- Enterprise Services
- 3 min read
Capgemini Q1 FY24 revenues drops 3.5%, offshore headcount dips
The revenues in Q1 of FY23 stood at €5.73 billion ($5.92 billion). On a constant currency basis, revenue declined 3.3%. Capgemini follows January to December as its financial year.French IT major Capgemini reported a consolidated Q1 2024 ending March revenues declined 3.5% year-on-year (YoY) to €5.53 billion (around $5.9 billion) with the continued overhang of subdued technology demand in the North American market and financial services segment.
“The Financial Services (-7.3% growth) and TMT (telecoms, media and technology) (-11.1%) sectors contributed the most to this decline, partly offset by growth in the manufacturing sector, the company said.
The revenues in Q1 of FY23 stood at €5.73 billion ($5.92 billion). On a constant currency basis, revenue declined 3.3%. Capgemini follows January to December as its financial year.
This follows the muted Q4FY24 numbers reported by top Indian IT majors with almost subdued revenue guidance for FY25.
This month, India’s second-largest IT services major Infosys slashed its revenue guidance for fiscal 2025 to 1-3% while smaller outperforming rival HCLTech guided for 3-5% growth. Wipro, fourth largest firm in the sector, estimates -1.5-0.5% for Q1FY25 signalling signs of continued demand pressure and weak discretionary spending by top clients. Indian IT bellwether Tata Consultancy Services (TCS) does not give any outlook.
Indian software exporters have also witnessed a decadal drop in the headcount with top tier’s six IT companies shedding over 72,000 employees.
Capgemini Group’s total headcount declined to 337,200 as on March 31, 2024, down 6% from a year ago employee count at 357,000. The offshore workforce represents 57% of the total headcount, i.e. 192,000 employees, down from 58% at 207,300 employees in March last year. The company’s largest offshore talent base is in India.
“As anticipated, the market continued to slow down in Q1, and we confirm the growth trough is now behind us. We expect the market to gradually pick up toward an attractive exit growth rate in Q4, setting up for a more tangible acceleration in 2025,” said Aiman Ezzat, chief executive officer of the Capgemini Group.
He added, “The pipeline continues to grow and the demand for large-scale digital transformation projects remains strong. Client focus remains on operational and cost efficiency programs, however we also see good traction for our high-added value services in Intelligent industry as well as for our sustainability offerings.”
Geographically, Capgemini witnessed decline across regions with Rest of Europe region (32% of Group revenues) almost stable at a 0.5% decrease in revenues with “good momentum in the energy & utilities and public sectors and a visible contraction of the TMT sector”.
North America region (28% of group’s revenues in Q1 2024) declined by 7.1% similar to the preceding quarter in Q4FY23. Business in the UK and Ireland region (12% market share) also degrew by 3.2%, mostly driven by the financial services and TMT sectors. The two sectors also dragged Asia-Pacific and Latin America region (8% of Group revenues) growth with a decline of 1.7%.
Manufacturing vertical contributed the highest revenue share at 27% followed by financial services at 21%, public sector at 15%, consumer goods & retail at 13%, TMT at 11%, energy & utilities at 8% and services at 5%.
Deal bookings totalled €5,655 million (around $6.05 billion) in Q1 2024, down -3.5% year-on-year at constant exchange rates. The book-to-bill ratio of 1.02 is above the Q1 historical average, the firm said.
COMMENTS
All Comments
By commenting, you agree to the Prohibited Content Policy
PostBy commenting, you agree to the Prohibited Content Policy
PostFind this Comment Offensive?
Choose your reason below and click on the submit button. This will alert our moderators to take actions