Mphasis (526299) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue reached $421 million (₹35,361.46 million), up 2.4% sequentially and 5.4% year-over-year in constant currency, with broad-based growth across verticals and geographies.

• Net profit for Q2 FY25 was ₹4,233.32 million, up 8% year-over-year, with EPS at 22.4, reflecting strong execution and margin delivery.

• AI-led transformation is a key driver, with 35% of the deal pipeline now AI-focused and significant adoption of proprietary platforms.

• Three large deals were won in Q2, with total contract value (TCV) wins at $207 million for the quarter and $526 million for the first half, 88% in new-gen services.

• The company maintains a strong pipeline, up 23% year-over-year, and expects continued improvement in deal conversion and revenue ramp-up.

Financial highlights

• EBIT/operating margin expanded to 15.4% for Q2 FY25, within the guided band of 14.6%-16%.

• Operating profit and EPS grew 4.6% sequentially; cash flow from operations was $51 million, representing 100% conversion of net income.

• Direct business revenue grew 6.2% year-over-year and 2.4% sequentially, reaching $421 million.

• Net profit margin and cash flow generation improved alongside revenue and EPS growth.

• DSO increased to 73 days due to delayed collections.

Outlook and guidance

• Revenue guidance for FY25 is maintained, with expectations of normal seasonality in Q3 and continued growth led by BFS and recovery in mortgage.

• EBIT margin is expected to remain within the 14.6%-16% band for the remainder of the year.

• Management notes a positive macro environment with increased AI adoption and focus on efficiency and savings-led transformation.