Infosys (NYSE:INFY) Releases Earnings Results

Infosys (NYSE:INFY) issued its quarterly earnings results on Friday. The technology company reported $0.20 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.21 by ($0.01), Zacks reports. Infosys had a net margin of 16.38% and a return on equity of 33.91%. The business had revenue of $5.19 billion during the quarter, compared to the consensus estimate of $5.12 billion.

Here are the key takeaways from Infosys’ conference call:

• AI revenue grew 29% sequentially and reached 10.5% of total revenue, reflecting rising enterprise-wide adoption and strong demand for Infosys’ Topaz capabilities and AI-led transformation services.
• Large-deal wins totaled $5.2 billion, with 62% net new, including a more than $2 billion, seven-year mega deal expected to contribute over 1% revenue growth in FY2028; management also cited a healthy pipeline with additional mega deals.
• Q2 revenue growth of 1.2% sequentially and 1.5% year over year was below expectations, prompting Infosys to reduce FY2027 constant-currency revenue-growth guidance to 1%-2% amid cautious spending, weaker volumes, and heightened pricing pressure.
• Operating margin held near 21% and free cash flow was strong at $928 million, but second-half margins face pressure from compensation hikes, seasonality, AI-related productivity sharing, and large-deal ramp-ups; the company maintained its 20%-22% margin outlook and announced a 13% higher interim dividend.

Infosys Trading Down 6.6%

Infosys stock opened at $12.34 on Friday. The stock has a 50-day moving average price of $11.45 and a two-hundred day moving average price of $11.93. Infosys has a 12 month low of $10.12 and a 12 month high of $30.00. The company has a market capitalization of $49.99 billion, a PE ratio of 15.24, a P/E/G ratio of 3.08 and a beta of 0.88.

More Infosys News

Here are the key news stories impacting Infosys this week:

• Positive Sentiment: Infosys reported a 29% sequential increase in AI revenue, highlighting demand for its AI-first consulting and technology services. Infosys AI revenue growth
• Positive Sentiment: Second-quarter large-deal total contract value reached $5.2 billion, with 62% coming from net-new business, potentially supporting future revenue growth. Operating margin remained stable at 21%, within the company’s 20%-22% target range. Infosys AI strategy and deal wins
• Neutral Sentiment: Jefferies maintained a Hold rating, suggesting the firm sees a more balanced risk-reward profile following the earnings update. Jefferies Hold rating
• Negative Sentiment: Revenue of $5.145 billion rose 1.5% year over year and 1.2% sequentially in constant currency, but fell short of expectations. Earnings per share of $0.20 also missed the $0.21 consensus estimate. Infosys revenue and guidance miss
• Negative Sentiment: Infosys reduced its FY2027 constant-currency revenue-growth guidance to 1%-2%. Its reported revenue outlook of $20.4 billion-$20.6 billion was broadly in line with consensus, but the lower growth range raised concerns about weak demand and limited near-term expansion. Infosys lowers revenue forecast
• Negative Sentiment: Net profit and EPS declined despite modest revenue growth, reinforcing concerns that AI investments and current business conditions are not yet translating into stronger earnings. Infosys quarterly earnings

Analyst Ratings Changes

A number of research firms have issued reports on INFY. HSBC set a $11.47 target price on Infosys and gave the company a “hold” rating in a research report on Friday, July 24th. BMO Capital Markets reissued a “market perform” rating and issued a $12.00 target price (down from $13.00) on shares of Infosys in a report on Friday, July 24th. JPMorgan Chase & Co. restated a “neutral” rating and issued a $10.90 price target (down from $12.70) on shares of Infosys in a research note on Friday, July 24th. Stifel Nicolaus set a $13.00 price target on shares of Infosys and gave the company a “hold” rating in a report on Thursday, July 16th. Finally, Weiss Ratings cut shares of Infosys from a “hold (c-)” rating to a “sell (d+)” rating in a research report on Tuesday, July 28th. Ten analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Reduce” and a consensus price target of $11.45.

Infosys Company Profile

Infosys Ltd. is a digital services and consulting company, which engages in the provision of end-to-end business solutions. It operates through the following segments: Financial Services, Retail, Communication, Energy, Utilities, Resources, and Services, Manufacturing, Hi-Tech, Life Sciences, and All Other. The company was founded by Dinesh Krishnan Swamy, Senapathy Gopalakrishnan, Narayana Ramarao Nagavara Murthy, Raghavan N. S., Ashok Arora, Nandan M. Nilekani, and S. D. Shibulal on July 2, 1981 and is headquartered in Bangalore, India.