In This Article:
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Revenue Growth: 4.2% in constant currency terms for FY25; 4.8% year-on-year growth in Q4.
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Operating Margin: 21.1% for FY25; 21% in Q4.
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Free Cash Flow: $4.1 billion for FY25, 129% of net profit.
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Large Deals: $11.6 billion in FY25; $2.6 billion in Q4 with 63% net new.
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EPS Growth: 8.3% growth in EPS terms on a normalized basis for FY25.
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Headcount: 323,578 at the end of FY25, an increase of 6,000 year-on-year.
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Attrition Rate: 14.1% for FY25.
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Guidance for FY26: Revenue growth of 0% to 3% in constant currency terms; operating margin of 20% to 22%.
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Dividend: Proposed final dividend of INR22 for FY25, total payout of INR43.
Release Date: April 17, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Infosys Ltd (NYSE:INFY) reported a revenue growth of 4.2% in constant currency terms for FY25, with a strong operating margin of 21.1%.
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The company generated $4.1 billion in free cash flow, marking its highest ever, which was 129% of net profit.
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Infosys Ltd (NYSE:INFY) closed 96 large deals in FY25 with a total contract value (TCV) of $11.6 billion, 56% of which were net new.
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The company is seeing growing demand for AI-led transformation projects, leveraging its Infosys Topaz AI-powered services.
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Operating margins improved by 50 basis points over FY24, despite headwinds from salary increases and acquisition-related costs.
Negative Points
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Sequentially, revenue declined by 3.5% in constant currency terms in Q4 due to reduction in third-party costs and seasonal weakness.
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The guidance for FY26 indicates a lower growth range of 0% to 3% in constant currency terms, reflecting uncertainty in the macroeconomic environment.
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There is a noted softness in the communications sector, with discretionary spending under pressure.
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The manufacturing sector is experiencing lower budgets, particularly in the auto and industrial manufacturing segments.
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The company anticipates a reduction in third-party revenues for FY26 compared to FY25, which could impact overall revenue growth.
Q & A Highlights
Q: Can you explain the factors behind the revenue decline in Q4 and whether it was concentrated in March or spread throughout the quarter? A: Jayesh Sanghrajka, CFO: Two-thirds of the 3.5% revenue decline was due to a reduction in third-party costs and related revenue, with some deals slipping. This decline was higher than anticipated and primarily occurred towards the end of the quarter.
Q: How does the guidance for FY26 account for seasonality and uncertainty? A: Jayesh Sanghrajka, CFO: The guidance reflects normal seasonality, but given the heightened uncertainty, a three-point guidance range was provided. The lower end assumes further deterioration, while the upper end assumes a steady to marginally improving environment.