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Hexaware Technologies Limited has issued a clarification regarding a news article published by moneycontrol.com on May 8, 2025, titled “Hexaware reduced BPO workforce by 500 in AI-triggered hiring shift: CEO R Srikrishna”. The company stated that during an interview on April 30, 2025, the CEO mentioned adding approximately 100 people in the IT business and reducing approximately 500 people in the BPO business during Q1 CY’25. The CEO also mentioned a potential long-term impact of AI on the BPO business based on management belief and company investments in AI.

However, Hexaware clarified that the reduction in the BPO workforce for Q1 CY’25 was not due to AI, but is largely on account of the seasonal nature of business.

Hexaware Technologies Limited announced a correction to the transcript of its investor/analyst call held on April 30, 2025, regarding Q1 CY25 results. A typographical error incorrectly stated the margin for Q1 as 67.7% instead of the correct 16.7%.

The company's Q1 CY25 performance and outlook were discussed in detail during the call:

• Q1 CY25 Financials: Revenue grew 12.4% YoY in reporting currency (12.7% in constant currency). EBITDA margin was 16.7%, improving by 40 bps sequentially and up ~20% YoY in absolute terms. EPS was up 16.7% YoY. The company ended the quarter with a healthy cash balance of $225 million, debt-free.
• Operational Highlights: Offshore mix improved by 200 bps QoQ. Net headcount declined, but IT headcount increased by ~100. Attrition was 11.2%. Utilization improved QoQ to 82-83%. DSO was 75 days (target 70-72 days). LTM Q1 OCF to EBITDA was 67% (target 70%). Effective Tax Rate (ETR) for Q1 was 25%, with a full-year guidance of ~26%.
• Dividend: Post-quarter close, a dividend of $5.75 per share was declared, totaling $40 million.
• Strategic Focus & Deal Wins: The company is focusing on four strategic accelerators: AI legacy modernization (seeing strong pipeline with 40+ clients), PE as a channel, expansion in HealthTech/ISVs (splitting High-Tech and PS verticals), and growing Middle East/India markets (healthy pipeline, seeking significance in India GCC). Significant recent wins include a transnational bank (becoming non-incumbent vendor for ~$200M/annum work), a European bank (lead SAP implementer for a large transformation), a global bank (app modernization), a legal advisory firm (GenAI app), an airline (One Order implementation), another top 10 global legal firm, a large conglomerate's healthcare division (app/legacy modernization), and a large pet insurance company (strategic supplier).
• GSE Client Updates: A previously delayed consolidation deal with one GSE client has now begun. Another GSE client had a sharp ramp-down announced recently (~1% of company revenue impact), but management sees potential large upside from future vendor consolidation (opportunity involving 2,500 FTEs). Another large consolidation opportunity exists in a different global bank (potential for $0.5 billion/annum spend).
• Outlook for 2025: The company is not providing formal annual guidance but expects a "pretty solid year". Q2 will see underlying strong performance moderated by the two specific headwinds (GSE ramp-down, program end), resulting in a "good Q2". Accelerated growth is expected in Q3 as these headwinds subside. Sequential growth is anticipated in Q4, potentially bucking the usual trend, driven by pipeline and backend ramp-ups. The company plans to hire 1800-2000 IT personnel in Q2. Banking and Financial Services are expected to lead growth, while M&C will be a drag. The full-year EBITDA margin guidance of 17.1% to 17.4% is reiterated, with ERP costs providing a tailwind from the end of Q2. Management expressed confidence in achieving the medium-term goal of $3 billion revenue by CY2029.

Hexaware Technologies, a global leader in IT, AI, and digital solutions, inaugurated its new UK headquarters at Level 32, One Canada Square, Canary Wharf, London, on 1st May 2025. This expansion follows Hexaware’s 25% UK CAGR over the past five years, driven by rising demand for IT services and digital transformation. The strategic move aims to deepen local client engagement and access the region's diverse talent pool. The UK is Hexaware’s second-largest global market.

The new HQ will function as a co-innovation center for client collaboration, leveraging Hexaware's Center of Excellence in AI, data management, digital engineering, and cybersecurity across key industries like banking, financial services, insurance, healthcare, and more. The inauguration ceremony was attended by Sir Nigel Wilson (Chairman, Canary Wharf Group), Deepa Doshi (Head of Missions, Ruth Strauss Foundation), and R. Srikrishna (CEO and Executive Director, Hexaware Technologies), alongside clients, partners, and industry leaders.

Amrinder Singh, President and Head - EMEA and APAC Operations, Hexaware, stated that the UK and Ireland is one of the fastest-growing markets globally, achieving tenfold growth in the past decade, and the company aims to maintain this momentum by driving innovation, economic growth, job creation, and inward investment.

Parameshwaran Iyer, Senior Vice President and Regional Head – UK and Ireland, Hexaware, highlighted the company's 25-year presence in the UK with around 650 employees, noting the new HQ strengthens local presence to drive closer relationships and deliver high-quality output.

Hexaware plans to strengthen its footprint with a major delivery center in Birmingham and aims to double its UK headcount within the next three years. Sir Nigel Wilson welcomed Hexaware, emphasizing Canary Wharf's appeal for technology businesses, while Deepa Doshi acknowledged Hexaware's contribution to the Ruth Strauss Foundation.

• Hexaware Technologies Limited reported Q1 CY25 results with a flattish quarter-on-quarter performance but solid 12.4% year-on-year growth in reporting currency (12.7% in constant currency). INR growth was 16.5% year-on-year.
• Q1 performance was impacted by revenue headwinds exceeding 100 basis points from planned client work movement offshore and a delayed program start.
• EBITDA margin improved by 40 basis points sequentially to 16.7% in Q1, driven by improved offshore mix and operational benefits. Absolute EBITDA grew 20% year-on-year.
• Net profit improvement was moderated by an increased ETR of 25% in Q1 (vs 23% in Q4 CY24). Full year ETR guidance is approximately 26%.
• The company ended the quarter with a healthy cash balance of $225 million.
• Hexaware declared a dividend of $5.75 per share post-quarter close, totaling a $40 million payout.
• Operational highlights include a 200 basis point sequential improvement in offshore mix, a slight increase in IT headcount (net headcount reduced due to BPS), stable attrition at 11.2%, improved utilization, and a DSO of 75 days (expected to return to 70-72 target by year-end).
• Strategic investments were made in expanding facilities in Dehradun and Hyderabad, and opening customer experience centers in New Jersey and London.
• Key wins include entry into a transnational bank's restricted vendor list (potential $200 million per annum bidding pool), lead implementer role for SAP co-transformation at a European bank, app modernization work with a large global bank, GenAI app platform work for a legal firm, airline industry's new standard implementation, work with another top 10 global legal firm, app/legacy modernization for a healthcare division, and strategic supplier status with a large pet insurance company.
• Updates on large consolidation opportunities: A previously won deal execution was delayed but has started (expected $20-30 million per annum incremental revenue from Q2). A GSC client experienced a sharp ramp down (approx 1% of company revenue impact) effective immediately, but management intends to consolidate vendors where Hexaware is the largest and sees potential large upsides. Two other very large consolidation opportunities are in the pipeline.
• Outlook for 2025: While not providing formal guidance, the company expects underlying Q2 performance to be strong, but near-term headwinds will make it a 'good' quarter instead of 'great'. Accelerated growth is expected in Q3, and sequential growth is anticipated in Q4, bucking the usual trend.
• Plans to hire 1800-2000 IT people in Q2.
• Vertical outlook: Banking & Financial Services expected to lead growth (Banking specifically expected sharp QonQ growth from Q2), TNT/HTPS/HNI at company average, and MLC expected to face significant weakness.
• Full year EBITDA margin guidance of 17.1% to 17.4% was reiterated, with a focus on growth over immediate profit maximization. ERP costs will be a tailwind from the end of Q2.
• Management expressed confidence in achieving the medium-term goal of $3 billion revenue by CY2029, driven by strategic accelerators.
• Commented on reshoring (potential opportunity) and the USD bond refinancing (good options available).
• Announced plans to split High-tech and Professional Services into distinct verticals.