FY25 guidance - revenue growth of 1%-3% and operating margin of 20%-22%
BENGALURU, India, April 18, 2024 /PRNewswire/ -- Infosys (NSE: INFY) , a global leader in next-generation digital services and consulting, delivered $18.6 billion in FY24 revenues with a growth of 1.4% in constant currency and operating margin of 20.7%. Free Cash Flow was strong at $2,882 million, an increase of 13.7% over FY 23. Large deal TCV for FY24 was highest ever at $17.7 billion, with 52% being net new.
https://mma.prnewswire.com/media/633365/Infosys_Logo.jpg [https://mma.prnewswire.com/media/633365/Infosys_Logo.jpg]
Q4 revenues were at $4,564 million, flat year on year and decrease of 2.2% sequentially in constant currency. Large deal TCV for the quarter was $4.5 billion, with 44% being net new. Operating margin for the quarter was 20.1%, a sequential decrease of 40 bps. Free Cash Flow was robust at $848 million.
"We delivered the highest ever large deal value in the financial year 2024. This reflects the strong trust clients have in us. Our capabilities in Generative AI continue to expand. We are working on client programs leveraging large language models with impact across software engineering, process optimization, and customer support, said Salil Parekh, CEO and MD. "I would like to thank our 317,000 employees across the world that are working to create value for our clients." he added.
1.4% FY 20.7% FY 10.0% FY $17.7 Bn FY $2.9 Bn FY 20.1% Q4 30.2% Q4 $4.5 Bn Q4 Operating YoY EPS Increase Large Deal Margin (₹ terms) TCV Flat Q4 $848 Mn Q4 YoY CC Growth Free Cash Flow
Guidance for FY25:
-- Revenue growth of 1%-3% in constant currency
-- Operating margin of 20%-22%
1. Key highlights:
For the quarter ended March 31, 2024 For year ended March 31, 2024 - Revenues in CC terms remained flat YoY and declined by 2.2% QoQ - Revenues in CC terms grew by 1.4% YoY - Reported revenues at $4,564 million, growth of 0.2% YoY -Reported revenues at $18,562 million, growth of 1.9% YoY - Operating margin at 20.1%, decline of 0.9% YoY and 0.4% QoQ - Operating margin at 20.7%, decline of 0.3% YoY - Basic EPS at $0.23, increase of 28.9% YoY - Basic EPS at $0.77, increase of 7.3% YoY - FCF at $848 million, growth of 18.9% YoY ; FCF conversion at 88.4% of net profit -FCF at $2,882 million, growth of 13.7% YoY; FCF conversion at 91.0% of net profit
"Free cash flow of $848 million in Q4 was highest in the last 11 quarters driven by our relentless focus to improve working capital cycle. Consistent with the objective of giving high and predictable returns to shareholders, the Board has approved the capital allocation policy under which the company expects to return 85% over the next 5 years and progressively increase annual Dividend Per Share", said Jayesh Sanghrajka, CFO. "Operating margin expansion in the medium-term and improving cash generation continue to remain our priorities underpinned by early success in Project Maximus", he added.
2. Capital Allocation
-- For the Financial Year 2024, the Board recommended a final dividend of
`20 per share (0.24 per ADS) and additionally a special dividend of `8
per share (0.10 per ADS*). With this, the total payout over FY20 - FY 24
will be 85% of Free Cash Flow, in line with our capital allocation
policy announced earlier.
-- The Board in its meeting held on April 18, 2024 has reviewed and
approved the capital allocation policy for the next 5 years from FY25 -
FY29 after taking into consideration the strategic and operational cash
requirements as below.
"Effective from financial year 2025, the Company expects to continue its policy of returning approximately 85% of the free cash flow cumulatively over a 5-year period through a combination of semi-annual dividends and/or share buyback/ special dividends subject to applicable laws and requisite approvals, if any."
Under this policy, the Company expects to progressively increase its annual Dividend Per Share (excluding special dividend if any).
Free cash flow is defined as net cash provided by operating activities less capital expenditure as per the consolidated statement of cash flows prepared under IFRS. Dividend and buyback include applicable taxes.
*USD/INR rate of `83.41
3. Update on India Income Tax Orders
During the quarter ending March 31, 2024, the Company received orders under sections 250 and 254 of the Income Tax Act, 1961, from the Income Tax Authorities in India for the assessment years, 2007-08 to 2015-16, 2017-18 and 2018-19. These orders confirmed the Company's position with respect to tax treatment of certain contentious matters. As a result, interest income (pre-tax) of $232 million was recognized and provision for income tax aggregating $63 million was reversed with a corresponding credit to the Statement of Profit and Loss. Also, upon resolution of the disputes, an amount aggregating to $196 million has been reduced from contingent liabilities.
4. Update on Financial Services Client
During Q4, we had rescoping and renegotiation of one of the large contracts in the financial services segment leading to a one-time impact of approximately 100bps in Q4. Nearly 85% of the scope of the contract continues as-is.
5. Client wins & testimonials
-- Infosys announced a strategic collaboration with Musgrave to help
automate their IT operations by leveraging its industry leading AI and
Cloud offerings, Infosys Topaz and Infosys Cobalt. Stephen Mckenna,
Chief Technology Officer, Musgrave, said, "I am delighted by our
recently announced collaboration with Infosys, which will enable us to
leverage Infosys' expertise and resources to deliver innovative
solutions to all our customers and retail partners. Musgrave has always
been committed to providing our customers with the best possible
service, and this collaboration is a testament to that commitment. We
are confident that this collaboration will result in new and exciting
products and services that will benefit all our customers."
-- Infosys collaborated with PROG Holdings, Inc. to bring AI-powered
experiences to their customers and intelligent automation to their
operations, as an integral part of PROG Holdings' ongoing cloud and
AI-focused technology modernization and innovation efforts. Steve
Michaels, President and CEO of PROG Holdings, said, "We look forward to
working with Infosys to develop and enhance key systems that positively
impact the speed to market, agility, and scalability of key PROG
Holdings technologies and platforms. We expect our collaboration with
Infosys will reduce friction for both our customers and retail partners,
further solidifying PROG Holdings' position atop the virtual
lease-to-own industry we helped create twenty-five years ago."
-- Infosys collaborated with Pacific International Lines (PIL) to
accelerate their digital transformation initiative by helping revamp
PIL's existing customer portal and deploying a scalable and modern
technology platform, aimed at creating a positive impact for PIL's key
stakeholders across the shipping and logistics ecosystem. Lionel Patrice
Chatelet, Chief Commercial Officer, Pacific International Lines (PIL),
said, "We are looking for a partner who can not only bring technology
but also play an advisory role in the journey of transformation. Infosys
brings together a strong combination of right capabilities as well as
highly collaborative ways of working. We are delighted to collaborate
with Infosys."
-- Resolution Life Australasia collaborated with Infosys to virtualize its
mainframe systems by enabling a seamless migration to the cloud,
enhancing the overall customer experience. Peter Histon, CIO of
Resolution Life Australasia, said, "Infosys brought a number of
proprietary accelerators to the table as part of the virtualization
which helped us to deliver the solution rapidly. But beyond that,
Infosys brought in a number of different people capabilities. We took a
progressive approach around migration of the underlying applications.
There were two very big releases. Infosys worked with us every step of
the way."
-- zooplus and Infosys have entered into a strategic eight- year
collaboration to set up an AI-led product and technology hub in
Hyderabad, India. Markus Hermanutz, Chief Information Officer, zooplus
SE, said, "We are excited to have selected Infosys to set up a new
AI-led hub through which we will drive our business growth ambition.
With Infosys Topaz, we will achieve productivity and efficiency at
scale, and attract the right talent for upcoming transformations across
our e-commerce value chain."
-- Infosys is expanding its successful collaboration with Hasbro, building
on their initial achievements in the SAP S4 implementation. Together,
they are advancing their relationship and strategy globally through a
multi-year strategic engagement. Leveraging Infosys's expertise in AI
and a proven experience led cognitive approach, Infosys is poised to
support Hasbro's global business. This collaboration aims to drive
operational excellence, foster innovation, and deliver superior
experiences at scale for both customers and employees worldwide. Steve
Zoltick, CIO & Head, Global Business Enablement, Hasbro, said, "Infosys
is bringing the right talent to our collaboration allowing us to enhance
our capabilities and achieve our Global Business Enablement goals".
-- Infosys Finacle successfully implemented the Finacle Digital Lending
Solution Suite in a Software-as-a-Service (SaaS) mode for Regional
Investment Corporation (RIC) which included the adoption of the Finacle
Online Banking and Finacle Alerts Solution. Chris Rawlins, Executive
Director Transformation, Regional Investment Corporation (RIC), said,
"At RIC, our mission is to nurture the growth of the Australian farm
businesses through affordable loans, while also ensuring their
resilience and profitability. With the Infosys Finacle Lending solution,
we have a proven technology platform to support the evolving demands of
our business and customers, with the agility to roll out new products
and regulations as mandated by the Federal Government. The nine-month
implementation by the Infosys Finacle team was delivered on schedule and
we are impressed by the team's commitment to facilitate RIC in achieving
a smooth transition without any disruptions to our customers."
-- Infosys and Handlesblatt Media Group announced a strategic collaboration
to support the Handelsblatt Research Institute (HRI) in making complex
reports on global economic and financial topics more accessible and
easily consumable for the public, by leveraging Infosys Topaz, an
AI-first set of services, solutions and platforms using generative AI
technologies. Dr. Jan Kleibrink, Managing Director, Handelsblatt
Research Institute, said, "We are excited to collaborate with Infosys to
offer cutting-edge, AI-enabled trend reports. One of the core tasks of
the Handelsblatt Research Institute is to present complex economic
relationships and the results of scientific analysis to a broad
readership. We achieve this with texts of the highest journalistic
quality and visual storytelling based on high-quality infographics. With
Infosys as our AI and digital innovation partner, we now move to the
next level of digital storytelling that is powered by AI."
6. Recognitions & Awards
AI and Cloud Services
-- Awarded ISO 42001:2023 certification for implementing an Artificial
Intelligence Management System framework
-- Positioned as a leader in IDC MarketScape Worldwide Higher Education
Cloud Professional Services Vendor Assessment
-- Positioned as a leader in HFS Horizons: Assuring the Generative
Enterprise(TM), 2024
-- Rated as a leader in ISG's Multi Public Cloud Services Provider Lens(TM)
study
-- Rated as a leader in ISG's Intelligent Automation - Solutions and
Services Provider Lens(TM) study in US and Europe
Key Digital Services
-- Rated as a leader in The Forrester Wave(TM): Application Modernization
And Migration Services, Q1 2024
-- Positioned as a leader in the Unified Communication & Collaboration
(UCC) Specialist Services PEAK Matrix® Assessment 2024 by Everest and
ranked #1 in the UCC rating by Everest
-- Rated as a leader in Pega Services PEAK Matrix® Assessment 2024 by
Everest
-- Positioned as a leader in Application Transformation Services PEAK
Matrix® Assessment 2024 - North America by Everest
-- Positioned as a leader in Application Transformation Services PEAK
Matrix® Assessment 2024 - Europe by Everest
-- Positioned as a leader in Software Product Engineering Services PEAK
Matrix® Assessment 2024 by Everest
-- Rated as a leader in Talent Readiness for Next-generation IT Services
PEAK Matrix® Assessment 2023 by Everest
-- Positioned as a leader in IDC MarketScape: Worldwide Blockchain Services
2024 Vendor Assessment
-- Rated as a leader in Cyber Resiliency NEAT 2024 by NelsonHall
-- Rated as a leader in Salesforce Services 2024 NEAT 2024 by NelsonHall
-- Rated as a leader in ShortList 2024: Custom Software Development
Services by Constellation Research
-- Rated as a leader in ShortList 2024: Innovation Services and Engineering
by Constellation Research
-- Rated as leader in ShortList 2024: Learning Marketplaces by
Constellation Research
-- Rated as leader in ShortList 2024: Microsoft End-to-End Service
Providers by Constellation Research
-- Rated as leader in ShortList 2024: QA Tools for NextGen Apps by
Constellation Research
-- Recognized as a leader in Avasant's Retail Digital Services 2024
Radarview(TM)
-- Recognized as a leader in Avasant's SAP S/4HANA Services 2023-2024
Radarview
-- Rated as a leader in ISG's Environmental, Social and Governance Services
(ESG) Provider Lens(TM) study in US, Europe and Global
Industry & Solutions
-- Positioned as a leader in Retail IT Services PEAK Matrix® Assessment
2024 by Everest
-- Positioned as a leader in HFS Horizons: Manufacturing Intelligent
Operations Services, 2024
-- Positioned as a leader in HFS Horizons: The Best Service Providers for
Asset and Wealth Management
-- Rated as a leader in ESG Services in Banking 2024 by NelsonHall
-- Rated as a leader in Innovation Radar - Salesforce Related Services in
Europe: The Communications & Media View by PAC, The Manufacturing View
by PAC, The Energy & Utilities View by PAC, and The Financial Services
View by PAC
-- Infosys Finacle along with its customers, won multiple industry awards
at the Retail Banker International Asia Trailblazer Awards 2024. These
include Infosys Finacle Mobile Teller awarded for Most Innovative Branch
Offering; Infosys Finacle and HDFC awarded forExcellence in Mass
Affluent Banking; Infosys Finacle and South Indian Bank awarded for Best
CSR Initiative - Environmental Impact; Infosys Finacle and Suryoday Bank
awarded for Best Core Banking System Initiative
-- Infosys BPM and T-Mobile won the SSON North America Impact Award 2024,
in the Creative Talent Management category
-- Infosys BPM recognized at the ISG Digital Case Study Research and Awards
2023 with 3 STANDOUT winners: Banking and Financial Services (India),
Communications (Asia Pacific), Retail (UK, Ireland, Scandinavia)
-- Infosys BPM won the Best Workplace Diversity Award, at HR Tech Summit &
Awards 2024
About Infosys
Infosys is a global leader in next-generation digital services and consulting. Over 300,000 of our people work to amplify human potential and create the next opportunity for people, businesses and communities. We enable clients in more than 56 countries to navigate their digital transformation. With over four decades of experience in managing the systems and workings of global enterprises, we expertly steer clients, as they navigate their digital transformation powered by the cloud. We enable them with an AI-powered core, empower the business with agile digital at scale and drive continuous improvement with always-on learning through the transfer of digital skills, expertise, and ideas from our innovation ecosystem. We are deeply committed to being a well-governed, environmentally sustainable organization where diverse talent thrives in an inclusive workplace.
Visit www.infosys.com [http://www.infosys.com/] to see how Infosys can help your enterprise navigate your next.
Safe Harbor
Certain statements in this release concerning our future growth prospects, our future financial or operating performance, and the McCamish cybersecurity incident review and notification process are forward-looking statements intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results or outcomes to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the execution of our business strategy, our ability to attract and retain personnel, our ability to effectively implement a hybrid working model, macro-economic and geo-political situations, technological innovations such as Generative AI, the complex and evolving regulatory landscape including immigration regulation changes, onerous terms and conditions in customer contracts, our ESG vision, our capital allocation policy and expectations concerning our market position, future operations, margins, profitability, liquidity, capital resources, our corporate actions including acquisitions, the findings of the ongoing review of the extent and nature of accessed or exfiltrated data in relation to the McCamish cybersecurity incident and reaction to such findings, the timing of the review and notification process, and the amount of any additional costs, including indemnities or damages / claims, resulting from the incident. Important factors that may cause actual results or outcomes to differ from those implied by the forward-looking statements are discussed in more detail in our US Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2023. These filings are available at www.sec.gov [https://url.us.m.mimecastprotect.com/s/iUVrCERK7kTP8MKpSN24Or?domain=sec.gov/]. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.
Infosys Limited and subsidiaries Extracted from the Condensed Consolidated Balance Sheet under IFRS as at: (Dollars in millions) March 31, 2024 March 31, 2023 ASSETS Current assets Cash and cash equivalents 1,773 1,481 Current investments 1,548 841 Trade receivables 3,620 3,094 Unbilled revenue 1,531 1,861 Other Current assets 2,250 1,349 Total current assets 10,722 8,626 Non-current assets Property, plant and equipment and Right-of-use assets 2,323 2,516 Goodwill and other Intangible assets 1,042 1,095 Non-current investments 1,404 1,530 Unbilled revenue 213 176 Other non-current assets 819 1,369 Total non-current assets 5,801 6,686 Total assets 16,523 15,312 LIABILITIES AND EQUITY Current liabilities Trade payables 474 470 Unearned revenue 880 872 Employee benefit obligations 314 292 Other current liabilities and provisions 2,983 3,135 Total current liabilities 4,651 4,769 Non-current liabilities Lease liabilities 767 859 Other non-current liabilities 500 460 Total non-current liabilities 1,267 1,319 Total liabilities 5,918 6,088 Total equity attributable to equity holders of the company 10,559 9,172 Non-controlling interests 46 52 Total equity 10,605 9,224 Total liabilities and equity 16,523 15,312
Extracted from the Condensed Consolidated statement of Comprehensive Income under IFRS for: (Dollars in millions except per equity share data) 3 months ended 3 months ended Year ended Year ended March 31, 2024 March 31, 2023 March 31, 2024 March 31, 2023 --- Revenues 4,564 4,554 18,562 18,212 Cost of sales 3,219 3,164 12,975 12,709 --- Gross profit 1,345 1,390 5,587 5,503 --- Operating expenses: Selling and marketing expenses 209 202 842 776 Administrative expenses 219 231 911 902 --- Total operating expenses 428 433 1,753 1,678 --- Operating profit 917 957 3,834 3,825 Other income, net (3) 315 72 512 300 --- Profit before income taxes 1,232 1,029 4,346 4,125 Income tax expense 273 284 1,177 1,142 --- Net profit (before minority interest) 959 745 3,169 2,983 --- Net profit (after minority interest) 958 744 3,167 2,981 Basic EPS ($) (4) 0.23 0.18 0.77 0.71 Diluted EPS ($) (4) 0.23 0.18 0.76 0.71
NOTES:
1. The above information is extracted from the audited condensed
consolidated Balance sheet and Statement of Comprehensive Income for the
quarter and year ended March 31, 2024, which have been taken on record at
the Board meeting held on April 18, 2024.
2. A Fact Sheet providing the operating metrics of the Company can be
downloaded from www.infosys.com [http://www.infosys.com/].
3. Other income is net of Finance Cost.
4. Includes interest income (pre-tax) of $232Mn and reversal of net tax
provisions amounting to $5Mn on account of orders received under sections
250 & 254 of the Income Tax Act, 1961, from the Income Tax Authorities in
India for certain assessment years. This has resulted in a positive
impact on the consolidated Basic and Diluted EPS by approximately $0.06
for the quarter and year ended March 31, 2024.
5. As the quarter and year ended figures are taken from the source and
rounded to the nearest digits, the quarter figures in this statement
added up to the figures reported for the previous quarters might not
always add up to the year ended figures reported in this statement.
IFRS-INR Press Release: https://www.infosys.com/investors/reports-filings/quarterly-results/2023-2024/q4/documents/ifrs-inr-press-release.pdf [https://www.infosys.com/investors/reports-filings/quarterly-results/2023-2024/q4/documents/ifrs-inr-press-release.pdf]
Fact sheet: https://www.infosys.com/investors/reports-filings/quarterly-results/2023-2024/q4/documents/fact-sheet.pdf [https://www.infosys.com/investors/reports-filings/quarterly-results/2023-2024/q4/documents/fact-sheet.pdf]
Logo: https://mma.prnewswire.com/media/633365/Infosys_Logo.jpg [https://mma.prnewswire.com/media/633365/Infosys_Logo.jpg]
View original content:https://www.prnewswire.co.uk/news-releases/infosys-strong-large-deal-tcv-of-4-5-billion-in-q4-and-record-17-7-billion-in-fy24-create-robust-foundation-for-growth-302121003.html [https://www.prnewswire.co.uk/news-releases/infosys-strong-large-deal-tcv-of-4-5-billion-in-q4-and-record-17-7-billion-in-fy24-create-robust-foundation-for-growth-302121003.html]
Photo: https://mma.prnewswire.com/media/633365/Infosys_Logo.jpg InfosysCONTACT: Investor Relations, Sandeep Mahindroo, +91 80 3980 1018,
Sandeep_Mahindroo@infosys.com, Media Relations, Rishi Basu, +91 80 4156
3998, Rajarshi.Basu@infosys.com, Harini Babu, +1 469 996 3516,
Harini_Babu@infosys.com
