Genpact Limited

Good day, ladies and gentlemen. Welcome to the 2024 third quarter GENPAC Limited Earnings Conference Call. My name is Cherie, and I will be your conference moderator for today. At this time, all participants are in a listen-only mode. We will conduct a question and answer session towards the end of this conference call. As a reminder, this call is being recorded for replay purposes. The replay of the call will be archived and made available on the IR section of GENPAC's website. I would now like to turn the call over to Krista Bessinger, Head of Investor Relations at GENPAC. Please proceed.

Thank you, Cherie. Good afternoon, everyone, and welcome to GENPAC's Q3 2024 Earnings Conference Call. We hope you've had a chance to read our earnings press release posted on the investor relations section of our website, GENPAC.com. Today, we have with us BK Kalra, President and CEO, and Mike Weiner, Chief Financial Officer. BK will start with a high-level overview of the quarter, and then Mike will cover our financial performance in greater detail before we take your questions. Please note that during this call, we will make forward-looking statements, including statements about our business outlook, strategies, and long-term goals. These comments are based on our plans, predictions, and expectations as of today, which may change over time. Actual results could differ materially due to a number of important risks and uncertainties, including the risk factors in our 10-K and 10-Q filings with the SEC. Also during this call, we will discuss certain non-GAAP financial measures. We have reconciled those to the most directly comparable GAAP financial measures in our earnings press release. These non-GAAP measures are not intended to be a substitute for our GAAP results. And finally, this call in its entirety is being webcast from our investor relations website, and an audio replay and transcript will be available on our website in a few hours. And with that, I'd like to turn it over to BK.

Thank you, Krista. Hello, everyone, and thank you for joining us today. I am pleased to report another strong quarter with accelerating revenue growth, and continued market share gains. Revenue reached $1.21 billion, up 7% year-over-year, above the high end of our guidance range, with accelerating growth driven by data tech AI and healthy supporting growth from digital operations. Gross margin of 35.6%, and adjusted operating income margin of 17.6%, also exceeded our expectations as we invest to drive growth while also delivering operating efficiency. We talk a lot about execution here at Genpact, and we are equally focused on innovation. Both are delivering results. I'll give you some color on innovation and how it is leading to accelerating growth. We are now on track to deliver 6% revenue growth in 2024 at the midpoint up from 2% in 2023 with adjusted EPS expected to grow faster than revenue for the fourth year in a row. Relentless execution on our 3 plus 1 framework is delivering results, and we will continue to build our execution and innovation muscle with a sharp focus on partnerships, comprehensive data tech AI solutions, simplification and the plus one in our three plus one framework, which is about establishing Genpak as our own best credential for AI led transformation. Let me walk you through the key highlights on each. First on partnerships. We continue to see a meaningful opportunity to accelerate revenue growth as we increase the strength of our partner relationships. We started ramping investments in our partnership organization at the beginning of the year and continue to make meaningful progress. We have made a number of important announcements since our last earnings call. I'll highlight a couple of recent ones. The first is our proprietary finance data hub, powered by Databricks data intelligence platform. This AI-led solution provides CFOs and their teams with faster access to accurate data to improve decision-making and boost operational efficiency. And we are very proud to have achieved GenAI competency in AWS consulting services. This is a significant accomplishment, and we now hold the full suite of data, analytics, machine learning, AI, and GenAI competencies available with AWS. Second, on Data Tech AI. Our focus on delivering comprehensive solutions is driving accelerating growth with data tech AI revenue up 9% year-over-year, more than double our growth in the second quarter. Both innovation and execution are at play here. Gen AI is significantly expanding our total addressable market. While the absolute numbers are still small, Gen AI bookings were up meaningfully quarter-over-quarter. We now have approximately 130 GenAI solutions in production environments with clients, either deployed or going live, up more than 60% versus the previous quarter. GenAI is not just about productivity. It's about generating long-term value by combining the power of GenPEX advanced technology expertise, industry knowledge, and operational excellence we are empowering clients to accelerate their GenAI journeys and achieve transformative outcomes. This innovation was at the heart of the AI Day we hosted in early October. The event brought together more than 100 clients and partners to learn about the latest advances in generative AI, machine learning, data, and analytics at Genpak. The theme was AI of Now. with a specific focus on how Genpak is turning innovation into direct business outcomes for clients today. We are proud that a number of our valued clients and partners were on stage, be it Cisco Foods, Advantage Solutions, Resolution Life, or others, and it was our clients who shared how our solutions are driving meaningful value in their organizations. I'll give you a few examples. Mondelez International, one of the world's largest CPG companies, spoke about the Genpak CFO Action Hub that provides real-time predictive insights with a conversational interface and recommended next best actions. Our tailored AI solution built on Google Gemini Pro streamlines finance operations, identifies actionable insights, and enhances the overall customer experience. Each client brought a unique perspective on leveraging our solutions to address their specific challenges. Penske Transportation Solutions, an industry leader in transportation and logistics, spoke about Genpak's AI-based demand planning and forecasting solution. The Genpak model takes into account all fleet details, vendor availability, pricing, onsite storage, and logistics, to improve vehicle uptime and lower inventory costs. And insurance being a key sector for us, Liberty Mutual Insurance, one of largest global property and casualty insurance, spoke about the claim resolution and the solution we developed for them, and leveraging Amazon Bedrock and Genpak proprietary data to drive more efficient claim processing. Apart from these client stories, We also demonstrated a number of AI-enabled solutions at the AI Day across many competencies, including finance and accounting, supply chain or insurance, illustrating how the combined power of industry knowledge, data, artificial intelligence can transform business processes and drive superior value. I'll highlight just one of these solutions, which is our agentic solution for accounts payable. Powered by our proprietary LLM, our solution leverages machine learning and GenAI to increase automation across this end-to-end business process, achieving significantly more productivity than existing solutions. It reduces the cost of operation, improves working capital, and enhances the finance user's experience. Coming back to the third element in our 3 plus 1 framework, which is simplification, We continue to streamline our operations so that we can scale more efficiently. As an example, we have taken steps to simplify our cash to collection process, which is delivering improvement in time to bill and operating cash flow. In addition, we are both simplifying and further automating our own accounts payable process, resulting in improved working capital as well. And finally, on leading with Genpact as our best credential for AI-led transformation, we continue to make meaningful progress. I'll give you one example which we also covered in detail at AI Day. We now have a family of AI agents called Scout available to every Genpact employee. Scout brings the power of AI to everyday work with summarizing documents or translating content. For specialized functions like HR and IT, we are also customizing our agents to solve more complex problems. Still in early stages of adoption, we have over 20 agents in production today, with many more in development. In the process of developing Scout, we also created our own agent development lifecycle. This is different from the classic software development lifecycle with a specific focus on model selection, training, and management, allowing us to generate AI agents with greater speed and accuracy. Now turning to guidance. With another quarter of better than expected results, we are raising our outlook again for the full year. We are increasing revenue guidance by 150 basis points at the midpoint. with 6% growth now expected on as reported basis up from 4.5% previously. We are also increasing gross and AOI margin for the full year by 10 basis points each. And we are raising our outlook of adjusted EPS to $3.24 with an approximate 8 cent increase at the midpoint of the range to reflect strong year-to-date performance. As we look ahead to 2025, we are optimistic about the results we can deliver both for our clients and for our shareholders. That said, there is significant work ahead. Our journey at GenFact is not just about adopting the latest technology. It is about fundamentally reimagining how we deliver transformative value and operational excellence for our clients. We are off to a good start. but remain heads down, focus on execution and innovation, and building what's next for GenPact. In closing, we see a bright future ahead. GenAI is expanding our total addressable market, and we believe we are well positioned with our unique combination of data, technology, and domain. We are also proud of the performance we have delivered year to date. The changes we are making, while not easy, are improving execution and innovation across the board, but perhaps most importantly in data, tech, and AI. I witness the incredible dedication of the GenPack team every day and the immense value we bring to clients. I want to thank every one of our employees for their incredible passion. With that, let me turn the call over to Mike.