Persistent Systems (PERSISTENT) Q1 24/25 earnings summary

Executive summary

• Achieved 17th consecutive quarter of sequential revenue growth, with Q1 FY25 revenue at $328.2 million (₹26,913.96 million), up 16% YoY and 5.6% QoQ, driven by innovation, AI-led services, and internal US reorganization.

• EBIT margin for Q1 FY25 was 14%, with profit after tax at ₹3,064.2 million, and net profit at ₹2,479.41 million; EPS at ₹20.10.

• Strategic initiatives included acquisition of Starfish Associates, partnerships with Google Cloud and Snowflake, and launch of iAURA AI-powered data solutions.

• Leadership changes: Vinit Teredesai appointed CFO, Ms. Anjali Joshi as Independent Director, and founder received ACM Presidential Award.

• Discontinued Long-Term Service Award policy, resulting in a ₹506.74 million write-back, and completed US business reorganization impacting revenue comparability.

Financial highlights

• Q1 FY25 revenue: $328.2 million (₹26,913.96 million), up 16% YoY; EBIT: ₹3,840.2 million, EBIT margin at 14%; PAT: ₹3,064.2 million, up 33.9% YoY; EPS: ₹20.10.

• Gross profit margin for Q1 FY25 at 33.0%, slightly down YoY.

• Operating cash flow to PAT: 49.3%, a significant improvement from negative 23.5% YoY.

• Cash and investments at ₹19,104.6 million as of June 30, 2024.

• Basic and diluted EPS for the quarter were ₹16.11, compared to ₹15.84 in the same quarter last year.

Outlook and guidance

• Management aims to maintain FY25 margins at FY24 levels (14.5%) and targets 200–300 basis points margin improvement over the next couple of years.

• Confident in continued growth across all verticals, with healthcare and BFSI leading.

• Cost optimization and revenue enhancement initiatives expected to yield further margin improvements.

• The reorganization of US operations has impacted the comparability of revenue figures with previous periods.