Infosys has reported strong performance with Q3 revenues of $4,939 million, reflecting a 1.7 percent sequential growth and a 6.1 percent year-on-year increase.
Operating margin of Infosys for Q3 stood at 21.3 percent, a 0.2 percent sequential increase.
Free cash flow hit a record $1,263 million, growing 90 percent year-on-year.
Infosys said the total contract value (TCV) of large deal wins reached $2.5 billion, with 63 percent net new, growing 57 percent sequentially.
Headcount of Infosys increased for the second consecutive quarter.
Year-to-date revenues for December 2024 grew by 3.9 percent year-on-year, and operating margin increased by 0.3 percent year-on-year to 21.2 percent.
Infosys CEO Salil Parekh highlighted the success of Infosys’ digital offerings and strategic initiatives, particularly in generative AI, which is seeing growing client interest. Infosys did not reveal the contribution of AI deals to its total client wins or revenue.
Infosys CFO Jayesh Sanghrajka noted an 11.4 percent year-on-year growth in earnings per share in rupee terms, driven by improved realization and scale benefits.
The revenue contribution from industry verticals included financial services (27.8 percent), manufacturing (15.5 percent), retail (13.8 percent), energy, utilities, resources & services (13.5 percent), communication (11.2 percent), hi-tech (7.9 percent), and life sciences (7.6 percent).
Geographic revenue breakdown showed North America at 58.4 percent, Europe at 29.8 percent, the rest of the world at 8.7 percent, and India at 3.1 percent.
Infosys had 1,876 clients, with 101 added during the period. The company had 997 clients contributing over $1 million in revenue, 301 clients generating over $10 million, 89 clients over $50 million, and 41 clients over $100 million.
Infosys said total employees numbered 323,379, with 306,528 in software roles and 16,851 in sales and support. The voluntary attrition rate for IT services was 13.7 percent at the end of December 2024.
DD Mishra, VP Analyst at Gartner, said: “Infosys has a strong fiscal situation; its profitability is good and continues to grow its revenue in line with the growth forecasts in the Industry. Infosys has made significant investments in AI but will need to decide how to incorporate the AI component of its delivery into its pricing model.”
“Infosys pricing is predominantly traditional. While outcome-based pricing models are offered for some services, they are comparatively less adopted by clients. Its services pricing approach is similar to its peers whereby most of its engagements are individually priced. This may bring some challenges in driving profitability and value,” DD Mishra said.
Rajani Baburajan
