Firstsource Solutions (FSL) Q1 24/25 earnings summary

Executive summary

• Achieved record Q1 FY25 revenue of ₹17,911 million ($215 million), up 17.1% year-over-year and 6.5% sequentially in constant currency, with EBIT at ₹1,970 million (11.0% margin) and PAT at ₹1,353 million (7.6% margin).

• Diluted EPS increased to ₹1.92, compared to ₹1.80 in Q1FY24 and ₹1.90 in Q4FY24.

• Growth was broad-based across verticals, with three large deals signed and 10 new clients added, including major healthcare and SaaS clients.

• Raised FY25 constant currency revenue growth guidance to 11.5%-13.5%, up from 10%-13%.

• EBIT margin remained stable at 11%, within the guided 11%-12% band, despite ongoing investments.

Financial highlights

• Revenue: ₹17,911 million ($215 million), up 17.1% YoY in rupee terms and 15.4% YoY in USD.

• EBIT margin: 11%, stable QoQ, down 70 bps YoY.

• Net profit: ₹1,353 million, representing 7.6% of revenue.

• DSO increased to 68 days due to delayed collections, normalized to 61 days post-quarter.

• Net debt rose to ₹9,700 million, mainly from working capital needs and QBSS acquisition payment.

Outlook and guidance

• FY25 revenue growth expected at 11.5%-13.5% in constant currency, above initial guidance.

• EBIT margin guidance maintained at 11%-12% for FY25, with medium-term improvement of 50-75 bps annually post-investment phase.

• Targeting $1 billion revenue run rate by Q4 FY26.

• Management expects continued downward attrition trends and a robust deal pipeline.