Hexaware revenue rises 1.7% sequentially in constant currency amid deal delays
Key Facts
Hexaware reported revenue of $411.9 million for the third quarter ended September 30, 2026, up 1.6% from the previous quarter and 4.3% year over year. Constant-currency growth was 1.7% sequentially and 4.5% annually, highlighting a slower quarterly pace than the annual rate. Management said revenue fell short of its expectations, attributing this to weakness at one global capability center client and slower progress on some large deals. A comparison of the quarter’s growth with analyst consensus could not be established, so the 3% figure in the previous draft does not represent a documented market estimate. (f1, f2, f8)
Results varied across sectors, with banking revenue up 6.6% from the previous quarter and 13.5% from a year earlier. Technology, products and platforms recorded sequential growth of 7.2%, the highest among the listed sectors, with annual growth of 9.7%. By contrast, travel and transportation revenue fell 3.5% sequentially and 8.5% year over year. The CFO said six of the seven sectors posted annual growth, pointing to growth across most businesses despite clear differences in sector performance. The company also announced it had been selected by a Middle East-based bank to deliver a Sitecore migration, alongside a partnership with a major U.S. infrastructure provider to modernize legacy systems and build a factory for AI use cases.
At the earnings level, profit after tax was $44.9 million, up 28.8% from the previous quarter and 7.2% year over year, while basic earnings per share were 7.06 rupees. Revenue in Indian rupees was 39,331 million rupees, up 2.3% sequentially and 12.9% annually. On the earnings call, management said the impact of the client weakness and deal delays could continue into the fourth quarter. The CFO added that restructuring the company’s Netherlands operations incurred a one-time cost of about $6 million, but said it was expected to lift annual operating margins by about 40 basis points going forward. (f3, f5, T04, T06)
The company narrowed its announced 2026 EBIT margin guidance to a range of 13% to 13.5%, according to coverage of the earnings call. It had earlier cut its full-year revenue growth forecast to a range of 6% to 7%, from previous guidance for growth of at least 7.6%. New CEO Vivek Jetley said the company would not provide fourth-quarter revenue guidance until it had reviewed its commitments, sales pipeline quality and forecast accuracy. The CFO added that the fourth quarter could follow the seasonal pattern the company had seen in previous years, without specifying a revenue figure. Jetley said some delayed deals could close in the fourth quarter, while others could extend into the first quarter of 2027, and that he could not determine the timing precisely. (f9, f10, T01, T02, T03)
Hexaware had 35,887 employees at the end of the quarter, after a net addition of 1,381 during the period, including 386 in IT; the voluntary attrition rate in that segment was 11.1%. Cash and cash equivalents stood at $199 million on September 30, while operating cash flow as a share of reported profit was 109.6% on a trailing 12-month basis. Days sales outstanding for billed and unbilled sales were 77 days, including 41 days for billed sales. Jetley’s appointment to succeed Srikrishna Ramakarthikeyan was announced in September, with him set to take up the role from October 28, 2026. Jetley said AI offers companies new possibilities and that Hexaware sees an opportunity to build on its relationships and capabilities to drive the next phase of growth.