Why Genpact Stock Raced Nearly 16% Higher Today
Key Points
It pleased investors with a beat-and-raise third quarter.
The business process management specialist is doing rather well with clients wanting to implement AI functionalities.
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Business process management company Genpact Limited (NYSE: G) managed to post a solid quarterly earnings report on Friday, and was handsomely rewarded by the stock market for doing so. The company's shares ended up closing almost 16% higher in price as a result, a far better showing than the S&P 500 index's 0.1% bump higher on the day.
AI tailwinds
Genpact began Friday by issuing its third-quarter earnings release, which revealed that its net revenue for the frame was slightly over $1.29 billion.
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This was a nearly 7% improvement over the same quarter of 2024. Of its two reporting segments, advanced technology solutions was the more dynamic, enjoying a 20% rise in revenue to $311 million. The larger core business services unit saw its take rise by 3% to $980 million.
As for profitability, Genpact's net income according to generally accepted accounting principles (GAAP) also defied gravity, rising by almost 10% to $146 million. On a per-share, non-GAAP (adjusted) basis, this advance was even more pronounced, at 14% to $0.97.
These figures compared favorably to the consensus analyst estimates, which called for a top line of $1.27 billion, and an adjusted net profit of $0.88 per share.
Demand for artificial intelligence (AI) solutions is helping propel Genpact's fundamentals higher. The company quoted CEO BK Kalra as saying that it's "defining the future of agentic operations, rapidly integrating advanced technology solutions, and strengthening our position as an ideal partner for clients looking to lead in the age of AI."
The growth train should continue to roll along
Management believes more growth is in the offing. It raised its net revenue guidance for the entirety of 2025; now it feels the metric will rise by 6.1% to 6.4% over the 2024 number. Previously, it guided for 4% to 6%. The adjusted earnings projection also got a boost, to a range of $3.60 to $3.61 per share, up from the previous estimate of $3.51 to $3.58.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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