Hexaware Technologies (HEXT) Q1 26/27 earnings summary

Executive summary

• Q1CY26 revenue reached USD 388.5 million, up 4.6% YoY and nearly flat QoQ, with EBIT margin at 13.3%, driven by operational improvements and forex tailwinds; basic EPS was INR 5.77, up 20.5% QoQ and 7.2% YoY.

• Strong cash management resulted in a closing cash balance of USD 220 million as of March 31, 2026, with the company remaining debt-free and maintaining robust cash flow conversion above 125%.

• Two new clients were added to the $10 million+ revenue tier, bringing the total to 34, reflecting broad-based growth and successful large deal wins across multiple sectors.

• AI-driven services and platforms, including Zero License and Tensai Reasoning Ops, are key differentiators, with significant client adoption and new revenue opportunities identified.

• Interim dividend of INR 8.50 per share declared in April 2026.

Financial highlights

• EBIT margin improved to 13.3%, up 598 bps QoQ, with normalized EBIT flat after adjusting for prior one-time items.

• Revenue in constant currency grew 3.2% YoY; license revenue was $11 million, flat sequentially and below the historical average.

• Net profit for Q1CY26 was INR 3,516 million, margin at 9.7%, up 20.6% QoQ and 7.5% YoY.

• OCF to PAT on LTM basis was above 125%, indicating robust cash generation.

• DSO (billed + unbilled) at 75 days; effective tax rate at 25.5%.

Outlook and guidance

• Sustained growth momentum expected from Q2 onward, reaffirming a minimum full-year growth floor of 7.6%.

• EBIT margin guidance maintained at 13%-14%, with expectations for margin improvement in H2 and a higher exit rate.

• Banking, Healthcare & Insurance, and Manufacturing & Consumer expected to lead growth, while Travel & Transportation will lag due to macro headwinds.