Hexaware Technologies (HEXT) Q2 26/27 earnings summary

Executive summary

• Q2CY26 revenue reached $405.4M, up 4.4% QoQ and 6.1% YoY, with strong AI-led deal momentum and continued expansion into Colombia and GIFT City.

• EBIT margin improved to 13.6%, up 68 bps QoQ, with basic EPS at INR 5.41, despite EPS compression from hedge losses.

• Headcount increased for the third consecutive quarter, now at 34,506, with stable attrition and utilization metrics.

• Major ERP transition completed, now fully live for financial reporting and operational transformation.

• Strong deal wins in AI, legacy modernization, and outsourcing, with new AI-driven services launched monthly.

Financial highlights

• Q2CY26 revenue was $405.4M (+4.4% QoQ, +6.1% YoY); INR 38,452M (+6.4% QoQ, +17.9% YoY).

• EBIT margin at 13.6%, up 68 bps QoQ; reported profit $34.9M, margin 8.6%.

• EPS compressed by $8M in hedge and translation losses, expected to recede.

• Cash balance at June 30, 2026: $176M, after $105M in payouts including dividends, acquisitions, and incentives.

• DSO elevated due to ERP transition but expected to normalize; LTM OCF to PAT at 124.7%.

Outlook and guidance

• Revenue growth guidance for CY26 reduced to 6%-7% due to delayed deal ramps and macro headwinds, especially in Travel & Transportation.

• EBIT margin guidance reiterated at 13%-14%.

• Healthcare & Insurance, Banking, and Manufacturing & Consumer expected to lead growth; Travel & Transportation to lag.

• Management expects continued innovation-driven momentum and double-digit YoY growth by year-end.

• ERP go-live in Q2CY26 supports future margin expansion.