- Consolidated Revenue: $13.84 billion, a 4.7% increase in constant currency for FY25.
- Operating Margin: 18.3%, a 7 basis points increase over FY24.
- Services Business Growth: 4.8% in FY25.
- IT and Business Services Growth: 4.6% increase.
- Engineering and R&D Services Growth: 5.5% increase.
- HCL Software Growth: 3.5% increase, with ARR at $1.03 billion.
- Q4 Revenue: Declined 0.8% sequentially, grew 2.9% year on year.
- Q4 Operating Margin: 17.9%.
- Geographic Growth: Americas grew 5.3%, ROW 4.7%, Europe 3.5% year on year.
- Telecom, Media, and Publishing Growth: 43.4% in FY25.
- Retail CPG Growth: 10.7% increase.
- Technology and Services Growth: 6.7% increase.
- Net New Booking: $3 billion for the quarter, $9.4 billion TCV for FY25.
- Employee Count: 223,420 as of March 31, 2025.
- Voluntary Attrition: 13% on an LTM basis.
- Net Income for Q4: $496 million at 14.2% of revenue.
- Net Income for FY25: $2.041 billion at 14.7% of revenue.
- Return on Invested Capital (ROIC): 37.9%, up 411 basis points year on year.
- Operating Cash Flow: $2.63 billion for the year.
- Free Cash Flow: $2.5 billion for the year.
- Gross Cash: $3.662 billion.
- Net Cash: $3.35 billion.
- EPS: INR64.09, up 10.8% year on year.
- Dividend: INR18 per share for the quarter, totaling INR60 per share for the year.
Release Date: April 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- HCL Technologies Ltd (BOM:532281, Financial) reported a consolidated revenue of $13.84 billion for FY25, marking a 4.7% increase in constant currency.
- The company's services business outpaced similar-sized peers for the third consecutive year, achieving a growth of 4.8%.
- HCL Technologies Ltd (BOM:532281) secured $3 billion in net new bookings for the quarter, the second highest after the September 2023 quarter.
- The company's engineering and R&D services business experienced a record high booking, with a 75% growth in FY25.
- HCL Technologies Ltd (BOM:532281) has made significant strides in AI, with its AI Force platform gaining traction and impacting both clients and internal operations.
Negative Points
- The company's Q4 revenues declined 0.8% sequentially due to seasonality in the software business.
- HCL Technologies Ltd (BOM:532281) experienced a decline in its North American business, attributed to the completion of a large program in the retail CPG segment.
- The company anticipates subdued discretionary spending and potential budget cuts due to geopolitical factors like tariffs and deglobalization.
- HCL Technologies Ltd (BOM:532281) reported a 1.8% reduction in its employee base, despite a 4.7% revenue growth, due to AI-led automation efforts.
- The company's guidance for FY26 reflects cautious optimism, with revenue growth expected to be between 3% to 5% in constant currency, indicating potential challenges ahead.
Q & A Highlights
Q: Can you explain the decline in North American revenue this quarter, and how it aligns with your expectations?
A: The decline was primarily due to the completion of a large program in the retail CPG segment, which we had anticipated. Overall, the quarter proceeded as expected without major surprises. (C. Kumar, CEO)
Q: How is the environment looking for the Engineering and R&D (ER&D) segment, given last year's decline?
A: We are pleased to report a 75% year-on-year growth in ER&D bookings. Our integrated go-to-market strategy is yielding positive results, and we expect good growth in this segment for FY26. (C. Kumar, CEO)
Q: What is driving the disconnect between the recessionary environment and your positive guidance?
A: Despite the macroeconomic challenges, our strong Q4 bookings and pipeline give us confidence. We anticipate some deterioration in the environment, but our guidance reflects various scenarios, including potential growth from recent bookings. (C. Kumar, CEO)
Q: How do you see the role of AI in cost optimization and modernization efforts?
A: Generative AI is a significant positive trigger for modernization and transformation, leading to reduced total cost of ownership. We expect modernization programs to drive efficiency and innovation, rather than pure cost takeout initiatives. (C. Kumar, CEO)
Q: Can you provide insights into the impact of AI-led efficiencies on your revenue and market share?
A: AI-led efficiencies vary by service, with software development seeing 20-25% efficiency gains. We are gaining wallet share from competitors, and our renewals often include incremental business that offsets deflationary impacts. (C. Kumar, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
