Mphasis (526299) Q3 24/25 earnings summary

Executive summary

• AI-led transformation is accelerating, with platforms like NeoZeta and NeoCrux scaling beyond pilots and driving productivity gains of 30%-60% across SDLC phases; 55% of the pipeline is now AI-led, with significant wins in AI Ops and AI Modernization.

• Q3FY25 saw a six-quarter high in TCV closures at $351 million, with five large deals won and strong pipeline growth in both BFS (up 58% YOY) and non-BFS (up 44% YOY).

• BFS and TMT verticals led revenue growth, supported by wallet share gains, new client ramp-ups, and broad-based TCV wins.

• Execution rigor maintained operating margin within the target band of 14.6% to 16%.

• Investments in GTM, talent, and cybersecurity (new Cyber Fusion Center) are enhancing growth and operational resilience.

Financial highlights

• Q3FY25 revenue was $421 million, up 0.5% sequentially and 4.6% YOY in constant currency; direct business contributed 96% of revenue.

• EBITDA/operating margin stable at 15.3%; operating profit and net profit grew 0.2%-1.1% sequentially and 9.7%-14.5% YOY.

• EPS for Q3FY25 was INR 22.6, up 1% sequentially and 14.1% YOY.

• Operating cash flow exceeded PAT, with OCF/PAT >100% for the quarter; DSO improved to 72 days.

• Consolidated revenue from operations for Q3FY25: ₹35,613 million; net profit after tax: ₹4,278 million.

Outlook and guidance

• Expecting Q4 to be the best sequential growth quarter in three years, with above-industry growth for FY 2025 and sustainable margins in the 14.6%-16% band.

• Recovery in discretionary spend and mortgage business is visible; macro environment for BFS is turning favorable.