Persistent Systems (PERSISTENT) Q2 24/25 earnings summary

Executive summary

• Achieved Q2 FY25 revenue of $345.5 million, up 18.4% year-over-year and 5.3% quarter-on-quarter, marking the 18th consecutive quarter of sequential growth.

• PAT grew 23.4% year-over-year in rupee terms; EBIT margin stood at 14%, with profit after tax margin at 11.2%.

• Advanced AI-led, platform-driven strategy with launches (Sasva, GenAI Hub, iAURA, SASVA 2.0) and acquisitions (Starfish, Arrka) to enhance offerings.

• Achieved carbon neutrality for Scope 1 and 2 emissions, improved ESG ratings, and launched Women Leadership Program.

• Multiple industry recognitions, including CMMI Level 5, Gartner Magic Quadrant, and fastest-growing IT brand.

Financial highlights

• Q2 FY25 revenue: $345.5M (+18.4% YoY, +5.3% QoQ); TTM revenue: $1,285.1M (+15.4% YoY).

• EBIT margin at 14%, up 30 bps YoY; EBIT in rupee terms grew 22.8% YoY; PAT: INR 3,250 million (+23.4% YoY); EPS at INR 21.20 (+18.3% YoY).

• Operating cash flow to PAT at 108.3%, with total cash and investments at INR 17,916.2 million as of September 30, 2024.

• Gross margin: 33.4% in Q2 FY25; EBITDA margin: 16.6%.

• Return on capital employed at 38.1%, up from 37% last year; ROCE: 35.7%; ROE: 24.7%.

Outlook and guidance

• Management expects healthy growth to continue, with some seasonal fluctuations due to furloughs in H2.

• Margin improvement expected through utilization, rightshoring, and leveraging past investments in GenAI.

• Focus on AI-led, platform-driven services, expanding digital governance, data privacy, and cybersecurity.

• Continued investment in talent, innovation, and ecosystem partnerships to drive growth.

• Confident in achieving $2 billion revenue target by FY27.