Infosys Limited (INFY) Tops Q3 EPS by 2c, Revenues Beat

Infosys Limited (NYSE: INFY) reported Q3 EPS of $0.17, $0.02 better than the analyst estimate of $0.15. Revenue for the quarter came in at $3.52 billion versus the consensus estimate of $3.37 billion.

For the quarter ended December 31, 2020

• Revenues were $3,516 million, growth of 8.4% YoY and 6.2% QoQ Operating profit was $893 million, growth of 25.6% YoY and 6.4% QoQ Basic EPS was $0.17, growth of 12.5% YoY and 7.9% QoQ
• Q3 revenues grew year-on-year by 8.4% in USD; grew by 6.6% in constant currency
• Digital revenues cross 50% of total revenue, year-on-year growth of 31.3% in constant currency
• Q3 operating margin at 25.4%, year-on-year increase of 350 bps
• Robust Q3 net profit at $705 million, year-on-year growth of 12.6%
• Continued strong Q3 free cash flow at $772 million, year-on-year growth of 15.1%; FCF conversion at 109.0% of net profit
• Q3 voluntary attrition for IT services declined to 10.0% from 15.8% in Q3 20
• Year-to-date revenues grew by 3.5% in constant currency
• Year-to-date operating margin at 24.5%, an expansion of 310 bps
• FY 21 revenue growth guidance increases to 4.5%-5.0% in constant currency
• FY 21 operating margin guidance increases to 24.0%-24.5%

"The Infosys team has delivered another quarter of excellent results. Execution of client relevant strategy focused on digital transformation continues to drive superior growth, well ahead of the industry. The scale of new client partnerships with leading global companies such as Vanguard, Daimler and Rolls-Royce demonstrate the depth of digital and cloud capabilities of Infosys. The commitment and skills of our employees to support and drive the digital journey of clients are matters of great pride for me", said Salil Parekh, CEO and MD. "With the intense focus on client needs and the comprehensive foundation built on differentiated capabilities, I remain confident about the future."

"The resilience of Infosys has been severely tested over the past several quarters and I am delighted with our response marked by strong revenue performance, large deal wins, healthy operating metrics and continued low attrition," said Pravin Rao, COO. "This outstanding performance has been made possible by reimagining Infosys, over the last three years, as a live enterprise with fully transformed digital infrastructure – Infosys Lex for learning, InfyMe for employee engagement, Infosys Meridian for collaboration, and Infosys DevSecOps platform to empower application teams to rapidly build and deploy new features. These highly differentiated systems and processes, redesigned for a digital-first world, are built on a strong foundation of robust connectivity to customer networks and fully secured personal devices. Not only does this give us an advantage in these times of distributed working but also a distinct long-term lead into the future."

"Navigating your next strategy coupled with razor sharp focus on our operating model and efficiencies continues to deliver superior shareholder value creation," said Nilanjan Roy, CFO. "I am also delighted with the announcement of Infosys ESG vision 2030 simultaneously with our climate neutrality achievement, a journey we had embarked on ten years ago. As a responsible corporate citizen, Infosys is committed to its vision of shaping and sharing solutions that serve the development of businesses and communities."

For earnings history and earnings-related data on Infosys Limited (INFY) click here.

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