Mphasis (526299) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue reached $421 million (₹35,361.46 million), up 2.4% sequentially and 5.4% year-over-year in constant currency, with broad-based growth across verticals and geographies.

• Net profit for Q2 FY25 was ₹4,233.32 million, up 8% year-over-year, with EPS at 22.4, up 4.6% sequentially and 7.7% year-over-year.

• AI-led transformation accelerated, with 35% of the deal pipeline now AI-driven and significant investments in platforms and acquisitions.

• Three large deals were won in Q2, with TCV wins at $207 million for the quarter and $526 million for the first half, and 88% of new TCV in new-gen services.

• Recognized with multiple industry awards, including NASSCOM AI Gamechangers and analyst leadership assessments.

Financial highlights

• Direct business contributed 96% of revenue, growing 2.4% sequentially and 6.2% year-over-year; U.S. direct revenue grew 8.4% year-over-year.

• Operating margin for Q2 FY25 was 15.4%, within the target band of 14.6% to 16%.

• EPS for Q2 FY25 was 22.4 INR, up from 21.4 INR in Q2 FY24.

• Cash flow from operations exceeded net profit, with cash and cash equivalents at ₹10,124.37 million as of September 2024.

• Top 10 accounts grew 2.1% sequentially; accounts ranked 11-30 grew 11.2% sequentially; new client revenue up 14.3% year-over-year.

Outlook and guidance

• Revenue guidance for FY25 maintained, with Q3 expected to reflect normal seasonality and BFS leading growth.

• EBIT margin guidance remains at 14.6%-16%, with confidence in operating within this range.

• Pipeline remains strong, up 23% year-over-year, with broad-based opportunities across verticals and geographies.

• Continued investment in strategic acquisitions and digital transformation to enhance capabilities.