Genpact Reports Financial Results for the First Quarter of 2008

Genpact Limited (NYSE:G), which manages business processes for companies around the world, today announced financial results for the first quarter ended March 31, 2008.

Key Financial Results – First Quarter 2008
First quarter revenues were $234.4 million, up 33% from the first quarter of 2007.
Net income for the first quarter was $19.7 million, up 966% from $1.8 million in the first quarter of 2007; net income margin for the first quarter of 2008 was 8.4%, up from 1.1% in the first quarter of 2007.
Earnings per common share were $0.09, up from a loss of $0.22 per share in the first quarter of 2007.
Adjusted income from operations for the first quarter increased 63% to $35.1 million compared to the first quarter of 2007.
Adjusted income from operations margin was 15% for the first quarter, up from 12.2% in the first quarter of 2007.
Adjusted diluted earnings per share were $0.15, up from $0.07 in the first quarter of 2007.

Pramod Bhasin, Genpact’s President and CEO said, “We had an excellent quarter. We continue to grow our business with Global Clients and GE. We see strong demand for our services, as clients look to Genpact to provide value for their businesses, particularly in the current environment. Revenues were up 33% for the quarter, driven by growth with existing Global Clients as well as GE. We continue to expect revenues for the full year to grow organically by 25-27% over 2007. We are continuing to drive efficiencies in our operations and benefit from improved pricing. We expect our adjusted income from operations margin to improve by 10 to 30 basis points to between 16.1% and 16.3% in 2008 from 16.0% in 2007.”

Global Client revenues increased 121% over the first quarter of 2007 (growth with existing clients, or organic growth, was 113%), driven by Genpact’s ability to expand its existing client relationships and build new ones. Excluding revenues from businesses divested by GE in 2007, Global Client revenues increased organically by approximately 98%.

Genpact continues to expand its client base. Among these new additions are:
A global insurance provider;
A life sciences manufacturing company;
Genpact’s first domestic client in China in the banking and financial services sector; and
A leading North American automobile manufacturer.

Genpact continues to expand its relationship with GE in 2008. GE revenues for the first quarter of 2008 grew 1% over the first quarter of 2007. This excludes revenues from businesses divested by GE in 2007, all of which Genpact continues to serve and whose revenues are now included in Global Client revenues. Genpact expects GE revenues to increase in mid-single digits in 2008 over 2007, excluding revenues from businesses divested by GE in 2007.

In the first quarter of 2008, 20 client relationships each accounted for $5 million or more of Genpact’s revenues in the last twelve months, up from 18 such relationships at the end of 2007. Of those, four client relationships each accounted for $25 million or more of Genpact’s revenues in the last twelve months.

Among the many services and solutions Genpact provides to its clients, the mix between business process services and IT services revenues shifted in the first quarter of 2008, with business process services contributing approximately 78% of revenues in the first quarter of 2008 up from 76% for the full year 2007.

Annualized revenue per employee in the first quarter of 2008 was $29,000, an increase from $28,200 for the full year of 2007. This increase reflects a combination of higher revenue work Genpact is doing for its clients and Genpact’s ability to improve pricing.

As of March 31, 2008, Genpact had 34,300 employees worldwide, an increase from 32,700 at the end of 2007. Genpact’s attrition rate for the first quarter of 2008, measured from day one, was 25% compared to 30% in 2007. Genpact’s attrition rate would be 19% if measured after six months as many in Genpact’s industry do.

Genpact generated $21 million of cash from operations in the first quarter of 2008, up from $9 million in the first quarter of 2007, primarily due to higher profits.

Conference Call

Genpact management will host a conference call at 8 a.m. (Eastern Daylight Time) on May 2, 2008 to discuss the company’s performance for the quarter ended March 31, 2008. To participate, callers can dial 1 (866) 202-3109 from within the U.S. or 1 (617) 213-8844 from any other country. Thereafter, callers need to enter the participant passcode, which is 75653183.

For those who cannot participate in the call, a replay and podcast will be available on our website, www.genpact.com, after the end of the call. A transcript of the call will also be made available on our website.

About Genpact

Genpact manages business processes for companies around the world. The company combines process expertise, information technology and analytical capabilities with operational insight and experience in diverse industries to provide a wide range of services using its global delivery platform. Genpact helps companies improve the ways in which they do business by applying Six Sigma and Lean principles plus technology to continuously improve their business processes. Genpact operates service delivery centers in India, China, Hungary, Mexico, the Philippines, the Netherlands, Romania, Spain and the United States. For more info: www.genpact.com.