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Infosys: Resilient performance in a seasonally weak quarter; Large deal momentum continues with 71% net new deals

11 gennaio 2024 | 14.10

LETTURA: 11 minuti

Infosys Topaz driving strong differentiation and market leadership in generative AI

BENGALURU, India, Jan. 11, 2024 /PRNewswire/ -- Infosys (NSE: INFY) (BSE: INFY) (NYSE: INFY), a global leader in next-generation digital services and consulting, delivered $4,663 million in Q3 revenues with year-on-year and sequential decline of 1.0% in constant currency. Large deal TCV for the quarter was $3.2 billion, with 71% being net new. Operating margin for the quarter was 20.5%, a sequential decline of 70 bps. Attrition declined further to 12.9%. FY24 revenue guidance revised to 1.5%-2.0% and operating margin guidance at 20%-22%.

"Our performance in Q3 was resilient. Large deal wins were strong at $3.2 billion, with 71% of this as net new, reflecting the relevance and strength of our portfolio of offerings ranging from generative AI, digital and cloud to cost, efficiency and automation" said Salil Parekh, CEO and MD. "Our clients are leveraging our Topaz generative AI capabilities and our Cobalt cloud capabilities to create long-term value for their businesses", he added.

-1.0%YoY & QoQCC growth

20.5%Operating margin

3.0%YTD Increase in EPS(₹ terms)

$3.2 bnLarge deal TCV(71% net new)

Guidance for FY24:

1. Key highlights:

For the quarter ended December 31, 2023

Revenues in CC terms declined by 1.0% YoY and QoQReported revenues at $4,663 million, growth of 0.1% YoY Operating margin at 20.5%, decline of 1.0% YoY and 0.7% QoQ Basic EPS at $0.18, decline of 7.1% YoY FCF at $665 million, growth of 15.5% YoY;FCF conversion at 90.6% of net profit

For nine months ended December 31, 2023

Revenues in CC terms grew by 1.8% YoYReported revenues at $13,997 million, growth of 2.5% YoYOperating margin at 20.8%, decline of 0.2% YoYBasic EPS at $0.18, growth of 1.7% YoYBasic EPS at $0.53, flat YoY FCF at $2,034 million, growth of 11.7% YoY; FCF conversion at 92.1% of net profit

"Q3 performance is a demonstration of our strong execution capabilities reflected in improved operational efficiencies achieved under 'Project Maximus', despite a challenging environment," said Nilanjan Roy, Chief Financial Officer. "Cash generation remained robust with FCF to net profit conversion for Q3 at 90.6%," he added.

2. Client wins & testimonials

3. Recognitions & Awards

AI and Cloud Services

Key Digital Services

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Industry & Solutions

About Infosys

Infosys is a global leader in next-generation digital services and consulting. Over 300,000 of our people work to amplify human potential and create the next opportunity for people, businesses and communities. We enable clients in more than 56 countries to navigate their digital transformation. With over four decades of experience in managing the systems and workings of global enterprises, we expertly steer clients, as they navigate their digital transformation powered by the cloud. We enable them with an AI-powered core, empower the business with agile digital at scale and drive continuous improvement with always-on learning through the transfer of digital skills, expertise, and ideas from our innovation ecosystem. We are deeply committed to being a well-governed, environmentally sustainable organization where diverse talent thrives in an inclusive workplace.

Visit www.infosys.com to see how Infosys (NSE, BSE, NYSE: INFY) can help your enterprise navigate your next.

Safe Harbor

Certain statements in this release concerning our future growth prospects, or our future financial or operating performance, are forward-looking statements intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results or outcomes to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the execution of our business strategy, our ability to attract and retain personnel, our transition to hybrid work model, economic uncertainties, technological innovations such as Generative AI, the complex and evolving regulatory landscape including immigration regulation changes, our ESG vision, our capital allocation policy and expectations concerning our market position, future operations, margins, profitability, liquidity, capital resources, our corporate actions including acquisitions, the actual or anticipated findings of the ongoing assessment of the extent and nature of exfiltrated data in relation to the McCamish cybersecurity incident and customer reaction to such findings, and the amount of any additional costs, including indemnities or damages / claims, resulting from the McCamish cybersecurity incident. Important factors that may cause actual results or outcomes to differ from those implied by the forward-looking statements are discussed in more detail in our US Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2023. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.

Infosys Limited and subsidiaries
Extracted from the Condensed Consolidated Balance Sheet under IFRS as at: (Dollars in millions)

	December 31, 2023	March 31, 2023
ASSETS
Current assets
Cash and cash equivalents	1,640	1,481
Current investments	958	841
Trade receivables	3,680	3,094
Unbilled revenue	1,589	1,861
Other Current assets	1,425	1,349
Total current assets	9,292	8,626
Non-current assets
Property, plant and equipment and Right-of-use assets	2,375	2,516
Goodwill and other Intangible assets	1,075	1,095
Non-current investments	1,354	1,530
Unbilled revenue	202	176
Other non-current assets	1,308	1,369
Total non-current assets	6,314	6,686
Total assets	15,606	15,312
LIABILITIES AND EQUITY
Current liabilities
Trade payables	460	470
Unearned revenue	922	872
Employee benefit obligations	326	292
Other current liabilities and provisions	2,970	3,135
Total current liabilities	4,678	4,769
Non-current liabilities
Lease liabilities	802	859
Other non-current liabilities	458	460
Total non-current liabilities	1,260	1,319
Total liabilities	5,938	6,088
Total equity attributable to equity holders of the company	9,617	9,172
Non-controlling interests	51	52
Total equity	9,668	9,224
Total liabilities and equity	15,606	15,312

Extracted from the Condensed Consolidated statement of Comprehensive Income under IFRS for:
(Dollars in millions except per equity share data)
	3 months ended December 31, 2023	3 months ended December 31,2022	9 months ended December 31, 2023	9 months ended December 31, 2022
Revenues	4,663	4,659	13,997	13,657
Cost of sales	3,274	3,230	9,755	9,544
Gross profit	1,389	1,429	4,242	4,113
Operating expenses:
Selling and marketing expenses	204	196	633	574
Administrative expenses	229	232	692	671
Total operating expenses	433	428	1,325	1,245
Operating profit	956	1,001	2,917	2,868
Other income, net⁽³⁾	79	84	196	229
Profit before income taxes	1,035	1,085	3,113	3,097
Income tax expense	301	285	904	859
Net profit (before minority interest)	734	800	2,209	2,238
Net profit (after minority interest)	733	800	2,208	2,237
Basic EPS ($)	0.18	0.19	0.53	0.53
Diluted EPS ($)	0.18	0.19	0.53	0.53