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FPT Corporation (FPT VN) – H1 2025 – Resilient Growth in Global IT Despite Headwinds
Summary of H1 2025 results and outlook of FPT Corporation (FPT VN)
- Net revenue achieved 11.4% y/y growth in H1/2025. Global IT outsourcing (51.0% of revenue) grew 14.4% y/y, reflecting a more measured pace of IT spending and AI adoption amid global macro uncertainties. The pace of growth eased in Q2, as rapidly evolving U.S. tariff policies and geopolitical tensions prompted international clients to take a more cautious stance on technology budgets. By market, Japan remained the key driver growing 28.1% y/y, followed by the EU at 25.2% y/y, while the U.S. and APAC were the main laggards, posting growth of 8.2% y/y and –3.4% y/y, respectively. For the domestic market telecom services (28.6% of revenue) maintain robust upward growth trajectory, rising 13.5% y/y, bolstered by a 15.8% y/y surge in broadband services. Meanwhile, the Education and Software Development segments were relatively stable, reflecting heightened competition in the domestic IT space, while in education, the University and Vocational sub-segments experienced pressure from public universities.
- Net profit rose 20.0% y/y to VND 5.3tn, supported by favorable exchange rate movements and higher investment income. Gross margin eased to 37.7%, reflecting price pressure in global IT as clients sought to share efficiency gains from AI adoption. SG&A costs increased 14.1% y/y, raising SG&A as a percentage of revenue from 22.1% to 22.7% and limiting operating profit growth to 5.2% y/y. Meanwhile, net financial income surged 173.3% y/y, primarily driven by the appreciation of the EUR, USD, and JPY—currencies in which FPT generates revenue —significantly boosting net profit.
- Signs of improving sentiment are emerging as global uncertainty subsides. FPT has begun to observe early recovery signals in H2/2025, with backlog reaccelerating in July—reversing the prior downtrend with a solid 27.0% y/y increase. In addition, management highlights that client engagements are resuming with more constructive discussions, indicating that technology investment priorities remain evident.
- We expect continued short-term cooldown, however, growth is poised to resume in medium term. For H2/2025, Global IT growth is expected to soften, reflecting H1 slow backlog growth, while other segments maintain similar pace as in H1.
- For the medium term, however, we believe FPT’s growth momentum remains intact, supported by Vietnam’s deep pool of young, tech-savvy IT workforce and the company’s steady move up the value chain. Recent investments in local firms across key overseas markets have strengthened FPT’s global footprint, enhancing its capacity to deliver end-to-end services and secure larger contracts. These developments underpin our expectations of a return to high growth over the 2026–2029 period.
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