HCL Technologies Q2 FY25 Investor Release PDF

October 14, 2024 The General Manager The Manager BSE Limited National Stock Exchange of India Limited Corporate Relationship Department Listing Department Phiroze Jeejeebhoy Towers...

October 14, 2024 The General Manager The Manager BSE Limited National Stock Exchange of India Limited Corporate Relationship Department Listing Department Phiroze Jeejeebhoy Towers Exchange Plaza Dalal Street 5th Floor, Plot No. C-1, Block-G Mumbai- 400 001 Bandra-Kurla Complex, Bandra(E) Mumbai-400 051 BSE Scrip Code: 532281 NSE Scrip Code: HCLTECH Sub.: Investor Release Q2 FY 2025 Dear Sir/Madam, Enclosed please find an Investor Release dated October 14, 2024 on the financial results of the Company for the quarter ended September 30, 2024. Thanking you, For HCL Technologies Limited Manish Digitally signed by Manish Anand Anand 17:23:32 +05'30' Date: 2024.10.14 Manish Anand Company Secretary Encl: a/a HCL Technologies Ltd. Technology Hub, Special Economic Zone Corporate Identity Number: L74140DL1991PLC046369 Plot No. 3A, Sector 126, NOIDA– 201304, UP, India Registered Office: t: +91 120 4306000 f: +91 120 4680330 806 Siddharth, 96, Nehru Place, New Delhi -110009, India Q2 FY25 Investor Release October 14, 2024 Noida, India Safe Harbor Statement Certain statements in this release are forward-looking statements, which involve a number of risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from those in such forward-looking statements. All statements, other than statements of historical fact are statements that could be deemed forward looking statements, including but not limited to the statements containing the words 'planned', 'expects', 'believes', 'strategy', 'opportunity', 'anticipates', 'hopes' or other similar words. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding impact of pending regulatory proceedings, fluctuations in earnings, our ability to manage growth, intense competition in IT services, Business Process Outsourcing and consulting services including those factors which may affect our cost advantage, wage increases in India, customer acceptances of our services, products and fee structures, our ability to attract and retain highly skilled professionals, our ability to integrate acquired assets in a cost effective and timely manner, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, the success of our brand development efforts, liability for damages on our service contracts, the success of the companies / entities in which we have made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital or acquiring companies outside India, and unauthorized use of our intellectual property, other risks, uncertainties and general economic conditions affecting our industry. There can be no assurance that the forward-looking statements made herein will prove to be accurate, and issuance of such forward looking statements should not be regarded as a representation by the Company or any other person that the objective and plans of the Company will be achieved. All forward-looking statements made herein are based on information presently available to the management of the Company and the Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company. Q2 FY 2025 Highlights 1 Revenue INR Revenue of ₹28,862 Crores, up 2.9% QoQ & up 8.2% YoY Constant Currency (CC) Revenue up 1.6% QoQ & up 6.2% YoY 4 People Total People Count at 218,621; Net addition: (780) Added 2,932 freshers USD Revenue of $3,445M, up 2.4% QoQ & up 6.8% YoY LTM Attrition at 12.9%*, (down from 14.2% in Q2 of last year) HCLTech Services Revenue up 1.6% QoQ & up 5.9% YoY CC Digital Revenue up 7.8% YoY CC; contributes 38.5% of Services HCLSoftware Revenue up 9.4% YoY CC HCLSoftware ARR at $1.05B, up 0.6% YoY CC 5 ESG - Awards and Recognitions HCLTech ranked #1 India-headquartered company in TIME magazine’s World’s Best Companies 2024 highlighting HCLTech’s exceptional performance across employee’s satisfaction, revenue growth and ESG metrics 2 Profitability & Return Metrics EBIT at ₹5,362 Crores (18.6% of revenue), up 11.8% QoQ & up 8.7% YoY NI at ₹4,235 Crores (14.7% of revenue), down 0.5% QoQ & up 10.5% YoY HCLTech has been ranked No. 7 in the BW Businessworld India’s Top 50 Most Sustainable Companies 2024 listing, and No. 2 in the IT & Communications Sector HCLTech wins Equinix Social Governance Award for Asia Pacific ROIC (on LTM basis) – Company at 35.7%, up 353 bps YoY; Services at 43.5%, up 403 bps YoY 6 OCF at $2,521M and FCF at $2,388M (on LTM basis) FY25 Guidance FCF/NI at 119% (on LTM basis) Company Revenue growth expected to be between 3.5% - 5.0% YoY in CC Dividend of ₹12/- per share, 87th consecutive quarter of dividend pay-out Services Revenue growth expected to be between 3 3.5% - 5.0% YoY in CC Bookings EBIT margin to be between 18.0% – 19.0% TCV (New Deal wins) at $2,218M *Note: Attrition excludes involuntary attrition and digital process operations.  Leadership Comments Roshni Nadar Malhotra C Vijayakumar Shiv Walia Chairperson CEO & Managing Director Chief Financial Officer HCLTech HCLTech HCLTech “We remain committed to delivering “We delivered a strong quarter with revenue growing “HCLTech has delivered robust financial results with business growth in a sustainable and 1.6% QoQ in constant currency and EBIT coming in at constant currency (CC) revenue growth at an responsible way. We have sharpened 18.6%. This growth was well distributed across verticals, industry leading 6.2% YoY. INR revenue reached our focus on upskilling our people in geographies, and offerings. HCL Software has delivered ₹28,862 Crores, marking a sequential growth of next-generation technologies to a stellar performance of 9.4% YoY this quarter and 6.4% 2.9% and a YoY growth of 8.2%. This revenue growth continue enabling the art of the growth in H1 FY25 in constant currency, demonstrating has come with an improved profitability. Our EBIT possible for our clients. Our global the increasing relevance of our products for the digital margins in Q2 rose to 18.6%, up 149 bps sequentially. community engagement footprint economy. Our pipeline is very strong, including Data & LTM Return on Invested Capital (ROIC) stands at continues to grow.” AI, Digital Engineering, SAP migration and efficiency led solid 35.7% at company level and 43.5% at Services, programs. Our GenAI offerings like AI Force and AI an expansion of 353 bps YoY and 403 bps YoY Foundry are resonating very well with our clients and respectively. Our dedicated efforts to improve our should be drivers of efficiency, growth, and innovation cash conversion continue to yield best in class over the medium term.” results, with LTM FCF/NI coming in at 119%.” Quarterly Performance Trends – $ HCLTech Consolidated Revenues EBIT Net Income In $M In $M In $M 3,415 3,430 3,445 3,364 3,225 675 640 597 603 522 575 496 506 480 464 Sep'23 Dec'23 Mar'24 Jun'24 Sep'24 Sep'23 Dec'23 Mar'24 Jun'24 Sep'24 Sep'23 Dec'23 Mar'24 Jun'24 Sep'24 Revenue Growth YoY CC Services YoY CC EBIT Margin Net Income Margin 6.7% 5.9% 5.8% 4.2% 3.3% 19.8% 18.5% 17.6% 17.1% 18.6% 14.7% 6.0% 5.6% 6.2% 15.3% 14.7% 4.3% 14.4% 14.0% 3.4% Sep'23 Dec'23 Mar'24 Jun'24 Sep'24 Sep'23 Dec'23 Mar'24 Jun'24 Sep'24 Sep'23 Dec'23 Mar'24 Jun'24 Sep'24 Quarterly Performance Trends – ₹ HCLTech Consolidated Revenues EBIT Net Income In ₹ Crores In ₹ Crores In ₹ Crores 28,446 28,499 28,862 28,057 5,615 5,362 4,350 26,672 5,018 4,257 4,235 4,934 4,795 3,832 3,986 Sep'23 Dec'23 Mar'24 Jun'24 Sep'24 Sep'23 Dec'23 Mar'24 Jun'24 Sep'24 Sep'23 Dec'23 Mar'24 Jun'24 Sep'24 Revenue Growth YoY CC Services YoY CC EBIT Margin Net Income Margin 6.7% 5.9% 5.8% 4.2% 3.3% 19.8% 15.2% 18.5% 17.6% 17.1% 18.6% 6.0% 5.6% 6.2% 15.3% 14.7% 4.3% 14.4% 14.0% 3.4% Sep'23 Dec'23 Mar'24 Jun'24 Sep'24 Sep'23 Dec'23 Mar'24 Jun'24 Sep'24 Sep'23 Dec'23 Mar'24 Jun'24 Sep'24 LTM Performance Trends HCLTech Consolidated EPS (Diluted) Client Category In ₹ Number of Clients 62.02 56.95 50.94 44.92 42.51 Sep'20 Sep'21 Sep'22 Sep'23 Sep'24 FCF/NI NI FCF NI FCF In $M 5-Year Average: ~127% FCF/NI: 119% 2,577 2,662 2,388 2,004 1,847 1,792 1,825 1,871 1,659 1,570 Sep’20 Sep’21 Sep’22 Sep’23 Sep’24 Sep'20 Sep'21 Sep'22 Sep'23 Sep'24 $100+M $50+M $10+M $5+M $1+M Segment-wise Highlights for the Quarter ended 30-Sep-24 HCLTech Consolidated Revenue Mix and Growth Details 30-Sep-23 30-Jun-24 30-Sep-24 YoY CC Growth QoQ CC Growth IT and Business Services (A) 74.6% 74.5% 74.6% 6.2% 1.8% Engineering and R&D Services (B) 16.1% 15.9% 15.8% 4.3% 1.1% Services (A + B) 90.7% 90.4% 90.4% 5.9% 1.6% HCLSoftware (C) 9.7% 9.9% 9.9% 9.4% 1.4% Inter-segment1 (D) (0.4%) (0.3%) (0.3%) Total (A + B + C + D) 100.0% 100.0% 100.0% 6.2% 1.6% 1. Inter-segment revenue is related to products and services of HCLSoftware used by Services business in rendering services to their customers. EBIT Margin Details 30-Sep-23 30-Jun-24 30-Sep-24 YoY BPS change QoQ BPS change IT and Business Services 18.2% 16.6% 17.6% (57) 95 Engineering and R&D Services 19.2% 16.7% 18.5% (70) 183 Services 18.3% 16.7% 17.8% (59) 110 HCLSoftware 19.3% 20.5% 25.6% 630 503 Total 18.5% 17.1% 18.6% 8 149 Effective April 1, 2024, services related to certain software products, previously under HCL Software, are now managed by IT and Business Services and Engineering and R&D Services segments. Revenues and results have been reported under respective segments, with prior period figures restated. The impact of this change is immaterial for the segments. Return on Invested Capital (ROIC) (Amount in $M) HCLSoftware P&L (Quarter ended) 30-Sep-23 31-Dec-23 31-Mar-24 30-Jun-24 30-Sep-24 Revenues 311.4 411.3 334.5 334.4 341.9 EBITDA 108.8 196.1 120.3 116.4 134.0 EBIT 60.0 135.4 69.8 68.6 87.4 NOPAT 46.2 108.3 55.5 52.0 66.2 Estimated Invested Capital 30-Sep-23 31-Dec-23 31-Mar-24 30-Jun-24 30-Sep-24 Average (Quarter ended) HCLTech Services 3,721 3,755 3,539 3,565 3,573 3,630 HCLSoftware 1,629 1,741 1,538 1,515 1,483 1,581 Invested Capital 5,349 5,496 5,076 5,080 5,056 5,211 Cash & Treasury Balance 2,558 2,617 3,110 2,985 3,166 Total 7,907 8,114 8,186 8,065 8,221 LTM ROIC 30-Sep-23 31-Dec-23 31-Mar-24 30-Jun-24 30-Sep-24 HCLTech Services 39.5% 40.2% 41.7% 42.8% 43.5% HCLSoftware 15.9% 16.4% 16.2% 16.1% 17.8% HCLTech 32.2% 32.8% 33.8% 34.6% 35.7% Estimated effective tax rate for HCLSoftware segment has been arrived at by applying the tax on Specific units/entities from where HCLSoftware business operates. Residual tax has been allocated to Services business. Common assets and liabilities have been allocated between the businesses in ratio of last twelve months revenues. Average invested capital has been computed using average of last 5 quarters. Effective April 1, 2024, services related to certain software products, previously under HCL Software, are now managed by IT and Business Services and Engineering and R&D Services segments. Revenues and results have been reported under respective segments, with prior period figures restated. The impact of this change is immaterial for the segments. HCLSoftware Metrics Quarter Ended HCLSoftware Revenue 30-Sep-23 31-Dec-23 31-Mar-24 30-Jun-24 30-Sep-24 Perpetual License Upfront & Others 30.6 47.6 31.6 36.4 58.2 Subscription & Support 264.8 346.6 286.1 281.7 267.2 Professional Services 16.0 17.0 16.7 16.4 16.5 Total Revenue* 311.4 411.3 334.5 334.4 341.9 Perpetual License upfront and others revenue includes upfront revenue recognized from perpetual licenses and compliance revenues. Subscription and Support revenue includes all term subscription revenues, support revenues (including those attributable to perpetual licenses) and Software-as-a-Service (SaaS) revenues. Revenue share from IP Partnerships is included in respective lines above based on the information provided by the partners. Quarter Ended HCLSoftware ARR 30-Sep-23 31-Dec-23 31-Mar-24 30-Jun-24 30-Sep-24 ARR* 1024.5 1,052.8 1,016.1 1014.4 1048.9 ARR Growth YoY CC 3.9% 2.7% 0.7% (0.3%) 0.6% Annual Recurring Revenue (ARR) is the annualized value of all term subscription licenses, support obligations (including those attributable to perpetual licenses) and Software-as-a-Service (SaaS) contracts that are active on the last day of the quarter. In respect of IP Partnerships, ARR is computed based on annualized value of HCL’s revenue share of the revenue reported by the partners for support services and new license sales in the current quarter. ARR excludes upfront revenue recognized on sale of perpetual licenses, professional services and any other non-recurring revenue. ARR is an operating metric, which should be viewed independently of revenue and is not a forecast of future revenues. Growth in ARR may not always be reflected in Revenue growth. Effective April 1, 2024, services related to certain software products, previously under HCL Software, are now managed by IT and Business Services and Engineering and R&D Services segments. Revenues and results have been reported under respective segments, with prior period figures restated. The impact of this change is immaterial for the segments. Services Revenue Mix and Growth for Quarter ended 30-Sep-24 Services Revenue up 1.6% QoQ & up 5.9% YoY in Constant Currency By Geographies Details 30-Sep-23 30-Jun-24 30-Sep-24 YoY CC Growth Americas 64.5% 66.0% 65.1% 7.5% Europe 28.5% 27.9% 28.4% 4.2% ROW 7.0% 6.1% 6.5% (2.6%) By Verticals Details 30-Sep-23 30-Jun-24 30-Sep-24 YoY CC Growth Financial Services 22.6% 21.0% 20.5% (4.5%) Manufacturing 19.3% 19.4% 19.5% 7.1% Lifesciences & Healthcare 17.5% 15.9% 16.0% (2.8%) Technology and Services 13.1% 13.0% 13.1% 5.6% Telecommunications, Media, Publishing & Entertainment 8.0% 12.2% 12.1% 61.2% Retail & CPG 9.6% 9.4% 9.6% 6.2% Public Services# 9.9% 9.1% 9.2% (2.0%) # Public Services include Energy & Utilities, Travel - Transport - Logistics and Government. Client Metrics YoY QoQ Number of $M Clients (LTM) 30-Sep-23 30-Jun-24 30-Sep-24 Change Change $100M+ 20 22 22 2 - $50M+ 49 48 52 3 4 $20M+ 132 133 137 5 4 $10M+ 243 256 251 8 (5) $5M+ 402 404 402 - (2) $1M+ 971 951 952 (19) 1 Client Contribution to Revenue (LTM) 30-Sep-23 30-Jun-24 30-Sep-24 Top 5 Clients 9.8% 11.4% 12.1% Top 10 Clients 17.2% 19.6% 20.1% Top 20 Clients 27.3% 30.1% 30.8% Days Sales Outstanding 30-Sep-23 30-Jun-24 30-Sep-24 Days Sales Outstanding* 61 60 57 *Excluding unbilled receivables Key Deal Wins A Fortune 200 global technology solutions company selected HCLTech to achieve business Xerox expanded its strategic partnership with HCLTech spanning AI-driven engineering outcomes through product and AI-aligned operations. HCLTech will implement its GenAI services and digital process operations. HCLTech will leverage automation, product and platform AI Force to streamline the client’s business processes. HCLTech will enable the sustenance engineering and process operations services, along with its advanced full- client’s business transformation goals, including automation and AI-driven efficiencies, stack GenAI platform AI Force. superior customer experience, enterprise-wide innovation and cyber resilience. A Fortune 200 biopharma major selected HCLTech as its strategic partner for SAP managed A Fortune 50 telecom company selected HCLTech to deliver a comprehensive network services. HCLTech will use integrated delivery, automation and GenAI to improve operational services solution for the telco’s largest global enterprise customer. HCLTech will efficiency, lower costs and enhance service quality for the client. leverage a range of advanced technologies including GenAI to provide integrated technology services to the enterprise customer across 17 countries. A leading US-based financial services company selected HCLTech to accelerate cloud migration and strengthen its fraud and risk management. HCLTech will deliver the transformation through GenAI, automation and process improvements. A Europe-based global semiconductor and computing technology major selected HCLTech for System on Chip engineering to augment the client’s chip development program. HCLTech will provide all phases of chip design, verification, quality checks, power and performance metric analysis and physical design. A US-based diversified financial services provider selected HCLTech for the modernization of its hybrid cloud infrastructure and networks and boost cybersecurity resiliency. HCLTech will also provide digital workplace solutions to deliver an enhanced user experience. A North American power and energy distribution company selected HCLTech as its digital partner to transform its IT, finance, analytics, customer care, sales and renewals A Europe-based financial services major selected HCLTech as its global transformation functions by utilizing advanced technology and automation. partner for digital workplace services. HCLTech will help the client improve the end-user experience and offer AI-driven proactive and preventive support. A leading Europe-based access management solutions provider selected HCLTech to A Fortune 500 medical technology company selected HCLTech to manage the client's transform the client’s IT operations and set up a global capability center. HCLTech will digital engineering hub and accelerate the modernization of its legacy software platforms by leverage automation and GenAI to enhance operational efficiency, reduce costs and leveraging automation-led software product engineering. improve service quality across the client’s operations. Key Deal Wins A leading US-based logistics provider selected HCLTech to transform global IT operations and A Europe-based marketing communications group expanded its partnership with undertake AI-driven modernization to reduce technical debt. HCLSoftware to deploy Actian Ingres to offer ad management platforms for Linear, AVOD and Connected TV to the world’s largest broadcasters. A Europe-based global lighting solutions major selected HCLTech to manage its digital applications. HCLTech will deploy its AIOps platform to strengthen operational resilience and A Europe-based government institution expanded its partnership with HCLSoftware to improve user experiences through advanced automation. deploy Discover and Volt MX to modernize and enhance employee engagement. The client is also expanding the deployment of Digital Experience (DX), Domino and Sametime to manage all IT-critical processes. A leading US-based technology company selected HCLTech as its strategic partner for transforming the client’s global operations with automation-focused and outcome-driven solution to enhance customer experience and optimize operational efficiency and costs. A leading African retail chain expanded its partnership with HCLSoftware to secure and manage all end points with BigFix. The deployment will enable the client to maintain compliance across its extensive infrastructure through BigFix’s new self-healing and AI- driven automation features. An Africa-based technology services provider selected HCLSoftware to meet data sovereignty requirements and establish a secure collaboration framework for the central government of an African nation. A leading India-based energy company selected HCLSoftware’s BigFix for unified A leading US-based financial services company selected HCLSoftware’s BigFix to secure endpoint management. The deployment will enhance compliance, boost vulnerability critical IT infrastructure and devices. management and improve employee experience through intelligent automation. A Europe-based independent software vendor has expanded its partnership with HCLSoftware to deploy Actian as the embedded database for its applications focused on the A leading Indian financial services provider selected HCLSoftware to automate and real estate management and construction verticals. sequence batch jobs, enhancing system performance and stability. AI and GenAI Deal Wins A US-based automotive company selected HCLTech to develop an AI-based solution A leading US-based software company selected HCLTech AI Force to build a quick search for customer segmentation and dynamic price optimization. HCLTech will deploy its functionality to find duplicate bugs. The deployment improved tester efficiency by 15%, Enterprise AI Foundry to build and operationalize models that enhance after-market resulting in considerable time savings and improved productivity. sales operations. A US-based networking major selected HCLTech AI Force for test automation efficiency A Europe-based global consumer goods major selected HCLTech to build an AI-based for network devices. The deployment reduced the test automation workload by 40%. solution for comprehensive data warehouse transformation. A Europe-based global semiconductor company selected HCLTech to create ultra- A US-based media and entertainment major selected HCLTech to build a GenAI solution efficient algorithms for low-cost IoT microcontrollers by leveraging Automatic Neural for enhanced operational efficiency and regulatory compliance. The solution will use Network Compression (AutoNNC), HCLTech’s zero-code and fully automated AI platform. retrieval-augmented generation technology to improve licensee audit and SKU As part of HCLTech’s AI Engineering offering, this solution aims to make deep learning approval processes. accessible, faster, leaner and cost-effective for various devices. A Fortune 50 pharma major selected HCLTech to leverage GenAI for Smart Labelling, A Fortune 100 global technology company selected HCLTech for creating a GenAI-as-a- Exposure Analysis and QPPV Compliance to transform the client's data management and Service (GaaS) platform. The project involves delivering a robust and scalable solution compliance processes. that meets the evolving needs of the client’s strategic stakeholders. A Fortune 50 global financial services company selected HCLTech to build an AI-based A leading US-based fintech company selected HCLTech to set up a GenAI Center of solution to automate document processing system and create an efficient workflow Excellence (CoE) to develop tailored proofs of concept (PoCs) and frameworks for the system to reduce manual work. company’s different business units. Client Comments “As we continue our Reinvention, our aim is to drive enterprise-wide “At Toyo, we consistently strive to exceed our customers' efficiency by centralizing processes, platforms and capabilities. By expectations and elevate their experiences. HCLTech shares extending our agreement with HCLTech and leveraging its expertise, these goals with us, and our partnership is dedicated to Xerox will become more agile while continuously improving employee delivering added value, superior experiences and fostering and client experiences. This collaboration underscores our dedication lasting customer loyalty. Together, we are supercharging to enabling client and partner success across the hybrid workplace.” progress in driving innovation and growth for Toyo.” Louie Pastor, Executive VP and Chief Transformation and Luis Cupajita, Chief Information Officer, Administrative Officer, Xerox Toyo Tire Holdings of Americas Inc “As The Standard advances in its growth journey through digital “We've had the distinct pleasure of partnering with HCLTech for transformation and acquisitions, our strategic partnership with over 20 years. Driven by their innovative approach, remarkable HCLTech has been instrumental in helping us achieve our goals. Their problem-solving capabilities and staunch commitment to scale and thought leadership have been crucial to our success. This excellence, HCLTech has consistently been at the forefront of partnership has enabled us to deliver exceptional Day One experiences industry innovation, turning challenges into opportunities for us for our acquired employees, ensuring the most seamless onboarding and driving solutions that produce tangible results…Looking back process they have ever encountered. I am confident that HCLTech will on our 22-year journey with HCLTech, it's clear it has been a true continue to play a vital role in our ongoing transformation.” partnership that has supported the growth of the Pearson VUE business.” Greg Chandler, VP, Information Technology, The Standard Insurance Company Dr Gary A Gates, Managing Director, Pearson VUE People Metrics Details (Quarter ended) 30-Sep-23 31-Dec-23 31-Mar-24 30-Jun-24 30-Sep-24 Total People Count 221,139 224,756 227,481 219,401 218,621 Technical 206,745 210,417 213,059 205,197 204,600 Sales and Support 14,394 14,339 14,422 14,204 14,021 Net Addition (2,299) 3,617 2,725 (8,080) (780) Freshers Added 3,630 3,818 3,096 1,078 2,932 Attrition (LTM)* 14.2% 12.8% 12.4% 12.8% 12.9% Women Employees (%) 29.1% 29.1% 29.1% 28.7% 28.8% *Note: Attrition excludes involuntary attrition and Digital process operations. Ranked No. 1 among professional services companies in the 12,900+ employees leveraged HCLTech's Value Creation Portal in Q2 Forbes list of America’s Best Employers for New Graduates 2024 FY25, generating, reviewing and approving 5,500+ ideas and implementing 2,100+ ideas that delivered customer signed-off value Won 7 Gold and 4 Silver in the Brandon Hall Group- Human worth $287 million. Capital Management Practices Awards 2024 21 patents were filed and granted (8 filings, 13 grants) Won the ATD BEST 2024 Award from The Association of Talent Development, US. in Q2 FY25. Awards and Recognitions Ranked No.1 India-headquartered company in TIME magazine's list of World's Best Companies 2024 Shiv Nadar, Chairman Emeritus, HCLTech received the Santokbaa Humanitarian Award for his philanthropic initiatives Roshni Nadar Malhotra, Chairperson, HCLTech was conferred the Chevalier de la Légion d’Honneur, France’s highest civilian award Roshni Nadar Malhotra , Chairperson, HCLTech was honored with the Business Leader of the Year Award at the IAA Leadership Awards 2024 and the Most Promising Next-gen Leader Award at the FICCI Young Leaders Awards 2024 Ranked No. 7 in the Businessworld list of India’s Top 50 Most Sustainable Companies 2024 Included in Forbes magazine’s list of World's Best Management Consulting Firms 2024 Won the 2024 Oracle Partner Awards - North America Cloud/Technology Customer Success Category Recognized as Microsoft Partner of the Year for Dynamics 365 Service Recognized as HPE Hybrid Cloud Partner of the Year 2024 Won Intel Partner Award in the Market Acceleration – SI/GSI/MSP category Won Equinix Social Governance Award for Asia Pacific Analyst Recognitions Received 90+ leadership positions in analyst recognitions during Q2, FY25 Digital Business HCLTech positioned as a Leader in: HCLTech positioned as a Leader in 2024 Gartner® Magic Quadrant for Public Cloud IT Transformation Services (Mark Ray et al., 5 August 2024)* IDC MarketScape: Worldwide Data Modernization Services 2024 Vendor Assessment (doc # US51234424, Sep 2024) Everest Group’s Retail and CPG Data, Analytics, and AI Services PEAK Matrix® Assessment 2024 Avasant’s Digital Masters: Digital Technology Transformation 2024 RadarView Avasant’s Travel, Transportation, and Hospitality Digital Services 2024 RadarView Avasant’s Application Modernization Services 2024 RadarView Avasant’s Salesforce Services 2024 RadarView Avasant’s Benelux Digital Services 2024 RadarView Avasant’s United Kingdom (UK) Digital Services 2024 RadarView Avasant’s Data Management and Advanced Analytics Services 2024 RadarView Avasant’s Healthcare Provider Digital Services 2024 RadarView Avasant’s Utilities Digital Services 2024 RadarView Avasant’s Freight and Logistics Digital Services 2024 RadarView Avasant’s Property and Casualty Insurance Digital Services 2024 RadarView Avasant’s Telecom Digital Services 2024 RadarView HCLTech positioned as a Leader in ISG Provider Lens : Life Sciences Digital Services - Clinical Development, Commercial Operations – Digital Evolution, Manufacturing Supply Chain, Patient Engagement Pharmacovigilance and Regulatory Affairs – Digital Evolution - Global 2024 Retail & CPG Services - Platform Modernization Services, Managed Services, Digital Innovation Services, Business Transformation Services - U.S. 2024 Analyst Recognitions Digital Foundation HCLTech positioned as a Leader in: IDC MarketScape: European Managed Detection and Response Services 2024 Vendor Assessment (doc # EUR151172124, Sep 2024) IDC MarketScape: Worldwide Media Consultation, Integration, and Business Operations Cloud Service Providers 2024 Vendor Assessment (doc # US51752224, Jul 2024) Everest Group’s Digital Workplace Services PEAK Matrix® Assessment 2024 – North America, Europe Everest Group’s Cybersecurity Services PEAK Matrix® Assessment 2024 – North America Everest Group’s Open Banking IT Services PEAK Matrix® Assessment 2024 Avasant’s Advanced Network Services 2024 RadarView Avasant’s Data Center Managed Services 2024 RadarView Avasant’s Digital Workplace Services 2024 RadarView HCLTech positioned as a Leader in ISG Provider Lens : Network - Software Defined Solutions and Services - Secure Access Service Edge (SASE), Managed SD-WAN Services- U.S., U.K. 2024 Network - Software Defined Solutions and Services - SDN Transformation Services (Consulting and Implementation), Edge Technologies and Services (including Private 5G) - U.K., APAC 2024 Google Cloud Partner Ecosystem - Implementation and Integration Services, Data Analytics and Machine Learning, Managed Services, SAP Workloads - U.S., Europe, APAC 2024 Google Cloud Partner Ecosystem - Workspace Services – Europe, APAC 2024 Private/Hybrid Cloud – Data Center Solutions - Hybrid Cloud Management Platforms - Global 2024 Private Hybrid Cloud - Data Center Services - Managed Services — Large Accounts - U.S., Nordics, Germany 2024 Private Hybrid Cloud - Data Center Services - Managed Services - APAC 2024 Cybersecurity – Solutions and Services - Managed Security Services – SOC – Germany, Switzerland, Australia, U.S. Public Sector 2024 Cybersecurity – Solutions and Services - Managed Security Services – SOC (Large Accounts) - U.S., U.K., France 2024 Cybersecurity – Solutions and Services - Strategic Security Services (Large Accounts) - U.S., U.K. 2024 Cybersecurity – Solutions and Services - Technical Security Services (Large Accounts) - U.S. 2024 Cybersecurity – Solutions and Services - Strategic Security Services – Switzerland, U.S. Public Sector 2024 Cybersecurity – Solutions and Services - Technical Security Services – U.K., Switzerland, Australia, France 2024 Cybersecurity – Solutions and Services - Managed Security Services – SOC (Midmarket) - France 2024 eMobility Services and Solutions – Manufacturing, Mobility as a Service (MaaS) - Global 2024 Analyst Recognitions Digital Operations HCLSoftware HCLSoftware positioned as a Leader in 2024 Gartner® Magic Quadrant for Service HCLTech positioned as a Leader in: Orchestration and Automation Platforms (Hassan Ennaciri, et al., 11 September 2024)* Everest Group’s Lending Services Operations PEAK Matrix® Assessment 2024 Mentioned in the 2024 Shortlist for Matrix Commerce Order Management by ISG Provider Lens :Finance and Accounting Outsourcing (FAO) Services - Financial Constellation Research Planning and Analysis (FPA), Procure to Pay (P2P), Order to Cash (O2C), Record to Mentioned in the 2024 Shortlist for Campaign to Commerce: All-In-One-Commerce Report (R2R) - Global 2024 Clouds by Constellation Research Won 12/12 medals in Paradigm B2B Combine, 2024 Digital Commerce Solutions Engineering and R&D Services Enterprise Report Edition Won 12/12 medals in Paradigm B2B Combine, 2024 Digital Commerce Solutions HCLTech positioned as a Leader in: Midmarket Report Edition Mentioned in the 2024 Shortlist for Content Management System (CMS) – Avasant’s Digital Engineering Services 2024 RadarView Hybrid by Constellation Research Everest Group’s Operations-specific Software Product Engineering Services (SPES) Mentioned in the 2024 Shortlist for Customer Data Platforms (CDPs) PEAK Matrix® Assessment 2024 by Constellation Research Everest Group’s BFSI-specific Software Product Engineering Services (SPES) PEAK Mentioned in the 2024 Shortlist for B2B Marketing Automation for the Enterprise Matrix® Assessment 2024 by Constellation Research Everest Group’s Healthcare-specific Software Product Engineering Services (SPES) Mentioned in the 2024 Shortlist for B2C Marketing Automation for the Enterprise PEAK Matrix® Assessment 2024 by Constellation Research Everest Group’s Retail-specific Software Product Engineering Services (SPES) PEAK Matrix® Assessment 2024 Everest Group’s ISV and Internet-specific Software Product Engineering Services Client Recognition (SPES) PEAK Matrix® Assessment 2024 HCLTech positioned as a Customers’ Choice in the 2024 Gartner® Peer Insights Voice Everest Group’s Media and Entertainment-specific Software Product Engineering of the Customer for Custom Software Development Services, Worldwide (Peer Services (SPES) PEAK Matrix® Assessment 2024 Contributors, 26 July 2024)* Zinnov Zones Digital Engineering and ER&D Services 2024 Disclaimers: *GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally, and MAGIC QUADRANT and PEER INSIHGTS is a registered trademark of Gartner, Inc. and/or its affiliates and are used herein with permission. All rights reserved.Gartner Peer Insights content consists of the opinions of individual end users based on their own experiences, and should not be construed as statements of fact, nor do they represent the views of Gartner or its affiliates. Gartner does not endorse any vendor, product or service depicted in this content nor makes any warranties, expressed or implied, with respect to this content, about its accuracy or completeness, including any warranties of merchantability or fitness for a particular purpose. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. Supercharging progress for our communities and the planet India-focused initiatives through HCLFoundation Global initiatives HCLTech volunteers and partner organizations participating in coastal clean up activities in Tamil Nadu. 181 acres of farm established under village action project and 65.2 acres of degraded land reclaimed 17,000 people received certificates in Foundational Supported summer camp for cancer Literacy and Numeracy survivors in Romania 10,000+ OPD consultations and 5,700+ teleconsultations ‘Sabzi Mandi’ app launched for farmers and vendors 48,000 native saplings 1,600+ applications received for planted across India HCLTech Grant, up 40% from last year 18,000+ kgs of coastal and marine debris collected 2,200+ participants attended pan- India symposiums across 8 cities 7 STEM & Digital Literacy labs inaugurated Joined deliberations on “The impact of AI in Education and Employment” 10,400+ youth given vocational at the 10th anniversary of Global training 110,000+ kgs of waste managed 14,300+ hours of employee Alliance for YOUth, which aims to volunteering help young people around the globe 4,600+ women and entrepreneurs 6,500 citizens sensitized with the skills of the future given skills training on waste management Annexure Constant Currency Reporting (Quarter ended) (Amount in $M) HCLTech Revenue 30-Sep-23 31-Dec-23 31-Mar-24 30-Jun-24 30-Sep-24 Reported Revenue ($M) 3,224.7 3,415.0 3,429.9 3,363.8 3,445.2 Growth % (CC) QoQ 1.0% 6.0% 0.3% (1.6%) 1.6% YoY 3.4% 4.3% 6.0% 5.6% 6.2% HCLTech Services Revenue Reported Revenue ($M) 2,925.1 3,015.0 3,107.8 3,040.5 3,114.2 Growth % (CC) QoQ 1.6% 3.1% 3.0% (1.9%) 1.6% YoY 3.3% 4.2% 6.7% 5.8% 5.9% Average Rates for the Quarter USD - INR 82.72 83.28 83.10 83.40 83.79 GBP - USD 1.26 1.25 1.27 1.26 1.31 EUR - USD 1.08 1.08 1.08 1.08 1.10 USD - SEK 10.81 10.51 10.43 10.68 10.36 AUD - USD 0.65 0.66 0.66 0.66 0.67 Effective April 1, 2024, services related to certain software products, previously under HCL Software, are now managed by IT and Business Services and Engineering and R&D Services segments. Revenues and results have been reported under respective segments, with prior period figures restated. The impact of this change is immaterial for the segments. Financials in ₹ for the Quarter ended 30-Sep-24 (Ind AS) Consolidated Income Statement (Amount in ₹ Crores) Quarter Ended % of Revenue Income Statement 30-Sep-23 30-Jun-24 30-Sep-24 30-Sep-23 30-Jun-24 30-Sep-24 Revenues 26,672 28,057 28,862 100.0% 100.0% 100.0% Direct Costs 17,013 18,364 18,789 63.8% 65.5% 65.1% Gross Profits 9,659 9,692 10,074 36.2% 34.5% 34.9% Research & Development 404 407 395 1.5% 1.5% 1.4% SG & A 3,311 3,492 3,309 12.4% 12.4% 11.5% EBITDA 5,944 5,793 6,369 22.3% 20.6% 22.1% Depreciation & Amortization 1,010 998 1,007 3.8% 3.6% 3.5% EBIT 4,934 4,795 5,362 18.5% 17.1% 18.6% Foreign Exchange Gains/(Loss) (15) 81 3 (0.1%) 0.3% 0.0% Other Income, net 209 831 322 0.8% 3.0% 1.1% Provision for Tax 1,295 1,448 1,450 4.9% 5.2% 5.0% Non-controlling interest 1 2 2 0.0% 0.0% 0.0% Net Income 3,832 4,257 4,235 14.4% 15.2% 14.7% EPS (LTM in ₹) Basic 57.05 60.63 62.10 Diluted 56.95 60.52 62.02 Cost Breakup in ₹ for Quarter Ended 30-Sep-2024 (Amount in ₹ Crores) Quarter Ended % of Revenue Particulars 30-Sep-23 30-Jun-24 30-Sep-24 30-Sep-23 30-Jun-24 30-Sep-24 Employee benefits expense 15,253 16,410 16,523 57.2% 58.5% 57.2% Outsourcing costs 3,508 3,541 3,748 13.1% 12.6% 13.0% (Subcontractors + Outsourced Work) Cost of hardware and software sold 402 429 466 1.5% 1.5% 1.6% Travel and conveyance 272 378 356 1.0% 1.3% 1.2% Software license fee 249 306 310 0.9% 1.1% 1.1% Facility Cost* 286 296 296 1.1% 1.1% 1.0% Recruitment, training and development 57 90 86 0.2% 0.3% 0.3% Legal and professional charges 141 168 164 0.5% 0.6% 0.6% Communication costs 134 133 135 0.5% 0.5% 0.5% CSR Expense 48 60 72 0.2% 0.2% 0.2% Doubtful debts 40 30 6 0.2% 0.1% 0.0% Other expenses 338 423 331 1.3% 1.5% 1.1% Depreciation & Amortization 1,010 998 1,007 3.8% 3.6% 3.5% Total Costs 21,738 23,262 23,500 81.5% 82.9% 81.4% EBIT 4,934 4,795 5,362 18.5% 17.1% 18.6% Note: *Facility cost includes Repairs and Maintenance, Power and Fuel, and Rent Financials in $ for the Quarter ended 30-Sep-24 (IFRS) Consolidated Income Statement (Amount in $M) Quarter Ended % of Revenue Income Statement 30-Sep-23 30-Jun-24 30-Sep-24 30-Sep-23 30-Jun-24 30-Sep-24 Revenues 3,224.7 3,363.8 3,445.2 100.0% 100.0% 100.0% Direct Costs 2,056.8 2,201.7 2,242.7 63.8% 65.5% 65.1% Gross Profits 1,167.9 1,162.1 1,202.6 36.2% 34.5% 34.9% Research & Development 48.9 48.8 47.2 1.5% 1.5% 1.4% SG & A 400.2 418.7 394.9 12.4% 12.4% 11.5% EBITDA 718.9 694.6 760.5 22.3% 20.6% 22.1% Depreciation & Amortization 122.2 119.6 120.3 3.8% 3.6% 3.5% EBIT 596.7 575.0 640.2 18.5% 17.1% 18.6% Foreign Exchange Gains/(Loss) (1.8) (4.9) 0.3 (0.1%) (0.1%) 0.0% Other Income, net 25.2 99.6 38.5 0.8% 3.0% 1.1% Provision for Tax 156.6 173.7 173.0 4.9% 5.2% 5.0% Non-controlling interest - 0.2 0.3 0.0% 0.0% 0.0% Net Income 463.5 495.8 505.7 14.4% 14.7% 14.7% Cost Breakup in $ for Quarter Ended 30-Sep-2024 (Amount in $M) Quarter Ended % of Revenue Particulars 30-Sep-23 30-Jun-24 30-Sep-24 30-Sep-23 30-Jun-24 30-Sep-24 Employee benefits expense 1,844.1 1,967.5 1,972.0 57.2% 58.5% 57.2% Outsourcing costs 424.0 424.6 447.3 13.1% 12.6% 13.0% (Subcontractors + Outsourced Work) Cost of hardware and software sold 48.6 51.5 55.6 1.5% 1.5% 1.6% Travel and conveyance 32.9 45.3 42.5 1.0% 1.3% 1.2% Software license fee 30.0 36.6 37.1 0.9% 1.1% 1.1% Facility Cost* 34.5 35.5 35.3 1.1% 1.1% 1.0% Recruitment, training and development 6.9 10.8 10.2 0.2% 0.3% 0.3% Legal and professional charges 17.0 20.1 19.5 0.5% 0.6% 0.6% Communication costs 16.2 16.0 16.1 0.5% 0.5% 0.5% CSR Expense 5.7 7.2 8.6 0.2% 0.2% 0.2% Doubtful debts 4.9 3.6 0.7 0.2% 0.1% 0.0% Other expenses 41.0 50.6 39.7 1.3% 1.5% 1.1% Depreciation & Amortization 122.2 119.6 120.3 3.8% 3.6% 3.5% Total Costs 2,628.1 2,788.9 2,805.0 81.5% 82.9% 81.4% EBIT 596.7 575.0 640.2 18.5% 17.1% 18.6% Note: *Facility cost includes Repairs and Maintenance, Power and Fuel, and Rent Consolidated Balance Sheet (₹ and $) In ₹ Crores In $M Particulars As on 31-Mar-24 As on 30-Sep-24 As on 31-Mar-24 As on 30-Sep-24 Assets Cash and Cash Equivalents 9,456 9,404 1,134 1,122 Accounts Receivables, net 19,483 18,273 2,337 2,181 Unbilled Receivables 6,038 6,272 724 748 Treasury Investments 18,532 18,779 2,222 2,241 Other Current Assets 5,822 6,414 698 764 Total Current Assets 59,331 59,142 7,115 7,056 Property and Equipment, net 4,999 4,768 600 569 Right-of-use assets 2,910 2,763 349 330 Intangible Assets, net 27,262 27,121 3,271 3,236 Treasury Investments 287 635 34 76 Deferred Tax Assets 1,031 938 124 112 Other Investments 94 99 11 12 Other Assets 3,863 4,297 463 512 Total Assets 99,777 99,763 11,967 11,903 Liabilities & Stockholders Equity Other Current Liabilities 21,532 20,407 2,583 2,435 Borrowings 2,327 2,297 280 273 Lease Liabilities 3,429 3,494 411 417 Other Non-Current Liabilities 4,218 4,678 507 557 Total Liabilities 31,506 30,876 3,781 3,682 Non-Controlling Interests 8 12 1 1 Total Stockholders Equity 68,263 68,875 8,185 8,220 Total Equity 68,271 68,887 8,186 8,221 Total Liabilities and Equity 99,777 99,763 11,967 11,903 Consolidated Cash Flow Summary & Cash Position In ₹ Crores In $M Particulars For Year Ended For Quarter Ended For Year Ended For Quarter Ended March 2024 September 2024 March 2024 September 2024 Profit Before Tax 20,967 5,687 2,531 679 Adjustments for: Depreciation, Amortization and Impairment 4,173 1,007 503 120 Others (785) (307) (94) (35) Changes in Assets and Liabilities, net: Accounts Receivable and Unbilled Receivable 248 384 30 46 Other Assets and Liabilities 2,057 (181) 250 (19) Income Taxes paid (Net of refunds) (4,212) (1,375) (509) (165) Net Operating Cash Flow 22,448 5,215 2,711 626 Purchase of PP&E and Intangibles (1,048) (419) (127) (50) Free Cash Flow 21,400 4,796 2,584 576 Payments for Acquisitions (2,048) (211) (248) (25) Dividend paid (14,073) (3,247) (1,699) (387) Gross Cash & Net Cash Cash & Cash Equivalents 9,456 9,404 1,134 1,122 Fixed Deposits including Deposits under lien 11,774 11,871 1,411 1,417 Investment Securities 7,043 7,543 845 900 Gross Cash 28,273 28,818 3,390 3,439 Less: Borrowings 2,327 2,297 280 273 Net Cash 25,946 26,521 3,110 3,166 About HCLTech HCLTech is a global technology company, home to more than 218,000 people across 59 countries, delivering industry-leading capabilities centered around digital, engineering, cloud and AI, powered by a broad portfolio of technology services and products. We work with clients across all major verticals, providing industry solutions for Financial Services, Manufacturing, Life Sciences and Healthcare, Technology and Services, Telecom and Media, Retail and CPG, and Public Services. Consolidated revenues as of 12 months ending September 2024 totaled $13.7B. To learn how we can supercharge progress for you, visit hcltech.com. Contact Details Investor Relations Corporate Communications Nitin Mohta Ashutosh Sharma [email protected] [email protected] +91-120-6126000 +91-120-6126000