Business transformation services company Genpact (NYSE: G) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 6.6% year on year to $1.29 billion. Guidance for next quarter’s revenue was better than expected at $1.30 billion at the midpoint, 1.2% above analysts’ estimates. Its non-GAAP profit of $0.97 per share was 8% above analysts’ consensus estimates.
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Genpact (G) Q3 CY2025 Highlights:
- Revenue: $1.29 billion vs analyst estimates of $1.27 billion (6.6% year-on-year growth, 2% beat)
- Adjusted EPS: $0.97 vs analyst estimates of $0.90 (8% beat)
- Adjusted EBITDA: $255.1 million vs analyst estimates of $235.7 million (19.8% margin, 8.2% beat)
- Revenue Guidance for Q4 CY2025 is $1.30 billion at the midpoint, above analyst estimates of $1.29 billion
- Management raised its full-year Adjusted EPS guidance to $3.61 at the midpoint, a 1.7% increase
- Operating Margin: 14.8%, in line with the same quarter last year
- Constant Currency Revenue rose 6% year on year, in line with the same quarter last year
- Market Capitalization: $6.69 billion
StockStory’s Take
Genpact’s third quarter results were well received by the market, underpinned by strong performance in its Advanced Technology Solutions segment and consistent execution of its GenpactNext strategy. Management cited accelerating adoption of AI-driven offerings and successful expansion with both new and existing clients as key growth drivers. CEO Balkrishan Kalra highlighted the increasing contribution of high-margin advanced technology contracts, noting, “Growth in Advanced Technology Solutions continues to accelerate…reflecting strong momentum as we successfully execute on GenpactNext.” The company also reported improvements in gross margin and revenue per head count, especially within the technology segment.
Looking ahead, Genpact’s raised guidance reflects management’s expectation that demand for AI-led transformation and agentic operations will continue to drive momentum. CEO Kalra pointed to a robust pipeline and expanding partnerships, stating, “We are incredibly excited about the future. Genpact is proving to be a clear partner of choice for AI-driven transformation.” The company anticipates continued margin improvement as the mix shifts toward higher-value, recurring software and subscription models, and as clients increasingly transition core business processes to advanced technology platforms. Management also emphasized ongoing investments in AI talent and go-to-market initiatives to support future growth.
Key Insights from Management’s Remarks
Management attributed the quarter’s outperformance to rapid growth in advanced technology contracts, higher-margin deals, and the continued success of its GenpactNext strategy.
- Advanced Technology Solutions acceleration: Revenue in this segment grew at a double-digit pace, driven by strong adoption of AI, data, and agentic solutions. Management noted that over half of total revenue growth now comes from these offerings, supported by rising demand from both new and existing clients.
- Product innovation and launches: The company introduced several new AI-driven products, including the AI Maestro platform for streamlined AI adoption in business processes, and agentic suites targeting insurance and finance operations. These launches are designed to increase touchless processing and deliver measurable returns for clients.
- Growing pipeline and large deals: Genpact closed five large contracts in the quarter—each over $50 million in value. Management emphasized that the deal pipeline expanded further, with a healthy mix of new clients and expanded relationships, particularly in advanced technology.
- Shift to subscription and outcome models: The company is transitioning away from traditional resource-based billing to subscription and consumption-based pricing, especially for software and agentic offerings. This shift supports higher gross margins and recurring revenue streams.
- Partnership and talent investments: Genpact reported a 56% increase in partner-related revenue year-over-year and continued to invest in AI talent, with a focus on experienced hires and upskilling existing staff to accelerate product development and delivery.
Drivers of Future Performance
Genpact expects continued high-single-digit growth, led by AI-driven solutions, subscription-based contracts, and increased client demand for business transformation.
- Demand for AI and agentic solutions: Management anticipates ongoing robust adoption of AI and agentic operations, with clients increasingly seeking trusted partners to implement complex technology in core processes. The company’s expertise in “last mile” delivery and process intelligence is seen as a key differentiator.
- Expansion of recurring revenue models: The strategic pivot to non-FTE, subscription, and outcome-based contracts is expected to drive margin improvement and revenue predictability. CFO Michael Weiner noted that these models allow for higher value capture and are gaining traction, especially in advanced technology solutions.
- Execution risks and client readiness: Management acknowledged that some customers are not yet prepared to adopt agentic operations due to data and process maturity gaps. The pace of adoption may vary, and successful execution depends on Genpact’s ability to help clients overcome these hurdles and maintain competitive differentiation in a consolidating industry.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will monitor (1) the pace of adoption and revenue contribution from new AI and agentic solutions, (2) progress in transitioning contracts to subscription and outcome-based models, and (3) continued expansion of strategic partnerships and large deal wins. The company’s ability to upskill talent and deliver measurable ROI for clients will also be key indicators of sustained momentum.
Genpact currently trades at $42.80, up from $38.37 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).
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