**Title:** Hexaware Faces Revenue Impact from Fannie Mae and Freddie Mac Changes
**Meta Description:** Hexaware’s revenue may decline due to reduced business from Fannie Mae and Freddie Mac amid management changes and vendor consolidation.
**URL Slug:** hexaware-revenue-impact-fannie-mae-freddie-mac
**Headline:** Hexaware’s Revenue at Risk Due to Client Slowdown and Management Changes
Hexaware Technologies, the tenth-largest IT services firm in the country, reported a revenue of $1.43 billion for the year ending 2024. Among its top five clients are the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), which together contribute approximately $150 million annually to Hexaware’s revenue. During a post-earnings analyst call on April 29, CEO Srikrishna Ramakarthikeyan indicated that a slowdown in business from one of these clients could result in a 1% revenue impact, translating to a potential decrease of $14.3 million this year.
Sources familiar with the situation have revealed that Hexaware is experiencing a slowdown in business from Fannie Mae, one of its three largest clients. Although CEO Srikrishna did not disclose the names of the clients, he mentioned two joint stock companies (JSCs) facing challenges. Reports suggest that Fannie Mae is reducing its business volume, while project execution delays have also been noted with Freddie Mac.
The management at Hexaware explained that this ramp-down is part of an effort by Fannie Mae to cut costs and streamline its operations by reducing the number of IT vendors it collaborates with. Currently, Fannie Mae works with around 2,500 contractors, but aims to narrow this down to between two and ten vendors. Srikrishna noted that while Hexaware represents less than 20% of this contractor base, it remains the largest vendor.
Additionally, there has been a delay in project execution with another client acquired earlier this year as part of a vendor consolidation initiative. However, Srikrishna confirmed that work on this project has now commenced following the delay.
For the three months ending March 2025, Hexaware reported a revenue of $371.5 million, reflecting a slight sequential decline of 0.2%. The root of the current ramp-down can be traced back to a management overhaul at Fannie Mae, following the appointment of William Pulte as chairman of the Federal Housing Finance Agency in January. This leadership change aims to privatize both Fannie Mae and Freddie Mac, which have been under government control since the 2008 financial crisis, and to facilitate increased borrowing and home construction in the U.S. Pulte’s initial actions included restructuring the leadership at both companies, resulting in the dismissal of Diana Reid, CEO of Freddie Mac, and the layoff of over 700 employees. This restructuring has led to a reduction in the number of IT vendors and a renegotiation of existing contracts.
As the situation unfolds, analysts are expressing concerns regarding the implications of these changes on Hexaware’s future revenue streams.
**FAQ Section:**
**Q: How will the changes at Fannie Mae and Freddie Mac affect Hexaware’s revenue?**
A: Hexaware anticipates a potential revenue decline of approximately $14.3 million due to reduced business from Fannie Mae and project delays with Freddie Mac, following management changes at both companies.