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Infosys (INFY - Free Report) reported mixed first-quarter fiscal 2024 results. The company delivered first-quarter fiscal 2024 earnings of 17 cents per share, which missed the Zacks Consensus Estimate of 18 cents. INFY’s bottom line increased 6.3% on a year-over-year basis.
Infosys’ fiscal first-quarter revenues increased 3.9% year over year to $4.62 billion, surpassing the Zacks Consensus Estimate of $4.55 billion. In terms of constant currency (cc), the metric was up 4.2%.
Infosys continued to fortify its industry-leading digital capabilities amid a highly volatile economic scenario. Large deal wins and market share expansion, driven by the accelerated digital transformation trend worldwide, remained key catalysts for INFY’s growth.
Revenues across North America, Europe and India recorded a year-over-year increase of 2.3%, 10.9% and 9.3%, respectively, on a reported basis. On a cc basis, North America, Europe and India registered growth of 2.1%, 10.1% and 13.7%, respectively. However, revenues from the rest of the world declined 4.5% on a reported basis and 0.5% at cc.
Segment-wise, revenues from Manufacturing increased 21.3% to $651 million, Life Sciences revenues grew 14.9% to $335 million, and Energy, Utilities, Resources & Services sales climbed 8.3% to $595 million. Our estimates for Manufacturing, Life Sciences, and Energy, Utilities, Resources & Services unit sales were pegged at $585.5 million, $293.4 million and $551.4 million, respectively.
Retail and Hi-Tech division sales increased 4% and 2.5% to $671 million and $372 million, respectively. According to our estimates, Infosys’ revenues from Retail and Hi-Tech divisions were pegged at $650 million and $365.2 million, respectively, in the reported quarter.
In first-quarter fiscal 2024, the company recorded year-over-year revenue growth of 28% in its Others business segment, which came in at $155 million. As per our estimates, Others segment was likely to report revenues of $122.5 million in the quarter. However, Financial Services fell 4.7% to $1.3 billion in comparison to our estimates of $1.4 billion and Communication declined 6.1% to $540 million in comparison to our estimates of $581.4 million.
Infosys added 99 clients in the fiscal first quarter. It signed multiple large deals of contract values worth $2.3 billion, up from previous quarter’s $2.1 billion. The company reported that its clients, worth more than $100 million, now add up to 38 and were in line with the year-ago quarter but down from the fourth-quarter fiscal 2023’s 40.
Other Financial Details
Gross profits increased 8.2% year over year to $1.41 billion. However, the gross margin expanded 120 basis points (bps) on a year-over-year basis to 30.5%.
The company’s operating income inched up 8.2% year over year to $961 million. Meanwhile, the operating margin climbed 80 bps to 20.8% year over year.
Infosys ended the fiscal first quarter with cash and cash equivalents of $1.50 billion, up from the $1.48 billion recorded at the end of the fourth quarter of fiscal 2023. In the fiscal first quarter, the company’s free cash flow was $699 million.
FY24 Outlook
For fiscal 2024, INFY expects annual revenues to grow between 1% and 3.5% year over year at cc. The company estimates operating margin in the 20-22% range for the full fiscal.
Zacks Rank & Stocks to Consider
Infosys currently has a Zacks Rank #3 (Hold). Shares of INFY have fallen 15.6% in the past year.
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Infosys (INFY) Q1 Earnings Miss, Revenues Surpass Estimates
Infosys (INFY - Free Report) reported mixed first-quarter fiscal 2024 results. The company delivered first-quarter fiscal 2024 earnings of 17 cents per share, which missed the Zacks Consensus Estimate of 18 cents. INFY’s bottom line increased 6.3% on a year-over-year basis.
Infosys’ fiscal first-quarter revenues increased 3.9% year over year to $4.62 billion, surpassing the Zacks Consensus Estimate of $4.55 billion. In terms of constant currency (cc), the metric was up 4.2%.
Infosys continued to fortify its industry-leading digital capabilities amid a highly volatile economic scenario. Large deal wins and market share expansion, driven by the accelerated digital transformation trend worldwide, remained key catalysts for INFY’s growth.
Infosys Price, Consensus and EPS Surprise
Infosys price-consensus-eps-surprise-chart | Infosys Quote
Top-Line Details
Revenues across North America, Europe and India recorded a year-over-year increase of 2.3%, 10.9% and 9.3%, respectively, on a reported basis. On a cc basis, North America, Europe and India registered growth of 2.1%, 10.1% and 13.7%, respectively. However, revenues from the rest of the world declined 4.5% on a reported basis and 0.5% at cc.
Segment-wise, revenues from Manufacturing increased 21.3% to $651 million, Life Sciences revenues grew 14.9% to $335 million, and Energy, Utilities, Resources & Services sales climbed 8.3% to $595 million. Our estimates for Manufacturing, Life Sciences, and Energy, Utilities, Resources & Services unit sales were pegged at $585.5 million, $293.4 million and $551.4 million, respectively.
Retail and Hi-Tech division sales increased 4% and 2.5% to $671 million and $372 million, respectively. According to our estimates, Infosys’ revenues from Retail and Hi-Tech divisions were pegged at $650 million and $365.2 million, respectively, in the reported quarter.
In first-quarter fiscal 2024, the company recorded year-over-year revenue growth of 28% in its Others business segment, which came in at $155 million. As per our estimates, Others segment was likely to report revenues of $122.5 million in the quarter. However, Financial Services fell 4.7% to $1.3 billion in comparison to our estimates of $1.4 billion and Communication declined 6.1% to $540 million in comparison to our estimates of $581.4 million.
Infosys added 99 clients in the fiscal first quarter. It signed multiple large deals of contract values worth $2.3 billion, up from previous quarter’s $2.1 billion. The company reported that its clients, worth more than $100 million, now add up to 38 and were in line with the year-ago quarter but down from the fourth-quarter fiscal 2023’s 40.
Other Financial Details
Gross profits increased 8.2% year over year to $1.41 billion. However, the gross margin expanded 120 basis points (bps) on a year-over-year basis to 30.5%.
The company’s operating income inched up 8.2% year over year to $961 million. Meanwhile, the operating margin climbed 80 bps to 20.8% year over year.
Infosys ended the fiscal first quarter with cash and cash equivalents of $1.50 billion, up from the $1.48 billion recorded at the end of the fourth quarter of fiscal 2023. In the fiscal first quarter, the company’s free cash flow was $699 million.
FY24 Outlook
For fiscal 2024, INFY expects annual revenues to grow between 1% and 3.5% year over year at cc. The company estimates operating margin in the 20-22% range for the full fiscal.
Zacks Rank & Stocks to Consider
Infosys currently has a Zacks Rank #3 (Hold). Shares of INFY have fallen 15.6% in the past year.
Some better-ranked stocks from the broader Computer and Technology sector are Salesforce (CRM - Free Report) , NVIDIA Corporation (NVDA - Free Report) and Meta Platforms (META - Free Report) . While Salesforce and NVIDIA sport a Zacks Rank #1 (Strong Buy), Meta carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Salesforce’s second-quarter fiscal 2024 earnings has been revised northward by a penny to $1.90 per share over the past 30 days. For fiscal 2024, earnings estimates have moved up by 2 cents to $7.44 in the past 30 days.
CRM's earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 15.5%. Shares of the company have gained 23% in the past year.
The Zacks Consensus Estimate for NVIDIA’s second-quarter fiscal 2024 earnings has been revised northward from $1.04 to $2.04 per share over the past 60 days. For fiscal 2024, earnings estimates have moved up by 2 cents to $7.66 in the past 30 days.
NVDA's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 0.26%. Shares of the company have soared 151.8% in the past year.
The Zacks Consensus Estimate for Meta Platforms' second-quarter 2023 earnings has been revised upward by a penny to $2.83 per share over the past seven days. For 2023, earnings estimates have moved north by 3 cents to $11.97 in the past seven days.
META’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing twice, the average surprise being 15.5%. Shares of the company have surged 65.1% in the past year.