Differentiated digital and cloud capabilities drive broad-based growth; healthy operating margins at 23.5%
BENGALURU, India, Jan. 12, 2022 /PRNewswire/ -- Infosys (NSE: INFY) (BSE: INFY) (NYSE: INFY), a global leader in next-generation digital services and consulting, delivered strong Q3 performance with sequential growth of 7.0% in a seasonally weak quarter and year-on-year growth of 21.5% in constant currency. Growth remained broad-based and deal momentum robust, with digital transformation rapidly scaling across verticals and regions. Large deal wins accelerated with TCV of $2.53 billion in Q3. Operating margin for the quarter was healthy at 23.5%, with Free Cash Flow conversion at 92.6%. Our talent strategy continued to be a key focus area marked by efforts to further strengthen employee skilling and well-being while nurturing our workforce to fulfil client requirements.
"Our strong performance and market share gains are a testament to the enormous confidence our clients have in us to help them in their digital transformation. This stems from four years of sustained strategic focus on areas of relevance for our clients in digital and cloud, continued re-skilling of our people, and deep relationships of trust that our clients have with us. This is reflected in an upgrade in our revenue guidance to 19.5%-20.0% for FY22. We expect the healthy technology spend to continue with large enterprises progressing on their digital transformations," said Salil Parekh, CEO and MD. "I am immensely proud of the relentless commitment of our employees during these challenging times and grateful for their extraordinary efforts in delivering success for our clients", he added.
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42.6% YoY |
21.5% YoY7.0% QoQ |
23.5% |
13.1% YoY |
$2.53 bn |
|
CC Digital growth |
CC Revenue growth |
Operating margin |
Increase in EPS(INR terms) |
Large deal signings |
1. Key highlights:
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For the quarter ended December 31, 2021 |
For nine months ended December 31, 2021 |
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- Revenues in CC terms grew by 21.5% YoY and 7.0% QoQ - Reported revenues at $4,250 million, growth of 20.9% YoY - Digital revenues at 58.5% of total revenues, YoY CC growth of 42.6% - Operating margin at 23.5%, decline of 1.9% YoY and 0.1% QoQ - Basic EPS at $0.18, growth of 11.2% YoY - FCF at $719 million, YoY decline of 6.9%; FCF conversion at 92.6% of net profit |
- Revenues in CC terms grew by 19.3% YoY - Reported revenues at $12,031 million, growth of 20.9% YoY - Digital revenues at 56.3% of total revenues, YoY CC growth of 42.1% - Operating margin at 23.6%, decline of 1.0% YoY - Basic EPS at $0.52, growth of 16.1% YoY - FCF at $2,294 million, YoY growth of 5.5%; FCF conversion at 103.6% of net profit |
"Despite the cost escalations driven primarily by supply side challenges, we delivered another quarter of healthy margins, with improved cost optimization, continued operating leverage and a stable pricing environment," said Nilanjan Roy, Chief Financial Officer. "We continue to prioritize investments in talent acquisition and development and have further increased our global graduate hiring program to over 55,000 for FY22 to support our growth ambitions", he added.
2. Client wins & Testimonials
2
3. Recognitions
About Infosys
Infosys is a global leader in next-generation digital services and consulting. We enable clients in more than 50 countries to navigate their digital transformation. With over four decades of experience in managing the systems and workings of global enterprises, we expertly steer our clients through their digital journey. We do it by enabling the enterprise with an AI-powered core that helps prioritize the execution of change. We also empower the business with agile digital at scale to deliver unprecedented levels of performance and customer delight. Our always-on learning agenda drives their continuous improvement through building and transferring digital skills, expertise, and ideas from our innovation ecosystem.
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, financial expectations and plans for navigating the COVID-19 impact on our employees, clients and stakeholders 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 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 COVID-19 and the effects of government and other measures seeking to contain its spread, risks related to an economic downturn or recession in India, the United States and other countries around the world, changes in political, business, and economic conditions, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry and the outcome of pending litigation and government investigation. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2021. 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."
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Infosys Limited and subsidiaries |
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Extracted from the Condensed Consolidated Balance Sheet under IFRS as at: (Dollars in millions) |
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|
December 31, 2021 |
March 31, 2021 |
|
|
ASSETS |
||
|
Current assets |
||
|
Cash and cash equivalents |
2,145 |
3,380 |
|
Current investments |
558 |
320 |
|
Trade receivables |
3,036 |
2,639 |
|
Unbilled revenue |
1,325 |
1,030 |
|
Other Current assets |
1,089 |
938 |
|
Total current assets |
8,153 |
8,307 |
|
Non-current assets |
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|
Property, plant and equipment and Right-of-use assets |
2,433 |
2,519 |
|
Goodwill and other Intangible assets |
1,062 |
1,115 |
|
Non-current investments |
1,623 |
1,623 |
|
Unbilled revenue |
126 |
81 |
|
Other non-current assets |
1,276 |
1,180 |
|
Total non-current assets |
6,520 |
6,518 |
|
Total assets |
14,673 |
14,825 |
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LIABILITIES AND EQUITY |
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|
Current liabilities |
||
|
Trade payables |
506 |
362 |
|
Unearned revenue |
833 |
554 |
|
Employee benefit obligations |
298 |
276 |
|
Other current liabilities and provisions |
2,555 |
2,072 |
|
Total current liabilities |
4,192 |
3,264 |
|
Non-current liabilities |
||
|
Lease liabilities |
603 |
627 |
|
Other non-current liabilities |
491 |
432 |
|
Total non-current liabilities |
1,094 |
1,059 |
|
Total liabilities |
5,286 |
4,323 |
|
Total equity attributable to equity holders of the company |
9,335 |
10,442 |
|
Non-controlling interests |
52 |
60 |
|
Total equity |
9,387 |
10,502 |
|
Total liabilities and equity |
14,673 |
14,825 |
|
Extracted from the Condensed Consolidated statement of Comprehensive Income under IFRS for: |
||||
|
(Dollars in millions except per equity share data) |
||||
|
3 months ended December 31, 2021 |
3 months ended December 31, 2020 |
9 months ended December 31, 2021 |
9 months ended December 31, 2020 |
|
|
Revenues |
4,250 |
3,516 |
12,031 |
9,948 |
|
Cost of sales |
2,856 |
2,275 |
8,041 |
6,471 |
|
Gross profit |
1,394 |
1,241 |
3,990 |
3,477 |
|
Operating expenses: |
||||
|
Selling and marketing expenses |
177 |
156 |
513 |
459 |
|
Administrative expenses |
219 |
192 |
642 |
577 |
|
Total operating expenses |
396 |
348 |
1,155 |
1,036 |
|
Operating profit |
998 |
893 |
2,835 |
2,441 |
|
Other income, net (3) |
61 |
77 |
203 |
203 |
|
Profit before income taxes |
1,059 |
970 |
3,038 |
2,644 |
|
Income tax expense |
283 |
263 |
823 |
718 |
|
Net profit (before minority interest) |
776 |
707 |
2,215 |
1,926 |
|
Net profit (after minority interest) |
774 |
705 |
2,211 |
1,916 |
|
Basic EPS ($) |
0.18 |
0.17 |
0.52 |
0.45 |
|
Diluted EPS ($) |
0.18 |
0.17 |
0.52 |
0.45 |
NOTES:
1. The above information is extracted from the audited condensed consolidated Balance sheet and Statement of Comprehensive Income for the quarter and nine months ended December 31, 2021 which have been taken on record at the Board meeting held on January 12, 2022.
2. A Fact Sheet providing the operating metrics of the Company can be downloaded from www.infosys.com.
3. Other Income is net of Finance Cost.
IFRS-INR Press Release : https://www.infosys.com/investors/reports-filings/quarterly-results/2021-2022/q3/documents/ifrs-inr-press-release.pdf
Fact sheet: https://www.infosys.com/investors/reports-filings/quarterly-results/2021-2022/q3/documents/fact-sheet.pdf
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