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.
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