Large deal momentum continues with 71% net new deals; Resilient performance in a seasonally weak quarter
FinTech BizNews Service
Mumbai, January 15, 2024: Infosys (NSE, BSE, NYSE: INFY), a global leader in next generation digital services and consulting, delivered $4,663 million in Q3 revenues with year-on-year and sequential decline of 1.0% in constant currency. Large deal TCV for the quarter was $3.2 billion, with 71% being net new. Operating margin for the quarter was 20.5%, a sequential decline of 70 bps. Attrition declined further to 12.9%. FY24 revenue guidance revised to 1.5%-2.0% and operating margin guidance at 20%-22%.
“Our performance in Q3 was resilient. Large deal wins were strong at $3.2 billion, with 71% of this as net new, reflecting the relevance and strength of our portfolio of offerings ranging from generative AI, digital and cloud to cost, efficiency and automation” said Salil Parekh, CEO and MD. “Our clients are leveraging our Topaz generative AI capabilities and our Cobalt cloud capabilities to create long-term value for their businesses”, he added.
Guidance for FY24:
• Revenue growth of 1.5%-2.0% in constant currency
• Operating margin of 20%-22%
Key highlights
For the quarter ended December 31, 2023
• Revenues in CC terms declined by 1.0% YoY and QoQ
• Reported revenues at Rs38,821 crore, growth of 1.3% YoY
• Operating margin at 20.5%, decline of 1.0% YoY and 0.7% QoQ
• Basic EPS at Rs14.76, decline of 6.1% YoY
• FCF at Rs5,548 crore, growth of 17.0% YoY; FCF conversion at 90.8% of net profit For nine months ended December 31, 2023
• Revenues in CC terms grew by 1.8% YoY
• Reported revenues at Rs115,748 crore, growth of 5.9% YoY
• Operating margin at 20.8%, decline of 0.2% YoY
• Basic EPS at Rs44.13, growth of 3.0% YoY
• FCF at Rs16,833 crore, growth of 15.3% YoY; FCF conversion at 92.1% of net profit.
Q3 performance is a demonstration of our strong execution capabilities reflected in improved operational efficiencies achieved under ‘Project Maximus’, despite a challenging environment”, said Nilanjan Roy, Chief Financial Officer. “Cash generation remained robust with FCF to net profit conversion for Q3 at 90.6%”, he added.
Client wins & testimonials
• Infosys entered into a collaboration with smart Europe GmbH for five years to bring sustainable electric mobility to customers. Dirk Adelmann, Chief Executive Officer, smart Europe GmbH, said, “We are pleased to have Infosys as our partner on this journey. Infosys’ strong leadership commitment backed by its ability to drive end-to-end application development and maintenance with efficiency and effectiveness, will help us boost our operational performance and user experience.”
• Infosys announced a strategic long-term collaboration with TK Elevator (TKE) to help consolidate, harmonize, and modernize their digital landscape. Susan Poon, Global CIO at TK Elevator, said, “Technology empowers our employees and business associates to deliver high-quality services to customers and users across the value chain. We are delighted to significantly expand our collaboration with Infosys, which brings end-to-end digital transformation capabilities, helping us accelerate our business transformation and to realize our strategic vision.”
• Infosys collaborated with LKQ Europe to help integrate and standardize their disparate business processes and systems, to enable synergies and achieve economies of scale. Varun Laroyia, Chief Executive Officer, LKQ Europe, said, “At LKQ, we are constantly enhancing our market leading position. This project is an extension of our original program and focused on building a more streamlined and impactful organization. With Infosys as our strategic partner, we are aiming to reduce complexities, increase efficiency and leverage our strengths. This will allow us to upgrade our focus on customer-centricity, ensure best in class customer experiences and further excel our top position.”
• Infosys and Spirit AeroSystems inaugurated their dedicated center for aerospace engineering excellence in Richardson, Texas. The center will enable Infosys to work more closely with Spirit AeroSystems to develop cross-functional solutions to pressing business challenges in the aircraft development lifecycle. Dr. Sean Black, Senior Vice President, Chief Technology Officer and Chief Engineer, Spirit AeroSystems, said, “The strategic collaboration with Infosys in Richardson, Texas, will leverage the talent pool in the North Texas region and create a dedicated center for aerospace engineering excellence to cover the complete aircraft development life cycle for both new derivatives and in-service aircraft.”
• Infosys helped enhance Spotlight Retail Group’s customer growth via an omnichannel digital fulfilment and advanced analytics platform leveraging Infosys Topaz. Tal Lall, Group General Manager, Digital and Omnichannel, Spotlight Retail Group, said, “At Spotlight Retail Group, we are committed to continuously optimize customer experiences as one of our key competitive differentiators. One of the ways that we’ve done this is through greater investment in personalization, and this is core to the digital commerce platform built with Infosys Topaz, leveraging its advanced analytics capabilities. This platform now provides us with deeper customer insights while supporting scalability to meet customer demands and onboarding new brands. We are delighted to have collaborated with Infosys on this journey.”
• Infosys collaborated with Proximus to help modernize their IT stack, optimize costs and broaden their portfolio of offerings. Antonietta Mastroianni, Chief Digital & IT Officer at Proximus, said, “Our affiliates are an important part of Proximus’ multi-brand strategy. They have a fantastic reputation in Belgium when it comes to quality service at great prices. In order to continue to ensure smooth operations and an enhanced portfolio of offerings to all our customers, it was crucial to achieve deeper integration in the Proximus IT stack. A complex transition, involving multiple vendors, applications in an evolving landscape meant that we needed new operating model and sourcing strategy that could anticipate and adapt to our requirements. Infosys as a managing partner for this venture with the out-tasking model enabled us to successfully complete the program on time and with great quality of delivery.”
• Bank of Commerce selected Infosys Finacle for its core banking transformation to help replace their legacy platform. Michelangelo R. Aguilar, President and CEO, Bank of Commerce, said, “We are pleased to have chosen Infosys Finacle due to its established presence in the Philippines, robust solutions suite, and record of reliable delivery in the market. The modernization of our core banking system is an integral part of BankCom’s digital transformation journey as a universal bank in delivering a truly digital banking experience to our clients. It will enable us to operate better, innovate, and keep pace with industry best practices, regulatory requirements, and evolving expectations of the markets we serve, notably the San Miguel Group and SMC ecosystem.”
Recognitions & Awards AI and Cloud Services
• Positioned as a leader in HFS Horizons: Generative Enterprise Services, 2023
• Recognized as a leader in Constellation ShortList 2023: AI-Driven Cognitive Applications
• Recognized as a leader in Constellation ShortList 2023: Artificial Intelligence and Machine Learning Best-of-Breed Platforms
• Positioned as a leader in Gartner Magic Quadrant for Cloud ERP Services for Service-Centric Enterprises
• Rated as a leader in Cloud Services in Insurance PEAK Matrix® Assessment 2023 by Everest Group
• Recognized as a leader in IDC MarketScape: Worldwide Managed Public Cloud Services 2023 Vendor Assessment
• Recognized as a leader in IDC MarketScape: IDC Asia/Pacific Cloud Professional Services Vendor Assessment
• Recognized as a leader in IDC MarketScape: Asia/Pacific Microsoft Business Applications Implementation Services Vendor Assessment, 2023–2024
• Rated as a leader in NelsonHall’s Advanced Digital Workplace Services NEAT
• Recognized as a leader in Public Cloud ISG Provider Lens™ report in the US, UK and Nordics regions Key Digital Services
• Recognized as a leader in Constellation ShortList 2023: Metaverse Design and Services
• Rated as a leader in Healthcare Payer Digital Services PEAK Matrix® Assessment 2023 by Everest Group
• Recognized as a Leader in the Gartner® Magic Quadrant™ for Finance and Accounting Business Process Outsourcing 2023.
Rated as a leader in Lending IT Services PEAK Matrix® Assessment 2023 by Everest Group
• Rated as a leader in Next-generation Quality Engineering (QE) Services PEAK Matrix® Assessment 2023 by Everest Group
• Recognized as a leader in IDC MarketScape: Worldwide Production Management Service Providers 2023 Vendor Assessment
• Recognized as a leader in IDC MarketScape: Worldwide Quality Management Service Providers 2023 Vendor Assessment
• Positioned as a leader in HFS Horizons: Low-Code Services, 2023
• Recognized as a leader in IDC MarketScape: Worldwide Supply Chain All Other Ecosystems Services 2023 Vendor Assessment
• Recognized as a leader in IDC MarketScape: Worldwide Software Engineering Services 2023 Vendor Assessment
• Recognized as a leader in Avasant’s Tech-enabled Sustainability Services 2023–2024 RadarView™
• Recognized as a leader in Avasant’s Intelligent IT Ops Services 2023-2024 RadarView™
• Recognized as a leader in Avasant’s Nordics Digital Services 2023-2024 RadarView™ Industry & Solutions
• Positioned as a leader in HFS Horizons: Retail and CPG Service Providers, 2023
• Infosys BPM won the ‘Best CSR Impact’ award, at the Corporate Social Responsibility Summit and Awards 2023
• Infosys Finacle recognized as Best SaaS Provider Europe 2023 at the Global Finance Awards
• Infosys Finacle and The National Bank of Greece awarded in the category ‘Best Core Banking Implementation Europe 2023’ at the Global Finance Awards
• Infosys Finacle and Union Bank of India recognized at the 2023 Banking Tech awards in the Best Embedded Finance Initiative category
• Infosys Finacle and Emirates NBD awarded ‘Best Digital Transformation Implementation’ at the MEA Finance Leaders Awards 2023
