Firstsource Solutions (FSL) Q3 24/25 earnings summary

Executive summary

• Q3 FY25 revenue grew 32% year-over-year to INR 21,024 million (US$249M), with 7.6% sequential growth in constant currency.

• Profit after tax for Q3FY25 was INR 1,603 million (margin 7.6%), up 24.5% year-over-year, including a one-time gain of INR 88 million.

• Three large deals signed in Q3, marking the third consecutive quarter with at least three large deal wins; 13 new logos added, including five strategic logos with $5M+ annual revenue potential.

• Notable client wins in healthcare, insurance, consumer tech (GenAI services), and utilities; expanded business with existing clients.

• Audited consolidated financial results for the quarter and nine months ended December 31, 2024, were approved and present a true and fair view in accordance with Ind AS 34 and SEBI regulations.

Financial highlights

• Q3FY25 EBIT was INR 2,333 million (margin 11.1%), up 37% year-over-year; EBITDA for Q3FY25 was INR 3,177 million (margin 15.1%), up 34% year-over-year.

• Profit after tax was INR 1,603 million, up 16% quarter-on-quarter and 25% year-over-year; includes a net one-time gain of INR 88 million.

• Free cash flow to PAT was 159% in Q3 and 78% for nine months FY25; cash balance at INR 2.5 billion, net debt at INR 6,042 million as of Dec 31, 2024.

• Interim dividend of INR 4 per share declared.

• Earnings per share (basic) for the quarter was ₹2.33, up from ₹2.01 in the previous quarter.

Outlook and guidance

• FY25 constant currency revenue growth guidance raised to 21.8%-22.3%.

• EBIT margin guidance maintained at 11%-11.5%.

• Margin expansion of 50-75 basis points expected in FY26, with continued investments in sales, capabilities, and technology.

• The Board declared an interim dividend of ₹4 per equity share at its meeting on February 7, 2025.