Infosys (NYSE:INFY) Releases Earnings Results

Infosys (NYSE:INFY) issued its earnings results on Friday. The technology company reported $0.20 earnings per share for the quarter, missing analysts’ consensus estimates of $0.21 by ($0.01), Zacks reports. Infosys had a return on equity of 33.91% and a net margin of 16.38%.

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 Stock Performance

Shares of INFY traded down $0.58 during midday trading on Friday, hitting $12.63. 21,795,999 shares of the stock traded hands, compared to its average volume of 18,929,707. The business’s 50 day moving average price is $11.45 and its two-hundred day moving average price is $11.93. The firm has a market capitalization of $51.17 billion, a PE ratio of 15.60, a price-to-earnings-growth ratio of 2.97 and a beta of 0.88. Infosys has a 1-year low of $10.12 and a 1-year high of $30.00.

Infosys News Roundup

Here are the key news stories impacting Infosys this week:

• Positive Sentiment: Infosys reported $5.2 billion in large-deal total contract value during the quarter, with 62% representing net-new business. The company also said AI-related revenue increased 29% sequentially, supporting its longer-term growth strategy. Infosys AI strategy and Q2 results
• Positive Sentiment: Q2 revenue reached $5.145 billion, up 1.5% year over year and 1.2% sequentially in constant currency. Operating margin remained stable at 21%, within the company’s 20%-22% target range. Infosys quarterly performance
• Neutral Sentiment: Infosys issued FY2027 revenue guidance of $20.4 billion to $20.6 billion, compared with a consensus estimate of $20.4 billion. It retained its operating-margin guidance of 20%-22%, but the forecast implies only 1%-2% revenue growth, limiting near-term upside expectations.
• Negative Sentiment: Quarterly EPS was $0.20, below the $0.21 consensus estimate, while reports highlighted a decline in net profit despite revenue growth. The earnings miss and reduced annual growth outlook were the primary reasons investors questioned whether the AI revenue acceleration can offset broader profitability and demand concerns. Why Infosys AI growth did not offset earnings concerns

Wall Street Analyst Weigh In

A number of brokerages recently weighed in on INFY. HSBC set a $11.47 price objective on shares of Infosys and gave the company a “hold” rating in a research report on Friday, July 24th. Weiss Ratings cut shares of Infosys from a “hold (c-)” rating to a “sell (d+)” rating in a report on Tuesday, July 28th. BMO Capital Markets restated a “market perform” rating and issued a $12.00 target price (down from $13.00) on shares of Infosys in a research note on Friday, July 24th. TD Cowen reaffirmed a “hold” rating and set a $9.00 target price (down from $10.00) on shares of Infosys in a report on Friday, July 24th. Finally, Stifel Nicolaus set a $13.00 price target on Infosys and gave the stock a “hold” rating in a research report on Thursday, July 16th. Ten analysts have rated the stock with a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat.com, the company presently has a consensus rating of “Reduce” and a consensus price target of $11.45.

About Infosys

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.