Infosys beats Q3 earnings estimates; revenue comes in line

Infosys (NYSE: INFY) reported better-than-expected earnings for the third quarter of 2020 while revenue matched forecasts. Shares were up 6.5% in premarket hours on Friday.

Total revenues increased 8.6% year-over-year to $3.24 billion, coming in line with estimates. Revenues increased 9.5% in constant currency.

Net income was $627 million, or $0.15 per share, compared to $502 million, or $0.12 per share, last year. Analysts had forecast earnings of $0.14 per share.

Nilanjan Roy, CFO, said “Operating margins improved further during the quarter driven by relentless cost optimization and operating leverage. Cash generation was extremely strong with cumulative free cash flow crossing $1.5 billion. Return on Equity increased further to 25.9% driven by margin expansion and increased shareholder payouts.”

Digital revenues grew around 40% year-over-year to $1.31 billion while core revenues fell nearly 6% to $1.92 billion. Large deal signings during the quarter amounted to $1.8 billion.

Also read: Constellation Brands Q3 2020 Earnings Report

The number of $100 million-clients totaled 28 at the end of the quarter and the number of $50 million-clients amounted to 61. The top 25 clients contributed 34.2% to total revenues during the quarter.

Operating profit increased 5.4% year-over-year to $711 million. Operating margin was 21.9%.

For fiscal year 2020, the company expects revenue to grow 10-10.5% in constant currency. Operating margin is expected to grow 21-23%.

In a separate press release, Infosys stated that its audit committee found no evidence of financial impropriety or executive misconduct during its investigation related to whistleblower complaints.

Get access to timely and accurate verbatim transcripts that are published within hours of the event.