Coforge (COFORGE) Q3 24/25 earnings summary

Executive summary

• Q3 FY25 delivered exceptional results with 8.4% sequential and up to 42.8% YOY revenue growth, reaching $397.1 million (INR 33,182 million), outperforming seasonal trends.

• Cigniti business fully integrated, contributing to revenue and margin expansion; Cigniti EBITDA margin rose to 17.3% from 11% three quarters ago.

• Four large deals closed, 14 new client logos added, boosting the 12-month signed order book to $1.37 billion, up 40.1% YOY.

• Board approved the amalgamation of Cigniti with a share swap ratio of 1:5, effective April 1, 2025, and announced the acquisition of Xceltrait Inc. for $17.85 million.

• Interim dividend of Rs. 19 per share declared, with record date January 30, 2025.

Financial highlights

• Q3 revenue reached $397.1 million (INR 33,182 million), up 40.3% YOY in CC, 40.8% in USD, and 42.8% in INR.

• Adjusted EBITDA was $70.5 million (INR 5,890 million), up 15.4% sequentially and 41.2% YOY; margin at 17.8%, up 122 bps sequentially.

• Consolidated net profit for Q3 FY25 was INR 2,669 million, with adjusted PAT at INR 2,680 million, up 10.3% YOY.

• Operating cash flow for Q3 was $47 million, up from $33.5 million YOY; cash and bank balances at $110 million, net cash position of $30 million.

• Basic EPS (INR) at 32.3, adjusted basic EPS at 40.1 for Q3FY25; interim dividend of Rs. 19 per share.

Outlook and guidance

• Management expects robust and sustained growth, supported by a strong deal pipeline and a 40% higher YOY order book.

• Margin expansion at Cigniti seen as a preview of further improvements; cross-sell synergies expected in Q4 or Q1 next year.

• High repeat business at 94.5% in Q3FY25; results not directly comparable to prior year due to Cigniti acquisition.