What Happened?
Shares of business transformation services company Genpact (NYSE: G) jumped 14.5% in the afternoon session after it reported third-quarter financial results that surpassed Wall Street's expectations and raised its full-year earnings guidance.
The company's revenue for the quarter rose 6.6% year over year to $1.29 billion, while its adjusted earnings per share of $0.97 beat consensus estimates by 8%. Genpact also provided an optimistic outlook, with its fourth-quarter revenue forecast of $1.30 billion at the midpoint coming in ahead of expectations. Management further signaled its confidence by raising the full-year adjusted EPS guidance. However, it wasn't a perfect quarter, as adjusted EBITDA of $222.1 million came in below analyst projections. Overall, investors focused on the strong top- and bottom-line beats and the positive forecast.
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What Is The Market Telling Us
Genpact’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. Moves this big are rare for Genpact and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 4.6% on the news that the company reported second-quarter results that beat analyst expectations and raised its full-year financial guidance, fueling investor optimism.
The company posted second-quarter revenue of $1.25 billion and adjusted earnings per share (EPS) of $0.88, surpassing analysts' consensus estimates. The revenue figure represented a 6.6% increase year on year. Looking ahead, Genpact raised its full-year guidance for both revenue and profit, now expecting revenue of $5.01 billion and adjusted EPS of $3.55 at the midpoints. Despite a miss on adjusted EBITDA and a lower free cash flow margin compared to the previous year, the positive revenue and earnings performance, coupled with the improved outlook, drove the stock higher.
Genpact is up 2.3% since the beginning of the year, but at $43.98 per share, it is still trading 20.8% below its 52-week high of $55.54 from February 2025. Investors who bought $1,000 worth of Genpact’s shares 5 years ago would now be looking at an investment worth $1,100.
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