2024 was $1.18 billion, a 6% increase year-over-year, with Data-Tech-AI revenue at $546 million (up 4%) and Digital Operations revenue at $630 million (up 9%) [2] - Gross profit reached $416 million, up 7% year-over-year, with a gross margin of 35.4% [2] - Net income was $122 million, up 5% year-over-year, with a net income margin of 10.4% [2] - Cash flow from operations increased to $209 million, up from $171 million in Q2 2023 [2] Outlook - For Q3 2024, Genpact expects total revenue between $1.180 billion and $1.186 billion, representing year-over-year growth of approximately 3.9% to 4.4% [3] - The full-year 2024 revenue outlook is revised to a range of $4.656 billion to $4.701 billion, indicating a growth of approximately 4.0% to 5.0% [3] - Adjusted diluted EPS for the full year is projected to be between $3.14 and $3.18, an increase from the previous range of $3.01 to $3.04 [3]