Genpact Limited Aktie

All right. Good morning. My name is Puneet. I'm from JPMorgan's Payment Processing and IT Services team. Glad to have here with us BK. You all know him well, CEO of Genpact, and Kyle, who heads Investor Relations. So the format of this presentation is going to be fireside chat. I'll start with a few questions, and then we'll open the floor for questions from audience. So BK, welcome. Thanks for doing this.

So for benefit of investors, like who may not be as close to the story, why don't you start with talking about like a little bit about Genpact, like about your journey. And if you can touch upon, like, talk about Genpact Next strategy that you unveiled last year.

Sure. Sure, Puneet, and thanks for having me here. I appreciate that. So look, I think we started as nearly 30 years ago. For the first 10 years, we were 100% subsidiary of General Electric Company, got spun off about 2 decades ago, 20 years ago. And what we were known for were running mission-critical operations for our clients, be it in finance, procurement, supply chain, many critical workloads for our customers. And that gave us the advantage in this new world where I often talk about that there is no artificial intelligence without process intelligence. And process intelligence is what we have worked over the last 3 decades, and that is what has begun to shine of late in our new strategy, which we call as Genpact Next.

And Genpact Next is bringing advanced technologies to the work -- the critical work that we do for our clients, be it in finance, procurement or the various workloads that we have chosen to agentify. And Genpact Next has 3 Cs as a framework, capabilities, catalyst that enables client value and Genpact value at scale. So when I talk about capabilities, it is pivoting to advanced technology solutions, most importantly, Agentic, but data and AI, and we can chat more about that. It's taking shape in a very significant way. We mentioned that last quarter, it grew better than our expectation at 24% and Advanced Tech now represents 27% of the revenue.

Catalyst, one of -- there are many, many catalysts, but one catalyst that we constantly talk about is how partnership is -- and partnership ecosystem is shaping the journey at Genpact for our clients and for us. And then clearly, clients -- existing clients as well as new clients in our chosen spaces is what we are accelerating with. So overall, Genpact Next is taking shape in a very, very significant fashion. And what it is doing is we are building new Genpact. We are building a new company. And the results of that have come to be shown in the -- in our books. We shared that Advanced Tech grew nearly 24%. We have now guided the Street that will grow greater than 20% for all of this year.

It is also the characteristics of Advanced Tech is what we call as 2x, 2x 70-70. So it is greater than 2x revenue by headcount of the company. It is growing at greater than 2x the rate of the company, greater than 70% of the revenue is annuitized and greater than 70% is on non-FTE models, commercial models. So more accretion of margin happens to Genpact. And that is, again, point #2, shown in the gross margin. For 12th quarter in a row, we grew the gross margins. And we are just getting started. So really pleased as to how we are building the new Genpact.

No, that's great. You covered like everything that I wanted to discuss.

Okay. Wonderful. I appreciate that.

No, but seriously. So advanced technology, like you talked about like last quarter, like it grew 20% plus, I think, 24% year-on-year, which is faster than what you shared with us, like the high teens growth at your Investor Day. So talk to us like what's driving this higher growth? And is it sustainable at these levels? Or should we expect like the medium-term growth to still return to high teens level?

Look, I think we have already guided the Street to greater than 20% for this year. And you all know our guidance philosophy. We are prudent and cautious always in guiding. So we feel really good that for the entire balance year, it will grow greater than 20%. And the reason it is growing faster is because our differentiation is showing up in a significant fashion. And the differentiation sits in context-rich process intelligence. We are adding these advanced technologies to it and bringing those solutions to our clients, existing clients, new clients. And the most differentiating solution in there is Agentic solutions which are -- which we mentioned that we booked nearly equal to whatever we booked in all of last year, we booked nearly equal to that in the first quarter. And all of this booking is in annuitized recurring revenues with minimum volume commits. So it is long-term annuitized revenue, which is more IP-based. And that is creating the differentiation that is creating the momentum, and we believe we are just getting started.

So on that, like the Agentic solutions. So what's driving this growth? Is it like the models like by Anthropic, OpenAI, like they are more capable, like all the news flow or hype around, like, all those evolution of model? Or is it that the clients are more comfortable with governance and all those risk factors? Or is it just like this is new year, new budgets, and clients just feel ready to embrace AI. So what's driving the shift towards more agentic this year compared to, let's say, all of last year -- and if we can size, like, order of magnitude of how large that pipeline or the bookings of agentic solution is with an overall company?

Yes. So what is driving is clearly overall, we know that advanced technologies or AI is a conversation in every boardroom, every company. And given we have been running these mission-critical workloads or operations for our clients, and we know the overall outcome that we deliver for our clients, what is the total cost of ownership and how we are reducing the total cost of ownership while creating more high-value revenue for Genpact. So it is not the models. Models are available. And yes, as reasoning improves, it is part of the architecture in which we are delivering to our clients.

But it is more driven by how we stay accountable to driving those business outcomes that we have driven for decades, but now in a far superior fashion and bringing technology at that last mile intersect with operations. And it is not just with existing clients. We mentioned we signed 6 large deals in the first quarter. It hasn't happened. As just a comparison point, we only signed a couple of large deals in the previous first quarter last year, 2025. So overall, momentum is building up and momentum is building up not only in Advanced Tech and core business services because clients buy not a particular -- oh, I want to buy Advanced Tech or core. They are buying a solution. It is how we are architecting the solution and how we are making that difference come to life.

And can you talk about like the unit economics on some of these Agentic deals? And just like the contract structure, like do you own the IP of the solution that you offer? And what are like the unit economics, margin profile, incremental margin profile on some of those deals?

Let me address that. So yes, we own the IP, and this is in a pretty straightforward SaaS kind of models in which we are selling all of these Agentic contracts. Agentic contracts, as I mentioned, were nearly equal to what we sold all of last year. What we sold all of last year was over $200 million. In Q1, we nearly sold that, a little bit over around that. And momentum is continuing as we are progressing even in this quarter. And on unit economics, this is how maybe I'll pick up our existing client and give you a shape of the unit economics.

So if our existing client for a particular workload, we know their total cost of ownership, sometimes actually better than clients because clients a lot of times see their own budgets, and they don't see across the upstream, downstream, what are the other costs or what are the other systems that they have for fulfilling a particular transaction. Sometimes fulfilling a transaction takes 15 systems, 20 systems. And we have -- we at that last mile can see and observe all of those systems and where the cost is sitting. So we provide that window of truth of, hey, this is what your total cost of ownership is. Obviously, we validate it with them. And we are reducing that total cost of ownership first from a client perspective because that's how the engagement happens.

Now on the Genpact side, what we have also shared during our last Investor Day on finite number of contracts, we said that we are seeing as we rotate this to Agentic revenue, we saw $103, 300 bps. So what was $103, we are -- if $100 is the revenue we are earning from the client, we are earning $103, so 3% higher at 300 bps higher gross margin. So how is it that client is getting total cost of ownership down, you are earning more revenue, more margin. How is it happening? And the method is pretty simple. The higher gross margin, one, the higher gross margin -- higher revenue is coming from either the volume or the scope -- and I'll give you use cases as an example, a particular client is -- these are large global clients, Fortune 50, Fortune 100 customers. Sometimes they are running the same workload in Europe or in different parts of the geography in-house or with another provider. If now we have a better mousetrap, that volume is coming to us.

Or two, they were using another system that is -- or our software that is not used now, that is not needed now because we have baked it in our solution as our software is how the revenue is increasing. And for gross margin, obviously, we are reducing the total cost of ownership, but our costs are going down faster is how gross margin accretion is happening.

Last point I'll make that we said $103, 300 bps at the end of June. That was on finite number of contracts. We have also subsequently reported that these numbers are better on more number of aggregated contracts. So it was very few contracts at that point in time. Now these contracts are running into many, many, many contracts, and our numbers are better than $103, 300 bps.

So on some of these contracts, so when you offer like an Agentic solution like so you combine like the human labor tokens, like offer to clients. So -- in future, hypothetically, like, if token cost increases like, do you take that risk? Or will you be able to pass it on to clients?

So look, I think the bill of material is -- we are keeping the bill of material with ourselves, be it the cost of technology or the architecture or the servicing cost. Fundamentally, we do believe -- take an example, servicing cost over a period of time, if the models continue to improve, the servicing cost or the labor cost in that component will go down. Overall cost of intelligence, in my view, over a period of time will actually go down. So I think we have structured the contracts in a way which are annuitized recurring revenues with minimum volume commit. So as transactions or any of those, those are add-ons. And there are certain provisions that we have carved out in these pricing contracts, where we feel really good about how we are managing this transition of commercial models.

Got it. Got it. And going back to like what you talked about earlier about like how you are seeing clients sending more workflow your way. So talk to us about your core business services. Like that is like obviously more than 70% of revenue. You expect it to grow this year. What will drive that growth? I imagine like a part of -- a large part of core over the next few years will transition into Advanced Technology solutions as you bring some of those Agentic solutions, help clients do that. So talk to us like what drives that growth within core? Like do you expect that segment to grow for the next 2 or 3 years?

So core continues to be, Puneet, an integral part of our growth equation, integral part of our growth model. Core is the reason advanced technology is accelerating. Core is the reason why we see exceptional product market fit with all the agentic solutions that we are bringing to bear. And core is the reason we know the total cost of ownership for our clients. So core is an integral part of our equation. And for foreseeable future, we do see core continue to grow because a lot of foundational work, a lot of process intelligence work happens in core. And if you want to or if our clients want a ton of returns on artificial intelligence investments, it will not happen without foundational work happening in core.

And I must also say that while we are rotating and we are wanting to rotate core as fast as possible to Advanced Tech because it is stickier, it is high-value revenue. It is still not -- as we are saying, we grew 24%. Rotation is not the reason it became 24% or rotation is not the reason that it will be greater than 20%. It is de minimis in -- at least as we see it for this year. So -- and clients don't, as I mentioned, come to us, I want to buy a core or I want to buy Advanced Tech. But increasingly, we are building newer mousetraps. We are wanting to get the clients where they want to be, which is more advanced solutions as fast as possible. And we do see core as an integral part of our ecosystem and core as a reason of continued growth.

Last point I'll make, Puneet, on core. I often use this phrase intentional disruption. And we are also agentifying the workloads where our domain is strongest in core, finance, supply chain, HR, procurement, this is where our domain shines. Now there are parts of core that will not agentify, and we'll continue to run it for our clients. But core is the reason why agentification and product market fit is happening in a very, very strong fashion. And we see that as a core part of our model.

Yes. No, absolutely. I totally agree, like, the core is the reason like that you have right to win in Agentic or in Advanced Technology solutions. So totally agree with that. So let's talk about like how your competition is changing. Like you talked about that you're winning some work from clients' in-house operations. So let's focus on that because there is still like a lot of market that's with clients' in-house operations. So how should we think about, one, penetration rate of outsourcing versus in-sourcing and core work as well as, like, the Genpact's pros and cons like in being able to bring some of those Agentic solutions to customers that clients can do themselves.

So even before this wave of technology, we always shared and maintained that we are still in early journeys of outsourcing penetration. It increasingly is true even today. And now as we are bringing all of this innovation at scale, we are getting more and more TAM unlocked for us. And we are also seeing new competition, as an example, various software providers that we never used to see or even in case of data and AI, as we have strengthened that franchise in a pretty strong fashion, we are again into newer buying centers of data or AI, where we are building custom agents for our clients. So all of these are newer TAMs that we have unlocked. And all of the Advanced Tech solutions are firing. Obviously, Data and AI and Agentic. Agentic is our own proprietary solutions. But there are many solutions where we are enabling it for clients in our Data and AI segment or other segments. So I think -- so we are seeing newer type of competition that we didn't encounter earlier.

I imagine like agentification of business processes, that's the holy grail, like everyone is going after. So talk to us like, let's say, versus like a software company, I'm going to name, like, they might be here at the conference, but like any...

You can name them.

Software company or LLM, like they created their services businesses compared to those names, like what are pros and cons for clients to go with Genpact or IT services companies, like they all are like talk about like as a horizon 3, this is the area that they want to focus on, right? So talk to us.

So look, I think maybe I'll pick up 2 or 3 genres of competition or, I would say, partners and everybody's frenemies, and I always believe in an ecosystem play. Look, first off, if what is the core advantage in which -- core differentiation because of which we are accelerating. It is because of understanding the context at the last mile because we've been running operations. Now many of our IT peers have not been running operations. They've been running various different workloads, IT workloads, not operations workload. We've been running operations workload, and that's what we have carved our identity and our brand and all of our assets around that.

That is shining up now because you think about actually any company, any company is process, people, technology. Any company is, including yours, process people technology. And people is what make process and technology happen. What became simpler? What became more ubiquitous? What became more available. Technology became more ubiquitous. Technology became more available. Technology is becoming more cheaper. Operations and the process part, which is the upstream and downstream, how data and where data sits, that didn't become simpler. Technology or tool will go only that far as much as the process allows.

Our differentiation sat in the process. And we are bringing that technology is why it is accelerating at a pace. And as far as model companies go, we are leveraging all of the model companies in our technology architecture, but also swapping out wherever deterministic models are needed or probabilistic models are needed and/or where certain things can be done by open source models. So -- because we do believe that cost of intelligence overall will go down and a lot of powering is happening even with open source models. So how do you find and build the architecture in a secure environment in a responsible fashion, where you use all these capabilities to drive most value for clients and take a share of that value for Genpact.

Got it. At this time, like are there any questions from audience? Just wait until you get the mic.

BK, thanks so much for being here. On that cost of intelligence thesis, you seem pretty convicted in your idea that the cost of intelligence will go down. We're trying to do some work on token pricing and how that's going to shake out for all the foundational labs. They need to charge more for inference costs and kind of cover all the amortization of all the capital investments they've outlaid. So some of the leading models, it feels like there's big price increases potentially in front of us, but also obviously some democratization or competition. Could you just share your thoughts, state of the market as you see it for compute inference cost of intelligence?

Yes. So Brendan, look, I think there are many competing forces, including the ones you enunciated where these model companies will have to charge more. And then there are other competing forces where democratization of intelligence, open source models, models from different parts of the world becoming available. And then I think everything doesn't need probabilistic high-end models. A lot can be delivered through deterministic models, which are far more cheaper. And it is also the nature of problem you are wanting to solve. The nature of problem that you are wanting to solve is a very acute hard problem or nature of problem if we are wanting to build a scalable finance solution. Is it really the most intense problem where lots of token will be used? I doubt it. So it is dependent upon also the spaces we are choosing, how -- what we are going after and how we see building a sustainable revenue-generating, more margin-accretive model for Genpact.

It might take some time, like everyone is just trying to token max right now. But totally agree, like not every workflow needs frontier models. So no, that's a fair point. So any other questions? Okay. I'll keep going. So let's talk about near-term for this year. So talk to us, like, the trends you are seeing in near-term demand environment of guidance that you issued last week or...

A couple of weeks ago.

A couple of weeks ago. Sorry, it's all. So the guidance that you issued indicates like the growth will accelerate in second half of this year. So you talked about earlier like the large deals that you signed 6 large deals in Q1. I think there was a similar number in Q4 last year. So talk to us like what drives the confidence that the growth acceleration is doable like in second half? Like talk to us about the near-term trends that you're seeing.

Sure. So overall, let me first just give the guidance out, if that's okay, Puneet. And it is a simple structured process and a pretty simple philosophy that we have of a prudent cautious approach. And it is -- the first half, second half is a simple mathematics. Some of that you enunciated also in 6 large deals that we signed, continued momentum from end of last year. So we will see a little bit of acceleration both in Advanced Tech as well as we go into the second half for core business services.

And so we feel good about the guidance that we have given. And it is also aided by the pipeline, by the booking, by the backlog we have and the number of conversations and the demand that we see across the board, across all cohorts, be it geos, be it Advanced Tech, core business services, be it the various vertical segments that we report. So if we see any cohort, our demand is off the charts. If I take an example of Advanced Tech solutions, the pipeline is up 30% just over the last 90 days. Agentic pipeline or inflow is up greater than 3x. So we feel really good about as to where we sit, and we see strong demand of the solutions that we are building and the pivot we are making.

Yes. Any impact from like the geopolitical tensions that we've been seeing for the last 3 months, more than 3 months, not just, let's say, in form of energy prices, but let the disruption in supply chain. You do a lot of work in supply chain areas. So are you seeing any impact at all?

Yes. Look, there is an uncertain environment, but we are not seeing impact in our demand pipeline. Actually, some of our demand pipeline is up because of these uncertain environments as our solutions play right into it, like you mentioned supply chain or a few other solutions, they -- even in risk play right into it. And so we haven't seen the impact of the geopolitical uncertainty that is all around us.

Let me ask like, again, going back to like the new type of delivery model and structure. So talk to us like how it impacts Genpact in 2 ways. One, like the contracts that you are signing, like are you signing more outcome-based contracts? Why -- what is in it? Like what is different now that clients are ready to sign outcome-based compared to any time before?

And #2, talk to us change management in terms of your people, like so there are so many employees, like how do you motivate your employees, convince them that this is not -- this shift towards AI is not bad for their jobs and whatnot, get them to align with your mission.

So let me talk about our people first because all the time we talk about clients and contracts and so on and so forth, but I'll address that, too. Really thrilled and that is one thing that I must say surprised me as to how our people are absorbing the change and are leaning in hard to become more AI native and AI immigrants, if you will. And we have enabled all of our people with the latest tools and technologies, and we track it, and we shared at the end of last year that we had north of 10 million hours, I think it was 12 million hours of learning, which was relative to our size, a disproportionate number if you look at any of our peer sets. And bulk of that learning was in AI and Agentic because we have enabled many of frontier courses and courses from Harvard or MIT through our Genome platform, and it is really working well.

And then we talked about at the Investor Day, AI Builders and AI Practitioners. That progression is again continuing exceptionally well. So really, really thrilled as to how our talent is getting remade. And we are also hiring a lot of new talent, too, while maintaining the headcount. We have started showing a little bit of how revenue is decoupling from the headcount. We're really pleased and thrilled as to how our employee base is absorbing all of this AI change.

On commercial contracts, Puneet, again, I would say we want to nudge more and hard and faster. Very pleased as to how we are signing all of the Agentic contracts because that's all is -- none of that is any time or material or FTE based or anything like that. All of that is more annuitized recurring revenues, also more in data and AI or Advanced Tech. But overall, as a franchise, I would want us to nudge more to become non-FTE models. We are already at 48%, nearly half of the company is there, but our aspiration is much bigger.

Got it. Got it. With 2 minutes left, let me ask one last question. So last year, like you launched Genpact Next, which included like 7% plus revenue growth, and you define like the operating model, like where do you expect Genpact to be. So in last 1 year, -- what have you learned? Like how is that strategy evolved versus your plans 1 year ago? Like what surprised you? And also from your perspective, what do you think like folks like us, like investors, analysts, like we don't appreciate enough.

Okay. It will take more than 2 minutes, but I'll quickly go. So really thrilled with the progress that we have made on Genpact Next and the strategy we announced. Strategy is playing right because we said Advanced Tech will grow high teens. We are growing greater than 20% very quickly. And it is because of the product market fit because of the flywheel effect, because of the flywheel effect from core business services to Advanced Tech and all parts within that be data and AI, consulting, digital solutions, partners and so on and so forth, decision support services.

All of this flywheel effect and creating the differentiation more through Agentic solutions. Look, I think what is less understood, I think I'll characterize it by 2 or 3 points. First point is, it is less understood that we have exponential power of big and small. This is what my clients tell us. Our clients tell us that, that we are big enough for them to consider us as a Fortune 500 partner, and we are small enough to care for every client. We are big enough to make massive investments, and we are small and agile enough to change and dance on dime and move with speed, and we are demonstrating the speed. What is also less understood is that our context-rich process intelligence is shaping up as differentiation in a significant way because we are bringing technology there.

What is also less appreciated is the leadership team. The leadership team in our sector that we have brought is the most differentiating factor. It is leadership team that existed for 25, 30 years, people like me and many others and leadership team that we have brought net new, who are tech natives, and we are with one singular purpose of making us the most premier Agentic solutions company in our chosen spaces. And we are moving with speed that we are demonstrating. And I think we will show better and better results.

Absolutely. Appreciate it. Thank you so much.

Thank you.

Good day, ladies and gentlemen, and welcome to the 2026 First Quarter Genpact Limited Earnings Conference Call. My name is Carmen, and I will be your conference moderator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. The replay of the call will be archived and made available on the IR section of Genpact's website. I would now like to turn the call over to Kyle Vikström, Head of Investor Relations at Genpact. Please proceed.

Good afternoon, everyone, and welcome to Genpact's Q1 2026 Earnings Conference Call. We hope you've had a chance to read our earnings press release posted on the Investor Relations section of our website, genpact.com.

Today, we have with us BK Kalra, President and CEO; and Mike Weiner, Chief Financial Officer. BK will start with an overview of our results, and then Mike will cover our financial performance in greater detail before we take your questions.

Please note that during this call, we will make forward-looking statements, including statements about our business outlook, strategies and long-term goals. These comments are based on our plans, predictions and expectations as of today, which may change over time. Actual results could differ materially due to a number of important risks and uncertainties, including the risk factors in our 10-K and 10-Q filings with the SEC.

During this call, we will discuss certain non-GAAP financial measures. We have reconciled those to the most directly comparable GAAP financial measures in our earnings press release. These non-GAAP measures are not intended to be a substitute for our GAAP results. More details on constant currency growth rates can also be found in our earnings press release and fact sheet posted to our Investor Relations website. And finally, this call in its entirety is being webcast from our website, and an audio replay and transcript will be available on our website in a few hours.

With that, I'd like to turn it over to BK.

Thank you, Kyle. Hello, everyone, and thank you for joining us today. Q1 was a record start to the fiscal year, and I want to be unequivocal. I believe we are in the early innings of something that will fundamentally reshape this company's trajectory. It is rare to see the convergence of a structural shift in the market, a differentiated capability set and the right strategic positioning, all happening at the same time. When they do and when the company has the discipline and courage to act on it, the resulting advantage compounds in ways that are difficult to replicate. That convergence is what we are experiencing right now, not as a moment, but as a sustained momentum we see reinforced in our pipeline, our client conversations and our early results.

A new Genpact is taking shape, and our Q1 results demonstrate we are on a clear path as a leader in agentic and advanced technology solutions. Disciplined execution with healthy and increasing demand drove total revenue growth of 6.7% year-over-year to $1.296 billion. Advanced Technology Solutions revenue growth accelerated to 24% year-over-year as we continue to rapidly deliver compelling innovation across our client base. Gross margin expanded for the 12th quarter in a row, up more than 100 basis points year-over-year, further enabling significant investments for long-term growth. And adjusted diluted EPS again grew faster than revenue, up 16.7% year-over-year.

Our intentional focus and prioritization on driving high-quality, sustainable growth is showing up both in our top and bottom line results and in future indicators of growth across bookings, pipeline and inflows. Clients, including some of the world's largest corporations, are choosing Genpact as a long-term strategic partner to reshape and run their mission-critical operations. We signed 6 large deals in the quarter, and we have a healthy pipeline of other large transformational deals, setting us up for continued strength through the year.

We are contractually changing the game. We are capturing more multiyear opportunities with annual recurring revenue streams, creating a robust, durable base we can continue to build on. And we are seeing strong early signs of scale with headcount growth decoupling from revenue as we deeply leverage agentic and AI to make our delivery more productive.

Momentum in Advanced Technology Solutions is rapidly building. Over the last 90 days, our pipeline has grown more than 30% as demand for our agentic solutions and data and AI expertise continues to meaningfully increase. Advanced Technology Solutions is becoming an increasing proportion of our bookings, adding to our record backlog, and it is contributing more to total revenue. As I said, it grew 24% year-over-year and now accounts for 27% of total revenue. These solutions continue to create more value for our clients and generate high-value revenue for Genpact.

At Investor Day last June, we framed it as 2x, 2x, 70%, 70%. What this means is Advanced Technology solutions deliver more than 2x the revenue per headcount and 2x the revenue growth of the total company with 70% annuitized revenue and 70% from non-FTE commercial models. All of these metrics are tracking ahead of what we reported last year, further underscoring the high quality and sticky nature of this business.

What I continue to be most proud of is our exceptional momentum with agentic. These are not one-off projects. We are building a meaningful long-term annuitized business with our own IP that is deeply integrated in our client operations. Our agentic solutions growth is accelerating. This quarter alone, we nearly doubled the total contract value of our agentic solutions from all of 2025. We are fundamentally and rapidly transforming how businesses operate, and long-term demand for our agentic solutions is gaining significant traction.

More and more new clients are choosing Genpact for our differentiated domain-driven offerings, bringing us into their operations because of the expertise and outcomes we uniquely provide. Existing clients, having known us for running mission-critical operations, are experiencing a surge of innovation from us. And they are actively integrating our agentic offerings, expanding scope, volume or both as they move confidently towards outcome-driven non-FTE-led operations. This momentum is quickly building a meaningful recurring annual revenue base for Genpact with expanding margins that continue to improve as the business scales.

With accounts payable, record to report, source to pay, insurance and our robust future road map, we are quickly becoming the agentic transformation partner of choice to move clients from digital operations to agentic operations. We are moving clients to a collaborative model between agents and human experts. Agents can now autonomously execute tasks and reimagine processes, while our last-mile experts validate exceptions, train and advance models and reinforce learnings, all within the guardrails of our responsible AI framework. We call this Agentic Operations.

Over the past couple of years, the significant investments we have made to expand our advanced technology capabilities have effectively created a flywheel that builds to Agentic Operations and scalable autonomy. This incredible momentum would not have been possible without decades of experience running our clients' mission-critical operations.

Core Business Services is a key element of our growth model. For our clients, our process intelligence and our ability to codify it continues to be the differentiating factor that brings their artificial intelligence to life, allowing them to achieve real scale across their global organization. Core Business Services revenue increased 1.4% in Q1 as we intentionally disrupt to create exponential value for our clients. Demand is healthy and growing. Our booking and pipeline continues to demonstrate that our deep domain and industry experience is amplifying our broader portfolio. We are taking our extensive road map to our clients and seeing them rapidly rotate and also shape our future agentic solutions. This is allowing us to make deliberate decisions to double down on scaling our agentic and AI-led offerings, prioritizing higher quality, long-term growth that continues to build over time for Genpact.

Clients across the globe are now choosing Genpact for more than just our operational expertise. They are choosing us for our technology and our ability to codify and scale process context. While our U.S. client traction continues to be strong, let me share 2 global examples, and both are new.

First, from Europe. This quarter, we entered a new strategic partnership with a global leader in insurance and financial services to support their transformation into global verticals. We will be running and optimizing their mission-critical operations while building functions of the future and trusted to address the needs of all stakeholders, including their customers, employees and shareholders. We are partnering to reimagine how their key functions operate and scale at an enterprise level, embedding agentic and AI-driven capabilities at the very core of our global enterprise transformation.

We are integrating Genpact's agentic finance IT solutions like accounts payable and record to report as well as other AI-led offerings. The result is fundamental shift for these functions to become predictive business partners while reducing transaction costs and improving compliance. The combination of understanding the business context at the last mile, bringing the latest agentic innovations and strong cultural and people alignment with outcome orientation creates an incredibly strong foundation for the strategic partnership.

The next example comes from one of our new next gen clients, which represents next generation of market disruptors. Bendigo Bank, one of Australia's leading banks, is transforming its operating model to create a leaner, more resilient operating backbone, allowing investments to be redirected into customer experience, data and product innovation. Bendigo Bank entered into a strategic multiyear partnership with Genpact to drive greater productivity with stronger risk and control outcomes across core operations. Bendigo Bank selected Genpact given our ability to combine deep Australian banking operation expertise, proven innovation as demonstrated through real AI and agentic case studies and a risk-balanced mindset critical in regulated environments. Both of these examples underscore our unique positioning and a clear flywheel effect. Decades of experience translating into codified domain knowledge, combined with expanding advanced technology capabilities and agentic operations and all of these are compounding.

What we also hear from clients is that their data, infrastructure, systems and processes are complex. They need help navigating rapid technology changes, and they need partners who can connect across the broader ecosystem. We continue to deepen and expand our partner relationships with differentiated offerings, leveraging our clear domain expertise and connecting the dots for clients. In Q1, our partner-related revenues grew 35% year-over-year, now accounting for nearly 13% of total revenue. We continue to make meaningful progress against our partner strategy, and this week marks a significant milestone. We just announced a strategic alliance with Google to create agentic and AI-led solutions for the office of the CFO. This is not just a partnership announcement. It is deepening of our relationship that is already delivering real results for clients.

Just 2 weeks ago at Google Next, Google spotlighted Genpact's finance solutions, showcasing how we are enabling finance users to gain actionable insights from revenue and P&L data through natural language conversations in Gemini Enterprise. The thesis is simple. Genpact's context-rich process intelligence, combined with Google Cloud's AI infrastructure allows us to drive agentic transformation across the office of the CFO.

Let me bring that to life with a client example. Cardinal Health manufactures and distributes medical and health care products operating in 30 countries and serving 90% of U.S. hospitals. We have a long-standing relationship with Cardinal Health, working on transformation across both finance and supply chain. The company wanted to streamline manual processes further to drive meaningful quality, cost and productivity gains using AI. We collaborated with Google Cloud to launch an AI-led innovation, leveraging deep process intelligence to pinpoint the right starting point. The results, for example, from credit memo processing are clear. Our agentic solutions are driving a meaningful increase in touchless processing, faster cycle times and a significant improvement in cash flows. This is the kind of transformation change Genpact is enabling as we scale with partners across enterprise operations.

I opened today by describing something rare: A moment when structural shift in the market, a clear opportunity and our company's unique positioning all converge at the same time. Quarter 1 makes the case that 2026 is proving to be that moment, and Genpact is not just watching it unfold. We are shaping it. Our strategy is clear. Our momentum is measurable. And increasingly, the market is seeing a different Genpact.

For decades, we have been trusted for deep process intelligence and running mission-critical operations at scale. That foundation has only strengthened. What's changed is what clients are now asking us to do with that foundation. Today, they come to us to bring together processes, technology, data, organizations to deliver outcomes that simply were not possible before. And because of that, we are winning new kinds of work, engaging in new kinds of conversations and expanding the addressable market in front of us.

Agentic Operations is at the center of this. We are building, orchestrating and responsibly governing agentic systems across the most essential parts of our clients' businesses. We are combining AI with decades of domain expertise in a way that is incredibly difficult to replicate. This isn't just a concept for us. It is live, it is scaling, and it is showing up in our results.

And you can see the effect on the quality of the business. The shape of our business is changing in ways that matter. We are building revenues that are high quality, more durable and harder to displace. The margin profile is structurally richer. We are leaning in hard behind our most strategic priorities, and that is opening up a daylight between Genpact and the market around us. This quarter is not an aspiration. It is a proof point. A new Genpact is here, and we are just getting started. With that, let me turn the call over to Mike.

Good afternoon, everyone, and thank you for joining us today. We delivered another strong quarter, highlighting the tremendous momentum we've seen as we set a new standard for AI-led transformation. Total revenue grew 6.7% year-over-year to $1.296 billion, with accelerating growth in Advanced Technology Solutions. Advanced Technology Solutions, which includes data and AI, digital technologies, advisory and agentic, grew 24% year-over-year, reaching $345 million, with significant strength in data and AI and agentic. Demand for our Advanced Technology Solutions is growing rapidly, and our strategic investments are paying off. Our advanced tech capabilities continue to grow with clear innovation across agentic and AI-led offerings. We are expanding our total addressable market, delivering more value to clients across end-to-end workflows and driving high-value revenue for Genpact. As BK mentioned, we continue to make tremendous progress building a sticky, high-quality business. For Advanced Technology Solutions, 2x, 2x, 70%, 70% is just getting better.

In Agentic Operations, we are quickly becoming the partner of choice to move clients from traditional digital operations to agentic. This quarter alone, we nearly doubled the total contract value of our agentic solutions relative to 2025, with more than 50% of our cumulative awarded contract value coming from new clients. This is a clear indication of our increasing TAM and expanding wallet share. For existing accounts that are rotating from traditional to agentic delivery, net revenue growth and gross margin expansion are both notably above what we reported at our Investor Day in June. This momentum in agentic across both new and existing clients is building a stronger annual recurring revenue base for Genpact with higher gross margins that continue to improve with scale.

Core Business Services includes digital operations, decision support services and technology services grew 1.4% to $951 million in the first quarter, reflecting continued client trust and ongoing demand for our deep domain and industry experience as well as deliberate focus on driving high-quality long-term growth for Genpact. Sales execution and demand remains strong across Advanced Technology Solutions and Core Business Services as we continue to make progress with both new and existing clients.

Net revenue retention remains accretive, and we feel good about our pricing as we continue to deliver meaningful ROI to our clients through their transformational journeys. Our large deal momentum also continues. We signed 6 large deals in 1Q, and we have a strong pipeline of additional large deals, which, combined with our record backlog, puts us in a very strong position for the remainder of the year. As a reminder, large deals are $50 million or greater in total contract value.

Non-FTE revenue represented 48% of total revenue in 1Q, reflecting a strategic shift to fixed fee, consumption and outcome-based models. And with the tremendous momentum we're seeing in agentic, we're building meaningful recurring annual revenue base decoupled from FTEs. We are effectively shifting away from productivity-dependent commercial models of the past.

At a segment level, High Tech and Manufacturing grew 8%, followed by Consumer and Healthcare growth of 6.1% and Financial Services growth of 5.4%.

Turning to profitability. Gross margin expanded once again, up approximately 110 basis points to 36.4%, strengthening our ability to invest for long-term growth. Our consistent track record of margin expansion reflects our disciplined approach to operations and pricing as well as an increasing contribution from high-value Advanced Technology Solutions revenue. Importantly, we are also seeing strong early signs of revenue growth decoupling from headcount as we embed AI and agentic solutions in our own operations and delivery.

Moving on to the rest of the P&L. SG&A expense as a percentage of revenue was 20.9%. Adjusted operating income was $224 million, with adjusted operating income margin of 17.3% as we continue to self-fund our strategic investments. Our effective tax rate in the first quarter was 23.7%. Net income for the first quarter was $148 million. And diluted EPS was $0.86. Adjusted diluted EPS increased 16.7% to $0.98, growing significantly faster than revenue for yet another quarter.

Turning to cash. We utilized $24 million of cash in operations, which is in line with typical first quarter trends and ended with $578 million in cash and cash equivalents, up $16 million from a year ago. We also returned $102 million to shareholders in 1Q through $70 million in share repurchases and $32 million in dividends.

Turning to our outlook. Our backlog, pipeline and inflows are at record levels with exceptional strength in agentic and Advanced Technology Solutions, putting us in a strong position for the remainder of the year. As a result, we continue to expect to deliver at least 7% growth for 2026 on an as-reported basis. Given the accelerating momentum in agentic, our strengthening partnerships and healthy demand we're seeing for data and AI, we now expect Advanced Technology Solutions to grow at least 20%. And in Core Business Services, we expect growth to continue even as we help clients accelerate their AI-led transformation through Agentic Operations and increase our focus on driving sustainable growth through advanced technology innovations.

On margins, we continue to expect full year gross margin to expand by 50 basis points to 36.5%, with adjusted operating income margin expected to increase 25 basis points to 17.7%. This reflects our continued commitment to self-fund investments for growth. And we expect adjusted diluted EPS to grow over 10%, again, faster than revenue.

Turning to the second quarter. On an as-reported basis, we expect to deliver total revenue between $1.324 billion and $1.336 billion or 6% growth at the midpoint. We expect Advanced Technology Solutions to grow at least 20% year-over-year, and we expect continued growth in Core Business Services. We expect gross margin to expand to 36.4% and adjusted operating income margin to increase to 17.4% Finally, we expect adjusted diluted EPS of $0.96 to $0.97 for the second quarter.

In closing, as BK made clear, the shape of our business is changing. We are reshaping how businesses operate, building on the strength of our deep domain and industry experience with significant investments in Advanced Technology Solutions. We are differentiating our position in the market, expanding our TAM, accelerating high-quality revenue growth and consistently expanding margins, all of which allow us to continue to deliver double-digit growth in adjusted diluted EPS and long-term value for clients and Genpact alike. With that said, let me turn the call back over to Kyle.

Great. Thank you, Mike. Operator, we're ready to go ahead and take questions.

[Operator Instructions] One moment for our first question comes from the line of Bryan Bergin with TD Cowen.

So my first question, just really at a high-level status update on client decision-making and spending trends from a macro standpoint, given it picked up -- certainly picked up in April and May. I mean pipeline and large deals sales activity seem pretty solid, but just wanted to test any areas by impact, vertical or geography.

And then I'll ask my second question upfront here. Just as it relates to CBS to ATS kind of migration, can you dig in a little bit more on the level of change between the segments as you modernize your delivery and kind of recategorize?

Thanks, Bryan. I'll take it. This is BK. So overall demand environment across the board, be it -- if I see in cohorts of Advanced Technology or Core Business Services or new clients, existing clients or various segments that we have or geos, it continues to be very strong and continues -- our pipeline and inflows continue to be at record levels. So really pleased with that.

And maybe how I'll respond to your second question is, I think our flywheel effect has begun to show results. And the flywheel effect actually starts from Core Business Services where demand continues to be strong. But our context-rich process intelligence that we harnessed for decades -- and that is the core with which, in combination with modern data, reimagined workflows, cleaner architectures and how we are bringing all of this together to deliver superior outcomes for our clients, is beginning to show results, and it is showing in a disproportionate way in Advanced Technology Solutions. And really, I think getting engaged into newer kind of conversations and more focused now on not just meeting the clients where they are, but also getting them where they want to be at a much faster pace. So really pleased with where we are and how we are shaping the new Genpact.

It comes from Sean Kennedy with Mizuho.

Congrats on the ATS acceleration, really impressive. I was wondering on the visibility in that business and how dependent ATS is on partner-related revenue growth and the runway you see there being 13% of revenue at the moment.

Yes. Thanks, Sean. Again, I'll take it, and Mike, feel free to add. All of the components of Advanced Tech or, for that matter, Core, I'll make 3 points, Sean. Point number one, just from, as I mentioned, 2x, 2x, 70%, 70%, high proportion of all of Advanced Tech is annuitized. So we have, again, a pretty strong visibility into it. And I won't say that it is only partner solutions. Yes, partner solutions is taking shape. What is gaining more and more traction is agentic as well as data and AI. And all of these are inextricable in many ways. We leverage partner solutions, as I enumerated in my prepared remarks as well. We feel really good about Advanced Technology Solution visibility as well as Core Businesses.

The only thing I'd kind of top that off, if you don't mind, BK, is when you think about ATS, as BK alluded to the 2x, 2x, 70%, 70%, particularly of note, I just want to repeat, the 70% of that business being annuitized gives us very good ability to predict the business within how we've been able to do it. I would also say it's also supported by a really strong pipeline and inflows that are growing. So we feel great about it.

Appreciate all the color. Good luck for the rest of the year.

Thank you.

Our next question comes from Surinder Thind with Jefferies.

So BK, on the Advanced Technology Solutions and kind of the 2x revenue per headcount, is that what you're initially seeing at this point? And is that what -- like how should we expect that to evolve over the coming years?

And I guess what I'm trying to get to is to get a better understanding of when a client kind of shifts from kind of their core operations to more agentic operations, like what percentage of that technology or revenues is more IP based? And then how do we think about the human component there and the ongoing maintenance and recalibration that's often required?

So I think there are many questions in that question, Surinder. So I'll pass that and let me know in case you have any follow-on, okay?

First, overall, at a business level, we are seeing the early signs of decoupling and creating more leverage where revenue will grow faster than headcount, and it has begun to show results. I'll still say we are in the early stages of that, point number one.

Point number two, I'll say to the specific question you asked, any of the agentic is all of those revenues have no bearing on headcount. It is all IP-based revenues, annuitized with minimum volume commitments, and it's more annuitized recurring revenues. So it has 0 bearing on headcount, whatever -- obviously, there's a headcount deployed there. But as we drive more efficiency there, the revenue by headcount will only increase.

Last point I'll make on overall Advanced Technology Solutions, it is greater than 2x, and we expect it to continue to grow better than 2x to better numbers, better semantics.

Got it. That's actually helpful. I think that's a good parsing of my question there. And then when I think about just the earlier commentary on demand, it seems like things relative to 60 days ago or 90 days ago hasn't really changed. Is that the messaging here? Because when we think about all of the messaging kind of from peers or competitors or, I guess, the industry, it just seems like everybody is seeing a little bit more weakness, a bit more delays in client decisioning. And that's kind of being reflected in guides and forward numbers. But just wanted to get your take if you guys are just seeing a completely different picture because of the nature of some of the work that you have.

Yes. How I'll characterize this, Surinder, is we hear some of that commentary, too, but we have -- in our pipeline, in our inflows, we believe we have begun to demonstrate that we are separating from the pack. We see record levels of pipeline across cohorts, as I mentioned in my previous comment. And more of that flywheel effect taking shape because of potentially our context-rich process intelligence, we've been working on it for decades. And possibly, the time has come in to show as to what it means as we supplement it with technology investments and ramp in our strategic areas and really demonstrate meaningful results to world's largest companies as these agents go live in their environments.

[Operator Instructions] Our next question is from Puneet Jain with JPMorgan.

So BK, I was wondering like if you can talk about like the specific drivers for such strong traction in agentic services you are seeing this quarter? Was it in any way related to evolution in AI models, especially Claude and Anthropic, which could be driving clients to embrace some of these models? Or it's just that like with new budgets like clients have new urgency to push ahead with this?

Puneet, as we mentioned in our prepared remarks that we nearly doubled the agentic bookings, and all of these are in annuitized recurring revenues of -- relative to whatever we did all in 2025. And I would not say that it is -- yes, I'm in improved models, all of those help, even in any case, using the models. But fundamentally, what has begun to show, as I was mentioning, in our existing client base as well as the new clients, the structural advantage that we have that is driven by context-rich process intelligence. I have always said there is no artificial intelligence without process intelligence, and it is beginning to show in our results.

And if you think of, like you mentioned, models, process, people, technology, technology is becoming more and more ubiquitous. It is more available. Process is more intense. And I think that's where we live. That's where the intersection of AI needs to be. That's where we see the outcomes, and we are delivering superior outcomes, and that structural advantage has begun to show in its early days.

Got it. And if you can also talk about like the operational structure of these deals, agentic deals, do you purchase tokens, decide which models are relevant for clients and manage like the change management governance constraints that have kept adoption low in the past?

So look, I think, again, maybe there are a couple of parts of the question, if I hear you right, Puneet. One, obviously, we live in these client environments. So as I mentioned, we understand their data, we understand the friction points. We understand the process flows. We understand how upstream, downstream processes work, how the change dynamics have to work. And therefore, we handhold clients holistically to drive and embed into the agentic systems and not just hand over the software and kind of go on.

And whether -- what models -- and it is a pretty structured process in which where to use, what models and how to bring -- we don't need to expose clients to these many tokens and these many things. Those are our internal things, client care, for how we are driving outcomes and restructure the commercial models in more annuitized recurring revenues with minimum volume commits.

Thank you so much. As I see no further questions in the queue, I will conclude this session and pass it back to management for closing comments.

Thank you, Carmen. I want to extend my sincere gratitude to all of our employees around the globe whose dedication and innovation makes everything we are building possible. And yes, to our esteemed clients for continuing to choose Genpact as their partner for agentic-led transformation; and yes, to our shareholders for their ongoing support. You are seeing a new Genpact, and we look forward to showing you even more. Thank you.

This concludes our conference. Thank you for participating, and you may now disconnect.

Good day, ladies and gentlemen, and welcome to the 2025 Fourth Quarter Genpact Limited Earnings Conference Call. My name is Carmen, and I will be your conference moderator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. The replay of the call will be archived and made available on the IR section of Genpact's website.

I would now like to turn the call over to Krista Bessinger, Head of Investor Relations at Genpact. Please proceed.

Thank you, operator. Good afternoon, everyone, and welcome to Genpact's Q4 2025 earnings conference call. We hope you've had a chance to read our earnings press release posted on the Investor Relations section of our website, genpact.com. Today, we have with us BK Kalra, President and CEO; and Mike Weiner, Chief Financial Officer. BK will start with an overview of our results and then Mike will cover our financial performance in greater detail before we take your questions.

Please note that during this call, we will make forward-looking statements, including statements about our business outlook, strategies and long-term goals. These comments are based on our plans, predictions and expectations as of today, which may change over time. Actual results could differ materially due to a number of important risks and uncertainties, including the risk factors in our 10-K and 10-Q filings with the SEC.

During this call, we will discuss certain non-GAAP financial measures. We have reconciled those to the most directly comparable GAAP financial measures in our earnings press release. These non-GAAP measures are not intended to be a substitute for our GAAP results. More details on our constant currency growth rates can also be found in our earnings press release and fact sheet, which are posted to our Investor Relations website.

And finally, this call in its entirety is being webcast from our Investor Relations website, and an audio replay and transcript will be available on our website in a few hours.

And with that, I'd like to turn it over to BK.

Thank you, Krista. Hello, everyone, and thank you for joining us today. We delivered a strong close to a record year for Genpact. Focused execution, accelerating innovation and broad-based demand drove $5.08 billion in revenue, up 6.6% for 2025.

Advanced Technology Solutions revenue grew 17% to $1.2 billion, now accounting for 24% of our total revenue. We also delivered another year of healthy margin expansion. Gross margin expanded 60 basis points, and adjusted operating income margin improved 40 basis points, even with our significant investments for long-term growth.

Adjusted diluted EPS increased 11% faster than revenue for the fifth year in a row.

In 2025, we built a strong foundation to drive sustainable long-term growth with a deliberate focus on rapidly scaling data, AI and domain-driven agentic solutions to reimagine how clients operate. The shape of our business is meaningfully changing as a result. Our performance, pipeline and prospects are increasingly higher quality and strategically aligned with our prioritization of advanced technology solutions and agentic-led work.

We delivered over $5.5 billion in new bookings with healthy growth in Advanced Technology Solutions, which now account for more than 1/3 of total bookings. We won 16 large deals and continue to make progress with the next generation of market disruptors. We are in a very strong position as we enter 2026. Demand is healthy and growing.

Our inflows and pipelines are robust, and our backlog has never been higher as more clients see Genpact as a long-term strategic partner to transform their mission-critical operations.

2025 was a year of intentional disruption and tremendous achievements. As I look back, I am most proud of what we have built, launched and scaled with our agentic solutions. We are fundamentally reshaping how businesses operate, and we are doing so at speed. Last February, we launched AP Capture, the first module in our accounts payable agentic suite with AP Advance, Trace and Assist made available at the end of June. While it is still early days, we have closed over $200 million in total contract value just for our AP agentic solutions. Within that, over 40% of awarded contract value came from new clients. And for existing accounts that have rotated from FTE-led to agentic, both revenue and gross margin expansion are notably above what we reported at Investor Day in last June.

With AP Suite, we have built the playbook for delivering sustainable, expanding value for clients and for Genpact and we are just getting started. Our strong product road map of multiple domain-specific solutions, like AP, are clearly aligned to our areas of operational expertise. The insurance policy and record-to-report agentic suite that we announced late last year are just a couple of examples. We believe the most successful companies will be those that leverage AI to achieve higher levels of autonomy and redefine how they run their businesses.

Genpact is shifting the paradigm of how knowledge work gets done. We are pioneering a new operating model. We call it Agentic Operations. Agentic Operations moves beyond automation to a collaborative model between agents and human experts through 3 main pillars: one, domain-specific agents that autonomously execute tasks in reimagine processes; 2, last mile experts that validate exceptions, train and advance models and reinforce learnings; and 3, clear roles, skills and governance underpinned by responsible AI.

Agentic Operations moves from human processed, human validated to machine processed, human validated. As we enter 2026, a new Genpact is taking shape. We are setting the standard for AI-led transformation. We are uniquely positioned to help clients reimagine the most critical components of their journey from fundamentally redesigning end-to-end processes, to building data and AI capabilities, to operating at scale through agentic collaboration. The opportunity ahead is significant. AI is rapidly evolving from generating insights to executing actions and CXOs face a clear business imperative, translate AI and agentic investments into measurable financial outcomes.

In the U.S. alone, the work of more than 70 million knowledge workers will be transformed by a seamless collaboration between AI agents and human expertise and research indicates that enterprise app integration with domain-specialized agents that are built on last mile expertise will increasingly become the norm. It is clear, enterprise transformation demands a parallel focus on process reengineering, data modernization, agile-tech architecture with AI embedded at its core and the discipline to unlearn legacy ways of working. This is exactly where Genpact shines and where we continue to differentiate.

Through our GenpactNext strategy, we are expanding our capabilities, clients and catalysts to capitalize on this meaningful opportunity and moving from meeting clients where they are to getting clients where they want to be. Let me walk you through key highlights for each.

First, our capabilities. Advanced Technology Solutions grew to $1.2 billion, contributing more than half of total revenue growth in 2025. Demand for our data and AI expertise is increasing rapidly with our investments accelerating our ability to deliver. Our AI Gigafactory continues to scale. We now have more than 400 gen AI solutions in market, either deployed or going live, up nearly 3x from last year. And recently, we introduced AI Maestro, a software platform that helps AI builders and AI practitioners embed AI into last mile business processes at a much faster pace.

Innovations like these are significantly increasing our opportunity set, with our data and AI pipeline up 50% year-over-year. Agentic has grown more rapidly than any other offering in Genpact's history. Our agentic solutions are clearly resonating, demonstrated by traction with new clients as well as higher volumes and increased scope with our existing accounts.

Core Business Services continue to grow, increasing 3.7% in 2025. Clients look to us to run their mission-critical operations at scale and do the foundational work necessary for AI transformation later because they know there is no artificial intelligence without process intelligence.

Our deep domain and industry experience reinforce our competitive position and amplify demand for our Advanced Technology Solutions, especially with large strategic engagements.

Coming into 2026, we have been awarded more large deals than at the beginning of any prior fiscal year, further demonstrating how clients trust Genpact to drive real business outcomes.

Next, clients. Clients choose Genpact because of our ability to combine data, AI and agentic with nearly 3 decades of experience running core operations. Let me walk you through a couple of examples to illustrate. The first demonstrates how our Core Business Services positions us to guide clients through their broader AI-led transformation. Humana is a leading American health and well-being company, primarily focused on offering a wide range of health care services and insurance products. They are long-standing digital operation clients in finance and accounting. Recently, we expanded our partnership to support Humana's AI-enabled transformation across revenue cycle management, procurement and, of course, finance and accounting. We are leveraging our deep process intelligence and last mile knowledge to drive efficiency and consistency through process redesign and operating model improvements.

Over time, we see the opportunity to support more advanced AI-enabled operating models, including Agentic Operations. This aligns directly with Humana's enterprise transformation and AI strategies and create a pathway for Genpact to become a key partner to Humana's future workforce.

The next example is WESCO, which shows just how quickly Agentic Operations can scale and generate meaningful outcomes. WESCO, another Fortune 500 company and leading provider of business-to-business distribution, logistics, services and supply chain solutions has partnered with Genpact to reimagine their finance function, including an overhaul of their AP process. At our Investor Day in June, WESCO's CFO spoke about their comprehensive process and technology transformation. We transitioned their entire AP and procurement organization onto a unified platform and automated their end-to-end process with pretrained outcome-oriented agents. Since June, we have made even more progress to drive better accuracy, faster cycle time and an elevated supplier experience.

WESCO has improved touchless processing of their 3 million invoices from 40% to 65%. They have also now implemented AP Advance with plans to implement AP Assist soon. HFS Research highlighted our work with WESCO as evidence that accounts payable is no longer just a back-office function. Instead, it is becoming a front line for enterprise AI, providing a foundation for real-time visibility and agility across the finance enterprise. These are just a few of the success stories we have seen this past year.

And finally, catalyst. In 2025, partner-related revenue grew nearly 50% year-over-year. Partnering with companies like AWS, Microsoft, GCP, Databricks is accelerating our ability to drive AI-led transformation. We are embedding domain-led solutions into their tech stacks with joint go-to-market efforts and road maps, setting us up to rapidly scale our execution.

We also continue to invest aggressively in AI talent through both hiring technology experts and intentionally training and upskilling our teams. Now with over 7,000 AI builders and nearly 20,000 AI practitioners, we are quickly building a future-ready workforce that can innovate, collaborate and drive impact at scale.

Looking ahead, 2026 will be a pivotal year for Genpact. Building on momentum of GenpactNext, we expect to deliver another year of strong, high-quality results. Revenue growth of at least 7% year-over-year will be powered by Advanced Technology Solutions growth in at least the high teens. We will continue to aggressively invest in our Advanced Technology Solutions, expanding product development across agentic, data and AI and strengthening our sales and partnership ecosystem. Even with these significant investments, we are committed to again deliver healthy margin expansion.

Finally, we expect to drive another year of double-digit adjusted EPS growth while continuing to return a significant portion of operating cash flows to our shareholders.

In closing, let me leave you with a quote from one of our recent tech hires that perfectly captures why we are so excited about this new era. Genpact offers an incredibly unique opportunity to help customers move past the era of AI novelties and into the era of last mile agentic AI. Customers are realizing we can do what others can't. We bring technology and process into the same room, connecting deep functional and industry understanding, proprietary data, AI and agentic systems to truly integrate AI and transform their businesses.

With that, let me turn the call over to Mike.

Good afternoon, everyone, and thank you for joining us today. We delivered a strong fourth quarter that exceeded our expectations, underscoring the progress we have made throughout the fiscal year.

As we consistently execute across our businesses, momentum from GenpactNext strategy continues to build, demonstrating our strategic investments are paying off. In the fourth quarter, total revenue increased 5.6% to $1.319 billion. Advanced Technology Solutions revenue, which includes data and AI, digital technologies, advisory and agentic increased 15% to $323 million, with particular strength in data and AI. Our Advanced Technology Solutions continue to create incremental value for our clients and generating higher value revenue for Genpact, delivering more than 2x the revenue per head count compared to the company average. This revenue is also growing more than 2x faster than Genpact's overall revenue with roughly 70% annuitized revenue and 70% from non-FTE models. Advanced Technology Solutions is high quality, sticky and most importantly, strategically aligned to our future direction.

Our rapid acceleration in agentic reflects the strong foundation and client trust we have built over years as well as our leadership in advancing AI-led transformation. As BK mentioned, we closed over $200 million in agentic contracts across new and existing clients in 2025, with more than 40% of awarded contract value coming from new clients. Within existing AP clients rotating to agentic-led, we continue to see revenue and margin improvement driven by higher volumes, increased scope for both, demonstrating the expansive opportunity of our agentic investments.

Core Business Services, which includes digital operations, decision support services and technology services grew 2.9% to $996 million in the fourth quarter, reflecting continued client trust and demand for our domain and industry expertise. Growth in core was offset by softness in decision support services as we continue to work through our go-to-market approach. In the fourth quarter, data tech and AI revenue increased 7.4% to $639 million, and digital operations increased 4% to $681 million. Non-FTE revenue, which captures our strategic shift to fixed fee, consumption and outcome-based deals represented 48% of fourth quarter revenue.

At a segment level, Hi-tech and manufacturing grew 9.9% followed by financial services growth of 5% and consumer and health care revenue growth of 1.5%. Sales execution and demand remained strong as we continue to make progress with new and existing clients. Existing client relationships continue to grow, demonstrated by our improvements in our net revenue retention rate.

Our large deal momentum also continues. As noted earlier, in addition to the deals closed in the fourth quarter, we have a number of large deals awarded that we expect to close in the coming months, including some net new to Genpact. As a reminder, large deals are $50 million or more in total contract value.

And across clients and cohorts, we are seeing a growing mix of Advanced Technology Solutions pipeline and bookings.

Turning to profitability. Gross margin in the fourth quarter expanded by approximately 90 basis points to 36.6%. Over the past 2 years, our consistent track record of margin expansion reflects our disciplined approach to driving operational efficiencies as well as an increasing contribution from our high-value Advanced Technology Solutions.

SG&A expense as a percentage of revenue was 20.3%. Adjusting operating income was $232 million, with adjusted operating income margin of 17.6% as we continue to self-fund our strategic investments.

Our effective tax rate in the fourth quarter was 24.2%, an increase from our prior year rate that was favorably impacted by a nonrecurring discrete item. Our full year effective tax rate was 24.3%.

Net income for the fourth quarter was $143 million, and diluted EPS was $0.81. Adjusted diluted EPS increased 6.6% to $0.97, faster than revenue growth for yet another quarter.

We ended the fourth quarter with $854 million in cash and cash equivalents, up $207 million from a year ago. This quarter, we returned $129 million to shareholders through $100 million in share repurchases and $29 million in dividends.

Turning to the full year. We delivered $5.08 billion in revenue, up 6.6% year-over-year. Advanced Technology Solutions increased 17% to $1.204 billion and Core Business Services revenue grew 3.7% to $3.876 billion. Data Tech and AI increased 9.3% to $2.442 billion, and digital operations increased 4.1% to $2.638 billion.

In 2025, we drove another 60 basis points of gross margin expansion to 36% through rigorous operational discipline and our strategic focus on driving higher value revenue streams.

SG&A expenses as a percentage of total revenue was 20.3%, consistent with last year. We remain disciplined in managing costs by prioritizing strategic investments. Adjusted operating income grew 9.1% to $888 million, with adjusted operating income margin expanding 40 basis points year-over-year to 17.5%.

Net income grew to $552 million. Adjusted diluted EPS increased 11.3% to $3.65, reaching a record high, growing faster than revenue for the fifth consecutive year. For 2025, we generated operating cash flow of $813 million, including $170 million from a client prepayment in the third and fourth quarters. Excluding this impact, cash flow from operations increased 5% year-over-year.

Finally, we returned $401 million to shareholders through $283 million in share repurchases and $118 million in dividends.

Turning to our outlook, which assumes the operating environment will remain relatively consistent. Our strong execution, significant backlog and rapidly accelerating demand for Advanced Technology Solutions put us in a very strong position entering the year. As a result, we expect to deliver at least 7% growth for 2026 on an as-reported basis. This guide reflects committed revenue in line with historical ranges.

In Advanced Technology Solutions, we expect revenue to grow at, at least high teens for the full year, driven by ongoing demand for data and AI as well as strengthening partnerships and continued momentum in agentic.

In Core Business Services, we expect growth to continue, even as we help clients accelerate their AI-led transformations through Agentic Operations and we increase our focus on driving sustainable growth through advanced technology innovations.

Full year gross margin is expected to further expand by 50 basis points to 36.5%. Adjusted operating income margin is expected to increase 25 basis points to 17.7%, reflecting our continued commitment to self-fund investments for growth. As a result, we expect adjusted diluted EPS to grow approximately 10%, again, faster than revenue.

Regarding our capital allocation strategy, we continue to take a balanced and disciplined approach. We aim to return approximately 50% to shareholders through share repurchases and dividends while maintaining flexibility for strategic investments. As a result, our Board of Directors has approved a 10% increase in our regular quarterly dividend to $0.1875 per quarter and $0.75 on an annual basis.

Turning to the first quarter on an as-reported basis. We expect to deliver total revenue between $1.282 billion and $1.294 billion or 6% growth at the midpoint. We expect Advanced Technology Solutions to accelerate from the fourth quarter to high teens growth year-over-year, and we expect continued growth in Core Business Services. We expect gross margin to expand to 36.3% and adjusted operating income margin to increase to 17.3%.

Finally, we expect adjusted diluted EPS of $0.92 to $0.93 for the first quarter. In closing, the unique combination of our last mile expertise with advanced technology capabilities allows us to define how enterprises will operate in the future. With our GenpactNext strategy, we're innovating at scale to accelerate high-quality revenue growth and consistently expanding margins, all while further amplifying our differentiated position in the market. We remain committed to investing aggressively against the most strategic areas of our business to drive sustainable growth and improvements in our margin profile with long-term partnerships that support improved economics for both Genpact and our clients. All this allows us to continue to grow adjusted diluted EPS double digits while driving long-term value creation.

With that said, let me turn the call back over to BK.

Before turning to Q&A, I want to extend my thanks to an incredible leader. Krista Bessinger is transitioning to a new role at Genpact in 2026. Krista, you have made significant impact here at Genpact. Thank you. Thank you for your partnership, and I look forward to working with you in your new advisory role.

With that, I also want to welcome Kyle Vikström as our Head of Investor Relations, and the newest member of our Genpact Leadership Council. Kyle joined us from Microsoft last spring with over 20 years of experience in various finance roles in technology. We are very excited to have her on Board.

And now let me hand it over for Q&A.

[Operator Instructions] Our first question comes from the line of Bryan Bergin with TD Cowen.

Maybe just given the material pressure on the sector from announcements from Anthropic and others, maybe we just start off with whether anything has changed for you on the ground in contracting conversations, whether you see any instances of clients seeking to try to do more themselves? I guess I'm curious, where do you see hype in the market being just that versus where there may be some validity to the risks that some of the traditional models face?

Sure, Brian. Thanks. Let me take that. Look, I would say that we are incredibly excited with what's happening in the Silicon Valley and because it is accelerating our pivot, it is helping us drive outcomes for our clients faster. And whenever any of these tech shifts happen, it's always nuanced as to how it will apply to various different companies, and we clearly see this as a tailwind for us. We see that in our pipeline. We see that in our conversations.

And if I just step back and maybe -- this is oversimplifying, Bryan. I see this as 2 main AI focus areas. One is, let's say, research AI and the other one is task-oriented AI. What you are probably referring to is more -- what is getting more attention these days in research AI, which is helping us accelerate our work. Where we come in is more in task-oriented AI and that's where we are building this Agentic Operations where we execute specific task within a process and making sure we are bringing in AI into the entire system of work, looking at the data, looking at the context in this complex end-to-end business processes, which are unique to every industry.

So fundamentally, if I see it from the operator lens, as we speak to many Fortune 500 companies, not just the frontier AI companies, we see our relevance increase. And we are seeing that again how our Agentic Operations is taken up, how data and AI is taken up. And what I would say is we are only seeing our pivot accelerate and only excited with this.

Okay. Understood. And my follow-up will be on ATS. You had nice solid growth here again in fourth quarter, 15%. Now you're calling for an acceleration off of that level. So I want to touch just the factors driving that confidence. I heard plenty of activity in your prepared script. Can you just give us a sense of maybe ATS bookings growth? And is there an acceleration of work that's coming out of CBS and into ATS? Anything that's kind of mechanically migrating between the 2?

I'll answer it in 2 parts, and Mike, feel free to give your color. Point number one, I think we are beginning to see -- getting into a lot more conversations where we were originally not invited to. And I often have said that we are meeting where clients are. And increasingly, we see that we can take them to where they want to be in a much faster manner. So we are -- be it in large deals or mega deals, we have begun to see into the conversation where we were earlier not invited and that we see in our pipelines.

Second, I think just from a Core Business Services standpoint, we continue to see a very, very healthy demand because that's where we see last mile advantage. That's where we have done mission-critical operations at scale. And that's where we understand the complexities and bring the process and technology conversation in one go. And fundamentally, what we have seen just agentic contracts grow, including with new clients, 40% of the booking coming in from new clients or this contract value. We are really excited. And even for the rotation, we see incremental revenue growth and gross margin growth.

Yes. So you may just double-click on that for a quick second. So just if you really want to just think about it from that perspective, in the sense of how do we view ourselves in terms of ATS growth at the rate that we're projecting in the high teens for 2026, it's really driven by the 2 things BK alluded to. First, momentum we've seen in the agentic ramp-up has been notable, right? We put forth -- we had a TCV of approximately $200 million in bookings where we ended the year and that's going to accelerate more as we roll out additional agentic-related solutions. That will help pivot some of the revenue from the Core Business Services.

And a few comments on that. As we talked about in our prepared remarks, the quality and sustainability of that revenue is incredibly important to us. It's highly sticky and continues to grow at a measured pace. It's recurring annual revenue, if you want to think about it from that perspective.

Look, I think maybe what I'm really excited about is how the shape of our business is changing and the pace at which it is changing. And more than 1/3 of the booking is Advanced Technology Solutions. And majority of deals that in agentic are obviously non-FTE, but driving consistent recurring annual revenue stream. So the new commercial model is taking hold in a significant way.

Our next question comes from the line of Maggie Nolan with William Blair.

You mentioned, I think, 40% of your TCV for the AP suite was new clients. I think that number was maybe closer to 30% last quarter. Are there patterns in who is adopting this? Are they different than the typical clients that would have engaged with Genpact or BPO in general in the past? And then can you give us some data on how you're thinking about addressable market growth as you roll out these solutions?

Thanks, Maggie. Look, I think it clearly points to significantly expanding our total addressable market. And as I've said that we haven't seen take off of any solution in Genpact history at the pace that we are seeing this. And many of these new clients are obviously net new to Genpact, but a number of them are also our existing clients who are not using finance, but they have now begun to use our finance stack.

So fundamentally, it is the enterprise client. It is mid-market clients. It is our existing clients who are not using finance -- using us for finance. So combination of all of that is really enhancing. And this is also, in many ways, getting us into the core foundational work that we need to do for many of these clients.

Okay. And then have you noticed any improvements in the sales cycle or ramp times in the last 90 days or so, particularly in large deals? And I'm curious what's contemplated in the full year guidance with respect to those variables. And you sort of alluded to large deals in January being quite strong. Are those baked into the guide?

Look, I think large deals have their characters. Some move at a very accelerated pace and some take much longer. And especially as we bring more technology and process and data and all of these skills together, especially for larger awards, it doesn't move in 90-day increments. But really thrilled with a number of these conversations, the pipeline across cohorts, including large deals is at record levels.

Maybe I'll add on to that, BK. So Maggie, thanks for the question. Let me just bring this up a little. We're really confident in our guide at 7% on a full year basis, right? So we look at everything that we look at all deals. We probability weight them as we move forward in our business. But a few things I wanted to just quickly talk about when we think about the 7% number for us. We look at it in an absolute dollar perspective, right? So we grew last year a little over 6.5% and roughly the same number a year ago. So it's not a Herculean effort for us to grow at that rate for next year.

But I'd also like to just point out that our committed revenue is in line with historical averages, which is about 75-ish percent, right? And again, this is all built off of a significant backlog, which is at record levels, which takes into account 2025 bookings as well as an exceptionally strong 2023 and 2024. So we feel really good about that on a go-forward basis and specifically regarding your question on is all deals are probability weighted into how we look at the guide on a prospective basis.

Our next question comes from the line of Surinder Thind with Jefferies.

I'd like to touch base on the margins, starting with the gross margins and the expectations of 50 basis points of expansion. Can you walk me through the levers that you're using there? And then what is the potential to kind of continue that trajectory as we look further out into '27 and '28?

Maybe I'll start, and Mike, feel free to comment on it. Look, fundamentally, it is shift to Advanced Technology Solutions, which is giving higher value to our clients, and it is a higher value revenue for Genpact. And we've been talking about it for a bit. And now I think it is -- as it is picking up the momentum, we see that come through apart from the disciplined operational capabilities that we are driving, but it is more from Advanced Technology Solutions.

And I'll not like to opine on what will happen in '27, '28, but fundamentally, our trajectory is clear as we have demonstrated, Surinder, over the last couple of years and increased the margin by 90 bps or 100 bps over last 2 years. And we are very clear that it will certainly grow further in this year as we have guided The Street.

Yes. Two just quick add-ons to that, Surinder. So when -- as BK alluded to, right, the increased mix from ATS, right, particularly that we see these the non-FTE commercial models really support our margin in that business. In addition to it, if you think of our margin in totality or the AOI margin we lay out and remember that grew 40 basis points year-over-year, that is net of significant investments we've made in our organization. So we feel very good about our margin trajectory on a go-forward basis.

That's helpful. And I guess, as a point of clarification, what I was trying to tease out here is this idea that is this predominantly a mix shift benefit that you're receiving? Or is there other benefits that you can get from -- just from the delivery footprint and the AI advances that we're seeing? I was just trying to understand that component here.

Yes. So correct. So the mix shift component and the nature of the work we do in ATS, we just alluded to is one component of it. But if you're thinking about it from a Client Zero perspective, which is how we think about our organization and using AI and everything and how we're training our internal organization, yes, that's help perpetuate the growth and the efficiencies that we're seeing in our own business. Remember, we come to the term Client Zero because we're embedding technologies in everything that we do, right? I disproportionately focus on functional areas. And I've seen that technology payoff, right? And we're using some of that benefit to invest in the future of our organization. So I think it's both things. I think you're correct.

That's helpful. And then following up on the comment about this is all net of -- you're making a lot of investments. And so obviously, you're still seeing some good adjusted operating income margin expansion. You kind of use the terminology that you're investing aggressively in strategic areas. Can you elaborate on that in the sense of, can you do more? And is it -- how do you balance the level that you want here? Because when we look at other -- I'll use the extreme example is just the hyperscalers. Their CapEx spend this year is coming in much, much higher than anybody is anticipating. So it always seems like there's the ability to invest more. How are you drawing that line?

So I'll kick it off and hand it over. So remember, what we're doing, there's a tremendous amount of CapEx associated when we talk about investments in totality, right? We do run a very disciplined process in the organization, right? We look at the ROIs and the strategic implications of every one of the investments that we do, right? Is there always a greater ask that we're willing to do? We evaluate that on a quarterly basis. We do it in a very disciplined fashion, right? But what I will say is from an investment perspective and things like partnerships, which we've called out in quarters past to training, we are not pulling back from that by any stretch. We are investing quite a bit of the operating leverage of the business in the future strategic investments and a whole course of things.

And I think there are clear areas of our investments, Surinder, that we have laid out. Partnerships, we have laid out, we continue to invest more and more in that. We have laid out in building the talent. We have -- we are increasing that more and more. I talked about Agentic Ops and so on and so forth. This is all the product investments and the engineering investments that we have done, sales investments and the front-end investments we are doing. So we are changing the business. That's what I mentioned. The shape of the business is changing very fast. And may I say, we are no longer the company that we were 2 years ago and really proud as to the speed and pace at which we are moving.

One moment for our next question, please. And it comes from David Koning with Baird.

Great job. I guess my first question is really on pricing. And our clients, it seems like coming to it at an increasing pace, that's great. Are they coming with greater expectations of the ability to drive more efficiencies? Are you having to change dynamics like faster kind of efficiency gains in their contracts? Or anything changing in the dynamics and the backdrop?

Maybe I'll take first and feel free to opine overall, Mike. Look, fundamentally, how I would think about it is, yes, aspirations are high. Overall aspiration of whatever everybody is reading and, therefore, what can happen in their businesses is high. And so is true in pricing as well. But what we are able to -- so I'll say it in 2 parts. First thing is, think of it as simple as p times q. I mean p times q, yes, we are giving in more productivity to our clients, but our costs are offsetting at a much faster pace, and that's what you see in gross margin.

And as far as our top line is concerned, we are getting a bigger share or more scope that for the same body of work we are able to -- that's what we reported that in agentic, our revenue growth is much higher than what we reported in June. So I think there is -- that's why we are saying that we are creating higher value solutions for our clients and we are gaining in the process.

The second piece I'll also say is how we are working with our partners and leveraging partner ecosystem as well as embedding solutions at the last mile, and they are repeatable in nature. And therefore, I think we are gaining as a leverage point there as well. Mike?

Yes. The way I think about it is just -- I look at our gross margins, right? And I look at the gross margin expansion that we have and the gross margin expansion that we're guiding for, right? I think that's really the best measure on how we're doing this, right? So yes, as BK alluded to in the beginning of his comments, there's always productivity asks, right? We've seen nothing dramatically changed from the past. But it's always been there, and it's not going to go away. And I think our ability to navigate through that thus far and what we're projecting has been quite impressive.

Yes, consumption structures are taking hold. So that's giving us more leverage.

Yes. Okay. That's great. I guess a follow-up question. When a company -- let's say, they're brand new to outsourcing, they haven't thought of AI too much yet. They're on the forefront of thinking about it. Who do they first turn to? Is it you guys? Is it one of the bigger tech companies? Like -- are you at the kind of the tip of the spear, like Genpacts are first called to like start this all out? Or who do they go to?

Look, I think this is what I was referring in one of my earlier comments that over the last year or so, we have begun to see and sit on the table where we were usually not invited because we are bringing the process, technology, data and how to run mission-critical operations at scale, all in one dialogue, all in one conversation. And that is really accelerating our pipeline, and you see the progress thereof. And we are talking about Advanced Technology Solutions growing 17%. And we are saying for next year, our view is -- it'll grow on top of 17% this year, another 17% at least. So we see that in our pipeline. We see that in our momentum. And yes, I think we are getting invited where we were not earlier invited. So feel really thrilled about that.

Our next question comes from the line of Puneet Jain with JPMorgan.

I wanted to follow up on agentic solutions when you offer like Agentic Operations or AP solutions. Who's the decision-maker within client organizations? Is it like the business managers or the CIO office? Who's driving the charge towards embracing agentic AI within your clients?

Yes. Look, I think it is always a combination of both. When we were just talking about running mission-critical operation, obviously, the business voice is much bigger. Well, fundamentally, now as you need to intersect and need to rewin all of these agents into their complex system road map, clearly, their CIO or CDIO, they are integral part of the equation. And therefore, that's the other piece where we are getting invited when a CIO, CDIOs looks at how we are thinking about Agentic Operations, how agents combine with human expertise, how overall underpin with responsible AI governance, our all of the framework, we are getting invited in more and more dialogues.

And then on the last deals that you have closed this year, what's driving that increase or the trend? Like are these like deals typically rebadging comp -- like do these deals have rebadging components, meaning that they are coming from clients in-house operations? Are these AI-led deals? What type of work you are -- you typically see in those deals?

Look, operations and maybe you're referring to talent transfer and others, it has been integral part of our model. And there is nothing special about that. Clearly, what is special that a lot more of our clients have begun to see that bringing -- we've been running these mission-critical operations, sometimes they are running themselves. But how we are bringing Agentic Operations in those mission-critical operations. Therefore, some of those demand spigots are opening up more. And we are getting invited into even GCC conversations that, hey, why don't you take up the center and run it for us because that's not what their expertise is and they are -- that expertise has begun to shine more and more.

And our last question will come from the line of Bradley Clark with BMO Capital Markets.

Just one from me. I think it's clear that trend with your business are strong right now and in the BPO industry with really strong pipeline, expected acceleration in ATS. And I guess I want to shift focus to like long-term durability, like the demand of customers needing help implementing a lot of different solutions, including your own solutions like your AP solution into these processes that had previously been mostly manual labor. And I guess I want to understand like what's the tail of these types of projects or services for client, i.e., like once you help them implement the solution, whether it be your AP agentic solution or a third-party agentic solution? How did growth come after that?

Yes. Look, I think these are -- and what I'm talking is more from an operator lens, what we see every single day. And fundamentally, it is -- when I'm talking about AP agentic solution or for that matter, record to report or insurance, these are just very initial solutions that are taking hold. And please understand each of these solutions are building recurring annual revenues for Genpact. And that's what the commercial model is. And these are clearly as we see it shaping the business in a very significantly different ways. And like I mentioned in my previous comment, more and more of our clients, especially mega deals, they have begun to see that the benefit of Agentic Operations, especially running finance, supply chain, some mid offices, claims operation, underwriting operations, banking operations, it is how we bring in agents with human expertise in a responsible AI framework so that they get enabled at the front end, they can gain market share and they can focus where they need to focus. So we really see this as a long-term change that is building a long-term business for us in a meaningful way.

And this will end our Q&A session. I will pass it back to management for final comments.

Thank you. Thank you, Carmen. Look, I just want to take the opportunity and thank all of the employees across the globe who make what Genpact is becoming possible. So my deepest thanks to all of them and most importantly, to our clients who are choosing Genpact and also to our shareholders for their ongoing support. 2025 was an incredible year, set us up for even better credible year in '26 and beyond and look forward to showing you more and more of that. And I really do want to thank you all. Thank you.

This concludes our conference. Thank you for participating. You may now disconnect.

Good day, ladies and gentlemen. Welcome to the 2025 Third Quarter Genpact Limited Earnings Conference Call. My name is Lisa, and I will be your conference moderator for today. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. The replay of the call will be archived and made available on the IR section of Genpact's website. I would now like to turn the call over to Krista Bessinger, Head of Investor Relations at Genpact. Please proceed.

Thank you, Lisa. Good afternoon, everyone, and welcome to Genpact's Q3 2025 Earnings Conference Call. We hope you've had a chance to read our earnings press release posted on the Investor Relations section of our website, genpact.com. Today, we have with us BK Kalra, President and CEO; and Mike Weiner, Chief Financial Officer. BK will start with a high-level overview of the quarter, and then Mike will cover our financial performance in greater detail before we take your questions.

Please note that during this call, we will make forward-looking statements, including statements about our business outlook, strategies and long-term goals. These comments are based on our plans, predictions and expectations as of today, which may change over time. Actual results could differ materially due to a number of important risks and uncertainties, including the risk factors in our 10-K and 10-Q filings with the SEC.

Also during this call, we will discuss certain non-GAAP financial measures. We have reconciled those to the most directly comparable GAAP financial measures in our earnings press release. These non-GAAP measures are not intended to be a substitute for our GAAP results.

And finally, this call in its entirety is being webcast from our Investor Relations website, and an audio replay and transcript will be available on our website in a few hours. And with that, I'd like to turn it over to BK.

Thank you, Krista. Hello, everyone, and thank you for joining us today. Q3 was another strong quarter for Genpact with revenue up 7% year-over-year, reaching $1.291 billion, exceeding the high end of our guidance range by $21 million. Growth in Advanced Technology Solutions continues to accelerate with revenue up 20% year-over-year. This is our fifth consecutive quarter of accelerating growth, reflecting strong momentum as we successfully execute on GenpactNext.

Gross margin of 36.4% and adjusted operating income margin of 17.7% also exceeded expectations as we continue to drive healthy margin expansion while making significant investments for long-term growth. And adjusted diluted EPS continues to grow significantly faster than revenue, up 14% year-over-year, reaching $0.97, $0.07 above the high end of our guidance range.

We continue to strengthen our foundation with GenpactNext. Growth in Advanced Technology Solutions is accelerating with Advanced Technology Solutions now driving more than half our revenue growth. Revenue per head count is also increasing, particularly in Advanced Technology Solutions, driving total revenue per head count higher. And incremental revenue is coming in at much higher gross margin in 2025. We expect all of these trends to continue longer term.

GenpactNext is designed to establish Genpact as a global leader in advanced technology solutions, building on strength of our core business services with accelerating revenue growth and expanding margins. Its growth model has 3 key elements: capabilities, clients and catalysts. We are executing well across each. Let me walk you through the highlights: first, our capabilities, which include advanced technology solutions and core business services. We hosted our second annual AI Day in September with nearly 200 clients and partners in attendance. Our message was clear. Genpact is defining the future of agentic operations. We believe that companies pivoting to agentic operations will redefine their industries, gaining market share and operating leverage by a factor, not a few points.

To support this vision of the future, we announced 3 major products at AI Day. The first is AI Maestro, a software platform for AI practitioners that enables faster adoption of AI into last mile business processes, driving measurable near-term ROI. We also announced 2 new agentic suites: the Genpact Insurance Policy Suite for commercial and specialty insurance designed to increase touchless clearance and deliver faster handling times; and the Genpact Record-to-Report Suite, which increases predictability and reduces enterprise risk in month and quarter end close processes. These announcements highlight the accelerating pace of innovation at Genpact and put us in an excellent position to gain further market share and momentum.

Our focus on delivering innovative results is also driving strength in data and AI more broadly. The AI Gigafactory is now supporting approximately 100 clients, up more than 2x quarter-over-quarter with a robust set of accelerators developed through GSolution.ai. We also now have more than 330 GenAI solutions in market, either deployed or going live, up more than 1.5x from the year ago period. These are full solutions deployed in live production environment, driving measurable business results for clients.

In terms of agentic adoption, our solutions for agentic operations are growing at an exponential rate, faster than any solutions in Genpact history with a strong product road map ahead. While it's still early days, agentic contract value is growing rapidly as well. Volumes are significantly higher than we spoke at our Investor Day in June with a healthy mix of contracts coming in from new and existing clients. Year-to-date, more than 30% of our awarded agentic contract value is coming in from new clients. For existing clients, both net revenue growth and gross margin expansion continue to trend in a positive direction relative to the stats we shared with you in June.

In Core Business Services, revenue grew 3% year-over-year with strength in Digital Operations and technology services, providing a solid foundation for future growth. Looking ahead, we see an opportunity to sharpen our go-to-market focus in decision support services to drive stronger execution and greater market share over time. We continue to invest in all 3 capabilities in Core Business Services to serve clients who are working towards AI readiness but who are not ready to launch agentic operations today.

Taking a step back. Advanced Technology Solutions and Core Business Services continue to amplify each other. Let me give you a couple of examples to illustrate. At AI Day, we were honored to have a number of large clients join us to share real-world examples of how Genpact's data and AI knowledge and last mile expertise are driving real business outcomes. I want to share 2 stories with you today with long-standing clients who started many years ago with us in core business services, who are now power users of advanced technology solutions in addition to remaining highly valued clients in the core.

The first is Mars, a family-owned business with more than $55 billion in annual revenue that produces some of the world's best loved brands. Our long-standing partnership has been built on operational excellence, trust, innovation and shared success. Mars started with us in 2018 as our Digital Operations client in finance and accounting and later expanded into other service lines.

Today, we have deployed a number of AI solutions that are delivering strong ROI with more slated to launch soon. As an example, we have built and deployed a team of autonomous GenAI agents that interpret, reason and act across the entire cash life cycle, delivering an increase in on-time cash collections and working capital improvements. The Mars team has been an exceptional partner for us.

The additional keys to our success have been our deep process intelligence; our industry depth working with some of the world's largest consumer goods companies; and our last mile knowledge, which, in this case, includes a detailed understanding of Mars technology, their operating environment, understanding of friction points and the years of operational experience that we have gained there. Our partnership has delivered significant value with hopefully our best years still yet to come as we work towards an agentic and increased autonomous enterprise.

The second example is Heineken, one of the world's most iconic beverage companies. We have had the privilege of partnering with Heineken for over 15 years. Over the past year, we established a data quality factory that sets new standards for delivering trusted data at scale. With agentic AI now infused through orchestrated agents on Azure and Databricks, we have taken a significant stride towards intelligence and autonomous data quality.

To deliver, Genpact brought more than just technology. We also brought process intelligence and understanding of how data flows in the Heineken ecosystem, how their markets operate and understanding of the friction points in various parts of the process. Early results show strong ROI with an improvement in automated data quality of up to 70% and 67% faster times to diagnose and fix data quality issues. The team has also reported better order fulfillment, fewer delivery failures, stronger compliance and more confident decisions. We are incredibly grateful for their partnership.

And finally, on catalysts, we continue to accelerate growth through investments in partnership and AI talent. In Q3, partner-related revenue grew 56% year-over-year. Partnerships represent an important opportunity for Genpact as demand for data and AI-led transformation requires deep process and domain expertise and integrated offerings. We are partnering with companies like AWS, GCP and Databricks to embed domain-led solutions into their tech stacks with joint go-to-market efforts and road maps.

At only 10% of revenue, we believe partnerships represent a significant growth opportunity for Genpact going forward. We also continue to invest aggressively in AI talent, rapidly accelerating the pace and quality of hiring in our Advanced Technology Solutions leadership team to support our strategic pivot. We continue to hire leaders with significant experience in data and AI, product development and technology consulting who are driving critical initiatives at Genpact, including our AI Gigafactory and agentic products. We are also developing thousands of AI builders and practitioners and remain on track to achieve the 2025 targets laid out at our Investor Day in June.

Now turning to guidance. With better-than-expected results in Q3, we are raising our full year outlook for revenue and EPS. Our expected revenue range is now 6.1% to 6.4% on as-reported basis, up from 4% to 6% previously, an increase of 120 basis points at the midpoint of the range. We are also raising our outlook for adjusted diluted EPS by $0.07 to $3.61 at the midpoint, reflecting double-digit growth.

In closing, we are incredibly excited about the future. Genpact is proving to be a clear partner of choice of AI-driven transformation with significant momentum as we leverage advanced technology solutions to strengthen our last mile advantage. I said earlier that we believe that companies that pivot to agentic will redefine their industries, gaining market share and operating leverage by a factor, not a few points. I believe that future exists for Genpact as well.

With that, let me turn the call over to Mike. Thank you.

Good afternoon, everyone, and thank you for joining us. Third quarter results exceeded expectations, driven by strong execution across our business. As BK mentioned, momentum continues to build with GenpactNext, and we are seeing our strategic investments starting to pay off.

Total revenue increased to $1.291 billion, up 6.6% year-over-year. Advanced Technology Solutions revenue, which includes data and AI, digital technologies, advisory and agentic solutions, accelerated again, up 20% to $311 million, with particular strength across data and AI solutions. Advanced Technology Solutions represents 24% of our third quarter revenue compared to 21% in 3Q 2024. Year-to-date, Advanced Technology Solutions has driven more than half of the total growth for Genpact.

Core Business Services, which includes revenue from Digital Operations, decision support services and technology services, increased 3% to $980 million, driven by strength in Digital Operations and technology services, which reflects continued demand for our deep operational and industry experience. This was partially offset by softness in decision support services, which we are actively addressing, as BK noted earlier.

Data-Tech-AI increased 9.3% year-over-year to $622 million, and Digital Operations increased 4.3% year-over-year to $669 million.

At a segment level, revenue grew 14% in high tech and manufacturing, followed by financial services at 3% and consumer and health care at 1%. Non-FTE revenue, which includes fixed fee as well as outcome deals, accounted for 47% of third quarter revenue, increasing from the prior year, benefiting from continued momentum in advanced technology solutions. Demand for our solutions continues to grow. We signed 5 large deals this quarter. As a reminder, these deals are over $50 million or greater in total contract value, and our pipeline increased from 2Q as clients look to us as partners to run and transform their businesses.

Turn to profitability. Gross margin expanded this quarter to 36.4%, up more than 70 basis points year-over-year, reflecting continued operating leverage against healthy revenue growth. Year-to-date, we have driven $242 million of incremental revenue year-over-year with $104 million of incremental gross profit over the same period.

SG&A expense as a percentage of revenue were 20.3%. Adjusted operating income for the quarter was $229 million, with adjusted operating income margin expanding more than 10 basis points to 17.7% as we continue to self-fund our strategic investments. Our effective tax rate was 23%, down from the previous year, reflecting geographic mix of earnings. Third quarter net income was $146 million, and diluted EPS was $0.83. Adjusted diluted EPS again grew faster than revenue to $0.97, up 14.1% from the same period a year ago.

Operating cash flow of $308 million includes a $45 million advanced client payment made in the quarter. Excluding this impact, operating cash flow was $228 million, up 15% year-over-year. Additionally, DSOs were 89 days. Third quarter ended with $741 million in cash and cash equivalents, down from $1 billion a year ago. As a reminder, 3Q 2024 cash included proceeds from a bond issuance, which we used to repay a bond maturity later in the year.

Even as we make significant investments to drive our pivot as an agentic and AI-led company, we continue to return significant amount of capital to our shareholders. This quarter, we returned $119 million to shareholders through $90 million in share repurchases and $29 million in dividends, bringing the year-to-date capital return to $272 million or 59% of free cash flow.

Turning to guidance. As BK mentioned, with another strong quarter of execution behind us, we are raising our full year guidance for revenue and EPS. For the fourth quarter, we expect to deliver net revenue between $1.298 billion and $1.311 billion or 4% to 5% growth, representing 4.5% at the midpoint. Advanced Technology Solutions is expected to grow mid-teens, driven by continued demand for data and AI. And we expect Core Business Services to grow in the low single digits at the midpoint. This translates into Data-Tech-AI and Digital Operations revenue of approximately 7% and 2.2%, respectively. We expect gross margin to expand to 36.4% and adjusted operating income margin to come in at 17.4%. We expect diluted EPS of $0.93 to $0.94 for the fourth quarter.

As a result, for the full year, we now expect to deliver net revenue in the range of $5.059 billion to $5.071 billion or 6.1% to 6.4% growth, with Advanced Technology Solutions in the mid- to high teens and Core Business Services in the low single digits. Data-Tech-AI and Digital Operations revenue is expected to be 9.2% to 3.6% at the midpoint, respectively.

Our full year gross margin is expected to be 36%, a 50 basis point increase from the prior year. Adjusted operating income margin is anticipated to be 17.4%, an increase of 30 basis points from the prior year. Our adjusted diluted EPS is now expected to be between $3.60 and $3.61, representing a 10.2% growth year-over-year. We continue to grow adjusted diluted EPS faster than revenue. Operating cash flow is expected to be approximately $650 million. This includes the $45 million advance payment in the third quarter from the client noted earlier.

On capital allocation, we continue to aim to return at least 50% of cash flow to investors through a combination of share repurchases and dividends while maintaining flexibility for strategic investments. More details on constant currency growth rates can be found in our earnings press release and fact sheet posted to our Investor Relations website.

Before turning the call over to Krista, I'd like to share a couple of early thoughts on 2026. First, we remain committed to the medium-term targets we laid out at our Investor Day, and we see potential for upside momentum continues to build, amplifying what sets us apart with advanced technology solutions as we define the future of agentic operations. Next, you should expect to see an increased emphasis on GenpactNext framework, particularly as we track our progress against our ambition to establish Genpact as a global leader in advanced technology solutions. And finally, we continue to execute across our businesses to drive sustainable growth, working with our clients to accelerate AI transformation that builds long-term partnerships and supports improved economics for both Genpact and our clients.

With that said, I'll turn the call over to Krista.

Thank you, Mike. Before we begin Q&A, I just wanted to quickly note that due to a family emergency, BK and Mike are taking the call from separate locations today. As a result, although we have tested to ensure a seamless connection, you may hear a lag or delay when they're speaking. If that happens, please bear with us as we do our best to get it corrected. Thank you.

Operator, we're now ready to take questions.

[Operator Instructions] Our first question today will be coming from the line of Bryan Bergin of TD Cowen.

I wanted to open up here just as it relates to demand. If you can comment on the bookings performance you saw here in the third quarter, give us a sense on that larger deal momentum, how you're feeling about that. And maybe just has it changed much as you've gone through October and into November?

Sure, Bryan. Maybe I'll pick it up, and Mike, feel free to add. So look, overall, demand signals, Bryan, continue to be strong across the board if I see various cohorts of the deal or I look at new clients, existing clients or even various segments. So demand signals continue to be pretty good be it inflows, be it pipeline.

And what I must also say that, look, sales cycles, especially for large deals, continue to be -- we are seeing a mix. Some are moving at an accelerated pace -- we closed 5 large deals this quarter -- especially given their size. And others are taking more time to close as we work through long-term transformational road maps, as our clients bake in all of the AI benefits into the deals. And by definition, as you know, large deals represent long-term strategic partnerships. And they have their own timing, own cadence and don't necessarily move with a neat 90-day increment or so. But we feel really good about the overall environment. And Mike, if you would like to comment a little bit more on the booking.

Yes. So first of all, I just want to comment a little bit more into that in total. We're seeing strong demand in both new and existing clients, and we remain committed to not just the full year guidance we laid forth earlier with 6.1% to 6.4% growth for the year, right? I just want to again reiterate our medium-term targets for '26 and '27 of growing at least 7% for those years, respectively, still remains on track, right?

With regard to bookings, again, strong pipeline, growing demand, right, will translate into what that revenue is going to be for the medium term. We'll evaluate everything else on a go-forward basis, but we feel really good, particularly about our medium-term targets for the next 2 years.

Okay. Okay. Very good. And then my follow-up, just around GenAI and agentic contracts and the result in revenue and kind of margin impact. So you mentioned contract values continue to move higher. You're obviously talking favorably about the revenue being at higher margins and ATS having higher growth in margins. Is there any framing you can help with there? At the Investor Day, you talked about kind of the aggregate 300 bps higher margin. Any context you can share around that number as far as is it still in that type of range? Is it changing in any direction?

Sure, Bryan. Overall, we feel very good with how agentic contract value is shaping up. We really see this playing in a very strong fashion with no artificial intelligence without process intelligence, as our clients lean in more with trusted partner like us, as we need to implement more complex tools, they need the office expertise, the last mile. And now specifically on the stats, stats continue to trend in the positive direction as well. And what we are really pleased is about the awarded agentic contract value, as Mike noted and I noted earlier, that 30% of that is coming in from newer clients as well, and that's a significant number. And that has improved from that particular day as well, as well as the 300 bps or the growth of -- with our existing clients. So it's all moving in the positive direction.

Yes. So if I could just quickly add on, BK, just to kind of sum it up, Bryan, for you. So BK alluded to when we talked directly about 30% of the awarded agentic contract value year-to-date is coming from new clients. That's a significant number, right? As we move continuously through the year, we're very proud of -- BK talked about the 300 basis points or 3% accretion in terms of total revenue. On a year-to-date basis, we are tracking above that number. That's something we're quite proud of.

And the next question will come from the line of Maggie Nolan of William Blair.

Can you help me understand maybe when your clients are not ready to launch agentic operations, what are the primary reasons there? And then anything you can share about how penetrated you are in your client base with the agentic operations offerings and then your expectations for the pace of adoption from here?

This is a long-term trend, Maggie, and it will take much longer to translate. However, we are taking it in a very strong fashion with all of our existing clients, new clients. And for new clients, not surprisingly, a lot of times, their data sets are not ready or the process standardization still has to happen. And it's not just about the technical debt. It's the process debt and the data debt. And you see that in our advanced technology solution because our data and AI set of solutions is really taking hold in a very, very strong fashion. And we got to meet our clients where they are, and that's certainly helping us be it from our core business services or also nudging them towards advanced technology solutions, including agentic but feel really good with all of our existing clients and new clients in taking this agentic journey and reshaping the industry as well as leading the industry from an agentic operations standpoint.

Yes. I may just add on to that, BK, Maggie. The way we think about it from our clients, right, they're looking for a trusted partner, and they found that in Genpact, right? They need our process level or domain level expertise as they move ahead on their journey, particularly that -- with agentic.

But I think it's important, what BK spoke about a minute ago. We need to meet them where they are in terms of their process. I can assure you, we are as aggressive as everybody else can be in pushing agentic solutions and enhancements in technology. But again, it has to be a comfort level that our clients need to have. So we feel very good about both the progression we're making in our core business services and our advanced technology services, and I particularly feel good about the process we've made in our agentic solutions growth.

And then in light of some consolidation in the industry as well as maybe more traditional ITO increasing their focus on things like agentic operations, can you just comment on the competitive landscape for you right now and your positioning?

Look, I think -- sure. Look, I think, again, where our differentiation lies is in the last mile expertise, understanding the domain, the process expertise of where the friction points are, and that is where we have spent just about 3 decades maybe. And then the trust that we have built with a number of these clients, a number of these are Fortune 500 clients as you know. And now we are investing heavily in the advanced technology solutions at that edge issues, and we are bringing software at those edge cases that sits on top of many of standard platforms as well as APIs that we have built with systems of records like SAP, Oracle and so on and so forth.

And I would also say that the culture matters a lot. And I think we win a lot because of our strong and distinctive culture of, obviously, client centricity but also the start-up mentality that exists and that innovation is taking shape with a ton of speed and agility. So we really feel good about our differentiation, and it's showing up in the numbers in what we are executing on from an organic basis and are really proud what teams are doing.

And our next question will be coming from the line of Surinder Thind of Jefferies.

BK, can you maybe provide some color on why maybe upwards of the 30% of agentic work or the awarded contracts are coming from new clients? Is there -- it's hard for me to reconcile given that you would have had much stronger relationships with your existing clients. So what's allowing the win? And kind of what is going on there?

Yes. So overall, Surinder, there is a strong traction building up with existing clients, too. But what I'm also super excited, that a number of our -- these agentic solutions are taking hold with new clients, too, who are net new to Genpact or are net new to that particular agentic solution. And sometimes those -- they are running these processes or working with other partners. So that is what we are serving as new clients.

And -- but I must note that it is our existing clients are also absorbing these solutions fast, not fast enough. I'm nudging -- we are nudging them more. But clearly, all of these are taking hold and therefore, tells us about the total addressable market that we have begun to attack more and therefore, really thrilled with how this AI is turning as a tailwind for us and increasing our total addressable market.

Got it. And then, I guess, when I think about just the Advanced Technology Solutions offering, can you maybe talk about the size and scope of those projects and maybe the cadence of how those work, meaning from initial interest to when they convert to revenues and then how quickly you can execute a project and then maybe what the follow-on might look like?

Yes. I think first, I would go back, Surinder, on one of the core metrics that we shared for Advanced Technology Solutions, which we called at the Investor Day 2x, 2x, 70, 70. And the 2x was it is growing -- Advanced Technology Solutions are growing 2x the rate of the total company, and they are revenue by head count greater than 2x of the total company. And 70% is annuitized. Nearly 70% is annuitized is the point I was wanting to address in that question that you asked. And 70% is non-FTE, and therefore, more value accretion happens for Genpact, too.

And these are series of -- as an example, if I think of agentic solutions, these are -- we have the launch, as we talked about agentic AP Suite. And it is one of the fastest solution in the entire history of Genpact that has taken hold, and that is with existing clients as well as new clients.

And then data and AI, which is another part of Advanced Technology Solution is growing at a very rapid pace because now a lot of our data demands or the data capabilities are getting leveraged. I mentioned in my prepared remarks about how nearly 100 clients are in our gigafactory, which delivers better ROI on all of the data program and projects. And most of these data programs -- I mentioned Heineken. Heineken data program is a longer-term program. It is not a 7-month effort or 10-month effort.

Our next question is coming from the line of Puneet Jain of JPMorgan.

Really good quarter. I want to follow up on the question that Maggie asked earlier. So first, like it was nice to hear like the case studies on agentic AI. But like are clients ready to move some of those solutions and ideas into production and overcome concerns around governance, change management, in some cases, data and like the technology around that AI solution that they intend to implement?

And Puneet, that's where the question of trust comes in. That's where the question of last mile comes in. That's where when we have built over decade-long relationships. I mentioned Heineken or Mars or many other examples that you saw even on the Investor Day. We shared about the WESCO example on the Investor Day, where we used to run accounts payable, but we know the ins and outs. We know how their entire organization is wired in, how the workflow is wired in, where the data issues are, where the friction points are, what are the change management issues in the client organization.

So as we implement more complex technologies, you see our clients certainly need trusted partners, is why we are seeing all of this take hold in production environment for our clients. And that is the exact thesis. I talk about no artificial intelligence without process intelligence, and our last mile expertise is creating the most acute differentiation.

And how are some of these contracts structured? We hear like all types of models like the subscription models that some companies are exploring. Like how are you structuring some of these contracts when you manage like a process using your own or third-party identity AI solutions?

The commercial models, that's why we -- as part of GenpactNext, we are very clear about non-FTE models. So that's a shift that we are driving in a very sharp manner towards non-FTE models. And this is our software. So wherever there is a software, there are more subscription ARR-based, early days, but they are more value and consumption-based structure and not resource-based structures.

Quickly add on to that, just to emphasize the point, Puneet, this is our software. This is our IP, right? So we're able to convert it into an ARR-type model, right, and move away from all non-FTE-related commercial models associated with it, which is just logical if you think about it from a software perspective.

Yes. No, that's great to hear. And if I can quickly follow up on that, like do you intend to disclose like how much of revenue stems from those models or specifically or purely from agentic AI-based solutions?

Yes. I mean, it's Mike again. So metrics focused on leading indicators are the best measures we have of the business health right now. So when we go through our 2026, expect to see a more focus on GenpactNext-related metrics, particularly that on our ATS, our Core Business Services, and non-FTE revenue as a percentage are really the key indicators we're going to focus on right now.

[Operator Instructions] At this time, I'm not seeing any more questions in the queue, and I would like to turn the call back to management for closing remarks. Please go ahead.

Thank you, Lisa. I do want to thank you all for joining us today. We are incredibly excited about the future at Genpact as we continue to define the future of agentic operations. And I do want to thank all of our employees for their unstinted efforts as we drive this change and take this opportunity to thank all of our clients for choosing Genpact and yes, all our shareholders for their ongoing support. We look forward to speaking with you again next quarter. Thank you.

This concludes today's conference call. Thank you all for joining. You may now disconnect.

Citi Tech Conference. I'm Bryan Keane. I cover the IT services group here for Citi. And we're excited to have Genpact. And in particular, we have BK here, who is the CEO and long a time, how many years at Genpact?

Let's say, over 2 decades.

So a couple of decades, yes from the beginning. So BK, he knows Genpact from the beginning. So, what we'll do is I'll ask a series of kind of fireside chat questions, and then if there's any in the audience, just go ahead and feel free to raise your hand, and we'll get to it. So with that, BK, thanks for being here.

Thank you. Thank you for having me here, Bryan, I really appreciate that.

So let's start with the most obvious place to start, which is just the overall demand environment for IT services. And maybe you could talk a little bit about the last 12 to 18 months and kind of where we are today and maybe any kind of vision going forward for just demand for IT in general.

Sure. So look, I think maybe let's just a little bit go back to what are in many client conversations that I have been and what our clients seeing? What are they saying? And if I was to summarize Bryan, clients are talking a lot about value creation, not only about cost of productivity. They are not. Yes, they always talk about it, but they are talking more and more about value creation.

Clients are talking a lot about AI. It's a change over the last 12 or 18 months. It wasn't there prior to 18 months or 24 months ago. And I think from AI standpoint, if I just go take a little bit of that particular leg of conversation, more and more about the conversation in technology or AI is, hey, how does it create more value? And that's where a little bit of our resonance is increasing because we've been known for process. We've been known for data. We've been known for domain specific functional areas or verticals or sectors like insurance or banking or consumer goods or manufacturing.

And there is -- I often say, internally now externally as well that there's no artificial intelligence without process intelligence. And that has begun to resonate a lot with the clients. And clearly, as we see it in our pipeline, and we shared with investors about advanced technology solutions. We are seeing more and more of conversations in that area and how advanced technology solutions or how all of that particular conversation is enabling clients to be on the journey of artificial intelligence or the client conversation that is happening.

So the move now towards value creation, does that bring in a little more top line growth thinking? And is that a little more discretionary spend? Or how would you characterize that?

Yes. So I think when I talk about value creation, I think from a client standpoint, there is certainly a conversation on how they gain market share in their spaces, in their end markets. And therefore, conversation is a lot around -- top line conversation is a lot around value creation by generating more cash from them -- for them from a DSO, DPO standpoint. So there is a more conversation as to how AI or any of these new technologies, along with the process can enable better value for them. Obviously, cost is always stable stakes.

So Genpact, I think, has consistently outgrown the IT services peers over the past couple of years. When you look at some of the peer growth rates in IT services, versus the way you guys are growing, especially on the top line. What do you think are the differentiating factors that's caused Genpact to be kind of a leader in some of the growth rates?

So look, I think we have had a very strong foundation, strong foundation of the capabilities of process and data, strong foundation of operational discipline, a strong foundation of client centricity, a very strong culture. And a combination of that, along with this turn and recognition of how domain is enabling, the ROI of investments is helping us put great scores on the run board.

And really thrilled and proud of the team as to how execution is stacking up as we progress. And it is, be it in the pipeline, be it in the conversion, really feel glad as to how team does technical.

Great. I wanted to go back to the Analyst Day in June where Genpact unveiled the new go-forward growth strategy, I think GenpactNext was a particular focus on the Advanced Technology Solutions, ATS that you mentioned in the previous question. And ATS now consists of data AI, digital technologies and the agentic solutions.

My first question is just how did the growth of these businesses grow lower than the company growth rate for the first 3 quarters of fiscal year '24 and now is growing mid-teens at 17% in the second quarter. I guess that's a dramatic shift and I would have thought that those businesses would have still been growing at a higher rate.

Yes. And GenpactNext, we all collectively looked at our business and GenpactNext represents a very clear growth model, growth model, which is centered around our capabilities, our clients, our catalysts that enable these clients on a foundation of a strong culture. And the shift that you're talking about, Bryan, is clearly the shop shift that you saw is based on our recognition along with our clients as to what are their needs, where we are aggressively investing, which is advanced technology solutions.

You named a few of the key capabilities in there on data and AI or digital solution where a lot of partner revenue happens or all of the advisory related to how to create value for our clients and emerging agentic solutions. So all combination of this is really shaping the business in a very significant way, almost building a new Genpact within Genpact.

And again, core business services, including digital ops, continues to be a very strong foundation where we run mission-critical processes for our clients. So it stays at a very critical foundation as we are continuing to progress. So I really feel proud about how Advanced Technology Solutions, we actually reported last quarter that grew 17% year-on-year. And we have also mentioned for '26 and '27, it will grow at least 15%, and we feel really good about that.

I noticed that there was some moderating inside of data tech and AI since you're -- the Advanced Technology Solutions, it's accelerating. What is the call out there that might be moderating inside Data-Tech and AI?

I think overall, what is advanced technology solutions. It represents our highest value, highest revenue generating for FTE and a pretty strong margin profile. That is the bouquet of services that is getting classified and getting accelerated growth. All of -- a lot of core business services and some sit in Data-Tech-AI and decision support services are still FTE-based models, a lot of advanced technology solutions, 70% of it is non-FT-based model.

And in core business services, be it decision support, some of the technology work or digital ops work that we do is still based on FTE-based model, which we are progressing towards a lot of as non-FTE, but they are mission-critical processes, and I think we are also rotating a number of that into advanced technologies.

Yes, I was going to ask about that because I think the percentage of revenue from ATS has increased a couple of points over the past year, but it's still a small component of the business. But at the same time, we've seen a small change in that mix of non-FTE and core business services, especially digital ops. So you basically see it offset in the total revenue mix. So with that said, over time, I think you're alluding to, we would expect the non-FTE to become a larger part of the mix as ATS also grows as a larger part of the mix. Is that -- would that hold true?

You're exactly right. We are nearly -- half of our business, actually, 46% of our business is non-FTE. And when we say non-FTE, it is fixed transaction-based and outcome-based in that order. And this proportion is increasing, but advanced technology solution already represents, Bryan 70% as non-FTE. And as that accelerates, you will see acceleration on non-FTE in the entire franchise.

Got it. So let's get to the big debate in IT services, which is how GenAI is going to impact the IT services industry. I know you heard when GenAI first came out, it was -- BPO was going to be the #1 market that was going to change and potentially be for the worse. You guys seem to have held that off pretty well. And then there's a lot of peers in IT services seem to be struggling and growing revenue.

So there's kind of this cloud over the whole industry. Can you just talk about how you see the debate where it started with BPO as being a call out in particular? And then -- are there some areas inside of IT services that are definitely going to be impacted more negatively for deflationary revenue purposes from GenAI versus some other areas of strength that you guys might be showing?

So many questions in that.

Yes. Yes.

So look, all of this conversation is AI conversation is far more nuanced than just one paint brush. And as we've been consistently talking about because we are seeing that in our pipeline, actually, we've been talking about that for almost last 6, 8 quarters. That AI is a clear tailwind for us, and we have now started to demonstrate that a little bit more. And I spoke about -- first I'm just more responding to us, and then I can talk about the industry that there is no artificial intelligence without process intelligence. You have heard this term technology that a lot.

And the conversations that I have always with clients is about the process debt, of the data debt, unless until that process debt and the data that is liquidated, you don't get ROI on the technology debt. You don't liquidate the technology debt.

And that's what we are consistently seeing that in our pipeline and kind of aligns with our strategy. I mean if I recent -- I'm pretty sure all of us have seen that recent study that came out of MIT. It exactly is -- that came in maybe last month. And in June, we were exactly talking about it. It's just using different words. It's talking -- what we spoke about in our June Investor Day.

Now they are going back to the -- and I think that's why you see our conversion. But if I go back to now specific things like coding, customer experience, these are not work that we do in codes, but those are the things that are possibly getting impacted a little bit more from an IT services standpoint, if you said just about the application coding or whichever way.

But clearly, domain is shining. The last mile -- understanding the last mile understanding the nuances, understanding the flow of work, understanding the friction points, how the flow of work will evolve, you cannot identify if you do not understand the exceptions. And you don't need to just understand the exception, you need to be following a rigorous methodology and I'm referring to Lean, Six Sigma and many of the methodologies that we have followed over years, over decades, you need to be benchmarking them.

You need to be figuring out how to standardize. And all of that domain expertise, all of the data expertise that process geekiness is shining as what you see as a differentiation from us.

So the original comments that came out about and you still hear it in the industry that BPO is in trouble because of GenAI because of all the cost savings and synergies, how come we haven't really seen it as a major negative in your guys' results? And is there some fear that in some BPO areas that there could be cannibalization of some of the revenue?

Look, I think, again, I'll go back to the mission-critical processes that we run. When I say mission-critical processes, we showcased many of them as real client examples on our Investor Day, Bryan, as an example, running supply chain for a large CPG company, running or doing closing of books of many large Fortune 500, 400 clients that we do for living. Some of these mission-critical work and which is less -- which is different than a customer experience or taking call.

And at a broad level, you can just call everything a particular thing. How do you identify those mission-critical processes and build trust with clients? And that's where the domain expertise and how you run some of these processes is different versus more transaction-based processes, which are, hey, maybe taking calls or coding, which is not what we do.

And when you think of GenAI and the productivity gains, do you do you need to pass some of those savings along to the client as well and then maybe make it up with either other projects or more volume?

Yes. So I think again, we shared some of the experience on the Investor Day, where -- as we are identifying and I must say it's early days, we are seeing the volume, our scope or new logos increase our TAM and SAM, while -- and therefore, revenue accretion certainly our gross margin accretion and operating margin incretion.

Now having said that, I think we have been pioneers in sharing productivity and giving productivity to clients, and we will continue to be holding that position. But again, this is a one science that Genpact has, where as we give more games to our clients, how do we continue to raise the revenue profile as well as margin profile for them.

Yes. I want to talk about partnerships. That growth has been a big part of the outperformance for Genpact. I guess the first question I always get to, is why wasn't Genpact doing partnerships earlier. It's not a brand-new company. So -- and it's obviously had a big impact. So how did that become such a focus and turn the growth engine for you guys?

So look, I think it's a fair question, and partnership was always part of Genpact. I think our approach changed. Earlier partnership was solving for our particular client problem. And we have now, for the last, let's say, a couple of years adopted approach that it is a catalyst of our growth.

With all the innovation that is happening in the partner ecosystem, we are just bringing that as a key catalyst of our own growth also creating more value for clients, more value for partners, certainly more value for Genpact. And I think it is changing the approach, I won't say partners were not part of our ecosystem. They were part of our ecosystem for a long time.

Our approach was to solve our particular client problem versus kind of scaling it up and using that as a catalyst for growth of both our top line.

And it's certainly -- you've seen it in the results it's had a delta change. Is there more room to grow there to keep that kind of that delta change growth for you guys, partnerships being a big avenue of growth going forward?

Yes. So partnership grew last quarter at 70%, 70, but on a small base. We are about 10% of our total revenues are now partner influence. And I think we are in very early innings of that. We'll see continued momentum in this direction.

And maybe get up to 20% or more of total revenue?

Yes. We are -- I think we are in very early innings of it, very early innings of it.

Got it. After the first quarter, Genpact cut its guidance due to the large deal slippage and supply chain and tariff-related uncertainty. And then you guys raised guidance back in the second quarter, almost to the same EPS. So I guess, maybe hindsight is 2020 here. But maybe, was it necessary to cut because you're almost back at the same spot. I mean did you wish maybe you decided to wait it out and let some of the uncertainty go away?

So look, I think let's go to our guidance philosophy first, okay? It is steep and prudence. And we always want to steer everybody to the most probable outcome. And I think if you back us up to Q1, I think it was also sharing transparently with our investors and the analyst community of all of our client conversations that are happening. Yes, it had a component of a few deals that had concentration of digital ops that moved by, let's say, some number of months.

But fundamentally, prudence, fundamentally, hey, where we most probably we will land, and I think we are writing an exceptional story. Bryan, as I was just walking here and sharing with you, and I don't want numbers to be getting ahead of us and really thrilled if you look at the execution that we are doing -- that the team is doing and the runs that we are putting on the scoreboard. And I think really feel proud about that.

Has the large deals closed at a more normalized rate now than the slippage you had seen?

Yes. So I think we are happy with how the cadence is progressing. We reported in the second quarter, we reported -- we closed our four large deals, and we continue to make progress in this quarter.

Got it. If I look at the reported results for the first half of '25, Data-Tech and AI is growing that healthy double digits. But digital ops has slowed to 4% with third quarter '25, if I look at the guide at the midpoint, I think it's about 2.3%. So as Data-Tech and AI, obviously, the advanced tech growth is carrying a lot of that business, but I'm a little surprised that digital ops is kind of just moderating a little bit. Can you talk a little bit about what's happening in that business for the back half of this year? And then what gives you confidence that you can get that business back up to your long-term targets?

Yes. Look, I think first comment I'll make that I want us to think about the total revenue growth of the company, not because clients don't buy from us, neither digital ops, not Data-Tech-AI and not advanced technology solutions, not code, they don't buy any of these things from us.

Client conversations is, hey, these are the issues or these are the solutions and how do they gain advantage out of that. Okay? We do that revenue disaggregation for giving more transparency to all of our constituents. And therefore, my first task is really to see at the total revenue growth. And yes, we feel really confident about our midterm broad targets that we are putting off at least 7 as we think of '26, '27.

Now I think, as I mentioned, I think there are, as I mentioned, about Q1, certain revenue dissertation is digital ops and that digital ops was this particular deal that is getting a little bit moved this quarter or that quarter, and we are not running the company for a quarter. So I feel really good about overall revenue growth of the company and where we are taking the entire franchise and how we are rebuilding the new gen.

Right. So because of the demand, if the demand comes in through ATS, advanced technology, you're not going to -- you're not going to worry about it as long as the whole revenue growth is hitting the targets versus digital ops, which maybe obviously is a little less demand right now.

Exactly.

Got it. I wanted to ask and go back to thinking about the agentic solutions, the change in your model positively and how that doesn't cannibalize digital ops in the core business. Can you talk a little bit about that?

Yes. I think really pleased, just in February, we launched our first agentic Solution, and now we are building a whole blown agentic road map as we do the intentional disruption and take those innovations to our clients. And given that last mile advantage that we have of understanding the domain, understanding the exception, understanding the flow of work, understanding the friction points and really figuring out what are the right agents.

And as an example, in accounts table, now a number of these agents are live in client environments. And we understand this particular domain. And in accounts payable. I think we have started is actually within that accounts payable, there are four specific different types of agents that kind of do the entire end-to-end work. And these are still simpler transaction. And now you think about procurement, you think about supply chain.

And those are the domains that we understand really well or I can pick up in insurance. We have also launched claims agents, prebuying underwriting agents. So a number of these agents in or in banking, KYC agents. So a number of these agents as we build the agentic road map.

We are really feeling good about all of the expertise that has been gained over the last over 3 decades to shape the new Genpact.

So what's the revenue model there? How do you guys charge for those solutions?

First thing is all of it is not on any FTE-based model.

Yes, that's for sure.

A number of these are -- and we are handholding our clients to go through the journey. A number of these are also on ARR based. It's still very early days, and I'm very pleased with how the teams are progressing on ARR-based models, but they are fixed -- some of -- a lot of them are transaction-based with minimum volume.

Some of them are also outcome based. So I think it's a combination of various. And it also depends, Bryan, where the client is because then I was speaking to our client CEO yesterday of a medium-sized bank. And they were very excited. And I was telling him in the boardroom this conversation is good. When I'll come to the procurement, they want a different model. So I think it is also driving chain management with our clients.

Yes. And that it's going to take some time, I think, right, to develop. Genpact in its history has shown just a little bit of operating leverage kind of consistently. And as big contracts came landed, sometimes the margins would stay more flattish. But you guys recently just raised your adjusted operating margin targets to 17.4%.

I think the mid -- the midterm targets call for about 25 basis points of margin expansion going forward. So what's driving now the leverage when traditionally, we talked about that revenue growth brought flattish to down margins with large contracts. Now we're seeing some leverage in the model?

Look, I will say that -- and I have been in the company for a very long time. I don't think -- I mean, barring our particular event in early 2010s, we have never dropped margins. And yes, large contracts come with their puts and takes. But at a company level, we have never dropped margins, barring a particular event that happened early 2010s.

And I think operational discipline is picking up far more. It's always been a strong forte of Genpact, and it is showing up more and more. And I think as we move towards agentic, as we move towards advanced technology solutions, which are more higher-value services and higher-value solutions, that is aiding the margin profile, too.

And we are one of the companies that gives the gross margin guidance to possibly one of the only company that does that. And we have demonstrated the progression in there as well. And again, investing heavily through self-funding to really shape the company.

Is GenAI showing up in the margins yet or not necessarily?

It's early days Early days. Is it kind of contributing massively? I won't say that. But it is really pleased again how that is getting shaped.

Can you talk about what your appetite would be for acquisitions down for M&A activity? And maybe if you go down that path, what would be some of the types of assets that you would target?

Look, staying very disciplined about capital allocation, and I think we have shared our thesis actively with all of the constituents on capital allocation.

I'll take an example of XponentL that we closed in the second quarter. And it is proving to be really terrific acquisition. And if I was to talk about three attributes in there. So on the surface, it looks like, yes, data acquisition, which it is, but it has obviously from a data strategy standpoint as well as data execution.

But it is seeped into domain, domains that we were, in any case, strong with, so it adds to our strength. It is also a really strong partner with a few of the key partners that we had chosen. So it ticked many, many boxes. We also are very careful about the culture that we onboard. And I think we believe that they are really terrific culture. And now 3 months in almost, it is really proving to be a terrific acquisition of the asset. And I think we will always be on a lookout of a very disciplined process, very look out for where we can accelerate our journey in this data.

Is there more assets for sale now than usual? Or is that not necessarily the case?

It stays a pretty competitive market, I would say that. for the right asset, it is, there is always a lot of competition. And for us, we are very clear as to what are the areas that we really need to ramp up on and are constantly evaluating both organic or inorganic route to accelerate.

If you have a question, just raise your hand and we can bring a mic to you. I wanted to ask about overall pricing in the environment. Obviously, some of the peers, as we talked about, are struggling more than you guys are. Are you seeing people having to drop price or be more aggressive in some of the deals that you're seeing?

Look, I think if I overarchingly look at, we don't see -- we do not see at a broader level, irrational pricing behavior in our sector. Now in one particular deal, somebody did something and that's always been the case. It's not just kind of a scenario for 2025. But we do see at a more broader level, rational pricing versus whatever you might be getting in our kind of domains and sectors and functions.

Got it. So the investor base we've had 6, 7, 8 presentations in IT services and then Genpact obviously being a little bit different. What do you think BK investors are missing the most when you kind of explain the Genpact story?

Thanks for asking that question.

It's a good wrapping question here as we got -- you got 60 seconds here to answer that one.

Look, I think, I would say, as I mentioned, AI is more nuanced. And no artificial intelligence, no gain from artificial intelligence without process intelligence. And unless until you liquidate process debt, data debt, you will not be able to liquidate technology debt.

And I think all of that thesis and last mile expertise, understanding flow of work, understanding domain. I think I referred to this MIT report. One of the other elements that was mentioned there, unless until you have trust with the clients, and we have built just over a 3-decade trust with Fortune 500 companies, many of them.

And I think all of these components and then culture. Culture is very difficult to -- I think it is -- when I asked many of the clients as to why did we win? You'll be surprised 70%, 80% of the time, it is because of the culture. It is not just our capabilities.

It's not certainly -- I mean, we talk about prices never. I have never heard all because your price was great, okay? And culture of client first, relentlessly client first. And they -- I mean, even if it's a new client, they always do the reference checks because these are large deals, large relationships. Culture of entrepreneurial agility, culture of learning, and these are very tough to replicate. And I think it is not understood well about Genpact.

Okay. With that, BK, we'll keep it there. Thank you very much.

Good day, ladies and gentlemen. Welcome to the 2025 Second Quarter Genpact Limited Earnings Conference Call. My name is Lisa, and I will be your conference moderator for today. As a reminder, this call is being recorded for replay purposes. The replay of the call will be archived and made available on the IR section of Genpact's website.

I would now like to turn the call over to Krista Bessinger, Head of Relations -- excuse me, Head of Investor Relations at Genpact. Please proceed.

Thank you, Lisa. Good afternoon, everyone, and welcome to Genpact's Q2 2025 Earnings Conference Call. We hope you've had a chance to read our earnings press release, which was posted on the Investor Relations section of our website, genpact.com. Today, we have with us BK Kalra, President and CEO; and Mike Weiner, Chief Financial Officer. BK will start with a high-level overview of the quarter, and then Mike will cover our financial performance in greater detail before we take your questions.

Please note that during this call, we will make forward-looking statements, including statements about our business outlook, strategies and long-term goals. These comments are based on our plans, predictions and expectations as of today, which may change over time. Actual results could differ materially due to a number of important risks and uncertainties, including the risk factors in our 10-K and 10-Q filings with the SEC.

Also during this call, we will discuss certain non-GAAP financial measures. We have reconciled those to the most directly comparable GAAP financial measures in our earnings press release. These non-GAAP measures are not intended to be a substitute for our GAAP results. And finally, this call in its entirety is being webcast from our Investor Relations website, and a replay and transcript will be available on our website in a few hours.

And with that, I'd like to turn it over to BK.

Thank you, Krista. Hello, everyone, and thank you for joining us today. Q2 was another strong quarter for Genpact with revenue reaching $1.25 billion, up 7% year-over-year, reflecting broad-based outperformance across the business.

Gross and adjusted operating income margins were also strong, up 50 and 40 basis points year-over-year, respectively, as we continue to deliver margin expansion while also making significant investments for long-term growth.

Importantly, adjusted EPS continues to grow faster than revenue, up 11% year-over-year, including reaching $0.88 above the high end of our guidance range. At our Investor Day in June, we introduced GenpactNext, our strategy designed to establish Genpact as a global leader in advanced technology solutions, building on strength of our core business services, to accelerate revenue growth and expand margins. The Genpact next growth model has 3 key elements, which we call the 3Cs. They are, number one, our capabilities. which include what we go to market with, across our advanced technology solutions and core business services; number two, our clients, which include who we serve across both the enterprise and mid-market; And three, our catalysts, which include how we plan to further accelerate growth through investments in partnerships and AI-focused talent. We are seeing strong early momentum across each.

Let me walk you through the key highlights. First, on capabilities. we have 2 sets of distinct but interconnected offerings, advanced technology solutions and core business services. These offerings amplify each of them. Why? Because as you have heard me say before, there is no artificial intelligence without process intelligence. We are capitalizing on this opportunity by integrating advanced technologies into what Genpact has always been known for, exceptional process, industry domain and last mile expertise. This quarter, Advanced Technology Solutions revenue which includes data and AI, digital technologies, advisory and Agentic solutions continue to accelerate up 17% year-over-year, driven by strength in data and AI, as we continue to help clients rapidly deploy AI systems into production.

Our data and AI pipeline has tripled over the last year, and we are innovating rapidly. The AI Gigafactory is now live across all Genpact verticals with more than 45 clients onboarded year-to-date and more than 100 experienced data and AI leaders joining us to help our clients rapidly scale AI. We now have more than 270 gen AI solutions in production environments with clients, either deployed or going live, up more than 3x year-over-year. Our Agentic solutions are also gaining traction. All 4 modules of our Agentic AP suite are now generally available, and we are delivering measurable results with more accurate data capture, greater touchless processing and significant productivity benefits for clients and for Genpact. The AP suite is just one example of how our advanced technology solutions are creating more value for clients and generating high-value revenue for Genpact.

Our Advanced Technology Solutions delivered more than 2x revenue per head count compared to the company average and are growing at more than twice the rate of Genpact's overall revenue. Approximately 70% of Advanced Technology Solutions revenue is annuitized and approximately 70% comes from non-FTE commercial terms, making it high quality, sticky, and strategically aligned with our future direction. And while we are sharing AI-driven productivity gains with clients, incremental revenue is coming from expanded scope increased volumes and entirely new logos, driving net revenue growth. Second, on clients. We are very proud of our enterprise and mid-market clients, many of whom shared firsthand at Investor Day how our advanced technology solutions are driving meaningful value.

Today, I want to share 2 additional stories with you that demonstrate how we are leveraging advanced technology solutions across both the enterprise and mid-market to build intelligent, agile operations for our clients. The first is a leading global health care solutions company, serving patients and providers for more than 125 years. As a strategic partner, Genpact has modernized the company's new product introduction and installed base functions to excel in the rapidly changing environment. We are now integrating gen AI and Agentic AI into the company's product life cycle and reducing time to spend on routine engineering work through gen AI-based documentation and leveraging Agentic AI frameworks to proactively track and manage compliance across our rapidly evolving regulatory landscape. Our AI-powered solutions and industry domain expertise are enabling a more agile and innovative approach to launch new products and managing them in the aftermarket, resulting in faster time to market, enhance compliance and sustained product quality around the world.

The second example is a large property and casualty insurance broker in North America. We are partnering with this firm to modernize its operations using AI and other advanced technologies. Our partnership will transform their policy life cycle operation, leveraging intelligent automation, identic processes and scalable operating models to drive greater efficiency, scalability an enhanced experience for their retail partners and carriers. This work speaks to the strength of our leadership in insurance sector and our focus on empowering high-growth mid-market clients with scalable, repeatable AI solutions.

And finally, on Catalyst, we are further accelerating growth through investments in partnership and AI-focused talent. Partnerships represent a significant growth opportunity for Genpact. Partner-related revenues grew more than 70% year-over-year in quarter 2, representing 10% of total revenue. we have achieved top-tier partnership status with AWS, Salesforce and ServiceNow. Our joint solution portfolio is also expanding, further differentiating Genpact and accelerating pipeline growth. Today, we offer joint solutions for financial clients with AWS Bedrock, order management with sales force, sourcing and procurement with ServiceNow, just to name a few.

To further advance our capabilities, we are also collaborating with start-ups like Instabase for intelligent document processing, [indiscernible] for responsible AI adoption and so on and so forth. We also continue to make significant investments in AI talent, accelerating our pivot to advanced technology solutions with a focus on AI builders, experts who build AI solutions and AI practitioners domain experts claim to use AI in flow of work for client processes.

Now turning to guidance. With better-than-expected results in quarter 2, we are raising our full year outlook for revenue, adjusted operating income margin and EPS. Our expected revenue range is now 4% to 6% on as-reported basis, up from 2% to 5% previously. We expect adjusted operating income margin of 17.4%, up from 17.3% previously, and we are raising our outlook for adjusted diluted EPS by $0.08 to $3.54 at the midpoint of the range. In closing, we are incredibly excited about the future as we reshape Genpact to be an AI-first company. Momentum is building as we leverage advanced technology solutions to strengthen our last mile advantage and position Genpact as a clear partner of choice for AI-driven transformation.

With that, let me turn the call over to Mike.

Good afternoon, everyone, and thank you for joining us. Results for the second quarter exceeded our expectations with broadband strength across our businesses. Total revenue grew to $1.254 billion, up 7% from the prior year, driven by organic growth. Data-Tech-AI represented 48% of total revenue or $599 million and grew at 10% from the prior year, driven by continued strength in data and AI. Digital operations revenue of $655 million was up 4% year-over-year, driven by strong execution in deal ramps. Digital operations accounted for 52% of total revenue.

At Investor Day, we introduced 2 additional revenue metrics to track our progress against our GenpactNext strategy, Advanced Technology Solutions and Core Business Services. Advanced Technology Solutions revenue of $293 million was up 17% year-over-year, reflecting strength in data and AI. Core Business Services revenue of approximately $962 million was up 4%, primarily driven by digital operations. This quarter, Advanced Technology Solutions represented 23% of total revenue. We closed 4 large deals in the second quarter, including one that was pushed out from the first quarter. All the remaining large deals are pushed out remain active. As a reminder, large deals are $50 million or greater in total contract value. We also continue to expand our footprint, both in enterprise and mid-market clients. Our pipeline remains strong and balanced across mix of deal sizes with both Advanced Technology Solutions pipeline up nearly 1.5x year-over-year. Revenue grew across all segments, led by High Tech and manufacturing at 13%, followed by Financial Services at 6% and Consumer and Healthcare at 1%. Non-FTE revenue, which now includes outcome, consumption and fixed fee deals accounted for 46% of second quarter revenue, in line with the period a year ago.

Turning to profitability. We expanded gross margin by 50 basis points year-over-year, reaching 35.9%, driven by operating leverage. SG&A expenses were 21.2% of revenue. Adjusted operating income was $217 million, and adjusted operating income margin expanded 40 basis points to 17.3%. Our effective tax rate for the second quarter was 24.9%, in line with the prior year. Net income for the quarter was $133 million and diluted EPS was $0.75. Adjusted diluted EPS was $0.88, up 11.4% year-over-year. Operating cash flow was $177 million, down from $209 million in the prior year. Additionally, DSOs were 91 days. We ended the second quarter with $663 million in cash and cash equivalents, down from $914 million a year ago. As a reminder, 2Q 2024 included proceeds from our bond issuance, which were used to repay a bond maturity later in the year. We've returned $60 million to shareholders in the second quarter through $30 million in share repurchases and $30 million in dividends.

Turning to guidance. With our strong second quarter performance, we are increasing our guidance range. For the full year, on an as-reported basis, we now expect to deliver net revenue in the range of $4.958 million to $5.053 billion or 4% to 6% growth. At the midpoint of 5%. Data-Tech-AI and digital operations revenue is expected to be approximately 7.4% to 2.9%, respectively. Given that estimated range, our adjusted diluted EPS is now expected to be between $3.51 and $3.58, representing 8.1% growth year-over-year at the midpoint, again, projected to grow faster than revenue. To provide additional details on reaching our 5% midpoint of our full year revenue guide, we need to deliver $238 million of growth for the full year. of which roughly 70% has been delivered in the first half. That leaves 30% or $76 million to be delivered in the second half.

Moving on. Our expectations for full year gross margin remained at 36%, a 50 basis point increase year-over-year. Expectations for adjusted operating income margin are now 17.4%, a 30 basis point increase from the prior year. Operating cash flow is expected to be approximately $610 million. On capital allocation, we continue to answer return at least 50% of cash flow to investors through a combination of share repurchases and dividends, while maintaining the flexibility for strategic investments. As a reminder, the exponential acquisition, which closed in June is now included in our guide and is not expected to have a material impact in 2025 results.

Turning to third quarter. On an as-reported basis, we expect to deliver net revenue between $1.258 billion and $1.27 billion or 3.9% to 4.9% growth, representing 4.4% at the midpoint. This translates into Data-Tech-AI and Digital Operations revenue of approximately 6.7% and 2.3%, respectively. We are now anticipating a margin of 36% and adjusted operating income margin of 17.5%. We expect diluted EPS of $0.89 to $0.90 for the third quarter. More details on constant currency growth rates can be found in our earnings press release and fact sheet posted to our Investor Relations website.

In closing, we're excited about the future. We remain committed to growing adjusted diluted EPS faster than revenue, expanding margins while self-funding investments for growth and maintaining a strong track record of returning cash to shareholders.

With that said, I'll turn the call over to Krista now.

Great. Thank you, Mike. Operator, we're ready to go ahead and take questions. Thank you.

[Operator Instructions] And the first question that I have today is coming from the line of Bryan Bergin of TD Cowen.

I guess the first one I have is just as it relates to pace and conversion of new bookings, you had noted a deal was signed ahead of the Investor Day. Just any further traction you've seen there as far as pipeline conversion goes and whether any prior tariff-related delays are showing? .

Maybe I'll start. Mike, feel free to add. Thanks, Bryan. Look, overall, inflow and conversion and pipeline continue to be in a very healthy state, Bryan, are really pleased with the execution and innovation and investments that we are doing to fuel innovation. Specifically on the deals that we spoke about in quarter 1. As Mike said in his prepared remarks, we already closed one of them, and we closed many of the large deals or a few other large deals in the second quarter. And both the large deal or overall pipeline continues to be in a pretty healthy state. Mike?

The only thing I'd like to add is that we closed one of those deals in the first quarter, as BK talked about, and we had 3 other large deals in a different cohort that weren't delayed that closed in the second quarter. We're still in active dialogue with those deals, and we expect them to come to fruition within the year.

Okay. Okay. Good. Second question on gen AI, just anything the latest you can share about that net impact of gen AI from traditional contracting on your base business? And have you got any incremental details on the range of outcomes that you may have across engagements. .

Yes. I think as, Bryan, you may have noticed during our Investor Day, we shared a little bit of a detailed illustration of how a lot of this Gen AI and Agentic implementations are shaping up our franchise. And it pretty much stays in the similar range, and it was the demonstration of how AI is a clear tailwind. And we continue to see that progress reasonably well. And I think how -- if I look at the pipeline, be it from a Data and AI standpoint or gen AI standpoint, the pipeline is actually a proportion from advanced technology solution continues to be actually at a very, very healthy stage and really thrilled as to how we are shaping the curve of the business, especially with our investments in this innovation.

Yes, if I can just tap on to that, right? So when we think about it, we laid out, we gave an illustrative example that BK alluded to earlier that we had in our Investor Day. But the way to kind of think about it is -- we are sharing the AI productivity gains with our clients. That's to be expected. But we are seeing incremental revenue coming from a number of sources, including expanded scope, increased volumes or both as well as new logos, that on top of our ability to do it and enhance our margins makes it very accretive for Genpact, both top and bottom line.

And the next question is coming from the line of Surinder Thind of Jefferies.

BK, can you maybe just talk about a bit more about the Advanced Technology Solutions, the pipeline there, maybe how quickly that converts and just kind of the length of the projects that we have a better understanding of that segment reporting, given it's one of the new pieces of data that you're providing?

Yes. Thanks, Surinder. Look, overall, it's our revenue desegregation, just specifically on advanced technology solution. As you -- as I just find the pipeline is actually growing at a much healthier pace overall and through across various components of advanced technology solution. Conversion is tad faster. And as I mentioned, including at the Investor Day or in my prepared remarks today, it is greater than 2x our revenue by head count and is growing certainly north of 2x of the overall company average. And on your specific question on the length of the contract, 70% of all of advanced technology solutions approximately is [ annuitized ] and also non-FTE.

Got it. That's helpful. And then just kind of following up when I think about the growth rates from a segment perspective, it looks like you had nice growth across each of the verticals. Any additional color that you can provide there? Obviously, it seems like we've seen a pickup in professional services. Just any color on how we should think about the demand environment there at the segment?

Look, overall, again, very pleased with the execution and total growth being 7% year-over-year on pretty decent comps. High Tech and manfacturing, and it is High Tech and manufacturing, we don't split it out, grew 13%, as Mike mentioned in his prepared remarks. Our Financial Services 6%. And yes, Consumer Healthcare was 1%, some concentration of macro-sensitive customers specifically. If I look at the pipeline, pipeline across cohorts, be it cohorts of the deal or cohorts of verticals, cohort of geos, continues to be in a pretty strong and pretty healthy stage and really pleased with the strong execution that the team is demonstrating along with our clients.

Yes. So the only thing I'd like to add to that is that we delivered 7% growth for the quarter, right? And then we are seeing -- we're beginning to see the benefits of the strategic investments we've made that we've self-funded in the business. that's really reflecting in really our revenue disaggregation, particularly that we're quite pleased with the 17% in Advanced Technology Solutions, which BK talked about in the previous question, 70% nuitizeis saying we're really proud of.

And the next question is coming from the line of Jacob Haggarty of Baird.

Congrats on a good quarter. I just had a question quick on sequential trends. So at the midpoint of your Q3 guide, it implies below sequential trends, which would then mean that Q4 would have to be sort of above what's normal for you to hit the top end of your guide. Is that something that's possible if you hit the midpoint? Or are you guys going to have to kind of lower the top end there? What are your thoughts on that?

Yes. It's Mike. So again, we feel really good about our guide in terms of the range. Again, the way I'd like you to think about it. So at 5%, which is the midpoint of it, right? First of all, we haven't changed our approach on how we guide, right? I think they really change on a sequential basis. So again, using just simple math, at 5% growth at the midpoint, right? We need to deliver about $238 million for the year, as I talked about. 70% of that has already been behind us. So if you then can extrapolate that, the other 30% is about $76 million. And again, we feel good about being able to achieve that certainly at the midpoint of the range. And we'll ultimately see about execution and client involvement that potentially could push us above that number.

And we continue to be prudent about how we guide and how we deliver.

Got you. And then just a quick follow-up. So I appreciate the disclosures on Advanced Tech Solutions and Core Business Services. Just looking back at 2024, really -- Advanced Tech Solutions started to really accelerate in Q3. And since then, Core Business Services has been decelerating. Is that a trend that you expect to continue? I know we start to hit tougher comps in the back half for Advanced Tech Solutions. Like how are you viewing the interaction between those 2 growth rates?

Yes. So I'll kick this off, BK, and then maybe we'll hand it over to you for some additional high-level comments about it. So if we harken back to our Investor Day, which had about 6 weeks ago, right? We gave out our targets for the midpoint. But the way to kind of think about it, we are thinking about our ATS business growing at least 15%, right? And our core business is growing at 4% to 5%. And some of that is really driven by the rotation out of core business services as we pivot into advanced technology solutions. And again, you're correct to assume -- correct the point out, the acceleration we had late last year and throughout this year in Advanced Technology Solutions. And that really pinpoints back to the investments we've made in that revenue category. And we're looking at hypercharging that on a go-forward basis. And that's really what's reflected in our guide for this year and for our medium-term guide.

And there will be some variability in comps and numbers that might come through, and I won't overread into that. but fundamentally really pleased with all of our investments that we are making in Advanced Technology Solutions, how it's ramping up. But I will also center the argument a little bit on total revenue growth. that we continue to deliver at -- amongst the top end profile of -- in our sector.

And the next question will be coming from the line of Sean Kennedy of Mizuho.

So how should we think about the net new versus existing accounts mix for genic solutions currently? And how can that mix change over time?

Look, I think point number one, Sean, I would say, really pleased with the book of business and the clients that we have, be it in enterprise or mid-market, and we are continuing to take these innovative solutions to all of these clients. And all of these clients are adopting a different pace depending upon where they are in their journey. And what we are seeing is clearly all of these solutions taken up by new logos as well, a little bit more actively. So really pleased as to how be it the Agentic or Data and AI solutions are in our pipeline, fueled by both existing clients as well as newer ones.

Great. And then also, could you share how upon conversations for the rest in the last few months from early April on tariffs, you say, was it a brief all followed by a quick reengagement or are clients sold generally more cautious?

Overall client conversations continue to be more centered around data and AI and how all of this can actually generate ROI for all the investments they are making. We all talk about technical debt and some of my conversation is always about the process that and the frame that I always say that, hey, there isn't any benefit of artificial intelligence, if there is not process intelligence behind it. And I think a lot of that differentiation is coming to life.

Yes. If I can just add on to that for a quick second. So a lot of our customer conversations remain really healthy for us. So that's something we're super proud of, and it's reflected in our guide. The macro remains somewhat muted, right? It has clarified a little from the paralysis that we've seen in the earlier part of the year. We remained somewhat cautious and prudent with how we think about it on a prospective basis. But our guide really is how to think about it from reflecting it, particularly that in Advanced Technology Solutions as we're seeing enhanced demand for that.

The next question will come from the line of Puneet Jain of JPMorgan Chase.

Good quarter guys. My question is around like AI. Like are there any processes or verticals, regions where AI adoption is higher than others? And do clients typically go with their existing vendors and they're trying to bring AI in their business processes? Or are they okay, like looking back new vendors, like the vendors who can bring more AI solutions than their current providers okay?

Yes. Thanks, Puneet. Overall, I would say -- maybe I'll address your second question first. What we see, as I was mentioning earlier, a very strong demand from all of our existing clients. as well as newer clients. And I think the last mile expertise beat of end-to-end process ownership, deep domain or operational data, operating at scale, is shining through, especially when we are investing in technology at that last mile and shining the differentiation further. And clearly, we see an uptick there, and that's what you see in our Advanced Technology Solutions results and I think even as you progress within this quarter. And then our investments in partnerships is further accelerating that. More on your question on, I think, look, I would say it is across sectors. Clearly, Financial Services by how they experiment at a much faster pace. But we are seeing even manufacturing, high-tech or even consumer companies are really not behind. Maybe from a geography standpoint, U.S. is -- continues to lead more. Australia is ahead too, so is Europe. I think it's more broad-based, I would say.

Got it. And can you also comment on pricing environment, whether AI is accelerating some of the pricing pressure or if you are seeing any instances of any of your competitors pursuing deals and being irrational in pricing at all?

So I won't say -- Mike, you look at pricing also far more closely. I don't see any irrational pricing behavior at all, Puneet. And clients are actually getting more focused on value, not just also cost. And clearly, we are shifting the needle on non-FTE models as well, and we spoke about Advanced Technology Solutions nearly 70% non-FTE and more consumption-based structures or -- so I think I -- we don't see any irrational pricing behavior. Mike?

No, I don't see any rational pricing, favor. The one thing that I would continue to point out that you just alluded to is the delivery from FTE legacy models is now shifting at a faster pace to non-FTE or outcome-based models or any flavor of that pricing, which I think is really healthy for us and also healthy for the industry as a whole. .

[Operator Instructions] And our next question will be coming from the line of Bradley Clark of BMO Capital Markets.

I want to ask about the midterm target of 7% growth and sort of how we relate to the year 2026 given your guide for the second half does imply some further deceleration. And I just want to understand about what you guys are seeing on the pipeline and large deal bookings that you closed in the quarter. that help give you confidence in that acceleration from sort of where the second half is laid out here to that 7% growth target that you laid out at Investor Day? What could help go by to get the number back up?

Yes. So again, at our Investor Day, we highlighted at least 7% growth for the midterm, which is '26 and '27, right? We continue to build momentum in our business. The pipeline remains very healthy and conversion rates that BK alluded to. We'll provide some bookings information at the end of the year. But if you're really double-clicking on what will the impact be of potentially these -- this cohort of delayed large deals really has no effect on our view either for this year or for next year. We continue to execute extremely well in the existing deals that we have as well as where our pipeline lies.

Yes. Maybe 2 comments to add we stay -- continue to stay prudent about our guide and don't want numbers to run ahead of us. And we remain confident of our medium-term targets that we laid out at Investor Day. And if you look at last x number of quarters, we continue to perform at the top end of our services sector.

I have another question that will be coming from the line of Maggie Nolan of William Blair.

This is Maggie Nolan with William Blair. I wanted to see your thoughts on as we continue to see how these trends with AI develop whether or not you're seeing a little bit of a convergence between what would have traditionally been considered IT services and what have traditionally would have been considered just given that AI is more comprehensive, there seems to be an appetite for larger, more comprehensive deal sizes that touch data and process in all of these different areas. Is that something that resonates with you as you think about a multiyear vision for the company? And how is Genpact responding to that?

Thanks, Maggie. Look, I think I will first speak to our strategy, Maggie, and our strategy of known as last mile experts, be it from a process, domain, contextual data, operational data and operations at scale and applying investments in technology on this differentiation that has been core to us. And I think that has begun to shine more and more. And like I typically say 2x, 2x, 70/70, I think it's getting shown in nearly now 1/4 of our revenue, growing at 2x the rate of the company and the 70% annuitized and 70% non-FTE models and 2x revenue by headcount. Look, I think we do believe that for clients, clients don't think about BPO IT. Clients are looking for who is providing them value, who is underwriting the value. And I think that's where the industry domain running operations at large scale, knowing the last mile, I think, has begun to shine more. I don't know if that answers your question.

Yes. That's helpful. And then also on kind of a multiyear time line. Obviously, you've talked about this a little bit in the past, but can you elaborate on the ability to drive revenue and kind of decouple that to some degree from head count? And then what type of investments are most important for the head count that does remain as you perhaps invest a little bit less in head count to drive the same amount of revenue?

Sure. So maybe two-part answer as I think about what you asked. Look, I think first thing all this transformation is not happening overnight. It is a multiyear transition and transformation. We are wanting to take all these solutions to our clients. And we've got to meet where our clients are and kind of also while we accelerate their pace, but we also need to kind of walk with them and kind of set up the data pipeline set up the infrastructure. And I think we are in that early phase. Now I think -- so multiyear, as we have said, I think we gave certainly medium-term targets of at least [ 7 ]. And as we think from a workforce standpoint, Maggie, we said that there are only -- as we progress, there will be only cohorts of people in impact. AI builders or AI practitioners. We set up some near-term targets as well we shared at the Investor Day and really pleased as to how the talent makes and how our talent is really adopting all of these new technologies and new techniques at scale. And I mentioned about our culture as well and one attribute of the culture is learning attribute that has always been Genpact, and that is really, again, taking shape in a more fundamental way now.

And there are no more questions in the queue. I would like to turn the call back over to management for any closing remarks. Please proceed.

Thank you Lisa. Look, I want to thank you all for joining us today and my heartfelt thanks to our incredible employees for all of their hard work. We are very excited about the future of Genpact. As we look ahead, we will continue to leverage advanced technology solutions to strengthen our last mile advantage and positions impact as a partner of choice for AI-driven transformation. I also want to take this opportunity to thank all of our clients for choosing Genpact and all the shareholders for ongoing support. We look forward to speaking with you again next quarter. Thank you.

Thank you for joining today's conference call. This does conclude today's meeting. You may all disconnect.

Good afternoon, everyone, and welcome to Genpact's 2025 Investor Day. I'm Krista Bessinger, the Head of Investor Relations. And I want to thank you all for joining us. Today is an important day for Genpact. As you can see on the agenda, you're going to hear directly from BK, Mike and the rest of the leadership team about the transformational work that's underway. And the clear financial and strategic road map that we're executing against. Before we begin, just a few items to note. First, to submit questions remotely, please e-mail us at [email protected]. Second, today's remarks will include forward-looking statements. As always, these are subjects to risks and uncertainties as described in our filings with the SEC and in the materials on our Investor Relations website. Third, we'll reference non-GAAP financial measures and reconciliations to the most directly comparable GAAP financial measures are available in the materials on our Investor Relations website as well.

And finally, a reminder that today's event is being webcast, and a replay and presentation materials will be available on our website shortly after the event concludes.

And with that, I would love to hand it over to our CEO, BK Kalra, to share his perspective on how Genpact is executing against the opportunity ahead.

Thank you, Krista, and welcome, everybody in the room and on the webcast on Genpact's Investor Day 2025. Before we dive in, I want to take a moment to reflect on Genpact's extraordinary journey, one I have had privilege helping guide since our spinout from GE when we shaped the BPO industry. Within just participate in the formation of the category, we defined it and later scaled it. Today, as third CEO in our history, I believe we stand at another defining moment. My mandate and my passion is to lead Genpact into its next chapter, to pivot and grow as an AI-first data-led innovation company. And this transformation is already underway.

Three powerful engines are fueling this next chapter. First, our growth model, built for relevance and resilience is helping us proactively manage the transition to artificial intelligence. Core elements of our growth model include capabilities, clients and catalyst. Second, our world-class team with the mindset and skills needed to shape what's next. These are few of the key leaders, building future of Genpact. They will be on stage and at the networking event later today. And most importantly, our enduring client relationships with some of the world's most iconic companies. We are proud to partner with more than 125 Fortune 500 companies. Of these larger clients, many have been with Genpact for over a decade. And today, you will hear directly from a few of them.

These engines of growth, these powerful forces are fueling our pivot. We are building a fundamentally new company at Genpact and defining what it means to be an AI-first company, powered by process and industry domain expertise that delivers impact at scale, fundamentally a new company. To better understand our pivot to AI, it's important to first revisit the foundation that we are building on. Over 25 years ago, we were GE's global capability center, and our mission was to perfect, and I mean perfect, a set of shared business processes using Six Sigma and other rigorous methodologies. The work was highly detailed, operationally complex, and it built our fundamental DNA as a business process expert. We were called process geeks, data geeks, including myself. And we went through tough Lean Six Sigma black belt certifications. The discipline around process, around data, around continuous improvement, around industry domains shaped how we think, how we challenge and how we build. As we scaled, that mindset remained at the center of who we are and it defines our culture.

The end-to-end view of the processes, the ability to benchmark using this granular data and our operator-led approach together from what we call process intelligence. It is this foundation of what positions us to lead in the world of artificial intelligence. And I often say this, there is no artificial intelligence without process intelligence. And this deserves a second breath because it is the essence of our journey. There is no artificial intelligence without process intelligence. And it is not just a sound bite. It is what we experience every single day. And this is a critical point because Genpact's depth in business processes and industry domains isn't just essential, it is not just valuable, it is super essential today. Why? Because technology alone doesn't create business value. To truly move the needle, you need to understand how businesses run, the workflow, the data, the friction points, the bottlenecks, you need deep process expertise and understanding of data and domain insights to unlock real outcomes with AI and that's where Genpact's strength lie and that turns potential into performance.

Our pivot to AI and agenetic solutions presents an exciting opportunity for Genpact. According to Gartner, by 2030, more than 50% of GenAI models will be domain-specific, tailored to an industry or a business function, up from approximately 5% last year. GenAI solutions must go beyond generic applications to deliver targeted domain-specific value that address unique challenges within each industry and function. Our extensive industry domain positions us as an ideal partner for developing domain-specific and contextually relevant GenAI models.

We operate in a large, underpenetrated and growing market. And Genpact's unique history positions us to capture this opportunity. Our total addressable market is over $1 trillion and growing. And within the areas we choose to play, our clients consistently recognize us as 1 of the top 2 partners. They trust to deliver real impact.

As we accelerate our growth, we are expanding into new markets with AI-led solutions and overall agentic solutions, unlocking opportunities that didn't exist just a few years ago. This is our chance, not just to scale, but to lead and shape the next wave of value creation for our clients.

Looking back at our last Investor Day, we committed to deliver 10% top line growth and shared medium-term targets across key metrics. While we delivered on all other metrics, we fell short on revenue. We recognize it, and we do not take it lightly. Therefore, to help focus and rebuild our momentum, we built our 3+1 Execution Framework at the beginning of 2024. 3+1 focus Genpact on partnerships, DataTech AI, simplification and ours +1, which is leading with Genpact as our own best credential for AI-led transformation and we call it Client Zero. Client Zero also provides us a front-row view of what it takes to adopt and scale AI. While every company aspires to be an AI-first company, it's much harder to do than to say.

Companies face common set of challenges in adopting and scaling and delivering meaningful value from their AI investments. And there are many common pain points. Data is fragmented, not curated for AI, business and technology teams are not fully integrated, systems that are not orchestrated to work together and scalable AI-ready talent is in short supply. We have designed new set of solutions to solve these business problems head on, bringing together the capabilities, orchestration, and last-mile domain understanding required to unlock real value from AI, and I'll talk more about that.

Our clients know us for our domain expertise and process excellence, which has established our reputation as last-mile experts. Now as we thoughtfully invest in advanced technologies, we are not just adding capabilities. We are amplifying what already sets us apart. It's early days, but we are seeing clear momentum. Our technology investments are accelerating the impact of our domain strength, Lean Six Sigma Foundation, creating a flywheel that compounds over time. This elevates last-mile execution to new levels and helping us deliver sharper, faster and more scalable outcomes for our clients. It's a distinctive position where deep operational know-how, meets innovation. And it's enabling us to drive real-world business value like never before.

We have already spoken about our 3+1 Execution Framework, which helped strengthen our foundation and rebuild momentum, but it also laid groundwork for our next phase. Today, we are bringing together full set of Genpact strength, the process and industry expertise, rich operational data with context and our ability to manage last-mile exceptions for our clients. And we are adding a force multiplier and that force multiplier is advanced technologies. And therefore, our strategy is simple, yet powerful. Integrate advanced technologies, especially AI and supercharge what we have done best, process, domain, operational data. That is simply our strategy. This strengthens our differentiation and deepens client trust as we take on greater accountability for delivering real business outcomes. As we integrate advanced technologies, we remove friction, address inefficiencies at the point of execution and deliver targeted, scalable interventions that drive real impact.

To reflect this progress, we are evolving from our 3+1 Execution Framework to what we call Genpact Next. Our strategy centered on our new growth model designed to scale value for our clients and for us. Genpact Next is focused on innovation and growth. Genpact Next is designed to establish Genpact as a global leader in advanced technology solutions, building on strength of our core business services to accelerate growth and expand margins. It has a few key elements, including our growth model, which includes our capabilities, what we go to market with. Our clients, who we serve as we grow, and catalyst, how we plan to further accelerate growth. Riju, our Chief Growth Officer, will cover this in more detail just in the next session.

You may be familiar with us in areas of data tech AI digital operations. We have consistently shared with all of you the revenue desegregation based on both data tech AI, digital operations, while we continue to operate and engage in the market through our vertical segments. Today, we are sharing 2 new terms with you, advanced technology solutions and core business services.

First, advanced technology solutions. As Genpact pivots towards AI-led solutions, we have identified the most innovative, most impactful and differentiated capabilities across our business and brought them together under 1 unified umbrella we call advanced technology solutions. Advanced technology solutions has 4 differentiated capabilities, data and AI, digital technologies, advisory and agentic solutions. Advanced technology solutions apply new technology to our established core competencies of process, industry knowledge and our understanding of operational data. This enables Genpact to solve client problems that drive growth and enhance productivity. As we help clients unlock productivity and better outcomes, we are evolving our commercial models too. Our commercial models are moving to non-FTE-based structures while preserving the annuity and long-term nature of our contracts.

The second term, core business services. Genpact's core business services defined as decision support services, technology services and, of course, digital operations, provide a solid foundation for future growth. This visual shows how data tech AI, digital ops intersects with both advanced technology solution and core business services. With agentic solutions, driving our rotation from digital from core business services to advanced technology solutions, we transition Genpact to an agentic-first managed solution model, and this creates more value.

And as you can see, here is the revenue disaggregation of Datatech AI, digital operations, advanced technology solutions, core business services, and this number is for FY 2024. Our advanced technology solutions designed to solve high-value complex problem for clients also deliver premium revenue for Genpact. Advanced technology solutions already account for about 20% of total revenues and are growing rapidly. You will hear more about our solutions, our differentiations from Sanjeev and Ginsuk, who are leading our deployment efforts.

Another element driving our pivot to become global leader in advanced technology solutions is Genpact's strong and distinctive culture. While our culture has many dimensions, as you can imagine, 4 standout as truly foundational to who we are and how we win. First, relentless client centricity, an unwavering focus on solving what matters most. It's embedded in our DNA, and you will hear it directly from many of our clients today. Start-up mentality, our leaders are hands-on and roll up their sleeves, stay hungry and our teams act with a sense of ownership. And I love our bias for speed and agility. In a world that moves fast, we move faster. And our ability to adapt quickly is a core advantage for us and of course, an active learning mindset. Continuous learning is also embedded as a strand in our DNA, and is what enables us to move ahead in fast-changing AI technologies. These cultural anchors deeply rooted, actively lived, allow me to tell you a story of one of the long-standing client, Unilever. We are incredibly proud of our partnership with Unilever, a company with remarkable legacy and bold vision for future.

Together, we have embarked on a transformative journey, first, by reimagining their global plan-to-cash operations as part of running the have global supply chain operations. And in the last couple of years, we expanded and started to help them redefine their supplier operations. By leveraging technology and AI, we help Unilever run and operate both hands off critical interaction points, on 1 side, tens of thousands of suppliers, and on the other core operations on the customer side to drive efficiency and effectiveness. And this is what we refer as mission-critical operations.

Together, we have co-created global process models, deployed world-class technology and focused relentlessly on improving both customer and supplier experience. This collaboration reflects our shared commitment to build intelligent, agile and scalable model.

Let's now hear from Steve McCrystal, Unilever's Chief Enterprise and Technology Officer, on our journey together.

[Presentation]

Well, thank you, Steve, and the entire Unilever team for interesting us with mission-critical operations. Really proud and really proud of helping Unilever drive its AI-enabled journey. They leverage both our core business services and advanced technology solutions.

Many of you know us for delivering lower cost of ownership. Today, our advanced technology solutions are extending that advantage by embedding AI into the deep expertise we have built over decades in process and industry domains. But to our clients, including Unilever, we are also known for something more precious, delivering outcomes, real measurable business results that we take ownership of and we are driving these outcomes faster. All of this is powered by more than 25 years of operational experience and the millions of transactions that we run through the year across industries. And now we are applying these advanced technologies to this operating moat.

Our advanced technology solutions not only create more value for our clients, they also generate high-value revenue for Genpact. These solutions deliver more than 2x the revenue per head count compared to the company average and are growing at more than twice the pace of Genpact's overall revenue. What more, 70% of the revenue is annuitized and 70% comes from non-FTE commercial models, making it both high-quality, sticky and strategically aligned with our future direction. We plan to further accelerate the growth of advanced technology solutions with significant investments in product development, sales and partnership this year.

We have referred to growing base of agentic solutions. And you might ask where are these coming from? Well, many are coming from digital operations. We are proactively pivoting our business to agentic, and, to date, successfully driving net revenue growth despite increasing productivity commitments. We are doing this through higher transaction volume and/or increase scope within existing accounts. We are also driving incremental revenue from entirely new logos for these agentic solutions. Although it's a small sample size today, all agentic deals signed to date in aggregate are driving net revenue growth for Genpact. These are early days. We may see productivity ask increase in future. We have accounted for this in our prudent medium-term target. And ultimately, our performance will speak for itself.

Looking ahead, we believe we are extremely well positioned to accelerate revenue growth and expand margins as we build momentum in the key areas of Genpact Next. Mike will walk you through more details later, including how we are investing to drive growth while improving margins, how investors should track our progress with new KPIs and our medium-term targets.

Look, I would want to leave you with this. We have a clear and focused strategy. We are building momentum with Genpact Next across capabilities, clients and catalysts. We are innovating at scale through advanced technology solutions. And with our strong foundation, we believe we will accelerate revenue and expand margins. We stand at a pivotal moment for our company and our industry. My role and that of this leadership team is to lead, is to grow and to pivot Genpact to become a global leader in advanced technology solutions. We are challenging our own playbook with intentional disruption to create more exponential value for our clients and for our investors. We are not just participating in our category, we are defining it, we are building it now and you will see us scale it. This is Genpact's moment and we are all in, ready to lead, ready to win with Genpact Next.

Super excited to have you all here. And I will now pass the baton to our Chief Growth Officer, Riju Vashisht, who will expand on our growth model in Genpact Next. Riju, take it away.

Thank you, BK. And this truly is Genpact's moment. I'm delighted to be here. Good afternoon. My name is Riju, and I serve as Genpact's Chief Growth Officer. In my tenure with Genpact, I've had the privilege of leading operations and driving digital transformation. Over the next few minutes, I'm going to share with you the growth model that powers Genpact Next.

For 25 years, we have earned our reputation inside boardrooms of enterprise clients who have trusted us with their mission-critical operations. These are household names, and we have delivered these operations for them for 25 years. The Genpact growth model builds on this foundation. The model covers 3 Cs: capabilities, clients and catalysts that work together to drive momentum. Capabilities are what we go to market with, clients are who we serve as we continue to grow, and catalysts are how we accelerate this model to grow further. I'll now walk you through each of the 3 Cs of this model and starting with capabilities.

Our capabilities are 2 sets of interconnected offerings that amplify each other, core business services and advanced technology solutions. Core business services, our foundational offerings that include decision support services, technology services and digital operations. Let me give you a flavor of the type of work we do here. In decision support services, we handle over 50,000 sanction screenings daily, helping some of the world's largest financial institutions comply with the latest regulations. In digital operations, we run one of the largest finance and accounting third-party operations, which means that our teams execute book closures for thousands of legal entities every quarter. That is more than what companies experience in their entire lifetime. We've earned the reputation for running these services with precision and consistency. These services deliver last-mile knowledge to us and data-rich environment, which help us scale advanced technology solutions. And advanced technology solutions is where this gets really interesting. Every transaction we touch, every process we run and every anomaly we fix generates data-driven operational insights. And our advanced technology solutions are built on this foundation.

As BK mentioned, our advanced technology solutions have 4 distinct offerings. These are, data and AI, digital technologies, advisory and agentic solutions. Our data and AI capability is rooted in operational expertise. When you are processing millions of transactions every day, you develop an informed understanding of how data and AI can develop, drive the biggest impact for you. We have developed over 1,000 domain and industry-specific models, each trained to address specific business problems that we've solved through hands-on work over the years. The second one, digital technology. This leverages our process mastery. Most digital transformation efforts fail because they lack process understanding. And as process geeks, we know exactly where processes break down and how digital solutions can fundamentally change them. When we deploy an accounts receivable automation solution and configure it, we know the industry-specific variations and the customer payment behavior that is going to make the maximum difference. Why? Because we have processed millions of these transactions and this process mastery truly differentiates us.

Our advisory services are built on industry intelligence. They are driven by a practitioner's perspective, which is rooted in decades of operational depth. Clients choose us not because we are observers, but because we have lived it, scaled it and optimized it. And we guide our clients through transformational change as practitioners and owners who know realities of each domain. This results in trusted advisory relationships.

Finally, ageentic solutions. Our agentic solutions are powered by our last-mile knowledge. We believe that we are pioneering the future of business operations. Agentic solutions fundamentally reimagine how work gets done. We are architecting entirely new ways of working, where autonomous AI agents handle routine decisions, manage complex workflows while humans do higher-level activities. And we know it is hard to do. Our agentic solutions possess unique competitive advantage. Last-mile operational knowledge, which is all about process and industry-specific nuances. Ginsuk and Sanjeev will cover this in more detail in the next session.

Every company believes that their capabilities are truly differentiated. We are no different. But here's what unbiased experts have said. Major analyst firms have rated us as market leaders in more than 100 assessments since 2022. Our core business services and advanced technology solutions create a powerful suite of offerings that amplify one another.

The next element of our growth model is our clients, who we offer these capabilities to. We focus on 2 client segments, enterprise and mid-market. Our enterprise client segment consists of companies with over $10 billion of revenue. We proudly partner with more than 25% of Fortune 500 companies and a majority of them are long-standing relationships for us. These relationships are highly referenceable and form the backbone of Genpact growth.

When we deliver predictable and measurable outcomes in one area of their business, they naturally ask us, "What else can you do for us?" And that creates expansion opportunities. Clients are not looking only for cost takeout, they want partners who can drive transformation for them and help them being AI first.

Let's bring this to life with one of the enterprise clients, Sysco. Sysco is a Fortune 100 company with revenues of over $78 billion. It is one of the largest food distribution companies serving more than 730,000 customer locations in over 10 countries. Think of Sysco as the circulatory system of food services world. If food is moving in bulk, it's likely there is a Sysco truck behind it. Our partnership with Sysco has been a journey of transformation of their core finance and accounting operations. Working together, we deployed advanced digital systems to modernize their processes and automate their transactions. This initiative has unlocked significant efficiency for them and created a more streamlined environment. Today, this platform is a hub of activity, joining 2,000 Sysco users with 450,000 suppliers and customers seamlessly.

We are proud to see over 85 million transactions processed annually. And this is a testament to the power of these automation efforts. It's created a truly frictionless experience for Sysco. Sysco is also an early adopter of our agentic solutions. Our relationship with Sysco demonstrates a clear progression from core business services to advanced technology solutions. And this shows how we expand our footprint with large clients. And this is just one of many examples from our enterprise client base.

We asked ourselves, what if we could bottle this credibility that we have with our enterprise clients and take it to the next generation of market disruptors. These are companies with less than $10 billion in revenue today, but have the DNA and the growth trajectory to become tomorrow's leaders. That question unlocked an entirely new vector of opportunity. We are strategically targeting fast-growing future leaders in our chosen industries. And this historically underserved segment is looking for partners who understand their unique needs around driving scale. They are very early in their maturity cycle and provide us an opportunity to grow with them and position us to be the transformative partners to their C-suite leadership.

Our approach to this segment has 3 elements: one, repeatable solutions that are paper split for this market; second, flexible commercial models that deliver client outcomes; and third, a focused go-to-market team. We have established a strong revenue base with these clients and are poised for continued growth. Here's an example of a mid-market client, Advantage Solutions. Advantage Solutions is a leading retail solutions deployment partner in North America. They bring together brands and retailers. So today, they service 4,000 consumer brands and bring together over 100,000 retail locations across North America. They needed an innovative digital solution to manage their growth and their scale. We partnered with Salesforce to co-create a new industry-specific solution in order management. Let's hear from the Chief Digital Officer, Francesco Tinto, about this journey.

[Presentation]

Thank you, Francesco, for trusting us with your transformation journey. So why do these enterprise and mid-market clients choose Genpact? It starts with our process and industry domain expertise, which allows us to understand and solve complex client problems. Our proprietary tools, data and technology solution help us accelerate this transformation. This yields tangible outcomes for our clients. With more than 106% net revenue retention rate, client relationships grew because of these results.

The third element of our growth model is catalysts. These catalysts help us accelerate momentum. While there are many catalysts, I'll share 2 critical ones with you today. The first is our expanding partnership ecosystem. And second is investments in talent to amplify AI. Our partnership ecosystem has 3 categories: domain, enterprise and innovation accelerators. Our domain partners are forms like BlackLine, Esker, Kinaxis, 09 and others. We've been a top partner with these firms for many years. Our enterprise partners are major firms like AWS, Databricks, Microsoft, Salesforce and ServiceNow.

Our partnership growth efforts with these firms are predicated on: one, enhancing our partnership status; and two, building joint solutions. We have achieved top-tier partnership status with AWS, Salesforce and ServiceNow, and are on track to do so with Microsoft and Databricks. Our joint solutions portfolio is expanding. A few illustrative examples. We have a financial crime solution hosted on AWS Bedrock. We have an order management solution built on sales force, and a sourcing and procurement solution on ServiceNow. These solutions help us create a differentiated positioning with partners and accelerate our pipeline. Our innovation partners are start-ups. These startups are early in their journey, and we leverage them across our portfolio to leapfrog our capabilities. Some examples of our current collaboration are us [indiscernible] for intelligent document processing, parallel.ai for AI-led web data innovation, [indiscernible] for responsible AI adoption. And as we continue to invest in our partnerships, we expect the contribution of the critical partnership channel to accelerate.

The second catalyst is investment in AI talent. Piyush will talk in detail about how we are reshaping our total workforce. I will emphasize 2 critical facets of this approach. The first one is investment in AI builders, how we build advanced technology solutions. And second one is investments in sales talent, sales talent who are fluent in data and AI and on how we sell these solutions. We have thousands of AI builders and growing. This talent helps us rapidly scale AI to deliver enterprise-grade solutions. Second is investment in AI sales leaders who can explain and apply these solutions. While we are upscaling our existing sales leaders and complementing them with specialist sales, we believe this model will help us accelerate sales.

So we bring together core business services and advanced technology solutions to solve higher order client problems with this combined sales force. Partnerships and investments in AI talent are significant catalysts of our growth journey.

In summary, this market is changing, and we are changing too. Our capabilities are truly differentiated. Our core business services give us scale and last-mile advantage. Our advanced technology solutions help accelerate transformation. Our client relationships are referenceable and are the backbone of our growth. We will continue to expand our footprint with enterprise partners and help mid-market clients scale. A partnership ecosystem and AI talent are catalysts in this acceleration. This is Genpact Next in action. Thank you. I'm excited about where we are. And with this, I'd like to welcome Sanjeev Wora to talk more about our advanced technology solutions.

Good afternoon, everyone. I'm Sanjeev Wora, and I'm Genpact's Chief Technology and Innovation Officer, and I'm excited to share how we are building advanced technology solutions that help our clients and Genpact accelerate growth. I spent my career building large-scale services and solution businesses, leveraging the power of data, technology and AI. And I was drawn to Genpact because of the depth and quality of companies, industry domain knowledge, the Lean Six Sigma heritage and most importantly, the operational data mastery. The opportunity to bring this rich operational expertise with data and AI to create future value fill vacuum that I've experienced in my previous [indiscernible]. And I could not be more excited to be part of this team leading Genpact's pivot to advanced technology solutions. And our timing is perfect. Our timing is perfect given the evolution of AI in the recent years. So let's spend a few minutes on the fast-changing environment.

We all know that pace of technology and its change is relentless from cloud to data to AI, generative I and now a genetic in the last 5 years. For most companies, effectively deploying emerging technologies from -- moving from experimentation to production and driving tangible business result is a real challenge. And the same challenges show up across all the clients we serve. Most companies have mature transactional systems, their ERP systems, front-end systems like SAP, Oracle, Salesforce, but they all are siloed. There's plenty of data. Every company has plenty of data, but it's fragmented and messy. Business and IT teams, they move on separate trucks, and technology talent with the right blend of domain knowledge is truly scarce. And trust me, that's the fundamental and foundational to unlock the value from data and AI. And these issues show up everywhere, negatively impacting the most well-funded programs. The bottom line is that companies see a clear potential of AI, but they struggle to implement AI at scale.

As BK mentioned, we process and data engineers, we thrive on speed to value. Genpact's approach to these challenges combines our differentiated processes and the data expertise with a new AI capability is phenomenal. The advanced technology solutions. These feature all these capabilities and solutions. They feature stronger Genpact IP, future-proof architectures, scalable delivery, specialized talent and modernized commercial models. They all are high-value, next-generation offerings, designed to address challenges our clients are facing towards in adopting AI at speed. And they also position Genpact well to accelerate growth.

So today, I will do a deep dive in data and AI, which is one of the fastest-growing capabilities within advanced technology solutions. My colleague, [indiscernible] Khan, will discuss service as agentic solutions later. So let me walk you through the data and AI stack.

It all starts with data. It all starts with data, and it's foundational to AI. And there are 2 parts to it. There are 2 parts to it. The data itself, data as an enterprise asset, and the second one is data supply chain, which is processing and preparing the data to feed into AI. The super power that we have at Genpact is the knowledge of data itself, which is understanding of these critical data elements in processes and industry domains and these critical data elements are necessary for creating effective AI systems.

As operators, we have access to domain-specific data. And add to that, we have our own proprietary data sets and our own models. We are talking about a few thousand data models across industry and processes. Now these models is a bedrock for data engineering and data management to generate high-quality data, which is a fuel for enterprise AI.

When it comes to data supply chain, there are 3 elements. The first one is upfront industry-driven data strategy, which is creating the business case and road map. The second one is data engineering, building the data pipelines and data management. And the third one is data management, which is about ensuring the high quality of data. To augment our existing capabilities and data, we recently acquired a company, Exponential Data. Now having their team now being part of Genpact family adds strong and future-ready leadership and capabilities in data strategy and data engineering on Databricks and AWS platforms across several industries. They have differentiated offerings. They have repeatable IP, and most importantly, they lead by industry-specific data and AI strategy. We all are super excited about our synergies. And with this acquisition, we now have a market-leading capabilities across all the 3 elements of data supply chain that's enabling us to have meaningful client conversations every day.

Now coming to Core AI. This is our strongest capability. We are delivering over 300 programs leveraging more than 1,000 prebuilt industry domain-specific algorithms and models. These models use machine learning, advanced analytical tools, deep learning, neural networks and they're building predictive and probabilistic AI systems of forecasting, anomaly detection, optimizations, recommendations across finance and accounting, supply chain and several industries. A great example to bring this home is our client, Penske, our transportation and logistics industry leader in North America, with around $10 billion in revenue and more than 400,000 vehicles in the field. They were struggling with fleet efficiency and maintenance. Genpact introduced an AI-based intelligent planning platform for fleet management.

Genpact's own fleet management system to ensure high availability of right part at the right time, at the right price from the right supplier. This was a fairly complex problem, and this new platform that we built was on a Microsoft stack, leveraging 16 forecasting models and an artificial intelligent neural network establishing patterns across 42 different variables. This is driving power planning model accuracy, lowering the inventory cost and enhancing the parts management services -- service levels by 96%. This was made possible by leveraging our own supply chain offerings and our models.

Now come to generative AI, which is still, I would say, in our early stages of evolution. This uses large language models provided by the big technology partners like OpenAI, AWS, GCP and open source models like DeepSeek and Metazlama. We invested last year in Genpact Lab that monitors the advancement in these new technologies, foundational models, large language models, frontier models, distill models, all kind of models. And we compare -- and they compare the technological maturity and cost of its implementation. So far, we have delivered around 215 GenAI solutions in production environment integrated with the workflow and generating business -- real business and tangible business outcomes. These deployments are across processes and industry domains. These include data extraction and summarization, efficiency in software development, insurance claims and underwriting, customer service, order processing and many more processes.

Now let me again provide a client example in this space. Our client is a leading global medical technology company with more than $15 billion in annual revenue. We have been their partner on a multiyear transformation journey to simplify their business processes and operations and improve outcomes for them. Together, we launched a comprehensive redesign of operational processes, covering the entire spectrum of business processes. Genpact brought its medtech AI-powered advanced automation capabilities to enhance the operational efficiencies. And one, one of many capabilities is an AI-powered agent for the medical equipment services engineers. These are the people who are fixing or repairing these diagnostic machines deployed in the field. This is a mission-critical function and one of the ultimate goal is to keep the machine uptime.

We worked on lots of data. We worked on lots of data, machine data, field data, operator data, using Databricks on Azure, and OpenAI foundational models to create a generative solution that can deliver a clear path to resolution for these field engineers, which is 7x, which is 7x faster than the previous process they were following. This type of transformation is only possible with technologies like generative AI. Now beyond its efficiency and keeping higher uptime, the observability of these failure patterns in the field and the insights that is being fed to the medical equipment, the insights coming out of this is being fed to the medical product design team to further optimize their machines. From Genpact's point of view, this extraordinary use of AI and associated data models for asset field services and field management is applicable across multiple clients and industries beyond health care. That's the power of a repeatable solution.

Now we have made tremendous progress in data and AI. And our sales pipeline has tripled in the last 12 months. Fundamentally, in data and AI, there are 2 distinct differentiators that we bring to the table. The first one is the access and knowledge of data that's based on our decades of experience running millions of operational transaction, as BK mentioned in his opening session. And the second one, the second one is the way we are integrating AI into the processes and IT systems addressing the challenges that every company has today, which is how to implement AI at speed and at scale. And this is where Genpact's AI Gigafactory comes into play. Genpact's AI Gigafactory is one of its first of its kind, first of its kind, delivery model designed to help, enterprises rapidly deploying AI into production, generating business outcomes and positive change management. There are 3 factors that differentiate the Gigafactory. The first one is AI Value Studio. The second one is AI platform. We call Gsolution.ai and a unique power delivery model.

First, when the client enter the Gigafactory, they begin in AI Value Studio where our value architects identify high-impact use cases and create custom road maps for AI solutions that can deliver higher ROI, working closely with the client business and technology teams. The second is our AI platform, Gsolutions.ai. It integrates the fragmented data across multiple systems. It enriches the data with contextual data. It brings Genpact's own proprietary data and prepares it for model training and refinement. Basically, it makes data usable.

Now once the data is ready, we then accelerate model development by leveraging the prebuilt AI models and agenting frameworks. We have more than 1,000 prebuilt and reusable AI models and growing. We have 75 differentiated patents from Genpact Lab, all built with responsible AI by design.

The third is our unique pod delivery model. These pads are cross-functional teams with blended skills, industry, expert, data expert and AI engineers, all organized by industry and technology. These pods take end-to-end accountability from design to deployment, to management of AI systems, reducing the overall time to value. All engineers are trained and certified on Gsolution ai and our technology platform and our partner technology platforms such as AWS, GCP, Microsoft Snowflake, Databrcks. And they all go through rigorous and continuous training that ensures that we have the future-ready talent available on tap to build and deploy scaled AI solutions. This allows us to move clients from pilot to full-scale production at speed.

So far -- we started the Gigafactory in January this year, and so far, the Gigafactory -- our Gigafactory engagements have delivered tangible results for our clients. Up to 40% faster implementation times, up to 30% higher throughput and up to 50% reduction in typical cost of ownership. An example of all these advantages are translating to client value is with our long-standing client, Gevanova, a $35 billion company, a company that we know very well for many decades. And let's now hear from our client, Satish Kurwa, who is the Chief Data Officer of [indiscernible] in terms of what he wants to talk about Genpact and our relationship.

[Presentation]

A big for Santsh for being a demanding client and a great sponsor. In case you missed, he spoke about 100,000 data objects to one single platform, Databricks. Adding to what he said, the introduction of this AI Gigafactory has been piled to strengthening our strategic partnership with [indiscernible]. We launched this factory in January 2025. And we have 45, we have 45 clients in this factory, Gigafactory year-to-date. To meet the growing demand, we have onboarded more than 100-plus experienced data and AI leaders in the space who have lots of experience doing this work. And we are front-loading our talent investments in the AI Gigafactory to meet our clients on-demand talent needs and already generating meaningful results.

We also received strong validation from the industry analysts, partners, clients and several prominent publications speaking to the differentiation of this offering.

Now let me close by sharing 3 key takeaways from this session. First one, our approach to delivering business value starts with the combined power of process, data and AI, not as isolated capabilities, but as a connected engine for enterprise transformation. Second is our AI Gigafactory is a first of its kind delivery accelerator in the industry focused on faster time to value. And the third is we are investing in scaling advanced technology solutions to generate strong and sustainable profit growth, and we are on it. And with that, I'm delighted to invite Jinsu Khan to talk about service as a agentic solution.

Thank you, Sanjeev, and hello, everyone. I'm Jinsu Khan. I lead Genpact's Strategy and Corporate Development teams, and I'm also responsible for building and scaling our agentic AI offerings within advanced technology solutions. Throughout my career, I worked at the intersection of data science, AI and transformation. I've closely observed Genpact as a client, as a competitor and strategist. I was drawn to Genpact by its potential, an expert leadership team with the courage to intentionally disrupt and a powerful vision of agentic AI. As Sanjeev mentioned, a critical element of our advance technology solutions strategy is the rotation of our digital operations into agentic AI-powered operations. Our services agentic solutions are proprietary Genpact solutions that transform mission-critical business processes from BPO to autonomous AI agent-lead delivery. They include specialized large language models, LLMs, modular design, adaptive learning and responsible AI controls, all designed to deliver efficiency and value for our clients.

Today, we focus on these solutions while rotating existing FTE-based processes to agentic operations. As you know, Genpact is one of the largest global players in finance operations with a significant market share. We have chosen to begin our journey to capture value from this position of strength. Our finance and accounting services and technology leader consistently cited by various industry analysts in their latest reports. Our expertise spans the entire finance and accounting domain. The AP Suite is an example of how we transform manual and time-intensive processes to deliver greater efficiency and value.

A large portion of invoices globally are handled manually due to OCR errors, messy input data and complex exception management. Variability and contextual interpretation of data, purchase order mismatches create large leakage. Duplicate payments, over payments and fraudulent invoices create further risk and significant costs for businesses. When building our agentic AI solutions, we designed to address these challenges head on based on our deep process and industry domain understanding and hands-on operational expertise. Since launching our Agentic AP suite in February of this year, we have been actively transitioning our AP operations from traditional delivery method to an AI-driven model.

Our agentic AP solution provides significant benefits to clients, including more accurate autonomous data capture through AP capture, greater touchless processing with significant productivity benefits through APL advance, enhanced cash visibility and reduce leakage, with up to 90% early discount capture through AP TRACE. Improved supplier relationships through high-speed processing and automated supplier query resolution through AP Assist. Genpact's AP LLM trained on a vast number of live transactions, transforms AP function from a call center to a strategic asset with minimal human input.

Let's explore how AP advanced quickly and intelligently resolves order, invoice and delivery mismatches. And yes, we'll be talking about tomatoes, too. Our food processor places a purchase order for 1,000 kilograms of tomato seeds. Due to moist loss, spillage and transit damage, only 950 kilograms are received, very common for perishables. This is recorded in the goods we see note. But the supplier invoices for the full 1,000 kilograms. Doing a 3-way match of invoice, goods receipt note and a purchase order, the AP system detects a discrepancy. Without agentic AI, this gets escalated to a human reviewer, delaying processing by days, sometimes weeks. And here is how agentic AI handles it differently. The AI recognizes tomatoes is perishable, pulls historical data showing a 5% typical variance, and dynamically adjust the threshold. It also factors in real-time context like tomatoes in summer, 5% expected variance. This particular supplier in Mexico was just 3% based on past reliability. The result, the invoices processed automatically in seconds, not days. And it doesn't stop there. Agentic AI reasons like a purchase officer with experience. It learns supplier patterns, flags on anomalies, feed insights into your procure-to-pay system to guide sourcing, renegotiation or performance scoring. That is how the agentic AI AP suite achieved high levels of touchless processing, delivering significant cost savings straight to the bottom line.

The impact of the Genpact Agentic AP suite is already proving out across multiple clients. One example is Wesco, a $22 billion global electrical distribution and service company. Wesco is the central nervous system of the distribution industry. It ensures that power flows, networks stay online and infrastructure is maintained, highly enabling the world to work efficiently behind the scenes. Through our comprehensive process and technology transformation, we have brought together Wesco's entire APM procurement organization, collaborating seamlessly on a single unified platform integrated with multiple ERP systems. With the addition of Genpact's agentic AP starting last year, Wesco has significantly reduced manual workloads and enhanced data-driven decisions with real-time dashboards.

As we continue to enhance the Genpact's agentic AI suite, Wesco targeting even higher performance on invoice extraction and accuracy as well as enhanced vendor experience through the AP assist module.

Let's hear from Dave Schulz, Chief Financial Officer of Wesco, on their transformation journey.

[Presentation]

Thank you, Dave, for your continued trust in Genpact being your transformation partner. So all 4 modules are live, and we're actively developing additional features and agents. And it's client zero, that's jampacked ourselves, we're already using the AP suite as well.

Let's take a look at the trend we're observing across our agentic portfolio. For existing accounts that have rotated from FTE-led delivery to agentic delivery, we are seeing 3% revenue growth. That's net of productivity commitments. This is driven by higher volumes, increased scope or a combination of both. And across these contracts, in aggregate, we are seeing gross margin improvement of 300 basis points. Our agentic AI solutions are also driving incremental revenue from new clients with higher gross margins as compared to our existing offerings with FTE-based operations. As agentic revenue continues to scale, we're confident in our ability to further expand margins.

So from our capabilities in advanced technology solutions, we do discuss our partners, and Sanjeev covered the Gigafactory. Building on that, expert humans are a vital part of our AI capabilities. Our AI talent has grown significantly, and [indiscernible] will share more on talent later.

Now let's take a deeper dive into our agentic AI architecture and capabilities. It starts with the ingestion connector hub that integrates data using our connector library, and from Gsolution.ai that Sanjeev covered, and create structured and unstructured data in our data engine room for using AI models. The AI agentic foundry is where we develop, train and deploy executable agents using domain-specific LLM and SLM. So these agents are fine-tuned for very specialized functions, enabling contextual task execution across industries. And these layers operate within the responsible AI framework, ensuring security, observability, explainability and controls. And we publish mature models for our internal marketplace for reuse and with some commercialized via our partner marketplace. And all agents follow the agentic AI development life cycle, where they are monitored, tuned and retired.

Genpact possesses robust baseline capabilities, including agentic infrastructure, exception handling and representative data sets. However, it's our last-mile capabilities that are driving the real differentiation and impact. Since I explained, accounts payable as one of the many examples, let me pick up a last-mile example in this space. Our experience shows that AP processes often involve multiple ERPs and connectors. One may appear at first glance to be just a few ERPs often turns out to be dozens of highly customized instances, each one uniquely tailored. These custom systems are linked to hundreds of applications relying on inputs like faxes, handwritten notes, website, download, et cetera. Global processes spans dozens of countries, numerous languages in hundreds of jurisdictions, each with its own local tax rules and require audit trails. This is the place where expertise in context really matter. Being process geeks, we understand these issues and nuances deeply. And that's what's built into our agentic AI AP suite, domain-specific LLM and SLMs. Capabilities that handle the toughest Level 3 exceptions, regulatory and geography complexities, extensive library of connectors that have been built from real operations over time. The last-mile is where we build client trust and deliver real value. And with agentic AI, that means creating lasting and sticky revenue.

Looking ahead, we have built a robust multiyear road map, featuring a wide range of agentic solutions spanning our existing digital operations. The road map unfolding in 3 parallel work streams. Work stream one, includes library of domain-specific and Gigafactory agents. And select examples of our developments that are underway span to many specific agents in record to report, supply chain, order and trade management, insurance claims and underwriting and sales operations, to name a few. Gigafactory agents include code generator, data connector agents, enterprise risk management agents, agentic AI development life cycle agents and others. And Work Stream 2 includes orchestration and workflow agents and Work Stream 3 addresses organtic AI ecosystems.

Before we take a short break, I'll leave you with a few messages today. Last mile strength are what differentiators. Our deep process intelligence, robust data scalable architecture in domain-specific technology set us apart and position us for success in the market. Our rotation to agentic operations is already driving net revenue growth and gross margin expansion, with acceleration expected over time.

We're investing aggressively to disrupt ourselves. We're leveraging advanced technology solutions, including our AI Gigafactory, agentic AI architecture and a tech-savvy workforce to transform digital operations and build a strong partner ecosystem. It's an exciting time for Genpact and our advanced technology solutions team, and we are thrilled to share it with you. Thank you.

[Break]

Welcome back, everyone. Imagine a world where mortgage approvals happen in hours and not weeks. We have flood insurance gets settled in days and not months, where a small business owner, spots an opportunity at 2:00 p.m. and has funding in its account at 3:00 p.m. This is in the future we are imagining. This is the future we are building today. I'm Sameer Divan, and I lead the Financial Services Business for Genpact. We help banks, capital market firms and insurance companies run and transform mission-critical services such as retail and commercial banking operations, perform credit positioning, comply with risk and regulatory requirements and support claims and underwriting operations. And I can tell you this, with all of this change and opportunity, this is the most exciting time to be part of the financial services industry.

Right now, as we sit in this room, 12 of the world's top 20 global banks are running core business operations powered by our solutions. 12 of the top 15 global investment banks, 8 of the top 10 U.S. banks and 6 of the top 10 U.S. insurers are all Genpact customers. When the world's most demanding financial institutions need to transform their operations, they choose us.

Today, I want to share 3 important perspectives with you. First, establish the depth of process and industry domain that Genpact brings to the financial services space; second, demonstrate the strength of our client partnerships by showcasing 2 transformation stories; and finally, our differentiation and why leading financial services organizations choose Genpact as their transformation partner.

Financial institutions today stand at a critical inflection point. Banks and insurance companies are facing unprecedented challenges that go beyond traditional operational hurdles. Our clients come to us consistently expressing 3 pain points. First, regulatory compliance has become extraordinarily complex and expensive. Financial institutions face an ever-growing web of regulations across multiple jurisdictions. Each new regulation requires additional oversight, documentation and reporting often with severe penalties for noncompliance. Second, many banks and insurers operate on decades old systems that weren't designed for today's AI-first world. These systems create data silos, slow down innovation and lead to high operational costs. And third, changing customer expectations have created a significant experience gap. Today's customers expect the same seamless digital experience they receive from technology giants, yet many financial institutions struggle to remove friction and provide a seamless end-to-end experience. But then here lies the opportunity. The institutions that move first, that embrace radical transformation now will build market share and lead the industry.

We are combining our capabilities across core business services with advanced technology solutions to help companies transform and stay ahead of industry challenges. Let me illustrate this with 2 client examples where we have transformed our core business services leveraging advanced technology.

The first client is a global leader in property and casualty insurance, operating in over 20 countries and generating about $50 billion in annual revenue. This client faced profitability challenges and embarked on a comprehensive transformation journey. As a long-standing partner, Genpact has been instrumental in helping the client, reimagining their business processes by seamlessly integrating technology, operations and data. One of the many core business services that we provide to the client is managing their property contents insurance claims. These are contents in your home that get damaged when you have a broken pipe, a fire breaks out or a storm hits town. Our client receives about $500 million in claims of damaged contents every year. The existing claims process was manual. Hundreds of researchers received lists of damage contents and conducted individual pricing research for each item. This approach resulted in processing delays spanning multiple days, frequent pricing inaccuracies and customer service levels that fail to meet market expectations. We have redesigned the end-to-end claims journey from initial inventory creation to pricing through AI interventions and replacement of the items through Amazon Prime and other retailers.

The Genpact solution being implemented uses proprietary business logic and our rich content database was used to train the AWS Bedrock LLM. Our last-mile knowledge has helped us deal effectively with nonstandard household items like rugs and artworks that many of us price. This implementation, once delivered, will deliver 2 key outcomes: one, reduced claim cycle by 80% and claims will now be processed in minutes than days; and second, improved pricing accuracy of property contents by 2% to 3%, resulting in an annual save of $10 million to $15 million. This may seem like a small percentage, but for anyone in the insurance business, 2% to 3% reduction in the claims cost is a really big deal.

This is just 1 example of over 50 proprietary AI models that we have built to meet the unique needs of insurance clients. These solutions are being implemented across multiple clients and creating a competitive advantage for them. Our delivery excellence and client trust built on the foundation of core business services has enabled us to expand into advanced technology solutions, a key part of our Genpact Next strategy that BK and Riju spoke about earlier.

Our second client story is a great example of how we have combined our process and industry domain expertise with enterprise technology partners to create -- co-create solutions that solve for the needs of a specific banking client. For this story, I'm delighted to welcome an esteemed client from Santander U.K. who has traveled all the way from London to be with us. Santander, for those of you who do not know, is part of Global Fortune 100 and has 175 customers worldwide. Please welcome Stephen White, Chief Operating Officer at Santander U.K.

Good afternoon. And for anyone who's had too much sugar in the break, I can see you all [indiscernible] away that picture is quite old that you saw me earlier. But I would still like to look at that soon again. Anyway, good afternoon, everyone. Santander U.K. is part of the Spanish Santander Group, the largest retail and commercial bank in Europe. We serve 14 million active customers in the U.K. every day. Our history is deeply tied to the U.K.'s banking tradition. But today, we operate in a highly competitive, fast-moving environment. Digital challenger banks are reshaping the industry. To stay ahead, we needed to offer better customer experiences. We also needed to streamline processes to handle changing demand and improve our cost income ratio.

We faced challenges. Our legacy systems, manual processes were slowing us down. I hope my Scottish accent is okay so far. Thumbs up. Thank you. These systems inherited through many acquisitions caused inefficiencies and inconsistent customer experiences. Let me give you some examples.

Mortgage applications were often delayed. Business banking account closures took too long. Our operational costs were high because we did not have enough automation. And on top of that, seasonal [indiscernible] like student loan applications stretched our capacity. So what did we do? That's when we partnered with Genpact to reimagine how we work. Together, we built a lean digital blueprint. This plan identified a road map for automation and digitization of our processes.

Genpact took over the running of several of these core banking processes. They introduced automation, AI and advanced technologies, including Salesforce and ServiceNow. This helped us to streamline tasks like customer onboarding and document validation. Advanced data models and analytics now predict and manage business volume fluctuations. Genpact helped us to meet our regulatory demands and compliance deadlines for resilience and consumer duty. The results have been remarkable. In less than 4 years, we have increased customer satisfaction, our NPS, by 5%. We have boosted our market share in student loans by over 30%. We have closed banking accounts 90% faster with full automation. We have improved our cost/income ratio by 10%. We have improved our payments by 94% and reduced the risk in loan payments by GBP 1.5 billion.

Ultimately, it has changed how we are now serving our customers. We are now more agile, we're more efficient and we're more customer-focused. We have done this by building a deep partnership with Genpact over the last few years. Genpact now serves all of our customers across all retail, commercial banking products, and payments. With Genpact, we are not just improving our processes. We are driving radical transformation to fully maximize data and AI across the whole bank.

In summary, together, we are redefining the future of banking. Thank you.

Thank you, Steven. Congrats on the amazing outcomes delivered and for sharing the snippets of the transformation journey with us. You heard the 2 stories of how we are solving client problems and delivering key business outcomes. Let me now summarize on why clients choose to work with us. One, we lead with our knowledge of the last mile nuances, built on the deep foundation of our process expertise, data access and understanding. This enables us to solve client challenges with unprecedented precision to deliver measurable ROI that others cannot match. Two, we are the orchestrators of domain-specific technology ecosystems. Rather than implementing isolated tools, we curate, process and domain specific technology solutions, enrich them with our proprietary IP and create scalable, repeatable assets. We bring business and technology together. And three, we align our success and our commercial model to client outcomes. The skin in the game approach demonstrates our confidence in delivering measurable results and builds through partnerships rather than traditional vendor relationships.

Genpact's ability to deliver key business outcomes through a mix of deep business knowledge operational excellence in delivering our core business services and advanced technology solutions is why financial services clients choose to work with us.

With this, I'd like to hand over to my colleague, Anil Nandru, to talk about how we are delivering client value across several other industries. Thank you.

Good afternoon. How is everyone doing? I know it's a bit cloudy outside, but the views are still gorgeous. So 2005 is when the year Genpact became an independent company. IPhone was 2 years away and generative AI has not even been [indiscernible] yet. When you fast forward that to [ 2025 ], 20 years is actually a blink in human history. But in the fast-paced world of technology and business transformation, that actually represents several lifetimes. And I'm here to talk about this evolution, how our clients have transformed in this time and what's our role in it?

Good afternoon, ladies and gentlemen. My name is Anil. I lead Genpact high-tech and manufacturing consumer and health care business segments. Two decades ago, Genpact was focused on process excellence within GE. Today, with that same spirit of excellence, we are developing AI solutions that are fundamentally reshaping entire industries. We work with leading companies in the global Fortune 500 list. Let me give you a kind of a quick glimpse. 13 of top 25 health care and life sciences companies, 8 of top 15 food and beverage companies, 4 of the top 10 high-tech companies.

Going back to our roots, we've actually built a strong presence in manufacturing sector, thanks to our origins in GE. And we work with established names in manufacturing sector. We can proudly say that we understand the challenges of these industries, the growth prospects, we understand them deeply. While high-tech, manufacturing, consumer health care are different, they all actually face similar challenges. One, these are global companies with incredible operational complexity and fragmented processes and the reason why they struggle to achieve efficiency and scale. Two, they have legacy technologies, and they grapple with siloed data systems and lack of intelligent automation. And guess what, that inhibits their AI adoption. Three, complex supply chains. And they are vulnerable to frequent disruptions such as external shocks, tariffs, geopolitical tensions and all of this leads to delays and reduced resilience.

So today, I'll take you behind the scenes where you'll hear about client challenges in more detail and how our clients have partnered with us to solve them. So I'm going to share 2 stories where core business services and advanced technology solutions are deployed. And these solutions, both of them, are powered by our deep process and industry domain expertise and operational excellence. And that's what our Genpact Next strategy is all about. So I'll start with Hi-Tech first.

We serve the Technology Solutions group of NTT Data. They were formed by a merger of 31 subsidiaries. NTT Data is one of the largest business and technology services providers in the world with annual sales of over $30 billion. Our strategic partnership began 3 years ago where we started providing them core business services like source-to-pay and order-to-cash. What we saw were inefficiencies driven by error-prone manual interventions, multiple source systems, diverse market nuances. That challenge was actually further aggravated by disparate workflows and nonstandard ways of working. All of this resulted in continuous rework across front, middle and back-office functions. And it increased the cycle time, it increased the high cost to serve and actually impacted overall experience.

So what did we do? So we first centralized and standardized the processes. We then deployed advanced technology solutions like AI work flows and AI models. The past 9 months though has been super exciting, actually. We've established an AI center of excellence for them. And that actually acted as a last-mile integration layer. And let me explain just how transformative these solutions have been with 1 example. This is in the order-to-cash space. It's called the disputes AI solution. So in their business, around 5% of the outstanding is disputed. The resolution process is manual. It involves multilayered investigation and coordination across multiple teams. And a few of them can actually take up to 120 days to resolve, which actually strains the cash flow.

So our solution, the disputes AI solution is a game changer. It automate dispute investigation, it analyzes patents and recommends remediation action, drastically cutting the resolution time by 40%. This has led to faster cash recovery, lower operational overheads and most importantly, elevated customer experience, something we and our clients are deeply passionate about.

The COE, the AI COE, which I talked about has successfully developed 12 AI-powered solutions across the core business services. Four of these solutions are in the source-to-pay space. So let's hear directly from NTT Technology Solutions CFO, William Young, about the impact of these AI solutions.

[Presentation]

We are equally excited to witness both of us define a new benchmark for the industry. Let's go to the second client story, and this is in the consumer goods sector. Here, there is actually a big untapped market opportunity. According to a study by McKinsey, GenAI use cases are expected to unlock an additional $160 billion to $270 billion in profit annually for all CPG companies combined. We are using the depth of our knowledge of core business services in the CPG industry. We are developing AI and GenAI solutions to maximize value for our clients.

Our next story comes from Japan, for that we'll have to go to Japan. And it's in the world of vending machines. Let me introduce you to the unique vending machine culture of Japan. You will see these machines at every corner, parks, buses, bus stops, temples, even remote hiring -- remote hiking trails. Our client, CCBJI, Coca-Cola Bottlers Japan Inc., manages hundreds of thousands of these vending machines and they form a core part of their operations. However, they were actually constrained by a reactive maintenance approach, leading to extended downtime, fragmented inventory management and siloed data systems. This is a great example of how core business services and advanced technology solutions come together to solve the clients' challenge. So we modernized field operations. We developed intelligent planning solutions. We've set up a smart command center for visibility and control. And as you can imagine, AI is embedded in all. All of this led to a reduction in equipment downtime, optimization of spare parts usage and reduction in costs. To share more, we have the honor to hear it directly from Alejandro, President of the retail company at CCBJI.

[Presentation]

Thanks, Alejandro. We love the partnership. I think both of us should get a coke from that vending machine next time when we are in Japan. As we reflect on these 3 transformations why do these industry titans consistently choose Genpact? First, clients value our deep process and domain expertise. We understand the intricacies of each of these sectors that we serve: consumer, retail, health care, life sciences, manufacturing, high tech, we understand the intricacies of these industries. Second, one of our core differentiators is our ability to set up global operations and execute at scale in highly complex environments. Whether it's navigating 31 subsidiaries, managing a supply chain of network of thousands of vending machines, we bring structure to complexity. And, this is what I love, this gives us access to high-quality structured and unstructured data sets. And this provides us with a robust foundation upon which we can actually architect and scale advanced technology solutions.

Third, we develop enterprise-wide AI solutions, leveraging our deep understanding of last-mile, which [indiscernible] spoke earlier. So process and industry domain expertise, advanced technology solutions, execution excellence, which focus -- with a focus on outcomes, and that's what wins us the clients trust. Thanks, everyone. Now I'll hand it over to Pyush Mehta to talk about how we are building a future-ready workforce.

Thanks, Anil. Hello. My name is Pyush Mehta, and I've been with Genpact for close to 25 years. And I've had the privilege of working with all 3 of our CEOs, and therefore, a ringside view to our transformation as an organization. And what I can tell you is that I'm more energized than ever by the work that we are doing today.

I want to start by sharing with you a recent interaction that happened in one of our cross-functional delivery teams. This was a group of data scientists, solution leads, transformation specialists and medical device experts. They were working on a smart support solution. Hospitals and clinics that were facing issues with medical equipment were having to wait for up to 24 to 48 hours to get a field engineer visit to examine their device. The team was working on a solution that could suggest resolutions immediately with the potential to reduce up to 3,000 visits and advancing resolution by up to 72,000 hours.

One of the newly hired data scientists said, I've never understood this industry like I do today. This isn't just about data, we are helping hospitals act faster and most importantly, save lives. Moments like these are powerful, but they are not rare. This is who we are, a company where tech talent doesn't just build models, they solve real-world problems. Where industry domain experts don't just advise, they co-create with engineers, with data scientists and with designers. And that's our edge. And that's the talent journey I'm here to share.

Today, a significant proportion of our workforce are domain experts, trained and tested on process improvement methodologies like design thinking and Lean Six Sigma. What differentiates us is the intersection of these skill sets with data and AI skills. Nearly 80% of our domain experts have at least a foundational understanding of data and AI.

As we make our strategic pivot to advanced technology solutions, we are reshaping our workforce into 2 cohorts: AI builders and AI practitioners. AI builders are experts who build the AI solutions. So think about data scientists, think about data engineers and think about technical architects. AI practitioners are domain experts who are trained to use AI in the flow of work for client processes. So for example, a supply chain planner leveraging AI models for inventory management, or a finance analyst leveraging the CFO action hub for Insights.

With the democratization of AI, we will not need as much specialized coders, but we will need techno-functional experts who work with AI. And our goal is to make our entire workforce AI practitioners over the middle to long term.

Our talent strategy powers our business through 3 pillars: attracting advanced technology talent, upskilling with speed and at scale and unlocking productivity and innovation. Our invitation to dream in digital and dare in reality has served as the anchor to attract advanced technology talent. Within our top leadership team, we've significantly increased the proportion of advanced tech hires in the past 2 years. When we asked them why they chose to join Genpact over other companies, they tell us it's for the ability to experiment like a start-up with the resources of a large global company.

We believe the ability to innovate in a meaningful way is a massive differentiator for us to attract and retain talent. Senior leaders such as Sanjeev and Jinsook, both of whom you've heard from earlier today and will meet later in the evening, in turn, have served as talent magnets for us to help hire leaders in our top 1,500 cohort. The passion and energy of our leaders is palpable. They enhance the breadth of talent we already had in digital workflows, in analytics and in automation.

Our AI leadership team has enabled us to move with agility and to pivot at scale. At the front line, -- we are building our Gigafactory talent for high-demand skills like Databricks, Snowflake, et cetera, to tackle advanced technology projects, again, at scale. This allows us to move swiftly and deploy AI-ready teams. So for example, for a global energy giant, we deployed 76 Databricks resources from the Gigafactory in a really short period of time and helped accelerate the modernization of their data stack by 6 months. Our employee value proposition is learn, grow and succeed. This is something we believe in very passionately and drive at an industrial scale.

Our proprietary learning platform, Genome.ai, is a critical part of our success. In 2024 alone, we clocked 11 million learning hours for our employees, averaging 82 hours per employee, which is industry-leading. Interestingly, in the last 12 months, LinkedIn data shows 44x growth in our AI learning for Genpact versus 6x for our peers. Given the shelf life of skills is shrinking dramatically, our learning agenda has to deliver with speed and with agility. For example, our Gen AI module was launched in 2 months, but our Agentic AI module, which came after that, was launched in just 2 weeks.

Learning has delivered tangible impact. We've been able to fill 60% of our open roles in the advanced technology organization with internal candidates. In addition, our data shows that we retain employees who learn through our development programs at a much higher rate than other employees, resulting in sustained client value and business continuity. The third tower of our talent strategy is productivity and innovation. This is something our clients know us really well for. We bring this to life internally under the umbrella of Client Zero to drive productivit within the company.

Let me take the HR function as a proof point of this. We are investing in AI-enabled tools to provide a consumer-grade experience to our employees across the hire to retire life cycle. So for example, in hiring, we've deployed AI tools to provide better candidate matching and engagement. This has increased profile screening by 6x and reduced offer drops by as much as 30%.

Our Chief Listening Officer today is an AI-powered conversationalist called Amber. She has helped us move away from the once-a-year traditional employee satisfaction survey to nearly 0.5 million conversations a year. We can take action that is hyper-personalized and immediate, resulting in an industry-leading 85% positive employee sentiment. Employee engagement is a hugely critical metric for us, so much so that this is the only nonfinancial metric that determines the bonus pool for our CEO and our top leaders.

Just within the HR function, we have 20 AI builders and 170 AI practitioners who bring this innovation to life within the function for our employees. And at the same time, we've reduced our HR headcount by 10% and are targeting an overall reduction of 25% or more by the end of 2026. To summarize, we are dramatically transforming the organization in terms of our talent footprint. We are adding advanced technology talent and upskilling with speed and at scale. We are seeing early gains in productivity, and our differentiation is clear.

It's the intersection of process and industry domain, advanced technology solutions and client outcomes. This is the secret sauce that is not easy to replicate. And it comes from years of building a culture that values all 3, and it will help us grow revenue faster than headcount in the long term. That's how we deliver long-term value to our shareholders, and that's how we become indispensable to clients.

With that, I'll hand it over to our CFO, Mike Weiner.

Thanks, Piyush. You've heard a lot today about GenpactNext and how we're leveraging core business services as we accelerate growth in Advanced Technology Solutions. I'll cover 3 topics: one, our performance over the last 3 years, which demonstrates the strength of our underlying business model and our ability to execute; two, early momentum we've built in Advanced Technology Solutions, which gives us confidence in our investment strategy to further accelerate growth; three, how these elements come together to drive sustainable growth.

Let's begin with our financial results over the last 3 years. From 2022 to 2024, we grew revenue at a compounded annual growth rate of 6%. While our performance was above most of our market peers, we did not deliver fully on our potential in 2023. As a result, we adopted our 3+ 1 execution framework with a focus on partnerships, DataTech and AI simplification and Client Zero, which is the plus 1 in our 3+1 framework. Client Zero is designed to establish Genpact as its own best credential for data and AI-led transformation. The adoption of our 3+1 drove meaningful financial results in 2024, with revenue growth increasing from 2.4% in 2023 to 6.5% in 2024, largely driven by Data Tech and AI, including partner-related revenue.

Profitability also improved at both the gross margin and operating margin level. Combined, adjusted diluted EPS grew faster than revenue. Over the period of 2022 to 2024, we generated $1.4 billion of free cash flow, returning 70% or $992 million to shareholders through share repurchases of $692 million and dividends of $300 million. We have increased our dividend every year since our program started 8 years ago.

We also delivered 380 basis points improvement in our ROIC. Looking closer at revenue over the last 5 quarters. Data-Tech-AI, including partner-related and Gen AI revenue, showed clear accelerated growth. Data-Tech-AI increased from 3% year-over-year in 1Q 2024 to 12% in 4Q 2024, with continued growth in 1Q 2025 at 11%. Partner-related revenue accelerated even more sharply from 30% year-over-year in 1Q 2024 to 86% in 4Q 2024, with continued strength in 1Q '25 at 80%.

The numbers of Gen AI solutions in the market and Gen AI revenue also accelerated significantly. In 1Q 2024, we had 13 Gen AI solutions either deployed or going live. That number grew to 145 by year-end. The momentum continued in 1Q 2025 with 215 solutions in the market. In parallel, Gen AI revenue increased 9x from 1Q 2025 from 1Q 2024.

Now let's look at how core Business Services and Advanced Technology Solutions revenue evolved over that same period. As we have discussed today, Advanced Technology Solutions has 4 differentiated components: data and AI, digital technology, advisory and Agentic solutions, while our core business services consist of 3 components: Decision Support Services, Technology Services and Digital Operations. Here, you can see the revenue from Advanced Technology Solutions and Core Business Services for 2024.

Looking back over 2022 to 2024. Advanced Technology Solutions grew 3% year-over-year in 2023 and 4% in 2024, which was certainly below our potential. In 2024, however, we defined our strategy, strengthened our leadership team and started making significant investments. That has resulted in marked accelerated growth.

When you take a look at a quarterly view, you can see that Advanced Technology Solutions grew 15% on a year-over-year basis in 4Q 2024 versus total revenue growth of 9%. Growth then accelerated to 16% in 1Q 2025 versus total company growth of 7%. We expect to see further growth acceleration in 2Q 2025 as well. This rapid acceleration in Advanced Technology Solutions reflects a few key decisions: one, significant investments we're making across data, AI, sales and partnerships; two, the launch of Agentic Solutions, which was an important milestone.

Although Agentic adoption is still in the early stages, we expect it to contribute significantly in the future periods as well; three, bringing advanced technology solutions together under one unified umbrella, driving improved execution.

20% of our revenue in 2024 was Advanced Technology Solutions. This is higher value in a number of ways. One, it's approximately 70% annuitized, roughly in line with total revenue.

Revenue per headcount is more than double Genpact in total. Advanced Technology Solutions has a higher mix of non-FTE revenue. Non-FTE revenue includes outcome and consumption-based contracts as well as fixed fee contracts, the vast majority of them, which are multiyear. As you can see here, approximately 70% of Advanced Technology Services revenue is non-FTE versus 45% for Genpact as a whole. Going forward, we plan to make significant ongoing investments to further accelerate growth in Advanced Technology Solutions, specifically in product development, sales and partnerships.

Turning to Core Business Services. We're proud of the strong foundation we've built, reflecting our robust pipeline, deep process and domain experience and the last mile advantage, exceptionally strong client relationships and a stable base of recurring revenue. We see a long runway of growth ahead with continued demand. Riju spoke about that, but I think it's worth underscoring. Every transaction we touch, every process we run generates deep operational insights we can lever to drive operational excellence.

Core Business Services has 3 components. decision support services, technology services and digital operations. These core services are fundamental to our business and are essential critical business processes for our clients. As Riju indicated, one of our most durable aspects of our business has been our ability to consistently deliver strong annual retention rates, net of productivity commitments. We expect this high revenue retention rate to continue to drive growth in our core business services due to higher transaction volumes, increased scope or both, even as we rotate more of our core business services to advanced technology solutions.

We've also expected increased revenue in core business services from new logos as we continue to meet clients where they are. As we actively manage the transition from core business services to Advanced Technology solutions, there are 2 key elements we think about: one, driving net revenue growth; and two, margin expansion.

Jinsook highlighted what we're currently seeing as we rotate digital operations to advanced technology solutions for existing accounts. Increased scope, volume or both are more than offsetting the increase in productivity commitments to date associated with the move to Agentic solutions. At the same time, new client logos with embedded Agentic AI and other advanced technology solutions are bringing incremental revenue. Combined, this will drive net revenue growth for Genpact with higher gross margins as well. We would expect this expansion to continue with the broader rotation of core business services to advanced technology solutions.

Next, let's turn to organic investment approach and priorities. First, on talent, Advanced Technology solutions are more machine-led. As a result, we expect revenue growth to be faster than headcount growth over the long term. That said, the shift won't happen overnight, as mentioned earlier. We are making upfront investments to build and launch new solutions with significant investments in product development, sales and partnerships. In addition to hiring critical talent, we're also making significant investments to upskill our current workforce.

For strategic investments more broadly, we made significant investments in 2024 of $120 million in data and AI, partnerships and sales that drove meaningful acceleration in revenue growth. We plan organic investments of more than $150 million in 2025 in these critical areas, driving future growth. Importantly, we are self-funding these strategic investments through gross margin expansion, disciplined cost management, allowing us to deliver improvements in adjusted operating income margins. Client Zero.

In our effort to be our own best credential for AI-led transformation, we introduced Client Zero in 2024, identifying more than 50 AI solutions deployed or in production across IT, finance, HR, legal, sales and marketing. These developments were focused on driving growth, improving employee satisfaction, reducing costs and improving cash flow. These cases leverage many of the same advanced technology solutions we're implementing for our clients.

In 2024, we delivered Client Zero and related simplification cost savings of approximately $19 million, allowing us to fund strategic investments while contributing to the overall adjusted operating income margin expansion of 10 basis points in 2024.

Incrementally, in 2025, we expect another $20 million of Client Zero and simplification-related cost savings. This will contribute to our expected 20 basis point increase in adjusted operating income margins, while simultaneously funding strategic investments to drive accelerated growth. The effects of Client Zero and simplification have allowed us to optimize headcount and support functions by nearly 10% through May of 2025, with more to come as we continue to implement our AI and Agentic AI solutions.

Now let's turn to key performance indicators. Going forward, we'll report additional metrics so you can track our performance on GenpactNext. In addition to our data tech and AI and digital operations revenue disaggregation, we will also report advanced technology solutions and core business services revenue on a quarterly basis. We will also be replacing our current outcome and consumption-based revenue metric with a more complete measure of non-FTE revenue that includes fixed fee.

With regard to capital allocation, we continue to aim to return approximately 50% of cash flow to shareholders through a combination of share repurchases and dividends. We have increased our annual dividend every year since the program began in 2017. M&A will also be an important part of our long-term strategy. We regularly assess buy versus build with a focus on technology tuck-ins that can accelerate our time to market. Our recent acquisition of XponentL is a great example of that.

Before we get into our medium-term targets, I want to quickly talk about how our business is tracking in 2Q, as I know that's on everyone's mind. I'm happy to report today we are trending at or above the high end of our revenue guidance range for the second quarter. We would expect that performance to flow through the full year performance, moving us closer to the high end of our 2% to 5% range for revenue. I look forward to providing you with more details when we release our second quarter update and updated outlook for full year in August.

Now turning to our medium-term targets, which covers the period of 2026 and 2027. First, total revenue, we expect each year to grow at a minimum of 7% with the potential for significant upside from Advanced Technology Solutions, which I'll discuss more in a moment. For Core Business Services, we expect growth of 4% to 5%. This factors in a gradual transition of core business services to Advanced Technology Solutions.

For Advanced Technology Solutions, we expect growth at 15% at minimum. Our strong performance, broadening trends in the fast-growing data and AI markets, the size and growth of our pipeline and significant investments we've made in data, AI and partnerships together increased productivity commitments, core business services and advanced technology solutions are expected to drive total revenue growth of at least 7% in 2026 and 2027.

We continue to expect continued improvements in gross margin through 2027 with expected AOI margin expansion of approximately 25 basis points per year and significant free cash flow. Importantly, we expect adjusted diluted EPS to continue to grow double digits through 2027.

In summary, we're incredibly excited about the future. We're confident that GenpactNext will accelerate innovation and growth, establishing Genpact as a leader in advanced technology solutions. We believe we are uniquely positioned as the last mile experts more than 25 years of deep domain and process experience as reflected in the stable base of our core business services.

Looking forward, we expect net revenue growth of 7% at least with the potential for significant upsides as Advanced Technology Solutions momentum continues to build. We expect revenue to grow faster than headcount over the long period of time with self-funding of investments that allowed us to drive accelerated revenue growth and consistent margin expansion. We're also committed to maintaining a strong track record of returning cash to shareholders, and we expect to drive double-digit growth in adjusted diluted EPS through 2027.

With that, I look forward to taking your questions, and let's transition to the Q&A portion.

Great. Thank you, everyone. We're now ready to go ahead and start Q&A. [Operator Instructions] So with that, I think we're ready to go ahead and get started.

Bryan Bergin from TD Cowen. Appreciate all the detail today, nice presentations. I guess the first one is pace of Agentic adoption that you're assuming in the client base and the range of outcomes you've seen when you gave us that 3% uplift and the 300 bps of gross margin expansion. I imagine there's a pretty wide range of what can happen. So can you just talk a little bit further on what you're assuming on the pace of adoption here and the range of outcomes relative to those average levels?

So maybe Mike, why don't you take the 3% conversation and then Jinsook can take about the pace of adoption.

Will do. Will do. So I'll answer your second one. Thank you for the question, Bryan. So when you think about it from that perspective, Jinsook gave you a highlight of what we've seen to date, right? I think the way we want to think about it is really price times quantity, right? And we think about it from the price perspective, we are delivering increased productivity and value to our clients, right? From the quantity perspective of it, we're showing, as we talked about, increased scope, volume and/or both, right?

But what's interesting also is that as we do that, our costs go down in addition to it, we're bringing on new logos. So that's really the way we should think about it, increased price for our clients and productivity associated with it, really more than offset by what we're seeing in terms of the increased scope, volume and new clients that were coming in. And again, early days, but we've seen adoption really pick up.

So maybe just -- maybe I'll add, and I'll ask Jinsook for you, you are leading at the pace of adoption. I think to Mike's point, Bryan, in the existing portfolio is what we referred to as 3% because of net accretion, including our costs are going down faster. Therefore, you see the 300 bps improvement. And then addition of new logos is on the top. So I just wanted to make sure that I talked about that. And new logos existing, how is the pace since?

Sure. So we've been -- as I shared, we've been incredibly excited about the pace that it's really picking up. As you heard from our clients directly, Wesco, but also we posted online about Coca-Cola sales and services. They are named clients who are existing clients where we are starting with a really basis of strength, and they have been continuing to trust us in this journey.

So from the time that we officially made general availability GA in February, although we've been working with clients in the previous time period on the pre-beta and alpha stages, we are seeing the momentum, and that's what we are reporting out today with the numbers that you heard from myself and also Mike. So we are still very early days, and we will continue to observe and discuss and with the client testimonials, but we're very excited about the journey that we have embarked on.

Thank you, I'm sorry could you just wait to get the microphone? I'm sorry. I just want to make sure we capture the -- apologies.

[ Brad from Bank of Montreal ]. I appreciate the presentation. Your Advanced Tech Solutions growth pretty meaningfully improved in the past few quarters and also noticed it's related to really strong partnership growth. Can you talk about sort of how partnerships impact that area of the business, where and how -- if the improvement in growth are related at all and sort of what your -- is implied for partner-related strength in that 15% or more target over the next few years?

Riju, do you want to take that?

Yes. So when you think about partnerships, our partners bring core technology capability, and we bring to the table deep knowledge of process, data and client business problems. And the 2 combined together, we are able to solve complex problems for clients and have solutions that meaningfully address those problems, and we sort of are able to deliver the outcomes over there. And this is what brings the partners closer to us in domains which are differentiated versus the other companies that they currently deal with. And that drives the acceleration for us in terms of partnerships.

Yes. Maybe the only add that I'll have is that, yes, partnership is helping us improve advanced technology solution adoption, but it is also, as an example, our last mile or take an example of services agentic solutions or Agentic solutions. A lot of these are our own IP that is also taking shape.

Let me just add one more piece. We've also made significant investments, right? And that's what we're really pleased about, right, is seeing the return on those investments really driving a lot of that in combination to everything else we just talked about.

There was a question here and there.

I see Dave going in here.

And I guess my question to Advanced Tech Solutions growing super fast now. Q2 of last year, it declined 2.9%. And just wondering, has something meaningfully changed in terms of recurring revenue? Or what's -- I guess, how volatile could that be and maybe what happened a year ago?

Do you want to take that? I'll take that quickly. So look, I think first, all the investments that Mike was referring to, they started taking shape in a more concrete fashion Dave and team towards the middle of last year, point number one. And you see certainly that last mile combined with advanced technologies started getting adopted by a lot of our trusted relationships.

And I think even if you see that and wanted to be transparent about the process, if you see on a gross, we said 20%. So roughly, you can say, hey, it's $250 million. The difference is even kill, about $4 million, $5 million in that quarter that went was kind of a little bit down relative to Y-o-Y versus $40 million, $50 million higher in the next quarter. So I think the difference is really stark. I'm really pleased as to how we are progressing on Advanced Technology Solutions. And even in this quarter, we see continued momentum.

The growth, the revenue growth is 7% plus. Does that include a modest amount of acquisitions? Or is that organic?

It's all organic. There's a question here. Yes.

Surinder Thind with Jefferies. Can you actually talk about the Agentic component here and the construction of those solutions, meaning in the example that was given, where does Genpact come in building that solution? And why is that something that maybe not a sales force can do with all of the investments that they're making in their agents? You hear that with SAP. So where is that boundary between Genpact and the software vendors? And how are you thinking about that?

Great question, Surinder, do you want to take that?

Sure. So first and foremost, let me start that we are not actually setting out to build any foundational LLMs or SLMs, right? We are starting from the position of strength, and we stated that our strategy is that we're going to stay with always the domain-specific knowledge. So when we build the LLMs and SLMs, we're not building on the exception handling that, for example, that I mentioned. Number one is that we're handling not regular exceptions, we're handling what we call Level 3 exceptions. Level 3 means Level 1, the clients try to handle them. and then they pass on to the partner that's Level 2 and still did not have the overall outcome, then it comes to us.

So when we mentioned the exception handling, that's a level of knowledge, the Level 3 exception handling that we are doing. And then the other thing is which data corp is based on our real-life operations. So when we bring the expertise, the reason why we are building the solutions is based on the real-time experience and solving that Level 3 exception handling that goes into the solution. And that's the reason why we are building those on our own and bringing those outcomes to the clients.

May I just -- kind of tangential point. I'm a client. And so we have implemented the AP suite in our own operations, right? So I take great pride in running what I thought is a phenomenal operation. We have -- this is on payables. 95% of it is fully automated, right? The last 5%, right, we do work. We have a team that's focused around it. We've implemented these solutions, right? We've dramatically reduced that 5% and increased the automation associated with it. And quite frankly, the quality that's come through, I'll be frank with you, I was incredibly surprised how well this is working and the enhanced productivity it's giving me as a client.

And thank you for being first, dubious, and then now giving testimonial as a client.

I was a little skeptic. I'm going to be frank but It works.

I think we have a question down here with Puneet in the first row.

This is Puneet from JPMorgan. I wanted to ask about Gigafactory. Like it's been like a few months, 5 or 6 months since you launched that model. What's the response been like among your clients as well as your employees, like are you seeing like employees excited or seeing some natural resistance to adopting this a new different delivery model?

I'll start. Jinsook, you and Sanjeev have been at the forefront of it. We would love to have your reflections. I'll say, Puneet, 3 or 4 aspects. Number one, Sanjeev, as he mentioned in his prepared remarks, over 100 new leaders have joined our Gigafactory. And that is because of the client validation that they have heard, we also reported just today that we have over 45 clients. We launched this in January. We have about 45 clients today. And one of the clients you heard, GE Nova only a $35 billion company as to the results they are getting from Gigafactory.

And three, I think given the Genome piece that Piyush talked about is one of the core builder element that is part of Gigafactory that trains our people and also clients' people. So I think it's really a very strong posture overall in our sector, in our industry. Jinsook?

So first and foremost, the training hours talk for themselves for 2 reasons. One is these are trainings that are available through the genome that people are taking, but we also have proprietary training because of the agents, because of the domain knowledge, and those are oversubscribed because we want to give the employees the hinge on training. And then when you are talking about these people who go back to their desk, they are going to be actually training and working on them. And so that's number one. So there has been super excitement about those trainings that Sanjeev and I have been working on.

The second thing is what I covered at the road map. Our agents are not only about the domain specific on the industry verticals and horizontals, they're also about the Gigafactory because that's the mechanism by which our people are going to deliver cogenerators, when you're looking at the enterprise risk management, whether you're looking at the agent productivity, all those things are actually being built and also managed by people. So that's the second thing that really excites our people.

And then the third is this, I talked about the parallel work streams, and this is critical. Reason being is in the Gigafactory, it's not about just today because if we talk just today to the clients, as BK says, that's already a yesterday story. So we need to talk tomorrow even with our employees. So working on these parallel work streams, talking about the Agentic AI ecosystem, talking about the orchestration agents, talking about the agents that, oh, it's not only about the domain-specific in the industry and verticals, but it's also about how we deliver in Gigafactory, it's what's making difference and why you see the training hours from Piyush, why you see the numbers and outlook that actually BK and Mike are giving.

Okay. And if I can ask one more. So digital operations is, give or take, $2.5 billion in revenue. And I understand like there will be work that will transition from digital operations into a Gentech bucket over time. What does the outlook assume like the 15% growth for Advanced Technology Solutions and mid-single-digit growth for the remaining bucket? What does that assume for how much of work will transition from digital operations to Agentic on an annual basis or maybe over the next 3 or 4 years? Is there a way to think about how fast adoption of Agentic will be?

Maybe I'll take that. Look, I think overall, I'll make 3 or 4 assertions, Puneet. Point number one, we are driving this, the point that you are making, this intentional disruption. We are at the last mile, we are bringing all of this innovation, bringing these advanced technologies. Having said that, I'll tell you, with all the experience in the marketplace, it is a gradual long-term journey. We got to meet our clients where they are.

As I look at pipeline of even Core Business Services, it is -- continues to be very, very strong because a lot of clients, as both Sanjeev and I were talking about, their data is not ready. Systems are fragmented. So you certainly just cannot jump through. They see the innovation, but I think they have to go through the process. So it's a longer-term journey.

And I think the last point I'll make that typically taking the example of call center, those kind of businesses, and you saw the breadth of the work that we do, you heard possibly a number of our client stories, be it Penske or Unilever and all of these. things like call center are a de minimis part of Genpact. And we handle more complex operations in core business services. So yes, we have assumed that rotation. But we are -- and to Bryan's question earlier, we're seeing good adoption. We want faster adoption. But I think advanced technology solution being data and AI-rich data, AI, Gen AI, core AI, these are also strong suite of Genpact for a pretty long time. And with fueling of investments, it is taking off in a pretty significant way.

Yes. Just one thing if I can top up to that, BK. If you also think about it, in our digital operations in many parts of the business, it's highly annuitized, right? It is not uncommon to have a 5-year contract that's there, right? It's a highly durable base, right, that will rotate. But again, it's -- a lot is going to be driven where the client is and their comfortability of it, right? We're seeing demand on both sides.

So maybe while we're waiting for the microphone to arrive here, I'll ask one question that's come in over e-mail. This is about XponentL and M&A more broadly. So first, it asks about the strategic rationale behind the XponentL acquisition and then also how to think about the pivot of the company towards advanced technology solutions and whether that might lead to greater appetite for M&A in the future?

Why don't I take that and then I'll pass on to you, Mike. So first and foremost, M&A is definitely part of our strategy. And when we do that, it's actually a tuck-in strategy focused on how is it going to strengthen our capabilities and accelerate our capabilities. So in XponentL's case, they are data powerhouse. They're Databricks partner and they're working with Snowflake. They are ones who actually, when they come into clients, they work on data modernization, getting the data ready as fast as possible with a domain specific going back to the same theme that we had. And that was the rationale for kind of company that we are getting into exponential.

Yes. So a few comments. Our capital allocation strategy is very clearly articulated in terms of what we're able to do. So buying tuck-in capability-related acquisitions has never left our capital allocation. So the key for us is we do not buy revenue, right? So from an M&A perspective, we are buying capabilities that we think we make a business decision on buy versus build for those capabilities, which are going to be incredibly important for us as we continue to make the pivot for advanced technology solutions.

This is [ Brendan ] from Puneet at JPMorgan. I would love to ask about the build side of the buy versus build discussion that you just discussed. Could you help put a finer point on where the $150 million of investments is going? I think self-funding it is great and exciting. And just help us understand for finance people, what kind of things you're actually going to spend that money on?

Maybe I'll take that and you guys can add. Look, I think a lot of the build side is in talent, is in models, is in Agentic solutions. So for example, a lot of these Agentic solutions to Surinder's question earlier, it is -- again, we are building it last mile. We are not building what Microsoft has done, Salesforce has done, ServiceNow has done. We are building the last mile repeatable IP, our own IP, and that's where a lot of these investments are going.

I think Surinder here in second row. Thank you.

Just a big picture question about the medium-term growth framework. When you talk about 7%, how did you actually come up with that number? Is that relative to what you think an industry is going to grow? Help us understand that because when you look at your prior framework, you obviously grew above the industry average despite not hitting the target, maybe the absolute target that you wanted. How should we think about that 7% and all the components that make that up, the assumptions underlying that?

Since you said big picture, I mean, let's start from a big picture, and then pass it on to you, Mike. Look, I think I hope you all felt the change in the strategy today, Surinder and team. And as we came together as a new leadership team with a very strong foundation, core of our strategy is leverage what we are known for best last mile expertise and apply advanced technologies at speed there, okay? And that's where you see the turn in advanced technologies, already 20% of our franchise, growing in mid-teens and hopefully much better. And that is really powering our growth.

Point number two, core business services, as I mentioned earlier, continues to be a very strong foundation because as we are talking to many of our clients, they are -- they will take -- it will be a period of time before they adopt advanced technology solution full scale, they might adopt in different parts of the organization. So really feel good about how we are powering it with advanced technology solution. And that's why I think one of the specific term that Mike used, and I completely back is at least, but I'll give it to you.

And I think we will -- we have demonstrated because I also do not want -- I'll say this openly because I say this internally. I don't want numbers to get ahead of our story. I don't want numbers to get ahead of our story. and want to be prudent about it. But fundamentally, you have -- we have demonstrated that we've been at the top quartile of the growth in our cohort. But Mike?

Yes. So a few things. So I'm going to repeat. These are medium-term targets for '26 and '27, and it's at least, right? We went through a very disciplined process with the leadership team of the company that when we really thought about our business from an Advanced Technology Solutions perspective and a core perspective, right, on what we're seeing and how we're leveraging the pipeline that we're sitting on right now and where we think we can take it at a minimum, which is the 7% for 2026 and '27. What's most important is how confident we are in that.

And I think that's what BK was just trying to allude to now. It's not that the numbers get ahead of ourselves. We're building a long-term sustainable growth franchise. right? That's generating tremendous amount of cash flow for us as an organization, for our shareholders. And what's also really interesting about the company is our ability to deliver that double-digit EPS growth that I talked about in my comments with that 7% with increased margins as well.

And the free cash flow is part of the model?

Yes.

We have a couple of questions here.

Well, first of all, thank you for a great event and congrats on laying out a very clear path to double-digit profit growth. You mentioned that you expect revenue to grow faster than headcount going forward. I know for you guys as well as for the industry, that kind of has not been the case historically. Could you just elaborate a little bit on sort of why this time is different and why we should expect to see an expansion of kind of revenue per head going forward?

So maybe I'll kick off. So I think, again, I'll pivot ourselves to advanced technology solutions. And it has already demonstrated, and we shared with you revenue per head count greater than 2x the company average. But we are seeing increased momentum there. And I must again continue to emphasize early days, but we clearly see the trend building up and in all of our solutions, newer solutions, existing franchise when we are bringing this innovation at the point of execution and really feel good about that certainly in long term, you will see that.

I think I do want to underscore that we are in our invest cycle and therefore, also investing to get and acquire more and more data and AI skills, and that might be a little bit more in the medium term, but we really, really feel good. I think even the Genome piece, it's really priced at our training platform is shaping our overall global talent, and they are adopting the AI skills, data skills that is also acting as initial days, a good productivity lever.

So again, just to reemphasize, as BK just talked about, we carefully chose our words when we said long term, right, because we're very cognizant of the investment cycle that we're in now that we're self-funding, right? That potentially can manifest itself with some changes associated with it, right? But we still have a very variable -- very strong durable base of our core business services that is growing, right? We expect that to continue to rotate and that will also affect the decoupling of the revenue and FTE, right? But again, we're very much focused on, again, the revenue growth and the bottom line expansion is key for us.

So on the margin side here, as you have positive mix shift, you have gross margin improvement. You've given us an operating margin expansion within the medium-term framework. Is it too simplistic to think the gross margin expansion should be higher than that so that, that funds right, effectively funds the S&M and development expenses in the income statement? Or will it be more variable than that? And I'm surprised it took this long, but the near-term commentary that you had on 2Q, is that better anticipated in performance -- is it due to greater execution on the base business? Is it due to you signing some of those deals that were stuck in the pipe, a combination of both? Anything you could share there?

Yes. Let me answer the first one first -- the second one first, excuse me, right? So on the second quarter, you're 100% right in terms of our ability to execute, right? But in addition to it, we had a -- when we last talked in our performance, we had some delays in some large deals. One of those deals have closed, right? I can report today the other deals that were delayed are -- we still feel really good about them.

In addition to that, we had some newer large deals that came in to our business. So we feel good about how we're going to come in for the quarter, right? And we also alluded to how we're going to flow that through for the full year. And then your second question?

Gross margin.

Gross margin. Yes. So if you want to think about it, right, we have been expanding our gross margin at a faster pace than our adjusted operating income margin, right? And really, the delta of that is the self-funding of the investments. So we carefully monitor and manage that. So while we haven't given out any specific targets associated with our commitments in terms of our gross margin expansion, but that's one -- that's probably a good way to think about it. But I want to again reiterate, for '26 and '27, we expect our adjusted operating income margin to expand 25 basis points per year on top of what we'll deliver in 2025.

Okay. And I'll take another question from e-mail. I think, Riju, this one might be for you around mid-market specifically and just getting a little more detail on your strategy as you go after mid-market clients, how to think about what would allow you to scale that business where others maybe in the industry historically have had difficulty in scaling that business in a way that worked particularly well. So if you could talk -- double-click on the mid-market piece specifically?

So mid-market industry, I mean, we studied this segment carefully. And as BK said, we want to meet our clients where they are. These companies are early in their maturity cycle and are still scaling. So they need partners who understand their challenges. They also don't have large procurement functions or large transformation functions who can handle them through this journey. So they need a trusted partner who understands their journey and can walk with them through the process.

And the third is they need a partner who gives outcomes and they are assured of the outcomes. So as we study this, our mid-market levers are therefore building solutions, which are built for one, but can cater to many with some last mile configuration, ability to flex the commercial models in line with their scaling. And third, a sales team, which is focused on their specific needs and can empathize and understand how they will bridge their journey and help them scale.

So those elements, we believe, set us up for success. You heard from Advantage Solutions, how we came together to understand their exact business challenge, work with Salesforce to create a platform. And there are many such examples.

Riju, if I may add, I think what I -- what we collectively hear when we are on our beat in the market is the outcome orientation that we have, which is very enduring. Do you want to speak about that, too, sorry.

So yes, that was my second point that they want partners who give them assurance of outcomes. And we have been a partner to most of -- I mean, to all of our clients where we have stood by our promises and delivered to the outcomes, and that's our reputation in the market.

Puneet from JPMorgan. Thanks for doing this again. So I wanted to ask about this 3% revenue increase metric that you shared today when work moves from current model to an AI-based model. What drives that 3% growth? I know you talked about like how it will be more processes, more transactions. But who's handling those processes or transactions right now? Where will that shift come from? Like who's going to lose in that equation?

So I think let me -- Mike spoke about that. It's a great question for me. So I think I'll just roll from the top, and it is more for existing accounts first, point number one. And I think a simple way to think about it is P times Q, okay? -- price advantage we are giving higher productivity to our clients. Q is, which is increase in scope or in volume or both. And I think now that's the point where you are asking that, hey, who is losing or whichever way? I think there are various ways to think about it.

Point number one, whenever we onboard and you saw many of these clients, Unilever said, we started with this, then we went here, then we went here. A lot of times our Wesco, they will start in -- maybe in the corporate or in U.S., and they are in 50 countries. And the adoption takes times in $20 billion, $30 billion, $40 billion, $50 billion companies, okay? And as -- so that's kind of point number one of volume growth.

Sometimes now with these solutions, we have brought in a lot more -- one other example we took where they switched the software to Genpact. So some other software player could be the domain player. So we gain that market share. So I think those are the examples that we are seeing. I'll continue to say early days, but really feel good about that.

And there's actually a related question that came in over e-mail, which I'll just ask on this topic, which is what's the level of assumption you've built going forward in the midterm model around net revenue growth on Agent. How are you thinking about will it stay at that 3% net revenue growth going forward? Is that the assumption that's built in? Or is there a different assumption that's been built into the target?

Do you want to take that?

Sure. So the 3% was an illustrative example of what we've seen thus far with the data, and that was really about AP Solutions. So I think we've made a very prudent and conservative assumptions about how the rotation will be, right, how it will impact our revenue and how it will impact our margin.

Can you dig a little bit deeper on the conversations you're having with clients on shifting to more of an outcome-based model? How big or a large percentage of your revenues do you think you can get to? Is there like a structural limit? Is it just partnership? And then -- at some point, is there a scale where they don't want to share the economics of an outcome?

Do you want to start, Riju?

So when we think of, let's say, non-FTE models, we think of 3 different ways. It could be fixed price, it could be transaction-based, it could be outcome or value-based. The industry has traditionally sort of focused on FTE-based because it gives you assurance of cost for the client, and therefore, there has been sort of slow movement out of it.

But as we are moving to agentic solutions and advanced technology solutions, we are seeing a shift to first fixed price and transaction-based before it becomes outcomes. And that itself is a bigger shift from where our clients are starting. And we will continue to see acceleration of that because as we talked earlier, in this P versus Q equation, it's actually valuable for both parties.

So maybe if I'll add to Riju, Surinder. So today, in the entire book of roughly $4.5 billion, $5 billion, it's 45% as we reported today in all of these models. Advanced Technology Solutions is already 70% and more is happening in that direction, point number one. So we really feel good that this momentum, especially with advanced technology solution becoming bigger and bigger portion, we will see the momentum happen.

I think the one caveat that I certainly want to with all the experience with clients, we also deal with a lot of regulated industries. In a lot of different specific parts of the regulated industry, they want to have visibility to what is the headcount and so on and so forth. But I think increasingly, as our solutions become more agentic, more advanced technology-led, more machine-led, more and more momentum you will see in that direction.

What can you share on the big deals as it relates to mix of the advanced technology solutions? How is that similar or different to the mix in the base that you shared, that's roughly 80-20?

So maybe I'll take that, and Riju, if you wish to add. Overall, again, across cohorts of deals, including large deals, we are seeing strong -- early days, strong adoption of advanced technology solutions. And as we are baking in and as we are seeing this intersection of execution and innovation, last mile and advanced technologies, we are seeing a further adoption by clients. And I must also say that our -- we are a large company. So a lot of our people are also learning about it as we are progressing. But we really feel good about that momentum.

And if I were to add, clients want to create their operations, which are more agent, more data and AI led. We have the reputation of being a company that has delivered outcomes. When you marry the 2 together and when they look at their deals, and then they are more assured of getting not a piece of technology, but a real outcome from that technology powered by advanced technology solutions.

One last point. When we talk about large deals in our organization, right, these are deals of $50 million or greater. There isn't an industry standard definition of that. So I just want everyone to think about it within that context.

I'll ask about Client Zero and your willingness to experiment with Client Zero here. Can you talk about the stuff that maybe hasn't worked or like when we think about all of the industry commentary out there, some will say 30% of proposed proof of concepts haven't worked, others have higher numbers. How are you guys handling that internally? What has worked? What hasn't really worked? Obviously, what works comes into the marketplace but how are you guys working through some of those challenges?

I'll tell you what didn't work initially. We had skeptics they came from some different industries like insurance or whatever. On a more serious note, look, I think at the end of the day, Surinder and team, we are a process company. we are a data company. So we had to begin with a very strong foundation. I think what you are exactly right. This is what we experienced with our clients a lot, where data is not structured, business and IT don't work, fragmented systems, so on and so forth, which doesn't mean that we haven't had learning.

We have had many learnings, and you've been champion of that, and you can enunciate a few. But overall, I think we just needed to -- and that was another area to earlier question of our pouring investments there because at least we had a collective belief that if we cannot demonstrate as the best credential, bar none, not in our industry, bar none, then we don't have any right to go to any of our clients.

And I think now those clients are actually listening to actually -- now he goes and pitches to CFOs as to what -- I mean, we are still a small company, but what has happened in close cycle, you have seen some cash acceleration in our time to build. All of those are results of Client Zero. But any examples, Jinsook?

So from a strategic perspective, this was very deliberate, right? So number one is because we are starting from, again, going back to the theme of position of strength, why are we known for Six Sigma. And the idea is that the continuous improvement is there. So we iterate and iterate because leading to second one, which was we are about going from factory to production. Why do clients stick with us? And then even on a multiyear contract, they continue to renew, not automatically, but actually having gone out to the RFP and bid is because when it comes out of the Genpact factory, it goes through Client Zero first.

So we are walking the talk, we are using it. That means that we iterated multiple times, multiple times. So failure is embedded in it. And I always tell my team, fail forward. failure guaranteed. So just fail forward. So positioning ourselves and having doubting Thomas like Mike really helps us because that client experience, then when the clients ask us, and I literally had a couple of CFOs ask me, are you -- where is this working right here? We can tell you what it is, then I can have that credibility to bring that on.

So from Six Sigma where that is the culture of the company, we're tinkers and making sure that it works, then getting to the last mile and to embed the Client Zero is where we are experimenting, but we go from a market perspective, factory to production.

One less. I think when you think about this, leadership is key, right? I run a function, Piyush runs a function, right? Coupling that with investments and the ability to challenge the folks that are doing certain things, is there another way to look at it? We've made a huge investment in this company in terms of general AI skill knowledge, right, tools that we have there and that ability test in your environment, and it's okay to fail, right?

But that has to be supported by investments in leadership. And we are surprised every single day when we go, hold on, before we go and do this or hire for this, is there a way we can automate? Is there a technology out there, and we're supported by investments in a team that does it in addition to the products and services that we're developing today for our clients. And we're seeing meaningful impact. BK -- excuse me, Piyush talked about what he's seeing just in terms of simplification related and AI and HR function. it's really quite powerful.

Great. So we're almost out of time. If I could fit one more in from e-mail, if you don't mind, and then I think we can close unless there's any other raised hands. So just the very last one over e-mail is really around longer-term AOI margin potential, right? There are some peers in the industry that have higher margins than Genpact. And the question is whether or not there's really any structural reason that we feel Genpact cannot raise margins to those levels.

The way I articulated today and for 2026 and for 2027, right, our medium-term targets are 25% -- 25 basis points, excuse me, per year on top of what we delivered in '25. There is nothing structural that will not prevent us from potentially doing more, right, particularly with the focus as we rotate into Agentic solutions.

You heard us talk about some of the metrics associated with profitability associated with that. But we're focused on the medium term right now, and we're also super focused on delivering those outcomes and self-funding the investments that's going to drive this pivotal shift in the company to advanced technology solutions.

Great. Thank you. Thank you, Mike. I'll turn it back over to you, BK, for...

Well, first of all, thank you for engaging in Q&A. We hope you leave the room with strong sense of our vision and the bold pivot that is reshaping Genpact as an AI-first company. We are intentionally disrupting ourselves, scaling advanced technology solutions on foundation of core business services and driving accelerated growth and expanding margins. We are building tomorrow's Genpact today for our clients, our people and our shareholders through GenpactNext.

And I want to take a moment to thank our global teams whose relentless focus on clients truly makes this possible and for all of your trust and partnership. For those who are joining in person here, first of all, thanks and join us at the networking reception and meet our teams and our partners, a few of our partners are here. And I think this session then ends as a formal for our webcast. Is that fair?

Yes. This formally concludes. And thank you all for your time. It's great to see you, and we look forward to connecting at the event. Thank you.