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Infosys Limited (INFY - Free Report) shares soared 8.4% on Thursday after the India-based IT services provider reported strong first-quarter fiscal 2025 results. The company’s upbeat sales guidance for fiscal 2025 also boosted investors’ confidence in the stock as it raised their hopes that the new trends in AI may boost IT spending and end a year-long slump in corporate tech spending.
Infosys reported first-quarter fiscal 2025 earnings of 18 cents per share, which matched the Zacks Consensus Estimate. The bottom line improved 5.3% from the year-ago quarter’s earnings of 17 cents per share.
The company’s fiscal first-quarter revenues improved 2.1% to $4.71 billion from the year-ago quarter’s revenues of $4.62 billion. The top line also surpassed the Zacks Consensus Estimate of $4.67 billion. In terms of constant currency (cc), the metric improved by 2.5%.
Infosys' year-to-date (YTD) share price performance has been marked by significant volatility, reflecting broader market fluctuations and company-specific developments. YTD, INFY stock has soared 21%, underperforming the Zacks Computers – IT Services industry’s growth of 34.2%.
Image Source: Zacks Investment Research
Top-Line Details
Revenues across North America recorded a year-over-year decline of 1.2% on a reported basis. Revenues across India, Europe and the Rest of the World increased 18.4%, 8.6% and 0.6%, respectively, on a reported basis. On a cc basis, North America registered a decline of 1.2%. On a cc basis, India, Europe and the Rest of the World registered growth of 19.9%, 9.1% and 2.3%, respectively.
Segment-wise, revenues from Manufacturing increased 6.4% to $693 million, Life Sciences revenues grew 2.7% to $344 million, and Energy, Utilities, Resources & Services sales climbed 5.2% to $627 million. Communication rose 5.2% to $570 million, and Hi-Tech division sales increased 1.5% to $377 million. The Others business unit’s revenues improved 1.7% to $156 million.
In the first quarter of fiscal 2025, the company’s Retail segment revenues declined 3% to $651 million, and Financial Services fell 0.1% to $1.3 billion.
Infosys added 87 clients in the fiscal first quarter. It signed multiple large deals of contract values worth $4.1 billion. The company reported that its clients, worth more than $100 million, now add up to 40 and were up from 38 in the year-ago quarter and flat from the fourth quarter of fiscal 2024 level.
Other Financial Details
Gross profits increased 3.5% year over year to $1.46 billion. The gross margin expanded 40 bps on a year-over-year basis to 30.9%.
The company’s operating income increased 3.4% year over year to $994 million. Meanwhile, the operating margin improved 30 bps to 21.1% year over year.
Infosys ended the fiscal first quarter with consolidated cash and investments of $4.31 billion, down from the $4.68 billion recorded at the of fiscal 2024. During the fiscal first quarter, the company generated free cash flow of $1.09 billion.
INFY Raises FY25 Outlook
Buoyed by the strong first-quarter performance, Infosys raised its revenue guidance for full-fiscal 2025. The company now projects full-year revenues to grow 3-4% on a constant currency basis, up from the earlier guidance range of 1-3%. Moreover, it expects a fiscal 2025 operating margin in the range of 20-22%.
The Zacks Consensus Estimate for NVIDIA’s second-quarter fiscal 2025 earnings has been revised 5 cents upward to 63 cents per share over the past 60 days. Shares of NVDA have skyrocketed 144.5% YTD.
The Zacks Consensus Estimate for Micron’s fourth-quarter fiscal 2024 earnings has been revised by 8 cents northward to $1.08 per share in the past 30 days. Shares of DBX have plunged 37.6% YTD.
The Zacks Consensus Estimate for CyberArk’s second-quarter 2024 earnings has been revised upward by a penny to 41 cents per share in the past 60 days. Shares of CYBR have declined 19.5% YTD.
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Infosys (INFY) Gains 8% on In-Line Q1 Earnings, Solid Sales View
Infosys Limited (INFY - Free Report) shares soared 8.4% on Thursday after the India-based IT services provider reported strong first-quarter fiscal 2025 results. The company’s upbeat sales guidance for fiscal 2025 also boosted investors’ confidence in the stock as it raised their hopes that the new trends in AI may boost IT spending and end a year-long slump in corporate tech spending.
Infosys reported first-quarter fiscal 2025 earnings of 18 cents per share, which matched the Zacks Consensus Estimate. The bottom line improved 5.3% from the year-ago quarter’s earnings of 17 cents per share.
The company’s fiscal first-quarter revenues improved 2.1% to $4.71 billion from the year-ago quarter’s revenues of $4.62 billion. The top line also surpassed the Zacks Consensus Estimate of $4.67 billion. In terms of constant currency (cc), the metric improved by 2.5%.
Infosys' year-to-date (YTD) share price performance has been marked by significant volatility, reflecting broader market fluctuations and company-specific developments. YTD, INFY stock has soared 21%, underperforming the Zacks Computers – IT Services industry’s growth of 34.2%.
Image Source: Zacks Investment Research
Top-Line Details
Revenues across North America recorded a year-over-year decline of 1.2% on a reported basis. Revenues across India, Europe and the Rest of the World increased 18.4%, 8.6% and 0.6%, respectively, on a reported basis. On a cc basis, North America registered a decline of 1.2%. On a cc basis, India, Europe and the Rest of the World registered growth of 19.9%, 9.1% and 2.3%, respectively.
Segment-wise, revenues from Manufacturing increased 6.4% to $693 million, Life Sciences revenues grew 2.7% to $344 million, and Energy, Utilities, Resources & Services sales climbed 5.2% to $627 million. Communication rose 5.2% to $570 million, and Hi-Tech division sales increased 1.5% to $377 million. The Others business unit’s revenues improved 1.7% to $156 million.
In the first quarter of fiscal 2025, the company’s Retail segment revenues declined 3% to $651 million, and Financial Services fell 0.1% to $1.3 billion.
Infosys added 87 clients in the fiscal first quarter. It signed multiple large deals of contract values worth $4.1 billion. The company reported that its clients, worth more than $100 million, now add up to 40 and were up from 38 in the year-ago quarter and flat from the fourth quarter of fiscal 2024 level.
Other Financial Details
Gross profits increased 3.5% year over year to $1.46 billion. The gross margin expanded 40 bps on a year-over-year basis to 30.9%.
The company’s operating income increased 3.4% year over year to $994 million. Meanwhile, the operating margin improved 30 bps to 21.1% year over year.
Infosys ended the fiscal first quarter with consolidated cash and investments of $4.31 billion, down from the $4.68 billion recorded at the of fiscal 2024. During the fiscal first quarter, the company generated free cash flow of $1.09 billion.
INFY Raises FY25 Outlook
Buoyed by the strong first-quarter performance, Infosys raised its revenue guidance for full-fiscal 2025. The company now projects full-year revenues to grow 3-4% on a constant currency basis, up from the earlier guidance range of 1-3%. Moreover, it expects a fiscal 2025 operating margin in the range of 20-22%.
Zacks Rank and Other Stocks to Consider
Currently, Infosys carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the broader technology sector are NVIDIA (NVDA - Free Report) , Micron Technology (MU - Free Report) and CyberArk Software (CYBR - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NVIDIA’s second-quarter fiscal 2025 earnings has been revised 5 cents upward to 63 cents per share over the past 60 days. Shares of NVDA have skyrocketed 144.5% YTD.
The Zacks Consensus Estimate for Micron’s fourth-quarter fiscal 2024 earnings has been revised by 8 cents northward to $1.08 per share in the past 30 days. Shares of DBX have plunged 37.6% YTD.
The Zacks Consensus Estimate for CyberArk’s second-quarter 2024 earnings has been revised upward by a penny to 41 cents per share in the past 60 days. Shares of CYBR have declined 19.5% YTD.