‘Fastest five’ bets on BFSI and HLS are paying off in Q4 2024

In Q4 2024, HFS Research identified the ‘fastest five’ service providers—Coforge, Firstsource, Persistent, EXL, and Sonata Software—achieving the highest year-over-year (YoY) revenue growth⁽¹⁾ of the providers we track. Each service provider surpassed the market average growth rate of 7.3% YoY ⁽²⁾ to report double-digit growth.

These emerging leaders represent a differentiated value proposition for enterprises seeking alternatives to traditional TWILTCH firms, combining operational agility with scalable delivery capabilities. Notably, strategic inorganic growth initiatives have also played a significant role in accelerating their market and positioning and giving them a deeper specialty in certain sectors.

Exhibit 1: Year-over-year ‘fastest five’ revenue growth in Q4 2024

Note: Revenue and growth data represents HFS estimates based on analysis of publicly available information. Year-on-year (YoY) growth compares a quarter with the corresponding quarter of the previous year.
Source: HFS Research and earnings reports of leading service providers, 2024

BFSI and healthcare sectors are driving Q4 2024 growth for ‘fastest five,’ but enterprise buyers should be cautious due to underlying economic volatility

The IT services industry is facing an industry-wide slowdown—check out our coverage of the TWILTCH providers for further details —but in Q4 2024, the BFSI and healthcare verticals held strong in the US market. The ‘fastest five’ service providers struck several deals with enterprises in these two verticals, leveraging the uptick in discretionary spending.

Analyzing the press releases and earnings calls, coupled with our candid conversations with leading executives, reveals that BFSI deals were focused on digital transformation and core modernization initiatives. These include collections, CX, data engineering platforms, risk analytics, compliance automation, and fraud detection solutions. In contrast, healthcare and life sciences deals had traction in payer and provider platform modernization, payer operations, enrolment, claims optimization, AI/ML analytics, clinical analytics, care management, and transformation stacks for GenAI implementation.

HFS has extensively discussed how global uncertainty and macroeconomic headwinds are causing significant caution from enterprises which could be expected to impact the ‘fastest five’ further. However, while they reported particular impact in retail, hi-tech, and manufacturing, acquisitions and capability investments see the ‘fastest five’ diversify across industries, expanding their emerging tech capabilities and growing their IP, solutions, and platforms roster. This, combined with their agility, is why they are winning in today’s market.

Delving into the earnings of each ‘fastest five’ company

• Coforge reported a 40.8% YoY growth in Q4 2024—the highest growth rate for the second consecutive quarter. This growth is a combination of organic and inorganic factors, driven primarily by the Americas (69.2% YoY), EMEA (20.4% YoY), and all its industry verticals, which were up from 20 to 40% YoY. A significant uptick was driven by the Cigniti merger, which was completed in December 2024. It contributed to 15% of Coforge’s overall revenue and delivered essential diversification, adding three new verticals: retail, hi-tech, and healthcare. Observing how this impacts Coforge’s financial performance moving forward will be interesting.
• Firstsource’s reported a 29.7% YoY revenue growth in Q4 2024. Large deals led to the growth of financial services, healthcare, technology, and utilities industry verticals, primarily in North America. The acquisition of Ascensos in September 2024 and Quintessence Business Solutions and Services (QBSS) in May 2024 contributed to further inorganic growth and the expansion of its retail and eCommerce business and healthcare verticals.
• Persistent reported a 19.9% YoY revenue growth. This was fueled by large deals won in healthcare and life sciences (HLS) and BFSI, resulting in a healthy 21.1% YoY growth in North America. We noted a consistent average increase of 57% YoY growth in HLS over the past four quarters and a 19% YoY growth in BFSI verticals for the previous two quarters​​. Acquisitions of Arrka, Starfish, and SoHo also contributed to Q4 2024’s revenue.
• EXL reported a 16.3% YoY revenue growth in Q4 2024. This growth is balanced across its key verticals: insurance, healthcare, and emerging business. Its analytics business also performed well thanks to expanding existing client relationships and several new deals. The US contributes to approximately 85% of EXL’s total revenue, and there were notable deal wins in HLS and BFSI in the region. Additionally, EXL’s acquisition of ITI Data contributed roughly 1-2% of overall revenue growth.
• Sonata Software reported a 14% YoY revenue growth in Q4 2024. This growth was driven by new large deal wins, notably in BFSI and HLS, and robust domestic performance led by new corporate clients and defense sector wins. However, Sonata Software’s leadership reports that a large hi-tech client ramped down its spend, which significantly impacted its top and bottom lines.

The Bottom Line: Enterprises must resist the appeal of short-term upticks and look for long-term vision and value from service provider partnerships—and sometimes, more nimble providers are the better option.

In these tumultuous times, procurement leaders, CIOs, and transformation leaders must double down on due diligence. They need to scrutinize the depth and breadth of the service providers’ capabilities, looking beyond the marketing hype, and ensure they find a partner that can meet their needs. Sometimes, the answer is mid-tier⁽³⁾, fast-growing firms that can offer more agility and attentiveness, and that’s where the ‘fastest five’ should appeal to enterprises. However, Sonata Software openly reporting an impact from one client’s spend reduction exhibits how these firms might be exposed to macroeconomic shocks, and that’s certainly something to consider.

Notes: (1) Growth data represents HFS estimates based on analysis of publicly available information. The year-on-year (YoY) growth compares a quarter with the corresponding quarter of the previous year. (2) HFS considered Accenture, Ascendion, Birlasoft, Capgemini, Coforge, Cognizant, Conduent, DXC, EPAM, EXL, Firstsource, Genpact, Globant, HCLTech, IBM, Infosys, Innova Solutions, Kyndryl, LTIMindtree, Mphasis, Persistent, Sonata Software, TCS, Tech Mahindra, Wipro, WNS, and Zensar for this analysis. (3) HFS definition of mid-tier companies: Revenue between USD 500 million to USD 2 billion.