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INFY Q2 Earnings Match: Can Strong Sales View Lift the Stock?
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Infosys (INFY - Free Report) reported second-quarter fiscal 2025 earnings of 19 cents per share, which matched the Zacks Consensus Estimate. The bottom line improved 5.6% from the year-ago quarter’s earnings of 18 cents.
INFY’s fiscal second-quarter revenues improved 3.7% to $4.894 billion from the year-ago quarter’s revenues of $4.72 billion. The top line marginally surpassed the Zacks Consensus Estimate of $4.89 billion. The robust growth in the top line can be attributed to large deals and stable demand across Financial Services, Manufacturing, Energy, Utilities, Resources & Services and Communication segments. Infosys also experienced growth in all of its geographical end markets.
Top-Line Details of Infosys
Revenues across North America recorded a year-over-year decline of 2.6% on a reported basis. Revenues across India, Europe and the Rest of the World increased 14.7%, 16.7% and 4.8%, respectively, on a reported basis. On a constant currency (cc) basis, North America registered a decline of 2.7%. On a cc basis, India, Europe and the Rest of the World registered growth of 16%, 15.5% and 3.8%, respectively.
Segment-wise, revenues from Manufacturing increased 13.5% to $768 million, Financial Services revenues grew 2.8% to $1.33 billion and Energy, Utilities, Resources & Services sales climbed 10.7% to $660 million. Communication rose 7.9% to $582 million, and Hi-Tech division sales increased 5.6% to $391.5 million.
In the second quarter of fiscal 2025, the company’s Retail segment revenues declined 9.2% to $651 million. Life Sciences revenues declined 2.7% to $357 million. The Others business unit’s revenues decreased 2.4% to $151.7 million.
Infosys added 86 clients in the fiscal second quarter. It signed multiple large deals of contract values worth $2.4 billion. The company reported that its clients, worth more than $100 million, now add up to 41, up from 39 in the year-ago quarter and 40 in the first quarter of fiscal 2025.
Gross profits increased 3.2% year over year to $1.49 billion. The gross margin contracted 20 basis points (bps) on a year-over-year basis to 30.5%.
The company’s operating income increased 3.3% year over year to $1.03 billion. Meanwhile, the operating margin contracted 10 bps to 21.1% year over year.
Infosys ended the fiscal second quarter with consolidated cash and investments of $4.63 billion, up from $4.31 billion recorded in the previous quarter. During the fiscal second quarter, the company generated a free cash flow of $839 million.
INFY Raises FY25 Outlook
Buoyed by the strong fiscal second-quarter performance, Infosys raised its revenue guidance for fiscal 2025. The company now projects full-year revenues to grow 3.75-4.50% on a cc basis, up from the earlier guidance of 3-4%. Moreover, it expects fiscal 2025 operating margin in the range of 20-22%.
The consensus mark for CyberArk’s 2024 earnings has been revised upward by 2 cents to $2.29 per share over the past 60 days, indicating a 104.5% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 33.4%. Shares of CYBR have surged 75.9% over the past year.
The Zacks Consensus Estimate for FFIV’s fiscal 2024 earnings has been revised downward by a penny to $13.15 per share in the past seven days, suggesting a year-over-year increase of 12.4%. It has a long-term earnings growth expectation of 7.8%. Shares of FFIV have plunged 46.1% in the trailing 12 months.
The Zacks Consensus Estimate for Fortinet’s 2024 earnings has been revised upward by 3 cents to $2.03 per share in the past 60 days, indicating an increase of 24.5% on a year-over-year basis. It has a long-term earnings growth expectation of 16.3%. Shares of FTNT have jumped 39.9% over the past year.
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INFY Q2 Earnings Match: Can Strong Sales View Lift the Stock?
Infosys (INFY - Free Report) reported second-quarter fiscal 2025 earnings of 19 cents per share, which matched the Zacks Consensus Estimate. The bottom line improved 5.6% from the year-ago quarter’s earnings of 18 cents.
INFY’s fiscal second-quarter revenues improved 3.7% to $4.894 billion from the year-ago quarter’s revenues of $4.72 billion. The top line marginally surpassed the Zacks Consensus Estimate of $4.89 billion. The robust growth in the top line can be attributed to large deals and stable demand across Financial Services, Manufacturing, Energy, Utilities, Resources & Services and Communication segments. Infosys also experienced growth in all of its geographical end markets.
Top-Line Details of Infosys
Revenues across North America recorded a year-over-year decline of 2.6% on a reported basis. Revenues across India, Europe and the Rest of the World increased 14.7%, 16.7% and 4.8%, respectively, on a reported basis. On a constant currency (cc) basis, North America registered a decline of 2.7%. On a cc basis, India, Europe and the Rest of the World registered growth of 16%, 15.5% and 3.8%, respectively.
Segment-wise, revenues from Manufacturing increased 13.5% to $768 million, Financial Services revenues grew 2.8% to $1.33 billion and Energy, Utilities, Resources & Services sales climbed 10.7% to $660 million. Communication rose 7.9% to $582 million, and Hi-Tech division sales increased 5.6% to $391.5 million.
In the second quarter of fiscal 2025, the company’s Retail segment revenues declined 9.2% to $651 million. Life Sciences revenues declined 2.7% to $357 million. The Others business unit’s revenues decreased 2.4% to $151.7 million.
Infosys added 86 clients in the fiscal second quarter. It signed multiple large deals of contract values worth $2.4 billion. The company reported that its clients, worth more than $100 million, now add up to 41, up from 39 in the year-ago quarter and 40 in the first quarter of fiscal 2025.
Infosys Limited Price, Consensus and EPS Surprise
Infosys Limited price-consensus-eps-surprise-chart | Infosys Limited Quote
INFY’s Other Financial Details
Gross profits increased 3.2% year over year to $1.49 billion. The gross margin contracted 20 basis points (bps) on a year-over-year basis to 30.5%.
The company’s operating income increased 3.3% year over year to $1.03 billion. Meanwhile, the operating margin contracted 10 bps to 21.1% year over year.
Infosys ended the fiscal second quarter with consolidated cash and investments of $4.63 billion, up from $4.31 billion recorded in the previous quarter. During the fiscal second quarter, the company generated a free cash flow of $839 million.
INFY Raises FY25 Outlook
Buoyed by the strong fiscal second-quarter performance, Infosys raised its revenue guidance for fiscal 2025. The company now projects full-year revenues to grow 3.75-4.50% on a cc basis, up from the earlier guidance of 3-4%. Moreover, it expects fiscal 2025 operating margin in the range of 20-22%.
INFY’s Zacks Rank & Other Stocks to Consider
Infosys currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector are CyberArk Software (CYBR - Free Report) , F5 Inc (FFIV - Free Report) and Fortinet (FTNT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The consensus mark for CyberArk’s 2024 earnings has been revised upward by 2 cents to $2.29 per share over the past 60 days, indicating a 104.5% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 33.4%. Shares of CYBR have surged 75.9% over the past year.
The Zacks Consensus Estimate for FFIV’s fiscal 2024 earnings has been revised downward by a penny to $13.15 per share in the past seven days, suggesting a year-over-year increase of 12.4%. It has a long-term earnings growth expectation of 7.8%. Shares of FFIV have plunged 46.1% in the trailing 12 months.
The Zacks Consensus Estimate for Fortinet’s 2024 earnings has been revised upward by 3 cents to $2.03 per share in the past 60 days, indicating an increase of 24.5% on a year-over-year basis. It has a long-term earnings growth expectation of 16.3%. Shares of FTNT have jumped 39.9% over the past year.