Total revenue of $1.14 billion, Up
2%1,2
Digital
Operations services revenue of $636
million, Up 6%1
Data-Tech-AI
services revenue of $500 million,
Down 2%1,2
Diluted EPS of
$0.64, Up 25%; Adjusted Diluted
EPS3 of $0.76,
Up 1%
NEW
YORK, Nov. 8, 2023 /PRNewswire/ -- Genpact
Limited (NYSE: G), a global professional services firm focused on
delivering outcomes that transform businesses, today announced
financial results for the third quarter ended September 30, 2023.
"During the third quarter, we saw increasing pressure in
short-cycle advisory and other project work as clients remained
sharply focused on large transformation deals that prioritize cost
reductions. This resulted in total revenue below our
expectations. However, bookings remain strong and on pace to
grow at least 25% in 2023," said "Tiger" Tyagarajan, Genpact's
President and CEO. "In addition, we continue to make
significant progress in the use and deployment of generative AI, as
we move into live production environments with early demonstrated
results. This is leading to many new inflows as clients prepare to
embed large language models into their operations."
Key Financial Highlights – Third Quarter 2023
- Total revenue was $1.14 billion,
up 2% year-over-year, both on an as reported and constant currency
basis.1,2
- Revenue from Digital Operations services was $636 million, up 6% year-over-year, both on an as
reported and constant currency basis,1 representing 56%
of total revenue.
- Revenue from Data-Tech-AI services was $500 million, down 2% year-over-year, both on an
as reported and constant currency basis,1,2 representing
44% of total revenue.
- Net income was $118 million, up
23% year-over-year, with a corresponding margin of 10.4%.
- Income from operations was $166
million, up 27% year-over-year, with a corresponding margin
of 14.6%. Adjusted income from operations was $195 million, up 3% year-over-year, with a
corresponding margin of 17.2%.4,5
- Diluted earnings per share was $0.64, up 25% year-over-year, and adjusted
diluted earnings per share3 was $0.76, up 1% year-over-year.
- Cash generated from operations was $162
million, compared to $226
million in the third quarter of 2022.
__________________________
|
1 Both on an
as reported and constant currency basis. Revenue growth on a
constant currency basis is a non-GAAP measure and is calculated by
restating current-period activity using the prior fiscal period's
foreign currency exchange rates adjusted for hedging gains/losses
in such period.
|
2 Total
revenue and revenue from Data-Tech-AI services in the third quarter
of 2022 included $4 million of revenue associated with a business
previously classified as held for sale.
|
3 Adjusted
diluted earnings per share is a non-GAAP measure. A reconciliation
of GAAP diluted earnings per share to adjusted diluted earnings per
share is attached to this release.
|
4 Income
from operations and diluted earnings per share in the third quarter
of 2022 included a $21 million impairment charge as well as a $7
million loss on the sale of a business previously classified as
held for sale. These items were excluded from adjusted income from
operations and adjusted diluted earnings per share in the third
quarter of 2022.
|
5 Adjusted
income from operations and adjusted income from operations margin
are non-GAAP measures. Reconciliations of each of GAAP income
from operations and GAAP net income to adjusted income from
operations and GAAP income from operations margin and GAAP net
income margin to adjusted income from operations margin are
attached to this release. Adjusted income from operations margin in
the third quarter of 2022 was derived by adjusting total revenue to
exclude $4 million of revenue associated with a business previously
classified as held for sale.
|
Full Year 2023 Outlook
Genpact now expects:
- Total revenue of approximately $4.45
billion, up 2% year-over-year, or 2.5% year-over-year on a
constant currency basis, compared to the prior full-year outlook in
the range of $4.59 billion to
$4.64 billion, up 5.0% to 6.0%
year-over-year, or 5.5% to 6.5% on a constant currency
basis.1
- Adjusted income from operations margin6 of
approximately 17.0%, up from the prior expectation of 16.8%.
- Adjusted diluted EPS7 of $2.89 compared to the prior range of $2.91 to $2.94.
CEO Succession Announcement
In a separate press release issued today, Genpact announced
a leadership succession plan. "Tiger" Tyagarajan, President and
Chief Executive Officer, has informed the Board of Directors of his
intention to retire from the company, effective February 9, 2024. The company's Board has
appointed Balkrishan "BK" Kalra, Genpact's Global Business Leader,
Financial Services and Consumer & Healthcare, as Genpact's next
President and Chief Executive Officer, also effective February 9, 2024. Please refer to the CEO
Succession Announcement for complete details.
Conference Call to Discuss Financial Results
Genpact's management will host an hour-long conference call
beginning at 4:30 p.m. ET on
November 8, 2023 to discuss the
company's performance for the third quarter ended September 30, 2023. Those who wish to participate
can register here to receive a dial-in number and unique PIN
to access the call seamlessly. It is recommended callers join 10
minutes prior to the start of the event (although you may register
and dial in at any time during the call). A live webcast of
the call will also be made available on the Genpact Investor
Relations website at https://www.genpact.com/investors. For those
who cannot join the call live, a replay will be archived on the
Genpact website after the end of the call. A transcript of the call
will also be made available on the website.
____________________________
|
6 Adjusted
income from operations margin is a non-GAAP measure. A
reconciliation of the outlook for each of GAAP income from
operations margin and GAAP net income margin to adjusted income
from operations margin is attached to this release.
|
7 Adjusted
diluted earnings per share is a non-GAAP measure. A reconciliation
of the outlook for GAAP diluted earnings per share to adjusted
diluted earnings per share is attached to this release.
|
About Genpact
Genpact (NYSE: G) is a global professional services firm
delivering the outcomes that transform our clients' businesses and
shape their future. We're guided by our real-world experience
redesigning and running thousands of processes for hundreds of
global companies. Our clients – including many in the Global
Fortune 500 – partner with us for our unique ability to combine
deep industry and functional expertise, leading talent, and proven
methodologies to drive collaborative innovation that turns insights
into action and delivers outcomes at scale. We create lasting
competitive advantages for our clients and their customers, running
digitally enabled operations and applying our Data-Tech-AI services
to design, build, and transform their businesses. And we do it all
with purpose. From New York to
New Delhi and more than 30
countries in between, our 125,000+ team is passionate in its
relentless pursuit of a world that works better for people.
Safe Harbor
This press release contains certain statements concerning our
future growth prospects, including our outlook for 2023, financial
results and other 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 general economic conditions, any deterioration in the
global economic environment and its impact on our clients,
technological innovation, including AI technology and future uses
of generative AI and large language models, and our ability to
invest in new technologies and adapt to industry developments at
sufficient speed and scale, our ability to effectively price our
services and maintain pricing and employee utilization rates,
general inflationary pressures and our ability to share increased
costs with our clients, wage increases in locations in which we
have operations, our ability to attract and retain skilled
professionals, our ability to protect our and our clients' data
from security incidents or cyberattacks, the economic and other
impacts of geopolitical conflicts and any related sanctions and
other measures that have been or may be implemented or imposed in
response thereto, as well as any potential expansion or escalation
of existing conflicts or economic disruption beyond their current
scope, a slowdown in the economies and sectors in which our clients
operate, a slowdown in the business process outsourcing or
information technology services sectors, our ability to develop and
successfully execute our business strategies, the risks and
uncertainties arising from our past and future acquisitions, our
ability to convert bookings to revenues, our ability to manage
growth, factors which may impact our cost advantage, changes in tax
rates and tax legislation and other laws and regulations, risks and
uncertainties regarding fluctuations in our earnings, foreign
currency fluctuations, political, economic or business conditions
in countries in which we operate, including the withdrawal of the
United Kingdom from the European
Union, commonly known as Brexit, 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 and Quarterly
Reports on Form 10-Q. These filings are available at www.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 undertakes no obligation to update any
forward-looking statements that may be made from time to time by or
on behalf of Genpact.
Contacts
Investors
|
|
Roger Sachs,
CFA
|
|
|
+1 (203)
808-6725
|
|
|
roger.sachs@genpact.com
|
|
|
Media
|
|
Siya
Belliappa
+1 (718)
561-9843
siya.belliappa@genpact.com
|
GENPACT LIMITED AND
ITS SUBSIDIARIES
Consolidated Balance
Sheets (Unaudited) (In thousands, except per
share data and share count)
|
|
|
|
As of December
31,
2022
|
|
As of September
30,
2023
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
646,765
|
|
$
541,004
|
Accounts receivable,
net of allowance for credit losses of $20,442
and $20,493 as of December 31, 2022 and September 30, 2023,
respectively
|
|
994,755
|
|
1,054,491
|
Prepaid expenses and
other current assets
|
|
137,972
|
|
274,057
|
Total current
assets
|
|
$
1,779,492
|
|
$
1,869,552
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
180,758
|
|
179,678
|
Operating lease
right-of-use assets
|
|
198,366
|
|
176,663
|
Deferred tax
assets
|
|
135,483
|
|
137,606
|
Intangible assets,
net
|
|
89,715
|
|
61,805
|
Goodwill
|
|
1,684,196
|
|
1,677,804
|
Contract cost
assets
|
|
216,670
|
|
197,129
|
Other assets, net of
allowance for credit losses of $3,198 and $3,612 as of
December 31, 2022 and September 30, 2023, respectively
|
|
304,134
|
|
298,536
|
Total
assets
|
|
$
4,588,814
|
|
$
4,598,773
|
|
|
|
|
|
Liabilities and
equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Short-term
borrowings
|
|
$
151,000
|
|
$
55,000
|
Current portion of
long-term debt
|
|
26,136
|
|
26,149
|
Accounts
payable
|
|
35,809
|
|
26,659
|
Income taxes
payable
|
|
45,306
|
|
131,208
|
Accrued expenses and
other current liabilities
|
|
791,007
|
|
689,733
|
Operating leases
liability
|
|
54,063
|
|
50,209
|
Total current
liabilities
|
|
$
1,103,321
|
|
$
978,958
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
1,249,153
|
|
1,230,425
|
Operating leases
liability
|
|
190,398
|
|
159,019
|
Deferred tax
liabilities
|
|
4,176
|
|
3,815
|
Other
liabilities
|
|
215,608
|
|
217,103
|
Total
liabilities
|
|
$
2,762,656
|
|
$
2,589,320
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
Preferred shares, $0.01
par value, 250,000,000 authorized, none issued
|
|
—
|
|
—
|
Common shares, $0.01
par value, 500,000,000 authorized, 182,924,416
and 181,412,399 issued and outstanding as of December 31, 2022
and
September 30, 2023, respectively
|
|
1,823
|
|
1,809
|
Additional paid-in
capital
|
|
1,777,453
|
|
1,856,230
|
Retained
earnings
|
|
780,007
|
|
893,613
|
Accumulated other
comprehensive income (loss)
|
|
(733,125)
|
|
(742,199)
|
Total
equity
|
|
$
1,826,158
|
|
$
2,009,453
|
|
|
|
|
|
Total liabilities
and equity
|
|
$
4,588,814
|
|
$
4,598,773
|
GENPACT LIMITED AND
ITS SUBSIDIARIES
Consolidated Statements of
Income (Unaudited) (In thousands, except per
share data and share count)
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
Net revenues
|
|
$
1,111,037
|
|
$
1,135,792
|
|
$
3,268,627
|
|
$
3,330,635
|
Cost of
revenue
|
|
717,219
|
|
732,962
|
|
2,117,437
|
|
2,167,524
|
Gross
profit
|
|
$
393,818
|
|
$
402,830
|
|
$
1,151,190
|
|
$
1,163,111
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
231,436
|
|
229,731
|
|
701,828
|
|
675,642
|
Amortization of
acquired intangible assets
|
|
10,604
|
|
7,497
|
|
32,805
|
|
24,009
|
Other operating
(income) expense, net
|
|
20,937
|
|
(91)
|
|
42,157
|
|
(4,665)
|
Income from
operations
|
|
$
130,841
|
|
$
165,693
|
|
$
374,400
|
|
$
468,125
|
Foreign exchange gains
(losses), net
|
|
3,867
|
|
2,975
|
|
9,312
|
|
3,698
|
Interest income
(expense), net
|
|
(13,399)
|
|
(13,255)
|
|
(36,691)
|
|
(35,020)
|
Other income (expense),
net
|
|
(235)
|
|
(508)
|
|
(4,902)
|
|
6,947
|
Income before income
tax expense
|
|
$
121,074
|
|
$
154,905
|
|
$
342,119
|
|
$
443,750
|
Income tax
expense
|
|
25,231
|
|
37,312
|
|
78,427
|
|
103,804
|
Net
income
|
|
$
95,843
|
|
$
117,593
|
|
$
263,692
|
|
$
339,946
|
Earnings per common
share
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.52
|
|
$
0.65
|
|
$
1.43
|
|
$
1.86
|
Diluted
|
|
$
0.51
|
|
$
0.64
|
|
$
1.40
|
|
$
1.83
|
Weighted average number
of common shares
used in computing earnings per common share
|
|
|
|
|
|
|
|
|
Basic
|
|
183,312,013
|
|
181,399,897
|
|
184,456,047
|
|
182,808,518
|
Diluted
|
|
187,399,204
|
|
183,801,791
|
|
188,274,420
|
|
185,737,729
|
GENPACT LIMITED AND
ITS SUBSIDIARIES
Consolidated Statements of Cash
Flows (Unaudited) (In thousands)
|
|
|
|
Nine Months ended
September 30,
|
|
|
2022
|
|
2023
|
Operating
activities
|
|
|
|
|
Net income
|
|
$
263,692
|
|
$
339,946
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
68,169
|
|
54,410
|
Amortization of debt
issuance costs
|
|
1,825
|
|
1,473
|
Amortization of
acquired intangible assets
|
|
32,805
|
|
24,009
|
Write-down of
intangible assets and property, plant and equipment
|
|
1,377
|
|
—
|
Impairment charge on
intangible assets and goodwill held-for-sale
|
|
21,426
|
|
—
|
Write-down of operating
right-of-use assets and other assets
|
|
20,307
|
|
—
|
Loss on the sale of the
business classified as held for sale
|
|
—
|
|
802
|
Allowance for credit
losses
|
|
1,045
|
|
5,081
|
Unrealized loss on
revaluation of foreign currency asset/liabilities
|
|
2,150
|
|
1,283
|
Stock-based
compensation expense
|
|
54,894
|
|
63,850
|
Deferred tax
benefit
|
|
(7,655)
|
|
(7,092)
|
Others, net
|
|
323
|
|
1,512
|
Change in operating
assets and liabilities:
|
|
|
|
|
Increase in accounts
receivable
|
|
(121,038)
|
|
(73,400)
|
Increase in prepaid
expenses, other current assets, contract cost assets, operating
lease right-of-use assets and other
assets
|
|
(57,940)
|
|
(110,227)
|
Increase (decrease) in
accounts payable
|
|
6,755
|
|
(9,196)
|
Decrease in accrued
expenses, other current liabilities, operating lease liabilities
and other liabilities
|
|
(132,524)
|
|
(80,694)
|
Increase in income
taxes payable
|
|
58,431
|
|
87,149
|
Net cash provided by
operating activities
|
|
$
214,042
|
|
$
298,906
|
Investing
activities
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
(35,312)
|
|
(37,330)
|
Payment for internally
generated intangible assets (including intangibles under
development)
|
|
(2,972)
|
|
(2,569)
|
Proceeds from sale of
property, plant and equipment
|
|
58
|
|
21
|
(Payment)/refund for
business acquisitions, net of cash acquired
|
|
973
|
|
(682)
|
Payment for divestiture
of business
|
|
—
|
|
(19,510)
|
Net cash used for
investing activities
|
|
$
(37,253)
|
|
$
(60,070)
|
Financing
activities
|
|
|
|
|
Repayment of finance
lease obligations
|
|
(10,305)
|
|
(9,168)
|
Repayment of long-term
debt
|
|
(375,500)
|
|
(19,875)
|
Proceeds from
short-term borrowings
|
|
250,000
|
|
148,000
|
Repayment of short-term
borrowings
|
|
(50,000)
|
|
(244,000)
|
Proceeds from issuance
of common shares under stock-based compensation plans
|
|
13,042
|
|
34,638
|
Payment for net
settlement of stock-based awards
|
|
(44,942)
|
|
(19,687)
|
Payment of earn-out
consideration
|
|
(2,437)
|
|
(2,399)
|
Dividend
paid
|
|
(68,942)
|
|
(75,230)
|
Payment for stock
repurchased and retired (including expenses related to stock
repurchased)
|
|
(182,092)
|
|
(150,548)
|
Net cash used for
financing activities
|
|
$
(471,176)
|
|
$
(338,269)
|
Net decrease in cash
and cash equivalents
|
|
(294,387)
|
|
(99,433)
|
Effect of exchange rate
changes
|
|
(86,391)
|
|
(6,328)
|
Cash and cash
equivalents at the beginning of the period
|
|
899,458
|
|
646,765
|
Cash and cash
equivalents at the end of the period
|
|
$
518,680
|
|
$
541,004
|
Supplementary
information
|
|
|
|
|
Cash paid during the
period for interest
|
|
$
30,430
|
|
$
31,551
|
Cash paid during the
period for income taxes, net of refund
|
|
$
114,343
|
|
$
123,395
|
Non-GAAP Financial Measures
To supplement the consolidated financial statements presented
in accordance with GAAP, this press release includes the following
non-GAAP financial measures:
- Adjusted income from operations;
- Adjusted income from operations margin;
- Adjusted diluted earnings per share; and
- Revenue growth on a constant currency basis.
These non-GAAP financial measures are not based on any
comprehensive set of accounting rules or principles and should not
be considered a substitute for, or superior to, financial measures
calculated in accordance with GAAP, and may be different from
non-GAAP financial measures used by other companies. Accordingly,
these non-GAAP financial measures, the financial statements
prepared in accordance with GAAP and the reconciliations of
Genpact's GAAP financial statements to such non-GAAP financial
measures should be carefully evaluated.
Given Genpact's acquisitions of varying scale and size, and
the difficulty in predicting expenses relating to acquisitions and
the amortization of acquired intangibles thereof, since
July 2012 Genpact's management has
used financial statements that exclude all acquisition-related
expenses and amortization of acquired intangibles for its internal
management reporting, budgeting and decision-making purposes,
including comparing Genpact's operating results to those of its
competitors. For the same reasons, since April 2016, Genpact's management has excluded the
impairment of acquired intangible assets from the financial
statements it uses for internal management purposes.
Acquisition-related expenses are excluded in the period in which an
acquisition is consummated. Genpact's management also uses
financial statements that exclude stock-based compensation expense.
Because of varying available valuation methodologies, subjective
assumptions and the variety of award types that companies can use
when adopting ASC 718 "Compensation-Stock Compensation," Genpact's
management believes that providing non-GAAP financial measures that
exclude such expenses allows investors to make additional
comparisons between Genpact's operating results and those of other
companies.
During the second quarter of 2022, Genpact (a) initiated
restructuring measures and, as a result, recorded a charge related
to i) right-of-use lease assets and other assets related to certain
abandoned leased office properties and ii) employee severance costs
resulting from a focused reduction in Genpact's workforce and (b)
approved a plan to divest a business that was no longer deemed
strategic. Given the specialized nature of this
business, we anticipated completing a transaction within twelve
months after the end of the second quarter of 2022, and therefore,
we classified the revenues and expenses related to this business as
held for sale with effect from April 1,
2022. During the first quarter of 2023, the Company
consummated this transaction and recorded a loss on the sale of the
business. During the second quarter of 2023, the Company terminated
a lease for office property which was fully impaired as part of a
restructuring in the second quarter of 2022, as discussed above,
and recorded a gain on such lease termination as restructuring
income in the second quarter of 2023. Genpact's management believes
that excluding these restructuring charges, the loss on the sale of
the business previously classified as held for sale, the revenues
and expenses associated with such business, and the gain on the
lease termination in calculating its non-GAAP financial measures
provides useful information to both management and investors
regarding the Company's financial performance and underlying
business trends. Additionally, in its calculations of non-GAAP
financial measures, Genpact's management has adjusted foreign
exchange gains and losses, interest income and expense and income
tax expenses from GAAP net income, and other income and expenses,
and certain gains from GAAP income from operations, because
management believes that the Company's results after taking into
account these adjustments more accurately reflect the Company's
ongoing operations. In its calculations of adjusted diluted
earnings per share, Genpact's management adds back stock-based
compensation expense, amortization and impairment of acquired
intangible assets, acquisition-related expenses and the related tax
impact of such adjustments from GAAP diluted earnings per share.
For the purpose of calculating adjusted diluted earnings per share,
the combined current and deferred tax effect is determined by
multiplying each pre-tax adjustment by the applicable statutory
income tax rate.
Genpact's management provides information about revenues on a
constant currency basis so that the revenues may be viewed without
the impact of foreign currency exchange rate fluctuations compared
to prior fiscal periods, thereby facilitating period-to-period
comparisons of the Company's true business performance. Revenue
growth on a constant currency basis is calculated by restating
current-period activity using the prior fiscal period's foreign
currency exchange rates adjusted for hedging gains/losses in such
period.
Accordingly, Genpact believes that the presentation of
adjusted income from operations, adjusted income from operations
margin, adjusted diluted earnings per share and revenue growth on a
constant currency basis, when read in conjunction with the
Company's reported results, can provide useful supplemental
information to investors and management regarding financial and
business trends relating to its financial condition and results of
operations.
A limitation of using adjusted income from operations and
adjusted income from operations margin versus income from
operations, income from operations margin, net income and net
income margin calculated in accordance with GAAP is that these
non-GAAP financial measures exclude certain recurring costs and
certain other charges, namely stock-based compensation expense and
amortization and impairment of acquired intangible assets.
Management compensates for this limitation by providing specific
information on the GAAP amounts excluded from adjusted income from
operations and adjusted income from operations margin.
The following tables show the reconciliation of these non-GAAP
financial measures to the most directly comparable GAAP measures
for the three and nine months ended September 30, 2022 and 2023:
Reconciliation of
Net Income/Margin to Adjusted Income from
Operations/Margin (In thousands)
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
Net income
|
|
$
95,843
|
|
$
117,593
|
|
$
263,692
|
|
$ 339,946
|
Foreign exchange
(gains) losses, net
|
|
(3,867)
|
|
(2,975)
|
|
(9,312)
|
|
(3,698)
|
Interest (income)
expense, net
|
|
13,399
|
|
13,255
|
|
36,691
|
|
35,020
|
Income tax
expense
|
|
25,231
|
|
37,312
|
|
78,427
|
|
103,804
|
Stock-based
compensation expense
|
|
19,202
|
|
22,314
|
|
54,894
|
|
63,850
|
Amortization and
impairment of acquired intangible assets
|
|
10,516
|
|
7,495
|
|
32,709
|
|
23,895
|
Restructuring (income)
expense
|
|
—
|
|
—
|
|
38,815
|
|
(4,874)
|
Operating loss from
the business classified as held for sale
|
|
7,069
|
|
—
|
|
14,291
|
|
1,201
|
Impairment charge on
assets classified as held for sale
|
|
21,426
|
|
—
|
|
21,426
|
|
—
|
Loss on the sale of
business classified as held for sale
|
|
—
|
|
—
|
|
—
|
|
802
|
Adjusted income from
operations
|
|
$ 188,819
|
|
$ 194,994
|
|
$ 531,633
|
|
$ 559,946
|
Net income
margin
|
|
8.6 %
|
|
10.4 %
|
|
8.1 %
|
|
10.2 %
|
Adjusted income from
operations margin
|
|
17.1 %
|
|
17.2 %
|
|
16.3 %
|
|
16.8 %
|
Reconciliation of
Income from Operations/Margin to Adjusted Income from
Operations/Margin (In thousands)
|
|
|
|
Three
months ended
September 30,
|
|
Nine months
ended
September 30,
|
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
Income from
operations
|
|
$
130,841
|
|
$
165,693
|
|
$
374,400
|
|
$
468,125
|
Stock-based
compensation expense
|
|
19,202
|
|
22,314
|
|
54,894
|
|
63,850
|
Amortization and
impairment of acquired intangible assets
|
|
10,516
|
|
7,495
|
|
32,709
|
|
23,895
|
Other income
(expense), net
|
|
(235)
|
|
(508)
|
|
(4,902)
|
|
6,947
|
Restructuring (income)
expense
|
|
—
|
|
—
|
|
38,815
|
|
(4,874)
|
Operating loss from
the business classified as held for sale
|
|
7,069
|
|
—
|
|
14,291
|
|
1,201
|
Impairment charge on
assets classified as held for sale
|
|
21,426
|
|
—
|
|
21,426
|
|
—
|
Loss on the sale of
business classified as held for sale
|
|
—
|
|
—
|
|
—
|
|
802
|
Adjusted income from
operations
|
|
$ 188,819
|
|
$ 194,994
|
|
$ 531,633
|
|
$ 559,946
|
Income from operations
margin
|
|
11.8 %
|
|
14.6 %
|
|
11.5 %
|
|
14.1 %
|
Adjusted income from
operations margin
|
|
17.1 %
|
|
17.2 %
|
|
16.3 %
|
|
16.8 %
|
Reconciliation of
Diluted EPS to Adjusted Diluted EPS8 (Per share
data)
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
|
2022
|
|
2023
|
|
2022
|
|
2023
|
Diluted EPS
|
|
$
0.51
|
|
$
0.64
|
|
$
1.40
|
|
$
1.83
|
Stock-based
compensation expense
|
|
0.10
|
|
0.12
|
|
0.29
|
|
0.34
|
Amortization and
impairment of acquired intangible assets
|
|
0.06
|
|
0.04
|
|
0.17
|
|
0.13
|
Restructuring (income)
expense
|
|
—
|
|
—
|
|
0.21
|
|
(0.03)
|
Operating loss from
the business classified as held for sale
|
|
0.04
|
|
—
|
|
0.08
|
|
0.01
|
Impairment charge on
assets classified as held for sale
|
|
0.11
|
|
—
|
|
0.11
|
|
—
|
Loss on the sale of
business classified as held for sale
|
|
—
|
|
—
|
|
—
|
|
0.00
|
Tax impact on
stock-based compensation expense
|
|
(0.02)
|
|
(0.03)
|
|
(0.08)
|
|
(0.10)
|
Tax impact on
amortization and impairment of acquired intangible
assets
|
|
(0.01)
|
|
(0.01)
|
|
(0.04)
|
|
(0.03)
|
Tax impact on
restructuring income (expense)
|
|
(0.03)
|
|
—
|
|
(0.08)
|
|
0.01
|
Tax impact on
operating loss from the business classified as held for
sale
|
|
(0.01)
|
|
—
|
|
(0.02)
|
|
(0.00)
|
Tax impact on loss on
the sale of business classified as held for sale
|
|
—
|
|
—
|
|
—
|
|
(0.00)
|
Adjusted diluted
EPS
|
|
$
0.75
|
|
$
0.76
|
|
$
2.04
|
|
$
2.16
|
______________________________
|
8 Due to
rounding, the numbers presented in this table may not add up
precisely to the totals provided.
|
The following tables show the reconciliation of forward-looking
non-GAAP financial measures to the most directly comparable GAAP
measures for the year ending December 31,
2023:
Reconciliation of
Outlook for Net Income Margin to Adjusted Income from Operations
Margin9
|
|
|
|
Year ending December
31, 2023
|
Net income
margin
|
|
10.1 %
|
Estimated foreign
exchange (gains) losses, net
|
|
(0.1) %
|
Estimated interest
(income) expense, net
|
|
1.1 %
|
Estimated income tax
expense
|
|
3.3 %
|
Estimated stock-based
compensation expense
|
|
1.9 %
|
Estimated amortization
and impairment of acquired intangible assets
|
|
0.7 %
|
Estimated
restructuring (income) expense
|
|
(0.1) %
|
Estimated operating
loss and loss on sale from the business classified as held for
sale
|
|
0.0 %
|
Adjusted income from
operations margin
|
|
17.0 %
|
Reconciliation of
Outlook for Income from Operations Margin to Adjusted Income
from Operations Margin9
|
|
|
|
Year ending December
31, 2023
|
Income from
operations margin
|
|
14.2 %
|
Estimated stock-based
compensation expense
|
|
1.9 %
|
Estimated amortization
and impairment of acquired intangible assets
|
|
0.7 %
|
Estimated other income
(expense), net
|
|
0.2 %
|
Estimated
restructuring (income) expense
|
|
(0.1) %
|
Estimated operating
loss and loss on sale from the business classified as held for
sale
|
|
0.0 %
|
Adjusted income from
operations margin
|
|
17.0 %
|
Reconciliation of
Outlook for Diluted EPS to Adjusted Diluted
EPS9 (Per share data)
|
|
|
|
Year ending December
31, 2023
|
|
|
Lower
|
Diluted
EPS
|
|
$
2.44
|
Estimated stock-based
compensation expense
|
|
0.47
|
Estimated amortization
and impairment of acquired intangible assets
|
|
0.17
|
Estimated
restructuring (income) expense
|
|
(0.02)
|
Estimated operating
loss and loss on sale from the business classified as held for
sale
|
|
0.01
|
Estimated tax impact
on stock-based compensation expense
|
|
(0.13)
|
Estimated tax impact
on amortization and impairment of acquired intangible
assets
|
|
(0.04)
|
Estimated tax impact
on restructuring income (expense)
|
|
0.00
|
Estimated tax impact
on operating loss and loss on sale from the business classified as
held for sale
|
|
(0.00)
|
Adjusted diluted
EPS
|
|
$
2.89
|
______________________________
|
9 Due to
rounding, the numbers presented in this table may not add up
precisely to the totals provided.
|
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SOURCE Genpact