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FY25 guidance - revenue growth of 1%-3% and operating margin of 20%-22%
BENGALURU, India, April 18, 2024 /PRNewswire/ -- Infosys (NSE: INFY) (BSE: INFY) (NYSE: 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.
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 20.1% Q4 Operating Margin | 10.0% FY 30.2% Q4 YoY EPS Increase (₹ terms) | $17.7 Bn FY $4.5 Bn Q4 Large Deal TCV | $2.9 Bn FY | ||||
Flat Q4 | $848 Mn Q4 | |||||||
YoY CC Growth | Free Cash Flow | |||||||
Guidance for FY25:
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
"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
6. Recognitions & Awards
AI and Cloud Services
Key Digital Services
Industry & Solutions
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 to see how Infosys (NSE, BSE, NYSE: INFY) 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. 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 | |
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:
IFRS-INR Press Release: 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
