Q1FY25 (Apr-Jun 24) Revenue and Growth Rates of Software Product Engineering Service Providers
Q1FY25 – A Quarter of Recovery for SPE Service Providers
The Q1FY25 quarter (Apr-Jun 2024) marked a period of recovery for Software Product Engineering (SPE) Service Providers. With the aid of strategic acquisitions, several companies reported strong performances, even as market challenges persisted for others.
Key Highlights of Q1FY25 Performance
The weighted average growth in this quarter stood at 2.2% QoQ and 3.5% YoY, indicating a moderate recovery trajectory for the industry.
Top Performers in SPE Service Providers
- Persistent: With a revenue of $328M, Persistent achieved a 5.6% QoQ growth and an impressive 16.0% YoY growth, driven by consistent client demand and innovation in offerings.
- Happiest Mind: Demonstrating a stellar QoQ growth of 10.9%, Happiest Mind achieved a revenue of $56M, reflecting its ability to adapt and expand its digital engineering portfolio.
- Endava: Marked a strong performance with an 11.5% QoQ growth, showcasing the benefits of its strategic acquisitions.
Mixed Results from Other Providers
- Globant: Reported an 18.1% YoY growth, reflecting a robust global presence and diversified offerings.
- CI&T: Despite an 8.1% QoQ growth, it showed a slight YoY decline of -1.1%, suggesting transitional challenges.
- Thoughtworks: With a YoY decline of -12.4%, it struggled to maintain its market position, even as QoQ growth remained modest at 1.2%
- EPAM: Faced setbacks with a -1.6% QoQ decline and a -2.0% YoY drop, underscoring the challenges of sustaining growth in a competitive market.
Key Insights from the Weighted Average Growth Rates
- Role of Acquisitions: Companies like Endava benefited significantly from acquisitions, boosting their QoQ growth figures.
- Market Leaders and Laggers: While Persistent and Globant led the way in revenue and YoY growth, EPAM and Thoughtworks faced challenges in adapting to market demands.
The Q1FY25 performance of SPE service providers highlights a tale of recovery, with acquisitions playing a crucial role in driving growth for several companies. While top players continue to expand, the mixed results suggest that adaptability and strategic focus will remain key in the coming quarters.