Firstsource Solutions (FSL) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 revenue reached ₹17,911 million ($215 million), up 17.1% YoY and 7.2% QoQ, with constant currency growth of 14.8% YoY and 6.5% QoQ.

• EBIT was ₹1,970 million (11.0% margin), up 10.1% YoY; PAT was ₹1,353 million (7.6% margin), up 7.4% YoY.

• Diluted EPS rose to ₹1.92, compared to ₹1.80 in Q1FY24 and ₹1.90 in Q4FY24.

• Three large deals were signed, 10 new clients were added, and key wins included US healthcare, SaaS, and UK pension administration.

• Employee base grew to 29,231, with attrition declining to 32.0% from 41.7% a year ago.

Financial highlights

• Revenue from operations was ₹17,911 million, up 17.1% YoY and 7.2% QoQ.

• EBIT margin was 11.0%, stable QoQ but down 70 bps YoY.

• PAT margin was 7.6%, with net profit at ₹1,353 million.

• DSO increased to 68 days due to delayed collections, normalized to 61 days post-quarter.

• Net debt rose to ₹9.7 billion, mainly from working capital needs and QBSS acquisition payment.

Outlook and guidance

• FY25 constant currency revenue growth guidance raised to 11.5%-13.5%, up from 10%-13%.

• EBIT margin guidance maintained at 11%-12% for FY25, with medium-term improvement of 50-75 bps annually post-investment phase.

• Management expects continued downward attrition trends and a robust deal pipeline.

• Targeting $1 billion revenue run rate by Q4 FY26.