hSenid Business Solutions (HBS.N0000) Q2 2025 earnings summary

Executive summary

• Q2 FY2025 revenue reached LKR 421.5–422 million, up 5–5.3% year-over-year in LKR and 12.7–13% in USD constant currency terms, with 72–72.3% recurring revenue driven by ARR growth.

• Core Exit ARR reached USD 3.7 million, up 31–31.4% year-over-year; NRR and GRR both at or above 99%.

• PeoplesHR Cloud business saw 24.5% year-over-year growth in LKR and 33% in USD constant currency; recurring revenue share in this segment reached 80.2%.

• Net loss for the quarter was LKR 128.9–129 million, including LKR 23 million in forex losses from LKR appreciation.

• EBIT and EBITDA margins declined due to unfavorable FX movements, lower non-recurring/project revenues, and reduced new deal closures.

Financial highlights

• Normalized EBITDA margin declined to -17% from -9.6% in the previous quarter; gross profit margin at 44%.

• Group revenue for the quarter: LKR 421.5 million (up 5% year-over-year); six months: LKR 887.8 million (up 17%).

• Basic EPS for the quarter: LKR -0.46; cash and bank balances at period end: LKR 269.6–619 million.

• Net loss of LKR 128.9–129 million in Q2 FY25; FCFF margin at -46%.

• IPO fund utilization at 75%.

Outlook and guidance

• Larger milestone invoices expected in H2, especially from the Uganda project, are likely to boost revenues.

• Profitability targeted for Q4, with EBITDA breakeven expected in Q3; repricing and cost controls underway.

• Free cash flow margins targeted at 15% as annual invoicing increases.

• Focus on expanding PeoplesHR brand in APAC and strengthening sales execution.