Hexaware Technologies (HEXT) Q1 25/26 earnings summary

Executive summary

• Q1CY25 revenue reached $371.5 million, up 12.5% YoY in USD and 16.7% in INR, with flat sequential growth and 1.7% QoQ INR growth.

• EBITDA margin improved to 16.7%, up 117 bps YoY and 41 bps QoQ, with EPS up 16.7% YoY.

• Healthy cash balance of $225 million (₹19,087M), debt-free, and a dividend of $40 million (₹5.75/share) declared post-quarter.

• Closing headcount was 31,564, with voluntary IT attrition at 11.2% and utilization at 82.1%; net headcount declined due to BPS reduction.

• NPS score of 67, 27 points above industry median, with three clients above $75M and one above $100M.

Financial highlights

• Revenue grew 12.4% YoY in reporting currency and 12.7% in constant currency; INR revenue was ₹32,079M, up 16.7% YoY.

• EBITDA margin improved by 40 bps QoQ to 16.7%, with adjusted EBITDA margin at 17.0%.

• Net profit margin was 10.3%, up 15 bps YoY; basic EPS was ₹5.38, up 16.7% YoY.

• Operating cash flow for Q1CY25 was ₹13,478M, with LTM OCF to adjusted EBITDA at 61.9%.

• DSO (billed + unbilled) at 75 days, with target 70-72 days by year-end.

Outlook and guidance

• Q2 expected to deliver reasonable growth, with Q3 and Q4 anticipated to accelerate as client headwinds subside.

• Two major consolidation deals to ramp up from Q2, contributing $45–65M incremental annual revenue from CY26.

• Banking and Financial Services expected to lead growth; Manufacturing & Consumer and MNC verticals to remain weak.

• EBITDA margin guidance for FY/CY25 at 17.1%-17.4%, with ERP costs ending in June.

• Plan to hire 1,800–2,000 IT professionals in Q2 to support Q3 ramp.