Happiest Minds Technologies (HAPPSTMNDS) Q2 24/25 earnings summary

Executive summary

• Achieved 28.2% constant currency revenue growth year-over-year in Q2 FY25, with 12.7% sequential growth, marking the best growth in two years; EBITDA margin at 21.7% and ROCE at 23.1%.

• Major business changes included acquisitions of PureSoftware and Aureus, creation of the Gen AI Business Unit (GBS), and restructuring into six industry groups.

• 97% of revenue is digital, 95% agile, with 281 active clients and 95% repeat business; strong performance across all geographies and verticals, especially BFSI and healthcare.

• Recognized among India's best workplaces and received multiple industry awards for innovation, diversity, and talent acquisition.

• Industry-leading net promoter score of 65, reflecting high customer satisfaction.

Financial highlights

• Q2 FY25 revenues at $62.4M (constant currency), up 12.7% QoQ and 28.2% YoY; total income ₹54,867 lakhs, up 12.1% QoQ and 27.9% YoY.

• EBITDA for Q2 FY25 was ₹11,882 lakhs (21.7% margin), up 1.8% QoQ and 13.4% YoY; PAT at ₹4,951 lakhs (9.0% margin), down 15.3% YoY due to acquisition-related charges.

• Operating margin for Q2 FY25 was 17.9%, down from 19.8% in Q1 FY25.

• Free cash flow conversion remained high at 97.7%–98.4% of EBITDA; cash on books at ₹14,700 lakhs.

• Interim dividend of ₹2.50 per share declared for FY25.

Outlook and guidance

• Revenue growth guidance for FY25 maintained at 30%–35%; EBITDA margin expected in the 20%–22% range.

• Q3 expected to be softer due to fewer working days and leadership pay increases; Q4 anticipated to be stronger with large deal closures.

• Focus on digital transformation, cloud, AI, and security services, with strong client retention and expansion in Fortune 2000/Forbes 200 clients.