Happiest Minds Technologies (HAPPSTMNDS) Q2 24/25 earnings summary

Executive summary

• Achieved 12.7% sequential and 28.2% year-over-year revenue growth in Q2 FY25, driven by acquisitions, Gen AI business, and new sales initiatives.

• Integration of PureSoftware and Aureus progressing well, with cross-leveraging of capabilities and expansion into new markets.

• 97% of revenue is digital, 95% agile, with 281 active clients and 95% repeat business.

• Industry groups such as BFSI and healthcare are leading growth, with strong bioinformatics and AI/ML projects for global clients.

• Recognized among India's best workplaces and received multiple industry awards for innovation, diversity, and talent acquisition.

Financial highlights

• Q2 FY25 revenues at $62.4 million (₹52,164 lakhs), up 12.7% QoQ and 28.2% YoY; total income ₹54,867 lakhs.

• EBITDA at ₹11,882 lakhs (21.7% margin), up 1.3% QoQ and 12.8% YoY; PAT at ₹4,951 lakhs (9.0% margin), down 15.3% YoY.

• Operating margin at 17.9% in Q2 FY25, down from 19.8% in Q1 FY25.

• Free cash flow conversion above 97% of EBITDA; cash on books at ₹14,700 million.

• Diluted EPS for Q2 FY25 was ₹3.29; interim dividend of ₹2.50 per share declared.

Outlook and guidance

• Confident of meeting 30%-35% revenue growth guidance for FY25, with Q4 expected to be stronger due to large deal closures and seasonality.

• Margins expected to remain in the 20%-22% range, with some short-term impact from wage increases and investments.

• Management expects the full impact of recent acquisitions and business unit changes to be visible in upcoming quarters.

• Positive demand environment, especially in BFSI, manufacturing, and professional education segments.