Demand Environment
  • Customer priorities continue to remain centered around cost optimization and business transformation
  • Expect client IT budgets to remain similar in CY25 with a positive bias
  • With the reduction in the interest rates, easing of inflation, and reduced uncertainty with the new US administration taking over, expect the discretionary demand to strengthen
  • Verticals:
    • Seeing early signs of revival in discretionary spend in BFSI and Retail
    • Manufacturing, Life Sciences, and Healthcare should start seeing growth in the medium term as near-term challenges have bottomed out this quarter
  • GenAI, AI, and cloud services continue to see significant growth
    • Customers are gearing up to leverage AI by focusing on application modernization and cloud
    • Helping clients build LLMs, benchmark their performance, and enhance their efforts in quantization
  • Clients are investing in
    • Agentic AI adoption
      • Represents the next stage of maturity in the exponentially evolving space of AI
      • Adds reasoning capabilities to large language models
      • Moving beyond initial wave of chatbots and RAG deployments of GenAI
      • Allows to design, train, and deploy agents that solve high-value business problems
    • Building a robust data foundation
    • Technology modernization
    • SAP S/4 HANA transformations
    • Cloud engagements
Revenue
  • CY25Q4 Revenue of $7.539bn, +3.6% YoY in SD, +4.5% YoY in CC
  • Vertical (in order of growth):
    • Energy Resources and Utilities +3.4%
    • Consumer +1.1%
      • Primarily driven by the improvement seen in retail in all major markets
      • Travel, transportation, and hospitality performed well in UK, EMEA, and APAC, but considerably slowed in the US due to a market specific issue and strained customer profitability
      • Retail growth strong in the fashion apparel sub-segments
    • BFSI +0.9%
      • Leading adopter of AI, GenAI, and other cutting edge technologies
    • Manufacturing +0.4%
      • Continue to see softness in CY24Q3 due to a combination of macro and industry specific issues in auto and aerospace, which have faced challenges from supply chain unrest and the labor market
      • Feel it will bottom out in CY25Q1 and growth will come back
      • Continue to capture demand on the back of significant investments in factor of the future, smart manufacturing, software vehicles, and GenAI
    • Technology & Services -0.4%
      • Client IT budgets continued to remain flat
    • Life Sciences Healthcare -4.3%
      • Client specific challenges called out last quarter are largely stabilized
      • MedTech industry is undergoing rapid transformation driven by the shift to intelligent devices and predictive AI, GenAI in genomics, cell therapy, and personalization
      • Customers are also investing significantly in scaling their digital manufacturing capabilities and building a resilient supply chain
      • Buyers waiting for more policy clarity in the US until discretionary spending returns
    • Communications and Media -10.6%
      • Continues to encounter challenges with demand, primarily led by technology-driven cost optimization
      • There are encouraging signs of a rebound in IT spending as telcos advance their efforts to expand into adjacent businesses while enhancing efficiency in their core operations
  • Geographies (in order of growth):
    • India +70.2%
    • Middle East +15%
    • Latin America +7%
    • Asia Pacific +5.8%
    • UK +4.1%
    • Europe +1.5%
    • North America -2.3%
Bookings
  • CY25Q4 Order Book TCV of $10.2bn
    • Highlight of the quarter was exceptionally strong and broad-based TCV, especially strong in:
      • North America $5.9bn
      • BFSI $3.2bn
      • Consumer Business $1.3bn
  • Saw the deferral of some projects based upon the ROI expectation which saw reprioritization
  • Seeing a decrease in the deal cycle by a few weeks on deals greater then $20mn
  • Verticals:
    • Good deals wins in BFSI, CPG
  • Geographies:
    • Europe has one of the best deals wins
Margin
  • CY25Q4 Operating Margin of 24.5%, +40 bps QoQ, -50 bps YoY
    • Headwinds
      • Furloughs
      • Q3 seasonality
    • Tailwinds
  • Margin aspiration remains 26% to 28%
Employees
  • CY25Q1 Closing headcount of 607,354, -5,370 QoQ
    • QoQ reduction was due to seasonality
    • Don’t see a correlation between headcount and growth in the short-term
  • LTM attrition of 13.0% in IT Services
  • Awarded 25,000 promotions, total year 110,000