- Persistent Systems Q4 FY25 & Full-Year Performance: Simple Summary
- Management and Leadership Changes
- Financial Results at a Glance
- Deal Bookings
- Key Client Metrics
- Growth by Region and Industry
- Operational Performance and Margins – Persistent Systems
- Cash Flow & Financial Strength
- Workforce and Utilization
- Persistent Systems’ AI and Platform Approach
- Key Deals Closed This Quarter
- Awards and Recognition
- Company View and Outlook
- Environmental and Governance Efforts
- Common Analyst Questions Answered
- Risks to Watch
Persistent Systems Q4 FY25 & Full-Year Performance: Simple Summary
Persistent Systems has shared its results for the fourth quarter and full fiscal year FY25. The company shows steady growth in revenue, improved margins, and strong client engagement. Here’s a clear breakdown of all key areas.
Management and Leadership Changes
- Persistent Systems appointed CFO Vinit Teredesai as an additional director on the board. This move adds depth to the leadership team and strengthens company governance.
Financial Results at a Glance
Q4 FY25 Highlights
- Revenue: $375.2 million (up 4.2% from last quarter, 20.7% from last year)
- Revenue in INR: 5.9% growth QoQ, 25.2% YoY
- EBIT margin: 15.6% (up 0.7% QoQ)
- Net profit margin: 12.2%
- Operating cash flow vs net profit: 108.4%
FY25 Full Year Summary
- Revenue: $1.41 billion (18.8% growth YoY)
- INR growth: 21.6% YoY
- EBIT margin: 14.7%
- Net profit margin: 11.7%
- EPS: ₹91.20 (up 25.9%)
- Return on capital (ROCE): 39.7%
- Final dividend: ₹15 (Total for FY25: ₹35, 39% payout)
- Cash & investments: $270 million
Deal Bookings
- Q4 Total Contract Value (TCV): $517.5 million
- New bookings: $329 million
- Annual Contract Value (ACV): $350.2 million
- New ACV: $198.1 million
- FY25 TCV: $2.1 billion
- FY25 ACV: $1.5 billion
Note: There was a slight dip in new deals this quarter, mainly due to seasonal factors. However, long-term deals continue to support growth.
Key Client Metrics
- Growth from top clients was strong:
- Top 5 clients: +35.3%
- Top 10 clients: +27.3%
- Top 20 clients: +25.1%
- Top 50 clients: +23.3%
- Top 10 clients now account for 42.2% of total business.
- The number of large clients increased:
- $75M+ clients: 2 to 4
- $50M+ clients: 3 to 4
- $10M+ clients: 17 to 21
- $5M+ clients: 40 to 55
- $1M+ clients: 178 to 191
Growth by Region and Industry
Q4 Growth by Region (YoY in USD)
- North America: +21.3%
- Europe: +30.6%
- India: +10.6%
- Rest of the world: +8.6%
FY25 Full Year Regional Growth
- North America: +20.6%
- Europe: +7.4%
- India: +12.5%
- Rest of the world: +34.5%
Growth by Industry (Q4 YoY)
- Healthcare & Life Sciences: +33.6%
- Banking, Financial Services, Insurance (BFSI): +26.6%
- Software & High-Tech: +9.7%
Full-Year Industry Growth (FY25)
- Healthcare & Life Sciences: +54%
- BFSI: +17.8%
- Software & High-Tech: +3.7%
Operational Performance and Margins – Persistent Systems
Persistent Systems improved margins through better workforce use and lower general expenses.
Margin Drivers:
- Positive:
- Higher employee utilization
- Reduced selling costs
- FX gains
- Earn-out credits from past deals
- Negative:
- Lower profit from managed services (IP revenue)
Subcontracting costs rose slightly due to client shifts in BFSI.
Cash Flow & Financial Strength
- Other income: ₹153.5 million (includes ₹21.2M recovery)
- Forex loss: ₹154.3 million (compared to a gain last quarter)
- Tax rates:
- Q4: 21.7%
- FY25: 23.2% (guidance: 23–23.5%)
- Hedging: $300M at ₹86.3/USD
- Operating cash flow remains strong at 108.9% of net profit
Workforce and Utilization
- Total employees: 24,594 (up by 744 YoY)
- Attrition: 12.9% over the last year (slightly up from 11.5%)
- Utilization: At its highest level ever, thanks to smart resource planning
Persistent Systems’ AI and Platform Approach
Persistent is building its business around four main AI strategies:
1. Technology
- SASVA platform is at the center
- 15 new patents filed in Q4 (35 in total)
- Faster software development with Generative AI
2. Business Use
- AI layers improving operations in BFSI and healthcare
- Tools like GenAI Hub, iAURA used in daily workflows
3. Acquisitions
- Bought Starfish (contact center technology)
- Acquired Arrka (privacy and data protection)
4. Business Model Shift
- Moving towards high-value, result-based projects
Major AI Partnerships
- NVIDIA, Google, IBM, Salesforce, Databricks, Snowflake
Key Deals Closed This Quarter
Software and Tech
- Supporting product plans for large banks
- R&D support for a non-profit software firm
- Managing 24/7 security operations for a cyber firm
BFSI
- AI for financial insights
- Data platform for a US finance firm
- Tech upgrade for a UK payment provider
Healthcare
- AI used for claim processing
- Faster R&D cycles using SASVA
- GenAI used for compliance and IT upgrades
Awards and Recognition
Persistent Systems received awards from:
- ISG, Gartner, Google Cloud, Everest, and Whitelane
- Recognized in ET Human Capital Awards
- CEO Sandeep Kalra named Tech Titan (BT India Awards)
- Featured on Nasdaq Tower for sustainability efforts
- Listed in S&P Global’s top 10% ESG rankings
Company View and Outlook
Persistent Systems sees longer decision times due to the global market situation, but no major client has dropped off.
Management Goals:
- $2B revenue target by FY27 remains on track
- EBIT margin expected to rise by 200–300 basis points
- BFSI and Tech will likely lead next year, with Healthcare catching up
Future Strategy:
- Possible M&A to enter manufacturing and retail
- More focus on Europe for business diversity
- Investing in GenAI to expand services
Environmental and Governance Efforts
- 100% renewable energy used at offices in Pune, Nagpur, and Goa
- Recognized for strong governance in India and the US
Common Analyst Questions Answered
- Healthcare: Still growing despite US funding cuts due to a small base and spread-out projects
- BFSI: Gaining from client consolidation; focus on essential projects
- Margins: SASVA platform, higher utilization, and lower costs help
- Cash Flow: Remains healthy
- Sales Delay: Some pipeline delays, but new opportunities are growing
Risks to Watch
- Global economic uncertainty may slow client decisions
- Healthcare funding cuts in the US
- Slight rise in employee attrition
- Q4 margin boost partly from one-time items and forex
Persistent Systems continues to grow well with smart strategies, strong tech, and stable finances. With a focus on AI platforms like SASVA, better client focus, and a strong leadership team, the company is in a solid position to reach its FY27 goals. It also keeps improving margins while managing costs and building new capabilities.
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I’m Rahul Chaudhary, and I write about everything related to the Share Market. From Stock Trends and Share Prices to the Latest News and IPO Updates, my articles aim to provide you with valuable insights to help you navigate the world of investing. Stay tuned for expert tips and updates to keep you informed!
