Infosys (NYSE:INFY) Releases Quarterly Earnings Results, Misses Estimates By $0.01 EPS

Key Points

• Infosys missed quarterly earnings estimates, reporting adjusted EPS of $0.20 versus the $0.21 analysts expected. The company also posted a strong return on equity of 32.64% and a net margin of 16.44%.
• Revenue growth slowed, with constant-currency revenue up 2.4% year over year and 1% sequentially, pressured by softer volumes, weaker pricing, and a client termination. Infosys lowered its FY2027 revenue guidance to 1.5%-3%.
• AI remained a key growth driver, with AI services reaching 8.2% of revenue and growing at a double-digit sequential pace. The company also maintained strong profitability, posting a 21.1% operating margin and $955 million in free cash flow.

Infosys (NYSE:INFY - Get Free Report) issued its earnings results on Thursday. The technology company reported $0.20 EPS for the quarter, missing analysts' consensus estimates of $0.21 by ($0.01), Zacks reports. Infosys had a return on equity of 32.64% and a net margin of 16.44%.

Here are the key takeaways from Infosys' conference call:

• Infosys announced that Ashiss Dash will succeed Salil Parekh as CEO, with a transition period over the next several months. Management emphasized Dash’s long tenure, internal experience, and continuity with the company’s culture and strategy.
• Q1 constant-currency revenue growth was 2.4% year over year and 1% sequentially, but results were held back by softer volumes, weaker pricing, and a one-time client termination. The company also revised FY2027 revenue guidance down to 1.5%-3% from prior expectations.
• Infosys highlighted continued strength in AI services, which reached 8.2% of revenue and has been growing at a double-digit sequential rate. Management said AI work is broadening across the six areas of its strategy and is becoming a key long-term growth engine.
• The company posted strong profitability and cash generation, with operating margin at 21.1% and free cash flow of $955 million. Infosys also reiterated margin guidance of 20%-22% for the year.
• Large deal momentum remained solid, with $3.6 billion of large deal wins and 61% net new in the quarter. Management pointed to vendor consolidation opportunities and healthy AI-led transformation demand as support for the pipeline.

Infosys Price Performance

NYSE:INFY traded down $0.48 during mid-day trading on Thursday, hitting $10.45. The company's stock had a trading volume of 7,848,948 shares, compared to its average volume of 18,426,668. The business's fifty day moving average is $11.66 and its two-hundred day moving average is $13.78. The stock has a market cap of $42.27 billion, a price-to-earnings ratio of 13.06, a PEG ratio of 1.46 and a beta of 0.90. Infosys has a 1 year low of $10.30 and a 1 year high of $30.00.

Institutional Trading of Infosys

Several hedge funds and other institutional investors have recently bought and sold shares of the stock. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its holdings in Infosys by 6.4% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 63,155 shares of the technology company's stock worth $1,153,000 after purchasing an additional 3,804 shares during the period. NewEdge Advisors LLC raised its stake in shares of Infosys by 79.9% during the 1st quarter. NewEdge Advisors LLC now owns 54,978 shares of the technology company's stock worth $1,003,000 after buying an additional 24,426 shares during the period. Finally, Dynamic Technology Lab Private Ltd acquired a new position in shares of Infosys during the 1st quarter worth approximately $239,000. 16.20% of the stock is owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades

Several brokerages have weighed in on INFY. Wells Fargo & Company set a $11.00 target price on Infosys and gave the stock an "equal weight" rating in a report on Friday, June 26th. JPMorgan Chase & Co. decreased their price target on Infosys from $16.80 to $12.70 and set an "overweight" rating for the company in a research note on Wednesday, June 24th. Susquehanna cut their price target on shares of Infosys from $14.00 to $12.00 and set a "neutral" rating on the stock in a research note on Friday, July 10th. Stifel Nicolaus set a $13.00 price objective on shares of Infosys and gave the stock a "hold" rating in a research note on Thursday, July 16th. Finally, TD Cowen cut their target price on Infosys from $13.00 to $10.00 and set a "hold" rating on the stock in a research report on Thursday, July 9th. One equities research analyst has rated the stock with a Buy rating, seven have given a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat, the company has an average rating of "Hold" and an average price target of $12.50.

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.

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