Infosys Reports 1% Drop in Q3 Revenue; Adjusts Full-Year Forecast

Infosys, the second-largest IT services provider in India, announced a 1 percent decline in its third-quarter revenue to $4.663 billion (388.21 billion rupees), compared to 383.18 billion rupees in the corresponding period of the previous year.
Infosys Finacle at IT trade showIn response to the challenging market conditions, Infosys revised its revenue growth forecast for the full year for the third consecutive quarter. The company now anticipates a constant currency basis growth of 1.5 percent-2 percent, down from the earlier projection of 1 percent-2.5 percent.

The third-quarter results revealed a Total Contract Value (TCV) for large deals at $3.2 billion, with an impressive 71 percent being net new. The operating margin for the quarter experienced a sequential decline of 70 basis points, settling at 20.5 percent. Attrition, on the other hand, showed improvement, declining further to 12.9 percent. The revised guidance for fiscal year 2024 includes revenue expectations of 1.5 percent-2.0 percent and an operating margin range of 20 percent-22 percent.

Salil Parekh, CEO and Managing Director of Infosys, emphasized the company’s commitment to delivering long-term value for clients. “Our clients are leveraging our Topaz generative AI capabilities and our Cobalt cloud capabilities to create long-term value for their businesses.”

The company disclosed that revenue contributions from North America decreased to 59 percent of its total sales from 62 percent, attributed to enterprises either postponing IT spending or renegotiating terms of their IT services deals. Conversely, revenue contribution from Europe saw an uptick, rising to 28.2 percent from 25.8 percent.

The broader $245-billion IT sector, which had previously experienced significant growth during the pandemic-driven digital services surge, is currently grappling with challenges. Clients are scaling back spending on non-essential projects amidst inflationary pressures and fears of an economic downturn. Infosys remains focused on adapting to these market dynamics while striving to provide innovative solutions to its clients.

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